EO12866_RFS standards 2060-AR43 NPRM FRN_20130123.docx

*** Interagency Working Comments on draft rule under E.O. 12866 and EO 13563Review -

Revised Version - Do Not Cite, Quote, or Release During Review. Subject to further policy 

review. ***

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2012-0546; FRL-9678-8]

RIN 2060-AR43

Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

SUMMARY: Under section 211(o) of the Clean Air Act, the Environmental Protection Agency 

is required to set the renewable fuel standards each November for the following year. In general 

the standards are designed to ensure that the applicable volumes of renewable fuel specified in 

the statute are used. However, the statue specifies that EPA is to project the volume of cellulosic 

biofuel production for the upcoming year and must base the cellulosic biofuel standard on that 

projected volume if it is less than the applicable volume set forth in the Act. EPA is today 

proposing a projected cellulosic biofuel volume for 2013 that is below the applicable volume 

specified in the Act. EPA is proposing that the applicable volumes of advanced biofuel and total 

renewable fuel would remain at the statutory levels for 2013. Finally, today's action also 

proposes annual percentage standards for cellulosic biofuel, biomass-based diesel, advanced 

biofuel, and renewable fuels that would apply to all gasoline and diesel produced or imported in 

year 2013. 

DATES: Comments must be received on or before [insert date 45 days after date of 

publication in the Federal Register]. A request for a public hearing must be received by

[insert date 15 days after date of publication in the Federal Register].

ADDRESSES: Submit your comments, identified by

Docket ID No. EPA-HQ-OAR-2012-0546, by one of the following methods:

• www.regulations.gov: Follow the on-line instructions for submitting comments.

• Email: a-and-r-docket@epa.gov.

• Mail: Air and Radiation Docket and Information Center, Environmental Protection 

Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

• Hand Delivery: EPA Docket Center, EPA West Building, Room 3334, 1301 Constitution 

Ave., NW., Washington, DC 20460. Such deliveries are only accepted during the 

Docket’s normal hours of operation, and special arrangements should be made for 

deliveries of boxed information.

Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-2012-0546. EPA's policy 

is that all comments received will be included in the public docket without change and may be 

made available online at www.regulations.gov, including any personal information provided, 

unless the comment includes information claimed to be Confidential Business Information (CBI) 
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or other information whose disclosure is restricted by statute. Do not submit information that 

you consider to be CBI or otherwise protected through www.regulations.gov or e-mail. The 

www.regulations.gov website is an “anonymous access” system, which means EPA will not 

know your identity or contact information unless you provide it in the body of your comment. If 

you send an e-mail comment directly to EPA without going through www.regulations.gov your 

e-mail address will be automatically captured and included as part of the comment that is placed 

in the public docket and made available on the Internet. If you submit an electronic comment, 

EPA recommends that you include your name and other contact information in the body of your 

comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to 

technical difficulties and cannot contact you for clarification, EPA may not be able to consider 

your comment. Electronic files should avoid the use of special characters, any form of 

encryption, and be free of any defects or viruses. For additional information about EPA’s public 

docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm. For 

additional instructions on submitting comments, go to Section I.B of the SUPPLEMENTARY 

INFORMATION section of this document.

Docket: All documents in the docket are listed in the www.regulations.gov index. Although 

listed in the index, some information is not publicly available, e.g., CBI or other information 

whose disclosure is restricted by statute. Certain other material, such as copyrighted material, 

will be publicly available only in hard copy. Publicly available docket materials are available 

either electronically in www.regulations.gov or in hard copy at the Air and Radiation Docket and 

Information Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW, 

Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 

through Friday, excluding legal holidays. The telephone number for the Public Reading Room is 

(202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Julia MacAllister, Office of Transportation 

and Air Quality, Assessment and Standards Division, Environmental Protection Agency, 2000 

Traverwood Drive, Ann Arbor MI 48105; Telephone number: 734-214-4131; Fax number: 734-

214-4816; E-mail address: macallister.julia@epa.gov, or the public information line for the 

Office of Transportation and Air Quality; telephone number (734) 214-4333; E-mail address 

OTAQ@epa.gov.

SUPPLEMENTARY INFORMATION: 

I. General Information

A. Does this Action Apply to Me?

Entities potentially affected by this proposed rule are those involved with the production, 

distribution, and sale of transportation fuels, including gasoline and diesel fuel or renewable 

fuels such as ethanol and biodiesel. Potentially regulated categories include: 
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Category NAICS1

Codes

SIC2

Codes

Examples of Potentially Regulated Entities

Industry

Industry 

Industry 

Industry 

Industry 

Industry

Industry

324110

325193

325199

424690

424710

424720

454319

2911

2869

2869

5169

5171

5172

5989

Petroleum Refineries

Ethyl alcohol manufacturing

Other basic organic chemical manufacturing

Chemical and allied products merchant wholesalers

Petroleum bulk stations and terminals

Petroleum and petroleum products merchant 

wholesalers

Other fuel dealers

1 North American Industry Classification System (NAICS)

2

Standard Industrial Classification (SIC) system code.

This table is not intended to be exhaustive, but rather provides a guide for readers 

regarding entities likely to be regulated by this proposed action. This table lists the types of 

entities that EPA is now aware could potentially be regulated by this proposed action. Other 

types of entities not listed in the table could also be regulated. To determine whether your 

activities would be regulated by this proposed action, you should carefully examine the 

applicability criteria in 40 CFR part 80. If you have any questions regarding the applicability of 

this proposed action to a particular entity, consult the person listed in the preceding section. 

B. What Should I Consider as I Prepare My Comments for EPA?

1. Submitting CBI

Do not submit confidential business information (CBI) to EPA through 

www.regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to 

be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of 

the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the 

specific information that is claimed as CBI. In addition to one complete version of the comment 

that includes information claimed as CBI, a copy of the comment that does not contain the 

information claimed as CBI must be submitted for inclusion in the public docket. Information so 

marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

2. Tips for Preparing Your Comments

When submitting comments, remember to:

• Identify the rulemaking by docket number and other identifying information (subject 

heading, Federal Register date and page number).

• Follow directions - The agency may ask you to respond to specific questions or organize 

comments by referencing a Code of Federal Regulations (CFR) part or section number.

• Explain why you agree or disagree, suggest alternatives, and substitute language for your 

requested changes.

• Describe any assumptions and provide any technical information and/or data that you 

used.
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• If you estimate potential costs or burdens, explain how you arrived at your estimate in 

sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or personal 

threats.

• Make sure to submit your comments by the comment period deadline identified.

Outline of this preamble

I. Executive Summary................................................................................................................ 6

A. Purpose of This Proposed Action ....................................................................................... 7

B. Summary of Major Provisions in This Notice .................................................................... 8

1. Cellulosic Biofuel Volume for 2013............................................................................... 8

2. Advanced Biofuel and Total Renewable Fuel in 2013 ................................................... 9

3. Proposed Standards for 2013 ........................................................................................ 11

4. Biomass-Based Diesel for 2014.................................................................................... 12

5. Administrative Actions................................................................................................. 12

C. Impacts of Proposed Actions............................................................................................ 13

II. Projection of Cellulosic Volume for 2013............................................................................ 15

A. Statutory Requirements..................................................................................................... 16

B. Status of the Cellulosic Biofuel Industry.......................................................................... 16

C. Cellulosic Biofuel Volume Assessment for 2013............................................................. 20

1. Cellulosic Biofuel Facilities Considered in the 2012 Projections ................................ 21

2. Facilities not Included in 2012 Projections................................................................... 24

3. Other Potential Sources of Domestic Cellulosic Biofuel.............................................. 26

4. Imports of Cellulosic Biofuel........................................................................................ 26

5. Projections from the Energy Information Administration............................................ 27

D. Proposed Cellulosic Biofuel Volume for 2013................................................................. 32

III. Assessment of Advanced Biofuel and Total Renewable Fuel for 2013 ............................... 33

A. Statutory Requirements..................................................................................................... 33

B. Assessment of Available Volumes of Advanced Biofuel................................................. 35

1. Biodiesel ....................................................................................................................... 36

2. Domestic Production of Other Advanced Biofuel........................................................ 37

3. Imported Sugarcane Ethanol......................................................................................... 40

C. Proposed Volume Requirements for Advanced Biofuel and Total Renewable Fuel in 

2013........................................................................................................................................... 43

D. Consideration of the Ethanol Blendwall........................................................................... 44

IV. Proposed Percentage Standards for 2013......................................................................... 46

A. Background....................................................................................................................... 46

B. Calculation of Standards................................................................................................... 46

1. How Are the Standards Calculated? ............................................................................. 46

2. Small Refineries and Small Refiners............................................................................ 49

3. Proposed Standards....................................................................................................... 50

V. Public Participation............................................................................................................... 52

A. How Do I Submit Comments?.......................................................................................... 52

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B. How Should I Submit CBI to the Agency?....................................................................... 52

VI. Statutory and Executive Order Reviews........................................................................... 54

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: 

Improving Regulation and Regulatory Review ........................................................................ 54

B. Paperwork Reduction Act................................................................................................. 54

C. Regulatory Flexibility Act ................................................................................................ 54

D. Unfunded Mandates Reform Act...................................................................................... 55

E. Executive Order 13132: Federalism ................................................................................. 55

F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments

56

G. Executive Order 13045: Protection of Children from Environmental Health Risks and 

Safety Risks .............................................................................................................................. 56

H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect 

Energy Supply, Distribution, or Use......................................................................................... 56

I. National Technology Transfer and Advancement Act ..................................................... 56

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority 

Populations and Low-Income Populations............................................................................... 57

VII. Statutory Authority ........................................................................................................... 58

Deleted: 51

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Deleted: 53

Deleted: 53

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Deleted: 54

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I. Executive Summary

The Renewable Fuel Standard (RFS) program began in 2006 pursuant to the requirements 

in Clean Air Act (CAA) section 211(o) which were added through the Energy Policy Act of 2005 

(EPAct). The statutory requirements for the RFS program were subsequently modified through 

the Energy Independence and Security Act of 2007 (EISA), resulting in the promulgation of 

major revisions to the regulatory requirements on March 26, 20101. 

The volumes of renewable fuel to be used under the RFS program each year (absent an 

adjustment or waiver by EPA) are specified in CAA 211(o)(2). The volumes for 2013 are shown 

in Table I-1.

Table I-1

Required Applicable Volumes in the Clean Air Act for 2013 (bill gal)

Cellulosic biofuel 1.0a

Biomass-based diesel ≥1.0b

Advanced biofuel 2.75a

Renewable fuel 16.55a

a

Ethanol-equivalent volume

b Actual volume. The ethanol-equivalent volume would be 1.5 if biodiesel is used to 

meet this requirement.

Under the RFS program, EPA is required to determine and publish annual percentage 

standards for each compliance year by November 30 of the previous year. The percentage 

standards are used by obligated parties to calculate their individual compliance obligations. The 

percentage standards are applied to the volume of gasoline and/or diesel fuel that each obligated 

party produces or imports during the specified calendar year to determine the volumes of 

renewable fuel that they must cause to be used as transportation fuel, heating oil, or jet fuel. The 

percentage standards are calculated so as to ensure use in transportation fuel of the “applicable 

volumes” of four types of biofuel (cellulosic biofuel, biomass-based diesel, advanced biofuel, 

and total renewable fuel) that are either set forth in the Clean Air Act or established by EPA in 

accordance with the Act’s requirements.

The cellulosic biofuel industry is transitioning from research and development (R&D) 

and pilot-scale to commercial scale facilities, leading to increases in production capacity. 

Construction has begun on several facilities with multiple facilities having progressed to the 

start-up phase. Based on detailed information from production companies and a consideration of 

various potential uncertainties, we are projecting that 14 million ethanol-equivalent gallons of 

cellulosic biofuel will be available in 2013.

We have evaluated the types of advanced biofuels that can be produced or imported in 

2013. Our preliminary determination is that there should be sufficient volumes to meet the 

statutory applicable volume of 2.75 billion gallons. As a result, we are proposing to use that 

volume to calculate the advanced biofuel standard for 2013. Combined with the availability of 

conventional biofuels such as corn ethanol, we have preliminarily determined that there should

 

1

75 FR 14670
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be sufficient total renewable fuels available in 2013 to meet the statutory applicable volume of 

16.55 billion gallons. Therefore, we are not proposing to reduce the advanced biofuel and total 

renewable fuel applicable volumes below the levels specified in the statute. However, as 

described in Section III.C, there is some uncertainty in the projected availability of advanced 

biofuel in 2013. Therefore, we are requesting comment on the possibility of reducing the 

required volume of advanced biofuel and total renewable fuel in 2013 to reflect this uncertainty.

A. Purpose of This Proposed Action

EPA is today proposing volume requirements for cellulosic biofuel, advanced biofuel, 

and total renewable fuel for 2013. Table I.A-1 lists the statutory provisions and associated 

criteria relevant to determining the applicable volumes in today’s proposal. We are also 

proposing percentage standards for all four categories of renewable fuel for 2013. 

Table I.A-1

Statutory Provisions for Determination of Proposed Applicable Volumes

Applicable volumes Clean Air Act 

reference

Criteria provided in statute for determination 

of applicable volume

Cellulosic biofuel in 

2013

211(o)(7)(D)(i) Required volume must be lesser of volume 

specified in CAA 211(o)(2)(B)(i)(III) or 

EPA’s projected volume.

Advanced biofuel in 

2013

211(o)(7)(D)(i) If applicable volume of cellulosic biofuel is 

reduced to the projected volume, EPA may 

reduce advanced biofuel by the same or 

lesser volume. No other criteria specified.

Total renewable fuel in

2013

211(o)(7)(D)(i) If applicable volume of cellulosic biofuel is 

reduced to the projected volume, EPA may 

reduce total renewable fuel by the same or 

lesser volume. No other criteria specified.

EPA must annually determine the projected volume of cellulosic biofuel production for 

the following year. If the projected volume of cellulosic biofuel production is less than the 

applicable volume specified in section 211(o)(2)(B)(i)(III) of the statute, EPA must lower the 

applicable volume used to set the annual cellulosic biofuel percentage standard to the projected 

volume of production. In today's proposal, we present our analysis of cellulosic biofuel 

production and proposed projected volume for 2013. The analyses that led to the proposed 2013 

applicable volume requirement were based on our evaluation of EIA’s projection for 2013 as 

well as individual producers’ production plans and progress to date. For the final rule, we will 

also consider comments received in response to this notice of proposed rulemaking and other 

information that becomes available.

When we lower the applicable volume of cellulosic biofuel below the volume specified in 

CAA 211(o)(2)(B)(i)(III), we also have the authority to reduce the applicable volumes of 
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advanced biofuel and total renewable fuel by the same or a lesser amount. Today's proposal 

includes our consideration of the 2013 volume requirements for these biofuels.

Based on the applicable volumes for cellulosic biofuel, biomass-based diesel, advanced 

biofuel, and total renewable fuel presented in today's proposal, we have calculated proposed 

percentage standards (shown in Section I.B.3 below) that would apply to all producers and 

importers of gasoline and diesel in 2013. The proposed percentage standards are based on a 

projection of volumes of gasoline and diesel consumption in 2013 from the Energy Information 

Administration (EIA). 

B. Summary of Major Provisions in This Notice

1. Cellulosic Biofuel Volume for 2013

The cellulosic biofuel industry in the United States continues to make significant 

advances in its progress towards large scale commercial production. Ongoing research and 

development work has resulted in increasing product yields, while at the same time lowering 

enzyme and catalyst costs. New supply chains have been developed, and several companies 

have reached contract agreements to provide the necessary feedstock for large scale cellulosic 

biofuel production facilities. Companies are continuing to invest significant sums of money to 

further refine cellulosic biofuel production technology and to construct the first commercialscale facilities. From 2007 through the second quarter of 2011 over $2.4 billion was invested in 

advanced biofuel production companies by venture capitalists alone.2 For more information on 

the current status of the cellulosic biofuel industry in the United States and the advances being 

made, see Section II.B.

2013 is also expected to be a year of transition for the cellulosic biofuel industry, as many 

companies are shifting their focus from technology development to commercialization. This 

transition began in 2012 with commercial production facilities from INEOS Bio and KiOR 

completing construction and scheduled to begin producing fuel in the first quarter of 2013. 

Abengoa, one of the largest producers of ethanol in the United States, is planning to begin 

producing cellulosic ethanol at commercial scale by the end of 2013. Several others companies, 

including DuPont and Poet, expect to be constructing their first commercial scale facilities in 

2013, with the intention of beginning production in 2014. If these facilities are able to operate as 

anticipated, the uncertainty associated with commercial-scale cellulosic biofuel production will 

decrease, and the expansion of the industry could be rapid.

As part of our effort to estimate the volume of cellulosic biofuel that can be made 

available in the U.S. in 2013, we researched all potential production sources by company and 

facility. This included sources that were still in the planning stages, those that were under 

construction, and those that are already producing some volume of cellulosic ethanol, cellulosic 

diesel, or some other type of cellulosic biofuel. Facilities primarily focused on research and 

 

2

Solecki M, Rickey D, Epstein B. Advanced Biofuel Market Report 2011: Meeting the California LCFS. 

Environmental Entrepreneurs. August 22, 2011. 

<http://www.e2.org/ext/doc/E2%20Advanced%20Biofuel%20Mkt%20Report%202011.pdf>.
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development were not the focus of our assessment as production from these facilities represents 

very small volumes of cellulosic biofuel, and these facilities typically have not generated RINs 

for the fuel they have already produced. From this universe of potential cellulosic biofuel 

sources we identified the subset that had a possibility of producing commercial volumes of 

qualifying cellulosic biofuel for use as transportation fuel in 2013. To arrive at a proposed 

projected volume for each facility, we took into consideration EIA’s company specific 

projections and factors such as the current and expected state of funding, the status of the 

technology utilized, progress towards construction and production goals, and other significant 

factors that could potentially impact fuel production or the ability of the produced fuel to 

generate cellulosic Renewable Identification Numbers (RINs) in 2013. Further discussion of 

these factors can be found in Section II.B.

In our assessment we focused on domestic sources of cellulosic biofuel. At the time of 

this proposal no internationally-based cellulosic biofuel production facilities have registered 

under the RFS program and therefore no volume from international producers has been included 

in our projections for 2013. Of the domestic sources, we estimated that up to four facilities may 

produce commercial-scale volumes of cellulosic biofuel available for transportation use in the 

U.S. in 2013. Two of these four facilities have made sufficient progress to lead us to believe that 

commercial scale production from these two facilities will occur, and we have therefore included 

production from them in our projected available volume for 2013. All four facilities are listed in

Table I.B.1-1 along with our estimate of the projected 2013 volume for each.

Table I.B.1-1

Projected Available Cellulosic Biofuel Plant Volumes for 2013

Company Location Fuel type

Capacity 

(million gallons 

per year)

First 

Production 

(projected)

Projected available 

volumea

Abengoa Hugoton, KS Ethanol 24 4Q 2013 0

Fiberight Blairstown, IA Ethanol 6 4Q 2013 0

INEOS Bio Vero Beach, FL Ethanol 8 1Q 2013 6

KiOR Columbus, MS Gasoline and 

Diesel

11 1Q 2013 8

Total 49 14

a Volumes listed in million ethanol-equivalent gallons

The EIA projections, variation in expected start-up times, along with the facility production 

capacities, company production plans, and a variety of other factors have all been taken into 

account in projecting the available volume of cellulosic biofuel. For more detailed information 

on our projections of available cellulosic biofuel in 2013 and the companies we expect to 

produce this volume see Section II.

2. Advanced Biofuel and Total Renewable Fuel in 2013

The statute indicates that we may reduce the applicable volume of advanced biofuel and 

total renewable fuel specified in the statute for 2013 if we determine that the projected volume of 

cellulosic biofuel production for 2013 falls short of the statutory volume of 1.0 billion gallons. 
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As shown in Table I.B.1-1, we have proposed a finding that this is the case. Therefore, we have 

also evaluated whether to propose lowering the applicable volumes for advanced biofuel and 

total renewable fuel. The statute provides no explicit criteria or direction for making this 

determination. We have focused our evaluation on the availability of renewable fuels that would 

qualify as advanced biofuel. The CAA specifies an applicable volume of 2.75 billion gallons of 

advanced biofuel for 2013. To determine whether to lower this volume, we considered the 

sources that are expected to satisfy any advanced biofuel mandate including: cellulosic biofuel, 

biomass-based diesel, other domestically-produced advanced biofuels, and imported sugarcane 

ethanol.

As described in Section II, we project that 14 mill gallons of cellulosic biofuel will be 

available in 2013. This volume would fulfill 0.014 bill gal of the 2.75 bill gal advanced biofuel 

requirement.

We have finalized a volume of 1.28 bill gal for 2013 biomass-based diesel in a separate

action, and we expect that the vast majority of this requirement will be fulfilled with biodiesel. 

Since biodiesel has an Equivalence Value of 1.5, 1.28 billion physical gallons of biodiesel would 

provide 1.92 billion ethanol-equivalent gallons that could be counted towards the advanced 

biofuel standard of 2.75 billion gallons. 

As described in more detail in Section III, we have projected that domestic advanced 

biofuels are expected to grow steadily through 2013, and would include renewable diesel that 

does not qualify to be biomass-based diesel, heating oil, biogas used as CNG, and ethanol. We 

are projecting that about 150 mill gal of domestic advanced biofuels is likely to be available in 

2013, which would fulfill 0.15 bill gal of the 2.75 bill gal advanced biofuel requirement.

After taking into account cellulosic biofuel, biomass-based diesel, and domestic advanced 

biofuels, 666 mill gal of imported sugarcane ethanol would be needed to fulfill the advanced 

biofuel requirement of 2.75 bill gal. As described in Section III, there is reason to believe that 

this volume can be exported from Brazil to the U.S. in 2013 given Brazilian production and 

consumption projections. However, we note that there is some uncertainty in the volumes of 

Brazilian sugarcane ethanol that could be imported into the U.S. in 2013. This uncertainty arises 

from the possibility of poor sugarcane crop yields in the next harvest as occurred during the 

previous harvest, and the interplay between these yields and Brazilian demand for ethanol, world 

sugar prices, and international demand for biofuels. While most projections indicate that 

Brazilian sugarcane crop yields will be significantly better in the coming harvest in comparison 

to the previous harvest, and that as a result sufficient sugarcane ethanol could be produced and 

exported to the U.S. to help meet the need for 2.75 bill gal advanced biofuel, we nevertheless 

request comment on whether the advanced biofuel requirement should be reduced to account for 

this uncertainty. 

We also note that in both 2011 and 2012 there was significant two-way trade in ethanol 

between the United States and Brazil. According to current EIA data, in 2011 the U.S. imported 

101 million gallons of sugarcane ethanol from Brazil and exported 396 million gallons of cornbased ethanol to Brazil. Total fuel ethanol exports in 2011 were 1.2 billion gallons, and total 

exports through October 2012 were 646 million gallons.

Deleted: ; in general we believe that the energy 

security and environmental goals of the statute are 

best served by maintaining the applicable volumes 

set forth in the Act if sufficient volumes appear to be 

reasonably available.

Comment [A1]: 1/22/2013 – Can EPA provide 

further support for this statement? Concern is the 

lack of analysis. Alternatively, can EPA solicit 

further information or data to support its contention 

regarding the GHG and energy security tradeoffs of 

maintaining a standard that would require significant 

imports of advanced biofuel? 

Comment [A2]: Since OMB has deleted the text 

that appears to be the subject of their comment, it's 

not clear that there is any need for any additional 

edits.
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Finally, we believe there will be sufficient volumes of conventional renewable fuel

including corn-ethanol, combined with advanced biofuel, to satisfy the 16.55 billion gallon 

applicable volume of total renewable fuel specified in the Act. For instance, corn-ethanol 

production capacity in 2012 was 14.9 bill gal, compared to the 13.8 bill gal needed to meet the 

RFS requirements in 2013.

4

 We are not proposing to reduce the advanced biofuel volume 

requirement of 2.75 bill gal, nor the total renewable fuel volume requirement of 16.55 bill gal. 

However, we are taking comment on lowering the advanced biofuel and total renewable volumes 

due to various uncertainties. For example, we currently project that 666 mill gal of sugarcane 

ethanol would need to be imported in order to meet the advanced biofuel volume. However, the 

recent reinstatement of the biodiesel tax credit introduced uncertainty around those projections, 

since it affects the amount of biodiesel that may be produced above the required 1.28 bill gal. In 

addition, the potential for increased domestic demand in Brazil if the 25% biofuel blending 

requirement is reinstated also introduces uncertainty around the projections. We seek input on 

these and other such factors that are relevant to how the advanced biofuel volume requirement 

would be met.

3. Proposed Standards for 2013

The renewable fuel standards are expressed as a volume percentage and are used by each 

refiner, blender or importer to determine their renewable fuel volume obligations. The 

applicable percentages are set so that if each regulated party meets the percentages, and if EIA 

projections of gasoline and diesel use for the coming year are accurate, then the amount of 

renewable fuel, cellulosic biofuel, biomass-based diesel, and advanced biofuel actually used will 

meet the volumes required on a nationwide basis. 

To calculate the percentage standards for 2013, we have used the proposed projected 

volume of 14 million ethanol-equivalent gallons of cellulosic biofuel and the volume of biomassbased diesel of 1.28 bill gal that we have finalized in a separate action. The applicable volumes 

used in this proposal for advanced biofuel and total renewable fuel for 2013 are those specified 

in the statute. These volumes are shown in Table I.B.3-1. 

Table I.B.3-1

Proposed Volumes Used to Determine the Proposed 2013 Percentage Standardsa

Cellulosic biofuel 14 mill gal

Biomass-based diesel 1.28 bill gal

Advanced biofuel 2.75 bill gal

Renewable fuel 16.55 bill gal

a All volumes are ethanol-equivalent, except for biomass-based diesel which is 

actual.

Four separate standards are required under the RFS program, corresponding to the four 

separate volume requirements shown in Table I.B.3-1. The specific formulas we use to calculate 

 

4

"2012 Ethanol Industry Outlook," Renewable Fuels Association, 

http://ethanolrfa.3cdn.net/d4ad995ffb7ae8fbfe_1vm62ypzd.pdf

Deleted: 13.7

Deleted: just less than

Deleted: ,

3

and we are projecting that there will be 

sufficient volumes of imported sugarcane ethanol 

despite some uncertainties. Since there appears to be 

adequate supply,

Deleted: 

Deleted: gal

Deleted: l; h

Deleted: significant volumes

Comment [A3]: 1/24/2013

Deleted: advanced

Deleted: applicable volume

Deleted: lowered, we would 

Deleted: lower the applicable

Deleted: of total renewable fuel by a 

corresponding amount. 

Comment [A4]: 1/22/2013 Suggestions.

Deleted: "U.S. Fuel Ethanol Plant Production 

Capacity," EIA, May 30, 2012.

Deleted: 

Deleted: http://www.eia.gov/petroleum/ethanolcap

acity/index.cfm
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the renewable fuel percentage standards are contained in the regulations at §80.1405 and 

repeated in Section IV.B.1. The percentage standards represent the ratio of renewable fuel 

volume to projected non-renewable gasoline and diesel volume. The projected volume of 

transportation gasoline and diesel used to calculate the standards in today's proposed rule was 

derived from EIA projections.5 At this time EPA has not approved any small refinery or small 

refiner exemptions for 2013, and thus no adjustment has been made to the proposed standards to 

account for such exemptions. The proposed standards for 2013 are shown in Table I.B.3-2. 

Detailed calculations can be found in Section IV, including the projected 2013 gasoline and 

diesel volumes used.

Table I.B.3-2

Proposed Percentage Standards for 2013

Cellulosic biofuel 0.008%

Biomass-based diesel 1.12%

Advanced biofuel 1.60%

Renewable fuel 9.63%

4. Biomass-Based Diesel for 2014

While Clean Air Act section 211(o)(2)(B) specifies the volumes of biomass-based diesel 

through year 2012, it directs the EPA to establish the applicable volume of biomass-based diesel 

for years after 2012 no later than 14 months before the first year for which the applicable volume 

will apply. EPA proposed an applicable volume of biomass-based diesel for 2013 on July 1, 

2011, and issued a final rule establishing that applicable volume on September 27, 20126. 

Under 211(o)(2)(B)(ii) EPA, in coordination with the Secretary of Energy and the 

Secretary of Agriculture, is to establish the applicable volume for biomass based diesel in 2014 

based on a review of implementation of the program in prior years and analysis of a number of 

factors, including biodiesel production capacity, consumption, and infrastructure capabilities, as 

well as impacts on emissions, costs, energy security, and other factors. While the industry 

produced around 1.15 bill physical gallons in 2012, we are still evaluating the potential market 

impacts of this production level. In order to provide sufficient time for this evaluation, as well as 

the other analyses we are required to conduct, we are not proposing an applicable volume of

biomass-based diesel for 2014 in today's NPRM. Instead, we will issue a separate proposal at a 

later date.

5. Administrative Actions

By November 30 of each year we are required to make several administrative 

announcements which facilitate program implementation in the following calendar year. These 

announcements include the cellulosic biofuel waiver credit price and the status of the aggregate 

 

5

Letter, Adam Sieminski, Administrator, U.S. Energy Information Administration, to Lisa P. Jackson, 

Administrator, U.S. EPA, October 18, 2012.

6

77 FR 59458

Deleted: is currently on track to 

Deleted: a total annual volume of 

Deleted: 3 
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compliance approach to land-use restrictions under the definition of renewable biomass for both 

the U.S. and Canada. Since we did not make these announcements for 2013 by November 30 of 

2012, we are here presenting our assessments of these administrative actions. We will provide 

the final announcements for these administrative actions when we finalize the standards being 

proposed in today's action.

In the event that we reduce the required volume of cellulosic biofuel for 2013 below the 

applicable volume specified in the statute, EPA is required to offer biofuel waiver credits to 

obligated parties that can be purchased in lieu of acquiring cellulosic biofuel RINs. These 

waiver credits are not allowed to be traded or banked for future use, are only allowed to be used 

to meet the 2013 cellulosic biofuel standard, and cannot be applied to deficits carried over from 

2012. Moreover, unlike cellulosic biofuel RINs, waiver credits may not be used to meet either 

the advanced biofuel standard or the total renewable fuel standard. For the 2013 compliance 

period, we estimate that cellulosic biofuel waiver credits could be made available to obligated 

parties for end-of-year compliance should they need them at a price of $0.42 per credit. 

As part of the RFS2 regulations, EPA established an aggregate compliance approach for 

renewable fuel producers who use planted crops and crop residue from U.S. agricultural land. 

This compliance approach relieved such producers (and importers of such fuel) of the individual 

recordkeeping and reporting requirements otherwise required of producers and importers to

verify that feedstocks used in the production of RIN-qualifying renewable fuel meet the 

definition of renewable biomass. EPA determined that 402 million acres of U.S. agricultural 

land was available in 2007 (the year of EISA enactment) for production of crops and crop 

residue that would meet the definition of renewable biomass, and determined that as long as this 

total number of acres is not exceeded, it is unlikely that new land has been devoted to crop 

production based on historical trends and economic considerations. We indicated that we would 

conduct an annual evaluation of total U.S. acreage that is cropland, pastureland, or conservation 

reserve program land, and that if the value exceed 402 million acres, producers using 

domestically grown crops or crop residue to produce renewable fuel would be subject to

individual recordkeeping and reporting to verify that their feedstocks meet the definition of 

renewable biomass. Based on data provided by the USDA, we have estimated that U.S.

agricultural land reached 384 million acres in 2012, and thus did not exceed the 2007 baseline 

acreage. 

On September 29, 2011, EPA approved the use of an aggregate compliance approach to 

renewable biomass verification for planted crops and crop residue grown in Canada. The 

Government of Canada utilized several types of land use data to demonstrate that the land 

included in their 124 million acre baseline is cropland, pastureland or land equivalent to U.S. 

Conservation Reserve Program land that was cleared or cultivated prior to December 19, 2007,

and was actively managed or fallow and nonforested on that date (and is therefore RFS2 

qualifying land). The total agricultural land in Canada in 2012 is estimated at 121 million acres. 

The total acreage estimate of 121 million acres does not exceed the trigger point for further 

investigation.

C. Impacts of Proposed Actions
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Analyses for the March 26, 2010 RFS2 final rule indicated the GHG benefits from 

cellulosic biofuels compared to the petroleum-based fuels they displace could likely range well 

above the 60 percent threshold. Therefore, EPA expects that the increase in cellulosic biofuel 

use that EPA has projected for 2013 over prior year production levels would have directionally 

beneficial GHG emissions impacts.

For advanced biofuel and total renewable fuel, we are not proposing to reduce the 

applicable volumes below the volumes required in the statute. All of the impacts of the biofuel 

volumes specified in the statute were addressed in the RFS2 final rule published on March 26, 

2010. Today's rulemaking simply proposes the standards for 2013 advanced biofuel and total 

renewable fuel whose impacts were previously analyzed. Nevertheless, we recognize that the 

combination of imports of sugarcane ethanol from Brazil into the U.S. and exports of cornethanol from the U.S. to Brazil that may occur as a result of the advanced biofuel volume 

requirement engenders additional transport related emissions. Deleted: ..
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II. Projection of Cellulosic Volume for 2013

In order to project the available production volume of cellulosic biofuel in 2013 for use in 

setting the percentage standard, we considered the EIA projections and collected information on 

individual facilities that have the potential to produce qualifying volumes for consumption as 

transportation fuel, heating oil, or jet fuel in the U.S. in 2013. This section describes the volumes 

that could be produced or imported in 2013 as well as some of the uncertainties associated with 

those volumes. 

In the past several years the cellulosic biofuel industry has made many significant 

advances. The production cost of cellulosic biofuels continues to fall as a result of ongoing 

technology development and operating experience gained from many research and development 

and demonstration-scale facilities across the country. These important advances include higher 

biofuel yields per ton of feedstock as well as lower enzyme and catalyst costs. As a result of 

these yield increases, the projected capital costs and energy costs to produce a gallon of 

cellulosic biofuel have decreased. New feedstock supply chains, which will be necessary to 

provide the raw materials for anticipated commercial facilities, have been established, and in 

several cases companies have signed contracts to obtain significant quantities of feedstocks for 

their first commercial facilities. These developments, along with the increased availability of 

project financing, have resulted in the construction of new commercial-scale cellulosic biofuel 

production facilities. Two commercial-scale facilities are both structurally complete and 

currently in the start-up phase of operations. Several additional facilities are planning 

construction in 2013 and start-up in 2014. If these first facilities are successful and operate as 

designed it will significantly decrease the perceived risk associated with similar future facilities 

and could potentially lead to the rapid deployment of cellulosic biofuel production facilities 

around the United States.

Despite significant advances in cellulosic biofuel production technology in recent years, 

RIN-generating cellulosic biofuel production in 2010 and 2011 was zero despite our projections 

that the industry was positioned to produce about 6 million gallons in each of those years.

7

In 

2010 the majority of the cellulosic biofuel shortfall was met through the use of RINs generated 

under the RFS1 regulations, and since there were excess RFS1 cellulosic RINs many carried 

over into the following year. The remaining cellulosic biofuel requirements in 2011 were met 

through the purchase of cellulosic biofuel waiver credits.8 A discussion of the reasons for this 

disparity between our projections and subsequent production is provided in Section II.B below. 

 

7

 In the first half of 2010 when the RFS1 program was still effective, some cellulosic biomass ethanol was 

produced and the RINs generated were valid for demonstrating compliance with the 2010 and 2011 RFS2 cellulosic 

biofuel standards. However, the RFS1 cellulosic biomass ethanol that was produced was not made from cellulosic 

feedstocks, but rather was categorized as cellulosic because it was produced in plants using waste materials to

displace 90% or more of fossil fuel use under the then-effective definition of cellulosic biomass ethanol in CAA 

Section 211(o)(1)(A). See also 40 CFR §80.1101(a)(2). 

8

4,248,338 cellulosic waiver credits were purchased for 2011 compliance according to the EMTS website 

(information retrieved from the website on December 11, 2012) at a cost of $1.13 per credit. The ethanol-equivalent 

volume of cellulosic biofuel projected for 2011 and used to calculate the percentage standard for that year was 6.0 

million gallons. 
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In 2012 the first cellulosic RINs were generated under the RFS2 regulations. However, 

cellulosic biofuel production once again fell far short of our projections in 20129. For 2012 

compliance we expect that many refiners will once again purchase cellulosic biofuel waiver 

credits to fulfill their cellulosic biofuel requirements. These credits are priced at $0.78 for 2012 

compliance. 

A. Statutory Requirements

The volumes of renewable fuel to be used under the RFS program each year (absent an 

adjustment or waiver by EPA) are specified in CAA 211(o)(2). For 2013, the statute specifies a 

cellulosic biofuel applicable volume requirement of 1.0 bill gal. The statute requires that if EPA 

determines that the projected volume of cellulosic biofuel production for the following year is 

less than the applicable volume shown in Table II.A-1, then EPA is to reduce the applicable 

volume of cellulosic biofuel to the projected volume available during that calendar year. 

In addition, if EPA reduces the required volume of cellulosic biofuel below the level 

specified in the statute, the Act also indicates that we may reduce the applicable volumes of 

advanced biofuels and total renewable fuel by the same or a lesser volume. Our consideration of 

the 2013 volume requirements for advanced biofuels and total renewable fuel is presented in 

Section III.

B. Status of the Cellulosic Biofuel Industry

As in previous years, cellulosic biofuel production in the United States in 2011 was 

limited to small-scale research and development, pilot, and demonstration-scale facilities. 

Companies such as Abengoa, BP, Coskata, DuPont Danisco, KL Energy, KiOR, Poet, and others 

successfully operated small-scale facilities in 2011. Several of these facilities, including all that 

were part of our 2012 volume projections, are discussed in more detail in Section II.C below. 

While there were numerous small-scale facilities producing cellulosic biofuel in 2011, the total 

volume of fuel produced was very small. Because of the R&D nature of these small facilities 

they are neither designed to produce fuel for commercial sale nor required to report the small 

volumes of fuel they produced. No RINs were generated for volumes that were produced in 

2011, despite all of the companies included in the 2011 projections expressing interest and/or 

intent in doing so. Although EPA has not attempted to accurately assess production volumes, 

based on generally available information we believe that total production in the United States in 

2011 was likely less than one million gallons of cellulosic biofuel across the industry.

Each of the companies included in our 2011 projections for cellulosic biofuel production 

had different reasons for not generating cellulosic RINs in 2011. DuPont had concerns about 

their ability to retain the R&D status of their Vonore, TN facility if they generated RINs and sold 

the cellulosic ethanol they produced from this facility. Fiberight was unable to secure the 

funding required to complete the modifications to their facility to allow for cellulosic ethanol 

 

9 On December 31, 2012 EPA also received a request for a waiver of the 2012 cellulosic biofuel volume requirement 

from the American Fuel and Petrochemical Manufacturers.
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production. KL Energy finalized an agreement with Petrobras in the second half of 2010 and 

changed the direction of their facility to focus on using bagasse as a primary feedstock. Finally, 

after completing initial production of cellulosic ethanol Range Fuels shut down operations in 

January 2011 and eventually declared bankruptcy. 

While cellulosic biofuel production in the United States remains limited, the industry 

continues to make significant progress towards producing cellulosic biofuel at prices competitive 

with petroleum fuels. From 2007 through the second quarter of 2011 venture capitalists invested 

over $2.4 billion in advanced biofuel companies in North America10. Recent advancements in 

enzyme and catalyst technologies are allowing cellulosic biofuel producers to achieve greater 

yields of biofuel per ton of feedstock. These advancements have led to lower operational costs 

as they have driven down the cost for feedstock, energy, and other important inputs on a per 

gallon basis. For example, the estimated cost of producing cellulosic ethanol using an enzymatic 

hydrolysis process in 2007 was $4-$8 per gallon.

11 By 2012 the estimated cost of cellulosic 

ethanol production using the same process had fallen to $2-$3.50 per gallon12. The U.S. 

Department of Energy similarly reports that advancements in cellulosic ethanol technology have 

resulted in a decrease in modeled costs from approximately $4 per gallon (minimum ethanol 

selling price) in 2007 to approximately $2.50 per gallon in 2011.

13

 The same technological 

advances have also lowered the capital costs of cellulosic biofuel production facilities per gallon 

of annual fuel production, as more gallons of biofuel can be produced at a facility without 

additional equipment or increased feedstock requirements.

As cellulosic biofuel producers gain experience and continue to progress towards 

commercial-scale biofuel production, it is reasonable to expect that the production costs and 

capital costs will continue to decline. This is a pattern shown by many new technologies, 

including renewable and emerging energy technologies. One example which has several 

similarities to the cellulosic biofuel industry is the experience with the dry mill corn ethanol 

industry. From 1983, the year in which the first commercial volumes of dry mill ethanol were 

produced, to 2005 the processing cost of corn ethanol decreased by 45%, while the capital costs 

of a dry mill ethanol facility decreased by 88%.14 Many of the drivers for this cost reduction, 

such as higher ethanol yields, reduced enzyme costs, and better fermentation technologies15are 

also expected to be factors in the lower cellulosic biofuel costs expected in the future. While the 

cost reduction percentages observed in the dry mill corn ethanol industry are not directly 

 

10 Solecki M, Rickey D, Epstein B. Advanced Biofuel Market Report 2011: Meeting the California LCFS. 

Environmental Entrepreneurs. August 22, 2011. Available Online 

<http://www.e2.org/ext/doc/E2%20Advanced%20Biofuel%20Mkt%20Report%202011.pdf>.

11 Nielsen, Peder Holk. “The Path to Commercialization of Cellulosic Ethanol – A Brighter Future.” PowerPoint 

Presentation. Conference Call. February 22, 2012. Available Online 

<http://www.novozymes.com/en/investor/events-presentations/Documents/Cellic3_conf_call_220212.pdf>.

12 IBID

13 Department of Energy. Biomass Multi-Year Program Plan. April 2012. DOE/EE-0702. Available Online 

<http://www1.eere.energy.gov/biomass/pdfs/mypp_april_2012.pdf>.

14 Hettinga WG, Junginger HM, Dekker SC, Hoogwijk M, McAloon AJ, Hicks KB. Understanding the reductions 

in US corn ethanol production costs: An experience curve approach. Energy Policy 37 (2009): 190-203. Available 

Online <http://ddr.nal.usda.gov/bitstream/10113/22550/1/IND44146988.pdf>.

15 IBID
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applicable to the cellulosic biofuel industry, the trend of decreasing production and capital costs 

over time is expected to hold true.

Another area where significant progress has been made is that of feedstock supply for 

commercial-scale cellulosic biofuel production facilities. This issue has often been raised as a 

factor that could hinder the development of the cellulosic biofuel industry as many of the 

proposed facilities rely on feedstocks, such as agricultural residues or energy crops, for which 

supply chains have not previously existed. BP Biofuels has begun work to establish energy crop 

plantations to provide the necessary feedstock for their first two commercial-scale production 

facilities. Over the past several years both Abengoa and Poet have been reaching out to farmers 

in the regions surrounding their first commercial-scale facilities to ensure the availability of the 

necessary feedstock. Because corn cobs and stover are only seasonally available, using them as 

a feedstock for a cellulosic biofuel production facility would require significant feedstock storage 

facilities. In the last two years Abengoa and Poet completed construction of large-scale 

feedstock storage facilities to ensure adequate supply to their cellulosic biofuel production 

facilities throughout the year. Both companies successfully completed fall biomass harvests in 

2011 and have contracted with local farmers to provide feedstock for their cellulosic ethanol 

facilities. This supply chain will not only provide feedstock for their first commercial-scale 

facilities, but also a model that can be re-created at future production facilities.

Several cellulosic biofuel producers are planning to use slash, forest thinnings, and forest 

product residue or the cellulosic portions of yard waste as feedstock. This material has many 

qualities that make it desirable as a cellulosic biofuel feedstock. It is generally inexpensive and 

is readily available in some regions of the United States. It is also available year round rather 

than seasonally, significantly reducing the need for large-scale feedstock storage facilities. 

Securing a sufficient quantity of this feedstock for a commercial-scale facility, however, can be 

challenging. In the summer of 2011 KiOR announced it had signed a feedstock agreement with 

Catchlight Energy to provide all the necessary slash, forest thinning, and forest product residue 

for their first commercial-scale facility. While KiOR plans to transition to planted trees for 

future facilities, KiOR now has secured sufficient feedstock such that they can produce cellulosic 

biofuel and cellulosic RINs using an existing pathway at their first commercial-scale facility. 

INEOS Bio also has a long term agreement with Indian River County to provide vegetative 

waste which will serve as the feedstock for their first facility.

Another appealing feedstock for cellulosic biofuel production is separated municipal 

solid waste (MSW). MSW is already being collected and transported to a centralized facility, is

consistently available throughout the year, and can be obtained for a very low, or even negative 

cost. MSW often contains contaminants, however, that may make it challenging to process for 

some cellulosic biofuel technologies. EPA also requires that waste separation plans be submitted 

and approved prior to any company generating RINs using separated MSW as a feedstock. In 

June 2012 EPA approved the first waste separation plan under the RFS program for Fiberight’s 

facility in Blairstown, Iowa.

Significant progress has also been made by some companies towards funding the 

construction of their first commercial-scale facilities. In the early years of the cellulosic biofuel 

industry several small start-up companies announced plans to build large commercial-scale 
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facilities that were scheduled to begin production in the past few years. The construction of 

many of these facilities was dependent on the companies raising additional funding, either from 

venture capitalists, government grants, or loans backed by government guarantees. So far few of 

the companies that made these early announcements have been able to successfully raise the 

necessary funds and begin construction. Securing this funding proved difficult, and when it did 

not materialize the projects were delayed or cancelled.

The funding profiles of the companies included in our proposed volume for 2013, as well 

as for many of the companies targeting production in 2014, are markedly different. Many of 

these projects have already received, and in several cases have closed on loan guarantees and 

grants offered by DOE or USDA. Other companies have filed for and successfully executed 

IPOs. Several cellulosic ethanol projects are being self-financed by large companies such as 

Abengoa, BP, and Poet with significant experience in the biofuel, petrochemical, and specialty 

chemical markets. This solid financial backing has allowed these companies to proceed with 

construction. Both of the facilities included in our proposed volume for 2013 have already 

completed the construction of their first commercial production facilities. There is therefore far 

less uncertainty as to likely production from these two facilities than has been present for most of 

EPA’s earlier projections. The next section provides additional details on the funding and 

construction status of the projects included in our projected cellulosic biofuel production 

volumes for 2013. 

If these first commercial-scale cellulosic biofuel production facilities are successful, the 

potential exists for a rapid expansion of the industry in subsequent years. Having successful 

commercial-scale facilities would not only provide useful information to help maximize the 

efficiency of future facilities, but would also significantly decrease the technology and scale-up 

risks associated with cellulosic biofuel production facilities and could lead to increased access to 

project funding. Fiberight and ZeaChem both plan to build larger-scale facilities (~25 mill gal 

per year) as soon as they are able to raise the necessary funds. INEOS Bio plans to expand 

production by building additional units near sources of inexpensive feedstock ranging in size 

from 8 to 50 million gallons of ethanol per year. They are currently exploring expansion 

possibilities in the United States and internationally. KiOR has plans for a second commercialscale facility to be built in Natchez, MS, that will be approximately three times larger (~30 mill 

gal per year) than their Columbus, MS, plant and plans to break ground at their second facility 

after their first is fully operational. Abengoa currently anticipates construction of additional 

cellulosic ethanol facilities at multiple locations, likely including co-locating with some of their 

existing starch facilities in the US. Poet has a similar expansion strategy to build cellulosic 

ethanol plants at their grain ethanol facilities, license their technology for use at other grain 

ethanol facilities, and build cellulosic ethanol facilities that use feedstocks such as rice straw, rice 

hulls, woody biomass, or energy crops as a feedstock. Poet’s goal is to be involved in the 

production of 3.5 billion gallons of cellulosic ethanol per year by 2022. Several other 

companies, such as BP, DuPont, and Enerkem are also targeting 2014 for the start-up of 

cellulosic biofuel production facilities and would likely look to build additional facilities 

relatively quickly if successful. While many of these expansion plans are still in the early stages 

and are subject to change, they do point to the potential for cellulosic biofuel production to 

increase rapidly in future years.
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C. Cellulosic Biofuel Volume Assessment for 2013

In 2011 no cellulosic biofuel RINs were generated, though some small volumes were 

produced. Announcements of new projects and project funding, changes in project plans, project 

delays, and cancellations occurred. Biofuel producers faced not only the challenge of the scaleup of innovative, first-of-a-kind technology, but also the challenge of securing funding in a 

difficult economy. While the cellulosic biofuel producer tax credit has been extended through 

2013, the short-term nature of this incentive and legal challenges to the RFS volumes have 

caused some technology developers and investors to question the long term RIN value of 

cellulosic biofuels. The resulting uncertainty may have had an impact on cellulosic biofuel 

production in 2011 and 2012.

Despite these challenges, there are several factors indicating that significant volumes of 

cellulosic biofuel can be produced in 2013. Commercial-scale cellulosic biofuel projects from 

INEOS Bio and KiOR are structurally complete and expected to begin fuel production in the first 

quarter of 2013 and achieve production rates at or near their nameplate capacities by the end of

2013. Another commercial-scale facility backed by Abengoa, a large company with significant 

experience in biofuel production, is also scheduled to begin producing cellulosic biofuel in 2013. 

These facilities are indicative of a shift across the cellulosic biofuel industry from small-scale 

R&D and demonstration facilities operated by small start-up companies to large commercialscale facilities backed by large companies, many of which have substantial experience in related 

industries. 

In order to project cellulosic biofuel production for 2013, we have tracked the progress of 

more than 100 biofuel production facilities. From this list of facilities we used publically 

available information, as well as information provided by DOE and USDA, to make a 

preliminary determination of which facilities are the most likely candidates to produce cellulosic 

biofuel and generate cellulosic biofuel RINs in 2013. Each of these companies was investigated 

further in order to determine the current status of their facilities and their likely cellulosic biofuel 

production and RIN generation volumes for the coming years. Information such as the funding 

status of these facilities, current status of the production technologies, announced construction 

and production rampup periods, and annual fuel production targets were all considered when we 

met with senior level representatives of each company to discuss cellulosic biofuel target 

production levels for 2013. Our projection of the cellulosic biofuel production in 2013 is based 

on the individual production targets that emerged from these discussions, as well as the estimate 

we received from EIA. A brief description can be found below for each of the companies we 

believe will produce cellulosic biofuel and make it commercially available in 2013. We will 

continue to gather more information to help inform our decision regarding the final cellulosic 

biofuel volume to be required for 2013.

In the sections that follow, we first discuss the cellulosic production facilities that were 

part of our volume projections for the 2012 compliance year and the progress that they have 

made. Then we present our consideration of additional facilities that we believe will also 

produce cellulosic biofuel in 2013.
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1. Cellulosic Biofuel Facilities Considered in the 2012 Projections

In the January 9, 2012, final rule that established the required 2012 cellulosic biofuel 

volume, we identified six production facilities that we projected would produce cellulosic biofuel 

and make that fuel commercially available in 2012. Four of these production facilities are 

currently structurally complete, one is currently under construction, and one is planning to 

retrofit an existing corn ethanol plant with construction beginning in the first half of 2013. Six 

active facilities have completed the registration process for the RFS program, and are currently 

able to generate cellulosic RINs. The current status of each of these facilities, including target 

production levels for each facility in 2013, is discussed below.

API

American Process Inc. (API) is developing a project in Alpena, Michigan capable of 

producing up to 900,000 gallons of cellulosic ethanol per year from woody biomass. This 

facility will use a technology developed by API called GreenPower+TM. This technology 

extracts the hemicellulose portion of woody biomass using hot water and hydrolyzes it into 

sugars. These sugars are then converted to ethanol or other alcohols, while the remaining portion 

of the woody biomass, containing mostly cellulose and lignin, is processed into wood paneling at 

a co-located facility. At future, larger-scale facilities API anticipates burning the residual 

biomass in a boiler to produce renewable steam and electricity as well as cellulosic biofuel. 

In January 2010 API received a grant from DOE for up to $18 million for the 

construction of their demonstration facility. Construction of the Alpena, Michigan facility began 

in March 2011 and API began commissioning operations at their facility in the summer of 2012. 

Production start-up is expected to begin in 2013.

Fiberight

Fiberight uses an enzymatic hydrolysis process to convert the biogenic portion of 

separated MSW and other waste feedstocks into ethanol. They have successfully completed five 

years of development work on their technology at their small pilot plant in Lawrenceville, 

Virginia. In 2009 Fiberight purchased an idled corn ethanol plant in Blairstown, Iowa with the 

intention of making modifications to this facility to allow for the production of 6 million gallons 

of cellulosic ethanol per year from separated MSW and industrial waste streams. These 

modifications were scheduled to be completed in 2011, but difficulties in securing funding have 

resulted in construction at this facility being delayed. In January 2012 Fiberight was offered a 

$25 million loan guarantee from USDA. Closing on this loan would provide substantially all of 

the remaining funds required for Fiberight to complete the required modifications at their 

Blairstown facility. Construction is expected to begin in early spring 2013 and the company 

expects that it will take approximately 6 months to complete. Additionally, Fiberight’s waste 

separation plan for this facility was approved in June 2012 allowing Fiberight to generate RINs 

for the cellulosic ethanol they produce using separated MSW as a feedstock. Fiberight is also 

currently developing a second commercial-scale project based on their MSW “hub and spoke” 

Deleted: This facility is currently in the process of 

being upgraded to an integrated demonstration plant 

with initial production of cellulosic ethanol expected 

in October 2012. 
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concept. They anticipate that this facility will begin fuel production in 2014 and will produce 

approximately 25 million gallons of cellulosic ethanol per year when fully built out.

INEOS Bio

INEOS Bio has developed a process for producing cellulosic ethanol by first gasifying 

cellulosic feedstocks into a syngas and then using naturally occurring bacteria to ferment the 

syngas into ethanol. In January 2011 USDA announced a $75 million loan guarantee for the 

construction of INEOS Bio’s first commercial facility to be built in Vero Beach, Florida. This 

loan was closed in August 2011. This was in addition to the grant of up to $50 million INEOS 

Bio received from DOE in December 2009. At full capacity, this facility will be capable of 

producing 8 million gallons of cellulosic biofuel as well as 6 megawatts (gross) of renewable 

electricity from a variety of feedstocks including yard, agricultural, and wood waste. The facility 

also plans to use a limited quantity of separated MSW as a feedstock after initial start-up.

On February 9, 2011, INEOS Bio broke ground on this facility. INEOS Bio completed

construction on this facility in June 2012 and began full commissioning of the facility. In 

August 2012 INEOS Bio received approval from EPA for their yard waste separation plan and 

successfully registered their Vero Beach, FL facility under the RFS program. In October 2012 

the facility began producing renewable electricity. INEOS Bio entered the start-up phase of

cellulosic ethanol production in November 2012. During this phase the facility was not run 

continually as facility modifications continued to be made, however a small volume of cellulosic 

ethanol was successfully produced. INEOS Bio has reported that they plan to be producing 

cellulosic ethanol at levels near the facility’s capacity of 8 million gallons per year throughout 

2013. This reported schedule represents a very aggressive ramp-up period. Due to the many 

challenges of starting up a first-of-a-kind facility and the history of production delays in the 

cellulosic biofuel industry, EPA believes a more conservative projection is appropriate. For this 

proposal we project 6 million gallons of cellulosic ethanol from INEOS Bio in 2013. This 

volume is consistent with what would be expected from this facility assuming a six month 

straight-line ramp-up period beginning in January 2013. EPA requests comment on the projected 

available volume from INEOS Bio’s facility in 2013, as well as these assumptions for the 

appropriate ramp-up period for cellulosic biofuel facilities and expectations for production 

during this ramp-up phase. EPA will monitor INEOS Bio’s production output in the time 

between this proposal and the final rule and will consider that information, together with public 

comments received in making a final projection. INEOS Bio is also exploring several 

opportunities for additional cellulosic biofuel production facilities, both in the United States and 

internationally. INEOS Bio is targeting sources of inexpensive feedstock, primarily waste 

materials, and sees a market for plants with production capacities ranging from 8 to 50 million 

gallons per year.

KiOR

KiOR is working to commercialize a technology capable of converting biomass to a 

biocrude using a process they call Biomass Fluid Catalytic Cracking (BFCC). BFCC uses a 

catalyst developed by KiOR in a process similar to Fluid Catalytic Cracking currently used in the 

petroleum industry. The first stage of this process produces a renewable crude oil which is then 
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upgraded to produce primarily gasoline, diesel, and jet fuel as well as a small quantity of fuel oil, 

all of which are nearly identical to those produced from petroleum. 

KiOR’s first commercial-scale facility is located in Columbus, Mississippi and is capable 

of producing approximately 11 million gallons of gasoline, diesel, and jet fuel per year. 

Construction on this facility began in May 2011 and was completed in September 2012. KiOR’s 

Columbus facility is currently in the start-up phase. They have produced biocrude from 

cellulosic feedstocks that is in line with their specifications for upgrading to finished 

transportation fuels. Cellulosic biofuel RINs from this facility are expected in the first quarter of

2013. This facility is funded, in large part, with funds acquired through private equity raises and 

supplemented by KiOR’s $150 million IPO in June 2011. KiOR’s current expectations at their 

Columbus facility are for a start-up

16 period lasting 9-12 months during which they estimate fuel 

production will be at 30%-50% of the facility capacity after which they plan to approach full 

production rates at the facility. KiOR has feedstock supply agreements in place to supply all of 

the required feedstock for their Columbus facility with slash and pre-commercial thinning. They 

also have off-take agreements with several companies for all of the fuel that will be produced. 

KiOR has also announced plans to begin work on their second commercial-scale biofuel 

production facility in Natchez, Mississippi upon the successful start-up of their first facility. It is 

unlikely this second facility will begin production of biofuel in 2013. For 2013 our proposed 

production projection is for 5 million gallons (8 million ethanol-equivalent gallons) of cellulosic 

biofuel from KiOR’s Columbus facility. This volume is calculated assuming KiOR will produce 

at 30% of the facility capacity for the first nine months of 2013 (consistent with a 12 month lineout period beginning in October 2012) followed by three months of production at the nameplate 

capacity of the facility.17 These numbers are relatively conservative estimates based on the low 

end of KiOR’s production guidance. EPA believes this is an appropriate approach for this 

proposal. We will continue to monitor KiOR’s production volume in the period between this 

proposal and the final rule and will use this information, together with the public comments we 

receive in preparing an updated projection for the final rule.

Blue Sugars

Blue Sugars, formerly KL Energy, has developed a process to convert cellulose and 

hemicellulose into sugars and ethanol using a combined chemical/thermal-mechanical 

pretreatment process followed by enzymatic hydrolysis, co-fermentation of C5 and C6 sugars, 

and distillation to fuel-grade ethanol. This production process is versatile enough to allow for a 

wide variety of cellulosic feedstocks to be used, including woody biomass and herbaceous 

biomass such as sugarcane bagasse. In August 2010 Blue Sugars announced a joint development 

agreement with Petrobras America Inc. As part of the agreement Petrobras has invested $11 

million to modify Blue Sugars’ 1.5 million gallons per year demonstration facility in Upton, 

Wyoming to allow it to process bagasse and other biomass feedstocks. The modifications to 

Blue Sugars’ facility were completed in the spring of 2011. In April 2012 Blue Sugars generated 

 

16 In conversations with KiOR they refer to this as a “line-out” period

17 EPA is not assuming that this facility will produce at a 30% rate throughout the entire start-up period, but rather 

projects that cellulosic biofuel production, when averaged over the entire start-up period, will be 30% of the 

production capacity during that period. Production will likely be very small in the first few months and will ramp up 

to near full production capacity by the end of the start-up period. 
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approximately 20,000 cellulosic biofuel RINs, the first such RINs generated under the RFS 

program. Blue Sugars has indicated, however, that the cellulosic ethanol they produced was 

exported to Brazil for promotional efforts at the Rio +20 conference in Brazil. These RINs 

would therefore have to be retired and will not be available to obligated parties to meet their 

cellulosic biofuel requirements in 2012. The main purpose of the Upton, Wyoming facility is to 

further refine Blue Sugars’ technology in preparation for their first commercial facilities which 

may be located in the Brazil or the United States.

ZeaChem

ZeaChem successfully completed construction of the core components of their 

demonstration-scale facility in Boardman, Oregon, in January 2012, allowing for the production 

of ethyl acetate from sugars derived from cellulose and hemi-cellulose. When fully operational, 

ZeaChem expects this facility will be capable of producing 250,000 gallons of cellulosic ethanol 

per year. ZeaChem’s production process uses a combination of biochemical and thermochemical 

technologies to produce ethanol and other renewable chemicals from cellulosic materials. The 

feedstock is first fractionated into two separate streams, one containing sugars derived from 

cellulose and hemicellulose and the other containing lignin. The sugars are fermented into an 

intermediate chemical, acetic acid, using a naturally occurring acetogen. The acetic acid is then 

converted into ethyl acetate, which can then be hydrogenated into ethanol. The hydrogen 

necessary for this process is produced by gasifying the lignin stream from the cellulosic biomass. 

Construction is currently underway to add the front-end operations, the conversion of cellulosic 

biomass to sugars, and the back-end process, the upgrading of the chemicals produced to 

transportation fuel, to the existing core facility. Work is currently underway to add additional 

process modules that will enable ZeaChem to convert the cellulosic ethanol to jet and diesel fuel 

beginning in 2013. 

ZeaChem’s process is flexible and is capable of producing a wide range of renewable 

chemicals and fuels from many different feedstocks. They plan to use both agricultural residues 

and wood waste at their demonstration facility and have contracts in place for these feedstocks, 

as well as purpose-grown wood, at their first commercial-scale facility. In January 2012 

ZeaChem announced that they had received a $232.5 million conditional loan guarantee offer 

from USDA for the construction of their first commercial-scale facility, which will have a 

capacity of at least 25 million gallons per year. ZeaChem currently has agreements in place to 

provide all of the necessary feedstock for this facility. This facility, however, is not expected to 

begin producing cellulosic biofuel until late 2014 at the earliest. 

2. Facilities not Included in 2012 Projections

In addition to the facilities that were included in our cellulosic biofuel volume projections 

for the 2012 compliance year, there is one additional facility that we believe will produce 

volumes in 2013. Several other large production facilities are planning to begin production of 

cellulosic biofuel in 2014.

Abengoa

Comment [A5]: 1/22/2013 – The report does not 

mention why all 2012 cellulosic ethanol was 

exported (as reported in the January 2013 report by 

LMC International). It does not seem to be a 

technical issue (in the preamble is a statement that 

EPA has not reached the blend wall), so why the 

exports?

Comment [A7]: Bluesugars has formed a 

partnership with Petrobras to develop cellulosic 

ethanol facilities in Brazil. Petrobras imported the 

cellulosic ethanol to use in promotional efforts at the 

Rio+20 conference in Brazil. This was not a 

technical or economic decision, and we have no 

reason to believe cellulosic biofuel will be exported 

from the US in appreciable quantities in the future.

Comment [A6]: 1/24/2013 - Suggestion
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Abengoa, a large international biofuels company, is one of two new cellulosic biofuels 

producers expected to begin the production of cellulosic biofuels and RINs from a commercialscale facility in 2013. Abengoa plans to use an enzymatic hydrolysis technology to convert corn 

stover and other agricultural waste feedstocks into ethanol. After successfully testing and 

refining their technology at a pilot-scale facility in York, Nebraska as well as in a demonstrationscale facility in Salamanca, Spain, Abengoa is now working towards the completion of their first 

commercial-scale cellulosic ethanol facility in Hugoton, Kansas. Abengoa has contracts in place 

to provide the majority of feedstocks necessary for this facility for the next 10 years and 

successfully completed their first biomass harvest in the fall of 2011. Construction at this 

facility, which began in September 2011, is expected to take 24 months and be completed in the 

fourth quarter of 2013. All of the major process equipment for this project has been purchased 

and all of the required permits for construction have been approved. Abengoa’s Hugoton facility 

is being partially funded by a $132 million Department of Energy (DOE) loan guarantee.

When completed, the Hugoton plant will be capable of processing 700 dry tons of corn 

stover per day, with an expected annual ethanol production capacity of approximately 24 million 

gallons. Abengoa plans to begin ramping up production at the facility shortly after completing 

construction in late 2013 and to be producing fuel at rates near the nameplate capacity in the 

second quarter of 2014. After successfully proving their technology at commercial-scale in 

Hugoton, Abengoa currently plans to construct additional similar cellulosic ethanol production 

facilities, either on greenfield sites or co-locating these new facilities with their currently existing 

starch ethanol facilities around the United States. While this facility could produce up to 1 

million gallons of cellulosic ethanol in 2013 even a slight delay would result in no fuel being 

produced in 2013. Given the history of delays in the cellulosic biofuels industry we are not 

including any volume from Abengoa’s Hugoton, KS facility in our proposed projected available 

volume for 2013. 

Poet

Poet has also developed an enzymatic hydrolysis process to convert cellulosic biomass 

into ethanol. Poet has been investing in the development of cellulosic ethanol technology for 

more than a decade and began producing small volumes of cellulosic ethanol at pilot-scale at 

their plant in Scotland, SD in late 2008. In January 2012, Poet formed a joint venture with Royal 

DSM of the Netherlands called Poet-DSM Advanced Biofuels to commercialize and license their 

cellulosic ethanol technology. 

The joint venture’s first commercial-scale facility, called Project LIBERTY, will be 

located in Emmetsburg, Iowa. This facility is designed to process 770 dry tons of corn cobs, 

leaves, husks, and some stalk per day into cellulosic ethanol. The facility is projected to have an 

annual production capacity beginning at approximately 20 million gallons per year, increasing 

over time to 25 million gallons per year. In anticipation of the start-up of this facility, Poet 

constructed a 22-acre biomass storage facility and had its first commercial harvest in 2010, 

collecting 56,000 tons of biomass. 
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Site prep work for Project LIBERTY began in the summer of 2011, and vertical 

construction of the facility began in the spring of 2012. Poet was awarded a $105 million loan 

guarantee offer for this project from DOE in July 2011, but with the joint venture decided to 

proceed without the loan guarantee. This project is expected to be completed by the end of 2013, 

however at this time EPA is not expecting any commercial cellulosic ethanol production from 

this facility until 2014. After the completion of Project LIBERTY, Poet plans to build cellulosic 

ethanol facilities at all of their existing corn ethanol plants. They are also planning to license 

their technology for use at other grain ethanol plants, as well as build additional plants that will 

process wheat straw, rice hulls, woody biomass or herbaceous energy crops. By 2022 Poet has a 

goal of producing 3.5 billion gallons of cellulosic ethanol per year.

Other companies

There are several more companies planning to begin producing cellulosic biofuel from 

commercial-scale facilities in 2014. Companies such as BP, Coskata, DuPont, Enerkem, and 

several others are all currently targeting 2014 for the start-up of their first commercial facilities. 

These facilities represent approximately 100 million gallons of additional cellulosic biofuel 

production capacity. As with the companies discussed above, most of these companies have 

already begun to develop plans for their successive facilities after the successful completion of 

their initial projects. While they will not contribute any volume in 2013, and have therefore not 

been included in our proposed volume, they are a further indication of the potential for the

significant growth of the cellulosic biofuel industry in the United States in the near future.

3. Other Potential Sources of Domestic Cellulosic Biofuel 

Each of the companies listed in the previous two sections is planning to generate 

cellulosic biofuel RINs using one of the valid RIN-generating pathways listed in Table 1 to 

§80.1426. We are also aware of several companies who may be in a position to produce 

cellulosic biofuel in 2013 but intend to use a production pathway that is not currently approved 

for RIN generation. Pathways that are currently under evaluation by EPA include transportation 

fuels derived from landfill biogas such as CNG and cellulosic ethanol produced from corn kernel 

fiber. If these or other cellulosic biofuel pathways are approved by EPA, they may be used to 

generate cellulosic biofuel RINs in 2013. Because the date of any final determination on these 

pathways is uncertain, however, no volume of cellulosic fuel from these pathways has been 

included in our proposed 2013 cellulosic biofuel projection.

4. Imports of Cellulosic Biofuel

While domestically produced cellulosic biofuels are the most likely source of cellulosic 

biofuel available in the United States in 2013, imports of cellulosic biofuel produced in other 

countries may also generate RINs and participate in the RFS program. While the RFS program 

does provide a financial incentive for companies to import cellulosic biofuels into the United 

States, the combination of local demand, financial incentives from other governments, and 

transportation costs for the cellulosic biofuel has resulted in no cellulosic biofuel being imported 

Deleted: is scheduled to begin
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to the United States thus far. We believe this situation is likely to continue in the near future and 

has not included any cellulosic biofuel imports in our projections of available volume in 2013. 

As in the United States, the production of cellulosic biofuels internationally is currently 

limited to small-scale research and development, pilot, and demonstration facilities. This is 

likely to continue to be the case throughout 2013. Two notable exceptions are facilities built and 

operated by Beta Renewables and Enerkem. Beta Renewables completed construction of their 

first commercial-scale facility located in Crescentino, Italy in the summer of 2012. This facility 

is designed to produce approximately 20 million gallons of cellulosic ethanol per year. Beta 

Renewables uses an enzymatic hydrolysis process to produce ethanol from local agricultural 

residues and herbaceous energy crops. 

Enerkem is also in the process of building their first commercial-scale facility in 

Edmonton, Alberta and plans to begin operations in early 2013. Enerkem’s facility will use a 

thermochemical process to produce syngas from MSW and then catalytically convert the syngas 

to methanol. The methanol can then be sold directly or upgraded to ethanol or other chemical 

products. At full capacity this facility will be capable of producing 10 million gallons of 

cellulosic ethanol per year. At this point, neither Beta Renewables nor Enerkem have registered 

their facilities under the RFS program, a necessary step that must be completed before these 

companies can generate RINs for any fuel they import into the United States. Both are planning 

to locate additional plants in the United States in the future and are likely to generate RINs for 

production from domestic facilities in future years.

5. Projections from the Energy Information Administration

Section 211(o)(3)(A) of the Clean Air Act requires EIA to "...provide to the Administrator of the Environmental Protection Agency an estimate, with respect to the following 

calendar year, of the volumes of transportation fuel, biomass-based diesel, and cellulosic biofuel 

projected to be sold or introduced into commerce in the United States." EIA provided these 

estimates to us on October 18, 2012.

18

 With regard to cellulosic biofuel, the EIA estimated that 

the available volume in 2013 would be 9.6 million gallons (13.1 million ethanol-equivalent 

gallons). A summary of the commercial scale plants they considered and associated production 

volumes is shown below in Table II.C.5.

 

18 Letter from Adam Sieminski, EIA Administrator to Lisa Jackson, EPA Administrator October 18, 2012.

Comment [A8]: 1/22/2013 - Throughout this 

section, there is confusion over the year being 

evaluated -- sometimes the text refers to 2012 and 

other times to 2013. For example, the first paragraph 

refers to a 2012 EIA cellulosic ethanol estimate of 

9.6 million gallons. However, table II.B. uses 

“2013” in the title. 

Comment [A9]: The references to 2012 are 

largely typos and have been corrected.

Deleted: 2012 

Comment [A10]: 1/22/2013 - But in October, 

2012 an EIA publication titled “Biofuels Issues and 

Trends” states that cellulosic ethanol production will 

be less than 0.5 million gallons by year end 2012. 

The EIA estimate for cellulosic ethanol 

production/capacity in 2013 is reported at 9.6 million 

gallons compared to EPA’s estimate is 11 million 

gallons. EPA states that these numbers are “similar 

enough to support the volumes we are finalizing.” In 

the EIA report cited above, EIA projected a total

capacity of 71 million gallons. Does EPA know the 

differences between the EIA number of 71 million 

gallons from the Biofuels trend report and the EIA 

number of 9.6 million gallons that they signed-off on 

during the rule review? 

Comment [A11]: The 9.6 million gallon 

projection is for 2013, not 2012, and has been 

projected. 

With regards to the 71 million gallons in the biofuels 

issues and trends report, note that this is EIA’s 

projection of capacity – not production. In this 

number EIA included facilities under construction by 

Abengoa, Fiberight, and Poet. These three facilities 

are discussed in the sections above. All of these 

facilities are planning to complete construction near 

the end of 2013 and are unlikely to produce much, if 

any, cellulosic volume. EPA and EIA are in 

agreement on this issue and the timing of these 

facilities. The relevant number for this rule is 

projected production, not capacity. On this metric 

EPA’s estimate (14 million ethanol equivalent 

gallons) and EIA’s estimate (13.1 ethanol equivalent 

gallons) are very close.
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Table II.C.5

Cellulosic Biofuel Plants Expected to Generate Biofuel RINs for 2013

Mechanical 

Completion

Company Location Product Design 

Capacity

EIA Forecast

Utilization Production 

(Million Gallons)

Ethanol-Equivalent 

Production (Million 

Gallons)

2012 INEOS Bio Vero Beach, FL Ethanol 8 50% 4.0 4.0

2012 KiOR Columbus, MS Liquids 11 50% 5.5 9.0

Various Various Pilot 

Plants

Various Ethanol 1 10% 0.1 0.1

Total Capacity and Production for 2013 20 48% 9.6 13.1
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EIA’s projections of cellulosic biofuel production in 2013 are very similar to EPA’s 

projections discussed above and summarized in Section II.C.6 below. The lists of companies 

that EIA and EPA expect to generate cellulosic biofuel RINS in 2013 are the same. There are, 

however, differences in the volumes of cellulosic biofuel expected to be produced at the 

production facilities listed. EPA has higher projections of cellulosic biofuel production for 

INEOS Bio (6 million gallons vs. 4 million gallons) and lower projections for KiOR (8 million 

ethanol-equivalent gallons vs. 9 million ethanol equivalent gallons). These variations are a result 

of different methodologies used by EIA and EPA to project biofuel production in future years. 

Both INEOS Bio and KiOR are structurally complete commercial scale facilities that plan to 

operate throughout 2013. In their projections EIA has used a utilization rate of 50% for both of 

these facilities. Rather than use utilization rates to project production, EPA has estimated rampup schedules for the both INEOS Bio and KiOR. The ramp-up schedules estimated for these 

facilities differ from each other and were developed based on information received from the 

companies and EPA’s knowledge of the production processes used by each company. We 

believe these different ramp-up schedules, which correspond to different effective utilization 

rates, are appropriate due to the significant differences in the technologies used by INEOS Bio 

and KiOR to produce cellulosic biofuel. EPA and EIA both considered the timing of the 

anticipated start up of these facilities along with anticipated ramp-up schedules in projecting 

volume production for 2013. As both facilities plan to start production at approximately the 

same time, the difference in the effective utilization rates represented by EPA’s projected 

volumes for these companies is the result of anticipated ramp-up schedules. More information 

on the ramp-up schedules used by EPA in our projected production volumes for INEOS Bio and 

KiOR can be found in Section II.C.1 above.

While the cellulosic biofuel volume projections for 2013 provided by EIA are not 

identical to those being finalized in this rule EPA believes that they are similar enough to support 

the volumes we are finalizing. Where differences exist they are due to differences in the rampup schedules estimated by EPA and EIA for the two companies expected to produce cellulosic 

biofuel in 2013. As discussed above, EPA believes the approach we have taken is appropriate. 

EPA has interpreted section CAA 211(o)(7)(D) as vesting the authority for making the projection 

with EPA, and is not re-opening that interpretation for comment in today’s proposal. As 

described in past rulemakings, the statute provides that the projection is “determined by the 

Administrator based on the estimate provided [by EIA].” If Congress intended that EPA simply 

adopt EIA’s projection without an independent evaluation, it would not have specified that the 

projection is “determined by the [EPA] Administrator”. Although the statute provides that our 

determination must be “based on the estimate provided” by EIA, we interpret this statutory 

directive as being satisfied when we consider EIA’s estimate in deriving our own projection.

6. Summary of Volume Projections

The information we have gathered on the potential cellulosic biofuel producers in 2013, 

described above, allows us to project volumes that are reasonably likely to be produced by each 

facility in 2013. For the purposes of this proposed rulemaking we have focused on commercialscale cellulosic biofuel production facilities. We believe our focus on commercial-scale facilities 

is appropriate as the industry transitions from small-scale R&D and pilot facilities to large-scale 

Deleted: 2012 

Comment [A12]: 1/22/2013 - This statement is 

confusing because earlier it was said that no RINS 

were generated in 2012. Furthermore, EPA tracks 

RINs not EIA, so how could there be a difference? 

Comment [A13]: Should read 2013, not 2012.
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commercial production. It is likely that several small-scale facilities such as API, KL Energy, 

ZeaChem, and others will also produce some cellulosic biofuel in 2013. Indeed, EIA’s 

projection from such facilities was only 0.1 million gallons in 2013. This volume is quite small 

in relation to that expected from the two commercial-scale facilities for which we have projected 

volumes in 2013 (see Table II.C.6-1 below). Additionally, while RINs may be generated for 

any cellulosic biofuel produced from these small R&D and pilot facilities, historically many have 

chosen not to do so for a variety of reasons. We are therefore not proposing to include a volume 

projection from these facilities. We invite comment on this issue.

In 2013 as many as four domestic cellulosic biofuel production facilities have the 

potential to produce fuel at commercial scale. Each of these facilities is discussed above, and the 

facility production targets for each are summarized in Table II.C.6-1 below. Two of the 

companies that have the potential to produce cellulosic biofuel in 2013, Abengoa and Fiberight, 

are not planning on beginning fuel production until late in the year. Even a small delay in their 

expected production timeline could result in their failure to produce any cellulosic biofuel in 

2013. For the purpose of this proposal, therefore, we are not projecting production from these 

facilities in 2013 consistent with EIA. 

When added together, the total projected production volume from commercial-scale 

production facilities in the United States in 2013 is 11 million gallons (14 million ethanolequivalent gallons). This number represents the expected fuel production from each facility, 

taking into account the EIA estimates and the many factors described in detail above.
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Table II.C.6-1

Projected Available Cellulosic Biofuel for 2013

Company 

Name Location Feedstock Fuel

Design

Capacity 

(MGY)

First Production 

(projected)

2013 Projected

Available 

Volume (MG)

Abengoa Hugoton, KS Corn Stover Ethanol 24 4

th Quarter 2013 0

Fiberight Blairstown, IA MSW Ethanol 6 4

th Quarter 2013 0

INEOS Bio Vero Beach, FL Vegetative Waste Ethanol 8 1

st Quarter 2013 6

KiOR Columbus, MS Wood Waste Gasoline 

and Diesel

11 1

st Quarter 2013 8

Various 

Pilot/ Demo 

Plants

N/A N/A N/A N/A N/A 0

Total 49 14
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D. Proposed Cellulosic Biofuel Volume for 2013

In today’s NPRM we are proposing a volume for the 2013 cellulosic biofuel standard that 

is based on production targets developed in consultation with the companies with the potential to 

produce cellulosic biofuel from commercial-scale facilities in 2013. Many factors have been 

taken into consideration in developing these production targets, such as the current status of 

project funding, the status of the production facility, anticipated construction timelines, the 

anticipated start-up date and ramp-up schedule, feedstock supply, intent to generate RINs, and 

many others. We believe the sum of these individual projected available volumes (14 million 

ethanol-equivalent gallons) is a reasonable representation of likely production. Moreover, all of 

the companies included in our 2013 volume projections have invested a significant amount of 

time and resources developing their technologies at R&D and demonstration-scale facilities prior 

to the design and construction of their first commercial-scale facilities. The projects have solid 

financial backing; for example the INOES Bio project is backed by federal loan guarantees. By 

the time of our final rule the facilities owned by KiOR and INEOS Bio are scheduled to have 

already begun fuel production, making our 2013 projections more reliable than prior year 

projections. 

It is important to note that the final cellulosic biofuel standard for 2013 may be set at a 

volume that differs from the proposed volume. This could happen for a variety of reasons, 

including unexpected project modifications or cancellations or the inclusion of volumes of 

cellulosic biofuel from sources other than those listed above. For example, the proposed 

projected available volume of cellulosic biofuel in 2013 discussed above (14 million ethanolequivalent gallons) does not include potential contributions from cellulosic ethanol produced 

from corn fiber or transportation fuels derived from landfill biogas such as CNG. Together, 

these pathways could generate several tens of millions of gallons of ethanol-equivalent 

renewable fuel. However, since it is uncertain when our evaluation of these pathways will be 

completed we have not included their volumes in our 2013 projection in this NPRM. If any of 

these pathways are approved prior to the final rule, additional volume from these sources may be 

added to the target production volumes listed in Table II.C.5-1 for the final rule.

We will continue to monitor the progress of the cellulosic biofuel industry, in particular 

the progress of the companies which form the basis of our 2013 volume projection. As time 

progresses and we are able to track whether or not the cellulosic biofuels producers are able to 

meet the construction and ramp-up schedules they have presented, and after considering public 

comments we receive on this proposal, we will have a clearer idea of the appropriate volume of 

fuel that we can reasonably expect to be produced and made commercially available in 2013.
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III. Assessment of Advanced Biofuel and Total Renewable Fuel for 2013

As described in Section I, the volumes of renewable fuel to be used under the RFS2 

program each year (absent an adjustment or waiver by EPA) are specified in CAA 211(o)(2). 

For 2013, the applicable volume of advanced biofuel is 2.75 bill gal and the applicable volume of 

total renewable fuel is 16.55 bill gal. However, the statute gives EPA the discretion to reduce 

these volume requirements in the event that the cellulosic biofuel volume requirement is reduced. 

While we are not proposing to reduce the required volumes of advanced biofuel and total 

renewable fuel for 2013, we request comment on whether and to what extent a reduction is 

warranted. We have the discretion to reduce the advanced biofuel volume and the total 

renewable requirements for 2013 by up to the amount that the cellulosic biofuel volume 

requirement is reduced (986 mill gal in today's proposal). This section discusses our evaluation 

of these two volume requirements.

A. Statutory Requirements

According to CAA 211(o)(7)(D)(i), if EPA determines that the projected volume of 

cellulosic biofuel production for the following year is less than the applicable volume provided 

in the statute, then EPA must reduce the applicable volume of cellulosic biofuel to the projected 

volume available during that calendar year. Under such circumstances, EPA also has the 

discretion to reduce the applicable volumes of advanced biofuel and total renewable fuel by an 

amount not to exceed the reduction in cellulosic biofuel. 

Section 211(o)(7)(D)(i) provides that “For any calendar year in which the Administrator 

makes such a reduction, the Administrator may also reduce the applicable volume of renewable 

fuel and advanced biofuels requirement established under paragraph (2)(B) by the same or a 

lesser volume.” Thus Congress authorized EPA to reduce the volume of total renewable fuel 

“and” advanced biofuels. This indicates a clear Congressional intention that EPA may reduce 

both the total renewable and advanced biofuel volume together, not one or the other. 

This is consistent with the structure of the national volume standards, where the volume 

standards are nested and are not separate, unrelated standards. Congress established the 

advanced biofuel standard and its subsets as integral parts of the total renewable fuel standard. 

The volume requirements are interrelated and work together to achieve the goals of increasing 

the displacement of fossil fuel and increasing the use of fuels that reduce greenhouse gases. As 

described in the NPRM for the RFS2 program, we do not believe it would be appropriate to 

lower the advanced biofuel standard but not the total renewable standard, as doing so would 

allow conventional biofuels to effectively be used to meet the standards that Congress 

specifically set for advanced biofuels. See 74 FR 24915. EPA interprets this provision as 

authorizing EPA to reduce both total renewable fuel and advanced biofuel, by the same amounts, 

if EPA reduces the volume of cellulosic biofuel. The reductions in total renewable fuel and 

advanced biofuel can be up to but no more than the amount of reduction in the cellulosic biofuel 

volume.

Comment [A14]: 1/22/2013 - suggestion
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Since cellulosic biofuel is also used to satisfy the advanced biofuel standard and the total 

renewable fuel standard, any reductions in the applicable volume of cellulosic biofuel will also 

affect the means through which obligated parties comply with these two other standards. 

Congress established the volume requirements for advanced biofuel and total renewable fuel in 

conjunction with the specified cellulosic biofuel volumes, as interrelated standards. Therefore it 

is appropriate to consider a possible reduction in the advanced biofuel and total renewable fuel 

applicable volumes when EPA reduces the cellulosic biofuel volume below the applicable 

volume for cellulosic biofuel set forth in the statute. 

In 2013 the applicable volume of cellulosic biofuel specified in the statute represents 

more than a third of the advanced biofuel volume (1.0 bill gal out of 2.75 bill gal), a higher 

fraction than in any previous year. A substantial reduction in the applicable volume of cellulosic 

biofuel could potentially also have a substantial impact on the sufficiency of volumes to meet the 

advanced biofuel and total renewable fuel standards. As described in Section II.D above, we are 

indeed proposing a projected available volume of cellulosic biofuel for 2013 at significantly 

below the statutory applicable volume of 1.0 billion gallons. If we were to finalize a cellulosic 

biofuel applicable volume of 14 mill gallons for 2013, we would have the discretion to reduce 

the advanced biofuel and total renewable fuel applicable volumes by up to 986 mill gallons 

(ethanol-equivalent). Therefore, we believe that an investigation into the availability of 

advanced biofuel and total renewable fuel is warranted.

The statute does not provide any explicit criteria that must be met or factors that must be 

considered when making a determination as to whether and to what degree to reduce the 

advanced biofuel and total renewable fuel applicable volumes when we have the discretion under 

CAA 211(o)(7)(D)(i) to do so. However, in general we believe that it would not be consistent 

with the energy security19 and greenhouse gas reduction goals of the statute to reduce the 

applicable volume of advanced biofuel set forth in the statute if there are sufficient volumes of 

advanced biofuels available, even if those volumes do not include the amount of cellulosic 

biofuel that Congress may have desired. 

Due to its relevance to RFS volume requirements, we note here that in the summer of 

2012 and in light of drought conditions affecting much of the country, Governors from several 

States and a number of organizations requested a waiver of the national volume requirements for 

the RFS pursuant to Section 211(o)(7)(A) of the Clean Air Act. The general waiver authority 

granted in this part of the statute is different from the authority granted in Section 211(o)(7)(D) 

that allows the advanced biofuel and total renewable fuels volume requirements to be reduced in 

the event that the cellulosic biofuel volume is reduced. After extensive analysis, review of 

thousands of comments, and consultation with the Department of Agriculture and the 

Department of Energy, the EPA on November 27, 2012 published a Federal Register decision 

denying the requests for a waiver.20 The Federal Register notice contains a detailed description 

of the analysis EPA conducted in conjunction with DOE and USDA, along with a discussion of 

relevant comments we received through our public comment process. 

 

19 The energy security analysis took into account both domestic and foreign sources of advanced biofuel.

20 77 FR 70752, November 27, 2012.
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B. Assessment of Available Volumes of Advanced Biofuel

Renewable fuels that can be used to meet the standard for advanced biofuel include those 

with Renewable Identification Number (RIN) codes of 3, 4, 5, or 7. Table III.B-1 shows the 

number of each of these types of RIN that was generated in 2011. For the final rule, we will 

update our analysis with estimates from 2012.

Table III.B-1

2011 RINs That Qualified to Meet the Advanced Biofuel Standard21

(million ethanol-equivalent gallons)

D 

code Category Ethanol Biodiesel

Renewable 

diesel

Biogas and

heating oil

3 Cellulosic biofuel 0 0 0 0

4 Biomass-based 

diesel

0 1,600 76 0

5 Advanced biofuel 186 0 27 8

7 Cellulosic diesel 0 0 0 0

Total 1,895

The total of 1,895 mill ethanol-equivalent gallons is significantly higher than the 1,350 mill gal 

required in 2011 and nearly as high as the 2012 advanced biofuel requirement of 2,000 mill gal. 

This result supports our projection in the rulemaking setting the 2012 standards22 that there was 

no need to reduce the 2012 advanced biofuel requirement despite the significant reduction in the 

applicable volume of cellulosic biofuel.

The statutory volume requirement for advanced biofuel in 2013 is 2,750 mill gal, an 

increase of 750 mill gal over the 2012 requirement of 2,000 mill gal. In order to determine the 

sufficiency of advanced biofuel volumes to meet a requirement for 2,750 mill gal in 2013, we 

first accounted for biomass-based diesel and cellulosic biofuels that would be required under the 

standards we are proposing today. As shown in Table III.B-2, the result is that there would need 

to be 816 mill ethanol-equivalent gallons of other advanced biofuels in order to meet the total 

advanced biofuel requirement of 2,750 mill gal.

Table III.B-2

Necessary Volume of Advanced Biofuel (mill gal ethanol-equivalent)

2013 Advanced biofuel applicable volume 2,750

Cellulosic biofuel requirement 14

Biomass-based diesel requirement 1,920a

Necessary volume of excess biodiesel, other 

domestic advanced biofuels, and/or imported 

sugarcane ethanol

816

a

 In 2011, a substantial majority of biomass-based diesel was biodiesel. 

Moreover, we expect further increases in biomass-based diesel to be met 

primarily with expanded biodiesel. Therefore, for this analysis we have 

 

21 2011 data from the EPA-Moderated Transaction System (EMTS)

22 77 FR 1320, published on January 9, 2012
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assumed that the 1.28 bill gal requirement is composed entirely of biodiesel with 

an equivalence value of 1.5.

We have identified a variety of sources of advanced biofuel that could meet the need for 

816 mill gal of additional advanced biofuel, including the following:

• Biodiesel in excess of that required to meet the volume requirement of 1.28 

bill gal

• Domestically produced advanced biofuels such as renewable diesel that does 

not qualify as biomass-based diesel, heating oil and qualifying fuel oil, and 

ethanol and other qualifying renewable fuels from separated food wastes

• Imported sugarcane ethanol

We have investigated each of these sources as discussed below.

1. Biodiesel

In a separate action, we have finalized a biomass-based diesel volume of 1.28 bill gal for 

2013. However, biomass-based diesel volumes above 1.28 bill gal are possible. As of October 

2012, the aggregate production capacity of biodiesel plants in the U.S. is estimated to be 2.1

billion gallons per year across 107 facilities.23 This includes idled plants, those producing at less 

than full capacity, and those that are producing products other than biodiesel. We expect the 

time and reinvestment required to ramp up biodiesel production at existing facilities to be likely 

on the order of 1-2 months, significantly less than the time required to build and begin 

production at new plants, which takes about a year on average.

24

 Thus, restarting idled plants is 

likely to be a cost-effective way of exceeding the applicable volumes of 1.28 bill gal in 2013 if a 

demand for such production exists.

Moreover, the biodiesel industry has demonstrated that it can increase production quickly 

under appropriate circumstances. Total production of biomass-based diesel in 2011 exceeded 1.0 

bill gal, compared to a 2010 production of about 380 mill gallons.25 In response to the NPRM 

published on July 1, 2011, some stakeholders expressed doubts that such increases could occur 

by 2012.26 Nevertheless, based on the single-year increase of more than 600 mill gal in 2011 and 

the total capacity of existing plants described above, it is possible that the industry could achieve 

increases in production of both the 280 mill gallon increment that is reflected in the biomassbased diesel requirement for 2013 as well as some "excess" production.

 

23 Figures taken from Table 4, "Monthly Biodiesel Production Report," EIA, December 2012.. 

24 Based on construction times for new plants listed in Biodiesel Magazine from July 2006 through May 2009.

25 All values from EMTS. 2010 estimate consists of approximately 209 mill gallons as recorded through EMTS for 

volume produced under the RFS2 regulations in July through December of 2010, and approximately 171 mill 

gallons as recorded through RIN generation reports submitted by producers for volume produced under the RFS1 

regulations in January through June of 2010.

26 See comments in docket EPA-HQ-OAR-2010-0133 from the American Petroleum Institute, Marathon Petroleum 

Company, and the National Petrochemical Refiners Association.

Comment [A15]: 1/22/2013 - Does EPA have 

forecasts for biodiesel capacity for 2013? EPA 

states the capacity at 2.1 billion gallons but no 

production forecast.

Comment [A16]: No actual production forecasts, 

since they depend on market economics driven by a 

combina'tion of the biodiesel tax subsidy, availability 

and price of imported sugarcane ethanol, availability 

and price of other domestic advanced biofuels. 

However, there is no need to forecast actual 

production for the purpsoes of this section. Rather, 

we are only establishing the possibility of volumes 

greater than 1.28 bill gal.
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Recently, the tax credit for biodiesel was reinstated after having expired at the end of 

201127. This tax credit, applicable retroactively to 2012 and through the end of 2013, may 

provide additional incentives to produce and consume biodiesel volumes in excess of the 1.28 

bill gal requirement. EPA is requesting comment on what effect the tax credit will have on the 

advanced biofuel production volumes and the whether this would affect the incentives to import 

sugarcane ethanol and to what extent. 

Nevertheless, there are a variety of factors that make the potential for 2013 biodiesel 

volumes in excess of 1.28 bill gal uncertain. For instance, despite the significant excess 

production capacity, the industry may not make the necessary preparations for excess production 

above 1.28 bill gal, such as restarting idled plants or establishing contracts for feedstocks supply, 

until such time as it becomes clear what the demand for excess biodiesel might be. This might 

not occur until later in 2013. Moreover, biodiesel production rates are currently and will 

continue to be at a historic high. The industry that supplies feedstocks for biodiesel production 

will be adjusting supplies and distribution routes to ensure that the 1.28 bill gal volume 

requirement is met, and biodiesel distribution and blending infrastructure is being upgraded to 

ensure that those volumes can be consumed. However, it is unclear if those adjustments and 

upgrades will be designed to accommodate biodiesel production in 2013 of volumes above 1.28 

bill gal. We request comment on the degree to which biodiesel volumes in excess of the 1.28 bill 

gal requirement might be expected.

2. Domestic Production of Other Advanced Biofuel 

Pathways that have been approved for the generation of RINs are provided in the 

regulations in Table 1 to §80.1426. Apart from ethanol made from sugarcane which is permitted 

to generate advanced biofuel RINs, there are currently three pathways through which advanced 

biofuel RINs can be generated. These three are shown in Table III.B.2-1.

 

27 "Congress Votes to Reinstate Biodiesel Tax Incentive," January 2, 2013. http://biodiesel.org/news/biodieselnews/news-display/2013/01/02/congress-votes-to-reinstate-biodiesel-tax-incentive

Deleted: will

Deleted: those affect may be

Deleted: 28

Comment [A17]: 1/22/2013 - Suggest taking 

comment on the recent report from Scott Irwin and 

Darrel Good (2013) Farmdocdaily report of Jan. 16, 

2013. 

http://farmdocdaily.illinois.edu/2013/01/domesticbiodiesel-versus-brazilian.html

Comment [A18]: Though it's fine to take 

comment on the effect of the tax credit generally, 

there's no need to take comment on this report. Our 

analysis of the availability of imported sugarcane 

ethanol rests on the assumption that biodiesel 

volumes will be 1.28 bill gal. Excess biodiesel 

volumes brought aboput by the tax credit would only 

reduce the need for imported sugarcane ethanol.
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Table III.B.2-1

Pathways for Advanced Biofuel

Fuel type Feedstock Production process 

requirements

Ethanol Grain Sorghum

Dry mill process, using only 

biogas from landfills, waste

treatment plants, and/or 

waste digesters for process 

energy and for on-site 

production of all electricity 

used at the site other than up 

to 0.15 kWh of electricity 

from the grid per gallon of 

ethanol produced, calculated 

on a per batch basis.

Biodiesel, 

renewable diesel29

Soy bean oil;

Oil from annual covercrops;

Algal oil;

Biogenic waste oils/fats/greases;

Non-food grade corn oil

One of the following:

Trans-Esterification

Hydrotreating

Includes only processes that 

co-process renewable 

biomass and petroleum

Ethanol, renewable 

diesel, jet fuel, 

heating oil, and 

naphtha

The non-cellulosic portions of 

separated food waste Any

Biogas Landfills30, sewage waste 

treatment plants, manure digesters Any

In addition to producers of biomass-based diesel and cellulosic biofuel, there are many 

companies either producing or developing technologies to produce "other advanced biofuels." In 

order to estimate the volumes of other advanced biofuels that could be produced by these 

companies in 2013, we investigated three sources of data:

Production Outlook Reports. Required under §80.1449 for all registered producers, these 

reports contain projections of renewable fuel production for each of the next five years.

31

2011 producers. Data from the EPA-Moderated Transaction System (EMTS) was 

reviewed to identify parties that produced some RIN-generating advanced biofuel in 

2011. Insofar as such parties did not provide a projected 2013 volume in a Production 

Outlook Report, they were contacted to update their 2013 projected production volume. 

We will update this analysis with information from 2012 for the final rule.

 

29 Our final action on the 2013 biomass-based diesel renewable fuel volume provides further details with regards to 

which feedstocks we believe will be used to meet that volume. See 77 FR 59458, September 27, 2012.

30 Biogas from landfills could be generated from separated food waste or yard waste.

31 While the individual reports have not been published since they include company-specific information that could 

impact the competitive nature of the industry, we are providing aggregate results in this NPRM.
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Additional registered producers. We identified parties that were registered as producers 

of advanced biofuel under the RFS program, but neither produced RIN-generating 

volume in 2011 nor provided a projection of 2013 production volume in a Production 

Outlook Report. We contacted such parties to determine what, if any, volume could be 

expected in 2013.

Based on these investigations, we identified twenty domestic companies that are expected to 

produce some other advanced biofuel in 2013. The total projected production volume for these 

companies in 2013 is about 115 mill actual gallons, or 150 million ethanol-equivalent gallons, as 

shown in Table III.B.2-2.

Table III.B.2-2

Projected Domestic Production of Other Advanced Biofuel in 2013

(million ethanol-equivalent gallons)

Ethanol

Renewable 

diesel Heating oil CNG Total

Production Outlook 

Reports

31 35 4 0 70

2011 producers 18 18 0 5 41

Other registered 

producers

0 15 15 9 39

Total 49 68 19 14 150

A projected volume of 150 mill ethanol-equivalent gallons of other advanced biofuel in 2013 is 

also consistent with a 2011 report released by E2/Environmental Entrepreneurs32 which 

estimated that the production capacity of domestic advanced biofuels in 2012 would be about 

180 mill gal.

EPA has recently approved an advanced ethanol pathway that is produced from grain 

sorghum at dry mill facilities using specified forms of biogas for both process energy and most 

electricity production33. Although advanced sorghum ethanol is not reflected in Table III.B.2-2, 

sorghum ethanol is likely to help meet the 2013 advanced biofuel volume requirements as a 

number of companies have been making preparations to use this feedstock. We are also 

currently investigating a variety of other potential RIN-generating pathways for advanced biofuel 

that could result in additional volumes in 2013. In addition to potential new pathways for 

cellulosic biofuel that would also count as advanced biofuel as discussed in Section II.D, new 

pathways for advanced biofuel could include certain butanol processes from corn and certain 

ethanol processes from barley. We have not yet determined, either through rulemaking or 

approval of an industry petition, whether these pathways are valid for the generation for 

advanced biofuel RINs. However, approval of such advanced biofuel pathways could potentially 

result in 200 million additional ethanol-equivalent gallons of advanced biofuel being qualified to 

 

32 Solecki, Mary et al, "Advanced Biofuel Market Report 2011, Meeting the California LCFS" August 22, 2011. 

E2/Environmental Entrepreneurs.

33 See 77 FR 74592 published on December 17, 2012.
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participate in the RFS program. Insofar as any of these pathways are approved in time to be used 

in 2013, it would increase the volume of domestically-produced advanced biofuels available for 

2013 compliance.

3. Imported Sugarcane Ethanol 

EPA estimates that if biodiesel production in 2013 does not exceed 1.28 bill gallons, and 

domestic production of other advanced biofuels is about 150 mill gallons, imports of sugarcane 

ethanol from Brazil would need to reach 666 mill gal in order for the 2.75 bill gal advanced 

biofuel requirement to be met. We believe that such volumes can be reasonably expected from 

Brazil despite some uncertainty in production and export potential.

From the supply perspective, recent production of sugarcane in Brazil has been lower 

than normally expected due to two factors. First, adverse weather conditions have reduced 

production.34 Since the adverse weather conditions are estimated to have reduced cane 

production by about 4%, a return to normal weather conditions should alone restore 

approximately 4% of production. Second, the general economic downturn made credit harder to 

get, delaying the replanting of existing fields. Normally sugarcane fields are replanted every five 

or six years to maximize yield. However, the lack of available credit caused some growers to 

delay the expense of this replanting, with the older fields losing production.35 

Early 2012/13 sugarcane crop year data suggests that, at the very least, production in the 

2012/2013 year will not be lower than in 2011/2012. According to UNICA’s December 1, 2012 

biweekly report of sugar and ethanol production, total ethanol production from the 2012/13 crop 

in the South Central region was approximately 5.38 billion gallons, up slightly from 5.36 billion 

gallons this time last year.36 In September, UNICA projected that the South Central region, the 

dominant region for ethanol production in Brazil, will produce a total of 5.56 billion gallons for 

the 2012/13 year.37 Other regions contributed roughly another 565 million gallons in 2011/12. 

Based on this, 6.1 billion gallons is a reasonable conservative estimate for total 2012/13 

production, assuming no growth at all in production outside the South Central region. By 

comparison, total ethanol production from the 2011/12 crop was just less than 6 billion gallons.

Some parties expect a more typical trend in sugarcane ethanol production for 2013 and 

future years, with replanted fields beginning to boost sugarcane production in existing 

plantations and, in response to increased worldwide demand, a growth in the acres planted with 

 

34 Gain Report BR110016, October 3, 2011, USDA Agricultural Service. See 

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Sugar%20Semiannual_Sao%20Paulo%20ATO_Brazil_10-3-2011.pdf 

35 On the margin, the high sugar prices may have also encouraged some growers to divert their crop from ethanol 

production to sugar production. But most cane growers do not have this flexibility with sugarcane mills designed 

for fixed amounts of refined sugar or ethanol so high sugar prices was likely a contributing factor but not a major 

cause of reduced sugarcane ethanol production in Brazil.

36 UNICA, “Harvest update: Biweekly Bulletin”, December 1, 2012, 

http://www.unicadata.com.br/listagem.php?idMn=63. 

37 UNICA, “Estimate for 2012/2013 Sugarcane Harvest of Brazilian South-Central Region”, September 20, 2012, 

http://www.unicadata.com.br/listagem.php?idMn=39.

Comment [A19]: 1/22/2013 – Does the CA 

LCFS mandate have any effect on the federal 

program? If yes, suggest discussing the volumes that 

will be needed and how much has been imported for 

CA’s program? Would it be accurate to say: 

“California LCFS mandates will also encourage the 

importation of Brazilian ethanol”?

If no, please explain response in comment bubble.

Comment [A20]: CARB has been very reticent 

to provide estimates of how much sugarcane ethanol 

will be imported to meet their LCFS requirements, 

and we have no independent estimates. However, I 

added some general text about the LCFS a few 

paragraphs down.
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sugarcane. Increased production is supported by the Brazilian government which announced in 

February 2012 support for a plan to invest over $8 billion annually to boost cane and ethanol 

production.38 Private investment in Brazil is also increasing. For example, Usina de Acucar 

Santa Terezinha, a Brazilian ethanol producer, recently announced plans to invest almost $300 

million in a new mill and sugarcane plantation.39 All of this suggests that sugarcane and ethanol 

production in the 2013/14 harvest year (which will begin in April of 2013) will be significantly 

higher than production over the last two years.

Nevertheless, there remains some uncertainty in the volumes of sugarcane ethanol that 

could be produced in Brazil in 2013. If weather conditions are unfavorable for another year, 

ethanol production may not recover from the comparatively low levels in 2011 and early 2012. 

A study from USDA projects that this may be the case, and concludes that total ethanol exports 

from Brazil to all countries in 2013 may only reach about 500 mill gallons40, well short of the 

666 mill gal that would be needed as described above. As a result, it is possible that there could 

be a shortfall of the total advanced biofuel requirement in 2013 under these circumstances.

Brazil’s sugarcane ethanol production serves both its domestic market as well as the 

export market. The government of Brazil sets a minimum ethanol concentration for its gasoline. 

In 2011, the Brazilian government lowered this concentration to 20%, reflecting the decrease in 

domestic production. There have been indications that Brazil may raise the minimum ethanol 

concentration back up by 25% by May of 201341, but no formal announcement has been made. 

Projecting this Brazilian domestic demand into the future can be uncertain since the government 

can reset the minimum ethanol content at any time; in the past this adjustment has largely been 

influenced by the price of ethanol (high prices leading to a reduction in the minimum percent). 

While these historical changes have typically varied by a few percent and have only occurred 

periodically, they do add another element of uncertainty to any projection of the volumes of 

ethanol that may be available for export to the U.S. in 2013. 

Total exports of ethanol from Brazil depend on ethanol production and demand within 

Brazil, and have varied significantly over the last decade. The historical maximum occurred in 

2008 when 1.35 bill gal was exported, and ongoing efforts to upgrade distribution infrastructure 

mean that Brazil is capable of exporting around 2 bill gal today. However, actual export 

volumes in 2010 - 2012 have been significantly below those from previous years. Moreover, 

imports of ethanol into Brazil also impact the volumes it exports. In both 2011 and 2012 there 

was significant two-way trade in ethanol between the United States and Brazil. According to 

current EIA data, in 2011 the U.S. imported 101 million gallons of sugarcane ethanol from Brazil 

and exported 396 million gallons of corn-based ethanol to Brazil. Total fuel ethanol exports in 

2011 were 1.2 billion gallons, and total exports through October 2012 were 646 million gallons. 

This two-way trade of ethanol engenders additional transport related emissions.

 

38 See http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8987702

39 See http://www.bloomberg.com/news/2012-03-08/santa-terezinha-invests-283-million-in-brazil-ethanolprojects.html

40 USDA Foreign Agricultural Service, "Brazil Biofuels Annual, Annual Report 2012," August 21, 2012. GAIN 

Report Number BR12013.

41 Bloomberg, "Brazil Said to Plan Higher Ethanol Blend as Early as May," December 18, 2012. 

http://www.bloomberg.com/news/2012-12-18/brazil-said-to-plan-higher-ethanol-blend-as-early-as-may.html
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Figure III.B.2-1

Total Worldwide Exports of Ethanol from Brazil

Sources: USDA Foreign Agricultural Service, "Brazil Biofuels Annual, Annual Report 2012", August 21, 2012, 

BR12013. Constanza Valdez, "Brazil's Ethanol Industry: Looking Forward", BIO-02, ERS, USDA, June 2011

Aside from production capability and domestic demand within Brazil, market conditions 

generally determine the availability of sugarcane ethanol imported into the U.S. from Brazil. 

Approved as an advanced biofuel pathway, ethanol produced from sugarcane benefits from the 

RIN value associated with advanced biofuel but also has to compete with other sources of 

ethanol used for blending with gasoline in the U.S., most notably ethanol made from corn starch 

(which does not qualify as an advanced biofuel). The expiration of the tariff applicable to 

imported ethanol has helped make imported sugarcane ethanol more cost competitive in the U.S.,

and any volumes of Brazilian sugarcane ethanol imported into California to meet the 

requirements of their Low Carbon Fuel Standard (LCFS) would also count towards meeting the 

requirements of the RFS program. However, international demand for Brazilian sugarcane 

ethanol is expected to continue to create some limitations in what volumes may be available to 

the U.S. Indeed in 2010 essentially all ethanol exported from Brazil went to other countries, and 

in 2011 about 70% of ethanol exported from Brazil went to other countries. As a result, imports 

of Brazilian sugarcane ethanol into the U.S. in 2010 and 2011 were comparatively low. Brazil is 

on track to meet the need for about 500 mill gal of imported sugarcane ethanol in the U.S. in 

2012, but this is below the 666 mill gal that may be needed in 2013 to meet the 2.75 bill gal 

advanced biofuel requirement. However, since the rate of ethanol imports from Brazil was 

significantly higher in recent months than at the beginning of 2012, there may be good reason to 

expect that import volumes in 2013 will be higher than in 2012.

0

200

400

600

800

1,000

1,200

1,400

1,600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Exported ethanol (mill gal)

2013 demand if biodiesel 

production is 1.28 bill gal

Deleted: but 
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Figure III.B.2-2

Total Imports of Ethanol Into the U.S.

Source: EIA, "U.S. Imports by Country of Origin"

Considering that reinvestment in sugarcane stock is already underway, a considerable 

resurgence in Brazilian ethanol export potential in the 2013 calendar year seems likely. Any 

limitations on ethanol exports created by delayed reinvestment in sugarcane stock appear to be 

waning. While uncertainties exist, on balance there is good reason to believe that Brazil can 

export at least 666 mill gal of ethanol to the U.S. in 2013.

C. Proposed Volume Requirements for Advanced Biofuel and Total Renewable Fuel in 

2013 

As shown in Table III.B-2, in order for an advanced biofuel requirement of 2.75 bill gal 

to be met, there would need to be 816 mill gal of advanced biofuels in addition to the volumes 

that would need to be produced to meet the biomass-based diesel and proposed cellulosic biofuel 

requirements. After reviewing the projected availability of advanced biofuel volumes from 

various sources, we have preliminarily determined that it is likely that there will be sufficient 

volumes available to produce or import this 816 mill gal. Given our estimate of about 150 mill 

gal of domestic "other" advanced biofuel, the remaining volume of 666 mill gal would likely 

need to come from imported sugarcane ethanol and/or biodiesel in excess of 1.28 bill gal. As 

discussed above, we believe that this volume is achievable through a combination of these 

sources. Therefore, we believe that there is no reason to reduce the required volume of 2.75 bill 

gal advanced biofuel on the basis of available volumes. As noted above, maintaining the 2.75 

bill gal advanced biofuel volume set forth in the statute will result in the reduced GHG emissions 

from the transportation sector and could also contribute to energy security objectives. We do not 

believe it is appropriate to forgo such benefits when they are physically achievable but we invite 

comment on this issue, particularly in the context of increasing international trade in biofuels and 

the blend wall implications for ethanol consumption (see discussion in Section D below). 

0

100

200

300

400

500

600

700

800

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Imported ethanol (mill gal)

From other countries

From Brazil

2013 demand if biodiesel 

production is 1.28 bill gal

Deleted: result in 

Deleted: that Congress envisioned in enacting this 

provision.

Deleted: The prospect of increasing sugarcane 

ethanol imports from South AmericaBrazil coupled 

with increasing exports of domestic conventional 

ethanol may not result in the energy security nor 

GHG benefits envisioned in EISA. 

Comment [A21]: 1/22/2013 – Similar to 

comment A11, request EPA to provide further 

support for the energy security and GHG benefits 

statement. Or, solicit further information or data to 

support the statement.

Other suggestions provided on imports and domestic 

production.

Comment [A22]: Disagree with the edits. In the 

final RFS2 rule, we specifically analyzed the energy 

security benefits of importing biofuels from other 

countries, and found that there are benefits. See 75 

FR 14840-14841. 

“As the U.S. relies

more heavily on biofuels, such as corn based

ethanol, there could be adverse

consequences from a supply-disruption

perspective associated with, for

example, a long-term drought.

Alternatively, a supply disruption of

petroleum will more likely be caused by

geopolitical factors rather than extreme

weather conditions. Hence, the causal

factors of a supply-disruption from

imported petroleum and, alternatively,

biofuels, are likely to be unrelated.

Thus, diversifying the sources of U.S.

transportation fuel is expected to

provide energy security benefits. Biofuel

supply disruptions are represented

based on the historical volatility of

yields for biofuel feedstocks or similar

crops. The ORNL estimates this

macroeconomic/disruption component

of the energy security benefit (oil market

and biofuel market impacts combined)

is $6.56/barrel (2007$) for the year 2022,

as shown in Table VIII.B.2–1.”

Deleted: these

Deleted: .

Comment [A23]: 1/24/2013 – Some suggested 

edits.
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Nevertheless, we recognize that some uncertainty exists in the projected availability of 

other advanced biofuels. The single largest source, Brazilian sugarcane ethanol, was exported at 

lower total volumes in 2010 - 2012 than the U.S. would need in 2013 to meet the 2.75 bill gal 

advanced biofuel requirement. Moreover, the need for 666 mill gal of Brazilian sugar ethanol in 

2013 exceeds all historical volumes of ethanol imported into the U.S. from Brazil by a 

substantial margin. There may be enough uncertainty to warrant a more cautious approach to 

advanced biofuel and total renewable fuel in 2013, for example a reduction of 200 mill gal to 

approximate the uncertainty discussed above. Therefore, while we are not proposing to reduce 

the required volumes of advanced biofuel and total renewable fuel for 2013, we request comment 

on whether and to what extent a reduction is warranted; we have the discretion to reduce the 

advanced biofuel volume requirement for 2013 by up to the amount that the cellulosic biofuel 

volume requirement is reduced (986 mill gal in today's proposal). Were we to do so, as 

discussed in Section III.A, we would also simultaneously reduce the total renewable fuel 

requirement by the same amount.

The overall cost impact of reducing the advanced biofuel and total renewable fuel volume 

mandates would depend on a number of factors, such as the future cost of petroleum, 2012/2013 

crop production, the number of additional advanced biofuel pathways that are approved over the 

next year, and the time it would take for facilities using new advanced pathways to begin 

generating RINs.

In 2014, the advanced biofuel requirement rises substantially to 3.75 bill gal. Thus 

regardless of whether we reduce the advanced biofuel and total renewable fuel volume 

requirements for 2013, we also seek comment on whether such a reduction should be considered 

for 2014, the basis for such a reduction, and the amount of that reduction.

D. Consideration of the Ethanol Blendwall

As the volume requirements of the RFS program increase, it becomes more likely that the 

volume of ethanol that must be consumed to meet those requirements will exceed the volume 

that can be consumed as E10. Additional volumes of ethanol must then be consumed as higher 

blend levels such as E15 or E85. While other non-ethanol biofuels can also be used to meet the 

RFS requirements, ethanol has predominated and will likely continue to predominate in the near 

future. As a result, some stakeholders have indicated that the volume of ethanol that can be 

legally and practically consumed in 2013 is a limiting factor in how much renewable biofuel can 

be consumed. 

In the context of the analyses conducted to support the decision regarding requests for a 

waiver of the renewable fuel standard, we estimated that the number of excess RINs generated in 

2012 that could be carried over to 2013 will be on the order of 2.6 billion.42 Since this number of 

carryover RINs falls below the rollover cap imposed by §80.1427(a)(5), all of them can be used 

for compliance purposes in 2013. As a result, we expect that the RFS demand for physical 

gallons of ethanol will be significantly less than the E10 saturation point (the blendwall), and 

 

42 77 FR 70759
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thus there would be no dependence on significant volumes of E15 - E85 in 2013. This remains 

the case regardless of whether EPA were to reduce the advanced biofuel and total renewable fuel 

volume requirements as described in Section III.C above. Nevertheless, we request comment on 

whether the blendwall presents any difficulty in terms of compliance with the RFS volume 

requirements in 2013.

In 2014, the situation could be different. There are a number of factors that will play a 

role in determining how regulated parties will demonstrate compliance with the applicable RFS 

volumes. First, the advanced biofuel and total renewable fuel requirements rise substantially to 

3.75 bill gal and 18.15 bill gal respectively. This increase in volume, combined with the cornethanol volume expected to meet the total renewable fuel standard, could cause the total ethanol 

volume used to comply with the RFS program to be higher than 16 bill gal. While non-ethanol 

biofuels are also anticipated to continue to grow to help supply the advanced biofuel standard, 

this value gives some estimate of the amount of ethanol that might need to be used to comply 

with the RFS program in 2014. Second, the number of carryover RINs will also be a critical 

factor in determining whether obligated parties can acquire sufficient RINs to show compliance 

with the RFS volume requirements. However, the number of carryover RINs into 2014 will 

almost certainly be lower than for 2013. EPA will continue to engage with stakeholders on this 

issue as we project the RFS volume requirements for 2014.
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IV. Proposed Percentage Standards for 2013

A. Background 

The renewable fuel standards are expressed as volume percentages and are used by each 

refiner, blender, or importer to determine their renewable volume obligations (RVO). Since there 

are four separate standards under the RFS2 program, there are likewise four separate RVOs 

applicable to each obligated party. Each standard applies to the sum of all gasoline and diesel 

produced or imported. The applicable percentage standards are set so that if every obligated party 

meets the percentages, then the amount of renewable fuel, cellulosic biofuel, biomass-based diesel, 

and advanced biofuel used will meet the volumes required on a nationwide basis. 

As discussed in Section II.D, we are proposing a required volume of cellulosic biofuel for 

2013 of 11 million gallons (14 million ethanol-equivalent gallons). The volume we select for the 

final rule will be used as the basis for setting the percentage standard for cellulosic biofuel for 

2013. We are also proposing that the advanced biofuel and total renewable fuel volumes would 

not be reduced below the applicable volumes specified in the statute. The biomass-based diesel 

volume for 2013 has been established at 1.28 billion gallons through a separate rulemaking. The 

volumes used to determine the four proposed percentage standards are shown in Table IV.A-1. 

Table IV.A-1

Proposed Volumes for Use in Setting the Applicable Percentage Standards for 2013a

Cellulosic biofuel 14 mill gal

Biomass-based diesel 1.28 bill gal

Advanced biofuel 2.75 bill gal

Renewable fuel 16.55 bill gal

a Due to the manner in which the percentage standards are 

calculated, all volumes are given in terms of ethanolequivalent except for biomass-based diesel which is given 

in terms of physical volume

As with previous years’ renewable fuels standards determination, the formulas used in 

deriving the annual standards are based in part on estimates of the volumes of gasoline and diesel 

fuel, for both highway and nonroad uses, that are projected to be used in the year in which the 

standards will apply. Producers of other transportation fuels, such as natural gas, propane, and 

electricity from fossil fuels, are not subject to the standards, and volumes of such fuels are not 

used in calculating the annual standards. Since the standards apply to producers and importers of 

gasoline and diesel, these are the transportation fuels used to set the standards, and then again to 

determine the annual volume obligations of an individual gasoline or diesel producer or importer.

B. Calculation of Standards

1. How Are the Standards Calculated?

The following formulas are used to calculate the four percentage standards applicable to 

producers and importers of gasoline and diesel (see §80.1405): 
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(Gi RGi) (GSi RGSi) GEi (Di RDi) (DSi RDSi) DEi

RFV Std 100%CB,i

CB,i

(Gi RGi) (GSi RGSi) GEi (Di RDi) (DSi RDSi) DEi

RFV 1.5

Std 100%

BBD,i 

BBD,i

(Gi RGi) (GSi RGSi) GEi (Di RDi) (DSi RDSi) DEi

RFV Std 100%AB,i

AB,i

(Gi RGi) (GSi RGSi) GEi (Di RDi) (DSi RDSi) DEi

RFV Std 100%RF,i

RF,i

Where

StdCB,i = The cellulosic biofuel standard for year i, in percent.

StdBBD,i = The biomass-based diesel standard (ethanol-equivalent basis) for year i, in percent.

StdAB,i = The advanced biofuel standard for year i, in percent.

StdRF,i = The renewable fuel standard for year i, in percent.

RFVCB,i = Annual volume of cellulosic biofuel required by section 211(o) of the Clean Air 

Act for year i, in gallons.

RFVBBD,i = Annual volume of biomass-based diesel required by section 211(o) of the Clean 

Air Act for year i, in gallons.

RFVAB,i = Annual volume of advanced biofuel required by section 211(o) of the Clean Air 

Act for year i, in gallons.

RFVRF,i = Annual volume of renewable fuel required by section 211(o) of the Clean Air Act 

for year i, in gallons.

Gi = Amount of gasoline projected to be used in the 48 contiguous states and Hawaii, in 

year i, in gallons. 

Di = Amount of diesel projected to be used in the 48 contiguous states and Hawaii, in 

year i, in gallons.

RGi = Amount of renewable fuel blended into gasoline that is projected to be consumed 

in the 48 contiguous states and Hawaii, in year i, in gallons.
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RDi = Amount of renewable fuel blended into diesel that is projected to be consumed in 

the 48 contiguous states and Hawaii, in year i, in gallons.

GSi = Amount of gasoline projected to be used in Alaska or a U.S. territory in year i if 

the state or territory opts-in, in gallons.

RGSi = Amount of renewable fuel blended into gasoline that is projected to be consumed 

in Alaska or a U.S. territory in year i if the state or territory opts-in, in gallons.

DSi = Amount of diesel projected to be used in Alaska or a U.S. territory in year i if the 

state or territory opts-in, in gallons.

RDSi = Amount of renewable fuel blended into diesel that is projected to be consumed in 

Alaska or a U.S. territory in year i if the state or territory opts-in, in gallons.

GEi = Amount of gasoline projected to be produced by exempt small refineries and 

small refiners in year i, in gallons, in any year they are exempt per §§80.1441 and 

80.1442, respectively. For 2013, this value is zero. See further discussion in 

Section IV.B.2 below.

DEi = Amount of diesel projected to be produced by exempt small refineries and small 

refiners in year i, in gallons, in any year they are exempt per §§80.1441 and 

80.1442, respectively. For 2013, this value is zero. See further discussion in 

Section IV.B.2 below.

The Act requires EPA to base the standards on an EIA estimate of the amount of gasoline 

and diesel that will be sold or introduced into commerce for that year. The four separate 

renewable fuel standards for 2013 are based on the gasoline, ethanol, diesel, and biodiesel

consumption volumes projected by EIA.

43

 We adjusted these nationwide values to represent the 

49 states that participate in the RFS program (neither Alaska nor any U.S. territory participates).

 

43 Letter, Adam Sieminski, Administrator, U.S. Energy Information Administration, to Lisa P. Jackson, 

Administrator, U.S. EPA, October 18, 2012.
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2. Small Refineries and Small Refiners

In CAA section 211(o)(9), enacted as part of the Energy Policy Act of 2005, Congress 

provided a temporary exemption to small refineries (those refineries with a crude throughput of 

no more than 75,000 barrels of crude per day) through December 31, 2010. In our initial 

rulemaking to implement the new RFS program44, we exercised our discretion under section 

211(o)(3)(B) and extended this temporary exemption to the few remaining small refiners that 

met the Small Business Administration’s (SBA) definition of a small business (1,500 employees 

or less company-wide) but did not meet the statutory small refinery definition as noted above. 

40 CFR §§ 80.1141, 80.1142. Because EISA did not alter the small refinery exemption in any 

way, the RFS2 program regulations maintained the exemptions for gasoline and diesel produced 

by small refineries and small refiners through 2010 (unless the exemption was waived). See 40 

CFR §§ 80.1441, 80.1442. 

Congress provided two ways that small refineries can receive a temporary extension of 

the exemption beyond 2010. One is based on the results of a study conducted by the Department 

of Energy (DOE) to determine whether small refineries would face a disproportionate economic 

hardship under the RFS program. The other is based on EPA determination of disproportionate 

economic hardship on a case-by-case basis in response to refiner petitions

In January 2009, DOE issued a study which did not find that small refineries would face 

a disproportionate economic hardship under the RFS program.45 The conclusions were based in 

part on the expected robust availability of RINs and EPA’s ability to grant relief on a case-bycase basis. As a result, beginning in 2011 small refiners and small refineries were required to 

participate in the RFS program as obligated parties, and there was no small refiner/refinery 

volume adjustment to the 2011 standards as there was for the 2010 standards. 

Following the release of DOE's 2009 small refinery study, Congress directed DOE to 

complete a reassessment and issue a revised report. In March of 2011 DOE re-evaluated the

impacts of the RFS program on small entities and concluded that some small refineries would 

suffer a disproportionate hardship.46 As a result, EPA exempted these refineries from being 

obligated parties for two additional years, 2011 and 2012.47 The 2012 standards established in 

the January 9, 2012, final rulemaking reflected the exemption of these refineries. We are seeking 

comment on whether it would be appropriate to extend the two year exemption for small 

refineries as discussed in section 211 (o)(9)(A)(ii)(II). 

EPA may also extend the exemption for individual small refineries or small refiners on a 

case-by-case basis if they demonstrate disproportionate economic hardship. 40 CFR §§ 

80.1441(e)(2), 80.1442(h). EPA has granted some exemptions pursuant to this process that 

apply in 2011 and 2012. However, at this time, no exemptions have been approved for 2013. 

 

44 72 FR 23900, May 1, 2007.

45 DOE report “EPACT 2005 Section 1501 Small Refineries Exemption Study”, (January, 2009). 

46 "Small Refinery Exemption Study: An Investigation into Disproportionate Economic Hardship," U.S. Department 

of Energy, March 2011.

47 Since the standards are applied on an annual basis, the exemptions are likewise on an annual basis even though the 

determination of which refineries would receive an extension to their exemption did not occur until after January 1, 

2011.

Deleted: an

Deleted: . We approved a numberencourage any 

producers of extensions to gasoline and/or diesel 

who believe that they may be eligible under the 

small refinery exemption forprovision to send a 

petition to the EPA under the provisions of §80.1441 

or §80.1442.¶

Moved (insertion) [1]

Comment [A24]: 1/24/2013 – Suggest leaving 

the request for comment in this paragraph as it 

makes it clear that the comment is concerning the 

extension of the exemptions based on the DOE 

study. Putting this sentence at the beginning of the 

last paragraph in this section makes it seem as if 

EPA is taking comment on whether all exemptions 

should be provided or not. 

Deleted: 

Deleted: We are seeking comment on whether it 

would be appropriate to extend the two year 

exemption for small refineries as discussed in section 

211 (o)(9)(A)(ii)(II). ¶

Comment [A25]: 1/24/2013
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Therefore, for this proposal we have calculated the proposed 2013 standards without a small 

refinery/small refiner adjustment.

Note that if exemptions under section 211 (o)(9)(A)(ii)(ll) were granted before finalizing 

the standards, or if an individual small refinery or small refiner requests an exemption under 

section 211(o)(9)(B) and is approved following the release of this NPRM and prior to issuance of 

the final rule, the final standards will be adjusted to account for the exempted volumes of 

gasoline and diesel. Any requests for exemptions that are approved after the release of the final 

2013 RFS standards will not affect the 2013 standards. As stated in the final rule establishing the 

2011 standards, “EPA believes the Act is best interpreted to require issuance of a single annual 

standard in November that is applicable in the following calendar year, thereby providing 

advance notice and certainty to obligated parties regarding their regulatory requirements. 

Periodic revisions to the standards to reflect waivers issued to small refineries or refiners would 

be inconsistent with the statutory text, and would introduce an undesirable level of uncertainty 

for obligated parties.” Thus, after the 2013 standards are finalized, any additional exemptions 

for small refineries or small refiners that are issued will not affect those 2013 standards. EPA 

requests comment on whether it is appropriate for the agency to make changes to the 2013 

volumes if small refiner exemptions are granted after the final rule is issued.

We encourage any producers of gasoline and/or diesel who believe that they may be 

eligible under the small refinery or small refiner exemption provision to send a petition to the 

EPA under the provisions of §80.1441 or §80.1442. We believe that the approach EPA is 

currently using to assess disproportionate economic hardships for small refineries and small 

refiners appropriately addresses the intent of the statutory provision and the needs of the affected 

parties.

3. Proposed Standards

As specified in the March 26, 2010 RFS2 final rule48, the percentage standards are based 

on energy-equivalent gallons of renewable fuel, with the cellulosic biofuel, advanced biofuel, 

and total renewable fuel standards based on ethanol equivalence and the biomass-based diesel 

standard based on biodiesel equivalence. However, all RIN generation is based on ethanolequivalence. More specifically, the RFS2 regulations provide that production or import of a 

gallon of qualifying biodiesel will lead to the generation of 1.5 RINs. In order to ensure that 

demand for 1.28 billion physical gallons of biomass-based diesel will be created in 2013, the 

calculation of the biomass-based diesel standard provides that the required volume be multiplied 

by 1.5. The net result is a biomass-based diesel gallon being worth 1.0 gallon toward the 

biomass-based diesel standard, but worth 1.5 gallons toward the other standards.

The levels of the percentage standards would be reduced if Alaska or a U.S. territory 

chooses to participate in the RFS2 program, as gasoline and diesel produced in or imported into 

that state or territory would then be subject to the standard. Neither Alaska nor any U.S. territory 

has chosen to participate in the RFS2 program at this time, and thus the value of the related terms 

in the calculation of the standards is zero.

 

48 75 FR 14716, March 26, 2010.

Deleted: As a result

Moved up [1]: We are seeking comment on 

whether it would be appropriate to extend the two 

year exemption for small refineries as discussed in 

section 211 (o)(9)(A)(ii)(II). 

Formatted: Highlight

Deleted: such 

Formatted: Highlight

Formatted: Highlight

Comment [A26]: 1/24/2013 – Suggest maintain 

these sentences. This was part of the original 

language that EPA had submitted and makes clear 

that once the final rule is issued that EPA does not 

change the volume/obligations. The last sentence 

was an add as in the 2011 volumes rule, commenters 

complained that EPA did not make this clear and that 

EPA did not take comment on this. 

Deleted: This adjustment would add a 

proportionate increase in volume and cost to all other 

obligated parties. 

Formatted: Highlight

Formatted: Indent: First line: 0.5"

Comment [A27]: 1/24/2013 – Commenter 

suggests that EPA should focus on the statutory 

provisions which ask whether small refiners 

experience a disproportionate2011 volumes rule, 

commenters complained that EPA did not make this 

clear and that EPA did not take comment on this. in 

teh f t affected as opposed to the effects on other 

obligated parties. 

Formatted: Highlight

Formatted: Highlight

Formatted: Highlight

Deleted: However, if an individual small refinery 

or small refiner requests an exemption and is 

approved following the release of this NPRM and 

prior to issuance of the final rule, the final standards 

will be adjusted to account for the exempted 

volumes of gasoline and diesel. We encourage any 

producers of gasoline and/or diesel who believe that 

they may be eligible under the small refinery 

exemption provision to send a petition to the EPA 

under the provisions of §80.1441 or §80.1442, the 

final standards will be adjusted to account for the 

exempted volumes of gasoline and diesel. Any 

requests for exemptions that are approved after the 

release of the final 2013 RFS standards will not 

affect the 2013 standards. As stated in the final rule 

establishing the 2011 standards, “EPA believes the 

Act is best interpreted to require issuance of a single 

annual standard in November that is applicable in the 

following calendar year, thereby providing advance 

notice and certainty to obligated parties regarding 

their regulatory requirements. Periodic revisions to 

the standards to reflect waivers issued to small 

refineries or refiners would be inconsistent with the 

statutory text, and would introduce an undesirable 

level of uncertainty for obligated parties.” Thus, 

after the 2013 standards are finalized, any additional 

...

Deleted: ¶
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Note that because the gasoline and diesel volumes estimated by EIA include renewable 

fuel use, we must subtract the total renewable fuel volumes from the total gasoline and diesel 

volumes to get total non-renewable gasoline and diesel volumes. The values of the variables 

described above are shown in Table IV.B.3-1.49 Terms not included in this table have a value of 

zero.

Table IV.B.3-1

Values for Terms in Calculation of the Standards (bill gal)

Term Value

RFVCB,2013 0.014

RFVBBD,2013 1.28

RFVAB,2013 2.75

RFVRF,2013 16.55

G2013 133.70

D2013 52.26

RG2013 12.85

RD2013 1.23

Using the volumes shown in Table IV.B.3-1, we have calculated the proposed percentage 

standards for 2013 as shown in Table IV.B.3-2.

Table IV.B.3-2

Proposed Percentage Standards for 2013

Cellulosic biofuel 0.008%

Biomass-based diesel 1.12%

Advanced biofuel 1.60%

Renewable fuel 9.63%

 

49 To determine the 49-state values for gasoline and diesel, the amounts of these fuels used in Alaska is subtracted 

from the totals provided by DOE. The Alaska fractions are determined from the most recent (2010) EIA State 

Energy Data, Transportation Sector Energy Consumption Estimates. The gasoline and transportation distillate fuel 

oil fractions are approximately 0.2% and 0.7%, respectively. Ethanol use in Alaska is estimated at 11.2% of its 

gasoline consumption (based on the same State data), and biodiesel use is assumed to be zero.
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V. Public Participation 

We request comment on all aspects of this proposal. This section describes how you can 

participate in this process.

A. How Do I Submit Comments?

We are opening a formal comment period by publishing this document. We will accept 

comments during the period indicated under the DATES section above. If you have an interest 

in the proposed standards, we encourage you to comment on any aspect of this rulemaking. We 

also request comment on specific topics identified throughout this proposal. 

Your comments will be most useful if you include appropriate and detailed supporting 

rationale, data, and analysis. Commenters are especially encouraged to provide specific 

suggestions for any changes that they believe need to be made. You should send all comments, 

except those containing proprietary information, to our Air Docket (see ADDRESSES section 

above) by the end of the comment period.

You may submit comments electronically, by mail, or through hand delivery/courier. To 

ensure proper receipt by EPA, identify the appropriate docket identification number in the 

subject line on the first page of your comment. Please ensure that your comments are submitted 

within the specified comment period. Comments received after the close of the comment period 

will be marked “late.” EPA is not required to consider these late comments. If you wish to 

submit Confidential Business Information (CBI) or information that is otherwise protected by 

statute, please follow the instructions in Section VI.B below.

B. How Should I Submit CBI to the Agency?

Do not submit information that you consider to be CBI electronically through the 

electronic public docket, www.regulations.gov, or by e-mail. Send or deliver information 

identified as CBI only to the following address: U.S. Environmental Protection Agency, 

Assessment and Standards Division, 2000 Traverwood Drive, Ann Arbor, MI, 48105, Attention 

Docket ID EPA-HQ-OAR-2012-0546. You may claim information that you submit to EPA as 

CBI by marking any part or all of that information as CBI (if you submit CBI on disk or CD 

ROM, mark the outside of the disk or CD ROM as CBI and then identify electronically within 

the disk or CD ROM the specific information that is CBI). Information so marked will not be 

disclosed except in accordance with procedures set forth in 40 CFR part 2.

In addition to one complete version of the comments that include any information 

claimed as CBI, a copy of the comments that does not contain the information claimed as CBI 

must be submitted for inclusion in the public docket. If you submit the copy that does not 

contain CBI on disk or CD ROM, mark the outside of the disk or CD ROM clearly that it does 

not contain CBI. Information not marked as CBI will be included in the public docket without 
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prior notice. If you have any questions about CBI or the procedures for claiming CBI, please 

consult the person identified in the FOR FURTHER INFORMATION CONTACT section.
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VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 

13563: Improving Regulation and Regulatory Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a 

"significant regulatory action” because it raises novel legal or policy issues arising out of legal 

mandates, the President’s priorities, or the principles set forth in the Executive Order. 

Accordingly, EPA submitted this action to the Office of Management and Budget (OMB) for 

review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any 

changes made in response to OMB recommendations have been documented in the docket for 

this action.

The economic impacts of the RFS2 program on regulated parties, including the impacts 

of the required volumes of renewable fuel, were already addressed in the RFS2 final rule 

promulgated on March 26, 2010 (75 FR 14670). With the exception of cellulosic biofuel, this 

action proposes the percentage standards applicable in 2013 based on the volumes that were 

analyzed in the RFS2 final rule.

B. Paperwork Reduction Act

This action does not impose an information collection burden under the provisions of the 

Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b). This 

proposed rule does not impose any additional reporting requirements on regulated parties beyond 

those already required under the RFS program; therefore, there will not be any additional 

reporting burdens on entities impacted by this regulation. This action merely proposes, as

required by section 211(o) of the Clean Air Act, the RFS annual standards for 2013.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a 

regulatory flexibility analysis of any rule subject to notice and comment rulemaking 

requirements under the Administrative Procedure Act or any other statute unless the agency 

certifies that the rule will not have a significant economic impact on a substantial number of 

small entities. Small entities include small businesses, small organizations, and small 

governmental jurisdictions.

For purposes of assessing the impacts of today's rule on small entities, small entity is 

defined as: (1) a small business as defined by the Small Business Administration’s (SBA)

regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a 

city, county, town, school district or special district with a population of less than 50,000; and (3) 

a small organization that is any not-for-profit enterprise which is independently owned and 

operated and is not dominant in its field.
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After considering the economic impacts of today’s proposed rule on small entities, we 

certify that this proposed action will not have a significant economic impact on a substantial 

number of small entities. This rule proposes the annual standard for cellulosic biofuel for 2013

at 14 mill gal. Since small refiners and small refineries collectively comprise about 11.9% of 

gasoline and 15.2% of diesel production50, for an average of 12.9% for the entire gasoline + 

diesel pool, small refiners and small refineries would only be required to collectively meet a 

cellulosic biofuel requirement of about 1.8 mill gal (14 x 12.9%). At a projected cellulosic 

biofuel waiver credit price of $0.42, the cost of complying with this requirement would total 

about $0.76 million for the approximately 60 obligated parties that would be affected, or about 

$12,600 per facility on average.

The impacts of the RFS2 program on small entities were already addressed in the RFS2 

final rule promulgated on March 26, 2010 (75 FR 14670), and this proposed rule will not impose 

any additional requirements on small entities. However, we continue to be interested in the 

potential impacts of the proposed rule on small entities and welcome comments on issues related 

to such impacts.

D. Unfunded Mandates Reform Act

This proposed action contains no Federal mandates under the provisions of Title II of the 

Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal 

governments or the private sector. This action implements mandate(s) specifically and explicitly 

set forth by the Congress in Clean Air Act section 211(o) without the exercise of any policy 

discretion by EPA. Therefore, this action is not subject to the requirements of sections 202 or 

205 of the UMRA.

This action is also not subject to the requirements of section 203 of UMRA because it 

contains no regulatory requirements that might significantly or uniquely affect small 

governments. This proposed rule only applies to gasoline, diesel, and renewable fuel producers, 

importers, distributors and marketers and merely proposes the 2013 annual standards for the RFS 

program.

E. Executive Order 13132: Federalism 

This action does not have federalism implications. It will not have substantial direct 

effects on the States, on the relationship between the national government and the States, or on 

the distribution of power and responsibilities among the various levels of government, as 

specified in Executive Order 13132. This action proposes the 2013 annual standards for the RFS 

program and only applies to gasoline, diesel, and renewable fuel producers, importers, 

distributors and marketers. Thus, Executive Order 13132 does not apply to this rule. 

 

50 Estimates from RFS2 final rule, 75 FR 14867.
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In the spirit of Executive Order 13132, and consistent with EPA policy to promote 

communications between EPA and State and local governments, EPA specifically solicits 

comment on this proposed rule from State and local officials.

F. Executive Order 13175: Consultation and Coordination with Indian Tribal 

Governments

This action does not have tribal implications, as specified in Executive Order 13175 (65 

FR 67249, November 9, 2000). This proposed rule will be implemented at the Federal level and 

affects transportation fuel refiners, blenders, marketers, distributors, importers, exporters, and 

renewable fuel producers and importers. Tribal governments would be affected only to the 

extent they purchase and use regulated fuels. Thus, Executive Order 13175 does not apply to 

this action.

EPA specifically solicits additional comment on this proposed action from tribal officials. 

G. Executive Order 13045: Protection of Children from Environmental Health Risks 

and Safety Risks

EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying only to those 

regulatory actions that concern health or safety risks, such that the analysis required under 

section 5-501 of the EO has the potential to influence the regulation. This action is not subject to 

EO 13045 because it does not establish an environmental standard intended to mitigate health or 

safety risks and because it implements specific standards established by Congress in statutes 

(section 211(o) of the Clean Air Act). 

H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect 

Energy Supply, Distribution, or Use

This action is not a “significant energy action” as defined in Executive Order 13211, 

“Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” 

(66 FR 28355 (May 22, 2001)) because it is not likely to have a significant adverse effect on the 

supply, distribution, or use of energy. This action simply proposes the annual standards for 

renewable fuel under the RFS program for 2013.

I. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 

(‘‘NTTAA’’), Public Law 104–113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary 

consensus standards in its regulatory activities unless to do so would be inconsistent with 

applicable law or otherwise impractical. Voluntary consensus standards are technical standards 

(e.g., materials specifications, test methods, sampling procedures, and business practices) that are 
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developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide 

Congress, through OMB, explanations when the Agency decides not to use available and 

applicable voluntary consensus standards.

This proposed rulemaking does not involve technical standards. Therefore, EPA is not 

considering the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in 

Minority Populations and Low-Income Populations

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive 

policy on environmental justice. Its main provision directs federal agencies, to the greatest 

extent practicable and permitted by law, to make environmental justice part of their mission by 

identifying and addressing, as appropriate, disproportionately high and adverse human health or 

environmental effects of their programs, policies, and activities on minority populations and lowincome populations in the United States. 

EPA has determined that this proposed rule will not have disproportionately high and 

adverse human health or environmental effects on minority or low-income populations because it 

does not affect the level of protection provided to human health or the environment. This action 

does not relax the control measures on sources regulated by the RFS regulations and therefore 

will not cause emissions increases from these sources.
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VII. Statutory Authority

Statutory authority for this action comes from section 211 of the Clean Air Act, 42 

U.S.C. 7545. Additional support for the procedural and compliance related aspects of today’s 

proposal, come from Sections 114, 208, and 301(a) of the Clean Air Act, 42 U.S.C. Sections 

7414, 7542, and 7601(a).

List of Subjects in 40 CFR Part 80

Administrative practice and procedure, Air pollution control, Diesel fuel, Environmental 

protection, Fuel additives, Gasoline, Imports, Oil imports, Petroleum.

Dated: 

Lisa P. Jackson,

Administrator.
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For the reasons set forth in the preamble, 40 CFR part 80 is amended as follows:

PART 80—REGULATION OF FUELS AND FUEL ADDITIVES

1. The authority citation for part 80 continues to read as follows:

Authority: 42 U.S.C. 7414, 7542, 7545, and 7601(a).

2. Section 80.1405 is amended by adding paragraph (a)(4) to read as follows:

§ 80.1405 What are the Renewable Fuel Standards?

(a) * * *

(4) Renewable Fuel Standards for 2013.

(i) The value of the cellulosic biofuel standard for 2013 shall be 0.008 percent.

(ii) The value of the biomass-based diesel standard for 2013 shall be 1.12 percent.

(iii) The value of the advanced biofuel standard for 2013 shall be 1.60 percent.

(iv) The value of the renewable fuel standard for 2013 shall be 9.63 percent.