November 26, 2012

The Honorable Lisa P. Jackson, Administrator

United States Environmental Protection Agency

1200 Pennsylvania Avenue, NW

Washington, DC 20460

Re: Request for Reconsideration of EPA’s Final Rulemaking “2013 Biomass-Based Diesel 

Renewable Fuel Volume” issued on September 27, 2012 (Docket ID No. EPA-HQ-OAR-2010-0133).

Dear Administrator Jackson:

The American Petroleum Institute (“API”) submits this petition for administrative reconsideration of the 

final rule entitled “Regulation of Fuels and Fuel Additives: 2013 Biomass-Based Diesel Renewable Fuel 

Volume” published at 77 Federal Register 59458 (September 27, 2012) pursuant to section 307(d)(7)(B) 

of the Clean Air Act, 42 U.S.C. § 7607(d)(7)(B). It was impractical for API to raise the objections detailed 

in this petition during the public comment period - because they became known after the period for 

public comment - and these objections are of central relevance to the outcome of the rule. 

API is a national trade association representing more than 500 companies involved in all aspects of the 

oil and natural gas industry, including those that are the obligated parties under the Renewable Fuel 

Standard (“RFS”). Our industry supports the use of biofuels including biodiesel, but our specific 

concerns with EPA’s determination of the 2013 biomass-based diesel standard merit reconsideration.

Section 211(o) of the Clean Air Act requires EPA to determine the applicable volume of biomass-based 

diesel to be used when setting annual percentage standards under the RFS. EPA proposed a 2013

requirement of 1.28 billion gallons on July 1, 2011. The proposal was part of a larger proposed 

rulemaking to establish the annual percentage standards under the RFS for 2012. EPA published its final 

rule for the 2012 annuals standards on January 9, 2012, but the agency failed to include the 2013 

biomass-based diesel standard.1 API commented on several aspects of the proposed rulemaking, 

including the proposed biomass based diesel standard, recommending that EPA retain the minimum 

statutory volume of 1.0 billion gallons.

In the thirteen months between closing of the public comment period and the issuance of a Final Rule

for the 2013 biomass-based diesel standard, significant events have taken place for the biodiesel market 

that could not have been raised in comments to the rule. At least three biomass-based diesel producers 

have been accused of fraudulently generating Renewable Identification Number (“RINs”) credits, which 

 

1

In violation of the clear requirement of Section 211(o)(2)(B)(ii) of the Clean Air Act, EPA failed to promulgate the 

2013 biomass-based diesel standard at least 14 months before the standard’s effective date.

Robert L. Greco, III

Group Director

Downstream & Industry Operations

1220 L Street, NW

Washington, DC 20005-4070

USA

Telephone 202-682-8167

Fax 202-682-8051

Email greco@api.org

www.api.org
Page 2

are used to demonstrate compliance with the standard. Some or all of the credits generated by these 

companies have been invalidated by EPA, totaling over 140 million RINs2. In addition, news reports 

indicate more violations relating to fraudulently generated RINs are likely to surface. 

The problems associated with RIN fraud have prompted EPA to develop a voluntary process to verify the 

authenticity of RINs generated by participating companies.3 API encourages EPA’s efforts to address the 

problem but API also believes that EPA should recognize that the invalid RIN problem casts doubt on the 

rationale for maintaining the proposed 1.28 billion gallon standard. The volume of RINs invalidated by 

EPA total approximately 12% of the 2011 RFS mandate for biomass-based diesel, or 5% of the combined 

biomass-based diesel mandates from 2009-2011. EPA relied on biodiesel producers’ estimates of 

production capacity, but those volumes appear to be inflated by the allegedly fraudulent market 

participants. Significant uncertainty continues to exist as to how many additional RINs have yet to be 

invalidated by EPA. News reports have informed the public that additional facilities have been raided by 

federal enforcement officials and lawsuits have been filed relating to RIN fraud, for which EPA has yet to 

announce additional invalid RIN violations.4These unknown volumes of additional RINs that are likely to 

be invalidated have not been addressed by the agency and could have an equally significant impact on 

the ability to meet the 1.28 billion gallon standard in 2013.

The RIN fraud scandal has significantly impacted the ability of some biodiesel producers to market their 

products, and in some cases, to remain in business.5 EPA acted aggressively in setting a 1.28 billion 

gallon standard, and any potential shortfall in production could dramatically impact EPA’s estimate of 

biomass-based diesel production in 2013, and industry’s ability to comply with the standard.

In conclusion, the fraudulent RIN scandal is having, and will continue to have, significant impacts on the 

biodiesel marketplace. This issue is exacerbated by the uncertainty of potential new violations resulting 

in additional invalid RINs. Because EPA failed to give this issue any consideration in the Final Rule, and 

API is asking the agency to reconsider the 1.28 billion gallon standard for biomass-based diesel in 2013. 

If you have any questions or concerns regarding these comments, please call me at (202) 682-8167.

Sincerely, 

Robert L. Greco, III

Group Director

Downstream and Industry Operations

 

2

http://www.epa.gov/enforcement/air/renewable-fuels/fuel-novs.html

3

http://www.epa.gov/otaq/fuels/renewablefuels/documents/420b12063.pdf

4

http://www.northjersey.com/news/153816845_FBI_raids_Park_Ridge_renewable_energy_company.html

 http://newsandinsight.thomsonreuters.com/New_York/News/2012/09_-

September/Trading_giant_Cargill_sues_over_alleged_biofuel_credit_fraud/

5

http://democrats.energycommerce.house.gov/sites/default/files/image_uploads/Sprague.Testimony.pdf