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Page **1** of **103 EO12866_New Fuel Pathways Rule under RFS2_2060**  **- AR07_FRM_FRN_201106**  **25**

**ENVIRONMENTAL PROTECTION AGENCY**

**40 CFR Part 80 [**  **EPA -**  **HQ -**  **OAR -**  **2011 -**  **0542; FRL -**  **9686 -**  **3 ]** 

**RIN 2060 -**  **AR07 Regulation of Fuels**  **and Fuel Additives: Identification of Additional Qualifying Renewable**

**Fuel Pathways under the Renewable Fuel Standard Program AGENCY:**  Environmental Protection Agency (EPA). **ACTION:** Final Rule. **SUMMARY:** EPA is issuing a final rule identifying additional fuel pathway s that EPA has determined meet the biomass - based diesel, advanced biofuel or cellulosic biofuel lifecy cle greenhouse gas (GHG) reduction requirements specified in Clean Air Act section 211(o), the Renewable Fuel Standard Program, as amended by the Energy

Independence and Security Act of 2007 (EI SA). This final rule describes EPA’s evaluation of biofuels produced from camelina oil, energy cane, giant reed, and napiergrass; it also includes an ev aluation of renewable gasoline and renewable gasoline blendstocks, as well as biodiesel from esterification, and clarifies our definition of renewable diesel. The inclusion of these pathway s creates additional opportunity and flexibility

for regulated par

ties to compl y with the advanced and cellulosic requirements of EI SA and provides the certainty necessary

for investments to bring these biofuels into commercial production from these new feedstocks. We are also finalizing two changes to Table 1 to § 80.1426 . The first change identifies*** E.O. 12866 Review

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Page **2** of **103** separate pathway s by

letter, to facilitate references to specific pathway s. The second change adds "rapeseed" to the existing pathway for renewable fuel made from canola oil. We are also correcting an inadvertent om ission to the proposal which incorrectl y omitted a pathway for producing naphtha from switchgrass and miscanthus; this pathway was included in the original RFS2 final rule. This final rule adds these pathway s to Table 1 to § 80.1426 as pathway s which hav e been determined to meet one or more of the GHG reduction thresholds specified in CAA 211(o), and assigns each pathway

a corresponding D - Code. Itallows producers or importers of fuel produced pursuant to these pathway s to generate Renewable Identificati on Numbers (RINs), providing that the fuel meets the other requirements specified in the RFS regulations to qualify it as renewable fuel. **DATES:** This rule is effective on [Insert date 60 day s from date of publication in the Federal Register ]. **FOR FURTHE R INFORMATION CONTACT:**  Vincent Camobreco , Office of Transportation and Air Quality ( MC6401A ), Environmental Protection Agency , 1200 Pennsylvania Ave., N.W., Washington, DC 20460 ; telephone number: (202) 564 - 9043 ; fax number: (202) 564 - 1686 ; email address: camobreco.vincent@epa.gov . **SUPPLEMENTARY INFORMATION** : **Does This Action Apply to Me?** Entities potentially

affected by

this action 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. Regulated categories and entities affected by this action include:*** E.O. 12866 Review

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Page **3** of **103** Category NAI CS 1

Codes SI C 2

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 S ys tem (NAI CS) 2 Standard Industrial Classification (SI C) s ys tem code. This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely

to be regulated b y this action. This table lists the ty pes of entities that EPA is now aware could be potentially regulated by

this action. Other ty

pes of entities not listed in the table could also be regulated. To determine whether your entity is regulated b y this action, yo u should carefully

examine the applicability criteria of Part 80, subparts D, E and F of title 40 of the Code of Federal Regulations. If you have any question regarding applicability of this action to a particular entity , consult the person in the preceding **FOR FURTHER INFORMATION CONTACT**  section above. **Outline of This Preamble***** E.O. 12866 Review

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Page **4** of **103** I. Id entification of Additional Qualifying Renewable Fuel Pathway s under the Renewable Fuel Standard (RFS) Program A. Summary

of Comments on Invasive Species B. Analy sis of Lifecycle Greenhouse Gas Emissions for Biodiesel, Renewable Diesel, Jet Fuel, Heating Oil, Naphtha, and Liquefied Petroleum Gas (LPG ) Produced from Camelina Oil C. Lifecycle Greenhouse Gas Emissions Analy sis for Ethanol, Diesel, Jet Fuel, Heating Oil, and Naphtha Produced from Energy Cane, Giant Reed, and Napiergrass D. Lifecycle Greenhouse Gas Emissions Analy sis for Certain Renewable Gaso line and Renewable Gasoline Blendstocks Pathway s E. Esterification Production Process Inclusion for Specified Feedstocks Producing Biodiesel II. Additional Changes to Listing of Available Pathway s in Table 1 of 80.1426 III. Statutory

and Executive Order Reviews A. Execut ive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory

Flexibility

Act D. Unfunded Mandates Reform Act E. Executive Order 13132 (Federalism) F. Executive Order 13175 ( Consultation and Coordination With Indian Tribal Governments) G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safet y Risks H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy

Suppl y, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and L ow - Income Populations K. Congressional Review Act IV . Statutory

Provisions and Legal Authori ty **I . Identification of Additional**  **Qualifying Renewable Fuel Pathways under**  **the Renewable Fuel Standard (RFS) Program**  This rule was originall y published in the Federal Register on January 5, 2012 as a direct final rule, with a parallel publication of a proposed rule. Although onl y a limited number of relevant adverse comments were received, EPA was required to issue a withdrawal notice of the direct final rule on March 5, 2012 . A second comment period was not issued, since the simultaneous publicati on of the proposed rule provided an adequate notice and comment process.*** E.O. 12866 Review

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Page **5** of **103** EPA has addressed the comments received in this final rule, although most of the anal ys is presented is similar to the information in the proposed rule. EPA is including all of the i nformation again in this document to avoid potential confusion raised b y the withdrawal process. In this action, E PA is issuing a final rule to identify in the RFS regulations additional renewable fuel production pathway s that we have determined meet the greenhouse gas (GHG) reduction requirements of the RFS program. There are three critical components of a renewable fuel pathway : (1) fuel t yp e, (2) feedstock, and (3) production process. Each specific combination of the three components, or fuel pathway , is assigned a D code . This final rule describes EPA’s evaluation of: **Camelina oil** (new feedstock)
 Biodiesel, and renewable diesel, (including jet fuel, and heating oil)

— qualifying to generate biomass - based diesel and advanced biofuel RINs
 Naphtha and liquefied petroleum gas (LPG)

— qualifying to generate advanced biofuel RINs **Energy cane , giant reed, and napiergrass cellulosic biomass**  (new feedstocks)
 Ethanol, renewable diesel (including renewable jet fuel and heating oil), and renewabl e gasoline blendstock

— qualifying to generate cellulosic biofuel RINs **Renewable gasoline and renewable gasoline blendstock** (new fuel t ypes)
 Produced from crop residue, slash, pre - commercial thinnings, tree residue, annual cover crops, and cellulosic compon ents of separated y ard waste, separated food waste, and separated municipal solid waste (MSW)
 Using the following processes

— all utilizing natural gas, biogas, and/or biomass as*** E.O. 12866 Review

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Page **6** of **103**

the only process energy

sources — qualifying to generate cellulosic biofuel RINs : o Thermochemical p yrol ys is o Thermochemical gasification o Biochemical direct fermentation o Biochemical fermentation with catal yt ic upgrading o Any other process that uses biogas and/or biomass as the only process energy sources **Esterification** (new production process)
 Process used to produce certain renewable fuels from soy bean oil, oil from annual covercrops, algal oil, biogenic waste oils/fats/greases, non - food grade corn oil, Canola/rapeseed oil, and camelina oil

– qualifying to generate bi omass - based diesel and advanced biofuel RINs This final rule adds these pathway s to Table 1 to § 80.1426 and assigns each pathway one or more D - Codes. This final rule allows producers or importers of fuel produced under these pathway s to generate Renewable Identification Numbers (RINs) in accordance with the RFS regulations, providing that the fuel m eets other definitional criteria for renewable fuel. The inclusion of these pathways creates additional opportunity and flexibility

for regulated parties to comply with the requirements of EI SA. Substantial investment has been made to commercialize these new feedstocks, and the cellulosic biofuel industry in the United States continues to make significant advances in its progress towards large scale commercial production. Approval of these new feedstocks will help further the Congressional intent to expan d the volumes of cellulosic and advanced biofuels. Determining whether a fuel pathway satisfies the CAA’s lifecy cle GHG reduction*** E.O. 12866 Review

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Page **7** of **103** thresholds for renewable fuels requires a comprehensive evaluation of the lifecycle GHG emissions of the renewable fuel as compared to the lifecycle GHG emissions of the baseline gasoline or diesel fuel that it replaces. As mandated by CAA section 211(o), the GHG emissions assessments must evaluate the aggregate quantity of GHG emissions (including direct emissions and significant indirect emissions such as significant emissions from land use changes) related to the full fuel lifecycle, including all stages of fuel and feedstock production, distribution, and use by the ultimate consumer. In examining the full lifecy cle GHG impac ts of renewable fuels for the RFS program, EPA considers the following:
 Feedstock production

– based on agricultural sector models that include direct and indirect impacts of feedstock production
 Fuel production

– including process energy requirements, impacts of an y raw materials used in the process, and benefits from co - products produced.
 Fuel and feedstock distribution

– including impacts of transporting feedstock from production to use, and transport of the final fuel to the consumer.
 Use of the fuel

– including combustion emissions from use of the fuel in a vehicle. Many of the pathway s evaluated in this rulemaking rely on a comparison to the lifecycle GHG anal ys is work that was done as part of the Renewable Fuel Standard Program (RFS2) Final Rule, pub lished March 26, 2010. The evaluations here rel y on comparisons to the existing anal ys is. EPA plans to periodicall y review and revise the methodology and assumptions associated with calculating the GHG emissions from all renewable fuel pathway s. **A. Sum**  **mary of Comments on Invasive Species** In response to the proposed rule, EPA received comments highlighting the concern that*** E.O. 12866 Review

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Page **8** of **103** by approving new feedstock ty pes under the RFS program, EPA would be encouraging their introduction or expanded planting without cons idering their potential impact as invasive species. 1 The degree of concern expressed b y the commenters depended somewhat on the feedstock. As pointed out by

the commenters, camelina and energy cane are not “native species”, defined as “a species that, other than as a result of an introduction, historically occurred or currently

occurs in that ecos ys tem.” The commenters asserted that there is a “potential risk posed by the non - native species camelina and energy cane.” In contrast, comments stated that Ar undo donax (giant reed) and napiergrass have been identified as invasive species in certain parts of the country . These commenters asserted that the Arundo donax and napiergrass pose a “clear risk of invasion.” Commenters stated that EPA should not appro ve the proposed feedstocks until EPA has conducted an invasive species analy sis, as required under Executive Order 13112. Executive Order 13112 2 , signed in February , 199 9, requires each Federal agenc y whose actions may affect the status of invasive species “ to the extent practicable and permitted by law :  identify such actions ;  subject to the availability of appropriations, and within Administration budgetary limits, use relevant programs and authorities to: (i) prevent the introduction of invasive species; (ii) detect and respond rapidly to and control populations of such specie s in a cost effective and environmentally sound manner; (iii) monitor invasive species populations accuratel y and reliabl y; (iv) provide for restoration of native species and habitat conditions in ecosy stems that have been invaded; (v) conduct research on invasive species and develop technologies to prevent introduction and provide for environmentally
1 Comment submitt ed by Jonathan Lewis, Senior Counsel, Climate Policy, Clean Air Task Force et al. , dated February 6, 2012. Document ID # EPA - HQ - OAR - 2011 - 0542 - 0118. 2 http://www.gpo.gov/fdsys/pkg/FR - 1999 - 02 - 08/pdf/99 - 3184.pdf*** E.O. 12866 Review

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Page **9** of **103** sound control of invasive species; and (vi) promote public education on invasive species an d the means to address them; and
 not authorize, fund, or carry out actions that it believes are likel y to cause or promote the introduction or spread of invasive species in th e United States or elsewhere unless, pursuant to guidelines that it has prescribed, the agency has determined and made public its determination that the benefits of such actions clearl y outweigh the potential harm caused b y invasive species; and that all f easible and prudent measures to minimize risk of harm will be taken in conjunction with the actions.
 Federal agencies shall pursue the duties set forth in this section in consultation with the Invasive Species Council, consistent with the Invasive Species Management Plan and in cooperation with stakeholders, as appropriate, and, as approved b y the Department of State, when Federal agencies are working with international organizations and foreign nations. ” 4 The Executive Order defines “invasive spec ies” as an alien species whose introduction does or is likely

to cause economic or environmental harm or harm to human health.” The Executive Order calls for agencies to address the issue of invasive species “to the extent practicable and permitted by law ,” in situations where agencies “authorize, fund, or carry out actions that it believes are likely to cause or promote the introduction or spread of invasive species. ” However, in this rulemaking, as required by the statute, EPA is making a determination as to whether the use of certain biofuels would decrease lifecycle emissions of GHG bey ond a statutory threshold. The focus of this rulemaking is the lifecycle anal ys is for the production and use of biofuels , with cultivation of these crops relevant to th e extent it relates to the GHG

4 EO 13112 § 2(a) - (b) (1999).*** E.O. 12866 Review

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Page **10** of **103** lifecycle anal ys is . Whether these crops will be grown for biofuels, in what locations, and in what quantities, will ultimately be decided by

market actors, based on competition with other crops, fuels and feedstocks , as subj ect to state, federal, local regulations . This includes the requirements in the RFS program which limit the locations in which crops can be grown for purposes of feedstock for a RIN generating renewable fuel. However, this rule may provide an incentive for those market actors to produc e these feedstocks. As discussed below, EPA has carefully considered the issues raised concerning invasive species, and is approving pathway s that include the proposed feedstocks, as they meet the GHG emissions reductions specified in the CAA for the RFS program. Arundo donax is listed as a noxious or invasive species by Texas 6 , Nevada 7 , and California 8 , and these states have programs in place to address invasive species concerns. Several other states also consider Arundo donax a plant of concern, 9 , 10 , 11 , 12 and napiergrass is currentl y not recommended in Florida because of invasive potential. 13 EPA also received comments stating that Arundo donax is not “invasive” as defined b y EO 13112, since Arundo donax “only

presents problems of invasiveness in riparian areas prone to torrential flooding...

6 See http://info.sos.state.tx.us/fids/200701978 - 1.html . Accessed o n March 30, 2012. 7 See http://agri.nv.gov/nwac/PLANT_NoxWeedList.htm . Accessed on May 23, 2012 8 See http://pi.cdfa.ca.gov/pqm/man ual/pdf/107.pdf . Accessed on March 30, 2012. 9 See http://www.gaeppc.org/list.cfm . Accessed on May 23, 2012. 10 See http://www.se - eppc.org/pubs/scbooklet.pdf . Accessed on March 30, 2012. 11 See http://www.dcr.virginia.gov/natural_heritage/documents/invlist.pdf . Accessed on March 30, 2012. 12 See http://www.tneppc.org/invasive_plants . Accessed on March 30, 2012. 13 IFAS Assessment of Non - native Plants in Florida’s Natural Areas, 2009 .*** E.O. 12866 Review

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Page **11** of **103** giant reed has been grown responsibly in numerous pl aces...without problems of invasiveness. ” 14 Section 211(o) of the CAA defines renewable fuel as fuel produced from renewable biomass , and defines categories of renewable fuel in terms of reduction s in lifecycle GHG emissions compared to the baseline gasoli ne or diesel fuel. Section 211(o)(1) (B),(D),(E), (J). The definition of renewable biomass also specifies certain conditions that biomass must meet to be considered renewable biomass. Section 211(o)(1)(I). However the definition of renewable biomass does not refer to the wide variet y of other factors that may relate to the impact of the biomass or the fuel on air quality , the environment, and various other impacts. Separatel y, Congress does specify

that EPA is to consider these kinds of factors, includin g environmental impacts of the production and use of renewable fuels, but this consideration is in the context of determining the required volumes of renewable fuel for ye ars where Congress does not specify specific volumes. Section 211(o)(2)(B)(ii). Giv en the text and structure of section 211(o), EPA does not appear to have the discretion to consider factors other than the lifecycle anal ys is of GHG emissions and the definition of renewable biomass in determining whether a fuel produced from biomass shoul d be considered a renewable fuel for purposes of the RFS program. Nonetheless, the Executive Order emphasizes the importance of addressing the potential impacts of invasive species to the extent practicable. In that context, there are a number o f state, federal, and local mechanisms in place that could be used to reduce the potential invasive impacts of Arundo donax. For example, if producers were to appl y for the Biomass Crop Assistance Program (BCAP), the United States Department of Agriculture (USDA) would require an environmental assessment that anal yz es the risk of invasiveness. A similar anal ys is 14 Comment submitted by R. Timothy Columbus and Christopher G. Falcone, Steptoe & Johnson LLP on behalf of The Chemtex Group , dated February 13, 2012. Document ID# EPA - HQ - OAR - 2011 - 0542 - 0124.*** E.O. 12866 Review

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Page **12** of **103** was required fo r miscanthus, which is an approved RFS2 feedstock that may be considered invasive in certain circumstances. 15 Inaddition, USDA’s Conservation Reserve Program (CRP) can also impose restrictions on farmers interested in growing Arundo donax on CRP land. O ther requirements are also in place that would restrict the growing patterns of these feedstocks for use in the RFS2 program. For example, any fuel produced for the RFS2 would also have to meet the definition of renewable biomass, and could therefore o nly be planted on existing agricultural land. Furthermore, i nvasive species are controlled and regulated under various existing federal and state guidelines. The Animal and Plant Health Inspection Service (APHI S) of the United States Department of Agricu lture (USDA) regulates noxious weeds under the authority of the Plant Protection Act (PPA). APHIS names the regulated weeds in the noxious weed regulations (7 CFR 360) in order to ensure transparency . L isted kinds may not be imported into the United Stat es, or moved interstate, without a special permit. The risk posed b y potentially invasive feedstocks can be managed through the use of best practices. 16 Commenters referenced the voluntary best practices document developed jointly by the North Carolin a Department of Agriculture and Consumer Services, the NC State University Cooperative Extension, and the Biofuel Center of North Carolina. Man y of the recommendations developed in this document are similar to the best practices USDA describes for the man agement of similar energy crops such as switchgrass and miscanthus. 17 For example,

15 See http://www.fsa.usda.gov/Internet/FSA_File/finaleagiantmcant hus.pdf 16 Comment submitted by R. Timothy Columbus and Christopher G. Falcone, Steptoe & Johnson LLP on behalf of the Biofuels Center of North Carolina and the Institute for Sustainable and Renewable Resources , dated February 13, 2012. Document ID# EPA - HQ- OAR - 2011 - 0542 - 0123 17 See http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1044768.pdf*** E.O. 12866 Review

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Page **13** of **103** both USDA and the North Carolina voluntary standards recommend developing management plans that avoid sites without buffer areas and production in floodplains. This determination is not a tacit approval to grow these feedstocks without having to meet an y other appropriate local, state, or federal mandates associated with control of invasive species. This rul e making is also not a determination that a risk assessm ent would not be appropriate to evaluate invasiveness based on the specific location and species of plant being grown. As a member of the federal National Invasive Species Council 18 , EPA will continue to work with this body

and its member agencies, includi ng the USDA, to monitor , avoid, and mitigate the risk from invasive species. As a participant in this Council, EPA encourages producers to work with local, state, and federal agencies to develop and adopt best practices

– such as buffers for riparian area s – for minimizing an y potential invasive species impacts of feedstocks considered under this rule. **B. Analysis of Lifecycle Greenhouse Gas Emissions for Biodiesel, Renewable Diesel,**  **Jet Fuel, Heating Oil, Naphtha, and Liquefied Petroleum Gas (LPG) Produced from Camelina Oil**  The following sections describe EPA’s evaluation of camelina as a biofuel feedstock under the RFS program. As discussed previousl y this analysis relies on a comparison to the lifecycle GHG analy sis work that was done as part of the Renewable Fuel Standard Program (RFS2) Final Rule, published March 26, 2010 for soy bean oil biofuels. 1. Fe edstock Production Camelina sativa (camelina) is an oilseed crop within the flowering plant family Brassicaceae that is native to Northern Europe and Central Asia. Camelina’s suitability to
18 http://www.invasivespecies.gov/*** E.O. 12866 Review

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Page **14** of **103** northern climates and low moisture requirements allows it to be grown in areas that are unsuitable for other major oilseed crops such as soy beans, sunflower, and canola/rapeseed. Camelina also requires the use of little to no tillage. 19 Compared to man y other oilseeds, camelina has a relativel y short growing season (les s than 100 day s), and can be grown either as a spring annual or in the winter in milder climates. 20 , 21 Camelina can also be used to break the continuous planting cy cle of certain grains, effectively reducing the disease, insect, and weed pressure in fields planted with such grains (like wheat) in the following y ear. 22 Although camelina has been cultivated in Euro pe in the past for use as food, medicine, and as a source for lamp oil, commercial production using modern agricultural techniques has been limited. 23 Inaddition to being used as a renewable fuel feedstock, small quantities of camelina (less than 5% of to tal U.S. camelina production) are currently used as a dietary supplement and in the cosmetics industry . Approximately 95% of current US production of camelina has been used for testing purposes to evaluate its use as a feedstock to produce primarily jet f uel. 24 The FDA has not approved camelina for food uses, although it has approved

19 Putnam, D.H., J.T. Budin, L.A. Field, and W.M. Breene. 1993. Camelina: A promising low - input oilseed. p. 314 - 322. In: J. Jani ck and J.E. Simon (eds.), New crops. Wiley, New York 20 Moser, B.R., Vaughn, S.F. 2010. Evaluation of Alkyl Est ers from Camelina Sativa Oil as Biodiesel and as Blend Components in Ultra Low Sulfur Diesel Fuel. Bioresource Technology. 101:646 - 653 . 21 McVay, K.A., and P.F. Lamb. 2008. Camelina production in Montana. MSU Ext. MT200701AG (revised). http://msuextension.org/publica¬tions/AgandNaturalResources/MT200701AG.pdf. 22 Putnam et al., 1993 23 Lafferty, Ryan M., Charlie Rife and Gus Foster. 2009. Spring came lina production guide for the Central High Plains. Blue Sun Biodiesel special publication. Blue Sun Agriculture Research & Development, Golden, CO. http://ww w.gobluesun.com/upload/Spring%20Cam - elina%20Production%20Guide%202009.pdf . 24 Telephone conversation with Scott Johnson, Sustainable Oils, January 11, 2011.*** E.O. 12866 Review

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Page **15** of **103** the inclusion of certain quantities of camelina meal in commercial feed. 25 Camelina is currentl y being grown on approximately 50,000 acres of land in the U.S., primarily in Montana, eastern Washington, and the Dakotas. 26 USDA does not sy stematicall y collect camelina production information; therefore data on historical acreage is limited. However, available information indicates that camelina has been grown on trial plots in 12 U.S. states. 27 In response to the proposed rule, two commenters were supportive of the use of renewable feedstocks such as camelina oil to produce biofuels for aviation. One commenter noted that aviation is unique in its complete dependency upon liqui d fuel - today

and into the foreseeable future. Another commenter noted that development of additional feedstocks and production pathway s should increase suppl y and ultimately move us closer to the day when renewable jet fuels are price - competitive with l egacy fossil fuels and help cut our dependence on foreign oil. EPA also received comment regarding a concern that EPA did not adequatel y establish that camelina would only be grown on fallow land and therefore would not have a land use impact and that EPA overestimated the likel y yi elds in growing camelina and therefore underestimated the land requirements. In terms of the comment on camelina not being grown on fallow land, for the purposes of anal yz ing the lifecycle GHG emissions of camelina, EPA has c onsidered the likely production pattern for camelina grown for biofuel production. Given the information currentl y available, camelina is expected to be primaril y planted in the U.S. as a rotation crop on acres that would
25 See http://agr.mt.gov/camelina/FDAle tter11 - 09.pdf . 26 McCormick, Margaret. “Oral Comments of Targeted Growth, Incorporated” Submitted to the EPA on June 9, 2009. 27 See https://www.camelinacompany.com/Marketing/PressRelease.aspx?Id=25*** E.O. 12866 Review

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Page **16** of **103** otherwise remain fallow. Because camelina has not y et been established as a commercial crop with significant monetary value, farmers are unlikely to dedicate acres that could otherwise be used to produce cash crops solely for camelina production. Since camelina would therefore not be expected to displace another crop, EPA does not believe new acres would need to be brought into agricultural use to increase camelina production. In addition, camelina currentl y has onl y limited high - value niche markets for uses other than renewable fuels. Unlike commercial crops that are tracked b y USDA, camelina does not have a well - established, internationally traded market that would be significantly affected by

an increase in the use of camelina to produce biofuels. For these reasons, which are descri bed in more detail below, EPA has determined that production of camelina - based biofuels is not expected to result in significant GHG emissions related to direct land use change since it is expected to be grown on fallow land. Furthermore, due to the limit ed non - biofuel uses for camelina, production of camelina - based biofuels is not expected to have a significant impact on other agricultural crop production or commodity markets (either camelina or other crop markets) and consequentl y would not result in significant GHG emissions related to indirect land use change. To the extent camelina - based biofuel production decreases the demand for alternative biofuels, some with higher GHG emissions, this biofuel could have some beneficial GHG impact. However, it is uncertain which mix of biofuel sources the market will demand so this potential GHG impact cannot be quantified. Commenters stated that EPA failed to justify wh y camelina would be grown on fallow land and thus result in no land use change. In the prop osed rule, EPA provided a detailed description of the economics indicating wh y producers are most likely to grow camelina on land that would otherwise remain fallow. This anal ys is formed the basis for why it was reasonable and logical for camelina to be grown on acres that would otherwise remain fallow. Comments*** E.O. 12866 Review

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Page **17** of **103** also indicated that EPA’s economic basis for assuming camelina would most likely be grown on fallow land was inadequate, especiall y if production of camelina was scaled up. However, the comment d id not indicate any specific point of error in our economically based anal ys is. As we described in the proposed rule and discuss below, camelina is currentl y not a commercially raised crop in the United States, therefore the returns on camelina are expect ed to be low compared to wheat and other crops with established, commerciall y traded markets. 28 Therefore, EPA expects that initial production of camelina for biofuel production will be on land with the lowest opportunity

cost. Based on this logic, EPA be lieves camelina will be grown as a rotation crop, as discussed below, on dryland wheat acres replacing a period that the land would otherwise be left fallow. In the semi - arid regions of the Northern Great Plains, dryland wheat farmers currently leave ac res fallow once every three to four ye ars to allow additional moisture and nutrients to accumulate (see Figure 1). Recent research indicates that introducing cool season oilseed crops such as camelina can provide benefits b y reducing soil erosion, incr easing soil organic matter, and disrupting pest cycles. Although long - term data on the effects of replacing wheat/fallow growing patterns with wheat/oilseed rotations is limited, there is some data that growing oilseeds in drier semi - arid regions y ear aft er ye ar can lead to reduced wheat yi elds. 29 However, the inclusion of oilseed crops can improve overall water use efficiency and the long term economic productivity

of wheat acres. In addition, selective breeding is expected to reduce the potential

28 See Shonnard, D. R., Williams, L., & Kalnes, T. N. 2010 . Camelina - Derived Jet Fuel and Diesel: Sustainable Advanced Biodiesel. Environmental Progress & Sustainable Energy, 382 - 392. 29 Personal communication with Andrew Lenssen, Department of Agronomy, Iowa State University, April 17, 2012. See also http://www.ars.usda.gov/is/pr/2010/100413.htm .*** E.O. 12866 Review

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Page **18** of **103** negative impacts on wheat yields. 30 Additional research in this area is needed and if significant negative impacts on crop rotations are determined from camelina grown on fallow acres EPA would take that into account in future anal ys is. **Figure 1: Examples of Traditional Wheat and Camelina/Wheat Rotations** Example 1: Traditional Winter Wheat/Spring Wheat/Fallow Rotation

Jan Feb Mar April May June July Aug Sept Oct Nov Dec Year 0 Winter Wheat Pla nting Year 1 Winter Wheat Harvest Year 2 Spring Wheat Pla nting Spring Wheat Harvest Year 3 Winter Wheat Pla nting Example 2: Winter Wheat/Camelina/Spring Wheat Rotation

Jan Feb Mar April May June July Aug Sept Oct Nov Dec Year 0 Winter Wheat Pla nting Year 1 Winter

30 See Shonnard et al., 2010; Lafferty et al., 2009*** E.O. 12866 Review

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Page **19** of **103** Wheat Harvest Year 2 Camelina Pla nting Camelina Harvest Year 3 Spring Wheat Pla nting Spring Wheat Harvest Winter

Wheat Pla nting
Shaded cells indicate fallow months Hatched line cells indicate growing mo n ths As pointed out by

commenters, in the future camelina production could expand bey ond what is currentl y assumed in this analysis. However, camelina would most likely not be able to compete with other uses of land until it becomes a commercial crop with a well - established market value. EPA once again reiterates that we will continue to monitor the growing patterns associated with camelina to deter mine whether actual production is consistent with the assumptions used in this anal ys is. Consistent with EPA’s approach to all RFS2 feedstock pathway analy ses, we will periodically reevaluate whether our assessment of GHG impacts will need to be updated i n the future based on the potential for significant changes in our anal ys es . a. Land Availabilit y USDA estimates that there are approximately 60 million acres of wheat in the U.S. 31 USDA and wheat state cooperative extension reports through 2008 indi cate that 83% of US wheat production is under non - irrigated, dryland conditions. Of the approximately 50 million non - irrigated acres, at least 45% are estimated to follow a wheat/fallow rotation. Thus, approximately

22 million acres are potentially suitab le for camelina production. However,
31 2009 USDA Baseline. See http://www.ers.usda.gov/publications/oce091/*** E.O. 12866 Review

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Page **20** of **103** according to industry

projections, only

about 9 million of these wheat/fallow acres have the appropriate climate, soil profile, and market access for camelina production. 32 Therefore, our anal ys is uses the estimate that only 9 million wheat/fallow acres are available for camelina production. One commenter stated that EPA assumed more than 8 million acres would be used to produce camelina, even though a recent paper stated that only 5 million acres would have the potential to grow camelina in a sustainable manner in a way that would not impact the food supply . This commenter misinterpreted EPA’s assumptions. EPA’s assessment is based on a three ye ar rotation cycle in which only one third of the 9 million available acr es would be fallow in any given ye ar. In other words, EPA assumed only 3 million acres would be planted with camelina in an y given ye ar. This number is less than the 5 million acres the Shonnard et. al. paper states would be available annuall y for camelina planting. b. Projected Volumes Based on these projections of land availability , EPA estimates that at current yields (approximately

800 pounds per acre), approximately 100 million gallons (MG) of camelina based renewable fuels could be produced with camelina grown in rotation with existing crop acres without having direct land use change impacts. Also, since camelina will likely be grown on fallow land and thus not displace an y other crop and since cameli na currently does not have other significant markets, expanding production and use of camelina for biofuel purposes is not likely to have other agricultural market impacts and therefore, would not result in any significant

32 Johnson, S. and McCormick, M., Camelina: an Annual Cover Crop Under 40 CFR Part 80 Subpart M, Memorandum, dated November 5, 2010*** E.O. 12866 Review

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Page **21** of **103** indirect land use impacts. 33 Yield s of camelina are expected to approach the yields of similar oilseed crops over the next few y ears, as experience with growing camelina improves cultivation practices and the application of existing technologies are more widel y adopted. 34 Yields of 1650 po unds per acre have been achieved on test plots, and are in line with expected yields of other oilseeds such as canola/rapeseed. Assuming average US yi elds of 1650 pounds per acre, 35 approximately

200 MG of camelina - based renewable fuels could be produced o n existing wheat/fallow acres. Finally , if investment in new seed technology allows yields to increase to levels assumed b y Shonnard et al (3000 pounds per acre), approximately 400 MG of camelina based renewable fuels could be produced on existing acres. 36 Depending on future crop yi elds, we project that roughly

100 MG to 400 MG of camelina - based biofuels could be produced on currentl y fallow land with no impacts on land use 37
. We also received comments that we overestimated long term camelina yi elds. T he commentors stated that reaching yi elds of 3000 pounds per acre may be attainable, but previous trials do not suggest that yields could reach this level in ten y ears. As a point of clarification, we did not assume that yields would need to be 3000 pound s per acre for biodiesel produced from camelina oil to qualify

as an advanced biofuel. In the anal ys is presented below, EPA assumed yi elds of camelina would be 1650 pounds per acre. Since the use of camelina as a biofuel

33 Wheeler, P. and Guillen - Portal F. 2007. Camelina Production in Montana : A survey study sponsored by Targeted Growth, Inc. and Barkley Ag. Enterprises, LLP . 34 See Hunter, J and G. Roth. 2010. Camel ina Production and Potential in P ennsylvania , Penn State University Agronomy Facts 72. See http://pubs.cas.psu.edu/freepubs/pdfs/uc212.pdf . 35 Ehrensing, D.T. and S.O. Guy. 2008. Oilseed Crops -- Camelina. Oregon S tate Univ. Ext. Serv. EM8953 - E. See http://extension.oregonstate.e du/ catalog/pdf/em/em8953 - e.pdf; McVay & Lamb, 2008, 36 See Shonnard et al . , 2010 37 This assumes no significant adverse climate impacts on world agricultural yields over the analytical timeframe.*** E.O. 12866 Review

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Page **22** of **103** feedstock in the U.S. is in its i nfancy, it is reasonable to consider how yi elds will change over time. As the commenter noted, this yield assumption is within the range of potential yields of 330 - 2400 pounds per acre found in the current literature. c. Indirect Impacts Altho ugh wheat can in some cases be grown in rotation with other crops such as lentils, flax, peas, garbanzo, and millet, cost and benefit analy sis indicate that camelina is most likely to be planted on soil with lower moisture and nutrients where other rotatio n crops are not viable. 38 Because expected returns on camelina are relatively uncertain , farmers are not expected to grow camelina on land that would otherwise be used to grow cash crops with well established prices and markets. Instead, farmers are most likel y to grow camelina on land that would otherwise be left fallow for a season. The opportunity cost of growing camelina on this ty pe of land is much lower. As previously

discussed, this ty

pe of land represents the 9 million acres currentl y being targe ted for camelina production. Current returns on camelina are relatively low ($13.24 per acre), given average yi elds of approximately 800 pounds per acre and the current contract price of $0.145 per pound. 39 See Table 1. For comparison purposes, the USDA projections for wheat returns are between $88 - $105 per acre between 2010 and 2020. Over time, advancements in seed technology , improvements in planting and harvesting techniques, and higher input usage could significantly

increase future camelina yi elds and returns.

**Table 1: Camelina Costs and Returns** 

2010 Camelina 40 2022 Camelina 41 2030 Camelina 42
38 See Lafferty et al, 2009; Shonnard et al, 2010; Sustainable Oils Memo dated November 5, 2010, 39 Wheeler & Guillen - Portal, 2007 40 See Susta inable Oils Memo dated November 5, 2010,*** E.O. 12866 Review

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Page **23** of **103** Inputs Rates Herbicides Glysophate (Fall) 16 oz. ( $0.39/oz) $7.00 $7.00 $7.00 Glysophate (Spring) 16 oz. ( $0.39/oz) $7.00 $7.00 $7.00 Post 12 oz ( $0.67/oz) $8.00 $8.00 $8.00 Seed Camelina seed $1.44/lb $5.76 (4 lbs/acre) $7.20

(5 lbs/acre) $7.20

(5 lbs/acre) Fertilizer Nitrogen Fertilizer $1/pd $25.00 (25 lb/acre) $40.00

(40 lb/acre) $75

(75 lbs/acre) Phosphate Fertilizer $1/pd $15.00 (15 lb/acre) $15.00

(15 lb/acre) $15

(15 lb/acre) Sub - Total $67.76 $84.20 $119.20 Logistics Planting Trip $10.00 $10.00 $10.00 Harvest & Hauling $25.00 $25.00 $25.00 Total Cost $102.76 $119.20 $154.20 Yields lb/acre 800 1650 3000 Price $/lb $0.145 $0.120 $0.090 Total Revenue at avg prod/pricing $116.00 $198 $270 Returns $13.24 $78.80 $115.80
41 Based on yields technically feasible. See McVey and Lamb, 2008; Ehrenson & Guy, 2008. 42 Adapted from Shonnard et al, 2010.*** E.O. 12866 Review

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Page **24** of **103** While replacing the fallow period in a wheat rotation is expected to be the primary means by which the majority

of all domestic camelina is commerciall y harvested in the short - to medium - term, in the long term camelina may expand to other regions and grow ing methods. 43 For example, if camelina production expanded beyond the 9 million acres assumed available from wheat fallow land, it could impact other crops. However, as discussed above this is not likely to happen in the near term due to uncertainties in camelina financial returns. Camelina production could also occur in areas where wheat is not commonly grown. For example, testing of camelina production has occurred in Florida in rotation with kanaf, peanuts, cotton, and corn. However, only

200 acres of camelina were harvested in 2010 in F lorida. While Florida acres of camelina are expected to be higher in 2011, very little research has been done on growing camelina in Florida. For example, little is known about potential seedling disease in Florida or how camelina may

be affected differe ntl y than in colder climates. 44 Therefore, camelina grown outside of a wheat fallow situation was not considered as part of this anal ys is. The determination in this final rule is based on our projection that camelina is likely to be produced on what wou ld otherwise be fallow land. However, the rule applies to all camelina regardless of where it is grown. EPA does not expect that significant camelina would be grown on non - fallow land, and small quantities that may be grown elsewhere and used for biof uel production will not significantly impact our anal ys is. Furthermore, although we expect most camelina used as a feedstock for renewable fuel production that would qualify in the RFS program would be grown in the U.S., today ’s rule
43 See Sustainable Oils Memo dated November 5, 2010 for a map of the regions of the countr y where camelina is likely to be grown in wheat fallow conditions. 44 Wright & Marois, 2011.*** E.O. 12866 Review

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Page **25** of **103** would apply

to qual ifying renewable fuel made from camelina grown in any country . For the same reasons that pertain to U.S. production of camelina, we expect that camelina grown in other countries would also be produced on land that would otherwise be fallow and would there fore have no significant land use change impacts. The renewable biomass provisions under the Energy Independence and Security Act would prohibit direct land conversion into new agricultural land for camelina production for biofuel internationally. Additi onally , an y camelina production on existing cropland internationally would not be expected to have land use impacts beyond what was considered for international soybean production (soy bean oil is the expected major feedstock source for US biodiesel fuel production and thus the feedstock of reference for the camelina evaluation). Because of these factors along with the small amounts of fuel potentially

coming from other countries, we believe that incorporating fuels produced in other countries will not impa ct our threshold anal ys is for camelina - based biofuels. d. Crop Inputs For comparison purposes, Table 2 shows the inputs required for camelina production compared to the FASOM agricultural input assumptions for soy beans. Since yields and input assumptions vary

by region, a range of values for soy bean production are shown in Table 2. The camelina input values in Table 2 represent average values, camelina input values will also vary by region, however, less data is available comparing actual practices by re gion due to limited camelina production. More information on camelina inputs is available in materials provided in the docket.*** E.O. 12866 Review

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Page **26** of **103 Table 2: Inputs for Camelina and Soybean Production** 

Regarding crop inputs per acre, it should be noted that camelina has a higher percentage of oil per pound of seed than soy beans. Soy

beans are approximately

18% oil, therefore crushing one pound of so ybeans yi elds 0.18 pounds of oil. In comparison, camelina is approximately 36% oil, therefore crushing one pound of camelina yi elds 0.36 pounds of oil. The difference in oil yi eld is taken into account when calculating the emissions per mmBTU included in Table 2. As shown in Table 2, GHG emissions from feedstock production for camelina and soy beans are relativel y similar when factoring in variations in oil yields per acre and fertilizer, herbicide, pesticide, and petroleum use. In summary , EPA concludes that the agricultural inputs for growing camelina are similar to those for growing so y beans, direct land use change impact s are expected to be negligible due to planting on land that would be otherwise fallow, and the limited production and use of camelina indicates no expected impacts on other crops and therefore no indirect land use impacts. e. Crushing and Oil E xtraction We also looked at the seed crushing and oil extraction process and compared the lifecycle GHG emissions from this stage for so ybean oil and camelina oil. As discussed above, camelina N2 O N/A 22 kg CO2 eq N/A 9 - 12 kg CO2 eq Nitr oge n Fe rti lizer 40 lbs 7 kg CO2 eq 3. 5 - 8. 2 lb s 1 - 3 kg CO2 eq Phosphorus Fe rti liz er 15 lbs 1 kg CO2 eq 5. 4 - 21. 4 lb s 0 - 2 kg CO2 eq Potassium Ferti lizer 10 lbs 0 kg CO2 eq 3. 1 - 24. 3 lb s 0 - 2 kg CO2 eq He rbi ci de 2. 75 lbs 3 kg CO2 eq 0. 0 - 1. 3 lb s 0 - 2 kg CO2 eq Pestic ide 0 lbs 0 kg CO2 eq 0. 1 - 0. 8 lb s 0 - 2 kg CO2 eq Di esel 3. 5 gal 5 kg CO2 eq 3. 8 - 8. 9 gal 7 - 20 kg CO2 eq Gas ol in e 0 gal 0 kg CO2 eq 1. 6 - 3. 0 gal 3 - 5 kg CO2 eq To tal 39 kg CO2 eq 21 - 47 kg CO2 eq **(p er**  **acre )**  **(per**

**mmbtu f ue**  **l) (p**  **er acre**  **) (p**  **er mmbtu f**  **ue l)**  **Came lina**  **Soybe an**  **s ( vari**  **es by re**  **gi on)**  **Inputs Emi**  **ssions Inputs**  **Emissi ons** *** E.O. 12866 Review

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Page **27** of **103** seeds produce more oil per pound than so ybeans. As a result, the lifecycle GHG emissions associated with crushing and oil extraction are lower for camelina than so yb eans, per pound of vegetable oil produced. Table 3 summarizes data on inputs, outputs and estimated lifecycle GHG emissions from crushing and oil extraction. The data on so ybean crushing comes from the RFS2 final rule, based on a process model developed by USDA - ARS. 45 The data on camelina crushing is from Shonnard et al. (2010). **Table 3: Com parison of Camelina and Soybean Crushing and Oil Extraction**  **Item Soybeans**  **Cam elina**  **Units** Material Inputs Beans or Seeds 5.38 2.90 Lbs Energy Inputs Electricity 374 47 Btu Natural Gas & Steam 1,912 780 Btu Outputs Refined vegetable oil 1.00 1.00 Lbs Meal 4.08 1.85 Lbs GHG Emissions 213 64 gCO2e / lb refined oil 2. Feedstock Distribution, Fuel Distribution, and Fuel Use For this anal ys is, EPA projects that the feedstock distribution emissions will be the same for camelina and so ybean oil. To the exte nt that camelina contains more oil per pound of seed, as discussed above, the energy needed to move the camelina would be lower than soy beans per 45 A. Pradhan, D.S. Shrestha, A. McAloon, W. Yee, M. Haas, J.A. Duffield, H. Shapouri, September 2009, “Energy Life - Cycle Assessment of Soybean Biodiesel”, Unite d States Department of Agriculture, Office of the Chief Economist, Office of Energy Policy and New Uses, Agricultural Economic Report Number 845*** E.O. 12866 Review

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Page **28** of **103** gallon of fuel produced. To the extent that camelina is grown on more disperse fallow land than soy bean and w ould need to be transported further, the energy needed to move the camelina could be higher than so ybean. We believe the assumption to use the same distribution impacts for camelina as so yb ean is a reasonable estimate of the GHG emissions from camelina fe edstock distribution. In addition, the final fuel produced from camelina is also expected to be similar in composition to the comparable fuel produced from soy beans, therefore we are assuming GHG emissions from the distribution and use of fuels made from camelina will be the same as emissions of fuel produced from so ybeans. 3. Fuel Production There are two main fuel production processes used to convert camelina oil into fuel. The trans - esterification process produces biodiesel and a gl yc erin co - product. The hydrotreating process can be configured to produce renewable diesel either primaril y as diesel fuel (including heating oil) or primaril y as jet fuel. Possible additional products from h ydrotreating include naphtha LPG, and propane. Both processes and the fuels produced are described in the following sections. Both processes use camelina oil as a feedstock and camelina crushing is also included in the anal ys is. a. Biodiesel For this anal ys is, we assumed the same biodiesel production facilit y designs and conversion efficiencies as modeled for biodiesel produced from soy bean oil and canola/rapeseed oil. Camelina oil biodiesel is produced using the same methods as so ybean oil bi odiesel, therefore plant designs are assumed to not significantly differ between fuels made from these feedstocks. As was the case for so yb ean oil biodiesel, we have not projected in our assessment of camelina oil biodiesel any significant improvements in plant technology . Unanticipated energy*** E.O. 12866 Review

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Page **29** of **10 3**  saving improvements would further improve GHG performance of the fuel pathway . The gl yc erin produced from camelina biodiesel production is chemically equivalent to the gl yc erin produced from the existing biodiesel pathway s (e.g., based on soy oil) that were anal yz ed as part of the RFS2 final rule. Therefore the same co - product credit would apply to gl yc erin from camelina biodiesel as gl yc erin produced in the biodiesel pathway s modeled for the RFS2 final rule. The assumption is that the GHG reductions associated with the replacement of residual oil with gl yc erin on an energy equivalent basis represents an appropriate midrange co product credit of biodiesel produced gl yc erin. As part of our RFS2 proposal, we assumed the gl ycerin would have no value and would effectivel y receive no co - product credits in the soy biodiesel pathway . We received numerous comments, however, asserting that the gl yc erin would have a beneficial use and should generate co - product benefits. There fore, the biodiesel gl yc erin co - product determination made as part of the RFS2 final rule took into consideration the possible range of co - product credit results. The actual co - product benefit will be based on what products are replaced by the gl yc erin an d what new uses develop for the co - product gl yc erin. The total amount of gl yc erin produced from the biodiesel industry

will actually

be used across a number of different markets with different GHG impacts. This could include for example, replacing petrol eum gl yc erin, replacing fuel products (residual oil, diesel fuel, natural gas, etc.), or being used in new products that don’t have a direct replacement, but may

nevertheless have indirect effects on the extent to which existing competing products are used . The more immediate GHG reduction credits from gl yc erin co product use could range from fairl y high reduction credits if petroleum gl yc erin is replaced to lower reduction credits if it is used in new markets that have no direct replacement product, and therefore no replaced emissions.*** E.O. 12866 Review

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Page **30** of **103** EPA does not have sufficient information (and received no relevant comments as part of the RFS2 rule) on which to allocate gly cerin use across the range of likel y uses. Therefore, EPA believes that the approach used in RF S2 of picking a surrogate use for modeling purposes in the mid - range of likel y gl yc erin uses, and the GHG emissions results tied to such use, is reasonable. The replacement of an energy equivalent amount of residual oil is a simplifyingassumption determi ned b y EPA to reflect the mid - range of possible gl ycerin uses in terms of GHG credits. EPA believes that it is appropriatel y representative of GHG reduction credit across the possible range without necessaril y biasing the results toward high or low GHG impact. Given the fundamental difficult y of predicting possible gl yc erin uses and impacts of those uses man y ye ars into the future under evolving market conditions, EPA believes it is reasonable to use the more simplified approach to calculating co - produ ct GHG benefit s associated with gl yc erin production at this time . EPA will continue to evaluate the co - product credit associated with gl ycerine production in future rulemakings. Given the fact that GHG emissions from camelina - based biodiesel would be similar to the GHG emissions from soy bean - based biodiesel at all stages of the lifecy cle but would not result in land use change s as was the case for so y oil used as a feedstock, we believe biodiesel from camelina oil will also meet the 50% GHG emissions reduction threshold to qualify as a biomass based diesel and an advanced fuel. Therefore, EPA is including biodiesel produced from camelina oil under the same pathway s for which biodiesel made from soy bean oil qualifies under the RFS2 final rule. b. Rene wable Diesel (Including Jet Fuel and Heating Oil), Naphtha, and LPG The same feedstocks currently used for biodiesel production can also be used in a hydrotreating process to produce a slate of products, including diesel fuel, heating oil (defined as*** E.O. 12866 Review

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Page **31** of **103** No. 1 or No. 2 diesel), jet fuel, naphtha, LPG, and propane. Since the term renewable diesel is defined to include the products diesel fuel, jet fuel and heating oil, the following discussion uses the term renewable diesel to also include diesel fuel, jet fuel and heating oil. The yield of renewable diesel is relatively insensitive to feedstock source. 46 While any propane produced as part of the h ydrotreating process will most likely be combusted within the facility for process energy , the other co - products th at can be produced (i.e., renewable diesel, naphtha, LPG) are higher value products that could be used as transportation fuels or, in the case of naphtha, a blendstock for production of transportation fuel. The hydrotreating process maximized for producing a diesel fuel replacement as the primary fuel product requires more overall material and energy

inputs than transesterification to produce biodiesel, but it also results in a greater amount of other valuable co - products as listed above. The h ydrotreating process can also be maximized for jet fuel production which requires even more process energy than the process optimized for producing a diesel fuel replacement, and produces a greater amount of co - products per barrel of feedstock, especially naphtha. Pro ducers of renewable diesel from camelina have expressed interest in generating RINs under the RFS2 program for the slate of products resulting from the h ydrotreating process. Our lifecycle anal ys is accounts for the various uses of the co - products. There are two main approaches to accounting for the co - products produced, the allocation approach, and the displacement approach. In the allocation approach all the emissions from the hydrotreating process are allocated across all the different co - products. Th ere are a number of way s to do this but since the main use of the co - products would be to generate RINs as a fuel product we allocate based on the energy content of the co - products produced. In this case, emissions from 46 Kalnes, T., N., McCall, M., M., Shonnard, D., R., 2010. Renewable Diesel and Jet - Fuel Production from Fats an d Oils. Thermochemical Conversion of Biomass to Liquid Fuels and Chemicals, Chapter 18, p. 475*** E.O. 12866 Review

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Page **32** of **103** the process would be allocated equa lly to all the Btus produced. Therefore, on a per Btu basis all co - products would have the same emissions. The displacement approach would attribute all of the emissions of the hydrotreating process to one main product and then account for the emission r eductions from the other co - products displacing alternative product production. For example, if the hydrotreating process is configured to maximize diesel fuel replacement production, all of the emissions from the process would be attributed to diesel fue l, but we would then assume the other co - products were displacing alternative products, for example, naphtha would displace gasoline, LPG would displace natural gas, etc. This assumes the other alternative products are not produced or used, so we would su btract the emissions of gasoline production and use, natural gas production and use, etc. This would show up as a GHG emission credit associated with the production of diesel fuel replacement. To account for the case where RINs are generated for the jet fuel, naphtha and LPG in addition to the diesel replacement fuel produced, we would not give the diesel replacement fuel a displacement credit for these co - products. Instead, the lifecycle GHG emissions from the fuel production processes would be allocat ed to each of the RIN - generating products on an energy content basis. This has the effect of tending to increase the fuel production lifecycle GHG emissions associated with the diesel replacement fuel because there are less co - product displacement credits to assign than would be the case if RINs were not generated for the co products. 47 On the other hand, the upstream lifecycle GHG emissions associated with producing and transporting the plant oil feedstocks will be distributed over a larger group of RIN g enerating products. Assuming each product (except propane) produced via the camelina oil

47 For a similar discussion see page 46 of Stratton, R.W., Wong, H.M., Hileman, J.I. 2010. Lifecycle Greenhouse Gas Emissions from Alternative Jet Fuels. PARTNER Project 28 report. Version 1.1. PARTNER - COE - 2010 - 001. June 2010, http://web.mit.edu/aeroastro/partner/reports/proj28/partner - proj28 - 2010 - 001.pdf*** E.O. 12866 Review

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Page **33** of **103** hydrotreating process will generate RINs results in higher lifecy cle GHG emissions for diesel fuel replacement as compared to the case where the co - products are not u sed to generate RINs. This general principle is also true when the h ydrotreating process is maximized for jet fuel production. As a result, the worst GHG performance (i.e., greatest lifecy cle GHG emissions) for diesel replacement fuel and jet fuel produce d from camelina oil via hydrotreating will occur when all of the co - products are RIN - generating (we assume propane will be used for process energy). Thus, if these fuels meet the 50% GHG reduction threshold for biomass based diesel or advanced biofuel whe n co - products are RIN - generating, they will also do so in the case when RI Ns are not generated for co - products. We have evaluated information about the lifecycle GHG emissions associated with the hydrotreating process which can be maximized for jet fuel o r diesel replacement fuel production. Our evaluation considers information published in peer - reviewed journal articles and publicly available literature (Kalnes et al, 2010, Pearlson, M., N., 2011, 48 Stratton et al., 2010, Huo et al., 2008 49 ). Our analy si s of GHG emissions from the hy drotreating process is based on the mass and energy

balance data in Pearlson (2011) which anal yz es a hydrotreating process maximized for diesel replacement fuel production and a h ydrotreating process maximized for jet fuel pro duction. 50 This data is summarized in Table 4.

48 Pearlson, M., N. 2011. A Techno - Economic and Environmental Assessment of Hydroprocessed Renewable Distillate Fuels. 49 Huo, H., Wang., M., Bloyd, C., Putsche, V., 2008. Life - Cycle Assessment of Energy and Greenhouse Gas Effects of Soybean - Derived Biodiesel and Renewable Fuels. Argonne National Laboratory. Energy Systems Division. ANL/ESD/08 - 2. March 12, 2008 50 We have also considered data submitted by companies involved in the hydrotreating industry which is claimed as confidential business information (CBI). The conclusions using the CBI data are consistent with the analysis presented here.*** E.O. 12866 Review

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Page **34** of **103 Table 4: Hydrotreating Processes to Convert Camelina Oil into Diesel Replacement Fuel**  **and Jet Fuel 51**  Maximized for Diesel Fuel Production Maximized for Jet Fuel Production Units (per gallon of fuel produced) Inputs Refined camelina oil 9.56 12.84 Lbs Hy drogen 0.04 0.08 Lbs Electricity 652 865 Btu Natural Gas 23,247 38,519 Btu Outputs Diesel Fuel 123,136 55,845 Btu Jet fuel 23,197 118,669 Btu Naphtha 3,306 17,042 Btu LPG 3,084 15,528 Btu Propane 7,454 9,881 Btu Table 5 compares lifecy cle GHG emissions from oil extraction and fuel production for soy bean oil biodiesel and for camelina - based diesel and jet fuel. The lifecycle GHG estimates for camelina oil diesel and jet fuel are based on the input/output data summarized in Table 3 (for oil extraction) and Table 4 (for fuel production). We assume that the propane co - product does not generate RINs; instead, it is used for process energy displacing natur al gas. We also assume that the naphtha is used as blendstock for production of transportation fuel to generate RINs. In this case we assume that RI Ns are generated for the use of LPG in a way that meets the EISA

51 Based on Pearlson (2011), Table 3.1 and Table 3.2*** E.O. 12866 Review

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Page **35** of **103** definition of transportation fuel, for ex ample it could be used in a nonroad vehicle. The lifecycle GHG results in Table 5 represent the worst case scenario (i.e., highest GHG emissions) because all of the eligible co - products are used to generate RI Ns. This is because, as discussed above, lifec ycle GHG emissions per Btu of diesel or jet fuel would be lower if the naphtha or LPG is not used to generate RINs and is instead used for process energy displacing fossil fuel such as natural gas . Supporting information for the values in Table 5, includi ng key assumptions and data, is provided through the docket.

**Table 5: Fuel Production Lifecycle GHG Emissions (kgCO2e / mmBtu) 52** 

Feedstock Production

Process RIN Generating Products Other Co products Oil Extraction Processing Total Soy bean Oil Trans Esterification Biodiesel Glycerin 14 (1) 13 Camelina Oil Trans Esterification Biodiesel Glycerin 4 (1) 3 Camelina Oil Hy drotreating

Maximized for Diesel Diesel Propane 4 8 12

Jet Fuel Naphtha LPG Camelina Oil Hy drotreating

Maximized for Jet Fuel Diesel Fuel Propane 4 11 14

Jet Fuel Naphtha

52 Lifecycle GHG emissions are normalized per mmBtu of RIN - generating fuel produced. Totals may not be the sum of the rows due to rounding error. Parentheses indicate negative numbers. Process emissions for biodiesel production are negative because they include the glycerin offset credit.*** E.O. 12866 Review

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Page **36** of **103** LPG As discussed above, for a process that produces more than one RIN - generating output (e.g., the h ydrotreating process summarized in Table 5 which produces diesel replacement fuel, jet fuel, and naphtha) we allocate lifecycle GHG emissions to the RI N generat ing products on an energy equivalent basis. We then normalize the allocated lifecycle GHG emissions per mmBtu of each fuel product. Therefore, each RIN - generating product from the same process will be assigned equal lifecycle GHG emissions per mmBtu from fuel processing. For example, based on the lifecycle GHG estimates in Table 5 for the hydrotreating process maximized to produce jet fuel, the jet fuel and the naphtha both have lifecycle GHG emissions of 14 kgCO2e/mmBtu. For the same reasons, the lifec ycle GHG emissions from the jet fuel and naphtha will stay equivalent if we consider upstream GHG emissions, such as emissions associated with camelina cultivation and harvesting. Lifecy cle GHG emissions from fuel distribution and use could be somewhat di fferent for the jet fuel and naphtha, but since these stages produce a relativel y small share of the emissions related to the full fuel lifecycle, the overall difference will be quite small. Given that GHG emissions from camelina oil would be similar to the GHG emissions from soy bean oil at all stages of the lifecycle but would not result in land use change emissions (soy oil feedstock did have a significant land use change impact but still met a 50% GHG reduction threshold), and considering differences i n process emissions between so ybean biodiesel and camelina - based renewable diesel, we conclude that renewable diesel from camelina oil will also meet the 50% GHG emissions reduction threshold to qualify as biomass based diesel and advanced fuel. Although some of the potential configurations result in fuel production GHG emissions that are higher than fuel production GHG emissions for soy bean oil biodiesel, land use change emissions account for approximately 80% of the soy

bean oil to biodiesel lifecycle GHG s.*** E.O. 12866 Review

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Page **37** of **103** Since camelina is assumed not to have land use change emissions, our analysis shows that camelina renewable diesel will qualify for advanced renewable fuel and biomass - based diesel RI Ns even for the cases with the highest lifecy cle GHGs (e.g., when all of the co - products are used to generate RINs.) Because the lifecycle GHG emissions for RIN - generating co - products are very similar, we can also conclude renewable gasoline blendstock and LPG produced from camelina oil will also meet the 50% GHG emissions reduction threshold. If the facility does not actuall y generate RINs for one or more of these co - products, we estimate that the lifecycle GHG emissions related to the RI N - generating products would be lower, thus renewable diesel (which includes diesel fuel, jet fuel, and heati ng oil) from camelina would still meet the 50% emission reduction threshold. 4. Summary Current information suggests that camelina will be produced on land that would otherwise remain fallow. Therefore, increased production of camelina - based renewable fuel is not expected to result in significant land use change emissions . For the purposes of this anal ys is, EPA is projecting there will be no land use emissions associated with camelina production for use as a renewable fuel feedstock. However, whi le production of camelina on acres that would otherwise remain fallow is expected to be the primary means b y which the majority of all camelina is commercially harvested in the short - to medium - term, in the long term camelina may expand to other growing m ethods and lands if demand increases substantially beyond what EPA is currentl y predicting. While the impacts are uncertain, there are some indications demand could increase significantl y. For example, camelina is included under USDA’s Biomass Crop Assis tance Program (BCAP) and there is growing support for the use of camelina oil in producing drop - in alternative aviation*** E.O. 12866 Review

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Page **38** of **103** fuels. EPA plans to monitor the expansion of camelina production to verify whether camelina is primarily grown on existing acres onc e camelina is produced at larger - scale volumes. Similarly , we will consider market impacts if alternative uses for camelina expand significantly beyond what was described in the above anal ys is. Just as EPA plans to periodically review and revise the metho dology

and assumptions associated with calculating the GHG emissions from all renewable fuel feedstocks, EPA expects to review and revise as necessary the anal ys is of camelina in the future. Taking into account the assumption of no land use change emissi ons when camelina is used to produce renewable fuel, and considering that other sources of GHG emissions related to camelina biodiesel or renewable diesel production have comparable GHG emissions to biodiesel from soy bean oil, we have determined that camel ina - based biodiesel and renewable diesel should be treated in the same manner as so y - based biodiesel and renewable diesel in qualifying as biomass - based diesel and advanced biofuel for purposes of RIN generation, since the GHG emission performance of the c amelina - based fuels will be at least as good and in some respects better than that modeled for fuels made from so yb ean oil. EPA found as part of the Renewable Fuel Standard final rulemaking that so ybean biodiesel resulted in a 57% reduction in GHG emissio ns compared to the baseline petroleum diesel fuel. Furthermore, approximately 80% of the lifecycle impacts from soy bean biodiesel were from land use change emissions which are assumed to be not significant for the camelina pathway considered. Thus, EPA i s including camelina oil as a potential feedstock under the same biodiesel and renewable diesel (which includes diesel fuel, jet fuel, and heating oil) pathway s for which soy bean oil currentl y qualifies. We are also including a pathway for naphtha and LPG produced from camelina oil through hydrotreating. This is based on the fact that our analy sis shows that even when all of the co -*** E.O. 12866 Review

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Page **39** of **103** products are used to generate RINs the lifecycle GHG emissions for RIN - generating co - products including diesel replacement fu el, jet fuel, naphtha and LPG produced from camelina oil will all meet the 50% GHG emissions reduction threshold. We are also clarifying that two existing pathway s for RIN generation in the RFS regulations that list "renewable diesel" as a fuel product p roduced through a hydrotreating process include jet fuel. This applies to two pathway s in Table 1 to §80.1426 of the RFS regulations which both list renewable diesel made from soy bean oil, oil from annual covercrops, algal oil, biogenic waste oils/fats/greases, or non - food grade corn oil using hydrotreating as a process. If parties produce jet fuel from the h ydrotreating process and co - process renewable biomass and petroleum they can generate advanced biofuel RINs (D code 5) for the jet fuel produced. I f they

do not co - process renewable biomass and petroleum they can generate biomass - based diesel RINs (D code 4) for the jet fuel produced. § 80.1401 of the RFS regulations currentl y defines non - ester renewable diesel as a fuel that is not a mono - alkyl e ster and which can be used in an engine designed to operate on conventional diesel fuel or be heating oil or jet fuel. The reference to jet fuel in this definition was added b y direct final rule dated May 10, 2010. Table 1 to §80.1426 identifies approved fuel pathway s by

fuel t ype, feedstock source and fuel production processes. The table, which was largel y adopted as part of the March 26, 2010 RFS2 final rule, identifies jet fuel and renewable diesel as separate fuel types. Accordingl y, in light of the revised definition of renewable diesel enacted after the RFS2 rule, there is ambiguity regarding the extent to which references in Table 1 to “renewable diesel” include jet fuel. The original lifecycle analy sis for the renewable diesel from hydrotreating pathway s listed in Table 1 to §80.1426 was not based on producing jet fuel but rather other transportation*** E.O. 12866 Review

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Page **40** of **103** diesel fuel products, namely a diesel fuel replacement. As discussed above, the hydrotreating process can produce a mix of products including jet fu el, diesel, naphtha, LPG and propane. Also, as discussed, there are differences in the process configured for maximum jet fuel production vs. the process maximized for diesel fuel production and the lifecycle results vary depending on what approach is use d to consider co - products (i.e., the allocation or displacement approach). In cases where there are no pathway s for generating RINs for the co - products from the hydrotreating process it would be appropriate to use the displacement method for capturing th e credits of co - products produced. This is the case for most of the original feedstocks included in Table 1 to §80.1426. 53 As was discussed previously, if the displacement approach is used when jet fuel is the primary

product produced it results in lower emissions th an the production maximized for diesel fuel production. Therefore, since the h ydrotreating process maximized for diesel fuel meets the 50% lifecycle GHG threshold for the feedstocks in question, the process maximized for jet fuel would also q ualify . Thus, we are interpreting the references to “renewable diesel” in Table 1 to include jet fuel, consistent with our regulatory definition of “non - ester renewable diesel,” since doing so clarifies the existing regulations while ensuring that Table 1 to §80.1426 appropriatel y identifies fuel pathway s that meet the GHG reduction thresholds associated with each pathway . We note that although the definition of renewable diesel includes jet fuel and heating oil, we have also listed in Table 1 of sectio n 80.1426 of the RFS2 regulations jet fuel and heating oil as specific co - products in addition to listing renewable diesel to assure clarity . This clarification also pertains to all the feedstocks already included in Table 1 for renewable diesel. 53 The exception is renewable gasoline blendstock produced from waste categories, but these would pass the lifecycle thresholds regardless of the allocation approach u sed given their low feedstock GHG impacts.*** E.O. 12866 Review

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Page **41** of **103 C.**  **Lifecycle Greenhouse Gas Emissions Analysis for Ethanol, Diesel, Jet Fuel, Heating Oil, and Naphtha Produced from**  **Energy Cane , Giant Reed, and Napiergrass**  For this rulemaking, EPA considered the lifecycle GHG impacts of three new ty pes of high - yi elding perennial grasses similar in cellulosic composition to switchgrass and comparable in status as an emerging energy crop. The three grasses considered in this rulemaking are energy cane (related to sugarcane), giant reed ( Arundo donax ), and napiergrass ( pen nisetum purpureum ), also known as elephant grass. In the proposed and final RFS2 rule, EPA analyzed the lifecycle GHG impacts of producing and using cellulosic ethanol and cellulosic Fischer - Tropsch diesel from switchgrass. The midpoint of the range of s witchgrass results showed a 110% GHG reduction (range of 102% - 117%) for cellulosic ethanol (biochemical process), a 72% (range of - 64% to - 79%) reduction for cellulosic ethanol (thermochemical process), and a 71% (range of - 62% to - 77%) reduction for cellu losic diesel (F - T process) compared to the petroleum baseline. In the RFS2 final rule, we indicated that some feedstock sources can be determined to be similar enough to those modeled that the modeled results could reasonably be extended to these similar feedstock t ypes. For instance, information on miscanthus indicated that this perennial grass will yi eld more feedstock per acre than the modeled switchgrass feedstock without additional inputs with GHG implications (such as fertilizer). Therefore in the f inal rule EPA concluded that since biofuel made from the cellulosic biomass in switchgrass was found to satisfy the 60% GHG reduction threshold for cellulosic biofuel, biofuel produced from the cellulosic biomass in miscanthus would also comply . In the fin al rule we included cellulosic biomass from switchgrass and miscanthus as eligible feedstocks for the cellulosic biofuel pathway s included in Table 1 to § 80.1426. We did not include other perennial grasses such as energy cane, giant reed, or napiergrass*** E.O. 12866 Review

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Page **42** of **103** as feedstocks for the cellulosic biofuel pathway s in Table 1 at that time, since we did not have sufficient time to adequately consider them. Based in part on additional information received through the petition process for EPA approval of energy cane, gi ant reed, and napiergrass pathway s, EPA has evaluated these feedstocks and is now including these three feedstocks in Table 1 to § 80.1426 as approved pathway s for cellulosic biofuel pathway s. As described in detail in the following sections of this preamb le, because of the similarity of these feedstocks to switchgrass and miscanthus, EPA believes that new agricultural sector modeling is not needed to anal yz e them. We have instead relied upon the switchgrass analy sis to assess the relative GHG impacts of biofuel produced from energy cane, giant reed, and napiergrass. As with the switchgrass anal ys is, we have attributed all land use impacts and resource inputs from use of these feedstocks to the portion of the fuel produced that is derived from the cellulosic components of the feedstocks. Based on this analy sis and currentl y available information, we conclude that biofuel (ethanol, cellulosic diesel, jet fuel, heating oil and naphtha) produced from the cellulo sic biomass of energy cane, giant reed, or napiergrass has similar lifecycle GHG impacts to switchgrass biofuel and meets the 60% GHG reduction threshold required for cellulosic biofuel. 1. Feedstock Production and Distribution For the purposes of this rule making, energy cane refers to varieties of perennial grasses in the Saccharum genus which are intentionall y bred for high cellulosic biomass productivity but have characteristicall y low sugar content making them unsuitable as a primary source of sugar as c ompared to other varieties of grasses commonly known as “sugarcane” in the Saccharum genus. Energy cane varieties developed to date have low tolerance for cold temperatures but grow well in warm, humid climates. Energy cane originated from efforts to impro ve disease resistance and*** E.O. 12866 Review

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Page **43** of **103** hardiness of commercial sugarcane b y crossbreeding commercial and wild sugarcane strains. Certain higher fiber, lower sugar varieties that resulted were not suitable for commercial sugar production, and are now being developed as a high - biomass energy crop. There is currentl y no commercial production of energy cane. Current plantings are mainl y limited to research field trials and small demonstrations for bioenergy purposes. However, based in part on discussions with industry , EPA anticipates continued development of energy cane particularl y in the south central and southeastern United States due to its high yi elds in these regions. Giant reed refers to the perennial grass Arundo donax of the Poaceae family . Giant reed thrives in subtropical and warm - temperate areas and is grown throughout Asia, southern Europe, Africa, the Middle East, and warmer U.S. states for multiple uses such as paper and pulp, musical instruments, rayon, particle boards, erosion control, and ornamental purpo ses. 54 , 55 Based in part on discussions with industry , EPA anticipates continued development of giant reed as an energy crop particularl y i n the Mediterranean region and warmer U.S. states. Napiergrass is a tall bunch - ty pe grass that has traditionally been grown as a high - yi elding forage crop across the wet tropics. There is a considerable body of agronomic research on the production of napiergrass as a forage crop. More recentl y, researchers have investigated ways to maximize traits desirable in bioenergy crops. Practices have been developed by USDA and other researchers to lower fertilization rates and increase biomass production. Based in part on discussions with industry , EPA anticipates continued development of napiergrass as an energy crop particularly

in Gulf Coast Region of the United States (more specifically the growing region includes Florida and southern portions of Texas, Louisiana, Georgia, Alabama and
54 See http://www.fs.fed.us/database/feis/plants/graminoid/arudon/all.html 55 See Lewandowski, I., Scurlock, J.M.O., Lindvall, E., Christou, M. (2003). The development and current status of perennial rhizomatous gr asses as energy crops in the US and Europe. Biomass and Bioenergy 25, 335 - 361.*** E.O. 12866 Review

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Page **44** of **103** Mississippi). 56 a. Crop Yields For the purposes of anal yzing the GHG emissions from energy cane, giant reed, and napiergrass production, EPA examined crop yields and production inputs in relation to switchgrass to assess the relative GHG impacts. Current national yi elds for switchgrass are approximately

4.5 to 5 dry

tons per acre. Average energy c ane yi elds exceed switchgrass yields in both unfertilized and fertilized trails conducted in the southern United States. Unfertilized yi elds are around 7.3 dry

tons per acre while fertilized trials show energy cane yields range from approximately

11 to 20 dry

tons per acre. 57 , 58 Until recently there have been few efforts to improve energy

cane yields, but several energy cane development programs are now underway to further increase its biomass productivity . Giant reed field trials conducted in Alabama over a 9 - ye ar period showed an average yield of 15 dry tons per acre with no nitrogen fertilizer applied after the first y ear. 59 Fertilized field trials have shown yields around 13 to 28 dry tons per acre in Spain, and 12 dry

tons per acre in Ital y (based on annu al yields of 3, 14, 17, 16, and 12). 60 High yi elds have been demonstrated with unimproved giant reed populations, and therefore there is potential for increased biomass productivity through improved growing methods and breeding 56 F or a map depicting the northern limit for sustained napiergrass production in the United States s ee Figure 1 in Woodard, K., R. and Sollenberger, L, E. 2008. Production of Bi ofuel Crops in Florida: Elephantgrass. Institute of Food and Agricultural Sciences, University of Florida. SS AGR 297. 57 See Bischoff, K.P., Gravois, K.A., Reagan, T.E., Hoy, J.W., Kimbeng, C.A., LaBorde, C.M., Hawkins, G.L. Plant Regis. 2008, 2, 211 - 217. 58 See Hale, A.L. Sugar Bulletin , 2010, 88, 28 - 29 59 Huang, P., Bransby, D., and Sladden, S. (2010). Exceptionally high yields and soil carbon sequestration recorded for giant reed in Alabama. Poster session presented at: ASA, CSSA, and SSSA 2010 International Annual Meetings, Green Revolution 2.0; 2010 Oct 31 – Nov 4; Long Beach, CA. 60 Mantineo, M., D ’ Agnosta, G.M., Copani, V., Patanè, C., and Cosentino, S.L. (2009). Biomass yield and energy balance of three perennial crops for energy use in the sem i - arid Mediterranean environment. Field Crops Research 114, 204 - 213.*** E.O. 12866 Review

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Page **45** of **103** efforts. 61 Napiergrass field trials have produced dry biomass yields exceeding 20 tons per acre per year in north - central Florida. Using currentl y available technology , average yields for full season napiergrass should range from 14 to 18 tons per acre with future improvements expect ed. Yield depends greatl y on the ty pe of cultivar and the amount and distribution of rainfall and fertilization rates. There is potential for increased biomass productivity through improved growing methods and breeding efforts. 62 In general, the yields f or all three of the energy

grasses considered here will have higher yi elds than switchgrass, so from a crop yi eld perspective, the switchgrass anal ys is would be a conservative estimate when comparing against the energy cane, napier grass, and giant reed pathway s. Furthermore, EPA’s analy sis of switchgrass for the RFS2 rulemaking assumed a 2% annual increase in yi eld that would result in an average national yield of 6.6 dry tons per acre in 2022. EPA anticipates a similar yield improvement for energy cane, giant reed, and napiergrass due to their similarity as perennial grasses and their comparable status as energy crops in their earl y stages of development. Given this, our anal ysis assumes an average energy cane yi eld of 19 dry tons per acre in the southern United States by 2022; an average giant reed yield of approximately

18 dry tons per acre by

2022; and an average napiergrass yield of approximately 20 dry tons per acre by

2022 63 . The ethanol yi eld for all of the grasses is approximately the same so the higher crop yi elds for energy cane, napiergrass, and giant reed result directly in greater ethanol production compared to switchgrass per acre of production.

61 Lewandowski et al. 2003 62 Based on discussions with industry and USDA and Woodard and Sollenberger ( 2008 ) 63 These yields assume no significant adverse climate impacts on world agricultu ral yields over the analytical timeframe.*** E.O. 12866 Review

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Page **46** of **103** Based on these yi eld assumptions, in areas with suitable growing conditions, energy cane would require approximately 26% to 47% of the land area req uired by switchgrass to produce the same amount of biomass, giant reed would require less than 40% of the land area required b y switchgrass to produce the same amount of biomass, and napiergrass would require approximately

33% of the land area required b y switchgrass to produce the same amount of biomass due to their higher yi elds. Even without yield growth assumptions, their currently higher crop yi eld rates means the land use required for these crops would be lower than for switchgrass. Therefore less c rop area would be converted and displaced resulting in smaller land - use change GHG impacts than that assumed for switchgrass to produce the same amount of fuel. Furthermore, we believe energy cane and napiergrass will have a similar impact on international markets as assumed for switchgrass. L ike switchgrass, energy cane and napiergrass are not expected to be traded internationall y and their impacts on other crops are expected to be limited. Increased giant reed demand in the U.S. for biofuels is not expec ted to impact existing markets for giant reed, which are relativel y small niche markets (e.g., musical instrument reeds). b. L and Use In EPA’s RFS2 anal ys is, switchgrass plantings displaced primarily soy beans and wheat, and to a lesser extent hay, ri ce, sorghum, and cotton. Energy cane and napiergrass, with production focused in the southern United States, are likel y to be grown on land once used for pasture, rice, commercial sod, cotton or alfalfa, which would likely have less of an international ind irect impact than switchgrass because some of those commodities are not as widely traded as soy beans or wheat. Given that energy cane and napiergrass will likely displace the least productive land first, EPA concludes that the land use GHG impact for energ y cane and napiergrass per gallon should be no greater and likely less than estimated for switchgrass. Given*** E.O. 12866 Review

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Page **47** of **103** that giant reed is in early

stages of development as an energy crop, there is limited information on where it will be grown and what crops it will displace. We expect giant reed will displace the least productive land first and would likely have a similar or smaller indirect impact associated with crop displacement than what we assumed for switchgrass. Considering the total land potentially impact ed b y all the new feedstocks included in this rulemaking would not impact these conclusions (including the camelina discussed in the previous section and the three energy grasses considered here). As discussed previously , the camelina is expected to be gr own on fallow land in the Northwest, while energy grasses are expected to be grown mainly in the south on existing cropland or pastureland. In the switchgrass ethanol scenario done for the Renewable Fuel Standard final rulemaking, total cropland acres inc reases by

4.2 million acres, including an increase of 12.5 million acres of switchgrass, a decrease of 4.3 million acres of so yb eans, a 1.4 million acre decrease of wheat acres, a decrease of 1 million acres of hay , as well as decreases in a variet y of oth er crops. Given the higher yi elds of the energy

grasses considered here compared to switchgrass, there would be ample land available for production without having an y adverse impacts bey ond what was considered for switchgrass production. This analy sis to ok into account the economic conditions such as input costs and commodity

prices when evaluating the GHG and land use change impacts of switchgrass. One commenter stated that by assuming no land use change for giant reed, napiergrass, energy cane and oth er feedstocks, the Agency may have underestimated the increase in GHG emissions that could result from breaking new land. According to the commenter, EPA assumed that these feedstocks will be grown on the least productive land without citing an y specific models or studies.*** E.O. 12866 Review

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Page **48** of **103** The commenter appears to have misinterpreted EPA’s anal ys is. EPA did not assume these crops would be grown on fallow acres, nor did EPA assume that switchgrass would only be produced on the least productive lands. EPA assumed these cro ps would be grown on acres similar to switchgrass, and therefore applied the land use change impacts of switchgrass anal yz ed in the final RFS2 rule. In the final RFS2, EPA provided detailed information on the ty pes of crops (e.g., wheat) that would be dis placed b y dedicated switchgrass. This anal ys is took into account the economic conditions such as input costs and commodity prices when evaluating the GHG and land use change impacts of switchgrass. 64 c. Crop Inputs and Feedstock Transport EPA also assess ed the GHG impacts associated with planting, harvesting, and transporting energy

cane, giant reed, and napiergrass feedstocks in comparison to switchgrass. Table 6 shows the assumed 2022 commercial - scale production inputs for switchgrass (used in the RFS2 rulemaking analy sis), average energy cane, giant reed, and napiergrass production inputs (USDA projections and industry data) and the associated GHG emissions. Available data gathered by EPA suggest that energy cane requires on average less nitrogen, pho sphorous, potassium, and pesticide than switchgrass per dry ton of biomass, but more herbicide, lime, diesel, and electricity per unit of biomass. Giant reed may require on average less nitrogen and insecticide than switchgrass, but more phosphorous, pota ssium, herbicide, diesel, and electricity per unit of biomass. Napiergrass may require similar amounts of nitrogen fertilizer application as switchgrass, less phosphorous, potassium and insecticide than switchgrass, but more herbicide, lime, diesel and el ectricit y per unit of biomass.

64 See Final Regulatory Impact Analysis Chapter 2 , February 2010.*** E.O. 12866 Review

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Page **49** of **103** This assessment assumes production of all three new feedstocks uses electricity for irrigation given that growers will likely irrigate when possible to improve yields. Irrigation rates will vary depending on the timing and am ount of rainfall, but for the purpose of estimating GHG impacts of electricity

use for irrigation, we assumed a rate similar to what we assumed for other irrigated crops in the Southwest, South Central, and Southeast as shown in Table 6. Applying the G HG emission factors used in the RFS2 final rule, energy cane production results in slightly

higher GHG emissions relative to switchgrass production (an increase of approximately

4 kg CO 2 eq/mmbtu). Giant reed production results in slightly lower GHG emissi ons relative to switchgrass production (a decrease of approximately 2 kg CO 2 eq/mmbtu). Napiergrass production results in slightly higher GHG emissions relative to switchgrass production (an increase of approximately 6 kg CO 2 eq/mmbtu).*** E.O. 12866 Review

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Page **50** of **103 Table 6: Production Inputs and GHG Emissions for**  **Switchgrass, Energy Cane, Giant Reed, and Napiergrass (Biochemical Ethanol), 2022**  **Switchgrass Energy Cane**  **Giant Reed Napiergrass**  **Em ission**  **Factors Inputs** 

**(per dry ton of biomass)**  **Em issions** 

**(per mmBtu fuel)**  **Inputs**

**(per dry ton of biomass)**  **Em issions** 

**(per mmBtu fuel)**  **Inputs**

**(per dry ton of**  **biom ass)**  **Em issions** 

**(per mmBtu fuel)**  **Inputs**

**(per dry ton of biomass)**  **Em issions** 

**(per mmBtu fuel)**  Nitrogen Fertilizer 3,29 kgCO 2 e/ ton of nitrogen 15.2 lbs 3.6 kgCO 2 e 8.4 lbs 2 kgCO 2 e 5 lbs 1 kgCO 2 e 10 lbs 2.4 kgCO 2 e
N 2 O N/A N/A 7.6 kgCO 2 e N/A 5.9 kgCO 2 e N/A 4.8 kgCO 2 e N/A 7.6 kgCO 2 e Phosphorus Fertilizer 1,12 kgCO 2 e / ton of phosphate 6.1 lbs 0.5 kgCO 2 e 3.2 lbs 0.3 kgCO 2 e 7.4 lbs 0.6 kgCO 2 e 1.1 lbs 0.1 kgCO 2 e

Potassium Fertilizer 743 kgCO 2 e / ton of potassium 6.1 lbs 0.3 kgCO 2 e 4.2 lbs 0.2 kgCO 2 e 7.4 lbs 0.4 kgCO 2 e 4.0 lbs 0.2 kgCO 2 e

Herbicide 23,45 kgCO 2 e / tons of herbicide 0.002 lbs 0.003 kgCO 2 e 1.0 lbs 1.8 kgCO 2 e 0.02 lbs 0.03 kgCO 2 e 0.4 lbs 0.6 kgCO 2 e Insecticide (average across regions) 27,22 kgCO 2 e / tons of pesticide 0.025 lbs 0.04 kgCO 2 e 0 lbs 0 kgCO 2 e 0 lbs 0 kgCO 2 e 0 lbs 0 kgCO 2 e*** E.O. 12866 Review

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Page **51** of **103** Li me 408 kgCO 2 e / ton of lime 0 lbs 0 kgCO 2 e 104.7 lbs 3.1 kgCO 2 e 0 lbs 0 kgCO 2 e 100 lbs 2.9 kgCO 2 e
Diesel 97 kgCO 2 e / mmBtu diesel 0.4 gal 0.8 kgCO 2 e 1.3 gal 2. 4 kgCO 2 e 1.4 gal 2.5 kgCO 2 e 1.3 gal 2.2 kgCO 2 e Electricity (irrigation) 220 kgCO 2 e / mmBtu 0 kWh 0 kgCO 2 e 14.7 kWh 1.6 kgCO 2 e 10 kWh 1 kgCO 2 e 25 kWh 2.7 kgCO 2 e

**Total Emissions** 13 kgCO 2 e / mmBtu 17 kgCO 2 e / mmBtu 11 kgCO 2 e / mmBtu 19 kgCO 2 e / mmBtu Assumes 2022 switchgrass yield of 6.59 dry tons/acre and 92.3 gal ethanol/dry ton, 2022 energy cane yield of 19.1 dry tons/acre and 9 2 gal ethanol/dry ton, 2022 giant reed yield of 18 dry tons/acre and 92.3 gal ethanol/dry ton, and 2022 napiergrass yield of 20 dry tons/acre and 92.3 gal ethanol/dry ton. More detail on calculations and assumptions is included in materials to the docket.*** E.O. 12866 Review

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Page **52** of **103** GHG emissions associated with distributing energy cane, giant reed, and napiergrass feedstocks are expected to be s imilar to EPA’s estimates for switchgrass feedstock because they are all herbaceous agricultural crops requiring similar transport, loading, unloading, and storage regimes. Our anal ys is therefore assumes the same GHG impact for feedstock distribution as we assumed for switchgrass, although distributing energy cane, giant reed, and napiergrass feedstocks could be less GHG intensive because higher yi elds could translate to shorter overall hauling distances to storage or biofuel production facilities per ga llon or Btu of final fuel produced. 2. Fuel Production, Distribution, and Use Energy cane, giant reed, and napiergrass are suitable for the same conversion processes as other cellulosic feedstocks, such as switchgrass and corn stover. Currently available in formation on energy

cane, giant reed, and napiergrass composition shows that their hemicellulose, cellulose, and lignin content are comparable to other crops that qualify under the RFS regulations as feedstocks for the production of cellulosic biofuels. Ba sed on this similar composition as well as conversion yield data provided by industry , we applied the same production processes that were modeled for switchgrass in the final RFS2 rule (biochemical ethanol, thermochemical ethanol, and Fischer - Tropsch (F - T) diesel 65 ) to energy cane, giant reed, and napiergrass. We assumed the GHG emissions associated with producing biofuels from energy cane, giant reed, and napiergrass are similar to what we estimated for switchgrass and other cellulosic feedstocks. EPA also assumes that the distribution and use of biofuel made from energy cane, giant reed, and napiergrass will not differ significantly from similar biofuel produced from other cellulosic sources. As was done for the switchgrass case, this anal ys is

65 The F - T diesel process modeled applies to cellulosic diesel, jet fuel, heating oil, and naphtha.*** E.O. 12866 Review

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Page **53** of **103** assumes ener gy

grasses grown in the United States for production purposes. If crops were grown internationally , used for biofuel production, and the fuel was shipped to the U.S., shipping the finished fuel to the U.S. could increase transport emissions. However, con sidering the increased transport emissions associated with sugarcane ethanol distribution to the U.S., this would at most add 1 - 2% to the overall lifecycle GHG impacts of the energy grasses. 3. Summary Based on our comparison of switchgrass and the three feedstocks considered here, EPA believes that cellulosic biofuel produced from the cellulose, hemicellulose and lignin portions of energy cane, giant reed, and napiergrass has similar or better lifecycle GHG impacts than biofuel produced from the cellulosic biomass from switchgrass. Our anal ys is suggests that the three feedstocks considered have GHG impacts associated with growing and harvesting the feedstock that are simi lar to switchgrass. Emissions from growing and harvesting energy cane are approximately

4 kg CO2eq/mmBtu higher than switchgrass, emissions from growing and harvesting giant reed are approximately 2 kg CO2eq/mmBtu lower than switchgrass, and emissions fro m growing and harvesting napiergrass are approximately 6 kg CO2eq/mmBtu higher than switchgrass. These are small changes in the overall lifecy cle, representing at most a 6% change in the energy

grass lifecycle impacts in comparison to the petroleum fuel b aseline. Furthermore, the three feedstocks considered are expected to have similar or lower GHG emissions than switchgrass associated with other components of the biofuel lifecycle. Under a h ypothetical worst case, if the calculated increases in growing and harvesting the new feedstocks are incorporated into the lifecycle GHG emissions calculated for switchgrass, and other lifecy cle components are projected as having similar GHG impac ts to switchgrass (including land use change associated with switchgrass production), the overall lifecycle GHG*** E.O. 12866 Review

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Page **54** of **103** reductions for biofuel produced from energy cane, giant reed, and napiergrass still meet the 60% reduction threshold for cellulosic biofuel, the lowest being a 64% reduction (for napiergrass diesel produced through gasification and upgrading) compared to the petroleum baseline. We believe these are conservative estimates, as use of energy cane, giant reed, or napiergrass as a feedstock is expected to have smaller land - use GHG impacts than switchgrass, due to their higher yi elds. The docket for this rule provides additional detail on the analysis of energy cane, giant reed, and napiergrass as biofuel feedstocks. Although this anal ys is assumes energy cane, giant reed, and napiergrass biofuels produced for sale and use in the United States will most likely come from domestically

produced feedstock, we also intend for the approved pathway s to cover energy cane, giant reed, and napiergrass from other countries. We do not expect incidental amounts of biofuels from feedstocks produced in other nations to impact our average GHG emissions . Moreover, those countries most likely

to be exporting energy

cane, giant reed, or napiergrass or biofuels produced fro m these feedstocks are likely to be major producers which t ypically use similar cultivars and farming techniques. Therefore, GHG emissions from producing biofuels with energy cane, giant reed, or napiergrass grown in other countries should be similar to th e GHG emissions we estimated for U.S. energy cane, giant reed, or napiergrass, though they could be slightly

(and insignificantl y) higher or lower. For example, the renewable biomass provisions under the Energy Independence and Security Act would prohibit direct conversion of previously unfarmed land in other countries into cropland for energy grass - based renewable fuel production. Furthermore, an y energy

grass production on existing cropland internationally would not be expected to have land use impac ts bey ond what was considered for switchgrass production. Even if there were unexpected larger differences, EPA believes the small amounts of feedstock*** E.O. 12866 Review

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Page **55** of **103** or fuel potentiall y coming from other countries will not impact our threshold anal ys is. Based on our a ssessment of switchgrass in the RFS2 final rule and this comparison of GHG emissions from switchgrass and energy cane, giant reed, and napiergrass, we do not expect variations to be large enough to bring the overall GHG impact of fuel made from energy cane , giant reed or napier grass to come close to the 60% threshold for cellulosic biofuel. Therefore, EPA is including cellulosic biofuel produced from the cellulose, hemicelluloses and lignin portions of energy

cane, giant reed, and napiergrass under the sam e pathway s for which cellulosic biomass from switchgrass qualifies under the RFS2 final rule. **D. Lifecycle Greenhouse Gas Emissions Analysis for Certain Renewable Gasoline and**  **Renewable Gasoline Blendstocks Pathways** In this rule, EPA is also adding pathway s to Table 1 to § 80.1426 for the production of renewable gasoline and renewable gasoline blendstock using specified feedstocks, fuel production processes, and process energy sources. The feedstocks we considered are generall y considered waste feedstocks such as crop residues or cellulosic components of separated yard waste. These feedstocks have been identified b y the industry as the most likely

feedstocks for use in making renewable gasoline or renewable gasoline blendstock in the near term due to their availability

and low cost. Additionally , these feedstocks have alread y been anal yz ed b y EPA as part of the RFS2 rulemaking for the production of other fuel t ypes. Consequently, no new modeling is required and we rel y on earlier assessments of feedstock production and distribution for assessing the likel y lifecycle impact on renewable gasoline and renewable gasoline blendstock. We have also relied on the petroleum gasoline baseline assessment from the RFS2 rule for estimating the fuel distribution and us e GHG emissions impacts for renewable gasoline and renewable gasoline blendstock. Consequently, the only new anal ys is required is of the*** E.O. 12866 Review

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Page **56** of **103** technologies for turning the feedstock into renewable gasoline and renewable gasoline blendstock. 1. Feedstock productio n and distribution EPA has evaluated renewable gasoline and renewable gasoline blendstock pathway s that utilize cellulosic feedstocks currentl y included in Table 1 to § 80.1426 of the regulations. The following feedstocks were evaluated:
 Cellulosic bioma ss from crop residue, slash, pre - commercial thinnings and tree residue, annual cover crops;
 Cellulosic components of separated yard waste;
 Cellulosic components of separated food waste; and
 Cellulosic components of separated MSW The FASOM and FAPRI models were used to analy ze the GHG impacts of the feedstock production portion of a fuel’s lifecy cle. In the RFS2 rulemaking, FASOM and FAPRI modeling was performed to analyze the emissions impact of using corn stover as a biofuel feedstock and this modeling wa s extended to some additional feedstock sources considered similar to corn stover. This approach was used for crop residues, slash, pre - commercial thinnings, tree residue and cellulosic components of separated yard, food, and MSW. These feedstocks are al l excess materials and thus, like corn stover, were determined to have little or no land use change GHG impacts. Their GHG emission impacts are mainl y associated with collection, transport, and processing into biofuel. See the RFS2 rulemaking preamble fo r further discussion. We used the results of the corn stover modeling in this anal ys is to estimate the upper bound of agricultural sector impacts from the production of the various cellulosic feedstocks noted above. The agriculture sector modeling resu lts for corn stover represents all of the direct and*** E.O. 12866 Review

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Page **57** of **103** significant indirect emissions in the agriculture sector (feedstock production emissions) for a certain quantit y of corn stover produced. For the RFS2 rulemaking, this was roughly 62 million dry tons of corn stover to produce 5.7 billion gallons of ethanol assuming biochemical fermentation to ethanol processing. We have calculated GHG emissions from feedstock production for that amount of corn stover. The GHG emissions were then divided by the total he ating value of the fuel to get feedstock production emissions per mmBtu of fuel. In addition to the biochemical ethanol process, a similar anal ys is was completed for thermochemical ethanol and F - T diesel pathway s as part of the RFS2 rulemaking. In this rulemaking we are anal yz ing renewable gasoline and renewable gasoline blendstock produced from corn stover (and, b y extension, other waste feedstocks). The number of gallons of fuel produced from a ton of corn stover (modeled process yi elds) is specific t o the process used to produce renewable fuel. EPA has adjusted the results of the earlier corn stover modeling to reflect the different process yields and heating value of renewable gasoline or renewable gasoline blendstock product. The results of thi s calculation are shown below in Table 7. We based our process yi elds and heating values for renewable gasoline and renewable gasoline blendstock on several process technologies representative of technologies anticipated to be used in producing these fue ls. As discussed later in this section, there are four main t ypes of fuel production technologies available for producing renewable gasoline. These four processes can be characterized as (1) thermochemical gasification, (2) catal yt ic py roly sis and upgrad ing to renewable gasoline or renewable gasoline blendstock (“catal yt ic p yrol ys is and upgrading”), (3) biochemical fermentation with upgrading to renewable gasoline or renewable gasoline blendstock via carbox yl ic acid (“fermentation and upgrading”), and (4) direct biochemical*** E.O. 12866 Review

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Page **58** of **103** fermentation to renewable gasoline and renewable gasoline blendstock (“direct fermentation”). The thermochemical gasification process was modeled as part of the RFS2 final rule, included as producing naptha via the F - T process. Our an al ys is of the catal yt ic p yrol ys is process was based on the modeling work completed by the National Renewable Energy L aboratory

(NREL) for this rule for a process to make renewable gasoline blendstock. 66 The fermentation and upgrading process was modeled ba sed on confidential business information (CBI) from industry for a unique process which uses biochemical conversion of cellulose to renewable gasoline via a carbox yl ic acid route. In addition, we have qualitatively assessed the direct fermentation to rene wable gasoline process based on similarities to the biochemical ethanol process already anal yz ed as part of the RFS2 rulemaking. The fuel production section below provides further discussion on extending the GHG emissions results of the biochemical ethano l fermentation process to a biochemical renewable gasoline or renewable gasoline blendstock fermentation process. In some cases, the available data sources included process yi elds for renewable gasoline or renewable gasoline blendstock produced from wood chips rather than corn stover which was specificall y modeled as a feedstock in the RFS2 final rule. We believe that the process yi elds are not significantl y impacted by the source of cellulosic material whether the cellulosic material comes from residue s uch as corn stover or wood material such as from tree residues. We made the simplifying assumption that one dry ton of wood feedstock produces the same volume of renewable gasoline or renewable gasoline blendstock as one dry ton of corn stover. We believ e this is reasonable considering that the RFS2 rulemaking anal ys es for biochemical ethanol and thermochemical F - T diesel processes showed limited variation in process yields between

66 Kinchin, Christopher. Catalytic Fast Pyrolys is with Upgrading to Gasoline and Diesel Blendstocks. National Renewable Energy Laboratory (NREL). 2011.*** E.O. 12866 Review

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Page **59** of **103** different feedstocks for a given process technology. 67 Inaddition, sin ce the renewable gasoline and renewable gasoline blendstock pathway s include feedstocks that were already considered as part of the RFS2 final rule, the existing feedstock lifecy cle GHG impacts for distribution of corn stover were also applied to this anal ys is. 68 Feedstock production emissions are shown in Table 7 below for corn stover. Corn stover feedstock production emissions are mainly a result of corn stover removal increasing the profitability

of corn production (resulting in shifts in cropland and thus slight emission impacts) and also the need for additional fertilizer inputs to replace the nutrients lost when corn stover is removed. However, corn stover removal also has an emissions benefit as it encourages the use of no - till farming which results in the lowering of domestic land use change emissions. This change to no - till farming results in a negative value for domestic land use change emission impacts (see also Table 13 below). For other waste feedstocks (e.g., tree residues and cellulosic components of separate yard, food, and MSW), the feedstock production emissions are even lower than the values shown for corn stover since the use of such feedstocks does not require land use changes or additional agricultural inputs. Therefore, we conclude that if the use of corn stover as a feedstock in the production of renewable gasoline and renewable gasoline blendstock yi elds lifecycle GHG emissions results for the resulting fuel that qualify it as cellulosic biofuel (i.e., it has at least a 60% lifecycle GHG reduction as compared to conventional fuel), then the use of other waste feedstocks with little or no land use change emissions will also result in renewab le gasoline or renewable gasoline blendstock that qualifies as cellulosic biofuel.

67 Aden, Andy. Feedstock Considerations and Impacts on Biorefining. National Renewable Energy Laboratory (NREL). December 2009. 68 Results for feedstoc k distribution are aggregated along with fuel distribution and are reported in a later section, see conclusion section.*** E.O. 12866 Review

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Page **60** of **103** One commenter stated that the Agency assumed that using the corn stover for biofuels production would result in additional no - till farming without an y evidence that the st over would actuall y be removed from no - tilled acres. This commenter feels that with recent increased profitability

from corn production, farmers may actually increase tillage to reap high corn prices. This commenter urged the EPA to consider changes to s oil carbon from the removal of corn stover as they

may have an impact on the GHG score of this new biofuel pathway . This commenter further urged the Agency to not simply

assume that additional no - till practices will be adopted with residue extraction. The anal ys is the EPA conducted to evaluate the GHG impacts associated with corn stover removal as part of the RFS2 final rule did not assume that the corn stover had to be removed from no - till corn production. The models used to evaluate the impacts of st over removal included the option for farmers to switch to no - till practices and therefore have the option for more stover removal. As the demand for stover increased in the case where stover is used for biofuel production, the relative costs associated wi th no - till factored in the impact of lost corn yi eld as well as higher yi eld for corn stover. The model optimized the rate of returns for the farmers such that no - till practices were applied until the increased returns for greater stover removal on no - til l acres were balanced by lost profits from lower corn yi elds. Therefore, the comment that we assumed stover had to come from no - till acres or that the economics would drive more intensive tillage practices is not accurate, as described in more detail in the RFS2 final rule. Furthermore, there is an annual soil carbon penalty applied to crops with residue removal in our models. Thus, as one shifts from conventional corn to residue corn, an annual soil carbon penalty factor is applied. If residue removal is combined with switching to conservation tillage or*** E.O. 12866 Review

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Page **61** of **103** no - till, then the net soil C effect would be the sum of the till change effect and the "crop change" effect. For the RFS2 rulemaking, EPA conducted an in - depth literature review of corn stover removal practices and consulted with numerous experts in the field. In the FRM, EPA recognized that sustainable stover removal practices vary significantl y based on local differences in soil and erosion conditions, soil ty pe, landscape (slope), tillage practices , crop rotation managements, and the use of cover crops. EPA, in consultation with USDA, based its impacts on corn stover from reduced till and no till acres based on agronomical practices, nutrient requirements, and erosion considerations. EPA does not b elieve that the commentor has provided new information that would substantially change our anal ys is of the GHG emissions associated with corn stover. However, EPA will continue to monitor actual practices and based on new data will consider reviewing and revising the methodology and assumptions associated with calculating the GHG emissions from all renewable fuel feedstocks.*** E.O. 12866 Review

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Page **62** of **103 Table 7:**  **Feedstock Production Emissions for Renewable Gasoline and Renewable Gasoline Blendstock Pathways Using Corn Stover**  **Fee dstock Production**  **Emission Sources Catalytic Pyrolysis and**  **Upgrading to Renewable Gasoline**  **and Renewable Gasoline Blendstock (g**  **CO 2**  **- eq./mmBtu)**  **Biochem ical**  **Ferm entation and**  **Upgrading to Renewable Gasoline**  **and Renewable Gasoline Blendstock**  **via Carboxylic Aci d**  **(g CO 2**  **- eq./mmBtu)**  **Direct Biochem ical** 

**Ferm entation**  **Process to Renewable Gasoline**  **and Renewable Gasoline Blendstock**  **(g CO 2**  **- eq./mmBtu)**  Dom estic Livestock 7,648 6,770 ~ 9,086 Dom estic Farm Inputs and Fertilizer N 2 O 1,397 1,237 ~ 1,660 Dom estic Rice Methane 366 324 ~ 434 Dom estic Land Use Change - 9,124 - 8,076 ~ - 10,820 International Livestock 0 0 0 International Farm Inputs and Fertilizer N 2 O 0 0 0 International Rice Methane 0 0 0 International Land Use Change 0 0 0 **Total Feedstock Production**  **Emissions: 287**  **254 ~ 361**  The results in Table 7 differ for the different pathway s considered because of the different amounts of corn stover used to produce the same amount of fuel in each case. Table 7*** E.O. 12866 Review

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Page **63** of **103** only considers the feedstock production impacts as sociated with the renewable gasoline or renewable gasoline blendstocks pathway s, other aspects of the lifecycle are discussed in the following sections. 2. Fuel distribution A petroleum gasoline baseline was developed as part of the RFS2 final rule which included estimates for fuel distribution emissions. Since renewable gasoline and renewable gasoline blendstocks when blended into gasoline are similar to petroleum gasoline, it is reasonable to assume similar fuel distribution emissions. Therefore, the existing fuel distribution lifecycle GHG impacts of the petroleum gasoline baseline from the RFS2 final rule were applied to this analy sis. 3. Use of the fuel A petroleum gasoli ne baseline was developed as part of the RFS2 final rule which estimated the tailpipe emissions from fuel combustion. Since renewable gasoline and renewable gasoline blendstock are similar to petroleum gasoline , the non - CO 2 combustion emissions calculated as part of the RFS2 final rule for petroleum gasoline were applied to our anal ys is of the renewable gasoline and renewable gasoline blendstock pathway s. Only non - CO 2 emissions were included since carbon fluxes from land use change are accounted for as part of the biomass feedstock production. 4. Fuel production In the RFS2 rulemaking, EPA anal yz ed several of the main cellulosic biofuel pathway s: a biochemical fermentation process to ethanol and two thermochemical gasification processes, one producing m ixed alcohols (primarily ethanol) and the other one producing mixed hydrocarbons (primarily diesel fuel). These pathway s all exceeded the 60% lifecycle GHG threshold*** E.O. 12866 Review

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Page **64** of **103** requirements for cellulosic biofuel using the specified feedstocks. Refer to the preambl e and regulatory

impact anal ys is (RIA) from the final RFS2 rule for more details. From these anal ys es, it was determined that ethanol and diesel fuel produced from the specified cellulosic feedstocks and processes would be eligible for cellulosic and advanced biofuel RINs. The thermochemical gasification process to diesel fuel (via F - T s ynthesis) also produces a smaller portion of renewable gasoline blendstock. In the final RFS2 rule, naphtha produced with specified cellulosic feedstocks b y a F - T process was included as exceeding the 60% lifecycle GHG threshold, with an applicable D - Code of 3, in Table 1 to §80.1426. In this rule, we are changing the reference to F - T as the process technology to the more correct reference as gasification technology

since F - T reactions are only part of the process technology . Since the final RFS2 rule was released, EPA has received several petitions and inquiries that suggest that renewable gasoline or renewable gasoline blendstock produced using processes other than the F - T process could also qualify for a similar D - Code of 3 . 69 , For the reasons described below, we have decided to authorize the generation of RINs with a D code of 3 for renewable gasoline and renewable gasoline blendstock produced using specified cellulos ic feedstocks for the processes considered here. Several routes have been identified as available for the production of renewable gasoline and renewable gasoline blendstock from renewable biomass. These include catal yt ic p yrol ys is and upgrading to renewable gasoline or renewable gasoline blendstock (“cataly tic py roly sis and upgrading”), biochemical fermentation with upgrading to renewable gasoline or renewable gasoline blendstock via carbox yl ic acid (“fermentation and upgrading”), and direct biochemical f ermentation to renewable gasoline and renewable gasoline blendstock (“direct 69 See http://www.epa.gov/otaq/fuels/renewablefuels/compliancehelp/rfs2 - lca - pathways.htm for list of petitions received by EPA.*** E.O. 12866 Review

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Page **65** of **103** fermentation”). 70 , 71 Similar to how we anal yz ed several of the main routes for cellulosic ethanol and cellulosic diesel for the final RFS2 rule, we have chosen to anal yz e the main renewable gasoline and renewable gasoline blendstock pathway s in order to estimate the potential GHG reduction profile for renewable gasoline and renewable gasoline blendstock across a range of other production technologies for which we are confident will have at least as great of GHG emission reductions as those specifically anal yz ed. a. Catalytic Pyrolysis with Upgrading to Renewable Gasoline and Renewable Gasoline Blendstock The first production process we investigated for this rule is a catal yt ic fas t py roly sis route to bio - oils with upgrading to a renewable gasoline or a renewable gasoline blendstock. We utilized process modeling results from the National Renewable Energy L aboratory

(NREL). In formation provided b y industry and claimed as CBI are ba sed on similar processing methods and suggest similar results than those reported b y NREL . Details on the NRELmodeling are described further in a technical report available through the docket. 72 Catalytic py rol ys is involves the rapid heating of biomass t o about 500°C at slightly above atmospheric pressure. The rapid heating thermally decomposes biomass, converting it into py rol ys is vapor, which is condensed into a liquid bio - oil. The liquid bio - oil can then be upgraded using conventional hydroprocessing technology and further separated into renewable gasoline, renewable gasoline
70 Regalbuto, John. “An NSF perspective on next generation hydrocarbon biorefineries,” Computers and Chemical Engineering 34 (2010) 13 93 - 1396. February 2010. 71 Serrano - Ruiz, J., Dumesic, James. “Catalytic routes for the conversion of biomass into liquid hydrocarbon transportation fuels,” Energy Environmental Science (2011) 4, 83 - 99. 72 Kinchin, Christopher. Catalytic Fast Pyrolysis with Upgrading to Gasoline and Diesel Blendstocks. National Renewable Energy Laboratory (NREL). 2011.*** E.O. 12866 Review

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Page **66** of **103** blendstock and renewable diesel streams (cellulosic diesel from catal yt ic py roly sis is already included as an acceptable pathway in the RFS2 program). Some industry sources also expect to produce smaller fractions of heating oil in addition to gasoline and diesel blendstocks. Excess electricit y from the process is also accounted for in our modeling as a co - product credit in which any excess displaces U.S. average grid electricit y. Excess electricity is generated from the use of co - product coke/char and product gases and is available because internal electricity demands are fully met. The estimated energy inputs and electricity

credits shown in Table 8, below, utilize the data p rovided b y the NRELprocess modeling. However, Industry sources also identified potential areas for improvements in energy use, such as the use of biomass fired dry ers instead of natural gas fired dry ers for drying incoming wet feedstocks and increased tur bine efficiencies for electricit y production which may result in lower energy consumption than estimated by NREL and thus improve GHG performance compared to our estimates here.

**Table 8: 2022 Energy Use at Cellulosic Biofuel Facilities (Btu/gal)** Technology Biomass Use Natural Gas Use Purchased Electricity Sold

Electricity Catalytic Pyrolysis to Renewable Gasoline or Renewable Gasoline Blendstock 136,000 51,000 0 - 2,000 The emissions from energy inputs were calculated by multiplying the amount of energy by emission factors for fuel production and combustion, based on the same method and factors used in the RFS2 final rulemaking. The emission factors for the different fue l ty pes are from*** E.O. 12866 Review

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Page **67** of **103** GREET and were based on assumed carbon contents of the different process fuels. The emissions from producing electricit y in the U.S. were also taken from GREET and represent average U.S. grid electricity production emissions. The major fa ctors influencing the emissions from the fuel production stage of the catal yt ic p yrol ys is pathway are the use of natural gas (mainly due to hydrogen production for hydroprocessing) and the co - products available for additional heat and power generation. 73 S ee Table 9 for a summary

of emissions from fuel production. **Table 9: Fuel Production Emissions for Catalytic Pyrolysis and Upgrading to Renewable**

**Gasoline or Renewable Gasoline Blendstock Using Corn Stover Lifecycle Stage**  **Catalytic Pyrolysis to Renewabl**  **e Gasoline or Renewable Gasoline**  **Blendstock (g CO 2**  **- eq./mmBtu)**  On - Site & Upstream Emissions (Natural Gas & Biomass*) 31,000 Electricity Co - Product Credit - 3,000 **Total Fuel Production Emissions: 28,000**  *Only non - CO 2 com

bustion emissions from biomass

73 A steam methane reformer (SMR) is used to produce the hydrogen necessary for hydroprocessing. In the U.S. over 95% of hydrogen is currently produced via st eam reforming (DOE, 2002 “A National Vision of America’s Transition to a Hydrogen Economy to 2030 and Beyond”). Other alternatives are available, such as renewable or nuclear resources used to extract hydrogen from water or the use of biomass to produces hydrogen. These alternative methods, however, are currently not as efficient or cost effective as the use of fossil fuels and therefore we conservatively estimate emissions from hydrogen production using the more commonly used SMR technology.*** E.O. 12866 Review

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Page **68** of **103** b. Fermentation and Upgrading to Renewable Gasoline and Renewable Gasoline Blendstock The second production process we investigated is a biochemical fermentation process to intermediate carbox yl ic acids with catal yt ic upgrading to renewable gasoline or ren ewable gasoline blendstock. This process involves the fermentation of biomass using a mixed - culture of microorganisms that produce a variet y of carbox ylic acids. If the feedstock has high lignin content, then the biomass is pretreated to enhance digestib ility . The acids are then neutralized to carbox yl ate salts and further converted to ketones and alcohols for refining into gasoline, diesel, and jet fuel. The process requires the use of natural gas and h ydrogen inputs. 74 No purchased electricit y is required as lignin is projected to be used to meet all facilit y demands as well as provide excess electricity to the grid. EPA used the estimated energy and material inputs along with emission factors to estimate the GHG emissions from this process. The ene rgy inputs and electricit y credits are shown in Table 10, below. These inputs are based on Confidential Business Information (CBI), rounded to the nearest 1000 units, provided by industry as part of the petition process for new fuel pathway s.

74 Hydrogen e missions are modeled as natural gas and electricity demands.*** E.O. 12866 Review

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Page **69** of **103 Table 10:**  **2022 Energy Use at Cellulosic Facility (Btu/gal)**

Technology Biomass Use Natural

Gas Use Purchased Electricity Sold

Electricity Biochemical Fermentation to Renewable Gasoline or Renewable Gasoline Blendstock via Carboxylic Acid 49,000 59,000 0 - 2,000 The process also uses a small amount of buffer material as neutralizer which was not included in the GHG lifecy cle results due to its likely negligible emissions impact. The GHG emissions estimates from the fuel production stage are seen in Table 11. **T able 11: Fuel Production Emissions for Biochemical Fermentation to Renewable Gasoline**  **or Renewable Gasoline Blendstock via Carboxylic Acid Using Corn Stover Lifecycle Stage**  **GHG Emissions (g CO 2**  **- eq./mmBtu)**  On - Site & Upstream Emissions (Natural Gas & Biom ass* ) 33,000 Electricity Co - Product Credit - 3,000 **Total Fuel Production Emissions: 30,000**  *Only non - CO 2 combustion emissions from biomass c. Direct Fermentation to Renewable Gasoline and Renewable Gasoline Blendstock The third production process we investigated involves the use of microorganisms to ferment sugars h ydrol yz ed from cellulose directly into hydrocarbons which could be either a*** E.O. 12866 Review

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Page **70** of **103** complete fuel as renewable gasoline or a renewable gasoline blendstock. The proc ess is similar to the biochemical fermentation to ethanol pathway modeled for the final RFS2 rule with the major difference being the end fuel product, hydrocarbons instead of ethanol. Researchers believe that this new technology could achieve improvement s over classical fermentation approaches because h ydrocarbons separate spontaneously from the aqueous phase, thereby avoiding poisoning of microbes b y the accumulated products and facilitating separation/collection of alkanes from the reaction medium. 75 In other words, some energy savings may

result because fewer separation unit operations could be required for separating the final product from other reactants and there may be better conversion yields as the fermentation microorganisms are not poisoned when interacting with accumulated products. We also expect that the lignin/by

product portions of the biomass from the fermentation to hydrocarbon process could be converted into heat and electricit y for internal demands or for export, similar to the biochemic al fermentation to ethanol pathway . Therefore, we can conservatively extend our final RFS2 rule biochemical fermentation to ethanol process results to a similar (but likely slightly improved) process that instead produces hydrocarbons. Since the final RFS2 rule cellulosic ethanol GHG results were well above the 60% GHG reduction threshold for cellulosic biofuels, if actual emissions from other necessary changes to the direct biochemical fermentation to hydrocarbons process represent some small increment in GHG emissions, the pathway would still likely

meet the threshold. Table 12 is our qualitative assessment of the potential emissions reductions from a process using biochemical fermentation to cellulosic hydrocarbons assuming similarities to the biochem ical fermentation to cellulosic ethanol route from the final RFS2 rule. 75 Serrano - Ruiz, J., Dumesic, James. “Catalytic routes for the conversion of biomass into liquid hydrocarbon transportation fuels,” Energy Environmental Science (2011) 4, 83 - 99.*** E.O. 12866 Review

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Page **71** of **103 Table 12: Fuel Production Emissions for RFS2 Cellulosic Biochemical Ethanol Compared**  **to Direct Biochemical Fermentation to Renewable Gasoline or Renewable Gasoline Blendstock Using C**  **orn Stover Lifecycle Stage**  **RFS2 Cellulosic Biochem**  **ical Ethanol Emissions**  **(g CO 2**  **- eq./mmBtu)**  **Direct Biochem ical**  **Ferm entation to Renewable**  **Gasoline and Renewable Gasoline Blendstock**  **Emissions (g CO 2**  **- eq./mmBtu)**  On - Site Emissions & Upstream (biomass) 3,000 < or = 3,000 Electricity Co - Product Credit - 35,000 = - 35,000 **Total Fuel Production Emissions 76**  **: -**  **33,000 < or =**  **- 33,000**  Table 13 below breaks down by stage the lifecycle GHG emissions for the renewable gasoline and renewable gasoline blendstock pathway s using corn stover and the 2005 petroleum baseline. The table demonstrates the contribution of each stage in the fuel pathway and its relative significance in terms of GHG emissions. These results are also presented in graphical form in a supplem ental memorandum to the docket. 77 As noted above, these anal ys es assume natural gas as the process energy when needed; using biogas or biomass as process energy would result in an even better lifecycle GHG impact.
76 Numbers do not a dd up due to rounding. 77 Memorandum to the Air and Radiation Docket EPA - HQ- OAR - 2011 - 0542 “Supplemental Information for Renewable Gasoline and Renewable Gasoline Blendstock Pathways Under the Renewable Fuel Standard (RFS2) Program”*** E.O. 12866 Review

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Page **72** of **103***** E.O. 12866 Review

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Page **73** of **103 Table 13: Lifecycle GHG Emissions for Renewable Gasoline and Renewable Gasoline**  **Blendstock Pathways Using Corn Stover, 2022 (kg CO2 -**  **eq./mmBtu)**

Fuel T ype Catalytic

Py rolysis and Upgrade to Renewable Gasoline and Renewable Gasoline Blendstock Biochemical

Fe rm entation to Renewable Gasoline and Renewable Gasoline Blendstock via Carboxylic Acid Direct Biochemical

Ferm entation to Renewable Gasoline and Rene wable Gasoline Blendstock 2005 Gasoline Baseline Net Domestic Agriculture (w/o land use change) 9 8 ~ 11 Net International Agriculture (w/o land use change) Dom estic Land Use Change - 9 - 8 ~ - 11 International Land Use Change, Fuel Production 28 30 < or = - 33 19 Fuel and Feedstock Transport 2 2 ~ 2 * Tailpipe Emissions 2 2 ~ 1 79 **Total Emissions 32**  **34 < or =**  **- 29**  **98 % Change from**  **Baseline -**  **67% -**  **65% -**  **129%***** E.O. 12866 Review

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Page **74** of **103** *Emissions included in fuel production stage. d. Extension of Modeling Results to Other Production Processes Producing Renewable Gasoline or Renewable Gasoline Blendstock In the RFS2 rulemaking, we modeled the GHG emissions results from the biochemical fermentation process to ethanol, thermochemical gasification processes to mixed alcohols (primarily ethanol) and mixed hydrocarbons (primarily diesel fuel). We extended thes e modeled process results to apply

when the biofuel was produced from “any ” process. We determined that since we modeled multiple cellulosic biofuel processes and all were shown to exceed the 60% lifecycle GHG threshold requirements for cellulosic biofuel using the specified feedstocks its was reasonable to extend to other processes that might develop as these would likely represent improvements over existing processes as the industry works to improve the economics of cellulosic biofuel production by , for example, reducing energy consumption and improving process yi elds. Similarly, this rule assesses multiple processes for the production of renewable gasoline and renewable gasoline blendstocks and all were shown to exceed the 60% lifecycle GHG threshold re quirements for cellulosic biofuel using specified feedstocks. As was the case in our earlier rulemaking, a couple reasons in particular support extending our modeling results to other production process producing renewable gasoline or renewable gasoline blendstock from cellulosic feedstock. Under this rule we anal yz ed the core technologies most likely

available through 2022 for production of renewable gasoline and renewable gasoline blendstock routes from cellulosic feedstock as shown in literature. 78 , 79 The

78 Regalbuto, John. “An NS F perspective on next generation hydrocarbon biorefineries,” Computers and Chemical Engineering 34 (2010) 1393 - 1396. February 2010.*** E.O. 12866 Review

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Page **75** of **103** two primary

routes for renewable gasoline and renewable gasoline blendstock production from cellulosic feedstock can be classified as either thermochemical or biological. Each of these two major categories has two subcategories. The processes under the thermochemical category include:
 Py rol ys is and Upgrading

– in which cellulosic biomass is decomposed with temperature to bio - oils and requires further catal yt ic processing to produce a finished fuel
 Gasification

– in which cellulosic biomass is decomposed to sy ngas with further catal yt ic processing of methanol to gasoline or through Fischer - Tropsch (F - T) sy nthesis to gasoline The processes under the biochemical category include:
 Direct fermentation

– requires the release of sugars from biomass and the use of “sy nthetic biology” in which microorganisms are altered to ferment sugars straight into hydrocarbons instead of alcohols
 Fermentation w/ catal yt ic upgrading

– requires the release of sugars from biomass and aqueous - or liquid - phase processing of su gars or intermediate fermentation products into hydrocarbons using solid catal ys ts, As part of the modeling effort here, as well as for the RFS2 final rule, we have considered the lifecycle GHG impacts of the four possible production technologies mentione d above. The p yr oly sis and upgrading, direct fermentation, and fermentation with catal yt ic upgrading are considered in this rule and the gasification route was already included in the RFS2 final rule. In all cases, the processes that we have considered m eet the 60% lifecycle GHG reduction required for cellulosic biofuels. Furthermore, we believe that the results from our 79 Serrano - Ruiz, J., Dumesic, James. “Catalytic routes for the conversion of biomass into liquid hydrocarbon transportation f uels,” Energy Environmental Science (2011) 4, 83 - 99.*** E.O. 12866 Review

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Page **76** of **103** modeling would cover all the likely variations within these potential routes for producing renewable gasoline and renewable gasoline bl endstock which also use natural gas, biogas or biomass for process energy and that all such production variations would also meet the 60% lifecycle threshold. 80 The main reason for this is that we believe that our energy input assumptions are reasonable at this time but probably in some cases conservative for commercial scale cellulosic facilities. The cellulosic industry is in its earl y stages of development and many of the estimates of process technology

GHG impacts is based on pre - commercial scale as sessments and demonstration programs. Commercial scale cellulosic facilities will continue to make efficiency improvements over time to maximize their fuel products/co - products and minimize wastes. For cellulosic facilities, such improvements include inc reasing conversion yi elds and fully utilizing the biomass input for valuable products. An example of increasing the amount of biomass utilized is the combustion of undigested or unconverted biomass for heat and power. The three routes that we anal yzed f or the production of renewable gasoline and renewable gasoline blendstock in today ’s rule assume an electricit y production credit from the economically - driven use of lignin or waste by products; we also ran a sensitivity

case where no electricity credit was given. We found that all of the routes anal yz ed would still pass the GHG threshold without an electricit y credit, providing confidence that over the range of technology options, these process technologies will surely allow the cellulosic biofuel produced to exceed the threshold for cellulosic biouel GHG performance. Without excess electricity production the catal yt ic py rol ys is pathway

results in a 65% lifecycle 80 One commenter wanted clarification of the term “process energy” as it applies to the production of renewable gasoline. The EPA did not intend for the term, “process energy”, to include other energy s ources, such as electricity to provide pow er for ancillary processes, such as lights, small pumps, computers, and other small support equipment .*** E.O. 12866 Review

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Page **77** of **103** GHG reduction, the biochemical fermentation via carbox yl ic acid pathway results in a 62% lifec ycle GHG reduction, and the direct biochemical fermentation pathway results in a 93% reduction in lifecycle GHG emissions compared to the petroleum fuel baseline. Additionally , while the final results reported in this rule include an electricity credit, this electricit y credit is based on current technology for generating electricit y; it is possible that over the next decade as cellulosic biofuel production matures, the efficiency with which electricit y is generated at these facilities will also improve. Such efficiency improvements will tend to improve the GHG performance for cellulosic biofuel technologies in general including those used to produce renewable gasoline. Furthermore, industry

has identified other areas for energy improvements which our c urrent pathway

anal ys es do not include. Therefore, the results we have come up with for the individual pathway

t yp es represent conservative estimates and an y variations in the pathways considered are likel y to result in greater GHG reductions th an what is considered here. For example, the variation of the catal yt ic p yrol ys is route considered here resulted in a 67% reduction in lifecycle GHG emissions compared to the petroleum baseline. However, as was mentioned this was based on data from our NREL mode ling and industry CBI data indicated more efficient energy

performance which, if realized, would improve GHG performance. Another area for improvement in this pathway could be the use of anaerobic digestion to treat organics in waste water. If the anaero bic digestion is on - site, then enough biogas could potentially

be produced to replace all of the fossil natural gas used as fuel and about half the natural gas fed for h ydrogen production. 81 Thus, fossil natural gas consumption could be further minimized under certain scenarios. We believe that as commercial scale cellulosic facilities 81 Kinchin, Christopher. Catalytic Fast Pyrolysis with Upgrading to Gasoline and Diesel Blendstocks. National Renewable Energy Laboratory (NREL). 2011.*** E.O. 12866 Review

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Page **78** of **103** develop, more of these improvements will be made to maximize the use of all the biomass and waste b yproducts available to bring the facility closer to energy self - sufficienc y. These improvements could help to increase the economic profitability for cellulosic facilities where fossil energy

inputs become costly

to purchase. Therefore we can extend the modeling results for our p yrol ys is route to all variations of this product ion technology which use natural gas, biogas or biomass for production energy for producing renewable gasoline or renewable gasoline blendstock. The F - T gasification technology route considered as part of the RFS2 final rule resulted in an approximately 91% reduction in lifecy cle GHG emissions compared to the petroleum baseline. This could be considered a conservative estimate as the process did not assume an y excess electricit y production, which as mentioned above could lead to additional GHG reducti ons. The F - T process involves gasifying biomass into sy ngas (mix of H 2 and CO) and then converting the s yn gas through a catal yt ic process into a hydrocarbon mix that is further refined into finished product. The F - T process considered was based on producing both gasoline and diesel fuel so that it was not optimized for rene wable gasoline production. A process for producing primaril y renewable gasoline rather than diesel from a gasification route should not result in a significantly

worse GHG impacts compared to the mixed fuel process anal yz ed. Furthermore, as the lifecycle GHG reduction from the F - T process considered was around 91%, there is considerable room for variations in this route to still meet the 60% lifecycle GHG reduction threshold for cellulosic fuels. Therefore, in addition to the F - T process originall y anal y zed for producing naphtha, we can extend the results based on the above anal ys es to include all variations of the gasification route which use natural gas, biogas or biomass for production energy for producing renewable gasoline or renewable gasoline blend stock. These variations*** E.O. 12866 Review

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Page **79** of **103** include for example different catal ys ts and different refining processes to produce different mixes of final fuel product. While the current Table 1 entry in the regulations does not specify process energy

sources, we are adding these specific eligible energy sources since we have not anal yz ed other energy

sources (e.g. coal) as also allowing the pathway to meet the GHG performance threshold. There is an even wider gap between the results modeled for the direct fermentation route and the cellulosic lifecycle GHG threshold. The variation we considered for the direct fermentation process resulted in an approximately 129% reduction in lifecycle GHG emissions compared to the petroleum baseline. This process did consider production of electricity as part of the process but as mentioned even if this was not the case the pathway would still easily

fall below the 60% lifecycle threshold for cellulosic biofuels. If actual emissions from other necessary changes to the direct biochemical fermentation to hydrocarbons process represent some small increment in GHG emissions, the pathway would still likely

meet the threshold. Therefore, we can extend the results to all variations of the direct biochemical route for renewable gasoline or rene wable gasoline blendstock production which use natural gas, biogas or biomass for production energy . The biochemical with cataly tic upgrading route that we evaluated resulted in a 65% reduction in GHG emissions compared to the petroleum baseline. Howeve r, this can be considered a conservative estimate. For instance, the biochemical fermentation to gasoline via carbox yl ic acid route considered did not include the potential for generating steam from the combustion of undigested biomass and then using this steam for process energy . If this had been included, natural gas consumption could potentially be decreased which would lower the potential GHG emissions estimated from the process. Therefore, the scenario analyzed could be*** E.O. 12866 Review

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Page **80** of **103** considered conservative in estimating actual natural gas usage. As was the case with the py rol ys is route considered, we believe that as commercial scale cellulosic facilities develop, improvements will be made to maximize the use of all the biomass and waste by products available t o bring the facility closer to energy

self - sufficiency . These improvements help to increase the economic profitability for cellulosic facilities where fossil energy inputs become costly to purchase. The processes we analyzed for this rulemaking utilized a mix of natural gas and biomass for process energy , with biogas replacing natural gas providing improved GHG performance. We have not analyzed other fuel t yp es (e.g., coal) and are therefore not approving processes that utilized other fuel sources at this point. Therefore, we are extending our results to include all variations of the biochemical with cataly tic upgrading process utilizing natural gas, biogas or biomass for process energy . While actual cellulosic facilities may show some modifications t o the process scenarios we have alread y anal yz ed, our results give a good indication of the range of emissions we could expect from processes producing renewable gasoline and renewable gasoline blendstock from cellulosic feedstock, all of which meet the 60 % cellulosic biofuel threshold (assuming they are utilizing natural gas, biogas or biomass for process energy). Technology changes in the future are likely to increase efficiency

to maximize profits, while also lowering lifecy cle GHG emissions. Therefore, we have concluded that since all of the renewable gasoline or renewable gasoline blendstock fuel processing methods we have anal yzed exceed the 60% threshold using specific cellulosic feedstock t yp es, we can conclude that processes producing renewable gas oline or renewable gasoline blendstock that fit within the categories of process analyzed here and are produced from the same feedstock t ypes and using natural gas, biogas or biomass for process energy use will also meet the 60% GHG reduction threshold. In addition, while other*** E.O. 12866 Review

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Page **81** of **103** technologies may

develop, we expect that they will only become commercially

competitive if they have better yield s (more gallons per ton of feedstock) or lower production cost s due to lower energy

consumption. Both of these factors would suggest better GHG performance. This would certainl y be the case if such processes also relied upon using biogas and/or biomass as the primary energy source. Therefore based on our review of the existing primary cellulosic biofuel production proce sses, likely GHG emission improvements for existing or new technologies, and consideration of the positive GHG emissions benefits associated with using biogas and/or biomass for process energy , we are approving for cellulosic RI N generation any

process for renewable gasoline and renewable gasoline blendstock production using specified cellulosic biomass feedstocks as long as the process utilizes biogas and/or biomass for all process energy . 5. Summary Three renewable gasoline and renewable gasoline blendstock pathway s were compared to baseline petroleum gasoline, using the same value for baseline gasoline as in the RFS2 final rule anal ys is. The results of the anal ys is indicate that the renewable gasoline and renewable gasoline blendstock pathway s re sult in a GHG emissions reduction of 65 - 129% or better compared to the gasoline fuel it would replace using corn stover as a feedstock. The renewable gasoline and renewable gasoline blendstock pathway s which use corn stover as a feedstock all exceed the 6 0% lifecycle GHG threshold requirements for cellulosic biofuel, these pathways capture the likel y current technologies, and future technology improvements are likel y to increase efficiency and lower GHG emissions. Therefore we have determined that all pr ocesses producing renewable gasoline or renewable gasoline blendstock from corn stover can qualify if they fall in the following process characterizations:*** E.O. 12866 Review

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Page **82** of **103**  Cataly

tic py rol ys is and upgrading utilizing natural gas, biogas, and/or biomass as the onl y process energy

sources  Gasification and upgrading utilizing natural gas, biogas, and/or biomass as the only process energy

sources  Direct fermentation utilizing natural gas, biogas, and/or biomass as the only process energy sources  Fermentation and upgrading utili zing natural gas, biogas, and/or biomass as the only process energy

sources  Any process utilizing biogas and/or biomass as the only process energy

sources. As was the case for extending corn stover results to other feedstocks in the RFS2 final rule, these results are also reasonabl y extended to feedstocks with similar or lower GHG emissions profiles , including the following feedstocks:
 Cellulosic biomass from crop residue, slash, pre - commercial thinnings and tree residue, annual cover crops;
 Cellulosic c omponents of separated yard waste;
 Cellulosic components of separated food waste; and
 Cellulosic components of separated MSW For more information on the reasoning for extension to these other feedstocks refer to the feedstock production and distributio n section or the RFS2 rulemaking (75 FR 14 670 ) . Based on these results, today ’s rule includes pathway s for the generation of cellulosic biofuel RINs for renewable gasoline or renewable gasoline blendstock produced b y catal yt ic py rol ys is and upgrading, gasification and upgrading, direct fermentation, fermentation and upgrading, all utilizing natural gas, biogas, and/or biomass as the only process energy

sources or*** E.O. 12866 Review

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Page **83** of **103** any process utilizing biogas and/or biomass as the only energy sources, and using corn stover as a feedstock or the feedstocks noted above. In order to qualify for RIN generation, the fuel must meet the other definitional criteria for renewable fuel (e.g., produced from renewable biomass, and used to reduce or replace petroleum - based transportation fuel, heating oil or jet fuel) specified in the Clean Air Act and the RFS regulations. A manufacturer of a renewable motor vehicle gasoline (including parties using a renewable blendstock obtained from another party), must satisfy EPA motor vehicle registration requirements in 40 CFR p art 79 for the fuel to be used as a transportation fuel. Per 40 CFR 79.56(e)(3)(i), a renewable motor vehicle gasoline would be in the Non - Baseline Gasoline category or th e At ypical Gasoline category (depending on its properties) since it is not derived only from conventional petroleum, heavy oil deposits, coal, tar sands and/or oil sands (40 CFR 79.56(e)(3)(i)(5)).In either case, the Tier 1 requirements at 40 CFR 79.52 (emissions characterization) and the Tier 2 requirements at 40 CFR 79.53 (animal exposure) are conditions for registration unless the manufacturer qualifies for a small business provision at 40 CFR 79.58(d). For a non - baseline gasoline, a manufacturer und er $50 million in annual revenue is exempt from Tier 1 and Tier 2. For an at ypical gasoline there is no exemption from Tier 1, but a manufacturer under $10 million in annual revenue is exempt from Tier 2. Registration for a motor vehicle gasoline at 40 C FR 79 is via EPA Form 3520 - 12, Fuel Manufacturer Notification for Motor Vehicle Fuel, available at: http://www.epa.gov/otaq/regs/fuels/ffarsfrms.htm.*** E.O. 12866 Review

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Page **84** of **103 E.**  **Esterification Production Process Inclusion for Specified Feedstocks Producing Biodiesel**  Table 14, shown below, includes pathway s for biodiesel using specified feedstocks and the production process transesterification. Transesterification is the most commonly used method to produce biodiesel (i.e. meth yl esters) by reacting trigl ycerides with methanol ty picall y under the presence of a base cataly st, see the simplified form in Equation 1. 82

**Table 14: Excerpts of Existing Fuel Pathways from 40 CFR 80.1426** Fuel T ype Feedstock Production Process Requirements D - Code Biodiesel, and renewable diesel 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 Excluding processes that co - process renewable biomass and petroleum 4 (Biomass - Based Diesel)

Biodiesel, and renewable diesel Soy bean oil; Oil from annual One of the following: Trans - Esterification 5 (Advanced

82 Commonly used base catalysts include sodium hydroxide (NaOH), potassium hydroxide (KOH) and sodium methoxide (NaOCH 3 )*** E.O. 12866 Review

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Page **85** of **103** covercrops;

Algal oil; Biogenic waste oils/fats/greases; Non - food grade corn oil Hydrotreating Includes only processes that co - process renewable biomass and petroleum Biofuel)

**Equation 1: Transesterification** ( ) + h ( h ) ( ) ⎯ ⎯ ⎯ ⎯ ⎯ ⎯ h ( ) + While triglycerides are usually the main component of oils, fats, and grease feedstocks, there are other components such as free fatt y acids (FFAs) that are t ypicall y removed prior to transesterification. Removal or conversion of FFAs is important if the traditional base - catal yz ed transesterification production process is used since FFAs will react with base catal ys ts to produce soaps that inhibit the transesterification reaction. Table 15 below gives the usual ranges for FFAs found in biodiesel feedstock s.

**Table 15: Ranges of FFA in Biodiesel Feedstocks 83**  **, 84**  Biodiesel Feedstock Percentage FFA (%) Refined vegetable oils <0.05 Crude vegetable oils 0.3 - 0.7

83 Van Gerpen, J., Shanks, B., Pruszko, R., Clements, D., Knothe, G., “Biodiesel Production Technology,” NREL/SR 510 - 36244, July 2004. 84 Van Gerpen, J., “Used and Waste Oil and Grease for Biodiesel,” NC State University A&T State University Cooperative Extension, http://www.extension.org/pages/Used_and_Waste_Oil_and_Grease_for_Biodiesel*** E.O. 12866 Review

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Page **86** of **103** Restaurant waste

grease 2 - 7 Yellow grease <15 Animal fat 5 - 30 Brown grease >15 Trap grease 40 - 100 One of the most widel y used methods for treating biodiesel feedstocks with higher FFA content is acid cataly sis. Acid catal ys is t ypicall y uses a strong acid such as sulfuric acid to catal yz e the esterification of the FFAs and the transesterification of the triglycerides. The simplified form of the esterification process is given below in Equation 2. Acid esterification can be applied to feedstocks with FFA contents above 5%. Because the transesterification of trigl ycerides is slow under acid catal ys is, a technique commonly used to overcome the reaction rate issue is to first convert the FFAs through an acid esterification (also known as an acid “pretreatment” step), and then follow - up with the traditional base - catal yz ed transesterification of trigl ycerides. See Figure 2 for a general flow diagram of the acid esterification and subsequent transesterification biodiesel process. **Equation 2: Esterification** ( ) + h ( h ) ( ) ⎯ ⎯ ⎯ ⎯ ⎯ ⎯ h ( ) + **Figure 2: Process Description for Acid Esterification and Transesterification***** E.O. 12866 Review

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Page **87** of **103**

Source: http://www1.eere.energy .gov/biomass/abcs_biofuels.html#biodprod Under the RFS2 final rule, biodiesel from biogenic waste oils/fats/greases qualifies for D Codes 4 and 5 using a “transesterification” process. This conclusion was based on the analy sis of y ellow grease as a feedstock in a process where there was an acid “pretreatment” or “esterification” process to treat the F FAs contained in the feedstock. In fact, one of the material inputs assumed in the modeling for the final RFS2 rule y ellow grease pathway is sulfuric acid, which is the catal ys t commonly used for acid esterification. However, we had not stipulated “esterification” as a qualified production process in Table 1 to 40 CFR 80.1426. We believe this ambiguit y could unnecessarily cause confusion as to whether esterification can also be used for the production of biodiesel under the currentl y approved pathway s. Since the biodiesel modeling completed for the final RFS2 rule actually includes esterification upstream of the transesterification process, we find it appropriate to clarify Table 1 to 40 CFR 80.1426 to include “esterification” as a qualified process in which to produce biodiesel. As the modeling for yellow grease met an 86% GHG reduction emissions level, and ye llow grease is ty

pically <15% FFA content, it is reasonable to conclude that esterification and subsequent transesterification with a y ellow grea se feedstock containing FFAs at the very least*** E.O. 12866 Review

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Page **88** of **103** up to 15% can meet the GHG reduction threshold for biomass - based diesel and advanced biofuel of 50%. As noted in Table 15, however, there are feedstocks that may contain even higher levels of FFAs. As describ ed below, EPA has evaluated the use of these higher FFA feedstocks to make biodiesel and has determined that use of such feedstocks also results in a biodiesel with lifecycle GHG emissions at least 50% less than that of conventional fuel. The National Biodiesel Board (NBB) has conducted a comprehensive survey of the actual energy used b y commercial biodiesel production plants in the U.S. 85 The survey depicts the amount of energy

and incidental process materials such as acids used to produce a gallon of biodiesel. The survey

data returned represents 37% of the survey ed 230 NBB biodiesel members in 2008 and includes producers using a variet y of virgin oils and recycled or reclaimed fats and oils. While there is no specific data on the FFA content of the feedstocks used, the feedstocks did include reclaimed greases which represent the feedstocks which ty pically have the highest FFA content. As the data is partially aggregated, we used the maximum surveyed electricity and natural gas used at the facilitie s and a high estimate of “materials used” based on a sum of industry averages for all process materials for calculating potential GHG emissions. Even though some of the facilities might be processing feedstocks with relatively low FFA content, we believe that using these maximum observed inputs for energy used plus a high estimate for process materials used will estimate the highest GHG emissions profile for biodiesel production GHG emissions. When combined with the feedstock GHG emissions impact (see dis cussion below), the results still predict a GHG emissions reduction comfortabl y exceeding 50% as compared to the petroleum fuel it displaces. Therefore, there is little risk in predicting that an y
85 National Biodiesel Board, Comprehensive Survey on Energy Use for Biodiesel Production (2008) http://www.biodiesel.org/news/RFS/rfs2docs/NBB%20Energy%20Use%20Survey%20FINAL. pdf*** E.O. 12866 Review

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Page **89** of **103** facility that utilizes esterification and feedstock over the range of likel y FFA content can meet the 50% biomass - based diesel and advanced biofuel threshold. According to the survey , the maximum electricity use for a producer reached as high as 3,071 Btu per gallon biodiesel. This is about 5 times higher than the industry average. The maximum natural gas usage for a producer reached as high as 12,324 Btu per gallon biodiesel, which is about 3.5 times higher than the industry average. For “materials used” only an industry average for each material was provided in the survey . Therefore, as a conservative estimate, we totaled all the average material inputs to equal 0.51 kg/gal biodiesel. 86 We believe that this is conservative because not all facilities are likel y to use each and every one of the process materials listed in the survey (e.g., we totaled all the acids used even though a facilit y is not likely to use each different acid). Thus, our estimate of materials used will estimate a level of maximum usage of materials at a given facility . In addition, we did not include a gl ycerin co product credit when calculating emissions since the esterification reaction does not produce gl yc erin (see Equation 2). Using the same methodology as was used for the y ellow grease modeling under RFS2, but using the high ene rgy and materials use assumptions per the above discussion and omitting the gl yc erin co - product credit, we estimate the emissions from biodiesel processing at 23,708 gCO2eq per mmBtu of biodiesel. The estimated GHG emissions reduction for the entire proce ss is - 71%. Since the GHG threshold is at - 50% for biomass - based diesel and advanced biofuel, we believe that there is a large enough margin in the results to reasonably conclude that biodiesel using esterification of specified feedstocks with any level o f FFA content meets the biomass - based diesel and advanced biofuel 50% lifecycle GHG reduction threshold. Therefore, we are including the process “esterification” as an approved biodiesel production 86 The material inputs include methanol, sodium methylate, sodium hydroxide, potassium hydroxide, hydrochloric acid, sulfuric acid, phosphoric acid, and citric acid. The majority of material input is from methanol.*** E.O. 12866 Review

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Page **90** of **103** process in Table 1 to 40 CFR 80.1426. In addition, cons istent with the modeling conducted for RFS2, we interpret the RFS regulations as they existed prior to today ’s rule as including a direct esterification process as part of the biodiesel pathway s for which only “trans - esterification” was specificall y refere nced in Table 1 to 40 CFR 80.1426. **II. Additional Changes to Listing of Available Pathways in Table 1 of 80.1426**  We are also finalizing two changes to Table 1 to 80.1426 that were proposed on July 1, 2011(76 FR 38844). The first change adds ID letters to pathway s to facilitate references to specific pathway s. The second change adds "rapeseed" to the existing pathwa y for renewable fuel made from canola oil. On September 28, 2010, EPA published a “Supplemental Determination for Renewable Fuels Produced Under the Final RFS2 Program from Canola Oil” ( 75 FR 59622 ). In the July 1, 2011 NPRM (76 FR 38844) we proposed to clarify two aspects of the supplemental determination. First we proposed to amend the regulatory language in Table 1 to §80.1426 to clarify that the currentl y - approved pathway for canola also applies more generall y to rapeseed. While “canola” was spec ifically described as the feedstock evaluated in the supplemental determination, we had not intended the supplemental determination to cover just those varieties or sources of rapeseed that are identified as canola, but to all rapeseed. As described in th e July 1, 2011 NPRM, we currently interpret the reference to “canola” in Table 1 to §80.1426 to include an y rapeseed. To eliminate ambiguit y caused by the current language, however, we proposed to replace the term “canola” in that table with the term “can ola/rapeseed”. Canola is a ty pe of rapeseed. While the term “canola” is often used in the American continent and in Australia, the term “rapeseed” is often used in Europe and other countries to describe the same crop. We received no adverse comments on our proposal, and are finalizing it as proposed. This*** E.O. 12866 Review

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Page **91** of **103** change will enhance the clarity of the regulations regarding the feedstocks that qualify under the approved canola biodiesel pathway . Second, we wish to clarify that although the GHG emissions of producing fuels from canola feedstock grown in the U.S. and Canada was specifically modeled as the most likely source of canola (or rapeseed) oil used for biodiesel produced for sale and use in the U.S., we also intended that the approved pathway cover canola/rapeseed oil from other countries, and we interpret our regulations in that manner. We expect the vast majority of biodiesel used in the U.S. and produced from canola/rapeseed oil will come from U.S. and Canadian crops. Incidental amounts from crops produced in other nations will not impact our average GHG emissions for two reasons. First, our analy ses considered world - wide impacts and thus considered canola/rapeseed crop production in other countries. Second, other countries most likely to be export ing canola/rapeseed or biodiesel product from canola/rapeseed are likely to be major producers which t ypically use similar cultivars and farming techniques. Therefore, GHG emissions from producing biodiesel with canola/rapeseed grown in other countries sh ould be very similar to the GHG emissions we modeled for Canadian and U.S. canola, though they could be slightly

(and insignificantly) higher or lower. At any rate, even if there were unexpected larger differences, EPA believes the small amounts of fee dstock or fuel potentially coming from other countries will not impact our threshold analysis. Therefore, EPA interprets the approved canola pathway

as covering canola/rapeseed regardless of country of origin. We are also correcting an inadvertent omissio n to the proposal which incorrectly did not include a pathway

for producing naphtha from switchgrass and miscanthus; this pathway was included in the original RFS2 final rule. This pathway also incorporates the additional energy grass feedstock sources being added today , namely energy cane, giant reed and napiergrass.*** E.O. 12866 Review

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Page **92** of **103 III**  **. 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.” Accordingl y, 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 an y changes made in response to OMB recommendations have been documented in the docket for this action. **B. Paperwork Reduction Act**  This action does not impose an y new information collection burden. The corrections, clarifications, and modifications to the final RFS2 regulations contained in this rule are within the scope of the information collection requirements submitted to the Office of Management and Budget (OMB) for the final RFS2 regulations. OMB has approved the information collection requirements contained in the existing regulations at 40 CFR part 80, subpart M under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control numbers 2060

– 0637 and 2060 - 0640. The OMB control numbers for EPA’s regulations in 40 CFR are listed in 40 CFR part 9. **C. Regulatory Flexibility Act**  The Regulatory

Flexibility

Act (RFA) generall y requires an agency to prepare a regulatory

flexibility

analy sis of any

rule subject to no tice and comment rulemaking requirements under the Administrative Procedure Act or an y other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of*** E.O. 12866 Review

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Page **93** of **103** small entities. Small entities include sma ll 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 b y the Small Business Administration’s (SBA) regu lations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city , count y, 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 whi ch is independently owned and operated and is not dominant in its field. After considering the economic impacts of this action on small entities, I certify that this rule will not have a significant economic impact on a substantial number of small entities . This rule will not impose any

new requirements on small entities. The relativel y minor corrections and modifications this rule makes to the final RFS2 regulations do not impact small entities. **D. Unfunded Mandates Reform Act**  This rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one y ear. We have determined that this action will not result in expenditures of $100 million o r more for the above parties and thus, this rule is not subject to the requirements of sections 202 or 205 of UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory

requirements that might significantly or uniquel y affect small governments. It only

applies to gasoline, diesel, and renewable fuel producers, importers, distributors and marketers and makes relatively minor corrections and modifications to the RFS2 regulations.*** E.O. 12866 Review

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Page **94** of **103 E.**  **Executive Order 13132 (Fed eralism)**  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 variou s levels of government, as specified in Executive Order 13132. This action only applies to gasoline, diesel, and renewable fuel producers, importers, distributors and marketers and makes relativel y minor corrections and modifications to the RFS2 regulation s. Thus, Executive Order 13132 does not apply to this action. **F. Executive Order 13175 (Consultation and Coordination With Indian Tribal**  **Governments )**  This rule does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It applies to gasoline, diesel, and renewable fuel producers, importers, distributors and marketers. This action makes relatively minor corrections and modifications to the RFS regulations, and does not impose any enforceable duties on communities of Indian tribal governments. Thus, Executive Order 13175 does not apply to this action. **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 appl yi ng only to those regulatory

actions that concern health or safet y risks, such that the anal ys is 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 safet y risks.*** E.O. 12866 Review

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Page **95** of **103 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 13 211 (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 rulemaking does not change any programmatic structural component of the RFS2 regulatory requirements. This rulemaking does not add an y new requirements for obligated parties under the program or mandate the use of an y of the new pathway s contained in the rule. This rulemaking only makes a determination to qualify new fuel pathway s under the RFS2 regulations, creating further opportunity and flexibility

for compliance with the Energy

Independence and Securit y Act of 2007 (EISA) mandates. **I. National Technology Transfer and Advancement Act**  Section 12(d) of the National Technology Transfer and Advancement Act of 1 995 (‘‘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 developed or adopted b y 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 action does not involve technical standards. Therefore, EPA did not consider the use of an y voluntary consensus standards.*** E.O. 12866 Review

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Page **96** of **103 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 gre atest 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 act ivities on minority populations and low income populations in the United States. EPA has determined that this rule will not have disproportionatel y 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. These amendments would not relax the control measures on sources regulated b y the RFS regulations and therefore would not cause emissions increases from these sources. **K. Congres**  **sional Review Act** The Congressional Review Act, 5 U.S.C. 801 et seq., as added b y the Small Business Regulatory

Enforcement Fairness Act of 1996, generall y provides that before a rule may take effect, the agency

promulgating the rule must submit a rule report, which include s a cop y of the rule, to each House of the Congress and to the Comptroller General of the United States. A major rule cannot take effect until 60 day s after it is published in the Federal Register. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).*** E.O. 12866 Review

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Page **97** of **103 IV.**  **Statu tory Provisions and Legal Authority**  Statutory authorit y for the rule finalized today can be found in section 211 of the Clean Air Act, 42 U.S.C. 7545. Additional support for today 's rule comes from Section 301(a) of the Clean Air Act, 42 U.S.C. 7414, 7542 , and 7601(a). **Regulation of Fuels and Fuel Additives: Identification of Additional Qualifying Renewable**

**Fuel Pathways under the Renewable Fuel Standard Program** List of Subjects in 40 CFR Part 80 Environmental protection, Administrative practice and proc edure, Agriculture, Air pollution control, Confidential business information, Diesel Fuel, Energy , Forest and Forest Products, Fuel additives, Gasoline, Imports, Labeling, Motor vehicle pollution, Penalties, Petroleum, Reporting and recordkeeping requirem ents. Dated: ____________________________

__________________________________ Lisa P. Jackson, Administrator Billing Code: 6550 - 50 - P*** E.O. 12866 Review

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Page **98** of **103** 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 authorit y citation for part 80 continues to read as follows: Authority : 42 U.S.C. 7414, 7521(1), 7545 and 7601(a). 2 . Section 80.1401 is amended by adding definitions of “Renewable Gasoline” and “Renewable Gasoline Blendstock” in alphabetical order to read as follows: **§80.1401 Definitions** * * * * * Renewable gasoline means renewable fuel made from renewable biomass that is composed of onl y h ydrocarbons and which meets the definition of gasoline in §80.2(c). Renewable gasoline b lendstock means a blendstock made from renewable biomass that is composed of onl y h ydrocarbons and which meets the definition of gasoline blendstock in §80.2(s). * * * * * 3 . Section 80.1426 is amended by revising Table 1 in (f)(1) to read as follows: **§80 .1426**  **How are RINs generated and assigned to batches of renewable fuel by renewable fuel producers or importers?**  ***** ***** ***** ***** ***** (f) * * * **Table 1 to §80.1426 —** 

**Applicable D Codes for Each Fuel Pathway for Use in Generating**

**RINs***** E.O. 12866 Review

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Page **99** of **103 Fuel type**  **Feedstock Production process**  **requirements D**  **** **Code** A Ethanol Corn starch All of the following: Dry mill process, using natural gas, biomass, or biogas for process energy and at least two advanced technologies from Table 2 to this section 6

B Ethanol Corn starch All of the following: Dry mill process, using natural gas, biomass, or biogas for process energy and at least one of the advanced technologies from Table 2 to this section plus drying no more than 65% of the distillers grains with solubles it markets annuall y 6

C Ethanol Corn starch All of the following: Dry mill process, using natural gas, biomass, or biogas for process energy and 6*** E.O. 12866 Review

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Page **100** of **103** drying no more than 50% of the distillers grains with solubles it markets annually D Ethanol Corn starch Wet mill process using biomass or biogas for process energy 6

E Ethanol Starches from crop residue and

annual covercrops Fermentation using natural gas, biomass, or biogas for process energy 6

F Biodiesel, renewable diesel, jet fuel and heating oil Soy

bean oil; Oil from annual covercrops; Algal oil; Biogenic waste oils/fats/greases; Non - food grade corn oil Camelina oil One of the following: Trans - Esterification Esterification Hydrotreating Excluding processes that co process renewable biomass and petroleum 4

G B iodiesel, heating oil Canola/Rapeseed oil Trans - Esterification using natural gas or biomass for process energy 4

H Biodiesel, renewable diesel, jet fuel and heating Soy

bean oil; Oil from annual covercrops; Algal oil; Biogenic waste oils/fats/greases; One of the following: Trans - Esterification Esterification Hydrotreating 5*** E.O. 12866 Review

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Page **101** of **103** oil Non - food grade corn oil

Camelina oil In cludes onl y processes that co - process renewable biomass and petroleum I Naphtha, LPG Camelina oil Hydrotreating 5 J Ethanol Sugarcane Fermentation 5 K Ethanol Cellulosic Biomass from crop

residue, slash, pre - commercial thinnings and tree residue, annual covercrops, switchgrass, miscanthus, napiergrass, giant reed, and energy

cane; cellulosic components of separated yard waste; cellulosic components of separated food waste; and cellulosic components of separated MSW Any 3

L Cellulosic diesel, jet fuel and heating oil Cellulosic Biomass from crop

residue, slash, pre - commercial thinnings and tree residue, annual covercrops, switch grass, miscanthus, napiergrass, giant reed and energy

cane; cellulosic components of separated yard Any 7*** E.O. 12866 Review

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Page **102** of **103** waste; cellulosic components of

separated food waste; and cellulosic components of separated MSW M Renewable gasoline and renewable gasoline blendsto ck Cellulosic Biomass from crop

residue, slash, pre - commercial thinnings, tree residue, annual cover crops; cellulosic components of separated yard waste; cellulosic components of separated food waste; and cellulosic components of separated MSW Cataly tic P yrol ys is and Upgrading, Gasification and Upgrading, Direct Fermentation, Fermentation and Upgrading, all utilizing natural gas, biogas, and/or biomass as the only process energy

sources Any process utilizing biogas and / or biomass as the only process energy

sources 3

N Naphtha Cellulosic biomass from

switchgrass, miscanthus, energy cane, giant reed and napiergrass Gasification and upgrading 3

O Butanol Corn starch Fermentation; dry mill using natural gas, biomass, or biogas for process energy 6

P Ethanol, renewable The non - cellulosic portions of

separated food waste Any 5*** E.O. 12866 Review

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Page **103** of **103** diesel, jet fuel, heating oil, and naphtha Q Biogas Landfills, sewage waste treatment

plants, manure digesters Any 5

* * * * *