SUPPORTING STATEMENT FOR THE RENEWABLE FUEL S STANDARD (RFS2) PROGRAM ( FI NAL RULE) A. JUSTIFICATION 1. Id entification of the Information Collection
a. Title: Renewable Fuels Standard (RFS2) Program, EPA I CR No. 2333.0 2 , OMB Control Number 2060
- NEW. b
. Short characterization: The Energy

Policy Act (EPAct) of 2005 amended the Clean Air Act, section 211(o), and required the existing RFS program. The existing RFS program is referred to in this supporting statement as "RFS1". The RFS1 program started i n 2006 and was covered b y EPA I CR No. 2242.02, OMB Control Number 2060
- 0600. Please refer to “Regulation of Fuels and Fuel Additives: Renewable Fuel Standard Program

– Notice of Proposed Rulemaking” and “Regulation of Fuels and Fuel Additives: Renewable Fu el Standard Program

– Final Rule” (both available in docket number EPA
- HQ
- OAR
- 2005
- 0161) for a detailed discussion of the RFS1 program. The Energy

Independence and Securit y Act (EISA) of 2007 further amends the Clean Air Act, section 211(o), and has req uired EPA to propose new regulations for renewable fuels. The new RFS program is referred to in this supporting statement as "RFS2." Under RFS2, the volume requirement and ty pes of renewable fuels are expanded; non
- road uses are included (RFS1 only affec ted motor vehicle fuel); there are additional ty

pes of waivers and special provisions for renewable fuel t ypes; and EPA will implement an EPA
- Moderating Transaction Sy stem (EMTS) for RINs. Additional parties will be required to register, keep records, and report. Please refer to the Final Rule (available in docket number EPA
- HQ
- OAR
- 2005
- 0161) for a detailed discussion of the RFS2 program. For compliance purposes, under both RFS1 and RFS2, volumes of renewable fuel are identified through the use of ren ewable identification numbers (RINs) that are initially generated by

the producer of the renewable fuel. However, under RFS2, there are additional t ypes of RINs and the volume of RINs traded is expected to be greater. This supporting statement provide s tables that break down reporting items by party (e.g. producer, importer, refiner, etc.) Parties who are interested in recordkeeping and reporting burden will want to review the tables containing our estimates carefully
. The RFS2 program includes provi sions for EMTS for RINs, which was not a feature of RFS1
. Italso includes third
- part y disclosure provisions applicable to biofuel feedstock producers , who were not covered b y recordkeeping and reporting under RFS1.The Regulatory Impact Analy sis (R IA ), which was prepared for the Final Rule , has been placed in the public docket. This document was consulted to provide additional detailed information about the regulated universe (see Chapter 1 of the draft RIA). We also considered the actual number o f reporting parties under RFS1 and similar reporting programs. 2. Need For, and Use of, the Collection
a. Authority

for the Collection Sections 114 and 208 of the Clean Air Act (CAA), 42 U.S.C. §§ 7414 and 7542, authorize EPA to require recordkeeping and reporting regarding enforcement of the provisions of Title II of the CAA. b. Practical Utility

/Uses of the Data The recordkeeping and reporting requirements of this regulation will allow EPA to monitor compliance with the RFS program. 3. Non
- duplication, Consultation, and other Collection Criteria
a. Non
- duplication Efforts have been made to eliminate duplication in this information collection. b. Public Notice EPA sought comment on report ing requirements via the NPRM. We also docketed a cop y of our draft ICR supporting statement based upon the NPRM.
c. Consultations We have drawn upon our experience with RFS1 and with similar fuels regulations to develop the estimates in this supp orting statement. Interested parties may also be interested in reviewing "Chapter 1

– Industry Characterization" of the draft Regulatory Impact Anal ys is (RIA) available in the public docket. Some assumptions from the RIA were used for this supporting statement. d. Effects of Less Frequent Data Collection We have designed the reporting schedule to coincide with existing reporting deadlines applicable to many of the same parties under such programs as RFG and anti
dumping and diesel fuel. L ess freque nt collection of data would make it impossible to carry out the provisions of the CAA and EISA.
e. General GuidelinesThis rule does not exceed any of the OMB guidelines. f. Confidentiality We inform respondents that they may assert claims of business confidentiality (CBI) for information they submit. Under RFS2, actual RINs should not be treated as confidential business information under RFS2, as they are necessary

identifiers to accompan y renewable fuels. Any information claimed as confidential will be treated in accordance with 40 CFR Part 2 and established Agency procedures. Information that is received without a claim of confidentialit y ma y be made available to the public without further notice to the submitter under 40 CFR § 2.203. g. Sensitive Information This information collection does not require submission of any sensitive information. 4. The Respondents and the Information Requested
a. Respondents/with NAI CS and SI C Codes The respondents to this infor mation collection fall into the following general industry categories: petroleum refineries (324110/2911), ethyl alcohol manufacturers (325193/2869), other basic organic chemical manufacturing (325110/2869), chemical and allied products merchant wholesale rs (426990/5169), petroleum bulk stations and terminals (422710/5171), petroleum and petroleum products merchant wholesalers (422720/5172), and other fuel dealers (454319/5989).

Using the terminology

associated with the RFS2 Final Rule, we have assumed the following classes of party , with the number of each in parenthesis:

 Producers of renewable fuels ( 1010, of which 310 are biodiesel producers )  Importers (120)  Obligated Parties (450, of which 400 are refineries and 50 exporters)  Parties who own RINs ( 1500)  Foreign Refiners (10)  Foreign RIN Owners (5) [Note: The above estimates are derived from the number of registered parties as of December 17, 2009, rounded up. The number of biodiesel producers is the number registered as of January 11, 2010, rounde d up. ] For biofuel feedstock producers, we have assumed the following classes of party , with the number of each in parenthesis:

 1,000,000 plantation and private forest owners 30,966 foreign biofuel feedstock producers [Note: The above estimates are deri ved from the following sources : A presentation given b y Brent Butler, United States Forest Service, entitled “Private Forest Owners: Past Present, and Future,” dated October 23
- 27, 2009 estimates a 10,000,000 population of plantation and private forest o wners. We have assumed 10% participation in RFS2. We estimated the number of foreign biofuel feedstock producers to be 30, 000 , which is 3% of the total of domestic feedstock producers (i.e., 3% of 1,0 00 , 0 00.)] This supporting statement includes estimat es reporting involving biofuel feedstock producers , who must provide certain information about their feedstocks and source to biofuel producers and to EPA upon request . The RFS2 final rule contains provisions requiring recordkeeping/reporting and the mapp ing of certain plots of land (e.g. generating a Google map or similar representation), based upon an aggregate baseline approach. Although we expect that this could lead to future burden on the part of certain biofuel producers who use croplands ( i.e., f armers ), we do not expect that any party will be required to engage in recordkeeping and reporting activities under this provision until the fourth y ear of the program or later. Therefore, we have not provided an estimate related to this provision, since it is not expected to result in any cost during the three ye ar period covered by this ICR. Estimates for future recordkeeping and reporting will be provided when the recordkeeping and reporting is expected to occur.
b. In formation Requested A) Reporting: The individual reports required from regulated parties are described in the preamble. The following reports are required b y the Final Rule: annual compliance reports (obligated parties onl y), quarterl y reports regarding generation and ass ignment of RINs (producers and importers only), quarterl y R IN reports summarizing transactions and activity , and “real time” RIN transactional activity reporting within EMTS. Reporting items include registration of parties engaged in activities covered b y the RFS2 regulation and reporting related to transactions involving RI Ns and associated volumes of fuel. The exact reports filed will depend upon the activity engaged in by

the party . A party must file reports appropriate for each activity it engages in

– for example, if a part y is both an exporter of renewable fuel and a producer of renewable fuel, then that party must file the reports applicable to both activities. In the Final Rule , we establish hat “real time” reporting within EMTS will be construe d as within five ( 5 ) business day s of a reportable event (e.g. generation and assignment of RINs, transfer of RINs). This means that some parties may elect to “batch” real time reports, similar to how businesses batch credit card transactions at the end o f the day . We estimate that an average party would report dail y, resulting in 365instances of reporting in EMTS per y ear . These estimates are reflected in the tables

below
. Quarterl y reports are due as follows:

Quarterl y Reporting Schedule fo r RFS2 Program Quarter Covered by Quarterly Report Due Date for Quarterly Report January
- March May 31 April
- June August 31 July
- September November 30 October
- December February 28 Annual reports are due on February 28 for the precedi ng y ear. For some reports, e.g. involving biofuel feedstock producers (see Table VII), the frequency of reporting is “on occasion” (i.e., when a transaction requiring disclosure occurs). As discussed above, for EMTS purpose, we have assumed one instanc e of reporting per day

for each day

of the y ear. (i.e., 365 instances of reporting). Tables I
- VI I estimate the recordkeeping and reporting burden b y part y. We will provide respondents the opportunity to engage in simplified, secure, electronic reporting via the Agency 's Central Data Exchange (CDX) and its exchange network protocol. An attachment explaining the exchange network protocol is provided with this supporting statement. Respondents must keep copies of all reports filed for five (5) y ears.

B) Recordkeeping: Respondents must retain underl yi ng records related to reports they

file for five (5) ye ars. This period is consistent with other fuels programs and with customary business practices (CBP) for the industry . Respondents must tran sfer volumes of fuel with product transfer documentation or bills of lading, which is alread y done in the course of business. However, parties will have to actually develop and include new codes on product transfer documents and this supporting statement i ncludes estimates for that burden. 5. The Information Collected, Agency Activities, Collection Methodology, and In formation Management
a. Agency

Activities

 All reports and registrations will be reviewed b y EPA for completeness and for potential violati ons. Potential violations will be referred to enforcement personnel.  Registration numbers will be issued for new registrants.  Contacting reporting parties if there is a problem with their submission. b. Collection and Methodology and Management We anticipate receiving data in a simplified and secure fashion via the Agency 's CDX. Information claimed as CBI will be stored in appropriatel y controlled areas.
c. Small Entity

Flexibility This collection will not adversel y affect small entities. The Fin al Rule describes flexibility provisions available to small entities. d. Collection Schedule Registrations are received on a rolling basis, as updates may be sent in at any

time and new parties may

enter the regulated industry at any time. Reporting is as
- needed, monthly , quarterly , and annual. 6. Estimating the Burden and Cost of Collection
a. Estimating the Respondent Universe We drew upon experience implementing similar regulations among the same entities to develop estimates of the burden ass ociated with this collection. b. Estimating the Respondent Burden and Cost Three labor categories are involved: managerial (includes legal and professional review), technical, and clerical. The estimates use the Bureau of Labor Statistics figures fr om "Emplo ye r Costs for Employ ee Compensation
- Table 12
- Private Industry , Manufacturing, and Non
- Manufacturing Industries by Occupational Group” (December 2003), with a 3% annual inflation factor applied to bring the values to the present. Using this me thod, the following wages and benefits apply by category : Wages and Benefits Managerial $53.87 per hour Technical $35.29 per hour Clerical $24.56 per hour Doubling for compan y overhead beyond wages and benefits, and for convenience, rounding up to the dollar, gives the following rates for this I CR:Total Employ er Cost

Managerial $108 per hour Technical $71 per hour Clerical $49 per hour It is assumed that for each hour of activit y the mix will be about 0.1 hour managerial, 0.7 hour technical, and 0.2 hour clerical. This gives an average labor cost of $71 per hour, which will be used in this I CR. For purchased services related to attest engagements and some items of registration, we have doubled this hourly cost to $142 in order to more accurate ly

reflect the cost of a certified public accountant's (CPA) or licensed professional engineer's (PE) services.
c. Estimating the Agency Burden and Cost EPA must generate company and facility

registration number(s) for new registrants and notify

th em of these numbers, which must appear on reports. Report formats and instructions/guidance must be prepared by Agency personnel. Reports will be processed b y contractors and must be reviewed by Agency personnel. Reporting parties must be contacted if th ere is a problem with their submission. We anticipate that man y of our activities related to RFS2 will be similar to that of RFS1. We have not y et developed forms for RFS2, but have attached RFS1 forms which will be used in the first year of RFS2. The RFS2 reporting templates would not be very different, except that reporting would include four ty pes, rather than one t ype, of RIN. We have provided RFS1 reporting templates as an attachment to this document. This supporting statement considers costs as sociated with accepting new registrants and new reports associated with RFS2. Using the RFS1, and the RFG and anti
dumping ICR, and other recent fuels
- related ICRs as a guide in developing these initial estimates for RFS, we anticipate that RFS2 may requir e the equivalent labor of one full time GS
- 13 technical employ ees for a total of $161,000, and labor costs of $76,000 in the clerical category

and $28,000 in the management category
. 1 Since we are using the CDX, some costs incurred by the Agency

will be t ied to the number of registrants who send us reports. Specifically , there is an annual "subscription cost" associated with the use of CDX that is passed on to the EPA program office and we estimate that registrants due to RFS2 will cost our office approxi mately $ 200 ,000 per ye ar in 2010, 2011 and 2012. We anticipate $ 266,666 in annual contract costs related to registration and reporting activities. We anticipate IT development and testing costs at $ 2,200,000
1 T hese estimates are derived from "OPM Salary Table 2006
- DCB," effective January 2006. This table may be found at http://www.opm.gov/oca/06tables/indexGS.asp. The extreme of step 10 was assumed for all categories. We have assumed a half
- time GS
- 7 clerical worker, one full
- tim e GS
- 13 technical worker, and a GS
- 15 m anager working one
- eighth of his/her time managing this project (0.125). All values were multiplied by 1.6 (w

hich is a common factor utilized in ICRs to account for overhead costs). We rounded th e resulting dollar value to the nearest thousand. This cost is per year.divided by three y ears to yield an annual cost of $ 7 33, 333. Adding the following values results in an annual estimated Agency burden as follows: One GS
- 13 technical employ ee (full time) = $161,000 One GS
- 7 clerical worker (half time) = 76,000 One GS
- 15 manager (1/8 time) = 28,000 Annu al CDX subscription fee = 200,000 Annual contract costs = 266,666 Testing and development = 7 33,333 TOTAL = $1,464,999 As with all items in this supporting statement, we strongl y encourage comment on the estimated Agency

burden and on the Agency activities associated with this proposed information collection. d. Estimating the Respondent Universe We were able to estimate the number of regulated entities drawing upon experience regulating the same or similar entities.
e . Bottom L ine Burden Hours and Costs From the tables, we estimate the following totals: TOTAL NO. OF RESPONDENTS: 1,060,026 TOTAL NO. OF RESPONSES: 4,781,126 TOTAL BURDEN HOURS: 1,485,008 TOTAL COST TO RESPO N DENTS: $ 112,877,105 f. Reason for Change in Burden The change in burden is due to regulations that give effect to the EISA provisions for RFS2. g. Burden Statement The annual public reporting and recordkeeping burden for this collection of information is estimated to be 3
. 2 hours per response (the total number of responses divided by

the total hours)
. Burden means the total time, effort, or financial resources expended by

persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency
. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and s ys tems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providin g information; adjust the existing way s to compl y with any previously

applicable instructions and requirements; train personnel to be able to respondto a collection of information; search data sources; complete and review the collection of

information; an d transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it display s a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. To comment on the Agency 's need for this information, the accuracy of the provided burden estimates, and an y suggested methods for minimizing respondent burden, including the use of automat ed collection techniques, EPA has established a public docket for this ICR under Docket ID number EPA
- HQ
- OAR
- 2005
- 0161, which is available for online viewing at www.regulations.gov , or in person viewing at the Air Docket in the EPA Docket Center in Washington, DC (EPA/DC). The docket is located in the EPA West Building, 1301 Constitution Avenue, NW, Room 3334, and is open from 8:30 a.m. to 4:30 p.m., Eastern Standard Time, Monday through Friday , excluding legal hol iday s. The telephone number for the Reading Room is (202) 566
- 1744, and the telephone number for the Air Docket is (202) 566
- 1742. You may use www.regulations.gov to submit or view public comments, access the index listing of the contents of the publi c docket, and to access those documents in the public docket that are available electronically . When in the sy stem, select “search,” then key in the Docket ID Number EPA
- HQ
- OAR
- 2005
- 0161. Also, y ou can send comments to the Office of Information and Regul atory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA. Please include the EPA Docket ID Number EPA
- HQ
- OAR
- 2005
- 0161 and OMB Control Number 2060
- NEW in any correspondence.

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