Summary	of	Interagency	Working	Comments	on	Draft	Language	under	

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.

Comments on U.S. Environmental Protection Agency’s proposed rule titled, “Modification to 

Renewable Fuel Standard Program and E15 Misfueling Mitigation Regulations,” RIN 2060-AR21. 

Market Interactions between RFS RINs and RECs

It is requested that EPA provide additional explanation and discussion regarding the concept of 

connecting both ends of renewable fuels (RIN) production to other renewable energy (REC) markets. 

For instance, EPA has tentatively indicated an interest in allowing external (to the production site) 

renewable energy sources to be considered in the RFS greenhouse gas (GHG) lifecycle analysis (LCA) 

calculation. At the distribution end, EPA’s draft proposal allows biogas-derived liquefied natural gas 

(LNG) and biogas-derived electricity to generate transportation RINs, after co-mingling in commercial 

grids and pipelines that serve the many other, non-transportation, uses of these energy sources. These 

proposals have the effect of linking the RIN market to the REC market, with as yet uncertain 

consequences.

On the RIN production side, EPA proposes allowing offsite generated renewable energy sources 

(e.g., electricity RECs) to be incorporated in the required GHG LCA analysis to determine if a renewable 

fuel meets the legally mandated GHG emission reductions. 

 Has EPA evaluated the price and volume impact of such linkages between the biofuel RIN and 

REC markets? For instance, the LCA for a certain pathway may fall just short of the necessary 

GHG reductions, but could be rectified by substituting offsite generated renewable energy 

credits, maybe even just the separated RECs, for any GHG emitting energy components in the 

LCA. This could have the effect of a small purchase of RECs leading to a large gain in RIN value 

(e.g., non-renewable fuel to renewable RIN, to advanced RIN, to cellulosic RIN, if the primary 

carbon source is municipal solid waste [MSW]). If true, this would seem to undermine the 

intent of the GHG LCA calculation to actually indicate that the RINs represent an improvement 

over 2006 gasoline emissions, which may become deceptive through unfettered application of 

RECs. 

 In addition, noting that 10% of the US electricity supply is from renewable sources, much of 

which (e.g., hydro power) does not receive RECs, does this open up an alternative possibility of 

RIN generators taking advantage of the many existing renewable energy sources, absent any 

additional social benefit? These concerns are in addition to the acknowledged difficulties in 

tracking the RECs, and the potential for double-dipping by the REC generators to take state and 

local REC energy credit, plus Federal RIN fuels credit.

On the distribution side, EPA is proposing to allow cellulosic RIN credits for MSW biogas-derived 

electricity and natural gas (CNG, LNG) that enters the general commercial grid and pipelines, and is then 

extracted by a contractually bound transportation-related entity?

 The merging of electrons and natural gas in the commercial grid structures severs the direct link 

between the RIN generator and transportation user, relying instead on the strength of 

contractual linkages. The question regarding this proposal relates to the distinction between 

pre-existing and new MSW biogas facilities. For instance, what would prevent existing MSW 
Summary	of	Interagency	Working	Comments	on	Draft	Language	under	

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.

biogas facilities claiming that they are now producing gas or electricity for transportation needs, 

so long as they can identify and entice a recipient organization or group that is already or will in 

the future use either gas (bus companies) or electricity (amalgamated Chevy Volt owners)? 

What is EPA’s estimate of the impact of existing MSW biogas facilities on the social benefit that 

is anticipated from this proposed RFS change? If stated another way, what would prevent 

existing producers and consumers taking advantage of this opening to generate RINs based on 

activities that have already occurred, or would have occurred anyway? Indeed, Section 80-

1426(11)(i) appears to open a cellulosic RIN pathway to existing or new biomass (e.g., wood) cofired Electric Generating Units (power plants) if they can contract with a transportation related 

entity on their grid, possibly with existing electric transit train systems. 

Interaction with Tailoring Rule

 Would it be appropriate for EPA to address in the proposed rule, how this rule interfaces with 

the Tailoring Rule? Regulated categories and entities affected by this action include production, 

distribution and sale of transportation fuels, and the industries identified within the table on 

page 8. It is understood that the table is not intended to be exhaustive but rather to provide the 

reader with a guide for regulated entities. All regulated “categories” in the table are industrial 

sources, and the focus of this proposed rule is transportation fuels. At least one of the 

industrial source categories in the Table on page 8 of this proposed rule is also listed in Table 1 

of the Deferral for CO2 Emissions from Bioenergy and Other Biogenic Sources Under the 

Prevention of Significant Deterioration (PSD) and Title V Programs (See the July 20, 2011 

deferral posted at this website: http://www.gpo.gov/fdsys/pkg/FR-2011-07-20/pdf/2011-

17256.pdf). 

o Would it be possible that a regulated industry could have greenhouse gas emissions 

exempted under one regulation and regulated, or subject to the accounting framework

under another regulation? Would the Scientific Advisory Board draft reports that focus 

on CO2 Accounting for Emissions from Biogenic Sources be useful in sorting through this 

issue? 

(http://yosemite.epa.gov/sab/sabproduct.nsf/0/2f9b572c712ac52e8525783100704886!

OpenDocument&TableRow=2.2#2. )

 If the Tailoring Rule accounting decisions are to be made in 2014, how will EPA reconcile the 

decisions made on RFS to reflect these policies? One commenter suggested delaying the 

pathway decisions on the RFS rule until the Tailoring Rule accounting policy has been finalized. 

On page 19 it is stated that “EPA thus determined that all of the fuel generated from the 

biogenic portion of separated MSW would be considered cellulosic biofuel [when assigning 

RIN]”. This statement does not seem to be consistent with the Tailoring Rule concerning the 

exemption of biogenic CO2 emissions. Under the Tailoring Rule Deferral mentioned above, the 

emissions of “CO2 from the combustion of biogas collected from biological decomposition of 

waste in landfills, wastewater treatment or manure management processes” are all being 

evaluated under the deferral. The concern is that the RFS program would allocate RINs to a 

source that is fully or partially regulated under the biogenic portion of the Tailoring Rule. In this 

scenario, EPA would be endorsing the GHG emission benefits with RINs under RFS and possibly 

regulating the GHG emissions from biogenic sources under the Tailoring Rule.
Summary	of	Interagency	Working	Comments	on	Draft	Language	under	

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.

o What interactions will the RFS rule have with the offset provisions of the Tailoring rule? 

On page 21 it states, “EPA is proposing that biofuel made from the following cellulosic 

feedstocks will be able to generate applicable cellulosic RINs for 100% of the volume 

produced: crop residue; slash; pre-commercial thinnings and tree residue; annual cover 

crops; switchgrass; and miscanthus.” All of these feedstocks (crop residue, slash, precommercial thinnings and tree residue, annual cover crops, switchgrass, miscanthus, 

napiergrass, giant reed, energy cane, etc.) along with many others are being discussed 

under the Tailoring Rule Deferral. Comment suggests that EPA lay out the interactions 

between the rules, particularly the interactions between RIN and offset markets, as it 

may be confusing to affected entities when 100% of RINs under RFS are allocated and 

point source GHG emissions are discounted via the Tailoring rule. 

Crop Residue Definition

 Page 54 and page 137 - The phrase “left over” in the original definition of “crop residue” is 

meant to indicate that the use of a residue as a biofuel feedstock should not increase demand 

for the crop it is derived from, should not induce further crop production, and should not result 

in additional direct or indirect GHG emissions. The residue must come from crop production or 

processing for some other primary purpose (e.g., refined sugar, corn starch ethanol), such that 

the crop residue is not the reason the crop was planted. Further, the residue should generally 

not have a significant market in its own right, to the extent that removing it from that market to 

produce biofuels instead will result in increased GHG emissions. This appears to be a shift away 

from the principle that advanced biofuels should be derived from agricultural and forestry waste 

streams (e.g. algae and municipal solid waste) as opposed to primary food and feed raw 

materials.

o Commenter suggests EPA seek comment on this revision to the crop residue definition

including the use of feedstock as an advanced biofuel. How will EPA be able to ensure 

that changing the definition of crop residue will not create additional demand for corn 

beyond the mandate for corn-based ethanol? Would any other primary food and raw 

feed materials fall into this category in addition to corn kernel fiber? Does this apply to 

woody material as found in the definition of “renewable biomass?

o Commenter suggests EPA seek comment on how the change in the definition for crop 

residue may lead to “a significant increase in direct or indirect GHG emissions.” Were 

these potential emission increases factored into the lifecycle GHG reduction analysis? 

What is the threshold that EPA will use to define when the impact becomes significant? 

Commenter suggests that EPA take comment on this issue.

o The definition also indicates that this must be “existing agricultural land” – what is then 

the definition of agricultural land? Does it include pasturelands, marginal lands, 

haylands, etc.? Commenter suggests clarifying.

 How will EPA be able to ensure that corn kernel fiber is completely separated from the starch of 

the kernel when generating advanced biofuels? What scientific measure will biofuel producers 

utilize to verify that there is less than a certain amount of starch remaining in the corn kernel to 

avoid verifying corn-based ethanol as an advanced biofuel.
Summary	of	Interagency	Working	Comments	on	Draft	Language	under	

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.

From an economics point of view, it will likely be difficult to have a fixed definition of residue if 

you expand the definition in this manner, as many relevant variables can and do change with 

different policies, weather, and market factors. For example, wheat gluten is a co-product (or 

some may say by-product) of wheat starch production. The EU subsidized wheat starch 

production, increasing production of both starch and gluten. The gluten was exported to the 

US, depressing US gluten markets, while trade barriers protected EU starch from 

competing starch, including US corn starch. Some analysts thought the gluten market began to 

drive production more than starch as it became a lucrative export. The issue is to see how a 

residue or by-product can gain higher value under certain conditions. The commenter believes 

that the ethanol market and advanced RIN values could create similar distortions. If the 

cellulosic market is tight, then advanced RIN prices could rise sharply, and create an artificial 

market for corn residue. The commenter suggests explaining the difficulty in expecting a “fixed” 

situation for this residue.

 Page 137 & chart on page 55 - This definition and the chart give the suggestion that all bagasse 

is eligible (sugar cane, energy cane, sorghum) even though separation of the sugar cane and the 

bagasse does not occur until facility processing. How would EPA propose to discern that the 

bagasse would not be used for electrical generation instead of liquid fuels, as predominantly 

mills incinerate bagasse at this time to produce electricity? This would indicate that there is 

already a market for the bagasse consumption. Would this also indicate that there would be an 

impact on the bagasse market?