1

MEMORANDUM
Subject: Assessment of Statutory Factors for 2015

- 2017 biomass

- based diesel (BBD)

Applicable Volumes pursuant to CAA section 211(o)(2)(B)(ii)(I)

- (VI)

From: U.S. EPA, Office of Transportation and Air Quality

To: EPA Air Docket EPA

- HQ

- OAR

- 2015

- 0111

EPA’s primary assessment of the statutory factors for years 2015 through 2016 is that because the proposed advanced biofuel volume requirements for 2015

- 2016 reflect the maximum volumes of all advanced biofuels (including BBD) tha t can reasonably be expected to be produced and consumed, and because the BBD requirement is nested within the advanced biofuel volume requirement, we expect that the advanced biofuel volume requirement will determine the level of BBD production and import ; the same volume of BBD will be produced and imported regardless of the BBD applicable volumes that we require for 2015

- 2016. Since our decision on the BBD applicable volumes for 2015

- 2016 is not expected to impact the volume of BBD produced and imported during this time period, we do not expect our decision to result in a difference in any of the factors we are required to evaluate pursuant to CAA section 211(o)(2)(B)(ii)(I)

- (VI) , with the exception, as described in the preamble, that in considering
stat utory factor 211(o)(2)(B)(ii)(I II ) , we believe that our decision on the level of the nested BBD volume requirement can have an impact on the future development and marketing of non

- BBD advanced biofuels and can also be seen as sending a supportive or non

- s upportive signal to potential investors in BBD

. Similarly for 2017, even though we are proposing only the 2017 BBD requirement at this time and not the 2017 advance d biofuel requirement, we believe this same primary assessment is appropriate since, as in previous years, t he 2017 advance d biofuel requirement will be set to reflect the maximum volumes of all advanced biofuels (including BBD) that can reasonably be expec ted to be produced and consumed for 2017 , and it is the advanced standard that can be expected to drive BBD production and use

. As an additional supplementary assessment, we have considered the potential impacts of modifying the applicable volume of BBD f rom the proposed levels of 1.70 billion gallons in 2015, 1.80 billion gallons in 2016, and 1.90 billion gallons in 2017, based on the assumption that in guaranteeing BBD volumes at any given level there could be greater use of BBD and a corresponding decre ase in the use of other types of advanced biofuels for years 2015

- 2017. 1

1 Section 211(o)((2)(B)(i)(IV) of the Clean Air Act provides the statutory applicable BBD volumes for years 2009

– 2012. For years after 2012 , section 211(o)(2)(B) (v) specifies that the applicable volume for BBD cannot be less than the require ment for 2012 which was 1.0 billion, and section 211(o)(2)(B) (ii) requires that EPA determine the annual BBD requirement taking into consideration a review of the implementation of the program and an analysis of various factors, in coordination with USDA and DOE. In setting this annual BBD volume, the statute does not establish any numeric criteria or other means of weighing the importance of the often competing factors, or how to balance the overarching RFS program goals. Based on these statutory requir ements, EPA set the applicable volume for BBD at 1.28 billion gallons in 2013. As described in the preamble, a review of implementation of the BBD requirements to date and the expected annual rate of future commercial production of renewable fuels (in part icular, BBD capacity, ability of the advanced biofuel and total renewable fuel standards to drive BBD production, the2

However, setting a higher or lower BBD volume requirement than the levels proposed would only be expected to impact BBD volumes on the margin, protecting to varying degrees this adv anced biofuel from being outcompeted by other advanced biofuels. At present , the other advanced biofuels that could be affected include the following: sugarcane ethanol; ethanol from grain sorghum, food waste, or cover crops; renewable diesel from food wa ste or cover crops; renewable naphtha from food waste or cover crops; CNG/LNG from non

- cellulosic sources; and cellulosic biofuel. However, as part of this proposed rulemaking , as discussed in section IV of the preamble, we have carefully evaluated the pr oduction/import potential for cellulosic biofuels, and will continue to update this analysis prior to setting final cellulosic biofuel volume requirement s and corresponding percentage standard s that reflects this detailed analysis. We think it is unlikel y that our decision regarding a BBD applicable volume will have any impact on the production or import of cellulosic biofuels given our separate action in establishing a cellulosic biofuel standard that is nested within the advanced biofuel standard. Acco rdingly, the more likely affected biofuels are non

- cellulosic advanced biofuels, and our assessment below discusses the possibility that our decision regarding the BBD applicable volumes for 2015

- 2017 could impact the production and use of these non

- cellul osic advanced biofuels.
Our supplementary assessment is described b elow , together with a discussion of the statutory factors the EPA must consider as part of its decision

- making with regard to setting the applicable volume of BBD. Overall, the supplem ental assessment and statutory factors analysis specified in CAA section 211(o)(2)(B)(ii)(I)

- (VI) for the years 2015

- 2017, does not appear, based on available information, to provide a good reason for setting a higher or lower nested standard for BBD than 1.70 billion gallons in 2015, 1.80 billion gallons in 2016, and 1.90 billion gallons in 2017.

1

. Impact on the Environment

a

. Air Quality
Based on our emissions and air quality impact analyses from the 2010 RFS2 final rule,

we can assess the likely impacts on non

- GHG pollutants associated with setting the applicable volume of BBD at levels higher or lower than 1.70 billion gallons in 2015, 1.80 billion gallons in 2016, and 1.90 billion gallons in 2017.
The 2010 RFS2 analysis estimated the upstream and downstream emission impacts associated with various types of renewable fuels, including BBD , ethanol, renewable diesel and cellulosic diesel at full implementation of the RFS2 program in 2022. The BBD and advanced

benefits of providing additional support to the BBD industry through a higher nested standard, and the potential impact of our decision on the future commercial production of non

- BBD, non

- cellulosic advanced biofuels) led us to consider proposing applicable BBD volumes of 1.70 billion gallons in 2015, 1.80 billion gallons in 2016, and 1.90 billion gallons in 2017. In the analysis p resented in this memorandum, we have considered whether any of the other factors listed in the statute should lead us to propose higher o r lower BBD volume requirements. The volumes could be set as low as the statutory minimum 1.0 billion gallons or, for 2 015

- 2016 as high as the proposed advanced volume requirement minus the proposed cellulosic biofuel requirement3

biofuels volumes assumed in the RFS2 analysis led to increases in some criteria pollutant and air toxics emissions and decreases in others. 2 This indicates that some emissions increases or decreases might be associated with any change in the volume of BBD and other advanced biofuels. Depending on which of the competing advanced biofuels is compared to BBD , the emissions impacts of devoting a larger or smaller portion of the advanced biofuel standard to BBD will vary (assuming the advanced standard stays constant). However, given that other advance d biofuels also result in air quality impacts, and that the volumes at issue are relatively small when considered in the context of transportation fuel use throug hout the geographic area in which the RFS program applies (the continental United States and Hawaii), the overall impacts of marginal shifts between BBD and other advanced biofuels is expected to be small , and this factor does not appear to provide a good reason for setting a higher or lower nested BBD volume requirement.

b

. Climate Change
Pathways for advanced biofuels approved by EPA, including BBD produced from virgin vegetable oils such as soy, meet the definitional requirement that ad vanced biofuel s provide at least a 50% improvement in GHG performance compared to 2005 baseline petroleum fuels

. We believe the trend to increasing the use of waste fats, oils, and greases as feedstock for the production of BBD is likely driven by the lowe r cost of these feedstocks compared to virgin vegetable oils such as soy oil. Since BBD produced from waste fats, oils, and greases receives the same RFS compliance credit as BBD produced form virgin vegetable oils, the growth in use of waste fats, oils, and greases is indicative of their cost advantage as a feedstock. The cheaper waste fats, oils, and greases will tend to be used preferentially toward meeting the BBD and advanced biofuel standards prior to the use of virgin vegetable oils such as soy oil. Similarly, the volume of non

- food grade corn oil extracted from distillers grains and solubles produced during corn ethanol production has continued to grow as a source for BBD feedstock, again reflecting its lower cost compared to virgin vegetable oils like soy oil.
The available suppl ies of w aste fats, oils, and greases feedstock and non

- food grade corn oil feedstock are insufficient to produce even the statutory minimum volume for BBD of 1.0 billion gallons. For any volume above the 1.0 billion gallon minimum, it is appropriate, therefore, to consider the impact of producing BBD from soy oil, the feedstock that will most likely be used at the margin to increase production over levels that can be attained using waste materials and non

- food grade corn oil

. O ur analysis of soy

- derived biodiesel as part of the 2010 RFS rulemaking indicated that it provides a 57% reduction in lifecycle GHG emissions as compared to the 2005 petroleum basel ine. Other non

- cellulosic advanced biofuels which could compete with soy BBD within the advanced standard include : sugarcane ethanol (primarily from Brazil) ; ethanol from grain sorghum , non

- cellulosic portions of food waste and cover crops; renewable di esel from food waste or cover crops , naphtha from camelina oil, food waste or cover

2 A complete discussion of the RFS2 air quality analysis and its limitations can be found in Chapter 3 of the RFS2 Regulatory Impact Analysis (RIA). U.S. EPA 2010, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis. EPA

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- R

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- 006. February 2010. Docket EPA

- HQ

- OAR

- 2009

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crops; and CNG/LNG from non

- cellulosic sources. These alternative advanced biofuels range in GHG reduction performance, with the waste

- derived fuels providing the greatest reduction due to lack of any land use impact while biofuels made from crops having GHG reductions that are roughly comparable to soy biodiesel (e.g., sugarcane ethanol which has a 61% GHG reduction compared to gasoline; sorghum ethanol with estimated emis sion reductions of just over 50%;)

. Since for the years in question sugarcane and sorghum ethanol , and naphtha from camelina oil are the most likely marginal replacements for soy biodiesel, as suggested by feedstock availability and fuel production capaci ty, we believe b ased on these lifecycle GHG reduction calculations that if we set a marginally lower or higher BBD nested volume requirement and assumed this made a difference in how much BBD is ultimately used, that there would be no significant GHG impac t . Therefore, this factor does not appear to provide a good reason for setting a higher or lower nested BBD volume requirement.
We note, however, that certain advanced biofuels (e.g. ethanol from food waste or CNG/LNG from non

- cellulosic feedstock) have significantly superior lifecycle GHG performance than soy biodiesel. Setting the nested BBD volume requirement sufficiently belo w the advanced biofuel requirement, as reflected in the proposed volumes, should provide a continuing incentive for the further development and marketing of such fuels, and may result in potentially increased GHG reductions through RFS implementation over the long term.

c

. Wetlands, Ecosystems, and Wildlife Habitats

As in the rulemaking establishing the BBD volume requirement for 2013, EPA has completed a largely qualitative assessment of impacts on wetlands, ecosystems, and wildlife habitats , consiste nt with available information

. The comparison of impacts on wetlands, ecosystems, and wildlife habitats will depend on which alternative advanced biofuel would be displaced by BBD from virgin oils such as soy oil. As noted above, soy oil is the most lik ely feedstock for biodiesel production after the less

expensive waste fats, oils

, greases , and non

- food grade corn oil, and thus is the likely feedstock for producing marginal increases in BBD . Other non

- cellulosic advanced biofuels which could compete with BBD within the advanced standard include : sugarcane ethanol (primarily from Brazil) ; ethanol from grain sorghum , non

- cellulosic portions of food waste and cover crops; renewable diesel from food waste or cover crops , naphtha from camelin a oil, food waste or cover crops; and CNG/LNG from non

- cellulosic sources. The advanced biofuels that are mo st likely to be impacted by the level at which the BBD applicable volume is established include grain sorghum ethanol and sugarcane ethano l , and na phtha from camelina oil . Such biofuels, like soy biodiesel, are made from planted crops and therefore are likely to have impacts on wetlands, ecosystems and wildlife habitats which are roughly comparable to, yet still may differ from, those of soy

- based BBD. Depending on which of these alternative advanced fuels might replace
soy

- based BBD , the impacts of devoting a larger or smaller portion of the advanced biofuel standard to BBD will vary somewhat but , particularly given the relatively small volumes a t issue, we do not believe that this factor provide s a good reason for setting a higher or lower nested volume requirement for BBD

.5

We note, however, that certain advanced biofuels (e.g. ethanol from food waste

, CNG/LNG from non

- cellulosic feedstock , etc. ) are not made directly from crops, and would therefore likely have significantly lowe r impacts on wetlands, ecosystems, and wildlife habitats th an soy biodiesel. Setting the nested BBD volume requirement suffi ciently below the advanced biofuel requirement, as reflected in the proposed volumes, should provide a continuing incentive for the further development and marketing of such fuels; to the extent such fuels become increasingly significant players in the ad vanced biofuel market, there could be long

term reductions in impacts on wetlands, ecosystems, and wildlife habitats as compared to a scenario where the BBD volume requirement is set at a level that did not incentivize production of such fuels.

d

. Water Quality and Water Supply
As is the case when considering the impacts on wetlands, ecosystems, and wildlife habitats, the impact on water quality and water supply will depend on which alternative advanced biofuel is displaced by soy

- based BBD

. The a dvanced biofuels that are most likely to be impacted by the level at which the BBD applicable volume is established for the years in question include grain sorghum ethanol

, sugarcane ethanol and naptha from camelina oil . Such biofuels, like soy biodies el, are made from planted crops and therefore are likely to have impacts

on water quality and water supply that are comparable to, yet still may differ from, those of soy

based BBD. Depending on which of these alternative advanced fuels might replace soy

- based BBD , the impacts of devoting a larger or smaller portion of the advanced biofuel standard to BBD will vary somewhat but , particularly given the relatively small volumes at issue, we do not believe that this factor provide s a good reason for setting a higher or lower nested volume requirement for BBD

.

Some advanced biofuels s (e.g., CNG/LNG or ethanol made from food waste ) will have little or no impact on water quality and water supply. While production of such fuels is likely t o be limited in the short term

, setting the nested BBD volume requirement significantly below the advanced biofuel requirement, as reflected in the proposed volumes, should provide a continuing incentive for the further development and marketing of such fuels; to the extent such fuels become increasingly significant players in the advanced biofuel market, there could be long

- term reductions in impacts on w ater quality and water supply as compared to a scenario where the BBD volume requirement is set at a level that did not incentivize production of such fuels.

2. Impact on Energy Security
The wider use of any advanced biofuels, including BBD and sugar cane or sorghum ethanol, diversify the U.S. liquid fuel mix and provide energy security benefits. T his is true for both domestically produced and imported biofuels. Advanced biofuels, whether produced domestically or imported, will contribute, on the basis of energy displaced, to enhanced energy security. Based on these considerations, the supplemental analysis does not appear to suggest a6

distinct energy security advantage associated with selecting a ny particular BBD applicable volume for 2015, 2016 and 2017.

3. The Expected Annual Rate of Future Commercial Production of Renewable Fuels, including Advanc ed Biofuels in each Category

The preamble

, section II.C

, provides a n overview and discussion of the expected annual rate of future commercial production and import of total renewable fuels for 2015 and 2016, including advanced biofuels and BBD.
In order to meet the advanced biofuel standards being proposed for 2015 through 2017, we anticipate at least 1.70 billion gallons in 2015, 1.80 billion gallons in 2016, and 1.90 billion gallons in 2017 of BBD will be produced, distributed, and consumed. T he industry already has sufficient production capacity to meet the full 1.90 billion gallons being proposed for 2017 and there does not appear to be any limitations in supplying this volume to the market. We believe that an increase in the BBD volume to 1.70 billion gallons in 2015, 1.80 billion gallons in 2016, and 1.90 billion gallons in 2017 would strike the appropriate balance between providing a market environment where other types of advanced biofuels are incentivized and providing support and a deg ree of certainty for the BBD industry and the RFS program that are associated with increasing the BBD volume requirement to proposed levels. This approach does not limit additional BBD production.

4. Impact of Renewable Fuels on Infrastructure

a

. Delive rability of Materials, Goods, and Products Other than Renewable Fuels
We do not anticipate any significant impacts on deliverability of materials other than renewable fuels that might result from devoting a larger or smaller portion of the advanced biofue l standard to BBD for years 2015

- 2017

. The EPA evaluated in the RFS2 final rule the impacts on the U.S. Transportation network from the distribution of the total additional volume of biofuels that would be used to meet the RFS standards. Oakridge Nationa l Laboratory (ORNL) conducted an analysis of biofuel transportation activity from production plants to petroleum terminals by rail, barge, and tank truck to identify potential distribution constraints to help support the assessment in the RFS2 final rule. 3 The ORNL analysis concluded that the increase in biofuel shipments due to the RFS2 standards would have a minimal impact on U.S. transportation infrastructure. The majority of biofuel transportation is projected to be accomplished by rail. It was estima ted that biofuels transport would constitute only 0.4% of the total freight tonnage for all commodities transported by the rail system through 2022. 4 Given the

3 “Analysis of Fuel Ethanol Transportation Activity and Potential Distribution Constraints ”, Oakridge National L aboratory, March 9, 2009. To simplify the ORNL analysis, BBD volumes were assumed to originate at t he same points of production and to be shipped to the same petroleum terminals as the ethanol projected to be used to meet the RFS standards.

4 See sections 1.6.4 and 1.6.5 of the RFS2 RIA.7

small contribution of biofuel transport as a whole to total US freight tonnage, we do not believe that any particular BBD mandate would have a significant impact on the deliverability of materials other than renewable fuels. I n addition, to the extent there w as an impact, it would likely be comparable to impacts associated with t he use of other advanced biofuels that it might displace. As a result, we do not believe that this factor provides a basis for selecting a ny particular BBD applicable volume for 2015, 2016 and 2017

b . Sufficiency of Infrastructure to Deliver and Use R enewable Fuels

T he rapid growth of biodiesel use has been driven by the RFS program and tax subsidies. The blending and distribution infrastructure has demonstrated the ability to respond to these incentives. For the 2015

- 2017 time period we anticipate that this will still be the case. The market has room to absorb more BBD. T he proposed 2017 BBD level would represent about 3% of the diesel fuel supply . M ost engines/vehicles in

- use have been warranted by the manufacturer for the 5% leve l , and most manufacturers now have at least some product offerings warranted for up to 20% biodiesel. Cold temperature concerns may limit blend concentrations in northern cities during winter conditions , but this cold weather limit can be offset with grea ter use during the summer months. Furthermore, a portion is likely to be renewable diesel, for which there is no blending limit or winter use concerns

. Finally, t he National Biodiesel Board (NBB) has extensive efforts underway working with the vehicle an d engine manufacturers to continue to expand product offerings capable of operating on B20, working with their membership to improve fuel quality, and working with dealers and technicians to clear away obstacles standing in the way of expanding biodiesel a cceptance in the marketplace. These should continue to bear fruit

. In sum, we do not expect sufficiency of infrastructure to deliver and use renewable fuels
to be a constraint for the proposed, or for marginally higher or lower nested BBD applicable volume requirement s, and we do not believe this factor provides a good r eason for selecting higher or lower BBD applicable volumes for 2015

, 2016 and 2017

.

5. Impact of the Use of Renewable Fuels on the Cost to Consumers of Transportation Fuel and on the Cost to Transport Goods
In, the preamble, we provide illustrative cost estimate s for hypothetical example s in which either soybean oil biodiesel or sugarcane ethanol fills the entire change in the proposed advanced biofuel mandate s from 2014 through 2016. W e estimate the difference in the price per
energy

- equivalent gallon of soybean oil biodiesel or sugarcane ethanol on the one hand, and the petroleum

- based fuel they would replace on the other. We then multiply this difference by the
year

- on

- year change in the proposed advanced biofuel volume requirement. More detai l on this analysis can be found in the Memo to the Docket titled “ Illustrative Costs Impact of the Proposed Annual RFS2 Standards, 2014

- 2017

. ” This memo, for example, estimates the cost of using soybean oil biodiesel to replace petroleum diesel ranges from $ 218 million to $ 229 million in 2015 and from $ 483 million to $679 million in 2016 , while the cost for sugarcane ethanol to replace gasoline to satisfy the proposed year to year ch anges in the advanced biofuel volume8

mandate ranges from $ 228 million to $ 615 million for 2015, and $ 424 to $ 1, 303 million for 2016. Th ese cost estimates however, are based on current market conditions, and it is likely that market conditions will vary over time

. The market will determin e which advanced biofuels are used to mee t the portion of the advanced standard based that is not dedicated to BBD. To the extent that cost considerations favor BBD, the cost benefit can be accomplished either through setting a higher BBD nested standard, or allowing the market t o choose BBD over competing products in meeting the advanced and total RFS standards . Thus, this factor does not appear to clearly favor setting either a higher or lower BBD nested standard than the levels proposed.

Setting a higher BBD volume requirement would only be expected , under the assumptions associated with this supplementary assessment, to impact biodiesel volumes on the margin

, protecting them from being outcompeted by other advanced biofuels

. Thus, the extra BBD volume requir ement would merely replace other advanced renewable fuels that could be used to meet the advanced biofuel standard. As noted in the preamble

, leaving room within the advanced standard for non

- BBD advanced biofuels can incentivize the development and production of non

- BBD advanced biofuels which may eventually provide a cost benefit as compared to BBD. In addition, this approach may temper to some extent BBD prices, by providing competition between the marginal BBD production volumes and other types of advanced biofuels. Therefore we believe that this factor supports maintaining the BBD volume requirement at a level sufficiently lower than th e advanced biofuel volume requirement to incentivize production of non

- BBD advanced biofuels , consistent with today’s proposal.

6 Impact of Renewable Fuels on Other Factors

a

. Job Creation and Rural Economic Development

Executive Order 13563 directs federal agencies to consider regulatory impacts on job creation and employment. According to the Executive Order, “our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competi tiveness, and job creation. It must be based on the best available science” (Executive Order 13563, 2011). Regulatory employment impacts are difficult to disentangle from other economic changes affecting employment decisions, over time and across regions and industries. Labor market responses to regulation are complex. They depend on labor demand and supply elasticities and possible labor market imperfections (e.g., wage stickiness, long

- term unemployment, etc.). The unit of measurement (e.g., number of j obs, types of job hours worked, and earnings), may affect observability of that response. Net employment impacts are composed of a mix of potential declines and gains in different areas of the economy (e.g., the directly regulated sector, upstream and down stream sectors, etc.) over time.
If the U.S. economy is at full employment, even a large

- scale environmental regulation is unlikely to have a noticeable impact on aggregate net employment. Instead, labor would primarily be reallocated from one producti ve use to another and net national employment effects9

from environmental regulation would be small and transitory (e.g., as workers move from one job to another). If the economy is operating at less than full employment, economic theory does not clearly indicate the direction or magnitude of the net impact of environmental regulation on employment; it could cause either a short

- run net increase or short

- run net decrease (Schmalansee and Stavins, 2011).

To the extent that the guaranteed volumes cause m ore BBD to be used to fulfill the advanced biofuel volume, there will be more employment and wage income earned producing BBD , but less employment and wage income in the production of other advanced biofuels that could be used to satisfy the advanced biofu el mandate. Given the small changes in job and wage income across the advanced biofuel sector that would likely result from changes in BBD volume, we do not believe that this factor provides a compelling reason for setting a higher or lower nested standa rd for BBD.

b

. Price and Supply of Agricultural Commodities

In Sec II

. F

. of the preamble, we provide illustrative cost estimate s for a hypothetical scenario in which soybean oil BBD fills the entire year

- to

- year increase in the proposed advanced biofuel standard. As part of this scenario analysis, w e estimate price impacts on soybean oil from the higher demand for soybean oil BBD. We similarly analyzed a cost impact assuming Brazillian sugarcane ethanol satisfied the entire increase in the advanced stan dard. More detail on this analysis can be found in the Memo to the Docket

. To the extent that the guaranteed volumes cause more BBD to be used to fulfill the advanced biofuel volume, there may be small increases in the price of soybeans and soybean oil

, but this should then result in offsetting price and supply impacts on feedstocks used to make other advanced biofuels such as grain sorghum and sugarcane. As a result, we do not believe that this factor provides a good reason for eithe r raising or lowering the nested standard for BBD.

c. Food Prices
As mentioned previously, in Sec II

. F

. of the preamble we estimate wholesale price impacts on soybean oil for a hypothetical example in which the entire change in the year

- to year
propo sed advanced biofuel volume mandates is met with soybean oil BBD. More detail on this analysis can be found in the Memo to the Docket titled “ Illustrative Costs Impact of the Proposed Annual RFS2 Standards, 2014

- 2017”.
To the extent that the guaranteed volumes associated with a BBD standard cause more BBD to be used to fulfill the advanced biofuel volume, there may be small increases in the price of soybeans, but this should then lead to offsetting price and supply impacts on crop feedstocks10

used to make other advanced biofuels such as grain sorghum and su garcane. Given the offsetting impacts and given that feedstock price is only one component in determining food prices, we would not expect any significant impact on food prices to result from setting the BBD nested volume requirement; therefore we do not believe that this factor provides a good reason for either raising or lowering the nested standard for BBD.