## Summary of Interagency Working Comments on Draft Language under EO

12866 and EO 13563 Interagency Review. Subject to Further Policy Review.

EO 12866 Interagency Comments on U.S. Environmental Protec tion Agency (EPA) draft final rule titled, “ Renewable Fuel Standard Program: Standards for 2014, 2015, and 2016 and

Biomass

- Based Diesel Volume for 2017 ,” RIN 2060

- AS22

1. BBD: The commenter would like EPA to consider whether the environmental safeguards written into the law can supersede some of the grandfathered palm oil biodiesel imports. For example, BBD falls into th e advanced biofuels category and thus is expected to have a 50 percent reduction in greenhouse gas emissions. With indirect land use change, it is almost certain that imported palm oil biodiesel does not qualify. If the safeguards cannot apply, this

review er strongly suggests reducing the BBD requirement (and the subsequent requirements in higher nests). It is not helping the environment to push these levels and a reasonable read of the legislation suggests that it was not Congress’ intent to encourage palm oil biodiesel imports.

2. Conv entional biofuels: The commenter is concerned about the increase in conventional biofuels implied by the 2016 levels. Given that there is very little environmental benefit from these, the only argument for them is to push the i nfrastructure development. Yet is very apparent that the incentives in this market are not leading to major additional infrastructure development in E85. There is clear evidence that the passthrough of RIN prices to retail E85 prices is minimal (e.g.,

see Knittel et al. 2015). Given this, the effect of the higher mandate for conventional biofuels will likely be to draw down on the RIN bank. These issues appear to be insufficiently discussed. Mandating fewer conventional biofuels (closer to the value in the NPRM) seems like a logical approach in light of the minimal passthrough (which implies a limited ability to push through the blendwall with E85). In a future rulemaking, changing the point of obligation may help with this issue, but that is likely too majo r of a change to make for this final rule.

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3. EPA has not provided a sufficient justification that there is adequate domestic supply for the waiver level of 3.8 billion gallons of advanced biofuel, and therefore the overall 18.1 billion gallo ns of renewable fuel

. If the required volumes of advanced and total biofuel exceed adequate supply, it could potentially lead to significant volatility in the D5 and D4 RIN values in

2016.

The revision in the advanced category (which is primarily ac counting for biodiesel and renewable diesel fuel) from 3.4 billion gallons to 3.8 billion gallons would require sufficient production capacity and market and regulatory conditions sufficient to support these fuels.

Such conditions existed from 2012 to 2013 and resulted in an increase on the same order as that proposed from 2015 to 2016. At the time, biodiesel was one of the only available market to transportation fuel blenders to readily meet their RFS obligation because of the E10 blendwall. Additionally , the biodiesel blenders tax credit was available providing additional incentive to produce and blend biodiesel. On the other hand, the RFS itself could drive improved regulatory conditions that would spur real world production from the estimated 2.8 bill ion gallons of existing biodiesel capacity and the expected 375 million gallons of capacity that appears to be planned or under construction. Further, the Senate is currently considering an extension of the

biodiesel tax credit similar to what was availabl e in the past.EPA should either change the advanced biofuels volume and overall requirements in 2016 to be

consistent with the current justification or update the justification with additional data or other resources to support the higher level and submi t the updated justification for interagency

review.

4. The commenter recommends strengthening the language to indicate EPA’s intention to continue to set aggressive standards that work towards the statutory targets to provide certainty despite a requirement for annual rulemaking. This serves two purposes. First this

recogn izes the long planning horizon needed for advanced and cellulosic biofuel deployment. In addition, it ensures that the market barriers currently used to justify use of the general waiver are expected to be overcome and will not serve as a permanent cap on the volume of biofuels in

the market.

5. The commenter supports the notice of intended action to enable a robust bioprocessing industry with co

- processing, in which production can occur at multiple facilities while still generating RINs. This action can ena ble companies to leverage, share, and co

- fund existing and new infrastructure to reduce cost. With extensive exp erience in GHG LCA analysis, the commenting agency can support EPA in determining GHG implications of co

- processed products to ensure accurate a ccounting while meeting the intent of the rule.

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6. The draft final standard requires 380 million gallon more than the blendwall. The proposed standard from May appears to have only required 310 gallons more than the blendwall. The incremental 70 million gallons is more than what would correspond to the increase in actual gasoline demand (which is incorporated into blendwall calculations).

a. How did EPA arrive at the 380 million gallons difference? Why not more/less? How

does th is correspond to the accounting on page 112 which has a difference of 1.12 vs. 0.84 in the draft? Is that a better measure of stringency in the final vs. the draft?

b. What is the purpose of this greater stringency given that EPA does not expect the

standard to lead to significantly more E85 penetration in 2016, has alternative levers to increase biodiesel production and imports, and wants to maintain a RIN buffer at

current levels?

c. Congress certainly intended the RFS to breech the blendwall, but does EPA ha ve reason to believe Congress intended to do this with conventional biofuels? How about with imported conventional biofuels ? If it is not clear, then does EPA support this goal and pushing up total volumes a climate

- friendly and economically efficient way to accomplish this?--------------------------

7. The commenter requests EPA to revise the language concerning the Brazilian estimates due to their importance as a trade partner for ethanol. US exports to Brazil surged in 2015. One of the

concerns with the current language is that it implies Brazilian ethanol would be less desirable in its RIN category in terms of GHG emissions.

---------------------------

8. Please provide the following memos to the docket:

Footnote 68 (p. 59) Projection of annual renewable fuel supply in 2015

Footnote 77 (p. 73) analysis of historical errors in projections of gasoline and distillate demand

from EIA

Footnote 87 (p. 77) estimating e85 consumption in 2013

Footnote 90 (p. 79) an assessment of the impact of RIN prices o n the retail price of e85

Footnote 94 (p. 82) estimating e0 use in recreational marine engines

Better yet, you might consider asking Peter thought that these memos are good enough.

9. p. 93: Suggest deleting “as relative currency valuations” since firms hed ge against currency

fluctuations with financial instruments.

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10. Based on the discussion presented below, the commenter suggests increasing the conventional gap by 200 million gallons; i.e., setting the conventional gap to 14.5 billion gallons to address

the blendwall issue. EPA may want to consider increasing the non

- advanced total to 14.5 bgal in 2016 to further incentivize pushing beyond the blendwall and a larger increase in the 2017 biodiesel level to provide an easier path to showing continued progress in growing the advanced pot in years beyond 2016. As formulated now, it is more likely that the D6 RIN price will not be sufficient to encourage additional and growing levels of sales of higher blends nor

the investments in infrastructure to facilitate the growing levels of second generation biofuels that are required in future years. By increasing the conventional gap by 200 million gallons, there will be increased emphasis on meeting the total with higher levels of blende d ethanol.

EPA’s expressed interest in showing strong growth in advanced biofuels in future years paired with their concerns over biodiesel capacity that led to only a 100 million increase in 2017 has the potential to significantly limit the ability of EP A to increase the advanced biofuel volumes for 2017 (not set by the proposed rule) without driving significant increases in the import of advanced sugar cane ethanol. Without additional incentives to push past the blend wall

– say by increasing the conven tional levels (say to 14.5 bgal in 2016)

– the proposed final level by EPA’s own logic will lead to a higher level of D6 renewable diesel (palm) for 2017 and out years to meet the conventional standard and increase exports of domestically produced ethanol

.

a. The volumes for 2014 and 2015 are set in such a way as to be RIN neutral in terms of

carry

- out stocks. This approach, particularly for 2014, is consistent with their earlierapproach as is their approach toward defining ‘available supplies’ as including the ability to retail and consume such fuels. In defining it this way they can, and do, switch between physical availability and their perception of potential consumption to set the

standards for 2016.

b. In setting the tot al standard, in essence setting the amount of fuel that can be consumed beyond the advanced mandate, EPA focus’ on ethanol use. From this EPA asserts a limit on E10 consumption, proposes an E85 consumption level. This is in effect set s ‘supply’ as their p erceived limits of ‘demand. ’ However, when it comes to the other portions of achieving the conventional renewable fuel standard of 15.0 billion gallons, they switch to actual physical supplies as the limiting factor.

Table II.B.6

- 2 Meeting a 15.0 Billion Gallon Allowance for Conventional Renewable Fuel

with Both E85 and Biodiesel (million gallons)

E10 138,916 a
E85 400 b

Total ethanol 14,188

Non

- ethanol (ethanol

- equivalent) 812

Non

- ethanol (biodiesel

- equivalent) 540

Total renewable fuel 15,000

a This level is less than the amount of ethanol that can be used as E10 in all 2016 gasoline, because some of that gasoline is used in this scenario to make E85.

b Assumed to contain 74% denatured ethanol.

c. This approach to building up to the conventional volume seems to limit physical availability to US production with more limited import response in the case of D4 imports and an explicit preference not to fill a higher conventional fuel allowance through D6 biodiesel, all of which is imported, despite EPA assertions the fuel origin is irrelevant and instead they appear to seek to limit D6 imports due to lower GHG scores of the fuel. So while it may be ‘obtainable’ they chose to shift these volumes into the advanced category while also citing physical ava ilability of the fuel (before blending) as the constraint on setting mandates at a higher level. So despite those D6 fuels being

available 1 , this fuel appears not to be allowed to contribute to a higher mandate despite physical availability. One could argu e that the availability of this fuel to the market place should be incorporated into the setting of the total (and therefore conventional gap) of

the mandate.

d. When it comes to estimated potential consumption of ethanol in 2016 the error

correction for 2014, which identified ethanol consumption being nearly 350 million gallons higher than EPA initially estimated, has no effect on EPA’s perception of potential consumption. That is to say, in this instance, estimated future consumption doesn’t seem to be g uided by observations of how compliance and consumption are

1 We know this fuel is available for import, if incentives are right, because it is being produced overseas, generates RINs which are only then available domestically when the fuel is imported. The creation of the RINs validates the fuels physical existence

.today. For example, in the figure below, expectations for years beyond 2014 are not influenced by the fact that they had to make a significant (0.2%) increase in their 2014 number from the propos ed rule.

Figure II.E.2

- 1

Ethanol Concentration of Gasoline

Source: EIA's Short Term Energy Outlook

e. In terms of E85 consumption, the EPA uses ‘ demand’ as supply, but here the agency

examine s actual E85 consumption at a national level and assert s that RIN prices are not passed through to consumers and therefore the mechanism which would incentivize additional E85 consumption through RIN prices is ineffective. This discussion which starts on page 74 differs from the proposed rule in that an examina tion of data from

Minnesota 2 , perhaps the most complete E85 consumption data, was abandoned in the text of the final rule. The Minnesota data suggests that at the station level, high RIN prices did lead to discounting E85 to consumers and a significant inc rease in the volume of sales. As the RIN prices quickly returned to lower levels, the incentives disappeared and sales fell. This suggests that in fact the mechanism of pass through and consumer response does act as economic theory would suggest despite EP A assertions. 3 The period over which conditions were sufficient to induce additional E85 consumption was as short as a few months and indeed not all stations lowered prices. At a national level and over a longer period of time, such actions are likely mas ked in the data. The EPA seems aware that such response takes time:

2 https://mn.gov/commerce/energy/images/2015

- 09Sept

- E85.pdf

3 EPA states on page 75: EPA examined available data in an attempt to determine whether or not higher RIN prices resulted in lower E85 prices at retail, and whether lower E85 retail prices lead to substantial increases in E85 sales, as economic theory would suggest would be the case when FFV owners receive better value for purchasing E85 rather than

E10.( Pg 30 ). “...In the longer term, sustained ambitious volume requirements are necessary to provide the certainty of a guaranteed future market that is needed by investors; the development of new technology won't occur unless there is clear profit potential, and it requires multiple years to build new production, distribution, and consumption capacity...”

f. Such adjustments in the E85 market appear to be judged on a different scale. Further the annualized approach to E85 ‘supply’ (consumption) ignores the significant seasonality in E85 use. If ‘supply’ is evaluated as the ability to consume, then such an ability to consume should be judged on a shorter time frame. E85 consumption in 2013, a year with significant volatility in RIN prices, was three times higher in August (near the highs of RIN prices) than it was in January of the same year. To judge the ability of the market to consume E85 on the average of those 12 months vs the real ity of the markets ability to consume E85 at peak demand, further skews the analysis to favor lower estimated E85 ‘supply’. 4 EPA back s away from using E85 to expand renewable

fuel use but asserts there is no specific support for it.

( Pg 49 ) “...However, t his general responsibility does not require obligated parties to take actions specific to E15 and/or E85 infrastructure, as the RFS program does not require ethanol specifically...”

g. The period of analysis for statements by EPA such as “ Although 150 million gallons is about twice as high as the estimate provided by EIA, it still does not indicate an overall preference among FFV owners for E85 when E85 has been available. Indeed, based on other comments received it is clear that the exper ience at retail has b een mixed, “ are at too aggregated a level and over to aggregated period of time to fully explore what is a fairly new market dynamic, much of the total and conventional mandate levels are built on this assumption by EPA. EPA also comments on a primary con straint being E85 station availability, here they seem open to further expansion, noting USDA involvement

in infrastructure investment 5

. The concern is of course the circularity of the argument as RFS levels which are insufficient to drive E85 consumption result in low levels of E85 consumption which then lead to lower mandate levels. A closer examination of the economic incentives at a more micro scale may suggest greater consumer response and justify a more aggressive approach. Again the Minnesota data a nalysis in the proposed rule was dropped in the final. The commenter suggests that EPA incorporate the distinction about national level and regional level consumption patterns in the final text to allow for the notion that E85 sales can be responsive to RIN prices as evidenced by the MN experience. Note also that EIA proj ects E85 sales in the AEO to be in excess of 300 mgal (or 270+ million gallons of ethanol content).

4 EPA states on page 77: All stakeholders agreed that actual sales of E85 in the past have been low. A number of parties referenced certain E85 estimates from EIA of about 77 million gallons in 2014.

5 EPA states on page 78: A number of stakeholders cited a recent grant program sponsored by USDA that is designed to provide a total of $100 mi llion for updated and expanded infrastructure at retail for higher level ethanol blends. 5 This is an important program that not only demonstrates the U.S. commitment to expanding the use of renewable fuels, but helps to boost private investment in infrast ructure by providing matching funds. It will undoubtedly increase the number of retail stations offering E85, but it is unclear how many new E85 stations would result from it in 2016.h. The availability of biodiesel and renewable diesel from grandfathered plants overseas seems to factor in the allocation of volumes to mandates (shifting it from conventional to advanced classifications) instead of being additive to the mandates. That is their availability (as determined by RIN generation, not necessarily shipments to the US) is ignored and not additive to the mandate but instead this fuel a vailability is now determined by overseas policies, exchange rates and economic incentives to ship to the

US.

Figure II.E.3.iii

- 1

Biodiesel and Renewable Diesel Imports and Exports (2011

- 2015)

“...Nevertheless, as evidenced in 2015 we have clearly been experiencing some upward growth in imports of biodiesel and renewable diesel. Much of the increase in biodiesel imports in 2015 has been from grandfathered facilities that are exempt from the 20% lifecycle GHG reduction requirement. Fuel from these faci lities qualifies for D6 RINs that can be used to satisfy the total renewable fuel standard...”

On biodiesel imports from Argentina (text below) one has to understand that the data

show n represent import da ta, that is the monthly data are for when the product arrived at US ports. One could expect a significant lag from the announcement of a new policy and the arrival of significant volumes.Figure II.E.3.iii

- 1 Imports of Biodiesel from Argentina

Source: Energy Information Administration

“...Additionally, the annualized volume of imported Argentinean biodiesel for 2015, based on data collected through July, is 94 million gallons. This level is far less that the potential volumes projected by the National Biodiesel Board and several others. Brazil has also just recently proposed increasing its biodiesel mandate from 7% to 8% in 2016, which may provide another attractive destination for exports of Argentinean biodiesel. 6 Finally, Argentina has changed the applicable tax on exported biodiesel several times since the beginning of 2015, highlighting the uncertainty associated with projecting potential future imports into the U.S. 7 Based on these facts, we believe that the volume of biodiesel and renewable diesel imported from Argentina in 2016 is likely to be far less than the several hundred million gallons suggested by some commenters...”

6 "Brazil Proposes Raising Biodiesel Mandate To B10," docket EPA

- HQ

- O AR

- 2015

- 0111.

7 "Argentina changes biodiesel export tax

- Biofuels Digest," docket EPA

- HQ

- OAR

- 2015

- 0111.i. A comparison of the following tables suggests that the EPA expects imports of 300 million gallons (2,500

- 2,200) of D6 biodiesel and renewable diesel in 2016 (o r as much as 450 million D6 RIN equivalents).

11. Table II.E.5

- 1 Volumes Used To Determine Total Renewable Fuel Supply in 2016 Volume (million gallons) Million RINs

Ethanol 14,051 14,051

Biodiesel and renewable diesel 2,500 3,750 Biogas 210 210

Other non

- ethanol renewable fuels 100 100

Total 16,861 18,100 a

a We believe it is reasonable to round the sum of 18.11 to 18.10 bill gal.

Table II.F

- 1 Volumes Used To Determine Advanced Biofuel Supply in 2016 Volume (million gallons) Million RINs

Cellulosic biofuel 230 230

Biodiesel and renewable diesel 2,200 3,300 Imported sugarcane ethanol 200 200

Other non

- ethanol 100 100

Total 2,630 3,800 a

a We believe it is reasonable to round the sum of 3.83 to 3.80 bill gal.

Those levels suggest that meeting the D6 obligation of approximately 14.3 billion gallons, would come from essentially ethanol in E10 that is not advanced, or about 13.85 million gallons, and about 450 million gallons of D6 biodiesel and renewable diesel. Imported sugarcane ethanol would effectively (at 200 million gallons) meet the E85 assumed sales in 2016

--- a lower level than projected by EIA.

11. (Pg 31) The commenter also suggested deleting the entirety of or the last part of the following

text:
“... Constraints on the availability of biodiesel to U.S. consumers could include competing uses for feedstocks, international competition for biodiesel, the inconsistent nature of the biodiesel subsidy, limited investments to ensure quantity and quality of bio diesel product, limited infrastructure to distribute and blend biodiesel, and the limited ability of the market to consume biodiesel ...”

12. (Pg 46) Provide additional justification of this statement from the literature. The underlined text seems very particul arly speculative as written:

“... Just as importantly, biodiesel volumes on the order of 5.5 billion physical gallons in 2016 are far in excess of what could actually be consumed in this short timeframe. This volume of BBD would constitute about 10% of the diesel pool in 2016. [1] Although most medium and heavy

- duty engine manufacturers warrant the use of blends up to B20 in their more recent models, some light

- duty engine manuf

acturers do not, and many highway and nonroad diesel engines that were produced in the past but are still in use today are warranted for no more than 5% biodiesel. [2] Also, a s pointed out by CountryMark Cooperative Holding Corporation, biodiesel concentrations in the winter months are sometimes kept to lower levels by engine owners due to cold weatheroperability and storage concerns, and some parties avoid selling biodiesel a t all during winter

months. Constraints on the use of biodiesel at concentrations above 5% due to engine warranty limitations, plus resistance on the part of some parties to using biodiesel in winter months, means that a nationwide average of 10% biodiesel in the diesel pool, for an entire calendar year, is not reasonably achievable in 2016. We acknowledge that the National Biodiesel Board has extensive efforts underway working with the vehicle and engine manufacturers to continue to expand product offeri ngs capable of operating on B20, working with their membership to improve fuel quality, expanding infrastructure to address cold temperature issues, and working with dealers and technicians to clear away obstacles standing in the way of expanding biodiesel acceptance in the marketplace. [3] There are also efforts to increase the use of biodiesel in heating oil. These will continue to bear fruit, allowing the biodiesel volume t o continue to rise over time, but not to the levels that would be needed in 2016 if 5.5 billion gallons of biodiesel were to be required ... “

13. (Pg 48) Same as above. Provide additional justification of these statements:

“... Even if some portion of the incre ase were supplied from imports, the total volume of biodiesel supplied to diesel engines would more than double in comparison to that supplied in 2014, requiring that distribution, blending, storage, and dispensing routes would need to be expanded in

an ex tremely short period. We do not believe that this is possible in 2016. As a result, we do not believe that the statutory target for advanced biofuel can be met in 2016 ...”

14. (Pg 97) This language seems to contradict

– how can infrastructure be constraining if EPA is simultaneously pointing out examples where the infrastruc ture is clearly not the problem? For example, the background data is not supporting t he statement that “ suggest that increasing the number of refueling stations offering biodiesel blends c ould be a significant constraining factor to the supply of biodiesel in 2016 .”

“... There is some indication that the number of refueling stations willing or able to market biodiesel may become a factor that constrains the growth of biodiesel supply in the U nited States, either in 2016 or in future years. A number of retail locations that market diesel fuel are only offering biodiesel blends that exceed 5% (B5), which is the maximum amount of biodiesel for which many diesel vehicles are warranted. For examp le, the LOVES truck stop chain is a major retailers of biodiesel. A recent review of their website indicated that 221 of their 354 stations were selling B15. This is despite the fact that many of the newer, and especially the older heavy

- duty

diesel tru ck engines were only designed and warranted for biodiesel blends up to B5. Similarly, in the state of Illinois nearly all sales of biodiesel blends are reported to be at B11 in order to benefit from the state tax subsidy, despite the fact that not all veh icles and engines have been designed and warranted for its use. This may suggest that increasing the number of refueling stations offering biodiesel blends could be a significant constraining factor to the supply of biodiesel in

2016. Were more retail ou tlets willing and able to dispense biodiesel, then, existing volumes of biodiesel could be distributed at concentrations B5 or less without raising any warranty

concerns... ”

15. The GHG benefits of advanced biofuels relative to conventional biofuels are likely overstated. EPA has not updated the analysis of the GHG benefits of conventional biofuels since the RFS was put into place. There have been significant improvements in technology and initial concerns of

GHG from indirect

- l and use change have not material ized. More generally, the EPA assumption that corn ethanol has lower GHG benefits than advanced biofuels is based on the conclusion of the life cycle analysis (LCA) that it conducted on cornethanol in as part of the 2010 Regulatory Impact Analysis of th e RFS2. This LCA was done in

2010 and so it reflects a projection of the direct and indirect GHG emissions associated with a

state

- of

- the

- art natural gas powered ethanol refinery in 2022. The LCA projected 2022 emissions for the following 11 components of corn ethanol production.

1. Domestic farm inputs and fertilizer N 2 O

2. Domestic land

- use change

3. Domestic rice methane

4. Domestic livestock

5. International land

- use change

6. International farm inputs and fertilizer N 2 O

7. International rice methane

8. International livestock

9. Fuel and feedstock transport

10. Fuel production

11. Tailpipe

Since 2010,the commenter has new data, improved model capabilities, and empirical studies that strongly support the position that corn ethanol is currently on an emissions pathway that is

muc h more positive, and will result in a much improved GHG profile in 2022 than was

determined in EPA’s RIA. For example, with respect to component 5, new data shows that

between 2003 and 2010 deforestation in the Amazon fell four

- fold while U.S. corn ethanol production increased four

- fold (deforestation in Brazil’s Amazon was the largest component of

indirect land

- use change emissions in the LCA). Similarly, with respect to components 1,6,7,9 and 10, emissions are estimated using coefficients and other inputs from the Argonne National Laboratory’s GREET model. The GREET model has been significantly revised and updated since 2010. Finally, with respect to components 2 and 5, recent work by Babcock and Iqbal (see: ( www.card.iastate.edu/publications/dbs/pdffiles/14sr109.pdf ) conclude the primary land

- use adjustment made by farmers both within the U.S. and internationally to the increased U.S. and global demands for (non

- palm oil) biofuels was to use existing cropland more intensively (including increased double cropping and farm chemical use. Intensification of existing cropland was not considered in the EPA 2010 LCA.

USDA suggests EPA provide some caveats indicating that th e lifecycle analyses of petroleum fuels and biofuels have likely changed since the 2010 rulemaking and that additional review and study is warranted in the near future to assess changes to key parameters used in the 2010

assessment.

12. What does EPA plan for resetting the mandates in the future? Future investment and growth in biofuels capacity and demand will depend on the signals sent by EPA regarding how the statutory levels will be reset sometime in the relatively near future. Section I. D. is missing

d iscussion of waiver requirements and resetting of the statutory standards.

13. In discussing the reasons why biofuels have not reached the levels mandated in the RFS2, there is no mention of the large drop in the price of petroleum since 2010 (when EISA was p assed) or the increased domestic and Canadian production of natural gas and petroleum. For example,

Table II.E.1

- 1 does not mention petroleum prices. Please provide a discussion of the impact of petroleum prices and compliance with the mandate and sales o f higher level blends.14. With respect to Pg 24, please confirm that USDA has provided EPA the values they plan to insert

for the XXX’s in the following:

“... Based on data provided by the USDA, we have estimated that U.S. agricultural land reached

XXX million acres in 2014, and thus did not exceed the 2007 baseline acreage...” (the 2007 baseline acreage was given as 402 million acres on page 23).

“... The total agricultural land in Canada in 2014 is estimated at XXX million acres. The total acreage estimate of XX

X million acres does not exceed the trigger point for further investigation ...” (should also add a footnote clarifying this “trigger point”)

15. The commenter recently provided the EPA data on land use on Agricultural Cropland (FSA sourced), acres enrolled in the Conservation Reserve Program (CRP and FSA sourced), the Grassland Reserve Program (GRP), the Wetlands Reserve Program (WRP), and the Agriculture Conservation Easement Program for Wetlands Reserve Easements (ACEP

- WRE) and Agriculture Land Easements (AC EP

- ALE). The commenter would like to see the estimates of agriculture land based on the data provided for 2014 and 2015.

Further, the 2014 Farm Bill terminated the WRP and GRP as of 2013 and initiated the Agriculture Conservation Easement Program with “We tlands Reserve” and “Agriculture Land” easements. As a consequence the ACEP

- WRE and ACEP

- ALE represent a continuation in basic objectives and goals of the original WRP and GRP and acreage enrolled in the easement programs would represent a good/fair proxy of WRP and GRP acreage. Text should reflect this modification in methodology.

16. (Pg 31) EPA writes that “... Constraints on the availability of biodiesel to U.S. consumers could include competing uses for feedstocks, international competition for biodiesel, the inconsistent nature of the biodiesel subsidy, limited investments to ensure quantity and quality of biodiesel product, limited infrastructure to distribute and blend biodiesel, and the limited ability of the

market to consume biodiesel...” We assume tha t the biodiesel subsidy referenced here is the Federal excise tax credit for biodiesel blending. The D4, D5, and/or D6 RIN values can function in place of the blending tax credit, but only if the volume obligations are set to require high

utilization of e xisting capacity.

17. (Pg45) The scenarios presented in Tables II.B

- 5

- 1 and II.B.5

- 2 do not consider the potential for additional renewable diesel to meet the statutory targets for total renewable fuel and advanced

biofuel. Renewable diesel uses the same raw materials as biodiesel but does not have any cold

weather operability issues and can be used at much higher blend levels (as much as 100%) in existing diesel engines than can use biodiesel. As of September 2015, there are 1.3 billion gallons of renewa ble diesel capacity worldwide. See http://www.eia.gov/workingpapers/pdf/flightpaths_biojetffuel.pdf , p. 15.

18. (Pg 130) EPA writes that “...Total domestic production of BBD was 1.45 billion gallons (2.19 billion RINs), while imports resulted in an additional 0.34 billion gallons (0.55 billion RINs)...” The volume is EIA’s reported total Biomass

- based Diesel imports for 2013. The resulting number of

RINs is calculated incorrectly

. 0.34 billion gallons of biodiesel * 1.5 RINs per gallon = 0.51

billion RINs. Furthermore, EIA uses slightly different names for diesel fuel substitutes than EPA; imports of Biomass

- based Diesel consist only of FAME biodiesel. Diesel fuel from

renewabl e sources other than FAME such as hydrotreated vegetable oil are reported by EIA as

Other Renewable Diesel. To get at EPA’s definition of Biomass

- based Diesel, EIA’s imports ofOther Renewable Diesel needs to be considered as well. EIA reports that impor ts of renewable

diesel, which generated both D4 and D6 RINs, were 207 million gallons in 2013.