SUPPORTING STATEMENT FOR THE RENEWABLE FUEL STANDARD (RFS2) PROGRAM

June 4 , 2013 A. JUSTIFICATION 1. Id entification of the Information Collection
a. Title: Renewable Fuel Standard (RFS2) Program, EPA I CR No. 2333. 03 , OMB Control Number 2060
- 0640
. b. Short characterization: The Energy

Policy Act (EPAct) of 2005 amended the Clean Air Act, section 211(o), and required the initial RFS program , referred to in this supporting statement as "RFS1". The RFS1 program started in 2006 and was covered b y EPA ICR 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 Fuel 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 Security Act (EISA) of 2007 further amend ed the Clean Air Act, section 211(o), and required EPA to propose new regulations for renewable fuels. The current 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 affected motor vehicle fuel); there are additional ty

pes of waivers and special provisions for renewable fuel types; and EPA has implement ed an EPA
- Moderating Transaction Sy stem (EMTS) for RINs. Additional parties are 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 renewable identification numbers (RINs ) that are initially generated by

the producer of the renewable fuel. However, under RFS2, there are additional types of RINs and the volume of RINs traded is greater. This supporting statement provides 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
.

2. Need For, and Use of, the Collectiona. 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 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 elimi nate duplication in this information collection. The information collected is considered CBI and unique to the closed DCFUELdatabase. EPA has provided instructions in PDF in which parties submit data in the Unified Report Form (XLS) to the Agency ’s Centra l Data Exchange (CDX). CDX allows for updating and corrections to individual accounts. The data relates to individual fuel volume by facility and are not available from other sources. b. Public Notice EPA sought comment on reporting requirements via the Federal Register Notice on February

20, 2013 (78 FR 11870). EPA received no public comments.
c. Consultations EPA consulted with Mr. Larry Schafer with the National Biodiesel Board (NBB) who can be reached on (202) 737
- 8801 who commented on the estimates only . His concern was weather the estimates reflect that all the reports were being address ed . The hours and cost seemed low for producer requirements when submitting petitions for new feedstock pathway s , new fuel/pathway s , EMTS Reporting and attest engagement. We also contacted Mr. Tim Hogan of the American Fuel and Petrochemical Manufactures who can be contacted on (202) 457
- 0480. Mr. Hogan found a few small estimate errors which were changed. 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 frequent collection of data would make it impossible to carry out the provisions of the CAA and EISA.e. General Guidelines This 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 su bmit. Under RFS2, actual RINs should not be treated as confidential business information, as they are necessary

identifiers to accompany renewable fuels. An y information claimed as confidential will be treated in accordance with 40 CFR Part 2 and establis hed Agency procedures. Information that is received without a claim of confidentiality may 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 req uire 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 information 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 wholesalers (426990/5169), petroleum bulk stations and terminals (422710/51 71), 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 parenth esis:

 Producers of renewable fuels ( 500 , of which 3 00 are biodiesel producers )  Importers ( 75 , of which 20 are biodiesel importers )  Obligated Parties ( 150 )  Parties who own RINs ( 950 )  Foreign Refiners (10) [Note: The above estimates are derived from the number of registered parties as of December , 2012 , rounded up. The number of biodiesel producers is the number registered as of December , 2012 , rounded up. ] For biofuel feedstock producers, we have assumed the following classes of party , with the number of each in parenthesis: Domestic biofuel feedstock producers ( 1,000,000 )  Foreign biofuel feedstock producers ( 30,966 ) [Note: The above estimates are derived from the following sources : A presentation given b y Brent Butler, United States Forest Servi ce in conj un ction with the U.S. Department of Agriculture , entitled “ Who Owns America’s Forest? ,” dated May , 2008 estimates a 10,000,000 population of plantation and private forest owners. We have a s sumed 1 million owners or 10% to participate in RFS2. T he Bur eau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2012
- 13 Edition, Farmers, Ranchers, and other Agricultural Managers, on the Internet at http://www.bls.gov/ooh/management/farmers
- ranchers
- and
- other agricultural
managers.htm e stimated 1,106,400 persons who claim farming as an occupation and for our purposes can be possible producers of feedstock for producers of ren ewable fuel. Based on our experience with RFS2 registrations, we estimated the number of foreign biofuel feedstock producers to be 30, 1 92 which is 3% of the total of domestic feedstock producers (i.e., 3% of 1, 006 , 400 .)] This supporting statement include s reporting estimates involving biofuel feedstock producers and plantation/private forest owners. These parties must provide certain information about their feedstock and lumber b yproducts re source s to biofuel producers and to EPA upon request . The RFS2 f inal rule contains provisions requiring recordkeeping/reporting and the mapping of certain plots of land (e.g. generating a Google map or similar representation), based upon an aggregate baseline approach. At this stage in the program, this information is required for foreign biofuel feedstock producers , domestic plantation/private forest owners and foreign plantation/private forest owners . Although we expect that this could lead to future burden on the part of certain biofuel producers who use croplands and wood b yproducts , we do not expect that the domestic biofuels feedstock producers or those from Canada will be required to engage in recordkeeping and reporting activities under this provision at this time. Therefore, we are provid ing estimate s related t o this provision for the above named biofuels feedstock producers
. W e expec t this to result in added burden during the three year period covered by this ICR. Estimates for future recordkeeping and reporting will be provided when the recordkeeping and repo rting is expected to occur. See Table Vl: Biofuels Feedstock Producers.**Information Collection Burden by Type of Party**  Table VI: Biofuels Feedstock Producers
Collection Activity Number of Respondents Number of

Responses per Party Total

Number of R esponses Time per

Response (hours) Cost per

Response (Dollars) Total

Hours Total Cost

(Dollars) **Third Party**

**Disclosure** Plantation/Private Forest Owners 1,000,000 1 1000000 0.25 $29 250000 $28,500,000 Domestic - Mapping of Plantation/Fores t Land 1,000,000 1 1000000 0.25 $29 250000 $28,500,000 Foreign - Mapping of Plantation/Forest Land 30,192 1 30192 0.25 $29 7548 $860,472 Foreign Biofuel Feedstock Producers 30,192 1 30192 0.25 $29 7548 $860,472 Foreign Biofuels Feedstock Producer
- Mapp ing of Plots 30,192 1 30192 1 $114 30192 $3,441,888 **TOTA LS**  **2090576 2090576**  **545288 $62,162,832**  **Assumptions:** 1) Estimates a population of 10,000,000 plantation and private forest owners. W e have assumed 1 million owners or 10% to participat e in RFS2. 2) Estimated 1,106,400 persons who claim farming as an occupation and possible producers of feedstock for producers of renewa ble fuel. W e estim ated the number of foreign biofuels feedstock producers to be 30,192 which is 3% of the total of dom estic feedstock producers. 3) Foreign Biofuels Feedstock Producers (farmers) are required to provide information on the land used to provide feedstock t o domestic fuel producers 4) Plantation/Forest private landowners (both foreign and domestic) are required to map land that produces biodiesel fuel form timber resourcesb. In formation Requested A) Reporting: The individual reports required from regulated parties are described in the preamble of the Final Rule
. The following reports are requir ed by the Final Rule: Bio fuels Feedstock Producers , required to provide information on the land used to provide feedstock to fuel producers (see Table VI ); Quarterly Reports of Biofuels Party require s the submission of quarterl y reports regarding generati on and assignment of RI Ns (producers and importers onl y) (s ee Table VII ) : Annual Compliance Reports (obligated parties onl y) (see Table VIII); and Q uarterly RIN Reports summarizing transactions and activity , and “real time” RIN transactional activity report ing within EMTS ( see T able IX)
. 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 party is both an exporter of renewable fuel and a producer of renewable fuel, then that party must file the reports applica ble to both activities. In the Final Rule , we establish that “real time” reporting within EMTS will be construed 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 of the day . We estimate that an average party would report dail y, resulting in 365 instances of reporting in EMTS per year . Quarterl y repo rts are due as follows:

Quarterl y Reporting Schedule for 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 preceding year. For some reports, for example involving biofuel feedstock producers , the frequency of reporting is “on occasion” (i.e., when a transaction requiring disclosure occurs). As discussed above , for EMTS purpose s , we have assumed one instance of reporting per day

for each day

of the year , or 365 instances of reporting). Tables V I
- IX estimate the recordkeeping and reporting burden by part y. We will provide respondents the opportunity to engage in simplified, secure, electronic**Information Collection Burden by Type of Party** Table VII- Quarterly Reports of Biofuels Party ( Producer and Importers)

**Collection A ctivity**  **Number of Respondents**  **Number of**

**Responses per Party**  **Total Number**

**of Responses**  **Time per**

**Response (hours)**  **Cost per**

**Response (dollars)**  **Total**

**Hours Total Cost** 

**(dollars)** Quarterly Reports for Producers of Biofuels
- Generation and Assignment of RINS 300 4 1200 1 $114 1200 $136,800 Quarterly Reports for Importers of Biofuels
- Generation and assignment of RINS 20 4 80 1 $114 80 $9,120
**TOTA L**  **320 1280**  **1280 $145,920** **Information Collection Burden by Type of Party**  Table VIIl - Annual Compliance Reports For Obligated Party

**Collection A ctivity**  **Number of Respondents**  **Number of** 

**Responses Total Number** 

**of Responses Time per** 

**Response (hours)**  **Cost per**

**Response (dollars)**  **Total**

**Hours Total Cost** 

**(dollars)**

Obligated Party 150 1 150 1 $114 150 $17,100
**TOTA L**  **150 150**  **150 $17,100** **Information Collection Burden by Type of Part** **y** Table IX - Quarterly RIN Reports

**Collection A ctivity**  **Number of Parties**  **Number of**

**Responses per Party**  **Total Number**

**of Responses Time per** 

**Response (hours)**  **Cost per**

**Response (dollars)**  **Total**

**Hours Total Cost** 

**(dollars) Third Party** 

**Disclosure** Producers 500 365 182500 0.1 $11 18250 $2,080,500 Importers 75 365 27375 0.1 $11 2737.5 $312,075 Obligated Parties 150 365 54750 0.1 $11 5475 $624,150 Parties who Own RINS 950 365 346750 0.1 $11 34675 $3,952,950 Foreign Refiners 10 365 3650 0.1 $11 365 $41,610 **TOTA L**  **1,685 615025**  **61502.5 $7,011,285**  NOTE
- This table summ a rizes transactions and activity, and "real time" RIN transactional activity reporting within EMTS. Assumes it takes 10 minutes to complete a report per day at $17 per 10 minut esreporting 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 f ive (5) ye ars. 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 transfer volumes of fuel with product transfer documentation or bills of lading, which is already done in the course of business. 5. The Information Collected, Agency Activities, Collection Methodology , and In formation Management
a. Agency

Activiti es

 All reports and registrations will be reviewed b y EPA for completeness and for potential violations.  Potential violations will be referred to enforcement personnel.  Registration numbers will be issued for new registrants.  EPA will c ontact reporting parties if there is a problem with their submission.
b. Collection 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 ar eas.
c. Small Entity

Flexibility This collection will not adversel y affect small entities. The Final Rule describes flexibility provisions available to small entities. The flexibility provisions that are available to small entities are found in 40 CFR § 80.1441 and § 80.1442. These refiners have less than 1,500 employees corporate - wide and corporate average crude oil capacity less than or equal to 155,000 barrels per calendar day . There are only 6 refiners that meet this definition and are registered in DCFUEL under the RFS2 program. 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 UniverseWe drew upon experience with the RFS2 program to develop estimates of the

burden associated 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 used the Bureau of Labor Statistics figures from "National Industry
- Specific Occupational Employ ment & Wa ge Estimate “P etroleum and Coal Products Manufacturing” (May 201 1), with a 3% annual inflation factor applied to bring the values to the present. Using this method, the following wages and benefits appl y b y category :
Wa ges and Benefits Managerial $67.44 per h our Te chnical $65.56 per hour Clerical $22.17 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:

To tal Employer Cost Managerial $135.00 per h our Te chnical $131.00 per hour Clerical $ 44.00 per hour It is assumed that for each hour of activity 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 $ 11 4 per hour, which will b e used in this I CR. For purchased services related to attest engagements and some items of registration, we have doubled this hourly cost to $ 2 28 in order to more accuratel y reflect the cost of a certified public accountant (CP A) or licensed professional e ngineer's (PE) services
. c. Estimating the Agency Burden and Cost EP A must generate company and facility

registration number(s) for new registrants and notify

them of these numbers, which must appear on reports. Report formats and instructions/guidance must be prepared by A gency personnel. Reports will be processed b y contractors and must be reviewed by Agency personnel. Reporting parties must be contacted if there is a problem with their submission. Wehave developedforms for RFS2 reporting to in clude four t ypes, rather than one t ype, of RIN unlike the

RFS1 templates. W

e have provided RFS2 reporting templates as an attachment to this document. This supporting statement considers all Agency costs associated with accepting new r egistrants and new re

ports associated with RFS2, as expr essed in EP

A ICR Number 2333.02. Using the initial RFS2 , the RFG and anti
- dumping, and other recent fuels
related ICRs as a guide in developing these initial estimates for RFS, we anticipate that RFS2 may

require the equivalent labor of one full time GS
- 13 technical employee for a total of $1 15,000, and labor costs of $54,875 in the clerical category and $19,438 in the management category

. 1 Since we are using the CDX, some costs incurred by the Agency will be tied to th e 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 EP A program office and we estimate that registrants due to RFS2 will cost our of fice approximately

$2 00,000 per year in 2013, 2014 and 2015. Weanticipate $ 267 , 000 in annual contract costs related to registration and reporting activities. Weanticipate IT development and testing costs at $ 600,000 divided by three years to yield an annual cost of $200,0 00. Adding the following values results in an annual estimated Agency burden as follows: One GS
- 13 technical employee (full time) = $ 1 8 5,000 One GS
- 7 clerical worker (full
- time) = 88,000 One GS
- 15 manager (1/8 time) = 31, 000 Annual CDX subscription fee = 200,000 Annual contract costs = 267 , 000 Te sting and development= 200,000 **TOT AL**  **= $**  **971,000** 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 simil ar entities. We were able to estimate the number of regulated entities drawing upon experience regulating the same or similar entities.

1 These estimates are derived from "OPM Salary Table 2013
- DCB," effective January 2013. This table may be found at http://www.opm.gov/policy
- data
- oversight/pay
- le ave/salaries
- wa ges/2013/general
schedule/washington
- baltimore
- northern
- virginia
- dc
- md
- va - wv - pa - annual
- rates - by
- grade
- and
- step/ . The extreme of step 10 was assumed for all categories. We have assumed a full
- time GS
- 7 clerical worker, one full
- time GS
- 13 t echnical worker, and a GS
- 15 manager working one
- eighth of his/her time managing this project (0.125). All values were multiplied by 1.6 (which is a common factor utilized in ICRs to account for overhead costs). We rounded the resulting dollar value to th e nearest thousand. This cost is per year.e. Bottom L ine Burden Hours and Costs From the tables, we estimate the following totals: **TOTAL NO. OF RESPON DENTS:**  **2,092,731 TOTAL NO. OF RESPONSES:**  **2,70 7**  **, 0**  **31 TOTAL BURDEN HOURS:**  **6 08**  **,2 20**  **TOTAL COST TO RESPO N**  **DENTS: $**  **6 9**  **, 337**  **, 137** 

f. Reason for Change in Burden At the onset of the RFS2 program, EMTS for RINs were not a feature of RFS1. For the new EMTS sy stem, all parties who owned RI Ns were required to re
- submit their application, disclose feedstock sources, prepare quarterl y reports on RIN activity and submit annual compliance reports (obligated party only). Re
- submittal provisions are n o longer required which will cause a decrease in total responses for this ICR. EMTS users will not be burdened to submit more reports in this information collection, unlike the previous. The total responses for industry dropped from 4,525,625 to 2,092,7 31 a difference of 2,432 , 894, now that the final rule is no longer requiring re
- submissions or quarterl y reports for certain party members. To date, biofuels producers and importers are required to submit quarterl y reports along with their third party dis closure on feedstock producers to EPA. All users of the EMTS sy stem are required to submit quarterl y R IN reports. The number of respondents or users of the EMTS sy stem has more than doubled from 1,059,326 to 2,092,731 an increase of 1,639,992, caused by the additional response burden for mapping foreign and domestic plantation/forest land owners and foreign biofuels feedstock producers which was not reflected in the previous ICR reporting period. With an increase of respondents, total burden hours ha ve decreased from 1,421,133 to 608,220 hours, decreasing the cost to the industry from $ 108,341,989 to $69,337,137, a reduction of $ 39 , 004 , 852 . The reduction in the total cost for this renewal is due to the fact that the EMTS sy stem’s automation structure helps users to prepare reports instantly , lessening the amount of time and cost needed to respond, even with more than a million added users. This notable factor decreased both the industry burden hours and the total cost of this information collection re quest if renewed.g. Burden Statement The annual public reporting and recordkeeping burden for this collection of information is estimated to be 0.22 hours per response
. Burden means the total time, effort, or financial resources expended b y pers ons 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 sy stems for the purposes of collecting, validatin g, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing way s to comply

with any previously

applicable instructions and requirements; train personnel to be able to respond to a coll ection of information; search data sources; complete and review the collection of information; and 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 informatio n 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 es timates, and an y suggested methods for minimizing respondent burden, including the use of automated 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 op en from 8:30 a.m. to 4:30 p.m., Eastern Standard Time, Monday through Friday , excluding legal holiday 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.regulat ions.gov to submit or view public comments, access the index listing of the contents of the public 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, you can send comments to the Office of Information and Regulatory 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
- 0640 in any correspondence.

.