### Summary – Response to Comments on RFS2 Preamble

SECTION I

Section I: Deleted “or better” from discu ssion of other feedstocks qualifying.

SECTION V

Section V: Changed text on yield discussion from we think base yields are conservative to comments received indicated base yields are conservative

Section V: Added more discussion of the fuels we will consider during our planned 6 month update (grain sorghum ethanol, w ood pulp ethanol, palm oil biodiesel).

Section V: Clarified write-up that international production of fuels with feedstocks we modeled also qualify

Section V: In response to USDA writte n comments (these are also documented separately in response to their written comments)

• Added footnote on what 95% confidence represents

• Added text on why N2O updates increa se emissions from corn ethanol

Section V: (and under definitions) Added di scussion and definition of cover crops and wastes Not sure if this was interagency discussion.

USTR Comments on the Preamble

General: Petition process should be open to importers as we ll. Confirmed, process is open to importers. We have revised a nd incorporated new clarifying text.

General: Use of the word "preference" on pg 26-7 causes some concern. We have revised the language to clarify petition process in consideration of this sensitivity.

General: Need to increase the prominence of our invitation to allow for foreign countries to also develop and international aggregate baseline similar to our domestic aggregate baseline. Language revi sed to address comment.

### Summary – Response to Comments on RFS2 RIA

INTRO – EXECUTIVE SUMMARY

RIA Overview: Need to add an executive summa ry into the overview explaining that the impacts assessed may not be entirely a result of the standards. In response, developed an Executive Summary. Current revised version (post OPEI and OMB comments) has been incorporated into the revised RIA

.

CHAPTER 1

Chapter 1 Pg 44: and elsewhere -- correct US Forestry Service to”Forest” Service. Done

Chapter 1 pg 44: Make clear that if there is n’t logging the residuals/slash/thinnings won’t

occur. Done

Table 1.1-4: Clarify the meaning of the table. Done

Chapter 1: 1.1.2.3: Acknowledge that it’ s a common practice today. Done

Chapter 1: 1.1.2.3: Under sustainable removal heading, include additional references from the USFS unless they conflict. Done

Chapter 1: 1.1.2.3 pg 35-40: Clarify the di scussion wrt the Billion ton study, the US cellulosic biomass study, and the USFS da ta on whether they reflect the renewable

biomass restrictions in EISA or not. Done

Chapter 1: 1.1.2.3: Include reference to a new Western Governor’s study. Done

Chapter 1: 1.6-4 pg 208-9: Clarify the language. Done

CHAPTER 2

Chapter 2: Updated FASOM crop budget tables for diesel fuel, gasoline, and electricity use. Tables in the previous version sent to Interagency were not the correct values used

in the final rule.

Chapter 2: Prior to table 2.4-39 added senten ce that discussion of uncertainty ranges follow and where, “Our estimates of satellite data uncertainty are presented in below in

Table 2.4-49”.

Chapter 2: Section 2.4.4.2.6.5 – Added discussi on at the end of the section: and

footnoted.“As discussed in preamble S ection V, modeling the fate of international harvested wood products is an area for future work and c onsideration of more data. For example, Pingoud et al. (2001) i and Micales and Skog (1997) ii estimate longer average lifetimes for wood products than the assumptions used in our analysis. However, based on our research discussed above, we believe it is very likely that carbon sequestration from harvested wood products is captured in our estimated uncertainty ranges.”

i PINGOUD, K, A.-L. PERÄLÄ and A. PUSSINEN. 2001. CARBON DYNAMICS IN
WOOD PRODUCTS. Mitigation and Adaptation Strategies for Global Change 6: 91– 111, Kluwer Academic Publishers . Printed in the Netherlands.

ii Micales, J.A. and Skog, K.E.: 1997, ‘The deco mposition of forest products in landfills’, Int. Biodet.Biodeg. 39(2), 145–158.

Chapter 2: Section 2.4.4.2.8.2.1.1 – Clarified the 81% accuracy vs. 19% range:

“Forest carbon stocks for countries in Latin America and Africa were estimated using the new pantropical carbon stock map of Saatchi et al. (in prep.). However, an accuracy assessment for this new map was not comp leted in time for our updated analysis. Therefore, although we used the new map to derive mean values, uncertainty around these mean values was estimated to be 19% using accuracy information reported for a prior forest biomass product for Latin Am erica derived using a similar methodological approach (Saatchi et al. 2007). This represents a very conservative estimate (i.e., a high estimate) of uncertainty in our analysis because the new Saatchi et al. model is very robust at the multi-state/regional level. Because we used the same pantropical carbon stock map to derive estimates for Latin Am erica and Africa, the 19% uncertainty is a

conservative estimate for Africa.”

Chapter 2: Fixed typo in title of Figure 2.4- 44 also added explanation on why there are no

confidence intervals for Brazil and ROW.

Chapter 2: Response: “Error bars are onl y presented for the global estimates because Brazil and Rest of World are aggregate regions and the uncertainty ranges are not the sum of the sub-regions.”

Chapter 2: Table 2.4-52 Added explanation of wh at tables represent: “Taken together, the

values in these tables form the 95% c onfidence intervals for land use change GHG impacts in each region.”

Chapter 2: Deleted “a nd Petroleum” from the title of Table 2.4-71.

Chapter 2: Section 2.4.11.2 – Added comment at beginning of section: “As discussed in preamble Section V and above, EPA only uses satellite imagery to evaluate recent land use change patterns, which are the results of many factors. Satellite imagery is not used

to determine the amount of land conversion cau sed specifically by biofuel production.”Chapter 2: Added table on land use change va lues per fuel compared to total combined impacts in Section 2.7.

Chapter 2 pg 90: Add cross reference in the Paragraph just prior to Table 2.4-39 pointing to the related info to put this in context.

Chapter 2: Add additional citation from USFS and add it to the docke t, unless it conflicts.

Chapter 2: Figure 2.4-44 – Typo

Chapter 2: Figure 2.4-44 - Explain why no confidence intervals for the regions

Chapter 2: Clarification wrt causality of acreage changes

CHAPTER 3

Chapter 3: More clearly define what the fuel volume assumptions are when we say "RFS2 control scenario." This occurs in both Chapters 3 and 5.

Chapter 3: There is already a table in th e emissions inventory section (page 52, Table 3.3-1) that shows the volumes for each scenari o. We added text to the air quality section of this chapter (specifically pages 72 and 73) that summarizes the volume assumptions for each scenario, including the "RFS2 control scenario," and refers back to Table 3.3-1.

Chapter 3: Delete 2 nd Paragraph on Formaldehyde in pg 146-7. In 3 rd paragraph keep IARC, but end my saying we’re looking at everything... OMB's comments on the

acrolein health effects discussion in the RF S2 RIA (section 3.5.5.6). Sent follow-up note. Paragraph commented on is the same language used in rules dating back to (at least) the

locomotive/marine final rule in June 2008 (73 FR 37713). Still under discussion.

Chapter 3: Replace footnote 353 with an Eng lish translation or don’t use it. Delete footnote 354, since the study is so old. Re place “expected to be” with “may be”. Requested English version. Sent.English vers ion. Note: same language has been in many previous rules.

CHAPTER 4

Chapter 4: Shoot Amanda an email explaining how impor ted ethanol costs were done Table 4.4-18: Developed an a pproximation of our annual capita l costs for inclusion per OMB’s request. David is deciding whether he now wants it in or not

Chapter: 4.1.1.2.3: Subsection Missing – Chapter sent to OMB.

CHAPTER 5Chapter 5: Added alternate approach to calculating SCC values and results, based on calculating impacts over time and using a NPV in stead of taking annualized 2022 values.

Chapter 5: Air Quality - Changed table labels to clarify it’s the RFS2 Case

Chapter 5: Benefits - Don’t call health costs “disbenefits” Replaced the term "disbenefits." in RIA Chapter 5.4 and Preambl e Section VIII.D with language such as "adverse health impacts" and "monetized adverse health impacts."

Chapter 5: Potentially strike GDP analysis from the economy wide analysis. Still under

discussion / consideration.

Chapter 5 (2?): Add language to caveat the G HG benefits because the rebound effect of

crude oil is not included.

Chapter 5: Correction to the way GHG benefits were calculated with 5% SCC. See language in revised document.

Chapter 5 pg 42: Clarify the paragraph that begins with “However”



### Summary – Response to Comments on RFS2 Regs

DOJ comments on the Regs

Does "producer" need to be defined? Answ er - we looked into it and concluded it didn't

need to be.

Importer definition has a conflict betwee n 80.2 and 80.1401. This has been corrected

80.1454(p) refers to a (b)(7) that doesn't exist. This has been corrected. Do importers have to be US entities? The way the regs are written, it appears to presume this, but the definition doesn't require it. The definition has been modified to clarify that

this is the case.

ITA (Commerce) comments on regs

80.1406: Why can importers only comply in the aggregate? Eexplained the rationale in our phone discussions. This is consis tent with all other fuel rules.

80.1450(b): "Any renewable fuel" --- Re vised to be specific to RIN generating

renewable fuel

80.1466(j): Why can't RFS and non-RFS fuel be commingled? Response provided in our discussions. Comingling can occur using the importer pathway, but not the foreignproducer pathway, since we need to be able to know how much came to the US.

Summary Response to USDA Comments on Preamble:

1. The Preamble for the Final Rule addresses many of the concerns raised by USDA in the proposed rule. There is a significant ch ange in the results that would best be addressed by clearly stating in the very begi nning of the text that new data has been brought into the analysis, analytical frameworks expanded (i.e., Brazilian model, recognition of alternative land types), historical informati on/data updated (IPCC guidance on N2O and greenhouse gas emissions, crop yields, energy use in commodity production), assumptions updated (fertilizer use) and made c onsistent, and uncertainty analyses included. This addition would help to clarify potential questions and issues

raised.

General Response: The main changes to the modeling are discussed in the up-front Section 1, we do not feel it is needed to repeat these discussion of changes in Section V, therefore, no changes were made to the Preamble.

Similarly, clarification of the terminology "95 percent confidence" , which is used throughout the report , to describe EPA's conf idence in specific model results should be elaborated. An explanation of what is prec isely meant by a 95 percent confidence should be provided. EPA seems to be indica ting that their estimates for 2022, e.g., GHG emission reductions, have a 95 percent probability of occurring. This is unlikely because confidence intervals rapidly diverge over time and it is impossible to predict with any accuracy that far ahead.

General Response: We have a dded a footnote clarifying this the first time it is

mentioned.

2. The Final Rule Preamble now reports an increase in the net domestic life-cycle emissions for corn as a result of update d N2O emission data. A clarification or explanation of why there is an increase in corn emissions relative to the NPRM Preamble is needed. Similarly, an explanation of why the emissions go down for soybeans would complement the discussion.

General Response: We have a dded text as to why this in creases emissions from corn production (less benefit from replacing s oybeans) in the domestic agriculture N2O emission discussion. The section already had a discussion of why emissions go down for soybeans so no further change was made.

3. USDA understands the interpretation of the Energy Independence and Security Act (EISA) provisions by the Environmental Prot ection Agency regarding land types that can produce eligible biomass to meet the RFS sta ndard, and that, at the three year review,USDA recommends that the use of rangeland and certain forest lands be re-evaluated for eligible renewable biomass production.

EPA and USDA have had extensive discussion s on this issue over the past 8 months and the final interpretation is the most legally defensible.

4. EPA uses a 30 year, zero discount rate to estimation GHG emissions. The perpetual production of agriculture suggests the 100 ye ar time frame would be better suited to

determine or estimate emissions.

Response: It is not agricultu ral sector production that is driving benefits but conversion to biofuel fuel and that biofuel replacing petroleum fuel. Therefore the life of the biofuel plant is more appropriate when considering benefits. There is text in the Preamble discussing this decision:

"The full life of a typical biofuel plant se ems reasonable as a ba sis for the timeframe for assessing the GHG emissions impacts of a biofuel, because it provides a guideline for how long we can expect biofuels to be produced from a particular entity using a specific processing technology."

Therefore, no change was made to the Preamble. The RIA has sensitivity analysis of

different timeframes and discount rates.

5. The Farm Bill definition of "Advanced Biofuel" is broader than the definition found in RFS2 rule. The RFS2 rule appears to limit the definition to only "transportation" fuels while the Farm Bill recognizes other forms of biofuels such as wood pellets and biogas that are used for other than transportation purposes such as electric power production or a heating source.

Response: EISA provides specific direction as to which fuels are covered under this program – which is specific to transportation fuels.

6. There continues to be an inconsistency between the Farm Bill and EISA definitions of eligible "renewable biomass". The Farm Bill recognizes biomass derived from federal lands as eligible while EISA and RFS2 do not recognize bi omass from federal lands as being an eligible source. Therefore, pr ojects that USDA might fund that derives the biomass from federal lands will not qualify as an eligible biofuel under RFS2.

Response: We recognize this and have commented on this in the past. However, EISA has explicit language, which is not the same as the Farm Bill language, which prohibits such feedstocks for use in the pr oduction of fuel under the RFS2 program.

7. There appears to be a disc repancy between the language in the opening paragraph of Section II.B.3." Renewable Fuel Exempt from 20 Percent GHG Threshold" and subparagraph a. "General Background of the Exemption Requirement" concerning whether construction for new ethanol facilities has to be complete or just started byDecember 31, 2009 to qualify for the exemption. USDA’s reading of the rule, any corn kernel starch ethanol facility in which th e construction is started after December 31, 2009, cannot be considered as a renewable fuel unless the facility meets the 20% GHG

threshold. Could this be clarified?

Response: This discrepancy was also recognized by the author (post submission of the package into interagenc y review) and appropriate changes have been made.

8. In the Final Rule Preamble, the EPA has reduced the estimated cost of unit train receiving facilities based on industry input (pag e 326). Currently, there are fewer than 15 unit train receiving facilities and ethanol shipments from the Midwest concentrate along the key rail corridors to those facilities. Although the volumes of ethanol represent a very small percentage of the Nation’s rail fre ight volumes, the fact that those shipments are concentrated along a few key corridors may create bottleneck issues as production

volumes rise.

The timing of developing and citing the additi onal unit train receiving facilities is very important in order to avoid transportation bottlenecks as ethanol production increases and the volumes shipped along existing corridors rises. There is a typical, albeit simplistic, assumption that is made out there about transpor tation: "if it has to, it'll just get there." What may happen in the case of rapidly in creasing ethanol production is that if the number of unit train receiving facilities (and the associated storage) is not sufficient, demurrage costs will increase and ethanol distribution costs will rise.

It is USDA’s understanding that the permitting process for these facilities could take a long time. The EPA could take this opportuni ty to draft some language that could promote the ease of permitting those facilities as the need arises. This raises another area of uncertainty regarding the future type of fuel and biorefinery locations. The ORNL modeling estimating distribution costs was fairly exact, and it is equally important to note the timing and availability of those unit train receiving facilities.

Response: We are taking your comments and suggest ions under advisement.