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## Briefing for the International Conference on Oil Palm and Environment

February 23, 2012 

# Notice of Data Availability (NODA) for Renewable Transportation Fuels Produced from 

# Palm Oil Under the Renewable Fuel Standard

(RFS) Program

# Topics • RFS Program Overview • Lifecycle Modeling in the 2010 RFS2 Final Rule Lifecycle GHG Analysis of Palm Oil Biofuels 

# • Coordination and Review • Submitting Your Comments 

# • Questions?

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# U.S. Policy Aims to Reduce Greenhouse Gas Emissions from the Transportation Sector
• In 2007 the U.S. Congress enacted and the President signed into law the Energy Independence and Security Act (EISA) with the stated goals:

– ―To move the United States toward 

### greater energy independence and security, to increase the production of clean renewable fuels, to protect consumers, to increase the efficiency of products, buildings, and vehicles, [...] and for other purposes.‖ 

## • EISA lays the foundation for achieving significant reductions of greenhouse gas emissions from the use of renewable fuels and for reducing imported petroleum. 3 Source: 2011 U.S. Greenhouse Gas Inventory Report

# The Renewable Fuel Standard (RFS) Program
• RFS was established in the Energy Policy Act of 2005 and is implemented by EPA • The Energy Independence and Security Act (EISA) of 2007 required changes to the RFS program (RFS2)

– Graduated Volume Increase – Mandates incorporation of 36 billion gallons of renewable transportation fuel into U.S. transportation fuels supply by 2022.

– Lifecycle GHG reduction requirements • Separation of the volume requirements into four separate categories of renewable fuel: cellulosic biofuel, biomass- based diesel, advanced biofuel, total renewable fuel 

### • A minimum lifecycle GHG reduction threshold is associated with each category and grandfathering of volume from certain facilities • EISA provision mandates that GHG lifecycle analysis include ―direct emissions and significant indirect emissions such as significant emissions from land use changes.‖



## – Restrictions on the types of feedstocks that can be used to make renewable 

## fuel, and the types of land that can be used to grow and harvest feedstocks 4

# Requirement for New Standards
• Four Separate Standards

– Biomass- Based Diesel: 1 Bgal by 2012 and beyond • Includes biodiesel, renewable diesel if fats and oils not co - processed with petroleum, etc. • Must meet a 50% lifecycle GHG threshold • EPA may increase the volume above 1 Bgal for 2013+



### – Cellulosic Biofuel: 16 Bgal by 2022, but subject to annual assessments • Renewable fuel produced from cellulose, hemicellulose or lignin • Includes cellulosic ethanol, BTL diesel, green gasoline, etc. • Must meet a 60% lifecycle GHG threshold



### – Advanced Biofuel: Total of 21 Bgal by 2022 (Minimum 4 Bgal additional) • Can be essentially anything except corn starch ethanol • Includes cellulosic biofuels and biomass- based diesel • Must meet a 50% lifecycle GHG threshold



### – Renewable Biofuel: Total of 36 Bgal by 2022 (Minimum of 15 Bgal additional) • Ethanol derived from corn starch – or any other qualifying renewable fuel • Must meet 20% lifecycle GHG threshold – Only applies to fuel produced in new facilities NOTE: Biofuel facilities in existence prior to December 19, 2007 (domestic and foreign) are not required to meet GHG threshold for general renewable fuel category – such facilities are ―Grandfathered.‖ 5

# RFS2 Renewable Transportation Fuel Volumes

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# Lifecycle Modeling Approach

• For the RFS2, EPA developed a lifecycle GHG methodology that is consistent with the EISA statute

– Methodology includes a suite of models that analyze all of the key pieces of the lifecycle of a particular renewable fuel, including indirect land use emissions • Methodology includes:

– U.S. Agricultural Sector Modeling • Includes interactions between cropland, pasture, and forest as well as impacts on GHG emissions from crops and livestock production • Measures changes in full agricultural sector emissions due to biofuels expansion

– International Agricultural Sector Modeling • Includes detailed regional breakouts of agriculture & pasture land, including pasture/cropland interactions in Brazil • Calculates the impacts on world markets based on changes in use of feedstocks for biofuels

– Biofuel Processing in Both Domestic & International Agricultural Sector Modeling • Co- products are treated through an expansion of system boundaries to include co - product markets and replacement rates in the agricultural sector (e.g., distillers grains from corn ethanol used as animal feed) • Includes the latest data on process energy use and projections for future efficiency gains

– Land Use Change Modeling • Long -term satellite data (2001 -2007) used to determine what types of land are impacted by international crop expansions • Data includes 9 land categories— in over 750 distinct regions— across 160 countries

– Uncertainty Analysis 7

# Broad Public Engagement and Review Coordination and Technical Exchange • RFS lifecycle analyses were conducted in close coordination with US Department of Agriculture (USDA) and US Department of Energy (DOE) • EPA works with stakeholders and experts to determine the most up -to-date data for use in modeling. • EPA also conducts regular technical exchange with organizations pursuing similar analyses 

### Public Review • 120 -day public comment period on the proposed rule in which methodology was proposed. (analyzed thousands of comments, including recommended methodologies, data inputs, and studies) • Two-day workshop for stakeholders to detail the methodology of the proposed lifecycle analysis 

### Independent Peer Review • Agency initiated an independent peer review of components of the lifecycle analysis in order to respond to stakeholder concerns and to ensure that the Agency makes decisions based on the best science available The review covered four areas of the lifecycle analysis that charted new ground:

1. Land use modeling (use of satellite data/land conversion GHG factors) 2. Methods to account for the variable timing of GHG emissions 3. GHG emissions from foreign crop production (modeling and data used) 4. How the models EPA relied upon are used together to provide overall lifecycle estimates 8

# Renewable Fuel Standard – Final Rule 2010

• Renewable transportation fuel pathways meeting compliance:

– Ethanol produced from corn starch at a new natural gas, biomass, or biogas fired facility using advanced efficient technologies meets 20% threshold (coal fired not eligible).

– Butanol from corn starch meets 20% threshold.

– Biodiesel (soy, wastes, algae) meets 50% threshold.

– Sugarcane ethanol (multiple pathways) meets 50% threshold.

– Cellulosic ethanol and diesel fuel (thermal and biochemical from stover, switchgrass, miscanthus, eligible forest thinnings, cellulosic component of wastes) meets 60% threshold.

– Various renewable fuels produced from the non -cellulosic portions of separated food waste meets the 50% threshold

– Biogas from landfills, sewage waste treatment plants, manure digesters meets the 50% threshold


### • The application of the analyses is country- neutral. Fuels with the same feedstock, fuel production technology, and fuel type as a pathway that has been analyzed will be treated the same as the relevant modeled pathway . 9

# Lifecycle GHG Analysis of Palm Oil Biofuels
• The release of EPA’s assessment provides the public an opportunity to comment on our analysis. • To calculate lifecycle GHG emissions related to palm oil - based biodiesel and renewable diesel, EPA utilized the models developed for the final RFS2 rule.

– Our analysis incorporates new data from Indonesia and Malaysia, where most of the palm oil 

### is grown. • Data on palm oil yields, agricultural inputs, methane capture at palm oil mills, protected conservation areas, soil types, elevation, palm oil mill locations, etc. 

## • EPA used the same approach to estimate global land use change GHG emissions from using palm oil as a biofuel feedstock as we have used to analyze other biofuel 

## pathways. • EPA’s analysis highlights key factors which contribute to the lifecycle emissions for palm oil - based biofuels

– Palm oil production produces wastewater effluent that decomposes and creates methane, a GHG with high global warming potential.

– Projected expansion of oil palm plantations onto land with carbon - rich peat soils which would lead to significant releases of GHGs to the atmosphere. 10

# Palm Oil Lifecycle GHG Analysis Results • EPA’s analysis shows that biodiesel and renewable diesel produced from palm oil do not meet the minimum 20% lifecycle GHG reduction threshold needed to qualify as renewable fuel under the RFS program. 

# • EPA’s RFS rulemaking would not restrict the import of palm oil to the U.S. – it would only determine if palm oil qualifies for credit as a transportation fuel under the RFS program.

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# Extensive Public Outreach Coordination and Technical Exchange • Analysis was conducted in close coordination with USDA and US DOE • EPA consulted extensively with the Indonesian and Malaysian governments, non -government organizations, and industry stakeholders while collecting data for its analysis. • A significant amount of data and information considered in EPA’s analysis was provided by the Indonesian and Malaysian governments, large palm oil companies that operate in the region, as well as data collected from academic journals and other experts. Public Review • The release of the NODA provides the public an opportunity to comment on EPA’s analysis. • EPA recently extended the comment period deadline associated with this NODA to March 28. • We strongly encourage all interested parties to provide input on our analysis through the formal public review process. • We will consider all relevant comments received and inform the public of any revisions in our analysis. Submitting Your Comments • The NODA (available on EPA’s website) provides instructions and guidance on how to submit comments • EPA’s policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute 12

# Ongoing EPA Work • In addition to palm oil - based biofuels, EPA is continuing to evaluate other transportation fuel pathways that were not completed in the final RFS2 rulemaking. 

# • The RFS2 program also provides a petition process through which parties can request that EPA analyze new fuel pathways and provide a compliance determination. 

# • EPA is committed to periodically reviewing and updating the lifecycle analysis for existing pathways.
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# Questions? • For more information, please visit the RFS website at:

– http://www.epa.gov/otaq/fuels/renewablefuels/index.htm

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