Vol. 80 Wednesday, 

No. 111 June 10, 2015 

Part III 

Environmental Protection Agency 

Animal and Plant Health Inspection Service 

40 CFR Part 80 

Renewable Fuel Standard Program: Standards for 2014, 2015, and 2016 

and Biomass-Based Diesel Volume for 2017; Proposed Rule 


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33100 Federal Register / Vol. 80, No. 111 / Wednesday, June 10, 2015 / Proposed Rules 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 80 

[EPA–HQ–OAR–2015–0111; FRL–9927–28– 

OAR] 

RIN 2060–AS22 

Renewable Fuel Standard Program: 

Standards for 2014, 2015, and 2016 and 

Biomass-Based Diesel Volume for 

2017 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: Under section 211 of the 

Clean Air Act, the Environmental 

Protection Agency (EPA) is required to 

set renewable fuel percentage standards 

every year. This action proposes annual 

percentage standards for cellulosic 

biofuel, biomass-based diesel, advanced 

biofuel, and total renewable fuel that 

apply to all motor vehicle gasoline and 

diesel produced or imported in the 

years 2014, 2015, and 2016. The EPA is 

establishing a cellulosic biofuel volume 

for all three years that is below the 

applicable volume specified in the Act, 

and is also proposing to rescind the 

cellulosic biofuel standard for 2011. 

Relying on statutory waiver authorities, 

the EPA is proposing to adjust the 

applicable volumes of advanced biofuel 

and total renewable fuel for all three 

years. The 2015 and 2016 proposed 

standards are expected to spur further 

progress in overcoming current 

constraints in renewable fuel 

distribution infrastructure, which in 

turn is expected to lead to substantial 

growth over time in the production and 

use of higher-level ethanol blends and 

other qualifying renewable fuels. In this 

action, we are also proposing the 

applicable volume of biomass-based 

diesel for 2014, 2015, 2016, and 2017. 

Finally, we are proposing compliance 

and attest reporting deadlines for the 

years 2013, 2014, and 2015, as well as 

proposing regulatory amendments to 

clarify the scope of the existing algal 

biofuel pathway. 

DATES: Comments must be received on 

or before July 27, 2015. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ– 

OAR–2015–0111, to the Federal 

eRulemaking Portal: http://

www.regulations.gov. Follow the online 

instructions for submitting comments. 

Once submitted, comments cannot be 

edited or withdrawn. The EPA may 

publish any comment received to its 

public docket. Do not submit 

electronically any information you 

consider to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

If you need to include CBI as part of 

your comment, please visit http://

www.epa.gov/dockets/comments.html 

for instructions. Multimedia 

submissions (audio, video, etc.) must be 

accompanied by a written comment. 

The written comment is considered the 

official comment and should include 

discussion of all points you wish to 

make. 

For additional submission methods, 

the full EPA public comment policy, 

and general guidance on making 

effective comments, please visit http:// 

www.epa.gov/dockets/comments.html. 

FOR FURTHER INFORMATION CONTACT: Julia 

MacAllister, Office of Transportation 

and Air Quality, Assessment and 

Standards Division, Environmental 

Protection Agency, 2000 Traverwood 

Drive, Ann Arbor, MI 48105; telephone 

number: 734–214–4131; email address: 

macallister.julia@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. General Information 

A. Does this action apply to me? 

Entities potentially affected by this 

proposed rule are those involved with 

the production, distribution, and sale of 

transportation fuels, including gasoline 

and diesel fuel or renewable fuels such 

as ethanol, biodiesel, renewable diesel, 

and biogas. Potentially regulated 

categories include: 

Category NAICS1

Codes SIC 2 Codes Examples of potentially regulated entities 

Industry ............................................................... 324110 2911 Petroleum Refineries. 

Industry ............................................................... 325193 2869 Ethyl alcohol manufacturing. 

Industry ............................................................... 325199 2869 Other basic organic chemical manufacturing. 

Industry ............................................................... 424690 5169 Chemical and allied products merchant wholesalers. 

Industry ............................................................... 424710 5171 Petroleum bulk stations and terminals. 

Industry ............................................................... 424720 5172 Petroleum and petroleum products merchant wholesalers. 

Industry ............................................................... 221210 4925 Manufactured gas production and distribution. 

Industry ............................................................... 454319 5989 Other fuel dealers. 

1 North American Industry Classification System (NAICS) 

2Standard Industrial Classification (SIC) system code. 

This table is not intended to be 

exhaustive, but rather provides a guide 

for readers regarding entities likely to be 

regulated by this action. This table lists 

the types of entities that EPA is now 

aware could potentially be regulated by 

this action. Other types of entities not 

listed in the table could also be 

regulated. To determine whether your 

activities would be regulated by this 

action, you should carefully examine 

the applicability criteria in 40 CFR part 

80. If you have any questions regarding 

the applicability of this action to a 

particular entity, consult the person 

listed in the FOR FURTHER INFORMATION

CONTACT section. 

Outline of This Preamble 

I. Executive Summary 

A. Purpose of This Action 

B. Summary of Major Provisions in This 

Action 

1. Proposed Approach to Setting Standards 

for 2014, 2015, and 2016 

2. Advanced Biofuel and Total Renewable 

Fuel 

3. Biomass-Based Diesel 

4. Cellulosic Biofuel 

5. Annual Percentage Standards 

6. Response to Requests for a Waiver of the 

2014 Standards 

7. Proposed Changes to Regulations 

C. Authority for Late Action and 

Applicability of the Standards 

D. Outlook for 2017 and Beyond 

II. Proposed Advanced Biofuel and Total 

Renewable Fuel Volumes for 2014–2016 

A. Statutory Authorities for Reducing 

Volumes To Address Renewable Fuel 

Availability and the E10 Blendwall 

1. Cellulosic Waiver Authority 

2. General Waiver Authority 

3. Assessment of Past Versus Future 

Supply 

4. Combining Authorities for Reductions in 

Total Renewable Fuel 

5. Inability of the Market To Reach 

Statutory Volumes 

B. Overview of Approach To Determining 

Volume Requirements 

1. Fulfilling Congressional Intent To 

Increase Use of Renewable Fuels 


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1 75 FR 14670, March 26, 2010. 

2A full description of the statutory basis of the 

RFS program and EPA’s actions to develop and 

implement the regulatory program are provided in 

a memorandum to the docket. See, ‘‘Statutory basis 

of the RFS program and development of the 

regulatory program,’’ memorandum from Madison 

Le to EPA docket EPA–HQ–OAR–2015–0111. 

3EIA’s Monthly Energy Review, April 21015, 

Table 10.3. 

4 2007 volume represents biodiesel only, from 

EIA’s Monthly Energy Review, April 2015, Table 

10.4. 2014 volume represents biodiesel and 

renewable diesel production from EMTS. 

5CAA 211(o)(2)(B). 

6See, for example, ‘‘Renewable Fuel Standard 

Potential Economic and Environmental Effects of 

U.S. Biofuel Policy (2011),’’ National Research 

Council. 

2. RFS Program Mechanisms and Their 

Role in Supporting Growth in Renewable 

Fuel Use 

3. Current and Future Shortfalls in Supply 

C. Proposed Volume Requirements 

1. 2014 

2. 2015 

3. 2016 

D. Market Response To Proposed Volume 

Requirements for 2016 

1. E10 Blendwall 

2. Volume Scenarios 

E. Treatment of Carryover RINs 

F. Impacts of Proposed Standards on Costs 

III. Proposed Biomass-Based Diesel Volumes 

for 2014–2017 

A. Statutory Requirements. 

B. BBD Production and Compliance in 

Previous Years 

C. Applicable Volume of Biomass-Based 

Diesel for 2014 

D. Determination of Applicable Volume of 

Biomass-Based Diesel for 2015–2017 

1. Implication of Nested Standards 

2. Biomass-Based Diesel as a Fraction of 

Advanced Biofuel 

3. Ensuring Growth in Biomass-Based 

Diesel and Other Advanced Biofuel 

4. Proposed Volumes for 2015–2017 

E. Consideration of Statutory Factors for 

2014–2017 

1. Primary and Supplementary Statutory 

Factors Assessment for 2015–2017 

Biomass-Based Diesel Applicable 

Volumes 

2. Assessment for 2014 Biomass-Based 

Diesel Applicable Volume 

IV. Proposed Cellulosic Biofuel Volume for 

2014–2016 

A. Statutory Requirements 

B. Cellulosic Biofuel Industry Assessment 

1. Potential Domestic Producers 

2. Potential Foreign Sources of Cellulosic 

Biofuel 

3. Summary of Volume Projections for 

Individual Companies 

C. Cellulosic Biofuel Volume for 2014 

D. Cellulosic Biofuel Volume for 2015 

E. Cellulosic Biofuel Volume for 2016 

F. Rescission of the 2011 Cellulosic Biofuel 

Standards 

V. Percentage Standards 

A. Background 

B. Calculation of Standards 

1. How are the standards calculated? 

2. Small Refineries and Small Refiners 

3. Proposed Standards 

VI. Proposed Amendments to Regulations 

A. Proposed Changes to the Algal Biofuel 

Pathways 

B. Annual Compliance Reporting and 

Attest Engagement Deadlines Under the 

RFS Program 

VII. Public Participation 

A. How do I submit comments? 

B. How should I submit CBI to the Agency? 

VIII. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

B. Paperwork Reduction Act (PRA) 

C. Regulatory Flexibility Act (RFA) 

D. Unfunded Mandates Reform Act 

(UMRA) 

E. Executive Order 13132: Federalism 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

H. Executive Order 13211: Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer and 

Advancement Act (NTTAA) 

J. Executive Order 12898: Federal Actions 

To Address Environmental Justice in 

Minority Populations, and Low-Income 

Populations 

IX. Statutory Authority 

I. Executive Summary 

The Renewable Fuel Standard (RFS) 

program began in 2006 pursuant to the 

requirements in Clean Air Act (CAA) 

section 211(o) that were added through 

the Energy Policy Act of 2005 (EPAct). 

The statutory requirements for the RFS 

program were subsequently modified 

through the Energy Independence and 

Security Act of 2007 (EISA), resulting in 

the publication of major revisions to the 

regulatory requirements on March 26, 

2010.1 2 Since the initial promulgation 

of the RFS program regulations in 2007, 

domestic production and use of 

renewable fuel volumes in the U.S. has 

increased substantially. According to 

the Energy Information Administration 

(EIA), fuel ethanol production in the 

U.S. doubled in volume from 

approximately 6.5 billion gallons in 

2007 to about 14.3 billion gallons in 

2014.3 Growth in biodiesel and 

renewable diesel production in the U.S. 

has increased more than two and a half 

times, from approximately 0.5 billion 

gallons in 2007 to 1.46 billion gallons in 

2014.4 Today, nearly all of the 

approximately 138 billion gallons of 

gasoline used for transportation 

purposes contains 10 percent ethanol 

(E10). 

The fundamental objective of the RFS 

provisions under the Clean Air Act is 

clear: To increase the use of renewable 

fuels in the U.S. transportation system 

every year through at least 2022. These 

fuels include corn starch ethanol, the 

predominant biofuel in use to date, but 

Congress envisioned the majority of 

growth over time to come from 

advanced biofuels as the non-advanced 

(conventional) volumes remain constant 

starting in 2015 while the advanced 

volumes continue to grow. Advanced 

biofuels are required to have lower 

greenhouse gas (GHG) emissions on a 

lifecycle basis than conventional 

biofuels. Increased use of renewable 

fuels means less use of fossil fuels, 

which results in lower GHG emissions 

over time as advanced biofuel 

production and use becomes more 

commonplace. By aiming to diversify 

the country’s fuel supply, Congress also 

intended to increase the nation’s energy 

security. Renewable fuels represent an 

opportunity for the U.S. to move away 

from fossil fuels towards a set of lower 

GHG transportation fuels, and a chance 

for a still-developing low GHG 

technology sector to grow. 

The law establishes annual volume 

targets,5 and requires EPA to translate 

those volume targets (or alternative 

volume requirements established by 

EPA in accordance with statutory 

waiver authorities) into compliance 

obligations that refiners and importers 

must meet every year. Over the past few 

years, we have seen analysis concluding 

that the ambitious statutory targets in 

the Clean Air Act exceed real world 

conditions.6 Despite significant efforts 

by the U.S. Departments of Agriculture 

(USDA) and Energy (DOE) to promote 

the use of renewable fuels, real-world 

limitations, such as the slower than 

expected development of the cellulosic 

biofuel industry, less growth in gasoline 

use than was expected when Congress 

enacted these provisions in 2007, and 

constraints in supplying certain biofuels 

to consumers, have made the timeline 

laid out by Congress extremely difficult 

to achieve. These challenges remain, 

even as we recognize the success of the 

program over the past decade in 

boosting renewable fuel use, and the 

recent significant signs of progress 

towards development of increasing 

volumes of advanced, low-emitting GHG 

fuels, including cellulosic biofuels and 

‘‘drop-in’’ biofuels (those that are made 

from renewable sources but are 

otherwise essentially indistinguishable 

from the fossil-based fuels they 

displace). 

And so the challenge EPA faces in 

developing this proposal is increasing 

renewable fuels over time to address 

climate change and increase energy 

security while also accounting for the 


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33102 Federal Register / Vol. 80, No. 111 / Wednesday, June 10, 2015 / Proposed Rules 

7The ‘‘E10 blendwall’’ represents the volume of 

ethanol that can be consumed domestically if all 

gasoline contains 10% ethanol and there are no 

higher-level ethanol blends consumed such as E15 

or E85. 

real-world limitations that have slowed 

progress towards such goals, and that 

have made the volume targets 

established by Congress for 2014, 2015, 

and 2016 effectively beyond reach. This 

proposal attempts to find an approach 

that achieves these objectives. 

We believe that the RFS program can 

drive renewable fuel use, and that it is 

appropriate to consider the ability of the 

market to respond to the standards we 

set when we assess the amount of 

renewable fuel consumption that can be 

achieved. While we are proposing to use 

the tools Congress provided to make 

adjustments to the law’s volume targets 

in recognition of the constraints that 

exist today, we are proposing standards 

for 2015 and 2016 that will drive growth 

in renewable fuels, particularly those 

fuels that are required to achieve the 

lowest lifecycle GHG emissions. We 

believe that over time use of both higher 

ethanol blends and non-ethanol biofuels 

can and will increase, consistent with 

Congress’ intent in enacting EPAct and 

EISA. In our view, while Congress 

recognized that supply challenges may 

exist as evidenced by the various waiver 

provisions, it did not intend growth in 

the renewable fuels market to be 

ultimately prevented by those 

challenges, including such constraints 

as the ‘‘E10 blendwall’’ 7 or demand for 

gasoline or diesel. The fact that 

Congress chose to mandate increasing 

and substantial amounts of renewable 

fuel clearly signals that it intended the 

RFS program to create incentives to 

increase renewable fuel supplies and 

overcome limitations in the market. The 

standards we are proposing are forwardleaning and reflect those incentives. 

The proposed volume requirements 

would push the fuels sector to produce 

and blend more renewable fuels in 2015 

and 2016 in a manner that is consistent 

with the goals Congress envisioned. The 

proposed volumes are less than the 

statutory targets for 2015 and 2016 but 

higher than what the market would 

produce and use in the absence of such 

market-driving standards. The 2015 and 

2016 standards are expected to spur 

further progress in overcoming current 

constraints and lead to continued 

growth in the production and use of 

higher ethanol blends and other 

qualifying renewable fuels. In this 

regard the proposed standards are 

intended to fulfill the spirit and intent 

of Congress and provide guidance to 

market participants. Once finalized, this 

rule would put renewable fuel 

production and use on a path of steady, 

ambitious growth. 

This proposal comes during a period 

of transition for the RFS program. In the 

program’s early years, compliance with 

the advanced biofuel and total 

renewable volume requirements could 

be readily achieved in large part by 

blending increasing amounts of ethanol 

into gasoline and biodiesel into diesel 

fuel. As the program progresses, 

however, significantly increasing 

renewable fuel volumes will require 

pushing beyond current constraints on 

blending more ethanol into gasoline and 

will require sustained growth in the 

development and use of advanced, nonethanol renewable fuels, including 

drop-in renewable fuels. This proposed 

rule acknowledges this transition by 

proposing volume requirements based 

not only on the volumes of renewable 

fuels that have already been achieved in 

2014 and the first part of 2015, but also 

on the additional volumes that can be 

supplied later in 2015 and in 2016 as 

the market addresses infrastructure and 

other constraints. Our proposal includes 

volumes of renewable fuel that will 

require either ethanol use at levels 

significantly beyond the level of the E10 

blendwall, or significantly greater use of 

non-ethanol renewable fuels than has 

occurred to date, depending on how the 

market responds to the standards we set. 

The standards we are proposing for 

2015 and 2016 in particular would drive 

growth in renewable fuels by providing 

appropriate incentives to overcome 

current constraints and challenges to 

further the goals of Congress in 

establishing the RFS program. The 

approach we propose taking for 2015 

and 2016 is forward-looking and 

consistent with the purpose of the 

statute to significantly increase the 

amount of renewable fuel used as 

transportation fuel over time, 

particularly renewable fuels with the 

lowest lifecycle GHG emissions, in the 

transportation fuel supply. 

Since the amount of renewable fuel 

that can be produced and imported is 

larger than the volume that can be 

consumed due to overall demand for 

transportation fuel and constraints on 

supply to vehicles and engines, there is 

necessarily competition among biofuels 

for retail consumption in the United 

States. In this proposed rule we have 

worked to achieve an appropriate and 

reasonable balance between setting 

volume requirements that would 

provide support for biofuels that are 

more established, while also providing 

opportunities under those volume 

requirements for emerging biofuels. The 

approach we have used to determine the 

proposed volumes is consistent with 

Congressional intent in establishing the 

RFS program in that it provides an 

opportunity for a diverse array of 

renewable fuel types to be used for 

compliance. Competition is good for 

obligated parties and consumers, as it 

permits the market to determine the 

most efficient, lowest cost, best 

performing fuels for meeting the 

increasingly higher volume 

requirements anticipated year to year 

under the program. However, it is also 

important to provide support to existing 

successful biofuels and to provide 

incentives for those fuels, especially 

advanced biofuels that produce the 

greatest reductions in greenhouse gases. 

As discussed in Section III, we are 

proposing that the specific volume 

requirement for biomass-based diesel 

(BBD) should be increased over 2013 

levels through 2017 to provide 

additional support for that industry in a 

way that furthers the statutory goal of 

increasing the use of renewable fuel and 

reducing lifecycle GHGs. At the same 

time, the increase in the required BBD 

volume that we are proposing still 

leaves a substantial volume under the 

advanced biofuel standard open for 

competition among all qualifying 

advanced biofuels. 

We recognize that our delay in issuing 

standards for 2014 and 2015 has created 

additional uncertainty in the 

marketplace. We are committed to 

returning our standard-setting process to 

the statutory schedule, to provide the 

certainty that will allow the biofuels 

sector and the RFS program to succeed. 

The first step in providing this certainty 

is finalizing the volume requirements 

for 2014, 2015, and 2016 by November 

30, 2015. For 2014, the compliance year 

is now over, and any standard EPA sets 

for 2014 can no longer influence 

renewable fuel production or use in that 

year. This is a significant change in 

circumstances from those at the time of 

the November 2013 proposal for volume 

requirements that would have applied 

in 2014. Therefore, we are issuing this 

new proposal for 2014 that reflects late 

issuance of the rule and those volumes 

of renewable fuel that were actually 

used in 2014. Details regarding how we 

calculated such ‘‘actual’’ volumes used 

in 2014 for purposes of this proposal are 

discussed in Section II.C.1 below. For 

2015, our proposed approach combines 

a consideration of those volumes of 

renewable fuel that were actually used 

in the past with a forward-leaning 

approach for the future that is intended 

to promote renewable fuel use. For 

2016, our approach to determining the 

volumes to propose is, as discussed, 

forward-leaning and consistent with the 


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Federal Register / Vol. 80, No. 111 / Wednesday, June 10, 2015 / Proposed Rules 33103 

8Section 211(o)(7)(E) also authorizes EPA to issue 

a temporary waiver of applicable volumes of BBD 

where EPA determines that there is a significant 

feedstock disruption or other market circumstance 

that would make the price of BBD fuel increase 

significantly. 

statute’s intent to promote growth in 

renewable fuel use over time. 

This proposal represents EPA’s 

commitment to continued support for 

steady growth in renewable fuel use. 

However, we recognize that the RFS 

standards are only one element among 

many that factor into the success of 

renewable fuel development and use 

over time. The standards that EPA sets 

each year are an important part of the 

overall picture, but this program is 

complemented and supported by 

programs managed by the U.S. 

Departments of Agriculture (USDA) and 

Energy (DOE), as well as myriad efforts 

and initiatives at the regional and local 

level and within the private sector. DOE 

has invested considerable resources to 

help deploy the advanced technologies 

needed to achieve the statutory aims of 

lower carbon fuels, and DOE has 

leveraged several billion dollars more in 

private support for development of 

advanced renewable fuels. USDA’s 

Biorefinery Assistance Program has 

provided loan guarantees for the 

development and construction of 

commercial scale biorefineries with a 

number of the new projects focused on 

producing fuels other than ethanol. 

Greater GHG benefits are expected to be 

realized as the production and use of 

advanced biofuels accelerates, and the 

volume requirements that we are 

proposing support this goal. 

A. Purpose of This Action 

The national volume targets of 

renewable fuel that are intended to be 

achieved under the RFS program each 

year (absent an adjustment or waiver by 

EPA) are specified in CAA section 

211(o)(2). The statutory volumes for 

2014, 2015, and 2016 are shown in 

Table I.A–1. The cellulosic biofuel and 

BBD categories are nested within the 

advanced biofuel category, which is 

itself nested within the total renewable 

fuel category. This means, for example, 

that each gallon of cellulosic biofuel or 

BBD that is used to satisfy the 

individual volume requirements for 

those fuel types can also be used to 

satisfy the requirements for advanced 

biofuel and renewable fuel. 

TABLE I.A–1—APPLICABLE VOLUMES

SPECIFIED IN THE CLEAN AIR ACT

[Billion ethanol-equivalent gallons] a

2014 2015 2016 

Cellulosic biofuel ..... 1.75 3.0 4.25 

Biomass-based diesel ........................ ≥1.0 ≥1.0 ≥1.0 

Advanced biofuel .... 3.75 5.5 7.25 

Renewable fuel ....... 18.15 20.5 22.25 

aAll values are ethanol-equivalent on an energy content basis, except values for BBD 

which are given in actual gallons. 

Under the RFS program, EPA is 

required to determine and publish 

annual percentage standards for each 

compliance year. The percentage 

standards are calculated so as to ensure 

use in transportation fuel of the national 

‘‘applicable volumes’’ of the four types 

of biofuel (cellulosic biofuel, BBD, 

advanced biofuel, and total renewable 

fuel) that are either set forth in the Clean 

Air Act or established by EPA in 

accordance with the Act’s requirements. 

The percentage standards are used by 

obligated parties (generally, producers 

and importers of gasoline and diesel 

fuel) to calculate their individual 

compliance obligations. Each of the four 

percentage standards is applied to the 

volume of non-renewable gasoline and 

diesel that each obligated party 

produces or imports during the 

specified calendar year to determine 

their individual volume obligations 

with respect to the four renewable fuel 

types. 

EPA is proposing annual applicable 

volume requirements for cellulosic 

biofuel, advanced biofuel, and total 

renewable fuel for 2014, 2015, and 2016, 

and for BBD for 2014, 2015, 2016, and 

2017. Table I.A–2 lists the statutory 

provisions and associated criteria 

relevant to determining the national 

applicable volumes used to set the 

percentage standards in this proposed 

rule. 

TABLE I.A–2—STATUTORY PROVISIONS FOR DETERMINATION OF APPLICABLE VOLUMES

Applicable volumes Clean Air Act 

reference Criteria provided in statute for determination of applicable volume 

Cellulosic biofuel ..................... 211(o)(7)(D)(i) ....... Required volume must be lesser of volume specified in CAA 211(o)(2)(B)(i)(III) or EPA’s 

projected volume in coordination with other federal agencies. 

211(o)(7)(A) .......... EPA may waive the statutory volume in whole or in part if implementation would severely 

harm the economy or environment of a State, region, or the United States, or if there is 

an inadequate domestic supply. 

Biomass-based diesel 8 .......... 211(o)(2)(B)(ii) and 

(v).

Required volume for years after 2012 must be at least 1.0 billion gallons, and must be 

based on a review of implementation of the program, coordination with other federal 

agencies, and an analysis of specified factors. 

211(o)(7)(A) .......... EPA may waive the statutory volume in whole or in part if implementation would severely 

harm the economy or environment of a State, region, or the United States, or if there is 

an inadequate domestic supply. 

Advanced biofuel .................... 211(o)(7)(D)(i) ....... If applicable volume of cellulosic biofuel is reduced below the statutory volume to the projected volume, EPA may reduce the advanced biofuel and total renewable fuel volumes 

in CAA 211(o)(2)(B)(i)(I) and (II) by the same or lesser volume. No criteria specified. 

211(o)(7)(A) .......... EPA may waive the statutory volume in whole or in part if implementation would severely 

harm the economy or environment of a State, region, or the United States, or if there is 

an inadequate domestic supply. 

Total renewable fuel ............... 211(o)(7)(D)(i) ....... If applicable volume of cellulosic biofuel is reduced below the statutory volume to the projected volume, EPA may reduce the advanced biofuel and total renewable fuel volumes 

in CAA 211(o)(2)(B)(i)(I) and (II) by the same or lesser volume. No criteria specified. 

211(o)(7)(A) .......... EPA may waive the statutory volume in whole or in part if implementation would severely 

harm the economy or environment of a State, region, or the United States, or if there is 

an inadequate domestic supply. 


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33104 Federal Register / Vol. 80, No. 111 / Wednesday, June 10, 2015 / Proposed Rules 

9 78 FR 71732, November 29, 2013. 

10 79 FR 73007, December 9, 2014. 11See American Fuel and Petrochemical Manuf. 

et al v. EPA (No. 15–cv–394, D.D.C.). 

12As discussed in Section II.A, EPA has 

considerable discretion in exercising the cellulosic 

waiver authority, and is not constrained to consider 

any particular factor or list of factors in doing so. 

Nevertheless, EPA is proposing to base its exercise 

of the cellulosic waiver authority on the same 

general considerations justifying its use of the 

general waiver authority—availability of renewable 

fuel and the legal and practical constraints on their 

supply to vehicles and other qualifying uses. We 

invite comment on this approach. 

In November 2013, we proposed 

standards for cellulosic biofuel, BBD, 

advanced biofuel, and total renewable 

fuel for calendar year 2014.9 We 

received over 340,000 comments 

representing widely diverging views on 

such topics as opportunities and 

constraints associated with the E10 

blendwall, the ability of the market to 

respond to forward-leaning standards, 

the permissible interpretation of 

statutory waiver authorities, and the 

intent of Congress. In December 2014, 

we published a Federal Register notice 

in which we noted the substantial 

number of comments and the concerns 

of commenters, and stating that EPA 

had been evaluating the issues raised in 

light of the purposes of the statute and 

the Administration’s commitment to the 

goals of the statute to increase the use 

of renewable fuels.10 We further 

indicated in that notice that finalization 

of the 2014 standards rule had been 

significantly delayed and that, due to 

this delay and given ongoing 

consideration of the issues presented by 

the commenters, EPA would not be in 

a position to finalize the 2014 RFS 

standards before the end of 2014. We 

concluded that the approach in the 

November 2013 proposal, projecting 

volume growth into the-then future, was 

not an appropriate way to set standards 

in late 2014, for a year that was largely 

over. Since the approach we proposed 

in November 2013 would need to be 

substantially modified to reflect the 

delay in issuing the rule and actual 

renewable fuel use during the earlier 

part of 2014, the action indicated that 

we intended to finalize the 2014 

standards in 2015. 

Not only is 2014 over, but this 

proposal is being released well into 

2015. We believe that the standards we 

set should take these facts into account 

as we make an effort to return to the 

annual standard-setting schedule in the 

statute. Therefore, we plan on finalizing 

the applicable standards for 2014, 2015, 

and 2016 by November of this year. 

Moreover, the terms of a proposed 

consent decree to resolve pending 

litigation concerning EPA’s failure to 

establish standards for 2014 and 2015 

by the statutory deadline include a 

requirement for EPA to promulgate final 

standards for 2014 and 2015 by 

November 30, 2015.11 By re-proposing 

the 2014 standards along with a 

proposal for the 2015 and 2016 

standards, we are not only able to 

formulate a proposal for public 

comment that takes into account the fact 

that 2014 is over and the specific 

approach described in the November 

2013 Notice of Proposed Rulemaking 

(NPRM) is no longer applicable, but we 

can also coordinate the proposed 

treatment of 2014 with the proposed 

treatment of 2015 wherein part of the 

year has likewise already passed. We are 

therefore withdrawing the November 

2013 NPRM; this proposal replaces and 

supersedes that earlier proposal. While 

the many comments we received on the 

November 2013 NPRM informed the 

development of this proposal, we do not 

intend to specifically respond to 

comments on the prior proposal, and we 

encourage members of the public to 

submit new comments that are tailored 

to this new proposal. Given the 

substantial task before the Agency to 

issue a final rule applicable to three 

calendar years by November 30, 2015, 

we encourage commenters to submit 

concise comments, and not to re-submit 

comments submitted on the withdrawn 

proposal except to the extent that they 

have determined them to be relevant 

under this proposal. As shown in Table I.A–2, the 

statutory authorities that provide 

direction to EPA for how to modify or 

set the applicable standards differ for 

the four categories of renewable fuel. 

Under the statute, EPA must annually 

determine the projected volume of 

cellulosic biofuel production for the 

following year. If the projected volume 

of cellulosic biofuel production is less 

than the applicable volume specified in 

section 211(o)(2)(B)(i)(III) of the statute, 

EPA must lower the applicable volume 

used to set the annual cellulosic biofuel 

percentage standard to the projected 

volume of production during the year. 

In Section IV of this proposed rule, we 

present our analysis of cellulosic biofuel 

production and proposed volumes for 

2014, 2015, and 2016. This analysis is 

based on our evaluation of producers’ 

production plans and progress to date 

following discussions with cellulosic 

biofuel producers. With regard to BBD, CAA section 

211(o)(2)(B) specifies the applicable 

volumes of BBD to be used in the RFS 

program only through year 2012. For 

subsequent years the statute sets a 

minimum volume of 1 billion gallons, 

and directs EPA to set the required 

volume after consideration of a number 

of factors. In Section III of this preamble 

we discuss our proposed volume 

requirements for BBD for 2014, 2015, 

2016, and 2017. 

Regarding advanced biofuel and total 

renewable fuel, Congress provided 

several mechanisms through which 

those volumes could be reduced if 

necessary. If we lower the applicable 

volume of cellulosic biofuel below the 

volume specified in CAA 

211(o)(2)(B)(i)(III), we also have the 

authority to reduce the applicable 

volumes of advanced biofuel and total 

renewable fuel by the same or a lesser 

amount. We may also reduce the 

applicable volumes of any of the four 

renewable fuel types under the general 

waiver authority provided at CAA 

211(o)(7)(A) if EPA finds that 

implementation of the statutory 

volumes would severely harm the 

economy or environment of a State, 

region, or the United States, or if there 

is inadequate domestic supply. Section 

II of this proposed rule describes our 

intended use of both the cellulosic 

waiver authority and the general waiver 

authority to reduce volumes of 

advanced biofuel and total renewable 

fuel to address three important realities: 

• Substantial limitations in the 

supply of cellulosic biofuel, 

• Insufficient supply of other 

advanced biofuel to offset the shortfall 

in cellulosic biofuel, and 

• Practical and legal constraints on 

the supply of ethanol blends to the 

vehicles that can use them (in the form 

of E10, E15, and higher level ethanol 

blends), driven in part by lower gasoline 

consumption than was expected in 2007 

when the target statutory volumes were 

established. 

We believe these realities justify the 

exercise of the authority Congress 

provided us to waive the statutory 

volumes. At the same time, we believe 

our exercise of the waiver authorities 

should be consistent with the objectives 

of the statute to grow renewable fuel use 

over time. We are proposing to use the 

waiver authorities to derive applicable 

volumes that reflect the maximum 

volumes that can reasonably be 

expected to be produced and consumed. 

Thus, while the standards that we set 

must be achievable, we believe that they 

must also reflect the power of the 

market to respond to the standards we 

set to drive positive change in 

renewable fuel production and use. 

We are proposing to exercise our 

authority to reduce volumes of 

advanced biofuel and total renewable 

fuel only to the extent necessary to 

remove the inadequacy in supply. That 

is, our objective in exercising the 

general waiver authority is to set the 

volume requirements at the boundary 

between an adequate domestic supply 

and an inadequate domestic supply.12

One way of expressing this 


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13 In addition to the volume requirements shown 

in Table I.A–3 for 2014, 2015, and 2016 for all four 

categories of renewable fuel, this action also 

proposes a volume requirement of 1.9 billion 

gallons for BBD in 2017. 

14A RIN is a unique number generated by the 

producer and assigned to each gallon of a qualifying 

renewable fuel under the RFS program, and is used 

by refiners and importers to demonstrate 

compliance with the volume requirements under 

the program. RINs may be retired for a number of 

reasons, including to account for renewable fuel 

spills or to correct for RIN generation errors. 

objective is to say we are seeking to 

determine the maximum volumes of 

renewable fuel that can be expected to 

be achieved in light of supply 

constraints. This is a very challenging 

task not only in light of the myriad 

complexities of the fuels market and 

how individual aspects of the industry 

might change in the future, but also 

because we cannot precisely predict 

how the market will respond to the 

volume-driving provisions of the RFS 

program. Thus the determination of the 

maximum achievable volumes is one 

that we believe necessarily involves 

considerable exercise of judgment. To 

this end, we are proposing ‘‘maximum 

achievable’’ volumes of advanced 

biofuel and total renewable fuel in this 

package that reflect our judgment as to 

where the boundary between adequate 

domestic supply and inadequate 

domestic supply might fall, particularly 

for 2015 and 2016. 

On the basis of the authorities 

provided in the statute, we have 

evaluated the supply of qualifying 

advanced biofuel and total renewable 

fuels in light of the three limitations 

described above and other relevant 

factors. Based on this evaluation, and 

after consultation with the Departments 

of Agriculture and Energy, we believe 

that adjustments to the statutory 

volumes of advanced biofuel and total 

renewable fuel are warranted for 2014, 

2015, and 2016. The proposed volumes 

for advanced biofuel and total 

renewable fuel for 2015 and 2016 would 

lead to growth in supply beyond 2014 

based on the expectation that the market 

can and will respond to the standards 

we set. Similarly, we are proposing 

growth in the required volume of BBD 

in such a way that both the biodiesel 

market and other advanced biofuels 

would grow.13 The volumes that we are 

proposing for 2014, 2015, and 2016 are 

shown below. 

TABLE I.A–3—PROPOSED VOLUME

REQUIREMENTS A

2014 2015 2016 

Cellulosic biofuel 

(million gallons) 33 106 206 

Biomass-based 

diesel (billion 

gallons) ............ 1 .63 1 .70 1 .80 

Advanced biofuel 

(billion gallons) 2 .68 2 .90 3 .40 

TABLE I.A–3—PROPOSED VOLUME

REQUIREMENTS A—Continued 

2014 2015 2016 

Renewable fuel 

(billion gallons) 15 .93 16 .30 17 .40 

aAll values are ethanol-equivalent on an energy content basis, except for BBD which is 

biodiesel-equivalent. 

B. Summary of Major Provisions in This 

Action 

This section briefly summarizes the 

major provisions of this proposal. We 

are proposing applicable volume 

requirements for cellulosic biofuel, 

BBD, advanced biofuel, and total 

renewable fuel for 2014, 2015, and 2016, 

as well as the applicable volume 

requirement for BBD for 2017. The 

following sub-section summarizes our 

approach to determining the proposed 

requirements. This action also includes 

a proposed response to several requests 

we received in 2013 for a waiver of the 

2014 standards. We are also proposing 

an amendment to the regulations 

designed to clarify the scope of the algal 

biofuel pathway. Finally, we are 

proposing new deadlines for annual 

compliance reporting and attest 

reporting for the 2013, 2014 and 2015 

compliance years. 

1. Proposed Approach To Setting 

Standards for 2014, 2015, and 2016 

Because 2014 has passed, the final 

rule cannot alter the volumes of 

renewable fuel produced and consumed 

during 2014. We believe it is 

appropriate, therefore, that the 

standards we establish for 2014 reflect 

the actual supply in 2014. Similarly, 

this rulemaking can only have a partial 

impact on the volumes of renewable 

fuel produced and consumed in 2015. 

Although we believe that the standards 

we set for advanced biofuel and total 

renewable fuel must be ambitious to be 

consistent with the intent of Congress in 

establishing the RFS program, we also 

recognize that the standards we set 

cannot affect the past. Therefore, in this 

action we are proposing to base the 

applicable volume requirements for 

2014 on actual renewable fuel use, as 

determined by data on the number of 

Renewable Identification Numbers 

(RINs) generated from the EPAModerated Transaction System (EMTS), 

minus the number of RINs retired to 

account for renewable fuel export as 

reported by the Energy Information 

Administration (EIA) or retired for other 

purposes unrelated to demonstrating 

compliance with the annual standards 

as reported through EMTS.14 While this 

approach would result in exactly the 

number of 2014 RINs available for 

compliance that would be needed for 

compliance with the 2014 standards, we 

recognize that it does not guarantee that 

every individual obligated party will 

have the exact number of 2014 RINs 

needed for compliance with its 

individual RVOs. Thus there may be 

some costs associated with the 

reallocation of 2014 RINs to those 

obligated parties that need them. 

However, such disproportionate RIN 

holdings can occur in any year. We do 

not believe it would be appropriate to 

exercise our waiver authority to reduce 

the 2014 standards below the number of 

2014 RINs available for compliance. 

Rather, we believe that we should rely 

on the market to sort out the 

distribution of RINs among obligated 

parties. 

Similarly for 2015, we are proposing 

to account for the fact that the final 

standards will be limited in their ability 

to affect supply prior to the final rule. 

For 2016, our proposed volume 

requirements are based on the 

expectation that the entire calendar year 

will be available for obligated parties 

and the fuels markets to plan for and 

come into compliance. 

We are proposing the same approach 

to assessing past supply in the standardsetting process for all four renewable 

fuel categories. However, we are 

proposing that projections of supply for 

months after issuance of the NPRM 

would be determined differently for the 

four renewable fuel categories. For 

advanced biofuel and total renewable 

fuel, assessment of future supply would 

simultaneously reflect the statute’s 

purpose to drive growth in renewable 

fuels, while also accounting for 

constraints in the market that make the 

volumes specified in the statute beyond 

reach, as described more fully in 

Section II. For the BBD standard, growth 

would be based on an analysis of a set 

of factors stipulated in CAA 

211(o)(2)(B)(ii), as described in more 

detail in Section III. Finally, as 

described in Section IV, the applicable 

volume of cellulosic biofuel would be 

based on a projection of production that 

reflects a neutral aim at accuracy as 


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15While the fuels that are subject to the 

percentage standards are currently only nonrenewable gasoline and diesel, renewable fuels that 

are valid for compliance with the standards include 

those used as transportation fuel, heating oil, or jet 

fuel. 

16 In 2013 1.55 billion gallons of BBD were 

supplied to the U.S. market. This reflects the sum 

of domestically produced BBD plus imported BBD 

minus domestically produced BBD that was 

exported. This number was developed using the 

EPA Moderated Transaction System (EMTS) data 

available at http://www.epa.gov/otaq/fuels/rfsdata/

2013emts.htm (last accessed May 20, 2015) 

required by the United States Court of 

Appeals for the District of Columbia 

Circuit in API v. EPA, 706 F.3d 474 

(January 25, 2013). 

2. Advanced Biofuel and Total 

Renewable Fuel 

Since the EISA-amended RFS 

program began in 2010, we have 

reduced the applicable volume of 

cellulosic biofuel each year in the 

context of our annual RFS standards 

rulemakings to the projected production 

levels, and we have considered whether 

to also reduce the advanced biofuel and 

total renewable fuel statutory volumes 

pursuant to the waiver authority in 

section 211(o)(7)(D)(i). In the past we 

have focused primarily on the 

availability of advanced biofuels in 

determining whether reductions in the 

required volume of cellulosic biofuel 

should be accompanied by reductions in 

the required volumes of advanced 

biofuel and total renewable fuel. The 

total volume of renewable fuel in the 

form of ethanol that could realistically 

be supplied to vehicles as either E10 or 

higher ethanol blends given various 

constraints was not a limiting factor in 

the standard-setting process in prior 

years. Furthermore, the availability of 

non-cellulosic advanced biofuels was 

determined to be sufficient to overcome 

the shortfall in cellulosic biofuel. 

However, for 2014 and later years, 

neither of these two factors remains 

true, and as a result we are proposing 

reductions for these categories of 

renewable fuel for 2014, 2015, and 2016 

using the waiver authorities provided in 

CAA 211(o)(7). 

Our determination in this proposal 

that the required volumes of advanced 

biofuel and total renewable fuel should 

be reduced from the statutory targets is 

based on a consideration of the ability 

of the market to supply such fuels 

through domestic production or import 

and the ability of available renewable 

fuels to be used as transportation fuel, 

heating oil, or jet fuel.15 For example, 

the potential use of renewable fuels as 

transportation fuel, heating oil, or jet 

fuel depends in part on the 

infrastructure available for distributing, 

blending, and dispensing renewable 

fuels, as well as the vehicles in the fleet 

capable of consuming various renewable 

fuels. As described in more detail in 

Section II.A, we believe that the 

availability of qualifying renewable 

fuels and constraints on their supply to 

vehicles that can use them are valid 

considerations under both the cellulosic 

waiver authority under section 

211(o)(7)(D)(i) and the general waiver 

authority under section 211(o)(7)(A). We 

are proposing to use the waiver 

authorities in a limited way that reflects 

our understanding of how to reconcile 

real marketplace constraints with 

Congress’ intent to promote growth in 

renewable fuel use over time. 

We have projected applicable 

volumes for advanced biofuel and total 

renewable fuel for 2015 and 2016 that 

would result in significant volume 

growth over the levels supplied in 

previous years, and which in our 

judgment are as ambitious as can 

reasonably be justified. The proposed 

volume requirements for 2015 and 2016 

reflect the growth rates in both 

categories of renewable fuel that can be 

attained under a program explicitly 

designed to be ‘‘market-driving,’’ and 

that would not be expected to occur in 

the absence of those volume 

requirements. 

3. Biomass-Based Diesel 

A key issue before the Agency in 

considering the appropriate biomassbased diesel (BBD) applicable volume is 

the extent to which a portion of the 

advanced biofuel volume requirement 

should be set aside exclusively for BBD. 

In EISA, Congress chose to set aside a 

portion of the advanced biofuel 

standard for BBD, but only through 

2012. Beyond 2012 Congress stipulated 

that EPA, in coordination with other 

agencies, was to establish the BBD 

volume taking into consideration the 

history of the program and various 

specified factors, providing that the 

required volume could not be less than 

1.0 billion gallons. For 2013, EPA 

established an applicable volume of 

1.28 billion gallons. The BBD standards 

in practice only establish the minimum 

volume required; substantially higher 

volumes have been used in past years to 

help satisfy the advanced biofuel 

standard. If BBD outcompetes other 

advanced biofuels in the marketplace as 

occurred in 2013, then the BBD 

standard serves as a floor and not a 

ceiling. Indeed, only 1.28 billion gallons 

of BBD were required in 2013, yet 1.55 

billion gallons were supplied by the 

market.16 Furthermore, the total 

renewable standard can provide an 

incentive for even more BBD and other 

advanced biofuels to be supplied than is 

actually required, as also occurred in 

2013: While the applicable advanced 

biofuel volume requirement was 2.75 

billion ethanol-equivalent gallons, the 

market actually supplied 3.02 billion 

ethanol-equivalent gallons, and most of 

this was BBD. 

To preserve the important role that 

BBD plays in the RFS program, as well 

as to ensure that higher volume 

requirements for advanced biofuel can 

be reached, we believe that it would be 

appropriate to increase the BBD volume 

requirement for each year in the 2015 to 

2017 time period. However, we also 

believe that it is of ongoing importance 

that opportunities for other types of 

advanced biofuel be expanded, such as 

renewable diesel co-processed with 

petroleum, renewable gasoline 

blendstocks, and heating oil, as well as 

others that are under development. 

Thus, based on a review of the 

implementation of the program to date 

and all the factors required under the 

statute, we are not only proposing to set 

the 2014 BBD volume requirement at 

the actual volume of 1.63 billion 

gallons, but we are also proposing 

increases in the applicable volume of 

BBD to 1.7, 1.8, and 1.9 billion gallons 

for the years 2015, 2016, and 2017, 

respectively. We believe that these 

increases would support the overall 

goals of the program while also 

maintaining the incentive for 

development and growth in production 

of other advanced biofuels. We believe 

establishing the volumes at these levels 

will encourage BBD producers to 

manufacture higher volumes of fuel that 

will contribute to the advanced biofuel 

and total renewable fuel requirements, 

while also leaving considerable 

opportunity within the advanced 

biofuel mandate for investment in and 

production of other types of advanced 

biofuel with comparable or potentially 

superior environmental or other 

benefits. 

4. Cellulosic Biofuel 

The cellulosic biofuel industry 

continues to transition from research 

and development (R&D) and pilot scale 

operations to commercial scale 

facilities, leading to significant increases 

in production capacity. RIN generation 

from the first commercial scale 

cellulosic biofuel facility began in 

March 2013. Cellulosic biofuel 

production increased substantially in 

2014, with over 33 million gallons in 

that year. Last year also saw the grand 

openings of multiple new large 

commercial scale cellulosic ethanol 

facilities, and a significant number of 


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17 78 FR 71732 (November 29, 2013) and 78 FR 

71607 (November 19, 2013), respectively. 

18EPA has received, to date, waiver petitions 

from Governors Deal (GA), Fallin (OK), Perry (TX), 

Otter (ID), LePage (ME), Martinez (NM), McCrory 

(NC), Herbert (UT), and Haley (SC). In addition to 

the waiver petition from API/AFPM, EPA has also 

received waiver petitions from the following 

companies: Delek, ExxonMobil, Holly Frontier, 

Lion Oil Petroleum, Marathon Oil, NCRA, PBF 

Holding Company, Phillips 66, and Tesoro. 

cellulosic biofuel RINs generated using 

cellulosic biogas through a new 

pathway approved by EPA in 2014. For 

2014 we are proposing a cellulosic 

biofuel standard of 33 million gallons, 

consistent with the total number for 

RINs generated in 2014 that may be 

used toward satisfying an obligated 

party’s cellulosic biofuel obligation 

(both cellulosic biofuel (D3) and 

cellulosic diesel (D7) RINs.) We are also 

proposing a cellulosic biofuel standard 

of 106 million ethanol-equivalent 

gallons for 2015 and 206 million 

ethanol-equivalent gallons in 2016 

based on the information we have 

received regarding individual facilities’ 

capacities, production start dates and 

biofuel production plans, as well as 

input from other government agencies, 

and EPA’s own engineering judgment. 

As part of estimating the volume of 

cellulosic biofuel that would be made 

available in the U.S. in 2015 and 2016, 

we researched all potential production 

sources by company and facility. This 

included sources that were still in the 

planning stages, facilities that are under 

construction, facilities that are in the 

commissioning or start-up phases, and 

facilities that are already producing 

some volume of cellulosic biofuel. 

Facilities primarily focused on research 

and development were not the focus of 

our assessment, as production from 

these facilities represents very small 

volumes of cellulosic biofuel, and these 

facilities typically have not generated 

RINs for the fuel they have produced. 

From this universe of potential 

cellulosic biofuel sources, we identified 

the subset that is expected to produce 

commercial volumes of qualifying 

cellulosic biofuel for use as 

transportation fuel, heating oil, or jet 

fuel by the end of 2016. To arrive at 

projected volumes, we collected 

relevant information on each facility. 

We then developed projected 

production ranges based on factors such 

as the current and expected state of 

funding, the status of the technology 

being used, progress towards 

construction and production goals, 

facility registration status, production 

volumes achieved, and other significant 

factors that could potentially impact 

fuel production or the ability of the 

produced fuel to qualify for cellulosic 

biofuel RINs. We also used this 

information to group these companies 

based on production history and to 

select a value within the aggregated 

projected production ranges that we 

believe best represents the most likely 

production volumes from each group for 

each year. Further discussion of these 

factors and the way they were used to 

determine our proposed cellulosic 

biofuel projections for 2014, 2015, and 

2016 can be found in Section IV. 

5. Annual Percentage Standards 

The renewable fuel standards are 

expressed as a volume percentage and 

are used by each refiner and importer of 

fossil-based gasoline or diesel to 

determine their renewable fuel volume 

obligations. The percentage standards 

are set so that if each obligated party 

meets the standards, and if EIA 

projections of gasoline and diesel use 

for the coming year prove to be accurate, 

then the amount of renewable fuel, 

cellulosic biofuel, BBD, and advanced 

biofuel actually used will meet the 

volumes required on a nationwide basis. 

Four separate percentage standards 

are required under the RFS program, 

corresponding to the four separate 

renewable fuel categories shown in 

Table I.A–1. The specific formulas we 

use in calculating the renewable fuel 

percentage standards are contained in 

the regulations at 40 CFR 80.1405 and 

repeated in Section V.B.1. The 

percentage standards represent the ratio 

of renewable fuel volume to projected 

non-renewable gasoline and diesel 

volume. The volume of transportation 

gasoline and diesel used to calculate the 

proposed percentage standards was 

derived from EIA projections. The 

proposed standards for 2014, 2015, and 

2016 are shown in Table I.B.5–1. 

Detailed calculations can be found in 

Section V, including the projected 

gasoline and diesel volumes used. 

TABLE I.B.5–1—PROPOSED

PERCENTAGE STANDARDS

2014 

(%) 

2015 

(%) 

2016 

(%) 

Cellulosic biofuel ..... 0 .019 0 .059 0 .114 

Biomass-based diesel ........................ 1 .42 1 .41 1 .49 

Advanced biofuel .... 1 .52 1 .61 1 .88 

Renewable fuel ....... 9 .02 9 .04 9 .63 

6. Response To Requests for a Waiver of 

the 2014 Standards 

Concurrently with the November 29, 

2013 proposal for 2014 RFS standards, 

we also published a separate Federal 

Register Notice 17 indicating that the 

American Petroleum Institute (API) and 

the American Fuel & Petrochemical 

Manufacturers (AFPM) had submitted a 

joint petition requesting a partial waiver 

of the 2014 applicable RFS volumes, 

and that several individual refining 

companies had also submitted similar 

petitions. We noted that any additional 

similar requests would also be docketed 

and considered together with requests 

already received. EPA has subsequently 

received additional waiver petitions, 

including those submitted by nine 

Governors.18

The petitions generally asserted that 

for 2014 there is an inadequate domestic 

supply of renewable fuel and therefore 

RINs, due both to E10 blendwall 

constraints, and limitations on the 

supply of higher level ethanol blends, 

and of non-ethanol renewable fuels. 

Certain of the petitioners argued that 

this inadequate supply of renewable 

fuel (and RINs) will lead to an 

inadequate supply of gasoline and 

diesel, because refiners and importers, 

faced with a shortage of RINs, will 

reduce their production of gasoline and 

diesel for the domestic market. They 

argued that this will in turn severely 

harm the economy. 

As calendar year 2014 has passed, we 

believe it is appropriate to set the 

applicable volume requirements at the 

volumes that were actually supplied in 

2014. We do not believe that use of 2014 

renewable fuel volumes severely 

harmed the economy, and we believe 

that it is straightforward to conclude 

that there was an adequate supply of the 

volumes of renewable fuel that were 

actually used in 2014. Therefore, we do 

not believe that adequate justification 

exists for setting the 2014 volume 

requirements at levels below those 

actually supplied. We propose that our 

final action in this rulemaking will 

resolve the extent to which waivers are 

appropriate for 2014 and, therefore, will 

identify the scope of relief that should 

be accorded petitioners. 

7. Proposed Changes to Regulations 

In addition to proposing the 

aforementioned volume requirements 

and associated percentage standards, we 

are also proposing amendments to the 

RFS requirements to address two issues. 

First, we are proposing changes with 

respect to the existing algal oil pathway 

to clarify that only biofuels produced 

from oil from algae grown 

photosynthetically qualify for the RFS 

program under this pathway. We are 

aware of several companies that plan to 

produce biofuels from algae that use 

non-photosynthetic types of 


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19Furthermore, although EPA is late in 

establishing applicable volumes for biomass-based 

diesel for 2015 and 2016, we are proposing to set 

the applicable volumes of BBD for these years at 

levels below what we anticipate can actually be 

produced and used for compliance with the 

advanced biofuel requirements. Therefore, there 

should be a more than adequate supply of BBD 

RINs for compliance with the standards proposed. 

metabolism. Companies wishing to 

produce biofuels from algae grown with 

a non-photosynthetic stage of growth 

must apply to EPA for approval of their 

pathway pursuant to 40 CFR 80.1416. 

Since EPA assumed that algae would be 

grown photosynthetically when it 

evaluated the lifecycle greenhouse gas 

emissions associated with the existing 

algal oil pathway, we are clarifying the 

regulatory description of the pathway to 

align with EPA’s technical assessment 

and interpretation of the scope of this 

pathway. 

We are also proposing to revise the 

annual compliance reporting deadlines 

for obligated parties and renewable fuel 

exporters, and the attest engagement 

reporting deadlines for obligated parties, 

RIN-generating renewable fuel 

producers and importers, other parties 

holding RINs, renewable fuel exporters, 

and independent third-party auditors 

for the 2013, 2014 and 2015 compliance 

years. The proposed deadlines would 

vary for each of these parties depending 

on the applicable compliance period, 

and some parties would be required to 

submit partial annual reports 

representing a portion of the 2014 

compliance year. A detailed description 

of our proposed changes to reporting 

deadlines can be found in Section VI.B. 

C. Authority for Late Action and 

Applicability of the Standards 

Under CAA 211(o)(3)(B)(i), EPA must 

determine and publish the annual 

percentage standards by November 30 of 

the preceding year, and it must establish 

applicable volumes for biomass-based 

diesel 14 months in advance of the 

compliance year. EPA did not meet the 

statutory deadline for the 2014 or the 

2015 percentage standards, nor the 

2014, 2015, and 2016 biomass-based 

diesel applicable volumes. Nevertheless, 

we are proposing that the percentage 

standards established through this 

rulemaking would apply to all gasoline 

and diesel produced or imported in 

calendar years 2014, 2015, or 2016 as 

applicable. 

We acknowledge that this rule is 

being proposed later than the statutory 

deadlines noted above. However, this 

delay does not deprive EPA of authority 

to issue applicable volumes and 

standards for these calendar years. The 

United States Court of Appeals for the 

District of Columbia Circuit recently 

upheld the 2013 RFS standards even 

though they were issued more than 

eight months after statutory deadline. 

Monroe Energy v. EPA, 750 F.3.d 909 

(D.C. Cir. 2014). The court noted that it 

had resolved the question of EPA’s 

authority to issue RFS standards after 

the statutory deadline for issuing the 

annual RFS standards in NPRM v. EPA, 

630 F.3d 145 (D.C. Cir. 2010). In that 

case, the court explained that courts 

have declined to treat a statutory 

direction that an agency ‘‘shall’’ act 

within a specified time period as a 

jurisdictional limit that precludes action 

later. Id. at 154 (citing Barnhart v. 

Peabody Coal, 537 U.S. 149, 158 (2003)). 

Moreover, the court noted that the 

statute here requires that EPA 

regulations ‘‘ensure’’ that transportation 

fuel sold or introduced into commerce 

‘‘on an annual average basis, contains at 

least the volumes of renewable fuel’’ 

that are required pursuant to the statute. 

Id. at 152–153. This statutory directive 

requires EPA action, even if late. 

Therefore EPA believes it has authority 

to issue RFS standards for calendar 

years 2014 and 2015, and biomass-based 

diesel applicable volumes for 2014– 

2016, notwithstanding EPA’s delay. 

EPA proposes to exercise its authority 

to issue standards applicable to past 

time periods in a reasonable way. Thus, 

for 2014, EPA is proposing to establish 

renewable fuel obligations that reflect 

actual renewable fuel used as 

transportation fuel, heating oil, or jet 

fuel during that time period, and the 

proposed compliance deadline for 2014 

allows time for obligated parties to 

complete necessary transactions. For 

2015 we are similarly proposing to take 

into account actual renewable fuel use 

during the time that has already passed 

in 2015. Renewable fuel producers 

generated RINs throughout 2014, and 

have also been generating 2015 RINs 

since the beginning of the calendar year. 

To varying degrees, obligated parties 

have been acquiring RINs since the 

beginning of 2014 in anticipation of the 

publication of final volume 

requirements and standards. While we 

acknowledge the uncertainty that the 

market has experienced due to the 

delay, our proposal to determine the 

applicable requirements to account for 

past production for both 2014 and 2015 

means that there will be an adequate 

quantity of RINs available to satisfy 

those portions of the proposed 

requirements.19 In addition, there are a 

number of program flexibilities that will 

facilitate compliance. There is a 

considerable bank of carryover RINs that 

can be used to comply with up to 20% 

of the 2014 RVOs, and to the extent it 

is not used, that bank of carryover RINs 

can be rolled forward to assist in 

compliance with 2015 and 2016 

requirements. We acknowledge that 

there is a theoretical possibility that 

parties that accumulate RINs through 

their own blending activities could 

decide to bank the maximum quantity of 

RINs for their own future use or for 

future sale, and that if this practice were 

widespread that there could be a 

shortfall in available RINs for parties 

who do not engage in renewable fuel 

blending activities themselves and have 

not entered into sufficient contracts 

with blenders or other parties to acquire 

sufficient RINs. Such practices are 

possibilities in any competitive 

marketplace, and we believe that 

obligated parties have had sufficient 

experience with the RFS program to 

have taken precautionary measures to 

avoid such results and to be prepared to 

comply with applicable standards 

potentially as high as the statute 

requires. Even where they have not 

done so, and find compliance with a 

given year’s standards infeasible, they 

may avail themselves of the option of 

carrying a compliance deficit forward 

for that compliance year to the next. In 

sum, we believe that EPA’s proposed 

approach is authorized and reasonable, 

though late. 

D. Outlook for 2017 and Beyond 

We recognize that a number of 

challenges must be overcome in order to 

fully realize the potential for greater use 

of renewable fuels in the United States. 

We also recognize that the RFS program 

plays a central role in creating the 

incentives for realizing that potential. 

The standards being proposed would 

require that significant progress is made 

in overcoming those challenges. We 

expect future standards to both reflect 

and anticipate progress of the industry 

and market in providing for continued 

expansion in the supply of renewable 

fuels. 

We believe that the supply of 

renewable fuels can continue to increase 

in the coming years despite the 

constraints associated with shortfalls in 

cellulosic biofuel production and other 

advanced biofuels, and constraints 

associated with supplying renewable 

fuels to the vehicles and engines that 

can use them. As described in Section 

II.B, we believe that the market is 

capable of responding to ambitious 

standards by expanding infrastructure 

and modifying fuel pricing to provide 

incentives for the production and use of 

renewable fuels. While we do not 

believe that the statutory volumes can 

be reached within the next several 

years, the market is capable of attaining 


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20See CAA section 211(o)(7)(D) and (A). 

volumes significantly higher than in the 

past. 

In future years, we would expect to 

use the most up-to-date information 

available to project the growth that can 

realistically be achieved considering the 

ability of the RFS program to spur 

growth in the volume of ethanol, 

biodiesel, and other renewable fuels that 

can be supplied and consumed by 

vehicles. In particular we will focus on 

the emergence of advanced biofuels 

including cellulosic biofuel. Many 

companies are continuing to invest in 

efforts ranging from research and 

development to the construction of 

commercial-scale facilities to increase 

the production potential of next 

generation biofuels. We will continue to 

evaluate new pathways especially for 

advanced biofuels and respond to 

petitions, expanding the availability of 

feedstocks, production technologies, 

and fuel types eligible under the RFS 

program. 

In addition to ongoing efforts to 

evaluate new pathways for advanced 

biofuel production, we are aware that 

other actions can also play a role in 

improving incentives provided by the 

RFS program to overcome challenges 

that limit the potential for increased 

volumes of renewable fuels. Such 

actions could potentially include 

amendments to program regulations that 

would help enable and potentially 

accelerate growth in renewable fuel 

volumes over time. We are currently 

considering ideas and various options 

for such actions. The details of such 

actions are beyond the scope of this 

current rulemaking, but we will 

continue to engage interested 

stakeholders as we move forward. 

There are also other approaches to 

determining volume requirements for 

future years that have been suggested as 

potentially helping to ensure growth in 

supply of renewable fuel. For instance, 

our proposed approach to determining 

the volume requirements for advanced 

biofuel and total renewable fuel in 2015 

and 2016 is one of determining the 

maximum achievable supply by 

acknowledging constraints on supply to 

consumers resulting from the E10 

blendwall, limitations in production 

and import capabilities, and the ability 

of the market to respond to the 

standards we set. As described in 

Section II.D.2, there are a variety of 

ways that the market could respond to 

our proposed standards. 

However, we recognize that since the 

majority of renewable fuel today is 

currently consumed as 10 percent 

ethanol blends, changes in demand for 

gasoline can have a significant impact 

on the ability of the marketplace to 

blend fixed volumes of renewable fuels. 

As such, an alternative approach to 

characterizing expected growth in 

renewable fuels would be to project the 

share of the fuel pool that can 

reasonably be expected to be comprised 

of renewable fuel over time. In this way, 

increases or decreases in gasoline 

demand would be reflected in 

corresponding increases or decreases in 

mandated renewable fuel volumes. The 

distinction between volumes and 

renewable share (share of the market, 

expressed as a percentage) is not 

important once the annual standards are 

established because the volumes are 

converted to shares (percentage 

standards) and changes in gasoline and 

diesel fuel volume then automatically 

lead to corresponding changes in 

renewable fuel volumes. However, 

future gasoline consumption depends 

on many factors and is highly uncertain; 

there may be unanticipated changes in 

fuel consumption compared to current 

EIA projections, as there have been in 

the past. For example, if EPA were to 

adopt an outlook for future years based 

on a growth rate for the renewable share 

of the fuel pool, it would be easier to 

maintain such a growth rate—rather 

than maintaining an outlook for specific 

volumes—if gasoline consumption 

becomes unexpectedly low. We 

recognize that projections of expected 

future growth in renewable fuels can be 

expressed in terms of either absolute 

volumes or as a share of the 

transportation fuel pool, that 

stakeholders may see advantages in the 

latter, and we expect there may be 

additional conversation on this issue in 

the future. 

II. Proposed Advanced Biofuel and 

Total Renewable Fuel Volumes for 

2014–2016 

The national volume targets of 

advanced biofuel and total renewable 

fuel to be used under the RFS program 

each year are specified in CAA section 

211(o)(2). However, two statutory 

provisions authorize EPA to reduce 

these volumes under certain 

circumstances. EPA may reduce these 

volumes to the extent that we reduce the 

applicable volume for cellulosic biofuel, 

or if the criteria are met under the 

general waiver authority.20 We have 

evaluated the capabilities of the market 

and have determined that the volumes 

for advanced biofuel and total 

renewable fuel specified in the statute 

cannot be achieved in 2014—2016. As a 

result we are proposing to exercise our 

discretion under these statutory 

provisions to reduce the applicable 

volumes of advanced biofuel and total 

renewable fuel to address limitations in 

production or importation of these fuels, 

and factors that limit supplying them to 

vehicles that can consume them. 

While we are proposing to use our 

waiver authorities under the law to 

reduce applicable volumes from the 

statutory levels, the proposed volume 

requirements are nevertheless intended 

to drive significant growth in renewable 

fuel use beyond what would occur in 

the absence of such requirements. The 

proposed volume requirements are 

intended to be market-driving while 

staying within the limits of feasibility. 

The net impact of these proposed 

volume requirements is that the 

necessary volumes of both advanced 

biofuel and conventional (nonadvanced) renewable fuel would 

increase over levels used in the past. 

The volumes that we are proposing are 

shown below. 

TABLE II–1—PROPOSED VOLUME

REQUIREMENTS

[Billion gallons] 

2014 2015 2016 

Advanced biofuel .... 2.68 2.90 3.40 

Total renewable fuel 15.93 16.30 17.40 

A. Statutory Authorities for Reducing 

Volumes To Address Renewable Fuel 

Availability and the E10 Blendwall 

Congress specified increasing annual 

volume objectives in the statute for total 

renewable fuel, advanced biofuel, and 

cellulosic biofuel for every year through 

2022, and for biomass-based diesel 

(BBD) through 2012, and authorized 

EPA to set volume objectives for 

subsequent years after consideration of 

several specified factors. However, 

Congress recognized that circumstances 

could arise that might require a 

reduction in the volume objectives 

specified in the statute as evidenced by 

the waiver provisions in CAA 211(o)(7). 

As described below, we believe that 

limitations in production or importation 

of qualifying renewable fuels, and 

factors that limit supplying those fuels 

to the vehicles that can consume them, 

both constitute circumstances that 

warrant a waiver under section 

211(o)(7). The decrease in total gasoline 

consumption in recent years which 

resulted in a corresponding and 

proportional decrease in the maximum 

amount of ethanol that can be consumed 

if all gasoline was E10, the limited 

number and geographic distribution of 

retail stations that offer higher ethanol 

blends such as E15 and E85, the number 

of FFVs that have access to E85, as well 


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21See 74 FR 24914–15, and 78 FR 49794, August 

15, 2013. 

as other market factors, combine to 

place significant restrictions on the 

volume of ethanol that can be supplied 

to vehicles at the present time. Based on 

our assessment of the maximum amount 

of renewable fuel that can be supplied 

in 2014, 2015 and 2016 in light of these 

constraints, we believe that 

circumstances exist that warrant a 

reduction in the statutory applicable 

volumes of advanced biofuel and total 

renewable fuel for 2014, 2015 and 2016. 

EPA is proposing to use two separate 

and complementary legal authorities to 

set required volumes of advanced 

biofuel and total renewable fuel to 

levels below the volume objectives 

described in the statute: The cellulosic 

waiver authority under CAA section 

211(o)(7)(D)(i), and the general waiver 

authority under CAA section 

211(o)(7)(A). This section discusses both 

of these statutory authorities and briefly 

describes our proposed use of the 

authorities to determine appropriate 

reductions in advanced biofuel and total 

renewable fuel in comparison to the 

statutory volumes. 

As described in Section I, EPA has 

withdrawn its November 29, 2013 

proposed rule to establish 2014 RFS 

standards, and is re-proposing standards 

for 2014 that reflect consideration of 

actual renewable fuel use during 2014. 

Since the current proposal is 

substantially different than the previous 

one, we are generally not providing at 

this time, and do not intend to provide 

at the time of our final action on this 

proposal, a response to comments that 

were submitted in response to our 

earlier proposal. However, since this 

proposal envisions interpretation and 

use of RFS waiver authorities in 

essentially the same manner as 

proposed in the withdrawn NPRM, and 

since we received a substantial number 

of comments on that NPRM related to 

how the waiver authorities should be 

interpreted and used, we are providing 

a general response to the major 

comments we have received from 

stakeholders on these issues—either in 

direct response to our November 29, 

2013 NPRM or in subsequent dialogue. 

We have not attempted to respond to all 

comments on these issues, but instead 

hope to advance stakeholders’ ability to 

meaningfully comment on this proposal 

by discussing our consideration to date 

of the most common comments we have 

received on these issues. 

1. Cellulosic Waiver Authority 

Under CAA section 211(o)(7)(D)(i), if 

EPA determines that the projected 

volume of cellulosic biofuel production 

for the following year is less than the 

applicable volume provided in the 

statute, then EPA must reduce the 

applicable volume of cellulosic biofuel 

to the projected volume available during 

that calendar year. 

Section 211(o)(7)(D)(i) also provides 

that ‘‘[f]or any calendar year in which 

the Administrator makes such a 

reduction, the Administrator may also 

reduce the applicable volume of 

renewable fuel and advanced biofuels 

requirement established under 

paragraph (2)(B) by the same or a lesser 

volume.’’ Using this authority, the 

reductions in total renewable fuel and 

advanced biofuel can be less than or 

equal to, but no more than, the amount 

of reduction in the cellulosic biofuel 

volume. In prior actions EPA has 

interpreted this provision as authorizing 

EPA to reduce both total renewable fuel 

and advanced biofuel, by the same 

amount, if EPA reduces the volume of 

cellulosic biofuel.21

The cellulosic waiver provision was 

recently discussed by the United States 

Court of Appeals for the District of 

Columbia Circuit, in the context of its 

review of EPA’s 2013 annual RFS rule. 

As the Court explained, 

[T]he Clean Air Act provides that if EPA 

reduces the cellulosic biofuel requirement, as 

it did here, then it ‘‘may also reduce’’ the 

advanced biofuel and total renewable fuel 

quotas ‘‘by the same or a lesser volume.’’ 42 

U.S.C. 7545(o)(7)(D)(i). There is no 

requirement to reduce these latter quotas, nor 

does the statute prescribe any factors that 

EPA must consider in making its decision. 

See id. In the absence of any express or 

implied statutory directive to consider 

particular factors, EPA reasonably concluded 

that it enjoys broad discretion regarding 

whether and in what circumstances to reduce 

the advanced biofuel and total renewable fuel 

volumes under the cellulosic biofuel waiver 

provision. Monroe v. EPA, 750 F.3d 909, 915 

(D.C. Cir. 2014). 

For the 2013 RFS rule, the Court 

determined that EPA had reasonably 

declined to use the cellulosic waiver 

authority to reduce the advanced and 

total renewable fuel statutory applicable 

volumes by analyzing ‘‘the availability 

of renewable fuels that would qualify as 

advanced biofuel and renewable fuel, 

the ability of those fuels to be 

consumed, and carryover RINs from 

2012.’’ Id. at 916. 

Some stakeholders have suggested 

that EPA may only exercise the 

cellulosic waiver authority in 

circumstances described in Section 

211(o)(7)(A) (that is, where there is 

inadequate domestic supply or severe 

harm to the environment or economy), 

or that it must in considering use of the 

cellulosic waiver authority consider the 

factors specified in Section 

211(o)(2)(B)(ii) that are required 

considerations when EPA sets 

applicable volumes for years in which 

the statute does not do so. Contrary to 

these comments, the DC Circuit found 

in Monroe that the statute does not 

prescribe any factors that EPA must 

consider in making its decision; EPA 

has broad discretion under Section 

211(o)(7)(D)(i) to determine when and 

under what circumstances to reduce the 

advanced and total renewable fuel 

volumes when it reduces the statutory 

applicable volume of cellulosic biofuel. 

In general, we do not believe that it 

would be consistent with the energy 

security and greenhouse gas reduction 

goals of the statute to reduce the 

applicable volumes of renewable fuel 

set forth in the statute absent a 

substantial justification for doing so. 

When using the cellulosic waiver 

authority, we believe that there would 

be a substantial justification in 

circumstances where qualifying 

renewable fuels either are not available, 

or legal and practical constraints limit 

their supply to vehicles and other 

qualifying uses. In addition we may on 

a case-by-case basis consider additional 

factors on our own initiative, if we 

determine that such factors may present 

substantial justification for reducing the 

statutory volumes, or additional 

justification for not reducing them, and 

we will also consider all comments on 

the matter. Factors considered by EPA 

in exercising the cellulosic waiver 

authority may include those specified in 

Section 211(o)(2)(B)(ii), or other factors 

that EPA deems relevant in the context 

of the statutory objectives and program 

structure. We will identify and evaluate 

any such factors on a case-by-case basis. 

For this proposed rulemaking, we have 

identified the availability of renewable 

fuels and the legal and practical 

constraints on their supply to vehicles 

and other qualifying uses as the factors 

that justify the proposed exercise of our 

cellulosic waiver authority. We solicit 

comment on other relevant factors, and 

whether the relevant factors would 

justify reducing advanced and 

renewable fuel volumes by different 

amounts. 

As discussed in Section IV, we are 

proposing to reduce the applicable 

volume of cellulosic biofuel for 2014, 

2015 and 2016. We are also proposing 

to use our cellulosic waiver authority 

under section 211(o)(7)(D)(i) to reduce 

the applicable volumes of advanced 

biofuel and total renewable fuel for 

these years as a first step in determining 

the volume requirements to propose. 

Our proposed justification for doing so 

is a limitation in the availability of 


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22Assuming EPA finalizes a volume reduction for 

the advanced biofuels that is no larger than the final 

reduction in the applicable volume of cellulosic 

biofuel, EPA could rely on only the cellulosic 

waiver authority for its final action with respect to 

advanced biofuel. 

23We note that there are also pending requests 

pursuant to CAA 211(o)(7(A) from a number of 

parties for EPA to exercise its waiver authorities to 

reduce applicable volumes for 2014. While the 

Administrator is acting on her own motion, she also 

proposes that to resolve those petitions through 

and/or consistent with the final rule establishing 

2014 volume requirements. 

24For example, see http://

oxforddictionaries.com/us/definition/american_

english/supply (a stock of a resource from which a 

person or place can be provided with the necessary 

amount of that resource: ‘‘There were fears that the 

drought would limit the exhibition’s water 

supply.’’); http://www.macmillandictionary.com/

us/dictionary/american/supply (‘‘A limited oil 

supply has made gas prices rise.’’ and ‘‘Aquarium 

fish need a constant supply of oxygen.’’). 

qualifying advanced biofuel and 

constraints on the ability to supply 

qualifying renewable fuels to the 

vehicles that use them. We have 

considered the possible role of carryover 

RINs in avoiding the need to reduce the 

statutory applicable volumes, as we did 

in setting the 2013 RFS standards, but 

have decided that the availability of 

carryover RINs should not preclude 

reducing the applicable volumes for the 

reasons described in Section II.F. We are 

proposing to use the cellulosic waiver 

authority to reduce the advanced biofuel 

volume to the level of available supply, 

and are also proposing to use this 

authority to reduce total renewable 

volumes by the same amount. However, 

doing so is, we believe, insufficient to 

address all the supply limitations 

applicable to total renewable fuel. 

Therefore, we are proposing to use the 

general waiver authority as 

supplemental authority for the 

reductions in advanced biofuel and as 

the sole authority for further reductions 

in total renewable fuel volumes.22

2. General Waiver Authority 

CAA 211(o)(7)(A) provides that EPA, 

in consultation with the Secretary of 

Agriculture (USDA) and the Secretary of 

Energy (DOE), may waive the applicable 

volume requirements of the Act in 

whole or in part based on a petition by 

one or more States, by any person 

subject to the requirements of the Act, 

or by the EPA Administrator on her own 

motion. Such a waiver must be based on 

a determination by the Administrator, 

after public notice and opportunity for 

comment, that: 

• Implementation of the requirement 

would severely harm the economy or 

the environment of a State, a region, or 

the United States; or 

• There is an inadequate domestic 

supply. 

We are proposing to use the general 

waiver authority based on the statute’s 

authorization for the Administrator to 

act on her own motion on a finding of 

inadequate domestic supply.23 We 

propose to use this authority in a 

supplemental fashion with respect to 

the volumes we propose waiving using 

the cellulosic waiver authority, and as 

the sole authority for an additional 

increment of volume reduction for total 

renewable fuel. 

Because the general waiver provision 

provides EPA the discretion to waive 

the volume requirements of the Act ‘‘in 

whole or in part,’’ we interpret this 

section as granting EPA authority to 

waive any or all of the four applicable 

volume requirements in appropriate 

circumstances. Thus, for example, 

unlike the cellulosic waiver authority, a 

reduction in total renewable fuel 

pursuant to the general waiver authority 

is not limited by the reduction in 

cellulosic biofuel. 

EPA has had only limited opportunity 

to date to interpret and apply the waiver 

provision in CAA section 

211(o)(7)(A)(ii) related to ‘‘inadequate 

domestic supply,’’ and has never before 

done so in the context of deriving an 

appropriate annual RFS standard. As 

explained in greater detail below, we 

believe that this ambiguous provision is 

reasonably and best interpreted to 

encompass the full range of constraints 

that could result in an inadequate 

supply of renewable fuel to the ultimate 

consumers, including fuel infrastructure 

and other constraints. This would 

include, for instance, factors affecting 

the ability to produce or import 

qualifying renewable fuels as well as 

factors affecting the ability to distribute, 

blend, dispense, and consume those 

renewable fuels in vehicles. 

The waiver provision at CAA 

211(o)(7)(A)(ii) is ambiguous in several 

respects. First, it does not specify what 

the general term ‘‘supply’’ refers to. The 

common understanding of this term is 

an amount of a resource or product that 

is available for use by the person or 

place at issue.24 Hence the evaluation of 

the supply of renewable fuel, a product, 

is best understood in terms of the 

person or place using the product. In the 

RFS program, various parties interact 

across several industries to make 

renewable fuel available for use by the 

ultimate consumers as transportation 

fuel. Supplying renewable fuel to 

obligated parties and terminal blenders 

is one part of this process, while 

supplying renewable fuel to the ultimate 

consumer as part of their transportation 

fuel is a different and later aspect of this 

process. For example, the renewable 

fuels ethanol and biodiesel are typically 

supplied to obligated parties or blenders 

as a neat fuel, but in almost all cases are 

supplied to the consumer as a blend 

with conventional fuel (ethanol blended 

in gasoline or biodiesel blended in 

diesel). The waiver provision does not 

specify what product is at issue (for 

example, neat renewable fuel or 

renewable fuel that is blended with 

transportation fuel) or the person or 

place at issue (for example, obligated 

party, blender or ultimate consumer), in 

determining whether there is an 

‘‘inadequate domestic supply.’’ 

The waiver provision also does not 

specify what factors are relevant in 

determining the adequacy of the supply. 

Adequacy of the supply would logically 

be understood in terms of the parties 

who use the supply of renewable fuel. 

Adequacy of supply could affect various 

parties, including obligated parties, 

blenders, and consumers. Adequacy of 

supply with respect to the consumer 

might well involve consideration of 

factors different from those involved 

when considering adequacy of supply to 

the obligated parties. We believe that 

interpreting this waiver provision as 

authorizing EPA to consider the 

adequacy of supply of renewable fuel to 

all of the relevant parties, including the 

adequacy of supply to the ultimate 

consumer of renewable fuel blended 

into transportation fuel, is consistent 

with the common understanding of the 

terms used in this waiver provision, 

especially in the context of a fuel 

program that is aimed at increasing the 

use of renewable fuel by consumers. In 

our view, this is the most reasonable 

and appropriate construction of this 

ambiguous language in light of the 

overall policy goals of the RFS program. 

EPA has reviewed other fuel related 

provisions of the Clean Air Act with 

somewhat similar waiver provisions, 

and they highlight both the ambiguity of 

the RFS general waiver provision and 

the reasonableness of applying it 

broadly to include adequacy of supply 

to the ultimate consumer of 

transportation fuel. For example, CAA 

section 211(k)(6) contains provisions 

allowing EPA to defer the application of 

reformulated gasoline (RFG) in states 

seeking to opt-in to the program. There 

are two categories of states that may optin: Those with nonattainment 

classifications indicating a more serious 

and/or longstanding air quality problem 

(leading to classification as a Marginal, 

Moderate, Serious or Severe 

nonattainment area) and those that do 

not have such serious concerns, but 

which are nevertheless within the 

‘‘ozone transport region’’ established by 

CAA section 184(a). For the states with 


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25The reasons why we believe the statute should 

be interpreted in this way can be illustrated by 

examining the differences between the RFG opt-in 

situation and the RFS program. Limiting EPA’s 

consideration to ‘‘capacity to produce’’ in the 

context of deferring RFG implementation in a state 

with serious air quality concerns is not likely to 

cause implementation problems because: 

1. Infrastructure upgrades necessary to shift from 

use of conventional gasoline to RFG are relatively 

modest,; 

2. The statute provides for up to one year between 

EPA’s receipt of an opt-in request and the effective 

date of a rule requiring use of RFG, allowing time 

for the needed infrastructure upgrades; and 

3. Opt-ins typically occur one state at a time, 

allowing available infrastructure expansion 

resources to be focused in a relatively small 

geographic area. 

In contrast, allowing RFS waivers only where 

there is insufficient ‘‘capacity to produce’’ 

renewable fuel would be extremely problematic 

because: 

1. The ethanol industry has the ability to produce 

far more ethanol than can currently be consumed 

in the U.S.; 

2. Ethanol is already being supplied at E10 levels, 

and any further growth in ethanol use requires the 

time consuming installation of costly new E15 or 

E85 pumps and tanks; 

3. The number of vehicles that can use higher 

ethanol bends is limited; 

4. The statute envisions only one month between 

establishment of annual standards and the start of 

a compliance year, allowing limited time for 

infrastructure enhancements; and 

5. The RFS is a nationwide program, and 

infrastructure improvements would be needed 

throughout the country at the same time to increase 

the nation’s ability to consume renewable fuels at 

levels corresponding with production capacity. 

26 In CAA section 211(h)(5)(C)(ii), Congress 

authorized EPA to delay the effective date of certain 

changes to the federal requirements for Reid vapor 

pressure in summertime gasoline, if the changes 

would result in an ‘‘insufficient supply of gasoline’’ 

in the affected area. As with the RFS general waiver 

more serious problems that seek to optin to the RFS program, section 

211(k)(6)(A)(ii) allows EPA to defer 

application of RFG requirements if EPA 

determines that ‘‘there is insufficient 

domestic capacity to produce 

reformulated gasoline.’’ (Emphasis 

added.) However, for states with less 

serious ozone nonattainment concerns 

that are part of the ozone transport 

region, EPA may defer application of 

RFG requirements if EPA finds that 

there is ‘‘insufficient capacity to supply 

reformulated gasoline.’’ (Emphasis 

added.) We believe Congress likely 

intended the ‘‘capacity to supply’’ RFG 

as being broader in scope than the 

‘‘capacity to produce’’ RFG. This is 

consistent with the common 

understanding of the word ‘‘supply’ 

noted above as the amount of a resource 

or product that is available for use by 

the person or place at issue. Thus, while 

a source can have a ‘‘capacity to 

produce,’’ regardless of whether it has a 

market for its product, the concept of 

‘‘supply’’ does not occur in isolation, 

but in reference to the person intending 

to make use of the product. The term 

‘‘capacity to supply’’ would therefore be 

expected to include consideration of the 

infrastructure needed to deliver RFG to 

vehicles in the state within the ozone 

transport region that is seeking to opt in 

to the program. This distinction in the 

context of CAA section 211(k)(6) is 

logical, since Congress can be expected 

to have put a higher premium on use of 

RFG in states with the more serious 

ozone nonattainment issues, thereby 

constraining EPA discretion to defer 

RFG requirements to the limited 

situation where there is ‘‘insufficient 

capacity to produce’’ RFG. For states 

with less serious problems, it would be 

logical for Congress to have provided 

EPA with somewhat more latitude to 

defer application of RFG, and Congress 

referred to this broader set of 

circumstances as situations where there 

is an ‘‘insufficient capacity to supply’’ 

RFG. The language of the RFS general 

waiver provision, in comparison, 

involves use of a single ambiguous 

phrase, ‘‘inadequate domestic supply,’’ 

without elaboration or clarification as to 

whether it refers solely to production 

capacity or also includes additional 

factors relevant to the ability to supply 

the fuel to various persons such as the 

ultimate consumer. As in the RFG 

provision, however, the adequacy of 

supply referred to in the RFS general 

waiver provision can logically—and we 

believe should—be read to include 

factors beyond capacity to produce that 

impact the ability of consumers to use 

the fuel as a transportation fuel.25 This 

would be consistent with Congress’s 

apparent intent in using the term 

‘‘supply’’ in the context of the RFG 

provision. 

CAA section 211(c)(4)(C)(ii) provides 

EPA with waiver authority to address 

‘‘extreme and unusual fuel or fuel 

additive supply circumstances . . . 

which prevent the distribution of an 

adequate supply of the fuel or fuel 

additive to consumers.’’ The supply 

circumstances must be the result of a 

natural disaster, an Act of God, a 

pipeline or refinery equipment failure or 

another event that could not reasonably 

have been foreseen, and granting the 

waiver must be ‘‘in the public interest.’’ 

In this case, Congress clearly specified 

that the adequacy of the supply is 

judged in terms of the availability of the 

fuel or fuel additive to the ultimate 

consumer, and includes consideration 

of the ability to distribute the required 

fuel or fuel additive to the ultimate 

consumer. Although the RFS waiver 

provision does not contain any such 

explicit clarification from Congress, its 

broad and ambiguous wording provides 

EPA the discretion to reasonably 

interpret the scope of the RFS waiver 

provision as relating to supply of 

renewable fuel (in neat or blended form) 

to the ultimate consumer. 

CAA section 211(m)(3)(C) allows EPA 

to delay the effective date of oxygenated 

gasoline requirements for certain carbon 

monoxide nonattainment areas if EPA 

finds ‘‘an inadequate domestic supply 

of, or distribution capacity for, 

oxygenated gasoline. . . . or fuel 

additives’’ needed to make oxygenated 

gasoline. Here, Congress chose to 

expressly differentiate between 

‘‘domestic supply’’ and ‘‘distribution 

capacity,’’ indicating that each of these 

elements was to be considered 

separately. This would indicate that the 

term inadequate supply, although 

ambiguous for the reasons discussed 

above, could in appropriate 

circumstances be read as more limited 

in scope. In contrast to the RFS waiver 

provision, the section 211(m) waiver 

provision includes additional text that 

makes clear that EPA’s authority 

includes consideration of distribution 

capacity—reducing the ambiguity 

inherent in using just the general phrase 

‘‘inadequate domestic supply.’’ 

Presumably this avoids a situation 

where ambiguity would result in an 

overly narrow administrative 

interpretation. The oxygenated gasoline 

waiver provision is also instructive in 

that it clarifies that it applies separately 

to both finished oxygenated fuel and to 

oxygenated fuel blending components. 

That is, there could be an adequate 

supply of the oxygenate, such as 

ethanol, but not an adequate supply of 

the blended fuel which is sold to the 

consumer. The RFS waiver provision 

employs the phrase ‘‘inadequate 

domestic supply’’ without further 

specification or clarification, thus 

providing EPA the discretion to 

determine whether the adequacy of the 

supply of renewable fuel can reasonably 

be judged in terms of availability for use 

by the ultimate consumer, including 

consideration of the capacity to 

distribute the product to the ultimate 

consumer. In contrast to the section 

211(m) waiver provision, Congress 

arguably did not mandate that the RFS 

waiver provision be interpreted as 

providing authority to address problems 

affecting the supply of renewable fuel to 

the ultimate consumer. However, given 

the ambiguity of the RFS provision, we 

believe that it does provide EPA the 

discretion to adopt such an 

interpretation, resulting in a policy 

approach consistent with that required 

by the less ambiguous section 211(m) 

waiver provision.26


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provision, Congress did not specify what 

considerations would warrant a determination of 

insufficient supply. EPA has not been called upon 

to apply this provision to date and has not 

interpreted it. 27H.R. 6 and S. 606 as reported by Senate Envt. 

& Public Works in Senate Report 109–74. 28There are, for example, legal constraints on the 

amount of certain renewable fuels that may be 

blended into transportation fuels. These are 

discussed in Section II.D.1 for ethanol. 

29For this reason, EPA’s implementing 

regulations require that fuels with multiple possible 

end uses, such as biogas or electricity, are not 

considered to be renewable fuels absent a 

demonstration that they will be used by the 

ultimate consumers as transportation fuel. For 

instance, see 40 CFR 80.1426(f)(10)(i)(C) and 

(f)(10)(ii)(C). Similarly, our regulations require the 

retirement of RINs representing renewable fuel that 

is exported as they are not supplied as 

transportation fuel in the U.S. 

30See, e.g., EPA partial waiver decisions at 75 FR 

68094 (Nov. 4, 2010) and 76 FR 4662 (Jan. 26, 

2011). 

As the above review of various waiver 

provisions in Title II of the Clean Air 

Act makes clear, Congress has used the 

terms ‘‘supply’’ and ‘‘inadequate 

supply’’ in different waiver provisions. 

In the RFS general waiver provision, 

Congress spoke in general terms and did 

not address the scope of activities or 

persons or places that are the focus in 

determining the adequacy of supply. In 

other cases, Congress provided, to 

varying degrees, more explicit direction. 

Overall, the various waiver provisions 

lend support to the view that it is 

permissible, where Congress has used 

just the ambiguous phrase ‘‘inadequate 

domestic supply’’ in the general waiver 

provision, to consider supply in terms 

of distribution and use by the ultimate 

consumer, and that the term 

‘‘inadequate supply’’ of a fuel need not 

be read as referring to just the capacity 

to produce renewable fuel or the 

capacity to supply it to obligated parties 

and blenders. 

We are aware that prior to final 

adoption of the Energy Independence 

and Security Act of 2007, Congress had 

before it bills that would have provided 

for an EPA waiver in situations where 

there was ‘‘inadequate domestic supply 

or distribution capacity to meet the 

requirement.’’ 27 EPA is not aware of any 

conference or committee reports, or 

other legislative history, explaining why 

Congress ultimately enacted the 

language in EISA in lieu of this 

alternative formulation. There is no 

discussion, for example, of whether 

Congress did or did not want EPA to 

consider distribution capacity, whether 

Congress believed the phrase 

‘‘inadequate domestic supply’’ was 

sufficiently broad that a reference to 

distribution capacity would be 

unnecessary or superfluous, or whether 

Congress considered the alternative 

language as too limiting, since it might 

suggest that constraints other than 

‘‘distribution capacity’’ on delivering 

renewable fuel to the ultimate consumer 

should not be considered for purposes 

of granting a waiver.28 Given the lack of 

interpretive value typically given to a 

failure to adopt a legislative provision, 

and the lack of explanation in this case, 

we find the legislative history to be 

uninformative with regard to 

Congressional intent on this issue. It 

does not change the fact that the text 

adopted by Congress, whether viewed 

by itself or in the context of other fuel 

waiver provisions, is ambiguous. 

We believe that it is permissible 

under the statute to interpret the term 

‘‘inadequate domestic supply’’ to 

authorize EPA to consider the full range 

of constraints, including legal, fuel 

infrastructure and other constraints, that 

could result in an inadequate supply of 

renewable fuels to consumers. Under 

this interpretation, we would not limit 

ourselves to consideration of the 

capacity to produce or import renewable 

fuels but would also consider practical 

and legal constraints affecting the 

volume of qualifying renewable fuel 

supplied to the ultimate consumer. 

We believe that our proposed 

interpretation is consistent with the 

language of section 211(o), and 

Congressional intent in enacting the 

program. It is evident from section 

211(o) that Congress’s intent was not 

simply to increase production of 

renewable fuel, but rather to provide 

that certain volumes of renewable fuel 

be used by the ultimate consumer as a 

replacement for the use of fossil based 

transportation fuel. The very definition 

of ‘‘renewable fuel’’ requires that the 

fuel be ‘‘used to replace or reduce the 

quantity of fossil fuel present in a 

transportation fuel.’’ CAA section 

211(o)(1)(I); see also CAA 211(o)(1)(A) 

(definition of ‘‘additional renewable 

fuel’’). The RFS program does not 

achieve the desired benefits of the 

program unless renewable fuels are 

actually used to replace fossil based 

transportation fuels in the United 

States.29 For example, the greenhouse 

gas reductions and energy security 

benefits that Congress sought to promote 

through this program are realized only 

through the use by consumers of 

renewable fuels that reduce or replace 

fossil fuels present in transportation 

fuel. Imposing RFS volume 

requirements on obligated parties 

without consideration of the ability of 

the obligated parties and other parties to 

deliver the renewable fuel to the 

ultimate consumers would achieve no 

such benefits and would fail to account 

for the complexities of the fuel system 

that delivers transportation fuel to 

consumers. We do not believe it would 

be appropriate to interpret the RFS 

general waiver provision in such a 

narrow way and limit EPA’s 

consideration of the distribution and 

use of renewable fuels by the ultimate 

consumers of these fuels. 

As described in more detail in Section 

II.A.5 below, although at least for 2014 

and possibly 2015 and 2016, there is no 

shortage of ethanol and other types of 

renewable fuel that could be used to 

satisfy the statutory applicable volume 

of total renewable fuel, there are 

practical and legal constraints on the 

ability of ethanol to be delivered to and 

used as transportation fuel by vehicles. 

Legal requirements limit ethanol 

content of most gasoline to 10% (which 

is delivered as E10), but for subsets of 

vehicles allow up to either 15% ethanol 

(for 2001 and newer light-duty vehicles) 

or up to 85% ethanol (for flex fuel 

vehicles).30 In addition there are 

marketplace and infrastructure 

constraints that limit the use of higher 

level (>10%) ethanol blends. These 

considerations prevent the fuel market 

from supplying vehicles the volumes of 

ethanol needed to meet the statutory 

level of total renewable fuel, and as 

such they create an inadequate domestic 

supply of renewable fuel that can 

actually be delivered to consumers and 

used as transportation fuel. EPA has 

evaluated this situation, and in this 

proposed rule is using the general 

waiver authority, together with our 

cellulosic waiver authority, to address 

this inadequate domestic supply 

situation. 

We proposed the same interpretation 

of our general waiver authority in the 

November, 2013 NPRM for the 2014 

RFS standards (which we are 

withdrawing in light of this re-proposal 

of 2014 standards) and we received 

many comments addressing our 

proposed interpretation. Although we 

are not generally responding to 

comments on the withdrawn 2014 RFS 

proposal, to aid the public in their 

evaluation of this proposal we discuss 

below the most common themes of 

comments received and our current 

assessment of them. 

A number of stakeholders disagreed 

that a review of other CAA waiver 

authorities supports the conclusion that 

the term ‘‘inadequate domestic supply’’ 

is ambiguous, and that it can be 

interpreted to include consideration of 

infrastructure and other constraints 

related to the delivery and use of 

renewable fuel by vehicles. Most such 

stakeholders focused on section 


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31See, for instance, 77 FR 70773 (November 27, 

2012), column 1. 

211(m)(3)(C)(i), which provides for a 

waiver of the requirement to use 

oxygenated gasoline in certain carbon 

monoxide nonattainment areas where 

there is ‘‘an inadequate domestic supply 

of, or distribution capacity for, 

oxygenated gasoline.’’ They argued that 

this provision demonstrates that 

infrastructure considerations are 

distinct from supply, and that Congress 

would have used similar language in 

section 211(o)(7)(A) if it intended EPA 

to consider infrastructure and other 

constraints as a basis for an RFS waiver. 

These stakeholders asserted that there 

can be no inadequate domestic supply 

if there is sufficient qualifying 

renewable fuel produced and available 

for purchase by obligated parties and, 

consequently, that any difficulty that 

obligated parties may experience in 

delivering renewable fuels to consumers 

is irrelevant under CAA section 

211(o)(7)(A). However, EPA believes 

that these stakeholders’ analysis has 

merit only when sections 211(m)(3)(C)(i) 

and 211(o)(7)(A) are viewed in isolation, 

and that their argument is not 

persuasive when all of the CAA 

provisions containing similar waiver 

provisions are considered. For example, 

as discussed above, in section 211(k)(6) 

Congress used the term ‘‘capacity to 

produce’’ in one RFG waiver context for 

opt-in states and ‘‘capacity to supply’’ in 

another context. This suggests that the 

term ‘‘supply’ does not unambiguously 

mean the same thing as ‘‘produce,’’ as 

these commenters argue. The term 

‘‘supply’’ can mean something different, 

and logically does in the context of 

section 211(k)(6) where the two waiver 

provisions at issue use these different 

terms and apply in different contexts, to 

states with considerably different levels 

of air quality concern. The different 

ways that the term ‘‘supply’’ is used in 

the various CAA provisions indicates 

that in section 211(o)(7)(A), where the 

term is used in isolation, the word 

‘‘supply’’ is ambiguous and may 

reasonably be interpreted consistent 

with the Act’s objectives. 

Some stakeholders have asserted that 

interpreting the general waiver authority 

to allow consideration of all constraints 

on the use of ethanol by the ultimate 

consumer would amount to focusing on 

‘‘demand’’ rather than ‘‘supply’’ and 

would, therefore, be impermissible 

under the Act. EPA does not agree that 

a broad consideration of such factors as 

physical limitations in infrastructure 

(e.g., availability of E15 and E85 

pumps), legal barriers to use of 

renewable fuel, or ability of vehicles to 

use renewable fuel at varying 

concentrations, represent consideration 

of ‘demand’ rather than ‘‘supply.’ These 

factors operate as practical and legal 

limits to how much renewable fuel can 

be distributed to and used by 

consumers, and therefore clearly relate 

to how much renewable fuel can be 

‘‘supplied’’ to them. Although there may 

be some element of consumer 

preference reflected in the historic 

growth patterns of renewable fuel 

infrastructure and the current status of 

the infrastructure, it is nevertheless the 

case as of today that there are a limited 

number of fueling stations selling highethanol blends, and as a result, the 

number of stations operates as a 

constraint on how much ethanol can be 

delivered. Similarly, only flex fuel 

vehicles (FFVs) can legally use fuel with 

ethanol concentrations greater than 15 

percent. The population of FFVs has 

grown considerably in recent years, but 

is still only a small fraction of the 

passenger vehicle fleet and there is an 

even smaller number of FFVs that have 

ready access to an E85 retail outlet. As 

a result, the number of FFVs with access 

to E85 also operates as a constraint on 

how much ethanol can be delivered. 

These constraints limit the supply of 

ethanol to vehicles in the 2014–2016 

time period and, we believe, are 

appropriately considered in evaluating 

the need for an RFS waiver under 

section 211(o)(7)(A). 

Some stakeholders have stated that 

even if the term ‘‘inadequate domestic 

supply,’’ were ambiguous, EPA’s 

proposed interpretation is not 

reasonable because it would either 

reward obligated parties for their 

intransigence in planning to supply the 

volumes set forth in the statute, or 

because EPA’s interpretation would 

effectively enshrine the status quo, and 

would prevent the growth in renewable 

fuel use that Congress sought to achieve 

in establishing the program. We agree 

that obligated parties have had years to 

plan for the E10 blendwall and that 

there clearly are steps that obligated 

parties could take to increase 

investments needed to increase 

renewable fuel use above current levels, 

as we have noted in prior actions.31 We 

also note, however, that biofuel 

producers could also have taken 

appropriate measures, and that nothing 

precludes biofuel producers from 

independently marketing E85 or 

increasing the production of nonethanol renewable fuels. EPA agrees that 

its approach to interpreting the term 

‘inadequate domestic supply’ should be 

consistent with the objectives of the 

statute to grow renewable fuel use over 

time by placing appropriate pressure on 

all stakeholders to act within their 

powers to increase renewable fuel 

production and use, while also 

providing the relief to obligated parties 

that was intended through the statutory 

waiver authorities to address supply 

difficulties that cannot be remedied in 

the time period over which a waiver 

would apply. We believe that the 

approach we have proposed today 

provides an appropriate balance, and 

that the proposed applicable volumes 

are ambitious yet achievable, as 

described in Section II.D. 

3. Assessment of Past Versus Future 

Supply 

In the context of a forward-looking 

annual RFS standards rulemaking 

issued consistent with the statutory 

schedule, we propose that the 

evaluation of ‘‘supply’’ for purposes of 

determining whether ‘‘inadequate 

domestic supply’’ exists pursuant to 

section 211(o)(7)A)(ii), should involve 

an assessment of the maximum 

renewable fuel volumes that can 

reasonably be expected to be produced 

and consumed, and a comparison of 

those volumes to statutory volumes. 

This is the approach to the assessment 

of ‘‘supply’’ that we are proposing today 

for purposes of the 2016 RFS standards. 

However, the factual situation is 

different for 2014, since neither this 

proposed rule nor the final rule we 

expect to issue later in 2015 can 

influence the volumes of renewable fuel 

produced and consumed in the past. 

Accordingly, our assessment of the 

‘‘supply’’ available for RFS compliance 

during 2014 must necessarily focus on 

the number of RINs generated in 2014 

that are available for compliance with 

the applicable standards. To set the 

volume requirements at a higher level 

would require either noncompliance, 

which EPA deems an unreasonable 

approach, or the drawdown of the bank 

of carryover RINs. Although the 

availability of carryover RINs is a 

relevant consideration in determining 

the extent to which a waiver is justified, 

see Monroe 750 F.3d at 917, we believe 

that carryover RINs serve an important 

function under the program, including 

providing a means of compliance when 

natural disasters cause unexpected 

supply limitations, and that in the 

current circumstances EPA should not 

set the annual standards for 2014–2016 

at levels that would clearly necessitate 

a reduction in the current bank of 

carryover RINs. See Section II.F for 

further discussion of our consideration 

of carryover RINs in this proposal. 

For 2015, the situation is essentially 

a hybrid of the fact patterns for 2014 


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32RINs available for use in complying with the 

standards represent ethanol-equivalent gallons 

actually used. Some RINs generated in 2014 may 

not be available for compliance purposes if they are 

retired for exports, spills, invalidity, or similar 

circumstances. 

33Although we do not believe that carryover RINs 

should be relied on to set a higher volume 

requirement for 2014 than is reflected by actual 

2014 renewable fuel use, we note that even if the 

entire estimated bank of 1.8 billion carryover RINs 

were used for 2014 compliance, a waiver from 

statutory applicable volumes would still be 

required for 2014. 

34Non-ethanol supply other than BBD was 238 

mill gal in 2013 and 175 mill gal in 2014. Details 

of actual supply in 2013 and 2014 can be found in 

the docket. 

and 2016. A number of months have 

passed prior to issuance of this NPRM, 

and during those months this 

rulemaking could not influence 

renewable fuel use. Accordingly, this 

proposal accounts for actual renewable 

fuel use in the earlier part of 2015, and 

projects renewable fuel use only for 

future months. We are therefore 

proposing to use the same approach 

towards projecting renewable fuel 

growth in the latter part of 2015 as we 

are using for 2016. 

4. Combining Authorities for Reductions 

in Total Renewable Fuel 

EPA is today proposing reductions in 

the applicable volumes of advanced 

biofuel and total renewable fuel based 

on limitations in the availability of 

qualifying renewable fuels and factors 

that constrain supplying available 

volumes to the vehicles that can 

consume them. These two factors are 

both relevant forms of inadequate 

domestic supply, which authorize 

reductions under the general waiver 

authority and also justify reductions 

under the cellulosic waiver authority. 

We believe that reducing both total 

renewable and advanced biofuel are 

appropriate responses to these 

circumstances. We are proposing to use 

both the cellulosic biofuel waiver 

authority and the general waiver 

authority to reduce the statutory 

volumes for both advanced biofuel and 

total renewable fuel by 2.6 billion 

gallons in 2015 and 3.85 billion gallons 

in 2016. These two authorities are 

exercised individually, in a 

complementary fashion, and each justify 

our action. In addition, as the volume 

reduction required for total renewable 

fuel is greater than that needed for 

advanced biofuel, we are proposing to 

use the general waiver authority 

exclusively as the basis for further 

reducing the applicable volume of total 

renewable fuel by 1.6 billion gallons in 

2015 and 1.0 billion gallons in 2016. 

5. Inability of the Market To Reach 

Statutory Volumes 

In order to use the general waiver 

authority in CAA 211(o)(7)(A) to reduce 

the applicable volumes of advanced 

biofuel and total renewable fuel, we 

must make a determination that there is 

either ‘‘inadequate domestic supply’’ or 

that implementation of the statutory 

volumes would severely harm the 

economy or environment of a State, a 

region or the United States. This section 

summarizes our proposed determination 

that there is an inadequate domestic 

supply of advanced biofuel and total 

renewable fuel in the time period 2014– 

2016, and thus that the statutory volume 

targets are not achievable. 

As described in Section II.C.1 below, 

actual supply of renewable fuel in 2014 

was 2.22 billion gallons below the 

applicable volume target in the statute 

(15.93 versus 18.15 billion gallons). 

Since the requirements we establish for 

2014 cannot change what occurred in 

the past, our assessment of the ‘‘supply’’ 

available for RFS compliance during 

2014 must necessarily focus on actual 

renewable fuel use, which we propose 

to be based on the volume of RINs 

actually generated in 2014 and available 

for use in complying with the applicable 

standards.32 While we could also 

consider the availability of carryover 

RINs in assessing supply (as we did in 

the context of establishing the 2013 RFS 

annual standards), we have determined 

that in the current circumstances it 

would be imprudent and contrary to the 

long term objectives of the program to 

assess supply, and then set 

corresponding renewable fuel volume 

requirements, at levels that would 

necessitate a significant reduction in the 

current bank of carryover RINs. Further 

discussion of our evaluation of 

carryover RINs is presented in Section 

II.F.33 Since we have determined that 

actual 2014 advanced biofuel and total 

renewable fuel use was less than the 

statutory applicable volume targets, we 

believe we are authorized to use the 

general waiver authority to address the 

‘‘inadequate domestic supply’’ in 2014. 

The statute sets targets of 20.5 billion 

gallons of renewable fuel in 2015 and 

22.25 billion gallons of renewable fuel 

in 2016. We have determined that these 

volumes cannot be achieved under even 

the most optimistic assumptions given 

current circumstances. To make this 

determination, we first assumed that 

every gallon of gasoline would contain 

10% ethanol, and also assumed 

production and use of BBD volumes at 

the highest historical level, which 

occurred in 2014. When these supplies 

of renewable fuel are taken into account, 

a significant additional volume of 

renewable fuel would still be needed for 

the statutory volume targets to be met. 

TABLE II.A.5–1—ADDITIONAL VOLUMES NEEDED TO MEET STATUTORY TARGETS FOR TOTAL RENEWABLE FUEL

[Million ethanol-equivalent gallons] 

2015 2016 

Statutory target for total renewable fuel .......................................................................................................................... 20,500 22,250 

Maximum ethanol consumption as E10 a ........................................................................................................................ ¥13,780 ¥13,690 

Historical maximum biomass-based diesel supply b ....................................................................................................... ¥2,500 ¥2,500 

Additional volumes needed ............................................................................................................................................. 4,220 6,060 

a Derived from projected gasoline energy demand from EIA’s Short-Term Energy Outlook (STEO) from May 2015. 

b Represents the 1.63 billion gallons of biodiesel and renewable diesel supplied in 2014. 

Based on the current and near-future 

capabilities of the industry, we expect 

that only a relatively small portion of 

the additional volumes needed would 

come from non-ethanol cellulosic 

biofuel, non-ethanol advanced biofuels 

other than BBD, and non-ethanol 

conventional renewable fuels. In total 

these sources could account for several 

hundred million gallons, as 

demonstrated by supply of these sources 

in 2013 and 2014.34 The more likely 

sources of additional renewable fuel 

that could fulfill the need for 4.22 

billion gallons in 2015 or 6.06 billion 

gallons in 2016 are BBD in addition to 

the 1.63 billion gallons supplied in 

2014, or ethanol consumed as higher 

ethanol blends such as E15 and E85. In 

either case, more than 70% of those 

additional ethanol-equivalent volumes 


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35Assumes that all ethanol consumed as E10 in 

Table II.A.5–1 is conventional (non-advanced). 

36Based on EIA’s May 2015 Short-Term Energy 

Outlook (online interactive table), nationwide 

diesel consumption is projected to be 57.5 bill gal 

in 2015 and 58.9 bill gal in 2016. 

37 ‘‘NBB Technical Update for EPA, April 30, 

2015’’ in docket EPA–HQ–OAR–2015–0111. 

38 In general when discussing efforts to increase 

the use of ethanol beyond the blendwall we focus 

on the volume of E85 that is consumed, since 

volumes of E15 are likely to be small in 2016. See 

additional discussion of this issue in Section II.D.1 

below. 

39 Due to relative ethanol content and the fact that 

E85 displaces some E10, each gallon of ethanol 

above the E10 blendwall requires the use of 1.51 

gallons of E85. 

40Further discussion of the E10 blendwall can be 

found in Section II.D.1. 

41The balance of the additional volumes needed, 

as shown in Table II.A.5–1, would most likely be 

corn-ethanol. 

42 42 Ethanol import data from EIA, representing 

imports directly from Brazil and indirectly through 

the Caribbean Basin Initiative (CBI) and the Central 

America Free Trade Agreement (CAFTA). http://

www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_

epooxe_im0_mbbl_m.htm. 

43Based on import data from EMTS. 

44 ‘‘Brazil Hikes Ethanol Blend in Gasoline to 

27%,’’ DownstreamBusiness.com, March 12, 2015. 

would need to be advanced biofuel in 

order to meet the statutory volume 

requirement for advanced biofuel.35

If all of the additional volumes 

needed were biodiesel, the industry 

would need to supply a total of about 

4.5 billion gallons in 2015 and 5.7 

billion physical gallons in 2016. There 

currently exists only about 2.8 billion 

gallons of registered biodiesel 

production capacity in the U.S., though 

total production capacity considering 

unregistered facilities may be as high as 

3.6 billion gallons. In addition to 

expanding the registered production 

capacity, the industry would need to 

restart all idled facilities, secure 

sufficient feedstocks including diverting 

them from current uses, implement 

significantly expanded distribution, 

blending, and retail sales infrastructure, 

and establish new contracts for 

distribution and sales. Based on current 

market circumstances, including the 

biodiesel sector’s current production 

capacity and broader infrastructure 

limitations, we do not believe that an 

expansion in production and use of this 

magnitude is possible in 2015 or 2016. 

Just as importantly, volumes on the 

order of 4.5 billion gallons in 2015 and 

5.7 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 

8% of the diesel pool in 2015 and 10% 

in 2016.36 Although most medium and 

heavy-duty engine manufacturers 

warrant the use of blends up to B20 in 

their more recent models, some lightduty engine manufacturers do not, and 

the majority of highway and nonroad 

diesel engines in use today are 

warranted for no more than 5% 

biodiesel. Also, biodiesel concentrations 

in the winter months are sometimes 

kept to lower levels by engine owners 

due to cold weather operability and 

storage concerns. The National 

Biodiesel Board has extensive efforts 

underway working with the vehicle and 

engine manufacturers to continue to 

expand product offerings 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.37 There are also efforts to 

increase the use of biodiesel in heating 

oil. These will continue to bear fruit, 

allowing the biodiesel volume to 

continue to rise over time, but not to the 

levels that would be needed in 2015 and 

2016 if the additional volumes shown in 

Table II.A.5–1 were met with biodiesel. 

Alternatively, if all of the additional 

volumes were ethanol, the U.S. would 

need to consume volumes of E85 far 

higher, in our estimation, than the 

market is capable of supplying: in 2015 

the required volume of E85 would need 

to be about 6.4 billion gallons, while in 

2016 it would need to be about 9.2 

billion gallons.38 39 These volumes are 

30–50 times higher than actual E85 

consumption in 2014, and would 

require many of those FFVs that do not 

have an E85 retail outlet anywhere close 

by to use it.40 Moreover, a majority of 

this additional ethanol would need to be 

advanced, and currently the only 

substantial source of advanced ethanol 

is imported sugarcane ethanol from 

Brazil which has recently increased its 

own ethanol use requirements. In order 

to meet the statutory volume 

requirement for advanced biofuel, the 

U.S. would need to import at least 3.0 

billion gallons in 2015 and 4.7 billion 

gallons in 2016.41 Such volumes would 

be on the order of ten times higher than 

actual annual imports in the past. The 

highest volume of Brazilian sugarcane 

ethanol that has ever been imported was 

680 million gallons in 2006, and in 

recent years ethanol imports have been 

considerably lower.42 In 2014, imports 

were only 64 million gallons.43 While 

production of sugarcane ethanol in 

Brazil has increased, demand for 

ethanol in Brazil has also increased. For 

instance, Brazil recently increased the 

required ethanol content of gasoline 

from 25% to 27.5%.44 As a result, we 

believe that exports of 3.0—4.7 billion 

gallons from Brazil to the U.S. in the 

2015—2016 timeframe are infeasible. 

The additional volume of 4.22 billion 

gallons in 2015 or 6.06 billion gallons in 

2016 could also be satisfied through 

production and use of a combination of 

BBD and E85. However, even in this 

case the volumes are untenable. Figure 

II.A.5–1 shows the range of possibilities 

for both 2015 and 2016. 


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45 211(o)(7)(A) says, ‘‘The Administrator . . . may 

waive the requirements . . .’’ [emphasis added] 

46As discussed in Section II.A, EPA has 

considerable discretion in exercising the cellulosic 

waiver authority, and is not constrained to consider 

any particular factor or list of factors in doing so. 

Nevertheless, EPA is proposing to base its exercise 

of the cellulosic waiver authority on the same 

general considerations justifying its use of the 

general waiver authority—availability of renewable 

fuel and the legal and practical constraints on their 

supply to vehicles and other qualifying uses. We 

invite comment on this approach. 

We recognize that the market could 

potentially reach higher total volumes 

than those reached in 2014 by using a 

combination of biodiesel and E85. Even 

so, we believe that the market could not 

reach the volumes specified in the 

statute. For instance, one possible 

combination for 2016 would be 4.5 

billion gallons of E85 and 3.7 billion 

gallons of biodiesel. While both of these 

volumes are considerably less than the 

maximums that would be required if the 

market supplied only one or the other, 

nevertheless both levels appear to be 

beyond the reach of the market under 

current circumstances. Based on this 

assessment, we do not believe that the 

statutory volumes for advanced biofuel 

and total renewable fuel can be met in 

2015 or 2016. 

B. Overview of Approach to Determining 

Volume Requirements 

Although the statute does not require 

that EPA issue a waiver of the statutory 

applicable volumes when EPA 

determines that there is an inadequate 

domestic supply of renewable fuel, we 

are in fact proposing to do so.45

However, we are proposing to exercise 

that authority only to the extent 

necessary to remove the inadequacy in 

supply. That is, our objective in 

exercising the general waiver authority 

is to set the volume requirements at the 

boundary between an adequate 

domestic supply and an ‘‘inadequate 

domestic supply.’’ 46 One way of 

expressing this objective is to say we are 

seeking to determine the maximum 

volumes of renewable fuel that are 

achievable in light of supply 

constraints. This is a very challenging 

task not only in light of the myriad 

complexities of the fuels market and 

how individual aspects of the industry 

might change in the future, but also the 

fact that we cannot precisely predict 

how the market will respond to the 

volume-driving provisions of the RFS 

program. Thus the determination of the 

maximum achievable volumes is one 

that we believe necessarily involves 

considerable exercise of judgment. To 

this end, we are proposing ‘‘maximum 

achievable’’ volumes of advanced 

biofuel and total renewable fuel in this 

package that reflect our judgment as to 

where the intersection between 

adequate domestic supply and 

inadequate domestic supply might fall. 

There are a number of indications, 

described below, that the volumes we 

are proposing today represent a 

reasonable estimate of the maximum 

volumes achievable. 

In the November 2013 NPRM we 

projected achievable volumes by 

following an approach wherein we first 

projected future volumes for each of the 

various components of the renewable 

fuel pool and then combined them using 

a statistical approach to arrive at overall 

totals. By considering each possible 

source of renewable fuel in isolation, we 

had intended to reduce the generation of 

the proposed standards to a collection of 

more easily estimated components. We 

acknowledged that each source of 

renewable fuel was not independent 

from other sources under the influence 

of the RFS program, but we nevertheless 

treated them as such. However, because 

the projected volume of each individual 

source was uncertain, there needed to 

be flexibility in the proposed volume 

requirements so that excesses of one 

source could compensate for potential 

shortfalls in another source. To account 

for this fact, and also for the fact that the 

uncertainty associated with each 

individual source was compounded 

when those sources were added 

together, we targeted the mean of the 

projected range of potentially achievable 

volumes rather than some higher value 

as the basis for the proposed volume 

requirements. 

After further consideration, we 

believe that the approach we took in the 

November 2013 NPRM underestimated 

achievable volumes and did not fully 

account for the potential of the market 

to respond to the standards that we set. 

We have determined that considering 

each potential source of renewable fuel 

in isolation, adding those sources 

together, and then using the mean of the 

resulting range was more suited to 

taking a neutral aim at accuracy of 

supply, rather than estimating the 

maximum volumes that can be achieved 

from a responsive market as implicitly 

required by the statute. The applicable 


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47Assumes that AEO2007’s 2022 demand for 

gasoline energy was fulfilled entirely by E10. 

AEO2007 however, projected that considerably less 

gasoline used in 2022 would be E10. We have 

converted the projected 2022 gasoline energy 

demand into an equivalent volume of E10 to 

determine the maximum volume of ethanol that 

could have been consumed in 2022, based on the 

AEO2007, if all gasoline was E10. 

volumes established by Congress in the 

statute were very ambitious, and even in 

cases where we have determined that 

the statutory volumes cannot be met we 

are under an obligation to set volume 

requirements that are achievable but 

still ambitious. Therefore, for this 

proposal we have found it more 

straightforward and more in keeping 

with the statute’s goals to estimate the 

total maximum achievable volumes for 

both advanced biofuel and total 

renewable fuel based on the market 

potential for overcoming the various 

constraints at play. In this process was 

have considered the contributions from 

individual sources of renewable fuel, 

including E15 and E85, in the aggregate 

rather than individually, and in the 

context of a market that is responsive to 

the standards that we set. 

Section II.A above lays out the 

rationale and justification for exercising 

our waiver authority under the Clean 

Air Act’s relevant provisions. In 

determining the specific volumes to 

propose, we have considered not only 

the current circumstances and 

limitations in the ability to supply 

renewable fuels to the consumer, but 

also historic renewable fuel growth 

patterns and maximum supplies, the 

intent of Congress to use the RFS 

program to drive growth in renewable 

fuel use, and our assessment (based on 

years of regulating the fuel production 

and distribution industry) of the ability 

of the RFS program to effect changes 

that will result in growth. As a result, 

our proposed approach envisions 

growth in supply beyond historical 

levels as envisioned by the statute. This 

section provides an overview of our 

approach to determining the proposed 

volume requirements. 

1. Fulfilling Congressional Intent To 

Increase Use of Renewable Fuels 

Although there is scant legislative 

history for the Energy Independence 

and Security Act (EISA) to confirm the 

facts that were considered by Congress 

at the time of enactment, we believe that 

when Congress specified the renewable 

fuel volume targets that the RFS 

program was to attain, that it likely was 

with the understanding that the growth 

reflected in the statutory tables of 

applicable volumes would be beyond 

any previously demonstrated ability of 

the industry to produce, distribute, and 

consume renewable fuels. For example, 

the annual average growth reflected in 

the statutory volumes for the time 

period between 2009 and 2022 is 1.6 

billion gallons per year for advanced 

biofuel and 1.9 billion gallons per year 

for total renewable fuel. However, in the 

period 2001 to 2007 leading up to 

enactment of EISA, annual average 

growth rates were lower: 0.8 billion 

gallons per year for ethanol, which was 

not advanced biofuel, and 0.07 billion 

gallons per year for biodiesel. The 

supply of other renewable fuels during 

this timeframe was essentially zero. In 

other words, Congress set targets that 

envisioned growth at a pace that far 

exceeded historical growth and 

prioritized that growth as occurring 

principally in advanced biofuels 

(contrary to historical growth patterns). 

It is apparent, therefore, that Congress 

intended to require changes that would 

be unlikely to occur absent the new 

program. 

Moreover, it is highly unlikely that 

Congress expected the very high 

volumes that it specified in the statute 

to be reached only through the 

consumption of E10; indeed the statute 

does not explicitly require the use of 

ethanol at all. At the time EISA was 

passed in 2007, EIA’s Annual Energy 

Outlook for 2007 projected that 17.3 

billion gallons of ethanol is the 

maximum that could be consumed in 

2022 if all gasoline contained E10 and 

there was no E0, E15, or E85.47

However, 17.3 billion gallons is far less 

than the 35 billion gallons of renewable 

fuel other than BBD that Congress 

targeted for use in 2022. Thus, if the 

statutory targets were to be achieved, 

17.7 billion gallons of renewable fuel 

would need to be consumed in 2022 

either as higher level ethanol blends 

(E11—E85), or as non-ethanol fuels. 

Such levels were far beyond the 

industry’s abilities at the time of EISA’s 

enactment, strongly suggesting that 

Congress expected the RFS program to 

compel the industry to make dramatic 

changes in a relatively short period of 

time. 

Congress did not explicitly indicate, 

in EISA or in any other document 

associated with it, the sort of changes 

that may have been expected to occur to 

reach 36 billion gallons by 2022. 

Instead, there was an implicit 

assumption that the market would 

respond appropriately to overcome 

those obstacles to significant growth 

that might exist. Today we know that 

the changes needed to significantly 

expand renewable fuel use fall into a 

select number of areas, including: 

• Increased production and/or 

importation of ethanol, primarily 

advanced ethanol 

• Increased use of E15 in model year 

2001 and later vehicles 

• Increased use of E85 or other higher 

level ethanol blends in flex-fuel 

vehicles (FFVs) 

• Increased production and/or 

importation of non-ethanol biofuels 

(e.g., biodiesel, renewable diesel, 

renewable gasoline, and butanol) for 

use in conventional vehicles and 

engines 

• Increased use of biogas in CNG 

vehicles 

• Increased use of renewable jet fuel 

and heating oil 

• Increased use of non-food based 

feedstocks 

• Co-development of new technology 

vehicles and engines optimized for 

new fuels 

In the near term we expect that 

increases in E85 and biodiesel will 

dominate efforts to increase the use of 

renewable fuel, with smaller roles 

played by other avenues (e.g., increased 

E15 use). 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. 

We believe that the approach we take to 

setting the standards must be consistent 

with Congress’ clear goal of compelling 

the industry to make dramatic changes 

to increase renewable fuel use. To this 

end, the approach presented in this 

action makes use of the statutory waiver 

authorities only to the degree necessary 

to ensure that the resulting volumes of 

advanced biofuel and total renewable 

fuel are within reach of the market. 

We believe that over time use of both 

higher level ethanol blends and nonethanol biofuels can and will increase, 

consistent with Congress’ intent in 

enacting EPAct and EISA. As stated 

above, while Congress provided waiver 

authority to account for supply 

challenges, we do not believe that 

Congress intended the renewable fuels 

market to be ultimately constrained by 

the E10 blendwall or any other 

particular limitation that may exist in 

supplying renewable fuels. The fact that 

Congress set volume targets reflecting 

increasing and substantial amounts of 

renewable fuel use clearly signals that it 

intended the RFS program to create 

incentives to increase renewable fuel 

supplies and overcome supply 

limitations. Notwithstanding these facts, 


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48 In competitive markets, such as the market for 

E10, fuel blenders must reflect the lower effective 

prices of renewable fuel (ethanol) in the price of the 

E10. For emerging markets, such as E85, there may 

be greater opportunities for fuel blenders to 

withhold profit due to a lack of market competition 

until such a time as other parties enter the E85 

market. 

49Although not directly relevant to the 

establishment of the proposed standards, for further 

background information on EPA’s understanding of 

the RIN and renewable fuel market dynamics see 

‘‘A Preliminary Assessment of RIN Market 

Dynamics, RIN Prices, and Their Effects,’’ Dallas 

Burkholder, Office of Transportation and Air 

Quality, US EPA. May 14, 2015, EPA Air Docket 

EPA–HQ–OAR–2015–0111. 

Congress also authorized EPA to adjust 

statutory volumes as necessary to reflect 

situations where only partial progress 

had been made towards eliminating 

supply limitations, as well as to address 

situations involving unexpected severe 

economic or environmental harm 

resulting from program implementation. 

2. RFS Program Mechanisms and Their 

Role in Supporting Growth in 

Renewable Fuel Use 

Congress charged EPA with 

implementing a program whose explicit 

goal is increased renewable fuel use 

over time, and EPA, in developing an 

implementation framework, sought to 

achieve this goal in a fashion that 

maximizes flexibility and the power of 

the marketplace, while at the same time 

recognizing the complex and 

disaggregated structure of the fuel 

production and distribution systems. 

EPA created a system whereby 

renewable fuel producers generate RINs 

for each gallon of renewable fuel 

produced. These RINs, under certain 

conditions, can be separated from the 

renewable fuel and bought and sold by 

registered parties. They are ultimately 

used by obligated parties as a means of 

demonstrating compliance with their 

renewable volume obligations. In 

establishing a compliance approach 

based on RINs, EPA sought to encourage 

efficient, market-based solutions to the 

challenges associated with increasing 

the production, distribution, and 

consumption of renewable fuels. 

The RIN system is the mechanism 

established by EPA for obligated parties 

to demonstrate compliance with the 

standards, and is designed to provide 

obligated parties flexibility in the means 

they use to demonstrate compliance. 

The RFS program, acting through the 

mechanism of the RIN system, operates 

to provide an incentive for renewable 

fuel producers to increase the 

production of renewable fuels by, in 

effect, increasing the price blenders and 

obligated parties are willing to pay for 

renewable fuels. Under the RFS 

program, renewable fuel producers sell 

not only the fuels they produce, such as 

ethanol or biodiesel, but also the RINs 

that are ‘‘assigned’’ to the renewable 

fuel. As the demand for RINs increases, 

the willingness of the market to pay for 

renewable fuels and the RINs assigned 

to them also increases. When working 

efficiently, this system allows renewable 

fuel producers to continue to profitably 

market renewable fuel at times that 

would otherwise result in negative 

margins, such as when the price of 

feedstock or other inputs are unusually 

high, the price of the petroleum fuels 

that renewable fuels replace is 

unusually low, or when market demand 

for renewable fuel is low. In this way 

the RFS program, through the RIN 

system, also assists renewable fuel 

producers seeking to finance the 

construction of new facilities, especially 

facilities capable of producing cellulosic 

or advanced biofuels, by providing 

certainty that there will be a market for 

increasing volumes of renewable fuels. 

The RIN system should also 

incentivize the development of the 

renewable fuel distribution 

infrastructure by helping to decrease the 

net cost of renewable fuels. As 

mentioned, when fuel blenders or 

obligated parties purchase renewable 

fuel directly from renewable fuel 

producers this fuel generally comes 

with an assigned RIN. When a fuel 

blender blends the renewable fuel with 

petroleum-based fuel to create finished 

transportation fuel, the blender is able 

to separate and sell the RIN that was 

previously assigned to the renewable 

fuel. Whatever price the fuel blender or 

obligated party receives for the RIN can 

be thought of as reducing the net 

purchase price of the renewable fuel. 

For example, if a fuel blender purchases 

a gallon of ethanol with an attached RIN 

for $1.50 and, after blending the ethanol 

to create transportation fuel, sells the 

RIN for $0.50, the blender has 

effectively paid $1.00 for the gallon of 

ethanol without the RIN. The higher the 

price received for the RIN, the lower the 

effective cost of the renewable fuel. 

Higher RIN prices therefore enable fuel 

blenders to market finished fuels that 

contain renewable fuel components at 

lower prices by allowing them to 

purchase renewable fuels for a lower 

effective price. A fuel blender can 

choose not to reduce the price of the 

blended fuel and keep the value 

associated with the RIN as profit, or 

they can attempt to increase their 

market share by passing along the lower 

effective purchase price of the 

renewable fuel to the customers in the 

price of their fuel blends.48 By 

increasing the potential profitability of 

blending renewable fuels, higher RIN 

prices can incentivize the build out of 

the infrastructure necessary to blend 

and distribute renewable fuel blends as 

parties seek to enter or expand their 

position within this market.49

Finally, the RFS program, operating 

through the RIN system should increase 

the consumption of renewable fuels by 

ultimately decreasing the cost of 

renewable fuel blends to consumers 

relative to the cost of fuel blends that do 

not contain renewable fuels. RIN prices 

can be used by blenders to decrease the 

effective cost of renewable fuel used to 

create transportation fuel. As more 

market participants enter the renewable 

fuel blending and distribution 

marketplace, and consumers learn to 

accurately compare the cost of E10 and 

other higher-level ethanol blends, over 

some period of time the competition 

among renewable fuel blenders and 

distributors should result in a greater 

portion of the reduced effective cost of 

renewable fuel blends enabled by the 

sale of the RIN to be passed on to fuel 

consumers. Transportation fuel that 

contains renewable fuels should then 

reflect these cost reductions relative to 

transportation fuel containing lower 

volumes of renewable fuel (or no 

renewable fuel) in proportion to their 

renewable fuel content; transportation 

fuel containing a greater percentage of 

renewable fuels should be priced lower 

than transportation fuel containing a 

lesser percentage of renewable fuel. 

Motivated by the lower fuel prices for 

transportation fuel containing greater 

renewable fuel content (such as E85) 

relative to fuels containing less 

renewable fuel (such as E10), consumers 

will then choose to purchase increasing 

volumes of renewable fuel. If the price 

discount for renewable fuels is great 

enough for a long enough period of 

time, they may also be motivated to 

purchase vehicles capable of utilizing 

fuels containing higher percentages of 

renewable fuels, such as flexible fuel 

vehicles. 

While economic theory and the 

illustration in the preceding paragraphs 

support the idea that RINs can serve as 

a mechanism to increase the production, 

distribution, and consumption of 

renewable fuels, it is important to note 

that this is dependent on the 

marketplace working efficiently. In 

reality, there is a timing component 

associated with each of the steps 

outlined above. Renewable fuel 

producers and investors must see a 

sustained, profitable market for 

renewable fuels before they will be 

willing to invest in the construction of 

additional fuel production capacity, 


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50E85 is assumed to contain 74% ethanol, 

consistent with the concentration assumed by EIA. 

Each gallon of E85 displaces some E10. The net 

result of these two factors is that every gallon of 

ethanol that must be consumed above the E10 

blendwall requires 1.51 gallons of E85. 

51Because the applicable volume requirement for 

total renewable fuel in 2013 was 16.55 bill gal, but 

actual supply was only 15.54 bill gal, there was a 

shortfall of about 1 bill RINs needed for 

compliance. 

52For a further discussion of the ability of the 

RFS program, acting through the RIN system, to 

impact E85 infrastructure and pricing as well as the 

limitations of the RFS program see Section II.B.2. 

53 78 FR 71732, November 29, 2013. 

54 26 bill gal estimate assumes that FFVs in the 

fleet in 2014 had a cumulative consumption 

capacity of about 13 billion gallons of E85, that E85 

would average 74% ethanol, and that model year 

2001 and later conventional vehicles had a 

cumulative consumption capacity of about 110 

which may take years to construct and 

bring online. Fuel blenders and 

distributors must see sustained profit 

opportunities before they are willing to 

invest in new infrastructure to increase 

their capacity to blend and distribute 

renewable fuels. Market competition 

must increase before fuel blenders and 

distributors are willing to pass along the 

reduced effective price of renewable 

fuel to consumers. New fueling 

infrastructure may need to be built to 

facilitate the sales of fuels containing an 

increasing percentage of renewable fuel. 

Consumers will need to learn to be able 

to identify value in fuel blends 

containing higher proportions of 

renewable fuels, as well as their 

vehicle’s ability to handle these fuel 

blends and where they are available for 

purchase. 

This suggests that while the RFS 

program established by EPA can be 

effective at increasing the renewable 

content of transportation fuels over 

time, it likely cannot substantially 

increase the available supply of 

renewable fuels to consumers to the 

volumes envisioned by Congress in the 

short term. The program, as Congress 

clearly indicated, is intended to grow 

over a period of years. EPA remains 

committed to promoting renewable fuel 

production and use in the United States, 

and we believe the RFS program will be 

effective in achieving this end. Due to 

the current state of the renewable fuel 

production, distribution, and 

consumption marketplace, we believe 

the required volumes of renewable fuel 

must be reduced below the statutory 

levels in the immediate near term. An 

approach that provides volume targets 

that balances aggressive growth with 

marketplace realities is necessary, is 

consistent with the statute and 

Congressional intent, and is the 

intended outcome of this proposed 

action. 

3. Current and Future Shortfalls in 

Supply 

In 2013 and 2014, the market 

supplied less renewable fuel to the 

domestic transportation sector than the 

statutory targets for those years. While 

the standards for 2013 were not 

finalized until August 15, 2013 and the 

standards for 2014 have not yet been 

finalized, we do not believe that these 

delays are the only reasons that actual 

supply fell short of the statutory 

volumes. Shortfalls in production and 

import capability of non-ethanol 

renewable fuels and constraints on the 

supply of ethanol to vehicles were also 

significant factors in not meeting the 

statutory volume targets, and we expect 

these factors to continue in 2015 and 

beyond. 

Supplies of BBD and advanced 

biofuel in 2013 exceeded the statutory 

requirements for these two categories of 

renewable fuel by a wide margin. In 

addition, there was a record high of 

about 250 million ethanol-equivalent 

gallons of non-advanced biodiesel and 

renewable diesel imported in 2013. 

However, supply of total renewable fuel 

fell far short of the statutory target of 

16.55 billion gallons, reaching only 

15.54 billion gallons. The most likely 

source of additional renewable fuel that 

could have made it possible to reach a 

total of 16.55 billion gallons was cornethanol. Consuming an additional 1 

billion gallons of ethanol would have 

required consumption of E85 to increase 

to more than 1.5 billion gallons.50 The 

fact that the market only achieved about 

130 million gallons of E85 in 2013 

despite substantial increases in the 

production and import of non-ethanol 

blends and the substantial draw-down 

in the bank of carryover RINs indicates 

that E85 consumption was 

constrained.51 We believe these 

constraints included those related to 

infrastructure (e.g., availability of E85 at 

retail and the number of FFVs in the 

fleet) and poor pricing of E85 relative to 

E10 that fails to overcome the lower 

energy content of E85 and any 

inclinations that FFV owners may have 

to opt to use gasoline.52

A similar situation existed in 2014, 

except that both the advanced biofuel 

and total renewable fuel volumes 

supplied fell short of the statutory 

volume targets. We recognize that the 

market may have been influenced by the 

proposed volume requirements for 2014 

specified in the November 2013 Notice 

of Proposed Rulemaking (NPRM) which 

included proposed reductions from the 

statutory levels.53 However, there are 

reasons to believe that the November 

2013 NPRM was not the only factor 

resulting in actual supply falling short 

of the statutory volumes. Not only did 

we request comment on volume 

requirements higher than those we 

proposed, but there was an inherent 

possibility that we might finalize the 

statutory volumes for 2014. Indeed, we 

received over 340,000 comments on the 

November 2013 NPRM, many of which 

requested that we set the 2014 volume 

requirements at the statutory levels. We 

believe that obligated parties would 

likely act prudently to minimize the risk 

that they would be out of compliance 

regardless of the outcome in the final 

rule. The fact that total demand for 

gasoline was about the same in 2014 as 

it was in 2013 suggests that the E10 

blendwall also played a role in limiting 

the supply of renewable fuel. Thus the 

facts suggest that factors other than the 

NPRM were principally responsible for 

renewable fuel use being considerably 

below the statutory volume levels. In 

particular, we believe these factors 

include insufficient production and 

import of non-ethanol renewable fuels, 

and constraints on the supply of ethanol 

to vehicles that can consume it. 

Our view that factors other than the 

November 2013 NPRM were responsible 

for renewable fuel use being 

considerably below the statutory 

volume levels in 2014 is also supported 

by the fact that the supply of advanced 

biofuel was insufficient to fill the gap 

created by the shortfall in cellulosic 

biofuel. Under the statute, cellulosic 

biofuel was intended to fill 1.75 billion 

gallons out of the 3.75 billion gallons 

advanced biofuel applicable volume 

target. In reality, cellulosic biofuel was 

only 0.03 billion gallons. The market 

did increase the supply of other 

advanced biofuel, but those increases 

were insufficient to reach the statutory 

volume target. Specifically, the market 

supplied 1.63 billion gallons (2.5 billion 

ethanol-equivalent gallons) of BBD but 

only 143 million gallons of other 

advanced biofuel. We expect the gap 

created by the shortfall in cellulosic 

biofuel to widen further in 2015 and 

2016 as the statutory volume targets 

quickly increase but the supply 

potential of the market increases at a 

slower rate. 

Supply of ethanol in higher level 

ethanol blends, primarily E15 and E85, 

also fell far short of what would have 

been needed to reach the statutory 

volumes of total renewable fuel in 2014. 

While the total volume of ethanol that 

could in theory have been consumed in 

2014 in the form of E15 and E85 was 

about 26 billion gallons 54 based on the 


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billion gallons of E15 which would contain 15% 

ethanol. 

55Low actual consumption compared to 

consumption capacity may also be a function of 

vehicle warranties which do not explicitly permit 

the use of E15. 

56Source: DOE’s Alternative Fuels Data Center. 

57The largest nationwide average discount for 

E85 relative to gasoline reported in the Department 

of Energy’s quarterly Clean Cities Alternative Fuel 

Price Report in 2014 was 13.8% (October 2014; the 

average gasoline price was $3.34 per gallon and the 

average E85 price was $2.88 per gallon). The Energy 

Information Administration estimates that E85 

contains 74% ethanol on average, requiring a 

discount of approximately 22% per gallon for E85 

relative to gasoline for E85 to priced equal to 

gasoline on a dollar per BTU basis. Price discounts 

for E85 relative to gasoline were higher or lower for 

individual regions, states, and stations. 

58 75 FR 68,094 (Nov. 4, 2010) (First E15 Partial 

Waiver Decision); 76 FR 4662 (Jan. 26, 2011) 

(Second E15 Partial Waiver Decision). 

59Although we estimate that there are 

approximately 1.8 billion carryover RINs available, 

we are proposing not to count those RINs as part 

of the ‘‘supply’’ for 2014 or later years, for the 

reasons described in Section II.F. 

60http://www.eia.gov/dnav/pet/pet_move_expc_

a_EPOORDB_EEX_mbbl_m.htm. 

61 ‘‘Summary of data on 2014 RIN Generation and 

Consumption,’’ memorandum from David Korotney 

to EPA docket EPA–HQ–OAR–2015–0111. 

consumption capacity of vehicles that 

are legally permitted to use these fuels, 

constraints such as those imposed by 

blending and dispensing infrastructure 

and poor pricing relative to E10 resulted 

in only about 100—200 million gallons 

of ethanol actually being consumed as 

E15 and E85 in 2014.55 Use of E15 in 

2014 was limited by the very small 

number of stations choosing to market 

it, which numbered less than 100 by the 

end of 2014 out of a total of more than 

150,000 stations nationwide. Similarly, 

the number of retail stations offering 

E85 was about 3,000 by the end of 2014, 

representing only about 2% of stations 

nationwide.56 There were about 14 

million FFVs in the fleet in 2014, 

representing about 6% of all light-duty 

cars and trucks. However, with only 

about 2% of retail stations offering E85, 

only a minority of those FFVs had an 

E85 refueling station nearby. The 

relative pricing of E15 and E85 

compared to E10 at the retail level also 

likely played a role in sales of these 

higher level ethanol blends falling far 

below the available consumption 

capacity; while some retailers passed 

savings associated with high ethanol 

RIN value along to consumers, 

increasing demand for higher level 

ethanol blends, this was not typical 

across the nationwide market.57

Since 2013, the number of FFVs in the 

fleet and the number of retail stations 

offering E15 and E85 have grown, and 

we believe that this growth has been 

influenced in part by the RFS program. 

However, this growth has been very 

modest. Similarly, growth in the ability 

of the market to supply advanced 

biofuel other than cellulosic biofuel and 

BBD has also been modest. Current 

indications are that growth in all of 

these areas will continue, and the 

capability exists for growth to 

accelerate. However, growth is very 

unlikely to reach a level that would 

enable the statutory volume targets to be 

met in the near term. As a result, we 

believe that there will continue to be 

constraints on the total volume of 

renewable fuel that can be consumed in 

2015 and 2016. 

C. Proposed Volume Requirements 

The purpose of the RFS program is to 

ensure that renewable fuels are 

increasingly used to replace or reduce 

the use of fossil-fuel based 

transportation fuel. Ethanol is currently 

the most widely used renewable fuel for 

this purpose, with biodiesel being the 

second most common renewable fuel 

and other fuels making up a 

significantly smaller portion of the pool. 

For non-ethanol renewable fuels, the 

primary supply constraint at present is 

the projected shortfall in domestic 

production or importation of qualifying 

volumes. For ethanol blends, there are 

both legal and practical constraints on 

the amount of ethanol that can be 

supplied to the vehicles that can use it, 

notwithstanding the considerable 

volumes that can be produced and/or 

imported. Gasoline-powered vehicles 

and engines have for many years been 

designed and warranted to use gasoline 

with ethanol up to 10%, and only 

blends up to 10% ethanol have 

historically been legal for use. There are, 

however, two other avenues through 

which gasoline with higher 

concentrations of ethanol can be used. 

In 2010 and 2011, EPA granted partial 

waivers that together allow 2001 and 

later model year light-duty motor 

vehicles to use gasoline containing up to 

15% ethanol.58 While such fuels are 

legal, retail service stations have been 

slow to offer them. In addition, 

manufacturers have been increasingly 

warranting their new vehicles to operate 

on E15 and have for some time also 

been designing and marketing FFVs 

capable of operating on denatured 

ethanol concentrations as high as 85%. 

These vehicles represent about 7% of 

the in-use fleet in 2015. However, like 

the use of E15 in 2001 and later model 

year vehicles, use of E85 in FFVs has 

been limited in part by the relatively 

small number of retail stations offering 

it. 

While there are constraints on 

expansion of renewable fuel use, 

markets have a demonstrated ability to 

overcome constraints with the 

appropriate policy drivers in place, as 

discussed in Section II.B.2 above. We 

believe that the RFS program can drive 

renewable fuel use, and that it is 

appropriate to consider the potential of 

the market to respond to the standards 

we set when we assess the amount of 

renewable fuel consumption that can be 

achieved. Thus, we are proposing 

volume requirements for advanced 

biofuel and total renewable fuel that 

take into account both the constraints 

on supply and the ability of the RFS 

program to drive consumption. 

1. 2014 

Since 2014 has passed, we are 

proposing to base the applicable volume 

requirements for that year on the 

number of RINs supplied in 2014 that 

are expected to be available for use in 

complying with the standards. These 

RINs would include those that were 

generated for renewable fuel produced 

or imported in 2014 as recorded in the 

EPA-Moderated Transaction System 

(EMTS), minus any RINs that have 

already been retired for non-compliance 

reasons or would be expected to be 

retired to cover exports of renewable 

fuels.59 RINs that have already been 

retired for non-compliance purposes 

include those retired to correct for 

invalidly generated RINs, volumes for 

renewable fuel that was spilled after 

RIN generation, etc. These RINs are 

recorded in EMTS on an ongoing basis. 

However, the total number of RINs that 

would be expected to be retired to cover 

exports of renewable fuel in 2014 will 

only be recorded in EMTS after the 

compliance demonstration deadline for 

2014 has passed. Since the compliance 

deadline for all 2014 RIN exports has 

not yet passed, we are proposing to 

estimate likely RIN retirements for 

renewable exports using renewable fuel 

export information from EIA.60 If RINs 

retired for exports are recorded in EMTS 

prior to issuance of the final rule, we 

will use EMTS data instead of EIA data 

in determining supply for 2014 in the 

final rule. 

Actual supply in 2014 is shown in 

Table II.C.1–1 below. Further details are 

provided in a memorandum to the 

docket.61 Since EIA does not distinguish 

exports by D code, we assumed based 

on past practice that all ethanol exports 

represent D6 ethanol, and all biodiesel 

exports represent D4 BBD. We expect 


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62Based on import data from EMTS. 

63According to EIA’s Short-Term Energy Outlook 

(May 2015), pool-wide ethanol content was about 

9.75% in 2013 and 9.85% in 2014. 

that any errors introduced by this 

assumption will be very small. 

TABLE II.C.1–1—2014 ACTUAL SUPPLY

[Million RINs] 

D code Domestic 

production Imports Exports Net supply a

3 & 7 ................................................................................................................ 33 0 0 33 

4 ....................................................................................................................... 2,131 496 124 2,502 

5 ....................................................................................................................... 79 64 0 143 

6 ....................................................................................................................... 13,759 336 846 13,250 

All advanced biofuel (D3+D4+D5+D7) ............................................................ 2,243 560 124 2,679 

All Renewable fuel (D3+D4+D5+D6+D7) ........................................................ 16,002 896 970 15,929 

aTotals may not add up due to rounding. 

Based on these volumes, we are 

proposing the applicable volume 

requirements for advanced biofuel and 

total renewable fuel for 2014, as shown 

in Table II.C.1–2 below. Discussion of 

the proposed cellulosic biofuel and BBD 

volume requirements for 2014 can be 

found in Sections IV.C and III.C, 

respectively. 

TABLE II.C.1–2—PROPOSED VOLUME

REQUIREMENTS FOR 2014 

[Billion gallons] 

Advanced biofuel .............................. 2.68 

Renewable fuel ................................. 15.93 

2. 2015 

Despite the fact that this proposal is 

being released well into 2015, we 

believe that the market can achieve 

growth this year in comparison to the 

volumes that were supplied in 2014 

(though the rate of growth will not be as 

high as compared to a scenario under 

which the market is given the full lead 

time envisioned by the statute). To this 

end, we are proposing that the volume 

requirement for advanced biofuel in 

2015 be 2.90 billion gallons. The market 

has already demonstrated that this level 

is achievable, having reached 2.92 

billion gallons in 2013. Nevertheless, it 

would be a significant increase from 

actual supply in 2014 of 2.68 billion 

gallons and would recognize the lower 

volumes already supplied to date in 

2015. The primary reason that 2014 

advanced biofuel volumes were below 

2013 volumes is that imports of 

sugarcane ethanol were 435 million 

gallons in 2013 but only 64 million 

gallons in 2014.62 If this reduction had 

not occurred in 2014, total advanced 

biofuel volumes could have been above 

3.00 billion gallons. Therefore, we 

believe that 2.90 billion gallons of 

advanced biofuel is within reach of the 

market in 2015, despite late issuance of 

this proposal. While it would require 

the market to supply more advanced 

biofuel in 2015 than was actually 

supplied in 2014, supplies that increase 

annually is exactly what Congress 

expected the RFS program to compel. 

Indeed, an examination of the volumes 

of advanced biofuel set forth in the 

Clean Air Act shows that Congress 

intended that the rate of growth 

accelerate every single year between 

2009 and 2015, though cellulosic 

biofuel represents the majority of this 

growth. 

A 2015 volume requirement of 2.90 

billion gallons for advanced biofuel 

would be a substantial reduction from 

the statutory volume target of 5.50 

billion gallons. As discussed in Section 

II.A.4, we believe that a reduction from 

the statutory volumes is necessary given 

the limitations on production and 

import capabilities and constraints 

imposed by the ability of vehicles and 

engines to use renewable fuels, 

particularly ethanol. Growth in 

advanced biofuel supply from 2014 to 

2015 would be about 220 million 

gallons, substantially less than the 

growth in the statutory volume target of 

1,750 million gallons. However, growth 

of 220 million gallons from 2014 to 2015 

would require the market to respond to 

the standard we set by supplying more 

advanced biofuel than would be 

expected absent the RFS program, and 

to do so in substantially less than a full 

calendar year. Indeed without the RFS 

program, actual supply in 2015 may be 

no different than it was in 2014. 

Nevertheless, we believe that 2.90 

billion gallons of advanced biofuel is 

possible given the potential for higher 

volumes of domestic and imported 

advanced biofuels, including biodiesel 

and sugarcane ethanol, among others, 

and would achieve both the intent of 

Congress to drive the market forward 

and also acknowledge the clear 

limitations on supply that exist. We 

believe that 2.90 billion gallons 

represents the maximum amount of 

advanced biofuel that can be supplied 

in 2015. 

Similarly, for total renewable fuel, we 

are proposing a reduction in the 2015 

statutory volume target of 20.50 billion 

gallons to 16.30 billion gallons. While 

the statutory volume target for total 

renewable fuel cannot be achieved in 

2015 as discussed in Section II.A.4, we 

believe that some growth can be 

expected in 2015 as the annual volume 

requirement we set in the RFS program 

drives expansion in production and 

import capabilities and infrastructure, 

and incentivizes more favorable pricing 

of renewable fuels in the marketplace. 

Much of the increase from 2014 of about 

370 million gallons would result from 

the increase in the advanced biofuel 

standard of 2.90 billion gallons 

discussed above, with the remainder 

resulting from growth in the use of 

conventional renewable fuel such as 

corn ethanol. We believe that the market 

has already demonstrated that this 

increment of growth is possible. For 

instance, growth in total renewable fuel 

in 2014 was 390 million gallons, and in 

2013 it was even higher, despite the fact 

that in both years the gasoline pool was 

essentially saturated with ethanol.63

Thus, growth of 370 million gallons is 

within reach of a responsive market 

even though 2015 is partially over. 

We request comment on our proposal 

for 2.90 billion gallons of advanced 

biofuel and 16.30 billion gallons of total 

renewable fuel for 2015. Specifically, 

we request comment on whether these 

proposed volumes appropriately reflect 

constraints on supply resulting from the 

E10 blendwall and limitations in 

production and import capabilities, as 

well as the ability of the market to 

respond to the standards we set in the 

time available. Since we recognize that 

these proposed volumes represent our 


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proposed judgment as to the maximum 

amount of renewable fuel that can be 

supplied in 2015, and commenters may 

have information that supports a 

different assessment, we request 

comment on whether higher or lower 

volume requirements for advanced 

biofuel and total renewable fuel for 2015 

would be more appropriate. For 

example, some commenters may view 

the market as unable to overcome 

barriers such as significant availability 

of E85 to consumers in the 2015 

timeframe or significantly higher 

volumes of BBD than were supplied in 

2014, and would therefore suggest 

applicable volumes for 2015 closer to 

what we are proposing for 2014. Other 

commenters may be more optimistic 

about the ability of the market to 

respond to this NPRM and the final rule 

in the time period remaining in 2015, 

and may suggest that once we have 

exercised our authority to waive 

volumes of advanced biofuel and total 

renewable fuel under the cellulosic 

waiver authority, additional volume 

waivers under the general waiver 

authority for total renewable fuel for 

2015 are unnecessary. Finally, while we 

believe that growth in advanced biofuel 

should be a priority in light of the 

lifecycle greenhouse gas emissions 

reductions goals of the statute, and have 

reflected this view in our proposed 

volume requirements, we also request 

comment on whether a different relative 

growth in advanced biofuel and 

conventional renewable fuel would be 

appropriate. 

3. 2016 

We intend to finalize the volume 

requirements for 2016 by November 30 

of this year, in accordance with the 

schedule set forth in the statute. As a 

result, obligated parties and other 

stakeholders in the marketplace will 

have the full compliance year to 

respond to the standards that we set for 

2016, unlike for 2015 when they will 

only have part of the year to respond to 

the standards. We believe, therefore, 

that the supply of renewable fuels to 

vehicles can grow more dramatically in 

2016 than in 2015. Moreover, as for the 

2015 proposal, we believe that this 

growth should emphasize advanced 

biofuels, as Congress envisioned that all 

renewable fuel growth after 2014 would 

arise from growth in advanced biofuel 

as opposed to conventional fuels. 

Advanced biofuels are required to have 

substantially greater GHG benefits than 

conventional renewable fuel. As a 

program designed not only to increase 

the nation’s energy security position but 

also contribute to efforts to reduce 

impacts of climate change, we believe 

that a focus on growth in advanced 

biofuel is appropriate. However, we also 

acknowledge that the volume of nonadvanced biofuel production and use 

that has been achieved to date falls short 

of the volumes that Congress 

envisioned. Therefore we believe it is 

appropriate to provide for the continued 

growth of conventional renewable fuels 

at this time as well. 

We are proposing that the advanced 

biofuel volume requirement would grow 

by 500 million gallons in 2016, as 

compared to 2015, while the remainder 

(the non-advanced portion) of the total 

renewable fuel requirement would grow 

by 600 million gallons in the same 

timeframe. As a result, the 2016 

advanced biofuel and total renewable 

fuel requirements would be 3.40 billion 

gallons and 17.40 billion gallons, 

respectively. The corresponding amount 

of conventional renewable fuel that 

would be needed would be 14.0 billion 

gallons. These proposed volumes for 

both advanced biofuel and total 

renewable fuel represent substantial 

reductions from the volumes specified 

in the statute for 2016. While we do 

expect the market to respond to the 

standards we set to drive changes in 

production and consumption 

infrastructure as well as more favorable 

relative pricing, we do not have 

confidence that those changes could 

occur fast enough to attain volumes 

larger than we are proposing for 2016. 

While the reductions in the statutory 

volumes that we are proposing are 

substantial, the volume requirements 

that we are proposing for 2016 would 

nevertheless be significantly larger than 

any previous volume requirements. The 

market would need to respond by 

increasing domestic production and/or 

imports of renewable fuel, by 

significantly expanding the 

infrastructure for distributing and 

consuming that renewable fuel, and by 

improving the relative pricing of 

renewable fuels and conventional 

transportation fuels at the retail level to 

ensure that they are attractive to 

consumers. As described more fully in 

the next section, we believe that the 

market has the capability of doing this 

in 2016 and thus reaching the volumes 

that we are proposing. 

We request comment on our proposal 

for 3.40 billion gallons of advanced 

biofuel and 17.40 billion gallons of total 

renewable fuel for 2016; in particular 

we request comment on whether these 

proposed 2016 volumes appropriately 

reflect constraints on supply resulting 

from the E10 blendwall and limitations 

in production and import capabilities, 

as well as the ability of the market to 

respond to the standards we set in the 

time available. Our intent is to set 

volumes at the maximum level that in 

our judgment can be supplied to 

consumers, and we request comment on 

whether higher or lower volume 

requirements for advanced biofuel and 

total renewable fuel for 2016 would be 

more appropriate. As for 2015, we 

request comment on whether volumes 

closer to those we are proposing for 

2014 would be more appropriate for 

2016, or alternatively whether it would 

be appropriate to only waive volumes of 

advanced biofuel and total renewable 

fuel under the cellulosic waiver 

authority for 2016 without waiving 

volumes of advanced biofuel or total 

renewable fuel under the general waiver 

authority. Finally, while we believe that 

growth in advanced biofuel should be a 

priority and have reflected this view in 

our proposed volume requirements, we 

also request comment on whether a 

different relative growth in advanced 

biofuel and conventional renewable fuel 

would be appropriate. 

D. Market Response to Proposed 

Volume Requirements for 2016 

In recognition of the fact that the 

various constraints on supply that exist 

today were not as significant in years 

past, the volumes of advanced biofuel 

and total renewable fuel that we are 

proposing for 2016 would require 

increases from 2014 levels that, while 

substantial, are less than the increases 

that actually occurred in 2013. 

Moreover, as shown in Figures II.D–1, 

II.D–2, and II.D–3, the volume 

requirements in 2015 and 2016 would 

follow an upward trend consistent with 

that from 2012–2014, extending the 

market activities that produced 

increases in past years to the near 

future. 


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64As described in Section II.C.2, 2014 advanded 

biofuel bolumes were below 2013 volumes 

primarily because imports of sugarcane ethanol 

were 435 million gallons in 2013 but only 64 

million gallons in 2014. BBD volumes were slightly 

higher in 2014 than they were in 2013. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALSEP10JN15.003</GPH>

4,000 

3,500 

3,000 

2,500 

2,000 

1,500 

19,000 

18,000 

17,000 

16,000 

15,000 

14,000 

13,000 

12,000 

Figure II.D-1 

Proposed Growth in Advanced Biofuel 64 

Actual 

--------~'-------

r ' 

2012 2013 2014 

Figure II.D-2 

~ 

Proposed 

2015 2016 

Proposed Growth in Total Renewable Fuel 

~ 

Proposed 

Actual 

r --------~--------' 

2012 2013 2014 2015 2016 
Federal Register / Vol. 80, No. 111 / Wednesday, June 10, 2015 / Proposed Rules 33125 

We believe the required volumes 

being proposed for advanced biofuel 

and total renewable fuel for 2015 and 

2016 reflect the maximum volumes that 

can reasonably be expected to be 

produced and consumed for those years. 

While we acknowledge that there is 

considerable judgment involved in 

identifying the appropriate volumes, we 

note that each increment is increasingly 

difficult for the market to accommodate. 

For instance, the use of ethanol in 

gasoline increased dramatically between 

2000 and 2009, but by 2010 nearly all 

gasoline contained ethanol. Additional 

volumes of ethanol use in 2010 and 

thereafter increased much more slowly 

as the market approached the E10 

blendwall. 


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65Notably, by 2015 no more than 15 billion 

gallons of non-advanced biofuel may be used for 

compliance with RFS standards. The statute 

requires that advanced biofuel account for all the 

growth in renewable fuels used to comply with RFS 

standards beyond 2015. 66EIA’s Annual Energy Outlook 2007: http://

www.eia.gov/forecasts/archive/aeo07/pdf/

0383(2007).pdf. 67EIA’s May 2015 Short-Term Energy Outlook 

(STEO). 

68 ‘‘Estimating E0 Volume Sold in the U.S. at 

marinas’’, memorandum from Lester Wyborny to 

EPA docket EPA–HQ–OAR–2015–0111 

69 ‘‘Projection of potential E15 consumption and 

its impacts on total ethanol consumption’’, 

memorandum from David Korotney to EPA Air 

Docket EPA–HQ–OAR–2015–0111. 

This trend suggests that increases in 

renewable fuel use after 2014 will 

require more dramatic efforts than in the 

past. Implementation of the RFS 

program to date has led to ethanol use 

that is essentially at the E10 blendwall 

today. Any further growth in ethanol 

volumes must entail the use of higherethanol blends such as E15 and E85. As 

the volume requirements we are 

proposing for 2016 represent significant 

increases from 2014, we believe it 

would be unreasonable to expect the 

market to supply more than the 

proposed volumes. 

In order to demonstrate that the 

volume requirements that we are 

proposing are achievable, we 

investigated a number of scenarios 

involving different types and sources of 

renewable fuel. Each of these scenarios 

differs in terms of the volumes of higher 

ethanol blends that would be supplied 

and the relative volumes of such fuels 

as BBD, imported sugarcane ethanol, 

corn-ethanol, renewable diesel, and 

other non-ethanol renewable fuel. While 

we cannot predict precisely how the 

market would respond to the standards 

we are proposing, the fact that at least 

some of the scenarios fall within the 

reasonably expected capabilities of the 

market demonstrates that the volume 

requirements we are proposing are 

achievable. 

Section II.D.1 below describes the E10 

blendwall, while Section II.D.2 uses 

estimates of ethanol volumes associated 

with the E10 blendwall as the basis for 

a number of volume scenarios that 

include possible volumes of E85 use 

and the associated need for other 

renewable fuels to meet the proposed 

volume requirements. While we have 

focused this discussion on our proposal 

for volumes for 2016, a similar pattern 

would exist with respect to our proposal 

for 2015 volumes. 

1. E10 Blendwall 

In 2007 when Congress enacted the 

Energy Independence and Security Act 

with provisions for the current RFS 

program, the gasoline pool was 

composed of about half E10 and half E0. 

Today it is almost entirely E10. While 

the E0 pool has been shrinking, the 

pools of E10, E15, and higher level 

ethanol blends up to E85 have been 

increasing. In the context of determining 

the total volume of ethanol that can be 

supplied to vehicles in 2016, all of these 

gasoline-ethanol blends could 

potentially play a role. 

For 2016, the portion of the statutory 

applicable volume for total renewable 

fuel that may be satisfied with nonadvanced biofuel (e.g., conventional 

renewable fuel, which is primarily 

ethanol) is 15.0 billion, and this amount 

is 67% of the total renewable fuel 

volume target of 22.25 billion gallons 

specified by the statute for 2016.65

However, the ability of the market to use 

ethanol in 2016 is constrained by the 

E10 blendwall, the volume of ethanol 

that could be used if all gasoline 

contained 10% ethanol and there were 

no higher level ethanol blends. The 

amount of ethanol associated with the 

E10 blendwall is driven by the total 

demand for gasoline, and thus ethanol 

consumption will tend to increase if 

gasoline consumption increases and 

ethanol consumption will tend to 

decrease if gasoline consumption 

decreases. However, gasoline 

consumption is in fact declining. Prior 

to EISA’s passage, EIA in its AEO 2007 

projected that U.S. gasoline 

consumption would rise to about 159 

billion gallons in 2016.66 Instead, 

gasoline consumption has declined 

considerably, and EIA now predicts that 

approximately 137 billion gallons of 

gasoline will be consumed in 2016.67 If 

all of the gasoline currently projected to 

be consumed contained 10% ethanol, a 

total of 13.7 billion gallons of ethanol 

would be used. For the RFS program, 

the decline in gasoline consumption has 

meant that the E10 blendwall has 

become constraining sooner and at a 

lower overall volume of ethanol than 

was expected in 2007. The trend of 

declining gasoline consumption is 

projected to continue for a number of 

reasons, including the increasingly 

stringent GHG and fuel economy 

standards set by EPA and NHTSA for 

on-road vehicles. 

In the face of declining gasoline 

consumption, using greater volumes of 

ethanol beyond the E10 blendwall is a 

function of several factors, some legal, 

and some market-driven. The ability to 

go beyond the E10 blendwall is a 

function of actions taken by various fuel 

market participants, including obligated 

parties, renewable fuel producers, 

distributors and marketers, gasoline and 

diesel retailers, and consumers. In this 

regard, the market has significant 

potential flexibility and opportunities, 

and we believe that it can respond to the 

standards we set to drive the use of 

higher ethanol blends, the E10 

blendwall notwithstanding. 

Another constraint on the volume of 

ethanol that can be consumed is the 

demand for E0. While there will 

undoubtedly be some volumes of E0 in 

2016, we expect such volumes to be 

lower than they were in the past as the 

market strives to expand consumption 

of ethanol under the influence of the 

RFS program. The primary context in 

which E0 might continue to be used is 

in recreational marine engines or other 

small nonroad engines. As described in 

a memorandum to the docket, we expect 

that the use of E0 rather than E10 would 

only reduce the total volume of ethanol 

that can be consumed by about 13 

million gallons out of the 13.69 billion 

gallons we estimated above.68 We have 

recently been made aware of E0 being 

marketed in some locations, such as 

Florida where recreational marine is a 

significant market, and in parts of the 

Midwest such as Iowa where concerns 

over ethanol’s impact on other small 

engines may be at play. Nevertheless, 

we anticipate such E0 marketing to 

remain fairly limited given the widening 

use of ethanol overall. As a result, we 

do not anticipate the volume of E0 

having a significant impact on ethanol 

consumption in 2016, particularly in 

light of the offsetting effect of E15 

volumes as described below. Therefore, 

we have omitted from the scenarios 

described below the small expected 

impact of E0 use on total ethanol 

consumption. 

Efforts to increase the use of ethanol 

beyond the blendwall is primarily a 

function of the volume of E85 that is 

consumed, since volumes of E15 are 

likely to continue to be small in 2016. 

Over the last several years, EPA has 

taken a series of regulatory steps to 

enable E15 to be sold in the U.S. In 2010 

and 2011, EPA issued partial waivers to 

enable use of E15 in model year 2001 

and newer motor vehicles, and in June 

of 2011, EPA finalized regulations to 

prevent misfueling of vehicles, engines, 

and equipment not covered by the 

partial waiver decisions. However, 

growth in the number of retail stations 

offering E15 has been slow—currently 

there are only about 100 stations 

offering it. Even if this number grows 

more quickly in 2015 and 2016 than it 

did previously, such increases would 

probably not increase total ethanol 

consumption by more than 5–10 million 

gallons in comparison to the use of 

ethanol in E10.69 In the context of the 


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70Actual imports of conventional non-ethanol 

renewable fuels in 2014 were 53 million gallons of 

biodiesel and 151 million gallons of renewable 

diesel. They have been represented here in 

biodiesel-equivalents for simplicity. 

offsetting effect of E0 volumes on 

ethanol use that is described above, 

therefore, we have omitted this small 

impact on total ethanol consumption 

from the scenarios described below. 

However, in discussing the volume of 

E85 that might need to be consumed to 

meet the volume requirements we are 

proposing today, we acknowledge that 

there may also be some E15. 

We have assumed that E10 contains 

10.0% denatured ethanol. This is 

consistent with survey data collected by 

the Alliance of Automobile 

Manufacturers—indicating that the 

average ethanol content of all gasoline 

containing at least 5% ethanol is about 

9.74%. This estimate is based on the use 

of ASTM International (ASTM) test 

method D–5599, which measures only 

the alcohol portion of the gasoline, not 

any denaturant that would have been 

included with the ethanol before it was 

blended into gasoline. Since the 

denaturant portion of ethanol is at least 

2%, ethanol that is blended into 

gasoline contains no more than 98% 

ethanol. When blended into gasoline, 

therefore, the E98 would result in a 

gasoline-ethanol blend containing no 

more than 9.8% pure ethanol, or 10.0% 

denatured ethanol. Since all RFS 

ethanol volumes and RINs are also 

calculated on a denatured ethanol basis, 

it is thus appropriate to assume 10.0 

percent denatured ethanol. Similarly, all 

references to ‘‘ethanol’’ in this NPRM 

mean denatured ethanol. 

2. Volume Scenarios 

The transportation fuel market is 

dynamic and complex, and the RFS 

program is only one of many factors that 

determine the relative types and 

amounts of renewable fuel that will be 

used. Thus, while we set the applicable 

volume requirements for advanced 

biofuel and total renewable fuel, we 

cannot precisely predict how the market 

will choose to meet those requirements. 

We can, however, delineate a range of 

possibilities, and doing so provides a 

means for judging whether the proposed 

volume requirements are attainable. 

For our proposed 2016 total 

renewable fuel volume requirement of 

17.40 billion gallons, there would be 

about 0.84 billion ethanol-equivalent 

gallons needed beyond that supplied by 

E10, the proposed BBD volume 

requirement of 1.8 billion actual gallons 

(equivalent to 2.7 billion D4 RINs as 

described in Section III.D.4), and that 

portion of the cellulosic biofuel volume 

which we would expect to be derived 

from non-ethanol biofuel (see Section 

IV.E). 

TABLE II.D.2–1—BREAKDOWN OF RENEWABLE FUEL USE IN 2016 BASED

ON PROPOSED VOLUMES

[Billion ethanol-equivalent gallons] 

Total renewable fuel ....................... 17.40 

Ethanol consumed as E10 a ........... ¥13.69 

Non-ethanol cellulosic biofuel ......... ¥0.17 

Biomass-based diesel b .................. ¥2.70 

Additional renewable fuel that must 

be used ....................................... 0.84 

a Includes all sources of ethanol (cellulosic, 

advanced, and conventional) b Represents 1.80 billion physical gallons. 

The E10 blendwall and limitations in 

production capabilities for non-ethanol 

biofuels are the primary factors that 

constrain renewable fuel supply. Other 

factors include the relative pricing of 

renewable fuels and conventional 

(fossil-based) fuels, engine warranty 

limitations on the use of biodiesel for 

the current in-use fleet, and the need for 

distribution system improvements. All 

of these factors could play a role in 

determining how the market chooses to 

supply the additional 0.84 billion 

gallons needed as shown in Table 

II.D.2–1. The options available to the 

market to fulfill the need for 0.84 billion 

gallons of renewable fuel include the 

following: 

• Increase the production and use of 

BBD above the proposed standard of 

1.80 billion gallons 

• Increase import and use of 

sugarcane ethanol and/or domestic 

production of corn-ethanol, which 

would result in a corresponding 

increase in E85 

• Increase production and/or imports 

of conventional (D6) biodiesel and 

renewable diesel 

• Increase the production of other nonethanol advanced biofuels, such as 

heating oil, jet fuel, naphtha, butanol, 

and renewable fuels coprocessed with 

petroleum 

In determining the amounts of each type 

of renewable fuel, the market would 

also need to satisfy the proposed 

advanced biofuel standard of 3.40 

billion gallons. 

To illustrate the possible outcomes, 

we evaluated a number of scenarios 

with varying levels of E85, imported 

sugarcane ethanol, advanced biodiesel 

and other non-ethanol advanced 

biofuels, and imported conventional 

biodiesel (likely to be made from palm 

oil). In doing so we sought to capture 

the range of possibilities for each 

individual source. For imported 

conventional biodiesel we examined 

volumes up to and slightly higher than 

the level that was actually imported in 

2014—225 million gallons.70 The range 

of other non-ethanol advanced biofuels 

is based on the range of volumes 

achieved over the last several years. 

Each of the rows in Table II.D.2–2 

represent a scenario in which the 

proposed total renewable fuel and 

advanced biofuel volume requirements 

would be satisfied. 

TABLE II.D.2–2—VOLUME SCENARIOS ILLUSTRATING POSSIBLE COMPLIANCE WITH 3.40 BILL GAL ADVANCED BIOFUEL

AND 17.40 BILL GAL TOTAL RENEWABLE FUEL

[Million gallons] a b

E85 Total ethanol c Biomass-based 

diesel (D4) d

Sugarcane ethanol 

(D5) 

Other non-ethanol 

advanced (D5) 

Conventional 

biodiesel (D6) 

100 ............................................... 13,760 1,997 102 100 250 

100 ............................................... 13,760 2,030 102 50 250 

100 ............................................... 13,760 2,063 102 0 250 

100 ............................................... 13,760 2,131 0 0 182 

200 ............................................... 13,826 1,952 168 100 250 

200 ............................................... 13,826 1,986 168 50 250 


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71According to AEO2015, Table 42, total vehicle 

miles travelled by FFVs in 2016 will be about 

7.95% of all light-duty gasoline-powered vehicles, 

equivalent to about 10.9 bill gal of E10 or 13.9 bill 

gal of E85. 

72A complete list of biodiesel plants and their 

capacities as of 2–6–13 has been placed in the 

docket. We are not aware of significant changes to 

the industry profile since this list was compiled. 

73 1.46 bill gal represents total domestic 

production of both D4 biodiesel and renewable 

diesel. 

74USDA Economic Research Service, Oil Crops 

Yearbook, Table 5, ‘‘Soybean oil: Supply, 

disappearance, and price’’, updated 3/30/2015. 

Assumes 7.68 lb/gal. 

75Render Magazine, April 2015. Table 2. 

Assumes 7.68 lb/gal. 

76 ‘‘OEM Support,’’ fact sheet from National 

Biodiesel Board, August 2014. 

TABLE II.D.2–2—VOLUME SCENARIOS ILLUSTRATING POSSIBLE COMPLIANCE WITH 3.40 BILL GAL ADVANCED BIOFUEL

AND 17.40 BILL GAL TOTAL RENEWABLE FUEL—Continued 

[Million gallons] a b

E85 Total ethanol c Biomass-based 

diesel (D4) d

Sugarcane ethanol 

(D5) 

Other non-ethanol 

advanced (D5) 

Conventional 

biodiesel (D6) 

200 ............................................... 13,826 2,019 168 0 250 

200 ............................................... 13,826 2,065 0 100 138 

400 ............................................... 13,959 1,898 301 50 250 

400 ............................................... 13,959 1,989 113 100 125 

400 ............................................... 13,959 2,056 113 0 125 

400 ............................................... 13,959 2,098 0 50 50 

600 ............................................... 14,091 1,800 433 64 250 

600 ............................................... 14,091 1,901 245 100 125 

600 ............................................... 14,091 2,026 58 100 0 

600 ............................................... 14,091 2,093 58 0 0 

aAssumes that the cellulosic biofuel proposed standard for 2016 is 206 mill gal, of which 33 mill gal is assumed to be ethanol for the purposes 

of these scenarios and the remainder is primarily biogas. bBiomass-based diesel and conventional biodiesel are given as biodiesel-equivalent volumes. Others are given as ethanol-equivalent volumes. 

Biodiesel-equivalent volumes can be converted to ethanol-equivalent volumes by multiplying by 1.5. cFor the range of total ethanol shown in this table, the nationwide poolwide average ethanol content would range from 10.05% to 10.28%. The 

majority of gasoline will contain 10% ethanol, and some gasoline will contain higher levels of ethanol such as E15 or E85. d Includes supply from both domestic producers as well as imports. 

The scenarios in the table above are 

clearly not the only ways that the 

market could choose to meet the total 

renewable fuel and advanced biofuel 

volume requirements that we are 

proposing today, but they are 

illustrative of many ways that it could 

play out. While we are not in a position 

to predict how the market would 

respond to the volume requirements we 

are proposing today, we believe that the 

range of possibilities for E85, BBD, and 

other sources is a clear indication that 

the standards we are proposing are 

achievable. 

With regard to E85, according to EIA 

there will be about 16 million FFVs in 

the in-use fleet in 2016 with a total 

consumption capacity of about 14 

billion gallons of E85.71 While only 

about 2% of retail stations nationwide 

currently offer E85, the fraction of FFVs 

with access to E85 is higher than 2% 

since the vast majority of vehicles are 

within reasonable range of more than 

one retail station on typical trips. If only 

5% of all FFVs had a retail station 

nearby that offered E85, they could 

consume 800 million gallons of E85 in 

2016 under favorable consumer pricing 

conditions. We recognize that the 

market would need to compel E85 

prices to be increasingly favorable 

relative to E10 in order to provide the 

incentive for FFV owners to purchase 

E85, but this is exactly how a fully 

functional market will react to standards 

designed to drive growth in renewable 

fuel as Congress intended. Thus we 

believe it is possible for the market to 

reach volumes perhaps as high as 600 

million gallons under favorable pricing 

conditions (i.e., where consumers 

believe they are obtaining an economic 

advantage through purchase of E85). 

We also believe that it is possible for 

the market to exceed 1.8 billion gallons 

of BBD in 2016. As of 2013, the total 

production capacity for all registered 

and unregistered biodiesel facilities was 

about 3.6 billion gallons,72 substantially 

more than the actual domestic 

production in 2014 of 1.46 billion 

gallons.73 More than 2.7 billion gallons 

of this production capacity has already 

been registered under the RFS program. 

Moreover, the U.S. imported several 

hundred million gallons of biodiesel 

and renewable diesel in 2014. The 

combined volumes of soybean oil, corn 

oil, and waste oils produced annually is 

far more than would be needed to 

produce 2.1 billion gallons of biodiesel. 

It is possible that the market could 

divert additional feedstocks from food 

and other domestic uses or exports to 

the production of biodiesel. For 

instance, in 2014 exports of soy oil were 

250 million gallons and exports of 

rendered fats and greases was 440 

million gallons.74 75

As Table II.D.2–2 illustrates, the 

proposed standards could result in the 

consumption of as much as 2.3 billion 

gallons of D4 and D6 biodiesel and 

renewable diesel, representing an 

increase of about 600 million gallons 

over the historical high. While this 

would be a substantial increase, we 

believe that it is possible. A portion of 

this increase is likely to be renewable 

diesel which is indistinguishable from 

conventional diesel fuel and thus would 

experience no impediments related to 

cold temperatures or manufacturer 

warranties; in both 2013 and 2014, the 

market supplied about 300 million 

gallons of renewable diesel. Even if 

there were no renewable diesel, 2.3 

billion gallons of biodiesel would 

represent less than 4% of the 

nationwide pool of diesel fuel in 2016. 

Because essentially all engine 

manufacturer warranties permit up to 

5% biodiesel to be used in their engines, 

and most medium and heavy-duty 

engine manufacturers warrant the use of 

blends up to B20 in their more recent 

models,76 the use of biodiesel in 4% of 

the overall diesel pool should be 

possible from a consumption viewpoint. 

For instance, most diesel fuel could 

contain 5% biodiesel while still 

allowing some diesel fuel to contain no 

biodiesel to accommodate that used in 

northern states during the coldest 

months of the year. Also, B20 could be 

used in a number of centrally-fuelled 

fleets composed of newer engines 

without violating manufacturer 

warranties, and additional volumes of 

biodiesel could be used in heating oil. 

It is reasonable to expect that the 


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77 72 FR 23900, May 1, 2007. 

infrastructure that already exists to 

distribute and blend such fuels could be 

expanded to accommodate this 

additional volume in the time available. 

While the scenarios in Table II.D.2–2 

are intended to demonstrate the 

flexibility that the market has to 

respond to the volumes we are 

proposing, and indeed many additional 

scenarios could be generated, we do not 

believe that all scenarios are equally 

likely. Certainly some are more likely 

than others. However, we are not in a 

position to identify those that are most 

likely and we are not in a position to 

predict what will actually occur. In 

particular, those scenarios that represent 

reliance on one source without taking 

advantage of supply from other sources 

are, we believe, least likely to occur. 

The market can be expected to choose 

the lowest cost path to compliance, but 

regulated parties may also respond to 

the standards we set with investments 

in production, distribution, and 

consumption infrastructure that is 

focused on longer term growth. Such 

investments could result in the selection 

of higher cost options in the near term, 

but would enable lower costs in the 

longer term. Other activities that result 

in more favorable pricing between 

renewable fuels and fossil-based fuels 

will also play a role in determining the 

actual mix of types and amounts of 

biofuels used to meet the final 

standards, and such activities cannot be 

predicted. Because of these complexities 

in market dynamics, we do not believe 

it would be appropriate to identify a 

specific scenario from Table II.D.2–2 as 

being most representative of how the 

market will respond to the proposed 

volume requirements. 

Further, it would be inappropriate to 

construct new scenarios based on the 

highest volumes in each category that 

are shown in Table II.D.2–2 in order to 

argue for higher volume requirements 

than we have proposed. Doing so would 

presume that the specific volumes for 

each type of renewable fuel, and thus 

the underlying scenarios, are all equally 

likely or equally achievable. We have 

more confidence in the ability of the 

market to achieve 3.40 billion gallons of 

advanced biofuel through some 

combination of different types of 

renewable fuel than we have in the 

ability of the market to achieve a 

specific level of, say, BBD. Thus, for 

instance, while the highest BBD volume 

shown in Table II.D.2–2 is 2,131 million 

gallons, we are not able to say whether 

this specific level of BBD is one that the 

market could be expected to achieve in 

2016, notwithstanding our belief that 

such volumes are theoretically possible 

as described earlier. The same is true for 

the highest level of E85 shown in Table 

II.D.2–2 of 600 million gallons, or the 

highest level of sugarcane ethanol of 433 

million gallons. In addition, the 

consumption of each fuel in Table 

II.D.2–2 is not independent of the 

consumption of the other fuels in the 

table. For example, greater BBD 

production reduces the likelihood of 

large imports of palm biodiesel because 

these two fuels compete against one 

another. The probability that the upper 

limits of all sources shown in Table 

II.D.2–2 could be achieved 

simultaneously is extremely unlikely. 

The range of options available to the 

market to attain compliance with the 

proposed volume requirements provide 

us with confidence that they are 

achievable. Nevertheless, we recognize 

that to the extent that the proposed 

waivers rely on a finding of ‘‘inadequate 

domestic supply’’, our objective is to set 

the volume requirements as precisely as 

possible at the intersection between an 

‘‘inadequate supply’’ and supply that is 

adequate. Given the complexities of the 

fuels market, this is a very challenging 

task, and one that necessarily involves 

considerable judgment. Based on our 

assessment of both the current 

capabilities of the industry and the 

power of the market to respond to 

ambitious volume requirements, we 

believe that our proposed volumes are 

the best possible estimate of the 

intersection between ‘‘inadequate 

supply’’ and supply that is adequate. 

Because the standards that we are 

proposing would compel the market to 

supply higher volumes than would 

occur in the absence of an RFS program 

and indeed higher volumes than are 

currently being supplied, RIN prices are 

likely to be higher than historical levels. 

RIN price increases are an expected 

market response to an increased 

renewable fuel mandate that is pushing 

volumes beyond levels that the market 

would otherwise use. Furthermore, high 

RIN prices help to promote growth in 

renewable fuel supply. For instance, 

higher RIN prices would likely increase 

the incentive to import renewable fuels. 

Both ethanol and biodiesel/renewable 

diesel worldwide could be diverted 

from their current markets given a 

sufficiently high RIN price. High RIN 

prices can also provide the potential for 

reductions in the retail selling prices of 

E85 and E15 if distributors, blenders, 

and retailers pass the value of those 

RINs to end users. Finally, sustained 

high RIN prices create the incentives 

needed to spur investment in new 

technologies and production capacity, a 

critical need if the market is going to 

continue expanding in future years 

according to Congress’ intentions. 

Given the variability in potential 

compliance scenarios that exists, we 

believe that regulated parties have the 

ability to meet the proposed standards 

for 2016. Stakeholders have the ability 

to overcome market barriers to 

expanded use of renewable fuels, 

making the standards we are proposing 

today attainable. Potential actions that 

stakeholders can take include: 

• Working with vehicle manufacturers 

to increase the number of FFVs in the 

fleet 

• Increasing the number of retail 

stations offering E15 and E85 through 

direct installation of new equipment 

or providing grants to retail owners, 

and locating those stations offering 

E15/E85 closest to higher populations 

of vehicles than can use those fuels 

• Developing contractual mechanisms 

to ensure favorable pricing of E15 and 

E85 at retail compared to E10 to boost 

sales volumes 

• Increased production and/or imports 

of non-ethanol renewable fuels (e.g., 

greater production of drop-in biofuels) 

• Expanded co-production of nonethanol renewable fuels with 

petroleum at new and existing 

facilities 

Finally, the RFS program contains 

two other provisions that provide 

additional flexibility to obligated parties 

in the event that they choose not to 

invest in increasing the supply of 

renewable fuels. The first is the option 

to carry a deficit into 2017. This option 

would provide the industry additional 

time to increase supply. The second 

available flexibility is carryover RINs, 

discussed in more detail in Section II.F. 

E. Treatment of Carryover RINs 

Neither the statute nor EPA 

regulations specify how or whether EPA 

should consider the availability of 

carryover RINs in exercising its waiver 

authorities either in the standard-setting 

context or in response to petitions for a 

waiver during a compliance year. As 

described in the 2007 rulemaking 

establishing the RFS regulatory 

program,77 carryover RINs are intended 

to provide flexibility in the face of a 

variety of circumstances that could limit 

the availability of RINs, including 

weather-related damage to renewable 

fuel feedstocks and other circumstances 

affecting the supply of renewable fuel 

that is needed to meet the standards. In 

the 2010–2012 time period, obligated 

parties collectively surpassed the RFS 

renewable fuel blending requirements, 


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78 78 FR 49794, August 15, 2013. 

79 Monroe Energy v. EPA, 750 F.3d 909 (D.C. Cir. 

2014). 

80As previously explained in this action, the 

‘‘E10 blendwall’’ is the volume of ethanol that can 

be consumed domestically as E10. We expect that 

compliance with the total renewable fuel volume 

requirements will require more ethanol use than is 

possible through widespread use of E10. 

81The statute and EPA’s regulations provide 

another means of compliance flexibility—obligated 

parties may carry forward a compliance deficit for 

one year. But the statute and regulations also 

require that any deficit be paid back in the 

following year and that the standards applicable in 

the following year be met. Given that our proposed 

standards increase year to year, it may be 

increasingly difficult for an obligated party to both 

repay a deficit and meet higher standards in the 

same year. Thus, this provision does not replace 

carryover RINs as an important compliance tool to 

address increasingly challenging requirements and 

unforeseen circumstances. 

and were able to accumulate 2.6 billion 

carryover RINs. 

The potential role of carryover RINs 

in minimizing waivers of the statutory 

applicable volume targets was first 

addressed in the context of the rule 

establishing RFS standards for 2013. In 

the context of that rulemaking, we 

estimated that 14.5 billion gallons of 

ethanol would be needed to meet the 

total statutory total renewable fuel 

volume target of 16.55 billion gallons, 

assuming that no BBD was produced 

above the 1.28 billion gallons required 

by the BBD standard. We also 

determined that the total amount of 

ethanol the market could absorb as E10 

in 2013 was 13.1 billion gallons, leaving 

a potential gap of 1.4 billion gallons. We 

then described how BBD production in 

excess of the BBD standard, increased 

production of other non-ethanol 

renewable fuels, and use of E85 could 

contribute to the needed gallons. We 

also pointed out that about 2.6 billion 

carryover RINs would be available in 

2013, which was more than enough to 

cover the potential gap of 1.4 billion 

gallons if other approaches to 

compliance were not realized. We 

decided, therefore, that a waiver of the 

statutory applicable volume of total 

renewable fuel was not needed in 

2013.78 Our approach was challenged in 

court, and upheld in Monroe Energy v. 

EPA.79

We are not now in a position to 

confidently assess the volume of 

carryover RINs currently available, since 

obligated parties and exporters have not 

yet submitted their compliance 

demonstrations for 2013. However, 

based on the number of RINs generated 

in 2013 and available data on renewable 

fuel exports and RIN retirements in 

2013, we estimate that 800 million 

carryover RINs will need to be used for 

compliance with the 2013 RFS 

standards. This will reduce the bank of 

carryover RINs to approximately 1.8 

billion RINs. For purposes of our 

proposed volume requirements for 2014, 

2015, and 2016, we considered whether 

some specific number of carryover RINs 

below the current level of 1.8 billion 

would be sufficient for the critical 

compliance flexibility, market liquidity, 

and program buffer functions served by 

carryover RINs, such that we could 

effectively require some use of carryover 

RINs by setting applicable volume 

requirements at levels higher than could 

be achieved through actual renewable 

fuel blending and use in these years. 

We believe, however, that it would be 

prudent, and would advance the longterm objectives of the Act, not to set 

standards for 2014, 2015, and 2016 so as 

to intentionally draw down the current 

bank of carryover RINs. We believe that 

the availability of this full volume of 

carryover RINs will be important for 

both obligated parties and the RFS 

program itself in addressing significant 

future uncertainties and challenges, 

particularly since compliance with the 

proposed advanced and total renewable 

fuel standards is expected to require 

significant progress in growing and 

sustaining production of advanced 

biofuels and using ethanol in quantities 

that exceed the E10 blendwall.80

Although the issue in this proposed 

rulemaking is whether to waive 

statutory applicable volumes in the 

context of establishing new standards, 

we note that the availability of carryover 

RINs is an important factor in deciding 

whether to waive standards already in 

effect. Each year, obligated parties make 

significant efforts to comply with RFS 

requirements, and participants in the 

renewable fuels market make significant 

efforts to supply the renewable fuels 

needed for compliance. Changing those 

requirements during the compliance 

year to address unforeseen supply 

disruptions or for other reasons would 

be disruptive to businesses and 

therefore to the long-term objectives of 

the RFS program to provide incentives 

to industry to increase the production 

and use of renewable fuels. Preserving 

the current bank of carryover RINs at 

this time will reduce the risk that 

waivers may be needed after the 2014, 

2015 and 2016 standards are in place to 

address unforeseen circumstances.81

In addition, the RIN system was 

developed in part to implement the 

statutory requirement for obligated 

parties to earn ‘‘credits’’ for 

overcompliance that could be used in 

another year or sold to others. The RFS 

standards are a mandate with serious 

ramifications to obligated parties that 

fail to comply. As intended by Congress, 

carryover RINs help provide compliance 

flexibility. We appreciate that obligated 

parties make individual decisions about 

whether and how many RINs to acquire 

for their compliance management 

purposes, and that a decision by EPA to 

effectively ‘‘draw down’’ their bank of 

carryover RINs in calculating future 

volume requirements may decrease their 

compliance flexibility, increase their 

risk of noncompliance, and affect their 

incentives to build-up carryover RIN 

balances. We understand that obligated 

parties in many instances acquire RINs 

for carryover to provide just that kind of 

flexibility, and that assuming use of 

carryover RINs in setting the RFS 

standards may in the future discourage 

that kind of responsible behavior. 

Finally, we appreciate that with the 

increasing renewable fuel volume 

targets established in the Act for the 

future, combined with the projected 

decreasing use of gasoline and diesel 

fuel resulting from more stringent 

vehicle emission and mileage 

requirements, the ability of obligated 

parties to increase the bank of carryover 

RINs through additional 

overcompliance in the future will be 

much more difficult. Therefore, any 

draw-down in the bank of carryover 

RINs required through setting volume 

requirements at levels higher than can 

be achieved through actual renewable 

fuel use could not likely be reversed in 

the future. Given the importance of 

carryover RINs noted above, this 

consideration suggests that a deliberate 

draw-down of the RIN bank would not 

be prudent. 

For all of the reasons noted above, 

EPA is not proposing to set renewable 

fuel volume requirements at levels that 

would envision the draw-down in the 

bank of carryover RINs. We welcome 

comments on this analysis and thoughts 

on how EPA should consider carryover 

RINs in establishing renewable fuel 

volume requirements for 2014, 2015, 

and 2016. 

F. Impacts of Proposed Standards on 

Costs 

In the following sections we provide 

cost estimates for three illustrative 

scenarios—one, if the entire change in 

the advanced standards is met with 

soybean oil BBD; two, if the entire 

change in the advanced standards is met 

with sugarcane ethanol from Brazil; and 

three, if the entire change in the 

conventional standards (i.e., nonadvanced) is met with corn ethanol. 

While a variety of biofuels could help 

fulfill the advanced standard beyond 

soybean oil BBD and sugarcane ethanol 


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82 ‘‘Illustrative Costs Impact of the Proposed 

Annual RFS2 Standards, 2014–2017,’’ 

Memorandum from Michael Shelby to EPA Air 

Docket EPA–HQ–OAR–2015–0111. 83 77 FR 59477, September 27, 2012. 

from Brazil, these two biofuels have 

been most widely used in the past. We 

believe these scenarios provide 

illustrative costs of meeting the 

proposed standards. For this analysis, 

we estimate the per gallon costs of 

producing biodiesel, sugarcane ethanol 

and corn ethanol relative to the 

petroleum fuel they replace at the 

wholesale level, then multiply these per 

gallon costs by the applicable volumes 

established in this rule for the advanced 

and total renewable fuel categories. 

More background information on this 

section, including details of the data 

sources used and assumptions made for 

each of the scenarios, can be found in 

a memorandum submitted to the 

docket.82

A number of different scenarios could 

be considered the ‘‘baseline’’ for the 

assessment of the costs of this rule. For 

the purposes of showing illustrative 

overall costs of this rulemaking, we are 

proposing to use the preceding year’s 

standard as the baseline (e.g., the 

baseline for the 2016 advanced standard 

is the proposed applicable 2015 

advanced standard, etc.), an approach 

consistent with past practices. 

The 2014 standards were not finalized 

in 2014 so it is difficult to estimate what 

their costs may have been. Market 

participants may have anticipated a 

final 2014 standard would require 

higher levels of biofuels than the market 

would provide in the absence of the 

standard, which would contribute to the 

positive RIN prices witnessed in 2014. 

In contrast, the 2014 standards being 

proposed in this rulemaking represent 

reductions in both the advanced and 

conventional volumes compared to the 

2013 standards, suggesting a reduction 

in costs for this proposed 2014 rule 

compared to the 2013 standards. 

Finally, the 2014 standards being 

proposed in this rulemaking are based 

on actual production levels in 2014, 

suggesting that the 2014 standards we 

are proposing are what would have 

happened in the marketplace absent a 

rulemaking. Given the complexity of 

this issue, we have not attempted to 

estimate the costs of the 2014 standards. 

Therefore, we only provide illustrative 

costs for the 2015 and 2016 advanced 

biofuel standards and total renewable 

fuel standards. 

Because we are focusing on the 

wholesale level in each of the three 

scenarios, these comparisons do not 

consider taxes, retail margins, and any 

other costs or transfers that occur at or 

after the point of blending (i.e., transfers 

are payments within society and not 

additional costs). Further, we do not 

attempt to estimate potential costs 

related to infrastructure expansion with 

increased biofuel volumes. In addition, 

because more ethanol gallons must be 

consumed to go the same distance as 

gasoline and more biomass-based diesel 

must be consumed to go the same 

distance as petroleum diesel due to each 

of the biofuels’ lesser energy content, we 

consider the costs of ethanol and 

biomass-based diesel on an energy 

equivalent basis to their petroleum 

replacements (i.e., per energy equivalent 

gallon (EEG)). 

For our first scenario, we consider the 

costs of soybean-based biodiesel to meet 

the entire change in the advanced 

standards. The proposed 2014 standard 

is being set at the actual level of 

advanced biofuels produced in 2014, 

2.68 billion gallons. The total advanced 

biofuel volumes are being proposed for 

2015 at 2.90 billion gallons and 3.40 

billion gallons in 2016. Comparing the 

difference in costs between biomassbased diesel and petroleum-based 

diesel, we estimate a cost difference that 

ranges from $1.48 to $1.56/EEG in 2015 

and from $1.45 to $2.09/EEG in 2016. 

Multiplying the per gallon cost 

estimates by the volume of fuel 

displaced by the advanced standard, on 

an energy equivalent basis, results in an 

overall annual cost of $218 to $229 

million in 2015 and $483 to $697 

million in 2016. 

For our second scenario, we provide 

illustrative estimates of what the 

potential costs might be if all additional 

volumes used to meet the 2015 and 

2016 advanced biofuel standards above 

the previous year’s advanced biofuel 

standard are met with imported 

Brazilian sugarcane ethanol. Comparing 

the difference in costs between 

sugarcane ethanol and the wholesale 

gasoline price on a per gallon basis, we 

estimate cost differences that range from 

$1.04 to $2.80/EEG in 2015 and from 

$0.85 to $2.61/EEG in 2016. Taking the 

difference in per gallon costs for 

sugarcane ethanol and the wholesale 

gasoline price and multiplying that by 

the volume of petroleum displaced on 

an energy equivalent basis from the 

advanced standard results in an overall 

estimated annual cost of $228 to $615 

million for 2015 and $424 to $1,303 

million for 2016. 

For the third scenario, we assess the 

difference in cost associated with a 

change in the implied volumes available 

for conventional (i.e., non-advanced) 

biofuels for 2015 and 2016. We provide 

illustrative estimates of what the 

potential costs might be if corn ethanol 

is used to meet the entire conventional 

renewable fuel volumes. The implied 

2014 volume allowance for 

conventional renewable fuel is 13.25 

billion gallons, 13.40 billion gallons in 

2015, and 14.00 billion gallons in 2016. 

If corn ethanol is used to meet the 

difference between the implied 2014 to 

2015 and 2015 to 2016 conventional 

renewable fuel volume increases, an 

increase of 150 million gallons of corn 

ethanol would be required in 2015 and 

600 million gallons in 2016. Comparing 

the difference in costs between corn 

ethanol and the wholesale gasoline 

price, we estimate cost differences that 

range from $0.81 to $0.92/EEG in 2015 

and from $0.58 to $0.90/EEG in 2016. 

Taking the difference in per gallon costs 

between the corn ethanol and the 

wholesale gasoline price estimates and 

multiplying that by the volume of 

petroleum displaced on an energy 

equivalent basis by the conventional 

standard results in an overall estimated 

annual cost of $122 to $138 million for 

2015 and $348 to $541 million for 2016. 

An alternative way of looking at the 

illustrative costs in 2016, given the fact 

that this is a three year rule and the 

2015 standards may change, is to 

consider a volume change relative to the 

2014 proposed standard. The cost 

estimate for meeting the 2016 standard 

would range from $695 to $1,003 

million if the entire advanced standard 

were to be met with soybean-based 

diesel. The cost estimates would range 

from $610 to $1,877 million if the entire 

advanced standard were met with 

sugarcane ethanol. The cost estimate for 

meeting the entire conventional 

standard in 2016 with corn ethanol 

would range from $435 to $676 million. 

The short time frame provided for the 

annual renewable fuel rule process does 

not allow sufficient time for EPA to 

conduct a comprehensive analysis of the 

benefits of the 2015 and 2016 standards 

and the statute does not require it. 

Moreover, as discussed in the proposed 

rule establishing the 1.28 billion gallon 

requirement for BBD in 2013, the costs 

and benefits of the RFS program as a 

whole are best assessed when the 

program is fully mature in 2022.83 We 

continue to believe that this is the case, 

as the annual standard-setting process 

encourages consideration of the program 

on a piecemeal (i.e., year to year) basis, 

which may not reflect the long-term 

economic effects of the program. 

Therefore, for the purpose of this annual 

rulemaking, we have not quantified 

benefits for the 2015 and 2016 proposed 

standards. We do not have a quantified 

estimate of the GHG impacts for the 


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84CAA 211(o)(2)(B)(ii). 

85Net BBD RINs Generated and BBD RINs Retired 

for Non-Compliance Reasons information from 

EMTS. Biodiesel Export information from EIA 

(http://www.eia.gov/dnav/pet/pet_move_expc_a_

EPOORDB_EEX_mbbl_a.htm). 

86Each gallon of biodiesel generates 1.5 RINs due 

to its higher energy content per gallon than ethanol. 

Renewable diesel generates between 1.5 and 1.7 

RINs per gallon. 

single year (e.g., 2015, 2016). When the 

RFS program is fully phased in, the 

program will result in considerable 

volumes of renewable fuels that will 

reduce GHG emissions in comparison to 

the fossil fuels which they replace. EPA 

estimated greenhouse gas, energy 

security and air quality impacts and 

benefits for the 2010 Proposed RFS Rule 

for 2022. 

III. Proposed Biomass-Based Diesel 

Volumes for 2014–2017 

In this section we discuss the 

proposed biomass-based diesel (BBD) 

applicable volumes for 2014 through 

2017. It is important to note that the 

BBD volume requirement is nested 

within both the advanced biofuel and 

the total renewable fuel volume 

requirements; so that any ‘‘excess’’ BBD 

produced beyond the mandated BBD 

volume can be used to satisfy both these 

other applicable volume requirements. 

Therefore, in assessing what is the 

appropriate applicable BBD volume for 

2014–2017, it is important to consider 

not only the volume for BBD, which 

effectively guarantees a minimum 

amount that will be produced, but also 

the advanced biofuel and total 

renewable fuel volume requirements, 

which historically have played a 

significant role in determining demand 

for BBD as well. 

In proposing an applicable volume for 

2017 we are addressing the volume 

requirement but not the percent 

standards, in order to satisfy a statutory 

requirement that when EPA sets the 

applicable volumes in the absence of a 

statutory volume target, that we do so 

no later than 14 months before the first 

year for which such applicable volume 

will apply.84 Since the statute does not 

specify a BBD volume target for 2017, 

we plan to finalize the applicable 

volume by this November. Since the 

statute includes applicable volume 

targets for advanced biofuel, total 

renewable fuel and cellulosic biofuel for 

2017, we are not required to establish 

2017 applicable volumes for them at 

this time. We believe it is prudent to 

delay establishing such volume targets 

until the statutory deadline of 

November 30, 2016, to enable EPA to 

use the most up-to-date information 

prior to the start of the calendar year. 

A. Statutory Requirements 

The statute establishes applicable 

volume targets for years through 2022 

for cellulosic biofuel, advanced biofuel, 

and total renewable fuel. For BBD, 

applicable volume targets are specified 

in the statute only through 2012. For 

years after those for which applicable 

volumes are specified in the statute, 

EPA is required under CAA section 

211(o)(2)(B)(ii) to determine the 

applicable volume, in coordination with 

the Secretary of Energy and the 

Secretary of Agriculture, based on a 

review of the implementation of the 

program during calendar years for 

which the statute specifies the 

applicable volumes and an analysis of 

the following factors: 

1. The impact of the production and 

use of renewable fuels on the 

environment, including on air quality, 

climate change, conversion of wetlands, 

ecosystems, wildlife habitat, water 

quality, and water supply; 

2. The impact of renewable fuels on 

the energy security of the United States; 

3. The expected annual rate of future 

commercial production of renewable 

fuels, including advanced biofuels in 

each category (cellulosic biofuel and 

BBD); 

4. The impact of renewable fuels on 

the infrastructure of the United States, 

including deliverability of materials, 

goods, and products other than 

renewable fuel, and the sufficiency of 

infrastructure to deliver and use 

renewable fuel; 

5. The impact of the use of renewable 

fuels on the cost to consumers of 

transportation fuel and on the cost to 

transport goods; and 

6. The impact of the use of renewable 

fuels on other factors, including job 

creation, the price and supply of 

agricultural commodities, rural 

economic development, and food prices. 

The statute also specifies that the 

applicable volume for BBD cannot be 

less than the applicable volume for 

calendar year 2012, which is 1.0 billion 

gallons. The statute does not, however, 

establish any other numeric criteria, or 

provide any guidance on how the EPA 

should weigh the importance of the 

often competing factors, and the 

overarching goals of the statute when 

the EPA sets the applicable volumes in 

years after those for which the statute 

specifies applicable volumes. In the 

period 2013–2022, the statute specifies 

increasing applicable volumes of 

cellulosic biofuel, advanced biofuel, and 

total renewable fuel, but provides no 

guidance on the extent to which BBD 

volumes should grow. 

B. BBD Production and Compliance in 

Previous Years 

Due to the delayed issuance of the 

major regulatory revisions necessary to 

implement changes enacted through the 

Energy Independence and Security Act 

of 2007, EPA established a 2010 BBD 

standard that reflected volume 

requirements for both 2009 and 2010, 

and allowed RINs generated as early as 

2008 to be used for compliance with 

that standard. Given the complexity 

associated with the 2010 BBD standard, 

we begin our review of implementation 

of the program with the 2011 

compliance year. Reviewing the 

implementation of the BBD standards in 

previous years is required by the CAA, 

and also provides insight into the 

capabilities of the BBD industry to 

produce and import fuel. It also helps us 

to understand what factors, beyond the 

BBD standard, may incentivize the 

production and import of BBD. The 

number of BBD RINs generated, along 

with the number of RINs retired for 

reasons other than compliance with the 

annual BBD standards, are shown in 

Table III.B–1 below. 

TABLE III.B–1—BIOMASS-BASED RIN GENERATION AND STANDARDS IN 2011–2013 

[Million gallons] 85

BBD RINs 

generated 

Exported BBD 

(RINs) 

BBD RINs retired, non-compliance reasons 

Available BBD 

RINs 

BBD standard 

(Gallons) 

BBD standard 

(RINs) 86

2011 ................................. 1,692 110 97 1,484 800 1,200 

2012 ................................. 1,737 193 80 1,465 1,000 1,500 

2013 ................................. 2,739 295 94 2,350 1,280 1,920 


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87The biodiesel tax credit was reauthorized in 

January 2013. It applied retroactively for 2012 and 

for the remainder of 2013. It was once again 

extended in December 2014 through the end of 

2014. 

88 ‘‘Summary of data on 2013 RIN generation and 

consumption’’, memorandum from David Korotney 

to EPA Air Docket EPA–HQ–OAR–2015–0111. 

According to the U.S. Energy Information 

Administration (EIA), Annual import data for BBD 

(Biodiesel and Renewable diesel countries 

contributing to BBD imports (million gallons) were 

Argentina = 132, Aruba = 6, Australia = 1, Belgium 

= 5, Canada = 45, Finland = 36, Germany = 61, 

Indonesia = 52, Netherlands = 8, Norway = 9, South 

Korea = 20, Panama = 3, Singapore = 164, Spain = 

4, Taiwan = 1. (See http://www.eia.gov/dnav/pet/

pet_move_impcus_a2_nus_EPOORDB_im0_mbbl_

a.htm and http://www.eia.gov/dnav/pet/pet_move_

impcus_a2_nus_EPOORDO_im0_mbbl_a.htm (last 

accessed April 6, 2015). 

Note that not all of the imported volumes 

generated BBD (D4) RINs. Some of this volume may 

have generated Renewable Fuel (D6) RINs or no 

RINs at all. 

89U.S. Energy Information Administration (EIA). 

Annual export data for Biodiesel (2013). See 

http://www.eia.gov/dnav/pet/pet_move_expc_a_

EPOORDB_EEX_mbbl_a.htm (last accessed April 6, 

2015). 

90EMTS includes data on RINs retired for export, 

but the values are incomplete as of this writing 

since the 2013 compliance deadline has not yet 

passed. 

91 ‘‘Summary of data on 2014 RIN Generation and 

Consumption,’’ memorandum from David Korotney 

to EPA docket EPA–HQ–OAR–2015–0111. 

In reviewing historical BBD RIN 

generation and use we see that the 

number of RINs available for 

compliance purposes exceeded the BBD 

standard by a significant margin in 2011 

and 2013. Additional demand for 

biodiesel may have been driven by a 

number of factors, including demand to 

satisfy the advanced biofuel and total 

renewable fuels standards, the biodiesel 

tax credit, and favorable blending 

economics. In 2012 the available BBD 

RINs were slightly less than the BBD 

standard. There are many reasons this 

may have been the case, including the 

lapse of the biodiesel tax credit at the 

end of 2011.87

While total BBD volume produced 

and imported in 2013 was 1.79 billion 

gallons (2.74 billion BBD RINs), it is 

also instructive to review the data on 

volumes that were produced 

domestically, imported, exported, and 

retired for reasons other than 

compliance. 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).88 This volume was not 

entirely available for compliance 

purposes, however, since some of the 

BBD produced domestically was 

exported and some RINs had to be 

retired for purposes other than 

compliance. Based on EIA export data, 

we estimate that 0.196 billion gallons 

(0.295 billion RINs) of BBD was 

exported in 2013.89 A corresponding 

number of BBD RINs will eventually be 

retired by exporters, as required by the 

RFS regulations, and therefore are not 

available for use by refiners and 

importers in satisfying their 2013 

obligations.90 Additionally, 0.094 

billion BBD RINs were retired for 

reasons other than compliance, such as 

volume error corrections, contaminated 

or spoiled fuel, or fuel used for purposes 

other than transportation fuel, heating 

oil, or jet fuel. Based on this 

information, the actual amount of BBD 

available for compliance in 2013 totaled 

2.36 billion RINs, representing 

approximately 1.55 billion gallons of 

BBD. This is 430 million more BBD 

RINs than were required for compliance 

with the BBD standard in 2013. 

C. Applicable Volume of Biomass-Based 

Diesel for 2014 

For 2014 we are proposing to base the 

applicable volume requirements on the 

number of RINs supplied in 2014. We 

propose to define supply for 2014 as the 

number of BBD RINs that were available 

for compliance in 2014. Supply would 

thus include RINs that were generated 

for renewable fuel produced or 

imported in 2014 as recorded in the 

EMTS, minus any RINs that have 

already been retired or would be 

expected to be retired to cover exports 

of renewable fuels or for any purpose 

other than compliance. RINs that have 

already been retired for such 

circumstances as RINs being invalid, 

spills, corrected and replaced RINs, etc. 

are recorded in EMTS on an ongoing 

basis. However, complete information 

on RINs that are retired to cover exports 

of renewable fuel is not available 

through EMTS until after the 

compliance demonstration deadline for 

a given calendar year has passed. Since 

compliance cannot occur until the 

standards are set, we propose to use 

biodiesel export information from EIA 

in 2014 to estimate the number of 2014 

BBD RINs that will be retired to satisfy 

obligations associated with exported 

BBD. 

Actual supply of BBD in 2014 is 

shown in Table III.C–1 below. Further 

details are provided in a memorandum 

to the docket.91 Since EIA does not 

distinguish exports by D code, we 

assumed that all biodiesel exports 

represent D4 BBD. We expect that any 

errors introduced by this assumption 

will be very small. 

TABLE III.C–1—2014 ACTUAL SUPPLY OF BIOMASS-BASED DIESEL

Domestic 

production and 

imports 

Exports 

BBD RINs 

retired, noncompliance 

reasons 

Net supply 

Million RINs ...................................................................................................... 2,709 124 82 2,502 

Million gallons .................................................................................................. 1,763 83 48 1,631 

While the actual physical volume of D4 

BBD supplied in 2014 was 1.63 billion 

gallons, we have used a physical 

volume of 1.67 billion gallons as the 

2014 volume requirement because the 

formula for calculating the BBD 

percentage standard in 40 CFR 

80.1405(c) includes a factor of 1.5, 

presuming that all BBD is biodiesel. In 

reality, a significant portion of BBD in 

2014 was renewable diesel (328 million 

gallons), which generally has an 

equivalence value of 1.7 rather than 1.5. 

The use of a physical volume of 1.67 

billion gallons ensures that the 

applicable percentage standard for BBD 

accounts for the higher equivalence 

value of the volume of renewable diesel 

produced and imported in 2014 and 

results in a requirement for 2.50 billion 

RINs, consistent with supply. 

D. Determination of Applicable Volume 

of Biomass-Based Diesel for 2015–2017 

The statute requires that, in 

determining the applicable volume of 

BBD, we review the implementation of 

the program in previous years. Based on 

the fact that the industry made more 

BBD available in 2011 and 2013 than 

volume requirements for those years, we 

conclude that the BBD standard is not 

the sole driver for the amount of BBD 

produced or imported into the United 


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92The blenders tax credit for biodiesel likely also 

incentivized additional biodiesel blending in these 

years. 

93RINs available for use is number of RINs 

generated minus the number of RINs retired (or that 

we anticipate will be retired) for any reason other 

than a demonstration of annual compliance, such 

as RINs retired for exported biofuel, volume error 

corrections, enforcement actions, fuel used in 

applications other than transportation fuel, heating 

oil, or jet fuel, etc. 

States.92 We believe that the advanced 

biofuel and total renewable fuel 

standards are significant factors in the 

amount of biodiesel produced and 

imported into the United States. We also 

believe that the advanced and/or total 

renewable fuel standards can continue 

to drive BBD supply in 2015–2017. As 

described in more detail in Section II.C, 

we are proposing volumes of advanced 

biofuel and total renewable fuel for 

2015–2016 that require substantial 

growth beyond the volumes supplied in 

2014. We expect that the advanced 

biofuel and total renewable fuel 

standards will continue to provide 

incentives for BBD supply that exceeds 

the BBD standard. 

However, we recognize that in 

addition to being a component of 

advanced biofuel and total renewable 

fuel, Congress also intended that BBD 

have its own specific standard. Given 

that the statute requires annual 

increases in advanced biofuel through 

2022, it may be appropriate for BBD to 

play an increasing role in supplying 

advanced biofuels to the market, 

especially in light of the fact that BBD 

does not contribute to the E10 

blendwall. This proposal seeks to 

balance the goals of supporting the BBD 

industry and incentivizing the 

production of non-BBD advanced 

biofuels by providing a guaranteed, 

increasing market for BBD and allowing 

all advanced biofuels to compete for 

market share within the advanced 

biofuel category. In doing so we have 

considered the ability of the advanced 

biofuel and total renewable fuel 

standards to incentivize an increasing 

supply of BBD, the implementation of 

the RFS program to date, and the 

statutory factors listed in CAA 

211(o)(2)(B) (discussed in further detail 

in Section III.E below). 

1. Implication of Nested Standards 

The BBD standard is nested within 

the advanced biofuel and total 

renewable fuel standards. This means 

that when an obligated party retires a 

BBD RIN (D4) to satisfy their obligation, 

this RIN also counts towards meeting 

their advanced biofuel and total 

renewable fuel obligations. It also means 

that obligated parties may use BBD RINs 

in excess of their BBD obligations to 

satisfy their advanced biofuel and total 

renewable fuel obligations. Higher 

advanced biofuel and total renewable 

fuel standards, therefore, can create 

demand for BBD if there is an 

insufficient supply of other advanced or 

conventional renewable fuels to satisfy 

the standards, or if BBD RINs can be 

acquired at or below the price of other 

advanced or conventional biofuel RINs. 

In reviewing the implementation of 

the RFS program to date, it is apparent 

that the advanced and/or total 

renewable fuel requirements were in 

fact helping to provide a market for 

volumes of biodiesel above the BBD 

standard. Table III.D.1–1 below shows 

the number of BBD RINs generated and 

available for use towards demonstrating 

compliance 93 in each year from 2011– 

2013. As can be seen from the table, in 

2011 and 2013 the number of BBD RINs 

available for use exceeds the BBD 

standard. In 2013 the number of 

advanced RINs generated from fuels 

other than BBD is not large enough to 

satisfy the implied standard for ‘‘other 

advanced’’ biofuel (advanced biofuel 

that is not BBD or cellulosic biofuel). In 

fact, the amount by which the available 

BBD RINs exceed the BBD standard (421 

million RINs) is slightly larger than the 

amount by which the non-BBD RINs fall 

short of the ‘‘other advanced’’ biofuel 

implied standard (285 million RINs). 

This supports the theory that the 

advanced biofuel standard provided an 

incentive to support BBD production 

and import into the United States in 

excess of the BBD standard. 

TABLE III.D.1–1—BIOMASS-BASED DIESEL AND ADVANCED BIOFUEL RIN GENERATION AND STANDARDS

[Million gallons] 

Available BBD 

RINs 

BBD standard 

(RINs) 

Available 

non-biodiesel 

advanced biofuel 

‘‘Other’’ Advanced 

biofuel requirement 

2011 ................................................................................. 1,484 1,200 225 150 

2012 ................................................................................. 1,465 1,500 597 500 

2013 ................................................................................. 2,360 1,920 552 830 

The prices paid for advanced biofuel 

and BBD RINs also support the theory 

that advanced biofuel and/or total 

renewable fuel standards provided 

sufficient incentive for additional 

biodiesel production and import. 

Because the BBD standard is nested 

within the advanced biofuel and total 

renewable fuel standards, we would 

expect the price of BBD RINs to exceed 

that of advanced and renewable RINs. If, 

however, BBD RINs are being used by 

obligated parties to satisfy their 

advanced biofuel and/or total renewable 

fuel obligations, above and beyond the 

BBD standard, we would expect the 

price of renewable fuel, advanced 

biofuel, and BBD RINs to converge. 

When examining RIN prices data from 

2011 through 2014, shown in Figure 

III.D.1–1 below, we see that until 

January 2013 there is a consistent price 

differential between the price of BBD 

and the relatively cheaper advanced 

biofuel and renewable fuel RINs. 

Beginning in 2013 the price of BBD 

RINs and advanced biofuel RINs 

converge, and remain at a similar price 

throughout 2014. This is more evidence 

that suggests that the advanced biofuel 

standard and/or total renewable fuel 

standard is capable of incentivizing 

increased production and importation of 

BBD beyond the BBD standard, and that 

it in fact operated in this manner in 

2013 and 2014. 


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2. Biomass-Based Diesel as a Fraction of 

Advanced Biofuel 

Another implication of the fact that 

the BBD standard is nested within the 

advanced biofuel standard is that, for 

any given advanced biofuel standard, 

the higher the BBD standard is, the 

lower the opportunity for other nonBBD fuels to compete for market share 

within the context of the advanced 

biofuel standard. The statutory volumes 

of renewable fuel established by 

Congress in CAA section 211(o)(2)(B) 

allow for an opportunity for other 

advanced biofuels (advanced biofuels 

that do not qualify as cellulosic biofuel 

or BBD) to be used to satisfy the 

advanced biofuel standard after the 

cellulosic biofuel and BBD standards 

have been met. This unspecified 

advanced biofuel volume starts at 0.25 

billion gallons in 2013 and grows to 3.5 

billion gallons in 2022. It is, however, 

heavily dependent on EPA actions. 

Increasing the BBD standard above 1 

billion gallons, as we did in 2013, 

reduces the potential market for other 

advanced biofuels to contribute towards 

meeting the advanced biofuel standard. 

Conversely, reducing the cellulosic 

biofuel standard while simultaneously 

maintaining the advanced biofuel 

standard (or reducing it by a lesser 

amount), as we have done each year 

since 2010, increases the potential 

market for other advanced biofuels. 

Both BBD and other advanced 

biofuels achieve estimated greenhouse 

gas reductions of at least 50% relative 

to the petroleum fuels they replace. 

Increasing the guaranteed market for 

BBD, rather than allowing excess BBD to 

compete for market share with other 

advanced biofuels within the advanced 

biofuel standard, would likely reduce 

competition and thus result in increased 

costs associated with the RFS program 

with no additional GHG reductions. It 

will also have a negative impact on 

investment in the development and 

deployment of other advanced biofuels, 

as these fuels will have a lower 

potential market if the BBD standard is 

increased. The long term success of the 

RFS program will depend on the growth 

in a variety of advanced biofuels. The 

standards we set today must therefore 

provide an incentive for the ongoing 

research, development, and 

commercialization of a variety of types 

of advanced biofuels beyond just BBD. 

We note again, however, that allowing 

for a greater use of other advanced 

biofuels by setting a lower BBD standard 

does not limit the amount of BBD that 

may be used towards satisfying the 

advanced biofuel standard. If BBD can 

be supplied at a lower cost than other 

advanced biofuels it can—and we 

expect would—be used to satisfy the 

majority or even all of the unspecified 

volume of advanced biofuels. Allowing 

for a larger portion of the advanced 

biofuel standard to be unspecified, by 

setting a lower BBD standard, maintains 

an incentive for the development and 

deployment of other advanced biofuels, 

while at the same time allowing a level 

of competition that can reduce 

compliance costs while also allowing 

growth in the supply of BBD and 

maintaining the greenhouse gas 

emissions reductions achieved by the 

use of advanced biofuels in the RFS 

program. We believe these are important 

considerations in determining the 

required BBD volumes in the 2015–2017 

time period, as well as in future years. 

3. Ensuring Growth in Biomass-Based 

Diesel and Other Advanced Biofuel 

While the ability of the advanced and 

total renewable fuel standards to 

incentivize increasing production of 

BBD and the desire to allow other 

advanced biofuels to compete with BBD 

for market share under the advanced 

standard suggest that a flat or even 

decreasing BBD volume requirement 

may be the optimal solution, these are 

not the only considerations. Despite 

many of these same issues being present 


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33136 Federal Register / Vol. 80, No. 111 / Wednesday, June 10, 2015 / Proposed Rules 

94 77 FR 59461 col. 1, September 27, 2012. 

95Regulations of Fuels and Fuel Additives: 2013 

BBD Renewable Fuel Volume; Proposed Rule. 77 FR 

59458, 59460–59461. http://www.epa.gov/otaq/

fuels/renewablefuels/regulations.htm (last accessed 

May 20, 2014). 

96 77 FR 59458, 59462 and 59483. 

in 2013, EPA decided to increase the 

BBD standard in 2013 to 1.28 billion 

gallons. EPA’s decision to establish the 

higher 1.28 billion gallon BBD volume 

for 2013 was made against the backdrop 

of the BBD industry having increased 

production from about 400 million 

gallons in 2010 to over 1 billion gallons 

in 2011.94 At that time, we were not 

confident in the ability of other 

advanced biofuels to be able to supply 

all the necessary volume of advanced 

biofuel needed to offset the shortfall in 

cellulosic biofuel and to meet the 

statutory volume target of 2.75 billion 

gallons for advanced biofuel. EPA was 

also not completely confident in the 

ability of the BBD industry to further 

increase production without an 

increased BBD standard. While BBD 

production had performed well in 2011 

and the early part of 2012, the biodiesel 

industry had gone through a period of 

instability in 2009 and 2010.95

During the development of the 2013 

standards rulemaking, we were also 

concerned that the cellulosic biofuel 

standard, also nested within the 

advanced biofuel requirement, was 

lagging significantly behind the 1 billion 

gallon statutory volume target. The 

shortfall in cellulosic biofuel volume 

meant that either other sources of 

advanced biofuel would be necessary to 

fulfill the specified volumes in the 

statute for the advanced biofuel 

standard, or EPA would need to waive 

a portion of the advanced biofuel 

standard. It is in this context that EPA 

determined that raising the BBD 

requirement to 1.28 billion gallons was 

appropriate. Most importantly, an 

applicable volume requirement of 1.28 

billion gallons was expected to 

encourage continued investment and 

innovation in the BBD industry, 

providing necessary assurances to the 

industry to increase production for 2013 

while also serving the long term goal of 

the RFS statute to increase volumes of 

advanced biofuels over time.96

There are also advantages to 

increasing the BBD standard in order to 

help provide stability to the BBD 

industry. This industry is currently the 

single largest contributor to the 

advanced biofuel pool, one that to date 

has been largely responsible for 

providing the growth in advanced 

biofuels envisioned by Congress. 

Nevertheless, there has been variability 

in the number of biodiesel facilities in 

production over the last few years, as 

well as the percent utilization of 

individual facilities, both of which 

contribute uncertainty in the rate of 

production in the near future, and 

which can be mitigated to some degree 

with an increase in the BBD applicable 

volume. Increasing the BBD standard 

should help to provide market 

conditions that allow these BBD 

production facilities to operate with 

greater certainty. This result would be 

consistent with the goals of the Act to 

increase the production and use of 

renewable fuels. 

4. Proposed Volumes for 2015–2017 

With these considerations in mind, as 

well as our analysis of the factors 

specified in the statute and described 

below, and in coordination with the 

Departments of Agriculture and Energy, 

we are proposing to increase the 

applicable volume of BBD to 1.70 

billion gallons for 2015, and to further 

increase the BBD volume requirement 

by 0.1 billion gallons in 2016 and 2017, 

respectively. We believe this proposal 

strikes the appropriate balance between 

providing a market environment where 

other advanced biofuels can compete, 

and achieving the benefits associated 

with increasing the required volume of 

BBD. Given our proposed volumes for 

advanced biofuel in these years, setting 

the BBD standard in this manner 

continues to allow a considerable 

portion of the advanced biofuel volume 

to be satisfied by either additional 

gallons of BBD or by other unspecified 

types of qualifying advanced biofuels 

(see Table III.D.4–1 below). While we 

have not yet determined the applicable 

volume of advanced biofuel for 2017, 

we anticipate the continued growth in 

the advanced biofuel standard such that 

the advanced biofuel standard will 

provide an incentive for both increasing 

volumes of BBD and other advanced 

biofuels. We believe maintaining this 

unspecified or other advanced biofuel 

volume will provide the incentive for 

development and growth in other types 

of advanced biofuels. At the same time, 

allowing the portion of the advanced 

biofuel volume requirement that is 

dedicated to BBD to increase 

concurrently with the increase in the 

overall advanced biofuel volume 

requirement will contribute to market 

certainty for both the BBD industry and 

the renewable fuels program in general. 

TABLE III.D.4–1—PROPOSED BIOMASS-BASED DIESEL, CELLULOSIC BIOFUEL, AND ADVANCED BIOFUEL STANDARDS: 

2015–2017 

[Billion gallons] 

BBD 

(gallons) 

BBD 

(RINs) 

Cellulosic 

biofuel 

Advanced 

biofuel 

Unspecified 

advanced 

2015 ..................................................................................... 1.70 2.55 0.11 2.90 0.24 

2016 ..................................................................................... 1.80 2.70 0.20 3.40 0.50 

2017 ..................................................................................... 1.90 2.85 TBD TBD TBD 

In proposing these standards for BBD 

for 2015–2017 EPA has taken into 

account the statutory requirements 

found in CAA section 211(o)(2)(B)(ii), 

including coordination with the 

Departments of Energy and Agriculture, 

review of the implementation of the 

renewable fuels program to date, and 

analysis of the statutory factors 

specified in CAA section 

211(o)(2)(B)(ii)(I)–(VI). Of particular 

relevance in our review of the 

implementation of the renewable fuels 

program to date were the circumstances 

and context that led us to increase the 

BBD standard from 1.0 billion gallons in 

2012 to 1.28 billion gallons for 2013, 

and the biofuel industry’s successful 

performance in 2013. We have also 

reviewed the statutory factors in the 

context that the BBD volume 

requirement is nested within the 

advanced biofuels and total renewable 

fuels volume requirements. This 

discussion of the statutory factors is 

found in Section III.E., below. 

In deciding to propose an applicable 

volume of 1.70 billion gallons of BBD 

for 2015, with annual increases of 0.10 

billion gallons for 2016 and 2017, we 


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97While BBD can be used to satisfy the total 

renewable fuel requirement we anticipate that it 

will be used to satisfy the advanced biofuel volume 

requirement in 2015–2017. See Table II.D.2–2, 

‘‘Volume Scenarios Illustrating Possible 

Compliance with 3.40 Bill Gal Advanced Biofuela

and 17.40 Bill Gal Bill Gal Total Renewable Fuel’’. 

98 ‘‘Memorandum to docket: Statutory Factors 

Assessment for 2015–2017 BBD Applicable 

Volumes’’ EPA–HQ–OAR–2015–0111. 

considered not only the short-term 

impacts, but also the potential long-term 

impacts of our action on the RFS 

program. We took into account the 

competitive impact such an increase in 

the BBD set-aside would likely have on 

other advanced biofuel producers 

already in the marketplace as well as on 

potential new market entrants. This 

increase in the BBD set-aside through 

2017 should result in a requirement for 

unspecified advanced biofuel sufficient 

to provide opportunity for continued 

investment in and growth of advanced 

biofuels other than BBD. 

Raising the guaranteed BBD volume 

beyond the proposed volumes to a 

volume that approaches the maximum 

possible supply of BBD could result in 

a less competitive advanced biofuels 

market, increasing RIN prices, and a less 

efficient market-driven renewable fuels 

program. Our decision today to propose 

increasing the BBD volume in 2015– 

2017 by 100 million gallons per year 

would not be expected to lead to such 

adverse result. We believe that the 

proposed increases for 2015–2017 will 

both contribute to market stability for 

the renewable fuels program and 

continue to promote a growing and 

competitive advanced biofuels 

marketplace, one which encourages the 

growth and development of diverse 

biofuels along with additional volumes 

of BBD beyond the volumes required by 

the BBD standard. We request comment 

on our proposal for increasing the BBD 

applicable volumes in 2015–2017 and 

whether higher or lower volume 

requirements for BBD for 2015–2017 

would be more appropriate. 

E. Consideration of Statutory Factors for 

2014–2017 

In this section we discuss our 

considerations of the statutory factors 

set forth in CAA section 

211(o)(2)(B)(ii)(I)–(VI). As discussed 

earlier in Section III.D.1, the BBD 

volume requirement is nested within 

both the advanced biofuel and the total 

renewable fuel volume requirements; so 

that any BBD produced beyond the 

mandated BBD volume can be used to 

satisfy both these other applicable 

volume requirements. The result is that 

in considering the statutory factors 

when setting the biomass-based 

standard we must consider the potential 

impacts of increasing BBD in 

comparison to other advanced 

biofuels,97 not to diesel fuel. Greater or 

lesser applicable volumes of BBD do not 

change the amount of advanced biofuel 

used to displace petroleum fuels; rather, 

increasing the BBD applicable volume 

may result in the displacement of other 

types of advanced biofuels that could 

have been used to meet the advanced 

biofuels volume requirement. 

1. Primary and Supplementary Statutory 

Factors Assessment for 2015–2017 

Biomass-Based Diesel Applicable 

Volumes 

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) that 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. This assessment is based in 

part on our review of implementation of 

the RFS program to date, as discussed 

in Sections III. B and D. 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, that in considering statutory 

factor 211(o)(2)(B)(ii)(III), 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 nonsupportive 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 advanced biofuel requirement, we 

believe this same primary assessment is 

appropriate since, as in previous years, 

the 2017 advanced biofuel requirement 

will be set to reflect the maximum 

volumes of all advanced biofuels 

(including BBD) that can reasonably be 

expected 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 from 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 decrease in the use of 

other types of advanced biofuels for 

years 2015–2017. 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 advanced biofuel 

from being outcompeted by other 

advanced biofuels. This assessment 

analyzes all of the statutory factors, and 

is described in a memorandum to the 

docket.98 Overall, the supplemental 

assessment 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. 

2. Assessment for 2014 Biomass-Based 

Diesel Applicable Volume 

Given the fact that the 2014 

compliance year has passed, we believe 

that our action in setting the 2014 BBD 

volume requirement will result in no 

real-world impacts, including no 

impacts with respect to the factors listed 

under CAA section 211(o)(2)(B)(ii)(I)– 

(VI). For example, there is no longer any 

ability for other advanced biofuels to 

compete with BBD for a greater share of 

the advanced biofuel pool in 2014, so 

there would be no marginal benefit in 

terms of incentivizing production of 

such fuels in setting a lower volume 

requirement than the volume of BBD 

that was actually produced and 

imported and available for compliance 

in 2014. Setting the applicable volume 

at a higher level would require a drawdown in the bank of carryover RINs, 

which EPA does not consider prudent 

for the reasons discussed in Section II.E. 

of this preamble. In light of these 

considerations, we propose to establish 

the 2014 applicable volume as equal to 

the volume actually produced and 

imported, which is available for 

compliance. 


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99Additionally, on April 3rd, 2015 EPA 

published a direct final rule modifying the process 

by which the cellulosic waiver credit prices are 

established, and indicating the prices for these 

credits in 2014 and 2015 using the regulations 

modified by this rule (80 FR 18136, April 3, 2015). 

100On January 25, 2013, the United States Court 

of Appeals for the District of Columbia Circuit 

issued its decision concerning a challenge to the 

2012 cellulosic biofuel standard. In this decision 

the Court stated that in projecting potentially 

available volumes of cellulosic biofuel EPA must 

apply a ‘‘neutral methodology’’ aimed at providing 

a prediction of ‘‘what will actually happen,’’ as 

required by the statute. 

101 In determining appropriate volumes for CNG/ 

LNG producers we did not contact individual 

producers but rather relied primarily on discussions 

with industry associations, and information on 

likely production facilities that are already 

registered under the RFS program. In some cases 

where further information was needed we did speak 

with individual companies. 

IV. Proposed Cellulosic Biofuel Volume 

for 2014–2016 

In the past several years the cellulosic 

biofuel industry has made significant 

progress towards commercial scale 

production. Quad County Corn 

Processors produced the first cellulosic 

biofuel RINs from corn kernel fiber at a 

corn ethanol plant in 2014. In addition, 

in 2014 two large scale cellulosic 

ethanol facilities owned and operated 

by the experienced biofuel production 

companies Abengoa and Poet completed 

construction. EPA also determined that 

compressed natural gas (CNG) and 

liquefied natural gas (LNG) produced 

from biogas from landfills, municipal 

waste-water treatment facility digesters, 

agricultural digesters, and separated 

municipal solid waste (MSW) digesters 

is eligible to generate cellulosic RINs. 

This determination lead to a significant 

increase in cellulosic RIN generation, as 

fuel that previously had been qualified 

to generate advanced biofuel RINs began 

to be used to generate cellulosic RINs. 

Efforts continue to be made at facilities 

across the country to reduce both capital 

costs and production costs associated 

with cellulosic biofuel production 

through technology advances and the 

development of best practices gained 

through operating experience. EPA also 

continues to support the ongoing 

development of cellulosic biofuels 

through actions such as the evaluation 

of new pathways with the potential to 

generate cellulosic biofuel RINs.99 This 

section describes the available supply of 

cellulosic biofuel RINs in 2014, the 

volumes that we project will be 

produced or imported in 2015 and 2016, 

and some of the uncertainties associated 

with those volumes. 

In order to project the volume of 

cellulosic biofuel production in 2015 

and 2016 we considered data reported 

to EPA through the EPA Moderated 

Transaction System (EMTS) and 

information we collected regarding 

individual facilities that have produced 

or have the potential to produce 

qualifying volumes for consumption as 

transportation fuel, heating oil, or jet 

fuel in the U.S. in 2014, 2015, or 2016. 

New cellulosic biofuel production 

facilities projected to be brought online 

in the United States over the next few 

years would significantly increase the 

production capacity of the cellulosic 

industry. Operational experience gained 

at the first few commercial scale 

cellulosic biofuel production facilities 

should also lead to increasing 

production of cellulosic biofuel from 

existing production facilities. The 

following section discusses the 

companies the EPA reviewed in the 

process of projecting qualifying 

cellulosic biofuel production in the 

United States in 2015 and 2016. 

Information on these companies forms 

the basis for our production projections 

of cellulosic biofuel that will be 

produced for use as transportation fuel, 

heating oil, or jet fuel in the United 

States in these years (see Table IV–1 

below). We request comment on the 

projected volumes of cellulosic biofuel 

production for each of these years, as 

well as the methodology used to project 

these volumes. 

TABLE IV–1—PROPOSED CELLULOSIC

BIOFUEL STANDARDS

Year Volume 

(million gallons) 

2014 .......................... 33 

2015 .......................... 106 

2016 .......................... 206 

A. Statutory Requirements 

The volumes of renewable fuel to be 

used under the RFS program each year 

(absent an adjustment or waiver by EPA) 

are specified in CAA section 211(o)(2). 

The volumes of cellulosic biofuel 

specified in the statute for 2014, 2015, 

and 2016 are shown in Table IV.A–1 

below. The statute provides that if EPA 

determines, based on EIA’s estimate, 

that the projected volume of cellulosic 

biofuel production in a given year is less 

than the statutory volume, then EPA is 

to reduce the applicable volume of 

cellulosic biofuel to the projected 

volume available during that calendar 

year.100

TABLE IV.A–1—STATUTORY VOLUMES

OF CELLULOSIC BIOFUEL

Year Volume 

(million gallons) 

2014 .......................... 1,750 

2015 .......................... 3,000 

2016 .......................... 4,250 

In addition, if EPA reduces the 

required volume of cellulosic biofuel 

below the level specified in the statute, 

the Act also indicates that we may 

reduce the applicable volumes of 

advanced biofuels and total renewable 

fuel by the same or a lesser volume, and 

we are required to make cellulosic 

waiver credits available. Our 

consideration of the 2014, 2015, and 

2016 volume requirements for advanced 

biofuels and total renewable fuel is 

presented in Section II. 

B. Cellulosic Biofuel Industry 

Assessment 

In order to project cellulosic biofuel 

production for 2015 and 2016 we have 

tracked the progress of several dozen 

potential cellulosic biofuel production 

facilities. As we did in establishing the 

2013 annual volumes, we have focused 

on facilities with the potential to 

produce commercial volumes of 

cellulosic biofuel rather than small R&D 

or pilot-scale facilities. We did so 

because the larger commercial-scale 

facilities are much more likely to 

generate RINs for the fuel they produce 

and the volumes they produce will have 

a far greater impact on the cellulosic 

biofuel standards for 2015—2016. From 

this list of facilities we used information 

from EMTS and publically available 

information, and information provided 

by representatives of potential cellulosic 

biofuel producers, to make a 

determination of which facilities are the 

most likely candidates to produce 

cellulosic biofuel and generate 

cellulosic biofuel RINs in 2015 and 

2016. Each of these companies was 

investigated further in order to 

determine the current status of its 

facilities and its likely cellulosic biofuel 

production and RIN generation volumes 

for 2015 and 2016. Both in our 

discussions with representatives of each 

company 101 and as part of our internal 

evaluation process we gathered and 

analyzed information including, but not 

limited to, the funding status of these 

facilities, current status of the 

production technologies, anticipated 

construction and production ramp-up 

periods, facility registration status, and 

annual fuel production and RIN 

generation targets. 

EPA is proposing to use a slightly 

different methodology for projecting the 

available volume of cellulosic biofuel 

for each of the three years. Our 

approach to each of these years can 


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102Letter from Adam Sieminski, EIA 

Administrator to Gina McCarthy, EPA 

Administrator February 19, 2014. 103The volume projection from CNG/LNG 

producers does not represent production from a 

single company or facility, but rather a group of 

facilities utilizing the same production technology. 104 ‘‘Cellulosic Biofuel Producer Company 

Descriptions’’, memorandum from Dallas 

Burkholder to EPA Air Docket EPA–HQ–OAR– 

2015–0111. 

105 ‘‘Cellulosic Biofuel Producer Company 

Descriptions’’, memorandum from Dallas 

Burkholder to EPA Air Docket EPA–HQ–OAR– 

2015–0111. 

106For the purpose of the preamble discussion we 

have grouped together all facilities expected to 

produce cellulosic CNG/LNG. The individual 

facilities included in our assessment are listed in 

‘‘Assessment of Cellulosic Biofuel Production from 

Biogas (2015–2016)’’, memorandum from Dallas 

Burkholder to EPA Air Docket EPA–HQ–OAR– 

2015–0111. 

107 Given timing constraints for issuing a final 

rule, EPA does not anticipate providing an 

opportunity for comment on any updated data. 

Commenters may therefore wish to focus their 

comments both on the types of data we are 

proposing be used, as well as EPA’s proposed 

approach for using the data. 

broadly be described as one that seeks 

to use actual production volumes where 

they are available (such as for all of 

2014 and several months of 2015) and 

to project production volumes from 

likely production facilities for future 

months in which actual production 

volumes are not available. In previous 

projections of cellulosic biofuel 

production EPA, as directed by the 

CAA, has considered information 

provided by EIA in making our 

projections. EPA received a letter from 

EIA on February 19, 2014 containing 

cellulosic biofuel projections for 

2014,102 but to date have not received 

any projections of cellulosic biofuel 

production for 2015 or 2016. As 

discussed in more detail below EPA 

now has data, through EMTS, on the 

actual number of cellulosic RINs 

generated in 2014 and we are proposing 

to establish the 2014 cellulosic biofuel 

standard using this data rather than 

EIA’s projection from early 2014. We 

anticipate that for the final rule EIA will 

provide EPA with projected production 

volumes of cellulosic biofuel in 2015 

and 2016 and we intend to consider 

these projections in our final rule. 

Our approach for each of the three 

years is discussed in more detail in 

Sections IV.D–IV.F below. The 

remainder of this Section discusses the 

current status of the companies and 

facilities EPA expects may be in a 

position to produce commercial scale 

volumes of cellulosic biofuel by the end 

of 2016. This information forms the 

basis for our proposed standards for 

cellulosic biofuel for 2014, 2015, and 

2016. 

1. Potential Domestic Producers 

There are a number of companies and 

facilities 103 located in the United States 

that have either already begun 

producing cellulosic biofuel for use as 

transportation fuel, heating oil, or jet 

fuel at a commercial scale, or are 

anticipated to be in a position to do so 

by the end of 2016. The financial 

incentive provided by cellulosic biofuel 

RINs, combined with the fact that all 

these facilities intend to produce fuel 

for domestic consumption using 

approved pathways, gives us a high 

degree of confidence that cellulosic 

biofuel RINs will be generated for any 

fuel produced. In order to generate 

RINs, each of these facilities must be 

registered under the RFS program and 

comply with all the regulatory 

requirements. This includes using an 

approved RIN-generating pathway and 

verifying that their feedstocks meet the 

definition of renewable biomass. Many 

of the companies and facilities have 

already successfully completed facility 

registration, and several have 

successfully generated RINs. A brief 

description of each of the companies 

that EPA believes may produce 

commercial scale volumes of RIN 

generating cellulosic biofuel by the end 

of 2016 can be found in a memorandum 

to the docket for this proposed rule.104

These descriptions are based on a 

review of the publicly available 

information and information provided 

to EPA in conversations with company 

representatives. The key data for each of 

these companies used in our projection 

of the potentially available volume of 

cellulosic biofuel in 2015 and 2016 is 

summarized in Table IV.B.3–1 below. 

2. Potential Foreign Sources of 

Cellulosic Biofuel 

In addition to the potential sources of 

cellulosic biofuel located in the United 

States, there are several foreign 

cellulosic biofuel companies that may 

produce cellulosic biofuel in 2015 or 

2016. These include facilities owned 

and operated by Beta Renewables, 

Enerkem, GranBio, and Raizen. All of 

these facilities use fuel production 

pathways that have been approved by 

EPA for cellulosic RIN generation 

provided eligible sources of renewable 

feedstock are used. These companies 

would therefore be eligible to register 

these facilities under the RFS program 

and generate RINs for any qualifying 

fuel imported into the United States. 

While these facilities may be able to 

generate RINs for any volumes of 

cellulosic biofuel they import into the 

United States, demand for the cellulosic 

biofuels they produce is expected to be 

high in local markets. EPA is charged 

with projecting the volume of cellulosic 

biofuel that will be produced or 

imported into the United States. Based 

on information available to EPA at the 

time of this proposed rulemaking, 

including the lack of cellulosic biofuel 

imports to date, we do not believe 

cellulosic biofuel will be imported into 

the United States from foreign cellulosic 

biofuel production facilities other than 

the Ensyn facility in Ontario, Canada. 

As such, production volumes from 

foreign facilities (with the exception of 

Ensyn) have not been included in our 

projection of potentially available 

volume for 2014–2016. EPA plans to 

continue to monitor the progress of 

foreign cellulosic biofuel facilities and 

may include volumes from foreign 

facilities in future rulemakings if 

appropriate and supported by new 

information. 

3. Summary of Volume Projections for 

Individual Companies 

The information we have gathered on 

cellulosic biofuel producers, described 

above, along with the data collected 

through EMTS forms the basis for our 

projected volumes of cellulosic biofuel 

production for each facility in 2015 and 

2016. As in 2013, we have focused on 

commercial scale cellulosic biofuel 

production facilities. This focus is 

appropriate, as the volume of cellulosic 

biofuel produced from R&D and pilot 

scale facilities is quite small in relation 

to that expected from the commercial 

scale facilities. R&D and demonstration 

scale facilities have also generally not 

generated RINs for any fuel they have 

produced. 

By 2016 there are a number of 

cellulosic biofuel production facilities 

that have the potential to produce fuel 

at commercial scale. Each of these 

facilities is discussed in a memorandum 

to the docket,105 and the relevant 

information used to project a likely 

production range for each company is 

summarized in Table IV.B.3–1 below.106

We will continue to monitor the status 

of these facilities and will update this 

information for the final rule.107 If we 

receive information that suggests 

facilities not currently included in this 

table, either foreign or domestic, may 

produce commercial-scale volumes of 

cellulosic biofuel for use as 

transportation fuel, heating oil, or jet 

fuel in the United States by 2016 we 

will include them in our projections for 

our final rule as appropriate. We will 

also remove facilities from our 

projections if new information suggests 


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108The Facility Capacity is generally equal to the 

nameplate capacity provided to EPA by company 

representatives or found in publicly available 

information. If the facility has completed 

registration and the total permitted capacity is 

lower than the nameplate capacity then this lower 

volume is used as the facility capacity. For 

companies generating RINs for CNG/LNG derived 

from biogas the Facility Capacity is equal to the 

lower of the annualized rate of production of CNG/ 

LNG from the facility or the sum of the volume of 

contracts in place for the sale of CNG/LNG for use 

as transportation fuel (reported as the actual peak 

capacity for these producers). 109Where a quarter is listed for the first 

production date EPA has assumed production 

begins in the middle month of the quarter (i.e. 

August for the 3rd quarter) for the purposes of 

projecting volumes 110For more information on these facilities see 

‘‘Assessment of Cellulosic Biofuel Production from 

Biogas (2015–2016)’’, memorandum from Dallas 

Burkholder to EPA Air Docket EPA–HQ–OAR– 

2015–0111. 

111http://www.epa.gov/otaq/fuels/rfsdata/

index.htm. 

112 In 2014 Cellulosic Biofuel and Cellulosic 

Diesel RINs were retired for Remedial Actions and 

Invalid RINs. 

113The vast majority of cellulosic biofuel RINs 

generated in 2014 (approximately 32 or the 33 

million RINs) were for CNG or LNG. These fuels 

require verification that the CNG/LNG was used as 

transportation fuel in the United States in order for 

RINs to be generated. 

they will not produce cellulosic by 

2016. 

TABLE IV.B.3–1—PROJECTED PRODUCERS OF CELLULOSIC BIOFUEL BY 2016 

Company name Location Feedstock Fuel 

Facility 

capacity 

(MGY) 108

Construction start 

date First production 109

Abengoa ................ Hugoton, KS ........ Corn Stover .......... Ethanol ................. 25 .............. September 2011 .. April 2015. 

Cool Planet ........... Alexandria, LA ...... Wood Waste ........ Gasoline ............... 1 ................ 2Q 2015 ............... Late 2016. 

CNG/LNG Producers 110.Various ................. Biogas .................. CNG/LNG ............. Various ...... N/A ....................... August 2014. 

DuPont .................. Nevada, IA ........... Corn Stover .......... Ethanol ................. 30 .............. November 2012 ... 3Q 2015. 

Edeniq ................... Various ................. Corn Kernel Fiber Ethanol ................. Various ...... Various ................. 2nd Half 2015. 

Ensyn .................... Renfrew, ON ........ Wood Waste ........ Heating Oil ........... 3 ................ N/A ....................... 2014. 

INEOS Bio ............ Vero Beach, FL .... Vegetative Waste Ethanol ................. 8 ................ February 2011 ..... 2Q 2015. 

Poet ....................... Emmetsburg, IA ... Corn Stover .......... Ethanol ................. 24 .............. March 2012 .......... 3Q 2015. 

QCCP .................... Galva, IA .............. Cork Kernel Fiber Ethanol ................. 2 ................ Late 2013 ............. October 2014. 

C. Cellulosic Biofuel Volume for 2014 

EPA is charged with projecting the 

available volume of cellulosic biofuel 

for each year, and to reduce the 

applicable volume of cellulosic biofuel 

to the level projected to be available for 

years in which the projected available 

volume falls below the cellulosic biofuel 

applicable volume target specified in 

the CAA 211(o)(2). EPA believes that for 

any historical time period, the required 

projection is best calculated as the sum 

of the cellulosic biofuel RINs (D3) and 

the cellulosic diesel RINs (D7) 

generated, adjusted for RINs that are 

retired for purposes other than 

compliance with the annual standards. 

EPA publishes the number of cellulosic 

biofuel and cellulosic diesel RINs 

generated on a month by month basis on 

our Web site.111 The number of 

cellulosic biofuel and cellulosic diesel 

RINs generated for each month of 2014 

can be found in Table IV.C–1 below. 

From this total, we subtract the number 

of cellulosic biofuel and cellulosic 

diesel RINs retired for reasons other 

than compliance with the annual 

standards, as these RINs are not 

available to obligated parties.112 In 

calculating the number of cellulosic 

biofuel RINs available for compliance 

with the annual standards for 2014 we 

have assumed that there were no 

exports of cellulosic biofuel.113 EPA 

proposes to establish the cellulosic 

biofuel requirement for 2014 at 33 

million gallons. We believe this number, 

calculated by subtracting the total 

number of cellulosic biofuel RINs (D3 

and D7) retired for reasons other than 

compliance with the annual standards 

from the total number of cellulosic 

biofuel RINs generated in 2014 (D3 and 

D7), represents the total available 

supply of cellulosic biofuel RINs for 

2014. 

TABLE IV.C–1—CELLULOSIC BIOFUEL RIN GENERATION IN 2014 114

Cellulosic biofuel 

(D3) 

Cellulosic diesel 

(D7) 

January 2014 ................................................................................................................................................... 58,415 0 

February 2014 ................................................................................................................................................. 7,072 0 

March 2014 ...................................................................................................................................................... 6,624 472 

April 2014 ......................................................................................................................................................... 643 10,950 

May 2014 ......................................................................................................................................................... 0 0 

June 2014 ........................................................................................................................................................ 0 0 

July 2014 ......................................................................................................................................................... 4,156 1,248 

August 2014 ..................................................................................................................................................... 3,492,106 5,532 

September 2014 .............................................................................................................................................. 7,555,432 17,073 

October 2014 ................................................................................................................................................... 7,047,762 24,030 

November 2014 ............................................................................................................................................... 6,325,080 0 

December 2014 ............................................................................................................................................... 8,863,270 0 

Total .......................................................................................................................................................... 33,360,560 59,305 

RINs retired for reasons other than compliance with the annual standards .................................................. 346,318 4,997 

RINs Available ................................................................................................................................................. 33,014,242 54,308 

Available Cellulosic RINs (D3 and D7) ........................................................................................................... 33,068,550 


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114All numbers from EPA Web site: http://

www.epa.gov/otaq/fuels/rfsdata/index.htm. 

Accessed February 9, 2015. 

115For the purposes of projecting RIN generation 

from CNG/LNG projections were made for parent 

companies, generally representing multiple 

companies. For more detail see ‘‘Assessment of 

Cellulosic Biofuel Production from Biogas (2015– 

2016)’’, memorandum from Dallas Burkholder to 

EPA Air Docket EPA–HQ–OAR–2015–0111. 

116For the final rule we intend to update this 

information and use the data available for the most 

recent 12 months at the time of the final rule. 

117The scaling factor is 0.75; equal to the 9 

months for which production data is being 

projected divided by 12. 

D. Cellulosic Biofuel Volume for 2015 

To project the volume of cellulosic 

biofuel in 2015, EPA has relied on a 

combination of production information 

reported to EPA through EMTS for 

months in which we have data available 

and facility or company specific 

estimates of likely production for 

months for which EMTS data is not 

available. For months in which 

information on the production of 

cellulosic biofuel is available we have 

used the methodology discussed in 

Section IV.C, subtracting the number of 

RINs retired for reasons other than 

compliance in 2015 from the total 

number of RINs produced in 2015 that 

are eligible to be used towards satisfying 

the cellulosic biofuel standard (D3 and 

D7 RINs). We have again assumed that 

no cellulosic biofuel was exported in 

the first three months of 2015. This data 

is shown in Table IV.D–1 below. 

TABLE IV.D–1—CELLULOSIC BIOFUEL RIN GENERATION IN EARLY 2015 

Cellulosic biofuel 

(D3) 

Cellulosic diesel 

(D7) 

January 2015 ................................................................................................................................................... 4,076,744 0 

February 2015 ................................................................................................................................................. 7,935,446 0 

March 2015 ...................................................................................................................................................... 7,799,749 0 

Total .......................................................................................................................................................... 19,811,939 0 

RINs retired for reasons other than compliance ............................................................................................. 76,942 0 

RINs Available ................................................................................................................................................. 19,734,997 0 

Total Available Cellulosic RINs (D3 and D7) .................................................................................... 19,734,997 

For months in which information is 

unavailable EPA has updated our 

projection methodology from the 

methodology used in previous 

rulemakings and our proposed rule for 

2014. Our projection methodology starts 

with estimating a range of potential 

production volumes for each company 

for the portion of 2015 where 

production data is not available.115 EPA 

has established a range of potential 

production volumes for each company 

such that it is possible, but unlikely, 

that the actual production will be above 

or below the range. We believe that it is 

more appropriate to project a range of 

potential production volumes rather 

than a single point estimate due to the 

highly uncertain and variable nature of 

biofuel production at cellulosic biofuel 

facilities, especially those in the early 

stages of production. The projected 

production ranges for each facility are 

used to generate a single point estimate 

for the total production of cellulosic 

biofuel from all companies in 2015 for 

the months in which actual production 

volumes through EMTS are not 

available. 

In establishing a range for each 

company, we began by determining an 

appropriate low end of the range. The 

low end of the range for each company 

is designed to represent the volume of 

fuel EPA believes each company would 

produce if they are unable to begin fuel 

production on their expected start-up 

date and/or if they experience 

challenges that result in reduced 

production volumes or a longer than 

expected ramp-up period. In this 

proposal EPA has set the low end of the 

production range for each company 

based on the volume of RIN-generating 

cellulosic biofuel the company has 

produced in the most recent 12 months 

for which data is available.116 Because 

we are not attempting to determine a 

low end of a likely production range for 

a full year, but rather only the months 

in 2015 for which data is not available, 

this number is then multiplied by a 

scaling factor 117 to appropriately scale 

this annual production volume for use 

as the low end of the range over the 

number of months of 2015 for which 

actual production data is unavailable. 

This approach provides us with an 

objective methodology for calculating 

the low end of the potential production 

range for each company that we believe 

is appropriate in light of the history of 

start-up delays and missed production 

targets in the cellulosic biofuel industry. 

If a company has not yet begun 

producing RIN-generating volumes of 

cellulosic biofuel, our experience 

suggests that they may experience 

challenges in progressing toward 

commercial-scale production that would 

result in the delay of the production of 

cellulosic biofuel. We acknowledge that 

in the majority of cases cellulosic 

companies that have begun producing 

fuel and are currently in the start-up 

and ramp-up phases of production will 

increase their production of cellulosic 

biofuel from one year to the next as they 

work towards production rates at or 

near the facility capacity. Fuel 

production by these companies may, 

however, be interrupted, either 

intentionally or unexpectedly, and these 

interruptions may hinder the ability of 

these companies to increase biofuel 

production year over year. We will 

account for the likelihood of increasing 

production in developing the high end 

of each company’s production range. 

Finally, there may be cases in which 

information is available that suggests a 

company is unlikely to meet the 

production volumes achieved in the 

previous 12 months for which data is 

available, due to technical, financial, or 

legal difficulties. We do not believe this 

is the case with any of the companies 

projected to produce cellulosic biofuel 

in 2015. 

It is important to note that the low 

end of the range does not necessarily 

represent a worst-case scenario. The 

worst-case scenario for any of these 

facilities for the months in which we are 

projecting production is no production, 

as it is always possible that extreme 

circumstances or natural disasters may 

result in extended delays, facility 

damages, or liquidation. While not 

denying such a possibility, we 

nevertheless believe it is generally 

appropriate to use the production over 

the previous 12 months as the low end 

of the range, with exceptions made 

where available information indicates 

that such production may be unlikely. 

In situations where a company has not 


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118We did not assume a six-month straight-line 

ramp-up period in determining the high end of the 

projected production range for CNG/LNG 

producers. This is because these facilities generally 

have a history of CNG/LNG production prior to 

producing RINs, and therefore do not face many of 

the start-up and scale-up challenges that impact 

new facilities. For further information on the 

methodology used to project cellulosic RIN 

generation from CNG/LNG producers see 

‘‘Assessment of Cellulosic Biofuel Production from 

Biogas (2015–2016)’’, memorandum from Dallas 

Burkholder to EPA Air Docket EPA–HQ–OAR– 

2015–0111. 

119 ‘‘Cellulosic Biofuel Producer Company 

Descriptions’’, memorandum from Dallas 

Burkholder to EPA Air Docket EPA–HQ–OAR– 

2015–0111. 120For individual company information see 

‘‘Cellulosic Biofuel Individual Company Projections 

for 2014–2016 (CBI)’’, memorandum from Dallas 

Burkholder to EPA Air Docket EPA–HQ–OAR– 

2015–0111. 

produced any cellulosic biofuel in the 

previous 12 months, we believe it is 

appropriate to use zero as the low end 

of the projected production range given 

the many uncertainties and challenges 

associated with the commissioning and 

start-up of a new cellulosic biofuel 

production facility we have observed to 

date. 

To determine the high end of the 

range of expected production volumes 

for each company we considered a 

variety of factors, including the 

expected start-up date and ramp-up 

period, facility capacity, and fuel offtake agreements. As a starting point, 

EPA calculated a production volume 

using the expected start-up date, facility 

capacity, and a benchmark of a sixmonth straight-line ramp-up period 

representing an optimistic ramp-up 

scenario.118 We then compared the 

volume calculated using this 

methodology to the company’s own 

expectations for the period in which we 

are projecting production where they 

were available. We are proposing that 

any company projection that exceeds 

our benchmark volume not be used for 

developing the high end of the range of 

expected production volumes. If the 

production estimate EPA received from 

a company was lower than the volume 

calculated using the projected start-up 

date, facility capacity, and six month 

straight-line ramp-up period, EPA used 

the company production targets instead. 

While we understand that many of these 

company projections represent the 

company’s actual expectations for 

production, rather than a goal or high 

end of an expected production range, 

we do not believe it would be 

appropriate to ignore the history of the 

cellulosic biofuel industry. In previous 

years EPA has gathered information, 

including volume production 

projections, from companies with the 

potential to produce cellulosic biofuel. 

Each of these companies supported 

these projections with successful pilotand demonstration-scale facilities as 

well as other supporting documentation. 

In each of these cases the companies 

were unable to meet their own volume 

projections, and in many cases were 

unable to produce any RIN-generating 

cellulosic biofuel. 

The inability of cellulosic biofuel 

producers in previous years to achieve 

their projection production targets does 

not provide a sufficient basis for 

completely discounting production of 

cellulosic biofuel in future years, either 

for these same facilities that were 

previously unable to achieve their target 

projections or from new facilities 

expected to start-up in 2015 or 2016. 

Each of these companies is an 

individual case, with their own 

production technologies, construction 

and operations staffs, and financial 

situations, and we do not believe it is 

appropriate to dismiss all future 

potential cellulosic biofuel production 

because of the failure of several facilities 

to successfully operate at commercial 

scale. We do believe it strongly suggests 

that we should view the individual 

company projections as something other 

than the most likely outcomes. In order 

to take a ‘‘neutral aim at accuracy’’ in 

projecting cellulosic biofuel production 

volumes, as directed by the United 

States Court of Appeals for the DC 

Circuit, we have decided to treat these 

company projections as the high end of 

a potential production range unless this 

volume exceeds the volume calculated 

using our six-month straight-line rampup period methodology, suggesting that 

these company projections are 

unreasonably high. We will continue to 

monitor the progress and experience of 

the cellulosic biofuel industry and may 

adjust our approach as appropriate in 

light of additional experience. 

We believe our range of projected 

production volumes for each company 

represents the range of what is likely to 

actually happen for each company. A 

brief overview of each of the companies 

we believe will produce cellulosic 

biofuel and make it commercially 

available in 2015 can be found in a 

memorandum to the docket.119 In the 

case of cellulosic biofuel produced from 

CNG/LNG we have discussed the 

production potential from these 

facilities as a group rather than 

individually. EPA believes it is 

appropriate to discuss these facilities as 

a group since they are utilizing a proven 

production technology and face many of 

the same challenges related to 

demonstrating that the fuel they 

produce is used as transportation fuel 

and therefore eligible to generate RINs 

under the RFS program.120

After establishing a projected 

production range for each facility (or 

group of facilities for CNG/LNG 

producers), we must then determine a 

method for using these projected 

production ranges to project the volume 

of cellulosic biofuel most likely to be 

produced by the cellulosic biofuel 

industry as a whole in 2015. As 

discussed above, the high and the low 

end of the range for each company 

represents values such that it is possible 

but unlikely that actual volumes would 

fall outside of those ranges. At present, 

data does not exist to allow EPA to 

develop a unique production probability 

distribution for each company based on 

the available information. Even if EPA 

were able to undertake such a task there 

is no evidence that the distributions we 

developed would necessarily be more 

accurate than a standardized 

distribution curve as the cellulosic 

biofuel industry is still in its infancy 

and there is a high degree of uncertainty 

associated with many of the factors that 

will impact production at each 

individual facility. This is supported by 

the poor accuracy of the individual 

company estimates in previous years, 

which were made by individuals with 

significant technical expertise and 

knowledge of each individual company 

and technology. 

Rather than attempting to develop a 

unique probability distribution curve 

that represents likely cellulosic biofuel 

production for each company, EPA has 

instead separated the list of potential 

cellulosic biofuel producers into two 

groups; those who have already 

achieved consistent commercial-scale 

production and those who have not. We 

believe grouping the potential cellulosic 

biofuel producers using the criteria of 

whether or not they have achieved 

consistent commercial-scale production 

is appropriate for the purposes of 

projecting a likely production volume. 

While each of these groupings contains 

a diverse set of companies with their 

own production technologies and 

challenges, we believe there is sufficient 

commonality in the challenges related 

to the funding, construction, 

commissioning, and start-up of 

commercial-scale cellulosic biofuel 

facilities to justify aggregating these 

company projections into a single group 

for the purposes of projecting the most 

likely production volume of cellulosic 

biofuel. The challenges new production 

facilities face are also significantly 

different than those of facilities ramping 

up production volumes to the facility 


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121While ‘‘new’’ CNG/LNG facilities may not face 

the same challenges related to start-up and scaleup there is still a significant amount of uncertainty 

related to RIN generation from facilities that have 

not yet begun generating RINs. RIN generation from 

these facilities may be delayed or reduced if they 

are unable to verify that all or a portion of the CNG/ 

LNG they produce is used as transportation fuel, or 

if they decide to sell the CNG/LNG they produce 

into non-transportation markets. These 

uncertainties can significantly impact the number 

of RINs generated by a CNG/LNG producer, and we 

therefore believe that projecting projection from 

these ‘‘new’’ facilities at the 25th percentile of the 

range is appropriate. 

capacity and maintaining consistent 

production. After separating the 

companies into these two groups we 

then summed the low and high ends of 

each of the ranges for each individual 

company (or group of companies for 

CNG/LNG producers) within the group 

to calculate an aggregate projected 

production range for each group of 

companies. The ranges for each group of 

companies are shown in Tables IV.D–2 

and IV.D–3 below. 

TABLE IV.D–2—2015 PRODUCTION RANGES FOR COMPANIES WITHOUT CONSISTENT COMMERCIAL SCALE PRODUCTION

[Million gallons] 

Low end of the 

range a

High end of the 

range a

Abengoa ........................................................................................................................................................... 0 12 

CNG/LNG Producers (New Facilities) ............................................................................................................. 0 37 

CoolPlanet ....................................................................................................................................................... 0 0 

DuPont ............................................................................................................................................................. 0 5 

Edeniq .............................................................................................................................................................. 0 1 

Ineos BIO ......................................................................................................................................................... 0 4 

Poet .................................................................................................................................................................. 0 4 

Total .......................................................................................................................................................... 0 63 

a Rounded to the nearest million gallons. 

TABLE IV.D–3—2015 PRODUCTION RANGES FOR COMPANIES WITH CONSISTENT COMMERCIAL SCALE PRODUCTION

[Million gallons] 

Low end of the 

range a

High end of the 

range a

CNG/LNG Producers (Currently generating RINs) ......................................................................................... bX 88 

Ensyn ............................................................................................................................................................... bX 1 

Quad County Corn Processors ....................................................................................................................... bX 2 

Total .......................................................................................................................................................... c 49 91 

a Rounded to the nearest million gallons. 

bThe low end of the range for each individual company is based on actual production volumes and is therefore withheld to protect information 

claimed to be confidential business information. cThis number includes all cellulosic biofuel and cellulosic diesel RINs generated in the previous 12 months, as well as all advanced biofuel 

RINs generated for CNG/LNG derived from biogas prior to August 18, 2014 and within the last 12 months. 

Because the cellulosic biofuel 

industry is still in its infancy and it is 

therefore not possible to predict with 

any degree of certainty the precise 

production volume each individual 

company will achieve, we believe that 

it would not be appropriate to choose a 

specific value within the projected 

range for each individual company/

source. We believe it is more 

appropriate to identify a specific value 

within the aggregated ranges from 

Tables IV.D–2 and IV.D–3 that best 

reflects the likely production volume for 

each group of companies. For 

companies that have not yet achieved 

consistent commercial-scale production 

(Table IV.D–2) we are proposing to use 

the 25th percentile of the projected 

production range. We believe this 

volume is appropriate as, in addition to 

the uncertainties listed above, there is 

also significant technology risk as these 

facilities attempt to operate their 

technologies at commercial scale. In the 

early years of the cellulosic biofuel 

industry several companies, including 

Cello Energy, Range Fuels, and KiOR 

experienced significant technical 

difficulties in scaling up their 

technologies and were able to produce 

little, if any, volumes of cellulosic 

biofuels. It is necessary to consider this 

history when projecting production 

volumes from companies who have not 

yet achieved consistent production at 

commercial scale.121

For the group of companies that have 

achieved consistent commercial-scale 

production (Table IV.D–3) we are 

proposing to use the mid-point (50th 

percentile) of the projected range. We 

believe that this point accounts for the 

uncertainty related to the scale-up of 

production from the volume produced 

in the previous 12 months (through 

March 2015) as well as other 

uncertainties related to the generation of 

RINs such as documenting that the fuel 

is used as transportation fuel, heating 

oil, or jet fuel. This is not to say that we 

anticipate that each of these facilities 

within each group will produce at the 

25th or 50th percentile, but rather that 

as a group the 25th and 50th percentile, 

respectively, are realistic projections for 

each group of companies. We believe 

this methodology accounts for the fact 

that some individual company may be 

able to deliver the volume of cellulosic 

biofuel they expect and produce at or 

near the high end of the range, while 

others may experience difficulty 

transitioning to commercial production 

and produce closer to the low end of the 

range. The result of applying this 

methodology is shown in Table IV.D–4 

below. 


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122We are projecting that facilities that begin 

producing commercial-scale volumes by July 2015 

will achieve consistent production by the end of 

2015. This is consistent with the approach used to 

project volumes for 2015 where we separated 

companies into two groups based on whether or not 

they have achieved consistent commercial-scale 

production. For the final rule we intend to assess 

whether or not the facilities in our projected 

volumes have achieved consistent commercial-scale 

production and will re-categorize them as 

necessary. 

TABLE IV.D–4—PROJECTED VOLUME OF CELLULOSIC BIOFUEL IN 2015 FOR MONTHS WITHOUT PRODUCTION DATA

[Million gallons] a

Low end of the 

range b

High end of 

the range b Percentile Projected volume b

Companies without consistent commercial-scale production .......................... 0 63 25th 16 

Companies with consistent commercial-scale production ............................... 49 91 50th 70 

Total .......................................................................................................... N/A N/A N/A 86 

aThe projections in this table are for April 2015—December 2015. The low end of the range is equal to the number of RINs produced by the 

companies over the most recent 12 months for which data is available multiplied by a factor of 0.75 (since it is only a projection for 9 months of 

the year). The high end of the range is based on projected production for the final 9 months of 2015. b Rounded to the nearest million gallons. 

EPA anticipates that if the same 

methodology is used in future years that 

as cellulosic biofuel companies 

successfully achieve commercial scale 

production, application of this 

methodology will appropriately 

generate increasing volume projections, 

both for the individual companies and 

for the industry as a whole. This will 

happen in two ways. First, as companies 

successfully produce cellulosic biofuel 

the low end of the range (which is based 

on the most recent 12 months of 

production for which data is available) 

will increase. Second, we would use the 

50th percentile value, rather than the 

25th percentile, for all companies who 

have achieved consistent commercialscale production. If merited by the 

available data, we will also consider 

using a higher (or lower) percentile for 

both new facilities and facilities that 

have already achieved consistent 

commercial-scale production. We will 

consider comments on this matter, and 

after establishing percentile values for 

use in this rulemaking we expect we 

will annually review the percentile 

values and adjust them as appropriate, 

taking into account the success of past 

projections, to ensure that our 

methodology produces a production 

projection that takes a neutral aim at 

accuracy. As new pathways for the 

production of cellulosic biofuel are 

approved, we will also consider 

volumes produced using these pathways 

in our projections. 

The final step in projecting the 

potentially available volume of 

cellulosic biofuel in 2015 is to combine 

the volumes of cellulosic biofuel 

actually produced in months for which 

data is available with the projected 

production volumes for the remaining 

months of 2015. This is shown in Table 

IV.D–5 below. For 2015 we are 

proposing a cellulosic biofuel standard 

of 106 million gallons. We request 

comment on the methodology used to 

project cellulosic biofuel volumes in 

2015, as well as the general 

methodology used to project future 

cellulosic biofuel production. 

TABLE IV.D–5—PROJECTED AVAILABLE CELLULOSIC BIOFUEL IN 2015 

Million gallons 

Cellulosic Biofuel Production (Jan. 2015–March 2015) ...................................................................................................................... 20 

Projected Cellulosic Biofuel Production (April 2015–December 2015) ............................................................................................... 86 

Projected Available Volume of Cellulosic Biofuel in 2015 .................................................................................................................. 106 

E. Cellulosic Biofuel Volume for 2016 

To project the volume of potentially 

available cellulosic biofuel in 2016 we 

are proposing to use a methodology very 

similar to the one proposed for 

projecting cellulosic biofuel production 

in 2015 for months in which actual 

production data was not available. For 

2016 we separated the list of potential 

producers of cellulosic biofuel into two 

groups according to whether or not the 

facilities have already begun producing 

commercial-scale volumes of cellulosic 

biofuel or who are expected to do so by 

July 1, 2015 (See Table IV.E–1 and Table 

IV.E–2).122 We next defined a range of 

likely production volumes for each 

group of potential cellulosic biofuel 

producers. The low end of the range for 

each group of producers is intended to 

reflect actual production data. Rather 

than simply use the most recent 12 

months for which information is 

currently available for each company, 

however, we are proposing to project 

what that data will be at the time of our 

final rule. We used zero as the low end 

of the aggregated projected production 

range for 2016 for facilities expected to 

begin producing fuel after July 1, 2015 

(Table IV.E–1). We used our projected 

production volume for 2015 (106 

million gallons) as the low end of the 

aggregated range for facilities expected 

to be producing commercial-scale 

volumes of cellulosic biofuel on or 

before July 1, 2015 (Table IV.E–2). This 

is consistent with the approach we used 

to project volumes for 2015 where we 

set the low end of the range for each 

group of companies at the volume 

produced over the preceding 12 months, 

as we believe very little of the volume 

produced in 2015 will come from 

facilities starting up after July 1, 2015 

and the vast majority of cellulosic 

biofuel production in 2016 will come 

from facilities that begin before this 

date. We also believe this will align our 

proposed rule more closely with the 

final rule than would be the case if we 

based our proposal only on the data 

from the most recent 12 months of data 

available to EPA at this time. For our 

final rule, we intend to update the low 

end of the projected production range 

for each company using data from the 

most recent 12 months for which data 

is available. 

To calculate the high end of the 

projected production range for each 

group of companies we considered each 

company individually (with the 

exception of the CNG/LNG producers) 

and used the same methodology in 2016 


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123API v. EPA, 706 F 3d 474 (D.C. Cir. January 

25, 2013). 

as for the months in 2015 for which 

actual past production data was not 

available (this methodology is covered 

in further detail in Section IV.D above). 

The high end of the range for each 

company within each group was added 

together to calculate the high end of the 

projected production range for that 

group. 

After defining likely production 

ranges for each group of companies we 

projected a likely production volume 

from each group of companies for 2016. 

We projected a total production volume 

from the companies that we do not 

anticipate will begin commercial-scale 

production by July 1, 2015 using the 

25th percentile of the projected 

production range (Table IV.E–1). For the 

companies that have already achieved 

consistent commercial-scale production 

or anticipate starting commercial-scale 

production by July 1, 2015, we used the 

50th percentile of the aggregate 

projected production range (Table IV.E– 

2). This is consistent with the approach 

we used for projecting volumes in 2015, 

which is discussed in more detail in the 

preceding section. We intend to reevaluate our categorization of the 

companies for the final rule using the 

most up to date information available. 

TABLE IV.E–1—2016 PRODUCTION RANGES FOR COMPANIES WITH START-UP DATES AFTER JULY 1, 2015 

[Million gallons] 

Low end of the 

range a

High end of the 

range a

CNG/LNG Producers (New Facilities) ............................................................................................................. 0 120 

CoolPlanet ....................................................................................................................................................... 0 0 

DuPont ............................................................................................................................................................. 0 29 

Edeniq .............................................................................................................................................................. 0 14 

Poet .................................................................................................................................................................. 0 20 

Aggregate Range ............................................................................................................................................. 0 183 

Projected Production (25th Percentile of Range) ............................................................................................ 46 

a Rounded to the nearest million gallons. 

TABLE IV.E–2—2016 PRODUCTION RANGES FOR COMPANIES WITH CONSISTENT COMMERCIAL SCALE PRODUCTION OR

START-UP DATES BEFORE JULY 1, 2015 

[Million gallons] 

Low end of the 

range a

High end of the 

range a

Abengoa ........................................................................................................................................................... N/A 19 

CNG/LNG Producers (Existing Facilities) ........................................................................................................ N/A 185 

Ensyn ............................................................................................................................................................... N/A 3 

Ineos BIO ......................................................................................................................................................... N/A 6 

Quad County Corn Processors ....................................................................................................................... N/A 2 

Aggregate Range ............................................................................................................................................. 106 215 

Projected Production (50th Percentile of Range) ............................................................................................ 161 

a Rounded to the nearest million gallons 

The final step in projecting the 

potentially available volume of 

cellulosic biofuel in 2016 is to combine 

the volumes of cellulosic biofuel 

projected to be produced from each of 

the two groups discussed above (shown 

in Table IV.E–3 below). For 2016 we are 

proposing a cellulosic biofuel volume 

requirement of 204 million gallons. For 

our final rule we will use the most 

recent production data and company 

information available to update our 

projections. We request comment on the 

methodology and data used to project 

cellulosic biofuel volumes in 2016. 

TABLE IV.E–3—PROJECTED VOLUME OF CELLULOSIC BIOFUEL IN 2016 

[Million gallons] 

Low end of the 

range a

High end of 

the range a Percentile Projected volume a

Companies beginning production after July 1, 2015 ....................................... 0 183 25th 46 

Companies beginning production before July 1, 2015 .................................... 106 215 50th 161 

Total .......................................................................................................... N/A N/A N/A 206 

aVolumes rounded to the nearest million gallons. 

F. Rescission of the 2011 Cellulosic 

Biofuel Standards 

On January 25, 2013, the United 

States Court of Appeals for the District 

of Columbia Circuit issued its decision 

concerning a challenge to the 2012 

cellulosic biofuel standard.123 The Court 

found that in establishing the applicable 

volume of cellulosic biofuel for 2012, 

EPA had used a methodology in which 

‘‘the risk of overestimation [was] set 

deliberately to outweigh the risk of 

underestimation.’’ The Court held EPA’s 


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action to be inconsistent with the statute 

because EPA had failed to apply a 

‘‘neutral methodology’’ aimed at 

providing a prediction of ‘‘what will 

actually happen,’’ as required by the 

statute. As a result of this ruling, the 

Court vacated the 2012 cellulosic 

biofuel standard, and we removed the 

2012 requirement from the regulations 

in a previous action. Industry had also 

challenged the 2011 cellulosic biofuel 

standard by, first, filing a petition for 

reconsideration of that standard, and 

then seeking judicial review of our 

denial of the petition for 

reconsideration. This matter was still 

pending at the time of the DC Circuit’s 

ruling on the 2012 cellulosic biofuel 

standard. Since we used essentially the 

same methodology to develop the 2011 

cellulosic biofuel standard as we did to 

develop the 2012 standard, we 

requested, and the Court granted, a 

partial voluntary remand to enable us to 

reconsider our denial of the petition for 

reconsideration of the 2011 cellulosic 

biofuel standard. Given the Court’s 

ruling that the methodology EPA used 

in developing the 2012 cellulosic 

biofuel standard was flawed, we are 

proposing to rescind the 2011 cellulosic 

biofuel applicable standard and refund 

the money paid by obligated parties to 

purchase cellulosic waiver credits to 

comply with the standard. 

V. Percentage Standards 

A. Background 

The renewable fuel standards are 

expressed as volume percentages and 

are used by each obligated party to 

determine their Renewable Volume 

Obligations (RVO). Since there are four 

separate standards under the RFS 

program, there are likewise four 

separate RVOs applicable to each 

obligated party. Each standard applies 

to the sum of all gasoline and diesel 

produced or imported. The percentage 

standards are set so that if every 

obligated party meets the percentages, 

then the amount of renewable fuel, 

cellulosic biofuel, biomass-based diesel 

(BBD), and advanced biofuel used will 

meet the applicable volumes established 

in this rule on a nationwide basis. 

Sections II, III, and IV provide our 

rationale and basis for the proposed 

volumes for advanced biofuel and total 

renewable fuel, BBD, and cellulosic 

biofuel, respectively. The volumes to be 

used to determine the four proposed 

percentage standards are shown in 

Table V.A–1. 

TABLE V.A–1—PROPOSED VOLUMES FOR USE IN SETTING THE APPLICABLE PERCENTAGE STANDARDS

2014 2015 2016 

Cellulosic biofuel (million gallons) ......................................................................................... 33 106 206 

Biomass-based diesel (billion gallons) a ................................................................................ 1 .63 1 .70 1 .80 

Advanced biofuel (billion gallons) .......................................................................................... 2 .68 2 .90 3 .40 

Renewable fuel (billion gallons) ............................................................................................. 15.93 16 .30 17 .40 

a Represents physical volume. 

B. Calculation of Standards 

1. How Are the Standards Calculated? 

The following formulas are used to 

calculate the four percentage standards 

applicable to producers and importers 

of gasoline and diesel (see 40 CFR 

80.1405): 

Where: 

StdCB,i = The cellulosic biofuel standard for 

year i, in percent. 

StdBBD,i = The biomass-based diesel standard 

(ethanol-equivalent basis) for year i, in 

percent. 

StdAB,i = The advanced biofuel standard for 

year i, in percent. 


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124Monthly values from EIA’s May 2015 ShortTerm Energy Outlook (STEO) were used to project 

gasoline and diesel volumes for this proposal. 

126 75 FR 14716, March 26, 2010. 

127To determine the 49-state values for gasoline 

and diesel, the amounts of these fuels used in 

Alaska is subtracted from the totals provided by 

DOE. The Alaska fractions are determined from the 

June 27, 2014 EIA State Energy Data System (SEDS), 

Energy Consumption Estimates. 

StdRF,i = The renewable fuel standard for year 

i, in percent. 

RFVCB,i = Annual volume of cellulosic 

biofuel required by section 211(o) of the 

Clean Air Act for year i, in gallons. 

RFVBBD,i = Annual volume of biomass-based 

diesel required by section 211(o) of the 

Clean Air Act for year i, in gallons. 

RFVAB,i = Annual volume of advanced 

biofuel required by section 211(o) of the 

Clean Air Act for year i, in gallons. 

RFVRF,i = Annual volume of renewable fuel 

required by section 211(o) of the Clean 

Air Act for year i, in gallons. 

Gi = Amount of gasoline projected to be used 

in the 48 contiguous states and Hawaii, 

in year i, in gallons. 

Di = Amount of diesel projected to be used 

in the 48 contiguous states and Hawaii, 

in year i, in gallons. This value excludes 

diesel used in ocean-going vessels. 

RGi = Amount of renewable fuel blended into 

gasoline that is projected to be consumed 

in the 48 contiguous states and Hawaii, 

in year i, in gallons. 

RDi = Amount of renewable fuel blended into 

diesel that is projected to be consumed 

in the 48 contiguous states and Hawaii, 

in year i, in gallons. 

GSi = Amount of gasoline projected to be 

used in Alaska or a U.S. territory in year 

i if the state or territory opts-in, in 

gallons. 

RGSi = Amount of renewable fuel blended 

into gasoline that is projected to be 

consumed in Alaska or a U.S. territory in 

year i if the state or territory opts-in, in 

gallons. 

DSi = Amount of diesel projected to be used 

in Alaska or a U.S. territory in year i if 

the state or territory opts-in, in gallons. 

RDSi = Amount of renewable fuel blended 

into diesel that is projected to be 

consumed in Alaska or a U.S. territory in 

year i if the state or territory opts-in, in 

gallons. 

GEi = Amount of gasoline projected to be 

produced by exempt small refineries and 

small refiners in year i, in gallons, in any 

year they are exempt per §§ 80.1441 and 

80.1442, respectively. 

DEi = Amount of diesel projected to be 

produced by exempt small refineries and 

small refiners in year i, in gallons, in any 

year they are exempt per §§ 80.1441 and 

80.1442, respectively. 

The formulas used in deriving the 

annual percentage standards rely on 

estimates of the volumes of gasoline and 

diesel fuel, for both highway and 

nonroad uses, that are projected to be 

used in the year in which the standards 

will apply.124 The projected gasoline 

and diesel volumes obtained from EIA 

include ethanol and biodiesel used in 

transportation fuel, which are 

subtracted out as indicated in the 

equations above. Production of other 

transportation fuels, such as natural gas, 

propane, and electricity from fossil 

fuels, is not currently subject to the 

standards, and volumes of such fuels are 

not used in calculating the annual 

standards. Since under the regulations 

the standards apply only to producers 

and importers of gasoline and diesel, 

these are the transportation fuels used to 

set the standards, as well as to 

determine the annual volume 

obligations of an individual gasoline or 

diesel producer or importer. 

2. Small Refineries and Small Refiners 

In CAA section 211(o)(9), enacted as 

part of the Energy Policy Act of 2005, 

Congress provided a temporary 

exemption to small refineries 125

through December 31, 2010. Congress 

provided that small refineries could 

receive a temporary extension of the 

exemption beyond 2010 based on an 

EPA determination of disproportionate 

economic hardship on a case-by-case 

basis in response to refiner petitions. 

EPA has granted some exemptions 

pursuant to this process in the past, and 

has granted exemptions for three small 

refineries for 2014. The proposed 

applicable percentage standards for 

2014 reflect the fact that the gasoline 

and diesel volumes associated with 

these three small refineries has been 

exempted. However, at this time, no 

exemptions have been approved for 

2015 or 2016, and we have calculated 

the percentage standards for these years 

without a small refinery/small refiner 

adjustment. Any requests for 

exemptions for 2014, 2015 or 2016 that 

are approved prior to the final rule will 

be reflected in the relevant standards in 

the final rule, as provided in the 

formulas described in the preceding 

section. Any requests for exemption that 

are approved after the release of the 

final 2014, 2015, and 2016 standards 

will not affect those standards. 

3. Proposed Standards 

As specified in the RFS2 proposed 

rule,126 the percentage standards are 

based on energy-equivalent gallons of 

renewable fuel, with the cellulosic 

biofuel, advanced biofuel, and total 

renewable fuel standards based on 

ethanol equivalence and the BBD 

standard based on biodiesel 

equivalence. However, all RIN 

generation is based on ethanolequivalence. For example, the RFS 

regulations provide that production or 

import of a gallon of qualifying 

biodiesel will lead to the generation of 

1.5 RINs. In order to ensure that demand 

for the required physical volume of BBD 

will be created in each year, the 

calculation of the BBD standard 

provides that the applicable physical 

volume be multiplied by 1.5. The net 

result is a BBD gallon being worth 1.0 

gallon toward the BBD standard, but 

worth 1.5 gallons toward the other 

standards. 

The levels of the percentage standards 

would be reduced if Alaska or a U.S. 

territory chooses to participate in the 

RFS program, as gasoline and diesel 

produced in or imported into that state 

or territory would then be subject to the 

standard. Neither Alaska nor any U.S. 

territory has chosen to participate in the 

RFS program at this time, and thus the 

value of the related terms in the 

calculation of the standards is zero. 

Note that because the gasoline and 

diesel volumes estimated by EIA 

include renewable fuel use, we must 

subtract the total renewable fuel 

volumes from the total gasoline and 

diesel volumes to get total nonrenewable gasoline and diesel volumes. 

The values of the variables described 

above are shown in Table V.B.3–1.127

TABLE V.B.3–1—VALUES FOR TERMS IN CALCULATION OF THE PROPOSED STANDARDS 128

[Billion gallons] 

Term 2014 2015 2016 

RFVCB ........................................................................................................................................................................ 0 .033 0 .106 0 .206 

RFVBBD ...................................................................................................................................................................... a 1 .67 1 .70 1 .80 

RFVAB ........................................................................................................................................................................ 2 .68 2 .90 3 .40 

RFVRF ........................................................................................................................................................................ 15 .93 16 .30 17 .40 

G ................................................................................................................................................................................ 136 .49 138 .37 137 .58 

D ................................................................................................................................................................................ 55 .21 56 .77 58 .13 


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128 Details of volumes and calculations are 

available in the docket. 

129The use of post-October 31 data for previous 

years was addressed in our 2013 Cellulosic Biofuel 

Standard rulemaking.129 As stated in that 

rulemaking, ‘‘. . . we believe it is appropriate to 

rely on EIA’s most recent reports of actual gasoline 

and diesel consumption . . . Doing so allows a 

more accurate assessment of a percentage standard 

that will help to ensure that the volume of 

cellulosic biofuel we have determined should be 

used for compliance . . . will in fact be required.’’ 

130See 75 FR 14696 (March 26, 2010). 

131EPA is not proposing a regulartory definition 

of ‘‘algae.’’ Any comments related to the definition 

of ‘‘algae’’ will be considered beyond the scope of 

this rulemaking. 

132Microbial Products of Biotechnology; Final 

Regulation Under the Toxic Substance Control Act; 

Final Rule. 62 FR 17910 (April 11, 1997). 

TABLE V.B.3–1—VALUES FOR TERMS IN CALCULATION OF THE PROPOSED STANDARDS 128—Continued 

[Billion gallons] 

Term 2014 2015 2016 

RG .............................................................................................................................................................................. 13 .43 13 .36 13 .46 

RD .............................................................................................................................................................................. 1 .54 1 .44 1 .53 

GS .............................................................................................................................................................................. 0 0 0 

RGS ........................................................................................................................................................................... 0 0 0 

DS .............................................................................................................................................................................. 0 0 0 

RDS ........................................................................................................................................................................... 0 0 0 

GE .............................................................................................................................................................................. 0 .01 0 .00 0 .00 

DE .............................................................................................................................................................................. 0 .04 0 .00 0 .00 

a Represents the biodiesel-equivalent volume of actual 2014 supply, which was 2.50 bill D4 RINs. Actual physical volume was 1.63 billion physical gallons, composed of 1.35 bill gal of biodiesel and 0.28 bill gal renewable diesel. 

Although the Act specifies that EIA 

provide EPA with gasoline and diesel 

demand for the following year ‘‘no later 

than October 31’’, we believe it is 

appropriate to use EIA demand 

projections that are more recent than 

October 31 for a given year when such 

projections are available.129 For this 

proposed rule, we have used gasoline, 

diesel, and renewable fuel consumption 

estimates available in the most recent 

version of EIA’s Short-Term Energy 

Outlook. For the final rule we will use 

projections provided by EIA as required 

by the statute. 

Using the volumes shown in Table 

V.B.3–1, we have calculated the 

proposed percentage standards for 2014, 

2015, and 2016 as shown in Table 

V.B.3–2. 

TABLE V.B.3–2—PROPOSED PERCENTAGE STANDARDS

2014 

(%) 

2015 

(%) 

2016 

(%) 

Cellulosic biofuel ........................................................................................................................................................ 0 .019 0 .059 0 .114 

Biomass-based diesel ................................................................................................................................................ 1 .42 a 1 .41 1 .49 

Advanced biofuel ....................................................................................................................................................... 1 .52 1 .61 1 .88 

Renewable fuel .......................................................................................................................................................... 9 .02 9 .04 9 .63 

aAlthough the proposed BBD volume requirement for 2015 is higher than it is for 2014, projected volumes of gasoline and diesel are also higher in 2015 than they were for 2014. The result is that the percentage standard, rounded to two decimal places, is the same for both years. 

VI. Proposed Amendments to 

Regulations 

We are proposing several revisions to 

the RFS regulations, which are 

described below. The first proposed 

revision relates to the definition of 

terms in Table 1 to 40 CFR 80.1426, 

which describes approved biofuel 

production pathways. The second set of 

revisions would address annual 

compliance reporting and associated 

attest reporting deadlines. We request 

comment on all aspects of these 

proposed amendments. 

A. Proposed Changes to the Algal 

Biofuel Pathways 

In the March 2010 RFS rule (75 FR 

14670), EPA established two pathways 

for biofuels derived from algae to 

generate D-Code 4 (Biomass-Based 

Diesel) or 5 (Advanced) RINs. The 

pathways approved in the March 2010 

RFS rule assumed that algae would be 

grown photosynthetically (i.e., using 

predominantly sunlight and CO2 as 

inputs) and harvested for their oil.130

Biofuel produced with algae grown 

through other means is likely to have 

different lifecycle GHG emissions 

impacts. The EPA has recently received 

an inquiry regarding production of 

biofuel from algae grown nonphotosynthetically, and we believe it 

would be appropriate to clarify that the 

algal oil pathways adopted as part of the 

March 2010 RFS rule do not apply to 

such algae. Therefore, we are proposing 

to replace ‘‘algal oil’’ as a feedstock in 

Table 1 to 40 CFR 80.1426 with ‘‘oil 

from algae grown photosynthetically.’’ 

We are also proposing to add a new 

definition for ‘‘algae grown 

photosynthetically’’ to 40 CFR 80.1401. 

We do not anticipate this definition will 

impact current renewable fuel 

production under the existing pathway. 

Companies wishing to produce biofuels 

from algae grown with a nonphotosynthetic stage of growth must 

apply to EPA for approval of their 

pathway pursuant to 40 CFR 80.1416. 

We invite comment on these proposed 

changes.131

We also note that any companies 

wishing to produce fuel using 

genetically modified algae must 

conform to all other appropriate EPA 

regulations. For example, EPA’s Office 

of Pollution Prevention and Toxics 

(OPPT) Biotechnology Program 

regulates the use of new geneticallyengineered microorganisms (including 

bacteria, fungi, algae, viruses, protozoa, 

etc.) that are used in the production of 

biofuels under Section 5 of the Toxic 

Substances Control Act (TSCA).132

B. Annual Compliance Reporting and 

Attest Engagement Deadlines Under the 

RFS Program 

The RFS regulations establish 

deadlines for parties with renewable 

volume obligations (obligated parties 

and renewable fuel exporters) to submit 


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133 78 FR 49823, August 15, 2013. 134 79 FR 42078. 

135We are not amending the regulations as they 

pertain to exporters of renewable fuel for the 2014 

compliance period from September 17, 2014 

through December 31, 2014. We reiterate that under 

current regulations at § 80.145l(a)(1), reports 

containing an exporter’s name, registration number, 

ERVO, as well as RINs retired to satisfy the ERVO 

and any cellulosic waiver credits used for that 

period were due March 31, 2015. 

annual compliance demonstration 

reports to the EPA, and later deadlines 

for the same parties to submit associated 

attest engagement reports. A number of 

other regulated parties, including RINgenerating renewable fuel producers, 

RIN-generating renewable fuel 

importers, other parties owning RINs 

and 3rd party auditors, are also required 

to submit annual attest engagement 

reports according to a schedule 

specified in the regulations. As a result 

of the delay in issuing the RFS annual 

rules for 2014 and 2015, the EPA is 

proposing to amend certain reporting 

deadlines applicable to the 2013, 2014 

and 2015 compliance years. 

1. Obligated Parties and Renewable Fuel 

Exporters 

a. Background. 

Under existing RFS regulations (40 

CFR 80.1451(a) and 80.1464(d)), 

obligated parties and renewable fuel 

exporters must submit compliance 

demonstration reports for each calendar 

year by March 31 of the following year, 

and associated attest engagements by 

June 1 of the following year. The EPA 

has recognized that it is important for 

obligated parties preparing a 

compliance demonstration report for a 

given calendar year to have an 

understanding of their RFS obligations 

for the next compliance year.133

Therefore, in light of the delay in 

issuing the 2014 RFS annual standards, 

the EPA previously amended the 

regulations to provide that the annual 

compliance demonstration reports for 

obligated parties and exporters for the 

2013 compliance year would not be due 

until 30 days after publication in the 

Federal Register of the 2014 RFS 

percentage standards. 40 CFR 

80.1451(a)(1)(xiv). Similarly, the EPA 

extended the deadline for attest 

engagement reports for 2013 compliance 

demonstrations to 90 days after 

publication in the Federal Register of 

the 2014 RFS percentage standards. 40 

CFR 80.1464(g). Because the EPA has 

not yet issued the 2014 RFS standards, 

2013 compliance demonstration reports 

and associated attest engagement reports 

from obligated parties and renewable 

fuel exporters are not yet due. 

Although the EPA has not yet issued 

a final 2014 RFS annual rule, and the 

generally-applicable March 31 deadline 

for compliance demonstration reports 

for the 2014 compliance year has now 

passed, the EPA has not adopted 

amendments to the regulations 

applicable to 2014 compliance 

demonstration and attest engagement 

reporting as it did with respect to the 

2013 compliance year. Instead the EPA 

issued an Enviroflash on March 17, 

2015 to clarify that obligated parties are 

not required to submit compliance 

demonstration reports or associated 

attest engagements for the 2014 

compliance year until the EPA issues a 

final rule establishing the final 2014 

RFS standards and sets (in that action) 

deadlines for 2014 compliance 

demonstrations and associated attest 

engagements for obligated parties. We 

noted in the Enviroflash our 

interpretation of the current regulatory 

deadlines as being inoperative for 

obligated parties for the 2014 

compliance year because final 2014 RFS 

standards have not been established and 

it is therefore impossible for obligated 

parties to assess and demonstrate their 

compliance with the applicable 

standards. However, in that same 

Enviroflash we clarified that the 

situation is different for exporters of 

renewable fuel. Exporter renewable 

volume obligations are based on 

renewable fuel export volume, not on 

the RFS percentage standards. Therefore 

we stated in the Enviroflash that 

renewable fuel exporters must comply 

with the operative deadlines in the 

regulations for 2014 reporting, although 

precise obligations may differ 

depending on the portion of the year 

during which exports occurred, in light 

of regulatory amendments related to the 

deadline for exporter RIN retirements 

that were adopted in the July 18, 2014 

RFS Quality Assurance Plan rule.134

The details are explained in the March 

17 Enviroflash. 

b. Proposal. 

The Agency now believes that setting 

a firm calendar date for 2013 

compliance and attest engagement 

reports is preferable to the current 

approach of tying the deadlines for 2013 

reporting to the date of publication of 

the 2014 annual rule in the Federal 

Register. The EPA seeks to establish 

reporting deadlines for three calendar 

years, and establishing firm deadlines 

for 2013 reporting will allow the EPA to 

sequence and time reports for 

subsequent years in a reasonable 

manner that reduces uncertainty. 

i. Obligated Parties 

We are proposing that compliance 

demonstration reports for obligated 

parties be submitted no later than 

January 31, 2016 for the 2013 

compliance year, June 1, 2016 for the 

2014 compliance year, and December 1, 

2016 for the 2015 compliance year. 

Associated attest engagement reports 

would be due no later than June 1, 2016 

for the 2013 compliance year, December 

1, 2016 for the 2014 compliance year, 

and June 1, 2017 for the 2015 

compliance year. We believe that this 

sequencing of reports, and the time 

allowed between them will allow 

obligated parties to proceed in a logical 

and orderly fashion to submit required 

reports, with sufficient intervening time 

so as not to pose an unreasonable 

burden. 

ii. Exporters 

For exporters of renewable fuel, we 

are proposing the same amendments to 

2013 compliance year reporting 

deadlines as for obligated parties— 

annual compliance demonstration 

reports would be due no later than 

January 31, 2016, and associated attest 

engagement reports would be due no 

later than June 1, 2016. For 2014, the 

issue is more complex. For the 2014 

compliance period from January 1, 2014 

through September 16, 2014, partial 

annual compliance reports containing 

an exporter’s name, registration number, 

and renewable volume obligation 

(ERVO) for that period were required to 

be submitted no later than March 31, 

2015 as currently proscribed in the 

regulations under § 80.1451(a)(1).135 For 

the 2014 compliance period from 

January 1, 2014 through September 16, 

2014, we are proposing that full annual 

compliance reports containing an 

exporter’s name, registration number, 

ERVO, as well as RINs retired to satisfy 

the ERVO and any cellulosic waiver 

credits used for that period be submitted 

no later than January 31, 2016, and that 

associated attest engagements be due no 

later than June 1, 2016. For the 2015 

compliance year, full compliance 

reports will be due on March 31, 2016, 

as required by existing § 80.1451(a)(1), 

and associated attest engagements will 

be due by June 1, 2016 as required by 

§ 80.1464(d). 

2. Other Parties 

a. Background 

Following issuance of the March 17, 

2015 Enviroflash to address reporting 

deadlines for obligated parties and 

renewable fuel exporters for the 2014 

compliance year, the Agency received 

comments from attest engagement 


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136The EPA provided guidance regarding the 

2014 attest engagement reporting deadlines for 

renewable fuel exporters in its March 17, 2015 

Enviroflash. 

137Regarding independent third-party auditors, 

we permitted some independent third-party 

auditors to begin compliance with the final RFS 

Quality Assurance Program requirements before the 

January 1, 2015 effective date for the Q–RIN 

program. These independent third-party auditors 

were allowed to participate in the Q–RIN program 

beginning September 16, 2014 and would have been 

required to report RIN verification activities to the 

EPA by March 31, 2015. Since the information 

collection request was not approved prior to the 

March 31, 2015 deadline, the EPA has allowed 

independent third-party auditors that adopted the 

Q–RIN program early to report RIN verification 

activities to the EPA with the first quarter 2015 

reports due June 1, 2015. Therefore, since 

independent third-party auditor annual attest 

requirements are dependent upon the submission of 

the RIN verification reports to the EPA, the EPA is 

proposing that for independent third-party auditors, 

for the 2014 compliance year, the attest engagement 

reporting deadline be no later than January 31, 

2016. 

auditors concerning the June 1, 2015 

attest engagement deadline for RINgenerating renewable fuel producers, 

RIN-generating renewable fuel 

importers, other parties holding RINs, 

and independent third-party auditors. 

The auditors stated that it is impractical 

for them to perform the 2014 

compliance year attestations before 

completing the 2013 compliance year 

attestations. The auditors explained that 

they generally rely on the beginning 

balance of RINs based on attest 

procedures performed in the previous 

year. They asserted that if they have not 

attested to the ending balance of RINs 

for the 2013 compliance year, they 

cannot effectively attest to the beginning 

balance of RINs for the 2014 compliance 

year. 

The auditors also cited other reasons 

for why the 2013 and 2014 compliance 

year attestations should be revised. The 

auditors stated that there is confusion 

and uncertainty in industry about 

whether the June 1, 2015 deadline still 

applies to RIN-generating renewable 

fuel producers, RIN-generating 

renewable fuel importers, other parties 

holding RINs, and independent thirdparty auditors because they were not 

explicitly mentioned in the March 17, 

2015 Enviroflash and because the 

Agency previously issued a broader 

attest extension related to reporting 

deadlines for the 2013 compliance year 

and thus, any subsequent 

communication by the Agency would be 

expected to address all regulated 

parties. Since many parties have not yet 

completed their 2013 compliance year 

attestations because they are not 

required to do so, they do not have any 

expectation that the attestations for the 

2014 compliance year are due June 1, 

2015. 

In 2014, the EPA changed the annual 

reporting deadline for all 40 CFR part 80 

fuel programs from February 28 to 

March 31 and the attest deadline from 

May 31 to June 1. This is the first year 

that these new deadlines are in effect. 

The effects of the shorter time period 

between the annual reporting deadline 

and the deadline for attest engagement 

reports are exacerbated this year by the 

confusion surrounding the June 1, 2015 

attest reporting deadline for RINgenerating renewable fuel producers, 

RIN-generating renewable fuel 

importers, other parties holding RINs, 

and independent third-party auditors. 

Auditors need a reasonable amount of 

time to plan and execute any type of 

assurance engagement. The planning 

phase involves the evaluation of 

independence, execution of engagement 

letters, and scheduling of resources. 

In light of the confusion surrounding 

the reporting deadlines for the 2014 

compliance year for RIN-generating 

renewable fuel producers, RINgenerating renewable fuel importers, 

other parties holding RINs, and 

independent third-party auditors, the 

EPA’s Assistant Administrator for Air 

and Radiation sought a no action 

assurance from the Assistant 

Administrator for the Office of 

Enforcement and Compliance Assurance 

regarding enforcement of the 2014 

reporting deadlines for these parties. In 

response, the Office of Enforcement and 

Compliance Assurance issued a 

conditional no action assurance on May 

21, 2015 that provides, in part, as 

follows: 

the EPA will exercise its enforcement 

discretion not to pursue enforcement actions 

against a RIN-generating renewable fuel 

producer (domestic and foreign), a RINgenerating importer, any other party owning 

RINs, and an independent third-party auditor 

solely for violations of the 2014 attest 

engagement reporting deadline at 40 CFR 

§§ 80.1464(d). This No Action Assurance 

does not apply to the June 1, 2015 deadline 

for exporters of fuel to submit their reports 

for the 2014 compliance year, nor does it 

extend to any other RFS-related 

requirement.136 Furthermore, as applied to 

an individual regulated party, this No Action 

Assurance is conditioned upon the regulated 

party complying with all other RFS 

requirements applicable to it. This No Action 

Assurance will remain in effect until either 

(1) 11:59 p.m. EST, January 30, 2016, or (2) 

the effective date of a final rule addressing 

the 2014 attest engagement deadlines, 

whichever occurs earlier. 

b. Proposal 

In this action, we are proposing a new 

attest engagement reporting deadline for 

the 2013 compliance period for RINgenerating renewable fuel producers, 

RIN-generating renewable fuel 

importers, and other parties owning 

RINs of no later than January 31, 2016. 

Additionally, we are proposing the same 

attest engagement reporting deadline of 

January 31, 2016 for these parties and 

for independent third-party auditors for 

the 2014 compliance year.137 With 

respect to the 2015 compliance year, the 

EPA is not proposing to amend the 

current regulations; attest engagement 

reports for these parties for the 2015 

compliance year are due on June 1, 

2016. 

Given the many different reporting 

schedules across the 2013, 2014, and 

2015 compliance years that the Agency 

is proposing for obligated parties, 

exporters, RIN generating renewable 

fuel producers and importers, 

independent third-party auditors, and 

other parties owning RINs, and the 

multiple considerations the Agency is 

trying to balance across regulated 

parties, we seek comment on whether 

the proposed deadlines are appropriate 

and for whether there are other specific 

considerations that the Agency should 

evaluate when establishing the 2013, 

2014, and 2015 annual compliance and 

attest engagement reporting deadlines. 

VII. Public Participation 

We request comment on all aspects of 

this proposal. This section describes 

how you can participate in this process. 

A. How do I submit comments? 

We are opening a formal comment 

period by publishing this document. We 

will accept comments during the period 

indicated under the DATES section. If 

you have an interest in the proposed 

standards, we encourage you to 

comment on any aspect of this 

rulemaking. We also request comment 

on specific topics identified throughout 

this proposal. 

Your comments will be most useful if 

you include appropriate and detailed 

supporting rationale, data, and analysis. 

Commenters are especially encouraged 

to provide specific suggestions for any 

changes that they believe need to be 

made. You should send all comments, 

except those containing proprietary 

information, to our Air Docket (see 

ADDRESSES section) by the end of the 

comment period. 

You may submit comments 

electronically, by mail, or through hand 

delivery/courier. To ensure proper 

receipt by EPA, identify the appropriate 

docket identification number in the 

subject line on the first page of your 

comment. Please ensure that your 

comments are submitted within the 

specified comment period. Comments 


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received after the close of the comment 

period will be marked ‘‘late.’’ EPA is not 

required to consider these late 

comments. If you wish to submit 

Confidential Business Information (CBI) 

or information that is otherwise 

protected by statute, please follow the 

instructions in Section VII.B below. 

B. How should I submit CBI to the 

Agency? 

Do not submit information that you 

consider to be CBI electronically 

through the electronic public docket, 

www.regulations.gov, or by email. Send 

or deliver information identified as CBI 

only to the following address: U.S. 

Environmental Protection Agency, 

Assessment and Standards Division, 

2000 Traverwood Drive, Ann Arbor, MI, 

48105, Attention Docket ID EPA–HQ– 

OAR–2013–0479. You may claim 

information that you submit to EPA as 

CBI by marking any part or all of that 

information as CBI (if you submit CBI 

on disk or CD ROM, mark the outside 

of the disk or CD ROM as CBI and then 

identify electronically within the disk or 

CD ROM the specific information that is 

CBI). Information so marked will not be 

disclosed except in accordance with 

procedures set forth in 40 CFR part 2. 

In addition to one complete version of 

the comments that include any 

information claimed as CBI, a copy of 

the comments that does not contain the 

information claimed as CBI must be 

submitted for inclusion in the public 

docket. This non-CBI version of your 

comments may be submitted 

electronically, by mail, or through hand 

delivery/courier. If you submit the copy 

that does not contain CBI on disk or CD 

ROM, mark the outside of the disk or CD 

ROM clearly that it does not contain 

CBI. Information not marked as CBI will 

be included in the public docket 

without prior notice. If you have any 

questions about CBI or the procedures 

for claiming CBI, please consult the 

person identified in the FOR FURTHER

INFORMATION CONTACT section. 

VIII. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

This action is an economically 

significant regulatory action that was 

submitted to the Office of Management 

and Budget (OMB) for review. Any 

changes made in response to OMB 

recommendations have been 

documented in the docket. The EPA 

prepared an analysis of the potential 

costs and benefits associated with this 

action. This analysis is presented in 

Sections II.G and III.E of this preamble. 

B. Paperwork Reduction Act (PRA) 

This action does not impose any new 

information collection burden under the 

PRA. OMB has previously approved the 

information collection activities 

contained in the existing regulations 

and has assigned OMB control numbers 

2060–0637 and 2060–0640. The 

proposed standards would not impose 

new or different reporting requirements 

on regulated parties than already exist 

for the RFS program. 

C. Regulatory Flexibility Act (RFA) 

I certify that this action will not have 

a significant economic impact on a 

substantial number of small entities 

under the RFA. In making this 

determination, the impact of concern is 

any significant adverse economic 

impact on small entities. An agency may 

certify that a rule will not have a 

significant economic impact on a 

substantial number of small entities if 

the rule relieves regulatory burden, has 

no net burden, or otherwise has a 

positive economic effect on the small 

entities subject to the rule. The small 

entities directly regulated by the RFS 

program are small refiners, which are 

defined at 13 CFR 121.201 as refiners 

with 1,500 employees or less companywide. 

EPA has conducted a screening 

analysis to assess whether it should 

make a finding that there would be no 

significant economic impact on a 

substantial number of small entities. We 

discuss this analysis below. The impacts 

of the RFS program on small entities 

were already addressed in the March 26, 

2010 RFS2 rulemaking (75 FR 14670), 

which was a rule that implemented the 

entire program required by the Energy 

Independence and Security Act of 2007 

(EISA 2007). As such, the Small 

Business Regulatory Enforcement 

Fairness Act (SBREFA) panel process 

that took place prior to the 2010 rule 

was also for the entire RFS program and 

looked at impacts on small refiners 

through 2022. 

For the SBREFA process for the 

March 26, 2010 RFS2 rulemaking, EPA 

conducted outreach, fact-finding, and 

analysis of the potential impacts of the 

program on small refiners which are all 

described in the Final Regulatory 

Flexibility Analysis, located in the 

rulemaking docket (EPA–HQ–OAR– 

2005–0161). This analysis looked at 

impacts to all refiners, including small 

refiners, through the year 2022 and 

found that the program would not have 

a significant economic impact on a 

substantial number of small entities, 

and that this impact was expected to 

decrease over time, even as the 

standards increased. The analysis 

included a cost-to-sales ratio test, a ratio 

of the estimated annualized compliance 

costs to the value of sales per company, 

for gasoline and/or diesel small refiners 

subject to the standards. From this test, 

it was estimated that all small entities 

would have compliance costs that are 

less than one percent of their sales over 

the life of the program (75 FR 14862). 

This proposed rule would not impose 

any additional requirements on small 

entities beyond those already analyzed, 

since the impacts of this proposed rule 

are not greater or fundamentally 

different than those already considered 

in the analysis for the March 26, 2010 

rule assuming full implementation of 

the RFS program. As shown above in 

Tables I.A–1 and I.A–3 (and discussed 

further in Sections II and IV), this rule 

proposes to establish the 2014, 2015, 

and 2016 volume requirements for 

cellulosic biofuel, advanced biofuel, and 

total renewable fuel at levels 

significantly below the statutory volume 

targets. This exercise of EPA’s waiver 

authorities reduces burdens on small 

entities, as compared to the burdens that 

would be imposed under the volumes 

specified in the Clean Air Act in the 

absence of waivers. Regarding the 

biomass-based diesel standard, we are 

proposing to increase the volume 

requirements for 2014–2016 over the 

statutory minimum value of 1 billion 

gallons. However, this is a nested 

standard within the advanced biofuel 

category, for which we are proposing 

significant reductions from the statutory 

volume targets. As discussed in Section 

III, we are setting the biomass-based 

diesel volume requirement at a level 

below what is anticipated will be 

produced and used to satisfy the 

reduced advanced biofuel requirement. 

The net result of our proposed actions 

are a reduction in burden as compared 

to implementation of the statutory 

volume targets, as was assumed in the 

March 26, 2010 analysis. Furthermore, 

available information shows that the 

impact on small entities from 

implementation of this rule will not be 

significant. Using the maximum values 

of the illustrative costs discussed in 

Section II.F., the gasoline and diesel fuel 

volume projections in Table V.B.3–1, 

and current wholesale fuel prices, a 

simple cost-to-sales ratio test shows that 

the costs to small entities of the RFS 

standards remain less than 1% of the 

value of their sales. 

The program also includes 

compliance flexibilities that can reduce 

impacts on small entities. These 

flexibilities include RIN trading, 20% 


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138A small refinery, as defined by the statute, is 

a refinery with an average daily crude throughput 

of 75,000 barrels or less. As this is a facility-based 

definition, not company-based as SBA’s small 

refiner definition is, it follows that not all small 

refiners’ facilities meet the definition of a small 

refinery. 

RIN rollover allowance (up to 20% of an 

obligated party’s RVO can be met using 

previous-year RINs), and deficit 

carryforward (the ability to carry over a 

deficit from a given year into the 

following year, providing that the deficit 

is satisfied together with the next year’s 

RVO). In the March 26, 2010 final rule, 

we discussed other potential small 

entity flexibilities that had been 

suggested by the SBREFA panel or 

through comments, but we did not 

adopt them since they are inconsistent 

with EPA’s authority under the CAA 

(see 75 FR 14737). Our statutory 

authority to issue relief to small entities 

has not changed since that time. 

Additionally, as specified by the statute, 

the RFS regulations (at 40 CFR 

80.1441(e)(2)) allow for a small 

refinery 138 to petition for case-by-case 

hardship relief. 

Given that this proposed rule would 

not impose additional requirements on 

small entities, would decrease burden 

via a reduction in required volumes as 

compared to statutory volume targets, 

and would not change the compliance 

flexibilities currently offered to small 

entities under the RFS program, we 

have therefore concluded that this 

action would not have a significant 

impact on a substantial number of 

directly regulated small entities. 

D. Unfunded Mandates Reform Act 

(UMRA) 

This action does not contain any 

unfunded mandate as described in 

UMRA, 2 U.S.C. 1531–1538, and does 

not significantly or uniquely affect small 

governments. The action implements 

mandates specifically and explicitly set 

forth in CAA section 211(o) without the 

exercise of any policy discretion by the 

EPA. 

E. Executive Order 13132: Federalism 

This action does not have federalism 

implications. It will not have substantial 

direct effects on the states, on the 

relationship between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

This action does not have tribal 

implications as specified in Executive 

Order 13175. This proposed rule will be 

implemented at the Federal level and 

affects transportation fuel refiners, 

blenders, marketers, distributors, 

importers, exporters, and renewable fuel 

producers and importers. Tribal 

governments would be affected only to 

the extent they produce, purchase, and 

use regulated fuels. Thus, Executive 

Order 13175 does not apply to this 

action. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

The EPA interprets Executive Order 

13045 as applying only to those 

regulatory actions that concern 

environmental health or safety risks that 

the EPA has reason to believe may 

disproportionately affect children, per 

the definition of ‘‘covered regulatory 

action’’ in section 2–202 of the 

Executive Order. This action is not 

subject to Executive Order 13045 

because it implements specific 

standards established by Congress in 

statutes (CAA section 211(o)). 

H. Executive Order 13211: Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not a ‘‘significant 

energy action’’ because it is not likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy. 

This action simply proposes the annual 

standards for renewable fuel under the 

RFS program for 2014, 2015, and 2016. 

I. National Technology Transfer and 

Advancement Act (NTTAA) 

This rulemaking does not involve 

technical standards. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations, and 

Low-Income Populations 

The EPA believes that this action will 

not have potential disproportionately 

high and adverse human health or 

environmental effects on minority, lowincome, or indigenous populations. This 

proposed rule does not affect the level 

of protection provided to human health 

or the environment by applicable air 

quality standards. This action does not 

relax the control measures on sources 

regulated by the RFS regulations and 

therefore will not cause emissions 

increases from these sources. 

IX. Statutory Authority 

Statutory authority for this action 

comes from section 211 of the Clean Air 

Act, 42 U.S.C. 7545. Additional support 

for the procedural and compliance 

related aspects of this proposed rule 

come from sections 114, 208, and 301(a) 

of the Clean Air Act, 42 U.S.C. 7414, 

7542, and 7601(a). 

List of Subjects in 40 CFR Part 80 

Environmental protection, 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Diesel fuel, Fuel 

additives, Gasoline, Imports, Oil 

imports, Petroleum, Renewable fuel. 

Dated: May 29, 2015. 

Gina McCarthy, 

Administrator. 

For the reasons set forth in the 

preamble, EPA proposed to amend 40 

CFR part 80 as follows: 

PART 80—REGULATION OF FUELS 

AND FUEL ADDITIVES 

■ 1. The authority citation for part 80 

continues to read as follows: 

Authority: 42 U.S.C. 7414, 7521, 7542, 

7545, and 7601(a). 

Subpart M—Renewable Fuel Standard 

■ 2. Section 80.1401 is amended by 

adding in alphabetical order the 

definition for ‘‘Algae grown 

photosynthetically’’ to read as follows: 

§ 80.1401 Definitions. 

* * * * * 

Algae grown photosynthetically are 

algae that are grown such that their 

energy and carbon are predominantly 

derived from photosynthesis. 

* * * * * 

■ 3. Section 80.1405 is amended by: 

■ a. Removing and reserving paragraph 

(a)(2)(i); and 

■ b. Adding paragraphs (a)(5), (6), and 

(7). 

The additions read as follows: 

§ 80.1405 What are the Renewable Fuel 

Standards? 

(a) * * * 

(5) Renewable Fuel Standards for 

2014. 

(i) The value of the cellulosic biofuel 

standard for 2014 shall be 0.019 percent. 

(ii) The value of the biomass-based 

diesel standard for 2014 shall be 1.42 

percent. 

(iii) The value of the advanced biofuel 

standard for 2014 shall be 1.52 percent. 

(iv) The value of the renewable fuel 

standard for 2014 shall be 9.02 percent. 

(6) Renewable Fuel Standards for 

2015. 

(i) The value of the cellulosic biofuel 

standard for 2015 shall be 0.059 percent. 

(ii) The value of the biomass-based 

diesel standard for 2015 shall be 1.41 

percent. 


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(iii) The value of the advanced biofuel 

standard for 2015 shall be 1.61 percent. 

(iv) The value of the renewable fuel 

standard for 2015 shall be 9.04 percent. 

(7) Renewable Fuel Standards for 

2016. 

(i) The value of the cellulosic biofuel 

standard for 2016 shall be 0.114 percent. 

(ii) The value of the biomass-based 

diesel standard for 2016 shall be 1.49 

percent. 

(iii) The value of the advanced biofuel 

standard for 2016 shall be 1.88 percent. 

(iv) The value of the renewable fuel 

standard for 2016 shall be 9.63 percent. 

* * * * * 

■ 4. Section 80.1426, paragraph (f)(1) is 

amended by revising ‘‘Table 1 to 

§ 80.1426’’, entries F and H to read as 

follows: 

§ 80.1426 How are RINs generated and 

assigned to batches of renewable fuel by 

renewable fuel producers or importers? 

* * * * * 

(f) * * * 

(1) * * * 

TABLE 1 TO § 80.1426—APPLICABLE D CODES FOR EACH FUEL PATHWAY FOR USE IN GENERATING RINS

Fuel type Feedstock Production process requirements D-code 

*******

F ............... Biodiesel, renewable 

diesel, jet fuel and 

heating oil.

Soy bean oil; .....................................................

Oil from annual covercrops; 

Oil from algae grown photosynthetically; 

Biogenic waste oils/fats/greases; 

Non-food grade corn oil; 

Camelina sativa oil; 

One of the following: .........................................

Trans-Esterification. 

Hydrotreating. 

Excluding processes that co-process renewable biomass and petroleum. 

4 

* * * * * * * 

H .............. Biodiesel, renewable 

diesel, jet fuel and 

heating oil.

Soy bean oil; .....................................................

Oil from annual covercrops; 

Oil from algae grown photosynthetically; 

Biogenic waste oils/fats/greases; 

Non-food grade corn oil; 

Camelina sativa oil; 

One of the following: .........................................

Trans-Esterification. 

Hydrotreating. 

Includes only processes that co-process renewable biomass and petroleum. 

5 

* * * * * * * 

* * * * * 

■ 5. Section 80.1451 is amended by 

revising paragraph (a)(1)(xiv) to read as 

follows: 

§ 80.1451 What are the reporting 

requirements under the RFS program? 

(a) * * * 

(1) * * * 

(xiv)(A) For the 2013 compliance 

year, annual compliance reports shall be 

submitted no later than January 31, 

2016. 

(B) For obligated parties, for the 2014 

compliance year, annual compliance 

reports shall be submitted no later June 

1, 2016. 

(C) For exporters of renewable fuel, 

for the 2014 compliance period from 

January 1, 2014, through September 16, 

2014, full annual compliance reports 

(containing the information specified in 

paragraphs (a)(1)(i), (ii), (vi), (viii), and 

(x) of this section) for that period shall 

be submitted no later than January 31, 

2016. 

(D) For obligated parties, for the 2015 

compliance year, annual compliance 

reports shall be submitted no later than 

December 1, 2016. 

* * * * * 

■ 6. Section 80.1464 is amended by 

revising paragraph (g) and adding 

paragraph (i)(3) to read as follows. 

§ 80.1464 What are the attest engagement 

requirements under the RFS program? 

* * * * * 

(g)(1) For obligated parties and 

exporters of renewable fuel, for the 2013 

compliance year, reports required under 

this section shall be submitted to the 

EPA no later than June 1, 2016. 

(2) For RIN-generating renewable fuel 

producers, RIN-generating importers of 

renewable fuel, and other parties 

owning RINs, for the 2013 compliance 

year, reports required under this section 

shall be submitted to the EPA no later 

than January 31, 2016. 

(3) For obligated parties, for the 2014 

compliance year, reports required under 

this section shall be submitted to the 

EPA no later than December 1, 2016. 

(4) For exporters of renewable fuel, for 

the 2014 compliance period from 

January 1, 2014, through September 16, 

2014, full reports for that period 

required under this section shall be 

submitted no later than June 1, 2016. 

(5) For RIN-generating renewable fuel 

producers, RIN-generating importers of 

renewable fuel, and other parties 

owning RINs, for the 2014 compliance 

year, reports required under this section 

shall be submitted to the EPA no later 

than January 31, 2016. 

(6) For obligated parties, for the 2015 

compliance year, reports required under 

this section shall be submitted to the 

EPA no later than June 1, 2017. 

* * * * * 

(i) * * * 

(3) Reporting requirements. For the 

2014 compliance year, reports required 

under paragraph (i) of this section shall 

be submitted to the EPA no later than 

January 31, 2016. For the 2015 

compliance year and each subsequent 

year, reports required under paragraph 

(i) of this section shall be submitted 

pursuant to paragraph (d) of this 

section. 

[FR Doc. 2015–13956 Filed 6–9–15; 8:45 am] 

BILLING CODE 6560–50–P 


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