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Page **1** of **47** EO12866_Additional RFS Pathways_2060
- AR85_Final_20130531

**ENVIRONMENTAL PROTECTION AGENCY**

**40 CFR Part 80 [EPA**  **- HQ**  **- OAR** **- 2011**  **- 0542; FRL**  **- ]**  **RIN 2060 -**  **AR 85**  **Regulation of Fuels and Fuel Additives: Additional Qualifying Renewable Fuel Pathways under the Renewable Fuel Standard Program; Final Rule**  **Approving Renewable**  **Fuel Pathways**  **for Giant Reed ( Arundo Donax** **) and Napier Grass ( Pennisetum Purpureum**  **)**
**AGENCY:** Environmental Protection Agency (EPA). **ACTION:** Final Rule. **SUMMARY:** This final rule approv es pathway s for production of renewable fuel from giant reed ( Arundo donax ) and napier grass ( Pennisetum purpureum ) as feedstock s . These pathway s are for cellulosic biofuel, for purposes of the Renewable Fuel Standard Program (RFS), under Clean Air Act (CAA) section 211(o) as amended by the Energy Independence and Security Act of 2007 (EISA). EPA has determined that renewable fuel made from napier grass and giant reed m e et the greenhouse gas (GHG) reduction requirements for cellulosic biofuel under the requirements of the RFS program. In response to c omments on th e proposal concerning the potential for these crops to behave as inv asive species , EPA is adopting additional registration, recordkeeping, and reporting requirements that were developed to address the potential for GHG emissions related to these concerns. Approval of these pathway s combined with the related provisions wil l create additional opportunities for regulated parties to comply with the advanced and cellulosic renewable fuel requirements of the RFS program, while limiting the expansion of these feedstocks into areas outside the intended planting area.*** E.O. 12866 Review

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Page **2** of **47 DATES:**  Thi s rule is effective on [INSERT PUBLICATION DATE] . **FOR FURTHER INFORMATION CONTACT:** Edmund Coe , Office of Transportation and Air Quality

( MC6401A ), Environmental Protection Agency , 1200 Penns yl vania Ave., N.W., Washington, DC 20460 ; telephone number: (202) 564
- 8994 ; fax number: (202) 564
- 1686 ; email address: Coe.edmund@Epa.gov .
**SUPPLEMENTARY INFORMATION** : **Does This Action Apply to Me?** Entities potentially

affected by

this action are those involved with the production, distribution, and sale of transportation fuels, including gasoline and diesel fuel or renewable fuels such as ethanol and biodiesel. Regulated categories and entities affected by this action include:*** E.O. 12866 Review

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Page **3** of **47** Category NAI CS 1

Codes SI C 2

Codes Examples of Potentially Regulated Entities
Indus try Industry Industry Industry Industry Industry Industry 324110

325193 325199 424690 424710 424720 454319 2911

2869 2869 5169 5171 5172 5989 Petroleum Refineries Ethyl alcohol manufacturing Other basic organic chemical manufacturing Chemical and allied products merchant wholesalers Petroleum bulk stations and terminals Petroleum and petroleum products merchant wholesalers Other fuel dealers 1 North American Industry Classification S ys tem (NAI CS) 2 Standard Industrial Classification (SI C) s ys tem code. This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely

to be regulated b y this action. This table lists the ty pes of entities that EPA is now aw are could be potentially regulated by

this action. Other ty

pes of entities not listed in the table could also be regulated. To determine whether your entity is regulated b y this action, yo u should carefully

examine the applicability criteria of Part 80, subparts D, E and F of title 40 of the Code of Federal Regulations. If you have any question regarding applicability of this action to a particular entity , consult the person in the preceding **FOR FURTHER INFORMATION CONTACT**  section above.
**Outline of This P reamble** *** E.O. 12866 Review

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Page **4** of **47** I. Executive Summary A. Purpose of the Regulatory Action B. Summary

of the Major Provisions of this Regulatory Action II. Additional Qualifying Renewable Fuel Pathway s under the Renewable Fuel Standard (RFS) Program A. Feedstock Production and Distribution B. Fuel Production, Distribution, and Use C. Summary III. Additional Provisions Addressing Invasiveness Concerns for Giant Reed and Napier Grass A. Discussion of Comments on Invasive Species B. Registration, Reporting, and Record Keeping Requirements to Address Potential Invasiveness IV . 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 C. Regulatory

Flexibility

Act D. Unfunded Mandates Re form Act 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 Safet y Risks*** E.O. 12866 Review

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Page **5** of **47** H. Executive Order 13211: Actions C oncerning Regulations That Significantly Affect Energy

Suppl y, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and L ow - Income Populations V. Statutory

Provisions and Legal Authority
**I. Executive Summary**  **A. Purpose of this Regulatory Action** In this final rule , EPA is approving a pathway for production of renewable fuel from giant reed (

Arundo donax ) and napier grass ( Pennisetum purpureum ) as feedstock for purposes of the RFS program. EPA has determined that renewable fuel made from napier grass and giant reed meet the lifecycle greenhouse gas (GHG) reduction requirements for cellulosic biofuel under the requirements of the RFS program. EPA is also adopting additional registration, recordkeepi ng, and reporting requirements to minimize the potential spread of giant reed or napier grass that was planted for the purpose of producing renewable fuels under the RFS program. These additional requir ements are necessary to reasonabl y ensure that the feedstock does not spread to areas outside the intended planting area which could result in additional GHG emissions needed to control and remove the invasive plants. EPA is issuing this final rule based o n its evaluation of the lifecycle greenhouse gas emissions of this pathway for production of renewable fuel from these feedstocks. The approach of a pathway

for production of renewable fuel is based on the requirements related to greenhouse gas reductions that are part of the RFS program, under Clean Air Act (“CAA”) Section 211(o) as amended b y the Energy Independence and Security Act of 2007 (“EI SA”). This rulemaking*** E.O. 12866 Review

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Page **6** of **47** modifies the RFS regulations published at 40 CFR § 80.1400 et. seq . The RFS program re gulations specify

the t ypes of fuels eligible to participate in the RFS renewable fuel program and the procedures b y which renewable fuel producers and importers may generate Renewable Id entification Numbers (“RINs”) for the qualifying renewable fuels they produce through approved fuel pathway s. See 75 FR 14670 (March 26, 2010); 75 FR 26026 (May 10, 2010); 75 FR 37733 (June 30, 2010); 75 FR 59622 (September 28, 2010); 75 FR 76790 (December 9, 2010); 75 FR 79964 (December 21, 2010); 77 FR 1320 (January 9, 2 012); 77 FR 74592 (December 17, 2012); and 78 FR 14190 (March 5, 2013) . Approving the new fuel pathway s according to the provisions of this rule will provide biofuel producers opportunities to increase the volume of advanced, low
- GHG cellulosic biofuels under the RFS program. EPA’s comprehensive lifecycle anal ys es in the January 5, 2012 proposal show significant lifecycle GHG emission reductions from fuels produced from giant reed and napier grass, as compared to the baseline (petroleum
- based) gasoline o r diesel fuel that they replace. However , the lifecycle anal ys es assume no significant indirect greenhouse gas emissions associated with actions to remove or remediate the unintended spread of these feedstocks outside of the intended planting area. This rule includes provisions designed to ensure that this assumption is realized , and were developed in response to comments raised during the public comment period . **B. Summary of the Major Provisions of the Regulatory Action In Question** This rule approves new pathway s for production of cellulosic biofuel from giant reed and n apier grass as feedstock s . T he rule also includes several provisions addressing invasiveness concerns regarding giant reed or napier grass when it is grown as a feedstock for producti on of*** E.O. 12866 Review

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Page **7** of **47** renewable fuel. 1 The se provisions require either a demonstration by the renewable fuel producer that the giant reed or napier grass will not pose a significant risk of spread beyond its intended planting area, or approval by EPA of a Risk Mitigation Plan developed b y the fuel producer that demonstrates the giant reed or napier grass will not pose a significant risk of spread beyond its intended the planting area . EPA is also including related registration, reporting, and recording keeping requirements.
**II. Additional Qualifying Renewable Fuel Pathways under the Renewable Fuel**  **Standard (RFS) Program, Using Giant Reed and Napier Grass** EPA’s anal ys is of renewable fuel pathway s using giant reed and napier grass as feedstocks was originally published in the Federal Register on January 5, 2012 as a direct final rule, with a parallel publication of a proposed rule. Because relevant adverse comments were received, EPA withdrew the direct final rule on March 5, 2012 (77 FR 13009) . A second comment period was no t issued, since the simultaneous publication of the proposed rule provided an adequate notice and comment process. For this rulemaking, EPA considered the lifecycle GHG impacts of two ty pes of high
yi elding perennial grasses similar in cellulosic composi tion to switchgrass and comparable in status as an emerging energy crop. The grasses considered in this rulemaking are giant reed ( Arundo donax), and napier grass ( pennisetum purpureum ), also known as elephant grass. In the March 2010 RFS rule, EPA analyzed the lifecycle GHG impacts of producing and using cellulosic ethanol and cellulosic Fischer
- Tropsch diesel from switchgrass. The midpoint of the

1 For purposes of this proposal, the term “giant reed” refers to the species Arundo donax and “napier grass” refers to the species Pennisetum purpureum .*** E.O. 12866 Review

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Page **8** of **47** range of switchgrass results showed a 110% GHG reduction (range of 102%
- 117%) for cellulosic ethanol (bioch emical process), a 72% (range of
- 64% to - 79%) reduction for cellulosic ethanol (thermochemical process), and a 71% (range of
- 62% to - 77%) reduction for cellulosic diesel (F
- T process) compared to the petroleum baseline. In the March 2010 RFS final rule, we indicated that some feedstock sources can be determined to be similar enough to those modeled that the modeled results could reasonabl y be extended to these similar feedstock types. For instance, information on miscanthus indicated that this perennial grass will yield more feedstock per acre than the modeled switchgrass feedstock without additional inputs with GHG implications (such as fertilizer). Therefore in the final rule EPA concluded that since biofuel made from the cellulosic biomass in switchgrass was found to satisfy the 60% GHG reduction threshold for cellulosic biofuel, biofuel produced from the cellulosic biomass in miscanthus would also comply . In the final rule we included cellulosic biomass from switchgrass and miscanthus as eligible feed stocks for the cellulosic biofuel pathway s included in Table 1 to § 80.1426. We did not include other perennial grasses such as giant reed or napier grass as feedstocks for the cellulosic biofuel pathway s in Table 1 at that time, since we did not have su fficient time to adequately consider them. Based in part on additional information received through the petition process for EPA approval of giant reed and napier grass pathway s, EPA has evaluated these feedstocks and is now including these feedstocks in T able 1 to § 80.1426 as approved pathway s for cellulosic biofuel pathways. As described in detail in the following sections of this preamble, because of the similarity of these feedstocks to switchgrass and miscanthus, EPA believes that new agricultural sec tor modeling is not needed to anal yz e them. We have instead relied upon the switchgrass analy sis to*** E.O. 12866 Review

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Page **9** of **47** assess the relative GHG impacts of biofuel produced from giant reed and napier grass. As with the switchgrass analy sis, we have attributed all land use impa cts and resource inputs from use of these feedstocks to the portion of the fuel produced that is derived from the cellulosic components of the feedstocks. Based on this analy sis and currentl y available information, we conclude that biofuel (ethanol, cellu losic diesel, jet fuel, heating oil and naphtha) produced from the cellulosic biomass of giant reed or napier grass has similar lifecycle GHG impacts to switchgrass biofuel and meets the 60% GHG reduction threshold required for cellulosic biofuel. **A. Feedst**  **ock Production and Distribution** For the purposes of this rulemaking, G iant reed refers to the perennial grass Arundo donax of the Poaceae family . Giant reed thrives in subtropical and warm
- temperate areas and is grown throughout Asia, southern Europe, Africa, the Middle East, and warmer U.S. states for multiple uses such as paper and pulp, musical instruments, rayon, particle boards, erosio n control, and ornamental purposes. 2 , 3 Based in part on discussions with industry , EPA anticipates continued development of giant reed as an energy crop particularl y in the Mediterranean region and warmer U.S. states. Napier grass is a tall bunch
- ty pe gr ass that has traditionally been grown as a high
yi elding forage crop across the wet tropics. There is a considerable body of agronomic research on the production of napier grass as a forage crop. More recentl y, researchers have investigated way s to maximi ze traits desirable in bioenergy crops. Practices have been developed b y USDA and other researchers to lower fertilization rates and increase biomass production. Based in part on discussions with industry , EPA anticipates continued development of napier grass as an

2 See http://www.fs.fed.us/database/feis/plants/graminoid/arudon/all.html 3 See Lewandowski, I., Scurlock, J.M.O., Lindvall, E., Christou, M. (2003). The development and current status of perennial rhizomatous grasses as energy crops i n the US and Europe. Biomass and Bioenergy 25, 335
- 361.*** E.O. 12866 Review

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Page **10** of **47** energy crop particularl y i n Gulf Coast Region of the United States (more specificall y the growing region includes Florida and southern portions of Texas, L ouisiana, Georgia, Alabama and Mississippi). 4

1. Crop Yields For the purposes of anal yzing the GHG emissions from gi ant reed and napier grass production, EPA examined crop yi elds and production inputs in relation to switchgrass to assess the relative GHG impacts. Current national yi elds for switchgrass are approximately 4.5 to 5 dry tons per acr e. Giant reed field trials conducted in Alabama over a 9
- ye ar period showed an average yi eld of 15 dry

tons per acre with no nitrogen fertilizer applied after the first year. 5 Fertilized field trials have shown yi elds around 13 to 28 dry tons per acre in Spain, and 12 dry tons per acre in Ital y (based on annual yi elds of 3, 14, 17, 16, and 12). 6 High yields have been demonstrated with unimproved giant reed populations, and therefore there is potential for increased biomass productivity through improved gro wing methods and breeding efforts. 7 Napier grass field trials have produced dry biomass yields exceeding 20 tons per acre per year in north
- central Florida. Using currentl y available technology, average yi elds for full
- season napier grass should range from 14 to 18 tons per acre with future improvements expected. Yield depends greatly

on the type of cultivar and the amount and distribution of rainfall and

4 For a map depicting the northern limit for sustained napiergrass production in the United States see Figure 1 in Woodard, K., R. and Sollenberger, L, E. 2008. Production of Biofuel Crops in Florida: Elephantgrass. Institute of Food and Agricultural Sciences, University of Florida. SS AGR 297. 5 Huang, P., Bransby, D., and Sladden, S. (2010). Exceptionally high yields and soil carbon sequestration recorded for giant reed in Alabama. Poster session pre sented at: ASA, CSSA, and SSSA 2010 International Annual Meetings, Green Revolution 2.0; 2010 Oct 31

– Nov 4; Long Beach, CA. 6 Mantineo, M., D’Agnosta, G.M., Copani, V., Patanè, C., and Cosentino, S.L. (2009). Biomass yield and energy balance of three perennial crops for energy use in the semi
- arid Mediterranean environment. Field Crops Research 114, 204 - 213. 7 Lewandowski et al. 2003*** E.O. 12866 Review

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Page **11** of **47** fertilization rates. There is potential for increased biomass productivity through improved growing methods and breeding efforts. 8 In general, the yields for both of the energy grasses considered here will have higher yi elds than switchgrass, so from a crop yi eld perspective, the switchgrass anal ys is would be a conservative estimate when comparing agai nst the napier grass, and giant reed pathway s. Furthermore, EPA’s analy sis of switchgrass for the RFS2 rulemaking assumed a 2% annual increase in yi eld that would result in an average national yield of 6.6 dry tons per acre in 2022. EPA anticipates a similar yield improvement for giant reed and napier grass due to their similarity as perennial grasses and their comparable status as energy crops in their earl y stages of development. Given this, our anal ys is assumes an average giant reed yi eld of approxi mately 18 dry tons per acre by

2022 and an average napier grass yield of approximately 20 dry tons per acre b y 2022 9 . The ethanol yield for all of the grasses is approximately the same so the higher crop yi elds for napier grass and giant reed result direc tly in greater ethanol production compared to switchgrass per acre of production. Based on these yi eld assumptions, in areas with suitable growing conditions, giant reed would require less than 40% of the land area required b y switchgrass to produce the same amount of biomass and napier grass would require approximately 33% of the land area required by switchgrass to produce the same amount of biomass due to their higher yields. Even without yi eld growth assumptions, their currently higher crop yield rat es means the land use required for these crops would be lower than for switchgrass. Therefore less crop area would be converted and displaced resulting in smaller land
- use change GHG impacts than that assumed for

8 Based on discussions with industry and USDA and Woodard and Sollenberger (2008) 9 These yields assume no significant advers e climate impacts on world agricultural yields over the analytical timeframe.*** E.O. 12866 Review

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Page **12** of **47** switchgrass to produce the same amount of fuel. Furthermore, we believe napier grass will have a similar impact on international markets as assumed for switchgrass. L ike switchgrass, napier grass is not expected to be traded internationally and its impacts on other crops are expected to be limited. Increased giant reed demand in the U.S. for biofuels is not expected to impact existing markets for giant reed, which are relatively small niche markets (e.g., musical instrument reeds).

2. Land Use In E PA’s March 2010 RFS final rule anal ys is, switchgrass plantings displaced primaril y soy beans and wheat, and to a lesser extent hay , rice, sorghum, and cotton. N apier grass, with production focused in the southern United States, is likely to be grown on land once used for pasture, rice, commercial sod, cotton or alfalfa, which would likely have less of an international indirect impact than switchgrass because some of those commodities are not as widely traded as soy beans or wheat. Given that napier grass will likely displace the least productive land first, EPA concludes that the land use GHG impact for napier grass per gallon should be no greater and likely less than estimated for switchgrass. Given that giant reed is in early stages of development as an ene rgy crop, there is limited information on where it will be grown and what crops it will displace. We expect giant reed will displace the least productive land first and would likely have a similar or smaller indirect impact associated with crop displacement than what we assumed for switchgrass. Considering the total land potentially impacted b y all the new feedstocks included in this rulemaking would not impact these conclusions . In the switchgrass ethanol scenario done for the March 2010 RFS final rule , total cropland acres increases b y 4.2 million acres, including an increase of 12.5 million acres of switchgrass, a decrease of 4.3 million acres of soy beans, a 1.4*** E.O. 12866 Review

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Page **13** of **47** million acre decrease of wheat acres, a decrease of 1 million acres of hay , as well as decr eases in a variet y of other crops. Given the higher yi elds of the energy grasses considered here compared to switchgrass, there would be ample land available for production without having any adverse impacts beyond what was considered for switchgrass prod uction. This analy sis took into account the economic conditions such as input costs and commodity prices when evaluating the GHG and land use change impacts of switchgrass. One commenter stated that by assuming no land use change for giant reed and napi er grass, the Agency

may have underestimated the increase in GHG emissions that could result from breaking new land. According to the commenter, EPA assumed that these feedstocks will be grown on the least productive land without citing any specific model s or studies. The commenter appears to have misinterpreted EPA’s anal ys is. EPA did not assume these crops would be grown on fallow acres, nor did EPA assume that switchgrass would only be produced on the least productive lands. EPA assumed these crops wo uld be grown on acres similar to switchgrass, and therefore applied the land use change impacts of switchgrass anal yz ed in the March 2010 RFS final rule. In that rule , EPA provided detailed information on the ty pes of crops (e.g., wheat) that would be dis placed b y s witchgrass. This anal ys is took into account the economic conditions such as input costs and commodity prices when evaluating the GHG and land use change impacts of switchgrass. 10

3. Crop Inputs and Feedstock Transport EPA also assessed the GHG impacts associated with planting, harvesting, and transporting giant reed and napier grass feedstocks in comparison to switchgrass. Table 1 shows the assumed 2022 commercial
- scale production inputs for switchgrass (used in the March 2010

10 See Final Regulatory Impact Analysis Chapter 2 , February 2010.*** E.O. 12866 Review

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Page **14** of **47** RFS final rule anal y sis), average giant reed and napier grass production inputs (USDA projections and industry

data) and the associated GHG emissions. Available data gathered by EPA suggest that g iant reed may require on average less nitrogen and insecticide than switchgras s, but more phosphorous, potassium, herbicide, diesel, and electricity

per unit of biomass. Napier grass may require similar amounts of nitrogen fertilizer application as switchgrass, less phosphorous, potassium and insecticide than switchgrass, but more herbicide, lime, diesel and electricity per unit of biomass. This assessment assumes production of these two new feedstocks uses electricity for irrigation given that growers will likely irrigate when possible to improve yields. Irrigation rates will vary depending on the timing and amount of rainfall, but for the purpose of estimating GHG impacts of electricity

use for irrigation, we assumed a rate similar to what we assumed for other irrigated crops in the Southwest, South Central, and Southeast as shown in Table 1 . Applying the GHG e mission factors used in the March 2010 RFS final rule, g iant reed production results in slightly lower GHG emissions relative to switchgrass production (a decrease of approximately 2 kg CO 2 eq/mmbtu). Napier grass production results in slightly higher GHG emissions relative to switchgrass production (an increase of approximately 6 kg CO 2 eq/mmbtu).*** E.O. 12866 Review

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Page **15** of **47 Table 1**  **: Production Inputs and GHG Emissions for Switchgrass, Giant Reed, and Napier grass (Biochemical Ethanol), 2022**  **Switchgrass Giant Reed**  **Napier grass** 
**Em ission**  **Factors Inputs** 

**(per dry ton of biom**  **ass) Em** **issions**

**(per mmBtu fuel)**  **Inputs**

**(per dry ton of**  **biom ass)**  **Em issions** 

**(per mmBtu fuel)**  **Inputs**

**(per dry ton of biomass)**  **Em issions**  **(per mmBtu fuel)**

Nitrogen Fertilizer 3,29 kgCO 2 e/ ton of nitrogen 15.2 lbs 3.6 kgCO 2 e 5 lbs 1 kgCO 2 e 10 lbs 2.4 kgCO 2 e

N 2 O N/A N/A 7.6 kgCO 2 e N/A 4.8 kgCO 2 e N/A 7.6 kgCO 2 e Phosphorus Fertilizer 1,12 kgCO 2 e / ton of phosphate 6.1 lbs 0.5 kgCO 2 e 7.4 lbs 0.6 kgCO 2 e 1.1 lbs 0.1 kgCO 2 e

Potassium Fertilizer 743 kgCO 2 e / ton of potassium 6.1 lbs 0.3 kgCO 2 e 7.4 lbs 0.4 kgCO 2 e 4.0 lbs 0.2 kgCO 2 e

Herbicide 23,45 kgCO 2 e / tons of herbicide 0.002 lbs 0.003 kgCO 2 e 0.02 lbs 0.03 kgCO 2 e 0.4 lbs 0.6 kgCO 2 e
Insecticide (average across regions) 27,22 kgCO 2 e / tons of pesticide 0.025 lbs 0.04 kgCO 2 e 0 lbs 0 kgCO 2 e 0 lbs 0 kgCO 2 e*** E.O. 12866 Review

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Page **16** of **47** Li me 408 kgCO 2 e / ton of lime 0 lbs 0 kgCO 2 e 0 lbs 0 kgCO 2 e 100 lbs 2.9 kgCO 2 e

Diesel 97 kgCO 2 e / mmBtu diesel 0.4 gal 0.8 kgCO 2 e 1.4 gal 2.5 kgCO 2 e 1.3 gal 2.2 kgCO 2 e
Electricity (irrigation) 220 kgCO 2 e / mmBtu 0 kWh 0 kgCO 2 e 10 kWh 1 kgCO 2 e 25 kWh 2.7 kgCO 2 e

**Total Emissions** 13 kgCO 2 e / mmBtu 11 kgCO 2 e / mmBtu 19 kgCO 2 e / mmBtu Assumes 2022 switchgrass yield of 6.59 dry tons/acre and 92.3 gal ethanol/dry ton, 2022 giant reed yield of 18 dry tons/acre and 92.3 gal ethanol/dry ton, and 2022 napier grass yield of 20 dry tons/acre and 92.3 gal ethanol/dry ton. More detail on calculations and assumptions is included in mat erials to the docket.*** E.O. 12866 Review

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Page **17** of **47** GHG emissions associated with distributing giant reed and napier grass feedstocks are expected to be similar to EPA’s estimates for switchgrass feedstock because they are all herbaceous agricultural crops requiring similar transport, loading, unloading, and storage regimes. Our anal ys is therefore assumes the same GHG impact for feedstock distribution as we assumed for switchgrass, although distributing giant reed and napier grass feedstocks could be less GHG intensive because higher yi elds cou ld translate to shorter overall hauling distances to storage or biofuel production facilities per gallon or Btu of final fuel produced. **B. Fuel Production, Distribution, and Use**  G iant reed and napier grass are suitable for the same conversion processes as o ther cellulosic feedstocks, such as switchgrass and corn stover. Currentl y available information on giant reed and napier grass composition shows that their hemicellulose, cellulose, and lignin content are comparable to other crops that qualify under the RFS regulations as feedstocks for the production of cellulosic biofuels. Based on this similar composition as well as conversion yi eld data provided b y industry , we applied the same production processes that were modeled for switchgrass in the March 2010 RF S final rule (biochemical ethanol, thermochemical ethanol, and Fischer
- Tropsch (F
- T) diesel 11 ) to giant reed and napier grass. We assumed the GHG emissions associated with producing biofuels from giant reed and napier grass are similar to what we estimated for switchgrass and other cellulosic feedstocks. EPA also assumes that the distribution and use of biofuel made from giant reed and napier grass will not differ significantly from similar biofuel produced from other cellulosic sources. As was done for the switchgrass case, this analy sis assumes energy grasses grown in the United States for production purposes. If crops were grown internationally , used for biofuel production, and the fuel was shipped to the

11 The F
- T diesel process modeled applies to cellulosic diesel, jet fuel, heating oil, and naphtha.*** E.O. 12866 Review

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Page **18** of **47** U.S., shipping the finished fuel to the U.S. coul d increase transport emissions. However, based on anal ys is of the increased transport emissions associated with sugarcane ethanol distribution to the U.S. considered for the 2010 final rule, this would at most add 1
- 2% to the overall lifecycle GHG impacts of the energy grasses. **C. Summary**  Based on our comparison of switchgrass and the two feedstocks considered here, EPA believes that cellulosic biofuel produced from the cellulose, hemicellulose and lignin portions of giant reed and napier grass has similar or better lifecycle GHG impacts than biofuel produced from the cellulosic biomass from switchgrass. Our anal ys is suggests that the two feedstocks considered have GHG impacts associated with growing and harvesting the feedstock that are similar to switchgr ass. Emissions from growing and harvesting giant reed are approximately 2 kg CO2eq/mmBtu lower than switchgrass, and emissions from growing and harvesting napier grass are approximately

6 kg CO2eq/mmBtu higher than switchgrass. These are small changes in the overall lifecycle, representing at most a 6% change in the energy grass lifecycle impacts in comparison to the petroleum fuel baseline. Furthermore, the two feedstocks considered are expected to have similar or lower GHG emissions than switchgrass as sociated with other components of the biofuel lifecycle. Under a h ypothetical worst case, if the calculated increases in growing and harvesting the new feedstocks are incorporated into the lifecycle GHG emissions calculated for switchgrass, and other life cycle components are projected as having similar GHG impacts to switchgrass (including land use change associated with switchgrass production), the overall lifecycle GHG reductions for biofuel produced from giant reed and napier grass still meet the 60% re duction threshold for cellulosic biofuel, the lowest being a 64% reduction (for napier grass diesel*** E.O. 12866 Review

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Page **19** of **47** produced through gasification and upgrading) compared to the petroleum baseline. We believe these are conservative estimates, as use of giant reed or napier grass as a feedstock is expected to have smaller land
- use GHG impacts than switchgrass, due to their higher yields. The docket for this rule provides additional detail on the anal ys is of giant reed and napier grass as biofuel feedstocks. Although this ana ly sis assumes giant reed and napier grass biofuels produced for sale and use in the United States will most likely come from domestically

produced feedstock, we also intend for the approved pathway s to cover giant reed and napier grass from other countries. We do not expect incidental amounts of biofuels from feedstocks produced in other nations to impact our assessment that the average GHG emissions reductions will meet the threshold for qualifying as a cellulosic biofuel pathway . Moreover, those countries most likely to be exporting giant reed, or napier grass or biofuels produced from these feedstocks are likel y to be major producers which ty pically use similar cultivars and farming techniques. Therefore, GHG emissions from produ cing biofuels with giant reed or napier grass grown in other countries should be similar to the GHG emissions we estimated for U.S. giant reed or napier grass, though they could be slightly higher or lower. For example, the renewable biomass provisions un der the Energy Independence and Security Act would prohibit direct conversion of previously unfarmed land in other countries into cropland for energy grass - based renewable fuel production. Furthermore, any energy grass production on existing cropland inte rnationally would not be expected to have land use impacts beyond what was considered for switchgrass production. Even if there were unexpected larger differences, EPA believes the small amounts of feedstock or fuel potentiall y coming from other countries will not impact our threshold anal ys is. Based on our assessment of switchgrass in the March 2010 RFS final rule and this*** E.O. 12866 Review

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Page **20** of **47** comparison of GHG emissions from switchgrass and giant reed and napier grass, we do not expect variations to be large enough to bring the overall GHG impact of fuel made from giant reed or napier grass to come close to the 60% threshold for cellulosic biofuel. Therefore, EPA is including cellulosic biofuel produced from the cellulose, hemicelluloses and lignin portions of giant reed and napier grass under the same pathway s for which cellulosic biomass from switc hgrass qualifies under the RFS program .
**III. Additional Provisions Addressing Invasiveness Concerns for Giant Reed and**  **Napier Grass** As described the previous section , the lifecycle GHG assessment of the pathway s using giant reed and napier grass assumed that these crops would not expand beyond their intended planting area and therefore did not assume an y significant GHG emissions resulting from actions to remediate or remove this un intended spread. In response to the January 5, 2012 proposal, EPA received comments raising concerns about the potential for the spread of these species beyond their intended growing area. After considering these comments, EPA has decided to adopt variou s changes to the RFS regulations to address the potential for giant reed or napier grass to behave as invasive species and spread beyond their intended planting area. The supplemental requirements included in today ’s final rule support the lifecycle assess ment discussed in section II above an d the determination that biofuels produced with these feedstocks will meet the criteria of advanced and cellulosic biofuels under the RFS regulations. **A. Discussion of Comments on Invasive Species**  In response to the January 2012 proposed rule, EPA received comments highlighting the concern that by

approving certain new feedstock ty pes under the RFS program, EPA would be*** E.O. 12866 Review

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Page **21** of **47** encouraging their introduction or expanded planting without considering their po tential impact as invasive species. 12 Commenters stated that Arundo donax (giant reed) and Pennisetum purpureum (napier grass) have been identified as invasive species in certain parts of the country . These commenters asserted that giant reed and napier grass “are invasive species within the definition of the Executive Order . 13 ” Commenters stated that EPA should not approve the proposed feedstocks until EPA has conducted an invasive species anal ys is, as required under Executive Order (EO) 13112. EPA also r eceived comments stating that giant reed is not “invasive” as defined by EO 13112, since giant reed “only presents problems of invasiveness in riparian areas prone to torrential flooding... giant reed has been grown responsibly in numerous places...without pro blems of invasiveness.” 14 EO 13112 , signed in February 1999, calls for each federal agency “to the extent practicable and permitted by law...not authorize, fund, or carry out actions that it believes are likely to cause or promote the introduction or spread of invasive species in the United States or elsewhere unless, pursuant to guidelines that it has prescribed, the agency has determined and made public its determination that the benefits of such actions clearl y outweigh the potential harm caused b y invasi ve species; and that all feasible and prudent measures to minimize risk of harm will be taken in conjunction with the actions.” 15 The Executive Order defines “invasive

12 Comment s ubmitted by Jonathan Lewis, Senior Counsel, Climate Policy, Clean Air Task Force et al., dated February 6, 2012. Document ID # EPA - HQ - OAR - 2011 - 0542 - 0118. 13 Comments submitted by Robert L. Bendick, Director, US Government Affairs, The Nature Conservancy e t al., dated February 6, 2012. Document ID # EPA
- HQ - OAR - 2011 - 0542 - 0119. 14 Comment submitted by R. Timothy Columbus and Christopher G. Falcone, Steptoe & Johnson LLP on behalf of The Chemtex Group, dated February 13, 2012. Document ID# EPA - HQ - OAR - 2011 - 0542 - 0124. 15 http://www.gpo.gov/fdsys/pkg/FR
- 1999 - 02 - 08/pdf/99
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Page **22** of **47** species” as “an alien species whose introduction does or is likely to cause economic or environmental harm or harm to human health.” Giant reed is listed as a noxious or invasive species by Texas , 16 Nevada , 17 and California , 18 and these states have programs in place to address invasive species concerns. Several other states also consider giant reed a plant of concern, 19 and napier grass is currently not recommended in Florida because of invasive potential. 20 While not prohibiting its planting, Oregon has promulgated strict regulations for the cultivation of giant reed any where in the state. 21 Other states, such as North Carolina, have specificall y determined that giant reed does not warrant listing as a noxious weed in their state. 22 In the January

5, 2012 proposal, EPA included the proposed lifecycle analysis of giant reed and napier grass. As discussed below, EPA’s lifecycle anal ys is of the renewable fuel produced from these feedstocks assumes there are no significant indirect greenhouse gas emissions associated with the spread and subsequent remediation of these feedstocks when grown for biofuel production for the RFS program. Based on this assumption, the lifecycle anal ys is does not include any expenditures of energy

or othe r sources of GHGs to remediate the spread of these species, such as mechanical removal or chemical control activities, outside of the locations where it is grown as a renewable fuel feedstock for the RFS program. EPA is not in a

16 See http://info.sos.state.tx.us/fids/200701978
- 1.html . Accessed on March 30, 2012. 17 See http://agri.nv.gov/nwac/PLANT_NoxWeedList.htm . Accessed on May 23, 2012. 18 See http://pi.cdfa.ca.gov/pqm/manual/pdf/107.pdf . Accessed on March 30, 2012. 19 See http://www.gaeppc.org/list.cfm . Accessed on May 23, 2012. 20 See http://www.fleppc.org/list/2011PlantList.pdf . Accessed on May 212, 2013. 21 See http://www.oregon.gov/oisc/docs/pdf/arundo603_052_1206.pdf . Accessed May 20, 2013. 22 Letter from Stephen W. Troxler to Bob Perciasepe, dated March 26, 2013. See Docket Number XXX .*** E.O. 12866 Review

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Page **23** of **47** position to estimate the m agnitude of GHG emissions that might be associated with an y such remediation if the plants are not controlled in this manner at these locations , if such remediation would even be needed. Given this uncertainty, EPA is not ready at this time to determine the percent reduction in lifecycle GHG emissions and whether it satisfies the threshold reduction in GHGs required under the Act, absent such an assumption. Therefore EPA believes it is prudent to require renewable fuel producers to demonstrate that their production of renewable fuel from giant reed or napier grass is consistent with this assumption, as a condition of approval as a RIN
generating producer of renewable fuel under the RFS program. By requiring the fuel producer to demonstrate no significant l ikelihood of spread beyond the planting area, EPA believes that the approval of pathway s to produce renewable fuel from giant reed or napier grass is not likely to cause or promote the introduction or spread of invasive species in the United States or elsewhere .
**B. Registration, Reporting, and Record Keeping Requirements to Address**  **Potential Invasiveness**
EPA is requiring that registration for producers of renewable fuel made from giant reed or napier grass would include submission by the renewable fuel producer of a Risk Mitigation Plan that demonstrates measure s are being taken to prevent the spread of these species such that the production of giant reed or napier grass will not pose a significant likelihood of spread beyond the planting area designated in the plan for the feedstock used for production of the renewable fuel. In the alternative , the fuel producer could demonstrate that a Risk Mitigation Plan is not needed because under the circumstances giant reed or napier grass does not pose a signific ant likelihood of spread beyond the planting area, such as in regions or countries where*** E.O. 12866 Review

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Page **24** of **47** these feedstocks are native. Registration of the producer would therefore require either EPA approval of a Risk Mitigation Plan or an EPA determination that no plan is needed based on the demonstration noted above. RINs could not be generated for renewable fuel produced using the giant reed or napier grass pathway absent such approval or determination. EPA is also adopting related recordkeeping and reporting requireme nts. The registration, reporting, and recordkeeping (RRR) requirements are described in more detail below. The CAA defines renewable fuel as fuel produced from renewable biomass , 23 and the definitions of categories of renewable fuel, i.e. , advanced biof uel, biomass
- based diesel, and cellulosic biofuel, specify the fuels’ lifecycle GHG emissions compared to baseline gasoline or diesel fuel GHG emissions . 24 The definition of renewable biomass also specifies certain conditions that biomass must meet to be c onsidered renewable biomass. 25 The definitions of renewable biomass and renewable fuels do not specificall y address the potential environmental impacts associated with the use of potentiall y invasive species as feedstocks . 26 Given the text and structure of section 211(o), EPA does not consider environmental factors other than the lifecycle anal ys is of GHG emissions and the definition of renewable biomass in determining whether a fuel produced from biomass is a renewable fuel for purposes of the RFS program. The requirements for producers summarized above and discussed in more detail below are a reasonable way

to implement this authority when considering the full lifecycle GHG
23 CAA § 211(o)(1)(J). 24 CAA §§ 211(o)(1)(B), (D), (E). 25 CAA § 211(o)(1)(I). 26 Separately, the CAA directs EPA to consider additional factors, including environmental impacts of the production and use of renewable fuels, in the context of determining the required volumes of renewable fuel for years where Congress does not specify volumes, at CAA § 211(o)(2)(B)(ii). In addition, Congress mandated that EPA conduct certain studies and provide reports to Congress on a ir quality impacts and other issues besides greenhouse gas impacts associated with the RFS program. See CAA section 211(q), (v) and Section 204 of EISA.*** E.O. 12866 Review

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Page **25** of **47** emissions for renewable fuel produced from giant reed and napier grass. EPA has included additional registration, recordkeeping, and reporting requirements in this rule , to address EPA’s lifecycle anal ys is and concerns related to the spread of invasive species . EPA developed these additional requirements b y building upon a number of state, federal, and local mechanisms that are already in place to reduce the potential invasive impacts of species such as giant reed and napier grass . For example, if producers were to appl y for the Biomass Crop Assistance Program (BCAP), USDA would requ ire an environmental assessment that anal yz es the risk of invasiveness. In addition, USDA’s Conservation Reserve Program (CRP) can also impose restrictions on farmers interested in growing giant reed on CRP land. Furthermore, invasive species are controlled and regulated under various existing federal and state guidelines. The Animal and Plant Health Inspection Service (APHI S) of the USDA regulates noxious weeds under the authority of the Plant Protection Act (PPA). APHIS names the regulated weeds in the noxious weed regulations (7 CFR 360) that may not be imported into the United States, or moved interstate, without a special permit. The requirements included in this rule are not intended to negate or supersede any local, state, or federal authority to restrict or ban these feedstocks due to invasiveness or other concerns. The potential for spread posed by potentially

invasive feedstocks may be greatl y reduced through the use of best practices. 27 Commenters referenced the voluntary best practices do cument developed jointly by the North Carolina Department of Agriculture and Consumer Services, the NC State University Cooperative Extension, and the Biofuels Center of North Carolina. Man y of the recommendations developed in this document are similar to the best practices USDA describes for the management of similar energy crops such as switchgrass and
27 Comment submitted by the Biofuels Center of North Carolina and the Institute for Sustainable and Renewable Resources, dated February 13, 2012. Document ID# EPA - HQ - OAR - 2011 - 0542 - 0123.*** E.O. 12866 Review

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Page **26** of **47** miscanthus. 28 For example, both USDA and the North Carolina voluntary standards recommend developing management plans that avoid sites without buffer area s and production in floodplains. The spread of potentiall y invasive feedstocks is also controlled by some states. For example, in Florida, biomass plantings are governed by FL Rule 5B
- 57.011. According to the rule, a permit for biomass plantings is required for two contiguous acres with in one parcel of land for an y plant used for biomass production. The purpose of the permitting process is to control the introduction into, or movement within, Florida of plant species intended for biomass plantings. One provision of the process is that no biomass permit shall be issued for an y planting of plants on the state noxious weed list or the federal noxious weed list. In 2009, a company , White Technologies LLC, applied for and received a permit to grow 80 acres of giant reed under the Florida program. Under Oregon State Statutes, Chapter 570, § 570.405, the Oregon Department of Agriculture may

establish control areas if after careful investigation it determines that such areas are necessary

for the general protection of the horticultural, agric ultural or forest industries of the state from diseases, insects, animals or noxious weeds. In March of 2011, the State created a control area for giant reed in Morrow and Umatilla Counties. The regulation, with restrictions, allowed for up to 400 acres of giant reed to be grown in Morrow and Umatilla Counties for providing biomass for a test burn at the Portland General Electric Boardman Power Plant. Given the potential for greenhouse gas emissions associated with remediation of the spread of giant r eed and napier grass, EPA believes it is prudent to only allow RI Ns to be generated for fuel produced from these feedstocks if they are grown, transported, and used to

28 See http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1044768.pdf.*** E.O. 12866 Review

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Page **27** of **47** produce fuel in a manner that is consistent with our lifecycle anal ys is. EPA is requiri ng that producers of renewable fuel derived from giant reed and napier grass must submit a Risk Mitigation Plan to ensure that the production of giant reed or napier grass will not pose a significant likelihood of spread beyond the planting area of the fee dstock used for production of the renewable fuel . EPA would consult with the appropriate responsible governmental agencies, including USDA, about the Risk Mitigation Plan, and would approve it if it meets the regulatory criteria. The producer or importer may only generate RINs for fuel produced from these feedstocks if the feedstocks were grown and transported in compliance with an EPA approved Risk Mitigation Plan. The producer must follow the approved Risk Mitigation Plan. Alternatel y, the producer co uld submit information and data showing that no Risk Mitigation Plan is needed because under the circumstances giant reed or napier grass do not pose a significant likelihood of spread beyond the planting area . In either case, EPA would require the produc er to submit a letter from the appropriate USDA office with its registration materials, stating USDA’s opinions regarding the likelihood of the feedstock spreading beyond the planting area, and the sufficiency

of the Risk Mitigation Plan (if applicable) in addressing and mitigating such likelihood. The letter from USDA must also include USDA’s recommendation of whether it is appropriate to require the use of a financial mechanism sufficient to cover reasonable potential remediation costs associated with th e spread of giant reed or napier grass beyond the intended planting areas , as an additional incentive to avoid such spread . EPA, again after consultation with USDA and any other relevant governmental agencies, would make its determination regarding wheth er the producer’s plan demonstrates that there is not a significant likelihood of the feedstock spreading beyond the intended planting area prior to*** E.O. 12866 Review

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Page **28** of **47** registering the renewable fuel producer and allowing RINs to be generated for fuel produced from that feeds tock. Risk Mitigation Plans would be required to incorporate approaches that are already recognized as highl y effective. One highl y effective approach to risk mitigation is Hazard Analy sis Critical Control Point (HACCP). 29 HACCP examines each phase of an invasive species pathway

to identify

control and evaluation measures to reduce the likelihood of spread. Applied within a coordinated HACCP strategy or plan, these control and evaluation measures reinforce each other. To the extent appropriate, HACCP should be incorporated into a Risk Mitigation Plan. Also a s part of the Risk Mitigation Plan, the producer would demonstrate how the use of best management practices (BMPs), such as those developed by the Invasive Species Advisory Committee 30 for any species, b y USDA for miscanthus, 31 and b y the State of Oregon for Arundo donax , 32 will be used b y the feedstock grower and how such practices will minimize the potential spread of the renewable fuel feedstock. BMPs include the development and imple mentation of mitigation strategies and plans to minimize escape and other impacts (e.g., minimize soil disturbance), incorporate desirable traits (e.g., sterility or reduced seed production), develop and put in place dispersal mitigation protocols prior to cultivation of biofuel plants in each region or ecosy stem, develop multiple year eradication protocols for rapid removal of biofuel crops if they

disperse beyond desired crop rotation period, and develop plans for earl y detection and rapid response (EDRR) . 33 EDRR efforts should also be incorporated into a Risk Mitigation Plan; such efforts should demonstrate that the likelihood that invasions could be

29 See http://www. habitat.noaa.gov/pdf/HACCP%20Training%20Manual.pdf . 30 See http://www.invasivespecies.gov/home_documents/BiofuelWhitePaper.pdf . 31 See http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1044768.pdf . 32 See http://www.oregon.gov/oisc/docs/pdf/arundo603_052_1206 .pdf . 33 http://www.invasivespecies.gov/global/EDRR/EDRR_documents/Guidelines%20for%20Early%20Detection%20 &%20Rapid%20 Response.pdf .*** E.O. 12866 Review

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Page **29** of **47** halted while still localized and identify and employ

cooperative networks, communication forums and consul tation processes through which federal, state, and local agencies can work with other stakeholders to reduce the risk of biological invasion. The Risk Mitigation Plan should include provisions for the closure of the site once it is no longer used for prod uction of feedstock for biofuel use under the RFS program or upon abandonment by the feedstock grower, including the destruction and removal of all remaining feedstock. Furthermore, the Risk Mitigation Plan should include an on
- going monitoring and reporti ng component. The monitoring would cover the presence or absence of the giant reed or napier grass, and the planting locations prior to and during feedstock cultivation. Monitoring should be done during the growing season, as well as extend for a suffici ent period after the field is no longer used for feedstock production to ensure no remnants of giant reed or napier grass survive or spread . The details of a monitoring and reporting plan, including the party responsible for collecting and overseeing moni toring data, will be specific to the project and planting site, and should account for and respond to an y applicable local, state or federal regulations. The area that needs to be monitored would also be approved by EPA, in consultation with the appropriat e responsible agencies. The area to be monitored should be sufficient to detect any potential spread of the feedstock, both surrounding the field of production and feedstock storage sites, along the transportation route, and around the biofuel production facility . EPA is requiring the use of a third part y independent of the feedstock grower and renewable fuel producer to audit the monitoring activities and reporting done by the renewable fuel producer under the Risk Management Plan on an annual basis , subj ect to approval of a different timeframe b y EPA . Itwill be the responsibility of the renewable fuel producer to identify this competent independent third party as part of their registration application . An y*** E.O. 12866 Review

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Page **30** of **47** future changes to the use of a different independent third party must be reviewed and approved by EPA in advance of the change. The recordkeeping and reporting provisions would require producers to obtain documentation about giant reed or napier grass fe edstocks from their feedstock supplier(s) and take the measures necessary to ensure that they

know the source of their feedstocks and can demonstrate to EPA that they were produced in compliance with a Risk Mitigation Plan or from land that EPA has determi ned will not create a significant likelihood of spread beyond the planting area of the feedstock used for production of the renewable fuel. Specificall y, the reporting requirements for producers who generate RINs from these feedstocks include a certificati on on renewable fuel production reports that the feedstock was grown , harvested, transported , and stored in compliance with a Risk Mitigation Plan or from land that EPA has determined will not create a significant likelihood of spread beyond the planting area. Additionally , producers will be required to include with their quarterl y reports a summary of the ty pes and quantities of these feedstocks used throughout the quarter, as well as maps of the land from which the feedstocks used in the quarter were har vested. EPA’s recordkeeping provisions require renewable fuel producers to maintain sufficient records to support their claims that their feedstocks were grown and transported in compliance with a Risk Mitigation Plan or from land that EPA has determined w ill not create a significant likelihood of spread beyond the planting area . If submitting a Risk Mitigation Plan, the renewable fuel producer would also submit a number of documents such as a letter documenting the feedstock grower’s compliance with all of the relevant federal, state, regional, and local requirements related to invasive species, a cop y of all state and local growing permits held by the feedstock grower, and a communication plan for*** E.O. 12866 Review

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Page **31** of **47** notifying federal, state, and local authorities if the feed stock is detected outside the intended planting areas. Finall y, the fuel producer would submit a copy of the agreement between itself, the feedstock grower, and any intermediaries responsible for the harvesting, transport and storage of the feedstock, est ablishing the parties’ rights and duties related to the Risk Mitigation Plan and any other activities and liability associated with the prevention of the spread of the feedstock. It is essential that the feedstock grower, fuel producer, and an y intermediaries responsible for the harvesting, transport, and storage of the feedstock are clearl y on notice of their relative rights and duties in this situation because the regulations will require the fuel producer to exercise a level of responsibility

for and ove rsight of the feedstock production, harvest, transport and storage that may not normall y exist in a buy
- sell contract for agricultural products. Finally , pursuant to existing regulations, EPA may require additional information as needed at the time of reg istration, which may

be especially

appropriate when the agency considers the approval of a feedstock with risk of invasiveness. EPA may , where appropriate, require the fuel producer to include in a Risk Mitigation Plan a demonstration that there is an ad equate mechanism (such as a state
- administered fund, bond, or certificate of deposit) to ensure the availability of financial resources sufficient to cover reasonable potential remediation costs associated with the spread of giant reed or napier grass beyo nd the intended planting areas. EPA would consult with USDA and if appropriate other federal agencies on the need for and, where appropriate, adequacy of such a mechanism. The primary purpose of such a mechanism would be to help ensure that the fuel produ cer has an appropriate financial incentive to ensure that giant reed or napier grass does not spread beyond the intended borders. In this way , we believe such a mechanism would be consistent with the lifecycle anal ys es for these pathway s , which assume no significant indirect GHG emissions from*** E.O. 12866 Review

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Page **32** of **47** remediation activities. Since the expected result would be additional assurance that preventive measures are taken, it would further decrease the likelihood of spread and associated remediation activities occurring, which is consistent with the assumption of the lifecycle anal ys is. EPA believes that a robust RMP as discussed above, combined where appropriate with the additional incentive to prevent spread of the feedstock resulting from a financial assurance mechanis m, would be consistent with EPA’s assumption of no significant indirect greenhouse gas emissions associated with the spread and subsequent remediation of these feedstocks grown for biofuel production for the RFS program. To further reduce the risk of growth beyond the planting area for these feedstocks, EPA is also including additional consequences for producers whose feedstock grows beyond the intended planting area. The reporting requirements include a requirement that the producer notify EPA and USDA as soon as practicable after detection of unintended growth outside the planted area. We are also including provisions wherein growth outside the planting area could result in a suspension or withdrawal of the producer’s registration and ability to generate R INs via that pathway until remediation activities were completed and the potential for further spread was addressed. Prohibiting the generation of RINs in this situation would provide an incentive for the producer to conduct better oversight of the feedsto ck supplier and prevent unintended growth beyond the planting area, and would also ensure that the generation of RINs via these pathway s is consistent with the underlying lifecycle anal ys is. In addition, a producer’s failure to fulfill the requirements of its Risk Mitigation Plan would
- be a violation of the regulations and would subject the producer to potential civil penalties. The risk of penalties would provide an incentive for adherence to the terms of the Risk Mitigation Plan and reduce the likelihood of an invasive spread. However , we might also consider not applying these penalties in cases where the*** E.O. 12866 Review

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Page **33** of **47** producer undertook timely and effective remediation of the spread. In such a case, any environmental or other damage caused b y the growth of the feedst ock beyond its intended planting area would be cured. **III. Statutory and Executive Order Reviews A.**  **Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review**  Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a "significant regulatory

action.” Accordingl y, EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Orders 12866 and 13563 (76 FR 3821 , January

21, 2011) and an y changes made in response to OMB recommendations have been documented in the docket for this action. **B. Paperwork Reduction Act**  The modifications to the RFS regulations contained in this rule are within the scope of the information collection requirements previously submitted to the Office of Management and Budget (OMB) for the RFS regulations. OMB has approved the information col lection requirements contained in the existing regulations at 40 CFR part 80, subpart M under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control numbers 2060

– 0637 and 2060
- 0640. The OMB control numbers for E PA’s regulations in 40 CFR are listed in 40 CFR part 9. **C. Regulatory Flexibility Act**  The Regulatory

Flexibility

Act (RFA) generall y requires an agency to prepare a regulatory

flexibility

analy sis of any

rule subject to notice and comment rulemaking*** E.O. 12866 Review

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Page **34** of **47** requirem ents under the Administrative Procedure Act or an y other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of today ’s rule on small entities, small entity is defined as: (1) A small business as defined b y the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a sma ll governmental jurisdiction that is a government of a city , count y, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not - for
- profit enterprise which is independently owned and operat ed and is not dominant in its field. After considering the economic impacts of this action on small entities, I certify that this rule will not have a significant economic impact on a substantial number of small entities. This rule will not impose any

new requirements on small entities. The relativel y small changes this rule makes to the RFS regulations do not impact small entities. **D. Unfunded Mandates Reform Act**  This rule does not contain a federal mandate that may result in expenditures of $100 million o r more for State, local, and tribal governments, in the aggregate, or the private sector in any one year. We have determined that this action will not result in expenditures of $100 million or more for the above parties and thus, this rule is not subject t o the requirements of sections 202 or 205 of UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory

requirements that might significantly or uniquel y affect small governments. It only

applies to gas oline, diesel, and renewable fuel producers, importers,*** E.O. 12866 Review

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Page **35** of **47** distributors and marketers and makes relatively minor corrections and modifications to the RFS regulations. **E. Executive Order 13132 (Federalism)**  This action does not have federalism implications. It wil l 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, as specified in Executive Order 13132. Thi s action only applies to gasoline, diesel, and renewable fuel producers, importers, distributors and marketers and makes relativel y minor corrections and modifications to the RFS regulations. Thus, Executive Order 13132 does not apply to this action. **F. Exec**  **utive Order 13175 (Consultation and Coordination With Indian Tribal Governments**  **)** This rule does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It applies to gasoline, diesel, and renewable fuel producer s, importers, distributors and marketers. This action makes relatively minor corrections and modifications to the RFS regulations, and does not impose any enforceable duties on communities of Indian tribal governments. Thus, Executive Order 13175 does not apply to this action. **G. Executive Order 13045: Protection of Children From Environmental Health**  **Risks and Safety Risks**  EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as appl yi ng only to those regulatory

actions that concern health or safet y risks, su ch that the anal ys is required under*** E.O. 12866 Review

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Page **36** of **47** section 5

– 501 of the EO has the potential to influence the regulation. This action is not subject to EO 13045 because it does not establish an environmental standard intended to mitigate health or safet y risks. **H. Executiv**  **e Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use**  This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May

22, 2001)), because it is not likely to have a significant adverse effect on the supply , distribution, or use of energy . This rulemaking does not change any programmatic structural component of the RFS regulatory requirements. This rulemaking does not add any new requirements for obligated parties under the program or mandate the use of any of the new pathway s contained in the rule. This rulemaking only makes a determination to qualify new fuel pathway s under the RFS regulations, creating further opportunity and flexibility

for compliance with the Energy

Independence and Securit y Act of 2007 (EISA) mandates. **I. National Technology Transfer and Advancement Act**  Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (‘‘NTTAA’’), Public Law 104

– 113, 12(d) (15 U.S.C. 272 note) direc ts EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods , sampling procedures, and business practices) that are developed or adopted b y voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary

con sensus standards.*** E.O. 12866 Review

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Page **37** of **47** This action does not involve technical standards. Therefore, EPA did not consider the use of an y voluntary consensus standards. **J. Executive Order 12898: Federal Actions To Address Environmental Justice in**  **Minority Populations and Low -**  **Income Populations**  Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low
income populations in the Uni ted States. EPA has determined that this rule will not have disproportionatel y high and adverse human health or environmental effects on minority or low
- income populations because it does not affect the level of protection provided to human health or the e nvironment. These amendments would not relax the control measures on sources regulated b y the RFS regulations and therefore would not cause emissions increases from these sources.
**IV. Statutory Provisions and Legal Authority**  Statutory authorit y for the r

ule finalized today

can be found in section 211(o) of the Clean Air Act, 42 U.S.C. 7545(o). Additional support for today 's rule comes from Section 301(a) of the Clean Air Act, 42 U.S.C. 7414, 7542, and 7601(a). **Regulation of Fuels and Fuel Additives: Additional Qualifying Renewable Fuel Pathways under the Renewable Fuel Standard Program;**  **Final Rule**  **Approving Renewable Fuel***** E.O. 12866 Review

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Page **38** of **47 Pathways**  **for Giant Reed ( Arundo Donax** **) and Napier Grass ( Pennisetum Purpureum**  **)**
List of Sub

jects in 40 CFR Part 80 Environmental protection, Administrative practice and procedure, Agriculture, Air pollution control, Confidential business information, Diesel Fuel, Energy , Forest and Forest Products, Fuel additives, Gasoline, Imports, Penalties, Petroleum, Reporting and recordkeeping requirements. Dated: ____________________________

__________________________________ Bob Perciasepe , Acting Administrator Billing Code: 6550 - 50 - P*** E.O. 12866 Review

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Page **39** of **47** For the reasons set forth in the preamble, 40 CFR part 80 is amende d as follows:
**PART 80**
**— REGULATION OF FUELS AND FUEL ADDITIVES**  1. The authorit y citation for part 80 continues to read as follows: Authority : 42 U.S.C. 7414, 7521(1), 7545 and 7601(a). 2. Section 80.1426 (f)(1) is amended b y adding new feedstocks to Rows K, L, and N of Table 1, and b y adding paragraph (f)(14) 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 t ype Feedstock Production process requirements D - Code

* * * * * K Cellulosic Diesel, Jet Fuel and Heating Oil Cellulosic Biomass from crop residue, slash, pre
commercial thinnings and tree residue, annual covercrops, switchgrass, miscanthus, Energy

cane, Arundo donax , and Pennisetum purpureum ; cellulosic components of Any 3*** E.O. 12866 Review

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Page **40** of **47** separated yard waste; cellulosic components o f separated food waste; and cellulosic components of separated MSW L Cellulosic diesel, jet fuel and heating oil Cellulosic Biomass from crop residue, slash, pre
commercial thinnings and tree residue, annual covercrops, switchgrass, miscanthus, energy

cane, Arundo donax , and Pennisetum purpureum ; cellulosic components of separated yard waste; cellulosic components o f separated food waste; and cellulosic components of separated MSW Any 7

* * * * * N Naphtha Cellulosic biomass from switchgrass, miscanthus, energy cane , Arundo donax , and Pennisetum purpureum Gasification and upgrading 3

* * * * * (14) A producer or importer of renewable fuel using giant reed ( Arundo donax ) or napier grass ( Pennisetum purpureum ) as a feedstock may generate RINs for that renewable fuel only if:*** E.O. 12866 Review

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Page **41** of **47** (A) The feedstock is produced, managed, transported, collected, monitored , and processed acco rding to a Risk Mitigation Plan approved by EPA under the registration procedures specified in 80.1450(b)(1)(ix)(A); or, (B) EPA has determined that there is not a significant likelihood of spread beyond the planting area of the feedstock used for production of the renewable fuel. Any determination that Arundo donax or Pennisetum purpureum does not present a significant likeliho od of spread beyond the planting area must be based upon clear and compelling evidence, including information and supporting data submitted by the producer. Such a determination must be made by EPA as specified in 80.1450(b)(1)(ix)(B) . * * * * * 3. Section 80.1450 is amended by adding paragraph (b)(1)(ix) to read as follows: **§ 80.1450 What are the registration requirements under the RFS program?**  * * * * ( b)* * * (1)* * * (ix)(A) For a producer of renewable fuel made from Arundo donax or Pennisetum purpureu m per 80.1426(f)(14)(A): (1) A Risk Mitigation Plan (Plan) that demonstrates the growth of Arundo donax or Pennisetum purpureum will not pose a significant likelihood of spread beyond the planting area of the feedstock used for production of the renewable fuel. The Plan must identify and incorporate best management practices (BMPs) into the production, management, transport, collection, monitoring, and processing of the feedstock. To the extent practicable, the Risk Mitigation Plan should utilize a Hazard Analy sis Critical Control Point (HACCP) approach to examine each*** E.O. 12866 Review

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Page **42** of **47** phase of the pathway

to identify

spread reduction steps. BMPs should include the development of mitigation strategies and plans to minimize escape and other impacts (e.g., minimize soil distur bance), incorporate desirable traits (e.g., sterility or reduced seed production), develop and implement dispersal mitigation protocols prior to cultivation, develop multiple year eradication controls. Eradication controls should follow an approach of earl y detection and rapid response (EDRR) to unintended spread. EDRR efforts should demonstrate the likelihood that invasions will be halted while still localized and identify and employ

cooperative networks, communication forums, and consultation processes wi th federal, state, and local agencies. The Risk Mitigation Plan must provide for the following: (a) Monitoring and reporting for a period extending from two growing seasons prior to planting through crop production and extending beyond crop production for a sufficient period after the field is no longer used for feedstock production to ensure no remnants of giant reed or napier grass survive or spread . (b) Monitoring must include production areas and the larger area encompassing the production areas, exte nding to the distance of potential propagation of the feedstock species, or further if necessary . (c) Monitoring must reflect the likelihood of spread specific to the feedstock. (d) A closure plan providing for the destruction and removal of feedstock f rom the growing area upon abandonment b y the feedstock grower or end of production. (e) A plan providing for an independent third part y who will audit the monitoring and reporting conducted in accordance with the RMP on an annual basis, subject to approva l of a different timeframe by EPA. (2) A letter from the United States Department of Agriculture (“USDA”) to the feedstock grower stating USDA’s conclusions and the bases therefore regarding whether the Arundo donax or*** E.O. 12866 Review

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Page **43** of **47** Pennisetum purpureum does or does not present a significant likelihood of spread beyond the planting area of the feedstock used for production of the renewable fuel as proposed b y the producer. This letter shall also include USDA’s recommendation of whether it is appropriate to require the use of a financial mechanism to ensure the availability of financial resources sufficient to cover reasonable potential remediation costs associated with the s pread of giant reed or napier grass beyond the intended planting areas. Incoordination with USDA, EPA shall identify for the producer the appropriate USDA office from which the letter should originate. (3) Identification of all federal, state, regional, and local requirements related to invasive species that are applicable for the feedstock at the growing site and at all points between the growing site and the fuel production site. (4) A cop y of all state and local growing permits held by the feedstock grower . (5) A communication plan for notifying EPA’s Office of Transportation and Air Quality , USDA’s Animal and Plant Health Inspection Service, and an y relevant state, regional, and local authorities as soon as possible after identification of the issue i f the feedstock is detected outside planted area. (6) A cop y of the agreement between the feedstock grower and fuel producer establishing all rights and duties of the parties related to the Risk Mitigation Plan and any other activities and liability asso ciated with the prevention of the spread of Arundo don ax and/or Pennisetum purpureum outside of the intended planting area. (7) A cop y of the agreement between the fuel producer and an independent third party describing how the third part y will audit the monitoring and reporting conducted in accordance with the RMP on an annual basis, subject to approval of a different timeframe b y EP A .*** E.O. 12866 Review

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Page **44** of **47** (8) EPA may require additional information, including but not limited to a demonstration that there is an adequate fin ancial mechanism (such as a state
- administered fund, bond, or certificate of deposit) to ensure the availability of financial resources sufficient to cover reasonable potential remediation costs associated with the spread of giant reed or napier grass beyo nd the intended planting areas. (B) For a producer of renewable fuel made from Arundo donax or Pennisetum purpureum per 80.1426(f)(14)(B): (1) Clear and compelling evidence, including information and supporting data, to support a determination by

EPA that Arundo Donax or Pennisetum purpureum does not present a significant likelihood of spread beyond the planting area of the feedstock used for production of the renewable fuel. Evidence must include data collected from similar environments (soils, temperatures, precipitation, USDA Hardiness Zones) as the proposed feedstock production project site and accepted by the scientific community . Such a demonstration should include consideration of the elements of a Risk Mitigation Plan set forth in 80.1450(b)(1)(ix)(A), full y disclose the potential invasiveness of the feedstock, and explain why a Risk Mitigation Plan is not needed to make the required determination. (2) A letter from the United States Department of Agriculture (“USDA”) to the producer stating USDA’s conclusions and the bases therefore regarding whether the Arundo donax or Pennisetum purpureum does or does not present a significant likel ihood of spread beyond the planting area of the feedstock used for production of the renewable fuel as proposed by the producer or importer. In coordination with USDA, EPA shall identify for the producer the appropriate USDA office from which the letter sh ould originate . * * * * **** E.O. 12866 Review

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Page **45** of **47** 4. Section 80.1451 is amended b y adding paragraph (h) to read as follows: **§1451 What are the reporting requirements under the RFS program?**  * * * (h) Producers or importers of renewable fuel made from Arundo donax or Pennisetum p urpureum per 80.1426(f)(14) must report: (1) A summary

of the ty pes and quantities of feedstocks used in that quarter. (2) Maps or electronic data identifying the boundaries of the land where each ty pe of feedstock was produced. If electronic data identif yi ng a plot of land have been submitted previously , producers and RIN
- generating importers may submit a cross
- reference to that electronic data. (3) Bills of lading, product transfer documents or other commercial documents showing the quantity of feedstock purchased from each area identified above, and showing each transfer of custody of the feedstock from the location where it was produced to the renewable fuel production facility. (4) On an annual basis, the average and total size and prior use of lands p lanted with Arundo donax or Pennisetum purpureum , the average and total size and prior use of lands set aside to control the spread of these crops, and a description and explanation of any change in land use from the previous ye ar . (5) As available, an y u

pdated information related to the Risk Mitigation Plan. An updated Risk Mitigation Plan must be approved b y the Administrator prior to its implementation.*** E.O. 12866 Review

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Page **46** of **47** (6) Within 5 business day s after detection and in accordance with the Risk Mitigation Plan, if applic able, an y detected growth of Arundo donax or Pennisetum purpureum outside the intended planting area . (7) The report from an independent third party providing the results of the audit of the monitoring and reporting conducted in accordance with the RMP on an annual basis, subject to approval of a different timeframe b y EPA.

* * * * *
5. Section 80.1454 is amended b y adding paragraph (b)(7) to read as follows: **§1454 What are the recordkeeping requirements under the RFS program?**  * * * * (b) * * * * (7) For an y producer of renewable fuel made from Arundo donax or Pennisetum purpureum per 80.1426(f)(14)(A), (i) records related to all requirements and duties set forth in the registration documents described in section 80.1450( b)(1)(ix)(A), including but n ot limited to the Risk Mitigation Plan, monitoring records and reports, and adherence to state, local and federal invasive species requirements and permits, and (ii) Records associated with feedstock purchases and transfers that identify where the feedstoc ks were produced and are sufficient to verify that feedstocks used were produced and transported in accordance with an EPA approved Risk Mitigation Plan or were produced on land that the EPA determined does not present a significant likelihood of spread be yo nd the planting area of the feedstock used for production of the renewable fuel, including: (i) Maps or electronic data identifying the boundaries of the land where each ty pe of feedstock was produced. (ii) Bills of lading, product transfer documents or other commercial documents showing the quantity of feedstock purchased from each area identified above, and showing each transfer of custody of the feedstock from the location where it was produced to the renewable fuel production facility.*** E.O. 12866 Review

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