nESTECIL 

29 January 2013 

Gina McCarthy, Assistant Administrator for the Office of Air and Radiation 

US EPA Headquarters 

Ariel Rios Building 

1200 Pennsylvania Avenue, N. W. 

Mail Code: 6101A 

Washington, DC 20460 

(202) 272-0167 

Re : Palm Waste Classification - Neste Oil Separated Food Waste Plan 

Dear Ms. McCarthy: 

On or about 24 July 2012, Neste Oil received a statement from the EPA that stated the 

following: 

The EPA will regard Palm Sludge oil recovered from palm oil mill effluent, 

Palm free fatty acids, and Palm oil recovered from bleaching earth 

(hereafter collectively palm waste) as "Non-cellulosic portions of 

separated food waste" so long as such wastes meet the following 

conditions: 

1. The palm waste would be permanently discarded if not used to make 

biofuel, or if not discarded, they would be used to make some nonbiofuel product whose revenue or cost savings represents a very 

small fraction of the revenue that would have been generated from 

the sale of the production of the primary product palm oil. 

2. The palm waste is from palm that was originally intended to be used 

in food production or derived from post consumer food . 

In the same statement, EPA further expanded its review of palm wastes to include PFAD 

as follows: 

In the interpretation ... of the RFS2 regulations, we concluded that palm 

fatty acid distillate (PFAD) qualifies under the existing RFS2 program as a 

waste product from the production of food . Our determination is that 

PFAD is a by-product in the production of palm oil and do not represent a 

primary product and are not the purpose for growing palms or extracting 

and purifying palm oil. While PFAD has some existing uses such as a 

supplemental energy source for boiler fuel, we conclude that these other 

uses are generally considered low value uses and removal of PFADs from 

such alternative uses will not substantially impact these other uses (e.g., 

decreasing the amount of PFAD used as boiler fuel will not substantially 

Neste Oil - Houston 

1800 West Loop South, Suite 1700 

Houston, Texas 77027-3219 USA 

Tel. (713) 407-4400 Telefax (713) 407-4480 
nESTECIL 

impact the availability of feedstock used for boiler fuel). Therefore we 

concluded that PFAD in the circumstances which were presented to EPA, 

is consistent with the description of a waste as included in the final RFS2 

rulemaking, assuming the material also meets the definition of renewable 

biomass and any and all other applicable compliance requirements 

established by rule. EPA reserves the right to reassess this determination 

at a later date should circumstances change. 

On 17 September 2012, Neste Oil Singapore Pte Ltd (EPA ID No 4137) submitted a 

separated food waste plan as required under the applicable regulations seeking 

approval to use palm sludge oil recovered from palm oil mill effluent, palm free fatty 

acids (palm acid oil), palm oil recovered from bleaching earth, palm fatty acid distillate 

and other palm oil derivatives (collectively "palm wastes") as non-cellulosic portions of 

separated food wastes and therefore classified as "biogenic waste oils/fats/greases" in 

reliance on the EPA's determinations as communicated above. However to date, Neste 

Oil has not received a response regarding its separated food waste plan submission 

despite numerous requests for status updates to various personnel within the Agency. 

It is our understanding that the EPA may be rethinking its previously articulated 

determination on the palm wastes' classification as waste products as well as the similar 

classification of other feedstock previously designated as waste product. If correct, 

Neste Oil has numerous concerns regarding this review of waste product designations. 

Specifically, based on the EPA's previous guidance, Neste Oil has invested significant 

capital and time in the form of improvements to its facilities to more efficiently process 

and refine EPA approved waste feedstock and to procure such feedstock. A change of 

determination mid-stream will cause significant and undue hardship to producers like 

Neste who acted in reliance on the agency's findings, will send negative signals to the 

market about the stability and reliability of the Renewable Fuel Standard, and will 

undermine the biofuel producing community's ability to obtain necessary quantities of 

qualifying feedstock required to produce the mandated gallons of biofuels. The 

unnecessary delay caused by the agency's inaction has created a large degree of 

uncertainty affecting Neste Oil's business decisions. 

Neste Oil believes EPA's initial assessment of qualifying PFAD and other palm wastes as 

a waste produce is correct. In fact, PFAD is a lower value product than many of the other 

feedstocks approved as waste products by EPA such as animal fat. The European Union 

and some Canadian provinces including Alberta and British Columbia consider PFAD to 

be a waste product. Further, efforts by some producers capable of using only firstgeneration, crop-based feedstocks to disqualify waste feedstocks appear to be 

misguided attempts to protect market share and are an affront to a 

feedstock/technology neutral platform to increase biofuel production. 

Additionally, it is important to note that the palm wastes are a separate and distinct 

feedstock from crude palm oil feedstock and other primary purpose palm oil derivatives. 
nESTEOIL 

While the agency is considering the lifecycle analysis of crude palm oil, it should not 

further delay confirmation of its approval of the palm waste streams and their separate, 

waste-product lifecycle considerations. 

Neste Oil believes that these palm wastes fall squarely within the definition of waste 

products as contemplated in the RFS regulations. Absent compelling lifecycle analysis to 

the contrary, the EPA should discontinue review of its classification and confirm that 

palm wastes including palm sludge oil, palm from bleaching earth, palm free fatty acids, 

and palm fatty acid distillate, are wastes and qualify as biogenic waste oils/fats/greases 

and therefore eligible for generating D4 or DS RINs under the current regulations. 

We renew our urging that the EPA act with a reasonable time for the convenience and 

necessity of Neste Oil's ability to comply with the RFS and to not succumb to inertia. 

Specifically, even if a preliminary determination has not been made, a response notice 

to Neste Oil indicating the status of the review and an anticipated time frame for EPA to 

inform Neste Oil of the agency's preliminary determination is greatly appreciated and 

expected. 

In order to communicate additional facts and circumstances regarding this issue and its 

effect of biofuel producers like Neste Oil, we request a meeting with you and those who 

will be responsible for reviewing and approving Neste's separated food waste plan. 

Respectfully, 

~4~-4. Neste Oil US, Inc. 

Neville Fernandes, President 

cc: Michael McAdams, President Advanced Biofuels Association 
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