Summary of Interagency Working Comments on Draft Language under EO 

12866 and EO 13563 Interagency Review. Subject to Further Policy Review.

EO 12866 Interagency Comments on U.S. Environmental Protection Agency (EPA) draft final

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

Biomass-Based Diesel Volume for 2017,” RIN 2060-AS22

Regulatory Flexibility Analysis

Unfortunately, the RFA section of the RFS rule still relies heavily on the prior RFA work to justify 

the certification rather than standing on its own. The second paragraph blurs the line between 

findings appropriate to this rulemaking and the “impacts already addressed” in the 2010 

rulemaking. By repeating that the SBREFA panel for the 2010 rule was for the entire RFS program, 

it further confuses the factual basis for the certification. The third paragraph doesn’t clarify the 

situation, since it talks about the conclusions of the 2010 FRFA, not the conclusions associated with 

the current rule in clearly different circumstances.

The third paragraph also misses the mark, because it refers to requirements “beyond those already 

analyzed” when the actual concern should be “beyond those already imposed.” Since the RFS isn’t 

imposed without the annual rulemakings, prior analysis isn’t relevant. This should be particularly 

obvious when EPA is exercising a waiver authority as the agency didn’t project using it in the 

agency’s 2010 analysis. Similarly, EPA should not make the argument that it is reducing burden 

from the 2010 analysis by exercising the waiver authority. The correct comparison is against the 

world in the absence of the rule, not a world under a default rule that hasn’t been issued. To put 

that in a different way, were the 2016 rule delayed until 2017, it would likely reflect the real world 

usage in 2016, just as the current rule attempts to reflect the 2014 usage. For that reason, the 

default standards in the statute shouldn’t be used as baseline for evaluation of impacts.

The certification should start with the line in the third paragraph: “available information shows that 

the impact on small entities from implementation of this rule will not be significant.” 

In the discussion of alternatives, EPA should recognize that the alternatives it should be considering 

in this rulemaking are alternative volume standards, including broader and narrower exercise of 

the waiver. A broader waiver would reduce the impacts on small entities, but may not be 

supported in law or policy.
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On pages 107-109, EPA goes into detail about why they rejected UNICA numbers. The commenter suggests 

that this language in the last paragraph, in particular, be softened. First of all, the commenter does not agree 

that the volumes of imports and exports are minor, especially when you look at them as a percentage of 

imports and exports. Is EPA only looking at them as percentage of domestic consumption? Secondly, we 

would request that the very last two sentences that are highlighted be deleted. We believe it is not necessary 

to speculate on matters such as whether an increase in sugarcane ethanol imports would decrease 

opportunities for other biofuels (such as biodiesel) that have more lifecycle GHG reductions and therefore 

those imports are “less beneficial.”

Given that advanced biofuels are a subset of total renewable fuel, the 2016 volume requirement 

for advanced biofuels will reflect our assessment of the portion of total ethanol and biodiesel, as 

well as other renewable fuels, that should be required as an advanced biofuel.

 With regard to ethanol, the primary source of advanced biofuel is imported sugarcane 

ethanol.[1] As described in the NPRM, the supply of imported sugarcane ethanol continues to be 

highly uncertain and there is little indication that this uncertainty will change in 2016. For 

instance, both total ethanol imports and imports of Brazilian sugarcane ethanol have varied 

significantly since 2004, as shown in Figure II.F-1.

Figure II.F-1

Historical Imports of Ethanol

 The Brazilian Sugarcane Industry Association (UNICA) provided comments suggesting 

that 2 billion gallons of sugarcane ethanol could be supplied to the U.S. in 2016. After further 

investigation, we do not believe that this level of import is reasonably achievable in 2016. To 

begin with, exports of 2 billion gallons from Brazil to the U.S. would be significantly higher than 

total exports to all countries in all previous years, as shown below.

 

[1] In certain situations, advanced ethanol can also be produced from sorghum and food wastes.
Figure II.F-2

Total Exports of Ethanol From Brazil to All Countries

Source: www.unicadata.com.br

In recent years, ethanol exports from Brazil to countries other than the U.S. averaged more than 

300 million gallons each year, and Brazil has recently increased ethanol exports to China.[2] If 

this were continue in 2016, total exports from Brazil would need to reach 2.4 billion gallons. We 

do not believe that the information that UNICA provided supports this extremely high level of 

exports.

 Although UNICA cites a variety of factors that can affect ethanol exports and which are 

beyond the control of Brazilian mills and the EPA, it nevertheless based its estimate of potential 

exports to the U.S. solely on a combination of Brazilian ethanol production capacity and 

opportunities created by the RFS program itself. We believe that UNICA has underestimated the 

uncertainty associated with other market factors, including the E10 blendwall in the U.S., 

changes in domestic demand for ethanol in Brazil, and competing world demand for sugar. With 

regard to sugar, it is true that Brazilian production has been declining for the last several 

years. However, between 2005 and 2015, Brazilian production of sugar has increased just as 

often as it has decreased, demonstrating that there is uncertainty with regard to worldwide 

demand for sugar. We believe it would be imprudent to assume that the downward trend in 

sugar production in recent years will continue in 2016.

 More importantly, while production of sugarcane has increased moderately in Brazil over 

the last several years, total gasoline consumption in Brazil also continues to climb.[3] This leaves 

little room for substantial increases in exports of ethanol in 2016. In fact, total consumption of 

 

[2] "Ethanol acts as lone bright spot amid China commodity gloom - Reuters," docket EPA-HQ-OAR-2015-0111.

[3] "Gasoline Demand in Brazil: an empirical analysis," Thaís Machada de Matos Vilela, Pontifical Catholic University of 

Rio de Janeiro, Figure 2.
petroleum in Brazil has increased at a rate of about 4.9% over the last several years, while the 

rate of sugarcane production has only grown at a rate of about 2.2%.[4]

 Several stakeholders also pointed to the potential for so-called "circle trade" between the 

U.S. and Brazil as a reason to either reduce the applicable volume requirement for advanced 

biofuel in such a way as to limit imports of sugarcane ethanol, and/or to increase the required 

volume of BBD. In this circle trade, corn-based ethanol is exported from the U.S. to Brazil at the

same time that sugarcane ethanol is exported from Brazil to the U.S. This has undoubtedly 

occurred in the past, though the volumes have represented a minority of all ethanol imports and 

exports between the two countries.[5] However, there has been a high degree of variability in 

sugarcane ethanol imports into the U.S., and also a high degree of variability in the export of 

corn ethanol to Brazil. In some years the U.S. exported more ethanol to Brazil than Brazil 

exported to the U.S., while in other years the opposite occurred. This indicates that there are a 

wide variety of factors driving imports and exports of ethanol, and “circle trade” does not appear 

to have been the major one in the past. Nevertheless, to the degree that circle trade increased in 

response to higher RFS volume requirements for advanced biofuel, the GHG benefits associated 

with the advanced biofuel volume requirement would be reduced. Thus while sugarcane ethanol 

qualifies as an advanced biofuel and is therefore eligible to participate in satisfying whatever 

advanced biofuel standard we establish, increased circle trade could reduce the GHG benefits of 

higher advanced biofuel volume requirements.

 

[4] "Brazilian sugarcane production and petroleum consumption," docket EPA-HQ-OAR-2015-0111.

[5] Between 2010 and 2014, circle trade represented about 21% of all ethanol imports and exports between the U.S. and 

Brazil. See "Analysis of circle trade between the US and Brazil," docket EPA-HQ-OAR-2015-0111.