Summary of Interagency Working Comments on Draft Language under

EO12866 Interagency Review. Subject to Further Policy Review.

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 1. Waiver Credit Price Calculation. One commenter suggested that EPA incorporate a discussion 

of how the waiver credit price was calculated in the preamble. 

2. Determination of Aggregate Compliance Approach for Renewable Biomass from Foreign 

Countries. One commenter asked whether the aggregate compliance approach for renewable 

biomass from foreign countries be construed as technical barriers to trade? Why or why not? 

3. Impact of weather, water and climate as a risk factor to the mandatory setting of biofuel 

standards based on projected biofuel production estimates. There is a reference to such 

considerations on page 80, but the commenter would recommend a small section addressing 

"environmental risks and uncertainties" be included and variability in seasonal weather, water and 

climate be considered in the projection of the available feedstock as well as the derived advanced 

biofuel standard and the total renewable fuel standard production estimates. This may also include 

the provision of environmental predictions internationally because the report includes fuel security 

and the standards take into consideration foreign biofuel supplies and trade. 

Suggested language for this new section: 

Fuel volume production will be constrained or promoted due to climate change and local 

variability. The risk to biofuel production and volume supply will also vary with availability and 

quality of fresh water as supplied by snow pack, rain, runoff and inundations. Many of the same 

weather risks that are faced by agriculture will impact biofuel volume including extreme events, 

frost and icing, severe winds and fires, hail and sleet, and extended periods of rain and drought. 

This applies to traditional biofuels such as corn and cellulose sources as well as emerging sources 

such as algae. 

Climate predictions on the seasonal to interannual (El Nino/La Nina) are available to improve the 

volume and efficiency estimates. Weather and water predictions are also critical to shorter term 

supply management and volume production analysis. 

4. General Comment. The issue of production level goals affects industry confidence. Seemingly 

high and audacious production goals can potentially spur the industry to success. Lower goals 

depress the industry’s enthusiasm because lower goals send a signal that the USG will not support 

investment in the burgeoning advanced biofuels industry, thereby increasing the risk associated 

with these investments. The same can be said of the reluctance to sell RINs.

The supply-side analysis has been adequately addressed but more consideration could be given to 

the demand side of the equation. For instance, the analysis could be strengthened if infrastructure 

constraints that make the use of higher levels of ethanol hard to achieve were considered. It has 

been difficult to assess the validity of the rule’s analysis of the overall ethanol market in the United 

States without additional data on ethanol exports. None of the supply/demand balance sheet 
Summary of Interagency Working Comments on Draft Language under

EO12866 Interagency Review. Subject to Further Policy Review.

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representations of the sector from EIA includes fuel ethanol exports. Without this information, any 

overall assessment of the domestic ethanol sector is incomplete. 

Comment: Throughout the report, EPA could more prominently acknowledge the uncertainty 

associated with any projected production estimates.

5. U.S. Commercial Availability of Cellulosic Ethanol. On page 16, the rule text states, “EPA is 

aware of several companies exploring the possibility of cellulosic biofuel production in Brazil. 

However none of these companies appear ready to make cellulosic biofuels commercially available 

in the United States.” 

Comment: KL Energy and Petrobras project production of 4 million gallons per year will come 

online only in 2013. 

6. Typo. The word “million” is missing in 2 spots on page 23, last paragraph.

7. Achieving Biodiesel Production Goals. Hitting the projected production goals for biodiesel 

will not be a capacity issue for the industry whose name plate capacity on the 170 biodiesel plants 

is 2,600 million gallons production capacity per year in the United States. However, with no 

biodiesel tax incentive in place, and with higher prices of soy oil and of animal fats and yellow 

grease, producers are reluctant to produce biodiesel. 

8. Historical Biodiesel Production. With respect to projected production capacity of biodiesel, 

page 27 and page 31 tables which examines the historical production of biomass –based biodiesel 

and the volumetric requirements for 2011 (Page 27 and Page 31).

Table II.C-1 Historical Biodiesel Production, Net Exports, and Consumption (million 

gallons)(Source: EIA Monthly Energy Review, August 2010) 

 Domestic 

Production 

Net Exports 

Domestic 

Consumption 

2007 490 132 358 

2008 678 362 316 

2009 505 189 315 

Table III.A-1 Volume Requirements for 2011 
Summary of Interagency Working Comments on Draft Language under

EO12866 Interagency Review. Subject to Further Policy Review.

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Actual Volume Ethanol Equivalent 

Volume 

Cellulosic biofuel 6.6 mill gal 6.0 mill gal 

Biomass-based diesel 0.80 bill gal 1.20 bill gal 

Advanced biofuel 1.35 bill gal 1.35 bill gal 

Renewable fuel 13.95 bill gal 13.95 bill gal 

Comment: Domestic consumption and production is falling, the price of soy oil, corn oil and animal 

fats does not give advantages for production from a feedstock price perspective. Outside of the RIN 

value, the commenter believes that the volume requirement for biomass-based diesel is not 

supported by domestic use, exports, or by the current state of producers in the domestic biodiesel 

industry. 

9. Future Biodiesel Production Prospects. The first paragraph on page 28 of the rule text states,

“Although biodiesel production appears to have been significantly affected by both the EU tariff on 

biodiesel from the U.S. and the expiration of the biodiesel tax credit, the fact that the U.S. biodiesel 

industry has produced higher volumes when it was economic for it to do so suggests that the 

industry has the capability to produce greater volumes in the future under the appropriate 

circumstances.” 

Comment: The following change is suggested to more conservatively re-cast the future biodiesel 

market characterization.

Although biodiesel production appears to have been significantly affected by both the EU tariff on 

biodiesel from the U.S. and the expiration of the biodiesel tax credit, the fact that the U.S. biodiesel 

industry has produced higher volumes when it was economic for it to do so suggests that the 

industry may have the capability to produce greater volumes in the future under the appropriate 

circumstances. Production assets have been shuttered and liquidations have taken place where 

creditors have sold plant assets at salvage value; therefore, ramping up production will require 

time and reinvestment. 

10. Assessment of the Domestic Aggregate Compliance Approach. Page 10 of the rule text states,

“Based on data provided by the USDA, we have estimated that U.S. agricultural land reached 396.5 

million acres in 2010, and thus did not exceed the 2007 baseline acreage.......While the 2010 estimate for 

U.S. agricultural land does not exceed the 397 million acre trigger point for further investigation, EPA, 

with the help of USDA, will nonetheless conduct further investigation into this matter.” 
Summary of Interagency Working Comments on Draft Language under

EO12866 Interagency Review. Subject to Further Policy Review.

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 However, page 81 of the rule text goes on to state, “Based on data provided by the USDA Farm Service 

Agency (FSA) and Natural Resources Conservation Service (NRCS), we have estimated that U.S. 

agricultural land reached approximately 398 million acres in 2010, and thus did not exceed the 2007 

baseline acreage. However, this total acreage estimate is greater than the 397 million acre trigger point 

for further investigation, therefore EPA, with the help of USDA, will look further into the relevant data 

and review the factors related to U.S. agricultural land use over the coming months.” 

While both paragraphs include statements regarding how EPA will conduct further investigation to verify 

these numbers (whether exceeding or not exceeding the threshold) the inconsistency of the two 

paragraphs is confusing to the reader. Please clarify and include additional language in the preamble 

text acknowledging the uncertainty of the estimate and the factors contributing to this uncertainty. 

 
Summary of Interagency Working Comments on Draft Language under

EO12866 Interagency Review. Subject to Further Policy Review.

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1) This final rule, for only 2011, addresses the gap in projected cellulosic biofuel 

production (for 2011), which is estimated to be well below the statutory requirement of 

0.25 billion gallons of ethanol equivalent. 

2) EPA’s estimate for achievable domestic cellulosic production is 6.0 million gallons of 

ethanol equivalent, in 2011. The lower limit in the proposed rule was 6.5 million 

gallons. Currently there are only 5 facilities in the U.S. producing cellulosic biofuels at 

commercial scale. The proposed rule used production estimates from 7 facilities; two of 

those facilities have since decided not to produce cellulosic biofuels in 2011. Therefore 

EPA’s downward revision is a reasonable and informed decision. 

3) It is encouraging that production of cellulosic biofuels is projected to greatly increase in 

2012. EPA is currently aware of more than 20 facilities representing over 300 million 

gallons of production that are targeting commercial production of cellulosic biofuels in 

2012. If the majority of these facilities begin production in 2012, cellulosic biofuel 

production may possibly achieve EISA’s requirement of 0.25 billion gallons of ethanol 

equivalent. 

4) EPA’s approach to allowing foreign countries to adopt an aggregate approach for 

confirming land use for biofuel production is also reasonable. For a foreign government 

to meet the requirement and adopt this approach, they would have to have a very 

similar process in place to EPA’s aggregate approach for the U.S., involving high-quality, 

publicly-available data (from satellites, censuses, etc.). 

a) It is encouraging that EPA is using lessons learned from use of the aggregate 

approach in the U.S., to inform the process of allowing foreign countries to petition 

to also use the aggregate approach. 

b) It is encouraging that EPA has proposed to allow public comment on each petition.