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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1095 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1095

To amend the Clean Air Act to convert the renewable fuel standard into 
          a low-carbon fuel standard, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 20, 2009

   Mr. Wyden introduced the following bill; which was read twice and 
       referred to the Committee on Environment and Public Works

_______________________________________________________________________

                                 A BILL

 
To amend the Clean Air Act to convert the renewable fuel standard into 
          a low-carbon fuel standard, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``America's Low-Carbon Fuel Standard 
Act of 2009''.

SEC. 2. LOW-CARBON FUEL PROGRAM.

    (a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545) 
is amended by striking subsection (o) and inserting the following:
    ``(o) Low-Carbon Fuel Program.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Baseline lifecycle greenhouse gas 
                emissions.--The term `baseline lifecycle greenhouse gas 
                emissions' means the average lifecycle greenhouse gas 
                emissions, as determined by the Administrator, after 
                notice and opportunity for comment, for transportation 
                fuel sold or distributed as transportation fuel in 
                2005.
                    ``(B) Lifecycle greenhouse gas emissions.--The term 
                `lifecycle greenhouse gas emissions' means the 
                aggregate quantity of greenhouse gas emissions 
                (including direct emissions and significant indirect 
                emissions such as significant emissions from land use 
                changes), as determined by the Administrator, related 
                to the full fuel lifecycle, including all stages of 
                fuel and feedstock production and distribution, from 
                feedstock generation or extraction through the 
                distribution and delivery and use of the finished fuel 
                to the ultimate consumer, where the mass values for all 
                greenhouse gases are adjusted to account for their 
                relative global warming potential.
                    ``(C) Low-carbon fuel.--The term `low-carbon fuel' 
                means transportation fuel (including renewable fuel, 
                electricity, hydrogen, and other forms of energy) that 
                has lifecycle greenhouse gas emissions, as determined 
                by the Administrator, after notice and opportunity for 
                comment, that on annual average basis are equal to at 
                least the following percentage less than baseline 
                lifecycle greenhouse gas emissions determined in 
                accordance with the following table:

``Calendar year:                       Applicable percentage less than 
                                                    baseline lifecycle 
                                              greenhouse gas emissions:
        2015...............................................       20.0 
        2016...............................................       21.5 
        2017...............................................       23.0 
        2018...............................................       24.5 
        2019...............................................       26.0 
        2020...............................................       27.5 
        2021...............................................       29.0 
        2022...............................................       30.5 
        2023...............................................       32.0 
        2024...............................................       33.5 
        2025...............................................       35.0 
        2026...............................................       36.5 
        2027...............................................       38.0 
        2028...............................................       39.5 
        2029...............................................       41.0 
        2030...............................................       42.5 
        2031 and thereafter................................  Percentage
                                                       determined under
                                                  paragraph (2)(B)(ii).
                    ``(D) Renewable biomass.--The term `renewable 
                biomass' means each of the following:
                            ``(i) Planted crops and crop residue 
                        harvested from agricultural land cleared or 
                        cultivated at any time prior to December 19, 
                        2007, that is either actively managed or 
                        fallow, and nonforested.
                            ``(ii) Planted trees, bioenergy crops, and 
                        tree residue from actively managed tree 
                        plantations on non-Federal land cleared at any 
                        time prior to December 19, 2007, including land 
                        belonging to an Indian tribe or an Indian 
                        individual, that is held in trust by the United 
                        States or subject to a restriction against 
                        alienation imposed by the United States.
                            ``(iii) Slash, brush, and those trees that 
                        are byproducts of ecological restoration, 
                        disease or insect infestation control, or 
                        hazardous fuels reduction treatments and do not 
                        exceed the minimum size standards for 
                        sawtimber, harvested--
                                    ``(I) in ecologically sustainable 
                                quantities, as determined by the 
                                appropriate Federal land manager; and
                                    ``(II) from National Forest System 
                                land or public land (as defined in 
                                section 103 of the Federal Land Policy 
                                and Management Act of 1976 (43 U.S.C. 
                                1702)), other than--
                                            ``(aa) components of the 
                                        National Wilderness 
                                        Preservation System;
                                            ``(bb) wilderness study 
                                        areas;
                                            ``(cc) inventoried roadless 
                                        areas;
                                            ``(dd) old growth or late 
                                        successional forest stands 
                                        unless biomass from the stand 
                                        is harvested as a byproduct of 
                                        an ecological restoration 
                                        treatment that fully maintains, 
                                        or contributes toward the 
                                        restoration of, the structure 
                                        and composition of an old 
                                        growth forest stand taking into 
                                        account the contribution of the 
                                        stand to landscape fire 
                                        adaptation and watershed 
                                        health, and retaining large 
                                        trees contributing to old-
                                        growth structure;
                                            ``(ee) components of the 
                                        National Landscape Conservation 
                                        System; and
                                            ``(ff) National Monuments.
                            ``(iv) Animal waste material and animal 
                        byproducts.
                            ``(v) Slash and pre-commercial thinnings 
                        that are from non-Federal forestland, including 
                        forestland belonging to an Indian tribe or an 
                        Indian individual, that are held in trust by 
                        the United States or subject to a restriction 
                        against alienation imposed by the United 
                        States, but not forests or forestland that are 
                        ecological communities with a global or State 
                        ranking of critically imperiled, imperiled, or 
                        rare pursuant to a State Natural Heritage 
                        Program, old growth forest, or late 
                        successional forest.
                            ``(vi) Biomass from land in any ownership 
                        obtained from the immediate vicinity of 
                        buildings and other areas regularly occupied by 
                        people, or of public infrastructure, at risk 
                        from wildfire.
                            ``(vii) Algae.
                            ``(viii) Municipal solid waste, including 
                        separated yard waste or food waste, including 
                        recycled cooking and trap grease.
                    ``(E) Renewable fuel.--The term `renewable fuel' 
                means fuel that is--
                            ``(i) produced from renewable biomass; and
                            ``(ii) used to replace or reduce the 
                        quantity of fossil fuel present in a 
                        transportation fuel.
                    ``(F) Transportation fuel.--The term 
                `transportation fuel' means fuel for use in motor 
                vehicles, motor vehicle engines, or nonroad vehicles 
                (except for ocean-going vessels).
            ``(2) Program.--
                    ``(A) Regulations.--
                            ``(i) In general.--Not later than January 
                        31, 2015, the Administrator shall promulgate 
                        regulations to ensure that the applicable 
                        percentage determined under subparagraph (B) of 
                        the transportation fuel sold or introduced into 
                        commerce in the United States, on an annual 
                        average basis, is low-carbon fuel.
                            ``(ii) Provisions of regulations.--
                        Regardless of the date of promulgation, the 
                        regulations promulgated under clause (i)--
                                    ``(I) shall contain compliance 
                                provisions applicable to producers, 
                                refiners, blenders, distributors, and 
                                importers, as appropriate, to ensure 
                                that the requirements of this paragraph 
                                are met; but
                                    ``(II) shall not--
                                            ``(aa) restrict geographic 
                                        areas in which low-carbon fuel 
                                        may be used; or
                                            ``(bb) impose any per-
                                        gallon obligation for the use 
                                        of low-carbon fuel.
                    ``(B) Applicable volumes.--
                            ``(i) Calendar years 2015 through 2030.--
                        For the purpose of subparagraph (A), the 
                        applicable percentage of the transportation 
                        fuel sold or introduced into commerce in the 
                        United States, on an annual average basis, that 
                        is low-carbon fuel for each of calendar years 
                        2015 through 2030 shall be determined by the 
                        Administrator, in consultation with the 
                        Secretary of Energy, in accordance with the 
                        following table:

``Calendar year:                              Applicable percentage of 
                                              transportation fuel sold 
                                               that is low-carbon fuel:
        2015...............................................       10.0 
        2016...............................................       11.5 
        2017...............................................       13.0 
        2018...............................................       14.5 
        2019...............................................       16.0 
        2020...............................................       17.5 
        2021...............................................       19.0 
        2022...............................................       20.5 
        2023...............................................       22.0 
        2024...............................................       23.5 
        2025...............................................       25.0 
        2026...............................................       26.5 
        2027...............................................       28.0 
        2028...............................................       29.5 
        2029...............................................       31.0 
        2030...............................................       32.5.
                            ``(ii) Subsequent calendar years.--
                                    ``(I) In general.--For the purposes 
                                of subparagraph (A), the applicable 
                                percentage of the transportation fuel 
                                sold or introduced into commerce in the 
                                United States (except in noncontiguous 
                                States or territories), on an annual 
                                average basis, that is low-carbon fuel 
                                for calendar year 2031 and each 
                                subsequent calendar year shall be 
                                determined by the Administrator, in 
                                consultation with the Secretary of 
                                Energy, based on a review of the 
                                implementation of the program during 
                                calendar years specified in the tables 
                                established under this subsection, and 
                                an analysis of--
                                            ``(aa) the impact of the 
                                        production and use of low-
                                        carbon fuel on the environment, 
                                        including on air quality, 
                                        climate change, conversion of 
                                        wetland, ecosystems, wildlife 
                                        habitat, water quality, and 
                                        water supply;
                                            ``(bb) the impact of low-
                                        carbon fuel on the energy 
                                        security of the United States;
                                            ``(cc) the expected annual 
                                        rate of future commercial 
                                        production of low-carbon fuel;
                                            ``(dd) the impact of low-
                                        carbon fuel on the 
                                        infrastructure of the United 
                                        States, including 
                                        deliverability of materials, 
                                        goods, and products other than 
                                        low-carbon fuel, and the 
                                        sufficiency of infrastructure 
                                        to deliver and use low-carbon 
                                        fuel;
                                            ``(ee) the impact of the 
                                        use of low-carbon fuel on the 
                                        cost to consumers of 
                                        transportation fuel and on the 
                                        cost to transport goods; and
                                            ``(ff) the impact of the 
                                        use of low-carbon fuel on other 
                                        factors, including job 
                                        creation, the price and supply 
                                        of agricultural commodities, 
                                        rural economic development, and 
                                        food prices.
                                    ``(II) Deadline.--The Administrator 
                                shall promulgate rules establishing the 
                                applicable volumes under this clause 
                                not later than 14 months before the 
                                first year for which the applicable 
                                percentage will apply.
            ``(3) Applicable percentages.--
                    ``(A) Provision of estimate of volumes of gasoline 
                sales.--Not later than October 31 of each of calendar 
                years 2005 through 2021, the Administrator of the 
                Energy Information Administration shall provide to the 
                Administrator of the Environmental Protection Agency an 
                estimate, with respect to the following calendar year, 
                of the volumes of transportation fuel and low-carbon 
                fuel projected to be sold or introduced into commerce 
                in the United States.
                    ``(B) Determination of applicable percentages.--
                            ``(i) In general.--Not later than November 
                        30 of each of calendar years 2015 through 2029, 
                        based on the estimate provided under 
                        subparagraph (A), the Administrator of the 
                        Environmental Protection Agency shall determine 
                        and publish in the Federal Register, with 
                        respect to the following calendar year, the 
                        low-carbon fuel obligation that ensures that 
                        the requirements of paragraph (2) are met.
                            ``(ii) Required elements.--The low-carbon 
                        fuel obligation determined for a calendar year 
                        under clause (i) shall--
                                    ``(I) be applicable to refineries, 
                                blenders, and importers, as 
                                appropriate;
                                    ``(II) be expressed in terms of a 
                                volume percentage of transportation 
                                fuel sold or introduced into commerce 
                                in the United States; and
                                    ``(III) subject to subparagraph 
                                (C), consist of a single applicable 
                                percentage that applies to all 
                                categories of persons specified in 
                                subclause (I).
                    ``(C) Adjustments.--In determining the applicable 
                percentage for a calendar year, the Administrator shall 
                make adjustments to prevent the imposition of redundant 
                obligations on any person specified in subparagraph 
                (B)(ii)(I).
            ``(4) Modification of greenhouse gas reduction 
        percentages.--
                    ``(A) In general.--In the regulations promulgated 
                under paragraph (2)(A)(i), the Administrator may adjust 
                the required percentage reductions in lifecycle 
                greenhouse gas emissions for low-carbon fuel to a lower 
                percentage if the Administrator determines that 
                generally the reduction is not commercially feasible 
                for low-carbon fuel made using a variety of feedstocks, 
                technologies, and processes to meet the applicable 
                reduction.
                    ``(B) Amount of adjustment.--In promulgating 
                regulations under this paragraph, the specified percent 
                reduction in greenhouse gas emissions from low-carbon 
                fuel may not be reduced more than 10 percentage points 
                below the percentage otherwise required under this 
                subsection.
                    ``(C) Adjusted reduction levels.--
                            ``(i) In general.--An adjustment in the 
                        percentage reduction in greenhouse gas levels 
                        shall be the minimum practicable adjustment for 
                        low-carbon fuel.
                            ``(ii) Maximum achievable level.--The 
                        adjusted greenhouse gas reduction shall be 
                        established at the maximum achievable level, 
                        taking cost in consideration, allowing for the 
                        use of a variety of feedstocks, technologies, 
                        and processes.
                    ``(D) Subsequent adjustments.--
                            ``(i) In general.--After the Administrator 
                        has promulgated a final rule under paragraph 
                        (2)(A)(i) with respect to the method of 
                        determining lifecycle greenhouse gas emissions, 
                        the Administrator may not adjust the percent 
                        greenhouse gas reduction levels unless the 
                        Administrator determines that there has been a 
                        significant change in the analytical basis used 
                        for determining the lifecycle greenhouse gas 
                        emissions.
                            ``(ii) Criteria and standards.--If the 
                        Administrator makes the determination that an 
                        adjustment is required, the Administrator may 
                        adjust the percent reduction levels through 
                        rulemaking using the criteria and standards 
                        established under this paragraph.
                            ``(iii) 5-year review.--If the 
                        Administrator makes any adjustment under this 
                        paragraph, not later than 5 years thereafter, 
                        the Administrator shall review and revise 
                        (based on the same criteria and standards as 
                        required for the initial adjustment) the level 
                        as adjusted by the regulations.
            ``(5) Credit program.--
                    ``(A) In general.--The regulations promulgated 
                under paragraph (2)(A) shall provide for the generation 
                of an appropriate quantity of credits by any person 
                that refines, blends, imports, or distributes 
                transportation fuel that contains a quantity of low-
                carbon fuel that is greater than the quantity required 
                under paragraph (2).
                    ``(B) Use of credits.--A person that generates 
                credits under subparagraph (A) may use the credits, or 
                transfer all or a portion of the credits to another 
                person, for the purpose of complying with paragraph 
                (2).
                    ``(C) Duration of credits.--A credit generated 
                under this paragraph shall be valid to demonstrate 
                compliance for the 12-month period beginning on the 
                date of generation.
                    ``(D) Inability to generate or purchase sufficient 
                credits.--The regulations promulgated under paragraph 
                (2)(A) shall include provisions allowing any person 
                that is unable to generate or purchase sufficient 
                credits to meet the requirements of paragraph (2) to 
                carry forward a low-carbon fuel deficit on condition 
                that the person, in the calendar year following the 
                year in which the low-carbon fuel deficit is created--
                            ``(i) achieves compliance with the low-
                        carbon fuel requirement under paragraph (2); 
                        and
                            ``(ii) generates or purchases additional 
                        low-carbon fuel credits to offset the low-
                        carbon fuel deficit of the previous year.
                    ``(E) Credits for additional low-carbon fuel.--The 
                Administrator may promulgate regulations providing--
                            ``(i) for the generation of an appropriate 
                        quantity of credits by any person that refines, 
                        blends, imports, or distributes additional low-
                        carbon fuel specified by the Administrator; and
                            ``(ii) for the use of the credits by the 
                        generator, or the transfer of all or a portion 
                        of the credits to another person, for the 
                        purpose of complying with paragraph (2).
            ``(6) Waivers.--
                    ``(A) In general.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, may waive the requirements of this 
                subsection in whole or in part on petition by 1 or more 
                States, by any person subject to the requirements of 
                this subsection, or by the Administrator on the 
                Administrator's own motion, by reducing the national 
                percentage of low-carbon fuel required under paragraph 
                (2)--
                            ``(i) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that implementation of 
                        the requirement would severely harm the economy 
                        or environment of a State, a region, or the 
                        United States; or
                            ``(ii) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that there is an 
                        inadequate domestic supply of low-carbon fuel.
                    ``(B) Petitions for waivers.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, shall approve or disapprove a 
                petition for a waiver of the requirements of paragraph 
                (2) not later than 90 days after the date on which the 
                petition is received by the Administrator.
                    ``(C) Termination of waivers.--A waiver granted 
                under subparagraph (A) shall terminate after 1 year, 
                but may be renewed by the Administrator after 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy and after public notice and 
                opportunity for comment.
                    ``(D) Modification of applicable percentages.--
                            ``(i) In general.--In the case of any table 
                        established under this subsection, if the 
                        Administrator waives at least 20 percent of the 
                        applicable percentage requirement specified in 
                        the table for 2 consecutive years, or at least 
                        50 percent of the percentage requirement for a 
                        single year, the Administrator shall promulgate 
                        regulations (not later than 1 year after 
                        issuing the waiver) that modify the applicable 
                        volumes specified in the table concerned for 
                        all years following the final year to which the 
                        waiver applies, except that no such 
                        modification in applicable percentages shall be 
                        made for any year before calendar year 2016.
                            ``(ii) Administration.--In promulgating the 
                        regulations, the Administrator shall comply 
                        with the processes, criteria, and standards 
                        established under paragraph (2)(B)(ii).
            ``(7) Low-carbon market concentration analysis.--
                    ``(A) Analysis.--
                            ``(i) In general.--Not later than January 
                        1, 2015, and annually thereafter, the Federal 
                        Trade Commission shall perform a market 
                        concentration analysis of the low-carbon fuel 
                        production, import, and distribution industries 
                        using the Herfindahl-Hirschman Index to 
                        determine whether there is sufficient 
                        competition among industry participants to 
                        avoid price-setting and other anticompetitive 
                        behavior.
                            ``(ii) Scoring.--For the purpose of scoring 
                        under clause (i) using the Herfindahl-Hirschman 
                        Index, all marketing arrangements among 
                        industry participants shall be considered.
                    ``(B) Report.--Not later than December 1, 2015, and 
                annually thereafter, the Federal Trade Commission shall 
                submit to Congress and the Administrator a report on 
                the results of the market concentration analysis 
                performed under subparagraph (A)(i).
            ``(8) Periodic reviews.--To allow for the appropriate 
        adjustment of the requirements described in paragraph (2)(B), 
        the Administrator shall conduct periodic reviews of--
                    ``(A) existing technologies;
                    ``(B) the feasibility of achieving compliance with 
                the requirements; and
                    ``(C) the impacts of the requirements of this 
                subsection on each individual and entity described in 
                paragraph (2).
            ``(9) Effect on other provisions.--
                    ``(A) In general.--Subject to subparagraph (B), 
                nothing in this subsection, or regulations promulgated 
                under this subsection, affects the regulatory status of 
                carbon dioxide or any other greenhouse gas, or expands 
                or limits regulatory authority regarding carbon dioxide 
                or any other greenhouse gas, for purposes of other 
                provisions (including section 165) of this Act.
                    ``(B) Administration.--Subparagraph (A) shall not 
                affect implementation and enforcement of this 
                subsection.''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on January 1, 2015.

SEC. 3. TRANSITION PROVISIONS.

    (a) Definitions.--Section 211(o)(1) of the Clean Air Act (42 U.S.C. 
7545(o)(1)) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following:
                    ``(A) Additional renewable fuel.--
                            ``(i) In general.--The term `additional 
                        renewable fuel' means fuel that--
                                    ``(I) is--
                                            ``(aa) produced from 
                                        renewable biomass; or
                                            ``(bb) low-carbon fuel;
                                    ``(II) is used to replace or reduce 
                                the quantity of fossil fuel present 
                                in--
                                            ``(aa) transportation fuel;
                                            ``(bb) home heating oil; or
                                            ``(cc) aviation jet fuel; 
                                        and
                                    ``(III) has lifecycle greenhouse 
                                gas emissions, as determined by the 
                                Administrator, after notice and 
                                opportunity for comment, that are at 
                                least 20 percent less than baseline 
                                lifecycle greenhouse gas emissions.'';
            (2) by redesignating subparagraphs (I) through (L) as 
        subparagraphs (J) through (M), respectively; and
            (3) by inserting after subparagraph (H) the following:
                    ``(I) Low-carbon fuel.--The term `low-carbon fuel' 
                means renewable fuel that has lifecycle greenhouse gas 
                emissions, as determined by the Administrator, after 
                notice and opportunity for comment, that are at least 
                20 percent less than baseline lifecycle greenhouse gas 
                emissions.''.
    (b) Credits for Additional Renewable Fuel.--Section 211(o)(5) of 
the Clean Air Act (42 U.S.C. 7545(o)(5)) is amended by striking 
subparagraph (A) and inserting the following:
                    ``(A) Credits for additional renewable fuel.--
                            ``(i) In general.--Not later than 180 days 
                        after the date of enactment of the America's 
                        Low-Carbon Fuel Standard Act of 2009, the 
                        Administrator shall issue regulations 
                        providing--
                                    ``(I) for the generation of an 
                                appropriate quantity of credits by any 
                                person that produces, refines, blends, 
                                or imports additional renewable fuels 
                                or low-carbon fuels specified by the 
                                Administrator; and
                                    ``(II) for the use of the credits 
                                by the generator, or the transfer of 
                                all or a portion of the credits to 
                                another person, for the purpose of 
                                complying with paragraph (2).
                            ``(ii) Increased credit.--For each of 
                        calendar years 2012 through 2014, the 
                        Administrator shall increase the amount of the 
                        credit provided under clause (i) in proportion 
                        to the extent to which the lifecycle greenhouse 
                        gas emissions of the additional renewable fuel 
                        is less than baseline lifecycle greenhouse gas 
                        emissions.''.
                                 <all>
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