II 

110TH CONGRESS 

1ST SESSION S.1324 

To amend the Clean Air Act to reduce greenhouse gas emissions from 

transportation fuel sold in the United States. 

IN THE SENATE OF THE UNITED STATES 

MAY 7, 2007 

Mr. REID (for Mr. OBAMA (for himself and Mr. HARKIN)) 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 reduce greenhouse gas 

emissions from transportation fuel sold in the United States. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘National Low-Carbon 

5 Fuel Standard Act of 2007’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds that— 

8 (1) the dependence of the United States on im9 ported oil imposes tremendous burdens on the econmstockstill on PROD1PC66 with BILLS

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1 omy, foreign policy, and military of the United 

2 States; 

3 (2) according to the Energy Information Ad4 ministration, 60 percent of the crude oil and petro5 leum products consumed in the United States are 

6 imported; 

7 (3) at a cost of approximately $75 per barrel of 

8 oil, people in the United States remit more than 

9 $600,000 per minute to other countries for crude oil 

10 and petroleum imports; 

11 (4) a significant percentage of those imports 

12 originate in countries controlled by regimes that are 

13 unstable or openly hostile to the interests of the 

14 United States; 

15 (5) dependence on oil production from those 

16 countries contributes to the volatility of domestic 

17 and global markets and corresponding increase in oil 

18 prices paid by consumers in the United States (com19 monly known as a ‘‘risk premium’’); 

20 (6) the Energy Information Administration 

21 projects that the total petroleum demand in the 

22 United States will increase by 23 percent between 

23 2006 and 2026, while domestic crude oil production 

24 is expected to decrease by 11 percent, resulting in 

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1 an anticipated 28-percent increase in petroleum im2 ports; 

3 (7) absent significant action, the United States 

4 will become more vulnerable to oil price increases 

5 and more dependent on foreign oil; 

(8) 2 6 ⁄3 of all domestic oil use occurs in the 

7 transportation sector, which is 97 percent reliant on 

8 petroleum-based fuels; 

9 (9) passenger vehicles, including light trucks 

10 under 10,000 pounds gross vehicle weight, represent 

11 more than 60 percent of the oil used in the trans12 portation sector; 

13 (10) the oil used in the transportation sector 

accounts for approximately 1 14 ⁄3 of the emissions in 

15 the United States of the greenhouse gases that 

16 cause global warming; 

17 (11) to avoid catastrophic global warming, the 

18 United States should take decisive action, in con19 junction with other countries, to reduce greenhouse 

20 gas emissions by 60 to 80 percent from 1990 levels 

21 by 2050; 

22 (12) transitioning the transportation sector in 

23 the United States to a more efficient use of low-car24 bon petroleum alternatives is essential both to in25 creasing domestic energy security and reducing globmstockstill on PROD1PC66 with BILLS

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1 al warming pollution, but that transition must be ac2 complished while avoiding adverse impacts on the 

3 environment; and 

4 (13) it is urgent, essential, and feasible to re5 duce emissions of greenhouse gases, enhance na6 tional security by reducing dependence on oil, and 

7 promote economic well-being without sacrificing 

8 land, water, and air quality by enacting energy poli9 cies that motivate environmental performance. 

10 SEC. 3. RENEWABLE FUEL STANDARD. 

11 The table contained in section 211(o)(2)(B)(i) of the 

12 Clean Air Act (42 U.S.C. 7545(o)(2)(B)(i)) is amended— 

13 (1) in the row expressing applicable volume of 

14 renewable fuel (in billions of gallons) for calendar 

15 year 2009, by striking ‘‘6.1’’ and inserting ‘‘12.0’’; 

16 (2) in the row expressing applicable volume of 

17 renewable fuel (in billions of gallons) for calendar 

18 year 2010, by striking ‘‘6.8’’ and inserting ‘‘13.0’’; 

19 (3) in the row expressing applicable volume of 

20 renewable fuel (in billions of gallons) for calendar 

21 year 2011, by striking ‘‘7.4’’ and inserting ‘‘14.0’’; 

22 and 

23 (4) in the row expressing applicable volume of 

24 renewable fuel (in billions of gallons) for calendar 

25 year 2012, by striking ‘‘7.5’’ and inserting ‘‘15.0’’. 

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1 SEC. 4. NATIONAL LOW-CARBON FUEL STANDARD. 

2 (a) DEFINITIONS.—Section 241 of the Clean Air Act 

3 (42 U.S.C. 7581) is amended— 

4 (1) by striking ‘‘For purposes of this part—’’ 

5 and inserting ‘‘In this part:’’; 

6 (2) by redesignating paragraphs (1), (2), (3), 

7 (4), (5), (6), and (7) as paragraphs (12), (2), (10), 

8 (1), (4), (5), and (3), respectively, and moving those 

9 paragraphs so as to appear in numerical order; 

10 (3) by inserting after paragraph (5) (as redesig11 nated by paragraph (2)) the following: 

12 ‘‘(6) FUEL EMISSION BASELINE.—The term 

13 ‘fuel emission baseline’ means the average lifecycle 

14 greenhouse gas emissions per unit of energy of the 

15 average of conventional transportation fuels in com16 merce in the United States during the period of cal17 endar years 2005 through 2007. 

18 ‘‘(7) GREENHOUSE GAS.—The term ‘greenhouse 

19 gas’ means any of— 

20 ‘‘(A) carbon dioxide; 

21 ‘‘(B) methane; 

22 ‘‘(C) nitrous oxide; 

23 ‘‘(D) hydrofluorocarbons; 

24 ‘‘(E) perfluorocarbons; and 

25 ‘‘(F) sulfur hexafluoride. 

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1 ‘‘(8) LIFECYCLE GREENHOUSE GAS EMIS2 SIONS.—The term ‘lifecycle greenhouse gas emis3 sions’ means, with respect to a fuel, the aggregate 

4 quantity of greenhouse gases emitted during produc5 tion, feedstock extraction, distribution, and use of 

6 the fuel, as determined by the Administrator. 

7 ‘‘(9) LOW-CARBON FUEL.— 

8 ‘‘(A) IN GENERAL.—The term ‘low-carbon 

9 fuel’ means fuel produced, to the maximum ex10 tent practicable, in the United States— 

11 ‘‘(i) that meets the requirements of an 

12 appropriate American Society for Testing 

13 and Materials standard; and 

14 ‘‘(ii) the lifecycle greenhouse gas emis15 sions of which are lower than the fuel 

16 emission baseline, as determined by the 

17 Administrator. 

18 ‘‘(B) EXCLUSIONS.—The term ‘low-carbon 

19 fuel’ does not include fuel produced from bio20 mass derived from— 

21 ‘‘(i) designated national interest land 

22 (such as land included in a national wild23 life refuge, national park, national monu24 ment, national forest, or national grass25 land); or 

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1 ‘‘(ii) any— 

2 ‘‘(I) old-growth forest; 

3 ‘‘(II) roadless area within a na4 tional forest; 

5 ‘‘(III) wilderness study area; 

6 ‘‘(IV) protected native grassland; 

7 or 

8 ‘‘(V) lawfully designated intact, 

9 rare, threatened, or endangered eco10 system.’’; and 

11 (4) by inserting after paragraph (10) (as redes12 ignated by paragraph (2)) the following: 

13 ‘‘(11) OBLIGATED PARTY.— 

14 ‘‘(A) IN GENERAL.—The term ‘obligated 

15 party’ means an obligated party as described in 

16 section 80.1106 of title 40, Code of Federal 

17 Regulations (or a successor regulation). 

18 ‘‘(B) RELATED TERM.—The term ‘any and 

19 all of the products’, when used with respect to 

20 an obligated party, means diesel and aviation 

21 fuel to be included in the volume used to cal22 culate the requirements applicable to the obli23 gated party under section 250.’’. 

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1 (b) NATIONAL LOW-CARBON FUEL STANDARD.— 

2 Part C of title II of the Clean Air Act (42 U.S.C. 7581 

3 et seq.) is amended— 

4 (1) by redesignating section 250 (42 U.S.C. 

5 7590) as section 251; and 

6 (2) by inserting after section 249 (42 U.S.C. 

7 7589) the following: 

8 ‘‘SEC. 250. NATIONAL LOW-CARBON FUEL STANDARD. 

9 ‘‘(a) IN GENERAL.—Not later than January 1, 2009, 

10 the Administrator shall, by regulation— 

11 ‘‘(1) establish a fuel emission baseline based on 

12 the average lifecycle greenhouse gas emissions per 

13 unit of energy of the average of conventional trans14 portation fuels in commerce in the United States 

15 during the period of calendar years 2005 through 

16 2007; 

17 ‘‘(2) identify qualifying low-carbon transpor18 tation fuels based on— 

19 ‘‘(A) whether the lifecycle greenhouse gas 

20 emissions of a fuel are lower, per unit of energy 

21 delivered by use of a specific quantity of the 

22 fuel, than the fuel emission baseline, including 

23 the percentage greenhouse gas emission reduc24 tion provided by the fuel to the fuel emission 

25 baseline; 

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1 ‘‘(B) whether a fuel— 

2 ‘‘(i) achieves a substantial reduction 

3 in petroleum content over the lifecycle of 

4 the fuel; and 

5 ‘‘(ii) otherwise contributes to the en6 ergy security of the United States; and 

7 ‘‘(C) with respect to calculation of the 

8 lifecycle greenhouse gas emissions of the fuels 

9 used in vehicles that run on electricity or a hy10 drogen fuel, the quantity of energy delivered by 

11 use of the fuel, which shall be determined by 

12 calculating the product obtained by multi13 plying— 

14 ‘‘(i) a unit of energy delivered by use 

15 of the electricity or hydrogen fuel; and 

16 ‘‘(ii) an adjustment factor determined 

17 by the Administrator to reflect the sub18 stantial lifecycle greenhouse gas benefits of 

19 using the electricity or hydrogen fuel, on a 

20 per-mile basis, resulting from reasonably 

21 anticipated energy efficiency of an aver22 age— 

23 ‘‘(I) battery electric vehicle; 

24 ‘‘(II) plug-in hybrid electric vehi25 cle; or 

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1 ‘‘(III) hydrogen fuel cell vehicle; 

2 and 

3 ‘‘(3) establish a low-carbon fuel certification 

4 and marketing process— 

5 ‘‘(A) to certify fuels that qualify as low6 carbon fuels under this section; 

7 ‘‘(B) to make those certifications available 

8 to consumers; and 

9 ‘‘(C) to label and market low-carbon fuels. 

10 ‘‘(b) ENVIRONMENTAL SUSTAINABILITY STAND11 ARDS.—Not later than January 1, 2012, the Adminis12 trator shall also identify qualifying low-carbon transpor13 tation fuels based on environmental sustainability stand14 ards established under section 211(t)(2)(B). 

15 ‘‘(c) REQUIREMENTS APPLICABLE TO OBLIGATED

16 PARTIES.— 

17 ‘‘(1) REQUIREMENTS.— 

18 ‘‘(A) CALENDAR YEARS 2010 THROUGH

19 2024.—Not later than January 1, 2010, the Ad20 ministrator shall, by regulation, require each 

21 obligated party to reduce, through the use of 

22 low-carbon fuels and improvements in the pro23 duction of conventional fuels, the average 

24 lifecycle greenhouse gas emissions per unit of 

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1 duced into commerce by the obligated party to 

2 a level that is, as determined by the Adminis3 trator, to the maximum extent practicable— 

4 ‘‘(i) by calendar year 2011, substan5 tially equivalent to the fuel emission base6 line; 

7 ‘‘(ii) by calendar year 2015, substan8 tially equivalent to at least 5 percent below 

9 the fuel emission baseline; and 

10 ‘‘(iii) by calendar year 2020, substan11 tially equivalent to at least 10 percent 

12 below the fuel emission baseline. 

13 ‘‘(B) CALENDAR YEAR 2025 AND THERE14 AFTER.—For calendar year 2025, and by not 

15 later than each fifth calendar year thereafter, 

16 the Administrator shall, by regulation, require 

17 each obligated party to reduce the average 

18 lifecycle greenhouse gas emissions per unit of 

19 energy of the aggregate quantity of fuels intro20 duced into commerce by the obligated party to 

21 a level that is, as determined by the Adminis22 trator, at least 13 percent below the fuel emis23 sion baseline (with respect to calendar year 

24 2025), and at least 2 percent below the most 

25 recent percentage reduction (with respect to 

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1 each fifth calendar year thereafter), unless the 

2 Administrator, in coordination with the Sec3 retary of Agriculture and the Secretary of En4 ergy, establishes an alternative required per5 centage reduction based on— 

6 ‘‘(i) a review of the implementation of 

7 this paragraph during the period of cal8 endar years 2010 through 2020; 

9 ‘‘(ii) the expected annual rate of fu10 ture production of low-carbon fuel, and 

11 Category I ultra-low carbon fuel and Cat12 egory II ultra-low carbon fuel (as those 

13 terms are defined in subsection (p)); and 

14 ‘‘(iii) the practicability of complying 

15 with environmental sustainability stand16 ards referred to in subsection (b). 

17 ‘‘(2) FAILURE TO PROMULGATE REGULA18 TIONS.—If the Administrator does not promulgate 

19 regulations in accordance with this subsection, the 

20 average lifecycle greenhouse gas emissions of the ag21 gregate quantity of fuel introduced by an obligated 

22 party for calendar year 2012 shall be at least 3 per23 cent below the average lifecycle greenhouse gas emis24 sions of gasoline in commerce in the United States 

25 during calendar year 2007. 

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1 ‘‘(3) TEMPORARY SUSPENSION.—An obligated 

2 party may apply to the Administrator to receive a 

3 temporary suspension of the requirement to comply 

4 with this subsection if the obligated party dem5 onstrates to the satisfaction of the Administrator 

6 that events outside of the control of the obligated 

7 party could lead or have led to supply disruptions in 

8 the transportation fuel supply of the United States. 

9 ‘‘(4) ENFORCEMENT; PENALTIES.—In carrying 

10 out this subsection, the Administrator— 

11 ‘‘(A) shall enforce this subsection in ac12 cordance with the authority of the Adminis13 trator to enforce this Act; and 

14 ‘‘(B) may commence a civil action and as15 sess and collect penalties in accordance with the 

16 amounts and under the authority described in 

17 section 205. 

18 ‘‘(d) CREDITS.— 

19 ‘‘(1) IN GENERAL.—The regulations promul20 gated to carry out this section shall permit obligated 

21 parties to receive credits for achieving, during a cal22 endar year, greater reductions in lifecycle green23 house gas emissions of the fuel produced, distrib24 uted, or imported by the obligated party than are re25 quired under subsection (c). 

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1 ‘‘(2) METHOD OF CALCULATION.—The number 

2 of credits received by an obligated party described in 

3 paragraph (1) for a calendar year shall be calculated 

4 by multiplying— 

5 ‘‘(A) the aggregate quantity of fuel pro6 duced, distributed, or imported by the obligated 

7 party in the calendar year; and 

8 ‘‘(B) the difference between— 

9 ‘‘(i) the lifecycle greenhouse gas emis10 sions of that quantity of fuel; and 

11 ‘‘(ii) the maximum lifecycle green12 house gas emissions of that quantity of 

13 fuel permitted for the calendar year under 

14 subsection (c).’’. 

15 SEC. 5. ULTRA-LOW CARBON FUEL STANDARD. 

16 (a) IN GENERAL.—Section 211 of the Clean Air Act 

17 (42 U.S.C. 7545) is amended— 

18 (1) by redesignating the first subsection (r) (re19 lating to fuel and fuel additive importers and impor20 tation) as subsection (v) and moving that subsection 

21 so as to appear at the end of the section; and 

22 (2) by inserting after subsection (o) the fol23 lowing: 

24 ‘‘(p) ULTRA-LOW CARBON FUEL STANDARD.— 

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1 ‘‘(1) DEFINITIONS.—In this subsection and 

2 subsection (t): 

3 ‘‘(A) CATEGORY I ULTRA-LOW CARBON

4 FUELS.— 

5 ‘‘(i) IN GENERAL.—The term ‘Cat6 egory I ultra-low carbon fuel’ means fuel 

7 produced in the United States— 

8 ‘‘(I) that meets the requirements 

9 of an appropriate American Society 

10 for Testing and Materials standard; 

11 and 

12 ‘‘(II) the lifecycle greenhouse gas 

13 emissions of which are at least 50 per14 cent lower than the average lifecycle 

15 greenhouse gas emissions of conven16 tional transportation fuel, as deter17 mined by the Administrator. 

18 ‘‘(ii) EXCLUSIONS.—The term ‘Cat19 egory I ultra-low carbon fuel’ does not in20 clude fuel produced from biomass derived 

21 from— 

22 ‘‘(I) designated national interest 

23 land (such as land included in a na24 tional wildlife refuge, national park, 

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1 national monument, national forest, 

2 or national grassland); or 

3 ‘‘(II) any— 

4 ‘‘(aa) old-growth forest; 

5 ‘‘(bb) roadless area within a 

6 national forest; 

7 ‘‘(cc) wilderness study area; 

8 ‘‘(dd) protected native grass9 land; or 

10 ‘‘(ee) lawfully-designated in11 tact, rare, threatened, or endan12 gered ecosystem. 

13 ‘‘(B) CATEGORY II ULTRA-LOW CARBON

14 FUEL.— 

15 ‘‘(i) IN GENERAL.—The term ‘Cat16 egory II ultra-low carbon fuel’ means any 

17 fuel produced in the United States— 

18 ‘‘(I) that meets the requirements 

19 of an appropriate American Society 

20 for Testing and Materials standard; 

21 and 

22 ‘‘(II) the average lifecycle green23 house gas emissions of which are at 

24 least 75 percent lower than the aver25 age lifecycle greenhouse gas emissions 

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1 of conventional transportation fuel, as 

2 determined by the Administrator. 

3 ‘‘(ii) EXCLUSIONS.—The term ‘Cat4 egory II ultra-low carbon fuel’ does not in5 clude fuel produced from biomass derived 

6 from— 

7 ‘‘(I) designated national interest 

8 land (such as land included in a na9 tional wildlife refuge, national park, 

10 national monument, national forest, 

11 or national grassland); or 

12 ‘‘(II) any— 

13 ‘‘(aa) old-growth forest; 

14 ‘‘(bb) roadless area within a 

15 national forest; 

16 ‘‘(cc) wilderness study area; 

17 ‘‘(dd) protected native grass18 land; or 

19 ‘‘(ee) lawfully designated in20 tact, rare, threatened, or endan21 gered ecosystem. 

22 ‘‘(C) CONVENTIONAL TRANSPORTATION

23 FUEL.—The term ‘conventional transportation 

24 fuel’ means any fossil-fuel based transportation 

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1 fuel used in the United States as of the date of 

2 enactment of this subsection. 

3 ‘‘(D) LOW-CARBON FUEL.—The term ‘low4 carbon fuel’ has the meaning given the term in 

5 section 241. 

6 ‘‘(2) ULTRA-LOW CARBON FUEL.— 

7 ‘‘(A) REGULATIONS.— 

8 ‘‘(i) IN GENERAL.—Not later than 3 

9 years after the date of enactment of this 

10 subsection, the Administrator shall promul11 gate regulations to ensure that fuel sold or 

12 introduced into commerce in the United 

13 States (except in noncontiguous States or 

14 territories), on an annual average basis, 

15 contains at least the applicable volume of 

16 ultra-low carbon fuel determined in accord17 ance with subparagraph (B). 

18 ‘‘(ii) PROVISIONS OF REGULATIONS.— 

19 Regardless of the date of promulgation, 

20 the regulations promulgated under clause 

21 (i)— 

22 ‘‘(I) shall contain compliance pro23 visions applicable to obligated parties, 

24 as appropriate, to ensure that the remstockstill on PROD1PC66 with BILLS

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1 quirements of this paragraph are met; 

2 but 

3 ‘‘(II) shall not— 

4 ‘‘(aa) restrict geographic 

5 areas in which low-carbon trans6 portation fuel and ultra-low car7 bon fuel may be used; or 

8 ‘‘(bb) impose any per-gallon 

9 obligation for the use of those 

10 fuels. 

11 ‘‘(B) APPLICABLE VOLUME.— 

12 ‘‘(i) CALENDAR YEARS 2012 THROUGH

13 2025.—For the purpose of subparagraph 

14 (A), the applicable volume of Category I 

15 ultra-low carbon fuel and Category II 

16 ultra-low carbon fuel for any of calendar 

17 years 2012 through 2025 shall be deter18 mined in accordance with the following 

19 table: 

Calendar Year 

Total applicable volume 

of Category I ultra-low 

carbon fuel (billions of 

gallons) 

Total applicable volume 

of Category II ultra-low 

carbon fuel (billions of 

gallons) 

2012 0.5 0.25 

2014 1.5 0.75 

2016 3.0 1.5 

2018 5.0 2.5 

2020 8.0 4.0 

2022 11.0 6.0 

2025 13.0 8.0 

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1 ‘‘(ii) CALENDAR YEAR 2026 AND

2 THEREAFTER.—Subject to clause (iii), the 

3 applicable volume for calendar year 2026 

4 and each calendar year thereafter shall be 

5 determined by the Administrator, in co6 ordination with the Secretary of Agri7 culture and the Secretary of Energy, based 

8 on a review of the implementation of the 

9 program under this subsection during the 

10 period of calendar years 2012 through 

11 2025, including a review of— 

12 ‘‘(I) the impact of the use of Cat13 egory I ultra-low carbon fuel and Cat14 egory II ultra-low carbon fuel on— 

15 ‘‘(aa) environmental sustain16 ability standards established 

17 under subsection (t)(2)(B); 

18 ‘‘(bb) energy security; and 

19 ‘‘(cc) job creation; and 

20 ‘‘(II) the expected annual rate of 

21 future production of those fuels for 

22 use as blending components or re23 placements for a certain quantity of 

24 conventional fuel in the United States. 

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1 ‘‘(iii) MINIMUM APPLICABLE VOL2 UME.—For the purpose of subparagraph 

3 (A), the applicable volume for calendar 

4 year 2026 and each calendar year there5 after shall be equal to the product obtained 

6 by multiplying— 

7 ‘‘(I) the number of gallons of 

8 conventional transportation fuel that 

9 the Administrator estimates will be 

10 sold or introduced into commerce dur11 ing the calendar year; and 

12 ‘‘(II) the ratio that— 

13 ‘‘(aa) for the applicable vol14 ume of Category I ultra-low car15 bon fuel, 13,000,000,000 gallons 

16 of that fuel bears to the total 

17 number of gallons of conventional 

18 transportation fuel sold or intro19 duced into commerce in the 

20 United States in calendar year 

21 2025; and 

22 ‘‘(bb) for the applicable vol23 ume of Category II ultra-low car24 bon fuel, 8,000,000,000 gallons 

25 of that fuel bears to the total 

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1 number of gallons of conventional 

2 transportation fuel sold or intro3 duced into commerce in the 

4 United States in calendar year 

5 2025. 

6 ‘‘(3) APPLICABLE PERCENTAGES.— 

7 ‘‘(A) PROVISION OF ESTIMATE OF VOL8 UMES OF CONVENTIONAL FUELS SALES.—Not 

9 later than October 31 of each of calendar years 

10 2011 through 2025, the Administrator of the 

11 Energy Information Administration shall pro12 vide to the Administrator an estimate, with re13 spect to the following calendar year, of the vol14 umes of conventional fuels projected to be sold 

15 or introduced into commerce in the United 

16 States. 

17 ‘‘(B) DETERMINATION OF APPLICABLE

18 PERCENTAGES.— 

19 ‘‘(i) IN GENERAL.—Not later than 

20 November 30 of each of calendar years 

21 2012 through 2025, based on the estimate 

22 provided under subparagraph (A), the Ad23 ministrator shall determine and publish in 

24 the Federal Register, with respect to the 

25 following calendar year, the fuel obligations 

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1 that would meet the requirements of para2 graph (2). 

3 ‘‘(ii) REQUIRED ELEMENTS.—The fuel 

4 obligations determined for a calendar year 

5 under clause (i) shall— 

6 ‘‘(I) subject to subparagraph (C), 

7 be applicable to obligated parties, as 

8 appropriate; and 

9 ‘‘(II) be expressed in terms of a 

10 volume percentage of conventional 

11 fuels sold or introduced into com12 merce in the United States. 

13 ‘‘(C) ADJUSTMENTS.—In determining the 

14 applicable percentage for a calendar year, the 

15 Administrator shall make adjustments to pre16 vent the imposition of redundant obligations on 

17 any obligated party. 

18 ‘‘(4) CREDIT PROGRAM.— 

19 ‘‘(A) IN GENERAL.—The regulations pro20 mulgated pursuant to paragraph (2)(A) shall 

21 provide for the generation of an appropriate 

22 quantity of credits by obligated parties that in23 cludes a quantity of Category I ultra-low carbon 

24 fuel or Category II ultra-low carbon fuel that is 

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1 greater than the applicable quantity required 

2 under paragraph (2). 

3 ‘‘(B) USE OF CREDITS.—A person that 

4 generates a credit under subparagraph (A) may 

5 use the credit, or transfer all or a portion of the 

6 credit to another person, for the purpose of 

7 complying with regulations promulgated pursu8 ant to paragraph (2)(A). 

9 ‘‘(C) DURATION OF CREDITS.—A credit 

10 generated under this paragraph shall be valid— 

11 ‘‘(i) during the calendar year in which 

12 the credit was generated; and 

13 ‘‘(ii) for the 2-year period following 

14 that calendar year. 

15 ‘‘(D) INABILITY TO GENERATE OR PUR16 CHASE SUFFICIENT CREDITS.—The regulations 

17 promulgated pursuant to paragraph (2)(A) 

18 shall include provisions allowing any person 

19 that is unable to generate or purchase sufficient 

20 credits under subparagraph (A) to meet the re21 quirements of paragraph (2) by carrying for22 ward a credit generated during a previous year 

23 on the condition that the person, during the cal24 endar year following the year in which the 

25 ultra-low carbon fuel deficit is created— 

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1 ‘‘(i) achieves compliance with the fuel 

2 requirements under paragraph (2); and 

3 ‘‘(ii) generates or purchases additional 

4 credits under subparagraph (A) to offset 

5 the deficit of the previous year. 

6 ‘‘(5) WAIVERS.— 

7 ‘‘(A) IN GENERAL.—The Administrator, in 

8 consultation with the Secretary of Agriculture 

9 and the Secretary of Energy, may waive the re10 quirements of paragraph (2), in whole or in 

11 part, on receipt of a petition of 1 or more 

12 States by reducing the national quantity of Cat13 egory I ultra-low carbon fuel or Category II 

14 ultra-low carbon fuel in the conventional trans15 portation fuel pool required under paragraph 

16 (2) based on a determination by the Adminis17 trator, after public notice and opportunity for 

18 comment, that— 

19 ‘‘(i) implementation of the require20 ment would severely harm the economy or 

21 environment of a State, a region, or the 

22 United States; or 

23 ‘‘(ii) there is an inadequate domestic 

24 supply of the applicable ultra-low carbon 

25 fuel. 

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1 ‘‘(B) PETITIONS FOR WAIVERS.—Not later 

2 than 90 days after the date on which the Ad3 ministrator receives a petition under subpara4 graph (A), the Administrator, in consultation 

5 with the Secretary of Agriculture and the Sec6 retary of Energy, shall approve or disapprove 

7 the petition. 

8 ‘‘(C) TERMINATION OF WAIVERS.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clause (ii), a waiver under sub11 paragraph (A) shall terminate on the date 

12 that is 1 year after the date on which the 

13 waiver is provided. 

14 ‘‘(ii) EXCEPTION.—The Adminis15 trator, in consultation with the Secretary 

16 of Agriculture and the Secretary of En17 ergy, may extend a waiver under subpara18 graph (A), as the Administrator deter19 mines to be appropriate.’’. 

20 (b) CREDIT FOR CELLULOSIC ETHANOL.—Section 

21 211(o)(4) of the Clean Air Act (42 U.S.C. 7545(o)(4)) is 

22 amended by inserting ‘‘through calendar year 2017,’’ be23 fore ‘‘1 gallon’’. 

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1 (c) PERFORMANCE STANDARDS.—Section 211 of the 

2 Clean Air Act (42 U.S.C. 7545) is amended by inserting 

3 after subsection (s) the following: 

4 ‘‘(t) PERFORMANCE STANDARDS.— 

5 ‘‘(1) INTENSITY AND INDEX NUMBERS.—Not 

6 later than 2 years after the date of enactment of 

7 this subsection, the Administrator shall establish, for 

8 fuels blended with low-carbon fuel, and Category I 

9 ultra-low carbon fuel and Category II ultra-low car10 bon fuel, as part of the renewable identification 

11 number program of the Environmental Protection 

12 Agency— 

13 ‘‘(A) a carbon intensity number measured 

14 in the quantity of lifecycle greenhouse gas emis15 sions per unit of energy provided by use of the 

16 fuel; and 

17 ‘‘(B) a green index number representing 

18 the percentage reduction of greenhouse gas 

19 emissions achieved by the fuel as compared to 

20 the fuel emission baseline (as defined in section 

21 241). 

22 ‘‘(2) ENVIRONMENTAL SUSTAINABILITY

23 STUDY.— 

24 ‘‘(A) IN GENERAL.—Not later than 3 years 

25 after the date of enactment of this subsection, 

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1 the Administrator, in conjunction with the Sec2 retary of Agriculture and the Secretary of En3 ergy, and based on recommendations issued by 

4 the National Academy of Sciences, the Food 

5 and Agricultural Policy Research Institute, and 

6 not more than 2 other appropriate independent 

7 research institutes, as determined by the Ad8 ministrator, shall establish a methodology to as9 sess and quantify environmental changes associ10 ated with an increase in the volume of fuels re11 quired by this section, as compared with the ef12 fects of an increase in conventional transpor13 tation fuels otherwise displaced by this section, 

14 as applicable, for the purpose of negating over15 all adverse environmental impacts, particularly 

16 with respect to the effects on or changes in— 

17 ‘‘(i) land, air, and water quality, and 

18 quality of other resources, including 

19 changes resulting from production, han20 dling, and transportation of fuel (and asso21 ciated effects on public health and safety); 

22 ‘‘(ii) land use patterns; 

23 ‘‘(iii) the rate of deforestation, in the 

24 United States and globally; 

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1 ‘‘(iv) areas containing significant con2 centrations of biodiversity values (including 

3 endemism, endangered species, high spe4 cies richness, and refugia), including habi5 tats in which any alteration of the habitat 

6 would render the habitat unable to support 

7 most characteristic native species and eco8 logical processes; 

9 ‘‘(v) land enrolled in the conservation 

10 reserve program established under sub11 chapter B of chapter 1 of subtitle D of 

12 title XII of the Food Security Act of 1985 

13 (16 U.S.C. 3831 et seq.) or the wetlands 

14 reserve program established under sub15 chapter C of chapter 1 of subtitle D of 

16 title XII of the Food Security Act of 1985 

17 (16 U.S.C. 3837 et seq.); 

18 ‘‘(vi) the long-term capacity of the 

19 United States to produce biomass feed20 stocks; 

21 ‘‘(vii) the impact on areas at risk of 

22 wildfire, including the vicinity of buildings 

23 and other areas regularly occupied by peo24 ple, or of infrastructure; 

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1 ‘‘(viii) the effects on materials pro2 duced, acquired, transported, or processed 

3 that would require an exemption from oth4 erwise applicable Federal law (including 

5 regulations); 

6 ‘‘(ix) the conversion of nonrenewable 

7 biomass into biofuel; 

8 ‘‘(x) the conversion of biowaste and 

9 other wastes into fuels (as compared with 

10 use of those wastes for other beneficial 

11 purposes (such as recycling postconsumer 

12 waste paper), and any potential for the 

13 generation of toxic byproducts resulting 

14 from that conversion (such as painted, 

15 treated, or pressurized wood, or wood con16 taminated with plastic or metals); 

17 ‘‘(xi) designated national interest land 

18 (including land that is within the National 

19 Wildlife Refuge System, the National Park 

20 System, a National Monument, the Na21 tional Wilderness Preservation System, the 

22 National Landscape Conservation System, 

23 or the National Forest System, or that is 

24 otherwise under the administrative juris25 diction of the Secretary of the Interior or 

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1 Secretary of Agriculture or protected by 

2 Federal law); and 

3 ‘‘(xii) such other matters or activities 

4 as are identified by the Administrator. 

5 ‘‘(B) ENVIRONMENTAL SUSTAINABILITY

6 STANDARDS.—Not later than January 1, 2012, 

7 the Administrator, in conjunction with the Sec8 retary of Agriculture and the Secretary of En9 ergy, shall, based on the methodology estab10 lished under subparagraph (A), promulgate reg11 ulations to establish a set of standards to mini12 mize, to the maximum extent practicable, the 

13 negative environmental impacts and ensure long 

14 term resource sustainability from the sourcing 

15 and production of low-carbon fuels. 

16 ‘‘(u) STATE AUTHORITY.—If the Administrator de17 termines that a State law (including a regulation) provides 

18 for equivalent or greater greenhouse gas emission reduc19 tions than any provision in section 250 or subsection (p) 

20 or (t) of this section, the State law shall apply in the State 

21 in lieu of the provision.’’. 

22 (d) PENALTIES AND ENFORCEMENT.—Section 

23 211(d) of the Clean Air Act (42 U.S.C. 7545(d)) is 

24 amended— 

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1 (1) in paragraph (1), by striking ‘‘or (o)’’ each 

2 place it appears and inserting ‘‘(o), or (p)’’; and 

3 (2) in paragraph (2), by striking ‘‘and (o)’’ 

4 each place it appears and inserting ‘‘(o), and (p)’’. 

5 (e) TECHNICAL AMENDMENTS.—Section 211 of the 

6 Clean Air Act (42 U.S.C. 7545) is amended— 

7 (1) in subsection (i)(4), by striking ‘‘section 

8 324’’ each place it appears and inserting ‘‘section 

9 325’’; 

10 (2) in subsection (k)(10), by indenting subpara11 graphs (E) and (F) appropriately; 

12 (3) in subsection (n), by striking ‘‘section 

13 219(2)’’ and inserting ‘‘section 216(2)’’; and 

14 (4) in subsection (s)(1), by striking ‘‘this sub15 title’’ and inserting ‘‘this part’’. 

Æ 

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