Document ID: EPA-HQ-OAR-2015-0049-0001
Agency: epa
Document Type: Rule
Title: Regulation of Fuels and Fuel Additives: Cellulosic Waiver Credit Price and Minor Amendments to Renewable Fuel Standard Regulations
Posted Date: 2015-04-03T04:00Z

[Federal Register Volume 80, Number 64 (Friday, April 3, 2015)]
[Rules and Regulations]
[Pages 18136-18141]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-07476]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2015-0049; FRL-9924-71-OAR]
RIN 2060-AS48

Regulation of Fuels and Fuel Additives: Cellulosic Waiver Credit 
Price and Minor Amendments to Renewable Fuel Standard Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking direct 
final action to clarify our regulations related to the data sources 
used to establish the cellulosic waiver credit (CWC) price. We are also 
removing references to CWC prices from the renewable fuel standard 
regulations, and instead intend to post the prices on EPA's Web site. 
The direct final rule also indicates what the CWC prices for 2014 and 
2015 would be using the data sources and methodology contained in the 
rule; however these prices will not be established until they are 
posted on our Web site following the effective date of the rule. In 
addition, we are making minor amendments to the renewable fuel standard 
program regulations to reinsert sections inadvertently overwritten by 
the Quality Assurance Program final rule published on July 18, 2014.

DATES: This rule is effective on June 2, 2015 without further notice, 
unless EPA receives relevant adverse comment by May 4, 2015. If EPA 
receives relevant adverse comment, we will publish in the Federal 
Register a timely withdrawal of the portions of this direct final rule 
on which adverse comment was received informing the public that those 
portions of the rule will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2015-0049, by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     Email: a-and-r-docket@epa.gov.
     Mail: Air and Radiation Docket and Information Center, 
Environmental Protection Agency, Mailcode: 28221T, 1200 Pennsylvania 
Ave. NW., Washington, DC 20460.
     Hand Delivery: EPA Docket Center, EPA WJC West Building, 
Room 3334, 1301 Constitution Ave. NW., Washington, DC 20460. Such 
deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2015-0049. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or email. The 
www.regulations.gov Web site is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through www.regulations.gov your email 
address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses. For additional 
information about EPA's public docket visit the EPA Docket Center 
homepage at http://www.epa.gov/epahome/dockets.htm. For additional 
instructions on submitting comments, go to Section I.B of the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in www.regulations.gov or in hard copy at the Air and Radiation Docket 
and Information Center, EPA/DC, EPA WJC West, Room 3334, 1301 
Constitution Ave. NW., Washington, DC. The Public Reading Room is open 
from 8:30 a.m. to 4:30 p.m., Monday through Friday,

[[Page 18137]]

excluding legal holidays. The telephone number for the Public Reading 
Room is (202) 566-1744, and the telephone number for the Air Docket is 
(202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Julia MacAllister, Office of 
Transportation and Air Quality, Assessment and Standards Division, 
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor MI 
48105; Telephone number: 734-214-4131; Fax number: 734-214-4816; Email 
address: macallister.julia@epa.gov, or the public information line for 
the Office of Transportation and Air Quality; telephone number (734) 
214-4333; Email address: OTAQ@epa.gov.

SUPPLEMENTARY INFORMATION:

Why is EPA issuing a direct final rule?

    EPA is publishing this rule without a prior proposed rule because 
we view this as a noncontroversial action and we anticipate no adverse 
comment. This action clarifies our regulations related to the data 
sources used to establish the price for cellulosic waiver credits 
(CWC). EPA is also removing the CWC prices from our regulations so as 
to allow the prices to be established in a more expeditious manner. The 
CWC prices will instead be published on EPA's ``Renewable Fuels: 
Regulations & Standards'' Web site (http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm). The action also reinserts regulatory 
provisions in the renewable fuel standard (RFS) program regulations 
that were inadvertently overwritten by the Quality Assurance Program 
(QAP) final rule (79 FR 42078, July 18, 2014).
    Clarifying the data sources used in calculating the CWC price will 
eliminate uncertainty regarding EPA's process in establishing the CWC 
prices, will enable stakeholders to better predict the annual CWC price 
before it is established, and will allow EPA to establish the CWC price 
in a more timely manner. This action does not change the formula used 
to establish the CWC price (listed in our regulations at 40 CFR 
80.1456(d)).
    In the ``Proposed Rules'' section of today's Federal Register, we 
are publishing a separate document that will serve as the proposed rule 
to make the changes described herein if adverse comments are received 
on this direct final rule. We will not institute a second comment 
period on this action. Any parties interested in commenting must do so 
at this time. For further information about commenting on this rule, 
see the ADDRESSES section of this document.
    If EPA receives relevant adverse comment or a request for a public 
hearing, we will publish a timely withdrawal in the Federal Register 
informing the public of the portions of this direct final rule that 
will not take effect. We will address all public comments in a 
subsequent final rule based on the proposed rule.

Does this action apply to me?

    Entities potentially affected by this direct final rule are those 
involved with the production, distribution, and sale of transportation 
fuels, including gasoline and diesel fuel or renewable fuels such as 
ethanol and biodiesel. Potentially regulated categories include:

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                                           NAICS \1\
               Category                      codes       SIC \2\ codes                     Examples of potentially regulated  entities
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Industry..............................          324110            2911  Petroleum Refineries.
Industry..............................          325193            2869  Ethyl alcohol manufacturing.
Industry..............................          325199            2869  Other basic organic chemical manufacturing.
Industry..............................          424690            5169  Chemical and allied products merchant wholesalers.
Industry..............................          424710            5171  Petroleum bulk stations and terminals.
Industry..............................          424720            5172  Petroleum and petroleum products merchant wholesalers.
Industry..............................          454319            5989  Other fuel dealers.
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\1\ North American Industry Classification System (NAICS).
\2\ Standard Industrial Classification (SIC) system code.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your activities would be regulated by this action, you should carefully 
examine the applicability criteria in 40 CFR part 80. If you have any 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in FOR FURTHER INFORMATION CONTACT.

Outline of This Preamble

I. Executive Summary
II. Clarifications Related to CWC Price Calculation
III. CWC Price Calculations for 2014 and 2015
IV. Reinsertion of Inadvertently Overwritten Language
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
VI. Statutory Authority

I. Executive Summary

    For any calendar year for which the projected volume of cellulosic 
biofuel production is less than the applicable volume of cellulosic 
biofuel set forth in CAA 211(o)(2)(B)(III), EPA must reduce the 
required volume of cellulosic biofuel for that year to the projected 
volume, and must provide obligated parties the opportunity to purchase 
cellulosic waiver credits (CWC). The price of these credits is 
determined using a formula specified in the CAA.\1\ The cellulosic 
waiver credit price is the greater of $0.25 or $3.00 minus the 
wholesale price of gasoline, where both the $0.25 and $3.00 are 
adjusted for inflation. In this action we are clarifying the data 
sources we use to calculate the inflation adjustments used in this 
formula. This will eliminate potential uncertainty regarding EPA's 
approach to establishing the CWC prices. We are not

[[Page 18138]]

making any modifications to the formula used to calculate the CWC 
price.
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    \1\ CAA 211(o)(7)(D)(ii).
---------------------------------------------------------------------------

    Additionally, in order to provide more certainty to the market 
through timely publication of CWC prices, EPA is also amending the 
procedure it uses to announce CWC prices. To date, we have established 
the prices by rulemaking and published them in the Code of Federal 
Regulations. To allow more expeditious publication of these prices, EPA 
is removing references to CWC prices from the CFR. The prices will 
instead be posted by the Office of Transportation and Air Quality 
within the Office of Air and Radiation on EPA's ``Renewable Fuels: 
Regulations & Standards'' Web site (http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm).
    We are also making minor amendments to the regulations to reinsert 
language applicable to biofuel producers using Arundo donax or 
Pennisetum purpureum as feedstock, which was inadvertently overwritten 
by the Quality Assurance Program (QAP) final rule (79 FR 42078, July 
18, 2014), and to make minor conforming changes to the numbering of 
other regulatory provisions.

II. Clarifications Related to CWC Price Calculation

    EPA is taking action to clarify sections of the regulations related 
to the CWC price calculation. These changes are consistent with the CWC 
price formula set forth in the statute, and more specifically, with the 
statutory direction to adjust certain terms in the formula for 
inflation. We believe the regulations as amended will more clearly 
articulate the data sources that EPA will use in calculating the CWC 
price for each year.
    The regulations that outline the process used by EPA to calculate 
the CWC price are set forth in 40 CFR 80.1456(d). The regulations 
currently state that ``the wholesale price of gasoline used in the CWC 
calculation will be calculated by averaging the most recent twelve 
monthly values for U.S. Total Gasoline Bulk Sales (Price) by Refiners 
as provided by the Energy Information Administration (EIA) that are 
available as of September 30 of the year preceding the compliance 
period.'' \2\ In practice, given the publication schedule for the 
referenced EIA publication, this means that EPA calculates the 
wholesale price of gasoline using data from the 12 months prior to July 
of the year preceding the compliance period (i.e., July 2011-June 2012 
data for the 2013 CWC price). We are not making any modifications to 
this portion of the regulations.
---------------------------------------------------------------------------

    \2\ 40 CFR 80.1456(d)(2).
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    The regulations also currently state that the inflation adjustment 
used in calculating the CWC price will be calculated at the time EPA 
sets the cellulosic biofuel standard.\3\ In an effort to provide 
certainty to the market in relation to the CWC price as soon as 
reasonably practical, EPA believes it would be preferable to announce 
the CWC price as soon as the relevant data on the wholesale price of 
gasoline is available. Therefore, we are amending these regulations to 
calculate the inflation adjustment using data from June of the year 
preceding the compliance period. We believe this is appropriate as it 
is the most recent month within the time period over which we calculate 
the average wholesale price of gasoline. We are also amending our 
regulations to eliminate the regulatory references to CWC prices. 
Instead we intend to announce the CWC price in a notice on our 
``Renewable Fuels: Regulations & Standards'' Web site by November of 
the year preceding the compliance period. Consistent with previous CWC 
calculations, EPA will continue to base the inflation adjustment on the 
Consumer Price Index for All Urban Consumers (CPI-U): U.S. City 
Average, Unadjusted Index for All Items expenditure category as 
provided by the Bureau of Labor and Statistics. We are amending our 
regulations in this action to clarify that we are using the unadjusted 
price index, rather than the seasonally adjusted price index, to 
calculate the inflation adjustment. We believe this is appropriate as 
the unadjusted index most accurately reflects the prices consumers 
actually pay and do not change, whereas the seasonally adjusted indexes 
are subject to revision for up to five years after their release.\4\ We 
are also clarifying that we are using ``US City Average'' data, as 
opposed to data for geographic subsets of the country. This is 
appropriate in light of the nation-wide applicability of the RFS 
program. Both of these changes simply clarify EPA's current practice, 
and are designed to promote regulatory certainty and understanding by 
stakeholders.
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    \3\ 40 CFR 80.1456(d)(3).
    \4\ For more information on Seasonally Adjusted vs. Unadjusted 
Indexes see http://www.bls.gov/cpi/cpisapage.htm.
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    We are also amending the section of our regulations where the CWC 
price for previous years is listed.\5\ EPA has included the prices for 
2010, 2011, 2012, and 2013 CWCs in our regulations. Promulgating prices 
in our regulations, however, requires EPA to undertake a rulemaking, 
which we believe may unnecessarily delay the announcement of the CWC 
price. Furthermore, we believe the CWC price need not be established by 
rulemaking, for the following reasons. First, the formula and all data 
sources for the CWC price are specified in our regulations, so the 
actual price calculation is a procedural action that will not benefit 
from a notice and comment rulemaking. Second, CWCs are purchased from 
EPA, and EPA can ensure that the correct price is paid for them. 
Finally, the publication of the CWC price in the CFR is not necessary 
for informational purposes as EPA intends to promptly post the CWC 
prices on our Web site.
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    \5\ 40 CFR 80.1405(d).
---------------------------------------------------------------------------

    Therefore, in this action EPA is deleting the sections of our 
regulations containing the CWC prices for previous years and is instead 
including a statement in the regulations indicating that the CWC price 
for each year will be posted on EPA's ``Renewable Fuels: Regulations & 
Standards'' Web site (http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm). Adopting this approach will allow EPA to announce the 
CWC prices at the earliest opportunity. We believe this will benefit 
both cellulosic biofuel producers and obligated parties. EPA will post 
the CWC prices for 2013, 2014, and 2015 on our Web site following the 
effective date of this rule.

III. CWC Price Calculations for 2014 and 2015

    To illustrate the derivation of CWC prices pursuant to the 
statutory formula, and with the data sources specified in this direct 
final rule, we explain in this section the derivation of CWC prices for 
2014 and 2015.\6\ EPA determined the average wholesale (refinery gate) 
price of gasoline using the monthly average prices for the 12 months 
prior to July of the year preceding each compliance period. In this 
calculation EPA uses the U.S. Total Gasoline Bulk Sales Price by 
Refiners (Dollars per Gallon) as reported by the U.S. Energy 
Information Administration (EIA). The data are

[[Page 18139]]

shown below in Table 1 and Table 2 for the calculations for 2014 and 
2015, respectively, and can be found at: (http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMA_EPM0_PBR_NUS_DPG&f=M).
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    \6\ The calculations for the 2013 CWC were explained in a memo 
to the docket for our rulemaking establishing the 2013 standards 
(EPA-HQ-OAR-2012-0546-0134). The 2013 CWC price was calculated in 
accordance with the methodology and data sources described in this 
rule, with one minor difference. To calculate the Inflation Factor 
the August 2012 Index (230.037) was used rather than the June 2012 
Index (229.815). Using the June 2012 Index in place of the August 
2012 Index does not change the CWC waiver credit price for 2013 of 
$0.42. EPA will therefore confirm the 2013 CWC price in the 
announcement on our Web site following the effective date of this 
rule.

       Table 1--Wholesale Gasoline Prices for 2014 CWC Calculation
------------------------------------------------------------------------
                                                                Average
                            Month                               price in
                                                                  ($)
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July 2012....................................................      2.703
August 2012..................................................      2.961
September 2012...............................................      3.133
October 2012.................................................      2.922
November 2012................................................      2.622
December 2012................................................      2.554
January 2013.................................................      2.668
February 2013................................................      2.892
March 2013...................................................      2.963
April 2013...................................................      2.822
May 2013.....................................................      2.824
June 2013....................................................      2.817
------------------------------------------------------------------------

       Table 2--Wholesale Gasoline Prices for 2015 CWC Calculation
------------------------------------------------------------------------
                                                                Average
                            Month                               price in
                                                                  ($)
------------------------------------------------------------------------
July 2013....................................................      2.879
August 2013..................................................      2.916
September 2013...............................................      2.831
October 2013.................................................      2.610
November 2013................................................      2.496
December 2013................................................      2.551
January 2014.................................................      2.598
February 2014................................................      2.650
March 2014...................................................      2.763
April 2014...................................................      2.829
May 2014.....................................................      2.853
June 2014....................................................      2.924
------------------------------------------------------------------------

    The average monthly price in dollars for the calculation of the 
2014 CWC price is 2.823. The average monthly price in dollars for the 
calculation of the 2015 CWC price is 2.742.
    The CAA requires that EPA adjust for inflation the comparison 
values of twenty-five cents ($0.25) and three dollars ($3.00) in the 
CWC price formula. EPA must compare the inflated twenty-five cent value 
with the amount the inflated three dollar value exceeds the average 
wholesale price of gasoline. EPA is required to use the greater of the 
two values as the price for the cellulosic biofuel waiver credits.
    EPA evaluated inflation by using the Unadjusted Index values from 
the Consumer Price Index for All Urban Consumers (CPI-U): U.S. City 
Average, for the All Items expenditure category as provided by the 
Bureau of Labor and Statistics, for the months of January 2009 (the 
first comparable value after 2008) and June 2013 and June 2014, as 
discussed in Section II of this preamble. These unadjusted indexes are 
used to calculate an Inflation Factor for each year, as shown in Table 
4 below. Finally, we compare $0.25 (inflation adjusted) to $3.00 
(inflation adjusted) minus the wholesale price of gasoline for each 
year. The greater of these values is the price for the cellulosic 
waiver credits.

                                         Table 3--Inflation Adjustments
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                                    Unadjusted
              Month                    index                                  Source
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January 2009....................         211.143  http://www.bls.gov/cpi/cpid0901.pdf (Table 1).
June 2013.......................         233.504  http://www.bls.gov/cpi/cpid1306.pdf (Table 1).
June 2014.......................         238.343  http://www.bls.gov/cpi/cpid1406.pdf (Table 1).
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                                           Table 4--Inflation Factors
----------------------------------------------------------------------------------------------------------------
                                                                                                     Inflation
                 Months                                          Equation                             factor
----------------------------------------------------------------------------------------------------------------
Jan. 2009-June 2013.....................  1+(233.504-211.143)/211.143...........................           1.106
Jan. 2009-June 2014.....................  1+(238.343-211.143)/211.143...........................           1.129
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                              Table 5--Cellulosic Waiver Credit Price Calculations
----------------------------------------------------------------------------------------------------------------
                                                                                            CWC Price (larger of
                                 $0.25 (Inflation        $3--Wholesale price of gasoline       the two values,
           Year                     adjusted)                  (inflation adjusted)            rounded to the
                                                                                                nearest cent)
----------------------------------------------------------------------------------------------------------------
2014......................  $0.25 *1.106 = $0.28.....  ($3.00 *1.106)-$2.823 = $0.4947....                 $0.49
2015......................  $0.25 *1.129 = $0.28.....  ($3.00 *1.129)-$2.742 = $0.6445....                  0.64
----------------------------------------------------------------------------------------------------------------

As shown in Table 5, using the data sources for the inflation 
adjustment that are specified in this direct final rule results in a 
CWC price of $0.49 for 2014 and $0.64 for 2015. These prices, along 
with the CWC price for 2013 ($0.42) will be posted on EPA's Web site 
after the effective date of this rule.

    EPA notes that in this action we are not making a determination 
regarding whether CWCs will actually be offered. As required by 
statute, CWCs are only made available for sale if EPA lowers the 
required cellulosic biofuel volume requirement below the applicable 
volume set forth in the Act. EPA will decide whether or not it will 
lower the required cellulosic biofuel volumes in future rules 
establishing the 2014 and 2015 cellulosic biofuel percentage standards. 
At that time EPA will determine if CWCs will be sold. If so, they will 
be sold at the prices indicated above. However EPA notes that it has 
offered CWCs for every year since 2010, the first year for which a 
separate cellulosic biofuel standard was established. Given the 
anticipated shortfall in cellulosic biofuel production, as compared to 
statutory volumes, in these years it is probable that CWCs will be 
offered.

IV. Reinsertion of Inadvertently Overwritten Language

    In the RFS RIN Quality Assurance Program final rule (79 FR 42078, 
July 18, 2014), we moved the previous 40 CFR 80.1426(f)(12) (regarding 
process

[[Page 18140]]

heat produced from biogas) to 40 CFR 80.1426(f)(14) as we had proposed 
on February 21, 2013 (78 FR 12158). When we moved 40 CFR 80.1426(f)(12) 
to 40 CFR 80.1426(f)(14), however, we inadvertently overwrote the 
previous 40 CFR 80.1426(f)(14) (regarding renewable fuel produced from 
giant reed (Arundo donax) or napier grass (Pennisetum purpureum)) that 
had been finalized in a separate final rule which was published on July 
11, 2013 (78 FR 41703). The new 40 CFR 80.1426(f)(12) finalized in the 
RFS RIN Quality Assurance Program final rule dealt with additional 
requirements for producers and importers when generating RINs. In 
today's action, we are amending the regulations to undo our inadvertent 
elimination of the regulatory provisions related to giant reed and 
napier grass. Specifically, we are: (1) Re-inserting the inadvertently 
eliminated language as 40 CFR 80.1426(f)(14) (See 78 FR 41714, July 11, 
2013); (2) moving the current 40 CFR 80.1426(f)(14) (process heat 
produced from biogas) back to 40 CFR 80.1426(f)(12), where it existed 
prior to the RFS RIN Quality Assurance Program final rule (See 75 FR 
79977, December 21, 2010); and (3) moving the current 40 CFR 
80.1426(f)(12) to a new 40 CFR 80.1426(f)(17).

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the PRA. The changes made to the regulations as a result of this action 
impose no new or different reporting requirements on regulated parties.

C. Regulatory Flexibility Act

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the impact of concern is any significant 
adverse economic impact on small entities. An agency may certify that a 
rule will not have a significant economic impact on a substantial 
number of small entities if the rule relieves regulatory burden, has no 
net burden or otherwise has a positive economic effect on the small 
entities subject to the rule. This action clarifies the data sources 
and methodology used by EPA to establish the CWC price, establishes 
these prices for 2014 and 2015, and reinserts inadvertently overwritten 
regulatory language. The impacts of the RFS2 program on small entities 
were already addressed in the RFS2 final rule promulgated on March 26, 
2010 (75 FR 14670), and this rule will not impose any additional 
requirements on small entities beyond those already analyzed. We have 
therefore concluded that this action will have no net regulatory burden 
for all directly regulated small entities.

D. Unfunded Mandates Reform Act

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. This action implements mandate(s) specifically and 
explicitly set forth in Clean Air Act section 211(o) without the 
exercise of any policy discretion by the EPA.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175. This rule will be implemented at the Federal 
level and potentially impacts gasoline, diesel, and renewable fuel 
producers, importers, distributors, and marketers. Tribal governments 
would be affected only to the extent they purchase and use regulated 
fuels. Thus, Executive Order 13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    The EPA interprets E.O. 13045 as applying only to those regulatory 
actions that concern environmental health or safety risks that the EPA 
has reason to believe may disproportionately affect children, per the 
definition of ``covered regulatory action'' in section 2-202 of the 
Executive Order. This action is not subject to Executive Order 13045 
because it does not establish an environmental standard intended to 
mitigate health or safety risks and because it implements specific 
standards established by Congress in statutes (section 211(o) of the 
Clean Air Act).

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 because it is 
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    This rule is a technical correction and does not concern an 
environmental health or safety risk. Therefore, Executive Order 12898 
does not apply.

K. Congressional Review Act

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. This action is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

VI. Statutory Authority

    Statutory authority for this action comes from section 211 of the 
Clean Air Act, 42 U.S.C. 7545.

List of Subjects in 40 CFR Part 80

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Diesel fuel, Fuel additives, Gasoline, Imports, 
Oil imports, Petroleum, Renewable Fuel.

    Dated: March 24, 2015.
Gina McCarthy,
Administrator.

    For the reasons set forth in the preamble, title 40, chapter I of 
the Code of Federal Regulations is amended as set forth below.

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

0
1. The authority citation for part 80 continues to read as follows:

    Authority:  42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).

Subpart M--Renewable Fuel Standard

0
2. Section 80.1405 is amended by revising paragraph (d) to read as 
follows:

[[Page 18141]]

Sec.  80.1405  What are the Renewable Fuel Standards?

* * * * *
    (d) The price for cellulosic biofuel waiver credits will be 
calculated in accordance with Sec.  80.1456(d) and published on EPA's 
Web site.

0
3. Section 80.1426 is amended by revising paragraphs (f)(12) and 
(f)(14), and adding paragraph (f)(17) to read as follows:

Sec.  80.1426  How are RINs generated and assigned to batches of 
renewable fuel by renewable fuel producers or importers?

* * * * *
    (f) * * *
    (12) For purposes of Table 1 of this section, process heat produced 
from combustion of gas at a renewable fuel facility is considered 
derived from biomass if the gas is biogas.
    (i) For biogas directly transported to the facility without being 
placed in a commercial distribution system, all of the following 
conditions must be met:
    (A) The producer has entered into a written contract for the 
procurement of a specific volume of biogas with a specific heat 
content.
    (B) The volume of biogas was sold to the renewable fuel production 
facility, and to no other facility.
    (C) The volume and heat content of biogas injected into the 
pipeline and the volume of gas used as process heat are measured by 
continuous metering.
    (ii) For biogas that has been gathered, processed and injected into 
a common carrier pipeline, all of the following conditions must be met:
    (A) The producer has entered into a written contract for the 
procurement of a specific volume of biogas with a specific heat 
content.
    (B) The volume of biogas was sold to the renewable fuel production 
facility, and to no other facility.
    (C) The volume of biogas that is withdrawn from the pipeline is 
withdrawn in a manner and at a time consistent with the transport of 
fuel between the injection and withdrawal points.
    (D) The volume and heat content of biogas injected into the 
pipeline and the volume of gas used as process heat are measured by 
continuous metering.
    (E) The common carrier pipeline into which the biogas is placed 
ultimately serves the producer's renewable fuel facility.
    (iii) The process heat produced from combustion of gas at a 
renewable fuel facility described in paragraph (f)(12)(i) of this 
section shall not be considered derived from biomass if any other party 
relied upon the contracted volume of biogas for the creation of RINs.
* * * * *
    (14) A producer or importer of renewable fuel using giant reed 
(Arundo donax) or napier grass (Pennisetum purpureum) as a feedstock 
may generate RINs for that renewable fuel if:
    (i) The feedstock is produced, managed, transported, collected, 
monitored, and processed according to a Risk Mitigation Plan approved 
by EPA under the registration procedures specified in Sec.  
80.1450(b)(1)(x)(A); or,
    (ii) EPA has determined that there is not a significant likelihood 
of spread beyond the planting area of the feedstock used for production 
of the renewable fuel. Any determination that Arundo donax or 
Pennisetum purpureum does not present a significant likelihood of 
spread beyond the planting area must be based upon clear and compelling 
evidence, including information and supporting data submitted by the 
producer. Such a determination must be made by EPA as specified in 
Sec.  80.1450(b)(1)(x)(B).
* * * * *
    (17)(i) For purposes of this section, any renewable fuel other than 
ethanol, biodiesel, or renewable diesel that meets the ASTM D 975-13a 
Grade No. 1-D or No. 2-D specifications (incorporated by reference, see 
Sec.  80.1468) is considered renewable fuel and the producer or 
importer may generate RINs for such fuel only if all of the following 
apply:
    (A) The fuel is produced from renewable biomass and qualifies for a 
D code in Table 1 to this section or has been otherwise approved by the 
Administrator.
    (B) The fuel producer or importer maintains records demonstrating 
that the fuel was produced for use as a transportation fuel, heating 
oil or jet fuel by any of the following:
    (1) Blending the renewable fuel into gasoline or diesel fuel to 
produce a transportation fuel, heating oil or jet fuel that meets all 
applicable standards.
    (2) Entering into a written contract for the sale of the renewable 
fuel, which specifies the purchasing party shall blend the fuel into 
gasoline or diesel fuel to produce a transportation fuel, heating oil 
or jet fuel that meets all applicable standards.
    (3) Entering into a written contract for the sale of the renewable 
fuel, which specifies that the fuel shall be used in its neat form as a 
transportation fuel, heating oil or jet fuel that meets all applicable 
standards.
    (C) The fuel was sold for use in or as a transportation fuel, 
heating oil, or jet fuel, and for no other purpose.
    (ii) [Reserved]
* * * * *

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4. Section 80.1456 is amended by revising paragraph (d)(3) to read as 
follows:

Sec.  80.1456  What are the provisions for cellulosic biofuel waiver 
credits?

* * * * *
    (d) * * *
    (3) The inflation adjustment will be calculated by comparing the 
Consumer Price Index for All Urban Consumers (CPI-U): U.S. City 
Average, Unadjusted Index for All Items expenditure category as 
provided by the Bureau of Labor Statistics for June of the year 
preceding the compliance period to the comparable value reported for 
January 2009.
* * * * *
[FR Doc. 2015-07476 Filed 4-2-15; 8:45 am]
 BILLING CODE 6560-50-P