Document ID: EPA-HQ-OAR-2012-0401-0200
Agency: epa
Document Type: Rule
Title: Fuels and Fuel Additives: RFS Pathways II, Technical Amendments to the RFS Standards, E15 Misfueling Mitigation Requirements
Posted Date: 2014-07-18T04:00Z

[Federal Register Volume 79, Number 138 (Friday, July 18, 2014)]
[Rules and Regulations]
[Pages 42127-42167]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16413]

[[Page 42127]]

Vol. 79

Friday,

No. 138

July 18, 2014

Part III

Environmental Protection Agency

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40 CFR Part 80

 Regulation of Fuels and Fuel Additives: RFS Pathways II, and Technical 
Amendments to the RFS Standards and E15 Misfueling Mitigation 
Requirements; Final Rule

  Federal Register / Vol. 79 , No. 138 / Friday, July 18, 2014 / Rules 
and Regulations  

[[Page 42128]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2012-0401; FRL-9910-40-OAR]
RIN 2060-AR21

Regulation of Fuels and Fuel Additives: RFS Pathways II, and 
Technical Amendments to the RFS Standards and E15 Misfueling Mitigation 
Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: In this final rulemaking, the Environmental Protection Agency 
(EPA) is amending three separate sets of regulations relating to fuels. 
In amendments to the renewable fuels standard (RFS) program 
regulations, EPA is clarifying the number of cellulosic biofuel 
renewable identification numbers that may be generated for fuel made 
with feedstocks of varying cellulosic content, is specifying new and 
amended pathways for the production of renewable fuels made from 
biogas, and is clarifying or amending a number of RFS program 
regulations that define terms or address registration, recordkeeping, 
and reporting requirements. EPA is also making various changes to the 
misfueling mitigation regulations for gasoline that contains greater 
than 10 volume percent ethanol and no more than 15 volume percent 
ethanol (E15) and to the survey requirements associated with the ultra-
low sulfur diesel program.

DATES: This rule is effective August 18, 2014.

FOR FURTHER INFORMATION CONTACT: Jon Monger, Office of Transportation 
and Air Quality, Mail Code: 1101A, U.S. Environmental Protection 
Agency, 1200 Pennsylvania Avenue NW., 20460; telephone number: (202) 
564-0628; fax number: (202) 564-1686; email address: 
monger.jon@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

    In this rule, EPA is amending three sets of regulations. First, as 
described in section IV of this preamble, EPA is amending certain parts 
of the RFS program regulations at 40 CFR part 80, subpart M. Some of 
the changes in this rule are of a substantive nature; others are more 
in the nature of technical corrections, including corrections of 
obvious omissions and errors in citation. In this final rule, EPA 
establishes requirements for determining the number of cellulosic 
biofuel Renewable Identification Numbers (RINs) that will be generated 
for fuel made from a range of cellulosic feedstocks. We also modify 
regulatory provisions related to renewable fuel made from biogas, 
including a new compressed natural gas (CNG)/liquefied natural gas 
(LNG) cellulosic biofuel pathway, and add a new cellulosic biofuel 
pathway for renewable electricity (used in electric vehicles) produced 
from biogas. These pathways have the potential to provide notable 
volumes of cellulosic biofuel for use in complying with the RFS 
program, since significant volumes of advanced biofuels are already 
being generated for fuel made from biogas, and in many cases this same 
fuel will qualify for cellulosic RINs when this rule becomes effective. 
The approval of these new cellulosic pathways could have an impact on 
EPA's projection of 2014 cellulosic biofuel volumes in the final 2014 
RFS standards rulemaking. EPA noted the possibility of such an impact 
in its proposed rule.\1\ Many of the changes in today's rule will 
facilitate the introduction of new renewable fuels under the RFS 
program. By qualifying these new fuel pathways, this rule provides 
opportunities to increase the volume of advanced, low-GHG renewable 
fuels--such as cellulosic biofuels--under the RFS program. EPA's 
analyses show significant lifecycle GHG emission reductions from these 
fuel types, as compared to the baseline gasoline or diesel fuel that 
they replace. In this rulemaking, EPA also clarifies or amends a number 
of RFS program regulations that define terms or address registration, 
recordkeeping, or reporting requirements. These include amendments 
related to: (1) Use of crop residue and corn kernel fiber as renewable 
fuel feedstock; (2) definition of ``small refinery''; (3) provisions 
for small blenders of renewable fuels; (4) when EPA may deactivate a 
company registration; (5) the use for registration purposes of 
``nameplate capacity'' for certain production facilities that do not 
claim exemption from the 20% greenhouse gas (GHG) reduction threshold; 
and (6) clarifying what penalties apply under the RFS program.
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    \1\ 78 FR 71732, November 29, 2013.
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    EPA is also making various changes to the E15 misfueling mitigation 
regulations (E15 MMR) at 40 CFR part 80, subpart N. Among the E15 
changes are technical corrections and amendments to sections dealing 
with labeling, E15 surveys, product transfer documents, and prohibited 
acts. We also amend the definitions of E10 and E15 in subpart N to 
address a concern about the rounding of ethanol content test results, 
in response to a question raised by some industry stakeholders.
    In response to questions received from regulated parties, we amend 
the ultra-low sulfur diesel (ULSD) survey provisions in a manner that 
reduces the number of samples required. This will reduce costs and 
burdens associated with compliance for regulated parties, with no 
expected degradation in the highly successful environmental performance 
of the program. We received helpful comments from the public on these 
three issues, and provide response to them in this preamble.
    We are not finalizing at this time all of the proposed changes in 
the Notice of Proposed Rulemaking.\2\ Due to comments received and time 
constraints, we are not taking final action at this time on the 
proposed advanced butanol pathway, the proposed pathways for the 
production of renewable diesel, naphtha and renewable gasoline from 
biogas, or the proposed additional compliance requirements for non-RIN-
generating foreign renewable fuel producers. We are also not taking 
final action at this time on the definition of ``producer'' for 
renewable CNG/LNG and renewable electricity from biogas sources, the 
definition of responsible corporate officer, or the proposed amendments 
to compliance related provisions for the alternative reporting method 
in Sec.  80.1452. The Agency is deferring the final decision on these 
matters until a later time.
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    \2\ 78 FR 36042, June 14, 2013.
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    This preamble follows the following outline:

I. Executive Summary
II. Why is EPA taking this action?
III. Does this action apply to me?
IV. Renewable Fuel Standard (RFS) Program Amendments
    A. Renewable Identification Number (RIN) Generation for Fuels 
Made From Feedstocks Containing Cellulosic Biomass
    1. Background
    2. The Cellulosic Content Threshold Approach and its Application 
to Cellulosic Feedstocks Currently Listed in Table 1 to 40 CFR 
80.1426
    3. Compliance Requirements for Producers of Cellulosic Biofuel 
Made From Feedstocks That are not Predominantly Cellulosic
    4. Testing, Registration, Reporting and Recordkeeping 
Requirements for Cellulosic Biofuel
    a. Additional Registration Requirements for Certain Producers 
Seeking to Generate Cellulosic Biofuel RINs

[[Page 42129]]

    b. Additional Registration Requirements for Renewable Fuel 
Produced From Energy Cane
    c. Additional Registration, Recordkeeping, and Reporting 
Requirements for Producers of Cellulosic Fuels Derived From the 
Simultaneous Conversion of Feedstocks That are Predominantly 
Cellulosic and Feedstocks That are Not Predominantly Cellulosic
    5. Determining the Average Adjusted Cellulosic Content of 
Feedstocks Going Forward
    6. Other Comments Received
    a. Treatment of Cellulosic Feedstocks Currently Listed in Table 
1 to 40 CFR 80.1426
    b. Feedstocks With Lower Average Cellulosic Content Than 
Feedstocks Currently Listed in Table 1 to Sec.  80.1426
    B. Lifecycle Greenhouse Gas Emissions Analysis and Cellulosic 
Determinations for Pathways Using Biogas as a Feedstock
    1. Changes Applicable to the Revised CNG/LNG Pathway From Biogas
    2. Determination of the Cellulosic Content of Biogenic Waste-
Derived Biogas
    a. Landfill Biogas and MSW Digester Biogas as Cellulosic in 
Origin
    b. Municipal Wastewater Treatment Facility Digester Biogas as 
Cellulosic
    c. Agricultural Digester Gas as Cellulosic
    d. Biogas From Waste Digesters
    3. Consideration of Lifecycle GHG Emissions Associated With 
Biogas Pathways
    a. Upstream GHG Analysis of Biogas as a Renewable Fuel or Fuel 
Feedstock
    b. Flaring Baseline Justification
    c. Lifecycle GHG Analysis for Electricity From Biogas
    4. Alternative Biogas Options and Comments
    a. Alternative Baseline Approaches
    b. Additional Comments on Lifecycle Analysis for Renewable 
Electricity
    C. Regulatory Amendments Related to Biogas
    1. Changes Applicable to Renewable Electricity From Biogas 
Sources
    a. Registration and RIN Generation Requirements
    b. Distribution and Tracking Requirements
    2. Regulatory Changes Applicable to All Biogas Related Pathways
    D. Clarification of the Definition of ``Crop Residue'' and 
Clarification of Feedstocks That EPA Considers Crop Residues
    1. Clarification of the Definition of ``Crop Residue''
    2. Consideration of Corn Kernel Fiber as a Crop Residue
    a. Analysis of Corn Kernel Fiber as a Crop Residue
    b. Treatment of Corn Starch That Adheres to Corn Kernel Fiber 
After Separation From DDG
    c. Processing Corn Kernel Fiber
    3. Identification of Feedstocks EPA Considers Crop Residues
    4. Registration, Recordkeeping, and Reporting Requirements 
Associated With Using Crop Residue as a Feedstock
    a. Registration Requirements for Producers Utilizing Crop 
Residue as a Feedstock
    b. Recordkeeping and Reporting Requirements for Producers 
Utilizing Crop Residue as a Feedstock
    E. Amendments to Various RFS Compliance Related Provisions
    1. Changes to Definitions
    2. Provisions for Small Blenders of Renewable Fuels
    3. Changes to Sec.  80.1450--Registration Requirements
    4. Changes to Sec.  80.1452--EPA Moderated Transaction System 
(EMTS) Requirements--Alternative Reporting Method for Sell and Buy 
Transactions for Assigned RINs
    5. Changes to Facility's Baseline Volume to Allow ``Nameplate 
Capacity'' for Facilities not Claiming Exemption From the 20% GHG 
Reduction Threshold
    6. Changes to Sec.  80.1463--What Penalties Apply Under the RFS 
Program?
    F. Minor Corrections to RFS Provisions
    V. Amendments to the E15 Misfueling Mitigation Rule
    A. Changes to Sec.  80.1501--Label
    B. Changes to Sec.  80.1502--E15 Survey
    C. Changes to Sec.  80.1503--Product Transfer Documents
    D. Changes to Sec.  80.1504--Prohibited Acts
    E. Changes to Sec.  80.1500--Definitions
    VI. Amendments to the Ultra Low Sulfur Diesel (ULSD) Survey
    VII. 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
    L. Clean Air Act Section 307(d)
VIII. Statutory Provisions and Legal Authority

II. Why is EPA taking this action?

    EPA is taking this action to amend various provisions in its 
regulations pertaining to the Renewable Fuels Standard (RFS) program 
(40 CFR part 80, subpart M) and misfueling mitigation for 15 volume 
percent (%) ethanol blends (E15) (40 CFR part 80, subpart N) to assist 
regulated parties in complying with RFS and E15 requirements. EPA is 
also amending the ultra low sulfur diesel (ULSD) survey provisions (40 
CFR part 80, subpart I) to decrease regulatory burdens and costs.

III. Does this action apply to me?

    Entities potentially affected by this action include those involved 
with the production, distribution and sale of transportation fuels, 
including gasoline and diesel fuel, or renewable fuels such as ethanol 
and biodiesel. Regulated categories and entities affected by this 
action include:

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                                               NAICS Codes                    Examples of potentially regulated
                  Category                         \a\        SIC Codes \b\                parties
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Industry...................................          324110            2911  Petroleum refiners, importers.
Industry...................................          325193            2869  Ethyl alcohol manufacturers.
Industry...................................          325199            2869  Other basic organic chemical
                                                                              manufacturers.
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...................................          454310            5989  Fuel dealers.
Industry...................................          486210            4922  Pipeline Transportation of Natural
                                                                              Gas.
Industry...................................          221117            4911  Biomass Electric Power Generation.
Industry...................................          562212            4953  Solid Waste Landfill.
Industry...................................          562219            4953  Other Nonhazardous Waste Treatment
                                                                              and Disposal.
Industry...................................          221320            4952  Sewage Treatment Facilities.
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

[[Page 42130]]

    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 be potentially regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your entity is regulated by this action, you should carefully examine 
the applicability criteria of part 80, subparts I, M and N of Title 40 
of the Code of Federal Regulations. If you have any question regarding 
applicability of this action to a particular entity, consult the person 
in the preceding FOR FURTHER INFORMATION CONTACT section above.

IV. Renewable Fuel Standard (RFS) Program Amendments

    In this rule, we are clarifying requirements related to existing 
cellulosic biofuel pathways under the RFS program, and adopting new 
cellulosic biofuel pathways. This rule also modifies a number of RFS 
program regulations.

A. Renewable Identification Number (RIN) Generation for Fuels Made From 
Feedstocks Containing Cellulosic Biomass

1. Background
    The Clean Air Act (CAA) defines ``cellulosic biofuel'' as 
``renewable fuel derived from any cellulose, hemicellulose, or lignin 
that is derived from renewable biomass and has lifecycle greenhouse gas 
emissions, as determined by the Administrator, that are at least 60 
percent less than the baseline lifecycle greenhouse gas emissions.'' 
However, plants do not contain only cellulose, hemicellulose, and 
lignin; depending on the plant species and other variables (such as 
variety within a generic feedstock type and storage time) they can also 
contain varying amounts of other compounds. Using cellulosic biofuel 
production technologies, some of these other compounds may be 
converted, along with the cellulosic compounds of plant feedstocks, 
into renewable fuel. When this occurs, biofuel producers must ascertain 
what type of RIN or RINs to assign to the resulting renewable fuel. 
Prior to the proposal, EPA had not provided detailed information on how 
other compounds should be treated, which led to uncertainty amongst 
renewable fuel producers about whether their entire volume of fuel 
produced from a cellulosic feedstock would be eligible to generate 
cellulosic RINs.
    In the proposed rule, EPA noted that existing RFS regulations 
specify that the fuel made from certain types of feedstocks that are 
predominantly of cellulosic content \3\ (e.g., fuel made from the 
biogenic portion of separated municipal solid waste) are considered 
entirely made from cellulosic material.\4\ EPA noted that these 
regulations have been based on the view that the statutory requirement 
that cellulosic biofuel be ``derived from cellulose, hemicellulose or 
lignin'' does not mandate that in all cases the renewable fuel must be 
produced only from the cellulosic material in the renewable biomass. 
Rather, EPA considers the statutory definition of cellulosic biofuel to 
be ambiguous on this point, providing EPA the discretion to reasonably 
determine under what circumstances a fuel appropriately should be 
considered cellulosic biofuel when the fuel is produced from a 
feedstock that contains a mixture of cellulosic and non-cellulosic 
materials.\5\ Consistent with this view and the previously established 
statutory interpretation permitting assignment of a single RIN value to 
fuel produced predominantly from one source, EPA proposed that fuels 
made from feedstocks that are ``predominantly'' cellulosic should be 
considered cellulosic biofuel and that all of the volume of fuels from 
such feedstocks could generate cellulosic biofuel RINs. Accordingly, 
EPA proposed that the entire volume of fuel made pursuant to the 
cellulosic biofuel pathways in Table 1 to Sec.  80.1426 be for 
cellulosic biofuel RINs (D code of 3 or 7), based on EPA's proposed 
determination that the feedstocks associated with those pathways are 
composed predominantly of cellulosic materials.\6\
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    \3\ For purposes of this preamble, ``cellulosic content'' means 
cellulose, hemicellulose, and lignin.
    \4\ 75 FR 14670, 14706. In the March 2010 RFS rulemaking, EPA 
determined, in certain circumstances, it is appropriate for 
producers to base RIN assignment on the predominant component.
    \5\ 78 FR 36042, 36047.
    \6\ EPA included in the docket for the Notice of Proposed 
Rulemaking a Memorandum to the Docket, entitled ``Cellulosic Content 
of Various Feedstocks--2014 Update,'' available in docket EPA-HQ-
OAR-2012-0401. This memorandum discusses the cellulosic content of 
various feedstocks, including most of the cellulosic feedstocks 
listed in cellulosic biofuel pathways in Table 1 to 40 CFR 80.1426. 
The memorandum notes that the average adjusted cellulosic content of 
these feedstocks is at least 75%. Because of the high degree of 
natural variability in biomass, average adjusted cellulosic contents 
are likely more meaningful than any single value reported, because 
no single value can reflect the compositional range and variability 
present.
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    EPA solicited comment in the Notice of Proposed Rulemaking (NPRM) 
on several alternative approaches, including a ``cellulosic content 
threshold approach.'' Under the cellulosic content threshold approach, 
EPA would set a minimum threshold of cellulosic content, and only fuels 
made from feedstocks meeting this minimum threshold would be eligible 
to generate cellulosic RINs for their entire fuel volume. EPA suggested 
possible thresholds in the range of 70% to 99.9%.
    After evaluating the comments received, EPA has decided to finalize 
a cellulosic content approach, with a minimum cellulosic content 
threshold of 75%. In section IV.A.2, below, we discuss the merits of 
the approach generally, and how we intend to implement it for 
feedstocks used in cellulosic biofuel pathways listed in Table 1 to 
Sec.  80.1426. This includes special provisions for energy cane and 
annual cover crops. In sections IV.A.3 and IV.A.4 we discuss how RINs 
should be allocated for fuel made from feedstocks containing less than 
75% cellulosic content, and the registration, recordkeeping and 
reporting requirements associated with the rule. In section IV.A.5 we 
discuss application of the cellulosic content threshold approach to 
feedstocks evaluated in the future, and in section IV.A.6 we discuss in 
more detail the comments received and our responses to them.
2. The Cellulosic Content Threshold Approach and Its Application to 
Cellulosic Feedstocks Currently Listed in Table 1 to 40 CFR 80.1426
    EPA has decided to finalize the cellulosic content threshold 
approach and to set the minimum threshold as an average adjusted 
cellulosic content of 75%, measured on a dry mass basis. Since 
inorganic materials are not likely to end up in the final fuel product 
and would not contribute to the fuel heating content in the event that 
they remained in the final fuel, the ``adjusted cellulosic content'' is 
the percent of organic (non-ash) material that is cellulose, 
hemicellulose, or lignin.\7\ Consistent with previous precedents 
permitting assignment of a single RIN value to fuel produced 
predominantly from one source, fuels made from feedstocks that EPA 
determines meet this minimum threshold will, therefore, be eligible for 
cellulosic biofuel RINs for the entire fuel volume produced. As a 
result of this rule, all of the cellulosic biofuel made from the 
following feedstocks is eligible to generate cellulosic RINs for

[[Page 42131]]

the entire volume of fuel produced: Crop residue, slash, pre-commercial 
thinnings and tree residue, switchgrass, miscanthus, Arundo donax, 
Pennisetum purpureum, and biogas from landfills, municipal wastewater 
treatment facility digesters, agricultural digesters, and separated MSW 
digesters (collectively ``predominantly cellulosic feedstocks''). In 
addition, EPA is not modifying existing rules that allow generation of 
cellulosic biofuel RINs for the entire volume of fuel made from 
separated yard waste, see 40 CFR 80.1426(f)(5)(i)(A), and for the 
biogenic portion of fuel made from separated MSW, see 75 FR 14706 and 
40 CFR 80.1426(f)(5)(v), other than to clarify that the testing 
requirement to determine biogenic content of finished fuel made from 
separated MSW does not apply to biogas-derived fuels. For such fuels, 
the anaerobic process limits digestion and associated biogas generation 
to the biogenic components of separated MSW, so all resulting fuel is 
appropriately considered biogenic. Fuels made from feedstocks which do 
not meet the minimum 75% threshold, but which contain some level of 
cellulosic material, will be eligible to generate both cellulosic and 
non-cellulosic RINs using the apportionment methods described below.
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    \7\ Further details about this determination can be found in the 
Memorandum to the Docket, ``Cellulosic Content of Various 
Feedstocks--2014 Update,'' available in docket EPA-HQ-OAR-2012-0401.
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    However, EPA is taking a different approach with respect to the 
Table 1 cellulosic feedstocks energy cane and cover crops. Because 
considerable variability in cellulosic content may exist in plants that 
may be considered sugarcane or energy cane, we have amended the 
definition of energy cane to specify that it refers only to cultivars 
that have been demonstrated to contain an average adjusted cellulosic 
content of at least 75%. Fuel made through cellulosic biofuel pathways 
from feedstocks meeting the new definition of energy cane are eligible 
for cellulosic biofuel RINs for the entire fuel volume.
    Annual cover crops will also be treated differently than other 
cellulosic feedstocks in Table 1. We do not have enough data about 
annual cover crops to be confident that they will always meet the 75% 
threshold. Therefore, in Table 1 annual cover crops will still be 
listed as ``cellulosic components of annual cover crops.'' However, we 
are also adding a new pathway for ``non-cellulosic components of annual 
cover crops,'' which will be eligible for advanced RINs. In the future, 
as more information becomes available, we may revisit this 
determination.
    EPA believes that a 75% content threshold is consistent with the 
statutory definition of cellulosic biofuel, as EPA indicated in the 
NPRM, and satisfies the objective identified in the proposed rule of 
allowing fuels made from feedstocks that are ``predominantly'' 
cellulosic to generate cellulosic biofuel RINs for their entire fuel 
volume. A threshold of 75% also allows fuel made from all predominantly 
cellulosic feedstocks to generate RINs for their entire fuel volume, 
consistent with EPA's principal proposal. As compared to alternative 
approaches discussed in the NPRM, the approach will also greatly 
simplify compliance by cellulosic biofuel producers and reduce 
regulatory burden, since for qualifying cellulosic feedstocks the 
approach to RIN generation is straightforward and will not require 
testing or apportionment of RINs. These benefits, in turn, should help 
to promote cellulosic biofuel production, consistent with Congressional 
objectives. This final rule will help to ensure that cellulosic RINs 
are in fact only generated for fuels derived predominantly from 
cellulosic materials.
    Because all of the fuel produced from predominantly cellulosic 
feedstocks will qualify for cellulosic biofuel RINs, EPA is making 
related modifications to the text in Table 1 to Sec.  80.1426. 
Specifically we are deleting the references to ``cellulosic biomass 
from'' in rows K, L, M, and N to reflect that fuel made pursuant to the 
listed pathways from the feedstocks listed without this modifier are 
eligible to generate cellulosic biofuel RINs even though the feedstocks 
contain some non-cellulosic compounds. However, because certain 
production processes that can be used to produce cellulosic biofuel may 
be employed so as to only derive fuel from the non-cellulosic 
components of feedstock, EPA is also modifying the production process 
description in these lines in the table to specify that the production 
process must convert the cellulosic components of feedstock into 
biofuel. The effect is that cellulosic RINs may only be generated when 
a production process is employed that in fact produces biofuel that is 
derived from the cellulosic content of feedstocks.
    Many commenters agreed that the cellulosic feedstocks currently 
listed in Table 1 are predominantly composed of cellulosic components 
and that allowing all of the fuel derived from these feedstocks to 
qualify for cellulosic biofuel RINs is consistent with the statutory 
definition of cellulosic biofuels. Some commenters asserted that 
allowing all the fuel produced from the cellulosic feedstocks in Table 
1 was an overly expansive interpretation of the statutory definition of 
cellulosic biofuels.\8\ EPA considers the statutory definition to be 
ambiguous on the point of whether cellulosic biofuel RINs may be 
generated for fuel produced from predominantly cellulosic material, 
allowing EPA discretion to reasonably interpret this definition. As 
established in previous rulemakings,\9\ EPA believes the statutory 
definition does not mandate that in all cases cellulosic biofuel must 
be produced exclusively from cellulosic material in the renewable 
biomass, and today's rule adopts a common-sense approach to the matter 
that allows fuel made from predominantly cellulosic feedstocks to 
qualify as cellulosic biofuel.
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    \8\ Comments provided by AFPM/API (EPA-HQ-OAR-2012-0401-0128) 
and Chevron (EPA-HQ-OAR-2012-0401-0171).
    \9\ EPA has previously considered instances where fuel would 
generate cellulosic biofuel RINs even if produced from feedstocks 
containing both cellulosic and non-cellulosic materials. In the 
March 2010 RFS rulemaking, EPA determined that biofuel from 
separated yard waste qualified as cellulosic and would generate 
cellulosic RINs because separated yard waste was ``largely 
cellulosic.'' 75 FR 14794, March 26, 2010.
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    In the NPRM, EPA invited comment on an appropriate threshold value 
for use with a cellulosic threshold approach. EPA received comments on 
a wide range of suggested threshold values, with many commenters 
supporting 70% and 80%, some suggesting multiple thresholds, and some 
commenters requesting much higher (95%) thresholds. Some commenters 
opposed setting a cellulosic content threshold because there is not a 
consensus on a value for a threshold, and one commenter asserted that 
setting a minimum threshold content may stifle development of new 
feedstocks. In response, EPA has decided that a cellulosic content 
threshold of 75% is a reasonable value that appropriately implements 
the statutory requirements.\10\ Feedstocks which do not meet or exceed 
a 75% minimum cellulosic content threshold have a more significant non-
cellulosic portion of the feedstock which could contribute to the 
volume of fuel produced. These feedstocks start to resemble traditional 
crops that have been developed for purposes other than energy 
generation, such as crops that are grown for their sugar content (e.g., 
sugarcane, sweet sorghum). EPA believes that a threshold significantly 
below 75% might inadvertently encourage use of multipurpose feedstocks 
for the production of fuels that are qualified for cellulosic RINs, in 
lieu of the feedstocks

[[Page 42132]]

with a higher cellulosic content that Congress envisioned would be used 
to produce this category of biofuel. On the other hand, a threshold 
higher than 75% would result in regulatory and administrative burdens 
on the use of predominantly cellulosic feedstocks.\11\ EPA believes 
that the 75% threshold strikes a reasonable balance among these 
considerations, while remaining consistent with the statutory 
definition of cellulosic biofuels and past regulatory approaches that 
EPA has taken for specified feedstocks. While arguments could be made 
for other numeric values, EPA believes that a rational basis exists for 
settling on 75%, as explained in this rule, and is within EPA's 
exercise of discretion to reasonably interpret the CAA. EPA believes 
that the 75% threshold, which is well over a 50% or ``majority'' value, 
is consistent with the concept that cellulosic content should be 
predominant in feedstocks for which all resulting fuel is qualified for 
cellulosic biofuel RINs. The 75% threshold also eliminates the current 
regulatory uncertainty for cellulosic biofuel producers, minimizes 
regulatory burden, and as a consequence should help promote the 
production of the category of renewable fuels that provides the most 
lifecycle GHG emissions benefits.
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    \10\ All fuel that qualifies for cellulosic biofuel RINs must 
achieve a minimum 60% lifecycle greenhouse gas emissions reduction 
as compared to baseline fuels, even if some portion of the fuel is 
derived from non-cellulosic materials.
    \11\ Requirements for determining the number of cellulosic 
biofuel RINs that may be generated for fuel derived from feedstocks 
that do not satisfy the minimum cellulosic content threshold adopted 
in today's rule are described in section IV.A.3 of this preamble.
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3. Compliance Requirements for Producers of Cellulosic Biofuel Made 
From Feedstocks That Are Not Predominantly Cellulosic
    In the proposal, EPA invited comment on how to determine the 
appropriate type of RIN or RINs for fuel that is produced from 
feedstocks that contain cellulosic material, but where the feedstocks 
are not predominantly cellulosic in content. Based on the comments 
received, EPA believes that the existing regulations at Sec.  
80.1426(f)(3)(vi) provide an appropriate mechanism for allocation of 
RINs, both for processes that convert two or more feedstocks 
simultaneously where not all feedstocks are predominantly cellulosic, 
and for processes using a single feedstock that has an average 
cellulosic content below 75%. However, EPA is amending the regulations, 
by adding new registration, recordkeeping, and reporting requirements 
(``RRR requirements'') to allow EPA to verify that the formula in Sec.  
80.1426(f)(3)(vi) is being applied appropriately for cellulosic biofuel 
RIN generation. EPA believes that, to relieve regulatory burden and 
streamline program implementation, it makes sense to establish a 75% 
minimum cellulosic content threshold above which testing and reporting 
of cellulosic content and RIN apportionment is not necessary. However, 
when fuel is made from feedstocks below the 75% cellulosic content 
threshold, EPA believes that testing of the feedstock's cellulosic 
content is appropriate, and that RINs should be apportioned according 
to the test results.
    EPA recognizes that one result of today's rule is that fuel made 
from a feedstock meeting the 75% minimum cellulosic content threshold 
will qualify completely for cellulosic RINs, whereas fuel made from a 
feedstock containing 74% cellulosic content would, through the 
apportionment formula, only qualify for at most 74% cellulosic RINs. 
EPA believes it is appropriate to have simplified procedures for fuel 
made from feedstocks that are predominantly cellulosic, and has 
selected a 75% threshold to identify these feedstocks. At some level of 
content, EPA believes there is less benefit to requiring that 
manufacturers account for the increasingly small non-cellulosic content 
of the feedstock. EPA has determined that 75% cellulosic content is a 
large enough percentage that it is appropriate to allow full 
qualification. This results in a simplified implementation approach for 
the large majority of feedstocks typically considered ``cellulosic'' in 
nature. While this obviously allows significantly greater benefits to 
producers using feedstocks above 75% cellulosic content, compared with 
fuel derived from feedstocks containing just below 75% cellulosic 
content, the difference is the inevitable result of having any sort of 
threshold level. Wherever EPA set the threshold, fuels made from 
feedstocks that just fail to satisfy the threshold will be treated 
differently. For the reasons provided, EPA believes that the approach 
is reasonable and appropriate.
    As one possible approach to addressing the disparity between fuels 
made from feedstocks that meet the 75% minimum cellulosic content 
threshold and those that do not, EPA considered the option of allowing 
up to an additional 25% of fuel made from feedstock not meeting the 
threshold to qualify for cellulosic biofuel RINs, beyond levels that 
are determined to reflect the cellulosic converted fraction. While this 
approach could be seen as providing more equitable treatment of fuels 
made from feedstocks that satisfy the 75% cellulosic content threshold 
and those that do not, EPA determined that it would be inappropriate. 
The principal objective of the cellulosic content approach adopted 
today is to minimize burdens and streamline program implementation for 
both EPA and producers of cellulosic biofuel and provide incentives for 
production of fuels that are 75% or greater cellulosic content. 
However, for fuels made from feedstocks that do not meet the minimum 
cellulosic content threshold, testing (either of cellulosic content of 
feedstock or of the proportion of fuel derived from cellulosic content) 
will be required. In cases where the expense and burden of testing is 
undertaken, EPA believes it is most consistent with the objectives of 
the Act for RIN apportionment to accurately reflect the test results.
4. Testing, Registration, Reporting and Recordkeeping Requirements for 
Cellulosic Biofuel
    The agency requested comment on test methods available to determine 
what percentage of a finished biofuel volume was derived from 
cellulosic or non-cellulosic components. At the time of the proposal, 
we were not aware of any ready test that could be used to identify the 
amount of a finished fuel that was derived from cellulosic versus non-
cellulosic components. However, we received several comments that 
suggested there are methods available for this purpose.\12\ Given this 
new information, we believe it is reasonable to require the use of 
these existing methods under certain circumstances when fuel is 
produced from feedstocks that are not predominantly cellulosic to 
verify that the values used in the formula at Sec.  80.1426(f)(3)(vi) 
are as accurate as possible. Therefore, as part of this final rule, we 
are requiring the use of these available test methods under certain 
circumstances described below to help ensure that an appropriate number 
of cellulosic RINs are generated when applying the formula at Sec.  
80.1426(f)(3)(vi).
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    \12\ Comments suggested various methods to determine the 
converted fraction, including approaches for performing a mass-
balance accounting of feedstock components converted to fuel 
products. As described in the memo to the docket, ``Additional 
Detail on the Calculation of the Cellulosic Converted Fraction, and 
Attribution of Batch RINs for D-code Dependent Feedstocks,'' 
available in docket EPA-HQ-OAR-2012-0401, a mass balance approach 
which meets the requirements discussed below is an appropriate 
method for calculating the converted fraction. Converted fraction 
refers to the portion of the feedstock converted into renewable fuel 
by the producer and is used in calculating cellulosic RIN volumes 
generated.
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    As described in more detail below, different feedstocks and 
processes require more information to ensure a

[[Page 42133]]

high degree of confidence that cellulosic biofuel RINs are 
appropriately generated. These registration, recordkeeping, and 
reporting requirements, including changes to the production process 
requirements of Table 1 to Sec.  80.1426, are described in the 
following sections. These requirements apply to all relevant 
registrations and registration updates, including cellulosic biofuel 
pathways approved pursuant to a Sec.  80.1416 petition process which 
take place after the effective date of this rule.

a. Additional Registration Requirements for Certain Producers Seeking 
To Generate Cellulosic Biofuel RINs

    At registration or during registration updates under Sec.  
80.1450(d)(3), all producers seeking to use a cellulosic biofuel 
pathway that converts cellulosic biomass to fuel (currently rows K, L, 
M, and N of Table 1 to Sec.  80.1426, or as otherwise approved by EPA), 
must demonstrate that their production process has the ability to 
convert cellulosic components to fuel by including (1) a process 
diagram with all relevant unit processes labeled and a designation of 
which unit process is capable of performing cellulosic treatment; (2) a 
description of the cellulosic biomass treatment process; and (3) a 
description of the mechanical, chemical, and biochemical mechanisms by 
which cellulosic materials can be converted to fermentable sugars or 
biofuel products. In addition, an independent professional engineer 
must verify that the equipment to perform each of the relevant unit 
processes required to convert cellulosic biomass to biofuel is in place 
as part of registration, in order to demonstrate that the conversion 
process will derive the finished fuel from cellulosic components.

b. Additional Registration Requirements for Renewable Fuel Produced 
From Energy Cane

    Energy cane is derived from sugarcane, which can be and is bred for 
a variety of uses and a wide range of fiber and sugar contents.\13\ 
Prior to this rule, energy cane was defined in 40 CFR 80.1401 as ``a 
complex hybrid in the Saccharum genus that has been bred to maximize 
cellulosic rather than sugar content.'' This definition did not include 
any specific requirements regarding cellulosic content. However, some 
cultivars \14\ of cane are bred to have a high sugar content and 
therefore have a lower percent cellulosic content. For example, two 
cultivars released by USDA, which are commonly referred to as energy 
cane,\15\ have cellulosic contents of approximately 50% on a dry matter 
basis.\16\ Fuel produced from these cultivars would not be derived 
predominantly from cellulose, hemicellulose, and lignin; instead, the 
fuel would largely be derived from sugar. Therefore, in this rule EPA 
is amending the definition of energy cane to specify that it means 
cultivars that have, on average, at least 75% adjusted cellulosic 
content on a dry matter basis. Cultivars that do not meet the 75% 
adjusted cellulosic content threshold will be considered sugarcane. 
With this clarification, only cultivars that have predominantly 
cellulosic content are included in the definition of energy cane and 
are qualified to generate cellulosic RINs for the entire volume of 
finished fuel produced. When cultivars containing less than 75% 
adjusted cellulosic content are used to make fuel, we consider those 
cultivars to be sugarcane and eligible to generate advanced biofuel 
RINs for the portion of fuel that is derived from sugar. If the bagasse 
is converted to renewable fuel, cellulosic RINs could be generated for 
the amount of fuel derived from the bagasse (under the existing crop 
residue pathway).
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    \13\ Tew, Thomas L. and Robert M. Cobill. 2008. Genetic 
improvement of sugarcane (Saccharum spp.) as an energy crop. p. 249-
272. In: W. Vermerris (ed.) Genetic Improvement of Bioenergy Crops. 
Springer.
    \14\ A cultivar is a subset of a species. USDA has provided a 
list of sugarcane cultivars (including energy cane). This list, 
``USDA ARS Sugarcane Release Notices 1999 to 2012,'' is included in 
the docket.
    \15\ Ho 00-961 and HoCP 91-552; Tew, Thomas L. and Robert M. 
Cobill. 2008. Genetic improvement of sugarcane (Saccharum spp.) as 
an energy crop. p. 249-272. In: W. Vermerris (ed.) Genetic 
Improvement of Bioenergy Crops. Springer.
    \16\ Tew, T. L. et al., 2007. ``Notice of release of high-fiber 
sugarcane variety Ho 00-961.'' Sugar Bulletin, 85(10) 23-24. Tew, T. 
L. et al, 2007. ``Notice of release of high-fiber sugarcane variety 
HoCP 91-552.'' Sugar Bulletin, 85(10) 25-26. Ho 00-961 has a Brix 
value of 17-19% cane, and HoCP 91-552 has a Brix value of 15-18% 
cane, where Brix is a measure of the total soluble solids, including 
sugar. These Brix values are similar to the Brix value of a 
traditional sugarcane cultivar presented in these papers. Ho 00-961 
has a percent cellulosic content of 47%, and HoCP 91-552 has a 
percent cellulosic content of 48%. The percent cellulosic content is 
calculated using the fiber content (as a measure of the cellulosic 
content) presented in the papers, divided by the total solids 
content (Brix + fiber). By contrast, energy cane cultivar L 79-1002, 
which has a higher fiber content, has a Brix value of 8-12% cane, as 
reported by Bischoff, K.P. et al., 2008. ``Registration of `L 79-
1002' sugarcane.'' Journal of Plant Registrations, 2(3) 211-217, and 
Hale, A.L. 2010, ``Notice of release of a high fiber sugarcane 
variety Ho 02-113.'' Sugar Bulletin, 88(10) 28-29.
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    Upon registration, fuel producers seeking to produce cellulosic 
biofuel using energy cane feedstocks will need to submit data showing 
that the average adjusted cellulosic content of each energy cane 
cultivar they intend to use is at least 75%, based on the average of at 
least three representative samples of each cultivar.\17\ Cultivars must 
be grown under normal growing conditions and consistent with accepted 
farming practices. Samples must come from a feedstock supplier that the 
fuel producer intends to use when operating their production process 
and must represent the feedstock supplier's range of growing conditions 
and locations. Producers that decide after initial registration to use 
energy cane or a new energy cane cultivar will need to update their 
registration and provide data to EPA demonstrating the average adjusted 
cellulosic content for each cultivar they intend to use. Cellulosic 
content data must come from an analytical method certified by a 
voluntary consensus standards body (VCSB) or a non-VCSB method that 
would produce reasonably accurate results.\18\ Producers using a non-
VCSB approved method will need to show that the method used is an 
adequate means of providing reasonably accurate results by providing 
peer reviewed references to the third party engineer performing the 
engineering review at registration. Because cane can be bred for a 
variety of uses, and different cultivars of cane can have different 
amounts of cellulosic material, these registration requirements will 
help ensure that fuel producers know whether or not the cultivars they 
intend to use meet the 75% adjusted cellulosic content threshold and 
are qualified to generate RINs for the entire volume of finished fuel. 
EPA expects to require similar registration requirements for producers 
seeking to produce cellulosic biofuel using feedstocks that will be 
evaluated in the future that could similarly be bred for a wide range 
of uses and fiber content.
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    \17\ As described above and in the Memorandum to the Docket, 
``Cellulosic Content of Various Feedstocks--2014 Update,'' available 
in docket EPA-HQ-OAR-2012-0401, adjusted cellulosic content is the 
percent of organic (non-ash) material that is cellulose, 
hemicellulose, and lignin. Therefore, a calculation of the adjusted 
cellulosic content requires a measurement of the cellulosic content, 
as well as a measurement of the ash content of a feedstock.
    \18\ For example, AOAC 2002.04 ``Amylase-Treated Neutral 
Detergent Fiber in Feeds'' or ASTM E1758 ``Determination of 
Carbohydrates in Biomass by High Performance Liquid 
Chromatography.'' Voluntary consensus standards bodies are defined 
as ``domestic or international organizations which plan, develop, 
establish, or coordinate voluntary standards using agreed-upon 
procedures.'' See ``Federal Use of Standards,'' Office of Management 
and Budget, http://www.whitehouse.gov/omb/fedreg_a119rev.

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[[Page 42134]]

c. Additional Registration, Recordkeeping, and Reporting Requirements 
for Producers of Cellulosic Fuels Derived From the Simultaneous 
Conversion of Feedstocks That Are Predominantly Cellulosic and 
Feedstocks That Are Not Predominantly Cellulosic

    Under Sec.  80.1426(f)(3)(vi), if a renewable fuel producer 
produces a single type of renewable fuel (e.g., ethanol) using two or 
more different feedstocks which are processed simultaneously, and at 
least one of the feedstocks does not have a minimum 75% average 
adjusted cellulosic content, the producer would have to determine how 
much of the finished fuel is derived from the cellulosic versus non-
cellulosic components of the feedstocks and assign RINs to the finished 
fuel based on the relative ``converted fractions.'' \19\ Given 
variations in individual conversion processes, enzymes used, and other 
differences, the amount of finished fuel that is derived from the 
cellulosic content can vary. For example, the process and enzymes used 
may do a better job of converting the sugars and starches in a 
feedstock than the cellulose or hemicellulose. In such a case the 
cellulosic content of the feedstock may not be a good indicator of the 
amount of finished biofuel that is derived from cellulosic materials. 
Furthermore, depending on the conversion process used, the amount of 
information needed to determine how much of the finished fuel is 
derived from the cellulosic content will also vary.
---------------------------------------------------------------------------

    \19\ See Sec.  80.1426(f)(3)(vi). Converted fraction refers to 
the portion of the feedstock converted into renewable fuel by the 
producer and is used in calculating cellulosic RIN volumes 
generated.
---------------------------------------------------------------------------

    Therefore, EPA believes it is prudent to include specific 
requirements related to calculating the cellulosic converted fraction 
and to specify appropriate registration, recordkeeping, and reporting 
requirements for producers seeking to generate cellulosic RINs using 
two or more feedstocks \20\ which are processed simultaneously. EPA has 
attempted to minimize additional requirements, so has limited certain 
provisions to circumstances where a producer seeks to generate 
cellulosic RINs for fuel produced by ``in situ'' biochemical hydrolysis 
treatment where cellulosic and non-cellulosic components of feedstocks 
(at least one of which is not predominantly cellulosic) are 
simultaneously hydrolyzed to fermentable sugars (e.g., corn starch and 
a crop residue). These additional registration, recordkeeping, and 
reporting requirements will also apply to producers that combine 
cellulosic- and non-cellulosic-derived sugars from separate hydrolysis 
units prior to fermentation. In the latter case, the cellulosic 
conversion factor can be obtained by analyzing feedstock conversion in 
the cellulosic hydrolysis unit.
---------------------------------------------------------------------------

    \20\ As described in section IV.A.5, if a future feedstock does 
not meet the 75% threshold, we consider it as comprised of two 
separate feedstocks: one cellulosic and one non-cellulosic.
---------------------------------------------------------------------------

    A fundamental distinction relevant to verifying conversion of 
cellulosic content is whether or not a process converts the entire 
organic fraction into fuel. Thermochemical conversion is an example of 
a process that converts the entire organic fraction. Thermochemical 
processes mainly consist of (1) pyrolysis: a process in which 
cellulosic biomass is decomposed with temperature to bio-oils that can 
be further processed to produce a finished fuel or (2) gasification: a 
process in which cellulosic biomass is decomposed to synthesis gas 
(``syngas'') that with further catalytic processing can produce a 
finished fuel product. Thermochemical processes typically convert all 
of the organic components of the feedstock into finished fuel, thus the 
finished fuel produced from the thermochemical process is proportional 
to the cellulosic content of the organic fraction of the feedstock 
material.
    Alternatively, biochemical conversion is an example of a non-
thermochemical type of process that does not convert the entire organic 
fraction into fuel. Biochemical processes convert different fractions 
of the cellulosic and non-cellulosic carbohydrates to finished fuel. 
During this process, enzymatic hydrolysis releases sugars from 
feedstock carbohydrates and employs microorganisms to convert those 
sugars into fuels.
    Since thermochemical processes typically convert all of the organic 
components of the feedstock into finished fuel, fewer recordkeeping and 
reporting requirements are necessary to verify appropriate cellulosic 
biofuel RIN generation for producers using thermochemical conversion 
processes. In addition, since the finished fuel produced from the 
thermochemical process is proportional to the cellulosic content of the 
organic fraction of the feedstock material, demonstration of the 
cellulosic content of the feedstock is the only additional registration 
requirement that is necessary for thermochemical processes. In 
contrast, biochemical conversion does not convert the entire organic 
fraction into fuel and the converted fraction is variable and not 
proportional to the cellulosic content of the organic fraction of the 
feedstock material. Therefore, we believe it is prudent to require 
additional registration, reporting, and recordkeeping requirements for 
in situ biochemical conversion processes to ensure that cellulosic RINs 
are appropriately generated for the finished fuel.
    In the proposal, EPA requested comment on conversion technologies, 
and we also requested comment on whether to allow 100% of the fuel 
produced via biochemical processes to generate cellulosic RINs. EPA 
received comments supporting our proposal to allow biochemical 
processes to generate 100% cellulosic RINs but, as discussed above, 
biochemical processes will also typically convert portions of the sugar 
and starch components of the feedstock. If feedstocks containing 
significant amounts of starches and sugars are used in a biochemical 
process, the resulting fuel may not be predominantly of cellulosic 
origin. Therefore, EPA is not finalizing this aspect of its proposal. 
Instead, EPA has finalized the cellulosic threshold approach which will 
generally allow cellulosic biofuel RIN generation for all fuel produced 
by cellulosic conversion processes using feedstocks determined to have 
an average adjusted cellulosic content of at least 75%.
i. Registration Requirements
    As explained in section IV.A.4.a, at registration, producers 
seeking to use a cellulosic biofuel pathway that converts cellulosic 
biomass to fuel (currently listed in rows K, L, M, and N of Table 1 to 
Sec.  80.1426), or as otherwise approved by EPA, must demonstrate the 
ability to convert cellulosic components of their feedstock to fuel. In 
addition, producers seeking to generate cellulosic RINs (D code of 3 or 
7) using two or more different feedstocks (at least one of which does 
not have at least 75% average adjusted cellulosic content) which are 
processed simultaneously using a thermochemical conversion process will 
be able to allocate cellulosic RINs using the formula in Sec.  
80.1426(f)(3)(vi) where the cellulosic fraction is proportional to the 
cellulosic content of the feedstock. The average adjusted cellulosic 
content of the feedstock will have to be reported at registration, 
based on the average of at least three representative samples, and 
cellulosic content data must come from an analytical method certified 
by a voluntary consensus standards body (VCSB) or a non-VCSB method 
that would produce reasonably accurate

[[Page 42135]]

results.\21\ Producers using a non-VCSB approved method will need to 
show that the method used is an adequate means of providing reasonably 
accurate results by providing peer reviewed references to the third 
party engineer performing the engineering review at registration. 
Producers that later want to change their feedstock will need to update 
their registration. Parties that initially registered prior to the 
effective date of this rule must comply with the new requirements at 
their next required registration update.
---------------------------------------------------------------------------

    \21\ For example, AOAC 2002.04 ``Amylase-Treated Neutral 
Detergent Fiber in Feeds'' or ASTM E1758 ``Determination of 
Carbohydrates in Biomass by High Performance Liquid 
Chromatography.''
---------------------------------------------------------------------------

    Producers generating RINs with a D code of 3 or a D code of 7 using 
two or more different feedstocks (at least one of which does not have 
at least 75% average adjusted cellulosic content) which are processed 
simultaneously through an in situ biochemical hydrolysis treatment will 
similarly have additional registration requirements to help ensure that 
cellulosic RINs are being generated accurately. At the time of 
registration, such a producer must submit (1) the overall fuel yield 
\22\ including supporting data demonstrating this yield and a 
discussion of the possible variability in overall fuel yield that could 
be expected between reporting periods; (2) the cellulosic converted 
fraction that will be used for generating RINs under Sec.  
80.1426(f)(3)(vi), including chemical analysis data (described in more 
detail below) supporting the calculated cellulosic converted fraction 
and a discussion of the possible variability that could be expected 
between reporting periods; and (3) a description of how the cellulosic 
converted fraction is determined and calculations showing how the data 
were used to determine the cellulosic converted fraction.
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    \22\ The overall fuel yield is determined to be the total volume 
of fuel produced (e.g., cellulosic plus non-cellulosic fuel volume) 
divided by the total feedstock mass (sum of all feedstock masses) on 
a dry mass basis.
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    Data used to calculate the cellulosic converted fraction by 
producers using in situ biochemical hydrolysis treatment who seek to 
generate cellulosic RINs must be representative and obtained using an 
analytical method certified by a voluntary consensus standards body 
(VCSB) or using a non-VCSB method that would produce reasonably 
accurate results. If using a non-VCSB approved method to generate the 
data required to calculate the cellulosic converted fraction for a 
given fuel, then the producer will need to show that the method used is 
an adequate means of providing reasonably accurate results by providing 
peer reviewed references to the third party engineer performing the 
engineering review at registration. A full description of the formulas 
in Sec.  80.1426(f)(3) used to calculate RINs for renewable fuel 
described by two or more pathways, including methods used to calculate 
the converted fraction, can be found in the associated memo to the 
docket.\23\
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    \23\ ``Additional Detail on the Calculation of the Cellulosic 
Converted Fraction, and Attribution of Batch RINs for D-code 
Dependent Feedstocks,'' which is available in docket EPA-HQ-OAR-
2012-0401.
---------------------------------------------------------------------------

ii. Additional Cellulosic Converted Fraction Reporting and 
Recordkeeping Requirements
    Producers generating cellulosic RINs using two or more different 
feedstocks (at least one of which does not have at least 75% average 
adjusted cellulosic content) which are processed simultaneously using 
an in situ biochemical hydrolysis treatment will also have additional 
recordkeeping and reporting requirements to provide ongoing 
verification that the cellulosic RINs are being accurately allocated.
    The converted fraction provides a comprehensive accounting of the 
portion of a feedstock that is converted into cellulosic fuel. The 
formula in Sec.  80.1426(f)(3)(vi) requires producers to calculate a 
converted fraction for each category of RINs generated. That converted 
fraction is then used to determine the appropriate number and type of 
RINs to assign to a batch of renewable fuel.
    Comments suggested calculating the amount of the finished fuel 
derived from the cellulosic and non-cellulosic components could create 
an administrative burden if required on a batch-by-batch basis. EPA is 
structuring applicable registration, recordkeeping, and reporting 
requirements in a manner intended to result in accurate accounting 
while also avoiding overly burdensome requirements. Therefore the final 
rule provides that the cellulosic converted fraction will initially be 
based on the data submitted at registration.
    This upfront converted fraction determination will apply to RINs 
produced until a new converted fraction allocation is available and 
reported. The interval at which a new converted fraction must be 
reported is similarly intended to avoid unnecessary burden on 
producers. EPA is requiring that low volume producers calculate the 
cellulosic converted fraction annually. However, for higher volume 
producers, we believe more frequent calculating and reporting is 
prudent and are requiring that the cellulosic converted fraction be 
recalculated within 10 business days of every 500,000 gallons of 
cellulosic RINs generated. This information will be reported in the 
quarterly report. Low-volume producers may report the current converted 
fraction value used to generate RINs on their quarterly reports if they 
have not produced 500,000 cellulosic gallons in the calendar year. 
Periodic cellulosic converted fraction determinations will be made by 
collecting new process data and performing the same chemical analysis 
approved at registration, using representative data. If at any point 
new data show that the converted fraction is different from that 
reported in the previous period, the formula used to generate RINs at 
Sec.  80.1426(f)(3)(vi) must be updated as soon as practical but no 
later than 5 business days after the producer receives the new data. If 
new testing data results in a change to the cellulosic converted 
fraction, only RINs generated after the new testing data were received 
would be affected. In addition if a renewable fuel producer changes 
their process (for example, stops using enzymes in their cellulosic 
hydrolysis or changes the enzymes used), the producer must calculate a 
new converted fraction and update their registration consistent with 
Sec.  80.1450(d).
    Given the natural variation in cellulosic content and conversion 
efficiencies, EPA recognizes some variation will exist in the amount of 
cellulosic fuel that is derived from the cellulosic components of a 
feedstock. However, certain circumstances raise significant concerns 
with respect to cellulosic RIN generation. While we believe that 
variation within 10% of the previously calculated numbers may result 
under normal operating conditions, larger variations raise concerns 
that the process or feedstock has significantly changed from what was 
approved at registration. If the cellulosic converted fraction deviates 
from the previously calculated cellulosic converted fraction by 10% or 
more, it is appropriate for the producer to alert EPA to this change 
and update the formula used to calculate RIN allocations as soon as 
possible. The producer must (1) notify EPA within 5 business days and 
(2) adjust the formula used to generate RINs at Sec.  80.1426(f)(3)(vi) 
for all fuel generated as soon as practical but no later than 5 
business days after the producer receives the new data. As explained 
above, if new testing data results in a change to the cellulosic 
converted

[[Page 42136]]

fraction, only RINs generated after the new testing data were received 
would be affected.
5. Determining the Average Adjusted Cellulosic Content of Feedstocks 
Going Forward
    EPA will apply the minimum average adjusted cellulosic content 
threshold framework described above for feedstocks evaluated in the 
future. If these feedstocks meet the 75% average adjusted cellulosic 
content threshold, we will allow the fuel producer using them in 
approved cellulosic biofuel pathways to generate cellulosic RINs for 
all of the finished fuel volume. If the feedstock does not meet the 75% 
threshold, we would expect to create two separate regulatory pathways--
one involving ``cellulosic components of [feedstock X]'' and another 
involving ``non-cellulosic components of [feedstock X]''). A producer 
using both of these feedstocks which are processed simultaneously, 
would allocate cellulosic and non-cellulosic RINs using the formula in 
Sec.  80.1426(f)(3)(vi). Fuel producers using feedstocks evaluated in 
the future would also be subject to the appropriate registration, 
reporting, and recordkeeping requirements described in section IV.A.4.
    EPA anticipates that it will determine the cellulosic content of 
newly evaluated feedstocks that might be used to produce cellulosic 
biofuel up front when it conducts a lifecycle analysis of a pathway 
involving the new feedstock. For example, EPA will calculate the 
average adjusted cellulosic content of feedstocks such as energy 
sorghum and energy beets at the same time that we evaluate the 
lifecycle GHG emissions associated with these feedstocks. As with 
lifecycle analyses, EPA may undertake the evaluation of the cellulosic 
content of feedstocks either in the context of a rulemaking to amend 
Table 1 to Sec.  80.1426, or in response to an individual petition 
submitted pursuant to Sec.  80.1416. In either case, EPA will clarify 
whether the feedstock meets the 75% cellulosic content threshold 
allowing cellulosic RINs to be generated for the entire fuel volume 
produced, or if the producer should use the apportionment method in 
Sec.  80.1426(f)(3)(vi). Future petitioners pursuant to the process in 
Sec.  80.1416 should submit peer-reviewed data on the average 
cellulosic content of their feedstock as well as their own estimate of 
cellulosic content based on these data.
    In the proposal, EPA sought comment on whether individual producers 
should be responsible for submitting data on the cellulosic content of 
their feedstock, or whether EPA should determine whether feedstocks 
meet the threshold based on existing published data. We received 
comments that EPA should determine whether feedstocks meet the 
threshold and should use existing published data. In addition, we 
received a range of opinions on whether the producer should also be 
required to provide data. Some comments suggested that EPA should use 
both existing published data and data from the producer, because 
academic publications may not be up to date with industry. Some 
comments said fuel producers should be allowed to present data if their 
feedstocks have higher cellulosic content than published data. One 
comment said that if no peer-reviewed data exist, the producers should 
provide data. Some comments suggested that producers should be required 
to maintain documentation of cellulosic content, as well as evidence 
that the cellulosic content was the primary source of biofuels 
production. Others commented that producers should not be required to 
measure, submit and certify feedstock composition. In the future, 
producers should submit data regarding cellulosic content in order to 
ensure a determination is made on the most up to date data. EPA will 
evaluate this information, together with other available information, 
on a case by case basis to determine whether feedstocks meet the 
cellulosic content threshold.
6. Other Comments Received
    EPA considered a range of alternative approaches for determining 
appropriate cellulosic RIN generation with different types of 
feedstocks. These approaches were discussed in the NPRM and also 
evaluated in public comments. This section discusses these alternative 
approaches and comments.
a. Treatment of Cellulosic Feedstocks Currently Listed in Table 1 to 40 
CFR 80.1426
    In the NPRM, EPA sought comment on multiple approaches for 
determining the volume of cellulosic RINs from currently approved 
cellulosic feedstocks listed in Table 1 to Sec.  80.1426. Many 
commenters preferred allowing feedstock sources listed in Table 1 to 
Sec.  80.1426 to generate cellulosic RINs without applying a threshold, 
although some commenters asserted a minimum content threshold could be 
used in conjunction with the proposed approach. In addition, one 
commenter suggested adding ``planted trees from a tree plantation'' to 
Table 1 to Sec.  80.1426.\24\ However, this addition would require 
further analysis of the lifecycle greenhouse gas emissions of this 
feedstock, and is beyond the scope of this rule. As discussed above, 
EPA is finalizing the cellulosic content threshold approach that 
generally qualifies all fuel produced from predominantly cellulosic 
feedstocks pursuant to existing cellulosic biofuel pathways listed in 
Table 1 for cellulosic RINs. In addition, the approach will guide EPA 
evaluation of future feedstocks not currently included in Table 1 to 
Sec.  80.1426.
---------------------------------------------------------------------------

    \24\ Comment provided by Blue Source (EPA-HQ-OAR-2012-0401-
0137).
---------------------------------------------------------------------------

    Some commenters asserted EPA should adopt a plurality approach to 
determining whether cellulosic RINs could be generated when using 
particular feedstocks.\25\ Instead of requiring that the cellulosic 
content make up a predominant percentage of the organic material from 
which the fuel is derived, under this approach, feedstocks would be 
deemed cellulosic if a plurality of the contained material is 
cellulosic. EPA acknowledges that such an approach would likely lead to 
larger production volumes of cellulosic biofuels. However, as discussed 
above, the statutory definition of cellulosic biofuel provides that 
they are ``derived from cellulose, hemicellulose, or lignin.'' EPA 
believes that to effectuate Congressional intent in promoting fuels 
derived from these sources, it is appropriate to require that 
qualifying fuels be predominantly cellulosic in content. Therefore the 
75% cellulosic content threshold approach adopted today is preferable 
in this regard to the commenter's suggestion.
---------------------------------------------------------------------------

    \25\ Comments provided by Smithfield Foods (EPA-HQ-OAR-2012-
0401-0103) and the National Association of Clean Water Agencies 
(EPA-HQ-OAR-2012-0401-0178).
---------------------------------------------------------------------------

    Other commenters contended EPA should establish a minimum 
cellulosic content for individual feedstocks and assign RINs based only 
on this content, instead of allowing feedstocks currently listed in 
Table 1 to Sec.  80.1426 to generate cellulosic RINs for their entire 
fuel volume.\26\ EPA believes this approach would create unnecessary 
administrative and regulatory burden. Instead of setting a minimum 
content for each individual feedstock, EPA is finalizing a single 
cellulosic content threshold. EPA has determined that most of the 
feedstocks listed in Table 1 to Sec.  80.1426 for cellulosic biofuel 
pathways satisfy the 75% cellulosic content threshold adopted today. In

[[Page 42137]]

addition, as described in section IV.A.5, EPA will assess the 
cellulosic content of future individual feedstocks as part of the 
lifecycle analysis process and determine whether the feedstock exceeds 
this threshold. Therefore, individual feedstocks will be analyzed to 
determine if they meet the minimum cellulosic content threshold, and 
different regulatory provisions apply depending on the result.
---------------------------------------------------------------------------

    \26\ Comments provided by AFPM/API (EPA-HQ-OAR-2012-0401-0128) 
and Chevron (EPA-HQ-OAR-2012-0401-0171).
---------------------------------------------------------------------------

    Several commenters stated that the emphasis should be placed on 
whether a feedstock meets the 60 percent reduction in greenhouse gas 
emissions relative to the baseline petroleum fuel they replace,\27\ 
particularly where a feedstock is predominantly cellulosic.\28\ One 
commenter also noted the agency should emphasize whether the feedstock 
has similar overall environmental qualities as a feedstock that is 
entirely cellulosic, such as the potential to avoid competition with 
food, the potential to require less fertilizer, pesticides, and 
irrigation, and the potential for a lower fossil fuel energy input 
requirement.\29\ In response, EPA notes that it is required to 
implement the statutory requirements, and that the CAA is clear that a 
cellulosic biofuel must be both derived from cellulosic materials and 
meet the 60 percent GHG emission reduction threshold. Therefore, EPA is 
not free to establish regulations focusing exclusively on attainment of 
the 60% GHG reduction threshold, while ignoring the cellulosic content 
of the feedstock used to produce the fuel. In addition, EPA notes that 
in determining whether or not the fuel produced pursuant to a 
particular pathway satisfies the minimum 60 percent GHG reduction 
threshold for cellulosic biofuel, EPA does take into consideration a 
number of factors of concern to the commenter, including use of 
fertilizer and amount of fuels consumed in the production process. The 
Agency will continue to evaluate lifecycle emissions for feedstocks and 
require this reduction in greenhouse gas emissions for cellulosic 
pathways.
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    \27\ Comments provided by BP (EPA-HQ-OAR-2012-0401-0130), Iowa 
Corn Growers Association (EPA-HQ-OAR-2012-0401-0131), and NRDC (EPA-
HQ-OAR-2012-0401-0136).
    \28\ Comments provided by BP (EPA-HQ-OAR-2012-0401-0130) and 
NRDC (EPA-HQ-OAR-2012-0401-0136).
    \29\ Comment provided by NRDC (EPA-HQ-OAR-2012-0401-0136).
---------------------------------------------------------------------------

    EPA also sought comment on a specified percentage approach, under 
which fuels produced from feedstocks listed in Table 1 to Sec.  80.1426 
would be eligible to generate cellulosic RINs for 85% of their volume, 
and the remaining 15% would be eligible to generate advanced RINs. This 
percentage was based on data that suggested that the average adjusted 
cellulosic content of the predominantly cellulosic feedstocks currently 
listed in Table 1 for cellulosic biofuel pathways was approximately 
85%. Commenters generally opposed the specified percentage approach, 
asserting that it would create administrative burden to track two 
classes of RINs, that a partial loss of cellulosic RINs could hurt the 
financial viability of producers, and that there is the possibility of 
RIN generation errors.\30\
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    \30\ Comments provided by National Sorghum Producers (EPA-HQ-
OAR-2012-0401-0065), the Renewable Fuels Association (EPA-HQ-OAR-
2012-0401-0123), Weyerhaeuser (EPA-HQ-OAR-2012-0401-0140), NexSteppe 
(EPA-HQ-OAR-2012-0401-0153), the Independent Fuel Terminal Operators 
Association (EPA-HQ-OAR-2012-0401-0165) and Global Renewable 
Strategies and Consulting, LLC (EPA-HQ-OAR-2012-0401-0184). Some 
commenters expressed support for the specified percentage approach. 
See comments provided by the AFPM/API (EPA-HQ-OAR-2012-0401-0128), 
Phillips 66 (EPA-HQ-OAR-2012-0401-0102), Chevron (EPA-HQ-OAR-2012-
0401-0171), and Camco (EPA-HQ-OAR-2012-0401-0183).
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    EPA has concluded that this approach would significantly increase 
the complexity of the program without providing additional 
environmental benefits. EPA believes the additional precision the 
method would provide is not justified in light of the administrative 
and regulatory burden associated with it, and that overall the 
cellulosic content threshold approach we are adopting today provides an 
appropriate balance of the competing considerations of precision and 
adopting a workable approach. Therefore, for the reasons described 
above, EPA is finalizing the content threshold approach.
b. Feedstocks With Lower Average Cellulosic Content Than Feedstocks 
Currently Listed in Table 1 to Sec.  80.1426
    In the proposal, EPA also invited comment on how to treat 
feedstocks that had lower average cellulosic content than the 
feedstocks currently listed in Table 1 to Sec.  80.1426. Some 
commenters suggested using an approach with multiple thresholds, where 
fuel made from feedstocks that meet the highest cellulosic content 
threshold would receive 100% cellulosic RINs, and fuel made from 
feedstocks meeting lower thresholds would receive a fixed percentage of 
cellulosic RINs, with the remaining fuel receiving advanced RINs. Some 
comments suggested cellulosic RINs should not be generated for fuels 
with low cellulosic content.\31\ Other commenters stated that the 
existing regulations in Sec.  80.1426(f)(3) were sufficient to handle 
the allocation of RINs for the cellulosic and non-cellulosic portions 
of the finished fuel.\32\ They noted that these regulations already 
provide a way to assign RINs for a mixture of fuel types with different 
D-codes. After evaluating these comments, EPA has concluded that the 
approach provided by the existing regulations in Sec.  80.1426(f)(3) to 
allocating cellulosic and non-cellulosic RINs is preferable. This 
system is already established, and is designed to accurately apportion 
the finished fuel to account for cellulosic biofuel conversion, 
potentially allowing for a greater proportion of cellulosic RIN 
generation than would be allowed in establishing a series of thresholds 
with fixed percentages of cellulosic RIN generation.
---------------------------------------------------------------------------

    \31\ Comments provided by NRDC (EPA-HQ-OAR-2012-0401-0136).
    \32\ Comments provided by the National Corn Growers Association 
(EPA-HQ-OAR-2012-0401-0071), Novozymes North America, Inc. (EPA-HQ-
OAR-2012-0401-0088), and the Renewable Fuels Association (EPA-HQ-
OAR-2012-0401-0123), the Iowa Corn Growers Association (EPA-HQ-OAR-
2012-0401-0131), and Edeniq (EPA-HQ-OAR-2012-0401-0159).
---------------------------------------------------------------------------

B. Lifecycle Greenhouse Gas Emissions Analysis and Cellulosic 
Determinations for Pathways Using Biogas as a Feedstock

    In the March 2010 RFS final rule, EPA established biogas as an 
advanced fuel type (D code of 5) when derived from landfills, sewage 
waste treatment plants, and manure digesters. Based on questions from 
companies, EPA proposed to: (1) Modify the existing biogas pathway to 
specify that compressed natural gas (CNG) or liquefied natural gas 
(LNG) is the fuel and biogas from landfills, waste treatment plants, 
and waste digesters is the feedstock; (2) allow fuels derived from 
landfill biogas to qualify for cellulosic RINs rather than just 
advanced RINs; (3) add a landfill biogas to renewable electricity 
pathway; and (4) add a Fischer-Tropsch landfill biogas pathway.
    Based on comments and new data received, in this rule we are: (1) 
Finalizing the proposed change to make CNG and LNG the fuel and biogas 
from specified sources the feedstock; (2) expanding the cellulosic 
pathways to include biogas from landfills, municipal wastewater 
treatment facility digesters, agricultural digesters, and separated MSW 
digesters; (3) finalizing the proposed change to add an advanced 
pathway for fuels from waste digester biogas; and (4) expanding the 
renewable

[[Page 42138]]

electricity pathway to include biogas from landfills, wastewater 
treatment facility digesters, agricultural digesters, separated MSW 
digesters, and waste digesters. Due to time constraints, we are not 
finalizing a Fischer-Tropsch landfill biogas pathway at this time. 
However, we expect to address this pathway in a future action.
    Our determinations regarding biogas derived renewable CNG, LNG and 
electricity are discussed more fully in the following sections. This 
section discusses:

 Changes Applicable to the Revised CNG/LNG Pathway from Biogas
 Determination of the Cellulosic Content of Biogenic Waste 
Derived Biogas
[cir] Landfill gas and MSW waste digester biogas as cellulosic
[cir] Municipal wastewater treatment facility digester biogas as 
cellulosic
[cir] Agricultural digester biogas as cellulosic
[cir] Biogas from Waste Digesters
 Consideration of Lifecycle GHG Emissions Associated With 
Biogas Pathways
[cir] Upstream GHG Analysis of Biogas as a Renewable Fuel Feedstock
[cir] Flaring Baseline Justification
[cir] Lifecycle GHG Analysis for Electricity From Biogas
     Alternative Biogas Options and Comments

    The following section, ``Regulatory Amendments Related to Biogas'' 
will discuss additional clarifications and changes to the regulations 
associated with the biogas pathways.
1. Changes Applicable to the Revised CNG/LNG Pathway From Biogas
    Prior to this rulemaking, an approved fuel pathway in Table 1 to 
Sec.  80.1426(f)(1) allowed biogas from landfills, manure digesters or 
sewage treatment plants to qualify as an advanced biofuel. We received 
many requests about what fuel qualifies under this pathway, including 
what renewable fuel types qualify under the term ``biogas,'' and what 
are the eligible sources of biogas. In response, EPA proposed to make 
several changes to the regulations related to biogas.
    EPA is now characterizing biogas as a transportation fuel feedstock 
and is amending the existing biogas pathway in Table 1 to Sec.  80.1426 
by changing the renewable fuel type in the pathway from ``biogas'' to 
``renewable compressed natural gas (renewable CNG) and renewable 
liquefied natural gas (renewable LNG).'' EPA is also changing the 
feedstock type of ``landfills, manure digesters or sewage waste 
treatment plants'' to ``biogas from landfills, municipal wastewater 
treatment facility digesters, agricultural digesters, and separated MSW 
digesters'' for a pathway producing cellulosic biofuels. Finally, EPA 
is adding a new advanced biofuel pathway for fuels produced using 
``biogas from waste digesters'' as the feedstock type.
    In this final rule, we are changing the term ``sewage waste 
treatment plants'' to ``municipal wastewater treatment facility 
digesters'' since ``sewage waste treatment plants'' is not a commonly 
used term and to clarify that the digester is the source of the biogas. 
We are also defining an ``agricultural digester'' as an anaerobic 
digester that processes predominantly cellulosic materials including 
animal manure, crop residues, and/or separated yard waste.
    The existing biogas pathway in Table 1 to Sec.  80.1426 refers to 
``biogas'' as the renewable fuel type and ``landfills, manure digesters 
and sewage waste treatment plants'' as the feedstock. Several companies 
raised questions about whether the term ``biogas'' in this pathway 
could refer to the unprocessed or raw gas from the landfills, manure 
digesters or sewage treatment plants, or processed ``biogas'' that has 
been upgraded and could be used directly for transportation fuel. 
Companies also asked about use of biogas as an ingredient in the 
production of transportation fuel, as an energy source used in the 
production of transportation fuel, and other fuel types that can be 
produced from the raw biogas either through a physical or chemical 
process (such as CNG, LNG, renewable electricity, renewable diesel, 
dimethyl ether or naphtha). These companies further inquired whether 
the various forms of biogas discussed above could qualify under this 
pathway and therefore be eligible for RIN generation under the RFS 
program.
    The term ``biogas'' in this pathway is used broadly in the industry 
to refer to various raw and processed forms of the biogas from various 
sources. However, under the existing requirements in Sec.  
80.1426(f)(10) and (11), only biogas that is used for transportation 
fuel can qualify as renewable fuel for RIN generation under the RFS 
program. EPA recognizes that raw biogas cannot be used directly in the 
transportation sector and must be physically or chemically treated to 
generate a finished transportation fuel eligible for RIN generation. 
Raw biogas can be put through a physical process in which it is 
compressed or liquefied to produce CNG or LNG. Because these fuels can 
be used directly for transportation purposes, it seems appropriate to 
identify these products as ``fuels'' that are produced using biogas.
    We are finalizing revisions to the definition of biogas and adding 
new definitions for renewable CNG, renewable LNG, and agricultural 
digester to Sec.  80.1401. This rulemaking clarifies that biogas means 
a mixture of hydrocarbons that is a gas at 60 degrees Fahrenheit and 1 
atmosphere of pressure that is produced through the anaerobic digestion 
of organic matter. We are also finalizing revisions to clarify 
renewable compressed natural gas (``renewable CNG'') means biogas or 
biogas-derived pipeline quality gas that is compressed for use as 
transportation fuel and that renewable liquefied natural gas 
(``renewable LNG'') means biogas or biogas-derived pipeline quality gas 
that goes through the process of liquefaction in which it is cooled 
below its boiling point. Finally, this rulemaking clarifies that 
agricultural digester means an anaerobic digester that processes 
predominantly cellulosic materials, including animal manure, crop 
residues, and/or separated yard waste.
    These finalized definitions reflect comments we received that 
supported our changes to the ``biogas'' pathway as discussed above, 
namely changing fuel to CNG/LNG and adding a description of the 
applicable biogas feedstocks. The finalized definitions for CNG/LNG 
also reflect comments we received suggesting that we clarify whether 
CNG/LNG that is produced on-site and not sent through a pipeline would 
fall within the pathway. In order to clarify that CNG/LNG produced on-
site and not sent through a pipeline would also qualify, the proposed 
definitions of renewable CNG and LNG were modified to indicate that 
either biogas or pipeline-quality gas can be compressed to make 
renewable CNG and LNG.
2. Determination of the Cellulosic Content of Biogenic Waste-Derived 
Biogas
    In order for fuels produced from biogas as a feedstock to qualify 
for cellulosic RINs (D code of 3 or D code of 7), the renewable fuel 
must be derived predominantly from cellulosic materials and must meet a 
60% GHG emissions reduction threshold, as described in the following 
sections.
    EPA proposed to allow renewable fuel derived from landfill biogas 
to qualify as cellulosic biofuel and solicited comment on whether 
biogas from other sources should also be qualified as cellulosic 
biofuel. Based on new data and comments received during our public 
review process, EPA has determined that biogas generated by

[[Page 42139]]

landfills, municipal wastewater treatment facility digesters, 
agricultural digesters, and separated MSW digesters are predominantly 
cellulosic in origin, and that biogas derived from waste digesters 
processing non-cellulosic renewable biomass therefore qualifies as an 
advanced biofuel feedstock. Data supporting these determinations are 
discussed in more detail in an associated memo to the docket,\33\ and 
the main findings are provided forthwith.
---------------------------------------------------------------------------

    \33\ ``Support for Classification of Biofuel Produced from Waste 
Derived Biogas as Cellulosic Biofuel and Summary of Lifecycle 
Analysis Assumptions and Calculations for Electricity Biofuel 
Produced from Waste Derived Biogas,'' which is available in docket 
EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

a. Landfill Biogas and MSW Digester Biogas as Cellulosic in Origin
    In the June 2013 NPRM, EPA proposed to classify renewable fuels 
produced from landfill biogas as derived from cellulose, hemicellulose 
or lignin, and therefore eligible to generate cellulosic RINs (D code 
of 3 and D code of 7). EPA cited a 1989 study that concluded that not 
only was the average cellulosic content of the organic fraction of 
municipal solid waste (OFMSW) \34\ approximately 90%, but that roughly 
90% of the methane generated in landfills was derived from the 
cellulose and hemicellulose \35\ portions of the OFMSW as the basis for 
this proposal.
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    \34\ The study specifies the ``volatile solids'' of the MSW to 
be 90% cellulosic. Volatile solids refer to organic compounds of 
plant or animal origin that have caloric value and are susceptible 
to bioconversion during anaerobic digestion.
    \35\ Barlaz, M.A., R.K. Ham, and D.M. Schaefer. 1989. Mass-
balance analysis of anaerobically decomposed refuse. Journal of 
Environmental Engineering, 15(6) 1088-1102.
---------------------------------------------------------------------------

    Some commenters argued that MSW landfill gas was not cellulosic 
because a large portion of the waste disposed is food waste which 
contains some non-cellulosic components. We do not believe this affects 
our determination for several reasons. Our cellulosic content 
determination is based on an average mixture of MSW components that 
includes food waste. Since the average cellulosic content of the 
organic fraction of MSW is approximately 90%, EPA believes that organic 
matter in MSW landfills is predominantly cellulosic in origin. 
Furthermore, many of the non-cellulosic components of food waste are 
oxidized in the early stages of waste decomposition during the 
collection, handling and transportation and released as CO2 
instead of CH4. Therefore, a greater proportion of the 
biogas produced from anaerobic digestion (and subsequently used as a 
transportation fuel) comes from the remaining cellulosic components.
    Some commenters stated that only about 27% of MSW landfill gas can 
be considered to be derived from renewable biomass, and thus, any 
transportation fuel derived from the biogas cannot even be considered 
to be eligible for RIN generation. However, EPA determined in the March 
2010 RFS rule that biogas from MSW landfills is derived from renewable 
biomass, namely separated yard and food wastes, and EPA did not propose 
to change that finding. Thus, this comment is not relevant to the 
current rulemaking.
    EPA invited comment and data on the proposed approach to treat 
landfill biogas as being derived from cellulose, hemicellulose and 
lignin. Some commenters argued that landfill biogas should not be 
considered as cellulosic,\36\ others supported considering landfill 
biogas as cellulosic,\37\ and still others requested that EPA expand 
the proposed determination to include biogas derived from additional 
sources processing biogenic wastes as cellulosic.\38\ Commenters that 
opposed considering landfill gas as cellulosic pointed to the EPA 
proposal that relied on a single study to justify this approach. This 
was not, in fact, the case, and EPA had reviewed, discussed and cited 
numerous studies to support this determination.\39\ Moreover, 
subsequent to the June 2013 proposal, EPA updated its literature review 
and found additional peer reviewed studies that support our proposed 
assessment that biogas from landfills is predominantly derived from 
cellulosic components. The studies considered a broad spectrum of 
landfills, including studies comparing differences among landfill 
design, operating practices, regional influence, and typical waste 
loadings throughout the United States over more than two decades. 
Therefore, our determination that the biogas generated in landfills is 
predominantly derived from cellulose and hemicellulose is well 
supported.\40\
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    \36\ See ``Comment submitted by Friends of the Earth, Sierra 
Club, Center for a Competitive Waste Industry'', docket number EPA-
HQ-OAR-2012-0401-0164.
    \37\ See for example, ``Comment submitted by Kerry Kelly, 
Director, Federal Public & Regulatory Affairs, Waste Management 
(WM)'', docket number EPA-HQ-OAR-2012-0401-0112 and ``Comment 
submitted by Stewart T. Leeth, Assistant Vice President, 
Environmental and Corporate Affairs and Senior Counsel, Smithfield 
Foods, Inc.'' docket number EPA-HQ-OAR-2012-0401-0103.
    \38\ See ``Comment submitted by Stewart T. Leeth, Assistant Vice 
President, Environmental and Corporate Affairs and Senior Counsel, 
and Dennis Treacy, Executive Vice President and Chief Sustainability 
Officer, Smithfield Foods, Inc.'', docket number EPA-HQ-OAR-2012-
0401-0111, and ``Comment submitted by Cynthia A. Finley, Director, 
Regulatory Affairs, National Association of Clean Water Agencies 
(NACWA)'', docket number EPA-HQ-OAR-2012-0401-0178.
    \39\ ``Support for Cellulosic Determination for Landfill Biogas 
and Summary of Lifecycle Analysis Assumptions and Calculations for 
Biofuels Produced from Landfill Biogas,'' which has been placed in 
docket EPA-HQ-OAR-2012-0401.
    \40\ Barlaz, M.A., R.K. Ham, and D.M. Schaefer. 1989. Mass-
balance analysis of anaerobically decomposed refuse. Journal of 
Environmental Engineering, 15(6) 1088-1102. Mehta, R., Barlaz, M.A., 
Yazdani, R., Augenstein, D. Bryars, M. and Sinderson, L. 2002, 
``Refuse Decomposition in the Presence and Absence of Leachate 
Recirculation,'' J. Environ. Eng., 128, 3, 228-236 Staley, B. F. and 
M. A. Barlaz, 2009, Composition of Municipal Solid Waste in the U.S. 
and Implications for Carbon Sequestration and Methane Yield,'' J. 
Environ. Eng. 135, 10, 901-909.
    Additional citations were offered in comments from Waste 
Management.
---------------------------------------------------------------------------

    Since separated MSW digesters would use the same biogenic materials 
that are present in landfills, and generate biogas by the same 
anaerobic processes, a logical extension of the reasoning and data 
described above justifies treating the biogas generated by digesters 
processing separated MSW as cellulosic as well. Therefore, we have 
included biogas from separated MSW digesters as a feedstock in 
cellulosic biofuel pathway Q in Table 1 to Sec.  80.1426.
b. Municipal Wastewater Treatment Facility Digester Biogas as 
Cellulosic
    For purposes of this rule, the term ``municipal wastewater 
treatment facility digester'' means an anaerobic digester that 
processes the sludge, undissolved solids, and biosolids derived from 
municipal wastewater whether or not the facility is owned by a 
municipality. While there are substantial data characterizing the 
solids content of municipal wastewater, there are somewhat less data 
characterizing the composition of materials entering the digesters 
specifically. The average adjusted cellulosic content of the 
unprocessed wastewater solids--including primary sludge, activated 
sludge, and biosolids \41\--is greater than 75%.\42\ For the purposes 
of calculating the average adjusted cellulosic content of materials 
entering the wastewater treatment facility digesters, we believe it is 
appropriate to use the subset of peer-

[[Page 42140]]

reviewed data that analyzes the activated sludge and biosolids.
---------------------------------------------------------------------------

    \41\ Activated sludge and biosolids typically refer to 
aerobically treated residuals from the processing of municipal 
wastewater solids.
    \42\ Wang, Xue. 2008. Feasibility of Glucose Recovery from 
Municipal Sewage Sludges as Feedstocks Using Acid Hydrolysis. 
Masters Thesis Queen's University, Ontario, Canada. Champagne, P. & 
Li, C. 2009 ``Enzymatic hydrolysis of cellulosic municipal 
wastewater treatment process residuals as feedstocks for the 
recovery of simple sugars. Bioresource Technology. Vol 100 pp 5700--
5706. See memo to the docket: ``Support for Classification of 
Biofuel Produced from Waste Derived Biogas as Cellulosic Biofuel and 
Summary of Lifecycle Analysis Assumptions and Calculations for 
Biofuels Produced from Waste Derived Biogas,'' available in docket 
EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

    The material that enters the digester typically includes the 
undissolved solids that are recovered from the primary clarification 
tank and the solids that are allowed to settle out in a secondary 
clarification tank following aerobic treatment. Therefore, the data for 
activated sludge and biosolids resembles the material that actually 
enters the digesters at wastewater treatment facilities. In addition, 
the data related to activated sludge and biosolids is more consistent 
and comparable, and therefore provides a more robust estimate of the 
cellulosic content. The average adjusted cellulosic content was 
obtained by dividing the reported cellulosic fraction by the 
convertible organic fraction (minus the percent organic nitrogen, which 
does not convert to methane). Based on these data, the activated sludge 
and biosolids are on average composed of 22% cellulose, 36% 
hemicellulose, and 21% lignin.\43\ Therefore, we estimate that the 
material used to generate the biogas through anaerobic digestion from 
wastewater treatment facilities is, on average, greater than 75% 
cellulosic. These data and analyses are described in more detail in a 
memo to the docket.\44\
---------------------------------------------------------------------------

    \43\ Wang, Xue. 2008. Feasibility of Glucose Recovery from 
Municipal Sewage Sludges as Feedstocks Using Acid Hydrolysis. 
Masters Thesis Queen's University, Ontario, Canada. Sun & Cheng. 
2002. ``Hydrolysis of lignocellulosic materials for ethanol 
production: a review. Bioresource Technology. Vol 83 pp 1-11.
    \44\ Data available for pre-digested biosolids and methods for 
estimating the aggregate adjusted cellulosic content is presented in 
the memo to the docket: ``Support for Classification of Biofuel 
Produced from Waste Derived Biogas as Cellulosic Biofuel and Summary 
of Lifecycle Analysis Assumptions and Calculations for Biofuels 
Produced from Waste Derived Biogas,'' available in docket EPA-HQ-
OAR-2012-0401.
---------------------------------------------------------------------------

c. Agricultural Digester Gas as Cellulosic
    In this rule we are defining ``agricultural digesters'' to be 
``anaerobic digesters that process predominantly cellulosic materials, 
including animal manure, crop residues, and/or separated yard waste,'' 
and have identified biogas from such digesters as a feedstock for the 
production of cellulosic biofuel. Based on EPA's AgSTAR data, we have 
estimated that animal manure, crop residues and yard wastes represent 
over 90% of the materials being processed in agricultural digesters. As 
discussed in section IV.A, EPA has determined that crop residues and 
yard wastes are predominantly cellulosic. As to animal manure, we 
received in response to our proposal data indicating that animal manure 
is predominantly cellulosic.\45\ Based on these data, animal manure is 
on average composed of 25% cellulose, 21% hemicellulose, and 17% 
lignin. When divided by the organic fraction (minus the percent organic 
nitrogen, which does not convert to methane), we estimate that the 
material used to generate the biogas through anaerobic digestion from 
agricultural digesters is, on average, greater than 75% cellulosic.\46\ 
Therefore, in this rule we are including biogas from agricultural 
digesters in the cellulosic biofuel pathway in row Q of Table 1 to 
Sec.  80.1426. Note that digesters that primarily process food wastes 
that cannot be demonstrated to be cellulosic in origin would fall in 
the general waste digester category discussed in the following section, 
and could be eligible to produce advanced biofuel instead of cellulosic 
biofuel.
---------------------------------------------------------------------------

    \45\ Chen, S., et. al., 2003, Value Added Chemicals from Animal 
Manure. Pacific Northwest Laboratory, PNNL--14495. December 2003.
    \46\ See memo to the docket: ``Support for Classification of 
Biofuel Produced from Waste Derived Biogas as Cellulosic Biofuel and 
Summary of Lifecycle Analysis Assumptions and Calculations for 
Biofuels Produced from Waste Derived Biogas,'' available in docket 
EPA-HQ-OAR-2012-0401.
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d. Biogas From Waste Digesters
    The current regulations identify biogas from manure digesters as an 
advanced biofuel. As described above, we have determined that animal 
manure is predominantly cellulosic, and therefore have determined that 
fuel made from biogas derived from agricultural digesters processing 
predominantly cellulosic feedstocks (such as animal manure, crop 
residues, and yard wastes) qualifies for cellulosic biofuel RINs. 
However, additional types of renewable biomass may be processed in 
anaerobic waste digesters. For example, non-manure animal wastes and 
separated food wastes containing predominantly starches and sugars may 
be processed in waste digesters that produce biogas. Based on our 
analyses of biogas from other sources of anaerobic decomposition, 
described in section IV.B.3, below, we are confident that fuel made 
from biogas from waste digesters will satisfy the 50% greenhouse gas 
reduction threshold for advanced biofuels. Therefore, we are including 
in Row T of Table 1 to Sec.  80.1426, an advanced biofuel pathway for 
fuel made from biogas derived from waste digesters.
3. Consideration of Lifecycle GHG Emissions Associated With Biogas 
Pathways
    Biogas, consisting primarily of methane and carbon dioxide (with 
trace amounts of other gases), is produced during the microbial 
mediated decomposition of organic wastes. In anaerobic environments 
with available organic material such as landfills, organic conversion 
to biogas proceeds slowly over decades producing large amounts of 
methane. While methane is a potent greenhouse gas, it is also a 
combustible gas and valuable feedstock for the production of other 
fuels. Biogas collection systems are currently used at landfills to 
recover and destroy methane by flaring or to recover methane for energy 
generation or fuel production. Further, the natural anaerobic 
decomposition of organic wastes occurring in landfills can be exploited 
and optimized in controlled systems (such as waste digesters) to 
convert organic wastes to biogas for energy generation or fuel 
production. In this section we will discuss our GHG analysis of fuels 
made from waste derived biogas.
a. Upstream GHG Analysis of Biogas as a Renewable Fuel or Fuel 
Feedstock
    The March 2010 RFS final rule concluded that municipal solid waste 
has no agricultural or land use change GHG emissions associated with 
its production. In the NPRM, we proposed to add a new pathway to Table 
1 to Sec.  80.1426 that used biogas from landfills to produce renewable 
electricity, CNG or LNG as transportation fuels. In the NPRM, we 
proposed that no new renewable feedstock production modeling was 
required, and that no GHG emissions would be attributed to feedstock 
production, which was consistent with the analysis we had done for the 
landfill biogas pathway included in the March 2010 RFS final rule. In 
addition, as described in more detail below, EPA believes that the GHG 
emissions assumptions for biogas generated at MSW landfills applies to 
biogas from municipal wastewater treatment facility digesters, 
agricultural digesters, separated MSW digesters, and waste digesters.
    We received several comments supporting this approach for 
landfills, and it is consistent with other Agency analysis conducted 
for the annual Inventory of US GHG Emissions and Sinks, which assumes 
that MSW poses no land use or carbon stock changes.\47\

[[Page 42141]]

However, we also received comment opposing this approach on the grounds 
that it would incentivize landfilling over other more GHG-beneficial 
waste disposal methods.
---------------------------------------------------------------------------

    \47\ ``Solid Waste Management and Greenhouse Gases: A Life-Cycle 
Assessment of Emissions and Sinks''. Prepared by ICF for the U.S. 
Environmental Protection Agency (EPA) Office of Solid Waste, EPA530-
R-06-004, September 2006.
---------------------------------------------------------------------------

    Commenters did not provide new data or analysis that supported the 
assertion that allowing biogas-derived fuels from landfills to generate 
cellulosic rather than advanced RINs or adding new biogas-to-biofuel 
pathways would significantly reduce recycling and reuse rates. If waste 
management methods were impacted by use of biogas for transportation 
fuel, there could be indirect GHG emissions impacts. However, waste 
management policies are typically controlled by state and local 
governments, and there are many unique factors that influence these 
decisions. We have not seen any evidence or data to suggest that the 
RFS in general has had or will have a substantial impact on existing 
waste disposal practices across the U.S., and therefore we believe that 
there will not be significant GHG impacts associated with the biogas-
based pathways adopted in this rule. In fact, MSW landfilling rates 
over the past 50 years have continuously decreased even as both 
recycling rates and biogas collection have increased significantly. 
Over the past 10 years as both the per capita and overall MSW 
generation rates have decreased slightly, the percentage of total trash 
diverted for recycling has increased.\48\ Moreover, energy from waste 
technologies, such as fuels derived from landfill biogas, can be viewed 
as a form of waste reuse itself. Incentivizing the use of biogas for 
fuel production establishes biogas recovery as an operating parameter 
to be actively optimized--promoting technology that reduces fugitive 
emissions from landfills.
---------------------------------------------------------------------------

    \48\ ``Municipal Solid Waste (MSW) in the United States: Fact 
and Figures''. EPA's Annual Waste Trends Report. 2012 Facts and 
Figures Facts Sheet; http://www.epa.gov/osw/nonhaz/municipal/pubs/2012_msw_fs.pdf.
---------------------------------------------------------------------------

    Other commenters argued that we should begin our lifecycle GHG 
analysis at the point of waste generation, in which case our comparison 
would be to an alternative disposal method like recycling of waste 
paper, composting, or anaerobic digestion. This approach is not being 
employed because, as mentioned previously, we do not believe that the 
biogas pathways adopted today will have a substantial impact on 
existing waste disposal methods, and therefore no significant GHG 
impacts from waste disposal changes are anticipated as a result of this 
rule.
    EPA does not believe that allowing landfill biogas to generate 
cellulosic rather than advanced RINs will incentivize landfilling, and 
we are therefore not changing our assumptions regarding the upstream 
analysis of feedstocks as part of this final rule. However, we will 
reevaluate our lifecycle GHG baseline assumptions in subsequent 
rulemakings if new evidence and supporting data suggest that changes in 
the waste management system are occurring as a result of these 
policies.
b. Flaring Baseline Justification
    Landfills currently treat their landfill gas, which is comprised of 
approximately 50% methane, in one of several ways. Municipal solid 
waste (MSW) landfills are required by EPA regulations to capture and 
control their biogas if they are designed to collect at least 2.5 
million megagrams (Mg) and 2.5 million cubic meters of waste and 
emitting at least 50 Mg of non-methane organic compounds per year.\49\ 
These large, regulated landfills represent a small percentage of all 
landfills by number but are responsible for the majority of biogas 
emissions from landfills. To comply with regulations, these landfills 
must at a minimum combust their biogas in a flare, converting the 
methane to carbon dioxide, a less potent GHG. They may also use it for 
other purposes, including to generate electricity, in which case the 
electricity produced may displace electricity from other, higher GHG-
emitting sources (such as gas-fired power plants) once it enters the 
grid.\50\ Many smaller, unregulated landfills do not collect their 
biogas, and this methane is ``vented'' to the atmosphere. Larger 
regulated landfills do collect the biogas and are assumed to have an 
average biogas collection efficiency of 75%.\51\ In 2012, 14,089 Gg of 
methane was generated at all landfills (regulated and unregulated), of 
which 4,608 Gg (33%) was collected and combusted in gas-to-energy 
projects, 4,040 Gg (29%) was collected and flared, and the rest was 
either uncollected or collected and vented.\52\
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    \49\ Standards of Performance for New Stationary Sources and 
Guidelines for Control of Existing Sources: Municipal Solid Waste 
Landfills, 61 FR 9905, Federal Register Volume 61, Issue 49 (March 
12, 1996).
    \50\ Some facilities also use the biogas directly in boilers and 
other applications or purify the biogas to create CNG or LNG or 
inject it directly into natural gas pipelines.
    \51\ Environmental Protection Agency. 2012. Inventory of U.S. 
Greenhouse Gas Emissions and Sinks: 1990-2010, Annex 3: 
Methodological Descriptions for Additional Source or Sink 
Categories. http://epa.gov/climatechange/emissions/usinventoryreport.html. As of December 2012, landfills produced 1913 
MW of electricity based on figures from LMOP. This electricity would 
be almost entirely sold for use on the grid. From http://www.epa.gov/lmop/projects-candidates/index.html. Environmental 
Protection Agency, Landfill Methane Outreach Program. 2010. LFG 
Energy Project Development Handbook: Chapter 2. Landfill Gas 
Modeling. http://epa.gov/lmop/publications-tools/handbook.html.
    \52\ National Greenhouse Gas Emissions Data. 2011. Chapter 8: 
Waste. http://epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2013-Chapter-8-Waste.pdf.
---------------------------------------------------------------------------

    For the landfill gas-to-electricity pathway, we proposed to use 
landfills that flare their biogas as providing the baseline GHG 
emissions for use in comparison to scenarios involving production of 
electricity from the landfill biogas. We chose this baseline because 
these landfills are the ones most likely to convert to gas-to-energy 
projects, since they already have gas collection systems in place and 
are relatively larger landfills producing higher quantities of biogas. 
Small unregulated landfills might be unable to generate enough biogas 
to justify the expense of collecting it for conversion to renewable 
fuels. However, if such small landfills were to capture and use their 
biogas in transportation fuels, there would be a significantly greater 
reduction in GHG emissions than would be occasioned by the shift from a 
flaring landfill to a gas-to-energy project, since a flaring system 
represents a significant improvement in GHG emissions over a landfill 
that simply vents its methane. Therefore, if the shift from a flaring 
landfill to a gas-to-energy project results in a 50% reduction in GHG 
emissions, the shift of a venting landfill to a gas-to-energy project 
would result in GHG reductions substantially larger than 50%. Since 
landfills that currently have gas-to-energy projects in place at one 
point either replaced flaring with a gas-to-energy project or installed 
a gas-to-energy project as an alternative to the minimal compliance 
route of flaring, we proposed to treat the emissions from these 
landfills compared to the same flaring baseline. We show lifecycle 
results calculated using alternative baselines and discuss our choice 
of baseline in more depth in a memo to the docket.\53\ We received 
comments in support of our flaring baseline approach. We did not 
receive any comments that justified revising this baseline for the 
pathway in Table 1,

[[Page 42142]]

therefore EPA is finalizing flaring as our baseline as proposed. We 
received comment on the use of alternative baselines for specific 
projects that we discuss below.
---------------------------------------------------------------------------

    \53\ ``Support for Classification of Biofuel Produced from Waste 
Derived Biogas as Cellulosic Biofuel and Summary of Lifecycle 
Analysis Assumptions and Calculations for Electricity Biofuel 
Produced from Waste Derived Biogas.'' Available in docket EPA-HQ-
OAR-2012-0401.
---------------------------------------------------------------------------

    Other commenters addressed the case of a landfill that is already 
generating renewable electricity from landfill gas. The commenters 
stated that with the increasing availability of plug-in hybrid electric 
vehicles (PHEVs) and electric vehicles (EVs), it is likely that at 
least some of the electricity that is currently being generated by 
these landfills is going to charge these vehicles. The commenter argued 
that if the landfill now signs contracts with these users, there will 
be no change in GHG emissions, and fuel from this landfill biogas will 
not achieve a 60% GHG reduction as required for cellulosic biofuels. 
Although EPA considered the possibility of differentiating between 
existing and new biogas projects,\54\ we believe that such an approach 
would inappropriately punish ``early actors'' that have previously made 
the decision to install gas-to-energy equipment, either to replace 
flaring or as an alternative to installing flares. The fact that these 
facilities made the upgrade to gas-to-energy production prior to the 
availability of an RFS incentive to do so should not disqualify them. 
These facilities are already leading performers, and their fuel should 
be credited with the GHG reductions occasioned by the move away from 
the flaring alternative even if that move happened in the past. This 
approach is consistent with how we have treated the early 
implementation of advanced technologies for all biofuels producers in 
the past.
---------------------------------------------------------------------------

    \54\ ``Support for Classification of Biofuel Produced from Waste 
Derived Biogas as Cellulosic Biofuel and Summary of Lifecycle 
Analysis Assumptions and Calculations for Electricity Biofuel 
Produced from Waste Derived Biogas,'' which is available in docket 
EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

    We also believe that it is appropriate to use a flaring baseline 
when considering emissions related to biogas production from municipal 
wastewater treatment facility digesters, agricultural digesters, 
separated MSW digesters, and waste digesters. Similar to landfills, 
biogas from these sources could be vented, flared or used for 
beneficial purposes. According to the American Biogas Council Web site, 
of the 1,500 municipal wastewater treatment facility digesters that 
produce biogas, about 250 use the biogas; for the other 1,250, the 
biogas is flared. For agricultural digesters the alternative to 
beneficial use of the biogas is typically that the methane would have 
been emitted. We believe a similar situation exists with respect to 
separated MSW, and therefore we use that same flaring baseline for both 
of these systems. In fact for most waste digesters, the alternative is 
that the waste would have gone to a landfill resulting in the same 
baseline. Furthermore, wastewater treatment facilities that don't use 
digester biogas for process energy, fuel production, or electrical 
generation typically flare the unused biogas. Assuming that the biogas 
is flared generally provides a conservative baseline. If sources that 
are using flaring will achieve a 60% GHG reduction when converting to 
electricity production, sources that are venting their methane will 
certainly do so as well.
c. Lifecycle GHG Analysis for Electricity From Biogas
    The previous section discussed the baseline EPA has selected for 
use in comparison to the biogas pathways under consideration.\55\ This 
section discusses the lifecycle GHG emissions analyses of the pathways 
adopted today, which are then compared to the baseline to determine if 
the requisite GHG reductions are achieved.
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    \55\ The discussion here is limited to the new biogas to 
electricity pathway adopted today. Lifecycle greenhouse gas emission 
reductions required for the new cellulosic CNG and LNG pathways are 
60% as compared to a 2005 fossil fuel baseline (50% reductions were 
previously required for CNG and LNG for the advanced pathway). The 
CNG and LNG lifecycle assessment for the 60% reduction requirement 
is discussed in the memo placed in the docket: ``Support for 
Classification of Biofuel Produced from Waste Derived Biogas as 
Cellulosic Biofuel and Summary of Lifecycle Analysis Assumptions and 
Calculations for Biofuels Produced from Waste Derived Biogas,'' 
available in docket EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

    As part of the proposed rule, EPA prepared a proposed assessment of 
the lifecycle GHG emissions of renewable electricity produced from 
landfill biogas. In doing so, we examined two main factors. The first 
involved determining by how much emissions at a landfill employing 
flaring would change upon installation of a gas-to-energy project. For 
this calculation, we used emission factors from the GREET model.\56\ 
The second involved calculation of the decrease in GHG emissions caused 
by powering the gas blowers already in use with biogas-derived 
electricity produced on-site rather than grid electricity upon 
installation of a gas-to-energy project at the landfill. This 
calculation used data from the EPA Landfill Methane Outreach Project 
(LMOP).\57\ For this analysis, we calculated how much electricity could 
be generated and how much could be delivered off-site to the consumer 
including consideration of on-site parasitic losses and on-site use. We 
used values from LMOP to provide estimates of the relative shares of 
different types of engines or turbines, the electricity generation 
efficiency, parasitic losses, energy use in collecting and preparing 
the biogas, and a value from the U.S. Energy Information Agency to 
estimate distribution losses. Values used are discussed in more detail 
in a memo to the docket.\58\
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    \56\ Argonne National Laboratory (2011) Greenhouse Gases, 
Regulated Emissions, and Energy Use in Transportation Model (GREET), 
Version 1 2011, http://greet.es.anl.gov/.
    \57\ EPA LMOP Data.
    \58\ ``Support for Classification of Biofuel Produced from Waste 
Derived Biogas as Cellulosic Biofuel and Summary of Lifecycle 
Analysis Assumptions and Calculations for Electricity Biofuel 
Produced from Waste Derived Biogas.'' Available in docket EPA-HQ-
OAR-2012-0401.
---------------------------------------------------------------------------

    We calculated GHG emissions in two ways, per mmBtu electricity and 
per mmBtu fuel equivalent which accounted for the drivetrain efficiency 
of electric vehicles. In both cases we found that renewable electricity 
produced from landfill gas meets the 60% GHG emission reduction 
threshold required by the CAA, and thus qualifies as a cellulosic 
biofuel. Compared with the gasoline that it would replace, these 
projects would be accompanied by an 87% reduction in GHG emissions when 
normalized per mmBtu electricity. Accounting for the improved 
efficiency of EV drivetrains increases the GHG emissions reductions to 
96%.
    We did not receive any comment on our lifecycle calculations and 
are therefore finalizing our determination that renewable electricity 
produced onsite from landfill gas meets the 60% reduction in GHG 
emissions required by the CAA. This determination also applies to a 
pathway where the electricity is generated off-site. The main 
differences are removal of the credit associated with using biogas 
electricity in on-site blowers, and adding emissions associated with 
scrubbing the gas to pipeline quality, shipping it via pipeline, and 
removing it from the pipeline to make electricity. Removing the credit 
associated with use of biogas-derived electricity for onsite blowers 
still results in a 75% reduction in GHG emissions when normalized per 
mmBtu electricity, and the emissions associated with other aspects of a 
pathway involving off-site electricity generation (e.g., scrubbing the 
gas to pipeline quality, shipping it via pipeline, removing it to make 
electricity) are not expected to change the result significantly.
    We believe that GHG emissions related to electricity produced with 
biogas from municipal wastewater treatment facility digesters, 
agricultural

[[Page 42143]]

digesters, separated MSW digesters, and waste digesters would be 
similar to those for landfill biogas production. The analysis for 
landfill biogas to electricity considered two main components: An 
increase in emissions due to converting from flaring to electricity 
generation and a credit associated with reduced grid electricity 
purchased to run blowers. The change in emissions due to converting 
from flaring to electricity generation that we assumed for landfill 
biogas can be considered the same for other sources of biogas. In all 
cases the emissions are based on the properties of the biogas itself, 
and its combustion products, which are independent of the biogas 
source. For other biogas sources there may be less need for purchased 
grid electricity to run blowers since other biogas sources are 
generally less distributed than gas collection at landfills. However, 
even if the credit associated with the reduction in purchased grid 
electricity for blowers is not considered for municipal wastewater 
treatment facility digesters, agricultural digesters, separated MSW 
digesters and waste digesters, compared with the gasoline baseline GHG 
emissions of 98 kg CO2-eq/mmBtu, these projects would still 
be accompanied by a 75% reduction in GHG emissions when normalized per 
mmBtu electricity. The calculated reduction would be even greater if we 
accounted for the improved efficiency of EV drivetrains. Therefore, we 
have determined that pathways involving electricity production from 
biogas derived from these other sources also meet the 60% lifecycle GHG 
reduction threshold and can be qualified as cellulosic biofuel 
(assuming all other definitional and regulatory requirements are 
satisfied). It is important to note that RINs may only be generated for 
electricity from biogas that can be tracked to use in the 
transportation sector, such as by an electric vehicle.
4. Alternative Biogas Options and Comments
a. Alternative Baseline Approaches
    We received comments in support of our flaring baseline approach. 
However, we also received several comments arguing for alternative 
approaches. Several commenters wanted EPA to allow parties to use a 
non-flaring baseline where it can be shown that the landfill providing 
biogas is not required to have a flare or other methane controls. For 
the basis of our biogas pathways in Table 1, EPA is not changing the 
baseline comparison of flaring for the reasons stated above, that on 
average it is the baseline landfill condition that would be replaced. 
In addition, EPA had determined that the biogas to energy pathways 
evaluated are all calculated to achieve at least a 60% reduction in GHG 
emissions required by the CAA when a change from landfill flaring is 
assumed. Assuming venting instead of flaring as a baseline landfill 
condition would improve the calculated benefits of the projects, but 
would not change the applicable RFS GHG threshold determination. 
Accordingly, there is no purpose served by these comments for purposes 
of today's rule.
b. Additional Comments on Lifecycle Analysis for Renewable Electricity
    In addition to the comments discussed above, we also received 
comment suggesting that we include electricity from biomass sources 
such as woody biomass as a pathway in Table 1 to Sec.  80.1426. 
However, evaluation of the lifecycle GHG emissions associated with 
generating electricity from woody biomass or other biomass sources 
would involve substantially different considerations from our analysis 
of electricity production from biogas sources, and is beyond the scope 
of this rule. Therefore EPA is not finalizing an electricity pathway 
from other types of biomass at this time. We also received comments on 
adding pathways for biogas to transportation fuels other than CNG/LNG 
and electricity. These other fuel types included dimethyl ether (DME) 
and hydrogen (H). However, assessing emissions associated with these 
production processes is also beyond the scope of this rule.
    We received comment seeking clarification of whether electricity 
from landfill biogas or other approved biogas sources that was used in 
trains would qualify for RIN generation. EPA has determined that 
electricity used in trains is not a ``transportation fuel'' as defined 
in the Clean Air Act. Electricity from RFS-approved biogas sources that 
is used in trains does not ``replace or reduce the use of fossil fuel 
present in transportation fuel'', and therefore does not meet the 
statutory definition of a ``renewable fuel'' eligible for RIN 
generation in the RFS program.
    Commenters also asked whether electricity from landfill biogas or 
other approved biogas sources that was used to compress natural gas 
would be eligible for RIN generation, if the natural gas was used for 
transportation purposes. EPA has determined that electricity used to 
compress natural gas does not qualify for RIN generation, since the 
electricity will not reduce the amount of fossil fuel present in the 
natural gas, which is the transportation fuel in this situation.

C. Regulatory Amendments Related to Biogas

    Prior to this rulemaking, an approved fuel pathway in Table 1 to 
Sec.  80.1426 allowed biogas from landfills, manure digesters or sewage 
waste treatment plants to qualify as an advanced biofuel. We have 
received questions related to some of the details of this pathway that 
are also relevant to the biogas-related pathways approved today. The 
questions include the following: (1) What company along the production 
chain of biogas from generation to end user is considered the producer 
that qualifies to register under this pathway and generate RINs, and 
(2) what are the contract requirements to track the biogas from 
generation to end use.
    We proposed revising and adding new documentation, registration, 
reporting and recordkeeping requirements at locations along the 
production chain from biogas generation to finished transportation fuel 
use. We also proposed to specify which company along the production 
chain is considered the ``producer'' and eligible to generate RINs 
under the RFS program. In the following sections, we will detail the 
changes being finalized.
1. Changes Applicable to Renewable Electricity From Biogas Sources
    In the NPRM, EPA requested comment on a number of potential changes 
intended to clarify the process for generating RINs for renewable 
electricity. We received a number of comments on these proposed 
changes, but have decided that in general the existing regulations are 
sufficient for present purposes and only minor clarifications are 
warranted at this time. To the extent that these modifications do not 
resolve all questions, EPA's intent is to address them through a 
combination of guidance documents and future rulemaking.
a. Registration and RIN Generation Requirements
    Section 80.1426 paragraphs (f)(10) and (11) describe the 
requirements for generating RINs for renewable electricity and biogas 
which are either introduced into a dedicated renewable distribution 
system (Sec.  80.1426(f)(10)) or introduced into a commercial 
distribution system (Sec.  80.1426(f)(11)). EPA requested comment on 
the provisions and suggestions for alternative requirements. Several 
commenters provided background information related to actual renewable 
electricity generation and transportation use to aid in the development 
of more detailed provisions. This information

[[Page 42144]]

included specific detail on how individual companies are currently 
using biogas to generate electricity for transportation purposes, and 
what these companies are doing to comply with state regulatory 
programs. These comments illustrated a number of significant challenges 
faced by parties wishing to generate biogas electricity RINs under the 
RFS program.
    Most commenters agreed that the electricity distribution system is 
complex, and that detailed and clear regulatory requirements specific 
to renewable electricity are needed. EPA agrees that the electricity 
generation system is complex, and EPA intends to take more time to 
evaluate the options and their implications. We believe that the 
regulatory changes made in this final rulemaking to Sec.  80.1426 
paragraphs (f)(10) and (f)(11) should help address some of those 
challenges. EPA and stakeholders will benefit from additional 
experience in implementing the current provisions before adopting 
significant modifications.
b. Distribution and Tracking Requirements
    Tracking and verifying the production and use of the renewable 
electricity are of particular concern. Each state regulates electricity 
individually and so there is a wide variety of systems and requirements 
that must be accounted for in establishing a robust system for 
electricity accounting. In addition, several states have renewable 
portfolio standards and ``renewable electricity \59\ credit'' (REC) 
programs. Further, most states do not allow private electricity 
generators to sell electricity directly to consumers. Therefore we 
cannot rely solely on written contracts for tracking of renewable 
electricity to transportation use. An alternative tracking and 
verification system must be established. The alternative adopted in 
this final rule is described in the next section.
---------------------------------------------------------------------------

    \59\ When referring to various state ``renewable electricity'' 
programs in this preamble, we are using that term as defined in the 
state programs, and do not intend to suggest that the electricity in 
question necessarily satisfies the RFS regulatory definition of 
``renewable electricity.''
---------------------------------------------------------------------------

    It was suggested by commenters that EPA leverage existing state 
renewable electricity portfolio programs to track and validate RINs 
generated for RFS-qualified renewable electricity. These programs rely 
on defined environmental attributes which can be owned and transferred 
independently of the actual electricity. Ownership of these 
environmental attributes allows regulated parties to demonstrate 
compliance with the renewable electricity portfolio programs. Given the 
variety of renewable electricity programs managed by a multitude of 
states, this does not seem workable for the RFS program. In addition, 
EPA does not intend for the RFS to interfere with existing state 
programs. Therefore we have made the decision to match generation to 
use, and not require the purchase or definition of related 
environmental attributes. This does not preclude RIN generators from 
participating in state renewable electricity programs or from using 
that information to support their RFS registration and reporting 
documentation.
2. Regulatory Changes Applicable to All Biogas Related Pathways
    As discussed above, we have had many inquiries related to the 
``biogas'' pathway, specifically regarding contract requirements for 
tracking the biogas through the distribution system to end use, and 
regarding what company along the production chain is considered the 
``producer'' and eligible to generate RINs under the RFS program. In 
this rulemaking, we have revised the documentation requirements 
slightly, to better track the biogas as it moves into and out of the 
distribution system and to document the final use as a transportation 
fuel. Provisions related to registration, reporting and recordkeeping 
were revised as well. These provisions allow for the use of signed 
affidavits, when written contracts are not available, to prove the use 
or sale of renewable electricity and renewable CNG/LNG for 
transportation purposes. It is assumed that these affidavits would be 
signed by fleet managers or vehicle operators, verifying the use of the 
renewable transportation fuel. These affidavits would then be matched, 
by the registered fuel producer, to the delivery or sale of an 
equivalent amount of qualifying renewable electricity or renewable CNG/
LNG. While it is impossible to track the specific molecules or 
electrons, it must be theoretically feasible that the fuel produced can 
reach the vehicle using it. Examples of connected grid systems include, 
but are not limited to, commercial natural gas distribution systems, 
dedicated private fuel distribution systems, or transmission grids as 
defined by the North American Electrical Reliability Corporation (NERC) 
regions. These amended requirements are applicable to all pathways 
related to biogas.
    We proposed that the ``producer'' of renewable CNG/LNG be the 
company that compresses or liquefies the gas and distributes the CNG/
LNG for transportation fuel, and for renewable electricity, we proposed 
that the ``producer'' would be the company that distributes the 
electricity for use as transportation fuel. Numerous commenters 
indicated that limiting RIN generation to the CNG/LNG or electricity 
distributor would revoke current RIN generation ability from those who 
have invested significant resources in developing biogas projects. Some 
commenters also stated that the company first injecting the pipeline 
quality biogas into the grid would be intimately familiar with the 
responsibilities in tracking distribution, and should be eligible to 
act as the RIN generator. Given the complexities of the situation 
involving the production, transportation and use of biogas-derived 
fuels, we are not finalizing the definition of ``producer'' for 
renewable CNG/LNG and renewable electricity. EPA believes a more 
appropriate approach at this time is to examine registrations on a case 
by case basis in the short term, and to learn from this experience 
prior to issuing any final rule addressing the subject.
    The processing and distribution train from raw biogas to final 
transportation fuel use can be complex, and may include many companies 
and processing steps from the point when the raw biogas is withdrawn 
from its source (such as landfills, waste digesters, wastewater 
treatment plants), to where it is processed, converted into biofuel and 
distributed to consumers. In some cases the fuel may be cleaned at a 
biogas scrubbing facility to pipeline quality specifications for 
distribution, and then withdrawn from the commercial pipeline to be 
processed further at another production facility into renewable CNG/LNG 
or renewable electricity. The company registering to generate RINs is 
responsible for providing all the required information and supporting 
documentation in their registration, and for satisfying reporting and 
recordkeeping requirements to track and verify the movement of gas from 
point of extraction of the raw biogas from its original source, through 
all the processing steps and distribution steps in between, to the last 
step where the actual fuel is used for transportation purposes. In the 
engineering review report required for registration, the producer must 
include documentation that the professional engineer performed site 
visits at each biogas production facility covered by the producer's 
registration that is located prior to the point of injection into a 
common carrier pipeline, or in the case of on-site distribution, prior 
to the point of

[[Page 42145]]

distribution for transportation usage. The third-party engineer must 
also review and verify all related supporting documents such as design 
documents, calculations, regulatory permits, contracts and affidavits 
between facilities that track the raw biogas from the point of 
withdrawal from its source, the various injection/withdraw points into 
the distribution pipeline, the various production facilities, and the 
final step for use as transportation fuel. For purposes of biogas-
related pathways, EPA does not interpret its regulations as specifying 
where the producer must lie on the value chain. EPA will evaluate the 
situation on a case by case basis through the registration process; any 
company that is registered to generate RINs must be in a position to 
oversee the entire process and provide all necessary documentation. 
These requirements will help ensure that the company registering to 
generate RINs will only generate RINs for fuel that is fully compliant 
with all regulatory requirements.
    The registration, reporting and recordkeeping requirements are in 
Sec. Sec.  80.1426(f), 80.1450, and 80.1454 in this rulemaking. The 
structure of Sec.  80.1426(f) paragraphs (10) and (11) was changed to 
more clearly address RIN generation requirements for electricity and 
CNG/LNG derived from biogas. Paragraph (10) lists requirements for 
fuels that are not introduced into a commercial distribution system; 
subparagraph (i) addresses electricity requirements and subparagraph 
(ii) addresses CNG/LNG requirements. Subparagraph (iii) is an 
additional requirement for producers co-firing a combination of fuels 
to generate electricity. Similarly, paragraph (11) lists requirements 
for fuels that are introduced into a commercial distribution system, 
with the same organization as paragraph (10).
    Comments to the NPRM raised the concern that contracts are not 
always feasible between the parties producing and using the fuel. In 
some cases, smart metering is available to provide very detailed 
documentation of fuel distribution and use. Therefore EPA has added 
signed affidavits and an option for other EPA-approved documentation to 
demonstrate the transfer of qualifying fuel used for transportation. 
EPA will provide guidance on other documentation that may be considered 
acceptable. The changes regarding the documentation requirements for 
distribution and use of the biogas, electricity, and CNG/LNG is located 
in Sec.  80.1426 and Sec.  80.1454.

D. Clarification of the Definition of ``Crop Residue'' and 
Clarification of Feedstocks That EPA Considers Crop Residues

1. Clarification of the Definition of ``Crop Residue''
    In today's FRM, EPA is amending ``crop residue'' in the RFS 
regulations to more clearly describe the characteristics of products 
that should fall within the definition.\60\ The final amendments are 
identical to those proposed. EPA proposed in the NPRM to include this 
amendment to provide more detailed guidance regarding the types of 
feedstocks that EPA considers crop residues. In our preexisting 
regulations, ``crop residue'' ``is the biomass left over from the 
harvesting or processing of planted crops from existing agricultural 
land and any biomass removed from existing agricultural land that 
facilitates crop management (including biomass removed from such lands 
in relation to invasive species control or fire management), whether or 
not the biomass includes any portion of a crop or crop plant.'' \61\
---------------------------------------------------------------------------

    \60\ See Sec.  80.1401.
    \61\ Ibid.
---------------------------------------------------------------------------

    In the NPRM, we proposed to amend the definition to specify that 
biomass is considered crop residue only if the use of that biomass for 
the production of renewable fuel has no significant impact on demand 
for the feedstock crop, products produced from that feedstock crop, and 
all substitutes for the crop and its products including the residue, 
nor any other impact that would result in a significant increase in 
direct or indirect GHG emissions. We also noted that crop residue must 
come from crop production or processing for some other primary purpose 
(e.g., refined sugar, corn starch ethanol) or be removed to facilitate 
crop management, such that the crop residue is not the reason the crop 
was planted. The residue must also come from existing agricultural 
land, the exact definition of which is laid out in our current 
regulations that define ``renewable biomass.'' \62\ We stated further 
that the residue should generally not have a significant market in its 
own right, to the extent that removing it from that market to produce 
biofuels instead will result in increased GHG emissions.
---------------------------------------------------------------------------

    \62\ Ibid.
---------------------------------------------------------------------------

    We sought comment on this revision to the crop residue definition, 
specifically inviting comments regarding what ought to constitute a 
``significant'' increase or decrease in GHG emissions in the context of 
this definition.
    We received significant comment supporting and opposing this 
change. At least one commenter who supported the change also stated 
that EPA should amend the definition of crop residues to more 
explicitly exclude non-cellulosic components of crop residues.\63\ We 
address the question of the cellulosic content of feedstocks in section 
IV.A. of this rulemaking. Information available to EPA indicates that 
crop residue as a class more than satisfies the 75% cellulosic content 
threshold we have adopted today to identify feedstocks which are 
eligible to generate cellulosic biofuel RINs for the entire produced 
volume.\64\ For this reason, we are not modifying the definition as 
suggested by the commenter.
---------------------------------------------------------------------------

    \63\ Comments submitted by AFPM/API (EPA-HQ-OAR-2012-0401-0128).
    \64\ See Memorandum to the Docket, ``Cellulosic Content of 
Various Feedstocks--2014 Update.'' Available in docket EPA-HQ-OAR-
2012-0401.
---------------------------------------------------------------------------

    Those opposed to the proposed change were uniformly clear that they 
supported the crop residue pathway in general.\65\ Opposition stemmed 
from concerns that our proposed clarification would be overly limiting 
and would exclude feedstocks that rightfully ought to be considered 
crop residues under the RFS. Several commenters stated that very few 
products have no market value and that most will find some sort of 
beneficial use. These commenters expressed concern over our statement 
in the preamble of the NPRM that, in order to meet the definition of 
crop residue, a crop product must generally not have a significant 
market in its own right. In their estimation, the fact that most crop 
products have a non-zero market value might cause them to be 
disqualified from the crop residue pathway.\66\ EPA acknowledges that 
many crop residues have some non-zero market value. We also acknowledge 
that most could find some sort of beneficial use, albeit a low value 
use in many cases. This in turn may have some non-zero impact on the 
total revenue a farmer receives for a crop. However, we do not believe 
that a crop product must necessarily be completely useless in order to 
qualify under the crop residue pathway. Rather, as indicated in our 
amendment to the definition of crop residue and our statements in the 
NPRM preamble, the use of the crop product to produce renewable fuel 
should not significantly

[[Page 42146]]

impact demand for the feedstock crop and associated products and should 
not lead to a significant increase in GHG emissions. It is our judgment 
that a crop product need not be completely devoid of value to meet 
these criteria, though there should be a notable difference in the 
value of the primary product and the value of the residue.
---------------------------------------------------------------------------

    \65\ See, for example, comments submitted by the Renewable Fuels 
Association, (EPA-HQ-OAR-2012-0401-0123), the National Corn Growers 
Association (EPA-HQ-OAR-2012-0401-0065), and Growth Energy (EPA-HQ-
OAR-2012-0401-0173).
    \66\ Here as well, several commenters expressed similar 
opinions. See, for example, comments submitted by the Renewable 
Fuels Association, (EPA-HQ-OAR-2012-0401-0123).
---------------------------------------------------------------------------

    Other commenters stated that the use of a crop residue as biofuel 
feedstock gives it value and that this use itself may increase the 
total value of the primary crop.\67\ Several commenters expressed 
concern that this approach may create a chilling effect on investment 
in crop residue-based fuels.\68\ EPA acknowledges the possibility that, 
if used as biofuel feedstock in large enough quantities, demand for a 
crop product may begin to affect the value of the primary crop. EPA 
noted in the NPRM that, if significant facts change over time, it is 
possible that EPA would modify its assessment regarding whether 
particular crop products meet the definition of crop residue. However, 
if EPA were to revise our assumptions or analysis concerning the 
qualification of certain crop products as crop residue, this change 
would be done after public notice and an opportunity for comment. 
Therefore, industry would have adequate opportunity to provide data to 
EPA prior to any potential changes to our interpretation regarding any 
of the feedstocks listed in Table IV.D.3-1. It is important to note 
that even if a particular feedstock evolved to the point where it had a 
significant market as a commodity and EPA were required to revisit the 
lifecycle GHG emissions analysis, this feedstock would most likely 
still meet the definition of renewable biomass. EPA would therefore be 
able to establish a new pathway for the feedstock upon completion of a 
lifecycle GHG analysis, even if the feedstock no longer fit under the 
crop residue pathway. In sum, we do not believe that the possibility of 
EPA reconsidering past LCA determinations, including those for crop 
residue pathways, should create any undue uncertainty for the private 
sector, nor that the possibility of reconsideration will materially 
affect production of cellulosic renewable fuels under pathways allowing 
for the use of crop residue as a feedstock.
---------------------------------------------------------------------------

    \67\ See comments submitted by the National Corn Growers 
Association (EPA-HQ-OAR-2012-0401-0065) and the Iowa Corn Growers 
Association (EPA-HQ-OAR-2012-0401-0124), among others.
    \68\ See, for example, comments submitted by the American 
Coalition for Ethanol (EPA-HQ-OAR-2012-0401-0147).
---------------------------------------------------------------------------

    Most commenters who opposed the change also argued that the key 
consideration ought to be whether the residue meets the 60 percent GHG 
reduction threshold for establishing a pathway to generate RINs with a 
D code of 3 and/or a D code of 7 and that, as long as a crop product 
meets this threshold, it ought to be considered a crop residue.\69\ EPA 
believes that the term crop residue should be defined in a manner that 
ensures that materials within the definition satisfy the 60 percent GHG 
reduction threshold. This is one of the reasons why EPA is finalizing 
the proposed amended definition. Materials that do not meet the 
definition of crop residue, and do not qualify as other feedstocks 
listed in Table 1, may be independently evaluated to determine if they 
satisfy the 60 percent GHG reduction threshold, or other thresholds 
applicable to other types of biofuels. Parties questioning whether an 
agricultural product meets the current definition of crop residue must 
determine if the product is ``left over.'' Our proposed and final 
definitional change is intended to clarify what this means.
---------------------------------------------------------------------------

    \69\ See, for example, comments submitted by Novozymes North 
America, Inc. (EPA-HQ-OAR-2012-0401-0088) and Growth Energy (EPA-HQ-
OAR-2012-0401-0173).
---------------------------------------------------------------------------

    However, the current regulations do not provide stakeholders with 
much guidance regarding what EPA considers to be the meaning of ``left 
over.'' The current definition has created significant confusion and 
uncertainty among stakeholders. Our goal in clarifying the definition 
of crop residue is to more transparently define the criteria that must 
be met for a feedstock to qualify under the existing crop residue 
pathway. Stakeholders who are considering whether or not to use a given 
feedstock will be able to consider these criteria, rather than relying 
on the current regulatory text that does not specify the meaning of 
``left over.''
    Those opposed to the amendment to the definition of crop residue 
also generally argued that the word ``significant'' was used vaguely in 
our proposed clarification, and that this might create undue hurdles 
for producers seeking to use low-GHG crop products under the crop 
residue pathway.\70\ As stated previously, EPA sought comment on the 
proposed change and specifically regarding what ought to constitute a 
``significant'' change in GHG emissions. Commenters who opposed the 
proposed clarification declined to offer alternative interpretations of 
the terms ``left over'' and ``significant.'' However, several of these 
commenters did state that EPA's proposal did not sufficiently describe 
what might constitute a ``significant increase,'' a ``significant 
market,'' or a ``significant impact.'' \71\
---------------------------------------------------------------------------

    \70\ See, for example, comments submitted by the National 
Biodiesel Board (EPA-HQ-OAR-2012-0401-0166) and Novozymes North 
America Inc. (EPA-HQ-OAR-2012-0401-0088).
    \71\ See, for example, comments submitted by the National 
Biodiesel Board (EPA-HQ-OAR-2012-0401-0166) and Novozymes North 
America Inc. (EPA-HQ-OAR-2012-0401-0088).
---------------------------------------------------------------------------

    It is true that EPA did not provide specific criteria for meeting 
these significance thresholds. However, in our NPRM discussion 
concerning corn kernel fiber, we discussed this question contextually. 
In that discussion, we described why we believe that corn kernel fiber 
would not cause a significant increase in demand for corn, why we 
believe that corn kernel fiber does not have a significant market in 
its own right, and why its removal from distillers' grains to produce 
biofuel will not have a significant impact on direct or indirect GHG 
emissions. Stakeholders who wish to better understand how to evaluate 
whether other feedstocks meet the definition of crop residue should 
consult that discussion and the comparable discussion in section IV.D.2 
of this preamble.
    Few commenters offered opinions regarding what might constitute a 
``significant market'' for a crop product. However, comments submitted 
by the Iogen Corporation did provide one potential framework for 
understanding when a crop product might be considered to have a 
significant market. In their comments, Iogen stated that ``EPA should 
not consider potential for significant crop shifting unless the farmer 
revenue per acre for raw unprocessed crop residue (i.e., before fees 
for collection, baling, stacking, transport, etc.) is more than 15 
percent of the grain crop revenue per acre. We believe the volatility 
of the grain crop revenues is much larger than 15 percent of the grain 
price, and that the incremental revenue will not affect crop planting 
decisions.'' \72\
---------------------------------------------------------------------------

    \72\ Comments submitted by Iogen Corporation (EPA-HQ-OAR-2012-
0401-0135).
---------------------------------------------------------------------------

    EPA has not utilized this methodology to identify which crop 
products we consider crop residues for the purposes of this final 
rulemaking. We acknowledge that this type of methodology could 
potentially be useful for evaluating whether future feedstocks meet our 
definition of crop residue, including non-grain crops. While we have 
not performed sufficient analysis to determine whether it is 
appropriate to adopt such an approach today, we may

[[Page 42147]]

reconsider it in the future. Regardless, we do believe that it provides 
a useful consideration for stakeholders.
    In Table IV.D.3-1 of this preamble, EPA identifies several crop 
products that we consider crop residues. In addition, we have provided 
greater transparency to stakeholders regarding the criteria for 
qualifying as a crop residue under the RFS in this preamble and in the 
clarified definition of crop residue. As a general principle, if a 
product meets the regulatory definition of crop residue as described 
above and is similar to a feedstock that we identify as a crop residue 
in Table IV.D.3-1, then it is likely that EPA would consider it as 
qualifying as a crop residue. Conversely, if it is not clear that a 
product meets the regulatory definition of crop residue as described 
above, or if the feedstock is not similar to any of the feedstocks 
identified in Table IV.D.3-1, then there is greater uncertainty that it 
will qualify.\73\
---------------------------------------------------------------------------

    \73\ It is important to keep in mind that not qualifying under 
the crop residue pathway does not in any way exclude fuel produced 
from a given feedstock from qualifying to generate RINs with a D 
code of 3 or a D code of 7 more generally. It only means that a new 
pathway would need to be established, were EPA to find that the fuel 
produced from that feedstock meets the 60 percent threshold.
---------------------------------------------------------------------------

    EPA acknowledges that it may not always be straightforward for a 
stakeholder to determine for themselves whether a crop product is 
likely to qualify under the crop residue pathway, even with the 
guidance provided in this preamble and in the revised definition. In 
light of this, and to promote accurate identification of feedstocks 
that do and do not qualify as crop residues, EPA is implementing 
additional registration, recordkeeping, and reporting requirements for 
producers intending to use crop residue as a feedstock. These 
additional requirements will help to ensure that producers of renewable 
fuel do not inadvertently attempt to generate RINs under a crop residue 
pathway utilizing a feedstock that EPA does not consider to be a crop 
residue. See section IV.D.4 of this final rulemaking for more details 
on these requirements.
2. Consideration of Corn Kernel Fiber as a Crop Residue
    We also proposed in the NPRM that corn kernel fiber be considered a 
crop residue. Corn kernel fiber has not been specifically mentioned as 
a type of crop residue in any previous RFS rulemaking. However, EPA has 
received several requests to consider corn kernel fiber to be a crop 
residue. Because it had not been considered a crop residue previously, 
EPA conducted an evaluation that assessed whether corn kernel fiber 
should be considered a crop residue. This analysis focuses on whether 
corn kernel fiber can be considered ``left over from the harvesting or 
processing of planted crops'', whether it has ``no significant impacts 
on demand for the feedstock crop, products produced from that crop, or 
any substitutes for the crop and its products'' nor ``any other impact 
that would result in a significant increase in direct or indirect GHG 
emissions.''
    We requested comment on our proposed analysis. We received 
significant comment supporting our analysis and our proposal that corn 
kernel fiber should be considered a crop residue.\74\ We did not 
receive any comments opposing our analysis or our conclusions. 
Accordingly, we have decided based on the assumptions, facts and 
analysis described below that corn kernel fiber should be considered 
crop residue as proposed. Should relevant facts described in our 
analysis change, a re-evaluation of the issue may be warranted. Our 
analysis of corn kernel fiber can serve as one of many possible 
illustrative examples of how crop products can be evaluated for 
qualification as crop residues, in addition to our previous 
considerations of other feedstocks that we consider to be crop residue, 
such as corn stover.\75\
---------------------------------------------------------------------------

    \74\ Several commenters expressed extremely similar opinions on 
this point. But see, for example, comments submitted by the 
Renewable Fuels Association, (EPA-HQ-OAR-2012-0401-0123), the 
National Corn Growers Association (EPA-HQ-OAR-2012-0401-0065), and 
Growth Energy (EPA-HQ-OAR-2012-0401-0173).
    \75\ For our analysis of corn stover in the context of the crop 
residue pathway, see 75 FR 14670, March 26, 2010.
---------------------------------------------------------------------------

a. Analysis of Corn Kernel Fiber as a Crop Residue
    The amended definition of crop residue requires us to consider any 
potential ``significant impact on demand for the feedstock crop, 
products produced from that feedstock crop, and all substitutes for the 
crop and its products, and any other impact that would result in a 
significant increase in direct or indirect GHG emissions.'' To 
determine whether the use of corn kernel fiber to produce renewable 
fuel would lead to increased direct or indirect GHG emissions stemming 
from any of these sources, EPA conducted a detailed assessment of the 
two major potential sources of emissions from this feedstock, namely 
effects on feed markets and effects on demand for corn. In our 
analytical judgment, any impacts on corn, corn products, or substitutes 
for corn or corn products would come from impacts on the feed market 
for dried distillers grains (DDG) or from some other impact on overall 
demand for corn. We did not identify any other potential sources of 
significant increased GHG emissions in our proposed analysis, and no 
commenter suggested that any such source might exist. Therefore, we are 
confident that the analysis we have conducted below adequately 
addresses all aspects of the definition of crop residue, excepting 
questions regarding the source of the biomass, which will be evaluated 
in the context of each individual producer registration pursuant to 40 
CFR 80.1450.
    Producers acquire corn kernel fiber for ethanol feedstock as a part 
of the whole corn feedstock stream entering into a corn starch ethanol 
plant. This fiber stream may then be accessed for ethanol production in 
one of two general ways. One option is for producers to extract it from 
matter that would otherwise be converted to DDG during the dry mill 
corn ethanol production process. This step can be performed either 
before or after that matter has been separated from the corn starch 
ethanol. In either case, the corn fiber is processed into ethanol via a 
separate stream from corn starch ethanol production. A second option is 
for producers to access and convert the fiber in situ along with the 
corn starch that is converted to ethanol. In order to meet the 
definition of a crop residue, the source of corn kernel fiber must be 
incidental to some other primary purpose. An ethanol producer utilizing 
corn kernel fiber as a feedstock cannot purchase whole corn for the 
primary purpose of generating corn fiber ethanol and still qualify 
their feedstock as crop residue.
    Consequently, this analysis relied significantly on the assessment 
of corn starch ethanol-derived DDG that was conducted for the March 
2010 RFS final rule, adjusting the analysis to account for the 
extraction of fiber from this product.\76\ The analysis also drew 
substantially on the available scientific literature on low fiber DDG 
(LF-DDG), as well as the expertise of the U.S. Department of 
Agriculture. Potential producers also submitted important data that 
helped EPA evaluate the lifecycle GHG emissions of corn kernel fiber.
---------------------------------------------------------------------------

    \76\ See 75 FR 14670, March 26, 2010.
---------------------------------------------------------------------------

    It is important to note that all animal feed products must be 
approved by the U.S. Food and Drug Administration (FDA) before they can 
be sold in the United States. EPA's analysis makes observations and 
draws conclusions about the characteristics and likely uses of LF-DDG 
based on the available literature regarding LF-DDG that has

[[Page 42148]]

been fed to livestock in research settings. However, at this time the 
FDA has not approved LF-DDG for use in commercial animal feed. Nothing 
in EPA's analysis should be construed as an official federal government 
position regarding the approval or disapproval of LF-DDG as an animal 
feed. Only FDA is authorized to make that determination. Our analysis 
proceeds from the assumption that producers of LF-DDG will be able to 
gain FDA approval for these feed products and that they will do so 
before commencing production and sale of this feed product. If however 
FDA does not approve LF-DDG as an animal feed, there will be 
implications for the LCA of corn kernel fiber, and EPA will revisit its 
determination.
    EPA found that extracting the fiber from corn matter used to 
produce standard DDG would not have a significant effect on feed 
markets. Processors who extract the fiber from corn produce a feed 
product known as LF-DDG, as opposed to standard DDG, which retains the 
fiber. The scientific literature on LF-DDG animal nutrition has found 
that this product has at least equal, and perhaps even slightly 
superior, nutritional value for swine and poultry compared to standard 
DDG.\77\ This means that, even though the physical volume of the LF-DDG 
produced by ethanol plants using corn kernel fiber extraction 
technology will be somewhat smaller than the volume of DDG produced by 
plants not extracting corn kernel fiber, the nutritional content of LF-
DDG for swine and poultry will be equivalent to or greater than DDG.
---------------------------------------------------------------------------

    \77\ See, e.g., Kim, E.J., C.M. Parsons, R. Srinivasan, and V. 
Singh. 2010. Nutritional composition, nitrogen-corrected true 
metabolizable energy, and amino acid digestibilities of new corn 
distillers dried grains with solubles produced by new fractionation 
processes. Poultry Science 89, p. 44, available on the docket for 
this rulemaking as EPA-HQ-OAR-2012-0401-0002. See also additional 
studies cited within Kim et al 2010.
---------------------------------------------------------------------------

    Conversely, LF-DDG is an inferior feed for cattle compared to 
standard DDG, since ruminants benefit from ingesting corn fiber in 
DDG.\78\ Therefore, EPA expects swine and poultry producers to absorb 
the supply of LF-DDG, while the cattle and dairy industry will continue 
to consume standard DDG. With this dynamic in place, fiber extraction 
from DDG should not significantly affect feed markets, since there will 
be no reduction in the overall supply of DDG in terms of nutritional 
content nor will there be any impact on aggregate demand for other 
animal feed sources.
---------------------------------------------------------------------------

    \78\ See Shurson, G.C. 2006. The Value of High-Protein 
Distillers Coproducts in Swine Feeds. Distillers Grains Quarterly, 
First Quarter, p. 22, available on the docket for this rulemaking as 
EPA-HQ-OAR-2012-0401-0003.
---------------------------------------------------------------------------

    If enough corn ethanol producers adopt fiber extraction technology, 
LF-DDG could saturate swine and poultry demand and spill over into 
dairy and cattle feed markets. If a situation arises where LF-DDG begin 
to replace standard DDG in dairy and/or cattle markets, this could lead 
to an increase in aggregate feed demand, most likely in the form of 
increased demand for fiber supplements in dairy and cattle feed. This 
theoretically could cause an increase in GHG emissions. However, we do 
not expect this to occur. If swine and poultry demand for LF-DDG 
becomes saturated, demand for standard DDG in the cattle and dairy 
industries should create sufficient market incentives for the remaining 
corn starch ethanol producers to decide against adopting corn fiber 
ethanol production. EPA believes this will prevent a situation where 
there is insufficient supply of standard DDG in the cattle and dairy 
industries. However, as noted above, if significant facts change, it 
may be appropriate for EPA to reexamine corn kernel fiber as a crop 
residue in the future.
    EPA's analysis indicates that producing ethanol from corn kernel 
fiber is unlikely to increase overall demand for corn, in addition to 
having no significant impact on feed markets. It is our judgment, based 
on the analysis above, that the primary purpose of procuring whole corn 
for processing in a corn starch ethanol plant is to produce corn starch 
ethanol, since more than 90 percent of the ethanol produced will be 
from the starch. The plant would most likely procure that same quantity 
of whole corn regardless of whether they were converting the fiber into 
ethanol or sending it to some other end use. The diversion of corn 
kernel fiber from the DDG stream to an ethanol production stream will 
not materially affect the value of the feed products produced by a corn 
starch ethanol plant per bushel of corn processed. Because of this, 
there will be no significant incentive for the plant that is producing 
ethanol from corn kernel fiber to procure more or less corn than they 
would if they were selling the fiber as part of their DDG product. We 
can find no evidence to support a claim that production of ethanol from 
corn kernel fiber has any significant impact on demand for corn, 
products produced from corn, or the substitutes for corn and its 
products. Further, we find that if corn kernel fiber is not used to 
produce ethanol, it will be left over from the corn starch ethanol 
production process, because its presence or absence in DDG products 
does not materially impact the value of those DDGs or the overall 
market for DDGs and feed products. Finally, we were unable to identify 
any other potentially significant impacts associated with utilizing 
corn kernel fiber to produce renewable fuel that might lead to 
significant GHG emissions, nor were any such impacts identified during 
public notice and comment. Based on these factors, we find that 
utilizing corn kernel fiber to produce renewable fuel would have no 
significant impacts on GHG emissions. These findings support a 
determination that corn kernel fiber meets the definition of a crop 
residue. Therefore, corn kernel fiber may be used as a feedstock in 
those pathways in Table 1 to Sec.  80.1426 that specify crop residue as 
a feedstock.
b. Treatment of Corn Starch That Adheres to Corn Kernel Fiber After 
Separation From DDG
    EPA sought comment on whether the definition of crop residue should 
be amended to explicitly exclude the corn starch component, since some 
corn starch may still adhere to the corn kernel after separation. 
Additionally, EPA invited comment on how RINs should be allocated for 
fuel derived from corn fiber, including comment on the sufficiency of 
current RFS regulations with regards to the assignment of RINs to 
batches of corn starch ethanol and corn kernel fiber ethanol produced 
via consolidated bioprocessing and whether producers have the 
technological capability to adequately demonstrate the volume of fuel 
produced under each pathway.
    Commenters confirmed that some starch may adhere to the unconverted 
fiber, even after most of the starch has been processed into 
ethanol.\79\ However, many of those same commenters also supported 
considering this starch as ``de minimis'' under our current 
regulations.\80\ Those current regulations state that ``producers and 
importers may disregard any incidental, de minimis feedstock 
contaminants that are impractical to remove and are related to 
customary feedstock production and transport.'' \81\ We received 
several comments noting that corn kernels undergo a rigorous mechanical 
process designed to separate the starch from the

[[Page 42149]]

rest of the corn kernel before processing that starch into ethanol. 
Despite this process, some starch adheres to the fibrous portions of 
the kernel and, in a standard corn starch ethanol plant, ends up in the 
DDG.\82\
---------------------------------------------------------------------------

    \79\ See, for example, comments submitted by Edeniq, Inc. (EPA-
HQ-OAR-2012-0401-0159).
    \80\ Numerous commenters supported this position. See, for 
example, comments submitted by Edeniq, Inc. (EPA-HQ-OAR-2012-0401-
0159), the American Coalition for Ethanol (EPA-HQ-OAR-2012-0401-
0147), and Growth Energy (EPA-HQ-OAR-2012-0401-0173).
    \81\ See specifically Sec.  80.1426(f)(1).
    \82\ See comments submitted by Quad County Corn Processors (EPA-
HQ-OAR-2012-0401-0063), by Edeniq, Inc. (EPA-HQ-OAR-2012-0401-0159), 
and the American Coalition for Ethanol (EPA-HQ-OAR-2012-0401-0147).
---------------------------------------------------------------------------

    Commenters argued that this adhering starch is indeed impractical 
to remove and is present only in small quantities.\83\ In the preamble 
of the NPRM for this rulemaking, EPA stated that starch might compose 
up to 20 percent of the separated mass used to produce corn kernel 
fiber ethanol via a separate stream, based on data from 1998. Through 
the public comment process, we received more recent and fine-grained 
data that better represents current methods of starch-fiber separation. 
Based on this newer data, we believe the actual amount of starch that 
adheres to the fiber after separation from the rest of the corn kernel 
is typically less than 5 percent of the total mass of the separated 
corn kernel fiber feedstock.\84\
---------------------------------------------------------------------------

    \83\ See, for example, comments submitted by Edeniq, Inc. (EPA-
HQ-OAR-2012-0401-0159).
    \84\ Ibid.
---------------------------------------------------------------------------

    In light of the small quantity of starch involved, typically less 
than 5 percent of the mass, and the impracticability of separating the 
starch which adheres to the fiber, we believe that this starch 
component can appropriately be considered a de minimis contaminant. 
Like all plant fibers, the fibrous portion of corn kernel fiber is 
composed of nearly 100 percent cellulose, hemicellulose, and lignin. 
Taken together with the small quantity of adhering corn starch, corn 
kernel fiber is clearly above the 75 percent threshold we have 
established in today's rulemaking for determining when a feedstock is 
predominantly cellulosic, and this is also consistent with our finding, 
discussed in section IV.A. of the preamble, that crop residue as a 
class has at least 75 percent cellulosic content. To be clear, this de 
minimis determination only applies to starch adhering to corn kernel 
fiber that is being processed into ethanol separately from corn starch 
ethanol. Processes that convert corn starch and corn kernel fiber to 
ethanol in situ (as is described in detail in the next section) may not 
consider any portion of the corn starch to be de minimis. Furthermore, 
if any producer processing corn kernel fiber separately from corn 
starch fails to use best practices \85\ to separate adhering corn 
starch, in an attempt to boost production of cellulosic biofuel from 
processing corn kernel fiber or for any other reason, the adhering 
starch will not be considered a de minimis contaminant, and the entire 
batch of resulting fuel will not be considered derived from crop 
residue and will not qualify as cellulosic biofuel. Since processing of 
the corn kernel would be incomplete, the feedstock would not be 
considered left over from processing and would not meet the definition 
of crop residue in Sec.  80.1401. While the batch of resulting fuel 
might be eligible to generate renewable biofuel RINs (D code of 6) for 
the starch-derived component of the fuel, RINs could only be generated 
for the fuel derived from non-starch components of such feedstock to 
the extent that such volumes were grandfathered under Sec.  80.1403(c) 
or (d).Based on the existing reporting requirements listed in Sec.  
80.1451(b)(1)(ii),\86\ EPA is already requiring the data necessary to 
identify whether the cellulosic RINs that a fuel producer is generating 
is disproportionate to the amount of corn kernel fiber processed at a 
facility. EPA collects feedstock volumes, fuel volumes, and other data 
reported to determine that RINs and volumes are generated in accordance 
with the regulations.
---------------------------------------------------------------------------

    \85\ Data submitted by commenters indicate that the rigorous 
mechanical process employed to separate corn kernel fiber and corn 
starch will typically allow less than 5% of residual starch to 
adhere to the fiber after separation. See comments submitted by Quad 
County Corn Processors (EPA-HQ-OAR-2012-0401-0063), by Edeniq, Inc. 
(EPA-HQ-OAR-2012-0401-0159), and the American Coalition for Ethanol 
(EPA-HQ-OAR-2012-0401-0147).
    \86\ Required information includes: Quantity of RINs generated, 
volume of fuel produced, feedstock type, and exact feedstock 
quantity.
---------------------------------------------------------------------------

c. Processing Corn Kernel Fiber
    Corn kernel fiber may be used for biofuel production in multiple 
ways. As detailed above in section IV.A.4, renewable fuel can be 
produced pursuant to biochemical conversion processes that 
simultaneously hydrolyze and/or ferment cellulosic and non-cellulosic 
material into fermentable sugars and/or fuel. Corn kernel fiber as a 
crop residue may be converted into qualifying renewable fuel via 
biochemical methods in one of two ways.\87\ First, it may be converted 
via a consolidated bioprocessing method that converts cellulosic and 
non-cellulosic corn material into sugars and/or fuel products 
simultaneously. Second, corn kernel fiber may be converted to sugar 
and/or fuel via a separate stream from the corn starch sugar and fuel 
conversion streams.
---------------------------------------------------------------------------

    \87\ Corn kernel fiber may also be converted to fuel via 
thermochemical methods. See section IV.A.4 for details on the 
requirements for renewable fuel production via thermochemical 
pathways.
---------------------------------------------------------------------------

    The first method may include simultaneous hydrolysis of the starch 
and cellulosic components of the corn kernel into sugars, followed by 
simultaneous conversion of those sugars into fuel products. In other 
cases, the cellulosic and non-cellulosic portions of the corn kernel 
may be hydrolyzed separately but fermented together in a single vessel. 
In either case, EPA considers this process technology to be a method of 
simultaneous conversion. We discuss the requirements for using a 
simultaneous conversion process in section IV.A.4 of this preamble.
    Alternatively, producers may hydrolyze and ferment the cellulosic 
and non-cellulosic portions of the corn kernel via separate streams. 
This may be accomplished in at least one of two ways. A producer might 
separate the starch from the corn kernel fiber before the hydrolysis 
step, sending each set of material through separate hydrolysis, 
fermentation, and distillation streams. A producer might also perform a 
conventional corn starch ethanol fermentation process, yielding corn 
starch ethanol, and then hydrolyze and ferment the residual solids 
(which typically become DDG at the end of the process) a second time, 
using enzymes designed to convert cellulosic material to sugars. If a 
producer uses a process that hydrolyzes and ferments the corn kernel 
fiber separately from the corn starch, either in a parallel but 
separate process or in a sequential process that extracts the fiber 
from the residual solids after corn starch ethanol fermentation, then 
the producer is not considered to be performing simultaneous 
conversion, and all of the resulting corn kernel fiber-derived fuel may 
appropriately be considered derived from predominantly cellulosic 
biomass. As discussed above, some starch may adhere to the fiber after 
the separation step or may remain in the residual solids output of a 
conventional corn starch ethanol fermentation process. However, we 
believe this small amount of corn starch contaminant fits under EPA's 
de minimis feedstock contaminant provision in the existing regulations, 
and should be disregarded.\88\ This is the case even if a producer were 
to add enzymes which might convert starch adhering to the corn kernel 
fiber to ethanol.
---------------------------------------------------------------------------

    \88\ See specifically Sec.  80.1426 (f) (1).

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[[Page 42150]]

3. Identification of Feedstocks EPA Considers Crop Residues
    To provide additional guidance on the definition of crop residue, 
EPA is identifying several feedstocks that we consider to be crop 
residues. In the NPRM, we provided a table that included feedstocks 
which we have previously identified as crop residues in public 
documents and which we believed fit the definition of crop residue.\89\ 
That table included corn stover, corn kernel fiber (see section IV.D.2 
above for further discussion), citrus residue, rice straw, sugarcane 
bagasse, and wheat straw. All of these feedstocks were identified as 
crop residues in the preamble of the March 2010 RFS final rulemaking, 
with the exception of corn kernel fiber. For example, EPA analyzed the 
agricultural sector GHG emissions of using corn stover for biofuels in 
the final March 2010 RFS final rulemaking and found that fuel produced 
from this feedstock met the 60% GHG reduction threshold for cellulosic 
biofuels.\90\ Since the direct and indirect impacts of several other 
crop products, including citrus residue, rice straw, and wheat straw, 
were expected to be similar to those of corn stover, EPA also applied 
the land use change impacts associated with corn stover to those 
products as well. Based on that analysis, EPA found that fuels produced 
from these products also met the 60% reduction threshold. EPA further 
determined that fuels produced from materials left over after the 
processing of a crop into a useable resource had land use impacts 
sufficiently similar to agricultural residues to also meet the 60% 
threshold. EPA specifically cited bagasse left over from sugarcane 
processing as an example of this type of crop residue.
---------------------------------------------------------------------------

    \89\ See Table IV.D.3-1--Feedstocks That May Qualify as Crop 
Residue, 78 FR, 36056-36057, June 14, 2013.
    \90\ See EPA-HQ-OAR-2005-0161-3173.2, EPA-HQ-OAR-2005-0161-
3173.3, and EPA-HQ-OAR-2005-0161-3173.4, under the Lifecycle Results 
Docket for the March 2010 RFS Final Rulemaking.
---------------------------------------------------------------------------

    EPA sought comment on whether these feedstocks should be considered 
crop residues, whether these feedstocks would have direct and indirect 
GHG impacts similar to corn stover, and whether additional feedstocks 
should also be considered crop residues. We received numerous comments 
that supported considering all of these feedstocks as crop 
residues.\91\ We did not receive any comments that opposed considering 
any of the feedstocks identified in the NPRM as crop residues, nor did 
we receive any comments that disputed our reasons for considering them 
crop residues.
---------------------------------------------------------------------------

    \91\ Several commenters expressed extremely similar opinions on 
this point. But see, for example, comments submitted by the 
Renewable Fuels Association, (EPA-HQ-OAR-2012-0401-0123), the 
National Corn Growers Association (EPA-HQ-OAR-2012-0401-0065), and 
Growth Energy (EPA-HQ-OAR-2012-0401-0173).
---------------------------------------------------------------------------

    In addition, several commenters identified other crop products 
which are extremely similar to those that we proposed to consider crop 
residues. Commenters noted that we have identified sugarcane bagasse as 
a crop residue in multiple rulemakings, including the March 2010 RFS 
final rule and the NPRM of this rule, but have not previously 
considered sweet sorghum bagasse.\92\ The processes for separating 
bagasse from simple sugars is very similar between sugarcane and sweet 
sorghum and the market and other potential GHG impacts of utilizing 
that bagasse to produce renewable fuel are also considered to be 
similar. Therefore we are today identifying both as feedstocks which we 
consider crop residues.
---------------------------------------------------------------------------

    \92\ See comments submitted by NexSteppe Inc. (EPA-HQ-OAR-2012-
0401-0153). See also 75 FR 14692, March 26, 2010 and 78 FR 36042, 
June 14, 2013.
---------------------------------------------------------------------------

    Commenters noted that we identified corn stover as a crop residue 
in the NPRM, but have not previously considered grain sorghum 
stover.\93\ Since the composition, methods of production, methods of 
collection, market potential, and implications for other relevant 
markets for these two types of stover are nearly identical, these two 
stovers would reasonably seem to have similar GHG impact profiles.
---------------------------------------------------------------------------

    \93\ See comments submitted by the National Sorghum Producers 
(EPA-HQ-OAR-2012-0401-0065), Iogen Corporation (EPA-HQ-OAR-2012-
0401-0135), NexSteppe Inc. (EPA-HQ-OAR-2012-0401-0153).
---------------------------------------------------------------------------

    Commenters also noted that, in the NPRM, we did not list grain 
fibers other than corn kernel fiber. To the extent that other grain 
kernel fibers are extracted and used for biofuel feedstock in the same 
manner as we lay out for corn kernel fiber in section IV.D.2 above 
(i.e., during the processing of grain feedstock into ethanol), these 
products would reasonably seem to have similar GHG impact profiles to 
corn kernel fiber.\94\ To the extent that these grain fibers are 
obtained in the same manner that we have laid out for corn kernel 
fiber, their alternative fate would also be distillers grains. The 
impacts of fiber on the digestion of ruminants, swine, and poultry are 
extremely similar, regardless of what grain that fiber came from, 
because all grain fiber is virtually 100 percent cellulosic. Therefore, 
we are confident that diverting that fiber to a fuel production stream 
would have similarly insignificant market and other GHG impacts to 
those of corn kernel fiber, and we similarly consider them to be crop 
residues under those circumstances.
---------------------------------------------------------------------------

    \94\ See comments submitted by Novozymes North America Inc. 
(EPA-HQ-OAR-2012-0401-0088), ICM (EPA-HQ-OAR-2012-0401-0114), 
NexSteppe Inc. (EPA-HQ-OAR-2012-0401-0153), Growth Energy (EPA-HQ-
OAR-2012-0401-0173),
---------------------------------------------------------------------------

    Commenters also pointed out that we identified wheat straw and rice 
straw as crop residues in the NPRM but did not identify other grain 
straws (e.g., oat straw, barley straw) as residues, even though these 
products would reasonably seem to have similar GHG impact profiles to 
wheat straw and rice straw.\95\ EPA has determined that these straws do 
indeed have similar GHG impacts to those of wheat straw and rice straw. 
All of them have similarly insignificant markets, insignificant effects 
on demand for the crop from which they are derived, and insignificant 
impacts on other crop products and substitutes. Further they are 
processed into renewable fuel in nearly identical ways. Therefore, we 
consider all of the grain straws listed in Table IV.D.3-1 below to be 
crop residues.
---------------------------------------------------------------------------

    \95\ See comments submitted by Iogen Corporation (EPA-HQ-OAR-
2012-0401-0135),
---------------------------------------------------------------------------

    Finally, while we proposed to identify ``citrus residue'' as a crop 
residue in the NPRM, several stakeholders have suggested that this 
label is rather vague. There are several different types of byproducts 
or residues from citrus processing (e.g., peels, pulp, seeds), each 
with a unique chemical composition and degree of alternative 
usefulness. EPA does not currently have sufficient information to 
determine that all byproducts of citrus processing meet the 
requirements of the crop residue pathway. Producers wishing to utilize 
citrus processing byproducts as a feedstock under the crop residue 
pathway will need to provide EPA with further information about the 
materials they are utilizing, per the registration requirements 
detailed in section IV.D.4.a of this FRM.
    In Table IV.D.3-1 we are identifying several crop products that EPA 
considers to be crop residues.\96\ This table is meant to be 
illustrative, not exhaustive, of the types of crop products that EPA 
considers to be crop residues. It is included here to provide guidance 
and greater clarity to stakeholders; it should not be considered a 
definitive list. It will not appear in our regulations, though EPA may 
publish a table similar

[[Page 42151]]

to Table IV.D.3-1 on our Web site for the convenience and education of 
stakeholders. We acknowledge that there may be other crop products 
which were not brought to our attention during this rulemaking process 
and which are not included in Table IV.D.3-1, but which may meet the 
definition of crop residue as we are clarifying it in today's final 
rulemaking. Further details regarding how EPA may evaluate these crop 
products can be found in section IV.D.1 and section IV.D.2 of this 
final rulemaking. Additionally, stakeholders may also want to consult 
section IV.D.4 of this final rulemaking, which describes new RRR 
requirements for producers who wish to use crop residue as a feedstock 
for renewable fuel production.
---------------------------------------------------------------------------

    \96\ Our analysis of corn kernel fiber as a crop residue is 
discussed in section IV.D.2 of this preamble.

       Table IV.D.3-1--Feedstocks That EPA Considers Crop Residues
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Sugarcane and Sweet Sorghum Bagasse.
Kernel Fiber from Barley, Corn, Oats, Rice, Rye, Grain Sorghum, and
 Wheat.
Stover from Corn and Grain Sorghum.
Straw from Barley, Oats, Rice, Rye, Soybeans, and Wheat.
------------------------------------------------------------------------

4. Registration, Recordkeeping, and Reporting Requirements Associated 
With Using Crop Residue as a Feedstock
    Under current regulations, producers registering to generate RINs 
using the crop residue pathway are not required to specify exactly 
which crop products they intend to use. This could potentially lead to 
a situation where a producer inadvertently generates invalid RINs by 
producing a batch of fuel from a crop product that does not meet the 
crop residue definition. In order to ensure that producers only utilize 
crop products which EPA considers to be crop residues and thereby 
generate valid RINs when using a crop residue pathway, we are 
implementing additional RRR requirements for producers using crop 
residue as feedstock under any approved pathway.
a. Registration Requirements for Producers Utilizing Crop Residue as a 
Feedstock
    EPA acknowledges that the regulatory definition adopted today may 
be difficult to interpret in some respects. On the other hand, EPA 
believes that the proposed revised definition appropriately describes 
crop products that should qualify as crop residues. In order to reduce 
uncertainty and confusion in the application of the revised definition, 
we are implementing a new registration requirement for those seeking to 
use crop residues as a feedstock. Any entity registering to use crop 
residue as a feedstock must, as a part of their registration package 
submitted pursuant to 40 CFR 80.1450, include a list of all crop 
materials they intend to use that they consider to be crop residue, and 
a justification for their belief that the listed crop materials meet 
the regulatory definition of crop residue. These regulatory amendments 
appear in 40 CFR 80.1450.
    If the crop product is one that EPA has previously identified as 
meeting the regulatory definition of crop residue, then referencing the 
relevant EPA document will likely be sufficient justification. However, 
if a crop product is not one that EPA has previously identified as a 
crop residue, then EPA intends to evaluate whether that feedstock meets 
the regulatory definition prior to accepting the facility's 
registration. If the feedstock is very similar to one that EPA has 
already evaluated, this may be a relatively brief process. See the 
discussion in section IV.D.3 above for some examples of how this 
comparison could be performed by EPA. However, if the feedstock 
markedly differs from those we have evaluated previously, as corn 
kernel fiber did before this final rulemaking, then a more extensive 
analysis, even including lifecycle GHG analysis, may be required. Each 
feedstock presents its own sets of questions. Stakeholders may wish to 
consult our analysis of corn kernel fiber in section IV.D.2 of this 
rulemaking for an example of such an analysis.
    If EPA decides that further analysis of a particular feedstock is 
needed, the registrant will have the option of removing the crop 
product from its registration package, in order to allow the remainder 
of the package to be processed more quickly and to allow the producer 
to be registered and begin production using other feedstocks pending 
EPA's analysis. If EPA later determines that the crop product in 
question meets the regulatory definition of crop residue, then the 
registrant could update their registration to include that feedstock. 
However, in order to avoid delay, stakeholders may wish to consult 
EPA's Web site and rulemakings regarding the definition of crop residue 
before submitting their registration. Should a stakeholder discover 
that a feedstock they are planning to utilize has not been previously 
identified by EPA as a crop residue, it may be beneficial and expedient 
for them to consult EPA before submitting their registration. We are 
not finalizing any requirement that stakeholders take this affirmative 
step before submitting their registration. However, we believe that 
taking this step may lead to a more streamlined process for entities 
who wish to utilize a new crop product as feedstock in pathways 
providing for use of crop residue.
    Entities who are already registered to generate renewable fuel 
using crop residue as a feedstock will not be required to immediately 
update their registration to conform to these new requirements. 
However, when these entities perform periodic updates to their 
registration pursuant to 40 CFR 80.1450(d)(3), they will be required to 
include the information described in these new requirements at that 
time.
b. Recordkeeping and Reporting Requirements for Producers Utilizing 
Crop Residue as a Feedstock
    In addition to the registration requirements outlined above, EPA is 
also requiring that any entity registered to generate RINs using crop 
residue as a feedstock keep records of the quantities of each specific 
crop product they utilize, and that they report the quantities used to 
generate qualifying renewable fuel over the past three months in each 
quarterly report to EPA.\97\ This requirement is somewhat different 
from the feedstock reporting requirement associated with reporting RIN 
generation in EMTS. In EMTS, the RIN generator is only required to 
report the total quantity of crop residue used to produce the batch of 
fuel for which RINs are generated. These new recordkeeping and 
quarterly reporting requirements go a step further by requiring 
specific accounting of the exact quantities of individual crop products 
used by the producer over a three-month period. The exact regulatory 
requirements of this new provision are detailed in the amendments to 40 
CFR 80.1451 and 80.1454 below.
---------------------------------------------------------------------------

    \97\ At the time of this rulemaking, RIN generators would report 
this information via quarterly report number RFS0801. See http://www.epa.gov/otaq/fuels/reporting/rfs.htm for further details.
---------------------------------------------------------------------------

E. Amendments to Various RFS Compliance Related Provisions

    We are finalizing a number of changes to the RFS regulations 
related to compliance, except for the definition of ``Responsible 
Corporate Officer'' (RCO), which was proposed but is not being 
finalized.
1. Changes to Definitions
    ``Responsible Corporate Officer'':
    EPA is not finalizing the definition of ``responsible corporate 
officer'' at this time. The existing RFS regulations at Sec. Sec.  
80.1416, 80.1451 and 80.1454, and

[[Page 42152]]

EPA guidance and instructions regarding registration and reporting, 
frequently refer to the responsibilities of the ``owner or a 
responsible corporate officer.'' However, the term ``responsible 
corporate officer'' had not been defined in the RFS regulations.
    Several commenters requested that EPA review its existing policy on 
acceptable position titles and what registration updates have to be 
approved by an RCO. These comments were directed at EPA's 
administrative procedures and registration system, rather than the 
regulatory responsibilities of the RCO with regard to compliance with 
RFS standards. EPA needs to evaluate the registration process, which 
may include potential modifications to the registration system, for 
opportunities to minimize burden on RCOs and to better differentiate an 
RCO's roles with respect to program compliance versus administrative 
roles in our registration system. Based on these comments and the 
potential for registration system modifications, EPA is not finalizing 
the RCO definition at this time. Regulated parties should continue to 
follow existing regulations and registration procedures.
    ``Small Refinery'':
    Section 211(o)(9)(A) of the Clean Air Act provides an exemption 
from RFS requirements through 2010 for ``small refineries,'' defined as 
refineries having an average aggregate daily crude oil throughput ``for 
a calendar year'' that does not exceed 75,000 barrels. It also provides 
for possible extensions of this exemption, through individual petitions 
to EPA under CAA section 211(o)(9)(B). In EPA's March 26, 2010 
regulations implementing the EISA amendments to the RFS program we 
specified in the regulatory definition of ``small refinery'' that the 
75,000 bpd threshold determination should be calculated based on 
information from calendar year 2006. At the beginning of the program, 
having a single year in which to make this determination simplified the 
calculations and helped to ensure that all refineries were treated 
similarly. However, we no longer believe that it is appropriate that 
refineries satisfying the 75,000 bpd threshold in 2006 should be 
eligible for extensions to their small refinery RFS exemption if they 
no longer meet the 75,000 bpd threshold. Allowing such facilities to 
qualify for an exemption extension, while not allowing similarly sized 
facilities that have not grown since 2006 to qualify for an exemption, 
does not appear fair, nor does it further the objectives of the statute 
to target relief to only truly small facilities. Therefore, we proposed 
modifying the definition of small refinery so that the crude throughput 
threshold of 75,000 bpd must apply in 2006 and in all subsequent years. 
We also proposed specifying in Sec.  80.1441(e)(2)(iii) that in order 
to qualify for an extension of its small refinery exemption, a refinery 
must meet the definition of ``small refinery'' in Sec.  80.1401 for all 
full calendar years between 2006 and the date of submission of the 
petition for an extension of the exemption.
    We proposed that that these changes would not affect any existing 
exemption extensions under CAA section 211(o)(9)(B); rather, they would 
apply at such time as any approved exemption extension expires and the 
refinery at issue seeks a further exemption extension. No further 
extension would be permitted unless the revised crude oil throughput 
specifications were satisfied.
    We received two comments on our proposed small refinery revisions, 
both supporting EPA's proposed change. After further consideration of 
this matter, we believe that the proposal could unfairly disqualify a 
refinery from eligibility for small refinery relief based only on a 
single year's production since 2006. We do not believe it would be 
appropriate to treat two refineries whose recent operating conditions 
were equivalent differently if one refinery exceeded 75,000 bpd in a 
single year as much as 8 years ago. Considering this concern and the 
intent in our proposal to treat similarly sized facilities the same, we 
are modifying the final rule to require that throughput be no greater 
than 75,000 barrels in the most recent full calendar year prior to an 
application for hardship. We will also clarify that a qualifying small 
refinery can't be projected to exceed the threshold in the year or 
years for which it is seeking an exemption. Production that exceeds the 
average aggregate 75,000 barrel per date limitation during an approved 
exemption period would invalidate the exemption. With these 
modifications, we believe we will better address our primary concern 
from proposal of treating refineries with similar performance the same. 
We believe that these changes reasonably implement the statutory 
definition of ``small refinery,'' which indicates that the 75,000 
barrel aggregate daily crude oil throughput is for ``a calendar year,'' 
but does not specify which calendar year should be the focus of 
inquiry. The final rule places the focus on the time period immediately 
prior to and during the desired exemption period, which we believe is 
most appropriate given the objectives of the provision.
2. Provisions for Small Blenders of Renewable Fuels
    The RFS regulations at Sec.  80.1440 allow renewable fuel blenders 
who handle and blend less than 125,000 gallons of renewable fuel per 
year, and who are not obligated parties or exporters, to delegate their 
RIN-related responsibilities to the party directly upstream from them 
who supplied the renewable fuel for blending. EPA has received feedback 
from several parties to the effect that the 125,000 threshold is too 
low and is a lower threshold than what industry considers ``small.'' 
EPA requested input on what a more appropriate gallon threshold should 
be.
    EPA received two comments supporting an increase in the threshold 
and one comment suggesting it remain at the current amount of 125,000 
gallons. Of the two commenters suggesting the amount should be 
increased, one suggested an increased amount of 250,000 gallons, and 
the other suggested an increased amount of 3 to 4 million gallons. 
Based on comments received from stakeholders previously and based on 
comments received on the proposed rule, EPA believes it is reasonable 
to increase the threshold for small blenders of renewable fuels (those 
that are not obligated parties or exporters) to help relieve burden 
from managing RINs. However, EPA is cautious not to increase the 
threshold beyond what is reasonable and beyond an amount that would be 
considered ``small.'' EPA generally agrees with one of the commenter's 
suggested amount of 250,000 gallons. Doubling the threshold from 
125,000 gallons to 250,000 gallons will provide additional relief to 
the smallest renewable fuel blenders. Therefore, EPA is adjusting the 
gallon threshold for small blenders of renewable fuels (and who are not 
obligated parties or exporters) that want to delegate their RIN-related 
responsibilities to the party directly upstream from them who supplied 
the renewable fuel for blending. The threshold is being changed from 
125,000 gallons to 250,000 gallons in today's final rule.
3. Changes to Sec.  80.1450--Registration Requirements
    EPA is adding a new paragraph (h) to Sec.  80.1450 that describes 
the circumstances under which EPA may deactivate a company registration 
and an administrative process to initiate a deactivation that provides 
any company the opportunity to respond to and/or timely submit the 
required information.

[[Page 42153]]

    EPA originally proposed deactivating a company registration where 
there had been no activity in EMTS for one calendar year (January 1 
through December 31). Commenters noted that there may be valid reasons 
for a break in use of EMTS within a calendar year. To avoid this 
scenario, EPA is modifying this provision to specify that if a company 
has reported no activity in EMTS under Sec.  80.1452 for twenty-four 
calendar months, then EPA will initiate this administrative process. In 
addition, for this particular circumstance, if a party responds within 
14 days of EPA notification of an intent to deactivate registration 
with a letter stating that they wish to remain as a current registered 
party, EPA will not deactivate their registration. If there is no 
response received, or the response does not indicate a desire to for 
the entity to remain actively registered, then EPA may deactivate the 
registration.
    EPA may also deactivate a company registration if a party fails to 
comply with any registration requirement of Sec.  80.1450, if the party 
fails to submit any required compliance report under Sec.  80.1451, if 
the party fails to meet the requirements related to EMTS under Sec.  
80.1452, or if the party fails to meet the requirements related to 
attest engagements under Sec.  80.1454. EPA will provide written notice 
to the owner or responsible corporate officer (RCO) that it intends to 
deactivate the company's registration and would allow the company 
fourteen (14) days from the date of the letter's issuance to correct 
the deficiencies noted or explain why there is no need for corrective 
action. If there is no satisfactory response received, then EPA may 
deactivate the registration. Reactivation will be possible following 
the submission or updating of all required information and reports.
4. Changes to Sec.  80.1452--EPA Moderated Transaction System (EMTS) 
Requirements--Alternative Reporting Method for Sell and Buy 
Transactions for Assigned RINs
    EPA proposed an alternative method for recording in EMTS the date 
of title transfer between the buyer and seller. Specifically, the 
parties involved in a trade of renewable fuel with assigned RINs would 
agree beforehand on using either the current methodology for 
determining the date of transfer or the parties would utilize a unique 
identifier and only the buyer would enter into EMTS the title transfer 
date.
    EPA is not finalizing this proposal at this time due to impacts on 
other systems functionality and processes. EPA may choose to pursue 
this proposal in a later rulemaking when we have sufficient resources 
to modify impacted systems.
5. Changes to Facility's Baseline Volume To Allow ``Nameplate 
Capacity'' for Facilities Not Claiming Exemption From the 20% GHG 
Reduction Threshold
    As a requirement of registration under the RFS program, each 
renewable fuel producer and foreign ethanol producer must establish and 
provide documents to support its facility's baseline volume as defined 
in Sec.  80.1401. This is either the permitted capacity or, if 
permitted capacity cannot be determined, the actual peak capacity of a 
specific renewable fuel production facility on a calendar year basis. 
After the promulgation of the March 26, 2010 RFS rule, we have received 
many requests from companies asking EPA to allow them to use their 
nameplate or ``design'' capacity to establish their facility's baseline 
volume due to either the facility being exempt from obtaining a permit, 
and thus not able to determine their permitted capacity, or the 
facility not starting operations, or not being operational for a full 
calendar year to produce actual production records to establish actual 
peak capacities. Because the regulations currently only allow a 
facility's baseline volume to be established by a limit stated in a 
permit or actual production records for at least one calendar year, 
facilities that had neither a permit or sufficient production records 
had difficultly registering under the RFS program. EPA proposed 
allowing use of nameplate capacity for registration, where permitted 
capacity or actual peak capacity could not be determined. There were no 
adverse comments regarding this proposal. Therefore, in this rulemaking 
we are finalizing our proposal to allow a facility to use its 
``nameplate capacity'' to establish its facility's baseline volume for 
the purposes of registration. The ``nameplate capacity'' may be used 
only if the facility (1) does not have a permit or there is no limit 
stated in the permit to establish their permitted capacity; (2) has not 
started operations or does not have at least one calendar year of 
production records; and (3) does not claim exemption from the 20 
percent GHG threshold under Sec.  80.1403. Due to the complexity of the 
exemption provision provided under Sec.  80.1403 and the added 
flexibility that facilities claiming this exemption are allotted under 
the program, we are finalizing our decision that the extension of this 
option not be available to facilities claiming an exemption under Sec.  
80.1403. Additionally, by this stage in the RFS program, the facilities 
that would qualify for registration under Sec.  80.1403 would be very 
few, if any. We are also finalizing the revision of the definition of 
baseline volume to include ``nameplate capacity,'' add a new definition 
for ``nameplate capacity'' to Sec.  80.1401, and include conforming 
amendments to the registration requirements of Sec.  80.1450. The 
amendments today will allow the initial registration of certain 
facilities using nameplate capacity, but EPA interprets the 
requirements for registration updates under 80.1450(d)(3)(i) and (ii) 
to require the calculation and submission of actual peak capacity as 
part of the registration updates required in those sections where the 
facility has operated for a sufficient time period to allow that 
calculation.
6. Changes to Sec.  80.1463--What penalties apply under the RFS 
program?
    Preventing the generation and use of invalid RINs and encouraging 
rapid retirement and replacement of invalid RINs is crucial to the 
integrity of the RFS program. The RFS regulations include various 
provisions related to prohibited acts, liability for violations, and 
penalties for those violations.
    Section 80.1460 sets forth the prohibited acts for the renewable 
fuels program. Section 80.1461(a) states that any person who violates a 
prohibition in Sec.  80.1460(a) through (d) is liable for the violation 
of that prohibition, and Sec.  80.1461(b) provides the liability 
provisions for failure to meet other provisions of the regulations. The 
penalty provisions of the regulations at Sec.  80.1463(a) state that 
any person who is liable for a violation under Sec.  80.1461 is subject 
to a civil penalty as specified in sections 205 and 211(d) of the Clean 
Air Act (CAA), for every day of each such violation and the amount of 
economic benefit or savings resulting from each violation. Section 
80.1463(c) provides that ``any person . . . is liable for a separate 
day of violation for each day such a requirement remains unfulfilled.''
    As described in the proposal, EPA interprets these statutory and 
regulatory penalty provisions to give the Agency the authority to seek 
penalties against parties generating, transferring or causing another 
person to generate or transfer invalid RINs for the day of the party's 
action and each day subsequent to the party's action that an invalid 
RIN is available for sale or use by a party subject to an obligation 
under the RFS program to acquire and retire RINs. For example, for a 
RIN generator, this time period typically runs from the date of invalid 
RIN generation until either effective corrective action is taken by

[[Page 42154]]

the RIN generator to remove the invalid RIN from the marketplace or a 
party uses the RIN to satisfy an RVO or other requirement to retire 
RINs. This is consistent with the CAA approach of assessing penalties 
for every day of a violation, consistent with EPA's historic approach 
under the fuels regulations (see Sec.  80.615), and will encourage 
renewable fuel producers that generate invalid RINs to promptly take 
corrective action.
    EPA received comments from two parties in opposition of the 
proposed regulation in Sec.  80.1463. Both commenters stated that RIN 
may be kept in another party's inventory outside of the generator's or 
transferor's control. Therefore, if that RIN is later identified as 
invalid the generator and transferor could be held to substantial 
penalties based on actions by other parties beyond their control. One 
of the commenters stated they believe that finalizing this regulation 
will ``cause confusion and may create disincentives for producers to 
self-report and take corrective actions, rather than promote 
compliance.'' While EPA acknowledges that the RIN generator or 
subsequent transferor cannot force another party to retire invalid 
RINs, the regulations at Sec.  80.1431(b)(1) state that ``Upon 
determination by any party that RINs owned are invalid, the party must 
. . . retire the invalid RINs in the applicable RIN transaction reports 
. . . for the quarter in which the RINs were determined to be 
invalid.'' Therefore, EPA believes that finalizing EPA's existing 
interpretation of per day violations for the generation or transfer of 
invalid RINs will minimize potential penalties and incentivize parties 
who committed a prohibited act at Sec.  80.1460 (b)(1)-(4) and (b)(6) 
to identify invalid RINs to those owning parties so they can retire 
RINs as required in Sec.  80.1431(b)(1) prior to an obligated party or 
renewable fuel exporter using those RINs for compliance purposes.
    One commenter stated that EPA should continue to use its 
enforcement discretion to assign appropriate penalties instead of 
finalizing this regulation. In the proposal, EPA explained that this 
regulation would simply codify our existing practice and interpretation 
and that we would continue to evaluate the appropriate penalties for 
each violation on a case by case basis. Although EPA is finalizing this 
regulation to make it clear to the regulated industry that EPA has the 
authority to seek the maximum statutory penalty for each day of 
violation, the Agency will continue to evaluate appropriate penalties 
on a case by case basis.
    As described above, EPA is finalizing the addition of the new 
paragraph (d) to Sec.  80.1463 which more explicitly incorporates EPA's 
interpretation of these penalty provisions into the regulations. The 
language has been modified from the proposal to follow the existing 
format and language in Sec.  80.1463. The amendments state that any 
person liable under Sec.  80.1461(a) for a violation of Sec.  
80.1460(b)(1)-(4) and (b)(6) for RIN generation or transfer violations 
is subject to a separate day of violation for each day that the invalid 
RIN remains available for use for compliance purposes, and EPA has the 
authority to seek the maximum statutory penalty for each day of 
violation.

F. Minor Corrections to RFS Provisions

    We are finalizing a number of corrections to address minor 
definitional issues that have been identified in implementing the RFS 
program.
    Renewable Biomass:
    We did not receive any significant comment on our proposed 
clarification to the definition ``renewable biomass'' in Sec.  80.1401 
and thus are finalizing proposed changes to make clear that biomass 
obtained in the vicinity of buildings means biomass obtained within 200 
feet of the buildings. The preamble for the March 26, 2010 RFS final 
rule cites the distance of 200 feet (see 75 FR 14696), but EPA did not 
include a reference to this value in the regulations. We believe doing 
so provides additional clarity to the regulations.
    ``Naphtha'':
    We did not receive any significant comment on our proposed 
clarification to the definition ``naphtha'' in Sec.  80.1401 and thus 
are finalizing the proposed changes to make clear that we consider 
naphtha a blending component of gasoline.
    English Language Translations:
    We received no significant comments on our proposed changes related 
to English language translations. Therefore, we are finalizing the 
addition of a new paragraph (i) to Sec.  80.1450 stating that any 
registration materials submitted to EPA must be in English or 
accompanied by an English language translation. Similarly, we are 
finalizing the addition of a new paragraph (h) to Sec.  80.1451, which 
states that any reports submitted to EPA must be in English or 
accompanied by an English language translation. We are also finalizing 
the addition of a new paragraph (q) to Sec.  80.1454, which states that 
any records submitted to EPA must be in English or accompanied by an 
English language translation. The translation and all other associated 
documents must be maintained by the submitting company for a period of 
five (5) years, which is already the established time period for 
keeping records under the existing RFS program.
    Correction of Typographical Errors:
    No comments were received on our proposed corrections to 
typographical errors, thus we are finalizing typographical and 
grammatical corrections in Sec.  80.1466 as proposed. Specifically, we 
are amending paragraph (o) to correct a typographical error in the last 
sentence of the affirmation statement, by changing the citation from 
Sec.  80.1465 to Sec.  80.1466. We are also amending paragraph 
(d)(3)(ii) to correct a typographical error. The current regulation 
cites Sec.  80.65(e)(2)(iii), which does not exist. The correct 
citation is Sec.  80.65(f)(2)(iii).

V. Amendments to the E15 Misfueling Mitigation Rule

    In the NPRM, we proposed several minor corrections and other 
changes to the E15 misfueling mitigation rule (E15 MMR) found at 40 CFR 
part 80, subpart N.

A. Changes to Sec.  80.1501--Label

    We proposed to correct several minor errors in the description of 
the E15 label required by the E15 MMR at Sec.  80.1501, including 
corrections in the dimensions of the label and ensuring that the word 
``ATTENTION'' is capitalized. The Agency intended the label required by 
the regulations to look identical to that pictured in the Federal 
Register notice for the final E15 MMR (see 76 FR 44406, 44418, July 25, 
2011), but there were some minor typographical errors in the 
regulations.
    We received a number of comments on the E15 label changes, and most 
were supportive of the corrections to the regulations to make the label 
consistent with the picture of the E15 label in the E15 MMR. However, 
some comments expressed concerns about the potential costs to retail 
stations already lawfully selling E15 with labels produced under the 
current regulations. We recognize this concern; however, we do not 
believe that this is an issue since EPA has worked closely with the 
limited number of retail stations that have lawfully offered E15 to 
date to ensure that their labels met the intent of the E15 MMR (i.e., 
were consistent with the label pictured in the E15 MMR).
    We also received several comments requesting that EPA make 
substantive changes to the E15 label (e.g., change the word 
``ATTENTION'' to ``WARNING''). The Agency thoroughly explained its 
rationale for its label

[[Page 42155]]

design in the E15 MMR and was not intending to make substantive changes 
to the E15 label in this rulemaking. We also received comments 
suggesting additional labeling requirements for blender pumps. We 
believe that these comments are outside of the scope of this 
rulemaking.
    Therefore, we are finalizing the changes to the E15 labeling 
regulations at Sec.  80.1501 as proposed.

B. Changes to Sec.  80.1502--E15 Survey

    We proposed two changes to the survey requirements found at Sec.  
80.1502. First, we proposed to clarify that E15 surveys need to sample 
for Reid vapor pressure (RVP) only during the high ozone season as 
defined in Sec.  80.27(a)(2)(ii) or during any time RVP standards apply 
in any state implementation plan approved or promulgated under the 
Clean Air Act. EPA did not intend to require RVP sampling and testing 
during the rest of the year, when RVP standards do not apply.
    Second, we proposed to change when the results of surveys that 
detect potential noncompliance must be reported to the Agency. As 
originally drafted, the regulations require the independent survey 
association conducting a survey to notify EPA of potentially 
noncompliant samples within 24 hours of the laboratory receiving this 
sample (see 76 FR at 44423, July 25, 2011). EPA has since learned that 
more time may be needed for reporting of noncompliant samples since it 
may take several days for analysis of the sample to be completed. We 
are therefore requiring that noncompliant samples be reported to EPA 
within 24 hours of being analyzed.
    Comments received on these two changes to the E15 survey 
requirements were overwhelmingly supportive. Therefore, EPA is 
finalizing the changes to the E15 survey requirements in Sec.  80.1502 
as proposed.

C. Changes to Sec.  80.1503--Product Transfer Documents

    In the NPRM, we proposed certain minor changes to the product 
transfer document (PTD) requirements found in Sec.  80.1503. 
Specifically, we proposed to allow the use of product codes for 
conventional blendstock/gasoline upstream of an ethanol blending 
facility, since historically, the codes have been allowed to be used 
for conventional blendstock/gasoline upstream of an ethanol blending 
facility in other fuels programs. We noted that this was an 
unintentional omission from the original regulation.
    Commenters unanimously supported including language that allowed 
the use of product codes for conventional blendstock/gasoline upstream 
of an ethanol blending facility. Some commenters pointed out that 
maintaining the current language allowing the use of product codes 
downstream of an ethanol blending facility did not make sense since 
product codes have not typically been used in that part of the gasoline 
distribution chain. Therefore, we are finalizing the flexibility for 
parties upstream of an ethanol blending facility to use product codes 
and removing the extraneous language for product code use downstream of 
an ethanol blending facility.
    We also received comment on whether this proposed change was in 
response to a petition for reconsideration from the American Fuel and 
Petrochemical Manufacturers (AFPM) (formerly the National Petroleum 
Refiners Association, or NPRA), which raised a number of questions 
regarding the E15 MMR PTD requirements.\98\ Today's regulatory change 
only addresses one of the questions that AFPM raised regarding the E15 
MMR PTD requirements in its petition. Today's action was not meant to 
address all of the questions raised by AFPM regarding the E15 MMR PTD 
requirements. It should be noted that most of the questions raised in 
AFPM's petition did not require changes to the regulations and were 
simply questions on the implementation and applicability of the E15 MMR 
requirements. For example, AFPM was unclear on what the wintertime PTD 
requirements for gasoline/blendstocks upstream of an ethanol blending 
facility are under the E15 MMR. These types of questions are typically 
addressed through guidance provided to affected parties (either 
directly or via guidance letters or the Fuels Program Frequent 
Questions Web page) and do not necessitate a change to our regulations. 
However, we may consider further changes to the E15 MMR PTD 
requirements in a future rulemaking that address some or all of the 
remaining questions raised in AFPM's petition for reconsideration.
---------------------------------------------------------------------------

    \98\ See September 15, 2011 letter from AFPM entitled, ``Request 
for Partial Reconsideration of EPA's ``Misfueling Rule'' 76 FR 44406 
(July 25, 2011),'' Docket EPA-HQ-OAR-2012-0401-0041.
---------------------------------------------------------------------------

    We also sought comment on potential ways of streamlining the PTD 
language required at Sec.  80.1503. We received one comment that 
suggested substantial changes to the PTD language requirements. For 
example, the commenter suggested removing most of the downstream RVP 
language requirements that were intended to inform retail stations of 
their summertime RVP requirements. The commenter pointed out that such 
a streamlining of the PTD requirements in the E15 MMR would 
significantly reduce compliance costs for industry. We feel that these 
suggested changes would significantly alter the PTD language in such a 
way that may no longer carry out our intent, which is to inform parties 
throughout the gasoline distribution chain all the way down to the 
retail station of their applicable regulatory requirements. Such 
changes are outside the scope of today's rulemaking, which includes 
only a minor technical change to the E15 MMR PTD requirements. 
Therefore, we are not finalizing such changes at this time. Although we 
are not engaging in a substantial streamlining of the PTD language 
required at Sec.  80.1503 in today's action, we may revisit the 
streamlining of E15 MMR PTD language in a future rulemaking.

D. Changes to Sec.  80.1504--Prohibited Acts

    In the NPRM, we proposed a slight rewording of Sec.  80.1504(g) to 
state that blending E10 that has taken advantage of the statutory 1.0 
psi RVP waiver during the summertime RVP control period with a 
gasoline-ethanol fuel that cannot take advantage of the 1.0 psi RVP 
waiver (i.e., a fuel that contains more than 10.0 volume percent 
ethanol (e.g., E15) or less than 9 volume percent ethanol) would be a 
violation of the E15 MMR. As originally written, the language does not 
clearly describe the prohibited activity (see 76 FR 44435, 44436, July 
25, 2011).
    We received no direct comments on this specific proposed change. We 
did, however, receive comments suggesting that we expand the prohibited 
activities language in Sec.  80.1504 to allow for the better 
enforcement of ethanol content requirements at blender pumps. The 
addition of new prohibited activities to Sec.  80.1504 is outside the 
intended scope of today's action. Therefore we are finalizing the 
slight rewording of the prohibited activities language of Sec.  
80.1504(g) as proposed.

E. Changes to Sec.  80.1500--Definitions

    In response to the August 17, 2011 petition for reconsideration 
submitted by NPRA, now AFPM, which requested the Agency, under CAA 
section 307(d)(7)(B), reconsider certain portions of the E15 MMR, we 
granted AFPM's petition for reconsideration on the issue of the 
definitions of E10 and E15 in the E15 MMR. AFPM expressed concern

[[Page 42156]]

that the Agency had defined E10 and E15 in the E15 MMR in a way that 
would change how ethanol concentrations are determined for regulatory 
purposes. While EPA did not intend the definitions of E10 and E15 in 
the E15 MMR to have this effect, we proposed changes to the regulations 
to avoid this perceived impact. Specifically, we proposed to add a new 
section, Sec.  80.1509, containing language that clearly states that 
when ethanol concentrations are measured for compliance testing 
purposes for 40 CFR part 80, subpart N, the applicable ethanol 
concentration value will be rounded using the rounding procedures at 
Sec.  80.9. We also proposed modifications to language throughout 40 
CFR part 80, subpart N, to better reflect our intentions in defining 
E10 and E15 in the E15 MMR, including a small revision to Sec.  
80.1508.
    Comments received on this issue generally supported EPA's approach 
to continue to allow the rounding of test results to determine whether 
fuel samples had adhered to applicable ethanol content samples under 
Sec.  80.9. One commenter suggested that EPA remove the remaining 
decimal points to make the point more clearly that rounding applied to 
the testing of fuels samples for ethanol content. Another commenter 
argued that making such a change would allow parties to manufacture 
gasoline-ethanol blended fuels containing more than 10 volume percent 
ethanol without taking appropriate measures to ensure that vehicles and 
engines not covered by the E15 partial waiver decisions were not 
misfueled by gasoline-ethanol blended fuels containing more than 10 
volume percent ethanol.
    We continue to believe that it is necessary to make our intent 
clear that parties that blend gasoline-ethanol blended fuels with more 
than 10 volume percent ethanol and up to 15 volume percent ethanol must 
adhere to the requirements for such fuels under the E15 MMR. Our 
approach will continue to enforce ethanol content standards as we have 
in the past, through the appropriate use of rounding procedures 
specified in the regulations under Sec.  80.9. We do not believe we 
need to remove the decimal points from the proposed regulatory text 
since we were careful to ensure that such language only appeared in 
places where the blending of gasoline-ethanol blended fuels containing 
greater than 10 volume percent ethanol would necessitate further action 
by the party manufacturing such fuel. Therefore, we are finalizing the 
changes to the definitions of the E15 MMR and the new language under 
Sec.  80.1509 as proposed. Additionally, in order to remain consistent 
with requirements for evidence used to determine compliance with 
requirements in other fuels programs, we are not finalizing the 
proposed changes to Sec.  80.1508, which covers the evidence 
responsible parties and the Agency can use to demonstrate compliance 
with E15 MMR requirements.

VI. Amendments to the Ultra Low Sulfur Diesel (ULSD) Survey

    In the NPRM, EPA proposed a reduction in the minimum sample size 
for the ULSD survey program from 5,250 annual samples to 1,800 
samples.\99\ We argued that compliance with the ULSD sulfur content 
standard has been extremely high; less than 1% of the samples have been 
in violation in recent years, and the use of the statistical formula in 
the regulations would result in a sampling rate of several hundred 
samples per quarter for each of the past several years, instead of 
5,250 samples required annually. The cost difference between taking 
several hundred samples a quarter versus taking over 5,000 samples 
annually is significant. For these reasons we believed that the high 
compliance rate and the substantial discrepancy between the sampling 
rate calculated by the formula in the regulations and the minimum 
sampling size justified our proposal of a minimum annual sampling rate 
of 1,800 samples.
---------------------------------------------------------------------------

    \99\ The ULSD rule includes a provision that deems branded 
refiners liable for violations of the ULSD sulfur standard that are 
found at retail outlets displaying the refiner's brand (40 CFR 
80.612). The regulations include defense provisions. One element of 
a branded refiner's defense to such violations is that it must have 
a periodic sampling and testing program at the retail level (40 CFR 
80.613(b) and (d)). The regulations also set forth an alternative 
sampling and testing defense element provision for branded refiners. 
This alternative defense element provision (40 CFR 80.613(e)) allows 
a branded refiner to meet the company-specific downstream periodic 
sampling and testing element of its defense by participating in a 
survey consortium that pays an independent surveyor to sample diesel 
fuel at retail outlets nationwide. The number of samples that are 
taken each year is determined by a statistical formula that is based 
in part on the previous year's compliance rate. In addition, the 
regulations set a floor of 5,250 samples that must be taken in an 
annual survey cycle regardless of the sample number that would be 
calculated using the regulatory formula.
---------------------------------------------------------------------------

    Public comments received on the proposed reduction in sampling rate 
were overwhelming supportive. Most comments suggested that EPA reduce 
the minimum sampling rate for the ULSD program to the proposed rate of 
1,800. However, some commenters suggested that we reduce the sample 
size even further. Consistent with most comments, we are finalizing the 
proposed rate of 1,800 samples per year. Since the program is based on 
conducting four quarterly surveys, only about 450 samples are collected 
to represent all retail stations offering diesel fuel, over 60,000 
stations, nationwide each quarter. A further reduction in the sample 
size may compromise the robustness of the survey program's ability to 
detect non-compliance, even taking into account today's high compliance 
rates. Although we acknowledge that a further reduction in the sample 
size could reduce costs even further, there is a point where the number 
of samples per year would be so few that the survey would be 
meaningless relative to robust sampling and testing programs conducted 
by each refiner individually. We feel that a rate of 1,800 samples 
strikes the correct balance of ensuring compliance with ULSD standards 
downstream while controlling costs for branded refiners that choose to 
utilize the ULSD survey program as an alternative affirmative defense.
    Additionally, one commenter, citing high costs, suggested that we 
remove the alternative affirmative defense altogether. It is important 
to note that participation in the consortium that conducts the ULSD 
survey is completely voluntary and the program provides each branded 
refiner an alternative to conducting individual downstream sampling and 
testing programs. We believe that as long as there is continued 
interested by some branded refiners to take advantage of the ULSD 
survey program alternative affirmative defense, we should maintain the 
flexibility to allow those parties the ability to conduct such a survey 
in lieu of individual downstream sampling and testing programs to 
establish an affirmative defense to potential downstream violations.
    Therefore, today we are reducing the minimum annual sampling size 
for the ULSD survey program from 5,250 samples to 1,800 samples. 
However, we will continue to closely monitor national ULSD compliance 
rates and branded refiner interest in maintaining the ULSD survey 
program to determine whether further reduction in sample sizes is 
necessary.

VII. Statutory and Executive Order Reviews

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

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is a

[[Page 42157]]

``significant regulatory action'' because it raises novel legal or 
policy issues. Accordingly, EPA submitted this action to the Office of 
Management and Budget (OMB) for review under Executive Orders 12866 and 
13563 (76 FR 3821, January 21, 2011) and any changes made in response 
to OMB recommendations have been documented in the docket for this 
action.

B. Paperwork Reduction Act

    The information collection requirements in this rule have been 
submitted for approval to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
Information Collection Request (ICR) document prepared by EPA has been 
assigned EPA ICR number 2469.01. A supporting statement for the ICR has 
been placed in the docket. The information collection is described in 
the following paragraphs. The following existing ICRs are being 
amended: OMB numbers 2060-0639, 2060-0637, 2060-0640, and 2060-0675).
    This action contains recordkeeping and reporting that may affect 
the following parties under the RFS regulation: RIN generators 
(producers, importers), obligated parties (refiners), exporters, and 
parties who own or transact RINs. We estimate that 670 parties may be 
subject to the information collection. We estimate an annual 
recordkeeping and reporting burden of 3.1 hours per respondent. This 
action contains recordkeeping and reporting that may affect the 
following parties under the E15 regulation: Gasoline refiners, gasoline 
and ethanol importers, gasoline and ethanol blenders (including 
terminals and carriers). We estimate that 2,000 respondents may be 
subject to the information collection. We estimate an annual 
recordkeeping and reporting burden of 1.3 hours per respondent. Burden 
means the total time, effort, or financial resources expended by 
persons to generate, maintain, retain, or disclose or provide 
information to or for a Federal agency. This includes the time needed 
to review the instructions; develop, acquire, install, and utilize 
technology and systems for the purpose of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transit or otherwise disclose the information. Burden is as defined 
at 5 CFR 1320.3(b).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR Part 9. When this ICR is 
approved by OMB, the Agency will publish a technical amendment to 40 
CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
final rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of this action on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The 
amendments to the RFS provisions in this final rule allow for 
additional opportunities for parties to participate in the RFS program 
by producing qualifying fuel if they choose to, clarify existing 
provisions, remove the possibility of exemptions for entities that are 
no longer small entities due to growth in their business, or make 
relatively minor corrections and modifications to these regulations. 
The various changes to the E15 misfueling mitigation regulations are 
relatively minor corrections and should not place any additional burden 
on small entities. The reduction in the required sample size for the 
voluntary ULSD survey program should reduce the burden of any small 
entity that elects to participate in the ULSD survey program.

D. Unfunded Mandates Reform Act

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and tribal 
governments, in the aggregate, or the private sector in any one year. 
We have determined that this action will not result in expenditures of 
$100 million or more for the above parties and thus, this rule is not 
subject to the requirements of sections 202 or 205 of UMRA.
    This rule is also not subject to the requirements of section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. It only applies to 
gasoline, diesel fuel, and renewable fuel producers, importers, 
distributors and marketers and makes relatively minor corrections and 
modifications to the RFS and diesel regulations.

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, as 
specified in Executive Order 13132. This action only applies to 
gasoline, diesel, and renewable fuel producers, importers, distributors 
and marketers. Thus, Executive Order 13132 does not apply to this 
action. In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicited comment on the proposed action 
from State and local officials.

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

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). It applies to 
gasoline, diesel fuel, and renewable fuel producers, importers, 
distributors and marketers. This action does not impose any enforceable 
duties on communities of Indian tribal governments. Tribal governments 
would be affected only to the extent they purchase and use regulated 
fuels. Although Executive Order 13175 does not apply to this action, 
EPA specifically solicited comment from tribal officials in developing 
this action.

[[Page 42158]]

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

    EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying 
only to those regulatory actions that concern health or safety risks, 
such that the analysis required under section 5-501 of the EO has the 
potential to influence the regulation. This action is not subject to EO 
13045 because it does not establish an environmental standard intended 
to mitigate health or safety risks.

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

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. This action amends existing regulations 
related to renewable fuel, E15, and ultra-low sulfur diesel. We have 
concluded that this rule is not likely to have any adverse energy 
effects. In fact, we expect this rule may result in positive effects, 
because many of the changes we are finalizing will facilitate the 
introduction of new renewable fuels under the RFS program and have come 
at the suggestion of industry stakeholders.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    The regulations permit the use of an analytical method certified by 
a voluntary consensus standard body in order for certain producers to 
comply with applicable registration requirements. Producers of 
renewable fuel made from energy cane and producers of renewable fuel 
made using two or more feedstocks converted simultaneously, when at 
least one of the feedstocks does not have a minimum 75% average 
adjusted cellulosic content, and at least one of which is a pathway 
producing RINs with a D code of 3 or a D code of 7 using a process 
described in Sec.  80.1426(f)(15)(i)(A) or Sec.  80.1426(f)(15)(i)(B), 
must obtain data used to calculate the cellulosic converted fraction 
using an analytical method certified by a voluntary consensus standards 
body or using a method that would produce reasonably accurate results 
as demonstrated through peer reviewed references provided to the third 
party engineer performing the engineering review at registration. The 
Agency therefore believes this rulemaking is consistent with the 
requirements of the NTTAA.

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

    Executive Order (EO) 12898 (59 FR 7629, February 16, 1994) 
establishes federal executive policy on environmental justice. Its main 
provision directs federal agencies, to the greatest extent practicable 
and permitted by law, to make environmental justice part of their 
mission by identifying and addressing, as appropriate, 
disproportionately high and adverse human health or environmental 
effects of their programs, policies, and activities on minority 
populations and low-income populations in the United States.
    EPA has determined that this rule will not have disproportionately 
high and adverse human health or environmental effects on minority or 
low-income populations because it does not affect the level of 
protection provided to human health or the environment. These technical 
amendments do not relax the control measures on sources regulated by 
the RFS regulations and therefore will not cause emissions increases 
from these sources.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A Major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective August 18, 2014.

L. Clean Air Act Section 307(d)

    This rule is subject to section 307(d) of the CAA. Section 
307(d)(7)(B) provides that ``[o]nly an objection to a rule or procedure 
which was raised with reasonable specificity during the period for 
public comment (including any public hearing) may be raised during 
judicial review.'' This section also provides a mechanism for the EPA 
to convene a proceeding for reconsideration, ``[i]f the person raising 
an objection can demonstrate to the EPA that it was impracticable to 
raise such objection within [the period for public comment] or if the 
grounds for such objection arose after the period for public comment 
(but within the time specified for judicial review) and if such 
objection is of central relevance to the outcome of the rule.'' Any 
person seeking to make such a demonstration to the EPA should submit a 
Petition for Reconsideration to the Office of the Administrator, U.S. 
EPA, Room 3000, William Jefferson Clinton Building, 1200 Pennsylvania 
Ave., NW., Washington, DC 20460, with a copy to both the person(s) 
listed in the preceding FOR FURTHER INFORMATION CONTACT section, and 
the Director of the Air and Radiation Law Office, Office of General 
Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave. NW., 
Washington, DC 20460.

VIII. Statutory Provisions and Legal Authority

    Statutory authority for this action comes from section 211 of the 
Clean Air Act, 42 U.S.C. 7545. Additional support for the procedural 
and compliance related aspects of this rule, including the 
recordkeeping requirements, comes from sections 114, 208, and 301(a) of 
the Clean Air Act, 42 U.S.C. 7414, 7542, and 7601(a).

List of Subjects in 40 CFR Part 80

    Environmental protection, Administrative practice and procedure, 
Agriculture, Air pollution control, Confidential business information, 
Energy, Forest and forest products, Fuel additives, Gasoline, Imports, 
Motor vehicle pollution, Penalties, Petroleum, Reporting and 
recordkeeping requirements.

[[Page 42159]]

    Dated: July 2, 2014.
Gina McCarthy,
Administrator.

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

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 I--[Amended]

0
2. Section 80.613 is amended by revising the ``Where'' statement 
defining the value of ``n'' in paragraph (e)(4)(v)(A) to read as 
follows:

Sec.  80.613  What defenses apply to persons deemed liable for a 
violation of a prohibited act under this subpart?

* * * * *
    (e) * * *
    (4) * * *
    (v) * * *
    (A) * * *

Where:

n = minimum number of samples in a year-long survey series. However, 
in no case shall n be larger than 9,600 or smaller than 1,800.

* * * * *

Subpart M--[Amended]

0
3. Section 80.1401 is amended as follows:
0
a. By adding the definitions of ``Adjusted cellulosic content'', 
``Agricultural digester,'' ``Nameplate capacity'', ``Renewable 
compressed natural gas'', and``Renewable liquefied natural gas'' in 
alphabetical order.
0
b. By revising the definitions of ``Biogas'', ``Crop residue'', 
``Energy cane'', ``Naphtha'', ``Renewable biomass'', and ``Small 
refinery''.

Sec.  80.1401  Definitions.

* * * * *
    Adjusted cellulosic content means the percent of organic material 
that is cellulose, hemicellulose, and lignin.
* * * * *
    Agricultural digester means an anaerobic digester that processes 
predominantly cellulosic materials, including animal manure, crop 
residues, and/or separated yard waste.
* * * * *
    Biogas means a mixture of hydrocarbons that is a gas at 60 degrees 
Fahrenheit and 1 atmosphere of pressure that is produced through the 
anaerobic digestion of organic matter.
* * * * *
    Crop residue means biomass left over from the harvesting or 
processing of planted crops from existing agricultural land and any 
biomass removed from existing agricultural land that facilitates crop 
management (including biomass removed from such lands in relation to 
invasive species control or fire management), whether or not the 
biomass includes any portion of a crop or crop plant. Biomass is 
considered crop residue only if the use of that biomass for the 
production of renewable fuel has no significant impact on demand for 
the feedstock crop, products produced from that feedstock crop, and all 
substitutes for the crop and its products, nor any other impact that 
would result in a significant increase in direct or indirect GHG 
emissions.
* * * * *
    Energy cane means a complex hybrid in the Saccharum genus that has 
been bred to maximize cellulosic rather than sugar content. For the 
purposes of this subpart:
    (1) Energy cane excludes the species Saccharum spontaneum, but may 
include hybrids derived from S. spontaneum that have been developed and 
publicly released by USDA; and
    (2) Energy cane only includes cultivars that have, on average, at 
least 75% adjusted cellulosic content on a dry mass basis.
* * * * *
    Nameplate capacity means the peak design capacity of a facility for 
the purposes of registration of a facility under Sec.  
80.1450(b)(1)(v)(C).
    Naphtha means a blendstock or fuel blending component falling 
within the boiling range of gasoline which is composed of only 
hydrocarbons, is commonly or commercially known as naphtha and is used 
to produce gasoline through blending.
* * * * *
    Renewable biomass means each of the following (including any 
incidental, de minimis contaminants that are impractical to remove and 
are related to customary feedstock production and transport):
    (1) Planted crops and crop residue harvested from existing 
agricultural land cleared or cultivated prior to December 19, 2007 and 
that was nonforested and either actively managed or fallow on December 
19, 2007.
    (2) Planted trees and tree residue from a tree plantation located 
on non-federal land (including land belonging to an Indian tribe or an 
Indian individual that is held in trust by the U.S. or subject to a 
restriction against alienation imposed by the U.S.) that was cleared at 
any time prior to December 19, 2007 and actively managed on December 
19, 2007.
    (3) Animal waste material and animal byproducts.
    (4) Slash and pre-commercial thinnings 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) that is 
not ecologically sensitive forestland.
    (5) Biomass (organic matter that is available on a renewable or 
recurring basis) obtained from within 200 feet of buildings and other 
areas regularly occupied by people, or of public infrastructure, in an 
area at risk of wildfire.
    (6) Algae.
    (7) Separated yard waste or food waste, including recycled cooking 
and trap grease, and materials described in Sec.  80.1426(f)(5)(i).
    Renewable compressed natural gas (CNG) means biogas or biogas-
derived pipeline quality gas that is compressed for use as 
transportation fuel and meets the definition of renewable fuel.
* * * * *
    Renewable liquefied natural gas (LNG) means biogas or biogas-
derived pipeline quality gas that goes through the process of 
liquefaction in which it is cooled below its boiling point, and which 
meets the definition of renewable fuel.
* * * * *
    Small refinery means a refinery for which the average aggregate 
daily crude oil throughput (as determined by dividing the aggregate 
throughput for the calendar year by the number of days in the calendar 
year) does not exceed 75,000 barrels.
* * * * *

0
4. Section 80.1415 is amended by revising paragraphs (b)(5) and (c)(1) 
to read as follows:

Sec.  80.1415  How are equivalence values assigned to renewable fuel?

* * * * *
    (b) * * *
    (5) 77,000 Btu (lower heating value) of compressed natural gas 
(CNG) or liquefied natural gas (LNG) shall represent one gallon of 
renewable fuel with an equivalence value of 1.0.
* * * * *
    (c) * * *
    (1) The equivalence value for renewable fuels described in 
paragraph (b)(7) of this section shall be calculated using the 
following formula:

[[Page 42160]]

EV = (R/0.972) * (EC/77,000)

Where:

EV = Equivalence Value for the renewable fuel, rounded to the 
nearest tenth.
R = Renewable content of the renewable fuel. This is a measure of 
the portion of a renewable fuel that came from renewable biomass, 
expressed as a fraction, on an energy basis.
EC = Energy content of the renewable fuel, in Btu per gallon (lower 
heating value).
* * * * *

0
5. Section 80.1416 is amended by revising paragraph (d) to read as 
follows:

Sec.  80.1416  Petition process for evaluation of new renewable fuels 
pathways.

* * * * *
    (d) A D code must be approved prior to the generation of RINs for 
the fuel in question. During petition review EPA will evaluate whether 
a feedstock meets the 75% cellulosic content threshold allowing 
cellulosic RINs to be generated for the entire fuel volume produced. 
The Administrator may ask for additional information to complete this 
evaluation.
* * * * *

0
6. Section 80.1426 is amended as follows:
0
a. By revising rows K, L, M, N, P, and Q of Table 1 to Sec.  80.1426.
0
b. By adding a new row T to Table 1 to Sec.  80.1426.
0
c. By revising paragraphs (f)(3)(vi), (f)(4)(i)(A)(2), (f)(5)(v), 
(f)(10), and (f)(11).
0
d. By adding new paragraphs (f)(15) and (f)(16).

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

* * * * *
    (f) * * *
    (1) * * *

         Table 1 to Sec.   80.1426--Applicable D Codes for Each Fuel Pathway for Use in Generating RINs
----------------------------------------------------------------------------------------------------------------
                                                                          Production process
                       Fuel type                 Feedstock                   requirements             D-Code
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
K.............  Ethanol...............  Crop residue, slash, pre-    Any process that converts                 3
                                         commercial thinnings and     cellulosic biomass to fuel.
                                         tree residue, switchgrass,
                                         miscanthus, energy cane,
                                         Arundo donax, Pennisetum
                                         purpureum, and separated
                                         yard waste; biogenic
                                         components of separated
                                         MSW; cellulosic components
                                         of separated food waste;
                                         and cellulosic components
                                         of annual cover crops.
L.............  Cellulosic diesel, jet  Crop residue, slash, pre-    Any process that converts                 7
                 fuel and heating oil.   commercial thinnings and     cellulosic biomass to fuel.
                                         tree residue, switchgrass,
                                         miscanthus, energy cane,
                                         Arundo donax, Pennisetum
                                         purpureum, and separated
                                         yard waste; biogenic
                                         components of separated
                                         MSW; cellulosic components
                                         of separated food waste;
                                         and cellulosic components
                                         of annual cover crops.
M.............  Renewable gasoline and  Crop residue, slash, pre-    Catalytic Pyrolysis and                   3
                 renewable gasoline      commercial thinnings, tree   Upgrading, Gasification
                 blendstock.             residue, and separated       and Upgrading, Thermo-
                                         yard waste; biogenic         Catalytic
                                         components of separated      Hydrodeoxygenation and
                                         MSW; cellulosic components   Upgrading, Direct
                                         of separated food waste;     Biological Conversion,
                                         and cellulosic components    Biological Conversion and
                                         of annual cover crops.       Upgrading utilizing
                                                                      natural gas, biogas, and/
                                                                      or biomass as the only
                                                                      process energy sources
                                                                      providing that process
                                                                      used converts cellulosic
                                                                      biomass to fuel; any
                                                                      process utilizing biogas
                                                                      and/or biomass as the only
                                                                      process energy sources
                                                                      which converts cellulosic
                                                                      biomass to fuel.
N.............  Naphtha...............  Switchgrass, miscanthus,     Gasification and upgrading                3
                                         energy cane, Arundo donax,   processes that converts
                                         and Pennisetum purpureum.    cellulosic biomass to fuel.
 
                                                  * * * * * * *
P.............  Ethanol, renewable      The non-cellulosic portions  Any........................               5
                 diesel, jet fuel,       of separated food waste
                 heating oil, and        and non-cellulosic
                 naphtha.                components of annual cover
                                         crops.
Q.............  Renewable Compressed    Biogas from landfills,       Any........................               3
                 Natural Gas,            municipal wastewater
                 Renewable Liquefied     treatment facility
                 Natural Gas,            digesters, agricultural
                 Renewable Electricity.  digesters, and separated
                                         MSW digesters; and biogas
                                         from the cellulosic
                                         components of biomass
                                         processed in other waste
                                         digesters.
 
                                                  * * * * * * *
T.............  Renewable Compressed    Biogas from waste digesters  Any........................               5
                 Natural Gas,
                 Renewable Liquefied
                 Natural Gas, and
                 Renewable Electricity.
----------------------------------------------------------------------------------------------------------------

[[Page 42161]]

* * * * *
    (3) * * *
    (vi) If a producer produces a single type of renewable fuel using 
two or more different feedstocks which are processed simultaneously, 
and each batch is comprised of a single type of fuel, then the number 
of gallon-RINs that shall be generated for a batch of renewable fuel 
and assigned a particular D code shall be determined according to the 
formulas in Table 4 to this section.
[GRAPHIC] [TIFF OMITTED] TR18JY14.002

Where:

VRIN,CB = RIN volume, in gallons, for use in determining 
the number of gallon-RINs that shall be generated for a batch of 
cellulosic biofuel with a D code of 3.
VRIN,BBD = RIN volume, in gallons, for use in determining 
the number of gallon-RINs that shall be generated for a batch of 
biomass-based diesel with a D code of 4.
VRIN,AB = RIN volume, in gallons, for use in determining 
the number of gallon-RINs that shall be generated for a batch of 
advanced biofuel with a D code of 5.
VRIN,RF = RIN volume, in gallons, for use in determining 
the number of gallon-RINs that shall be generated for a batch of 
renewable fuel with a D code of 6.
VRIN,CD = RIN volume, in gallons, for use in determining 
the number of gallon-RINs that shall be generated for a batch of 
cellulosic diesel with a D code of 7.
EV = Equivalence value for the renewable fuel per Sec.  80.1415.
VS = Standardized volume of the batch of renewable fuel 
at 60[emsp14][deg]F, in gallons, calculated in accordance with 
paragraph (f)(8) of this section.
FE3 = Feedstock energy from all feedstocks whose pathways 
have been assigned a D code of 3 under Table 1 to this section, or a 
D code of 3 as approved by the Administrator, in Btu.
FE4 = Feedstock energy from all feedstocks whose pathways 
have been assigned a D code of 4 under Table 1 to this section, or a 
D code of 4 as approved by the Administrator, in Btu.
FE5 = Feedstock energy from all feedstocks whose pathways 
have been assigned a D code of 5 under Table 1 to this section, or a 
D code of 5 as approved by the Administrator, in Btu.
FE6 = Feedstock energy from all feedstocks whose pathways 
have been assigned a D code of 6 under Table 1 to this section, or a 
D code of 6 as approved by the Administrator, in Btu.
FE7 = Feedstock energy from all feedstocks whose pathways 
have been assigned a D code of 7 under Table 1 to this section, or a 
D code of 7 as approved by the Administrator, in Btu.

    Feedstock energy values, FE, shall be calculated according to the 
following formula:

FE = M * (1 - m) * CF * E

Where:
FE = Feedstock energy, in Btu.
M = Mass of feedstock, in pounds, measured on a daily or per-batch 
basis.
m = Average moisture content of the feedstock, in mass percent.
CF = Converted Fraction in annual average mass percent, except as 
otherwise provided by Sec.  80.1451(b)(1)(ii)(U), representing that 
portion of the feedstock that is converted into renewable fuel by 
the producer.
E = Energy content of the components of the feedstock that are 
converted to renewable fuel, in annual average Btu/lb, determined 
according to paragraph (f)(7) of this section.

    (4) * * *
    (i) * * *
    (A) * * *
    (2) The value of FE for use in paragraph (f)(4)(i)(A)(1) of this 
section shall be calculated from the following formula:

FE = M * (1 - m) * CF * E

Where:

FE = Feedstock energy, in Btu.
M = Mass of feedstock, in pounds, measured on a daily or per-batch 
basis.
m = Average moisture content of the feedstock, in mass percent.
CF = Converted Fraction in annual average mass percent, except as 
otherwise provided by Sec.  80.1451(b)(1)(ii)(U), representing that 
portion of the feedstock that is converted into transportation fuel, 
heating oil, or jet fuel by the producer.
E = Energy content of the components of the feedstock that are 
converted to fuel, in annual average Btu/lb, determined according to 
paragraph (f)(7) of this section.

* * * * *
    (5) * * *
    (v) The number of cellulosic biofuel gallon-RINs that shall be 
generated for the cellulosic portion of a batch of renewable fuel 
derived from separated MSW as defined in paragraph (f)(5)(i)(C) of this 
section shall be determined according to the following formula:

VRIN = EV * VS * R

Where:

VRIN = RIN volume, in gallons, for use in determining the 
number of cellulosic biofuel gallon-RINs that shall be generated for 
the batch.
EV = Equivalence value for the batch of renewable fuel per Sec.  
80.1415.
VS = Standardized volume of the batch of renewable fuel 
at 60[emsp14][deg]F, in gallons, calculated in accordance with 
paragraph (f)(8) of this section.
R = The calculated non-fossil fraction of the fuel as measured by a 
carbon-14 dating test method as provided in paragraph (f)(9) of this 
section, except that for

[[Page 42162]]

biogas-derived fuels made from separated MSW, no testing is required 
and R = 1.

* * * * *
    (10)(i) For purposes of this section, electricity that is only 
distributed via a closed, private, non-commercial system is considered 
renewable fuel and RINs may be generated if all of the following apply:
    (A) The electricity is produced from renewable biomass and 
qualifies for a D code in Table 1 to this section or has received 
approval for use of a D code by the Administrator.
    (B) The RIN generator has documentation for the sale, if 
applicable, and use of a specific quantity of renewable electricity as 
transportation fuel, or has obtained affidavits from all parties 
selling or using the electricity as transportation fuel.
    (C) The electricity is used as a transportation fuel and for no 
other purposes.
    (ii) For purposes of this section, CNG or LNG produced from biogas 
that is only distributed via a closed, private, non-commercial system 
is considered renewable fuel for which RINs may be generated if all of 
the following apply:
    (A) The CNG/LNG is produced from renewable biomass and qualifies 
for a D code in Table 1 to this section or has received approval for 
use of a D code by the Administrator.
    (B) The RIN generator has entered into a written contract for the 
sale or use of a specific quantity of CNG/LNG to be used as 
transportation fuel, or obtained affidavits from all parties selling or 
using the CNG/LNG as transportation fuel.
    (C) The CNG/LNG is used as a transportation fuel and for no other 
purposes.
    (iii) A producer of electricity that is generated by co-firing a 
combination of renewable biomass and fossil fuel may generate RINs only 
for the portion attributable to the renewable biomass, using the 
procedure described in paragraph (f)(4) of this section.
    (11)(i) For purposes of this section, electricity that is 
introduced into a commercial distribution system (transmission grid) is 
considered renewable fuel for which RINs may be generated if all of the 
following apply:
    (A) The electricity is produced from renewable biomass and 
qualifies for a D code in Table 1 of this section or has received 
approval for use of a D code by the Administrator.
    (B) The RIN generator has documentation for the sale and use of a 
specific quantity of renewable electricity as transportation fuel, or 
has obtained affidavits from all parties selling or using the 
electricity as transportation fuel.
    (C) The quantity of electricity for which RINs were generated was 
sold for use as transportation fuel and for no other purpose.
    (D) The renewable electricity was loaded onto and withdrawn from a 
physically connected transmission grid.
    (E) The amount of electricity sold for use as transportation fuel 
corresponds to the amount of electricity derived from biogas that was 
placed into the commercial distribution system.
    (F) No other party relied upon the renewable electricity for the 
creation of RINs.
    (ii) For purposes of this section, CNG or LNG produced from biogas 
that is introduced into a commercial distribution system is considered 
renewable fuel for which RINs may be generated if all 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 received approval for use of a 
D code by the Administrator.
    (B) The RIN generator has entered into a written contract for the 
sale or use of a specific quantity of renewable CNG/LNG, taken from a 
commercial distribution system (e.g., physically connected pipeline, 
barge, truck, rail), for use as a transportation fuel, or has obtained 
affidavits from all parties selling or using the CNG/LNG taken from a 
commercial distribution system as a transportation fuel.
    (C) The quantity of CNG/LNG for which RINs were generated was sold 
for use as transportation fuel and for no other purposes.
    (D) The biogas/CNG/LNG was injected into and withdrawn from the 
same commercial distribution system.
    (E) The biogas/CNG/LNG that is ultimately withdrawn from the 
commercial distribution system for use as transportation fuel is 
withdrawn in a manner and at a time consistent with the transport of 
the biogas/CNG/LNG between the injection and withdrawal points.
    (F) The volume and heat content of biogas/CNG/LNG injected into a 
pipeline and the volume of biogas/CNG/LNG withdrawn to make a 
transportation fuel are measured by continuous metering.
    (G) The amount of fuel sold for use as transportation fuel 
corresponds to the amount of fuel derived from biogas that was placed 
into the commercial distribution system.
    (H) No other party relied upon the volume of biogas/CNG/LNG for the 
creation of RINs.
    (iii) For renewable electricity that is generated by co-firing a 
combination of renewable biomass and fossil fuel, the producer may 
generate RINs only for the portion attributable to the renewable 
biomass, using the procedure described in paragraph (f)(4) of this 
section.
* * * * *
    (15) Application of formulas in paragraph (f)(3)(vi) of this 
section to certain producers generating D3 or D7 RINs.
    (i) If a producer seeking to generate D code 3 or D code 7 RINs 
produces a single type of renewable fuel using two or more feedstocks 
converted simultaneously, and at least one of the feedstocks does not 
have a minimum 75% average adjusted cellulosic content, one of the 
following additional requirements apply:
    (A) If the producer is using a thermochemical process to convert 
cellulosic biomass into cellulosic biofuel, the producer is subject to 
additional registration requirements under Sec.  
80.1450(b)(1)(xiii)(A).
    (B) If the producer is using any process other than a 
thermochemical process, or is using a combination of processes, the 
producer is subject to additional registration requirements under Sec.  
80.1450(b)(1)(xiii)(B) and reporting requirements under Sec.  
80.1451(b)(1)(ii)(U).
    (ii) [Reserved]
    (16) Renewable fuel produced from crop residue. Producers 
generating RINs for qualifying renewable fuel utilizing crop residue as 
feedstock under Pathway K or Pathway L must meet all of the following 
conditions (in addition to any other applicable requirements):
    (i) Registration requirements under Sec.  80.1450(b)(1)(xv).
    (ii) Reporting requirements under Sec.  80.1451(b)(1)(ii)(V).
    (iii) Recordkeeping requirements under Sec.  80.1454(s).
* * * * *

0
7. Section 80.1440 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraph (a).
0
c. By revising paragraph (d).
0
d. By revising paragraph (e).

Sec.  80.1440  What are the provisions for blenders who handle and 
blend less than 250,000 gallons of renewable fuel per year?

    (a) Renewable fuel blenders who handle and blend less than 250,000 
gallons of renewable fuel per year, and who do not have one or more 
reported or unreported Renewable Volume

[[Page 42163]]

Obligations, are permitted to delegate their RIN-related 
responsibilities to the party directly upstream of them who supplied 
the renewable fuel for blending.
* * * * *
    (d) Renewable fuel blenders who handle and blend less than 250,000 
gallons of renewable fuel per year and delegate their RIN-related 
responsibilities under paragraph (b) of this section must register 
pursuant to Sec.  80.1450(e), and may not own RINs.
    (e) Renewable fuel blenders who handle and blend less than 250,000 
gallons of renewable fuel per year and who do not opt to delegate their 
RIN-related responsibilities, or own RINs, will be subject to all 
requirements stated in paragraph (b) of this section, and all other 
applicable requirements of this subpart M.
* * * * *

0
8. Section 80.1441 is amended by adding paragraph (e)(2)(iii) to read 
as follows:

Sec.  80.1441  Small refinery exemption.

* * * * *
    (e) * * *
    (2) * * *
    (iii) In order to qualify for an extension of its small refinery 
exemption, a refinery must meet the definition of ``small refinery'' in 
Sec.  80.1401 for the most recent full calendar year prior to seeking 
an extension and must be projected to meet the definition of ``small 
refinery'' in Sec.  80.1401 for the year or years for which an 
exemption is sought. Failure to meet the definition of small refinery 
for any calendar year for which an exemption was granted would 
invalidate the exemption for that calendar year.
* * * * *

0
9. Section 80.1450 is amended as follows:
0
a. By revising paragraph (b)(1)(ii).
0
b. By revising paragraphs (b)(1)(v)(C) and (b)(1)(v)(D), and by adding 
paragraph (b)(1)(v)(E).
0
c. By adding and reserving paragraph (b)(1)(xii).
0
d. By adding paragraphs (b)(1)(xiii) through (xv).
0
e. By adding paragraph (h).
0
f. By adding paragraph (i).

Sec.  80.1450  What are the registration requirements under the RFS 
program?

* * * * *
    (b) * * *
    (1) * * *
    (ii) A description of the facility's renewable fuel or ethanol 
production processes.
    (A) For registrations indicating production of cellulosic biofuel 
(D codes 3 or 7) from feedstocks other than biogas (including through 
pathways in rows K, L, M, and N of Table 1 to Sec.  80.1426), the 
producer must demonstrate the ability to convert cellulosic components 
of feedstock into fuel by providing all of the following:

    (1) A process diagram with all relevant unit processes labeled 
and a designation of which unit process is capable of performing 
cellulosic treatment, including required inputs and outputs at each 
step.
    (2) A description of the cellulosic biomass treatment process, 
including required inputs and outputs used at each step.
    (3) A description of the mechanical, chemical and biochemical 
mechanisms by which cellulosic materials can be converted to biofuel 
products.
    (B) [Reserved]

* * * * *
    (v) * * *
    (C)(1) For all facilities, copies of documents demonstrating each 
facility's actual peak capacity as defined in Sec.  80.1401 if the 
maximum rated annual volume output of renewable fuel is not specified 
in the air permits specified in paragraphs (b)(1)(v)(A) and 
(b)(1)(v)(B) of this section, as appropriate.
    (2) For facilities not claiming the exemption described in Sec.  
80.1403(c) or (d) which are exempt from air permit requirements and for 
which insufficient production records exist to establish actual peak 
capacity, copies of documents demonstrating the facility's nameplate 
capacity, as defined in Sec.  80.1401.
    (D) For all facilities producing renewable electricity or other 
renewable fuel from biogas, submit all relevant information in Sec.  
80.1426(f)(10) or (11), including:
    (1) Copies of all contracts or affidavits, as applicable, that 
follow the track of the biogas/CNG/LNG or renewable electricity from 
its original source, to the producer that processes it into renewable 
fuel, and finally to the end user that will actually use the renewable 
electricity or the renewable CNG/LNG for transportation purposes.
    (2) Specific quantity, heat content, and percent efficiency of 
transfer, as applicable, and any conversion factors, for the renewable 
fuel derived from biogas.
    (E) Any other records as requested by the Administrator.
* * * * *
    (xiii) (A) A producer of renewable fuel seeking to generate D code 
3 or D code 7 RINs, or a foreign ethanol producer seeking to have its 
product sold as cellulosic biofuel after it is denatured, who intends 
to produce a single type of fuel using two or more feedstocks converted 
simultaneously, where at least one of the feedstocks does not have a 
minimum 75% average adjusted cellulosic content, and who uses only a 
thermochemical process to convert feedstock into renewable fuel, must 
provide all the following:
    (1) Data showing the average adjusted cellulosic content of the 
feedstock(s) to be used to produce fuel, based on the average of at 
least three representative samples. Cellulosic content data must come 
from an analytical method certified by a voluntary consensus standards 
body or using a method that would produce reasonably accurate results 
as demonstrated through peer reviewed references provided to the third 
party engineer performing the engineering review at registration. 
Samples must be of representative feedstock from the primary feedstock 
supplier that will provide the fuel producer with feedstock subsequent 
to registration.
    (2) For producers who want to use a new feedstock(s) after initial 
registration, updates to their registration under paragraph (d) of this 
section indicating the average adjusted cellulosic content of the new 
feedstock.
    (3) For producers already registered as of August 18, 2014, to 
produce a single type of fuel that qualifies for D code 3 or D code 7 
RINs (or would do so after denaturing) using two or more feedstocks 
converted simultaneously using only a thermochemical process, the 
information specified in this paragraph (b)(1)(xiii)(A) shall be 
provided at the next required registration update under paragraph (d) 
of this section.
    (B) A producer of renewable fuel seeking to generate D code 3 or D 
code 7 RINs, or a foreign ethanol producer seeking to have its product 
sold as cellulosic biofuel after it is denatured, who intends to 
produce a single type of fuel using two or more feedstocks converted 
simultaneously, where at least one of the feedstocks does not have a 
minimum 75% adjusted cellulosic content, and who uses a process other 
than a thermochemical process or a combination of processes to convert 
feedstock into renewable fuel, must provide all the following:

    (1) The expected overall fuel yield, calculated as the total 
volume of fuel produced per batch (e.g., cellulosic biofuel plus all 
other fuel) divided by the total feedstock mass per batch on a dry 
weight basis (e.g., cellulosic feedstock plus all other feedstocks).
    (2) The cellulosic Converted Fraction (CF) that will be used for 
generating RINs under Sec.  80.1426(f)(3)(vi).
    (3) Chemical analysis data supporting the calculated cellulosic 
Converted Fraction and

[[Page 42164]]

a discussion of the possible variability that could be expected 
between reporting periods per Sec.  80.1451(b)(1)(ii)(U)(1). Data 
used to calculate the cellulosic CF must be representative and 
obtained using an analytical method certified by a voluntary 
consensus standards body, or using a method that would produce 
reasonably accurate results as demonstrated through peer reviewed 
references provided to the third party engineer performing the 
engineering review at registration.
    (4) A description and calculations showing how the data were 
used to determine the cellulosic Converted Fraction.
    (5) For producers already registered as of August 18, 2014, to 
produce a single type of fuel that qualifies for D code 3 or D code 
7 RINs (or would do so after denaturing) using two or more 
feedstocks converted simultaneously using a combination of processes 
or a process other than a thermochemical process, the information 
specified in this paragraph (b)(1)(xiii)(B) shall be provided at the 
next required registration update under paragraph (d) of this 
section.

    (xiv) For a producer of cellulosic biofuel made from energy cane, 
or a foreign renewable fuel producer making ethanol from energy cane 
and seeking to have it sold after denaturing as cellulosic biofuel, 
provide all of the following:

    (A) Data showing that the average adjusted cellulosic content of 
each cane cultivar they intend to use is at least 75%, based on the 
average of at least three representative samples of each cultivar. 
Cultivars must be grown under normal growing conditions and 
consistent with acceptable farming practices. Samples must be of 
feedstock from a feedstock supplier that the fuel producer intends 
to use to supply feedstock for their production process and must 
represent the feedstock supplier's range of growing conditions and 
locations. Cellulosic content data must come from an analytical 
method certified by a voluntary consensus standards body or using a 
method that would produce reasonably accurate results as 
demonstrated through peer reviewed references provided to the third 
party engineer performing the engineering review at registration.
    (B) Producers that want to change or add new cultivar(s) after 
initial registration must update their registration and provide EPA 
with data in accordance with paragraph (d) of this section 
demonstrating that the average adjusted cellulosic content for any 
new cultivar is at least 75%. Cultivars that do not meet this 
requirement are considered sugarcane for purposes of Table 1 to 
Sec.  80.1426.

    (xv) For a producer of cellulosic biofuel made from crop residue or 
a foreign renewable fuel producer making ethanol from crop residue and 
seeking to have it sold after denaturing as cellulosic biofuel, provide 
all the following information:

    (A) A list of all feedstocks the producer intends to utilize as 
crop residue.
    (B) A written justification which explains why each feedstock a 
producer lists according to paragraph (b)(1)(xv)(A) of this section 
meets the definition of ``crop residue'' per Sec.  80.1401.
    (C) For producers already registered as of August 18, 2014 to 
produce a renewable fuel using crop residue, the information 
specified in this paragraph (b)(1)(xv) shall be provided at the next 
required registration update under paragraph (d) of this section.

* * * * *
    (h) Deactivation of company registration. (1) EPA may deactivate a 
company's registration, using the process in paragraph (h)(2) of this 
section, if any of the following criteria are met:
    (i) The company has reported no activity in EMTS for twenty-four 
consecutive months.
    (ii) The company has failed to comply with the registration 
requirements of this section.
    (iii) The company has failed to submit any required report within 
thirty days of the required submission date under Sec.  80.1451.
    (iv) The attest engagement required under Sec.  80.1454 has not 
been received within thirty days of the required submission date.
    (2) EPA will use the following process whenever it decides to 
deactivate the registration of a company:
    (i) EPA will provide written notification to the responsible 
corporate officer identifying the reasons or deficiencies of why EPA 
intends to deactivate the company's registration. The company will have 
fourteen calendar days from the date of the notification to correct the 
deficiencies identified or explain why there is no need for corrective 
action.
    (ii) If the basis for EPA's notice of intent to deactivate 
registration is the absence of EMTS activity, a stated intent to engage 
in activity reported through EMTS will be sufficient to avoid 
deactivation of registration.
    (iii) If the company does not respond, does not correct identified 
deficiencies, or does not provide an adequate explanation regarding why 
such correction is not necessary within the time allotted for response, 
EPA may deactivate the company's registration without further notice to 
the party.
    (3) Impact of registration deactivation:
    (i) A company whose registration is deactivated shall still be 
liable for violation of any requirements of this subpart.
    (ii) A company whose registration is deactivated will not be listed 
on any public list of actively registered companies that is maintained 
by EPA.
    (iii) A company whose registration is deactivated will not have 
access to any of the electronic reporting systems associated with the 
renewable fuel standard program, including the EPA Moderated 
Transaction System (EMTS).
    (iv) A company whose registration is deactivated must submit any 
corrections of deficiencies to EPA on forms, and following policies, 
established by EPA.
    (v) If a company whose registration has been deactivated wishes to 
re-register, they may initiate that process by submitting a new 
registration, consistent with paragraphs (a) through (c) of this 
section.
    (i) Registration procedures. (1) Registration shall be on forms, 
and following policies, established by the Administrator.
    (2) English language registrations--Any document submitted to EPA 
under this section must be submitted in English, or shall include an 
English translation.

    10. Section 80.1451 is amended as follows:
0
a. By redesignating paragraph (b)(1)(ii)(U) as paragraph (b)(1)(ii)(W).
0
b. By adding a new paragraph (b)(1)(ii)(U).
0
c. By adding paragraph (b)(1)(ii)(V).
0
d. By adding and reserving paragraph (i).
0
e. By adding paragraph (j).

Sec.  80.1451  What are the reporting requirements under the RFS 
program?

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (U) Producers generating D code 3 or D code 7 RINs for fuel derived 
from feedstocks other than biogas (including through pathways listed in 
rows K, L, M, and N of Table 1 to Sec.  80.1426), and that was produced 
from two or more feedstocks converted simultaneously, at least one of 
which has less than 75% average adjusted cellulosic content, and using 
a combination of processes or a process other than a thermochemical 
process or a combination of processes shall report all of the 
following:

    (1) The cellulosic converted fraction as determined by 
collecting new representative process data and performing the same 
chemical analysis method accepted at registration. Producers shall 
calculate this information on an annual basis or within 10 business 
days of generating every 500,000 gallons of cellulosic biofuel, 
whichever is more frequent, and report quarterly. Reports shall 
include all values used to calculate feedstock energy according to 
Sec.  80.1426(f)(3)(vi). If new data shows that the cellulosic 
Converted Fraction is different than previously calculated, the 
formula used to generate RINs under Sec.  80.1426(f)(3) must be 
updated as soon as practical but no later than 5 business days after 
the producer

[[Page 42165]]

receives the updated data. If new testing data results in a change 
to the cellulosic Converted Fraction, only RINs generated after the 
new testing data were received, subject to the 5-day allowance, 
would be affected.
    (2) If the cellulosic Converted Fraction deviates from the 
previously calculated cellulosic Converted Fraction by 10% or more 
then the producer must notify EPA within 5 business days of 
receiving the new data and must adjust the formula used to generate 
RINs under Sec.  80.1426(f)(3) for all fuel generated as soon as 
practical but no later than 5 business days after the producer 
receives the new data. If new testing data results in a change to 
the cellulosic Converted Fraction, only RINs generated after the new 
testing data were received, subject to the 5-day allowance, would be 
affected.

    (V) Producers of renewable fuel using crop residue as a feedstock 
shall report all of the following according to the schedule specified 
in paragraph (f)(2) of this section:

    (1) The specific feedstock(s) utilized to produce renewable fuel 
under a pathway allowing the use of crop residue as feedstock.
    (2) The total quantity of each specific feedstock used to 
produce renewable fuel.
    (3) The total amount of qualifying renewable fuel produced under 
the crop residue pathway(s) in that quarter.

* * * * *
    (j) English language reports. Any document submitted to EPA under 
this section must be submitted in English, or shall include an English 
translation.

0
11. Section 80.1454 is amended as follows:
0
a. By revising paragraph (b)(4)(i).
0
b. By adding and reserving paragraph (b)(9).
0
c. By adding paragraph (b)(10).
0
d. By revising paragraph (f)(3)(i).
0
e. By revising paragraph (k)(1).
0
f. By adding and reserving paragraphs (q) and (r).
0
g. By adding a new paragraph (s).
0
h. By adding a new paragraph (t).

Sec.  80.1454  What are the recordkeeping requirements under the RFS 
program?

* * * * *
    (b) * * *
    (4) * * *
    (i) A list of the RINs owned, purchased, sold, separated, retired, 
or reinstated.
* * * * *
    (10) Records related to any volume of renewable fuel where RINs 
were not generated by the renewable fuel producer or importer pursuant 
to Sec.  80.1426(c).
* * * * *
    (f) * * *
    (3) * * *
    (i) A list of the RINs owned, purchased, sold, separated, retired, 
or reinstated.
* * * * *
    (k)(1) Biogas/CNG/LNG and electricity in pathways involving 
feedstocks other than grain sorghum. A renewable fuel producer that 
generates RINs for renewable CNG, renewable LNG or renewable 
electricity pursuant to Sec.  80.1426(f)(10) or (11), or that uses 
process heat from biogas to produce renewable fuel pursuant to Sec.  
80.1426(f)(12) shall keep all of the following additional records:
    (i) Documentation recording the sale of renewable CNG, renewable 
LNG or renewable electricity for use as transportation fuel relied upon 
in Sec.  80.1426(f)(10), Sec.  80.1426(f)(11), or for use of biogas for 
process heat to make renewable fuel as relied upon in Sec.  
80.1426(f)(12) and the transfer of title of the biogas/CNG/LNG or 
renewable electricity from the point of biogas production to the 
facility which sells or uses the fuel for transportation purposes.
    (ii) Documents demonstrating the volume and energy content of 
biogas/CNG/LNG, or kilowatts of renewable electricity, relied upon 
under Sec.  80.1426(f)(10) that was delivered to the facility which 
sells or uses the fuel for transportation purposes.
    (iii) Documents demonstrating the volume and energy content of 
biogas/CNG/LNG, or kilowatts of renewable electricity, relied upon 
under Sec.  80.1426(f)(11), or biogas relied upon under Sec.  
80.1426(f)(12) that was placed into the commercial distribution.
    (iv) Documents demonstrating the volume and energy content of 
biogas relied upon under Sec.  80.1426(f)(12) at the point of 
distribution.
    (v) Affidavits, EPA-approved documentation, or data from a real-
time electronic monitoring system, confirming that the amount of the 
biogas/CNG/LNG or renewable electricity relied upon under Sec.  
80.1426(f)(10) and (11) was used for transportation purposes only, and 
for no other purpose. The RIN generator shall obtain affidavits, or 
monitoring system data under this paragraph (k), at least once per 
calendar quarter.
    (vi) The biogas or renewable electricity producer's Compliance 
Certification required under Title V of the Clean Air Act.
    (vii) Any other records as requested by the Administrator.
* * * * *
    (s) Producers of renewable fuel using crop residue shall keep 
records of all of the following:

    (1) The specific crop residue feedstock(s) utilized to produce 
renewable fuel for each batch of renewable fuel produced.
    (2) The total quantity of each specific crop residue feedstock 
used for each batch.
    (3) Total amount of fuel produced under the crop residue pathway 
for each batch.

    (t) English language records. Any document requested by the 
Administrator under this section must be submitted in English, or shall 
include an English translation.

0
12. Section 80.1463 is amended by adding paragraph (d) to read as 
follows:

Sec.  80.1463  What penalties apply under the RFS program?

* * * * *
    (d) Any person liable under Sec.  80.1461(a) for a violation of 
Sec.  80.1460(b)(1) through (4) or (b)(6) is subject to a separate day 
of violation for each day that an invalid RIN remains available for an 
obligated party or renewable fuel exporter to demonstrate compliance 
with the RFS program.

Subpart N--[Amended]

0
13. Section 80.1500 is amended by revising the definitions of ``E10'', 
``E15'', and ``EX'' to read as follows:

Sec.  80.1500  Definitions.

* * * * *
    E10 means a gasoline-ethanol blend that contains at least 9 and no 
more than 10 volume percent ethanol.
    E15 means a gasoline-ethanol blend that contains greater than 10 
volume percent ethanol and not more than 15 volume percent ethanol.
    EX means a gasoline-ethanol blend that contains less than 9 volume 
percent ethanol where X equals the maximum volume percent ethanol in 
the gasoline-ethanol blend.
* * * * *

0
14. Section 80.1501 is amended as follows:
0
a. By revising the section heading.
0
b. By revising paragraph (a) introductory text.
0
c. By revising paragraphs (b)(3)(i), (b)(3)(iv), and (b)(4)(ii).

Sec.  80.1501  What are the labeling requirements that apply to 
retailers and wholesale purchaser-consumers of gasoline-ethanol blends 
that contain greater than 10 volume percent ethanol and not more than 
15 volume percent ethanol?

    (a) Any retailer or wholesale purchaser-consumer who sells, 
dispenses, or offers for sale or dispensing E15 shall affix the 
following conspicuous and legible label to the fuel dispenser:
* * * * *

[[Page 42166]]

    (b) * * *
    (3) * * *
    (i) The word ``ATTENTION'' shall be capitalized in 20-point, 
orange, Helvetica Neue LT 77 Bold Condensed font, and shall be placed 
in the top 1.25 inches of the label as further described in paragraph 
(b)(4)(iii) of this section.
* * * * *
    (iv) The words ``Use only in'' shall be in 20-point, left-
justified, black, Helvetica Bold font in the bottom 1.875 inches of the 
label.
* * * * *
    (4) * * *
    (ii) The background of the bottom 1.875 inches of the label shall 
be orange.
* * * * *

0
15. Section 80.1502 is amended as follows:
0
a. By revising paragraph (b)(1).
0
b. By revising paragraphs (b)(3)(iii)(A) and (b)(3)(iv) introductory 
text.
0
c. By revising paragraphs (b)(4)(iv)(B) and (b)(4)(v)(A).
0
d. By revising paragraphs (c)(4), (c)(6), and (c)(7).
0
e. By revising paragraphs (d)(3) and (d)(4).

Sec.  80.1502  What are the survey requirements related to gasoline-
ethanol blends?

* * * * *
    (b) * * *
    (1) To comply with the requirements under this paragraph (b), any 
gasoline refiner, gasoline importer, ethanol blender, ethanol producer, 
or ethanol importer who manufactures, introduces into commerce, sells 
or offers for sale E15, gasoline, blendstock for oxygenate blending, 
ethanol, or gasoline-ethanol blend intended for use in or as E15 must 
participate in a consortium which arranges to have an independent 
survey association conduct a statistically valid program of compliance 
surveys pursuant to a survey program plan which has been approved by 
EPA, in accordance with the requirements of paragraphs (b)(2) through 
(b)(5) of this section.
* * * * *
    (3) * * *
    (iii) * * *
    (A) Samples collected at retail outlets shall be shipped the same 
day the samples are collected via ground service to the laboratory and 
analyzed for oxygenate content. Samples collected at a dispenser 
labeled E15 in any manner, or at a tank serving such a dispenser, shall 
also be analyzed for RVP during the high ozone season defined in Sec.  
80.27(a)(2)(ii) or any SIP approved or promulgated under sections 110 
or 172 of the Clean Air Act. Such analysis shall be completed within 10 
days after receipt of the sample in the laboratory. Nothing in this 
section shall be interpreted to require RVP testing of a sample from 
any dispenser or tank serving it unless the dispenser is labeled E15 in 
any manner.
* * * * *
    (iv) In the case of any test that yields a result that does not 
match the label affixed to the product (e.g., a sample greater than 15 
volume percent ethanol dispensed from a fuel dispenser labeled as 
``E15'' or a sample containing greater than 10 volume percent ethanol 
and not more than 15 volume percent ethanol dispensed from a fuel 
dispenser not labeled as ``E15''), or the RVP standard of Sec.  
80.27(a)(2) or any SIP approved or promulgated under sections 110 or 
172 of the Clean Air Act, the independent survey association shall, 
within 24 hours after the laboratory has completed analysis of the 
sample, send notification of the test result as follows:
* * * * *
    (4) * * *
    (iv) * * *
    (B) In the case of any retail outlet from which a sample of 
gasoline was collected during a survey and determined to have an 
ethanol content that does not match the fuel dispenser label (e.g., a 
sample greater than 15 volume percent ethanol dispensed from a fuel 
dispenser labeled as ``E15'' or a sample with greater than 10 volume 
percent ethanol and not more than 15 volume percent ethanol dispensed 
from a fuel dispenser not labeled as ``E15'') or determined to have a 
dispenser containing fuel whose RVP does not comply with Sec.  
80.27(a)(2) or any SIP approved or promulgated under sections 110 or 
172 of the Clean Air Act, that retail outlet shall be included in the 
subsequent survey.
* * * * *
    (v) * * *
    (A) The minimum number of samples to be included in the survey plan 
for each calendar year shall be calculated as follows:
[GRAPHIC] [TIFF OMITTED] TR18JY14.003

Where:
n = Minimum number of samples in a year-long survey series.
    However, in no case shall n be smaller than 7,500.
Z[alpha] = Upper percentile point from the normal distribution to 
achieve a one-tailed 95% confidence level (5% [alpha]-level). Thus, 
Z[alpha] equals 1.645.
Z[beta] = Upper percentile point to achieve 95% power. Thus, Z[beta] 
equals 1.645.
[phis]1 = The maximum proportion of non-compliant 
stations for a region to be deemed compliant. In this test, the 
parameter needs to be 5% or greater, i.e., 5% or more of the 
stations, within a stratum such that the region is considered non-
compliant. For this survey, [phis]1 will be 5%.
[phis]o = The underlying proportion of non-compliant 
stations in a sample. For the first survey plan, [phis]o 
will be 2.3%. For subsequent survey plans, [phis]o will 
be the average of the proportion of stations found to be non-
compliant over the previous four surveys.
Stn = Number of sampling strata. For purposes of this 
survey program, Stn equals 3.
Fa = Adjustment factor for the number of extra samples 
required to compensate for collected samples that cannot be included 
in the survey, based on the number of additional samples required 
during the previous four surveys. However, in no case shall the 
value of Fa be smaller than 1.1.
Fb = Adjustment factor for the number of samples required 
to resample each retail outlet with test results exceeding the 
labeled amount (e.g., a sample greater than 15 volume percent 
ethanol dispensed from a fuel dispenser labeled as ``E15'', a sample 
with greater than 10 volume percent ethanol and not more than 15 
volume percent ethanol dispensed from a fuel dispenser not labeled 
as ``E15''), or a sample dispensed from a fuel dispenser labeled as 
``E15'' with greater than the applicable seasonal and geographic RVP 
pursuant to Sec.  80.27, based on the rate of resampling required 
during the previous four surveys. However, in no case shall the 
value of Fb be smaller than 1.1.
    Sun = Number of surveys per year. For purposes of 
this survey program, Sun equals 4.

* * * * *
    (c) * * *
    (4) The survey program plan must be sent to the following 
address: Director, Compliance Division, U.S. Environmental 
Protection Agency, 1200 Pennsylvania Ave. NW. Mail Code 6506J, 
Washington, DC 20460.
* * * * *
    (6) The approving official for a survey plan under this section 
is the Director of the Compliance Division, Office of Transportation 
and Air Quality.

[[Page 42167]]

    (7) Any notifications or reports required to be submitted to EPA 
under this section must be directed to the official designated in 
paragraph (c)(4) of this section.
    (d) * * *
    (3) For the first year in which a survey program will be 
conducted, no later than 15 days preceding the start of the survey 
EPA must receive a copy of the contract with the independent 
surveyor and proof that the money necessary to carry out the survey 
plan has either been paid to the independent surveyor or placed into 
an escrow account; if the money has been placed into an escrow 
account, a copy of the escrow agreement must to be sent to the 
official designated in paragraph (c)(4) of this section.
    (4) For subsequent years in which a survey program will be 
conducted, no later than December 15 of the year preceding the year 
in which the survey will be conducted, EPA must receive a copy of 
the contract with the independent surveyor and proof that the money 
necessary to carry out the survey plan has either been paid to the 
independent surveyor or placed into an escrow account; if placed 
into an escrow account, a copy of the escrow agreement must be sent 
to the official designated in paragraph (c)(4) of this section.
* * * * *

0
16. Section 80.1503 is amended as follows:
0
a. By revising paragraphs (a)(1)(vi)(B) and (a)(1)(vi)(C).
0
b. By revising paragraph (a)(2).
0
c. By adding paragraph (a)(3).
0
d. By revising paragraphs (b)(1)(vi)(B) through (D).

Sec.  80.1503  What are the product transfer document requirements for 
gasoline-ethanol blends, gasolines, and conventional blendstocks for 
oxygenate blending subject to this subpart?

    (a) * * *
    (1) * * *
    (vi) * * *
    (B) For gasoline designed for the special provisions for gasoline-
ethanol blends in Sec.  80.27(d)(2), information about the ethanol 
content and RVP in paragraphs (a)(1) through (a)(3) of this section, 
with insertions as indicated:
    (1) ``Suitable for the special RVP provisions for ethanol blends 
that contain between 9 and 10 vol % ethanol.''.
    (2) ``The RVP of this blendstock/gasoline for oxygenate blending 
does not exceed [Fill in appropriate value] psi.''.
    (3) ``The use of this blendstock/gasoline to manufacture a 
gasoline-ethanol blend containing anything other than between 9 and 10 
volume percent ethanol may cause a summertime RVP violation.''.
    (C) For gasoline not described in paragraph (a)(1)(vi)(B) of this 
section, information regarding the suitable ethanol content, stated in 
the following format: ``Suitable for blending with ethanol at a 
concentration of no more than 15 vol % ethanol.''.
    (2) The requirements in paragraph (a)(1) of this section do not 
apply to reformulated gasoline blendstock for oxygenate blending, as 
defined in Sec.  80.2(kk), which is subject to the product transfer 
document requirements of Sec. Sec.  80.69 and 80.77.
    (3) Except for transfers to truck carriers, retailers, or wholesale 
purchaser-consumers, product codes may be used to convey the 
information required under paragraph (a)(1) of this section if such 
codes are clearly understood by each transferee.
    (b) * * *
    (1) * * *
    (vi) * * *
    (B) For gasoline containing less than 9 volume percent ethanol, the 
following statement: ``EX--Contains up to X% ethanol. The RVP does not 
exceed [fill in appropriate value] psi.'' The term X refers to the 
maximum volume percent ethanol present in the gasoline.
    (C) For gasoline containing between 9 and 10 volume percent ethanol 
(E10), the following statement: ``E10: Contains between 9 and 10 vol % 
ethanol. The RVP does not exceed [fill in appropriate value] psi. The 1 
psi RVP waiver applies to this gasoline. Do not mix with gasoline 
containing anything other than between 9 and 10 vol % ethanol.''.
    (D) For gasoline containing greater than 10 volume percent and not 
more than 15 volume percent ethanol (E15), the following statement: 
``E15: Contains up to 15 vol % ethanol. The RVP does not exceed [fill 
in appropriate value] psi.''.
* * * * *

0
17. Section 80.1504 is amended by revising paragraphs (a)(1), (a)(3), 
(b) through (e), and (g) to read as follows:

Sec.  80.1504  What acts are prohibited under this subpart?

* * * * *
    (a)(1) Sell, introduce, cause or permit the sale or introduction of 
gasoline containing greater than 10 volume percent ethanol (i.e., 
greater than E10) into any model year 2000 or older light-duty gasoline 
motor vehicle, any heavy-duty gasoline motor vehicle or engine, any 
highway or off-highway motorcycle, or any gasoline-powered nonroad 
engines, vehicles or equipment.
* * * * *
    (3) Be prohibited from manufacturing, selling, introducing, or 
causing or allowing the sale or introduction of gasoline containing 
greater than 10 volume percent ethanol into any flex-fuel vehicle, 
notwithstanding paragraphs (a)(1) and (a)(2) of this section.
    (b) Sell, offer for sale, dispense, or otherwise make available at 
a retail or wholesale purchaser-consumer facility E15 that is not 
correctly labeled in accordance with Sec.  80.1501.
    (c) Fail to fully or timely implement, or cause a failure to fully 
or timely implement, an approved survey required under Sec.  80.1502.
    (d) Fail to generate, use, transfer and maintain product transfer 
documents that accurately reflect the type of product, ethanol content, 
maximum RVP, and other information required under Sec.  80.1503.
    (e)(1) Improperly blend, or cause the improper blending of, ethanol 
into conventional blendstock for oxygenate blending, gasoline or 
gasoline already containing ethanol, in a manner inconsistent with the 
information on the product transfer document under Sec.  
80.1503(a)(1)(vi) or (b)(1)(vi).
    (2) No person shall produce a fuel designated as E10 by blending 
ethanol and gasoline in a manner designed to produce a fuel that 
contains less than 9.0 or more than 10.0 volume percent ethanol.
    (3) No person shall produce a fuel designated as E15 by blending 
ethanol and gasoline in a manner designed to produce a fuel that 
contains less than 10.0 volume percent ethanol or more than 15.0 volume 
percent ethanol.
* * * * *
    (g) For gasoline during the regulatory control periods, combine any 
gasoline-ethanol blend that qualifies for the 1 psi allowance under the 
special regulatory treatment as provided by Sec.  80.27(d) applicable 
to 9-10 volume percent gasoline-ethanol blends with any gasoline 
containing less than 9 volume percent ethanol or more than 10 volume 
percent ethanol up to a maximum of 15 volume percent ethanol.
* * * * *

0
18. A new Sec.  80.1509 is added to subpart N to read as follows:

Sec.  80.1509  Rounding a test result for purposes of this subpart N.

    The provisions of Sec.  80.9 apply for purposes of determining the 
ethanol content of a gasoline-ethanol blend under this subpart.

[FR Doc. 2014-16413 Filed 7-17-14; 8:45 am]
BILLING CODE 6560-50-P