revise thereafter, regulations requiring compliance with 
the annual performance standards established under sec-
tion 703. 
‘‘(b) CALCULATIONS
OF GREENHOUSE EMISSION 
RATE PER BTU.— 
‘‘(1) 
INDIVIDUAL
CALCULATIONS
UNDER 
STANDARD METHODOLOGY.—The regulations under 
this section shall provide standard, transparent and 
public methods for each producer, importer, or 
blender of a fuel or other source of energy used, di-
rectly or indirectly, as a fuel for vehicles or aircraft 
to calculate the greenhouse gases emitted per Btu of 
such fuel or other source of energy when so used. 
‘‘(2) LIFECYCLE GREENHOUSE GAS EMISSION 
CALCULATION.—The regulations under this section 
shall include appropriate methods for estimating the 
lifecycle greenhouse gas emissions of each fuel and 
other energy source. For purposes of such regula-
tions, the Administrator shall develop methods to 
quantify the direct and indirect emissions resulting 
from biofuel production. 
‘‘(3) SPECIAL ADJUSTMENT FOR ELECTRICITY 
AND HYDROGEN.—In making the calculation under 
this subsection, the Administrator shall adjust the 
Btus of energy delivered from the use of electricity 
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and hydrogen used as a fuel or source of energy for 
vehicles and aircraft. Such adjustment shall reflect 
the greenhouse gas reductions on a per mile basis in 
order to reflect the inherent energy efficiency of an 
average battery electric, plug in hybrid electric vehi-
cle, or hydrogen fuel cell vehicle. 
‘‘(4) NAS REPORT.—The Administrator shall, 
not less than 90 days after the enactment of this 
Act, enter into a contract with the National Acad-
emy of Sciences to assess and recommend methods 
to calculate the lifecycle greenhouse gas emissions 
associated with the production and use of fuels and 
other sources of energy used as a fuel for vehicles 
and aircraft. 
‘‘(5) CONSULTATION.—In developing regula-
tions under this section, the Administrator shall con-
sult with State agencies and other government enti-
ties within and outside the United States having 
programs for control of greenhouse gas emissions 
from vehicle fuels and shall promulgate such regula-
tions after consideration of the report under para-
graph (4). 
‘‘SEC. 706. COMPLIANCE WITH STANDARD. 
‘‘(a) REQUIREMENT TO MEET STANDARD.—The reg-
ulations under this title shall provide that each producer, 
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importer or blender of a fuel or other source of energy 
used for transportation by vehicles or aircraft shall be re-
quired to generate or obtain in each calendar year after 
2009 credits equal to the excess, if any, of paragraph (1) 
over paragraph (2) multiplied by paragraph (3). No pro-
ducer, importer, or blender shall be required to obtain 
credits if the fuel or other source of energy meets the ag-
gregate performance standard under section 703 for the 
calendar year concerned. 
‘‘(1) The greenhouse gases (expressed as carbon 
dioxide or carbon dioxide equivalent) emitted per 
Btu of fuel or other energy produced, imported, or 
blended by such producer, importer, or blender in 
the calendar year concerned. 
‘‘(2) The aggregate performance standard for 
all such producers, importer, or blenders established 
under section 703 for the calendar year concerned. 
‘‘(3) The total number of Btus used in vehicles 
and aircraft that is provided by the fuel or other en-
ergy produced, imported, or blended by such pro-
ducer, importer or blender in the year concerned. 
‘‘(b) GENERATION, TRADING, AND BANKING
OF 
CREDITS.— 
‘‘(1) CREDIT GENERATION.—For each calendar 
year after the calendar year 2014, each producer, 
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importer, or blender of each fuel or other source of 
energy used for transportation by vehicles or aircraft 
shall be credited with greenhouse gas emission cred-
its equal to the excess, if any, of paragraph (2) of 
subsection (a) over paragraph (1) of subsection (a) 
multiplied by paragraph (3) of subsection (a). 
‘‘(2) TRADING.—The regulations under this 
section shall allow purchase, sale, and trading of 
such allowance producers, importers and blenders, 
and other persons. Credits generated this section 
may be held and traded by any person. Credits 
under this section do not constitute a property right, 
and nothing in any provision of law shall be con-
strued to limit the authority of the United States to 
terminate or limit any such credit. 
‘‘(3) BANKING.—Credits generated under this 
section may be used in the year in which they are 
generated and in the following calendar year. 
‘‘(c) MONITORING.—The Administrator shall promul-
gate rules to ensure that greenhouse gas emissions and 
the use of credits generated under this section are accu-
rately tracked, reported, and verified. 
‘‘(d) ENFORCEMENT.— 
‘‘(1) IN GENERAL.—If any fuel or other source 
of energy used, directly or indirectly, by vehicles ex-
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ceeds in any calendar year the standard established 
under this section and the producer, importer or 
blender thereof has not acquired credits to offset 
such excess, the producer, importer or blender shall 
pay a civil penalty in an amount determined under 
paragraph (2). 
‘‘(2) AMOUNT OF CIVIL PENALTY.—The amount 
of the civil penalty under this subsection shall be 
twice the market price for the credits that would be 
necessary for such producer, blender, or importer to 
meet the standard for the fuel or energy source con-
cerned. The Administrator shall establish the meth-
od of determining such market price. 
‘‘(3) NO DEMAND REQUIRED.—A civil penalty 
under this subsection shall be due and payable to 
the Administrator without demand. 
‘‘(4) CIVIL
ACTION.—The Administrator may 
bring a civil action in the appropriate United States 
district court to recover the amount of any civil pen-
alty due and payable under this subsection. 
‘‘SEC. 707. CERTIFICATION AND LABELING OF LOW-CARBON 
TRANSPORTATION FUELS. 
‘‘(a) IDENTIFICATION.—Not later than January 1, 
2009, the Administrator shall identify and label low-car-
bon transportation fuels based on the following criteria. 
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‘‘(1) The fuel is responsible for at least 20 per-
cent lower lifecycle greenhouse gas emissions per 
BTU delivered compared to the 2007 baseline. 
‘‘(2) The fuel is likely to have fewer adverse im-
pacts on wildlife habitat, biodiversity, water quality 
or air quality over the lifecycle of the fuel, than con-
ventional transportation fuels. 
‘‘(3) The fuel achieves reduction in petroleum 
content over its lifecycle. 
In the case of electric energy and hydrogen used, directly 
or indirectly, as a fuel or source of energy for vehicles, 
the Administrator shall apply the special adjustment fac-
tor referred to in section 705(b)(3) in identifying low-car-
bon transportation fuels. 
‘‘(b) CERTIFICATION.—Not later than January 1, 
2009, the Administrator shall establish a low-carbon fuel 
certification process to certify fuels that the Administrator 
has identified as low-carbon fuels, make that certification 
information available to consumers. Under regulations 
promulgated by the Administrator any person manufac-
turing, importing, or distributing low-carbon fuels may 
provide labeling for such fuels in accordance with regula-
tions promulgated by the Administrator and promote pub-
lic awareness of those fuels. 
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‘‘SEC. 708. FUEL SAFEGUARDS. 
‘‘(a) DEFINITIONS.—As used in this section: 
‘‘(1) The term ‘Community Fire Safety Zone’ 
means the immediate vicinity of buildings and other 
areas regularly occupied by people, or of infrastruc-
ture, at risk of wildfire. 
‘‘(2) The term ‘Ecosystem conversion’ means 
altering the native habitat to such an extent that it 
no longer supports most characteristic native species 
and ecological processes. 
‘‘(3) The term ‘native habitat’ means dynamic 
groupings of native plant and animal communities 
that occur together on the landscape or in the water 
and are tied together by similar ecological processes, 
underlying environmental features such as geology, 
or environmental gradients such as elevation, but 
does not include land that is currently in agricul-
tural production. 
‘‘(4) NATIONAL INTEREST LANDS.—The term 
‘National interest lands’ means areas designated as 
national wildlife refuges, national forests, or national 
grasslands, areas managed by the National Park 
Service (including national parks and monuments), 
and lands managed by the Bureau of Land Manage-
ment. 
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‘‘(5) The term ‘Community Fire Safety Zone’ 
means the immediate vicinity of buildings and other 
areas regularly occupied by people, or of infrastruc-
ture, at risk of wildfire. 
‘‘(6) The term ‘Sensitive Lands’ means old 
growth forests; roadless areas on national forests, 
wilderness study areas; native grasslands; intact, 
rare, threatened or endangered ecosystems; and any 
area containing significant concentrations of bio-
diversity values including endemism, endangered 
species, high species richness, and refugia. 
‘‘(b) IN GENERAL.—Under regulations of the Admin-
istrator, no transportation fuel sold in interstate com-
merce after January 1, 2010 may be derived all or in part 
from biomass from the following sources: 
‘‘(1) Lands where the Administrator determines 
that ecosystem conversion has occurred after the 
date of the enactment of this Act. 
‘‘(2) Sensitive Lands. 
‘‘(3) Land enrolled in the Conservation Reserve 
Program established under subchapter B of chapter 
1 of subtitle D of title XII of the Food Security Act 
of 1985 (16 U.S.C. 3831 et seq.) or the wetlands re-
serves program established under subchapter C of 
chapter 1 of subtitle D of title XII of the Food Se-
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