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FEDERAL REGISTER Vol. 79 No. 138 Friday, July 18, 2014 P a rtili Environmental Protection Agency 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 Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00001 42128 Federal Register/ Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 80 [EPA-H Q-OAR-2012-0401; FRL-9910-40OAR] 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: Environm ental Protection Agency iKPAL ACTION: Final rule, SUMMARY: In this final rulem aking, the Environm ental 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 w ith 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 num ber of RFS program regulations that define terms or address registration, recordkeeping, and reporting requirements. EPA is also making various changes to the m isfueling m itigation regulations for gasoline that contains greater than 10 volume percent ethanol and no more than 15 volum e percent ethanol (E15) and to the survey requirements associated with the ultra-low sulfur diesel program, DATES: This rule is effective A ugust 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: m anger.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 pream ble, 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 requirem ents for determining the number of cellulosic biofuel Renewable Identification Numbers (RINs) that w ill 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 w ill qualify for cellulosic RINs when this rule becomes effective. The approval of these new cellulosic pathways could have an im pact on EPA's projection of 2014 cellulosic biofuel volumes in the final 2014 RFS standards rulemaking. EPA rioted 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 num ber of RFS program regulations that define terms or address registration, recordkeeping, or reporting requirements. These include am endm ents related to; (1) Use of crop residue and corn kernel fiber as renew able 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 w hat penalties apply under the RFS program. EPA is also making various changes to the E l5 misfueling mitigation regulations (El 5 MMR) at 40 CFR part 80, subpart N. Among the E l 5 changes are technical corrections and am endm ents to sections dealing with labeling, E15 surveys, product transfer docum ents, and prohibited acts. We also 1 78 FR 71732, N ovem ber 29, 2013. amend the definitions of E10 and E l5 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 m anner that reduces the num ber of samples required. This will reduce costs and burdens associated with compliance for regulated parties, w ith 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 "p roducer" for renewable CNG/LNG and renewable electricity from biogas sources, the definition of responsible corporate officer, or the proposed am endm ents to compliance related provisions for the alternative reporting method in 80.1452. The Agency is deferring the final decision on these matters until a later time. This preamble follows the following outline: I. E xecutive Sum m ary II. W hy is EPA taking this action? III. Does this action ap p ly to me? IV. Renew able Fuel S tandard (RFS) Program Amendments A, R enew able Identification N um ber (RIN) Generation for Fuels Made From Feedstocks Containing Cellulosic B iom ass 1. Background 2. The C ellulosic Content Threshold A pproach and its A pplication to Cellulosic Feedstocks C urrently Listed in Table 1 to 40 CFR 80.1426 3. C om pliance R equirem ents for Producers of C ellulosic Biofuel M ade From Feedstocks That are not Predom inantly C e llu lo sic 4. Testing, Registration, Reporting and Recordkeeping R equirem ents for Cellulosic Biofuel a. A dditional Registration Requirem ents for C ertain P ro d u cers Seeking to G enerate C ellulosic Biofuel RINs 2 78 FR 36042, June 14, 2013. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00002 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42129 h. A dditional Registration Requirements for Renewable Fuel Produced From Energy Cane c. A dditional Registration, Recordkeeping, and Reporting R equirem ents for Producers of C ellulosic Fuels Derived From the Sim ultaneous Conversion of Feedstocks That are Predom inantly Cellulosic and Feedstocks That are Not Predom inantly Cellulosic: 5. D eterm ining the Average A djusted C ellulosic C ontent of Feedstocks Going Forw ard 6. O ther Com m ents Received a. Treatm ent of C ellulosic Feedstocks C urrently Listed in Table 1 to 40 CFR 80:1426 b. Feedstocks W ith Lower Average Cellulosic Content Than Feedstocks C urrently Listed in Table 1 to 80.1426 B. Lifecycle G reenhouse Gas Em issions Analysis and Cellulosic D eterm inations for Pathw ays Using Biogas as a Feedstock 1. Changes A pplicable to the Revised CNG/ LNG Pathw ay From Biogas 2. D eterm in atio n of the C ellulosic C ontent of Biogenic W aste-Derived Biogas a. Landfill Biogas and MSW Digester Biogas as C ellulosic in Origin h. M unicipal W astewater Treatm ent Facility Digester Biogas as Cellulosic c. A gricultural Digester Gas as Cellulosic d. Biogas From W aste Digesters 3. C onsideration of Lifecycle GHG Em issions A ssociated W ith Biogas P ath w ay s a. Upstream GHG A nalysis of Biogas as a Renewable Fuel or Fuel Feedstock h. Flaring Baseline Justification c. Lifecycle GHG Analysis for Electricity From Biogas 4. A lternative Biogas O ptions and C om m ents a. Alternative Baseline A pproaches b. A dditional Com ments on Lifecycle Analysis for Renewable Electricity C. Regulatory A m endm ents Related to Biogas 1. C hanges A p p lica b le to R enew able Electricity From Biogas Sources a. Registration and RIN G eneration Requirem ents b. D istribution and Tracking Requirements 2. R egulatory C hanges A p p lica b le to A ll Biogas Related Pathways D. C larification of th e D efinition of "Crop Residue" and Clarification of Feedstocks That EPA Considers Crop Residues 1. C larification of the D efinition of " Crop R esid u e" 2. C o n sid eratio n of Corn K ernel F iber as a Crop Residue a. Analysis of Corn Kernel Fiber as a Crop R esid u e b. Treatm ent of Corn Starch That Adheres to Corn K ernel Fiber A fter Separation From DDG c. Processing Corn Kernel Fiber 3. Id e n tifica tio n of F eedstocks EPA Considers Crop Residues 4. Registration, Recordkeeping, and Reporting Requirem ents Associated W ith Using Crop Residue as a Feedstock a. Registration Requirem ents for Producers Utilizing Crop Residue as a Feedstock b. Recordkeeping and Reporting Requirem ents for Producers Utilizing Crop Residue as a Feedstock E. A m en d m en ts to V arious RFS Com pliance Related Provisions 1. C hanges to D efinitions 2. P rovisions for Sm all B lenders of Renewable Fuels 3. C hanges to 80:3450--R egistration Req uirem ents 4. Changes to 80.1452--EPA M oderated T ransaction System (EMT3) Requirem ents--A lternative Reporting M ethod for Sell and Buy Transactions for A ssigned RINs 5. C hanges to F a c ility 's B aseline V olum e to Allow "Nam eplate C apacity" for Facilities not Claiming Exem ption From the 20% GHG Reduction Threshold 6. C hanges to 80.1463--W hat P enalties A pply U nder the RFS Program? F. M inor Corrections to RFS Provisions V. A m e n d m e n ts to the E15 M isfueling M itigation Rule A. C hanges to 8 0 .1 5 0 1 -- Label B. C hanges to 80 :1 5 0 2 --E15 S urvey C. C hanges to 80.1503--P ro d u c t T ransfer D ocum ents D. C hanges to 80.1504--P ro h ib ite d Acts E. C hanges to 8 0 .1 5 0 0 --D efinitions VI. A m e n d m e n ts to the U ltra Low S ulfur Diesel (ULSD) Survey VII. Statutory an d Executive O rder Reviews A. Executive O rder 12866: Regulatory Planning and Review and Executive O rder 13563: Im proving Regulation and Regulatory Review B. Paperw ork R eduction Act C. Regulatory Flexibility Act D. U n fu n d e d M andates Reform A ct E. Executive O rder 13132 (Federalism ) F. Executive O rder 13175 (Consultation and C oordination W ith Indian Tribal G overnm ents) G. E xecutive O rd er 13045: P ro tectio n of Children fro m Environm ental Health Risks and Safety Risks H. Executive O rder 13211: Actions Concerning Regulations That Significantly Affect Energy Supply. Distribution, or Use I. N atio n al T echnology T ransfer a n d Advancem ent Act J. E xecutive O rder 12898: F ed eral A ctions to A ddress E nvironm ental Justice in M inority Populations and Low-Income Populations. K. C ongressional R eview A ct L. Clean A ir Act Section 307(d) VIII. Statutory Provisions and Legal A uthority 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 m itigation for 15 volume percent (%) ethanol blends (E15) (40 CFR part 80, subpart N) to assist regulated parties in complying with RFS and E l5 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: Category NAICS Codes SIC Codes b Examples of potentially regulated parties Industry ...... ......................... ........... . Industry .............................................. Industry ....... ........... ........... ........... . Industry .............................................. Industry ...... ......................... ........... . Industry .............................................. Industry ....... ........... ........... ........... . Industry .............................................. Industry ...... ......................... ........... . Industry .............................................. Industry ....... ........... ........... ........... . Industry .............................................. 324110 325193 325199 424690 424710 424720 454310 486210 221117 562212 562219 221320 a North American industry Classification System (NACS). b Standard industrial Classification (SIC) system code. 2911 2869 2869 5169 5171 5172 5989 4922 4911 4953 4953 4952 Petroleum refiners, importers. Ethyl alcohol manufacturers. Other basic organic chemical manufacturers. Chemical and allied products merchant wholesalers. Petroleum bulk stations and terminals. Petroleum and petroleum products merchant 'wholesalers. Fuel dealers. Pipeline Transportation of Natural Gas. Biomass Electric Power Generation. Solid Waste Landfill. Other Nonhazardous Waste Treatment and Disposal. Sewage Treatment Facilities. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00003 42130 Federal Register/ Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 1, 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 num ber of RFS program regulations. A. Renewable Identification Number (BIN) 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 w ithin 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. W ien this occurs, biofuel producers must ascertain w hat type of R1N 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 predom inantly of cellulosic co n te n t3 (e.g., fuel made from the biogenic portion of separated m unicipal 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 m andate 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 "predom inantly" 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 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 EPA solicited comment in the Notice of Proposed Rulemaking (NPRM) on several alternative approaches, 3For purposes of tills pream ble, "cellulosic co n ten t" m eans cellulose, hern.icel.lulose, and lignin. 4 75 FR 14670, 14706. in the M arch 2010 RFS rulem aking, EPA determ ined, in certain c irc u m stan c e s, it is a p p ro p ria te for p ro d u c e rs to base RIN assignm ent on the predom inant com ponent. 5 78 FR 36042, 36047. 6EPA in clu d ed in the docket for the N otice of Proposed R ulem aking a M em orandum to the Docket, entitled "Cellulosic Content of Various Feedstocks--2014 U pdate," available in docket EPA-HQ-O A .R-2012-0401. This m em orandum discusses the cellulosic content of various feedstocks, including m ost of the cellulosic feedstocks listed in cellulosic biofuel pathw ays in Table 1 to 40 CFR 80.1426. The m em orandum notes th at tire average ad ju sted cellulosic content of these feedstocks is at least 75%. Because of the high degree of natural variability in biom ass, average adjusted cellulosic contents are likely more m eaningful than any single value reported, because no single value can reflect the com positional range and variability present. 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 w ould 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 im plem ent it for feedstocks used in cellulosic biofuel pathways listed in Table 1 to 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 m inim um 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 w ould 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 (nonash) material that is cellulose, hem icellulose, or lignin.7 Consistent with previous precedents permitting assignm ent of a single RIN value to fuel produced predom inantly 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 7 Further details about this determ ination can be found in the M nniorandum to the Docket, "Cellulosic Content of V arious Feedstocks--2014 U p d a te ," availab le in d ocket EPA-TTQ--O AR--2012-- 0401. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00004 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 8G.'1426(f)(5)(i)(A), and for the biogenic portion of fuel m ade from separated MSW, see 75 FR 14706 and 40 CFR 80.1426(f)(5)(v), other than to clarify that the testing requirem ent 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 w hich do not meet the m inimum 75% threshold, but which contain some level of cellulosic material, will be eligible to generate both cellulosic and noncellulosic RINs using the apportionm ent methods described below. 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 dem onstrated to contain an average adjusted cellulosic content of at least 75%. Fuel made through cellulosic biofuel pathw ays from feedstocks meeting the new definition of energy cane are eligible for cellulosic biofuel RINs for the entire fuel volume. Annua] 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 "noncellulosic components of annual cover crops," w hich w ill 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 w ith the statutory definition of cellulosic biofuel, as EPA indicated in the NPKM, and satisfies the objective identified in the proposed rule of allowing fuels made from feedstocks that are "predom inantly" cellulosic to generate cellulosic biofuel RINs for their entire fuel volume. A threshold of 75% also allows fuel made from all predom inantly cellulosic feedstocks to generate RINs for their entire fuel volume, consistent w ith 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 prom ote cellulosic biofuel production, consistent with Congressional objectives. This final rule w ill help to ensure that cellulosic RINs are in fact only generated for fuels derived predom inantly 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 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 w ithout this m odifier 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 em ployed 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 m ust convert the cellulosic com ponents of feedstock into biofuel. The effect is that cellulosic RINs may only he generated w hen a production process is em ployed 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 predom inantly composed of cellulosic com ponents 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 w hether 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 m aterial in the renewable biomass, and today's rule adopts a common-sense approach to the matter that allows fuel made from predom inantly cellulosic feedstocks to qualify as cellulosic biofuel. 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 m inim um 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 requirem ents.10*Feedstocks w hich do not meet or exceed a 75% m inimum 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 m ultipurpose feedstocks for the production of fuels that are qualified for cellulosic RINs, in lieu of the feedstocks Comments p ro v id e d b y A FPM /A FI (E PA -PIQ O A R -2012--0 4 0 1 -0 1 2 8 ) and C h ev ro n (EPA-HQ-OAR--2 0 1 2 -0 4 0 1 --0171). 9EPA has previously considered instances w here fuel w ould generate cellulosic biofuel RINs even if produced front feedstocks containing both cellulosic and non-cellulosic m aterials. In the M arch 201.0 EFS ru le m a k in g . EPA d e te rm in e d that biofuel from separated yard w aste qualified as cellulosic and w ould generate cellulosic RINs because separated yard w aste was " largely cellu lo sic ." 75 FR 14794, M arch 26. 2010. 10 A ll fu el th a t qualifies for c ellu lo sic b io fu e l RINs m ust achieve a m inim um 60% lifecycle greenhouse gas em issions redu ctio n as com pared to baseline fuels, even if som e p o rtio n of the fuel is derived from non-cellulosic materials. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00005 42132 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations with a higher celluiosic content that Congress envisioned w ould he 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 predom inantly celluiosic feedstocks.11 EPA believes that the 75% threshold strikes a reasonable balance among these considerations, while remaining consistent with the statutory definition of celluiosic biofuels and past regulatory approaches that EPA has taken for specified feedstocks. While arguments could be made for other num eric values, EPA believes that a rational basis exists for settling on 75%, as explained in this rule, and is w ithin EPA's exercise of discretion to reasonably interpret the CAA. EPA believes that the 75% threshold, w hich is well over a 50% or `'m ajority" value, is consistent w ith the concept that celluiosic content should be predom inant in feedstocks for w hich all resulting fuel is qualified for celluiosic biofuel RINs. The 75% threshold also eliminates the current regulatory uncertainty for celluiosic biofuel producers, minimizes regulatory burden, and as a consequence should help promote the production of the category of renewable fuels that provides the m ost lifecycle GEIG emissions benefits. 3. Com pliance R equirem ents for Producers of Celluiosic Biofuel Made From Feedstocks That Are Not Predominantly Celluiosic 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 celluiosic material, but where the feedstocks are not predom inantly celluiosic in content. Based on the comm ents received, EPA believes that the existing regulations at 8Q,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 predom inantly celluiosic, and for processes using a single feedstock that has an average celluiosic content below 75%. However, EPA is amending the regulations, by adding new registration, recordkeeping, and reporting requirem ents ("RRR requirem ents") to allow EPA to verify that the formula in 80.1426(f)(3)(vi) is being applied appropriately for celluiosic biofuel RIN 11 Requi.renien.ts for det.ermin.ing th e n u m b e r of celluiosic bio fu el RiNs the t m ay be generated for fuel derived from feedstocks that do not satisfy the m inim um celluiosic content threshold adopted in today's rule are described in section IV.A.3 of this pream ble. generation. EPA believes that, to relieve regulatory burden and streamline program implementation, it makes sense to establish a 75% m inim um celluiosic content threshold above which testing and reporting of celluiosic content and RIN apportionm ent is not necessary. However, when fuel is made from feedstocks below the 75% celluiosic content threshold, EPA believes that testing of the feedstock's celluiosic 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 m ade from a feedstock meeting the 75% minimum celluiosic content threshold will qualify com pletely for celluiosic RINs, whereas fuel made from a feedstock containing 74% celluiosic content would, through the apportionment formula, only qualify for at m ost 74% celluiosic RINs. EPA believes it is appropriate to have simplified procedures for fuel made from feedstocks that are predom inantly celluiosic, and has selected a 75% threshold to identify these feedstocks. At some level of content, EPA believes there is less benefi t to requiring that manufacturers account for the increasingly small non-cellulosic content of the feedstock. EPA has determ ined that 75% celluiosic 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 "celluiosic" in nature. While this obviously allows significantly greater benefits to producers using feedstocks above 75% celluiosic content, compared w ith fuel derived from feedstocks containing just below 75% celluiosic 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 celluiosic 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 celluiosic biofuel RINs, beyond levels that are determ ined to reflect the celluiosic converted fraction. While this approach could be seen as providing more equitable treatment of fuels made from feedstocks that satisfy the 75% celluiosic content threshold and those that do not, EPA determined that it w ould be inappropriate. The principal objective of the celluiosic content approach adopted today is to minimize burdens and streamline program im plem entation for both EPA and producers of celluiosic biofuel and provide incentives for production of fuels that are 75% or greater celluiosic content. However, for fuels made from feedstocks that do not meet the minimum celluiosic content threshold, testing (either of celluiosic content of feedstock or of the proportion of fuel derived from celluiosic content) will he 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 apportionm ent to accurately reflect the test results. 4. Testing, Registration, Reporting and Recordkeeping Requirements for Celluiosic Biofuel The agency requested comment on test methods available to determine what percentage of a finished biofuel volume was derived from celluiosic 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 celluiosic 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 w hen fuel is produced from feedstocks that are not predom inantly celluiosic to verify that the values used in the formula at 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 num ber of celluiosic RINs are generated when applying the formula at 80.1426(fj(3)(vi). As described in more detail below, different feedstocks and processes require more information to ensure a 12 C om m ents sugg ested v a rio u s m e th o d s to determ ine the converted fraction, including approaches for perform ing a m ass-balance accounting of feedstock com ponents co nverted to fuel products. As described in the m em o to the docket, "A dditional D etail on the C alculation of the Celluiosic Converted Fraction, and A ttribution of Batch RINs for D-code D ependent F eedstocks," availab le i u d o c k et EPA --H Q --OAR--2012--0401, a m ass balance approach w hich meets the re q u ire m e n ts d iscu ssed b e lo w is an a p p ro p ria te m ethod for calculating the converted fraction. Converted fraction refers to the portion of the feedstock converted into renew able fuel by the p ro d u c e r a n d is u s e d in c alcu la tin g c ellu io sic RIN volum es generated. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00006 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 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 80.1416 petition process w hich 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 80.1450(dj(3), all producers seeking to use a cellulosic biofuel pathway that converts cellulosic biom ass to fuel (currently rows K, L, M, and N of Table 1 to 80.1426, or as otherw ise approved by ERA), m ust demonstrate that their production process has the ability to convert cellulosic com ponents to fuel by including (1) a process diagram w ith all relevant unit processes labeled and a designation of which u n it process is capable of performing cellulosic treatm ent; (2) a description of the cellulosic biomass treatment process; and (3) a description of the m echanical, 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 biom ass 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. A dditional Registration Requirem ents 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, 13 T ew . Thom.as L. and. R o b ert M. Cobili. 2008, Genetic im provem ent of sugarcane {Saccharum spp.) as a n energ}? crop. p. 249--2 72. In: W. V erm erris (ed.j Genetic Im provem ent of Bioenergy Crops. Springer. some cu ltiv ars14 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, w hich are com m only referred to as energy cane,15 have cellulosic contents of approximately 50% on a dry m atter basis.16 Fuel produced from these cultivars would not be derived predom inantly 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 predom inantly 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 culti vars 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]. Upon registration, fuel producers seeking to produce cellulosic biofuel using energy cane feedstocks will need 14 A c u itiv a r is a su b set of a species. USDA has provided, a list of sugarcane cultivars (including energy cane). This list, "USDA ARS Sugarcane Release N otices 1999 to 2012," is in clu d ed in the docket. 15 H o 0 0 -9 6 1 and. H oC P 91--552; Tew . T hotnas 3_,, and Robert M. Cobill. 2008. Genetic im provem ent of sugarcane {Saccharum spp.) as an energy crop, p. 249--2 72, In: W. V erm erris (ed.j G enetic Im provem ent of Bioenergy Crops. Springer. 16 T ew , T, L. et a 1., 2007. "N otice of release of high-fiber sugarcane variety Ho 00-961." Sugar B u lletin . 85(10) 2 3 -2 4 , T ew . T. L. et al, 2007. "Notice of release of high-fiber sugarcane variety HoCP 91-552." Sugar Bulletin, 85(10) 25-26. Ho 00-901 has a Brix value of 17-19% cane, an d HoCP 91-552 has a Brix value of 1.5-18% cane, w here Brix is a m easure o f th e total so lu b le solids, including sugar. These Brix values are sim ilar to the Brix value of a traditional sugarcane cuitivar p re se n te d in th e se p ap ers. H o 00--961. h a s a. p e rc e n t cellulosic content of 47% . and. HoCP 91-552 has a percent cellulosic content of 48%. The percent cellulosic content is calculated using the fiber con ten t (as a m easure of the cellulosic content) presented in the papers, divided.by the total solids content (Brix + fiber). By contrast, energy cane c u itiv a r I, 79--1.002, w h ic h h as a h ig h e r fiber content, has a Brix value of 8-12% cane, as re p o rte d by B isclioff. K.P. et al.. 2008. "R egistration o f `L 7 9 -1 0 0 2 ' su g arca n e ." Jo u rn a l of P la n t R eg istrations, 2(3) 211--217, a n d H ale, A.L. 2010, "N otice of release of a high fiber sugarcane variety Ho 0 2-113," Sugar B ulletin, 88(10)^28-29, to submit data showing that the average adjusted cellulosic content of each energy cane cuitivar they intend to use is at least 75%, based on the average of at least three representative samples of each cuitivar.17 Cultivars m ust 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 cuitivar will need to update their registration and provide data to EPA demonstrating the average adjusted cellulosic content for each cuitivar 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 m ethod will need to show that the m ethod used is an adequate means of providing reasonably accurate results by providing peer reviewed references to the third party engineer performing the engineering review7at 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 know7 whether or not the cultivars they intend to use m eet 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 requirem ents for producers seeking to produce cellulosic biofuel using feedstocks that will be evaluated in the future that could similarly he bred for a wide range of uses and fiber content. 17 As d escribed above and In die M ernorandurn. to the Docket, "Cellulosic Content of Various F eedstocks-- 201.4 U p d a te ," a vailable in docket E P A -H Q --OAR--2012--0401. a d ju sted cellu lo sic content is the percent of organic (non-ash) m aterial that is cellulose, hem icellulose, and lignin. Therefore, a calculation of the adjusted cellulosic content requires a m easurem ent of the cellulosic content, as well as a m easurem ent of the ash content of a feedstock. 18For exam ple, AOAC 2002.04 "A m ylase-Treated N eutral D etergent Fiber in Feeds" or ASTM E l 758 "D eterm ination ofCarbohyd.ra1.es in Biom ass by High Perform ance Liquid C hrom atographv." V oluntary consensus standards bodies are defined as " dom est ic or in te rn a tio n a l o rg a n iz a tio n s w h ic h plan, develop, establish, or coordinate voluntary standards using agreed-upon procedures." See "Federal Use of Standards," Office of M anagem ent a n d B udget, h t t p ://w v rw .w h ite h o u se .g o v /o m b / fedreg allOrev. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00007 42134 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations c. A dditional Registration, Recordkeeping, and Reporting Requirements for Producers of Ceiiulosic Fuels Derived From the Sim ultaneous Conversion o f Feedstocks That Are Predominantly Ceiiulosic and Feedstocks That Are Not Predominantly Ceiiulosic Under 80.1426(f)(3)(vij, if a renewable fuel producer produces a single type of renew able 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 ceiiulosic content, the producer w ould have to determine how much of the finished fuel is derived from the ceiiulosic 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 ceiiulosic 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 ceiiulosic content of the feedstock may not be a good indicator of the am ount of finished biofuel that is derived from ceiiulosic materials. Furthermore, depending on the conversion process used, the amount of information needed to determine how m uch of the finished fuel is derived from the ceiiulosic content will also vary. Therefore, EPA believes it is prudent to include specific requirem ents related to calculating the ceiiulosic converted fraction and to specify appropriate registration, recordkeeping, and reporting requirements for producers seeking to generate ceiiulosic RINs using two or more feedstocks 20 w hich are processed simultaneously, EPA has attempted to minimize additional requirem ents, so has lim ited certain provisions to circumstances where a producer seeks to generate ceiiulosic RINs for fuel produced by "in situ " biochemical hydrolysis treatment where ceiiulosic and non-cellulosic com ponents of feedstocks (at least one of which is not predominantly ceiiulosic) are simultaneously 19See 80.1426(f)(3)(vi). C onvened fraction refers to the portion of the feedstock converted m to renew able fuel by the producer and is u sed in calculating ceiiulosic RiN volum es generated, 20 As d e sc rib e d in sectio n TV.A.5. if a fu tu re feedstock does not m eet the 75% threshold, we consider it as com prised of two separate feedstocks: one ceiiulosic and one non-cellulosic. 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 ceiiulosic- and non-cellulosic-derived sugars from separate hydrolysis units prior to fermentation. In the latter case, the ceiiulosic conversion factor can be obtained by analyzing feedstock conversion in the ceiiulosic hydrolysis unit, A fundam ental distinction relevant to verifying conversion of ceiiulosic content is w hether or not a process converts the entire organic traction into fuel. Thermochemical conversion is an example of a process that converts the entire organic fraction. Thermochemical processes m ainly consist of (1) pyrolysis: a process in which ceiiulosic biomass is decomposed with temperature to bio-oils that can be further processed to produce a finished fuel or (2) gasification: a process in w hich ceiiulosic biomass is decom posed to synthesis gas ("syngas") that w ith 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 ceiiulosic 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 con vert different fractions of the ceiiulosic and noncellulosic 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 organi c components of the feedstock into finished fuel, fewer recordkeeping and reporting requirem ents are necessary to verify appropriate ceiiulosic biofuel RIN generation for producers using thermochemical conversion processes. In addition, since the finished fuel produced from the thermochemical process is proportional to the ceiiulosic content of the organic fraction of the feedstock material, demonstration of the ceiiulosic 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 ceiiulosic 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 ceiiulosic RINs are appropriately generated for the finished fuel. In the proposal, EPA requested comment on conversion technologies, and we also requested comment on w hether to allow 100% of the fuel produced via biochem ical processes to generate ceiiulosic RINs. EPA received comments supporting our proposal to allow biochemical processes to generate 100% ceiiulosic 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 predom inantly of ceiiulosic origin. Therefore, EPA is not finalizing this aspect of its proposal. Instead, EPA has finalized the ceiiulosic threshold approach which will generally allow ceiiulosic biofuel RIN generation for ail fuel produced by ceiiulosic conversion processes using feedstocks determ ined to have an average adjusted ceiiulosic content of at least 75%. i. Registration Requirements As explained in section IV.A.4.a, at registration, producers seeking to use a ceiiulosic biofuel pathway that converts ceiiulosic biomass to fuel (currently listed in rows K, L, M, and N of Table 1 to 80.1426), or as otherwise approved by EPA, m ust demonstrate the ability to convert ceiiulosic components of their feedstock to fuel. In addition, producers seeking to generate ceiiulosic 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 ceiiulosic content) w hich are processed simultaneously using a thermochemical conversion process will he able to allocate ceiiulosic RINs using the formula in 80.1426(f)(8)(vi) where the ceiiulosic fraction is proportional to the ceiiulosic content of the feedstock. The average adjusted ceiiulosic content of the feedstock will have to be reported at registration, based on the average of at least three representative samples, and ceiiulosic content data m ust come from an analyti cal method certified by a voluntary consensus standards body (VCSBj or a non-VCSB m ethod that would produce reasonably accurate Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00008 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42135 results,21 Producers using a non-VCSB approved m ethod w ill need to showTthat 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. Producers generating RINs w ith 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) w hich are processed simultaneously through an in situ biochemical hydrolysis treatment will similarly have additional registration requirem ents to help ensure that cellulosic RINs are being generated accurately. At the time of registration, such a producer must subm it (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 betw een reporting periods; (2) the cellulosic converted fraction that will be used for generating RINs under 80,1426(f)(3)(vi), including chemical analysis data (described in more detail below7) 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 how7the cellulosic converted fraction is determ ined and calculations showing how7the data were used to determ ine the cellulosic converted fraction. 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 m ethod that would produce reasonably accurate results. If using a non-VCSB approved m ethod to generate the data required to calculate the cellulosic converted fraction for a given fuel, then the producer will need to show that the m ethod used is an adequate means of 21 For e x am p le, AOAG 2002,04 " A m y lase-T reated N eutral D etergent Fiber in Feeds" or ASTM E l 758 "D eterm ination of C arbohydrates in Biom ass by High Perform ance Liquid C hrom atography." 22 T he o v e ra ll fu e l y ield is d e te rm in e d to b e the total v olum e o f fuel p ro d u ced (e.g,. cellulosic plus non-ceiluiosic fuel volum e) divided by the total feedstock mass (sum of ail feedstock masses) on a dry m ass basis. providing reasonably accurate results by providing peer reviewed references to the third party engineer performing the engineering review7at registration. A full description of the formulas in 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 d o c k e t.23 it. A dditional Cellulosic Converted Fraction Reporting and Recordkeeping Requirements Producers generating cellulosic RINs using two or more different feedstocks (at least one of w hich does not have at least 75% average adjusted cellulosic content) w hich 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 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 renew able 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 determ ination will apply to RINs produced until a new7converted fraction allocation is available and reported. The interval at which a new converted fraction m ust 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 23 " A d d itio n a l Data il on. th e C alcu la tio n of the Cellulosic Converted Fraction, and A ttribution of Batch RINs for D-code D ependent Feedstocks," w h ich is available in docket EPA.--HQ~OAR-2012~ 0401. and reporting is prudent and are requiring that the cellulosic converted fraction be recalculated w ithin 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 w ill 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 8Q,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 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 num bers mayresult 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 m ust (1) notify EPA w ithin 5 business days and (2) adjust the formula used to generate RINs at 80.1426(f)(3) (vl) 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 Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00009 42136 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations fraction, only RINs generated after the new testing data were received would be affected. 5, Determ ining the Average A djusted Cellulosic Content of Feedstocks Going Forward EPA 'will apply the m inim um 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 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 wall 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 80.1426, or in response to an individual petition submitted pursuant to 80.1416. In either case, EPA will clarify whether the feedstock meets the 75% cellulosic content threshold allowing cellulosic RINs to he generated for the entire fuel volume produced, or if the producer should use the apportionment method in 8G.1426(f)(3)(vi). Future petitioners pursuant to the process in 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 peerreviewed data exist, the producers should provide data. Some comments suggested that producers should be required to m aintain 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. Treatm ent 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 80.1426. Many comm enters preferred allowing feedstock sources listed in Table 1 to 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 80.1426.24 However, this addition would require further anal ysis 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 80.1426. 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 w ould 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. 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 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 80.1426 for cellulosic biofuel pathways satisfy the 75% cellulosic content threshold adopted today. In ^ C o m m e n t p ro v id e d b y B lue S ource (EPA--H Q -- OAR-201 2-0401-0137). 25 C om m ents p ro v id e d by S m ith fie id Foods (EFA--H Q --O AR--20 1 2 -0 4 0 1 -0 1 0 3 ) a n d the N a tio n a l A ssociation of C lean "Water A gencies (EPA--H Q -- OAR--2012-04 01-0178}. 26 C om m ents p ro v id e d b y AFPM /A.PI (E P A -H Q OAR--2012--0401--0128} a n d C h ev ro n {E PA -H Q O A R --2 0 1 2 --0 4 0 1 --0 1 7 1 ). Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00010 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 m inim um cellulosic content threshold, and different regulatory provisions apply depending on the result. 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 predom inantly 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 in p u t requirem ent.29 In response, EPA notes that it is required to im plem ent the statutory requirements, and that the CAA is clear that a cellulosic biofuel must be both derived from cellulosic m aterials and m eet 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 determ ining whether or not the fuel produced pursuant to a particular pathway satisfies the m inim um 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 w ill continue to evaluate lifecycle emissions for feedstocks and require this reduction in greenhouse gas emissions for cellulosic pathways. EPA also sought comment on a specified percentage approach, under which fuels produced from feedstocks listed in Table 1 to 80.1426 w ould be eligible to generate cellulosic RINs for 85% of their volume, and the remaining 27Co[nmen1s p ro v id e d by BP (EPA--H Q --OAR-- 2012--0401--01 30). Iow a C orn G row ers A sso ciatio n (EPA -H Q -O A R-201 2-0401-0131), and NRDC (EPA-HQ--OAR--2 0 1 2 -0 4 0 1 --0136). 28C o m m en ts p ro v id e d by BP (EPA.--H Q --OAR-- 2012-0401-0130) and NRDC (EPA -H Q - A R2012-0401-0136). 29 C o m m en t p ro v id e d b y NRDC (EPA,--H Q --OAR-- 2012-0401-0136). 15% would be eligible to generate advanced RINs. This percentage was based on data that suggested that the average adjusted cellulosic content of the predom inantly 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 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 w ith 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 W ith Lower Average Cellulosic Content Than Feedstocks Currently Listed in Table 1 to 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 80.1426. Some commenters suggested using an approach with m ultiple 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, w ith the rem aining fuel receiving advanced RINs. Some comments suggested cellulosic RINs should not be generated for fuels 30Comments provided by N ational Sorghum Producers (E P A -H Q -O A R -2012-0401-0065). the R en ew ab le F u els A sso c ia tio n (.EPA--EIQ-OAR-- 2 0 1 2 -0 4 0 1 --0 1 2 3 j, W ey erh aeu ser (.EPA--H Q -O A R -- 2012--0401--0140), N e x S ie p p e (E P A -H Q -O A R 2012-0401-0153), the Independent Fuel Term inal O p erato rs A sso c ia tio n (EPA--H Q --OAR--2012--0401-- 0165) ami Global R enew able Strategies am i C onsulting, LLC (E PA -H Q -O A R -2 12-0401-0184). Some com m enters expressed support for the specified percentage approach. See com m ents p ro v id e d by the A FPM /AP1 (EPA--H Q -O A R --2 0 1 2 0401-0128). Phillips 66 (EPA -H Q -O A R -20120401-0102), Chevron (EPA .-H Q- AR-2012- 4010171), and Cam eo (EPA -H Q -O A R-2 12- 4010183). w ith low cellulosic content.31 Other commenters stated that the existing regulations in 80.1426(f)(3) were sufficient to handle the allocation of RINs for the cellulosic and noncellulosic portions of the finished fuel.32 They noted that these regulations already provide a way to assign RINs for a m ixture of fuel types w ith different Dcodes. After evaluating these comments, EPA has concluded that the approach provided by the existing regulations in 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. B, Lifecycle Greenhouse Gas Emissions Analysis and Cellulosic Determinations for Pathways Using Biogas as a Feedstock In the March 2010 RES final rule, EPA established biogas as an advanced fuel type (D code of 5) w hen derived from landfills, sewage wTaste treatment plants, and manure digesters. Based on questions from companies, EPA proposed to: (1) Modify the existing biogas pathw ay to specify that com pressed natural gas (GNG) or liquefied natural gas (LNG) is the fuel and biogas from landfills, waste treatment plants, and waste digesters is the feedstock; (2) allow7fuels 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 pathw ays 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 31 C om m ents p ro v id e d b y NRDC (EPA--H Q --OAR-- 2012-0401-0136). 32C om m ents provided, by lire N ational Corn. Growers A ssociation (EPA.-ITQ-OAR-2012-4G10071), N ovozym es North. A m erica, Inc. (EPA.--H Q -- A E -2 0 1 2 --0 4 0 1 -0 0 8 8 ). a n d th e R en ew ab le F uels Associa tion (E P A -H Q -O A R -2012-0401-01 23), the Iow a Corn. G row ers A sso ciatio n (EPA--H Q --OAR-- 2012-0401-0131), and Edeniq (EPA -H Q -O A R2012-0401-0159). Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00011 42138 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations electricity pathw ay 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 renew able CNG, LNG and electricity are discussed more fully in the following sections. This section discusses: Changes Applicable to the Revised CNG/LNG Pathw ay from Biogas Determination of the Cellulosic Content of Biogenic Waste Derived Biogas o Landfill gas and MSW waste digester biogas as cellulosic o M unicipal wastewater treatment facility digester biogas as cellulosic o Agricultural digester biogas as cellulosic o Biogas from Waste Digesters Consideration of Lifecycle GHG Emissions Associated W ith Biogas Pathways o Upstream GHG Analysis of Biogas as a Renewable Fuel Feedstock o Flaring Baseline Justification o 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 pathw ay in Table 1 to 80.1428(f)(1) allow ed 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 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)." ERA 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 treatm ent 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 80.1426 refers to "biogas" as the renewable fuel type and "landfills, manure digesters and sewage waste treatm ent 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 80.1426(fj(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 m ust 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 80.1401. This rulemaking clarifies that biogas means a m ixture 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") m eans biogas or biogas-derived pipeline quality gas that is com pressed 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 w hich 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" pathw ay 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 w hether CNG/ LNG that is produced on-site and not sent through a pipeline w ould fall w ithin 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. D eterm ination 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 m ust be derived predom inantly from cellulosic materials and m ust m eet 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 w hether 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 determ ined that biogas generated by Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00012 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42139 landfills, municipal wastewater treatment facility digesters, agricultural digesters, and separated MSW digesters are predom inantly cellulosic in origin, and that biogas derived from waste digesters processing non-cellulosic renew able biom ass 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, 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 m unicipal solid waste (OFMSWj 34 approximately 90%, but that roughly 90% of the methane generated in landfills was derived from the cellulose and hem icellulose 35 portions of the OFMSW as the basis for this proposal. Some commenters argued that MSW landfill gas was not cellulosic because a large portion of the waste disposed is food waste which contains some noncellulosic components. We do not believe this affects our determ ination for several reasons. Our cellulosic content determ ination 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 predom inantly cellulosic in origin. Furthermore, many of the noncellulosic components of food waste are oxidized in the early stages of waste decomposition during the collection, handling and transportation and released as C 0 2 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. 33 ' `S u p p o rt for C lassificatio n of B iofuel P ro d u ce d from W aste D erived Biogas as C ellulosic Biofuel and Sum m ary of Lifecycle A nalysis A ssum ptions and C alculations for Electricity Biofuel P roduced from W aste D erived Biogas," w h ich is available in docket EPA --H Q -O A R --2 01 2 -0 4 0 1 . 34 T he stu d y sp ecifies th e ' `v o la tile s o lid s " o f the MSW to be 90% cellulosic. Volatile solids refer to organic com pounds of plan t or anim al origin that have caloric value and are susceptible to bioconversion during anaerobic digestion. 35 B arlaz, ALA,, R.K. H am , a n d D .M . Schaefer. 1989. M ass-balance analysis of anaerobically decom posed refu.se. Journal of E nvironm ental Engineering, 15(6) 1088-1102. 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 determ ined 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 determ ination.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 predom inantly 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 36 See " C om m ent su b m itte d b y F rie n d s of the Earth., Sierra C lub, C enter for a C om p etitiv e W aste In d u s try " , docket n u m b e r EPA --H Q --OAR--2012-- 0401-0164. 37 See for e xam ple, " C om m ent su b m itte d by Kerry Kelly, D irector, Federal Public & Regulatory Affairs, W aste M anagem ent (WM)" , docket num ber E P A -H Q --OAR--2 0 1 2 -0 4 0 1 -0 1 1 2 a n d " C om m ent su b m itte d b y S te w a rt T, Leetb, A ssista n t Vice President. E nvironm ental and. C orporate Affairs and .Senior C ounsel, Sm ithfield Foods, In c ," docket num ber EPA -H Q -O A R-2012-0401 -0103, 38 See " C om m ent su b m itte d by S te w a rt T. Leeth, A ssistant Vice President, Environm ental and Corporate Affairs and Senior Counsel, and D ennis Treacy, Executive Vice President and Chief Sustainability Officer, Sm ithfield Foods, Inc." , docket num ber EPA-HQ-OAR-2012-0401-0111, and "C om m ent subm itted by Cynthia A. Finley, Director, Regulatory Affairs, N ational A ssociation of Clean W ater Agencies (NACWA)" , docket num ber EFA -H Q -O A R -2012-0401-0178, 30 " S u p p o rt for C ellulosic D e term in a tio n for Landfill Biogas and Sum m ary of Lifecycle A nalysis A ssum ptions and C alculations for Biofuels Produced from Landfill Biogas," w hich has been p la c e d in d o c k et EPA --H Q --OAR--2012--0401. than two decades. Therefore, our determination that the biogas generated in landfills is predom inantly derived from cellulose and hemicellulose is well s u p p o r t e d .40 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 pathw ay Q in Table 1 to 80.1428. 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 m unicipal wastewater w hether or not the facility is owned by a m unicipality. 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 biosolids41--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- 40B ariaz, M .A ., R.K. H am , a n d D .M . Schaefer. 1989, M ass-balance analysis of anaerobically decom posed refuse, journal of Environm ental E ngineering, 15(6) 1088--1102. M ehta, R., B arlaz, M .A ., Yazdan.i, R., A u g en steiu , D. B ryars, M. and S in d e rso n , E. 2002, "R efuse D e co m p o sitio n in the Presence and Absence of Leachate R ecirculation," j. E nviron, Eng,. 128, 3. 228--236 S taley. B, F. and M, A, B arlaz, 2009, C o m p o sitio n o f M u n ic ip a l S o lid W aste in the U.S. and Im plications fo r Carbon S e q u estra tio n a n d M eth a n e Y i e l d J. E nviron. Eng. 135, 10, 901-909. A dditional citations were offered in com m ents from W aste M anagem ent, 41 A c tiv a ted slu d g e a n d b io so lid s ty p ic a lly refer to aerobically treated residuals from the processing of m unicipal w astew ater solids. 42W ang, Xue. 2008. Feasibility of G lucose Recovery horn M u n icip al Sewage Sludges as Feedstocks Using Acid H ydrolysis. M asters Thesis Q u e e n 's U n iv ersity , O ntario, C anada. C ham pagne, P. & Li, C. 2009 "E nzjunatic h y d ro ly sis of c ellu lo sic m unicipal w astew ater treatm ent process residuals as feedstocks for th e recovery o f sim p le sugars. Bioresource Technology. Vol 100 pp 5700-- 5706. See m em o to the docket: " S u p p o rt for C lassificatio n of Biofuel Produced from W aste D erived Biogas as Cellulosic Biofuel and Sum m ary of Lifecycle A nalysis A ssum ptions and. C alculations for Biofuels Produced from W aste D erived Biogas," available in docket EPA -H Q -O A R-2 012-40E Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00013 42140 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations reviewed data that analyzes the activated sludge and biosolids. 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 estim ate 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 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 determ ined that crop residues and yard wastes are predom inantly cellulosic. As to anim al manure, we received in response to our proposal data indicating that animal 43 W ang, X ue. 2008, F e a sib ility o f G lucose Recovery from M u n icip al Sewage Sludges as Feedstocks Using A cid H ydrolysis, M asters Thesis Q u e e n 's U n iv ersity , O n tario , C anada. S u n & Cheng. 2002. "H ydrolysis of lignoceliuiosic m aterials for ethanol production: a review. Bioresource Tech n ology. Vol 83 pp 1 - i l . 44Data available for pre-digesied biosolids and m ethods for estim ating the aggregate adjusted cellulosic con ten t is presented in the m em o to the docket: " S u pport for C lassification of Biofuel P roduced from W aste Derived Biogas as Cellulosic Biofuel and Sum m ary of Lifecycle Analysis A ssum ptions and C alculations for Biofuels Produced from W aste D erived Biogas," available in docket E P A -IiQ -O A R --20 1 2 -0 4 0 1 . m anure is predom inantly cellulosic.45 Based on these data, anim al m anure 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 pathw ay in row Q of Table 1 to 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. 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 predom inantly cellulosic, and therefore have determined that fuel made from biogas derived from agricultural digesters processing predom inantly 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 80.1426, an advanced biofuel pathway for fuel made from biogas derived from waste digesters. 45 C hen, S., et. ai., 2003, V alue A d d e d C hem icals from A n im a l M anure. Pacific N orthw est Laboratory, PNNI:-- 14495. Decem ber 2003. 48 See m em o to th e docket: " S u p p o rt for Class] fication o Biofuel P roduced from W aste D erived Biogas as C ellulosic Biofuel aud Sum m ary of Lifecycle Analysis A ssum ptions and Calculations for Biofuels P roduced from W aste D erived Biogas," available in docket EPA.-HQ~OAR-2012~0401. 3. Consideration of Lifecycle GHG Emissions Associated With Biogas Pathways Biogas, consisting prim arily of methane and carbon dioxide (with trace amounts of other gases], is produced during the microbial mediated decom position of organic wastes. In anaerobic environments with available organic material such as landfills, organic conversion to biogas proceeds slowly over decades producing large am ounts of m ethane. W hile m ethane 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 m ethane 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 w ill 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 em issions associated w ith its production. In the NPRM, we proposed to add a new pathw ay to Table 1 to 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 w ould 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.4748* 47 '`S o lid W aste M a n a g e m e n t a n d G reenhouse Gases: A Life-Cycle A ssessm ent o f Em issions and S in k s '\ P re p a re d by IGF for th e U.S. E n v iro n m e n ta l Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00014 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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. Cornmenters 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 im pacted by use of biogas for transportation fuel, there could he 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 im pacts 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 param eter to be actively optimized--promoting technology that reduces fugitive emissions from landfills. Other cornmenters argued that we should begin our lifecycle GHG analysis at the point of waste generation, in w hich case our com parison w ould be to an alternative disposal m ethod 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 P ro te c tio n A gency (EPA.) O ffice o f S o lid W aste, E PA 530--R--06--004, S ep te m b e r 2006. 48 "M u n ic ip a l S o lid lV aste (M SW ) in th e U nited States: F act a n d fig u r e s '\ EPA's A n n u a l W aste Trends Report. 2012 Facts and Figures Facts Sheet; h ttp ://ww rw. e p a .g o v /o s w /n o n h a z /n m n ic ip a I/p u b s / 2012 m sw fs.pcff. 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 assum ptions 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, w hich is com prised of approximately 50% methane, in one of several ways. M unicipal 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 m illion megagrams (Mg) and 2.5 m illion cubic m eters of waste and em itting at least 50 Mg of non-m ethane organic com pounds 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 w ith regulations, these landfills must at a minimum combust their biogas in a flare, converting the m ethane to carbon dioxide, a less potent GHG. They may also use it for other purposes, including to generate electricity, in w hich case the electricity produced may displace electricity from other, higher GHGemitting sources (such as gas-fired power plants) once it enters the grid.50 Many smaller, unregulated landfills do not collect their biogas, and this m ethane 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 m ethane 40 S ta n d a rd s of P e rfo rm an ce [or N ew S tationary Sources and G uidelines tor C ontrol of Existing Sources: M u n ic ip a l Solid W aste L andfills, 61 FR 9905, Federal R egister V olum e 61, Issue 49 (M arch 12, 1996], 50 Som e facilities also u se th e b iogas d ire c tly in boilers an d other applications or purify the biogas to create CNG or LNG or inject It d irectly into natural gas pipelines. 51 E n v iro n m e n ta l P ro te c tio n A gency. 2012. Inventory of U.S. G reenhouse Gas Em issions and Sinks: 1990--2010, A nnex 3: M eth o d o lo g ical D escriptions for A dditional Source or Sink Categories, http://epa.gov/clirnaiechange/ emissions/usinvent,o.ryreport,htm.L As of December 2012, land-fills pro d u ced 1913 MW of electricity based, on. figures from LMO.P, T his e le ctricity w ould, be alm ost entirely sold for use on the grid. From http://w w w .epa.gov/lm op/projects-candidates/ index.htm l. Environm ental Protection Agency, was generated at all landfills (regulated and unregulated), of w hich 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 v e n t e d . 52 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 cap ture 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 gasto-energy project w ould 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 gasto-energy project or installed a gas-toenergy project as an alternative to the minimal compliance route of flaring, we proposed to treat the em issions from these landfills com pared 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 com m ents in support of our flaring baseline approach. We did not receive any comments that justified revising this baseline for the pathw ay in Table 1, L an d fill M eth a n e O u tre a ch Program . 2010. LEG Energy P ro ject D e v elo p m en t H a ndbook: C h ap ter 2. Landfill Gas M odeling. http://epa.gov/Im op/ pii blica H ons-tools/handbook,hind. 52N ational G reenhouse Gas Em issions Data, 2011. C hapter 8: W aste, http://epa.gov/clim a.iechange/ D ownloads/ghgemissions/US-GHG-Inveniory-2013Ch ap ter-8-W aste.p df. 53 " S u p p o rt for C lassi fixation of B iofuel P ro d u ce d from W aste D erived Biogas as C ellulosic Biofuel and .Summary of Lifecycle Analysis A ssum ptions and C alculations for Electricity Biofuel P roduced from W aste D erived Biogas." A vailable in docket EPA -H Q -O A R -2012-0401. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00015 42142 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations therefore EPA is finalizing flaring as our respect to separated MSW, and therefore electricity could be generated and how baseline as proposed. We received we use that same flaring baseline for m uch could be delivered off-site to the comment on the use of alternative both of these systems. In fact for most consumer including consideration of baselines for specific projects that we waste digesters, the alternative is that on-site parasitic losses and on-site use. discuss below. the waste would have gone to a landfill We used values from LMOP to provide Other commenters addressed the case resulting in the same baseline. estimates of the relative shares of of a landfill that is already generating Furthermore, wastewater treatment different types of engines or turbines, renew able electricity from landfill gas. facilities that don't use digester biogas the electricity generation efficiency, The commenters stated that with the for process energy, fuel production, or parasitic losses, energy use in collecting increasing availability of plug-in hybrid electrical generation typically flare the and preparing the biogas, and a value electric vehicles (PHEVs) and electric unused biogas. Assuming that the biogas from the U.S. Energy Information vehicles (EVsJ, it is likely that at least is flared generally provides a Agency to estimate distribution losses. some of the electricity that is currently conservative baseline. If sources that are Values used are discussed in more being generated by these landfills is using flaring will achieve a 60% GHG detail in a memo to the docket.58 going to charge these vehicles. The reduction when converting to electricity We calculated GHG emissions in two commenter argued that if the landfill production, sources that are venting ways, per rnmBtu electricity and per now signs contracts w ith these users, their m ethane will certainly do so as mmBtu fuel equivalent which there w ill be no change in GHG well. accounted for the drivetrain efficiency emissions, and fuel from this landfill biogas will not achieve a 60% GfiG reduction as required for ceiluiosic c. Lifecycle GHG Analysis for Electricity From Biogas of electric vehicles. In both cases we found that renewable electricity produced from landfill gas meets the biofuels. Although EPA considered the The previous section discussed the 60% GHG emission reduction threshold possibility of differentiating between baseline EPA has selected for use in required by the CAA, and thus qualifies existing and new hiogas projects,54 we com parison to the hiogas pathw ays as a ceiluiosic biofuel. Compared with believe that such an approach would under consideration.55 This section the gasoline that ft would replace, these inappropriately p u n ish " early actors" discusses the lifecycle GHG emissions projects w ould be accom panied by an that have previously made the decision analyses of the pathways adopted today, 87% reduction in GHG emissions w hen to install gas-to-energy equipment, which are then compared to the baseline norm alized per mmBtu electricity. either to replace flaring or as an to determ ine if the requisite GHG Accounting for the improved efficiency 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. reductions are achieved. 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 m uch emissions at a landfill employing flaring would change upon installation of a gas-to- of EV clrivetrains 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 determ ination also applies to a pathway where the This approach is consistent with how we have treated the early implementation of advanced technologies for all biofuels producers in the past. We also believe that it is appropriate energy project. For this calculation, we used em ission factors from the GREET m odel.56 The second involved calculation of the decrease in GHG em issions caused by powering the gas blowers already in use with biogas- electricity is generated off-site. The main differences are removal of the credit associated w ith using biogas electricity in on-site blowers, and adding emissions associated with scrubbing the gas to pipeline quality, to use a flaring baseline when derived electricity produced on-site shipping it via pipeline, and removing considering emissions related to biogas rather than grid electricity upon it from the pipeline to make electricity. production from m unicipal wastewater installation of a gas-to-energy project at Removing the credit associated with use treatm ent facility digesters, agricultural the landfill. This calculation used data of biogas-derived electricity for onsite digesters, separated MSW digesters, and from the EPA Landfill M ethane blowers still results in a 75% reduction waste digesters. Similar to landfills, O utreach Project (LMOP).57 For this in GHG emissions w hen normalized per biogas from these sources could be analysis, we calculated how much mmBtu electricity, and the emissions vented, flared or used for beneficial associated with other aspects of a purposes. According to the American Biogas Council Web site, of the 1,500 municipal wastewater treatment facility digesters that produce hiogas, about 250 55 T h e d isc u ssio n h e re is li mi ted to the new biogas to electricity pathw ay adopted today. Lifecycle greenhouse gas em ission reductions required for the new ceiluiosic CNG and ENG pathw ays are 60% as com pared to a 2005 fossil fuel paftrway involving off-site electricity generation (e.g., scrubbing the gas to pipeline quality, shipping it via pipeline, removing it to make 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 baseline (50% reductions w ere previously required for CNG and LNG for lire ad v an ced pathw ay). Tire CNG arid LNG lifecycle assessm ent for th e 60% reduction requirem ent is discussed in the m em o p la c e d in th e docket: ' `S u p p o rt for C lassificatio n of electricity) are not expected to change the result significantly. We believe that GHG emissions related to electricity produced with m ethane w ould have been emitted. We believe a similar situation exists with Biofuel P roduced from W aste Derived. Biogas as hiogas from municipal wastewater Ceiluiosic Biofuel and Sum m ary of Lifecycle A nalysis A ssum ptions and C alculations for Biofuels treatment facility digesters, agricultural Produced from W aste Derived. Biogas," available in 54 " S u p p o rt for C lassification, o f B iofuel P ro d u c e dd o ck et EP A -H Q -O A R -2 0 12-0401. 58" Support for C lassification of Biofuel Produced from. W aste D eriv ed Biogas as C eilu io sic B iofuel 56A.rgonne N ational Laboratory (2011) from W aste D erived Biogas as C eiluiosic Biofuel and Sum m ary of Lifecvcle A nalysis Assum pt ions G reenhouse Gases. Regulated Em issions, and and .Summary of Lifecycle Analysis A ssum ptions and C alculations for Electricity Biofuel P roduced Energy Use in T ra n sp o rta tio n M o d el (GREET). and C alculations for Electricity Biofuel P roduced front W aste D erived Biogas," w h ich is available in Version 1 2011, http://greet.es.anl.gov/. from W aste D erived Biogas." A vailable in docket docket EPA -H Q -O AR-2 012-0401. 57 EPA LM OP Data. EPA -H Q -O A R -2012-0401. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00016 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42143 digesters, separated MSW digesters, and waste digesters w ould be sim ilar 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 em issions 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 COj-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 m eet the 60% lifecycle GHG reduction threshold and can be qualified as cellulosic biofuel [assuming all other definitional and regulatory requirem ents are satisfied). It is im portant 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. A lternative Biogas O ptions 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 com m enters w anted ERA 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 pathw ays 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 GFIG em issions 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. A dditional 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 80.1426. However, evaluation of the lifecycle GHG emissions associated w ith 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 com m ents on adding pathw ays 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 w hether 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 "renew able 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 w ould 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 A m endm ents Related to Biogas Prior to this rulemaking, an approved fuel pathw ay in Table 1 to 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) w hat are the contract requirements to track the biogas from generation to end use. We proposed revising and adding new documentation, registration, reporting and recordkeeping requirem ents at locations along the production chain from biogas generation to finished transportation fuel use. We also proposed to specify w hich 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 w hich are either introduced into a dedicated renewable distribution system ( 80.1426(f)(10)) or introduced into a commercial distribution system ( 80.1426(f)(ll)). 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 Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00017 42144 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 requirem ents 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 rulem aking to 80.1426 paragraphs (f)(10) and (f)(ll) 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 electricity59* 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. It vcas suggested by com m enters that EPA leverage existing state renewable electricity portfolio programs to track and validate RINs generated for RFSqualified 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 59 W h en referrin g to v ario u s state `'ren e w a b le electricity'"program s in this pream ble, w e are using that term as defined in the state program s, and. do not intend to suggest that the electricity in question necessarily satisfies the RFS regulatory definition of "renew able electricity." electricity portfolio programs. Given the variety of renewable electricity programs managed by a m ultitude 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 m ade 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 docum entation. 2. Regulatory Changes Applicable to All Biogas Related Pathways As discussed above, we have had m any 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 docum entation requirem ents slightly, to better track the biogas as it moves into and out of the distribution system and to docum ent 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. W hile it is im possible 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 lim ited to, commercial natural gas distribution systems, dedicated private fuel distribution systems, or transmission grids as defined by the North American Electrical Reliability Corporation (NERCJ regions. These am ended 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 com pany 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 verily 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 Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00018 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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. PA will evaluate the situation on a case by case basis through the registration process; any company that is registered to generate RINs m ust 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 80.1426(f),' 80.1450, and 80.1454 in this rulemaking. The structure of 80.1426(f) paragraphs (10) and (11) was changed to more clearly address RIN generation requirem ents for electricity and CNG/LNG derived from biogas. Paragraph (10) lists requirem ents for fuels that are not introduced into a commercial distribution system; subparagraph (i) addresses electricity requirem ents and subparagraph (ii) addresses CNG/LNG requirements. Subparagraph (111) is an additional requirem ent 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 docum entation 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 docum entation requirem ents for distribution and use of the biogas, electricity, and CNG/LNG is located in 80.1426 and 80.1454. D. Clarification o f the Definition o f "Crop R esidue'' and Clarification o f Feedstocks That EPA Considers Crops Residues 1. Clarification of the Definition of "Crop Residue" In today's FRM, EPA is am ending "crop residue" in the RFS regulations to more clearly describe the characteristics of products that should fall within the definition.60 The final am endm ents are identical to those proposed. EPA proposed in the NPRM to include this am endm ent 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 p lan t." 61 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 prim ary 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 m ust also come from existing agricultural land, the exact definition of w hich is laid out in our current regulations that define "renewable biom ass." 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 w ill result in increased GHG emissions. 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. 60 See 8 0.1401. B1I b i d . 62 ibid. 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 com ponents 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 volum e.64 For this reason, we are not modifying the definition as suggested by the commenter. Those opposed to the proposed change were uniformly clear that they supported the crop residue pathway in general.65 O pposition 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 statem ent 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 pathw ay.66*68EPA 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 m ust 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 63 C om m ents su b m itte d by AFPM/AFT (EPA--H Q -- Q A R - 2012--0401-0128). 64 See M em o ra n d u m to the D ocket, `'C ellulosic Content of Various Feedstocks-- 2014 U pdate." A vailable in d ocket EPA--H Q --OAR--2012--0401. 65 See. for e xam ple, c o m m e n ts s u b m itte d b y the R enew able F uels A sso ciatio n , (EPA--H Q --OAR-- 2012--0401--0123), the N a tio n a l C o m G row ers A ssociation (EPA -H Q -O A R-2012-0401-0065), and G row th Energy (E P A -H Q -O A R -2 0 1 2 -0 4 0 1 -0 1 73). 68H ere as w ell, several com m enters expressed, sim ilar opinions. See, for exam ple, com m ents subm itted by the Renewable Fuels Association, (EPA .-H Q-O .A R-2 0 1 2 -0 4 0 1 -0 1 2 3). Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00019 42146 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations impact demand tor 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. 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 prim ary crop.67 Several com m enters 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, dem and 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 im portant to note that even if a particular feedstock evolved to the point where it had a significant market as a com m odity 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 pathw ay 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 c o m m e n ts su b m itte d b y th e N a tio n a l C orn G row ers A sso c ia tio n (EPA--H Q --OAR--2012--0401-- 0065) and the Iowa Com. Growers A ssociation (EPA--H Q --OAR--2012--0401--0124), am ong o thers. 6,3See, for e x am p le, c o m m e n ts s u b m itte d by the Am erican C oalition for Ethanol (EPA -H Q -Q A R 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 w ithin the definition satisfy the 60 percent GHG reduction threshold. This is one of the reasons w hy 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 w hat this means. However, the current regulations do not provide stakeholders with much guidance regarding what EPA considers to be the m eaning 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 w hether 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 am endm ent 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 pathw ay.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 89 See, for e x am p le, co m m en ts su b m itte d by N ovozym es N o rth A m erica, Inc. (EPA--H Q --OAR-- 2012-0401-0088) and Growth Energy (EPA -H Q OAR--2012--0401 --01 73). 70 See, for e x am p le, co m m en ts su b m itte d b y the N ational Biodiesel Board (EPA -H Q -O A R -20120401-0166) and N ovozym es N orth Am erica Inc. (EPA -H Q -O A R -2 0 1 2 -0 4 0 1 -0 0 8 8 ). who opposed the proposed clarification declined to offer alternative interpretations of the terms "left over" and "significant." However, several of these com m enters did state that EPA's proposal did not sufficiently describe what might constitute a "significant increase," a "significant market," or a " significant im pact." 71 It is true that EPA did not provide specific criteria for meeting these significance thresholds. However, in our NPRM discussion concerning corn kernel fiber, w e 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 com, 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 w ish 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 m arket" 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 m uch larger than 15 percent of the grain price, and that the incremental revenue will not affect crop planting decisions." 72* EPA has not utilized this methodology to identify w hich crop products w e consider crop residues for the purposes of this final rulemaking. We acknowledge that this type of methodology could potentially be useful for evaluating w hether future feedstocks meet our definition of crop residue, including non-grain crops. While we have not performed sufficient analysis to determine w hether it is appropriate to adopt such an approach today, we may 71 See, for e xam ple, c o m m e n ts su b m itte d b y the N a tio n a l B io d iesel Board (EPA--H Q --OAR--2012-- 0401-0166) and N ovozym es North America Inc. (EPA -H Q -O A R -2012-0401-0088). 77 C om m ents su b m itte d b y Iogen C o rporation (EPA -H Q -O A R -2012-0401-0135). Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00020 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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, ERA 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 EPA acknowledges that it may not always be straightforward for a stakeholder to determine for themselves w hether a crop product is likely to qualify under the crop resi due 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 requirem ents for producers intending to use crop residue as a feedstock. These additional requirem ents w ill 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 rulem aking for more details on these requirements. 2. Consideration of Com Kernel Fiber as a Crop Residue We also proposed in the NPRM that com kernel fiber be considered a crop residue. Com kernel fiber has not been specifically m entioned 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 73It is im p o rta n t to k e ep in m in d th a t not qualifying under the crop residue pathw ay (toes not in any way exclude fuel produced from a given feed sto ck fro m q u alify in g to g en erate RINs writh a D code of 3 or a D code of 7 m ore generally. It only m eans tha t a n ew p athw ay w o u ld n e ed to be established, w ere EPA to find that the fuel produced from that feedstock meets the 60 percent threshold. 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 dem and 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 em issions," 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 a. A nalysis 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 em issions." To determine whether the use of com 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 com, corn products, or substitutes for corn or corn products would come from impacts on the feed market for 74 S ev eral cornrn.enters e x p re sse d extrem ely sim ilar opinions on this point. But see, for exam ple, co m m en ts s u b m itte d b}? th e R en ew ab le F uels Association, (EFA-HQ--OAR-2012-0401-0123), the N a tio n a l C orn G row ers A sso c ia tio n (EPA---HQ-OAR-201 2-0401-0065), and Growth Energy (EPAH Q -O A R-2012-04 01-0173). 75 F or o u r a n aly sis of corn sto v er in the context of the crop residue pathw ay, see 75 FR 14670, M arch 26, 2010. dried distillers grains (DDGJ or from some other im pact on overall demand for com. We did not identify any other potential sources of significant increased GHG emissions in our proposed analysis, and no comrnenter 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, w hich will be evaluated in the context of each Individual producer registration pursuant to 40 CFR 80.1450. Producers acquire com kernel fiber for ethanol feedstock as a part of the whole corn feedstock stream entering into a com 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 w ould otherwise be converted to DDG during the dry mill corn ethanol production process. This step can he performed either before or after that matter has been separated from the com starch ethanol. In either case, the corn fiber is processed into ethanol via a separate stream from com 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 m ust 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 com starch ethanol-derived DDG that was conducted for the March 2010 RFS final rule, adjusting the analysis to account for the extracti on 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 subm itted im portant data that helped EPA evaluate the lifecycle GHG em issions of com kernel fiber. It is im portant 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 70See 75 FR 14670, M arch 26, 2010. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00021 42148 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations been fed to livestock in research settings. However, at this tim e 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 assum ption 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 w ill be im plications 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 w ould not have a significant effect on feed markets. Processors who extract the fiber from com 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 com pared to standard DDG.77 This means that, even though the physical volum e 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. Conversely, LF-DDG is an inferior feed for cattle compared to standard DDG, since rum inants benefit from ingesting corn fiber in DDG.78 Therefore, EPA expects swine and poultry producers to absorb the supply of LFDDG, w hile the cattle and dairy industry will continue to consume standard DDG. W ith this dynam ic 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 term s of nutritional content nor will there be any impact on 77 See, e.g., Kim, E.J., G.M. P arso n s, R. S rin iv asan , an d V. Singh. 2010. N u tritio n a l c o m p o sitio n . nitrogen-corrected true m etabolizable energy, and am ino acid digestibilities o f new corn distillers dried grains with solubles produced by n ew fractionation processes. Poultry Science 89, p. 44. available on the docket for this rulem aking as EPA-- H Q --OAR--2012--0401--0002. S ee also a d d itio n a l studies cited w ith in Kim et al 2010. 78 S e e S h u rso n , G.C. 2006, T h e Value o f H ighProtein Distillers Coproducts in Sw ine Feeds, D istillers Grains Quarterly, First Q uarter, p. 22, available on the docket for this rulem aking as EPA-- H Q --OAR--2 0 1 2 -0 4 0 1 -0 0 0 3 . aggregate dem and for other animal feed sources. If enough corn ethanol producers adopt fiber extraction technology, LFDDG 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 dem and for fiber supplem ents 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 dem and for LF-DDG becomes saturated, dem and 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 com 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 com 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 im pact on dem and for com, products produced from corn, or the substitutes for corn and its products. Further, we find that if com kernel fiber is not used to produce ethanol, it will be left over from the com 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 com kernel fiber to produce renewable fuel that m ight lead to significant GHG emissions, nor were any such impacts identified during public notice and comment. Based on these factors, we find that utilizing com kernel fiber to produce renewable fuel would have no significant im pacts 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 80.1426 that specify crop residue as a feedstock. b. Treatment of Com 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 com fiber, including comment on the sufficiency of current RFS regulations w ith 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 m inim is" under our current regulations.80 Those current regulations state that "producers and importers may disregard anv incidental, cle m inim is feedstock contaminants that are impractical to remove and are related to customary feedstock production and transport." 81 We received several comments noting that com kernels undergo a rigorous mechanical process designed to separate the starch from the 79 See, for e xam ple, corn, m erits su.brn.ltted by Edeniq. Inc. (EPA -H Q -O A R -2012-0401-0159), 80 N u m e ro u s c o m m en ters s u p p o rte d th is positio n . See, for exam ple, com m ents subm itted by Edeniq, Trie. (EPA--H Q --OAR--2012--0401--0159), the Am erican C oalition for Eihanol (EPA -H Q -O A R 2012-0401-0147), and Growth Energy (EPA -H Q Q A R -2012-0401-0173). 81 S e e sp ec ifica lly 8 0 .1426(f)(l j. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00022 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42149 rest of the com kernel before processing best p ractices85 to separate adhering that starch into ethanol. Despite this corn starch, in an attempt to boost process, some starch adheres to the production of cellulosic biofuel from fibrous portions of the kernel and, in a processing corn kernel fiber or for any standard com starch ethanol plant, ends other reason, the adhering starch will up in the DDG.82 Commenters argued that this adhering starch is indeed impractical to remove and is present only in small quantities,83 In the pream ble of the NPRM for this rulemaking, EPA stated that starch m ight 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 not be considered a de minimi s 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 com kernel would be incom plete, the feedstock w ould not be considered left over from processing and would not meet the definition of crop residue in 80.1401. W hile the batch of resulting fuel m ight be eligible to generate renewable biofuel RINs (D code of 6) for the starch-derived com ponent 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 80.1403(c) or (cl).Based on the existing typically less than 5 percent of the total reporting requirements listed in mass of the separated corn kernel fiber 80.1451 (b)(l)(ii),86 EPA is already feedstock.84 requiring the data necessary to identify 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 w hether 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 determ ine that RINs and volumes are generated in accordance with the regulations. nearly 100 percent cellulose, c. Processing Corn Kernel Fiber 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 determ ining when a feedstock is predom inantly cellulosic, and this is also consistent w ith 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 m inimis determ ination only applies to starch Corn kernel fiber may be used for biofuel production in m ultiple 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 noncellulosic 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 adhering to com kernel fiber that is consolidated bioprocessing method that being processed into ethanol separately converts cellulosic and non-cellulosic from corn starch ethanol. Processes that com material into sugars and/or fuel convert corn starch and com kernel products simultaneously. Second, corn fiber to ethanol in situ (as is described in detail in the next section) may not 85 D ata su b m itte d by c o m m en ters in d ic a te th a t the consider any portion of the com starch to be de minimis. Furthermore, if any producer processing corn kernel fiber rigorous m echanical process em ployed to separate corn kernel fiber and corn starch w ill typically allo w less th a n 5% of re s id u a l sta rc h to a d h ere to tire fiber after separation. See com m ents subm itted separately from corn starch fails to use by Q uad County Com Processors (EPA -H Q -Q A R 2012-0401-0063), by Edeniq, Inc. (EPA -H Q -O A R- 2 0 1 2 -0 4 0 1 -0 1 59). a n d the A m erican C oalition for 82 See c o m m e n ts su b m itte d b y Q uad C o u n ty C orn E th an o l (E P A -H Q -O A R -2 0 1 2 -0 4 0 1 -0 1 4 7 ). P rocesso rs (EFA---HQ-OAR---2012 -0 4 0 1 -0 0 6 3 ], by 88R equired inform ation includes: Q uantity of Edeniq, Inc. (E P A -H Q -Q A R -2012-0401-0159). and RINs generated, volum e of fuel produced, feedstock the A m erican C oalition for Ethanol (EPA -H Q - type, an d exact, feedstock quantity. O A R --2 0 1 2 --0 4 0 1 --0 1 4 7 ). 87 C o m kern el fiber m ay also be c o n v e rte d to fuel 83See, for exam ple, com m ents subm itted by via therm ochem ical m ethods. See section IV.A.4 for E d eniq , Inc. (E P A -H Q -O A R -2 0 1 2 -0 4 0 1 -0 1 59). details on the requirem ents for renew able fuel 84Ibid. production via therm ochem icai pathw ays. kernel fiber may be converted to sugar and/or fuel via a separate stream from the corn starch sugar and fuel conversion streams. 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 requirem ents 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 m aybe accom plished 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 com starch ethanol fermentation process, yielding com 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 com 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 sim ultaneous 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 com starch ethanol fermentation process. However, we believe this small am ount of com starch contam inant 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 sp ec ifica lly 80.1 4 2 6 (f) (1). Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00023 42150 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 he 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 w heat 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 im pacts of several othercrop products, including citrus residue, rice straw, and w heat straw', were expected to be sim ilar 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. EPA sought comment on whether these feedstocks should be considered crop residues, whether these feedstocks w ould 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 39 See Table IV JJ.3 --1-- F eedstocks T h a t M ay Q ualify as C rop R esid u e. 78 FR, 36056--36057. fune 14. 2013. 90 See EPA--H Q --OA R--2005--0 1 6 1 --3173.2, E F A H Q --OAR--2005--0 1 6 1 --3173.3, a n d E P A -H Q -O A R 2005--0161--3173.4, u n d e r th e L ifecycle R esults Docket for the M arch 2010 RFS Final Rulem aking. 91 S ev eral co rn m en ters e x p re sse d extrem ely sim ilar opinions on this point. But see, for exam ple, com m ents subm itted by the Renewable Fuels Association, (EPA -H Q -G A R -2012-0401--0123), the N a tio n a l C orn G row ers A sso c ia tio n (EPA--H Q -- O A R-2012-0401-0065), and Growth Energy (EPAH Q -O A R -2012-0401-0173). 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. 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 im pacts 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. 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 im plications 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. 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 m anner 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 im pact profiles to com 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 91 See co m m en ts s u b m itte d by N e x S te p p e tnc. (E PA -H Q -O A R -20 1 2 -0401-0153). See also 75 FR 14682, M arch 26, 2010 and 78 FR 36042, June 14, 2013. 93 See co m m en ts su b m itte d by the N atio n al Sorghum P ro d u ce rs (E)PA--HQ--O A R -2 012--0401 -- 0065), lo g en C o rp o ra tio n (EPA--H Q --OAR--2012-- 0 4 0 1 -0 1 3 5 ), N e x S te p p e Inc, (EP A -H Q -O A R -2 0 1 2 0401-0153). 94 See co m m en ts s u b m itte d b y N ovozym es N orth A m erica Inc. (EPA -H Q -O A R -2 0 1 2 -0 4 0 1 -0 0 8 8 ), ICM (E PA -H Q -O A R -2012-0401-0114), N exSteppe Inc. (EPA -H Q -O AR-2012-0401-0153), Growth Energy (E PA -H Q -O A R -2012-0401-0173), 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 im pacts to those of corn kernel fiber, and we similarly consider them to be crop residues under those circumstances. Commenters also pointed out that we identified wheat straw and rice straw as crop residues in the NPRM' b ut did not identify other grain straws (e.g., oat straw, barley straw) as residues, even though these products would reasonably seem to have sim ilar GHG im pact profiles to w heat straw and rice straw.95 EPA has determ ined that these straws do indeed have sim ilar GHG im pacts to those of wheat straw and rice straw. All of them have sim ilarly insignifi cant markets, insignificant effects on demand for the crop from w hich 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. 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 w ith 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 pathw ay 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 95See c o m m e n ts su b m itte d b y logen. Corporation. (EP A -H Q -O A R -2012-0401-0135}, 96 O u r a n aly sis of c o rn k e rn e l fiber as a crop resid u e is d iscu ssed in sectio n IV.D.2 of this pream ble. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00024 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42151 to Table IV.D.3-1 on our Web site for the convenience and education of stakeholders. We acknowledge that there m ay be other crop products w hich were not brought to our attention during this rulemaking process and w hich are not included in Table IV.D.3-1, hut w hich m ay m eet the defini tion of crop residue as we are clarifying it in today's final rulemaking. Further details regarding how ERA m ay evaluate these crop products can be found in section IV.D.l and section IV.D.2 of this final rulemaking. Additionally, stakeholders may also w ant to consult section IV.D.4 of this final rulemaking, which describes new RKR requirem ents for producers who w ish to use crop residue as a feedstock for renewable fuel production. 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, Soy beans, 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 w hich 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 w hen using a crop residue pathway, we are im plem enting additional RRR requirements for producers using crop residue as feedstock under any approved pathway. a. Registration R equirem ents 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 subm itted 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 defini tion of crop residue, then referencing the relevant EPA document will likely he sufficient justification. However, if a crop product is not one that EPA has previously identified as a crop residue, then EPA intends to evaluate w hether 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 w ish 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 w ish to utilize a new crop product as feedstock in pathw ays 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 m onths 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 requirem ents 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. E. Amendments to Various RES Compliance Related Provisions We are finalizing a num ber of changes to the RFS regulations related to com pliance, 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 80.1416, 80.1451 and 80.1454. and 97 At the tim e of this ru le m a k in g . RIN generators w ould report this inform ation via quarterly report num ber RFS080L See http://w w w .epa.gov/oiaq/ fuels/reporiing/rfs.him for further details. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00025 42152 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 he approved by an RCO. These com m ents were directed at EPA's adm inistrative procedures and registration system, rather than the regulatory responsibilities of the RCO with regard to compliance w ith RFS standards. EPA needs to evaluate the registration process, which may include potential m odifications to the registration system, for opportunities to m inim ize burden on RCOs and to better differentiate an RCO's roles w ith respect to program compliance versus administrative roles in our registration system. Based on these com m ents 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 21'l(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 M arch 26, 2010 regulations im plem enting the EISA amendm ents 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 80.1441 (ej(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 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 w ould 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 perm itted 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 w ould 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 m uch as 8 years ago. Considering this concern and the intent in our proposal to treat sim ilarly 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 w hich 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 w ill better address our primary concern from proposal of treating refineries w ith similar performance the same. We believe that these changes reasonably im plement the statutory definition of "small refinery," w hich indicates that the 75,000 barrel aggregate daily crude oil throughput is for " a calendar year," but does not specify w hich 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 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 lo wer threshold than w hat industry considers "sm all." 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 am ount 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 com m enter's suggested am ount 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 80.1450---Registration Requirements EPA is adding a new paragraph (h ] to 80.1450 that describes the circum stances under w hich 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. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00026 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 w ithin 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 80.1452 for twenty-four calendar months, then EPA will initiate this administrative process. In addition, for this particular circumstance, if a party responds w ithin 14 days of EPA notification of an intent to deactivate registration with a letter stating that they w ish to rem ain 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 80.1450, if the party fails to submit any required compliance report under 80.1451, if the party fails to meet the requirements related to EMTS under 80.1452, or if the party fails to meet the requirem ents related to attest engagements under 80.1454. EPA will provide written notice to the owner or responsible corporate officer (RCO) that it intends to deactivate the com pany's registration and would allow the com pany 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 w ill be possible following the submission or updating of all required information and reports. 4. Changes to 80.1452--EPA M oderated 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 w ith 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 qualify for registration under 80.1403 sufficient resources to modify impacted would be very few, if any. We are also systems. finalizing the revision of the definition 5. Changes to Facility's Baseline Volume To A llow "Nameplate Capacity" for Facilities Not Claiming Exemption From the 20% GHG Reduction Threshold of baseline volume to include "nameplate capacity," add a new definition for "nameplate capacity" to 80.1401, and include conforming amendments to the registration As a requirem ent of registration under requirem ents of 80.1450. The the RFS program, each renewable fuel am endm ents today will allow7the initial producer and foreign ethanol producer registration of certain facilities using must establish and provide documents nameplate capacity, but EPA interprets to support its facility's baseline volume the requirem ents for registration as defined in 80.1401. This is either updates under 80.1450(d)(3)(i) and (ii) the perm itted capacity or, if perm itted to require the calculation and capacity cannot be determined, the actual peak capacity of a specific subm ission of actual peak capacity as part of the registration updates required renewable fuel production facility on a in those sections where the facility has calendar year basis. After the operated for a sufficient time period to promulgation of the March 26, 2010 RFS rule, we have received many requests from com panies asking EPA to allow;' them to use their nameplate or "design" allow that calculation. 6. Changes to 80.1463--W hat penalties apply under the RFS program? capacity to establish their facility's Preventing the generation and use of baseline volume due to either the invalid RINs and encouraging rapid facility being exempt from obtaining a retirem ent and replacem ent of invalid permit, and thus not able to determ ine RINs is crucial to the integrity of the their perm itted capacity, or the facility RFS program. The RFS regulations not starting operations, or not being include various provisions related to operational for a full calendar year to prohibited acts, liability for violations, produce actual production records to and penalties for those violations. establish actual peak capacities. Because Section 80.1460 sets forth the the regulations currently only allow a prohibited acts for the renewable fuels facility's baseline volume to be program. Section 80.1461(a) states that established by a limit stated in a permit any person who violates a prohibition in or actual production records for at least 80.1460(a) through (cl) is liable for the one calendar year, facilities that had violation of that prohibition, and neither a perm it or sufficient production 80.1461(b) provides the liability records had difficultly registering under provisions for failure to m eet other the RFS program. EPA proposed provisions of the regulations. The allowing use of nam eplate capacity for penalty provisions of the regulations at registration, where perm itted capacity 80.1463(a) state that any person who is or actual peak capacity could not be liable for a violation under 80.1461 is determined. There were no adverse subject to a civil penalty as specified in comments regarding this proposal. sections 205 and 211(d) of the Clean Air Therefore, in this rulemaking we are Act (CAA), for every day of each such finalizing our proposal to allow a violation and the amount of economic facility to use its "nameplate capacity" benefit or savings resulting from each to establish its facility's baseline volume violation. Section 80.1463(c) provides for the purposes of registration. The that " any person . . . is liable for a "nameplate capacity" may be used only separate day of violation for each day if the facility (1) does not have a permit such a requirem ent rem ains or there is no lim it stated in the perm it unfulfilled." to establish their perm itted capacity; (2) As described in the proposal, EPA has not started operations or does not interprets these statutory and regulatory have at least one calendar year of penalty provisions to give the Agency production records; and (3) does not the authority to seek penalties against claim exem ption from the 20 percent parties generating, transferring or GHG threshold under 80.1403. Due to causing another person to generate or the complexity of the exemption transfer invalid RINs for the day of the provision provided under 80.1403 and party's action and each day subsequent the added flexibility that facilities to the party's action that an invalid RIN claiming this exemption are allotted is available for sale or use by a party under the program, we are finalizing our subject to an obligation under the RFS decision that the extension of this program to acquire and retire RINs. For option not be available to facilities example, for a RIN generator, this time claiming an exem ption under 80.1403. period typically runs from the date of Additionally, by this stage in the RFS invalid RIN generation until either program, the facilities that would effective corrective action is taken by Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00027 42154 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations the RIN generator to remove the invalid RIN from the m arketplace or a party uses the RIN to satisfy an RVO or other requirem ent to retire RINs, This is consistent with the CAA approach of assessing penalties for every day of a violation, consistent w ith EPA's historic approach under the fuels regulations (see 80.615], and will encourage renewable fuel producers that generate invalid RINs to prom ptly take corrective action. EPA received comments from two parties in opposition of the proposed regulation in 80.1463. Both com m enters 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 80.1431(b)(1) state that " Upon determ ination by any party that RINs owned are invalid, the party m u s t. . . retire the invalid RINs in the applicable RIN transaction reports . . . for the quarter in w hich 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 w ill minim ize potential penalties and incentivize parties who com m itted a prohibited act at 80.1460 (b)(1)--(4) and (b)(6) to identify invalid RINs to those owning parties so they can retire RINs as required in 80.1431(b)(1) prior to an obligated party or renew able 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 w ould 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. A lthough 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 (cl) to 80.1463 w hich 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 80.1463. The am endm ents state that any person liable under 80.1461(a) for a violation of 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 rem ains available for use for compliance purposes, and EPA has the authority to seek the maximum statutory penalty for each day of violation. F. M inor Corrections to EFS Provisions We are finalizing a number of corrections to address minor definitional issues that have been identified in implementing the RFS program. Reneiva ble Biom ass: We did not receive any significant comment on our proposed clarification to the definition "renewable biom ass" in 80.1401 and thus are finalizing proposed changes to make clear that biomass obtained in the vicinity of buildings means biomass obtained w ithin 200 feet of the buildings. The pream ble 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. "N aphtha": We did not receive any significant comment on our proposed clarification to the definition "naphtha" in 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 80.1450 stating that any registration materials subm itted 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 80.1451, w hich states that any reports subm itted 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 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, w hich is already the established time period for keeping records under the existing RFS program. Correction o f Typographical Errors: No comments were received on our proposed corrections to typographical errors, thus we are finalizing typographical and grammatical corrections in 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 80.1465 to 80.1466. We are also am ending paragraph (d)(3)(h) to correct a typographical error. The current regulation cites 80.65(e)(2)(iii), which does not exist. The correct citation is 80.65(f)(2)(iii). V. Amendments to the El 5 Misfueling Mitigation Rule In the NPRM, we proposed several m inor corrections and other changes to the E15 misfueling mitigation rule (E15 MMR) found at 40 CFR part 80, subpart N. A. Changes to 80,1501--Label We proposed to correct several m inor errors in the description of the El 5 label required by the E15 MMR at 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 E l 5 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 E l5 label in the E l5 MMR. However, some comments expressed concerns about the potential costs to retail stations already lawfully selling E l5 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 law fully offered E l 5 to date to ensure that their labels m et the intent of the E l 5 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 El 5 label (e.g., change the word " ATTENTION" to "WARNING"). The Agency thoroughly explained its rationale for its label Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00028 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42155 design in the E l5 MMR and was not intending to make substantive changes to the E l5 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 E l5 labeling regulations at 80.1501 as proposed. B. Changes to 80.1502--E15 Survey We proposed two changes to the survey requirem ents found at 80.1502. First, we proposed to clarify that E l 5 surveys need to sample for Reid vapor pressure (RVP) only during the high ozone season as defined in 80.27(a)(2)(ii) or during any tim e RVP standards apply in any state implementation plan approved or promulgated under the Clean Air Act. EPA did not inten d 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 w ithin 24 hours of the laboratory receiving this sam ple (see 76 FR at 44423, July 25, 2011). EPA has since learned that more time may be needed for reporting of noncom pliant samples since it m ay take several days for analysis of the sample to be completed. We are therefore requiring that noncom pliant sam ples be reported to EPA w ithin 24 hours of being analyzed. Comments received on these two changes to the El 5 survey requirem ents were overwhelmingly supportive. Therefore, EPA is finalizing the changes to the E l5 survey requirem ents in 80.1502 as proposed. C. Changes to 80.1503-- Product Transfer Documents In the NPRM, we proposed certain minor changes to the product transfer docum ent (PTD) requirem ents found in 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 con ventional 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 recei ved com m ent 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), w hich raised a num ber of questions regarding the E l 5 MMR PTD requirem ents.98 Today's regulatory change only addresses one of the questions that AFPM raised regarding the El 5 MMR PTD requirements in its petition. Today's action was not m eant to address all of the questions raised by AFPM regarding the E l5 MMR PTD requirements. It should be noted that most of the questions rai sed in AFPM's petition did not require changes to the regulations and were simply questions on the im plem entation and applicability of the E15 MMR requirem ents. For example, AFPM was unclear on what the wintertim e PTD requirements for gasoline/blendstocks upstream of an ethanol blending facility are under the E l 5 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 E l5 MMR PTD requirements in a future rulemaking that address some or all of the remaining questions raised in AFPM's petition for reconsideration. We also sought comment on potential ways of streamlining the PTD language required at 80.1503. We received one comment that suggested substantial changes to the PTD language requirements. For example, the commenter suggested removing most of 98 See S ep tem b er 15, 2011. le tte r from. AKPM entitled, "Request for Partial R econsideration of E PA 's "M isfu elin g R u le " 70 FR 44406 [July 25, 2011)," Docket EPA-HQ-OAR-2012-041-G041. 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, w hich 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 El 5 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 80.1503 in today's action, we may revisit the streamlining of El 5 MMR PTD language in a future rulemaking. D, Changes to 80.1504-- Prohibited Acts In the NPRM, we proposed a slight rewording of 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 w ith 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 E l5 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 80.1504 to allow for the better enforcement of ethanol content requirements at blender pumps. The addition of new prohibited activities to 80.1504 is outside the intended scope of today's action. Therefore we are finalizing the slight rewording of the prohibited activities language of 80.1504(g) as proposed. E. Changes to 80.1500-- Definitions In response to the August 17, 2011 petition for reconsideration submitted by NPRA, now AFPM, w hich requested the Agency, under CAA section 307(d)(7)(B), reconsider certain portions of the E l 5 MMR, we granted AFPM's petition for reconsideration on the issue of the definitions of E10 and E15 in the E l 5 MMR. AFPM expressed concern Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00029 42156 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations that the Agency had defined E10 and E l5 in the E l5 MMR in a way that would change how ethanol concentrations are determ ined for regulatory purposes. While EPA did not intend the definitions of E10 and E15 in the E l5 MMR to have this effect, we proposed changes to the regulations to avoid this perceived impact. Specifically, we proposed to add a new section, 80.1509, containing language that clearly states that when ethanol concentrations are m easured for compliance testing purposes for 40 CFR part 80, suhpart N, the applicable ethanol concentration value will be rounded using the rounding procedures at 80.9. We also proposed m odifications 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 80.1508. Comments received on this issue generally supported EPA's approach to continue to allow the rounding of test results to determine w hether fuel samples had adhered to applicable ethanol content sam ples under 80.9. One cornmenter 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 cornmenter argued that making such a change w ould allow parties to manufacture gasoline-ethanol blended fuels containing more than 10 volum e percent ethanol without taking appropriate measures to ensure that vehicles and engines not covered by the E l5 partial waiver decisions were not misfueled by gasoline-ethanol blended fuels containing more than 10 volume percent ethanol. We continue to beli eve that it is necessary to make our intent clear that parties that blend gasoline-ethanol blended fuels w ith more than 10 volume percent ethanol and up to 15 volum e percent ethanol must adhere to the requirements for such fuels under the E l 5 MMR. Our approach w ill continue to enforce ethanol content standards as we have in the past, through the appropriate use of rounding procedures specified in the regulations under 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 volum e percent ethanol would necessitate further action by the party m anufacturing such fuel. Therefore, we are finalizing the changes to the definitions of the E15 MMR and the new language under 80.1509 as proposed. Additionally, in order to remain consistent w ith requirem ents for evidence used to determine compliance w ith requirements in other fuels programs, we are not finalizing the proposed changes to 80.1508, which covers the evidence responsible parties and the Agency can use to demonstrate compliance with E l5 MMR requirements. VI. A m endm ents to the U ltra Low Sulfur Diesel (ULSD) Survey In the NPRM, EPA proposed a reduction in the m inim um sample size for the ULSD survey program from 5,250 annual samples to 1,800 sa m p le s." We argued that com pliance 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 m inim um annual sampling rate of 1,800 samples. Public comments received on the proposed reduction in sampling rate were overwhelming supportive. Most comments suggested that EPA reduce the m inimum 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 " T h e ULSD rule includes a provision that deem s branded refiners liable for violations of the ULSD sulfur standard that are found at retail outlets d isp la y in g th e re fin e r's b ra n d (40 CFR 80.612). The regulations include defense provisions. One e le m en t o f a b ra n d e d re fin e r's d efen se to s u c h v io la tio n s Is that it m ust nave a p e riodic sam p lin g and testing program at th e retail level (40 CFR 80.613(b) a n d (d)). The regulations also set forth an alternative sam pling and testing defense elem ent provision for branded refiners. This alternative defense elem ent pro v isio n (40 CFR 80.613(e)) allows a branded refiner to m eet the com panyspecific dow nstream periodic sam pling and testing elem ent of its defense by participating in a survey c o n so rtiu m th a t pays a n in d e p e n d e n t su rv ey o r to sam ple diesel fuel at retail outlets nationw ide. Tire n u m b e r o f sam p les th a t are tak en e ac h year is determ ined by a statistical form ula th at is b ased in part on the previous year's com pliance rate, in addition, the regulations set a floor of 5,250 sam ples that m ust be taken in an annual survey cycle regardless of the sam ple num ber that w ould be calculated using the regulatory formula. 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 sam ples 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 noncompliance, even taking into account today's high com pliance rates. Although we acknowledge that a further reduction in the sample size could reduce costs even further, there is a point where the num ber of sam ples per year w ould 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 cornmenter, citing high costs, suggested that we remove the alternative affirmative defense altogether. It is im portant 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 m aintain 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 com pliance rates and branded refiner interest in maintaining the ULSD survey program to determ ine whether further reduction in sample sizes is necessary. VII. Statutory and Executive Order Reviews A. Executive Order 12888: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulator}' Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00030 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 recom m endations have been docum ented in the docket for this action, B. Paperwork Reduction A ct The information collection requirements in this rule have been subm itted for approval to the Office of Management and Budget (OMB) under the Paperw ork Reduction Act, 44 U.S.C. 3501 et seq. The Information Collection Request (ICR) docum ent prepared by EPA has been assigned EPA ICR num ber 2469.01. A supporting statem ent 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. 20600640, and 2060-0675). This action contains recordkeeping and reporting that m ay affect the following parties under the RFS regulation: RIN generators (producers, importers), obligated parties (refiners), exporters, and parties who own or transact RINs. We estim ate 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 estim ate that 2,000 respondents may be subject to the inform ation collection. We estim ate an annua] 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 num bers for EPA's regulations in 40 CFR are listed in 40 CFR Part 9. W hen this ICR is approved by OMB, the Agency will publish a technical am endm ent 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 (REA) 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 w ill 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 governm ent 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 dom inant 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 am endm ents 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 E l 5 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. U nfunded M andates Reform A ct This rule does not contain a Federal mandate that may result in expenditures of $100 m illion 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 m illion 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 im plications. It w ill 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 betw een ERA 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 w ould 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. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00031 42158 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations G. Executive Order 13045: Protection o f Children From Environmental Health Risks and Safety Risks EPA interprets EO 13045 (62 FR 19885, A pril 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 environm ental standard intended to mitigate health or safety risks. II, 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 renew able fuel, E l 5, 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 positi ve 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. N ational 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 perm it 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 w ith a D code of 3 or a D code of 7 using a process described in 80.1426(f)(15) (i)(A) or 80.1426(f)(15)(i)(B), m ust 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. /. Executive Order 12898: Federal Actions To Address Environmental Justice in M inority 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 perm itted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse hum an 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 m inority 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 A ct 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 ru le" as defined by 5 U.S.C. 804(2). This rule will be effective August 18, 2014. L, Clean A ir A ct Section 307(d) This rule is subject to section 307(d) of the CAA. Section 307(d)(7)(B) provides that " [ojnly an objection to a rule or procedure which was raised with reasonable specificity during the period for publi c 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 w ithin [the period for public commentj or if the grounds for such objection arose after the period for public comment (but w ithin 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 dem onstration to the EPA should submit a Petition for Reconsideration to the Office of the A dm inistrator, U.S. EPA, Room 3000, William Jefferson Clinton Building, 1200 Pennsylvania Ave., NW., W ashington, 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., W ashington, 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. A dditional 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. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00032 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42159 D ated: July 2, 2014. Gina M cCarthy, Administrator. Lot the reasons set forth in the preamble, title 40, chapter I of the Code of Federal Regulations is am ended as follows: PART 80-- REGULATION OF FUELS AND FUEL ADDITIVES 1. The authority citation for part 80 continues to read as follows: A uthority: 42 U.S.C. 7414, 7521, 7542, 7545 and 7601(a). Subpart I--[Amended] 2. Section 80.618 is am ended by revising the "W here" statement defining the value of "n " in paragraph (e)(4)(v)(A) to read as follows: 80,613 W hat defenses apply to persons deemed liable for a violation of a prohibited act under this subpart? k k k k * (e) * * * [4] * * * (v) * * * (A) * * * W here: n ~ m inim um num ber of sam ples in a year long survey series. However, in no ease shall n be larger than 9,600 or sm aller than 1,800. k k k k k Subpart M--[Amended] 3. Section 80,1401 is am ended as follows: 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. b. By revising the definitions of "Biogas", "Crop residue", "Energy cane", "Naphtha", "Renewable biomass", and "Small refinery". 80,1401 Definitions. * * k -k k Adjusted cellulosic content means the percent of organic material that is cellulose, hemiceiiuiose, and lignin. * ** * * Agricultural digester means an anaerobic digester that processes predominantly cellulosic materials, including animal manure, crop residues, and/or separated yard waste. k k k k k 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. k k k k k 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. k k k k k Energy cane means a complex hybrid in the Saccharurn genus that has been bred to m aximize cellulosic rather than sugar content. For the purposes of this subpart: (1) Energy cane excludes the species Saccharurn 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. k k k k k Nameplate capacity means the peak design capacity of a facility for the purposes of registration of a facility under 80.1450(b)(l)(v)(C). Naphtha means a blendstock or fuel blending component falling w ithin the boiling range of gasoline w hich is composed of only hydrocarbons, is com m only or com m ercially know n as naphtha and is used to produce gasoline through blending. k k k k k Renewable biomass means each of the following (including any incidental, de minim is contam inants that are im practical 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 m aterial and animal byproducts. (4) Slash and pre-com m ercial 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 m atter that is available on a renewable or recurring basis) obtained from w ithin 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 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. k k k k k Renewable liquefied natural gas (LNG) means hiogas 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. * k k k k Sm all refiner}''m eans a refinery for w hich the average aggregate daily crude oil throughput (as determ ined by dividing the aggregate throughput for the calendar year by the number of days in the calendar year) does not exceed 75,000 barrels. k k k k k 4. Section 80.1415 is amended by revising paragraphs (b)(5) and (c)(1) to read as follows: 80.1415 How are equivalence values assigned to renewable fuel? k k k k k (b) * * * (5) 77,000 Btu (lower heating value) of com pressed natural gas (CNG) or liquefied natural gas (LNG) shall represent one gallon of renewable fuel w ith an equivalence value of 1.0. k k k k k (c) * * * (1) The equivalence value for renewable fuels described in paragraph (b)(7) of this section shall be calculated using the following formula: Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00033 42160 Federal Register/ Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations EV = (R/0,972) * (EC/77,000) W here: EV - E quivalence Value for the renew able fuel, ro u n d e d to the n e are st ten th , R = Renewable content of the renew able fuel. This is a m easure of the portion of a renewable fuel that came from renewable biomass, expressed as a fraction, on an energy basis. EC - E nergy c o n te n t of the re n ew a b le fuel, in Btu per gallon (lower heating value), * * * * * m 5. Section 80.1416 is am ended by revising paragraph (d) to read as follows: 80.1416 Petition process for evaluation a. By revising rows K, L, M, N, P, and of new renewable fuels pathways. Q of Table 1 to 80.1426. k k k k -k h. By adding a new row T to Table 1 (d) A D code m ust be approved prior to 80.1426. to the generation of RINs for the fuel in c. By revising paragraphs (f)( 3)(vi), question. During petition review EPA (f)(4)(i)(AK2), (f)(5)(v), (0(10), and will evaluate whether a feedstock meets the 75% cellulosic content threshold allowing cellulosic RINs to be generated for the entire fuel volume produced. cl. By adding new paragraphs (f)(15) and ili; iU). The A dm inistrator m ay ask for 80.1426 How are RINs generated and additional inform ation to complete this assigned to batches of renewable fuel by evaluation. * * * * * renewable fuel producers or importers? * k k k k 6. Section 80.1426 is am ended as follows: if) * * * (1 j * * * Table 1 to 80.1426-- Applicable D C o d e s fo r Each Fuel Pathway for Us e in G enerating RINs Fuel type Feedstock Production process requirements D-Code K Ethanol Crop residue, slash, pre-commercial Any process that converts cellulosic biomass 3 thinnings and tree residue, swltchgrass, to fuel. miscanthus, energy cane, Arundo donax, Pennisetum purpureum, and separated yard waste; biogenic components of sepa rated MSVt/; cellulosic components of sepa rated food waste; and cellulosic compo nents of annual cover crops. L Cellulosic diesel, jet Crop residue, slash, pre-commercial Any process that converts cellulosic biomass 7 fuel and heating oil. thinnings and tree residue, swltchgrass, to fuel. miscanthus, energy cane, Arundo donax, Pennisetum purpureum, and separated yard waste; biogenic components of sepa rated MSVt/; cellulosic components of sepa rated food waste; and cellulosic compo nents of annual cover crops. M Renewable gasoline Crop residue, slash, pre-commercial Catalytic Pyrolysis and Upgrading, Gasifi 3 and renewable gas thinnings, tree residue, and separated yard cation and Upgrading, Thermo-Catalytic oline blendstock. waste; biogenic components of separated Hydrodeoxygenation and Upgrading, Direct MSW; cellulosic components of separated Biological Conversion, Biological Conver food waste; and cellulosic components of sion and Upgrading utilizing natural gas, annual cover crops. blogas, and/or biomass as the only proc ess energy sources providing that process used converts cellulosic biomass to fuel; any process utilizing biogas and/or bio mass as the only process energy sources which converts cellulosic biomass to fuel. N Naphtha Swltchgrass, miscanthus, energy cane, Gasification and upgrading processes that 3 Arundo donax, and Pennisetum purpureum. converts cellulosic biomass to fuel. P Ethanol, renewable The non-celluiosic portions of separated food Any 5 diesel, jet fuel, heat waste and non-ceilulosic components of ing oil, and naphtha. annual cover crops. Q Renewable Com Biogas from landfills, municipal wastewater Any 3 pressed Natural treatment facility digesters, agricultural di Gas, Renewable gesters, and separated MSW digesters; Liquefied Natural and biogas from the cellulosic components Gas, Renewable of biomass processed in other waste di Electricity. gesters. T ...... Renewable Com- Biogas from waste digesters ........................... Any 5 pressed Natural Gas, Renewable Liquefied Natural Gas, and Renew able Electricity. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00034 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 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 determ ined according to the formulas in Table 4 to this section. Table 4 to 80.1426 Number of gallon-RINs to assign to batch-RINs with I) codes dependent on feedstock D code to use in batchRIN Number of gallon-RINs D= 3 fe3 V R I N , C B ~~ E V * % - F E ^ + F 4 + F r + p E f > + F E j l D= 4 I) - 5 D= 6 FF VnrKl 3B n -- E V * V * --------------------------------- ----------------------------- h l A 'b b D s FEz + F E 4 + F E* + FEf, + F E 7 FE v ,n = EV * V * R 1 N 'A B s F E 3 + F E * + FES + F E f, + F E 7 FF V RSN r f = E V * V , * '6 R ' * 'R h F E ?, + F E 4 + F E * + F E f , + F E 7 FE V m \rn = E V * V , * 7 R l N 't D 6 F E , + F E a + F 'q + F E f , + F E 7 W here: Vrjn,cb = RIN volum e, in g allons, for use in determ ining the num ber of gallon-RINs that shall be generated for a batch of cellulosic biofuel w ith a D code of 3. Vrin,bbd ~ RIN v o lu m e, in g allo n s, for u se in determ ining the num ber of gallon-RINs that shall be generated for a batch of b iom ass-based d iesel w ith a D code of 4. Vrtn,ab - RIN v o lu m e, in g allons, for u se in determ ining the num ber of gallon-RINs that shall be generated for a batch of a d v an c ed biofuel w ith a D code of 5. Vrjn.rf - RIN v o lu m e, in g allons, for u se in determ ining the num ber of gallon-RINs that shall be generated for a batch of renewable fuel w ith a D code of 6 . Vrin.cd ~ RIN v o lu m e, in g allons, for u se in determ ining the num ber of gallon-RINs that shall be generated for a batch of c ellu lo sic d iesel w ith a D code of 7, EV = E quivalence value for the renew able tue 1 per 80,1415, V - S ta n d ard ize d volum e of the b atch of renew able fuel at 60 F, in gallons, calculated in accordance w ith paragraph (f)(8 ) of this section, FE3 - Feedstock energy from all feedstocks whose pathw ays have been assigned a D code of 3 u n d e r T able 1 to th is section, or a D code of 3 as approved by the A dm inistrator, in Btu. FE.j - F eedstock energy from all feedstocks whose pathw ays have been assigned a D code of 4 under Table 1 to this section, or a D code of 4 as approved by the A dm inistrator, in Btu, FE5 = Feedstock energy from all feedstocks whose pathw ays have been assigned a D code of 5 under Table 1 to this section, or a D code of 5 as approved by the A dm inistrator, in Btu, FEg - F e e d sto ck energy from a ll feedstocks whose pathw ays have been assigned a D co d e of 6 u n d e r T able 1 to th is section, or a D code of 6 as approved by the A dm inistrator, in Btu. FE7 = Feedstock energy from all feedstocks whose pathw ays have been assigned a D code of 7 un d er Table 1 to this section, or a D code of 7 as approved by the A dm inistrator, in Btu. Feedstock energy values, FE, shall be calculated according to the following formula: FE = M * (1 - mj * CF * E W here: FE = F eedstock energy, in Btu. M - Mass of feedstock, hi pounds, m easured on a daily or per-batch basis, in - Average m oisture content of the feedstock, in mass percent. CF - Converted Fraction in annual average m ass percent, except as otherw ise provided by 80.1451(h)(l)(ii)(U), representing that portion of the feedstock that is converted into renew able fuel by the producer. E - Energy content of the com ponents of the feedstock that are converted to renew able fuel, in annual average Btu/lb, d e te rm in e d acco rd in g to p a rag ra p h (f)(7) of this section. (4) * * * (13 * * * (A)* * * (2) The value of FE for use in paragraph (f)(4)(i)(A)(/) of this section shall be calculated from the following formula: FE = M * (1 in) * CF * E W here: FE - Feedstock energy, in Btu. M = Mass of feedstock, in pounds, m easured on a daily or per-batch basis, m = Average m oisture content of the feedstock, in mass percent. CF - Converted Fraction in annual average mass percent, except as otherw ise provided by 80.1451(b)(l)(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 com ponents of the feedstock that are converted to fuel, in annual average Btu/lb, determ ined according to p a rag ra p h (f)(7) of this section. ***** (5) * * * (v) The num ber 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)(5j(i)(C) of this section shall be determined according to the following formula: VRIN :: EV * VS * R W here: Vrin = RIN v o lu m e, in g allons, for u se in determ ining the num ber of cellulosic biofuel gallon-RINs that shall be generated for the batch. EV = Equivalence value for the hatch of renew able fuel per 80.1415. Vs = Standardized volum e of the batch of renew able fuel at 60 F, in gallons, calculated in accordance w ith paragraph (f)(8 ) of this section. R = The calculated non-fossil fraction of the fuel as m easured by a carbon-14 dating test m ethod as provided in paragraph (f)(9) of this section, except th at for Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00035 42162 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations biogas-derived fuels m ade 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 docum entation 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, (11) 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 w hich RINs may be generated if all of the following apply: (A) The CNG/LNG is produced from renewable biomass and qualifies for a I) 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 w ritten 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. (H)(1) For purposes of this section, electricity that is introduced into a commercial distribution system (transmission grid) is considered renewable fuel for w hich RINs may be generated if all of the following apply: (A) The electricity is produced from renewable biomass and qualifies for a I) 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 (H) No other party relied upon the obtained affidavits from all parties volume of biogas/CNG/LNG for the selling or using the electricity as creation of RINs. transportation fuel. (iii) For renewable electricity that is (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. 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. ***** (E) The am ount of electricity sold for (15) A pplication o f form ulas in use as transportation fuel corresponds to paragraph (f){3)(vi) o f this section to the am ount of electricity derived from certain producers generating D3 or D7 biogas that was placed into the RINs. commercial distribution system. (i) If a producer seeking to generate D (F) No other party relied upon the code 3 or D code 7 RINs produces a renewable electricity for the creation of single type of renewable fuel using two RINs. or more feedstocks converted (ii) For purposes of this section, CNG sim ultaneously, and at least one of the or LNG produced from biogas that is feedstocks does not have a minimum introduced into a commercial 75% average adjusted cellulosic distribution system is considered content, one of the following additional renewable fuel for w hich RINs may be requirem ents apply: generated if all the following apply: (A) If the producer is using a (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 thermochemical process to convert cellulosic biomass into cellulosic biofuel, the producer is subject to additional registration requirements the Administrator. (B) The RIN generator has entered into a w ritten 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 under 8Q.1450(b)(l)(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 80,1450(h)(l)(xiii)(B) and reporting requirements under 80.1451(b)(l)(ii)(U). (ii) [Reserved] (16) Renewable fu e l 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 other purposes. to any other applicable requirements): (D) The biogas/CNG/LNG was injected (i) Registration requirem ents under into and withdrawn from the same 8Q.1450(b)(l)(xv). commercial distribution system. (ii) Reporting requirem ents under (E) The biogas/CNG/LNG that is 80.145'l(b)(l)(ii)(V). ultim ately withdraw n from the (iii) Recordkeeping requirem ents commercial distribution system for use under 80.1454(s). as transportation fuel is w ithdraw n in a * * * * * manner and at a time consistent with the transport of the biogas/CNG/LNG between the injection and withdrawal points. (F) The volum e and heat content of biogas/CNG/LNG injected into a pipeline and the volume of biogas/GNG/ m 7. Section 80.1440 is am ended as follows: a. By revising the section heading. b. By revising paragraph (a). c. By revising paragraph (d). d. By revising paragraph (e). LNG w ithdraw n to make a transportation fuel are measured by 80.1440 What are the provisions for blenders who handle and blend less than continuous metering. 250,000 gallons of renewable fuel per year? (G) The am ount of fuel sold for use as (a) Renewable fuel blenders who transportation fuel corresponds to the handle and blend less than 250,000 amount of fuel derived from biogas that gallons of renewable fuel per year, and was placed into the commercial who do not have one or more reported distribution system. or unreported Renewable Volume Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00036 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42163 Obligations, are perm itted to delegate their RIN-related responsibilities to the party directly upstream of them who supplied the renew able 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 80.1450(e), and m ay 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 RINrelated responsibilities, or own RINs, w ill be subject to all requirem ents stated in paragraph (b) of this section, and all other applicable requirements of this subpart M. ** *** 8. Section 80.1441 is am ended by adding paragraph (e)(2)(iii) to read as follows: 80.1441 Small refinery exemption. ** *** * * * * * * (ill) In order to qualify for an extension of its small refinery exemption, a refinery must meet the definition of "small refinery" in 80.1401 for the most recent full calendar year prior to seeking an extension and m ust be projected to meet the definition of "small refinery" in 80.1401 for the year or years for w hich an exemption is sought. Failure to meet the definition of small refinery for any calendar year for w hich an exemption was granted would invalidate the exemption for that calendar year. * * * * * 9. Section 80.1450 is am ended as follows: m a. By revising paragraph (b)(l)(ii). b. By revising paragraphs (b)(l)(v)(C) and (b)(l)(v)(D), and by adding paragraph (h)(l)(v)(E). c. By adding and reserving paragraph (b)(lj(xii). m d. By adding paragraphs (b)(l)(xiii) through (xv). e. By adding paragraph (h). f. By adding paragraph (i). 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 least one of the feedstocks does not have biogas (including through pathways in a m inim um 75% average adjusted rows K, L, M, and N of Table 1 to cellulosic content, and who uses only a 80.1426), the producer must thermochemical process to convert demonstrate the ability to convert feedstock into renewable fuel, must cellulosic components of feedstock into provide all the following: fuel by providing all of the following: (1) Data showing the average adjusted (1) A process diagram w ith all relev an t u n it cellulosic content of the feedstock(s) to processes labeled and a designation of w hich be used to produce fuel, based on the unit process is capable of perform ing average of at least three representative cellulosic treatm ent, including required samples. Cellulosic content data must inputs and outputs at each step. (2) A d e sc rip tio n of the c ellu lo sic biom ass treatm ent process, including required inputs and outputs usod at each step, (3) A d e sc rip tio n of the m ec h an ic al, chem ical an d biochem ical m echanism s by w hich cellulosic m aterials can be converted to biofuel products. (B) [Reserved] 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. * * * * * (v) * * * (C) (f) For all facilities, copies of docum ents dem onstrating each facility's actual peak capacity as defined in 80.1401 if the m axim um rated annual volume output of renewable fuel is not specified in the air perm its specified in paragraphs (b)(l)(v)(A) and (b)(l)(v)(B) of this section, as appropriate. {2} For facilities not claim ing the exem ption described in 80.1403(c) or (d) w hich are exempt from air perm it requirements and for w hich insufficient production records exist to establish actual peak capacity, copies of docum ents dem onstrating the facility's nameplate capacity, as defined in 80.1401. (D) For all facilities producing renewable electricity or other renewable fuel from biogas, submit all relevant inform ation in 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 w ill actually use the renewable electricity or the renewable GNG/LNG for transportation purposes. {2} Specific quantity, heat content, Samples must he of representative feedstock from the primary feedstock supplier that will provide the fuel producer w ith feedstock subsequent to registration. (2) For producers w ho 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 w ould do so after denaturing) using two or more feedstocks converted simultaneously using only a thermochemical process, the information specified in this paragraph (b)(l)(xiii)(A) shall he provided at the next required registration update under paragraph (cl) 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, w'ho intends to produce a single type of fuel using tw'o or more feedstocks converted simultaneously, where at least one of the feedstocks does not have a m inimum 75% adjusted cellulosic content, and who uses a process other and percent efficiency of transfer, as applicable, and any conversion factors, for the renewable fuel derived from biogas. than a thermochemical process or a combination of processes to convert feedstock into renewable fuel, must provide all the following: (E) Any other records as requested by the Administrator. * * * * * (!) The expected overall fuel yield, calculated as the total volum e of fuel produced p er batch (e.g., cellulosic biofuel (xiii) (A) A producer of renew able fuepl lu s all o ther fuel) d iv id ed by th e total seeking to generate D code 3 or D code feedstock m ass per hatch on a dry w eight 7 RINs, or a foreign ethanol producerseeking to have its product sold as cellulosic biofuel after it is denatured, basis (e.g., cellulosic feedstock plus all other feedstocks). (2) T he c ellu lo sic C onverted F ractio n (CF) that w ill be used for generating RINs un d er who intends to produce a single type of 80.1426(f)(3)(vi). fuel using two or more feedstocks (3) C hem ical analysis data, su p p o rtin g the converted simultaneously, where at calculated cellulosic Converted Fraction and Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00037 42164 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations a discussion of the possible variability that (B) A w ritte n ju stific atio n w h ic h ex p lain s could be expected between reporting periods w hy each feedstock a producer lists p e r 80,1451 (b)(l)(ii](U )(1). Data used to according to paragraph (b)( 1)(xv)fA) of this calculate the celiulosic CF m ust be section m eets the definition of "crop representative and obtained using an residue" per 80.1401. analytical m ethod certified by a voluntary (C) For p ro d u c ers a lre ad y reg istered as of co n se n su s sta n d ard s body, or u sin g a m e th o d A ugust 18, 2014 to p ro d u c e a ren ew ab le fuel that w ould produce reasonably accurate using crop residue, the inform ation specified results as dem onstrated through peer in this paragraph (b)(l)(xv) shall be provided review ed references provided to the third at the next required registration update under party engineer perform ing the engineering paragraph (d) of this section. review at registration. (-*) A d e sc rip tio n a n d calcu la tio n s show ing how the data were used to determ ine the celiulosic Converted Fraction. (5) For producers already registered as of * * * * * (h) Deactivation o f com pany registration. (1) EPA may deactivate a company's registration, using the A ugust 18, 2014, to p ro d u ce a single type of process in paragraph (h)(2) of this fuel that qualifies for D code 3 or D code 7 section, if any of the following criteria RINs (or w ould do so after denaturing) using two or m ore feedstocks converted sim ultaneou sly using a com bination of processes or a process other than a therm ochem ical process, the inform ation specified in this paragraph (b)(l)(xiii)(B) shall be provided at the next required registration upd ate u n d e r paragraph (d) of this section. are met: (i) The company has reported no activity in EMTS for twenty-four consecutive months, (ii) The com pany has failed to comply w ith the registration requirem ents of this section. (iii) The com pany has failed to subm it (xiv) For a producer of celiulosic 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 celiulosic biofuel, provide all of the following: any required report within thirty days of the required submission date under 80.1451. (iv) The attest engagement required under 80.1454 has not been received within thirty days of the required submission date. (2) EPA will use the following process (A) Data show ing that the average adjusted whenever it decides to deactivate the celiulosic content of each cane cultivar they in ten d to use is at least 75%, based on the average of at least three representative sam ples of each cu ltiv ar. C ultivars m u st be grown under norm al growing conditions and consistent w ith acceptable farming practices. Sam ples m ust be of feedstock from a feedstock supplier that the fuel producer registration of a company: (i) EPA w ill provide w ritten notification to the responsible corporate officer identifying the reasons or deficiencies of w hy EPA intends to deactivate the com pany's registration. The company will have fourteen in te n d s to use to su p p ly feed sto ck for their calendar days from the date of the production process and m ust represent the notification to correct the deficiencies feed sto ck su p p lie r's range of grow ing conditions and locations. Celiulosic content data m ust come from an analytical m ethod certified by a voluntary consensus standards body or using a m ethod that w ould produce reasonably accurate results as dem onstrated th ro u g h p eer re v ie w e d references p ro v id e d to the third party engineer perform ing the engineering review at registration, 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. (B) P ro d u cers that w a n t to change or a d d (iii) If the com pany does not respond, new cultivar(s) after initial registration m ust does not correct identified deficiencies, update their registration and provide EPA or does not provide an adequate w ith data in accordance w ith paragraph (d) of this section dem onstrating that the average adjusted celiulosic content for any new cultivar is at least 75% . Cultivars that do not m eet this requirem ent are considered sugarcane for purposes of Table 1 to 80,1426, (xv) For a producer of celiulosic 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 celiulosic biofuel, provide all the following information: explanation regarding why such correction is not necessary w ithin the time allotted for response, EPA may deactivate the com pany's registration w ithout further notice to the party. (3) Impact of registration deactivation: (i) A com pany whose registration is deactivated shall still be liable for violation of any requirements of this subpart. (ii) A com pany whose registration is deactivated will not be listed on any public list of actively registered com panies that is m aintained by EPA. (A) A list of all feedstocks the pro d u cer intends to utilize as crop residue. (iii) A com pany whose registration is deactivated will not have access to any of the electronic reporting systems associated w ith the renewable fuel standard program, including the EPA M oderated Transaction System (EMTS). (iv) A com pany whose registration is deactivated must submit any corrections of deficiencies to EPr\ on forms, and following policies, established by EPA. (v) If a com pany 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. (1) Registration procedures. (1) Registration shall be on forms, and following policies, established by the (2) English language registrations-- Any docum ent subm itted to EPA under this section must be submitted in English, or shall include an English translation. 10. Section 80.1451 is am ended as follows: a. By redesignating paragraph (b)(l)(ii)(U) as paragraph (b)(l)(ii)(W). b. Bv adding a new paragraph (b)(1) (ii)(U), ' c. By adding paragraph (b)(l)(ii)(V). d. By adding and reserving paragraph P) e. By adding paragraph (j). 80.1451 What are the reporting requirements under the RFS program? * k k -k -k (b) * * * ^ *** (ii) * * * (U) Producers generating D code 3 or D code 7 RINs for fuel derived from feedstocks other than biogas (including through pathw ays listed in rows K, L, M, and N of Table 1 to 80.1426), and that was produced from two or more feedstocks converted simultaneously, at least one of which has less than 75% average adjusted celiulosic 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: (J) The celiulosic converted fraction as determ ined by collecting new representative process data and performing the same chem ical analysis m ethod accepted at registration. Producers shall calculate this inform ation on an annual basis or w ithin 1 0 business days of generating every 500,000 gallons of celiulosic biofuel, w hichever is m ore frequent, and report quarterly. Reports shall include all values used to calculate feedstock energy according to 80.1426(f)(3)(vi). If new data show s that the celiulosic Converted Fraction is different than previously calculated, the formula used to generate RINs u n d e r 80.1426(f)(3) m ust be updated as soon as practical but no later than 5 business days after the producer Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00038 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42165 receives the updated data. If new testing data results in a change to the celiulesic C onverted Fraction, only RINs generated after the n ew testing data w ere received, subject to the 5-day allow ance, w ould be affected. {2} If the celiu lesic C onverted F raction deviates from the previously calculated cellulosic Converted Fraction by 10% or more then the producer m ust notify EPA w ithin 5 business days of receiving the new data, a n d m u st a d ju st th e form ula u se d to generate RINs under 80.1426(f)(3) for all fuel generated as soon as practical but no later than 5 business days after the producer receives th e n e w data. If n e w testing data, results in a change to the cellulosic C onverted Fraction, only RINs generated after the new testing data w ere received, subject to the 5-day allow ance, w ould be affected. (V) Producers of renew able 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: {!) T he specific feedstock(s) u tiliz e d to produce renew able fuel under a pathw ay allowing the use of crop residue as feedstock. (2) The total quantity of each specific feedstock used to produce renew able fuel. (3) T he total a m o u n t of q ualifying renew able fuel produced under the crop residue pathway(s) in that quarter. * * * * * fj] English language reports. Any document submitted to EPA under this section m ust be subm itted in English, or shall Include an English translation, 11. Section 80.1454 is am ended as follows: m a. By revising paragraph (b)(4)(i). m b. By adding and reserving paragraph (b)(9).' m c. By adding paragraph (b)(10). m d. By revising paragraph (f)(3)(i). m e. By revising paragraph (k)(T). m f. By adding and reserving paragraphs (q) and (r). m g. By adding a new paragraph (s). m h. By adding a new paragraph (t). 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 volum e of renewable fuel where RINs were not generated by the renewable fuel producer or im porter pursuant to 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 renew able CNG, renewable LNG or renewable electricity pursuant to 80.1426(0(10) or (11), or that uses process heat from biogas to produce renewable fuel pursuant to 80.1426(0(12) shall keep all of the following additional records: (i) D ocum entation recording the sale of renewable CNG, renewable LNG or renewable electricity for use as transportation fuel relied upon in 80.1426(0(10), 80.1426(0(11), or for use of biogas for process heat to make renewable fuel as relied upon in 80.1426(0(12) and the transfer of title of the biogas/CNG/LNG or renewable electricity from the point of biogas production to the facility w hich sells or uses the fuel for transportation purposes. (ii) Documents dem onstrating the volume and energy content of biogas/ CNG/LNG, or kilowatts of renewable electricity, relied upon under 80.1426r(f)(10) that was delivered to the facility which sells or uses the fuel for transportation purposes. (hi) Documents demonstrating the volume and energy content of biogas/ CNG/LNG, or kilowatts of renewable electricity, relied upon under 80.1426(f)(ll), or biogas relied upon under 80.1426(0(12) that was placed into the commercial distribution. (iv) Documents dem onstrating the volume and energy content of biogas relied upon under 80.1426(0(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 80.1426(0(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) T he specific crop resid u e feedstock(s) u tiliz e d to p ro d u c e ren ew ab le fuel for each batch of renew able fuel produced. (2) T he total quantity of each specific crop residue feedstock used for each batch. (3) T otal am o u n t of fuel p roduced under the crop residue pathw ay for each batch. (t) English language records. Any docum ent requested by the Administrator under this section must be subm itted in English, or shall include an English translation. 12. Section 80.1463 is am ended by adding paragraph (cl) to read as follows: 80.1463 What penalties apply under the RFS program? * * * * * (d) Any person liable under 80.1461(a) for a violation of 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] 13. Section 80.1500 is am ended by revising the definitions of "E10", "E l5", and "EX" to read as follows: 80.1500 Definitions. * ** * * E10 m eans a gasoline-ethanol blend that contains at least 9 and no more than 10 volume percent ethanol. El 5 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 gasolineethanol blend. * * * * * 14. Section 80.1501 is am ended as follows: a. By revising the section heading. h. By revising paragraph (a) introductory text. m c. By revising paragraphs (b)(3)(i), (b)(3)(iv), and (b)(4)(h). 80.1501 W hat 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-consum er who sells, dispenses, or offers for sale or dispensing E15 shall affix the following conspicuous and legible label to the fuel dispenser: * ** * * Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00039 42166 Federal Register/Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations (b) * * * E l 5, gasoline, hlenclstock for oxygenate than 10 volum e percent ethanol and not (3j * * * blending, ethanol, or gasoline-ethanol more than 15 volum e percent ethanol (i) The word " ATTENTION" shall be blend intended for use in or as E l 5 m ust dispensed from a fuel dispenser not capitalized in 20-point, orange, piarticipate in a consortium which labeled as "E l 5"), or the RVP standard H elvetica Neue LT 77 Bold Condensed arranges to have an independent survey of 80.27(a)(2) or any SIP approved or font, and shall be placed in the top 1.25 association conduct a statistically valid prom ulgated under sections 110 or 172 inches of the label as further described program of compliance surveys of the Clean Air Act, the independent in paragraph (b)(4)(iii) of this section. ***** pursuant to a survey program plan w hich has been apiprovecl by EPA, in survey association shall, w ithin 24 hours after the laboratory has completed (iv) The w ords "Use only in " shall be accordance w ith the requirem ents of analysis of the sample, send notification in 20-point, left-justified, black, paragraphs (b)(2) through (b)(5) of this Helvetica Bold font in the bottom 1.875 section. of the test result as follows: * ** * * inches of the label. * * -k k k [4] * * * (ii) The background of the bottom 1.875 inches of the label shall be orange. * ** * * 15. Section 80.1502 is am ended as follows: a. By revising paragraph (b)(1). b. By revising paragraphs (b)(3)(iii)(A) and (b)(3)(iv) introductory text. m c. By revising paragraphs (h)(4)(iv)(B) and (b)(4)(v)(A). d. By revising paragraphs (c)(4), (c)(6), and (c)(7). m e. By revising paragraphs (d)(3) and (d)(4).' 80.1502 What are the survey requirements related to gasoline-ethanol blends? * * * * * (b) * * * * * * * * * * * [qq * * * (iii) * * * (iv) * * * (A) Sam ples collected at retail outlets (B) In the case of any retail outlet from shall be shipped the same day the which a sample of gasoline was samples are collected via ground service collected during a survey and to the laboratory and analyzed for determined to have an ethanol content oxygenate content. Sampiles collected at that does not m atch the fuel dispenser a dispenser labeled E15 in any manner, label (e.g., a sample greater than 15 or at a tank serving such a dispenser, volume percent ethanol dispensed from shall also be analyzed for RVP during a fuel dispenser labeled as "E l 5" or a the high ozone season defined in sample with greater than 10 volume 80.27(a)(2)(h) or any SIP approved or percent ethanol and not more than 15 prom ulgated under sections 110 or 172 volume percent ethanol dispensed from of the Clean Air Act. Such analysis shall a fuel dispenser not labeled as "E l 5") or be com pleted w ithin 10 days after determ ined to have a dispenser receipt of the sample in the laboratory. containing fuel whose RVP does not Nothing in this section shall be comply with 80.27(a)(2) or any SIP interpreted to require RVP testing of a approved or prom ulgated under sections sample from any dispenser or tank 110 or 172 of the Clean Air Act, that serving it unless the dispenser is labeled retail outlet shall be included in the El 5 in any manner. * * * * * subsequent survey. * * * * * (1) To com ply w ith the requirem ents (iv) In the case of any test that yields under this paragraph (b), any gasoline a result that does not m atch the label (v) * * * refiner, gasoline importer, ethanol affixed to the product (e.g., a sample (A) The m inim um num ber of samples blender, ethanol producer, or ethanol greater than 15 volume percent ethanol to be included in the survey plan for im porter who m anufactures, introduces dispensed from a fuel dispenser labeled each calendar year shall be calculated as into commerce, sells or offers for sale as "E15" or a sample containing greater follows: {I n = (Za + Z ) f / ( 4 * [a rc s i n ( ^ ) - a r c sin (^ ~ )]2)}* S tn * F a * Fb * S u n W here: n - M inimum num ber of sam ples in a year long survey series. However, in no case shall n be sm aller than 7,500. Za - U pper percentile point from the normal distribution to achieve a one-tailed 95% confidence level (5% a-level). Thus, Za equals 1.645. Zp - U p p er p e rce n tile p o in t to achieve 95% pow er. T h u s, Zp equals 1.645. (pi - Then m ax im u m p ro p o rtio n of noncom pliant stations for a region to be deem ed com pliant. In this test, the param eter needs to be 5% or greater, i.e,, 5% or m ore of the stations, w ithin a stratum such that the region is considered non-com pliant. For this survey, (pi w ill be 5% . <p0 " T he u n d e rly in g p ro p o rtio n of noncom pliant stations in a sample. For the first survey p lan , <pQw ill be 2.3% . For su b seq u e n t survey p lan s, <pQw ill be the average of the proportion of stations found to be non-com pliant over the previous four surveys. Stn - Num ber of sam pling strata. For p u rp o se s of this survey program , St equals 3. Fa - A djustm ent factor for the num ber of extra sam ples required to com pensate for collected sam ples that cannot be included in the survey, based on the num ber of additional sam ples required during the previous four surveys. However, in no case shall the value of Fa be sm aller than 1.1. Fb - A d ju stm en t factor for th e n u m b e r of sam ples required to resam ple each retail outlet w ith test results exceeding the labeled am o u n t (e.g., a sam ple greater th a n 15 v o lu m e p e rc e n t e thanol dispensed from a fuel dispenser labeled as "E15" , a sam ple w ith greater th an 10 volum e percent ethanol and not more th a n 15 v o lu m e p e rc e n t e thanol dispensed from a fuel dispenser not labeled as " E15" ), or a sam ple d isp e n se d from a fuel dispenser labeled as "E15" w ith greater than the applicable seasonal and geographic RVP pursuant to 80.27, based on the rate of resam pling required during the previous four surveys. H ow ever, in no case sh a ll th e value of Fb be sm aller than 1.1. Sun ~ Num ber of surveys per year. For purposes of this survey program, Sun equals 4, * * * * * (c) * * * (4) T he survey program p lan m u st be sent to the follow ing address: Director, C om pliance D ivision, U.S. Environm ental Protection Agency, 1200 Pennsylvania Ave. NW. M ail C ode 6506J, W ashington, DC 20460. ***** (6) T he approving official for a survey plan under this section is the Director of the C om pliance Division, Office of Transportation and Air Quality. Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00040 Federal Register/ Vol. 79, No, 138/Friday, July 18, 2014/Rules and Regulations 42167 (7) A ny notifications or reports req u ired to inform ation regarding the suitable allowing the sale or introduction of be subm itted to EPA u n d e r this section m ust be directed to the official designated in paragraph (c)(4) of this section, (d)*'* * (3) For the first year in w hich a survey program w ill be c o n d u cted , no late r th a n 15 days preceding the staid of the survey EPA m ust receive a copy of the contract w ith the ethanol content, stated in the following format: " Suitable for blending with ethanol at a concentration of no more than 15 vol % ethanol.". (2) The requirem ents in paragraph (a)(1) of this section do not apply to reformulated gasoline blendstock for gasoline containing greater than 10 volume percent ethanol into any flexfuel vehicle, notwithstanding paragraphs (a)(1) and (a)(2) of this section. (hj Sell, offer for sale, dispense, or otherwise make available at a retail or independent surveyor and proof that the oxygenate blending, as defined in wholesale purchaser-consum er facility m oney necessary' to carry out the survey plan has either been paid to the in d ep e n d en t surveyor or placed into an escrow account; if the m oney has been placed into an escrow account, a copy' of the escrow agreement m ust to be sent to the official designated in paragraph (c)(4) of this section. (4) For subsequent years in w h ich a surveyprogram will be conducted. no later than Decem ber 15 of the year preceding the year in w hich the survey w ill be conducted. EPA m ust receive a copy of the contract w ith the independent surveyor and proof that the m oney necessary' to carry out the survey plan has either been p aid to the in d ep en d en t surveyor or placed into an escrow account; if placed into an escrow account, a copy of the escrow agreem ent m ust be sent to the official designated in paragraph (c)(4) of this section, * * * * * 16. Section 80.1503 is am ended as follows: a. By revising paragraphs (a)(T)(vi)(B) and (a)(l)(vi)(C). h. By revising paragraph (a)(2). c. By adding paragraph (a)(3). m d. By revising paragraphs (b)(l)(vi)(B) through (D). 80,1503 What are the product transfer document requirements for gasolineethanol 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 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 gasolineethanol blend containing anything other than betw een 9 and 10 volum e percent ethanol m ay cause a sum m ertim e RVP violation.". 80.2(kk), w hich is subject to the product transfer document requirements of 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 bv 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 betw een 9 and 10 volum e percent ethanol (E10), the following statement: "E1Q: Contains betw een 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 betw een 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.". ** * ** 17. Section 80.1504 is am ended by revising paragraphs (a)(1), (a)(3), (hj through (e), and (g) to read as follows: 80,1504 What acts are prohibited under this subpart? ** * ** (a)(1) Sell, introduce, cause or perm it 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 lightduty gasoline motor vehicle, any heavyduty gasoline motor vehicle or engine, any highway or off-highway motorcycle, or any gasoline-powered nonroad engines, vehicles or equipment. k k -k k k E l5 that is not correctly labeled in accordance w ith 80.1501. (c) Fail to fully or tim ely im plem ent, or cause a failure to fully or timely implement, an approved survey required under 80.1502. (cl) Fail to generate, use, transfer and maintain product transfer documents that accurately reflect the type of product, ethanol content, maximum RVP, and other inform ation required under 80.1503. (e)(1) Im properly blend, or cause the im proper 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 80.1503(a)(l)(vi) or (b)(l)(vi). (2) No person shall produce a fuel designated as E10 by blending ethanol and gasoline in a m anner designed to produce a fuel that contains less than 9.0 or more than 10,0 volum e percent ethanol. (3) No person shall produce a fuel designated as E l5 by blending ethanol and gasoline in a m anner designed to produce a fuel that contains less than 10.0 volum e percent ethanol or more than 15.0 volume percent ethanol. k k k k k (g) For gasoline during the regulatory control periods, combine any gasolineethanol blend that qualifies for the 1 psi allowance under the special regulatory treatm ent as provided by 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 m axim um of 15 volume percent ethanol. k k k k k a 18. A new 80.1509 is added to subpart N to read as follows: 80.1509 Rounding a test result for purposes of th is subpart N. The provisions of 80.9 apply for purposes of determining the ethanol content of a gasoline-ethanol blend under this subpart. (C) For gasoline not described in (3) Be p rohibited from m anufacturing,[FR Doc. 2014-16413 F iled 7 -1 7 -1 4 : 8:45 am] paragraph (a)(l)(vi)(B) of this section, selling, introducing, or causing or BILLING CODE 65S0-50-P Sierra Club v. EPA 18cv3472 NDCA Tier 1 ED 002061 00164220-00041