Proposed Rule2024-28978
Renewable Fuel Standard (RFS) Program: Partial Waiver of 2024 Cellulosic Biofuel Volume Requirement and Extension of 2024 Compliance Deadline
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 12, 2024
Issuing agencies
Environmental Protection Agency
Abstract
EPA is proposing to partially waive the 2024 cellulosic biofuel volume requirement and revise the associated percentage standard under the Renewable Fuel Standard (RFS) program due to a shortfall in cellulosic biofuel production. As a result of this proposed change, this action also proposes to extend the RFS compliance reporting deadline for the 2024 compliance year. This action also proposes several minor revisions related to the biogas provisions of the RFS program.
Full Text
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<title>Federal Register, Volume 89 Issue 239 (Thursday, December 12, 2024)</title>
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[Federal Register Volume 89, Number 239 (Thursday, December 12, 2024)]
[Proposed Rules]
[Pages 100442-100456]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-28978]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[EPA-HQ-OAR-2024-0411; FRL-12015-01-OAR]
RIN 2060-AW46
Renewable Fuel Standard (RFS) Program: Partial Waiver of 2024
Cellulosic Biofuel Volume Requirement and Extension of 2024 Compliance
Deadline
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA is proposing to partially waive the 2024 cellulosic
biofuel volume requirement and revise the associated percentage
standard under the Renewable Fuel Standard (RFS) program due to a
shortfall in cellulosic biofuel production. As a result of this
proposed change, this action also proposes to extend the RFS compliance
reporting deadline for the 2024 compliance year. This action also
proposes several minor revisions related to the biogas provisions of
the RFS program.
DATES:
Comments: Comments must be received on or before January 21, 2025.
Public hearing: EPA will hold a virtual public hearing on December
20, 2024. Please refer to the SUPPLEMENTARY INFORMATION section for
additional information on the public hearing.
ADDRESSES:
Comments. Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2024-0411, at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from the docket. EPA may publish any comment
received to its public docket. Do not submit to EPA's docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a> any information you consider to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Multimedia submissions (audio, video, etc.) must
be accompanied by a written comment. The written comment is considered
the official comment and should include discussion of all points you
wish to make. EPA will generally not consider comments or comment
contents located outside of the primary submission (i.e., on the web,
cloud, or other file sharing system). Please visit <a href="https://www.epa.gov/dockets/commenting-epa-dockets">https://www.epa.gov/dockets/commenting-epa-dockets</a> for additional submission methods; the
full EPA public comment policy; information about CBI or multimedia
submissions; and general guidance on making effective comments.
Public hearing. The virtual public hearing will be held on December
20, 2024. The hearing will begin at 9 a.m. eastern standard time (EST)
and end when all parties who wish to speak have had an opportunity to
do so. All hearing attendees (including even those who do not intend to
provide testimony) should register for the virtual public hearing by
December 13, 2024. Information on how to register can be found at
<a href="https://www.epa.gov/renewable-fuel-standard-program/proposed-partial-waiver-2024-cellulosic-biofuel-volume-requirement">https://www.epa.gov/renewable-fuel-standard-program/proposed-partial-waiver-2024-cellulosic-biofuel-volume-requirement</a>. Additional
information regarding the hearing appears below under SUPPLEMENTARY
INFORMATION.
FOR FURTHER INFORMATION CONTACT: For questions regarding this action,
contact Dallas Burkholder, Office of Transportation and Air Quality,
Compliance Division, Environmental Protection Agency, 2000 Traverwood
Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4776; email
address: <a href="/cdn-cgi/l/email-protection#217367720c73544d444c404a484f4652614451400f464e57"><span class="__cf_email__" data-cfemail="c2908491ef90b7aea7afa3a9abaca5b182a7b2a3eca5adb4">[email protected]</span></a>. For questions regarding the public
hearing, contact Nick Parsons at <a href="/cdn-cgi/l/email-protection#25776376086d4044574c4b42654055440b424a53"><span class="__cf_email__" data-cfemail="2e7c687d03664b4f5c4740496e4b5e4f00494158">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Does this action apply to me?
Entities potentially affected by this action are those involved
with the production, distribution, and sale of transportation fuels
(e.g., gasoline and diesel fuel) and renewable fuels (e.g., ethanol,
biodiesel, renewable diesel, and biogas). Potentially affected
categories include:
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Examples of potentially
Category NAICS \1\ code affected entities
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Industry....................... 211130 Natural gas liquids
extraction and
fractionation.
Industry....................... 221210 Natural gas production
and distribution.
Industry....................... 324110 Petroleum refineries
(including importers).
Industry....................... 325120 Biogases, industrial
(i.e., compressed,
liquified, solid),
manufacturing.
Industry....................... 325193 Ethyl alcohol
manufacturing.
Industry....................... 325199 Other basic organic
chemical
manufacturing.
Industry....................... 424690 Chemical and allied
products merchant
wholesalers.
Industry....................... 424710 Petroleum bulk stations
and terminals.
Industry....................... 424720 Petroleum and petroleum
products wholesalers.
Industry....................... 457210 Fuel dealers.
Industry....................... 562212 Landfills.
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\1\ North American Industry Classification System (NAICS).
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities potentially affected by this
action. This table lists the types of entities that EPA is now aware
could potentially be affected by this action. Other types of entities
not listed in the table could also be affected. To determine whether
your entity would be affected by this action, you should carefully
examine the applicability criteria in 40 CFR part 80. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person
[[Page 100443]]
listed in the FOR FURTHER INFORMATION CONTACT section.
Participation in Virtual Public Hearing
Information on how to register for the virtual public hearing can
be found at <a href="https://www.epa.gov/renewable-fuel-standard-program/proposed-partial-waiver-2024-cellulosic-biofuel-volume-requirement">https://www.epa.gov/renewable-fuel-standard-program/proposed-partial-waiver-2024-cellulosic-biofuel-volume-requirement</a>. The
last day to pre-register to speak at the hearing is December 13, 2024.
Please note that any updates made to any aspect of the hearing will be
posted online at <a href="https://www.epa.gov/renewable-fuel-standard-program/proposed-partial-waiver-2024-cellulosic-biofuel-volume-requirement">https://www.epa.gov/renewable-fuel-standard-program/proposed-partial-waiver-2024-cellulosic-biofuel-volume-requirement</a>.
While EPA expects the hearing to go forward as set forth above, please
monitor the website or contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to determine if there are any updates. EPA
does not intend to publish a document in the Federal Register
announcing updates.
Each commenter will have 3 minutes to provide oral testimony. EPA
may ask clarifying questions during the oral presentations, but will
not respond to the presentations at that time. Written statements and
supporting information submitted during the comment period will be
considered with the same weight as oral comments and supporting
information presented at the public hearing.
If you require the services of a translator or special
accommodations such as audio description, please pre-register for the
hearing and describe your needs by December 13, 2024. EPA may not be
able to arrange accommodations without advance notice.
Preamble Acronyms and Abbreviations
Throughout this document the use of ``we,'' ``us,'' or ``our'' is
intended to refer to EPA. We use multiple acronyms and terms in this
preamble. While this list may not be exhaustive, to ease the reading of
this preamble and for reference purposes, EPA defines the following
terms and acronyms here:
BBD biomass-based diesel
CAA Clean Air Act
CG conventional gasoline
CNG compressed natural gas
CWC cellulosic waiver credit
FRS ID facility registration system identification
GC gas chromatograph
LNG liquified natural gas
RBOB reformulated gasoline before oxygenate blending
RFG reformulated gasoline
RFS Renewable Fuel Standard
RIN Renewable Identification Number
RNG renewable natural gas
RVO Renewable Volume Obligation
Outline of This Preamble
I. Executive Summary
II. Statutory Background
A. The RFS Program and the Set Authority
B. General Waiver Authority
C. Cellulosic Waiver Authority
III. Assessment of Cellulosic RINs Available for Compliance
IV. Proposal To Partially Waive the 2024 Cellulosic Biofuel Volume
Requirement Using the General Waiver Authority
V. Request for Comment on the Availability of the Cellulosic Waiver
Authority for 2024
A. Use of the Cellulosic Waiver Authority
B. Change to Calculation of Cellulosic Waiver Credit Price
VI. Calculation of 2024 Cellulosic Biofuel Percentage Standard
VII. Extension of Compliance Deadlines
A. Extension of 2024 Compliance Reporting Deadline
B. Extension of Future RFS Compliance Reporting Deadlines
VIII. Other RFS Amendments
A. Biogas Regulations
B. Updated Standard Specification for Biodiesel
C. Technical Corrections
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 14094: Modernizing Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act (NTTAA) and
1 CFR Part 51
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations and Executive Order 14096: Revitalizing Our Nation's
Commitment to Environmental Justice for All
X. Statutory Authority
I. Executive Summary
On July 12, 2023, EPA promulgated a rule establishing the RFS
volume requirements and percentage standards for 2023-2025 (the ``Set
Rule'').\1\ As part of that rulemaking, EPA projected that 1.09 billion
cellulosic Renewable Identification Numbers (RINs) would be generated
in 2024 and used that volume to establish the 2024 cellulosic biofuel
percentage standard of 0.63 percent.\2\ However, based on current
projections of cellulosic biofuel production for 2024, we expect that
only 0.97 billion cellulosic RINs will be generated in 2024, a
shortfall of 0.12 billion RINs. As discussed in section III, this
follows a shortfall in cellulosic biofuel production in 2023 that
resulted in the total cellulosic RIN deficit from 2023 carried into
2024 to exceed the total number of available 2023 cellulosic carryover
RINs. Given these factors and reasons further explained in sections II
through IV, in this action we are proposing to partially waive the 2024
cellulosic biofuel volume requirement to 0.88 billion RINs (the sum of
projected cellulosic biofuel production in 2024 less the cellulosic
biofuel deficits carried into 2024) using the statutory ``general
waiver authority.'' We are requesting comment on the magnitude of the
partial waiver and the use of the cellulosic waiver authority as an
alternative to the general waiver authority.
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\1\ 88 FR 44468 (July 12, 2023).
\2\ 40 CFR 80.1405(a).
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We currently project that the supply of advanced biofuel and total
renewable fuel in 2024 will exceed the required volumes by a
significant margin, despite the projected shortfall in cellulosic
biofuel. Given the projected surplus of 2024 advanced RINs, we are not
proposing to revise the volume requirements for any of the other
categories of renewable fuel (i.e., biomass-based diesel (BBD),
advanced biofuel, and total renewable fuel). We are also not proposing
any changes to any of the 2025 RFS standards, which were also finalized
in the Set Rule. While EPA may possibly consider a partial waiver of
the 2025 cellulosic biofuel standard in a future action, any comments
on such a change to the 2025 RFS standards will be treated as beyond
the scope of this action.\3\
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\3\ EPA is not reopening the 2025 RFS volumes and standards in
this proceeding, nor are we reopening any of the 2024 RFS volumes
and standards besides the 2024 cellulosic biofuel volume and
standard.
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As discussed in section V, we are additionally seeking comment on
two issues related to the ``cellulosic waiver authority'': (1) Whether
this authority is available to waive the 2024 cellulosic biofuel volume
requirement; and (2) Our proposal to replace the source of data for the
wholesale price of gasoline that is used to calculate the price of
cellulosic waiver credits (CWCs) because the data source currently
identified in the regulations is no longer available.
In section VII, we are also proposing to extend the 2024 RFS
compliance deadline from March 31, 2025, to the next quarterly
compliance reporting
[[Page 100444]]
deadline after the effective date of the action finalizing these
amendments, as well as proposing provisions that would automatically
extend the annual compliance reporting deadline for a given compliance
year if EPA proposes to revise an existing RFS standard for that year,
as is proposed herein. EPA requests comment on these compliance
deadline proposals.
Finally, as discussed in section VIII, we are proposing minor
revisions to two main areas of the RFS program's biogas regulations
that were identified after EPA and market participants began
implementing the regulations promulgated in the Set Rule. First, EPA is
proposing to clarify and provide flexibility for how biogas, renewable
natural gas (RNG), renewable compressed natural gas (CNG), and
renewable liquified natural gas (LNG) are measured, sampled, and tested
to demonstrate compliance.
Second, EPA is proposing the following technical amendments to the
biogas regulations:
<bullet> Clarifying what constitutes a batch of RNG.
<bullet> Clarifying the requirements for the generation,
assignment, and separation of RINs for RNG.
<bullet> Clarifying the registration requirements for biogas
producers, RNG producers, and RNG RIN separators.
<bullet> Clarifying the attest engagement requirements for biogas
producers, RNG producers, and RNG RIN separators.
<bullet> Numerous clarifications, corrections, and consistency
edits to the biogas regulations.
II. Statutory Background
A. The RFS Program and the Set Authority
Clean Air Act (CAA) section 211(o)(2)(B) establishes the framework
by which EPA is to establish annual, nationally applicable volume
targets for each of the four categories of renewable fuel that make up
the RFS program: cellulosic biofuel, BBD, advanced biofuel, and
renewable fuel. CAA section 211(o)(2)(B)(i) provides specific
applicable volumes for cellulosic biofuel, advanced biofuel, and
renewable fuel for each year from 2010 to 2022 and specific applicable
volumes for BBD for each year from 2010 to 2012.
For the years beyond those expressly enumerated (i.e., after 2022
for all categories), CAA section 211(o)(2)(B)(ii) provides that
applicable volumes are set by EPA in coordination with the United
States Department of Agriculture (USDA) and Department of Energy (DOE),
based on a review of the implementation of the RFS program to date, and
that EPA must analyze specific factors (e.g., the impact of the
production and use of renewable fuels on the environment, energy
security, the infrastructure of the United States, and job creation).
EPA calls this statutory authority to set volumes after 2022 its ``set
authority.'' CAA section 211(o)(2)(B)(ii) additionally provides that
under the set authority, EPA shall promulgate applicable volumes no
later than 14 months prior to the start of the relevant year.\4\
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\4\ ``The Administrator shall promulgate rules establishing the
applicable volumes under this clause no later than 14 months before
the first year for which such applicable volume will apply.'' CAA
section 211(o)(2)(B)(ii).
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This action concerns the 2024 cellulosic biofuel volume requirement
that was established in the Set Rule, EPA's first RFS rule promulgated
under the set authority. In the Set Rule, EPA established the volume
requirements for 2023-2025 using the set authority and acknowledged
that certain waivers may be available to adjust the volume requirements
if the requisite statutory conditions are met.\5\
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\5\ 88 FR 44479 (July 12, 2023) (``While we are establishing
applicable volume requirements in this action for future years that
are achievable and appropriate based on our consideration of the
statutory factors, we retain our legal authority to waive volumes in
the future under the waiver authorities should circumstances so
warrant.'').
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B. General Waiver Authority
CAA section 211(o)(7)(A) provides that EPA, in consultation with
USDA and DOE, may reduce RFS volume requirements previously established
pursuant to CAA section 211(o)(2) for a given compliance year, in whole
or in part, under specified circumstances, including when EPA finds
that ``there is an inadequate domestic supply.'' \6\ Notably, CAA
section 211(o)(7)(A) does not include any temporal limitation on when
the waiver may be used or any limitation on which category of volumes
may be waived, and thus the general waiver authority may be used to
waive the cellulosic volume after the volumes have been set.
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\6\ The CAA section 211(o)(7)(A) general waiver authority also
allows EPA to waive RFS volumes if an applicable standard ``would
severely harm the economy or environment of a State, a region, or
the United States'' (``severe economic harm''). This provision is
not relevant to this action and is therefore not discussed, but more
information can be found at 77 FR 70756 (November 27, 2012).
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In Americans for Clean Energy v. EPA, 864 F.3d 691 (2017)
(``ACE''), the U.S. Court of Appeals for the D.C. Circuit held that,
for this provision, the statute requires a ``supply-side'' assessment
of the volumes of renewable fuel that can be supplied to refiners,
importers, and blenders.\7\ Thus, EPA has the authority to waive
volumes under this provision only if EPA determines that there is an
``inadequate domestic supply'' of renewable fuel based on the volumes
of renewable fuel that can be supplied to refiners, importers, and
blenders (i.e., EPA cannot base its finding on demand-side
considerations). In calculating the supply of renewable fuel to make
this threshold determination, EPA has consistently excluded carryover
RINs from the previous compliance year and only assessed the quantity
of actual renewable fuel projected to be (or actually) supplied to
refiners, importers, and blenders in the compliance year at issue. This
approach was upheld by the D.C. Circuit in ACE.\8\
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\7\ ACE resolved challenges to EPA's rulemaking that established
the 2014-2016 RFS standards (``2014-2016 Rule''). 80 FR 77420
(December 14, 2015).
\8\ ACE, 864 F.3d at 704, 713-716 (holding that EPA
``permissibly declined to consider carryover RINs for purposes of
determining the available supply.'')
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Once EPA determines that there is an inadequate domestic supply of
renewable fuel (or that the required volumes would result in severe
economic or environmental harm), CAA section 211(o)(7)(A) states that
EPA ``may'' waive RFS volume requirements. Given that the statute
permits EPA to determine whether or not to issue a waiver, EPA takes
into consideration the availability of carryover RINs at this point in
its analysis, particularly in circumstances where EPA is considering
whether to adjust the volume requirement after it has been set.\9\ If
EPA finds that the number of available RINs--including carryover RINs--
is sufficient to meet the standards, EPA may choose not to issue a
waiver, even if it determines there is an ``inadequate domestic
supply.'' \10\ Given the discretion afforded to EPA to issue waivers,
EPA also considers other factors, as appropriate, when determining
whether to issue a waiver under the general waiver authority.\11\ This
action proposes to implement such a general waiver to reduce the 2024
cellulosic biofuel volume requirement.
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\9\ 80 FR 77484-85 (December 14, 2015).
\10\ This was the case for 2016 and 2023, when EPA declined
petitions for waiver of the cellulosic biofuel standards for those
compliance years. See ``Denial of AFPM Petition for Waiver of 2016
Cellulosic Biofuel Standard,'' January 17, 2017, available in the
docket for this action; see also ``Denial of AFPM Petition for
Partial Waiver of 2023 Cellulosic Biofuel Standard,'' 89 FR 20961
(March 26, 2024).
\11\ See, e.g., 73 FR 47168 (August 13, 2008) and 77 FR 70752,
70756 (November 27, 2012).
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[[Page 100445]]
C. Cellulosic Waiver Authority
The cellulosic waiver authority at CAA section 211(o)(7)(D)(i)
provides that ``[f]or any calendar year for which the projected volume
of cellulosic biofuel production is less than the minimum applicable
volume established under paragraph (2)(B), as determined by the
Administrator based on the estimate provided under paragraph (3)(A),''
EPA ``shall reduce the applicable volume of cellulosic biofuel required
under paragraph (2)(B) to the projected volume available during that
calendar year'' and that this reduction shall be made ``not later than
November 30 of the preceding calendar year.'' For those years in which
EPA ``makes such a reduction,'' the statute further provides that EPA
may also ``reduce the applicable volume of renewable fuel and advanced
biofuels requirement . . . by the same or a lesser volume.'' As such,
even when EPA exercises its cellulosic waiver authority, the
determination of whether to correspondingly reduce the advanced biofuel
requirement is discretionary. As recognized by EPA in the Set Rule,
there may be situations in which the CAA section 211(o)(7)(D)
cellulosic waiver authority remains available to waive cellulosic
biofuel volume requirements after 2022.\12\
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\12\ ``Renewable Fuel Standard (RFS) Program: Standards for
2023-25 and Other Changes, Response to Comments,'' EPA-420-R-23-014,
June 2023 (``Set Rule RTC''), p. 9.
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In the past, when establishing the annual volumes and percentage
standards using the cellulosic waiver authority, if EPA determined that
the projected volume of cellulosic biofuel production for a given year
would be less than the annual applicable volume established by Congress
under CAA section 211(o)(2)(B)(i)(III), then EPA had the authority to
reduce the applicable volume of cellulosic biofuel in relation to the
projected volume available for that calendar year. Pursuant to this
provision, EPA set the cellulosic biofuel volume requirement lower than
the CAA section 211(o)(2)(B)(i)(III) statutory volumes enumerated by
Congress for each year from 2010 through 2022. EPA was challenged
regarding its interpretation of this statutory provision, leading the
D.C. Circuit to evaluate various aspects of EPA's cellulosic waiver
authority.\13\ In 2013 in American Petroleum Institute (API) v. EPA,
the court held that EPA must take a ``neutral aim at accuracy'' in
determining the projected volume of cellulosic biofuel available.\14\
In API and Alon Refining Krotz Springs, Inc. v. EPA, the D.C. Circuit
upheld EPA's decision to use the Energy Information Administration's
(EIA's) projected volume of cellulosic biofuel production to inform
EPA's projection, without requiring ``slavish adherence by EPA to the
EIA estimate.'' \15\ In Sinclair Wyoming Refining Co. LLC, et al. v.
EPA, the D.C. Circuit upheld EPA's reading of the statutory phrase
``projected volume available'' to exclude carryover RINs.\16\
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\13\ See, e.g., American Petroleum Institute (API) v. EPA, 706
F.3d 474, 479 (D.C. Cir. 2013) (``API'') (interpreting the
``projected volume available'' and indicating that ``the most
natural reading of the provision is to call for a projection that
aims at accuracy, not at deliberately indulging a greater risk of
overshooting than undershooting'' in projecting the available
cellulosic biofuel volume); ACE at 730 (determining EPA's use of the
cellulosic waiver authority to reduce advanced and total renewable
fuel was reasonable); Sinclair Wyoming Refining Co. LLC, et al. v.
EPA, 101 F.4th 871, 883 (2024) (``Sinclair'') (rejecting biofuels
producers' challenge that EPA must include carryover cellulosic RINs
in its determination of ``projected volume available during that
calendar year'').
\14\ API, 706 F.3d at 476.
\15\ Alon Refining Krotz Springs, Inc. v. EPA, 396 F.3d 628, 660
(D.C. Cir. 2019); API, 607 F.3d at 478.
\16\ Sinclair, 101 F.4th at 883-884.
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When EPA waived the cellulosic biofuel volume requirement using the
cellulosic waiver authority in the past, it made CWCs available.\17\ As
described in past RFS actions, CWCs--which, when made available, were
offered for sale to obligated parties at a price established by
regulation per the statute \18\--provided compliance flexibility for
obligated parties and effectively established a ceiling for the price
of cellulosic biofuel RINs.\19\ However, it should be noted that CWCs
only satisfied an obligated party's cellulosic biofuel obligation;
unlike a cellulosic RIN, a CWC could not be used to satisfy an
obligated party's advanced biofuel or total renewable fuel
obligation.\20\ Therefore, to obtain the same compliance value as a
cellulosic biofuel RIN, an obligated party using a CWC for compliance
with the cellulosic biofuel standard needed to also acquire an advanced
biofuel RIN to use towards meeting its advanced biofuel and total
renewable fuel obligations. When CWCs were made available, they
generally served to limit or cap the price of cellulosic RINs.
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\17\ CAA section 211(o)(7)(D)(ii).
\18\ CAA section 211(o)(7)(D)(iii); 40 CFR 80.1456.
\19\ See, e.g., 85 FR 7025 (February 6, 2020); 87 FR 39616 (July
1, 2022).
\20\ 72 FR 14726-27 (March 26, 2010).
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In section V, EPA requests comment on whether use of the cellulosic
waiver authority is available to reduce cellulosic biofuel volumes in
2024, because certain stakeholders have requested that EPA waive the
2024 cellulosic biofuel volume requirement using this authority rather
than, or in addition to, the general waiver authority.\21\
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\21\ See, e.g., American Fuel & Petrochemical Manufacturers
(AFPM), ``Petition for Partial Waiver of the 2024 Cellulosic Biofuel
Volumetric Requirements,'' November 1, 2024.
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III. Assessment of Cellulosic RINs Available for Compliance
In the Set Rule, EPA projected that 1.09 billion cellulosic RINs
would be generated in 2024, and used that volume to calculate the 2024
cellulosic biofuel percentage standard of 0.63 percent.\22\ While the
actual number of cellulosic RINs that obligated parties will ultimately
need to retire for compliance with the current standard will not be
known until after the 2024 compliance deadline,\23\ when obligated
parties report to EPA their 2024 gasoline and diesel production and
import volumes,\24\ for purposes of making a decision to partially
waive the 2024 cellulosic biofuel volume requirement, we have assumed
that the actual total 2024 cellulosic biofuel obligation, if not
waived, will be 1.09 billion RINs.\25\
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\22\ 88 FR 44470-71 (July 12, 2023).
\23\ The compliance deadline for the 2024 standards is currently
March 31, 2025. However, as described in section VII.A, EPA is
proposing to extend the 2024 compliance deadline in this action.
\24\ 40 CFR 80.1451 and 80.1427(a).
\25\ Because the compliance obligation is calculated on a
percentage basis, if the actual gasoline and diesel volumes reported
by obligated parties differ from the projected gasoline and diesel
volumes that were used to derive the percentage standard, then the
actual number of RINs required for compliance will differ from the
projected volume that was used to calculate the percentage standard.
Although we rely on the 1.09-billion-RIN projection for 2024 in the
Set Rule that was the basis for the 2024 cellulosic biofuel
percentage standard, EPA would reach the same conclusion to waive
the 2024 cellulosic biofuel volume requirement, for the reasons
stated below, using a higher RIN obligation (i.e., a higher gasoline
and diesel projection).
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As of October 10, 2024, approximately 0.64 billion 2024 cellulosic
RINs have been generated through September 2024.\26\ To project total
cellulosic RIN generation for 2024, we considered the seasonality of
cellulosic RIN generation over the previous five years. We observed
that the number of cellulosic RINs generated at the end of each month
as a percentage of the total number of cellulosic RINs generated that
year was
[[Page 100446]]
very consistent from year-to-year.\27\ Based on the observed cellulosic
RIN generation data from 2019-2023, we project that cellulosic RIN
generation for 2024 will be approximately 0.97 billion RINs.\28\
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\26\ See ``Total Net Generation'' RIN data table at: <a href="https://www.epa.gov/fuels-registration-reporting-and-compliance-help/rins-generated-transactions">https://www.epa.gov/fuels-registration-reporting-and-compliance-help/rins-generated-transactions</a>. This table includes all reported cellulosic
RINs that have been generated so far in 2024 and were not otherwise
retired due to RIN generation error (i.e., an invalid RIN). Thus,
the volume of 2024 cellulosic RINs in this table is the volume of
RINs that have been made available for compliance with the 2024
cellulosic biofuel standard.
\27\ This data is summarized in ``Seasonality of RIN Generation
(2019-2023) and Projected RIN Generation for 2024 Based on Data
Through September 2024,'' available in the docket for this action.
\28\ We intend to consider additional cellulosic RIN generation
data throughout the remainder of 2024 as it becomes available to
inform any final action.
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We have also considered the total cellulosic RIN deficit carried
forward from 2023. To demonstrate compliance in 2024, obligated parties
that carried a cellulosic RIN deficit from 2023 into 2024 must retire
RINs to fully satisfy their cellulosic biofuel obligation, calculated
to include the obligation incurred in 2024 plus the deficit carried
forward from 2023.\29\ Over 20 obligated parties--who together
represent 21 percent of the total cellulosic biofuel obligation for
2023--carried a cellulosic RIN deficit into 2024, including two of the
six largest obligated parties and seven of the 25 largest obligated
parties.\30\ Together, this total cellulosic RIN deficit reflects a
deferred obligation of approximately 0.09 billion cellulosic RINs.\31\
If EPA were to include this cellulosic RIN deficit from 2023, the net
number of RINs available to comply with the 2024 cellulosic biofuel
standard would be approximately 0.88 billion RINs. This is
approximately 0.21 billion fewer RINs than the 1.09 billion RINs needed
to comply with the current 2024 cellulosic biofuel standard, a
shortfall of approximately 18 percent.
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\29\ Under the statute and our implementing regulations, an
obligated party is permitted to carry forward a deficit in lieu of
retiring a sufficient number of RINs to meet its obligation. CAA
section 211(o)(5)(D); 40 CFR 80.1407(a), 80.1427(b).
\30\ See ``2023 RFS0304 Annual Compliance Report Data as of
October 8, 2024,'' available in the docket for this action.
\31\ See ``Table 6: Total Compliance Deficits by Year'' at
<a href="https://www.epa.gov/fuels-registration-reporting-and-compliance-help/annual-compliance-data-obligated-parties-and">https://www.epa.gov/fuels-registration-reporting-and-compliance-help/annual-compliance-data-obligated-parties-and</a>.
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We also have taken into consideration cellulosic RINs carried over
from 2023. There are approximately 0.03 billion 2023 cellulosic
carryover RINs available.\32\ These carryover RINs represent actual
cellulosic biofuel that was produced in 2023, but these RINs were not
used for compliance in 2023 and therefore remain available to obligated
parties for use to comply with the 2024 cellulosic biofuel
standard.\33\ If EPA were to include both the 2023 cellulosic carryover
RINs and total cellulosic RIN deficit from 2023, the net number of RINs
available to comply with the 2024 cellulosic biofuel standard is
approximately 0.91 billion RINs. This is approximately 0.18 billion
fewer RINs than the 1.09 billion RINs needed to comply with the current
2024 cellulosic biofuel standard, a shortfall of approximately 16
percent.
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\32\ See ``Cellulosic Carryover RIN Calculation for Proposed
Partial Waiver of 2024 Cellulosic Biofuel Volume Requirement,''
available in the docket for this action.
\33\ 40 CFR 80.1427(a).
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Due to the expected shortfall in cellulosic biofuel production in
2024, the total cellulosic RIN deficit carried forward from 2023 into
2024, and the limited number of available 2023 cellulosic carryover
RINs, the cellulosic RIN shortfall could be of such a magnitude that
some obligated parties that carried forward a deficit from 2023 into
2024 would be forced into non-compliance with their 2024 cellulosic
biofuel obligations. This is because while obligated parties that did
not carry forward a cellulosic RIN deficit from 2023 into 2024 would be
able to carry forward a deficit from 2024 into 2025 to demonstrate
compliance--which is permitted by statute \34\ and regulation \35\ and
is routinely done--obligated parties that carried a cellulosic RIN
deficit from 2023 into 2024 are precluded by statute \36\ and
regulation \37\ from doing so in the subsequent year (i.e., from 2024
into 2025). This fact, combined with the shortfall in cellulosic
biofuel production in 2024, may disrupt the functioning of the RIN
market and leave some obligated parties unable to obtain the cellulosic
RINs necessary to comply with their 2024 obligations, through no fault
of their own.
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\34\ CAA section 211(o)(5)(D).
\35\ 40 CFR 80.1427(b).
\36\ CAA section 211(o)(5)(D)(i).
\37\ 40 CFR 80.1427(b)(1)(i).
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IV. Proposal To Partially Waive the 2024 Cellulosic Biofuel Volume
Requirement Using the General Waiver Authority
As discussed in section II.B, the general waiver authority
authorizes EPA to reduce volume requirements promulgated under CAA
section 211(o)(2) upon a finding of ``inadequate domestic supply.'' The
general waiver authority has no temporal limitation that would prohibit
its use after the volume requirements have been set, is discretionary,
and does not provide direction as to the magnitude of the volume that
may be waived if EPA makes a finding of ``inadequate domestic supply.''
As discussed in section III, EPA does not account for carryover RINs as
a constituent of the available supply in making the threshold
determination. Once EPA determines that there is ``inadequate domestic
supply,'' then EPA may consider certain additional factors regarding
the RIN market--i.e., the availability of RINs for the year in
question, carryover RINs from the prior year, and the volume of RIN
deficits carried forward from the prior year--when determining whether
to waive the volume requirements, and by how much, when using the
general waiver authority.\38\
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\38\ Note that once it has determined that there is ``inadequate
domestic supply,'' EPA's consideration of the magnitude of the
volume reduction to be implemented under the general waiver
authority is factually and legally distinct from EPA's consideration
of the threshold determination of the ``projected volume available''
when acting under the cellulosic waiver authority. While EPA
permissibly excludes carryover RINs from its calculation of
``projected volume available'' under the cellulosic waiver authority
(see Sinclair, 101 F.4th at 883-884), EPA is not bound to follow the
same approach when implementing a volume reduction when acting under
the general waiver authority.
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As discussed in section III, we currently project cellulosic RIN
generation for 2024 will be approximately 0.97 billion RINs.
Additionally, obligated parties carried a 0.09 billion total cellulosic
RIN deficit from 2023 into the 2024 compliance year. If we do not
account for this deficit when using the general waiver authority, then
we would effectively force an even larger cellulosic RIN deficit to be
carried into 2025. Further, as noted in section III, any obligated
party that already carried a cellulosic RIN deficit from 2023 into 2024
is unable to subsequently carry a cellulosic RIN deficit from 2024 into
2025.\39\ Thus, if those obligated parties are unable to acquire
sufficient RINs to fully satisfy their 2024 cellulosic biofuel
obligations (including the cellulosic RIN deficit carried forward from
2023), then they would be forced into noncompliance. Since more than 20
obligated parties carried a 0.09 billion total cellulosic RIN deficit
from 2023 into 2024, noncompliance is a real possibility for some
obligated parties. Furthermore, since we are not proposing to use the
cellulosic waiver authority and EPA is only authorized to make CWCs
available when reducing the cellulosic biofuel volume requirement using
the cellulosic waiver authority, CWCs would not be available as a
result of this action.
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\39\ CAA section 211(o)(5)(D); 40 CFR 80.1427(b).
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Given the inadequate volume of cellulosic biofuel projected to be
produced in 2024 and the number of obligated parties that carried a
cellulosic RIN deficit from 2023 into 2024, EPA is proposing to use the
general waiver
[[Page 100447]]
authority to reduce the 2024 cellulosic biofuel volume requirement to
0.88 billion RINs, a reduction of 0.21 billion RINs from the current
volume requirement of 1.09 billion RINs. This proposed volume
requirement represents the projected cellulosic RIN generation for 2024
of 0.97 billion RINs less the total cellulosic RIN deficit from 2023 of
0.09 billion RINs.\40\
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\40\ We intend to consider additional cellulosic RIN generation
data throughout the remainder of 2024 as it becomes available to
inform any final action.
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We recognize that this proposed volume requirement does not account
for the availability of the limited number of 2023 cellulosic carryover
RINs. As discussed in section III, there are approximately 0.03 billion
2023 cellulosic RINs available for use in 2024, which is 0.06 billion
fewer cellulosic RINs than the 0.09 billion total cellulosic RIN
deficit from 2023. As we have noted in previous RFS actions, carryover
RINs provide important benefits to the RFS program, including
compliance flexibility to individual obligated parties, liquidity to
the RIN market, and mitigation against market impacts that could occur
if RIN generation in any year falls short of the required volume of
renewable fuel, as was the case for cellulosic biofuel in 2023.\41\ We
are therefore concerned about the impacts on the RIN market and
functioning of the RFS program were we to include these 2023 cellulosic
carryover RINs when determining the magnitude of the appropriate
reduction for the 2024 cellulosic biofuel volume requirement (i.e., EPA
maintains concerns with intentionally drawing down the number of
available cellulosic carryover RINs for 2025 to zero), particularly
since the 0.09 billion total cellulosic RIN deficit from 2023 is 0.06
billion RINs greater than the 0.03 billion 2023 cellulosic RINs
available for use in 2024, and CWCs would not be available to provide
compliance flexibility.
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\41\ See, e.g., 88 FR 44471, 44493-96 (July 12, 2023).
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Nevertheless, we also request comment on how we should consider
2023 cellulosic carryover RINs and the total cellulosic RIN deficit
from 2023 in determining the magnitude of the 2024 cellulosic biofuel
volume requirement reduction. Specifically, we request comment on: (1)
Using the general waiver authority to reduce the 2024 cellulosic
biofuel volume requirement to 0.88 billion RINs, as proposed; and (2)
Alternatively, using the general waiver authority to reduce the 2024
cellulosic biofuel volume requirement to either 0.97 billion RINs (the
projected cellulosic RIN generation for 2024) or 0.91 billion RINs
(0.97 billion projected cellulosic RIN generation for 2024 plus 0.03
billion 2023 cellulosic carryover RINs less 0.09 billion total
cellulosic RIN deficit from 2023). We also request comment on whether
there is any other 2024 cellulosic biofuel volume requirement that we
should consider (e.g., a volume lower than 0.88 billion RINs or a
volume higher than 0.97 billion RINs).
Finally, while the general waiver authority allows EPA to reduce
the volume requirements for other renewable fuel categories, we are not
proposing to change the 2024 advanced biofuel and total renewable fuel
standards. Based on RIN generation data through September 2024, we
project that advanced and total RIN generation for 2024 will exceed the
required volumes by over 2.6 billion RINs and 2.0 billion RINs,
respectively, notwithstanding the projected shortfall in cellulosic
biofuel production.\42\ This is in contrast to the proposed reduction
in cellulosic biofuel of 0.21 billion RINs. Thus, we believe reductions
to the 2024 advanced biofuel and total renewable fuel volume
requirements are not necessary or warranted based on the available
supply data, given that the market has already provided volumes in
excess of the requirement established in the Set Rule. We seek comment
on this determination.
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\42\ See ``Seasonality of RIN Generation (2019-2023) and
Projected RIN Generation for 2024 Based on Data Through September
2024,'' available in the docket for this action.
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The proposal to reduce the 2024 cellulosic biofuel volume
requirement is expected to have an economic impact. However,
quantitatively projecting the economic impact of this reduction is
challenging for several reasons. First, the proposed partial waiver is
due to an inadequate domestic supply of cellulosic biofuel in 2024.
Higher volumes of cellulosic RINs cannot simply be made available at
greater prices; instead, obligated parties will be unable to purchase
additional quantities of 2024 cellulosic RINs at any price. The
potential economic impact of this action is further complicated by the
fact that while some obligated parties can defer some or all of their
2024 cellulosic biofuel obligation to 2025, other obligated parties
that carried a cellulosic RIN deficit from 2023 into 2024 are required
to fully satisfy their cellulosic biofuel obligations in 2024
(including the cellulosic RIN deficit carried forward from 2023). Any
party that fails to do so would likely be in non-compliance and may be
subject to penalties.
Despite the complications associated with estimating the economic
impacts of this action, we can determine that it would result in cost
savings. This action proposes to reduce only the 2024 cellulosic
biofuel volume requirement. Because we are not proposing to reduce the
2024 advanced biofuel and total renewable fuel volume requirements,
this action would effectively replace the waived cellulosic biofuel
volume with additional volumes of advanced biofuel, which generally has
a lower marginal cost than cellulosic biofuel.\43\
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\43\ The nested nature of the RFS program allows cellulosic
biofuel to be used to meet the advanced biofuel and total renewable
fuel volume requirements. Any cellulosic that can be supplied beyond
the required volume can be used in place of advanced biofuel.
---------------------------------------------------------------------------
Finally, we can reasonably project that because this action would
reduce demand for cellulosic RINs, it is expected to directionally
decrease cellulosic RIN prices. The exact magnitude of this price
reduction depends on a wide range of market factors that prevent us
from quantitively projecting a RIN price impact. At the same time,
because this action incrementally increases demand for advanced RINs,
it is projected to directionally increase BBD and advanced RIN prices.
We note, however, that this price impact is expected to be relatively
small, as this action would increase demand by only about 2 percent of
the projected supply of advanced biofuel.\44\
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\44\ This action would increase the demand for advanced biofuel
by the magnitude of the proposed partial waiver of the 2024
cellulosic biofuel volume requirement (0.21 billion RINs). This is
approximately 2 percent of the projected supply of advanced biofuel
(9.15 billion RINs). For more detail on this projection, see
``Seasonality of RIN Generation (2019-2023) and Projected RIN
Generation for 2024 Based on Data Through September 2024,''
available in the docket for this action.
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V. Request for Comment on the Availability of the Cellulosic Waiver
Authority for 2024
As discussed in section II.C, the CAA also provides EPA with the
ability to reduce the cellulosic biofuel volume requirement using the
CAA section 211(o)(7)(D) cellulosic waiver authority in certain
circumstances. The cellulosic waiver authority differs from the general
waiver authority in several respects. This section discusses how the
general and cellulosic waiver authorities differ, how EPA could use the
cellulosic waiver authority to reduce the 2024 cellulosic biofuel
volume requirement if it is available in this instance, and solicits
comment on the implications of such use. Specifically, we request
comment on whether the cellulosic
[[Page 100448]]
waiver authority is available to EPA to reduce the required volume of
cellulosic biofuel in the current circumstances. This section also
discusses a methodological change that would be necessary for EPA to
set the price of CWCs, if the cellulosic waiver authority is available
to EPA and is used in the future.
A. Use of the Cellulosic Waiver Authority
In contrast to the general waiver authority, the cellulosic waiver
authority provides more specificity as to when it is available and how
the volume reduction should be determined when acting under the
authority. When EPA determines that a waiver of the cellulosic biofuel
volume requirement is appropriate under CAA section 211(o)(7)(D)(i),
then EPA is to reduce the required cellulosic biofuel volume to ``the
projected volume available.'' We have previously interpreted the phrase
``projected volume available'' to exclude carryover RINs when
determining the volume adjustment to be made; this interpretation was
affirmed by the D.C. Circuit in Sinclair.\45\
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\45\ Sinclair, 101 F.4th at 885.
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If applied alone in the current circumstances--that is, if EPA were
to use only the cellulosic waiver authority to reduce the 2024
cellulosic biofuel volume requirement and exclude consideration of the
0.09 billion total cellulosic RIN deficit from 2023 carried into 2024--
then EPA could only reduce the cellulosic biofuel volume requirement to
the projected volume available of 0.97 billion RINs in 2024. In
accordance with the statute, EPA would also be required to make CWCs
available to obligated parties, which could be used--along with
additional BBD or advanced RINs--to cover the remaining shortfall. The
availability of CWCs would help ensure RFS program stability by
reducing the likelihood that obligated parties may be forced into non-
compliance with their RFS obligations; any obligated party that is
unable to acquire sufficient cellulosic RINs to comply with their 2024
cellulosic biofuel obligations--plus any cellulosic RIN deficit carried
from 2023--would be able to purchase CWCs to cover the shortfall.\46\
As discussed in detail in section II.C, the availability of CWCs as an
alternative compliance mechanism, along with the value of an advanced
RIN, would effectively serve as a cellulosic RIN price cap.
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\46\ Unlike cellulosic RINs--which apply towards an obligated
party's cellulosic biofuel, advanced biofuel, and total renewable
fuel obligations--CWCs only apply towards an obligated party's
cellulosic biofuel obligation and not toward their nested advanced
biofuel and total renewable fuel obligation. Obligated parties that
satisfy their cellulosic biofuel obligations with CWCs would
therefore also have to purchase additional BBD or advanced RINs to
meet their associated advanced biofuel and total renewable fuel
obligations.
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We request comment on whether the cellulosic waiver authority is
available to partially waive the 2024 cellulosic biofuel volume
requirement. The initial 2024 applicable volumes and associated
percentage standards are already based on an EPA-calculated ``projected
volume available'' pursuant to the CAA section 211(o)(2)(B)(ii) and
(iv) set authority (i.e., not the table Congress established in CAA
section 211(o)(2)(B)(i)(III)). While EPA explained its view in the Set
Rule--which was the first rule promulgated using the set authority--
that ``our waiver authorities remain available as applied to the
volumes set in this action,'' \47\ we also stated that, ``Congress has
instructed us to begin a new phase of the RFS program, one in which
there are no statutory volume targets. This has important implications
for the use of our cellulosic waiver authority and the availability of
cellulosic waiver credits in future years . . . .'' \48\
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\47\ Set Rule RTC, p. 9.
\48\ 88 FR 44513 (July 12, 2023).
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If a commenter believes that the cellulosic waiver authority is
available in this instance, we additionally request comment on: (1)
Exercising both the general and cellulosic waiver authorities
concurrently to partially waive the 2024 cellulosic volume biofuel
requirement to 0.97 billion RINs; \49\ (2) Using the general and
cellulosic waiver authorities sequentially, rather than concurrently,
to first partially waive the 2024 cellulosic biofuel volume requirement
from 1.09 billion RINs to 0.97 billion RINs under the cellulosic waiver
authority, and then further waive the volume requirement using the
general waiver authority--from 0.97 billion RINs to a lower volume,
such as 0.88 or 0.91 billion RINs; and (3) Whether to also reduce the
2024 advanced biofuel and total renewable fuel volume requirements by
the same or lesser amount as the volume of cellulosic biofuel partially
waived under the cellulosic waiver authority.
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\49\ Although the general and cellulosic waiver authorities are
separate and independent of each other, the two could potentially be
used together; in the past, EPA has waived volume requirements using
two distinct waiver authorities concurrently. See, e.g., 87 FR
39600, 39608 (July 1, 2022) (revising 2020 RFS volumes to the
volumes actually used in that year using both the cellulosic waiver
authority and the reset authority).
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B. Change to Calculation of Cellulosic Waiver Credit Price
As discussed in section II.C, for any year for which EPA uses the
cellulosic waiver authority to reduce the required volume of cellulosic
biofuel, EPA must provide obligated parties the opportunity to purchase
CWCs. The price of these credits is determined using a formula
specified in CAA section 211(o)(7)(D)(ii), which is ``at the higher of
$0.25 per gallon or the amount by which $3.00 per gallon exceeds the
average wholesale price of a gallon of gasoline in the United States,''
adjusted for inflation. The RFS regulations specify that the ``U.S.
Total Gasoline Bulk Sales (Price) by Refiners as provided by the Energy
Information Administration'' is to be used to determine the average
wholesale price of gasoline and the inflation adjustment.\50\ However,
this data source is no longer being issued by the EIA and has not been
updated since March 2022.
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\50\ 40 CFR 80.1456(d)(2).
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While EPA is not proposing to use the cellulosic waiver authority
in this action, EPA is nevertheless proposing to revise its regulations
to point to a new data source for the average wholesale price of
gasoline to be used in the calculation of the CWC price in the event
the cellulosic waiver authority is used in the future. The only
wholesale gasoline prices currently reported by EIA are spot prices for
New York Harbor (conventional gasoline), U.S. Gulf Coast (conventional
gasoline), and Los Angeles (RBOB regular gasoline).\51\ EPA is
proposing to calculate the average wholesale gasoline price using a
weighted average of EIA's reported spot prices for wholesale gasoline
using the following weighting factors:
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\51\ This data is publicly available at: <a href="https://www.eia.gov/dnav/pet/pet_pri_spt_s1_m.htm">https://www.eia.gov/dnav/pet/pet_pri_spt_s1_m.htm</a>.
Table V.B-1--Weighting Factors for Calculating the Average Wholesale
Gasoline Price
------------------------------------------------------------------------
Weighting
EIA spot price factor \a\
(%)
------------------------------------------------------------------------
New York Harbor (conventional gasoline)..................... 37.5
U.S. Gulf Coast (conventional gasoline)..................... 37.5
[[Page 100449]]
Los Angeles (RBOB regular gasoline)......................... 25.0
------------------------------------------------------------------------
\a\ Weighting factors based on approximate amounts of conventional
gasoline (CG) and reformulated gasoline (RFG) sold in the United
States, with an equal weighting factor for the New York Harbor and
U.S. Gulf Coast CG prices. EPA currently estimates that approximately
25 percent of gasoline sold in the United States is RFG (<a href="https://www.epa.gov/gasoline-standards/reformulated-gasoline">https://www.epa.gov/gasoline-standards/reformulated-gasoline</a>).
Consistent with the approach used for the previous EIA data source,
EPA is proposing to calculate the CWC price using average monthly
gasoline spot price data from the 12-month period ending June of the
year prior to the relevant year (e.g., July 2022 to June 2023 for the
2024 CWC price). For illustration purposes, if EPA were to use the
cellulosic waiver authority to partially waive the 2024 cellulosic
biofuel volume requirement, using the proposed data sources and
weighting factors would result in a 2024 CWC price of $1.61.\52\ We
request comment on the proposed amendment to 40 CFR 80.1456(d)(2) to
identify new data sources and weighting factors for the average
wholesale price of gasoline and welcome comments about any alternative
data sources or approaches to the weighting factors.
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\52\ See ``Proposed 2024 Cellulosic Waiver Credit Price
Calculation,'' available in the docket for this action.
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VI. Calculation of 2024 Cellulosic Biofuel Percentage Standard
The obligated parties to which the percentage standards apply are
producers and importers of gasoline and diesel, as defined by 40 CFR
80.2. Each obligated party multiplies the percentage standards by the
sum of all non-renewable gasoline and diesel they produce or import to
determine their Renewable Volume Obligations (RVOs).\53\ The RVOs are
the number of RINs that the obligated party is responsible for
procuring and retiring to demonstrate compliance with the applicable
standards for that year. As described in section IV, we are proposing
to use the general waiver authority to partially waive the 2024
cellulosic biofuel volume requirement down to 0.88 billion RINs.
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\53\ 40 CFR 80.1407.
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The formula used to calculate the cellulosic biofuel percentage
standard applicable to obligated parties as a function of their
gasoline and diesel fuel production or importation is provided in 40
CFR 80.1405(c). Using the same values from the Set Rule for the
variables in this formula other than RFV<INF>CB</INF> (the cellulosic
biofuel volume),\54\ we have calculated the proposed revised cellulosic
biofuel percentage standard for 2024 to be 0.51 percent, down from 0.63
percent.\55\ This percentage standard is included in the proposed
regulations at 40 CFR 80.1405(a) and would apply to producers and
importers of gasoline and diesel.
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\54\ 88 FR 44519-21 (July 12, 2023).
\55\ See ``Calculation of Proposed 2024 Cellulosic Biofuel
Percentage Standard,'' available in the docket for this action.
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VII. Extension of Compliance Deadlines
A. Extension of 2024 Compliance Reporting Deadline
While the current 2024 compliance reporting deadline of March 31,
2025, is still several months away, we expect that promulgation of the
revised 2024 cellulosic biofuel standard will not occur until very
close to or after this deadline. Therefore, in order to provide
obligated parties with sufficient time to carry out and adjust their
compliance strategies once we finalize the revised 2024 cellulosic
biofuel standard, we are proposing to extend the 2024 compliance
reporting deadline from March 31, 2025, to the next quarterly
compliance reporting deadline after the effective date of the final
rule establishing the revised 2024 cellulosic biofuel standard.\56\ By
operation of law, the 2024 attest engagement deadline would also be
extended to the next June 1 annual attest engagement reporting deadline
after the revised 2024 compliance deadline.\57\ We request comment on
the proposed 2024 compliance reporting deadline.
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\56\ The quarterly reporting deadlines are March 31, June 1,
September 1, and December 1. 40 CFR 80.1451(f)(2).
\57\ 40 CFR 80.1464(d)(1)(i).
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To illustrate the potential timing of these deadlines, if the final
rule establishing the revised 2024 cellulosic biofuel standard is
published in the Federal Register on May 15, 2025, then the effective
date of the action would typically be 60 days later on July 14, 2025,
and the 2024 compliance reporting deadline would be September 1, 2025,
because that would be the next quarterly reporting deadline after the
effective date of the revised 2024 cellulosic biofuel standard. The
2024 attest engagement reporting deadline would then be June 1, 2026,
because that would the next June 1 annual attest engagement reporting
deadline after the revised 2024 compliance deadline.
B. Extension of Future RFS Compliance Reporting Deadlines
In 2022, EPA finalized changes to the way the RFS compliance and
attest engagement reporting deadlines are determined.\58\ Prior to that
action, the compliance and attest engagement reporting deadlines for a
given compliance year were March 31 and June 1 of the subsequent year,
respectively, even if EPA had not yet established the applicable RFS
standards for that year. Any change to these deadlines required EPA to
undertake a notice-and-comment rulemaking process to revise the RFS
regulations on a case-by-case basis. However, under the new provisions
finalized in 2022, the annual compliance reporting deadline is the
latest date of the following: \59\
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\58\ 87 FR 5696 (February 2, 2022).
\59\ 40 CFR 80.1451(f)(1)(i)(A).
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<bullet> March 31st of the subsequent calendar year;
<bullet> The next quarterly reporting deadline after the effective
date of the subsequent compliance year's standards (typically 60 days
after publication of the final rule in the Federal Register); or
<bullet> The next quarterly reporting deadline under 40 CFR
80.1451(f)(2) after the annual compliance reporting deadline for the
prior compliance year.
In this action, we are proposing to add a new provision that would
automatically extend the annual compliance reporting deadline for a
given compliance year if EPA proposes to revise an existing RFS
standard for that year. Under this approach, the publication of a
document in the Federal Register proposing to revise a renewable fuel
standard in 40 CFR 80.1405(a) would automatically extend the annual
compliance reporting deadline for that year to the next quarterly
reporting deadline after either: (1) The effective date of the final
rule that revises the existing standard (typically 60 days after
publication of the final rule in the Federal Register); or (2) 60 days
after the publication of a document in the Federal Register withdrawing
the proposed revision. However, if EPA does not either finalize or
withdraw the proposed revision within 12 months after the proposed rule
is published, we are proposing to limit the extension in this specific
circumstance to no more than the next quarterly reporting deadline that
is 12
[[Page 100450]]
months after the date of publication of the proposed rule.\60\ We
believe that this provides sufficient time for EPA to either finalize
or withdraw the proposed revision to an existing RFS standard and do
not want to indefinitely extend the compliance reporting deadline for a
compliance year with already established RFS standards.
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\60\ We note that under any of these scenarios, the applicable
compliance reporting deadline in 40 CFR 80.1451(f)(1)(i)(A) or (B)
of this section would apply if it were later than the proposed
extension (e.g., the deadline would be no earlier than March 31 of
the subsequent calendar year or the next quarterly reporting
deadline after the annual compliance reporting deadline for the
prior compliance year).
---------------------------------------------------------------------------
Essentially this new provision means that the mere proposal--as
opposed to a final action--by EPA to change an existing RFS standard
would change the associated compliance reporting deadline. This change
is being proposed because by the time the need is evident to extend the
deadline, there is often inadequate time to both propose and finalize a
rulemaking to do so. As an example, under this proposed approach, if
the 2025 compliance deadline was originally established as March 31,
2026,\61\ but then EPA proposed to revise the 2025 cellulosic biofuel
standard on September 1, 2025, the 2025 compliance reporting deadline
would be automatically extended until the first quarterly reporting
deadline after the effective date of the final rule setting the revised
2025 cellulosic biofuel standard. And EPA would not have to separately
propose to extend the 2025 compliance reporting deadline in that same
action, because the deadline would be automatically extended by
operation of law. If EPA then finalized the proposed revision to the
2025 cellulosic biofuel standard on January 15, 2026, with an effective
date of March 15, 2026, the 2025 compliance reporting deadline would
still be March 31, 2026 (i.e., the next quarterly reporting deadline
after the effective date of the final rule). Alternatively, if EPA
chose not to finalize the proposed revision to the 2025 cellulosic
biofuel standard and published a document in the Federal Register to
withdraw the proposed revision on February 15, 2026, the 2025
compliance reporting deadline would be June 1, 2026 (i.e., the next
quarterly reporting deadline that is at least 60 days after publication
of that document in the Federal Register). Finally, if EPA took no
action after proposing to revise the 2025 cellulosic biofuel standard,
the 2025 compliance deadline would be March 31, 2027 (i.e., 12 months
later than the otherwise applicable compliance reporting deadline of
March 31, 2026, under 40 CFR 80.1451(f)(1)(i)(A)).
---------------------------------------------------------------------------
\61\ Note that the 2025 compliance deadline will not be
established until the 2026 RFS standards become effective in 40 CFR
80.1405(a).
---------------------------------------------------------------------------
Finally, we are also proposing to consolidate and simplify the
existing provisions for the annual attest engagement deadline.
Specifically, we are proposing to specify that the deadline is always
the next June 1 annual attest engagement reporting deadline after the
annual compliance reporting deadline. The current language at 40 CFR
80.1464(d)(1) contains redundant and year-specific attest engagement
deadline language that, for a given compliance year, all result in the
same June 1 deadline, making the existing structure unnecessarily
complicated. The proposed simplified attest engagement deadline
language would not change the deadline for any compliance year but
would make it easier for obligated parties to understand when their
annual attest engagement reports are due.
This proposed approach would provide regulatory certainty for
obligated parties by clearly establishing future compliance deadlines
when EPA proposes to change a previously established RFS standard,
thereby preventing unnecessary burden on obligated parties to prepare,
submit, and then possibly retract and revise compliance reports for
deadlines that were later extended. This approach is consistent with
EPA's prior rules extending RFS compliance reporting deadlines in
different factual circumstances \62\ and with D.C. Circuit's case
law.\63\ We request comment on all aspects of this proposal to extend
future RFS compliance reporting deadlines as an operation of law.
---------------------------------------------------------------------------
\62\ 86 FR 17073 (April 1, 2021); 87 FR 5696 (Feb. 2, 2022).
\63\ Wynnewood Refining Co., LLC, et al. v. EPA, 77 F.4th 767,
779 (D.C. Cir. 2023) (``Thus, rather than task EPA with overseeing a
fixed compliance schedule, the Act gives EPA flexibility to craft
and adjust a compliance regime in service of the Act's core mandate:
to ensure the Act's annual renewable fuel volumes are met.''). See
also ACE, 864 F.3d at 718-21; Monroe Energy, LLC v. EPA, 750 F.3d
909, 919-20 (D.C. Cir. 2014); Nat'l Petrochemical & Refiners Ass'n
v. EPA, 630 F.3d 145, 154-58) (D.C. Cir. 2010).
---------------------------------------------------------------------------
VIII. Other RFS Amendments
In addition to waiving the 2024 cellulosic biofuel volume
requirement, we are also proposing several revisions to the RFS
program, as further discussed in this section.
A. Biogas Regulations
1. Measurement, Sampling, and Testing
We are proposing to align the testing frequency of pipeline-
specified components for RNG with the reporting frequency. Currently,
RNG producers must annually sample and test their RNG to demonstrate
that the RNG production facility is producing RNG that meets applicable
pipeline specifications,\64\ and they must submit these results as part
of their three-year registration updates.\65\ Stakeholders have
highlighted the disconnect between the annual testing requirement and
the three-year reporting requirement. Since we only collect this
information during the three-year update, we believe it appropriate to
only require sampling and testing of RNG once every three years, rather
than each year, and are proposing revisions to 40 CFR 80.110(f)(2)(iii)
to this end.
---------------------------------------------------------------------------
\64\ 40 CFR 80.110(f)(2)(iii).
\65\ 40 CFR 80.135(d)(6).
---------------------------------------------------------------------------
We are also proposing to clarify the regulations to reinforce that
we may approve alternative test methods for testing components of RNG
and that we may exempt the testing of a component that is not required
under the RNG producer's applicable pipeline specifications.
Specifically, we are proposing to revise the regulations at 40 CFR
80.135(d)(6), which contain the information related to RNG quality that
RNG producers must provide (including certificates of analysis for RNG
components), to allow alternatives to the test methods for individual
RNG components that are specified at 40 CFR 80.155(b). We would assess
alternative test methods based on whether the requested alternative
test method provides results that are reasonably accurate to the
results provided by the method specified at 40 CFR 80.155(b). While
under 40 CFR 80.135(d)(6)(v) RNG producers can already request
alternative methods and exemption from non-specified parameters, we
believe that adding further clarification would help alleviate
stakeholder confusion concerning the sampling and testing requirements
for RNG.
In order to streamline the alternative measurement protocol
approval and registration acceptance process, we are proposing to
remove the requirement that biogas and RNG production facilities must
demonstrate that their facility is incapable of using certain specified
meters in order to receive an alternative measurement protocol. After
promulgation of the biogas regulatory reform provisions in the Set
Rule, we have received dozens of alternative measurement protocol
submissions and issued guidance for the application of the criterion
that a facility demonstrate that it is incapable of using the specified
[[Page 100451]]
meters.\66\ We have determined that many of these meters are as
accurate and precise as those specified in the regulations, and have
also received a number of registration submissions for facilities that
have demonstrated the appropriateness of using such meters.\67\ Based
on our review of the alternative measurement protocol and registration
submissions and the new information we have obtained in the course of
this review, we believe that the first criterion whereby a facility
must demonstrate that they cannot use the specified meters is not
necessary to ensure the accurate and precise measurement of biogas and
RNG under the RFS program.\68\ We are also proposing to remove the
associated requirement that biogas producers and RNG producers
demonstrate at registration that they are unable to use the meters
specified.\69\
---------------------------------------------------------------------------
\66\ See ``Biogas Regulatory Reform Rule Criteria for Qualifying
for an Alternative Measurement Protocol Guidance,'' EPA-420-B-24-
014, March 2024.
\67\ A list of approved alternative measurement protocols can be
found at: <a href="https://www.epa.gov/fuels-registration-reporting-and-compliance-help/alternative-measurement-protocols-biogas-and">https://www.epa.gov/fuels-registration-reporting-and-compliance-help/alternative-measurement-protocols-biogas-and</a>.
\68\ 40 CFR 80.155(a)(3)(i).
\69\ 40 CFR 80.135(c)(3)(iii)(A) and (d)(3)(iii)(A).
---------------------------------------------------------------------------
We are also proposing to clarify at 40 CFR 80.155(a) that the
measurement of renewable CNG/LNG can be done through documentation
(e.g., utility statements) obtained by the CNG/LNG dispenser. Because
these statements are typically based on readings from meters that
generally comport with the already-specified meter standards, we
believe this is an appropriate approach for RNG RIN separators to
determine the amount of renewable CNG/LNG used as transportation fuel.
Finally, we are proposing to modify the measurement requirements at
40 CFR 80.155(a) for the measurement of energy content of biogas,
specifically.\70\ This proposed revision would allow for the use of
biogas quality analyzers accepted by EPA at registration instead of the
currently specified gas chromatographs (GCs).\71\ As noted when
finalizing the current measurement requirements, we requested but did
not receive standards for alternative measurement devices that
commenters suggested we allow in addition to GCs.\72\ In the absence of
such standards, we provided only for the use of GCs. However, since
then we have received much more extensive information and documentation
on alternative devices for measuring both RNG and biogas. For biogas
heat content measurement, in particular, analyzers differ from GCs both
in terms of their cost to install and operate as well as in the types
of gases and other constituents of biogas that are measured. And we
have learned that, unlike GCs, for biogas measurement devices there is
no readily available industry standard for these analyzers to be
designed and operated to. We are therefore proposing to revise the
regulations to provide a different set of requirements for biogas
measurement devices.
---------------------------------------------------------------------------
\70\ The proposed revisions in this paragraph would not impact
the measurement of RNG nor would they affect the measurement of flow
for biogas.
\71\ 40 CFR 80.155(a)(1).
\72\ 88 FR 44535 (July 12, 2023).
---------------------------------------------------------------------------
While in theory it would be appropriate for biogas analyzers to
measure the same constituents and meet the same standards of precision
and accuracy as GCs, our review of recently received information has
revealed that, at this time, it is more reasonable to evaluate biogas
measurement devices differently. We are thus proposing that such
devices may forgo the alternative measurement protocol process
specified at 40 CFR 80.155(a)(3). Instead, EPA would assess biogas
measurement devices on a case-by-case basis at registration. We believe
that for the measurement of heat content for biogas, these biogas
quality analyzers serve as a reasonable method to determine the volume
of biogas produced at a biogas production facility. However, we
continue to believe that the measurement of RNG through a GC or a
method that a party has demonstrated to be as accurate, precise, and
reliable as a GC is needed. The measurement of volume of RNG is
integral to the determination of the number of RINs that an RNG
producer can generate for such volume. As such, only methods that
comport to established industry standards (e.g., GCs meeting ASTM D7164
as specified at 40 CFR 80.155(a)(1)) or those that have been
demonstrated to be just as rigorous should be allowed.
Finally, we note that due to the numerous proposed changes to the
provisions of 40 CFR 80.155(a) in this action, we are proposing to
restructure 40 CFR 80.155(a) to ensure that the measurement
requirements for biogas, treated biogas, RNG, and renewable CNG/LNG are
clearly enumerated. We request comment on the proposed changes to the
measurement, sampling, and testing requirements described in this
section.
2. Other Amendments
We are proposing to clarify the provisions surrounding the annual
attest engagement procedures for biogas producers, RNG producers, and
RNG RIN separators at 40 CFR 80.165. These changes would clarify that
annual attest engagements are only required for parties that engage in
activities regulated under biogas regulatory reform in a given
compliance year (e.g., an RNG RIN separator only needs to obtain an
annual attest engagement if they separate RNG RINs in a compliance
year).
We are proposing to clarify that all biogas production facilities
registered under the previous biogas provisions (i.e., registered under
40 CFR 80.1450(b) to generate RINs under 40 CFR 80.1426(f)(10) or (11))
do not need updated engineering reviews as part of registering for the
new biogas provisions. In the Set Rule, we intended to allow all
previously registered biogas production facilities that did not undergo
changes as a result of the new biogas provisions to rely on their
existing engineering reviews until their next three-year engineering
review is due. However, after promulgation of the new biogas
provisions, stakeholders noted that the language in the regulations
appears to limit this allowance to only those biogas production
facilities in a biogas closed distribution system. Therefore, we are
proposing to revise 40 CFR 80.135(b)(2)(iii) to make it clear that all
previously registered biogas production facilities can use their
existing engineering review until the next one is due. We note,
however, that if changes to the facility are needed that would
otherwise require a new engineering review, the new engineering review
must be submitted regardless of this flexibility.
We are also proposing two changes to the registration requirements
for RNG RIN separators under 40 CFR 80.135(f). First, we are proposing
that, as part of the information submitted at registration, RNG RIN
separators must provide the location on the natural gas commercial
pipeline system where the RNG is withdrawn, which is information we
already require to be reported in periodic reports under 40 CFR
80.140(e)(1). In addition, as part of the forms and procedures
established for those reports, we require that the RNG RIN separator
include an EPA-issued facility registration system identification (FRS
ID) number. While most withdrawal points have previously assigned FRS
ID numbers, some do not. Due to how EPA's registration system is
designed, the only way to obtain those new FRS ID numbers is at the
point of registration. Therefore, to aid in the timely submittal of
reports, we are clarifying that RNG RIN separators must supply the
withdrawal locations at registration.
[[Page 100452]]
Second, we are proposing to remove the limitation at 40 CFR
80.115(b) that a CNG/LNG dispensing location may only be part of one
RNG RIN separator's registration at a time. Based on our experience
implementing the program, it is difficult for parties to know which RNG
RIN separator has registered for a particular CNG/LNG dispensing
location. Under the existing framework, there is currently a perverse
incentive for an RNG RIN separator to register for a CNG/LNG dispensing
location in order to block another party from registering that location
and prevent that party from separating RNG RINs for transportation fuel
dispensed at that location--even though the registering party does not
maintain an actual relationship to that location.
Removing this restriction will allow a dispensing location to be in
multiple parties' registrations, thereby avoiding the situation where
one party that does not intend to actually dispense renewable CNG/LNG
can block another party that does intend to dispense renewable CNG/LNG
from separating RINs at that location. However, we are maintaining the
limitation at 40 CFR 80.125(d)(2)(v) that only one party may actually
separate RINs for a given CNG/LNG dispensing location during a calendar
month. We continue to believe that this restriction is necessary to
preclude double counting of RINs because it is the limitation that only
one party can separate RINs for a volume dispensed at a station during
a given month that avoids double-counting, not whether multiple parties
reflect that station in their registration information on file with
EPA. We request comment on the proposed changes to the registration
requirements for RNG RIN separators.
B. Updated Standard Specification for Biodiesel
We are proposing to update the reference to ASTM D6751-20a--which
is used in the definition of biodiesel in 40 CFR 80.2--to reference the
most recent industry standard of ASTM D6751-24. ASTM D6751 is used to
define the quality of biodiesel that may participate in the RFS
program, and we periodically update industry standards codified in our
regulations to be consistent with changes to these standards over time.
However, since publication of the Set Rule, industry has updated ASTM
D6751 in a way that has resulted in inconsistency of quality standards
between the version currently specified in the RFS regulations (ASTM
D6751-20a) and the most recent version (ASTM D6751-24), which many
states use. To address potential confusion on the part of stakeholders
with regards to acceptable biodiesel quality under the RFS program, we
are proposing to update the regulations to reference the most recent
version of ASTM D6751. As also noted in section IX.I, should a newer
version of ASTM D6751 be released prior to finalization of this action,
we will consider including a reference to that most recent version.
C. Technical Corrections
We are proposing several technical amendments to 40 CFR part 80.
These amendments are being made to correct minor inaccuracies and
clarify the current regulations. These proposed changes are described
in table VIII.C-1.
Table VIII.C-1--Miscellaneous Technical Corrections and Clarifications
------------------------------------------------------------------------
Part and section of Title 40 Description of revision
------------------------------------------------------------------------
80.2.............................. Correcting a typo in the definition
of ``Glycerin''.
80.105(j)(3) and 80.110(j)(3)..... Clarifying that batch numbers are
numbered based on the compliance
year of the batch, rather than the
calendar year.
------------------------------------------------------------------------
IX. Statutory and Executive Order Reviews
Additional information about these statutes and Executive orders
can be found at <a href="https://www.epa.gov/laws-regulations/laws-and-executive-orders">https://www.epa.gov/laws-regulations/laws-and-executive-orders</a>.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 14094: Modernizing Regulatory Review
This action is a ``significant regulatory action'' as defined in
Executive Order 12866, as amended by Executive Order 14094.
Accordingly, EPA submitted this action to the Office of Management and
Budget (OMB) for Executive Order 12866 review. Documentation of any
changes made in response to the Executive Order 12866 review is
available in the docket.
B. Paperwork Reduction Act (PRA)
This action does not impose an information collection burden under
the PRA. OMB has previously approved the information collection
activities related to this proposed rule and has assigned the following
OMB control numbers 2060-0725, 2060-0740, and 2060-0749. This proposed
action would reduce the required cellulosic biofuel volume for 2024,
make minor revisions to the RFS program's biogas regulations, and would
not impose new or different reporting requirements on regulated parties
than already exist for the RFS program. In fact, this proposed rule is
expected to reduce the recordkeeping and reporting burden that is
currently approved under OMB control number 2060-0749, because it would
reduce the frequency of sampling, testing, and measurements for RNG
producers. The expected reduction is 1,560 hours and $358,800.\73\ EPA
intends to submit a non-substantive revision to OMB to reflect the
reduction in hours and dollar cost with the final rule.
---------------------------------------------------------------------------
\73\ The currently approved burdens are 83,393 hours and
$5,684,472. This proposed rule would result in 81,833 hours and
$5,325,672. The difference is a reduction in burden 1,560 hours and
$358,800.
---------------------------------------------------------------------------
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, EPA concludes that the impact of concern for
this proposed rule is any significant adverse economic impact on small
entities and that the agency is certifying that this proposed rule will
not have a significant economic impact on a substantial number of small
entities because the proposed rule relieves regulatory burden on the
small entities subject to the proposed rule.
For the biogas regulations, we are modifying the biogas provisions
to make compliance less burdensome for regulated parties. With respect
to the other amendments to the RFS regulations, this action makes minor
corrections and modifications to those regulations. As such, we do not
anticipate that there will be any significant adverse economic impact
on directly regulated small entities as a result of these revisions.
The small entities directly regulated by the RFS program are small
refiners, which are defined at 13 CFR 121.201. This action would
decrease burden via a reduction in required cellulosic biofuel volume
for 2024. We have therefore concluded that this action will
[[Page 100453]]
relieve regulatory burden for all directly regulated small entities.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million
(adjusted annually for inflation) or more (in 1995 dollars) as
described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or
uniquely affect small governments. This action reduces the 2024
cellulosic biofuel volume requirement and we believe that this action
represents the least costly, most cost-effective approach to achieve
the statutory requirements of the proposed rule.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the National Government and the States, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have Tribal implications as specified in
Executive Order 13175. This action will be implemented at the Federal
level and affects transportation fuel refiners, blenders, marketers,
distributors, importers, exporters, and renewable fuel producers and
importers. Tribal governments would be affected only to the extent they
produce, purchase, and use regulated fuels. Thus, Executive Order 13175
does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that EPA has reason to believe may disproportionately affect children,
per the definition of ``covered regulatory action'' in section 2-202 of
the Executive order. Therefore, this action is not subject to Executive
Order 13045 because it reduces the 2024 cellulosic biofuel volume
requirement and does not concern an environmental health risk or safety
risk. Since this action does not concern human health, EPA's Policy on
Children's Health also does not apply.
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. This action would reduce the required
cellulosic biofuel volume for 2024 consistent with the volume of such
fuel projected to actually be made available in 2024. Therefore, it is
not expected to have any impact on the supply, distribution, or use of
energy. In general, the RFS program is designed to achieve positive
effects on the Nation's transportation fuel supply by increasing energy
independence and security.
I. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR
Part 51
This action involves technical standards. Except for the standards
discussed in this section, the standards included in the regulatory
text as incorporated by reference were all previously approved for
incorporation by reference (IBR) and no change is included in this
action. In accordance with the requirements of 1 CFR 51.5, we are
proposing to incorporate by reference the following standard from ASTM
International (ASTM):
Table IX.I-1--Standard To Be Incorporated by Reference
------------------------------------------------------------------------
Part and section
Standard of Title 40 Summary
------------------------------------------------------------------------
ASTM D6751-24, Standard 80.2 and 80.12.... This updated
Specification for Biodiesel standard
Fuel Blendstock (B100) for describes the
Middle Distillate Fuels, characteristics
approved March 1, 2024. of biodiesel.
------------------------------------------------------------------------
A detailed discussion of this standard can be found in section
VIII.A.2. Copies of this standard may be obtained from ASTM
International, 100 Barr Harbor Dr., P.O. Box C700, West Conshohocken,
PA 19428-2959, by calling (877) 909-ASTM, or at <a href="https://www.astm.org">https://www.astm.org</a>.
The ASTM standard referenced in this proposed rule is also available
for public review in read-only format in the ASTM Reading Room at
<a href="https://www.astm.org/epa.htm">https://www.astm.org/epa.htm</a> only for the duration of the public
comment period.
ASTM International regularly publishes updated versions of its
standards and test methods, with the potential that there will be a
published version of the document listed above before we adopt the
final rule that is more recent than the document we identify in this
proposed rule. For any such updated version, we will consider including
a reference to the latest document when we finalize the revisions
covered by this proposed rule.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations and
Executive Order 14096: Revitalizing Our Nation's Commitment to
Environmental Justice for All
EPA believes that this type of action does not concern human health
or environmental conditions and therefore cannot be evaluated with
respect to potentially disproportionate and adverse effects on
communities with environmental justice concerns. This action does not
affect the level of protection provided to human health or the
environment by applicable air quality standards; it addresses a
shortfall in cellulosic biofuel production in 2024. This action does
not relax the control measures on sources regulated by the RFS program
and renewable fuel production decisions for 2024 have largely already
been made and are not expected to change as a result of this action.
Therefore, this action would not cause emissions increases from these
sources and is not expected to have any impact on environmental justice
communities.
X. Statutory Authority
Statutory authority for this action comes from sections 114, 203-
05, 208, 211, and 301 of the Clean Air Act, 42 U.S.C. 7414, 7522-24,
7542, 7545, and 7601.
List of Subjects in 40 CFR Part 80
Environmental protection, Administrative practice and procedure,
Air pollution control, Diesel fuel, Fuel
[[Page 100454]]
additives, Gasoline, Imports, Incorporation by reference, Oil imports,
Petroleum, Renewable fuel.
Michael S. Regan,
Administrator.
For the reasons set forth in the preamble, EPA proposes to amend 40
CFR part 80 as follows:
PART 80--REGULATION OF FUELS AND FUEL ADDITIVES
0
1. The authority citation for part 80 continues to read as follows:
Authority: 42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).
Subpart A--General Provisions
0
2. Amend Sec. 80.2 by revising the definition for ``Glycerin'' to read
as follows:
Sec. 80.2 Definitions.
* * * * *
Glycerin means a co-product from the production of biodiesel that
primarily contains glycerol.
* * * * *
0
3. Amend Sec. 80.12 by revising paragraph (c)(12) to read as follows:
Sec. 80.12 Incorporation by reference.
* * * * *
(c) * * *
(12) ASTM D6751-24, Standard Specification for Biodiesel Fuel
Blendstock (B100) for Middle Distillate Fuels, approved March 1, 2024
(``ASTM D6751''); IBR approved for Sec. 80.2.
* * * * *
Subpart E--Biogas-Derived Renewable Fuel
0
4. Amend Sec. 80.105 by revising paragraph (j)(3) to read as follows:
Sec. 80.105 Biogas producers.
* * * * *
(j) * * *
(3) The biogas producer must assign a number (the ``batch number'')
to each batch of biogas consisting of their EPA-issued company
registration number, the EPA-issued facility registration number, the
last two digits of the compliance year in which the batch was produced,
and a unique number for the batch, beginning with the number one for
the first batch produced each compliance year and each subsequent batch
during the compliance year being assigned the next sequential number
(e.g., 4321-54321-23-000001, 4321-54321-23-000002, etc.).
* * * * *
0
5. Amend Sec. 80.110 by revising paragraphs (f)(2)(iii) introductory
text and (j)(1) and (3) to read as follows:
Sec. 80.110 RNG producers, RNG importers, and biogas closed
distribution system RIN generators.
* * * * *
(f) * * *
(2) * * *
(iii) An RNG producer that injects RNG from an RNG production
facility into a natural gas commercial pipeline system must sample and
test a representative sample of all the following at least once every
three years, as applicable.
* * * * *
(j) * * *
(1) A batch of RNG is the total volume of RNG injected into a
natural gas commercial pipeline system from an RNG production facility
under a single batch pathway for the calendar month, in Btu LHV, as
determined under paragraph (j)(4) of this section.
* * * * *
(3) The RNG producer, RNG importer, or biogas closed distribution
system RIN generator must assign a number (the ``batch number'') to
each batch of RNG or biogas-derived renewable fuel consisting of their
EPA-issued company registration number, the EPA-issued facility
registration number, the last two digits of the compliance year in
which the batch was produced, and a unique number for the batch,
beginning with the number one for the first batch produced each
compliance year and each subsequent batch during the compliance year
being assigned the next sequential number (e.g., 4321-54321-23-000001,
4321-54321-23-000002, etc.).
* * * * *
0
6. Amend Sec. 80.115 by revising paragraph (b) to read as follows:
Sec. 80.115 RNG RIN separators.
* * * * *
(b) Registration. The RNG RIN separator must register with EPA
under Sec. Sec. 80.135 and 80.1450 and 40 CFR part 1090, subpart I, as
applicable.
* * * * *
0
7. Amend Sec. 80.125 by revising paragraph (c)(3) and adding paragraph
(d)(5) to read as follows:
Sec. 80.125 RINs for RNG.
* * * * *
(c) * * *
(3) Each party that transfers title of an assigned RNG RIN has
transferred the corresponding volume of RNG to the transferee.
(d) * * *
(5) An assigned RNG RIN must be separated by December 31 of the
subsequent calendar year after the RNG RIN was generated.
* * * * *
0
8. Amend Sec. 80.135 by:
0
a. Revising paragraph (b)(2)(ii);
0
b. Revising and republishing paragraphs (c)(3) and (d)(3);
0
c. Revising paragraph (d)(6)(v);
0
d. Adding paragraph (d)(6)(vi); and
0
e. Revising paragraph (f).
The revisions and addition read as follows:
Sec. 80.135 Registration.
* * * * *
(b) * * *
(2) * * *
(ii) A biogas closed distribution system RIN generator or biogas
producer does not need to submit an updated engineering review for any
facility before the next three-year engineering review update is due as
specified in Sec. 80.1450(d)(3).
* * * * *
(c) * * *
(3) The following information related to biogas measurement:
(i) A description of how biogas will be measured, including the
specific standards under which the meters are operated.
(ii) A description of the biogas production process, including a
process flow diagram that includes metering type(s) and location(s).
(iii) For an alternative measurement protocol under Sec.
80.155(a)(3), all the following:
(A) A description of how measurement is conducted.
(B) Any standards or specifications that apply.
(C) A description of all routine maintenance and the frequency that
such maintenance will be conducted.
(D) A description of the frequency of all measurements and how
often such measurements will be recorded under the alternative
measurement protocol.
(E) A comparison between the accuracy, precision, and reliability
of the alternative measurement protocol and the requirements specified
in Sec. 80.155(a)(1) and (2), as applicable, including any supporting
data.
* * * * *
(d) * * *
(3) The following information related to RNG measurement:
(i) A description of how RNG will be measured, including the
specific standards under which the meters are operated.
(ii) A description of the RNG production process, including a
process flow diagram that includes metering type(s) and location(s).
(iii) For an alternative measurement protocol under Sec.
80.155(a)(3), all the following:
[[Page 100455]]
(A) A description of how measurement is conducted.
(B) Any standards or specifications that apply.
(C) A description of all routine maintenance and the frequency that
such maintenance will be conducted.
(D) A description of the frequency of all measurements and how
often such measurements will be recorded under the alternative
measurement protocol.
(E) A comparison between the accuracy, precision, and reliability
of the alternative measurement protocol and the requirements specified
in Sec. 80.155(a)(1) and (2), as applicable, including any supporting
data.
* * * * *
(6) * * *
(v)(A) EPA may approve an RNG producer's request of an alternative
analysis in lieu of the certificates of analysis and summary table
required under paragraphs (d)(6)(i) through (iv) of this section if the
RNG producer demonstrates that the alternative analysis provides
information that is equivalent to that provided in the certificates of
analysis and that the RNG will meet all natural gas specifications
required under paragraph (d)(5) of this section.
(B) EPA may approve an RNG producer's request of a method other
than those specified at Sec. 80.155(b)(2) if the RNG producer
demonstrates that the alternative analysis provides information that is
reasonably accurate to that determined by the applicable method
specified at Sec. 80.155(b)(2).
(vi) An RNG producer does not need to test for a parameter
specified in Sec. 80.155(b)(2) if the parameter is not included in the
pipeline specifications submitted at registration under paragraph
(d)(5) of this section.
* * * * *
(f) RNG RIN separator. In addition to the information required
under paragraph (b) of this section, an RNG RIN separator must submit
all the following information:
(1) A list of locations of any dispensing stations where the RNG
RIN separator supplies or intends to supply renewable CNG/LNG for use
as transportation fuel.
(2) A list of the names and locations of each point where RNG will
be withdrawn from the natural gas commercial pipeline system.
* * * * *
0
9. Amend Sec. 80.155 by:
0
a. Revising paragraph (a);
0
b. Removing paragraph (b)(2)(vii); and
0
c. Redesignating paragraph (b)(2)(viii) as paragraph (b)(2)(vii).
The revision reads as follows:
Sec. 80.155 Sampling, testing, and measurement.
(a) Continuous measurement--(1) RNG and treated biogas measurement.
Any party required to measure the volume of RNG or treated biogas under
this subpart must continuously measure using meters as specified in
paragraphs (a)(1)(i) and (ii) of this section or have an accepted
alternative measurement protocol as specified in paragraph (a)(3) of
this section.
(i) In-line GC meters compliant with ASTM D7164 (incorporated by
reference, see Sec. 80.12), including sections 9.2, 9.3, 9.4, 9.5,
9.7, 9.8, and 9.11 of ASTM D7164.
(ii) Flow meters compliant with one of the following:
(A) API MPMS 14.3.1, API MPMS 14.3.2, API MPMS 14.3.3, and API MPMS
14.3.4 (incorporated by reference, see Sec. 80.12).
(B) API MPMS 14.12 (incorporated by reference, see Sec. 80.12).
(C) EN 17526 (incorporated by reference, see Sec. 80.12)
compatible with gas type H.
(2) Biogas measurement. Any party required to measure the volume of
biogas under this subpart must continuously measure using meters as
specified in paragraphs (a)(2)(i) and (ii) of this section or have an
accepted alternative measurement protocol as specified in paragraph
(a)(3) of this section.
(i) Flow meters compliant with one of the methods specified in
paragraph (a)(1)(ii) of this section.
(ii) Gas quality analyzers accepted under the party's registration
under Sec. 80.135.
(3) Alternative measurement protocols. EPA may accept an
alternative measurement protocol if the party demonstrates that the
alternative measurement protocol is at least as accurate and precise as
the applicable methods specified in paragraphs (a)(1) and (2) of this
section.
(4) Third-party measurement. (i) A biogas producer or RNG producer
may use measurements conducted by a third party using a method
specified in paragraphs (a)(1) through (3) of this section if the
producer obtains an affidavit from the third party stating that the
third party will use such method and EPA accepts the affidavit as part
of the producer's registration under Sec. 80.135.
(ii) A biogas producer or RNG producer relying on the measurement
of biogas, treated biogas, or RNG by a third party under paragraph
(a)(4)(i) of this section is deemed compliant with the continuous
measurement requirements of this paragraph (a) if the producer receives
measurement documentation from the third party that contains the daily
(or more frequent) total measured volume of biogas, treated biogas, or
RNG, as applicable.
(5) RNG RIN seperator measurement. An RNG RIN seperator must
measure natural gas or renewable CNG/LNG using one of the following:
(i) A method specified in paragraphs (a)(1) through (3) of this
section.
(ii) Documentation (e.g., a pipeline or utility statement) that
establishes the volume of natural gas or renewable CNG/LNG.
* * * * *
0
10. Amend Sec. 80.165 by revising paragraph (a)(1) to read as follows:
Sec. 80.165 Attest engagements.
(a) * * *
(1) The following parties must arrange for annual attestation
engagement using agreed-upon procedures:
(i) Biogas producers that supplied biogas to produce RNG or a
biogas-derived renewable fuel within the compliance year.
(ii) RNG producers that generated RINs within the compliance year.
(iii) RNG importers that generated RINs within the compliance year.
(iv) Biogas closed distribution system RIN generators that
generated RINs within the compliance year.
(v) RNG RIN separators that separated RINs from RNG within the
compliance year.
(vi) Renewable fuel producers that use RNG as a feedstock within
the compliance year.
* * * * *
Subpart M--Renewable Fuel Standard
0
11. Amend Sec. 80.1405 by revising entry ``2024'' in table 1 to
paragraph (a) to read as follows:
Sec. 80.1405 What are the Renewable Fuel Standards?
(a) * * *
[[Page 100456]]
Table 1 to Paragraph (a)--Annual Renewable Fuel Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
Biomass-based Supplemental total
Year Cellulosic biofuel diesel standard Advanced biofuel Renewable fuel renewable fuel
standard (%) (%) standard (%) standard (%) standard (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
2024................................................ 0.51 2.82 3.79 12.50 n/a
* * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * *
0
12. Amend Sec. 80.1451 by:
0
a. Revising paragraph (f)(1)(i)(A) introductory text; and
0
b. Adding paragraphs (f)(1)(i)(B)(5) and (f)(1)(i)(C).
The revision and additions read as follows:
Sec. 80.1451 What are the reporting requirements under the RFS
program?
* * * * *
(f) * * *
(1) * * *
(i) * * *
(A) Except as specified in paragraphs (f)(1)(i)(B) and (C) of this
section, obligated parties must submit annual compliance reports by
whichever of the following dates is latest:
* * * * *
(B) * * *
(5) For the 2024 compliance year, annual compliance reports must be
submitted by the next quarterly reporting deadline under paragraph
(f)(2) of this section after the date the revised 2024 cellulosic
biofuel standard becomes effective in Sec. 80.1405(a).
(C) If EPA publishes a document in the Federal Register that
proposes to revise a renewable fuel standard in Sec. 80.1405(a),
annual compliance reports for that compliance year must be submitted by
the following date, as applicable:
(1) If EPA publishes a document in the Federal Register that
finalizes the proposed revision to the renewable fuel standard in Sec.
80.1405(a), whichever of the following dates is latest:
(i) The next quarterly reporting deadline under paragraph (f)(2) of
this section after the date the revised renewable fuel standard becomes
effective in Sec. 80.1405(a).
(ii) The applicable compliance reporting deadline under paragraph
(f)(1)(i)(A) or (B) of this section.
(2) If EPA publishes a document in the Federal Register that
withdraws the proposed revision to the renewable fuel standard in Sec.
80.1405(a), whichever of the following dates is latest:
(i) The next quarterly reporting deadline under paragraph (f)(2) of
this section that is 60 days after the date the withdrawal is
published.
(ii) The applicable compliance reporting deadline under paragraph
(f)(1)(i)(A) or (B) of this section.
(3) If EPA does not publish a document in the Federal Register that
either finalizes or withdraws the proposed revision to the renewable
fuel standard in Sec. 80.1405(a) within 12 months after the date the
proposed rule was published, whichever of the following dates is
latest:
(i) The next quarterly reporting deadline under paragraph (f)(2) of
this section that is 12 months after the proposed rule was published.
(ii) The applicable compliance reporting deadline under paragraph
(f)(1)(i)(A) or (B) of this section.
* * * * *
0
13. Amend Sec. 80.1456 by revising paragraph (d)(2) to read as
follows:
Sec. 80.1456 What are the provisions for cellulosic biofuel waiver
credits?
* * * * *
(d) * * *
(2) The wholesale price of gasoline is calculated by applying the
weighting factors specified in table 1 to this paragraph (d)(2) to the
Energy Information Administration average monthly gasoline spot price
values specified in table 1 for the twelve-month period ending June of
the year preceding the compliance period.
Table 1 to Paragraph (d)(2)--Wholesale Price of Gasoline Weighting
Factors
------------------------------------------------------------------------
Weighting factor
Gasoline spot price data source (%)
------------------------------------------------------------------------
Conventional Gasoline--New York Harbor, Regular..... 37.5
Conventional Gasoline--U.S. Gulf Coast, Regular..... 37.5
RBOB Regular Gasoline--Los Angeles.................. 25.0
------------------------------------------------------------------------
* * * * *
0
14. Amend Sec. 80.1464 by revising paragraph (d)(1) to read as
follows:
Sec. 80.1464 What are the attest engagement requirements under the
RFS program?
* * * * *
(d) * * *
(1) Obligated parties. Obligated parties must submit annual attest
engagement reports to EPA by the next June 1 annual attest engagement
reporting deadline after the annual compliance reporting deadline under
Sec. 80.1451(f)(1)(i).
* * * * *
[FR Doc. 2024-28978 Filed 12-11-24; 8:45 am]
BILLING CODE 6560-50-P
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</html>Indexed from Federal Register on December 12, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.