Rule2026-17872
Rescission of Production Incentives for Cellulosic Biofuels
Primary source
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Published
September 1, 2026
Effective
October 1, 2026
Issuing agencies
Energy Department
Abstract
The Office of Critical Minerals and Energy Innovation (formerly Office of Energy Efficiency and Renewable Energy) of the Department of Energy (DOE) is publishing a final rule to rescind the regulatory framework for production incentives for cellulosic biofuels, eliminating an inactive regulatory framework.
Full Text
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<title>Federal Register, Volume 91 Issue 168 (Tuesday, September 1, 2026)</title>
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[Federal Register Volume 91, Number 168 (Tuesday, September 1, 2026)]
[Rules and Regulations]
[Pages 56001-56004]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17872]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 91, No. 168 / Tuesday, September 1, 2026 /
Rules and Regulations
[[Page 56001]]
DEPARTMENT OF ENERGY
10 CFR Part 452
[EERE-2025-OT-0031]
RIN 1904-AG07
Rescission of Production Incentives for Cellulosic Biofuels
AGENCY: Office of Critical Minerals and Energy Innovation, U.S.
Department of Energy.
ACTION: Final rule.
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SUMMARY: The Office of Critical Minerals and Energy Innovation
(formerly Office of Energy Efficiency and Renewable Energy) of the
Department of Energy (DOE) is publishing a final rule to rescind the
regulatory framework for production incentives for cellulosic biofuels,
eliminating an inactive regulatory framework.
DATES: This rule is effective on October 1, 2026.
FOR FURTHER INFORMATION CONTACT: Dr. Valerie Reed, U.S. Department of
Energy, Office of Critical Minerals and Energy Innovation, Alternative
Fuels and Feedstocks Office, 1000 Independence Avenue SW, Washington,
DC 20585; (202) 492-6371 or <a href="/cdn-cgi/l/email-protection#9bcdfaf7fee9f2feb5c8fae9f2e8f0e2b6c9fefeffdbfefeb5fff4feb5fcf4ed"><span class="__cf_email__" data-cfemail="2e784f424b5c474b007d4f5c475d4557037c4b4b4a6e4b4b004a414b00494158">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. General Discussion
II. Response to Comments
III. Conclusion
IV. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
B. Review Under Additional Executive Orders and Presidential
Memoranda
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act of 1995
E. Review Under the National Environmental Policy Act of 1969
F. Review Under Executive Order 13132
G. Review Under Executive Order 12988
H. Review Under the Unfunded Mandates Reform Act of 1995
I. Review Under the Treasury and General Government
Appropriations Act, 1999
J. Review Under Executive Order 12630
K. Review Under Treasury and General Government Appropriations
Act, 2001
L. Review Under Executive Order 13211
M. Congressional Notification
V. Approval of the Office of the Secretary
I. General Discussion
On May 16, 2025, the U.S. Department of Energy (DOE) published a
notice of proposed rulemaking (NOPR) to rescind the Production
Incentives for Cellulosic Biofuels regulations at 10 CFR part 452. 90
FR 20942. That proposed rule invited comments on any reason to rescind
or not rescind these regulations, specifically seeking input on the
relevancy of 10 CFR part 452 and whether DOE should retain these
regulations should funding be appropriated again to the relevant
authority, section 942 of the Energy Policy Act of 2005 (Pub. L. 109-
58), codified at 42 U.S.C. 16251.
The Cellulosic Biofuels Production Incentive program, originally
established under the authority of the Energy Policy Act of 2005, was
intended to provide production incentives for cellulosic biofuels.
However, Congress has not appropriated funds to DOE to implement the
program. As a result, DOE's Cellulosic Biofuels Production Incentive
program is unused. Furthermore, since the program's inception, the
landscape for biofuels incentives has evolved. For example, the
Renewable Fuel Standard (RFS) program, administered by the
Environmental Protection Agency (EPA), has become the primary federal
mechanism to incentivize the production of renewable fuels, including
cellulosic biofuels, through Renewable Identification Numbers (RINs).
As proposed in the NOPR, this final rule removes 10 CFR part 452 in
its entirety, as it is outdated and no longer fits within DOE's current
strategic priorities or the prevailing energy policy framework. This
deregulatory action also reduces administrative burden by eliminating
an inactive regulatory framework.
II. Responses to Comments
DOE received one comment in response to the NOPR published on May
16, 2025. The commenter is listed in Table II.1.
Table II-1--List of Commenters From the NOPR
----------------------------------------------------------------------------------------------------------------
Document No.
Commenter Reference in this rule in the docket Commenter type
----------------------------------------------------------------------------------------------------------------
T P..................................... Comment 1................. 0002 Individual.
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The commenter stated that the rulemaking is subject to National
Environmental Policy Act (NEPA) and requires detailed statements on
major Federal actions. Comment 1. The commenter further asserted that
although DOE intends to use a categorical exclusion for NEPA
compliance, this action has extraordinary circumstances, including
``potential for uncertain environmental risks, potential impacts on
sensitive resources, and potential for cumulative impacts[,]'' which
would prevent the use of a categorical exclusion. Id. The commenter
concluded that DOE must proceed with analysis under an environmental
assessment (EA) or environmental impact statement (EIS) prior to
finalizing this rule.
DOE appreciates the commenter's input regarding its NEPA review.
DOE has carefully considered the commenter's concern about the
applicability of a categorical exclusion and potential extraordinary
circumstances. DOE has analyzed this action in accordance with NEPA, as
amended, DOE's NEPA implementing regulations (set forth in 10 CFR part
1021), and DOE's NEPA implementing procedures (published outside the
Code of Federal Regulations on June 30, 2025
[[Page 56002]]
(Available at: <a href="http://www.energy.gov/nepa/articles/doe-nepa-implementing-procedures-june-2025">www.energy.gov/nepa/articles/doe-nepa-implementing-procedures-june-2025</a>)).
On July 3, 2025, DOE published an interim final rule in the Federal
Register that revised 10 CFR part 1021 to contain only administrative
and routine actions excepted from NEPA review in appendix A, its
existing categorical exclusions in appendix B, related requirements,
and a provision for emergency circumstances. 90 FR 29676. DOE notes
that appendix A in 10 CFR part 1021 (formerly categorical exclusions)
are now administrative and routine actions that do not require NEPA
review.
DOE has reviewed this action in accordance with NEPA and determined
that removing requirements for awarding production incentives to the
lowest bidder in a reverse auction is strictly procedural. 10 CFR part
1021, appendix A, paragraph A6. DOE has determined that, as a
procedural action, it is an administrative and routine action and,
therefore, is not a major Federal action significantly affecting the
quality of the human environment within the meaning of NEPA and no
further environmental review is needed.
In addition, this final rule removes an obsolete and inactive
regulatory program. This program has not been utilized for a
significant period and its objectives have been addressed by other
federal programs, primarily the RFS program implemented by the EPA. The
rescission of an inactive program, which has no ongoing direct or
indirect environmental impacts, does not constitute a major Federal
action with the potential for significant environmental effects.
Therefore, the rescission of regulatory text for an inactive program
does not introduce new uncertain environmental risks, impact sensitive
resources, or create cumulative impacts and does not warrant an EA or
an EIS as commenter suggests.
III. Conclusion
For the reasons discussed in the preceding sections of this
document, DOE is finalizing the rescission of the Cellulosic Biofuels
Production Incentive program regulations at 10 CFR part 452. This final
rule removes an inactive and obsolete regulatory program.
IV. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866
E.O. 12866, ``Regulatory Planning and Review'' requires agencies,
to the extent permitted by law, to (1) propose or adopt a regulation
only upon a reasoned determination that its benefits justify its costs;
(2) tailor regulations to impose the least burden on society,
consistent with obtaining regulatory objectives, taking into account,
among other things, and to the extent practicable, the costs of
cumulative regulations; (3) select, in choosing among alternative
regulatory approaches, those approaches that maximize net benefits; (4)
to the extent feasible, specify performance objectives, rather than
specifying the behavior or manner of compliance that regulated entities
must adopt; and (5) identify and assess available alternatives to
direct regulation, including providing economic incentives to encourage
the desired behavior, such as user fees or marketable permits, or
providing information upon which choices can be made by the public. For
the reasons stated in the preamble, this final rule is consistent with
these principles. Although the agency remains free to extend the sunset
date on any particular regulation, the sunset rule is expected to
generally result in decreased regulatory burdens and to ensure that
regulations remain up to date in light of changing circumstances.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to the Office of Information and
Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB)
for review. OIRA has determined that this regulatory action is a
``significant regulatory action'' under section 3(f) of E.O. 12866.
Accordingly, this action was subject to review under that Executive
Order by OIRA.
B. Review Under Additional Executive Orders and Presidential Memoranda
This final rule has been determined to be an ``E.O. 14192
deregulatory action'' because it intends to reduce the burden to
society by streamlining the regulatory framework and improving
efficiency for regulated entities. As mentioned previously, 10 CFR part
452 relates to the inactive Cellulosic Biofuels Production Incentive
program. The primary impact from the final rule is to eliminate the
regulatory burden associated with an inactive incentive program. This
final rule allows affected entities to focus their resources on matters
of importance to them. These benefits are difficult to quantify,
although DOE believes them to be positive. Even small positive changes,
when aggregated, can result in meaningful burden reduction for
industry.
C. Review Under Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (IRFA) and a
final regulatory flexibility analysis (FRFA) for any rule that by law
must be proposed for public comment, unless the agency certifies that
the rule, if promulgated, will not have a significant economic impact
on a substantial number of small entities. As required by E.O. 13272,
``Proper Consideration of Small Entities in Agency Rulemaking,'' 67 FR
53461 (Aug. 16, 2002), DOE published procedures and policies on
February 19, 2003, to ensure that the potential impacts of its rules on
small entities are properly considered during the rulemaking process.
68 FR 7990. DOE has made its procedures and policies available on the
Office of the General Counsel's website (<a href="http://www.energy.gov/gc/office-general-counsel">www.energy.gov/gc/office-general-counsel</a>).
DOE reviewed this final rule under the provisions of the Regulatory
Flexibility Act and the policies and procedures published on February
19, 2003. This final rule rescinds an inactive program and imposes no
new requirements or burdens on any entity, including small businesses.
Therefore, DOE concludes that the impacts of the rule would not have a
``significant economic impact on a substantial number of small
entities,'' and that the preparation of an FRFA is not warranted. DOE
transmitted this certification and supporting statement of factual
basis to the Chief Counsel for Advocacy of the Small Business
Administration for review under 5 U.S.C. 605(b).
D. Review Under Paperwork Reduction Act
This final rule imposes no new information collection requirements
subject to the Paperwork Reduction Act and OMB clearance is not
required. (44 U.S.C. 3501 et seq.)
E. Review Under National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act (NEPA) of 1969
(42 U.S.C. 4321 et seq.), DOE has analyzed this action in accordance
with NEPA, as amended, DOE's NEPA implementing regulations (set forth
in 10 CFR part 1021), and DOE's NEPA implementing procedures (published
outside the Code of Federal Regulations on June 30, 2025 (Available at:
<a href="http://www.energy.gov/nepa/articles/doe-nepa-implementing-procedures-june-2025">www.energy.gov/nepa/articles/doe-nepa-implementing-procedures-june-2025</a>)). On July 3, 2025, DOE published
[[Page 56003]]
an interim final rule in the Federal Register that revised 10 CFR part
1021 to contain only administrative and routine actions excepted from
NEPA review in appendix A, its existing categorical exclusions in
appendix B, related requirements, and a provision for emergency
circumstances. 90 FR 29676. DOE notes that appendix A in 10 CFR part
1021 (formerly categorical exclusions) are now administrative and
routine actions that do not require NEPA review.
DOE has reviewed this action in accordance with NEPA and determined
that removing requirements for awarding production incentives to the
lowest bidder in a reverse auction is strictly procedural. 10 CFR part
1021, appendix A, paragraph A6. DOE has determined that, as a
procedural action, it is an administrative and routine action and,
therefore, is not a major Federal action significantly affecting the
quality of the human environment within the meaning of NEPA and no
further environmental review is needed.
F. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4,
1999), imposes certain requirements on Federal agencies formulating and
implementing policies or regulations that preempt State law or that
have federalism implications. The Executive order requires agencies to
examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the necessity for such actions. The Executive order
also requires agencies to have an accountable process to ensure
meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.
On March 14, 2000, DOE published a statement of policy describing the
intergovernmental consultation process it will follow in the
development of such regulations. 65 FR 13735. DOE has examined this
final rule and has determined that it would not have a substantial
direct effect 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. Therefore, no
further action is required by Executive Order 13132.
G. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
this final rule meets the relevant standards of Executive Order 12988.
H. Review Under Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy. 2
U.S.C. 1532(a), (b). The UMRA also requires a Federal agency to develop
an effective process to permit timely input by elected officers of
State, local, and Tribal governments on a ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
<a href="http://www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf">www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf</a>.
DOE examined this final rule according to UMRA and its statement of
policy and determined that the final rule does not contain a Federal
intergovernmental mandate, nor is it expected to require expenditures
of $100 million or more in any one year by State, local, and Tribal
governments, in the aggregate, or by the private sector. As a result,
the analytical requirements of UMRA do not apply.
I. Review Under Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well being.
This final rule would not have any impact on the autonomy or integrity
of the family as an institution. Accordingly, DOE has concluded that it
is not necessary to prepare a Family Policymaking Assessment.
J. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March
18, 1988), DOE has determined that this final rule would not result in
any takings that might require compensation under the Fifth Amendment
to the U.S. Constitution.
K. Review Under Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at: <a href="https://www.energy.gov/cio/department-energy-information-quality-guidelines">https://www.energy.gov/cio/department-energy-information-quality-guidelines</a>.
DOE has reviewed this final rule under the OMB and DOE guidelines and
has
[[Page 56004]]
concluded that it is consistent with applicable policies in those
guidelines.
L. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA
at OMB, a Statement of Energy Effects for any significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgated or is expected to lead to promulgation of a
final rule, and that: (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any significant energy action, the
agency must give a detailed statement of any adverse effects on energy
supply, distribution, or use should the proposal be implemented, and of
reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
This final rule is a significant regulatory action under E.O.
12866. However, it would not have a significant adverse effect on the
supply, distribution, or use of energy, nor has it been designated as
such by the Administrator at OIRA. Accordingly, DOE has not prepared a
Statement of Energy Effects.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will submit to Congress a report
regarding the issuance of this final rule prior to the effective date
set forth at the outset of this rule. The report will state that it has
been determined that the rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).
V. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of final rule.
List of Subjects in 10 CFR Part 452
Fuel, Grant programs, Recordkeeping and reporting requirements,
Renewable energy.
Signing Authority
This document of the Department of Energy was signed on July 15,
2026, by Audrey Robertson, Assistant Secretary of Energy (EERE). That
document with the original signature and date is maintained by DOE. For
administrative purposes only, and in compliance with requirements of
the Office of the Federal Register, the undersigned DOE Federal
Register Liaison Officer has been authorized to sign and submit the
document in electronic format for publication, as an official document
of the Department of Energy. This administrative process in no way
alters the legal effect of this document upon publication in the
Federal Register.
Signed in Washington, DC, on August 28, 2026.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
PART 452 [REMOVED AND RESERVED]
0
For the reasons set forth in the preamble, under the authority of 42
U.S.C. 7101 et. seq., and 42 U.S.C. 16251, DOE is removing and
reserving part 452.
[FR Doc. 2026-17872 Filed 8-31-26; 8:45 am]
BILLING CODE 6450-01-P
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