Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

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The blender approach would differ from our proposed program and all the other alternative approaches in that it would be based on actual blending activity, as compared to ownership of the renewable fuel. Under this alternative approach, the blender would not use records of batch ownership to establish generation of credits, but rather would be required to demonstrate that it had actually blended the renewable fuel into gasoline or diesel. Since the blender was responsible for blending, the blender would generate the credits from that blending and would have the right to transfer them to another party. Although blenders could use IRS fuel credit forms to verify the volumes of ethanol blended into gasoline under this alternative, the IRS forms would not provide useful information related to biodiesel or other renewable fuels that are blended into conventional gasoline or diesel 36 . Alternative approaches to verifying that these other renewable fuels were actually blended would therefore need to be designed under this alternative, and these verifications would necessarily involve additional recordkeeping and reporting requirements. This approach would also tend to increase the burdens on refiners to gain access to credits and thus demonstrate compliance. A refiner who took ownership of a batch of renewable fuel could not use that batch to meet its RVO unless he blended it into gasoline or diesel himself. Such circumstances would create additional complexity for the obligated parties that are avoided by the more streamlined approach we are proposing. A blender approach would also be difficult to implement. To begin with, many blenders are small businesses, and none have been substantially regulated in an EPA fuel program before. We would be imposing upon these parties the primary enforcement burden associated with the RFS program even though they are not obligated for meeting the renewable fuel standard. Also, this approach would not be able to distinguish between cellulosic biomass ethanol and ethanol made from other feedstocks, which creates significant difficulties in meeting program requirements. Under a blender approach, even accurate records of blending would be difficult to verify. There are more than 1200 blenders in the U.S. who blend ethanol into gasoline, in addition to those that blend biodiesel into conventional diesel fuel. Thus the blender approach would maximize the number of parties involved, overly complicating the compliance system. The enforcement burden on the Agency would be significant, and ultimately it would be likely that many claims of blending would go unchecked. Some of the concerns raised above could be addressed by re-introducing the RIN concept into a blender approach. For instance, the existence of RINs could help identify cellulosic biomass ethanol as such. However, if a RIN-based system were implemented, this alternative approach would become very similar to our proposed program, but with 36 There is some evidence that biodiesel producers are operating as blenders in order to claim the right to the federal excise tax credit for biodiesel. However, in these cases they often blend only very small amounts of conventional diesel into biodiesel, such as 0.1 volume percent. The mixture, identified as B99.9, is then transported to another blender who often adds significant additional quantities of conventional diesel to make blends such as B2 or B20. - 102 -
additional enforcement burdens placed upon blenders. As a result the advantages of this alternative approach over our proposed program would disappear. Due to the additional and unnecessary recordkeeping and reporting burdens that would be placed upon blenders under this alternative, the dissociation of credits from renewable fuels acquired by obligated partiers, and the likelihood that many blending events may go unchecked, we do not believe that the alternative blender approach should be adopted. - 103 -
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The Administrator signed the follow
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Ave., NW, Washington DC. This Docke
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Table of contents: I. Background A.
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C. Requirements for Producers and I
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G. Executive Order 13045: Protectio
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The increased use of renewable fuel
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establish the applicable national v
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Today's proposal outlines the full
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enewable fuel feedstock market pric
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Unlike VOC and NOx, emissions of CO
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These renewable feedstocks are then
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5. Potential Water Quality Impacts
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enewable fuel volume which each par
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certain volume of renewable fuel. E
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est practices would have the option
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As stated, the renewable fuel stand
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enewable fuel volumes in the calcul
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For illustrative purposes, we have
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These credit provisions have meanin
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Stdi = The RFS program standard for
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gasoline. The Act is unclear on whe
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. Ethanol Made From Any Feedstock I
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generate thermal energy used to pro
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animal wastes, including poultry fa
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limit this program solely to a stra
Page 51 and 52: presence of the denaturant. For ins
Page 53 and 54: First, doing so could create an inc
Page 55 and 56: For purposes of this preamble, the
Page 57 and 58: capability for all of the small ref
Page 59 and 60: trading program, without any per ga
Page 61 and 62: obligated parties. However, there i
Page 63 and 64: particular importance for 2013 and
Page 65 and 66: have to significantly change their
Page 67 and 68: The D code would identify cellulosi
Page 69 and 70: Another case in which a RIN may not
Page 71 and 72: Section IV. In the context of demon
Page 73 and 74: equired volumes shown in Table I.B-
Page 75 and 76: We request comment on the valid lif
Page 77 and 78: e used for current year compliance.
Page 79 and 80: equirements by roughly 10 to 30 per
Page 81 and 82: 4. Provisions For Exporters Of Rene
Page 83 and 84: Previous-year RINs: RINs that came
Page 85 and 86: a. Responsibilities Of Renewable Fu
Page 87 and 88: another, in electronic or paper for
Page 89 and 90: e a one-to-one correspondence betwe
Page 91 and 92: Parent batch Actual volume (gal) Ba
Page 93 and 94: should also have the right to separ
Page 95 and 96: 3. Distribution Of Separated RINs O
Page 97 and 98: obligated parties to exercise marke
Page 99 and 100: Our proposed program is designed to
Page 101: As discussed in Section III.D, it i
Page 105 and 106: B. Requirements for Obligated Parti
Page 107 and 108: fuel and containing identifying inf
Page 109 and 110: We request comment on our proposed
Page 111 and 112: We also request comment on our prop
Page 113 and 114: The refiner or importer would be li
Page 115 and 116: Plant Feedstock Corn a Table VI.A.1
Page 117 and 118: Leading the Midwest in ethanol prod
Page 119 and 120: EPA forecasts ethanol production to
Page 121 and 122: As shown in Table VI.A.2-1 and Figu
Page 123 and 124: 3. Current Ethanol and MTBE Consump
Page 125 and 126: Oxygenate Use (Bgal) 4.5 4.0 3.5 3.
Page 127 and 128: change from the 2004 base case. 53
Page 129 and 130: per gallon to biodiesel produced fr
Page 131 and 132: ased on the assumption that the ble
Page 133 and 134: Modifications to the rail, barge, t
Page 135 and 136: other waste materials as discussed
Page 137 and 138: elatively small fraction of the tot
Page 139 and 140: production costs using prices for s
Page 141 and 142: the capital cost of making the nece
Page 143 and 144: information on biodiesel freight co
Page 145 and 146: For further details on RVP reductio
Page 147 and 148: assuming only that blending of etha
Page 149 and 150: costs). At a $70 per barrel crude o
Page 151 and 152: gasoline use scenarios will cost th
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the incentive to blend in ethanol b
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supporting this rulemaking. We hope
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We base our estimates of fuel quali
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Table VIII.A.1.b-2 Effect of MTBE a
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pre-1998 model year onroad diesel e
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1. Primary Analysis The national em
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Table VIII.B.1-4 Annual Emissions N
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RFG due to the absence of an RVP wa
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increase in ambient ozone levels is
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developing a model of secondary org
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IX. Impacts On Fossil Fuel Consumpt
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intended to help fuel producers est
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efficiency and to reduce air emissi
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combined those displacement indexes
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3. Displacement Indexes (DI) The di
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Table IX.C.1-1 Fossil fuel impacts
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as on the exports of agricultural p
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which may change in response to an
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X. Agricultural Sector Economic Imp
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XI. Public Participation We request
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ways to comply with any previously
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small refiner under this proposal.
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meet these criteria to be considere
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“economically significant” as d
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40 CFR Part 80 is proposed to be am
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(b) Renewable Fuel Standard for 200
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(2) The term “Renewable fuel” i
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RFStdi = Renewable Fuel Standard in
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a party’s renewable volume obliga
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(a) YYYY is the calendar year in wh
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(ii) The value for EEEEEE in an ext
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(2) A deficit is calculated accordi
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(a) (1) Any party that exports any
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(e) If a refiner is complying on an
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calendar year; however, disqualific
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§80.76, if such information has no
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(1) A summary report of the annual
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(4) Reports shall be submitted on f
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(1) Fail to acquire sufficient RINs
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(b) The following attest procedures
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(B) That the RFS-FRGAS remained seg
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EPA employees or EPA contractors, f
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(iv) Determine the date and time th
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(ii) Be licensed as a Certified Pub
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