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

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the refiner met the criteria for small refiner status during the calendar year 2004. EPA will notify the refiner of approval or disapproval of small refiner status by letter. Unlike the case for small refineries, refiners that receive approved small refiner status and subsequently do not meet all of the criteria for small refiner status (i.e, cease producing gasoline from processing crude oil, employ more than 1,500 people or exceed the 155,000 bpcd crude oil capacity limit) as a result of a merger with or acquisition of or by another entity, are disqualified as small refiners, except in the case of a merger between two previously approved small refiners. As in other EPA programs, where such disqualification occurs, the refiner must notify EPA in writing no later than 20 days following the disqualifying event. The Act provides that the Secretary of Energy must conduct a study for EPA to determine whether compliance with the renewable fuels requirement would impose a disproportionate economic hardship on small refineries. If the study finds that compliance with the renewable fuels requirements would impose a disproportionate economic hardship on a particular small refinery, EPA is required to extend the small refinery’s exemption for a period of not less than two additional years. The Act also provides that a refiner with a small refinery may at any time petition EPA for an extension of the exemption for the reason of disproportionate economic hardship. In accordance with these provisions of the Act, the proposed rule includes a process by which refiners with small refineries may petition EPA for an extension of the small refinery exemption. As provided in the Act, the proposed rule would require EPA to act on the petition not later than 90 days after the date of receipt of the petition. During the initial exemption period and any extended exemption periods, the gasoline produced by small refineries and refineries owned by approved small refiners would be subject to the renewable fuel standard. Under the proposed rule, the automatic five year exemption for small refineries, and any extended exemptions, may be waived upon notification to EPA. In waiving its exemption, gasoline produced at a small refinery would be included in the RFS program and would be included in the gasoline used to determine a refiner’s renewable fuel obligation. If a refiner waives the exemption for their small refinery or their exemption as a small refiner, the refiner would be able to separate and transfer RINs like any other obligated party. If a refiner does not waive the exemption, the refiner could still separate and transfer RINs, but only for the renewable fuel that the refiner itself blends into gasoline (i.e. the refiner operates as an oxygenate blender). b. General Hardship Exemption In recent rulemakings, we have included a general hardship exemption for parties that could demonstrate severe economic hardship in complying with the standard. We are proposing not to include in the RFS program provisions for a general hardship exemption. Unlike most other fuels programs, the RFS program includes inherent flexibility since compliance with the renewable fuels standard is based on a nationwide - 58 -
trading program, without any per gallon requirements, and without any requirement that the refiner or importer produce the renewable fuel. By purchasing RINs, obligated parties would be able to fulfill their renewable fuel obligation without having to make capital investments that may otherwise be necessary in order to blend renewable fuels into gasoline. We believe that sufficient RINs would be available and at reasonable prices, given that EIA projects that far greater renewable fuels will be used than required. Given the flexibility provided in the RIN trading program, including the provisions for deficit carry-over, and the fact that the standard is proportional to the volume of gasoline actually produced, we believe that there likely would be no need for a general hardship exemption. We request comment on whether there is a need to include a general hardship exemption in the RFS program. c. Temporary Exemption Based On Unforeseen Circumstances In recent rulemakings, we have also included a temporary exemption based on unforeseen circumstances. We are proposing not to include such an exemption in the RFS program. The need for such an exemption would primarily be based on the inability to comply with the renewable fuels standard due to a natural disaster, such as a hurricane. However, in the event of a natural disaster, we believe that the volume of gasoline produced by an obligated party would also drop, which would result in a reduction in the renewable fuel requirement. We believe, therefore, that unforeseen circumstances, such as a hurricane or other natural disaster, would not result in a party’s inability to obtain sufficient RINs to comply with the applicable renewable fuels standard. We request comment on whether there would be a need to include a temporary exemption based on unforeseen circumstances, and, in particular, circumstances that may affect ethanol producers. 4. What Are The Opt-in And State Waiver Provisions Under The RFS Program? a. Opt-in Provisions For Noncontiguous States And Territories The Act provides that, upon the petition of a noncontiguous state or U.S. territory, EPA may apply the renewable fuels requirements to gasoline produced in or imported into that noncontiguous state or U.S. territory at the same time as, or any time after the effective date of the RFS program. 25 In granting such a petition, EPA may issue or revise the RFS regulations, establish applicable volume percentages, provide for generation of credits, and take other actions as necessary to allow for the application of the RFS program in a noncontiguous state or territory. Today’s proposed rule would implement this provision of the Act by providing a process wherein the governor of a noncontiguous state or territory may petition EPA to 25 CAA Section 211(o)(2)(A)(ii), as added by Section 1501(a) of the Energy Policy Act of 2005. - 59 -
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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.
Page 7 and 8: C. Requirements for Producers and I
Page 9 and 10: G. Executive Order 13045: Protectio
Page 11 and 12: The increased use of renewable fuel
Page 13 and 14: establish the applicable national v
Page 15 and 16: Today's proposal outlines the full
Page 17 and 18: enewable fuel feedstock market pric
Page 19 and 20: Unlike VOC and NOx, emissions of CO
Page 21 and 22: These renewable feedstocks are then
Page 23 and 24: 5. Potential Water Quality Impacts
Page 25 and 26: enewable fuel volume which each par
Page 27 and 28: certain volume of renewable fuel. E
Page 29 and 30: est practices would have the option
Page 31 and 32: As stated, the renewable fuel stand
Page 33 and 34: enewable fuel volumes in the calcul
Page 35 and 36: For illustrative purposes, we have
Page 37 and 38: These credit provisions have meanin
Page 39 and 40: Stdi = The RFS program standard for
Page 41 and 42: gasoline. The Act is unclear on whe
Page 43 and 44: . Ethanol Made From Any Feedstock I
Page 45 and 46: generate thermal energy used to pro
Page 47 and 48: animal wastes, including poultry fa
Page 49 and 50: 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: capability for all of the small ref
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 and 102: As discussed in Section III.D, it i
Page 103 and 104: additional enforcement burdens plac
Page 105 and 106: B. Requirements for Obligated Parti
Page 107 and 108: fuel and containing identifying inf
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We request comment on our proposed
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We also request comment on our prop
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The refiner or importer would be li
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Plant Feedstock Corn a Table VI.A.1
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Leading the Midwest in ethanol prod
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EPA forecasts ethanol production to
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As shown in Table VI.A.2-1 and Figu
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3. Current Ethanol and MTBE Consump
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Oxygenate Use (Bgal) 4.5 4.0 3.5 3.
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change from the 2004 base case. 53
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per gallon to biodiesel produced fr
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ased on the assumption that the ble
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Modifications to the rail, barge, t
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other waste materials as discussed
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elatively small fraction of the tot
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production costs using prices for s
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the capital cost of making the nece
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information on biodiesel freight co
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For further details on RVP reductio
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assuming only that blending of etha
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costs). At a $70 per barrel crude o
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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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