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

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inspection, audit, recordkeeping and reporting safeguards to verify compliance with the requirements on fuel use at foreign facilities. We seek comment on the most effective means of doing this. Because of the difficulty of implementing these safeguards, however, we also solicit comment on a provision that would limit the application of this definition of cellulosic ethanol only to ethanol plants in the U.S. Regarding the use of waste heat as a source of thermal energy, we note that there may be situations in which an off-site furnace, boiler or heater creates excess or waste heat that is not used in the process for which the thermal energy is employed. For example, a glass furnace generates a significant amount of waste heat that often goes unused. We are proposing to include waste heat in the definition of “other waste materials”, and also that waste heat captured and used as a source of thermal energy in an ethanol plant would satisfy the requirement of other waste materials being “otherwise used” to make ethanol. Although the source of the waste heat is ultimately a fossil fuel in most cases, we recognize that without the capture of the heat and subsequent use in the ethanol plant, that energy would be unused, and the ethanol plant would consume the equivalent amount of fossil fuel. Thus, for the same amount of fossil fuel consumption at the off-site plant, heat energy capture would result in displacement of fossil fuel use at the ethanol plant. Because of potential confusion identifying thermal energy that is waste heat from fossil fuel combustion sources on site (i.e., at the ethanol plant itself), we are limiting this proposal to waste heat captured at off-site plants. The Agency solicits comment on our proposal to consider waste heat in the definition of “other waste materials”. We propose to interpret the term “fossil fuel normally used in the production of ethanol” to mean fossil fuel used at the facility in the ethanol production process itself, rather than other phases such as trucks transporting product, and fossil fuel used to grow and harvest the feedstock. Therefore the diesel fuel that trucks consume in hauling wood waste from sawmills to the ethanol facility would not be counted in determining whether the 90% displacement criteria has been met. We are interpreting it in this way because we believe the accounting of fuel use associated with transportation and other life cycle activities would be extremely difficult and in many cases impossible. 15 The Agency solicits comments on this aspect of our approach in accounting for fossil fuel displacement. Based on the operation of ethanol plants, we are viewing this definition to apply to waste materials used to produce thermal energy rather than electrical energy. Electrical usage at ethanol plants is used for lights and equipment not related to the production of ethanol. Also, the calculation of fossil fuel used to generate such electrical usage would be difficult because it is not always possible to track the source of electricity that is purchased off-site. We are therefore proposing that the displacement of 90 percent of fossil fuels at the ethanol plant means those fuels consumed on-site and that are used to 15 In Section IX of today’s preamble we discuss our analysis of the lifecycle fuel impacts of the RFS rule, with respect to greenhouse gas (GHG) emissions. While we do account for fuel used in hauling materials to ethanol plant in our analysis, we are using average nationwide values, rather than data collected for individual plants. - 44 -
generate thermal energy used to produce ethanol. The term “fossil fuel normally used in the production of ethanol” in today’s proposal means fossil fuel that is combusted at the facility itself to produce thermal energy. Owners are required to keep records of fuel (waste-derived and fossil fuel) used for thermal energy for verification of their claims. They will also be required to track the fossil fuel equivalent of the waste heat captured and used in the ethanol process. Since such waste heat would typically be purchased through agreement with the off-site owner, we do not feel it burdensome for owners to track such information. Owners would therefore calculate the amount of energy in Btu’s associated with waste-derived fuels (including the fossil fuel equivalent waste heat), and divided by the total energy in Btus used to produce ethanol in a given year. Holders of RINs associated with the sale or trade of such cellulosic ethanol would get the benefit of the 2.5 credit (through 2012 when such credit is valid). In the event that the requirements of 90 percent displacement of fossil fuel are not met, the owner of a facility producing such ethanol would be required to obtain additional RINs to make up whatever deficit exists for those RINs sold or traded with a value of 2.5. Assuming this is made up, then holders of the RINs associated with the ethanol the plant produced in the previous year would not be affected. We solicit comment on this proposed approach. c. Ethanol that is made from the non-cellulosic portions of animal, other waste, and municipal waste "Waste derived ethanol” is defined in the Act as ethanol derived from “animal wastes, including poultry fats and poultry wastes, and other waste materials; … or municipal solid waste.” Both animal wastes and municipal solid waste are also listed as allowable feedstocks for the production of "cellulosic biomass ethanol." The determination of the appropriate category of ethanol is based on whether the feedstocks on question contain cellulose or hemicellulose that is used to make the ethanol. Thus if the ethanol is made from the non-cellulosic portions of animal, other waste, or municipal waste, it is labeled "waste derive ethanol." 2. What Is Biodiesel? The definition of renewable fuel in the Act includes corn-based and cellulosic biomass ethanol, waste derived ethanol, and the renewable fuel portion of blending components derived from renewable fuel. Biodiesel is also specifically named as being included in the Act's definition of renewable fuel. The Act states that “The term ‘renewable fuel’ includes…biodiesel (as defined in section 312(f) of the Energy Policy Act of 1992.” This definition, as modified by Section 1515 of the Energy Act states: The term “biodiesel” means a diesel fuel substitute produced from nonpetroleum renewable resources that meets the registration requirements for fuels and fuel additives established by the Environmental - 45 -
Page 1 and 2: The Administrator signed the follow
Page 3 and 4: Ave., NW, Washington DC. This Docke
Page 5 and 6: 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: . Ethanol Made From Any Feedstock I
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 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 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
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
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costs). At a $70 per barrel crude o
Page 151 and 152:
gasoline use scenarios will cost th
Page 153 and 154:
the incentive to blend in ethanol b
Page 155 and 156:
supporting this rulemaking. We hope
Page 157 and 158:
We base our estimates of fuel quali
Page 159 and 160:
Table VIII.A.1.b-2 Effect of MTBE a
Page 161 and 162:
pre-1998 model year onroad diesel e
Page 163 and 164:
1. Primary Analysis The national em
Page 165 and 166:
Table VIII.B.1-4 Annual Emissions N
Page 167 and 168:
RFG due to the absence of an RVP wa
Page 169 and 170:
increase in ambient ozone levels is
Page 171 and 172:
developing a model of secondary org
Page 173 and 174:
IX. Impacts On Fossil Fuel Consumpt
Page 175 and 176:
intended to help fuel producers est
Page 177 and 178:
efficiency and to reduce air emissi
Page 179 and 180:
combined those displacement indexes
Page 181 and 182:
3. Displacement Indexes (DI) The di
Page 183 and 184:
Table IX.C.1-1 Fossil fuel impacts
Page 185 and 186:
as on the exports of agricultural p
Page 187 and 188:
which may change in response to an
Page 189 and 190:
X. Agricultural Sector Economic Imp
Page 191 and 192:
XI. Public Participation We request
Page 193 and 194:
ways to comply with any previously
Page 195 and 196:
small refiner under this proposal.
Page 197 and 198:
meet these criteria to be considere
Page 199 and 200:
“economically significant” as d
Page 201 and 202:
40 CFR Part 80 is proposed to be am
Page 203 and 204:
(b) Renewable Fuel Standard for 200
Page 205 and 206:
(2) The term “Renewable fuel” i
Page 207 and 208:
RFStdi = Renewable Fuel Standard in
Page 209 and 210:
a party’s renewable volume obliga
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(a) YYYY is the calendar year in wh
Page 213 and 214:
(ii) The value for EEEEEE in an ext
Page 215 and 216:
(2) A deficit is calculated accordi
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(a) (1) Any party that exports any
Page 219 and 220:
(e) If a refiner is complying on an
Page 221 and 222:
calendar year; however, disqualific
Page 223 and 224:
§80.76, if such information has no
Page 225 and 226:
(1) A summary report of the annual
Page 227 and 228:
(4) Reports shall be submitted on f
Page 229 and 230:
(1) Fail to acquire sufficient RINs
Page 231 and 232:
(b) The following attest procedures
Page 233 and 234:
(B) That the RFS-FRGAS remained seg
Page 235 and 236:
EPA employees or EPA contractors, f
Page 237 and 238:
(iv) Determine the date and time th
Page 239:
(ii) Be licensed as a Certified Pub
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