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

presence of the denaturant. For instance, under Internal Revenue Service (IRS)
regulations the denaturant can be counted as ethanol by parties filing claims to the IRS
for the federal excise tax credit. Also, EIA reporting requirements for ethanol producers
allow them to include the denaturant in their reported volumes.
Since we are proposing that denatured ethanol be assigned an Equivalence Value
of 1.0, this must be reflected in the values of REth and ECEth. We have calculated these
values to be 93.1 percent and 77,550 Btu/gal, respectively. Details of these calculations
can be found in the aforementioned technical memorandum to the docket.
The calculation of the Equivalence Value for a particular renewable fuel can lead
to values that deviate only slightly from 1.0, and/or can have varying degrees of precision
depending on the uncertainty in the value of R or ECRF. We are therefore proposing three
simplifications to streamline the application of Equivalence Values in the context of the
RFS program. First, consistent with our approach to the R value for ethanol, we are
proposing that all Equivalence Values calculated to be in the range of 0.9 - 1.2 be treated
as if they were exactly 1.0. This approach would eliminate many of the complexities
described in Section III.D.2 that are associated with using renewable fuels for RFS
compliance purposes that have an Equivalence Value other than 1.0. Second, we propose
that several bins be created for renewable fuels with Equivalence Values above 1.0.
These bins would replace the calculated Equivalence Values with standardized ones to
account for uncertainty in the calculations as well as to simplify their application. We
propose that the bins be 1.0, 1.3, 1.5, and 1.7. Each renewable fuel would be assigned to
the bin that is closest to its calculated Equivalence Value. Finally, we propose that all
Equivalence Values, if any, which are calculated to be less than 0.9 be rounded to the
first decimal place.
Using the methodology described above, we calculated the Equivalence Values
for a number of different renewable fuels expected to be in use over the next few years,
and modified them according to our proposed rounding protocols. These are shown in
the table below.
Table III.B.4-1
Proposed Equivalence Values for some renewable fuels
Equivalence Value (EV)
Cellulosic biomass ethanol or waste-
2.5
derived ethanol
Ethanol from corn, starches, or sugar 1.0
Biodiesel (mono alkyl ester) 1.5
Non-ester renewable diesel 1.7
Butanol 1.3
ETBE from corn ethanol 0.4
Since there are a wide variety of possible renewable fuels that could qualify under
the RFS program, there may be cases in which a party produces a renewable fuel not
shown in Table III.B.4-1. In such cases we propose to allow the producer to submit a
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