We are proposing a definition of biointermediate that differs from
what we proposed in the REGS rule. Previously, we proposed to define a

biointermediate as any renewable fuel feedstock material that meets all
of the following criteria:
     It was derived from renewable biomass.
     It did not meet the definition of renewable fuel and RINs
were not generated for it.
     It was produced at a facility that is registered with EPA,
but which is different than the facility at which it is used to produce
renewable fuel.
     It was made from the feedstock and would be used to
produce the renewable fuel in accordance with the process(es) listed in
the approved pathway.
     It was processed in such a way that it is substantially
altered from the feedstock listed in the approved pathway.
    We pointed out in the proposed REGS rule that our intent was that
feedstocks currently listed in an approved pathway or that underwent
form changes would not be considered biointermediates \163\ and
excluded form changes from the definition included in the proposed REGS
rule. Such form changes included, but were not limited to the
following:
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    \163\ See 81 FR 80834 (November 16, 2016).
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     Chopping biomass into small pieces, pressing it, or
grinding it into powder.
     Filtering out suspended solids from recycled cooking and
trap grease.
     Degumming vegetable oils.
     Drying wet biomass.
     Adding water to biomass to produce a slurry.
    We received several public comments suggesting that the proposed
definition was too broad and would include existing feedstocks that are
currently used in approved pathways. These commenters argued that the
additional registration, reporting, and recordkeeping requirements
would be unnecessarily burdensome on the production of renewable fuels
that already can generate RINs under the current RFS program.
Commenters pointed to EPA's stated intent in the proposed REGS rule to
avoid inclusion of almost all feedstocks covered by existing pathways
either in Table 1 to 40 CFR 80.1426 or an EPA-approved pathway under 40
CFR 80.1416.
    Additionally, since the proposed REGS rule, we have developed a
better understanding of the potential implementation oversight
challenges surrounding the inclusion of certain types of
biointermediates. We now believe that the general, one-size-fits-all
regulatory framework proposed in the REGS rule would not work in many
of the biointermediates situations anticipated now and in the future
and that it would be difficult for us to implement appropriately. In
some cases it would treat situations as biointermediates when it was
not necessary to do so, in other cases it would not treat situations as
biointermediates that should be in order to provide proper oversight,
and in still other cases it might treat situations as biointermediates
but not in the way that our regulations were intended to address. Our
additional consideration of biointermediates since REGS has emphasized
that some potential biointermediates require unique provisions for
ensuring that qualifying renewable biomass was used to make the
biointermediate, ensuring that the biointermediate and the resultant
renewable fuel processed at separate facilities continues to fall under
an approved pathway, and ensuring that the renewable fuel gets used as
transportation fuel, heating oil, or jet fuel. In other cases, we have
concerns with the potential generation of invalid or fraudulent RINs
especially when a biointermediate either is itself or is similar to a
renewable fuel. Historically, when we have brought renewable fuels into
the program that required unique considerations or had concerns over
the generation of valid RINs, we have either promulgated specific
regulatory requirements to address any concerns (e.g., renewable fuel
oil) or imposed certain terms and conditions on approved pathways as
described at 40 CFR 80.1460(a)(7).
    Based on the concerns highlighted in comments and what we have
learned about individual biointermediates over the last several years,
we no longer believe a broad approach to defining biointermediates
would allow us to have sufficient oversight of the program (i.e., to
ensure that renewable fuels that generate RINs meet the applicable
statutory and regulatory requirements). Each biointermediate has
particular compliance and enforcement considerations, including how to
track the biointermediate back to renewable biomass, how a
biointermediate may be processed with other feedstocks to produce
renewable fuel, how a biointermediate fits within existing pathways,
and how to demonstrate the cellulosic content of the biointermediate.
As such, we now believe it is necessary to design a program that allows
us to consider and, if necessary, address these challenges on a
biointermediate-by-biointermediate basis. We are thus proposing to
specifically define the scope of which biointermediates would be
covered by a biointermediates program. In other words, under this
proposal we are defining the specific situations in which it would be
permitted to process feedstocks into renewable fuels at multiple
facilities. Under this proposal, if we do not list a
``biointermediate'' explicitly in the definition of biointermediate,
the ``biointermediate'' would not be lawful for use in making renewable
fuels under the RFS program. In order for a new biointermediate to be
brought into the program, under this proposal, we would amend the
regulations again in the future to add the new biointermediate to the
list and make any other necessary regulatory changes needed to provide
proper oversight for its potentially unique circumstances.
    In this action, we are proposing to initially include the following
biointermediates: Biocrude, free fatty acid (FFA) feedstock, and
undenatured ethanol (including ethanol solutions containing less than
95% ethanol). We are also seeking comment on a longer list of
additional potential biointermediates that we may choose to include in
the final rulemaking depending upon the comments we receive on this
proposal. We believe that the three proposed types of biointermediates
we are proposing could effectively be accommodated by the updated
provisions described in this action. We believe these biointermediates
are likely to be available in measurable quantities in the near future
and that our proposed biointermediate regulations can ensure proper
compliance oversight and enforcement. We have had discussions with a
variety of parties interested in producing and using biointermediates
since the proposed REGS rule. Some parties making fuels from biocrude,
FFA feedstocks, and undenatured ethanol could begin producing volumes
as early as 2022. Since these parties are relatively close or already
capable of producing renewable fuels from biocrude, FFA feedstock, and
undenatured ethanol, and it is relatively clear to us how they will do
so and what the compliance oversight issues might be with these
biointermediates, we believe that it would be appropriate to allow the
use of these biointermediates to produce renewable fuel after we
finalize a biointermediates program.
    To clearly establish what would be allowed under this proposed
biointermediates program, we are also proposing definitions for the
specific biointermediates that would initially be included in the
program. We are proposing to define undenatured ethanol as ethanol that
has not been denatured per Department of Treasury

requirements.\164\ We are also proposing specific definitions for
biocrude and FFA feedstock. In the future as we revise the regulations
to allow new biointermediate into the program, we would then also
define those biointermediates. We also note that if we finalize
additional biointermediates as part of the biointermediate definition
in the final rule, we will also include specific definitions for those
additional biointermediates.
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    \164\ See 27 CFR parts 19 through 21. Ethanol does not become a
``renewable fuel'' under the RFS regulations until it is denatured.
The preamble to the RFS2 regulations explains that ``ethanol that is
valid under RFS2 must be denatured.'' See 75 FR 14670, 14713 (March
26, 2010).
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    The inclusion of FFA feedstock in the proposed definition of
biointermediates implies that the existing pathways in Table 1 to 40
CFR 80.1426 satisfy the applicable GHG reduction thresholds in cases
where FFA is produced from a feedstock and used to produce a renewable
fuel in accordance with a process(es) listed in an approved pathway. We
believe this conclusion is supported for the feedstocks listed in Table
1 that FFA biointermediates may be produced from, including biogenic
waste fats, oils, and greases (FOG), distillers corn oil and sorghum
oil, food wastes, oil crops, and algal oil. As discussed in the 2020
proposed rule, our original approval of pathways that use these
feedstocks was based on lifecycle GHG assessments; our basis for
potentially allowing FFAs produced from those feedstocks as
biointermediates is that we believe the potential additional processing
and transport associated with the additional FFA production step would
add a limited amount of GHG emissions to the fuel's lifecycle.\165\
However, where EPA has not conducted a lifecycle GHG assessment and
determined that the original renewable biomass feedstock meets the GHG
emission reduction requirements of the CAA, we cannot say that FFAs
produced from that feedstock fit within existing pathways. Therefore,
as explained further below, the proposed definition of FFA feedstock
includes the following restriction: ``FFA feedstock must not include
any free fatty acids from the refining of crude palm oil.''
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    \165\ 84 FR 36801-36803 (July 29, 2019).
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    The existing pathways using waste FOG feedstocks were approved
based on our lifecycle GHG analysis of yellow grease (also known as
used cooking oil or ``UCO'') for the RFS2 rule, which found, for
example, that biodiesel produced from UCO results in a greater than 80%
GHG reduction compared to baseline conventional diesel. In addition to
UCO, the waste FOG feedstock category includes inedible animal tallow,
the FOG components of food wastes and other similar materials that
``would otherwise normally be discarded or used for another secondary
purpose because they are no longer suitable for their original intended
use.'' \166\ EPA has not determined whether FFA from the refining of
crude palm oil (hereafter referred to as palm fatty-acid distillate or
``PFAD'') is consistent with and covered by our existing analyses and
pathways. In particular, we have not investigated potential existing
markets for PFAD and the potential market effects associated with using
it as a biofuel feedstock. Although PFAD is a secondary product from
crude palm oil refining, we believe that additional analysis is needed
to determine whether fuel produced from PFAD would qualify for the
applicable GHG reduction thresholds. Our lifecycle analysis of palm oil
biodiesel, which has not been finalized through rulemaking, estimated
that palm oil-based biodiesel and renewable diesel do not satisfy the
20% GHG reduction for renewable fuel.\167\ Those estimates underscore
the need to further evaluate the GHG emissions associated with using
PFAD as a biofuel feedstock. For these reasons, we are specifying at
this time that FFA feedstock does not include FFA from the refining of
crude palm oil.
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    \166\ 75 FR 14794 (March 26, 2010).
    \167\ 77 FR 4300 (January 27, 2012).
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    Our proposed approach to defining biointermediates is not intended
to affect pre-processing steps for feedstocks in Table 1 that are
limited to form changes. We recognize that it has been common practice
for some feedstocks listed in Table 1 to 40 CFR 80.1426 or in an
approved pathway pursuant to 40 CFR 80.1416 to be physically pre-
processed at separate facilities before they are delivered to a
renewable fuel production facility and used to produce renewable fuel.
We do not intend to disrupt this practice. However, in order to assure
that EPA can verify that renewable fuel was made with qualifying
renewable biomass, through production processes corresponding with
approved pathways, we need to impose limits on the type of pre-
processing of qualifying feedstocks that will be allowed without
complying with the biointermediate requirements. We intend to balance
these interests by allowing the pre-processing of feedstocks listed in
approved pathways at facilities other than the renewable fuel
production facility, but only if the pre-processing results only in a
form change such as chopping, crushing, grinding, pelletizing,
filtering, compacting/compression, centrifuging, degumming, dewatering/
drying, melting, or the addition of water to produce a slurry.
    To implement this approach, we are proposing to prohibit any person
from producing a renewable fuel at more than one facility unless the
person uses a biointermediate as defined in 40 CFR 80.1401 or uses
feedstocks identified in Table 1 to 40 CFR 80.1426 or in an approved
pathway pursuant to 40 CFR 80.1416, which were pre-processed at a
different facility, and the pre-processing results only in a form
change such as chopping, crushing, grinding, pelletizing, filtering,
compacting, compression, centrifuging, degumming, dewatering/drying,
melting, or the addition of water to produce a slurry. We seek comment
on whether we should expand or narrow the types of pre-processing that
should be allowed for feedstocks that are not biointermediates at
facilities other than the renewable fuel production facilities. Our
intent with this proposed addition is to make clear the specific
situations where feedstocks will be allowed to be processed at multiple
facilities without being subject to the proposed biointermediates
provisions. We believe this change would address comments received in
the proposed REGS rule that we were overly inclusive of feedstocks
already in use in current pathways.
    We recognize that the proposed definition of biointermediates does
not reflect the full range of potential biointermediates identified to
the Agency over the years. As such, we seek comment on whether we
should include other potential biointermediates in the proposed
definition for the final rulemaking. We will consider adding these
additional biointermediates in the definition in the final rulemaking
if the potential biointermediate could appropriately be produced,
transferred, and used to make renewable fuel within the proposed
provisions for biointermediates in this action. Specifically, we intend
to base our consideration of including a potential biointermediate on
whether there are adequate controls to limit opportunities to generate
fraudulent RINs, whether feedstocks used to produce the biointermediate
qualify as renewable biomass, and whether there are any unique
considerations for the potential biointermediate that would require
further regulatory requirements to ensure that generated RINs are
valid. Commenters suggesting that we include a potential
biointermediate in the final rulemaking should specifically address

these issues in their comments. Furthermore, commenters should provide
information describing the type of potential biointermediate, the
potential volume of renewable fuel(s) that could be produced from it,
and the timeline for its development and ultimate production. Based on
consideration of information submitted from commenters on potential
biointermediates, we would only intend to finalize those potential
biointermediates for which we believe that proposed compliance and
oversight provisions can be effectively overseen, have a low likelihood
of being susceptible to generation of fraudulent RINs, can be verified
as being renewable biomass, and would not require further regulatory
provisions.
    To aid commenters as to some of the potential biointermediates we
will consider including in the final rulemaking, we are providing a
memorandum to the docket that lists potential biointermediates that
have come to our attention over the past 5 years.\168\ The list of
potential biointermediates described in the memorandum to the docket is
not intended to be exhaustive, and we will consider potential
biointermediates not included in the memorandum in the final rule.
---------------------------------------------------------------------------

    \168\ See memorandum to the docket entitled, ``Potential
Biointermediates,'' available in the docket for this action.
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3. Limits on Biointermediate Transfers
    We are proposing that renewable fuel production facilities would be
able to receive biointermediates from multiple biointermediate
production facilities. However, unlike under the proposed REGS rule
provisions, under this new proposal biointermediate production
facilities would not be able to send biointermediates to multiple
renewable fuel production facilities.\169\ We believe this limitation
will significantly simplify and improve oversight of RIN generation for
renewable fuels produced from biointermediates without unreasonably
limiting the production and use of biointermediates. Since the proposed
REGS rule, we have become increasingly concerned that, were we to allow
biointermediate production facilities to transfer product to multiple
renewable fuel production facilities and renewable fuel production
facilities to also receive product from multiple biointermediate
producers, some parties could take advantage of the increased
complexity in tracking relationships and batches to use non-qualifying
feedstocks to make renewable fuel or generate fraudulent RINs through
double-counting. We believe that without this restriction on
biointermediates transfers the use of non-qualifying feedstocks would
be more likely to occur and more difficult to detect. In order to
effectively audit whether the correct type(s) and volumes of
biointermediates were used, all facilities that produced and used
biointermediates would need to be audited, which could be a large
number of facilities if there were no limits on biointermediate
transfers. Such oversight would be unrealistic for EPA or independent
third parties to oversee, which would increase opportunities for the
generation of invalid or fraudulent RINs and undermine the intent of
the program. Since we expect most biointermediate situations will
involve relatively small biointermediate production facilities and
relatively large renewable fuel production facilities, we have
structured the program to provide flexibility where it is most needed
and most beneficial for enabling increased renewable fuel production.
Namely this new proposal continues to allow multiple biointermediate
producers to provide their product to a single renewable fuel
production facility to be converted into renewable fuel. We seek
comment on our proposal to limit biointermediate transfers such that
renewable fuel production facilities can receive biointermediates from
multiple biointermediate producers but each biointermediate producer
can transfer its product to only one renewable fuel producer.
---------------------------------------------------------------------------

    \169\ Informally, this type of relationship is called a ``many-
to-one'' relationship in that under this approach many
biointermediate production facilities could only transfer
biointermediates to a single renewable fuel production facility. In
contrast, the proposed REGS rule would have allowed biointermediate
production facilities to transfer a biointermediate to more than one
renewable fuel production facility and for renewable fuel production
facilities to receive biointermediates from multiple biointermediate
production facilities. Informally, this type of relationship is
called a ``many-to-many'' relationship in that biointermediate
production facilities could transfer biointermediates to many
renewable fuel production facilities, and renewable fuel production
facilities could receive biointermediates from many biointermediate
production facilities.
---------------------------------------------------------------------------

    Under this proposal, the biointermediate and renewable fuel
producer would need to designate through registration the receiving
renewable fuel production facility to which biointermediate would be
transferred. As explained in Section VII.B and docket memo, we are
proposing anew the REGS provisions that require tracking of the volumes
of biointermediate, and associated properties of the biointermediate,
through periodic reporting requirements.\170\ Recognizing that
biointermediate producers may need to periodically change the receiving
renewable fuel production facility, we are proposing that
biointermediate producers would be allowed to change their designated
renewable fuel production facility no more than one time per calendar
year unless, in its sole discretion, EPA determined that it was
appropriate to allow the biointermediate producer to change its
designated renewable fuel production facility more than once in a year.
An example of a situation where EPA would consider it appropriate is
the closure of the receiving renewable fuel production facility.
---------------------------------------------------------------------------

    \170\ These provisions are described in greater detail in the
memorandum to the docket, ``Proposed Biointermediate Provisions in
the proposed Renewables Enhancement Growth Support Rule,'' available
in the docket for this action.
---------------------------------------------------------------------------

    We do not believe this restriction would impose much practical
burden on transfers of biointermediate producers. We note that under
the proposed biointermediates program, the newly designated receiving
renewable fuel production facility would need to be registered to use
the biointermediate, which would in turn require an engineering review
by a professional engineer. This process can take several months to
arrange for a PE to conduct the engineering review, submit the
registration update to EPA, and have it ultimately accepted by EPA.
Also, as discussed in Section VII.C.4, under this proposal both the
biointermediate and renewable fuel producers would need their
respective facilities audited under the QAP program, which would also
increase the amount of time needed to change the designated receiving
renewable fuel production facility. Consequently, because of the time
to conduct new engineering reviews and have new quality assurance plans
approved by EPA, we believe that biointermediate producers would be
practically limited to only being able to change their receiving
renewable fuel production facility once per calendar year. Despite
these practical limitations, we seek comment on whether and in which
narrow circumstances we should allow biointermediate producers to
change their designated receiving renewable fuel production facility
more than once a calendar year.
    We believe that the proposed biointermediate transfer provisions
will enable both the production and use of biointermediates and enhance
our ability to provide compliance and enforcement oversight. In most
cases, we believe that a single renewable fuel production facility
would receive all

biointermediate produced from a biointermediate production facility.
This approach is primarily based on discussions with parties interested
in the production and use of biointermediates, and on our understanding
of how we believe that biointermediate transfers would be contracted by
biointermediate and renewable fuel productions and how renewable fuel
production facilities would be designed to accommodate the use of
biointermediates.
    We seek comment on the proposed provisions for biointermediate
transfers. We specifically seek comment on specific examples of where
the proposed provisions may encourage or restrict the use of
biointermediates to generate renewable fuel volumes and the likely
volumes that may be affected, as well as on any examples of how the
proposed provisions may or may not provide for sufficient oversight or
RIN fraud prevention. We also ask that commenters describe any
additional or alternative provisions that might allow the use of
biointermediates from multiple facilities to be used to produce fuel at
multiple renewable fuel producers while still allowing effective
oversight.
4. Mandatory QAP
    We are proposing anew the revisions to the RFS QAP to cover
biointermediate production and use.\171\ The RFS QAP provides for
auditing of renewable fuel production facilities by independent third-
party auditors who review feedstock elements, process elements, and RIN
generation elements to determine if renewable fuel production is
consistent with EPA requirements. These independent third-party
auditors verify the RINs generated from these renewable fuel production
facilities. Under this proposal, independent third-party auditors would
review feedstock and process elements for biointermediate production
facilities like those currently reviewed for renewable fuel production
facilities. In turn, these independent third-party auditors would
verify that the biointermediate was properly produced.
---------------------------------------------------------------------------

    \171\ As explained in Section VII.B, we are reproposing the
biointermediates provisions of the REGS rule. We discuss the
proposed QAP requirements in more detail in the memorandum to the
docket, ``Proposed Biointermediate Provisions in the proposed
Renewables Enhancement Growth Support Rule,'' available in the
docket for this action.
---------------------------------------------------------------------------

    We are also proposing to require QAP participation for
biointermediate producers and renewable fuel producers that use
biointermediates. Due to the need to balance the competing priorities
of allowing the timely use of biointermediates for the production of
renewable fuel in the near term and establishing a program that EPA can
effectively oversee for the long term, we are proposing that
biointermediate producers and renewable fuel producers that use
biointermediates must participate in the RFS QAP. Mandating QAP
participation for biointermediate producers and renewable fuel
producers that use biointermediates will help ensure that RINs
generated from biointermediates are valid.
    Under the REGS proposal, we had proposed that participation in the
QAP could have become voluntary after the end of the proposed interim
period.\172\ However, since the time of the proposed REGS rule, we have
developed a better understanding of the potential complexity of
overseeing the transfers of biointermediates and renewable fuels under
the RFS program. Based on this understanding, we believe that allowing
the production and use of biointermediates to go unverified would
provide increased opportunity for the use of unapproved feedstocks and
the generation of fraudulent RINs through double-counting. We believe
having an independent third-party auditor verify the production of both
the biointermediate and the renewable fuel is necessary to help oversee
the added complexity that results from having renewable fuel processing
occur at two different facilities. Further, we are proposing that the
biointermediate producer and renewable fuel producer must use the same
QAP vendor to ensure consistent oversight of the two facilities.
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    \172\ In the proposed REGS rule, the interim period was a period
of approximately 12 months where a more limited set of regulatory
provisions would have applied to parties that produced, transferred,
and used biointermediates. This action does not include a proposed
interim period.
---------------------------------------------------------------------------

    We do not believe that mandatory QAP participation would be overly
burdensome. Many of the parties that have encouraged EPA to adopt
biointermediate regulations have indicated they intend to participate
in the QAP program. We also expect that obligated parties that obtain
and use RINs generated for renewable fuels made from biointermediates
for compliance would request that biointermediate and renewable fuel
producers participate in the QAP as obligated parties would continue to
be liable for the replacement of any invalid RINs generated on such
renewable fuels.
    We seek comment on making QAP participation mandatory for both the
biointermediate producer and the renewable fuel producer where
renewable fuel is produced from biointermediates.
5. Product Transfer Documents (PTD)
    Consistent with the REGS proposal, we are proposing anew PTD
requirements for the transfers of biointermediates from biointermediate
producers to renewable fuel producers.\173\ These PTD requirements
include information about the biointermediates type, volume, renewable
content, cellulosic content (if applicable), and the transfer of
records needed for the renewable fuel producer to demonstrate that the
biointermediate was produced using qualifying renewable biomass and
that other aspects needed to ensure that the RFS regulations were met.
---------------------------------------------------------------------------

    \173\ As explained in Section VII.B, we are reproposing the
biointermediates provisions of the REGS rule. We discuss the
proposed PTD requirements in more detail in the memorandum to the
docket, ``Proposed Biointermediate Provisions in the proposed
Renewables Enhancement Growth Support Rule,'' available in the
docket for this action.
---------------------------------------------------------------------------

    In addition to reproposing the PTD requirements for transfers of
biointermediates, we are also proposing for the first time PTD
requirements for RINs generated from renewable fuel produced from
biointermediates. In the REGS proposal, we did not propose any changes
to the PTD requirements for RINs generated from renewable fuels
produced from biointermediates. Since the REGS proposal, due to the way
that RINs are transacted in EMTS,\174\ we have realized that parties
that transfer and use RINs generated from renewable fuels made from
biointermediates may not be aware that the RINs came from
biointermediates. Such parties may wish to have identified such RINs
because 40 CFR 80.1460 prohibits any party from transferring invalid
RINs. These parties may wish to have information related to whether the
RIN was produced from a renewable fuel made from a biointermediate
prior to transacting the RINs. Therefore, we are also proposing
additional elements for PTDs related to RINs under 40 CFR 80.1453(a).
Under this proposal, RINs PTDs would need to identify that the RINs
were generated from renewable fuels produced from biointermediates as
well as the EPA-issued company and

facility numbers of the biointermediate producer. We believe that by
requiring such information on the RIN PTDs, parties that transfer or
use such RINs would better understand whether they were transferring
and using RINs generated from renewable fuels produced from
biointermediates. This would allow parties that transact RINs generated
from renewable fuels made with biointermediates to make decisions on
whether to transact the RIN. We seek comment on both the proposed PTD
requirements for transfers of biointermediates and on the newly
proposed RIN PTD requirements.
---------------------------------------------------------------------------

    \174\ In EMTS, parties can specify to transact RINs from
specific renewable fuel producers by facility and D-code. Current
EMTS functionality would not allow parties to transact RINs based on
a whether the RINs were generated from renewable fuel made from a
specific feedstock (or biointermediate if the proposed
biointermediate provisions are finalized). Furthermore, EMTS would
not indicate to parties transacting the RINs in any way whether such
RINs came from a renewable fuel made from a biointermediate.
---------------------------------------------------------------------------

6. Registration, EMTS and Reporting Requirements
    As in the REGS proposal, we are proposing here the registration,
reporting, and EMTS requirements for biointermediates that are needed
in order to implement the program.\175\ Some of these proposed elements
have already been discussed in conjunction with the proposed
biointermediates provisions addressed in this section. Others are
additional elements reflecting our current implementation of related
provisions under the RFS program that have changed since we proposed
the REGS rule. Registration elements include proposed requirements for
renewable fuel producers that intend to produce or utilize
biointermediates as part of their production process to register these
processes and related information similar to other feedstock
registration requirements. Biointermediate producers must also register
production capacities, information on the feedstocks intended for
processing, co-products produced and, similar to renewable fuel
producers, complete an initial engineering review followed by an update
every three years. For EMTS, the renewable fuel producer utilizing
biointermediates in the production of renewable fuel would report the
type and quantity of biointermediates used for the batch and the EPA
facility registration number for each production facility. Renewable
fuel producers utilizing biointermediates would report total co-
products and the process(es), feedstock(s), and biointermediate(s) used
and proportion of renewable volume attributable to each process and
feedstock. Biointermediate producers or importers would report for each
batch the volume, identifying information for the entity receiving
title to the batch and other characteristics of the batch and
associated production processes and characteristics of the batch.
---------------------------------------------------------------------------

    \175\ We discuss the proposed registration, EMTS, and reporting
requirements for biointermediates in more detail in the memorandum
to the docket, ``Proposed Biointermediate Provisions in the proposed
Renewables Enhancement Growth Support Rule,'' available in the
docket for this action.
---------------------------------------------------------------------------

    We seek comment on the proposed registration, reporting, and EMTS
requirements for biointermediates. We are also seeking comment on
potential improvements regarding the functionality of EMTS or other
information systems related to the production, transfer, and use of
biointermediates. While not part of the proposed regulations
themselves, we believe it is important to identify areas where
functional improvement is desired by the users of our information
systems. Such feedback as part of this proposal would help us identify
areas for improvement and prioritize development. For example, as
discussed in Section VII.C.5, we believe parties that transfer and use
RINs generated from renewable fuel produced from biointermediates may
want the ability to tie the RINs back to specific biointermediates or
biointermediate producers. We believe some parties may want to track
whether RINs were generated from a specific biointermediate producer in
EMTS. However, such a change would involve significant modification to
EMTS, and therefore is not something that EPA would undertake unless
desired and resources permitted. However, knowing what additional
functionality is desired may allow us to include such features into our
upcoming development plans.
7. Attest Engagement and Recordkeeping Requirements
    We are proposing anew the attest engagement and recordkeeping
requirements for biointermediates discussed in the proposed REGS rule,
as well as some updating some of these requirements for
biointermediates since that proposal.\176\ Updated proposed
requirements for attest engagement audits include validating the list
of renewable fuel producers receiving any transfer of biointermediate
batches and calculating the total volume received. We believe these
updated requirements for attest engagement audit are appropriate to
help ensure that the limits on biointermediate transfers discussed in
Section VII.C.3 are followed.
---------------------------------------------------------------------------

    \176\ We discuss the proposed attest engagement and
recordkeeping requirements for biointermediates in more detail in
the memorandum to the docket, ``Proposed Biointermediate Provisions
in the proposed Renewables Enhancement Growth Support Rule,''
available in the docket for this action.
---------------------------------------------------------------------------

    We are proposing updated recordkeeping requirements to reflect the
other changes discussed in this section. These updates are needed to
help independent third parties and EPA conduct audits.
    We seek comment on the proposed attest engagement and recordkeeping
requirements for biointermediates. Specifically, we request comment on
whether the attest engagement and recordkeeping requirements are
adequate and whether any additional requirements are needed to enable
implementation of the program.
8. Invalid RINs From Biointermediates
    We are proposing anew the provisions that address the treatment of
invalid RINs generated on renewable fuels produced from
biointermediates.\177\ Due to the potential complexity involved in
determining the validity of RINs generated for renewable fuel produced
from a biointermediate, we proposed in the REGS rule and are proposing
anew that if any of the RINs in any batch of renewable fuel produced
from a biointermediate are deemed invalid, then all RINs generated for
that batch of renewable fuel would be considered invalid except to the
extent that EPA, in its sole discretion, determines that some portions
of these RINs would be valid. Since the proposed REGS rule, we have
further considered how invalid RINs generated on renewable fuels
produced from biointermediates could potentially be treated in
complicated circumstances: Where multiple biointermediate and/or non-
biointermediates are simultaneously processed to make renewable fuel
with the same D-code, where biointermediate and/or non-biointermediates
are simultaneously processed that result in multiple D-codes, and where
biointermediates are co-processed with non-renewable biomass (e.g.,
crude oil). Given the range of biointermediates that would be permitted
under this proposal and based on discussions with parties that have
expressed interest in using various types of biointermediates in the
future, we believe it is important to address this situation clearly in
the regulations as apportioning which RINs were tied to which gallons
of renewable fuel made in these situations is complicated.
---------------------------------------------------------------------------

    \177\ We discuss the proposed liability provisions for
biointermediates in more detail in the memorandum to the docket,
``Proposed Biointermediate Provisions in the proposed Renewables
Enhancement Growth Support Rule,'' available in the docket for this
action.
---------------------------------------------------------------------------

    In all cases, where a biointermediate is processed simultaneously
with other feedstocks or co-processed with non-

renewable biomass, we are proposing that all RINs generated from the
renewable fuel would be invalid. This means that even if multiple
different RIN batches would be generated in EMTS for apportioned
volumes of the batch of renewable fuel, all RIN batches in their
entirety would be invalid if any amount of non-qualifying
biointermediate was used to generate any RIN on any volume of the
renewable fuel. This would also include situations where the multiple
RIN batches were for different D-codes or where multiple different
biointermediates were used. We proposed this approach in the REGS rule,
and we are now proposing additional regulatory provisions to better
effectuate the intended outcome. We believe this provision is
appropriate to avoid having to determine specifically which RINs are
invalid in situations where biointermediates are processed
simultaneously with other feedstocks or co-processed with non-renewable
biomass, which may be difficult to ascertain. We also believe that this
proposed provision would provide a strong incentive for renewable fuel
producers to conduct due diligence oversight procedures on the
biointermediate producer to avoid the invalidation of an entire batch
of RINs.
    We are also proposing that in cases where the renewable fuel is a
renewable diesel, renewable gasoline, renewable diesel blendstock, or
renewable gasoline blendstock, if a RIN is invalid under 40 CFR
80.1431(a)(1), the gallon of gasoline or diesel fuel for which the RIN
was generated would incur an RVO. The regulations at 40 CFR
80.1407(f)(1) already exclude ``[a]ny renewable fuel as defined in
Sec.  80.1401'' from the volume of gasoline or diesel fuel produced or
imported used to calculate an obligated party's annual RVO. In many
cases, RINs are determined to be invalid because the renewable fuel was
not made from renewable biomass, the RINs were double-counted, or were
otherwise invalidly generated. In such cases, any volume of renewable
gasoline or renewable diesel fuel would no longer be considered
renewable fuel and therefore could not be excluded from an obligated
party's RVO. We believe the situation in which a volume of renewable
fuel (e.g., a renewable diesel or gasoline) that was excluded from an
obligated party's RVO but is no longer considered a renewable fuel will
become more common if we allow the use of biocrude processed through
crude refineries as a way to produce more advanced and cellulosic
biofuels. We are proposing changes to the regulations at 40 CFR
80.1407(f)(1) to reiterate the requirement that renewable fuel for
which a RIN is determined to be invalidly generated may not be excluded
from a party's RVOs.
    Finally, as a result of the proposed changes described above, we
are proposing corresponding prohibited activities to address situations
where biointermediates are produced, transferred, and used.\178\
Specifically, we are proposing the following prohibited activities:
---------------------------------------------------------------------------

    \178\ For a discussion of the proposed REGS rule liability and
prohibited act provisions that we are reproposing see 81 FR 80839
(November 16, 2016).
---------------------------------------------------------------------------

     Use of a feedstock to produce a biointermediate not
covered by an existing pathway or in the proposed definition of a
biointermediate discussed in Section VII.C.1;
     Illegal transfers of biointermediates consistent with the
newly proposed provisions described in Section VII.C.2; and
     Generation of RINs from renewable fuels produced from
biointermediates that have not been verified under the QAP as described
in Section VII.C.3.
    We believe these additional proposed prohibited activities are
needed to help us enforce violations and ensure compliance of the
proposed biointermediate provisions. We seek comments on these proposed
prohibited activities and whether any additional prohibited activities
related to the production, transfer, and use of biointermediates are
necessary to ensure the integrity of RINs generated from
biointermediates.
    We believe that these additional elements coupled with the
reproposed REGS rule provisions concerning liability and the treatment
of invalid biointermediates would provide strong incentives on the part
of renewable fuel producers to diligently be involved in overseeing the
production, transfer, and use of biointermediates. We believe these
provisions are necessary to address the increased complexity of
allowing renewable fuels to be processed at more than one production
facility. We seek comment on our proposed liability provisions for the
production, transfer, and use of biointermediates and the treatment of
invalid RINs generated from renewable fuels produced from
biointermediates.

D. Other Considerations Related to Biointermediates

1. C-14 Testing and Mass Balance for RIN Generation
    We are reproposing the requirement that C-14 testing, specifically
Method B (accelerator mass spectrometry) of ASTM International (ASTM)
D6866, be used in cases where biointermediates are co-processed with
petroleum feedstocks at a renewable fuel production facility.\179\ We
are also seeking comment on potential alternatives to direct C-14
measurement of renewable content of co-processed fuels. In the proposed
REGS rule, we proposed to require C-14 testing for co-processed fuels
because we believe that the volume of biointermediate co-processed with
petroleum at a crude refinery would likely be a small fraction of the
refinery's throughput and would make it difficult to rely on a mass
balance approach for RIN generation. Our primary concern was, and is,
that the co-processed fuel would contain little or no renewable content
from the biointermediate and that using the mass balance approach could
result in the generation of RINs for the nonrenewable portion of the
co-processed fuel. Additionally, as noted in the REGS proposal Method B
of ASTM D6866 has greater precision compared with Method C.\180\
---------------------------------------------------------------------------

    \179\ In the 2010 RFS2 final rule (see 75 FR 14876, March 26,
2010), EPA promulgated requirements for the generation of RINs for
renewable fuel co-processed with petroleum-based fuels, and provided
two methods for determining the renewable content of co-processed
fuels: (1) Mass balance; or (2) Using Methods B or C of ASTM D6866
C-14 testing. See 40 CFR 80.1426(f)(4). These provisions from the
proposed REGS rule are described in greater detail in the memorandum
to the docket, ``Proposed Biointermediate Provisions in the proposed
Renewables Enhancement Growth Support Rule,'' available in the
docket for this action.
    \180\ See Martin R. Haverly et al., Biobased Carbon Content
Quantification through AMS Radiocarbon Analysis of Liquid Fuels, 237
Fuel, 1108, (2019).
---------------------------------------------------------------------------

    In the proposed REGS rule we sought comment on whether our proposed
approach was appropriate, whether there are other methods that could
produce similarly accurate and precise renewable content measurement to
Method B of ASTM D6866 in co-processed fuels, and whether EPA should
allow parties to petition for the use of a company-specific method to
determine the renewable content of co-processed, partially renewable
fuel produced from a biointermediate. We received a number of comments
suggesting that EPA allow for the use of mass balance instead of
requiring direct testing of renewable content using C-14 analysis in
co-processed fuels. While many commenters highlighted the practical and
financial benefits of using mass balance instead of direct C-14
measurements, commenters on the REGS proposal did not substantially
address the concerns we raised regarding the accuracy and precision of
a mass balance approach especially

where the biointermediate constitutes a relatively small portion of the
co-processed feedstock. Specifically, commenters noted how difficult it
is to collect samples for direct C-14 measurement from a crude
refinery, the added expense and time to conduct the testing, and issues
related to the validity of C-14 testing when there is only a small
amount of renewable content in the co-processed fuel. We also received
comments in support of a facility specific approach, but commenters did
not provide information on how such a process would work or how such a
process could result in sufficiently accurate and precise measurements
of renewable content in co-processed fuels.
    We continue to believe that direct C-14 measurement is the most
accurate and precise way to determine the renewable content of co-
processed fuels and that it is necessary to ensure whether a co-
processed fuel actually contains renewable content. We also note that
in Section VIII.F, we are proposing to define what it means for a
renewable fuel to be ``produced from renewable biomass.'' Under this
proposed definition, only energy in the renewable content of the
finished fuel that was produced from renewable biomass would qualify as
renewable fuel for RIN generation. As discussed in Section VIII.F, this
proposed regulatory definition of ``produced from renewable biomass''
is consistent with the statutory requirements that renewable fuels be
transportation fuel, heating oil, or jet fuel. Our proposal for direct
measurement of renewable content in co-processed fuels is consistent
with and necessary to effectuate this proposed definition of ``produced
from renewable biomass.'' That is, because we do not believe a mass
balance approach is capable of accurately determining the renewable
content of fuels produced through co-processing of biointermediates,
allowing renewable fuel production facilities to rely on this approach
for RIN generation would be inconsistent with the definition of
``produced from renewable biomass.''
    We seek comment on whether we should provide alternatives to
requiring direct C-14 measurement of renewable content in co-processed
fuels where biointermediates are used. While we are proposing to remove
the allowance for use of mass balance for renewable fuel production
facilities that co-process biointermediates with petroleum feedstocks,
we also seek comment on whether and under what conditions it might be
appropriate to allow for the use of mass balance when there is a
sufficient amount of co-processed biointermediate to ensure that mass
balance calculations actually represent renewable content in the co-
processed fuel. For example, we could allow the use of mass balance if
the biointermediate represented at least 10 percent of the total
feedstock processed to produce the batch. If a sufficient amount of a
biointermediate was used to make the co-processed fuel, we might have
assurance that some of the biointermediate was converted into renewable
fuel.
    We also seek comment on whether we could allow the parties that co-
process renewable fuels to develop a facility specific statistical
model for use in estimating low levels of renewable content in co-
processed fuel. Through such a process, renewable fuel producers could
conduct a rigorous test program on a range of biointermediate levels
processed through a specific facility to develop a statistical model to
estimate renewable content of co-processed fuels at that specific
facility for RIN generation. Similar to a mass balance approach, we
acknowledge that a poorly-designed statistical model may inaccurately
estimate the amount of renewable content in a co-processed fuel or
indicate that renewable content was present in a co-processed fuel when
there was none, especially at low levels.
    Finally, we seek comment on whether there are any circumstances
where we could rely upon results from Method C of ASTM D6866 (``Method
C'') to measure renewable content of co-processed fuels made from
biointermediates. As mentioned above, we continue to have concerns with
Method C when measuring relatively small amounts of renewable content
in co-processed fuels due to Method C's lower precision. However, we
would consider the use of Method C if its accuracy and precision were
improved and codified in an updated ASTM method or if Method C was
restricted to measuring higher levels of renewable content (e.g., above
10 percent) where we could be assured that measurement represented
valid renewable content in co-processed fuels.
    When commenting on the proposed requirement for direct C-14
testing, we specifically ask that commenters provide any relevant
information or data on any demonstrating that an alternative is as
accurate or precise in measuring the renewable content of co-processed
fuels as the proposed C-14 method.
2. Standalone Esterification Pathway
    In the proposed 2020 RVO rule, we proposed to add a standalone
esterification pathway to rows F and H of Table 1 of 40 CFR
80.1426.\181\ This would have allowed parties who have processing units
that can take feedstocks listed in rows F and H of Table 1 of 40 CFR
80.1426 that have high-FFA content to separate the FFAs and
triglycerides for chemical processing in separate standalone
esterification and transesterification units, and generate RINs for the
biodiesel produced.\182\ We also noted in the proposed 2020 RVO rule
that while this proposal would allow the separation of FFAs and
triglycerides in qualified high-FFA feedstocks at the facility
producing the biodiesel through these processes, regulatory amendments
were needed to address situations where this separation took place at a
facility other than the ultimate renewable fuel production
facility.\183\ We stated that the biointermediates provisions of the
REGS rule would need to be finalized for parties to use FFAs separated
from triglycerides in a feedstock at a location other than the
biodiesel production facility.\184\
---------------------------------------------------------------------------

    \181\ See 84 FR 36801-36802 (July 29, 2019).
    \182\ See 84 FR 36801-36803 (July 29, 2019).
    \183\ See 84 FR 36802 (July 29, 2019).
    \184\ Id.
---------------------------------------------------------------------------

    In the final 2020 RVO rule, we did not finalize the standalone
esterification pathway, but noted that we may finalize the standalone
esterification pathway in a future action.\185\ We are proposing to
include FFA feedstocks as one of the biointermediates specifically
included in the proposed definition of biointermediate. We note that we
would also need to finalize the previously proposed standalone
esterification pathway for parties to process FFA feedstocks to
biodiesel through direct esterification, which is one of the primary
methods for producing renewable fuel from FFA feedstocks. If the
proposed biointermediates provisions in this action are finalized and
FFA feedstocks are included in the definition of biointermediates, we
intend to also finalize the previously proposed standalone
esterification pathway. In this case, we would respond to the public
comments received previously on the proposed standalone esterification
pathway in the 2020 RVO rule proposal and any additional public
comments related to the standalone esterification pathway received on
this proposal in such a final action. Unlike the biointermediates
provisions from the REGS rule that are being re-proposed in this
action, we are not re-proposing the standalone esterification pathway
here and commenters do not have to resubmit

previously submitted comments to this docket in order for them to be
considered.
---------------------------------------------------------------------------

    \185\ See 85 FR 7058 (February 6, 2019).
---------------------------------------------------------------------------

3. Intracompany Transfers of Biointermediates
    We are seeking comment on whether we should provide flexibility for
intracompany transfers of biointermediates (i.e., cases where the same
company owns both the biointermediate production facility and the
renewable fuel production facility). In the proposed REGS rule, we did
not propose any flexibilities for companies that transferred
biointermediates between their biointermediate production facility and
renewable fuel production facility. Under the proposed REGS rule, such
companies would have to comply with all of the requirements regardless
of whether they owned both the biointermediate production facility and
the renewable fuel production facility.
    During the public comment period for the REGS proposal, we received
comments suggesting that we should not impose the new requirements for
biointermediates when the party produces both the biointermediate and
the renewable fuel. These commenters argued that they would be able to
effectively track the production and use of biointermediates so
additional compliance and enforcement provisions would not be needed.
However, we believe that all parties should have consistent
requirements on biointermediates. We believe that there could still be
concerns with intracompany transfers of biointermediates as this lack
of transparency could incent the generation of fraudulent RINs. In
fact, we believe that the issues could be worse because if we exempted
intracompany transfers from the proposed biointermediates provisions,
there would be no required records, reports, or oversight on whether
that company appropriately produced, transferred, or used the
biointermediate. This would allow ample opportunities for parties to
use non-qualifying feedstocks or generate fraudulent RINs and provide
EPA no oversight mechanisms. The main purpose of the proposed
biointermediate provisions is to ensure that EPA and third parties such
as QAP and attest auditors have records and reports to verify the
production, transfer, and use of biointermediates. These provisions
help ensure that RINs generated from renewable fuels produced from
biointermediates are valid.
    We continue to believe that the proposed regulatory requirements
are needed in this case, and, as such, we are not proposing to provide
any flexibilities for intracompany transfers of biointermediates at
this time. Nevertheless, we seek comment on whether such flexibilities
are appropriate. Commenters should articulate in their public comments
specifically what provisions they believe EPA could provide flexibility
and how effective oversight of the program would be maintained.

VIII. Amendments to Fuel Quality and RFS Regulations

    This section describes the regulatory changes we are proposing for
fuel quality and RFS regulations.

A. BBD Conversion Factor for Percentage Standard

    In the 2010 RFS2 rule, we determined that because the BBD standard
was a ``diesel'' standard, its volume must be met on a biodiesel-
equivalent energy basis.\186\ In contrast, the other three standards
(cellulosic biofuel, advanced biofuel, and total renewable fuel) must
be met on an ethanol-equivalent energy basis. At that time, biodiesel
was the only advanced renewable fuel that could be blended into diesel
fuel, qualified as an advanced biofuel, and was available at greater
than de minimis quantities.
---------------------------------------------------------------------------

    \186\ See 75 FR 14670, 14682 (March 26, 2010).
---------------------------------------------------------------------------

    The formula for calculating the applicable percentage standards for
BBD needed to accommodate the fact that the volume requirement for BBD
would be based on biodiesel equivalence while the other three volume
requirements would be based on ethanol equivalence. Given the nested
nature of the standards, however, RINs representing BBD would also need
to be valid for complying with the advanced biofuel and total renewable
fuel standards. To this end, we designed the formula for calculating
the percentage standard for BBD to include a factor that would convert
biodiesel volumes into their ethanol equivalent. This factor was the
same as the Equivalence Value for biodiesel, 1.5, as discussed in the
2007 RFS1 final rule.\187\ The resulting formula \188\ (incorporating
the recent modification to the definitions of GEi and
DEi) \189\ is shown below:
---------------------------------------------------------------------------

    \187\ See 72 FR 23900, 23921 at Table III.B.4-1 (May 1, 2007).
    \188\ See 40 CFR 80.1405(c).
    \189\ See 85 FR 7016 (February 6, 2020).
    [GRAPHIC] [TIFF OMITTED] TP21DE21.015

---------------------------------------------------------------------------
    Where:

    StdBBD,i = The biomass-based diesel standard for year
i, in percent.
    RFVBBD,i = Annual volume of biomass-based diesel
required by 42 U.S.C. 7545(o)(2)(B) for year i, in gallons.
    Gi = Amount of gasoline projected to be used in the
48 contiguous states and Hawaii, in year i, in gallons.
    Di = Amount of diesel projected to be used in the 48
contiguous states and Hawaii, in year i, in gallons.
    RGi = Amount of renewable fuel blended into gasoline
that is projected to be consumed in the 48 contiguous states and
Hawaii, in year i, in gallons.
    RDi = Amount of renewable fuel blended into diesel
that is projected to be consumed in the 48 contiguous states and
Hawaii, in year i, in gallons.
    GSi = Amount of gasoline projected to be used in
Alaska or a U.S. territory, in year i, if the state or territory has
opted-in or opts-in, in gallons.
    RGSi = Amount of renewable fuel blended into gasoline that is
projected to be consumed in Alaska or a U.S. territory, in year i,
if the state or territory opts-in, in gallons.
    DSi = Amount of diesel projected to be used in Alaska
or a U.S. territory, in year i, if the state or territory has opted-
in or opts-in, in gallons.
    RDSi = Amount of renewable fuel blended into diesel
that is projected to be consumed in Alaska or a U.S. territory, in
year i, if the state or territory opts-in, in gallons.
    GEi = The total amount of gasoline projected to be
exempt in year i, in gallons, per Sec. Sec.  80.1441 and 80.1442.
    DEi = The total amount of diesel projected to be
exempt in year i, in gallons, per Sec. Sec.  80.1441 and 80.1442.

    In the years following 2010 when the percent standard formula
for BBD was first promulgated, advanced renewable diesel production
has grown. Most renewable diesel has an Equivalence Value of 1.7,
and its growing presence in the BBD pool means that

the average Equivalence Value of BBD has also grown.\190\
---------------------------------------------------------------------------

    \190\ Under 40 CFR 80.1415(b)(4), renewable diesel with a lower
heating value of at least 123,500 Btu/gallon is assigned an
Equivalence Value of 1.7. A minority of renewable diesel has a lower
heating value below 123,500 BTU/gallon and is therefore assigned an
Equivalence Value of 1.5 or 1.6 based on applications submitted
under 40 CFR 80.1415(c)(2).
[GRAPHIC] [TIFF OMITTED] TP21DE21.016

    Because the formula currently specified in the regulations for
calculation of the BBD percentage standard assumes that all BBD used to
satisfy the BBD standard is biodiesel, it biases the resulting
percentage standard low, given that in reality there is some renewable
diesel in BBD. The bias is small, on the order of 2 percent, and has
not impacted the supply of BBD since it is the higher advanced biofuel
standard rather than the BBD standard that has driven the demand for
BBD. Nevertheless, we believe that it would be appropriate to modify
the factor used in the formula to more accurately reflect the amount of
renewable diesel in the BBD pool. The average Equivalence Value of BBD
appears to have grown over time without stabilizing. Given the growth
in facilities producing renewable diesel as discussed in Chapter 5.2 of
the DRIA, it is possible that the average Equivalence Value for BBD
could continue to grow after 2020. As a result, we believe that the
average Equivalence Value for BBD is likely to be at least 1.55. We
therefore propose and seek comment on replacing the factor of 1.5 in
the percentage standard formula for BBD with a factor of 1.55.\191\ We
are not proposing to change any other aspect of the percentage standard
formula for BBD.
---------------------------------------------------------------------------

    \191\ While we are proposing to only revise the factor of 1.5 in
the percentage standard formula for BBD, we are including all four
of the percentage standard formulas in our proposed amendatory text
for 40 CFR 80.1405(c). This is due to the manner in which the
original formulas were published in the CFR, which does not allow
for revisions to a single formula without republishing all of the
formulas. We are not reexamining any aspect of these formulas beyond
the change to the factor of 1.5 in the BBD formula, and any comments
on other aspects of the formulas are beyond the scope of this
rulemaking.
---------------------------------------------------------------------------

    The proposed change would have a small impact on the calculation of
the applicable percentage standard for BBD. For instance, for the 2021
BBD volume of 2.43 billion gallons finalized in the 2020 final rule,
the applicable percentage standard would be 2.20 percent using the
factor of 1.55, as compared to 2.13 percent using the factor of 1.5.
However, this proposed change would have no impact on the generation of
RINs. All biodiesel has generated and would continue to generate 1.5
RINs per gallon, and most renewable diesel has generated and would
continue to generate 1.7 RINs per gallon. Similarly, compliance with
the applicable percentage standards would not change, in that all D4
RINs would continue to count toward meeting the RVO for BBD.
    Finally, the volume requirement for BBD (RFVBBD,i in the
formula above) would be unaffected by the change to the formula for
calculating the percentage standard.

B. Changes To Registration for Baseline Volume

    We are proposing to revise the registration requirements at 40 CFR
80.1450(b)(1)(v) as well as the definition of ``baseline volume'' at 40
CFR 80.1401 to allow non-exempt (i.e., non-grandfathered) renewable
fuel producers to use either nameplate capacity or actual peak capacity
for their facility's baseline volume if permitted capacity cannot be
determined. We are not proposing to change the requirements for
establishing the baseline volume of grandfathered facilities.\192\
\193\ All non-grandfathered facilities with an applicable permitted
capacity would continue to be required to register using the permitted
capacity pursuant to 40 CFR 80.1450(b)(1)(v)(A). Under the existing
requirement, these facilities

must use their actual peak capacity \194\ as their baseline volume if
the air permits do not specify the maximum rated annual output of
renewable fuel and can only use nameplate capacity \195\ to establish
baseline volume if insufficient production records existed to establish
actual peak capacity. The proposed regulatory revision would give non-
grandfathered facilities that do not have an applicable permitted
capacity the flexibility to establish baseline volume using either
actual peak capacity or nameplate capacity.
---------------------------------------------------------------------------

    \192\ For purposes of this preamble, a ``grandfathered
facility'' is a renewable fuel production facility that has volumes
that are exempt from the renewable fuel lifecycle GHG reduction
threshold under 40 CFR 80.1403(c). This provision exempts (i.e.,
``grandfathers'') facilities that commenced construction on or
before December 19, 2007, did not discontinue construction for a
period of 18 months after commencement of construction, and
completed construction by December 19, 2010.
    \193\ For grandfathered facilities, baseline volume is the
maximum volume of grandfathered fuel for which the facility is
allowed to generate RINs. For non-grandfathered facilities, baseline
volume is intended to indicate the maximum amount of renewable fuel
that the facility is capable of producing. Actual peak capacity,
however, may not be a good indicator of maximum capacity.
    \194\ Actual peak capacity is based on either the five years
prior to registration or, if there was no production prior to
registration, the first three years after start-up.
    \195\ Nameplate capacity is the peak designed capacity of the
facility.
---------------------------------------------------------------------------

    We are proposing this revision in order to allow for more up-to-
date information to be used in establishing the baseline volumes of
non-grandfathered facilities. Actual peak capacity is based on actual
production tied to when EISA was enacted (i.e., December 2007), which
is now more than a decade in the past. This historical peak capacity is
not necessarily an accurate reflection of the facility's current
production capacity. Since the passage of EISA, facilities may have
improved efficiency, expanded the facility, or experienced an increase
in production due to increased demand, resulting in larger production
than the year used to calculate actual peak capacity. Having accurate
capacity information for registered renewable fuel facilities is
important for EPA in helping to identify whether facilities are
generating an appropriate number of RINs.\196\ This proposed change
would allow a non-exempt facility to choose whether to use actual peak
capacity or nameplate capacity if permitted capacity cannot be
determined. Non-exempt facilities already registered using actual peak
capacity would have the option to switch to nameplate capacity at any
time.\197\ This change would have no impact on facilities who choose
not to use this option. We seek comment on this proposed change.
---------------------------------------------------------------------------

    \196\ Because the baseline volume of an exempt (i.e.,
grandfathered) facility is by definition tied to either December 19,
2007, or December 31, 2009 (see 40 CFR 80.1403(c) and (d) and
80.1450(b)(1)(v)(B)), current production capacity is not relevant
for such a facility.
    \197\ Facilities could also choose to keep their baseline volume
as actual peak capacity.
---------------------------------------------------------------------------

C. Changes To Attest Engagements for Parties Owning RINs (``RIN Owner
Only'')

    We are proposing to exempt parties that transact a relatively small
number of RINs from the annual attest engagement requirements. In order
to qualify for the proposed exemption, parties would need to be
registered as a ``RIN Owner Only'' and not registered or engaged in any
other role (e.g., obligated party, exporter of renewable fuel,
renewable fuel producer, renewable fuel importer, etc.). Such parties
are currently required to submit an annual attest engagement under 40
CFR 80.1464(c), regardless of the number of RINs they transact or hold
in a compliance year. Under the existing regulations, for example, a
party whose only activity was to buy and sell a single RIN in any given
compliance year would be required to complete an attest engagement for
that year. Additionally, some parties that own a small number of RINs
have difficulty selling such small denominations of RINs (e.g.,
hundreds of separated D6 RINs) and can hold such RINs until they
expire. These parties must then arrange for an annual attest engagement
performed by a certified professional accountant (CPA) for those RINs,
which can be quite costly especially when compared to the relatively
low value of the small number of RINs owned.
    We believe that parties who, in a given compliance year, are
registered as a ``RIN Owner Only,'' who transact 10,000 or fewer RINs,
and who do not exceed a RIN holding threshold under 40 CFR 80.1435,
should not be required to complete an attest engagement for that
compliance year. A party who is registered as a ``RIN Owner Only'' does
not generate RINs and does not have an RVO. We believe that the
information contained in EMTS and RIN activity reports for a RIN Owner
Only who transacts a relatively small number of RINs and who does not
exceed a RIN holding threshold conveys the necessary compliance
information, and that the attest engagements for these parties do not
add much value relative to their expense. Many of the affected parties
are smaller businesses that are required to arrange the services of a
CPA to perform their annual attest engagement. Making this change to
the attest engagement requirements may result in a cost savings to
these typically smaller businesses, without adversely affecting RFS
program oversight.
    We intend that the total number of RINs transacted in the year be
counted toward the 10,000 RIN limit. RINs ``transacted'' includes RINs
retired for reasons other than compliance retirements, such as the
reason code ``voluntary RIN retirement.'' This means that if a party
buys 5,000 RINs and sells 6,000 RINs in a year, the party will have
transacted 11,000 RINs and would be required to complete the attest
engagement for that year. We are proposing the 10,000 RIN limit based
upon programmatic experience--specifically, we believe it reflects a
reasonable level of activity below which the utility of the attest
engagement is reduced. We seek comment on establishing this proposed
attest engagement exemption for parties that transact fewer than 10,000
RINs in a compliance year and what the appropriate level of RIN
transactions for this exemption should be.

D. Public Access to Information

    Exemption 4 of the Freedom of Information Act (FOIA) exempts from
disclosure ``trade secrets and commercial or financial information
obtained from a person [that is] privileged or confidential.'' \198\ In
order for information to meet the requirements of Exemption 4, EPA must
find that the information is either: (1) A trade secret, or (2)
commercial or financial information that is: (a) Obtained from a
person, and (b) privileged or confidential. Information meeting these
criteria is commonly referred to as ``confidential business
information'' or ``CBI.'' \199\
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    \198\ 5 U.S.C. 552(b)(4).
    \199\ We note that CAA section 114(c) explicitly excludes
emissions data from treatment as confidential information.
---------------------------------------------------------------------------

    In June 2019, the U.S. Supreme Court issued its decision in Food
Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019)
(Argus Leader). Argus Leader addressed the meaning of ``confidential''
within the context of FOIA Exemption 4. The Court held that ``[a]t
least where commercial or financial information is both customarily and
actually treated as private by its owner and provided to the government
under an assurance of privacy, the information is `confidential' within
the meaning of Exemption 4.'' \200\ The Court identified two conditions
``that might be required for information communicated to another to be
considered confidential.'' \201\ Under the first condition,
``information communicated to another remains confidential whenever it
is customarily kept private, or at least closely held, by the person
imparting it.'' \202\ The second condition provides that ``information
might be considered confidential only if the party receiving it
provides some assurance that it will remain secret.'' \203\ The Court
found the first condition necessary for information to be considered
confidential within the

meaning of Exemption 4, but did not address whether the second
condition must also be met.
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    \200\ Argus Leader, 139 S. Ct. at 2366.
    \201\ Id. at 2363.
    \202\ Id. (internal citations omitted).
    \203\ Id. (internal citations omitted).
---------------------------------------------------------------------------

    Following the issuance of the Court's opinion, the U.S. Department
of Justice (DOJ) issued guidance concerning the confidentiality prong
of Exemption 4, articulating ``the newly defined contours of Exemption
4'' post-Argus Leader.\204\ Where the Government provides an express or
implied indication to the submitter prior to or at the time the
information is submitted to the Government that the Government would
publicly disclose the information, then the submitter generally cannot
reasonably expect confidentiality of the information upon submission,
and the information is not entitled to confidential treatment under
Exemption 4.\205\
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    \204\ ``Exemption 4 After the Supreme Court's Ruling in Food
Marketing Institute v. Argus Leader Media and Accompanying Step-by-
Step Guide,'' Office of Information Policy, U.S. DOJ, (October 4,
2019), available at https://www.justice.gov/oip/exemption-4-after-supreme-courts-ruling-food-marketing-institute-v-argus-leader-media.
    \205\ See id.; see also ``Step-by-Step Guide for Determining if
Commercial or Financial Information Obtained from a Person is
Confidential under Exemption 4 of the FOIA,'' Office of Information
Policy, U.S. DOJ, (updated October 7, 2019), available at https://www.justice.gov/oip/step-step-guide-determining-if-commercial-or-financial-information-obtained-person-confidential.
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1. Treatment of Information Contained in Enforcement Actions and
Invalid RIN Determinations
    EPA has a longstanding practice of posting on its website or
otherwise publicly releasing information describing fuels violations
and invalid RIN determinations.\206\ Accordingly, we are proposing
regulations to codify the types of information contained in fuels-
related enforcement actions and invalid RIN determinations that are not
entitled to confidential treatment pursuant to Exemption 4 of FOIA.
This proposal covers notices of violation, settlement agreements,
administrative complaints, civil complaints, criminal information, and
criminal indictments related to EPA's fuel quality and RFS regulations
in 40 CFR parts 80 and 1090 and invalid RIN determinations related to
EPA's RFS regulations in 40 CFR part 80.
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    \206\ See, e.g., ``Clean Air Act Fuels Settlement Information,''
U.S. EPA, available at https://www.epa.gov/enforcement/clean-air-act-fuels-settlement-information; ``Civil Enforcement of the
Renewable Fuel Standard Program,'' U.S. EPA, available at https://www.epa.gov/enforcement/civil-enforcement-renewable-fuel-standard-program.
---------------------------------------------------------------------------

    Since at least 2013,\207\ EPA has posted on its website or
otherwise publicly released information relating to violations of the
fuel quality and RFS regulations. This information includes the company
name and identification number, the total quantity of fuel and
parameter, information relating to the generation, transfer, or use of
credits or RINs, and the total quantity of RINs in question. Therefore,
EPA has already provided an implied indication to any submitters of
such information after at least 2013 that EPA may publicly disclose
such information. Accordingly, the information is not entitled to
confidential treatment, and EPA intends to continue to release such
information without further notice.
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    \207\ EPA began posting RFS enforcement-related determinations
and actions in 2013. See ``Civil Enforcement of the Renewable Fuel
Standard Program,'' U.S. EPA, available at https://www.epa.gov/enforcement/civil-enforcement-renewable-fuel-standard-program. EPA
has been posting gasoline and diesel enforcement actions for much
longer. See ``Clean Air Act Fuels Settlement Information,'' U.S.
EPA, available at https://www.epa.gov/enforcement/clean-air-act-fuels-settlement-information.
---------------------------------------------------------------------------

    Through this proposal, we are also providing an express indication
that such information is not entitled to confidential treatment and
will be affirmatively disclosed to the public without providing further
notice or process to the affected businesses. Once finalized, this rule
will effectively serve as an advance confidentiality determination
through rulemaking and will cover the information identified below.
Except as otherwise provided, 40 CFR 2.201 through 2.215 and 2.301 do
not apply to the specified information submitted under this part and 40
CFR part 1090 that is determined through this rulemaking to not qualify
for confidential treatment. In particular, this proposal will impact
certain information contained in EPA determinations that RINs are
invalid under 40 CFR 80.1474(b)(4)(i)(C)(2) and (b)(4)(ii)(C)(2),
notices of violation, settlement agreements, administrative complaints,
civil complaints, criminal information, and criminal indictments. The
information that EPA intends to continue release in the context of
these determinations and actions includes the company name and company
identification number, the facility name and facility identification
number, the total quantity of fuel and parameter, information relating
to the generation, transfer, or use of credits or RINs, the total
quantity of RINs in question, the batch number(s) and the D codes of
the RINs in question, the time period when the RINs in question were
generated or when the violation occurred, and any other information
relevant to describing the violation at issue. We are proposing to
codify this determination at 40 CFR 80.11 and 80.1402(b) as well as 40
CFR 1090.15.
    Publicly disclosing this information is important in providing
transparency to stakeholders and the public with respect to violations
of EPA's fuel quality and RFS programs and the relief EPA is seeking to
remedy those violations through its enforcement actions. Public
disclosure is also important to the successful operation and integrity
of the RFS program as it may prevent parties from unwittingly
transferring or attempting to use invalid RINs for compliance, in
contravention of the RFS regulations, or from buying invalid RINs that
they will be unable to use for compliance. We seek comment on whether
any additional EPA enforcement-related determinations and actions, or
additional factual information relating to such determinations and
actions described above should be identified as not entitled to
confidential treatment. Therefore, although the public release of such
information since at least 2013 constitutes an implied indication that
such information is not entitled to confidential treatment, EPA is also
providing an express indication that such information is not entitled
to confidential treatment through this proposal.
2. Treatment of Information Contained in Requests Submitted Under the
RFS Program
    We are proposing regulations that would help facilitate our
processing of claims that RFS-related information should be withheld
from public disclosure under FOIA, 5 U.S.C. 552(b)(4), as CBI. If
finalized, the proposed regulations would identify certain types of RFS
information collected by EPA under 40 CFR part 80, subpart M, that EPA
would consider as not entitled to confidential treatment pursuant to
Exemption 4 of the FOIA and that EPA will release without further
notice.
    We are proposing regulations that would facilitate our processing
of claims that requests for information submitted under 40 CFR part 80,
subpart M, should be withheld from the public under Exemption (b)(4) of
the FOIA, 5 U.S.C. 552(b)(4), as CBI. If finalized, this rule would
provide an express indication that we would not consider certain basic
information incorporated into EPA actions on petitions and submissions,
as well as that same information as it appears in the submissions to
EPA under 40 CFR part 80, subpart M, to be entitled to treatment as CBI
under Exemption 4 of the FOIA. In particular, this proposal would apply
to all submissions to EPA under 40 CFR part 80, subpart M,

including, but not limited to: SREs submitted under 40 CFR 80.1441,
small refiner exemptions under 40 CFR 80.1442, pathway petitions under
40 CFR 80.1416, and compliance demonstration reports. Accordingly, if
finalized, such information will be released without further notice to
the submitter and without following EPA's procedures set forth in 40
CFR part 2, subpart B. We are proposing to codify this determination at
40 CFR 80.1402(c) and (d).
    Through this proposal, we are providing an express indication that,
after finalization of this rule, such information is not entitled to
confidential treatment and will be affirmatively disclosed to the
public without providing further notice to affected businesses. Once
finalized, this rule will effectively serve as an advance
confidentiality determination through rulemaking covering the
information identified below. Except as otherwise provided, 40 CFR
2.201 through 2.215 and 2.301 do not apply to the specified information
submitted under this part that is determined through this rulemaking
not to qualify for confidential treatment. In particular, the
information affected by this proposal is the submitter's name, the name
and location of the facility, the date the submission was transmitted
to EPA, any EPA-issued company or facility identification numbers
associated with the submission, the general nature or purpose of the
submission, and the relevant time period for the request. Additionally,
for submissions making requests that EPA must adjudicate, under this
proposal, once we have adjudicated the request, we will release the
following information: The submitter's name; the name and location of
the facility; the date the request was transmitted to EPA; any EPA-
issued company or facility identification numbers associated with the
request, the general nature or purpose of the request, the relevant
time period for the request, the extent to which EPA either granted or
denied the request, and any relevant terms and conditions. For
information submitted under 40 CFR part 80, subpart M, and not
specified in the proposed regulations at 40 CFR 80.1402, EPA would
continue to evaluate such CBI claims in accordance with 40 CFR part 2,
subpart B.
    It is appropriate to release the information described above in the
interest of transparency and to provide the public with information
about entities seeking exemptions or requests under part 80, subpart M.
If finalized, this proposed approach would also provide certainty to
submitters regarding the release of information under 40 CFR part 80,
subpart M. With this advance notice, each submitter would have
certainty regarding how EPA would treat the information specified
above, and, as applicable, have the discretion to decide whether to
make such a request with the understanding that EPA may release certain
information about the request without further notice.
    We seek comment on our proposal to release the aforementioned basic
information about submissions and EPA's adjudication of those
submissions under the RFS program.

E. Clarifying the Definition of ``Agricultural Digester''

    Row Q in Table 1 to 40 CFR 80.1426 makes renewable compressed
natural gas, renewable liquefied natural gas, and renewable electricity
eligible to generate cellulosic biofuel (D-code 3) RINs if the fuel is
produced from, among other feedstocks, biogas from agricultural
digesters and if the producer meets all of the other regulatory
requirements under the RFS program. An agricultural digester is
currently defined at 40 CFR 80.1401 as ``an anaerobic digester that
processes predominantly cellulosic materials, including animal manure,
crop residues, and/or separated yard waste.'' In the preamble to the
Pathways II final rule, we explained that predominantly cellulosic
materials are materials that are at least 75 percent cellulose, hemi-
cellulose or lignin by mass.\208\ We received multiple questions from
stakeholders asking if they could generate D3 RINs for biogas produced
in a digester if materials that are not predominantly cellulosic are
used in the digester. We are proposing revisions to the definition of
agricultural digester to clarify that each and every material processed
must be predominantly cellulosic in order for the digester to qualify
as an agricultural digester under the RFS regulations. This revision
does not change the existing requirements but will make it easier for
the regulated community to understand the limitations on generating D3
RINs for biogas produced in anerobic digesters.
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    \208\ The Pathways II final rule contained a list of feedstocks
EPA determined are ``predominately cellulosic feedstocks'': ``Crop
residue, slash, pre-commercial thinnings and tree residue,
switchgrass, miscanthus, Arundo donax, Pennisetum purpureum, and
biogas from landfills, municipal wastewater treatment facility
digesters, agricultural digesters, and separated MSW digesters'' (79
FR 42130-31, July 18, 2014). EPA further determined that feedstocks
with minimum average adjusted cellulosic content of 75 percent,
measured on a dry mass basis, were ``predominantly cellulosic,''
meaning fuel produced from these feedstocks would be eligible to
generate 100 percent cellulosic RINs.
---------------------------------------------------------------------------

    The existing definition of agricultural digester states that the
digester must processes ``predominantly cellulosic materials,''
including animal manure, crop residues, and/or separated yard waste.
The preamble to the Pathways II rule makes it clear that the term
``predominantly cellulosic'' means that eligible feedstocks must
contain a cellulosic content of at least 75%, and that this term does
not authorize renewable fuel producers to introduce non-cellulosic
materials into an agricultural digester. Allowing other materials into
the digester or any materials that are not at least 75 percent
cellulosic would be inconsistent with the analysis underlying the rule
and the definition of agricultural digester. The Pathways II rule
identified agricultural digesters as a type of digester that will
process wastes that are predominantly cellulosic. For the Pathways II
rule we defined agricultural digesters narrowly based on the feedstocks
we understood to be the most common inputs and assessed in that
rulemaking, all of which we determined to be predominantly cellulosic.
Thus, the ability to generate cellulosic RINs for 100 percent of the
fuel produced under the pathway in row Q is predicated on the
assumption and associated requirement that all the inputs to an
agricultural digester are predominantly cellulosic. However, EPA does
allow renewable fuel to be produced by ``other waste digesters'' and in
some cases this fuel may qualify as cellulosic or partly cellulosic. A
digester processing at least one type of material that is not at least
75 percent cellulosic content cannot be an agricultural digester and is
instead an ``other waste digester'' under row T of Table 1 to 40 CFR
80.1426. If cellulosic material is used in an ``other waste digester,''
the renewable compressed natural gas would either be eligible for 100
percent D5 RINs or may be eligible to generate D3 RINs for the portion
of the fuel that was demonstrated to be produced from cellulosic
biomass through proper testing and D5 RINs for the rest of the fuel
produced as specified at 40 CFR 80.1426(f)(15)(i)(B).
    In order to clarify the materials that may be processed in an
agricultural digester, we are proposing to revise the definition of
agricultural digester to specify that such digesters may process
``only'' predominantly cellulosic materials and that ``each and every
material processed in an agricultural digester must be predominantly
cellulosic.'' These revisions are consistent with the current
regulations, and the analyses undertaken for the

Pathway II rule that formed the basis for the agricultural digester
pathways. They are a clarification of the regulatory text, but not a
change in our interpretation of our existing regulations or practice in
implementing them. The revisions are meant to clarify that a digester
that processes multiple feedstocks, including a material that is less
than 75 percent cellulosic content is not an agricultural digester,
even if the total cellulosic content of all the processed materials
taken together exceeds the 75 percent threshold.

F. Definition of ``Produced From Renewable Biomass''

    CAA section 211(o)(1)(J) defines renewable fuel as ``fuel that is
produced from renewable biomass and that is used to replace or reduce
the quantity of fossil fuel present in a transportation fuel.'' In
order to satisfy the definition of renewable fuel under the RFS
regulations, the fuel must: (1) Be ``produced from renewable biomass'';
(2) be ``used to replace or reduce the quantity of fossil fuel present
in a transportation fuel, heating oil, or jet fuel''; and (3) have
``lifecycle [GHG] emissions that are at least 20 percent less than
baseline lifecycle [GHG] emissions'' (unless exempted under 40 CFR
80.1403). We are proposing to define in 40 CFR 80.1401 that ``produced
from renewable biomass'' means the energy in the finished fuel comes
from renewable biomass. This definition would align the regulatory
definition with our existing interpretation of the statute and
regulations. We believe this definition is needed because we have
received multiple questions from stakeholders on this aspect of the
renewable fuel definition.
    The statutory requirement that renewable fuel be produced from
renewable biomass is fairly straightforward for the vast majority of
renewable fuel produced under the RFS program. For example, corn starch
ethanol is clearly produced from renewable biomass \209\ because
essentially all of the mass, volume, and energy contained in the
undenatured fuel ethanol comes from fermented corn starch. However, the
application of this requirement is less clear for some fuels that are
produced by co-processing multiple feedstocks. For example, some
relatively new process technologies seek to produce transportation fuel
by bonding carbon atoms obtained from biogenic carbon dioxide with
hydrogen atoms obtained from fossil fuels. In this case, some of the
mass and volume in the finished fuel may come from renewable
biomass,\210\ but, since carbon dioxide is not an energy carrier, all
of the energy in the finished fuel would come from the fossil-based
hydrogen. In these cases, we look at the existing RFS regulations to
determine whether or how much of this fuel qualifies as renewable fuel.
---------------------------------------------------------------------------

    \209\ Provided the corn starch qualifies as renewable biomass
(e.g., it must come from qualifying land).
    \210\ Provided the biogenic carbon dioxide was produced from
renewable biomass (e.g., carbon dioxide from fermented corn starch).
---------------------------------------------------------------------------

    The RFS regulations at 40 CFR 80.1426(f)(4) determine the number of
gallon-RINs generated for fuel that is produced by co-processing
renewable biomass and non-renewable feedstocks simultaneously to
produce a fuel. The formula in the regulations states that the share of
the fuel that is renewable is calculated as the feedstock energy from
renewable biomass divided by the total feedstock energy. In the example
given above, the carbon dioxide provides zero feedstock energy, so the
regulations stipulate that zero RINs would be generated for the fuel.
In other words, no portion of the fuel would qualify as renewable fuel.
We believe this outcome is appropriate given that the fundamental
purpose of transportation fuel is to provide energy, thus the source of
the energy in the finished fuel should be the criterion for determining
from what the fuel was produced, as opposed to the source of the mass
or volume of the fuel. It is also consistent with statutory definition
that renewable fuel must ``be used to replace or reduce the quantity of
fossil fuel present in a transportation fuel.'' Fuel that derives its
energy from fossil fuel (a subset of non-renewable feedstocks) is
replacing one form of fossil fuel for another, not reducing the
quantity of fossil fuel present in a transportation fuel.
    As stated above, we have received multiple questions related to
fuels that derive their energy from non-renewable feedstocks, and
whether such fuels qualify as renewable fuel under the RFS program. We
believe that adding this definition would reduce future confusion on
this issue. In particular, we want to avoid a situation where resources
may be allocated to researching or developing a new fuel technology
with the hopes of generating RINs only to later find out that the fuel
does not qualify because its energy does not come from renewable
biomass. Thus, we propose to add a definition of ``produced from
renewable biomass'' at 40 CFR 80.1401 that defines it as the energy in
the finished fuel comes from renewable biomass. As explained above,
this proposed definition is consistent with our existing interpretation
of the statute and implementing regulations. We seek comment on this
proposed regulatory definition.

G. Estimating Landfill Emissions for Lifecycle GHG Analysis of Fuels
Produced From Separated Municipal Solid Waste

    EPA has previously approved fuel pathways that use the biogenic
components of separated municipal solid waste (MSW), as defined at 40
CFR 80.1426(f)(5)(i)(C), as satisfying the 60 percent lifecycle GHG
reduction for qualification as cellulosic biofuel under the RFS program
(see Table 1 to 40 CFR 80.1426). Through the petition process at 40 CFR
80.1416 and engagement with stakeholders, we are aware of growing
interest in the use of biogenic components of separated MSW to produce
diesel, gasoline, and jet fuel. The existing separated MSW pathways
were based on engineering assessments and other projections about the
processes, process efficiencies and types of process energy that would
be used to convert separated MSW to fuels. In some cases, there are
separated MSW-to-fuel projects under consideration that likely do not
fit the assumptions underlying our previous assessments. For example,
our previous assessments \211\ were based on engineering and cost
projections that separated MSW would be used as both the feedstock and
the predominant source of fuel to heat the conversion process.\212\
However, some of the projects being developed intend to use natural gas
for process heat fuel instead of the separated MSW itself. In such
cases, the fuels produced would be unlikely to meet the 60 percent GHG
reduction threshold using our existing assessment methodology. However,
stakeholders have suggested that our past assessment methodology does
not fully capture the full lifecycle GHG impacts of using the biogenic
components of separated MSW as biofuel feedstock because it does not
account for the future reductions in methane emissions from the
landfills and improved recycling that may occur by diverting separated
MSW from the landfill. Inclusion of change in landfill emissions could
allow fuels produced from separated MSW to satisfy the 60 percent GHG
reduction threshold even if the process heat comes from fossil

sources. We have not estimated the GHG emissions effects of using the
biogenic components of separated MSW as feedstock instead of its
current fate (e.g., landfill, landfill with flaring, landfill with
power generation, composting, waste to energy). Thus, we are seeking
comment on the appropriateness of doing so and on the appropriate
methodologies, models, and data to estimate the potential effects of
diverting separated MSW from landfills. Seeking comment on this topic
is particularly relevant in this rulemaking because some of the
projects under consideration intend to use separated MSW to produce a
biocrude, which we are proposing to consider a biointermediate (see
Section VII).
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    \211\ 78 FR 14190 (March 5, 2013).
    \212\ Kinchin, Christopher. Catalytic Fast Pyrolysis with
Upgrading to Gasoline and Diesel Blendstocks. National Renewable
Energy Laboratory (NREL). 2011. Docket Item No. EPA-HQ-OAR-2011-
0542-0007.
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    The concept of avoided landfill emissions is that diverting
separated MSW from a landfill would reduce the subsequent GHG emissions
associated with landfilling that material. When landfilled, biogenic
materials decompose under anaerobic conditions and produce landfill gas
composed of methane, carbon dioxide, and other gases. Landfills in the
United States typically capture the landfill gas and flare it or use it
to produce electricity or CNG or for other purposes. However, a share
of the landfill gas evades capture or is not fully combusted by the
flares and is emitted from the landfill. Since landfill gas generation
is a function of the amount and biogenic content of MSW landfilled,
diverting separated MSW from a landfill can reduce the overall amount
of landfill GHG emissions. On the other hand, some of the biogenic MSW
decomposes slowly and remains in the landfill when the landfill cell is
capped, resulting in long-term carbon storage at the landfill.
Combusting carbon that would otherwise be stored, in the form of
transportation fuel, increases GHG emissions. The net result of all of
these processes in a landfill requires modelling to estimate the effect
of diverting the separated MSW on landfill emissions.
    In addition to avoided methane emissions, there may be emissions
reductions from enhanced recycling associated with the use of MSW as a
biofuel feedstock. Using MSW as a biofuel feedstock may entail
additional separation and recycling than would otherwise occur,
enhancing the effectiveness of recycling efforts for metals, plastics,
and potentially other materials. The reduced GHG emissions associated
with recycling these additional materials as opposed to producing new
metals, plastics and other materials could then provide additional GHG
reduction that could be estimated and allocated to the finished fuel
for purposes of lifecycle GHG analysis.
    A number of models and data sources are available to estimate
landfill emissions--we briefly describe a few here but this is not
intended as a comprehensive list. The GREET-2020 fuel cycle model
includes data and formulas to estimate the lifecycle GHG emissions
associated with ethanol and CNG produced from MSW feedstock, and these
data and formulas could be adapted for analysis of other MSW to fuel
pathways.\213\ The EPA Waste Reduction Model (WARM) is a tool to help
solid waste planners estimate GHG emissions reductions, energy savings,
and economic impacts from several different waste management
practices.\214\ WARM estimates avoided landfill emissions based on user
inputs on MSW composition and landfill characteristics. WARM does not
model pathways for manufacturing fuel from MSW. Municipal solid waste
landfills report annually under EPA's GHG reporting program based on
protocols and formulas specified at 40 CFR part 98, subpart HH. Subpart
HH includes formulas to estimate landfill emissions each year but does
not address carbon storage at landfills or metal and plastic recycling.
In 2019, the International Civil Aviation Organization (ICAO) published
a methodology for calculating landfill emissions for aviation fuels
produced from MSW.\215\ These models and methodologies have many
similarities but they differ in their intended purposes and the default
assumptions they recommend for certain key inputs, such as the decay
rates for certain types of biogenic MSW components and the oxidation
rates for uncaptured landfill methane. Based on our review of these
models, formulas and estimates we observe that the landfill emissions
estimates are sensitive to inputs for key assumptions.
---------------------------------------------------------------------------

    \213\ The Greenhouse gases, Regulated Emissions, and Energy use
in Technologies (GREET) Model is developed and maintained by Argonne
National Laboratory. https://greet.es.anl.gov.
    \214\ EPA. (2019). Waste Reduction Model (WARM) Tool User's
Guide. May 2019. EPA530-R-19-002. https://www.epa.gov/sites/production/files/2020-12/documents/warm-users-guide_v15_10-29-2020.pdf.
    \215\ ICAO. (2019). Carbon Offsetting and Reduction Scheme for
International Aviation (CORSIA) Methodology for Calculating Actual
Life Cycle Emissions Values. November 2019. 19 pages. https://www.icao.int/environmental-protection/CORSIA/Documents/ICAO%20document%2007%20-%20Methodology%20for%20Actual%20Life%20Cycle%20Emissions.pdf.
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    We seek comment on the appropriateness of accounting for changes in
landfill emissions and, if appropriate, on the best available models,
data, and methodologies to estimate changes in landfill emissions
associated with the use of biogenic components of separated MSW as a
feedstock for the production of biofuel for purposes of lifecycle GHG
analysis for the RFS program. Specifically, we seek comment on the
extent to which we should account for net emissions associated with
changes in landfill methane emissions, landfill carbon storage, metal
and plastic recycling, or other activities. In our previous assessments
of landfill biogas, we used landfill gas flaring as the alternative
baseline scenario (Pathways II rule, 79 FR 42141-2); in this
rulemaking, we seek comment on whether there are any new data that
would support using a different baseline for evaluation of using
biogenic components of separate MSW as feedstock for biofuel
production. Given the fact that landfill emissions can occur for
decades after material is disposed, we also seek comment on the most
appropriate methodology for addressing the temporal aspects of landfill
emissions. In other parts of EPA's lifecycle analysis, we consider
emissions over a 30-year period. We seek comment on whether a 30-year
period is also appropriate for the purposes of quantifying changes in
landfill emissions.
    The composition of separated MSW used as biofuel feedstock has a
significant impact on the potential emissions from the landfill. We
seek comment on whether and how EPA should track and verify the
feedstock composition if accounting for net avoided landfill emissions
under the RFS program as well as changes in stored carbon. In addition,
landfill emissions can differ significantly from one landfill to
another based on differences in climate, management practices and other
characteristics; however, evaluating individual landfills requires
additional collection, tracking, and verification of data. We seek
comment on whether to consider landfill emissions from individual
landfills or take a more aggregated approach whereby landfills are
evaluated nationally, regionally or based on a limited set of other
characteristics (e.g., temperature, moisture, gas collection
technology). We intend to consider the comments received on this topic
as we evaluate new fuel pathway petitions, submitted pursuant to 40 CFR
80.1416, that include the use of separated MSW feedstock.

H. Technical Corrections and Clarifications

    We are proposing to make numerous technical corrections to the RFS

regulations. These amendments are being made to correct minor
inaccuracies and updates in the current regulations. These changes are
described in Table VIII.H-1 below.

 Table VIII.H-1--Miscellaneous Technical Corrections and Clarifications
                           to RFS Regulations
------------------------------------------------------------------------
 Part and section of title 40           Description of revision
------------------------------------------------------------------------
80.1401......................  Amended by revising the definition of
                                ``Renewable fuel'' to reiterate that
                                undenatured ethanol is not renewable
                                fuel.
80.1401, 80.1426(f)(5)(i)-     Amended by moving the definitions of
 (iii), (f)(5)(iv)(A) and       ``Separated yard waste,'' ``Separated
 (B), and (f)(5)(v),            food waste,'' and ``Separated municipal
 80.1450(b)(1)(vii)(A) and      solid waste'' from Sec.   80.1426(f)(5)
 (B) and (b)(1)(viii),          to the RFS definitions section (Sec.
 80.1451(b)(1)(ii)(R), and      80.1401) and updating associated cross-
 80.1454(j).                    references.
80.1401, 80.1426(f)(17)(i),    Amended by updating the incorporation by
 80.1450(b)(1)(xii),            reference (IBR) for ``Standard
 80.1451(b)(1)(ii)(T),          Specification for Diesel Fuel,'' ASTM
 80.1454(l), and 80.1468(b).    D975-13a, to now be ASTM D975-21, which
                                is the most recent ASTM version.
80.1401 and 80.1468(b).......  Amended by updating the IBR for
                                ``Standard Specification for Biodiesel
                                Fuel Blend Stock (B100) for Middle
                                Distillate Fuels,'' ASTM D6751-09, to
                                now be ASTM D6751-20a, which is the most
                                recent ASTM version.
80.1426(f)(7)(v)(A) and        Amended by updating the IBR for
 80.1468(b).                    ``Standard Test Methods for Analysis of
                                Wood Fuels,'' ASTM E870-82(2006), to now
                                be ASTM E870-82(2019), which is the most
                                recent ASTM version.
80.1426(f)(7)(v)(B) and        Amended by updating the IBR for
 80.1468(b).                    ``Standard Test Methods for Direct
                                Moisture Content Measurement of Wood and
                                Wood-Based Materials,'' ASTM D4442-07,
                                to now be ASTM D4442-20, which is the
                                most recent ASTM version.
80.1426(f)(7)(v)(B) and        Amended by updating the IBR for
 80.1468(b).                    ``Standard Test Method for Laboratory
                                Standardization and Calibration of Hand-
                                Held Moisture Meters,'' ASTM D4444-08,
                                to now be ASTM D4444-13 (2018), which is
                                the most recent ASTM version.
80.1426(f)(8)(ii)(B) and       Amended by updating the IBR for
 80.1468(b).                    ``Standard Guide for the Use of the
                                Joint American Petroleum Institute (API)
                                and ASTM Adjunct for Temperature and
                                Pressure Volume Correction Factors for
                                Generalized Crude Oils, Refined
                                Products, and Lubricating Oils: API
                                Manual of Petroleum Measurement
                                Standards (MPMS) Chapter 11.1,'' ASTM
                                D1250-08, to now be ASTM D1250-19e1,
                                which is the most recent ASTM version.
80.1426(f)(9)(ii),             Amended by updating the IBR for
 80.1430(e)(2), and             ``Standard Test Methods for Determining
 80.1468(b).                    the Biobased Content of Solid, Liquid,
                                and Gaseous Samples Using Radiocarbon
                                Analysis,'' ASTM D6866-08, to now be
                                ASTM D6866-21, which is the most recent
                                ASTM version.
80.1426(f)(17)(i)............  Amended by adding ``renewable gasoline,''
                                consistent with other related sections.
80.1426(f)(17)(i)(B)(1) and    Amended by replacing ``diesel'' with
 (2), 80.1450(b)(1)(xii)(B)     ``distillate'' to clarify that parties
 and (C),                       that blend renewable jet fuel with
 80.1451(b)(1)(ii)(T)(1), and   conventional jet fuel must currently
 80.1454(1)(1).                 comply with these requirements. This
                                would remove perceived ambiguity over
                                whether these provisions apply to
                                producers of blended renewable jet fuel
                                (jet fuel is not diesel fuel per the
                                definition of ``diesel fuel'' at 40 CFR
                                80.2 but rather distillate fuel).
80.1428(b)(2)................  Amended to be consistent with the
                                restriction that independent third-party
                                auditors may not own RINs under Sec.
                                80.1471(a)(3).
80.1429(b)(9)................  Amended to limit the number of RINs that
                                a party can separate when they incur an
                                RVO due to redesignating certified-NTDF
                                under Sec.   80.1408. This is consistent
                                with similar situations involving
                                exporters of renewable fuel or importers
                                of gasoline and diesel fuel.
80.1450(g)(11)(ii),            Amended by updating the email address for
 80.1473(f), 80.1474(b)(2),     EPA's EMTS help desk to
 (b)(3), (b)(4)(i)(C), and      [email protected].
 (b)(4)(ii)(C).
80.1450(h)(2)(i).............  Amended by changing the time for
                                responding to EPA's notice of intent to
                                deactivate a company's registration from
                                14 to 30 calendar days to allow
                                additional time for company action.
80.1451(b)(1)(ii)(T)(2) and    Amended to clarify reporting instructions
 80.1454(l)(3).                 and move the affidavit requirement from
                                the reporting section (Sec.   80.1451)
                                to the recordkeeping section (Sec.
                                80.1454).
80.1460(b)(6)................  Amended to clarify that generating a RIN
                                for fuel for which RINs have previously
                                been generated is not a prohibited act
                                if those RINs were generated pursuant to
                                Sec.   80.1426(c)(6).
80.1464(a)(3)(ii),             Amended to modify the attest engagements
 (b)(3)(ii), and (c)(2)(ii).    requirements to be consistent with the
                                RIN activity report requirements in Sec.
                                  80.1451(c)(2).
80.1464(a)(4)(ii),             Amended by updating outdated references
 (b)(5)(ii), and (c)(3)(ii)     to expired provisions of part 80 to part
 and 80.1475(a)(2) and (d)(4).  1090.
80.1464(a)(7), (b)(8),         Amended to add the requirement that the
 (c)(7), (i)(1)(i), and         attest auditor verifies the submission
 (i)(2)(i).                     of required compliance reports and
                                states as a finding any compliance
                                reports missing.
80.1464(b)(4)(i) and (iii)...  Amended to modify the requirements to
                                include verification of last date of
                                independent third-party engineering
                                review as occurring within the three-
                                year cycle under Sec.   80.1450(d)(3).
80.1469(c)(1)(vii)...........  Amended to modify the requirements for
                                Quality Assurance Plans to allow for a
                                renewable fuel for which RINs were
                                previously generated to be used as a
                                feedstock if done in accordance with
                                Sec.   80.1426(c)(6).
80.1471(c)...................  Amended to correct an erroneous reference
                                to 31 CFR 50.5(q) to now be 31 CFR
                                50.4(t), and to allow comparable
                                financial strength ratings if acceptable
                                to EPA.
80.1475(d)(1) and (3)........  Amended by correcting erroneous
                                references to paragraph (b) to now be to
                                paragraph (c).
------------------------------------------------------------------------

IX. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive orders
can be found at http://www.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    This action is an economically significant regulatory action that
was submitted to the Office of Management and Budget (OMB) for review.
Any changes made in response to OMB recommendations have been
documented in the docket. EPA prepared an analysis of potential costs
and benefits associated with this action. This analysis is presented in
the DRIA, available in the docket for this action.

B. Paperwork Reduction Act (PRA)

    The information collection activities in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the PRA. The Information Collection Request (ICR) document
that EPA prepared has been assigned EPA ICR number 2691.01. You can
find a copy of the ICR in the docket for this rule, and it is briefly
summarized here.
    The information to be collected is necessary to implement the
proposed inclusion of biointermediates to the RFS program. As part of
this proposal, biointermediate producers and importers would be added
as respondents and certain existing respondents (e.g., renewable fuel
producers) may have additional reporting and recordkeeping requirements
related to their use of biointermediates. Recordkeeping and reporting
requirements include the registration of biointermediate producers and
their facilities; product transfer documentation; records retention
related to the production, transfer, and use of biointermediates;
annual attest engagements; quality assurance plans for
biointermediates; and the submission of information related to
renewable fuels produced using biointermediates. These items are
discussed in detail in the supporting statement in the docket.
    Respondents/affected entities: Biointermediate producers, renewable
fuel producers, biointermediate importers, and third parties who submit
reports for these parties.
    Respondent's obligation to respond: Mandatory, under 40 CFR parts
80 and 1090.
    Estimated number of respondents: 1,670.
    Frequency of response: On occasion, daily, quarterly, or annually.
    Total estimated burden: 47,988 hours (per year). Burden is defined
at 5 CFR 1320.3(b).
    Total estimated cost: $2,828,180 (per year), all of which is
purchased services, and which includes $0 annualized capital or
operation & maintenance costs.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9.
    Submit your comments on the Agency's need for this information, the
accuracy of the provided burden estimates and any suggested methods for
minimizing respondent burden to EPA using the docket identified at the
beginning of this rule. You may also send your ICR-related comments to
OMB's Office of Information and Regulatory Affairs via email to
[email protected], Attention: Desk Officer for EPA. Since OMB
is required to make a decision concerning the ICR between 30 and 60
days after receipt, OMB must receive comments no later than January 20,
2022. EPA will respond to any ICR-related comments in the final rule.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the impact of concern is any significant
adverse economic impact on small entities. An agency may certify that a
rule will not have a significant economic impact on a substantial
number of small entities if the rule relieves regulatory burden, has no
net burden, or otherwise has a positive economic effect on the small
entities subject to the rule.
    With respect to the proposed biointermediates provisions, we do not
believe that a small biointermediate producer or renewable fuel
producer would choose to take advantage of the proposed program for
biointermediates unless there was sufficient economic incentive for
them to do so. Current small renewable fuel producers would not be
compelled to use biointermediates, and as such, any costs associated
with these provisions are purely voluntary. With respect to the other
proposed amendments to the RFS regulations, this action makes
relatively minor corrections and modifications to those regulations. As
such, we do not anticipate that there will be any significant adverse
economic impact on directly regulated small entities as a result of
these provisions.
    The small entities directly regulated by the annual percentage
standards associated with the RFS volumes are small refiners, which are
defined at 13 CFR 121.201. With respect to the 2020, 2021, and 2022
percentage standards and 2022 supplemental standard, we have evaluated
the impacts on small entities from two perspectives: As if the
standards were a standalone action or if they are a part of the overall
impacts of the RFS program as a whole.
    To evaluate the impacts of the volume requirements on small
entities, we have conducted a screening analysis \216\ to assess
whether we should make a finding that this action will not have a
significant economic impact on a substantial number of small entities.
Currently available information shows that the impact on small entities
from implementation of this rule will not be significant. We have
reviewed and assessed the available information, which shows that
obligated parties, including small entities, are generally able to
recover the cost of acquiring the RINs necessary for compliance with
the RFS standards through higher sales prices of the petroleum products
they sell than would be expected in the absence of the RFS
program.\217\ This is true whether they acquire RINs by purchasing
renewable fuels with attached RINs or purchase separated RINs. The
costs of the RFS program are thus generally being passed on to
consumers in the highly competitive marketplace. Even if we were to
assume that the cost of acquiring RINs was not recovered by obligated
parties, a cost-to-sales ratio test shows that the costs to small
entities of the proposed RFS standards are far less than 1 percent of
the value of their sales.
---------------------------------------------------------------------------

    \216\ See Chapter 11 of the DRIA.
    \217\ For a further discussion of the ability of obligated
parties to recover the cost of RINs see ``Denial of Petitions for
Rulemaking to Change the RFS Point of Obligation,'' EPA-420-R-17-
008, November 2017.
---------------------------------------------------------------------------

    While the screening analysis described above supports a
certification that this rule will not have a significant economic
impact on small refiners, we continue to believe that it is more
appropriate to consider the standards as a part of our ongoing
implementation of the overall RFS program. When considered this way,
the impacts of the RFS program as a whole on small entities were
addressed in the RFS2 final rule, which was the rule that implemented
the entire program as required by EISA 2007.\218\ As such, the

Small Business Regulatory Enforcement Fairness Act (SBREFA) panel
process that took place prior to the 2010 rule was also for the entire
RFS program and looked at impacts on small refiners through 2022.
---------------------------------------------------------------------------

    \218\ 75 FR 14670 (March 26, 2010).
---------------------------------------------------------------------------

    For the SBREFA process for the RFS2 final rule, we conducted
outreach, fact-finding, and analysis of the potential impacts of the
program on small refiners, which are all described in the Final
Regulatory Flexibility Analysis, located in the rulemaking docket (EPA-
HQ-OAR-2005-0161). This analysis looked at impacts to all refiners,
including small refiners, through the year 2022 and found that the
program would not have a significant economic impact on a substantial
number of small entities, and that this impact was expected to decrease
over time, even as the standards increased. For gasoline and/or diesel
small refiners subject to the standards, the analysis included a cost-
to-sales ratio test, a ratio of the estimated annualized compliance
costs to the value of sales per company. From this test, we estimated
that all directly regulated small entities would have compliance costs
that are less than one percent of their sales over the life of the
program (75 FR 14862, March 26, 2010).
    We have determined that this proposed rule will not impose any
additional requirements on small entities beyond those already
analyzed, since the impacts of this rule are not greater or
fundamentally different than those already considered in the analysis
for the RFS2 final rule assuming full implementation of the RFS
program. The proposed cellulosic biofuel, advanced biofuel, and total
renewable fuel volumes remain significantly below the statutory volume