StdRF,i = The renewable fuel standard for year i, in
percent.
RFVCB,i = Annual volume of cellulosic biofuel required by
section 211(o) of the Clean Air Act for year i, in gallons.
RFVBBD,i = Annual volume of biomass-based diesel required
by section 211(o) of the Clean Air Act for year i, in gallons.
RFVAB,i = Annual volume of advanced biofuel required by
section 211(o) of the Clean Air Act for year i, in gallons.
RFVRF,i = Annual volume of renewable fuel required by
section 211(o) of the Clean Air Act 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. This value
excludes diesel used in ocean-going vessels.
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 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 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 = Amount of gasoline projected to be produced by
exempt small refineries and small refiners in year i, in gallons, in
any year they are exempt per Sec. Sec.  80.1441 and 80.1442,
respectively.
DEi = Amount of diesel projected to be produced by exempt
small refineries and small refiners in year i, in gallons, in any
year they are exempt per Sec. Sec.  80.1441 and 80.1442,
respectively.

    The formulas used in deriving the annual percentage standards rely
on estimates of the volumes of gasoline and diesel fuel, for both
highway and nonroad uses, which are projected to be used in the year in
which the standards will apply. The projected gasoline and diesel
volumes provided by EIA include ethanol and biodiesel used in
transportation fuel, which are subtracted out as indicated in the
equations above. Production of other transportation fuels, such as
natural gas, propane, and electricity from fossil fuels, is not
currently subject to the standards, and volumes of such fuels are not
used in calculating the annual standards. Since under the regulations
the standards apply only to producers and importers of gasoline and
diesel, these are the transportation fuels used to set the standards,
as well as to determine the annual volume obligations of an individual
gasoline or diesel producer or importer.
2. Small Refineries and Small Refiners
    In CAA section 211(o)(9), enacted as part of the Energy Policy Act
of 2005, and amended by the Energy Independence and Security Act of
2007, Congress provided a temporary exemption to small refineries \221\
through December 31, 2010. Congress provided that small refineries
could receive a temporary extension of the exemption based on an EPA
determination of ``disproportionate economic hardship'' on a case-by-
case basis in response to small refinery petitions.\222\
---------------------------------------------------------------------------

    \221\ A small refinery, as defined by the statute, is a refinery
with an average daily crude throughput of 75,000 barrels or less
(see 40 CFR 80.1441). As this is a facility-based definition, not
company-based as SBA's small refiner definition is, it follows that
not all small refiners' facilities meet the definition of a small
refinery. A small refiner that meets the parameters of 40 CFR
80.1442 may also be eligible for an exemption.
    \222\ For 2011 and 2012 13 small refineries were granted an
extension to the statutory exemption based on the findings of a
Department of Energy investigation into the disproportionate
economic hardship experienced by small refineries.
---------------------------------------------------------------------------

    EPA, in consultation with the Department of Energy, evaluates the
structural impacts petitioning refineries would likely face in
achieving

compliance with the RFS requirements and how compliance would affect
their ability to remain competitive and profitable. A disproportionate
economic hardship exists where a refinery faces a high cost of
compliance relative to the industry average and where compliance would
significantly impair its operations. The U.S. Courts of Appeal for the
Eighth and D.C. Circuits \223\ have upheld this approach, finding it
reasonable for DOE and EPA to conclude that the relative costs of
compliance alone cannot demonstrate disproportionate economic hardship
because all refineries face a direct cost associated with participation
in the RFS program.\224\
---------------------------------------------------------------------------

    \223\ Lion Oil Company v. EPA, 792 F.3d 978; 2015 U.S. App.
LEXIS 11725 (8th Cir. 2015); Monroe Energy, LLC v. EPA, 750 F.3d
909; 409 U.S. App. DC 413 (D.C. Cir. 2014).
    \224\ EPA has also found in its recent analyses of the RIN
market that in a competitive market typical of the gasoline and
diesel marketplace, the cost of RFS compliance (RINs) is passed
along to consumers and recovered by refiners through the prices of
the gasoline blendstocks they sell. Consequentially, not only are
the costs of the RFS program automatically normalized across the
industry based on production volume, but these costs are passed on
to consumers.
---------------------------------------------------------------------------

    EPA has granted some exemptions pursuant to this process in the
past, and has granted exemptions for three small refineries for 2014.
The final applicable percentage standards for 2014 reflect the fact
that the gasoline and diesel volumes associated with these three small
refineries have been exempted, as provided in the formulas described in
the preceding section. However, at this time, no exemptions have been
approved for 2015 or 2016, and therefore we have calculated the
percentage standards for these years without an adjustment for exempted
volumes. As stated in the final rule establishing the 2011 standards,
``EPA believes the Act is best interpreted to require issuance of a
single annual standard in November that is applicable in the following
calendar year, thereby providing advance notice and certainty to
obligated parties regarding their regulatory requirements. Periodic
revisions to the standards to reflect waivers issued to small
refineries or refiners would be inconsistent with the statutory text,
and would introduce an undesirable level of uncertainty for obligated
parties.'' \225\ Thus, any additional exemptions for small refineries
that are issued after today will not affect the 2014, 2015, or 2016
standards.
---------------------------------------------------------------------------

    \225\ See 75 FR 76804 (December 9, 2010).
---------------------------------------------------------------------------

3. Final Standards
    As specified in the RFS2 final rule,\226\ the percentage standards
are based on energy-equivalent gallons of renewable fuel, with the
cellulosic biofuel, advanced biofuel, and total renewable fuel
standards based on ethanol equivalence and the BBD standard based on
biodiesel equivalence. However, all RIN generation is based on ethanol-
equivalence. For example, the RFS regulations provide that production
or import of a gallon of qualifying biodiesel will lead to the
generation of 1.5 RINs. In order to ensure that demand for the required
physical volume of BBD will be created in each year, the calculation of
the BBD standard provides that the applicable physical volume be
multiplied by 1.5. The net result is a BBD gallon being worth 1.0
gallon toward the BBD standard, but worth 1.5 gallons toward the other
standards.
---------------------------------------------------------------------------

    \226\ 75 FR 14716, March 26, 2010.
---------------------------------------------------------------------------

    The levels of the percentage standards would be reduced if Alaska
or a U.S. territory chooses to participate in the RFS program, as
gasoline and diesel produced in or imported into that state or
territory would then be subject to the standard. Neither Alaska nor any
U.S. territory has chosen to participate in the RFS program at this
time, and thus the value of the related terms in the calculation of the
standards is zero.
    The values of the variables described above are shown in Table
V.B.3-1.\227\
---------------------------------------------------------------------------

    \227\ To determine the 49-state values for gasoline and diesel,
the amounts of these fuels used in Alaska is subtracted from the
totals provided by DOE. The Alaska fractions are determined from the
June 24, 2015 EIA State Energy Data System (SEDS), Energy
Consumption Estimates.

                   Table V.B.3-1--Values for Terms in Calculation of the Final Standards \228\
                                                [Billion gallons]
----------------------------------------------------------------------------------------------------------------
                              Term                                     2014            2015            2016
----------------------------------------------------------------------------------------------------------------
RFVCB...........................................................           0.033           0.123           0.230
RFVBBD..........................................................        \a\ 1.66        \b\ 1.77            1.90
RFVAB...........................................................            2.67            2.88            3.61
RFVRF...........................................................           16.28           16.93           18.11
G...............................................................          136.48          139.38          139.96
D...............................................................           55.67           54.05           55.26
RG..............................................................           13.42           13.81           13.85
RD..............................................................            1.55            1.76            2.05
GS..............................................................            0.00            0.00            0.00
RGS.............................................................            0.00            0.00            0.00
DS..............................................................            0.00            0.00            0.00
RDS.............................................................            0.00            0.00            0.00
GE..............................................................            0.01            0.00            0.00
DE..............................................................            0.03            0.00            0.00
----------------------------------------------------------------------------------------------------------------
\a\ Represents the biodiesel-equivalent volume of actual 2014 supply, which was 2.49 bill D4 RINs. Actual
  physical volume was 1.63 billion physical gallons, composed of 1.35 bill gal of biodiesel and 0.28 bill gal
  renewable diesel.
\b\ Represents the biodiesel-equivalent volume of actual 2015 supply, which was 2.65 bill D4 RINs. Actual
  physical volume was 1.73 billion physical gallons, composed of 1.45 bill gal of biodiesel and 0.28 bill gal
  renewable diesel.

    Using\\ the volumes shown in Table V.B.3-1, we have calculated the
final percentage standards for 2014, 2015, and 2016 as shown in Table
V.B.3-2.
---------------------------------------------------------------------------

    \228\ Details of volumes and calculations are available in the
docket.

                                    Table V.B.3-2--Final Percentage Standards
----------------------------------------------------------------------------------------------------------------
                                                                     2014 (%)        2015 (%)        2016 (%)
----------------------------------------------------------------------------------------------------------------
Cellulosic biofuel..............................................           0.019           0.069           0.128
Biomass-based diesel............................................            1.41            1.49            1.59
Advanced biofuel................................................            1.51            1.62            2.01
Renewable fuel..................................................            9.19            9.52           10.10
----------------------------------------------------------------------------------------------------------------

VI. Amendments to Regulations

    We are finalizing several revisions to the RFS regulations, which
are described below. The first revision relates to the definition of
terms in Table 1 to 40 CFR 80.1426, which describes approved biofuel
production pathways. The second set of revisions addresses annual
compliance reporting and associated attest reporting deadlines.

A. Changes to the Algal Biofuel Pathways

    In the March 2010 RFS rule (75 FR 14670), EPA established two
pathways for biofuels derived from algal oil to generate D-Code 4
(Biomass-Based Diesel) or 5 (Advanced) RINs. The analyses supporting
the pathways approved in the March 2010 RFS rule assumed that algae
would be grown photosynthetically (i.e., using predominantly sunlight
and CO2 as inputs) and harvested for their oil.\229\ Biofuel
produced with algae grown through other means is likely to have
different lifecycle GHG emissions impacts. EPA proposed and is now
finalizing changes to our regulations that clarify that the existing
algal oil pathways adopted as part of the March 2010 RFS rule apply
only to oil from algae grown photosynthetically. Specifically, we are
finalizing the proposed replacement of ``algal oil'' as a feedstock in
Table 1 to 40 CFR 80.1426 with ``oil from algae grown
photosynthetically.'' We are also finalizing the proposed definition
for ``algae grown photosynthetically'' to 40 CFR 80.1401. EPA did not
propose or seek comment on adding a regulatory definition of ``algae.''
---------------------------------------------------------------------------

    \229\ See 75 FR 14696 (March 26, 2010).
---------------------------------------------------------------------------

    EPA received several comments in support of these clarifications.
EPA also received several comments that suggested these clarifications
were not necessary and urged the agency to clarify a number of issues
related to the production of algal biofuel using different pathway
configurations. Comments also requested the agency expand the
interpretation of algae to include all autotrophic microorganisms.
These issues are beyond the scope of this rulemaking, which is limited
to the proposed regulatory amendments discussed above that clarify the
existing algal oil pathways. Companies wishing to produce biofuels from
algae grown with a non-photosynthetic stage of growth must apply to EPA
for approval of their pathway pursuant to 40 CFR 80.1416.

B. Annual Compliance Reporting and Attest Engagement Deadlines Under
the RFS Program

    Based on the comments received and the discussion below, the EPA is
finalizing the annual compliance reporting and attest engagement
deadlines described in Table VI.B-1. In summary, the EPA is modifying
for purposes of the final rule the proposed changes to the 2013
compliance reporting deadline for obligated parties and exporters, and
the 2014 and 2015 compliance reporting deadlines for obligated parties.
The EPA is also modifying for purposes of the final rule the proposed
changes to the 2013 attest engagement reporting deadline for RIN
generators, the 2014 attest engagement reporting deadline for RIN
generators and third-party auditors, and the 2015 attest engagement
reporting deadline for obligated parties. The EPA is finalizing all
other compliance and attest engagement reporting deadlines.
    Commenters on the proposed due dates for the 2013, 2014, and 2015
RFS annual compliance and attest engagement reports generally supported
the EPA's approach to staggering the deadlines between compliance
years. However, as one commenter noted, the time between the deadline
for 2015 RFS attest engagement reports for obligated parties conflicts
with 2016 RFS annual compliance and attest reporting deadlines for
obligated parties. The commenter argued that obligated parties rely
upon the results of the prior compliance year's attest engagement
reports to correct vital information that is needed to accurately
determine an obligated party's RVO and RIN balance. Since the proposed
deadlines for 2015 attest engagement reporting occurred after the 2016
annual compliance reporting deadline, obligated parties would have been
unable to utilize the 2015 attest engagement report to ensure timely,
accurate 2016 annual compliance reports. The result of this conflict
would have been the unnecessary resubmission of 2016 annual compliance
reports by obligated parties to address issues identified in the 2015
attest engagement reports. Additionally, certified public accountants
(CPAs) and certified internal auditors (CIAs) would not have been able
to rely upon the 2015 attest engagement report for the 2016 attest
engagement procedures since the proposed deadlines for 2015 and 2016
attest engagements reports were the same. The commenter noted that six
months was too much time between the 2014 and 2015 annual compliance
reporting deadlines for obligated parties. (It should be noted that the
proposed 2014 and 2015 RFS annual compliance deadlines for obligated
parties was only five months apart, not six months.)
    While we recognize the concerns raised, due to constraints on the
EPA's reporting systems and staff, we are unable to accommodate a
faster annual compliance reporting schedule. Additionally, we have
concerns that obligated parties may have difficulty complying with a
more compressed RFS reporting schedule. Obligated parties have several
other EPA fuel program registration and reporting requirements that
become effective in 2016 and 2017. These requirements were primarily
finalized in the Tier 3 rulemaking and include the registration of all
oxygenate blenders (e.g., terminals), the submission of applications
for test methods under the Performance Based Analytical Test Method
Approach program, and compliance with the new Tier 3 gasoline sulfur
standards.
    Concerning obligated parties' attest engagement reporting
deadlines, we believe we can move forward the 2015 RFS attest
engagement reporting deadline for obligated parties to more
appropriately sequence 2015 and 2016 annual compliance and attest
engagement reporting deadlines. However, we recognize that there is a
limited number of CPAs and CIAs that conduct most of the attest
engagement reporting across all of EPA's fuels programs for obligated
parties. We are

concerned that these CPAs and CIAs would become overburdened if we
compressed the attest engagement reporting deadlines too much. Although
we value the timely submission of information, we believe compressing
the 2013 and 2014 attest engagement reporting deadlines would
unnecessarily increase compliance costs for many obligated parties.
    The EPA is also finalizing an adjustment to the proposed 2013
compliance and attest reporting deadlines to accommodate the 60-day
effective date provision of the Congressional Review Act (CRA). As
discussed further in Section IX.K in the final rule, this action is
deemed a ``major rule'' as defined by 5 U.S.C 804(2) and therefore
subject to the 60-day effective date provision of the CRA. This CRA
provision impacts our proposed dates for the 2013 compliance deadline
and attest engagement reporting deadline. Therefore, for the 2013
compliance year, we are finalizing the compliance deadline and attest
engagement reporting deadline for obligated parties and exporters to be
March 1, 2016 or 60 days from publication in the Federal Register of a
final rule establishing standards for 2014, whichever date is later.
    Although these changes are necessary due to the CRA provision, we
believe this extension will provide obligated parties additional time
to consider the impact of the final 2014 standards on the manner in
which they should comply with 2013 requirements, and to engage in RIN
trading transactions for purposes of their 2013 compliance
demonstration that will best position them for compliance with 2014
requirements. Additional detail can located in Table VI.B-1 below and
Section 9.2 in the Response to Comment document.
    We have also decided to provide an additional two-month extension,
beyond that which was proposed, for the 2014 obligated party compliance
demonstration deadline, The final deadline is August 1, 2016. We
received comment suggesting that some parties may have placed undue
reliance in their planning for 2014 compliance on proposed levels from
November, 2013. Although we believe such parties had adequate notice
that the final standards could be higher than proposed, as noted
elsewhere in this preamble, we believe that extending the 2014
compliance demonstration deadline will make it easier for them to come
into compliance. For example, extending the 2014 obligated party
compliance deadline by an additional two months will allow additional
time for such parties to engage in necessary RIN transactions. Together
with the additional time provided for the 2013 compliance demonstration
(which could help certain parties better position themselves for 2014
compliance), and the fact that compliance can be achieved through
acquisition of RINs, without the need for capital investments or actual
renewable fuel blending, we believe that the final 2014 compliance
demonstration deadline is reasonable.
    For obligated parties, we are also finalizing the 2013 and 2014
attest engagement reporting deadlines as proposed. However, we are
changing the 2015 attest engagement reporting deadline for obligated
parties from June 1, 2017 to March 1, 2017. We believe this helps
address comments concerned with having the 2015 and 2016 RFS attest
engagement reporting deadlines fall on the same day and should allow
obligated parties some time to adjust 2016 annual compliance reports
based on issues identified in the 2015 attest engagement report.
    For RIN generators we are changing the 2013 and 2014 attest
engagement reporting deadlines from January 31, 2016 to March 1, 2016.
We are also changing the 2014 attest engagement reporting deadline for
independent third-party auditors from January 31, 2016 to March 1,
2016. These changes are a result of the 60-day effective date provision
of the CRA discussed above.
    We are finalizing all other annual compliance and attest engagement
reporting deadlines for 2013, 2014, and 2015 for other responsible
parties as proposed. The revised annual compliance and attest reporting
deadlines for all regulated party categories for the 2013, 2014, and
2015 compliance years are shown below in Table VI.B-1. For the 2016 and
subsequent compliance years, the deadlines will be back on track with
annual compliance demonstration reports due March 31 and attest
engagement reports due June 1 of the year following the compliance
year.

     Table VI.B-1--Annual Compliance and Attest Engagement Reporting
   Deadlines by Regulated Party Category for the 2013, 2014, and 2015
                         Compliance Years \230\
------------------------------------------------------------------------
                                    Revised annual      Revised attest
    Regulated party category          compliance          engagement
                                       deadline       reporting deadline
------------------------------------------------------------------------
                          2013 Compliance Year
------------------------------------------------------------------------
RIN-generating renewable fuel     N/A...............  March 1, 2016.
 producers and importers; other
 parties owning RINs.
Independent third-party auditors  N/A...............  N/A
Renewable fuel exporters........  March 1, 2016.....  June 1, 2016.
Obligated parties...............  March 1, 2016.....  June 1, 2016.
------------------------------------------------------------------------
                          2014 Compliance Year
------------------------------------------------------------------------
RIN-generating renewable fuel     N/A...............  March 1, 2016.
 producers and importers; other
 parties owning RINs.
Independent third-party auditors  N/A...............  March 1, 2016.
Renewable fuel exporters........  Partial report:     Partial report:
                                   March 31, 2015.     June 1, 2015.
    January-September 16, 2014..  Full report: March  Full report: June
                                   1, 2016.            1, 2016.
    September 17-December 31,     March 31, 2015....  June 1, 2015.
     2014.
Obligated parties...............  August 1, 2016....  December 1, 2016.
------------------------------------------------------------------------
                          2015 Compliance Year
------------------------------------------------------------------------
RIN-generating renewable fuel     N/A...............  June 1, 2016.
 producers and importers; other
 parties owning RINs.
Independent third-party auditors  N/A...............  June 1, 2016.
Renewable fuel exporters........  March 31, 2016....  June 1, 2016.

Obligated parties...............  December 1, 2016..  March 1, 2017.
------------------------------------------------------------------------

VII. Assessment of Aggregate Compliance
---------------------------------------------------------------------------

    \230\ For all March 1, 2016 dates listed in this table, the
actual regulatory deadline is either March 1, 2016 or 60 days from
publication in the Federal Register of this final rule, whichever
date is later.
---------------------------------------------------------------------------

A. Assessment of the Domestic Aggregate Compliance Approach

    The RFS2 regulations contain a provision for renewable fuel
producers who use planted crops and crop residue from U.S. agricultural
land that relieves them of the individual recordkeeping and reporting
requirements concerning the specific land from which their feedstocks
were harvested. To enable this approach, EPA established a baseline
number of acres for U.S. agricultural land in 2007 (the year of EISA
enactment) and determined that as long as this baseline number of acres
was not exceeded, it was unlikely that new land outside of the 2007
baseline would be devoted to crop production based on historical trends
and economic considerations. We therefore provided that renewable fuel
producers using planted crops or crop residue from the U.S. as
feedstock in renewable fuel production need not comply with the
individual recordkeeping and reporting requirements related to
documenting that their feedstocks are renewable biomass, unless EPA
determines through one of its annual evaluations that the 2007 baseline
acreage of 402 million acres agricultural land has been exceeded.
    In the final RFS2 regulations, EPA committed to make an annual
finding concerning whether the 2007 baseline amount of U.S.
agricultural land has been exceeded in a given year. If the baseline is
found to have been exceeded, then producers using U.S. planted crops
and crop residue as feedstocks for renewable fuel production would be
required to comply with individual recordkeeping and reporting
requirements to verify that their feedstocks are renewable biomass.
    The Aggregate Compliance methodology provided for the exclusion of
acreage enrolled in the Grassland Reserve Program (GRP) and the
Wetlands Reserve Program (WRP) from the estimated total U.S.
agricultural land. However, the 2014 Farm Bill has terminated the GRP
and WRP as of 2013 and USDA established the Agriculture Conservation
Easement Program (ACEP) with wetlands and land easement components. The
ACEP provides financial and technical assistance to help conserve
agricultural lands and wetlands and their related benefits. Under the
Agricultural Land Easements component, USDA helps Indian tribes, state
and local governments and non-governmental organizations protect
working agricultural lands and limit non-agricultural uses of the land.
Under the Wetlands Reserve Easements component, USDA helps to restore,
protect and enhance enrolled wetlands. The WRP was a voluntary program
that offered landowners the opportunity to protect, restore, and
enhance wetlands on their property. The GRP was a voluntary
conservation program the emphasized support for working grazing
operations, enhancement of plant and animal biodiversity, and
protection of grassland under threat of conversion to other uses.
    USDA and EPA concur that the ACEP-WRE and ACEP-ALE represent a
continuation in basic objectives and goals of the original WRP and GRP,
although the ACEP-ALE is a bit more expansive that the GRP with respect
to eligible land. Therefore it was assumed in this rulemaking that
acreage enrolled in the easement programs would represent a reasonable
proxy of WRP and GRP acreage. Both Agencies have committed to conduct a
more detailed analysis of the new programs for the 2017 RFS Annual
Volume Regulation.
    Based on data provided by the USDA Farm Service Agency (FSA) and
Natural Resources Conservation Service (NRCS), we have estimated that
U.S. agricultural land reached approximately 380 million acres in 2013,
and thus did not exceed the 2007 baseline acreage. This acreage
estimate is based on the same methodology used to set the 2007 baseline
acreage for U.S. agricultural land in the RFS2 final rulemaking.
Specifically, we started with FSA crop history data for 2013, from
which we derived a total estimated acreage of 379,717,296 acres. We
then subtracted the amount of land estimated to be participating in the
Grasslands Reserve Program (GRP) and Wetlands Reserve Program (WRP) by
the end of Fiscal Year 2013, 144,619 acres, to yield an estimate of
approximately 380 million acres of U.S. agricultural land in 2013. Note
that these programs were still in place in 2013. The USDA data used to
make this derivation can be found in the docket to this rule.
    Similarly, we have estimated that U.S. agricultural land reached
approximately 378 million acres in 2014, and thus did not exceed the
2007 baseline acreage. This acreage estimate is based on the same
methodology used to set the 2007 baseline acreage for U.S. agricultural
land in the RFS2 final rulemaking, with GRP and WRP data substitution
as noted above. Specifically, we started with FSA crop history data for
2014, from which we derived a total estimated acreage of 377,829,781
acres. We then subtracted the amount of land estimated to be
participating in the Agriculture Land Easement (ACEP-ALE) and Wetlands
Reserve (ACEP-WRE) by the end of Fiscal Year 2014, 143,834 acres, to
yield an estimate of approximately 378 million acres of U.S.
agricultural land in 2014. The USDA data used to make this derivation
can be found in the docket to this rule.
    Finally, we have estimated that U.S. agricultural land reached
approximately 379 million acres in 2015, and thus did not exceed the
2007 baseline acreage. This acreage estimate is based on the same
methodology used to set the 2007 baseline acreage for U.S. agricultural
land in the RFS2 final rulemaking, with GRP and WRP data substitution
as noted above. Specifically, we started with FSA crop history data for
2015, from which we derived a total estimated acreage of 379,236,620
acres. We then subtracted the Agriculture Land Easement (ACEP-ALE) and
Wetlands Reserve (ACEP-WRE) enrolled acres by the end of Fiscal Year
2015, 84,133 acres, to yield an estimate of approximately 379 million
acres of U.S. agricultural land in 2015. The USDA data used to make
this estimation can be found in the docket to this rule.

B. Assessment of the Canadian Aggregate Compliance Approach

    On March 15, 2011, EPA issued a notice of receipt of and solicited
public comment on a petition for EPA to authorize the use of an
aggregate approach for compliance with the

Renewable Fuel Standard renewable biomass requirements, submitted by
the Government of Canada. The petition requested that EPA determine
that an aggregate compliance approach will provide reasonable assurance
that planted crops and crop residue from Canada meet the definition of
renewable biomass. After thorough consideration of the petition, all
supporting documentation provided and the public comments received, EPA
determined that the criteria for approval of the petition were
satisfied and approved the use of an aggregate compliance approach to
renewable biomass verification for planted crops and crop residue grown
in Canada.
    The Government of Canada utilized several types of land use data to
demonstrate that the land included in their 124 million acre baseline
is cropland, pastureland or land equivalent to U.S. Conservation
Reserve Program land that was cleared or cultivated prior to December
19, 2007, and was actively managed or fallow and non-forested on that
date (and is therefore RFS2 qualifying land). The total agricultural
land in Canada in 2013 is estimated at 119.8 million acres. This total
agricultural land area includes 96.3 million acres of cropland and
summer fallow, 13.7 million acres of pastureland and 9.8 million acres
of agricultural land under conservation practices. This acreage
estimate is based on the same methodology used to set the 2007 baseline
acreage for Canadian agricultural land in the RFS2 response to
petition. The trigger point for further evaluation of the data for
subsequent years, provided by Canada, is 121 million acres. The data
used to make this calculation can be found in the docket to this rule.
    The total agricultural land in Canada in 2014 is estimated at 119.5
million acres. This total agricultural land area includes 96 million
acres of cropland and summer fallow, 13.7 million acres of pastureland
and 9.8 million acres of agricultural land under conservation
practices. This acreage estimate is based on the same methodology used
to set the 2007 baseline acreage for Canadian agricultural land in the
RFS2 response to petition. The data used to make this calculation can
be found in the docket to this rule.
    The total agricultural land in Canada in 2015 is estimated at 118.6
million acres. This total agricultural land area includes 94.9 million
acres of cropland and summer fallow, 13.9 million acres of pastureland
and 9.8 million acres of agricultural land under conservation
practices. This acreage estimate is based on the same methodology used
to set the 2007 baseline acreage for Canadian agricultural land in the
RFS2 response to petition. The data used to make this calculation can
be found in the docket to this rule.

VIII. Public Participation

    Many interested parties participated in the rulemaking process that
culminates with this final rule. This process provided opportunity for
submitting written public comments following the proposal that we
published on June 10, 2015 (80 FR 33100), and we also held a public
hearing on June 25, 2015, at which many parties provided both verbal
and written testimony. All comments received, both verbal and written,
are available in EPA docket EPA-HQ-OAR-2015-0111 and we considered
these comments in developing the final rule. Public comments and EPA
responses are discussed throughout this preamble and in the
accompanying RTC document, which is available in the docket for this
action.

IX. Statutory and Executive Order Reviews

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. The EPA prepared an analysis of the potential
costs associated with this action. This analysis is presented in
Section II.I of this preamble.

B. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden
under the PRA. OMB has previously approved the information collection
activities contained in the existing regulations and has assigned OMB
control numbers 2060-0637 and 2060-0640. The final standards would not
impose new or different reporting requirements on regulated parties
than already exist for the RFS program.

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.
    The small entities directly regulated by the RFS program are small
refiners, which are defined at 13 CFR 121.201 as refiners with 1,500
employees or less company-wide. The impacts of the RFS program as a
whole on small entities were addressed in the March 26, 2010, RFS2
rulemaking (75 FR 14670), which was a rule that implemented the entire
program required by the Energy Independence and Security Act of 2007
(EISA 2007). 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.
    For the SBREFA process for the March 26, 2010, RFS2 rulemaking, EPA
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. The analysis included a
cost-to-sales ratio test, a ratio of the estimated annualized
compliance costs to the value of sales per company, for gasoline and/or
diesel small refiners subject to the standards. From this test, it was
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).
    We have determined that this final rule will not impose any
additional requirements on small entities beyond those already
analyzed, since the impacts of this final rule are not greater or
fundamentally different than those already considered in the analysis
for the March 26, 2010, rule assuming full implementation of the RFS
program. As shown above in Tables I-1 and I.A-1 (and discussed further
in Sections II and IV), this rule finalizes the 2014, 2015, and 2016
volume requirements for cellulosic biofuel, advanced biofuel, and total
renewable fuel at levels significantly below the statutory volume
targets. This exercise of EPA's waiver authorities reduces burdens on
small entities, as compared to the burdens that

would be imposed under the volumes specified in the Clean Air Act in
the absence of waivers--which are the volumes that we assessed in the
screening analysis that we prepared for implementation of the full
program. Regarding the biomass-based diesel standard, we are finalizing
an increase in the volume requirements for 2014-2016 over the statutory
minimum value of 1 billion gallons. However, this is a nested standard
within the advanced biofuel category, for which we are finalizing
significant reductions from the statutory volume targets. As discussed
in Section III, we are setting the biomass-based diesel volume
requirement at a level below what is anticipated will be produced and
used to satisfy the reduced advanced biofuel requirement. The net
result of the standards being finalized in this action is a reduction
in burden as compared to implementation of the statutory volume
targets, as was assumed in the March 26, 2010, analysis.
    For this final rule, EPA has conducted a screening analysis to
assess whether it should make a finding that this action would 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. EPA has reviewed and assessed the available information,
which suggests that obligated parties, including small entities, are
generally able to recover the purchase cost of the RINs necessary for
compliance through higher sales prices of the petroleum products they
sell than would be expected in the absence of the RFS
program.231 232 Even if we were to assume that the cost of
RINs were not recovered by obligated parties, and we used the maximum
values of the illustrative costs discussed in Section II.I, the
gasoline and diesel fuel volume projections from the October 2015
version of EIA's Short-Term Energy Outlook, and current wholesale fuel
prices, a cost-to-sales ratio test shows that the costs to small
entities of the RFS standards are less than 1% of the value of their
sales.
---------------------------------------------------------------------------

    \231\ For a further discussion of the ability of obligated
parties to recover the cost of RINs see ``A Preliminary Assessment
of RIN Market Dynamics, RIN Prices, and Their Effects,'' Dallas
Burkholder, Office of Transportation and Air Quality, US EPA. May
14, 2015, EPA Air Docket EPA-HQ-OAR-2015-0111.
    \232\ Knittel, Christopher R., Ben S. Meiselman, and James H.
Stock. ``The Passthrough of RIN Prices to Wholesale and Retail Fuels
Under the Renewable Fuel Standard.'' Working Paper 21343. NBER
Working Paper Series. Available online http://www.nber.org/papers/w21343.pdf.
---------------------------------------------------------------------------

    While the rule will not have a significant economic impact on a
substantial number of small entities, there are compliance
flexibilities in the program that can help to reduce impacts on small
entities. These flexibilities include being able to comply through RIN
trading rather than renewable fuel blending, 20% RIN rollover allowance
(up to 20% of an obligated party's RVO can be met using previous-year
RINs), and deficit carry forward (the ability to carry over a deficit
from a given year into the following year, providing that the deficit
is satisfied together with the next year's RVO). In the March 26, 2010,
final rule, we discussed other potential small entity flexibilities
that had been suggested by the SBREFA panel or through comments, but we
did not adopt them, in part because we had serious concerns regarding
our authority to do so.
    Additionally, as we realize that there may be cases in which a
small entity experiences hardship beyond the level of assistance
afforded by the program flexibilities, the program provides hardship
relief provisions for small entities (small refiners), as well as for
small refineries.\233\ As required by the statute, the RFS regulations
include a hardship relief provision (at 40 CFR 80.1441(e)(2)) which
allows for a small refinery \234\ to petition for an extension of its
small refinery exemption at any time based on a showing that compliance
with the requirements of the RFS program would result in the refinery
experiencing a ``disproportionate economic hardship.'' EPA regulations
provide similar relief to small refiners that are not eligible for
small refinery relief. A small refiner may petition for a small refiner
exemption based on a similar showing that compliance with the
requirements of the RFS program would result in the refiner
experiencing a ``disproportionate economic hardship'' (see 40 CFR
80.1442(h)). EPA evaluates these petitions on a case-by-case basis and
may approve such petitions if it finds that a disproportionate economic
hardship exists. In evaluating such petitions, EPA consults with the
U.S. Department of Energy, and takes the findings of DOE's 2011 Small
Refinery Study and other economic factors into consideration. For the
2013 RFS standards, the EPA successfully implemented these provisions
by evaluating 16 petitions for exemptions from small refineries (one
was later withdrawn).
---------------------------------------------------------------------------

    \233\ See CAA section 211(o)(9)(B).
    \234\ A small refinery, as defined by the statute, is a refinery
with an average daily crude throughput of 75,000 barrels or less. As
this is a facility-based definition, not company-based as SBA's
small refiner definition is, it follows that not all small refiners'
facilities meet the definition of a small refinery.
---------------------------------------------------------------------------

    Given that this final rule would not impose additional requirements
on small entities, would decrease burden via a reduction in required
volumes as compared to statutory volume targets, would not change the
compliance flexibilities currently offered to small entities under the
RFS program (including the small refinery hardship provisions we
continue to successfully implement), and available information shows
that the impact on small entities from implementation of this rule will
not be significant, we have therefore concluded that this action would
have no net regulatory burden for directly regulated small entities.

D. Unfunded Mandates Reform Act (UMRA)

    This action contains a federal mandate under UMRA, 2 U.S.C. 1531-
1538, that may result in expenditures of $100 million or more for
state, local and tribal governments, in the aggregate, or the private
sector in any one year. Accordingly, the EPA has prepared a written
statement required under section 202 of UMRA. The statement is included
in the docket for this action, and discussed above in Section II.I.
This action implements mandates specifically and explicitly set forth
in CAA section 211(o) and, as described in Section II.I, we believe
that this action represents the least costly, most cost-effective
approach to achieve the statutory requirements of the rule.
    This action is not subject to the requirements of section 203 of
UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    This action does not have tribal implications as specified in
Executive Order 13175. This final rule will be implemented at the
Federal level and affects transportation fuel refiners, blenders,
marketers, distributors, importers, exporters, and renewable fuel
producers and importers. Tribal

governments would be affected only to the extent they produce,
purchase, and use regulated fuels. Thus, Executive Order 13175 does not
apply to this action.

G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it implements specific standards
established by Congress in statutes (CAA section 211(o)) and does not
concern an environmental health risk or safety risk.

H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. This action establishes the required
renewable fuel content of the transportation fuel supply for 2014,
2015, and 2016, consistent with the CAA and waiver authorities provided
therein. The RFS program and this rule are designed to achieve positive
effects on the nation's transportation fuel supply, by increasing
energy independence and lowering lifecycle greenhouse gas emissions of
transportation fuel.

I. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations, and Low-Income Populations

    The EPA believes that this action will not have potential
disproportionately high and adverse human health or environmental
effects on minority, low-income, or indigenous populations. This final
rule does not affect the level of protection provided to human health
or the environment by applicable air quality standards. This action
does not relax the control measures on sources regulated by the RFS
regulations and therefore will not cause emissions increases from these
sources.

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is a ``major rule'' as defined by 5
U.S.C. 804(2).

X. Statutory Authority

    Statutory authority for this action comes from section 211 of the
Clean Air Act, 42 U.S.C. 7545. Additional support for the procedural
and compliance related aspects of this final rule come from sections
114, 208, and 301(a) of the Clean Air Act, 42 U.S.C. 7414, 7542, and
7601(a).

List of Subjects in 40 CFR Part 80

    Environmental protection, Administrative practice and procedure,
Air pollution control, Diesel fuel, Fuel additives, Gasoline, Imports,
Oil imports, Petroleum, Renewable fuel.

    Dated: November 30, 2015.
Gina McCarthy,
Administrator.

    For the reasons set forth in the preamble, EPA amends 40 CFR part
80 as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

0
1. The authority citation for part 80 continues to read as follows:

    Authority:  42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).

Subpart M--[Amended]

0
2. Section 80.1401 is amended by adding in alphabetical order the
definition for ``Algae grown photosynthetically'' to read as follows:

Sec.  80.1401  Definitions.

* * * * *
    Algae grown photosynthetically are algae that are grown such that
their energy and carbon are predominantly derived from photosynthesis.
* * * * *

0
3. Section 80.1405 is amended by:
0
a. Removing and reserving paragraph (a)(2)(i); and
0
b. Adding paragraphs (a)(5) through (7).
    The additions read as follows:

Sec.  80.1405  What are the Renewable Fuel Standards?

    (a) * * *
    (5) Renewable Fuel Standards for 2014.
    (i) The value of the cellulosic biofuel standard for 2014 shall be
0.019 percent.
    (ii) The value of the biomass-based diesel standard for 2014 shall
be 1.41 percent.
    (iii) The value of the advanced biofuel standard for 2014 shall be
1.51 percent.
    (iv) The value of the renewable fuel standard for 2014 shall be
9.19 percent.
    (6) Renewable Fuel Standards for 2015.
    (i) The value of the cellulosic biofuel standard for 2015 shall be
0.069 percent.
    (ii) The value of the biomass-based diesel standard for 2015 shall
be 1.49 percent.
    (iii) The value of the advanced biofuel standard for 2015 shall be
1.62 percent.
    (iv) The value of the renewable fuel standard for 2015 shall be
9.52 percent.
    (7) Renewable Fuel Standards for 2016.
    (i) The value of the cellulosic biofuel standard for 2016 shall be
0.128 percent.
    (ii) The value of the biomass-based diesel standard for 2016 shall
be 1.59 percent.
    (iii) The value of the advanced biofuel standard for 2016 shall be
2.01 percent.
    (iv) The value of the renewable fuel standard for 2016 shall be
10.10 percent.
* * * * *

0
4. Section 80.1426, paragraph (f)(1) is amended by revising entries F
and H in Table 1 to Sec.  80.1426 to read as follows:

Sec.  80.1426  How are RINs generated and assigned to batches of
renewable fuel by renewable fuel producers or importers?

* * * * *
    (f) * * *
    (1) * * *

         Table 1 to Sec.   80.1426--Applicable D Codes for Each Fuel Pathway for Use in Generating RINs
----------------------------------------------------------------------------------------------------------------
                                                                              Production process
                             Fuel type                 Feedstock                 requirements           D-Code
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
F..................  Biodiesel, renewable      Soy bean oil; Oil from     One of the following:                4
                      diesel, jet fuel and      annual covercrops; Oil     Trans-Esterification
                      heating oil.              from algae grown           Hydrotreating Excluding
                                                photosynthetically;        processes that co-
                                                Biogenic waste oils/fats/  process renewable
                                                greases; Non-food grade    biomass and petroleum.
                                                corn oil; Camelina
                                                sativa oil.

                                                  * * * * * * *
H..................  Biodiesel, renewable      Soy bean oil; Oil from     One of the following:                5
                      diesel, jet fuel and      annual covercrops; Oil     Trans-Esterification
                      heating oil.              from algae grown           Hydrotreating Includes
                                                photosynthetically;        only processes that co-
                                                Biogenic waste oils/fats/  process renewable
                                                greases; Non-food grade    biomass and petroleum.
                                                corn oil; Camelina
                                                sativa oil.

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *

0
5. Section 80.1451 is amended by revising paragraph (a)(1)(xiv) to read
as follows:

Sec.  80.1451  What are the reporting requirements under the RFS
program?

    (a) * * *
    (1) * * *
    (xiv)(A) For the 2013 compliance year, annual compliance reports
shall be submitted no later than March 1, 2016 or 60 days from
publication in the Federal Register of a final rule establishing 2014
RFS standards, whichever date is later.
    (B) For obligated parties, for the 2014 compliance year, annual
compliance reports shall be submitted no later August 1, 2016.
    (C) For exporters of renewable fuel, for the 2014 compliance period
from January 1, 2014, through September 16, 2014, full annual
compliance reports (containing the information specified in paragraphs
(a)(1)(i), (ii), (vi), (viii), and (x) of this section) for that period
shall be submitted no later than March 1, 2016 or 60 days from
publication in the Federal Register of a final rule establishing 2014
RFS standards, whichever date is later.
    (D) For obligated parties, for the 2015 compliance year, annual
compliance reports shall be submitted no later than December 1, 2016.
* * * * *

0
6. Section 80.1464 is amended by:
0
a. Revising paragraph (g); and
0
b. Adding paragraph (i)(3).
    The addition and revision read as follows:

Sec.  80.1464  What are the attest engagement requirements under the
RFS program?

* * * * *
    (g)(1) For obligated parties and exporters of renewable fuel, for
the 2013 compliance year, reports required under this section shall be
submitted to the EPA no later than June 1, 2016.
    (2) For RIN-generating renewable fuel producers, RIN-generating
importers of renewable fuel, and other parties owning RINs, for the
2013 compliance year, reports required under this section shall be
submitted to the EPA no later than March 1, 2016 or 60 days from
publication in the Federal Register of a final rule establishing 2014
RFS standards, whichever date is later.
    (3) For obligated parties, for the 2014 compliance year, reports
required under this section shall be submitted to the EPA no later than
December 1, 2016.
    (4) For exporters of renewable fuel, for the 2014 compliance period
from January 1, 2014, through September 16, 2014, full reports for that
period required under this section shall be submitted no later than
June 1, 2016.
    (5) For RIN-generating renewable fuel producers, RIN-generating
importers of renewable fuel, and other parties owning RINs, for the
2014 compliance year, reports required under this section shall be
submitted to the EPA no later than March 1, 2016 or 60 days from
publication in the Federal Register of a final rule establishing 2014
RFS standards, whichever date is later.
    (6) For obligated parties, for the 2015 compliance year, reports
required under this section shall be submitted to the EPA no later than
March 1, 2017.
* * * * *
    (i) * * *
    (3) Reporting requirements. For the 2014 compliance year, reports
required under this paragraph (i) shall be submitted to the EPA no
later than March 1, 2016 or 60 days from publication in the Federal
Register of a final rule establishing 2014 RFS standards, whichever
date is later. For the 2015 compliance year and each subsequent year,
reports required under this paragraph (i) shall be submitted pursuant
to paragraph (d) of this section.

[FR Doc. 2015-30893 Filed 12-11-15; 8:45 am]
 BILLING CODE 6560-50-P