converted to RNG, and records showing the amount of non-renewable
content added to ensure that applicable pipeline specifications are
met. For RNG injection, RNG producers are required to maintain records
showing the date of injection and the volume and energy content of the
RNG injected into the natural gas commercial pipeline system.\282\ For
RNG RIN generation, RNG producers must maintain records related to the
generation of RINs in accordance with 40 CFR 80.1454(b). These
recordkeeping requirements are necessary to ensure that the RNG was
produced and injected in a manner consistent with CAA requirements and
applicable regulatory requirements, and that the appropriate number of
RINs was generated for the RNG injected into the natural gas commercial
pipeline system. Since EPA will be tracking the movement of assigned
RNG RINs in EMTS, we no longer require that the RIN generator (i.e.,
RNG producer under biogas regulatory reform) maintain records related
to the contractual arrangements for the sale and transfer of RNG to
parties that distribute the RNG to the end user. These records will no
longer be needed since EMTS will memorialize the necessary information
pertaining to the transfer of the assigned RINs.
---------------------------------------------------------------------------

    \282\ For specific cases where RNG that is trucked to an
interconnect, we are proposing the RNG producer measure when loading
and unloading each truck.
---------------------------------------------------------------------------

    We are also requiring that RNG RIN separators maintain records
related to their RNG RIN separation activities. For RNG to renewable
CNG/LNG, this includes information related to the location where the
RNG was converted into renewable CNG/LNG, as well as the date,
location, and amount of dispensed CNG/LNG. The recordkeeping
requirements related to demonstrating that RNG was used as
transportation fuel were previously maintained by the RIN generator but
now must be maintained by the RNG RIN separator. These records are
necessary to ensure that RNG is used as transportation fuel, and we
believe that it is most appropriate to require that the party best
positioned to demonstrate that the RNG is used as transportation fuel
maintain the records.

I. Testing and Measurement Requirements

    We are finalizing specific testing and measurement procedures for
biogas and RNG. Due to the value of RINs and the contribution that that
value can make to company revenue, parties have clear incentives to
manipulate testing and measurement results to appear to have produced
more biogas, RNG, and biogas-derived renewable fuels than they actually
did. By establishing clear and consistent testing and measurement
requirements, we can ensure the validity of RINs and a level playing
field for RIN generators.
    For the measurement of biogas and RNG, we are finalizing the
incorporation of relevant portions of the previously published guidance
into the regulations.\283\ Under the guidance, we allowed for parties
to submit as part of their registrations whether they were using in-
line gas chromatography (GC) meters or an alternative sampling protocol
for measurement of biogas. In this action, we are also allowing an
alternative to continuous measurement,

specifying a specific standard for GC meters, and requiring measurement
for both biogas and RNG.
---------------------------------------------------------------------------

    \283\ ``Guidance on Biogas Quality and RIN Generation when
Biogas is Injected into a Commercial Pipeline for use in Producing
Renewable CNG or LNG under the Renewable Fuel Standard Program'' See
document ID: EPA-420-B-16-075.
---------------------------------------------------------------------------

    Multiple commenters raised concerns about the proposed measurement
devices. They requested that EPA allow other types of measurement
devices and allow use of the manufacturers' operating procedures in
lieu of EPA's proposed standardized measurement techniques. However,
federal regulations based on the National Technology Transfer and
Advancement Act (NTTAA) state that agencies should give preference to
standardized measurement techniques.\284\ Given that there are
standards for measurement techniques that can be used in the
measurement of methane concentration and flow of biogas and RNG, we do
not believe it is appropriate to allow for the use of manufacturers'
operating procedures or to allow parties to provide documentation to
EPA when standards for such measurement exist. The appropriateness of
using other techniques mentioned by the commenters depends on whether a
standard meets the requirements. Commenters did not provide standards
for the alternative measurement devices that they recommended EPA
allow, although EPA did find one standard that is sufficient which is
for thermal mass flow measurement devices and is therefore allowing
those devices under the program. The standards for measurement that we
are finalizing are as follows:
---------------------------------------------------------------------------

    \284\ 15 CFR 287.4(f).
---------------------------------------------------------------------------

     API MPMS 14.3.1, API MPMS 14.3.2, API MPMS 14.3.3, and API
MPMS 14.3.4: These standards describe the measurement of gaseous flow
by orifice meters for use in biogas production and RNG production
facilities.
     API MPMS 14.12: This standard describes measurement of
gaseous flow by vortex meter for use in biogas production and RNG
production facilities.
     ASTM D7164: This standard describes measurement of methane
concentration by gas chromatogram for use in biogas production and RNG
production facilities.
     EN 17526: This standard describes how to measure gaseous
flow by thermal mass flow meter for use in biogas and RNG production
facilities.
    Similarly, we are also incorporating into the regulations part of
the guidance related to analytical testing for the registration of
biogas and RNG for use in the production of a biogas-derived renewable
fuel.\285\ To balance the need for timely registration with our need to
ensure product quality and to inform future regulations, we are
finalizing the requirement that RNG producers need to submit
certificates of analysis from an independent laboratory in its three-
year engineering reviews, but not at initial registration.
---------------------------------------------------------------------------

    \285\ ``Guidance on Biogas Quality and RIN Generation when
Biogas is Injected into a Commercial Pipeline for use in Producing
Renewable CNG or LNG under the Renewable Fuel Standard Program'' See
document ID: EPA-420-B-16-075.
---------------------------------------------------------------------------

    To summarize the requirements we are finalizing, in all engineering
reviews for facilities upgrading biogas to RNG, an RNG producer must
supply specifications for the natural gas commercial pipeline system
into which the RNG will be injected. The pipeline specifications must
contain information on all parameters regulated by the pipeline (e.g.,
hydrogen sulfide, total sulfur, carbon dioxide, oxygen, nitrogen,
heating content, moisture, and any other available data related to the
gas components). Additionally, in all three-year engineering review
updates for facilities upgrading biogas to RNG, an RNG producer must
supply the following:
     A certificate of analysis (COA) for a representative
sample of the biogas produced at the digester or landfill.
     A COA for a representative sample of the RNG prior to the
addition of any non-renewable components.
     A COA for a representative sample of the RNG after
blending with non-renewable components (if the RNG is blended with non-
renewable components prior to injection into a pipeline).
     Summary table with the results of the three COAs and the
pipeline specifications (converted to the same units).
    We had proposed that facilities supply documentation of any waiver
provided by the commercial distribution pipeline for any parameter of
the RNG that does not meet the pipeline specifications, if applicable.
Based on comments, we are no longer requiring that such waivers be
supplied at registration. Instead, we are requiring parties to keep
records of such waivers so that EPA can determine whether RNG producers
brought RNG up to pipeline specifications consistent with EPA's
regulatory requirements.
    We are finalizing as proposed that the RNG producers must include
on the COAs submitted as part of a three-year engineering review update
major and minor gas components (e.g., methane, carbon dioxide,
nitrogen, oxygen, heating value, relative density, moisture, and any
other available data related to the gas components), hydrocarbon
analysis, and trace gas components (e.g., hydrogen sulfide, total
sulfur, total organic silicon/siloxanes, moisture, etc.), plus any
additional parameters and related specifications for the pipeline being
used. We are also specifying methods that must be used when measuring
biogas properties. These standards are based on methods used for these
measurements which have been submitted to us in the past and which we
believe provide sufficient accuracy. The standards we are codifying for
biogas and RNG measurement for three-year engineering review update
analysis are the following:
     ASTM D3588: This method describes how to calculate heating
value and relative density.
     ASTM D4888: This method describes how to measure moisture
content.
     ASTM D5504: This method describes how to measure hydrogen
sulfide and other sulfur compounds.
     ASTM D6866: This method measures biogenic carbon.
     ASTM D8230: This method describes how to measure
siloxanes.
     EPA Method 3C: This method describes how to measure
methane, carbon dioxide, nitrogen, and oxygen.
     API MPMS 14.1: This method describes how to obtain
representative samples.
    We also note in the guidance that parties must keep the COAs,
pipeline specifications, and any measurement-related RIN generation
components under the recordkeeping requirements of 40 CFR 80.1454. As
part of the RFS program's third-party oversight provisions, the
guidance recommends that third-party engineers review conformance with
applicable recordkeeping requirements as part of their engineering
reviews while third-party auditors review conformance with these
recordkeeping requirements pursuant to the RFS QAP. We are finalizing
as proposed that RNG producers must keep testing and measurement
records of biogas and RNG and that third-party auditors must verify
this information as part of QAP, if applicable, as mentioned in the
guidance.\286\
---------------------------------------------------------------------------

    \286\ ``Guidance on Biogas Quality and RIN Generation when
Biogas is Injected into a Commercial Pipeline for use in Producing
Renewable CNG or LNG under the Renewable Fuel Standard Program'' See
document ID: EPA-420-B-16-075.
---------------------------------------------------------------------------

    We are also finalizing as proposed additional measurement
requirements

for RNG that is trucked to a gas pipeline interconnect. In this
situation, RNG producers must measure RNG flow and energy content of
biomethane both on loading into and unloading from the truck. We find
that this requirement is necessary to ensure that RINs are only
generated from renewable biomass.

J. RFS QAP Under Biogas Regulatory Reform

    Consistent with how QAP was treated under the previous biogas
provisions, we are not requiring that biogas producers and RNG
producers participate in the RFS QAP. We believe these biogas
regulatory reforms will address the issues of double counting as
discussed in Section IX.A.4.b, such that a requirement that biogas
producers and RNG producers participate in the RFS QAP is not
necessary.
    While we are not requiring RFS QAP participation, for parties that
choose to participate in QAP under the updated biogas program, both the
biogas producer and the RNG producer must be audited by the same
independent third-party auditor in order to generate a Q-RIN for RNG.
In the NPRM we proposed additional elements that a QAP auditor would
have to verify under biogas regulatory reform consistent with the
proposed regulatory requirements.\287\ These new QAP elements for RNG
producers included requirements that the QAP auditor must: \288\
---------------------------------------------------------------------------

    \287\ See 87 FR 80737-80738 (December 30, 2022).
    \288\ See 40 CFR 80.180(c).
---------------------------------------------------------------------------

     Verify that the sampling, testing, and measurement of RNG
is consistent with the new regulatory requirements.
     Verify that RINs were assigned correctly.
     Verify that RINs were separated and retired correctly.
     Verify that the RNG was injected into a natural gas
commercial pipeline system.
     Verify that RINs were not generated on non-renewable
components added to RNG prior to injection into a natural gas
commercial pipeline system.
    These new QAP elements are necessary for QAP auditors to ensure
that RNG and RNG RINs are produced and generated, respectively,
consistent with the biogas regulatory reform provisions and, in
addition to the generally applicable QAP elements at 40 CFR 80.1469,
will provide a robust verification scheme to help ensure that RINs
generated for RNG are valid. Therefore, we are finalizing them as
proposed.
    We note that, under this action, the parties that transact the
assigned RNG RIN and the RNG RIN separator do not need to be included
as part of the RFS QAP. This approach is consistent with the current
regulatory treatment of RINs generated for ethanol and biodiesel, and
we are not modifying how the RFS QAP considers RIN separations in this
action. We note that, as described in Section IX.K.2, we are requiring
that RNG RIN separators undergo annual attest engagements, which we
believe should provide sufficient third-party oversight to ensure that
RNG RINs are separated consistent with the biogas regulatory reform
provisions.
    Several commenters suggested that instead of finalizing the
proposed biogas regulatory reform provisions, EPA should require QAP
participation for parties that generate RINs for biogas to CNG/LNG.
While we believe that QAP participation can provide added assurance for
parties that transact RINs generated for biogas to CNG/LNG, the QAP is
not a substitute for the biogas regulatory reform provisions. EPA
cannot implement through QAP the modified measurement, reporting, and
recordkeeping requirements that are necessary to ensure that qualifying
biogas is used to produce biogas-derived renewable fuels or address our
double-counting concerns in a situation where biogas may be used for
multiple purposes under the RFS program. These requirements must be
imposed on the parties that produce, distribute, and use biogas, RNG,
and biogas-derived renewable fuels because those parties are best
positioned to demonstrate compliance with the applicable statutory and
regulatory requirements. The QAP auditor's role is to verify that the
applicable regulatory requirements are met, not serve as a substitute
for the compliance and enforcement provisions that compose biogas
regulatory reform designed to ensure that qualifying biogas is produced
and used to generate valid RINs. As we articulated in Section IX.A, we
are modifying the compliance and enforcement mechanisms under the
previous biogas provisions to address concerns with double counting to
ensure that RINs generated from biogas meet Clean Air Act and EPA
regulatory requirements.
    Commenters also failed to explain how QAP participation would
effectively address any of EPA's concerns with oversight after we have
allowed biogas and RNG to be used for multiple uses under the RFS
program. As noted in the NPRM,\289\ we believe the previous biogas
provisions were ill-suited for situations where biogas/RNG could have
multiple uses and that the increased flexibility in the program would
require additional oversight to ensure that biogas/RNG was not double-
counted and generating invalid RINs. QAP cannot effectively oversee
this situation because individual auditors would only verify a small
portion of the production/distribution system as part of their
verification. Only through creating effective, systemwide tracking can
such verification occur. Our biogas regulatory reform provisions will
use EMTS to track the movement of biogas and RNG from production until
ultimate use. QAP auditors and EPA can then use this tracking
information to verify that double-counting did not occur.
---------------------------------------------------------------------------

    \289\ 87 FR 80693.
---------------------------------------------------------------------------

K. Compliance and Enforcement Provisions and Attest Engagements

    We are finalizing as proposed compliance and enforcement provisions
for biogas-derived renewable fuels similar to the existing compliance
and enforcement provisions under the RFS program. Under the RFS
program, these provisions serve to deter fraud and ensure that EPA can
effectively enforce when noncompliance occurs, and the compliance and
enforcement provisions for biogas-derived renewable fuels will serve
the same purposes. We discuss the specific provisions below.
1. Prohibited Actions, Liability, and Invalid RINs
    In order to deter noncompliance, the regulations must make clear
what acts are prohibited, who is liable for violations, and what
happens when biogas-derived RINs are found to be invalid. To this end,
we are finalizing as proposed provisions that establish: (1) Prohibited
actions relating to the generation of RINs from biogas-derived
renewable fuels; (2) How biogas producers, RNG producers, and RIN
generators for RNG will be held liable when RINs from biogas-derived
renewable fuels are determined to be invalid; (3) How biogas producers
and RNG producers may establish affirmative defenses; and (4)
Provisions related to the treatment of invalid RINs from biogas-derived
renewable fuels. Many of these provisions are similar to provisions
under the existing RFS program and EPA's fuel quality programs in 40
CFR part 1090.
a. Prohibited Actions
    The RFS program regulations enumerate specific prohibited acts
under the RFS program. In our recent Fuels Regulatory Streamlining
Rule, we consolidated the multiple prohibited acts statements in the
various fuel quality provisions sections of 40 CFR part 80 into a
single prohibition against causing, or causing someone else to,

violate any requirement of the part.\290\ For biogas regulatory reform,
we are adopting a prohibited act that mirrors the consolidated
prohibited acts provision from the Fuels Regulatory Streamlining Rule,
and specify that any person who violates, or causes another person to
violate, any requirement in the subpart for biogas-derived renewable
fuels, i.e., 40 CFR part 80, subpart E, is liable for the violation.
Consolidation of the prohibited actions is not meant to alter the scope
of prohibited actions, but instead provides more clarity to the
regulated community regarding what actions are prohibited.
---------------------------------------------------------------------------

    \290\ See 85 FR 29034, 29075 (May 14, 2020); 40 CFR 1090.1700.
---------------------------------------------------------------------------

b. Liability Provisions for Biogas, RNG, Biogas-Derived Renewable
Fuels, and RINs generated for RNG and Biogas-Derived Renewable Fuels
    We are finalizing as proposed liability provisions similar to the
liability provisions in other EPA fuels programs, including the
existing RFS program and the recently finalized biointermediates rule.
Specifically, we are requiring that when biogas, RNG, biogas-derived
renewable fuels, or RINs from RNG or a biogas-derived renewable fuel
are found to be in violation of regulatory requirements, the biogas
producer, the RNG producer, the biogas-derived renewable fuel producer,
and the person that generated RINs from RNG or a biogas-derived
renewable fuel will all be liable for the violation. Consequently, RIN
generators for biogas-derived renewable fuels are ultimately
responsible for ensuring that any biogas or RNG used to produce the
fuel complies with the regulations. The description of feedstocks and
processes in registration materials accepted by EPA does not constitute
a determination by EPA that the subsequent feedstocks and processes
used subsequent to the registration are consistent with the RFS
regulations. Rather it merely represents that the information provided
at registration would allow for proper RIN generation. The
responsibility of ensuring compliance with applicable requirements on a
continuing basis for biogas, RNG, and RINs generated from RNG and
biogas-derived renewable fuel rests with all parties in the biogas
disposition/generation chain.
    As noted above, this approach to liability has been used
extensively in other EPA fuels programs (e.g., the RFS program,
gasoline, and diesel programs) where it is presumed that violations
that occur at downstream locations (e.g., a retail station selling
gasoline) were caused by all parties that produced, distributed, or
carried the fuel. If upstream parties, such as RNG producers, are
concerned about downstream non-compliance, they can take advantage of
the affirmative defense provisions if all of the criteria are met.
    We note that the current RFS regulations include provisions for EPA
to take certain administrative actions in cases where a regulated party
has been found to engage in a prohibited practice under the RFS
regulations. First, under 40 CFR 80.1450(h) EPA may deactivate a
company registration in cases where a party has failed to comply with
applicable regulatory requirements. The regulations provide that EPA
will notify the party of the compliance issue, and the party has 30
days from the date of the notification to correct the issue before EPA
may deactivate the party's registration. However, in cases where the
party's actions compromise public health, public interest, or public
safety, EPA may deactivate the registration of the party without prior
notice to the party. This would likely apply in cases where a party is
found to be generating invalid or fraudulent RINs. Second, EPA may
administratively revoke an RFS QAP plan for cause. The existing
regulation at 40 CFR 80.1469(e)(4) specifies that EPA may revoke a QAP
plan ``for cause, including, but not limited to, an EPA determination
that the approved QAP has proven to be inadequate in practice.''
Furthermore, the regulation at 40 CFR 80.1469(e)(5) specifies that
``EPA may void ab initio its approval of a QAP upon the EPA's
determination that the approval was based on false information,
misleading information, or incomplete information, or if there was a
failure to fulfill, or cause to be fulfilled, any of the requirements
of the QAP.''
    Under biogas regulatory reform, these existing provisions for
administrative action will apply like they do currently under the RFS
program. We would intend to deactivate registrations in cases where
parties in the biogas disposition/generation chain have failed to meet
their regulatory requirements or when it is identified that the party
has willfully generated invalid or fraudulent RINs. The consequences of
deactivation of a party in the biogas disposition/generation chain
(i.e., a biogas producer, RNG producer, or RNG RIN separator) would
result in the prohibition of the generation of RINs from any affected
biogas, RNG, or biogas-derived renewable fuel from the party whose
registration was deactivated. Similarly, if EPA has approved a QAP plan
for a biogas-derived renewable fuel and EPA revokes the QAP plan, the
RIN generator previously under that QAP plan would not be able to
generate verified RINs for that fuel. We note that these administrative
actions would be in addition to any civil penalties. We believe that in
combination with the prohibited actions, liabilities, and provisions
for dealing with invalid RINs from biogas-derived renewable fuel being
finalized in this rule, regulated parties in the biogas disposition/
generation chain would have a strong incentive to comply with the
biogas regulatory reform provisions.
c. Affirmative Defenses
    We are finalizing as proposed that biogas producers and RNG
producers may establish affirmative defenses to certain violations if
the biogas producer or RNG producer meets all elements specified to
establish an affirmative defense. We allow for affirmative defenses in
the RFS program and in our fuel quality program under 40 CFR part 1090
in cases where a party did not cause or contribute to the violation or
financially benefit from the violation. We are allowing biogas
producers to establish an affirmative defense so long as all the
following are met:
     The biogas producer or any of the biogas producer's
employees or agents, did not cause the violation.
     The biogas producer did not know or have reason to know
that the biogas, RNG, or RINs were in violation of a prohibition or
regulatory requirement.
     The biogas producer has no financial interest in the
company that caused the violation.
     If the biogas producer self-identified the violation, the
biogas producer notified EPA within five business days of discovering
the violation.
     The biogas producer submits a written report to EPA within
30 days of discovering the violation, which includes all pertinent
supporting documentation describing the violation and demonstrating
that the applicable elements of this section were met.
     The biogas producer conducted or arranged to be conducted
a quality assurance program that includes, at a minimum, a periodic
sampling and testing program adequately designed to ensure its biogas
meets the applicable requirements to produce the biogas.
     The biogas producer had all affected biogas verified by a
third-party auditor under an approved QAP plan.
     The PTDs for the biogas indicate that the biogas was in
compliance with the applicable requirements while in the biogas
producer's control.
    For RNG producers, we are finalizing as proposed analogous
requirements to

establish an affirmative defense except that, instead of relating to
biogas producers, the elements relate to RNG producers. We believe
these elements to establish an affirmative defense will allow RNG
producers to avoid liability only in cases where they could not
reasonably be expected to know that a violation took place; for
example, if an RNG RIN separator separated RINs improperly.
    We are also finalizing as proposed that RNG producers and biogas-
derived RIN generators may not establish an affirmative defense against
violations when the RNG or biogas-derived renewable fuel, respectively,
is found to be in violation. Under the RFS program, the RIN generator
is always responsible for the validity of the RIN. As such, biogas-
derived renewable fuel RIN generators will not have the ability to
establish an affirmative defense for biogas-derived renewable fuels and
RINs generated for such fuels. We expect these parties, like all RIN
generators under the RFS program, to diligently ensure that other
parties that are part of the biogas distribution/generation chain are
meeting their regulatory requirements. Similarly, when the RNG producer
produces RNG and generates a RIN for such RNG, the RNG producer will
not be able to establish an affirmative defense for the RNG or RNG
RINs.
d. Invalid RINs
    We are finalizing as proposed provisions similar to the existing
RFS regulations to address the treatment of invalid RINs generated for
RNG and biogas-derived renewable fuels. Under biogas regulatory reform,
if a RIN generated for RNG or a biogas-derived renewable fuel is
identified as potentially invalid by any party (e.g., the RIN
generator, an independent third-party auditor, or EPA), certain
notifications and remedial actions will be required to address the
potentially invalid RIN. These provisions are necessary to ensure that
RINs represent biogas-derived renewable fuels that were produced from
renewable biomass under an EPA-approved pathway and used as
transportation fuel.
    We are also finalizing as proposed provisions that require biogas
and RNG producers to notify the next party in the biogas disposition/
generation chain if they become aware that inaccurate amounts of biogas
or RNG were transferred to that party. In addition, any person must
notify EPA within five business days of discovery if they become aware
of any biogas or RNG producers taking credit for the sale of the same
volumes of biogas/RNG to multiple downstream parties. These provisions
are necessary to help prevent the generation of invalid RINs by
ensuring that parties in the biogas disposition/generation chain are
informing all affected parties of issues when they arise.
2. Attest Engagements
    We are finalizing as proposed attest engagement provisions similar
to the attest engagement provisions in other EPA fuels programs,
including the existing RFS program and the recently finalized
biointermediates rule. These provisions are designed to ensure
compliance with the regulatory requirements, and this action simply
extends those requirements to the newly regulated parties under biogas
regulatory reform. Specifically, we are finalizing as proposed that
biogas producers, RNG producers, and RNG RIN separators separately
undergo an annual attest engagement. Annual attest engagements are
annual audits of registration information, reports, and records to
ensure compliance with regulatory requirements. Under our fuel quality
and RFS programs, we require that attest engagements be performed by an
independent third-party certified professional accountant that notifies
EPA of any discrepancies they identify in their prepared report. The
audited parties typically correct areas identified by the attest
auditor, and we review the reports for areas of concern that need to be
addressed in future actions. We have a long history of successfully
employing annual attest engagements to help ensure integrity of our
fuel quality and RFS programs, and we believe that attest engagements
are an important component of third-party oversight of biogas-derived
renewable fuels.
    Attest engagements for biogas producers involve an audit of
underlying records (including measurement records and PTDs), reports,
and registration information (including the third-party engineering
review report) for batches of biogas. These attest engagement
procedures for biogas producers help ensure that biogas is generated
from qualifying feedstocks and consistent with EPA's regulatory
requirements.
    Attest audits for RNG producers involve additional procedures that
are specific to the production and injection of RNG into the natural
gas commercial pipeline system. These provisions involve verifying that
records of the measurement of RNG injection are consistent with the
measurement requirements for RNG described in Section IX.I and
verifying that pipeline injection statements match the amount of RNG
reported by RNG producers in quarterly reports. Attest auditors must
also confirm that the correct number of RINs were generated in EMTS as
compared to the underlying records. The purpose of these new attest
engagement procedures for RNG producers is to help ensure that RNG RINs
are validly generated consistent with EPA's regulatory requirements for
RNG.
    We are also requiring specific annual attest engagement procedures
to verify RNG RIN separation. These annual attest engagement procedures
are in addition to those currently required for RINs separated under 40
CFR 80.1464. Specifically, an independent attest auditor must obtain
the underlying records for reported information regarding an RNG RIN
separator's operations and ensure that the RNG RIN separator has only
separated RNG RINs in a manner consistent with their ability to
demonstrate that RNG was used as transportation fuel. Similar to other
annual attest engagement procedures under EPA's fuels program, issues
identified by the independent attest auditor are required to be flagged
in the annual attest engagement report. These annual attest engagement
provisions are necessary to ensure that RNG RINs are only separated
when consistent with applicable regulations.
    The attest engagements for all parties under biogas regulatory
reform follow the same general requirements for other attest
engagements under EPA's other fuel programs.\291\ In their registration
information, parties must identify their independent attest auditors,
and their independent attest auditors must electronically submit annual
attest engagement reports directly to EPA using forms and procedures
prescribed by EPA. In addition, an independent auditor (i.e., a CPA
without any interest in the audited party) must conduct the audit on a
representative sample of information, prepare the annual attest
engagement report detailing any discrepancies or findings from the
audit, and submit the report to EPA by the annual June 1st deadline.
Attest engagements are appropriate for parties involved in the
generation of RINs for biogas-derived renewable fuels as they serve to
maintain consistency across the three regulated parties and serve as
valuable third-party oversight.
---------------------------------------------------------------------------

    \291\ See 40 CFR 80.1464 and 1090.1800.
---------------------------------------------------------------------------

L. RNG Used as a Feedstock

    We are finalizing as proposed provisions to address situations in
which RNG is used as a feedstock to make biogas-derived renewable fuel

other than renewable CNG/LNG. Specifically, renewable fuel producers
must retire the RINs assigned to a given volume of RNG prior to using
that volume to produce biogas-derived renewable fuels. When RNG is used
as a feedstock to produce a biogas-derived renewable fuel, the
applicable RIN generation procedures would vary depending on what fuel
is made from the RNG. For example, if a renewable fuel producer were to
use RNG as a feedstock to produce hydrogen, the renewable fuel producer
would retire any RINs assigned to the volume of RNG and then generate
new RINs for the hydrogen so long as the hydrogen met all other
applicable regulatory requirements to qualify as a renewable fuel.
    We believe this approach allows for multiple uses of RNG without
imposing strict limits on the parties that produce or distribute RNG.
By assigning RINs to the RNG injected into the natural gas commercial
pipeline system and using EMTS to track the transfer of the assigned
RINs between parties that produced the RNG and those that use the RNG,
we believe we can provide flexibility in the use of RNG while
maintaining adequate oversight. We believe requiring the RNG RINs to be
retired sufficiently mitigates concerns with possible double counting
of the RNG, i.e., a party could not generate an additional RIN or
allotment for the RNG unless any assigned RINs were first retired.
    We received a significant number of public comments that supported
allowing RNG to be used as a feedstock to produce biogas-derived
renewable fuels other than renewable CNG/LNG. However, some of these
commenters also suggested that the proposed biogas regulatory reform
provisions were not needed to allow this activity. For reasons more
thoroughly discussed in Section IX.A.4 and in the RTC document, the
biogas regulatory reform provisions are necessary to ensure that RINs
generated for biogas-derived renewable fuels are valid and to allow
biogas and RNG to be used as a biointermediate or as a feedstock,
respectively, under the RFS program. Without the biogas regulatory
reform provisions, we could not adequately oversee the program, and
without clear regulatory requirements and compliance mechanisms to
appropriately account for the production, distribution, and use of
biogas and RNG, there would be increased opportunities to double-count
biogas/RNG.

M. RNG Imports and Exports

    For imported RNG, we are maintaining, as proposed, the existing
regulatory structure of the RFS whereby either the RNG importer or the
producer of the foreign RNG may generate RINs. Under the previous
biogas provisions, approximately 10 percent of D3 RINs are generated
from imported Canadian RNG. Under this action, we are maintaining the
flexibility of allowing either the foreign renewable fuel producer (in
this case, the foreign RNG producer) or an importer of foreign RNG may
generate RINs. A difference between the new regulations and the
previous biogas provisions is that instead of any foreign party in the
biogas distribution/generation chain being allowed to generate RINs,
only a foreign RNG producer or RNG importer may generate the RIN. We do
not believe these approach changes will significantly affect which
parties currently generate RINs for Canadian RNG because to date only
the RNG importer has generated RINs.
    We note that consistent with the treatment of any foreign party
that generates RINs under the RFS program, where a foreign RNG producer
generates a RIN, that foreign producer must satisfy the additional
regulatory requirements at 40 CFR 80.1466, which include submitting to
U.S. jurisdiction, complying with inspection requirements, and posting
a bond. We also note that any foreign party that owns RNG RINs must
also meet the additional regulatory requirements for foreign RIN owners
at 40 CFR 80.1467.
    We are treating exports of RNG similarly to exports of renewable
fuel under the RFS program because like when a renewable fuel that was
exported, exported RNG would no longer be eligible for use as
transportation fuel in the covered location thereby invalidating any
RINs generated for the RNG. We have become increasingly aware that, due
to demands abroad for pipeline quality natural gas and RNG, some
parties may wish to export RNG. Under this action, since a RIN is
generated for RNG at the point of injection into a natural gas
commercial pipeline system, any party that exports the RNG outside of
the covered location incurs an exporter RVO under 40 CFR 80.1430 and is
required to satisfy that RVO by retiring the appropriate number and
type(s) of RINs.

N. Biogas/RNG Storage Prior to Registration

    We are finalizing as proposed provisions that address biogas or RNG
that is produced and stored prior to EPA's acceptance of a biogas or
RNG producer's registration submission. We proposed that biogas or RNG
may be stored on site (i.e., at a storage facility co-located at the
biogas or RNG production facility \292\) prior to EPA's acceptance of a
registration submission, provided that certain conditions are met. In
order to ensure equal treatment of all parties, we also proposed that
these storage provisions also apply to all other biointermediates and
renewable fuels under the RFS program.
---------------------------------------------------------------------------

    \292\ ``Facility'' is defined at 40 CFR 80.1401 to mean ``all of
the activities and equipment associated with the production of
renewable fuel starting from the point of delivery of feedstock
material to the point of final storage of the end product, which are
located on one property, and are under the control of the same
person (or persons under common control).''
---------------------------------------------------------------------------

    We received multiple comments on these proposed provisions. Several
commenters stated that not allowing RINs to be generated for RNG stored
off-site prior to EPA's acceptance of a registration would impose a
burden on stakeholders due to, among other things, the long amount of
time it takes EPA to process and accept registration requests In the
NPRM, we explained that we believed the streamlined registration
requirements for RNG producers should greatly decrease the time
necessary to process registrations and thus eliminate the need for
offsite storage prior to EPA acceptance of registration. After
reviewing the comments, we continue to believe this to be the case, as
discussed more fully in the RTC document. Consequently, we are
finalizing as proposed that any biogas or RNG which is produced and
stored prior to EPA's acceptance of a biogas or RNG producer's
registration submission must be stored on-site to participate in RFS.
What follows is background and detail about what we are finalizing.
    Under the RFS1 program, we issued guidance \293\ stating that
parties may assign RINs for renewable fuels that had left the renewable
fuel production facility prior to EPA acceptance of registration
because the RFS1 regulations required that RINs be assigned to
renewable fuels at the point of production but did not specifically
define what ``point of production'' meant. We took this approach under
RFS1 because the program did not require that the renewable fuel be
produced under an EPA-approved pathway (i.e., the renewable fuel
qualified by virtue of meeting the

definition of ``renewable fuel'' under the RFS1 program).
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    \293\ Questions and Answers on the Renewable Fuel Standard
Program. Page 7. https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1001T9Z.pdf.
---------------------------------------------------------------------------

    Under the RFS2 program, in general, EPA does not allow parties that
produce renewable fuels to generate RINs for renewable fuel that has
left the control of the renewable fuel producer prior to EPA acceptance
of the renewable fuel producer's registration. We have not allowed this
because of the possibility that EPA may determine that the fuel was not
produced consistently with EPA's regulatory requirements and,
therefore, may not be eligible for RIN generation. In contrast,
however, we had allowed parties to generate RINs for biogas and RNG
that was produced prior to EPA acceptance of the RIN generator's
registration and was stored offsite, provided several conditions were
met. First, the biogas/RNG must have been produced after the third-
party engineer conducted the site visit as described in 40 CFR
80.1450(b)(2). Second, the biogas/RNG must have been produced
consistent with the requirements of an EPA-approved pathway. Third, the
RIN generator must not have changed the facility after the site visit
by the third-party engineer. We had allowed this greater flexibility to
allow biogas/RNG to be stored offsite prior to registration for
pathways converting biogas to renewable CNG/LNG in large part due to
the length of time it has taken EPA to review and accept registrations
as a result of the previous registration requirements. However, this
flexibility has hindered our ability to verify the validity of RIN
generation for stored biogas/RNG. From our experience implementing
biogas pathways, allowing RNG to be stored offsite has posed challenges
when overseeing the production of RNG, since the production of RNG from
the facility would often not match the number of RINs generated. The
information used to generate the RINs was often different from the
information used to demonstrate RNG production for the month. The main
reason this information did not align under the previous biogas
provisions was likely because RNG is typically stored for an
undisclosed period of time. Because of how difficult it is to track
discrete volumes of RNG that are claimed for RIN generation, production
and use information rarely matched up, and the only way to compare RNG
production information with RNG use information was to review all of
the underlying records for every party in the entire distribution
system over the entire period, which could involve the collection and
evaluation of hundreds of thousands of records for the production,
transfer, and use of each discrete volume of biogas/RNG since the
beginning of the program, i.e., 2014. By disallowing storage prior to
registration, we can fully utilize the RIN assigned to RNG volumes to
track the production and use of RNG and eliminate the risk of
noncompliant, stored RNG generating RINs.
    As explained in Section X.H.4, as part of biogas regulatory reform
we are no longer requiring that biogas and RNG producers demonstrate
that there are contracts between each party in the biogas distribution/
generation chain in order to demonstrate transportation use. This will
streamline registration of facilities, so we believe it is no longer
appropriate to allow for RINs to be generated for biogas/RNG produced
and stored offsite of the biogas/RNG production facility prior to EPA
acceptance of the biogas and RNG producer's registrations. Also, as
discussed in Section IX.I, we are further streamlining the registration
requirements by no longer requiring RNG producers to supply COAs for
biogas and RNG at initial registration. The removal of this COA
requirement at initial registration will likely further reduce the
amount of time it will take RNG producers to be registered.
    We are, however, continuing to allow for the storage onsite of
biogas/RNG, consistent with other renewable fuels and biointermediates,
produced prior to EPA acceptance of a registration submission if
certain conditions are met. Specifically, we are allowing for storage
onsite when all of the following conditions are met:
     The stored biogas, RNG, biointermediate, or renewable fuel
was produced after an independent third-party engineer has conducted an
engineering review for the renewable fuel production or biointermediate
production facility.
     The stored biogas, RNG, biointermediate, or renewable fuel
was produced in accordance with all applicable regulatory requirements
under the RFS program.
     The biogas producer, RNG producer, biointermediate
producer, or renewable fuel producer made no change to the facility
after the independent third-party engineer completed the engineering
review.
     The stored biogas, RNG, biointermediate, or renewable fuel
was stored at the facility that produced the biogas, RNG,
biointermediate, or renewable fuel.
     The biogas producer, RNG producer, biointermediate
producer, or renewable fuel producer maintains custody and title to the
stored biogas, RNG, biointermediate, or renewable fuel until EPA
accepts the biogas or RNG producer's registration.
    These conditions are necessary for biogas/RNG to be stored onsite
prior to registration to ensure that RINs are not generated for fuels
that fail to meet the applicable Clean Air Act and regulatory
requirements for the production of renewable fuels. We believe that so
long as the biogas or RNG producer has had a third-party engineer
confirm that the facility could produce products consistent with the
applicable RFS regulatory requirements and so long as the producer does
not modify their facility, the biogas and RNG produced at these
facilities should be eligible to generate RINs. These products have to
be produced in accordance with the applicable regulatory requirements.
We are requiring that the biogas or RNG producer maintain custody of
the product because once the product has left its facility, the
producer would be less able to remedy issues with the product; this
could also result in other parties downstream becoming liable for the
product should it not meet applicable regulatory requirements. After
EPA has accepted the biogas or RNG producer's registration, the stored
products could then be used under the RFS program.

O. Single Use for Biogas Production Facilities

    To minimize program complexity and avoid the double-counting of
biogas, we are also finalizing as proposed provisions to govern the use
of biogas from a biogas production facility. Under these provisions,
biogas producers are limited to supplying biogas or treated biogas for
a single use (e.g., RNG, renewable CNG/LNG, or to produce a
biointermediate). We understand that in real-world applications there
may often not be a perfect match between biogas production capacity and
the quantity of biogas for a particular use. However, limiting biogas
from each biogas production facility to a single use serves the goals
of minimizing program complexity and safeguarding against double
counting by eliminating the opportunity for double counting in the
first place.
    We received comments asking that EPA not finalize this proposed
condition. Commenters stated that imposing such a condition would
preclude significant volumes of biogas from being used at biogas
production facilities that had projects that could supply biogas for
multiple uses under the RFS program, especially if EPA finalized the
eRINs proposal. Furthermore, some commenters

suggested that EPA's condition related to a single biogas use precluded
the use of biogas for purposes outside of the RFS program.
    While we appreciate commenters' perspectives, we have concluded
that retaining the proposed condition on single use is necessary given
the expansion of the biogas program we are also finalizing in this
rule. Allowing only a single use of biogas under the RFS program will
significantly reduce the ability for parties to double count biogas for
purposes of RIN generation under the RFS program. Were we to allow for
multiple uses from a single facility, we would need more enhanced
compliance and enforcement mechanisms than were proposed in order to
adequately oversee the additional complexity. We intend to monitor the
effects of the single use limitation on biogas production facilities
and may consider ways to permit multiple uses of biogas at a single
facility under the RFS program after we have more experience
implementing the new, expanded biogas program.
    In response to commenters concerns that we are limiting the ability
for biogas producers to supply biogas for purposes outside of the RFS,
we are clarifying that parties may use biogas for purposes outside of
the RFS program; i.e., the condition on the single use of biogas at a
biogas facility only applies to a single use under the RFS program. We
discuss related public comments and respond more thoroughly in RTC
Section 10.

P. Requirements for Parties That Own and Transact RNG RINs

    We are finalizing as proposed the requirement that parties that
solely transact assigned RNG RINs (i.e., parties that transact RNG RINs
but that do not generate or separate the RNG RINs) must comply with all
current regulatory requirements for owning and transacting RINs under
the RFS program. The sole difference is that only a party that is a
registered RNG RIN separator and has demonstrated that the RNG has been
used as renewable CNG/LNG will be allowed to separate the RNG RIN. In
other words, parties that simply transact assigned RNG RINs are not
allowed to separate RINs, and we intend to design EMTS to prevent them
from doing so. As described in more detail in Section IX.H.4, this
provision is necessary to ensure that RNG is used as transportation
fuel consistent with the CAA and applicable regulatory requirements.
    Except for the limitation on RNG RIN separation, we note that we
are not otherwise modifying the requirements for parties that own and
transact RNG RINs; we are simply highlighting how parties that solely
own and transact RNG RINs will operate in the context of the biogas
regulatory reform provisions.

X. Other Changes to Regulations

    This section describes the other regulatory changes beyond those
already discussed that we are finalizing for the fuel quality and RFS
programs. We address comments related to these regulatory changes in
RTC Section 11.

A. RFS Third-Party Oversight Enhancement

    Independent third-party auditors and engineers play critical roles
in ensuring the integrity of the RFS program.\294\ The independent
third-party engineer ensures that a renewable fuel producer's facility
can actually produce renewable fuel in accordance with the RFS
regulations and thus generate valid RINs. The independent third-party
auditor, when hired by a renewable fuel producer, verifies that the
renewable fuel produced adheres to its registered and approved
feedstocks and processes, and therefore verifies the RINs generated
under the RFS QAP.\295\ Given EPA's recent promulgation of a program
allowing renewable fuel to be produced from biointermediates,\296\ we
expect there will be an expansion in the scope and number of regulated
entities under the RFS program in the future, making third-party
verifications even more critical.
---------------------------------------------------------------------------

    \294\ We note that independent third parties serve a different
function than the third parties discussed in Section IX.C. In this
case, the independent third party must meet regulatorily specified
requirements that ensure that the independent third party will
objectively conduct verification activities under the RFS program.
Third parties that informally assist compliance by regulated parties
are not subject to those same independence requirements.
    \295\ Independent third-party engineers and auditors are
referred to separately based on their roles in the RFS program. In
order to participate in the RFS program, renewable fuel producers
must have a third-party engineering review of their facility prior
to generating RINs, and every three years thereafter. References to
third-party professional engineers in this preamble refer to the
third parties that conduct those engineering reviews. Third-party
auditors verify that the renewable fuel produced by renewable fuel
producers adheres to their registered and approved feedstocks and
processes to generated QAPed RINs. These auditors may be
professional engineers as well, but references to third-party
auditors in this preamble refer to third parties (engineers and
other types of professionals) that perform that QAP-related
function.
    \296\ 87 FR 39600 (July 1, 2022).
---------------------------------------------------------------------------

    We proposed changes to third-party verifications and submissions in
the 2016 Renewables Enhancement Growth and Support (REGS) proposed
rule; \297\ however, those proposed changes were not finalized. We re-
proposed (i.e., proposed anew) some, but not all of those changes in
conjunction with this rulemaking and are now finalizing a modified
version of those proposed changes in this action.
---------------------------------------------------------------------------

    \297\ 81 FR 80828 (November 16, 2016).
---------------------------------------------------------------------------

    As we explained in the 2016 REGS proposal, EPA has taken a number
of enforcement actions against renewable fuel producers that generated
invalid RINs, and the extent of the unlawful and fraudulent activities
associated with the RFS program, as demonstrated by these cases, is
troubling given the roles that independent third parties play in the
RFS program. Because we are concerned that independent third-party
auditors and engineers may not be sufficiently mitigating unlawful and
fraudulent activities in the RFS program to the extent needed for a
successful program, we are strengthening requirements that apply to
these entities. Consequently, we are modifying the requirements for
independent third-party auditors that use approved QAPs to audit
renewable fuel production to verify that RINs are validly generated by
the producer. The purpose of these modifications is to protect against
conflicts of interest of QAP providers by strengthening the
independence requirements for them. We are also making several changes
to the requirements for the professional engineer serving as an
independent third party conducting an engineering review for a
renewable fuel producer as part of their RFS duties in connection to a
renewable fuel producer's initial registration and subsequent
registration updates.
    The changes to the regulations that we are making fall into six
areas. First, we are strengthening the independence requirements for
third-party engineers by requiring those engineers to comply with
similar requirements to those that apply to independent third-party
auditors.
    Second, we are requiring that the third-party engineer sign an
electronic certification when submitting engineering reviews to EPA to
ensure that the third-party engineer has personally reviewed the
required facility documentation, including site visit requirements, and
that the third-party engineer meets the applicable independence
requirements. Previously, the third-party engineer signed a
certification statement within the engineering review documents. We
believe that an electronic certification at the time of submission will
help to ensure that the third-party engineer conducts their duties with
impartiality and independence.
    Third, we are requiring that third-party engineers provide
documents and

more detailed engineering review write-ups that demonstrate the
professional engineer performed the required site visit and
independently verified the information through the site visit and
independent calculations.
    Fourth, we are requiring that three-year engineering review updates
be conducted by a third-party engineer while the facility being
reviewed is producing renewable fuel. We believe that the efficacy of a
third-party engineer's review is greatly enhanced when the facility is
operating under normal conditions and not in a shut down or maintenance
posture. Conducting the engineering review while the facility is
operational will allow the third-party engineer to accurately and
completely verify the elements of the engineering review necessary to
certify to EPA that the facility is in compliance with its registration
materials.
    Fifth, we are specifying that third-party auditors must ensure that
personnel involved in third-party audits (including verification
activities) are not negotiating for future employment with the owner or
operator of the audited party. In the NPRM, we proposed to disallow a
person employed by an independent third-party auditor who is involved
in a specific activity by the auditor from accepting future employment
with the owner or operator of the audited party for a period of at
least 12 months. Several commentors opposed this prohibition and
claimed that it may deter candidates from working for an auditor due to
future job restrictions or constitute an unlawful workplace restriction
in jurisdictions that have adopted ``right to work'' laws. We agree
that the proposed prohibition can be more narrowly tailored to address
our primary concern, which is auditors negotiating for future
employment while conducting auditing activities. We believe that third-
party auditors could be unduly influenced in their QAP verification
activities if they are negotiating for future employment while
providing auditing services, and are finalizing a narrower prohibition
that only applies to auditors that are negotiating for future
employment with the audited party. This ensures the impartiality needed
in third-party auditors without restricting individuals' ability to
obtain future employment.
    Sixth, we are specifying prohibited acts and liability provisions
applicable to third-party engineers to reduce the potential of a
conflict of interest with the renewable fuel producer. These
requirements will help EPA and obligated parties better ensure that
third-party audits and engineering reviews are being correctly
conducted, provide greater accountability, and ensure that third-party
auditors and engineers maintain a proper level of independence from the
renewable fuel producer.
    Taken together, we believe these six requirements will help avoid
RIN fraud by strengthening third-party verification of renewable fuel
producers' registration information. Additional information on third-
party auditors and engineers is provided below.
1. Third-Party Auditors
    Third-party independence is critical to the success of any third-
party compliance program. We believe that the independence requirements
applicable to third-party auditors in the RFS program should be
clarified and strengthened to further minimize (and hopefully
eliminate) any conflicts of interest between auditors and renewable
fuel producers that might lead to improper RIN validation. We are
clarifying the prohibition against an appearance of a conflict of
interest to include:
     Acting impartially when performing all auditing
activities.
     Prohibiting independent third-party auditors that were
involved in the design or construction of a facility from auditing that
facility.
     Prohibiting a person employed by an independent third-
party auditor who is negotiating for future employment with the owner
or operator of the audited party from participating in that audit.
    These provisions are intended to prevent, among other things,
third-party auditors that were involved in the design of a facility or
who are negotiating for employment with the audited party from
conducting QAP verification activities. In both instances, we believe
that third-party auditors could be unduly influenced in their QAP
verification activities as a result.
    In the 2023-2025 NPRM, we proposed to prohibit third parties that
offered QAP services from offering other business services to audited
parties for a period of at least one year. One commentor stated that
this prohibition was overreaching and would stifle the ability of large
firms to provide QAP services because large firms often provide other
services not associated with the design of the facility or the RFS
program (e.g., tax services), which would discourage large firms from
providing QAP services. As discussed in RTC Section 11.1, we appreciate
the commenter's concern and, therefore, are finalizing a narrower
prohibition that only applies to third parties that were involved in
the design or construction of the audited facility. This achieves the
goal of the proposed provision without unnecessarily limiting the pool
of third parties who can qualify as third-party auditors.
2. Third-Party Engineers
    Engineering reviews from independent third-party engineers are
integral to the successful implementation of the RFS program. Not only
do they ensure that RINs are properly categorized, but they also
provide a check against fraudulent RIN generation. As we have designed
our registration system to accommodate the association between third-
party auditors and renewable fuel producers to implement the RFS QAP,
we have realized that both the way engineering reviews are conducted
and the nature of the relationships among the third-party engineers,
affiliates, and renewable fuel producers are analogous to third-party
auditors and renewable fuel producers. As a result, we are
strengthening the independence requirements for third-party engineers
by requiring those engineers to comply with requirements similar to
those that apply to independent third-party auditors.
    We are also improving the RFS registration requirements for three-
year engineering review updates by requiring site visits to take place
when the facility is producing renewable fuel. This will provide the
regulated community and EPA with greater confidence in the production
capabilities of the renewable fuel facility. Since the adoption of the
RFS2 requirements in 2010, most engineering reviews have been conducted
by a handful of third-party engineers. Some of these engineers are
using templates that make it difficult for EPA to determine whether
registration information was verified.
    We are concerned that, in some instances, the third-party engineers
are relying too heavily on information provided by the renewable fuel
producers, and not conducting a truly independent verification. In
order to provide greater confidence in third-party engineering reviews,
we are requiring that the engineering review submission include
evidence of a site visit while the facility is producing the renewable
fuel that it is registered to produce. We are also incorporating EPA's
current interpretation and guidance into the regulations regarding
actions that third-party engineers must take to verify information in
the renewable fuel producer's registration application. The amendments
explain that in order to verify the applicable registration
information, the third-party

auditor must independently evaluate and confirm the information and
cannot rely on representations made by the renewable fuel producer. We
are also requiring that the third-party engineer electronically
certifies that the third-party meets the independence requirements
whenever the third-party submits engineering reviews or engineering
review updates to EPA. Previously, the third-party engineer signed a
certification statement within the engineering review documents.
Requiring the certification to be signed at the time of submission will
remind the third-party engineer of the independence requirements prior
to submitting the engineering reviews.
    We believe these amendments will help provide greater assurance
that third-party engineering reviews are based upon independent
verification of the required registration information in 40 CFR
80.1450, helping to provide enhanced assurance of the integrity of the
registration materials submitted by the facility, as well as the
renewable fuel they produce.
    Finally, we are specifying prohibited activities for third-party
engineers failing to properly conduct an engineering review, or failing
to disclose to EPA any financial, professional, business, or other
interest with parties for whom the third-party engineer provides
services for under the RFS registration requirements. Based on its
review of RFS registrations, EPA has concerns that third-party
engineers may not be appropriately conducting engineering reviews
consistent with EPA's intent because they may not meet the requirements
for independence to qualify as a third party. We believe that making
third-party engineers more accountable for properly conducting
engineering reviews under the regulations and requiring that they
interact more directly with EPA will help us to identify potential
conflicts of interest and to bring enforcement actions should an issue
arise.
    During discussions with stakeholders after publication of the NPRM,
some parties suggested that EPA delay the implementation date for the
enhancements to third-party oversight because third-party engineers
will have already conducted three-year engineering site visits for
facilities prior to the effective date of the rule that are due January
31, 2024, and it was unclear how these new changes would affect
previously conducted site visits by independent third-party engineers
that are due January 31, 2024. To address these concerns, we are
specifying that the new requirements for independent third-party
engineers and for engineering reviews will begin on February 1, 2024. A
February 1, 2024, implementation date will ensure that three-year
engineering reviews conducted to meet the January 31, 2024, deadline
are not impacted by the new regulatory requirements avoiding
duplicative effort on the part of independent third-party engineers.

B. Deadline for Third-Party Engineering Reviews for Three-Year Updates

    We are finalizing with modification our proposal that third-party
engineers conduct engineering review site visits no sooner than July 1
of the calendar year prior to the January 31 deadline for three-year
registration updates. In response to public comments, we are also
finalizing additional flexibility that will allow parties to reset
their three-year update due date if they comply with the three-year
update requirement before it was due. We believe this flexibility will
allow parties to simultaneously comply with the RFS program and CARB's
LCFS verification requirements. Finally, in response to public comments
requesting more time to comply with the new requirements, we are
finalizing that the new deadline for engineering review site visits
will begin after the 2023 three-year registration update deadline
(i.e., after January 31, 2024) to minimize the impact on those parties
that may have already arranged for engineering review site visits under
the previous regulatory requirements.
    Previously, renewable fuel producers were required to have a third-
party engineer conduct an updated engineering review three years after
initial registration. The regulations stated that the three-year
engineering review reports were due by January 31 three years after the
first year of registration. However, the regulations did not specify
when the third-party engineer must conduct the site visit. We received
several inquiries from renewable fuel producers and third-party
engineers concerning when the third-party engineer must conduct the
site visit ahead of the January 31 deadline. We originally published
guidance that stated that the site visits for three-year updates should
occur no later than 120 days prior to the January 31 deadline. Due to
extenuating circumstances, we have on a case-by-case basis allowed for
site visits to occur up to a full calendar year prior to the deadline.
    However, we continue to have concerns that third-party engineers
are conducting site visits well ahead of the January 31 deadline and
that the renewable fuel production facilities they visited may have
undergone significant alteration between the time of the site visit and
the time that the third-party engineering review report is due. To
address our concern, we are requiring that the site visit occur no
sooner than July 1 of the preceding calendar year. We believe that this
amount of time will provide third-party engineers enough time (seven
months) to conduct site visits and prepare and submit engineering
review reports to EPA without the site visit becoming out-of-date. We
believe this additional time is reasonable as the number of facilities
that require three-year updates has increased.
    We are also specifying which batches of RINs should be included in
the VRIN calculation portion of the three-year registration
update. Under this provision, third-party engineers must select from
batches of renewable fuel produced through at least the second quarter
of the calendar year prior to the applicable January 31 deadline for
VRIN calculations. We believe this is necessary because some
third-party engineers conduct VRIN calculations for
facilities' RIN generation materials that only cover two years.
Furthermore, we have noticed that the period from which batches are
selected for VRIN calculations can vary significantly across
third-party engineers and we want to ensure that this portion of the
engineering review update is conducted consistently.
    We received comments suggesting that we should accept engineering
reviews with site visits that occurred within 12 months of the
deadline, in part to align with California's verification requirements
under their LCFS program. While we appreciate commenters' concerns that
there may be overlapping verification requirements for the RFS program
and California's LCFS, we note that most renewable fuel producers under
the RFS program do not participate in California's program. However, in
order to allow parties to utilize a single site visit for both
programs, the final rule allows parties to reset their three-year
updates, as long as they have complied with the regulatory requirements
before the three-year update is due. This would have the added benefit
of allowing a party that needed to undergo a new engineering review as
required under 40 CFR 80.1450(d)(1) to use that new engineering review
to fulfil their three-year engineering review update (assuming all
applicable requirements for the three-year update are met).
    Several commenters suggested that we postpone the implementation
date for these provisions to avoid parties having

to redo their three-year updates and engineering reviews because the
regulatory requirements changed in the middle of a three-year update
cycle. We agree with commenters' concerns and note that it was not our
intent to require parties to comply with two sets of regulatory
requirements for the same three-year update. Therefore, to address
commenters' concerns and clarify our intent, we are requiring that the
new deadline for three-year update site visits and VRIN requirements
begins after the conclusion of the compliance year 2023 three-year
update deadline (i.e., February 1, 2024). We believe this
implementation date will minimize the effects of these changes on
parties that have already started complying with previous three-year
update requirements and will allow for a smooth transition.

C. RIN Apportionment in Anaerobic Digesters

    In the Pathways II rule, we created a pathway to allow D3 RINs to
be generated for renewable CNG/LNG produced from biogas from digester
types that process only predominately cellulosic \298\ feedstocks
(i.e., municipal wastewater treatment facility digesters, agricultural
digesters, and separated MSW digesters), as well as from the cellulosic
components of biomass processed in other waste digesters.\299\ We also
created a renewable CNG/LNG pathway to allow for D5 RINs to be
generated for biogas produced from other waste digesters.\300\ If a
party simultaneously converts a predominately cellulosic feedstock and
a non-predominantly cellulosic feedstock in a waste digester, it must
apportion the resulting RINs under the appropriate D3 and D5 pathways
accordingly. To support this calculation, we required parties to
calculate the cellulosic converted fraction (i.e., the portion of a
cellulosic feedstock that is converted into renewable fuel) based on
measurements of cellulose obtained using a method that produces
reasonably accurate results. For a heterogeneous feedstock such as
separated food waste--which may be simultaneously converted with
cellulosic feedstocks in waste digesters--the cellulosic content can
vary widely between batches, making it very difficult for renewable
fuel producers to determine the cellulosic content of the feedstock
with any degree of accuracy.
---------------------------------------------------------------------------

    \298\ A predominately cellulosic feedstock is a feedstock with
an adjusted cellulosic content of greater than 75 percent.
    \299\ See row Q in Table 1 to 40 CRF 80.1426; 79 FR 42168 (July
18, 2014). D3 RINs may also be generated for renewable CNG/LNG
produced from biogas from landfills--the landfill biogas pathway is
not implicated by these changes.
    \300\ See row T in Table 1 to 40 CFR 80.1426; 79 FR 42168 (July
18, 2014). This pathway must be used if the feedstock being
processed in a digester is not predominantly cellulosic.
---------------------------------------------------------------------------

    Since the Pathways II rule was finalized, stakeholders have
inquired how to apportion RINs in the specific case wherein feedstocks
that are not predominantly cellulosic--specifically, separated food
waste--are simultaneously converted with predominantly cellulosic
feedstocks into biogas in a digester.\301\ EPA's previous registration
and RIN apportionment equations were designed assuming that the
converted fractions of the cellulosic and non-cellulosic feedstocks
could be accurately determined through chemical testing. However,
apportioning RINs for biogas produced from co-processed feedstocks is
distinct from apportioning RINs for other co-processed cellulosic and
non-cellulosic feedstocks (e.g., corn kernel fiber co-processed with
corn starch). In the NPRM, we explained that some of the existing
requirements are unnecessary or otherwise inappropriate for these
circumstances and that there are features of co-processing in a
digester that make it reasonable to consider a different regulatory
approach to RIN apportionment. The feedstocks in question are generated
as physically separate streams such that the mass, moisture content,
and methane production potential of each feedstock can be determined
before mixing, a possibility that was not contemplated by the previous
apportionment equations. Further, we understand that parties interested
in co-processing predominantly cellulosic feedstocks with separated
food waste are not planning on claiming any credit for the cellulosic
components of the food waste due to challenges accurately measuring
cellulosic content of the variable food waste feedstock, which means
that chemical analysis of the cellulosic content of the food waste
feedstock and digestate is not required. Another factor that reduces
the risk of D3 RINs being generated from non-cellulosic feedstock is
that mixing of non-cellulosic food waste in anaerobic digestion does
not lead to a decrease in biogas production relative to when the
feedstocks are processed separately,\302\ so the biogas production from
the cellulosic feedstock processed alone provides an accurate or
conservative estimate of the same feedstock's biogas production when
mixed with non-cellulosic feedstocks.
---------------------------------------------------------------------------

    \301\ See Byron Bunker (EPA), ``Reply to American Biogas Council
on the Treatment of Agricultural Digesters under the Renewable Fuel
Standard (RFS) Program,'' March 15, 2017.
    \302\ Karki et al. Bioresource Technology 330 (2021) 125001.
DOI: 10.1016/j.biortech.2021.125001.
---------------------------------------------------------------------------

    In this action we are finalizing as proposed specific equations to
determine feedstock energy for when predominantly cellulosic and non-
predominantly cellulosic feedstocks are simultaneously converted in
anaerobic digesters. We have made slight technical adjustments to these
equations and changed their location relative to what was proposed to
address commenter concerns. The cellulosic feedstock energy equation is
similar to the existing, broader equations, with a few modifications.
The new equation uses a volatile solids measurement since non-volatile
solids do not generally produce biogas, increasing the accuracy over
the existing equation. For calculating total solids and volatile
solids, we are requiring the use of American Public Health Association
method number 2540, which is already used by the wastewater treatment
industry in their operations of anaerobic digesters. The non-
predominantly cellulosic biogas is the difference between total biogas
produced and cellulosic biogas as calculated by the cellulosic
feedstock apportionment equation. We believe these equations will
ensure that cellulosic RINs are only generated for predominately
cellulosic feedstocks because they make a conservative assumption of
the cellulosic biogas production and ensure that the biogas produced
from non-predominantly cellulosic feedstocks generates entirely non-
cellulosic RINs. Along with this updated equation, we are requiring
biogas producers to keep records of feedstocks necessary to verify
apportionment calculations.
    To support this apportionment, we are finalizing that at
registration biogas producers provide the converted fraction of the
predominantly cellulosic feedstock used in an anerobic digester when it
is simultaneously converted with a non-predominantly cellulosic
feedstock as well as relevant supporting data. Instead of chemical data
supporting a cellulosic converted fraction as required under the
existing regulations, which will continue to apply for situations other
than anaerobic digesters, we are requiring that, at registration, a
facility producing biogas from anaerobic digestion either choose a
predetermined, conservative value for converted fraction (explained in
more detail below) or provide the following:
     Operational data showing the biogas yield from digesters
which process solely the cellulosic feedstock(s) and which operate
under similar conditions as the digesters addressed in the
registration.

     A description including any calculations demonstrating how
the data were used to determine the cellulosic converted fraction.
     The cellulosic converted fraction that will be used in the
RIN apportionment.
    Operational data used to determine the cellulosic converted
fraction will necessarily be obtained at a particular range of
temperatures, pressures, residence times, feedstock composition, and
other process variables. Since biogas production can change based on
processing conditions, we are requiring a registrant to identify the
conditions in its registration under which the facility will need to
operate to properly apportion RINs. In specifying those processing
conditions, we are requiring parties to place limitations on a
combination of temperature, amount of each cellulosic feedstock source,
solids retention time, hydraulic retention time, or other processing
conditions established at registration which may impact the conversion
of the predominantly cellulosic feedstock. These limitations must be
based on the data used to derive the cellulosic converted fraction so
that when it is simultaneously converting multiple feedstocks, the
facility is operating under conditions essentially the same as those
for the digesters from which the cellulosic converted fraction was
derived. For example, a registrant that calculates a cellulosic
converted fraction from historical data of a given digester processing
a single type of cellulosic feedstock could use that historical
operational data to identify the limitations on temperature, residence
times, and other operational variables such that the converted fraction
remains valid.
    As an alternative to specifying operational data, we are allowing
registrants to select a standard converted fraction value specified in
the regulations for the specific cellulosic feedstock which they are
simultaneously converting with a non-predominantly cellulosic feedstock
in anaerobic digesters. We are providing specific standard values for
four cellulosic feedstocks (bovine manure, chicken manure, swine
manure, and WWTP sludge), which are 50 percent of the measured
biochemical methane potential (BMP) obtained from published
literature.\303\ BMP typically results in a higher converted fraction
than when the same feedstock is processed in industrial scale
digesters. One study that looked at two digesters over the course of
less than a year identified sustained periods where full scale
digesters produced over 30 percent less methane than predicted by BMP
and recommended that designers of digestion systems should assume 10-20
percent lower methane production in full scale digesters than from
BMP.\304\ Given the limited types of feedstocks, the limited number of
digesters evaluated in this study, and the different goals behind the
recommendations,\305\ we chose a more conservative estimate of 50
percent lower methane production and added specific processing
requirements to ensure that D3 RINs generated meet the statutory
goal.\306\ In the NPRM, we requested comments for other default values
of converted fractions. We received multiple comments suggesting that
EPA use a conservative default value for cellulosic converted fraction
that is 80% of the biomethane potential instead of 50% of the
biomethane potential which we proposed. However, as discussed in more
detail in the RTC document, the commenters did not provide necessary
detail or representative data to justify a higher value, nor did they
explain why the higher value was necessary given the ability to submit
operational data at registration to establish a higher value. Given
these factors, we are finalizing as proposed that the conservative
estimates are 50 percent of the biomethane potential. Additionally, one
commenter identified a discrepancy between higher heating and lower
heating values, and we have corrected the default cellulosic converted
fraction to use higher heating values, consistent with the equations in
which the value is used.
---------------------------------------------------------------------------

    \303\ Dairy manure value comes from Labatut et al. (2011)
Bioresource Technology, 102, p. 2255-2264. DOI: 10.1016/
j.biortech.2010.10.035. Swine manure data comes from Vedrenne et al.
(2008) Bioresource Technology, 99, p. 146-155. DOI: 10.1016/
j.biortech.2006.11.043. Chicken manure data comes from Li et al.
(2013) Applied Biochemistry Biotechnology 171, p. 117-127. DOI:
10.1007/s12010-013-0335-7. Municipal sludge data comes from Holliger
et al. (2017) Frontiers in Energy Research, 5, 12. DOI: 10.3389/
fenrg.2017.00012. Values were converted using the ideal gas law at
the stated or inferred conditions and 21,496 Btu lower heating value
methane per lb methane.
    \304\ Holliger et al. (2017) Frontiers in Energy Research, 5,
12. DOI: 10.3389/fenrg.2017.00012.
    \305\ When designing a gas treatment system, one may use a
slight overestimate of biogas production to maximize RNG production.
Overestimating is less of a problem in designing a gas treatment
system than it is in the RFS program, since overestimating
production of biogas will lead to invalidly generated RINs.
    \306\ See memo ``Final calculation of cellulosic converted
fraction values from biochemical methane potential,'' available in
the docket for this action.
---------------------------------------------------------------------------

    As with other biogas, biogas produced from simultaneously
converting predominantly cellulosic and non-predominantly cellulosic
feedstocks is also eligible to be used as renewable CNG/LNG; a
biointermediate; or other renewable fuel. We are requiring that the
different D-codes be tracked through PTDs from biogas producers and RNG
producers, as well as reporting of D-code information into EMTS. Under
this approach, biogas producers will specify the proportion of biogas
by D-code on their PTDs. The parties using the biogas to generate RINs
for RNG (as discussed in Section IX) will use this proportion to
calculate the appropriate number of D3 and D5 RINs.

D. BBD Conversion Factor for Percentage Standard

    In the 2020-2022 proposed rule, we proposed a change to the
conversion factor used in the calculation of applicable percentage
standards for BBD.\307\ We did not finalize that proposed change in the
2020-2022 final rule. We are now finalizing that change to be
implemented for compliance years 2023 and beyond, and we are including
data from 2022 in the determination of the appropriate revised
conversion factor.
---------------------------------------------------------------------------

    \307\ 86 FR 72474 (December 21, 2021).
---------------------------------------------------------------------------

    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.\308\ 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.
---------------------------------------------------------------------------

    \308\ See 75 FR 14670, 14682 (March 26, 2010).
---------------------------------------------------------------------------

    When we established the formula for calculating the applicable
percentage standards for BBD in 2010, the formula 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 (EqV) for biodiesel, 1.5, as discussed in
the 2007

RFS1 final rule.\309\ The resulting formula \310\ (incorporating the
recent modification to the definitions of GEi and
DEi) \311\ is shown below:
---------------------------------------------------------------------------

    \309\ See 72 FR 23900, 23921 at Table III.B.4-1 (May 1, 2007).
    \310\ See 40 CFR 80.1405(c).
    \311\ See 85 FR 7016 (February 6, 2020).
    [GRAPHIC] [TIFF OMITTED] TR12JY23.004

---------------------------------------------------------------------------
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 percentage standard formula
for BBD was first promulgated, advanced renewable diesel production has
grown. Most renewable diesel has an EqV of 1.7, and its growing
presence in the BBD pool means that the average EqV of BBD has also
grown.\312\
---------------------------------------------------------------------------

    \312\ Under 40 CFR 80.1415(b)(4), renewable diesel with a lower
heating value of at least 123,500 Btu/gallon is assigned an EqV of
1.7. A minority of renewable diesel has a lower heating value below
123,500 BTU/gallon and is therefore assigned an EqV of 1.5 or 1.6
based on applications submitted under 40 CFR 80.1415(c)(2).
[GRAPHIC] [TIFF OMITTED] TR12JY23.005

    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 two 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 is appropriate to modify the
factor used in the formula to more accurately reflect the amount of
renewable diesel in the BBD pool.
    The average EqV of BBD appears to have grown over time without
stabilizing. This trend has continued and is consistent with the growth
in facilities producing renewable diesel.\313\ We proposed to replace
the factor of 1.5 in the percentage standard formula for BBD with a
factor of 1.57 based on the average EqV for BBD in 2021, while also

noting that ``we believe that the factor used in the formula for
calculating the percentage standard for BBD should be at least 1.57.''
\314\ Commenters were generally supportive of this change, with some
suggesting the factor should be higher than proposed, and others
suggesting we should be open to revisiting this factor again in the
future as renewable diesel production increases. Based on the updated
data for 2022 shown in Figure X.D-1 showing an average EqV for BBD of
1.59 in 2022, we now believe that the factor used in the formula for
calculating the percentage standard for BBD should be at least 1.59.
However, we also believe that maintaining consistency with the rounding
protocol adopted for EqVs in 2007 is important. As described in the
RFS1 rule, all EqVs are rounded to the first decimal place.\315\
Applying that rounding protocol here results in factor of 1.6. This is
slightly higher than the proposed value of 1.57, but is more consistent
with the additional data for 2022 and application of the aforementioned
rounding protocol. We are therefore replacing the factor of 1.5 in the
percentage standard formula for BBD with a factor of 1.6.\316\ Note
that we are not changing any other aspect of the percentage standard
formula for BBD.
---------------------------------------------------------------------------

    \313\ See RIA Chapter 5.2.
    \314\ 87 FR 80582, 80686 (December 30, 2022).
    \315\ 72 FR 23921, May 1, 2007.
    \316\ While we are revising the factor of 1.5 in the percentage
standard formula for BBD, we have included all four of the
percentage standard formulas in our 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
modifying any aspect of these formulas beyond the change to the
factor of 1.5 in the BBD formula.
---------------------------------------------------------------------------

E. Flexibility for RIN Generation

    We are revising 40 CFR 80.1426 to simplify and clarify the
requirement that renewable fuel producers and importers may only
generate RINs if they meet all applicable requirements under the RFS
program for the generation of RINs. The regulations EPA promulgated in
the 2010 RFS2 final rule at 40 CFR 80.1426(a)(1), (a)(2), and (b)
state, in part, that renewable fuel producers ``must'' generate RINs if
they meet certain requirements, and 40 CFR 80.1426(c), in turn,
prohibits the generation of RINs if a renewable fuel producer cannot
demonstrate that they meet the requirements in 40 CFR 80.1426(a)(1),
(a)(2), and (b). That rule retained the word ``must'' from the RFS1
regulations but also made it clear that parties cannot generate RINs
for biofuel if the feedstock used to produce that biofuel does not
satisfy the renewable biomass requirements or if the renewable fuel
producer has not met all other applicable requirements, including
registration, reporting, and recordkeeping requirements.\317\ EPA's
longstanding interpretation of these regulatory requirements is that
renewable fuel producers that do not want to generate RINs can choose
to not register, keep records, or report to EPA. In light of this
approach, we have determined that a more straightforward approach will
be to revise the regulations to allow, rather than require, RINs to be
generated for qualifying renewable fuel. Thus, we are revising 40 CFR
80.1426(a)(1), (a)(2) and (b) to state that RINs ``may only'' be
generated if certain requirements are met. We are also removing the
provisions for small volume renewable fuel producers at 40 CFR
80.1426(c)(2), (c)(3), and 40 CFR 80.1455 because those provisions are
no longer necessary. If any renewable fuel producer, regardless of
size, has the ability to choose to generate RINs, then there is no
longer a need to provide flexibility for small producers because they
will only choose to generate RINs if it were economically beneficial to
do so.
---------------------------------------------------------------------------

    \317\ 40 CFR 80.1426(a)(1)(iii).
---------------------------------------------------------------------------

F. Changes to Tables in 40 CFR 80.1426

    We are making changes to Tables 1 through 4 to 40 CFR 80.1426 in
order to conform with current guidelines from the Office of Federal
Register (OFR).\318\ These tables were designated to 40 CFR 80.1426 and
we refer to them as ``Table 1 to 40 CFR 80.1426,'' ``Table 2 to 40 CFR
80.1426,'' etc. Under OFR's guidelines, this way of referring to the
tables meant that they should be located at the very end of 40 CFR
80.1426. However, Tables 1 and 2 were located after 40 CFR
80.1426(f)(1)(vi), Table 3 was located in 40 CFR 80.1426(f)(3)(v), and
Table 4 was located in 40 CFR 80.1426(f)(3)(vi)(A).
---------------------------------------------------------------------------

    \318\ Office of the Federal Register, National Archives and
Records Administration, ``Document Drafting Handbook,'' August 2018
Edition (Revision 1.4), January 7, 2022.
---------------------------------------------------------------------------

    In order to conform with OFR's guidelines, we are moving Tables 1
and 2 to the end of 40 CFR 80.1426, consistent with their current
designation. Since we are not changing the designations or contents of
these tables as part of this move, all of the existing references to
these tables throughout 40 CFR part 80, subpart M, as well as all
references in existing EPA actions and documents (including Federal
Register notices, guidance documents, and adjudications) will remain
accurate and valid. In contrast, for Tables 3 and 4, we are creating
new provisions within the regulations into which we are moving and
consolidating the formulas in these tables. Specifically, we are moving
and consolidating the five formulas previously in Table 3 into 40 CFR
80.1426(f)(3)(v), and moving and consolidating the five formulas
previously in Table 4 into 40 CFR 80.1426(f)(3)(vi)(A). The formulas
themselves remain unchanged and since there are no other references to
these tables outside of the paragraphs in which they were located, no
additional revisions are necessary to implement this change.

G. Prohibition on RIN Generation for Fuels Not Used in the Covered
Location

    We are revising 40 CFR 80.1426(c) and 40 CFR 80.1431 to reiterate
that parties (e.g., foreign RIN-generating renewable fuel producers and
importers) cannot generate RINs for renewable fuel unless it was
produced for use in the covered location. The CAA and RFS regulations
already limit RIN generation to renewable fuel produced for use in the
United States, and these amendments are intended to address any
potential confusion on the part of stakeholders. The amendments specify
that RINs cannot be generated for renewable fuel that is not produced
for use in in the covered location and make such RINs invalid. We note
that it is a prohibited activity under 40 CFR 80.1460(b)(2) to generate
or transfer invalid RINs, and this revision reinforces that generating
RINs for fuel not produced for use in the covered location is a
prohibited activity.

H. Separated Food Waste Recordkeeping Requirements

    Under the CAA, qualifying renewable fuel must be produced from
renewable biomass.\319\ To ensure that RIN-generating renewable fuels
satisfy this requirement, RFS regulations contain, among other things,
recordkeeping provisions that require renewable fuel producers to
``keep documents associated with feedstock purchases and transfers that
identify where the feedstocks were produced and are sufficient to
verify that feedstocks used are renewable biomass if RINs are
generated.'' \320\ In addition to the generally applicable
requirements, the RFS regulations also contain provisions for specific
types of feedstocks where necessary to ensure that their use is
consistent with the statutory and regulatory definitions of renewable
biomass.
---------------------------------------------------------------------------

    \319\ CAA section 211(o)(1)(J).
    \320\ 40 CFR 80.1454(d).

---------------------------------------------------------------------------

    One such set of feedstock-specific requirements exists for
separated food waste used to produce renewable fuel. In 2010, EPA
promulgated a requirement that renewable fuel producers using separated
food waste submit, at the time of their registration with EPA to
generate RINs: (1) The location of any facility from which the waste
stream consisting solely of separated food waste is collected; and (2)
A separated food waste plan.\321\ However, an unintended effect of
requiring renewable fuel producers to submit the locations of the
facilities from which separated food waste was collected as part of
their facility registration was that producers were required to update
their information with EPA every time their feedstock suppliers
changed. EPA recognized this could be burdensome for producers and, in
2016, proposed to revise the regulations to remove this provision as a
registration requirement and to simply rely on the corresponding
recordkeeping requirement.\322\ At that time, we noted that renewable
fuel producers were also required to retain this information under the
recordkeeping requirements under 40 CFR 80.1454.\323\
---------------------------------------------------------------------------

    \321\ 40 CFR 80.1450(b)(1)(vii)(B).
    \322\ 81 FR 80828, 80902-03 (November 16, 2016).
    \323\ Id. (``The recordkeeping section of the regulations
requires renewable fuel producers to keep documents associated with
feedstock purchases and transfers that identify where the feedstocks
were produced and are sufficient to verify that the feedstocks meet
the definition of renewable biomass.'').
---------------------------------------------------------------------------

    In 2020, we finalized the removal of this registration requirement
and also reiterated that, pursuant to the existing recordkeeping
provisions at 40 CFR 80.1454(d), renewable fuel producers were still
required to ``keep documents associated with feedstock purchases and
transfers that identify where the feedstocks were produced; these
documents must be sufficient to verify that the feedstocks meet the
definition of renewable biomass.'' \324\ To emphasize that this
requirement remained in the regulations in light of removing the
corresponding registration requirement, we also promulgated a provision
at 40 CFR 80.1454(j)(1)(ii) requiring renewable fuel producers to keep
documents demonstrating the location of any establishment from which
the separated food waste stream is collected.
---------------------------------------------------------------------------

    \324\ 85 FR 7016, 7062 (February 6, 2020).
---------------------------------------------------------------------------

    The Clean Fuels Alliance America challenged EPA's promulgation of
the separated food waste recordkeeping provision at 40 CFR
80.1454(j)(1)(ii). Petitioners alleged the requirement that renewable
fuel producers keep records demonstrating the location of any
establishment from which separated food waste is collected is arbitrary
and capricious and that renewable fuel producers ``had no opportunity
to comment because EPA failed to mention this new recordkeeping
requirement in the proposed rule.'' \325\
---------------------------------------------------------------------------

    \325\ RFS Power Coalition v. U.S. EPA, No. 20-1046 (D.C. Cir.),
Doc. # 1882940 at 38-39, filed Jan. 29, 2021.
---------------------------------------------------------------------------

    In the proposal for this action, we emphasized that 40 CFR
80.1454(d), which was introduced in 2010, requires renewable fuel
producers to keep records associated with feedstock purchases and
transfers that identify where the feedstocks were produced and are
sufficient to verify that feedstocks used are renewable biomass.
However, recognizing that affected stakeholders may have had
suggestions for how to better apply this requirement specifically to
separated food waste feedstocks, we sought comment on the separated
food waste-specific recordkeeping requirement in 40 CFR
80.1454(j)(1)(ii).\326\ In particular, we sought comment on how
renewable fuel producers using separated food waste as feedstocks could
best implement, in a manner consistent with standard business practices
within the industry, the requirement to keep records demonstrating
where their feedstocks were produced and that the records would be
sufficient to verify that the feedstocks meet the definition of
renewable biomass. Based on previous discussions with third party
feedstock suppliers, independent auditors, and renewable fuel producers
we did not propose to modify the provisions of 40 CFR 80.1454. After
review and consideration of the comments received on this action, we
are not finalizing any of the modifications to the language from those
comments. However, we are finalizing the alternative approach that we
did propose with modifications based on the comments we received as
described below.
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    \326\ We are not reopening the requirement at 40 CFR 80.1454(d).
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    We understand there is a desire for independent auditors to play a
role in satisfying the requirement that renewable fuel producers keep
records demonstrating the location of any establishment from which
separate food waste is collected. Specifically, stakeholders have
requested that, rather than renewable fuel producers holding the
records themselves, independent auditors be allowed to verify the
records directly from the feedstock aggregator. While the regulations
require the renewable fuel producer to keep the records on the
feedstock source and amount as specified under 40 CFR 80.1454(j), as
further explained below, we are providing an option to allow
independent auditors to verify records held by the feedstock aggregator
by leveraging the biointermediates provisions of the RFS program. While
most interest in this provision centers around used cooking oil
collection, we believe this option can also be useful to third-party
collectors of separated yard waste, separated food waste, and separated
municipal solid waste.
    Under the new option, instead of the renewable fuel producers
holding records demonstrating that the feedstock used to produce
renewable fuel is renewable biomass, feedstock aggregators may hold
them provided that alternative regulatory requirements for the
renewable fuel producer and feedstock aggregator are met. The
alternative requirements needed to be met are summarized as follows:
     The feedstock aggregator will need to register with EPA
and must keep all applicable records of feedstock collection.
     The renewable fuel producer will need to participate in
the QAP program.
     PTDs will need to be supplied to the transferee for
feedstocks after leaving the feedstock aggregator that include the
volume, date, location at time of transfer, and transferor and
transferee information.
    The feedstock aggregator and the renewable fuel producer that
processes those feedstocks will also be subject to the same liability
provisions that apply to biointermediate producers and renewable fuel
producers that process biointermediates. We note that under the RFS
program, other than the limited alternative that we are finalizing in
this action, renewable fuel producers must keep records to demonstrate
that their renewable fuels are produced from renewable biomass as
specified under 40 CFR 80.1454, as applicable. We are finalizing the
alternative approach to address the specific circumstance where it is
impractical for renewable fuel producers to provide the records
specified under the recordkeeping requirements. We also note that if
the records do not demonstrate the feedstock is renewable biomass, then
the recordkeeping requirement is not met regardless of who is holding
the records.
    We received comments that having both the renewable fuel producer
and feedstock aggregator be subject to QAP would be overly burdensome.
We did not intend to have the feedstock aggregator directly participate
in the QAP program like a biointermediate

producer as proposed in the NRPM, and we recognize that imposing direct
participation of the feedstock aggregator could significantly increase
the burden associated with the proposed option on feedstock
aggregators. Based on these comments, we are requiring that only the
renewable fuel producer needs to participate in the QAP program
(instead of the proposed requirement to have the aggregator also
participate). To ensure adequate oversight, we are also requiring that
the QAP plan include a description of how the third-party auditor will
audit each feedstock aggregator.
    We also received comments asking for clarity regarding which
obligations apply to feedstock suppliers versus feedstock aggregators.
We intended the regulations to cover feedstock aggregators, not
feedstock suppliers. We have clarified this in the regulations by
updating the language and adding new definitions for feedstock
aggregator and feedstock supplier.
    Some commenters inquired about third parties holding records on
behalf of the feedstock renewable fuel producer.\327\ Under EPA's fuels
programs, which includes the RFS program, we do not specify how parties
must employ persons to fulfill their regulatory burdens so long as the
specified party meets all applicable regulatory requirements. We
believe that a party may arrange for a contractor to perform actions
that meet regulatory requirements (e.g., taking samples, analyzing
samples, and reporting results to EPA) so long as that contractor
adheres to the regulatory requirements, is acting on behalf of the
regulated party, and the party understands that they will remain liable
for ensuring the applicable regulatory requirements have been met. We
believe this same arrangement is allowed for the separated food waste
recordkeeping requirements. We want to reiterate, however, that the
regulated party is liable for meeting the CAA and regulatory
requirements and for any action of any party working on their behalf,
whether it is a contractor, subcontractor, or other entity. The
renewable fuel producer must make or arrange for the records to be made
available to EPA upon request consistent with the regulatory
requirements at 40 CFR 80.1454(t). Since the parties that are
completing work on behalf of the regulated party are not independent of
the company, they do not meet the independence requirements for QAP
auditors or attest auditors, so they cannot audit the company in these
roles. With the important conditions described here, we believe EPA's
acceptance of contractors to conduct work on behalf of regulated
parties addresses the commenters request to describe more clearly the
circumstances when a contractor may hold the required feedstock records
on behalf of a renewable fuel producer.
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    \327\ Commenters recommended this in part because they would
like to use third-party tracking software to manage the collection
and disclosure of data.
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    Since the feedstock aggregators are not substantially altering the
feedstock before transferring the feedstock, we believe fewer
requirements are necessary than for biointermediates to provide
sufficient oversight of the feedstock and renewable fuel production
process. Specifically, we are not requiring that the feedstock
aggregator supply an engineering review, separated food waste plan,
separated yard waste plan, or separated MSW plan as a part of
registration. However, the renewable fuel producer will still need to
supply these documents as part of their registration. In addition, the
feedstock is not considered a biointermediate, so the feedstock
aggregator can sell feedstock to a biointermediate producer, which
could then sell a biointermediate to a renewable fuel facility.

I. Definition of Ocean-Going Vessels

    We are revising the definition of ``fuel used in ocean-going
vessels'' as proposed with slight modification to ensure that obligated
parties include diesel fuel in their RVOs in a consistent manner and as
required by the CAA and so that renewable fuel producers know which
fuels used in marine applications are eligible for RIN generation.
    Fuel used in ocean-going vessels is explicitly excluded from the
CAA's definition of ``transportation fuel,'' \328\ and does not need to
be included in RVO calculations.\329\ Relatedly, renewable fuel
producers cannot generate RINs on renewable fuel used in ocean-going
vessel because such fuel is not considered transportation fuel.\330\
The RFS regulations defined the term ``[f]uel for use in an ocean-going
vessel'' to mean: ``(1) any marine residual fuel (whether burned in
ocean waters, Great Lakes, or other internal waters); (2) Emission
Control Area (ECA) marine fuel, pursuant to Sec.  80.2 and 40 CFR
1090.80 (whether burned in ocean waters, Great Lakes, or other internal
waters); and (3) Any other fuel intended for use only in ocean-going
vessels.'' \331\ The term ``ocean-going vessels'' referenced in sub-
prong (3), however, was not further defined in the regulations.
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    \328\ CAA section 211(o)(1)(L).
    \329\ 40 CFR 80.1407(f)(8).
    \330\ 40 CFR 80.1426(a)(1)(iv).
    \331\ 40 CFR 80.1401.
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    In the RFS2 final rule, we stated that EISA specifies that
``transportation fuels'' do not include fuels for use in ocean-going
vessels and that we were interpreting that ``fuels for use in ocean-
going vessels'' means residual or distillate fuels other than motor
vehicle, nonroad, locomotive, or marine diesel fuel (MVNRLM) intended
to be used to power large ocean-going vessels (e.g., those vessels that
are powered by Category 3 (C3), and some Category 2 (C2), marine
engines and that operate internationally).\332\ This statement made
clear that vessels powered by C3 marine engines are ocean-going vessels
and that fuel supplied to those vessels does not need to be included in
obligated parties' RVO calculations.
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    \332\ 75 FR 14670, 14721 (March 26, 2010).
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    We further explained the reference to ``and some Category (C2)
marine engines'' in the RFS2 RTC document, in which we noted that while
Category 1 (C1) and C2 engines are generally required to use MVNLRM
diesel fuel (i.e., transportation fuel), we had, at the time, recently
established new standards for C3 marine engines that allowed C1 and C2
auxiliary engines equipped on vessels powered by C3 marine engines to
utilize fuels other than MVNRLM diesel fuel.\333\ We noted further that
this could result in a vessel carrying three fuels: MVNRLM, ECA marine
fuel, and residual fuels, and the latter two would not be considered
transportation fuel under the program. In other words, the reference to
``and some Category (C2) marine engines'' in the RFS2 final rule refers
to auxiliary engines equipped on vessels that are primarily powered by
C3 marine engines.
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    \333\ U.S. EPA, Renewable Fuel Standards Program (RFS2) Summary
and Analysis of Comments, at 3-198-3-200. (February 2010).
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    Since the RFS2 regulations were promulgated, we have received
several questions from the regulated community on the subject of what
constitutes an ocean-going vessel, and what fuel must be included in
obligated parties' RVO calculations. To address this, we proposed to
define ocean-going vessels as ``vessels that are primarily (i.e., >=75
percent) propelled by engines meeting the definition of `Category 3' in
40 CFR 1042.901.'' In other words, if a vessel is primarily propelled
by C3 marine engines, it is an ocean-going vessel. Further, fuel used
in Category 1 (C1) and Category 2 (C2) auxiliary engines installed on
ocean-going vessels--which

are often used for purposes other than propulsion--do not need to be
included in obligated parties' RVO calculations because the inquiry
turns on the type of engine that primarily propels the vessel, not the
actual engines that use the fuel. On the other hand, if a vessel is
primarily propelled by C1 or C2 marine engines, they are not ocean-
going vessels regardless of whether those vessels operate on
international waters, and fuel supplied to these vessels must be
included in obligated parties' RVO calculations.
    We received one comment on the proposed definition of ``ocean-going
vessel.'' The commentor stated that is unclear from the proposed
definition how an obligated party supplying marine fuel would have
knowledge about the percentage of propulsion provided by a vessel's
various Category 1, 2, or 3 engines. As explained in the NPRM,
auxiliary engines equipped on large ocean-going vessels are typically
used for purposes other than propulsion (e.g., electricity generation).
Auxiliary engines, however, can be used for propulsion in emergencies,
which is why the proposed definition was based on the primary type of
engine used to propel a vessel. However, if a vessel is equipped with a
Category 3 engine it can be assumed that the vessel will primarily use
that engine for propulsion because it would not be practical or
economical to propel that vessel primarily with smaller engines.
Therefore, we are finalizing a modified definition of ocean-going
vessel that is consistent with the intent of the proposed definition
that turns exclusively on whether the vessel is equipped with a
Category 3 engine. Specifically, we are defining ocean-going vessels as
``vessels that are equipped with engines meeting the definition of
`Category 3' in 40 CFR 1042.901.''
    We are also revising the definitions of MVNRLM diesel fuel and ECA
marine fuel to be consistent with the flexibilities that allow for the
exclusion of certified NTDF from refiners' RVOs \334\ and the
flexibilities to certify diesel fuel for multiple purposes as allowed
under EPA's fuel quality regulations.\335\ Specifically, we are
removing the restriction that fuel that meets the requirements of
MVNRLM diesel fuel cannot be ECA marine fuel, as this exclusion
conflicts with the designation provisions in 40 CFR part 1090.\336\
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    \334\ 40 CFR 80.1407(f)(11).
    \335\ 40 CFR 1090.1015(a).
    \336\ We note that we are not changing the treatment of
certified NTDF under the RFS program in this action.
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    The previous definitions for MVNRLM diesel fuel and ECA marine fuel
excluded fuel that conforms to the requirements of MVNRLM diesel fuel
from the definition of ECA marine fuel, without regard to its actual
use. Under this language, obligated parties who produced 15 ppm diesel
fuel had to include the designated MVNRLM diesel fuel in their RVO
calculations even if the fuel was designated and used as ECA marine
fuel. In the 2020 annual rule, we intended that obligated parties could
use the certified NTDF provisions to exclude ECA marine fuel used in
ocean-going vessels but did not revise the definitions of MVNRLM diesel
fuel and ECA marine fuel consistent with our intent. In this action, we
are amending the definitions of MVNRLM diesel fuel and ECA marine fuel
to clarify that 15 ppm distillate fuel that is properly designated as
certified NTDF may also be designated as ECA marine fuel and excluded
from a producer or importer's RVO calculations.

J. Bond Requirement for Foreign RIN-Generating Renewable Fuel Producers
and Foreign RIN Owners

    We are finalizing two changes to the bonding requirements for
foreign RIN-generating renewable fuel producers and foreign RIN owners.
First, we are increasing the amount of the foreign bond amount from
$0.01 to $0.22 per RIN. The bond requirement previously applicable to
foreign RIN-generating renewable fuel producers and foreign RIN owners
was developed in the RFS1 rule to deter noncompliance and to assist
with the collection of any judgments that result from a foreign RIN-
generating renewable fuel producer's noncompliance with the RFS
regulations.\337\ In that rulemaking, the bond was set to $0.01 per
RIN, when the expected value of RINs was much lower. Since 2013, RIN
prices have hovered significantly above $0.01, and recently, RINs in
all categories have consistently sold above $1.00 per RIN.\338\ As
explained in the 2023-2025 NPRM, the increased value of RINs makes a
bond requirement of $0.01 per RIN neither sufficient to deter potential
noncompliance nor likely to yield bonds of sufficient size to satisfy
judicial or administrative judgments against foreign RIN-generating
renewable fuel producers or foreign RIN owners. For these reasons, we
are raising the bond requirement to more accurately reflect the current
value of RINs, so that bonds can serve their intended purposes. While
we had proposed raising the bond requirement to $0.30 per RIN--which
was 10 percent of the price of a D3 RIN at the time of the proposal--
after considering the comments received, we have re-calculated the
amount to $0.22 per RIN, which is 10 percent of the average price of a
D3 RIN for the most recent, full five-year period (2018-2022).\339\
This approach accounts for recent fluctuations in price over a longer
and representative time period.
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    \337\ 72 FR 24007 (May 1, 2007).
    \338\ See RFS pricing data available at: https://www.epa.gov/fuels-registration-reporting-and-compliance-help/rin-trades-and-price-information.
    \339\ We selected average D3 RIN prices over the previous five
years to smooth out fluctuations in RIN prices over time. We did not
base our bond amount on projected RIN prices because estimating
future RIN prices involves a lot of uncertainty and would not
necessarily provide a more appropriate bond price. We pegged our
bond prices to D3 RINs because D3 RINs have historically been the
most valuable, and the purpose of the change is to ensure that bond
prices serve as a sufficient deterrent to non-compliance by foreign
parties. Pegging the price to a less valuable RIN would erode the
efficacy of the deterrent. We chose 10 percent because we believed a
higher percentage may be too costly for foreign RIN generators/
owners to participate in the program. Percentages lower than 10
percent would have resulted in an insufficient deterrent against
non-compliance.
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    Second, we are removing the option to make a direct payment to the
U.S. Treasury under 40 CFR 80.1466(h) and are adopting the surety bond
as the sole method to fulfill the foreign bond requirement. We have
considered a variety of options used by other EPA programs and by other
Federal agencies, including examining the financial assurance methods
used by EPA for the Resource Conservation and Recovery Act (RCRA) and
for the Transition Program for Equipment Manufacturers (TPEM) program.
We also considered approaches used by other federal agencies, such as
the Alcohol and Tobacco Trade Board (TTB) brewer's bonds, including
surety and collateral (``cash'') bonds. Our inquiry led us to conclude
that alternative approaches either do not work with the RFS program or
are too burdensome to implement, and that the surety bond approach is
the most appropriate and workable for the RFS program.
    The effective date for the new bonding provisions will be April 1,
2024. We are giving a later effective date because we appreciate that
parties may need this additional time to come into compliance with
these new bonding requirements.

K. Definition of Produced From Renewable Biomass

    We are not finalizing at this time a definition of produced from
renewable biomass or the related amendments to the regulatory
provisions related to co-processed fuels. 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.'' \340\ However, neither the CAA
nor EPA regulations define what it means for a fuel to be produced from
renewable biomass. In the 2020-2022 NPRM, we proposed to define in 40
CFR 80.1401 that ``produced from renewable biomass'' means the energy
in the finished fuel comes from renewable biomass. After reviewing
comments on that proposal, we decided not to finalize a definition for
``produced from renewable biomass'' in that action. In the 2023-2025
NPRM, we re-proposed the definition of ``produced from renewable
biomass'' again based on the energy content approach that was in the
2020-2022 NPRM. We also sought comment on alternative definitions and
ways that renewable fuel producers could demonstrate that the fuel they
produce meets this statutory requirement. These included both a ``mass-
based'' definition where the mass in the finished fuel comes from the
renewable biomass, as well as a ``broad'' approach whereby either the
energy or the mass could come from the renewable biomass.
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    \340\ CAA section 211(o)(2)(A)(i) adds the requirement that
renewable fuel must have ``lifecycle [GHG] emissions that are at
least 20 percent less than baseline lifecycle [GHG] emissions''
(unless exempted under the statutory grandfather provision as