[Federal Register Volume 79, Number 138 (Friday, July 18, 2014)]
[Rules and Regulations]
[Pages 42127-42167]
[FR Doc No: 2014-16413]

Vol. 79

Friday,

No. 138

July 18, 2014

Part III

Environmental Protection Agency

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40 CFR Part 80

 Regulation of Fuels and Fuel Additives: RFS Pathways II, and Technical
Amendments to the RFS Standards and E15 Misfueling Mitigation
Requirements; Final Rule

Federal Register / Vol. 79 , No. 138 / Friday, July 18, 2014 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2012-0401; FRL-9910-40-OAR]
RIN 2060-AR21

Regulation of Fuels and Fuel Additives: RFS Pathways II, and
Technical Amendments to the RFS Standards and E15 Misfueling Mitigation
Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: In this final rulemaking, the Environmental Protection Agency
(EPA) is amending three separate sets of regulations relating to fuels.
In amendments to the renewable fuels standard (RFS) program
regulations, EPA is clarifying the number of cellulosic biofuel
renewable identification numbers that may be generated for fuel made
with feedstocks of varying cellulosic content, is specifying new and
amended pathways for the production of renewable fuels made from
biogas, and is clarifying or amending a number of RFS program
regulations that define terms or address registration, recordkeeping,
and reporting requirements. EPA is also making various changes to the
misfueling mitigation regulations for gasoline that contains greater
than 10 volume percent ethanol and no more than 15 volume percent
ethanol (E15) and to the survey requirements associated with the ultra-
low sulfur diesel program.

DATES: This rule is effective August 18, 2014.

FOR FURTHER INFORMATION CONTACT: Jon Monger, Office of Transportation
and Air Quality, Mail Code: 1101A, U.S. Environmental Protection
Agency, 1200 Pennsylvania Avenue NW., 20460; telephone number: (202)
564-0628; fax number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Executive Summary

    In this rule, EPA is amending three sets of regulations. First, as
described in section IV of this preamble, EPA is amending certain parts
of the RFS program regulations at 40 CFR part 80, subpart M. Some of
the changes in this rule are of a substantive nature; others are more
in the nature of technical corrections, including corrections of
obvious omissions and errors in citation. In this final rule, EPA
establishes requirements for determining the number of cellulosic
biofuel Renewable Identification Numbers (RINs) that will be generated
for fuel made from a range of cellulosic feedstocks. We also modify
regulatory provisions related to renewable fuel made from biogas,
including a new compressed natural gas (CNG)/liquefied natural gas
(LNG) cellulosic biofuel pathway, and add a new cellulosic biofuel
pathway for renewable electricity (used in electric vehicles) produced
from biogas. These pathways have the potential to provide notable
volumes of cellulosic biofuel for use in complying with the RFS
program, since significant volumes of advanced biofuels are already
being generated for fuel made from biogas, and in many cases this same
fuel will qualify for cellulosic RINs when this rule becomes effective.
The approval of these new cellulosic pathways could have an impact on
EPA's projection of 2014 cellulosic biofuel volumes in the final 2014
RFS standards rulemaking. EPA noted the possibility of such an impact
in its proposed rule.\1\ Many of the changes in today's rule will
facilitate the introduction of new renewable fuels under the RFS
program. By qualifying these new fuel pathways, this rule provides
opportunities to increase the volume of advanced, low-GHG renewable
fuels--such as cellulosic biofuels--under the RFS program. EPA's
analyses show significant lifecycle GHG emission reductions from these
fuel types, as compared to the baseline gasoline or diesel fuel that
they replace. In this rulemaking, EPA also clarifies or amends a number
of RFS program regulations that define terms or address registration,
recordkeeping, or reporting requirements. These include amendments
related to: (1) Use of crop residue and corn kernel fiber as renewable
fuel feedstock; (2) definition of ``small refinery''; (3) provisions
for small blenders of renewable fuels; (4) when EPA may deactivate a
company registration; (5) the use for registration purposes of
``nameplate capacity'' for certain production facilities that do not
claim exemption from the 20% greenhouse gas (GHG) reduction threshold;
and (6) clarifying what penalties apply under the RFS program.
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    \1\ 78 FR 71732, November 29, 2013.
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    EPA is also making various changes to the E15 misfueling mitigation
regulations (E15 MMR) at 40 CFR part 80, subpart N. Among the E15
changes are technical corrections and amendments to sections dealing
with labeling, E15 surveys, product transfer documents, and prohibited
acts. We also amend the definitions of E10 and E15 in subpart N to
address a concern about the rounding of ethanol content test results,
in response to a question raised by some industry stakeholders.
    In response to questions received from regulated parties, we amend
the ultra-low sulfur diesel (ULSD) survey provisions in a manner that
reduces the number of samples required. This will reduce costs and
burdens associated with compliance for regulated parties, with no
expected degradation in the highly successful environmental performance
of the program. We received helpful comments from the public on these
three issues, and provide response to them in this preamble.
    We are not finalizing at this time all of the proposed changes in
the Notice of Proposed Rulemaking.\2\ Due to comments received and time
constraints, we are not taking final action at this time on the
proposed advanced butanol pathway, the proposed pathways for the
production of renewable diesel, naphtha and renewable gasoline from
biogas, or the proposed additional compliance requirements for non-RIN-
generating foreign renewable fuel producers. We are also not taking
final action at this time on the definition of ``producer'' for
renewable CNG/LNG and renewable electricity from biogas sources, the
definition of responsible corporate officer, or the proposed amendments
to compliance related provisions for the alternative reporting method
in Sec.  80.1452. The Agency is deferring the final decision on these
matters until a later time.
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    \2\ 78 FR 36042, June 14, 2013.
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    This preamble follows the following outline:

I. Executive Summary
II. Why is EPA taking this action?
III. Does this action apply to me?
IV. Renewable Fuel Standard (RFS) Program Amendments
    A. Renewable Identification Number (RIN) Generation for Fuels
Made From Feedstocks Containing Cellulosic Biomass
    1. Background
    2. The Cellulosic Content Threshold Approach and its Application
to Cellulosic Feedstocks Currently Listed in Table 1 to 40 CFR
80.1426
    3. Compliance Requirements for Producers of Cellulosic Biofuel
Made From Feedstocks That are not Predominantly Cellulosic
    4. Testing, Registration, Reporting and Recordkeeping
Requirements for Cellulosic Biofuel
    a. Additional Registration Requirements for Certain Producers
Seeking to Generate Cellulosic Biofuel RINs

    b. Additional Registration Requirements for Renewable Fuel
Produced From Energy Cane
    c. Additional Registration, Recordkeeping, and Reporting
Requirements for Producers of Cellulosic Fuels Derived From the
Simultaneous Conversion of Feedstocks That are Predominantly
Cellulosic and Feedstocks That are Not Predominantly Cellulosic
    5. Determining the Average Adjusted Cellulosic Content of
Feedstocks Going Forward
    6. Other Comments Received
    a. Treatment of Cellulosic Feedstocks Currently Listed in Table
1 to 40 CFR 80.1426
    b. Feedstocks With Lower Average Cellulosic Content Than
Feedstocks Currently Listed in Table 1 to Sec.  80.1426
    B. Lifecycle Greenhouse Gas Emissions Analysis and Cellulosic
Determinations for Pathways Using Biogas as a Feedstock
    1. Changes Applicable to the Revised CNG/LNG Pathway From Biogas
    2. Determination of the Cellulosic Content of Biogenic Waste-
Derived Biogas
    a. Landfill Biogas and MSW Digester Biogas as Cellulosic in
Origin
    b. Municipal Wastewater Treatment Facility Digester Biogas as
Cellulosic
    c. Agricultural Digester Gas as Cellulosic
    d. Biogas From Waste Digesters
    3. Consideration of Lifecycle GHG Emissions Associated With
Biogas Pathways
    a. Upstream GHG Analysis of Biogas as a Renewable Fuel or Fuel
Feedstock
    b. Flaring Baseline Justification
    c. Lifecycle GHG Analysis for Electricity From Biogas
    4. Alternative Biogas Options and Comments
    a. Alternative Baseline Approaches
    b. Additional Comments on Lifecycle Analysis for Renewable
Electricity
    C. Regulatory Amendments Related to Biogas
    1. Changes Applicable to Renewable Electricity From Biogas
Sources
    a. Registration and RIN Generation Requirements
    b. Distribution and Tracking Requirements
    2. Regulatory Changes Applicable to All Biogas Related Pathways
    D. Clarification of the Definition of ``Crop Residue'' and
Clarification of Feedstocks That EPA Considers Crop Residues
    1. Clarification of the Definition of ``Crop Residue''
    2. Consideration of Corn Kernel Fiber as a Crop Residue
    a. Analysis of Corn Kernel Fiber as a Crop Residue
    b. Treatment of Corn Starch That Adheres to Corn Kernel Fiber
After Separation From DDG
    c. Processing Corn Kernel Fiber
    3. Identification of Feedstocks EPA Considers Crop Residues
    4. Registration, Recordkeeping, and Reporting Requirements
Associated With Using Crop Residue as a Feedstock
    a. Registration Requirements for Producers Utilizing Crop
Residue as a Feedstock
    b. Recordkeeping and Reporting Requirements for Producers
Utilizing Crop Residue as a Feedstock
    E. Amendments to Various RFS Compliance Related Provisions
    1. Changes to Definitions
    2. Provisions for Small Blenders of Renewable Fuels
    3. Changes to Sec.  80.1450--Registration Requirements
    4. Changes to Sec.  80.1452--EPA Moderated Transaction System
(EMTS) Requirements--Alternative Reporting Method for Sell and Buy
Transactions for Assigned RINs
    5. Changes to Facility's Baseline Volume to Allow ``Nameplate
Capacity'' for Facilities not Claiming Exemption From the 20% GHG
Reduction Threshold
    6. Changes to Sec.  80.1463--What Penalties Apply Under the RFS
Program?
    F. Minor Corrections to RFS Provisions
    V. Amendments to the E15 Misfueling Mitigation Rule
    A. Changes to Sec.  80.1501--Label
    B. Changes to Sec.  80.1502--E15 Survey
    C. Changes to Sec.  80.1503--Product Transfer Documents
    D. Changes to Sec.  80.1504--Prohibited Acts
    E. Changes to Sec.  80.1500--Definitions
    VI. Amendments to the Ultra Low Sulfur Diesel (ULSD) Survey
    VII. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132 (Federalism)
    F. Executive Order 13175 (Consultation and Coordination With
Indian Tribal Governments)
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations.
    K. Congressional Review Act
    L. Clean Air Act Section 307(d)
VIII. Statutory Provisions and Legal Authority

II. Why is EPA taking this action?

    EPA is taking this action to amend various provisions in its
regulations pertaining to the Renewable Fuels Standard (RFS) program
(40 CFR part 80, subpart M) and misfueling mitigation for 15 volume
percent (%) ethanol blends (E15) (40 CFR part 80, subpart N) to assist
regulated parties in complying with RFS and E15 requirements. EPA is
also amending the ultra low sulfur diesel (ULSD) survey provisions (40
CFR part 80, subpart I) to decrease regulatory burdens and costs.

III. Does this action apply to me?

    Entities potentially affected by this action include those involved
with the production, distribution and sale of transportation fuels,
including gasoline and diesel fuel, or renewable fuels such as ethanol
and biodiesel. Regulated categories and entities affected by this
action include:

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                                               NAICS Codes                    Examples of potentially regulated
                  Category                         \a\        SIC Codes \b\                parties
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Industry...................................          324110            2911  Petroleum refiners, importers.
Industry...................................          325193            2869  Ethyl alcohol manufacturers.
Industry...................................          325199            2869  Other basic organic chemical
                                                                              manufacturers.
Industry...................................          424690            5169  Chemical and allied products
                                                                              merchant wholesalers.
Industry...................................          424710            5171  Petroleum bulk stations and
                                                                              terminals.
Industry...................................          424720            5172  Petroleum and petroleum products
                                                                              merchant wholesalers.
Industry...................................          454310            5989  Fuel dealers.
Industry...................................          486210            4922  Pipeline Transportation of Natural
                                                                              Gas.
Industry...................................          221117            4911  Biomass Electric Power Generation.
Industry...................................          562212            4953  Solid Waste Landfill.
Industry...................................          562219            4953  Other Nonhazardous Waste Treatment
                                                                              and Disposal.
Industry...................................          221320            4952  Sewage Treatment Facilities.
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could be potentially regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your entity is regulated by this action, you should carefully examine
the applicability criteria of part 80, subparts I, M and N of Title 40
of the Code of Federal Regulations. If you have any question regarding
applicability of this action to a particular entity, consult the person
in the preceding FOR FURTHER INFORMATION CONTACT section above.

IV. Renewable Fuel Standard (RFS) Program Amendments

    In this rule, we are clarifying requirements related to existing
cellulosic biofuel pathways under the RFS program, and adopting new
cellulosic biofuel pathways. This rule also modifies a number of RFS
program regulations.

A. Renewable Identification Number (RIN) Generation for Fuels Made From
Feedstocks Containing Cellulosic Biomass

1. Background
    The Clean Air Act (CAA) defines ``cellulosic biofuel'' as
``renewable fuel derived from any cellulose, hemicellulose, or lignin
that is derived from renewable biomass and has lifecycle greenhouse gas
emissions, as determined by the Administrator, that are at least 60
percent less than the baseline lifecycle greenhouse gas emissions.''
However, plants do not contain only cellulose, hemicellulose, and
lignin; depending on the plant species and other variables (such as
variety within a generic feedstock type and storage time) they can also
contain varying amounts of other compounds. Using cellulosic biofuel
production technologies, some of these other compounds may be
converted, along with the cellulosic compounds of plant feedstocks,
into renewable fuel. When this occurs, biofuel producers must ascertain
what type of RIN or RINs to assign to the resulting renewable fuel.
Prior to the proposal, EPA had not provided detailed information on how
other compounds should be treated, which led to uncertainty amongst
renewable fuel producers about whether their entire volume of fuel
produced from a cellulosic feedstock would be eligible to generate
cellulosic RINs.
    In the proposed rule, EPA noted that existing RFS regulations
specify that the fuel made from certain types of feedstocks that are
predominantly of cellulosic content \3\ (e.g., fuel made from the
biogenic portion of separated municipal solid waste) are considered
entirely made from cellulosic material.\4\ EPA noted that these
regulations have been based on the view that the statutory requirement
that cellulosic biofuel be ``derived from cellulose, hemicellulose or
lignin'' does not mandate that in all cases the renewable fuel must be
produced only from the cellulosic material in the renewable biomass.
Rather, EPA considers the statutory definition of cellulosic biofuel to
be ambiguous on this point, providing EPA the discretion to reasonably
determine under what circumstances a fuel appropriately should be
considered cellulosic biofuel when the fuel is produced from a
feedstock that contains a mixture of cellulosic and non-cellulosic
materials.\5\ Consistent with this view and the previously established
statutory interpretation permitting assignment of a single RIN value to
fuel produced predominantly from one source, EPA proposed that fuels
made from feedstocks that are ``predominantly'' cellulosic should be
considered cellulosic biofuel and that all of the volume of fuels from
such feedstocks could generate cellulosic biofuel RINs. Accordingly,
EPA proposed that the entire volume of fuel made pursuant to the
cellulosic biofuel pathways in Table 1 to Sec.  80.1426 be for
cellulosic biofuel RINs (D code of 3 or 7), based on EPA's proposed
determination that the feedstocks associated with those pathways are
composed predominantly of cellulosic materials.\6\
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    \3\ For purposes of this preamble, ``cellulosic content'' means
cellulose, hemicellulose, and lignin.
    \4\ 75 FR 14670, 14706. In the March 2010 RFS rulemaking, EPA
determined, in certain circumstances, it is appropriate for
producers to base RIN assignment on the predominant component.
    \5\ 78 FR 36042, 36047.
    \6\ EPA included in the docket for the Notice of Proposed
Rulemaking a Memorandum to the Docket, entitled ``Cellulosic Content
of Various Feedstocks--2014 Update,'' available in docket EPA-HQ-
OAR-2012-0401. This memorandum discusses the cellulosic content of
various feedstocks, including most of the cellulosic feedstocks
listed in cellulosic biofuel pathways in Table 1 to 40 CFR 80.1426.
The memorandum notes that the average adjusted cellulosic content of
these feedstocks is at least 75%. Because of the high degree of
natural variability in biomass, average adjusted cellulosic contents
are likely more meaningful than any single value reported, because
no single value can reflect the compositional range and variability
present.
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    EPA solicited comment in the Notice of Proposed Rulemaking (NPRM)
on several alternative approaches, including a ``cellulosic content
threshold approach.'' Under the cellulosic content threshold approach,
EPA would set a minimum threshold of cellulosic content, and only fuels
made from feedstocks meeting this minimum threshold would be eligible
to generate cellulosic RINs for their entire fuel volume. EPA suggested
possible thresholds in the range of 70% to 99.9%.
    After evaluating the comments received, EPA has decided to finalize
a cellulosic content approach, with a minimum cellulosic content
threshold of 75%. In section IV.A.2, below, we discuss the merits of
the approach generally, and how we intend to implement it for
feedstocks used in cellulosic biofuel pathways listed in Table 1 to
Sec.  80.1426. This includes special provisions for energy cane and
annual cover crops. In sections IV.A.3 and IV.A.4 we discuss how RINs
should be allocated for fuel made from feedstocks containing less than
75% cellulosic content, and the registration, recordkeeping and
reporting requirements associated with the rule. In section IV.A.5 we
discuss application of the cellulosic content threshold approach to
feedstocks evaluated in the future, and in section IV.A.6 we discuss in
more detail the comments received and our responses to them.
2. The Cellulosic Content Threshold Approach and Its Application to
Cellulosic Feedstocks Currently Listed in Table 1 to 40 CFR 80.1426
    EPA has decided to finalize the cellulosic content threshold
approach and to set the minimum threshold as an average adjusted
cellulosic content of 75%, measured on a dry mass basis. Since
inorganic materials are not likely to end up in the final fuel product
and would not contribute to the fuel heating content in the event that
they remained in the final fuel, the ``adjusted cellulosic content'' is
the percent of organic (non-ash) material that is cellulose,
hemicellulose, or lignin.\7\ Consistent with previous precedents
permitting assignment of a single RIN value to fuel produced
predominantly from one source, fuels made from feedstocks that EPA
determines meet this minimum threshold will, therefore, be eligible for
cellulosic biofuel RINs for the entire fuel volume produced. As a
result of this rule, all of the cellulosic biofuel made from the
following feedstocks is eligible to generate cellulosic RINs for

the entire volume of fuel produced: Crop residue, slash, pre-commercial
thinnings and tree residue, switchgrass, miscanthus, Arundo donax,
Pennisetum purpureum, and biogas from landfills, municipal wastewater
treatment facility digesters, agricultural digesters, and separated MSW
digesters (collectively ``predominantly cellulosic feedstocks''). In
addition, EPA is not modifying existing rules that allow generation of
cellulosic biofuel RINs for the entire volume of fuel made from
separated yard waste, see 40 CFR 80.1426(f)(5)(i)(A), and for the
biogenic portion of fuel made from separated MSW, see 75 FR 14706 and
40 CFR 80.1426(f)(5)(v), other than to clarify that the testing
requirement to determine biogenic content of finished fuel made from
separated MSW does not apply to biogas-derived fuels. For such fuels,
the anaerobic process limits digestion and associated biogas generation
to the biogenic components of separated MSW, so all resulting fuel is
appropriately considered biogenic. Fuels made from feedstocks which do
not meet the minimum 75% threshold, but which contain some level of
cellulosic material, will be eligible to generate both cellulosic and
non-cellulosic RINs using the apportionment methods described below.
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    \7\ Further details about this determination can be found in the
Memorandum to the Docket, ``Cellulosic Content of Various
Feedstocks--2014 Update,'' available in docket EPA-HQ-OAR-2012-0401.
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    However, EPA is taking a different approach with respect to the
Table 1 cellulosic feedstocks energy cane and cover crops. Because
considerable variability in cellulosic content may exist in plants that
may be considered sugarcane or energy cane, we have amended the
definition of energy cane to specify that it refers only to cultivars
that have been demonstrated to contain an average adjusted cellulosic
content of at least 75%. Fuel made through cellulosic biofuel pathways
from feedstocks meeting the new definition of energy cane are eligible
for cellulosic biofuel RINs for the entire fuel volume.
    Annual cover crops will also be treated differently than other
cellulosic feedstocks in Table 1. We do not have enough data about
annual cover crops to be confident that they will always meet the 75%
threshold. Therefore, in Table 1 annual cover crops will still be
listed as ``cellulosic components of annual cover crops.'' However, we
are also adding a new pathway for ``non-cellulosic components of annual
cover crops,'' which will be eligible for advanced RINs. In the future,
as more information becomes available, we may revisit this
determination.
    EPA believes that a 75% content threshold is consistent with the
statutory definition of cellulosic biofuel, as EPA indicated in the
NPRM, and satisfies the objective identified in the proposed rule of
allowing fuels made from feedstocks that are ``predominantly''
cellulosic to generate cellulosic biofuel RINs for their entire fuel
volume. A threshold of 75% also allows fuel made from all predominantly
cellulosic feedstocks to generate RINs for their entire fuel volume,
consistent with EPA's principal proposal. As compared to alternative
approaches discussed in the NPRM, the approach will also greatly
simplify compliance by cellulosic biofuel producers and reduce
regulatory burden, since for qualifying cellulosic feedstocks the
approach to RIN generation is straightforward and will not require
testing or apportionment of RINs. These benefits, in turn, should help
to promote cellulosic biofuel production, consistent with Congressional
objectives. This final rule will help to ensure that cellulosic RINs
are in fact only generated for fuels derived predominantly from
cellulosic materials.
    Because all of the fuel produced from predominantly cellulosic
feedstocks will qualify for cellulosic biofuel RINs, EPA is making
related modifications to the text in Table 1 to Sec.  80.1426.
Specifically we are deleting the references to ``cellulosic biomass
from'' in rows K, L, M, and N to reflect that fuel made pursuant to the
listed pathways from the feedstocks listed without this modifier are
eligible to generate cellulosic biofuel RINs even though the feedstocks
contain some non-cellulosic compounds. However, because certain
production processes that can be used to produce cellulosic biofuel may
be employed so as to only derive fuel from the non-cellulosic
components of feedstock, EPA is also modifying the production process
description in these lines in the table to specify that the production
process must convert the cellulosic components of feedstock into
biofuel. The effect is that cellulosic RINs may only be generated when
a production process is employed that in fact produces biofuel that is
derived from the cellulosic content of feedstocks.
    Many commenters agreed that the cellulosic feedstocks currently
listed in Table 1 are predominantly composed of cellulosic components
and that allowing all of the fuel derived from these feedstocks to
qualify for cellulosic biofuel RINs is consistent with the statutory
definition of cellulosic biofuels. Some commenters asserted that
allowing all the fuel produced from the cellulosic feedstocks in Table
1 was an overly expansive interpretation of the statutory definition of
cellulosic biofuels.\8\ EPA considers the statutory definition to be
ambiguous on the point of whether cellulosic biofuel RINs may be
generated for fuel produced from predominantly cellulosic material,
allowing EPA discretion to reasonably interpret this definition. As
established in previous rulemakings,\9\ EPA believes the statutory
definition does not mandate that in all cases cellulosic biofuel must
be produced exclusively from cellulosic material in the renewable
biomass, and today's rule adopts a common-sense approach to the matter
that allows fuel made from predominantly cellulosic feedstocks to
qualify as cellulosic biofuel.
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    \8\ Comments provided by AFPM/API (EPA-HQ-OAR-2012-0401-0128)
and Chevron (EPA-HQ-OAR-2012-0401-0171).
    \9\ EPA has previously considered instances where fuel would
generate cellulosic biofuel RINs even if produced from feedstocks
containing both cellulosic and non-cellulosic materials. In the
March 2010 RFS rulemaking, EPA determined that biofuel from
separated yard waste qualified as cellulosic and would generate
cellulosic RINs because separated yard waste was ``largely
cellulosic.'' 75 FR 14794, March 26, 2010.
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    In the NPRM, EPA invited comment on an appropriate threshold value
for use with a cellulosic threshold approach. EPA received comments on
a wide range of suggested threshold values, with many commenters
supporting 70% and 80%, some suggesting multiple thresholds, and some
commenters requesting much higher (95%) thresholds. Some commenters
opposed setting a cellulosic content threshold because there is not a
consensus on a value for a threshold, and one commenter asserted that
setting a minimum threshold content may stifle development of new
feedstocks. In response, EPA has decided that a cellulosic content
threshold of 75% is a reasonable value that appropriately implements
the statutory requirements.\10\ Feedstocks which do not meet or exceed
a 75% minimum cellulosic content threshold have a more significant non-
cellulosic portion of the feedstock which could contribute to the
volume of fuel produced. These feedstocks start to resemble traditional
crops that have been developed for purposes other than energy
generation, such as crops that are grown for their sugar content (e.g.,
sugarcane, sweet sorghum). EPA believes that a threshold significantly
below 75% might inadvertently encourage use of multipurpose feedstocks
for the production of fuels that are qualified for cellulosic RINs, in
lieu of the feedstocks

with a higher cellulosic content that Congress envisioned would be used
to produce this category of biofuel. On the other hand, a threshold
higher than 75% would result in regulatory and administrative burdens
on the use of predominantly cellulosic feedstocks.\11\ EPA believes
that the 75% threshold strikes a reasonable balance among these
considerations, while remaining consistent with the statutory
definition of cellulosic biofuels and past regulatory approaches that
EPA has taken for specified feedstocks. While arguments could be made
for other numeric values, EPA believes that a rational basis exists for
settling on 75%, as explained in this rule, and is within EPA's
exercise of discretion to reasonably interpret the CAA. EPA believes
that the 75% threshold, which is well over a 50% or ``majority'' value,
is consistent with the concept that cellulosic content should be
predominant in feedstocks for which all resulting fuel is qualified for
cellulosic biofuel RINs. The 75% threshold also eliminates the current
regulatory uncertainty for cellulosic biofuel producers, minimizes
regulatory burden, and as a consequence should help promote the
production of the category of renewable fuels that provides the most
lifecycle GHG emissions benefits.
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    \10\ All fuel that qualifies for cellulosic biofuel RINs must
achieve a minimum 60% lifecycle greenhouse gas emissions reduction
as compared to baseline fuels, even if some portion of the fuel is
derived from non-cellulosic materials.
    \11\ Requirements for determining the number of cellulosic
biofuel RINs that may be generated for fuel derived from feedstocks
that do not satisfy the minimum cellulosic content threshold adopted
in today's rule are described in section IV.A.3 of this preamble.
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3. Compliance Requirements for Producers of Cellulosic Biofuel Made
From Feedstocks That Are Not Predominantly Cellulosic
    In the proposal, EPA invited comment on how to determine the
appropriate type of RIN or RINs for fuel that is produced from
feedstocks that contain cellulosic material, but where the feedstocks
are not predominantly cellulosic in content. Based on the comments
received, EPA believes that the existing regulations at Sec.
80.1426(f)(3)(vi) provide an appropriate mechanism for allocation of
RINs, both for processes that convert two or more feedstocks
simultaneously where not all feedstocks are predominantly cellulosic,
and for processes using a single feedstock that has an average
cellulosic content below 75%. However, EPA is amending the regulations,
by adding new registration, recordkeeping, and reporting requirements
(``RRR requirements'') to allow EPA to verify that the formula in Sec.
80.1426(f)(3)(vi) is being applied appropriately for cellulosic biofuel
RIN generation. EPA believes that, to relieve regulatory burden and
streamline program implementation, it makes sense to establish a 75%
minimum cellulosic content threshold above which testing and reporting
of cellulosic content and RIN apportionment is not necessary. However,
when fuel is made from feedstocks below the 75% cellulosic content
threshold, EPA believes that testing of the feedstock's cellulosic
content is appropriate, and that RINs should be apportioned according
to the test results.
    EPA recognizes that one result of today's rule is that fuel made
from a feedstock meeting the 75% minimum cellulosic content threshold
will qualify completely for cellulosic RINs, whereas fuel made from a
feedstock containing 74% cellulosic content would, through the
apportionment formula, only qualify for at most 74% cellulosic RINs.
EPA believes it is appropriate to have simplified procedures for fuel
made from feedstocks that are predominantly cellulosic, and has
selected a 75% threshold to identify these feedstocks. At some level of
content, EPA believes there is less benefit to requiring that
manufacturers account for the increasingly small non-cellulosic content
of the feedstock. EPA has determined that 75% cellulosic content is a
large enough percentage that it is appropriate to allow full
qualification. This results in a simplified implementation approach for
the large majority of feedstocks typically considered ``cellulosic'' in
nature. While this obviously allows significantly greater benefits to
producers using feedstocks above 75% cellulosic content, compared with
fuel derived from feedstocks containing just below 75% cellulosic
content, the difference is the inevitable result of having any sort of
threshold level. Wherever EPA set the threshold, fuels made from
feedstocks that just fail to satisfy the threshold will be treated
differently. For the reasons provided, EPA believes that the approach
is reasonable and appropriate.
    As one possible approach to addressing the disparity between fuels
made from feedstocks that meet the 75% minimum cellulosic content
threshold and those that do not, EPA considered the option of allowing
up to an additional 25% of fuel made from feedstock not meeting the
threshold to qualify for cellulosic biofuel RINs, beyond levels that
are determined to reflect the cellulosic converted fraction. While this
approach could be seen as providing more equitable treatment of fuels
made from feedstocks that satisfy the 75% cellulosic content threshold
and those that do not, EPA determined that it would be inappropriate.
The principal objective of the cellulosic content approach adopted
today is to minimize burdens and streamline program implementation for
both EPA and producers of cellulosic biofuel and provide incentives for
production of fuels that are 75% or greater cellulosic content.
However, for fuels made from feedstocks that do not meet the minimum
cellulosic content threshold, testing (either of cellulosic content of
feedstock or of the proportion of fuel derived from cellulosic content)
will be required. In cases where the expense and burden of testing is
undertaken, EPA believes it is most consistent with the objectives of
the Act for RIN apportionment to accurately reflect the test results.
4. Testing, Registration, Reporting and Recordkeeping Requirements for
Cellulosic Biofuel
    The agency requested comment on test methods available to determine
what percentage of a finished biofuel volume was derived from
cellulosic or non-cellulosic components. At the time of the proposal,
we were not aware of any ready test that could be used to identify the
amount of a finished fuel that was derived from cellulosic versus non-
cellulosic components. However, we received several comments that
suggested there are methods available for this purpose.\12\ Given this
new information, we believe it is reasonable to require the use of
these existing methods under certain circumstances when fuel is
produced from feedstocks that are not predominantly cellulosic to
verify that the values used in the formula at Sec.  80.1426(f)(3)(vi)
are as accurate as possible. Therefore, as part of this final rule, we
are requiring the use of these available test methods under certain
circumstances described below to help ensure that an appropriate number
of cellulosic RINs are generated when applying the formula at Sec.
80.1426(f)(3)(vi).
---------------------------------------------------------------------------

    \12\ Comments suggested various methods to determine the
converted fraction, including approaches for performing a mass-
balance accounting of feedstock components converted to fuel
products. As described in the memo to the docket, ``Additional
Detail on the Calculation of the Cellulosic Converted Fraction, and
Attribution of Batch RINs for D-code Dependent Feedstocks,''
available in docket EPA-HQ-OAR-2012-0401, a mass balance approach
which meets the requirements discussed below is an appropriate
method for calculating the converted fraction. Converted fraction
refers to the portion of the feedstock converted into renewable fuel
by the producer and is used in calculating cellulosic RIN volumes
generated.
---------------------------------------------------------------------------

    As described in more detail below, different feedstocks and
processes require more information to ensure a

high degree of confidence that cellulosic biofuel RINs are
appropriately generated. These registration, recordkeeping, and
reporting requirements, including changes to the production process
requirements of Table 1 to Sec.  80.1426, are described in the
following sections. These requirements apply to all relevant
registrations and registration updates, including cellulosic biofuel
pathways approved pursuant to a Sec.  80.1416 petition process which
take place after the effective date of this rule.

a. Additional Registration Requirements for Certain Producers Seeking
To Generate Cellulosic Biofuel RINs

    At registration or during registration updates under Sec.
80.1450(d)(3), all producers seeking to use a cellulosic biofuel
pathway that converts cellulosic biomass to fuel (currently rows K, L,
M, and N of Table 1 to Sec.  80.1426, or as otherwise approved by EPA),
must demonstrate that their production process has the ability to
convert cellulosic components to fuel by including (1) a process
diagram with all relevant unit processes labeled and a designation of
which unit process is capable of performing cellulosic treatment; (2) a
description of the cellulosic biomass treatment process; and (3) a
description of the mechanical, chemical, and biochemical mechanisms by
which cellulosic materials can be converted to fermentable sugars or
biofuel products. In addition, an independent professional engineer
must verify that the equipment to perform each of the relevant unit
processes required to convert cellulosic biomass to biofuel is in place
as part of registration, in order to demonstrate that the conversion
process will derive the finished fuel from cellulosic components.

b. Additional Registration Requirements for Renewable Fuel Produced
From Energy Cane

    Energy cane is derived from sugarcane, which can be and is bred for
a variety of uses and a wide range of fiber and sugar contents.\13\
Prior to this rule, energy cane was defined in 40 CFR 80.1401 as ``a
complex hybrid in the Saccharum genus that has been bred to maximize
cellulosic rather than sugar content.'' This definition did not include
any specific requirements regarding cellulosic content. However, some
cultivars \14\ of cane are bred to have a high sugar content and
therefore have a lower percent cellulosic content. For example, two
cultivars released by USDA, which are commonly referred to as energy
cane,\15\ have cellulosic contents of approximately 50% on a dry matter
basis.\16\ Fuel produced from these cultivars would not be derived
predominantly from cellulose, hemicellulose, and lignin; instead, the
fuel would largely be derived from sugar. Therefore, in this rule EPA
is amending the definition of energy cane to specify that it means
cultivars that have, on average, at least 75% adjusted cellulosic
content on a dry matter basis. Cultivars that do not meet the 75%
adjusted cellulosic content threshold will be considered sugarcane.
With this clarification, only cultivars that have predominantly
cellulosic content are included in the definition of energy cane and
are qualified to generate cellulosic RINs for the entire volume of
finished fuel produced. When cultivars containing less than 75%
adjusted cellulosic content are used to make fuel, we consider those
cultivars to be sugarcane and eligible to generate advanced biofuel
RINs for the portion of fuel that is derived from sugar. If the bagasse
is converted to renewable fuel, cellulosic RINs could be generated for
the amount of fuel derived from the bagasse (under the existing crop
residue pathway).
---------------------------------------------------------------------------

    \13\ Tew, Thomas L. and Robert M. Cobill. 2008. Genetic
improvement of sugarcane (Saccharum spp.) as an energy crop. p. 249-
272. In: W. Vermerris (ed.) Genetic Improvement of Bioenergy Crops.
Springer.
    \14\ A cultivar is a subset of a species. USDA has provided a
list of sugarcane cultivars (including energy cane). This list,
``USDA ARS Sugarcane Release Notices 1999 to 2012,'' is included in
the docket.
    \15\ Ho 00-961 and HoCP 91-552; Tew, Thomas L. and Robert M.
Cobill. 2008. Genetic improvement of sugarcane (Saccharum spp.) as
an energy crop. p. 249-272. In: W. Vermerris (ed.) Genetic
Improvement of Bioenergy Crops. Springer.
    \16\ Tew, T. L. et al., 2007. ``Notice of release of high-fiber
sugarcane variety Ho 00-961.'' Sugar Bulletin, 85(10) 23-24. Tew, T.
L. et al, 2007. ``Notice of release of high-fiber sugarcane variety
HoCP 91-552.'' Sugar Bulletin, 85(10) 25-26. Ho 00-961 has a Brix
value of 17-19% cane, and HoCP 91-552 has a Brix value of 15-18%
cane, where Brix is a measure of the total soluble solids, including
sugar. These Brix values are similar to the Brix value of a
traditional sugarcane cultivar presented in these papers. Ho 00-961
has a percent cellulosic content of 47%, and HoCP 91-552 has a
percent cellulosic content of 48%. The percent cellulosic content is
calculated using the fiber content (as a measure of the cellulosic
content) presented in the papers, divided by the total solids
content (Brix + fiber). By contrast, energy cane cultivar L 79-1002,
which has a higher fiber content, has a Brix value of 8-12% cane, as
reported by Bischoff, K.P. et al., 2008. ``Registration of `L 79-
1002' sugarcane.'' Journal of Plant Registrations, 2(3) 211-217, and
Hale, A.L. 2010, ``Notice of release of a high fiber sugarcane
variety Ho 02-113.'' Sugar Bulletin, 88(10) 28-29.
---------------------------------------------------------------------------

    Upon registration, fuel producers seeking to produce cellulosic
biofuel using energy cane feedstocks will need to submit data showing
that the average adjusted cellulosic content of each energy cane
cultivar they intend to use is at least 75%, based on the average of at
least three representative samples of each cultivar.\17\ Cultivars must
be grown under normal growing conditions and consistent with accepted
farming practices. Samples must come from a feedstock supplier that the
fuel producer intends to use when operating their production process
and must represent the feedstock supplier's range of growing conditions
and locations. Producers that decide after initial registration to use
energy cane or a new energy cane cultivar will need to update their
registration and provide data to EPA demonstrating the average adjusted
cellulosic content for each cultivar they intend to use. Cellulosic
content data must come from an analytical method certified by a
voluntary consensus standards body (VCSB) or a non-VCSB method that
would produce reasonably accurate results.\18\ Producers using a non-
VCSB approved method will need to show that the method used is an
adequate means of providing reasonably accurate results by providing
peer reviewed references to the third party engineer performing the
engineering review at registration. Because cane can be bred for a
variety of uses, and different cultivars of cane can have different
amounts of cellulosic material, these registration requirements will
help ensure that fuel producers know whether or not the cultivars they
intend to use meet the 75% adjusted cellulosic content threshold and
are qualified to generate RINs for the entire volume of finished fuel.
EPA expects to require similar registration requirements for producers
seeking to produce cellulosic biofuel using feedstocks that will be
evaluated in the future that could similarly be bred for a wide range
of uses and fiber content.
---------------------------------------------------------------------------

    \17\ As described above and in the Memorandum to the Docket,
``Cellulosic Content of Various Feedstocks--2014 Update,'' available
in docket EPA-HQ-OAR-2012-0401, adjusted cellulosic content is the
percent of organic (non-ash) material that is cellulose,
hemicellulose, and lignin. Therefore, a calculation of the adjusted
cellulosic content requires a measurement of the cellulosic content,
as well as a measurement of the ash content of a feedstock.
    \18\ For example, AOAC 2002.04 ``Amylase-Treated Neutral
Detergent Fiber in Feeds'' or ASTM E1758 ``Determination of
Carbohydrates in Biomass by High Performance Liquid
Chromatography.'' Voluntary consensus standards bodies are defined
as ``domestic or international organizations which plan, develop,
establish, or coordinate voluntary standards using agreed-upon
procedures.'' See ``Federal Use of Standards,'' Office of Management
and Budget, http://www.whitehouse.gov/omb/fedreg_a119rev.

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

c. Additional Registration, Recordkeeping, and Reporting Requirements
for Producers of Cellulosic Fuels Derived From the Simultaneous
Conversion of Feedstocks That Are Predominantly Cellulosic and
Feedstocks That Are Not Predominantly Cellulosic

    Under Sec.  80.1426(f)(3)(vi), if a renewable fuel producer
produces a single type of renewable fuel (e.g., ethanol) using two or
more different feedstocks which are processed simultaneously, and at
least one of the feedstocks does not have a minimum 75% average
adjusted cellulosic content, the producer would have to determine how
much of the finished fuel is derived from the cellulosic versus non-
cellulosic components of the feedstocks and assign RINs to the finished
fuel based on the relative ``converted fractions.'' \19\ Given
variations in individual conversion processes, enzymes used, and other
differences, the amount of finished fuel that is derived from the
cellulosic content can vary. For example, the process and enzymes used
may do a better job of converting the sugars and starches in a
feedstock than the cellulose or hemicellulose. In such a case the
cellulosic content of the feedstock may not be a good indicator of the
amount of finished biofuel that is derived from cellulosic materials.
Furthermore, depending on the conversion process used, the amount of
information needed to determine how much of the finished fuel is
derived from the cellulosic content will also vary.
---------------------------------------------------------------------------

    \19\ See Sec.  80.1426(f)(3)(vi). Converted fraction refers to
the portion of the feedstock converted into renewable fuel by the
producer and is used in calculating cellulosic RIN volumes
generated.
---------------------------------------------------------------------------

    Therefore, EPA believes it is prudent to include specific
requirements related to calculating the cellulosic converted fraction
and to specify appropriate registration, recordkeeping, and reporting
requirements for producers seeking to generate cellulosic RINs using
two or more feedstocks \20\ which are processed simultaneously. EPA has
attempted to minimize additional requirements, so has limited certain
provisions to circumstances where a producer seeks to generate
cellulosic RINs for fuel produced by ``in situ'' biochemical hydrolysis
treatment where cellulosic and non-cellulosic components of feedstocks
(at least one of which is not predominantly cellulosic) are
simultaneously hydrolyzed to fermentable sugars (e.g., corn starch and
a crop residue). These additional registration, recordkeeping, and
reporting requirements will also apply to producers that combine
cellulosic- and non-cellulosic-derived sugars from separate hydrolysis
units prior to fermentation. In the latter case, the cellulosic
conversion factor can be obtained by analyzing feedstock conversion in
the cellulosic hydrolysis unit.
---------------------------------------------------------------------------

    \20\ As described in section IV.A.5, if a future feedstock does
not meet the 75% threshold, we consider it as comprised of two
separate feedstocks: one cellulosic and one non-cellulosic.
---------------------------------------------------------------------------

    A fundamental distinction relevant to verifying conversion of
cellulosic content is whether or not a process converts the entire
organic fraction into fuel. Thermochemical conversion is an example of
a process that converts the entire organic fraction. Thermochemical
processes mainly consist of (1) pyrolysis: a process in which
cellulosic biomass is decomposed with temperature to bio-oils that can
be further processed to produce a finished fuel or (2) gasification: a
process in which cellulosic biomass is decomposed to synthesis gas
(``syngas'') that with further catalytic processing can produce a
finished fuel product. Thermochemical processes typically convert all
of the organic components of the feedstock into finished fuel, thus the
finished fuel produced from the thermochemical process is proportional
to the cellulosic content of the organic fraction of the feedstock
material.
    Alternatively, biochemical conversion is an example of a non-
thermochemical type of process that does not convert the entire organic
fraction into fuel. Biochemical processes convert different fractions
of the cellulosic and non-cellulosic carbohydrates to finished fuel.
During this process, enzymatic hydrolysis releases sugars from
feedstock carbohydrates and employs microorganisms to convert those
sugars into fuels.
    Since thermochemical processes typically convert all of the organic
components of the feedstock into finished fuel, fewer recordkeeping and
reporting requirements are necessary to verify appropriate cellulosic
biofuel RIN generation for producers using thermochemical conversion
processes. In addition, since the finished fuel produced from the
thermochemical process is proportional to the cellulosic content of the
organic fraction of the feedstock material, demonstration of the
cellulosic content of the feedstock is the only additional registration
requirement that is necessary for thermochemical processes. In
contrast, biochemical conversion does not convert the entire organic
fraction into fuel and the converted fraction is variable and not
proportional to the cellulosic content of the organic fraction of the
feedstock material. Therefore, we believe it is prudent to require
additional registration, reporting, and recordkeeping requirements for
in situ biochemical conversion processes to ensure that cellulosic RINs
are appropriately generated for the finished fuel.
    In the proposal, EPA requested comment on conversion technologies,
and we also requested comment on whether to allow 100% of the fuel
produced via biochemical processes to generate cellulosic RINs. EPA
received comments supporting our proposal to allow biochemical
processes to generate 100% cellulosic RINs but, as discussed above,
biochemical processes will also typically convert portions of the sugar
and starch components of the feedstock. If feedstocks containing
significant amounts of starches and sugars are used in a biochemical
process, the resulting fuel may not be predominantly of cellulosic
origin. Therefore, EPA is not finalizing this aspect of its proposal.
Instead, EPA has finalized the cellulosic threshold approach which will
generally allow cellulosic biofuel RIN generation for all fuel produced
by cellulosic conversion processes using feedstocks determined to have
an average adjusted cellulosic content of at least 75%.
i. Registration Requirements
    As explained in section IV.A.4.a, at registration, producers
seeking to use a cellulosic biofuel pathway that converts cellulosic
biomass to fuel (currently listed in rows K, L, M, and N of Table 1 to
Sec.  80.1426), or as otherwise approved by EPA, must demonstrate the
ability to convert cellulosic components of their feedstock to fuel. In
addition, producers seeking to generate cellulosic RINs (D code of 3 or
7) using two or more different feedstocks (at least one of which does
not have at least 75% average adjusted cellulosic content) which are
processed simultaneously using a thermochemical conversion process will
be able to allocate cellulosic RINs using the formula in Sec.
80.1426(f)(3)(vi) where the cellulosic fraction is proportional to the
cellulosic content of the feedstock. The average adjusted cellulosic
content of the feedstock will have to be reported at registration,
based on the average of at least three representative samples, and
cellulosic content data must come from an analytical method certified
by a voluntary consensus standards body (VCSB) or a non-VCSB method
that would produce reasonably accurate

results.\21\ Producers using a non-VCSB approved method will need to
show that the method used is an adequate means of providing reasonably
accurate results by providing peer reviewed references to the third
party engineer performing the engineering review at registration.
Producers that later want to change their feedstock will need to update
their registration. Parties that initially registered prior to the
effective date of this rule must comply with the new requirements at
their next required registration update.
---------------------------------------------------------------------------

    \21\ For example, AOAC 2002.04 ``Amylase-Treated Neutral
Detergent Fiber in Feeds'' or ASTM E1758 ``Determination of
Carbohydrates in Biomass by High Performance Liquid
Chromatography.''
---------------------------------------------------------------------------

    Producers generating RINs with a D code of 3 or a D code of 7 using
two or more different feedstocks (at least one of which does not have
at least 75% average adjusted cellulosic content) which are processed
simultaneously through an in situ biochemical hydrolysis treatment will
similarly have additional registration requirements to help ensure that
cellulosic RINs are being generated accurately. At the time of
registration, such a producer must submit (1) the overall fuel yield
\22\ including supporting data demonstrating this yield and a
discussion of the possible variability in overall fuel yield that could
be expected between reporting periods; (2) the cellulosic converted
fraction that will be used for generating RINs under Sec.
80.1426(f)(3)(vi), including chemical analysis data (described in more
detail below) supporting the calculated cellulosic converted fraction
and a discussion of the possible variability that could be expected
between reporting periods; and (3) a description of how the cellulosic
converted fraction is determined and calculations showing how the data
were used to determine the cellulosic converted fraction.
---------------------------------------------------------------------------

    \22\ The overall fuel yield is determined to be the total volume
of fuel produced (e.g., cellulosic plus non-cellulosic fuel volume)
divided by the total feedstock mass (sum of all feedstock masses) on
a dry mass basis.
---------------------------------------------------------------------------

    Data used to calculate the cellulosic converted fraction by
producers using in situ biochemical hydrolysis treatment who seek to
generate cellulosic RINs must be representative and obtained using an
analytical method certified by a voluntary consensus standards body
(VCSB) or using a non-VCSB method that would produce reasonably
accurate results. If using a non-VCSB approved method to generate the
data required to calculate the cellulosic converted fraction for a
given fuel, then the producer will need to show that the method used is
an adequate means of providing reasonably accurate results by providing
peer reviewed references to the third party engineer performing the
engineering review at registration. A full description of the formulas
in Sec.  80.1426(f)(3) used to calculate RINs for renewable fuel
described by two or more pathways, including methods used to calculate
the converted fraction, can be found in the associated memo to the
docket.\23\
---------------------------------------------------------------------------

    \23\ ``Additional Detail on the Calculation of the Cellulosic
Converted Fraction, and Attribution of Batch RINs for D-code
Dependent Feedstocks,'' which is available in docket EPA-HQ-OAR-
2012-0401.
---------------------------------------------------------------------------

ii. Additional Cellulosic Converted Fraction Reporting and
Recordkeeping Requirements
    Producers generating cellulosic RINs using two or more different
feedstocks (at least one of which does not have at least 75% average
adjusted cellulosic content) which are processed simultaneously using
an in situ biochemical hydrolysis treatment will also have additional
recordkeeping and reporting requirements to provide ongoing
verification that the cellulosic RINs are being accurately allocated.
    The converted fraction provides a comprehensive accounting of the
portion of a feedstock that is converted into cellulosic fuel. The
formula in Sec.  80.1426(f)(3)(vi) requires producers to calculate a
converted fraction for each category of RINs generated. That converted
fraction is then used to determine the appropriate number and type of
RINs to assign to a batch of renewable fuel.
    Comments suggested calculating the amount of the finished fuel
derived from the cellulosic and non-cellulosic components could create
an administrative burden if required on a batch-by-batch basis. EPA is
structuring applicable registration, recordkeeping, and reporting
requirements in a manner intended to result in accurate accounting
while also avoiding overly burdensome requirements. Therefore the final
rule provides that the cellulosic converted fraction will initially be
based on the data submitted at registration.
    This upfront converted fraction determination will apply to RINs
produced until a new converted fraction allocation is available and
reported. The interval at which a new converted fraction must be
reported is similarly intended to avoid unnecessary burden on
producers. EPA is requiring that low volume producers calculate the
cellulosic converted fraction annually. However, for higher volume
producers, we believe more frequent calculating and reporting is
prudent and are requiring that the cellulosic converted fraction be
recalculated within 10 business days of every 500,000 gallons of
cellulosic RINs generated. This information will be reported in the
quarterly report. Low-volume producers may report the current converted
fraction value used to generate RINs on their quarterly reports if they
have not produced 500,000 cellulosic gallons in the calendar year.
Periodic cellulosic converted fraction determinations will be made by
collecting new process data and performing the same chemical analysis
approved at registration, using representative data. If at any point
new data show that the converted fraction is different from that
reported in the previous period, the formula used to generate RINs at
Sec.  80.1426(f)(3)(vi) must be updated as soon as practical but no
later than 5 business days after the producer receives the new data. If
new testing data results in a change to the cellulosic converted
fraction, only RINs generated after the new testing data were received
would be affected. In addition if a renewable fuel producer changes
their process (for example, stops using enzymes in their cellulosic
hydrolysis or changes the enzymes used), the producer must calculate a
new converted fraction and update their registration consistent with
Sec.  80.1450(d).
    Given the natural variation in cellulosic content and conversion
efficiencies, EPA recognizes some variation will exist in the amount of
cellulosic fuel that is derived from the cellulosic components of a
feedstock. However, certain circumstances raise significant concerns
with respect to cellulosic RIN generation. While we believe that
variation within 10% of the previously calculated numbers may result
under normal operating conditions, larger variations raise concerns
that the process or feedstock has significantly changed from what was
approved at registration. If the cellulosic converted fraction deviates
from the previously calculated cellulosic converted fraction by 10% or
more, it is appropriate for the producer to alert EPA to this change
and update the formula used to calculate RIN allocations as soon as
possible. The producer must (1) notify EPA within 5 business days and
(2) adjust the formula used to generate RINs at Sec.  80.1426(f)(3)(vi)
for all fuel generated as soon as practical but no later than 5
business days after the producer receives the new data. As explained
above, if new testing data results in a change to the cellulosic
converted

fraction, only RINs generated after the new testing data were received
would be affected.
5. Determining the Average Adjusted Cellulosic Content of Feedstocks
Going Forward
    EPA will apply the minimum average adjusted cellulosic content
threshold framework described above for feedstocks evaluated in the
future. If these feedstocks meet the 75% average adjusted cellulosic
content threshold, we will allow the fuel producer using them in
approved cellulosic biofuel pathways to generate cellulosic RINs for
all of the finished fuel volume. If the feedstock does not meet the 75%
threshold, we would expect to create two separate regulatory pathways--
one involving ``cellulosic components of [feedstock X]'' and another
involving ``non-cellulosic components of [feedstock X]''). A producer
using both of these feedstocks which are processed simultaneously,
would allocate cellulosic and non-cellulosic RINs using the formula in
Sec.  80.1426(f)(3)(vi). Fuel producers using feedstocks evaluated in
the future would also be subject to the appropriate registration,
reporting, and recordkeeping requirements described in section IV.A.4.
    EPA anticipates that it will determine the cellulosic content of
newly evaluated feedstocks that might be used to produce cellulosic
biofuel up front when it conducts a lifecycle analysis of a pathway
involving the new feedstock. For example, EPA will calculate the
average adjusted cellulosic content of feedstocks such as energy
sorghum and energy beets at the same time that we evaluate the
lifecycle GHG emissions associated with these feedstocks. As with
lifecycle analyses, EPA may undertake the evaluation of the cellulosic
content of feedstocks either in the context of a rulemaking to amend
Table 1 to Sec.  80.1426, or in response to an individual petition
submitted pursuant to Sec.  80.1416. In either case, EPA will clarify
whether the feedstock meets the 75% cellulosic content threshold
allowing cellulosic RINs to be generated for the entire fuel volume
produced, or if the producer should use the apportionment method in
Sec.  80.1426(f)(3)(vi). Future petitioners pursuant to the process in
Sec.  80.1416 should submit peer-reviewed data on the average
cellulosic content of their feedstock as well as their own estimate of
cellulosic content based on these data.
    In the proposal, EPA sought comment on whether individual producers
should be responsible for submitting data on the cellulosic content of
their feedstock, or whether EPA should determine whether feedstocks
meet the threshold based on existing published data. We received
comments that EPA should determine whether feedstocks meet the
threshold and should use existing published data. In addition, we
received a range of opinions on whether the producer should also be
required to provide data. Some comments suggested that EPA should use
both existing published data and data from the producer, because
academic publications may not be up to date with industry. Some
comments said fuel producers should be allowed to present data if their
feedstocks have higher cellulosic content than published data. One
comment said that if no peer-reviewed data exist, the producers should
provide data. Some comments suggested that producers should be required
to maintain documentation of cellulosic content, as well as evidence
that the cellulosic content was the primary source of biofuels
production. Others commented that producers should not be required to
measure, submit and certify feedstock composition. In the future,
producers should submit data regarding cellulosic content in order to
ensure a determination is made on the most up to date data. EPA will
evaluate this information, together with other available information,
on a case by case basis to determine whether feedstocks meet the
cellulosic content threshold.
6. Other Comments Received
    EPA considered a range of alternative approaches for determining
appropriate cellulosic RIN generation with different types of
feedstocks. These approaches were discussed in the NPRM and also
evaluated in public comments. This section discusses these alternative
approaches and comments.
a. Treatment of Cellulosic Feedstocks Currently Listed in Table 1 to 40
CFR 80.1426
    In the NPRM, EPA sought comment on multiple approaches for
determining the volume of cellulosic RINs from currently approved
cellulosic feedstocks listed in Table 1 to Sec.  80.1426. Many
commenters preferred allowing feedstock sources listed in Table 1 to
Sec.  80.1426 to generate cellulosic RINs without applying a threshold,
although some commenters asserted a minimum content threshold could be
used in conjunction with the proposed approach. In addition, one
commenter suggested adding ``planted trees from a tree plantation'' to
Table 1 to Sec.  80.1426.\24\ However, this addition would require
further analysis of the lifecycle greenhouse gas emissions of this
feedstock, and is beyond the scope of this rule. As discussed above,
EPA is finalizing the cellulosic content threshold approach that
generally qualifies all fuel produced from predominantly cellulosic
feedstocks pursuant to existing cellulosic biofuel pathways listed in
Table 1 for cellulosic RINs. In addition, the approach will guide EPA
evaluation of future feedstocks not currently included in Table 1 to
Sec.  80.1426.
---------------------------------------------------------------------------

    \24\ Comment provided by Blue Source (EPA-HQ-OAR-2012-0401-
0137).
---------------------------------------------------------------------------

    Some commenters asserted EPA should adopt a plurality approach to
determining whether cellulosic RINs could be generated when using
particular feedstocks.\25\ Instead of requiring that the cellulosic
content make up a predominant percentage of the organic material from
which the fuel is derived, under this approach, feedstocks would be
deemed cellulosic if a plurality of the contained material is
cellulosic. EPA acknowledges that such an approach would likely lead to
larger production volumes of cellulosic biofuels. However, as discussed
above, the statutory definition of cellulosic biofuel provides that
they are ``derived from cellulose, hemicellulose, or lignin.'' EPA
believes that to effectuate Congressional intent in promoting fuels
derived from these sources, it is appropriate to require that
qualifying fuels be predominantly cellulosic in content. Therefore the
75% cellulosic content threshold approach adopted today is preferable
in this regard to the commenter's suggestion.
---------------------------------------------------------------------------

    \25\ Comments provided by Smithfield Foods (EPA-HQ-OAR-2012-
0401-0103) and the National Association of Clean Water Agencies
(EPA-HQ-OAR-2012-0401-0178).
---------------------------------------------------------------------------

    Other commenters contended EPA should establish a minimum
cellulosic content for individual feedstocks and assign RINs based only
on this content, instead of allowing feedstocks currently listed in
Table 1 to Sec.  80.1426 to generate cellulosic RINs for their entire
fuel volume.\26\ EPA believes this approach would create unnecessary
administrative and regulatory burden. Instead of setting a minimum
content for each individual feedstock, EPA is finalizing a single
cellulosic content threshold. EPA has determined that most of the
feedstocks listed in Table 1 to Sec.  80.1426 for cellulosic biofuel
pathways satisfy the 75% cellulosic content threshold adopted today. In

addition, as described in section IV.A.5, EPA will assess the
cellulosic content of future individual feedstocks as part of the
lifecycle analysis process and determine whether the feedstock exceeds
this threshold. Therefore, individual feedstocks will be analyzed to
determine if they meet the minimum cellulosic content threshold, and
different regulatory provisions apply depending on the result.
---------------------------------------------------------------------------

    \26\ Comments provided by AFPM/API (EPA-HQ-OAR-2012-0401-0128)
and Chevron (EPA-HQ-OAR-2012-0401-0171).
---------------------------------------------------------------------------

    Several commenters stated that the emphasis should be placed on
whether a feedstock meets the 60 percent reduction in greenhouse gas
emissions relative to the baseline petroleum fuel they replace,\27\
particularly where a feedstock is predominantly cellulosic.\28\ One
commenter also noted the agency should emphasize whether the feedstock
has similar overall environmental qualities as a feedstock that is
entirely cellulosic, such as the potential to avoid competition with
food, the potential to require less fertilizer, pesticides, and
irrigation, and the potential for a lower fossil fuel energy input
requirement.\29\ In response, EPA notes that it is required to
implement the statutory requirements, and that the CAA is clear that a
cellulosic biofuel must be both derived from cellulosic materials and
meet the 60 percent GHG emission reduction threshold. Therefore, EPA is
not free to establish regulations focusing exclusively on attainment of
the 60% GHG reduction threshold, while ignoring the cellulosic content
of the feedstock used to produce the fuel. In addition, EPA notes that
in determining whether or not the fuel produced pursuant to a
particular pathway satisfies the minimum 60 percent GHG reduction
threshold for cellulosic biofuel, EPA does take into consideration a
number of factors of concern to the commenter, including use of
fertilizer and amount of fuels consumed in the production process. The
Agency will continue to evaluate lifecycle emissions for feedstocks and
require this reduction in greenhouse gas emissions for cellulosic
pathways.
---------------------------------------------------------------------------

    \27\ Comments provided by BP (EPA-HQ-OAR-2012-0401-0130), Iowa
Corn Growers Association (EPA-HQ-OAR-2012-0401-0131), and NRDC (EPA-
HQ-OAR-2012-0401-0136).
    \28\ Comments provided by BP (EPA-HQ-OAR-2012-0401-0130) and
NRDC (EPA-HQ-OAR-2012-0401-0136).
    \29\ Comment provided by NRDC (EPA-HQ-OAR-2012-0401-0136).
---------------------------------------------------------------------------

    EPA also sought comment on a specified percentage approach, under
which fuels produced from feedstocks listed in Table 1 to Sec.  80.1426
would be eligible to generate cellulosic RINs for 85% of their volume,
and the remaining 15% would be eligible to generate advanced RINs. This
percentage was based on data that suggested that the average adjusted
cellulosic content of the predominantly cellulosic feedstocks currently
listed in Table 1 for cellulosic biofuel pathways was approximately
85%. Commenters generally opposed the specified percentage approach,
asserting that it would create administrative burden to track two
classes of RINs, that a partial loss of cellulosic RINs could hurt the
financial viability of producers, and that there is the possibility of
RIN generation errors.\30\
---------------------------------------------------------------------------

    \30\ Comments provided by National Sorghum Producers (EPA-HQ-
OAR-2012-0401-0065), the Renewable Fuels Association (EPA-HQ-OAR-
2012-0401-0123), Weyerhaeuser (EPA-HQ-OAR-2012-0401-0140), NexSteppe
(EPA-HQ-OAR-2012-0401-0153), the Independent Fuel Terminal Operators
Association (EPA-HQ-OAR-2012-0401-0165) and Global Renewable
Strategies and Consulting, LLC (EPA-HQ-OAR-2012-0401-0184). Some
commenters expressed support for the specified percentage approach.
See comments provided by the AFPM/API (EPA-HQ-OAR-2012-0401-0128),
Phillips 66 (EPA-HQ-OAR-2012-0401-0102), Chevron (EPA-HQ-OAR-2012-
0401-0171), and Camco (EPA-HQ-OAR-2012-0401-0183).
---------------------------------------------------------------------------

    EPA has concluded that this approach would significantly increase
the complexity of the program without providing additional
environmental benefits. EPA believes the additional precision the
method would provide is not justified in light of the administrative
and regulatory burden associated with it, and that overall the
cellulosic content threshold approach we are adopting today provides an
appropriate balance of the competing considerations of precision and
adopting a workable approach. Therefore, for the reasons described
above, EPA is finalizing the content threshold approach.
b. Feedstocks With Lower Average Cellulosic Content Than Feedstocks
Currently Listed in Table 1 to Sec.  80.1426
    In the proposal, EPA also invited comment on how to treat
feedstocks that had lower average cellulosic content than the
feedstocks currently listed in Table 1 to Sec.  80.1426. Some
commenters suggested using an approach with multiple thresholds, where
fuel made from feedstocks that meet the highest cellulosic content
threshold would receive 100% cellulosic RINs, and fuel made from
feedstocks meeting lower thresholds would receive a fixed percentage of
cellulosic RINs, with the remaining fuel receiving advanced RINs. Some
comments suggested cellulosic RINs should not be generated for fuels
with low cellulosic content.\31\ Other commenters stated that the
existing regulations in Sec.  80.1426(f)(3) were sufficient to handle
the allocation of RINs for the cellulosic and non-cellulosic portions
of the finished fuel.\32\ They noted that these regulations already
provide a way to assign RINs for a mixture of fuel types with different
D-codes. After evaluating these comments, EPA has concluded that the
approach provided by the existing regulations in Sec.  80.1426(f)(3) to
allocating cellulosic and non-cellulosic RINs is preferable. This
system is already established, and is designed to accurately apportion
the finished fuel to account for cellulosic biofuel conversion,
potentially allowing for a greater proportion of cellulosic RIN
generation than would be allowed in establishing a series of thresholds
with fixed percentages of cellulosic RIN generation.
---------------------------------------------------------------------------

    \31\ Comments provided by NRDC (EPA-HQ-OAR-2012-0401-0136).
    \32\ Comments provided by the National Corn Growers Association
(EPA-HQ-OAR-2012-0401-0071), Novozymes North America, Inc. (EPA-HQ-
OAR-2012-0401-0088), and the Renewable Fuels Association (EPA-HQ-
OAR-2012-0401-0123), the Iowa Corn Growers Association (EPA-HQ-OAR-
2012-0401-0131), and Edeniq (EPA-HQ-OAR-2012-0401-0159).
---------------------------------------------------------------------------

B. Lifecycle Greenhouse Gas Emissions Analysis and Cellulosic
Determinations for Pathways Using Biogas as a Feedstock

    In the March 2010 RFS final rule, EPA established biogas as an
advanced fuel type (D code of 5) when derived from landfills, sewage
waste treatment plants, and manure digesters. Based on questions from
companies, EPA proposed to: (1) Modify the existing biogas pathway to
specify that compressed natural gas (CNG) or liquefied natural gas
(LNG) is the fuel and biogas from landfills, waste treatment plants,
and waste digesters is the feedstock; (2) allow fuels derived from
landfill biogas to qualify for cellulosic RINs rather than just
advanced RINs; (3) add a landfill biogas to renewable electricity
pathway; and (4) add a Fischer-Tropsch landfill biogas pathway.
    Based on comments and new data received, in this rule we are: (1)
Finalizing the proposed change to make CNG and LNG the fuel and biogas
from specified sources the feedstock; (2) expanding the cellulosic
pathways to include biogas from landfills, municipal wastewater
treatment facility digesters, agricultural digesters, and separated MSW
digesters; (3) finalizing the proposed change to add an advanced
pathway for fuels from waste digester biogas; and (4) expanding the
renewable

electricity pathway to include biogas from landfills, wastewater
treatment facility digesters, agricultural digesters, separated MSW
digesters, and waste digesters. Due to time constraints, we are not
finalizing a Fischer-Tropsch landfill biogas pathway at this time.
However, we expect to address this pathway in a future action.
    Our determinations regarding biogas derived renewable CNG, LNG and
electricity are discussed more fully in the following sections. This
section discusses:

 Changes Applicable to the Revised CNG/LNG Pathway from Biogas
 Determination of the Cellulosic Content of Biogenic Waste
Derived Biogas
[cir] Landfill gas and MSW waste digester biogas as cellulosic
[cir] Municipal wastewater treatment facility digester biogas as
cellulosic
[cir] Agricultural digester biogas as cellulosic
[cir] Biogas from Waste Digesters
 Consideration of Lifecycle GHG Emissions Associated With
Biogas Pathways
[cir] Upstream GHG Analysis of Biogas as a Renewable Fuel Feedstock
[cir] Flaring Baseline Justification
[cir] Lifecycle GHG Analysis for Electricity From Biogas
     Alternative Biogas Options and Comments

    The following section, ``Regulatory Amendments Related to Biogas''
will discuss additional clarifications and changes to the regulations
associated with the biogas pathways.
1. Changes Applicable to the Revised CNG/LNG Pathway From Biogas
    Prior to this rulemaking, an approved fuel pathway in Table 1 to
Sec.  80.1426(f)(1) allowed biogas from landfills, manure digesters or
sewage treatment plants to qualify as an advanced biofuel. We received
many requests about what fuel qualifies under this pathway, including
what renewable fuel types qualify under the term ``biogas,'' and what
are the eligible sources of biogas. In response, EPA proposed to make
several changes to the regulations related to biogas.
    EPA is now characterizing biogas as a transportation fuel feedstock
and is amending the existing biogas pathway in Table 1 to Sec.  80.1426
by changing the renewable fuel type in the pathway from ``biogas'' to
``renewable compressed natural gas (renewable CNG) and renewable
liquefied natural gas (renewable LNG).'' EPA is also changing the
feedstock type of ``landfills, manure digesters or sewage waste
treatment plants'' to ``biogas from landfills, municipal wastewater
treatment facility digesters, agricultural digesters, and separated MSW
digesters'' for a pathway producing cellulosic biofuels. Finally, EPA
is adding a new advanced biofuel pathway for fuels produced using
``biogas from waste digesters'' as the feedstock type.
    In this final rule, we are changing the term ``sewage waste
treatment plants'' to ``municipal wastewater treatment facility
digesters'' since ``sewage waste treatment plants'' is not a commonly
used term and to clarify that the digester is the source of the biogas.
We are also defining an ``agricultural digester'' as an anaerobic
digester that processes predominantly cellulosic materials including
animal manure, crop residues, and/or separated yard waste.
    The existing biogas pathway in Table 1 to Sec.  80.1426 refers to
``biogas'' as the renewable fuel type and ``landfills, manure digesters
and sewage waste treatment plants'' as the feedstock. Several companies
raised questions about whether the term ``biogas'' in this pathway
could refer to the unprocessed or raw gas from the landfills, manure
digesters or sewage treatment plants, or processed ``biogas'' that has
been upgraded and could be used directly for transportation fuel.
Companies also asked about use of biogas as an ingredient in the
production of transportation fuel, as an energy source used in the
production of transportation fuel, and other fuel types that can be
produced from the raw biogas either through a physical or chemical
process (such as CNG, LNG, renewable electricity, renewable diesel,
dimethyl ether or naphtha). These companies further inquired whether
the various forms of biogas discussed above could qualify under this
pathway and therefore be eligible for RIN generation under the RFS
program.
    The term ``biogas'' in this pathway is used broadly in the industry
to refer to various raw and processed forms of the biogas from various
sources. However, under the existing requirements in Sec.
80.1426(f)(10) and (11), only biogas that is used for transportation
fuel can qualify as renewable fuel for RIN generation under the RFS
program. EPA recognizes that raw biogas cannot be used directly in the
transportation sector and must be physically or chemically treated to
generate a finished transportation fuel eligible for RIN generation.
Raw biogas can be put through a physical process in which it is
compressed or liquefied to produce CNG or LNG. Because these fuels can
be used directly for transportation purposes, it seems appropriate to
identify these products as ``fuels'' that are produced using biogas.
    We are finalizing revisions to the definition of biogas and adding
new definitions for renewable CNG, renewable LNG, and agricultural
digester to Sec.  80.1401. This rulemaking clarifies that biogas means
a mixture of hydrocarbons that is a gas at 60 degrees Fahrenheit and 1
atmosphere of pressure that is produced through the anaerobic digestion
of organic matter. We are also finalizing revisions to clarify
renewable compressed natural gas (``renewable CNG'') means biogas or
biogas-derived pipeline quality gas that is compressed for use as
transportation fuel and that renewable liquefied natural gas
(``renewable LNG'') means biogas or biogas-derived pipeline quality gas
that goes through the process of liquefaction in which it is cooled
below its boiling point. Finally, this rulemaking clarifies that
agricultural digester means an anaerobic digester that processes
predominantly cellulosic materials, including animal manure, crop
residues, and/or separated yard waste.
    These finalized definitions reflect comments we received that
supported our changes to the ``biogas'' pathway as discussed above,
namely changing fuel to CNG/LNG and adding a description of the
applicable biogas feedstocks. The finalized definitions for CNG/LNG
also reflect comments we received suggesting that we clarify whether
CNG/LNG that is produced on-site and not sent through a pipeline would
fall within the pathway. In order to clarify that CNG/LNG produced on-
site and not sent through a pipeline would also qualify, the proposed
definitions of renewable CNG and LNG were modified to indicate that
either biogas or pipeline-quality gas can be compressed to make
renewable CNG and LNG.
2. Determination of the Cellulosic Content of Biogenic Waste-Derived
Biogas
    In order for fuels produced from biogas as a feedstock to qualify
for cellulosic RINs (D code of 3 or D code of 7), the renewable fuel
must be derived predominantly from cellulosic materials and must meet a
60% GHG emissions reduction threshold, as described in the following
sections.
    EPA proposed to allow renewable fuel derived from landfill biogas
to qualify as cellulosic biofuel and solicited comment on whether
biogas from other sources should also be qualified as cellulosic
biofuel. Based on new data and comments received during our public
review process, EPA has determined that biogas generated by

landfills, municipal wastewater treatment facility digesters,
agricultural digesters, and separated MSW digesters are predominantly
cellulosic in origin, and that biogas derived from waste digesters
processing non-cellulosic renewable biomass therefore qualifies as an
advanced biofuel feedstock. Data supporting these determinations are
discussed in more detail in an associated memo to the docket,\33\ and
the main findings are provided forthwith.
---------------------------------------------------------------------------

    \33\ ``Support for Classification of Biofuel Produced from Waste
Derived Biogas as Cellulosic Biofuel and Summary of Lifecycle
Analysis Assumptions and Calculations for Electricity Biofuel
Produced from Waste Derived Biogas,'' which is available in docket
EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

a. Landfill Biogas and MSW Digester Biogas as Cellulosic in Origin
    In the June 2013 NPRM, EPA proposed to classify renewable fuels
produced from landfill biogas as derived from cellulose, hemicellulose
or lignin, and therefore eligible to generate cellulosic RINs (D code
of 3 and D code of 7). EPA cited a 1989 study that concluded that not
only was the average cellulosic content of the organic fraction of
municipal solid waste (OFMSW) \34\ approximately 90%, but that roughly
90% of the methane generated in landfills was derived from the
cellulose and hemicellulose \35\ portions of the OFMSW as the basis for
this proposal.
---------------------------------------------------------------------------

    \34\ The study specifies the ``volatile solids'' of the MSW to
be 90% cellulosic. Volatile solids refer to organic compounds of
plant or animal origin that have caloric value and are susceptible
to bioconversion during anaerobic digestion.
    \35\ Barlaz, M.A., R.K. Ham, and D.M. Schaefer. 1989. Mass-
balance analysis of anaerobically decomposed refuse. Journal of
Environmental Engineering, 15(6) 1088-1102.
---------------------------------------------------------------------------

    Some commenters argued that MSW landfill gas was not cellulosic
because a large portion of the waste disposed is food waste which
contains some non-cellulosic components. We do not believe this affects
our determination for several reasons. Our cellulosic content
determination is based on an average mixture of MSW components that
includes food waste. Since the average cellulosic content of the
organic fraction of MSW is approximately 90%, EPA believes that organic
matter in MSW landfills is predominantly cellulosic in origin.
Furthermore, many of the non-cellulosic components of food waste are
oxidized in the early stages of waste decomposition during the
collection, handling and transportation and released as CO2
instead of CH4. Therefore, a greater proportion of the
biogas produced from anaerobic digestion (and subsequently used as a
transportation fuel) comes from the remaining cellulosic components.
    Some commenters stated that only about 27% of MSW landfill gas can
be considered to be derived from renewable biomass, and thus, any
transportation fuel derived from the biogas cannot even be considered
to be eligible for RIN generation. However, EPA determined in the March
2010 RFS rule that biogas from MSW landfills is derived from renewable
biomass, namely separated yard and food wastes, and EPA did not propose
to change that finding. Thus, this comment is not relevant to the
current rulemaking.
    EPA invited comment and data on the proposed approach to treat
landfill biogas as being derived from cellulose, hemicellulose and
lignin. Some commenters argued that landfill biogas should not be
considered as cellulosic,\36\ others supported considering landfill
biogas as cellulosic,\37\ and still others requested that EPA expand
the proposed determination to include biogas derived from additional
sources processing biogenic wastes as cellulosic.\38\ Commenters that
opposed considering landfill gas as cellulosic pointed to the EPA
proposal that relied on a single study to justify this approach. This
was not, in fact, the case, and EPA had reviewed, discussed and cited
numerous studies to support this determination.\39\ Moreover,
subsequent to the June 2013 proposal, EPA updated its literature review
and found additional peer reviewed studies that support our proposed
assessment that biogas from landfills is predominantly derived from
cellulosic components. The studies considered a broad spectrum of
landfills, including studies comparing differences among landfill
design, operating practices, regional influence, and typical waste
loadings throughout the United States over more than two decades.
Therefore, our determination that the biogas generated in landfills is
predominantly derived from cellulose and hemicellulose is well
supported.\40\
---------------------------------------------------------------------------

    \36\ See ``Comment submitted by Friends of the Earth, Sierra
Club, Center for a Competitive Waste Industry'', docket number EPA-
HQ-OAR-2012-0401-0164.
    \37\ See for example, ``Comment submitted by Kerry Kelly,
Director, Federal Public & Regulatory Affairs, Waste Management
(WM)'', docket number EPA-HQ-OAR-2012-0401-0112 and ``Comment
submitted by Stewart T. Leeth, Assistant Vice President,
Environmental and Corporate Affairs and Senior Counsel, Smithfield
Foods, Inc.'' docket number EPA-HQ-OAR-2012-0401-0103.
    \38\ See ``Comment submitted by Stewart T. Leeth, Assistant Vice
President, Environmental and Corporate Affairs and Senior Counsel,
and Dennis Treacy, Executive Vice President and Chief Sustainability
Officer, Smithfield Foods, Inc.'', docket number EPA-HQ-OAR-2012-
0401-0111, and ``Comment submitted by Cynthia A. Finley, Director,
Regulatory Affairs, National Association of Clean Water Agencies
(NACWA)'', docket number EPA-HQ-OAR-2012-0401-0178.
    \39\ ``Support for Cellulosic Determination for Landfill Biogas
and Summary of Lifecycle Analysis Assumptions and Calculations for
Biofuels Produced from Landfill Biogas,'' which has been placed in
docket EPA-HQ-OAR-2012-0401.
    \40\ Barlaz, M.A., R.K. Ham, and D.M. Schaefer. 1989. Mass-
balance analysis of anaerobically decomposed refuse. Journal of
Environmental Engineering, 15(6) 1088-1102. Mehta, R., Barlaz, M.A.,
Yazdani, R., Augenstein, D. Bryars, M. and Sinderson, L. 2002,
``Refuse Decomposition in the Presence and Absence of Leachate
Recirculation,'' J. Environ. Eng., 128, 3, 228-236 Staley, B. F. and
M. A. Barlaz, 2009, Composition of Municipal Solid Waste in the U.S.
and Implications for Carbon Sequestration and Methane Yield,'' J.
Environ. Eng. 135, 10, 901-909.
    Additional citations were offered in comments from Waste
Management.
---------------------------------------------------------------------------

    Since separated MSW digesters would use the same biogenic materials
that are present in landfills, and generate biogas by the same
anaerobic processes, a logical extension of the reasoning and data
described above justifies treating the biogas generated by digesters
processing separated MSW as cellulosic as well. Therefore, we have
included biogas from separated MSW digesters as a feedstock in
cellulosic biofuel pathway Q in Table 1 to Sec.  80.1426.
b. Municipal Wastewater Treatment Facility Digester Biogas as
Cellulosic
    For purposes of this rule, the term ``municipal wastewater
treatment facility digester'' means an anaerobic digester that
processes the sludge, undissolved solids, and biosolids derived from
municipal wastewater whether or not the facility is owned by a
municipality. While there are substantial data characterizing the
solids content of municipal wastewater, there are somewhat less data
characterizing the composition of materials entering the digesters
specifically. The average adjusted cellulosic content of the
unprocessed wastewater solids--including primary sludge, activated
sludge, and biosolids \41\--is greater than 75%.\42\ For the purposes
of calculating the average adjusted cellulosic content of materials
entering the wastewater treatment facility digesters, we believe it is
appropriate to use the subset of peer-

reviewed data that analyzes the activated sludge and biosolids.
---------------------------------------------------------------------------

    \41\ Activated sludge and biosolids typically refer to
aerobically treated residuals from the processing of municipal
wastewater solids.
    \42\ Wang, Xue. 2008. Feasibility of Glucose Recovery from
Municipal Sewage Sludges as Feedstocks Using Acid Hydrolysis.
Masters Thesis Queen's University, Ontario, Canada. Champagne, P. &
Li, C. 2009 ``Enzymatic hydrolysis of cellulosic municipal
wastewater treatment process residuals as feedstocks for the
recovery of simple sugars. Bioresource Technology. Vol 100 pp 5700--
5706. See memo to the docket: ``Support for Classification of
Biofuel Produced from Waste Derived Biogas as Cellulosic Biofuel and
Summary of Lifecycle Analysis Assumptions and Calculations for
Biofuels Produced from Waste Derived Biogas,'' available in docket
EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

    The material that enters the digester typically includes the
undissolved solids that are recovered from the primary clarification
tank and the solids that are allowed to settle out in a secondary
clarification tank following aerobic treatment. Therefore, the data for
activated sludge and biosolids resembles the material that actually
enters the digesters at wastewater treatment facilities. In addition,
the data related to activated sludge and biosolids is more consistent
and comparable, and therefore provides a more robust estimate of the
cellulosic content. The average adjusted cellulosic content was
obtained by dividing the reported cellulosic fraction by the
convertible organic fraction (minus the percent organic nitrogen, which
does not convert to methane). Based on these data, the activated sludge
and biosolids are on average composed of 22% cellulose, 36%
hemicellulose, and 21% lignin.\43\ Therefore, we estimate that the
material used to generate the biogas through anaerobic digestion from
wastewater treatment facilities is, on average, greater than 75%
cellulosic. These data and analyses are described in more detail in a
memo to the docket.\44\
---------------------------------------------------------------------------

    \43\ Wang, Xue. 2008. Feasibility of Glucose Recovery from
Municipal Sewage Sludges as Feedstocks Using Acid Hydrolysis.
Masters Thesis Queen's University, Ontario, Canada. Sun & Cheng.
2002. ``Hydrolysis of lignocellulosic materials for ethanol
production: a review. Bioresource Technology. Vol 83 pp 1-11.
    \44\ Data available for pre-digested biosolids and methods for
estimating the aggregate adjusted cellulosic content is presented in
the memo to the docket: ``Support for Classification of Biofuel
Produced from Waste Derived Biogas as Cellulosic Biofuel and Summary
of Lifecycle Analysis Assumptions and Calculations for Biofuels
Produced from Waste Derived Biogas,'' available in docket EPA-HQ-
OAR-2012-0401.
---------------------------------------------------------------------------

c. Agricultural Digester Gas as Cellulosic
    In this rule we are defining ``agricultural digesters'' to be
``anaerobic digesters that process predominantly cellulosic materials,
including animal manure, crop residues, and/or separated yard waste,''
and have identified biogas from such digesters as a feedstock for the
production of cellulosic biofuel. Based on EPA's AgSTAR data, we have
estimated that animal manure, crop residues and yard wastes represent
over 90% of the materials being processed in agricultural digesters. As
discussed in section IV.A, EPA has determined that crop residues and
yard wastes are predominantly cellulosic. As to animal manure, we
received in response to our proposal data indicating that animal manure
is predominantly cellulosic.\45\ Based on these data, animal manure is
on average composed of 25% cellulose, 21% hemicellulose, and 17%
lignin. When divided by the organic fraction (minus the percent organic
nitrogen, which does not convert to methane), we estimate that the
material used to generate the biogas through anaerobic digestion from
agricultural digesters is, on average, greater than 75% cellulosic.\46\
Therefore, in this rule we are including biogas from agricultural
digesters in the cellulosic biofuel pathway in row Q of Table 1 to
Sec.  80.1426. Note that digesters that primarily process food wastes
that cannot be demonstrated to be cellulosic in origin would fall in
the general waste digester category discussed in the following section,
and could be eligible to produce advanced biofuel instead of cellulosic
biofuel.
---------------------------------------------------------------------------

    \45\ Chen, S., et. al., 2003, Value Added Chemicals from Animal
Manure. Pacific Northwest Laboratory, PNNL--14495. December 2003.
    \46\ See memo to the docket: ``Support for Classification of
Biofuel Produced from Waste Derived Biogas as Cellulosic Biofuel and
Summary of Lifecycle Analysis Assumptions and Calculations for
Biofuels Produced from Waste Derived Biogas,'' available in docket
EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

d. Biogas From Waste Digesters
    The current regulations identify biogas from manure digesters as an
advanced biofuel. As described above, we have determined that animal
manure is predominantly cellulosic, and therefore have determined that
fuel made from biogas derived from agricultural digesters processing
predominantly cellulosic feedstocks (such as animal manure, crop
residues, and yard wastes) qualifies for cellulosic biofuel RINs.
However, additional types of renewable biomass may be processed in
anaerobic waste digesters. For example, non-manure animal wastes and
separated food wastes containing predominantly starches and sugars may
be processed in waste digesters that produce biogas. Based on our
analyses of biogas from other sources of anaerobic decomposition,
described in section IV.B.3, below, we are confident that fuel made
from biogas from waste digesters will satisfy the 50% greenhouse gas
reduction threshold for advanced biofuels. Therefore, we are including
in Row T of Table 1 to Sec.  80.1426, an advanced biofuel pathway for
fuel made from biogas derived from waste digesters.
3. Consideration of Lifecycle GHG Emissions Associated With Biogas
Pathways
    Biogas, consisting primarily of methane and carbon dioxide (with
trace amounts of other gases), is produced during the microbial
mediated decomposition of organic wastes. In anaerobic environments
with available organic material such as landfills, organic conversion
to biogas proceeds slowly over decades producing large amounts of
methane. While methane is a potent greenhouse gas, it is also a
combustible gas and valuable feedstock for the production of other
fuels. Biogas collection systems are currently used at landfills to
recover and destroy methane by flaring or to recover methane for energy
generation or fuel production. Further, the natural anaerobic
decomposition of organic wastes occurring in landfills can be exploited
and optimized in controlled systems (such as waste digesters) to
convert organic wastes to biogas for energy generation or fuel
production. In this section we will discuss our GHG analysis of fuels
made from waste derived biogas.
a. Upstream GHG Analysis of Biogas as a Renewable Fuel or Fuel
Feedstock
    The March 2010 RFS final rule concluded that municipal solid waste
has no agricultural or land use change GHG emissions associated with
its production. In the NPRM, we proposed to add a new pathway to Table
1 to Sec.  80.1426 that used biogas from landfills to produce renewable
electricity, CNG or LNG as transportation fuels. In the NPRM, we
proposed that no new renewable feedstock production modeling was
required, and that no GHG emissions would be attributed to feedstock
production, which was consistent with the analysis we had done for the
landfill biogas pathway included in the March 2010 RFS final rule. In
addition, as described in more detail below, EPA believes that the GHG
emissions assumptions for biogas generated at MSW landfills applies to
biogas from municipal wastewater treatment facility digesters,
agricultural digesters, separated MSW digesters, and waste digesters.
    We received several comments supporting this approach for
landfills, and it is consistent with other Agency analysis conducted
for the annual Inventory of US GHG Emissions and Sinks, which assumes
that MSW poses no land use or carbon stock changes.\47\

However, we also received comment opposing this approach on the grounds
that it would incentivize landfilling over other more GHG-beneficial
waste disposal methods.
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    \47\ ``Solid Waste Management and Greenhouse Gases: A Life-Cycle
Assessment of Emissions and Sinks''. Prepared by ICF for the U.S.
Environmental Protection Agency (EPA) Office of Solid Waste, EPA530-
R-06-004, September 2006.
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    Commenters did not provide new data or analysis that supported the
assertion that allowing biogas-derived fuels from landfills to generate
cellulosic rather than advanced RINs or adding new biogas-to-biofuel
pathways would significantly reduce recycling and reuse rates. If waste
management methods were impacted by use of biogas for transportation
fuel, there could be indirect GHG emissions impacts. However, waste
management policies are typically controlled by state and local
governments, and there are many unique factors that influence these
decisions. We have not seen any evidence or data to suggest that the
RFS in general has had or will have a substantial impact on existing
waste disposal practices across the U.S., and therefore we believe that
there will not be significant GHG impacts associated with the biogas-
based pathways adopted in this rule. In fact, MSW landfilling rates
over the past 50 years have continuously decreased even as both
recycling rates and biogas collection have increased significantly.
Over the past 10 years as both the per capita and overall MSW
generation rates have decreased slightly, the percentage of total trash
diverted for recycling has increased.\48\ Moreover, energy from waste
technologies, such as fuels derived from landfill biogas, can be viewed
as a form of waste reuse itself. Incentivizing the use of biogas for
fuel production establishes biogas recovery as an operating parameter
to be actively optimized--promoting technology that reduces fugitive
emissions from landfills.
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    \48\ ``Municipal Solid Waste (MSW) in the United States: Fact
and Figures''. EPA's Annual Waste Trends Report. 2012 Facts and
Figures Facts Sheet; http://www.epa.gov/osw/nonhaz/municipal/pubs/2012_msw_fs.pdf.
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    Other commenters argued that we should begin our lifecycle GHG
analysis at the point of waste generation, in which case our comparison
would be to an alternative disposal method like recycling of waste
paper, composting, or anaerobic digestion. This approach is not being
employed because, as mentioned previously, we do not believe that the
biogas pathways adopted today will have a substantial impact on
existing waste disposal methods, and therefore no significant GHG
impacts from waste disposal changes are anticipated as a result of this
rule.
    EPA does not believe that allowing landfill biogas to generate
cellulosic rather than advanced RINs will incentivize landfilling, and
we are therefore not changing our assumptions regarding the upstream
analysis of feedstocks as part of this final rule. However, we will
reevaluate our lifecycle GHG baseline assumptions in subsequent
rulemakings if new evidence and supporting data suggest that changes in
the waste management system are occurring as a result of these
policies.
b. Flaring Baseline Justification
    Landfills currently treat their landfill gas, which is comprised of
approximately 50% methane, in one of several ways. Municipal solid
waste (MSW) landfills are required by EPA regulations to capture and
control their biogas if they are designed to collect at least 2.5
million megagrams (Mg) and 2.5 million cubic meters of waste and
emitting at least 50 Mg of non-methane organic compounds per year.\49\
These large, regulated landfills represent a small percentage of all
landfills by number but are responsible for the majority of biogas
emissions from landfills. To comply with regulations, these landfills
must at a minimum combust their biogas in a flare, converting the
methane to carbon dioxide, a less potent GHG. They may also use it for
other purposes, including to generate electricity, in which case the
electricity produced may displace electricity from other, higher GHG-
emitting sources (such as gas-fired power plants) once it enters the
grid.\50\ Many smaller, unregulated landfills do not collect their
biogas, and this methane is ``vented'' to the atmosphere. Larger
regulated landfills do collect the biogas and are assumed to have an
average biogas collection efficiency of 75%.\51\ In 2012, 14,089 Gg of
methane was generated at all landfills (regulated and unregulated), of
which 4,608 Gg (33%) was collected and combusted in gas-to-energy
projects, 4,040 Gg (29%) was collected and flared, and the rest was
either uncollected or collected and vented.\52\
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    \49\ Standards of Performance for New Stationary Sources and
Guidelines for Control of Existing Sources: Municipal Solid Waste
Landfills, 61 FR 9905, Federal Register Volume 61, Issue 49 (March
12, 1996).
    \50\ Some facilities also use the biogas directly in boilers and
other applications or purify the biogas to create CNG or LNG or
inject it directly into natural gas pipelines.
    \51\ Environmental Protection Agency. 2012. Inventory of U.S.
Greenhouse Gas Emissions and Sinks: 1990-2010, Annex 3:
Methodological Descriptions for Additional Source or Sink
Categories. http://epa.gov/climatechange/emissions/usinventoryreport.html. As of December 2012, landfills produced 1913
MW of electricity based on figures from LMOP. This electricity would
be almost entirely sold for use on the grid. From http://www.epa.gov/lmop/projects-candidates/index.html. Environmental
Protection Agency, Landfill Methane Outreach Program. 2010. LFG
Energy Project Development Handbook: Chapter 2. Landfill Gas
Modeling. http://epa.gov/lmop/publications-tools/handbook.html.
    \52\ National Greenhouse Gas Emissions Data. 2011. Chapter 8:
Waste. http://epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2013-Chapter-8-Waste.pdf.
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    For the landfill gas-to-electricity pathway, we proposed to use
landfills that flare their biogas as providing the baseline GHG
emissions for use in comparison to scenarios involving production of
electricity from the landfill biogas. We chose this baseline because
these landfills are the ones most likely to convert to gas-to-energy
projects, since they already have gas collection systems in place and
are relatively larger landfills producing higher quantities of biogas.
Small unregulated landfills might be unable to generate enough biogas
to justify the expense of collecting it for conversion to renewable
fuels. However, if such small landfills were to capture and use their
biogas in transportation fuels, there would be a significantly greater
reduction in GHG emissions than would be occasioned by the shift from a
flaring landfill to a gas-to-energy project, since a flaring system
represents a significant improvement in GHG emissions over a landfill
that simply vents its methane. Therefore, if the shift from a flaring
landfill to a gas-to-energy project results in a 50% reduction in GHG
emissions, the shift of a venting landfill to a gas-to-energy project
would result in GHG reductions substantially larger than 50%. Since
landfills that currently have gas-to-energy projects in place at one
point either replaced flaring with a gas-to-energy project or installed
a gas-to-energy project as an alternative to the minimal compliance
route of flaring, we proposed to treat the emissions from these
landfills compared to the same flaring baseline. We show lifecycle
results calculated using alternative baselines and discuss our choice
of baseline in more depth in a memo to the docket.\53\ We received
comments in support of our flaring baseline approach. We did not
receive any comments that justified revising this baseline for the
pathway in Table 1,

therefore EPA is finalizing flaring as our baseline as proposed. We
received comment on the use of alternative baselines for specific
projects that we discuss below.
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    \53\ ``Support for Classification of Biofuel Produced from Waste
Derived Biogas as Cellulosic Biofuel and Summary of Lifecycle
Analysis Assumptions and Calculations for Electricity Biofuel
Produced from Waste Derived Biogas.'' Available in docket EPA-HQ-
OAR-2012-0401.
---------------------------------------------------------------------------

    Other commenters addressed the case of a landfill that is already
generating renewable electricity from landfill gas. The commenters
stated that with the increasing availability of plug-in hybrid electric
vehicles (PHEVs) and electric vehicles (EVs), it is likely that at
least some of the electricity that is currently being generated by
these landfills is going to charge these vehicles. The commenter argued
that if the landfill now signs contracts with these users, there will
be no change in GHG emissions, and fuel from this landfill biogas will
not achieve a 60% GHG reduction as required for cellulosic biofuels.
Although EPA considered the possibility of differentiating between
existing and new biogas projects,\54\ we believe that such an approach
would inappropriately punish ``early actors'' that have previously made
the decision to install gas-to-energy equipment, either to replace
flaring or as an alternative to installing flares. The fact that these
facilities made the upgrade to gas-to-energy production prior to the
availability of an RFS incentive to do so should not disqualify them.
These facilities are already leading performers, and their fuel should
be credited with the GHG reductions occasioned by the move away from
the flaring alternative even if that move happened in the past. This
approach is consistent with how we have treated the early
implementation of advanced technologies for all biofuels producers in
the past.
---------------------------------------------------------------------------

    \54\ ``Support for Classification of Biofuel Produced from Waste
Derived Biogas as Cellulosic Biofuel and Summary of Lifecycle
Analysis Assumptions and Calculations for Electricity Biofuel
Produced from Waste Derived Biogas,'' which is available in docket
EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

    We also believe that it is appropriate to use a flaring baseline
when considering emissions related to biogas production from municipal
wastewater treatment facility digesters, agricultural digesters,
separated MSW digesters, and waste digesters. Similar to landfills,
biogas from these sources could be vented, flared or used for
beneficial purposes. According to the American Biogas Council Web site,
of the 1,500 municipal wastewater treatment facility digesters that
produce biogas, about 250 use the biogas; for the other 1,250, the
biogas is flared. For agricultural digesters the alternative to
beneficial use of the biogas is typically that the methane would have
been emitted. We believe a similar situation exists with respect to
separated MSW, and therefore we use that same flaring baseline for both
of these systems. In fact for most waste digesters, the alternative is
that the waste would have gone to a landfill resulting in the same
baseline. Furthermore, wastewater treatment facilities that don't use
digester biogas for process energy, fuel production, or electrical
generation typically flare the unused biogas. Assuming that the biogas
is flared generally provides a conservative baseline. If sources that
are using flaring will achieve a 60% GHG reduction when converting to
electricity production, sources that are venting their methane will
certainly do so as well.
c. Lifecycle GHG Analysis for Electricity From Biogas
    The previous section discussed the baseline EPA has selected for
use in comparison to the biogas pathways under consideration.\55\ This
section discusses the lifecycle GHG emissions analyses of the pathways
adopted today, which are then compared to the baseline to determine if
the requisite GHG reductions are achieved.
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    \55\ The discussion here is limited to the new biogas to
electricity pathway adopted today. Lifecycle greenhouse gas emission
reductions required for the new cellulosic CNG and LNG pathways are
60% as compared to a 2005 fossil fuel baseline (50% reductions were
previously required for CNG and LNG for the advanced pathway). The
CNG and LNG lifecycle assessment for the 60% reduction requirement
is discussed in the memo placed in the docket: ``Support for
Classification of Biofuel Produced from Waste Derived Biogas as
Cellulosic Biofuel and Summary of Lifecycle Analysis Assumptions and
Calculations for Biofuels Produced from Waste Derived Biogas,''
available in docket EPA-HQ-OAR-2012-0401.
---------------------------------------------------------------------------

    As part of the proposed rule, EPA prepared a proposed assessment of
the lifecycle GHG emissions of renewable electricity produced from
landfill biogas. In doing so, we examined two main factors. The first
involved determining by how much emissions at a landfill employing
flaring would change upon installation of a gas-to-energy project. For
this calculation, we used emission factors from the GREET model.\56\
The second involved calculation of the decrease in GHG emissions caused
by powering the gas blowers already in use with biogas-derived
electricity produced on-site rather than grid electricity upon
installation of a gas-to-energy project at the landfill. This
calculation used data from the EPA Landfill Methane Outreach Project
(LMOP).\57\ For this analysis, we calculated how much electricity could
be generated and how much could be delivered off-site to the consumer
including consideration of on-site parasitic losses and on-site use. We
used values from LMOP to provide estimates of the relative shares of
different types of engines or turbines, the electricity generation
efficiency, parasitic losses, energy use in collecting and preparing
the biogas, and a value from the U.S. Energy Information Agency to
estimate distribution losses. Values used are discussed in more detail
in a memo to the docket.\58\
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    \56\ Argonne National Laboratory (2011) Greenhouse Gases,
Regulated Emissions, and Energy Use in Transportation Model (GREET),
Version 1 2011, http://greet.es.anl.gov/.
    \57\ EPA LMOP Data.
    \58\ ``Support for Classification of Biofuel Produced from Waste
Derived Biogas as Cellulosic Biofuel and Summary of Lifecycle
Analysis Assumptions and Calculations for Electricity Biofuel
Produced from Waste Derived Biogas.'' Available in docket EPA-HQ-
OAR-2012-0401.
---------------------------------------------------------------------------

    We calculated GHG emissions in two ways, per mmBtu electricity and
per mmBtu fuel equivalent which accounted for the drivetrain efficiency
of electric vehicles. In both cases we found that renewable electricity
produced from landfill gas meets the 60% GHG emission reduction
threshold required by the CAA, and thus qualifies as a cellulosic
biofuel. Compared with the gasoline that it would replace, these
projects would be accompanied by an 87% reduction in GHG emissions when
normalized per mmBtu electricity. Accounting for the improved
efficiency of EV drivetrains increases the GHG emissions reductions to
96%.
    We did not receive any comment on our lifecycle calculations and
are therefore finalizing our determination that renewable electricity
produced onsite from landfill gas meets the 60% reduction in GHG
emissions required by the CAA. This determination also applies to a
pathway where the electricity is generated off-site. The main
differences are removal of the credit associated with using biogas
electricity in on-site blowers, and adding emissions associated with
scrubbing the gas to pipeline quality, shipping it via pipeline, and
removing it from the pipeline to make electricity. Removing the credit
associated with use of biogas-derived electricity for onsite blowers
still results in a 75% reduction in GHG emissions when normalized per
mmBtu electricity, and the emissions associated with other aspects of a
pathway involving off-site electricity generation (e.g., scrubbing the
gas to pipeline quality, shipping it via pipeline, removing it to make
electricity) are not expected to change the result significantly.
    We believe that GHG emissions related to electricity produced with
biogas from municipal wastewater treatment facility digesters,
agricultural

digesters, separated MSW digesters, and waste digesters would be
similar to those for landfill biogas production. The analysis for
landfill biogas to electricity considered two main components: An
increase in emissions due to converting from flaring to electricity
generation and a credit associated with reduced grid electricity
purchased to run blowers. The change in emissions due to converting
from flaring to electricity generation that we assumed for landfill
biogas can be considered the same for other sources of biogas. In all
cases the emissions are based on the properties of the biogas itself,
and its combustion products, which are independent of the biogas
source. For other biogas sources there may be less need for purchased
grid electricity to run blowers since other biogas sources are
generally less distributed than gas collection at landfills. However,
even if the credit associated with the reduction in purchased grid
electricity for blowers is not considered for municipal wastewater
treatment facility digesters, agricultural digesters, separated MSW
digesters and waste digesters, compared with the gasoline baseline GHG
emissions of 98 kg CO2-eq/mmBtu, these projects would still
be accompanied by a 75% reduction in GHG emissions when normalized per
mmBtu electricity. The calculated reduction would be even greater if we
accounted for the improved efficiency of EV drivetrains. Therefore, we
have determined that pathways involving electricity production from
biogas derived from these other sources also meet the 60% lifecycle GHG
reduction threshold and can be qualified as cellulosic biofuel
(assuming all other definitional and regulatory requirements are
satisfied). It is important to note that RINs may only be generated for
electricity from biogas that can be tracked to use in the
transportation sector, such as by an electric vehicle.
4. Alternative Biogas Options and Comments
a. Alternative Baseline Approaches
    We received comments in support of our flaring baseline approach.
However, we also received several comments arguing for alternative
approaches. Several commenters wanted EPA to allow parties to use a
non-flaring baseline where it can be shown that the landfill providing
biogas is not required to have a flare or other methane controls. For
the basis of our biogas pathways in Table 1, EPA is not changing the
baseline comparison of flaring for the reasons stated above, that on
average it is the baseline landfill condition that would be replaced.
In addition, EPA had determined that the biogas to energy pathways
evaluated are all calculated to achieve at least a 60% reduction in GHG
emissions required by the CAA when a change from landfill flaring is
assumed. Assuming venting instead of flaring as a baseline landfill
condition would improve the calculated benefits of the projects, but
would not change the applicable RFS GHG threshold determination.
Accordingly, there is no purpose served by these comments for purposes
of today's rule.
b. Additional Comments on Lifecycle Analysis for Renewable Electricity
    In addition to the comments discussed above, we also received
comment suggesting that we include electricity from biomass sources
such as woody biomass as a pathway in Table 1 to Sec.  80.1426.
However, evaluation of the lifecycle GHG emissions associated with
generating electricity from woody biomass or other biomass sources
would involve substantially different considerations from our analysis
of electricity production from biogas sources, and is beyond the scope
of this rule. Therefore EPA is not finalizing an electricity pathway
from other types of biomass at this time. We also received comments on
adding pathways for biogas to transportation fuels other than CNG/LNG
and electricity. These other fuel types included dimethyl ether (DME)
and hydrogen (H). However, assessing emissions associated with these
production processes is also beyond the scope of this rule.
    We received comment seeking clarification of whether electricity
from landfill biogas or other approved biogas sources that was used in
trains would qualify for RIN generation. EPA has determined that
electricity used in trains is not a ``transportation fuel'' as defined
in the Clean Air Act. Electricity from RFS-approved biogas sources that
is used in trains does not ``replace or reduce the use of fossil fuel
present in transportation fuel'', and therefore does not meet the
statutory definition of a ``renewable fuel'' eligible for RIN
generation in the RFS program.
    Commenters also asked whether electricity from landfill biogas or
other approved biogas sources that was used to compress natural gas
would be eligible for RIN generation, if the natural gas was used for