compliant exemption to continue indefinitely with the limitations we
proposed. Therefore we are making final this interpretation in today's
rule.
b. Definition of Commenced Construction
    In defining ``commence'' and ``construction'', we proposed to use
the definitions of ``commence'' and ``begin actual construction'' from
the Prevention of Significant Deterioration (PSD) regulations, which
draws upon definitions in the Clean Air Act. (40 CFR 52.21(b)(9) and
(11)). Specifically, under the PSD regulations, ``commence'' means that
the owner or operator has all necessary preconstruction approvals or
permits and either has begun a continuous program of actual on-site
construction to be completed in a reasonable time, or entered into
binding agreements which cannot be cancelled or modified without
substantial loss.'' Such activities include, but are not limited to,
``installation of building supports and foundations, laying underground
pipe work and construction of permanent storage structures.'' We
proposed adding language to the definition that is currently not in the
PSD definition with respect to multi-phased projects. We proposed that
for multi-phased projects, commencement of construction of one phase
does not constitute commencement of construction of any later phase,
unless each phase is ``mutually dependent'' on the other on a physical
and chemical basis, rather than economic.
    The PSD regulations provide additional conditions beyond addressing
what constitutes commencement. Specifically, the regulations require
that the owner or operator ``did not discontinue construction for a
period of 18 months or more and completed construction within a
reasonable time.'' (40 CFR 52.21(i)(4)(ii)(c)). While ``reasonable
time'' may vary depending on the type of project, we proposed that for
RFS2 a reasonable time to complete construction of renewable fuel
facilities be no greater than 3 years from initial commencement of
construction. We sought comment on this time frame.
    Commenters generally agreed with our proposed definition of
commenced construction. Some commenters felt that the 3 year time frame
was not a ``reasonable time'' to complete construction in light of the
economic difficulties that businesses have been and will likely
continue to be facing. We recognize that there have been extreme
economic problems in the past year. Based on historical data which show
construction of ethanol plants typically take about one year, we
believe that the 3-year time frame allows such conditions to be taken
into account and that it is an appropriate and fair amount of time to
allow for completion. Therefore, we are not extending the amount of
time that constitutes ``reasonable'' to five years as was suggested.
c. Definition of Facility Boundary
    We proposed that the grandfathering and deemed compliant exemptions
apply to ``facilities.'' Our proposed definition of this term is
similar in some respects to the definition of ``building, structure,
facility, or installation'' contained in the PSD regulations in 40 CFR
52.21. We proposed to modify the definition, however, to focus on the
typical renewable fuel plant. We proposed to describe the exempt
``facilities'' as including all of the activities and equipment
associated with the manufacture of renewable fuel which are located on
one property and under the control of the same person or persons.
Commenters agreed with our proposed definition of ``facility'' and we
are making that definition final today.
d. Proposed Approaches and Consideration of Comments
    We proposed one basic approach to the exemption provisions and
sought comment on five additional options. The basic approach would
provide an indefinite extension of grandfathering and deemed compliant
status but with a limitation of the exemption from the 20% GHG
threshold to a baseline volume of renewable fuel. The five additional
options for which we sought

comment were: (1) Expiration of exemption for grandfathered and
``deemed compliant'' status when facilities undergo sufficient changes
to be considered ``reconstructed''; (2) Expiration of exemption 15
years after EISA enactment, industry-wide; (3) Expiration of exemption
15 years after EISA enactment with limitation of exemption to baseline
volume; (4) ``Significant'' production components are treated as
facilities and grandfathered or deemed compliant status ends when they
are replaced; and (5) Indefinite exemption and no limitations placed on
baseline volumes.
i. Comments on the Proposed Basic Approach
    Generally, commenters supported the basic approach in which the
volume of renewable fuel from grandfathered facilities exempt from the
20% GHG reduction threshold would be limited to baseline volume. One
commenter objected to the basic approach and argued that the statute's
use of the word ``new'' and the phrase ``after December 19, 2007''
provided evidence that facilities which commenced construction prior to
that date would not ever be subject to the threshold regardless of the
volume produced from such facilities. In response, we note first that
the statute does not provide a definition of the term ``new
facilities'' for which the 20% GHG threshold applies. We believe that
it would be reasonable to include within our interpretation of this
term a volume limitation, such that a production plant is considered a
new facility to the extent that it produces renewable fuel above
baseline capacity. This approach also provides certainty in the
marketplace in terms of the volumes of exempt fuel, and a relatively
straightforward implementation and enforcement mechanism as compared to
some of the other alternatives considered. Furthermore, EPA believes
that the Act should not be interpreted as allowing unlimited expansion
of exempt facilities for an indefinite time period, with all volumes
exempt, as suggested by the commenter. Such an approach would likely
lead to a substantial increase in production of fuel that is not
subject to any GHG limitations, which EPA does not believe would be
consistent with the objectives of the Act.
    We solicited comment on whether changes at a facility that resulted
in an increase in GHG emissions, such as a change in fuel or feedstock,
should terminate the facility's exemption from the 20 percent GHG
threshold. Generally, commenters did not support such a provision,
pointing out that there are many variations within a plant that cannot
be adequately captured in a table of fuel and feedstock pathways as we
proposed (see 74 FR 24927). Implementing such a provision would create
questions of accounting and tracking that would need to be evaluated on
a time-consuming case-by-case basis. For example, if a switch to a
different feedstock or production process resulted in less efficiency,
facilities may argue that they are increasing energy efficiency
elsewhere (e.g. purchasing waste heat instead of burning fuel onsite to
generate steam). We would then need to assess such changes to track the
net energy change a plant undergoes. Given the added complexity and
difficulty in carrying out such an option, we have decided generally
not to implement it. There is an exception, however, for ``deemed
compliant'' facilities. These facilities achieve their status in part
by being fired only by natural gas or biomass, or a combination
thereof. Today's rule provides, as proposed, that these facilities will
lose their exemption if they switch to a fuel other than natural gas,
biomass, or a combination thereof, since these were conditions that
Congress deemed critical to granting them the exemption from the 20%
GHG reduction requirement.
    We also solicited comment on whether we should allow a 10%
tolerance on the baseline volume for which RINs can be generated
without complying with the 20% GHG reduction threshold to allow for
increases in volume due to debottlenecking. Some favored this concept,
while others argued that the tolerance should be set at 20 percent.
After considering the comments received, we have decided that a 10%
(and 20%) level is not appropriate for this regulation for the
following reasons: (1) We have decided to interpret the exemption of
the baseline volume of renewable fuel from the 20 percent requirement
as extending indefinitely. Any tolerance provided could, therefore, be
present in the marketplace for a considerable time period; (2)
increases in volume of 10% or greater could be the result of
modifications other than debottlenecking. Consistent with the basic
approach we are taking today towards interpreting the grandfathering
and deemed compliant provisions, we believe that the fuel produced as a
result of such modifications comes from ``new facilities'' within the
meaning of the statute, and should be subject to the 20% GHG reduction
requirement; (3) we are allowing baseline volume to be based on the
maximum capacity that is allowed under state and federal air permits.
With respect to the last reason, facilities that have been operating
below the capacity allowed in their state permits would be able to
claim a baseline volume based on the maximum capacity. As such, these
facilities may indeed be able to increase their volume by 10 to 20
percent by virtue of how their baseline volume is defined. We believe
this is appropriate, however, since their permits should reflect their
design, and the fuel resulting from their original pre-EISA (or pre-
2010, for deemed compliant facilities) design should be exempt from the
20% GHG reduction requirement. Nevertheless, we recognize and agree
with commenters that some allowances should be made for minor changes
brought about by normal maintenance which are consistent with the
proper operation of a facility. EPA is not aware of a particular study
or analysis that could be used as a basis for picking a tolerance level
reflecting this concept, We believe, however, that the value should be
relatively small, so as not to encourage plant expansions that are
unrelated to debottlenecking. We believe that a 5% tolerance level is
consistent with these considerations, and have incorporated that value
in today's rule.
ii. Comments on the Expiration of Grandfathered Status
    Commenters who supported an expiration of the exemption did so
because of concerns that the proposed approach of providing an
indefinite exemption would not provide any incentives to bring these
plants into compliance with current standards. They also objected to
plants being allowed an indefinite period beyond the time period when
it could be expected that they would have paid off their investors. The
commenters argued that the cost of operation for such plants would be
less than competing plants that do have to comply with current
standards; as such, commenters opposed to the basic approach felt an
indefinite exemption would be a subsidy to plants that will never
comply with the 20 percent threshold level. The renewable fuels
industry, on the other hand, viewed the options that would set an
expiration date (either via cumulative reconstruction, or a 15-year
period from date of enactment) as harsh, particularly if the lifecycle
analysis results make it costly for existing facilities to meet the 20%
threshold. Some also argued that no such temporal limitation appears in
the statute.
    We considered such comments, but in light of recent lifecycle
analyses we conducted in support of this rule we have concluded that
many of the current

technology corn ethanol plants may find it difficult if not impossible
to retrofit existing plants to comply with the 20 percent GHG reduction
threshold. In addition, the renewable fuels industry viewed the
alternative proposals that would set an expiration date (either via
cumulative reconstruction, or a 15-year period from date of enactment)
as harsh, particularly if the lifecycle analysis results make it costly
for existing facilities to meet the 20% threshold. Given the difficulty
of meeting such threshold, owners of such facilities could decide to
shut down the plant. Given such implications of meeting the 20 percent
threshold level for existing facilities we have chosen not to finalize
any expiration date.
e. Final Grandfathering Provisions
    For the reasons discussed above, the Agency has decided to proceed
with the proposed baseline volume approach, rather than the expiration
options. We hold open the possibility, therefore, of revisiting and
reproposing the exemption provision in a future rulemaking to take such
advances into account. Ending the grandfathering exemption after its
usefulness is over would help to streamline the ongoing implementation
of the program.
    The final approach adopted today is summarized as follows:
i. Increases in volume of renewable fuel produced at grandfathered
facilities due to expansion
    For facilities that commenced construction prior to December 19,
2007, we are defining the baseline volume of renewable fuel exempt from
the 20% GHG threshold requirement to be the maximum volumetric capacity
of the facility that is allowed in any applicable state air permit or
Federal Title V operating permit.\4\ We had proposed in the NPRM that
nameplate capacity be defined as permitted capacity, but that if the
capacity was not stipulated in any federal, state or local air permit,
then the actual peak output should be used. We have decided that since
permitted capacity is the limiting condition, by virtue of it being an
enforceable limit contained in air permits, that the term ``nameplate
capacity'' is not needed. In addition, we are allowing a 5% tolerance
as discussed earlier. Therefore, today's rule defines permitted
capacity as 105% of the maximum permissible volume output of renewable
fuel allowed under operating conditions specified in all applicable
preconstruction, construction and operating permits issued by
regulatory authorities (including local, regional, state or a foreign
equivalent of a state, and federal permits). If the capacity of a
facility is not stipulated in such air permits, then the grandfathered
volume is 105% of the maximum annual volume produced for any of the
last five calendar years prior to 2008. Volumes greater than this
amount which may typically be due to expansions of the facility which
occur after December 19, 2007, will be subject to the 20% GHG reduction
requirement if the facility wishes to generate RINs for the incremental
expanded volume. The increased volume will be considered as if produced
from a ``new facility'' which commenced construction after December 19,
2007. Changes that might occur to the mix of renewable fuels produced
within the facility are irrelevant--they remain grandfathered as long
as the overall volume falls within the baseline volume. Thus, for
example, if an ethanol facility changed its operation to produce
butanol, but the baseline volume remained the same, the fuel so
produced would be exempt from the 20% GHG reduction requirement.
---------------------------------------------------------------------------

    \4\ Volumes also include expansions to existing facilities,
provided that the construction for such expansion commences prior to
December 19, 2007. In such instances, the total volume from the
original facility plus the additional volume due to expansion is
grandfathered.
---------------------------------------------------------------------------

    The baseline volume will be defined as above for deemed compliant
facilities (those ethanol facilities fired by natural gas or biomass or
a combination thereof that commenced construction after December 19,
2007 but before January 1, 2010) with the exception that if the maximum
capacity is not stipulated in air permits, then the exempt volume is
the maximum annual peak production during the plant's first three years
of operation. In addition, any production volume increase that is
attributable to construction which commenced prior to December 31, 2009
would be exempt from the 20% GHG threshold, provided that the facility
continued to use natural gas, biomass or a combination thereof for
process energy. Because deemed compliant facilities owe their status to
the fact that they use natural gas, biomass or a combination thereof
for process heat, their status will be lost, and they will be subject
to the 20% GHG threshold requirement, at any time that they change to a
process energy source other than natural gas and/or biomass. Finally,
because EISA limits deemed compliant facilities to ethanol facilities,
if there are any changes in the mix of renewable fuels produced by the
facility, only the ethanol volume remains grandfathered. We had
solicited comment on whether fuels other than ethanol could also be
deemed compliant. Based on comments received and additional
consideration to this matter, we decided that because the Act does not
authorize EPA to allow fuels other than ethanol, the deemed compliant
provisions will apply only to facilities producing that fuel.
    Volume limitations contained in air permits may be defined in terms
of peak hourly production rates or a maximum annual capacity. If they
are defined only as maximum hourly production rates, they will need to
be converted to an annual rate. Because assumption of a 24-hour per day
production over 365 days per year (8,760 production hours) may
overstate the maximum annual capacity we are requiring a conversion
rate of 95% of the total hours in a year (8,322 production hours) based
on typical operating ``uptime'' of ethanol facilities.
    The facility registration process (see Section II.C) will be used
to define the baseline volume for individual facilities. Owners and
operators must submit information substantiating the permitted capacity
of the plant, or the maximum annual peak capacity if the maximum
capacity is not stipulated in a federal, state or local air permit, or
EPA Title V operating permit. Copies of applicable air permits which
stipulate the maximum annual capacity of the plant, must be provided as
part of the registration process. Subsequent expansions at a
grandfathered facility that results in an increase in volume above the
baseline volume will subject the increase in volume to the 20% GHG
emission reduction threshold (but not the original baseline volume).
Thus, any new expansions will need to be designed to achieve the 20%
GHG reduction threshold if the facility wants to generate RINs for that
volume. Such determinations will be made on the basis of EPA-defined
fuel pathway categories that are deemed to represent such 20%
reduction.
    EPA enforcement personnel commented that claims for an exemption
from the 20% GHG reduction requirement should be made promptly, so that
they can be verified with recent supporting information. They were
concerned, in particular, that claims for exempt status could be made
many years into the future for facilities that may or may not have
concluded construction within the required time period, but delayed
actual production of renewable fuel due to market conditions or other
reasons. EPA believes that this comment has merit, and has included a
requirement in Section 80.1450(f) of the final rule for registration of
facilities claiming an exemption from the 20% GHG reduction requirement
by May 1,

2013. This provision does not require actual fuel production, but
simply the filing of registration materials that assert a claim for
exempt status. It will benefit both fuel producers, who will likely be
able to more readily collect the required information if it is done
promptly, and EPA enforcement personnel seeking to verify the
information. However, given the potentially significant implications of
this requirement for facilities that may qualify for the exemption but
miss the registration deadline, the rule also provides that EPA may
waive the requirement if it determines that the submission is
verifiable to the same extent as a timely-submitted registration.
ii. Replacements of Equipment
    If production equipment such as boilers, conveyors, hoppers,
storage tanks and other equipment are replaced, it would not be
considered construction of a ``new facility'' under this option of
today's final rule--the baseline volume of fuel would continue to be
exempt from the 20% GHG threshold. We sought comment on an approach
that would require that if coal-fired units are replaced, that the
replacement units must be fired with natural gas or biofuel for the
product to be eligible for RINs that do not satisfy the 20% GHG
threshold. Some commenters supported such an approach. We agreed,
however, with other commenters who point out that the language in EISA
provides for an indefinite exemption for grandfathered facilities.
While we interpret the statute to limit the exemption to the baseline
volume of a grandfathered facility, we do not interpret the language to
allow EPA to require that replacements of coal fired units be natural
gas or biofuel. Thus replacements of coal fired equipment will not
affect the facility's grandfathered status.
iii. Registration, Recordkeeping and Reporting
    Facility owner/operators will be required to provide evidence and
certification of commencement of construction. Such certification will
require copies of all applicable air permits that apply to the
construction and operation of the facility. Owner/operators must
provide annual records of process fuels used on a BTU basis, feedstocks
used and product volumes. For facilities that are located outside the
United States (including outside the Commonwealth of Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands) owners will be required to provide
certification as well. Since the definition of commencement of
construction includes having all necessary air permits, we will require
that facilities outside the United States certify that such facilities
have obtained all necessary permits for construction and operation
required by the appropriate national and local environmental agencies.
4. New Renewable Biomass Definition and Land Restrictions
    As explained in Section I, EISA lists seven types of feedstock that
qualify as ``renewable biomass.'' EISA limits not only the types of
feedstocks that can be used to make renewable fuel, but also the land
that these renewable fuel feedstocks may come from. Specifically,
EISA's definition of renewable biomass incorporates land restrictions
for planted crops and crop residue, planted trees and tree residue,
slash and pre-commercial thinnings, and biomass from wildfire areas.
EISA prohibits the generation of RINs for renewable fuel made from
feedstock that does not meet the definition of renewable biomass, which
includes not meeting the associated land restrictions. The following
sections describe EPA's interpretation of several key terms related to
the definition of renewable biomass, and the approach in today's rule
to implementing the renewable biomass requirements.
a. Definitions of Terms
    EISA's renewable biomass definition includes a number of terms that
require definition. The following sections discuss EPA's definitions
for these terms, which were developed with ease of implementation and
enforcement in mind. We have made every attempt to define these terms
as consistently with other federal statutory and regulatory definitions
as well as industry standards as possible, while keeping them workable
for purposes of program implementation.
i. Planted Crops and Crop Residue
    The first type of renewable biomass described in EISA is planted
crops and crop residue harvested from agricultural land cleared or
cultivated at any time prior to December 19, 2007, that is either
actively managed or fallow, and nonforested. We proposed to interpret
the term ``planted crops'' to include all annual or perennial
agricultural crops that may be used as feedstock for renewable fuel,
such as grains, oilseeds, and sugarcane, as well as energy crops, such
as switchgrass, prairie grass, and other species, providing that they
were intentionally applied to the ground by humans either by direct
application as seed or nursery stock, or through intentional natural
seeding by mature plants left undisturbed for that purpose. We received
numerous comments on our proposed definition of ``planted crops,''
largely in support of our proposed definition. However, some commenters
noted that ``microcrops,'' such as duckweed, a flowering plant
typically grown in ponds or tanks, are also being investigated for used
as renewable fuel feedstocks. These microcrops are typically grown in a
similar manner to algae, but cannot be categorized as algae since they
are relatively more complex organisms. EPA's proposed definition would
have unintentionally excluded microcrops such as duckweed through the
requirement that planted crops be ``applied to the ground.'' After
considering comments received, EPA does not believe that there is any
basis under EISA for excluding from the definition of renewable biomass
crops such as duckweed that are applied to a tank or pond for growth
rather than to the soil. As with other planted crops, these ponds or
tanks must be located on existing ``agricultural land,'' as described
below, to qualify as renewable biomass under EISA. Therefore, including
such microcrops within the definition of renewable biomass will not
result in the direct loss of forestland or other ecologically sensitive
land that Congress sought to protect through the land restrictions in
the definition of renewable biomass. Doing so will further the
objectives of the statute of promoting the development of emerging
technologies to produce clean alternatives to petroleum-based fuels,
and to further U.S. energy independence.
    For these reasons, we are finalizing our proposed definition of
``planted crops,'' with the inclusion of provisions allowing for the
growth of ``microcrops'' in ponds or tanks that are located on
agricultural land. Our final definition also includes a reference to
``vegetative propagation,'' in which a new plant is produced from an
existing vegetative structure, as one means by which planted crops may
reproduce, since this is an important method of reproduction for
microcrops such as duckweed. The final definition of ``planted crops''
includes all annual or perennial agricultural crops from existing
agricultural land that may be used as feedstock for renewable fuel,
such as grains, oilseeds, and sugarcane, as well as energy crops, such
as switchgrass, prairie grass, duckweed and other species (but not
including algae species or planted trees), providing that they

were intentionally applied by humans to the ground, a growth medium, or
a pond or tank, either by direct application as seed or plant, or
through intentional natural seeding or vegetative propagation by mature
plants introduced or left undisturbed for that purpose. We note that
because EISA contains specific provisions for planted trees and tree
residue from tree plantations, our final definition of planted crops in
EISA excludes planted trees, even if they may be considered planted
crops under some circumstances.
    We proposed that ``crop residue'' be limited to the residue, such
as corn stover and sugarcane bagasse, left over from the harvesting of
planted crops. We sought comment on including biomass from agricultural
land removed for purposes of invasive species control or fire
management. We received many comments supporting the inclusion of
biomass removed from agricultural land for purposes of invasive species
control and/or fire management. We believe that such biomass is
typically removed from agricultural land for the purpose of preserving
or enhancing its value in agricultural crop production. It may be
removed at the time crops are harvested, post harvest, periodically
(e.g., for pastureland) or during extended fallow periods. We agree
with the commenters that this material is a form of biomass residue
related to crop production, whether or not derived from a crop itself,
and, therefore, are modifying the proposed definition of ``crop
residue'' to include it. We also received comments encouraging us to
expand the definition of crop residue to include materials left over
after the processing of the crop into a useable resource, such as
husks, seeds, bagasse and roots. EPA agrees with these comments and has
altered the final definition to cover such materials. Based on comments
received, our final definition of ``crop residue'' is the biomass left
over from the harvesting or processing of planted crops from existing
agricultural land and any biomass removed from existing agricultural
land that facilitates crop management (including biomass removed from
such lands in relation to invasive species control or fire management),
whether or not the biomass includes any portion of a crop or crop
plant.
    Our proposed regulations restricted planted crops and crop residue
to that harvested from existing agricultural land, which, under our
proposed definition, includes three land categories--cropland,
pastureland, and Conservation Reserve Program (CRP) land. We proposed
to define cropland as land used for the production of crops for
harvest, including cultivated cropland for row crops or close-grown
crops and non-cultivated cropland for horticultural crops. We proposed
to define pastureland as land managed primarily for the production of
indigenous or introduced forage plants for livestock grazing or hay
production, and to prevent succession to other plant types. We also
proposed that CRP land, which is administered by USDA's Farm Service
Agency, qualify as ``agricultural land'' under RFS2.
    EPA received numerous comments on our proposed definition of
existing agricultural land. Generally, commenters were in support of
our definition of ``cropland'' and its inclusion in the definition of
existing agricultural land. Additionally, commenters generally did not
object to CRP lands or pastureland being included in the definition of
agricultural land. Based on our consideration of comments received on
the proposed rule, EPA is including cropland, pastureland and CRP land
in the definition of existing agricultural land, as proposed.
    We sought comment in the proposal on whether rangeland should be
included as agricultural land under RFS2. Rangeland is land on which
the indigenous or introduced vegetation is predominantly grasses,
grass-like plants, forbs or shrubs and which--unlike cropland or
pastureland--is predominantly managed as a natural ecosystem. EPA
received a number of comments concerning whether rangeland should be
included in the definition of existing agricultural land under RFS2.
Some commenters urged EPA to expand the definition of existing
agricultural land to include rangeland, arguing that rangelands could
serve as important sources of renewable fuel feedstocks. Many of these
commenters argued that, although it is generally less intensively
managed than cropland, rangeland is nonetheless actively managed
through control of brush or weed species, among other practices. In
contrast, other commenters argued against the inclusion of rangeland,
contending that the potential conversion of rangeland into cropland for
growing renewable biomass would lead to losses of carbon, soil, water
quality, and biodiversity.
    Under EISA, renewable biomass includes crops and crop residue from
agricultural land cleared or cultivated at any time prior to the
enactment of EISA that is either ``actively managed of fallow'' and
nonforested. In determining whether rangeland should be considered
existing agricultural land under this provision, EPA must decide if
rangeland qualifies as ``actively managed or fallow.'' EPA believes
that the term ``actively managed'' is best interpreted by reference to
the type of material and practices that this provision addresses--
namely crops and residue associated with growing crops. We think it is
appropriate to inquire whether the type of management involved in a
land type is consistent with that which would occur on land where crops
are harvested. Thus, while we acknowledge that some types of rangeland
are managed to a certain degree, the level of ``active management''
that is typically associated with land dedicated to growing
agricultural crops is far more intensive than the types of management
associated with rangeland. For example, rangeland is rarely tilled,
fertilized or irrigated as croplands and, to a lesser degree,
pasturelands, are. Furthermore, since rangeland encompasses a wide
variety of ecosystems, including native grasslands or shrublands,
savannas, wetlands, deserts and tundra, including it in the definition
of agricultural land would increase the risk that these sensitive
ecosystems would become available under EISA for conversion into
intensively managed mono-culture cropland. Finally, the conversion of
relatively undisturbed rangeland to the production of annual crops
could in some cases lead to large releases of GHGs stored in the soil,
as well as a loss of biodiversity, both of which would be contrary to
EISA's stated goals. For these reasons, EPA is not including rangeland
in the definition of ``existing agricultural land'' in today's final
rule.
    We proposed to include in our definition of existing agricultural
land the requirement that the land was cleared or cultivated prior to
December 19, 2007, and that, since December 19, 2007, it has been
continuously actively managed (as agricultural land) or fallow, and
nonforested. We proposed to interpret the phrase ``that is actively
managed or fallow, and nonforested'' as meaning that land must have
been actively managed or fallow, and nonforested, on December 19, 2007,
and continuously thereafter in order to qualify for renewable biomass
production. We received extensive comments on this interpretation. Many
commenters suggested an interpretation of the requirement that
agricultural land be ``actively managed'' to mean that the land had to
be ``actively managed'' at the time EISA was passed on December 17,
2007, such that the amount of land available for biofuel feedstock
production was established at that point

and would not diminish over time. Other commenters supported our
proposed interpretation, which would mean that the amount of land
available for biofuel feedstock production could diminish over time if
parcels of land cease to be actively managed at any point, thus taking
them out of contention for biofuel feedstock cultivation. Some
commenters argued that this interpretation is contrary to Congress'
intent and the basic premise of the RFS program since, over time, it
could lead to a reduction in the amount of renewable biomass available
for use as renewable fuel feedstocks, while the statutorily required
volumes of renewable fuel increase over time. These commenters further
argue that the active management provision should be interpreted as a
``snapshot'' of agricultural land existing and actively managed on
December 19, 2007. Under this interpretation, the land that was cleared
or cultivated prior to December 19, 2007 and was actively managed on
that date, would be eligible for renewable biomass production
indefinitely.
    We agree that the goal of the EISA and RFS program, to increase the
presence of renewable fuels in transportation fuel, will be better
served by interpreting the ``actively managed or fallow'' requirement
in the renewable biomass definition as applying to land actively
managed or fallow on December 19, 2007, rather than interpreting this
requirement as applying beginning on December 19, 2007 and continuously
thereafter. In addition, by simplifying the requirement in this
fashion, there will be significantly less burden on regulated parties
in ensuring that their feedstocks come from qualifying lands. For these
reasons, we are modifying the definition of existing agricultural land
so that the ``active management'' requirement is satisfied for those
that were cleared or cultivated and actively managed or fallow, and
non-forested on December 19, 2007.
    Further, we proposed and are finalizing that ``actively managed''
means managed for a predetermined outcome as evidenced by any of the
following: Sales records for planted crops, crop residue, or livestock;
purchasing records for land treatments such as fertilizer, weed
control, or reseeding; a written management plan for agricultural
purposes; documentation of participation in an agricultural program
sponsored by a Federal, state or local government agency; or
documentation of land management in accordance with an agricultural
certification program. While we received comments indicating that
including a definitive checklist of required evidential records would
be helpful to have explicitly identified in the regulations, we are not
doing so in order to maintain flexibility, as feedstock producers may
vary in the types of evidence they can readily obtain to show that
their agricultural land was actively managed. We are adding, however, a
clarification that the records must be traceable to the land in
question. For example, it will not be sufficient to have a receipt for
seed purchase if there is not additional evidence indicating that the
seed was applied to the land which is claimed as existing agricultural
land.
    The term ``fallow'' is generally used to describe cultivated land
taken out of production for a finite period of time. We proposed and
sought comment on defining fallow to mean agricultural land that is
intentionally left idle to regenerate for future agricultural purposes,
with no seeding or planting, harvesting, mowing, or treatment during
the fallow period. We also proposed and sought comment on requiring
documentation of such intent. We received many comments that supported
our proposed definition of fallow. We also received comments indicating
that EPA should set a time limit for land to qualify as fallow (as
opposed to abandoned for agricultural purposes). We have decided not to
include a time limit for land to qualify as ``fallow'' because we
understand that agricultural land may be left fallow for many different
purposes and for varying amounts of time. Any particular timeframe that
EPA might choose for this purpose would be somewhat arbitrary. Further,
EISA does not indicate a time limit on the period of time that
qualifying land could be fallow, so EPA does not believe that it would
be appropriate to do so in its regulations. Therefore, EPA is
finalizing its proposed definition of ``fallow.''
    Finally, in order to define the term ``nonforested'' as used in the
definition of ``existing agricultural land,'' we proposed first to
define the term ``forestland'' as generally undeveloped land covering a
minimum area of one acre upon which the predominant vegetative cover is
trees, including land that formerly had such tree cover and that will
be regenerated. We also proposed that forestland would not include tree
plantations. ``Nonforested'' land under our proposal would be land that
is not forestland.
    We received many comments on our proposed definition of forestland.
Some commenters urged EPA to broaden the definition of ``forestland''
to include tree plantations, arguing that plantations are well-accepted
as a subset of forestland. Others advocated that EPA should make every
effort to distinguish between tree plantations and forestland so as not
to run the risk of allowing native forests to be converted into less
diverse tree plantations from which trees could be harvested for
renewable fuel production. For today's final rule, EPA is including
tree plantations as a subset of forestland since it is commonly
understood as such throughout the forestry industry. Under EISA,
renewable biomass may include ``slash and pre-commercial thinnings''
from non-federal forestlands, and ``planted trees and tree residue''
from actively managed tree plantations on non-federal land. One effect
under EISA of the modification from the proposed rule to include tree
plantations as a subset of forestland is to allow pre-commercial
thinnings and slash, in addition to planted trees and tree residue,
harvested from tree plantations to serve as qualifying feedstocks for
renewable fuel production. EPA believes it is appropriate to include
pre-commercial thinnings and slash from actively managed tree
plantations as renewable biomass, consistent with the EISA provision
allowing harvested trees and tree residue from tree plantations to
qualify as renewable biomass. Another effect of including the tree
plantations as a kind of forestland is that, since crops and crop
residue must come from land that was ``non-forested'' as of the date of
EISA enactment, a tract of land managed as a tree plantation on the
date of EISA enactment could not be converted to cropland for the
production of feedstock for RIN-generating renewable fuel. EPA believes
that this result in keeping with Congressional desire to avoid the
conversion of new lands to crop production for renewable fuel
production.
    Additionally, EPA received comments indicating that, in order to be
consistent with existing statutory and/or regulatory definitions of
``forestland,'' EPA should exclude tree covered areas in intensive
agricultural crop production settings, such as fruit orchards, or tree-
covered areas in urban settings such as city parks from the definition
of forestland. EPA agrees that these types of land cannot be
characterized as ``forestland,'' and is thus excluding them from the
definition. EPA's final definition of forestland is ``generally
undeveloped land covering a minimum of 1 acre upon which the primary
vegetative species is trees, including land that formerly had such tree
cover and that will be regenerated and tree plantations.

Tree covered areas in intensive agricultural crop production settings,
such as fruit orchards, or tree-covered areas in urban settings such as
city parks, are not considered forestland.''
ii. Planted Trees and Tree Residue
    The definition of renewable biomass in EISA includes planted trees
and tree residue from actively managed tree plantations on non-federal
land cleared at any time prior to December 19, 2007, including land
belonging to an Indian tribe or an Indian individual, that is held in
trust by the United States or subject to a restriction against
alienation imposed by the United States.
    We proposed to define the term ``planted trees'' to include not
only trees that were established by human intervention such as planting
saplings and artificial seeding, but also trees established from
natural seeding by mature trees left undisturbed for such a purpose.
Some commenters disagreed with our inclusion of naturally seeded trees
in our definition of ``planted trees.'' They argue that an area which
is managed for natural regeneration of trees is more akin to a natural
forest than a tree plantation, and that the difference between the two
types of land should be clear in order to distinguish between the two
and to avoid the effective conversion of natural forests to tree
plantations under EISA. EPA agrees that the inclusion of natural
reseeding in the definition of ``planted trees'' would make
distinguishing between tree plantations and forests difficult or
impossible, thus negating the separate restrictions that Congress
placed on the two types of land. On the other hand, EPA believes that
trees that are naturally seeded and grown together with hand- or
machine-planted trees in a tree plantation should not categorically be
excluded from qualifying as renewable biomass. Such natural reseeding
may occur after planting the majority of trees in a tree plantation,
and may be consistent with the management plan for a tree plantation.
EPA has decided, therefore, to modify its proposed definition of
``planted tree'' to be trees harvested from a tree plantation. The term
``tree plantation'' is defined as a stand of no less than 1 acre
composed primarily of trees established by hand- or machine-planting of
a seed or sapling, or by coppice growth from the stump or root of a
tree that was hand- or machine-planted.'' The net effect is that as
long as a tree plantation consists ``primarily'' of trees that were
hand- or machine planted (or derived therefrom, as described below),
then all trees from the tree plantation, including those established
from natural seeding by mature trees left undisturbed for such a
purpose, will qualify as renewable biomass.
    We also received a number of comments suggesting that EPA broaden
the definition of planted trees to include other methods of tree
regeneration, such as coppice (the production of new stems from stumps
or roots), that are frequently used in the forestry industry to
regenerate tree plantations. EPA believes that ``planted'' implies
direct human intervention, and that allowing stump-growth from the
stump or roots of a tree that was hand- or machine-planted is
consistent with this concept. Therefore, today's final rule broadens
the concept of ``planted trees'' from a tree plantation to include ``a
tree established by hand- or machine-planting of a seed or sapling, or
by coppice growth from the stump or root of a tree that was hand- or
machine-planted.'' This new language will appear in the definition of
``tree plantation.''
    In the NPRM, we proposed to define a ``tree plantation'' as a stand
of no fewer than 100 planted trees of similar age and comprising one or
two tree species, or an area managed for growth of such trees covering
a minimum of one acre. We received numerous comments on our definition
of tree plantation. Several commenters urged EPA to define tree
plantation more broadly by using the definition from the Dictionary of
Forestry--``a stand composed primarily of trees established by planting
or artificial seeding,'' However, this definition does not provide
sufficiently clear guidelines for determining whether a given parcel of
land would be considered a tree plantation rather than a natural
forest. Since trees are considered renewable biomass under RFS2 only if
they are harvested from tree plantations, we believe that our proposed
definition was clearer and more easily applied in the field.
Accordingly, EPA has not adopted the definition of this term from the
Dictionary of Forestry. Other commenters argued that there is no
technical justification for limiting the number of species or number of
trees in a plantation, and that many tree plantations include a variety
of species. EPA believes that there is merit in these comments.
Accordingly, EPA is finalizing a broadened definition of ``tree
plantation,'' by removing the limitations on the number and species of
trees. EPA is defining tree plantation as ``a stand of no less than 1
acre composed primarily of trees established by hand- or machine-
planting of a seed or sapling, or by coppice growth from the stump or
root of a tree that was hand- or machine-planted.''
    We proposed to apply similar management restrictions to tree
plantations as would apply to existing agricultural land and also to
interpret the EISA language as requiring that to qualify as renewable
biomass for renewable fuel production under RFS2, a tree plantation
must have been cleared at any time prior to December 19, 2007, and
continuously actively managed since December 19, 2007. Consistent with
our final position regarding actively managed existing agricultural
land, we are defining the term ``actively managed'' in the context of
tree plantations as managed for a predetermined outcome as evidenced by
any of the following that must be traceable to the land in question:
Sales records for planted trees or slash; purchasing records for seeds,
seedlings, or other nursery stock together with other written
documentation connecting the land in question to these purchases; a
written management plan for silvicultural purposes; documentation of
participation in a silvicultural program sponsored by a Federal, state
or local government agency; documentation of land management in
accordance with an agricultural or silvicultural product certification
program; an agreement for land management consultation with a
professional forester that identifies the land in question; or evidence
of the existence and ongoing maintenance of a road system or other
physical infrastructure designed and maintained for logging use,
together with one of the above-mentioned documents. Silvicultural
programs such as those of the Forest Stewardship Council, the
Sustainable Forestry Initiative, the American Tree Farm System, or USDA
are examples of the types of programs that could indicate actively
managed tree plantations. As with the definition of ``actively
managed'' as it applies to crops from existing agricultural lands, we
received extensive comments on this interpretation. As with our final
position for crops from existing agricultural lands, we are
interpreting the ``active management'' requirement for tree plantations
to apply on the date of EISA's enactment, December 19, 2007. Those tree
plantations that were cleared or cultivated and actively managed on
December 19, 2007 are eligible for the production of planted trees,
tree residue, slash and pre-commercial thinnings for renewable fuel
production.
    In lieu of the term ``tree residue,'' we proposed to use the term
``slash'' in our regulations as a more descriptive, but otherwise
synonymous, term. According

to the Dictionary of Forestry (1998, p. 168), a source of commonly
understood industry definitions, slash is ``the residue, e.g., treetops
and branches, left on the ground after logging or accumulating as a
result of a storm, fire, girdling, or delimbing.'' We also proposed to
clarify that slash can include tree bark and can be the result of any
natural disaster, including flooding. We received comments in support
of this additional inclusion and are expanding the definition of
``slash'' to include tree bark and residue resulting from natural
disaster, including flooding. We received general support for our
proposal to substitute our definition of ``slash'' for ``tree
residue,'' however, several commenters argued that our definition of
slash is too narrow to be substituted for ``tree residue,'' which
should include woody residues from saw mills and paper mills that
process planted trees from tree plantations. EPA agrees that the term
``residue'' should include this material. Therefore, EPA is expanding
the definition of ``tree residue'' to include residues from processing
planted trees at lumber and paper mills, but is limiting it to the
biogenically derived portion of the residues that can be traced back to
feedstocks meeting the definition of renewable biomass (i.e. planted
trees and tree residue from actively managed tree plantations on non-
federal land cleared at any time prior to December 19, 2007). RINs may
only be generated for the fraction of fuel produced that represents the
biogenic portion of the tree residue, using the procedures described in
ASTM test method D-6866. Thus, if the tree residues are mixed with
chemicals or other materials during processing at the lumber or paper
mills, producers may only generate RINs for the portion of the mixture
that is actually derived from planted trees. EPA's final definition of
``tree residue'' is ``slash and any woody residue generated during the
processing of planted trees from actively managed tree plantations for
use in lumber, paper, furniture or other applications, providing that
such woody residue is not mixed with similar residue from trees that do
not originate in actively managed tree plantations.
iii. Slash and Pre-Commercial Thinnings
    The EISA definition of renewable biomass includes slash and pre-
commercial thinnings from non-federal forestlands, including
forestlands belonging to an Indian tribe or an Indian individual, that
are held in trust by the United States or subject to a restriction
against alienation imposed by the United States. However, EISA excludes
slash and pre-commercial thinnings from forests or forestlands that are
ecological communities with a global or State ranking of critically
imperiled, imperiled, or rare pursuant to a State Natural Heritage
Program, old growth forest, or late successional forest.
    As described in Sec. II.B.4.a.i of this preamble, our definition of
``forestland'' is generally undeveloped land covering a minimum of 1
acre upon which the primary vegetative species is trees, including land
that formerly had such tree cover and that will be regenerated and tree
plantations. Tree-covered areas in intensive agricultural crop
production settings, such as fruit orchards or tree-covered areas in
urban setting such as city parks, are not considered forestland. Also
as noted in Sec. III.B.4.a.ii of this preamble, we are adopting the
definition of slash listed in the Dictionary of Forestry, with the
addition of tree bark and residue resulting from natural disaster,
including flooding.
    As for ``pre-commercial thinnings,'' the Dictionary of Forestry
defines the act of such thinning as ``the removal of trees not for
immediate financial return but to reduce stocking to concentrate growth
on the more desirable trees.'' Because what may now be considered pre-
commercial may eventually be saleable as renewable fuel feedstock, we
proposed not to include any reference to ``financial return'' in our
definition, but rather to define pre-commercial thinnings as those
trees removed from a stand of trees in order to reduce stocking to
concentrate growth on more desirable trees. Additionally, we proposed
to include diseased trees in the definition of pre-commercial thinnings
due to the fact that they can threaten the integrity of an otherwise
healthy stand of trees, and their removal can be viewed as reducing
stocking to promote the growth of more desirable trees. We sought
comment on whether our definition of pre-commercial thinnings should
include a maximum diameter and, if so, what the appropriate maximum
diameter should be. We received comments on our proposed definition of
pre-commercial thinnings that were generally supportive of our proposed
definition. Many commenters argued that EPA should not use a maximum
tree diameter as a basis for defining pre-commercial thinning as tree
diameter varies greatly by forest type and location, making any
diameter limitation EPA might set arbitrary. EPA agrees with this
assessment. Commenters also argued that pre-commercial thinnings may
include other non-tree vegetative material that is removed to promote
and improve tree growth. EPA is attempting to utilize standard industry
definitions to the extent practicable, and believes that the proposed
definition of pre-commercial thinnings, based largely on the Dictionary
of Forestry definition with the addition of other vegetative material
removed to promote tree growth, is appropriate. Therefore, we are
finalizing the proposed definition of ``pre-commercial thinnings,''
with the addition of the phrase ``or other vegetative material that is
removed to promote tree growth.''
    We proposed that the State Natural Heritage Programs referred to in
EISA are those comprising a network associated with NatureServe, a non-
profit conservation and research organization. Individual Natural
Heritage Programs collect, analyze, and distribute scientific
information about the biological diversity found within their
jurisdictions. As part of their activities, these programs survey and
apply NatureServe's rankings, such as critically imperiled (S1),
imperiled (S2), and rare (S3) to species and ecological communities
within their respective borders. NatureServe meanwhile uses data
gathered by these Natural Heritage Programs to apply its global
rankings, such as critically imperiled (G1), imperiled (G2), or
vulnerable (the equivalent of the term ``rare,'' or G3), to species and
ecological communities found in multiple States or territories. We
proposed and sought comment on prohibiting slash and pre-commercial
thinnings from all forest ecological communities with global or State
rankings of critically imperiled, imperiled, or vulnerable (``rare'' in
the case of State rankings) from being used for renewable fuel for
which RINs may be generated under RFS2.
    We proposed to use data compiled by NatureServe and published in
special reports to identify ``ecologically sensitive forestland.'' The
reports listed all forest ecological communities in the U.S. with a
global ranking of G1, G2, or G3, or with a State ranking of S1, S2, or
S3, and included descriptions of the key geographic and biologic
attributes of the referenced ecological community. We proposed that the
document be incorporated by reference into the definition of renewable
biomass in the final RFS2 regulations (and updated as appropriate
through notice and comment rulemaking). The document would identify
specific ecological communities from which slash and pre-commercial
thinnings could not be used as feedstock for the production of
renewable fuel that would qualify for RINs under RFS2. Draft versions
of the

document containing the global and State rankings were placed in the
docket for the proposed rule.
    EPA received several comments on our proposed interpretation of
EISA's State Natural Heritage Program requirement and the reports
listing G1-G3 and S1-S3 ecological communities. Several commenters
argued that while EISA authorizes EPA to exclude slash and pre-
commercial thinnings from S1-3 and G1 and G2 communities, it does not
authorize the exclusion of biomass from G3 communities, which are
designated as ``vulnerable,'' not ``critically imperiled, imperiled or
rare,'' as EISA requires. The commenters further argue that there is
little or no environmental benefit to adding G3 communities to the list
of lands unavailable for renewable fuel feedstock production, and that
their inclusion limits the availability of forest-derived biomass. EPA
agrees with these comments, and has drafted today's final rule so as
not to specifically exclude from the definition of renewable biomass
slash and pre-commercial thinnings from G3-ranked ``vulnerable''
ecological communities to qualify as renewable biomass for purposes of
RFS2. We are interpreting EISA's language to exclude from the
definition of renewable biomass any biomass taken from ecological
communities in the U.S. with Natural Heritage Programs global ranking
of G1 or G2, or with a State ranking of S1, S2, or S3. We are including
in today's rulemaking docket (EPA-HQ-OAR-2005-0161) the list of
ecological communities fitting this description.
    To complete the definition of ``ecologically sensitive
forestland,'' we proposed to include old growth and late successional
forestland which is characterized by trees at least 200 years old. We
received comments on this proposed definition recommending that EPA not
use a single tree age in the define old growth and late-successional
forests, as this criterion does not apply to all types of forests.
While EPA understands that there are a number of criteria for
determining whether a forest is old growth and that the criteria differ
depending on the type of forest, for purposes of the RFS2 rule, EPA
seeks to use definitive criteria that can be applied by non-
professionals. EPA is finalizing the definition of ``old growth'' as
proposed.
iv. Biomass Obtained From Certain Areas at Risk From Wildfire
    The EISA definition of renewable biomass includes biomass obtained
from the immediate vicinity of buildings and other areas regularly
occupied by people, or of public infrastructure, at risk from wildfire.
We proposed to clarify in the regulations that ``biomass'' is organic
matter that is available on a renewable or recurring basis, and that it
must be obtained from within 200 feet of buildings, campgrounds, and
other areas regularly occupied by people, or of public infrastructure,
such as utility corridors, bridges, and roadways, in areas at risk of
wildfire.
    Furthermore, we proposed to define ``areas at risk of wildfire'' as
areas located within--or within one mile of--forestland, tree
plantations, or any other generally undeveloped tract of land that is
at least one acre in size with substantial vegetative cover. We sought
comment on two possible implementation alternatives for identifying
areas at risk of wildfire. The first proposed alternative would
incorporate into our definition of ``areas at risk of wildfire'' any
communities identified as ``communities at risk'' and covered by a
community wildfire protection plan (CWPP). Communities at risk are
defined through a process within the document, ``Field Guidance--
Identifying and Prioritizing Communities at Risk'' (National
Association of State Foresters, June 2003). CWPPs are developed in
accordance with ``Preparing a Community Wildfire Protection Plan--A
Handbook for Wildland-Urban Interface Communities'' (Society of
American Foresters, March 2004) and certified by a State Forester or
equivalent. We sought comment on incorporating by reference into the
final RFS2 regulations a list of ``communities at risk'' with an
approved CWPP. We also sought comment on a second implementation
approach, which would incorporate into our definition of ``areas at
risk of wildfire'' any areas identified as wildland urban interface
(WUI) land, or land in which houses meet wildland vegetation or are
mixed with vegetation. We noted that SILVIS Lab, in the Department of
Forest Ecology and Management and the University of Wisconsin, Madison,
has, with funding provided by the U.S. Forest Service, mapped WUI lands
based on the 2000 Census and the U.S. Geological Survey National Land
Cover Data (NLCD), and we sought comment on how best to use this map.
    We received comments on the proposal and on the two proposed
alternative options for identifying areas at risk of wildfire. A number
of commenters argued that EPA should define ``areas at risk of
wildfire'' using an existing definition of WUI from the Healthy Forests
Restoration Act (Pub. L. 108-148). Many commenters recommended that EPA
include both lands covered by a CWPP as well as lands meeting the
Healthy Forests Restoration Act definition of WUI in order to maximize
the amount of land available for biomass feedstock and to encourage the
removal of hazardous fuel for wildfires. EPA understands that very few
communities that might be eligible for a CWPP actually have one in
place, due to the numerous administrative steps that must be taken in
order to have a CWPP approved, so the option of defining areas at risk
of wildfire exclusively by reference to a list of communities with an
approved CWPP would be underinclusive of all lands that a professional
forester would consider to be at risk of wildfire. Furthermore, EPA
believes that the statutory definition of WUI from the Healthy Forests
Restoration Act (Pub. L. 108-148) is too vague using directly in
implementing the RFS2 program. If EPA used this WUI definition,
individual plots of land would have to be assessed by a professional
forester on a case-by-case basis in order to determine if they meet the
WUI definition, creating an expensive burden for landowners seeking to
sell biomass from their lands as renewable fuel feedstocks.
    In light of the comments received and the need for a simple way for
landowners and renewable fuel producers to track the status of
particular plots of land, for the final rule we are identifying ``areas
at risk of wildfire'' as those areas identified as wildland urban
interface. Those areas are depicted and mapped at http://
silvis.forest.wisc.edu/Library/WUILibrary.asp. The electronic WUI map
is a readily accessible reference tool that was prepared by experts in
the field of identifying areas at risk of wildfire, and is thus an
ideal reference for purposes of implementing RFS2. EPA has included in
the rulemaking docket instructions on using the WUI map to find the
status of a plot of land.
v. Algae
    EISA specifies that ``algae'' qualify as renewable biomass. EPA did
not propose a definition for this term. A number of commenters have
requested clarification, specifically asking whether cyanobacteria
(also known as blue-green algae), diatoms, and angiosperms are within
the definition. Technically, the term ``algae'' has recently been
defined as ``thallophytes (plants lacking roots, stems and leaves) that
have chlorophyll a as their primary photosynthetic pigment and lack a
sterile covering of

cells around the reproductive cells.'' \5\ Algae are relatively simple
organisms that are virtually ubiquitous, occurring in freshwater,
brackish water, saltwater, and terrestrial habitats. When present in
water, they may be suspended, or grow attached to various substrates.
They range in size from unicellular to among the longest living
organisms (e.g. sea kelp). There is some disagreement among scientists
as to whether cyanobacteria should be considered bacteria or algae.
Some consider them to be bacteria because of their cellular
organization and biochemistry. However, others find it more significant
that they contain chlorophyll a, which differs from the chlorophyll of
bacteria which are photosynthetic, and also because free oxygen is
liberated in blue-green algal photosynthesis but not in that of the
bacteria.\6\ EPA believes that it furthers the purposes of EISA to
interpret the term ``algae'' in EISA broadly to include cyanobacteria,
since doing so will make available another possible feedstock for
renewable fuel production that will further the energy independence and
greenhouse gas reduction objectives of the Act. Further, EPA expects
that cyanobacteria used in biofuel production would be cultivated, as
opposed to harvested, and therefore that there would be no significant
impact from use of cyanobacteria for biofuel production on naturally
occurring algal populations. Diatoms are generally considered by the
scientific community to be algae,\7\ and, consistent with this general
scientific consensus, EPA interprets the EISA definition of algae to
include them. Microcrop angiosperms, however, do not meet the
definition of algae, even if they live in an aquatic habitat, since
they are relatively more complex organisms than the algae. A discussion
of microcrop angiosperms is included above in the discussion of
``planted crops and crop residue.''
---------------------------------------------------------------------------

    \5\ Phycology, Robert Edward Lee, Cambridge University Press,
2008, page 3.
    \6\ See, generally, Introduction to the Algae. Structure and
Reproduction, by Harold C. Bold and Michael J. Wynne, Prentice-Hall
Inc. 1978, page 31.
    \7\ See id.
---------------------------------------------------------------------------

b. Implementation of Renewable Biomass Requirements
    Our proposed approach to the treatment of renewable biomass under
RFS2 was intended to define the conditions under which RINs can be
generated as well as the conditions under which renewable fuel can be
produced or imported without RINs. Our proposed and final approaches to
both of these areas are described in more detail below.
i. Ensuring That RINs Are Generated Only for Fuels Made From Renewable
Biomass
    The effect of adding EISA's definition of renewable biomass to the
RFS program is to ensure that renewable fuels are only eligible for the
program if made from certain feedstocks, and if some of those
feedstocks come from certain types of land. In the context of our
regulatory program, this means that RINs could only be generated if it
can be established that the feedstock from which the fuel was made
meets EISA's definitions of renewable biomass include land
restrictions. Otherwise, no RINs could be generated to represent the
renewable fuel produced or imported. The EISA language does not
distinguish between domestic renewable fuel feedstocks and renewable
fuel feedstocks that come from abroad, so our final rule requires
similar feedstock affirmation and recordkeeping requirements for both
RIN-generating domestic renewable fuel producers and RIN-generating
foreign producers or importers.
    We acknowledge that incidental contaminants can be introduced into
feedstocks during cultivation, transport or processing. It is not EPA's
intent that the presence of such contaminants should disqualify the
feedstock as renewable biomass. The final regulations therefore
stipulate that the term ``renewable biomass'' includes incidental
contaminants related to customary feedstock production and transport
that are present in feedstock that otherwise meets the definition if
such incidental contaminants are impractical to remove and occur in de
minimus levels. By ``related to customary feedstock production and
transport,'' we refer to contaminants related to crop production, such
as soil or residues related to fertilizer, pesticide and herbicide
applications to crops, as well as contaminants related to feedstock
transport, such as nylon rope used to bind feedstock materials. It
would also include agricultural contaminants introduced to the
feedstock during sorting or shipping, such as miscellaneous sorghum
grains present in a load of corn kernels. However, contamination is not
related to customary feedstock production and transport, so such
feedstocks would not qualify, and in particular, any hazardous waste or
toxic chemical contaminant in feedstock would disqualify the feedstock
as renewable biomass.
ii. Whether RINs Must Be Generated for All Qualifying Renewable Fuel
    Under RFS1, virtually all renewable fuel is required to be assigned
a RIN by the producer or importer. This requirement was developed and
finalized in the RFS1 rulemaking in order to address stakeholder
concerns, particularly from obligated parties, that the number of
available RINs should reflect the total volume of renewable fuel used
in the transportation sector in the U.S. and facilitate program
compliance. EISA has dramatically increased the mandated volumes of
renewable fuel that obligated parties must ensure are produced and used
in the U.S. At the same time, EISA makes it more difficult for
renewable fuel producers to demonstrate that they have fuel that
qualifies for RIN generation by restricting qualifying renewable fuel
to that made from ``renewable biomass.'' The inclusion of such
restrictions under RFS2 may mean that, in some situations, a renewable
fuel producer would prefer to forgo the benefits of RIN generation to
avoid the cost of ensuring that its feedstocks qualify for RIN
generation. If a sufficient number of renewable fuel producers acted in
this way, it could lead to a situation in which not all qualifying fuel
is assigned RINs, thus resulting in a shortage of RINs in the market
that could force obligated parties into non-compliance even though
biofuels are being produced and used. Another possible outcome would be
that the demand for and price of RINs would increase significantly,
making compliance by obligated parties more costly and difficult than
necessary and raising prices for consumers.
    With these concerns in mind, EPA proposed to preserve in RFS2 the
RFS1 requirement that RINs be generated for all qualifying renewable
fuel. We also proposed that renewable fuel producers maintain records
showing that they utilized feedstocks made from renewable biomass if
they are generating RINs, or, if they are not generating RINs, that
they did not use feedstocks that qualify as renewable biomass. However,
we considered this matter further, and we realize that the implication
of these proposed requirements is that renewable fuel producers would
be caught in the untenable position of being forced to participate in
the RFS2 program (register, keep records, etc.) even if they are unable
to generate RINS because their feedstocks do not meet the definition of
renewable biomass. We received many comments on the proposed
requirement to generate RINs for all qualifying renewable fuel. Most

commenters argued that the requirement to keep records for non-
qualifying renewable fuels was excessively onerous and served little
purpose for the program.
    After considering the comments received, EPA has determined that
this requirement would be overly burdensome and unreasonable for
producers. The burden stems from the requirement that producers prove
that their feedstocks do not qualify if they are not generating RINs.
If the data did not exist or could not be obtained, producers could not
produce the fuel, even if no RINs would be generated. Thus, for the
final rule, EPA is requiring only that producers that do generate RINs
have the requisite records (as discussed in section II.B.4.c.i. of this
preamble) documenting that their fuel is produced from feedstocks
meeting the definition of renewable biomass. Non-RIN generating
producers need not maintain any paperwork related to their feedstocks
and their origins.
    Although EPA is not requiring that RINs be generated for all
qualifying renewable fuel, EPA is seeking to avoid situations where
biofuels are produced, but RINs are not made available to the market
for compliance. EPA received comments requesting that we consider a
provision in which any volume of renewable fuel for which RINs were not
generated would be an obligated volume for that producer, to serve as a
disincentive for those producers who might not generate RINs in order
to avoid the RFS program requirements. While EPA is not finalizing this
provision in today's rule, we may consider a future rulemaking to
promulgate a provision such as this if we find that EISA volumes are
not being met due to producers declining to generate RINs for their
qualifying renewable fuel. We also note that it is ultimately the
availability of qualifying renewable fuel, as determined in part by the
number of RINs in the marketplace, that will determine the extent to
which EPA should issue a waiver of RFS requirements on the basis of
inadequate domestic supply. It is in the interest of renewable fuel
producers to avoid a situation where a waiver of the EISA volume
requirements appears necessary. EPA encourages renewable fuel producers
to generate RINs for all fuel that is made from feedstocks meeting the
definition of renewable biomass and that meets the GHG emissions
reduction thresholds set out in EISA. Please see section II.D.6 for
additional discussion of this issue.
c. Implementation Approaches for Domestic Renewable Fuel
    Consistent with RFS1, renewable fuel producers will be responsible
for generating Renewable Identification Numbers (RINs) under RFS2. In
order to determine whether or not their fuel is eligible for generating
RINs, renewable fuel producers will generally need to have at least
basic information about the origin of their feedstocks, to ensure they
meet the definition of renewable biomass. In the proposal, EPA
described and sought comment on several approaches for implementing the
land restrictions on renewable biomass contained in EISA.
    The proposed approach for ensuring that producers generate RINs
properly was that EPA would require that renewable fuel producers
obtain documentation about their feedstocks from their feedstock
supplier(s) and take the measures necessary to ensure that they know
the source of their feedstocks and can demonstrate to EPA that they
fall within the EISA definition of renewable biomass. EPA would require
renewable fuel producers who generate RINs to affirm on their renewable
fuel production reports that the feedstock used for each renewable fuel
batch meets the definition of renewable biomass. EPA would also require
renewable fuel producers to maintain sufficient records to support
these claims. Specifically, we proposed that renewable fuel producers
who use planted crops or crop residue from existing agricultural land,
or who use planted trees or slash from actively managed tree
plantations, would be required to have copies of their feedstock
producers' written records that serve as evidence of land being
actively managed (or fallow, in the case of agricultural land) since
December 2007, such as sales records for planted crops or trees,
livestock, crop residue, or slash; a written management plan for
agricultural or silvicultural purposes; or, documentation of
participation in an agricultural or silvicultural program sponsored by
a Federal, state or local government agency. In the case of all other
biomass, we proposed to require renewable fuel producers to have, at a
minimum, written records from their feedstock supplier that serve as
evidence that the feedstock qualifies as renewable biomass.
    We sought comment on this approach generally as well as other
methods of verifying renewable fuel producers' claims that feedstocks
qualify as renewable biomass. EPA received extensive comments on the
proposed approach. Many affected parties argued that the proposed
approach would pose an unnecessary recordkeeping burden on both
feedstock and renewable fuel producers when, in practice, new lands
will not be cleared, at least in the near future, for purposes of
growing renewable fuel feedstocks. Commenters argued that individual
recordkeeping was onerous, when compliance with the renewable biomass
requirements could be determined through the use of existing data and
third-party programs. Commenters contend that the recordkeeping and
feedstock tracking requirements are particularly arduous for corn,
soybeans and other agricultural crops that are used as renewable fuel
feedstocks due to both the maturity and the highly fungible nature of
those feedstock systems. In contrast, other commenters argued that
recordkeeping and reporting requirements are necessary to ensure that
feedstocks are properly verified as renewable biomass to prevent
undesirable impacts on natural ecosystems and wildlife habitat
globally.
    We also sought comment on the possible use under EISA of non-
governmental, third-party verification programs used for certifying and
tracking agricultural and forest products from point of origin to point
of use both within the U.S. and outside the U.S. We examined third-
party organizations that certify specific types of biomass from
croplands and organizations that certify forest lands, including the
Roundtable on Sustainable Palm Oil, the Basel Criteria for Responsible
Soy Production, the Roundtable on Sustainable Biofuels (RSB) and the
Better Sugarcane Initiative (BSI). Additionally, we examined the work
of the international Soy Working Group, the Brazilian Association of
Vegetable Oil Industries (ABIOVE) and Brazil's National Association of
Grain Exporters (ANEC), Greenpeace, Verified Sustainable Ethanol
initiative, the Sustainable Agriculture Network (SAN), the Forest
Stewardship Council (FSC), American Tree Farm program and Sustainable
Forestry Initiative (SFI). We proposed not to solely rely on any
existing third-party verification program to implement the land
restrictions on renewable biomass under RFS2 for several reasons. These
programs are limited in the scope of products they certify, the acreage
of land certified through third parties in the U.S. covers only a small
portion of the total available land estimated to qualify for renewable
biomass production under the EISA definition, and none of the existing
third-party systems had definitions or criteria that perfectly match
the land use definitions

and restrictions contained in the EISA definition of renewable biomass.
    We received several comments indicating that producers would like
to use evidence of their participation in these types of programs to
prove that their feedstocks meet the definition of renewable biomass.
Others argued that while, at this time, the requirements of third-party
programs may not encompass all of the restrictions and requirements of
EISA's renewable biomass definition, the programs may alter their
criteria in the future to parallel EISA's requirements. EPA agrees that
this is a possibility and, in the future, will consider the use of
these programs in order to simplify compliance with the renewable
biomass requirements. We encourage fuel producers to work to identify
changes to such programs that could allow them to be used as a viable
compliance option.
    In the proposal, EPA also acknowledged that land restrictions
contained within the definition of renewable biomass may not, in
practice, result in a significant change in agricultural practices,
since biomass from nonqualifying lands may still be used for non-fuel
(e.g., food) purposes. Therefore, we sought comment on a stakeholder
suggestion to establish a baseline level of production of biomass
feedstocks such that reporting and recordkeeping requirements would be
triggered only when the baseline production levels of feedstocks used
for biofuels were exceeded. Additionally, EPA offered as an alternative
the use of existing satellite and aerial imagery and mapping software
and tools to implement the renewable biomass provisions of EISA. We
received numerous comments in support of these options. Commenters
argued that USDA collects and maintains ample data on land use that EPA
could use to demonstrate that, due to increasing crop yields and other
considerations, agricultural land acreage will not expand, at least in
the near term, to accommodate the increased renewable fuel obligations
of RFS2.
    EPA also sought comment on an additional alternative in which EPA
would require renewable fuel producers to set up and administer a
company-wide quality assurance program that would create an additional
level of rigor in the implementation scheme for the EISA land
restrictions on renewable biomass. EPA is not finalizing this company-
wide quality assurance program approach, but rather, is encouraging the
option for an industry-wide quality assurance program, as described in
the following section, to be administered.
i. Recordkeeping and Reporting for Feedstocks
    After considering the comments we received on the proposed
approach, EPA is finalizing reporting and recordkeeping requirements
comparable to those in the approach we discussed in the proposed rule
for all categories of renewable biomass, with the exception of planted
crops and crop residue from agricultural land in the United States,
which will be covered by the aggregate compliance approach discussed
below in Section II.B.4.c.iii. EPA believes that these requirements on
the fuel producer utilizing feedstocks other than crops and crop
residue are necessary to ensure that the definition of renewable
biomass is being met, and to allow feedstocks to be traced from their
original producer to the renewable fuel production facility.
Furthermore, we believe that, in most cases, feedstock producers will
already have or will be able to easily generate the specified
documentation for renewable fuel producers necessary to provide them
with adequate assurance that the feedstock in question meets the
definition of renewable biomass.
    Under today's rule, all renewable fuel producers must maintain
written records from their feedstock suppliers for each feedstock
purchase that identify the type and amount of feedstocks and where the
feedstock was produced and that are sufficient to verify that the
feedstock qualifies as renewable biomass. Specifically, renewable fuel
producers must maintain maps and/or electronic data identifying the
boundaries of the land where the feedstock was produced, product
transfer documents (PTDs) or bills of lading tracing the feedstock from
that land to the renewable fuel production facility, and other written
records that serve as evidence that the feedstock qualifies as
renewable biomass. We believe the maps or electronic data can be easily
generated using existing Web-based information.
    Producers using planted trees and tree residue from tree
plantations must maintain additional documentation that serves as
evidence that the tree plantation was cleared prior to December 19,
2007, and actively managed as a tree plantation on December 19, 2007.
This documentation must consist of the following types of records which
must be traceable to the land in question: Sales records for planted
trees or slash; purchasing records for fertilizer, weed control, or
reseeding, including seeds, seedlings, or other nursery stock together
with other written documentation connecting the land in question to
these purchases; a written management plan for silvicultural purposes;
documentation of participation in a silvicultural program sponsored by
a Federal, state or local government agency; or documentation of land
management in accordance with a silvicultural product certification
program; an agreement for land management consultation with a
professional forester that identifies the land in question; or evidence
of the existence and ongoing maintenance of a road system or other
physical infrastructure designed and maintained for logging use. There
are many existing programs, such as those administered by USDA and
independent third-party certifiers, that could be used as documentation
that verifies that feedstock from certain land qualifies as renewable
biomass. For example, many tree plantation owners already participate
in a third-party certification program such as FSC or SFI. Written
proof of participation by a tract of land in a program of this type on
December 19, 2007 would be sufficient to show that a tree plantation
was cleared prior to that date and that it was actively managed on that
date. The tree plantation owner would need to send copies of this
documentation to the renewable fuel producer when supplying them with
biomass that will be used as a renewable fuel feedstock.
    We anticipate that the recordkeeping requirements will result in
renewable fuel producers amending their contracts and modifying their
supply chain interactions to satisfy the requirement that producers
have documented assurance and proof about their feedstock's origins.
Enforcement will rely in part on EPA's review of renewable fuel
production reports and attest engagements of renewable fuel producers'
records. EPA will also consult other data sources, including any data
made available by USDA, and may conduct site visits or inspections of
feedstock producers' and suppliers' facilities.
    The reporting requirements for renewable biomass in today's final
rule include, as proposed, include an affirmation by the renewable fuel
producer for each batch of renewable fuel for which they generate RINs
that the feedstocks used to produce the batch meet the definition of
renewable biomass. Additionally, the final reporting requirements
include a quarterly report to be sent to EPA by each renewable fuel
producer that includes a summary of the types and volumes of feedstocks
used throughout the quarter, as well as electronic data or maps
identifying the land from which those feedstocks were harvested.

Producers need not provide duplicate maps if purchasing feedstocks
multiple times from one plot of land; producers may cross-reference the
previously submitted map. Producers will also be required to keep
records tracing the feedstocks from the land to the renewable fuel
production facility, other written records from their feedstock
suppliers that serve as evidence that the feedstock qualifies as
renewable biomass, and for producers using planted trees or tree
residue from tree plantations, written records that serve as evidence
that the land from which the feedstocks were obtained was cleared prior
to December 19, 2007 and actively managed on that date. These
requirements will apply to renewable fuel producers using feedstocks
from foreign sources (unless special approvals are granted in the
future, as described below), or from domestic sources, except for
planted crops or crop residue (discussed below).
    This approach will be integrated into the existing registration,
recordkeeping, reporting, and attest engagement procedures for
renewable fuel producers. It places the burden of implementation and
enforcement on renewable fuel producers rather than bringing feedstock
producers and suppliers directly under EPA regulation, minimizing the
number of regulated parties under RFS2.
    EPA also sought comment on, and is finalizing as an option, an
alternative approach in which EPA allows renewable fuel producers and
renewable fuel feedstock producers and suppliers to develop a quality
assurance program for the renewable fuel production supply chain,
similar to the model of the successful Reformulated Gasoline Survey
Association. While individual renewable fuel producers may still choose
to comply with the individual renewable biomass recordkeeping and
reporting requirements rather than participate in a quality assurance
program, we believe that this preferred alternative could be less
costly than an individual compliance demonstration, and it would add a
quality assurance element to RFS2. Those participating renewable fuel
producers would be presumed to be in compliance with the renewable
biomass requirements unless and until the quality assurance program
finds evidence to the contrary. Under today's rule, renewable fuel
producers must choose either to comply with the individual renewable
biomass recordkeeping and reporting described above, or they must
participate in the quality assurance program.
    The quality assurance program must be carried out by an independent
auditor funded by renewable fuel producers and feedstock suppliers. The
program must consist of a verification program for participating
renewable fuel producers and renewable feedstock producers and handlers
designed to provide independent oversight of the feedstock handling
processes that are required to determine if a feedstock meets the
definition of renewable biomass. Under this option, a participating
renewable fuel producer and its renewable feedstock suppliers and
handlers would have to participate in the funding of an organization
which arranges to have an independent auditor conduct a program of
compliance surveys. The compliance audit must be carried out by an
independent auditor pursuant to a detailed survey plan submitted to EPA
for approval by November 1 of the year preceding the year in which the
alternative compliance program would be implemented. The compliance
survey program plan must include a statistically supportable
methodology for the survey, the locations of the surveys, the frequency
of audits to be included in the survey, and any other elements that EPA
determines are necessary to achieve the same level of quality assurance
as the individual recordkeeping and reporting requirements included in
the RFS2 regulations.
    Under this alternative compliance program, the independent auditor
would be required to visit participating renewable feedstock producers
and suppliers to determine if the biomass they supply to renewable fuel
producers meets the definition of renewable biomass. This program would
be designed to ensure representative coverage of participating
renewable feedstock producers and suppliers. The auditor would generate
and report the results of the surveys to EPA each calendar quarter. In
addition, where the survey finds improper designations or handling, the
renewable fuel producers would be responsible for identifying and
addressing the root cause of the problem. The renewable fuel producers
would have to take corrective action to retire the appropriate number
of invalid RINs depending on the violation. EPA received comments from
a number of parties who were supportive of this option as an
alternative and less-burdensome way of ensuring that renewable fuel
feedstocks meet the definition of renewable biomass. EPA believes this
option to be an efficient and effective means of implementing and
enforcing the renewable biomass requirements of EISA, and has therefore
included it as a compliance option in today's final rule.
ii. Approaches for Foreign Producers of Renewable Fuel
    The EISA renewable biomass language does not distinguish between
domestic renewable fuel and fuel feedstocks and renewable fuel and fuel
and feedstocks that come from abroad. EPA proposed that foreign
producers of renewable fuel that is exported to the U.S. be required to
meet the same compliance obligations as domestic renewable fuel
producers, as well as some additional measure, discussed in Section
II.C., designed to facilitate EPA enforcement in other countries. These
proposed obligations include facility registration and submittal of
independent engineering reviews (described in Section II.C below), and
reporting, recordkeeping, and attest engagement requirements. The
proposal also would have included for foreign producers the same
obligations that domestic producers have for verifying that their
feedstock meets the definition of renewable biomass, such as certifying
on each renewable fuel production report that their renewable fuel
feedstock meets the definition of renewable biomass and working with
their feedstock suppliers to ensure that they receive and maintain
accurate and sufficient documentation in their records to support their
claims.
(1) RIN-Generating Importers
    EPA proposed to allow importers to generate RINs for renewable fuel
they are importing into the U.S. only if the foreign producer of that
renewable fuel had not already done so. Under the proposal, in order to
generate RINs, importers would need to obtain information from the
registered foreign producers concerning the point of origin of their
fuel's feedstock and whether it meets the definition of renewable
biomass. Therefore, we proposed that in the event that a batch of
foreign-produced renewable fuel does not have RINs accompanying it when
it arrives at a U.S. port, an importer must obtain documentation that
proves that the fuel's feedstock meets the definition of renewable
biomass (as described in Section II.B.4.a. of this preamble) from the
fuel's producer, who must have registered with the RFS program and
conducted a third-party engineering review. With such documentation,
the importer could generate RINs prior to introducing the fuel into
commerce in the U.S.
    We sought comment on this proposed approach and whether and to what
extent the approaches for ensuring

compliance with the EISA's land restrictions by foreign renewable fuel
producers should differ from the proposed approach for domestic
renewable fuel producers. We received comments on the proposed
implementation option for importers of foreign renewable fuel. Some
argue that the proposed recordkeeping requirements for imported fuel
were overly burdensome. On the other hand, others argued that
importers, similarly to domestic producers, should be required to
obtain information that can serve as evidence that the feedstocks meet
the definition of renewable biomass, in order to avoid fraud. Some
commenters also argued that importers should be able to generate RINs
for fuel imported from foreign producers that are not registered with
EPA under the RFS2 program.
    For the final rule, EPA is requiring that importers may only
generate RINs for renewable fuel if the foreign producer has not
already done so. The foreign producers must be registered with EPA
under the RFS2 program, and must have conducted an independent
engineering review. Furthermore, we are requiring that importers obtain
from the foreign producer and maintain in their records written
documentation that serves as evidence that the renewable fuel for which
they are generating RINs was made from feedstocks meeting the
definition of renewable biomass. The foreign producer that originally
generated the fuel must ensure that these feedstock records are
transferred with each batch of fuel and ultimately reach the RIN-
generating importer. A requirement that importers maintain these
renewable biomass records is consistent with the renewable biomass
recordkeeping requirements imposed on domestic producers of renewable
fuel.
(2) RIN-Generating Foreign Producers
    Foreign producers that intend to generate RINs would be required to
designate renewable fuel intended for export to the U.S. as such,
segregate the volume until it reaches the U.S., and post a bond to
ensure that penalties can be assessed in the event of a violation, as
discussed in Section II.D.2.b. Similarly to domestic producers of
renewable fuel, foreign producers must obtain and maintain written
documentation from their feedstock providers that can serve as evidence
that their feedstocks meet the definition of renewable biomass. Foreign
producers may also develop a quality assurance program for their
renewable fuel production supply chain, as described above. However,
while domestic renewable fuel producers using crops or crop residues
may rely on the aggregate compliance approach described below to ensure
that their feedstocks are renewable biomass, this approach is not
available at this time to foreign renewable fuel producers, as
described below.
    EPA believes that the renewable biomass recordkeeping provisions
are necessary in order for EPA to ensure that RINs are being generated
for fuel that meets EISA's definition of renewable fuel. Just as for
domestic producers, foreign producers must maintain evidence that the
fuel meets the GHG reduction requirements and is made from renewable
biomass.
iii. Aggregate Compliance Approach for Planted Crops and Crop Residue
From Agricultural Land
    In light of the comments received on the proposed renewable biomass
recordkeeping requirements and implementation options, EPA sought
assistance from USDA in determining whether existing data and data
sources might suggest an alternative method for verifying compliance
with renewable biomass requirements associated with the use of crops
and crop residue for renewable fuel production. Taking into
consideration publicly available data on agricultural land available
from USDA and USGS as well as expected economic incentives for
feedstock producers, EPA has determined that an aggregate compliance
approach is appropriate for certain types of renewable biomass, namely
planted crops and crop residue from the United States.
    Under the aggregate compliance approach, EPA is determining for
this rule the total amount of ``existing agricultural land'' in the
U.S. (as defined above in Section II.B.4.a.) at the enactment date of
EISA, which is 402 million acres. EPA will monitor total agricultural
land annually to determine if national agricultural land acreage
increases above this 2007 national aggregate baseline. Feedstocks
derived from planted crops and crop residues will be considered to be
consistent with the definition of renewable biomass and renewable fuel
producers using these feedstocks will not be required to maintain
specific renewable biomass records as described below unless and until
EPA determines that the 2007 national aggregate baseline is exceeded.
If EPA finds that the national aggregate baseline is exceeded,
individual recordkeeping and reporting requirements as described below
will be triggered for renewable fuel producers using crops and crop
residue. We believe that the aggregate approach will fully ensure that
the EISA renewable biomass provisions related to crops and crop residue
are satisfied, while also easing the burden for certain renewable fuel
producers and their feedstock suppliers vis-[agrave]-vis verification
that their feedstock qualifies as renewable biomass.
    As discussed in more detail below, there are five main factors
supporting the aggregate compliance approach we are taking for planted
crops and crop residue. First, EPA is using data sets that allow us to
obtain an appropriately representative estimate of the agricultural
lands available under EISA for the production of crops and crop residue
as feedstock for renewable fuel production. Second, USDA data indicate
an overall trend of agricultural land contraction. These data, together
with EPA economic modeling, suggest that 2007 aggregate baseline
acreage should be sufficient to support EISA renewable fuel obligations
and other foreseeable demands for crop products, at least in the near
term, without clearing and cultivating additional land. Third, EPA
believes that existing economic factors for feedstock producers favor
more efficient utilization practices of existing agricultural land
rather than converting non-agricultural lands to crop production.
Fourth, if, at any point, EPA finds that the total amount of land in
use for the production of crops including crops for grazing and forage
is equal or greater than 397 million acres (i.e. within 5 million acres
of EPA's established 402 million acre baseline), EPA will conduct
further investigations to evaluate whether the presumption built into
the aggregate compliance approach remains valid. Lastly, EPA has set up
a trigger mechanism that in the event there are more than the baseline
amount of acres of cropland, pastureland and CRP land in production,
renewable fuel producers will be required to meet the same individual
or consortium-based recordkeeping and reporting requirements applicable
to RIN-generating renewable fuel producers using other feedstocks.
Taken together, these factors give EPA high confidence that the
aggregate compliance approach for domestically grown crops and crop
residues meets the statutory obligation to ensure feedstock volumes
used to meet the renewable fuel requirements also comply with the
definition of renewable biomass.
(1) Analysis of Total Agricultural Land in 2007
    As described in Section II.B.4.a. above, EPA is defining ``existing
agricultural land'' for purposes of the

EISA land use restrictions on crops and crop residue to include
cropland, pastureland and CRP land that was cleared and actively
managed or fallow and nonforested on the date of EISA enactment. To
determine the aggregate total acreage of existing agricultural land for
the aggregate compliance approach on the date of EISA enactment, EPA
obtained from USDA data representing total cropland (including fallow
cropland), pastureland, and CRP land in 2007 from three independently
gathered national land use data sources (discussed in further detail
below): The Farm Service Agency (FSA) Crop History Data, the USDA
Census of Agriculture (2007), and the satellite-based USDA Crop Data
Layer (CDL). In addition, CRP acreage is provided by FSA's annually
published ``Conservation Reserve Program: Summary and Enrollment
Statistics.'' By definition, the cropland, pastureland, and CRP land
included in these data sources for 2007 were cleared or cultivated on
the date of EISA enactment (December 19, 2007) and, consistent with the
principles set forth in Section II.4.a.i, would be considered
``actively managed'' or fallow and nonforested on that date. These
categories of lands include those from which traditional crops, such as
corn, soy, wheat and sorghum, would likely be grown. Therefore
quantification of cropland, pastureland, and CRP land from these data
sources represents a reasonable assessment of the acreage in the United
States that is available under the Act for the production of crops and
crop residues that could satisfy the definition of renewable biomass in
EISA.
    Conservation Reserve Program Data. FSA reports CRP enrollment
acreage each year in the publication ``Conservation Reserve Program:
Summary and Enrollment Statistics.'' The CRP program includes the
general CRP, the Conservation Reserve Enhancement Program (CREP), and
the Farmable Wetlands Program (FWP). The Wetlands Reserve Program (WRP)
and Grasslands Reserve Program (GRP) are not under CRP and are not
included in the total agricultural land figure in this rulemaking. The
2007 CRP acreage was 36.7 million acres. This is an exact count of
acreage within the CRP program in 2007.
    Farm Service Agency Crop History Data. The FSA maintains annual
records of field-level land use data for all farms enrolled in FSA
programs. Almost all national cropland and pastureland is reported
through FSA and recorded in this data set. We used the ``Cropland''
category to determine total agricultural land. Pastureland is reported
by farms under the category ``Cropland'' as cropland used for grazing
and forage under the crop type ``mixed forage.'' Timber land and any
grazed native grass was removed from the ``Cropland'' category, because
these land types represent either forestland or rangeland, which are
not within the definition of existing agricultural land. CRP lands and
other conservation program lands are also reported as cropland. Because
GRP and WRP lands are not within the definition of ``existing
agricultural land'' as defined in today's regulations, they were also
subtracted from the ``Cropland'' category total. FSA Crop History Data
show that there was 402 million acres of agricultural land, as defined
here, in the U.S. in 2007 (See Table II.B.4-1).

   Table II.B.4-1--Total U.S. Agricultural Land in 2007 From USDA Data
                                 Sources
------------------------------------------------------------------------
                                             FSA crop      Agricultural
              Land category                history data     census data
------------------------------------------------------------------------
Cropland and Pastureland................             365             367
CRP Land................................              37              37
                                         -------------------------------
    Total Land..........................             402             404
------------------------------------------------------------------------

    USDA Census of Agriculture. USDA conducts a full census of the U.S.
agricultural sector once every five years. The data are available for
the U.S., each of the 50 States, and for each county. The most recent
census available is the 2007 Census of Agriculture. For the purpose of
this rulemaking, USDA provided EPA total acreage and 95% confidence
intervals for the Census category ``Total Cropland,'' which includes
the sub-categories ``Harvested cropland,'' ``Cropland used only for
pasture and grazing,'' and ``Other cropland.'' WRP and GRP acreage are
included in ``Other cropland,'' so, for purposes of this rulemaking,
they were subtracted from the sub-category number (see above). The
analysis excluded the ``Permanent rangeland and pasture'' category, as
the pasture data cannot be separated from rangeland in this category.
Total CRP acreage in 2007 was added to ``Total cropland.'' With these
adjustments, the Census of Agriculture showed 404 million acres (95%
confidence range 401-406 million acres) of existing agricultural land
as defined in today's rule, in the U.S. in 2007 (See Table II.B.4-1).
    Crop Data Layer. The USDA National Agricultural Statistics Service
(NASS) Crop Data Layer (CDL) is a raster, geo-referenced, crop-specific
land cover data layer suitable for use in geographic information
systems (GIS) analysis. Based on satellite data, the CDL has a ground
resolution of 56 meters and was verified using FSA surveys. The CDL
covers 21 major agricultural states for 2007 and therefore cannot be
used to determine a 2007 national aggregate agricultural land baseline.
There will be full coverage of the 48 contiguous states for 2009, and
the CDL can be used for analysis validation purposes during monitoring.
From 2010 onward, it coverage of the 48 contiguous states will be
dependent on available funding. GIS analyses of the CDL will include
all cropland and pastureland data for each state. To ensure that non-
pasture grasslands are not included in the final sum, all areas of the
``Grassland herbaceous'' category from the U.S. Geological National
Land Cover Data layer (NLCD) that overlap the CDL layers are removed
from the total agricultural land number. Producer and user accuracies
\8\ are available for the CDL crop categories.
---------------------------------------------------------------------------

    \8\ ``Producer Accuracy'' indicates the probability that a
groundtruth pixel will be correctly mapped and measures errors of
omission; ``User Accuracy'' indicates the probability that a pixel
from the classification actually matches the groundtruth data and
measures errors of omission.
---------------------------------------------------------------------------

    Primary Data Source Selection for Aggregate Compliance Approach.
EPA has determined that the FSA Crop History Data will be used as the
data set on which the total existing agricultural land baseline will be
based for the aggregate compliance approach. The FSA Crop History Data
is the only complete data set for 2007 that is collected annually,
enabling EPA to monitor agricultural land expansion or

contraction from year to year using a consistent data set. The total
existing agricultural land value derived from FSA Crop History Data
rests within the 95% confidence interval of the 2007 Census of
Agriculture and is only 2 million acres less than the Census of
Agriculture point estimate. The Census of Agriculture provides slightly
fuller coverage than the FSA Crop History Data due to the nature of the
data collection; however, given that both data collection systems have
consistent and long-standing methodologies, the disparity between the
two should remain approximately constant. Therefore, the FSA Crop
History Data will provide a consistent data set for analyzing any
expansion or contraction of total national agricultural land in the
U.S.
    During its annual monitoring, EPA will use the FSA Crop History
Data and the CDL analyses as a secondary source to validate our annual
assessment. In years when the Census of Agriculture is updated, this
data will also be used to validate our annual assessment. Other data
sources, such as the annual NASS Farms, Land in Farms and Livestock
Operations may also be useful as secondary data checks. Lastly, EPA
intends to consider, as appropriate, other data sources for the annual
monitoring analysis of total agricultural land as new technologies and
data sources come online that would improve the accuracy and robustness
of annual monitoring.
(2) Aggregate Agricultural Land Trends Over Time
    The Census of Agriculture (conducted every five years) shows that
U.S. agricultural land has decreased by 44 million acres from 1997 to
2007, indicating an overall decade trend of contraction of agricultural
land utilization despite some year-to-year variations that can be seen
by reference to the annual FSA Crop History records (See Table II.B.4-2
and Table II.B.4-3). EPA's FASOM modeling results, which model full
EISA volumes in 2022, support this contraction trend, indicating that
total cropland, pastureland, and CRP land in the U.S. in 2022, under a
scenario of full renewable fuel volume as required by EISA, would be
less than the 2007 national acreage reported in the FSA Crop History
Data (See preamble Section VII and RIA Chapter 5).

Table II.B.4-2--Total Agricultural Land (as Defined in Section II.B.4.a)
           Counted in the Census of Agriculture From 1997-2007
------------------------------------------------------------------------
                                                 Total agricultural land
                  Census year                      (millions of acres)
------------------------------------------------------------------------
2007...........................................                      404
2002 *.........................................                      431
1997 *.........................................                      445
------------------------------------------------------------------------
\*\ 2002 data do not include farms with land in FWP or CREP.

Table II.B.4-3--Total Agricultural Land (as Defined in Section II.B.4.a)
            Recorded in FSA Crop History Data From 2005-2007
------------------------------------------------------------------------
                                                 Total agricultural land
                      Year                         (millions of acres)
------------------------------------------------------------------------
2007...........................................                      402
2006...........................................                      393
2005...........................................                      392
------------------------------------------------------------------------

(3) Aggregate Compliance Determination
    The foundation of the aggregate compliance approach is
establishment of a baseline amount of eligible agricultural land that
was cleared or cultivated and actively managed or fallow and non-
forested on December 19, 2007. Based on USDA-FSA Crop History Data, EPA
is establishing a baseline of 402 million acres of U.S. agricultural
land, as defined in Section II.B.4.a and based upon the methods
described in Section II.B.4.c.iii.(1), that is eligible for production
of planted crops and crop residue meeting the EISA definition of
renewable biomass. EPA will monitor total U.S. agricultural land
annually, using FSA Crop History Data as a primary determinant, but
using other data sources for support (See Section II.4.c.iii.(1)). If,
at any point, EPA finds that the total land in use for the production
of crops, including crops for grazing and forage, is greater than 397
million acres (i.e. within 5 million acres of EPA's established 402
million acre baseline), EPA will conduct further investigations to
evaluate whether the presumption built into the aggregate compliance
approach remains valid. Additionally, if EPA determines that the data
indicates that this 2007 baseline level of eligible agricultural land
has been exceeded, EPA will publish in the Federal Register a finding
to that effect, and additional requirements will be triggered for
renewable fuel producers to verify that they are using planted crops
and crop residue from ``existing agricultural land'' as defined in
today's rule as their renewable fuel feedstock. EPA's findings will be
published by November 30, at the latest. If in November the 402 million
acres baseline is found to be exceeded, then on July 1 of the following
year, renewable fuel producers using feedstocks qualifying for this
aggregate compliance approach, namely planted crops and crop residue
from the United States, will be required to comply with the
recordkeeping and reporting requirements applicable to producers using
other types of renewable biomass, as described in the previous
sections. This includes the option that fuel producers could utilize a
third-party consortium to demonstrate compliance.
    EPA acknowledges that it is possible that under this approach some
of the land available under EISA for crop production on the date of
EISA enactment could be retired and other land brought into production,
without altering the assessment of the aggregate amount of cropland,
pastureland and CRP land. Under EISA, crops or crop residues from the
new lands would not qualify as renewable biomass. However, EPA expects
such shifts in acreage to be de minimus, as long as the total aggregate
amount of agricultural land does not exceed the 2007 national aggregate
baseline. EPA expects that new lands are unlikely to be cleared for
agricultural purposes for two reasons. First, it can be assumed that
most undeveloped land that was not used as agricultural land in 2007 is
generally not suitable for agricultural purposes and would serve only
marginally well for production of renewable fuel feedstocks. Due to the
high costs and significant inputs that would be required to make the
non-agricultural land suitable for agricultural purposes, it is highly
unlikely that farmers will undertake the effort to ``shift'' land that
is currently non-agricultural into agricultural use. Second, crop
yields are projected to increase, reducing the need for farmers to
clear new land for agricultural purposes. We believe that this effect
is reflected in the overall trend, discussed earlier, of an overall
contraction in agricultural land acreage over time.
    If EPA determines that the baseline is exceeded, and that
individual compliance with the renewable biomass reporting and
recordkeeping requirements is triggered, renewable fuel producers using
crops and crop residue as a feedstock for renewable fuel would become
responsible, beginning July 1 of the following year, for meeting
individual recordkeeping and reporting requirements related to
renewable biomass verification. These requirements are identical to
those that

apply to producers using other types of renewable biomass feedstocks,
such as planted trees from tree plantations, as described in the
previous sections. Renewable fuel producers generating RINs under the
RFS2 program would continue to be required to affirm (through EMTS--EPA
Moderated Transaction System) for each batch of renewable fuel that
their feedstocks meet the definition of renewable biomass.
Additionally, producers would send a quarterly report to EPA that
includes a summary of the types and volumes of feedstocks used
throughout the quarter, as well as electronic data or maps identifying
the land from which those feedstocks were harvested.
    Furthermore, those RIN-generating renewable fuel producers will be
required to obtain and maintain in their files written records from
their feedstock suppliers for each feedstock purchase that identify
where the feedstocks were produced and that are sufficient to verify
that the feedstocks qualify as renewable biomass. This includes maps
and/or electronic data identifying the boundaries of the land where the
feedstock was produced, PTDs or bills of lading tracing the feedstock
from that land to the renewable fuel production facility, and other
written records that serve as evidence that the feedstock qualifies as
renewable biomass. Finally, producers using planted crops and crop
residue must maintain additional documentation that serves as evidence
that the agricultural land used to produce the crop or crop residue was
cleared or cultivated and actively managed or fallow, and nonforested
on December 19, 2007. This documentation must consist of the following
types of records which must be traced to the land in question: sales
records for planted crops, crop residue, or livestock, purchasing
records for land treatments such as fertilizer, weed control, or
reseeding or a written agricultural management plan or documentation of
participation in an agricultural program sponsored by a Federal, State
or local government agency.
    Alternatively, if the baseline is exceeded and the requirements are
triggered for individual producer verification that their feedstocks
are renewable biomass renewable fuel producers may choose to work with
other renewable fuel producers as well as feedstock producers and
suppliers to develop a quality assurance program for the renewable fuel
production supply chain. This quality assurance program would take the
place of individual accounting and would consist of an independent
third party quality-assurance survey of all participating renewable
fuel producers and their feedstock suppliers, completed in accordance
with an industry-developed, EPA-approved plan, to ensure that they are
utilizing feedstocks that meet the definition of renewable biomass. An
in-depth discussion of this industry survey option is included in the
previous section.
    While the aggregate compliance approach is appropriate for planted
crops and crop residues from agricultural land in the United States,
due in part to certain additional or different constraints imposed by
EISA, the aggregate approach cannot be applied, at this time, to the
other types of renewable biomass. Renewable fuel producers utilizing
these types of renewable biomass, including planted trees and tree
residues from tree plantations, slash and pre-commercial thinnings from
non-federal forestland, animal waste, separated yard and food waste,
etc., will be subject to the individual reporting and recordkeeping
requirements discussed in the previous section.
    Additionally, EPA is not finalizing the aggregate compliance
approach for foreign producers of renewable fuel. EPA does not, at this
time, have sufficient data to make a finding that non-domestically
grown crops and crop residues used in renewable fuel production satisfy
the definition of renewable biomass. Nevertheless, if, in the future,
adequate land use data becomes available to make a finding that, in the
aggregate, crops and crop residues used in renewable fuel production in
a particular country satisfy the definition of renewable biomass, EPA
is willing to consider an aggregate compliance approach for renewable
biomass on a country by country basis, in lieu of the individual
recordkeeping and reporting requirements.
d. Treatment of Municipal Solid Waste (MSW)
    The statutory definition of ``renewable biomass'' does not include
a reference to municipal solid waste (MSW) as did the definition of
``cellulosic biomass ethanol'' in the Energy Policy Act of 2005
(EPAct), but instead includes ``separated yard waste and food waste.''
    We solicited comment on whether EPA can and should interpret EISA
as including MSW that contains yard and/or food waste within the
definition of renewable biomass. On the one hand, the reference in the
statutory definition to ``separated yard waste and food waste,'' and
the lack of reference to other components of MSW (such as waste paper
and wood waste) suggests that only yard and food wastes physically
separated from other waste materials satisfy the definition of
renewable biomass. On the other hand, we noted that EISA does not
define the term ``separated,'' and so does not specify the degree of
separation required. We also noted that there was some evidence in the
Act that Congress did not intend to exclude MSW entirely from the
definition of renewable biomass. The definition of ``advanced biofuel''
includes a list of fuels that are ``eligible for consideration'' as
advanced biofuel, including ``ethanol derived from waste material'' and
biogas ``including landfill gas.''
    As an initial matter, we note that some materials clearly fall
within the definition of ``separated yard or food waste.'' The statute
itself identifies ``recycled cooking and trap grease'' as one example
of separated food waste. An example of separated yard waste is the leaf
waste that many municipalities pick up at curbside and keep separate
from other components of MSW for mulching or other uses. However, a
large quantity of food and yard waste is disposed of together with
other household waste as part of MSW. EPA estimates that about 120
million tons of MSW are disposed of annually much of it inextricably
mixed with yard and especially food waste. This material offers a
potentially reliable, abundant and inexpensive source of feedstock for
renewable fuel production which, if used, could reduce the volume of
discarded materials sent to landfills and could help achieve both the
GHG emissions reductions and energy independence goals of EISA. Thus,
EPA believes we should consider under what conditions yard and food
waste that is present in MSW can be deemed sufficiently separated from
other materials to qualify as renewable biomass.
    One commenter stated that it is clear that MSW does not qualify as
renewable biomass under EISA, since the 2005 Energy Policy Act
explicitly allowed for qualifying renewable fuel to be made from MSW,
and EISA has no mention of it. Commenters from the renewable fuel
industry generally favored maximum flexibility for the use of MSW in
producing qualifying fuels under EISA, offering a variety of arguments
based on the statutory text and reasons why it would benefit the
environment and the nation's energy policy to do so. They favored
either (1) a determination that unsorted MSW can be used as a feedstock
for advanced biofuel even if it does not meet the definition of

renewable biomass, (2) that the Act be interpreted to include MSW as
renewable biomass, or (3) that MSW from which varying amounts of
recyclable materials have been removed could qualify as renewable
biomass. A consortium of ten environmental groups said that for EISA
volume mandates to be met, it is important to take advantage of biomass
resources from urban wastes that would otherwise be landfilled. They
urged that post-recycling residues (i.e., those wastes that are left
over at material recovery facilities after separation and recycling)
would fit within the letter and spirit of the definition of renewable
biomass.
    EPA does not believe that the statute can be reasonably interpreted
to allow advanced biofuel to be made from material that does not meet
the definition of renewable biomass as suggested in the first approach.
The definition of advanced biofuel specifies that it is a form of
``renewable fuel,'' and renewable fuel is defined in the statute as
fuel that is made from renewable biomass. While the definition of
advanced biofuel includes a list of materials that ``may'' be
``eligible for consideration'' as advanced biofuel, and that list
includes ``ethanol derived from waste materials'' and biogas
``including landfill gas,'' the fact that the specified items are
``eligible for consideration'' indicates that they do not necessarily
qualify but must meet the definitional requirements--being ``renewable
fuel'' made from renewable biomass and having life cycle greenhouse gas
emissions that are at least 50% less than baseline fuel. There is
nothing in the statute to suggest that Congress used the term
``renewable fuel'' in the definition of ``advanced biofuel'' to have a
different meaning than the definition provided in the statute. The
result of the commenter's first approach would be that general
renewable fuel and cellulosic biofuel would be required to be made from
renewable biomass because the definitions of those terms specifically
refer to renewable biomass, whereas advanced biofuel and biomass-based
diesel would not, because their definitions refer to ``renewable fuel''
rather than ``renewable biomass.'' EPA can discern no basis for such a