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May 30, 2014

EPA Plans To Issue Several Actions That Will Impact The Biofuels Industry


On Friday, May 23, 2014, EPA published its semi-annul regulatory agenda (Agenda) indicating the Agency's upcoming priorities and timelines. A copy of the Agenda is available online. According to the Agenda, EPA plans to issue several actions that will impact the biofuels industry, including the following:

* 2014 Renewable Fuel Standard (RFS): EPA anticipates issuing the final rule in June 2014. BRAG has issued a report on the 2014 RFS. A copy of that report is available online.

* 2015 RFS: EPA anticipates issuing the proposed rule in September 2014 and the final rule in March 2015. This timeline is ambitious since EPA has not yet released its final rule setting the 2014 RFS. While EPA has stated that it intends to issue the 2014 RFS final rule in June 2014, it has not yet submitted it to the Office of Management and Budget (OMB) for its required review. By law, EPA is required to issue the following year's RFS final rule by November 30 of the previous year, but the Agency has consistently missed that deadline.

* RFS Pathways II and Amendments to RFS2: EPA expects to issue this final rule in June 2014. The Agency has already submitted it to OMB for its review. As explained in the Agenda, in June 2013, EPA issued a proposal to amend the RFS2 regulations to facilitate the introduction of new renewable fuels and improve implementation of the program. The proposal included new renewable fuel pathways designed to facilitate the ability of the biofuels industry to supply RFS qualified advanced biofuels, including cellulosic biofuels, to the market. The proposed amendments would allow renewable diesel, renewable naphtha, and renewable electricity (used in electric vehicles) produced from landfill biogas to generate cellulosic or advanced biofuel renewable identification numbers (RIN). Renewable compressed natural gas (CNG) and liquefied natural gas (LNG) produced from landfill biogas are also proposed to generate cellulosic RINs, and EPA proposed to allow butanol to qualify as an advanced biofuel. The rulemaking also proposed a clarification regarding the definition of crop residue to include corn kernel fiber and proposed an approach for determining the volume of cellulosic RINs from various cellulosic feedstocks. The proposed rule includes minor amendments to the regulations for E15 misfueling mitigation regulations to improve implementation. Finally, EPA proposed to reduce the survey requirements associated with the ultra-low sulfur diesel (ULSD) program in view of the high compliance rate that has been achieved.

* RFS RIN Quality Assurance Program: A final rule is expected to be issued in June 2014. As explained in the Agenda, since the final RFS2 regulations were issued in March 2010, in several recent instances, the production, transfer, and use of invalid RINs has resulted in violations for obligated parties that were not aware that the RINs were invalid. The rule will propose a voluntary mechanism for ensuring that RINs have been appropriately generated.

* Identification of Additional Qualifying Renewable Fuel Pathways III and Modification to the Renewable Fuels Program: A final rule is expected to be issued in December 2014. As explained in the Agenda, this rule would identify and propose amendments to Table 1 in Section 80.1426 of the RFS2 regulations to include additional fuel pathways and assign each pathway a D-Code. It would allow producers or importers of fuel produced under these pathways to generate RINs under the program, providing that the fuel meets the other requirements for renewable fuel. This proposed action would outline EPA's lifecycle greenhouse gas (GHG) evaluation, specified in Clean Air Act Section 211(o), as amended by the Energy Independence and Security Act, for several new pathways.