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Statement of Need:

This action proposes various changes to our fuel and renewable fuel regulations to remove barriers to the production and use of renewable fuels. First, this action would resolve several outstanding issues and provide clarification on certain Renewable Fuel Standard (RFS) requirements. Second, this action would propose to allow for a feedstock partially converted at one facility (referred to as a biointermediate) to be fully converted into finished renewable fuel at another facility. Finally, this action would provide production flexibilities and carry over gasoline fuel quality standards to gasoline-ethanol blends containing 16 to 83 volume percent ethanol (referred to as ethanol flex fuel (EFF)). The increased flexibility provided by this rule for biointermediates and EFF could result in the increased production and use of renewable fuels in support of the RFS program.

Summary of the Legal Basis:

Statutory authority for this action comes from Clean Air Act sections 203 to 205, 208, 211, and 301.

Alternatives:

This action to proposes to establish fuel quality standards for EFF that are equivalent to those already in place for gasoline. Producers would demonstrate compliance based on their ability to affect fuel quality and certain types of producers would be able to use natural gasoline as a blendstock to produce EFF. Alternatively, EPA also considered a simplified approach that would restrict EFF blendstocks to gasoline, blendstocks for oxygenate blending (BOBs), and denatured fuel ethanol. EPA is seeking comment on this alternative approach.

Anticipated Costs and Benefits:

The two main areas where this proposal would have economic impacts are the proposed provisions for EFF and gasoline produced at blender pumps, and the proposed provisions for biointermediates. The proposal would provide significant additional regulatory flexibility, streamlined compliance provisions, and the opportunity for increased biofuel production at reduced cost. The cost savings are anticipated to far outweigh the minor costs imposed for demonstrating compliance. In most cases, the associated costs would only apply to those parties that elect to take advantage of the proposed flexibilities because the potential economic benefits outweigh the costs. This proposal contains minor additional registration, reporting, and recordkeeping requirements that would apply to some parties in the biofuel production and distribution system that do not take advantage of the proposed flexibilities as well as those that do.

Risks:

This proposed rule does not affect the level of protection provided to human health or the environment by applicable air quality standards. This action does not relax the control measures on sources regulated by the fuel programs and RFS regulations and therefore will not cause emissions increases from these sources.