The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.

On May 6, 2014, in what is largely seen as a win for the U.S. Environmental Protection Agency (EPA) and the biofuels industry, the U.S. Court of Appeals for the District of Columbia Circuit rejected the challenge to EPA's final 2013 Renewable Fuel Standard (RFS) rule by Monroe Energy, LLC (Monroe Energy), a refinery and subsidiary of Delta Airlines. In Monroe Energy, LLC v. EPA, the court held that EPA properly utilized its authority under the federal RFS to set the 2013 RFS volume requirements. The court disagreed with Monroe Energy that EPA did not sufficiently consider factors in setting the final 2013 RFS rule, including the means of compliance for obligated parties. Further, the court held that the RFS provides EPA wide discretion under its cellulosic waiver provision. As such, it was within EPA's discretion to decide against lowering the overall or advanced 2013 RFS requirements when it lowered the 2013 cellulosic requirements using that authority.


The May 6 decision did not include challenges to EPA's final 2013 RFS rule related to overall, advanced, and cellulosic biofuel requirements of the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM). The court severed the API and AFPM challenges to the 2013 rule from Monroe Energy's challenge to the same rule. The court had earlier agreed to sever and hold in abeyance challenges to the cellulosic biofuel requirement under the 2013 rule while EPA reconsidered it.
 


 

On May 2, 2013, EPA published a proposed rule and a direct final rule that would amend its 2013 cellulosic requirement published on August 15, 2013. The rules are available here and here.


Through these actions, EPA is proposing a revised and reduced cellulosic standard for 2013 of 810,185 gallons. As EPA explains, the direct final rule will be "effective on July 1, 2014 without further notice, unless EPA receives relevant adverse comment by June 2, 2014. If EPA receives relevant adverse comment, [it] will publish a timely withdrawal of this direct final rule in the Federal Register informing the public that this rule will not take effect."


EPA also explains that the proposed rule and direct final rule follow from EPA having granted petitions for reconsideration of the 2013 cellulosic biofuel standard by API and AFPM. Further, EPA explains that it granted the petitions because KiOR, which was "one of the two companies that EPA expected to produce cellulosic biofuel in 2013 announced soon after EPA signed its final rule that it intended to produce substantially lower volumes of cellulosic biofuel in 2013 than it had earlier reported to EPA. Since the cellulosic biofuel standard was based on EPA's projection of cellulosic biofuel production in 2013, EPA deemed this new information to be of central relevance to the rule, warranting reconsideration. On reconsideration, EPA is directed to base the standard on the lower of 'projected' production of cellulosic fuel in 2013 or the cellulosic biofuel applicable volume set forth in the statute. Since data are available to show actual production volumes for 2013, EPA's 'projection' and final rule are based on actual cellulosic biofuel production in 2013."
 


 

On May 6, 2014, the National Research Council (NRC) released a Congressionally mandated, EPA-sponsored report finding that EPA has made "substantial improvements" to its Integrated Risk Information System (IRIS) since 2011. While the report acknowledges these improvements, it provides recommendations for further IRIS enhancements. For instance, according to the National Academies' press release on the report, "to ensure that the IRIS program provides the best assessments possible, the committee recommended that EPA develop a plan for strategically updating its methodology, systematically addressing any identified inefficiencies, and continually evaluating whether the IRIS teams have the appropriate expertise and training."


The National Academies' press release is available online. The EPA press release on the report is available online. The report is available for purchase or can be read online.
 


 

The White House Office of Management and Budget (OMB) has reportedly received the final rule on "RFS Pathways II and Technical Amendments to the RFS2 Standards" (RFS Pathways II rule) from EPA. This is the last step in the process before EPA publishes the final rule. EPA's summary of its proposed RFS Pathways II rule is available online. A copy of the 38-page proposed rule, which was published in the Federal Register on June 14, 2013, is also available online.


The Biobased and Renewable Products Advocacy Group (BRAG™) reported on and summarized the proposed RFS Pathways II rule when it was published last year. A copy of that report is available online.


EPA has stated publically that it expects to issue its final rule setting the 2014 RFS in June 2014. As that date nears, lobbying activity on both sides has intensified. For instance, on April 30, 2014, the American Petroleum Institute released a letter claiming that "ask[ing] EPA to build in an adequate margin of safety when setting the final ethanol mandates for 2014 because projections of gasoline demand often miss the mark." A copy of the letter is available online. On April 29, 2014, Representatives Tim Walz (D-MN), Rick Nolan (D-MN), and Cheri Bustos (D-IL) -- three Democratic Members of the House of Representatives from corn-producing Midwestern states -- met with senior White House officials to argue that the final 2014 RFS rule should not include the deep cuts proposed to the corn ethanol and advanced biofuel volumetric targets. A copy of Representative Walz's press release on the meeting is available online.
 

Tags: RFS, RFS2, EPA

 

On April 29, 2014, in a 6-2 ruling, the U.S. Supreme Court upheld EPA's view in EPA v. EME Homer City Generation L.P., U.S. Nos. 12-1182 and 12-1183. The opinion is available online.


The decision reverses a 2012 ruling by the U.S. Court of Appeals for the District of Columbia Circuit, holding that EPA's Cross-State Air Pollution Rule (CSAPR) exceeded EPA's authority to regulate greenhouse gas emissions under the Clean Air Act (CAA). The CSAPR -- issued under the Obama Administration and which strengthened a similar rule issued in 2005 by the Bush Administration -- requires 28 upwind states to reduce power plant emissions to help downwind states achieve national ambient air quality standards (NAAQS).


The Supreme Court held that the EPA permissibly created the CSAPR, in part considering cost effectiveness. As such, it is within EPA's authority under the CAA to include within CSAPR its "Good Neighbor" provision requiring upwind states to help downwind states meet NAAQS and imposition of federal implementation plans (FIP) "after EPA has quantified the state's interstate pollution obligation." More information on the case and the Supreme Court's holding is available online.
 


 

On April 22, 2014, the U.S. Environmental Protection Agency (EPA) signed off on a Direct Final Rule requiring petroleum refiners and importers to blend 810,185 gallons of cellulosic fuels into the fuel supply in 2013 in response to petitions for reconsideration of the Final Rule from the American Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers (AFPM). The pre-publication version of the Direct Final Rule is available online. Petitioners successfully argued that cellulosic fuel production was well below EPA's projections. Previously, EPA had mandated that the petroleum industry blend six million gallons of cellulosic fuels into the fuel supply under the Renewable Fuel Standard (RFS) for 2013. EPA granted the motion for reconsideration because one of the two companies that EPA expected to produce cellulosic biofuel in 2013 announced shortly after EPA signed the final rule that it intended to produce significantly lower volumes of cellulosic biofuel in 2013 that it had reported to EPA. The rule will be effective 60 days after it is published in the Federal Register.


 

EPA Presidential Green Chemistry Challenge Awards promote the environmental and economic benefits of developing and using novel green chemistry. These prestigious annual awards recognize chemical technologies that incorporate the principles of green chemistry into chemical design, manufacture, and use. Biobased and Renewable Products Advocacy Group (BRAG™) member Elevance Renewable Sciences was a Presidential Green Chemistry Award Winner in 2012. While applications for 2014 are due on April 30, 2014, it is not too soon to begin thinking and preparing for a 2015 submission. EPA's Office of Chemical Safety and Pollution Prevention (OCSPP) sponsors the Presidential Green Chemistry Challenge Awards in partnership with the American Chemical Society (ACS) Green Chemistry Institute® and other members of the chemical community, including industry, trade associations, academic institutions, and other government agencies.


Throughout the 18 years of the awards program, EPA has presented awards to 93 winners. Since its inception in 1996 through 2012, EPA has received 1,490 nominations. By recognizing groundbreaking scientific solutions to real-world environmental problems, the Presidential Green Chemistry Challenge has significantly reduced the hazards associated with designing, manufacturing, and using chemicals.


According to EPA, through 2013, 93 winning technologies have made billions of pounds of green chemistry progress, including:


*  826 million pounds of hazardous chemicals and solvents eliminated each year -- enough to fill almost 3,800 railroad tank cars or a train nearly 47 miles long.

*  21 billion gallons of water saved each year -- the amount used by 820,000 people annually.

*  7.8 billion pounds of carbon dioxide equivalents released to air eliminated each year -- equal to taking 810,000 automobiles off the road.


More information is available online.
 


 

EPA is vigorously questioning results of a U.S. Department of Energy (DOE)-funded study that concludes ethanol produced from crop residues such as corn stover can have higher lifecycle greenhouse gas (GHG) emissions than conventional gasoline, arguing that the findings are based on an "extremely unlikely scenario" of unsubstantiated agricultural practices. RFA is also highly critical of the new study, claiming its "methodology is fundamentally flawed and its conclusions are highly suspect." RFA made available a useful fact sheet that is available online.


The DOE-funded study was published on April 20, 2014, in Nature Climate Change. The study claims to demonstrate that ethanol produced from corn stover and other crop residues does not meet EPA's criteria for achieving a 60 percent GHG emission reduction compared to gasoline in order for the fuels to qualify under the RFS. The study could raise questions over EPA's ability to raise the cellulosic target in the final version of the 2014 RFS, especially if the fuel's GHGs disqualify them under the program.


EPA is also refuting the study as hypothetical, and lacking a firm basis in current agriculture practices. An EPA spokeswoman reportedly stated the "paper is based on a hypothetical assumption that 100 percent of corn stover in a field is harvested; an extremely unlikely scenario that is inconsistent with recommended agricultural practices." More information is available online.
 


 

On April 10, 2014, the U.S. Environmental Protection Agency (EPA) released its strategic plan through 2018. A copy of the plan is available online. It includes statements by EPA reinforcing its commitment to enhancing implementation of the Toxic Substances Control Act of 1976 (TSCA) and the federal Renewable Fuel Standard (RFS) over the next four years.


In the 99-page document, EPA reiterates its position supporting enhancing TSCA. To that end, EPA stresses that "[p]otential legislative action to reauthorize TSCA is both a key external factor and a key emerging issue. Consistent with the Administration's essential principles, EPA's authority under TSCA should be modernized and strengthened to increase confidence that chemicals used in commerce are safe and do not endanger public health and welfare."


In its strategic plan, EPA also states that it intends to continue to work to "streamline" the implementation of the federal RFS, "including the annual standard-setting process and new fuel pathway approvals." The Agency also asserts that it "will also strengthen its oversight of industry compliance with RFS standards and core fuels and fuels additive registration mandates through a voluntary third-party quality assurance program to verify that renewable identification numbers (RINs) have been validly generated. In addition, proposed modifications to the exporter provisions of the RFS program will help to ensure that an appropriate number and type of RINs are retired whenever renewable fuel is exported."
 

Tags: EPA, RFS, TSCA, RINs

 

On April 8, 2014, the U.S. Senate Committee on Environment and Public Works (EPW) held a hearing to consider the following three nominees for EPA posts: Janet McCabe, nominated for EPA Assistant Administrator for the Office of Air and Radiation (OAR); Ann Dunkin, nominated for EPA Assistant Administrator for the Office of Environmental Information; and Manny Ehrlich, nominated to be a member of the Chemical Safety Board. Consideration of the nomination of McCabe to become Assistant Administrator for OAR appeared to be the most contentious. Several Republican Members of the EPW Committee expressed their concerns with several EPA rules coming out of the OAR, including the proposed regulation of power plant emissions from new and existing plants.


A copy of EPW Committee Chair Barbara Boxer's (D-CA) opening statement, which references the experience of the three nominees, is available online.
 


 
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