What, Where, How? Some Answers to EPA's Renewable Fuel Standard

The final rulemaking for the Renewable Fuel Standard (RFS2) was signed by the Environmental Protection Agency (EPA) administrator on February 3, 2010 (see “Biofuels Bulletin” in the April 2010 issue of Render). There has been a lot of confusion about the new standard, including how it will affect rendered products.

To assist regulated parties, the EPA has collected questions pertaining to a variety of implementation issues and generated responses to those questions. A list of frequently asked questions prepared by the agency’s Office of Transportation and Air Quality has been posted at www.epa.gov/otaq/fuels/renewablefuels/compliancehelp/rfs2-aq.htm and will continue to be updated periodically as new questions arise.

To help the rendering industry in understanding what renewable fuel producers will require of them and how these producers generate renewable identification numbers (RINs), below are some questions and answers posted on EPA’s Web site that pertain to rendered products used in renewable fuels produced to meet the standard.

Q. What are the recordkeeping requirements for a renewable fuel producer that uses used cooking oils and fats as feedstocks for renewable fuel?

A. Renewable fuel producers using used cooking oils or animal wastes as feedstocks are required under 40 Code of Federal Regulations (CFR) 80.1454(d)(3) to obtain from their feedstock supplier, and maintain in their records, documents that certify that the feedstock meets the definition of renewable biomass, describe the feedstock, and identify the process that was used to generate the feedstock.

For example, a renewable fuel producer could maintain as a record a contract with a feedstock supplier that states that the supplier will provide the producer with a certain volume of chicken fat that meets the definition of renewable biomass because it is an animal waste or by-product, and that it was produced as a by-product of the chicken rendering process.

Q. The preamble states that “fuel from the existing capacity of current facilities and the capacity of all new facilities that commenced construction prior to December 19, 2007, (and in some cases prior to December 31, 2009) are exempt, or grandfathered, from the 20 percent life cycle requirement for the renewable fuel category.” Does this mean that a biodiesel plant built prior to December 19, 2007, could use palm oil, or any other feedstock, to generate RINs applicable to the renewable fuel category, but not applicable to the biomass-based diesel category?

A. Renewable fuel produced at grandfathered facilities (as defined in CFR 80.1403(d)) is only exempt from the 20 percent greenhouse gas (GHG) reduction requirement. Biodiesel producers who wish to generate biomass-based diesel RINs for biodiesel starting July 1, 2010, must meet a 50 percent GHG reduction requirement regardless of when commencement of construction occurred. Plants that are exempted only qualify for a D code of 6 per CFR 80.1426(f)(6)(ii).

Q. If a facility is grandfathered, is it also exempt from the requirement that feedstocks must be renewable biomass?

A. Even if a facility is exempt from the 20 percent GHG reduction requirement, in order to generate RINs, the facility is still required to use feedstocks that meet the definition of renewable biomass. The definition of renewable fuel in CFR 80.1401 specifies that renewable fuel be made from renewable biomass, which is also defined in that section.

The following questions and answers pertain to those renderers who are also biodiesel producers.

Q. What is the due date for the initial engineering review and the subsequent updated engineering reviews? Is there a deadline for EPA to approve the engineering review after it has been accepted?

A. The initial engineering review must be submitted and accepted by EPA as part of a renewable fuel producer’s initial registration by July 1, 2010, or 60 days prior to the generation of RINs, whichever date comes later.

Every three calendar years from the initial date of registration, an updated engineering review must be submitted to and accepted by EPA. In addition, if a renewable fuel producer makes changes to their facility that will qualify their renewable fuel for a renewable fuel category or D code that is not reflected in their registration information submitted to EPA, then pursuant to CFR 80.1450(d)(1), an updated engineering review must be submitted to EPA at least 60 days prior to producing a new type of renewable fuel.

There is no deadline for EPA to approve an engineering review after it has been accepted. EPA will provide approval when staff deems the engineering review to be complete and to have met all the requirements stipulated in CFR 80.1450.

Q. What types of engineers are qualified to conduct the third party engineering review of a domestic renewable fuel production facility, as required in CFR 80.1450(b)(2)?

A. The final regulations in CFR 80.1450(b)(2)(i)(A) state that domestic renewable fuel production facilities must have an engineering review conducted by a “professional chemical engineer.” For foreign facilities, CFR 80.1450(b)(2)(i)(B) provides that the review should be conducted by “a licensed professional engineer or foreign equivalent who works in the chemical engineering field.” EPA interprets these provisions similarly. For both domestic and foreign facilities the third party engineering review should be conducted by a professional engineer (or foreign equivalent) who works in the chemical engineering field.

EPA views renewable fuel production to fall generally within the chemical engineering field, so that professional engineers with experience engineering such facilities would qualify to conduct the third party engineering reviews. As required in CFR 80.1450(b)(2)(ii)(E), the engineer must provide to EPA documentation of his or her qualifications to conduct the engineering review, including but not limited to proof of a license as a professional engineer and relevant work experience.

Q. Is it required that the professional engineer conducting the engineering review must be licensed in the state in which the renewable fuel facility is located?

A. The licensed professional engineer should comply with the state laws where the renewable fuel facility is located to determine whether or not their license allows them to conduct business in that state.

Q. Pursuant to CFR 80.1450(b), the licensed professional conducting the engineering review is required to be free of any interest in the renewable fuel producer’s business. What are the guidelines to determine what qualifies and does not qualify as a conflict of interest?

A. Engineers conducting the engineering review required in CFR 80.1450(b) must be free of “any interest” in the fuel producer’s business. Examples of the types of interest that would disqualify an engineer from conducting reviews would be ownership of stock in the company, being an employee or director of the company, having an arrangement or negotiating for future employment with the company, or having a substantial professional interest in the outcome of the review that could result, for example, from having been involved in the design of the facility or the design of a significant and relatively unique component of the facility. The regulations also require that the fuel producer be free of any interest in the engineer’s business.

Generation of RINs
Q. If I produce biodiesel using waste vegetable oil, can I generate more RINs per gallon than if I use virgin soy oil? Would the use of solar panels as a heat source for our process help with our RIN number per gallon?

A. The number of RINs that can be generated for each gallon of renewable fuel is determined by the equivalence values (see CFR 80.1415(b) and 80.1426(f)(2)(i) for examples). Equivalence values are based on energy content in the renewable fuel, adjusted for renewable content in comparison to denatured ethanol. Equivalence values are not a function of the type of feedstock used to produce the renewable fuel, nor any elements of the fuel production process.

The following questions were asked of and answered by the National Biodiesel Board (NBB).

Q. Regarding tallow (and animal fats in general), wanted to make sure that these feedstocks qualify on the table on page 25 of the RFS2 regulation that lists “biogenic waste oils/gats/greases,” that these qualify for advanced category RINs D=5.

A. Based on our understanding of tallow (i.e., that it is made from an animal by-product/waste tissue), it should be covered as biomass-based diesel.

Renewable biomass is defined to include animal waste material and animal by-products, which EPA has indicated includes tallow (see Response to Comments [RTC] 3-81).

For pathways for biomass-based diesel, EPA includes “biogenic waste oils/fats/greases.” EPA considered rendered fats in the regulatory impact analysis (RIA) as having no land use impacts similar to waste oils (page 311). EPA’s proposed rule had referred to tallow and chicken fat. In response to comments that animal fats should be included as biomass-based diesel, EPA states, “We agree and have included animal fats as meeting the life cycle threshold of 50 percent for biomass-based diesel,” and “We have continued to assume that animal fats and waste greases will meet the lifecycle threshold for biomass-based diesel for the final rule” (RTC 7-384 and 7-385).

In the preamble to the final rule, EPA states as follows (page 267-268): “The look-up table identifies a number of individual fuel ‘pathways’ that allow for the use of waste feedstocks. These feedstocks include: (1) waste ethanol from beverage production; (2) waste starches from food production and agricultural residues; (3) waste oils/fats/greases; (4) waste sugar from food and beverage production; and (5) food and beverage production wastes. For the purpose of this rule only, EPA will consider these feedstocks to be ‘wastes’ if they are used as feedstock to produce fuel, but would otherwise normally be discarded or used for another secondary purpose because they are no longer suitable for their original intended use. They may be unsuitable for their original intended use either because they are themselves waste from that original use (e.g., table scraps) or because of contamination, spoilage, or other unintentional acts. EPA will not consider any material that has been intentionally rendered unsuitable for its original use to be a waste.”

EPA’s RIA states: “For waste oils, we note that no land use changes are included in the FASOM [Forest and Agricultural Sector Optimization Model] assessment because any land use impacts are attributed to the original purpose of the feedstock (e.g., the use of the vegetable oil for cooking or the production of animals for their meat), rather than the biofuel produced from the recovered waste material” (page 311). NBB reads this to mean that because the animal is being used for meat and the by-products/wastes go to producing tallow, tallow would qualify as biomass-based diesel.

Q. Where does waste vegetable oil fall under the RFS2?

A. This falls under the biogenic waste oils/greases as well.

Q. If you intend to prove a fuel pathway, what will it take to get a D code of 4?

A. You must prove that your feedstock meets the GHG profile for that category.

Q. What D codes are available for biodiesel production?

A. If you are producing biodiesel from a qualified renewable biomass identified in Table 80.1426, then your RIN will qualify for biomass-based diesel, advanced biofuel, and total renewable fuel. A biodiesel producer will generate RINs with a D code of 4 and obligated parties will determine how to apply those RINs in the above three categories.

June 2010 RENDER | back