Environmental Protection Agency: Renewable Fuel Standard (RFS) Program: Annual RFS Rules

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B-334444

July 11, 2022

The Honorable Thomas R. Carper
President
The Honorable Shelley Moore Capito
Ranking Member
Environment and Public Works Committee
United States Senate

The Honorable Frank Pallone, Jr.
President
The Honorable Cathy McMorris Rodgers
Republican Leader
Energy and Commerce Commission
House of Representatives

Matter: Environmental Protection Agency: Renewable Fuel Standard (RFS) Program: Annual RFS Rules

Pursuant to Section 801(a)(2)(A) of Title 5 of the United States Code, here is our report on an important rule promulgated by the Environmental Protection Agency (EPA) titled “Renewable Fuel Standard (RFS) Program: RFS Annual Rules” (RIN: 2060-AV11). We received the rule on June 6, 2022. It was published in the Federal Register as final rule July 1, 2022. 87 Fed. Reg. 39600. The effective date is August 30, 2022.

According to the EPA, the final rule modifies the EPA’s statutory volume targets for 2021 and 2022 in accordance with the Clean Air Act (CAA), 42 USC §§ 7401 and following., for cellulosic biofuel, advanced biofuel and total renewable fuel. The EPA says the final rule also establishes the 2022 volume target for biomass-based diesel and changes previously established cellulosic biofuel, advanced biofuel, and total renewable fuel volume requirements for 2020. Additionally, the EPA says the final rule establishes the 2020, 2021 and 2022 Percent Renewable Fuel Standards for all of the aforementioned biofuel categories. Finally, according to the EPA, the final rule involves a judicial referral of EPA’s 2016 prescriptive regulations, as well as several regulatory changes to EPA’s RFS program, including regulations on the use of biointermediates for produce eligible renewable fuel, flexibilities for regulated parties, and clarifications of existing regulations.

Attached is our assessment of EPA’s compliance with the procedural steps required by Title 5 Section 801(a)(1)(B)(i) through (iv) with respect to the rule. If you have any questions about this report or would like to contact GAO officials responsible for valuation work relating to the subject matter of the rule, please contact Shari Brewster, Assistant General Counsel, at (202) 512-6398.

Shirley A.Jones
Associate Legal Director

PREGNANT

REPORT UNDER 5 USC § 801(a)(2)(A) ON A MAJOR RULE
ISSUED BY THE
ENVIRONMENTAL PROTECTION AGENCY
ENTITLED
“RENEWABLE FUELS STANDARDS (RFS) PROGRAM: RFS ANNUAL RULES”
(RIN: 2060-AV11)

(i) Cost-benefit analysis

The Environmental Protection Agency (EPA) conducted an economic analysis of this final rule. EPA’s analysis included an assessment of potential quantified and unquantified impacts associated with the fuel volumes specified in the final rule. Specific impacts that the EPA considered in its economic analysis included: (1) air quality impacts of biofuel production and use; (2) climate change impacts of biofuel feedstock production and petroleum fuel substitution; (3) impacts on wetlands, ecosystems and wildlife habitat of land use change; (4) impacts on soil and water quality of biofuel feedstock production; (5) impacts on the quantity and availability of water from the production of biofuels and feedstocks; (6) energy security (monetized effect estimated at $294 million); (7) production and use of renewable fuels; (8) infrastructure; (9) jobs; (10) rural economic development; (11) impacts on commodity supply and prices; and (12) overhead (estimated $7 billion monetized effect of fuel cost increases).

(ii) Agency Actions Regarding the Regulatory Flexibility Act (RFA), 5 USC §§ 603–605, 607, and 609

The EPA has certified that this final rule will not have a significant economic impact on a significant number of small entities within the FRG. The EPA says it made this decision because the rule will not change compliance flexibilities currently available to small entities under the RFS program and because available information shows that the impact on small entities of the Implementation of this rule will not be significant from either the perspective of being a standalone action or part of the overall RFS program.

(iii) Agency Actions Regarding Sections 202-205 of the Unfunded Warrants Reform Act of 1995, 2 USC §§ 1532-1535

The EPA has determined that this final rule does not contain an unfunded mandate of $100 million or more and does not significantly or uniquely affect small governments. The EPA said the final rule implements the mandates specifically and explicitly set forth in Section 211(o) of the Clean Air Act (CAA), 42 USC §§ 7401 and following. Finally, the EPA has stated that it is satisfied that the final rule represents the least costly and most cost-effective approach to satisfying the relevant legal requirements.

(iv) Other relevant information or requirements under laws and decrees

Administrative Procedure Act, 5 USC §§ 551 and following.

On December 21, 2021, the EPA released a proposed rule. 86 Fed. Reg. 72436. EPA responded to comments in final rule. The EPA also said that more detailed responses to comments are in a separate Response to Comments document available on file for this rule.

Red Tape Reduction Act (PRA), 44 USC §§ 3501–3520

The EPA has determined that this Final Rule contains information gathering requirements under the law. The EPA said it had submitted these information-gathering activities to the Office of Management and Budget (OMB) for approval and that the document received Information-Gathering Request Number 2691.02 from EPA (ICR). The EPA said that once the ICR is approved, it will issue an amendment to the relevant part of the Code of Federal Regulations to display the OMB control number. The EPA estimated a total annual charge of 167,385 hours and $9,262,146 associated with ICR number 2691.02.

Legal authorization of the rule

The EPA has promulgated this final rule pursuant to Sections 7414, 7521, 7522–7525, 7541, 7542, 7543, 7545, 7547, 7550, and 7601 of Title 42, United States Code.

Executive Order No. 12866 (Planning and Regulatory Review)

The EPA has determined that this final rule is economically significant under the order and has submitted it to the OMB for review.

Executive Order No. 13132 (Federalism)

The EPA has determined that this final rule has no federalism implications and will not have substantial direct effects on states, national government-state relations, or the distribution of powers. and responsibilities between different levels of government.

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