EPA rule allows timely release of cellulosic waiver credit prices

By Erin Voegele | March 26, 2015

The U.S. EPA has introduced rulemaking that aims to clarify the data sources and methodology used to calculate the price of cellulosic waiver credits (CWC). The rule would also amend regulations to allow CWC prices to be announced in a more timely manner and reinserts language in the renewable fuels program regulations that was inadvertently overwritten by the Quality Assurance Program final rule.

 Within the rulemaking, the EPA explains that price of CWCs are determined using a formula specified in the Clean Air Act. The price is set at the greater of 25 cents or $3 minus the wholesale price of gasoline. Both figures are adjusted for inflation. In the rule, the EPA clarifies it will adjust for inflation by comparing the Consumer Price Index from June of the year preceding the compliance period to the Consumer Price Index from January 2009. The EPA also indicated in this calculation, it will use the “Consumer Price Index for All Urban Consumers (CPI-U): U.S. City Average, Unadjusted Index for All Items” expenditure category, as provided by the Bureau of Labor and Statistics.

While the EPA has, in previous years, established the CWC price by rulemaking and published the resulting prices in the Code of Federal Regulations, the agency said that process has resulted in a delay of CWC prices for 2104 and 2015. Moving forward, EPA will announce the CWC prices on its website.

According to the EPA, it plans to set the 2014 CWC price at 49 cents, with the 2015 CWC price set at 64 cents. The 2013 CWC price was 42 cents. The prices will be officially published on the EPA website once the rulemaking becomes effective.

Finally, the rule fixes an inadvertent error in the renewable fuel standard (RFS) regulation introduced during a previous rulemaking. According to the EPA, the Quality Assurance Program final rule inadvertently overwrote a section of RFS regulation pertaining to renewable fuel produced from giant reed and napier grass. The new rulemaking reinserts the overwritten text and renumbers several existing sections of regulations to align them with regulatory references elsewhere.

As part of the rulemaking process, the EPA has published both a direct final rule and a parallel proposed rule. The direct final rule will become effective 60 days after the day it is published in the Federal Register, unless the EPA receives relevant adverse comment within 30 days following publication of the rule in the Federal Register. If the EPA does receive relevant adverse comment, the agency said it will publish a withdrawal of the relevant portions of the direct final rule in the Federal Register. In the event a portion of the direct final rule is withdrawn, the EPA will proceed with the rulemaking via the parallel proposed rule. Members of the public can request a public hearing on the proposed rule within 15 days of its publication in the Federal Register. If a public hearing is held, written comments must be received within 30 days of the hearing. If no public hearing is held, comments are due within 30 days of publication in the Federal Register.

Additional information on the cellulosic biofuel standard and CWC is available in a guidance document posted to the EPA website.