National Cottonseed Products Association

Cottonseed Oil &

the Renewable Fuel Standard

RFS2 Background/HistoryRenewable Fuels Standard (RFS)

The Energy Independence & Security Act (EISA) of 2007 expanded the RFS to 36 billion gallons beginning in 2009 through 2022.

Creates minimum use requirements for the following classes of renewable fuels:

o Conventional Biofuels

o Advanced Biofuels- Cellulosic Biofuels- Biomass-Based Diesel (including biodiesel) - Undifferentiated Advanced Biofuels (including biodiesel)

Volume Undifferentiatedin billions Conventional Advanced Cellulosic Biomass-Based Advanced Total Biodiesel

Year of gallons Biofuels Biofuels Biofuels Diesel Biofuels Potential (Biodiesel) (Biodiesel) (Biodiesel)

2006 4.000 4.0002007 4.700 4.7002008 8.500 8.5002009 11.100 10.500 0.600 0.500 0.100 0.6002010 12.950 12.000 0.950 0.100 0.650 0.200 0.8502011 13.950 12.600 1.350 0.250 0.800 0.300 1.1002012 15.200 13.200 2.000 0.500 1.000 0.500 1.5002013 16.550 13.800 2.750 1.000 ≥1.000* 0.750 1.7502014 18.150 14.400 3.750 1.750 ≥1.000* 1.000 2.0002015 20.500 15.000 5.500 3.000 ≥1.000* 1.500 2.5002016 22.250 15.000 7.250 4.250 ≥1.000* 2.000 3.0002017 24.000 15.000 9.000 5.500 ≥1.000* 2.500 3.5002018 26.000 15.000 11.000 7.000 ≥1.000* 3.000 4.0002019 28.000 15.000 13.000 8.500 ≥1.000* 3.500 4.5002020 30.000 15.000 15.000 10.500 ≥1.000* 3.500 4.5002021 33.000 15.000 18.000 13.500 ≥1.000* 3.500 4.5002022 36.000 15.000 21.000 16.000 ≥1.000* 4.000 5.000

* Secretary determines minimum use allocation for "biomass-based diesel"

RFS2 Schedule

RFS2 Background Biodiesel must be from renewable biomass and have

lifecycle greenhouse gas emissions, including direct and indirect (such as land use change) emissions, at least 50% less than petroleum.

December 2007 - EISA passed

January 1, 2009 – Date it was supposed to be effective

May 2009 - EPA issued Proposed Rule

February 2010 – EPA issued Final Rule

July 1, 2010 – RFS2 program went into effect

RFS2 Background

EPA Final Rule biodiesel eligibility was confined to soybean oil and waste grease

EPA used a range and median score to accommodate uncertainty around indirect land use change

Other feedstocks required to petition EPA for eligibility and undergo a separate Life-Cycle Analysis (LCA)

Canola oil was first additional feedstock to be approved; Canola LCA was 50.5%

Palm oil still pending; initial LCA was 17%

Cottonseed Status NCPA petition submitted to EPA in November 2011 Petition, as required, includes information on:

o production, processing, and uses of cottonseed oil, meal, hulls, and linters

o supply & demand for cotton & cottonseed products

o biodiesel production from cottonseed oilo land use impacts, or lack thereof, of cottonseed

biodiesel

Cottonseed Status

Recent Action: additional data requested, comments provided on EPA assumptions; EPA modifying models

Next steps: meeting on assumptions, run models, preview results, NODA issued w/ 60 or 90 day comment period, submit comments, final rule.

Enviro Groups: Canola experience and camelina

Outlook

Timeline for completion:

June – EPA completes model runs, shares results, publishes NODA with 60 or 90 day comment period.

August/September - comment period closes

November/December – Final Rule issued