National Biodiesel Board v. Environmental Protection Agency

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 27, 2016 Decided December 20, 2016
No. 15-1072
NATIONAL BIODIESEL BOARD,
PETITIONER
v.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
On Petitions for Review of Administrative Actions of the
United States Environmental Protection Agency
Consolidated with 15-1073
_____
Bryan M. Killian argued the cause for petitioner. With him
on the briefs were David B. Salmons and Sandra P. Franco.
Perry M. Rosen, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief was
John C. Cruden, Assistant Attorney General, and Susan
Stahle, Of Counsel, U.S. Environmental Protection Agency.
Before: TATEL, BROWN, and KAVANAUGH, Circuit Judges.
2
Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: Petitioner, a trade association
representing the domestic biofuel industry, challenges the
Environmental Protection Agency’s decision to allow a group
of Argentine biofuel producers and other companies to use
certain recordkeeping practices in connection with sales of
their product in the United States. Petitioner separately
challenges the regulation, promulgated in 2010, pursuant to
which EPA granted the Argentine application. Although this
case implicates a pressing international issue—whether EPA
is meeting its responsibility to protect against harmful global
land-use changes resulting from our country’s demand for
renewable fuels—we can resolve it on familiar terrain.
Petitioner’s challenge to the 2010 regulation is untimely, and
EPA’s decision to grant the Argentine application was neither
arbitrary nor capricious, as it comports with agency
regulations and rests upon the kind of highly technical
judgments to which we owe agencies great deference.
I.
Established by Congress in 2005, the Renewable Fuel
Standard (RFS) program requires transportation fuel—the
kind used in cars and sold at gas stations—to include specific
amounts of “renewable fuel” made from planted crops, trees,
animal waste, algae, or other alternatives to traditional fossil
fuels. Energy Policy Act of 2005, Pub. L. No. 109–58,
§ 1501, 119 Stat. 594 (codified as amended at 42 U.S.C.
§ 7545(o)). In 2007, Congress amended the program both to
significantly increase use of renewable fuel and to ensure this
increase would reduce greenhouse-gas emissions and thereby
“lower the risk of climate change.” 75 Fed. Reg. 14,670,
14,799; see id. at 14,673, 14,843; Energy Independence and
Security Act of 2007, Pub. L. No. 110–140, §§ 201–204, 121
Stat. 1492 (codified as amended at 42 U.S.C. § 7545(o)).
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Specifically, recognizing that demand for renewable fuels
might spur land-use changes like deforestation, which
exacerbate greenhouse-gas emissions and wreak ecological
harm, Congress mandated that renewable fuel from planted
crops come from agricultural land already cleared or
cultivated prior to the 2007 statute’s enactment. 42 U.S.C.
§ 7545(o)(I)(i). See e.g., 75 Fed. Reg. at 14,692.
In order to accomplish this objective, Congress defined
“renewable fuel” as “fuel that is produced from renewable
biomass” and specified that “renewable biomass” means, as
relevant here, “[p]lanted crops and crop residue harvested
from agricultural land cleared or cultivated at any time prior
to December 19, 2007, that is either actively managed or
fallow, and nonforested.” 42 U.S.C. §§ 7545(o)(1)(J),
(o)(1)(I)(i).
To implement the RFS program, the statute directs EPA
to “promulgate regulations to ensure that gasoline sold or
introduced into commerce in the United States . . . contains
the applicable volume of renewable
fuel,” id. § 7545 (o)(2)(A)(i), including “compliance
provisions applicable to refineries, blenders, distributors, and
importers” of renewable fuels, id. § 7545(o)(2)(A)(iii)(I).
Pursuant to that authority, EPA took the actions challenged
here.
Renewable fuel is made from plant material, known as
feedstock, typically sent from farms to grain elevators, then to
crushers, and eventually to fuel producers, who transform it
into renewable fuel. Biofuel produced abroad and intended for
use by domestic refiners—the subject of this litigation—is
often sent from producers to importers, who then sell the
renewable fuel for incorporation into domestic transportation
fuel.
4
Under the RFS program, producers and importers of
renewable fuel generate “Renewable Identification Numbers”
(RINs)—codes that correspond to batches of fuel. See 40
C.F.R. §§ 80.1452, 80.1426. In turn, refiners and importers
acquire RINs to demonstrate that they have introduced into
the transportation-fuel supply the requisite amount of
renewable fuel. 42 U.S.C. § 7545(o)(3)(B)(ii)(I); see 40
C.F.R. § 80.1405(c); Hermes Consolidated, LLC v. EPA, 787
F.3d 568, 572 (D.C. Cir. 2015) (describing the RFS program).
In 2010, EPA promulgated a final rule that imposes
recordkeeping requirements on RIN-generating producers and
importers in order to verify that crops used in renewable fuel
production come from qualified land, i.e., land in cultivation
prior to December 19, 2007. 75 Fed. Reg. at 14,699–701; 40
C.F.R. § 80.1454. The Rule gives producers and importers
three options. 40 C.F.R. §§ 80.1454(c)(1), (g), (h).
The first, individual tracking, requires producers or
importers to keep, but not provide to EPA unless requested,
(1) “[m]aps or electronic data identifying the boundaries of
the land” where each type of feedstock was harvested, (2)
“commercial documents showing the quantity of feedstock
purchased from each area . . . and showing each transfer of
custody from the location where it was produced to the
renewable fuel production facility,” and (3) records sufficient
to verify that the feedstock came from land cleared or
cultivated prior to December 19, 2007, such as sales records.
Id. § 80.1454(c)(1).
The second option, aggregate compliance, excuses from
recordkeeping requirements “any producer or RIN-generating
importer” in a country subject to an approved aggregate
compliance plan. Id. § 80.1454(g). A country is eligible for
the aggregate compliance approach if EPA determines that its
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total amount of agricultural land is no higher than it was in
2007. See id. § 80.1457 (establishing the petition process for
the aggregate compliance approach for foreign counties).
United States domestic renewable-fuel producers are currently
exempt from recordkeeping requirements based on EPA’s
finding that total U.S. agricultural land has not exceeded its
2007 baseline. Id. § 80.1454(g). Only one foreign country—
Canada—has sought and obtained an approved aggregate
compliance regime. 76 Fed. Reg. 14,007.
A third option—the one at issue here —is the alternative
tracking requirement. 40 C.F.R. § 80.1454(h). Under this
provision, a “foreign or domestic renewable fuel producer or
RIN-generating importer” can participate in an industry-
funded program in which an “independent third party
conduct[s] a comprehensive program of annual compliance
surveys . . . to be carried out in accordance with a survey plan
which has been approved by EPA.” Id. §§ (h), (h)(1). The
independent surveyor must perform “feedstock audits of
renewable fuel production and import facilities” and “[o]btain
the records and product transfer documents associated with
the feedstocks being audited.” Id. §§ (h)(3)(i)–(ii). The
surveyor must “[c]onfirm that feedstocks used to produce
RIN-generating renewable fuels” come from qualifying land,
and “[i]mmediately notify EPA” of noncompliance. Id.
§§ (h)(3)(iv)–(vi). Overall, annual surveys must be
“representative” of the entities in the survey area and
“[d]esigned to achieve the same level of quality assurance”—
that is, the same level of confidence that renewable fuels
come from qualified land—as the individual tracking and
aggregate compliance options. Id. §§ (h)(2)(iii)–(iv).
In 2012, the Argentine Chamber of Biofuels (CARBIO),
a nonprofit association of biodiesel producers, soybean
growers, warehouses, and oil-crushing mills, submitted a
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comprehensive survey program for EPA’s approval as an
alternative tracking program. In considering the application,
EPA required CARBIO to answer many questions about its
proposal and submit additional materials in the form of seven
addenda. Some two-and-a-half years later, EPA approved the
application, finding that CARBIO’s proposal satisfied section
80.1454(h)’s requirements.
The plan works like this. Using historical satellite
images, CARBIO begins by identifying land cleared or
cultivated prior to 2007. CARBIO then classifies these lands
as either “go areas,” from which feedstock may be used, or
“no go areas.” When feedstock arrives at a crushing plant,
each shipment is inspected—using a document known as a
carta de porte, or waybill—to ensure that the zip code of
origination matches an identified go area. If ineligible land
falls within a zip code, no feedstock from that zip code may
qualify. The plan calls for the independent surveyor to visit
each producer and crushing plant at least once a year, as well
as some five percent of grain elevators and farms. Any
feedstock supplier, such as a farm or grain elevator, not
visited in a given year will submit to a desk audit of its
product-transfer documents to verify compliance with the
Rule’s qualified-land restriction.
On November 13, 2013, while EPA was considering
CARBIO’s proposal, Petitioner National Biodiesel Board
(NBB) sent a letter to EPA expressing concern about the
viability of enforcing an alternative tracking program abroad
and requesting that EPA “provide the public with notice and
comment on any proposed survey plan for foreign feedstocks
and production before EPA takes any action.” On January 27,
2015, EPA approved the CARBIO proposal and responded to
NBB, explaining that “[g]iven the significant notice and
comment process used to develop [the recordkeeping]
7
regulations,” the agency “d[id] not find it appropriate to create
additional notice and comment processes for each plan
approval as you suggested in your letter.”
NBB then filed these petitions for review. In case number
15-1073, Petitioner seeks review of the 2010 Rule that
established the alternative tracking program. 75 Fed. Reg.
14,670. In case number 15-1072, Petitioner challenges EPA’s
approval of CARBIO’s alternative tracking proposal. We
consolidated the cases and heard them together at oral
argument.
II.
EPA offers a threshold objection to the petitions for
review—that NBB lacks Article III standing. In response,
NBB asserts that it has standing on behalf of its members:
domestic producers who will suffer injury as a result of
increased competition from Argentine biodiesel.
Article III standing requires “injury in fact” that is “actual
or imminent” and “fairly . . . trace[able] to the challenged
action of the defendant” as well as “likely . . . redress[able] by
a favorable decision.” Lujan v. Defenders of Wildlife, 504
U.S. 555, 560–61 (1992) (internal citations and quotation
marks omitted). Under the doctrine of competitor standing,
economic actors “suffer constitutional injury in fact when
agencies lift regulatory restrictions on their competitors or
otherwise allow increased competition.” Louisiana Energy
and Power Authority v. FERC, 141 F.3d 364, 367 (D.C. Cir.
1998). An association, such as NBB, may represent the
interests of its members if—the issue here—“at least one of
[its] members has standing to sue in [its] . . . own right.” See
American Library Association v. FCC, 401 F.3d 489, 492
(D.C. Cir. 2005).
8
This case differs little from Delta Construction v. EPA,
783 F.3d 1291 (D.C. Cir. 2015) (per curiam), in which we
held that an importer and seller of a vegetable-based fuel
suffered constitutional injury as a result of “EPA regulations
that incentivize[d] other renewable fuels like electricity sold
by its competitors.” Id. at 1299. Here it is “self-evident” that
NBB members meet the constitutional prerequisites of injury,
causation, and redressability, as approval of the CARBIO plan
incentivizes importation of renewable fuels that will compete
with domestic production, and an order vacating that approval
would eliminate the resultant competitive harm. Id. at 1299–
1300 (quoting White Stallion Energy Center, LLC v. EPA, 748
F.3d 1222, 1256 (D.C. Cir. 2014), cert granted on other
grounds sub nom. Michigan v. EPA, 135 S. Ct. 702 (2014)).
Declarations submitted by NBB confirm that its members
“compete with imports” in the U.S. biodiesel market.
With standing established, we turn to Petitioner’s
challenges.
III.
We begin with NBB’s attack on section 80.1454(h),
which EPA promulgated in 2010. 75 Fed. Reg. 14,670. EPA
argues that the challenge is untimely.
Section 307(b)(1) of the Clean Air Act provides that a
petition for review of any nationally applicable regulations:
shall be filed within sixty days from the date notice
of such promulgation, approval, or action appears in
the Federal Register, except that if such petition is
based solely on grounds arising after such sixtieth
day, then any petition for review under this
subsection shall be filed within sixty days after such
grounds arise.
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42 U.S.C. § 7607(b)(1). NBB failed to challenge the Rule
until it initiated this action some five years after notice was
promulgated—despite exhaustively commenting during the
rulemaking process and then even intervening on behalf of
EPA in support of the Rule in a lawsuit before this circuit.
National Petrochemical and Refiners Association v. EPA, 630
F.3d 145 (D.C. Cir. 2010). NBB nonetheless maintains that,
for several reasons, its challenge to the Rule is timely.
First, NBB notes that section 307(b)(1)’s provision for
judicial review after the initial sixty days “if such petition is
based solely on grounds arising after,” 42 U.S.C.
§ 7607(b)(1), includes “the occurrence of an event that ripens
a claim.” American Road & Transportation Builders
Association v. EPA, 588 F.3d 1109, 1113 (D.C. Cir. 2009). It
follows, says NBB, that approval of the CARBIO proposal
conferred on it a newly ripened claim because until that point
it had no idea that EPA would “interpret its regulation in an
arbitrary way” that would injure its members. Petitioner’s
Br. 52.
On this point, NBB relies on our decision in Coalition for
Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 129–32
(D.C. Cir. 2012), aff’d in part, rev’d in part sub nom. Utility
Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014), in
which we held that section 307(b)(1) did not bar industry
petitioners’ challenge to a longstanding EPA program when a
new rule expanded the program “to never-regulated sources”
operated by those industries. Id. at 130. The new rule gave
petitioners “newly ripened” claims against the program
because, as we explained, prior to its expansion the prospect
that the program would injure petitioners was too speculative
to confer jurisdiction on the court. Id. at 131. Here, in stark
contrast, NBB members were subject to the Rule on day one,
which is why NBB both participated in the rulemaking
10
process and intervened in litigation challenging the Rule.
Instead of defending the Rule, NBB members could have
argued then that the Rule’s recordkeeping requirements were
insufficient to protect against the importation of nonqualified
renewable fuel. Because NBB was well positioned to
challenge the Rule on these grounds when it was first
promulgated, the CARBIO plan conferred on NBB no “newly
ripened” claim. See Sierra Club de Puerto Rico v. EPA, 815
F.3d 22, 26–28 (D.C. Cir 2016) (explaining that Coalition left
unchanged the principle that mere application of a regulation,
“without anything more,” falls short of “after-arising
grounds.”).
Coalition aside, NBB’s argument that the CARBIO plan
gives rise to a newly ripened claim because, prior to it, the
recordkeeping regulations “could potentially have been
applied by EPA in a manner that would not have injured
Petitioner or its members,” reveals the true “grounds” upon
which NBB seeks to challenge EPA: the agency’s decision to
grant the CARBIO proposal as an application of the Rule not
the Rule itself. Petitioner’s Br. 52. We consider that issue in
Part IV, infra.
NBB next argues that its challenge is timely because EPA
“reopened” the Rule when it approved the CARBIO proposal.
The reopener doctrine allows an otherwise untimely challenge
to proceed “where an agency has—either explicitly or
implicitly—undertaken to ‘reexamine its former choice.’”
National Mining Association v. Department of the Interior, 70
F.3d 1345, 1351 (D.C. Cir. 1995) (quoting Public Citizen v.
Nuclear Regulatory Commission, 901 F.2d 147, 151 (D.C.
Cir. 1990)). The CARBIO proposal is, the argument goes, a
“constructive” reopening of the Rule, which “occurs if the
revision of accompanying regulations ‘significantly alters the
stakes of judicial review’ as the result of a change that ‘could
11
have not been reasonably anticipated.’” National Resources
Defense Council v. EPA, 571 F.3d 1245, 1266 (D.C. Cir.
2009) (per curiam) (quoting Sierra Club v. EPA, 551 F.3d
1019, 1025 (D.C. Cir. 2008)). We have described the
magnitude of alteration required to invoke this doctrine as a
“sea change,” and have declined to apply it when “the basic
regulatory scheme remains unchanged.” Id. As the Rule
expressly establishes that foreign producers may seek
approval of an alternative tracking program, the CARBIO
plan neither alters that regulatory framework nor works a
change that NBB members could not have reasonably
anticipated. To the extent NBB argues that the CARBIO
proposal is out of line with the Rule, this is—yet again—a
challenge to EPA’s application of the Rule rather than to the
Rule itself.
For these reasons, NBB’s petition for review of the Rule
is untimely under section 307(b)(1) and is, accordingly,
dismissed.
IV.
We now turn to the heart of this case—whether EPA
erred when it approved the CARBIO plan. NBB challenges
EPA’s action on both procedural and substantive grounds.
With respect to procedure, NBB contends that EPA erred
when it approved the CARBIO plan via informal adjudication
without public notice and comment. As a general matter,
“agencies have ‘very broad discretion whether to proceed by
way of adjudication or rulemaking.’” Qwest Services Corp. v.
FCC, 509 F.3d 531, 536 (D.C. Cir. 2007) (quoting Time
Warner Entertainment Co. v. FCC, 240 F.3d 1126, 1141
(D.C. Cir. 2001)). Not only does the Rule do nothing to fetter
this discretion, but it expressly requires public notice and
comment for country-wide aggregative compliance
12
applications, see 40 C.F.R. §§ 80.1454(g)(1), 80.1457, while
imposing no notice and comment requirement for the
approval of alternative tracking plans like the one submitted
by CARBIO, id. § 80.1454(h).
NBB insists that EPA’s approval of the CARBIO
proposal was, in effect, a rule that required notice and
comment, not an adjudication, because the plan “provides a
new set of substantive standards for future conduct,
indefinitely applying to a large number of entities,” involves
“several policy determinations,” and leaves “key facts . . .
unresolved.” Reply 11-12. But we need not meditate on the
sometimes-fuzzy line between rulemaking and informal
adjudication because EPA’s approval of the CARBIO plan
was a straightforward instance of adjudication. Only after a
two-and-a-half-year process, during which EPA frequently
asked for new information and modifications to the proposal
and CARBIO submitted several addenda, did the agency
approve the CARBIO plan. The nature of that proceeding
“reflect[s] a highly fact-specific, case-by-case style”
characteristic of adjudication. Conference Group, LLC v.
FCC, 720 F.3d 957, 965 (D.C. Cir. 2013) (quoting AT&T v.
FCC, 454 F.3d 329, 333 (D.C. Cir. 2006)). The approval, by
its own terms, applies only to the CARBIO program; indeed,
NBB never even suggests that an entity other than CARBIO
or its producer-members could avail itself of the program
without making a separate application to EPA. That the
CARBIO plan will survey some yet-unidentified feedstock
suppliers hardly transforms the approval into a rulemaking,
lest every element of a license application need be set in stone
to escape notice and comment. Under NBB’s theory, an
agency could not by adjudication issue a permit to transport
cargo without first knowing who would drive the truck. And
as we have explained, the fact that an agency action applies to
a “large number of licensees” “carr[ies] [little] weight” in our
13
analysis. Goodman v. FCC, 182 F.3d 987, 994 (D.C. Cir.
1999).
On to NBB’s substantive objection: that approval of the
CARBIO plan was arbitrary and capricious. Our standard of
review under the Clean Air Act is the same as under the
Administrative Procedure Act, 5 U.S.C. § 706(2)(A), and we
will affirm EPA’s action “if the record shows EPA considered
all relevant factors and articulated a ‘rational connection
between the facts found and the choice made.’” Catawba
County v. EPA, 571 F.3d 20, 41 (D.C. Cir. 2009) (per curiam)
(quoting Burlington Truck Lines v. United States, 371 U.S.
156, 168 (1962)). That said, we will not hesitate to overturn
agency action as arbitrary and capricious if the agency fails to
“comply with its own regulations.” Environmentel, LLC v.
FCC, 661 F.3d 80, 85 (D.C. Cir. 2011). Critical to our
resolution of this challenge, we give an “extreme degree of
deference to EPA when it is evaluating scientific data within
its technical expertise.” Catawba, 571 F.3d at 41 (quoting
City of Waukesha v. EPA, 320 F.3d 228, 247 (D.C. Cir. 2003)
(alteration omitted)). This deference is especially appropriate
when EPA “acts under ‘unwieldy and science-driven’
statutory schemes like the Clean Air Act.” Bluewater
Network, 372 F.3d 404, 410 (D.C. Cir. 2004) (quoting
Husqvarna AB v. EPA, 254 F.3d 195, 199 (D.C. Cir. 2001)).
NBB contends that EPA’s approval of the CARBIO
proposal was arbitrary and capricious because the plan fails to
comply with the alternative tracking requirements set out in
40 C.F.R. § 80.1454(h) in three ways: (1) its omission of
importers; (2) its reliance on satellite technology, as well as
waybills for verifying the origin of feedstock; and (3) its
failure to identify, in advance, participating feedstock
producers and other entities in the supply chain. We consider
each in turn.
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A.
NBB first argues that the CARBIO plan is out of sync
with the Rule because it fails to include importers. As
designed, the CARBIO proposal tracks the fuel supply chain
from farm through biodiesel production, but not thereafter. As
NBB points out, however, section 80.1454(h) appears to
suggest, in three places, that a survey plan must include
producers and importers. 40 C.F.R. §§ 80.1454(h)(2)(ii)
(specifying that surveys must be “[c]onducted at renewable
fuel production and import facilities and their feedstock
suppliers”) (emphasis added); (h)(2)(iii) (requiring surveys to
be “[r]epresentative of all renewable fuel producers and
importers in the survey area”) (emphasis added); (h)(3)(i)
(requiring “feedstock audits of renewable fuel production and
import facilities in accordance with the survey plan”)
(emphasis added).
EPA responds that the best reading of section 80.1454(h)
is that only an alternative tracking plan sponsored by RIN-
generating importers needs to include importers, whereas the
CARBIO proposal is sponsored by RIN-generating producers.
“[W]e review an agency’s interpretation of its own
regulations with ‘substantial deference.’ ” In re Sealed Case,
237 F.3d 657, 667 (D.C. Cir. 2001) (quoting Thomas
Jefferson University v. Shalala, 512 U.S. 504, 512 (1994)).
Even without that deference, however, we can readily adopt
EPA’s interpretation given our obligation to “read . . . words
‘in their context and with a view to their place in the
overall . . . scheme.’” King v. Burwell, 135 S. Ct. 2480, 2489
(2015) (quoting FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120, 133 (2000)).
Section 80.1454(h) specifies that “[a]ny foreign or
domestic renewable fuel producer or RIN–generating
importer” may adopt an alternative tracking requirement.
15
(emphasis added). Elaborating, section 80.1454(h)(1) states
that “a renewable fuel producer or importer” must sponsor an
independent survey plan in order to comply. (emphasis
added). The Rule thus provides that either RIN-generating
producers or RIN-generating importers may sponsor an
alternative tracking plan, and, by implication, without
participation from the other. Given that the purpose behind
these recordkeeping provisions is to ensure that entities
generating RINs can produce the records needed to verify that
renewable fuel comes from qualified land, we agree with EPA
that little additional value would flow from requiring a
producer, once it has generated the RIN and possesses those
records, to continue monitoring its product downstream. By
contrast, if an importer is the RIN-generating entity, then
biofuel producers are upstream, and an importer can only
possess the necessary documentation if it has tracked the
product from the farm to its doors. This second scenario is,
EPA explains, why the three provisions cited by NBB
inelegantly refer to producers and importers. Respondent’s
Br. 50–51.
Additional textual clues favor EPA’s view. For one thing,
as EPA points out, the alternative tracking program is open to
any “foreign or domestic renewable fuel producer.” 40 C.F.R.
§ 80.1454(h) (emphasis added). At the moment, domestic
producers are subject to the aggregate compliance regime,
based on EPA’s determination that the total amount of
agricultural land in the United States is no higher than it was
in 2007. Id. § 80.1454(g). Were the United States to exceed
that 2007 baseline and become ineligible for the aggregate
compliance regime, then domestic producers could avail
themselves of alternative tracking. Under that scenario, it
would make no sense to interpret the regulations as requiring
a program sponsored by domestic producers to include
16
“importers”—domestic fuel, unlike domestic beer, is never
imported.
Second, the alternative tracking approach must “achieve
at least the same level of quality assurance” as individual
tracking. Id. § 80.1454(h)(2)(iv). Because individual tracking
regulations do not require producers to track what importers
do with renewable fuel, EPA notes, it would be logical to
interpret alternative tracking in the same way. See id.
§ 80.1454(c)(1).
Third, as EPA observes, the regulation’s preamble
includes not a single reference to importers. According to
EPA, this demonstrates that it “envisioned [alternative
tracking] survey plans from renewable biomass producers
need not reach the actions of importers in the context of the
alternative tracking program.” Respondent’s Br. 51; see 75
Fed. Reg. at 14,700.
Fourth, reading the regulation in EPA’s preferred manner
creates no gap in the regulatory scheme. Approval of an
alternative tracking plan only allows participating entities to
avail themselves of section 80.1454(h)’s recordkeeping
provisions. Non-participating entities, like RIN-generating
importers, remain subject to section 80.1454(c)(1)’s
individual tracking requirements, as well as to other
regulatory provisions that stand independent of the
recordkeeping measures in section 80.1454. See, e.g., 40
C.F.R. § 80.1451(d) (directing producers and RIN-generating
importers to submit quarterly reports that include “electronic
data identifying the land . . . from which each type of
feedstock . . . was harvested.”).
17
Taken together, these features of the regulation
demonstrate that the CARBIO plan’s omission of importers is
consistent with the best reading of the Rule.
B.
NBB’s second argument rests on the Rule’s requirement
that an alternative tracking plan must be “[d]esigned to
achieve the same level of quality assurance” as the individual
tracking and aggregate compliance options.
Id. § 80.1454(h)(2)(iv). According to NBB, several features
of the CARBIO plan make it less likely than these other
recordkeeping regimes to ensure that feedstock comes from
qualified land.
One such feature is the plan’s use of satellite technology
to identify land cleared or cultivated prior to 2007, a
methodology NBB calls too “untested” and ill-defined to
provide the requisite level of quality assurance. For several
reasons, this claim fails on the launch pad.
For one thing, under the regulation, the CARBIO plan
must provide “the same level of quality assurance” as the
individual and aggregate compliance approaches. Id.
§ 80.1454(h)(2)(iv). Because the regulation establishing the
petition process for aggregate compliance plans expressly
contemplates the use of “[s]atellite imagery or data” to
evaluate when land was cleared or cultivated, how could the
CARBIO plan possibly fall short for doing precisely the same
thing? See id. §§ 80.1457(b)(3)(i), (b)(4)(i).
In any event, we can hardly imagine a more appropriate
occasion to defer to EPA’s expert judgment than its
assessment of whether a particular satellite methodology can
accurately measure environmental change. Indeed, Petitioner
18
has identified no basis in the record to upset the agency’s
conclusion as to CARBIO’s use of satellite technology.
The CARBIO proposal includes 23 pages explaining its
methodology. Relying predominantly on images collected by
NASA’s Landsat program, the plan takes electromagnetic
data gathered by sensors on Landsat satellites and then
employs algorithms to transform that data into categories of
land use. EPA is well-positioned to evaluate the proposal’s
technical feasibility, as the agency itself uses satellite data to
measure international land-use changes as part of its analysis
of lifecycle greenhouse-gas emissions in the Renewable Fuel
Standard program. See EPA, Renewable Fuel Standard
Program Regulatory Impact Analysis, 317 (2010). Moreover,
the Landsat program is, since the launch of its first satellite in
1972, “the longest continuous space-based record of Earth’s
land in existence.” NASA, About Landsat,
http://landsat.gsfc.nasa.gov/?page_id=2. Today, the program
produces images capable of spotting “[w]hen a new road
appears in the dense forests of Peru[] or a baseball diamond-
sized patch of forest is felled in the Republic of Congo.”
NASA, Staying Alert: How a New Landsat-Based Tool Spots
Deforestation, http://landsat.gsfc.nasa.gov/?p=12335.
Researchers have used Landsat data to view and characterize
subtle vegetation changes in the Alaskan tundra. Junchang Ju
and Jeffrey G. Masek, The Vegetation Greenness Trend in
Canada and US Alaska from 1984-2012 Landsat Data, 176
Remote Sensing of Environment 1 (2016). These do not strike
us as markers of an unproven or untrustworthy technology.
NBB believes that the land categories adopted in the plan
will result in the misclassification of native forests as
qualified land. But the proposal classifies native forests as
“other vegetation” and specifies that “go areas” will exclude
that category. Without context, NBB’s passing reference to
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the plan’s treatment of wetlands provides an insufficient basis
to set the agency’s action aside. Petitioner’s Br. 42–43. The
plan requires CARBIO—not the independent surveyor—to
identify go areas. Yet nothing in the Rule precludes such an
arrangement and, for good measure, the proposal specifies
that a third party will verify its maps on an annual basis.
NBB separately contends that the plan’s reliance on
satellite imagery to verify historical land use runs afoul of the
Rule’s requirement that the independent surveyor “[o]btain
the records and product transfer documents associated with
the feedstocks being audited.” 40 C.F.R. § 80.1454(h)(3)(ii)
(emphasis added). This is so, it maintains, because these
images cannot constitute “records” within the meaning of that
provision. NBB gives us no basis—nor can we divine one—
for concluding that the expansive term “record” excludes
historical satellite images.
NBB also takes issue with the plan’s use of waybills.
Under the plan, waybills are inspected to ensure feedstock
was sent from a zip code that matches an identified go area. If
ineligible land falls within a zip code, no feedstock from that
zip code may qualify.
NBB thinks this system is inadequate because waybills
display only whether feedstock was shipped from a qualifying
zip code, so shipments made from qualifying land could
contain unqualified feedstock. In other words, NBB fears that
qualified land might launder unqualified feedstock. But any
concern about feedstock laundering is equally present under
the individual tracking regime and, as noted above,
CARBIO’s proposal need achieve only the “same level of
quality assurance” as individual tracking. Id.§ 80.1454(h)(2)(iv) (emphasis added); see also id.
§ 80.1454(c)(1)(i)(B) (relying on transfer documents from
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qualified land to show the quantity of feedstock purchased
from each area and to verify the chain of custody for said
feedstock). Moreover, the CARBIO proposal, like other
alternative tracking programs, includes independent audits to
verify compliance by feedstock suppliers, as opposed to the
passive recordkeeping requirements of individual tracking.
In a related argument, NBB contends that the CARBIO
plan fails to explain how it will prevent mixing of qualified
and unqualified feedstock. Again, however, NBB never
explains how the CARBIO plan is any more deficient in this
respect than the individual tracking regime—the relevant
question. Moreover, the CARBIO plan provides, with no
direct analogue under the individual tracking provision, for
use of a “mass balance” approach, which ensures that RINs
are only generated in proportion to the quantity of qualified
biomass. Additional regulatory requirements—independent of
the recordkeeping provisions at issue—impose a
responsibility to segregate qualified renewable fuel from
nonqualified renewable fuel. See, e.g., 40 C.F.R.
§§ 80.1466(d)(vi)(B), (j)(1).
Having been given no basis to disturb EPA’s conclusion
that the CARBIO plan is “[d]esigned to achieve the same
level of quality assurance” as the individual tracking and
aggregate compliance regimes, we move on to NBB’s final
challenge.
C.
Under section 80.1454(h)(2)(iii), “annual compliance
surveys . . . must be . . . [r]epresentative of all renewable fuel
producers and importers in the survey area and representative
of their feedstock suppliers.” Elaborating, the Rule states that
the “survey program must include a statistically supportable
methodology.” 75 Fed. Reg. at 14,670. Because the CARBIO
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proposal does not identify the survey area and all of the
feedstock suppliers in advance, NBB argues, EPA failed to
“rationally” assess whether the CARBIO program will use a
sampling methodology that is “representative” of the
feedstock suppliers. Petitioner’s Br. 35–38.
This challenge misses the regulation’s distinction
between survey plans and surveys. See, e.g., 40 C.F.R.
§ 80.1454(h)(1) (stating that “an independent third party
conduct[s] a comprehensive program of annual compliance
surveys, to be carried out in accordance with a survey plan
which has been approved by EPA”). The regulation mandates
representative surveys. Only in the report issued to EPA after
a survey is complete must the independent surveyor identify
“the covered area surveyed.” Id. § 80.1454(h)(3)(vii)(D). A
survey plan, by contrast, must include “the parties for whom
the survey is to be conducted,” as well as a “methodology” for
conducting audits. Id. § 80.1454(h)(4). But the regulation
nowhere mandates that survey plans identify feedstock
suppliers or survey areas.
NBB’s theory—that EPA may not approve an alternative
tracking program without knowing the full population of
feedstock suppliers in advance—scrambles the sequence
envisioned in the regulation. Moreover, it is unclear why EPA
must know the precise universe of feedstock suppliers in the
survey in order to determine, in advance, whether a
methodology for conducting those surveys is acceptable.
NBB separately questions whether CARBIO’s plan to use
a “random sampling methodology with probability
proportional to size (PPS) of feedstock amounts supplied for
biodiesel production” is a proper statistical methodology.
Given our highly deferential standard of review, however, we
are more likely to brew renewable fuel ourselves than second-
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guess the EPA’s determination on this highly technical point
based on a fleeting attack by the challenger.
V.
For the foregoing reasons, we dismiss the petition in case
number 15-1073 and deny the petition in case number 15-
1072.
So ordered.