National Cottonseed Products Association Cottonseed Oil & the Renewable Fuel Standard

RFS2 Background/History Renewable Fuels Standard (RFS)  The Energy Independence & Security Act (EISA) of 2007 expanded the RFS to 36 billion gallons beginning in 2009 through  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)

VolumeUndifferentiated in billionsConventionalAdvancedCellulosicBiomass-BasedAdvancedTotal Biodiesel Yearof gallonsBiofuels DieselBiofuelsPotential (Biodiesel) ≥1.000* ≥1.000* ≥1.000* ≥1.000* ≥1.000* ≥1.000* ≥1.000* ≥1.000* ≥1.000* ≥1.000* * 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 EISA passed January 1, 2009 – Date it was supposed to be effective May 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 oil o 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