The Department of Energy has finalized the removal of its regulations governing production incentives for cellulosic biofuels, striking 10 CFR part 452 from the Code of Federal Regulations in its entirety.
The final rule was published in the Federal Register on Tuesday, Sept. 1, 2026, and takes effect Oct. 1, 2026. It carries docket number EERE-2025-OT-0031 and regulation identifier number 1904-AG07.
A program that never operated
The Cellulosic Biofuels Production Incentive program was established under section 942 of the Energy Policy Act of 2005 (Pub. L. 109-58), codified at 42 U.S.C. 16251. According to the department, Congress has not appropriated funds to DOE to implement the program, and the program is therefore unused.
The rescinded regulations included requirements for awarding production incentives to the lowest bidder in a reverse auction, according to the rule’s discussion of its environmental review.
DOE said the incentive landscape has changed since the program’s inception, citing the Renewable Fuel Standard program administered by the Environmental Protection Agency, which the department described as having become the primary federal mechanism to incentivize renewable fuel production, including cellulosic biofuels, through Renewable Identification Numbers.
The department characterized the action as removing regulations that are “outdated and no longer fits within DOE’s current strategic priorities or the prevailing energy policy framework,” and said the rescission also reduces administrative burden by eliminating an inactive regulatory framework.
One comment, on environmental review
DOE proposed the rescission on May 16, 2025 (90 FR 20942), and received a single comment, from an individual identified in the rule as “T P.”
The commenter argued the rulemaking is subject to the National Environmental Policy Act and that the action involves extraordinary circumstances, including “potential for uncertain environmental risks, potential impacts on sensitive resources, and potential for cumulative impacts,” which the commenter said would preclude reliance on a categorical exclusion. The commenter concluded that DOE must complete an environmental assessment or environmental impact statement before finalizing the rule.
DOE rejected that position. The department said removing the reverse-auction bidding requirements is “strictly procedural” and falls under 10 CFR part 1021, appendix A, paragraph A6 — a category DOE revised in an interim final rule published July 3, 2025 (90 FR 29676) to cover administrative and routine actions that do not require NEPA review. The department said the action is not a major federal action significantly affecting the quality of the human environment, and that rescinding an inactive program with no ongoing direct or indirect environmental impacts does not warrant an EA or EIS.
Regulatory classifications
The Office of Information and Regulatory Affairs determined the action is a “significant regulatory action” under section 3(f) of Executive Order 12866, and the rule was subject to OIRA review. DOE also designated it an “E.O. 14192 deregulatory action,” stating that the benefits are “difficult to quantify, although DOE believes them to be positive.”
The department certified that the rule will not have a significant economic impact on a substantial number of small entities, imposes no new information collection requirements under the Paperwork Reduction Act, and is not expected to require expenditures of $100 million or more in any one year by governments or the private sector. DOE said it will report to Congress that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).
Although the rule is a significant regulatory action under E.O. 12866, DOE said it would not have a significant adverse effect on the supply, distribution or use of energy and did not prepare a Statement of Energy Effects.
The rule was issued by the Office of Critical Minerals and Energy Innovation, identified in the document as the former Office of Energy Efficiency and Renewable Energy. It was signed July 15, 2026, by Audrey Robertson, Assistant Secretary of Energy (EERE), and submitted for publication on Aug. 28, 2026, by Federal Register Liaison Officer Treena V. Garrett.
Source: U.S. Department of Energy, Office of Critical Minerals and Energy Innovation, “Rescission of Production Incentives for Cellulosic Biofuels” (10 CFR Part 452; Docket No. EERE-2025-OT-0031; RIN 1904-AG07; FR Doc. 2026-17872), published in the Federal Register, Vol. 91, No. 168, pages 56001-56004, on Sept. 1, 2026. DOE states the rule is effective Oct. 1, 2026, and that its cost and benefit effects are “difficult to quantify.”