Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule
Most Recent Action
On July 1, 2011, the EPA issued its Final Deferral for CO2 emissions from Bioenergy and Other Biogenic Sources under the Prevention of Significant Deterioration (PSD) and Title V. This final rule defers, for a period of three years, greenhouse gas (GHG) permitting requirements for carbon dioxide (CO2) emissions from biomass-fired and other biogenic sources.
The EPA held listening sessions in February and early March on updating the CAA's pollution standards to reduce greenhouse gas (GHG) pollution from fossil fuel power plants and petroleum refineries. Comments on the standards were due by March 18, 2011.
Wisconsin is working on incorporating the federal tailoring rules.
Background
The Clean Air Act (CAA) defines EPA’s responsibilities for protecting the nation’s air quality and ozone layer. The last major change to the CAA was in 1990.
In April 2007, the U.S. Supreme Court ruled that greenhouse gases (GHG), including carbon dioxide, are potentially air pollutants covered by the CAA. (Massachusetts v. EPA, 549 U.S. 497 (2007)). The court further ruled that the EPA was required to determine whether emissions of GHGs from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare. The EPA subsequently made such findings, which was a prerequisite to finalizing GHG standards for light-duty vehicles.
In March 2010, the EPA Administrator signed a notice conveying the agency’s decision to regulate light duty vehicles. This in turn triggered CAA permitting requirements for stationary sources. For the first time, GHG will become subject to “actual control” requirements thus making GHG subject to regulation under the CAA for the first time.
On May 13, 2010, the EPA issued its final rule establishing its approach to regulating GHG emissions from stationary sources under the CAA permitting programs. The final rule sets GHG emissions thresholds that define when permits under the New Source Review Prevention Significant Deterioration (PSD) and Title V Operating Permit programs are required for new and existing industrial facilities. The new rules “tailor” the requirements of these CAA permitting programs to initially limit which facilities will be required to obtain PSD and title V permits. The rule establishes a schedule that will initially focus on the largest sources of GHG emissions, and then expand to other sources.
Under current law, CAA permitting program emissions thresholds for criteria pollutants such as lead, sulfur dioxide and nitrogen dioxide, are 100 and 250 tons per year (tpy). Because GHG emissions are emitted at a much higher volume than these criteria pollutants, the sheer volume of newly regulate PSD sources would be staggering. For example, using the 250 tpy threshold, more than one million commercial-sector sources would be subject to the PSD permitting program.
To minimize the number of newly regulated sources, the EPA issued the “tailoring” rule to postpone Title V and PSD regulation of stationary sources for smaller sources. However, the EPA will eventually phase in the CAA permitting requirements in steps:
On June 3, 2010 the EPA asked states if they would agree to the EPA's proposed PSD and Title V GHG rules. Wisconsin responded in the affirmative on July 28, 2010, indicating that the DNR was prepared to advance emergency rules to achieve the EPA's objectives. The DNR is currently working on emergency rules that would incorporate the federal tailoring rules into Wisconsin's permitting rules.
On August 12, 2010, the EPA proposed two rules to ensure that businesses planning to build new, large facilities or make major expansions to existing ones will be able to obtain New Source Review Prevention of Significant Deterioration (PSD) permits that address greenhouse gases (GHG). The first is a proposed finding of inadequacy and call for revised state permitting plans to permit GHG emissions. The second is a federal plan for permitting GHG emissions.
On August 18, 2010, the EPA proposed a rule addressing issues related to when pre-construction permitting requirements under the New Source Review (NSR) permitting program would transition from the 1-hour to the 8-hour National Ambient Air Quality Standards for ozone.
Pollution permitting guidance documents were released on November 10, 2010. These documents provide the basic information that permit writers and applicants need to address GHG emissions in permits. The EPA recommends that permitting authorities use the best available control technology (BACT) process to look at all available emission reduction options. After taking into account technical feasibility, cost, and other economic, environmental and energy considerations, permitting authorities should narrow the options and select the best one. Comments were accepted until December 1, 2010.
The EPA on December 23, 2010 announced its plans to move forward with regulating greenhouse gases under the Clean Air Act. The controversial rule will set significant new regulations on power plants and oil refineries. According to EPA:
For natural gas, oil, and coal-fired electric generating units (EGUs), the rules will establish new source performance standards for new and modified EGUs and emission guidelines for existing EGUs. Under the “agreement” with New York, California, Connecticut, Delaware, Maine, Massachusetts, New Mexico, Oregon, Rhode Island, Vermont, Washington, Washington, D.C., City of New York, Natural Resources Defense Council, Sierra Club and Environmental Defense Fund, EPA will commit to issuing proposed regulations by July 26, 2011 and final regulations by May 26, 2012. EPA is coordinating this action on greenhouse gases with a number of other required regulatory actions for traditional pollutants, including the Utility MACT rule, the Transport Rule and New Source Performance Standards for criteria pollutants.
For refineries, EPA has entered into an agreement with the same states and environmental groups to establish a different schedule for the agency to issue regulations addressing greenhouse gases from refineries.
This settlement agreement establishes a “comprehensive approach” of simultaneously addressing different types of air pollution (GHG, toxics, and criteria pollutants) from different points at the refinery at the same time and in accord with EPA’s so-call Clean Air Act “obligations” to control emissions from this sector.
In addition to a New Source Performance Standards for new and modified refineries, and emission guidelines for existing refineries, EPA will conduct a risk and technology review of current air toxic standards for refineries. As part of the this settlement, EPA will also “resolve” the issues raised in an August 25, 2008 petition for reconsideration of the refinery New Source Performance Standard. EPA will propose regulations on all of these issues by Dec. 15, 2011 and finalize regulations by November 15, 2012.
Future Steps:
- January 2, 2011 – June 30, 2011
- Only sources currently subject to the PSD permitting program (those that are newly-constructed or modified in a way that significantly increases emissions of a pollutant other than GHGs) will be subject to permitting requirements for their GHG emissions under PSD.
- For these projects, GHG increases of 75,000 tpy or more of total GHG, on a CO2e basis, would need to determine the Best Available Control Technology for their GHG emissions.
- For the operating permit program, sources currently subject to the program (newly constructed or existing major sources for a pollutant other than GHGs) will be subject to Title V requirements for GHG.
- July 1, 2011 to June 30, 2013
- PSD permitting requirements will cover construction projects that emit GHG emissions of at least 100,000 tpy even if they do not exceed the permitting thresholds for any other pollutant.
- Facilities that emit at least 100,000 tpy CO2e will be subject to Title V permitting requirements.
- The EPA estimates that 550 sources will need to obtain Title V permits for the first time due to their GHG emissions. The majority of these newly permitted sources will be solid waste landfills and industrial manufacturers.
- The EPA further estimates that there will be approximately 900 additional PSD permitting actions each year triggered by increases in GHG emissions from new and modified emission sources.
- Additional Rulemaking
- The EPA will take further rulemaking, to begin in 2011 and conclude by 2012. According to the EPA, the third phase will not require permitting for smaller sources until at least 2016. The EPA further claims that is will not require permitting for sources with GHG emissions below 50,000 tpy.
This rule is part of a group of rules known as the EPA's Regulatory Train Wreck.
Additional Information
Fact Sheet on the overall rule (PDF)
Timeline Outlining Permitting Steps under the Tailoring Rule (PDF)
Summary of Clean Air Act Permitting Burdens With and Without the Tailoring Rule (PDF)
Additional rules ensuring New Source Review Prevention of Significant Deterioration (PSD) permits that address greenhouse gases (GHG) are being issued.
The first rule directs 13 states to revise their permitting plans while all other states evaluate their plans to determine if the plans are adequate. The second rule creates a federal implementation plan for PSD permits in case a state finds its permits are not adequate and cannot quickly revise them. Wisconsin has responded to the EPA's questions about implementation of these new rules.
Fact Sheet on new rules addressing greenhouse gas emissions from fossil fuel-fired power plants and refineries