On October 27, 2009, the EPA published a proposed greenhouse gas (GHG) tailoring rule (GHG Tailoring Rule) in the Federal Register (74 Fed. Reg. 55292). The GHG Tailoring Rule, which the EPA announced in September, would establish new thresholds for GHG emissions that define when Clean Air Act (CAA) permits under the New Source Review (NSR) and Title V (Title V) operating permits programs would be required for new or existing industrial facilities. Covered facilities would be required to obtain permits that would demonstrate they are using the best practices and technologies to minimize GHG emissions.
On April 2, 2007, the Supreme Court found that GHGs, including carbon dioxide, are air pollutants covered by the CAA. Massachusetts v. EPA, 549 U.S. 497 (2007). The Supreme Court found that EPA was required to determine whether or not emissions of GHGs from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision. In April 2009, the EPA responded to the Court's decision by proposing a finding that greenhouse gases contribute to air pollution that may endanger public health or welfare. The EPA's proposed endangerment finding was finalized on December 15, 2009 (74 Fed. Reg. 66496). The agency has also proposed regulations under the CAA to control GHG emissions from light duty vehicles. If finalized, the regulation of GHG emissions from light duty vehicles would also trigger CAA permitting requirements under the Prevention of Significant Deterioration (PSD) and Title V Operating Permit programs for GHG emissions from new and existing stationary facilities. This would be the first time GHGs would be subject to either of these CAA permitting programs.
Under the existing PSD and Title V programs, facilities that have the potential to emit more than the applicable threshold of regulated pollutant (either 100 or 250, depending on the type of source) are required to obtain permits. However, EPA projects that applying these existing significance thresholds to GHG emissions would impose a tremendous burden on small sources while also paralyzing state permitting authorities by the influx of new permit applications. In order to avoid this result, EPA has proposed “tailoring” the applicability thresholds through the GHG Tailoring Rule. The rule proposes initial applicability threshold levels requiring PSD and Title V permits for new major stationary sources that emit 25,000 tons or more per year of regulated GHGs, measured as CO2 equivalents (CO2e). Formulas exist for converting non-CO2 GHG to CO2e equivalents based on their “global warming potential.” An exiting facility that undergoes a “major modification” which results in an increase of GHG emissions above significance levels would also be subject to PSD permitting requirements. EPA has proposed a significance level between 10,000 to 25,000 tons per year CO2e, and is taking comments on what the final significance level should be.
EPA estimates that 400 new sources and modifications would be subject to PSD review each year under the proposed GHG emissions thresholds. In total, the agency estimates that approximately 14,000 large sources would need to obtain Title V operating permits for GHG emissions. About 3,000 of these sources would be newly subject to CAA operating permit requirements as a result of this action.
EPA will accept comment on this proposal through December 28, 2009. If you are interested in developing comments or learning more about how this proposed rule will impact your facility, please contact us.
J. Kevin Ellis
United Center
1085 Van Voorhis Road
Suite 400
Morgantown, WV 26507
304.598.8168
kevin.ellis@steptoe-johnson.com