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Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule

Most Recent Action

On July 24, EPA released a memorandum to its ten regional administrators explaining how the EPA intends to proceed with respect to permit applications for the Tailoring Rule and provides preliminary guidance in response to several questions regarding ongoing permitting requirements for “anyway sources” and some additional issues pertaining to permitting requirements for “Step 2” sources.

Phase 3 of the Tailoring rule (final) was published in the Federal Register on July 12, 2012. The EPA did not include additional, smaller sources in the permitting program.

The EPA’s phased-in approach to implementing GHG permitting was upheld by the U.S. Court of Appeals for the D.C. Circuit. June 2012.

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 became 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.

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.

The first step of EPA’s tailoring rule, which took effect Jan. 2, 2011, required sources that were already subject to prevention of significant deterioration requirements to obtain permits for their greenhouse gases if they emit 75,000 tons of carbon dioxide-equivalent a year.

Beginning July 1, 2011, the second phase applied permitting requirements to all stationary sources with greenhouse gas emissions of at least 100,000 tons of carbon dioxide-equivalent annually or that made modifications increasing their emissions by at least 75,000 tons per year. The requirements applied to sources even if they were not previously subject to permitting for other pollutants.

The EPA chose not to revise those permitting thresholds for the third step of the tailoring rule. That will allow the EPA and states more time to develop the necessary infrastructure to issue the permits and develop measures to ease the burden on regulators and industrial facilities.

In the phase 3 rule, the EPA also finalized a provision that allows companies to set plant-wide emissions limits for GHGs, streamlining the permitting process, increasing flexibilities and reducing permitting burdens on state and local authorities and large industrial emitters. The regulations will permit GHG-only sources to utilize plantwide applicability limitations (PALs) for GHGs and retain their minor source status for other pollutants.

The EPA plans to complete a study of the administrative burdens of the permitting program by April 30, 2015. The next review of the permitting thresholds is due to be completed by April 30, 2016, and the EPA could revise the thresholds then.

This rule is part of a group of rules known as the EPA’s Regulatory Train Wreck.

Additional Information

Phase 3 Final Rule, July 12, 2012

Phase 3 Fact Sheet, July 2012

Phase Three Proposed Rule, February 2012

Fact Sheet on Proposed Phase Three Rule, February 2012

Fact Sheet on the overall rule, June 2010

Final Rule, June 2010

Timeline Outlining Permitting Steps under the Tailoring Rule

Summary of Clean Air Act Permitting Burdens With and Without the Tailoring Rule

Fact Sheet on the two additional rules providing Federal Implementation Plans while states are revising their permitting rules

The EPA’s Regulations & Standards website

Related Actions
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 respondedto 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

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 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.

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.

On December 23, 2010, the U.S. Environmental Protection Agency (EPA) issued a series of rules that put the necessary regulatory framework in place to ensure that 1) industrial facilities can get Clean Air Act permits covering their greenhouse gas (GHG) emissions when needed and 2) facilities emitting GHGs at levels below those established in the Tailoring Rule do not need to obtain Clean Air Act permits.