On May 13, 2010, U.S. EPA announced that it had finalized its “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule,” which prescribes how Clean Air Act (“CAA”) permitting requirements are applied to stationary sources of greenhouse gas (“GHG”) emissions. The rule “tailors” the application of the CAA’s Prevention of Significant Deterioration (“PSD”) and Title V permitting requirements so that only stationary sources of a large amount of GHG emissions are required to obtain permits. Such permits must demonstrate the use of best available control technologies (“BACT”) applied to GHG emission points. The application of the final rule is more “tailored” than EPA’s original September 2009 proposal, in that the final rule’s triggering emission amount is a minimum of 75,000 tons per year (“tpy”), not the 25,000 tpy trigger originally proposed.
The final rule has two phase-in periods. Starting in January 2011, facilities that are already obtaining a CAA permit for other pollutants will be required to include GHGs in their permit if they increase these emissions by at least 75,000 tpy. In July 2011, permits will be required for all new facilities with GHG emissions of at least 100,000 tpy and for modifications at existing facilities that would increase GHG emissions by at least 75,000 tpy. As a result of this new rule, EPA estimates that approximately 900 additional permitting actions covering new and modified sources will be reviewed each year. In addition, an estimated 550 sources will need to obtain Title V operating permits for the first time because of their GHG emissions.
EPA’s Tailoring Rule will be controversial and likely contested in court. Moreover, the rule may not apply if Congress acts to address GHGs outside the PSD and Title V programs, such as through a cap-and-trade system.
Click here for the EPA’s Final GHG Tailoring Rule, in full.