EPA Issues First-Ever Rule Regulating GHG Emissions from Light Duty Vehicles, Confirms GHG Stationary Source Permitting Begins January 2011

Author:Ms Patricia Sharkey
Profession:McGuireWoods LLP

This week, the U.S. Environmental Protection Agency (EPA) took two major steps in the agency's continued march toward establishing a new regulatory framework to control greenhouse gas (GHG) emissions under the Clean Air Act (CAA).

On Monday, March 29, 2010, EPA finalized the agency's formal reconsideration of the Dec. 18, 2008, "Johnson Memo" addressing when GHGs would become "subject to regulation" under the CAA. EPA's reconsideration action was the first formal confirmation of recent informal statements by Administrator Lisa Jackson that EPA is not planning to regulate GHG emissions through the CAA Prevention of Significant Deterioration (PSD) and Title V permitting programs until 2011.

On Thursday, April 1, 2010, EPA and the U.S. Department of Transportation took another momentous step by announcing the much-anticipated final light duty vehicle rules, which formally establish EPA's first-ever national regulation of GHGs. Finalizing the vehicle rules has been a major priority for the Obama Administration, as well as the automobile industry, which has worked with the administration to avoid a potential state-by-state patchwork of GHG automobile emissions regulations.

The final light duty vehicle rules increase Corporate Average Fuel Economy (CAFE) standards on model year 2012 to 2016 automobiles, and set GHG emission reduction requirements that will result in a fuel economy standard equivalent to an average of 35.5 miles per gallon by 2016.

By triggering GHG regulation under the CAA, the light duty vehicle rules also indirectly impact many other carbon-intensive industries, which potentially will be subject to PSD and Title V permitting requirements. The reconsideration of the Johnson Memo issued Monday sets forth some of the details of how and when such GHG permitting will occur, and additional details are expected in EPA's forthcoming final Tailoring Rule. The final Tailoring Rule is expected to be released later this month.

EPA's final action on Monday concludes the agency's reconsideration of former EPA Administrator Stephen L. Johnson's determination that the CAA's permitting programs only apply to pollutants subject to an actual emissions limitation or other substantive regulation under either the CAA itself, or regulations adopted by EPA under the CAA. This action confirms Administrator Johnson's interpretation that GHGs were not "regulated" under the CAA prior to the finalizing of the light duty vehicle GHG regulation.

On Dec. 30, 2008, the Johnson...

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