EPA Proposes Phased Tailoring Rule for Permitting Major Stationary Sources for Greenhouse Gases

Author:Mr Barnes & Thornburg LLP's Environmental Law Department
Profession:Barnes & Thornburg

EPA published the final version of the "Tailoring Rule," which is meant to address the applicability of the Clean Air Act's Prevention of Significant Deterioration (PSD) and Title V programs to major stationary sources that emit any combination of six greenhouse gases "GHGs" (measured collectively as CO2 equivalent or "CO2-e"). This Rule, which was posted to the EPA's website on May 13, is effective 60 days after it is published in the Federal Register. EPA has established a docket for this rulemaking under Docket ID No. EPA-HQ-OAR-2009-0517.

In this rule EPA establishes a minimum three-phase approach to permitting major sources of GHGs, with a potential for additional phases:

I. Phase One - Title V or PSD for Other Pollutants

Phase 1 is effective on Jan. 2, 2011 for sources already subject to Title V and/or PSD due to their emission levels of other regulated pollutants ("anyway" sources). As of that date, any increase in total GHG emissions above statutory thresholds for mass (i.e., 100/250 tons per year (tpy)) and at least 75,000 tpy CO2e (weighted GHG emissions total) at sources that are required to obtain PSD permits for other regulated pollutants, must satisfy PSD review and incorporate PSD controls for GHGs (e.g., Best Available Control Technology or "BACT"). As of that date, any existing Title V major sources that applies for, renews, or revises its Title V permit must account for GHG emissions in its permit application (Note: no minimum threshold for GHG emission under Title V). II. Phase Two - Designed for Largest Sources

Phase 2 is effective on July 1, 2011 with no identified end date. As of that date, new sources that emit or have the potential to emit at least 100,000 tpy CO2e GHG and that increase the total mass of GHG emissions above statutory thresholds (i.e., 100/250 tons per year (tpy)) must satisfy PSD review and incorporate PSD controls. As of that date, any physical change or change in method of operation at a major stationary source that results in a net increase of at least 75,000 tpy CO2e will trigger PSD review and require PSD controls. As of that date, sources that emit at least 100,000 tpy CO2e will be required to obtain a Title V permit if the source does not already have one. III. Phase Three - Designed for Mid-Range Sources

Expected effective date of July 1, 2013. Threshold levels for Phase 3 are undetermined at this point, but guaranteed to be no less than 50,000 tpy CO2e for both new sources and modifications to existing sources...

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