EPA Publishes Proposed Rule for Step 3 of The Greenhouse Gas Tailoring Rule


Source: SOCMA
Related Topics: US Environmental Protection Agency

Today, EPA published the proposed rule for Step 3 of The Greenhouse Gas Tailoring Rule in the Federal Register.  A public hearing will be held in Arlington, VA on March 20, and comments are due on April 20.

Specifically, EPA is proposing to:

  • Retain the existing greenhouse gas (GHG) permitting thresholds for the Prevention of Significant Deterioration (PSD) and Title V Operating Permit programs (i.e., smaller sources would continue to remain below the existing threshold levels outlined above)
    • Thus, under the approach maintained in this proposal, new facilities with GHG emissions of at least 100,000 tons per year (tpy) carbon dioxide equivalent (CO2e) continue to be required to obtain PSD permits. Existing facilities that emit 100,000 tpy of CO2e and make changes increasing the GHG emissions by at least 75,000 tpy CO2e, must also obtain PSD permits. Facilities that must obtain a PSD permit, to include other regulated pollutants, must also address GHG emission increases of 75,000 tpy or more of CO2e. New and existing sources with GHG emissions above 100,000 tpy CO2e must also obtain operating permits.
    • In explaining its proposed action, EPA writes that “After evaluating the progress of GHG permitting  so far, EPA believes that state permitting authorities have not had sufficient time to develop necessary program infrastructure, and to increase  their GHG permitting expertise, to make it administratively feasible to apply PSD and title V permitting requirements to smaller sources.”
  • Streamline the permitting process for large emitters already covered by the agency’s program, including sources that account for nearly 70 percent of the total GHG pollution from stationary sources. Specifically, EPA is proposing two streamlining approaches:
    • The first would increase flexibilities and improve the usefulness of plantwide applicability limitations (PALs) for GHGs;
    • The second would create the regulatory authority for EPA to issue synthetic minor permits for GHGs where EPA is the PSD permitting authority

EPA is also seeking comments and information related to permitting activity and burden; permitting authorities’ resources; the impact of lowering GHG thresholds for PSD applicability and / or title V; and permit streamlining techniques such as PTE calculations, general permits, and the development of presumptive BACT for sources of GHGs.


Step 3 is the next stage in the process laid out when the Tailoring Rule was finalized in May 2010.  The process consists of:

  • Step 1 (January 2 – June 30, 2011) -- Only sources currently subject to the PSD permitting program (i.e., those that are newly-constructed or modified in a way that significantly increases emissions of a pollutant other than GHGs) would be subject to permitting requirements for their GHG emissions under PSD. For these projects, only GHG increases of 75,000 tpy or more of total GHG, on a CO2e basis, would need to determine the Best Available Control Technology (BACT).  Similarly for the operating permit program, only sources currently subject to the program (i.e., newly constructed or existing major sources for a pollutant other than GHGs) would be subject to title V requirements for GHG.
  • Step 2 (July 1, 2011 – June 30, 2013) -- PSD permitting requirements will cover for the first time new construction projects that emit GHG emissions of at least 100,000 tpy even if they do not exceed the permitting thresholds for any other pollutant.  Modifications at existing facilities that increase GHG emissions by at least 75,000 tpy will be subject to permitting requirements, even if they do not significantly increase emissions of any other pollutant.  In Step 2, operating permit requirements will, for the first time, apply to sources based on their GHG emissions even if they would not apply based on emissions of any other pollutant. Facilities that emit at least 100,000 tpy CO2e will be subject to title V permitting requirements.
  • Step 3 – In the final rule, EPA committed to undertake another rulemaking, to begin in 2011 and conclude no later than July 1, 2012.  That action, EPA wrote, would “take comment on an additional step for phasing in GHG permitting, and may discuss whether certain smaller sources can be permanently excluded from permitting.  (emphasis added)  EPA added that it planned “to explore a range of opportunities for streamlining future GHG permitting that have the potential to significantly reduce permitting burdens,” and that it  would “propose viable streamlining options in the “Step 3” rulemaking.  EPA stated that “Step three, if established, will not require permitting for sources with greenhouse gas emissions below 50,000 tpy.  The agency elaborated, stating that it will not require permits for smaller sources in step three or through any other action until at least April 30, 2016.
  • In the final rule, EPA also stated that, by the end of April 2015 it would “complete a study on remaining GHG permitting burdens that would exist if we applied the program to smaller sources.”  The agency would then consider the results of that study  “to complete a rule by April 30, 2016 further addressing Clean Air Act permitting for these facilities.  In that rule,” EPA continued, “we may decide that successful streamlining will allow us to phase in more sources, but we may also decide that certain smaller sources need to be permanently excluded from permitting.”

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