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Phase II of greenhouse gas permit requirements take effect and are further clarified by EPA

08.01.2011

As reported in the third quarter 2010 issue of the Greenebaum Air Quality Letter, beginning on January 2 of this year, federal air permitting requirements took effect for emissions of GHGs, such as carbon dioxide or methane. As previously reported, EPA has promulgated a phased approach for GHG permitting requirements. During the first phase, which was in effect from January 2 through June 30, 2011, GHG permitting requirements applied only to projects that triggered Clean Air Act PSD or Title V permit requirements due to emissions of pollutants other than GHGs (i.e., “anyway” sources). Beginning on July 1, 2011 however, GHG permitting requirements were significantly expanded to include facilities that may not otherwise be required to hold a PSD or Title V permit (i.e., sources other than “anyway” sources).

Currently, a new construction project will trigger PSD review for GHGs where the source has not yet begun actual construction of the project on July 1, 2011 pursuant to a validly issued construction project, and:

  • PSD for GHGs would have been required under Phase I, i.e., the project is required to undergo PSD review for a pollutant other than GHGs and has the potential to increase GHG emissions (measured on a collective basis) in an amount equal to or exceeding both statutory PSD mass-based thresholds (either 100 or 250 tpy) and 75,000 tpy as measured in terms of carbon dioxide equivalent (CO2e), or
  • The new source has the potential to emit 100,000 tpy or more of GHGs measured as CO2e and also meets statutory 100/250 tpy mass based PSD thresholds.
    For modifications at existing facilities, GHG PSD review requirements are now triggered where the source has not yet begun actual construction of the project on July 1, 2011 pursuant to a validly issued construction permit, and:
  • PSD for GHGs would have been required under the Phase I modification test, i.e., the project is required to undergo PSD review for a pollutant other than GHGs and the potential emissions increase and the net emissions increase of GHGs from the project are equal to or greater than 75,000 tpy on a CO2e basis and greater than zero tpy on a mass basis; or
  • The existing source’s GHG potential to emit meets or exceeds both 100,000 tpy on a CO2e basis and statutory mass-based thresholds, and the emission increase and net emission increase of GHG emissions from the modification would equal or exceed 75,000 tpy on a CO2e basis and zero on a mass basis; or
  • For a source that is otherwise minor (i.e. does not emit any regulated new source review pollutants in amounts that equal or exceed 100 or 250 tpy) before the modification, the actual or potential GHG emissions from the modification meets or exceeds both 100,000 tpy on a CO2e basis and the applicable mass-based major source threshold.

With regard to Title V operating permit requirements, facilities that emit at least 100,000 tpy of GHG emissions as measured on a CO2e basis and 100 tpy of GHG emissions as measured on a mass basis are now subject to Title V operating permit requirements. For an existing facility, applications for such permits are due no later than July 1, 2012.

On March 15, 2011, EPA issued a question and answer document further clarifying its interpretation of how Clean Air Act permitting requirements apply to GHGs after July 1. In that document, EPA clarified that for a project that does not meet the above CO2e thresholds, GHGs are not “subject to regulation” for purposes of the Clean Air Act and thus GHG emissions are not part of the major source definition and do not affect PSD source classification. Only where the applicable CO2e threshold is exceeded must the facility proceed with an analysis of whether the applicable mass-based thresholds are also exceeded.

In other news pertinent to Phase II GHG permitting requirements, on July 20, 2011, EPA published its anticipated final rule deferring the application of PSD and Title V permitting requirements to biogenic carbon dioxide emissions from bioenergy and other biogenic stationary sources. See the fourth quarter 2010 issue of the Greenebaum Air Quality Letter for further details regarding this deferral.


To view a complete PDF of the Second Quarter 2011 issue of the Air Quality Letter, click HERE.

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