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U.S. Court of Appeals Vacates Biomass Greenhouse Gas Permits Exception

08.15.2013

By Andy Bowman, Attorney, Bingham Greenebaum Doll LLP

On July 12, 2013, the U.S. Court of Appeals for the D.C. Circuit struck down EPA’s 2011 rule (Deferral Rule) which granted facilities that burn biomass for fuel a three-year deferral from Prevention of Significant Deterioration (PSD) permitting requirements for carbon dioxide (CO2) emissions.  Center for Biological Diversity v. EPA, 2013 U.S. App. LEXIS 14108 (July 12, 2013).  The Deferral Rule enabled plants burning biologically-based materials other than fossil fuels, such as wood, wood waste, forest residue and agricultural materials to avoid triggering Prevention of Significant Deterioration (PSD) or Title V permitting under the greenhouse gas Tailoring Rule as the result of biogenic CO2 emissions.  Indiana has adopted the three-year temporary exemption as part of its state implementation plan (SIP).  Kentucky had not yet formally adopted the deferral as part of its regulations.

The temporary exemption was originally set to expire July 21, 2014.  The purpose of the Deferral Rule was to give EPA time to study the net carbon cycle impact of biogenic CO2 emissions and develop appropriate rules.  Supporters of biomass fuel use believe that biomass fuel is carbon neutral and urged EPA to issue a permanent exemption.

The Deferral Rule was challenged on grounds that EPA’s exemption for biomass fuels was arbitrary and capricious.  The court agreed, finding “zero basis in the text of the Clean Air Act for EPA to distinguish biogenic carbon dioxide from other sources of carbon dioxide that EPA is required (under our precedent) to regulate for purposes of the PSD and Title V permitting programs.”  However, the court did not decide whether EPA has authority under the Clean Air Act to permanently exempt biogenic CO2 sources from the PSD permitting program.

EPA and the other parties to the action have until August 26, 2013 to seek a re-hearing.  The court’s decision likely will accelerate EPA’s efforts to issue a new rule on biogenic CO2 emissions.  In the meantime, owners and operators planning to use biomass fuels will need to continue to monitor the litigation for further developments and confer with the permitting agency if potential biogenic CO2 emissions will exceed PSD or Title V permitting thresholds.


To view a complete PDF of the Second Quarter 2013 issue of the Air Quality Letter, click HERE.

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