U.S. EPA Adopts Cross-State Air Pollution Rule
By Jennifer Thompson, Attorney, Bingham Greenebaum Doll LLP
On May 12, 2005 the United States Environmental Protection Agency (“U.S. EPA”) issued the Clean Air Interstate Rule (“CAIR”). However, the United States Court of Appeals for the District of Columbia remanded CAIR to U.S. EPA in 2008, leaving CAIR intact, but requiring U.S. EPA to replace it with a regulation which adequately addresses the “good neighbor” provision of the Clean Air Act (“CAA”). North Carolina v. EPA, 531 F.3d 896 (D.C. Cir.), modified on rehearing, 550 F.3d 1176 (D.C. Cir. 2008). On July 6, 2011, in response to the remand, U.S. EPA finalized the Cross-State Air Pollution Rule (“CSAPR”). The CSAPR replaces the 2005 Clean Air Interstate Rule (“CAIR”) starting in 2012 and addresses the “good neighbor” provision of the CAA which generally requires that State Implementation Plans (“SIPs”) contain adequate provisions prohibiting any source within the state from emitting any air pollutant in amounts which will contribute significantly to nonattainment in, or interfere with attainment maintenance by, any other state with respect to the National Ambient Air Quality Standards (“NAAQS”). 42 U.S.C. § 7410(a)(2)(D)(i).
The CSAPR defines the portion of an upwind state’s emissions which “significantly contribute” ozone or PM2.5 pollution to nonattainment or maintenance areas in downwind states. The regulation considers the magnitude of a state’s contribution, the air quality benefits of reductions, as well as the cost of controlling pollution from various sources. Pursuant to the regulation, states are required to eliminate the portion of their “significant contribution” by establishing a limit/budget. As proposed with CAIR, cap and trade regimes will be utilized to achieve the emission reductions. The rule is expected to significantly reduce SO2 and NOx emissions from power plants in the eastern half of the United States.
The CSAPR requires ozone season NOx reductions in twenty (20) states: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and West Virginia. U.S. EPA has also proposed to extend these reductions to six additional states: Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin.
Annual SO2 and NOx emissions reductions are required in twenty-three (23) states to reduce downwind PM2.5 concentrations: Alabama, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.
Reductions for SO2 and annual NOx emissions are to be achieved by January 1, 2012 and reductions for ozone season NOx emissions are to be achieved by May 1, 2012. Additionally, the CSAPR requires more stringent SO2 reductions beginning January 1, 2014 for “Group 1” states: Illinois, Indiana, Iowa, Kentucky, Maryland, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin.
To enforce the CSAPR, U.S. EPA has adopted federal implementation plans (“FIPs”) for each state covered by the rule. Individual states can replace the FIPs by promulgating equivalent emissions reductions into their SIPs.
The proposed CSAPR was published in the August 2, 2010 Federal Register (75 FR 45210) and the final rule appears in the August 8, 2011 Federal Register (76 FR 48208).