GHG-Only Permitting Changes – Do You Know What Your State is Doing?

On June 23, 2014, the U.S. Supreme Court reversed the course of part of the U.S. Environmental Protection Agency’s (U.S. EPA’s) Greenhouse Gas (GHG) Tailoring Rule, deciding that Prevention of Significant Deterioration (PSD) construction permits or Title V operating permits are not required solely due to emissions of GHGs. In other words, GHGs are only regulated under these programs if a facility triggers permitting due to emissions of other pollutants (e.g., sulfur dioxide, nitrogen oxides, particulate matter). This ruling generally is considered to be a win for industry – in ALL4’s world, we have been involved in several Boiler MACT permitting projects that triggered PSD permitting solely because of GHG emissions. These projects (which occurred in multiple states) are already in various stages of revision or rescission because of the June 2014 ruling.

As the dust continues to settle from this major shakeup, U.S. EPA issued a memorandum on July 24, 2014 in an attempt to provide clarity and direction moving forward with the role of GHG emissions in PSD and Title V permitting. In this memorandum, U.S. EPA states that it will “act consistent with its understanding of the Supreme Court’s decision.” Namely, this confirms that U.S. EPA will no longer require PSD or Title V permits for sources in which GHG emissions are the only pollutant that exceeds the applicable permitting thresholds under those programs. Furthermore, U.S. EPA notes that it believes that sources with final PSD or Title V permits that were obtained due only to GHG emissions can ultimately remove the GHG limitations and obtain a minor source permit.

There are states (such as Georgia) in which their laws automatically modify state permitting requirements based on the Supreme Court’s decision. Georgia already has issued a policy regarding this very aspect of its rules, and it is moving forward with its intent to modify GHG-based only permits. However, in this memorandum, U.S. EPA believes that, despite the Supreme Court ruling, states can retain GHG-only permitting requirements, which can cause major permitting challenges for companies with facilities in multiple states. U.S. EPA has called for its regional offices to work with state and local permitting authorities regarding plans to implement the Supreme Court’s decision. Therefore, if you have been issued a permit solely because of GHG emissions, or are planning projects in which GHG emissions may be the only pollutant to trigger PSD or Title V permitting, please contact your permitting authority for guidance and direction.

This memorandum also addressed the emissions threshold for PSD permitting purposes for projects that require PSD permitting for pollutants other than GHGs. For projects in which pollutants other than GHGs will exceed PSD permitting thresholds, GHGs will be regulated only if the net emissions increase of GHGs is more than 75,000 tons per year of carbon dioxide equivalent (CO₂e). This threshold was not changed due to the Supreme Court ruling, though modifying the threshold is open for consideration according to U.S. EPA.

Of note, the Supreme Court ruling did not directly address the biogenic deferral, which was overturned on July 12, 2013 but has not taken effect due to ongoing litigation. Though the original Tailoring Rule biogenic deferral period expired on July 21, 2014, U.S. EPA again recommends consulting with state and local authorities about their specific implementation of the biogenic deferral for permitting activities.