A Fine Particulate Series: PM2.5 Nonattainment – What You Need to Know
Posted: January 19th, 2012Author: All4 Staff
In the March 2009 4 The Record article “A Practical Guide to PM2.5,” ALL4’s PM2.5 Team discussed the technical basics of PM2.5 and the specific steps that you can take to assess your position with regard to the challenging regulatory landscape that lies ahead. This month’s article aims to fill in a few technical details regarding PM2.5 nonattainment areas, including a discussion on PM2.5 attainment designations, emission reduction credit (ERC) requirements, ERC air quality modeling requirements, and timing and cost considerations when planning for nonattainment area projects where PM2.5 emissions may be a factor.
Attainment or Nonattainment: That is the Question
U.S. EPA strengthened the 24-hour PM2.5 National Ambient Air Quality Standard (NAAQS) in September 2006 by lowering it from 65 ug/m3 to 35 ug/m3. U.S. EPA’s recommendations for attainment designations associated with the revised 24-hour PM2.5 NAAQS were released on December 22, 2008. That action is currently under review in accordance with the “Memorandum for the Executive Departments and Agencies” published in the Federal Register on January 26, 2009. Therefore, any “new” nonattainment areas created by the revised 24-hour NAAQS are not yet considered nonattainment areas. However, we expect that counties previously recommended for nonattainment designation by U.S. EPA will continue to be considered as nonattainment areas when U.S. EPA publishes final recommendations in the Federal Register. In fact, it is likely that the number of nonattainment areas will only increase with upcoming published designations. For facilities located in an area that is currently classified as being in attainment, future planning should include consideration of whether that county may be reclassified as nonattainment by conferring with local regulatory agencies and U.S. EPA.
Absent from the strengthening of the 24-hour PM2.5 NAAQS was a concurrent reduction in the annual PM2.5 NAAQS. On February 24, 2009, the U.S. Court of Appeals – D.C. Circuit remanded the annual PM2.5 NAAQS back to U.S. EPA for re-evaluation. Therefore, the future number of nonattainment areas associated with the annual PM2.5 NAAQS is also likely to increase. As with the 24-hour PM2.5 attainment designations, it would be prudent to gauge whether your county’s attainment status will be affected by a more stringent annual PM2.5 NAAQS.
By planning for potential nonattainment area obstacles now, you may offset future headaches. Speaking of offsets…
PM2.5 Nonattainment Area Requirements
Major modifications to facilities that result in an increase of PM2.5 emissions (and PM2.5 precursors) and that are located in areas designated as being nonattainment with the PM2.5 NAAQS could face significant air permitting hurdles, some of which could threaten the viability of projects. Such hurdles are due primarily to the requirement to “offset” emissions increases of PM2.5 and/or PM2.5 precursors that exceed major modification criteria.
Appendix S to 40 CFR Part 51, aptly titled “Emission Offset Interpretative Ruling,” requires that major modifications subject to New Source Review (NSR) permitting involving direct PM2.5 emissions or SO2 emissions (a PM2.5 precursor) “offset” the direct PM2.5 or precursor emissions increase on a 1 to 1 basis. That is, for every ton of PM2.5 or PM2.5 precursor emissions increase associated with a new major source or major modification, the source must demonstrate that an equivalent reduction has occurred within the nonattainment area (either at the same facility or at other local emission sources). Such reductions are commonly referred to as emission reduction credits (ERCs) and must typically be purchased by the facility initiating the major modification. Note that in nonattainment areas, major NSR applicability is evaluated on a pollutant-by-pollutant basis. Therefore, in a PM2.5 nonattainment area, modifications will need to be evaluated for NSR applicability for direct PM2.5 and for each precursor. Even if a source is considered minor for direct PM2.5 emissions, but major for one or more precursors, NSR applicability will need to be evaluated for those precursors, resulting in LAER and ERC requirements.
The precursor requirements established a scenario that is new to many of us: a pollutant that has always been considered an attainment pollutant (SO2, for example) will now be subject to nonattainment pollutant requirements as a precursor to PM2.5 in PM2.5 nonattainment areas. This means that SO2 will be a prevention of significant deterioration (PSD) pollutant (subject to air quality modeling and best available control technology (BACT) requirements) and a nonattainment NSR pollutant (subject to LAER and ERC requirements). NOX emissions will fall under the same category as SO2 in PM2.5 nonattainment areas once states finalize their nonattainment NSR rules, as described below.
Appendix S currently applies in all PM2.5 nonattainment areas across the country, with the possible exception of New York State, and only addresses SO2 as a PM2.5 precursor. Appendix S will continue to apply during the 3-year transition period during which SIP-approved state NSR programs will be revised to reflect the Federal PM2.5 nonattainment rules. States are required to include NOX as a PM2.5 precursor in their nonattainment rules unless they can demonstrate that NOX does not contribute to PM2.5 formation. States may also elect to regulate ammonia and/or VOC as PM2.5 precursors, but will need to demonstrate that ammonia and/or VOC emissions do contribute to PM2.5 formation.
ERC Requirement Challenges
There are several issues associated with finding, validating, purchasing, and executing ERCs for direct PM2.5 emissions as detailed below.
- Of primary concern is a general lack of such ERCs. While relatively large portions of the country have been living with ozone nonattainment for well over 15 years, PM2.5 nonattainment from an NSR perspective is a relatively recent phenomenon. As such, PM2.5 emission inventories are not well defined and facilities that have reduced PM2.5 emissions or that have shut down within the last few years likely do not have adequate records of PM2.5 emissions and reductions.
- There are spatial requirements for the use of any direct PM2.5 ERCs that may be available. Unlike ozone, PM2.5 nonattainment is more local in nature and ERCs must typically be generated within the nonattainment area (i.e., county) in which they will be applied or be from a nearby nonattainment area with a demonstrated impact. In fact, air quality modeling requirements exist for ERCs purchased outside of the project county, as described in the next section.
- The lack of ERC registries in many states can make finding ERCs a challenging ordeal. While some states, such as Pennsylvania, have well defined ERC “registry” systems that set standards for defining and registering ERCs, others do not have such programs. In these instances, sources are generally on their own with regard to finding, documenting, purchasing, and executing ERCs as emission offsets, often with little or no guidance from state regulatory agencies.
- The costs for direct PM2.5 ERCs will likely become an issue based on supply and demand. For example, the cost of direct PM2.5 ERCs in Pennsylvania could start at $10,000 per ton or more.
Fortunately, U.S. EPA has included provisions in the PM2.5 NSR rules that allow sources to use PM2.5 precursor ERCs (i.e., SO2 and eventually NOX) to offset emissions increases of direct PM2.5 emissions associated with a major modification, with a stipulation. The use of PM2.5 precursor ERCs to offset direct PM2.5 emissions increases will be subject to the following offset ratios:
- 40 tons of SO2 ERCs per ton of direct PM2.5 emissions.
- 200 tons of NOX ERCs per ton of direct PM2.5 emissions.
While the use of precursors to offset direct PM2.5 emissions increases will help on the supply side, the spatial issues associated with the use of PM2.5 ERCs and the cost concerns based on the required offset ratios will remain as hurdles. Also note that the use of direct PM2.5 ERCs to offset increases in PM2.5 precursors is not permitted.
What is “Ambient Equivalency”?
As described in the previous section, any search for direct PM2.5 or PM2.5 precursor ERCs is required to start in your own nonattainment area. ERCs purchased outside of your nonattainment area must be demonstrated as having “ambient equivalence” to your project-related emissions increase. Since nonattainment areas are typically defined as individual counties, the ambient equivalency demonstration will be a common requirement for nonattainment area projects. The ambient equivalency demonstration is performed using air dispersion modeling. Although no clear guidance for demonstrating ambient equivalency exists, ALL4’s work with local agencies and U.S. EPA on permitting projects to date defines the demonstration as a three step process:
1. Model the project-related emissions increase from the proposed modification or new emission unit at your facility and define the geographic extent of resulting “significant concentrations.”
2. Model the emissions decrease associated with the ERCs that have been identified for purchase and define the geographic extent of resulting significant concentrations.
3. Compare the resulting ambient concentrations from your project and from the generated ERCs, and demonstrate that the significant concentrations resulting from both spatially overlap in the county that your project is located in.
A “significant concentration” of direct PM2.5 is presumably defined as the 24-hour and annual significant impact levels (SILs) that are currently proposed by U.S. EPA, although lower concentration increments could be proposed to the local agency, if required. Significant concentrations for the purpose of modeling PM2.5 precursor emissions to demonstrate ambient equivalency are also not defined, and should be reviewed with the local agency and U.S. EPA prior to securing PM2.5 precursor ERCs. Since the geographic extent of significant concentrations is not typically extensive (i.e., less than 10 kilometers), the spatial extent for potential ERC purchases will be limited. In many cases, ERCs that are located farther away than the adjacent counties will not satisfy ambient equivalency requirements. The air quality modeling evaluation is performed using the AERMOD air dispersion model, and requires the submittal of an air quality modeling protocol outlining the technical approach and information that will be used to conduct the modeling. The protocol review process will typically extend the timeline for preparing a complete construction permit application. Further, representative meteorological data is required for the air quality modeling evaluation (i.e., nearby National Weather Service data).
If representative meteorological data is not available, then a year of on-site meteorological monitoring may be required, further extending the permitting timeline. These traditionally PSD-related technical issues will now become nonattainment area challenges as well.
Recommendations and Conclusions
At least in the short-term, many facilities will have difficulty in obtaining ERCs for direct PM2.5 emissions because there simply aren’t many direct PM2.5 ERCs that are registered and available for purchase. Further complicating the search for direct PM2.5 ERCs is the fact that the ERCs must have been generated in the same nonattainment area (i.e., the same county) in which the proposed project or expansion is located. ERCs from neighboring counties can be purchased to offset a project if the facility satisfies an equivalency demonstration through modeling, as previously explained. The scarcity of direct PM2.5 ERCs will leave few options for most facilities. In light of these challenges associated with an already complicated set of regulations, it is extremely important that facilities planning modifications in PM2.5 nonattainment areas be aware of the issues and begin planning to address them well in advance of a modification. The following list identifies some ways in which a facility can plan for and address PM2.5 ERC requirements:
- Evaluate any recent changes made on-site that may have resulted in a reduction of PM2.5 or PM2.5 precursor emissions.
- Generate direct PM2.5 offsets internally by installing new controls or upgrading existing controls to reduce direct PM2.5 emissions from an existing source on site.
- Enter into an agreement to generate and purchase direct PM2.5 ERCs from a neighboring facility. It may be cost-effective to purchase and install new controls or upgrade the existing controls at a neighboring facility to generate the ERCs needed to offset your project.
- Start searching for ERCs by checking the facility’s state ERC registry, as applicable.
- Offset the project by purchasing ERCs for precursor compounds such as SO2 and/or NOX. This could be expensive because of the very large offset ratios involved.
- If local ERCs are not available, look to adjoining nonattainment areas, as applicable.
- If non-local ERCs are available, ensure that adequate meteorological data is available for use in the ambient equivalency analysis.
- Make sure that you thoroughly review and understand any applicable state nonattainment rules. State-specific nuances can turn out to be unpleasant surprises.
- These items are a good starting point to plan for PM2.5 nonattainment requirements. Stay tuned for additional articles and PM2.5 information from ALL4’s PM2.5 Team.