A New Twist to Determining Applicability of Greenhouse Gas Regulations

On July 1, 2011, U.S. EPA issued a final rule which, for a period of three (3) years, defers the consideration of CO2 emissions from bioenergy and other biogenic sources (biogenic CO2 emissions) when determining whether a stationary source meets the Prevention of Significant Deterioration (PSD) and Title V Major Source Operating Permit greenhouse gas emission applicability thresholds. During this period stationary sources that construct or modify equipment that emits CO2 can avoid the application of PSD requirements to CO2 emissions that are generated from the combustion or decomposition of biologically-based materials other than fossil fuels and mineral sources of carbon. Also during this period biogenic CO2 emissions will be excluded when determining if a facility is required to have a Title V Operating Permit solely because of the level of its CO2 emissions. The three (3) year deferral took effect when the notice of this action was published in the Federal Register on July 20, 2011. 

Last year U.S. EPA promulgated the PSD and Title V Greenhouse Gas (GHG) Tailoring Rule (75 FR 31514, June 3, 2010) which established thresholds and timing for regulating GHG emissions under major source air permitting programs. Even though U.S. EPA acknowledged that the combustion of certain types of biomass that generates CO2 emissions can be part of the national strategy to foster the expansion of renewable resources, reduce dependence on fossil fuels, and address climate change, at the time U.S. EPA did not exempt biogenic CO2 from the applicability determinations of the GHG Tailoring Rule. Now U.S. EPA has decided to issue a temporary deferral for biogenic CO2 to allow time to conduct a detailed examination of the science and technical issues related to accounting for biogenic CO2 emissions and ensure that any fuels and materials with negligible net atmospheric impact are not being subjected to unnecessary regulation. 

U.S. EPA is implementing the deferral of biogenic CO2 by amending the definition of “subject to regulation” in its PSD and Title V regulations to exclude biogenic CO2 emissions. This new rule change defines “biogenic CO2 emissions” as emissions of CO2 from a stationary source directly resulting from the combustion or decomposition of biologically-based materials other than fossil fuels and mineral sources of carbon. U.S. EPA provides examples of biogenic CO2 emissions as including, but not being limited to, the following: 

• CO2 generated from the biological decomposition of waste in landfills, wastewater treatment, or manure management processes;

• CO2 from the combustion of biogas collected from biological decomposition of waste in landfills, wastewater treatment or manure management processes;

• CO2 from fermentation during ethanol production;

• CO2 from combustion of the biological fraction of municipal solid waste or biosolids;

• CO2 from combustion of the biological fraction of tire-derived fuel; and

• CO2 derived from combustion of biological material, including all types of wood and wood waste, forest residue, and agricultural material.

For sources co-firing fossil fuel and biologically-based fuel, or using mixed fuels such as municipal solid waste or tire-derived fuels, the portion of biogenic CO2 emissions from that combustion are included in the deferral, but the fossil fuel CO2 emissions are not. 

Consistent with the PSD and Title V rules applicable to other non-GHG pollutants, this rule change does not define or prescribe a specific method to be used to calculate biogenic CO2 or the biogenic and fossil fuel portions of CO2 emissions from co-firing or using mixed fuels. There are various methods available to do this, including methods detailed in U.S. EPA’s Mandatory GHG Reporting Program at 40 CFR Part 98. Needless to say, the method chosen when preparing emission inventories for air quality permit applications and for demonstrating applicability or non-applicability to PSD and Title V requirements will have to be technically sound and supportable. 

Another interesting twist noted by U.S. EPA in the preamble to this rule change is that the adoption of the deferral for biogenic CO2 emissions from Title V and PSD permitting programs in the Federal rules under 40 CFR Part 70 and 40 CFR §51.166 is optional for any state, local, or tribal permitting agency. Each state or local permitting authority may decide if it wishes to adopt the deferral and proceed with any necessary program changes accordingly. So in determining if and how this rule change will affect a particular source, communication with state and local agencies on what they intend to do is essential.