Northeastern New Jersey Nonattainment Penalty Fees for Ozone

Facilities located in the northeastern counties of New Jersey, including Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, and Union will be affected by U.S. EPA’s Section 185 nonattainment penalty fees due to the region not meeting the 1-hour ozone National Ambient Air Quality Standard (NAAQS) by the attainment date in 2007.  Currently, U.S. EPA staff is developing guidance that may provide flexibility on how these fees are paid.

However, facilities in these counties should now calculate the facility baseline emissions for VOC and NOX and compare the baseline to the facility’s current emissions, as the fee will be assessed based on recent emissions and the baseline information.  Typically the baseline emissions are those recorded by the states in the attainment year, but U.S. EPA has also provided guidance for alternative methods for calculating the baseline emissions.  The nonattainment penalty fees are paid on VOC and NOX emissions in excess of 80 percent of the baseline at a rate of $5,000 per ton, which is based upon the 1990 fee set in the Clean Air Act and adjusted for inflation according to the Consumer Price Index.  This would result in a 2008 penalty fee of $7,951 per ton.  Keep in mind that the nonattainment penalty fees will be in effect until the region meets the 1-hour ozone NAAQS. 

This issue was discussed at the February 9, 2009 New Jersey Industrial Stakeholder Meeting. The New Jersey Department of the Environment (NJDEP) understands the nature of this issue and is working with U.S. EPA to understand the requirements and flexibility regarding the nonattainment penalty fees and expects to issue a guidance memorandum regarding how New Jersey will collect the penalty fee.