PM2.5 Emission Reduction Credits – A Lesson in Supply and Demand

U.S. EPA has issued final rules governing the implementation of the New Source Review (NSR) program for particulate matter less than 2.5 micrometers in diameter (PM2.5) which are effective on July 15, 2008. This rule finalizes previously proposed NSR program revisions for sources that emit PM2.5 and other pollutants that contribute to the formation of PM2.5 in the atmosphere. The rule will impact air quality permitting under Prevention of Significant Deterioration (PSD), Nonattainment NSR (NNSR), and state minor source programs.  Facilities that trigger the NNSR permitting requirements for PM2.5 will need to pay particular attention to the emission offset requirements for direct emissions of PM2.5 and the PM2.5 precursors (SOX and NOX).  Sources that trigger the PM2.5 offset requirements under NNSR will need to purchase Emission Reduction Credits (ERCs) or generate their own internal PM2.5 emission reductions in order to obtain a preconstruction permit.

If your major facility is located in an area that is designated as nonattainment for the PM2.5 National Ambient Air Quality Standard (NAAQS), you will need to evaluate the applicability of NNSR for modifications involving direct emissions of PM2.5 and PM2.5 precursors.  Even if you have already submitted an application for a construction permit to the regulatory authority for review, if it is not issued by July 15, 2008, you will need to amend your permit application to address PM2.5 emission offsets or netting.

Finding PM2.5 ERCs has already been a very difficult task for some facilities facing NNSR for PM2.5.  Very few direct PM2.5 ERCs have been submitted for certification, and even fewer have been certified by local air quality control agencies.  ERCs for PM2.5 precursors (NOX and SOX) are available, but the equivalency ratios required for the PM2.5 precursors can make ERC transactions cost prohibitive.

Now is the time to assess where your company stands with regard to PM2.5 emissions.  You know what your PM emissions are, you may know what your PM10 emissions are, but do you actually know what levels of PM2.5 you emit?  Will that new source that is being considered for your next business expansion be adversely impacted by a requirement to obtain PM2.5 emission offsets?