U.S. EPA Issues New Emissions Standards for Greenhouse Gas Emissions From Both New and Existing Fossil Fuel-Fired Electric Generating Units

On May 11, 2023, the U.S. Environmental Protection Agency (U.S. EPA) proposed regulations addressing greenhouse gas (GHG) emissions from fossil fuel-fired electric generating units (EGUs). The rulemaking includes changes to the current New Source Performance Standards (NSPS) for Greenhouse Gas Emissions for Electric Generating Units (40 CFR Part 60, Subpart TTTT), a newly proposed subpart for GHG emissions from Modified Coal-fired Steam EGUs and New and Reconstructed Stationary Combustion Turbine EGUs (40 CFR Part 60, Subpart TTTTa), and Emissions Guidelines (EG) for GHG from existing EGUs (40 CFR Part 60, Subpart UUUUb). Additionally, the proposal includes repealing the Affordable Clean Energy (ACE) rule, or Subpart UUUUa. The following includes a brief overview of the changes that U.S. EPA is proposing.

Revised NSPS TTTT

Subpart TTTT regulates GHG emissions from fossil fuel-fired EGUs and was initially promulgated in October 2015. U.S. EPA is proposing several editorial amendments and changes that are intended to update incorrect or outdated information and add compliance flexibility. Specifically, they would like to add compliance options for EGUs either serving a common electric generator or using a common stack and are soliciting comments for possibilities on how to achieve this. The preamble indicates that the final version of the rule may include language that allows the approval of alternative procedures. Finally, U.S. EPA added language stating that maintaining records of electric sales to demonstrate that a stationary combustion turbine meets the conditions for the heat input-based standard is required. Amendments to Subpart TTTT were proposed in 2018 that would have revised standards for new coal-fired steam generating units, but those amendments are not being finalized or addressed at this time.

New NSPS TTTTa

The required 8-year review of Subpart TTTT was completed, and it was determined there have been developments in available control measures for stationary combustion turbines. As a result, the creation of a new subpart, Subpart TTTTa, has been proposed. The subpart will regulate emissions from new and reconstructed stationary combustion turbines and “large” modifications to fossil fuel-fired steam generating units. Modifications to stationary combustion turbines and new or reconstructed fossil fuel-fired steam generating units are not addressed as there are not any changes qualifying as NSPS modifications to existing turbines or newly planned coal-fired steam generating units that were identified. Therefore, it was concluded that there was no need to propose standards for these situations.

New and reconstructed stationary combustion turbines (defined as constructed or reconstructed after May 23, 2023) have been subcategorized based on the “load” of the turbine and a best system of emissions reduction (BSER) determined for each. There are three subcategories that have been identified: (1) low load; (2) intermediate load; and (3) base load. The BSER identified for the ‘low load’ subcategory has a single phase, while the BSERs identified for the ‘intermediate’ and ‘base load’ subcategories have multiple phases with an extended timeline proposed for demonstrating compliance. The standards are included in the following table.

[1] Intermediate load turbines are those with net electric sales that exceed 20% and are less than a value that is calculated with the design efficiency and potential electric output of the turbine. U.S. EPA estimates that this upper limit will be between 33 – 40% for simple cycle combustion turbines and 45-55% for combined cycle combustion turbines.

[2] Base load turbines are those with net electric sales that exceed a value that is calculated with the design efficiency and potential electric output of the turbine. U.S. EPA estimates that this threshold will be between 33-40% for simple cycle combustion turbines and 45-55% for combined cycle combustion turbines.

The ‘intermediate’ and ‘base load’ phase one requirements to be a high-efficiency simple cycle or combined cycle turbine, and definitions for “best operating and maintenance practices” have not been included in the draft proposed rule language. However, U.S. EPA has provided context in the rule preamble and is soliciting comment on what aspects of these requirements to include. Additionally, they are proposing to define low-GHG hydrogen as hydrogen produced through a process that results in a GHG emissions rate of less than 0.45 kilograms (kg) of carbon dioxide equivalent per kg of H₂ [kg CO₂-e/kg H₂ (1 lb CO₂-e/2.2 lb H₂)] on a well-to-gate basis. This definition is consistent with the Inflation Reduction Act (IRA).

In addition to regulating new and reconstructed stationary combustion turbines, Subpart TTTTa specifies a standard for fossil fuel-fired steam generating units that undergo a “large” modification. This approach is like the existing Subpart TTTT, which defines a “large” modification as a modification that results in greater than a 10% increase in hourly emissions of CO₂. For these modified sources, U.S. EPA has proposed CCS with a 90% capture efficiency.

Repeal of UUUUa (ACE) and New UUUUb

When U.S. EPA establishes an NSPS for new sources within a specific category, it must also specify EG for existing sources, unless the pollutant is regulated under the National Ambient Air Quality Standards (NAAQS) program, Clean Air Act (CAA) section 108-110, or the National Emission Standards for Hazardous Air Pollutants (NESHAP) program. Individual state and tribal authorities then utilize the EGs to develop a state plan that must be reviewed and approved by U.S. EPA. When the original NSPS for GHG from EGUs was promulgated, the EGs for existing sources was proposed as Subpart UUUU. This subpart is also referred to as the Clean Power Plan (CPP). Subsequently, the U.S. EPA repealed the CPP and replaced it with the ACE rule (Subpart UUUUa). Although a series of District of Columbia (D.C.) Circuit Court and U.S. Supreme Court decisions impacted both the CPP and ACE rules and their embedded provisions, the result of the litigation was that the CPP remained repealed with the ACE rule in effect. U.S. EPA has since determined that the heat rate improvements required by ACE on their own do not qualify as BSER for existing sources, and additional standards are required. Therefore, with this action, they are proposing to repeal the ACE rule and create a new subpart, Subpart UUUUb.

The standards in Subpart UUUUb are split between existing fossil fuel-fired steam generating units and stationary combustion turbines. For existing fossil fuel-fired steam generating units (those constructed prior to January 8, 2014) that meet the general applicability criteria, U.S. EPA has proposed standards for subcategories of these units based on the fuel type and operating time horizon for coal-fired units and load level for oil and natural gas-fired units. These affected steam generating units must comply with the applicable standard by January 1, 2030. A summary of the proposed standards is included below.

For existing fossil fuel-fired stationary combustion turbines, U.S. EPA has limited its proposal to the largest and most frequently operated base load turbines. These are units greater than 300 megawatts (MW) with an annual capacity factor greater than 50%. The standards proposed for these types of turbines are identical to the second component of the standards proposed for new and reconstructed base load turbines. (90% CCS by 2035; or low GHG co-firing, achieving 30% co-firing by January 1, 2032 and 96% co-firing by January 1, 2038). Reference to a second, follow-up rulemaking was included in the preamble. This indicates that they may try to regulate the remaining smaller units, including both those that are frequently and less frequently used. However, with the proposed rule, there are no requirements that would be applicable to these types of turbines.

With the proposed compliance deadline longer than 16 months following the state plan submittal deadline, the U.S. EPA is also requiring that the plans include increments of progress deadlines for long-term and medium-term steam generating units as well as stationary combustion turbines. These include:

• Submittal of a final control plan;
• Completion of awarding contracts;
• Initiation of on-site construction or installation of emission control equipment;
• Completion of construction and/or installation;
• Commencement of permitting programs for pipeline construction;
• A report describing where CO₂ will be injected underground for sources that are applying CCS;
• A demonstration of available low-GHG hydrogen supply for sources that are implementing co-firing of low-GHG hydrogen; and
• Deadlines for final compliance

Further, for sources that are imminent-term, near-term, and medium-term steam generating units that will be shutting down, the EGs require establishment of milestones to hold owners and operators accountable to their shutdown plans. These include:

• Preparation and submittal of an initial milestone report;
• Annual milestone status reports;
• Final milestone report following closure; and
• Posting of milestone reports on publicly available Carbon Pollution Standards for EGUs website, established by owners and operations of affected EGUs.

Resources for Development of Plans for Existing Sources

State, tribal, and federal authorities are responsible for creating and submitting plans to establish emissions standards that align with the EGs for existing sources in the newly created Subpart UUUUb. The EGs include information that must be included in a plan submission. U.S. EPA has established criteria (presumptive standards) to determine whether plan requirements are equivalent to the proposed standards in the EGs. There are also guidelines for the types of information and evidence states must provide if they would like to apply a less stringent standard to a particular facility or type of facility, based on the remaining useful life and other factors (RULOF). These include the source’s age or physical limitations of installing emissions control equipment. Additionally, other options for state plans, including emissions averaging and trading, are allowed. Meaningful engagement with relevant stakeholders is required for plan development, including consideration of potential impacts and benefits to communities most affected by emissions from affected EGUs. The final plans are required within 24 months after the final EGs are published in the Federal Register, with a mandated compliance deadline of January 1, 2030. The compliance deadline is based on consideration of how long U.S. EPA anticipates it would take for operators to assess their affected EGUs and bring them into compliance.

What do I need to do?

The current unified agenda indicates a target date for a final rule of spring 2024 and in the preamble, U.S. EPA hinted at a June 2024 target for final promulgation of the EGs. State plans would be required within 24 months of this date, with an approximate deadline for those plans of June 2026. The comment period for the proposed changes ended on August 8, 2023. Therefore, as of publication of this article, the comment period will have recently closed. The U.S. EPA solicited comments on multiple aspects of the proposal. Considering this, and that over 1,000,000 comments were received, it is likely that the final rules will contain several changes from the draft texts included in the proposal.

There are various applicable compliance deadlines associated with the proposed rules, depending on whether the affected EGUs are new or existing, and whether they are steam generating units or combustion turbines. For stationary combustion turbines, the compliance deadline will also depend on whether the CCS or low-GHG hydrogen compliance options are selected. Additionally, compliance deadlines are among the many aspects of the proposal that the U.S. EPA has solicited comments on.. Therefore, the details are subject to change while they review and develop the final rules. However, affected entities should begin reviewing their fleet inventories and considering how promulgation of the proposed standards and compliance timelines will impact their long-term operational plans.

This article only provides an overview of some of the key changes associated with the proposed rules and is not a complete inventory of all of the requirements or revisions. If you have additional questions or would like to gain an understanding of how the new rules could affect your facility’s compliance program, please reach out to me at cward@all4inc.com. ALL4 is monitoring all updates published by the U.S. EPA on this topic, and we are here to answer your questions and assist your facility with any aspects of regulatory compliance.