U.S. EPA Proposes Expanded CSAPR FIP to Include Non-EGU NOX Sources

The U.S. Environmental Protection Agency (U.S. EPA) has signed a proposed Federal Implementation Plan (FIP) for 25 states for which it has not approved an ozone transport State Implementation Plan (SIP) for the 2015 ozone National Ambient Air Quality Standards (NAAQS). Ozone transport SIPs are required to address the “good neighbor” provision in the Clean Air Act, which prohibits a state from impacting downwind states’ ability to attain and maintain the NAAQS. With the proposed FIP, U.S. EPA is essentially expanding the previous Cross State Air Pollution Rule (CSAPR) to include more stringent requirements for electric generating units (EGUs) and to include (for the first time) ozone season nitrogen oxides (NO_X) emissions limits for certain non-EGU combustion sources.

The proposed rule establishes enforceable NO_X emissions limitations and compliance requirements (e.g., testing, monitoring, electronic reporting) starting with the 2026 ozone season for the following industrial source types: reciprocating internal combustion engines in Pipeline Transportation of Natural Gas sources; kilns in Cement and Cement Product Manufacturing sources; boilers and furnaces in Iron and Steel Mills and Ferroalloy Manufacturing sources; furnaces in Glass and Glass Product Manufacturing sources; and boilers in Basic Chemical Manufacturing, Petroleum and Coal Products Manufacturing, and Pulp, Paper, and Paperboard Mills. These requirements would apply to all existing emissions units and to any future emissions units constructed in the covered states after promulgation of the final rule. U.S. EPA is also requesting comment on whether to expand the non-EGU requirements to other significant sources of NOx emissions, such as municipal waste combustors. States will have the option to propose their own SIPs to address ozone transport and include a different approach than U.S. EPA has proposed in the FIP, but they would have to successfully demonstrate to U.S. EPA that their alternative approach would satisfy the good neighbor requirements and eliminate the state’s significant contribution to downwind nonattainment. The proposed requirements are summarized below.

Proposed Requirements for EGUs

Beginning in the 2023 ozone season, U.S. EPA is proposing to expand the CSAPR NO_X Ozone Season Group 3 Trading Program, further limiting NO_X emissions from EGUs during the ozone season (May 1 through September 30) within the borders of 25 states (Alabama, Arkansas, Delaware, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and Wyoming). With the Revised CSAPR Update, U.S. EPA is proposing to implement new features for the allowance-based trading program approach for EGUs, including requiring optimized and operating NO_X emissions control technology, establishing backstop daily emissions rate limits for most coal-fired units, and allowing for dynamic adjustments of States’ emissions budgets over time.

U.S. EPA evaluated the possibility of implementing NO_X emissions control technologies for existing EGUs for upcoming ozone season control periods. For the 2023 ozone season, U.S. EPA determined that the only feasible controls are fully operating existing selective catalytic reduction (SCR) and selective non-catalytic reduction (SNCR) controls, including optimizing NO_X removal by existing operational SCRs/SNCRs and turning on and optimizing existing idled SCRs/SNCRs. For the 2024 ozone season, U.S. EPA determined that installing state-of-the-art NO_X combustion controls is feasible. U.S. EPA determined that the earliest feasible timeframe for the installation of new SCR or SNCR would be for the 2026 ozone season and has proposed emissions reductions in line with the implementation of new control measures.

U.S. EPA is proposing to establish a backstop daily emissions limit of 0.14 lb/MMBtu for coal-fired steam units serving generators with nameplate capacities greater than or equal to 100 MW. The backstop emissions rates will first apply in 2024 for coal-fired steam units with existing SCR controls, and in 2027 for coal-fired steam units currently without SCR controls. Each ton of emissions exceeding a unit’s backstop daily emissions rate would incur a 3-for-1 allowance surrender ratio instead of the usual 1-for-1 allowance surrender ratio. Additional backstop provisions are proposed to prevent EGUs from contributing to an exceedance of the State’s assurance levels. These provisions are intended to incentivize and ensure that, on all days during the ozone season, EGUs with SCR controls are continuously operating and optimizing their controls and EGUs without SCR controls are optimizing their emissions performance. The timeline for implementing the daily average emissions rate provisions is:

• Provide for 2023 as a preparatory year to allow EGUs to focus on improving the average performance of SCR controls and the day-to-day consistency of performance, and to allow for EGUs that exhaust to common stacks with other units without SCR controls to install additional monitoring systems to determine the individual units’ NO_X emissions rates.
• Emissions limits would apply in 2024 for large coal-fired EGUs with installed SCR controls.
• Provide for 2023-2026 as an interim period for EGUs without existing SCR controls to complete SCR installations, navigate operations and monitoring, and train plant personnel.
• Emissions limits would apply in 2027 for large coal-fired EGUs without SCR controls.

U.S. EPA is not proposing to include universal SCR controls at gas-fired EGUs or to apply the daily emissions rate provisions to large gas-fired steam EGUs.

In addition to the preset emissions budgets for the 2023 and 2024 control periods, U.S. EPA is proposing to establish a dynamic budget-setting methodology for each future control period beginning in 2025. In the year before each control period, to accommodate an evolving EGU fleet composition, U.S. EPA will evaluate the latest available information for the composition and utilization of the fleet to incentivize EGUs to implement control optimizations, account for scheduled and unscheduled fleet retirements, include new EGUs, and address fleet operational and dispatch changes.

Proposed Requirements for Large Non-EGU Boilers

U.S. EPA is proposing to establish ozone season NOx emissions limits for industrial boilers 100 MMBtu/hr and greater that are fired by coal, oil, or gas and located at pulp and paper, chemical, petrochemical, and iron and steel facilities (NAICS 3221, 3251, 3241, and 3311) within 23 states (Arkansas, California, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia, Wisconsin, and Wyoming). U.S. EPA claims that cost-effective emissions reductions are available for these units (e.g., low NO_X burners or SCR for less than $7,500/ton). These boilers will not be included in the existing EGU trading program, but beginning on May 1, 2026, these units would be required to demonstrate compliance with the following NO_X emissions limits during ozone season using NO_X Continuous Emissions Monitoring Systems (CEMS) unless their emissions are 70 percent or less of the applicable emissions limit and an alternate monitoring approach has been approved by U.S. EPA:

• 0.20 lb/MMBtu for coal-fired boilers
• 0.20 lb/MMBtu for residual oil-fired boilers
• 0.12 lb/MMBtu for distillate oil-fired boilers
• 0.08 lb/MMBtu for natural gas-fired boilers

The emissions limits will apply at all times and the proposed averaging time for these emissions limits is 30 days. U.S. EPA does not define industrial boiler in the proposed regulatory language and does not address how multi-fuel boilers or biomass boilers that start up on oil or gas are covered. Comment is requested on whether other types of fuels should be covered and whether limited use units should be treated differently.

The proposed emissions limits are lower than the 40 CFR Part 60, Subpart Db emissions limits that would apply to a new or modified industrial boiler. Existing boilers may need emissions reductions of at least 60 percent to comply with the proposed limits. It is not clear whether an emissions control project involving SCR could be accomplished in the proposed amount of time, given current supply chain issues and permitting requirements. Electronic reporting will be required for performance test reports, performance evaluation reports, quarterly and semi-annual reports, and excess emissions reports using the Electronic Reporting Tool (ERT) and the Compliance and Emissions Data Reporting Interface (CEDRI).

Proposed Requirements for Other Types of Emissions Units in Non-EGU Industries

U.S. EPA is also proposing to establish ozone season NO_X emissions limits on sources other than boilers in several non-EGU industries that it believes to be significantly contributing to nonattainment or interfering with maintenance in downwind states. The non-EGU industries include engines at pipeline compressor stations, cement plants, iron and steel mills, and glass furnaces. The proposed FIP includes a “direct control” approach for each type of emissions unit and monitoring, testing, recordkeeping, and electronic reporting requirements similar to those for boilers mentioned above. Brief summaries of the proposed emissions limits for the selected process sources at non-EGU industries, excluding boilers, are provided below.

Pipeline Transportation of Natural Gas

The FIP proposal includes ozone season NO_X emissions limits for stationary, natural gas-fired, spark-ignited reciprocating internal combustion engines (RICE) within the Pipeline Transportation of Natural Gas industry with a maximum rated capacity of 1,000 horsepower (hp) or greater. The proposed engine NO_X limits are:

• Natural gas fired four stroke rich burn – 1.0 g NO_X/hp-hr
• Natural gas fired four stroke lean burn – 1.5 g NO_X/hp-hr
• Natural gas fired two stroke lean burn – 3.0 g NO_X/hp-hr

The proposed limit for natural gas fired four stroke, rich burn engines is based on the use of non-selective catalytic reduction (NSCR), with NO_X reductions of greater than 90%. The proposed limit for natural gas fired four stroke, lean burn engines is based on the use of SCR, with NO_X reductions of 50%. The proposed limit for natural gas-fired two stroke lean burn engines is based on retrofitting existing two stroke lean burn engines with layered combustion.

Compliance is proposed to be based on semi-annual NO_X performance testing in accordance with 40 CFR 60.8, monitoring of engine operation (hours) and fuel consumption, and continuous parametric monitoring systems (CPMS) to record engine operating parameters or control device parameters.

Cement and Concrete Product Manufacturing

The FIP proposal includes NO_X emissions limits on individual cement kilns that directly emit or have the potential to emit 100 tpy or more of NO_X, with emissions limits based on the configuration of the kiln. The proposed NO_X emissions are on a 30-operating day rolling average period production basis (lb NO_X/ton clinker). The proposed kiln NO_X limits are:

• Long wet kilns – 4.0 lb NO_X/ton clinker
• Long dry kilns – 3.0 lb NO_X/ton clinker
• Preheater kilns – 3.8 lb NO_X/ton clinker
• Precalciner kilns – 2.3 lb NO_X/ton clinker
• Preheater/Precalciner kilns – 2.8 lb NO_X/ton clinker

U.S. EPA is also proposing a cement plant-specific source cap limit in terms of tons of NO_X per day, calculated on a rolling 30-day basis. Compliance with kiln specific and plan specific limits would be required. The proposed limits all include post combustion NO_X control (e.g., SNCR) except for preheater and preheater/precalciner kilns. Compliance is proposed to be based on semi-annual NO_X performance testing in accordance with 40 CFR 60.8.

Iron and Steel Mills and Ferroalloy Manufacturing

The FIP proposal includes ozone season NO_X emissions limits for emissions units for “…each new or existing emissions unit at an iron and steel mill or ferroalloy manufacturing facility that directly emits or has the potential to emit 100 tons per year or more of NO_x, and to each BOF Shop containing two or more such units that collectively emit or have the potential to emit 100 tons per year or more of NO_x….” The proposed NO_X emissions limits are generally expressed on a 30-operating day rolling average production or heat input basis (e.g., lb NO_X/ton of steel, lb NO_X/MMBtu). The proposed NO_X emissions limits and bases for affected non-boiler units within the industry are:

• Blast furnace – 0.03 lb NO_X/MMBtu; reflects 50% control at blast furnace gas stoves achieved by burner replacement and SCR.
• Basic oxygen furnace – 0.07 lb NO_X/ton steel; reflects 50% control achieved by SCR/SNCR.
• Electric arc furnace – 0.15 lb NO_X/ton steel; reflects 25% control achieved by SCR.
• Ladle/tundish preheaters – 0.06 lb NO_X/MMBtu; reflects 40% control achieved by SCR.
• Reheat furnaces – 0.05 lb NO_X/MMBtu; reflects 40% control achieved by SCR.
• Annealing furnaces – 0.06 lb NO_X/MMBtu; reflects 40% control achieved by SCR.
• Vacuum Degasser – 0.03 lb NO_X/MMBtu; reflects 40% control achieved by SCR.
• Ladle Metallurgy Furnace –0.1 lb NO_X/ton steel; reflects 40% control achieved by SCR.
• Taconite Production Kilns – work practices and low NO_X burners; based on Minnesota Taconite FIP.
• Coke Ovens (charging) – 0.15 lb NO_X/ton coal charged; reflects 50% control achieved by SCR/SNCR.
• Coke Ovens (pushing) – 0.015 lb NO_X/ton coal charged; reflects 25% control achieved by SCR.

Compliance is proposed to be based on the installation of NO_X CEMS for each affected facility. For taconite production kilns, U.S. EPA proposes to require initial compliance tests to establish unit-specific NO_X limits.

Glass and Glass Product Manufacturing

The FIP proposal includes NO_X emissions limits for individual furnace units that directly emit or have the potential to emit 100 tpy or more of NO_X. The proposed NO_X emissions limits are generally expressed on a 30-operating day rolling average production basis (e.g., lb NO_X/ton of glass). The proposed NO_X emissions limits and bases for affected non-boiler units within the segment are:

• Container glass manufacturing furnace – 4.0 lb NO_X/ton glass; assumes post-combustion NO_X control (e.g., SCR, SNCR).
• Pressed/blown glass manufacturing furnace or fiberglass manufacturing furnace – 4.0 lb NO_X/ton glass; assumes post-combustion NO_X control (e.g., SCR, SNCR).
• Flat glass manufacturing furnace – 9.2 lb NO_X/ton glass; assumes post-combustion NO_X control (e.g., SCR, SNCR).

Compliance is proposed to be based on initial NO_X performance tests and the installation and operation of NO_X CEMS for each affected facility.

What Happens Now?

The proposed rule was signed on February 28, 2022 and has not yet been published in the Federal Register. A public hearing will be held within 15 days of publication and comments will be due 60 days from publication. The proposed requirements pose several questions and issues to comment on, including multiple items on which U.S. EPA has requested comment. ALL4 recommends that you reach out to your industry association to determine what issues they are including in their comments, and how you might contribute to their analysis. ALL4 is actively evaluating the proposal and the underlying technical information and will be developing technical comments for at least one association. Please reach out to any of the authors for additional information or technical assistance developing comments on the proposal.