GHG Mitigation under the Clean Air Act

PSD and Title V Permitting for Stationary GHG Sources

Rules Establishing General Program Requirements

The Prevention of Significant Deterioration (PSD) program is a Clean Air Act permitting program, which applies to new and modified major emitting facilities located in areas that have attained the National Ambient Air Quality Standards (NAAQS). The purpose of the program is to preserve air quality. One component of the program deals with emissions standards for stationary sources. Under sections 165 and 169 of the Clean Air Act, major sources subject to PSD regulation must meet the “best available control technology” (BACT) standard in order to receive a permit (referred to as a Title V permit). The BACT is set by the permitting authority (usually states) on a case-by-case basis. EPA can review and reject a state’s BACT determination (Alaska v. EPA).

Obama Administration (2009–2016)

Following the Supreme Court’s UARG opinion (see Utility Air Regulatory Group v. EPA in “Litigation” below), EPA published a proposed rule on October 3, 2016 to bring its permitting regulations in line with the opinion. 81 Fed. Reg. 68,110 (Oct. 3, 2016). The proposal would revise existing PSD and title V regulations to ensure that neither the PSD nor title V rules require a source to obtain a permit solely because the source emits or has the potential to emit GHGs above the applicable thresholds. The rule was never finalized.

In 2010 and 2012, EPA issued two final rules comprising the three-step implementation of the “Tailoring Rule.” The Tailoring Rule raised the GHG emission thresholds that determine when stationary sources are subject to PSD  or Title V permitting requirements. The first rule, published on June 3, 2010, finalized steps 1 and 2. 75 Fed. Reg. 31,514 (June 3, 2010). In the first step, the Tailoring Rule would only apply to sources already subject to PSD or Title V permitting based on other pollutants. The second step would phase in additional sources. The second rule, published on July 12, 2012, finalized step 3 of implementing the Tailoring Rule, under which EPA determined it would not lower the permitting applicability thresholds established in steps 1 and 2. 77 Fed. Reg. 41,051 (July 12, 2012). (See Utility Air Regulatory Group v. EPA in “Litigation” below.)

On December 29-30, 2010, EPA published a series of rules to ensure that every state has the authority to issue permits to large new and modified sources for GHG emissions beginning January 2, 2011. The final rule imposes a federal implementation plan (FIP) as early as December 23 on states that do not allow issuance of GHG permits or that have not modified their state implementation plans (SIPs) and relevant laws and regulations. EPA also narrowed SIP-approved Prevention of Significant Deterioration (PSD) programs to the GHG thresholds promulgated in the Tailoring Rule, ensuring that smaller sources do not need to obtain federal permits. Lastly, EPA narrowed SIP approvals to the Tailoring Rule thresholds for Title V programs in 33 states.

On December 13, 2010, EPA issued a final rule finding that the EPA-approved State Implementation Plans (SIPs) of 13 states were substantially inadequate to meet Clean Air Act (CAA) requirements because they did not apply PSD requirements to GHG-emitting sources. 75 Fed. Reg. 77,698 (Dec. 13, 2010). In addition, EPA issued a ‘‘SIP call’’ for each of these states, which requires the state to revise its SIP as necessary to correct the inadequacies.

  • Inadequacy of State Plans & Imposition of Federal Plans

On April 2, 2010, EPA issued a final rule, referred to as the “Timing Rule,” in which EPA determined that PSD and Title V permitting requirements would not be applied to GHGs until at least January 2, 2011. 75 Fed. Reg. 17,004 (April 2, 2010). The rule was part of a broader reconsideration of an EPA interpretive memorandum from December 18, 2008. (See Utility Air Regulatory Group v. EPA in “Litigation” below.)

Litigation

Challenge to Tailoring and Timing Rules - Utility Air Regulatory Group v. EPA

Twenty-seven cases challenging the 2009 GHG Endangerment Finding, Tailoring Rule, and Timing Rule were consolidated in Coalition for Responsible Regulation v. EPA. In June 2012, the Court of Appeals for the DC Circuit Court held that no petitioner had standing to challenge the Tailoring Rule or Timing Rule in addition to upholding the EPA’s endangerment finding and interpretation of the governing Clean Air Act provisions as unambiguously correct. On appeal in Utility Air Regulatory Group v. EPA, the Supreme Court largely upheld EPA’s approach, but held that the agency could not require GHG controls under the PSD program for sources not otherwise subject to PSD regulation.

EPA Analysis of UARG Decision on PSD Program:

New Source Review under the PSD Program

The Prevention of Significant Deterioration (PSD) program is a Clean Air Act permitting program, which applies to new and modified major emitting facilities located in areas that have attained the National Ambient Air Quality Standards (NAAQS). The purpose of the program is to preserve air quality. One component of the program deals with emissions standards for stationary sources. Under sections 165 and 169 of the Clean Air Act, major sources subject to PSD regulation must meet the “best available control technology” (BACT) standard in order to receive a permit (referred to as a Title V permit). The BACT is set by the permitting authority (usually states) on a case-by-case basis. EPA can review and reject a state’s BACT determination (Alaska v. EPA).

Obama Administration (2009–2016)

On November 19, 2024, EPA released a memorandum, Next Steps for Addressing Biogenic Carbon Dioxide Emissions from Stationary Sources. The document announces the steps that EPA plans to take regarding biogenic CO2 emissions in the context of EPA’s Clean Power Plan and the PSD permitting program. It also clarifies the steps that EPA is taking to continue advancing our understanding of the role biomass can play in reducing overall GHG emissions.

On July 20, 2011, EPA issued a final rule deferring, for three years, GHG permitting requirements for carbon dioxide emissions from biomass-fired and other biogenic sources. 76 Fed. Reg. 43,490 (July 20, 2011). This deferral was intended to allow the agency further time to investigate whether biomass burning is carbon neutral if the biomass is taken from sustainably managed forests. This decision was then to inform the EPA’s decision whether or not to require a permit under the PSD program. (See Center for Biological Diversity v. EPA in “Litigation” below.)

Litigation 

Challenge to 2011 Deferral - Center for Biological Diversity v. EPA

A challenge to EPA’s authority to exempt biomass burning and landfill sources filed by the Center for Biological Diversity ended with the D.C. Circuit Court’s vacating the Deferral Rule. The D.C. Circuit Court held that once the EPA made the endangerment finding for carbon dioxide the agency did not have the authority under the CAA to exempt major stationary sources from permitting requirements. The Court also acknowledged that the EPA commissioned study may find that biomass fuels are carbon neutral in which case the EPA’s decision to exempt biomass would be legitimate.

BACT Guidance

The Prevention of Significant Deterioration (PSD) program is a Clean Air Act permitting program, which applies to new and modified major emitting facilities located in areas that have attained the National Ambient Air Quality Standards (NAAQS). The purpose of the program is to preserve air quality. One component of the program deals with emissions standards for stationary sources. Under sections 165 and 169 of the Clean Air Act, major sources subject to PSD regulation must meet the “best available control technology” (BACT) standard in order to receive a permit (referred to as a Title V permit). The BACT is set by the permitting authority (usually states) on a case-by-case basis. EPA can review and reject a state’s BACT determination (Alaska v. EPA).

Obama Administration (2009–2016)

An EPA guidance document issued in November 2010, and revised in March 2011, provides information for permitting authorities and regulated entities concerning GHG emission controls in PSD and Title V permits. That guidance is supplemented by white papers specific to various stationary source types.

Guidance Documents:

Other Documents: