Center Supports EPA Climate Change Rules

"Tailoring EPA to Fit You"
Published: Sep 1, 2010
By Robynn Andracsek, P.E., Burns & McDonnell and Contributing Editor

EPA’s “Tailoring Rule” is here. So are your obligations to comply with Prevention of Significant Deterioration (PSD) and Title V for your greenhouse gas (GHG) emissions. Let’s look at what the rule means for several permitting scenarios common in the power industry.

First, a few definitions. The Tailoring Rule measures greenhouse gas (GHG) emissions in terms of English short tons (2,000 lbs), not metric tons (2,204.6 lbs) of carbon dioxide equivalents (CO2e). Keep in mind that the GHG reporting rule and the international community use metric tons. CO2e is defined as the sum of CO2, methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6) emissions each multiplied by their global warming potential. Don’t rely on your GHG reporting rule calculations as the basis for your tailoring rule calculations as there are several significant differences.

Fugitive emissions must be included in your CO2e emissions for all sources. As with criteria pollutants (NO2, SO2, carbon moNOxide (CO), volatile organic compounds (VOC) and particulates) potential emissions of CO2e are used for PSD and Title V applicability. Here’s how the Tailoring Rule might be applied.

Example 1: Existing Synthetic Minor Peaking Plant: This facility has limits on emissions to keep it a minor source for PSD. It may or may not have a Title V permit. If the unit’s potential GHG emissions are above 100,000 tpy CO2e but its actual emissions will always be less than that, get a permit limit to keep your potential GHG emissions under 100,000 tpy CO2e. If actual GHG emissions are above 100,000 tpy CO2e, the facility will be “PSD major” for CO2e as of July 1, 2011. If you don’t have a Title V permit, you will need to get one. Keep in mind that any modifications that increase CO2e potentials by 75,000 tpy are subject to PSD for CO2e.

Example 2: Existing Base Load Plant: This facility is classified as PSD major for criteria pollutants and has actual CO2e emissions above 100,000 tpy (which makes it major for PSD for GHG emissions). Permits for modifications issued before Jan. 2, 2011 are not subject to GHG PSD. Permits for modifications issued between Jan. 2 and June 30, 2011 are subject to GHG PSD only if the modification also trips PSD for a non-GHG pollutant and has a potential increase of 75,000 tpy of GHG emissions.

Permits for modifications issued July 1, 2011 and later are subject to GHG PSD if the potential CO2e emissions increase is above 75,000 tpy, regardless of other pollutant increases.

Example 3: New Facility: Things get more complicated for new facilities (or those that were PSD minor but have become PSD major). The determining factors are the date of permit issuance and the date that construction starts. The table identifies key issues.



Other aspects are important to note. First, no provisions exist for pollution control projects. If you retrofit a control device and CO2e emissions are subsequently increased, GHG PSD is tripped. Second, biomass combustion and biogenic emissions are not exempt. Third, the PSD major source threshold for criteria pollutants is broken into “listed” sources (100 tpy) and non-listed sources (250 tpy). All sources are considered major at 100,000 tpy CO2e. Fourth, a facility classified as “PSD major” for NOx, is classified as “major” for all other PSD pollutants. As a result, a modification that increases SO2 emissions by more than 40 tpy is subject to PSD for SO2. Likewise, if you are PSD major for CO2e (≥100,000 tpy), then you are considered major for all criteria pollutants regardless of whether or not your PSD major source threshold was 250 tpy or 100 tpy. Fifth, Title V major facilities pay fees on emissions based on actual tons emitted (SO2, NOx, PM10, VOC, HAPs), capped at 4,000 tons per pollutant and at a default fee of $43 a ton. Fees are not assessed against CO and PM2.5. The default position for CO2e is that it is exempt from fees; however, each state has the option to include it in its fee assessment.

The transition period of incorporating CO2e into PSD is reminiscent of 1976 to 1979 when PSD was first enacted. Back then, the timing of when permit applications were submitted, when permits were issued, when construction started and when operation began was crucial in determining if PSD applied. The lesson is that each power plant needs to understand what its actual and potential emissions are at each step of the 2011 GHG PSD transition.

In summary, the Tailoring Rule maintains the tradition of regulatory confusion exemplified by the current PSD program.