So I finally finished my article about the Environmental Protection Agency’s (EPA) plan to regulate under the Clean Air Act (CAA) greenhouse gas emissions from stationary sources. This is very timely given that agency published its final rule yesterday (and my deadline is this week).
Here’s a little bit of a snapshot of the GHG rule. EPA’s GHG pollutants by the way include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. This is compared to the usual CAA pollutants such as lead, sulfur dioxide and nitrogen dioxide. The CAA’s current default emissions thresholds for these pollutants are 100 and 200 tons/year (tpy).
So under the usual CAA, companies who want to build a facility or modify a facility need to obtain from state environmental agencies permits such as the New Source Review Prevention of Significant Deterioration (PSD) — which is a pre-construction review for environmental controls of new or exisitng facilities that would create a significant increase of a regulated pollutant; and the Title V operating permit.
Now, since the EPA knows that it will take billions of dollars and too much state resources to produce and review permits if the GHG emissions threshold will also be at 100 and 250 tpy, the agency formed a Tailoring rule where the emissions threshold will be different for GHG. The agency figured that between 75,000 and 100,000 tpy will be just right, and will therefore exclude GHG emissions coming small farms, businesses, and other small-to-mid-size facilities —FOR NOW.
Starting January 2, 2011, facilities that already were required to obtain permits for previously regulated pollutants under the CAA would need to report their GHG emissions in their PSD permit, and if these projects will have GHG emissions of 75,000 tpy or more on a CO2 equivalent basis, they would need to determine the Best Available Control Technology (BACT) for their GHG emissions.
By July 1, 2011, new construction projects that emit 100,000 tpy GHG emissions, as well as modification of existing facilities that increase GHG emissions by 75,000 tpy, will all be subjected to permitting requirements. The EPA estimates that 550 sources will need to obtain the title V permits for the first time due to their GHG emissions by next year. Around 900 permitting actions per year are expected.
The EPA plans to explore permitting programs for smaller sources by the end of April 2015, and said that it will complete another rule by April 30, 2016 that could involve smaller sources depending on their 5-year study.
So in a nutshell, large GHG emitters especially from industrial manufacturing that includes petroleum refinery, chemical production, cement factory, industrial waste facilities, etc, will have to get these new permits to construct and operate their facilities. Of course, this does not bode well for the manufacturing industry and complains that the EPA does not have the authority to even change the CAA rule much less regulates GHG under the CAA.
Here’s a statement from the National Petrochemical and Refiners Association(NPRA) and from the American Chemistry Council (ACC). One big problem for this, according to the ACC, is that state agencies will still be overwhelmed and could even change the thresholds themselves w/o any naysay from the EPA. Of course, come 2016, the rules can be changed again and even small businesses will have the probability of obtaining these GHG permits.
Chemical companies that the green blogger have talked to noted the difficulties that they will have to face if they want to construct new or modify existing facilities especially if the projects need to be finished in a timely manner to market opportunities.
An official from Dow Chemical noted that “the regulation will cause lengthy and burdensome permitting processes that can harm productivity, stifle innovation and lead to job loss. BASF said it could lead to less US investment especially as Asian competition have lower regulatory costs to deal with.
For now, small and medium-sized enterprises (SMEs) are exempted from this rule but an official from the Society of Chemical Manufacturers and Associates (SOCMA) noted that they will still have to monitor this activity given the potential change in GHG threshold levels in future regulations. SOCMA agreed with the other industry organizations that CAA is not the best tool vehicle for regulating GHG emissions.
“Many of our members are SMEs and they could face challenges ranging from increased capital costs to difficulty meeting compliance deadlines with limited staff,” – SOCMA.
Check out my full article on this issue from ICIS Chemical Business coming out on May 31.