-------
, j. Research Triangle Park, North Carolina 27711
\P
27
PN 110-88-06-27-095
MEMORANDUM
SUBJECT: "Grandfather!n'g" of Requiremepts for Pending SIP Revisions
FROM: Gerald A. Emison, Direct ^^..
Office of Air Quality Planning and Standards (MD-10)
TO: Director, Air Management Division . .
Regions I, III, IX
Director, Air and Waste Management Division
Region II
Director, Air, Pesticides and Toxics Division
Region IV, VI
Director, Air and Radiation Division
Region V
Director, Air and Toxics Division
Region VII, VIII, X
Recommendations for improving SIP processing generally at EPA were
presented to the Deputy Administrator and approved fully. It is the
intention of the Agency's management that the recommendations be imple-
mented promptly. 'This is being done by an Intra-Agency Work Group
composed of Headquarters and Regional Office persons. This memorandum
provides guidance on applying previously applicable standards to pending
SIP revisions where the relevant requirements have changed since the
state prepared the SIP submittal (i.e., "grandfathering").
In a number of cases, States have submitted SIP packages that were
consistent with the EPA "requirements" (i.e., standards, regulations,
policies, legal interpretations, guidances, and clarifications) in effect
at the time. As a result of processing delays and policy evolution, the
applicable requirements were revised before the proposed SIP change
received EPA approval. When the revised requirements did not contain an
appropriate grandfathering provision (e.g., a provision allowing SIP
packages to be acted upon based on the requirements, in effect at the time
of State adoption), SIP reviewers assumed that the appropriate action was
to disapprove the SIP revision and/or return it to the State for changes.
Not only can this delay rulemaking, but it also may be inequitable
and serve as an irritant to effective EPA/State/local agency cooperation.
Moreover, such action usually results in an ineffective use of resources
by the State and EPA. Consequently, we are today extending the concept
-------
of grandfathering contained in existing guidance (e.g., for modeling), as
described in the enclosure. It is the intent of EPA management that
grandfathering be applied where.it is warranted and appropriate. Today's
guidance was developed in conjunction with the Regional Offices and the"
Office of General Counsel. Vie believe that it deals with the equity
issue, will not have a noticeable environmental impact overall, will
strengthen the Agency's working relationship with its State and local
partners, and does not conflict with either the Clean Air Act or the
Administrative Procedures Act.
Attachment
cc: Air Branch Chiefs, Regions I-X
Regional Counsel (Air Branch Chiefs), Regions I-X
Don Clay
Alan Eckert
Mike Alushin
John Seitz
Robert Cahill
John Calcagni
Bob Wayland
Dick Wilson
Bill Laxton
Charles Gray
-------
bcc: Work Group Members
Jack Farmer
Rich Ossias
Peter Wyckoff
Bern Steigerwald
-------
GUIDANCE ON GRANDFATHERING OF
REQUIREMENTS FOR PENDING SIP REVISIONS
June 1988 f
Introduction
EPA is expanding its guidance on how to apply previously
applicable requirements in two general situations where the issue may
arise: (1) when new or newly revised "requirements" (i.e., standards,
regulations, policies, legal interpretations, guidances, or clarifications)
for SIPs are issued by the Agency and (2) when rulemaking action is taken on
a "SIP revision" (i.e., a State-specific EPA rulemaking under
the Clean Air Act). This guidance will be in effect for complete SIP
revisions submitted to EPA and for requirements issued and/or revised bv
EPA after today. In general, all SIP revisions submitted before today *
will continue to be reviewed based on EPA's current policy, which is to
decide each SIP revision based on the requirements in existence at the
time of EPA's rulemaking.
Grandfathering is not to be considered mandatory or automatic.
In determining whether grandfathering should apply, and what the appropriate
date should be, the decision maker should keep in mind the thrust of this
guidance, i.e., to honor good faith effort on the part of the State/local
agency submitting the revision, balancing equity with other-considerations.
This guidance expressly is not intended as a vehicle to allow circumvention
of tighter requirements or to facilitate the avoidance of difficult
decisions.
Legal Background
Whenever a new requirement is established by Congress (via statute)
or by EPA (via regulation or policy), it becomes generally applicable
unless the authority establishing the requirement provides otherwise.
When Congress enacts a new statute, it applies to all matters then pending
before an agency unless Congress specifically provides otherwise in the
statute. The Agency has no authority to grandfather any matter from the
new statutory requirements without explicit provisions in the statute.
i
When EPA issues new regulations, they are also generally applicable
unless the regulations themselves include grandfathering provisions. If
grandfathering provisions are not explicit in the regulations and absent
a contrary interpretation by the Agency, courts will apply the new rules
to matters pending before the Agency. Thorpe v. Housing Authority of
-------
Durham, 393 U.S. 268 (1969). However, an agency does have some
flexibility to provide grandfather!ng provisions in new regulations.
Generally, such provisions are appropriate where they meet a four-part
test. First, the new rule represents an abrupt departure from well-
established practice. Second, affected parties have relied on the
old rule. Third, the new rule imposes a large burden on those affected.
Fourth, there is no strong statutory interest in applying the new rule
generally. Sierra Club v. EPA, 719 F.2d 436 (D.C. Cir. 1982), cert. den.
468 U.S. 1204 (1984).In the past, EPA has generally included explicit
grandfathering provisions in new regulations where appropriate. Under
this guidance, EPA will affirmatively consider the need for grandfathering
provisions in all new regulations. .. •
An agency has very broad authority to decide how and when to issue
new guidance, since "as a purely legal matter guidance is not absolutely
binding on subsequent proceedings. Pacific Gas and Electric Co. v. FPC,
506 F.2d 33 (D.C. Cir. 1974). Historically, EPA has provided only limited
grandfathering from revised guidance. This document establishes a detailed
framework for grandfathering pending SIP revisions from all future EPA
requirements.
The Guidance
The following will be considered in deciding whether to apply grand-
fathering to an individual SIP revision and in developing appropriate
grandfathering provisions for each 'EPA SIP requirement:
A. General Guidance: A SIP revision generally will remain subject to the
requirements in effect either (a) on the date that the State adopts the
SIP revision (provided a complete, fully adopted revision is submitted
promptly, generally within 60 days of the adoption), or (b) on the date
that the USEPA proposes the SIP revision under the parallel processing
procedure. However, in specific cases, EPA will apply different dates as
appropriate (e.g., see memorandum, J. Tikvart to Regional Modeling
Contacts, January 2, 1985, concerning grandfathering modeling requirements).
A discussion of what constitutes a complete, fully adopted SIP revision is
found in the memorandum, G. Emison to Regional Air Directors, March 18,
1988. .
B. There are certain exceptions to the general grandfathering guidance:
1. Grandfathering should not be considered if the State has not acted
in good faith in preparing and submitting a SIP revision. For example,
an incomplete revision hurriedly submitted to avoid coverage under a new or
revised EPA requirement should not be grandfathered. Similarly, grand-
fathering should not be considered when a SIP revision is submitted
-------
substantially in excess of 60 days after State adoption as specified in
paragraph A.
2. Grandfather!ng of SIP revisions may not be appropriate or possible •'
when a court ruling has explicitly changed a current federal requirement
or has convinced.EPA that a previous requirement is no longer supportable.
Under these circumstances,-the Office of General Counsel (OGC), in consul-
tation with the Office of Enforcement and Compliance Monitoring (OECM)
and the Office of Air and Radiation (OAR), will define the limits of
the court's decision and how it may affect EPA's requirements-and SIP
revisions, including previously approved SIP revisions, pending SIP
revisions, and SIP revisions which are to be submitted in the future.
OGC will make its best effort to issue such an opinion within 60 days
from the date of the court's decision.
Based on this analysis, OAR will issue a decision on the appropri-
ateness of grandfathering and the continued use of the pre-court ruling
requirement on pending and future SIP revisions. This decision will
generally be issued within 90 days from the date of the court's decision.
OAR will also issue a decision on the appropriate action to take, e.g.,
notice of SIP deficiency or "no action" needed at this time, on previously
approved SIP revisions.
3. The Administrator may determine that grandfathering is not
appropriate under a certain new policy. He could conclude that the old
policy was ill-founded, or simply not wish to grandfather"due to the importance
of the new policy to EPA's programs. Where a new policy issued by
the Administrator specifically states that grandfathering is not appro-
priate or establishes a particular grandfathering provision that differs
from this guidance, such provisions would of course supersede this guidance.
4. Grandfathering of a particular SIP revision or requirement is
not appropriate if a decision to grandfather it would have an imminent
and substantial adverse environmental impact or could permanently foreclose
the continued use of the provisions and/or sanctions of Part D of the
Clean Air Act, e.g., changes in Section 107 designations or the full
approval of Part D plans, both of which may foreclose-the future use of
sanctions to assure the correction of any deficiency arising from the
change in EPA requirements.
5. Action on a SIP revision which comports with the revised require-
ments but not the original requirements may be based on the revised
requirements.
-------
6. If a SIP revision complies with the original but not the"
revised requirements, and such lack of compliance renders the SIP as a
whole substantially inadequate to assure the attainment and maintenance
of the National Ambient Air Quality Standards (NAAQS) under the revised ":
requirements, an individual analysis of the appropriateness of grand-
fathering under the four-part test established in the Sierra Club case
discussed above under Legal Background must be conducted. If the analysis
concludes that grandfather!ng of the particular SIP revision is appropriate,
action may be based on the original requirements. In such an event,
however, additional actions may be necessary depending upon the nature of
the SIP revision being considered.
a. For SIP revisions (e.g., variances and interim emission
limits) which would have an effective lifetime of 2 years or less from
the date of EPA final rulemaking, no additional action will generally be
taken, because of the length of time it would take for the State and EPA
to change the action to comport with the revised requirements. Any
subsequent requests for the continuation of grandfathering (i.e., beyond
the effective lifetime of the original SIP revision) should be rejected.
b. For SIP revisions which would otherwise have an effective
lifetime of greater than 2 years, other rulemaking actions will/be necessary
to assure that the SIP ultimately comports with the revised requirements.
(i) Elements in plans that have been "conditionally"
approved will be approved subject to the further condition that the
plan as a whole be corrected as necessary to assure full compliance with
all requirements of the Clean Air Act. For a discussion of EPA's original
policy on conditional approval, see 44 FR 20372 (April 4, 1979), 44 FR
38583 (July 2, 1979) and 44 FR 67182 (November 23, 1979).
(ii) Elements in fully approved plans will be approved with
the simultaneous issuance of a CAA Section 110(a)(2)(H) notice of deficiency.
Under either of these circumstances, the approval of the particular SIP
revision should contain a sunset provision that terminates the effectiveness
of the approval within a predetermined period, generally 2 years. In addi-
tion, the Region should make an affirmative effort to assure that the
timeframe (generally 2 years) for complete, fully adopted State rulemaking
action involved with either the notice of SIP deficiency or conditional
approval is strictly adhered to. If a State does not adhere to this
schedule, the Region will initiate appropriate steps to ensure ultimate
compliance, e.g., performance-based grant actions, sanctions, and EPA
promulgations.
-------
7. Certain classes of changes are only indirectly related to
attainment and maintenance of national ambient air quality standards.
Such changes may involve PSD/NSR rules, stack height provisions, permit
fees an'd similar generic requirements which are clearly not intended to
be permanently grandfathered. Changes of this type are to be handled as
described in paragraph 6 above. -
C. All new requirements issued by OAR or OGC will address their impact
on SIP revisions previously approved or pending, and SIP revisions to be
submitted in the future. New requirements will contain provisions incor-
porating the general grandfather!ng guidance (paragraph A above) whenever
appropriate and possible. Generally, changes in EPA's requirements will
have effective dates which are 60 days from the date of signature to allow
States to adjust their pending rulemaking actions before they are finally
adopted and submitted..- Longer effective dates should b'e used when the
changed requirements affect fundamental, long-term air quality strategy
development tools and the requirements of the chanae are resource inten-
sive.
D. SIP revisions framed to meet major requirements currently beina recon-
sidered by EPA or currently under litigation should proceed and wifl not
be held back from rulemaking until the issues are'decided. SIP revisions
approved under these circumstances will be addressed, if necessary as
described in paragraph B(6)(b) above for revised EPA SIP requirements and
by paragraph B(2) for requirements being changed because of court decisions.
E. Staff personnel making grandfather!ng decisions should coordinate with
Offices of Regional Counsel or OGC on application of this guidance as appro-
priate, especially in connection with the analysis required under paragraph
B(6) above.
F. Each Federal Register notice for action on a SIP revision will state
the rationale for which requirements were applied.
-------
UNIT.ED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
DATE.
SUBJECT:
FROM:
TO:
JI.IN12'380
Information Required in Federal Register Packages
Richard G. Rhoads, Director.
Control Programs Development Division (MD-15)
Director, Air and Hazardous Materials Division, Regions I-V, and VII
An April 29, 1980 memo from Walt Barber asked that all SIP
revisions dealing with S0? relaxations be submitted through the "sDec-ia:
action" procedures. The purpose of that request was to allow tne Agency
to more carefully scrutinize the nature of each relaxation and its
multi-regional impact. A copy of this memo is attached.
In order to allow us to assess the relative impact of each S0?
relaxation more accurately, I ask that the following information be
included in each action memo.
1. Plant name and location.
2. Size of the facility (including the number of boilers) expressed
in megawatts or Btu/hour firing capacity (design).
3. Amount, type, and sulfur content of actual fuel combusted
during the previous year.
4. The revised SO- emission limit, the existing SIP limit,
and the corresponding averaging times for these limits.
5. The "paper" as well as actual increase or decrease in emissions.
The calculations involved in determining the increase of emissions
should assume status quo operating conditions of the source. There is
no need to consider increased or decreased utilization of the source's
capacity.
In addition, because of the ongoing development of policy or, the
issue of good engineering practice (GEP) stack height, all Federal
Register packages addressing the stack height issue should be suDinizted
tr.rough the "special action" procedures. Furthermore, I ask that
your staff inform Bob Schell (629-5365) of my staff of any Federal
Register packages involving stack -height increases which are currently
under development and projected to be forwarded for 14-day review
within the next few weeks.
-------
The following information should'be included in each action memo
which involves increased stack height.
1. Height of the old stack as well as that of the new.
2. If GEP stack height is determined, the methodo.logy used to
determine it, and the stack height considered to be GEP.
Your cooperation and assistance in dealing with these sensitive
issues are greatly appreciated.
Attachment
cc: David Hawkins
Walt Barber
Mike James
Ed Reich
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
JUL 91992
MEMORANDUM
SUBJECT: Processing of State Implementati6n Plan.'(SIP)
Submittals x x/ /
FROM: John Calcagni, Director •'. '/i*"""*'
Air Quality Management Division, OAQP/S'"'(MD-15)
t
TO: Director, Air, Pesticides and Toxics '
Management Division,' Regions I and IV
Director, Air and Waste Management Division,
Region II
Director, Air, Radiation, and Toxics Division,
Region III
Director, Air and Radiation Division,
Region V
Director, Air, Pesticides, and Toxics Division,
Region VI
Director, Air and Toxics Division,
Regions VII, VIII, IX, and X
This memorandum provides guidance concerning the processing
of SIP submittals. In general, there are three situations that
can occur related to each required submittal: the State may fail
to submit the required plan, the State may make a submittal that
is not complete, or the State may make a complete submittal.
Once a State submits a SIP and the Environmental Protection
Agency (EPA) has determined that the submittal is complete, EPA
must either approve or disapprove the submittal within a
specified time period. However, if the State fails to make a
required submittal or mates a submittal that is determined tc be
incomplete, the sanctions and Federal implementation plan (FIP)
provisions of sections 179 and 110(c), respectively, will be
triggered. In addition, disapproval of a submittal also triggers
the sanctions and FIP provisions. These provisions are discussed
in further detail in this memorandum.
There are, however, three alternatives to full approval or
full disapproval of a complete SIP submittal: partial approval,
limited approval, and conditional approval. Each of these is
discussed in more detail below along with some guidance as to
when each might be used. In addition, Attachment l to this
-------
memorandum contains several examples of how these may be used
Attachment 2 "to this memorandum is a table that summarizes the
requirements discussed below.
Partial Approval/Pisapproval
Section 110(k)(3) of the amended Clean Air Act (Act)
addresses the situation in which an entire submittal, or a
separable portion of a submittal, meets all applicable
requirements of the Act. Where the entire submittal meets all
the requirements of the Act, EPA will fully approve the entire
submittal. In the case where a separable portion of the
submittal meets all of the applicable requirements, partial
approval may be used to approve that part of the submittal and
disapprove the remainder. It is important that the two parts of
the submittal be separable. By separable, EPA means that the
action it anticipates taking will not result in the approved
rule(s) being more stringent than the State anticipated. See
Bethlehem Steel Corp. v. Gorsuch. 742 F. 2d 1028 (7th Cir. 1984);
Indiana and Michigan Elec. Co. v. U.S. E.P.A., 733 F. 2d 489 (7th
Cir. 1984). For example, EPA cannot approve part, of a submittal
that specifies control measures and disapprove the part that
specifies the test methods associated with those control
measures. The EPA has frequently taken a partial approval
approach in the past to process groups of rules that are
submitted together. The EPA can approve some of the rules and
disapprove the rest as long as the rules that are disapproved do
not affect those that are approved. The disapproval of any part
of a required SIP submittal starts the clocks discussed above for
sanctions and FIP's.
Limited Approval/Disapproval
In some cases, a submittal may contain certain provisions
that meet the applicable requirements of the Act along with other
provisions that do not meet the requirements, and the provisions
are not separable. Although the submittal may not meet all of
the applicable requirements, EPA may want to consider whether the
subraittal as a whole has a strengthening effect on the SIP. If
that is the case, limited approval may be used to approve a rule
that strengthens the existing SIP as representing an improvement
over what is currently in the SIP and as meeting some of the
applicable requirements of the Act.
The Act does not expressly provide for limited approvals.
Rather, EPA is using its "gap-filling" authority under section
301(a) of the Act in conjunction with the section 110(k)(3)
approval provision to interpret the Act to provide for this type
of approval action.
-------
Through a limited approval, EPA would concurrently, or
within a reasonable time thereafter, disapprove the rule, under
the relevant provision(s) of Part D, for not meeting all of the
applicable requirements of the Act. As with the limited approval
action the limited disapproval is a rulemaking action, and it is
subject to notice and comment. Under section 110(k), EPA must
take final rulemaking action on SIP submittals within 12 months
of the date EPA determines the submittal is complete-or the
submittal is automatically deemed to be complete if EPA fails to
make a completeness determination. As a general matter, although
the statute directs EPA to act within that timeframe, EPA's
failure to finalize the disapproval portion of the action within
that 12-month timeframe will not affect the validity of any prior
or subsequent limited approval or limited disapproval.* The
EPA's failure to take action prior to the expiration of the 12-
month period could, however, subject EPA to a lawsuit to compel
such an action.
A key distinction between the limited approval and a partial
approval is that under a limited approval EPA's approval action
goes to the entire rule. In other words, although portions of a
rule prevent EPA from finding that the rule meets a certain
requirement of the Act, EPA believes that the rule,-v.as a whole,
strengthens the SIP. Therefore, EPA approves the entire rule—
even those portions that prohibit full approval. Likewise, when
EPA issues the limited disapproval, the disapproval-^applies to
the entire rule as failing to meet a specific requirement of the
Act. The rule remains a part of the SIP, however, under the
limited disapproval, because the rule strengthens the SIP. The
disapproval only applies to whether the submittal meets a
specific requirement of the Act and does not affect incorporation
of the rule into the approved, federally enforceable SIP.
The primary advantage to using the limited approval approach
is to make the State submittal federally enforceable and to
increase the SIP's potential to achieve additional reductions.
Therefore, limited approval should not be used to approve any
rule that is unenforceable for all situations—for example, a
rule that lacks a test method. These rules and any other rules
that do not have an overall strengthening effect on the SIP
should be disapproved. Limited approval can be used, however,
1 The March 22, 1991 memorandum from John Calcagni
discussed the potential impact of Abramowitz v. U.S. E.P.A.. 832,
F. 2d 1071 (9th Cir. 1988), on EPA's decision to split the
approval and disapproval portions of a limited approval. After
reevaluating that case, we believe it may have a narrower impact
than initially described and, therefore, generally would not
impact the timing of limited approval/disapproval actions.
-------
where the rule is unenforceable for some limited number of
situations but? is enforceable for the majority of situations, if
the rule, as a whole, strengthens the SIP.
The disapproval coinciding with (or following) the limited
approval also starts the sanctions and FIP clocks discussed
above. With the limited approval EPA may or may not have a
commitment from the state to correct the deficiency. The EPA may
choose to use the limited approval approach (instead of
conditional approval) in the case where the State has submitted a
commitment as part of a rule but EPA has reason to believe that
the State will not be able to meet the commitment (as discussed
below). Where a limited approval/disapproval approach is taken,
the notice of proposed rulemaking (NPR) should clearly identify
which requirements have not been met and what action would be
required on the part of the state to meet those requirements.
Conditional Approval
Under section 110(k)(4) of the Act EPA may conditionally
approve a plan based on a commitment from the State to adopt
specific enforceable measures within 1 year from the date of
approval. If the State fails to meet its commitment within the
1-year period, the approval is treated as a disapproval. We
expect that conditional approvals will be used only in rare
situations that merit special consideration. We will evaluate
specific types of SIP submittals [e.g., reasonably available
control technology (RACT) catch-ups, particles with an
aerodynamic diameter less than or equal to a nominal 10
micrometers (PM-10) SIP's] to determine whether certain elements
of that type of submittal, or that type of submittal as a whole,
merit conditional approval. For this reason and to ensure
consistency, Regions should not use conditional approvals without
input from Headquarters as to whether such an approach is
appropriate. Furthermore, as any statutory dezidline approaches,
we may issue guidance regarding the appropriate use of
conditional approval with respect to that specific requirement.
Once a determination has been made that a specific type of
submittal can be considered for conditional approval, Regions
must make a determination of whether an individual State
submittal should be conditionally approved. The first
consideration should be whether the State has made (or agrees to
make) a commitment to adopt specific enforceable measures within
1 year of EPA approval. The commitment must be made in writing
-------
by the party responsible for adopting the specified measures
before the plan is conditionally approved, and the commitment
must be submitted by the State.2
In addition, to the extent that the commitment materially
alters the existing rule (in respects that the public could not
reasonably have anticipated would result from the public review
of the existing rule), or is a commitment to adopt an entire rule
or set of rules, the commitment must be a SIP revision submittal
by the State. In many cases, the determination of whether the
commitment materially alters the underlying rule may be based on
whether a similar issue was raised during the earlier State
proceedings on the submitted rule. In general, each commitment
will need to be examined to determine whether it materially
alters the submitted rule. As with any SIP revision, in order
for EPA to accept the commitment as a SIP revision, the State
must have provided notice and public hearing on the submitted
commitment. However, EPA has the discretion to parallel process
commitments and in limited circumstances may propose conditional
approval of the commitment and allow the State process to proceed
on a parallel track.
As a general matter, the greater the extent to which a
submittal is lacking in important plan elements, the less
appropriate the use of conditional approval may be. It should be
noted, however, that there ma^ be circumstances under which EPA
would accept a SIP revision consisting of a commitment only
(without specifically adopted rules) as a candidate for
conditional approval. In such cases, the commitment should also
be accompanied by a work plan detailing any specific measures to
be adopted, the steps that will be taken to adopt the measures,
and the schedule for adoption of those measures. As stated
earlier, a submittal that consists entirely of a commitment will
be considered a SIP revision that is subject to the State process
for submitting SIP revisions, e.g., notice and a public hearing.
Where the submittal contains specifically adopted rules that
need some revisions or corrections to be fully-approvable, the
commitment may not need to be as comprehensive. The commitment
should, however, be as explicit as possible concerning the
measures that will be adopted, the steps that will be taken to
adopt the measures, and the schedule for adoption of those
measures.
2 Although the commitment must identify the measures to
be adopted and contain a schedule for adopting such measures,_ it
is not necessary for the commitment itself to be enforceable in a
State court.
-------
Because the conditional approval relies on a commitment from
the State, EPA would need some level of confidence that the state
would be able to meet such a commitment. In making a
determination as to whether a State could reasonably be expected
to meet its commitment, EPA would need to consider a number of
factors such as:
the amount of technical work necessary for'the measures
to be adopted;
whether adoption of the measures is expected to be
controversial;
the average length of the State adoption process;
how far along in the process the State is; and
the State's past track record.
It should be noted that these are only some of the factors that
should be considered. Each Region, in making a determination
regarding the credibility of the State's commitment, may have to
look at a number of other factors. The Region should clearly
explain, either in the NPR or in a technical support document,
the rationale for these determinations.
In addition to the determination of whether the State's
commitment is credible, the Region must make a determination as
to whether it is appropriate to conditionally approve a revision
on the merits of that revision. Conditional approval might
typically be used in the same types of situations as the limited
approval. As with the limited approval, one of the main
advantages of the conditional approval approach is to make the
State submittal (where the submittal contains control
requirements and not just a commitment to adopt enforceable
measures) federally enforceable and to increase its potential to
achieve additional reductions. Because the conditionally
approved submittal will become a part of the SIP, the Region
should be certain that the approval of the commitment will not
weaken the existing SIP. The Region may also want to consider
when the plan (or plan element) that has been submitted was due.
The NPR for a conditional approval should clearly identify
which requirements are the subject of the commitment and,
therefore, have not been met. In addition, both the NPR and the
State's commitment should clearly identify what action is
required on the part of the State. Unlike the limited
approval/disapproval, the conditional approval does not
immediately start the sanctions and FIP clocks. These clocks
start if and when the approval is converted to a disapproval.
There are at least two ways that the conditional approval
-------
may be converted to a disapproval.3 First, if the State fails
to adopt and submit the specified measures by the end of 1 year
(from the final conditional approval), or fails to submit
anything at all, EPA will have to issue a finding of disapproval
but will not have to propose the disapproval. That is because in
the original proposed and final conditional approval, EPA will
have provided notice and an opportunity for comment on the fact
that EPA would directly make the finding of disapproval (by
letter) if the State failed to submit anything.4 Therefore, at
the end of 1 year from the conditional approval, the Regional
Administrator (RA) will send a letter to the State finding that
it had failed to meet its commitment and that the SIP submittal
is disapproved. The 18-month clock for sanctions and the
2-year clock for a FIP start as of the date of the letter.
Subsequently, a notice to that effect will be published in the
Federal Register, and appropriate language will be inserted in
the Code of Federal Regulations, similarly, if EPA receives a
submittal addressing the commitment but determines that the
submittal is incomplete, the RA will send a letter to the State
making such a finding. As with the failure to submit, the
sanctions and FIP clocks will begin as of the date of the finding
letter.
Second, where the State does make a complete submittal by
the end of the 1-year period, EPA will have to evaluate that
submittal to determine if it may be approved and take final
action on the submittal within 12 months after the;date EPA
determines the submittal is complete. If the submittal does not
adequately address the deficiencies that were the subject of the
conditional approval, and is therefore not approvable, EPA will
have to go through notice-and-comment rulemaking to disapprove
the submittal. The 18-month clock for sanctions and the 2-year
clock for a FIP start as of the date of final disapproval. If
EPA determines that the rule is approvable, EPA will propose
approval of the rule. In either instance, whether EPA finally
approves or disapproves the rule, the conditional approval
remains in effect until EPA takes its final action.
3 It should be noted that this disapproval can be a
limited approval/disapproval. In some cases, the Regions may
want to use such an approach to retain the enforceability of
control measures. The NPR should indicate if this approach is
planned.
* To provide for this contingency, in the final
conditional approval, EPA would need to provide, for example, "If
the State fails to make a submittal or makes only an incomplete
submittal during the time period for submittal of the rule, EPA
will issue a letter to the State which converts the conditional
approval to a disapproval."
-------
8
It should be noted that EPA will conditionally approve a
certain rule only once. Subsequent submittals of the same rule
that attempt to correct the same specifically identified problems
will not be eligible for conditional approval.
and FTP Requirements
Actions that Trigger the Sanctions and FIP Requirements
The actions EPA has the authority to take under the
sanctions and FIP provisions of the Act correspond to the
different steps EPA must follow as it reviews and processes SIP
submittals. As discussed previously, the Act in section 179s
requires EPA to impose sanctions based on four types of actions
(findings') provided in section 179(a):
(1) a finding that a State has failed to submit a SIP, a
SIP element,7 or has submitted a SIP or SIP element
that does not satisfy the completeness criteria;
(2) that EPA disapproval of a SIP submission for a
nonattainment area based on its failure to meet one or
more elements required by the Act;
(3) a determination that the State has not made any other
submission, has made an inadequate submission (as
required by the Act) , or that EPA disapproves such a
submission; or
(4) a finding that a requirement of an approved plan is not
being implemented.
5 section 110(m) grants EPA broad authority to apply
either sanction listed in section 179(b) » . . . at any time (or
at any time after) a finding . . ." under section I79(a) with
respect to any portion of the State, with certain exceptions.
This memorandum is intended to address the application of
sanctions under section 179. The section 179 sanctions apply
only to the area for which a finding has been made.
« Although subsections (l)-(4) refer to findings,
determinations and disapprovals, for_simplicity these four
actions will be referred to as "findings.
7 Since EPA does not intend to issue a list of such
elements per se, to ensure that such findings are consistently
applied findings of failure to submit SIP elements should be
decided on a cale-by-case basis in conjunction with Headquarters
The basis for the finding should be clear and well-supported.
-------
Under section 110(c)(l), EPA is required to promulgate a FIP
based on two types of findings:*
(1) a finding that a State has failed to make a required
submittal or that a submittal does not satisfy the
minimum completeness criteria established under section
110(k)(l)(A), or
(2) the EPA disapproval of a SIP submittal in whole or in
part.
The Sanctions and FIP Clocks
Although EPA may make any of the findings discussed above to
trigger the 179(a) sanctions and 110(c)(l) FIP requirements,
these findings do not require the immediate imposition of
sanctions or promulgation of a FIP. Instead the Act provides a
"clock" for sanctions and FIP's. For plan submittals required
under Part D or in response to a SIP call, section 179(a) allows
for up to 18 months for the State to correct the deficiency that
is the subject of a finding or disapproval before EPA is required
to impose sanctions. Section 110(c)(l) provides for up to
2 years for the State to correct the deficiency and for EPA to
approve a new submittal before EPA is obligated to promulgate a
FIP.
The Administrator has delegated the authority to make
findings of failure to submit to the RA's. The findings are made
via letters from the RA's to State governors or other State
officers to whom authority has been delegated. The letter itself
triggers the sanctions and FIP clocks. For disapprovals, the
Federal Register notice in which EPA takes final action triggers
the sanctions and FIP clocks. Findings of nonimplementation have
traditionally been processed as rulemaking actions through
Headquarters. The sanctions clock will start when EPA makes a
finding of nonimplementation in the Federal Register after
soliciting comment on the proposal (the FIP clock is not
triggered by such a finding). Although the findings of failure
to submit and SIP disapproval start both the sanctions and FIP
clocks, what is required'to stop the clocks differs; therefore,
they are discussed separately. Note that in some cases the
sanctions clock may be stopped while EPA remains under an
obligation to promulgate a FIP.
Since the deficiency is a failure to implement after a State
has submitted a plan and EPA has approved it, it is unnecessary
for this finding to trigger a requirement that EPA develop the
required rule (i.e., prepare a FIP) and section 110(c)(l) does
not require it. %
-------
10
Sanctions Clock
Under section 179(a), in order to stop the sanctions clock,
the State must correct the "deficiency" prompting the finding.
The EPA must apply one of the two sanctions available under
section 179(b) within 18 months after the date of the finding and
both sanctions at 24 months, unless the deficiency has been
corrected. Section 179(a) also requires EPA to apply both
sanctions after 18 months if EPA finds a lack of good faith on
the part of the State.
Attachment 3 provides seven scenarios illustrating how the
sanctions clock operates, including examples of what constitutes
a deficiency correction (and hence a stopping of the clock).
In brief, for purposes of the sanctions clock, findings of
failure to submit plans or complete plans are corrected when EPA
finds the submittal complete' [although the FIP clock is still
runninq (see FIP clock discussion)] and disapprovals are
corrected when EPA takes final rulemaking action approving the
clan In addition, findings of nonimplementation are corrected
when*EPA makes a finding in the federal Register that the State
is now implementing that provision.
FTP Clock
Under the FIP provisions, either a SIP must be approved or a
FIP must promulgated within 2 years of one of the two findings
discussed above. In other words, EPA must approve the State
submittal in order to stop the FIP clock. Where the sanctions
and FIP clocks were started by EPA disapproval of a plan, the
clocks will run concurrently. In this case, to correct the
deficiency for purposes of the sanctions clock, the State must
make a submittal which EPA finds approvable. Such a
determination is not made until EPA issues a final approval of
the plan. Final approval of a plan is also what is needed to
stop the FIP clock. Attachment 3 provides seven scenarios of how
the FIP clock operates.
Where EPA made a finding of failure to submit and
bseauentlv finds that the State has made a complete submittal
r ?he Dlan or plan element that was the subject of the finding,
the letter that makes the finding of completeness will notify the
State that the sanctions clock is stopped as of the date of that
letter The Region should periodically announce any such
findings that represent corrections of failure to submit in the
Federal Register.
-------
11
Available Sanctions
For plan subraittals required under Part D or in response to
a SIP call, if the State does not correct the specific deficiency
within the 18-month period allowed under section 179(3), EPA must
apply at least one of the two sanctions available under section
179(b)10 as described:
(1) Highway funding sanctions. The EPA may impose a
prohibition on the approval by the Secretary of
Transportation of certain projects, or the awarding of
certain grants.
(2) Offset sanctions. A ratio of at least 2-to-l will be
required for emissions reductions within the
nonattainment area to offset emissions from new or
modified major facilities (as required under section
173).
Regions should determine which of the sanctions will be applied
at the 18- and 24-month milestones on a case-by-case basis. As
discussed previously, EPA must apply both sanctions at the
18-month mark if it finds there is a lack of good faith effort.
Such a determination should be made on a case-by-case basis in
consultation with Headquarters. In addition, once one of the
sanctions has been imposed, EPA must impose the second sanctions
if the deficiency has not been corrected within 6 months
(regardless of the State's efforts). Headquarters will issue a
proposal of the sanctions and the Regional Office will issue the
final rule imposing sanctions.
Conclusion
General comments on this memorandum should be directed to
Pam Johnson of the Regional Operations Branch at (919) 541-5270.
Comments related specifically to ozone or carbon monoxide should
be directed to Carla Oldham at (919) 541-3347. Comments related
to particulate matter, sulfur dioxide, or lead should be directed
to Chris Stoneman at (919.) 541-0823.
cc: Regional Air Counsels, Regions I-X
Chief, Air Programs Branch, Regions I-X
Jane Armstrong, OMS (Ann Arbor)
William Becker, STAPPA/ALAPCO
Denise Devoe, OAQPS (ANR-443)
10 In addition, section 179(a) provides for an air
pollution grant sanction that applies to grants EPA may award
under section 105. However, since it is not a sanction provided
under section 179(b), it is not one of the sanctions EPA must
impose after the*18-month period.
-------
12
Tom Hellas, AQMD (MD-15)
Bill Laxton, TSD (MD-14)
Ed Lillis, AQMD (MD-15)
Rich Ossias, OGC (LE-132A)
Joe Paisie, AQMD (MD-15)
John Rasnic, SSCD (EN-341W)
John Seitz, OAQPS (MD-10)
Paula Van Lare, QMS (ANR-445)
Lydia Wegman, OAQPS (MD-10)
-------
Attachment 1
Example 1
A State submits a SIP revision containing four rules: (1)
control requirements for bulk gasoline plants, (2) control
requirements for gasoline dispensing facilities (Stage I), (3)
leak detection requirements for gasoline tanks trucks, and (4)
test methods that apply to these three rules. The EPA review of
the rules shows that all of the rules except the Stage I rule
meet the applicable requirements of the Act. The Stage I rule
fails to require submerged fill loading for all storage tanks.
This is inconsistent with EPA's RACT guidance and the State has
failed to propose an alternative that it has demonstrated is RACT
for the applicable sources.
partial Approval
Under the partial approval option, EPA can approve the rules
for bulk terminals and tank truck leaks, approve the test
methods, and disapprove the stage I rule. These rules are
separable from the Stage I rule. Disapproval of the Stage I rule
does not affect the stringency of the other three rules.
Therefore, the other three rules may be approved under this
provision. However, the submittal as a whole would only be
partially approved.
Limited Approval of Staae I Rule
Under the limited approval approach, EPA could approve the
Stage I rule as being an improvement over what is currently in
the SIP and, at the same time or within a reasonable time after
the approval (but no later than 12 months after the submittal is
complete), disapprove the rule because it does not represent
RACT. The sanctions and FIP clocks would start upon the final
disapproval of the rule.
Conditional Approval
Alternatively, EPA could conditionally approve the Stage I
rule if the State committed to revise the rule, within 1 year of
the conditional approval, to require submerged fill loading. If
the State then failed to make such a revision, EPA would issue a
finding converting the conditional approval to a disapproval.
Example 2
If in example 1 the first three rules (containing control
requirements) are all approvable but the fourth (containing the
test methods) is either deficient or has not been submitted, then
the submittal would have to be handled differently. Because a
test method is critical in determining the stringency of a
control requirement and is needed for the requirements to be
enforceable, these rules cannot be considered separable and,
therefore, partial approval would not be an option. In addition,
because the control requirements will not be enforceable without
a test method, it would not be appropriate to use either the
limited or conditional approval approach.
-------
Example 3
A State submits a SIP revision that contains four PM-10
rules, two for controlling emissions of fugitive dust and two for
the control of .residential wood combustion. The rules represent
reasonable available control measures (RACK) and include (1)
paving or stabilizing unpaved roads, (2) developing a traffic
reduction plan for unpaved roads, (3) a mandatory episode
curtailment program for residential wood combustion, and (4)
encouraging changeover to new source .performance standards and
wood stoves. The third rule is deficient in that it .does not
provide a communication strategy on which the curtailment program
is dependent.
Partial Approval
The EPA may approve the three rules which satisfy RACK but
disapprove the episode curtailment program as failing to meet the
RACM requirement. These rules are separable because disapproval
of the curtailment program will not have any effect on the
stringency or enforceability of the remaining rules.
Approval
The EPA may approve the episode curtailment plan as
strengthening the SIP by providing enforceable measures in a SIP
which currently has no curtailment program. At the same time or
within a reasonable time after the approval (but no later than 12
months after the submittal is complete), EPA must disapprove the
rule as not representing RACM. Final disapproval of the rule
would start the sanctions and FIP clocks.
Conditional Approval
The EPA may conditionally approve the rule if the State
submits a commitment to submit a revised rule within 1 year of
the approval. If the State then failed to make such a revision,
EPA would issue a finding converting the conditional approval to
a disapproval.
-------
4J
C
O
X
U
•0
4J
4-)
tn
-H
C
0
JC
4J
C
0
CU ^4
H4J
CO CO
(0
4J
C,
0
6
0
•H
3
4J cr
O 0
< «
4J
C
0
£
•H
£
£
O
0
>t
4J
•H
•H
•rH
Q
(0
^1
(C
a
0)
•H
(0
o
a
a
f^
.H 0
•c 0 A e
O 0 0 rtJ 0
4J > E O >J
O -H -H
4J to 4J 'H 3
tt a w «H a cr
(0 Oi 3 iH CU 0
O. <0 £ eO <0 Vi
4J
c
0
£
4J >i
-H i-l
E (0
E W
0 W
O 0)
o
o a
c c
0
.Q
4J
W O
3 «H
E -2
(C
in s-j
OJ (C-
3 a
^H
(0
4J
J_(
fl3
CU
(0 4J
0 0 C
£ rH 0
4J J3 £
O O (0 0
C 4J Ok
•H -H
W 0 »H 3
0 > -HI a cr
O (0 •—*) CXi 0
•a £
c
0
£
4J >i
-H J-l
£ (0
£ M
O W
O 0
O
O 0
C C
0
W r-H
•H ja
<*-! It]
4-1 0 ^ k
C (0 (0
0 c 4-1 a
•H O 4J 0
O -H -H W
-H 4J g
*M M aQ 4-J
0 O 3 O
n a w c
TJ
QJ
4-1
•H
e
-H
•J
W4J
(0 W
3 C
«H e 0
4J 0 4J CU
•H O C M
E JS 0
J3 3 k 0
3 4J £
ffl <0 (0 4J
4J W
0 4-1
0 0 C
£ «H 0
4-1 ja E
O O (00
C 4-> U U
•H -H
(00 iH 3
0 > »H| Q. CP
O <0 fHI Pt Q)
•O £ <0| 10 k
c
-H
J2
4J
4J -H
W O 5
3 4J
£ 4J
4J ' ^
0 -H Q) (0
4J £ k 0
ITJ E k >,
4J 0 O
W O O H
0
W -f
•H .Q
M-i (0
4-) O «-! k
C (0 (0
0 c 4J a
•H O 4J 0
O -H -H W
-H 4J E
0 O 3 O
•a a w c
,H
-------
Attachment 3: Sanctions and FIP Clocks Scenarios
/
scenario l: The EPA receives a SIP and finds it incomplete
SzfisnatJl — .prior to the statutory due date of the SIP.
Althouqh a finding that the State submitted an incomplete
SIP is one of the section 179 (a) findings, the sanctions and FIP
clocks will not begin to run until after a submittal is due.
Thi?is because thl finding must be based on the failure to
submit a complete required SIP or SIP element and the submittal
IT not required until it is due under the statute. If a SIP
•submitteHrior ™ a due date is still incomplete by the due
laSfthWEPA will notify the State by letter that the plan
remainsincomplete and that the 18-month sanctions clock and the
2-year FIP clock have started.
2- The EPA receives a SIP and finds it incomplete on
-4. o^eafter the statutory due date of the SIP.
if EPA receives a SIP and finds it incomplete pursuant to
section 110 (k) on or after the statutory due date of the SIP,
?h*n as in scenario 1, the State has failed to make a complete
su^mit"l unler^eSioA 179(a). The EPA will notif y the State by
letter that the plan is incomplete and that the 18-month
sanctions clock and the 2-year FIP clock have started.
3: The EPA receives no submittal at the due date.
Tf FPA receives no submittal from a State to meet a
statutory due date, then it may make a finding of failure to
lubmitunder section 179(a)(l), triggering the 18-month sanctions
clock and the 2-year FIP clock.
scenario 4- After the due date, EPA receives a SIP for which
Scenario 4. AI Qriginally made a finding of failure to submit.
unon receiving the plan, the sanctions clock will continue
to running the completeness review and be stopped if EPA finds
the Plan complete and continue if EPA finds the plan incomplete.
I? the ?8 months elapse during the time EPA is doing its
cUfeteness review.1^i^^Ii-S^I^{^ ^^
Siofto Ihe States su£mit?al, the sanctions will remain in
jplace untU EPA determines the submittal complete.
The FIP clock continues to run while EPA makes its
completeness determination.
scenario 5- The EPA originally makes a finding of failure to
Scenario b. submit/ tnen receives a SIP, finds it complete,
but disapproves it in final rulemaking.
Upon a determination that the SIP is complete, the State
!2e *hP deficiency that prompted the finding of nonsubmittal
andr|ne sanctions ceioclstoPsP Anew sanctions clock will start
-------
upon the final SIP disapproval rulemaking. The new sanctions
clock will not stop until EPA has taken final action to approve
the revised SIP submittal.
Even after the submittal is determined to be complete, EPA
remains under obligation to promulgate a FIP. Therefore, the
disapproval of the SIP does not start a new FIP clock.
scenario 6; The EPA originally makes a finding of failure to
submit, then receives a SIP, finds it complete,
and approves it in final rulemaking.
Upon a determination that the SIP is complete, the State
corrects the deficiency prompting the finding of nonsubmittal and
the sanctions clock stops. The EPA remains under obligation to
promulgate a FIP until EPA takes final rulemaking action to
approve the SIP.
Scenario 7; The EPA finds that a State has failed to implement
a SIP or SIP provision.
The EPA will make a finding of nonimplementation in the
Federal Register after soliciting comment on the proposal. The
sanctions clock will start upon EPA taking final action and stop
when EPA makes a finding in the Federal Register after notice-
and-comment rulemaking that the State has corrected the
deficiency that prompted the finding. A finding of
nonimplementation does not start a FIP clock.
-------
REFERENCES FOR SECTION 9.5
-------
•fjf.^ff,- -
Thursday? ;
April 16, 1992
Part 111
Environmental
Protection Agency
40 CFR Part 52
State Implementation Plans; General
Preamble for the Implementation of Title
I of the Clean Air Act Amendments of
1990; Proposed Rule
£e~
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
JUL 91992
MEMORANDUM
SUBJECT
FROM:
TO:
Processing of State Implementati6h Plan."tSIP)
Submittals
John Calcagni, Director-'- '.Jr^ .
Air Quality Management Division,
Director, Air, Pesticides and Toxics
Management Division, Regions I and IV
Director, Air and Waste Management Division,
Region II
Director, Air, Radiation, and Toxics Division,
Region III
Director, Air and Radiation Division,
Region V
Director, Air, Pesticides, and Toxics Division,
Region VI
Director, Air and Toxics Division,
Regions VII, VIII, IX, and X
This memorandum provides guidance concerning the processing
of SIP submittals. In general, there are three situations that
can occur related to each required submittal: th«» State may fail
to submit the required plan, the State may make a submittal that
is not complete, or the State may make a complete submittal.
Once a State submits a SIP and the Environmental Protection
Agency (EPA) has determined that the submittal is complete, EPA
must either approve or disapprove the submittal within a
specified time period. However, if the State fails to make a
required submittal or makes a submittal that is determined tc be
incomplete, the sanctions and Federal implementation plan (FIP)
provisions of sections 179 and 110(c), respectively, will be
triggered. In addition, disapproval of a submittal also triggers
the sanctions and FIP provisions. These provisions are discussed
in further detail in this memorandum.
There are, however, three alternatives to full approval or
full disapproval of a complete SIP submittal: partial approval,
limited approval, and conditional approval. Each of these is
discussed in more detail below along with some guidance as to
when each might be used. In addition, Attachment 1 to this
-------
memorandum contains several examples of how these may be used.
Attachment 2 "to this memorandum is a table that summarizes the
requirements discussed below.
Partial Approval/Pisapproval
Section 110(k)(3) of the amended Clean Air Act (Act)
addresses the situation in which an entire submittal, or a
separable portion of a submittal, meets all applicable
requirements of the Act. Where the entire subraittal meets all
the requirements of the Act, EPA will fully approve the entire
subraittal. In the case where a separable portion of the
submittal meets all of the applicable requirements, partial
approval may be used to approve that part of the submittal and
disapprove the remainder. It is important that the two parts of
the submittal be separable. By separable, EPA means that the
action it anticipates taking will not result in the approved
rule(s) being more stringent than the State anticipated. See
Bethlehem Steel Corp. v. Gorsuchf 742 F. 2d 1028 (7th Cir. 1984);
Indiana and Michigan Elec. Co. v. U.S. E.P.A.f 733 F. 2d 489 (7th
Cir. 1984). For example, EPA cannot approve part of a submittal
that specifies control measures and disapprove the part that
specifies the test methods associated with those control
measures. The EPA has frequently taken a partial approval
approach in the past to process groups of rules that are
submitted together. The EPA can approve some of the rules and
disapprove the rest as long as the rules that are disapproved do
not affect those that are approved. The disapproval of any part
of a required SlP submittal starts the clocks discussed above for
sanctions and FIP's.
Limited Approval/Disapproval
In some cases, a submittal may contain certain provisions
that meet the applicable requirements of the Act along with other
provisions that do not meet the requirements, and the provisions
are not separable. Although the submittal may not meet all of
the applicable requirements, EPA may want to consider whether the
subraittal as a whole has a strengthening effect on the SIP. If
that is the case, limited approval may be used to approve a rule
that strengthens the existing SIP as representing an improvement
over what is currently in the SIP and as meeting some of the
applicable requirements of the Act.
The Act does not expressly provide for limited approvals.
Rather, EPA is using its "gap-filling" authority under section
301(a) of the Act in conjunction with the section 110(k)(3)
approval provision to interpret the Act to provide for this type
of approval action.
-------
Through a limited approval, EPA would concurrently, or
within a reasonable time thereafter, disapprove the rule, under
the relevant provision(s) of Part D, for not meeting all of the
applicable requirements of the Act. As with the limited approval
action the limited disapproval is a rulemaking action, and it is
subject to notice and comment. Under section llG(k), EPA must
take final rulemaking action on SIP submittals within 12 months
of the date EPA determines the submittal is complete-or the
submittal is automatically deemed to be complete if EPA fails to
make a completeness determination. As a general matter, although
the statute directs EPA to act within that timeframe, EPA's
failure to finalize the disapproval portion of the action within
that 12-month timeframe will not affect the validity of any prior
or subsequent limited approval or limited disapproval.1 The
EPA's failure to take action prior to the expiration of the 12-
month period could, however, subject EPA to a lawsuit to compel
such an action.
A key distinction between the limited approval and a partial
approval is that under a limited approval EPA's approval action
goes to the entire rule. In other words, althoucfh portions of a
rule prevent EPA from finding that the rule meets a certain
requirement of the Act, EPA believes that the rule,-.as a whole,
strengthens the SIP. Therefore, EPA approves the entire rule—
even those portions that prohibit full approval. Likewise, when
EPA issues the limited disapproval, the disapproval^applies to
the entire rule as failing to meet a specific requirement of the
Act. The rule remains a part of the SIP, however, under the
limited disapproval, because the rule strengthens the SIP. The
disapproval only applies to whether the submittal meets a
specific requirement of the Act and does not affect incorporation
of the rule into the approved, federally enforceable SIP.
The primary advantage to using the limited approval approach
is to make the State submittal federally enforceable and to
increase the SIP's potential to achieve additional reductions.
Therefore, limited approval should not be used to approve any
rule that is unenforceable for all situations—for example, a
rule that lacks a test method. These rules and any other rules
that do not have an overall strengthening effect on the SIP
should be disapproved. Limited approval can be used, however,
1 The March 22, 1991 memorandum from John Calcagni
discussed the potential impact of Abramowitz v. U.S. E.P.A.. 832,
F. 2d 1071 (9th Cir. 1988), on EPA's decision to split the
approval and disapproval portions of a limited approval. After
reevaluating that case, we believe it may have a narrower impact
than initially described and, therefore, generally would not
impact the timing of limited approval/disapproval actions.
-------
where the rule is unenforceable for some limited number of
situations but? is enforceable for the majority of situations, if
the rule, as a whole/ strengthens the SIP.
The disapproval coinciding with (or following) the limited
approval also starts the sanctions and FIP clocks discussed
above. With the limited approval EPA may or may not have a
commitment from the State to correct the deficiency. The EPA may
choose to use the limited approval approach (instead of
conditional approval) in the case where the State has submitted a
commitment as part of a rule but EPA has reason to believe that
the State will not be able to meet the commitment (as discussed
below). Where a limited approval/disapproval approach is taken,
the notice of proposed rulemaking (NPR) should clearly identify
which requirements have not been met and what action would be
required on the part of the State to meet those requirements.
Conditional Approval
Under section 110(k)(4) of the Act EPA may conditionally
approve a plan based on a commitment from the State to adopt
specific enforceable measures within 1 year from the date of
approval. If the State fails to meet its commitment within the
1-year period, the approval is treated as a disapproval. We
expect that conditional approvals will be used only in rare
situations that merit special consideration. We will evaluate
specific types of SIP submittals [e.g., reasonably available
control technology (RACT) catch-ups, particles with an
aerodynamic diameter less than or equal to a nominal 10
micrometers (PM-10) SIP's] to determine whether certain elements
of that type of submittal, or that type of submittal as a whole,
merit conditional approval. For this reason and to ensure
consistency, Regions should not use conditional approvals without
input from Headquarters as to whether such an approach is
appropriate. Furthermore, as any statutory deadline approaches,
we may issue guidance regarding the appropriate use of
conditional approval with respect to that specific requirement.
Once a determination has been made that a specific type of
submittal can be considered for conditional approval, Regions
must make a determination of whether an individual State
submittal should be conditionally approved. The first
consideration should be whether the State has made (or agrees to
make) a commitment to adopt specific enforceable measures within
1 year of EPA approval. The commitment must be made in writing
-------
by the party responsible for adopting the specified measures
before the plan is conditionally approved, and the commitment
must be submitted by the State.2
In addition, to the extent that the commitment materially
alters the existing rule (in respects that the public could not
reasonably have anticipated would result from the public review
of the existing rule), or is a commitment to adopt an entire rule
or set of rules, the commitment must be a SIP revision submittal
by the State. In many cases, the determination of whether the
commitment materially alters the underlying rule may be based on
whether a similar issue was raised during the earlier state
proceedings on the submitted rule. In general, each commitment
will need to be examined to determine whether it materially
alters the submitted rule. As with any SIP revision, in order
for EPA to accept the commitment as a SIP revision, the State
must have provided notice and public hearing on the submitted
commitment. However, EPA has the discretion to parallel process
commitments and in limited circumstances may propose conditional
approval of the commitment and allow the State process to proceed
on a parallel track.
As a general matter, the greater the extent to which a
submittal is lacking in important plan elements, the less
appropriate the use of conditional approval may be. It should be
noted, however, that there may be circumstances under which EPA
would accept a SIP revision consisting of a commitment only
(without specifically adopted rules) as a candidate for
conditional approval. In such cases, the commitment should also
be accompanied by a work plan detailing any specific measures to
be adopted, the steps that will be taken to adopt the measures,
and the schedule for adoption of those measures. As stated
earlier, a submittal that consists entirely of a commitment will
be considered a SIP revision that is subject to the State process
for submitting SIP revisions, e.g., notice and a public hearing.
Where the submittal contains specifically adopted rules that
need some revisions or corrections to be fully-approvable, the
commitment may not need to be as comprehensive. The commitment
should, however, be as explicit as possible concerning the
measures that will be adopted, the steps that will be taken to
adopt the measures, and the schedule for adoption of those
measures.
2 Although the commitment must identify the measures to
be adopted and contain a schedule for adopting such measures, it
is not necessary for the commitment itself to be enforceable in a
State court.
-------
Because the conditional approval relies on a commitment from
the State, EPA would need some level of confidence that the State
would be able to meet such a commitment. In making a
determination as to whether a State could reasonably be expected
to meet its commitment, EPA would need to consider a number of
factors such as:
the amount of technical work necessary for the measures
to be adopted;
whether adoption of the measures is expected to be
controversial;
the average length of the State adoption process;
how far along in the process the State is; and
the State's past track record.
It should be noted that these are only some of the factors that
should be considered. Each Region, in making a determination
regarding the credibility of the State's commitment, may have to
look at a number of other factors. The Region should clearly
explain, either in the NPR or in a technical support document,
the rationale for these determinations.
In addition to the determination of whether the State's
commitment is credible, the Region must make a determination as
to whether it is appropriate to conditionally approve a revision
on the merits of that revision. Conditional approval might
typically be used in the sane types of situations as the limited
approval. As with the limited approval, one of the main
advantages of the conditional approval approach is to make the
State submittal (where the subraittal contains control
requirements and not just a commitment to adopt enforceable
measures) federally enforceable and to increase its potential to
achieve additional reductions. Because the conditionally
approved submittal will become a part of the SIP, the Region
should be certain that the approval of the commitment will not
weaken the existing SIP. The Region may also want to consider
when the plan (or plan element) that has been submitted was due.
The NPR for a conditional approval should clearly identify
which requirements are the subject of the commitment and,
therefore, have not been met. In addition, both the NPR and the
State's commitment should clearly identify what action is
required on the part of the State. Unlike the limited
approval/disapproval, the conditional approval does not
immediately start the sanctions and FIP clocks. These clocks
start if and when the approval is converted to a disapproval.
There are at least two ways that the conditional approval
-------
may be converted to a disapproval.3 First, if the State fails
to adopt and submit the specified measures by the end of 1 year
(from the final conditional approval), or fails to submit
anything at all, EPA will have to issue a finding of disapproval
but will not have to propose the disapproval. That is because in
the original proposed and final conditional approval, EPA will
have provided notice and an opportunity for comment on the fact
that EPA would directly make the finding of disapproval (by
letter) if the State failed to submit anything.4 Therefore, at
the end of 1 year from the conditional approval, the Regional
Administrator (RA) will send a letter to the State finding that
it had failed to meet its commitment and that the SIP submittal
is disapproved. The 18-month clock for sanctions and the
2-year clock for a FIP start as of the date of the letter.
Subsequently, a notice to that effect will be published in the
Federal Register. and appropriate language will be inserted in
the Code of Federal Regulations. Similarly, if EPA receives a
submittal addressing the commitment but determines that the
submittal is incomplete, the RA will send a letter to the State
making such a finding. As with the failure to submit, the
sanctions and FIP clocks will begin as of the date of the finding
letter.
Second, where the State does make a complete submittal by
the end of the 1-year period, EPA will have to evaluate that
submittal to determine if it may be approved and take final
action on the submittal within 12 months after the;date EPA
determines the submittal is complete. If the submittal does not
adequately address the deficiencies that were the subject of the
conditional approval, and is therefore not approvable, EPA will
have to go through notice-and-comment rulemaking to disapprove
the submittal. The 18-month clock for sanctions and the 2-year
clock for a FIP start as of the date of final disapproval. If
EPA determines that the rule is approvable, EPA will propose
approval of the rule. In either instance, whether EPA finally
approves or disapproves the rule, the conditional approval
remains in effect until EPA takes its final action.
3 It should be noted that this disapproval can be a
limited approval/disapproval. In some cases, the Regions may
want to use such an approach to retain the enforceability of
control measures. The NPR should indicate if this approach is
planned.
4 To provide for this contingency, in the final
conditional approval, EPA would need to provide, for example, "If
the State fails to make a submittal or makes only an incomplete
submittal during the time period for submittal of the rule, EPA
will issue a letter to the State which converts the conditional
approval to a disapproval."
-------
8
It should be noted that EPA will conditionally approve a
certain rule only once. Subsequent submittals of the same rule
that attempt to correct the same specifically identified problems
will not be eligible for conditional approval.
sanctions and FTP Requirements
Actions that Trigger the Sanctions and FIP Requirements
The actions EPA has the authority to take under the
sanctions and FIP provisions of the Act correspond to the
different steps EPA must follow as it reviews and processes SIP
submittals. As discussed previously, the Act in section 179*
requires EPA to impose sanctions based on four types of actions
(findings") provided in section 179(a):
(1) a finding that a state has failed to submit a SIP, a
SIP element,7 or has submitted a SIP or SIP element
that does not satisfy the completeness criteria;
(2) that EPA disapproval of a SIP submission for a
nonattainment area based on its failure to meet one or
more elements required by the Act;
(3) a determination that the State has not made any other
submission, has made an inadequate submission (as
required by the Act), or that EPA disapproves such a
submission; or
(4) a finding that a requirement of an approved plan is not
being implemented.
5 Section 110(m) grants EPA broad authority to apply
either sanction listed in section 179(b) "... at any time (or
at any time after) a finding ..." under section 179(a) with
respect to any portion of the State, with certain exceptions.
This memorandum is intended to address the application of
sanctions under section 179. The section 179 sanctions apply
only to the area for which a finding has been made.
6 Although subsections (l)-(4) refer to findings,
determinations and disapprovals, for simplicity these four
actions will be referred to as "findings."
7 Since EPA does not intend to issue a list of such
elements per se, to ensure that such findings are consistently
applied, findings of failure to submit SIP elements should be
decided on a case-by-case basis in conjunction with Headquarters,
The basis for the finding should be clear and well-supported.
-------
Under section 110(c)(l), EPA is required to promulgate a FIP
based on two -types of findings:'
(1) a finding that a State has failed to make a required
submittal or that a submittal does not satisfy the
minimum completeness criteria established under section
110(k)(l)(A)/ or
(2) the EPA disapproval of a SIP submittal in whole or in
part.
The Sanctions and FIP Clocks
Although EPA may make any of the findings discussed above to
trigger the 179(a) sanctions and 110(c)(l) FIP requirements,
these findings do not require the immediate imposition of
sanctions or promulgation of a FIP. Instead the Act provides a
"clock" for sanctions and FIP's. For plan submittals required
under Part D or in response to a SIP call, section 179(a) allows
for up to 18 months for the State to correct the deficiency that
is the subject of a finding or disapproval before EPA is required
to impose sanctions. Section 110(c)(l) provides for up to
2 years for the State to correct the deficiency and for EPA to
approve a new submittal before EPA is obligated to promulgate a
FIP.
The Administrator has delegated the authority to make
findings of failure to submit to the RA's. The findings are made
via letters from the RA's to State governors or other State
officers to whom authority has been delegated. The letter itself
triggers the sanctions and FIP clocks. For disapprovals, the
Federal Register notice in which EPA takes final action triggers
the sanctions and FIP clocks. Findings of nonimplementation have
traditionally been processed as rulemaking actions through
Headquarters. The sanctions clock will start when EPA makes a
finding of nonimplementation in the Federal Register after
soliciting comment on the proposal (the FIP clock is not
triggered by such a finding). Although the findings of failure
to submit and SIP disapproval start both the sanctions and FIP
clocks, what is required to stop the clocks differs; therefore,
they are discussed separately. Note that in some cases the
sanctions clock may be stopped while EPA remains under an
obligation to promulgate a FIP.
Since the deficiency is a failure to implement after a State
has submitted a plan and EPA has approved it, it is unnecessary
for this finding to trigger a requirement that EPA develop the
required rule (i.e., prepare a FIP) and section 110(c)(l) does
not require it.
-------
10
Sanctions Clock
Under section 179(3), in order to stop the sanctions clock,
the State must correct the "deficiency" prompting the finding.
The EPA must apply one of the two sanctions available under
section 179(b) within 18 months after the date of the finding and
both sanctions at 24 months, unless the deficiency has been
corrected. Section 179(a) also requires EPA to apply both
sanctions after 18 months if EPA finds a lack of good faith on
the part of the State.
Attachment 3 provides seven scenarios illustrating how the
sanctions clock operates, including examples of what constitutes
a deficiency correction (and hence a stopping of the clock).
In brief, for purposes of the sanctions clock, findings of
failure to submit plans or complete plans are corrected when EPA
finds the submittal complete' [although the FTP clock is still
running (see FIP clock discussion)] and disapprovals are
corrected when EPA takes final rulemaking action approving the
plan. In addition, findings of nonimplementation are corrected
when EPA makes a finding in the Federal Register that the State
is now implementing that provision.
FIP Clock
Under the FIP provisions, either a SIP must be approved or a
FIP must promulgated within 2 years of one of the two findings
discussed above. In other words, EPA must approve the State
submittal in order to stop the FIP clock. Where the sanctions
and FIP clocks were started by EPA disapproval of a plan, the
clocks will run concurrently. In this case, to correct the
deficiency for purposes of the sanctions clock, the State must
make a submittal which EPA finds approvable. Such a
determination is not made until EPA issues a final approval of
the plan. Final approval of a plan is also what is needed to
stop the FIP clock. Attachment 3 provides seven scenarios of how
the FIP clock operates.
9 Where EPA made a finding of failure to submit and
subsequently finds that the State has made a complete submittal
for the plan or plan element that was the subject of the finding,
the letter that makes the finding of completeness will notify the
State that the sanctions clock is stopped as of the date of that
letter. The Region should periodically announce any such
findings that represent corrections of failure to submit in the
Federal Register.
-------
11
Available Sanctions
For plan submittals required under Part D or in response to
a SIP call, if the State does not correct the specific deficiency
within the 18-month period allowed under section 179(3), EPA must
apply at least one of the two sanctions available under section
179(b)10 as described:
(1) Highway funding sanctions. The EPA may impose a
prohibition on the approval by the Secretary of
Transportation of certain projects, or the awarding of
certain grants.
(2) Offset sanctions. A ratio of at least 2-to-l will be
required for emissions reductions within the
nonattainment area to offset emissions from new or
modified major facilities (as required under section
173).
Regions should determine which of the sanctions will be applied
at the 18- and 24-month milestones on a case-by-case basis. As
discussed previously, EPA must apply both sanctions at the
18-month mark if it finds there is a lack of good faith effort.
Such a determination should be made on a case-by-case basis in
consultation with Headquarters. In addition, once one of the
sanctions has been imposed, EPA must impose the second sanctions
if the deficiency has not been corrected within 6 months
(regardless of the State's efforts). Headquarters will issue a
proposal of the sanctions and the Regional Office will issue the
final rule imposing sanctions.
Conclusion
General comments on this memorandum should be directed to
Pam Johnson of the Regional Operations Branch at (919) 541-5270.
Comments related specifically to ozone or carbon monoxide should
be directed to Carla Oldham at (919) 541-3347. Comments related
to particulate matter, sulfur dioxide, or lead should be directed
to Chris Stoneman at (91-9) 541-0823.
cc: Regional Air Counsels, Regions I-X
Chief, Air Programs Branch, Regions I-X
Jane Armstrong, OMS (Ann Arbor)
William Becker, STAPPA/ALAPCO
Denise Devoe, OAQPS (ANR-443)
10 In addition, section 179(a) provides for an air
pollution grant sanction that applies to grants EPA may award
under section 105. However, since it is not a sanction provided
under section 179(b), it is not one of the sanctions EPA must
impose after the 18-month period.
-------
12
Tom Helms, AQMD (MD-15)
Bill Laxton, TSD (MD-14)
Ed Lillis, AQMD (MD-15)
Rich Ossias, OGC (LE-132A)
Joe Paisie, AQMD (MD-15)
John Rasnic, SSCD (EN-341W)
John Seitz, OAQPS (MD-10)
Paula Van Lare, QMS (ANR-445)
Lydia Wegman, OAQPS (MD-10)
-------
Attachment 1
Example 1
A State submits a SIP revision containing four rules: (1)
control requirements for bulk gasoline plants, (2) control
requirements for gasoline dispensing facilities (Stage I), (3)
leak detection requirements for gasoline tanks trucks, and (4)
test methods that apply to these three rules. The EPA review of
the rules shows that all of the rules except the Stage I rule
meet the applicable requirements of the Act. The Stage I rule
fails to require submerged fill loading for all storage tanks.
This is inconsistent with EPA's RACT guidance and the State has
failed to propose an alternative that it has demonstrated is RACT
for the applicable sources.
Partial Approval
Under the partial approval option, EPA can approve the rules
for bulk terminals and tank truck leaks, approve the test
methods, and disapprove the Stage I rule. These rules are
separable from the Stage I rule. Disapproval of the Stage I rule
does not affect the stringency of the other three rules.
Therefore, the other three rules may be approved under this
provision. However, the submittal as a whole would only be
partially approved.
Limited Approval of Stage I Rule
Under the limited approval approach, EPA could approve the
Stage I rule as being an improvement over what is currently in
the SIP and, at the same time or within a reasonable time after
the approval (but no later than 12 months after the submittal is
complete), disapprove the rule because it does not represent
RACT. The sanctions and FIP clocks would start upon the final
disapproval of the rule.
Conditional Approval
Alternatively, EPA could conditionally approve the Stage I
rule if the State committed to revise the rule, within 1 year of
the conditional approval, to require submerged fill loading. If
the State then failed to make such a revision, EPA would issue a
finding converting the conditional approval to a disapproval.
Example 2
If in example 1 the first three rules (containing control
requirements) are all approvable but the fourth (containing the
test methods) is either deficient or has not been submitted, then
the submittal would have to be handled differently. Because a
test method is critical in determining the stringency of a
control requirement and is needed for the requirements to be
enforceable, these rules cannot be considered separable and,
therefore, partial approval would not be an option. In addition,
because the control requirements will not be enforceable without
a test method, it would not be appropriate to use either the
limited or conditional approval approach.
-------
Example 3
A State submits a SIP revision that contains four PM-10
rules, two for controlling emissions of fugitive dust and two for
the control of.residential wood combustion. The rules represent
reasonable available control measures (RACK) and include (1)
paving or stabilizing unpaved roads, (2) developing a traffic
reduction plan for unpaved roads, (3) a mandatory episode
curtailment program for residential wood combustion, and (4)
encouraging changeover to new source performance standards and
wood stoves. The third rule is deficient in that it .does not
provide a communication strategy on which the curtailment program
is dependent.
Partial Approval
The EPA may approve the three rules which satisfy RACM but
disapprove the episode curtailment program as failing to meet the
RACM requirement. These rules are separable because disapproval
of the curtailment program will not have any effect on the
stringency or enforceability of the remaining rules.
Limited Approval
The EPA may approve the episode curtailment plan as
strengthening the SIP by providing enforceable measures in a SIP
which currently has no curtailment program. At the same time or
within a reasonable time after the approval (but no later than 12
months after the submittal is complete), EPA must disapprove the
rule as not representing RACM. Final disapproval of the rule
would start the sanctions and FIP clocks.
Conditional Approval
The EPA may conditionally approve the rule if the State
submits a commitment to submit a revised rule within 1 year of
the approval. If the State then failed to make such a revision,
EPA would issue a finding converting the conditional approval to
a disapproval.
-------
CN
C
0)
E
x;
o
0>
c
-H
c
0
.c
-p
c
4)
O^ Jj
H4J
CO CO
W
4J
C
0)
€
j^
-H
P
-P CT
U 0)
< «
4J
c
ft)
E
4->
-H
E
E
0
0
>,
4J
•H
rH
-H
.Q
(C
(0
a
(U
^0
rH
a
O
a
a
C«H
O C CO
-P U 0)
^ CU ^4 Q)
«j O.4J x;
a E O i-t
O -H-H
4J ^| 4J rH 3
j-i a 01 >H a cr
«] a 3 rH a o)
a «j e « -(
E in
E w
o w
U 0)
o
O 0)
c c
0)
J3
-P
3 rH
E X!
(C
01 S-i
0) <0-
rH a
3 O
rH
<0
•H
J-l
(0
U -P
IQ 0]
3 C
rH E 0)
(0 JS
4J 0) 4J A.
•P rH CPH
•H O C CO
Ex; o)
jQ 5 ^1 ft)
y 4* js
W rHi a cr
O (0 rHJ O, 0)
*O jC (01 (0 i-i
4J
c
0)
E
-p >1
•H J-I
E
4J 01
ft) 4J
0) ft) C
E rH ft)
•p ja E
O O (00)
C 4-> U J-i
•H -H
01 0) rH 3
4) > r-d acr
O i
4J O O
W O O H
a>
W rH
-H X!
*4-4 <^
4-> O rH Jj
C fl (C
o) c 4J a
•H O P E
*H Jj jQ t i
0) O 3 O
'o a w c
rH
(0
c
o
-iH
4->
-H
T3
C
O
U
-------
Attachment 3: Sanctions and FIP Clocks Scenarios
Scenario 1: The EPA receives a SIP and finds it incomplete
.prior to the statutory due date of the SIP.
Although a finding that the State submitted an incomplete
SIP is one of the section 179(a) findings, the sanctions and FIP
clocks will not begin to run until after a submittal is due.
This is because the finding must be based on the failure to
submit a complete required SIP or SIP element and the submittal
is not required until it is due under the statute. If a SIP
"submitted prior to a due date is still incomplete by the due
date, then EPA will notify the State by letter that the plan
remains incomplete and that the 18-month sanctions clock and the
2-year FIP clock have started.
Scenario 2: The EPA receives a SIP and finds it incomplete on
or after the statutory due date of the SIP.
If EPA, receives a SIP and finds it incomplete pursuant to
section 110(k) on or after the statutory due date of the SIP,
then, as in scenario 1, the state has failed to make a complete
submittal under section 179(a). The EPA will notify the State by
letter that the plan is incomplete and that the 18-month
sanctions clock and the 2-year FIP clock have started.
Scenario 3: The EPA receives no submittal at the due date.
If EPA receives no submittal from a State to meet a
statutory due date, then it may make a finding of failure to
submit under section 179(a)(l), triggering the 18-month sanctions
clock and the 2-year FIP clock.
Scenario 4: After the due date, EPA receives a SIP for which
it originally made a finding of failure to submit.
Upon receiving the plan, the sanctions clock will continue
to run during the completeness review and be stopped if EPA finds
the plan complete and continue if EPA finds the plan incomplete.
If the 18 months elapse during the time EPA is doing its
completeness review, EPA will not impose sanctions unless it
determines the plan incomplete. If sanctions have been imposed
prior to the State's submittal, the sanctions will remain in
place until EPA determines the submittal complete.
The FIP clock continues to run while EPA makes its
completeness determination.
Scenario 5: The EPA originally makes a finding of failure to
submit, then receives a SIP, finds it complete,
but disapproves it in final rulemaking.
Upon a determination that the SIP is complete, the State
corrects the deficiency that prompted the finding of nonsubraittal
and the sanctions clock stops. A new sanctions clock will start
-------
upon the final SIP disapproval rulemaking. The new sanctions
clock will not stop until EPA has taken final action to approve
the revised SIP submittal.
Even after the submittal is determined to be complete, EPA
remains under obligation to promulgate a FIP. Therefore, the
disapproval of the SIP does not start a new FIP clock.
Scenario 6; The EPA originally makes a finding of failure to
submit, then receives a SIP, finds it complete,
and approves it in final rulemaking.
Upon a determination that the SIP is complete, the State
corrects the deficiency prompting the finding of nonsubmittal and
the sanctions clock stops. The EPA remains under obligation to
promulgate a FIP until EPA takes final rulemaking action to
approve the SIP.
Scenario 7: The EPA finds that a State has failed to implement
a SIP or SIP provision.
The EPA will make a finding of nonimplementation in the
Federal Register after soliciting comment on the proposal. The
sanctions clock will start upon EPA taking final action and stop
when EPA makes a finding in the Federal Register after notice-
and-comment rulemaking that the State has corrected the
deficiency that prompted the finding. A finding of
nonimplementation does not start a FIP clock.
-------
REFERENCES FOR SECTION 9.6
-------
f
\
3
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_ WASHINGTON, O.C. 20460
MAR
OFFICE OF
AIR AND RADIATION
MEMORANDUM , - >---..?•=' - '
SUBJECT :,;,Transmittal of OAQPS, Interim Control Policy Statement
.; -.-• •:-•:•-. : -v :-' :-c:•••--• •i-c"- ?
FROM: ., John S. Seitz, .Director.
Stationary Source Compl:
.Office pf_Air Quality PlaVmingtand Standards'
TO:
.Air Management Division Directors . .
Regions I, III and IX -; ;
Air and Waste Management Division Director
" Region II
Air/ Pesticides and Toxics Management Division
Directors . .: . :
...Regions IV and VI
r ~ -. f , , — f. -.
Air and Toxics Division Directors
Regions VII, VIII and X
Air and Radiation Division Director
Region V
Attached is the final Interim Control Policy for
developing compliance schedules that require replacement or
upgrading of existing air pollution control equipment.
Comments solicited from the Air Compliance and Air Programs
Branch Chiefs, OECM, and SSCD by a memorandum of January 20,
1988, have been addressed, resulting in a few minor language
clarifications and one change to the policy.
The change resulted from a comment on the requirement
to maintain existing controls in the interim. In lieu of
maintaining the operation of the existing control equipment
during the interim period, allowance has been made for
installing interim controls which may be more effective in
reducing emissions. The usage of interim controls may not
result in a delay of the installation of the final control
equipment.
-------
- 2 -
Also* clarification has been made concerning the
installation of redundant equipment on new control systems.
Design requirements mentioned in this policy apply to those
sources which require continuous operation of the process
equipment. Temporary shutdown during maintenance periods is
always a possible compliance alternative to adding redundant
control equipment. The policy now states this specifically.
One notable recommended change has not been included.
The comment was made that performance bonds should not be
applied to activities^which may be'beyond the control of the -
source, such as the delivery of materials. Installation of
control equipment frequently involves the activities of
several contractors and requires careful scheduling to avoid
delays. Late delivery of equipment can have a serious adverse
effect on the ability of a source to meet a tight installation
schedule. A source must take the necessary steps to select
the most reliable, rather than the lowest cost vendor, to
ensure that schedules are met.
Thank you for your assistance with the development of
this policy statement. If you have questions concerning it,
please contact Pam Saunders of my staff at FTS 382-2889,
EMail EPA6264.
Attachment
-------
INTERIM CONTROL POLICY
PURPOSE
The purpose of this policy, is .to "provide uniform criteria
for developing final compliance requirements, schedules, and
interim requirements -for sources in situations -where failing,
deteriorating or "inadequate air pollution control equipment
must be replaced or upgraded. .-_. . - -"- •--•:'-- - ;
APPLICABILITY ~'•', ~ -, ...--.-.
This policy applies to situations: where a determination to
rebuild or replace existing control equipment-has been made.
Situations mentioned in this policy may also be subject to
applicable civil penalties as stated in the Civil Penalty
Policy. .---••-•
OBJECTIVES
The objectives of this policy are to require subject
sources to: . -------
1. Minimize and continuously monitor emissions during
the interim period;
2. Attain-final and .continuing compliance as quickly
as feasible using all available means;
3. Maintain continuous compliance in the future by
appropriate design of the final control system,
including the continuous monitoring of excess
emissions.
POLICY
INTERIM MEASURES
Interim measures combined with continued operation and
maintenance of existing controls must be required wherever
existing controls are inadequate. During the interim period
until the new or upgraded control equipment is operational
and the source is in compliance, emissions from the source
must not be allowed to increase. The existing though
inadequate control equipment must remain operational to the
maximum extent possible, including being maintained and
-------
- 2 -
repaired, until such time that construction or tie-in of new
equipment requires its shutdown or removal. In lieu of
maintaining the existing though inadequate control equipment,
interim controls which offer a higher degree of emission
reduction and are readily and reasonably available may be
installed. The use of such interim controls shall not unduly
delay the installation of final control equipment.
When existing control equipment must be taken off line
to tie-in or complete construction of new or upgraded
equipment, additional interim controls or other interim
measures are required to ensure no increase in excess emissions
occurs during the tie-in period. Such measures may include
installation of additional temporary control equipment or
operational controls, e.g., curtailment of production rates,
relocation of production to complying process lines or
facilities, purchase of power or product elsewhere as needed,
or temporary shutdown.
The source should be required to implement an interim
continuous emissions monitoring program, to enable the agency
to monitor the emissions performance of the source during the
interim period.
COMPLIANCE REQUIREMENTS ^
All compliance schedules must contain specific milestones
for design, construction, installation and operation of new
or rebuilt control equipment. The milestones should reflect
the shortest feasible schedule for achieving compliance and
should include, but not be limited to, the following:
1. Submittal of a control plan, including necessary
permit applications, to agency;
2. Award of major contract(s) to vendors;
3. Delivery of materials or control equipment;
4. Initiation of off-site fabrication or on-site
construction or installation of the control
equipment;
5. Completion of installation or rebuilding of control
equipment;
-------
- 3 -
6. Testing and demonstration of final compliance by
the source.
Performance bonds or stipulated penalties must be
associated with every milestone specified in the schedule.
To promote an expeditious schedule, the use of prefabricated
equipment or the use of double or triple shifts for the
construction or installation of equipment should be considered.
CONTINUOUS COMPLIANCE AND MONITORING REQUIREMENTS
A fundamental principle of this policy is that the source
must make every possible effort to maintain continuous
compliance after the new or rebuilt equipment becomes
operational. To assure continuous compliance during future
maintenance periods/ all new or upgraded equipment must
normally include spare compartments (or units) and parts (or
equipment) that can maintain emissions at a compliance level
while the remainder of the equipment is being replaced,
repaired, or maintained. In lieu of this, those sources that
do not require continuous availability of the process equipment
may shut down during such periods.
To assure the ability of the agency to monitor continuous
compliance in the future, the source must periodically report
excess emissions to the appropriate air pollution control
agency. This may be accomplished by requiring the installation,
operation and reporting of data from continuous emissions
monitoring equipment. These requirements are to be set out
specifically in the compliance agreement.
-------
-------
REFERENCES FOR SECTION 10.1
-------
United States
Environmental Protection
Agency
Office of Air Quality
Planning And Standards
Research Triangle Park, NC 27711
DRAFT
October 1990
AIR
f/EPA
New Source Review
Workshop Manual
Prevention of Significant Deterioration
and
Nonattainment Area
Permitting
Additional
Impacts
-------
O:
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning- and Standards
Research Triangle Park, North"Carolina 27711
APR 8 1380
?N-110-50-04-05-032
»iew Source Review Seouirements for Lesd
•Richard G. Rhoads, Director
Control Programs Development Division (MD-15)
Director, Air and Hazardous Materials Division, Regions I-X
Recently, several Regions have requested guidance regarding new
source review requirements for lead SIPs.
The "Supplementary Guidelines for Lead. Implementation Plans"
contains a brief outline of general SIP requirements. This outline
discusses those portions of 40 CFR 51 regulations "Requirements for
Preparation, Adoption, and Submittal of Implementation Plans" that were
not revised to account for the lead standard, but which are still
applicable to the lead SIPs. Specifically, the requirements of CFR
51.18 Review of New Sources and Modifications must be satisfied for lead
SIPs.
Existing permitting regulations adopted in accordance with Section
51.18 may be applicable to lead depending en the specific exemptions
included in the State's general persritting regulation. In general,
the NSR requirement for lead SIPs may be satisfied by simply revising
existing permit regulations to eliminate any exemption of sources
which have the potential to emit five tons/year or more of lead.
The source size limit is based on the definition of a point source
of lead which is five tons/year actual emissions of lead. The rationale
for this limit is based on an analysis contained in the "Supplementary
Guidelines for Lead Implementation Plans," pages 75-77. Briefly, this
rationale indicates that sources which emit five tons/year of lead
have the potential to violate the ambient standard for lead.
If you have any questions regarding new source review in lead SIPs,
contact Susi Jackson (629-5365) .of my staff.
cc: Chief, Air Branch, Regions I-X
Mike James, OGC
Ed Reich, DSSE
-------
REFERENCES FOR SECTION 10.2
-------
f!*iilsiififG']Jti']iil
» e s a x •? at* & o 11 . — s— •
* £ * C " • • c e ° fc.aftt's* • ~
iiHhljaJk«IIil!l5 =
m
t-
ec
-------
CLEAN AIR AC"
rccsonaoiy available control measures as
cxpeditiously as practicable (including
buch reduction in emissions from existing
sources in the area as may be obtained
tnrougn the adootion. at a minimum, of
reasonably available control technology;
jna shall provide for attainment of -the
national primary ambient air quality
iianoards.
(2) RFP.—Such plan provisions shall
require reasonable further progress.
(3) Inventory.—Such plan provisions
=hall include a comprehensive, accurate.
current inventory of actual emissions from
all sources of the relevant pollutant or
pollutants in such area, including such
periooic revisions as the Administrator
-nay determine necessary to assure ;.hat
:ne reouirements of this part are met.
i-J Identification And Quantinca-
:ion.—Such clan provisions snail excressiy
centify ana ouanuiv :ne emissions, if any.
oi any such pollutant or pollutants whic.n
•Aiil be allowed, in accordance with section
;73(a)U)(B). from the construction ana
operation of major new or modified sta-
tionary sources in each such area. Tne
plan shall demonstrate to the satisfaction
of the Administrator that the emissions
quantified for this purpose will be consist-
ent with the achievement of reasonable
further progress and will not interfere wun
attainment of the applicable national- am-
bient air quality stanoard by the applica-
ble attainment date.
(5) Permits for New and Modified Ma-
jor Stationary Sources.—Such plan provi-
sions shall require permits for the con-
struction and operation of new or moained
major stationary sources anywhere :n :ne
nonattainmem area, in accordance wun
section 173.
(6) Other Measures.—Such plan provi-
sions shall include enforceaole emission
limitations, and such other control mea-
sures.- means or techniques (including eco-
nomic incentives such as fees, marketable
permits, and auctions of emission ngnts).
as well as schedules ana timetables for
comoiiance. as may oe necessary or aopro-
pnate to provide for attainment of such
standard in such area by the anpiicabie
attainment date specified in this part.
(7) Compliance With Section 110(a)-
(2).—Such plan provisions shall also meet
the applicable provisions of section
(S) Equivalent Techniques.—L'oon ao-
piicauon by any State, the Administrator
may allow the use of equivalent modeling.
emission inventory, and planning proce-
dures, unless the Administrator deter-
mines that the proposed techniques are. in
the aggregate, less effective than the
methods specified by the Administrator.
(9) Contingency Measures.—Such plan
shall provide for the implementation of
specific measures to be undertaken if the
area fails to make reasonable further pro-
gress, or to attain the national primary
ambient air quality standard by the attain-
ment date aopiicabie under this pan. Such
measures shall be included in the plan
revision as contingency measures to UKC
srTec: :n any sucr. case without further
action oy the State or '.he Administrator.
-------
=EDE?iAL LAWS
in such Suite are suoject to emission limi-
tations ana are in compliance, or on a
scncdule for compliance, with all applica-
ble emission limitations ana standards un-
der this Act: ana
•.-1 the Administrator has not deter-
mined mat the applicable implementation
plan is not being aaequateiy implemented
for the nonattainment area in which the
proposed source is to be constructed or
modified in accordance with the require-
ments 01 this part: ana
[PL 95-190. Novemocr 16. 1977]
15") an analysis 01" alternative sues, sizes.
production processes, ana environmental
control :ecnmaucs for sucn proposea
source demonstrates mat benefits of the
proposea source significantly outweigh the
environmental ana social costs imposed as
a result of its location, construction, or
modification.
[See. i72(a)(5) added by ?L lOl-S^l
•; i Any emission reductions reauired as
z precondition of the issuance of a permit
unaer paragraph (.1) snail be federally
sr.forceaoie before sucn permit may be
issued.
(b) Prohibition on Use of Old Growth
Allowances.—Any growth allowance in-
cluded in an applicable implementation
pian to meet the requirements of section
i "2(b)(5^ (as ;n erTec: immediately before
the date of the enactment of the Clean Air
Act Amendments of "i9901 shall not be
valid for use :n any area that received or
receives j notice under section HO(al(2V
iHXii'i ias in effect immediately before
:he date of the enactment of the Cean Air
Act Amendments of I99CN or under sec-
'.'.on ilOfkUn that its applicable imnie-
rnerttation oian containing sucn allowance
•s substantially maoecuate.
(c) Offsets.—< i; The owner or operator
of a new or modified major stationary
source may comply with any offset re-
quirement in effect under this part for
increased emissions of any air pollutant
oniy by obtaining emission reductions of
such air pollutant from the same source or
other sources ;n me same nonattamment
area, e.-.ccpt that the State may allow the
owner or ooerator of a source to obtain
such emission reductions in another nonat-
tainment area if (A) the other area has an
equal or higher nonattainment classifica-
tion than the area in which the source is
located and (B) emissions from such other
area contribute to a violation of the na-
tional ambient air quality standard in the
nonattainment area in which the source is
located. Such emission reductions shall be.
by the time a new or modified source
commences operation, in effect and en-
forceable and shall assure that the total
tonnage of increased emissions of the air
pollutant from the new or modified source
shall be orTset by an equal or greater
reduction, as applicable in the actual emis-
sions of such air pollutant from the same
or other sources in the area.
12} Emission reductions otherwise re-
quired by this Act snail not be creditable
as emissions reductions for purposes of
any such onset requirement. Incidental
emission reductions wmcn are not other-
wise rtauirea by this Act snail be crcdit-
icie as emission reductions for such pur-
poses if such emission reductions meet the
requirements of paragraon (1).
•d) Control Tecnnoiogy information.—
The State snail orovide mat control tecn-
noiogy information from permits issued
under mis section wiii be promptly submit-
ted to tne Administrator for purposes of
making such information available
througn the RACT.'BACT/L\ER clear-
inghouse to other States and to the general
puoiic.
iei Rocket Engines or Motors.—The
permitting autnonty of a State snail allow
a source to offset by alternative or innova-
tive means emission increases from rocket
engine and motor firing, and cleaning rc-
iatea :o such firing, at an existing or
modified major source mat tests rocKct
jr.sines or motors under the following
conditions:
i U Any modification proposed is solely
for tne suroose of expanding the testing of
rocket engines or motors at an existing
source mat is permitted to test such en-
gines on the date of enactment of this
suoscc::on.
• 1} The source demonstrates to the sat-
isfaction of the permuting authority of the
State that it has used ail reasonaoie means
to obtain and utilize offsets, as determined
on an annual basis, for the emissions in-
creases beyond allowaole leveis. mat ail
available onsets are oemg used, and thai
sufficient offsets are not available to the
source.
(3) The source has obtained a written
finding from the Deoartment of Defense.
Department of Transportation. National
Aeronautics and Space Administration or
other appropriate Federal agency, mat the
testing of rocket motors or engines at the
facility is required for a program essential
to the national security.
(4) The source wiil comply with an
alternative measure imposed by the per-
mitting authority, designed to offset any
emission increases beyond permuted leveis
not directly offset by the source. In iieu of
imposing any alternative offset measures.
the permitting authority may impose an
emissions fee to be paid to sucn aumomy
of a State which shall be an amount no
greater than 1.5 times the average cost of
stationary source control measures aaoot-
ed in that area dunng tne previous 5
years. The permuting authority snail uti-
lize the fees in a manner that maximizes
the emissions reductions in th~t area.
[Sec. 1~3 revised by PL 101-f-9l
PLANNING PROCEDURES
Sec. i74.(a) In General.—For ir.y
ozone, carbon monoxide, or PM--0 nonai-
tainment area, the State containing sucn
area and elected officials of affected iocai
governments shall, before tne date re-
quired for submittai of the inventory de-
scribed under sections !82(a)(l) and
I87(a)(l), jointly review and update as
necessary the planning procedures aaoot-
ed pursuant to this subsection as in effect
immediately before the date of the enact-
ment of the Clean Air Act Ame... .ner.ts
of 1990. or develop new oianning proce-
dures pursuant to this subsection, as 20-
proDriate. In preparing sucr, rrocedurts
the State and local elected officials snail
determine which elements of a revised
implementation plan will be developed.
adopted, and implemented ahrcugn
means including enforcement i ay me
State and which by local aovcrr.mer.is or
regional aeencies. or any comomation 01
local governments, regional agencies, or
the State. The implementation 3ian re-
quired by this part snail be prepared by an
organization certified by the State, in con-
sultation with elected officials of iocai gov-
ernments and in accordance wun me de-
termination under the second sentence 01
this subsection. Such organization snail
include elected officials of local govern-
ments in the affected area, and representa-
tives of the State air quality planning
agency, the State transportation oianning
agency, the metropolitan planning organi-
zation designated 10 conduct the continu-
ine. cooperative and comprehensive trans-
-------
:>?lf f«_r3^s?a
I
»f 5»!»f ;fl --1
-------
••re
3 -
fff_t" last
&Hs? |v|
8?,,
iM'UH
fHii *; | it; i
»l« i! i ill! I
H !
I ff||-;i
H
I
•"•a
:t!
m
Jfi f 5 - i,a
l«f I |5a "s
;,| i fra| ,?
''i r -5l I?
iti 111! HRH i
WWWP
li'iii-mH:!!!'!
13
ti
r I?
if!
illfli I iKKH I'U H !
[I1'
I.
" &?ff Sslfol
i fsl -Irii ,
e S*- Sis |» ?
f !if l:i !i i
i i i I'll1 !iliiil'!!liT|ll !i f 8!
-------
-------
:m*l'!ff£
0
'fJim HIM H|Bi
iU Ahl SUsi
'rtHmL
ilSfipi!
<$!pll5
linli
IM i»l mi!i|Hl ?
SKMi HlU ililllliJl S
S3 ; (
ni
Up! iRS HI
fi ^IHH II *s 5 -eil5 lifslHl s«U !?j
[j [; ill II It I !HU ".llHlli flu Hi
i
T
-------
11'
a*3?3
f!I?£H illMI1
l\\\l*\ l\\l$
\l\i\\n* ih
HKh^kfrfbKlhf
° **s _
^-.^?^c-l •-•<»«
5?« * sr — ' 3 2
5*|EH3R
-------
nm
njH
nh'i
~?-3i
*S?5
« r:
«»
HIM
?:§§£
*S«!
81S*?&S
JHfUl
i;h«i
f'!!H5
.* la
5.7 _-• s •
:i =is-g2
5SF '5?!=
O ^ *" 3
SIS?
• !*3'
!I,f!B
ft >
:« ?
»
=so
• s ^
e?
=• e
i l
i ?
5 ?
•H a^i»M *»*
I Ui'liif 2!
?«jlnjsil^hs«
ss-9 ;••••• s5s->?2
*
i
?
t= i^^ii I
»r frc2 2 o5S *
mm
2»»_S'?S.f0«a> ;'B'«f¥5'3lB12at^2"8»83-'-**-ri^«l5.*s'?2,;
UUiUfiiU llil.Uf}Hfil lirr'fHUfvninttf!
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
MAR I I I991
SUBJECT: New Source Review (NSR) Program TransitionaJL Guidance
FROM: A-John- S. Seitz, Directo . . „_ , ,_
p (gffice of Air Quality Planning anJstandards (MD-10)
TO: Addressees
The Clean Air Act Amendments of 1990 (1990 Amendments) make
numerous changes to the NSR requirements of the prevention of
significant deterioration (PSD) and nonattainment area programs.
The 1990 Amendments create new and expanded nonattainment areas,
extend PSD coverage to current Class I area boundaries, and
mandate a PSD exemption for certain hazardous air pollutants.
The Environmental Protection Agency (EPA) intends to propose by
September of this year a regulatory .package that will implement
these and other changes to the NSR provisions. Final adoption of
these revised regulations is projected for August 1992.. In the
interim period between passage of the 1990 Amendments and
adoption of the Agency's final regulations, EPA expects that
numerous issues regarding the 1990 Amendments will arise. This
memorandum sets forth the Agency's position on the most important
of these transitional issues involving the NSR program.
This guidance document does not supersede existing State
regulations or approved State implementation plans. However, in
some cases, it calls upon States to implement their NSR programs
in a manner consistent with provisions of the 1990 Amendments
that are applicable immediately and with the requirements that
flow directly from these provisions. Nonetheless, the policies
set out in this transition memorandum are intended solely as
guidance and do not represent final Agency action. They are not
ripe for judicial review for this reason. Moreover, they are not
intended, nor can they be relied upon, to create any rights
enforceable by any party in litigation with the United States.
The EPA officials may decide to follow the guidance provided in
this memorandum, or to^-act at variance with the guidance, based
on an analysis of specific circumstances. The Agency also may
change this guidance at any time without public notice.
The Regional Offices should send this guidance document to
their States. Questions from States and applicants concerning
specific issues and cases should be directed to the appropriate
EPA Regional Office. If you have any general questions, please
contact Mr. Michael Sewell of the New Source Review Section at
FTS 629-0873 or (919) 541-0873.
Attachment
-------
Addressees
Director, Air, Pesticides, and Toxics Management Division,
Regions I, IV, and VI
Director, Air and Haste Management Division, Region II
Director, Air Management Division, Regions III and IX
Director, Air and Radiation Division, Region V
Director, Air and Toxics Division, Regions VII, VIII, and X
cc: J. Calcagni
R. Campbell
W. Laxton
E. Lillis
J. Rasnic
L. Wegman
J. Weigold
NSR Contacts
-------
New Source Review (NSR) Transitional Guidance
Toxics and National Emissions Standards for Hazardoi^
Pollutants fNESHAPS1 Issues
1. Section 112 Hazardous Air Pollutants are No Longer
Considered Regulated Pollutants Under Prevention of
Significant Deterioration (PSD), but NESHAPS still Apply
Under the 1977 Amendments to the Clean Air Act (Act)
and regulations issued thereunder/ the PSD .requirements of
the Act apply to all "major" new sources and "major"
modifications, i.e., those exceeding certain atnnual tonnage
thresholds [see 40 CFR 52.21(b)(l)(i) and (b)(2)(i)].
Typically, new sources and modifications become subject to
PSD because they exceed the specified tonnage threshold for
a criteria pollutant, i.e., a pollutant for which a national
ambient air quality standard (NAAQS) has been established
under section 109 of the Act. Once a new source or
modification is subject to PSD, the PSD requirements apply
to every pollutant subject to regulation under the Act that
is emitted in "significant" quantities (or, in the case of a
major modification, for which there is a significant net
emissions increase) [see 40 CFR 52.21(b)(23) and (i)(2)].
Under the 1977 Amendments, best available control technology
(BACT) and other PSD requirements apply not only to
emissions of criteria pollutants but also to emissions of
pollutants regulated under other provisions of the Act, such
as section 111 or 112. This regulatory structure was
altered by the 1990 Amendments.
Title III of the 1990 Amendments added a new
section 112(b)(6) that excludes the hazardous air pollutants
listed in section 112(b)(l) of the revised Act (as well as
any pollutants that may be added to the list) from the PSD
(and other) requirements of Part C. Thus, because they are
on the initial Title III hazardous air pollutants list, the
following pollutants, which had been regulated under PSD
because they were covered by the section 112 NESHAPS or
section 111 new source performance standards (NSPS) program,
are now exempt from Federal PSD applicability:
arsenic
asbestos
benzene (including benzene from gasoline)
beryllium
hydrogen sulfide (H2S)
mercury
radionuclides (including radon and polonium)
vinyl chloride.
-------
The Title III exemption applies to final Federal
PSD permits (i.e., those issued in final form and for
which administrative appeals, if any, under
40 CFR 124.19 have been exhausted) issued on or after
the date of enactment of the 1990 Amendments
(November 15, 1990). For Federal PSD permit
applications now under review by either an EPA Regional
Office or a delegated State, PSD permit requirements do
not apply to the pollutants exempted by Title III. For
Federal PSD permits containing PSD requirements for the
pollutants exempted by Title III issued on or after
November 15, 1990, the permittee may request a revision
(e.g., removal of a BACT limit for benzene) to their
PSD permit to reflect the Title III exemption from
Federal PSD applicability.
Note that pursuant to section 116 and the preservation
clause in section 112(d)(7) of the amended Act, States with
an approved PSD program may continue to regulate the
Title III hazardous air pollutants now exempted from Federal
PSD by section 112(b)(6) if the State PSD regulations
provide an independent basis to do so. These State rules
would remain in effect unless a State revised them to
provide similar exemptions. Additionally, the Title III
pollutants continue to be subject to any other applicable
State and Federal rules; the exclusion is only for Part C
rules.
Finally, section 112(q) retains existing NESHAPS
regulations by specifying that any standard under section
112 in effect prior to the date of enactment of the 1990
Amendments shall remain in force and effect after such date
unless modified as provided in the amended section.
Therefore, the requirements of 40 CFR 61.05 to 61.08,
including preconstruction permitting requirements, for new
and modified sources subject to existing NESHAPS regulations
are still applicable.
In summary, the pollutants currently regulated
under the Act as of March 1991 that are still subject
to Federal PSD review and permitting requirements are:
a
carbon monoxide
nitrogen oxides
sulfur dioxide
particulate matter and PM-10
ozone (volatile organic compounds)
lead (elemental)
fluorides
sulfuric acid mist
total reduced sulfur compounds (including H2S)
11, 12, ll^Z, 114, 115
3
-------
• halons 1211, 1301, 2402
municipal waste combustor (MWC) acid gases, MWC
metals and MWC organics.
2. Hazardous Air Pollutants that are Regulated as One Component
of a More General Pollutant Under Other Provisions of the
Clean Air Act are Still Regulated
Any hazardous air pollutants listed in
section 112(b)(l) which are regulated as constituents of a
more general pollutant listed under section 108 of the Act
are still subject to PSD as part of the more general
pollutant, despite the exemption in Title III. For example,
volatile organic compounds (VOC's) (a term which includes
benzene, vinyl chloride, methanol, toluene, methyl ethyl
ketone, and thousands of other compounds) are still
regulated as VOC's (but not as individual pollutants such as
benzene, etc.) under the PSD regulations because these
pollutants are ozone precursors, not because they are air
toxics. Also, particulates (including lead compounds and
asbestos) are still regulated as particulates (both PM-10
and particulate matter) under the PSD regulations. Lead
compounds are exempt from Federal PSD by Title III, but the
elemental lead portion of lead compounds (as tested for in
40 CFR Part 60, Appendix A, Method 12) is still considered a
criteria pollutant subject to the lead NAAQS and still
regulated under PSD.
3. Toxic Effect of Unregulated Pollutants Still Considered in
BACT Analysis
Based on the remand decision on June 3, 1986 by the EPA
Administrator in North County Resource Recovery Associates
(PSD Appeal No. 85-2), the impact on emissions of other
pollutants, including unregulated pollutants, must be taken
into account in determining BACT for a regulated pollutant.
When evaluating control technologies and their associated
emissions limits, combustion practices, and related permit
terms and conditions in a BACT proposal, the applicant must
consider the environmental impacts of all pollutants not
regulated by PSD. Once a project is subject to BACT due to
the emission of nonexempted pollutants, the BACT analysis
should therefore consider all pollutants, including
Title III hazardous air pollutants previously subject to
PSD, in determining which control strategy is best.
-------
gSD Class I Boundary Issues
1. PSD Applicability Coverage Changes as Class I Area
Boundaries Change
Sections 162(a) and 164(a) of the amended Act specify
that the boundaries of areas designated as Class I must now
conform to all boundary changes at such parks and wilderness
areas made since August 7, 1977 'and any changes that may
occur in the future. The EPA does not believe that Congress
intended to create the turmoil which would occur if this
redesignation required the modification of permits issued
between August 7, 1977 and November 15, 1990, or the
resubmission and reevaluation of complete permit
applications submitted prior to enactment of the 1990
Amendments. Thus, for this reason, applications considered
complete prior to November 15, 1990 should be processed as
submitted without regard to the new Class I area boundaries.
Exceptions to this general policy are in the areas of
increment consumption and air quality related values
(including visibility), as discussed below.
For an applicant who submitted a complete PSD
application prior to November 15, 1990, if all other PSD
requirements are met, a permit may be issued based on the
Class I analysis as submitted in the application, unless the
reviewing authority finds, on a case-by-case basis, that
additional analysis is needed from the applicant to address
suspected adverse impacts or increment consumption problems
due to the expanded boundaries of the Class I areas. Any
existing increment violations in the new boundaries of
Class I areas must be remedied through a SIP revision
pursuant to 40 CFR 51.166(a)(3).
The PSD applications not considered complete before
November 15, 1990 must consider the impact of both existing
sources and the new or modified source on the Class I areas
as defined by the 1990 Amendments. Thus, the complete
application must consider the impacts on the entire Class I
area based upon the boundaries in existence on the date of
submittal of a complete application; as before, if a Class I
boundary changes before the permit is issued, the reviewing
authority may find, on a case-by-case basis, that additional
analysis is needed from the applicant to address suspected
adverse impacts or increment consumption problems due to
expanded Class I area boundaries.
-------
NSR Nonattainment Issues
1. NSR Construction Permit Requirements in Nonattainment Areas
In many States, the existing approved Part D permit
program by its terms covers all designated noriattainment
areas in the State, so a Part D permit program will
automatically apply to the new and expanded nonattainment
areas which are established under provisions of Title I of
the 1990 Amendments. Thus, until new rules are adopted for
these new or expanded nonattainment areas, States should
apply the requirements of their existing approved Part D
permit program. However, in other States, a Part D program
may be limited to specified areas and does not apply to new
or expanded areas. In these areas, States must implement a
transitional permitting program until their existing Part D
programs are revised to meet the requirements of the 1990
Amendments and expanded to cover all nonattainment areas in
the State. Otherwise, both the goals of Part D and
Congress' intent in creating new or expanded nonattainment
areas will be frustrated.
The EPA regulations already provide for these new or
expanded designated nonattainment areas because the Emission
Offset Interpretative Ruling (40 CFR Part 51, Appendix S)
governs permits to construct between the date of designation
and the date an approved Part D plan is made applicable to
the new nonattainment area [see 40 CFR 52.24(Jc)]. Until a
State's new Part .D plan is approved by EPA, if a State
wishes to issue a permit for a major stationary source or
major modification in a new or expanded designated
nonattainment area, the State should comply with the
requirements of Appendix S. Among other things, Appendix S
requires a major source seeking to locate in a nonattainment
area to (1) meet the lowest achievable emission rate for
such source, (2) provide offsets from existing sources in
the area, and (3) show that the offsets will provide a
positive net air quality benefit (see 40 CFR Part 51,
Appendix S, section IV.A). The EPA believes that in order
to carry out the intent of Appendix S, offsets should be
required for sources in all categories and in all instances
should be calculated on a tons per year basis (see
40 CFR Part 51, Appendix S, section IV.C).
Of course, neither Appendix S nor the existing NSR
rules incorporate the NSR changes mandated by Title I of the
1990 Amendments such as lower source applicability
thresholds, increased emissions offset ratios, new
definitions of major stationary source, and (for ozone
nonattainraent areas) requirements for nitrogen oxides (NOx)
-------
control and NOx emissions offsets. However, the 1990
Amendments require States to submit to EPA new NSR permit
program rules for ozone nonattainment areas by November 15,
1992; for PM-10 nonattainment areas by June 30, 1992; and
for most carbon monoxide (CO) nonattainment areas no later
than 3 years from the date of the nonattainment designation.
The EPA interprets this as an expression of congressional
intent not to mandate that States adhere to the more
stringent Title I NSR requirements in nonattainment areas •
during the time provided for State 'implementation plan (SIP)
development. Thus, for NSR permitting purposes in
nonattainment areas, the new NSR requirements in Title I are
not in effect until the States, as required by the Act,
adopt NSR permit program rules to implement the Title I
provisions. In addition, EPA encourages any State having
adequate authority for early implementation of the NSR
changes to do so as soon as possible.
If States fail to submit to EPA the new NSR permit
program rules for nonattainment areas by the deadlines in
the amended Act, EPA intends to impose in these
nonattainment areas a Federal implementation plan (FIP)
embodying such requirements. Currently, EPA intends to
propose revised NSR regulations at 40 CFR Part 52 that would
implement.the new Title I NSR requirements.under a FIP in a
State if that State's revised NSR rules to implement Title I
are not submitted in approvable form to EPA and made
effective within the State by the deadlines established by
the 1990 Amendments.
The area designation in effect on the date of permit
issuance by the reviewing agency determines which
regulations (Part C or Part D) apply to that permit. In
other words, the PSD permit regulations apply to pollutants
for which the area is designated as attainment or
unclassifiable, and the NSR nonattainment permit regulations
apply to pollutants for which the area is designated
nonattainment [see 40 CFR 51.166(i)(3) and (5); and
40 CFR 52.21(i)(3) and (5)]. Under these regulations, a PSD
permit for a pollutant cannot be issued in an area that is
designated nonattainment for that pollutant. For the
situation where a source receives a PSD or other permit
prior to the date the area is designated as nonattainraent,
the permit remains in effect as long as the source commences
construction within 18 months after the date of
nonattainment designation of the area, does not discontinue
construction for more than 18 months, and completes
construction within a reasonable time [see 40 CFR 52.24(g)
and (k)]. Although the PSD regulations provide for
extension of these deadlines, no extension would be
appropriate where the area has been designated as
nonattainment following permit issuance; Accordingly, if
-------
any of these construction provisions are not met, the PSD
permit or other permit will not be extended, and the source
(if subject to the nonattainment provisions) must obtain a
nonattainment permit prior to commencing (or continuing)
construction.
The 1990 Amendments create some new and expanded
nonattainment areas by operation of law. Other
nonattainment area changes are expected as the States and
EPA complete the designation process prescribed in amended
section 107(d). Because of these provisions, the dates
areas switch from attainment to nonattainment for NSR
purposes vary by pollutant. However, except for the two
instances where the Amendments create changes by operation
of law, the new designations and expanded boundaries will
not be effective for NSR purposes until EPA promulgates the
changes. The promulgations will be announced in the Federal
Register.
Congress create new PM-10 nonattainment areas
through designations that became effective upon
enactment of the 1990 Amendments on November 15, 1990
[see section 107(d)(4)(B)]. Specifically, Congress
designated Group I areas and areas where violations of
the PM-10 NAAQS had occurred prior to January 1, 1989 as
nonattainment. The EPA published a list of these PM-10
areas in a Federal Register notice (see 55 FR 45799,
October 31, 1990; see also 52 FR 29383, August 7, 1987). .
The EPA plans to publish a notice in the Federal Register
listing these areas as nonattainment in the near future, but
they are already considered nonattainment areas as of
November 15, 1990.
Similarly, the 1990 Amendments expand by operation of
law some CO and ozone nonattainment areas. However, these
changes did not become effective with passage but rather on
December 30, 1990. The specifics are as follows:
Section 107(d)(4)(A)(iv) of the amended Act
provides that, with the exception explained below,
ozone and CO nonattainment areas located within
metropolitan statistical areas (MSA) and
consolidated metropolitan statistical areas (CMSA)
which are classified as serious, severe, or
extreme for ozone or as serious for CO are
automatically expanded to include the entire MSA
or CMSA. This expansion became effective by
operation of law 45 days after enactment unless
the Governor submitted a notice by this deadline
of the State's intent to seek a modification of
the expanded boundaries pursuant to the procedures
set forth in section 107(d)(4)(A)(v). So if a
-------
8
State did not provide this notice, the
nonattainment boundaries of all serious, severe,
and extreme ozone nonattainment areas in the State
and all serious CO areas in the State expanded to
include the entire MSA or CMSA on December 30,
1990. If a State did provide timely notice, the
Administrator has up to 14 months from enactment
to resolve the State's challenge. Until EPA
promulgates a resolution of the State's challenge,
the old boundaries remain in effect.
Except for these two cases where new or expanded
boundaries have been created by operation of law,
nonattainment area changes will not be considered effective
until the changes are promulgated by the EPA. As to most
new areas or expansions of previously-designated
nonattainment areas, this will occur 240 days after
enactment [see section 107(d)(4)(A)(i) and (ii)]. Newly-
created oaone and CO nonattainment areas will be considered
part of a designated nonattainment area for NSR purposes at
the time of promulgation.
2. Status of Construction Bans
Pursuant to section H0(n)(3), an existing construction
ban that was imposed due to the absence of approved Part D
NSR rules remains in effect until a revised NSR SIP is
approved. Existing construction bans imposed due to
disapproval of primary sulfur dioxide NAAQS attainment plans
also remain in effect. A Federal Register notice will be
published soon announcing the status of construction bans in
general and also lifting specific bans where appropriate.
Should a construction ban be lifted in any area designated
as nonattainment, and the area lacks an approved Part D NSR
rule, the State should meet the requirements of
40 CFR Part 51, Appendix S, in issuing permits to major new
sources or major modifications prior to the adoption of NSR
rules meeting the requirements of the 1990 Amendments.
3. Federal Implementation Plans Remain in Effect
The NSR permitting program in an existing FIP remains
in effect until a SIP is approved or a revised FIP is
adopted.
4. Use of Previously-Approved Growth Allowances is Prohibited
3
Section 172(b) invalidates growth allowances in
existing SIP's in areas that received a SIP call prior to
enactment of the 1990 Amendments, or that receive one
thereafter. For NSR permits issued on or after November 15,
1990, previously-approved growth allowances cannot be used
-------
in these areas. Construction permits cannot be issued in
SIP-call areas under existing EPA-approved Part D programs
to the extent that such permits rely on previously-approved
growth allowances. Case-by-case emission offsets must be
obtained for any such permits, and other existing Part D
requirements must be met.
5. Existing NSR Permitting Rules Continue to Apply in the
Northeast Ozone Transport Region (NOTR)
The 1990 Amendments establish a single ozone transport
region comprised of the States of Connecticut, Delaware,
Maine, Maryland, Massachusetts, New Hampshire, New Jersey,
New York, Pennsylvania, Rhode Island, Vermont, and the CMSA
that includes the District of Columbia and part of the State
of Virginia. For this transport region, including all
attainment areas within its boundaries, new
section 184(b)(2) specifies that any stationary source that
emits or has the potential to emit at least 50 tons per year
of VOC's shall be considered a major stationary source and
subject to the requirements which would be applicable to
major stationary sources if the area were classified as a
moderate ozone nonattainment area. For NSR purposes, the
requirements of section 184(b)(2) are not in effect in a
State until the State submits a new or revised SIP that
includes the requirements (or EPA imposes a FIP implementing
those requirements). A State in the NOTR has until
November 15, 1992 to submit to EPA the new or revised NSR
rules addressing the new requirements.
-------
18Q74 Federal Register / Vol. 57. Na" 82 r/iJucisday; "April 28. 1992 / Proposed Rules'.
problems or creating excessive energy,,. ^y,,,
demands. (An otherwise available PM-lOd -, i
control technology may not be i
other environmental impacts
mably be mitigated) For analytic ".-.'„.;", .
. . >ses. a State may consider a PMrlp JV,\
control measure technologically infeasibleit"
considering the availability (and cost) of
mitigative advene impacts of that control on-'
other pollution media, the control would not-"
in the State's reasoned judgment, provide a ..,
net environmental benefit In many instances,
however. PM-W control technologies have'"
known energy penalties and adverse effects -
on other media, but such effects and the cost
of their mitigation are also known and have "•
been borne by owners of existing sources in
numerous cases. Such well-established -" •'•
adverse effects and their costs are normal ~ ~ •
and assumed to be reasonable and should
not. in most cases, justify nonnse of the PM-
10 control technology. The costs of preventing
adverse water, solid waste and energy - *
impacts will also influence the economic
feasibility of the PM-10 control technology.
Alternative approaches to reducing.'-.-r
emissions of particulate matter including PM-
10 are discussed in Control Techniques for -
Particulate Emissions from Stationary ., • -
Sources—Volume 1 (EPA-«50/3-81-005a) and
Volume II (EPA-450y 3-81-0050). September
1982. The design, operation and maintenance
of general particulate matter control systems
such as mechanical collectors, electrostatic
precipitators, fabric filters, and wet scrubbers
are discussed In Volume L The collection .~
efficiency of each system is discussed as a
unction of particle size; Information is also
senled regarding energy and • •
viranmental considerations and procedures
forestimaling costs of particulate matter
control equipment The emission. ' .- . -
characteristics and control technologies -
applicable to specific source categories are :
discussed in Volume EL. Secondary ,,-;.. .
environmental impacts are also discussed. '••
Additional sources'of Information on ; .
control technology are background ?-t^.- -
information documents for new source
performance standards and Identification.
Assessment and Control of Fugitive
Particulate Emissions, EPA-600/8-86-023,
August 1986. "V ,...,
In some instances, control technologies
more modem or more advanced than those -
described in the documents referenced may
exist. In such cases, the State's RACT -
analysis for a source should consider such
available technology. . • •
determined by evidence that other sources in •
a source category have in fact applied the ' .
control technology in question. < -...
The capital costs, annualized costs, and
cost effectiveness of an 'emission reduction •
technology should beT considered in..'-," , -
determining JU'economlc feasibility. The .
OAOPS Control Cost ManuaLFourth Edition.
EPA-450/3-flO-006,January 1994 describes
procedures for determining these costs. The
above'costs should be. determined for all _..,...
technologically feasible emission reduction "'.
'
States* may "give substantial weight Ufcosl' v
- effectiveness hi evaluating the] economic. ~ ." 7
•- feasibility of an emission reduction-V,;^ /,. „-
• technology. The cost effectiveness of a'
technology is its annuatized cost (S/year)
• divided by the amount of PM-10 emission
reduction (i.e., tons/year) which yields a cost'.
. per amount of emission reduction (S/ton).
Cost effectiveness provides a value for each _
• emission reduction option that is comparable' -
' with other options and other facilities.
, . If a company contends that it cannot afford
: the technology that appears4o be RACT for
•• that source or group of sources, the claim
should be supported with such information as
the impact ore..,_..,..,,,
1. Fixed and variable production costs ($/
"Bit).',' ~. , ;/ , -;'' ; [j.- . - - o
2. Product supply'and demand elasticity, ?
:• 3. Product prices (cost absorption vs. cost
pass-through),^
- 4. Expected costs Incurred by competitors.-' -'
-, 5. Company profits, and..-; - . • ",- '
6. Employment .-.it - - - ;
If a company contends that available
control technology is not affordable and
would lead to closing the facility, the costs of
closure should be considered. Closure may
incur costs for demolition, relocation.
severance pay. etc. ;
f Appendix D •
; United States Environmental Protection
<', Agency, Office of Air Quality Planning and
!. Standards. Research Triangle Park. North •
( Carolina 27711. ,:. ... _-..--'
March 11,1991. -•-• - ,->=- . - • •
Memorandum '. ' •
Subject New Source Review JNSR) Program
Transitional Guidance. 1' • :,.-•.-.
From: John S. Seitz. Director. Office of Air
Quality Planning and Standards (MD- •
10).-,...- -.
To: Addressees.. • . •. -. •••
The Clean Air Act Amendments of 1990
. _ ...... . . (1990 Amendments) make numerous changes
Economy FeaMy ^. . s. , to the NSR requirements of the prevention^
Economic feasibility considers theicostof:;,-/,._ significant deterioration (PSD) and -•-::• _.
reducing emissions and the difference in.-. -,'-. • nonattainment area programs. The 1990 .".-".
cosls between the particular source and other .. Amendments create new. and expanded" i.-...:.
similar sources that have implemehled^.v.^.-^;. nonattainment areas, extend PSD coverage to
emission reduction! As discussed above, EPA, -. current Class I area, boundaries, and mandate •
presumes that it is reasonable for 6imilarj.< >f;a PSD exemption for certain hazardous air -•'
sources to_beaf similar costs of emission ;«;,'j.^ pollutants. The Environnient.Protection :-. -.•:•,_••
Agency (EPA) intends to propose by :•....>:,
September of this year a regulatory package
that will implement these and other changes
to the NSR prpviskjns. Final adoption of ••'-•
these revised regulations is projected for " '•'"-
August 1992. In the interim period between •
passage of the 1990 Amendments and
_
reductions. Economic feasibility rests very
little on the abibty of a particular source-to.,.,;
"afford" to reduce emissions to the level of -•>
similar sources. Less efficient sources would .'
f rewarded by having to bear lower. -n..:-^M
ission reduction costs if affordabUity were •
given high consideration. Rather, economic . .
feasibility for RACT purposes is largely, :r., ..--•>
EPA expects that numerotts Issues regarding
the 1990 Amendments 'will arise-This .
memorandum sets forth" the Agency's position
on the most important of these transitional
issues liwjhring the NSR program. ' : ' ~''
This guidance document does not ',
supersede existing State regulations' of '
approved State implementation plans. ' '
However, in some" cases, it calls upon States '
to implement then- NSR programs in a manner
consistent with provisions of the 1990 . '
Amendments' that are applicable immediately ^
and with the requirements that flow directly
from these provisions. Nonetheless. the ...
policies set out iri this transition '-..' ~ '
memorandum" are in tended solely as guidance
and do not represent.ftnal Agency action.
They are not ripe for judicial review for this *
reason. Moreover; they are not intended, nor
can they be relied upon, to create any rights .
enforceable by any party hi litigation with .
the United States. The EPA officials 'may
decide to follow the guidance provided in this
memorandum, or to act at variance with the
guidance, based on an analysis of specific
.circumstances. The Agency also may change
this guidance at any time without public
notice. ""-"- - -.' J. ' ' ',.
The Regional Offices should send this '
guidance document to their States. Questions
from States and applicants concerning •'. •
specific issues and cases should be directed
to the appropriate EPA Regional Office. If -, (
you have any general questions, please .....
contact Mr. Michael Sewell of the New .
Source Review Section at FTS 629-0873 or
(919) 541-0873.
Attachment
adoption of the Agency's final regulations.
Director. Air. Pesticides, and Toxics .
Management Division. Regions L W. and
VI
Director. Air and Waste Management •_',''
• Division. Region II ; . ", -'.-.-•.
Director, Air Management Division, Regions .
UI and IX :.. .'. . „ ... „ .-, '. .
Director. Air and Radiation Division. Region 1 ,.
-- V / .';. .,»-..,:!'>-".,-,,
Director, Air end Toxics Division, Regions
VlI,VlILandX '..."„''. . ,. r ,
cc . • - - ^.- , ..-• .„ L ..-, .
J. Calcagni
R. Campbell
W. Laxton . . .,••.-.;
E Lillis ....
). Rasnic
L. Wegman . , .,..--.
J.Weigold
. NSR Contacts ... . . , , ^^ ^;>. ,~: ,. ,.
Corrections to Original Document: Two .•",*-,'
-. errors in the document as issued on March Tti ;• i
1,1991 have been corrected in this copy..pn-'^c£n..
4_page 2 on the last Une. "CFC112" is changedt"--;
,. to correctly read ~CFC 113": On page 8 in?, f: A
item 4. the cite "Section 172(br is changed to 1'
•.correctly read "Section ITStb)".".. [' '.„ '.[
New Source Review (NSR) Transitional
• Guidance '» •'' w .T^HPX^-^^-"-' '-'.-"•;• A ,
-.-?.!:. v» !:'r = .,-.Kji::f»r.' .« ;, V3.->t?fv -• r-"G- ' -?'
. Toxics and NaUooal Emissions Standards for . -
Hazardous Air Pollutants (NESHAPS) Issues •
• 1. Section 112 Hazardous Air Pollutants are •
No Longer Considered Regula'ed Pollutants
-------
18076 Federal Register / Vol. 57. No. 82 / Tuesday. April 28, 1992 / Proposed Rules
so a Pan D permit program will automatically
apply to the new and expanded
nonattaimnent areas which are established
under provisions of Title I of the 1990
Amendments. Thus, until new rules are
adopted for these new cr expended
nonattainment areas. States should apply the
requirements of their existing approved Part
D permit program. However, in other States.
a Part D program may be limited to specified
areas and does not apply to new or expanded
areas. In these cases. States must implement
a transitional permitting program until their
existing Part 0 programs are revised to meet
the requirements of the 1S90 Amendments
end expanded to cover all nonattaimnent
areas in the State. Otherwise, both the goals
of part D and Congress* intent in creating
new or expanded-nonattainment areas will
be frustrated.
The EPA regulations already provide for
these new or expanded designated
r.onsttainment areas because the Emission
Offset Interpretations Ruling (40 CFR part 51.
appendix S) governs permits to construct
between the date of designation and the date
an approved Part 0 plan is made applicable
to the new nonattaimnent area (see 40 CFR
52^4(k)J. Until a State's new Part D plan is
approved by EPA. if a State wishes to issue a
permit for a major stationery source or major
modification in a new or expanded
designated nonattainment area, the State
should comply with the requirements of
appendix S. Among other things, appendix S
requires a .-aejor source seeking to locate in a
nonat'.ainmsnt area to (1) meet the lowest
achievable emission rate for such source, (2)
provide offsets from existing sources in the
area, and (3) show that the offsets will
• provide a positive net air quality benefit (see
40 CFR part 51. appendix S. section IV.A).
The EPA bebeves that in order to carry out
the intent of appendix S, offsets should be
required for sources in all categories and in
all instances should be calculated on a tons
per year basis (see 40 CFR part 51, appendix
S. section W.C).
Of course, neither appendix S nor the
existing NSR rules incorporate the N'SR
changes mandated by Title I of the 1990
Amendments such as lower source -
applicability thresholds, increased emissions
offset ratios, new definitions of major
stationary source, and (for ozone
nonattainment areas) requirements for
nitrogen oxides (NOx) control and NOx
emissions offsets. However, the 1990
Amendments require States to submit to EPA
new NSR permit program rules for ozone
nonattainment areas by November 15,1992;
for PM-10 nonattainment areas by June 30,
1992; and for most carbon monoxide (CO)
nonattainment areas no later than 3 years
from the date of the nonattainment
designation. The EPA interprets this as an
expression of congressional intent not to
mandate that Stales adhere to the more
stringent Titk 1 NSR requirements in
nonattainment areas during the time provided
for State implementation plan (SIP)
development. Thus, for NSR permitting
purposes in nonattainment areas, the new
NSR requirements in Title I are not in effect
until the States, as required by the Act, adopt
NSR psnnit program rules Jo implement the
Title I provisions. In addition, EPA
encourages any State having adequate
authority for carry implementation of the NSR
changes to do so as soon as possible.
If States fail to submit to EPA the new NSR
permit program rules for nonattainment areas
by the deadline* in the amended Act. EPA
intends to impose in these nonattainment
areas a Federal implementation plan (FIP)
embodying such requirements. Currently.
EPA intends to propose revised NSR
regulations at 40 CFR part 52 that would
implement the new Title I NSR requirements
under a FIP in a State if that State's revised
NSR rules to implement Title I are not
submitted in approvable form to EPA and
made effective within the State by the
deadlines established by the 1990
Amendments.
The area designation in effect on the date
of permil issuance by the reviewing agency
determines which regulations (Fart C or Part
D) apply to that permit. In other words, the
PSD permit regulations apply to pollutants for
which the area is designated as attainment or
unclassifiable. and the N'SR nonattjrnment
permit regulations apply to pollutants for
which the area is designated nonattainment
(see 40 CFR 51.166(i) (3) and (5); and 40 CFR
5i21(i) (3) and (5)). Under these regulations, z
PSD permit for a pollutant cannot be issued
in an area that is designated nonattainment
for that pollutant For the situation where a
source receives a PSD or other permit prior to
the date the area is designated as
nonattainment, the permit remains in effect
as long as the source commences
construction within 18 months after the date
of nonattainmenl designation of the area.
does not discontinue construction for more
than 18 months, and completes construction
within a reasonable time (see 40 CFR 52.24 (g)
and (kj). Although the PSD regulations
provide for extension of these deadlines. DO
extension would be appropriate where the
area has been designated as nonattaiomer.t
following permit issuance. Accordingly, if any
of these construction provisions are no! met,
the PSD permit or other permit will no! be
extended, and the source (If subject to the
nonattainment provisions) must obtain a
nonattainment permit prior to commercing
(or continuing) construction.
The 1990 Amendments create some new
and expanded nonattainment areas by
operation of law. Other nonattainment area
changes are expected as the States and EPA
complete the designation process prescribed
in amended section 107(d). Became of these
provisions, the dates areas switch from
attainment to nonattainment for NSR
purposes vary by pollutant. However, except
for the two instances where the Amendments
create changes by operation of law, the new
designations and expanded boundaries will
not be effective for NSR purposes until EPA
promulgates the changes. The promulgations
will be announced in the Federal Register.
Congress created new PM-10
nonattainment areas through designations
that br^ame effective upon enactment of the
1990 Amendments on November 15.1990 (see
section 107(d)(4)(B)). Specifically. Congress
designated Group I areas and areas where
violations of the PM-10 NAAQS had
occurred prior to January 1.1989 as
nonattainmenL The EPA published a list of
these PM-10 areas in a Federal Register
notice (see 55 FR 45799. October 31,1990; see
also 52 FR 29383. August 7.1987), The EPA
plans to publish a notice in the Federal
Register listing these areas as nonattainmenl
in the near future, but they are already
considered nonattainment areas as of
November 15.1990.
Similarly, the 1990 Amendments expand by
operation of law some CO and ozone
nonattainoient areas. However, these
changes did not become effective with
passage but rather on December 30,1990. The
specifics are as follows:
Section 107(d)(4)(A)(iv) of the amended
Act provides that, with the exception
explained below ozone and CO
nonattainment areas located within
metropolitan statistical areas (MSA) and
consolidated metropolitan statistical areas
(CM8A) which are classified as serious.
severe, or extreme for ozone or as serious
for CO are automatically expanded to
include the entire MSA or CMSA. This
expansion became effective by operation of
law 4S days after enactment unless the
Governor submitted a notice by this
deadline of the State's intent to seek a
modification of the expanded boundaries
pursuant to the procedures set forth in
section 10?'d)(4)(A)(v). So if a State did not
provide this notice, the nonattainment
boundaries of all serious, severe, and
extreme ozone nonattainment areas in the
State and all serious CO areas in the State
expanded to include the entire MSA cr
CMSA on December 30,1990. If a State did
provide timely notice, the Administrator
has up to 14 months from enactment to
resolve the State's challenge. Until EPA
promulgates a resolution of the State's
challenge, the old boundaries remain in
effect.
Except for these iwo cases where new or
expanded boundaries have been created by
operation of law. nonattainment area
changes will not be considered effective until
the changes are promulgated by the EPA, As
to most new areas or expansions of
previously-designated nonattainment areas,
this will occur 240 days after enactment (see
section l07(d)(4)(A) (f) and (ii)). Newly-
createcl ozone and CO ncnatlainment areas
will be considered part of a designated
nonattainment area for NSR purposes at the
time of promulgation.
2. Status of Construction Bans
Pursuant to section 110(n)(2). an existing
construction ban that was imposed due to the
absence of approved Part D NSR rules
remains in effect until a revised NSR SIP ia
approved. Existing construction bans
imposed due to disapproval of primary sulfur
dioxide NAAQS attainment plans also
remain in effect A Federal Register notice
will be published soon announcing the status
of construction bans in general and also
lifting specific bans where appropriate.
Should a construction ban be lifted in any
area designated as nonattainment, and the
area lacks an approved Part D NSR rule, the
State should meet the requirements of 40 UrX
part 51. appendix S. in issuing permits to
-------
Federal Register / Vol. 57. No. 82 / Tuesday. April 28. 1992 / Proposed Rules
18077
. major new sources or major modifications
prior to the adoption of NSR rules meeting
the requirements of the 1990 Amendments.
3. Federal Implementation Plans Remain in .
Effect •
The NSR permitting program in an existing
FIP remains in effect until a SO1 is approved
or a revised FIP Is adopted. -'
- .. * .-• • -* . - *
4. Use of Previously-Approved Growth
Allowances b Prohibited
Section 173(b) invalidates growth
allowances in existing SIP'S in areas that
received a SIP call prior to enactment of the
1990 Amendments, or that receive one
thereafter. For NSR permits issued on or after
November 15,1990. previously-approved
growth allowances cannot be used in these
areas. Construction permits cannot be issued
in Sff-call areas under existing EPA-
approved Part D programs to the extent that
such permits rely on previously-approved
growth allowances. Case-by-case emission '
offsets must be obtained for any such
permits, and other existing Part D
requirements must be met.
5. Existing NSR Permitting Rules Continue To
Apply in the Northeast Ozone Transport
Region (NOTR)
The 1990 Amendments establish a single
ozone transport region comprised of the
States of Connecticut Delaware. Maine.
Maryland. Massachusetts. New Hampshire.
New Jersey. New York. Pennsylvania. Rhode
Island. Vermont, and the CMSA that includes
the District of Columbia and part of the State
of Virginia. For this transport region.
including all attainment areas within its
boundaries, new section 184(b)(2) specifies
that any stationary source that emits or has
the potential to emit at least SO tons per year
of VOCs shall be considered a major
stationary source and subject to the
requirements which would be applicable to
major stationary sources if the area were
classified as a moderate ozone
nonattainment area. For NSR purposes, the
requirements.of section 184(b)(2) are not in
effect in a State until the State submits a new
or revised SIP that includes the requirements
(or EPA imposes a FIP implementing those
requirements). A State in the NOTR has until
November IS, 1992 to submit to EPA the new
or revised NSR rules addressing the new
requirements.
Appendix E
/. Introduction
The EPA is issuing this CTC document
under section 182(b) of the Clean Air Act. as
amended. Under section 182{b). States must
develop RACT rules for sources "covered by
a CTC document issued by the Administrator
between November 15.1990 and the date of
attainment" The State must submit these
RACT rules "within the period set forth by
the Administrator in issuing the relevant CTC
document" One type of "CTG document" is a
CTG: a CTG is a technical document that sets
forth a presumptive level of RACT controls. • •
for a source category. The Act provides that
EPA must issue eleven CTG's by November -
IS. 1993. In addition, the Act specifically
requires the Agency to prepare CTG's for
aerospace coatings and ship building and
repair within the same timeframe. v • ,';
This document is not a technical CTG. but
rather a second type of CTG document—a
document that lists the eleven CTG's EPA
anticipates publishing in accordance with
section 183(a) and establishes time tables for
submittal of RACT rules for sources that are
not ultimately covered by a CTG issued by
November 15.1993. The EPA believes that it
is necessary to issue this document at this
time so that States will be able to determine
which sources and source categories fit
within the RACT rule submittal requirement .
for sources that EPA expects to be covered
by a post-enactment CTG.
If. List of Eleven CTG's
The EPA plans to issue the following CTC's
in accordance with section 183(a).
1. Synthetic organic chemical '
manufacturing industry (SOCMI) distillation:
2. SOCMI reactors;
3. Wood furniture:
4. Plastic parts coating (business machines):
5. Plastic parts coating (other):
6. Offset lithography:
7. Industrial wastewater
8. Autobody refinishing:
9. SOCMI batch processing:
10. Volatile organic liquid storage tanks:
and
11. Clean up solvents.
///. Authority
Under section 182(b)(2). States must adopt
RACT rules for three general groups of
sources: (A) Those covered by a post-
enactment CTG document (b) those covered
by a pre-enactment CTG: (c) "all other major
stationary sources of VOC's." Section
182(b)(2) also establishes the timing for State
submittal and source implementation of
RACT rules for these three groups. For
sources covered by a post-enactment CTG
document the State must submit RACT rules
within the period established in the relevant
CTG document For the other two groups, the
Act provides specific dates for submittal.
November 15,1992. and implementation, no
later than May 31.1995.
Alone, subparagraphs (A). (B) and (C) seem
to set forth three distinct groups of sources.
However, the submittal dates under the
second portion of the provision potentially
could blur the line between these three
groups if EPA does not issue before
November 15.1992, a CTG document
covering all sources for which it plans to
issue a CTG under section 183(a). At that
time. States would need to submit RACT
rules for all other major stationary sources—
those for which neither a pre-enactment CTG
nor a post-enactment CTG document had
been issued.
The EPA's obligation to issue the eleven
CTG's does not ripen until November 15.
1993. and EPA does not anticipate issuing all
of these CTG's before November IS. 1992.
Therefore, to the extent EPA does not issue a
CTG document before November 15,1992.
States would be required to submit non-CTG
RACT rules for sources that could in the
future be covered by a CTG. In addition, at
the time the CTG document was issued, the
State could then be required to submit a new
rule, consistent with the CTG document
thereby duplicating its earlier effort.
In order to relieve the States from being
required to duplicate rules and to relieve
sources from potentially being subject to two
different requirements within a short period.
EPA is issuing this CTG document to retain
the sharp distinction between the three
different groups in subparagraphs (A). (B).
and (C). If a State believes that one of the
eleven CTG's listed in Section Q will cover a
particular major source, the State should
follow the timing provisions of Section IV.
below for submittal of a rule applicable to
that source. The State should identify those
sources in its November 15.199Z RACT
submittal.
IV. Time Table
The EPA is establishing the following
general time table for States to submit RACT
rules for sources that it identifies in a
November IS. 1992 submittal as being a
source covered by a post-enactment CTG
document
(1) on November 15.1992. the State must
submit a list of major stationary sources that
it anticipates will be subject to one of the
CTG's listed in Section Q, which EPA plans to
issue by November 15,1993.
(2) For those major sources on the list
submitted by the State in the 1992 submittal
that are not covered by a CTG that EPA has
issued by November 15,1993. the State must
submit a RACT rule by November 15.1994
that requires implementation of RACT by
May IS. 1995.
(3) For sources covered by a CTG issued
. under section 183(a) and for which the State
has not by the date of such issuance.
adopted an approvable RACT rule, the State
must submit a RACT rule in accordance with
the time schedule set forth in the relevant
CTC.
(4) For sources subject to a RACT rule that
the State adopted and EPA approved under
section 182(b)(2) prior to EPA's issuance of an
applicable CTG, EPA will work with the
State to determine whether the existing rale
should be revised once a CTG has been
issued that would apply to that source.
(FR Doc. 92-9866 Filed 4-27-92; 8:45 am]
BILLING COOE 6SSO-50-4J
-------
^<° St'f,
0 — f^ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
1 • Office of Air Quality Planning and Standards
* Research Triangle Park. North Carolina 27711
'<"*°''0 ._
MEMORANDUM
SUBJECT: New Source Review (NSR) Program Supplemental
Transitional Guidance on Applicability^ of New Part D
NSR Permit Requirements
FROM: John S. Seitz, Directoi
Office of Air Quality P'^ijlhing' and Standards (MD-10)
TO: Addressees
The Clean Air Act Amendments of 1990 (1990 CAAA) made
numerous changes to the NSR requirements in the Clean Air Act
(Act). To address some immediate concerns generated by the
1990 CAAA, the Environmental Protection Agency (EPA) issued an
initial NSR transitional memorandum on March 11, 1991, entitled
"New Source Review Program Transitional Guidance." This
memorandum supplements that effort by clarifying EPA guidance
regarding the permitting of new or modified sources in situations
where a State does not submit a State_ implementation~plan("SIP).
revision implementing the"augmented7Part D NSR provisions of the
1990 CAAA by" the applicable statutory deadline/ The statutory
deadlines "for"submission of revised NSR SIP'sare listed in the
attachment. Moreover, as more fully set forth in the March 11,
1991 transitional memorandum, this supplemental memorandum sets
forth nonbinding guidance that does not create any rights or
otherwise predetermine the outcome of any procedures. Also, many
of EPA's interpretations of the new Part D NSR requirements are
in the "General Preamble for the Implementation of Title I of the
Clean Air Act Amendments of 1990" (General Preamble) (see
57 FR 13498, 13552-556, April 16, 1992). These interpretations
are not affected~by this memorandum.
Title I of the 1990 CAAA requires that States with
nonattainment areas or areas in the Northeast Ozone Transport
Region (NOTR) submit to EPA, by specified deadlines, augmented
new source permit rules which meet the amended requirements of
Part D of Title I of the Act. For example, for NSR permit
-------
programs in most ozone nonattainment areas and the NOTR,
section 182 of the Act specifies increased offset ratios, lower
source applicability thresholds, and presumptive treatment of
nitrogen oxides (NOZ) as ozone (03) precursors. For ozone, the
1990 CAAA require that States submit SIP's meeting the amended
Part D NSR requirements by November 15, 1992.
Where States do not submit the Part D NSR SIP by the
applicable statutory deadline (and for purposes of determining
the approvability of revised NSR SIP's) ,fsourcelf that have
submitted complete permit applications fas determined by the -
reviewing authority) by the submittal deadline may receive final-
permits under existing State NSR rules.._> In th~is situation/such
sources' will be considered by EPA to be in compliance with the
Act without meeting the amended Part D NSR provisions of the 1990
CAAA, provided they meet the following conditions:
1. The State and source move expeditiously towards final
permit issuance.
2. Construction begins no later than 18 months from the
date of permit issuance unless an earlier time is required under
the applicable SIP.
3. Construction is not discontinued for a period of
18 months or more.
4. Construction is completed within a reasonable time.
States may not grant permit extensions beyond these time periods
unless the permittee is required in a federally-enforceable-.
manner to meet the new Part D NSR provisions.
Sources approved for construction in distinct phases require
additional clarification. Individual phases of a construction
project are considered either as "mutually dependent" or
"mutually independent" from the other phases. Mutually-dependent
phases are those where construction of one phase necessitates the
construction of the other in order to complete a given project or
provide a different type (not level) of service. An example of a
project with possible mutually-dependent phases is a kraft pulp
mill, where all phases of construction are needed to complete the
project and produce paper. On the other hand, an example of a
project with possible independent phases is a three-boiler,
electric power plant, where each boiler could be a mutually-
independent phase providing different levels of electrical power.
-------
For phased construction projects with complete permit
applications submitted by the Part D NSR statutory deadline for
SIP submittal, EPA will grandfather individual phases from
meeting the new Part D NSR requirements, provided:
1. For mutually-dependent phases, if one of the facilities
has met the construction conditions of this guidance (e.g.,
begins construction within 18 months of permit issuance), then
all dependent phases specifically permitted at the same time will
hold such status.
2. For mutually-independent phases, each phase that meets
the construction conditions of this guidance (e.g., begins
construction of that phase within 18 months of initial permit
issuance) will hold such status.
Also, under today's guidance, where states miss the statutory
deadline for Part D NSR SIP submittal, for sources that have not
submitted complete permit applications by the SIP submittal
deadline,\EPA-"will~ also "consider the source to be in compliance
jWithrthe" Act where the source obtains from the State a permit
that is consistent with the substantive new NSR Part D provisions
(in the__19_9Q_^CAAA^__JThe substantive new provisions are the new
applicability thresholds, the new offset ratios, the offset
requirements of section 173, and the NOX requirements of section
182 (f) for most O3 nonattainment areas and the NOTR."
The State, of course, must be sure that all permits contain
the minimum requirements for a Part D NSR permit as required by
the current SIP or, where applicable, the Emission Offset
Interpretative Ruling [40 CFR Part 51, Appendix S (Offset
Ruling)].'
Please note that the Act allows States to implement the new
Part D NSR provisions prior to the statutory deadlines and in a
manner more stringent than EPA guidance or rules. Thus, today's
guidance does not apply in any State to the extent that the
State's own rules or transitional guidance is more stringent.
1 The Act, as amended, requires offsets for all source
categories, and emissions reductions are on a tons-per-year
basis. To the extent Appendix S is incompatible with these
statutory provisions, it must be considered superseded by the
1990 CAAA.
-------
The Regiohal Offices should send this memorandum to their
States. Questions concerning specific issues and cases should be
directed to the appropriate EPA Regional Office. If you have any
general questions, please contact Mr. Michael Sewell of the New
Source Review Section at (919) 541-0873.
^^^MMHM^M^VVMIMIIMM*!
Attachment
Addressees
Director, Air, Pesticides and Toxics Division,
Regions I, IV, and VI
Director, Air and Waste Management Division, Region II
Director, Air, Radiation and Toxics Division, Region III
Director, Air and Radiation Division, Region V
Director, Air and Toxics Division, Regions VII, VIII, IX, and "~
-------
ATTACHMENT
As required by the Clean Air Act Amendments of 1990, the
statutory deadlines for States to submit new Part D new source
review (NSR) rules to the Environmental Protection Agency are:
• May 15, 1992 for sulfur dioxide (SO2) nonattainment
areas without approved SO2 SIP's prior to enactment
[see section 191(b) ];
• November 15, 1993 for all other S02 nonattainment areas
designated prior to enactment [see section 172(b)];
• May 15, 1992 for nitrogen dioxide (NO2) nonattainment
areas [see section 191(b)];
• July 6, 1993 for lead nonattainment areas designated on
January 6, 1992 [see section 191(a)];
i T June 30, 1992 for particulate matter (PM-10)
nonattainment areas [see section 189(a)(2)(A)];
• November 15, 1992 for ozone nonattainment areas and
transport regions [see section 182(a)(2)(C)];
• November 15, 1992 for carbon monoxide (CO)
nonattainment areas with a design value above 12.7
parts per million (ppm) [see section 187(a)(7)]; and
• November 15, 1993 for CO nonattainment areas with a
design value of 12.7 ppm or less [see section 172(b)].
For future nonattainment designations, Part D NSR rules are
due within 18 months from redesignation for all SO2, N02, PM-10,
and lead nonattainment areas [see sections 189(a)(2)(B) and
191(a)], and within 2 years of redesignation for ozone [see
section 181(b)(l)] and many CO nonattainment areas (within
3 years for CO nonattainment areas with design values less than
12.7 ppm) [see section 186(b)(l)].
-------
REFERENCES FOR SECTION 10.3
-------
_
§ E
«PH r*
4-1 M
U O
o ^
o >
" c
b Ed
s
0
CO
h-
CE
<
CL
T—
o
1—
-5
O
CO
«
•0
Revise
o
2
Z
<
Z
O
(_>
t—
LU
r>
o
o
Li.
O
z
0
s
LJu
Q
o
LJ
<
CQ
ot
0.
s
LU
LU
0
U_
O
c
LU
U.
LU
LU
C£
^>
LU
0
z
o
o
,_r
5
u.
O
,
o
S 5
_ cc
o —
"u O
_
v s: o -
I O o |
I
-------
•o
•o
«n
tan
5-
c
0
o>
O
03
aac
i QC «t-
i * O gS
) at u «H
Wffi ;;jj| ;j.
3 ° «•='
§£SSSlo
*iM*5
ellli!^
•S eJ23-cit53=cSoiio
S 5Si 8 « .SS^P^,,!
a£Q ^=™o5
jj^^vKtCO^,.!-^ CO
S^E-oS-S^^^^^^cl
Ss^sSbSo^oj^c
-"v.~?3-.i5tOoS
sg _h a^«-0
"S £ £"> Ed-** o « 3^
Jc£ a ^.«_ ° «^ & o
*-HS o ^T^ja-S"^^
a'tllllSSla
r^ . ??*2 « y «. r: X 7i
S
V) ^-^ ™
-------
O>
O
_»
"o
ol
2
1:
I
o
5) 3 2
^ •* C """ ^* " •>!> ** f rt »*
"s o —fe f-K ems
8p3-*S««sit.s
'fi
*J'S.C 3 "> 3 £ •fc>""" c 3 *" C 3 S M 3
^ *7\ *^ *i C3 ^-«
? igi»i!iSHis;ji:,»«;;: 1^1:11:1 p
g °"-Sc£-£St^>,CdS-c""g-5S5So £JsaMg§£*< £«
1 ^^SjgM^aCgc-xiSflegfeoa^i: cg*££ fg eg
| •§ccl-£<«»sl^stSg.--g
gl«
i>
4J>
1
C.
d
o
orage
.H-C
. U5
H
c
"E
to
c
1
ag
fll L^
la
— c
c
8
S
*T
0
*J
o
.fcj
u
u
"5
S
d
u
.J
U
B
o
^~*
•J5E
o
*O us
O M
a
_c
*i
u
£
t,
Tl«
O
co
jrjsynu — ^"0
o-fcao^i^°
OJ_d«>c.O'2 .
I^tfe-l=l
3:§4^d-£3
?S55
-------
m
ten
u
C
O
o '-'in "3 g « w !r; « S "=5^,r, «}•"
i ~- — S'-- en wo « > ^, « ^ £s "-^ c
3 e-o-o«£=: g u S* o-2 « «-o^^=..S>
c ~ec~«v-2«3oo°'cc;ii~c~ « = •<:> « a" c" c~.n £
~iJ-0£rtSoo-gcgfei«ic«>>«o-a'-
*1^5»*:S*E*E'S S-l.TSSSSti
Ea & O C «~* G bfi £X «S 03 4) y *?S O ^3 ^* C aj
flj Q^l^Oeflo]S2*^iC'^'M«>JM£fl,— 7<
^C^fe^^^'^oO0'^ S*
•**
?
suits.
(13X1) Baseline concert
M
C
O V
73 C
2?
*• w
c3
gfi
C <]
85
^£
c
£2
£, ,§ w
C c d ° E fe~ S S = - C 8 « 3
0=G MO-^-C * 2 X ;v££vu»
1*
decreases at any statlona
V
£
o
b9
U
O
j=
c
u
..^
u
u
—
C '""*
«o
•o
i.'S'S C
Itffi
li§|
c •> Q
TSo4S-
o e csi" c?7 E
30 «^-« -r•-«
O C S. O l- 5
« w c 57 u— «
k, »- 4) *j o! w «J
3£i£22Sgg§8i«°2£°-g|1
'^l^!lii!!l!i!;p
ii^c
«0
O
CO
•Ss
Slsil««l|sS^ilS!l|
ol^^^f^fUl. =g'^ri
8-1 SJ g
jj i__ * —' ^i
?jg«^ii3ii:iis
~ & d -o ™ o!
o »- G 3 c I..O
5^°-^2?=
« 3 gi: «c a
- -; a ° <« C d =1 -
5° a w_- o « c
ECp2o)S?S5
0 !i££;-.*£&,
-------
•o
•o
ccgcgcS.sa*
4) 41 to
41
g"
I •-( i—« ^H *O
O'ii _ _
O nT nOU iTX£J .; 3
•2£>,-~3iiS
ISas^s :a§2e*3
°-S2S§r fiSSS,JSs*!
•o
•o
y»
«O
d
0
S-t
4)
5
4)
>
>-
O
4J
o
d
%-l
o
4)
Q
£
^•1
or from a vessel.
/nnowaMwe con^ro* technology
s any system of air pollution con-
that has not been adequate y
nstrated In practice, but would
a substantial likelihood of
ving greater continuous emls-
reductlon than any control
c o
d — •
S§5Sg
^«^
O t- C 2
41 C
4>« °
11 3S
III I
-8£^
|1?1
3ju o C
CJ t« Ui
+* u o
_ «" £ .
C o «
~? -
i C -*J C
E^^S
•c ot>«2«'-3c
ig-sE>£g-5£Ko
•S£«2 y^&i
J ii 0
^ ~ <1J
) Fugitive emissions means those
slons which could not reasonably
through a stack, chimney, vent.
her functionally equivalent open-
•^0 it.
StJc
£ 1
>9
: 5
5c
i°
1, O
)(1) Xctua! emissions means the
al rate of emissions of a PfM«J"«
, an emissions unit, as determine^
-cordance with paragraphs (b)(2i
hrough
-------
"••= 2 * *>
S3|S!SS
£5£-2°&«£
tlllltSjrfcS-So
3C3in^ — ^^u
C .=. t> r/l = C M 4)
* »ai coS-815
t,w«ng,gtg •—
•« -n^C0 •D^C^"d^S
-------
o o'o-r o
Ǥ*!a E
£3fi*E..^
*•* O ** •— *3 6fl
***jsh
•*-!i Ot-
_ _ d d
cgs 3
O S«H
EC £2"=
~ES25§S.i!"-5
^--||H-ii
a c £ « s o c
3 o « fi - £35 o
=1S| £E
t-s0
i*i8f5
13S»S£
ais^-sl
«fc.,S«i.o
X5"ES .
k ft) i J
HIP
*i
3§
O O 3 M ~
" O C7 X C
o
^ *;
^ ^
C
O
CB
<
JO
•5
«
•o
o
4)
d
•o
o
o
OJ
03
AS3
CMC
S e.e
£§fe
8£a
^c.3
2S§
£3
..
Is!
O —; IH
.073 4i
-Sr
f2~
Ex
1Z 4)
M
g§
^S
it
t* _
33 ^ o of-
- -a-n^cS
u
ec
u.
u
'&!«
1 d 41
, a
2 w
g c
a o
c js •
|i§!
l^S
r-f 60 & •
^ 1
k m £5 c
*3 a o
•2 »_ c^a 1o ~"
e ° «-S rt & "o.
!l|Sl|g«S S&:
|W"w'~>^4)'2*:'C _
:*3DnwaCwo •*
•C-S"e)O|-2S)4)'
1— c^-"-- ££*3-2.cJ£-D
•>— 3£
c — -«^ — •
• ° 5 c ?, •
) — O 4> O
U I. O "^ 3 ls£ Jj 5;
O
!SI
!!§•
) t. O
5^S
o-
3J G
>.i
gi
.•O 4) y 50 —
s!2i§3
o 5 .—, ^ ^- 0
;|"gE£Suo2d6:
SEwdwcc c
£ £ i
. "3.
E n
«
? 8
I £
& c
bo —
_c
M J2 r « 3
4) • » >i ••• ^ r*
S 8S|| 2|
S aS^ 3 e.
i..r
..
So
c
, 5S
: o
S d o u
*• £ — 2
P p •= .f- x •? S c
d
C 4) O
f d^^
i ^- CO ,, ,
1 d G ,
"C d ;
' P 4)
•s^is
•> <-. o w
O to o 4)
s c
d t-"
— 41 13 *• >.
O
.cSI
• « «*- 0)
£ £ ° £
eo
il
G C
e d 4)
Ic 1? -f I^I-I £ S ^«
.SbS-Sj:^'
^.Issll5s
3 c O
•J
C-
5§2 8c £ «
•2H>gcgO^.V,>
;^ fj
_ C U 4>
dQ C
-1|||-
s-!.sls€
"? o •
£ o
•S « V. '
III'-
•*- Q.Z3 c
a-= ™ S^
« ^ *** * ®
. «••= g « «
iS^*dC
:S 0-2
§^-
^-^o
c3
d <
rf 9 ^ ? f.2
£-°
Ss
o
«^-S"«^o «
•o « c^~? 2
g~!w8 ?d
^^ *-"
' ^ C O .
. .Q C cj to ;
w '^ C ^ *" w
Sl:cfe€glsl|5ll'28:
Sftsc?s?^-Illag5£
l=cct:5
Ill^gi
i .S G
O .C c
> si ~ C
1^^-»-Cii.'C3'-Csoc»3,
>C = 3-dcC--5-~g
! gg ££^&5- S
-------
<0
» e o —
=!>S
"£+*
3 ct C M
Stsls
iu-l
* o 0.2
^UHo
c £•«•"
£ 2«
x> « c£
!5So
•III
ja*» w
«!!*
c2
I-
ac
— ^ jc«
OC S 3
&S «s
ou . *«
^11 Iff §2:
^¥i5 "llsl
ia§^
55 III
» S O -*j ^»
•C C el O
-*^ C o >
Ss«i-.
1-lls
SIM?
£'-**
.*.!W
I!P|
Ifsls
JB«M
s— a •
li:il
nsi^
i?«;j
,i«uS^«^o-§
^1^1^=1
».»jj«^» R -^ ^ £ o 07
•IT ** **
25e
^- c
55
v. a. A- S;
C£Q^M
S~8|2
01 b. * —
3Cg^— SdTJ«4*J.'3g»)i;-.c»»3
««-=i:Scv2j:-rc33Ec8j3J3v'«eees
T3 C ol ed oJ li.jSolO'Qiuotjrt tfObt
e £»|^£S
! in jin
I w?fl»
° o «
£5
c
i
c
o
*>
m
vM
co
3SW ijT3t.W~S«« -s^?
3Sss?ssssic:i£8a«
ic^^l^S-rSH^Ig
Sti-t,^-5— ~ci % i> "~ ~ ~S — ~Z 3
•§•§!•= ifi?g?&85E8s§B
lllSbSiSl&&¥ -&&&S
•
-------
«2 wo *•
£"«
-w^Sg£«a^S
§|-alsS£g-
7= P i) ° i- 2?^ —
-15 S
it
V. 'C£5v>
Hiiajp;
:Iiiriii:!«
•3 a § = •> S «J2xi*.
ov2%'c)OCa.£ct«>
c.c E " a£ o3 o o
*•' *- c
? d 3 ».
e JS C *
is!!;
i^iss
§S8«o
c^oScn
Ils^o
b.u5gs
3°5«1
^§1|
I n »•
^ —• C
33 S
O d d *> _ -6 M
WMOOCO— CC
fl g= e o- x S-s
c— c. c-« .o >r: cj o
S-5
C 3
E^
u£
2c
o o
«3^flS5q:
siw-lu5s _
CtJ-Sl«ii BJ4)tj
•o c £• -.- S E « ^ „
Si
«i
s «
43£
5*3 ..
:laa
i-a-o c
S-
S2 =
111
« K. p — >n trt
«- n w o> CM c<
^&
,-4 O.
2i£i|S^c
G£ 3 £i; o-o a
:'izlH«
:H»l!«
1stox55n
£ = •0-2 ^** « g
S^c ^c§
fi«l =
^£ § "•
22«
H-S*
I?H
^1
^l|
v§
&13-S2*E
u£^§§5^|
O>33uCftai«3
»oS-a-0=^
:r £
« ----^
-l!«S
|||1^|^||1§
I^oog^S-S-gSo
3 W SIM
3SI5P01
o
o
!;^^iPi:!l^l§^§Ki^
Ill!i3i?p!fsl-co^|ip:i!l
8lsl8«siio.;^!i5§il2E;5sS:a
Miii?si€Siis*a?ss?i
o^iisfl «o wed01 —^3.e— •3v>«.3~^
-s ^dHa^cgE-gfiSs-gl^sIS
<001e,
o^ a a> o- S
^°ac-cco
^E^o^cg
i!i!|l!
(O *J «*H O *J -«J
-------
$
,«*£g38|ii;E;3-£*l|s31§ll»
8- d *5 5^-S^S l-Sl'S §- g6s S£ *fi c s £ a > §5 > °5
C. C 4> o oj 3 d 3 _SSg?, c-Ss
ogc^
o01
r'~l>££'OOT>0 .OCM S
l2o!!§"sa§£^5?8asS
-= - ° ?. o 2 M . E58f:0:j*g5j«
«fr< c
C5 »j «J
cw cja
as!i^'si:;i2.3a
£^c5° -2_
S6.w5eSc£tH..«c,ll= = £1ga=2e
2
Eoilsl^l-
rt *^-
o .
-•3s>*°5 a*e
Q< ™5~W c! o
£ >'5-S1>>5 &3^
g|?clgo-
•J I. te 1-1 C £ — l^S'uw"
p^-o2>j;
c-gijaoow
55 r m •- — O
*j— T;:rwi>t>^-fc.73.^u
°«5»gS5s£|-
^•"-•SagoS^^Sg
~ -= o "^ >-
&*?S- E * =
Q C 75 L, — O O
^-aJdtS^^^C"
— t — •*? _ _
_ . .. ^
U ^. V
S o "O
S-£">
o
b c
Sl--g|««js§u!3fti5£-og5,.y
l5i§al&3|s
s;!«Hs^s
ow
ov
n
at
pl
ce
al
UJ
(0
<
UI _
I!
OWAB
,s|S||S|
"CSuugg^C
2-i|||*St
sya85^--s
l-SisSlsSl
flj fll *J "« ** W .
o—c"5«uS'-m-
e
<
1 I
X
<
2
88
C S "O '
S d o
7 -c*-1
C- tn ~
d fcs
c1" .
£2B
£30
« os
o o
?•. >.T> A
t. t. « 2
co
~-t
co
5!s*S*£*=
sSs^SI5^*
^ C o 3 *-« > *o
,, «^rtc:o>"
O I .C U ^i v. "" O
e
p,
% 6
II
M
I SS I
vie
pplica
as to
ation
tion or
event
f receipt
e date on
ity receive
2?§8
l«5
; 3~
o I £ -
S j, > c _ o
l£-Z-
S-c
5 *3
V4
e! .
fei
SI
g-^£«
°ls-tl
C e •= ., £ <3
^S g aS 3 c2
ar- *3 <* Oi w O O
75 u> u u o -o
V £ C ID O. O . _
^8S£_
ceSa^S^
«g-o-C'3cS -„
•s ° — r, » 73 « ^j
•0
<«
—
>> V i-
Q. S d
o d c
-E
Hi iiiifsi
-°°?8£io<---5
U'r_.^j^,o . C ^
c S^Sk°x-§I|
I a&lsss"i|;
" u S "32 5?--H 8 ^
oved.
ake avai
n each r
urce
all
d, a co
ation,
fy the
newsp
ach reg
ce wou
ation,
the de
that
mo
d
r
o
we
-------
United States
Environmental Protection
Agency
Office of Air Quality
Planning And Standards
Research Triangle Park, NC 27711
DRAFT
October 1990
AIR
&EPA
New Source Review
Workshop Manual
Prevention of Significant Deterioration
and
Nonattainment Area
Permitting
Additional
Impacts
-------
i .
CLEAN AIR ACT
non. tne description and analysis of such
effects shall be reviewed and examined by
the redcsignaung authorities.
(B1 Prior to the issuance of notice under
subparagraph (A) respecting the redesig-
nation of any area under this subsection, if
such area inciudes any Federal lands, the
State shall provide written notice to the
appropriate Federal land manager and af-
ford adequate opportunity (but not in ex-
cess of 60 days) to confer with the State
respecting the intended notice of redesig-
nation and to submit written comments
and recommendations with respect to such
intended notice of redesignauon. In rede-
sienating any area unaer this section with
• resoect to which any Federal land man-
ager has submitted written comments and
recommendations, the State shall publish
a list of any inconsistency between such
recommendations and an explanation of
sucr. inconsistency (together with the rea-
sons for maKing such redesignauon
against tne recommendation of tne Feder-
al land manager).
(C1 The Administrator shall promul-
gate regulations not later than six months
after date of enactment of this pan. to
assure, insofar as practicable, that prior to
any public hearing on reacsignation of any
area, mere shall be available for public
inspection any specific plans for any new
or modified major emitting facility which
may be permitted to be constructed and
operated only if the area in question is
designated or redesignated as class III.
(2) The Administrator may disapprove
the redesignauon of any area only if he
finds, after notice and opportunity for
public hearing, that such redesignauon
does not meet the procedural reduircmcnts
of tnts section or is inconsistent with the
requirements of section 162(a) or of SUD-
secuon (a) of tnis section. If any sucn
disapproval occurs, the classification of
the area shaii be that which was in effect
prior to the redesignauon wnich was
disapproved.
[PL 95-190. November 16, 1977]
(c\ Lands within the exterior bound-
aries of reservations of federally recog-
nized Indian tribes may be redesignated
only by the appropriate Indian governing
body. Such Indian governing body shall be
subject in all respects to the provisions of
subsection (e).
(d) The Federal Land Manager shall
review all national monuments, primitive
areas, ana national preserves, and shall
recommend any appropriate areas for re-
designation as class I where air quality
related values are important attributes of
the area. The Federal Land Manager shall
report such recommendations, with sup-
porting analysis, to the Congress and the
affected States within one year after en-
actment of ibis section. The Federal Land
Manager snail consult with the appropri-
ate States before making such
recommendations.
(e) If any State affected by the redesig-
nauon of an area oy an Indian trios or any
Indian tribe affected by the redesignauon
of an area by a State disagrees with such
redesignation of zny area, or if a permit is
proposed to be issued for any new major
emitting facility proooseo for construction
in any State wnicn tn: Governor of an
affected State or governing body of an
affected Indian tr.be determines will cause
or contribute to a cumulative cnange in air
quality in excess o; '.r.at aiiowec in :nis
pan wumn tnt irfectec State or tribal
reservation, the Governor or ruling oody
may request the Administrator to enter
into negotiations wun tne parties involved
to resolve such dispute. If requestec by
any State or Incian tribe involved, the
Administrator snail maics a recommenda-
tion to resolve tne disoute and protect me
air quality reiatea values oi~ the ianos
involved. If the sanies involved do not
reach agreement. :ne Administrator shall
resolve the dispute and his detsrminauon,
or the results of agreements reacned
through other means, shall become pan of
the applicable plan ano snail be enforce-
able as part of sucn clan, in resolving such
disputes relating :o area rtaesignauon. ;he
Administrator snaii consider tns extent to
wnich the lands :nvoivec are o! sufficient
sizs to allow erfecuve air auaiity manage-
ment or have air suaiuv reiatec values of
such an area.
PRECONSTRUCTION
REQUIREMENTS
Sec. 165.(a) No major emitting facility
on which construction is commenced after
the date of the enactment of this part may
be constructed ir. any area to which this
part applies unless—
(1) a permit has been issued for such
proposed facility m accordance with this
part setting form emission limitations for
such facility which conform to the rcouire-
mcnts of this part:
(2) the proposed permit has been sub-
ject to a review in accordance with this
secuon. the required analysis has 'been
conducted in accordance with regulations
promulgated by the Administrator, and a
public hearing has been held with ooponu-
nity for interested persons including repre-
sentatives of the Administrator to appear
and submit written or oral presentations
on the air quality impact of such source,
alternatives thereto, control technology re-
quirements, and other appropriate
considerauons;
(3) the owner or operator of such facil-
ity demonstrates, as required pursuant to
section 110(j), that emissions from con-
struction or operation of such facility will
not cause, or contribute to. air pollution in
excess of any ^A) maximum allowable
increase or maximum allowable concen-
tration for any pollutant in any area to
which this oart applies more than one tune
per year. tBI national ambient air quality
stanoa.ro in any air quality control region.
or (C) any other applicable emission
standard or standard of performance un-
der this Act:
[PL 95-190. November 16. 1977]
(4) the proposed facility is subject to the
best available control technology for each
pollutant subject to regulation under this
Act emitted from, or which results from,
such facility:
(5) the provisions of subsection (d) with
resocct to protection of class I areas have
been complied with for such facility,
(6) there has been an analysis of any air
quality impacts projected for the area as a
result of growth associated with such
facility;
(7) the person who owns or operates, or
proposes to own or operate, a siaior emit-
ting facility for wmch a permit is required
under this pan agrees to conduct such
monhonng as may be necessary to deter-
mine the effect which emissions from any
such facility may have, or is having, on air
quality in any area which may oe affected
by emissions from such source: and
(8) in the case of a sourer which pro-
poses to construct in a class III area,
emissions from which would cause or con-
tribute to exceeding the maximum allowa-
ble increments applicable in a class II area
and where no standard under section 111
of this Act has been promulgated subse-
quent to enactment of the Clean Air Act
Amendments of 1977 for sucn source cate-
-------
FEDERAL LAWS
gory, tne Administrator has approved the
determination of best available technology
as set forth in the permit.
(b) The demonstration pertaining to
maximum allowable increases required
unoer section (a)(3) shall not apply to
maximum allowable increases for class 11
areas in the case of an expansion or modi-
fication of a major emitting facility which
is in existence on the date of enactment of
the Clean Air Act Amendment of 1977.
whose allowable emissions of air pollu-
tants, after comoiiance with subsection la)
(4). wiil be less than fifty tons per year
and for which the owner or operator of
•>ucn facility demonstrates that emissions
or paniculate matter and sulfur oxides
will not cause or contribute to ambient air
duality levels in excess of the national
secondary ambient air quality standard
for either of such pollutants.
JPL 95-190. Novemoer 16. 1977]
>c> Any comoieted permit application
unoer section 100 for 2. major emitting
facility in any area to which this part
applies shall be granteQ or denied not later
man one year after the date of filing of
sucn completed application.
id)(l) Each State shall transmit to the
Administrator a copy of each permit aopii-
cation relating to a major emitting facility
received by such State ana provided notice
to the Administrator of every action relat-
ed to the consideration of such permit.
(2)(A) The Administrator shall provide
notice of the permit application to the
Federal Land Manager and the Federal
official charged with direct responsibility
for management of any lanos within a
ciass I area wnicn may be affected by
emissions from tne proposeo facility.
(B) The Feaerai Land Manager and the
Federal official chargeo with direct re-
sponsibility for management of such lands
shall have an affirmative responsibility to
protect the air quality related values (in-
cluding visibility) of such lands within a
ciass 1 area and to consider, in consulta-
tion with the Administrator, whether a
proposed major emitting facility wiil have
an adverse imoact on such values.
(C)(i) In any case where the Federal
official charged with direct responsibility
for management of any lands within a
class 1 area or the Federal Land Manager
of such lands, or the Administrator, or the
Governor of an adjacent State containing
such a ciass 1 area riles a nonce alleging
that emissions from a proposed major
emitting facility may cause or contribute
to a change in the air quality in such area
and identifying the potential adverse im-
pact of such change, a permit shall not be
issued unless the owner or operator of such
facility demonstrates that emissions of
paniculate matter and sulfur dioxide will
not cause or contribute to concentrations
which exceed maximum allowable in-
creases for a class I area.
(ii) In any case where the Federal Land
Manager demonstrates to the satisfaction
of the State that the emissions from such
facility wiil have an adverse imoact on the
air quality-related values (including visi-
bility) of such lands, notwithstanding the
fact that the change in air quality result-
ing from emissions from such facility will
not cause or contribute to concentrations
which exceed the maximum allowable in-
creases for a ciass 1 area, a permit shall
not be issued.
(iii'i In any case wnere the owner or
operator of such facility demonstrates to
the satisfaction of the Federal Land Man-
agers, and the Federal Land Manager so
certifies, that the emissions from such fa-
cility will have no adverse impact on the
air quality related values of such lands
(including visibility), notwithstanding the
fact that the change in air quality result-
ing from emissions from such facility will
cause or contribute to concentrations
which exceed the maximum allowable in-
creases for ciass 1 areas, the State may
issue a permit.
[PL 95-190. November 16. 1977]
(iv) In the case of a permit issued pursu-
ant to clause tiii). such facility snail com-
ply wnn sucn emission limitations unaer
such permit as may oe necessary to assure
that emissions of sulfur oxides ana oarti-
culatcs from sucn facility, wiil not cause
or contribute to concentrations of such
pollutant which exceed the following
maximum allowable increases over the
baseline concentration for such pollutants.
[PL 95-190. Novemoer 16. 1977]
Muumum ailowtbie increase
'*— fmcrosrarn*
t-r cubic mcieri
Pjrucutaie nuui.
Annual geometric mean
Tweniy-iour-tiur ..uiimum
3ullur dioxtuc.
Annual arithmetic means .
Twemy-<'our-nour maiimum
Thret-nour maximum
91
325
I D)(i) In any case where the owner or
operator of a proposed major emitting fa-
cility who has been denied a certification
under suooaragraph (C)(iii) demonstrates
to the satisfaction of the Governor, after
notice and public hearing, and the Gover-
nor rinds, that the facility cannot be con-
structed by reason of any maximum al-
lowable increase for sulfur dioxide for
periods of 24 hours or less applicable to
any class 1 area and. in the case of Federal
mandatory class I areas, that a variance
under this clause will not adversely affect
the air quality related values of the area
(including visibility), the Governor, after
consideration of the federal land manag-
er's recommendation lif any) and subject
to his concurrence, may grant a variance
from sucn maximum allowable increase. If
such variance :s granted, a permit may be
issued to sucn source pursuant to the re-
quirements of this suooaragraph.
(ii) In any case in which the Governor
recommenos a variance under this suopar-
agrapn in wnich tne Federal la no manager
does not concur, the recommendations of
the Governor and the Federal land man-
ager shall be transmitted to the President.
The President may approve the Governor's
recommenoation if he finds that such vari-
ance is in the national interest. No Presi-
dential finding shall be reviewabic in any
court. Tne variance snail take effect if the
President approves the Governor's recom-
menoations. The President shall approve
or disanprove sucn recommendation with-
in 90 days after his receipt of the recom-
mendations of the Governor ana the Fed-
eral lana manager.
liii) In the case of a permit issued our-
suant to this suooaragraoh. such facility
snail comoiy with such emission limita-
tions unaer sucn oermit as may be neces-
sary to assure mat emissions of sulfur
oxides from sucn facility will not (dunng
any day on which the otherwise applicable
maximum aiiowaole increases arc exceed-
ed) cause or contribute to concentrations
which exceed the following maximum al-
lowable increases for such areas over the
baseline concentration for such pollutant
and to assure that such emissions wii) not
cause or contribute to concentrations
which exceca the otherwise applicable
maximum allowable increases for periods
of exposure of 24 hours or less on more
than 18 days during any annual period:
(PL 95-190. November 16. 1977]
-------
;LEAN AIR ACT
MAXIMUM ALLOWABLE INCREASE
(In micrograms per OIOK: mcierj
Period 01* eioosurc
'4-hr maximum
3-hr maximum
Low terrain Hi«h terrain
areas areas
36 62
130 221
(iv) For ourposcs of clause uii), the lerm
'high terrain area* means with respect to
any facility, any area having an elevation
of 900 fest or more above the base of the
stack of such facility, and the term 'low
terrain area' means any area other than a
high terrain area.
[PL 95-190. November 16. 1977]
icHl) The review provided for in sub-
section tai shall be preceded by an anaiy-
sis in accordance with regulations of the
Administrator, promulgated under this
subsecnon. which may be conducted by
me State tor any general puroose unit of
local government) or by the maior emu-
ting faculty applying for sucn permit, of
tne amoient air quality at the proposed
site and in areas which may be affected by
emissions from such facility for each pol-
lutant subject to regulation unaer this Act
which will be emitted from sucr. facility.
(2) Effective one year after date of
enactment of this pan. the analysis re-
quired by this subsection shall include con-
tinuous air quality monitoring data gath-
ered for purposes of determining whether
emissions from such facility will exceed
the maximum allowable increases or the
maximum allowable concentration permu-
ted unaer this part. Such data shall be
gatherea over a period of one calendar
year preceaing the date of application for
a permit under this pan unless the Stats.
in accorcance with regulations promulgat-
ed by in: Administrator, determines that
a compute ano adequate analysis for sucn
purposes may be accomplished in a shorter
period. The results of such analysis shall
be available at the time of the public
nearing on tne application for such permit.
(3) Tne Administrator shall within six
months after the date of enactment of this
part promulgate regulations resoecting the
analysis required under this subsection
which regulations—
(A) shall not require the use of any
automatic or uniform buffer zone or
zones.
(B) shall require an analysis of the am-
bient air quality, climate and meteorology.
terrain, sons ana vegetation, and visibility
at the sue of the proposed major emitting
facility and in the area potentially affected
by the emissions from such facility for
each pollutant regulated under this Act
which will be emitted from, or which re-
sults from the construction or operation of,
such facility, the size and nature of the
proposed facility, the degree of continuous
emission reduction which could be
achieved by such facility, and such other
factors as may -be relevant in determining
the effect of emissions from a proposed
facility on any air quality control region.
(Q shall require the results of such
analysis shall be available at the time of
the public hearing on the application for
such permit, and
(D) shall specify with reasonable par-
ticularity each air quality moaei or moaeis
to be used under specified sets of condi-
tions for purposes of this part.
Any moaei or moaeis designated under
sucn regulations may be adiusteo utson a
determination, after notice and ocoortum-
ty for public hearing, by the Administra-
tor that such adjustment is necessary to
take into account unique terrain or mete-
orological characteristics of an area poten-
tially affected by emissions from a source
applying for a permit required unaer this
part.
OTHER POLLUTANTS
Sec. 166.(a) In the case of the pollu-
tants hydrocarbons, carbon mono-
xide, photochemical oxidants. and nitro-
gen oxides, the Administrator shall con-
duct a study and not later than two years
after the date of enactment of this part.
promulgate regulations to prevent :ne sig-
nificant deterioration of air quaiuv wmcn
would result from tne emissions of sucr.
pollutants. In the case of pollutants for
which national ambient air quality stan-
dards are promulgated after ins date of
the enactment of this part, he snail pro-
mulgate such regulations not more man 1
years after the date of promulgation of
such standards.
(b) Regulations referred to in subsec-
tion (a) shall become effective one year
after the date of promulgation. Within 21
months after such date of promulgation
such plan revision shall be suomuted to
the Administrator who snail approve or
disapprove the plan within 23 montns
after such date or promulgation in the
same manner as required unaer section
110.
(c) Such regulations shall provide soe-
cinc numerical measures against which
permit applications may be evaluated, a
framework for stimulating improved con-
trol technology, protection of air quality
values, and fulfill the goals and purposes
set forth in section 101 and section 160.
(d) The regulations of the Adminis-
trator under subsection u) shall provide
specific measures at least as effective as
the increments established in section 163
to fulfill such goals and purposes, and may
contain air quality increments, emission
density requirements, or other measures.
(e) With respect to any air pollutant for
which a national ambient air quality
standard is established other tnan sulfur
oxides or paniculate matter, an area clas-
sification plan shall not be rcauireo. unaer
this section if the implementation ptan
adorned by the State ana submittea for
:ne Aamimstrator s aoprovai or promul-
gated by the Aammistrator unaer section
!10(c) contains other provisions which
when considered as a whole, the Adminis-
trator finds will carry out the ourposes in
section 160 at least as effectively as an
area classification plan for sucr, Doiiutant.
Such other provisions refeneo T.o in the
preceding sentence need not reouire the
establishment of maximum allowable in-
creases with respect to sucn pollutant for
any area to which this section applies.
(!) PM-10 Increments.—Tne Adminis-
trator is authorized to substitute, for the
maximum allowable increases in pani-
culate matter specified in section 163(b)
and section l65(d)(2)(C)(iv), maximum
allowable increases in paniculate matter
wun an acroaynamic tiiamc'.tr smaller
than or equal to 10 micrometers. Sucn
substituted maximum allowable increases
shall be of equal stringency m effect as
those specified in the provisions for whicn
they are substituted. Until th: Adminis-
trator promuigates regulations unaer the
authority of this subsection, ins current
maximum allowable increases in con-
centrations of paniculate matter shall re-
main in effect.
[Sec. 166(0 added by PL 101-5491.
ENFORCEMENT
Sec. 167. Tne Administrator shall, and
a State may take such measures, including
issuance of an order, or seeking mjunctwe
relief, as necessary to prevent the con-
-------
FEDERAL LAWS
itruction or modification of a major emit-
ting facility which does not conform to the
requirements of this part, or which is pro-
posed to be constructed in any area desig-
nated pursuant to section I07(d) as attain-
ment or unctassinable and which is not
subiect to an implementation plan which
meets the requirements of this part.
[Sec. 167 amended by PL 101-549]
PERIOD BEFORE PLAN APPROVAL
Sec. 168. (at Until such time as an
applicable implementation pian is in effect
for any area, which oian meets the re-
quirements of this part to prevent signifi-
cant deterioration of air quality with re-
spect to any air pollutant, applicable
regulations unaer this act prior to enact-
ment of this part shaii remain in effect to
prevent significant deterioration of air
quality in any sucn area for any such
pollutant exceot as otnsrwise provided in
•iuosection tbi.
ibi If any regulation in effect prior to
inactment of this nan to prevent signifi-
cant deterioration of air quality would be
inconsistent with the requirements of sec-
tion 162(a). section I63(b) or section
164(a), tnen sucn regulations shall be
deemed amenoeo so as to conform with
such requirements. In the case of a facility
on which construction was commended (in
accordance with the definition of 'com-
menced' in section i69(2)) after June 1,
1975. and prior to tns enactment of the
Clean Air Act Amendments of 1977, the
review and permitting of such facility
shall be in accordance with the regulations
for the prevention of significant aetenora-
uon in enec: nnor to tne enactment of the
Clean Air Act Amendments of 1977.
[PL 95-190. Novemoer 16. 1977]
DEFINITIONS
Sec. 169. For purposes of this part—
(1) The term "major emitting facility'
means any of the following stationary
sources of air pollutants which emit, or
have tne potential to emit, one hundred
tons per year or more of any air pollutant
from the following types of stationary
sources; fossil-fuel fired steam electric
plants of more than two hundred and fifty
million British thermal units per hour heat
input, coal cleaning plants (thermal dry-
ers), kraft pulp mills. Portland Cement
plants, primary zinc smelters, iron and
steel mill plants, primary aluminum ore
reduction plants, primary copper smelters.
mumcioal incinerators capable of charg-
ing more than fifty tons of refuse per day.
hydrofluoric, sulfuric, and nitric acid
plants, petroleum refineries, lime plants.
phospnaie rock processing plants, coke
oven batteries, sulfur recovery plants, car-
bon black plants (furnace process), prima-
ry lead smelters, fuel conversion plants.
sintering plants, secondary metal produc-
tion facilities, chemical process plants, fos-
sa-fuel boilers of more than two hundred
and fifty million British thermal units per
hour heat input, petroleum storage and
transfer facilities with a capacity exceed-
ing three hundred thousand barrels, tacon-
ite ore orocessing facilities, glass fiber pro-
ctssine plants, charcoal production
facilities. Such term aiso includes any oth-
er source with the potential to emu two
hundred and fifty tons per year or more of
any air pollutant. This term shall not in-
cmoe new or modified facilities wmch are
nonprofit hcaun or eoucanon institutions
which have been exemoteo by the State.
(21(A) The term "commenced" as ap-
plied to construction of a major emitting
facility means tnat the owner or ooerator
has obtameo all necessary preconstruction
approvals or permits required by Federal.
State, oc local air pollution emissions and
air quality laws or regulations and either
has ii) begun, or caused to begin. 2 con-
tinuous program of physical on-site con-
struction of the facility or (ii) entered into
binding agreements or contractual obliga-
tions, which cannot be canceled or modi-
fied without substantial loss to tne owner
or operator, to undertake a program of
construction of the facility to be complet-
ed within a reasonaoie time.
(B) Tne term 'necessary prcconstruc-
:ion approvals or permits" means those
permits or approvals, required by tne per-
mitting autnonty as a preconoition to un-
dertaking any activity unoer clauses (\) or
(ii) of subuaragrapn (A) of this
paragraoh.
(C) The term 'construction' when used
in connection with any source or facility,
includes the modification (as denned in
section 11 l(a)) of any source or facility,
[PL 95-190. Novemoer 16. 1977]
(3) The term 'best available control
technology' means an emission limitation
based on the maximum degree of reduc-
tion of each pollutant subject to regulation
under this Act emitted from or wmch
results from any major emitting facility,
which the permuting autnonty. on a case-
by-case basis, taking into account energy,
environmental, and economic impacts and
other costs, determines is achievable for
such facility through application of pro-
duction, processes and available methods.
systems, and tecnniqucs. inciudine fuel
cleaning, clean fuels, or treatment or inno-
vative fuel combustion techniques for con-
trol of each such pollutant. In no event
shall application of 'best available control
technology' result in emissions of any pol-
lutants which will exceed the emissions
allowed by any applicable standard estab-
lished pursuant to section 111 or 112 of
this Act. Emissions from any source utiliz-
ing clean fuels, or any other means, to
comply with this paragraph snail not be
allowed to increase aoove leveis that would
have been required under this paragrapn
as it existed prior to enactment of the
Clean Air Act Amendments of 1990.
(Sec. 169(3) amenoed by PL 101-5491
(4) The term 'baseline concentration'
means, with rescect to a pollutant, the
ambient concentration levels which exist
at the time of the first application for a
permit in an area subject to this part.
based on air quality data available in tne
Environmental Protection Agency or a
State air pollution control agency and on
such monitoring data as the permit appli-
cant is required to submit. Such ambient
concentration leveis shall taice into ac-
count all projected emissions in. or which
may affect, such area from any major
emitting facility on which construction
commenced prior to January 6. 1975. but
which has not begun operation by the date
of the baseline air quality concentration
determination. Emissions of sulfur oxides
and paniculate matter from any major
emitting facility on which construction
commenced after January 6, 1975. shall
not be included in the baseline and shall
be counted against the maximum allowa-
ble increases in pollutant concentrations
established under this part.
[Editor's note: Section 127(a) of PL
95-95 added Part C to Title 1 of the Clean
Air Act. The section further provides:
(b) Within one year from the date of
enactment of this Act [PL 95-95). the
Administrator shall report to the Congress
on the consequences of that portion of the
definition of "major emitting facility" un-
der the amendment made by suosection
(a) which applies to facilities with the
-------
v^EPA
United States
Environmental Protection
Agency
Office of Air Quality
Planning and Standards
Researcn Triangle Park NC 27711
EPA-45Q/4-87-007
May 1987
Air
Ambient Monitoring
Guidelines for
Prevention of
Significant
Deterioration (PSD)
RADIAN LIBRARY
RESEARCH TRIANGLE PARK. NC
-------
*«»»r»
NOV24TSB6
MEMORANDUM
SUBJECT: Need for A Short-tern Best Available Control Technology (BACT)
Analysis for the Proposed William A. Zimmer Power Plant
FROM: Gerald A. Emlson. 01 rector Original Sigwd By
Office of Air Quality Planning and Standards (MD-10)
TO: David Kee, 01 recto
Air Management Division, Region V (5AR-25)
This is in response to your November 17, 1986, memorandum, in which
you requested comment on Region V's belief that prevention of significant
deterioration (PSD) permits oust contain short-term emission limits to
ensure protection of the applicable national ambient air quality standards
(NAAQS) and PSD increments. 1 concur with your position and emphasize to
you that this position reflects our current national policy. Consequently,
I recommend that you continue to identify this apparent deficiency to the
Ohio Environmental Protection Agency and seek correction of the draft
permit for the William A. Zimmer Power Plant.
The PSD regulations clearly require that the application of BACT
conform with any applicable standard of performance under 40 CFR Part 60
at a minimum. However, this should not be taken to supersede any additional
limitations as needed to enable the source to demonstrate compliance with
the NAAQS and PSD Increments. In the case of sulfur dioxide (SOj), source
compliance with the 30-day rolling average emission limit under subpart Da
does not adequately demonstrate compliance with the short-term NAAQS and
PSD increments. Consequently, enforceable limits pertaining to the
performance of the flue gas desulfurization system on a short-term basis
must also be established. Note, however, that the short-term limits can
result from either BACT analyses or the need to protect air quality.
Therefore, the short-tens limit could be more stringent than the BACT
limit.
-------
I recognize that the sulfur variability Issue tends to complicate
tne setting of short-term SC>2 emission limits, but such limits must be
defined nevertheless. Continuous emission monitoring data from comparable
sources can be used in order to estimate worst-case short-tern $03
emissions that could occur at the plant. The modeling techniques used to
determine compliance with the short-term NAAQS and increments should
employ the enforceable short-term SOj emission limits which the permitting
agency establishes.
-------
United Starts
Environmental Protection
Agency
Office of Air Quality
Planning ana Standards
Research Triangle Park NC 27711
EPA-450 4-80-C21
November 1 98C
Air
Workbook for Estimating
Visibility Impairment
ENVIRONMENTAL PROTECTION
AGENCY
FEB 13 1981
SERVES QfflC£
-------
REFERENCES FOR SECTION 10.4
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
-« Research Triangle Park. North Carolina 27711
-\^
JUL5 B88
MEMORANDUM
Subject: A1r Quality Analysis for Prevention of
Significant Deterioration (PSD!
From: Gerald A. Emlson, Direct;
Office of Air Quality Planning a"nd Standards (MD-10)
To: Thomas J. Mas!any, Director
A1r Management Division (3AMOO)
Your memorandum of May 9, 1988, pointed out that two different procedures
are currently being used by the Regional Offices 1n certain PSD penult analyses.
The Inconsistency Involves the question of how to Interpret dispersion modeling
results to determine whether a source will cause -or contribute to a new or
existing violation of a national ambient air quality standard (NAAQS) or PSD
Increment. This memorandum serves to resolve the Inconsistency by reaffirming
previous Office of A1r Quality Planning and Standards guidance provided 1n a
December 1980 policy memorandum (attached}.
As you know, the regulations for PSD stipulate that apprctal to construct
cannot be granted to a proposed new major source or major modification 1f 1t
would cause or contribute to a MAAQS or Increment violation. Historically, the
Environmental Protection Agency's (EPA's) position has been that a PSD source
will not be considered to cause or contribute to a predicted NAAQS or Increment
violation 1f the source's estimated air quality Impact 1s Insignificant (I.e.,
at or below defined de «1n1m1s levels). In recent years, two approaches have
been used to determine If a source would 'significantly' (40 CFR 51.165(b)
defines significant) cause or contribute to a violation. The first 1s where a
proposed source would automatically be considered to cause or contribute to any
modeled violation that would occur within Its Impact area. In this approach,
the source's Impact 1s modeled and a closed circle 1s drawn around the source,
with a radius equal to the farthest distance from the source at which a
significant Impact 1s projected. If, upon consideration of both proposed and
existing emissions contributions, modeling predicts a violation of either a
NAAQS or an Increment anywhere within this Impact area, the source (as proposed)
would not be granted a permit. The permit would be denied, even 1f the source's
1mpa<~* was not significant at the predicted site of the violation during the
violation period. You have Indicated that this 1s the approach you currently
use.
-------
-2-
The second approach similarly projects air quality concentrations
throughout the proposed source's Impact area, but does not automatically
assume that the proposed source would cause.or contribute to a predicted NAAQS
or increment violation. Instead, the analysis is carried one step further 1n
the event that a modeled violation is predicted. The additional step deter-
mines whether the emissions from the proposed source will have a significant
ambient Impact at the point of the modeled NAAQS or increment violation when
tne violation is predicted to occur.'- If it can be demonstrated that the
proposed source's Impact 1s not "significant" in a spatial and temporal sense,
then the source may receive a PSO permit. This approach Is currently being
used by Region V and several other Regional Offices, and Is the approach that
you recommend as the standard approach for completing the PSO air quality
analysis.
In discussing this matter with members of my staff from the Source
Receptor Analysis Branch (SRAB) and the Noncrlterla Pollutant Programs Branch
(NPPB), 1t appears that different guidance has been provided, resulting 1n the
two separate approaches just summarized. We have examined the history and
precedents which have been set concerning this Issue. I also understand that
this Issue was discussed extensively at the Nay 17-20, 1988 Regional Office/
State Modelers Workshop, and that a consensus favored the approach being used
by Region Y and several other Regions. Based on this Input, as well as your
own recommendation, I believe the most appropriate course of action to follow
1s the second approach which considers the significant Impact of the source 1n
a way that 1s spatially and temporally consistent with the predicted violations.
By following the second approach, three possible outcomes could occur:
(a) First, dispersion modeling may show that no violation of a NAAQS or
PSD Increment will occur 1n the Impact area of the proposed source. In this
case, a permit may be Issued and no further action 1s required.
(b) Second, a modeled violation of a NAAQS or PSO Increment may be
predicted within the Impact area, but, upon further analysis, It 1s determined
that the proposed source will not have a significant Impact (I.e., will not be
above de mlnlmls levels) at the point and time of the modeled violation.
When this occurs, the proposed source may be Issued a permit (even when a new
violation would result from Its Insignificant Impact), but the State must
also take the appropriate steps to substantiate the NAAQS or Increment viola-
tion and begin to correct It through the State Implementation plan (SIP).
The EPA Regional Offices' role 1n this process should be to establish with
the State agency a timetable for further analysis and/or corrective action
leading to a SIP revision, where necessary. Additionally, the Regional
Office should seriously consider a notice of SIP deficiency, especially if
the State does not provide a schedule In a timely manner.
(c) Finally, the analysis may predict that a NAAQS or Increment
violation will occur 1n the Impact area and that the proposed source will
have a significant Impact on the violation. Accordingly, the proposed source
1s considered to cause, or contribute to, the violation and cannot be Issued
a permit without further control or offsets. For a new or existing NAAQS
-------
-3-
violation, offsets sufficient to compensate for the source's significant
impact musroe obtained pursuant to an approved State offset program consis-
tent with SIP requirements under 40 CFR 51.165(b). Where the source is
contributing to an existing violation, the required offsets may not correct
the violation. Such existing violations must be addressed in the same manner
as described in (b) above. However, for any increment violation (new or
existing) for which the proposed source has a significant impact, the permit
should not be approved unless the .Increment violation is corrected prior
to operation of the proposed source (see 43 FR p.26401, June 19, 1978; and
45 FR p.52678, August 7, 1980).
Your memorandum also states that other air quality analysis issues exist
within the NSR program which need consistent national guidance. You recom-
mend a more coordinated effort between SRAB and NPPB to review outstanding NSR
issues. We agree; however, rather than establishing a formal work group as you
propose, we are optimistic that the formal participation of representatives
of the NSR program In the Modeling Clearinghouse will help resolve coordinatlen
problems. Earlier 1n the yes-,, the Modeling Clearinghouse was officially
expanded to Include representation from the NPPB to coordinate PSD/NSR issues
which have a modeling component.
I trust that this' 1s responsive to the concerns which you have raised.
By copy of this memorandum, we are also responding to a Region V request
for clarification on the same Issue (memorandum from Steve Rothblatt to
Joe Tikvart/Ed Lillis, dated February 18, 1988).
Should you have any further questions concerning this response, please
fee"! free to contact Gary McCutchen, Chief, New Source Review Section, at
FTS 629-5592.
Attachment
cc: Air Division Directors, Regions I-X
Air Branch Chiefs, Regions I-X
D. Clay
J. Calcagnl
J. Tikvart
E. Lillis
G. McCutchen
D. deRoeck
-------
£3 Hit*
115s" *!«*SSlS|
*!Sag 5ll-||eg1
^4)4)C>>CiJ<
73j=£ o - o
•o "5
analysis specified In paragraph (b)(l)
of this section.
(c) Where the 30-day comment
period required In paragraph (b) of
this section would conflict with exist-
ing requirements for acting on re-
quests for permission to construct or
modify, the State may submit for ap-
proval a comment period which Is con-
sistent with such existing require-
ments.
(d) A copy of the notice required by
paragraph (b) of this section must also
be sent to the Administrator through
the, appropriate Regional Office, and
to all other State and local air pollu-
tion control agencies having jurisdic-
tion in the region in which such new
or modified installation will be locat-
ed. The notice also must be sent to
any other agency in the region having
responsibility for Implementing the
procedures required under this sub-
part. For lead, a copy of the notice Is
required for all point sources. The def-
inition of point for lead is given in
§ 51.100(k)(2).
£
3
"S
o
a.
m
4J
U
-------
m
_ M
x&5S=2£
w
C
c
o
e
e
E
o
k
C
Ul
*J ••-> ^- a!
3 «a 3 E * -
k* C ^^ H MI _
ojie S 2s*-
- — ss S i; •* o *
= 5= ~ Swr.-S
«a c"r £ c
>>o « ° £
•** — -*J *"•;
ۤ
S§
o
o
f
T C 4)
11-
•o a
S£
*» w3
rt rt
•O "5
O « 2
^ o 8
« 2 a
aE
**°2-6
PS1|
|->.o«e
-£g
g-§
3 a*j"S
= •? c J2
-gsg
gS^41
|gf5
1^£2
15^8
uiis
^5g5
^SEO
^|S-
9S|^
go
II
11
>> c
C 3
a t*
v
u.3
£-
**• o
aSZa.' a«^
§"J
_o
^
u
Of
u.
U
O
O C
l 11
C o o
„: w t- 4) 4)
illi^
P> bo
1 Si?s-
s . 215
C c «
*2E
8?.r
o ^
o
O « o
rt g j=
:i:
°ES
1- u
§B
10 _D,
si
-«§£- .SB
fe e CA>g « 5
0 o-o ° 3 § b „
c8l*gg£S
Il8^!ag
•* 04: w>3 e o 5
^^-^-^Sss
") I
3 b
8|
*e^
3 ° £'
s
° . v s y, o
"^ M «1^ T^ « "^
js 2 £ 55- o
^ o£-=e«j «_
^a-h^-^
x «s "i
£5rt5?wi:?:J
J2 52 °^
CJ
fc
o
o
*J
c
HI
II-
*"
o
3 O ° 3 3
Ce « 82
30 ~ 3
a« c*> Q
O t- M ft O
a°^^a
at? rt rt
£ t-
M ~ C 4) W
C^^-B C
5 2 " C5
3 « 3 -J
u. a -^ c
2 g c o
&|!ila.33
*< 4) e S w o
o -•o o S-o-S?
Sl§-°6§s
3 *^ — fc- EL ri O
.o a •»•
5 « u o"
£
e
4)
C
o
rt
u
d «>
£•5
81
« 4)
C O
1
S|I6
^*5
•a *j w o
§rt§«
»ss-
ii
3 g
8
£S
4) §
35
•O E.
E E
: *"a c o C C 4) •?? e
£^-.£i>i§ sii
c
u
C 3
O
V U
3
o
« c
rt
3
££
J55
a 41
A
4) W
3
rt
a
o
£
O
•— u fed
to ^* f*
3 .Q.S
1 |1
CM >
CD O
~ .. S E
S— u o
rt£
u/
3
112
• to "^ w
<2 *j c
5 8
4> a o
8.1
!* £-
).X S " O
i v 4;
C C
C
'c S
o
S*
C r-
£ilo55 C
s^i^^
&>,C^g5c
rt <- — _e — ~ _«
if"0 5 5-0
I. u ^3 ** u
S°5&S
8 a'Sel
S£fesa>
C 2 W O 4)
rt _S ~ O ^
f dii
c ts-e
O C rt
II
llrt
3 4)
8U
-
c fe
4) «J 4)
> £
— 3 *> O
— O -O £ - 60
*> 3 41 •;;«-" o
rt S •;; ? M i-
o
spsSc-
* N-- TO
Oio
in
t «
ii P C
•illSlS«s
S « i- O tC ^
k- o cS O w *> ?
i -O — v —
c;s
M-
S «
rt -J
c = o
«SE
•° N S 3
3 « o
C.-i2
S ^2:
-------
IO
ten
>•
u
C
«
o>
C *" - £ *•"
u
«
"o
»
E
c
s
">
I.
Sl««c
SS|£«p**s
4) & u -.S-O C >>.S
J _*„«<-
w^a'
S?jTg§S
C O- £
">;•£:; o«£ 03 |~|
g2s?|||«|r|^
^.«J Ot} .2 - -.S
id
"3*3
n ci
I?
3-
U 4)
•§-°
"5
*a
mh iii!i-=l^PJl
"'gs* 5%-58h£°S -jfr..*!0
SS-aS10
3 I**
S»- S-^-a
£°:§3g
sg^^g
3- V g,<
|g-°c-
« o£:
> o*> to
^"slj:0-!**
g^iiwpe'^'-!
e|lc..
£ E-O a) rt
d»" «r«w° O^JS^~"
2«^-8o = -«2..?»t
SliiI=±wle-£^Sn2lS5,e^aPv'B-2
M *a o •»
c
o
N.
U
O
IO
IO
CCW
3-5 o '"•C-3-53
tJ *5 4> «-" ti _
ll"feo|5£||ll5l-3-i"
*j — ••-<.«-> cd<«^0)Z«Q..^v^(£cQ4j> «M
3SE553ga"llogg5Sa«j;a w = «
*|^g^ialis|5-dtg5sl c|S
a <" *> S-2 ») a3 E ^S s£ 3»--s xS-j
3S-aS»«i««-ag-S«.,^B25*F*l o«*
3 ^5
4) — >M
ga£i!2-os£«
•2ioK*O>e«Cai4>
(xvl) Co»nmence as applied to con-
struction of a major stationary source
or major modification means that the
owner or operator has all necessary
preconstructlon approvals or permits
and either has:
(A) Begun, or caused to begin, a con-
tinuous program of actual on-slte con-
struction of the source, to be complet-
ed within a reasonable time; or
(B) Entered into binding agreements
or contractual obligations, which
cannot be canceled or modified with-
out ^substantial loss to the owner or
operator, to undertake a program of
actual construction of the source to be
completed within a reasonable time.
(xvll) Necessary preconstruction ap-
provals or permits means those Feder-
al air quality control laws and regula-
tions and those air quality control
laws and regulations which are part of
the applicable State Implementation
Plan.
in
Sis
e E-C
a 41.5
§s*
15S
IP
o 5 -«
-—do
o-C C
e°c
l°l
8g2
-1*5
— • f* o.
> °0
sl*
~ C fc « o ~ ^•-'ft
4>ooer-III4>4>k|i O
M!i!§!!3&5
= £=§o55£4>os
-------
on
TJ
Ul
truction
e source
1
ns
th
K
40 CFR
modification as though co
had not yet commenced on
or modification;
-------
FtKiaral Register / Vol. 51. No. 233 / Thunday. December 4. 1966 / Notices
43815
PON fURTHCX INFOftUAVON CONTACT:
Inquiries regarding the general
implementation of this policy may be
directed to: Barry Gilbert. Office of Air
Quality Planning and Standards (MO-
IS). Research Triangle Park. NC Z7711.
(919) 541-5516.
Inquiries regarding specific
applications to use this policy may be
directed to the appropriate EPA
Regional Office (see Appendix A of the
Technical Issues Document)
Inquiries regarding the development
and basis of this policy may be directed
to: Barry Elman. Regulatory Reform
Staff (PM-223). U.S. Environmental
Protection Agency. 401 M Street SW.
Washington. DC 20400. (202) 382-2727
M>VU9MMTANV IHPOaaUTIOH! Under
Executive Order 12291. EPA must fudge
whether this action is "major" and
therefore subject to the requirement of a
Regulatory Impact Analysis. This action
is not major because it establishes
policies, as opposed to regulations, and
can substantially reduce the costs of
complying with the Clean Air Act
This Policy Statement was submitted
to the Office of Management and Budget
for review. Any comments from OMB to
EPA are available for public inspection
in Docket G-81-2. Pursuant to U.S.C
605(b). 1 hereby certify that this action
will not have a significant economic
impact on a substantial number of small
entities. As a policy designed to allow
firms flexibility to meet previously
established regulatory requirements, it
will impose no burdens on either small
or large entities.
The contents of today's preamble are
indicated in the following outline. The
outline is followed by the preamble
itself, and then by the Policy Statement
and accompanying Technical Issues
Document.
Table of Content* Preamble
I. Introduction
II. Maior Issues
A. Baselines
1. Determining Baselines—Central
Guidance
2. Comments on B*»elinM in
Nonattainment Areas with Approved
Demonstrations of Attainment
3. EPA') Resolutions on BaseJinet in
Nonattainment Areas with Approved
Demonstrations of Attainment
B. Baseline and Other Requirements for
Bubbles in Primary Nonattainment Areas
Which Require But Lack Approved
Demonstrations of Attainment
1. EPA i Resolutions Regarding BaseJine,
and Other Requirements
a. Specific "Progresi" Requirements
b. Additional "Progress" Requirement:
Slate Assurances
2. Basic Rationale
X Additional Consideration* Retarding
the Benefits of Bubbles
III Additions! Policy Chsntts and
Clarifications
A. Cenenc Bubble Rules
1 Substantive Progress Requirements
1 Procedural Requirements
B. Bubbles Involving Hazardous or Toxw
Air Pollutants
C Banking Emission Reduction Credits
lERCsl
0 OBERS Protections and Double-Coaming
C Improved Modeling and Or Minima
Requirements
1. Of Minima Levels
1 Modeling Requirements
f Enforcement Isaacs
PREAMBLE-EMISSIONS TRADING
POLICY STATEMENT
I. Introduction
Today's policy makes final the .
Agency's prior guidance on general
principles tor creating, storing (banking]
and using emission reduction credits m
trading action* under the Clean Air Act
' This preamble responds to written
commen -EPA received on major Issues
raised b> us proposed emiHions trading.
policy statement (47 FR15076. April?.
1962) and subsequent request for furthae
comment (4fl FY 38580. August 31.1963).
It also explain* the Agency's principal
decisions on these issues.
Today's notice is the primary soon*
of EPA guidance on existingrsourca
bubbles, state generic bubble rule*, and
emission reduction banking. It replaces.
the original bubble policy (44 FR 71779.
December 11.1979) as well aa the
proposed emissions trading policy.
statement which was effective April 7.
1982 as interim guidance. The node*
addresses how emission redaction
credits (ERCjr—the currency of
trading—may be used for bubbles, as
well as for netting or offsets. Netting
and offsets are part of emissions trading.
but are governed by EPA and state
regulations for new source review.1
Nothing in today's notice alters EPA
new source review requirements or
exempts owners or operators of
stationary sources from compliance with
applicable preconstruction permit
regulations in accord with 40 CFR 31.18.
SI .24. 51.307. 52^21. 52.24, SZ27 and 5T28.
Interested parties should, however, b*
aware that bubble trades ara not subject
to preconstruction review orreguiationa
1 St«. t.»_ 40 OH 51.11 J1.2*. J1JC7. 3LZ1.
itr tnd sue.
On NovtoMr 7.1980. EPA mtrucnnd CFR Pen
51 ind r*fxunb«r*d many of that Pirri MCTVU (n
FR 40BUL B«cauM tnott rtidcn will b« mon
fimilxr with pnor dnignanoM. todty t node*
contain* atttioni bated on th« orfiauBtxw of Pin
91 <> it txu<*d b*fort ihit rtttroeranna. Inarmed
p»rn« miy UM Appendix F a< rodiy'i Tvduual
liiu*« Oocunxnt 10 cenv«n today't P»n SI an
to ttM corrupondmi n«w on«.
where theM trades do not involve
construction, reconstruction, or
modification or • source within the
moaning of those terms in the
retaliations llated above.
The policy announced today docs no
constitute final action of the Agency
within the meaning of section 307(b) of
thir Qean Air Act and therefore is not
hididally renewable. Rather, it
establishes general guidance for
reviewing and approving voluntarily
submitted trades. EPA will Implement
this guidance in later rulemaking actions
taut will be Judicially renewable.
Applicant! for emissions trades remain
tnm. following publication of today's
notice, to advance the appropriateness
of different trading requirements in the
context of rulemaking actions on their
Individual trades.
Under today's notice, EPA continues
to authorize UM of bubbles, hanks, and
generic bubble rules in ail areas of the
country, and provides for the fair and
prompt processing of bubble
applications which have been pending
before EPA under the 1962 policy.
However, basad oa experience undai
me 1912 policy, and in order to ensure
th« eovfroamantaJ integrity of future-
emissions, trades, today's notice
significantly ttghtans requirements
applicable to certain trading actions.
particalarry axiating-sourca bubbles in
primary nonattainaant anas which
rwquira but lack damonstrationi of
attainment. It also clarifies approval
altaria in waya which- should make
nrview and approval of
tavironmantally-sound tndes more
rapid and predictable. Among other
safeguards or safeguarding
clarifications, it requires that
• Bubbles may no longer resuit in any
increase in applicable net baseline
emissions in any area, whether
attsinmeat or nonattainment except
under stringent conditions which assure
that ambient equivalence will
iieverthaleaa be achieved:'
• Baselines for sources particpatirvg
in a bubble in any area must tske into
account all three factors relevant to
total emissions (l.a-. emission me.
capacity utiliiation. and hours of
operation) in order to prcndt sn
accurate accounting of emissions before
and after the trade:
' Thl« chant* aoa*Chj(M « iifnifluntiy -non
iianS*Bl d«Aiuttoa of wh*< nay &• caiuDocno t
'bubbl* undtr ttM Bmi**«o« TruUn* Policy Scrc-.fic
umoiMi tMU wruch mui b« e« to «o«ufy tar in
•xupoon from ita« rMtncaoa c»» b« four.o m 'At
T«oKrucH I»MM« OOCQBMIU. S*ctuin L5-1.C Acticru
wtalca ouy no lon»«r b» tn*t*t ti buebiM uoc«-
today • CMOOI »utt b« pracmMd uod«r pntrn EPA
enttrn tpollcabl* to SIP r»TUKjn».
-------
Fedaral Raster / Vol. at. No. 233 / Thttraday. Daggsaber 4. lisa / Notices
4341
precisely the three factors which must
be addressed in calculating baseiioe
emissions; (b) reaffirming that far
bubbles in aonattainmant areas with
demonstrations of attainment that have
been approved and not subsequently
found by EPA to be substantially
inadequate to attain ambient standards.
the baseline must be consistent with
assumptions used to develop the area's
demonstration or must otherwise be
shown by appropriate ambient
dispersion modeling to protect air
quality standards: and (c) specifying a
number of special "progress"
requirements for bubbles in primary-
nonattainment areas needing but lacking
approved demonstrations of attainment.
including stringent new baseline
requirement*, a ban on the use of
reductions produced before application
to bank or trade, and a mandatory extra
reduction of at least 20% beyond
applicable baseline emissions. Together
with tightened criteria for modeled
demonstrations of ambient equivalence.
a well as other new requirements for
bubbles, banks, and generic rules, tbeae
resolutions will ass in continued
environmental progress through trade*.
1. Determining Baselines—General
Guidance
A source's baseline emissions an
calculated by multipiyiag three factor*;
the source's emission rate (usually
expressed as emissions per quantity of
production or throughput): its homn of
operations or hourly usage over soaw
representative time period and its
capacity utilization (e.g.. the units of
production per hour of use).T All three
factors must be addressed, since a
source's emissions for a given period
may vary widely despite a constant
emission rate, depending, for example.
on whether it is operated at low
capacity for a small number of hours or
utilized near full capacity for s Large
number of hours. The product of foU
baseline calculation is generally
expressed in pounds of emissions per
day or tons of emissions per year (TPY]>
or both.
Today's policy clarifies EPA's original
intent regarding appropriate methods for
determining these three baseline factors.
In general, in nona!!ainment areas with
approved demonstrations, a source's
baseline emissions for bubble purposes
must be calculated using the lower of it
actual emission rate or allowable
emission limit, phis the lower of its
actual or allowable capacity utilization
and hours of operation. Thai is. baaelias
emission* in tba*a> are** awst gejaereUy
be calculated using leaver of actual or
allowable value* far til tart* buaiM
factors.*
Actual values for these factor* an
based on some representative historical
time period (generally the average of the
two yean preceding the source's
application to bank or trade).
How*w. where the state or applicant
•hows that the SIP. • source-specific
preconsiruction permit or aa eqwvahnU
document dearly assumes or specific*
allowable value* which are higher than
corresponding actual value* for one or
more basehna factor*, and that
document post-date* the baaeUne
inventory year for a SVs stttlnaunt
demonstration, the** value* may
replace actual value* for ealcalattag th*
bubble heairiins Where only oa* vaJa*
(typically the emission rats) la specified.
th* other two baaalia* factor* must
generally b* based OB actual Irrels,*
Such showings must be baaed oa
either data frost the SIP or data *a*4 !•
SIP preparatioa. '• Applicants any
alternatively perform appropriate
allowable wake* which are higher dua
actual value* wiM aot d*ky or
jeopardtt* attainment and matotananf*
of ambrart ataadavde. proescban of PSD
increments, or visibility. Upaa either
type of showiag. tbea* aUoweeJe vanta*
may beusad."
• Nitttni tad afe* I
EPA1 rapttKKM it 4* CT1 ».!*. UJl M.
il-H. SUM. tt-Z7 «Ml tU*. Afloat***. tBhi
ducauioo of *"T*fri^ appliM only to hi*^'TL
• SM Socttoa LA.1 and Apwndix B o/ totUy'i
Ttefaaiul IMUM Doomwnt far farther d*aul« oa
b«»«luM e«teii«m«L
who COB* crocttd th* dmotutraoM.
1 ' UM ef neb Wfhrr iflov«bU nlut* which
Biut
rcquin Mich tMbbki IB aoaKUuimcal mm* wttk
tpprovvd dmotwnooa* to b« pro0M**d w S9
Lni m •tihhnt mtaU tit
•od*Un| KTMIL la idditioo. Ux Sft nninihli
funhcr piotuM (RTP) okicuUtio
hrn «8 b» rm»«d.
•TtU a«d IB (I!
trwu. unbuilt «*aiu«nan* i
IH modtllm cuy putify OM of ncfe lOowaUa
vtlut*. Howrvcr. far bvbbfn pim.n»J M cn*-by-
UM SIP OTUIOR* in ttuinmcBi ITM*. th* JUpoa
rauuu duertaon to rt«uin ^^n**^ i-^i-.—i
jupport wlurt lisatad iir qiuiiqr dlipanioa
modtlioj li propoMd lo i**dtr •*• a/ nca
I ia required beca«M
Sf sewoas through
approved aVmaauns • th« Oea
Act's priodpal sneeaaniam for timely
attammaC and because many approvec
demoMlr»rift«w either do no< contain
stated aewnptiona regardinf ail three
baseline factor*, or were bated on
combtnatkms of actual and allowable
value* for the** factors. It recognizes
that bubble baselines must accurately
reflect the SIP asvumptions for all three
baseline factor* in order to maintain SIP
integrity.
Under this approach, determination of
bubble baselines consistent with
approved damoostratioa* is a
sequential tiered process. That process
was implicit ia both EPA's 1982 policy
and its 19C3 request for further
comment as well a* actual practice in
bubble actions under those notices. EPA
is making it explicit in response to
concerns that "paper trades" might
uadermfcM attaiameat demonstrations
because approved SIPs do not always
state all assumption* on which their
demoastrattoaa rery. By requiring m«(
unstated or ambiguous values for all
baaasiDa factor* A* rmalved ia favor of
lowtr octoai yq/aa*. today's notice
provides additional aasoranca that
babbles ia aonattainment area* with
approved denonslrations will not
threaten aabiefN standards. PSD
mcreaMRta, or vieabtlirv protection.
2. Commcsta oa Baaelioea in
NonattaiBBMOt Area* With Approved
Demonstzatioa of AttainaMat
Comments on baselines m these areas
indicated wide disagreement over where
EPA refrain stares to set this baseline
level The 1962 policy noted that "In
nonattaaurent areas with approved
demonstration* of attainment, the
baaeima must be consistent with
assumption* lued to develop the area i
SEP." That policy generally required tha t
where approved SIP demonstrations
relied on actual emission levels at
particular sources, those actual levels
would have to be reflected in bubble
baselines- Where SIP demonstrations
were ba*«d on alLawablt tnuswoni, th«
1982 policy authorized baseline*
reflecting such allowable leveii. despite
the fact that some sources' actual
•t"'*Ti'"if in currently or historically
lower thaa their "allowables." "
' For drtitlrd dtocu»»lon of tanttflt rmmioo*
and b»wlm« factor*, m Technical IMUM
todiy'i TtchniuJ U«u« Dixumtnt
AJD bubt>l*t m itUuaBcBi u*«4 >•!;••* oa
•llowabii vaiiM* ool uMd or nAaciad m tm
•pBr<7*«^ d*aua*
-------
/ VoT. 51. -Mflkr 2»-
Decemb
t9W/ Nbtfcet
• Bufrhau.u» primary mmtttmtotnt
ama aeedflrtf but ladoag sapm^d
demoatr«bo0» of attatswMnt moot use
the iowe«t-0f-«ctiMJ-SP«lleM«t)to-ort
RACT-allowable emissions baaalin*. M
described below, for each source
involved in the trade
• Bubbles in primary nonaitautment
anus needing but lacking approved
demonstration* most contribute to
progress toward attainment by
providing a 20% net reduction in
emksiona rtaiaining alter application of
the baseline* above to all sources
involved in tin trade or. if the bubble i»
being processed under a state generic
rule, the greater of a 20% act reduction
or the percent reduction which would be
required from all controllable stationary
sources ia that ana (e-|- taJcing into
account expected mobile source
reductions and disregarding area-source
contributions) in order to achieve
altiinnenC
• Bubbles to attainment areas and
nonattainment areas with approved
demonstrations must use the lower of
actual or allowable values for each of
the three basetine components, unless
allewvfei* raraes higher than
corresponding actual values are clearty
used or reflected in the demonstration or
otherwise shown not to jeopardize
ambient standards. PSD increments or
visibiHtyi
• In »tt areas, emission reductions
must be made state-enfui IBaMe in order
to qualtfy as ERCs and be deposited in
an EPA-epprowWe beuk.1
• In aft area* bubble* most nreet
more stringent tests for ambient
equivalence, mcredfnf additional
ambient significance levels, more-
protective air quality raodeirn?
requirements, and man conservative-
defini bans of da matrons trades;
• In ail arras, the totaj of any
incidental emissions of hazardous or
potentially hazardous air poihitants
associated with a criteria. poUaunt in a
bubble trade must renuria equal or be
decreased, whether suck hazardous
pollutant* have been regulated
proposed for regulatio&,l*atad. or th*
subject of a notice-of-iflSaot-to-Ust under
Clean Air Act Hi
• States must provide assurances to
EPA that bubbles submitted tor EPA
approval in primary nonattainment
areas needing but lacking approved
demonstrations are consistent with the
state's SIP-planning and attainment
objectives. For generic rules, the state
must make certain assurances in
conjunction with its tubonttal of th»
generic rule to- EPA. and certain
additional assurances with the state's
proposed and final approval of each
individual bubble under thai rule:
* Bobbfes in such primary
nonattainment area* may not us* vadib.
from reductions made before application
to bank or trade aucb credit:
• Where sources in such* area* seek to
bank credits in th« rotors, "application
to bank," for purposes of evaluating
credit); for use in bubbles, meant the
lime of filing an application to make, the
proposed credits stale-enforceable
through or concurrent with us* of- a
formal or informal banking mechanism:
• Bubbles must not taped*
compliance or enforcement (e.g.. the
policy states that compliance extensions
may no longer be granted' under generic
rules in any nonattainmaat area, and
that bubble applications do not perse
suspend underlying SIP limits or defer
source obligations te achieve those
limits*
• Generic nrfe*in»B areas wifl be
subject to increased EPA oversight
inch jing EPA parntipettofl m the
state s public notice sad comment
piocasa prior to state approval of
indrvfekaJ bubbles, subsequent reviews'
of iodMdbal generic approvals, and
rawm of tnv*genenr HtpMxnen fatten*
of th* rules tMBnerm. in order "to
ssstirv Baf epprorsu r&res* are
properly implemented! and
* EPA ov state, notices of
and final bubble approvals, m a aieca.
most dearry indicate any changes'.in
actual as well as aflowai/e emisaioQr.at
all sources involved ia. the babble. so-
the ambient effects of these trades may.]
be known.
These, andoiber changes aaaeunced
today will generally be applied to ail 59
revision bubbles and sUte generic
bubble ruiea. (hat haws not been.
approved by EPA aa of this data.*
O» June 23, ISM fee Supreme Court
unanimously ruled tfcai EPA may allow
states to use a siogk. plaarwid*
defiorboa of "jtanoaary source" for new
source review (NSR) sufposes in
nonattainmem areas as well as
attainment areas, provided use of that
definition would not interfere witk
attainment and maintenance of national
ambient air quality standards
(NAAQS).4 Under the "plaiKwid*"
definition, increases and decM&aes
occurring anywhere on plan* property
from emission units within the same
two-digit SIC code are generally eligible
* SM, hovrmr. tltcuramot •
in SMM* LG. «f lodcy't Micy SUwwm *nd
Sccuon LAJ.U4I at lotvft T«dwn
OocunMM.
USA. tne: t.
for netting:* and may be «i*d to z*
each other wttatrat tagaeoag
precaiitrttctraa peemii requtrea
major new source* ar modificauon
long as. actual pUatwida emjssioos,
would not (tgairtcandy iacnaae.
States and sources considering the us
of netting should, however, be aware
that applicable New Source
Performance Standards (NSPSJ.
preconscruction review requirements
under 40 CFR 51.18 (aHh) and (1).
NESHAPS. and SIP limits continue to
apply to fuebmodj/icatioos. EPA is
currently developing guidance for stales
that wish to adopt a plant-wide
definition of "source" for nonattainraeor
areas tato their new source review
regulations.11
Pending or future litigation or
rutenalrin-g; pvticalarry final resolution
of the settlement agreement arising fror.
the mdustry challenge to ERA's i960
promnlgatfon of revised NSR rules
(Chemfcal MoiTafoctunrs Association v
ETA. Nb. 79-111Z. D.C Or. February
1962); may alter aspects of this policy.
especially regarding certain transactions
under EPA new source review
rssjna«nsjs Sea 4> PR VBA3. (August 23.
1963)(pnp*«*dr*rnio«0}. However.
i aoti EBA finally re vises the
tie current ^
ia in effect ••
The- basettns) for a gjven source is tha t
level of emissions below which any
addftfonaf reductions may be counted
(credited] for use in trades. Questions
rerattag (o appropriate bubble baselines
for parttcohsr emitting sources or types
of source* ur nonattanunent areas
generated the-principal rssues rescfved
by today's notice. EPA's resolutions
strengthen SIP integrity and stales'
ability to make progress toward
attainment by (a) identifying more
• SIC Cod« mtiiu codu described m :hc
Standard terfBt 20M7.
ovemrilftf Natural Rrtetrrrr Dt*mi Cewrcri. fnc.
v. Ccnveh. «J P.24 n& 12 ELR 20*3 (O.C Or.
* Many IUM* avnmity (B^loy tii« stxiilcd
"du«J ft«iiiH«n" of *u«fwary (awe*." unoer w6. -
bo* tfe*pUB**ad«*dl tmitteit PMC* oi i«u.om-"
within it in "luuacuiy MOCCCI.' t'ndtr :ni*
dvfimtioK. whn any individual pitca of eguiprr.t-H
it larft (nouyi in lernif at potential tmiuions 10 :•
dcftnrfara "rairer itntonary source." only
incrcaM*anrfdtoQM*t*ln acruaf unmiofM frcn
thai uriinduai •*•*• «ii§>bJ» •• ••»«.'
WWa> !•• pi««r**d» deflaaooo providw gmi«r
opportunity for mrant; »«m»ua<. mrting a iJ«»
allo«Md^Uar U»4ul oWJannn. tndera. nrxrc -c
individual »«of •< »auiu«4 •^vupmcni u * maior A
itanonary «ourci.' tht 'dual dcfuiiuon iik>wi '••
'
-------
43813
Federal lUrgutor h VoL 51. No. 233 / Thursday. December 4. 1986 / Notices
Tht great majerity-of eosmenten
supported thb 51? fenndrtioo for trading
baseline*. aotta« th«t-Sffi trt th«
cornerstone of the Acff approach to air
quality management These eommeaters
also asserted that regardless of sources'
actual emissions, measuring reductions
from allowable levels assumed in a
valid SIP demonstration was entirety
appropriate for use in trading, since the
area would still attain ambient
standarda in a timely manner. See. e.g~
48 FR 38582 (August 31.1983).
However, other commenters asserted
this approach was either "too loose" or
"too tight" The first group stated that
credit should only be granted for
reductions below current actual
emissions, provided actual emissions
met applicable SIP limits." They
advanced various reasons for this
position, including assertions that
reliance on cast reductions, while
consistent with approved plans for
attainment might not comport with
"broader" dean air goals. Some felt that
SIPs were insufflcentiy precise to serve
as a basis for trading.
A second group of comments went in
the opposite direction, asserting that
baselines should always be maximum
allowable source emissions, regardless
of assumption* used in SIP
development These commenters noted
that emission rates (e.g» emiseiona per
volume of throughput or unit of
production) specified in SIP emission
limits are generally the only enforceable
limits applicable to existing sources.
Since existing sources can legally emit
up to annual levels equivalent to
maximum output and round-the-clock
operations so long aa they meet these
SIP emission-fate limitations, these
commenters reasoned, companies
should receive credit for agreeing to
binding limits on output or hours of .
operations which forgo such production
flexibility.
Today's notice responds in two
principal ways to these concerns. First.
it clarifies (he components of baselines,
how these are to be determined, and
who bears the burden of demonstrating
that a proposed baseJttarla consistent
with a particular SIP. Several comments
indicated that confusion related to the
determination of baselines may have
generated unnecessary concern over use
of allowables baselines under approved
SIPs. Second it reiterates and further
supports EPA's position that where SIP
demonstrations an approved as
adequate, the Clean Afr Act simply
requires trading to be consistent with
assumption* used to develop the area's
SIP.
3. EPA'a Resolutions on Baselines In
Nonattainment Anas With Approved
Demonstrations of Attainment
Where a state has demonstrated it
will attain an ambient standard and
EPA has approved the demonstration
and not subsequently found it
substantially inadequate to assure
attainment bubbles relying on baseline
levels used or reflected in that
demonstration amount to routine SIP
revisions. The state then has discretion
to maintain its demonstration through
any alternative combination of emission
reductions, so long as these are
adequate for attainment and
maintenance of the ambient standards.
Since EPA cannot require states to do-
more than demonstrate timely
attainment and maintain ambient
standarda, EPA will approve such trades
as long aa they are enforceable and do
not undermine the demonstration; See,
e.g. Train v. NRDC. 421 UA 60,79-60
(1975): Union Electric Co. v. EPA. 427
U.S. 24*(1978}. This means that credits
must not be doubted-counted, that they
must be calculated from a baseline
consistent with the approved
demonstration, and that tests of air
quality equivalence to the original SIP
emission limits must be met
In short under the dean Air Act an
approved attainment demonstration
creates a legal and logical boundary.
The state has met its statutory
responsibility and can substitute
reductions not relied on in the SIP for
those assumed by the SIP. so long as air
quality impacts are equivalent This
holds true for ail types of emission
reductions—whether derived from
process changes, extra pollution control
equipment improved operating or
maintenance procedures, or other
actions—as long as the tubttitute
reductions have not been relied on in
the approved SIP.1*
EPA accordingly reaffirms the general
principle that states may grant sources
credit for reductions below levels
assumed by approved demonstrations.
This generally means that where actual
values for emission rate, capacity
utilization and hours of operaucn fora
the basis for aa approved
demonstration, sources proposing a
bubble most use the Tower of actual or
allowable values for those factors in
calculating baseline emissions, and that
where an approved demonstration was
based on allowable values which are
higher than corresponding actual values
for any of these baseline factors, those
allowable values may be used for such
factors in calculating the baseline.
B. Baieline end Other Requirements for
Bubbles in Primary Nonattainment
Areas Which Require But Lack
Approved Demonstrations of
Attainment
EPA's 1882 policy proposed two
baseline mechanisms for bubbles in
primary nonattainment areas needing
but lacking approved demonstrations of
attainment These areas needed
additional emission reductions to attain
national ambient health standards, but
had not yet fully determined what
amount of reductions would be
necessary for attainment or which
sources would be required to produce
them. Nevertheless, that policy said.
states could allow existing sources in
these areas to trade on an interim basis.
either (I) by using baselines reflecting
Reasonably Available Control
Technology (RACT) provisions which
EPA had already approved, or (2) where
EPA had not yet approved general state
RACT provisions, by using "negotiated
RACT" baselines agreed to between the
source, the state and EPA.1* Both the
1982 policy and subsequent notices
advanced detailed programmatic and
environmental rationales for this
approach, including the fact that RACT
was the Act's most stringent general
requirement for existing sources in
nonattainment areas: that appropriately
determined RACT baselines were
consistent with current attainment
needs; and that trades using such
baselines could produce faster interim
progress by providing incentives for
sources voluntarily to define RACT.
disclose better emissions or ambient
data, or take other steps to do more than
the minimum required. See. e.g.. 47 FR
15078.1506O-41: 48 FR 38562-63. 39585.
Many commentets on the 1982 policy
approved this "negotiated RACT'
" The 1982 policy aaeuaed but did not ipeetfy.
ih» component* at "actuaT emJaetOBa. Mch u
capacity uMf« or number ef hour* o( operatloaof i
particular eourc*. ft atoo aaeumed. but did not
expmeiy revuijt- ihal actual emlaaion bvvia mat
be reduced to compliance levrli-before farther
reduction* -were eligible for endiL
14 H al*o halda tru* where the Agency guy
auapect. bat ha* not formally Indicated that a
previouaiy approvtd SO* detnoutnaon ia no longer
adequate to aaaur* timely attainment. For raaaona
of policy continuity, rejuUtory predictability tni
fair notic*. until EPA make* a forma] Ifauilnf of SO*
inadequacy, the approvtd demon* tra (ton cootroh,
See Clean Aft ACT Mcrton n
-------
Federal Reciter / VoL 31. No. 233 / Tharaday. December 4. 1986 / Notice*
4381!
approach, finding it innovative and
acceptable. However, two groups of
commenters again asserted-that it was
either "too restrictive" or "insufficiently
constrained." The first group maintained
that for reasons of administrative
efficiency, bubbles should be based
either on existing SIP reduction
requirements or on actual emissions.
without the need to negotiate new
source-specific RACT baselines. Since
trading sources in these areas would
eventually be subject to RACT
requirements in any case, they
reasoned, no new interim baseline
should be required. In partial support of
this position some alluded to the one
instance in which Congress has
explicitly addressed such baseline
issues—its 1977 declaration that in
nonattainment areas without adequate
demonstrations, existing SIP limits
would for the next several yean be the
baseline for offset transactions, which
were then the only types of emissions
trades.1*
The second group asserted that no
bubbles should be allowed in such
areas, since regulators could not know
which reductions were surplus until
demonstrations were completed and
approved.
In August 1983. "in light of formal
comments on the [1982] Policy, the
NRDCv. Conuch decision (since
reversed]. . . and the need to further
articulate the Policy's approach in this
area." EPA requested further comment
on certain issues relating to credit from
plant shutdowns or production
curtailments for use in existing-aourca
bubbles, particularly bubbles in primary
nonattainment areas requiring but
lacking demonstrations. 43 FR 39530.
While mott comments on the 1962 policy
supported continued use of such credits
without further restrictions, some
commenters had special concern* about
shutdowns in these areas. These
commenters stated that shutdowns can
hasten attainment and suggested that
granting credit for shutdowns that "might
have happened anyway' might act b«
consistent with the Act's requirement
for attainment "as expedlti*maly as
practicable."
In the Augusl 1989 notice BPA
addressed these concerns in detail
noting that:
.. . Unlike suroha reduction* froe»
additional pollution control or I
process changes, shutdowns produce a I
reduction of emissions. 100* of which might
benefit air quality tf credit were not allowed.
Granting fell or partial credit far their use to
(bubbles
existing*
aghi reduce that
'• See. e.s- dean Air Act Ajnmdmenn of 1977.
MCtum 129. codified tl 42 U.S.C 7302 aotr 3
Lrfttlatnt Haiory of tt* Clean Air /tc<
Anntidirtentt of IS77. pp. UT. 711 44 FH 2ir4-rj
(|*ntury It. 18791. Thit Confreanonal mandate wu
largely •upcncded by tvefltual Halt adoption of
< upcrvenmf SIP limit*. Under current EPA
refuUtwiu men SIP aJlowabla emiaeion run may
ordmenry be uaed lo compute the battliw for
ofheta only where an approved SIP demonitretlon
u*«d inventoried allowable enuuum* IB itt
demoiMmnon of rutonabie tanner progrtit. See
a»n Air Act m(1)(A). 42 U.S.C. 7SOK1IIA)
benefit... at least where the sowce would
have shut down anyway Tils reasootag
Inflecting a desire to av«td granting credit
for reductions that may ajot be "surplus"
because they would have occurred to any
suggestions mat credit be allowed only if
credit wm a sole or principal rmson for the
shutdown ...
Unfortunately the fame is aot this simple.
So long as H has aot been doubU-covated
aad a proper RACT baseuM Is applied, the
shutdown does contribute to air qualify
progress, since orach leas than 100* credit
will be granted. Moreover, tha opportunity for
credit suy improve air quality by
eacounging tarry shutdown of high-polluting
facilities that night otfatrwist b« ktpt
running, either because replactment is loo
expensive or to pm*rvi credit for further
plant expansion.
In addition. th*e» comncntan' toggwtiOB
of s test baaed on subjective motive appears
administratively unworkable EPA aad states
would find it exceedingly difficult to evahvMa
or rebut source evidence that • shutdown
was motivated by credit aad that the
shutdown facility would otherwise have
operated {. •-»-) far twenty or forty yean.
Thus this approach woold likeiy rt*uh in
either c% facto approval of all §acfr credits
(u&dermiaing the ret*oa for thai tut), ot a
burdea of proof so sulueaurt that aooa would
be approved (pamotinni source* waow
shutdowns were elicited by trading). More
straightforward approaches might either baa
shutdown bubbles until a demonamtioB of
attainment, or acknowledge their oncartain
aarun by applying s margin of safety—«.t, a
requirement that each bubble* product
«ub«taotlal air quality improvement—
toffident to compeaaata for any uncenainSea
and protect the integrity of current or future
SIP*. « FR at 388B3-M (footnote* omitted.)
EPA-then suggested seven specific
alternatives to the 1982 policy for
bubbles in these areas, including: a
prohibition on bubble credit from
shutdowns: a requirement of substantial
air quality benefit from babbles .
proposing to use shutdown credit or a
requirement of substantial air quality
benefit from all bubbles, with no special
restrictions on shutdown credit In
partial support of this last proposed
alternative, EPA indicated the
administrative benefits of avoiding
special definition or treatment of
"shutdowns" and "curtailments," and
stated that
. . . Requiring substantial progreia from
each bubble . . . could accelerate momentum
toward attainment directly improve air
quality ikfous>eaeh trad*, aad provide an
objective margin of safety against
BBcertaiaties associated with some
individual shutdowns, while kaviag to u
state the task of final SD> development It
would also maintain tha Incentive within the
|l»t2| Policy far industry to shut down high-
{polluting, ecatumucaily-margutaJ Murcci
.... The more each existiag-sourct bubble
OMMbules directly to accelerated air quality
progress, the stronger the justification for uie
of surplus reductions for such bubbles in the
absence of a demonstration. Moreover.
nqtanag all bubbles to produce s substantial
nir finality improvement beyond RACT
faeeaUnes aad RACT equivalence, could
provide s margin of safety sufficient to make
special treatment of ahutdowns unnecessary
... 41 FR at 3BSU-M (footnotes omitted).
Thus, while the issue exp&citly raised
by the August 1989 notice was use of
bubble credit from shutdowns in
primary nonattainment anas which lack
approved demonstrations, the
underlying issue was use of any type of
bubble credit in these areas. Since
emission reductions have the same
effect on air quality whether produced
by Jess-polluting process changes, more
efficient operation of installed contrd
equipment. fMtfanal pollution controls.
or shutdowns or production
curtailments, the fundamental question
wu whether all such reductions or no
of them should be prohibited or subjec.
to special requirements when used for
bubbles in tivese areas. That question
reflected- a further choice. Should EPA
ditfer bubble* in these areas until a
compete demonstration was finally
approved? Or should EPA authorize
continued use of bubbles, in order to
secure interim emieaton reductions?
Comments responding to tha August
1983 notice were essentially the tame as
earlier ones. A large majority of
Industries and state pollution control
agencies commenting at that time
supported continued opportunity for
bubbles (including those using credit
from shutdowns) In nonattainment areas
with or without approved
demonstrations. Virtually all industries
aad states commenting with respect to
areas that Aove approved
demonstrations supported continued use
of the 1982 policy, without change. " Of
n state agencies commenting with
retpecf to anas thai do not have
approved demonstrations, ten urged that
shutdown credits be retained for these
" t». Artrafceny Cotaty (MJ HaaJtk D»p«rm«nL
BoriMi of Air PolKitloa Caatrot Air Poflutum
Control IXatnct at \»B*nc* Couiry (Leuwviljel. KY
Ct Dayion (OH) R«e?o«d Air PoWutwn Control
Afency. See aJ*o. « J- rnm~'~'*
-------
/ Vol. n. N* a»/ Tkomia-T? Dteenbet 4. MW / Nertteer
At the;
CDOUBCntl SjlHJ Supported 9T
acknowledged the sfpmprnteoess of a
requirement for a net aaryMSty
benefit—in (he range of 2M extra
reduction* in emissions remaining
beyond a baseline reflecting RACT
enustion limits—from each babbie, so
long as that requirement was objective
and easily administered.1* To the extent
they addressed this issue, these
comments generally opposed efforts to
test bubbles by examining me subjective
motives underlying reductions."Two
state of local agencies asked that
bubbles be prohibited in these areas
until complete demonstrations were
approved by EPA.
Several commenting environmental
gnnpa asserted that EPA should not
permit any bubble* in nonatuinmeat
areas lacking adequate, demonstrations.
On* argued that EPA cannot deteraiae
that emission reductions are "surplus."
aid therefore creditable, in these areas.
because to do so would violate the
statutory requirement to attain
standards *as expedftiously as
practicable.'' Moreover, this group
churned using RACT as a basefiae
worrid not solve, tins problem because
RACT Uiufts are rufiiiiiimg uiessuiesi oof
a substitute fore SlPpnmdmgtimef?
stfotnmeot. TEHS* groBp* sfso esserterf
thai crediting shntdewns woura confNef
wiflr stages-' daty te onet air qoaiity
standarda'-M expedftknaiy a*
practicable" because, by "lesurmJiaf"
eransxcne that bav« already- ceased, ft
would aocosoplissk teaa essiseiaav
reducttosi thas is praeacaM* «ots» a
given penod of time. Another groep
asserted that albnriae shetdowo aedset
in theee-areas wooid strain effects to
progress toward atUinoMot. One
enviroiunaatal group weat a step- further
and urged that opportunity for bubbtas
be restricted solely to ituiomeoli
which have already mat narinnsl air
quality standards.11
"t§,. M*»0faUHill* naearMnr C4orad*
Depi. of Health. Air PolluSon GHUTOI Dwieioa. CL
comment* of Ulinot* OK.
MjlOV mQW^^Vi CQHHflittH UB0 aeai^^Wa uU
imponaan at aniamue iMate
in these nonattammtM a*aa» Sc» t-a- Cb
USA: Cbunpiio Petroleum.
"gg- Bey Ana (CAI Air Qualtiy VfanagemeM
DtMncL S«« *iwo SooHwm Caliiorm* G«i CD.
"E.I. lUaara iiitn Oc^vtneiu s<
Envinnuncwa* Qactoy Enm«m>|: South Co**
(CA4 An QiuUuy Mtiu^fawu Diu-.rr
" In oni at written aubouMtoM to th*
Admiraiiratorinad* in earty 19H wMh flntt
deciiioni on today t policy were lull pendinv
rtprt»nuu»e*.of teveii itatea and Ilia SUie aod
Terrdonri Au Pollution Profram .Adminatnton
and tha AMOCiatum olLoal AirPo^luiien Control
CXRcw* (STAPPAV ALAPCOl fimilarfy uryw* ffiar
buebi** no ^>n**r b» onfionxx^ or pnrary
individual bubbles as-StP revwwn»
under the ttttpolaty-" raises} nietrit
issoes. Seven) of these proposed)
bubbles were also located in primary
noiMtfeinment area* whfaa raqnired btrt
lacked approved demonsfrs.tfons. The-
issue raised related to bubbles of two
types: (1) Those which relied on
reductions from shutdowns that
occurred long before-any applicative to
bank or trade: and (2) those which reUed
on extra redactions prodeced by routine
installation of required control
equipment long before application to
bank or trade. Beth types of bubble*
raised the larger question ol whether SIP
Integrity and environ raaraal progress.
might better be assured in primary
nonattainment areas which requite bad
lack approved ikirmnatisrtoni of
attainment by allowing no bobble credit
or allowing; bubble credit onr> fer-
redoctronr beyond actaal emiseion
levels, already achieved or aftk*. tint*
source* opatimitA book at taode.
The final policy strikes whs* EPA
eevir
ettmesei
^__._.
tf^MSOKDSJ CSBCBVCSnvDV
tfiutfar
balance. These ehs
ratiooaJftssupparU&ftthes»arat
below.
1. EPA'r Rrrotrtuas-lfagaTdnigBaseane
and Otter Kequiremaals .
reqmre but d» not at the- tins* of a
bubofe appfaeafioBt hsrrv ER%-
demonstrattonx that amuiauf healni
standards wiO be sftsimyt babfalaa. wflL
generally be appro-red if they done* saly
on reductions whicb occvuie4 beJsrar
application for credit it they Beet other
e. and coosnteney wM»
future ptanaiog aftcrta; and II may
produce at least s 20% net reductioai at
emission» remajning aftei lining* !>>•
baselines have b«ea afx^JMa. Taeae
objective teats both respond toprevio«is
comments oo certain indlvioitaat btabbia.
apfklicafaoQ*. and go, subs4aaOiafly
beyond aiteroauv** riacmaed iafiPA'a.
August 1983 none*. At the saja\s> UisBk
they assure greater predictability a*si
deraoni (ration wai mtbau<*4 ei ayprawlTV*
potuion wttfemufutj tcaaattby •caa«MaB
ettvironm*«tal group*. Stact 'Ju* ftmata and
related underiyiof IHU*« o*d been tar»*d mi'
articuhKd at ten^ffc byewfltr ctmnwtfa, fr nr
addrm»«> t* pert of tbe. Ajencr » flrul navoMM
b«fow.
" CT. e.g.. OtJonCartid»Corp. fTexa«Gtyf. 47
FR rt539 (May T9. !98K B.f. Coodrich (Avon UleU
49 FR 4^e (FeBroarr 1
amLimt piujiesc withoa^ tnrpasTrrg- •
heavy «• bardeir on vohmtary babWe
tramracnoos that the tnn/uiiineiifaf
berierTtiof soch trader ere forgone. T
recect uw general piuiupie (net beta
SUCA propeTijr^Suiictoreoj vrrDotes
provide contmomf incentives for
sources tC'deUberkteiy overshoot
reguhrierf marks (rather than plan
merely to meet them), bubble trades- r
these areas can produce interim
progress beyond current SO1
requirements, and should be approve:
a. Specific "Progress" Re^ufnmer'
Applications for exhting-soorce bubb
in primary nonattaimnent areas whrc.
require' bat tack approved
demonstrations of attainment will be
deemed to produce a net air quality
benefit and wifi be processed for
approval if they;
(i) Use'1ow*»t-cf-«ctti«!-SIP-
alfewetle-«r-RACT-ilhrwabie"
em'seioM basegnes. Such baselines
mus< be eakdsted usutg
• Either the actual emission rate, th
SBP oro«hei federally enforceable
emisswiv Mcaft. or a RACT emieeion
limti whichever is lowest, for each
source tavo**»d m the tnde. TKs
baseaw feetor sheU be detfiuiuteJ d. for the
post-bubble case, emission levels thai
re&act overall eaurioas ecnwalencr.
and
tBi) Produce a substantial nei
redoctioe in actual emissions—i e. a
redaetiea oi at least 20% in Ihe
emissioBS maaiain^ after application
the stringent new baseline] described
above. (A reduction of greater than -C'
may benquared for bubbies appro*.ec
under geB*ricruIe» in some oi these
nonattainment arras. See discussion ,:
Section ULA,l-(dI of this Preamble.
below.)
With uspect ta soorcn which veek
bank enrisriarrredTrcriorrs after
pubikitma of today's oouce,
"application U» b«ak." for par pose of
ewfeariing credit for uw m babble*.
mean* th* time of fiimg of an
-------
Federal Register / Vol. 51. No. 233 / Thursday. December 4. 1986 / Notices
4282
application to make such reduction*
state-enforceable through or concurrent
with ute of a formal or informal banking
mechanism. However, in order to avoid
needless disruption and inequitable
retroactivity. this definition does not
apply to reductions which sources have
previously applied to bank. See Section
LA.1.D.U) of the Technical Issues
Document.
b. Additional "Progress"
Requirement State Assurances. In
concluding that properly-structured
bubbles as defined above can produce
valuable interim progress in primary
nonattainment areas which require but
lack approved demonstrations. EPA also
considered whether other showings
might be necessary to assure that
individual bubbles do produce such
progress. The Agency has concluded
that few such showings, whether
bubble-related or otherwise, are
practicable or workable. It did. however.
conclude that certain representations'
meant to assure each bubble's
consistency with SIP planning goals, by
requiring states to take a meaningful
look at such consistency in each bubble
approval would help assure that
progress is achieved.
Under circumstances detailed in the
final Policy and Technical Issue*
Document today's notice therefore
requires the appropriate state authority
to provide the following written
assurances to accompany each bubble
which is approved (either directly by
EPA as a case-by-case SIP revision, or
by states under an EPA-approved
generic rule) in these areas:
1. The resulting emission limits are
consistent with EPA requirements for
ambient air quality progress, as
specified in today's notice.
2. The bubble emission limits will be
included in any new SIP and associated
control strategy demonstration.
3. The bubble will not constrain the
state or local agency's ability to obtain
any traditional emission reductions
needed to expeditiously attain and
maintain ambient air quality standards.
4. The state or local agency is making
reasonable efforts to develop a complete
approval SIP and intend* to adhere to
the schedule for such development
(including dates for completion of
emissions inventory and subsequent
increments of progress) stated in the
letter accompanying the bubble
approval or in previous such letters.
5. The baseline used to calculate the
bubble emission limits is consistent with
the baseline requirements in the
Emissions Trading Policy Statement and
Technical Issues Document.
Such assurances need not be verified
by. e.g., detailed quantifications.
comparison with year-by-year progress
projections, or showings that all
reductions needed for area-wide
progress or attainment have been
identified and targeted for regulation.
They arc. however, expected to be
based upon meaningful review by the
state and to be consistent with the
documentation supporting the bubble.
EPA will aot second-guess such state
representations, provided they are a
suostannal test applied by the state to
each bubble and the state has explained
how the proposed bubble is consistent
with the ana's projected attainment
strategy. Nor will EPA examine, or
expect states to examine in making such
representations, any specific soyru's
subjective motivation in making claimed
reductions. The combined effect of these
requirements will be (a) to deny bubble
credit for reductions which occurred
before application for credit in
recognition of the fact that reductions
produced before any application to bank
or trade are unlikely to have been
elicited in any way whatsoever by the
opportunity to trade (b) to help assure
that only actual reductions in current
emissions an relied upon to satisfy
pending control requirements in these
anas: (c) to more systematically
encourage efforts by sources to produce
and permanently maintain these
additional reductions, by granting than
predictable bubble credit whan
specified baseline and other tests have
been applied: and (d) to assure that
these bubbles will not interfere with
these areas' attainment efforts; Any
other approach would enmesh EPA and
state agencies in lengthy, resource-
intensive, and uncertain efforts to
determine subjective company motives
for making particular claimed
reductions—efforts which appear
unlikely to provide greater
environmental protection than the
criteria articulated here. Cf. e.g.. 44 FR at
39584 and n. 15.39585-86.
2. Basic Rationale
EPA believes that Congress would
clearly have intended the Agency to
approve bubbles that despite the lack of
a complete attainment demonstration
for the affected areas, neverthelets-
produce progress toward attainment in
those areas. Section 172(b) of the Clean
Air Act does require states to formulate
complete control strategies to attain the
standards in these areas as
expeditiously as practicable and in the
case of primary standards, by certain
fixed dates. It also requires these areas
to demonstrate reasonabla further
progress toward attainment in the
intenm. However. SIPs and attainment
demonstrations are composed of doxens.
if not hundreds, of regulations and
commitments adopted at the state r
local level following proceedings L
often are time-consuming and ove
sequence. If EPA wtn to wait until
•very such provision were adopted and
submitted by the state before acting on
any of them, substantial environmental
benefits that would otherwise accrue
from having each available requirement
promptly incorporated in a binding
manner into the SIP and made federally
enforceable would be forgone. Such an
"all or nothing" approach would
produce less expeditious progress
toward attainment than a combination
of (a) EPA approvals of state provisions
submitted sequentially and (b)
appropriate use of sanctions authorized
by the statute to effect the adoption and
submittal of remaining necessary
provisions. Given the strong emphases
In the statute as enacted, it is doubtful
that Congress would have intended the
former, less progressive approach.13
For these reasons. EPA has decided tc
approve in these areas bubbles which
individually produce progress, both
beyond preexisting plan requirements
and in die air itself, and which do not
Interfere with these areas' efforts to
construct complete strategies that
provide for attainment as expeditiouslv
as practicable.
Today's notice accordingly disallt
use In bubbles of reductions made p
to any application to bank or trade, but
allows appropriate use of reducuom
made after such application. Where a
source voluntarily proposes to make
creditable reductions as part of and
following a banking or trading
application, the stringent lowest-of-
actuai-SIP-allowable-or-RACT-
ailowable baselines must be applied if a
bubble is involved, and that bubble
must meet appropriate ambient tens.
using emission levels that produce
overall equivalence to the emissions
baseline. The "net 20*" discount in
r»m«ining emissions then applies to ail
sources in the bubble, and provides an
additional safety margin to assure
ambient progress from bubbles in these
areas.14 Finally, the state assurances
••Sn. is. Chrmn USA v. N&DC itiprt n 4
•• TMl ~Mt JO*" raqomncnt ti *ito luppcr-tc
by tvidmc* indicting '*>•' 'or mo" «un«ion c
Mcun *ud> induction* from ill contnlUolt
tuooury mure»« of VOC tmiMioiu which rtmnn
4/tw taflvTMBUtxin of tmns«ni contrail nm
pl*c«- SM. *-S- "°> Atuuunatu Sunn of 13 A
Und« Diffcreni Drp*n of Sunorury Sou/ct I
Cor"
-------
Federal Raster / Vol. 81. No. 233 / Thuradayv Peetmbe? fc. t^n /.Efptlcea
will indreane wfaetfrar approval of the
bubble is Kftety to lemore ntfaer tfwtr
enhance* any wHpoftasjr opportunities* ro
ctmatract complete affafaneul
strategies.
EPA believes (hat betbie* meeting the
special progress requirements- described
above will product both progress
beyond preexisting plan requirements
and progress in the air. Pint with
respect to preexisting plan
revuj/emeaJX, each bubble would
achieve » net tightening of at leas* 20
percent Trades that result in a
permanent 20 percent reduction beyond
acmal enuaioa levels (winch are
already betow what Ike plan allows}.
would produce evea> greater progceaa
beyond preexisting requirement*.
Moreover, state assnraaces ta*t mat
accompaay eecfe bubble will help ensure
that approve! doe* no* represent a *tep
backward ia the proeaa* el devdoeJay a
plaa providing for timely attainment.
Each such bubble would also produce
net progress in the or. since each.
increment of required contxoi forgone as
a result of tin trade, would be more, than.
compensated by a greater redaction.
which was mot required, aad whian may
reasonably be presumed to have bean,
elicited by the trading opportunity.
Neither EPA nor anyone else can prove
that ail reductions which occurafier
filing of an application for credit ware
elicited in wKoie or in part by the
trading uypuifuiuly. Decisions in the
real world, whether corporate or
otherwise, always acse from trarfHpfe
motives whicft are ntrt «astry
uisents n ijtetii any strand or if fiiiJi imy
have "ripped" the balance toward1 or
precipitated a particular action.
However, the Agency has corn.hided
that this presumption is reasonable.
First, it is plausible met such reductions
were eficited at feast in part by *af
opportunity, especially where, as here.
sources must affirmatr»eJy decide-to
surrender something of vefne and
constrain purely private decnienmaking;
(e.g.. enforceably lauuuil to change
production proceasaetla order to create
a cognizable reducMskSecend. thi*
presumption it the seas'am tfi si
alternative to the adaa>«s>»rn»ely
difficult and uncertain approach of
attempting to deterrame lie intent and
motive* of source owners making these*
reduction*.
EPA has afso concluded that bubbles
meet in R uSes« aew requirement* wifl not
interfere with the statutory naodate the*
states attain standards as expedftfcody
as practicable. Ea-en snch botWe wooftf
produce ptogieaa in the air that for the
reasons fnsf described wonld Fffcerf not
have been adriered absent the trading-
opportunity.'*
3. Additienai Comidentio
Comrol" (T«h. 19MU: Ultak Ucbard A.UraO. Tin
O>nMrva aitmuvmiM la ihc linulcd caotroJ
potsibiliti^s av«ilabf«. 4nd ap^«*rY 10 luopwi ihcir
concfution abo«i the contnbunon RACT plua 33
?* coma forward ia
order to establish the quantifiable aad
enforceable emission limits on which
credit must be based.
Bubbha nnrr achieve subsnntiai
reduction* even wftnout sped J
"progrCTi^reqaireraenrj, since sources
not otherwise subject to or not yet
meeting 8ACTrequirements; with future
effecttve dates ta such ooaattainment
area* must fkst reduce emission* to
RACT-aflowable levels befart they can
begin to accrue credit*' Where modeled
showings of ambient equivalence are
required bubble* may aUo help identify
and correct remaining noratuioment
problems. In addition, bubbles may help
produce (a) batar compliant with
RACT liouta already defined in
partially-approved SIP*, (b) faster RACT
defuutioaa lot saurces not subject to
currently aeproved portion* of SIPs. (c)
incentive* lot plant aunagen to
disclose uncontrolled or untnventoned
sources, and (d) incentive* for wch
manager* te cootmi emisaioa* earlier
thae> reotared. Peraepa most important.
becaMee oJ their potential to elicit better
information a* source*, csmtons.
coBtrel parfannnce aad ambient
effecta, bvbUes saay enhance states'
abisrji to secare fatnce reducttaem if and
when suaatreahgtiona are requited. For.
example. EPA experience has
doeavemseal eaves in which bubble or
similar tiesiing application* have
tmprovediedeVe* and state air quality
maaafenserM aepebigfies by improving
data on emawicn* ambient impacts, and
unngaiefed-orunfmrenton'ed sources "
TV Af*ncy ha*
reducuoa oo wtuca Uu apphctm ttltm U* aariM
htopena to be a shutdown or prockKiioar
cunajlm«n(. BKIUM nulnptc moMvn ainuhrly.
"See. *». «7fB isnr.arjaw 44 FR 395*3 and 'i
i isaaz man ?.
RACT levaJj ar» jartai^fff et lean to* .jr mon>
below aacaBHuilaJnaiiaaoai ieveh.deoenoan; oa
.
ht(h«T than RACT baMtioc tevea uu> :
dirvctty tccattnfM airquafiry yrafnti. nr.ce no
•itabliah and v«aty «MMOAM l«o*»r» ;o^
nontraotioBAi KHIECJ*. at «cU u jrr f ct ^-i
cmiMionc profiTe* oTaucfi soutrei >«t 1 1
appffaoan ofSVeimifu (ran ana S'rr- C j
apprev«J 41, nt «a»l fOiqnitui a. iVllbn
prev sane:
EraiMioni Data SyiKm (SO R 1V83. lace '."
do** • l*ci*tf o> mind n»
mvtfliory. QIOAC ao^kcaiion* hava uunuiito >.-.£.
reduced pnnouiix unsuiocctea threats ;c PSD
; tnrfpcd1 tw in.1 soesiannat 3i»crr^--"-"
•rundown* iA«t occur a/taf <*•
for ertdu. no tt«» ihaa, oibct lypu oi aott-
applicanon rcductioni. may b« prtumad
reasoniibly tliciied by th« ovporrxminr '" mdfc TTnr
it f^manthj (ru> btiuuar i*« >o«rw OB«MMK
Mrhai«vtTin>«fmce«>nt jMiiim •Matnacvai
dtbbcraw daomoa uj forgo aa out •! iut»n»»»t
»aiu»— eiihet by iurfcnd*nntttt oo«ruu\j pacntl
or by accepting Ending producnon Imnnj— d b* W»mt»o«K»iiy
diffioflL if oof imooOTKkte. la pr««« o* (Urrm* (let
oppartuaity to if *d« WM* I|IA d/uria^ faro of *
suoiecu\e motne behind in* shutdown. iuch a
pr^sumonon ta amoiy ;u»nfied
procedural ta certain Halt ptogra.T.j. Ir. jcc:;.u- j
such cn«-ipe\-flc fxatnptet. oopawin". '0 ':3Cr
appew* t» r»a)»c« iraaUriearal ron> tor 5»or«-e« -o
tanBBa^Hitai ta»« Lamaaotm. muinnc n o«(ie<
inreMory aodvtaanMat a*ta- Fv »
emmionj Mna 'fte jti>
y«ar of the SIP. in woer toerncmsn-i ;JHT
naaaiiaa mnnlai «• nail i VOCtuCttf ru«-
Thu requjnMMMt haa pradMcco bau:tn< Od'a ' of
previously t>nquantifie
-------
Federal Rtrj**t I Vol. 51. No. 233 / Thursday. December 4. lfl» f
43823
Through all these ntecheausin*, butties
CM achieve substantial ensssion
redactions Mid sir qusJNy pianninf
benefits, even wftiMrt special
"progress rKjuweBBoH.
Nowithstanding these independent
progressive effects. EPA believes that it
may approve bubbles in these
nonattainment areas only if they meet
the specific progress requirements
described above and do not interfere
with the affected areas' efforts to
develop and implement complete
attainment strategies. Such bobble* can
help adjust existing inadequate
regulation* on a source-specific basis.
help make progress toward a Ml
approved demonstration, and help
improve air qoaltty. without "freextag"
inadequate SEP requirements that are
currently in place*.
Accordingly. EPA he* decided to
approve "progress" bubbles which are
consistent with the attainment needs of
these areas, which produce a net air
quality benefit and which may therefore
secure faster interim progress toward
attainment and more rapid development
of complete attainment plans.
IIL AettfiBoa) Peatey Changes and
CUriAcatieM
Today's notice makes numerous*
additional changes i& response to
comment* oa and following me 19BZ
policy. The most important of these
changes or clarification* are discussed
below.
A. Generic Bubble Rules
Today's notice recognizes, the special
position of EPA-approved state generic
bubble rules. Such mitt may provide-
clearer approval criteria and may result
in more rapid bubble approval wttfi
reduced expenditure of EPA and state
resources, by eliminating the need for
case-by-case Federal rulemaJring on
each bubble as an individual SIP
revision.
Today's policy affirms that state* nnry
continue to use generic rule* to approve
bubbles within the scope of ruch rales in
dil areas of the country, todudtaf
primary nonattainment areas needing
but lacking approved demonstrations of
attainment. It also establishes specific
procedures to ensure opportunity for
public comment on individual generic
actions and for regular EPA oversight of
state administration of all such1 ruler.
Finally, it speils out additional
"progress" requirements that new
generic rules must satisfy to be
approvable for primary nonattainment
areas needing but lacking
demonstrations of attainment.
State generic bubble rules approved
hv EPA as SIP revisions have
independent force of law aad farther
Congress into* the* "«*• prevention
and control of sir pollution at Its sowrct
(retnainal the primary responsibility of
State* and local government*." Ctra»
Air Act. 1101(aM3). EPA bat approved
or proposed to approve 10 men rales tor
9 different stale*, and at lee** 12 others
are being developed. Pew approved
rule* currently apply to primary
nonattainmaat areas which require but
lack approved demonstrations.
However, today's notice requires that all
generic rales meet certain additional
procedural requirements in order to
assure effective EPA oversight of their
administration and to identify aay
deficiencies in individual acpravaU or
state implementation pfocedares before
substantial numbera of state-approved
bubbles may be pat at risk. To the
extent these requirements require
modification' ef existing generic, rule*
they may apply to rules affecting any
area, not just primary nonattainment
areas which need but lack
demonstrations.
Today'• policy is mesa* to asesn •
these rules' smooth contie»ad opecetiea.
both now and through any foeaer. . «•
transition pf nods, wrthomupdaeaanyeay
the considered* orrcaOBent i
already meefeia i
will meet the aaUcy'ss>ba«aa«hm asai
procedural oojecttvesv
Basically. oooaves oppawf ay
under aouittef EPA-apfmm rjene» in
n/7e* oe/or» thm effective det»of thm
policy will not be effected or wwitai
due to today a chaagta. BscaMscEPA-
approved generic rales possess
indcpastdeot vatidHy aid ••* aauy b*
I upoe. caapieaaa ol specific
procedares for ahennf. such. SIP
pravisioM (see. e-g,. Clean Ait Act
aecoora 110(a)(2)(H).ll(Xf)l. states may
also cofUJaoe to approve oqoe^er i*
accord with such rule*, unless and ootii
those ruks are fuwily chaagsd i»
respoese to an EPA notice requceoaa;
and establishing a specific timetable foe
their modification. However, in order to
provide maximum aaeun&ce of SIP
integrity and ">"''"'" any need for
future SIP cooecnona, EPA expects
states to assure so- far aa feasible- that
generic bubbles they approve are
consistent with applicable terms ot
today's policy as well as thek generic
roles. New or pending generic ruk»
must all meet the terms of today's
notice.
All existing generic rules which
require modification to conform to this
policy must as requeued by EPA. b«
promptly revised. EPA will review -juch
rules to determine their.connstency with
.
reeiaf»rK
and will publfefc
es identifying
eod-noBS for correcting
them, and set forth e schedule for both
i ubrittaJ and EPA review of revised
rules. Where stales faB to reswlr*
identified deficiencies in such nites
trfthtfl the prescribed period. EPA may
efther rasdod iteprevioos approval of
the rale, or issue a notice of SIP
dtefideney under section 110(a)(2){H) of
tllie Act
1. Substantive -Progress" Requirements
Generic bubble reiee applicable to
primary noooUain/nerrt an Great credit only for those
reductions ecceiriag after an application
to beairer trade credit (whichever is
procedures
vrhiCB eeeasv that aJ» tredes
pissfpsewsdhyBPA aaBMeting the rule
vrulasso eatiefy aefBcac4c ambient
eeiitaassees tests (see Technical Issue
CtocumentSectisstULiltand
(d) Produce aeiinersU mission
riduction at least equal to a net 20^
rrduction in emissions remaining after
application of the above baaeiines. or n
lust equal (in percaetafs tetma} to the
aweratt casiseiaB} reduction (in
percentage terms) needed to attain in
title area (i.e.. at least equal to the
source-by-so w» •mnsrcn reductions
tiliat would be required for a full
d>monstration of attainment, taking into
account "uncontrollabla" stationary
(t^, ar»a4 sourcae aad »xpecud
emiseioat-npductions f
sources), whichever is larger." This last
n t>«i»-M»«r
NAAOS
T«l
o«u-
Ibl for i
kliBQ »!!_*-
S JOL
yen lixn'of '001
Hitman taura rmiuicni
(JJOixl.ll
T
-------
43824 Federal Register / Vol. 51. No. 233 / Thuraday. December 4. 1986 / Notices
determination must be submitted with
the rule, and must use the seme type end
quality of analysis requited for an EPA-
approvable SIP. In no event may the
overall emission reduction required of
generic bubbles in such areas be less
than 20% of the emissions remaining
after application of the baselines
specified above: and
(e) provide assurances, in conjunction
with the state's submittai of the generic
rule to EPA. that the state (i) is making
reasonable efforts to develop a complete
approvable SIP that will achieve the
percent emission reduction from
controllable sources described in the
previous paragraph and (ii) intends to
adhere to the schedule for development
of such a SIP (including dates for
completion of emissions inventory and
subsequent increments of progress), as
stated in the letter accompanying the
submittai or in previous letters. EPA
believes that the numerical
determination and progress requirement
discussed in the previous paragraph is
the functional equivalent of the
additional assurances described earlier
in this notice (see Section C.B.Lb above)
for bubble* needing case-by-case EPA
approval, since bubbles meeting thie.
requirement will produce attainment-
level reductions. For that reason, EPA
does not believe that it must require the
state to make those additional
assurances when it submits the generic
Therefore die reduction* needed from
controllable tutfonary tourcti are
And the percent reunion raduclraa required from
controllable stationary tourer* 10 anew a
141001
Thu« the net overall reduction required from eacfa
tenenc bubble would b« M« (La_ tne reduction*
produced by applicable beaeUoe* (e.j_ application
of a RACT emiMion ratal pha whatever percent
reduction in emiawona remaining after thi* RACT
limit la sufficient 10 yield UM 94% toull.
Stale* that wtah 10 avoid ciae-be-cae* SIP
revision* for aource* for whiek RACT ha* not yet
been defined in an approved SIP provieon may
incorporate "presumptive RACT" veiue* (*.«_ 80*
reduction for VOC) :n men eenenc role*. Soon**
would than nave the option of eccevxing the**
RACT value* for generic bubble purpose*, or
negotiating different RACT value* through the case-
by-caa* SIP rcviaofl proce**. However wnera a
tource involved in e trade 11 one for which EPA ha*
i**ued a CTC. but the itale ha* not yet adopted the
CTC-«pecifled emission rale ai RACT tad no RACT
ha* yet been tpecified by (he slate for thai source.
Ihe pre*umpnve or negotiated RACT values lor the
rrade muat be at lean a* restrictive if tne CTO*
specified emitsion rue tor *nai source
rule. However, to assure that generic
approvals continue to complement, and
do not interfere with attainment
planning. EPA will require the state to
include all of those assurances in or
with its notices of proposed and final
approval of each bubble issued under
the rule in such a nonettainment area.
Generic rules meeting these
requirements will assure that each state-
approved bubble produces reductions at
least equal to those which would be
required under an approved
demonstration of attainment Their
availability can also encourage states
and sources to take significant further
steps towards such demonstrations.
Since reductions sufficient for timely
attainment are all EPA can require for
approval of State Implementation Plane
under section 110 and PartO of the
Clean Air Act Train v. NRDC. supra.
further Agency scrutiny of individual
bubble reductions is not required.
2. Procedural Requirements
Today's notice includes tightened
requirements designed to assure, with
minimal burdens on state*, thai EPA'e-
respoosibdity to monitor the
implementation of all generic rule*
incorporated in SIPs (see secttar
110(aH3HA)(H)) is more effideady an*
effectively carried out EPA will rolflll "
this responsibility by fa) examining and
commenting on, together with any other
public commenter under applicable state
law. the information- provided for
individual trades subject to proposed
ection under generic rules, (b)
conducting reviews of individual trades
approved under such rules; and (c)
periodically auditing implementation oi
the rule itself as part of its National Air
Audit System investigations of state air
pollution control programs, including
indepth file audits of actions under such
generic rules. These activities will cover
state actions of disapproval as well as
approval, and will examine whether
rules are being interpreted or applied
wtthin the scope of their approval by
EPA.
To be considered valid by EPA. a
trade approved under a generic rule
must (l) be one of a dase of trades
authorized by the rule. (2] be approved
by the state after the rule hat been
approved by EPA. and (1} meet all the
provisions of the EPA-approved rule.
State approvals which do not meet these
requirements are not considered part of
the SIP and do not replace prior vaiid
SIP limits, which remain enforceable
and may make such trades the subjec:
remedial action after due notice by EF
to the state and soorcev
In addition to requiting that generic
rules or other state provisions assure
meaningful notice to EPA by the first
day of the public comment period on
proposed generic actions, and
immediately upon final generic action
today's policy also requires that state
generic rules or other state provisions
provide the general public adequate
notice and opportunity to comment.
including opportunity for judicial re vie
sufficient to make comment effective.
Existing state generic rules, statutes or
regulations will generally satisfy this
requirement. However, some
jurisdictions, for example, deny judicu
review to commenters who do not
possess a direct financial stake in
individual permits. Such jurisdictions
will have to modify their generic rule.
other provisions, to meet this
requirement.
B. Bubbles Involving Hazardous or
Toxic Air Pollutant*
EPA reaffirms and extends its 1961
determination that bubbles* in aoj are
must not increase emission* of
hazardous or toxic air pollutants.
Bubbles cannot be used to meet or avc
National Emission Standards for
Hazardous Air Pollutants (NESHAPs)
that have been finally promulgated
under Section 112 of the Act. '\'hen:
NESHAPs Aove been proposed but xj.
promulgated for emitting sources whic
are the subject of a bubble application
the proposed NESHAP will generally
serve as the baseline for determining
creditable babble reductions, and the
trade must produce reductions at leas
as great as those which the proposed
NESHAP would produce, if
promulgated. Moreover, no source
emitting s pollutant subject to such a
proposed NESHAP may exceed
emissions allowed under the propcsec
NESHAP as a result of the trade. Whe
a bubble involves a pollutant which is
listed under Section 112, but no
NESHAP has yet been proposed for T
relevant source category, or a pollutar
for which EPA has issued a Notice-cf-
Intent-to-List. there must be no net
increase in actual emissions of the
noticed or listed pollutant.3' In genert
" In tome limited amrnstancti additional
poilurints miy be trcsttd as nsteti poilu'anis
Tecnmcai ISJUM Oocumtni. Section i B 1 3
-------
/ Voi 51. Mot 233 f Th»rtd*r. D«cea»tar 4. lf*fr / Natfet*
all bubble* iiroivtag ffBlaaumj of
pollutants described above mutt nee
tower-of-actttil^-.NESHAPvaJlowaBie
•millions baseline*, and mutt take
place within a lingie plant or eontsfaoit*
plants.**
Commenten who addmaed drit issue
divided into two general eroepe. One
group aliened that hazardous/toxic
mtricttone aboold extend beyond
pollutants currently regulated propoeed
to be regulated. «t lifted under Section
112. These commenti geaenlly
maintained that mtrictioiu should also
apply to all polmtanta the Agency is
"actively considering" fat liating. A
second group asserted that neither
volatile organic compound (VOC) nor
partculate entacioM should be traded
unless there ii dear evidence that
specific auhatancet preeeat ia wch VOC
or particuUte eaussione are "raiativety
innocuous."
EPA he* detarmiaed that for reaaoM
of policy and adminietradva pneticaiity
these suggestions, while laudable ia
imient should not b* adopted. BobblM
are elienuttiye ii***ni «f /»nmpir^ pr<
which should geaecaJv be touted no
differently than other eompJIaace
strategies, provided basic SIP
requinnents of cooaistancy with am&teni
needs, PSD Eocreneats. and Jnlerm
progress an met EPA'i statutory
authority to farther restrict trades on (he-
basis of hazardous smbittnces which
may b« present in a particular criteria
pollutant stream («,|_ VOCs) aad which
may be subject to a Bstfag, nooce-o/-
iatent-to-Ust or propoeed NESHAP. huf
an not as yet regulated under f 112. t»
limited. Generalized attempts-1»
exercise socb eathorrry beseiroii thsf
presence of substaacas on which t&e
Agency has takao no fimmt setim
whatever wotdd b* still aor« IHMOBK
Moicuvn, the mncfcut •snngtAy/o*
such terms as "actively considering'" or
"relatively inoocaous" suitMea sgauMt
such tests. States reaaa tree to adopt
further mtrictJuns cuusistvnf wttb too}
laws and needs. Howrrer. with mpect
to national requirtmaaA EPA haa
concluded that dear steeaatea potato
based on actions pursuant to tW
deliberative process tadacord
evidence nuoerfyinf section tTY
dttsTBtaatfora arete be preferred.
Inttrtftari partitf siioaid 5a> awim
however, thel oodvr today's pvUrr *•
ininm dkfcnttat to
* ffl
f ncn-hinrdwa VOC) At lent » rueh « cradi
•moid BOI moh ia ia tao«*M IB (or iBCT*«m i
tauuttm*. (S-t~ •*«• i
consider on a case-by-case baai»
whether bvbU* proposaia iavohr*
poUutaata which, why* ne4 ngvlated
lilted or otherwii* noticed tuder section
1H an regulated aa toxic under other
federal health-baaed statutes; and to
requin forthec aealysis befon
approving each proposals.
One cotnaunter expressed concern
over the 1962 policy's vsa of the tana
"reasonably cloae" to indicate the
distance which may be covered by
bubbles involving poflutants Hated or
propoaadtoberetpJatedanderaectfon
llZgPAagreeatotermlsaiabiguoBs.
and with the exception of bubbles which
affirnetfveiy dtartasr each
below the lowerof^ac
allowabia baeeline. ha» wbetffMed uW
more protective ead certua
thM aach trade* OOCBK wrthJfca a: siof»e
redisctrORs wftfcii'caa ease
Dodemlxctfons oraxpanstoaj. r.r
source eitfng! or •xliUiiy-ao'am
campflaoce. Ifruiieriyi-stnictarad b-
may rtdbc* uieanflvw for sources
delay, conceal or hoard scfoil cr
potential nductions until an ir.tedia:.
use arise*. Baaks may also pro* te
ether, interim eavironmeatal ^••.-.tn^
since banked EKCa nnain on: -j( -Jjt a
(although they must be tnated ir.t StP
ptanaing purposes as "to tha air '• until
used. Ia addition, banks caa he.p s:a te
agencies maaage their permit woriuoac
mora afficiantly. bacausa portico* of
. new source or existing-soufca
compliance tcaaaaetions may ns pre*
permitted- oc nviawed ia advance.
. Baaka may also beip sauee
•yeasswlicaily aaaan that all uatued
surplus tediicriops an treated a* "vn \b*
air" for SIP pkaaiaf pMtposcs. »votdnu
potential iaesoaiataacMs wakh :
ad«e0«hsMkhar
effects, tadsqr'e
they rery osdy as»
CTirreat asaesAoa- aai.ttea i»
effiiMiGflft •& mi tfeA to^dtMB 4MB
• I III. ll^v.^ ^^ ^ .^pw ^k^^^^^ ^i^p
whicheve* iarknvecj ia
over whe«h«f. at eddlltea to meeting
other BRC requirement*, reductions
must be a»ade fetlaiafly enforceaose to
be fbnaeJy credRrt tar benfaag Tbe
aiufwvr Is* 8* Iluwtivn k> ord«r ie>
er ealseiaa tedattfoa eredlta
noticed, listed, ot profoaadi ta be.
reguialadlv
Rufacth
t be nrxdi
Sevecalof thaae pjcssfljuonm -nntahtj
the propoaad fiOEEHAPs baa
»propoeaM'?
•missions cap. the iaclusioa of
poODtaaoj i
to-Larti
contigucnnv pourd* tot frrrnrr trf erttra fs*
or-f '112-affowvbfn bweonw^
represent sabetaatial HgiiNnhup ow
the 1962 policy.
C Banking Eatitu'an Atai
/SfiCf/
gA-epeaai'aMe <
banks BMy *Uow sourc** t* Men BBCs>
for their own futm oea 01 KM he/othse*.
Today's aotice nitenAea tha* starts* see
by no matae required to- adopt beaJbs*
proceduna. bat aotee tharbakkasMf
by (he sCrtr by their tfmr of deposit in
order, r*, IB befter enmn the integnry
of me state's so* quaHtj piannmg
process oy prwrtihg SOBTCW frcra
banking reductions of emission* which
their permits do aal prschide thsm from
fn£ QJ amii. This- req«irein«ni wil
also prevent undue relisnce by
or pi^^n^H parties oa<»iss>oa
ndnctsoaa, wkich hav« oot ncru,ally
occurred.11 How«v«r. btaoM.
impertaat planning wftdtartaomeaiai
Ka«^fflt% *T Hanlrf "ny mrifr ~
oad* prtor fc ippucaooo to b*ni or
•riBbi A»dltrttno
-------
43828 Federal Register / Vok 51. No. 233 / Thursday. December 4. 1986 / Notices
Actions merely create extra reductions
in actual or allowable emissions, which
cannot by themselves produce any
advene effects on air quality, they need
not be made federally enforceable until
used*1 Where states wish to make'
banked emission reductions federally
enforceable at the time they are banked,
several mechanisms may be available
for doing so without case*by-case SIP
revisions. States with EPA-approved
PSD. NSR, visibility and preconstniction
review programs can issue permits to
credit reductions from emission units
currently subject to these
preconatruction permits.34 States with
EPA-approved generic rules may also be
able to use those rules' procedures to
make reductions at existing sources
federally enforceable. Since only
reductions in applicable emission limits
are involved at the banking stage.
modeling should not be required.
Moreover, these reductions should
automatically meet the requirement that
changes in emission limits under generic
rules not jeopardize ambient standards
or PSD increments.
Since some trades have special
requirements, banks do not guarantee
the validity of particular banked ERCs
for all potential uses or for til time. For
example, because only actual reductions
occurring at the same major stationary
source are eligible for netting, banked
reductions created at other stationary
sources cannot be used for netting
transactions. However, banked credits
resulting from reductions at other
stationary sources may be used as
offsets or in bubbles, so long as this
notice's other requirements for
appropriate use of credits are observed
and applicable offset requirements are
satisfied
Because of differing regulatory
requirements, the amount of credit
actually derived from particular
emission reductions may also differ
from one regulatory program to another.
For example, in primary nonattainment
areas needing but Lacking approved
demonstrations, the amount of credit
Since state* may haw to revUe their refuiaJion*
or permit procedure! in order to impJeneal thu MW
staie-enforceibility requirement, full
implementation will not be expected uatU on* jr*w
after publication Q{ today'* noo.ee. However, all
crtdita not mad* enforceable when backed during
Uui interim period, together with all credit*
deposited poor 10 today's notice, should be made
ttate-en/ofceabU within cifnteen man tin from the
date of (hi* policy.
" a. 47 fR ISOTa, IJOtl at cot 1
14 Some lunadictioo* may aJM UM eenenl ttatai
preconetructioa review procrmme that have received
EPA approval 10 credit reduction* e4 axiaumj
tourcet if rach reduction* are emend u&dex the
program, xnce requirement! under thete program*
• re federally enforceable.
available from a given reduction for
bubble purposes may be less than that
available from the sane reduction for
netting or offset purposes, since special
progress requirements apply to bubbles
in these areas.
Because the us* of credits will change
(rather than merely reduce] emission
levels if approved, such praposala
should be carefully evaluated to assure
they meet all of today's criteria for
appropriate use. For similar reasons
proposals to use banked credits will
usually require additional approval
procedures (e.g.. additional modeling for
certain TSP or SOi trades), whether
such proposals an evaluated as case-
by-case SIP revisions, under EPA-
approved generic rules, or under EPA-
approved new source review programs.
One commenter asked how banked
ERCs would be treated if a
nonattainment area is being
^designated to attainment.
Redesignation will have no effect on the
banked ERCs. so long as state planning
considered those ERCs to be in the air
(l.e- in the inventory) at the site of their
creation. Because local recessions or
shifts in industrial patterns can
temporarily affect air quality without
regard to the adequacy of state
emission-control efforts, EPA guidance
requires that redesignatioa not be based
solely on monitored air quality. In
addition to considering factors such as
the state of the particular economy and
its effect on emissions, EPA may
consider the number, type, and state
inventory treatment of banked credits.
Such procedures will help assure that
reliably banked reductions are not
reduced or otherwise adversely affected
by shifts in an area's designated
attainment status.
Some commenters asserted it is overly
cautious to require that all banked
emissions be considered as "in the air."
One commenter asked that state
planning b« required to include as "In
the air" only a portion of banked
emissions analogous to a "reserve
requirement" This comment drew
parallels with financial banking to
assume that given withdrawals and
deposits, a certain "float" quantity of
ERCs would always remain in the bank
and out of the air. EPA recognizes that
reductions placed In backs may tend to
keep the air cleaner through a relatively
constant level of deposits. However,
EPA cannot allow states to consider less
than their full amount of banked
deposits as "in the air." To do so could
jeopardize air quality planning and
attainment.*'
D. OBERS Projections and Doable-
Counting
In its August 1983 notice EPA asked
for further comment on whether some
SIPs' translation of general economic
growth projections provided by OBERS
(Department of Commerce) directly into
projected emissions growth, left "no
straightforward way to disaggregate the
projections into shutdowns and new
plant openings." Whether such SIP
demonstrations were fully or only partly
approved the notice continued such use
of OBERS might make it impossible to
distinguish which shutdowns were
already relied on in the demonstration.
Therefore, it might be "difficult or
impossible for states whose SIPs rest on
OBERS projections to grant credit from
shutdowns for use in existing source
bubble trades, consistent with the Clean
Air Act" 48 FR 39581.
Most industry and several state
commenters asserted that where OBERS
data were used to project needed SIP
reductions, us« of shutdown credits in
bubbles was not a problem, since
OBERS figures substantially
overestimate the total amount of
emission reduction needed to attain. For
example, one industry commenter noted
that "emissions growth will not be
directly proportional to economic
growth because of the installation of
new environmentally efficient
technologies. Therefore. SEPs which
used "OBERS" projections already have
" la order not to defeat bankings purpoae of
ancounfuif, theeirilnt poinbf* discoiure and
production of potent}*! eitra tmiaaton reductions.
o*e of beaked credit* for babble purpote* in
prvnarf aonoltauuntntanai »Aic/> loc* approved
dtamaoeOoa* will continue to be allowed.
provided the»e credit* meet all b**eiine and other
sppUc»ble requirement* of today t notice for :fiese
are**. Thii fenenlry includei the loweit-of-eciuai-
SIP-«Uow*bU-or-RACT-eUowable tmuiioni
baeelin*. applied t* of the date of written
application to the 11*1* to bank luch reductions
through t (ormel bank or Inform*!'b*ftx:ng
medunua for UH in future tredn. It siso mci.ee>
that 20% oet reduction requirement ana state
***unnc*i specified above, at the time such c.-»a::»
en ipproved foruee in bubble*. B*nfc«d crecnj
m«lti0*. fro* P^Xibutdow* or procuct-.on
nnaibneea OUT be u**d for bubblei in these are.»
o« the) *UM lam* *• we of other beued creuio.
provided, their UM i* tubiect to ftnnftru qualitative
review to ***ur* legal technical and programmatic
comuieacy witl SIP planning goan tt-i- avoidance
of-iroftmj demand"). See tod«y'« Policy ai n 2«
and Section LA.1XJ3I of the Technical Issues
Document. (Btnked credit* resultin*, from ter.am
shutdown* or production curtdUneniJ ma?
however, be lubject to >pea»l reitncuon* for offset
purpote*. See today's Technical Inuct Document it
n.14).
The «o*oal mtncTioni dltcuttec ibov* oo not
apply under tode.y'1 nowce 'e u*e of barjea cr«c.!
for bubble purpo*e> in other ar»««.
-------
Federal Raster / Vol. 31. No. 233 / Thursday. December 4. 1986 / Notices i*j827
an inherent growth potential built into
them, end allowing ERCs for shutdowns
in these areas will not jeopardize a
state's ability to demonstrate
attainment" A local agency agreed that
"demonstrations. . . based on such
emission projections would over-
estimate attainment because some
growth will occur from (whoilyj new
sources, new sources replacing «isting
sources, or modified existing sources.
(all of] which would be subject to...
New Source Review rules, rather than
the less stringent (SIP] requirements
assumed in the emission projections."
Several state commenters also
stresaed that while use of OBERS
projections is not widespread the
underlying question is whether the
area's SIP process incorporates
conditions sufficient to prevent double-
counting of shutdown credits. One local
agency recommended that shutdown
credits be prohibited where the source
involved is within an industrial category
projected to go through an economic
downturn, asserting that in such cases
the SIP implicitly relies on the expected
shutdowns. An environmental group
went a step further, and urged that all
shutdown credits for bubbles in areas
using OBERS projections be completely
prohibited.
EPA has concluded that the
requirements of the 1962 policy are
sufficient to prevent double-counting of
shutdown credits, and should be
retained without further special
restrictions, first use of OBERS or any
other projection is relevant only where
an area has an approved attainment
demonstration. Today's notice generally
disallowi bubble credit for pce-
application reductions (including
reductions from shutdowns or
curtailments) in primary nonattainment
areas which require but lack such
demonstrations. Thus today's notice
largely moots any issue of double-
counting for past shutdowns, in the
areas for which this issue has been
raised with the greatest concern.
Second, use of OBERS projections in
areas with approved demonstrations
does not appear nearly so common as
was assumed in EPA's 1983 request for
further commens Even where such
projections were used in approved
demonstrations, they generally
overestimate the amount of emissions
forecast to exist in the year of protected
attainment They therefore tend to
assume substantially less overall
reductions from source turnover than
will actually occur.1*
Finally, even if such projections did
not overestimate emissions, under
today's notice the state must show that
use in bubbles of any reductions created
by shutdowns is consistent with its
attainment demonstration and that
those reductions were not already
assumed in its SIP. For example, the
state must show that it did not implicitly
or explicitly rely on a "turnover rate"
from the difference in emissions
between existing sources and better-
controlled new sources for part of the
reductions required in its SIP from that
industrial category. Alternatively, it
must show that if a "turnover rate" was
assumed the shutdown credits used in
an individual trade result from
reductions in excess of that turnover
rate. Where a state regulated the
sources in a standard industrial
classification (SIC) without explicitly
relying on turnovers, then bubble credit
for a tt jtdown within that SCI category
would not in general be double-
counted"
These requirements should fully
protect states and sources against
advene environmental or SIP effects.
£ Improved Modeling andde Minimis
Requirements
Bubble applicants must show that
their proposed trades are at least
equivalent in ambient effect to the SIP
(or other} emission limits the bubble
would replace. For some criteria
pollutants (e.«-, VOC or NOJ this test
may generally be met by showing equal
" Thu i> ae**cjua
prottctiona aaauma that uniti a/production (and
hrnc< tmunonif boold. ho«rtv«r. t* awm
th* aattmnt Mul«aUM* ooiwtd«fitroni wmca
apply to SO.. TSf and CO. aa d*»cnb«d b*iow aiaj
apply te NO, tr»*«inro»»in| viajbilny impac!> \
from «lava<*d pJnm**. SM S*C£KM LJ.1 b. of ioda>
T»i.".mcal Uaun document-
-------
43828
Fe*jfc*d Rajgtar / Vol. 51. No. 233 / Thunday. December 4. MM / Noticee
accompanied by coapentaUieg
decnun. iho«U aoi b« iub)iet t
stringent requirement*. A* *e 1962
notice put it "Such trade* will have at
most a de minimis impact on local air
quality because only im'oor quantities of
emissions are involved ... the Federal
resources required to evaluate these
trades could best be used to evaluate
actions that have a potential impact on
air quality." 47 FR at 15085."
One commenter asserted that this 100
TPY limitation was unnecessary, since
the trades to which it applied wen
already required to produce no net
increase in emissions. However, four
state and environmental commenters
urged that de minimis levels for such
trades be the same as those triggering
federally-mandated review of emissions
increases in PSD areas. These comments
primarily noted that EPA had already
defined more relevant "cutoff" levels in
its regulations for PSD. for NSR
preconstruction permits in
nonattainment areas, and in visibility
permit regulations, and that emiaaioo
shifts of 100 TPY from one source te
another might (till be too large to go
unexamined for certain type* of
emissions and lituahoas.
In order to enure prosecution of
ambient air quality, today's notice
adopts more protective de minimia
levels—derived from those for PSD; NSR
permits in nonettainment areas: and the
visibility permit regulations—of WO TPY
for CO,« TPY for SOi. 23 TPY for
particular matter, and 0.6 TPY for lead.
Because of this action, state ambient
evaluation of de minima trade* wiil no
longer be required for generic bubble
rules to be approvable by EPA.40 Trades
involving sources of substantial size
may still be implemented as de minima
under today's provisions, as long as the
quality of ERC« traded by these sources
is below the levels specified above.
2. Modeling Requirements*'
Numerous comments were received
on the 19&2 policy's t&jee Uval approach
"Tht 1982 document did. hoai.ei. note the*
such "Igcnencj trade* an inn robeeci to »n»b>ent
i«d (at the itou level aodj . . . tbovld
acconfcrtf ly be evaluated by the ho«*d MX be cocMraed to >mp+y UtM «•»
tourcet ead moaUficaticeta need oat mee* «•
applicable requirement*, including thoe* apeafied
under 40 CTR 51.18 or parallel EPA-apcn/rvd tra-te
rule*.
«' The fonovmtdtKBwion m«ii«(<»a bMh
uiten*> uii*tuieim.iit* made m the 1S61 raoeWini
screen (a*e Trctimol btaun Document. Appendix
C) and SPA'i n*f *ntn «o meyor umiiimiiu on
moaeiing u»u«t.
to demonstrating
The vast majority wttght added
clarification, stating, for exaopie. that
the 1882 poUcy ad'^adequately
delineate the level of modeKnf
necessary in each instance." Today's
notice tightens and clarifies the
conditions under which ambient
equivalence may be demonstrated with
less than hill-scale modeling.
o. Level I Criteria. Under the 1982
document no modeling was generally
required of SO*. TSP. or similar trades
where applicable net baseline emissions
did not increase, sources were located
in the same immediate vicinity
(generally within 230 meter* of each
other), and the taller stack was the one
which increased its emissions. These
conditions were believed sufficient to
assure that local ambient concentrations
of the relevant criteria pollutants would
not inc-ease as a result of the trade.
EF.' has added two criteria to those
specified in 1962. in order to provide
additional assurance that trade*
approved under Level I wHl have no
adverse ambient afreet First there moat
be no complex (e.g~ monntamow)
terrain within 50 kilometers of th*
trading source? or within the trade's
area of significant impact whichever is
less. (For simplified methods of
determining "area of significant Impact"
see today's Technical Issues Document
Appendix E). Second, stacks with
increasing baseline emissions must be
sufficiently tall to avoid downwash.
Some industry commenter* objected
to the 250-meter limitation, advocating
use of either trade ratios for sources
beyond that distance, or an 800-metar
limit extrapolated from unrelated EPA
reguiations.4a EPA has retained the 290-
meter limit as substantially more
consistent with the modeling screen's
original intent of simplifying modeliag
requirements for trades which eooki not
jeopardize ambient equivalence.4*
4« Se* «\4_ 47 FR MM. 5066 (Tebrar* S. HB*.
«• Trade radoe may already be u*e*t under
|a»era4 prevteuea Invitm* elate* to dwapi otker
equivalent approecbea wtucfa adequate}? iddrea»
ambMOt concern*. SM. 14- 47 FR at 1STJ5T and •_!.
. However, to be approved by EPA each rattea
would tenantry have to be denied Ihraajh ere«-
vode advance modeio| W afl eaweo. « weJI «e
thaw likely to trede.
Several commenia alao objected to UM
raquiremenl Uut Lr*e4 1 tndn not IfMain
enuawona from the eowce wnh the low effacflu
pNflw htH|Kt* TIMM conmentt AOMd anart aodvf
venoua condttiona aamlM ttada eaaM *o very m
efhtem ptame hetfM dMt ntniHrwovM
coneutenxry hat Tnjfax'' or Tunai." One eJe»
rugjeited tMa Ihnmrtoii mr^a auuiajeja VM
itacki (o core tocel e«cnaei*r" M "lewer" i«ed»—«nU inU be satufird.
Moreover, ana* such trade* cannot increase net
baaeiine emajaaiona. ihu limitation meniy ensures
they wlthnt create new ambient violanoni.
BiJaeaa ettkarDA reajuieiuon* addn** ihe in« of
exeeutveiy Mil leacta to cure exaung ambient
•noUUeoa. a* bnherra*tncuoa m u>a Uvet 1
requirement ajaaari nquired.
44 For further diacuaaion of Ihne tia^ificanc*
leveia and ttx inuaeaed aaavnnct of
conjunaJe« «r«» toetary't more loonmcaied Urel I
owdelini aacxa*ck tea fleckanaieui. "Modaunj
Cnteni: The Ktj to Major Reforms for Emiaiiona
Trade*.1 APCA Ptow »4-«6J (San Francisco.
California. )ui>e 2S. 19MV
41 Under aone limited conditions, conservative
screeninf modoti may be substituted for ihew
reflned ntodaJ*. eod i* th«a* cases a full year of
meieorolotx*! d*4a may act be nnetsary See
Tec&ntcal Iaau*s Document. Secnon I B : b.(3!
-------
Jtexbtar / Vot St. Nor. 2» / Thursday. December 4.1988 / rfbttce*
•3829
thn that produced bjr pn>tnde
emission limits. rod may b* approved.
Because refiaed modaet htvt now been
approved by EPA andtbafr parameters
may be specified with greater certainty
and confidence. these requirements also
provide a firmer basis for approving
state generic rules incorporating Level
D.4«
c. £ev»/ III Critona. Trades which an
not d* mmuruf and do not satisfy Level
I or Level D above must generally be
evaluated by full-Male ambient
dispersion modeling. Two air pollution
control agencies recommended fixed
trading ratios in lieu of such moddsaf,
asserting this would reduce cost and
uncertainty while continninf to meet thai
goals of the dean. Air Ad EPA
recognizes the legitimacy of the**
concerns but has concluded met trade*
which do not satisfy Level I or DTais*
the Idode of air quality issnes wfafeh
appropriately require full-scale
modeling, unless such trading ratios
have been {ratified by similar area-wide
modeling conducted in advance of the
trade.
Today's notice does, however, modify.
Level ID to provide states and sooraes-
more flexibility in this regard. Where.*,
trade, meets- a&othax 'critara of Level IL
but Level 0 modeling has shown
«ianiflr»nt potential increases* at
particular receptors. tm
under Level in may under appropriate
^rm mt ' t nr tt be Unu**^! to a cecapiof
area smaller than the. trade's entire, area,
of impact so loot as it incradev
emissions from all sources whick
contribute to ambient concentrations in
that limited geographic area. Because of
the unique nature of each tituasiotk teai
appropriate limited geographic an*.
muat b« detBraaoad in accord with- EPA
guidelines on modeling and cue-by-
case evaluation. This "halted Ltwi IE.
approach may conserv* itpiiftrint.
resources, while allnw4ag i tana and
sources to focus on specific geographic
area* of concern.4*
F. Eaforctmuit foot*
«• tntimtto1 paraw _
thai bcciuM of rtplica«i
tppiicattoa of any •opre
specific aabtani 4u»«at«A«
ftnanc ruia luy t* matt tOOa -
•mpltmant than mltf incorporaBnt ouly-dt minnrii
«nd Uv«l 1 appmche* for SCX. T5P. CO or Pfc
Dunm and aflat iatua«ica »f ttn ig*X ta*«n» P»Acr
EPA tuff daft** a»d infernally oraktad. tl **
rrquMt al tiaia and local air afaacr director*.
modal fantne rul« which provided mart daua to
help iwtrnKd «*iw» acccpuMr «<**«•» thaw
oooorna. Th* A«Ncy piam ta •^dct* «4~
ncuruJau tbo*a modal nil« ai quickly u poMibte
a/tar pobbcauon of today's aouca. CFA aoeourafn
parnef withirj to dvrviop faarie rah* to oat (tia«a
rvt« modtl* «nd •*o& elo»«(y w<* rtl«vtm
R*jwnil naff. »e tiwt pottortal preofcm m«y be
idtnnfi»d *nd
Several*
Renters noted that while
sources should, u provided te the 1962
policy, be allowed to use bubbles to
come into /*r>frptyflir* bubble
applications might also be used to delay
compliance or enforcement without .
compensating environmental benefits.
Some of these commenters alluded to
language in the 1962 notice which, while
not authorizing or intended to authorize
such results, could have been
interpreted to allow them. Such
unacceptable delay might for example,
arise where a source fadng an •n'T'iinnH
compliance deadline suddenly advances
a bubble application and asserts thai
more time is needed to develop and
evaluate that application before
compliance with original SIP h"ift«
should be required.
Both bubbles end generic rules can be
Important means of allowing
environmentally-sound compliance.
Generic rules may be- more expedHloue
than case-by-case SIP revision bubbles.
They may also preserve the very
opportunity to babbie when the time
needed to process a cas«-by-casa> SB*
revision might extend beyotuf the
source's engine! SIP compliance datex
At the s*m* tin*, bobble ap
shovid not become e sUeid again**-
enforcement actions for sources which-
have failed to take necessary swpe to
meet required control obfigatfoes- OB
tim* Bubble* ar* simply ahamatir*-
meanrof complying at less eoet They
should be treated neither more nor I***
stringently than other, more tredfboR*)
method* of conpHanc*. Dabbfci offer
innovative ways to owe* entiasion-
reduction obligations. They should n*t
become devices to avoid such
obligations.
Today's notice subatantiafiy clarifies
and tightens the 1982 policy to better
implement these principle*. Among
other steps, compliance extensions wiff
no longer be granted under generic rota
in any nonattainmeat ares, and nay be.
•' Today't oottca tlao raqutni bubbai
oartata orumary aotunaoavnt ima BM
granted generic afly ia atiainmanl arws
only when EPA ha* approved tha urr.e-
extetuia* portioa of ih* rule a*
consistent with relevant Oean Air net
attainment and maintenance of ambient
standards, a. 47 PR at iSTVeol. 2. This
will generally mean that requests for
time extensions as part of bubble
applications must aa separately
reviewed as individual SIP revisions.
subject to criteria EPA normally applies
to such requests.
Today's notice also re-emphasizes
that as a matter of law and sound
policy, sources seeking bubbles remain
subject to enforcement of existing (pre-
trade) SIP limits until the bubble is
finally approved. Sources which poises*
approved bubbles with future effective
dates remain subject to similar
enforcement of pra-trade limits until
either those limits or the new ones are
met and may wfsh to take steps
identified hi the notice, including
accelerated compliance with bubble
limiiiL. to tninimisfl that possibility. Sc&
Technical Issues Document, secacn
a» quaflty bvotftt" whieta ahaU OOBJMI al
of a ]0K raducooa in tauaiona rcBaaiol
ape&aooa of the low«r-of-»CT»aK;g alkj-abU at
RACT-tllowabla nmaaioni biailiaaa la all innria
involvtd in taa bobbia. SML t-a- Sceaoe IL & above.
Thit rv^inrtaaat doa* aoiauaitanr
difftraal !h«Aor m addiHoa) la A* BM
aporeachn Hianiiaad abova. b i* ntrrtj
to aoaun that whan tppcopnau lavmli of mnrtaitoi
iadlcitt thai pmenbad baaalina valoai an net
lufflcftni 10 product aabirat aquivakaa*.
•ddibooal reductiont which aiaun §uci
tquivalcnca. pnor to tht 31* a*( diacouet ia
b«*«(ini rmiuraru. will b« requirad
Under today's notice, EPA will not
specifically select such sources for
enforcement action. Nor wul EPA
withhold ordefar enforcement simply
because- a aumce ia seeking titemanre
emission limits through a bubble. In
exaruaiog its inherent enforcement
discretion, EPA will apply tha same
cons.tdeza.Doas to noncompliant sources
whiah sack to comply through bubbles.
aa to those' which do not4*
Esaisefooe-Tndhig Policy Statement
Tahiti of Contents: Policy Statement
L tetroductio*: Baau: Kla»»anu of Emu IKXII
A. 'What U Eaisaion* TracLcg7
B.ThtBv»bbla
0. ICminion OtfMt*
E. limiMion KHoctrau Banking.
F. Oatric Tndint Rulei
C. Meet of This Policy Statement
(L Requirements for Cr»atmg. Using, or
Ikakaf Fmlmnn fUductMQ Creojli
>L Craatini F"" ***"" Reduction C.-eii u
1. Surplus
y. Eaforetabl*
4. Qmntrftable
MStal*f tod tourca* tbould. however tw a~«rc
that undar currnt E?A fwdtnct. lort m»c.t!:on n
moat Ukaly to b« oaimtd wtwm
th« ttatt kavtiaad EPA tttS ttavt conciuam '-i»i u
apya«nap7rwahl«uad^c
-------
43830
Federal Register / Vol 81. No. 233 / Thursday. December 4. 1988 / Notices
B. Using Emission Reduction Credits
t. EffliMioiu Trades Must Involve the
Same Criteria Pollutant
i All Uses of ERCs Most Satisfy
Applicable Ambient Tesu
3. Bubbles Must Not Increase Hazardous
Pollutants
4. ERCs From Existini Sources Cannot
Be Used to Meet Technology-Baied
Requirement* Applicable to New
Sources
5. States May Approve Bubbles in
Primary Nonattainment Areas Which
Require But Lack Approved
Demonstrations of Attainment
6. Sources Need Not Be Subject to
Binding Compliance Schedules Based on
Current SIP Requirements
7. States May Extend Certain
Compliance Schedules
ft. States May Approve Bubbles Involving
Open Oust Sources of Paniculate
Emissions
9. Trades Involving Lead
10. Trades Involving ERCi Prom Mobile
Source Measures
11. Interstate Trades
12. Bubbles Must Not Impede
Enforcement
C. panfeim Emission Reduction Credits
IU. State Generic Trsding Rules
IV. Bubbles Which Require Case-by-Case SIP
Revisions
V. Conclusion
EMISSIONS TRADING POLICY
STATEMENT
L Introducnoae Bask Elements of
Emissions Trading
This statement details EPA policy on
emissions trading. It seta out conditions
EPA considers necessary for emissions
trades to satisfy the Clean Air Act It
also clarifies and otherwise makes final
the Interim Policy proposed on April 7.
1982 (47 FR15076). it is accompanied by
a Technical Issues Document which
elaborates and provides greater detail
on principles set forth below. Finally, it
addresses new issues, and incorporates
certain additional safeguards as a result
of past trading experience, to better
assure the environmental integrity of
future trades.
A. What is Emission* Trading?
Emissions trading consists of bubbles.
netting, emission offsets, and emission
reduction banking. These steps involve
creation of surplus emission reductions
at certain stacks, vents or similar
sources of emissions and use of these
emission reductions to meet or redefine
pollution control requirements
applicable to other emission sources.
Such emissions trades can provide more
flexibility to meet environmental
requirements, and may therefore be
used to reduce control costs and
encourage faster compliance. Moreover.
by developing "generic" trading rules
(see Section 12 below) states1 may b4
able to expedite bubble approvals by
eliminating the need for case-by-case
SIP revisions* end by providing more
predictable approval criteria.
A The Babbit
EPA's bubble lete cutting planti (or
groups of planti) increase emission* at
one or more emission sources in
exchange for compensating extra
decreases in emissions at other emission
sources. Approved bubbles give plant
managers the-ability to implement less
costly ways of meeting air quality
requirements. To be approvable, each
bubble must produce results which are
equivalent to or better than the baseline
emission levels in terms of ambient
impact and anforceability. Thus,
bubbles should jeopardize neither
ambient standards nor applicable PSD
increments and visibility requirements.
Under EPA's bubble, emission
reductions from existing sources can not
be used to meet technology-based
requirements applicable to new or
modified stationary sources.
This Policy Statement replaces EPA's
original bubble policy (December II.
1979:44 FR 71779) and Interim Pm<««ian»
Trading Policy (47 JR15078). It tightens
general bubble prindplet as well as>
requirements for bubbles in primary
nonattainment areas which require but
lack demonstrations-of attainment and
requires bubbles in these areas to-
produce progress towards attainment.
beyond equivalence to stringent
emission limits. By specifying EPA's-
requirements for bubbles in all areas.
this Policy Statement should make the
development review and approval of
environmentally-sound bubbles more -•
rapid and predictable.
C Netting
Netting may exempt "modifications"
of existing major source* from certain
preconstruction permit requirements
under New Source Review (NSR), so
long as there is no net emission*
increase within the major source or any
such increase falls below significance
levels.' By "netting out" the
1 "SutM" IndudM «ny canty itu
•*• t«el
•athonty to tdBusitur ntaruu putt at t SUu
IntpUmmutioa PUn (SIP) and*r *• QM* Air Act
* "CM*-by«M SIP rrvuioo" ana* c*m b;-
C*M •pproY»J by EPA u • SIP twMoa. Thte t* th«
tndiboul OMchaniun by which bobbin «ad other
SIP chine*! hivt tw«n ipprawd by EPA.
> Set. t.«- « CTR Jl.lSUHlMx). SU4ft>KSt.
Si21(bH23(. See ii*o today'! Technical IWIM*
Document. n. 47 ud iceoapuylitf tot-
On November 7. iiea. EPA mmictuiid CTR Put
91 «nd rtnumb«rtd many of thit Ptrt'i Mcttoo*-(31
FR 406S4) BeciuM nxut raiden mfl b« men
finulur with pnor dmtnaUoo*. todiy'i noOce
ooniimi cjiinoni b*»ed oo (he opj»cfliOem ai P*n
modification U not considered "major"
and is therefore not subject to
associated preconstruction permit
requirements for major modifications
under 40 CFR 51.18.51^4. SZ2L 5Z24.
5i27. or S&28. The modification must
nevertheless meet applicable new
source performance standards (NSPS).
national emissions standards for
hazardous air pollutants (NESHAPs).
preconstruction applicability review
requirements under 40 CFR 5l.l8(aHh)
and (1). and SIP requirements.
Netting's scope is determined by the
definition of "source" for review of
major modifications. In general PSD
areas use a single, plantwide definition,
allowing actual emission reductions
anywhere in a contiguous plant to
compensate for potential emission
increases at individual emitting units
within the plant Nonattainment areas
can choose either this single, plantwide
definition or a dual definition, so long as
the definition selected does not Interfere
with attainment and maintenance of
NAAQS and is consistent with progress
towards attainment Under the
plantwide definition, significant net
actual increases at the plant as a whole
will trigger new source review. Under
the dual definition, significant increases
at either the plant as a whole or
individual emitting units will trigger new
source review.
In addition to these federal definitions
for major new sources and
modifications, state preconstruction
permits for major or minor new sources
and modifications may be required
under 40 CFR 5V18{a), and some states
preclude netting.
D. Emission Offsets
In nonattainment anas, major new
stationary source* and major
modifications an subject to a
presconatruction permit requirement
that they secure- sufficient surplus
emission reductions to more than
"offset" their emissions. This
requirement is designed to allow
industrial growth in nonattainment
areas without interfering with
attainment and maintenance of ambient
air quality standards. It is currently
implemented through SIP regulations
adopted by states to meet the
requirements of 40 CFR 51.18(j).
In attainment areas, some new
sources and modifications might not
otherwise be able to be constructed
because their emissions would result in
51 ii II ixiittd bvfan thJi mtraciunnt. Initniitd
p«rti«* any UM Appendix F of lodiy'i T*car.ic*l
IMUM Documtot to conttrt uxUy'i Pin SI cuuoni
to (he corrvtpondjnf n*w otwt.
-------
federal Regbtar / Vol. 51. No. 233 / Thursday. December 4. 19W / Notfcw
432:
an uiiiifceaiii of*eapaticaJbl* PSD
incresMSU or aasbieo* air qaality
standard, would sipufceoiry contribute
to a vioiaooa of an assaacstt air quality
standard in a designated primary
nonattauunent area; or would
significantly contribute to visibility
impairment in a Federal Class 1 ana.
These sources may use emissions offsets
to allow desired growth while protecting
that increment, standard, or visibility.
C Eat/afoH Reduction Banking
Firms may store qualified emission
reduction credits (ERCs) in EPA-
approvable banks for later use in
bubble, offset or setting transaction*.
Depending on the bank's rules, banked
ERCs may also be sold or transferred to
other firms which seek to meet certain
regulatory requirements by use of
emiaaioni trades.
EPA's revised Offset Ruling (40 CFR
Part 91. Appendix S] allows states to
establish banking rules es part of their
SIP*. This Policy Statement and
accompanying Technical Issues
Document detail the necessary
components of a complete state banking
rule approvable wider the dean Air
Act WWe many areas also allow
baakiag of enresien redaction* far
variovs pjerpoeea through various formal
or informal baaking mechanisms, banks-
which do not meat today's criteria (e.g~
by not meJdng'banked emission
reductions enforceable by the state by
the tee the redactions era actually
banked er by oo» asearing that deposit*
are akao exaddtry into accoaai for SIP
ptanning' parpoeesf cannot* veeft^p
ft'«Tiftr reductions as ERCs. and may
offer substantially less protection in fee
eveert «f future SIP corrections or
change* la saobiactt attsraeaent i
adopt rutea- which incorporate »B or any
combination of the ebon toedng
approaches.4
This Poifcy Statement is accompanied
by a Technical Issues Document for use
by states and industry fai further
understanding emissions trading. The
Document offers elaboration and
important detail on requirements and
available options under the Clean Air
Act
This notice reflects the current dean
Air Act and existing EPA regulations. A
policy statement cannot legally alter
such requirements. However, this notice
establishes EPA policy in areas not
governed by applicable regulations and
sets out general principles which may
help states and industry apply those
regulations hi Individual cases. Federal
or state rulemaking hi response to. e.g_
future litigation or changes in ambient
standards, attainment status, or SIP
validity, may affect states or firms met
plan to engage or have engaged in
emissions trading activities.
Nothing in today's notice alters EPA
new source review requirements or
exempts-owners or operators of.
stationary source* froaj compliance wttfa
applicable Dreooostruettoa permit
regulation* to accord with 49 CFR SI.1&
51-2** 51 JO?. 5121. ST21 SOT, aod
52J8. bferevted parter showkl
howwer. be aware that bubble tndee
are not subject to pnconstnietrea
review or regulations when these trades
do not involve omsUuctluu.
F. Generic Trading Rule*
Generic rales adopted as part of the
SIP can authorize states to approve
certain types of individual tranascticas
without the need for ca»e-by-c**a SIP
revisions or associated federal review
prior to approval. Toe first state generic
bubble rule was approved by EPA April
8. Ittl (46 FR 20551). Par the current
scope of permissible raise, see Section
10 below.
C. Effect of Thit Policy Statement
Emissions trading is largely voluntary:
no source is required to trade, and no.
itate Is required by EPA to approve a
particular trade or to adopt a generic
rule. Trading merely offers states and
>tstionary source* alternative ways to
mee< regulatory requirement]. For
example, states are free to adopt generic
rules or continue to impiemeni trade* ««
individual SIP revision*. They may
source.
EPA teteode to appfj
chi
not
by today's policy prorpecttvery
to actions which have adreedy been
approved n ca*e-oy-ee*e SIP remioaa
or anoW generic rah*]. IE aowever.
aaioient vtatetiooe are discovered in an
area where EPA has approved a trade.
or if other violations of Oera Air Act
requirements ere dlaemieieJ in mat
•res, soerce* involved la me trade.
should be aware that they are
potentially robject ro requirement* for
additional emission reduction*, |u*t •*
are all other sources in the area.
This policy require! th*t tobstantial
additional reductions (st leitt 20%} is
emissions rernausirg beyood applica
baseliacf be ptodiiced by fature bub
in primary nonstfiinmeaf arets wh
require but lade approved
dcmonstretioos of attainment. Howe
applications for bubbles in such areas
which are still pending at EPA without
formal action under the 1M2 policy, or
which were previously subtitted to £F.-
Regions under the 1982 policy but not
accepted for evaluation, will be
reexamined and processed for approval
if they meat the requirements of the 19&
policy and contribute to progress
towards attainment "Progress towards
attainment" means some extra reduction
beyond equivalence to a lowejt-of-
actual-SIP-allowable-or-RACT-
aUowable emission* baseline, with this
baseline applied as of the time
applicants originally sought credit
Pending bubble* in attainment arets
and nooattaiaaMBt areas with approved
demonstrations of attainment will be
processed for approval if they meet the
reqiiiremeata of ta* 1983 poiicy and
show that ambient staadarda. PSD
iacremesrta aod visibility will not b*
jeopardise*!.
For further dtscunioB on pendtrrg .
bubbles see Sectxm lA.l.b.(4) of the
Technical Iseae* Doctiment. *•
0. RequimfttBis for Cnetutf. Ustag. or
Hinting.ITsKieaieB Fsslnrtinn rrmlili'
A. Creating Emistion Reduction Credi
Emisaioa radacnon credits (ERCs| are
the common currency of ill trading
activity. ERCs may b* cr»*ted by
redactione from either stationary, area.
or mobile sources. To enure that
emission trades do not contravene
relevant nqiiirrsMiirs of the Cl&an Air
Act. only nditctioa* which are surplus.
»< «. Atfm&x. SV
kit SS? wfcfe*
rvqiun rdinfijr S»« Qua Air Ac)
173(1 MAI *nd(B|
ttua rvtKUd far fsOun (a RM«I tit i«rm< of ;.W
1SS3 patky. Bobik ipptfeiUau which w«n
•oaf4*d far «r«iu»t»« bat ra)«ctrd for hdurt '.a
aim Ite 18BJ pottey wffl b* miitd 11 ntw
mdv todi/i no«a.
•B*caaM (bli Poncy auununl ard
•ceoapcarns T*dim«l IMUH Documtni n ~,t'.:
/Ur Aetpruieipl**.*"! pr.nc.;l«
do« n«t r M««C»i lUOf tpprtwdta oU«r ih»n thaw
dwcrrtw* SM.< . •
rtii» aptton imdw cnrrwi l»*. tfld noibu^ .n •,k.u
Pwficj S»«U«i*»l or IW T»ehi»c*J t»«u»» Ooojmf r
Mitrtett (tit ir opportunity to m«kt «uen jnov.ir.ss
-------
43832 F«d«rii Repartee /-VoLSl.-Na 233. / Thunday. December 4. 1966 / Notices
1. Sufplus. At mmtniHnv only emission
reductions-not required by current
regulations in the SIP. not already relied
on for SIP planning purposes, and not
used by the source to meet any other
regulatory requirement can be
considered surplus. To determine the
quantity of emission reductions that are
surplus, the state must first establish an
appropriate emissions baseline from
which surplus reductions can be
calculated. Baseline emissions for any
source are the product of three factors-
emission rate, capacity utilization, and
hours of operation.7
In attainment anas, the lower of
actual or allowable values must
generally be used for each of these
baseline factors. However, allowable
values for on* or more of these factors.
when higher than actual values, may be
used in calculating the baseline
emissions, provided those values are
shown to be used or reflected in an
approved demonstration.' The burden of
meeting this test by written evidence
rests with the state or applicant which
seeks to use an allowable value.
When allowable values for one or
more baseline factors are not used or
reflected in an approved demonstration,
such values may still be used in
calculating baseline emissions.
However, in such cases applicants must
perform appropriate modeling to
demonstrate that allowable value*
which are higher than actual values will
not delay or jeopardize attainment and
maintenance of ambient standards.*
' For further difcutnon of theee fecton *• they
relate to bateline calculation*, tee Appendix 8 of
the Technical lituet Document.
•Thit tiatement do« not apply to noting, whan
"conlemporaneoua" actual enuattone an alway* the
batedioe. See. M_ 40 CFK 51 J*(bX3).
Bubble* in areat with demoaatranoA* beted eaiy
on qualitative (udgmenii («-i_ the "example niton"
approach or no technical tupportl ordinarily nuy
not rely, without appropriate modeling, on
allowable values tn calculi tint, bateline etmutona.
However, bubble* in areai with demonttrationa
bated on rollback or dupenion modeling nay OM
allowable valuta thai are reflected tn the
demonttratiop. In certain orcuneuacei aa
allowable baseline, value ipeofied in a
preconitrurtion permit may be dMatttd equivalent
'a one uacd jt .--fleeted in aa approved
demoniiranoa See Technical luaee Document, a. 7.
For funher definition of "actul* Mid "allowable"
we today a Technical liaun Oacumeat Section
I.A.ta. and Appendix 8.
• Thu demoruirafion would require a, U**l U
modelinf analyiu. in accord with the aodeUae,
vjeen diteunea below. mine, actual emitiion* (or
the pre-bubbie caae. unlets. for bubbles proc**tfd
03 cott-tjy-cott SIP revmoiu. the Region
deiermmei that additional technical support it
needed U> protect applicable «iand*rde or
momenta. For diacuaaron o( Level U modeling, tee
Technical Ittuet document tecuon KB.l.b.13). For
lunher ditcutaion ol additional technical tupport
which Begum may require in thne circumstance*.
>n Technical laauet Document. Section LA.l J. Per
a ditcuuton of parallel modeling requirement* for
in attainment anat W/MSB the PSD
baseline has been triggered credit may
be granted consistent with the PSD
baseline concentration at specified hi 40
CFR Sl-24(bKl3, and Si21(b)(13). This
will generally require use of actual
values for each of the baseline factors.
However, states may use allowable
values if they show through appropriate
modeling *° that attainment and
maintenance of neither the ambient
standards nor applicable PSD
increments will be Jeopardized, and
quantify the amount of increment
consumed.
In nonattainment anas with approved
demonstrations of attainment, the
baseline must be consistent with
assumptions used to develop the area's
demonstration. This generally means
that actual values must be used for each
baseline factor where actual values
were used for such demonstrations, and
that higher allowable values for these
factors may be used where allowable
values were used for such
demonstrations." The burden of
showing that an allowable value was
used or reflected in the approved
demonstration rests with the state or
applicant which seeks to use an
allowable value. In the absence of
written evidence to that effect full Level
HI modeling would be required to make
use of an allowable value in baseline
calculations.11
hi primary aonattainaient anas
which need but lack approved •
demonstration! of attainment, stater
must show that bubbles meet special
"progress" requirements designed to •
produce a net air quality benefit This-
must be demonstrated by (1) using the
lowest-of-actual-SIP-eUJowable-or-
RACT-allowable emissions baseline for
each source Involved in the trade; " (2)
meeting the ambient equivalence testa
outlined in sections ILB-2 of this Policy
and LEl.b. of the Technical Issues
Document and then (3) producing «
substantial net reduction in actual
emissions (I.e.. a reduction of at least
u*e of tuch higher allowable values in irtaiaaent
area* under tenenc ru/e*. tee Technical Ueue*
Document aJl.
•• See aJ above.
1 ' For nem«g, -oontcmponneoa*" tctuei
eenteinrn are aiwtyi the beteltae. See. e.»_ eOCFR
11 Fo» further dt*ousk» of UreJ Of nodetia*, tee
TechMcd laaae* OocuaeaA tecnoa Lfl.i.bf*V
11 For purpoee* of today • nooca. Ifae Towew-ef-
actuaJ-SIP-4lk>wtble-or-RACT-«Uow»bk-
emittiona betehne mean* tfae product of (1) the
(ow»*t of the ectuel ennuwa r»ta. tfae Sff or other
federally en/orotable eauauoa omL or a RACT
emiulon limit, tad (2) the lower of acruaJ or
allowrWe capacity uolliaoon and howi of
operaDoa. For further dltcutimg of thi* betellne,
tee Appendix B ol today't TechniceJ latue*
Document
»»in lhe>eoisstons remaininf; aft«r
application ol the baseline specified
aboveVThe state ouet also piovide
assurancas that the bubble a coturitent
with ambient progress1 and future air
quality planning goals.14
2. Enforceable. To assure-that Clean
Air Act requirements are met each
transaction which revises any emission
limit upward must be approved by the
state and be federally enforceable.
Mean* of making emission limits
federally enforceable include SIP
revisions (see section IV below). EPA.-
approved generic bubble rules (see
Section III below), and new source
preconstructfon permits issued by states
under EPA-approved SIP regulations
pursuant to provisions of 40 CFK 51.18.
51.24. or 31.307. as well as construction
permits issued by EPA or delegated
states under SZ21." Bubbles should be
incorporated In an enforceable
compliance instrument which requires
recordkeeping based on the averaging
period over which the bubble is
operating, so it may easily be
determined over any single averaging
period that bubble limits are being met.
3. Permanent Only permanent
reductions in emissions can qualify for
credit Permanence may generally be
assured by requiring federally
enforceable changes in source permit*
or applicable state regulations to reflect
a reduced level of allowable emissions
•i Quantifiable. Emission reductions
must be quantifiable both in terms of
estimating the amount of the reduction
and cheneteming that reduction for
future use. Quantification may be based
on emission factors, stack testa.
monitored values, operating rates and
averaging times, process or production
inputs, modeling, or other reasonable
measurement practices. The same
method of calculating emissions should
generally be used
-------
Federal Register / VoL 51. No. 233 / Thursday. December 4. t9M / Notices
4383:
that all use* ofERCs are consistent with
ambient attainment and maintenance
considerations undtr tha dean Air Act
They an further articulated in the
accompanying Technical laaues
Document
1. Emissions trades must involve th»
tarn* criteria pollutant. An emiaaion
reduction may only be traded againat an
increaae in the acme criteria pollutant
For example, only reduction* of SOi can
be subatituted for increaaea of SOi.
2. All uses ofERCs mat satisfy
applicable ambient tests. The Qean Air
Act require* that all areaa throughout
the country attain and maintain national
ambient air quality standard* and meet
applicable ambient requirement*
relating to PSD increment* and daaa I
protection, indufUrit visibility. The
ambient effect of a trade depend* on the
dispersion characterise* of the
pollutant involved. With the exception
of visibility for NO* dispersion
considerations will generally not affect
trade* involving VOC or NO* who*e
impacts occur acroas broad geographic
areas. For these pollutants "pound for
pound" trade* may be treated as equal
in ambient effect where ail aourcea
involved in the trade are located in the
same control strategy demonstration
area, or where the state otherwise
*hows such sources to be sufficiently
close that a "pound for pound" trade
can be justified. However, dispersion
characteristics an important for bubble
and offset trades of SOi, particulates,
CO. or lead, whose ambient impact may
vary with where the emission Increases
and decreases occur. To a**un ambient
equivalence, luch trade* of these
pollutant* must satisfy ambient test*
under the modeling screen discussed in
the Technical Issues Document or under
a similar, equally effective approach."
3. Bubbles must net increase
hazardous pollutants, bubbles may not
be used to meet applicable requirements
of National Emissions Standards for
Hazardous Air Pollutants (NESHAPs)
promulgated under section 112 of tha
Clean Air Act to increase emiuions at
any source beyond the levels applicable
NESHAPs prescribe, or to create any net
increase in beteHne
'• tot similar reaaoaa. bubble* of thnt polhiunu
mu*t involve tourc** which trria the urn* or
adjacent control etrategy detBonanuoai area*
within the urn* ftturaJ tit boaia.
Sn Mcoon O.A.1. above ud Technical \tntn
Document Section LA.L* ngu&Bi addiOooaj
technical tupport required tor onus trade* in
attainment an**.
WhiJt bubble* in primary aoearauimeni an**
which need but lack approved d*eson*treoon* of
aitainaenf ouut product a net ta quality benefit
Uui doe* oot entail additional ambtcat tnt*. Such
bubble* autt (ir»t mt«t the general (•*(• under tht
nodeliai *cmn ahowiof ambient equivalence for
bubble*, prior to producm* tha reqwred addtttoiui
reduction*. They mutt then product additional
reduction* of ai Intt 2m beyond tht applicabU
ban-tin* emiuion* u*ed to d*monitn(t ambitat
equivalence. Since thete additional reduction* wrtl
neceitanly reduce ambientomafltreaoni below
equiveleace arf torn* receptors, wlule coounumf te
meet the teen for ambient equivalence at all other*,
a net ai/ quality benefit ahould occur *o4 no •
addltionaJ ambient ahowiag*, beyond Itaote
genenlly required for ill bubblti. are required.
pollutant regulated under section 112.
The applicable baseline for regulated
sources is the lower of actual or
NESHAPt-aJlowable emissions of the
hazardous pollutant
Where a NESHAP has \x*n proposed
but not yet promulgated for a source
category which emits a pollutant listed
under section 112. the proposal will
serve as SB interim guideline for
evaluating the effects of any proposed
emissions trade involving a source that
would be subject to the proposed
standard. In general such trades will be
apprevable with respect to the
emissions component of the trade
subject to tha proposal, so long as they
result in emission limits at each source
emitting the relevant pollutant which are
equivalent to or lower dun those the
proposed NESHAP would have required
if already promulgated."
Where a pollutant has been listed
under section t!2 or where EPA has
published a Notice-of-mtant-to-List but
no regulations for the source category.
involved in the trade have yet been
proposed or promulgated the trade win-
generally be acceptable with respect to
the emissions component of the trade
subject to notice or listing, if there is no
net Increase in actual emissions of that
pollutant a* a result of the trade.1*
Any trade involving sources or scarce
categories subject to the preceding
subparagraphs must take place within a
single plant or contiguous plants, and
must credit only reductions below
current actual or NESHAPs— allowable
emissions, whichever is lower. But cL
generally n. 8 above and today's
Technical Issues Document section
LBld
Trades which do not meet the special
restrictions discussed in this section.
may also be approved where surplus
reductions in the pollutants addressed
" The allowable emiMioo ntt for a eowct
rabiect to * propoeed NESHAP hi the UmM
•tipuUttd ta tht prapoaai
" Where EPA b*e !**ued t -Nodo»-9MiUtal4i*j«.
to-Rrfutata" one or more tourct etlefont* for a
lilted pollManl emiaaioaa a/ thai poUount (root th*
umfotaltd toura cattfory will iHiinheaiet tot
tnu»d the M*M ** eamaiont of toy oehtr Uatte)
pollutant Undtr limited areomanneat. aioutar
treatment will be fiven to pollutant* for-which a
-Nouce-of-lnterx-Noi-lo-lut" ha* been pubttaJted
S*e the Technical l**ue* Document *ecooe
above compensate for increases tn r.cr
hazardous emissions of the same cnte
poUutut (e,f, benzene, a hazardous
VOC is reduced to create credits for a
ilncrease in non-hazardous VOC
emissions.) As long as such a trade
would not result in an increase in either
actual or allowable emissions of a
pollutant subject to the preceding
iwragrsph* at any source, it would not
differ in nature or requirements from a
trade involving only unhazardous VOC
emissions.
4. ERCs from existing sources cannot
be used to meet technology-based
requirements applicable to new sources.
Under dean Air Act section 111 and
IPA implementing regulations, new
effected facilities must satisfy
technology-based New Source
Performance Standards (NSPS).
regardless of the attainment status of
the area in which they are located.
Under sections 115 and 173 and EPA
implementing regulations, new or
modified major stationary sources must
also satisfy technology-based control
obligations associated with pre-
construction permits. These
requirements prohibit use of credits
from existing sources to meet or avoid
applicable NSPS. and bar use of such
credits to mswt applicable new source
nnriarw requirement* for best available
control technology (BACT) in PSD area.
or lowest achievable emission rate
control technology (LAER) in
nonattainmrat areas."
5. States may approve bubbles in
primary nonattainment anas which
rvemr* but lack approved
demonstrations of attainment, provided
such trades meet requirements designed
to produce • net sir quality benefit and
the state provides certain assurances.
S«e section ILA.1. above and the
Technical Issues Document, section
LA-l.b. Bubbles which me«t these
objective requirements will be
processed for approval by EPA.
A Sources need not be subject to
binding compliance schedules based on
current SIP requirements before they
can apply for a bubble which would
supersede those requirements. Sources
that an already subject to binding
dbmpiiance schedules should be aware.
however, that such schedules remain
fully enforceable until a bubble affecting
the schedule has been approved by EPA
or under a state generic rule and the
'• Bm d. Mrrt"" LC and LO. afcove.
Today'* Bottct do** not adetrru whether or under
wtat arcaiutaflCM f*xallH«* Mbtect to NSPS
BACT or LAD» may *urpe»« epplieabl* permit
limit* reflaenns»»** rr»uir««enu 'a order 10 c.-eiie
credit* far ixi»cn*-«ourea trade*.
-------
43104
FatUrd Ra^tar / Vot «. No» O3 / Tte»d«y. Packer 4. MB» 7
SOUCOM aWib Met to
in adnuu*4ntiv* orders-or iwdkial
decree* must obtaia prior aaatovai from
EPA or the relevant coart a*
appropriate, to be relieved from the
schedule contained in the order or
decree. Sources that are subject to SIP
requirements remain responsible for
meeting those requirements unless and
until a bubble has become effective
under Federal law. See section ILB.12
below.
7. State* may extend certain
compliance scheduiee. State* may no
longer grant compliance extensions
under new or revised generic rules in
nonattainment anat, whether or not
such areas have demonstrations.1*
However, states may continue to grant
compliance date extensions under
generic rules in attainment anat,
provided EPA has approved the
extension provisions of the generic rule
as being adequate to comply with the
Clean Air Act including requirements
for attainment and maintenance of
ambient air quality standards.
States that wish to give soarce* ia
nonattoiABcnt area*, and sources ia
attainment areas far which than i* no
applicable generic SIP provnioa. moea
time to itnpietaeflt bubble* by granting
compliance extension*, ant receive
EPA approval of tbe extensions through
case-by-ca*e SIP revisions. Reqaeat* for
such compliance date exteosioa*.
whether in attainment or nonattauunaat
areas, may b« submitted ta EPA together
with bubble*, as part of a single SIP
revision package. EPA will separately
evaluate the time extension portico of
these SIP revision packages in accord
with the Agency's normal criteria for
review of time extensions, including
consistency with the Act's requirements
for expeditiousness, reasonable further
progress, and attairuneat and
maintenance. Source* should be aware
that disapproval of *«cb time extension
requests may result ia disapproval of the
entire package (i.e.. both peat-trade
limits and the time extension) or only
part of it, depending OB whether the.
10 Exittinf gcnenc ruJ«« apfttabit to th««« IIMJ
mint b« raviwd to coropon «ufc tiu* yn^pte
whcra they contain lucl) gcnvnc cxiouioa
provinont. EPA vrtll publiin Fedtnl Re^in«T
for»«l i
idtniilM la tuci t none* w
IIRW p«nod nuy mult m EPA monduif ipprov*]
of (he •uitin^ gvncne ml* or IMUIH* « noun» «f SiP
dcfiancy. EPA npacti •Mia <• fa
cleaner fuels each as medMool] may
satisfy these criteria snore readtty thai
those from other transport-related
measures. Hcwerer, dae to poeciW*
difficulties in determining whether
specific mobile-souKa reductions fatty
meet these criteria. aH sach &ade* awst
be implemented a* ease by-case SS>
revisions.
11. Internal* trode*. Trade* tavohrng
sources located m neighboring state*
•ay be approved, provided they meet
all other requirements of today's notice.
However, in order to avoid complex SEP
aocouBQog isitte*. where »tat« trading
requirements differ EPA wffl reaajre that
such trades meet the rabcuntive
requirements of the more stringent state.
In general EPA will deem ERCs created
in one state to contribute to yiugies* In
the ststa where used to the extent of
that UM. provided that applicable
aabtent tests (section O-B-2 abcv*) are
met. Interstate trades must be
implemented through cass-by-case SB*
revision*.
12. Bubbles mutt not impede
enforcement. In general bubbles are a
form of SIP revision which *hauid be
treated neither men aor less Hihigsmlj
than other SIP re^iMun*. Bubbles shtmtd
not become a shield against
enforcement actions far MOKM which
hart fatied to take aecaoary rtep« t»
=js or.
Soufea*) ssjsKng bides sbond icte
of existmf (pn-tndt) SIP tobti until tne
bubble it approved. EPA will OM ae
aimt priadpiM aod precadom I yt
deciding whether to initiate eaferceax-c.1
acttona ia tfats* camawtancn M 'be
Agency applies) to any other source
which it subject to a proposed or final
SIP revision.
Under established EPA policy.
regulated sources mast be subject to an
applicable, enforceable emission timit at
ail tine*. Accordingly, sources which
have approved bubbles with emission
limits affective at a future data, and
which are not in compliance with their
pre-trade limits prior to that effective
data, may be •abject to enforcement
action, which could include penalties
based oa a failure to Beet the pre-trade
limits. Source* ia these situations may
wish to minhniie the chance that capital
expenditure* may be required to meet
pre-trade limits, either by (a) agreeing to
post-trade ceaipaaaca dates which are
•absUnUaily siaular to (heir pre-trtde
compliaaca data*, or (b) accelenuing
their coaipUaaca wim post-trade-linuts.
Ia saoatd with the general principle
that bubble* ahoukl b* treated neither
more nor lea* striageatly than other SIP
actions, impieiaeaUttoa of this Policy
StataaMot will be neutral with respect to
EPA anforcameot of pie-trade emission
limits. This mnsm that EPA will not
specifically select for enforcement
acnaa aoonotapliaat sources seeking to
us* a bubble either to com* into
compliance or ta restructure traditional
comaiianoa. However, it also memo* that
EPA will not withhold or defer
aafarcesnafU suapiy because a source is
seeking alternative eausnon linnts
through s bubble. In exercising it*
enfoocemeat discretion. EPA will apply
the same coasideratMoj to
nnnnampliiiil saurces which seek to
comply through bubbles as to those
which do not.
C Baakiag Emtofon Reduction Credits
Oaly sssissinn reductioaa that arc
surpfas, permanent, quantifiable, and
enforceable can qualify as ERCs and be
deposited in EPA-approvable banks.11
Such baaios ofiar souroes iaoal
lecognWun that qualifying reductions
meet these ERG requirement*. However.
Ar «6» neit In ore«T
i UI«KJ|II>U^ IB tmuiumi mcr
«luwh«tm. txnt»< inJuuJuut ncd not !x m
-------
R*tiotor / VoL si. No. 238 / Thursday. December 4. !«• / Notice*
the fact «h«*aaERC baa bean backed
de«*aol rafter it from Ih* need to
til cnttria of th* specific refuLalory
program under which ft it to b« ua*d.M
BecauM Mm* trad** have special
limitation* (*.g. only redactions.
occurring at the same major stationary
source can be used for netting), banks
do not guarantee the validity or specific
amount of particular banked ERCs for
all potential uses or for all time. To
provide manmun protection for the
environment and sources and to avoid
potential legal problems, state banking
rake may specify the types of sources
eligible to bank ERCs and any
additional conditions placed on
certifying, holding or using banked
ERCs.
State banking rales may establish
ownership rights. However, any such
rights must be consistent with dean Air
Act lequiieHients, mending the
requirement that SIPs provide for
expenditfou attainment and
maintenance of ambient air quality
standards and protect PSD increments
and visibility. To be approvabte by EPA,
such banking rules must also treat
banked reductions as current actual
emiseiana la the air" at the source of
their creation, in order to protect the
integrity of fatttre air quality planning.
Failure a track the ambient effects of
such banked redactions (s<£> by not
iQcruding them m a new or updated
inventory naed for SIP planning
purpoaas. or by relying on thoea
reductions to secure attainment
redes ignstionsj would ordinarily
preclude dxrirmaa as ERG*, doe to
double-courting. Nevertheless, states
have considerable latitude in meeting
these rei^nirflTTi^Bfa and may guarantee
banked ERCs afamst fofi or partial
reduction in qaantiry. to long M that
guarantee oow not undermine
attainment redesignations or Interfere
with progrm* aod attainment should
ambient standards change or additional
emisaion reductions be required. The
Technical lame* Document, section
LCfl, outlines ways socbtuaranteca
nuy be aiade effective caiiaataut with
these requirementa.
In many states, **»"^*"g eouM be aa
extension of oagoing-preconstSMUtuin •
permit actHMtiaa. Tba state-wit* • •
designee could accept and evaluate
requests to certify an ERC "*•'"'•'" a
puoliciy-avariable ERC regutry or
timilar instrument describing the
UMOf
quantity and type* of baokad cnana,
and track tramrftn aari wttaakroaa a*
ERCa. . . .
Becauae banked radacttoa* do not
increase emisaiotis at any soon*, they
need not be made federally enforceable
untU used. For administrative or other
reasons states may. however, ehosss to
make them federally enforceabk upon
deposit How the state make* a
reduction federally enforceable for
banking will depend oo the type of
source at which the reduction occurs. In
some states, reductions associated with
other modifications at a source caa be
included la federally-enforceable
preconstraction permits issued T***™*
rules approved pursuant to 40CFRSU8,
51.24 or SLOT. States with BPA-
approved generic rules can UM their
rules' procedures to make redactions"
occurring at existing sources federally
enforceable. See Section m bdow. Sue*
these transactions involve only
reductions, air quality """Hirg i*
generally not required to assure that
new emisaion limits do not iuiarfata
with attainment and ivr!**!*^"* • of
ambient standards, protectiaa of
applicable PSD increments, or
impairment of visibility m mandatory
federal class 1 areas. Such reduction
will automatically meet the gaooric •
rule's test of whether a parttariar limit to
withia EPA's preapprufed array at
acceptable amisaioo limits.**
States without EPA-approved fanatic
rules can adopt rake timrtad to banklaaj
transacaoaa, or ean as* the stajsdaid
SIP revision piocaas to i
federally enforceable i
sourcaa. Caaeral stale HIIIBMIMB linn
permit or review pragrama that banre
received EPA approval may also be
used for this purpose, since paemtts
issued through such programs are
federally enforeeabla. See «0 CPU n.Uc
S1J07.M
Mo4«tto« wtfl b« ninmiry wfcai« b«nfc*d
udl*rM*lattn(te,taihi
t«nllT rrnrri t» ttai
Mt«< u «M of otb* bcakad <
iH It *afat«ci la itrtntM o^«iiuo»« !•»••
wntMB «ppikaBoo VM MboutM
eaaoamal with ••• of « farmiJ 1
L0riert»tft*«**i
t mi UfOO* rOf 1
touffal t»bu>k avdiu (raai i
•aiB-itM«vaen*D
m.
UM of emisaion reduction credits
unto sari rigdatioa* approval b
EPA a* generic for idonUSed das
trades will not require individual
revisions for those trades. The Technics
Issues Document aznlaku acceptable
generic procedures which suiae may
adopt to reduce toa need lor ladivimaJ
SIP revuiona.
Emissions trade* can be approved
without case-by-caM SIP rsviuoai if
evaluated by the state under EPA-
approved procedures which aasure that
oo trade which meets their terms wiil
interfere with timely attainment and
maintenance of ambient standard!.
protection of applicable PSD increments.
or visibility provisions. State generic
rules an approvabie only if their
procedures are sufficiently replica ble in
operation to meet this test By approving
the generic rule, EPA approves in
advaaca aa array of SIP-compatible
emits ton limits, and no further case-by-
caaa Federal review or approval is
required for individual trades which
meat the terms of the rule.
In cedar t* assure that generic ruin
an properly imptaraaniad, EPA intend*
to (a) t'VMT"t" **"* csauBcnt
together with aay othac pabtk
mmmenter. th* atianaatxxi w^iicn mu«t
be provided tot iodrndaal trades
propoaad by statse usuler a geocru:
(b) Tft^"^ nviaws of iodividual
bubbles approved uodar a genenc:
and (c) periodically audit tin •aner
implamaotatkoa of gesMhc raka. aa
of ita Natfoaal Air Audit SyAtao
of state air araframa.1*
Any ttada under a (tnahc ruk wiil
involve emisai0n increasas at some
sourcaa and extra emiMxu dacreaies at
others. For tradaa to b« approvabie
under a generic raia. tha sum of thes«
increases and dacreaMS (beyond
•I u tevHcinon u>
d*oo«l th* CTKtJU in • fanul b4nt •••
10 tb* »«•«• poor to *• Brn* ft* ^VUC
mmlimil mx*»»d, or th*> th* >Mt*
itn naililin rnitlli in i h -- '- c"
. MttlitoMi d*M0o« bcakaa mdm»at cram
«rcv«itiiMmi in ~r>» or
tot PY !«•*. Offle* •( Ak Qx«iltr Rusvinjj »nc
SUMto*. »A-«eW«-OOTfN
-------
43838
Federal Register / Vol. 51. No. 233 / Thursday. December 4. 1986 / Notice*
spplicabie net baseline emiMions) must
bt ten or let*. Subject to tins
requirawat states may adopt generic
rules which exempt frost individual SIP
revisions: (1) Df minima trades where
total increases in emissions from ai>
increasing sources (which must be
balanced by equal or greater emissions
decreases from other sources) are less
than 25 tons per year (TPY) of
particulates. 40 TPY of SO*. 100 TPY of
CO. or 0.8 TPY of lead, after applicable
control requirements; (2) large classes of
trades involving VOC or NO,
emissions:*' (3) trades between certain
types of SOi sources, between certain
types of CO sources, between certain
types of stationary lead sources, or
between certain types of paniculate
sources, for which it can reasonably be
assumed that "pound for pound" trades
will produce ambient effects equivalent
to those which approved air quality
models would predict: and (4) other SOi.
CO. Pb or participate trades which do
not increase baseline emissions and for
which carefully defined modeling
predicts no significant increase in
ambient concentrations.
States and sources should, however,
be aware that because of replicabtlity
problems inherent in modeling, generic
rules which rely on preapproved
procedures for modeled demonstration*
of ambient equivalence may be difficult
to draft or implement and many trades
may not be approvable under such rules.
For these reasons generic rules covering
only the first three classes of trades
above will often prove easiest to aecura.
EPA encourages states to work closely
with EPA Regional Offices to formulate
and adopt approvable rules or develop
alternative approaches that equally
assure attainment and maintenance of
ambient standards and protection of
PSD increments and visibility. See
Section II of the Technical Issues
Document, which details criteria under
which such generic rules may be
approved.
To the extent general state procedures
for rulemakmg or permit changes do not
assure reasonable puUtonotice of
proposed and final limit*or effective
opportunity for comment on proposed
trades, states must incorporate such
provisions in their generic rules.
In primary nonattainment anas
which need but lack approved
demonstrations, new generic rules must
require, and existing generic rules must
as requested by EPA. be revised to
require bubbles to use lowest-otactoaJ- *
SIP-allowable-or-RACT-tllowabU
emissions baselines, and produce a net
air quality benefit (aa described below.).
New or revised generic rales in the**
nonattainment areas must be
accompanied by certain assurances of
consistency with air quality planning
goals aa weH at a commitment to make
certain additional assurances when the
state approves individual bubbles under
the rule. Bubbles approved under
existing generic bubble rules before the
effective date of this policy will not be
affected by these requirements. Because
EPA-epproved state regulations have
independent legal force, future bubbles
submitted under existing generic rules
may also be approved by states in
accord with those rules, until such rules
an modified to meet the criteria
below."
Existing generic rules in these areas
must be modified to assure that bubbles
produce an overall emission reduction at
least equal (in percentage terms) to the
overall emission reduction from
controllable sources (in percentage
terms) needed to attain in the area.
Criteria for modifying generic mlea are.
set forth in Section HO. of theTachmeai
Issues Document including a
requirement for a reduction equal to the
greater of either the percentage*
reduction required for attainment or »
20% reduction in emissions rensdntog^
after application of appropriate
baseline*. New and pending
applications for generic bubble ruke
which meet these criteria will be
processed for approval
EPA will publish Federal Register
notices identifying any generic rulee
applicable to these areas which require
formal modification in order to meet me
progress requirements above or other
requirements of EPA's current Emissions
Trading Policy. These notices wMl
identify specific defitiences and means
for correcting them, and will specify •>
schedule for submittal and review or
modified rules. Failure to resolve-
deficiencies identified in these notices
within the prescribed time penod may
result in EPA rescinding it> previous •
approval or issuing a notice of SIP
deficiency.1*
•* In the interim. EPA expecti >tat« to i
far a faaatbk. Out future bubbJea ic
" When visibility impairment due to «l«vated
NO. emtsiioni K * concern, generic tndn
inM.cvmg NO, mull ordinarily b« lutxect to ambient
rrquirem«nts similar to thoea applicable to generic
!raOM involving TSP SO«. CO of Pb
exiwlng g«Mne rulaa an eonautaat with tM» poUcy
at welJ aa tie term* of thor EPA-tparoved >
Slataa thouid ba aware that without ttta or i
pracautlona. cootiaiMd approval of butibaaa i
axnnaf generic ruia* containing id*""*rl
defiaenaea nay create or accentuate piaa
defioenaea that may hava to be uur»uad at • lat«r
data or compenaated for by ortiar n»ani Sa*
Mcnon U.E.4. of th* Technical IMOM DuoianuC
" Such notice* nay alto ba utaued tar exiaxtnf
gcnanc ruin in attainment area* tod aoAattamnaat
IV. stabbiM Which Require C«**> 3 v.
Ceea HP Revision*
States and sources must use ±* <:z: > •
by-case SIP revision process to
implement bubbles which are nor
covered by a generic rule. Because -he
case-by-case SIP revision process can
take account of many more individual
variations, numerous trades which couid
not be accomplished through gene-c
rules or similar means may stai be
approvable aa case-by-case SIP
revisions.
EPA will take action on generic rules
and individual trades submitted as SIP
revisions aa quickly as circumstances
permit after a state has adopted a SIP
revision and submitted the action to
EPA. EPA encourages "parallel
processing" of such SIP revisions, with
EPA and the state conducting
concurrent review so that both agencies
can propose and take final action at
roughly the same time. EPA will also
publish noncontroversial SIP revision!
aa immediate final actions, converting
them to proposals only if requests to
submit adverse comments are received
within 30 days (see 40 FR 44477.
September 4.1981). In ail bubble action*
EPA will daady identify (or requixe
states to identify, as appropriate) both
pre- and poet-trade actual aad allowable
emissions for each source involved in
the trade, so .that tba ambient effects of
each bubble may be known.
V. Cooduatoa
This Policy Statement sets out basic
principles for approving individual
trades and generic trading rules. It
tightens many requirements in order to
better ensure SIP integrity and
environmental progress, while offering
ample opportunities for use of
approvable. environmentally-sound
trades. EPA encourages states and
sources to us« these principles as a
framework and refer to the
accompanying Technical Issues
Document for further discussion and
examples. EPA also encourages states to
develop other approaches which satisfy
thesa principles while meeting their
specific needs.
araaa with approrvd danonacnaana. if thaM
lananr rulM an found to nqun praoounl
nviaioa la ordar to tnajta th«a coa*»teni wnn ;he
currant Bmuateta Tradiat Policy. Sa« Ttcmucal
UaaM Ooauaeal Mcooa OX*.
EPA recofiuMa tba addiaaaal Hmftq burden
which nay ba Unpoaad on bubble apphcanti in
anaa whan arm f*oenc rule* cannot be or have
no4 b*ra developed to ma«< ttM »p»cflc air quality
benefit nqunmena dawrtbad abaw. »nd will
attempt, ae fir aa fentbla. to aoailorale that burden
In lapUmetlas; tbla policy. Sa«. t.$_ n.1 and iec:ion
n-S-ll abo*« aarf related Preamble ditcuuion it
a.4S and accoap«nytn( nuo.
-------
Ftd«rri Rajgbtof / Vok Si. No. 233 / Thundsjy. D*e*mb«r 4. 1986 / Noticw
4383'
A*a poBcy
h Mtfc* dee*
not establish concKwhwrjr bow EPA wril
resolve iaeue* to indMdwal onn. EPA
will accept public ['••mint oe specific
SIP change* submittttaade* It and wiO
review individutUy eedi generic rait
and thoM emissions trades submitted a*
SIP revisions to detarmlM their
acceptability under the Clean Air Act
Interested parties wrfll have fell
opportunity to Krutinize application of
theee prindplet in specific cam. and to
teek subsequent judicial review of men
caaea after EPA has taken final action
on particular trade* or feneric rule*.
Deled: November la. MM.
ueunn****.
Adminittralor.
Table of Contents
L Qeaeata of Fini'iaiim* Trading
A. Creating; Pmitnrm Reduction Credit*
1. AD Redaction* MUM Be Surplu*
«. UM of Acftul or Allowable
Eminlon* u the BiMiiar Attainment
Am* *ad Noninefciamit Ami wtth
Approved DMmlratiaMo/A«*4aMBt
(Incfedint Rw*i Own* NoMttatauncM
Ann)
b.1Tp*ulal Ptu*»*a* Ri*alrnii*ut»for
Bubble* in Primary NomrtatBomi ATM*
Which Need Brt Uok AfprovW
Dcaonatratiooa of Atl*imnent
(1) Objective Tt»U For All
Application*
(2] When Tb**« Special Prosma
Requirement* Wlfl Apply
(3) Sutt AjMTtnen
(4) TrertMit of Ptodinf debbie
Application*
c. No Double-Cow tin*: of Redaction*
(1) Qtdlnaf Pr*-exi*nn* Eounwa
Reduction*
(2) Creditini Reduction* From
Shutdown*
(3) UM of Banked Credit* from
Shutdown* or Other Action* for Bubble
Purpo***
d. Multiple Ui« of EJtO
*. Reduction* froos Umflveotorled
Source*
i Alternative Pmtnt-" Lurtu Vfaet Be
Enforceable
3. All Reduction* MM( Be Prrmaaeat
4. All Reduction* MvM B* Qu*oafUbl*
i. CalcuUnni the Reduction
b. Oeicnbini the Reduction
B. Using Emm ion Reduction Crtdit*
1. Subitaanve Pnnaplw for Urtnj ERC*
a. Emution* Trade* Mu*t Involve the
Same Polhiunt
b. All U*e« deiewied
•alhertrf to i*nmm*r rrtrvim p«ni of a Sure
(SU>) uno«r tht C«tn Air '
-------
43838 F«d»nd Regtoiet / VoL 51. No. 233 / Thuaday, December 4. 198* / Notion
L Bafneat* Qf-FTfitseinns Trading.
The basic dement* of any emissions
trade an the creation of an emission
reduction credit (ERG], its use in a trade
and its possible storage m a bank prior
to use.
A. Creating Emission Reduction Credit!
States may grant credit only for those
emission reductions that are surplus.
enforceable, permanent and
quantifiable. Otherwise use of ERCs
might degrade air quality, threaten the
viability of the area's SIP. and make
more stringent control requirements
necessary.
1. All Reductions Must Be Surplus
At minimum, only emission reductions
not required by current regulations in
the SIP. not already relied on for SIP
planning purposes, and not used by the
source to meet any other regulatory
requirement can be considered surplus
and substituted for required reductions
as part of an emissions trade.
The first step in qualifying a reduction
as "surplus" is to establish a level of
baseline emissions. This baseline
represents the level of required
emissions beyond which reductions
must occur for a source to be eligible for
credit Three baseline factors—emission
rate, capacity utilization, and hours of
operation—must be used to compute
and compare pre-trade and post-trade
emission levels.1
The baseline for each source must be-
established both on an annual basis and
for all other averaging periods
consistent with the relevant NAAQS
and PSD increments. This approach is,
necessary to protect the ambient
standards and PSD increments on a
short term as well as an annual basis.
The baseline will generally be
determined by. the attainment status of
the area.3 by the way the state
developed its SIP. and by whether the.
area is subject to PSD requirements.
a. Use of Actual or Allowable
Emissions as the Baseline: Attainment
Areas and Nonattainment Areas With
Approved Demonstrations of
A ttainment (including rural ozone
nonattainment areas/, fn attainment
areas, baseline emissions must
generally be calculated using the lower
of actual or allowable value*4 fat all
three baseline factors. However.
allowable value* corresponding to one
or more of these- factors, when higher
than corresponding actual value*, may
be used in calculating baseline
emission*, provided those values an
shown to be used or reflected in. an
approved demonstration.1 The burden of
meeting this test rests with the stata or
applicant Whan the State or applicant
cannot show by written evidence • that
the demonstration assumed an
allowable value for a given baseline
factor, appropriate modeling would be
required in order to use an allowable
value for that factor in calculating
baseline emissions for me source.1 This
will require a LeveJJI modeling analysis
as specified in the modeling screen
described below, using actual emissions
for the pre-trade case, unless the
appropriate EPA Regional Office ("the
Region") determines that additional
technical support is necessary to protect
the NAAQS. PSD increments or
visibility. Additional technical support
may be necessary because crediting the
difference between actual and
allowable values for even one of these
factors may produce a post-trade
increase in actual emissions sufficient to
jeopardize applicable standard*
increments or visibility.
Additional technical support la not
necessarily limited to determining the
impact of th* increases from the trade.
The Region may require such additional
1 For further diacuuion of thnc factor* » they
relite to the calculation of baeelme emiiaiona. tee
Appendix 9.
9 Unclattifled area* «r* treated aa •itiuuMat
ami for permitting and etnuaton* trading purpoae*.
Unlike other cntent poilutaau. EPA d«M not
designate nonattainment treu for lead. However.
the Regional Admimitntor will review lead trade*.
aj all other rrade*. to aifure that they do not
interfere with attainment and maintenance of the
NAAQS.
* For the definition of -acfeaf and " allowable"
vahMe, and further ^ttrnttyq on ntnjattim at
Dateline: iinnaioga. aee Appendix B.
• Thia lUfaaeat doe* not apply to aetttaa. whan
"coatanponiMooi" actual ealaamni an alweye
the baseline. See. e^_ 40 OH n-24(bKJ>.
Bubblei IB areaa with demumuaOona baaed
•oiely oo qualitative judfcaeaa (e-a, tb* "example
refkxT approach or no technical tupportf ordinarily
may not rely, without appropriate modeilna. oa
allowable vaJuee in eakulaocf baj*Uae amiaamn*,
However, bobble* in areae with denooftraboa*
baaed on rollback* or dtipernon modeling may UM
allowable value* that are reflected ID the.
damoaatratioa,
• For example, the demonatrarJon calcmlatiooa
themaeive*. accompanyuuj metarule, or affidavit*
from thoae who coiutructed dw deaonetnttoa.
* In certain arcuButaace* an allowable* baaeilaa)
value ipeofied la a precon»tructlon pemtt wtU be
deemed equivalent to one uaed or refieclad la aa
approved demonstration. For exaapie. a caerc* m
an atuiiuntmt area where a PSD *****^~ ha* been
tnocred may uae allowable value* conautcnf with
it* pracanafructton permit if that *oarc*'a> eatiaatooa
are not reflected in the PSD amtaiemi baeeUne
concentration. (However. J medeliaf uataaj
allowable, *mlaaion* predict* a PSD increment
violation, thin additional analy*** muat b* done n>
•nure that the PSD increment ta protected.) A
tourca m a nonottainmtni are* may oa* allowable
value* coniiateol with iu precoratructJoei permit te
calculate iu baaalin*. provided thM permit poet-
date* the nonanainmenl deti^nanon. SIP c*U.
de*ign year, or baalin* laveatory yeir. whichever i*
applicable.
technical support up to aad
full Level HI modeling. M is aectsiin to
assure that applicablt NAAQS. PSD
increment* and visibility requinnents
will be protected. It may nquin the
determination of backgrwuid
concentration to which the unoacti of
possible emissions increases- that w-:uid
otherwise fall below Level 0
significance values must be added
Background concentrations should be
determined in a manner consistent with
EPA'* Guidelines oa Air Quality
Models.
la attainment anas where the PSD
baseline has been triggered, the trading
baseline for a source must generally be
computed using actual values for all
three baseline factors (Le~ only
reductions below a source's actual
emissions can be considered surplus).
Because 40 CFR 51.24 and 52-21 specify
that increses in actual emissions
occurring after the PSD baseline date
consume PSD increment, any trades
based on allowable emissions which
would potentially increase actual
emissions must perform at least a Level
n modeling analysis using actual
emissions for the pre-trade case, and
provide additional technical support If
deemed necessary by the Region, to
demonstrate that they protect the
relevant increment ceiling. NAAQS. and
visibility.
In nonattainment anas with approved
demonstrations, baseline emissions for a
source may be calculated using either
allowable values or actual values for the
three baseline factors, depending on the
assumptions used in developing the
area's demonstration;'
Some states relied on allowable
values for certain sources in developing
their SOi and TSP attainment plans. In
these nonattainment areas, sources may
use allowable values in calculating
baseline emissions, to the extent the
state used or assumed those allowable
values as the basis for its
demonstration. The burden of showing
that an allowable value was used or
reflected in an approved demonstration
rests with th* state or applicant which
seeks to use an allowable value.'
Other nonattainment areas either
used inventories based on actual
emissions, or relied on measured (and
therefore "actual"] ambient air quality
values, as the primary basis for
determining SLP'emiiiion limits needed
' Thta iralenent doe* not apply to netting. wn«rt
"contenpormneoua" actual amiaiioni ire tiwayt Uie
baaeltM. Se*. e*. 40CFR S1.18(l|(l|(vi|. See 1110
Appendix B fa* detailed dlacuaaion oi 'actual and
"allowable." eailaainna
•Se*n.aand7 above.
-------
Fef*itttnnf ha salines
ffaiflh tiaiellnei ue calculated "•V'g
either.
(I) The actual emission rate, the SIP or
other federally enforceable- emission
limit or the applicable RACT emission
limitl' whichever is lower, to compute
the baseline for each source involved in
the trade. This baseline factor shaU be
deter vned as of the date of the source's
application to bank or trade, whichever
is earlier.
(ii) The lower of actual or allowable
capacity utilization and hours of
operation to compute the baseline Tor
each source involved In the trade.
Actual values shall generally be baaed
on the two years of operation precedii
the application, to bank oa trade* vales*
another two yeai period is shown to be
mon representative of actual
operations. Sources which shut down
prior to the application to bank or trade
have zero emissions, and therefore no
credit is available.
For sources which banked or sought
to bank credit in these nonattainment
anas prior to publication of today's
notice, the "date of application to bank"
is the date of written application to the
states to bank credit through a formal
bank or informal KanHnj mechanism for
use in future trades. For sources which
seek to bank credit in these anas
following publication of today's notice.
the date of application to bank will be .
the date of written application to the-
state to moJu a reduction ttat»-
enforceable through or concurrent with
use of a formal bank or informal
banking mechanism.
(b) Using baseline emissions defined
above, meet applicable de minimi*.
it* for
'• Whlta not all of today1! M
bvbblM IB th*M tmt uv unary -b«M*»~
••ftm. til bcwc rtqumacau for thtw bubhlx
•it M< o»t hm for lunpUoty. Nn> rrnum»iint»
ilio apply w fcnric bubW* ralM m (ho* am*.
SM Stenoa UD Mow.
1' Wh«rt aa caiMMn Unit for a mea fevoto
la tfat Wdt kt* not pmrtoaity b«B appmml by
EPA *• RACT. a baa«UiM rtflictfna; < nijBHii»d
RACT tmiaalon rat* muat b« tfrmd upon by th«
•ouroi. «i«tt and EPA lor Iht touret m qimOon.
Level L Level D or Level O modeling
testa for ambient equivalence., as
appropriates
(e) Produce a substantial net reduc.
in actual emissions (Le~ a reduction o
at least 20* in the emissions remaining
after application of the baselines
specified above).
(d) An accompanied by the
assurances of consistency with ambient
progress end air quality planning goals
specified in section LAl.b^3) below.
(2) Wkon Thttf Sptdal Progress
R«qainmtat» Will Apply. The following
primary nonattainment areas need but
lack approved demonstrations, and
bubbles within them an therefore
subfact to the special progress
requirements in section LA.l.b.(l)
above:
(a) Anas that an designated primary
non-attainment anas under section 107
for the pollutant involved in the trade
and which failed to submit a 1979 Pan D
attainment demonstration or which
submitted one that has not yet received
full EPA approval This includes primary
total suspended paniculate (TSPT
nonattainment anas which submitted a
SIP that did not include an actual
demonstration of attainment but still
received EPA approval (Le_ a "RACT
plus studies" SIP).
(b] Extension nonattainment areas
which failed to submit a 1967 SIP
demonstration, or which submitted on
that has not yet received EPA approval.
Also included an those ozone
nonattainment areas that an unable to
demonstrate attainment by 1987. unless
a demonstration of attainment for the
area is subsequently approved by EPA.
(c). Areas that have received either (lj
A section 110(a)(Z)(H) notice of
deficiency based on failure to attain or
maintain the National Ambient Air
Quality Standards (NAAQS). in the form
of a SIP call or a new section 107 or
171(2) nonettalnment designation: or (2)
a notice of failure to implement an
approved SIP.
(d] Anas which received notice from
EPA that they have failed to meet
conditions in their EPA-»pproved SIPr
including commitments to adopt
particular regulations by specified dates.
The one exception would occur where
the only portion of the SIP (including the
attainment demonstration) lacking full
approval is the inspection/maintenance
provision for mobile sources. In these
circumstances, stationary-source
bubbles will be treated as if the area
had a fany approved SIP.
(e) Any area that does not have an
EPA-approved or EPA-promulgated
for lead.
-------
Federal ftegbter / Vol Sfc. No. 333 / ThnntUy-. December VUM» V Ne«loa*
(3] State Auuraux*. SPA wiil not
approve a bubble ia primaty
nonattainmenl areas needing but lacking
approved demoaitrauoas unless the
sute provides assurances that the
proposed trade will be consistent with
its efforts to attain the ambient
standard. The state roust make the
following representations to the EPA
Regional Office in or with the tetter
formally submitting the bubble as a
revision to the SIP:
(a) The resulting emission limits are
consistent with EPA requirements for
ambient air quality progress, as
specified in Section LAJ.IM1) above.
(b) The bubble emission limits will be
included in any mm SIP and associated
control strategy dtfaoaatration.
(c) The bubble will not constrain the
state or local agency's ability to obtain
any additional emission reductions
needed to axpediiiousiy attain and
maintain asnbteat air quality staadarda.
(d) The state or local agency is making
reasonable efforts to. develop « complete
approvabU SIP and intends to adhere to
t\nm schedule for «tnA development
(including data* for completion of
emissions inventory and subseqoeitt
incremeflta of progzeasj-stated in or with
the tfHor formally tuhr»jtt"'fl the bubbkt
or previous such Icttea*.
(e) The baseline used-U> (ariralafe the
bubble emission limits i* consistent with
the baseline requirements in section
I.A-Lb.(l) above.
These state assmances must be mode
in writing by the appropriate state or ,
local authority (e.q.. State Air Director.
Air Pdlotwn Control Board, or
Legislative-Committee}. EPA will not'
second-gun* such state lepteientatiora.
provided: (If They are a substantial test
applied by the state to each bubble, and
(2) the state baa explained how th*
proposed babble is consitteiit wtth lb»
area's projected attatnnwrrt itrategyr
Nor wiH EPA examine, or expect fiate*
to examine in making such
representattona. any specific source's
subjective motivation in making chained
reductions.
(4) r—'•—•— rf P-mttas R-if-'-'it
Applications. "Pendia* betoMe*'* o»an»
those which are i nniiiilf iumfamat
EPA Regions or (liidipailini as well
as any bubble apalicatioa* which were-
formalty submitted to EPA B«a»oa»
under the 1802 policy but returned.
without acuaa because fuiai bubUe-
cnteru had not ye« b«ea iaaued, la
primary oonatUJnment are** needing
but lacking demonstrations, these
bubbles should contribute to peogres* •
towards attainment "Progres* toward*-
attainment" meaoa s«tn» c&tta reduction
beyocd equivalence, with tKt
actual-SIP-anowaW«-o»-RACT- -
credit IB odier anas >v*tt *mbhie» •ml
show that •pf^fnHIt standard*
increaefUa. and visibility reeuireneoU
will not be ieopeidisMi. Peodiiu buhhlea
which meet theae testa aad ail other
applicable requirementa of the 1882
policy will be processed for approval
Pending bubbles may undergo limited
modification by tot states or sources
which submitted them in order to aeet
the new requirement* outlined above
(e.g. it nay be necessary to recalculate
tf»^ applicable hssradiae^.ThewfaBbbla*,If. -
TWtVwvrl B^^M( ^Bt/4 M^SffwtffMjt •ev*e^f>- "
meet aflreuuh amenta of toctay*i nottc*-;
appficabl* ta new bubble
ic^NoDaubltwCatating
fit TBiaumn. to be^ •
contdvred-VBipftu as emneiasr
redocdoB enoot eheady Iwe bvva
cxBuneu es pert of a demonstialluxt or
updated entsstoii inventory by aflty^t
air qveiRy ptaii or ha ve bee» ned tqr
to meet any UUIB
reqairemeut Double-cotmting of
reduction*, yt anting credit for th» s«me
esai*«ion ndvctieo. e.§_ once t* tfav
it*te •• p«f «t" itsnmsttaansxat Sf*
demonstraatm or PSD bmrelme. and r
second mae-to a source for to« in- air
eoKsviooe tratie* mst oe ad^n**ed ist
the Colloving sttuetie**.
(1} Crediting Pn-Bxi»tmg BmMa* •
Rtdoctton*. la nenattatnaent anas-'
credit generaUy cannot b* gratadrbr
emission reductions mad* before.
nuBtoriag data ia at wax mrHsiiaiHaf
use in carrent SlPphmnme. Pacsnee '
monKored ambient fevets cjuexurj^ reflect
these emissioa decreasavsuch .
decreaa**.m*y-haveliaen iiai»»dei
"•I'-K'Hng tfa« farther redaenea*'
needed te artafn ambfent steodaxdf:.
StatM now uleajly acow that m* " ..
existeac* af tfaasa redvcitaes ha*b*aa •
oiria* IB gate ooadtt far 4kaee mtHcuonx
The eeyrhaer acceptable he aslla, date
wodsi nonaatty be thai year ot OM mod
plsnanf Psvt DSCP revtatona under the
Qean Air Act AaMMfasMBts of 1077. l *
Where emieeieM torentorMs or other
date, ere updated far tredoag RPP aad
correco*ooo/PertOSIPs.thenew
toeeotoriaa euut treat beaked emissions
redueooae>ea eomnt actoal emissioa*
"in the air" at the source where created
so that corrected SIPs do not
hi advertently nty OB Aeee prior
reductions eod eaoae *eat to be lost for
use, If utvemlorie* do not treat tbwe
banked isdsrtsea aa-Ta the air." or if
they aje olhenslaenUeJupon for SIP
planning peseneee» SQGB neTuctiuiM can
no4oejger be- credited lor trading.11
onfttatnmiejit areas
onMSMtroCtata* ufatttniUMnt. emission
redBOBO&e ejcslevad*prior to appocv&on
to beak or^ed^fwticaeTef U cerihv)
wiftnel be credRadforoarln bnbbks.
See muuu'MaJxfl} abore. Reganfless
' oi whether ttarmeet other buetlne
tevte; eedfcaedBetter w«re not
/^Mfci by toe opportunity to
tndrib rpnctfcaL objective sense
datenaiaoo Sy ftnmgj aadcansot be
rdemonstration.' *
Zir artrtibnterUflrsqit aductfaiu at
com0raced*emutraction after January
1. 197TB»srjr M afihtia qualify for credit
wfie&er sudJ reducsoas occurretj
before or .after t»4 PSD oaaelki*
triggering data, See 4» (7R
31 J4fb)tl3HPI (V Ht 72719-20; August
7, 1980). Otter ealssioo reductioos (e&,
at minor source*) cannot qualify for
credit where me PSD hasHIrm date it of
hot beat triggmdtod such reductioai
occurred prior to the trtggex date, unless
these reductions are act assumed in the
PSD basatlnea. Sinca baakad eminion
-------
Federal Register / Vol. si. No. 233 / Thursday. Dumber 4. 1986 / Notices
436
itductiaa-credit* rauit be considered to
b* -to the air" for ill planning purposes,
if the bcsciiM datt is triggered before
banked credits are actually used such
banked credits will be considered as
part of the baseline and will not •
consume increment when used in an
emissions trade.
In attainment anas when the PSD
baseline has not been triggered as of the
date EPA or the permitting authority
takes relevant final action on the trading
transaction, reductions below current
SIP or permit limits generally may be
used without special restrictions in
bubble or banking transaction*.
provided they are otherwise creditable
and there is assurance that NAAOS will
not be violated due to any potential
increase in actual emissions."
(2) Crediting Reduction* From
Shutdowns. Shutdowns are generally
treated for purposes of emissions
trading like any other type of emissions
reduction.1* For example, the same
limitations on pre-existing reductions
(section LA.lx.(l). above) apply to
shutdowns where they apply to any
other type of emissions reduction.
However, under current federal New
Source Review requirements for major
sources, shutdowns that occur phor to
application for a new source permit can
be used as offsets only for equipment
replacing oo-site productive capacity
which was shut down.''
Shutdowns are of general concern
with respect to double-counting where a
state may have relied directly or
indirectly on shutdowns in a SIP
demonstration of attainment (Where a
primary nonattainmeflt ares n«*ds but
lacks an approved demonstration of
attainment, the progress requirements of
subsection LA-l.b- above apply to
bubbles involving shutdowns s* wen* at
to bubbles involving other type* of
emission reductions. These requirements
generally bai OM of reductions from-
shutdowns which occurred before
spplication to bank or trade.)
In general a state may credit
reductions from shutdowns if th* SIP
has not already assumed credit for these
reduction in its attainment strategy. So
long as reductions from shutdowns have
not already been counted in developing
an area't attainment strategy, they are a
potential source of surplus reductions.
11 However. reduction* 11 toureet other (h«a
moor tunoMrjr Muree* on whtdi construction
coewMM«d before laeuury l. l«7S ruy *ol be u**d
to beienc* incmM* at Mich pre-lS73 outer MURM.
'• For UM at banked ihuidow* credit* for
babble* MtprtOMry nonRACF-ellowable ba
plus the 20* additional reduction are
applied to determine the amount of
credit
No special baseline or additional
reduction requirements will apply to
these credits in other areas.
d. Multiple Use ofERCs. Once surplus
reductions are credited states must
prohibit their multiple use. The same
pound of reduction must not be
simultaneously banked by two different
entities or used to satisfy two different
regulatory requirements at the same
time. Toprevent theta results, stales
must adopt aa ERC registry or
equivalent means of accounting for the
creation, banking, transfer, or u«e of
EEC*. See Section I.Cfl below. State:
must also ensure that past reductions
used in bubble, netting or offset
transactions are not later credited m
newly-established banks.
" See n. M*fao*e.
" ERCj u**d for »fWnf «ed off** |
(Indudini UWM d*nt*d from b«aki) HBU -irjlj
wilh reieveni NSR and PSD reqaraeMafk.
'• For farther dUouunn reUted te (be uw of
bctkee1 aedH* in theee non«UUuMDl *rM*. *ee
»eet>ofi l.C-A beiow
•• for touroM wMc* b*nJt»d or toufflt :o b«r,i
cnd>U d«n» auiv bt proviara »no>--.r,g
tfttxr UMI M ippbctooB M dtp«4jt rric c-wm .n «
formil b«ak wu r»i. 4no i.*>«
lalcru to UM «*>• rt*«tt>n( CT*OIU in < hjKjr* rrict*
-------
area's Sff
for etni
application* Bay si
quality pieming csoebfMss. Where
such source* in already sebject to SIP
emission (units. those emisakm limit*
mu*t b« used a» the baaia for
determining amisaian reduction credit
unless a more stringent baseline would
normally be required (see sections
LA.L*. and LA.14*. above).*1
In oaaHiaunt anas stats* may gnat
bubble credit to aourees regardless of
whether they have been included in an,
inventory, baaed on use of actual value*
for each of the three baaeliae factors, so
long aa those souecaa are not subject to.
lower allowable values, for those factors.
Allowable values, when higher than
actual values, may alternatively be used
in calculating the baseline, provided
source* show that any resulting
potential increase in actual emissions
does not jeopardize applicable ambient
standards. PSD increments, or visibility.
(See 40 CTR S1.24 and 5i21 tot specific.
requirement* concerning PSD
increment* and visibility.)
In nonattoimnent omit with ctppruteo
JcmjiutiutiOM of oUQnuotirt, whelRn
sotifLes IKA on toe nrventory can cre*tv'
bubble cictIR wiff turn ew new tfte*
approved demonstration of attainment'
was designed. Some stales first
monitored ambient vane* to determine
required redaction* far the SO* men
required a proportionate reduction ia
emission* from cert
unlixeftsrrwd fonts of opneHeuw> • - ~ -
apply cateulaJs'triebr
categories (i*.. * "rotftraxk") ie. order to
attain. States may grant credit for-
reductions from onravemoned sewrcea
in these area* ia at leeet two way*.
(1) They could require the avecag* of
percentage reduction* imposed on ail
inventoried source*, and grant credit-
only for reduction* in excess of that
amount. In this case, baseline emission*
should be based on the percentage
reduction in actual emissions Tor the
year in which the baseline data for the
rollback was gathered. Where such
sources are already subject to lower SO"
emisssion limits, those Sirits must be.
used to determine credit.
(2) They could require the source to
use a RACT emission rate and the lower
'' Where i giver x,urue w»i not subiect To
mjndf wy RACT r«^ulinon du» to (he feet lh«t II
was not included in the inventory (e t,. where no
RACT refutation for • wire* cmngcr; wt* tiiupnJ
breituve the Met*. untw«re •( the toant. nfoed •
d«:l»r jiioo ih*( no *ovee txrufd m thM mn*
L.iWvrm. or when an unfi»ui>»»ud. mwi-CTQ
90
result ia • reduction at least as greets*
the percentage redaction assented In thr
rollback As discussed'above, whenr
source* *fe-already sebfsct to lower SP
emission limits, those touts sM»t be
used as the basis for dstensising credit
Other area* develop**! SIP
demonstration*, baaed on dispensaa
models rather thsnsfSB wide
proportionate reductions. To the extent
the** SB's deoHMUtrated ambient
attajamentthrougncedection*]
from specific Inventoried i
incorponted eoitssion* frost.
uninventohed seercee in i
or area source totals, and profrctee
attaioneat by aodelins tneefiseniei
those reduction*, reduction* from .-
source* set on the intaolory cne he>
credited «*ing. to* lower of actual cev
allowable valnea tot each of .the
MrrtscA oa*d but lack •»
demontmtitM of attaauoftH.
prosjre** jeQuimMnjta
irm-i ipplj iff tnihhlei mrhirh seefc tn
u*e credit Bnouuiiatamiaoad-saassa.
illr-ihli rrF^fT slln-rshla
baaluuk Whare a HACT emuwioaliaul,-
has not ofraactx beea.adopttdfbr •*• .
unimrentarMMJ source. *uck«.H rait jnnet.
be agreed upoabctwcso lha *ourea. ta&..
state and EPA beiore the beasCna caa
be deteiinined.
State* which grant credit from
uninventoried sources not subject tp .
permits, offset requirements, or.
enforceable production constraints
should address me possibility tfaav
reductions from one sach source may be
followed by equal ot greater lacrea*ea
from similar nearby sources do* la
shifting demand. These states must
dearly demonstrate that ERCs from the
uninventoried source an surplus and
permanent Interested parties should be
aware that some uninventoried seurcas
may not readily meet these test*. For
example, reductions resulting from
shutdown of a dry cleaner wilT generally
not be creditable, unless the stats
subjects such sources to offwr
requirements or other measures
addressing this problem. However.
reductions due to improved control at
such a dry cleaner would generetiy be*
creditable, sine* shifting denaad (*• not
implicated
Baselines for Open Dust Trod**
Fugitive dust regulaa'oos generally
consist of generic wotk practice*
It te gaearalry
PCISSMSI to Menrtfy ue ayixwpifalv
emi*sian»ba*ermrrren •geoeni-s
open 4ut rsgutstfan. Therefore, foreny
opaa dust trade a negotiated RACT
bs*aiins am** geaenrity be- agreed vpi*
between the sourer sttte and U5EP A
for the open das( smree- fa question;
1 Alternative. Emrsaion Limits Must Be
Enforceable
Each babble, setting, offset or banking
transactioe, meat be approved by the
state and must be federally enforceable
•t the tioM an ERCieued. Reviewing
authorities-m»y be able to us* existing
praeetreierfuMMlsujpraamtncnon
permits insaed ey aiatetpunaant to 4O
CFR fU* au*. SU07 or U22) or EPA-
approved fssMhrnssstn aiasx
redncnene fsdenlr* enfarceabk. The
former paoihittty axisl* bscanse
perflsne ISMSV SBBBC a feoarally*
approved new «oi»ea-reii
many
wprogn
ibJe.Howerea.
paraat pru
- , r --- .
havrhssn ferlsialhy ansaoeed stattiy
fee snearss ursjsil te.NStl.aari .1
rsaqrnotbe capabiaof viastfor
i tetd»aaLtzigg*f NOL
. or thst in veive source*
not i
permit*.
Wltfcrespect to tee barter, possibility.
asyanintussbse eoeaisieece instraneot
impminn •••*•• \*mtu witsaa the
scope, of ssvBPA-anaroeecl geaartc nde
is fc*aBrfrede»ailr*gforcaii>k as pxn
of the SIP.
PmrnH"1 Ueait* astabtisked by
met beincnrpetatsajp «
instrumeat iitoli i*legally biading.aad
pisKQcajbiy esnorceeoia by oPn.
Trade* tnvarvtag indrndaaJ Sff
revisMBsauloaaticaily satisiy this
requiienenL For trade* onder generic
rules a compliance mstnB&ent cuW take
the form of an asjn«»*ot between rite
source and state, a praconstrucooa
permit (if on* * •peisnbi*). a coiwea*
decree. • stats osenting penau. or any
otaer coessiianc* iostruvent jndioally
enroneaab*e by d» state. To assure itate
enf oi caabih'ry.. thr generic rule ihonid
state, thai SDXKS* sebiect to these
instnmants a«e reqmed f« aaevr the
emission limits contained therein. Such
instruments would then automatically
becoaa federally *nro(c*«bJ« vu an
EPA^eppreved geaerie rak. provided
they are issued a*, or part of. the
compliance Instrument ipecifkaUy
required by tb* ganenc nil*.
Compliance ins(rujo«nts must eoaure
that enforcement personnel do not have
-------
Federal RegfcrtsT / Vol Si. No. 233 I Thurriiy. December 4. 1966 / Non records
reflecting such cnrtailment (see section
IA2 above).** Future increase* In
production beyond the permit amount
may trigger new source review or
require approval of a new emissions
trading application which include*
compensating emission reductions. As
with other type* of oonootApiiaacsx aay
source which exceeds ptmittad
production limits would be subject to
potential ooncacBpliaace paasitive.
4. All R*dMtfon« Mutt be QoaflftaWe
Bef ore aa emission reduction on be
credited h must be quantified. Tort
generally means the state must establish
a reliable basis-for caleolaOng the
amount and rate of the reduction and-
dascrtotag it*> csatfscteristtcs.
a. Calculating Uu Reduction. To
justify the amouot of asoissiflo
ii ill* rinni ills^hli as imfr smlaainni
ax* be usJt«iari SM M«e«M b(k fan
proMhituq aMOoa of SMCi «h« la t
eunttkMK W Mdi Mull •»•> Ul H»rf1^ 0C«
from i»>a IOIBUM !• LtnenriM <«ni»«M4 ••» !•
«owtJi. Ct Mcnon LA.1 J. above
A Detaibng A* rteo\wtf not
w ntoiii •oa*jrmiB«
ineorpanu i
Raw* la
S. Uting Emission Reduction Credits
This section explains the substantive
«nd procedural principles applicable to
use of ERCs. primarily for existing-
iiource bubbles. Many of then
principles also apply to use of ERCs in
netting or offset transactions. However.
those transactions are governed by
EPA's New Source Review regulations
(40 CFR Parts 51 and 52) or state rules
feffecting them.
1. Stibttantivi Principle* for Unny ERCs
a. Xrnmtom Trades Matt involve the
Same Polfatant. The Clean Air Act
requires states to develop separate
plans to attain end maintain the
national ambient air qualify standard
for each crttaria poihitant. Thus, all
individuBi bubble, netting or offset
transactions omst involve the ssme
pollutant Onfy redactions of
psrtiariates csm sart>stitutc for Increases
af partmiates, redoctions of SOi for
tateremsea in SCX etc.
6, All Ufa of ERCs Mutt Satisfy
Ambltnt Tae^i-Baeaase theCle&n AJr
Act requires tfaaraD area* througiiout
tfeie country attaiJi aad maatain ambient
standard*, protect applicable PSO
increments, and protect visibility ia
mandatory Federal Qasa I (PSD) area*.
bubbles must generally be equivalent in
ambient effects to the bajelin* «mi*sion
levels which they replace.11 In
nonattanfieat anas, uu of ERCi
cannot create a new violation of an
ambient standard or delay the planned
mnovel of en existing violation. Ln
attainment areas, use of ERCs cnrnot
violate an inoement or ambient
standard Use of ERCU in either typ« or
an:a caonoi sjdv«rs*ly a£bct visibiLry in
any Mndatary PtdereJ Gass I area.
The ambient effect of a trade
generally depends on (he dispersion
. fihdraotecittics of the pollutant involved.
VOCorNOf Trades. Trades irrvohnng
VOC or NO, oeed consider only
eixiiaaaoos. Since the sabunt impact of
these poU««ania is srvawide ratb«r than
ly or nanoniijAj h***>b
oe • daily- bam. lontcr tvor*tm| iMn «uy b«
ptAnj(t*d &•• Appendix 0.
l*dU»| M
ij»»m
it1nri trf
nndtni But
&KIUM LA-l.fc.
> • win tit qiiflrr bcntm STC
-------
43344
Federal RefUte* / Vok 51. No. 233 / Thursday. Decerabeir 4. 19« / Notice*
•fleet by am pound of decreased
emissions within »h* sane bread
geographic area, and the precise
location of those increases and
decreases ordinarily dots not matter.
For VOC and NO. such "pound-for-
pound" trades may therefore be treated
ts equal in ambient effect where all
sources involved in the trade are located
in the same control strategy
demonstration area or the state
otherwise showi such source to be
sufficiently close that a "pound-far
pound" trade can be justified."
Particulau Matter. SOt. CO or Lead
Trades. Ambient considerations are
critical for trades involving emissions of
sulfur dioxide, participates, carbon
monoxide, or lead, whose air quality
impacts may vary with where the
emission increases and decreases occur.
For example, one hundred pounds of
ERCs for such a pollutant created at one
source may balance the ambient impact
of a 100-pound increase at a source
nearby, but may only balance the effect
of an 80-pound increase at a source
further away. In addition to distance
between sources, plume parameters.
pollutant characteristics, meteorology.
and topography will also affect the
ambient impact of such trades.2*
This Document authorizes the use of
four alternative methods of determining
ambient equivalence, with the degree of
required modeling linked to the likely
ambient impact of thr proposed trade.
The following sections describe use of
these alternatives to evaluate for
approval many bubble or offset trades
without full scale ambient dispersion-
modeling.30 Use of these alternatives
under generic rules is discussed in
section II below.
(1) De M/nirms. In general no
modeling is needed to determine the
ambient equivalence of trades in which
applicable net baseline emissions do not
increase 31 and in which the sum of the
" The disunion m ihn paragraph doe* not
apply to NC, 'rades involving visibility impact* o(
elevated plume*.
" The ambient equivalence eooesdererton*
elaborated in ihn and frilliieaiat| petatTtphi tlao
jppiy to NO, trade* involving vuibtlity iropacu of
elevated plume) See n. 28 above
10 Modeling is generally not required for new
source netting, whoie purpOM i* to avoid expending
resource] Hhcre advene emission or ambieni
mpacti from change] at a source art exu-»m«ly
unlikely See. e.g. « FR S2S77-r» (August 7.1800).
11 Interested parties should, however, be twin
ihn in tome circumstance* modeling may be
required to lutufy utuxe, canatn emiaa*on» baseline*.
prior to the Irade, Where a bubble in a
nonottainment area »e*ka to employ allowable
vaiuet greater than corresponding actual value* la
the calculation o( baaeline emitaion*. and what*
tuch allowable value* are not ihown to be uted or
reflected m an approved demonstration, a lull Level
III modeling analytia will be required. Where a
emissions increases, looking only at the
increasing source*, totals less than 25
tons per yaw (TPY) for partculate
matter. 40 TPY for sulfur dioxide, 100
TPY for carbon monoxide, 40 TPY for
NO, (when visibility impacts an of
concern), or 04 TPY for lead, after
applicable control requirements. Such
trades will have at most a de minimi*
impacts on local air quality because no
net increase in emissions will be
produced and the amount of emissions
being shifted is leas than designated
significance levels in associated EPA
regulations (sea. e.g.. 40 CFR
SLWUHUW and51.24(bK23Ki]].4t
(2) Level I. In general no modeling to
determine ambient equivalence is
needed it
(a) The trade does not result in an
increase in applicable net baseline
emissions:"
(b) The relevant sources are located in
the same immediate vicinity (within 250
meters of each other):
(c) No increase in baseline emissions
occurs at the source with the lower
effective plume height as determined
under EPA's Guidelines on Air Quality
Modeling:
bubble In an attawmmi an* nets M employ
allowable value* greater than corresponding actoal
value* in the calculation of baaettn* emitatona. and
where, tuch ellewaeX* value* m oot show*. t« be
ua«d or reflected in an approved damona mtiatv a
Level U modeling-analy*it (M* b*4ow| utnng actual
emiMiana (or the ore-bubble cat* will be require*!
unlete. for bubble* processed at cate-by-ctte-SIP
reviaiona. the Region determine* that additional
technical support it necn*ary to protect applicable
standard* or mcnmanu. VVher* allowable value*
are uaejd to caiculat* baaeiina enuuiona (or tuca a
cate-by-CAse-SU" revition bubble in an atUuuDent
area where the PSD baseline haa been triggered, the
Region wll require the technical support neotnry
to prated PSD increments.
Where allowable vaiuet higher than actual value*
are not shown to be uted or reflected in an
approved demonstration, staiet that wish to
aulhoroe their uae in attainment areas under
ftrunc ouAo/e ruin mutt either state, or devetop
repHcable procedure* *ddre**tnt> background
value* and how they will be evaluated in
conjunction with the actual chanfe* in ambient
concentration predicted by the Lave! II analysis.
The** step* mutt be sufficient to protect standard*
and increments and mutt be approved by EPA at
part of a generic rule.
For further dl»cu*»lon rtfardtni calculation of
batellne emissions and related (nodding
requirement!, te* Section LA.L above and
Appendix B below.
"This paragraph should not be conatrued re
imply that ntw source* and modification* need not
meet all applicable requirement*, including thoea
specified under 40 CFR 51.18 or parallel EPA-
approved wtte rules.
" Se« n. 31 abov*.
(d) No complex ttrrain»« is witrm >.«
area of uttrufleant impact of tit trrae •'5
or 90 kilometers, whichever ts :es«:"
(e) Stacks with increasing basell-.;
emissioos an saffldentry tall to avoid
possible downwash situations, as
determined by the formula described at
50 FR 27982 (July 8.1965) (to be codified
at 40 CFR Part Si): and
(f) The trad* does not involve open
dust sources.
For such Level I trades it can
reasonably be assumed that "pound-far-
pound" trades will produce ambient
effects equivalent to those which EPA-
approved air quality models would
predict Therefore modeling 'o
determine ambient equivalence is not
required.
Trades between fugitive process
sources and stack sources (i.e.. process-
for-process or process-for-stack) can
acceptably b« evaluated and approved
under Level I ss long ss the maximum
distance between any emitting sources
in the trade is less than 250 meters and
all other Level I criteria are met.
(3) Level II. Bubble trades which are
neither de minimi* nor Level I may
neverthele**. be evaluated for approval
based on modeling to determine ambient
equivalence limited solely to the impacts
of the specific emission sources
involved in the trade, if there is no
increase in applicable net baseline
emistiona." if the potential change in
emissions before and after the trade will
not cause a significant increase in
pollutant concentrations at any receptoi
for any averaging time specified in an
applicable ambient air quality
'•Compttxlemcn it broadly defined by EPA as
terrain greater In height than the physical tttcx
height of a aourc*. For bubble purposes, this
definition i* applicable only to tourus wim
incretting baaeus* emiationa.
"For guidance on determining 'area of
significant Impact.' tee Appendix E below The
graph m Appendix E. or EPA-approved alternative
approach**, aiay be incorporated in generic rjies :o
make this aspect of Level 1 analysis rtpucaoie and
operational. See Section U below.
'• Generally, trade* involving complex '.errsir as
defined above may not be exempt from modeur^
under a Level I analysis. However. EPA win
consider on a caj*-by-cate basis aacutionai cruena
(or determining whether a particular trade mtoiurj
complex terrain, but otherwise meeting the
requirements specified above, does not prtser.i a
problem of pounatl plum* impacnon and may 3e
approved under a Level I analysis. These adduiona
criteria would include such (actors n source leigru
and emiiaion rale*, distance between sticxs ana
elevated featum. rare o( topographical nit. and
other conandereOoiu which may b* appropriate (or
the particular geographic are*. Slain are
encouraged to work with EPA to deicrmine when
and how tuch addinoeal criteria can be aeveiooed
and applied to individual trades.
" See n. 31 above.
-------
F«d«f»J fog***! / Vet *1. No. » / Tnumky. December 4.1*8 / Notice*
not pndiot any iacreas» IB aabieftt
coactntntkxH in • auditory Fidenl
dais 1 area." Hit chanfe la
.concentration from the before-trade caaa
to the After-trade eat* mint in general
be modeled using reflned models tuch
«• MPTER and ISC for each appropriate
averaging time for the relevant national
ambient air quality standard* for each
receptor, using the moat recent full year
of meteorological data.**
(4) Ltv*/ HI. Pull dispersion modeling
considering all sources affecting the
trade's area of imped is required to
determine ambient equivalence if
applicable net baseline emissions will
increase aa a result of the trade.4' or if
the trade cannot meet criteria for
approval under d* minima. Level I or
Laval IL
However, a geographically limited
Level 01 analysis may be used in some
cieaa where e Level II analysis predict*
•rifoiilcatr taped tor Level H
. eUM* Buy MI (he f*lfaaHn|
potential aabMM la**ct oaed oat be further
evaluated before •pprov**
10 *«/•• far any M-toer penod tor pejttarfat*
tuner:
I •«/•* tar «y mini pern* for pertnilti*
* far any laaar paned far 9Ot
* for u aamiai period far SOb
573 MI/** far *T a-heer- penod far CO:
ODD */•* tar My 1-hew p»«od tar CO
0.1 »«/•" fa* «T 3-iMarth parted far r%>
See 48 m JOTS (Aegeet T. nSDV Far *<"ae*
nt %Mtk EPA'i ne* Sbwce
Renew rcfuiallone la 40 CTR Jl.ll or Pkn 51,
AppendU S. or pertlleJ PA-eppiu«ej *t*te
niuUttom. -SajBtfcaaT «o*d odder « C71 Pert
31. Apeaedii S it derlee* M 1 M/"* e*emei
avenee for parnculaiet. SOi or NO*. * •»*/»* 14-
hev avenee for partlculaia* and SO.: 23 M/a* J-
hoar ev*r»e» far SOi: and f orf M b* •
•pprovcd undvr Ltv«l II wh*n other «nd«»c«
raUttd lo background— 1.»_ formally vmiMiMd
ambtcnl *lr quality mo«it«rtn» Uy
tint th* bubble would
aiBbitm nandard or PSO
lb* pUrtnrd rrmovtl of aa
•• Other trchniquet mvy b* «^iixn| nhtu
touren infi while
conserving government resources and
shortening approval time* for many
indivuiHaltradaa.
e. Bubbin Sttould N# Zocmaw
AppticabJi Nit Sc*eZifl« gff^f^MM
Ordinarily, bubbles may not result in an
increase in applicable net hasettne
emissions. Such a babble would require
s case-by-case SIP revision, and may
only be approved based upon a
combined Level 07 and Laval n
modeling analysis (La, aa analysis
sufficient to show that all applicable
requirements of a full Level ffl analysis
(as described above) are met. and tftat
the bubble would not result tn any
exceedance of significance vafoe«
specified for a Level H analysis at any
receptor for any avenging ttate
specified in an applicable anoieflt air
quality standard.**
•• When a Level m modallnf aaaJysu »uboutled
te tapeort a votaury tr»dtnj «ppmjOaa (ndleatw
of aa aabteat f»9uireaa«t 1FA *M
e Taloea.
' Set ditcjinon in I B.I.C btlow
rvrww rud) applieaoon on i rranmon ian«« cite
by
proceat (teduidtns the ttne't pinutiUiM la
determinini (tow te remedy nuiiaciaUjBeail. tad th*
prof)^£4 WM ffnVCfl^r^ r^FJWtfy Of tfl^ QOROttjOB OT
aonatUtniBenL In Itt rmrm, the Afency «lfl tmk»
into aooowt rod factort at the deeyee of
exceedanoa. th* contnbrttoB of th* vtrtnf Kmrcw
and the tnoje lta«if to th* exeeeekne*. aad KM
defrv* to which aMh **a/o*e wo*M •* put ef *»r
tolution remedrtnf th* e»caadint»
•• Wker* a piupoead b»*bte lacmatnj no*
baaettaa emaiton* cannot neet tXU tev of a»>e>e»»
equivaliiioa. n wiiy not be uwnrrW e* « b«vM*
under the Emiifiont Tradmf Pnttey.!
Vn*Mtu+* bvbole I* exposed in a
Aiwura>r^snanr m au the state must
demonstrate tot the trade it conslstc
with (htrpraa^M damonstrtttoa under
an apffwred dajsamialiatton of
atteinnent, rrrfM ftt EPA-epproved
pragma denonatratioa as part of the
proposed SfFnrvtaten. or otherwise
allow («j. by modeling and any
nircessary compensating emission
reductions) that the proposed trade
comports with the EPA-epproved
emissions and ambient progress
demonstration.
d Babbfes Should Not Increase
Emiuiont ofHaxardotn or Toxic Air
PoJhitontM. Under the Clean Air Act all
sources must meet applicable lection
1U (NESHAPl) requirtmenu for control
of hazardous air pollutants. Sources may
neither use a bubble to meet these
requirements, nor increase emissions
beyond the le-reto they prescribe. Where
a sovce wishes to generate or use
emission reduction credit for a en ten a
pollutant and where a NESHAPi
pcillntant is part of the criteria pollutant
stream, the emieakms baseline for
emissions of the hazardous potiutant
from that source wtmJd be the kswer-of-
Ktua)-or-NESHAPs*allowable
cfldacroos of that poilutant. applied as of*
the tteM of appUcaOon for credit. When
EPA has arspuaW to regulate a source
category for enissrons of a pollutant
under section 112. but has not yet ,
promulgated a NESHAP for that source
category, the proposal will serve aa the
interim guideline for evaluating the
potential effcdi of any proposed
cnn*eioes trad* (waiving sources to
which the proposed standard would
apply. The emfestons baseline for such a
pollutant gntitled by s xrorce subject to
th« proposed NESHAP would be lower*
of-acttaJ-Of-proposed-NgSHAPs-
allowebie emissions for that pollutant.
In genera/, such trading proposals will
be approved so long si they (1) result in
emission limits for each source emitting
thu relevant pollutant which are
equivalent to or less than those that the
approved NESHAP requires or the
proposed NESHAP would require tf
promulgated, (2) r*ly only on reductions
betow ectual or allowable levels
(whichever is ten) of that pollutant, and
(3) take place within a single plant or
contiguous plants.
'Where a pollutant has been listed
under section 112 or EPA has published
a Notios-oflateBt-to-Usl but no
NESHAP has been promulgated or
proposed for a source which emits that
lo SUP
m*r t«8 tvowtft euca rmaed llrmti fo
under the fewer* rtquim*eni« .pvli
-------
4384ft
Federal Raster / VoL 51. No. 233 / Thursday. December 4, 1980 / Notices
pollutant, state* may generally allaw
trade* consisting of eqoivsrlest increase*
and decreases of •ctuaiaaiuiont of
that pollutant within a single plant or
contiguous plants. Once the relevant
NESHAP is promulgated every source.
regardless of any previously approved
trade involving emissions of that
pollutant, must meet the requirements of
that promulgation.
Where EPA has decided that one or
more source categories which emit a
listed pollutant do not require regulation
solely because of limited national
exposure, emissions, of that pollutant
will continue to be treated the same as
emissions of any other pollutant listed
under section 112.
Where EPA has issued a formal
Notice-of-lntent-Not-to-List a pollutant
under section 112. that pollutant will
ordinarily be treated as non-hazardous.
However, where the decision not to list
or not to regulate was based on limited
national exposure, but the individual
risk was sufficiently high that EPA
committed in the announcement of its
decision to support (through some
formal mechanism such aa a
Memorandum of Understanding (MOU))
state-level efforts to develop regulations.
the pollutant will be treated aa listed for
trading purposes in order to assure that
such state efforts are not compromised.
The model for the intended scope of this
classification.is EPA's aoyionitrile
decision. (SO FR 24319: funa 10.1985).
If a substance is neither listed nor
regulated aa haaardous under section
112. nor meets any of the other
conditions specified above, but has been
formally listed or regulated as toxic
under any comparable health-based
federal statute, the Administrator may
consider this fact in evaluating trades
which may increase emissions of that
substance. This authority has not been .
delegated within EPA by the
Administrator. See Clean Air Act
section 301(a){l). 42 U.S.C 7«n(a)(l).4«
•• Trsdes involving emiaaua muni pcmally or
wholly composed of any pgUaunu subiect to
special considerations oacJUrilltlaecTJoa mual meet
two separate and dunnerOTtt 4o be approved.
Firx. soch trades mull b« ssaannahls under the
criteria and pnnojdes which eppry (o all trades, n
ditcuseed throughout thu policy (i.e_ such trade*
must meet baseline and other requirements for the
TKvim cmeni pollutant). Second. s»ch tradea
must be approvaole with respect to fhe haiarrdoue
pollutant fraction of the criteria, pollutant eouanosi
itream. This means that there must be no net
mcTTise in emissions of the polhnami addreaeed in
this section, ai a result of such trades. When a
NESHAP has been promulgated or proposed. Ihe
baseline (or determining whether such en increase
has occurred i»the tower-of-actual-or-NESHAPv
dllowabie emissiona for the hazardous component
of the trade, for ih* sowrcs w«ich emits that
component. The pro/nulaated or proposed NESHAP
limit not only <« used to define (he aJtowraofe
Exception. Trades which involve the •
pollutants addressed in this seetioabul
do not meet the special restrictions
discussed above, may also be approved •
where surplua reductions in those
pollutants compensate for increase* in
non-hazardous emissions of the same
criteria pollutant For example, a source
emitting benzene may trade with a
source emitting a non-hazardous VOC
without meeting these special
restrictions, if the benzene emissions are
reduced as a result of the trade (i.a..
"traded down"). Aa long as such a trade
would not result in an increase in either
actual or allowable emissions of a
pollutant subject to the preceding
paragraphs at any source, it would not
differ in nature or requirements from a
trade involving only non-hazardous
VOC emissions.
e. Existing~Source Credits Cannot Be
Used to Meet Applicable Technology-
Base'. Requirements for New Sources. •
Under Clean Air Act section 111 and
EPA implementing regulations, new
affected facilities must satisfy
technology-based N«w Source
Performance Standards (NSPS),
regardless of the attainment status of
the area hi which they are located;
Under sections 165 and 173 and EPA
implementing regulations, new or
modified major sources most also satisfy
technology-based control requirement*
associated with preciinstrnction permits.
These requirements prohibit use of
credits from existing sources to meet or
avoid applicable NSPS. and bar use of '
such credits to meet applicable new
source review requirements for beat
available control technology (BACT] in
PSD areas, or lowest achievable
emission rate control technology (LAER)
in nonattainment areas.4*
However, modifications of existing
major sources in PSD and
nonattainment areas with an EPA-
approved "plantwide" definition of
source can uae "contemporaneous"
reductions in actual emissions from
within the same source to "net out of
New Source Review.4* Under such
emiaaiona for that source, bui servej aa.an etMoiule
ceiling on the source aa well Where I NESHAflhaa
not yet been promulgated or proposed, the K-—"m
for determinm*] whether such aa incraaae has
occurred is generally actual enuaatona for the
hazardous pollutant component ai the trade. But d.
today's Policy Statement at a. &
4> Today's nonce does not addresa whether or
under what circumstances factiiuee inbtect to
NSPS. BACT or LAER may surpass applicable
permit limits reflecting such requirements uvor4a* •
to creste credits for exuimg-source trade*
*• "Contemporaneous' means s reasonable
period for accumulating increases and decreases in
emissions, as specified by the stale. See 40 CFR
"Betting," sourcewtde increases in
potential emissions that do not exceed
designated levels of significance (lee 44
CFR Sl.lWWlHx). 5104(0)0). and
5i21(b)(23)| will not be considered
"major modifications' of the source
under 40 CFR 51.18. S1J4.51.22.91.307.
S&2& or SZ27. Thus, while these source
changes must still meet applicable
NSPS. NESHAPs, preconstruction
applicability review requirements under
40 CFR 51.16 (aHh) and (1). and SIP
requirements, they are not subject to
new source review requirements for
major modification because they are not
considered "major." 4t
/ Trades Involving Open Dust
Emissions. Trades involving open dust
sources of paniculate emissions may be
approved through case-by-case SIP
revisions based on modeled
demonstrations of ambient equivalence.
Sources proposing such trades must
commit aa part of the trade's approval.
to (i) undertake a post-approval
monitoring program to evaluate the
impact of their control efforts, and (ti)
make further enforceable reductions if
post-trade monitoring indicates initial
open dust controls do not produce the
predicted air quality results.
g. Interstate Trades. EPA will approve
trades which involve sources located in
neighboring states where such trades
meet the criteria below and all other
approval criteria applicable under
today's notice. Where state trading
requirements differ. EPA will require
that trades with increasing and
decreasing.sources indifferent states
meet the substantive requirements of the
more stringent state. In general, in order
to avoid complex accounting problems.
EPA will deem ERCs created in another
state (o contribute to progress in the
state where used, to the extent of that
use. Such trades must be accomplished
through case-by-case SIP revisions.
41 NerUns *l*o applies under the narrower 'dual
definition" of "source' «i certain cimmjuncsj For
exaaipie. firms may uae reductions wtinm the punt
to coopaeuata for increases st several emitting
unrta which, wfale act individually sit-.ificam
ought othenrtae add up to a significant increase
pUntwide.
Under current EPA regulations, if « nonatummem
area is subject to a moratorium on new
preeooatrucitoB permits for mator sources or
modifications and irte area does not Save an
approved New Source Review progrsre. then me
ana Mtomancally uet a ptantwide definition See
40CFRSU4.
EPA's generel expansion of opportunities for
tiatee to uae the plantwide source definition for
certain noneuaimnem areas (49 FR 5O764. Octooer
14. 19Wt wee affirmed by the U.S. Supreme Court on
June 23. ISM CAeviwi U.S.A. Me. v .Vo
-------
Federal Register / Vol. 51. No. 233 / Thursday. December 4. 1986 / Notice*
h. Trades Near PSD Clou I Ana*
EPA or • state operating undtr • generic
rule ffliut notify the Federal Land
Manager if an emiiaion* trade will take
place within 100 kilometers of a PSD
Clau 1 area. Notification must-occur
early enough in the review process to
allow at least 30 days for the submittal
of comments before the trade will be
approved by the reviewing authority.
Where a bubble within SO kilometers
of a PSD Class I area is submitted to
EPA as a case-by-case SIP revision, the
Region may call for additional technical
support beyond the applicable
requirements of the modeling screen
described in section L&Lb. above, if
deemed necessary to protect air quality
in the Class I area.
i. Effect on Trade* ofSubsequentty-
Discovered Clean Air Act Problems:
Revisitation Considerations. If ambient
violations are discovered in an area
where EPA has approved a trade, or if
other violations of Clean Air Act
requirements are discovered in that
area, sources in the trade should be
aware that they are potentially subject
to requirements for additional emission
reductions, just as are all other sources
in the area.4'
••Woila»OBrcc*urvoK*d« a ndo. Ufca all other
•own*. My be avbtaci to reomnrauati lor
additional anuaaaon redneao**. neither pie»k»«»i
trade* *apro*ed by EPA or by MIIM nadir ESA-
apprvved ftfttnc rein. DOT enuaajoo redvetioa •
.credit* uMd a* part of a bobbU. offaei or nertnf
aeooo. should be tarauialed.
Sue* temjnaflou ooold occur, lot tsaeapk. what*
two tourcn ta « jir»n toura category w
Bouts establishedarpart-of a complete •
bubble application. Sources which are
already subject to binding compliance.
schedules should, howerer. be ewmre
that submittal or proposed spptoval of a
bubble application does not suspend
their obligation to comply wtth such
schedules. Such schedules and existing
SIP requirements remain applicable and
enforceable until the bubble Is finally
approved ud the schedule las been
modified accordingly.
Sources seeking trades ibould note
that they remain subject to enforcement
of existing (pre-tnde) SIP limit* until the
bubble is approved. EPA will UM the
same principles and proceduree for
deciding whether to initiste
enforcements actions in. these
circumstances as the Agency appik* to
any other source which is subject to a
proposed SIP revision.
Under established EPA policy.
regulated sources must be subject to an
applicable enforceable emission limit at
ill times. Accordingly, sources which
have approved bubbles wrth emission
limits effective st future date and which
are not in compliance with their pre»
trade limits, may be subject to
enforcement action, which could Include
penalties based on a failure to meet ;.*
pre-trade limits. Sources in such
situations may wish to minimize Uv
chance that capita] expenditures wi.|
required to meet pre-tnde limits, eitffl
by (a) agreeing to post-trade comphan
dates which are substantially similar ',
their pretrade compliance dates, or |b'
accelerating their compliance with pci
trade limits.
In accord with the general principle
that bubbles should be treated neither
more nor less stringently than other SL
actions, implementation of today's
policy will be neutral with respect to
EPA enforcement of pre-trade ermssior
limits. This means that EPA will not
specifically target for enforcement
action non-compliant sources seeking t
use a bubble either to come into
compliance or to restructure traditions
compliance. However, it also means tb
EPA will not withhold or defer
enforcement simply because a source ,:
seeking alternative emission limits
through a bubble. In exercising its
enforcement discretion. EPA will apply
the same considerations to
noncompiiaat sources which seek to
comply through bubbles as to-ihose
which do not.**
b. Exuasiant of Compliance
Slates may modify or exter
compliance schedules or deadlines f; A
Individual sources on a cas*-by-case •
basis in conjunction with bubble
approvals. Such modifications or
extensions must be consistent with the
requirements of 40 CFR 51.15.
Compliance schedules for sources m
nonattainment areas cannot be
extended beyond the statutory date for
attainment, and applicable compliance
milestones must be specified and met
for each year of the revised or extended
compliajice schedule. Because an
extension will usually require a revisior
of the state's progress demonstration.
such approvals must ordinarily be
submitted ss SIP revision*.
itraiefie*. in order to avoid yroUm doe (o doMOi*-
counnng.
•• Pmrteai oontavplaunf bubble* involving -nt
trad*) of emiMton reduction credit* from one fim :c
anotfee* ihouid ba aware that when in* crraus
btuc pro-Tided by the Ant firm art ihe muit of
•a i Mian (lout* with a future compliance d«:e. tne
obliaaoee to meal pre-tred* Unit* rmuini with me
aecond An (which w.tn
thoaa prartrada liroiul until tht time jsec-.iiec 'ot
UM fir* Dm to actenx tne rrtuctioni neceisary fo
coeaplianca) under the bubble The fin< :"irm i ianun
to acaUeve required bubble reduction* on icr.eoux
may ttxrtaflar retull m enforumeni ic:ion
(Including ca*h penalue*) «|imn thai firm
However, tfiia parafrtpb ihouid b* me ,n
comuocxioa witi dM aeneral pnnciple anic-ji«ied
above that EFA impkumniMion of ioaa> < ponc>
will b* nemr.1 with rr»peci to enforcerrf 11 of
pr*trao> Uinit*.
-------
43MB
/ VoL
233. /. Thread ay. Dsceahar 4, ifls* / Nodees
(uses, siue* wnkk
Wish
implement h**bbl**
compliance ex tensions; swat receive
EPA approval of the exiaasioa through
case-by-case SIP revisions. EPA will
evaluate the time extension portion* of
theac SIP rcviaion package* in
accordance with the Agency's normal
procedures for review of time
extensions, including consistency with
the Act's requirements of
expedittousness. reasonable further
progress, and attainment and
maintenance of ambient air quality
standards. Sources should be aware that
disapproval of the. tune extension
portion may result in disapproval of the
entire package (ie. both pott-trade
limits and tne time extension) or only
part of it depending on whether the
sta4* view* these component* of *•
proposed S™ revision ee sspsTSQts~-
In attainment anas, states may
contoiM to grant aniiyiame extensions
without casi-by-case SIP revision*, n
part of ouovfe approvals vuler a
rute* wQCu genenc compttTTffi^ uete*
extensions- may be granted in thcsv
areas owy u cPn hex approv^ed nv -- •
extension provvtov or tns> sjeDeno>ratt *
as adequate to comply wRh.tfi»OeB
Air Act.
ait
c ffitdutg Snfors9f>eift ^ct/ifns1. A
bubble caanof be approved for tit
individual esaissioa. tumtm wiriest i»
presently the select ef a federal ""
enforcement a«s!0»«r eutttaadtag
where necessary the 4
approves the proaosal sod Jury
compuauce SGBSQIBS iCsoay
"Federal «alorc«a«f*ctt«i or---' "• -
outstanding order" iochidas nottna if-
violation, civd actlou EJed«adw d*«*
Air Act s*cbon 113{b), crMml«c*lao«.
Hied under section lU^o). aeticssr
imposing ROnooBpiinae penaitts*
issued under H.I.lisa •>!>•>•• iiis»ill»e.
orders issued under ssetton 113(aJ. or
citizen suiU fil«4 UBsssutsaSKMi 3t4i»
which EPA ha* i
is subject to an i
judicial order.
This requirement i
bubble approvals vnder-geMrfe nstes;
provided the rule specifies an
»W
effective, unlit approved .hytfaar.
u^r -—11
they remain sabjtct t«
limits until sacfa approval
C Banking Ettiaaa Atdoctiaa Oedit*
Emission reductions mat an surplus.
permanent quantifiable and enforceable
can qualify as camion reduction
credits (ERCs) and be deposited in EPA-
approvabia banks. State* may establish
suck bank* by adopting appropriate
rules to govern whether and how
sources may own a*d hoW surplus-
emission reduction credit! for furore use
in bubble offset or netting
transactions.'1 Such banking rules may
encourage sowces Mr take measures to
reduce emissiens in advance of specific
need for ERCs. resulting in lower
transaction coats for those seeking . •
offsets; bubbles, or partners- for thm
transactions. States should however, be
aware that because an area's air qvaUty
situation or (he status «f Us Sff m«y-
change in the future. faMwv to a
for banked credits ineaussiua
inventories aa«d fer pianmng
n>y >es^t in-iosa at those gdsajst-
treated •«"*•**»*<• (•«. not iocMe4
tsr aay form SIP iovvtsasy waewtta)
tat trsasf sn anst wtdtdraxak.
•nMS«oi«».v»jl fSBUfeity aa pecfamed
byth«sU4»-assjss(oiiB>aa(xsai -
paonttiaf aMivitics. tiisroi banked
credits SMS! ssssM att As critsai* tl the
parrinikr SB» regulatory program ypdmr
which tbay an to ba> asad**
The fails wing seetiaBS aiie^mi both
munmom requirements hs state banking
rules which are appnvtbU by EPA. an*
ISSUM states should conskUr. Sutes
may adopt other approaches which
produce equivalent results.
t. Banking Rules Must Designate an
Administering Agency
Banking rules must identify the entity"
responsible far specific fcTw^"** While
the state will ordinarily be responsible
for vahfying.and proceMiag ERG
requests, allar part of this retnonsibtlity
may be dsJagated to other organization*.
Such ozgaaizatkm(s) outat poisess the
resourcaa and legal authority to
implement delegated activities
mmitfinn
mn«l ^yff f^nTii
ttals'fiy dm time they are backed'4
However, if a »oorca commiu to ~
prodnc* ••specific reduction an
tpedKct&Bsrfetfce fntara. a itate may
allom a cbadSoaal Amf*t*it
depoctis
most eaam tet m«f d» not
greassaS teosracsi
to those ERCs): notify pnaosetiv* ' •
purchasea of trw exMtaoce-of ERC« and
m tfa* 3ff bjr u*«tm^ «MB te
EmtnionrKiu
•ndima^il
iMi n Bin i LJLUMU BwnL
•Inn, r»«veK
UDBOi 4V^J%*«eRC»«r I
infotmil bankini nurhimia prw to • U»t»'»
idoytx»oi b^i«». -rrrn n^ti t^» „* rtiij i
(orptM. pwnannc.
ud (2) tk« IUM ihfMn itiu
not aimdr tmn •nuawd or odarwtet
rtcbiettoiH tnry difivirom^B* •^ilXujL-
' '
aurf. b< im tttu ib<( ivwMti irea SM
-------
Federal Register / Vol. 51. No. 233 / Thursday. December 4. 19M / Notices
compromise the state's ability to secure
through farther regulation any future
reduction* which may be needed.** In
•U cases the reduction must be made
federally enforceable by the time the
emissions trade which reiies upon it is
finally approved.
3. Possible Limitations on Use of ERCs
for New Source Permitting
Use of banked ERG* for new source
permitting must be consistent with
applicable regulations approved by EPA
under 40 CFR Parts 51 and 52. For
example, under 40 CFR S1.18(j)(3)(»Hc)
shutdowns that occur prior to
applications for a new source, permit
may ordinarily be used only ss offsets
for replacement facilities, and then only
if the permit application was filed within
one year after the shutdown occurred or
if the reduction occurred after August 7.
1877."
4. Source* Should Apply to Bank
Surplus Reductions As Soon As They
Decide To Make Them
For administrative simplicity and
accurate quantification, sources should
apply to bank reductions «» soon as
possible after they decide to make them.
The administering agency should
formally note the source's latent to.
make a surplus reduction, as expressed
in the application The state must then
verify whether and to what extent the
reduction actually occurred, sod must
make the reduction enforceable by the
time it is accepted for deposit
1 Procedures for Ranking Surplus
Emission Reduction* Should Be Defined
To speed approve} of trades and
provide greater certainty for potential
ERC creators snd users, state banking
rules should dearry specify which
proposed emission reductions can
qualify to be credited and banked, the
information required of *ource* to
substantiate their claim for credit sod
any required application forms. At
minimum, such rules must require firms
to maintain records (axa>. production
records snd record* of previous
provtdi inch iMorenca. Ta*» mtj.ltr nu>pl«. bw
eondlltoaal drpotiit from mm'ot caitfona* wfctdt
•ft Mbfoei to pmdlnf retvlattaa. AJUrnaOWy.
thoy may allow unrwtncitd caodftwaaJ >fcpo*4l»
but wnlt futon r*f»Utxm* ta Mrnta of RACT-
rqurvalant redaction* (t.f- *n at)* rtducaon IB
cufTMt actual rtanKmal r»tN«r than in term* of
fpvoAc count! (tnufiM or •miMton !•*•!•. TX«
laner approach can a»otd potsbla d*un* by MBM
aoura* Out no furthtr control ii required, wttte
iffinaiheaiut tnt alate't ability to epeo«tf»ae father
voionCMy redacooM at «»«JJ at ae/tdaia milled
one* See aectlon LCS.b below. Sum guy adopt
Mhttfcnir alianwive uoaflvt th«*a concert* >•
theit particular tituaaon.
•• See n. U above.
emission tests) adequate te determine
the pre- and post-reduction actual and
allowable values for emission rate.
capacity utilization, tad hours of
operation for the source generating the
ERC
A. Banking Rules May Establish
Ownership Rights
To prevent two entities from claiming
or attempting to use the same ERCs at
the same tune, state banking rule* may
specify who can own ERCs. For
example, while the source creating the
ERC will generally be its owner, the
slate could as part of its rule, reserve
ownership of certain classes of ERCs to.
itself or local governments. States
considering the latter course should.
carefully weigh whether such
reservations are likely to increase or
diminish future (eductions and air
quality management capabilities.
7. Banking Rules Must Establish an ERC
Registry or Its Equivalent
An ERC registry or equivalent
Instrument allowi states to track
ownership, use. and transfer of ell
banked ERCs. Banking rules may
provide the! no transfer of title to •
banked ERC will take affect until the
transaction is reflected at the registry. .
This Backing system cu awaa*car
potenti-al disputes, and preride e central
list of certified ERCs whidt ney be -
available to potential purchasers. Itcaa
also provide useful information for
quickly evaluating any proposed-us* of
a banked ERC
Information which may help evaluate
future proposed uses of s banked ERC
should be recorded at the tiase of He
creation and entered as pan of its
banking record. This information should.
Include the location of the sovce
creating the ERCs; whether the
reduction Is due to a shutdown or
curtailment the date (he reduction
occurred or will occur (to allow future
determination of the Mining of the
reduction with respect to tbe apptteetiea
for credit or its contemporsjieity for use-
in netting or, if s shutdown, as sn
offset): the source's stack parameters;
the temperature and wetocHy o/ its
phtmr particle aiie the existence of ajiy
hazardous pollutants: daily sad
seasonsi emission rates: ana1 other data
which might reasonably be deemed
neceisary under the requirements
described in sections LA. and LB. abovt
to evaluate future use.
To perform these tracking and
clearinghouse functions the ERC registry
must be scceasibie to the public. Subject
to confidentiality consideration*, states
should make copies of the ERC registry
available at convenient locauotu and
time*, end mey went to publlth -ir
otherwise issue a periodic tutrunsry <
beaked ERCs.
4. Possible Adjustment! to ERCs B
on Enforcement Considerations
Banking rules should stats what, if
any, changes may occur to ERO ».':«.-
they have been banked. Once an E7C
has been used by another sourc« to me-
a permit or other regulatory
requirement any violation of th»
'conditions under which thai ERC was
created should result in enforcement
against the source producing thai ERC
and not the source using it If s stale
attempted to enforce against the source
using purchased ERCs. a complex j«t of
third-party lawsuits would likely
tnaue."
9. Possible Adjustments to ERCs Based
on Ambient Attainment Considerations
To assure the validity of its
demonstration(s) of progress or
attainment e state with a banking ruie
must assume that all banked emissions
will ultimately be used. In evaluating
their ability to attain national standards.
such states must add to their emissions
inventory or measured ambient values
all unused banked reductions at the site
ell which they ware created. This u
enpeciaUy important for areas
requesting redessifiestion from
nonettainment to attainment. Failure
account for banked reductions as "in
sir" for SIP planning purposes would
ordinarily eliminate their use as ERCs
following a new SIP design or mveniory
year, due to double-counting.
Additional emission reductions may
be required from sources because of
thair area's failure to attain ambient
standards. b«c*U3« of an increment
violation, because of existing visibility
impairment or because new RACT
requirements are being imposed under t
SIP schedule. The existence of banked
ERCs must not interfere with states
ability to obtain these additional
reductions, and a state's rules on
treatment of banked ERCs must provide
it the necessary flexibility to meet Luture
requiremeBts. However, state banking
rales may address, within this criterion.
how banked ERCs will be treated if
•' Moreover. conflknn( pnvaie-perty it-emoii >o
aaa«ea »J tune It reeponalbiJfty for requirw
rtdncooaa could mak« the ourdMacd EfCi
uiMnrorcmbia aod revuA in mioration at -f.r
oeaxtnt aource'i ornBUl (hit>«r) tmiuion nrnm.
dw-to dauaa (hat (urphu reduction! ««rt yncucic
la nllajice on sovenuaent ml«< implying tfieir
nmtmt mme
-------
I VoL SI. No. 238 / Taiaada*. D
i lililiiniiiiiiiiiii IIIJM in lauuaerl l»
PSD increments. oc imprQve.«erifeiiitr.
Available options induce -
or Baseline Year CouM-be SKminated.
The use of ERCs generated prior to Uw
aesign or beseune year is unlikely to be
consistent with the state's
uemonstraiioa. unless the state included
«^»"Vipa actuxui. Alternatively.
states could pacaae new control
reqtirremesas ia term al eqaiweleat--
reducrion result! (eg, "RACT-
equivaietU" cedar ttnne; in aanattaiaoMat
areas) a-s. well aa specified conftal
techme.ues.or eoiissioa levels. Under
this approach, necessary adtLtieeai .
control requicemerFis would fee expfeealy
stated in (eras of adeiejoaal redaction
resporrsibili&e*. to be set without:
rpgard to poor trades.*4
c. Use or Deposit ofEHCs Could be
Temporarily Suspended Stales may
suspend either ERC use or future ESC
deposits until the state has eoeuniUed in.
its SIP to secure redactions sufficient te
reestablish progress or cure an
increment violation. Use of either type
of moratorium would be consistent wiflt.
air quality objectives while allowing
sources to retain and apesttualty use
(heir entire quantity ejfbtnked ERCs.
However, these optMSMMMybe
undesirable because o£becertainty
regarding the rr.oratorfonra start
duration, or potential interference with
user planning. This may be especially
(rue where a moratorium on ose (lather
man depoeitj is imposed after ERCs
have been banked
d. Acrosi-tberBeafd Ducovatiaf.
Und«r true ofMkm* tfce s t*tte ceeM
disctnna all ERCs in tire bank by the
same factor. For example, if a 10* . .
addition*! reduction ie required. Ecoos a
particular category ei mit
S1F» new denoostranoe, U
would dtecownl aU cvnauj
ERCs from tiaee type* olsowces by.
10%. Allhwtfji tie pua«rkre/ERCs h«Jd
by a firm will be reduced th« overall
supply of ERCs will decrease, while
demand wiH increase. Indeed other
sources may seek to purchase banked
ERCs from creating sources, in order to
meet die 10* redactions required of
them. Thus, the price per un't of
remaining ERCs it likitjr in many caern
lowercase.
This option is relatively
straightforward tor VOC or NO*. For
SO, or particotete matter now oalailed.
source-specific modeling woaie>
generally b* ntqvifed to aMecsti die
discount necessary te demons*!a*e
sttainmwit
Statea may adopt any of fees*
methods at accotneaodattni peealbta-
additional reductions, They ssay aiao<-
adopt any equivalent method wJucb. ..
achieves the same objectives,"
IL Trade* Covered by SUtaCaasric
Rulae . ...
This JBLttui fispLrittf MW
deverap CPAraffuuiasjtB gas
may be ei
requireffMHl'fee'eeoeea|eaflDt HF*1P'"*'•*•
A- General friacipJtrfar EvaJxatiqf,* !'H
Generic Rufi* • . . „
assures that emissions tra
reqaensif,
under
the Oeasj Aar Ac« will W evataetoeV
under state pwceilejee- t»*t a>s>
jujntjeiitly Fepbotete m of eratfaei 1»
guarantee that ejnieaiee t
under the rote w«1 not inferfefv
tunery ambtent artaiimwnt cod-
"TN« prvcedlni dltcuuioci fnwraAy
tht bank i* koiirH T «n HUnumm «•
. ta pnnwfy ao«Mi*
which ntrd bui lack ipprot «o dtmonun&at*. UM
for bubble purpows of btnked shutdown or otimt-
crcoits wn
nouct w^l i«iUrtv b* tMoni. Sot
be subiccl t« jp*u« progra
tn'
However. 10 order to accommodate puentai
additional tvdnelMm rvquncmntt m mhari
a manner oraaMtoi "UU b«nfc*.cuiaBi
pnor te (he IM«*AC« Ity £PA oltay la
SIP deflcirocr mandating fucfa requuuMiu& Stale*
may jl»o choute Ui tome h«re ali«»thj donrf ftr
ipKify jftMair itu> hi mbtpe} tm.
r foolBoi* Si abo»«.
iHnitt 'hr""tl imntintnf nr Below for seed fie
requirtraeiua lot genenc rules la
phaury nnHsHntaaieai areas wfttch
1. VOC or PfCX Trades
VOC or NGi&adeaapproved by
states u*d*r a generic rule that ususes
no-oaf mere em n af plicabie- biseUae-
emissrans m*yo«c« witbout ca»e-by-
case SIP ravtatons.
The ambteat imped* of VOC and NO,
emissions ace areewnde rather iban
source-specific. All such emissions
within a broad area are cocs.ucrea
coapacabla. ref&rdless oi piu^ie betani.
topoeraphy-or r»ia«ed ractors. Thus. th«
ambient nnpert of trades involving
emfsstonaof VOC or NO, from diiTereat
souraea witfasc aaca an ana wui by
defaution be «?«rr«iam to (hat of the
sum of app&abie beseiine emission
limit*.for the sources involved In the
trade.
PorVOC awrf NO, such pound-Tor-
pound trades may dierefore be rreated
under genenc rules as eqiul in ambient
effect where all sources icvolvec ;n LT«
-------
/ Voi 51 N
Daoejiber-4. 1M» /,Wotte«»
trade are-
rait fof dttctmkunf
outside. the demonatza&ea ana are
sufficiently dote tint t. pound- for-pound
trade cut be justified.**
In jcatraL generic VOC trading rulM
raiut require thai surface coating
emiitioiu bt calculated on a solids-
applied basis. The rule should also
specify the maximum time period over
which emissions may be averaged in an
acceptable com pita nee demonstration.
For VOC that averaging tine should not
exceed 24 bows onlMfl the rule contains
langoege approved by EPA thai
f xpressiy aHowv • levtgcr averaging
penod. See. AppaaKlx D below.
2. Paniculate. SO. CO or Pb Trade*
dueae of parttculalsw SO* CO atsd-
lead (Pb) trades may also be exempt.
from SIP revision if ttoey ate appeoved
under a slate getMricrule which aeauraa
that v«ltd SRC nee* cattswi ruaarasbiy
interfere wttb attaiitnieat and
ma mteHenee of avqaKry standards or
jeopardize PSD increments or
visibility."
D€ Matfaa Trade*. Trade* of
pswticuiaua. SO. CO«rte«xi(Pbt «*-
which appticarbte net basedm*
emissions" do not inerease and in
which tha SUB of the *""""T increases.
looking oaly at the increasing source*
total* l«t* than 25 tons per year (T7Y}
for pertinilalas.4Q.TPY foe suibsr
dioxide. 10&TPY for carbon monoxide1,
or Ofl TPY for lead (Pb). after applicable
control requrromeota. awry piucJuiJ
without modeling *nA case-by-casa 59
revisions. i3 gi"^ tradas will haw* al
1980)."
Lerei I Ttedm. H» enbievf israaet of
ptrtiaiita. SO*, CO or •% snietioak
depends on site epedfk (adore such a*
topography esw phme height wnich anr
ordinarily evehMted by emblem
dispersion modeHs^. Howwrar. if
epplicabto beeelbM emieeioaedo aol
most a de mu>tmi» uncMii oo locai1 air
quality because they will proda
increase m •mocaan*
emission* bemg shifted it not sigrriffcan*,
in ambient effect under aawciated EPA
•'• Th« d»
• ppl> lu ccftun NO, irt«
impiuio* due t
" The uabum
«Uborw«d m (hit 4na (o
10 NO. trade* LavoT^^ nifftfTity
au» IP eievjiH plumrs. S«« ft • above.
t'.\tik( oitwT mticai poitatum. CTA do** 001
dmiintir Bfmaiiamiw^n aran far lead. Hb
•uirs mu>i rrrivm lead rrW»*. «t il! «ih
10 ajaer* thai ttwy do net \ourftrt vttfi
*nd in Lr inn « ira laair at
t*ffl« tenenJ ur ba«w.
S». •. 31 *tx>»t.
Thj de minima Wvtl u «aT7Y f« NO.
incraaae, aources are located to the
saae immediate vtetaMy. and afl other
Level 1 requtoaaneats dtecussed b>
section LRliUJ ebove are met H can
reaaonabty be eesuined th*t "poond for
pound" tradea w4ii preduoe amWeo*
effects equivaieat to thoer waacfc
currendy approved air queJtty-ewdehi
would predict. Asa eaeuh. tadaa
meeting the criteria in secdon LBib42|
above may be treated in the same
manner is generic VOC and NO, trades.
and axempMd frost modeUng.asKi <
by-case SIP revisaoas.
EPA will noraulry approve }
relm that >' jfine "tame immeiateav
vicinity" ti up to 250 meters barwvan-
indivtdual emission sooicae iavoliast ta
a trad*.
Lerel II Trade* Other paftkaatka. -
exempted from
ravisioma if they
i lilinii in MI lin
ITTl li
prescnbed m*on*r. The stsW*
trading rule most apocify the'partiaaa*
refined model that wilibaampiojadiav ax
models iai tpecificd n'rniairrtnirrs-Ta
limit variakilUy in. ovxiAungyXBauitsvUui
rule must also reqaire atlaasta fuUyaafc
of meteorological data, idaati^t the tttea
for thai data, and specify procedure*. Cat.
selecting input data (e-g, wind ipaad.
stability class, source emisiioa sate)-
whidv are sufficiently defined to satisfy
replicability concerns.** In sooennuted
circumstances, a sufficieotty
conwrvatiTe screening model could be
specified as part of the generic rule. See
section I.B.l.b<3) above.
Level III Trades. Because of the wide
variability in data input and use
inherent in full-scale dispersion
modeling. Level III trade* must be
BJL4 »iW B below.
A»m«
Beeswemaeese- trade* eew»et reediry,
be addicwed fa i repficebfr-itanjrer.'tire
following may net to genera* fee
exempted onder generic rates from the
requtrement for case-by-case SIP
revUrionsc
' a. Particnrate. SOi CO or Pb trades
requiring full-scale dispersion modeling
under Level m (see section I.B.l.b.(4)
"Thu pvaamph »bouW QCT ba caaimad la
unplv :ha> ntw »urcci tiai modif cmitonj n««d aM
me*' ill Applicable rrqutnmcnu. vncluding ttaaa
«p«cifird under 40 CKR 51.11 or paralM EPA-
approved naia nlea.
•Brcauae today i nouca canfinu lha- authont)r of
1111*1 ge*aaatl. b* exempted unoe*
gaairio raiaa freea ihavreqwmment for
case' bsHTSte SUP revisions: (1) Trades
involving EKCs from mobile source
measure*. (ZJ.tnda uvorving emuMon
sources'which ant the subject erf an
enforcement action manifested by
issuance of a notice of violation, an
adnurusttasrva order or section 120
actuja. at the filias>of a judicval
coatpiaiDt. tastes* titt rule specifits an
lerraio (natavut rMi^it dan «he c*vtic-»t v«ci
heifMoitaMCD*. For b«oo*» pojumn. in.t
<4-r.-,n«» if tfpljcAiMa aa^>' to towcct wnm an
intraaa* a««r batvline rnuaaiooa
•'Generally. etid« from the atrr;!ion n«"u
above. uvalM in»o<»ii^ miiipt»Ji trmir. i~ c.—'^pd
above m*J n«H b« pini-a»i»i1 under (Wfirnr -n«
Howevec. auiaa may Miaa ledrn'oe «na >uac\ii
for EPA approval addiDaaal ana-sp«ufic c-ttru
for dpt»rmtmiruj when md« uivohinj u>mpiex
leir^mdo no»yrCT»a uiubKmt of peitnini ri-rrt
impaction. and IfcavafaM raar ba tppraved •_»<:»
(enenc rvlm aa da maiMM. Lrr«{ I or Levti U
trade* uatng a flat terrain BedeL These aoc:i:onjj
cni«rtt wrjuU induda tuch frclorj «> luurr. I..jv
and irmiaaKuvnM. diManca between Hack jna
elev.ited (eauirea. rile of topofr»e.iim r.st =.-n
oiheir uiaatdcrauwi* »tiea o«y o* .perucn.cr fur
a particular geoartprnc area. Slain «r» «ncoi..-aair.j
to wari wnh EPA lodalernufta whtiher »rf-«or.c
ho« »r«v«-ti addinonai cntena can h< dtvc.dci-ci «in
ipviM w,S»a *cu- au*. Unlaaa EPA ha. fc.rr ,!U
appraMd «ick addiiianai-cnkm* (or « I'xn
et^r.fruc aran *» pan of a fananc r»te. >u,. =
nwat apply theg*n»ral -eilrretionj >'ji*d .,r^,w-
when procei»tot »»d