EPA Acid Rain Program 2002 Progress Report CLEANAIR MARKET PROGRAMS November 2003 ------- This 2002 Progress Report updates the key Acid Rain Program data reported in the 2001 Progress Report. This update includes: * Emission levels * Compliance with the SO2 and NOX components of the program * SO2 allowance market information * Status and trends in acid deposition and related air quality A Progress Report is published annually by EPA to update the public on compliance with the Acid Rain Program, the status of implementation, and our progress toward achieving our environmental goals. Detailed unit-level emissions data are available on EPA's Clean Air Markets website at http://www.epa.gov/airmarkets/ 2002emissions.pdf. A new query tool that provides easy access to a variety of EPA emissions data is available at http://cfpub.epa.gov/gdm. For more information on the Acid Rain Program, including information on SO2 and NOX emissions, acid deposition monitoring, and the environmental effects of acid deposition, please visit EPA's Clean Air Markets website at http://www.epa.gov/airmarkets. EPAAcid Rain Program 2002 Progress Report EPA-430-R-03-011 Clean Air Markets Division Office of Air and Radiation U.S. Environmental Protection Agency November 2003 \ Ul (9 / MARKET PROGRAMS ------- The Acid Rain Program: Overview Acid deposition, more commonly known as acid rain, occurs when emissions of sulfur dioxide (SO2) and nitrogen oxides (NOX) react in the atmosphere (with water, oxygen, and oxidants) to form various acidic com- pounds. Prevailing winds transport the acidic compounds hundreds of miles, often across state and nation- al borders. These acidic compounds then fall to earth in either a wet form (rain, snow, and fog) or a dry form (gases and particles). The acidic compounds (including small particles such as sulfates and nitrates) cause many serious health and environmental effects. These pollutants impair air quality and damage public health, acidify lakes and streams, harm sensitive forest and coastal ecosystems, degrade visibility, and accelerate the decay of building materials, paints, and cultural artifacts such as buildings, statues, and sculptures nationwide. The pollutants that cause acid rain often cause human health and environmental impacts far away from where they are emitted. This long-range transport makes it critical to reduce emissions that occur over large geographic areas. The Acid Rain Program was established under Title IV of the 1990 Clean Air Act amendments. The program requires major reductions of SO2 and NOX emissions, the pollutants that cause acid rain. Using a market-based "cap and trade" mechanism, the program sets a permanent cap on the total amount of SO2 that may be emitted by electric power plants nationwide. The cap is set at about one-half of the amount of SO2 these sources emitted in 1980, and the trading component allows flexibility for individual combustion units to select their own methods of compliance. The program also sets NOX emission limitations for certain coal-fired electric utility boilers with the objective of achieving and maintaining a 2 million ton reduction from projected NOX emission levels that would have been emitted in 2000 without implementation of Title IV. The Acid Rain Program is comprised of two phases: Phase I applied primarily to the largest coal-fired sources from 1995 through 1999 for SO2 and from 1996 through 1999 for NOX. Phase II for both pollutants began in 2000 and applies to thousands of combustion units generating electricity nationwide. The Acid Rain Program's ultimate objective is to protect the environment and improve human health by reducing SO2 and NOX emissions from power generation sources. These emission reductions benefit the nation by: * Improving air quality and protecting public health * Restoring acidified lakes and streams so they can once again support fish and other aquatic life * Improving visibility, especially at scenic vistas in National Parks * Reducing damage to sensitive forests, such as those in the Appalachian Mountains and in certain high- elevation Western regions * Reducing damage to nitrogen-sensitive coastal waters along the East and Gulf Coasts * Protecting historic buildings and monuments from degradation ------- SO2 Emission Reductions There were 3,208 electric generating units1 that were subject to the SO2 pro- visions of the Acid Rain Program in 2002, the third year of Phase II. Acid Rain Program sources achieved a total reduction in SO2 emissions of approxi- mately 41% compared to 1980 levels (35% compared to 1990 levels). Com- pared to 2001 levels, these sources reduced their SO2 emissions by almost 400,000 tons. Figure 1 shows the trend in SO2 emissions since 1980 for all affected sources. 1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 • Phase I sources D Phase II sources D all sources • •i allowances allocated for that year The electric power generation industry is by far the largest single source of SO2 emissions in the U.S., account- ing for approximately 69% of total SO2 emissions nation-wide (National Emis- sion Inventory 2001 www.epa.gov/ttn/chief/trends/ index.html). Emissions from each individual unit, as well as an additional 273 units which were retired or not yet operating, are listed in Appendix A of this Report, avail- able on EPA's Clean Air Markets website at www. epa.gov/airmarkets/cmprpt/arp02/index.html. Under the Acid Rain Program, allowances (i.e., authorizations to emit SO2) allocated in a particular D Allowances allocated that year • Unused allowances from previous year (Bank) ^ Emissions from affected sources Figure 2. SO2 Allowance Bank, 1995 through 2002. Source: EPA Figure 1. SO2 Emissions from Acid Rain Sources, 1980 through 2002. Source: EPA year to each unit are determined by several provisions of the Clean Air Act. For the year 2002, a total of 9.54 million allowances were allocated. Adding these allowances to the unused allowances carried over (or banked) from prior years, a total of 18.84 million allowances were available for use in 2002. Sources emitted 10.2 million tons in 2002, 650,000 tons more than the allowances granted in 2002 but far less than the total allowable level. For the third year in a row the number of allowances in the bank declined. As shown in Figure 2, the bank was reduced by 650,000 allowances in 2002. Over time the bank is expected to continue to be depleted as sources use banked allowances to continue to comply with the stringent Phase II requirements. Fig- ure 3 explains in more detail the origin of the allowances that were available for use in 2002. In addition to the significant reductions from the electric power generation sector under the Acid Rain Program, reductions in SO2 emissions from other sources, including smelters and sul- furic acid manufacturing plants, and use of clean- er fuels in residential and commercial burners, have also contributed to the 39% decline of SO2 emissions from all sources since 1980 (National Emission Inventory www.epa.gov/ttn/chief/ trends/index.html). In this report, the term "unit" means a fossil-fuel fired combustor that serves a generator that provides electricity for sale. The vast majority of SO2 emissions affected by the program come from coal-fired generation units, but oil and natural gas units are also included in the program. ------- Type of Allowance Allocation Number of Allowances Explanation of Allowance Allocation Type Initial Allocation 9,190,3651 Initial Allocation is the number of allowances granted to units based on the product of their historic utilization and emissions rates (performance standards) specified in the Clean Air Act and other provisions of the Act. Allowances for Substitution Units 2,925 A lawsuit settlement allowed for a small amount of allowances to be allocated for Substitution Units in 2002 instead of an earlier year during Phase I. Allowance Auctions 250,000 Allowance Auctions provide allowances to the market that were set aside in a Special Allowance Reserve when the initial allowance allocation was made. Opt-in Allowances 99,188 Opt-in Allowances are provided to units entering the program voluntarily. There were 11 opt-in units in 2002. Total 2002 Allocation 9,542,478 Banked Allowances 9,300,138 Banked Allowances are those held over from 1995 through 2001, which can be used for compliance in 2002 or any future year. Total 2002 Allowable 18,842,616 1 Note: The total year 2002 initial allocation was 9,191,897. 1,532 allowances were deducted as offsets for year 2001 reconciliation, and for other reasons, such as surrenders due to enforcement actions prior to the 2002 reconciliation. Figure 3. Origin of 2002 Allowable SO2 Emission Levels. Source: EPA NOV Emission Reductions Title IV of the 1990 Clean Air Act amendments authorizes NOX emission reduction requirements only for coal-fired Acid Rain Program affected units and they are to be set as annual emission- rate limitations for different types of utility boilers. The performance objective for the NOX program component has been to achieve and maintain a 2 million ton reduction from these sources relative to the NOX emission levels projected to occur in 2000 absent the Acid Rain Program. (This objec- tive is consistent with guidelines in the statute and legislative history on the total NOX emissions reduction intended by Congress under Title IV.2) The goal was achieved in 2000: total NOX mass emissions for coal-fired electric utility units affect- ed by the NOX program component had been reduced to 4.5 million tons (2.9 million tons below program projections, or 2.2 million below an early forecast). Total NOX mass emissions for all Acid Rain Program affected units were 3 million tons below the projected level without implementation of Title IV (see 1990 • NOX Program affected sources D Title IV sources not affected by NOX ••• Projected emissions without Title IV Figure 4. NOX Emissions from Acid Rain Sources, 1990 through 2002. Source: EPA Figure 4). Emissions from those sources in 2002 were even less - 2.2 million tons (or 33%) below 1990 emissions levels, due to some degree to added state controls primarily in the Northeast See discussion and emission reduction projections in preamble to the final Phase II Acid Rain NOX Emission Reduction Rule (61 FR 67120, December 19, 1996) and supporting Regulatory Impact Analysis (Docket A-95-28, V-B-1, October 24, 1996). ------- Total Allowances Held in Accounts as of 3/1/2003 (1995 through 2002 Vintages)1 18,847,494 Unit Accounts 14,080,907 General Accounts2 4,766,587 Allowances Deducted for Emissions (1995 through 2002) 10,193,684 2003 Penalty Allowances Deducted 33 Banked Allowances 8,653,843 Unit Accounts 3,887,256 General Accounts3 4,766,587 'The number of allowances held in the Allowance Tracking System (ATS) accounts equals the num- ber of 2002 allowances allocated (see Figure 3) plus the number of banked allowances. March 1, 2003 represents the Allowance Transfer Deadline, the point in time at which unit accounts are frozen and after which no transfers of 1995 through 2002 allowances will be recorded. The freeze on these accounts is removed when annual reconciliation is complete. includes 40 allowances deducted from Opt-in sources for reduced utilization. 3General accounts can be established in the ATS by any utility, individual or other organization. Figure 5. SO2 Allowance Reconciliation Summary, 2002. source: EPA Inventory, www.epa.gov/ttn/chief/trends/ index.html). SO2 Program Compliance As in previous years, compliance with the Acid Rain Program continues to be extraordinarily high - nearly 100%. A total of 10.19 million allowances were deducted from sources' accounts in 2002 to cover emissions. A single unit was short a total of 33 allowances to cover its emissions for the 2002 com- pliance year. Thirty-three year 2003 allowances were taken from this unit as "offsets" and are included in the total number of used allowances for 2002. In addition to the offsets, the operator of this unit was assessed an automatic monetary penalty totaling over $90,000.3 Figure 5 displays these allowance deductions, as well as the remaining bank of 1995 through 2002 allowances. These reductions have been achieved while the amount of fuel burned to produce electricity, as measured by heat input, increased 30% since 1990. Without further reductions in emissions rates or institution of a cap on NOX emissions, however, NOX emissions from power plants may rise with increased use of fossil fuels in some areas of the country. NOX emissions come from a wide variety of sources including those affected by the Acid Rain Program. NOX emissions from electric power generation account for approximately 22% of NOX emissions from all sources. NOX emissions from transportation sources are 55% of all NOX emissions. Nationally, total NOX emissions have decreased 12% from 1990 through 2001. NOX emissions from transportation sources decreased 14%, but NOX emissions from heavy duty vehicles increased by 10%. The emission decreases from electric power generation and other fuel combus- tion sources are due in part to a variety of federal and state emission reduction programs (including the Acid Rain Program, the Ozone Transport Commission NOX Budget Trading Program, and anticipation of the NOX SIP call) and federal enforcement actions (National Emissions Under the Acid Rain Program, units are required to measure and record emissions using Continuous Emis- sions Monitoring Systems (GEMS) or an approved alter- native measurement method. One important measure of accuracy of a GEMS is the relative accuracy test audit, and all units continued to operate with high levels of accuracy in 2002. Addition- ally, the percent monitor data availability (PMA) exceeded 99% for coal-fired units and approximately 98% for oil and gas-fired units. PMA is a method to determine GEMS reliability - both accuracy and relia- bility measures ensure that the actual amount of emis- sions is being captured. And in 2002, for the third con- secutive year, 100% of affected sources were reporting hourly emissions electronically. New in 2003, the Acid Rain Program is employing an electronic audit capability. Since the program's incep- tion in 1995, the emissions data - continuously report- ed by sources, verified and recorded by EPA, and posted for public consumption on the Internet - has been among the most complete and accurate data ever collected by EPA. New audit capabilities include A source that does not hold enough allowances in its unit account to cover its annual SO2 emissions has "excess emissions" and must pay a $2,000 per ton automatic penalty in 1990 dollars. The $2,000 per ton penalty is adjusted annually for inflation, so the year 2002 penalty was $2,849 per ton. ------- Compliance Option Number of Units Standard Emission Limitation 150 Early Election 273 Emissions Averaging 631 Alternative Emission Limitation 26 Total 1.0801 The total does not equal 1,048 because 25 units have both early election and emissions averaging compliance plans, and 7 units have both AEL and emissions averaging compliance plans. Figure 6. Compliance Actions in the NOX Program, 2002. Source: EPA software that performs hourly checks to catch errors, miscalculations, and oversights in monitoring and reporting systems, thereby helping to ensure the com- pleteness, high quality, and integrity of the emissions data. The electronic audit highlights a greater number of potential 'red flags' that require additional verifica- tion - some units may need to surrender additional allowances for periods when monitors were not pro- viding fully-validated data. These conservative 'miss- ing data' procedures help ensure that emissions are never understated. The result is an improved body of information about emissions. To date, 80% of the total cumulative SO2 emissions data for Acid Rain units was electronically audited. This audit included comprehensive checks for relative accuracy, lin- earity, and bias adjustment. NOX Program Compliance In 2002, 1,048 of all Acid Rain Program units were required to meet NOX emissions limitations. Of these coal-fired units, 1,047 NOX units met their NOX emis- sions limits through compliance with their respective NOX compliance plans. Only one unit failed to meet its NOX emissions limit in 2002. That unit had excess NOX emissions of 47 tons and was assessed a monetary penalty of $134,000 (47 tons x $2,849 per ton penalty). Detailed compliance information by unit can be found in Appendices B1 and B2. These appendices are available on EPA's Clean Air Markets website at www.epa.gov/ airmarkets/cmprpt/arp02/index. Figure 6 summarizes the compliance options chosen for NOx-affected units in 2002. Averaging was the most widely chosen compliance option; 55 averaging plans involving 631 units were in place in 2002. SO2 Allowance Market The flexibility provided by the Acid Rain Pro- gram enabled the 3,208 units subject to the SO2 requirements in 2002 to pursue a variety of compliance options. Sources have met their SO2 reduction obligations by options including installing scrubbers, switching fuels, changing practices or procedures to improve energy effi- ciency, and buying allowances. The presence of the allowance market has given some sources the incentive to reduce their SO2 emis- sions below the level of their allowance alloca- tion in order to bank their allowances for use in future years or to sell them to other sources. Other sources have been able to postpone or reduce expenditures for control by purchasing allowances from sources that controlled below their allowance allo- cation level. The flexibility in compliance options is possible because strict monitoring requirements for all affected units ensure one allowance is surrendered for every ton of SO2 emitted. The program's flexibility significantly reduces the cost of achieving these emis- sions reductions as compared to the cost of a techno- logical mandate or fixed emission rate. The marginal cost of compliance - the cost of reducing the next ton of SO2 emitted from the power sector - is reflected in the price of an allowance. Emission reduc- tions continue to cost less than anticipated when the Clean Air Act Amendments were enacted and this is reflected in the price of allowances. Allowance prices for 2002 continued the downward trend that started in the second half of 2001. Prices hovered in the $170/ton range early in 2002 and de- creased slightly during the summer months, ending the year in the $130/ton range. Prices stabilized at historical averages in 2002 after the more stringent limits in Phase II resulted in higher average prices in 2001 (See Figure 7). Some market observers believe lower-than-expected allowance prices during the first several years of the program were due prima- rily to lower than expected compliance costs and larg- er than expected emissions reductions, which increased the supply of allowances and put downward pressure on prices. ------- $250 $200 $150 $100 $50 $0 1/95 1/96 1/97 1/98 1/99 1/00 1/01 1/02 1/03 Figure 7. SO2 Allowance Price Index. Source: Monthly Price Reports from Cantor Fitzgerald Environmental Brokerage Services those trades submitted by authorized account representatives for private accounts. In Decem- ber 2001, parties began to use the On-line Allowance Tracking System (OATS) developed by EPA to allow transfers to occur online. Dur- ing 2002, OATS recorded 4,654 transfers elec- tronically over the Internet. All official allowance transactions, as well as data on account balances and ownership, are posted and updated daily on the Clean Air Markets Division's website (www.epa.gov/air- markets) in order to better inform trading par- ticipants of the status of the market. Cumula- tive market statistics and analysis are also available. In 2002, over 5,700 allowance transfers affecting roughly 21.4 million allowances (of past, current, and future vintages) were recorded in the Allowance Trans- fer System, the accounting system developed by EPA to track holdings of allowances. Of the allowances transferred, 11.6 million, or 54%, were transferred in economically significant transactions (i.e., between economically unrelated parties). The majority of the allowances transferred in economically significant transactions were acquired by power companies. Fig- ure 8 shows the volume of SO2 allowances transferred under the Acid Rain Program since official recording of transfers began in 1994. Figure 9 shows the cumula- tive trading volume of SO2 allowances transferred under the Acid Rain Program. Almost 224 million allowances have been traded since 1994, with 70% of ' Between Economically Related Organizations 1 Between Economically Unrelated Organizations Figure 8. SO2 Allowances Transferred under the Acid Rain Program. Source: EPA NOX Emissions Limits Instead of using a cap with allowance trading to achieve NOX emissions reductions, the Acid Rain Pro- gram establishes NOX emission limitations (Ib/mmBtu NOX) for coal-fired electric generation units. The Acid Rain Program NOX regulation (40 CFR part 76), establishes NOX limits for Group 1 boilers (dry bot- tom wall-fired and tangentially-fired boilers), as well as Group 2 boilers (cell burners, cyclones, vertically-fired, and wet bottom boilers). Figure 10 shows the number of NOX affected units by boiler type and the emissions limit for each boiler type. The owners and operators of the 1,048 units subject to NOX emissions limitations in 2002 were required to choose at least one NOX compliance plan (described below) to indicate how each unit will comply with its NOX limit: * Standard Limitation. A unit with a stan- dard limit simply meets the applicable individual NOX limit prescribed for its boiler type under 40 CFR 76.5, 76.6, or 76.7. * Early Election. Under this compliance option, a Phase II Group 1 NOX affect- ed unit met a less stringent Phase I NOX limit beginning in 1997, three years before it would normally be subject to an Acid Rain NOX limit. In return for accepting a NOX limit three years earli- er than would normally be required, an ------- early election unit does not become subject to the more stringent Phase II NOX limit until 2008. * Emissions Averaging. A company can meet its NOX emissions reduction requirements by choosing to make a group of NOX affected boilers subject to a group NOX limit, rather than meeting individual NOX limits for each unit. The group limit is established at the end of each calendar year, and the group rate for the units must be less than or equal to the Btu-weighted rate at which the units would have been limited had each been subject to an individual NOX limit. * Alternative Emission Limitation (AEL). A utility can petition for a less stringent AEL if it proper- ly installs and operates the NOX emissions reduction technology prescribed for that boiler, but is unable to meet its standard limit. EPA determines whether an AEL is warranted based on analyses of emissions data and infor- mation about the NOX control equipment. 1994 1995 1 By Quarter (Cumulative) Figure 9. Cumulative SO2 Allowances Transferred through the End of 2002. Private Transfers: these transfers were submitted by authorized account representatives for private accounts. (EPA does not attempt to determine what constitutes an actual trade where money is exchanged). EPA/Market Transfers: most of these transfers involved movement of allowances from EPA accounts to market accounts (e.g., auctions, Phase I extension allowances, substitution allowances, etc.) Status and Trends in Acid Deposition and Related Air Quality The emission reductions achieved under the Acid Rain Program have led to important environmental and pub- lic health benefits. These include improvements in air quality with significant benefits to human health, reduc- tions in acid deposition, the beginnings of recovery Standard Emission Number Coal-Fired Boiler Type Limit (Ib/mmBtu) of Units Phase I Group 1 Tangentially-fired Phase I Group 1 Dry Bottom Wall-fired Phase II Group 1 Tangentially-fired Phase II Group 1 Dry Bottom Wall-fired Cell Burners Cyclones > 155 MW Wet Bottom > 65 MW Vertically-fired Total 0.45 0.50 0.40 0.46 0.68 0.86 0.84 0.80 135 130 306 312 37 56 31 41 1,048 Figure 10. Number of NOX Affected Units by Boiler Type. Source: EPA from acidification in fresh water lakes and streams, improvements in visibility, and reduced risk to forests, coastal waters, and materials and structures. To evaluate the impact of emissions reductions on the environment, scientists and policymakers use data col- lected from long-term national monitoring networks such as the Clean Air Status and Trends Network (CASTNET) and the National Atmospheric Deposition Program (NADP). Deposition and air quality mon- itoring data from these and other air quality monitoring net- works can be accessed on or through the CASTNET website at http://www.epa.gov/castnet. Data collected from these networks show that the decline in SO2 emissions from the power industry has decreased acidic deposition and improved air quality. The decline in NOX emissions has not been as large and the environmental improvements are not as widespread. ------- Figure 11. Mean Wet Sulfate Deposition 1989 through 1991. Source: National Atmospheric Deposition Program Note: Points on map represent location of monitoring sites Wet SO42- Figure 12. Mean Wet Sulfate Deposition 2000 through 2002. Source: National Atmospheric Deposition Program This 2002 Progress Report highlights changes in dep- osition and certain air quality parameters. As data become available, new information on ecosystems and human health impacts will be included in subsequent progress reports. * SO2 concentrations in the atmosphere have decreased since 1990. In 2002, concentrations in the Northeast and Mid-Atlantic were 6-12 micro- grams per cubic meter (ug/m3), as much as 8 ug/m3 lower than in 1990. * Sulfate concentrations in the atmosphere have decreased since 1990 as well. In 2002, concentra- tions in most of the East were 3-5 ug/m3, as much as 4 ug/m3 lower than in 1990. * Wet sulfate deposition has decreased significantly since 1990. In 2002, deposition in most of the Northeast and Midwest was 10-20 kilograms per hectare per year (kg/ha/yr), as much as 12 kg/ha/yr lower than it was in 1990. * Wet nitrate deposition has decreased regionally although nitrate concentrations in precipitation have remained unchanged or increased in some areas. Scientists have documented that both wet and dry sulfur deposition (and the actual acidity of rain) have declined with reductions of SO2 emissions over a large portion of the eastern U.S. following implementation of Title IV. A strong, near linear correlation, between large scale SO2 emissions reductions and large reductions in sulfate con- centrations in precipitation has been noted for the North- east, one of the areas most affected by acid deposition. Some of the greatest reductions in wet sulfate deposition occurred in the Mid-Appalachian region, including Mary- land, New York, West Virginia, Virginia, and most of Pennsylvania (see Figures 11 and 12). Wet sulfate dep- osition decreased more than 8 kg/ha from rates observed throughout the early 1990s in much of the Ohio River Val- ley and Northeastern U.S. Other less dramatic reductions were observed across much of New England, portions of the Southern Appalachian Mountains and in the Midwest, most notably Indiana and Illinois. Figures 11 and 12 show the mean wet sulfate deposition in the continental U.S. between 1989 through 1991 and 2000 through 2002. The highest rates of sulfur deposition have been observed in the areas containing the highest SO2 emissions - the Midwest and the East. Most areas in the East have had reductions in sulfate deposition since 1989 through 1991. A main reason for reduced concentrations of sulfate in precipitation in the Northeast is a reduction in the long- range transport of sulfate from emission sources locat- ed in the Ohio River Valley. The reductions in sulfate documented in the Northeast, particularly across New England and portions of New York State, were also affected by SO2 emission reductions in eastern Cana- da. Concurrent with these sulfate reductions were sim- ilar reductions in precipitation acidity, expressed as hydrogen ion (H+) in concentrations (NADP). For ambient sulfate concentrations, both the size of the affected region and magnitude of the highest concentra- tions were dramatically reduced following implementation of Title IV Sulfate concentrations decreased up to 3 ug/m3 in the eastern U.S. from the levels of 5-8 ug/m3 ------- Figure 13. Mean Sulfate Concentration 1989 through 1991. Source: CASTNET Figure 14. Mean Sulfate Concentration 2000 through 2002. Source: CASTNET observed in the early 1990s (see Figures 13 and 14.). The largest decreases were observed along the Ohio River Valley. Analyses of regional monitoring data from CASTNET show the geographic pattern of SO2 and airborne sulfate in the eastern U.S. Three-year mean annual concentra- tions of SO2 and sulfate from a set of 34 CASTNET long- term monitoring sites were compared from 1989 through 1991 and 2000 through 2002. In 1989 through 1991, prior to implementation of Phase I of Title IV, the highest ambi- ent concentrations of SO2 in the East were observed in western Pennsylvania, and along the Ohio River Valley. The highest ambient sulfate concentrations, greater than 7 ug/m3, were observed in this area and in northern Alabama. Most of the eastern U.S. experienced annual ambient sulfate concentrations greater than 5 ug/m3. During the late 1990s, following implementation of Phase I of the Acid Rain Program, dramatic regional improvements in SO2 and sulfate ambient concentra- tions were observed at CASTNET sites throughout the eastern U.S. Ambient concentrations of SO2 in 2000 through 2002 decreased up to 8 ug/m3 in the Northeast and Mid- Atlantic regions compared to concentrations of 10-20 ug/m3 observed in the early 1990s (see Figures 15 and 16). The largest decreases in ambient SO2 con- centrations were noted in high emissions and concen- tration areas (e.g., vicinity of Chicago and throughout Indiana, Ohio, Pennsylvania, Kentucky, and West Vir- ginia). The highest SO2 concentrations observed in the rural parts of the United States are now concentrated in eastern Ohio and southwestern Pennsylvania. Figure 15. Mean Sulfur Dioxide Concentration 1989 through 1991. Source: CASTNET Figure 16. Mean Sulfur Dioxide Concentration 2000 through 2002. Source: CASTNET 9 ------- 244 Sites NAAQS 90% of sites have concentrations below this line / 10% of sites have concentrations below this line 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 1983-02: 54% decrease 1993-02: 39% decrease Fig. 17. SO2 Annual Arithmetic Average 1983 through 2002. Source: Latest Findings on National Air Quality 2002 Status and Trends, EPA Nationally, average SO2 ambient concentrations have decreased 54% from 1983 through 2002 and 39% over the more recent 10-year period 1993 through 2002 (see Figure 17 regarding National Ambient Air Quality Standard). Reductions in SO2 concentrations since 1990 are due, in large part, to controls imple- mented under EPA's Acid Rain Program. Figures 18 and 19 show mean wet nitrate deposition in the continental U.S. between 1989 through 1991 and 2000 through 2002. Large reductions in wet nitrate deposition were observed in the northeastern U.S. and Michigan. Figures 20 and 21 show mean wet nitrate concentrations in the continental U.S. between 1989 through 1991 and 2000 through 2002. Wet nitrate concentrations across the U.S. have gen- erally remained the same, or increased in some regions. Unlike sulfate concentrations, sharp declines Fig. 18. Mean Wet Nitrate Deposition 1989 through 1991. Source: National Atmospheric Deposition Program Fig. 19. Mean Wet Nitrate Deposition 2000 through 2002. Source: National Atmospheric Deposition Program Fig. 20. Mean Wet Nitrate Concentrations 1989 through 1991. Source: National Atmospheric Deposition Program Fig. 21. Mean Wet Nitrate Concentrations 2000 through 2002. Source: National Atmospheric Deposition Program 10 ------- Fig. 22. Mean Ambient Nitrate Concentrations 1989 through 1991. Source: CASTNET Fig. 23. Mean Ambient Nitrate Concentrations 2000 through 2002. Source: CASTNET in wet nitrate concentrations have not been observed in the Northeast, even though wet nitrate deposition does appear to be substantially lower there. The decreases in wet nitrate deposition observed in 2000 through 2002 appear related to lower precipitation lev- els over those same years. In addition, there are no observable broad-scale reductions in total nitrogen deposition (wet + dry) in the U.S. 1989 through 2002.* The highest levels of total nitrogen deposition were recorded in the Midwest and Eastern U.S. 2000 through 2002, although several monitoring stations in the west observed high levels of total nitrogen deposi- tion. In the west, southern California in particular, dry deposition makes up a greater percentage of the total. Acid rain sources account for only 22% of nationwide NOX emissions, so emissions trends in other source categories, especially agriculture and mobile sources, also affect air concentrations and deposition of nitrogen. Because NOX emissions from the power sector are not capped throughout the country annually these emis- sions may grow as demand for electricity continues to increase. However, an environmental signal is expected over the next decade due to the implementation of the OTC NOX Budget Trading program, NOX SIP call and several state programs such as Texas, North Carolina and several mobile source NOX controls. Continued monitoring of nitrogen deposition and air quality will be particularly important to track and assess the magnitude of the signal. Figures 22 and 23 show mean ambient nitrate con- centrations in the eastern half of the U.S. in 1989 through 1991 and 2000 through 2002, respectively. Data from CASTNET suggest ambient nitrate concen- trations have remained unchanged and have even increased in some regions, with the highest ambient nitrate concentrations in 2000 through 2002 greater than 4 ug/m3 recorded in the upper Midwest. Based on data compiled annually by National Atmospheric Deposition Program/National Trends Network (NADP/NTN) http://nadp.sws.uiuc.edu and Clean Air Status and Trends Network (CASTNET) www.epa.gov/castnet 11 ------- Did you know? Environmental contamination from mercury and acidification are linked. While many questions remain about how mercury moves from atmospheric deposition through the environment into fish, for several years scientists have recognized one thing: often, mercury levels in fish cor- relate with the presence of sulfate in the ecosystem. The species of mercury that forms in the envi- ronment and bio-accumulates in fish - methylmercury - causes neurological and other problems in humans who consume those fish. Sulfate is an indicator of acid deposition, one of the main ions whose presence in lakes and streams indicates that those waters are suffering from acidification. The amount of methylmercury in fish appears to depend in most environments on two primary things: the amount of mercury entering the ecosystem and the rate of the processes that transform it into methylmercury. Mercury contamination and sulfur are linked in both these aspects. Coal-fired power plants are a primary atmospheric source of both sulfur dioxide (the main precursor to sulfate) and mer- cury emissions, and sulfate-reducing bacteria are responsible for much of the mercury methylation that happens in the ecosystem. Therefore, the effects of mercury deposition are often closely tied to the effects of acid deposition. While there is still much more that scientists need to understand about how these pollutants interact, our current understanding offers hints of the complex and interdepen- dent behavior of these pollutants. 12 ------- Summary In 2002, the third year of Phase II, the Acid Rain Program continued to be successful in substantially reducing emissions of SO2 and NOX from electric power plants. Sources continue to close in on the goal of reducing power plant SO2 emissions by 50% from 1980 levels to a cap level of 8.95 million tons. Sources have also exceeded the goal of a two million-ton reduction in NOX emissions from projected 2000 levels by over one million tons. Sources in both the cap and trade program for SO2 and the more conventional NOX program have demonstrated a high level of compliance with both the emissions monitoring and emission reduction requirements. These efforts have achieved measurable results. The flexibility for sources inherent in the cap and trade approach has significantly reduced compliance costs. In 2002, the Acid Rain Program achieved: * Dramatic Emission Reductions: In 2002, SO2 emissions from power plants were 9% lower than the year 2000 and 41% lower than 1980. NOX emissions from power plants also continued a downward trend, post- ing a 13% reduction from 2000 and a 33% decline from 1990 emissions levels. - In 2002, the more than 3,000 units in the Acid Rain Program emitted 10.2 million tons of SO2, down from 15.7 million tons in 1990. Emissions of SO2 in 2002 were almost 400,000 tons less than they had been in 2001. As in 2001, sources drew down the bank of unused allowances in 2002, resulting in emission levels greater than the allowances allocated in 2002, but still lower than emissions during any previous year. - NOX emissions from all acid rain units have decreased steadily from 6 million tons in 1997 to 4.5 million tons in 2002. The subset of more than 1,000 units affected by the Acid Rain NOX Program emitted 4.0 million tons in 2002, approximately 1.5 million tons (29%) less than they did in 1990. * Significant Air Quality Improvements: Air quality has notably improved, reducing human exposure to pollutants such as SO2 and fine particles that are associated with chronic bronchitis, asthma attacks, hospitalizations for cardiac and respiratory diseases, and premature death. -Acid deposition (especially sulfate concentrations in wet and dry deposition) has been substantially reduced, allowing lakes and streams in the Northeast to begin recovering from decades of acid rain. -Although NOX emissions have been reduced under the Acid Rain Program, there are no clear long-term trends in nitrogen deposition. * Better Information, Compliance and Flexibility: The Acid Rain Program's rigorous emissions monitoring and reporting requirements and new audit capability ensure complete accountability, resulting in a robust, transparent emissions inventory. The program has an extraordinary compliance level of nearly 100%. * Cost-Effectiveness: The cost of compliance is substantially lower than estimated in 1990. Achievement of the required SO2 emission reductions when the program is fully implemented in 2010 is now projected to cost just one quarter ($1 to $2 billion per year) of original EPA estimates. For more information on the EPAAcid Rain Program, visit EPA's Clean Air Markets website at http://www.epa.gov/airmarkets. For additional detailed emissions data see http://www.epa.gov/airmarkets/emissions/index. ------- Office of Air and Radiation Clean Air Markets Division EPA-430-R-03-011 1200 Pennsylvania Ave, NW (6204N) Washington, DC 20460 www.epa.gov/airmarkets Fall 2003 ------- |