Acid Rain and Related Programs:
2008 Emission, Compliance, and Market Data
The Acid Rain Program (ARP), established under Ti-
tle IV of the 1990 Clean Air Act (CAA) Amendments,
requires major emission reductions of SC>2 and NOX,
the primary precursors of acid rain, from the electric pow-
er industry. The SC>2 program sets a permanent cap on the
total amount of SC>2 that may be emitted by electric gen-
erating units (EGUs) in the contiguous United States. The
program is phased in, with the final 2010 SC>2 cap set at
8.95 million tons, a level of about one-half of the emissions
from the power sector in 1980. NOX reductions under the
ARP are achieved through a program that applies to a sub-
set of coal-fired EGUs and is closer to a traditional, rate-
based regulatory system. Since the program began in 1995,
the ARP has achieved significant emission reductions.
Table 1 shows that between 2004 and 2008, S02 and NOX
emissions fell significantly, while heat input (a surrogate
measure of electricity generation) increased slightly. Most
of the recent reductions since 2005 are from early reduc-
tion incentives of the Clean Air Interstate Rule (CAIR) cov-
ering most eastern states.
Over the next several months, EPA will release a series of
reports summarizing progress under the ARP. This first re-
port presents 2008 data on emission reductions, compli-
At a Glance: ARP Results in 2008
SC>2 Emissions: 7.6 million tons
SO2 Compliance: 100%
SC>2 Allowances: Banked allowances increased by
almost 2 million from 2007 levels
SC>2 Allowance Prices: Nominal allowance prices
declined sharply during the year, from a monthly aver-
age of $509/ton in January to $179/ton in December
NOX Emissions: 3.0 million tons
NOX Compliance: 100%
ance results, and SC>2 allowance prices. Future reports will
evaluate progress under the ARP in 2008 by analyzing emis-
sion reductions, reviewing compliance results and market
activity, and comparing changes in emissions to changes in
acid deposition and surface water chemistry. For more in-
formation on the ARP, please visit: .
Table 1: S02, NOX, and Heat Input Trends in Acid Rain Program Units, by Fuel Type
Fuel Type
Coal
Oil
Gas
Other
Total
9,840
377
36
3
10,256
3,484
138
134
6
3,762
20.49
1.00
4.83
0.03
26.34
9,837
349
35
3
10,223
3,356
129
142
6
3,633
20.77
0.99
5.34
0.03
27.13
9,244
135
8
7
9,393
3,208
63
131
7
3,409
20.44
0.58
5.70
0.05
26.77
8,768
149
10
7
8,933
3,069
68
141
5
3,283
20.75
0.61
6.32
0.05
27.74
7,517
84
7
10
7,617
2,816
46
129
5
2,996
20.25
0.48
6.21
0.06
26.99
Notes:
• Emissions are in thousand tons, and heat input data are in quadrillion Btu (Quads). Totals may not reflect individual rows from rounding.
Fuel type represents primary fuel type; many electric generation units might combust more than one fuel.
• EPA data in Table 1 and used elsewhere in this report are current as of July 1,2009, and may differ from past reports as a result of resub mis-
sions by sources and ongoing data quality assurance activities.
Source: EPA, 2009
United States
Environmental Protection
Agency
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Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Data
S02 Emission Reductions
The SC>2 requirements under the ARP apply to EGUs, fossil
fuel-fired combustors that serve a generator that provides
electricity for sale. The vast majority of ARP SC>2 emissions
result from coal-fired EGUs, although the program also ap-
plies to oil and gas units.
As Figure 1 shows, ARP units have reduced annual SC>2
emissions by 56 percent compared with 1980 levels and
52 percent compared with 1990 levels. Sources emitted 7.6
million tons of SC>2 in 2008, well below the current annual
emission cap of 9.5 million tons, and already below the
statutory annual cap set for compliance in 2010.
Reductions in SC>2 emissions from other sources not affect-
ed by the ARP (including industrial and commercial boilers
and the metals and refining industries) and use of cleaner
fuels in residential and commercial burners contributed to
a similar overall decline (56 percent) in annual SC>2 emis-
sions from all sources since 1980. National SC>2 emissions
from all sources have fallen from nearly 26 million tons in
1980 to about 11.4 million tons in 2008 (see data available
at ).
The states with the highest emitting sources in 1990 have
generally seen the greatest SC>2 reductions under the ARP
(see Figure 2). Most of these states are upwind of the ar-
Table 2: Origin of 2008 Allowable S02 Emission Levels
Type of Allow- Number of Explanation of Allowance
ance Allocation Allowances Allocation Type
Initial Allocation
Allowance Auction
Opt-in Allowances
Total 2008 Alloca-
tion
Total Banked
Allowances
Total 2008 Allow-
able Emissions
9,191,897
250,000
106,497
9,548,394
6,678,688
16,227,082
Initial allocation is the number of allowances
granted to EGUs based on the product of their
historical utilization and emission rates speci-
fied in the Clean Air Act.
The allowance auction provides allowances
to the market that were set aside in a Special
Allowance Reserve when the initial allowance
allocation was made.
Opt-in allowances are provided to units enter-
ing the program voluntarily. There were 20
opt-in units in 2008.
Banked allowances are those allowances
accrued in a facility's account from previous
years, which can be used for compliance in
2008 or any future year.
Notes: Total banked allowances are adjusted from the 2007 Progress
Report to account for additional allowance deductions made after
the 2007 reconciliation was completed.
Source: EPA, 2009
Figure 1: S02 Emissions from Acid Rain Program Sources, 1980 - 2008
1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
• Phase I (1995-1999) Sources • Phase II (2000 on) Sources • All Affected Sources • Allowances Allocated
Source: EPA, 2009
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Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Data
Figure 2: State-by-State S02 Emission Levels for Acid Rain Program Sources, 1990-2008
• 1990 Emissions
D 1995 Emissions
• 2000 Emissions
• 2005 Emissions
• 2008 Emissions
Scale: Largest bar equals 2.2 million tons of S02 emissions in Ohio, 1990.
Source: EPA, 2009
eas the ARP was designed to protect, and reductions have
resulted in important environmental and health benefits
over a large region.
In addition, from 2007 to 2008, reductions in SC>2 emis-
sions from ARP units in 38 states totaled about 1.3 million
tons, or about 15 percent for the year. Five states (Geor-
gia, Indiana, North Carolina, Ohio, and Pennsylvania) ac-
counted for most of the one-year reductions from 2007 to
2008, ranging from 119,271 to 244,651 tons of S02 in each
of these states.
From 1990 to 2008, annual SC>2 emissions in 38 states and
the District of Columbia fell by a total of approximately 8.2
million tons. In contrast, annual SC>2 emissions increased by
a total of 79,309 tons in 10 states from 1990 to 2008. The
seven states with the greatest reductions in annual emis-
sions since 1990 include Ohio, which decreased emissions
by over 1.5 million tons, and Illinois, Indiana, Kentucky,
Missouri, Tennessee, and West Virginia, each of which re-
duced total emissions during this time period by more than
500,000 tons.
S(>2 Program Compliance
For 2008, EPA allocated 9.5 million S02 allowances under
the ARP (see Table 2). Together with 6.7 million unused al-
lowances carried over (or banked) from prior years, there
were 16.2 million allowances available for use in 2008.
ARP sources emitted approximately 7.6 million tons of S02
in 2008, less than the allowances allocated for the year, and
far less than the total allowances available (see Figure 3).
In 2010, the total number of Title IV allowances allocated
annually will drop to 8.95 million and remain statutorily
fixed at that annual level.
Table 2 explains in more detail the origin of the allowances
that were available in 2008, and Table 3 shows how those
allowances were used. Approximately 7.6 million allowanc-
es were deducted from sources' accounts in 2008 to cover
emissions. From 2007 to 2008, the number of banked al-
lowances increased by nearly two million allowances to
8.6 million, a 28 percent increase. In 2008, all ARP facilities
complied with the requirement to hold enough allowances
to cover S02 emissions.
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Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Data
Figure 3: S02 Emissions and the Allowance Bank, 1995-2008
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
• Allowances Allocated • Unused Allowances from Previous Years • Actual Emissions from Affected Sources
Source: EPA, 2009
Table 3: S02 Allowance Reconciliation Summary, 2008
Total Allowances Held (1995 - 2008 vintages)
Affected Facility Accounts
Other (General and Non-Affected Facility Accounts)
Allowances Deducted*
Penalty Allowance Deductions (2009 Vintage)
Banked Allowances
Affected Facility Accounts
Other (General and Non-Affected Facility Accounts)
16,227,082
12,210,477
4,016,605
7,602,693
0
8,624,389
4,607,784
4,016,605
* Includes 3,315 allowances deducted from opt-in sources for re-
duced utilization. Additionally, allowances deducted for emissions
are about 14,000 tons less than the total emissions used elsewhere
in this report, which reflect data reported as of July 1, 2009. This
is a result of rounding differences, any changes in reported emis-
sion data after reconciliation, and resolution of petitions, including
emissions for one facility (WH Zimmer in OH) that has not been
reconciled due to a monitoring petition. When this facility is rec-
onciled the number of allowances deducted will go up and the
amount of banked allowances will decrease.
Source: EPA, 2009
2008 S02 Allowance Market
In 2008, the SC>2 allowance market experienced a 65%
price decline; the monthly average price fell from $509 per
ton in January to $179 per ton by December (see Figure 4).
That decline has continued in 2009, falling to $71/ton by
May. ARP reports released in the coming months will ana-
lyze allowance market activity in more detail.
Figure 4: Average Monthly S02 Allowance Price, August 1994
May 2009
Source: CantorC02e Market Price Index, 2009
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Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Data
NOX Emission Reductions
Title IV requires NOX emission reductions for certain coal-
fired EGUs by limiting the NOX emission rate (expressed in
Ib/mmBtu). Congress applied these rate-based emission
limits based on a unit's boiler type (see Table 4). The goal
of the NOX program is to limit NOX emission levels from
the affected coal-fired boilers so that their emissions are
at least 2 million tons less than the projected level for the
year 2000 without implementation of Title IV.
Figure 5 shows that NOX emissions from all ARP sources
were 3.0 million tons in 2008. This level is 5.1 million tons
less than the projected level in 2000 without the ARP, or
more than double the Title IV NOX emission reduction ob-
jective. While the ARP was responsible for a large portion
of these annual NOX reductions, other programs—such as
the Ozone Transport Commission (OTC), the NOX Budget
Program under EPA's NOX State Implementation Plan (SIP]
Call, and other regional and state NOX emission control
programs—also contributed significantly to the NOX re-
ductions achieved by sources in 2008.
From 1995 to 2008, annual NOX emissions from ARP units
dropped by about 3.1 million tons, a net decrease of 51 per-
cent. Forty-two states and the District of Columbia reduced
NOX emissions during this period versus six states that ac-
counted for only about 15,600 tons of increased NOX emis-
sions during the same period (see Figure 6).
NOX Compliance
The ARP NOX Program does not impose a cap on NOX emis-
sions and does not rely on allowance trading. The program
allows affected sources to comply either by meeting a unit-
specific emission rate or by including two or more units in
an emission rate averaging plan. These options provide af-
Table 4: N0x-Affected Title IV Units by Boiler Type and NOX
Emission Limit
Title IV Standard NOX
Emission Limits Number of
Coal-Fired Boiler Type (Ib/mmBtu) Units
Phase 1 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 >1 55 MW
Wet Bottom > 65 MW
Vertically Fired
Total All Units
0.45
0.50
0.40
0.46
0.68
0.86
0.84
0.80
133
107
300
294
37
54
20
24
969
Source: EPA, 2009
Figure 5: NOX Emission Trends for All Acid Rain Program Units, 1990-2008
1990 1995 1996 1997 1998 1999 2000 2001
• NOX Program Affected Sources
2002 2003 2004 2005 2006
• Title IV Sources Not Affected for NOX
2007 2008
Source: EPA, 2009
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Acid Rain and Related Programs: 2008 Emission, Compliance, and Market Data
fected sources with the flexibility to meet the NOX emission
reduction requirements in the most cost-effective manner.
In 2008, all 969 units that were subject to the ARP NOX Pro-
gram achieved compliance.
Figure 6: State-by-State NOX Emission Levels for Acid Rain Program Sources, 1990 - 2008
• 1990 Emissions
D 1995 Emissions
• 2000 Emissions
• 2005 Emissions
• 2008 Emissions
Scale: Largest bar equals 500,000 tons of NOX emissions in Ohio, 1990.
Note: Area shaded in gray represents the NOX Budget Program geographic region.
Source: EPA, 2009
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