FACT SHEET

Good Neighbor Plan for the 2015 Ozone NAAQS

Recall of CSAPR NOx Ozone Season Group 2 Allowances from Sources in States Newly Transitioning to
the CSAPR NOx Ozone Season Group 3 Trading Program

On March 15, 2023, the U.S. Environmental Protection Agency (EPA) issued its final Good Neighbor Plan,
locking in significant reductions in ozone-forming emissions of nitrogen oxides (NOx), and benefitting
millions of people living in downwind communities. The Good Neighbor Plan ensures that 23 states
meet the Clean Air Act's "Good Neighbor" requirements by reducing pollution that significantly
contributes to problems attaining and maintaining the 2015 Ozone National Ambient Air Quality
Standards (NAAQS) in downwind states. Beginning in the 2023 ozone season, EPA will include power
plant sources in 22 states in a revised and strengthened CSAPR NOx Ozone Season Group 3 Trading
Program.1 The 22 states include twelve states already covered by the Group 3 trading program, seven
states transitioning from the CSAPR NOx Ozone Season Group 2 trading program, and three states not
currently covered by any CSAPR trading program for seasonal NOx emissions.

To maintain the previously established levels of stringency of the Group 2 trading program for the states
and sources that remain subject to that program under the Good Neighbor Plan,2 the EPA is recalling
CSAPR NOx Ozone Season Group 2 allowances equivalent in amount and usability to all vintage year
2023-2024 CSAPR NOx Ozone Season Group 2 allowances previously allocated to sources in states and
areas of Indian country newly transitioning to the Group 3 trading program under this rule and recorded
in the sources' compliance accounts. The recall provisions apply to all sources in jurisdictions newly
added to the Group 3 trading program in whose compliance accounts CSAPR NOx Ozone Season Group 2
allowances for a control period in 2023 or 2024 were recorded, including sources where some or all
units have permanently retired or where the previously recorded 2023-2024 allowances have been
transferred out of the compliance account.3

The main elements of the recall provisions are summarized below:4

• For each vintage 2023-2024 Group 2 allowance initially recorded in a newly transitioning Group 3
source's compliance account, the owners and operators of the source must surrender either the
same specific vintage 2023-2024 Group 2 allowance or any Group 2 allowance with equivalent or
greater usability under the Group 2 trading program. For example, the surrender requirement
corresponding to a vintage 2023 Group 2 allowance could be satisfied through the surrender of any

1The 22 "Group 3 states" are Alabama, Arkansas, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Utah,
Virginia, West Virginia, and Wisconsin.

2	The three states whose sources will continue to be covered by the Group 2 trading program are Iowa, Kansas,
and Tennessee.

3	Sources in the twelve states that transitioned to the Group 3 trading program under the Revised CSAPR Update
were already subject to analogous recall provisions established under that rule and are not subject to the
additional recall provisions established in this rule.

4	For a complete description of the recall provisions, refer to section VI.B.12.C. of the preamble for the final Good
Neighbor Plan. For official regulatory text, refer to 40 CFR 97.811(e).

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vintage 2017-2023 Group 2 allowance, and a surrender requirement with regard to a vintage 2024
Group 2 allowance could be satisfied through the surrender of any vintage 2017-2024 Group 2
allowance.

•	The optional first deadline for owners and operators subject to the surrender requirements to
satisfy the recall will be 15 days after the effective date of this rule. As soon as practicable on or
after this date, the EPA will make a first attempt to complete the deductions of Group 2 allowances
required for each Group 3 source from the source's compliance account. Following the first attempt,
the second deadline for owners and operators to satisfy the recall will be September 15, 2023, at
which point EPA will make a second attempt to deduct Group 2 allowances from Group 3 sources'
compliance accounts. The EPA will notify the designated representative and any alternate
designated representative of for each source indicating the quantities and vintages of Group 2
allowances that must be held to satisfy the source's surrender requirements.

•	No allocations of Group 3 allowances will be recorded in a source's compliance account until the
source satisfies the surrender requirements with regard to vintage 2023-2024 Group 2 allowances.

•	If the second attempt to deduct Group 2 allowances to meet the surrender requirements through
deductions from the source's compliance account (or from a specified general account) is
unsuccessful for a given source, as soon as practicable on or after November 15, 2023, to the extent
necessary to address the unsatisfied surrender requirements for the source, the EPA will deduct the
vintage 2023-2024 Group 2 allowances that were initially recorded in the source's compliance
account from whatever accounts the allowances are held in as of the date of the deduction, except
for any allowances where, as of April 30, 2022, no person with an ownership interest in the
allowances was an owner or operator of the source, was a direct or indirect parent or subsidiary of
an owner or operator of the source, or was directly or indirectly under common ownership with an
owner or operator of the source. Before making any deduction under this provision, the EPA will
send a notification to the authorized account representative for the account in which the allowance
is held and will provide an opportunity for submission of objections concerning the data upon which
the EPA is relying.

•	Any failure of a source's owners and operators to comply with the surrender requirements will be
subject to possible enforcement as a violation of the Clean Air Act, with each allowance and each
day of the control period constituting a separate violation.

To eliminate any possible uncertainty regarding the amounts of Group 2 allowances allocated for the
2023-2024 control periods (or earlier control periods) that the owners and operators of each Group 3
source are required to surrender under the recall provisions, the EPA has prepared the following lists,
posted on the Good Neighbor Plan website (link) and in the associated docket:

•	A list of the sources in the newly transitioning Group 3 states and areas of Indian country in whose
compliance accounts allocations of vintage 2023-2024 Group 2 allowances were recorded, with the
amounts of the allocations recorded in each such compliance account for the 2023 and 2024 control
periods.

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• A list showing, for each newly added Group 3 source, the specific Group 2 allowances (batched by
serial number) allocated for each control period and recorded in the source's compliance account
and indicating whether, as of April 30, 2022, that batch of allowances was held in the source's
compliance account, in an account believed to be partially or fully controlled by a related party (i.e.,
an owner or operator of the source or an affiliate of an owner or operator of the source), or in an
account believed to be fully controlled by independent parties.

For questions concerning the recall provisions, please contact csaprgepa.gov.

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