EPA Proposes Unprecedented Ozone Season Reductions for NOx to Meet Good Neighbor Obligations for 2015 Ozone NAAQS | Williams Mullen

The EPA has proposed a transformative rule to meet 26 state requirements for the 2015 National Ozone Ambient Air Quality Standards (2015 Ozone NAAQS). The rule is a Federal Implementation Plan (FIP) rooted in the Good Neighbor provisions of the Clean Air Act (CAA) (the proposed FIP). The proposed FIP projects NOx reductions for the ozone season (May 1 to September 30) from electric generating units (EGUs) from 2023 and stationary industrial sources (non-EGUs) by 2026. The schedule is aligned with the ozone achievement of August 3, 2024. for areas classified as moderate non-compliance, with additional NOx reductions before the ozone achievement date of August 3, 2027 for areas classified as moderate non-compliance. areas classified as serious non-compliance for NAAQS 2015 for ozone.

The FIP impacts two categories of States. Upstream states are included for which the EPA has determined that interstate transport of ozone precursor emissions contributes significantly to the failure to meet or maintain the 2015 NAAQS for ozone in downstream states. The second category of states are those that do not have an approved ozone transport SIP for the 2015 Ozone NAAQS, including states that did not submit a SIP. Delaware is also included based on updated air quality modeling changes, although it does not belong to any category. Some states are in both categories.

The proposed rule used the traditional multifactor transport framework to identify upwind emissions that are important contributions for downwind states. The steps are: (1) identify downwind receptors that are not expected to be reached; (2) determine the upwind states to be linked as contributors to downwind air quality problems; (3) identify upstream emissions in related states that contribute significantly to downstream non-achievement; and (4) implement emission reductions for states whose emissions contribute significantly to the downwind non-achievement. The proposed FIP describes the modeling of ozone transport from upwind states and applies a wind contribution threshold of 0.70 ppb. States below the contribution threshold were not included in the FIP (Alaska, Arizona, Colorado, Connecticut, District of Columbia, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Maine, Massachusetts, Montana, Nebraska, New Hampshire, New Mexico, North Carolina, North Dakota, Rhode Island, South Carolina, South Dakota, Vermont, and Washington). States not on this list were found to be wind contributors subject to this rule.

For EGUs, the EPA has evaluated NOx emission control technologies. EPA evaluated Selective Catalytic Reduction (SCR) (including optimization and activation of SCRs at idle), advanced NOx combustion technologies, Selective Non-Catalytic Reduction (SNCR) (including optimization and activation of SNCRs at idle), new SCRs, new SNCRs and change of generation. For non-EGUs, industries affected include cement, glass, iron and steel, natural gas pipeline transportation, and high-emitting equipment from Tier 2 industries (basic chemical manufacturing, manufacturing petroleum and coal products, extraction of metal ores, manufacture of lime and gypsum products). , and pulp, paper and paperboard mills). Non-EGUs are not subject to CSAPR trading, but the EPA offers various industry-specific NOx emission limitations.

Why is this rules creation so unique?

  • It impacts both EGUs and non-EGUs.
  • This is a FIP, not a SIP call or an “update” to the current CSAPR program rules. This mechanism is different from previous tools the EPA used to meet multistate obligations.
  • EGU NOx rate assumptions for 2026 are lower than ever proposed. The EPA identifies a rate of 0.05 lb/mmBTU based on Control Performance (SCR). The last CSAPR rule was based on a rate of 0.08 lbs/mmBTU, only last year. The EPA acknowledges, “[t]These controls represent greater rigor in upwind EGU controls than in more recent EPA ozone transport regulations, such as the CSAPR Update and Revised CSAPR Update.
  • EPA adds a daily EGU NOx emissions rate for large coal-fired EGUs during ozone season (May-September) from 2024 and 2027, depending on whether the EGU currently controls NOx with an SCR. This is a belt and suspenders approach that the EPA justifies because “commercial CSAR programs [have] revealed cases where EGUs reduced the performance of their SCRs on a given day, or across ozone seasons in some cases, including high ozone days.
  • For EGUs, the EPA is introducing new features that will likely reduce available allowances due to EGU withdrawals or backfeed scenarios, changes in heat input, modeled generation transfer, and excess reserve allowances . These concepts are called dynamic budgeting and bank recalibration. The EPA is transparent about its intention to force the installation of EGU control technology.
  • The non-EGU discounts are the first of their kind to use the Good Neighbor provision.

What are we likely to see in the comments?

We expect to receive a large number of comments from a variety of industries and environmental organizations. Several likely EGU and non-EGU comment topics may include:

  • Whether the source datasets and EPA modeling used to determine which states are wind contributors are accurate and robust. Technical experts will dig deeper into the data and assumptions used by the EPA;
  • The EPA rejects the higher contributing filter value of 1 ppb upstream to downstream in favor of a value of 1% (0.70 ppb). This value defines which states are contributors to the wind and is used in the EPA control analysis. In an earlier 2018 memorandum, the EPA proposed higher contribution threshold alternatives;
  • Some NOx control technology emission rate assumptions are not technically feasible and some control installation costs are underestimated;
  • The daily EGU emission rate chosen by the EPA is too low because it does not take into account the operational constraints of the control equipment;
  • Generational transfer, which is factored into EGU state budgets, is not an appropriate tool for reducing emissions; and
  • The concepts of dynamic budgeting and recalibrating banks from EGU budgets remove market incentives for EGUs to reduce emissions.

Finally, states can opt out of the FIP for both EGUs and non-EGUs. The EPA presents the SIP approach options. EPA requested comments on all aspects of the proposed FIP. Comments are due June 6.

Federal Regional Ozone Transport Implementation Plan for the 2015 National Ozone Ambient Air Quality Standard, 87 Fed. Reg. 20036 (April 6, 2022).
EPA Memorandum from P. Tsirigotis to Air Division Regional Directors, Regions 1 through 10, “Analysis of Contribution Thresholds for Use in Section 110(a)(2)(D)(i)( I) State Implementation Plan Interstate Transportation Submissions for the 2015 National Ozone Ambient Air Quality Standards,” August 31, 2018.
CAA Section 110(a)(2)(D)(i)(I).

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