### ME MORANDUM UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460



## NOV 1 9 2014 OFFICE OF AIR AND RADIATION

SUBJ ECT: Addressing Biogenic Carbon Dioxide Emissions from Stationary Sources 

### C:> 

### CZc..- FROM : J anet G. McCao e , Acting Assis tant Administrator Office of Air and Radiation
TO: Air Division Directors, Regions 1-l 

### 0

The President's Climate Action Plan (2013) highli ghts the critical role that America's forests play in addressing carbon pollution in the Unite d States by removing nearly 12 percent of total U.S. greenho use gas (GHG) emissions each year from the atmosphere. Conservation and sustainable management can help to ensure our forests and other lands continue to remove carbon from the atmosphere while also improving soil and water quality , reducing wildfire risk , and otherwise managing forests to be more resilient in the face of cl imate change. In many cases, the generation of sustainably sourced bioenergy products can be an integral part of regimes that promote conservation and sustainab le forest management. The Environmental Protection Agency ' s (EPA) work on assessing biogenic carbon dioxide (C0 2 ) emissions from stationary sources is part of this broad climate strategy.
Accord ing ly , t he Agency is taking the next step in the development of ongoing technical work 

### it has been doing in s upport of this assessment. To continue advancing our understanding of the role biomass can play in reducing overall greenhouse gas emiss ion s, the EPA has developed a seco nd draft ofthe 

### Framework/or Assessing Biogenic C02 Emissionsfrom Stationary Sources , and is preparing to release it for further review. As you know, the EPA also anticipates near-term decision-making pertaining to biogenic C02 emissions in the context of both the Clean Power Plan (C PP) and the Prevention of Significant Deterioration (PS D ) program. As a result, we expect that many states and stakeholders will look to the second draft of the Framework for indications ofhow the Agency will treat biogenic C0 2 emissions under both the CPP and the PSD program going forward. In addition to advising you of the release of the revised Framework, this memo also describes below OAR 's current thinking with respect to those tw o pro g rams and their treatment of biogenic C02 emi ss ion s
. Plea se share this memorandum with our co-regulators and stakeholders as ap propriate.

I Internet Address (URL) • http ://www

. epa

. gov Recycled/Recyclable • Pri nted wit h Vegetab l e Oil Based Inks on 100% Postconsumer , Process Chlori ne Free Recycl ed Paper

### In 2011, the EPA developed the first draft of the Framework and submitted it to a Science Advisory Board (SAB) for peer review. 1 With that draft , the Agency continued an extensive s takeholder process that b egan with a Call for Information re lated to biogenic carbon accounting and assessment in 2010 and inc luded public comment on the first draft Framework. Information considered in p reparing the second draft of the Framework, including the SAB peer review and s takeholder input, s upports the finding that use of waste-derived feedstocks and certain forestderived industrial byproducts are likel y to have minimal or no net atmospheric contributions of biogenic C02 emissions , or even reduce such impacts , when compared with an alternate fate of disposal. The EP A intends to apply this preliminary finding further within the polic y contexts and regulatory actions described below.
The EPA worked to produce the second draft of the Framework to reflect the SAB peer review, stakeholder feedback and l atest scientific ana lyses to develop it as a tool for assessing biogenic C02 emissions from stationary sources. The EPA will continue to refine its accounting work by initiating a second round oftargeted peer review through its SAB later this month , wh ich includes public comment. As part of this technical process, we wi ll continue to assess and closely monitor overall bioenergy demand and landscape conditions for changes that might have negative impacts on public health or the environment.
While we continue the development of the Framework to reflect ongoing technical and scientific work , we believe that our approach to the treatment of biomass in the CPP and PSD program should be determined by policy and programmatic objectives , goals and considerations, based on and supported by technical information

- an outlook that the SAB peer reviewers acknowledged in their review of the initial draft Framework. 

### In light of tho se considerations , we believe that it is appropriate for the EPA to take additional actions to implement the policies described below in the CPP and the PSD program in parallel with our intended further work on the Framework.
In the implementation of the CPP, the EPA anticipates that some states will wish to include the use of biogenic feedstocks in their compliance plans. When considering state compliance p l ans , the Agency expects to reco gni ze the biogenic C0 2 emi ss ions and climate policy benefits of waste-derived and certain forest-derived industrial byproduct feedstocks, based on the conclusions supported by a variety of technical studies , including the revised Framework. In addition , given the importance of sustainable land management in achieving the carbon reduction goals of the President's Climate Action Pl an , the EPA expects that states' reliance specificall y on sustainably-derive d agricultural- and forest-derived feedstocks may also be an approvable element of their**compliar~ce** plans. Thi s approach is consistent with the EPA ' s recognition in the proposal that every state has different energy systems and available fuel mixes. Many states already recognize the importance of forests and other land s for climate resilience and mitigation , and have developed a variety of sustainable forestry and land use management

1 In September 20 II , the Age ncy released the Draft Accounting Framework for Biogenic C02 Emi ss ions from Sta tionary Sources (hlln. "' \\\\ .epa.gov 1climatechange'ghgcmissions biogenic

- emissions.hunll. This draft report examined the science associated with biogenic C0 2emissions from stationary sources and presented an accountin g framework for these emissions. EPA's Science Advi sory Board ( SAB) conducted a peer review of this report and released its conclusion s in 2 012. (hllg: t' vosemite.epa.!!.O\ 's ab fs abproduct.nsf/0 2F9B572C71_2A(,'52 E85')57831 0070-1886 )

. 2policies and programs to address these concerns. Some states also encourage participation in sustainable forest management programs developed by third -p arty forestry and/or environmental entities.
The EPA will evaluate the biogenic feedstock components of proposed state plansalong with all other aspects ofeach plan- as part of the compliance plan review and approval process and will provide clarification as needed on the basis on which it will make such biomassrelated evaluations. As in the case of many other aspects of the CPP, we expect to consult other experts, such as our co ll eagues at USDA, states and stakeholders to provide information and examples of exi sting state and third

-party programs already recognized as meeting sustainability goal s as articulated by the President's Cl imate Action Plan.
In addition, the EPA p lans to propose revisions to the PSD rule s to include an exemption from the Best Availab le Control Technology (BACT) requirement for GHGs from waste-derived feedstocks and from non-waste biogenic feedstocks derived from sustainable forest or agricultural practices , cons istent with the technical information described above. For wastederived feedstocks , the EPA intends to propose exempting biogenic C02 emissions from GHG BACT analyses and antic ipates basing that propo s al on the rationale that those emi ss ions are likely to have minimal or no net atmospheric contributions ofbiogenic C02 emissions, or even reduce s uch impacts, when compared with an alternate fate of di sposal. For sustainable nonwaste feedstocks, the EPA intends to propose exempting biogeni c C02 em iss ions from GHG BACT analyses if the app li cant can demonstrate that these feedstocks in fact come from sus tainably managed lands. The rationale above will be presented in the record for any future rulemaking and subject to public review and comment. For all other biogenic feedstocks, the EPA intends to propose that biogenic C0 2 emissions would remain subject to the GHG BACT requirement at this time. The EPA also anticipates providing additional guidance to sources undergoing BACT analyses involving biogenic feedstocks.
Related ly, the EPA is working through the legal process to respond to the Supreme Court 's decision in 

### Utility Air Regulatory Group v. EPA and the proceedings currently before the United Sta tes Court of Appeals for the Dist rict of Co lumb ia Circuit. When developing the PSD regulations described above , the EPA intends to co nsider the outcome of this process and coordinate its PSD regulations specific to biogenic C02 emissions with other rule revisions that may be necessary to address application of PSD permitting requirements to G HG s. Our goal would also be to enable permitting authorities and sources to implement the permitting requirements in a pract ical manner that is consistent with the policy objectives articulated above for the CPP.
I trust this information will be help ful. We will provide additional updates as we move fo rward on the following webs ite http: //epa
. gov/climatechange/gh gemissions/ bio genice missions

.html.

3