NOx SUBSTITUTION GUIDANCE

December, 1993

Office of Air Quality Planning and Standards

U.S. Environmental Protection Agency

Research Triangle Park, North Carolina 27711
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Section 1: Background

Title I of the Clean Air Act Amendments (CAAA) mandates a

15% reduction of volatile organic compound (VOC) emissions from

the 1990 base inventory by November, 1996 in all ozone

nonattainment areas classified moderate and above. Areas

classified serious and above must achieve the 3% per year VOC

reductions past November, 1996 as part of the reasonable further

progress (RFP) provisions (§ 182 [c][2][B]). However, Section

182 (c)(2)(C) allows the post-1996 RFP plan to accommodate a less

than 3% per year VOC reduction if it can be demonstrated that

substitution of NOx emission reductions (for VOC reductions)

yields equivalent ozone reductions. Underlying this substitution

provision is the recognition that NOx controls may effectively

reduce ozone in many areas, and that the design of strategies is

more efficient when the characteristic properties responsible for

ozone formation and control are evaluated for each area.

The purpose of this document is to provide a procedure that

can be applied to meet the post-1996 Section 182(c)(2)(B) RFP

requirement as well as the Section 182 (c)(2)(C) equivalency

demonstration requirements. The intent of this guidance is to

facilitate implementation of the most effective ozone precursor

control strategies, while meeting the intent of the CAA RFP

provisions. 

The guidance consists of two basic steps that are

established in Sections 2 and 3 of this document. First, an

equivalency demonstration requires that cumulative RFP emission

reductions must be consistent with the NOx and VOC emission

reductions determined in the ozone attainment modeling

demonstration. Second, specified reductions in NOx and VOC

emissions should be accomplished in the interim period between

1996 and the attainment date, consistent with the continuous RFP

emission reduction requirement. Section 4 provides the legal

rationale underlying this guidance and the guidance is summarized

in Section 5.
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Section 2: Test for Equivalency - Use of Strategies Aimed at

the Mandated Attainment Year

[The condition for demonstrating equivalency is that Stateproposed emission control strategies must be consistent with

emission reductions required to demonstrate attainment of

the ozone NAAQS for the designated year of attainment.]

The provision for NOx substitution recognizes that a VOConly control pathway may not be the most effective approach for

effecting attainment in all areas. Consequently, NOx reductions

are placed on a near equal footing with VOC through substitution. 

This document establishes two conditions pursuant to both the

substitution and RFP provisions in the Act. The first condition

requires that control strategies incorporating NOx emission

reduction measures must demonstrate that the ozone NAAQS will be

attained within time periods mandated by the Act. This condition

reflects the Title I provision for gridded photochemical model

demonstrations (Section 182(c)). 

The second condition, addressed below in Section 3,

maintains the requirement for periodic emission reductions in

order to realize progress toward attainment. Flexibility is

introduced by allowing VOC and NOx reductions rather than VOC

reductions alone. A third condition exists in which the periodic

emission reductions must be consistent with the model attainment

demonstration. 

The basis for equivalency is the ability of a given control

strategy (i.e., any particular mix of NOx and VOC emission

reductions) to effect attainment of the ozone NAAQS by the

designated attainment year. Section 182(c) of the CAA requires

that State implementation plans (SIPs) for serious and above

nonattainment areas include a demonstration of attainment of the

ozone National Ambient Air Quality Ambient Standard (NAAQS) with

gridded photochemical modeling. These SIP revisions are due by

November 15, 1994 and provide the framework for demonstrating

equivalent ozone reductions through the substitution of NOx

emission reductions for VOCs. Model application procedures for

demonstrating attainment are provided in EPA's Guideline for

Regulatory Application of the Urban Airshed Model, (EPA-450/4-91-

013).

This modeling requirement already exists as a Title I

provision for areas classified serious and above. Due to the

flexibility described below in Section 3.0 which permits

virtually any set of NOx and VOC RFP reductions in years prior to

the attainment date, a linkage to the attainment year control

strategy is required. This linkage provides assurance that the
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RFP reductions are consistent with the SIP attainment

demonstration. States are required to justify substitution by

illustrating "consistency" between the cumulative emission

changes emerging from the RFP/substitution proposal and the

emission reductions in the model attainment demonstration (or

comparable modeling analysis). The EPA will approve substitution

proposals on a case-by-case basis. Generally speaking, any

reasonable substitution proposal will be approved. Linkage to

the modeling demonstration provides a screen to remove

unrealistic (and inefficient) substitution proposals.
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Section 3: Reasonable Further Progress (RFP) Requirements

[The condition for meeting the RFP emissions reduction

provision is that the sum of all creditable VOC and NOx

emission reductions must equal 3% per year averaged every

three years.]

The RFP provisions require periodic emissions reductions

until attainment is reached. In the absence of the NOx

substitution provision, an area classified serious or above would

be required to reduce VOC emissions after 1996 an average of 3%

per year every three year period until attainment. This guidance

maintains the 3% per year emissions reduction requirement. 

However, no specified set of VOC or NOx controls is mandated. 

Reasons for not requiring specific "exchange" rates among VOC and

NOx emissions include:

1. The strong likelihood that optimum "exchange" rates

vary from year to year and across a geographic area as

an area's emissions distribution and atmospheric

chemistry change over time;

2. Uncertainty in modeling analyses, particularly when

attempting to ascertain responses from small percentage

perturbations in emissions; and

3. Resource limitations associated with modeling specific

control measures during interim years before attainment

dates.

Any combination of VOC and NOx emission reductions which

totals 3% per year, and meet other SIP consistency requirements

described in this document are allowed. These requirements

ensure that the cumulative RFP reductions are consistent with the

emission reduction measures identified in the model attainment

demonstration. A percentage basis rather than a mass basis is

used for calculating the RFP emission reductions. A percentage

basis is applied to avoid "absurd" calculations. For example,

substitution of NOx reductions for VOC on a ton for ton basis

could yield calculated NOx reduction requirements which exceed

the available NOx inventory in cases where the base VOC inventory

greatly exceeds the NOx inventory. To illustrate, a 50% VOC

reduction is analogous to a 100% NOx reduction assuming the VOC

inventory is twice the NOx inventory and substitution is based on

mass rather than percentage equivalency. The percentage basis

also is consistent with the RFP "percent" reduction requirement,

therefore buoying the legal justification underlying this

guidance.
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The calculation to determine yearly VOC and NOx emission

reduction totals must be based on typical summer day inventories

(same basis used for RFP and modeling inventories). Specific

details regarding calculation procedures and emission inventory

definitions are found in separate documents, including EPA's

forthcoming Guidance on the Post-1996 Rate-of-Progress Plan and

the Attainment Demonstration. The following equation generally

describes the method to calculate the total 3% per year emission

reductions:

RV/VOCBASE + RN/NOxBASE >= 0.03

where; RV = typical summer day VOC reductions in mass units

RN = typical summer day NOx reductions in mass units

VOCBASE = the mass of anthropogenic VOC emissions

in the 1990 adjusted base inventory, and

NOxBASE = the mass of anthropogenic NOx emissions

in the 1990 adjusted base inventory 

[note, the cumulative mass reductions are not

constrained to 3% per year so that RFP reductions

greater than 3% per year are not discouraged.] 

The values of RV and RN include only the creditable emission

reductions from the nonattainment area of concern. 

For instance, VOC or NOx reductions from the pre-enactment

Federal Motor Vehicle Control Program (FMVCP), which are not

creditable toward the 3% per year requirement are not included. 

Potential "creditable" NOx emission reductions which are

available for substitution purposes are described in EPA's

forthcoming Guidance on the Post-1996 Rate-of-Progress Plan and

the Attainment Demonstration. 

The attainment strategy requirements must be met in addition

to the RFP condition. Total emission reductions are determined

by the attainment demonstration, implying that reductions

averaging greater than 3% per year averaged from 1996 to the

specified attainment year are required if shown to be necessary

by the model demonstration. The 3% per year RFP requirement is

thus a minimum requirement. Further, the NOx emission reductions

credited toward RFP may be capped by the cumulative reductions

dictated by the model demonstration. For example, an approved

control strategy emerging from a model demonstration for a

serious area might show reductions of 6% NOx and 80% VOC,

relative to 1990 emissions, are needed by 1999. Assuming zero
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creditable NOx emission reductions from 1990 through 1996, NOx

reductions averaging 2% per year over the 3 years from 1996 to

1999 represent a cap on the NOx RFP reductions. The reason for

linking the RFP reductions to the attainment strategy is to avoid

RFP reductions which are not consistent with the model

demonstration. Note that the sum of emissions totalling 3% per

year are required to meet the basic RFP provisions -- they are

not capped by the attainment demonstration. Thus, cases might

exist where VOC reductions from the RFP provisions might exceed

the cumulative VOC emission reductions in the attainment

strategy. Such cases do not conflict with the attainment

demonstration since additional VOC reductions will not increase

peak ozone. On the other hand, the NOx cap is necessary because

NOx reductions have the potential for increasing peak ozone.
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Section 4: Discussion of Equivalency

[The following discussion provides the legal rationale

underlying the interpretation of "equivalency" and the

linkage between the RFP and NOx substitution provisions

within the Act.]

"Equivalency" is not defined strictly in the context of,

"What specified level of NOx reductions, compared to VOC, results

in equivalent ozone reduction?" Instead, any combination of VOC

and NOx reductions is "equivalent" so long as the reductions are

consistent with those identified as necessary to attain the NAAQS

in the modeling demonstration and provide for steady progress in

leading to the emission reductions identified as necessary to

attain the NAAQS by the specified attainment year.

In allowing a combination of NOx and VOC controls or the

substitution of NOx emissions reductions for VOC emissions

reductions, Section 182(c)(2)(C) of the statute states that the

resulting reductions "in ozone concentrations" must be "at least

equivalent" to that which would result from the 3% VOC reductions

required as a demonstration of reasonable further progress (RFP)

under Section 182(c)(2)(B). This provision could be interpreted

to mean that the amount of NOx reductions appropriate for

substitution purposes is an amount which, when compared to

predicted VOC reductions, results in the same reductions in ozone

concentrations that the VOC reductions would achieve in that

area. However, such an interpretation could result in a

demonstration showing that very small NOx reductions provide an

adequate substitute for large VOC reductions. This is because

under some conditions substantial VOC reductions produce only

small - even insignificant - reductions in ozone concentrations,

while minimal NOx reductions under the same conditions may

produce the same degree of ozone reductions. EPA believes

Congress would not have intended States to meet the Act's

progress requirements with emissions reductions that would

produce only minimal improvement in ozone concentrations.

The second sentence of Section 182(c)(2)(C) requires EPA to

issue guidance "concerning the conditions under which NOx control

may be substituted for [or combined with] VOC control." In

particular, the Agency is authorized to address in the guidance

the appropriate amounts of VOC control and NOx control needed, in

combination, "in order to maximize the reduction in ozone air

pollution." Further, the Act explicitly provides that the

guidance may permit RFP demonstrations which allow a lower

percentage of VOC emission reductions. The implicit assumption

under that language is that such lesser levels of VOC reductions

would be allowed only because of the correspondingly higher
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percentage of NOx emission reductions to be authorized as a full

or partial substitution for the otherwise required VOC

reductions. In light of the entire set of language and

Congress's evident intent under this subsection to maximize the

opportunity for ozone reductions, EPA believes that Section

182(c)(2)(C) confers on the Agency the discretion to select, for

purposes of determining equivalent reductions, a percentage of

NOx emission reductions which is reasonably calculated to achieve

both the ozone reduction and attainment progress goals intended

by Congress. Nothing in the Act or in the legislative history

directly addresses the case where NOx reductions that are

substituted for VOC reductions, and which meet the plain

grammatical meaning of "equivalency," nonetheless result in

insignificant ozone reductions. To avoid such a result and give

meaningful effect to what Congress likely intended regarding the

substitution provision, EPA has decided to rely in its NOx

substitution guidance on the only point of reference provided by

Congress concerning what may constitute an appropriate

quantitative reduction target for RFP purposes, namely the 3

percent per year required under Section 182(c)(2)(B). Under that

approach, EPA would approve substitutions of NOx for VOC that

would ensure that the sum of the respective creditable percent

reductions of each of these pollutants areawide, averaged over 3

years, would be no less than 3 percent from the baseline. 

As additional evidence that Congress was concerned with

getting more than minimal reductions in ozone concentrations

through substitution, EPA notes that the RFP demonstration

described in Section 182(c)(2)(B) focuses on reductions of a

specified quantity of VOC emissions per year. (Similarly, the 15

percent RFP reductions required for Moderate ozone nonattainment

areas focuses on reductions of that specific quantity of VOC

emissions per year.) By contrast, the alternative RFP

demonstration in Section 182(c)(2)(C) allows flexible VOC/NOx

emission reduction strategies, but only so long as the overall

quantitative reduction in ozone concentrations is equivalent to

the amount which, for Serious ozone nonattainment areas, Congress

initially determined must be met (i.e., the ozone concentrations

achieved by VOC reductions of 3 percent per year) in order to

ensure expeditious progress towards attainment. In this regard

the House Committee Report states: "NOx reductions may not be

substituted for VOC reductions in a manner that delays attainment

of the ozone standard or that results in lesser annual reductions

in ozone concentration than provided for in the attainment

demonstration." H.R. Resp NO. 490, 101st Cong., 2d Sess. 239

(1990).
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Section 5: Summary

The RFP requirements under Section 182(c)(2)(B) of the CAA

are intended to insure that the SIP "provide for such specific

annual reductions in emissions of VOC and NOx as necessary to

attain the NAAQS for ozone by the applicable attainment date." 

This language is interpreted to mean that, to meet the RFP

requirement, it is necessary to show that steady progress is

being made toward implementing measures called for in an area's

attainment strategy. Further, the Act also specifies minimal

annual percentage reductions in creditable emissions which must

be realized in an RFP program. Section 182(c)(2)(C) increases

the flexibility in which the annual emission reductions can be

derived by allowing NOx emission reductions substitution for VOC

after 1996. The recommended procedure responds to these concerns

by imposing two requirements.

1. Establish a strategy incorporating reductions in VOC

and/or NOx sufficient to meet the NAAQS within

timeframes specified by the Act. This is to be done

using approved photochemical grid models in a manner

consistent with published Agency guidance on the use of

such models in attainment demonstrations. In the

context of the NOx substitution guidance, the purpose

of this first step is to establish an ultimate target

toward which the RFP program is aimed.

2. For interim years, any mix of annual reductions in VOC

and NOx is permissible so long as it reflects 

(a) a logical step toward implementing the attainment

strategy identified in (1), and

(b) results in a combined annual VOC and NOx reduction

of 3% per year.

The requirement for continuous VOC emission reductions

amounting to 3% per year has been modified to allow flexibility

in the mix of VOC and NOx emission reductions, while maintaining

a 3% per year reduction in the sum of NOx and VOC emissions. A

principal assumption underlying this guidance is that optimum

control strategy designs may differ among various nonattainment

areas.

The NOx substitution provision permits greater flexibility

for States in designing effective emissions control strategies. 

Furthermore, because the test for equivalency is identical to the

NAAQS attainment test for serious and above areas, the

demonstration imposes negligible additional resource burdens for
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those areas already required to perform gridded photochemical

modeling.