Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15249 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use. We have 

determined that it is not a ‘‘significant 

energy action’’ under that order because 

it is not a ‘‘significant regulatory action’’ 

under Executive Order 12866 and is not 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. The Administrator of the Office 

of Information and Regulatory Affairs 

has not designated it as a significant 

energy action. Therefore, it does not 

require a Statement of Energy Effects 

under Executive Order 13211. 

Technical Standards 

The National Technology Transfer 

and Advancement Act (NTTAA) (15 

U.S.C. 272 note) directs agencies to use 

voluntary consensus standards in their 

regulatory activities unless the agency 

provides Congress, through the Office of 

Management and Budget, with an 

explanation of why using these 

standards would be inconsistent with 

applicable law or otherwise impractical. 

Voluntary consensus standards are 

technical standards (e.g., specifications 

of materials, performance, design, or 

operation; test methods; sampling 

procedures; and related management 

systems practices) that are developed or 

adopted by voluntary consensus 

standards bodies. 

This proposed rule does not use 

technical standards. Therefore, we did 

not consider the use of voluntary 

consensus standards. 

Environment 

We have analyzed this proposed rule 

under Department of Homeland 

Security Management Directive 023–01 

and Commandant Instruction 

M16475.lD, which guide the Coast 

Guard in complying with the National 

Environmental Policy Act of 1969 

(NEPA)(42 U.S.C. 4321–4370f), and 

have made a preliminary determination 

that this action is one of a category of 

actions that do not individually or 

cumulatively have a significant effect on 

the human environment. This rule 

removes one anchorage area and 

establishes one new anchorage area 

where commercial vessels already 

regularly anchor. We seek any 

comments or information that may lead 

to the discovery of a significant 

environmental impact from this 

proposed rule. A preliminary 

environmental analysis checklist is 

available in the docket where indicated 

under ADDRESSES. 

List of Subjects in 33 CFR Part 110 

Anchorage grounds. 

For the reasons discussed in the 

preamble, the Coast Guard proposes to 

amend 33 CFR part 110 as follows: 

PART 110—ANCHORAGE 

REGULATIONS 

1. The authority citation for part 110 

continues to read as follows: 

Authority: 33 U.S.C. 471; 1221 through 

1236, 2030, 2035, 2071; 33 CFR 1.05–1; 

Department of Homeland Security Delegation 

No. 0170.1. 

2. Remove and reserve 

§ 110.145(a)(2)(ii), consisting of 

introductory text and paragraphs (a) 

through (e). 

3. Add § 110.149 to subpart B to read 

as follows: 

§ 110.149 Narragansett Bay, RI 

(a) Brenton Point anchorage 

ground. An area bounded by the 

following coordinates: 41°22′37.1′′ N, 

71°14′40.3′′ W; thence to 41°20′42.8′′ N, 

71°14′40.3′′ W; thence to 41°18′24.1′′ N, 

71°20′32.5′′ W; thence to 41°20′22.6′′ N, 

71°20′32.5′′ W; thence back to point of 

origin. 

(b) The following regulations apply in 

the Brenton Point anchorage ground. 

(1) Prior to anchoring within the 

anchorage area, all vessels shall notify 

the Coast Guard Captain of the Port via 

VHF–FM Channel 16. 

(2) Except as otherwise provided, no 

vessel may occupy this anchorage 

ground for a period of time in excess of 

96 hours without prior approval of the 

Captain of the Port. 

(3) If a request is made for the longterm layup of a vessel, the Captain of 

the Port may establish special 

conditions with which the vessel must 

comply in order for such a request to be 

approved. 

(4) No vessel in such condition that it 

is likely to sink or otherwise become a 

menace or obstruction to navigation or 

anchorage of other vessels shall occupy 

an anchorage except in cases where 

unforeseen circumstances create 

conditions of imminent peril to 

personnel and then only for such period 

as may be authorized by the Captain of 

the Port. 

(5) Anchors shall be placed well 

within the anchorage areas so that no 

portion of the hull or rigging will at any 

time extend outside of the anchorage 

area. 

(6) The Coast Guard Captain of the 

Port may close the anchorage area and 

direct vessels to depart the anchorage 

during periods of adverse weather or at 

other times as deemed necessary in the 

interest of port safety and security. 

(7) Any vessel anchored in these 

grounds must be capable of getting 

underway if ordered by the Captain of 

the Port and must be able to do so 

within two hours of notification by the 

Captain of the Port. If a vessel will not 

be able to get underway within two 

hours of notification, permission must 

be requested from the Captain of the 

Port to remain in the anchorage. No 

vessel shall anchor in a ‘‘dead ship’’ 

status (propulsion or control 

unavailable for normal operations) 

without prior approval of the Captain of 

the Port. 

(8) Brenton Point anchorage ground is 

a general anchorage area reserved 

primarily for commercial vessels 

waiting to enter Narragansett Bay. 

(9) Temporary floats or buoys for 

marking anchors or moorings in place 

will be allowed in this area. Fixed 

mooring piles or stakes will not be 

allowed. 

(10) All coordinates referenced use 

datum: NAD 83. 

Dated: March 3, 2011. 

Daniel A. Neptun, 

Rear Admiral, U.S. Coast Guard, Commander, 

First Coast Guard District. 

[FR Doc. 2011–6498 Filed 3–18–11; 8:45 am] 

BILLING CODE 9110–04–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 51, 52, 70, and 71 

[EPA–HQ–OAR–2011–0083; FRL–9283–8] 

RIN 2060–AQ79 

Deferral for CO2 Emissions From 

Bioenergy and Other Biogenic Sources 

Under the Prevention of Significant 

Deterioration (PSD) and Title V 

Programs: Proposed Rule 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: This action proposes to defer 

for a period of three (3) years the 

application of the Prevention of 

Significant Deterioration (PSD) and Title 

V permitting requirements to biogenic 

carbon dioxide (CO2) emissions from 

bioenergy and other biogenic stationary 

sources. This action is being taken as 

part of the process of granting the 

Petition for Reconsideration filed by the 

National Alliance of Forest Owners 

(NAFO) on August 3, 2010, related to 

the PSD and Title V Greenhouse Gas 

Tailoring Rule. 

DATES: Comments. Comments must be 

received on or before May 5, 2011. 

Public Hearing. EPA will hold one 

hearing on this action. The hearing will 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15250 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

be conducted on April 5, 2011, in the 

Washington, DC area. The EPA will 

provide further information about the 

hearing on its Web page: http:// 

www.epa.gov/NSR/actions.html. To 

register to speak at the hearing, please 

go to the Web page: http://www.epa.gov/ 

NSR/actions.html or contact the person 

listed in the FOR FURTHER INFORMATION

CONTACT section. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ– 

OAR–2011–0083 by one of the following 

methods: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the online 

instructions for submitting comments. 

E-mail: GHGbiogenic@epa.gov. 

Include docket ID No. EPA–HQ–OAR– 

2011–0083 in the subject line of the 

message. 

Fax: (202) 566–9744. 

Mail: Environmental Protection 

Agency, EPA Docket Center (EPA/DC), 

Mailcode 28221T, Attention Docket ID 

No. EPA–HQ–OAR–2011–0083, 1200 

Pennsylvania Avenue, NW., 

Washington, DC 20460. 

Hand/Courier Delivery: EPA Docket 

Center, Public Reading Room, EPA West 

Building, Room 3334, 1301 Constitution 

Avenue, NW., Washington, DC 20004. 

Phone: (202) 566–1744. Such deliveries 

are only accepted during the Docket’s 

normal hours of operation, and special 

arrangements should be made for 

deliveries of boxed information. 

Instructions: Direct your comments to 

Docket ID No. EPA–HQ–OAR–2011– 

0083. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available online at http:// 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be confidential business 

information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through http:// 

www.regulations.gov or e-mail. Send or 

deliver information identified as CBI to 

only the mail or hand/courier delivery 

address listed above, attention: Docket 

ID No. EPA–HQ–OAR–2011–0083. The 

http://www.regulations.gov Web site is 

an ‘‘anonymous access’’ system, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an e-mail comment directly 

to EPA without going through http:// 

www.regulations.gov your e-mail 

address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

made available on the Internet. If you 

submit an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. 

Docket: All documents in the docket 

are listed in the http:// 

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available, e.g., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

will be publicly available only in hard 

copy. Publicly available docket 

materials are available either 

electronically in http:// 

www.regulations.gov or in hard copy at 

the Air Docket, EPA/DC, EPA West, 

Room 3334, 1301 Constitution Ave., 

NW., Washington, DC. This Docket 

Facility is open from 8:30 a.m. to 4:30 

p.m., Monday through Friday, excluding 

Federal holidays. The telephone number 

for the Public Reading Room is (202) 

566–1744, and the telephone number for 

the Air Docket is (202) 566–1742. 

FOR FURTHER INFORMATION CONTACT: 

Carole Cook, Climate Change Division, 

Office of Atmospheric Programs (MC– 

6207J), Environmental Protection 

Agency, 1200 Pennsylvania Ave., NW., 

Washington, DC 20460; telephone 

number: (202) 343–9334; fax number: 

(202) 343–2342; e-mail address: 

biodeferralPSD@epa.gov. 

Worldwide Web (WWW): In addition 

to being available in the docket, an 

electronic copy of today’s proposal, 

memoranda to the docket, and all other 

related information will also be 

available through the WWW on EPA’s 

Web site at http://www.epa.gov/NSR/ 

actions.html 

SUPPLEMENTARY INFORMATION: Acronyms 

and Abbreviations. The following 

acronyms and abbreviations are used in 

this document. 

ANPR Advanced notice of proposed 

rulemaking 

BACT Best Available Control Technology 

BAU Business as Usual 

CAA Clean Air Act 

CAR U.S Climate Action Report 

CBI Confidential Business Information 

CFI Call for Information 

CFR Code of Federal Regulations 

CH4 methane 

CO2 Carbon dioxide 

CO2e Carbon dioxide equivalents 

EO Executive Order 

EPA U.S. Environmental Protection Agency 

FR Federal Register 

GHG Greenhouse gas 

GWP Global warming potential 

HFC Hydrofluorocarbon 

ICR Information Collection Request 

IPCC Intergovernmental Panel on Climate 

Change 

LULUCF Land-Use, Land-Use Change and 

Forestry 

MSW Municipal solid waste 

N2O Nitrous oxide 

NAFO National Alliance of Forest Owners 

NAAQS National Ambient Air Quality 

Standards 

NOX Nitrogen oxides 

NSPS New Source Performance Standards 

NSR New Source Review 

NTTAA National Technology Transfer and 

Advancement Act of 1995 

OMB Office of Management and Budget 

PFC Perfluorocarbon 

PSD Prevention of Significant Deterioration 

PTE Potential to Emit 

RFA Regulatory Flexibility Act 

SMC Significant monitoring concentration 

SF6 sulfur hexafluoride 

SIL Significant impact level 

SIP State implementation plan 

SMC Significant monitoring concentration 

Tg Teragram 

tpy Tons per year 

U.S. United States 

UMRA Unfunded Mandates Reform Act 

UNFCCC United Nations Framework 

Convention on Climate Change 

USDA U.S. Department of Agriculture 

WWW Worldwide Web 

Table of Contents 

I. General Information 

A. What is the purpose of this action? 

B. Does this action apply to me? 

C. What are biogenic CO2 emissions? 

D. What should I consider as I prepare my 

comments to EPA? 

II. Relevant Background 

A. Carbon Source and Sink Dynamics 

B. PSD, Title V, and Tailoring Rule 

C. Complexity of Determining Net 

Atmospheric Impact of CO2 Emissions 

and Incorporating This Information Into 

the PSD and Title V Programs 

D. Designing and Implementing an 

Accounting Approach 

III. Interim Deferral of Biogenic CO2

Emissions Under the PSD and Title V 

Permitting Programs 

A. General Rationale and Legal 

Justification for the Interim Deferral 

B. CO2 Emissions That Are Deferred 

C. Non-CO2 GHGs 

D. Mechanism for Deferral and State 

Implementation 

E. Requesting Comment 

IV. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform Act 

(UMRA) 

E. Executive Order 13132: Federalism 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15251 

1See Docket EPA–HQ–OAR–2011–0083 for 

copies of the letters or http://www.epa.gov/nsr/ 

actions.html#jan11. 

2Non-fossilized and biodegradable organic 

material originating from plants, animals or microorganisms (including products, by-products, 

residues and waste from agriculture, forestry and 

related industries as well as the non-fossilized and 

biodegradable organic fractions of industrial and 

municipal wastes, including gases and liquids 

recovered from the decomposition of non-fossilized 

and biodegradable organic material). 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer and 

Advancement Act 

J. Executive Order 12898: Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Clean Air Act section 307 

I. General Information 

A. What is the purpose of this action? 

This action proposes to defer for a 

period of three (3) years the 

consideration of CO2 emissions from 

bioenergy and other biogenic sources 

(hereinafter referred to as ‘‘biogenic CO2

emissions’’) when determining whether 

a stationary source meets the Prevention 

of Significant Deterioration (PSD) and 

Title V applicability thresholds, 

including those for the application of 

Best Available Control Technology 

(BACT). Stationary sources that combust 

biomass and construct or modify during 

the deferral period will avoid the 

application of PSD to the biogenic CO2

emissions resulting from those actions. 

This deferral applies only to CO2

emissions and does not affect non-GHG 

pollutants or other greenhouse gases 

(GHGs) (e.g., methane (CH4) and nitrous 

oxide (N2O)) emitted from the 

combustion of biomass fuel. Also, this 

does not affect any other EPA programs 

that pertain to stationary sources, such 

as New Source Performance Standards 

(NSPS) or the GHG Reporting Program. 

On January 12, 2011, EPA explained 

in letters to Members of Congress and to 

the National Alliance of Forest Owners 

(NAFO), the steps that the Agency 

intends to take to address the issues 

associated with biogenic CO2 emissions 

from stationary sources.1 First, EPA 

granted a Petition for Reconsideration 

filed by the NAFO on August 3, 2010, 

related to the PSD and Title V 

Greenhouse Gas Tailoring Rule (75 FR 

31514, June 3, 2010) (‘‘Tailoring Rule’’). 

Second, the Agency is proposing this 

rule to defer for three years the 

application of the PSD and Title V 

permitting requirements to biogenic CO2

emissions from stationary sources. 

Third, concurrent with this rulemaking, 

we are providing an interim guidance 

document (discussed further in section 

III.D.3) to help permitting authorities 

establish a basis for concluding that 

BACT for biogenic CO2 emissions at 

stationary sources is the combustion of 

biomass fuels by itself. Fourth, EPA will 

be conducting a detailed examination of 

the science associated with biogenic 

CO2 emissions from stationary sources. 

This examination will include 

discussion with partners and scientists 

both inside and outside the Federal 

government, as well as engagement with 

an independent scientific panel, to 

consider technical issues that the 

Agency must resolve in order to account 

for biogenic CO2 emissions in ways that 

are scientifically sound and also 

manageable in practice (discussed 

further in section II.C and II.D). Finally, 

EPA intends to use the feedback from 

the scientific and technical review to 

develop a rulemaking on how these 

emissions should be treated and 

accounted for in PSD and Title V 

permitting. 

B. Does this action apply to me? 

This action applies to stationary 

sources that emit biogenic CO2. 

TABLE 1—EXAMPLES OF AFFECTED ENTITIES BY CATEGORY

Category NAICS Examples of affected facilities 

Biomass combustion .................. 221 Electric utilities burning biomass fuels. 

321 Wood products manufacturing, and wood pellet fuel manufacturing. 

322 Pulp and paper manufacturing. 

Municipal solid waste combustion.562213 Solid waste combustors and incinerators. 

Sources/users of biogas ............ 112 Animal production manure management operations. 

221320 Sewage treatment facilities. 

562212 Solid waste landfills. 

Fermentation processes ............ 325193 Ethanol manufacturing. 

Other .......................................... 311/312 Food/Beverage processors burning agricultural biomass residues, using fermentation processes, or producing/using biogas from anaerobic digestion of waste materials. 

Table 1 of this preamble lists the 

types of entities that potentially could 

be affected by the deferral covered by 

this proposal. This list is not intended 

to be exhaustive, but rather provides a 

guide for readers regarding facilities 

likely to be affected by this action. Note 

that this rule does not make or infer any 

policy determination on the part of EPA 

as to whether, or what part of, emissions 

from any of these sources may be 

determined ‘‘fugitive’’ emissions for the 

purposes of accounting and 

applicability under air permitting 

requirements. Such determinations are 

not within the scope of this rule and are 

part of the case-by-case application and 

review process established under the 

regulations covering these permitting 

requirements. If you have questions 

regarding the applicability of this action 

to a particular facility, consult the 

person listed in the FOR FURTHER

INFORMATION CONTACT section of this 

preamble. 

C. What are biogenic CO2 emissions? 

Carbon dioxide emissions from 

bioenergy and other biogenic sources 

(hereinafter referred to as ‘‘biogenic CO2

emissions’’) are generated during the 

combustion or decomposition of 

biologically-based material .2 In this 

action we are addressing only the CO2

emissions from biogenic sources, not 

emissions of other GHGs or non-GHG 

pollutants. The term ‘‘biogenic CO2

emissions’’ is defined here as emissions 

of CO2 from a stationary source directly 

resulting from the combustion or 

decomposition of biologically-based 

materials other than fossil fuels. 

Examples of ‘‘biogenic CO2 emissions’’ 

include, but are not limited to: 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15252 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

3 ‘‘Inventory of U.S. Greenhouse Gas Emissions 

and Sinks: 1990–2008,.’’ U.S. Environmental 

Protection Agency, EPA 430–R–10–006, (April 15, 

2010). http://www.epa.gov/climatechange/ 

emissions/usinventoryreport.html. (incorporated by 

reference into Docket EPA–HQ–OAR–2011–0083) 

• CO2 generated from the biological 

decomposition of waste in landfills, 

wastewater treatment or manure 

management processes; 

• CO2 from the combustion of biogas 

collected from biological decomposition 

of waste in landfills, wastewater 

treatment or manure management 

processes; 

• CO2 from fermentation during 

ethanol production; 

• CO2 from combustion of the 

biological fraction of municipal solid 

waste or biosolids; 

• CO2 from combustion of the 

biological fraction of tire-derived fuel; 

and 

• CO2 derived from combustion of 

biological material, including all types 

of wood and wood waste, forest residue, 

and agricultural material. 

For stationary sources co-firing fossil 

fuel and biologically-based fuel, and/or 

combusting mixed fuels (e.g., tirederived fuels, municipal solid waste 

(MSW), etc.), the biogenic CO2

emissions from that combustion are 

included in this deferral. However, as 

stated above, the fossil CO2 emissions 

are not. Various methods are available 

to calculate both the biogenic and fossil 

portions of CO2 emissions, including 

those methods contained in the GHG 

Reporting Program (40 CFR part 98). 

EPA is requesting comment on whether 

this deferral should specify that 

stationary sources subject to the PSD 

and Title V programs use a specific 

method(s) for determining their biogenic 

CO2 emissions. EPA also seeks comment 

on other ways to ensure there is an 

accurate estimate of how much biogenic 

CO2 is subject to the deferral for a 

specific facility, particularly when 

combusting mixed fuels. 

D. What should I consider as I prepare 

my comments to EPA? 

1. Submitting CBI 

Clearly mark the part or all of the 

information that you claim to be CBI. 

For CBI information in a disk or CD 

ROM that you mail to EPA, mark the 

outside of the disk or CD ROM as CBI 

and then identify electronically within 

the disk or CD ROM the specific 

information that is claimed as CBI. In 

addition to one complete version of the 

comment that includes information 

claimed as CBI, a copy of the comment 

that does not contain the information 

claimed as CBI must be submitted for 

inclusion in the public docket. 

Information marked as CBI will not be 

disclosed except in accordance with 

procedures set forth in 40 CFR part 2. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through http:// 

www.regulations.gov or e-mail. Send or 

deliver information identified as CBI to 

only the mail or hand/courier delivery 

address listed above, attention: Docket 

ID No. EPA–HQ–OAR–2011–0083. 

If you have any questions about CBI 

or the procedures for claiming CBI, 

please consult the person identified in 

the FOR FURTHER INFORMATION CONTACT

section. 

2. Tips for Preparing Your Comments 

When submitting comments, 

remember to: 

Identify the rulemaking by docket 

number and other identifying 

information (e.g., subject heading, 

Federal Register date and page number). 

Follow directions. EPA may ask you 

to respond to specific questions or 

organize comments by referencing a 

CFR part or section number. 

Explain why you agree or disagree; 

suggest alternatives and substitute 

language for your requested changes. 

Describe any assumptions and 

provide any technical information and/ 

or data that you used. 

If you estimate potential costs or 

burdens, explain how you arrived at 

your estimate in sufficient detail to 

allow for it to be reproduced. 

Provide specific examples to illustrate 

your concerns and suggest alternatives. 

Explain your views as clearly as 

possible, avoiding the use of profanity 

or personal threats. 

Make sure to submit your information 

and comments by the comment period 

deadline identified in the preceding 

section titled DATES. To ensure proper 

receipt by EPA, be sure to identify the 

docket ID number assigned to this 

action in the subject line on the first 

page of your response. You may also 

provide the name, date, and Federal 

Register citation. 

To expedite review of your comments 

by Agency staff, you are encouraged to 

send a separate copy of your comments, 

in addition to the copy you submit to 

the official docket, to Carole Cook, U.S. 

EPA, Office of Atmospheric Programs, 

Climate Change Division, Mail Code 

6207–J, Washington, DC, 20460, 

telephone (202) 343–9263, e-mail 

GHGbiogenic@epa.gov. You are also 

encouraged to send a separate copy of 

your CBI information to Carole Cook at 

the provided mailing address in the FOR

FURTHER INFORMATION CONTACT section. 

Please do not send CBI information to 

the electronic docket or by e-mail. 

II. Relevant Background 

The purpose of this section is to 

provide relevant background on this 

action. Section II.A provides basic 

information on biogenic CO2 emissions 

including the relevant information 

concerning carbon source and sink 

dynamics and how biogenic CO2

emissions are accounted for in the 

Inventory of U.S. Greenhouse Gas 

Emissions and Sinks (Inventory).3 While 

we are presenting this information for 

context, as explained in that section and 

in later parts of this preamble, the 

Inventory is an annual report that tracks 

US GHG emissions and sinks at the 

national scale. The Inventory is not 

intended to quantify the net 

atmospheric impacts of a particular type 

of fuel from a stationary source over a 

specified time period that extends into 

the future. 

Section II.B identifies general 

information concerning the PSD and 

Title V permitting programs and the 

steps EPA undertook in the GHG PSD 

and Title V Tailoring Rule to implement 

the requirements of those permitting 

programs in a common sense manner, 

given congressional intent and the 

overwhelming administrative burden 

that would otherwise have resulted if 

EPA were to apply the permitting 

programs to GHG at the statutory PSD 

and Title V thresholds. The relevant 

history and information concerning 

EPA’s treatment of biomass under the 

Tailoring Rule and in subsequent GHG 

permitting guidance and other actions is 

also addressed. 

Section II.C sets forth the 

complexities associated with 

determining the net atmospheric impact 

of biogenic CO2 emissions and factors to 

consider to ensure the determinations 

are sound from a practical, predictable 

and scientific basis when accounting for 

these emissions in the PSD and Title V 

Programs. 

Section II.D discusses information 

that is lacking and needed for EPA to 

determine how to account for the net 

atmospheric impact of CO2 emissions 

from various types of feedstocks and 

facilities. 

A. Carbon Source and Sink Dynamics 

1. Cycling of CO2 Between Plants and 

the Atmosphere 

Through relatively rapid 

photosynthesis, plants absorb CO2 from 

the atmosphere and add it to their 

biomass, which contains roughly 50% 

carbon by weight, through a process 

called sequestration. Some of the carbon 

absorbed by plants may eventually be 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15253 

4 ‘‘Revised 1996 IPCC Guidelines for National 

Greenhouse Gas Inventories,’’ Intergovernmental 

Panel on Climate Change (IPCC), Prepared by the 

National Greenhouse Gas Inventories Programme. 

(1996.). http://www.ipcc-nggip.iges.or.jp/public/gl/ 

invs1.html. 

5 ‘‘Revised 1996 IPCC Guidelines for National 

Greenhouse Gas Inventories,’’ Intergovernmental 

Panel on Climate Change (IPCC), Prepared by the 

National Greenhouse Gas Inventories Programme 

(1996). http://www.ipcc-nggip.iges.or.jp/public/gl/ 

invs1.html. Reference Manual (Vol. 3), Page 1.10. 

6The Energy Sector of the Inventory does include 

emissions of CH4 and N2O from the combustion of 

biomass for energy. These emissions are included 

in this sector because their magnitude is dependent 

on the specific way in which the fuel is burned (i.e., 

combustion technology and operating conditions), 

which cannot be known by analyzing the changes 

in the amount of carbon in standing biomass. 

transferred from dead organic matter to 

the soil where it can remain for long 

periods of time. Plant biomass, dead 

organic matter, and soil carbon are 

‘‘pools’’ that together make up the 

carbon stock on a given area of land. 

Carbon can cycle fairly rapidly back to 

the atmosphere or it can remain stored 

on land. Stored carbon can be released 

naturally back into the atmosphere as 

CO2 through decomposition or plant 

respiration. 

When biological material such as 

plant biomass is harvested or cleared 

from the land, burned for energy, used 

as an input to an industrial process, or 

biodegraded as part of waste treatment 

processes, the material acts as a source 

of carbon, releasing its stored carbon 

back into the atmosphere as CO2. Over 

large spatial scales such as States, 

regions, or continents, if more carbon is 

sequestered in plant biomass than is 

emitted to the atmosphere through 

processes such as harvest, fire, or 

natural decomposition, plant biomass 

acts as a net sink for carbon. Conversely, 

if more carbon is released than is 

sequestered, plant biomass acts as a net 

source for carbon. Soils can also be net 

sources or sinks depending on the 

balance of carbon added from biomass 

and lost through disturbances such as 

tillage or deforestation. 

2. Treatment of Biogenic CO2 Emissions 

in the U.S. GHG Inventory 

National-level GHG inventories are a 

common starting point for 

quantification of the source and sink 

status for particular land areas. The 

Inventory tracks annual GHG emissions 

including emissions of CO2, CH4, N2O, 

hydrofluorocarbons (HFCs), 

perfluorocarbons (PFCs), and sulfur 

hexafluoride (SF6). The United States 

(U.S.) has submitted the Inventory to the 

Secretariat of the United Nations 

Framework Convention on Climate 

Change (UNFCCC) under its obligation 

as a Party to the Convention every year 

since 1993. The UNFCCC, ratified by the 

U.S. in 1992, defines the overall 

framework for intergovernmental efforts 

to tackle the challenge posed by climate 

change. The Inventory submitted by the 

U.S. is consistent with national 

inventory data submitted by other 

UNFCCC Parties, and uses 

internationally accepted methodologies 

established by the Intergovernmental 

Panel on Climate Change (IPCC). 

The Revised 1996 IPCC Guidelines 

(IPCC Guidelines) 4 provide 

methodologies for estimating all 

anthropogenic sources and sinks of GHG 

emissions at the national scale, 

classified into six broad sectors: Energy, 

Industrial Processes, Solvents and Other 

Product Uses, Agriculture, Land-Use 

Change and Forestry (LUCF), and Waste. 

The Energy Sector includes all GHGs 

emitted during the production, 

transformation, handling and 

consumption of energy commodities, 

including fuel combustion. The 

LULUCF Sector includes emissions and 

sequestration resulting from human 

activities that influence the way land is 

used or that affect the size of carbon 

stocks on land. According to the IPCC 

Guidelines, CO2 emissions from biomass 

combustion: 

should not be included in national CO2

emissions from fuel combustion. If energy 

use, or any other factor, is causing a long 

term decline in the total carbon embodied in 

standing biomass (e.g. forests), this net 

release of carbon should be evident in the 

calculation of CO2 emissions described in the 

Land Use Change and Forestry chapter.5

Thus, at the national level, these CO2

emissions are not included in the 

estimate of emissions from a country’s 

Energy Sector, even though the 

emissions physically occur at the time 

and place in which useful energy is 

being generated (i.e., at a power plant or 

other stationary source). The purpose of 

this accounting convention is to avoid 

double-counting of CO2 emissions from 

the Energy Sector and LULUCF Sector 

that would provide a misleading 

characterization of a country’s 

contribution to global GHG. Carbon 

dioxide emissions from a subset of 

bioenergy sources are reported as 

information items in the Energy Sector 

of the Inventory, but are not included in 

national fuel-combustion totals to avoid 

this double-counting at the national 

scale.6

The Inventory is a comprehensive 

report of emissions and sinks at the 

national scale. All biogenic CO2

emissions, as defined in this deferral, 

are also included in the Inventory. 

However, because the Inventory is 

organized by broad sector, not by 

facility type, this deferral covers 

biogenic CO2 emissions that may be 

reported in any sector of the Inventory. 

3. Accounting for Carbon Stocks on 

Land in the U.S. GHG Inventory 

The LULUCF Sector includes all of 

the land-based source categories of GHG 

emissions and sinks. In the Inventory, 

EPA’s estimate of emissions and sinks 

from U.S. land areas is divided into 

forest land, crop land, grassland, 

wetlands, settlements, and other land. 

The largest stocks of carbon are found 

on forestlands. 

Data from the U.S. Department of 

Agriculture (USDA) Forest Service 

Forest Inventory and Analysis Program 

are used to develop national-scale 

estimates of forest carbon stocks and 

carbon stock change. The methodology 

relies on annual or periodic surveys to 

assess changes in carbon stocks over the 

entire forest land base. The overall 

change in land-based forest carbon 

stocks from year to year represents the 

net carbon balance between atmosphere 

and forest land. Importantly, this 

measurement of the net change in forest 

carbon stocks integrates and inherently 

includes all of the factors that might 

influence forest carbon stocks, such as 

insect outbreaks, wildfire, prescribed 

fire, all types of harvest (including 

harvest for bioenergy uses), forest 

management, enhanced growth, and 

land use change. As noted earlier, when 

trees are harvested and combusted to 

generate bioenergy, the CO2 combustion 

emissions do not occur in the forest but 

rather in a power plant or industrial 

facility. Following the convention 

established by the IPCC in the 

Guidelines, EPA counts these emissions 

as part of the LULUCF sector for the 

official US Inventory. 

In assessing CO2 emissions from the 

LULUCF Sector, EPA looks to the net 

change in carbon stocks. Over the time 

period of interest, if the net change in 

forest carbon stocks is positive, then 

more carbon was sequestered on land in 

carbon pools (such as those described in 

section II.A.1) than was lost to the 

atmosphere (through all of the processes 

previously described, such as 

decomposition, fire, and harvest). In this 

case the land is acting as a net carbon 

sink. If the net change in land-based 

carbon stocks is negative, over the time 

period of interest more carbon was 

emitted to the atmosphere than was 

sequestered on land, and the forest was 

a net source for carbon. 

Averaged over the years 1990–2008, 

data from the Inventory show that the 

LULUCF sector in the U.S. has been a 

net sink of roughly 815 teragrams (Tg) 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15254 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

7 84% of this amount is from carbon stock change 

in the forest source categories; the remainder comes 

from source categories such as Sequestration in 

Urban Trees and carbon stock changes in mineral 

soils on crop land and grassland. U.S. EPA, 

‘‘Inventory of U.S. Greenhouse Gas Emissions and 

Sinks: 1990–2008’’ (See data archived at http://

www.epa.gov/climatechange/emissions/

downloads10/2010–Inventory-Chapter-Tables.zip). 

See also Tables 1 and 2, LULUCF sector C 

storage.pdf. 

8See U.S. EPA, ‘‘Inventory of U.S. Greenhouse 

Gas Emissions and Sinks: 1990–2008.,’’ Table ES– 

4. 

9U.S. Dept. of State, U.S. Climate Action Report 

2010., at 81. http://www.state.gov/documents/

organization/140636.pdf. 

10U.S. EPA., ‘‘Inventory of U.S. Greenhouse Gas 

Emissions and Sinks: 1990–2008.,’’ Annex 3.12 

(Table A–210). http://www.epa.gov/climatechange/

emissions/downloads10/US–GHG–Inventory-2010–

Annex-3–Addtl-Source-Sink-Categories.pdf. 

carbon dioxide equivalent (CO2e) per 

year.7 This sink is about 12% of the 

average gross emissions from all other 

sources combined in the U.S. over the 

same time period.8 Future national 

projections under business as usual 

(BAU), as reported in the Fifth U.S 

Climate Action Report (CAR) submitted 

to the UNFCCC in 2010, suggest that 

this LULUCF sink is likely to continue, 

if not increase in size, at least until 

2020.9

In 2010, for the first time since EPA 

began tracking emissions and sinks, the 

Inventory included estimates of forest 

carbon stocks and stock change at the 

State level. Forestlands in seven (7) U.S. 

States (AZ, CT, ID, LA, MI, ND, and VT) 

were net sources of carbon averaged 

over the time period from 2000 to 2008. 

In one State (AK) the forestland was 

neither a source nor a sink.10

Forestlands in all other States were net 

sinks for carbon over that time period. 

The IPCC Guidelines, as utilized in 

the Inventory, seek to estimate net 

changes in carbon stocks on land for a 

given period of time that occurred in the 

past. However, neither the IPCC 

Guidelines nor the Inventory were 

designed to quantify the net 

atmospheric impacts of a particular type 

of fuel from a stationary source over a 

specified time period, that extends into 

the future. 

4. Distinction Between Biogenic and 

Fossil CO2 Carbon Reservoirs, and 

Between Biogenic CO2 and Non-GHG 

Pollutants 

Once CO2 is emitted to the 

atmosphere, it is not possible to 

distinguish between the radiative 

forcing associated with a molecule of 

CO2 originating from a biogenic source 

and one originating from the 

combustion of fossil fuel. Biogenic CO2

differs qualitatively from fossil CO2 in 

that there is a significant difference 

between fossil carbon and biogenic 

carbon in the length of time required to 

replenish the reservoirs where the 

carbon is stored. For example, many 

coal deposits in North America 

originated during the Carboniferous 

Period, hundreds of millions of years 

ago. In contrast, the reservoirs of carbon 

found on the surface of Earth, in pools 

such as tree biomass and cropland soils, 

have accumulated over decades, not 

millennia. Because these land-based 

biomass carbon stocks can be 

replenished more quickly than fossil 

carbon stocks, these biogenic carbon 

stocks can act as a sink on a far shorter 

time scale than fossil carbon. 

Another way in which biogenic CO2

differs from fossil CO2, as well as from 

other regulated pollutants, is the 

sometimes ambiguous line between the 

net emissions caused by human 

activities and those that occur as part of 

the natural background emission fluxes. 

There are both natural biogenic CO2

emissions and anthropogenic biogenic 

CO2 emissions. For example, fires, 

decomposition, and plant respiration all 

result in substantial biogenic emissions 

of CO2. These transfers of CO2 between 

land and atmosphere are critical to the 

maintenance of life on Earth. However, 

human activities, such as forest and 

land management practices (i.e., 

anthropogenic biogenic CO2 emissions), 

can also influence the release of CO2

from natural systems. There are 

challenges in categorizing the biogenic 

CO2 emissions that would have 

occurred naturally and those 

attributable to human activity. While 

the Inventory accounts for all 

anthropogenic biogenic CO2 emissions 

at the national level, this deferral and 

the Agency’s intent to collaborate with 

Federal partners and the scientific 

community to conduct a detailed 

examination of the science associated 

with biogenic CO2 emissions and 

technical issues in accounting for those 

emissions at stationary sources is our 

effort to better characterize these 

distinctions and the associated impacts. 

B. PSD, Title V, and Tailoring Rule 

Central to today’s action are the PSD 

and Title V programs and their 

applicability requirements. This section 

provides background information on 

those programs as relevant for today’s 

action. 

1. The PSD Program 

The PSD program is a preconstruction 

review and permitting program 

applicable to ‘‘new major stationary 

sources’’ and ‘‘major modifications’’ at 

existing major stationary sources, in the 

terminology of EPA’s implementing 

regulations. The PSD program applies in 

areas meeting the health-based National 

Ambient Air Quality Standards 

(NAAQS) or for which there is 

insufficient information to determine 

whether the area meets the NAAQS. The 

applicability of the PSD program to a 

particular source is determined in 

advance of construction or modification. 

The primary criterion in determining 

PSD applicability is whether the 

proposed project is sufficiently large (in 

terms of its emissions) to be a major 

stationary source or major modification. 

Under the Clean Air Act (CAA), the 

PSD program applies to any ‘‘major 

emitting facility’’ that undertakes 

construction, and such facility is 

defined to include ‘‘any * * * stationary 

sources of air pollutants which emit, or 

have the potential to emit, one hundred 

[or, depending on the source category] 

two hundred and fifty tons per year or 

more of any air pollutant.’’ CAA sections 

165(a), 169(1). In this notice, we refer to 

these levels as the 100/250-tpy 

thresholds. In addition, Congress also 

applied PSD to any existing major 

emitting facility that undertakes a 

‘‘modification,’’ and defined that term to 

include ‘‘any physical change in, or 

change in the method of operation of, a 

stationary source which increases the 

amount of any air pollutant emitted by 

such source or which results in the 

emission of any air pollutant not 

previously emitted.’’ CAA sections 

165(a), 169(2)(C), 111(a)(4). 

The EPA has included these CAA 

requirements in its long-standing 

regulations that implement PSD, 

although the Agency has interpreted 

these requirements so that they apply 

only with respect to air pollutants that 

are subject to regulation under the CAA. 

Specifically, under EPA’s regulations, a 

‘‘major stationary source’’ is any source 

type belonging to a specified list of 28 

source categories which emits or has a 

potential to emit (PTE) 100 tpy or more 

of any pollutant subject to regulation 

under the CAA, or a source of any other 

type which emits or has the potential to 

emit such pollutants in amounts equal 

to or greater than 250 tpy. See, e.g., 40 

CFR 52.21(b)(1). A new source with a 

PTE at or above the applicable ‘‘major 

stationary source threshold’’ amount is 

subject to PSD. 

The regulations also say that PSD 

applies to, not only new construction, 

but also to existing sources that 

undertake a ‘‘major modification,’’ 

which is defined in terms of the 

following three criteria: 

(1) A physical change in, or change in the 

method of operation of, a ‘‘major stationary 

source’’ must occur; 

(2) The change must result in an increase 

in emissions that is ‘‘significant,’’ that is, 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15255 

11Memorandum from Lydia N. Wegman, Deputy 

Director, Office of Air Quality Planning and 

Standards, U.S. EPA, ‘‘Definition of Regulated Air 

Pollutant for Purposes of Title V’’ (April 26, 1993). 

12Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 

(1984). 

13 In the Tailoring Rule, EPA also considered a 

third doctrine, the ‘‘one-step-at-a-time’’ doctrine, 

which authorizes agencies to implement statutory 

requirements a step at a time. This doctrine is not 

relevant to the present rulemaking. 

14Chevron, 467 U.S. at 842–43. 

equal to or above the significance level 

defined for the pollutant in question, e.g., in 

40 CFR 52.21(b)(23); and 

(3) The increase in emissions resulting 

from the change must be a significant net 

emissions increase. 

The level of emissions that is significant 

(also called the ‘‘significance levels’’ or 

the ‘‘significant emissions rate’’) is also 

defined in regulations. See, e.g. 40 CFR 

52.21(b)(23). Generally, significance 

levels for PSD are pollutant specific 

emissions rates. For example, the 

significance level for emissions of 

nitrogen oxides (NOX) is 40 tpy. See, 

e.g., 40 CFR 52.21(b)(23)(i). Under the 

regulations, the increase in emissions 

that results from the modification 

project is added to other 

contemporaneous increases and 

decreases in actual emissions at the 

source, to determine if the net emissions 

increase is significant (equal to or above 

the significance level). 40 CFR 

52.21(b)(23) and (b)(48). 

Under the PSD program, one of the 

principal substantive requirements is 

that a new major source or major 

modification must meet an emissions 

limitation based on application of Best 

Available Control Technology (BACT). 

This emissions limitation must be based 

on the maximum amount of pollutant 

reduction that is achievable for each 

individual source on a case-by-case 

basis, taking into account cost and other 

factors. BACT applies to each ‘‘regulated 

NSR pollutant.’’ While PSD applies if a 

source is determined to be ‘‘major’’ for 

any regulated pollutant, the BACT 

review for such a source must be 

performed for each regulated NSR 

pollutant whose emissions exceed or 

increase by more than its PSD 

significance level (excluding pollutants 

for which the area has been designated 

nonattainment). See 40 CFR 52.21(a)(2), 

(j)(2) and (3) and 40 CFR 52.21(b)(23). 

To identify the pollutants covered by 

the PSD program, EPA regulations 

define the term ‘‘regulated NSR 

pollutant.’’ This definition applies to 

determine both the pollutants subject to 

the BACT requirement and pollutants 

that are counted to determine whether 

a source is a major source required to 

obtain a PSD permit. The term 

‘‘regulated NSR pollutant’’ is 

incorporated into the definition of 

BACT and definitions of ‘‘major 

stationary source’’ and ‘‘major 

modification.’’ 40 CFR 52.21(b)(12); 40 

CFR 52.21(b)(1)–(2). A ‘‘regulated NSR 

pollutant’’ includes any pollutant for 

which a national ambient air quality 

standard has been promulgated and any 

pollutant identified under this 40 CFR 

(b)(50)(i) as a constituent or precursor 

for such pollutant; any pollutant that is 

subject to any standard promulgated 

under section 111 of the Act; any Class 

I or II substance subject to a standard 

promulgated under or established by 

title VI of the Act; any pollutant that 

otherwise is subject to regulation under 

the Act; except that any or all hazardous 

air pollutants either listed in section 112 

of the Act or added to the list pursuant 

to section 112(b)(2) of the Act, which 

have not been delisted pursuant to 

section 112(b)(3) of the Act, are not 

regulated NSR pollutants unless the 

listed hazardous air pollutant is also 

regulated as a constituent or precursor 

of a general pollutant listed under 

section 108 of the Act. 

2. Title V 

The Title V permit program 

establishes operating permit 

requirements that are intended to assure 

sources’ compliance with applicable 

CAA requirements. Title V generally 

does not add new pollution control 

requirements, but it does require that 

each source subject to Title V obtain an 

operating permit that assures 

compliance with all pollution control 

requirements or ‘‘applicable 

requirements’’ required by the CAA (e.g., 

NSPS, and State implementation plan 

(SIP) requirements, including PSD), and 

it requires that certain procedural 

requirements be followed, especially 

with respect to compliance with these 

requirements. ‘‘Applicable 

requirements’’ for Title V purposes 

include stationary source requirements, 

but do not include mobile source 

requirements. Other procedural 

requirements include providing review 

of permits by EPA, States, and the 

public, and requiring permit holders to 

track, report, and annually certify their 

compliance status with respect to their 

permit requirements. 

The CAA applies Title V, through the 

definition of ‘‘major source,’’ to ‘‘any 

stationary facility or source of air 

pollutants which directly emits, or has 

the potential to emit, one hundred tons 

per year or more of any air pollutant.’’ 

CAA sections 502(a), 501(2)(B), 302(j). 

EPA codified in the Tailoring Rule its 

long-established interpretation that this 

definition applies only with respect to 

air pollutants that are subject to 

regulation under the CAA.11

3. Tailoring Rule 

a. Rationale and Requirements 

In the Tailoring Rule, EPA recognized 

that if the applicability provisions of the 

PSD and Title V programs were applied 

literally so that PSD and Title V 

requirements applied to GHG-emitting 

sources at the 100/250 tpy levels 

provided in the CAA, then the 

permitting authorities would be 

overwhelmed by the large numbers of 

permittees and many small sources 

would be unduly encumbered by the 

permitting demands. In light of those 

impacts, EPA concluded that, as a legal 

matter, Congress did not intend that the 

PSD and Title V applicability 

requirements be applied literally to all 

sources emitting GHGs over the major 

source thresholds as of January 2, 

2011—the date by which EPA 

determined that GHGs become subject 

to regulation under the CAA due to the 

motor vehicle rule. Instead, EPA 

concluded that it is authorized to tailor 

those applicability requirements to 

apply PSD and Title V to such sources 

in a phased-in manner, starting with the 

largest sources first. 

Specifically, in the Tailoring Rule, 

EPA has implemented these PSD and 

Title V applicability provisions by 

applying the familiar Chevron 12 twostep framework for interpreting 

administrative statutes, taking into 

account certain legal doctrines. Those 

doctrines, insofar as relevant to the 

Tailoring Rule, are (1) the ‘‘absurd 

results’’ doctrine, which authorizes 

agencies to apply statutory requirements 

differently than a literal reading would 

indicate, as necessary to effectuate 

congressional intent and avoid absurd 

results; and (2) the ‘‘administrative 

necessity’’ doctrine, which authorizes 

agencies to apply statutory requirements 

in a way that avoids impossible 

administrative burdens.13

Under Chevron, the agency must, at 

step 1, determine whether Congress’s 

intent as to the specific matter at issue 

is clear, and, if so, the agency must give 

effect to that intent.14 If congressional 

intent is not clear, then, at step 2, the 

agency has discretion to fashion an 

interpretation that is a reasonable 

construction of the statute. 

To determine congressional intent, 

the agency must first consider the words 

of the statutory requirements, and if 

their literal meaning answers the 

question at hand, then, in most cases, 

the agency must implement those 

requirements by their terms. However, 

under the ‘‘absurd results’’ doctrine, the 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15256 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

15U.S. EPA, ‘‘Inventory of U.S. Greenhouse Gas 

Emissions and Sinks: 1990–2007,’’ at ES–3 (See also 

the SAR GWPs (IPCC 1996) in table 1–2, p. 1–6. 

http://www.epa.gov/climatechange/emissions/

usinventoryreport.html. 

literal meaning of statutory 

requirements should not be considered 

to indicate congressional intent if that 

literal meaning would produce a result 

that is senseless or that is otherwise 

inconsistent with—and especially one 

that undermines—underlying 

congressional purpose. In these cases, if 

congressional intent for how the 

requirements apply to the question at 

hand is clear, the agency should 

implement the statutory requirements 

not in accordance with their literal 

meaning, but rather in a manner that 

most closely effectuates congressional 

intent. If congressional intent is not 

clear, then an agency may select an 

interpretation that is reasonable under 

the statute. 

Under the ‘‘administrative necessity’’ 

doctrine, Congress is presumed, at 

Chevron step 1, to intend that its 

statutory directives to agencies be 

administrable, and not to have intended 

to have written statutory requirements 

that are impossible to administer. 

Therefore, under this doctrine, an 

agency may depart from statutory 

requirements that, by their terms, are 

impossible to administer, but the agency 

may depart no more than necessary to 

render the requirements administrable. 

In the Tailoring Rule, EPA closely 

considered the burdens to the 

permitting authorities of applying PSD 

and Title V to GHG-emitting sources. 

For example, EPA calculated, on a 

national basis, the workload that GHG 

permit applications would entail, and 

compared that to the existing workload 

of permitting authorities. EPA 

concluded that permitting authorities 

would be overwhelmed by permit 

applications if the PSD and Title V 

applicability thresholds were applied 

literally as of January 2, 2011 to the 

GHG emissions from stationary sources. 

In addition, EPA calculated the cost to 

the sources of permitting requirements 

and concluded that many small sources 

would become subject to unduly high 

expenses. 

Accordingly, in applying the Chevron 

analytical framework, in conjunction 

with the absurd results and 

administrative necessity doctrines, EPA 

concluded that Congress intended that 

PSD and Title V apply to the GHGemissions from stationary sources, but 

that, in light of the burdens to the 

permitting authority and the costs to the 

sources of determining applicability of 

permitting requirements by applying the 

statutory thresholds to GHG emissions, 

the application of the permitting 

programs should be phased in, starting 

with the largest sources of GHG 

emissions first. EPA also concluded that 

the calculation of the amount of GHG 

emissions should be based on the 

amount of GHG pollutant emitted in 

tons per year, weighted by the global 

warming potential (GWP) of the 

particular GHG pollutant, normalized to 

the GWP of one ton of CO2 over a 100- 

year period, which is called carbon 

dioxide equivalent (CO2e). 

Accordingly, in the Tailoring Rule, 

EPA established two steps to implement 

PSD and Title V, with Tailoring Rule 

Step 1 beginning on January 2, 2011. 

Step 1 applies to sources subject to PSD 

or Title V anyway due to emissions of 

pollutants other than GHGs (called 

‘‘anyway’’ sources) and, as to PSD, to 

sources that emit 75,000 tpy CO2e (or 

increase emissions by that amount for 

modifications). Tailoring Rule Step 2, 

beginning on July 1, 2011, will apply to 

the largest GHG-emitting sources. 

Sources not otherwise subject to Title V 

will become subject to it as of July 1, 

2011 if they emit or have the potential 

to emit at least 100,000 tpy CO2e. 

Sources that would not otherwise trigger 

PSD will trigger PSD on or after July 1, 

2011 if they have emissions at the 

100,000 tpy CO2e level and higher or 

emit at that level and modify to increase 

emissions by 75,000 tpy CO2e or more. 

In addition, EPA committed to 

promulgate by July 1, 2012 another 

rulemaking—in effect, Step 3 of the 

Tailoring Rule—that would consider 

whether to reduce the thresholds 

further. EPA also committed to 

promulgate another rulemaking after 

that, by April 1, 2016, that would 

consider still further action. As EPA 

stated in the Tailoring Rule, part of the 

purpose of the phase-in approach 

embodied in the Tailoring Rule is to 

allow permitting authorities time to 

acquire additional resources and to 

allow EPA time to develop streamlining 

methods and thereby enable the 

application of PSD and Title V to more 

sources in subsequent rulemakings. 

b. Biomass 

As noted previously, in the Tailoring 

Rule, EPA determined that the amount 

of each GHG emitted by a facility should 

be calculated by reference to the weight 

of the GHG emissions, in tons of CO2e 

per year. The Tailoring Rule proposal 

referenced EPA’s Inventory submitted 

annually to the UNFCCC, for the 

applicable GWP values and guidance on 

how to calculate a source’s GHG 

emissions in tpy CO2e.15 75 FR 31514– 

31608. The Inventory includes 

emissions of the six GHGs in terms of 

CO2e units. By linking the calculation of 

CO2e for GHGs to GWP values, a facility 

could evaluate its total GHG emissions 

contribution based on a single metric. 

We solicited comment on the benefits 

and limitations of this proposed metric. 

While we referred to the Inventory for 

GWP identification purposes only, 

several commenters appeared to 

misunderstand our intent, claiming that 

the Inventory excludes CO2 emitted 

from biomass. These commenters 

requested that, in calculations of 

emissions for determining applicability 

of PSD and Title V, EPA exempt 

emissions from biogenic activities or 

biomass combustion or oxidation 

activities, including solid waste 

landfills, waste-to-energy projects, 

fermentation processes, combustion of 

renewable fuels, ethanol manufacturing, 

biodiesel production, and other 

alternative energy production that uses 

biomass feedstocks (e.g., crops or trees). 

In particular, these commenters urged 

that EPA exclude emissions from 

biomass combustion in determining the 

applicability of PSD to such sources 

based on the notion that such 

combustion is ‘‘carbon neutral’’ (i.e., that 

combustion or oxidation of such 

materials would cause no net increase 

in GHG emissions on a lifecycle basis). 

In response, when finalizing the 

Tailoring Rule, we acknowledged the 

role that biomass or biogenic fuels and 

feedstocks could play in reducing 

anthropogenic GHG emissions, and did 

not dispute the commenters’ 

observations that many State, Federal, 

and international rules and policies 

treat biogenic and fossil sources of CO2

emissions differently. 75 FR 31514. 

Regarding commenters’ claims that the 

Inventory excludes CO2 emissions from 

biomass, the Inventory does not exclude 

these emissions (see section II.A.2). 

Rather, they are included in the 

LULUCF Sector rather than the Energy 

Sector to avoid double-counting at the 

national scale. The narrow reference to 

the use of the Inventory’s GWP values 

for estimating GHG emissions was 

provided to offer consistent guidance on 

how to calculate these emissions and 

not as an indication, direct or implied, 

that biomass emissions would be 

excluded from permitting applicability 

merely by association with the national 

inventory, see 74 FR 55351, under the 

definition for ‘‘carbon dioxide 

equivalent.’’ We determined that our 

application of the ‘‘absurd results,’’ 

‘‘administrative necessity,’’ and onestep-at-a-time legal rationales 

supporting the Tailoring Rule, based on 

the expected overwhelming permitting 

burdens in its absence, did not provide 

sufficient basis to exclude emissions of 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15257 

16http://www.epa.gov/nsr/ghgdocs/epa-hq-oar2010-0841-0001.pdf. 

17National Alliance of Forest Owners’ Petition To 

Reconsider the Prevention of Significant 

Deterioration and Title V Greenhouse Gas Tailoring 

Rule and To Stay the Rule Pending 

Reconsideration. EPA–HQ–OAR–2010–0841– 

0029.1. 

CO2 from biogenic sources in 

determining permitting applicability 

provisions at that time. We reasoned 

that such an exclusion alone, while 

reducing burdens for some sources, 

would not address the overwhelming 

permitting burdens, and a thresholdbased approach would still be needed. 

At that time, we had not examined 

burdens with respect to specific source 

categories impacted by the rule and thus 

had not analyzed the administrative 

burden of permitting projects that 

specifically involve biogenic CO2

emissions taking account of the 

threshold-based approach. Commenters 

also did not provide information to 

demonstrate that an overwhelming 

permitting burden would still exist, 

justifying a temporary exclusion for 

biomass sources. 

In the final Tailoring Rule we 

indicated that the decision not to 

provide this type of an exclusion at that 

time did not foreclose EPA’s ability to 

either (1) provide this type of exclusion 

at a later time with additional 

information about overwhelming 

permitting burdens due to biomass 

sources, or (2) provide another type of 

exclusion or other treatment based on 

some other rationale. Although we did 

not take a final position, we noted that 

some commenters’ observations about a 

different treatment of biomass 

combustion warranted further 

exploration as a possible rationale. 

Therefore, although we did not 

establish a permanent exclusion from 

PSD or Title V applicability based on 

specific characteristics of biogenic CO2, 

we indicated our intent to seek further 

comment on how we might address 

emissions of biogenic CO2 under the 

PSD and Title V programs through a 

future action. 

We further noted that, while not 

promulgating an applicability exclusion 

for biogenic emissions and biomass 

fuels or feedstocks in the final Tailoring 

Rule, flexibility exists to apply the 

existing regulations and policies 

regarding BACT in ways that take into 

account their net effects on atmospheric 

GHG concentrations. Without 

prejudging the outcome of our process 

to seek comment on whether and how 

we might address emissions of biogenic 

carbon under the PSD and Title V 

programs through a future action, we 

indicated that this issue warranted 

further exploration. 

In order to explore the issue further 

following the promulgation of the 

Tailoring Rule, on July 15, 2010 EPA 

solicited views from the public through 

a Call for Information (CFI) on 

approaches to accounting for biogenic 

CO2 emissions, including whether some 

or all of a source’s biogenic CO2

emissions could be discounted based on 

a determination that they are canceled 

out by the CO2 absorption associated 

with growing the fuel. 75 FR 41173. 

Also, we solicited information on the 

means to estimate and measure CO2

emissions from a variety of biogenic CO2

sources that typically have not been part 

of emission inventories (e.g., landfills, 

livestock management, and fermentation 

processes), as well as information on 

other biogenic sources that may be 

affected but which were not identified 

specifically in the CFI. 

With promulgation of the Tailoring 

Rule we committed to issue technical 

and policy guidance for permitting of 

GHGs. Subsequently, the information 

gathered from stakeholders in response 

to the CFI provided diverse perspectives 

on treatment of biogenic CO2 emissions 

in pre-construction and operating 

permit reviews, including many 

requests to exclude, either partially or 

wholly, biogenic CO2 sources from PSD 

applicability determinations and BACT 

analyses on the basis of Inventory 

results and other considerations. On 

November 10, 2010, EPA issued the 

draft ‘‘PSD and Title V Permitting 

Guidance for Greenhouse Gases’’ which 

provides the basic information that 

permit writers and applicants need to 

address GHG emissions in permits.16

Within the November guidance, EPA 

acknowledged the numerous 

stakeholder comments on biogenic CO2

BACT analyses and provided general 

guidance to permitting authorities to 

consider environmental, energy, and 

economic benefits that may accrue from 

the use of certain types of biomass (e.g., 

biogas from landfills for energy 

generation), consistent with existing air 

quality standards. We also committed to 

provide more detailed technical and 

policy guidance early in 2011 for 

completing Step 4 of a ‘‘top-down’’ 

BACT analyses for GHG emissions from 

certain types of biomass sources to 

enable permitting authorities to simplify 

and streamline BACT determinations for 

such sources. EPA accepted public 

comments on the November guidance 

through December 1, 2010, and the 

Agency is considering these comments 

while developing the detailed 

permitting guidance. 

Noting that a variety of Federal and 

State policies have recognized that some 

types of biomass can be part of a 

national strategy to reduce dependence 

on fossil fuels and to reduce emissions 

of GHGs, EPA determined that it is 

appropriate for permitting authorities to 

account for both existing Federal and 

State policies and their underlying 

objectives in evaluating the 

environmental, energy and economic 

benefits of biomass fuel. Based on these 

considerations, permitting authorities 

might determine that the use of certain 

types of biomass alone meets the BACT 

requirement for GHGs. 

On August 3, 2010, NAFO petitioned 

the EPA to reconsider and stay the 

implementation of the PSD and Title V 

GHG Tailoring Rule.17 The petition 

alleged that the final Tailoring Rule 

declared, for the first time and without 

any prior proposal or notice to industry, 

that EPA would count CO2 emissions 

from combustion of biomass toward the 

applicability thresholds established for 

the PSD and Title V permitting 

programs of the CAA. Petitioners further 

alleged that EPA’s proposed rule had 

provided for the appropriate and 

opposite conclusion: That CO2

emissions from combustion of biomass 

should not be counted. Petitioners 

stated that there is near-universal 

recognition that CO2 emitted from 

combustion of fuels derived from 

biomass should be excluded from GHG 

regulations because production and 

combustion of such fuels do not 

increase atmospheric CO2 levels. 

Pending reconsideration, petitioners 

requested that the application of the 

PSD and Title V permitting programs to 

emissions of CO2 from biomass be 

stayed. We considered carefully the 

petitioners’ assertions and noted that we 

also received comments through the CFI 

supporting the exclusion of biogenic 

CO2 from stationary source permitting 

requirements. Through the CFI, 

however, EPA also received information 

supporting the position that biogenic 

CO2 should not be excluded from 

permitting programs, and that the use of 

certain types of biomass as fuel could 

increase atmospheric CO2 levels. Based 

on consideration of the petitioners’ 

arguments, together with the weight of 

the comments received on the CFI, EPA 

has concluded that the issue of 

accounting for the net atmospheric 

impact of biogenic CO2 emissions is 

complex enough that further 

consideration of this important issue is 

warranted. Therefore, EPA granted the 

petition on January 12, 2011. 

However, EPA did not grant the 

request for an administrative stay of the 

Tailoring Rule, because the rule is 

critical for making overall 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15258 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

implementation of the PSD program 

feasible. Furthermore, an administrative 

stay of the statements in the preamble 

of the Tailoring Rule that describe EPA’s 

initial determination not to exempt 

emissions of CO2 from biomass would 

not provide the requested relief of 

excluding emissions of CO2 from 

biomass from the PSD and Title V 

permitting programs. The effect of a stay 

of this or any other aspect of the 

Tailoring Rule would be to return the 

legal regime that existed before EPA’s 

issuance of a final Tailoring Rule. As no 

exemption for emissions of CO2 from 

biomass existed prior to the final rule, 

an administrative stay would not result 

in an exemption from the requirements 

of PSD and Title V. 

C. Complexity of Determining Net 

Atmospheric Impact of CO2 Emissions 

and Incorporating This Information Into 

the PSD and Title V Programs 

In this section we discuss the 

complexity of the issues associated with 

reconciling facility-based and landbased sequestration accounting systems, 

as well as with accounting for landbased sequestration. Based on 

comments received from stakeholders in 

the CFI, we discuss further some general 

principles for land-based accounting 

(e.g., changes in the BAU baseline), and 

we present some of the proposed 

accounting methodologies (e.g., case-bycase analysis, categorical exclusion, 

contingent exclusion, and feedstockbased approaches). 

1. Reconciling Accounting Systems: 

Facility-Based Emissions and LandBased Sequestration 

Within the context of the PSD and 

Title V programs, the argument for 

treating CO2 emissions from bioenergy 

and biogenic sources differently from 

fossil-based CO2 emissions at the facility 

relies on the premise that sequestration 

occurs offsite, outside the boundaries of 

the facility. Therefore, when 

considering application of this premise 

to the PSD and Title V programs, it is 

important that the sequestration be 

accounted for at a level of spatial and 

temporal resolution that is meaningful 

and practical for purposes of facilitybased permitting. Such an accounting 

system must also be predictable, so that 

it can be utilized effectively by facilities 

and permitting authorities. Finally, the 

accounting system should be 

scientifically sound to allow for 

accurate accounting of net CO2

emissions to the atmosphere. 

In addition to those commenters 

suggesting a categorical approach (i.e., 

as discussed below, an exclusion for all 

biogenic CO2 emissions based on a 

finding of a net sink in the LULUCF 

section of the Inventory) other 

comments in response to the CFI 

repeatedly explained that different types 

of biological material (e.g., feedstocks) 

have different effects on atmospheric 

carbon emissions. Comments also 

underscored the importance of 

reconciling the facility-based permitting 

requirements under PSD and Title V 

with an accounting approach that relies 

upon estimates of land-based 

sequestration. This reconciliation will 

require careful attention to issues of 

spatial and temporal scale, to ensure 

that the principles of practicality, 

predictability, and scientific soundness 

are met. 

2. Complexity in Accounting for LandBased Sequestration 

Establishing an accounting system for 

the net atmospheric impact of biogenic 

CO2 emissions from stationary sources 

is complex. As mentioned above and 

below, commenters to the CFI made 

suggestions ranging from a categorical 

exclusion of facility-based emissions to 

a case-by-case analysis approach. 

Multiple factors need to be considered 

to accurately assess the net atmospheric 

impacts of the use of a particular type 

of fuel by a stationary source over a 

specified time period, that extends into 

the future: Net emissions to the 

atmosphere (emissions from the facility 

and sequestration elsewhere) of carbon 

from the biomass used for bioenergy; the 

time scale against which net emissions 

should be measured; delineation of 

geographic areas for measurement; and 

leakage. 

Many of these factors are driven by or 

determined at the local or regional level. 

Bioenergy production may result in 

dramatic changes in one region’s carbon 

stock, for example, and very little 

change in another’s. Regional variability 

is also inherent in natural systems, for 

example in rates of plant growth and 

disturbance frequencies. Some areas are 

more prone to disturbances such as 

drought and fire, while other areas 

experience warmer temperatures and 

unpredictable precipitation patterns. 

Some areas receive more atmospheric 

nitrogen deposition than others, or are 

more susceptible to insect outbreaks. 

Species-specific variations are 

important as well. Some plant species 

simply grow more quickly than others. 

As mentioned above, considerations 

of spatial and temporal scale become 

increasingly important in an accounting 

system that seeks to reconcile facilitybased emissions with land-based 

sequestration. How large an area should 

be considered when developing an 

accounting system—should it be 

facility-level, ownership-level, Statelevel, regional, or national? What is the 

appropriate period of time to be 

considered in the accounting system— 

should it roughly parallel the length of 

time required for plant biomass to resequester the amount of CO2 released 

during the biomass combustion? How 

might this time period differ for various 

biomass types? Can the issues of spatial 

and temporal scale be considered 

together, such that the time period 

considered for the analysis varies 

depending on where the land is located 

or how large an area is considered? 

Given the inherent variability in 

biological processes, as well as the 

variability in spatial and temporal scales 

that can influence estimates of 

sequestration, general principles that 

can be broadly applicable to all aspects 

of accounting for CO2 emissions from 

bioenergy and other biogenic sources 

will likely be most helpful. 

3. General Principles 

The level of sequestration that occurs 

naturally on the landscape without 

additional intervention can be 

considered as the ‘‘baseline.’’ In other 

words, this level of sequestration (or 

emissions) will likely continue into the 

future without additional action. For 

example, if favorable conditions for 

plant growth cause sequestration to 

increase beyond what is incorporated 

into the baseline for that region, then 

net atmospheric carbon levels will be 

lower than anticipated under ‘‘business 

as usual’’ (BAU). If sustainable forestry 

is practiced, then neither gain nor loss 

from carbon stocks on forestland would 

be expected over time, and net 

atmospheric carbon levels would not 

deviate from those expected in the BAU 

case. However, if logging is accelerated 

from a particular region over a certain 

period of time, and CO2 emissions from 

the forest are thereby increased, then the 

net atmospheric carbon levels will be 

higher than anticipated in the BAU case. 

In the context of bioenergy and 

biogenic emissions, where such a wide 

variety of potential feedstocks exists, the 

baseline might be considered the 

emissions that ‘‘would have happened 

anyway’’ in the BAU case. Using this 

approach, it is necessary to determine 

the extent to which a policy action or 

an activity increases or reduces CO2

emissions above or below what would 

have occurred in comparison with the 

baseline. From the perspective of 

bioenergy and other biogenic emissions, 

emissions that would have occurred 

anyway—regardless of whether or not 

the facility captured the energy from the 

biofuel use or carried out the process 

using biological material as a 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15259 

18Though this proposed rule concerns emissions 

from stationary sources, we note that various motor 

vehicle fuels are derived from plant material. For 

example, ethanol can be produced from plant starch 

or cellulose, and diesel fuel can be produced from 

various plant oils. The Energy Independence and 

Security Act of 2007 (EISA) required EPA, in the 

context of implementing the renewable fuel 

program under section 211(o) of the CAA, to 

evaluate the lifecycle greenhouse gas emissions of 

these and other motor vehicle fuels. EPA’s analysis 

of the various fuels demonstrated that multiple 

factors, including the type of feedstock used, 

resulted in a wide variation in their associated 

lifecycle GHG emissions. For example, from a 

lifecycle perspective some of the analyzed motor 

vehicle fuels result in very large reductions in GHG 

emissions compared to the fossil fuel they replace, 

while others do not. The lifecycle analyses of the 

motor vehicle fuels took into account a wide range 

of factors, including the carbon sequestration 

associated with the biomass. See 75 FR 14670, 

14764–799 (March 26, 2010). 

feedstock—might be treated differently 

than emissions that would not have 

occurred anyway (i.e., new emissions 

generated as the result of policy-based 

bioenergy incentives). For example, 

some commenters to the CFI suggested 

that utilizing logging residue to generate 

energy, rather than leaving the residue 

to decompose on the forest floor 

following harvesting, likely would not 

cause emissions over and above that 

which would have taken place if the 

energy use did not occur, while also 

noting the length of time required for 

the residue to decompose (for example, 

10–15 years). 

Land use change has a separate set of 

considerations under the baseline case. 

For example, if the rate of land use 

transition from forest to agricultural use 

were to increase over and above that 

which was expected in the BAU case, 

and if this increase were attributable to 

market demand for a bioenergy crop, 

then it would be possible that these 

emissions would be additional to the 

emissions expected under BAU. In that 

situation, the bioenergy use might result 

in increased atmospheric CO2 levels. 

4. Complexity in Developing 

Accounting Methodology 

In response to the CFI, commenters 

suggested various approaches to 

accounting for CO2 emissions from 

bioenergy and other biogenic sources. 

a. Case-by-Case Analysis 

Some commenters suggested that 

analysis of PSD applicability should 

rely on a case-by-case, facility-specific 

assessment of the net atmospheric 

impact of the intended biomass fuels. 

This would require facility-level 

accounting for the emissions associated 

with the full chain of fuel production 

and use. Commenters indicated that this 

type of facility-specific approach would 

be the most scientifically sound 

approach for assessing the net carbon 

cycle impact of specific biomass fuels. 

However, other commenters noted 

that the case-by-case approach, in which 

a complete analysis would be conducted 

for each permit application, would 

likely be prohibitively time-consuming 

and complex for facilities and 

permitting authorities. 

b. Categorical Exclusion 

Some commenters suggested that a 

categorical exclusion for all bioenergy 

and biogenic sources would be 

appropriate. Using this approach, no 

emissions from any such sources would 

be counted for PSD and Title V 

applicability. According to commenters 

supporting this option, the rationale for 

such an exclusion rests on the idea that 

all biological sources are part of the 

‘‘active carbon cycle,’’ in which CO2 is 

cycled between the land and 

atmosphere on a relatively short 

timeframe. 

c. Contingent Exclusion 

In other comments, stakeholders 

suggested that a categorical exclusion 

for all bioenergy and other biogenic 

sources would be appropriate with an 

added contingency. For example, all 

bioenergy and other biogenic emissions 

could be excluded from PSD and Title 

V applicability as long as forest land in 

the U.S. remains a net carbon sink, such 

that sequestration remains greater than 

emissions at the national scale. Some 

commenters suggested that this 

contingency might also be expressed at 

a State scale, such that all facilities that 

emit CO2 from bioenergy or other 

biogenic sources would be excluded 

from applicability as long as the forest 

land within that State acts as a net 

carbon sink. 

d. Feedstock-Based Approach 

An important area of consensus from 

commenters was the idea that 

feedstocks are different, and that the net 

impact of bioenergy and other biogenic 

emissions may be traceable to the 

feedstock that is used. For example, 

commenters indicated that it would be 

preferable to distinguish various 

categories of woody biomass feedstocks, 

such as wood waste, logging residue, 

forest treatment thinnings, biomass 

crops, and whole-tree chips from 

expanded harvest operations. Various 

other feedstock categorizations for 

different types of material were also 

proposed.18

D. Designing and Implementing an 

Accounting Approach 

As described in section III below, EPA 

is proposing to defer the applicability of 

the PSD and Title V program to biogenic 

CO2 emissions from stationary sources 

for three years in order to allow time for 

a detailed examination of the science 

associated with biogenic CO2 emissions 

and to consider the technical issues that 

the Agency must resolve in order to 

account for biogenic CO2 emissions in 

ways that are scientifically sound and 

also manageable in practice. As part of 

that examination we intend to engage 

with an independent scientific panel, as 

well as with partners inside and outside 

the Federal government with relevant 

expertise, to ensure a robust review of 

the scientific and technical issues 

associated with this type of accounting. 

During this time period the Agency can 

develop an appropriate accounting 

methodology that satisfies the principles 

of predictability, practicality, and 

scientific soundness. Should it be 

necessary, EPA proposes to implement 

the appropriate accounting methodology 

through notice-and-comment 

rulemaking within the three-year 

timeframe. 

III. Interim Deferral of Biogenic CO2

Emissions Under the PSD and Title V 

Permitting Programs 

As stated above, one critical reason 

for the proposed deferral is to give EPA 

time to conduct a detailed examination 

of the science, to engage with an 

independent scientific panel and then, 

if appropriate, to initiate a notice and 

comment rulemaking to implement an 

accounting approach all within the 

proposed three year timeframe. 

Another important reason for the 

three-year deferral period, described in 

Section III.C below, is to allow sufficient 

time to consider the unique 

characteristics and attributes of biogenic 

CO2 feedstocks, using the results from 

the detailed examination mentioned 

previously, within both the State 

permitting agencies and affected 

facilities. We concluded that, absent this 

deferral, there would be significant 

additional and unique complexities, as 

described in more detail in section II.C. 

As a result there would be additional 

permitting burden in terms of time and 

resources requirements, resulting from 

the associated analysis that would be 

required for permitting entities that are 

sources of biogenic CO2 emissions 

under Step 2 of the Tailoring Rule, 

which is scheduled to begin on July 1, 

2011. 

While the interim guidance described 

in section III.D will help alleviate some 

of this burden, we expect that more and 

more diverse users of biomass 

combustion or other biogenic CO2

sources are likely to be affected under 

Step 2 of the Tailoring Rule because, 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15260 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

19EPA’s regulations employ the term ‘‘major 

stationary source’’ in lieu of ‘‘major emitting 

facility.’’ e.g., 40 CFR 52.21(a)(2)(i), (b)(1)(i). 

under Step 2, these sources can trigger 

permitting requirements based solely on 

their GHG emissions with no prerequisite requirement that they 

otherwise trigger PSD or Title V 

permitting requirements for a non-GHG 

pollutant. We believe, absent the 

deferral period and the completion of 

EPA’s full analysis of the unique 

technical issues associated with these 

diverse facilities emitting biogenic CO2, 

it would be particularly challenging for 

permitting authorities and facilities to 

process permits involving these 

emissions. 

Also, as described in section III.D, this 

proposed deferral is intended to 

temporarily exclude biogenic CO2

emissions from the definition of ‘‘subject 

to regulation,’’ as that term was defined 

for purposes of the Tailoring Rule, for a 

period of three years, while EPA further 

considers, through notice and comment 

rulemaking, the approach to accounting 

for these emissions on a permanent 

basis. 

A. General Rationale and Legal 

Justification for Interim Deferral 

1. Applicability of PSD and Title V to 

Biogenic CO2 Emissions From Major 

Stationary Sources 

As currently written, the PSD and 

Title V regulations apply to biogenic 

CO2 emissions from major sources or 

major modifications at such sources 

according to provisions included under 

the definition of ‘‘subject to regulation’’ 

in the SIP regulations at 40 CFR 51.166 

and the Title V State program 

regulations at 40 CFR 70.2, as well as 

the Federal Implementation Plan 

requirements at 40 CFR 52.21 and the 

Title V Federal program regulations at 

40 CFR 71.2. Thus, revisions to these 

regulations are necessary to defer 

application of the PSD and Title V 

programs to such sources of biogenic 

CO2. 

Specifically, with respect to PSD, 

EPA’s regulations implement the PSD 

provisions of the CAA, and the language 

of these statutory provisions is broad 

enough to cover biogenic CO2

emissions. The 100/250 tpy thresholds 

previously described originate from 

section 169 of the CAA, which applies 

PSD to any ‘‘major emitting facility’’ 19

and defines the term to include any 

source with a potential to emit ‘‘any air 

pollutant’’ in an amount over 100 or 250 

tpy, depending on source category. 

EPA’s long-standing regulations 

interpret the PSD applicability 

provision that refers to ‘‘any air 

pollutant’’ to refer to any ‘‘regulated NSR 

pollutant,’’ which in turn includes any 

air pollutant ‘‘subject to regulation.’’ 

Similarly, under sections 165(a)(4) and 

169(3) of the CAA, the BACT 

requirement applies to ‘‘each pollutant 

subject to regulation’’ under the CAA. 

As noted in other recent EPA actions, 

GHG are currently ‘‘subject to 

regulation’’ under the CAA, subject to 

specific limitations reflected in the 

definition of that term that EPA adopted 

in the Tailoring Rule. Thus, emissions 

of GHG (including CO2) must be 

considered in determining whether a 

source is a major emitting facility 

subject to PSD, as a result of 

construction or modification, and 

whether the BACT requirement applies 

to GHG (including CO2 as a component 

of GHG). In light of the way these 

regulations are currently written, EPA is 

unable to exclude biogenic CO2

emissions from PSD review without 

amending the regulations. 

Stationary sources of air pollutants, 

including sources of biogenic CO2

emissions, are currently subject to PSD 

requirements if they emit more than 100 

or 250 tpy of a regulated NSR pollutant 

other than GHG and have triggered PSD 

as a result of these emissions. We call 

these sources ‘‘anyway’’ PSD sources, 

and bioenergy and other sources of 

biogenic CO2 emissions may be among 

them based on emissions of pollutants 

other than GHG. Under the Tailoring 

Rule, since January 2, 2011 (the 

beginning of step 1 of the Rule), PSD 

permits for such a source have had to 

meet emissions limitations based on 

application of BACT for GHG if the 

source is newly constructed and has the 

potential to emit 75,000 tpy or more of 

this pollutant on a CO2e basis; or is an 

existing source which, as a result of a 

modification, increases GHG emissions 

by 75,000 tpy or more on a CO2e basis 

and by any amount on a mass basis. In 

addition, starting on July 1, 2011 (the 

beginning of step 2 of the Tailoring 

Rule), a source that is not an ‘‘anyway’’ 

PSD source, but that newly constructs 

and emits at least 100,000 tpy CO2e 

GHG, or that is an existing source that 

emits at least 100,000 GHG tpy CO2e 

and that modifies and increases its GHG 

emissions by at least 75,000 tpy CO2e 

GHG and any amount on a mass basis, 

will need a PSD permit for its GHG, 

including any biogenic CO2. 

With respect to Title V, as noted 

previously, Title V applies to sources, 

among others, that emit 100 tons per 

year of specified quantities of ‘‘any air 

pollutant,’’ see CAA section 502(a), 

501(2)(B), 302(g). In the Tailoring Rule, 

EPA codified its longstanding 

interpretation that this requirement only 

extends to major sources of air 

pollutants subject to regulation, and 

further defined ‘‘subject to regulation’’ 

such that it may include GHGs at 

sources which emit or have the 

potential to emit 100,000 tpy CO2e as of 

July 1, 2011. As described immediately 

above, GHG are currently ‘‘subject to 

regulation’’ under the CAA (again, 

subject to specific limitations reflected 

in the definition of that term that EPA 

adopted in the Tailoring Rule), and as 

a result, emissions of GHG, including 

biogenic CO2 emissions, are considered 

in determining whether a source is 

subject to Title V as of July 1, 2011. 

Under the Tailoring Rule, since 

January 2, 2011 (again, the beginning of 

step 1), sources that are subject to Title 

V anyway—which we call ‘‘anyway’’ 

Title V sources and which include 

existing sources with Title V permits, or 

new sources obtaining Title V permits, 

due to their non-GHG emission—have 

been required to address GHG, 

including GHG from biomass, to the 

extent there are Title V requirements 

relevant to GHG. This means that their 

Title V permits must contain, at the 

appropriate time, conditions necessary 

to assure compliance with any 

applicable requirements concerning 

their GHG emissions. As of July 1, 2011 

(again, the beginning of step 2), new or 

existing sources that are not ‘‘anyway’’ 

Title V sources, that emit or have the 

potential to emit at least 100,000 GHG 

tpy CO2e (and 100 tpy on a mass basis), 

and are subject to an approved or EPApromulgated title V program, will 

become subject to Title V requirements. 

Therefore, absent some further 

regulatory action, EPA is unable to 

exclude biogenic CO2 emissions from 

the applicability of Title V. 

2. Authority To Exempt de minimis 

Emissions 

As noted, since the relevant 

provisions of the Act apply to ‘‘any air 

pollutant’’ or any ‘‘air pollutant subject 

to regulation,’’ the terms of the CAA 

suggest that the PSD and Title V 

requirements should apply to CO2

emissions from bioenergy or other 

biogenic sources in the same manner as 

they apply to emissions of CO2 from any 

other type of source, since such 

emissions are constituents of the 

regulated pollutant GHG. However, as 

discussed elsewhere in this preamble, 

EPA believes it has the authority to 

exclude biogenic CO2 emissions from 

the PSD and Title V requirements for 

the proposed three-year deferral period 

and will be exploring whether a 

permanent exemption is permissible for 

at least some and perhaps all types of 

feedstocks. 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15261 

Courts have recognized that 

administrative agencies have the 

implied authority to establish 

exemptions ‘‘when the burdens of 

regulation yield a gain of trivial or no 

value.’’ Alabama Power Co. v. Costle, 

636 F.2d 323, 360 (DC Cir. 1980). In this 

decision that specifically addressed the 

requirements of the PSD program, the 

DC Circuit described this principle as 

follows: 

Categorical exemptions may also be 

permissible as an exercise of agency power, 

inherent in most statutory schemes, to 

overlook circumstances that in context may 

fairly be considered de minimis. It is 

commonplace, of course, that the law does 

not concern itself with trifling matters, and 

this principle has often found application in 

the administrative context. Courts should be 

reluctant to apply the literal terms of a statute 

to mandate pointless expenditures of effort. 

Id. (internal citations omitted). 

In an earlier case cited by the court in 

Alabama Power, the court described the 

doctrine as follows: 

The ‘de minimis’ doctrine that was 

developed to prevent trivial items from 

draining the time of the courts has room for 

sound application to administration by the 

Government of its regulatory programs. 

* * * The ability, which we describe here, 

to exempt de minimis situations from a 

statutory command is not an ability to depart 

from the statute, but rather a tool to be used 

in implementing the legislative design. 

District of Columbia v. Orleans, 406 F.2d 957, 

959 (1968). 

In this respect, the Alabama Power 

opinion observed in a footnote that the 

de minimis principle ‘‘is a cousin of the 

doctrine that, notwithstanding the ‘plain 

meaning’ of a statute, a court must look 

beyond the words to the purpose of the 

act where its literal terms lead to 

‘absurd or futile results.’ ’’ Id. at 360 n. 

89 (citations omitted). 

To apply an exclusion based on the de 

minimis doctrine, ‘‘the agency will bear 

the burden of making the required 

showing’’ that a matter is truly de 

minimis which naturally will turn on 

the assessment of particular 

circumstances. Id. The Alabama Power 

opinion concluded that ‘‘most regulatory 

statutes, including the CAA, permit 

such agency showings in appropriate 

cases.’’ Id. 

A notable limitation on the de 

minimis doctrine is that it does not 

authorize the agency to exclude 

something on the basis of a cost-benefit 

analysis. As the court explained, this 

‘‘implied authority is not available for a 

situation where the regulatory function 

does provide benefits, in the sense of 

furthering the regulatory objectives, but 

the agency concludes that the 

acknowledged benefits are exceeded by 

the costs.’’ Id. The court held that any 

‘‘implied authority to make cost-benefit 

decisions must be based not on a 

general doctrine but on a fair reading of 

the specific statute, its aims and 

legislative history.’’ Id. 

Since the early years of the PSD 

program, EPA has applied this de 

minimis principle to establish various 

types of values in the PSD regulations 

that may be used to exempt a source 

from all or part of the PSD program 

requirements. These include the 

significance levels (described 

previously), which are also called 

significant emissions rates, and air 

quality screening values called 

significant impact levels (SILs) and 

significant monitoring concentrations 

(SMCs). 

The significant emission rates reflect 

levels below which EPA considers an 

emissions increase to be de minimis. 45 

FR 52676, 52705–07. They are applied 

to allow modifications having minimal 

impact to proceed without the need for 

obtaining a PSD permit. See also 40 CFR 

51.166(b)(23); 40 CFR 52.21(b)(23). In 

addition, these values may be used to 

eliminate the need for a permit to 

contain BACT limitations for a 

particular pollutant or to require a 

source to prepare an ambient air quality 

analysis for a particular pollutant that is 

not emitted or increased by significant 

amounts. 

EPA has also relied on the de minimis 

doctrine to establish values that 

permitting authorities can use to show 

that a source that requires a PSD permit 

meets the necessary criteria to obtain a 

permit. Significant impact levels may be 

used in particular ways identified in 

prior EPA rules and guidance as part of 

an assessment of whether a source 

causes or contributes to a violation of air 

quality standards. Significant 

monitoring concentrations may be used 

to exempt sources from pre-construction 

monitoring requirements. See 75 FR 

64864, 64890–97 (October 20, 2010). 

3. Potential for Some Biomass 

Feedstocks To Have a de minimis 

Impact on Carbon Levels in the 

Atmosphere 

As discussed previously in this 

preamble, EPA has sufficient 

information at this time to conclude that 

at least some biomass feedstocks that 

may be utilized to produce energy have 

a negligible impact on the net carbon 

cycle, such as residue material (e.g., 

sawdust from milling operations) that 

would have decomposed under natural 

circumstances in a relatively short 

period of time (e.g., 10–15 years). Given 

this negligible impact on the carbon 

cycle, the gain from regulating 

emissions from combustion of this 

feedstock for bioenergy could be 

considered to be trivial. 

It appears that the potential may exist 

for EPA to determine that other types of 

biomass feedstocks would have a 

negligible impact on the net carbon 

cycle impact after further detailed 

examination of the science associated 

with biogenic CO2 emissions. Thus, if 

EPA were to require all bioenergy 

facilities to limit emissions of CO2

before this assessment is complete, it 

may later determine that such actions 

have yielded trivial gain. To avoid this 

outcome, and because of the 

administrative burdens described 

elsewhere in this preamble, EPA 

believes an initial deferral of the PSD 

requirements for bioenergy and other 

biogenic sources is justified at this time. 

However, the possibility also remains 

that more detailed examination of the 

science of biogenic CO2 will 

demonstrate that the utilization of some 

biomass feedstocks for bioenergy 

production will have a significant 

impact on the net carbon cycle, making 

application of the PSD program 

requirements to such emissions 

necessary to fulfill Congressional intent. 

Thus, EPA is proposing only a 

temporary, rather than a permanent, 

deferral of PSD requirements for such 

sources at this time. 

4. Given the Burden of Case-by-Case 

Analysis and Potential for de minimis 

Impact, Regulation at This Time Is Not 

Justified 

Since finalizing the Tailoring Rule, 

EPA has gathered additional 

information concerning biomass 

through the CFI. The information 

collected to this point indicates that at 

present, attempting to determine the net 

carbon cycle impact of particular 

facilities combusting particular types of 

biomass feedstocks would require 

extensive analysis and would therefore 

entail extensive workload requirements. 

Further, methodologies are not 

sufficiently developed to assure that 

various permitting authorities would be 

able to reasonably and consistently 

perform the necessary calculations to 

determine the net atmospheric impact 

in particular instances. 

The extensive workload requirements 

that PSD and Title V permit 

applications for bioenergy facilities and 

other sources of biogenic CO2 emissions 

would entail would necessarily strain 

permitting authority resources and 

result in delays in processing permits 

for other applicants. Moreover, at 

present, devoting these limited 

permitting authority resources to 

biomass would not be productive in 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15262 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

light of the previously described 

possibility that EPA may ultimately 

determine that the utilization of some 

biomass feedstocks for bioenergy has a 

negligible or de minimis impact on the 

net carbon cycle. 

Therefore, the information EPA has 

collected since promulgating the 

Tailoring Rule indicates that it is 

consistent with the rationale of the 

Tailoring Rule to defer on a temporary 

basis biogenic CO2 emissions from PSD 

and Title V applicability, pending the 

detailed examination of the science 

associated with biogenic CO2 emissions 

from stationary sources, including 

engaging with an independent scientific 

panel, and considering technical issues, 

that the Agency must resolve in order to 

account for biogenic CO2 emissions in 

ways that are scientifically sound and 

also manageable in practice. As noted 

previously, EPA based the Tailoring 

Rule on the extreme administrative 

burdens to permitting authorities, and 

undue costs to sources, that would 

result from a literal application of the 

PSD and Title V 100/250 tpy statutory 

thresholds, as of January 2, 2011, when 

those requirements first apply to GHGs. 

EPA reasoned that, in accordance with 

the Chevron analytical framework for 

statutory construction, taking into 

account the ‘‘absurd results’’ and 

‘‘administrative necessity’’ lines of cases, 

Congress did not intend that the PSD 

and Title V requirements apply at the 

100/250 tpy statutory thresholds to 

GHG-emitting sources as of January 2, 

2011, but rather that those requirements 

could be limited, at least initially, 

through a phase-in approach, to higheremitting sources. Just as the extensive 

workload of processing permit 

applications from sources below the 

Tailoring Rule thresholds justified 

exempting those sources at least from 

the initial steps in the Tailoring Rule 

phase-in program, pending EPA’s 

development of streamlining methods 

and the permitting authorities’ 

acquisition of additional resources, so 

too the extensive workload of 

processing permit applications from 

biomass facilities justifies exempting 

those sources for a period of time, 

pending EPA’s development of a 

consistent and practical methodology 

for determining net carbon cycle 

impacts (see section II.D). The EPA 

proposes in the present action that a 

three-year deferral will be adequate to 

allow time for the development of the 

methodology. In effect, EPA proposes in 

this action to revise the Tailoring Rule’s 

phase-in approach to, in effect, defer the 

applicability of PSD and Title V to 

biogenic CO2 emissions, relying in part, 

on the same rationale as EPA used to 

justify the Tailoring Rule’s phase-in 

approach. 

An alternative way to reduce the 

permitting burden would be to apply 

PSD and Title V to all facilities with 

biogenic CO2 emissions that emit at or 

above the Tailoring Rule thresholds, but 

without making any effort to take into 

account net carbon cycle impacts. 

However, we believe that it is 

conceivable that as a result of the 

scientific examination of biogenic CO2

emissions described in section II.D, we 

could conclude that the net carbon cycle 

impact for some biomass feedstocks is 

negligible. Accordingly, this could 

result in regulation that yields trivial 

gain as previously discussed. To avoid 

this outcome, given our current state of 

knowledge, we believe a case-by-case 

net carbon cycle impact analysis would 

be required in the course of reviewing 

each permit application. This burden 

would be in addition to the currently 

existing burden associated with 

obtaining a PSD or Title V permit. In 

light of the permitting burdens assessed 

in the Tailoring Rule, adding to that 

burden would frustrate the goals we 

sought to accomplish in the Tailoring 

Rule to ensure that the PSD and Title V 

programs can be administered in each 

State. 

Furthermore, given the potential that 

the utilization of at least some biomass 

feedstocks may have a negligible impact 

on the net carbon cycle, engaging in this 

type of burdensome analysis may not be 

an optimal use of the limited resources 

of PSD and Title V permitting 

authorities. The additional scientific 

examination proposed by the EPA (see 

section II.D) could ultimately conclude 

that such resources could have been 

more effectively utilized to target CO2

emissions that clearly have a 

detrimental impact on the net carbon 

cycle. Establishing a three-year deferral 

period for biogenic CO2 emissions will 

enable EPA to consider the results of the 

detailed examination of the science of 

these emissions and undertake a 

rulemaking to determine the best way to 

account for biogenic CO2 emissions 

when determining PSD applicability. 

5. Subjecting Biogenic CO2 Emissions to 

Permitting may be Counterproductive 

Because it Could Discourage Utilization 

of the Biomass Feedstock as Fuel 

In some cases, the use of biological 

material as a fuel would clearly reduce 

net atmospheric CO2 levels. In these 

cases, requiring permitting at this time, 

before conducting the detailed scientific 

examination discussed in section II.D 

that is required to develop an 

appropriate accounting system for 

bioenergy and other biogenic sources, 

might actually discourage projects that 

would have a net benefit for the 

atmosphere. For example, requiring 

permitting for facilities seeking to 

generate energy from the combustion of 

dead trees, especially those killed due to 

a widespread event like the mountain 

pine beetle epidemic, is likely to 

discourage the utilization of a readily 

available resource that would clearly 

reduce CO2 emissions (e.g., by removing 

and utilizing biomass material that 

would otherwise be susceptible to fire 

or decompose in the forest, leading to 

CO2 and CH4 emissions from 

decomposition). Likewise, combustion 

of CH4-laden biogas (e.g., from landfills 

or other large sources of methane) for 

energy production reduces overall CO2e 

emissions because of the higher GWP 

for CH4. 

B. CO2 Emissions That Are Deferred 

As discussed earlier, the deferral 

applies to biogenic CO2 emissions from 

biogenic feedstocks, rather than to 

specific types of facilities. All nonbiogenic emissions from a facility 

continue to be included for purposes of 

PSD applicability throughout the 

deferral period. However, the portion of 

the CO2 emissions from a facility that 

result from biologically-derived material 

are deferred and not included for 

purposes of determining PSD 

applicability during the deferral period. 

If fossil-derived fuel is used within a 

facility to provide energy for a process 

that also uses biological material, the 

emissions associated with the fossil fuel 

must be counted toward PSD 

applicability regardless of the use of the 

biological material. 

Specifically, the emissions that are 

deferred from applicability include, but 

are not limited to: 

• CO2 generated from the biological 

decomposition of waste in landfills, 

wastewater treatment or manure 

management processes; 

• CO2 from the combustion of biogas 

collected from biological decomposition 

of waste in landfills, wastewater 

treatment or manure management 

processes; 

• CO2 from fermentation during 

ethanol production; 

• CO2 from combustion of the 

biological fraction of municipal solid 

waste or biosolids; 

• CO2 from combustion of the 

biological fraction of tire-derived fuel; 

and 

• CO2 derived from combustion of 

biological material, including all types 

of wood and wood waste, forest residue, 

and agricultural material. 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15263 

20U.S. Greenhouse Gas Inventory Fast Facts 

(April 2010.). http://www.epa.gov/climatechange/ 

emissions/downloads10/US-GHG-Inventory-FastFacts-2008.pdf. 

21 75 FR 31579–81 (June 3, 2010). 

22Letter from Honorable Lisa Jackson, 

Administrator, U.S. EPA, to R. Martella, Jr., R. Gray, 

and J. Coleman, Sidley Austin, LLP. (January 12, 

2011.). http://www.epa.gov/NSR/ghgdocs/ 

McCarthytoMartella.pdf. 

23As of January 2, 2011, permitting authorities 

and sources subject to Title V need to address any 

Continued 

C. Non-CO2 GHGs and Non-GHG 

Pollutants 

As explained in section II.A.4, CO2 is 

unique among GHGs in that large and 

relatively rapid fluxes of CO2 between 

land and atmosphere occur as part of 

the global biogeochemical system that 

maintains life on Earth.20 Because other 

non-GHG pollutants and non-CO2 GHGs 

do not participate in natural 

biogeochemical carbon cycles as CO2

does, this frame of reference—in which 

sequestration outside the facility is 

considered as part of the justification for 

differential treatment in the PSD and 

Title V programs—is not relevant for 

those other pollutants. The deferral 

proposed here does not apply to GHG 

emissions from bioenergy or biogenic 

sources other than biogenic CO2

emissions, nor does it apply to 

emissions of non-GHG pollutants. 

D. Mechanism for Deferral and State 

Implementation 

1. Adding to Definition of Subject to 

Regulation Established in Tailoring Rule 

To implement the proposed deferral, 

we are proposing to revise the definition 

of the term ‘‘subject to regulation’’ that 

EPA adopted in the PSD and Title V 

GHG Tailoring Rule. We are proposing 

to add language to the definition of 

‘‘subject to regulation’’ to exclude 

biogenic CO2 emissions from stationary 

sources for a three-year period starting 

on the date the promulgated rule is 

published in the Federal Register. 

The EPA’s PSD regulations implement 

the PSD provisions of the CAA, and the 

language of these statutory provisions is 

broad enough to cover biogenic CO2

emissions. The 100/250 tpy thresholds 

previously described originate from 

section 169 of the CAA, which applies 

PSD to any ‘‘major emitting facility’’ and 

defines the term to include any source 

with a potential to emit ‘‘any air 

pollutant’’ in an amount equal to or 

greater than 100 or 250 tpy, depending 

on the source category. The EPA’s longstanding regulations interpret the PSD 

applicability provision that refers to 

‘‘any air pollutant’’ to refer to any 

‘‘regulated NSR pollutant,’’ which 

includes any air pollutant ‘‘subject to 

regulation.’’ In the final Tailoring Rule, 

EPA defined the term ‘‘subject to 

regulation’’ so that only GHG emissions 

from sources at or above specified 

thresholds (depending on the 

circumstances, 75,000 and/or 100,000 

tpy on a CO2e basis) are pollutants 

subject to regulation. Thus, sources that 

emit amounts exceeding the established 

thresholds, are subject to PSD as long as 

that amount of GHG also exceeds 100/ 

250 tpy on a mass basis. Similarly, in 

the Tailoring Rule, EPA defined ‘‘subject 

to regulation’’ under the Title V program 

regulations so GHG emissions from 

sources at or above 100,000 tpy on a 

CO2e basis are subject to regulation. We 

believe this is also the most efficient 

and effective approach for 

implementing the deferral of biogenic 

CO2 emissions proposed in this rule. 

Under this approach, some States may 

not need to undertake a regulatory or 

legislative action to implement the final 

rule if they are able to interpret the term 

‘‘subject to regulation’’ used in existing 

State regulations in a manner consistent 

with the revised definition propose in 

this rule. A full description of the 

‘‘subject to regulation’’ mechanism and 

the basis for its usage in the Tailoring 

Rule can be found in preamble text for 

that rulemaking.21

2. State Decisions To Adopt Deferral 

Currently, a SIP-approved PSD 

program that applies to GHG-emitting 

sources applies to biogenic CO2

emissions to the same extent as the 

program applies to all other GHGs. The 

same is true for an approved Title V 

program that applies to GHG-emitting 

sources. However, we believe that many 

States may not be inclined to apply their 

PSD or Title V programs to biogenic CO2

emission sources for the same 

fundamental reasons that we are 

proposing to defer inclusions of these 

sources under the PSD and Title V 

permitting programs for a three-year 

period. As has been stated previously, 

one of our primary reasons for 

reconsideration of application of the 

Tailoring Rule requirements to biogenic 

CO2 emissions sources 22 was to allow 

for a detailed examination of the science 

associated with biogenic CO2 emissions 

and to consider the technical issues that 

the agency must resolve in order to 

account for biogenic CO2 emissions in 

ways that are scientifically sound and 

also manageable in practice. We believe 

that most, if not all, States are facing 

similar needs for further scientific 

examination and analysis to properly 

consider biogenic CO2 emissions under 

a permitting scenario in a way that will 

not disrupt the proper functioning and 

timeliness of permitting activity within 

the State PSD and Title V programs. We 

believe States will also benefit from the 

deferral period in order to have 

sufficient time to respond to the results 

of the data collection and examination 

of the science associated with biogenic 

emissions and to properly educate and 

train staff in the unique permitting 

issues associated with biogenic sources, 

including fundamental principles such 

as accurate emission estimation 

methodologies and full consideration of 

environmental impacts associated with 

these sources. 

Thus, States that cannot interpret 

their PSD SIP or Title V requirements to 

incorporate the three-year deferral are 

strongly encouraged to submit SIP 

revisions or Title V program revisions to 

adopt the three-year deferral. However, 

EPA recognizes that some States may 

not have any, or may have only a few, 

sources that combust biomass, and may 

have adequate information and 

resources as to the nature of biogenic 

emissions from those sources. EPA 

requests each State to advise EPA by 

letter, during the comment period for 

this proposal, as to the number and type 

of biomass sources in the State and what 

the State expects to be the number and 

type of biomass sources over the next 

three years, and the State’s resource 

constraints, to the extent that 

information is available. EPA solicits 

comment on how to treat States in light 

of this information and any preferences 

that the States may express. 

3. Interim Guidance To Address 

Biogenic CO2 Sources Under PSD 

Review 

Concurrent with this proposal to defer 

application of the pre-construction and 

Title V permitting programs to biogenic 

CO2 emissions, EPA is issuing interim 

guidance to help permitting authorities 

establish a basis for concluding that 

BACT (which is one of the statutory 

conditions for receiving a permit) for 

GHG emissions at such sources is 

combustion of biomass fuel by itself. As 

previously noted, under the Tailoring 

Rule, since January 2, 2011, large 

stationary sources that become subject 

to PSD for other pollutants have had to 

address GHG such as CO2. Since this 

proposed rulemaking to defer biogenic 

CO2 emissions from PSD permitting 

requirements for a three-year period is 

not planned to be finalized until the 

July 2011 timeframe, there will be an 

interim period when such biogenic CO2

emissions will still need to be addressed 

in making PSD permitting 

determinations since the deferral will 

not yet be in effect.23 For example, if a 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15264 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

applicable requirements for GHG, such as PSD 

permit requirements, consistent with the 

requirements of 40 CFR part 70 and approved State 

programs. However, GHG emissions will not be 

used to establish Title V applicability before July 1, 

2011. 

PSD permit is issued before the planned 

July 2011 finalization of this rulemaking 

that would defer biogenic CO2

emissions from PSD applicability, then 

existing regulations might require that 

the PSD permit meet the BACT 

requirement for GHG emissions, 

including biogenic CO2 emissions, 

during the interim period of time. 

In its November 2010 GHG permitting 

guidance, EPA explicitly recognized 

that a permitting authority might 

determine that certain types of biomass 

by themselves are BACT for GHG 

emissions after considering the 

environmental, energy, and economic 

benefits of using the fuel. EPA’s 

supplemental guidance provides a basis 

that permitting authorities may use to 

support the conclusion, during the 

interim period until the biomass 

deferral rulemaking is finalized, that 

BACT for biogenic CO2 emissions from 

applicable sources is the combustion of 

biomass fuel by itself. 

E. Requesting Comment 

Given the detail and rationale above, 

EPA has concluded this approach to 

defer application of PSD and Title V 

permitting requirements to biogenic CO2

emissions is appropriate. However, EPA 

is requesting comment on this proposal, 

including the approach, the rationale 

and other considerations the Agency 

should take into account. 

IV. Statutory and Executive Order 

Review 

A. Executive Order 12866: Regulatory 

Planning and Review 

Under Executive Order (EO) 12866 

(58 FR 51735, October 4, 1993), this 

action is a ‘‘significant regulatory action’’ 

because it raises novel legal or policy 

issues arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the EO. Accordingly, EPA 

submitted this action to the Office of 

Management and Budget (OMB) for 

review under EO 12866. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. Instead, 

this action will reduce costs incurred by 

any facility with biogenic CO2

emissions, as well as permitting 

authorities, relative to the costs that 

would be incurred if EPA did not revise 

the rule. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. The OMB has 

previously approved the information 

collection requirements contained in the 

existing regulations for PSD (see, e.g., 40 

CFR 52.21) and Title V (see 40 CFR 

parts 70 and 71) under the provisions of 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. and has assigned OMB 

control number 2060–0003 and OMB 

control number 2060–0336. The OMB 

control numbers for EPA’s regulations 

in 40 CFR are listed in 40 CFR part 9. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. 

For purposes of assessing the impacts 

of this proposed rule on small entities, 

small entity is defined as: (1) A small 

business as defined by the Small 

Business Administration’s regulations at 

13 CFR 121.201; (2) a small 

governmental jurisdiction that is a 

government of a city, county, town, 

school district or special district with a 

population of less than 50,000; and (3) 

a small organization that is any not-forprofit enterprise that is independently 

owned and operated and is not 

dominant in its field. 

After considering the economic 

impacts of this proposed action on small 

entities, I certify that this action will not 

have a significant economic impact on 

a substantial number of small entities. 

In determining whether a rule has a 

significant economic impact on a 

substantial number of small entities, the 

impact of concern is any significant 

adverse economic impact on small 

entities, since the primary purpose of 

the regulatory flexibility analyses is to 

identify and address regulatory 

alternatives ‘‘which minimize any 

significant economic impact of the rule 

on small entities.’’ 5 U.S.C. 603 and 604. 

Thus, an agency may certify that a rule 

will not have a significant economic 

impact on a substantial number of small 

entities if the rule relieves regulatory 

burden, or otherwise has a positive 

economic effect on all of the small 

entities subject to the rule. 

We believe that this proposed rule 

will relieve the necessary extensive 

analysis and corresponding extensive 

workload requirements for most affected 

facilities, including small businesses. As 

a result, the program changes provided 

in this rule are not expected to result in 

a significant economic impact on a 

substantial number of small entities. In 

addition, EPA determined that the 

proposed rulemaking would not have a 

significant impact on small 

governmental jurisdictions. The EPA 

has therefore concluded that this 

proposed action will not have a 

significant economic impact on a 

substantial number of small entities. 

We continue to be interested in the 

potential impacts of this proposed 

action on small entities and welcome 

comments on issues related to such 

impacts. 

D. Unfunded Mandates Reform Act 

(UMRA) 

This proposed rule does not contain 

a Federal mandate that may result in 

expenditures of $100 million or more 

for State, local, and Tribal governments, 

in the aggregate, or the private sector in 

any one year. Only those few States 

whose permitting authorities do not 

implement the Federal PSD and Title V 

rules by reference in their SIPs will have 

a small increase in burden. These States 

will have to amend their corresponding 

SIPs to incorporate the proposed 

amendments from today’s action, as the 

deferral that we propose will not 

otherwise apply to the PSD and Title V 

programs. Thus, this rule is not subject 

to the requirements of sections 202 or 

205 of the UMRA. 

This rule is also not subject to the 

requirements of section 203 of UMRA 

because it contains no regulatory 

requirements that might significantly or 

uniquely affect small governments. As 

discussed earlier, this rule is expected 

to result in an administrative burden 

reduction for all affected permitting 

authorities and permittees, including 

small governments. 

E. Executive Order 13132: Federalism 

This action does not have federalism 

implications. It will not have substantial 

direct effects on the States, on the 

relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in EO 

13132. These proposed amendments 

would simplify and reduce the burden 

on implementing the PSD and Title V 

operating permit programs, by deferral 

of PSD and Title V application 

requirements to biogenic CO2 emissions 

at a facility. Thus, EO 13132 does not 

apply to this action. 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 15265 

In the spirit of Executive Order 13132, 

and consistent with EPA policy to 

promote communications between EPA 

and State and local governments, EPA 

specifically solicits comment on this 

proposed action from State and local 

officials. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 13175, entitled 

‘‘Consultation and Coordination with 

Indian Tribal Governments’’ (59 FR 

22951, November 6, 2000), requires EPA 

to develop an accountable process to 

ensure ‘‘meaningful and timely input by 

Tribal officials in the development of 

regulatory policies that have Tribal 

implications.’’ 

The EPA has concluded that this 

proposed rule may have Tribal 

implications. However, it will neither 

impose substantial direct compliance 

costs on Tribal government, nor 

preempt Tribal law. There are no Tribal 

authorities currently issuing major NSR 

permits; however, this may change in 

the future. 

The EPA specifically solicits 

additional comment on this proposed 

action from Tribal officials. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

The EPA interprets Executive Order 

13045 (62 FR 19885, April 23, 1997) as 

applying only to those regulatory 

actions that concern health or safety 

risks, such that the analysis required 

under section 5–501 of the Executive 

Order 492 has the potential to influence 

the regulation. This action is not subject 

to Executive Order 13045 and does not 

establish an environmental standard 

intended to mitigate health or safety 

risks. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This proposed rule is not a 

‘‘significant energy action’’ as defined in 

EO 13211 (66 FR 28355, May 22, 2001) 

because it is not likely to have a 

significant adverse effect on the supply, 

distribution, or use of energy. Further, 

we have concluded that this rule is not 

likely to have any adverse energy effects 

because this action would not create any 

new requirements for sources in the 

energy supply, distribution, or use 

sectors. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (NTTAA), Public Law 104– 

113 (15 U.S.C. 272 note) directs EPA to 

use voluntary consensus standards in its 

regulatory activities unless to do so 

would be inconsistent with applicable 

law or otherwise impractical. Voluntary 

consensus standards are technical 

standards (e.g., materials specifications, 

test methods, sampling procedures, and 

business practices) that are developed or 

adopted by voluntary consensus 

standards bodies. The NTTAA directs 

EPA to provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. 

This proposed rulemaking does not 

involve technical standards. Therefore, 

EPA is not considering the use of any 

voluntary consensus standards. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order 12898 (59 FR 7629, 

February 16, 1994) establishes Federal 

executive policy on environmental 

justice. Its main provision directs 

Federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the U.S. 

The EPA has determined that this 

proposed rule will not have 

disproportionately high and adverse 

human health or environmental effects 

on minority or low-income populations 

because it does not affect the level of 

protection provided to human health or 

the environment because any impacts 

that it will have will be global in nature 

and will not affect local communities or 

populations in a manner that adversely 

affects the level of protection provided 

to human health or the environment. 

K. CAA Section 307 

Pursuant to section 307(d)(1)(J) and 

(V) of the CAA, the Administrator 

determines that this action is subject to 

the provisions of section 307(d). Section 

307(d)(1)(J) provides that the provisions 

of section 307(d) apply to the 

promulgation or revision of regulations 

under Part C of Title I of the Clean Air 

Act, which covers the PSD program. 

Section 307(d)(1)(V) provides that the 

provisions of section 307(d) apply to 

‘‘such other actions as the Administrator 

may determine.’’ The Administrator 

determines that section 307(d) applies 

to the Title V program components of 

this rule. 

Furthermore, this action has a 

nationwide scope and effect. Thus, 

under section 307(b)(1) of the Act, 

judicial review of the final action on 

this proposal will be available by filing 

of a petition for review in the U.S. Court 

of Appeals for the District of Columbia 

Circuit. 

List of Subjects 

40 CFR Part 51 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Intergovernmental relations, 

Methane, Nitrous oxide. 

40 CFR Part 52 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Intergovernmental relations, 

Methane, Nitrous oxide. 

40 CFR Part 70 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Intergovernmental relations, 

Methane, Nitrous oxide. 

40 CFR Part 71 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Intergovernmental relations, 

Methane, Nitrous oxide. 

Dated: March 11, 2011. 

Lisa P. Jackson, 

Administrator. 

For the reasons stated in the 

preamble, title 40, chapter I, of the Code 

of Federal Regulations is proposed to be 

amended as follows: 

PART 51—[AMENDED] 

1. The authority citation for part 51 

continues to read as follows: 

Authority: 23 U.S.C. 101; 42 U.S.C. 7401– 

7671q. 

Subpart I—[Amended] 

2. Section 51.166 is amended by 

revising paragraph (b)(48)(ii)(a) to read 

as follows: 

§ 51.166 Prevention of significant 

deterioration of air quality. 

* * * * * 

(b) * * * 

(48) * * * 

mstockstill on DSKH9S0YB1PROD with PROPOSALS

15266 Federal Register / Vol. 76, No. 54 / Monday, March 21, 2011 / Proposed Rules 

(ii) * * * 

(a) Multiplying the mass amount of 

emissions (tpy), for each of the six 

greenhouse gases in the pollutant GHGs, 

by the gas’s associated global warming 

potential published at Table A–1 to 

subpart A of part 98 of this chapter— 

Global Warming Potentials. For 

purposes of this paragraph (b)(48)(ii)(a), 

prior to [DATE 3 YEARS AFTER THE 

EFFECTIVE DATE OF THE FINAL 

DEFERRAL RULE], the mass of the 

greenhouse gas carbon dioxide shall not 

include carbon dioxide emissions 

resulting from the combustion or 

decomposition of non-fossilized and 

biodegradable organic material 

originating from plants, animals, or 

micro-organisms (including products, 

by-products, residues and waste from 

agriculture, forestry and related 

industries as well as the non-fossilized 

and biodegradable organic fractions of 

industrial and municipal wastes, 

including gases and liquids recovered 

from the decomposition of nonfossilized and biodegradable organic 

material). 

* * * * * 

PART 52—[AMENDED] 

3. The authority citation for part 52 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

Subpart A—[Amended] 

4. Section 52.21 is amended by 

revising paragraph (b)(49)(ii)(a) to read 

as follows: 

§ 52.21 Prevention of significant 

deterioration of air quality. 

* * * * * 

(b) * * * 

(49) * * * 

(ii) * * * 

(a) Multiplying the mass amount of 

emissions (tpy), for each of the six 

greenhouse gases in the pollutant GHGs, 

by the gas’s associated global warming 

potential published at Table A–1 to 

subpart A of part 98 of this chapter— 

Global Warming Potentials. For 

purposes of this paragraph, prior to 

[DATE 3 YEARS AFTER THE 

EFFECTIVE DATE OF THE FINAL 

DEFERRAL RULE], the mass of the 

greenhouse gas carbon dioxide shall not 

include carbon dioxide emissions 

resulting from the combustion or 

decomposition of non-fossilized and 

biodegradable organic material 

originating from plants, animals, or 

micro-organisms (including products, 

by-products, residues and waste from 

agriculture, forestry and related 

industries as well as the non-fossilized 

and biodegradable organic fractions of 

industrial and municipal wastes, 

including gases and liquids recovered 

from the decomposition of nonfossilized and biodegradable organic 

material). 

* * * * * 

PART 70—[AMENDED] 

5. The authority citation for part 70 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

6. Section 70.2 is amended by revising 

paragraph (2) of the definition of 

‘‘Subject to regulation’’ to read as 

follows: 

§ 70.2 Definitions. 

* * * * * 

Subject to regulation * * * 

(2) The term tpy CO2 equivalent 

emissions (CO2e) shall represent an 

amount of GHGs emitted, and shall be 

computed by multiplying the mass 

amount of emissions (tpy), for each of 

the six greenhouse gases in the pollutant 

GHGs, by the gas’s associated global 

warming potential published at Table 

A–1 to subpart A of part 98 of this 

chapter—Global Warming Potentials, 

and summing the resultant value for 

each to compute a tpy CO2e. For 

purposes of this paragraph, prior to 

[DATE 3 YEARS AFTER THE 

EFFECTIVE DATE OF THE FINAL 

DEFERRAL RULE], the mass of the 

greenhouse gas carbon dioxide shall not 

include carbon dioxide emissions 

resulting from the combustion or 

decomposition of non-fossilized and 

biodegradable organic material 

originating from plants, animals, or 

micro-organisms (including products, 

by-products, residues and waste from 

agriculture, forestry and related 

industries as well as the non-fossilized 

and biodegradable organic fractions of 

industrial and municipal wastes, 

including gases and liquids recovered 

from the decomposition of nonfossilized and biodegradable organic 

material). 

* * * * * 

PART 71—[AMENDED] 

7. The authority citation for part 51 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

Subpart A—[Amended] 

8. Section 71.2 is amended by revising 

paragraph (2) of the definition of 

‘‘Subject to regulation’’ to read as 

follows: 

§ 71.2 Definitions. 

* * * * * 

Subject to regulation * * * 

(2) The term tpy CO2 equivalent 

emissions (CO2e) shall represent an 

amount of GHGs emitted, and shall be 

computed by multiplying the mass 

amount of emissions (tpy), for each of 

the six greenhouse gases in the pollutant 

GHGs, by the gas’s associated global 

warming potential published at Table 

A–1 to subpart A of part 98 of this 

chapter—Global Warming Potentials, 

and summing the resultant value for 

each to compute a tpy CO2e. For 

purposes of this paragraph, prior to 

[DATE 3 YEARS AFTER THE 

EFFECTIVE DATE OF THE FINAL 

DEFERRAL RULE], the mass of the 

greenhouse gas carbon dioxide shall not 

include carbon dioxide emissions 

resulting from the combustion or 

decomposition of non-fossilized and 

biodegradable organic material 

originating from plants, animals, or 

micro-organisms (including products, 

by-products, residues and waste from 

agriculture, forestry and related 

industries as well as the non-fossilized 

and biodegradable organic fractions of 

industrial and municipal wastes, 

including gases and liquids recovered 

from the decomposition of nonfossilized and biodegradable organic 

material). 

* * * * * 

[FR Doc. 2011–6438 Filed 3–18–11; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 60 and 63 

[EPA–HQ–OAR–2002–0058; EPA–HQ–OAR– 

2006–0790; EPA–HQ–OAR–2003–0119; 

FRL–9272–7] 

RIN 2060–AQ25; RIN 2060–AM44; RIN 2060– 

AO12 

National Emission Standards for 

Hazardous Air Pollutants; Notice of 

Reconsideration 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notice of reconsideration of 

final rules. 

SUMMARY: EPA is initiating a 

reconsideration process with respect to 

certain aspects of the national emission 

standards for hazardous air pollutants 

(NESHAP) for new and existing sources 

for Major Source Industrial, 

Commercial, and Institutional Boilers 

and Process Heaters; the NESHAP for 

new and existing sources for Area 

Source Industrial, Commercial, and 

Institutional Boilers; and standards of 

performance for new Commercial and 

mstockstill on DSKH9S0YB1PROD with PROPOSALS