FACT SHEET

Supplemental Proposal for Reducing Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule)

ACTION

• On May 18, 2004, the Environmental Protection Agency proposed additional details and rule text supplementing its January 2004 proposal to reduce interstate transport of fine particulate matter and ozone.

• The proposed Clean Air Interstate Rule is an important component of EPA’s efforts to implement the more protec tive national fine particle and 8-hour ozone air quality standards. When combined with the recently completed Clean Air Nonroad Diesel Rule and other national control programs, the reductions required by this final rule will allow most areas of the country to meet these st andards without having to impose additional local controls.

• The Clean Air Interstate Ru le would require 29 eastern states and the District of Columbia to significantly reduce and permanen tly cap emissions of sulfur dioxide (SO2) and/or nitrogen oxides (NOx). In 2015, NOx emissions from the power sector would be 65% below today’s levels. SO 2 emissions from that sector would be 50% below current levels by 2015 and appr oximately 70% below current leve ls when fully implemented.

< SO2 and NOx contribute to the formati on of fine partic les and ground-level ozone, pollutants that, together, are associated with thousands of premature deaths and illnesses each year.

< Reducing emissions of these pollutants will significantly address these health issues, in addition to improving visibility and protecting sensitive ecosystems. EPA’s modeling predicts that when combined with existing emissions reduction requirements, this rule would help approximately 90% of “nonattainment areas” meet national air quality standards for ozone and particle pollution.

< By addressing air pollutants from electric utilities in a cost-effective fashion, EPA’s Clean Air Interstate Rule proposal would protect public health and the environment without interfering with the steady flow of affordable energy for American consumers and businesses.

• Each of the 29 states affected by the program and the District of Columbia must submit a plan to EPA that demonstrates it will meet its assigned statewide SO2 and/or NOx emissions budget (i.e., emissi ons reduction requirements).

• States can meet the emissions reduction requireme nts by either:

< joining the EPA-managed cap-and-trad e programs for power plants, or

< achieving reductions through other emissions control measures.• This supplemental proposal provides add itional details and ru le language for implementing the Clean Air Interstate Rule. These details include specifics on EPA’s model cap-and-trade program for power plants that states may adopt to achieve required emissions reductions.

• EPA will take comment on this supplemental proposal for 45 days after it is published in the Federal Register . EPA will hold a public hearing in Alexandria, Virginia on June 3, 2004 to hear oral testimony on the supplemental proposal.

• After carefully considering all comments received, EPA expects to complete the Clean Air Interstate Rule this year.

HIGHLIGHTS OF THE SUPPLEMENTAL PROPOSAL

• EPA is proposing regulatory text for model multi-state cap and trade programs to reduce power plant emissions of SO2 and NOx.

• EPA also outlines criteria which states choosing to control non-electric generators must follow.

• EPA in partnership with states would admin ister the region-wide cap-and-trade programs.

• States that would be subject to this rule ma y choose to adopt this cap and trade program – either reference it or repeat it verbatim in their state laws – to meet the proposed SO2 and NOx emissions reductions from power plants in a flexible and cost-effective manner.

• States would be responsible for allocating emissions allowa nces and taking the lead in pursuing enforcement actions.

• EPA would be responsible for assigning the state emissions budgets, reviewing and approving state plans to achieve required re ductions, and administering the emissions and allowance tracking systems.

• EPA is proposing its deter mination that the emissions reductions under this proposed rule, if achieved by power plants under th e model cap-and-trade programs, would satisfy the best available retrofit technology (BART) requirements of the regional haze program as a “better than BART” alternative. The SO2 and NOx emissions model trading programs are expected to achieve greater emission reductions from power plants and onaverage, greater visibility improvements in impacted Class I areas compared to sourcespecific BART.

• In this proposal, EPA is also clarifying uncl ear language and correcting minor errors from the original proposal.BACKGROUND

• On January 30, 2004, EPA initially proposed th e Interstate Air Quality Rule (69 FR 4566), now called the Clean Air Interstate Ru le (CAIR). This rule would require 29 states and the District of Columbia to deve lop plans to reduce sulfur dioxide (SO2) and/or nitrogen oxides (NOx) emissions from facilities that emit these pollutants.

• Sulfur dioxide is a “precursor” or pollutant that reacts in the atmosphere to form PM2.5. NOx is a precursor to both ozone and PM2.5 formation. Reducing upwind precursor emissions will assist downwind PM2.5 and 8- hour ozone nonattainment areas in meeting national air quality standards.

• Affected states significantly contribute to a downwind state’s inability to meet national air quality standards for fine particle pollution (PM2.5) and/or 8-hour ozone.

• The proposed Clean Air Interstate Rule would reduce SO2 emissions by 5.6 million tons per year when the rules are fully implemented (approximately 70 percent below current levels). NOx emissions would be cut by 1.8 million tons annually in 2015 (about 65 percent below today's levels).

• The states that would be covered by this rule are (states listed are controlling for both particle pollution and ozone unless otherwise noted):

Alabama Arkansas Connecticut (ozone only) Delaware Florida (particle pollution only) Georgia Illinois Indiana Iowa Kansas (particle pollution only) Kentucky Louisiana Maryland Massachusetts Michigan Minnesota (particle pollution only) Mississippi Missouri New Jersey New York North Carolina Ohio Pennsylvania South Carolina Tennessee Texas (particle pollution only) Virginia West Virginia Wisconsin District of Columbia

ADDITIONAL INFORMATION

• For information on today’s supplemental pr oposal and the proposed Clean Air Interstate Rule (formerly the Interstate Air Qua lity Rule) issued in January 2004, visit www.epa.gov/interstateairquality.