The EPA anticipates that nonattainment designations for the 8-hour ozone national

ambient air quality standar ds (NAAQS) will occur in 2004, and the designations for the fine particle s (PM 2.5 ) NAAQS will occur in the 2004-2005 time frame. Within 3-4 y ears after designa tions are promulg ated, Sta

tes will ne ed to submi

t new atta inment de monstrati on State implementation plans (SIPs) for the new NAAQS. A ke y element in the over

all SIP planning process is the need for updated statewide emission inventories. This memorandum identifies 2002 as the

anticipa ted emissi on inventory

(EI ) base y

ear for the SIP planning

process to addre ss these pollutants. Identify ing the base y

ear at this time gives certainty to States, and the selection of 2002 harmonizes dates for other reporting re quirements, e.g., EPA’s Consolidated Emissions Reporting Rule (CERR) that requires submission of EI eve ry three years; 2002 is one of

the required years for such updates.

The Agency

encourages States to take ear ly action to reduce

emissions of pollutants that cause vi olations o f the NAA QS for ozon e (the 8- hour stan dard) a nd PM 2.5 , and that

cause regional haze. States will be able to take credit for e mission reductions that occur after the 2002 base yea r, including reductions that occur before the deadlines for submission of these SIPs. As
a matter of policy , EPA seek s to avoid p enalizing States fo r moving

forwar d early to addre ss these problems. Attached is additional information.

The EPA is aware that some areas have a lready be gun on a voluntary basis to model for purposes of the 8-hour ozone standard. These area s may continue to use modeling from previous base y ears fo r each s et of mete orologi cal epis ode cond itions for use in the ir SIP s

ubmittals if these stu dies are still applic able for

an attain ment demo nstration . The 2002EI, however , needs1 U.S. EPA, (1999), “ Guidance onthe use of models and other analyses in attainment

demonstrations for the 8-hour ozone NAAQS,” DRAFT, May 1999, Web site: http://www .epa.g ov/tnn/sc ram, under Guidance/Support, file name: O3TEST. 2

to be factored into

this analy

sis. For e xample, the

2002 inve

ntory would be a

good choice for

use in modeling “current” emissions. As described in the modeling guidance, predictions for the current emissions and predictions for the future y ear emissions are used in the modeled attainme nt test 1 . Furthermore, for reasonable f urther progress (RFP) purposes, the 2002 EI needs to be used as the base y

ear.

Please ma

ke this g uidance availab le to the a

ppropria te conta cts in y our State and loca l air agencies. Questions on this should be directed to (for ozone) Annie Nikbakht at 919-54l-5246 or (for PM 2.5 ) Rich Damberg at 919-54l-5592.

cc: Ly

dia Wegman Peter Tsi rigotis Rich Ossias Kevin McLean2 The EPA is s till workin g on the implement

ation gu idance t hat will a ddress th e extent to which sub

parts 1 a nd 2 of the

CAA apply

for purp oses of th e 8-hour ozone NAA QS. Subpar

t 1 provides up to three ye ars after nonattainment designation for States to submit attainment and reasonable further progr

ess (RFP) SIPs, while subpart 2 provides 3 to 4 y ears, depending on an area’s classification, for States to submit those plans. Attachme nt

Background

The EPA anticipates that designations for the 8-hour ozone NAAQS will occur in 2004, and the de signati ons for th e PM 2.5 NAAQS will occur in the 2004-2005 time frame. The Clean Air Act (CAA) requires States to submit attainment demonstration SIPs for the 8- hour ozone standar d within 3 to

4 ye ars (de

pending on classi fication

), and wi thin 3 y ears fo r the PM 2.5 standard. Therefore, EPA anticipates that SI Ps will be due in 2007 or 2008 2 for both NAAQS programs. For reg ional haze, most States (i.e., those participating in regional planning
organ izations) w

ill have SI

Ps due at th e same tim e as PM 2.5 SIPs. We anticipate that technical analy ses in supp ort of the se SI Ps, such a s regio nal scal e air qua lity modeling , will nee d to beg in no later than the 2004 time frame. Updated statewide emissions inventories will be an important
componen

t used in th ese ana

lys es. I n addition , for man

y of the requ ired SI Ps, emission s in upwind Sta

tes will al so be an im

portant in put to nec essary

technic al analy

ses.

For the 8 -hour ozone, PM 2.5 , and regional haze progra m areas, there are statutory and regula tory provision s relate d to prospe ctive an d/or retr ospectiv e demonst

rations o f progr

ess in reducing emissions and/or improving air quality, although the exact provisions differ somewhat across programs. We have considere d the statutory and re gulatory provisions applicable to each of these program areas, a

nd have concluded that in each case 2002 is an a ppropriate base y

ear for program requirements related to prog ress. In addition, there ar e practical reasons for choosing 2002, as explained below.

Therefore, even though EPA has not de veloped final rules or guidance for implement

ation of e ither the

8-hour ozone NAAQ S or the PM 2.5 NAAQS, EPA believes that 2002 s hould

be th e bas e y

ear i nven tory for t hese SIPplan ning efforts, i nclu ding for r egi onal haze SIPs. Using the 2002 inventory as the base year will also ensure that the inventory reflects one of the years used for calculating the air quality design values on which designation decisions are based, a s well as o ne of the ye ars in the

2000-200 4 period u sed to est ablish ba seline vis ibility levels for the regional haze prog ram. Our reasoning is explained in more detail below for e ach
program area.
The y ear 2002is also suit

able as t he princ iple or on e of the principle ye ars used

for air quality model validation.

The pra ctical r easons f or choosi ng 2002 h ave to do w

ith the re quireme

nts of the CERR (67 Federal Register 39602), whic h was finalized on June 10, 2002, and with the schedule of EPA’s own

work on th e Nationa

l Emissions I

nventory . The CERR r

equires States to su

bmit3 The CAA provides that nitrogen oxides (NO ) emission reductions may be substituted for VOC emission reductions for these subsequent three-y ear periods under prescribed circumstances. See CAA section 182(c)(2)(C).

2 emissions inventories for all criteria pollutants and their precursors eve ry three years, on a schedule that inclu

des the e missions y

ear 2002 . The due

date for the 2002 e

mission inve

ntory is establish ed in the CE

RR as June 200 4. There fore, e ach State should hav e informa

tion avai lable some time before this date to develop the in-state emissions inventory needed for technical analyses during

2004. In addition, EPA plans to make its initial version of the 2002 National Emission Inventory

(NEI) available

to the states by Dec ember 2003, based on 2002 data on emissions from electric generating units, preliminary 2002 vehicle miles trave led information from the Federal Highway Administration, and growth and control projections starting with the 1999 NEI for othe r source typ es. This pr

eliminar y 20 02 NEI

can be u sed in 2004

by e ach State needing emission estimates for upwind States. The EPA’s final 2002 NEI , which will merge and augment the state-by

-state inventories received in 2004, will be ready by the summer of 2005. Depending on where they are in their work, States may wish to switch to the newer estimates of upwind-states’ emissions, and certainly should at least consider how the emission estimates for upwind States have changed.

Alternatively, some re gional groupings of States may exchange and merge their 2002 inventor ies direc tly, prior to c ompletion o f EPA’s f inal 2002 N

EI. We will be co nsulting

with multi-state organizations about the 2002 inventory process so that work is not duplicated

un ne ce ss ar il y.

8-hour Ozone NAAQS

Under the 8-hour ozone standard, EPA anticipates that many areas designated nonattai nment for the 8-hou

r ozone NA

AQS will ne ed to comp ly w ith the ra te of pro gress (

ROP) requirement in Subpart 2 of the CAA, which applies to areas cla ssified moderate or above. Any area not subject to the subpart 2 ROP requirement would be subject to the more g eneral require ment unde

r subpar t 1 to make

RFP. Both

ROP and RF P consider

progre ss made f

rom a baseline inventor y. A s enacte d in 1990, Su bpart 2 pr ovided tha

t the base -y ear inve

ntory would be 1990. See , CAA section 182(b)(1)(B). Thus, for 1-hour ozone nona ttainment areas classified moderate or higher, ROP reductions for the tar get of 1996 were considered to be a 15 percent reduction of volatile organic compound (VOC) e missions from the 1990 baseline yea r. Similarly, for each thr

ee-ye ar period following 1996 up to its attainment date, a serious or above nonattai nment ar ea was r equired to achie ve an ad ditional 9 p ercent

reducti on in VOC e

missions. 3 Under the 8-hour ozone standard, EPA anticipates that, consistent with the above discussion, a 2002 base ye ar emissi on inventory

would be u sed as the

baseline from whic

h future targe t levels of emissions would be calculated. Therefore, a ny emission reductions that the State initiates after 2002 would be creditable toward the ROP or RFP re quirements.3

For areas subject to the subpart 2 ROP requirement, sec tion 182(b)(1)(D) places
const raint s on t he use of emi ssio n redu ction credit s from certai n pre-1 990 pr ograms even t hough those programs might achieve additional re ductions in the years f ollowing 1990, i.e., the federal motor veh

icle emis sion contr

ol progr am, Reid V apor Pre ssure pr ograms , corre ctions re quired to pre-existing reasonably

available control technology (RACT) rules, and inspection and maintenance (I/M) pr

ogram corrections. While these limitations would still apply f or purposes of cred it for SI Ps designed to meet the 8-ho ur ozone N

AAQS, EPA d

oes not be lieve it is

legall y required and does not plan to expand the list of programs for which c redit is precluded. Subpart 1 does not establish any limits on the creditability of measures for purposes of RFP and EPA does not anticipate establishing any regulatory

limits on the creditability of emission reductions. Thus, EPA does not anticipate establishing any additional constraints on crediting emission r

eduction s achiev ed in y

ears fo llowing t

he 2002 ba se year. Th erefor e, apar t from thos e programs listed in the CAA, we believe that States can take credit for other emission reductions that occur after the 2002 base y ear.

PM 2.5 NAAQS

The EPA a

nticipate s that State s will be r equired to impleme

nt the PM 2.5 NAAQS under Subpart 1 since the more specific provisions in Subpart 4 that address particulate matter expressly apply only to PM 10 . As provided above, Subpart 1 does not place limits on the ty pes of controls that are creditable for purposes of the RFP requirement. As with the 8-hour ozone NAAQS, EPA does not anticipate establishing any regulatory

constraints limiting creditability of emission controls. Subpart 1 generally calls for States to submit plans including emission reduction measures designed to attain the NAAQ S within 3 years after a nonattainment designation. It also includes a r easonable further progre ss (RFP) requirement, but does not have a specific percent reduction requir ement as there is in the ROP requirement of Subpart 2. The exact for m of the RF P require

ment for P M 2.5 has yet to be esta blished, but it is expected that any emission reductions that occur after the base y ear of 2002 would be credited toward the e mission reductions needed by

the State under its attainment demonstration and toward the reductions needed to meet the RFP requirement.

Regional Haze Program

The regional haze progra

m calls for States participating in regional planning organizations to submit SIPs in 2007-8 that contain progress g oals for every class I area

and emission r

eduction s strateg

ies need ed to meet these g oals. Prog ress in imp

roving v isibility is tracked from baseline conditions (established using air qua lity monitoring for the 2000-2004 period). If 2002 is used as the ba se year for planning purposes, then States can take cr edit for emission reductions that are achieved before the 2007-2008 SIP due date.4

Credits in General

It should be noted that EPA cannot provide “double c redit” for an emission reduction for purposes of RFP or ROP. For instance, if a progr am or rule results in emission reductions prior to or in the base ye ar, those reductions would be considered in calculating the base ye ar emissions inventory and thus could not be counted a s emission reductions from the base-y ear level. Suc

h reduct ions would

likely lower am bient pollu

tant conc entrations, howev er, and would be importa

nt in terms

of deter mining a n area’ s designation and , if desig nated non attainme nt, could affect the area’s cla ssification and thus its planning obligations. For example, emission reductions in NOx or VOC achieved prior to or during 2002 could have already resulted in the area having a lower ozone desig n value, which is the measure of whether the ar ea is violating the 8-hour ozone standard and, if so, by how much. Reductions from such measures in y ears bey ond the base ye ar would

be cred itable tow ards ROP SI

Ps. These

concep ts of cre dit were

discusse d in the January 29, 2001, memorandum fr om John Seitz entitled “Near-Term Discretionary Emission Reductions for Ozone NAAQS–Clarification,” which addressed the 1-hour ozone standard, but which are also conceptually applicable to implementation of the 8-hour ozone standard.

However, post-2002 emission reductions that benefit ozone, PM2.5 and regional ha ze can be cred ited towa rd the RF P require

ments for each of these pr ograms

.