U.S. Environmental Protection Agency 

Documentation of OMB Review Under Executive Order 12866 

Title of Action: 

Docket#: FRL#: RIN:

This action was submitted to the Office of Management and Budget (OMB) for review under Executive Order (E.O.) 

12866, titled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Whenever EPA makes publicly available 

a regulatory action that was reviewed under E.O. 12866, section 6(a)(3)(E) of the E.O. directs the Agency to also: 

(1) Make available to the public a copy of the information that was provided to OMB’s Office of Information and 

Regulatory Affairs (OIRA) for review under the E.O., i.e., the text of the draft regulatory action and, if applicable, 

an assessment of the potential costs and benefits, as well as additional information for those actions that are 

determined to be economically significant under the E.O. (Information requirements are described in sections 

6(a)(3)(B) and (C)). 

(2) Identify for the public any substantive changes between the draft submitted to OIRA and the action that was 

subsequently issued, using a method that is complete, clear, and simple. 

(3) Identify for the public those substantive changes made at the suggestion or recommendation of OIRA.

For this regulatory action, were substantive changes made to information reviewed under E.O. 

12866? [Please check the appropriate answer.]

No. [In the docket, include the information identified in item (1) below.]

Yes. [In the docket, include the information identified in items (1) – (3) below.]

Accordingly, the Agency has included this form and the following information in the public 

docket for this regulatory action: [Please check the appropriate information.]

(1) A copy of the information that was provided to OIRA for review under the E.O. 

(2) Documentation of any substantive changes made to the draft regulatory text that was 

submitted to OIRA when compared with what was subsequently made publicly available.

The documentation is provided on the pages following this form. Changes made at the 

suggestion or recommendation of OIRA, if any, are clearly identified through attribution to 

OIRA. EPA has used one or more of the following methods to note changes: [Select the 

appropriate option(s).]

(a) Redline-Strikeout – A copy of the draft regulatory action submitted, using redlinestrikeout to show the substantive changes that were made.

(b) Hand Markup – A copy of the draft regulatory action submitted, using handwritten notes 

to show the substantive changes that were made.

(c) Note to the file - A document that identifies the substantive changes that were made, 

with page and paragraph references to the draft regulatory action that was submitted.

If you have any questions about this regulatory action or this documentation, please call the 

contact:

Name: Email: Phone: 

Revised 05/05/2010 

Proposed Rule - Deferral for CO2 emissions from Bioenergy and Other Biogenic Sources under the

Prevention of Significant Deterioration (PSD) and Title V Programs

EPA-HQ-OAR-2011-0083 2060-AQ79

Carole Cook biodeferralPSD@epa.gov 202-343-9334
Proposed Rule: Deferral for CO2 Emissions from Bioenergy and Other Biogenic Sources under P

Programs Meeting Documentation : Interagency Meeting – Provide Overview of Proposed Rule 

Date Staff Contact Information 

(Name, email, phone #) 

Name of Organization (Attach list of all attendees names and emails if possible) 

Summary of Discussion (e.g., applicability, reporting 

requirements, etc.)

Written CommProvided? Did they also submit to Dock

2/14 Suzie Kocchi, 

Kocchi.suzanne@epa.gov

202-343-9387 

Agencies attending: OMB, DOJ, CEQ, Navy, CEA, DOE,USDA 

A conference call was held to provide the interagency group an overview on the proposed deferral for CO2 emissions from bioenergy and other biogenic sources under the PSD and Title V programs. 

No 
1 

Summary of Actions: Proposed Deferral and Interim Guidance on Biogenic CO2 

Emissions 

General Background

On January 12, 2011, EPA announced in letters to Members of Congress and the National 

Alliance of Forest Owners (NAFO) its intent to take this action as well as a number of related 

steps to address the issues associated with biogenic CO2 emissions from stationary sources. The 

full list of steps EPA outlined in that letter are: 

1. Granting the Petition for Reconsideration filed by NAFO on August 3, 2010, related to 

the PSD and Title V Greenhouse Gas (GHG) Tailoring Rule (75 FR 31514, June 3, 2010) 

(“Tailoring Rule”). 

2. Issuing this rulemaking to defer for three years the application of the PSD and Title V 

permitting requirements to biogenic CO2 emissions from stationary sources. 

3. Concurrently issuing this interim guidance on how biogenic CO2 emissions from 

stationary sources should be treated by permitting authorities until final decisions are 

made. 

4. Undertaking a detailed examination of the science associated with biogenic CO2

emissions from stationary sources, including engaging with an independent scientific 

panel to consider technical issues. 

5. Developing a rule on how biogenic CO2 emissions should be treated and accounted for in 

PSD and Title V permitting based on the feedback from the scientific and technical 

review. 

Biogenic CO2 emissions are defined as emissions of CO2 from a stationary source directly 

resulting from the combustion or decomposition of biologically-based materials other than fossil 

fuels. Examples include, but are not limited to: 

o CO2 generated from the biological decomposition of waste in landfills, wastewater 

treatment or manure management processes; 

o CO2 from the combustion of biogas collected from biological decomposition of waste in 

landfills, wastewater treatment or manure management processes; 

o CO2 from fermentation during ethanol production; 

o CO2 from combustion of the biological fraction of municipal solid waste or biosolids; 

o CO2 from combustion of the biological fraction of tire-derived fuel; and 

o CO2 derived from combustion of biological material, including all types of wood and 

wood waste, forest residue, and agricultural material. 

PSD Deferral Rule

Section I. General Information 

 Majority boilerplate contact information 

Section II. Relevant Background 

 Section II.A provides basic information on biogenic CO2 emissions including: 

o The relevant information concerning carbon source and sink dynamics 
2 

o Accounting for biogenic CO2 emissions in the Inventory of U.S. Greenhouse Gas 

Emissions and Sinks (Inventory). 

 Section II.B identifies general information concerning the PSD and Title V permitting 

programs including: 

o Background/description of GHG PSD and Title V Tailoring Rule 

o The relevant history and information concerning EPA’s treatment of biomass 

under the Tailoring Rule and in subsequent GHG permitting 

 Section II.C sets forth the complexities associated with determining the net atmospheric 

impact of biogenic CO2 emissions and factors to consider when accounting for these 

emissions in the PSD and Title V Programs, including: 

o Reconciling accounting systems: facility-based emissions and land-based 

sequestration 

o Descriptions of different accounting methodologies presented in CFI comments 

 Section II.D discusses information that is needed for EPA to determine how to account 

for CO2 emissions from various types of feedstocks and facilities. 

Section IIII. Description of Proposed Deferral 

 General rationale and legal justification for the deferral 

 Description of what is deferred 

 Mechanism for Deferral and State Implementation 

Section IV: Statutes and EOs 

Interim Guidance

Purpose: “This guidance provides an illustration of reasoning that a Prevention of Significant 

Deterioration (PSD) permitting authority may use to support the conclusion that the best 

available control technology (BACT) for carbon dioxide (CO2) emissions at a bioenergy facility 

is the combustion of biogenic fuels alone.” 

Section I: Introduction 

Section II: Description of biogenic CO2 emissions 

 Information from NPRM section II.A 

Section III: Description of previous actions related to biogenic CO2 emissions and PSD 

 Information from NPRM section II.B 

Section IV: Overview of Top-Down BACT Process 

Sections V-VIII: Application of Top-down BACT Process to a bioenergy facility, key 

discussion on: 

 Step 1 – redefining the source (pg 15-16) 

 Step 4 – environmental, economic and energy considerations (conclusions on pg 29) 

Section IX: Selecting BACT 
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6560.50 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Parts 51, 52, 70, and 71 

[EPA-HQ-OAR-2011-0083; FRL- ] 

RIN 2060-XXXX 

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 

[INSERT DATE 45 DAYS AFTER DATE OF PUBLICATION IN THE 

FEDERAL REGISTER]. 

Public Hearing. EPA will hold one hearing on this 

action. The hearing will be conducted on [INSERT THE DATE 

15 DAYS AFTER THE DATE OF PUBLICATION IN THE FEDERAL
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REGISTER], in the Washington, DC area. The EPA will 

provide further information about the hearing on its 

webpage: http://www.epa.gov/NSR/actions.html. To register 

to speak at the hearing, please go to the webpage: 

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 

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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 website 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 
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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. 

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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 website 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 
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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 

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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 

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 LowIncome 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 

Deleted: 

Deleted: is determining whether its 

emissions meet
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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.2

 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 

 

2

 See Docket EPA-HQ-OAR-2011-0083 for copies of the letters or 

http://www.epa.gov/nsr/actions.html#jan11

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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. 

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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 
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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 material3

. 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. 

 

3

 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 non-fossilized and biodegradable organic 

material). 

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Examples of “biogenic CO2 emissions” 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 tirederived 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, tire-derived 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 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
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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. 
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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. 
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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, email 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 email. 

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 
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how biogenic CO2 emissions are accounted for in the 

Inventory of U.S. Greenhouse Gas Emissions and Sinks

(Inventory).5

 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 

 

5 “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)

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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 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 

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to defer the inclusion of biogenic 

CO2 emissions in making PSD and 

Title V applicability 

determinations and anticipated 

additional future actions.
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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 
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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)6

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. 

 

6

 “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.

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into Docket EPA-HQ-OAR-2011-0083)
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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.7

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 

 

7

 “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.

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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 fuelcombustion totals to avoid this double-counting at the 

national scale.8

 

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, 

 

8

 The 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. 

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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. 

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purposes

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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) carbon dioxide 

equivalent (CO2e) per year.9

 This sink is about 12% of the 

average gross emissions from all other sources combined in 

 

9

 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-InventoryChapter-Tables.zip). See also Tables 1 and 2, LULUCF sector C 

storage.pdf. 

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EPA-OAR-HQ-2011-0083.
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the U.S. over the same time period.10 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 2020.11 

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.12 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 

 

10 See U.S. EPA, “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 

1990-2008.,” Table ES-4. 11 U.S. Dept. of State, U.S. Climate Action Report 2010., at 81. 

www.state.gov/documents/organization/140636.pdf

12 U.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-GHGInventory-2010-Annex-3-Addtl-Source-Sink-Categories.pdf 

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Communication of the United States 

of America under the United 

National Framework Convention on 

Climate Change. Chapter 5 Projected 

Greenhouse Gas Emissions, page

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See

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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 
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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 

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Deleted: ,

Deleted: (i.e., anthropogenic 

biogenic CO2 emissions) and these 

activities have certainly 

contributed to the buildup of CO2

in the atmosphere.

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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

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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 

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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, 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 

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respect to 

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project is added to other 

contemporaneous increases

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emissions at the source, the net 

emissions increase must be 

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significance level 

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(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 

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of the control

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regulation under the CAA, except 

for a

Deleted: ) whose emissions exceed its 

PSD significance level as part of 

new construction or modification 

projects at the source.
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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: 

(i) Any pollutant for which a national ambient 

air quality standard has been promulgated and any 

pollutant identified under this paragraph 

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

pollutant. ...; 

(ii) Any pollutant that is subject to any 

standard promulgated under section 111 of the 

Act; 

(iii) Any Class I or II substance subject to a 

standard promulgated under or established by 

title VI of the Act; 

(iv) 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, 

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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 

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respect to air pollutants that are subject to regulation 

under the CAA.13

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. 

 

13 Memorandum 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). 

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PSD and Title V applicability - and 

instead,

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Specifically, in the Tailoring Rule, EPA has 

implemented these PSD and Title V applicability provisions 

by applying the familiar Chevron14 two-step 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.15 

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.16 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. 

 

14 Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). 15 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. 

16 Chevron, 467 U.S. at 842-43.

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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 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 
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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 

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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 

Deleted: applying 

Deleted: at

Deleted: as of January 2, 2011

Deleted: , which would apply

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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 

Deleted: would

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tpy CO2e.17 75 Fed. Reg. 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 

 

17 U.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

Deleted: ,18

Deleted: under

Deleted: U.S. Environmental 

Protection Agency, EPA 430–R–09–

004, April 15, 2009. p.

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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 

Deleted: GHGs

Deleted: See

Deleted: we clarified that

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for “carbon dioxide equivalent.” We determined that our 

application of the “absurd results,” “administrative 

necessity,” and one-step-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 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 threshold-based 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 

Deleted: rule

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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 

Deleted: propose any sort of

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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 

Deleted: (75 FR 41173) 
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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.19 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 “topdown” 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 

 

19 http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf

Deleted: reviews 

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Deleted: biogenic CO2

Deleted: with respect to certain 

types of biomass. Public
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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.20 The petition alleged that 

the final Tailoring Rule declared, for the first time 

and without any prior proposal or notice to industry, 

 

20 National 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-HQOAR-2010-0841-0029.1

Deleted: were accepted 

Deleted: EPA

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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 nearuniversal 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, 

Deleted: GHG

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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 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. 

Deleted: application of 

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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 land-based 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-by-case 

analysis, categorical exclusion, contingent exclusion, and 

feedstock-based approaches). 

1. Reconciling accounting systems: facility-based 

emissions and land-based 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 

Deleted: Programs, to account for

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temporal resolution that is meaningful and practical for 

purposes of facility-based 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 land-based sequestration 

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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 

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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 facility-based 

emissions with land-based sequestration. How large an area 

should be considered when developing an accounting system – 

should it be facility-level, ownership-level, state-level, 

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 re-sequester 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? 

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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 

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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 

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 
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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, facilityspecific 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 
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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 
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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 proposed21. 

 

21 Though 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 
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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 

 

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). 

Deleted: EISA defines lifecycle 

greenhouse gas emissions as “...the 

aggregate quantity of greenhouse 

gas emissions (including direct 

emissions and significant indirect 

emissions such as significant 

emissions from land use changes), 

as determined by the Administrator, 

related to the full fuel lifecycle, 

including all stages of fuel and 

feedstock production and 

distribution, from feedstock 

generation or extraction through 

the distribution and delivery and 

use of the finished fuel to the 

ultimate consumer...”. 
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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 

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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, under Step 2, these sources 

can trigger permitting requirements based solely on their 

GHG emissions with no pre-requisite 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 

Deleted: in Step 1 of the Tailoring 

Rule (which runs from January 2, 

2011 to July 1, 2011),

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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, 
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which applies PSD to any "major emitting facility"22 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 

 

22 EPA'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). 

Deleted: The 

Deleted: under EPA’s interpretation 

of the terms of the CAA, 

Deleted: are
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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 

Deleted: because

Deleted: as of

Deleted: will 
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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 

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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 

Deleted: includes

Deleted: will be
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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. 

 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 

(D.C. 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). 
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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 
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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 

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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 

Deleted: Similarly, significant 

impact levels are intended to 

identify a level of ambient impact 

on air quality concentrations that 

EPA regards as de minimis. For a 

source that emits or increases 

emissions of a pollutant above the 

significant emission rate and has 

to prepare an air quality analysis, 

these values may be used to reduce 

the burden of that analysis. EPA 

considers a source whose individual 

impact falls below a SIL to have a 

de minimis impact on air quality 

concentrations. Thus, a source 

that demonstrates its impact does 

not exceed a SIL at the relevant 

location is not required to conduct 

more extensive air quality analysis 

or modeling to demonstrate that its 

emissions, in combinations with the 

emissions of other sources in the 

vicinity, will not cause or 

contribute to a violation of the 

NAAQS at that location. In light 

of insignificance of the ambient 

impact from the source alone, EPA 

considers the conduct of a 

cumulative air quality analyses and 

modeling by such a source to yield 

information of trivial or no value 

with respect to the impact of the 

proposed source or modification. 

See 75 FR 64864, 64890-94 (October 

20, 2010).¶

The significant monitoring 

concentrations in EPA regulations 

define a de minimis level of impact 

that EPA has concluded does not 

justify collecting pre-construction 

monitoring data for purposes of an 

air quality impact analysis. 45 FR 

52710. The EPA believes there is 

little to be gained from 

preconstruction monitoring of 

concentrations when the increased 

emissions from a proposed source or 

modification has a de minimis

impact on ambient concentrations. 

If a source can show through 

modeling of its emissions alone 

that its impacts are less than the 

corresponding SMC, there is little 

to be gained by requiring that 

source to collect additional 

monitoring data for a particular 

pollutant to establish background 

concentrations for further 

analysis. 75 FR 65895-97. ¶
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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 

Deleted: . For example, this 

includes

Deleted: such as

Deleted: less than

Deleted: Similar conclusions may be 

reached for other feedstocks as 

well. 
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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 

Deleted: correct amount of GHG 

emissions
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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 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 

Deleted: potential,

Deleted: ,
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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 higher-emitting 

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 
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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 

Deleted: and 
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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. 
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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. 

Deleted: have 
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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 non-biogenic 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 tirederived fuel; and 
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 CO2 derived from combustion of biological material, 

including all types of wood and wood waste, forest 

residue, and agricultural material. 

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.23 

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 

 

23 U.S. Greenhouse Gas Inventory Fast Facts(April 2010.).

http://www.epa.gov/climatechange/emissions/downloads10/US-GHGInventory-Fast-Facts-2008.pdf

Formatted: Indent: First line: 0"

Deleted: , 

Deleted: . See
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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 long-standing 

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 
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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.24

2. State decisions to adopt deferral 

 

24 75 FR 31579-81 (June 3, 2010) 

Deleted: States decision
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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 sources25 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 

 

25 Letter 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 Deleted: .
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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 

Deleted: Doing so would allow these 

states to avoid applying PSD 

requirements during the period 

needed for further study. ¶

Deleted: For those states, the 

deferral may not be appropriate. 

Accordingly,

Deleted: their state. 
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three years, and the state's resource constraints, to the 

extent that information is available. EPA solicits comment 

on 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 

Formatted: Font: Not Bold, Not Italic

Deleted: intends to issue

Deleted: simply 

Deleted: fuels.

Deleted: as of

Deleted: will need
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will not yet be in effect.26 For example, if a 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

 

26 As of January 2, 2011, permitting authorities and sources subject to 

Title V need to address any 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. 

Deleted: 

Deleted: a

Deleted: The 

Deleted: will provide

Deleted: at such

Deleted: simply 

Deleted: will
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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 
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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 
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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-for-profit 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. 
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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 
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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 
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at a facility. Thus, EO 13132 does not apply to this 

action. 

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. 
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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 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 No. 104-113 (15 
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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 LowIncome 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 
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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 
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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.
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Deferral for CO2 Emissions from Bioenergy and Other Biogenic 

Sources Under the PSD and Title V Programs - Proposed Rule 

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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: 

 __________ 

Lisa P. Jackson, 

Administrator. 
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For the reasons stated in the preamble, title 40, chapter 

I, of the Code of Federal Regulations is 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)* * * 

 (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 
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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 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 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)* * * 

Deleted: biologically-based material 

other than fossil fuel.
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 (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 nonfossilized 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 nonfossilized and biodegradable organic fractions of 

industrial and municipal wastes, including gases and 

liquids recovered from the decomposition of non-fossilized 

and biodegradable organic material). 

* * * * * 

PART 70 -- [AMENDED] 

 5. The authority citation for part 70 continues to read 

as follows: 

Deleted: biologically-based

Deleted: other than fossil fuel.
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 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 nonfossilized and biodegradable organic material originating 

from plants, animals, or micro-organisms (including 

products, by-products, residues and waste from agriculture, 

Deleted: biologically-based material 

other than fossil fuel.
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forestry and related industries as well as the nonfossilized and biodegradable organic fractions of 

industrial and municipal wastes, including gases and 

liquids recovered from the decomposition of non-fossilized 

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 
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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 nonfossilized 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 nonfossilized and biodegradable organic fractions of 

industrial and municipal wastes, including gases and 

liquids recovered from the decomposition of non-fossilized 

and biodegradable organic material). 

* * * * * 

Deleted: biologically-based

Deleted: other than fossil fuel.
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United States                                                   Office of Air and Radiation                                         March 2011

Environmental Protection

Agency

_____________________________________________________________________________________________

GUIDANCE FOR DETERMINING BEST AVAILABLE 

CONTROL TECHNOLOGY FOR REDUCING 

CARBON DIOXIDE EMISSIONS FROM BIOENERGY 

PRODUCTION

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Guidance for Determining Best Available Control 

Technology for Reducing Carbon Dioxide Emissions from 

Bioenergy Production 

Prepared by the

U.S. Environmental Protection Agency

Office of Air and Radiation

Washington, DC

March 2011

Deleted: Climate Change Division¶

Office of Atmospheric Programs¶

Deleted: February
Disclaimer 

This document explains the requirements of EPA regulations, describes EPA policies, and 

recommends procedures for permitting authorities to use to ensure that permitting decisions are 

consistent with applicable regulations. This document is not a rule or regulation, and the 

guidance it contains may not apply to a particular situation based upon the individual facts and 

circumstances. This guidance does not change or substitute for any law, regulation, or any other 

legally binding requirement and is not legally enforceable. The use of non-mandatory language 

such as “guidance,” “recommend,” “may,” “should,” and “can,” is intended to describe EPA 

policies and recommendations. Mandatory terminology such as “must” and “required” are 

intended to describe controlling requirements under the terms of the Clean Air Act and EPA 

regulations, but this document does not establish legally binding requirements in and of itself. 

   
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Table of Contents 

I. Introduction 

II. CO2 Emissions from Bioenergy and the Carbon Cycle 

III. EPA’s Previous Actions Relating to Application of PSD Program to Biogenic CO2

Emissions 

IV. Summary of the Top-Down BACT Process 

V. Step 1 of the Top-Down BACT Process 

A. Traditional Application of Step 1 

B. Previous EPA Guidance on GHG Control Strategies 

C. Application of Step 1 to Bioenergy Facilities 

VI. Step 2 – Eliminate Technically Infeasible Options 

VII. Step 3 – Rank Remaining Control Technologies 

VIII. Step 4 – Energy, Environmental, and Economic Impacts 

A. Traditional Step 4 Considerations 

1. Environmental impacts 

2. Economic impacts 

3. Energy impacts 

B. Specific Considerations at Step 4 for Bioenergy Facilities 

1. Environmental impacts 

2. Economic impacts 

3. Energy impacts 

C. Potential Conclusions in Step 4 Analysis 

IX. Step 5 – Selecting BACT 
3 

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I. Introduction 

This guidance provides an illustration of reasoning that a Prevention of Significant 

Deterioration (PSD) permitting authority may use to support the conclusion that the best 

available control technology (BACT) for carbon dioxide (CO2) emissions at a bioenergy facility1

is the combustion of biogenic fuels by itself. As of January 2, 2011, greenhouse gases (GHG), 

including CO2, became a pollutant subject to regulation under the Clean Air Act (CAA).2 Under 

existing PSD program regulations and EPA interpretations of those regulations, stationary 

sources of air pollution that require a PSD permit to authorize construction,3

 and that would have 

the potential to emit (or would increase GHG emissions by) 75,000 tons CO2 equivalent (CO2e) 

per year (tpy) or more or are requesting to increase GHG emissions by 75,000 tons CO2e per 

year (tpy) but that did not obtain such a permit prior to January 2, 2011,4 will need to 

demonstrate to the appropriate reviewing authority5

 that the proposed facility will meet GHG 

emission limitations through application of BACT.6

 To assist PSD permit applicants and 

reviewing authorities with making this determination, EPA provided guidance on November 10, 

                                                           

1

 A ‘bioenergy facility’ is defined, for the purposes of this guidance, as a facility that generates energy via the 

combustion of biologically-derived material other than fossil fuels, for example wood, biosolids, or agricultural 

products. This could be undertaken either alone or in addition to traditional fossil fuels. 2

 75 FR 17004 (April 2, 2010); 75 FR 31514 (June 3, 2010). 

3

 On June 3, 2010, EPA issued a final rule that “tailors” the applicability provisions of the PSD and title V programs 

to enable EPA and states to phase in permitting requirements for GHGs in a common sense manner (“Tailoring 

Rule”). The first Tailoring Rule step begins on January 2, 2011, and ends on June 30, 2011, and this step covers 

what EPA has called “anyway sources” and “anyway modifications” that would be subject to PSD “anyway” based 

on emissions of pollutants other than GHGs. The second step begins on July 1, 2011, and continues thereafter to 

cover both anyway sources and certain other large emitters of GHGs. 

4

 75 FR 17021 (April 2, 2010); 75 FR 31526 (June 3, 2010) 

5

 This may be EPA or a state or local government authority depending on the status of implementation. See 

75 FR 77698 (December 13, 2010); 75 FR 81874 (December 29, 2010); 75 FR 82246 - 82536 (December 30, 2010); 

76 FR 752 (January 6, 2011); 76 FR 2070 (January 12, 2011); 76 FR 2581 (January 14, 2011); 

76 FR 2591 (January 14, 2011). 

6

 40 CFR 52.21(b)(49)-(50); 40 CFR 51.166(b)(48)-(49); 40 CFR 52.21(b)(12); 40 CFR 51.166(b)(12); 40 CFR 

52.21(j)(2)-(3); 40 CFR 51.166(j)(2)-(3); 75 FR 17004 (April 2, 2010); 75 FR 31514 (June 3, 2010). 

Deleted: alone

Deleted: such as
4 

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2010 entitled PSD and Title V Permitting Guidance for Greenhouse Gases (“2010 GHG 

Permitting Guidance”),

8

 which includes a section on determining BACT for GHG. In addition to 

the November 10, 2010 guidance EPA also released technical white papers9 for several industry 

sectors. 

Any stationary source, including a bioenergy facility, that qualifies as a major stationary 

source required to obtain a PSD permit must address the BACT requirement for GHGs if it emits 

or increases its emission of this regulated pollutant in amounts greater than 75,000 tons on a 

CO2e basis.10 This guidance on determining BACT for CO2 emissions from a bioenergy facility 

is intended to supplement the 2010 GHG Permitting Guidance, and not to supersede it. This 

guidance applies to sources that generate energy from biologically–based material, and it does 

not apply to other sources that may emit biogenic CO2 but do not generate energy from the 

biological material. For the sources with biogenic emissions not covered by this guidance 

document, one should consult the 2010 GHG Permitting Guidance and prior guidance EPA has 

provided on the top-down BACT process. 

Concurrent with the release of this guidance, EPA is issuing a proposed rule to defer 

application of PSD permitting requirements to CO2 emissions from biologically-based material 

(biogenic CO2 emissions) for a three-year period. The scope of the proposed deferral is wider 

than the scope of this guidance: the deferral is intended to cover all sources of biogenic CO2

emissions, including those that emit CO2 from biologically-based material but do not generate 

energy from it. 

EPA expects to take final action on the proposed deferral rule in the July 2011 timeframe. 

In the event that EPA finalizes the deferral for the PSD program as proposed, states may require 

                                                           

8

 http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf 9

 http://www.epa.gov/nsr/ghgpermitting.html

10 75 Fed. Reg. at 31606-07; 40 CFR 52.21(b)(49); 40 CFR 52.166(b)(48). 

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includes technical white papers7

 for several industry 

sectors and general guidance

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additional time to review their state laws to incorporate the deferral established by that rule. To 

the extent no such deferral is available under the PSD permitting regulations applicable at the 

time a permitting authority issues a PSD permit for a bioenergy facility, the reasoning described 

below may be used on an interim basis to support a conclusion in such a permit that BACT for 

CO2 is combustion of biomass fuels alone. 

This document does not provide a final determination of BACT for a particular source, 

since such determinations can only be made by individual permitting authorities on a case-bycase basis after consideration of the record in each case. Upon considering the record in an 

individual case, if a permitting authority has a reasoned basis to address particular issues 

discussed in this document in a different manner than EPA recommends here, permitting 

authorities (including EPA) have the discretion to do so in decisions on individual permit 

applications consistent with the relevant requirements in the CAA and regulations. However, 

EPA believes the analysis described below will be sufficient in most cases to support the 

conclusion that utilization of biomass fuel alone is BACT for a bioenergy facility. 

It is also important to note that this guidance is meant to be interim guidance only and 

that once EPA completes the detailed examination of the science and technical issues associated 

with accounting for biogenic CO2 emissions from stationary sources, as discussed in the 

proposed deferral, those analyses may outweigh many of the considerations mentioned in this 

guidance. 

II. CO2 Emissions from Bioenergy and the Carbon Cycle 

Carbon dioxide emissions from bioenergy facilities are generated during the combustion 

of biologically-based material (e.g., forest or agricultural products) for energy. The term ‘CO2

emissions from bioenergy’ is used in this guidance to describe biogenic CO2 emissions from a 

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stationary source that directly result from the combustion of biologically-based materials other 

than fossil fuels when these materials are used to generate energy. Although every molecule of 

CO2 has the same radiative forcing in the atmosphere regardless of its source, CO2 emissions 

from bioenergy merit unique consideration in the BACT analysis because land-based biomass 

carbon stocks can be replenished more quickly than fossil fuel carbon stocks, and thus these 

biogenic carbon stocks can act as a sink on a shorter time scale than fossil carbon. For example, 

many coal deposits in North America originated 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. 

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. When biological material such as plant biomass is harvested or cleared from the 

land and burned for energy, the material acts as a source of carbon, releasing its stored carbon 

back to 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. 

EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks (the Inventory)11 tracks 

annual GHG emissions and sinks including emissions of CO2, methane (CH4), nitrous oxide 

(N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). 

That report estimates all anthropogenic sources and sinks of GHG emissions at the national 

                                                           

11 US EPA. 2010. Inventory of U.S Greenhouse Gas Emissions and Sinks: 1990-2008. U.S. EPA #430-R-10-06. 

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scale, classified into six broad sectors: Energy, Industrial Processes, Solvents and Other Product 

Uses, Agriculture, Land-Use, Land-Use Change and Forestry (LULUCF), 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. Thus, at the national level, CO2 emissions from 

biomass combustion 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 (e.g., power plant or automobile). 

Averaged over the years 1990-2008, data from the Inventory show that the LUCF sector 

in the United States has been a net sink of 841 Teragrams carbon dioxide equivalent (CO2e) per 

year.12 This sink is roughly 12% of the average gross emissions from all other sources combined 

in the United States over the same time period. 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 LUCF sink is likely to continue, if not increase in size, at 

least until 2020.13

Biogenic CO2 emissions are distinct from other regulated pollutants at bioenergy 

facilities because, unlike other pollutants and other GHGs, CO2 emissions can participate directly 

in the global carbon cycle through photosynthesis, which is critical for the maintenance of life on 

Earth. Further, emissions of CO2 can dwarf emissions of other GHGs from biomass combustion. 

For example, CO2 makes up 97.9% of the global warming potential (GWP) of the GHG 

                                                           

12 See Tables 1 and 2 in Appendix. 

13 U.S. Climate Action Report 2010. Fifth National Communication of the United States of America under the 

United National Framework Convention on Climate Change. Chapter 5 Projected Greenhouse Gas Emissions, page 

81. www.state.gov/documents/organization/140636.pdf 

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emissions from wood and wood residuals.14 Finally, because sequestration of CO2 emissions in 

living plant material outside the boundaries of the facility may counteract the emissions from 

such facilities on a continuous basis, this unique dynamic merits consideration in the BACT 

analysis. This argument is underlined by the fact that GHGs such as CO2 are well-mixed in the 

atmosphere at large spatial scales; therefore, the need to reduce them directly at the facility is of 

lesser importance so long as their net atmospheric impact is accounted for and is negative or 

zero. 

III. EPA’s Previous Actions Relating to Application of the PSD Program to Biogenic 

CO2 Emissions 

On the basis of the Inventory results described above and other considerations, 

stakeholders have requested that EPA exclude, either partially or wholly, biogenic CO2 emissions 

for the purposes of the BACT analysis and the PSD program based on the view that the 

biological material used to generate energy can also serve as a sink for carbon. In its notice 

proposing the PSD and Title V Greenhouse Gas Tailoring Rule, EPA referenced the Inventory 

for the applicable global warming potential (GWP) values and guidance on how to calculate a 

source’s GHG emissions in tons per year (tpy) CO2e. While EPA referred to the Inventory for 

GWP identification purposes only, several commenters appeared to misunderstand our intent. 

The narrow reference to the use of GWP values for estimating GHG emissions was provided to 

offer consistent guidance on how to calculate these emissions and was not intended as an 

indication, direct or implied, that biogenic emissions would be excluded from permitting 

applicability merely by association with the national Inventory.15 As noted above, the Inventory 

                                                           

14 See CO2, CH4 and N2O GWPs in Table A-1 of 40 CFR Part 98 Subpart A; and emission factors for CO2, CH4 and 

N2O from combustion of wood and wood residuals in Tables C-1 and C-2 of 40 CFR Part 98 Subpart C. 15 See 74 FR 55351, under the definition for ‘carbon dioxide equivalent’ 
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does not exclude these emissions, but simply includes them in the LUCF Sector rather than the 

Energy Sector to avoid double-counting at the national scale. 

In response, when finalizing the Tailoring Rule, EPA acknowledged the role that 

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 sources and fossil sources of CO2 emissions differently.16 Nevertheless, 

we determined that we lacked a sufficient record at that time to apply the legal rationales utilized 

in the Tailoring Rule to exclude emissions of CO2 from biogenic sources in determining 

permitting applicability provisions. At that time, we had not requested and did not obtain public 

comments addressing the particular administrative burden of permitting projects that specifically 

involve biogenic CO2 emissions from energy production. Although EPA did not promulgate an 

applicability exclusion for biogenic emissions in the final Tailoring Rule, EPA did observe that 

flexibility exists to apply the existing regulations and policies regarding BACT in ways that take 

into account their net effects on atmospheric GHG concentrations. 

In order to explore the issue further following the promulgation of the Tailoring Rule, in 

July 2010 EPA solicited views from the public through a Call for Information (CFI) on 

approaches to accounting for biogenic 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. Also, we solicited information on the 

means to estimate and measure CO2 emissions from a variety of biogenic fuels. 

EPA issued its PSD and Title V Permitting Guidance for Greenhouse Gases on 

November 10, 2010 (“2010 GHG Permitting Guidance”), which discusses the basic information 

                                                           

16 See 75 FR 31514. 

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that permit writers and applicants need to address GHG emissions in permits.17 To assist 

permitting authorities carrying out BACT analyses for GHGs pending further EPA action, the 

guidance indicated that permitting authorities may consider the environmental, energy and 

economic benefits that may accrue from the use of certain types of biogenic fuels (e.g., biogas 

from landfills) for energy generation, consistent with existing air quality standards. Noting that 

a variety of federal and state policies have recognized that some biogenic fuels 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 biogenic fuels. EPA observed that, based on these considerations, 

permitting authorities might determine in the GHG component of the BACT analysis for new or 

modified bioenergy facilities, as defined in Section I, that such utilization of biogenic fuels is 

inherently BACT for GHGs. To assist permitting authorities further in considering these factors, 

EPA announced its intent to issue guidance that will provide a suggested framework for 

undertaking an analysis of the environmental, energy and economic impacts of using biogenic 

fuels in Step 4 of the top-down BACT process. 

IV. Summary of the Top-Down BACT Process 

On November 10, 2010, EPA issued the 2010 GHG Permitting Guidance, which 

supplements prior EPA guidance on determining BACT, including EPA’s 1990 Draft New 

Source Review Workshop Manual (“1990 Workshop Manual”).18 In the 2010 GHG Permitting 

                                                           

17 PSD and Title V Permitting Guidance for Greenhouse Gases. Prepared by EPA staff. November 2010. Available 

at: http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf 18 “PSD and Title V Permitting Guidance for Greenhouse Gases.” Prepared by EPA staff. November 2010. 

Available at: http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf; 

“New Source Review Workshop Manual; Draft.” October 1990. 

Available at: http://www.epa.gov/ttn/nsr/gen/wkshpman.pdf. 

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Greenhouse Gases (“

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Guidance, EPA recommends that permitting authorities continue to use the Agency’s five-step 

“top-down” BACT process to determine BACT for GHGs. In brief, the top-down process calls 

for all available control technologies for a given pollutant to be identified and ranked in 

descending order of control effectiveness. A permit applicant should first examine the highestranked (“top”) option. The top-ranked option(s) should be established as BACT unless the 

permit applicant demonstrates to the satisfaction of the permitting authority that technical 

considerations, or energy, environmental, or economic impacts justify a conclusion that the topranked technology is not “achievable” in that case. If the most effective control strategy is 

eliminated in this fashion, then the next most effective alternative should be evaluated, and so on, 

until an option is selected as BACT.19 This analysis should be conducted for each regulated 

NSR pollutant that is subject to the BACT requirement in a given case. 

EPA has broken down this analytical process into the following five steps, some of which 

are discussed in detail later in this section. 

Step 1: Identify all available control technologies. 

Step 2: Eliminate technically infeasible options. 

Step 3: Rank remaining control technologies. 

Step 4: Evaluate most effective controls and document results. 

Step 5: Select BACT. 

For additional detail on this process, consult the 2010 GHG Permitting Guidance and references 

contained therein. As this guidance focuses on unique considerations for bioenergy facilities, the 

discussion that follows elaborates only on those steps where EPA believes such considerations 

are most likely to arise. 

                                                           

19 2010 GHG Permitting Guidance at 18. 

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V. Step 1 of the Top-Down BACT Process 

A. Traditional Application of Step 1 

The first step in the top-down BACT process is to identify all available control options. 

Available control options are those air pollution control technologies or techniques (including 

lower-emitting processes and practices) that have the potential for practical application to the 

emissions unit and the regulated pollutant under evaluation. They typically include the 

application of alternative production processes, methods, systems, and techniques, including 

clean fuels or treatment or innovative fuel combustion for control of the affected pollutant.20 

However, while Step 1 is intended to capture a broad array of potential options for 

pollution control, this step of the process is not without limits. EPA has recognized that a Step 1 

list of options need not necessarily include inherently lower polluting processes that would 

fundamentally redefine the nature of the source proposed by the permit applicant.21 BACT 

should generally not be applied to regulate the applicant’s purpose or objective for the proposed 

facility. In assessing whether an option would fundamentally redefine a proposed source, EPA 

recommends22 that permitting authorities apply the analytical framework recently articulated by 

the Environmental Appeals Board. 24 The underlying record will be an essential component of a 

                                                           

20 See pages 25-34 of “PSD and Title V Permitting Guidance for Greenhouse Gases.” (November 2010) for more 

general background on Step 1 of the top-down process. 

21 In re Prairie State Generating Company, 13 E.A.D. 1, 23 (EAB 2006). 22 See, generally, In the Matter of American Electric Power Service Corporation, Southwest Electric Power

Company, John W. Turk Plant, Petition No. VI-2008-01 (Order on Petition) (December 15, 2009) (title V order

referencing and applying framework developed by the EAB) ; In the Matter of Cash Creek Generation, LLC,

Petition Nos. IV-2008-1 & IV-2008-2 (Order on Petition) (December 15, 2009) (same).

24 The EPA Environmental Appeals Board has applied this framework for evaluating redefining the source questions

in three cases involving coal-fired power plants. In re Desert Rock Energy Company, PSD Appeal No. 08-03 et al.

(EAB Sept. 24, 2009); In re Northern Michigan University, PSD Appeal No. 08-02 (EAB Feb. 18, 2009); In re

Prairie State Generating Company, 13 E.A.D. 1 (EAB 2006). For additional examples of how EPA approached the

redefining the source issue in the context of power plants prior to developing this analytical framework, see the

following decisions. In re Old Dominion Electric Cooperative, 3 E.A.D. 779 (Adm’r 1992); In re Hawaiian

Commercial & Sugar Co., 4 E.A.D. 95 (EAB 1992); In re SEI Birchwood Inc., 5 E.A.D. 25 (EAB 1994). EPA also

considered this issue in the context of waste incinerators prior to developing the recommended analytical

framework. In re Pennsauken, 2 E.A.D. 667 (Adm’r 1988); In the Matter of Spokane Regional Waste-to-Energy

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authority should look first at the administrative 

record to see how the applicant defined its goal, 

objectives, purpose or basic design for the proposed 

facility in its application.

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supportable BACT determination that a candidate control technology redefines the source.25 The 

“redefining the source” issue is ultimately a question of degree that is within the discretion of the 

permitting authority. Ultimately, any decision to exclude an option on “redefining the source” 

grounds must be explained and documented in the permit record, especially where such an 

option has been identified as significant in public comments.27 The 2010 GHG Permitting 

Guidance provides more information that permit writers and applicants may consult on this topic. 

The CAA includes “clean fuels” in the definition of BACT.28 While clean fuels that 

would reduce GHG emissions should be considered, EPA has recognized that the initial list of 

control options for a BACT analysis does not need to include “clean fuel” options that would 

fundamentally redefine the source. Such options include those that would require a permit 

applicant to switch to a primary fuel type (e.g., coal, natural gas, or biomass) other than the type 

of fuel that an applicant proposes to use for its primary combustion process. 

 B. Previous EPA Guidance on GHG Control Strategies 

As EPA discussed in the 2010 GHG Permitting Guidance, for the purposes of a BACT 

analysis for GHGs, EPA classifies carbon capture and sequestration as an add-on pollution 

control technology29 that is “available”30 for large CO2-emitting facilities including fossil fuel-

                                                                                                                                                                                               

Facility, 2 E.A.D. 809 (Adm’r 1989); In the Matter of Brooklyn Navy Yard Resource Recovery Facility, 3 E.A.D.

867 (EAB 1992); In re Hillman Power Co., LLC, 10 E.A.D. 673, 684 (EAB 2002). In another case, EPA considered

this question in the context of a conversion of a natural-gas fired taconite ore facility to a petcoke fuel. In re

Hibbing Taconite Co., 2 E.A.D. 838 (Adm’r 1989). For an example of the application of this concept to a fiberglass

manufacturing facility, see In re Knauf Fiber Glass, 8 E.A.D 121 (EAB 1998). 25 In re Desert Rock Energy Company, PSD Appeal No. 08-03 et al. (EAB Sept. 24, 2009), slip op. at 65, 76. 27 In re Desert Rock Energy Company, slip op. at 70-71, 76-77; In the Matter of Cash Creek Generation, Order at 7- 

10. 

28 42 USC 7579(3). EPA has not yet updated the definition of BACT in the PSD regulations to reflect the addition 

of the “clean fuels” language that occurred in the 1990 amendments to the Clean Air Act. 40 CFR 52.21(b)(12); 40 

CFR 51.166(b)(12). Nevertheless, EPA reads and applies its regulations consistent with the terms of the Clean Air 

Act. 

29 EPA recognizes that CCS systems may have some unique aspects that differentiate them from the types of 

equipment that have traditionally been classified as add-on pollution controls (i.e., scrubbers, fabric filters, 

electrostatic precipitators). However, since CCS systems have more similarities to such devices than inherently 

Deleted: proposed

Deleted: The permitting authority should keep in 

mind that BACT, in most cases, should not be 

applied to regulate the applicant’s purpose or 

objective for the proposed facility.26

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fired power plants and industrial facilities with high-purity CO2 streams (e.g., hydrogen 

production, ammonia production, natural gas processing, ethanol production, ethylene oxide 

production, cement production, and iron and steel manufacturing). For these types of facilities, 

CCS should be listed in Step 1 of a top-down BACT analysis for GHGs. This does not 

necessarily mean CCS should be selected as BACT for such sources, since other considerations 

such as technical feasibility or economic impacts may justify elimination of such options at later 

steps of the process. 

 In addition, EPA has observed that the application of methods, systems, or techniques to 

increase energy efficiency is a key GHG-reducing opportunity that falls under the category of 

“lower-polluting processes/practices.” Use of inherently lower-emitting technologies, including 

energy efficiency measures, represents an opportunity for GHG reductions in these BACT 

reviews. EPA has encouraged permitting authorities to use the discretion available under the 

PSD program to include the most energy efficient options in BACT analyses for both GHG and 

other regulated New Source Review (NSR) pollutants. Since the use of add-on controls to 

reduce GHG emissions is not as well-advanced as it is for most combustion-derived pollutants, 

                                                                                                                                                                                               

lower-polluting processes, EPA believes that CCS systems are best classified as add-on controls for purposes of a 

top-down BACT analysis. 

30 As noted above, a control option is “available” if it has a potential for practical application to the emissions unit 

and the regulated pollutant under evaluation. Thus, even technologies that are in the initial stages of full 

development and deployment for an industry, such as CCS, can be considered “available” as that term is used for the 

specific purposes of a BACT analysis under the PSD program. In 2010, the Interagency Task Force on Carbon 

Capture and Storage was established to develop a comprehensive and coordinated federal strategy to speed the 

commercial development and deployment of this clean coal technology. As part of its work, the Task Force 

prepared a report that summarizes the state of CCS and identified technical and non-technical challenges to 

implementation. EPA, which participated in the Interagency Task Force, supports the Task Force’s 

recommendations concerning ongoing investment in demonstrations of the CCS technologies based on the report’s 

conclusion that: “Current technologies could be used to capture CO2 from new and existing fossil energy power 

plants; however, they are not ready for widespread implementation primarily because they have not been 

demonstrated at the scale necessary to establish confidence for power plant application. Since the CO2 capture 

capacities used in current industrial processes are generally much smaller than the capacity required for the purposes 

of GHG emissions mitigation at a typical power plant, there is considerable uncertainty associated with capacities at 

volumes necessary for commercial deployment.” See Report of the Interagency Task Force on Carbon Capture and 

Storage, p.50 (http://www.epa.gov/climatechange/policy/ccs_task_force.html). 

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initially, in many instances energy efficient measures may serve as the foundation for a BACT 

analysis for GHGs with add-on pollution control technology and other strategies added as they 

become more accessible. 

C. Application of Step 1 to Bioenergy Facilities 

At the outset, when considering an application to construct or modify a bioenergy 

facility, it will be important to address the extent to which the BACT analysis for GHGs should 

include comparative evaluation of biogenic fuels and other types of fuels, including fossil fuels. 

However, where a proposed bioenergy facility can demonstrate that utilizing a particular type of 

biogenic fuel is fundamental to the primary purpose of the project, then at the first step of the 

top-down process, permitting authorities can rely on that to determine that use of another fuel 

would redefine the proposed source. 

To the extent this showing is made by a permit applicant proposing to construct or 

modify an electric generating facility that would utilize biomass fuels alone in the primary 

production process, the options listed as Step 1 of a top-down BACT analysis for GHGs may be 

limited to (1) utilization of biomass fuel alone, (2) energy efficiency improvements, and (3) 

carbon capture and sequestration if the source meets the characteristics summarized above and 

described in more detail in the 2010 GHG Permitting Guidance. 

In cases where a permit applicant proposes to co-fire or combine biomass fuels with 

another primary fuel type, the list of BACT options should include the option of utilizing both 

types of primary fuels in different combinations. If the applicant proposes a specific 

proportional allocation or fuel mix (i.e., <5 percent biomass, >95 percent fossil fuel) and believes 

other allocations should be eliminated from consideration in the BACT analysis for GHGs, the 

permit application should provide an explanation as to why the particular allocation desired by 

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the applicant is necessary to achieve a fundamental business objective of the project. If the 

permit applicant is unable to demonstrate that a different allocation of primary fuels would 

fundamentally redefine the proposed source, the options at Step 1 should include varying 

allocations of the two primary fuels if the proportional allocation of fuels has the potential to 

affect the amount of GHGs emitted from the facility or the net atmospheric GHG concentrations. 

Although not necessarily a bioenergy facility, recovery furnaces at kraft pulp and paper 

mills may not have the option of considering alternative fuels. The fundamental purpose of 

recovery furnaces used at this type of facility is to recover and regenerate the cooking chemicals 

(used in the pulping process) from the spent liquor or “black liquor” exiting the digesters and 

evaporators. As a secondary benefit, this process also produces energy. Requiring such a 

recovery furnace that is fully integrated into the production process to utilize a fuel other than the 

black liquor to generate this energy would frustrate the primary purpose of these furnaces to 

recover and regenerate the cooking chemicals. Thus, EPA believes the option of using 

alternative fuels in a recovery furnace would fundamentally redefine this type of unit. Facilities 

proposing to use black liquor in the recovery furnace of the kraft pulping process need not 

include fuels other than black liquor at Step 1 of a top-down BACT analysis for such a unit. 

VI. Step 2 – Eliminate technically infeasible options 

 Step 2 of the top-down BACT analysis should be conducted in the same manner for 

bioenergy facilities as other types of sources. Step 2 is discussed in detail in the 2010 GHG 

Permitting Guidance. With respect to facilities that are co-firing biomass and other fuels, if the 

record shows that an option that involves using a greater proportion of biomass fuels than 

proposed by the permit applicant is not technically feasible, it may be eliminated from further 

consideration at this step with an appropriate justification. 

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VII. Step 3 – Rank remaining control technologies 

As with Step 2, EPA recommends applying the same consideration in Step 3 of the 

BACT analysis for a bioenergy facility that would apply to other types of sources. Step 3 is 

discussed in detail in the 2010 GHG Permitting Guidance. 

VIII. Step 4 – Energy, Environmental, and Economic Impacts 

A. Traditional Step 4 Considerations 

Under Step 4 of the top-down BACT analysis, permitting authorities must consider the 

economic, energy, and environmental impacts arising from each option remaining under 

consideration. Accordingly, after all available and technically feasible control options have been 

ranked in terms of control effectiveness (BACT Step 3), the permitting authority should consider 

any specific energy, environmental, and economic impacts identified with those technologies to 

either confirm that the top control alternative is appropriate or determine it to be inappropriate. 

The “top” control option should be established as BACT unless the applicant demonstrates, and 

the permitting authority agrees, that the energy, environmental, or economic impacts justify a 

conclusion that the most stringent technology is not “achievable” in that case. If the most 

stringent technology is eliminated in this fashion, then the next most stringent alternative is 

considered, and so on. 

1. Environmental impacts 

EPA and other permitting authorities have most often used this analysis to eliminate more 

stringent control technologies with significant or unusual effects that are unacceptable in favor of 

the less stringent technologies with more acceptable collateral environmental effects. However, 

EPA has also interpreted the BACT requirements to allow for a more stringent technology to 

remain in consideration as BACT if the collateral environmental benefits of choosing such a 

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technology outweigh the economic or energy costs of that selection.31 In other words, the 

permitting authority is not limited to evaluating the impacts of only the “top” or most effective 

technology but can assess the impacts of all technologies under consideration.32 The same 

principle applies when assessing technologies for controlling GHGs. 

In BACT Step 4, the applicant and permitting authority should consider both direct and 

indirect impacts of the emissions control option or strategy being evaluated. EPA has previously 

referred to BACT Step 4 as the “collateral impacts analysis,”33 but this term is primarily 

applicable only to the environmental impact analysis. Overall, the Step 4 analysis is more 

accurately described as an environmental, economic, and energy impacts analysis that includes 

both direct and indirect (i.e., collateral) considerations. 

Since a BACT limitation must reflect the maximum degree of reduction achievable for 

each regulated pollutant, EPA has emphasized that the environmental impacts analysis in Step 4 

should concentrate on impacts other than direct impacts due to emissions of the regulated 

pollutant that is the subject of the BACT analysis. EPA has recognized that consideration of a 

wide variety of environmental impacts is appropriate, such as solid or hazardous waste 

generation, discharges of polluted water from a control device, visibility impacts, demand on 

local water resources, and emissions of other pollutants subject to NSR or pollutants not 

regulated under NSR such as air toxics.34 In discussing the particulars of a BACT analysis for 

GHGs, EPA reiterated in the 2010 GHG Permitting Guidance that the environmental impact 

                                                           

31 In the Matter of North County Resource Recovery Assoc., 2 E.A.D. at 230-31. 32 In re Knauf Fiber Glass, 8 E.A.D. at 131 n. 15. 33 In re Hillman Power, 10 E.A.D. at 683; In the Matter of Columbia Gulf Transmission Co., 2 E.A.D. 824, 828 n. 5 

(Adm’r 1989); In re Kawaihae Cogeneration Project, 7 E.A.D. 107, 116-17 (EAB 1997). 

34 1990 Workshop Manual at B.46; In the Matter of North County Resource Recovery Assoc., 2 E.A.D. 229, 230 

(Adm’r 1986).; In the Matter of Columbia Gulf Transmission Co., 2 E.A.D. at 828. 
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analysis should continue to concentrate on impacts other than the direct impacts due to emissions 

of the regulated pollutant that is the subject of the BACT analysis. 

2. Economic impacts 

EPA has previously advised that the economic impacts component of the analysis should 

focus on direct economic impacts calculated in terms of cost effectiveness (dollars per ton of 

pollutant emission reduced). This cost effectiveness should be addressed on both an average 

basis for each measure and combination of measures, and on an incremental basis comparing the 

costs and emissions performance level of a control option to the cost and performance of the next 

most stringent control option.35 The emphasis should be on the cost of control relative to the 

amount of pollutant removed, rather than economic parameters that provide an indication of the 

general affordability of the control alternative relative to the source. To justify elimination of an 

option on economic grounds, the permit applicant should demonstrate that the costs of pollutant 

removal for that option are disproportionately high.36

3. Energy impacts 

EPA has traditionally called for the energy impacts analysis to consider only direct 

energy consumption and not indirect energy impacts, such as the energy required to produce raw 

materials for construction of control equipment.37 Direct energy consumption impacts include 

the consumption of fuel and the consumption of electrical or thermal energy. This energy 

impacts analysis should include an assessment of demand for both electricity that is generated 

onsite and power obtained from the electrical grid, and may include an evaluation of impacts on 

fuel scarcity or a locally desired fuel mix in a particular area. Applicants and permitting 

                                                           

35 1990 Workshop Manual, Section IV.D.2.b (B.36 – B.44). 

36 1990 Workshop Manual at B.31-32. 

37 In re Power Holdings, PSD Appeal No. 09-04 (EAB Aug. 13, 2010), slip op. at 22, n.17 (citing 1990 Workshop 

Manual at B.30). 
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authorities should examine whether the energy requirements for each control option result in any 

significant or unusual energy penalties or benefits.38 The costs associated with direct energy 

impacts should be calculated and included in the economic impacts analysis (i.e., cost 

analysis).39

B. Specific Considerations at Step 4 for Bioenergy Facilities 

While the more traditional approach that EPA has applied in the Step 4 analysis is to 

eliminate options from the top-down BACT analysis based on unacceptable adverse energy, 

environmental, or economic impacts, this is not the only way to conduct a Step 4 analysis. EPA 

has recognized a permitting authority is not limited to evaluating the impacts of only the “top” or 

most effective technology (based on the ranking options based on control of released from the 

facility) but can assess the impacts of all technologies under consideration.40 This approach may 

include an evaluation of the energy, environmental, and environmental benefits of all options 

under consideration without explicitly eliminating options based on adverse impacts. 

1. Environmental impacts 

Although EPA has not recommended focusing on the environmental impacts of the 

pollutant that is the subject of the BACT analysis, with respect to CO2 emissions from bioenergy 

facilities, EPA believes a different frame of reference should be considered because of the nature 

of the carbon cycle and the fact that the production of biomass entails carbon sequestration. 

Within the context of the PSD program, a potential justification that biogenic CO2 emissions can 

be accounted for differently than non-biogenic CO2 emissions at the facility relies on the 

argument that sequestration occurs. This sequestration occurs offsite, outside the boundaries of 

                                                           

38 1990 Workshop Manual at B.29. 

39 1990 Workshop Manual at B.30. 

40 In re Knauf Fiber Glass, 8 E.A.D. at 131 n. 15. 
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the facility. Therefore, given its traditional focus on “collateral” environmental impacts and 

benefits, Step 4 of the BACT analysis seems well-suited to enable permitting authorities to 

consider the potential sequestration of carbon in biogenic resources outside the boundaries of the 

facility when evaluating BACT for greenhouse gases. This approach was reinforced by CFI 

comments, which emphasized the importance of reconciling the focus of the PSD and Title V 

program regulations on the amount of emissions released from each individual facility with the 

role that land-based sequestration may play in mitigating the net atmospheric GHG impact of 

emissions from individual sources. Because other pollutants and non-CO2 GHGs do not 

participate in natural biogeochemical carbon cycles to the same extent that CO2 does, this frame 

of reference – in which the potential for sequestration outside the facility of pollutant subject to 

the BACT analysis is considered as part of the environmental impacts at Step 4 – is not relevant 

for those other pollutants. 

In addition to using this frame of reference in which sequestration outside the boundaries 

of the facility is considered, it may also be appropriate to consider broad categories of feedstocks 

in terms of their net impact on atmospheric GHG stocks. A complete accounting of the net 

atmospheric GHG impact of a facility utilizing particular feedstocks would rely on a case-bycase, facility-specific assessment of the impact of the proposed facility. This type of facilityspecific approach would also likely be the most scientifically sound approach for assessing the 

direct carbon cycle impact of specific biogenic fuels used at the facility, because there is inherent 

variability in biological processes, as well as the variability in space and time common to 

estimates of sequestration. 

The BACT analysis should consider a variety of factors that may influence the net 

amount of carbon added to the atmosphere from and utilization of bioenergy at a facility. An 

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important area of consensus from commenters on the CFI was the idea that feedstocks are 

different, and that the net impact of bioenergy and other biogenic emissions is associated with 

the feedstock that is used.   The level of sequestration that occurs naturally on the landscape 

without additional intervention can be considered the “business as usual” (BAU) case. In other 

words, this level of sequestration (or emissions) will likely continue into the future without 

additional action. For example, if enhanced plant growth causes sequestration to increase 

beyond the level expected in the BAU case for that region, then more carbon will be taken out of 

the atmosphere than expected in the BAU case. Similarly, if certain activities, such as logging, 

are accelerated in a particular region over a certain period of time, and associated emissions are 

thereby increased, then sequestration on land will decline and net atmospheric carbon stocks will 

increase over the BAU case. For bioenergy and other biogenic CO2 emissions, where such a 

wide variety of potential feedstocks exists, the BAU case might be considered the emissions that 

“would have happened anyway.” Using this approach, a permitting authority would have to 

assess the extent to which a policy action or an activity increases or reduces CO2 emissions 

above or below what would have occurred in comparison to the BAU case. From the perspective 

of bioenergy and other biogenic CO2 emissions , emissions that would have occurred regardless 

of whether or not the facility captured the energy from the biofuel use or carried out the process 

using biological material as a feedstock might demonstrate that the cost of additional pollutant 

controls for CO2 emissions is not justified. 

Land use change has a separate set of considerations under the BAU case. Specifically, if 

the rate of transition of land use from forest to agricultural use were to increase over and above 

that which occurred in the BAU case, and if this increase were attributable to market demand for 

the bioenergy crop, then it would be possible that these emissions would be additional to the 

Deleted: favorable conditions for

Deleted: cause

Deleted: what is incorporated into

Deleted: net atmospheric

Deleted: stocks 

Deleted: decrease beyond

Deleted: the

Deleted: In the context of
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emissions expected under BAU. In that situation, the BAU case is the non-bioenergy case, such 

that the bioenergy use might result in increased atmospheric CO2 levels. 

However, such a case-by-case analysis of the net atmospheric impact of biomass fuels 

would likely be prohibitively time-consuming and complex for facilities and permitting 

authorities. The information we have 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, additional detailed examination of science and technical issues 

is needed to ensure that permitting authorities would be able to reasonably calculate and 

implement accounting for the amount of GHG emissions above BAU in particular instances, or 

to assure consistency among the calculation methodologies of the various permitting authorities. 

Given the challenge of conducting a complete analysis for each permit application, a more 

practical approach to accounting is needed. Absent this, the burden on permitting authorities is 

likely to be overwhelming. 

For at least one category of biomass feedstocks that may be used in energy production, it 

does appear possible at this time to conclude that the atmospheric impact is negligible. Some 

commenters on the CFI suggested that utilizing mill residue (e.g. sawdust, planar shavings, panel 

trim) to generate energy, rather than leaving the residue to decompose, likely would not cause 

emissions over and above that which would have taken place if the energy use did not occur. 

Given that this material would have decomposed under natural circumstances in a short period of 

time (e.g., 10-15 years) in the absence of utilization as bioenergy, this conclusion appears 

credible. 

Deleted: less than 
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In some cases, the use of biological material as a fuel would clearly reduce net 

atmospheric CO2 stocks in comparison with BAU fossil fuel emissions. In these cases, requiring 

permitting at this time, before conducting the detailed analysis 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 (that would emit CO2 anyway through 

natural decomposition), is likely to discourage the utilization of a readily available resource that 

would clearly reduce CO2 emissions, in comparison with BAU fossil fuel-related emissions. 

In November 2010, EPA said it would provide guidance containing qualitative 

information on useful issues to consider with respect to biomass combustion, such as specific 

feedstock types and trends in carbon stocks at different spatial scales (e.g. national, regional, 

state). Upon further review, EPA has concluded that it requires further discussion with partners 

and scientists both inside and outside the federal government, as well as engagement with an 

independent scientific panel, before it can make more qualitative characterizations beyond the 

one described above for residue material. 

2. Economic impacts 

As discussed earlier in this section, EPA has previously advised that the economic 

impacts component of BACT analysis should focus on direct economic impacts calculated in 

terms of cost effectiveness (dollars per ton of emission reduction). As noted in the 2010 GHG 

Permitting Guidance, EPA recognizes that at present add-on controls for CO2 are generally 

expensive technologies, largely because of the costs associated with CO2 capture and storage. 

As with other electric generating facilities, these direct costs will generally make the price of 

Deleted: scientific input from

Deleted: especially

Deleted: compression
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electricity from bioenergy used in conjunction with add-on control technologies for CO2

uncompetitive compared to electricity from plants with other GHG controls, such as bioenergy 

alone. 

In addition to the direct economic impacts component of the BACT analysis, permitting 

authorities may also consider indirect economic impacts, including potential economic benefits. 

Such indirect considerations may include economic growth and the availability of employment 

opportunities generated within a particular region or community by the utilization of biomass 

fuels. As EPA noted in the 2010 GHG Permitting Guidance, it is appropriate for permitting 

authorities to account for the underlying objectives of federal and state policies to foster 

expansion of renewable resources and promote biomass. Tax incentives are an example of such 

policies. Where one of the underlying objectives of a tax incentive or other type of policy 

promoting renewable energy or biomass utilization is to foster economic growth and create jobs 

in particular area, this may be considered as a relevant indirect economic impact or benefit that 

can be considered in Step 4 of a BACT analysis. Where selecting a particular option as BACT 

would further the goals of such policy, this may form part of the basis for selecting that option as 

BACT. Likewise, where the record shows that requiring a particular control option as BACT 

would counteract, or work at cross purposes from, policies that are intended to promote 

renewable energy and biomass, this may form part of the justification for eliminating an option 

from further consideration at Step 4 of the BACT analysis. 

Many federal and state policies, along with a number of regional efforts, are currently 

underway to foster the expansion of renewable resources and promote bioenergy projects as a 

way of addressing climate change, increasing domestic alternative energy production, enhancing 

forest management and creating related employment opportunities. For example, the federal 

Deleted: impacts

Deleted: select
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Renewable Electricity Production Tax Credit, a per-kilowatt-hour tax credit for electricity 

generated by qualified energy resources including biomass, was originally enacted by the Energy 

Policy Act of 1992 (largely by amending the Internal Revenue Code of 1986). Numerous pieces 

of federal legislation, the most recent being the American Recovery and Reinvestment Tax Act 

of 2009, have since been passed to extend certain related expiring tax provisions and expand the 

scope of qualified biomass feedstocks, with the duel aims of domestic job creation and economic 

stabilization.41,42 Such policies can improve the economy, especially in rural communities, by 

generating jobs, income, and taxes through demand for local biogenic resources and construction 

of bioenergy conversion facilities. Specifically, an improved market for biogenic fuels and forest 

land could affect economic stabilization through increased incomes (from new jobs), higher local 

tax base and possibly through the diversification of local energy sources, and increased 

competition could lower energy prices. 

As another example of such economic impacts, the Record of Decision for the Biomass 

Crop Assistance Program (BCAP) –a program created by the 2008 Farm Bill that provides 

financial assistance to biomass conversion facilities and owners of agricultural and non-industrial 

private forest land who wish to establish, produce, and deliver biomass feedstocks – estimated 

the total economic impact from broad BCAP implementation to include $88.5 billion in related 

economic activity and the creation of nearly 700,000 jobs.43 Other potential indirect economic 

considerations from biomass utilization as BACT could include, but are not limited to, increased 

                                                           

41 American Recovery and Reinvestment Tax Act of 2009. The Library of Congress. 

http://thomas.loc.gov/home/h1/Recovery_Bill_Div_B.pdf 

42 H. R. 1424 Emergency Economic Stabilization Act of 2008. The Library of Congress. http://thomas.loc.gov 

H. R. 4520 American Jobs Creation Act of 2004. The Library of Congress. http://thomas.loc.gov 

H. R. 3090 Job Creation and Worker Assistance Act of 2002. The Library of Congress. http://thomas.loc.gov 

43USDA Farm Service Agency. 2010. www.apfo.usda.gov/FSA 

Programmatic Environmental Impact Statement for the Biomass Crop Assistance Program. 2010. http://public.geomarine.com/report.aspx?id=26 
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demand for traditional or new biogenic crops and reduced disposal costs for biogenic materials 

that would otherwise be landfilled or destroyed. 

3. Energy impacts 

With respect to energy impacts, the BACT analysis should assess the relative energy 

demands of the options under consideration for reducing emissions from the facility obtaining a 

permit and may include an evaluation of impacts on fuel scarcity or a locally desired fuel mix in 

a particular area. For bioenergy facilities, it is appropriate to broaden the scope of the energy 

impacts analysis to consider policies that seek to promote diversity in fuels used in a local area, 

within a state, or nationally. 

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. Renewable fuels policies, which 

in some cases provide incentives for the substitution of renewable fuels for fossil fuels, have not 

traditionally been part of the BACT energy impacts analysis. However, consideration of 

renewable energy policies could become part of the BACT analysis, especially if state policies 

mandate the replacement of fossil fuel with biogenic fuel.44 In addition to numerous federal 

programs, as of February 2011, 48 states have some kind of state-level financial or conservation 

incentive program that includes biomass production and almost as many states have rules, 

regulations or policies that promote bioenergy use.45 For example, certain states, such as 

California46, Washington,

47 and Massachusetts48 have policies and programs to incentivize forest 

                                                           

44 See p. B.30 of the 1990 NSR Guidance, discussing locally scarce fuels. 45 Database of State Incentives for Renewables & Efficiency. Accessed February 1, 2011. 

www.dsireusa.org/incentives/ 

46 2009 Progress to a Plan: Bioenergy Action Plan for California. California Energy Commission. 2009. 

www.energy.ca.gov/2010publications/CEC-500-2010-007/CEC-500-2010-007.PDF 

Integrated Energy Policy Report. California Energy Commission. 2007. www.energy.ca.gov/2007publications/CEC100-2007-008/CEC-100-2007-008-CMF.PDF 

Deleted: utilizing biogenic fuels

Deleted: ,
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management for biomass production. California, for example, as of 2009, has the technical 

potential for 14.2 million bone dry tons a year available from forest residues.49 After trees are 

harvested for timber, such forest residues are typically left in the forest or disposed of via open 

burning because only timber of a certain quality can be used in lumber mills and other processing 

facilities. An advantage of using forest residues for bioenergy production is that a collection 

infrastructure is already in place to harvest the wood, it reduces the incidence of open burning 

and provides an additional stream of revenue for forest owners. Programs and policies 

established to meet the multiple goals of forest management plans -- to establish healthy and 

naturally diverse forests with a balance between productive harvest and natural ecosystem and 

wildlife health – can act as a foundation for sustainable bioenergy production.50

Conversely, if the proposed biogenic feedstock is scarce in the localized area of the 

proposed project, then the scarcity of available fuel for the project might be an energy impact 

suggesting that the proposed feedstock should not be selected as BACT. 

C. Potential Conclusions in Step 4 Analysis 

The considerations described above can support a conclusion that the exclusive 

utilization of biomass fuel is BACT for greenhouse gases at a bioenergy facility. As discussed 

above and in earlier EPA guidance, the costs of applying add-on pollution controls for 

greenhouse gas emissions are expected to be expensive and thus would in most cases justify 

                                                                                                                                                                                               

Senate Bill (SB) 71. Economic Development: Sales And Use Tax Exclusions. Environmental Technology Project 

California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA). 

www.treasurer.ca.gov/caeatfa/sb71/index.asp 

47 Washington State Bioenergy Policy Framework. www.bioenergy.wa.gov/BiofuelIncentives.aspx 48 Massachusetts Green Power Purchasing Commitment, 2007, and Renewable Portfolio Standard. 2010. 

www.dsireusa.org/incentives/index.cfm?EE=0&RE=1&SPV=0&ST=0&implementingsector=S&state=MA&technol

ogy=Biomass&sh=1 

Act Related to Green Communities. Commonwealth of Massachusetts. 2008. 

www.malegislature.gov/Laws/SessionLaws/Acts/2008/Chapter169 

49 2009 Progress to a Plan: Bioenergy Action Plan for California. California Energy Commission. 2009. 

www.energy.ca.gov/2010publications/CEC-500-2010-007/CEC-500-2010-007.PDF 50 California Forest Practice Rules. The California Department of Forestry and Fire Protection. 2011. 

www.fire.ca.gov/resource_mgt/downloads/2011_FP_Rulebook_with_Diagrams_with_Tech_Rule_No_1.pdf. 
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elimination of this option based on direct economic impacts. However, EPA does not expect that 

the projected cost of energy efficient technology will by itself justify eliminating this option for 

biogenic CO2 emissions from consideration at bioenergy facilities. Nevertheless, where a 

bioenergy facility is projected to provide the energy and economic benefits described above in 

accordance with existing federal or state policies promoting utilization of biomass for energy 

production, these considerations may justify selecting the option of exclusively using a biomass 

fuel as BACT for biogenic CO2 emissions from a bioenergy facility. Furthermore, in the case of 

residue material that would otherwise decompose in a 10-15 year time frame, the net carbon 

cycle impact of this biomass fuel is expected to be negligible. Thus for a feedstock composed of 

such residue material, the costs of applying strategies to reduce emissions from the facility do not 

appear justified at this time because the carbon dioxide emissions from the individual facility 

would not be increasing atmospheric impacts above the business as usual case. As discussed 

above, additional information is needed before similar conclusions can be supported for other 

types of biomass feedstocks, but EPA believes the energy and economic benefits of this fuel is 

sufficient at this time to justify selecting biomass fuel as BACT for greenhouse gases without 

further control.51 

For facilities that are co-firing biomass with a primary fuel, the permitting record should 

provide a reasoned justification for basing BACT for greenhouse gases on a specific proportional 

                                                           

51 This guidance is applicable to an assessment of BACT for greenhouse gases. When conducting a BACT analysis 

for other regulated NSR pollutants at the type of source covered by this guidance, EPA recommends continuing to 

focus on guidance EPA has previously provided on determining BACT using the top-down process. The 

considerations described here, in terms of federal and state incentives for bioenergy production and sustainable 

forest management, may still be relevant considerations in Step 4 of a top-down BACT analysis for another 

regulated NSR pollutant, but these factors should be considered in the context of the particular pollutant for which 

the BACT analysis is conducted. These considerations may not apply in the same manner to pollutants other than 

GHGs, particularly where there is a more established record of the range of costs that have been acceptable in 

previous BACT determinations for the pollutant. 

Deleted: costs

Deleted: level 

Deleted: another
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allocation of fuels.52 The factors described above may be used to justify a higher proportional 

allocation of biomass fuels as BACT (to the extent technically feasible) but not necessarily to 

eliminate other strategies for reducing greenhouse gas emissions from a facility that utilizes 

some proportion of fossil fuels. The costs of add-on pollution controls will still, in most cases,

justify eliminating this technology from a facility that utilizes biomass and another primary fuel 

type. However, application of methods, systems, or techniques to increase energy efficiency 

will remain a key GHG-reducing opportunity for facilities that utilize a significant proportion of 

fossil fuels and cannot demonstrate the same degree of energy and economic benefits achieved 

from the exclusive utilization of the biomass fuels, as described above. While some utilization 

of biomass fuels will have some impact on reducing dependence on fossil fuels and promoting 

economic growth in areas that supply biomass fuels, a small proportion of biomass fuel use may 

not justify bypassing opportunities to reduce GHG emissions by improving energy efficiency at a 

facility that still combusts a significant proportion of fossil fuels. However, when assessing the 

proportional allocation for biomass and other fuel types at a co-fired energy facility, a permitting 

authority may consider the relative benefit of using a greater proportion of biomass fuels and the 

effect this may have on GHG emissions from an individual facility. Where a residue material is 

utilized, any loss of energy efficiency attributable to the use of this type of biomass feedstock 

may be offset by the absence of a significant net carbon cycle impact above the business as usual 

case. 

IX. Step 5 – Selecting BACT 

                                                           

52 See, In re: Northern Michigan University Ripley Heating Plant. PSD Appeal No. 08-02, Slip. Op at 18-23, 28 

(EAB 2009) (remanding a permit for a co-fired electric generating facility where record did not contain justification 

for establishing BACT limits based on specific proportional allocation of wood and coal). 

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When setting GHG emissions limitations for sources of biogenic CO2 emissions, one 

should conduct the same evaluation as that described in the 2010 GHG Permitting Guidance.53  

The permitting authority is responsible for defining the form of the BACT limits and making 

them enforceable as a practical matter.54 In determining the form of the limit, the permitting 

authority should consider issues such as averaging times and units of measurement. 

For example, in the case of co-fired facilities, a final permit may include a standard that 

specifies the proportional allocation of fuels to be used, thus limiting the options to the fuel mix 

justified as BACT. When making sure the limit is practically enforceable, the permitting 

authority must include information regarding the methods that will be used for determining 

compliance with the limits (such as operational parameters, timing, testing methods, etc.) and 

ensure that there is no ambiguity in the permit terms themselves.55 The permitting authority bears 

the responsibility in Step 5 to fully justify the BACT decision in the permit record. Regardless of 

the control level or feedstock proposed by the applicant as BACT, the ultimate determination of 

BACT is made by the permitting authority. 

 

                                                           

53 2010 GHG Permitting Guidance at 45-47.

54 See generally EPA Guidance on Limiting Potential to Emit (PTE) in New Source Permitting (June 13, 1989), 

available at http://www.epa.gov/reg3artd/permitting/t5_epa_guidance.htm. 55 In re Prairie State Generating Company, 13 E.A.D. at 83, 120. 

Deleted: ,

Deleted: ,

Deleted: In addition to a permit containing specific 

numerical emissions limits established in a¶

BACT analysis, a permit can also include conditions 

requiring the use of a work practice such as an 

Environmental Management System (EMS) focused 

on energy efficiency as part of that BACT analysis. 

The inclusion of such a requirement would be 

appropriate where it is technically impractical to 

measure emissions and/or energy use from all of the 

equipment and processes of the plant and apply an 

output-based standard to each of them. For example, 

a candidate might be a factory with many different 

pieces of equipment and processes that use energy. 

In addition to a BACT emissions limit on the boiler 

providing energy, the permit could also lay out a 

requirement to implement an EMS along with a 

requirement that all suggested actions that result in 

net savings have to be implemented. Consequently, 

the plant will operate in the most efficient manner 

through gradual achievable improvements. However, 

design, equipment, or work practice standards may 

not be used in lieu of a numerical emissions 

limitation(s) unless there is a demonstration in the 

record that the criteria for applying such a standard 

are satisfied.¶

Deleted: 53 “PSD and Title V Permitting Guidance 

for Greenhouse Gases.” Prepared by EPA staff. 

November 2010. See pages 45-47. Available at: 

http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-

0841-0001.pdf.
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Appendix: LULUCF data from the Inventory 

Table 1: Carbon sequestered by LULUCF sinks as reported in the Inventory (Tg CO2 Eq.)56, ranked in order of magnitude. Forest

Land Remaining Forest Land has been further broken up into forest and harvested wood carbon pools.

IPCC Source Category LULUCF Sink 2008 *1990–2008

Average

Forest Land Remaining Forest Land

(Carbon Stock Changes)

Total Forest Sector C Stock Change (791.9) (688.0)

Forest (703.9) (576.7)

Aboveground Biomass (397.2) (373.5)

Soil Organic Carbon (145.9) (68.0)

Belowground Biomass (78.8) (74.1)

Litter (55.9) (35.8)

Dead Wood   (26.2) (25.3)

Harvested Wood (88.0) (111.2)

SWDS (63.6) (63.7)

Products in Use (24.4) (47.6)

Settlements Remaining Settlements C Stock Changes in Urban Trees (93.9) (75.5)

Cropland Remaining Cropland Soil C Stock Changes for Mineral Soils (45.7) (51.5)

Land Converted to Grassland   Soil C Stock Changes for Mineral Soils (25.1) (24.0)

Grassland Remaining Grassland Soil C Stock Changes in Mineral Soils (12.4) (23.3)

Other   Changes in Yard Trimming and Food Scrap C

Stocks in Landfills (9.5) (13.6)

Gross Sequestration from LULUCF Sinks (978.5) (875.9)

* The U.S. Greenhouse Gas Inventories submitted to the UNFCCC provide annual estimates from 1990.

                                                            56 The Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 –2008 (April 2010) and the archive of previous inventories are

available online from the Environmental Protection Agency Inventory Report Web site, located at

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

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Table 2: Emissions from LULUCF sources as reported in the Inventory (Tg CO2 Eq.), ranked in order of magnitude.

IPCC Source Category LULUCF Source 2008 *1990–2008

Average

Cropland Remaining Cropland Soil C Stock Changes in Organic Soils 27.7 27.6

Forest Land Remaining Forest Land Non‐CO2 Emissions from Forest Fires 21.7 15.7

Land Converted to Cropland

Soil C Stock Changes for Mineral and Organic

Soils

5.9 2.8

Cropland Remaining Cropland Liming of Agricultural Soils 3.8 4.4

Cropland Remaining Cropland Urea Fertilization 3.8 3.1

Grassland Remaining Grassland Soil C Stock Changes in Organic Soils 3.7 3.7

Settlements Remaining Settlements Direct N2O Fluxes from Settlement Soils 1.6 1.2

Wetlands Remaining Wetlands

CO2 and N2O Emissions from Peatlands

Remaining Peatlands

0.9 1.0

Land Converted to Grassland Soil C Stock Changes in Organic Soils 0.9 0.8

Forest Land Remaining Forest Land Direct N2O Emissions from Forest Soils 0.4 0.3

Gross Emissions from LULUCF Sources 70.4 60.6

* The U.S. Greenhouse Gas Inventories submitted to the UNFCCC provide annual estimates from 1990.