E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review 

United States                                                   Office of Air and Radiation                                         February 2011

Environmental Protection

Agency

_____________________________________________________________________________________________

GUIDANCE FOR DETERMINING BEST AVAILABLE 

CONTROL TECHNOLOGY FOR REDUCING 

CARBON DIOXIDE EMISSIONS FROM BIOENERGY 

PRODUCTION
E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review 

Guidance for Determining Best Available Control 

Technology for Reducing Carbon Dioxide Emissions from 

Bioenergy Production 

Prepared by the

Climate Change Division

Office of Atmospheric Programs

U.S. Environmental Protection Agency

Washington, DC

February 2011
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 
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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 alone. 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 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, 2010. The 

                                                           

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, such as wood 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). 
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November 10, 2010 guidance includes technical white papers7 for several industry sectors and 

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

GHG Permitting Guidance”),

8

 which includes a section on determining BACT for GHG. 

As with any other stationary source, 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.9 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 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 

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

                                                           

7

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

8

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

 75 Fed. Reg. at 31606-07; 40 CFR 52.21(b)(49); 40 CFR 52.166(b)(48). 
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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 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 (i.e., forest or agricultural products) for energy. The term ‘CO2

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

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

annual GHG emissions including emissions of CO2, methane (CH4), nitrous oxide (N2O), 

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

report estimates 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, 

                                                           

10 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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Agriculture, Land-Use Change and Forestry (LUCF), and Waste. The Energy Sector includes 

all GHGs emitted during the production, transformation, handling and consumption of energy 

commodities, including fuel combustion. The LUCF 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 (i.e., 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.

11 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 2020.12

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 

                                                           

11 See Tables 1 and 2 in Appendix. 

12 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.13 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 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.14 As noted above, the Inventory 

                                                           

13 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. 14 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 and fossil sources of CO2 emissions differently.15 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 PSD and Title V Permitting Guidance for Greenhouse Gases on November 

10, 2010, which provides the basic information that permit writers and applicants need to address 

                                                           

15 See 75 FR 31514. 
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GHG emissions in permits.16 To assist permitting authorities carrying out BACT analyses for 

GHGs until EPA took further 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 PSD and Title V Permitting Guidance for 

Greenhouse Gases (“2010 GHG Permitting Guidance”) which supplements supplements prior 

EPA guidance on determining BACT, including EPA’s 1990 Draft New Source Review 

Workshop Manual (“1990 Workshop Manual”).17 In the 2010 GHG Permitting Guidance, EPA 

                                                           

16 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 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; 

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

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

(“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.18 EPA recommends conducting this analysis 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. 

                                                           

18 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.19 

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.20 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 

recommends that permitting authorities apply the analytical framework recently articulated by 

the Environmental Appeals Board.21 Under this framework, a permitting 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. The underlying record will be an 

essential component of a supportable BACT determination that a proposed control technology 

                                                           

19 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. 

20 In re Prairie State Generating Company, 13 E.A.D. 1, 23 (EAB 2006). 21 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). 
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redefines the source.22 The “redefining the source” issue is ultimately a question of degree that is 

within the discretion of the permitting authority. 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.23 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.24 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.25 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 (i.e., 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 

                                                           

22 In re Desert Rock Energy Company, PSD Appeal No. 08-03 et al. (EAB Sept. 24, 2009), slip op. at 65, 76. 23 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 

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). 

24 In re Desert Rock Energy Company, slip op. at 70-71, 76-77; In the Matter of Cash Creek Generation, Order at 7- 

10. 

25 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. 
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As EPA discussed in the November 2010 guidance, for the purposes of a BACT analysis 

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

technology26 that is “available”27 for large CO2-emitting facilities including fossil fuel-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 

                                                           

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

equipment that have the 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 

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

top-down BACT analysis. 

27 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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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 

non-GHG 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, 

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 

biologically-derived 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 demonstration 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 a 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 EPA’s November 2010 guidance. 

In cases where a permit applicant proposes to co-fire biomass fuels with another primary 

fuel type, the list of options should include the option of utilizing both types of primary fuels in 
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combination. 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 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. 

 
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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. Details on Step 2 are available 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. 

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. Details on 

Step 3 are available 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 
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18 

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 

technology outweigh the economic or energy costs of that selection.28 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.29 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,”30 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 

                                                           

28 In the Matter of North County Resource Recovery Assoc., 2 E.A.D. at 230-31. 

29 In re Knauf Fiber Glass, 8 E.A.D. at 131 n. 15. 30 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). 
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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.31 In discussing the particulars of a BACT analysis for 

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

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.32 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.33

3. Energy impacts 

                                                           

31 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. 32 1990 Workshop Manual, Section IV.D.2.b (B.36 – B.44). 33 1990 Workshop Manual at B.31-32. 
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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.34 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 

authorities should examine whether the energy requirements for each control option result in any 

significant or unusual energy penalties or benefits.35 The costs associated with direct energy 

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

analysis).36

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.37 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. 

                                                           

34 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). 

35 1990 Workshop Manual at B.29. 

36 1990 Workshop Manual at B.30. 

37 In re Knauf Fiber Glass, 8 E.A.D. at 131 n. 15. 
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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 

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 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 this new 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 
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22 

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 

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 favorable conditions for plant growth cause sequestration to 

increase beyond what is incorporated into the BAU case for that region, then net atmospheric 

carbon stocks will decrease beyond 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 the net atmospheric carbon stocks will increase over the 

BAU case. In the context of bioenergy and biogenic 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 
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23 

other biogenic 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 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 

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. 
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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., less than 10-15 years) in the absence of utilization as bioenergy, this conclusion 

appears credible. 

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 scientific input from an 

independent panel before it can make more qualitative characterizations beyond the one 

described above for residue material. 
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25 

2. Economic impacts 

As discussed earlier 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, especially the costs associated with CO2 capture and compression. As with other 

electric generating facilities, these direct costs will generally make the price of 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 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 impacts 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 select 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 
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26 

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 

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.38,39 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 

                                                           

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

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

39 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 
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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.40 Other potential indirect economic 

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

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 facilities utilizing biogenic fuels, 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.41 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, 

                                                           

40USDA 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 

41 See p. B.30 of the 1990 NSR Guidance, discussing locally scarce fuels. 
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28 

regulations or policies that promote bioenergy use.42 For example, certain states, such as 

California43, Washington44 and Massachusetts45, have policies and programs to incentivize forest 

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.46 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.47

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. 

                                                           

42 Database of State Incentives for Renewables & Efficiency. Accessed February 1, 2011. 

www.dsireusa.org/incentives/ 

43 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 

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 

44 Washington State Bioenergy Policy Framework. www.bioenergy.wa.gov/BiofuelIncentives.aspx 

45 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 

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 

47 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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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 

elimination of this option based on direct economic impacts. However, EPA does not expect that 

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

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 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 level 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.48 

                                                           

48 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 
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30 

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

should provide a reasoned justification for basing BACT for greenhouse gases a specific 

proportional allocation of fuels.49 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 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 cofired energy facility, a permitting authority may consider the relative energy efficiency 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. 

                                                                                                                                                                                               

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. 

49 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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31 

IX. Step 5 – Selecting BACT 

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.50  

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

them enforceable as a practical matter.51 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.52 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. 

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 

                                                           

50 “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. 51 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. 52 In re Prairie State Generating Company, 13 E.A.D. at 83, 120. 
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32 

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. 

 
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Appendix: LUCF data from the Inventory 

Table 1: Carbon sequestered by LULUCF sinks as reported in the Inventory (Tg CO2 Eq.)53, 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.

                                                            53 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. 
E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review 

34 

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.