UNITED STATES ENVIRONMENTAL PROTECTION AGENCY RESEARCHTRIANGLE PARK, NC 27711

OFFICE OF AIR QUALITY PUNNING AND STANDARDS
SUBJECT: 2002 Base Year Emission Inventory SIP Planning: 8-hr Ozone, PM,, and 

### - -.

FROM:
~:r Quality Strategies Peter Tsirigotis, Directo Emissions,Monitoring,

TO: Regional Air Division Directors

The EPA anticipatesthat nonattainment designations for the %hour ozone national ambient air quality standards(NAAQS) will occur in 2004, and the designations for the fine particles (PM,,) NAAQS will occur in the 2004-2005time he. Within 3-4 years after designations are promulgated, Stateswill need to submit new attainment demonstration State implementation plans (SIPs) for the new NAAQS. A key element in the overall SIP planning process is the need for updated statewide emission inventories. This memorandum identifies 2002 as the anticipatedemission inventory (EI) base year for the SIP planning process to address these pollutants. Identifyingthe base year at this time gives certainty to States, and the selection of 2002 harmonizes dates for other reporting requirements, e.g., EPA's Consolidated Emissions Reporting Rule (CERR)that requires submission of EI every three years; 2002 is one of the required years for such updates.

The Agency encourages States to take early action to reduce emissions of pollutantsthat
cause violations of the NAAQS for ozone (the 8-hour standard) and PM, 

# ,,and that cause regional haze. States will be able to take credit for emission reductions that occur after the 2002 base year, includingreductions that occur before the deadlines for submission of these SIPs. As
a matter ofpolicy, EPA seeksto avoid penalizing Statesfor moving forward early to address these problems. Attached is additional information.

The EPA is aware that some areas have already begun on a voluntary basis to model for purposes of the 8-hour ozone standard. These areas may continue to use modeling from previous base years for each set of meteorological episode conditions for use in their SIP submittals if these studies are still applicable for an attainment demonstration. The 2002 EI, however, needs

InternetAddress (URL) hnp://www.epa.gov Recysl.dlRecyelablm.Printed wllh Vegeteble OU BPsed Inkson Recycled Paper (Mlnbnum25% Postmnsumer)to be factored into this analysis. For example, the 2002 inventory would be a good choice for use in modeling "current" emissions. As described in the modeling guidance, predictions for the current emissions and predictions for the future year emissions are used in the modeled attainment test'. Furthermore, for reasonable furtherprogress (RFP) purposes, the 2002 EI needs to be used as the base year.

Please make this guidance available to the appropriate contacts in your State and local air agencies. Questions on this should be directedto (for ozone) Annie Nikbakht at 919-541-5246 or (for PM,,) kchDamberg at 919-541-5592.

cc: Lydia Wegman Peter Tsirigotis Rich Ossias Kevin McLean

'U.S. EPA, (1999), 

### "Guidanceonthe use of models and other analyses in attainment demonstrations for the &hour ozone NAAQS, " DRAFT, May 1999, Web site: 

### htto://www.eva.~ov/tnn/scram, under Guidance/Support,file name: 03TEST.Attachment Background

The EPA anticipatesthat designations for the $-hourozone NAAQS will occur in 2004, and the designations for the PM,, NAAQS will occur in the 2004-2005 time frame. The Clean Air Act (CAA) requires States to submit attainment demonstration 

### SIPSfor the $-hourozone standard within 

### 3 to 4 years (depending on classification),and within 

### 3 years for the PM,, standard. Therefore,EPA anticipates that SIPs will be due in 2007 or 2008' for both NAAQS programs. For regional haze, most States (i.e., those participating in regional planning organizations) will have SIPs due at the same time as PM,, SIPs. We anticipate that technical analyses in support of these SIPs, such as regional scale air quality modeling, will need to begin
no later than the 2004 time frame. Updated statewide emissions inventorieswill be an important component used in these analyses. In addition,for many of the required SIPs, emissions in upwind Stateswill also be an important input to necessary technical analyses.

For the 8-hour ozone, PM2

# ,,and regional haze program areas, there are statutory and regulatoryprovisions related to prospective andlor retrospective demonstrations of progress in reducing emissions and/or improving air quality, although the exact provisions differ somewhat across programs. We have considered the statutory and regulatory provisions applicable to each of these program areas, and have concluded that in each case 2002 is an appropriatebase year for program requirementsrelated to progress. In addition, there are practical reasons for choosing 2002, as explainedbelow.
Therefore, even though EPA has not developed 

### final rules or guidancefor implementation of either the $-hour ozoneNAAQS or the PM,, NAAQS, EPAbelieves that 2002 should be the base year inventory for these SIP planning efforts, including for regional haze SIPs. Using the 2002 inventory 

### as the base year will also ensure that the inventory reflects one of the years used for calculating the air quality design values on which designation decisions are based, as well as one ofthe years in the 2000-2004 period used to establish baseline visibility levels for the regional haze program. Our reasoning is explained in more detail below for each program area.
The year 2002 is also suitable as the principle or one of the principle years used for air quality model validation.

The practical reasons for choosing 2002 have to do with the requirements of the CERR (67 Federal Register 39602), which was finalized on June 10,2002, and with the schedule of EPA's own work on the National Emissions Inventory. The CERR requires Statesto submit

'The EPA is still working on the implementationguidance that will address the extent to which subparts 1 and 2 ofthe CAA apply for purposes of the $-hour ozoneNAAQS. Subpart 1 provides up to three years after nonattainment designationfor Statesto submit attainment and reasonable further progress (RFP) SIPs,while subpart 2 provides 

### 3 to 4 years, depending on an area's classification, for Statesto submitthose plans.emissions inventories for all criteria pollutants and their precursors every three years, on a schedule that includes the emissions year 2002. The due date for the 2002 emission inventoryis established in the CERR as June 2004. Therefore, each State should have information available
some time before this date to develop the in-state emissions inventory needed for technical analyses during 2004. In addition, EPA plans to make its initial version of the 2002 National Emission Inventory (NEI) available to the statesby December 2003, based on 2002 data on emissions from electric generating units, preliminary 2002 vehicle miles traveled information from the Federal Highway Administration, and growth and control projections startingwith the 1999NEI for other source types. This preliminary 2002 NEI can be used in 2004 by each State needing emission estimatesfor upwind States. The EPA's final 2002 NEI, which will merge and augment the state-by-state inventoriesreceived in 2004, will be ready by the summer of 2005. Depending on where they are in their work, Statesmay wish to switch to the newer estimates of upwind-states' emissions, and certainly should at least considerhow the emission estimates for upwind Stateshave changed. Alternatively, some regional groupings of Statesmay exchange and merge their 2002 inventories directly, prior to completionof EPA's final 2002 NEI. We will be consultingwith multi-state organizations about the 2002 inventory process so that work is not duplicated unnecessarily.

8-hour Ozone NAAOS

Under the 8-hour ozone standard,EPA anticipates that many areas designated nonattainment for the %hour ozoneNAAQS will need to comply with the rate ofprogress (ROP) requirement in Subpart2 ofthe CAA, which applies to areas classified moderate or above. Any area not subject to the subpart 2 ROP requirement would be subjectto the more general requirement under subpart 1to make RFP. Both ROP and RFP considerprogress made from a baseline inventory. As enacted in 1990, Subpart 2 provided that the base-year inventorywould be 1990. 

## See,CAA section 182(b)(l)(B). Thus, for 1-hour ozone nonattainment areas classified moderate or higher, ROP reductions for the target of 1996 were considered to be a 15percent reduction of volatile organic compound (VOC) emissions from the 1990 baseline year. Similarly, for each three-year period following 1996up to its attainment date, a serious or above nonattainment area was required to achieve 

### an additional 9 percent reduction in VOC 

### emission^.^ Under the 8-hour ozone standard, EPA anticipates that, consistentwith the above discussion, a 2002 base year emission inventory would be used as the baseline from which futuretarget levels of emissions would be calculated. Therefore, any emission reductionsthat the State initiates after 2002 would be creditabletoward the ROP or RFP requirements.

3 The CAA provides that nitrogen oxides (NO ) emissionreductions may be substituted for VOC emission reductions for these subsequent three-year periods under prescribed circumstances. 

### See CAA section 182(c)(2)(C).

### For areas subject to the subpart 2 ROP requirement, section l82(b)(l)@) places constraintson the use of emission reduction creditsfrom certainpre-1990 programs even though those programs might achieve additional reductions in 

### the years following 1990, i.e., the federal motor vehicle emission control program, Reid Vapor Pressure programs, corrections required to pre-existing reasonably available controltechnology 

### (RACT) rules, and inspection and maintenance (IIM) program corrections. While these limitationswould still apply for purposes of credit for SIPsdesigned to meet the 8-hourozoneNAAQS, EPA &es not believe it is legally required and does not plan to expand the list ofprograms forwhich c&dit is precluded. Subpart 1 does not establish any limits on the creditability ofmeasuresfor purposes ofRFP and EPA does not anticipate establishingany regulatory limits on the creditability of emission reductions. Thus, EPA does not anticipate establishingany additional const&nts on crediting emission reductions achieved in years following the 2002 base year. Therefore, apart from those programs listed in the CAA, we believethat States can take credit for other emission reductions that occur after the 2002 base year.

PM NAAOS -4. 

### The EPA anticipatesthat States will be required to implementthe PM,, NAAQS under Subpart 1 since the more specific provisionsin Subpart

### 4 that address particulate matter expressly apply only to PM,,. As provided above, Subpart 1 

### does not place limits on the types of controls that are creditablefor purposes ofthe RFP requirement. As with the 8-hour ozone NAAQS, EPA does not anticipate establishingany regulatory constraintslimitingcreditability of emission controls. Subpart 1generally calls for States to submit plans including emission reduction measures designed to attain the NAAQS within 3 

### years after a nonattainment designation. It also includes a reasonable furtherprogress (RFP) requirement, but does not have a specific percentreduction requirement as there is in the ROP requirementof Subpart2. The exact form ofthe RFP requirement for PM,, has yet to be established, but it is expectedthat any emission reductions that occur afterthe base year of 2002 would be credited toward the emission reductions needed by the State under its attainment demonstration and toward the reductions needed to meet the RFP requirement.

Reeional Haze Promam

The regional haze program calls for States participatinginregional planning organizationsto submit SIPsin 2007-8 that containprogress goals forevervclass I area 

### and - 

# - - - 

# - emission reductions strategiesneeded to meet these goals. Progressin improving visibility is tracked from baseline conditions (establishedusing 

### air 

### sualitvmonitorinrr for the 2000-2004

v 

### period). If 2002 is used as the base year for planning p&osds, then States can take credit for emission reductions that are achieved before the 2007-2008 SIP due date.Credits in General

It should be noted that EPA cannot provide "double credit"' for 

### ah emission reduction for purposes of RFP or ROP. For instance, if a program or rule results in emission reductions prior to or in the base year, those reductions would be considered in calculati,ngthe base year emissions inventory and thus could not becounted as emissionreductions from the base-year level. Such reductions would likely lower ambient pollutant concentrations, however, and would be important in terms of determining an area's designation and, if designated nonattainrnent, could affect the area's classification and thus itsplanning obligations. For example, emission reductions in NOx or VOC achieved prior to or during 2002 could have already resulted in the
areahaving a lower ozone design value, which is the measure of whether the area is violating the 8-hour ozone standard and, if so, by how much. Reductions fiom such measures in years beyond the base year would be creditabletowards ROP SIPS. These concepts of credit were discussedin the January 29,2001, memorandum from John Seitz entitled "Near-Term Discretionary Emission Reductions for OzoneNAAQS-Clarification," which addressed the 1 -hour ozone standard,but which are also conceptually applicable to implementation of the 8-hour ozone standard. However, post-2002 emission reductions that benefit ozone, PM2.5 and regional haze can be credited toward the RFP requirements for each ofthese programs.