IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

___________________________________ ) AMERICAN FOREST & PAPER ) ASSOCIATION, Inc., and ) AMERICAN WOOD COUNCIL, ) ) Petitioners, ) ) v. ) No. 12-1452 ) U.S. ENVIRONMENTAL PROTECTION ) AGENCY, ) ) Respondent. ) ___________________________________ ) SETTLEMENT AGREEMENT WHEREAS the American Forest & Paper Association, Inc., and the American Wood Council (referred to as “Petiti oners”) filed in the Court of Appeals for the D.C. Circuit a petition for review captioned above that challenges the regulation by the Environmental Protec tion Agency (“EPA”) titled “Mandatory Reporting of Greenhouse Gases; Final Ru le,” 74 Fed. Reg. 56,260 (Oct. 30, 2009) (“GHG Reporting Rule”), pursuant to 42 U.S .C. § 7607(b)(1) of the Clean Air Act, alleging new grounds have arisen on which to seek judicial review of that EPA final action; WHEREAS Petitioners have submitted toEPA new substantive information, and based upon its preliminary review EP A believes that information warrantedproposing for public comment certain modifications to the GHG Reporting Rule, as set forth in this Settlement Agreement; WHEREAS the EPA and the Petitioners (c ollectively the “Parties”) wish to implement this Settlement Agreement (“ Agreement”) to avoid protracted and costly litigation and to preserve judicial resources; WHEREAS, EPA has published a notice of proposed rulemaking on the issue of whether the GHG Reporting Rule should be amended by the inclusion of proposed amendments of the same substan ce as set forth in Attachment A to this Agreement. NOW, THEREFORE, the Parties, intending to be bound by this Agreement, hereby stipulate and agree as follows: 1. If and when EPA promulgates in final form an amendment to the GHG Reporting Rule that includes change s that are substantially the same substance as set forth in AttachmentA, Table C-2 and Table AA-1, to this Agreement, then Petitioners shall promptly file a stipulation of dismissal of No. 12- 1452, or in the event not all such changes of substantially the same substance are made, a stipulation of dismissal of No. 12-1452 for the issues that correspond to such changes that were made, with the creation of a new docket for those issues that were not resolved. Such stipulati on of dismissal shall be in accordance with Rule 42 of the Federal Rules of AppellateProcedure, with each party to bear its1/ This reference includes the Letter from Paul Noe, American Forest & Paper Association, and Robert Glowinski, American Wood Council, to Lisa Jackson, U.S. EPA. Petition for Reconsideration of 40 C.F.R. Part 98 Subparts C and AA; Petition for Rulemaking To Revise 40 C.F.R. Part 98 Subparts C and AA, and the Request for Correction Under Information Quality Act, dated November 16, 2012. own costs and attorneys’ fees. In add ition, Petitioners shall not challenge the validity of the portion of the final rule adopting such amendments of substantially the same substance as set forth in Attach ment A, Table C-2 and Table AA-1, in any court or administrative proceeding, and the right to raise such challenge is waived, provided that Petitioners reserves any right s they may have to challenge in any court or administrative proceeding any portion of such final rule that is not of substantially the same substance as set fo rth in Attachment A ,Table C-2 and Table AA-1, to this Agreement. 2. If and when EPA promulgates in final form an amendment to the GHG Reporting Rule that includes change s that are substantially the same substance as the proposed amendments attached as Attachment A to this Agreement, all pending administrative pe titions by Petitioners for reconsideration and/or requests for correction of the GHG Reporting Rule 1/ , or the issues raised in such administrative petitions and/or reque sts that correspond to such changes of substantially the same substance in the ev ent not all such changes are made, shall be deemed withdrawn.3. If EPA does not take action in accord ance with the terms of paragraph 1 of this Agreement then Petitioners’ sole remedy under this Agreement regarding the rules under review in this case shall be the right to request that the Court lift the stay of proceedings and establish a sche dule for briefing and oral argument. If EPA does not take action in accordance w ith the terms of paragraph 2 of this Agreement then Petitioners’ sole remedy under this Agreement shall be to pursue their pending administrative petitions for reconsideration and/or requests for correction of the GHG Reporting Rule. 4. EPA and Petitioner agree and acknowle dge that before this Agreement is final, EPA must provide notice in the Federal Register and an opportunity for comment pursuant to Clean Air Act section 113(g), 42 U.S.C. § 7413(g). EPA shall submit said notice of this Agreemen t to the Federal Register for publication as expeditiously as possible. After this Agreement has undergone an opportunity for notice and comment, the Administrato r and/or the Attorney General, as appropriate, shall promptly consider any such written comments in determining whether to withdraw or withhold her cons ent to the Agreemen t, in accordance with section 113(g) of the Clean Air Act. Th is Agreement shall become final on the date that EPA provides written notice of such finality to Petitioner. 5. The Parties acknowledge that if EP A elects to finalize this Agreement, during the notice and comment rulemaki ng proceedings EPA will consider theproposal, and that EPA’s final action on that proposal will be based upon its consideration of the administrative r ecord before the Agency, including public comments. Nothing in the terms of this Agreement shall be construed to limit or modify the discretion accorded EPA by the Clean Air Act or by general principles of administrative law. Nothing in the term s of this Agreement shall be construed to limit EPA’s authority to alter, amend, or revise any final rule, interpretation or guidance EPA issues in accordance with this Agreement. Nothing in the terms of this Agreement shall be construed to limit or modify the rights Petitioners may have to request that EPA modify any final rule EPA promulgates in accordance with this Agreement. 6. Any obligations of EPA to obligate or expend funds under this Agreement are subject to th e availability of appropriations in accordance with the Anti-Deficiency Act, 31 U.S.C. § 1341. This Settlement Agreement shall not be construed to require the United States to obligate or pay funds in contravention of said Anti-Deficiency Act, 31 U.S.C. § 1341. 7. The undersigned representatives of each party certify that they are fully authorized by the party that they repr esent to bind that respective party to the terms of this Agreement.

## ATTACHMENT APage 1 of 2
**Subpart C—[AMENDED] Table C–2 to Subpart C—Default CH**  **4 and N**  **2 O Emission Factors for**  **Various Types of Fuel**

**Fuel type Default CH**  **4 emission factor** 

**(kg CH 4**  **/mmBtu) Default N**  **2 O**  **emission factor**

**(kg N 2**  **O/mmBtu)** * * * * * * * Biomass Fuels—Solid (All fuel types in Table C–1, except wood and wood residuals) 3.2 × 10 − 02 4.2 × 10 − 03

Wood and wood residuals 7.2 x 10 -3 3.6 x 10 -3 * * * * * **Subpart AA—[AMENDED] Table AA–1 to Subpart AA of Part 98—Kraft Pulping Liquor**  **Emissions Factors for Biomass-Based CO 2**  **, CH 4**  **, and N 2**  **O**

**Wood furnish Biomass-**  **b ased emissions factors**  **(kg/mmBtu HHV)**
CO 2 **a** CH 4 **N 2**  **O** North American Softwood 94.4 0.0019 0.00042 North American Hardwood 93.7 0.0019 0.00042 Bagasse 95.5 0.0019 0.00042 Bamboo 93.7 0.0019 0.00042 Straw 95.1 0.0019 0.00042

a Includes emissions from both the recovery furnace and pulp mill lime kiln. **Table AA–2 to Subpart AA of Part 98—Kraft Lime Kiln and Calciner Emissions Factors for CH**  **4 and N**  **2 O** 

**Fuel Fossil fuel-**  **b ased emissions factors (kg/mmBtu HHV)**  **Kraft lime kilns Kraft calciners CH**  **4 N**  **2 O CH**  **4 N**  **2 O**  Residual Oil (any type) 0.0027 0 0.0027 0.0003Page 2 of 2

Distillate Oil (any type) 0.0027 0 0.0027 0.0004

Natural Gas 0.0027 0 0.0027 0.0001 Biogas 0.0027 0 0.0027 0.0001 Petroleum coke 0.0027 0 NA a NA a Other Fuels See Table C-2 0 See Table C-2 See Table C-2

a Emission factors for kraft calciners are not available.