# T E C H N I C A L 

# S U P P O R T 

# D O C U M E N T

Department of the Environment 

## Adoption of EPA's Prevention of Significant Deterioration & Title V Greenhouse Gas Tailoring Rule Amendments to COMAR 26.11.01.01, COMAR 26.11.02.01 &.12 and COMAR 26.11.06.14

Statement of Purpose

The purpose of this action is to implement th e requirements of the U. S. Environmental Protection Agency’s (“EPA”) final Preventi on of Significant Deteri oration and Title V Greenhouse Gas Tailoring Rule ("Ta iloring Rule"), which was publis hed in the Federal Register on June 3, 2010 (75 FR 31514).

The Tailoring Rule limits the applicability of the existing Prevention of Significant Deterioration (“PSD”) and Title V operating permit requirements of the federal Clean Air Act (“CAA”) as of January 2, 2011 so that it does not apply to all stationary sources that emit or have the potential to emit greenhouse gases (“GHGs”) at the 100 or 250 tons per year (“tpy”) levels provided under the CAA. (January 2, 2011 is the date when EPA’s recently promulga ted Light-Duty Vehicle Rule takes effect, imposing control re quirements for the first time on GHGs.)

Excluding applicability of the PSD and Title V operating permit requirements to the 100 and 250 tpy thresholds will exclude very small sources, such as apartment buildings, office buildings, and restaurants. The Tailoring Rule phases in the ap plicability thresholds for both the PSD and Title V operating permit programs for sources of GHG emi ssions, by establishing th e first two steps of the phase-in for the largest emitters of GHGs. This is the first phase of regulating greenhouse gas emissions and supports Maryland law requiri ng a reduction in greenhouse gas emissions.

Requirements of EPA’s Tailoring Rule

EPA will phase in the CAA permitting require ments for GHGs in two initial steps.

Step 1. January 2, 2011 — June 30, 2011 (first 6 months) • Only those sources cu emissions of non-GHG pollutants (i.e ., those that are newly-constr ucted or modified in a w that significantly increases em issions of a pollutant other th an GHGs) would be subject to permitting requirements for their GHG emissions under PSD.

• would need to determine the Best Availabl e Control Technology (BACT) for their GHG emissions. rrently subject to the PSD permitting program anyway due to their
ay

For these projects, only GHG increases of 75,000 tpy or more of total GHG, on a CO2e basis,

1• Si program anyway due to their emissions of non-GHG pollutants (i.e., newly constructed or existing major sources for a pollutant other th an GHGs) would be subject to Title V operati permit requirements for GHG.

• During Step 1, no sour solely to GHG emissions. milarly for the Title V operating permit program , only those sources currently subject to the

ng

ces would be subject to Clean Air Act permitting requirements due

tep 2 July 1, 2011 — June 30, 2013 ( 2-year period) S over new construction projects that emit

HG emissions of at least 100,000 tpy even if th ey do not exceed the permitting thresholds for

ng permit requi rements will apply to sources based on their HG emissions even if they would not apply based on emissions of any other pollutant.

.

me due to their GHG emissions. The majority of these newly permitted sources will likely be • For the first time, PSD permitting requirements will c G any other pollutant. Modifications at existing facilities that in crease GHG emissions by at least 75,000 tpy will be subject to permitting requirements, even if they do not significantly increase emissions of any other pollutant.

• For the first time, Title V operati G Facilities that emit at least 100,000 tpy CO2e will be subject to Title V permitting requirements

EPA estimates that about 550 sources nationwide w ill need to obtain Title V permits for the first ti solid waste landfills and industrial manufacturers. It is expected that nationally, there will be approximately 900 additional PSD permitting actions each year triggered by increases in GHG emissions from new and modified emission sources.

Future Steps

The Tailoring

a

• In 2011, EPA will propo R more sources, beginning by July 1, 2013, and ma y propose or solicit comme nt on wheth smaller sources should be permanently excluded from permitting.

• EPA also will explore viable streamlining options for future GHG

re

• By April 30, 2015, EPA wi
p may decide that: (1) successful streamlining will allow EPA to phase in more sources, or ( certain smaller sources need to be permanently excluded from permitting. EPA will complete further rulemaking based on that study by Apr il 30, 2016, to address the permitting of smaller

sources.

• No sourc Rule also commits EPA to certain follow-up actions regarding future steps to

ddress smaller sources:

se or solicit comment on a Supplemental Notice of Proposed ulemaking (SNPR) in which EPA will propose a third step for phasing in GHG permitting for er certain

permitting to significantly duce permitting burdens.

ll complete a study to evaluate the status of PSD and Title V ermitting for GHG sources, including progress in developing streamlining techniques. EPA 2)

es with greenhouse gas emissions below 50,000 tpy, and no modification of a source

12/20/2010 2:56 PM 2re permitting before at least April 30, 2016.

Regulated Pollutants

EPA's Tailoring Rule ad 1 2. Methane (CH4) 3. Nitrous oxide (N2O) 4. Hydrofluorocarb 5. Perfluorocarbons (PFC 6. Sulfur hexafluoride (SF6)

Some of these GHGs have a h d (“CO2e”). CO2e is calculated by multiplying the mass emissions fo r each of the six GHGs t source emits by that GHG’s global warming potential (published in Table A-1 to Subpart A of 40 CFR Part 98, “Global Warming Potentials,” 74 FR 56395), and then summing the results of those calculations. Under the Ta iloring Rule, EPA is using CO2e as the metric for determining whether a source triggers PSD and Title V permitting applicability for GHGs.

Explanation of Specific Amendments

The following regulations under COMA R

1. COMAR 26.11.01 • CO2 equivalent em • Greenhouse gases (GHG), meaning the aggregate grou

2. COMAR 26.11.01.01B (37) and COMAR 26.11.06.14 - The PSD program requ b

3. COMAR 26.11.02.01B(44) - expanded the definition of "R
g EPA's final PSD and Title V Tailoring Rule.

4. COMAR 26.11.02.01C(1) - the definition o

so

5. COMAR 26.11.02.12 - provides that th e procedures for obtaining a permit to construct appl
to

B sulting in net GHG increases of less than 50,000 tpy will be subject to PSD or Title V

dresses the emissions of a group of six GHGs: . Carbon dioxide (CO2)

ons (HFCs) s)

igher global warm ing potential than others. To address these ifferences, the international sta ndard practice is to express GHGs in carbon dioxide equivalents hat a

R 26.11 have been amended to implement the Tailoring ule requirements:

.01B - definitions were added for: issions (CO2e) whic h includes the calculation procedure p of 6 greenhouse gases.

irements have een updated to include EPA's Tailoring Rule requirements.

egulated air pollutant" by adding reenhouse gas as defined under COMAR 26.11.01.01B( 18-1) and subject to regulation under

f "Major source" has been amended to include urces of GHG subject to regulation under 40 CFR 70.2, as amended by the Tailoring Rule.

y GHG sources to which 40 CFR 52.21(b)(49(iv) or (v) apply.

ackground

12/20/2010 2:56 PM 3On April 2, 20
p

The Supreme Court found that EPA was required to determine whether or not G anticipated to endanger public heal th or welfare, or whether th e science was too uncertain to make a reasoned decision. In April 2009, EPA responded to the Court with a finding that greenhouse gases contribute to air pollution that may endanger public health or welfare. On December 15, 2009, EPA published findings under Secti on 202(a) of the Clean Air Act th a prerequisite to finalizing the GHG standards for light-duty vehicles.

On April 1, 2010, EPA finalized the light duty ve hicle rule controlling

ru meeting these rule requirements may be sold in the U.S. This action triggered Clean Air Act permitting requirements under the PSD and Title V programs for GHG emissions. The Rule represents the first time GHGs will be subject to either of these Clean Air Act permitting
programs.

Sources Aff

Facilities responsib

so nation’s largest GHG emitters — po wer plants, refineries, and cement production facilities.

The sources that are not covered by this rule at this time include: small farms, restaurants, and b

Emissions Reductions Expect ed from th

The purpose of this action is to implement the require T gas emissions will be reduced through implem entation of the PSD program and through othe State and federal regulatory actions.

Submission to EPA for Approval 07, the Supreme Court found th at GHGs, including car bon dioxide, are air ollutants covered by the CAA. Massac husetts v. EPA, 549 U.S. 497 (2007).

emissions of HGs from new motor vehicles cau se or contribute to air poll ution which may reasonably be

at were

GHG emissions. This le confirmed that January 2, 2011 is the earl iest date that a 2012 model year vehicle

Tailoring

ected

le for nearly 70 percent of the nati onal GHG emissions from stationary urces will be subject to permitting requirements under the Tailoring Rule. This includes the

all ut the very largest commercial facilities.

is Action

ments of EPA's final PSD and Title V ailoring Rule which establish a phased in approach to reducing GHG emissions. Greenhouse

r

ill be submitted to EPA for approval as part of Maryland's tate Implementation Plan and Ti tle V Program. The Department will request approval of the

omparison to Federal Standards The appropriate parts of this action w S regulations in their entirety.

C

12/20/2010 2:56 PM 4There is a corresponding federal stand ard to this proposed acti on, but the proposed action is not more restrictive or stringent.

ant Deteriora tion and Title V Greenhouse Gas Tailoring Rule"

ublished in the Federal Register on June 3, 2010 (75: FR 31514) affecting 40 CFR Parts 51, 52,

se of this action is to implement th e requirements of the U. S. Environmental rotection Agency’s (“EPA”) final Preventi on of Significant Deteri oration and Title V egister

e Tailoring Rule will have a limited economic impact on ffected sources. If an existing source is currently addressing another pollutant for PSD or in a

begins on July 1, 2011, imposes Title V nd PSD permitting requirements on larger source s of GHG emissions even if they would not

existing staff. Staff requirements will be evaluated for Step 2 and future st eps as they are finalized by EPA.

g. landfills) that would be ewly subject to permitting requirements due to GHG emissions. Many local governments are EPA's "Prevention of Signific
p 70, et al.

The purpo P Greenhouse Gas Tailoring Rule ("Ta iloring Rule"), which was publis hed in the Federal R on June 3, 2010 (75 FR 31514).

Estimate of Economic Impact

Step 1 (1/2/2011 - 6/30/11) of th

a Title V permit, then GHG requirements will also apply.

Step 2 (7/1/11 - 6/30/2013) of the Tailoring Rule, which

a apply based on emissions of any other pollutants.

The Department will handle Step 1 of the rule with

re

Local governments may be impacted if they have facilities (example e

n already subject to permitting requirements as a result of non-GHG emissions.

Economic Impact on Small Businesses

The EPA considered the impact of the G HG Tailo ring Rule on small businesses as required by

e Regulatory Flexibility Act (RFA) and the Small Business Regulatory Enforcement Fairness

verview of PSD Program th Act (SBREFA). Since this rule does not impose re gulatory requirements but rather lessens the regulatory burden of the CAA requirements on smaller sources of GHG, no economic costs are imposed upon small sources of GHG as a result of the rule. The rule provides regulatory relief for small sources. These avoided costs or benefits accrue because small sources of GHG are not required to obtain a title V permit and new or modifying small sources of GHG are not required to meet PSD requirements. Some of the small sources benefiting from this action are small entities, and these enti ties will benefit from the regulatory relief of the rule (75 FR 31599).

O

12/20/2010 2:56 PM 5The PSD program is a precon struction review and permitting program applicable to new major ationary sources and major modifications at existing major stati onary sources. The PSD

I of

1.165,

y of

ability of PSD to a particular source mu st be determined in advance of construction or odification and is pollutant-specific. The primar y criterion in determining PSD applicability for

`major

y Source st program applies in areas that are designated `` attainment'' or ``unclassifiable'' for a National Ambient Air Quality Standard (NAAQS). The PSD pr ogram is contained in part C of title the CAA. The ``nonattainment new source review (NSR)'' program applies in areas not in attainment of a NAAQS or in the Ozone Tr ansport Region and is implemented under the requirements of part D of title I of the CAA. Collectively, we commonly refer to these two programs as the major NSR program. The governing EPA rules are contained in 40 CFR 5 51.166, 52.21, 52.24, and part 51, Appendices S and W. There is no NAAQS for CO2 or an the other well-mixed GHGs, nor has EPA proposed any such NAAQS; therefore, unless and until we take further such action, we do not anticipate that the nonattainment NSR program will apply to GHGs.

The applic

m a proposed source is whether the source is a ``m ajor emitting facility,'' based on its predicted potential emissions of regulated pollutants, within the meaning of CAA section 169(1) and either constructs or undertakes a modification. EPA has implemented these requirements in its regulations, which use somewhat different terminology for determ ining PSD applicability, which is whether the source is a ``major stationary source'' or whether the proposed project is a ` modification.''

Major Stationar

ionary source'' is any source belonging to a specified list of 28 source

ategories which emits or has the potential to em it 100 tpy or more of a ny pollutant subject to

s

tions Under PSD, a ``major stat

c regulation under the CAA, or any other source type which emits or has the potential to emit such pollutants in amounts equal to or greater than 250 tpy. We refer to these levels as the 100/250- tpy thresholds. A new source with a potential to emit (PTE) at or above the applicable ``major stationary source threshold'' is subject to major source NSR. These limits originate from section 169 of the CAA, which applies PSD to any ``maj or emitting facility'' and defines the term to include any source that emits or has a PTE of 100 or 250 tpy, de pending on the source category. Note that the major source definition incorporat es the phrase ``subject to regulation,'' which, a described later, will begin to include GHGs on January 2, 2011, unde r our interpretation of that phrase discussed in the recent Inte rpretive Memo notice. 75 FR 17004, April 2, 2010.

Major Modifica

isting sources that undert ake a ``major modification,'' which occurs: (1) hen there is a physical change in, or change in the method of operation of, a ``major stationary PSD also applies to ex W source;'' (2) the change results in a ``significan t'' emission increase of a pollutant subject to regulation (equal to or above th e significance level that EPA has set for the pollutant in 40 CFR 52.21(b)(23)); and (3) there is a ``significant net emissions increase'' of a pollutant

12/20/2010 2:56 PM 6subject to regulation that is equal to or above the significance level (defined in 40 CFR 52.21(b)(23)). Significance levels, which EPA has pr omulgated for criteria pollutants and certain other pollutants, represent a de minimis cont ribution to air quality problems. When EPA has not set a significance level fo r a regulated NSR pollutant, PSD a pplies to an increase of the pollutant in any amount (that is, in effect, the significance level is treated as zero).

General Requirements for PSD

This section provides a very brief summary of the main requirements of the PSD program. One principal requirement is that a new major sour ce or major modification must apply BACT, which is determined on a case-by-case basis taking into account, among other factors, the cost effectiveness of the control a nd energy and environmental impacts. EPA has developed a ``topdown'' approach for BACT review, which involves a decision process that includes identification of all available control technologies, elimination of technica lly infeasible options, ranking of remaining options by control and cost effectiveness, and then selection of BACT. Under PSD, once a source is determined to be major for any regulated NSR pollutant, a BACT review is performed for each attainment pollutant that ex ceeds its PSD significance level as part of new construction or for modification pr ojects at the source, where there is a significant increase and a significant net emissions increase of such po llutant. (EPA noted thatthe PSD program has historically operated in this fashion for all pollutants--when new sour ces or modifications are ``major,'' PSD applies to all pollutants that are emitted in significant quantities from the source or project. This rule does no t alter that for sources or modifi cations that are major due to their GHG emissions.)

In addition to performing BACT, the source must analyze impacts on ambient air quality to assure that no violation of any NAAQS or PSD increments will result, and must analyze impacts on soil, vegetation, and visibility. In addition, sour ces or modifications that would impact Class I areas (e.g., national parks) may be subject to additi onal requirements to prot ect air quality related values (AQRVs) that have been identified for such areas. Under PSD, if a source's proposed project may impact a Class I area, the Federal La nd Manager is notified and is responsible for evaluating a source's projected impact on the AQRVs and recommending either approval or disapproval of the source's perm it application based on anticipate d impacts. There are currently no NAAQS or PSD increments established fo r GHGs, and therefore these PSD requirements would not apply for GHGs, even when PSD is tr iggered for GHGs. However, if PSD is triggered for a GHG emissions source, all regulated NSR pollutants which the new source emits in significant amounts would be subject to PSD require ments. Therefore, if a facility triggers review for regulated NSR pollutants that are non-GHG pollutants for which there are established NAAQS or increments, the air quality, additional impacts, and Class I requirements would apply to those pollutants.

Overview of Title V Operating Permits Program

The operating permit requirements under title V are intended to improve sources' compliance with other CAA requirements. The title V program is implemented through regulations promulgated by EPA, 40 CFR part 70, for program s implemented by state and local agencies and tribes, and 40 CFR part 71, for programs generally implemented by EPA.

12/20/2010 2:56 PM 712/20/2010 2:56 PM 8 In summary, the title V program requires majo r sources (defined and interpreted by EPA to include sources that emit or have a PTE of 100 t py of any pollutant subject to regulation) and certain other sources to apply for operating permits. Under EPA's long-standing interpretation, a pollutant, such as a GHG, is ``subject to regulation'' when it is subject to a CAA requirement establishing actual control of em issions. Title V generally does not add new pollution control requirements, but it does require that each perm it contain all pollution c ontrol requirements or ``applicable requirements'' required by the CAA (e.g., New Source Performance Standard (NSPS), and SIP requirements, including PSD), and it requires that certain procedural requirements be followed, especially with resp ect to compliance with these requirements. ``Applicable requirements'' for title V purposes include stationary source requirements, but do not include mobile source requirements. Other pr ocedural requirements in clude providing review of permits by EPA, states, and the public, a nd requiring permit holders to track, report, and annually certify their complian ce status with respect to their permit requirements.

Title V Permit Requirements

This section provides a brief summary of the requ irements of the title V program that are most relevant to this action. A source generally must apply for a title V permit within 1 year of first becoming subject to permitting--for new sources, th is is usually within 1 year of commencing operation. The application must include, among other things, identifying information, a description of emissions and other information necessary to determine applicability of requirements and information concerning complia nce with those requirements. The permitting authority uses this information to develop the source's operating permit.

Sources: EPA Fact Sheet http:// www.epa.gov/NSR/actions.html

U. S. Environmental Protection Agency’s (“EPA”) fi nal Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule ("Tailo ring Rule"), Federal Register Notice: June 3, 2010 (75 FR 31514).

Federal Register Notice: http://e docket.access.gpo.gov/ 2010/pdf/2010-11974.pdf