UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460

THE ADMINISTRATOR 

## JAN 1 22011

The Honorable Peter DeFazio U.S. House ofRepresentatives Washington, D.c' 20515

Dear Congressman DeFazio:

Thank you for your recent letter about the way that carbon dioxide ("C02") emissions from biomass burning will be treated in Clean Air Act permitting ofconstruction projects at large stationary sources. As you know, biomass canbe part ofa national strategy to reduce dependence on fossil fuels, and efforts are underway to foster the expansion ofrenewable
resources and promote biomass as ways ofaddressing climate change and enhancing forest management.

Last July, EPA solicited views from the public on approaches to accounting for C02 emissions from biomass and other biogenic sources, including whether some or all ofa source's biomass C02 emissions could be discounted based on a determination that they are canceled out by the C02 absorption associated with growing the fuel. EPAreceived information supporting the conclusionthat certain biomass such as waste materials whose inevitable decomposition will result in greenhouse gas emissions anyway

- have only very limited climate impacts when combusted as fuel. EPA also, however, received information indicating that the use ofcertain otherbiomass as fuel could have more significant climate impacts.

In November, EPA announced that it was reviewing the public's comments with the goal ofdeciding whether the Clean Air Act would allowthe use ofsome kind ofdiscounting system
or othermethod reflecting the net impacts ofbiomass combustion in determining the applicability ofthe**pre~construction** permitting requirementto C02 emissions from**biomass~** fired units. Yourrecent letter urges EPA to make a positive determination and to start a rulemaking promptly.

As ofJanuary 2, 2011, only those large stationary sources that triggerthe**pre~** constructionpermitting requirement for otherpollutants need to address greenhouse gases such
as C02. No source will be subjectto the pre-constructionpermitting requirement solely because ofits greenhouse gas emissions until after July 1, 2011. That is oneresult ofthe Tailoring Rule that EPAissued last year. With the approach ofJuly 1in mind, I am announcing today that, by that date, EPA will complete a rulemaking to defer for three years the application ofthe preconstruction permitting requirement to biomass and other biogenic C02 emissions.

Internet Address (URL). http/IW\III'N.epa.gov Recycled/Recyclable. Pnnted With Vegetable Oil Based Inks on 100% Postconsumer. Process Chlorine Free Recycled PaperThe purpose ofthe deferral is to give EPA time to effectuate a detailed examination of the science associated with biogenic C02 emissions and to considerthe technical issues that the agency must resolve in orderto account for biogenic C02 emissions in ways that are scientifically sound and also manageable inpractice.

EPA will ensure thatpartners within the federal government and scientists outside ofit with relevant expertise play meaningful roles in the examination. Following the examination's completion, EPA will use its work product in establishing, by notice-and-commentrulemaking, the system for determining the applicability ofthe Clean Air Act's pre-constructionpermitting requirement to projects that result in biomass and other biogenic C02 emissions. EPA's intent is to ensurethat boththe scientific examination and the resulting rulemaking are completed within the three-year deferral period mentioned above.

Concurrent with the proposal to defer application ofthe pre-construction permitting requirement (known as "Prevention ofSignificant Deterioration," or "PSD") to biomass and otherbiogenic C02 emissions, EPA intends to issue interim guidance to help permitting authorities establish a basis for concluding that the best available control technology (or "BACT," which is one ofthe statutory conditions for receiving a permit) for greenhouse gas emissions at such sources is simply combustion ofbiomass fuels. As noted above, under the Tailoring Rule, as ofJanuary 2, 2011, large stationary sources thatbecome subject to PSD for otherpollutants will need to address greenhouse gases such as C02. Ifsuch permits are issued before July 1,2011, then existing regulations mightrequire that the permits meetthe BACT requirement for greenhouse gas emissions during aninterim period oftime. In guidance issued lastNovember, EPA explicitly recognized that a permitting authority might determine that certain types ofbiomass by themselves are BACT for greenhouse gas emissions after consideringthe environmental, energy, and economic benefits ofusing the fuel. EPA's supplemental guidance will provide a basis thatpermitting authorities may use to support the conclusion, during the interim period, that BACT for C02 at such sources is simplythe combustion ofbiomass fuel.

I hope you will see the steps described in this letter as following through on myprior commitmentto exercise whatever discretion the Clean Air Act affords to avoid discouraging the
use ofrenewable, domestically-produced fuel in powerplants and factories. Ifyou have additional questions, please do not hesitate to contact me orto have your staffcontact David McIntosh in EPA's Office ofCongressional and Intergovernmental Relations.