UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION IX AIR DIVISION

Technical Support Document

for EPA’s Rulemaking for the

California State Implementation Plan

R egarding

Placer County Air Pollution Control District

Rule 516 , “ Rice Straw Emission Reduction Credit s”

Prepared by: Nancy Levin

March 14 , 20142

RULE IDENTIFICATION

Agency: Placer County Air Pollution Control District ( P C A PCD )

Current SIP Approved Rule: None

Submittal Subject to this TSD: Rule 516 “Rice Straw Emission Reduction Credits” Adopted : February 19, 2009

Submitted: April 6 , 2009

BACKGROUND:

Under Section 107( d) of the Clean Air Act (CAA)

, EPA designated Placer County (partial) nonattainment for the following three National Ambient Air Quality Standards (NAAQS) : 1

- hour ozone

, 1997 8

- hour ozone , and 2006 PM 2.5

. This area is regulated by

the Placer County Air Pollution Control District ( PCAPCD )

.

New or modified major stationary sources subject to PCAPCD ’s Federal New Source Review (NSR) program must obtain emission reductions to offset emission increases prior to constructing such sources. 1 While NSR offsets are typically emission reductions generated from permitted stationary source s (e.g., from shutdowns or over control), the opportunities for generating such reductions from traditional sources has been diminished due to implementation of stringent emission performance standards required by PCAPCD prohibitory rules. The purpose of R ule 516 is to provide procedure s to quantify

, c ertify

, and issue emission reduction credits (ERCs) for emission reductions that have resulted

f rom the permanent curtailment of rice straw burning in PCAPCD in order to ensure that

such reductions meet federal offset requirements

. 2 Existing PCAPCD Rule 504
“Emission Reduction Credits” ( Adopted 9

- 21

- 93, Amended 11

- 03

- 94, 8

- 12

- 10 ) govern s the banking and transfer of ERCs , and Rule 502 “ New Source Review ” governs the use of ERCs . T hese two rules are not the subject of this rulemaking action

.

Historically, the practice of rice growing included burn ing the field stubble and straw following harvest to kill weeds and insects and prepare the field for next year’s plantings

.

1 Rule 502 New Source Review ( Adopted 11

- 12

- 74, Amended 05

- 24

- 77, 06

- 19

- 79, 09

- 21

- 93 , 11

- 03

- 94,

08

- 09

- 01, 12

- 09

- 04, rescinded and re

- adopted 2

- 11

- 10, amended 10

- 13

- 11, 8

- 8

- 13) has been approved into the SIP (September 24, 2013, 78 FR 58460). Rule 502 requires the use of federally enforceable Emission Reduction Credits (ERCs). Rule 516, if approved, would provide for the generation of fe derally recognized

ERCs.

2 Rule 516 would provide for the generation of federally recognized ERCs to address more stringent state offset requirements for pollutants such as PM 10 and CO, even though PCAPCD is in federal attainment for

PM 10 and CO. See Attac hment 3

.3

In 1991, California passed the Connelly

- Areias

- Chandler Rice Straw Burning Reduction

Act of 1991 (California Health & Safety Code (CH&SC) 41865 )

, which required a phase down of the allowable rice straw burning acreage in the Sacramento Valley Air Basin

. 3 By 2001, the phase down was complete and only 125,000 acres or 25% of the historically burned rice growing acreage can now be burned in any one year

. One unique feature of

the state law was that it s pecifically allowed ERCs to be generated from this curtailment

, and stated that the related emission reductions c ould not be relied upon for demonstrating reasonable further progress or attainment of a NAAQS

. While PCAPCD h ad previously

issued rice straw ERC certificates under PCAPCD R ule 504

, 4 R ule 516 was designed to

ensure that the ERCs issued from this non

- traditional source w ould meet the required offset integrity criteria for the purpose of providing federal NSR offsets. 5

RULE SUMMARY : Rule 516 establishes standards, the administrative process and enforceable procedures for calculating creditable emission reductions of volatile organic compounds ( VOC )

, nitrogen oxides ( NOx )

, carbon monoxide ( CO )

, particulate matter of 10 microns or less ( PM 10 )

, and sulfur oxides ( SOx ) created through the permanent curtailment of burning

rice straw. Once an ERC certificate has been issued by the Air Pollution Control Officer (APCO), ERCs may be used as offsets to meet federal or state NSR requirements

.

O wners of rice growing parcels are eligible to apply for ERCs if rice straw was burned during the baseline period , i.e., 1988 through 1992 ( Section s 102 and 301). All applications to obtain rice straw ERCs must be submitted by August 19, 2009

, ( Section

4 01 ) . The rule contains requirements for both new applications and recertification applications (sections 402 and 403), including the list of each parcel included, the acreage used to grow rice during the baseline period, documentation that the rice straw burn ing occurred on the acreage used to grow rice during the baseline period, and a statement of

intent to file a deed restriction for each parcel (s) in the application. T hese requirements are designed to limit agricultural burning to no more than 25% of the total acreage historically used to grow rice.

The rule sets an application deadline to ensure the APCO can consider all historic rice growing acreage and ensure compliance with the acreage limits provided under state law.

3 A portion of Placer County is located in the “Sacramento Valley Air Basin,” as defined by the state, and therefore, state law applies to that portion.

4 Rule 504 (Adopted 9

- 21

- 93, Amended 11

- 03

- 94, 8

- 12

- 10 ) “Emission Reduction Credits” does n ot include the necessary provisions to ensure that emission reduction credits from nontraditional sources

, such as curtailing rice straw burning

, are surplus, quantifiable, enforceable, and permanent and

, therefore

, valid for federal NSR offset purposes. B ecause nontraditional sources have generally not been regulated, there are much less historic data. Nontraditional ERC generating rules must include more specific quantification procedures to provide the necessary assurances that the reductions are valid a nd can be recognized as

federal NSR offsets.

5 ERCs generated pursuant to Rule 51 6 may also be used to address California offset requirements that are not in the SIP.4

Section 3 02 provides that the total available acreage for generating ERCs in PCAPCD

shall not exceed 10,303 acres. 6 If the APCO receives applications where the total acreage exceeds this amount, the APCO must adjust the available acreage for each applicant in accordance with the p rocedures in Section 40 4. Th ese section s ensure that the emission reductions come from a ‘real’ reduction in rice straw burning activities by limiting the total amount of acreage available to generate ERCs

.

E mission reduction s are calculat ed in accordance with procedures i n Section s 302, 3 0 3

and 3 0 4, and rely on the following parameters:

 Historic Burn Fraction (HBF): T he HBF is the percent of acres grown that were

burned . The air district establishes its district

- specific HBF, which may va ry by district, based on available references

. 7 The PCAPCD states that 100% of the rice that was planted was burned.

 Available A creage (acres) =

[applicant’s eligible parcels (acres)] x [historic burn fraction (%) ]

 Emission F actor s (lbs /acre) listed in Section 3 0 3

, take into account:

[fuel loading 8 (tons of rice straw burned /acre)] x [Jenkins’ emission

factors 9 for rice straw burning (lbs pollutant /ton s of rice straw burned )] 10

Therefore, Annual E mission R eduction ( lbs ) = Available Acreage (acres) x Emission Factor (lbs/acre) x 75%. 11

6 The 10,303 limit for available acreage represents the total acres of rice planted in Placer County in1989, which PCAPCD selected as its “representative year.” See Sacramento Federal Non

- Attainment Area Rice Straw Emission Reduction Credit Model Rule Support Document ( “ White Paper ” ), October 16 , 2008 , page 13 and 16. The PCAPCD, using the process outlined in the “White Paper,” averaged the number of acres planted annually between 1982 and 1991 ( 10,190 acres), and selected the single year during the baseline period (1988

- 1992) for which acres pla nted was the closest to the 10

- year average. PCAPCD selected a representative year of 1989, for which there were 10,303 acres planted . See also, Proposed Adoption of Rule 516, Rice Straw Emission Reduction Credits Staff Report (“Rule 516 Staff Report”), Ja nuary, 26,

2009.

7 Ibid. page s 3 and 11

. 8 Fuel loading from rice is 3.0 tons/acre. See White Paper, Table A2

- Emission factors, page 16.

9 The emission factors (sometimes referred to as Jenkins II emission factors) come from a California A ir

R esources B o ard (CARB) memo, which was originally released 8/17/2000 and updated 9/12/2000. The factors in the memo are cited as being predominately from Bryan Jenkins’ report entitled, “Atmospheric Pollutant Emission Factors from Open Burning of Agricultural and For est Biomass by Wind Tunnel

Simulations

, ” 1996, UC Davis.

10 Rule 516 Staff Report, page 3.

11 Proposed Adoption of Rule 516, Rice Straw Emission Reduction Credits, Staff Report, PCAPCD, January 26, 2009, page 3.5

Consistent with state requirements, Rule 516 also apportions the annual emission

reductions into quarter s bas ed on the historic rice growing and burn practices with in the

district.

R ule 516 includes several section s regarding burn restrictions

. Section 3 0 6 requires a deed restriction be placed on the parcel and prohibits burning t hat is not consistent with

the ERC certificate

. The issuance of an ERC is subject to Section 3 08 which limits agricultural burning to 25% of the rice growing acreage. Section 3 07 requires PCAPCD to place a parcel or group of contiguous parcels on a “restricted burn list” prior to issuing an ERC, and that no agricultural burn permit may be issued for more than 25% of the rice growing acreage of any parcel on the restricted burn list. Section 308 states that no one shall burn on more than 25% of the rice growing acreage of a parcel that has received an ERC certificate pursuant to Rule 516

.

A rice growing parcel owner who previously obtained s tate rice straw ERCs pursuant to

R ule 502 Emission Reduction Credits

, may re

- apply under Rule 516 to have these previous ERCs re

- certified as federal ERCs under this rule. The applicant must surrender all previous certificates issue d for rice straw burning on those parcels before an ERC can

be reissued.

Applicants are also required to maintain , for a minimum of five years, records on the

amount of acres planted and burned

, as well as the type of crop grown. The District is required to conduct a program evaluation and provide a report to EPA within two years of rule adoption

.

EPA REVIEW CRITERIA: EPA generally considers three criteria in evaluating state

and local prohibitory rules for approval into the SIP . For this rulemaking, we are considering two additional criteria.

1. Enforceability

- Section 110(a) of the CAA requires enforceable SIP requirements. Several EPA guidance documents are used to evaluate rule enforceability, including the “Bluebook” ( Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Clarification to Appendix D , November 24, 1978, 52 FR 45044)

and EPA Region IX ’ s Guidance Document for Correcting Common VOC and Other Rule Deficiencies (August 21, 2001, the “ Little Bluebook ” )

.
2. Non

- interference

- CAA § 110(l) prohibits EPA from approving any SIP revision that would interfere with any applicable requirement concerning attainment and reasonable further progress (RFP) or any other applicable requirement of the CAA. In addition, CAA § 193 prohibits the modification of any SIP

- approved control requirement in effect before November 15, 1990, in a nonattainment area.6

3. Stringency

- Section 182(b)(2) of the CAA requires certain SIP rules to apply Reasonably Available Control Technology (RA CT). Other sections of the Act require other control levels.

4. New Source Review

– Section 173(c) of the CAA and 40 CFR Part 51, Appendix S, “Emission Offset Interpretative Ruling” require certain sources to obtain

emission reductions to offset increased emissions from new projects

.

5. Economic Incentive Programs

- EPA published the guidance, “Improving Air Quality with Economic Incentive Programs” on January 2001 (EPA

- 452/R

- 01

- 001). This guidance applies to discretionary economic incentive pro grams (EIPs) and represents the agency’s interpretation of what EIPs should contain in order to meet the requirements of the CAA . Because this guidance is non

- binding and does not represent final agency action, EPA is using the guidance as an initial scree n to determine whether potential approvability issues arise.

EPA EVALUATION: Rule 516 complies with the evaluation criteria as discussed briefly below.

1. Enforceability

- The applicability and requirements of Rule 516 are generally clear and consistent with the Bluebook and other relevant EPA guid ance regarding enforceability. Rule 516 includes references to other PCAPCD rules. We

evaluated the referenced rules to determine the purpose of the reference, whether

the ru les were SIP approved, and whether the rules affected the criteria, standards, and procedures for generating valid ERCs under Rule 516

. We determined that

these references did not affect the approvability of the rule.

2. Non

- interference

– Rule 516 does not replace any existing rule currently in the

SIP. Therefore, approval of this rule will not interfere with any applicable requirement concerning attainment and reasonable further progress (RFP) or any other applicable requirement of the CAA

.

3. Stringency

- None of these CAA sections apply to Rule 516 , so stringency is not being used to evaluate for SIP approval.

4. New Source Review

– Emission reductions to be used as NSR offsets must be surplus, quantifiable, enforceable, and permanent.

In order for emission reductions from the curtailment of rice straw burning to be considered surplus, the emissions from this source category must be clearly and accurately quantified in the baseline emissions inventory and in future

- year projections of th e emissions inventory used in the attainment demonstration . In addition, the emission reductions created under Rule 516 must not be relied upon7 in any attainment or progress plan s

. The PCAPCD has updated their ozone and

PM 2.5 baseline emissions inventories to include agricultural burning, including rice straw burning. 12 Although CH&SC 41865 requires the curtailment of rice straw burning, these emission reductions are not being relied upon to demonstrate attainment, RFP or any o ther purpose and can therefore be considered surplus

.

Rule 516 meets the quantification criteria because it includes a methodology to quantify emission s and emission reductions in S ection s 3 02 , 3 03 , and 3 04

. The emission factors and fuel loading factor come from a CARB memo that relies primarily on a 1996 paper by Bryan Jenkins of U.C. Davis. The determination of acreage which historically grew rice and burned rice straw is based on documentation such as the grow er’s rice sales record, U

. S

. D epartment of

A griculture data on rice planting, air district burn permits , log books, and pictures

.

The emission reductions are permanent and enforceable because the owner of the parcel

, who has been issued an ERC under Rule 516

, is subject to the requirements

of the rule , including the requirement to burn no more than 25% of the rice growing acreage

. Should the property change ownership, a deed restriction filed with the assessor’s office would alert subsequent owners t hat they cannot burn more the 25% of the rice growing acreage in any given year.

5. Economic Incentive Program

- Several fundamental principles described in the guidance include integrity (credits are based upon emission reductions which are surplus, enfor ceable, quantifiable, and permanent), equity, and environmental

benefit. The integrity principle is the same as those described under NSR

evaluation and described a bove

. This rule generates emissions offsets for the NSR program and does not raise any equity issues that are different from the NSR program in general. The environmental benefit has been addressed in the offset ratio defined by the NSR program.

EPA ACTION: EPA staff recommend s full approval of the submitted version of Rule

516 because it complies with all relevant CAA requirements and is consistent with EPA’s guidance for NSR and economic incentive programs

.

REFERENCES:

1. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” (a.k.a., Bluebook) EPA OAQPS, May 25, 1988 (web citation).

2. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” (a.k.a., Little Bluebook), EPA Region 9, August 21, 2001

12 http://www.placer.ca.gov/~/media/apc/documents/Notices/DraftPM25PlanandAppendices.pdf , See pages

4

- 11 to 4

- 13.8 ( http://www.epa.gov/region09/air/sips/littlebluebook2001.pdf ).

3. “Memorandum from Stephen D. Page, Director, EPA Office of Air Quality Planning and Standards to Regional Air Directors, Regions I

- X, “Implementation

Guidance for the 2006 24

- Hour Fine Particle (PM2.5) National Ambient Air Quality Standards (NAAQS).

4. “Technical Information Document for Residential Wood Combustion Best

Availabl e Control Measures”, EPA

- 450/2

- 92

- 002, September 1992.

5. “ General Preamble”, Appendix C2

-- Available Residential Wood Combustion Control Measures, 57 FR 18072, April 28, 1992.

6. “Strategies for Reducing Residential Wood Smoke”, EPA Document # EPA

456/B

- 09

- 001, October 2009.

ATTACHMENTS:

1. PCAPCD Rule 516

, “ Rice Straw Emission Reduction Credits, ” a dopted on February 19, 2009 and submitted by CARB to EPA on April 6, 2009

.

2. “Improving Air Quality with Economic Incentive Programs,” January 2001, EPA

452/R

- 01

- 001 (cover only ; text at http://www.epa.gov/ttncaaa1/t1/meta/m1201.html ).

3. Memo dated March 14, 2014 from Nancy Levin

, EPA Rules Office, to proposed rulemaking file, “ PCAPCD Attainment Status and ERCs. ”9 ATTACHMENT 3

MEMORANDUM

Date: March 14, 2013 Subject: PCAPCD Attainment Status & ERC s From: Nancy Levin , EPA Region 9 Air Division, Rules O ffice, A IR

- 4

To: File for Proposed Rulemaking on PCAPCD Rule 516

If PCAPCD Rule 516 is approved into the SIP, it will provide fo r the generation of federally

- recognized Emission Reduction Credits ( ERCs ) for VOC, NO x , PM 10 , PM 2.5
, CO, and SO x

. PCAPCD ’s attainment status varies depending on the pollutant. The following describes the area’s federal attainment status, as well as where and how these ERCs can be used. This analysis takes into account the fact that PCAPCD may be in federal attainment (e.g., where no offsets are required for federal New Source Review ( NSR ) ) yet sources in the area may be subject to more stringent state offset requirements

embedded in the SIP

- approved NSR rule. The more stringent state requirements are typically implemented by having a lower emissions threshold for requiring offsets.

VOC and NO x (1

- hour and 8

- hour Ozone NAAQS)

 PCAPCD is federal nonattainment for 1

- hour and 8

- hour ozone.

 VOC and NO x are precursors to ozone.

 ERCs for VOC and NO x can be used w ithin the Placer Co unty ozone
nonattainment area.

 These VOC and NO x ERCs could be used to meet more stringent state VOC and

NO x offset requirements that are embedded in PCAPCD’s NSR rule.

PM 10

 PCAPCD is federal attainment for PM 10

.

 Because these PM 10 ERCs are being generated in an area that is in federal attainment, under the CAA, these PM 10 ERCs cannot be used as NSR offsets in any federal nonattainment area

.

 These PM 10 ERCs could be used to meet more stringent state PM 10 offset requirements that are embedded in PCA PCD ’s NSR rule.

PM 2.5

 Portions of PCAPCD are classified as federal non attainment for PM 2.5

. , however, EPA approved a clean data finding for the Sacramento nonattainment area, which includes a portion of Placer County, effective August 14, 2013 (78 FR 4201 8, July 15, 2013). Because these PM 2.5 ERCs are being generated in an area that is federal nonattainment, under the CAA, these PM 2.5 ERCs can be used as PM 2.510 offsets in Placer County or other federal nonattainment are as if certain conditions

are met.

 These PM 2.5 ERCs could be used to meet more stringent state PM 2.5 offset requirements that are embedded in PCAPCD ’s NSR rule.

CO

 PCAPCD (and the entire state) is federal attainment for CO.

 The CO ERCs could be used to meet more stringent state offset requirements

embedded in PCAPCD ’s NSR rule or in any other area in accordance with state
law.

SO

X

 PCAPCD is federal attainment for SO
x .

 SO

X is a precursor to PM 10 and PM 2.5

.

 Because PCAPCD is in federal attainment for PM 10 , the SO x ERCs could be used

for more stringent state offset requirements in PCAPCD , but cannot be used as

PM 10 offsets in any federal PM 10 nonattainment area

.

 Because PCAPCD is a federal non attainment area for PM 2.5 , the SO
x ERCs could

be used as PM 2.5 offsets if the District obtains EPA approval of the appropriate

PM 2.5 to SO
x interpollutant offset ratios.

NOx

 PCAPCD is federal attainment for NO
x .

 NO
x is a precursor to PM 2.5

.

 Because PCAPCD is a federal non attainment area for PM 2.5 , the NO
x ERCs could

be used as PM 2.5 offsets if the District obtains EPA approval of the appropriate

PM 2.5 to NO
x interpollutant offset ratios.