STATE OF NORTH CAROLINA

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

DIVISION OF AIR QUALITY

REPORT OF PROCEEDINGS OF PUBLIC HEARING

ON PROPOSED AMENDMENT TO

15A NCAC 02D .0544, PREVENTION OF SIGNIFICANT DETERIORATION 

REQUIREMENTS FOR GREENHOUSE GASES

 

MARCH 14, 2012

RALEIGH, NC 

ENVIRONMENTAL MANAGEMENT COMMISSION
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CONTENTS

CHAPTER I Summaries and Recommendations I-1

Background and Summary I-1

Comments and Responses Thereto I-2

Summary of Comments and Responses I-5

Conclusion I-5

Hearing Officers’ Recommendation I-6

CHAPTER II Rules Proposed for Adoption II-1

CHAPTER III Report of Proceedings III-1

Introduction III-1

Designation of Hearing Officer III-2

Public Notice III-4

Transcript III-6

CHAPTER IV Exhibits IV- 1

Proposed Rules as Presented at the Hearing

IV-2

Hearing Officer Comments at Hearing IV-6

CHAPTER V Written Comments During Comment Period V-1

CHAPTER VI Attachments VI-1

CHAPTER VII Documentation VII-1
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I-1

CHAPTER I

Summaries and Recommendations

Proposed amendment to Rule 15A NCAC 02D .0544, Prevention of Significant Deterioration 

Requirements for Greenhouse Gases

BACKGROUND AND SUMMARY 

A public hearing was held in Raleigh, North Carolina, on March 14, 2012, to take public 

comments on amendments to Rule 15A NCAC 02D .0544, Prevention of Significant 

Deterioration Requirements for Greenhouse Gases. Mr. Donnie Brewer and Mr. Christopher 

Ayers were appointed and acted as hearing officers for this hearing. 

On July 20, 2011, United States Environmental Protection Agency (EPA) promulgated a three 

year deferral period for consideration of carbon dioxide (CO2) emissions from bioenergy and 

other biogenic sources when determining whether a stationary source meets prevention of 

significant deterioration (PSD) and Title V applicability thresholds, including those for the 

application of best available control technology (BACT). Stationary sources that combust 

biomass (or otherwise emit biogenic CO2 emissions) and construct or modify during the deferral 

period will avoid the application of PSD to the biogenic CO2 emissions resulting from those 

actions. This deferral applies only to biogenic CO2 emissions and does not affect non-greenhouse 

pollutants or other greenhouse gases (GHG) (e.g., methane (CH4) and nitrous oxide (N2O)) 

emitted from the combustion of biomass fuel and decomposition of biogenic material. Also, this 

deferral only pertains to biogenic CO2 emissions in the PSD and Title V programs and does not 

pertain to any other EPA programs such as the GHG Reporting Program. EPA intends for the 

deferral to be temporary while the agency completes its science and technical review of the issue 

of accounting for the net atmospheric impact of biogenic CO2 emissions.

The adoption of the deferral for biogenic CO2 emissions from PSD permitting programs in 40 

Code of Federal Regulations (CFR) 51.166 is optional for any state, local, or tribal permitting 

authority. Although the biogenic CO2 emissions deferral is optional, EPA wrote in the 

promulgation that it expected states to need more time to determine how best to address 

technical, scientific and practical issues related to biogenic CO2 without disrupting the proper 

functioning and timeliness of the permitting programs. A rule amendment is proposed to reflect 

the federal deferral while the uncertainty surrounding the impact of biogenic CO2 emissions and 

how such emissions will be handled in the overall GHG framework is being resolved. 

NC air quality Rule 15A NCAC 02D .0544 does not implement the new federal deferral 

automatically by reference. The version of the CFR incorporated in the current permanent rule is 

that published in the Federal Register on June 3, 2010 and effective August 2, 2010 and does not 

include any subsequent amendments or editions to the referenced material. A temporary rule to 

implement the new federal deferral became effective on December 23, 2011. To permanently 

implement the federal deferral, the rule amendment as proposed in Chapter II would need to be 

adopted by the Environmental Management Commission (EMC).
I-2

Under G.S. 150B-19.1(a)(2), an agency shall seek to reduce the burden upon those persons or 

entities who must comply with the rule that is being adopted. Deferring biogenic CO2 emissions 

will reduce the regulatory burden on affected facilities by eliminating biogenic CO2 emissions 

when determining whether a stationary source meets the PSD and Title V applicability 

thresholds, including those for the application of BACT.

An amendment to the Rule 15A NCAC 02D .0544 is being presented to ensure that stationary 

sources would not have to unnecessarily complete a BACT analysis for biogenic CO2 and 

possibly be required to install equipment to control emissions during the three year deferral. 

EPA’s future rulemaking on this subject is uncertain until EPA completes their review of the 

scientific and technical issues related to accounting for biogenic CO2 emissions.

To date, EPA released a draft report, Accounting Framework for Biogenic CO2 Emissions from 

Stationary Sources, in September 2011. EPA charged its Science Advisory Board (SAB) with 

review of the report. The Biogenic Carbon Emissions Panel of EPA’s SAB issued a deliberative 

draft report on March 13, 2012 outlining the complicated role that bioenergy plays in the carbon 

cycle. The Panel stated that the Framework has forced important questions and laid the 

groundwork for future developments in carbon accounting. The Panel’s draft report includes 

advice to enhance the final document and alternative approaches to EPA’s current policy menu; 

however it is a work in progress and there is not yet consensus among the panel on the issues 

surrounding the accounting for long-run effects of biogenic feedstocks on the carbon cycle.

The EMC requested comment on the economic assessment. The economic assessment only 

addresses costs and benefits of the affected sources. Several EMC members requested

information relative to the costs and benefits to all parties resulting from the proposed action, in 

particular, human health effects and impacts to ecosystem services associated with variation in 

carbon dioxide and other pollutant emissions from biomass sources.

Rule 15A NCAC 02D .0544, Prevention of Significant Deterioration Requirements for 

Greenhouse Gases, is proposed for amendment to update the PSD for GHG rule in order to 

reflect the three year federal deferral from consideration of CO2 emissions from combustion of 

biomass fuel and decomposition of biogenic material.

PUBLIC COMMENTS AND RESPONSES THERETO

Comment: Ms. Therese Vick of the Blue Ridge Environmental Defense League (BREDL) 

comments that BREDL does not support the adoption of the rule amendment at this time. She 

states that North Carolina is not required to participate in EPA’s deferral. She states that Senate 

Bill (SB) 781 has been vetoed, and it is unclear if the veto will be overridden. At this time, North 

Carolina can still promulgate standards stricter than EPA. If SB 781’s veto is overridden, this 

issue is moot, making this entire process a waste of precious funds. The North Carolina Division 

of Air Quality has jumped the gun. EPA correctly gives each state time to carefully weigh the 

effect that adopting this rule will have on public health and the environment.
I-3

Response: The Division of Air Quality (DAQ) does not implement the new federal deferral 

automatically by reference. The version of the Code of Federal Regulations (CFR) incorporated 

in the current permanent rule is that published in the Federal Register June 3, 2010 and effective 

August 2, 2010 and does not include any subsequent amendments or editions to the referenced 

material. A temporary rule to implement the new federal deferral became effective on December 

23, 2011. To permanently implement the federal deferral, the rule amendment as proposed in 

Chapter II would need to be adopted by the EMC.

Under G.S. 150B-19.1(a)(2), an agency shall seek to reduce the burden upon those persons or 

entities who must comply with the rule that is being adopted. Deferring biogenic CO2 emissions 

will reduce the regulatory burden on affected facilities by eliminating biogenic CO2 emissions 

when determining whether a stationary source meets the PSD and Title V applicability 

thresholds, including those for the application of BACT. Per G.S. 150B 19.1(a)(6), rules shall be 

designed to achieve the regulatory objective in a cost-effective and timely manner. Governor 

Perdue vetoed SB 781 on June 30, 2011 but the veto was overridden by the state Senate on 

July 13, 2011 and by the state House on July 25, 2011. The resulting legislation became Session 

Law 2011-398 on July 25, 2011.

EPA’s future rulemaking is uncertain until EPA completes their review of the scientific and 

technical issues related to accounting for biogenic CO2 emissions. A rule amendment is proposed 

to reflect the federal deferral while the uncertainty surrounding the impact of biogenic CO2

emissions and how such emissions will be handled in the overall GHG is being resolved. Until 

EPA’s review is completed, the rule amendment ensures that stationary sources would not have 

to unnecessarily complete a BACT analysis for biogenic CO2 and possibly be required to install 

equipment to control emissions during the three year deferral period. It is not in the public 

interest to require stationary sources to incur costs implementing PSD permitting requirements 

before EPA completes their review when there may be a de-minimis impact on net CO2 levels in 

the atmosphere.

Comment: Ms. Therese Vick of BREDL comments that not controlling carbon dioxide 

emissions from biogenic sources for any length of time is a threat to the survival of our planet. 

She mentions the dioxin reassessment that took from 1985 to 1994 where the final report has not 

been released. BREDL fears that this three-year delay could be the beginning of a similar 

odyssey with devastating consequences. 

Response: On July 15, 2010, EPA published a Call for Information (CFI) to solicit

information and viewpoints from interested parties on approaches to accounting for GHG 

emissions from bioenergy and other biogenic sources (75 FR 41173). EPA received several 

comments on the net atmospheric impact of biomass. Some commenters supported the 

conclusion that biomass has zero net atmospheric impact based on the premise that biomass is 

part of the natural carbon cycle and does not add additional carbon to the atmosphere. 

Conversely, other commenters supported the conclusion that biomass combustion increases the 

atmospheric carbon load. Issues raised by commenters, including the time delays between 

sequestration from and release to the atmosphere, differences between feedstocks, influences of 

different spatial scale, and differences in combustion efficiencies, are important in the 

development of accounting methodologies and will be considered during the scientific review
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that will take place during the three year deferral period. EPA will consider such issues in order 

to account for biogenic CO2 emissions from stationary sources in ways that are scientifically

sound and manageable in practice. The rule is intended as a temporary measure and has an 

expiration date of July 21, 2014.

Comment: Ms. Therese Vick of BREDL comments that many of the biomass facility 

proposals are in medically underserved areas with high percentages of People of Color. Biomassto-energy proposals are already creating defacto sacrifice zones. In North Carolina, poor 

communities of color are being targeted by biomass burning facilities. For example, in Hertford 

County, Hertford Renewable Energy is proposing to build a 60mw biomass-fired power plant. 

Hertford County is one of the unhealthiest counties in the state—ranked 91st —with 20% of its 

residents living in poverty. Additionally, 65% of Hertford County residents are minorities. 

Sampson County, where Fibrowatt has a proposed chicken manure incinerator, is 47% minority, 

with over 20% of its residents living below the poverty level. Sampson County is also 

unhealthy—ranked 71st. Finally, in Montgomery County, Poultry Power USA has recently 

proposed a chicken manure biomass facility. Close to 40% of the county residents are minority, 

with almost 20% living below the poverty line.

Response: There is no evidence this rule amendment would lead to biomass facilities 

locating in medically underserved areas with high percentages of People of Color. The rule is a 

rule of general applicability which will apply to all facilities equally, regardless of location. The 

rule does not define siting requirements nor provide incentives for locating in a particular area. 

The rule also does not reduce the other permitting requirements that a biomass unit would need 

to meet, but simply exempts the CO2 emissions from the biomass sources, making the permitting 

requirements identical to those at the federal level. The process of permitting new sources 

provides interested parties the opportunity to comment and to raise concerns when a particular 

source with a known location is seeking a permit. When such a permit application is filed, the 

commenter or other interested parties will have a process to object to the permit on the basis that 

a particular community is being burdened by a disproportionate share of environmental risks.

Comment: Ms. Therese Vick of BREDL comments that some facilities are claiming that tire 

derived fuel and other questionable feedstocks are “biomass”, at least in part.

Response: CO2 from combustion of the biological fraction of tire-derived fuel is considered a 

biogenic CO2 emission and is included in EPA’s three year deferral period for consideration of 

CO2 emissions from bioenergy and other biogenic sources when determining whether a 

stationary source meets PSD and Title V applicability thresholds. The CO2 emissions from the 

non-biological fraction of tire-derived fuel are not deferred when determining whether a source 

meets PSD thresholds. The rule also does not reduce other permitting requirements that a 

biomass unit combusting tire-derived fuel would need to meet, but simply exempts the CO2

emissions from the combustion of the biological fraction of the tire-derived fuel.

Comment: R. Scott Davis of the United States Environmental Protection Agency stated that 

staff has reviewed the prehearing submittal and has no comments at this time.

Response: No changes were made to the rule.
I-5

SUMMARY OF COMMENTS AND RESPONSES

Comments Response

DAQ not required to adopt EPA deferral Although optional, the amendment reflects the 

federal deferral while the uncertainty in issues 

to account for net atmospheric impact of 

biogenic CO2 emissions and how such 

emissions will be handled in the overall GHG 

framework are being resolved.

Not controlling CO2 emissions is a greenhouse 

gas problem.

EPA is studying net atmospheric impact of CO2

emissions from biomass during deferral period. 

Biomass facilities will be located in areas with 

high percentage of minorities.

Rule does not regulate siting of facility.

Tire-derived fuel is considered biomass. CO2 from combustion of the biological fraction 

of tire-derived fuel is considered a biogenic 

CO2 emission and is included in EPA’s three 

year deferral period.

CONCLUSION

Two persons commented on the proposed rule amendment during the comment period for the 

hearing record. One commenter did not support the adoption of the rule amendment. One 

commenter commented that not controlling biogenic CO2 emissions being a threat to the survival 

of the planet. One commenter commented on the rule’s disproportionate impact to People of 

Color and the poor. One commenter commented that tire-derived fuel is considered biomass. 

One commenter reviewed the rule amendment and did not suggest any changes to the 

amendment. No changes were made to the rule as a result of these comments.

The Environmental Management Commission requested comment on the economic assessment. 

The economic assessment only addresses costs and benefits of the affected sources. Several

EMC members requested information relative to the costs and benefits to all parties resulting 

from the proposed action, in particular, human health effects and impacts to ecosystem services 

associated with variation in carbon dioxide and other pollutant emissions from biomass sources.

The costs and benefits to all parties related to health effects and ecosystem services are 

sufficiently speculative and tenuous that no meaningful cost/benefit analysis can be provided

with respect thereto. The economic assessment presented at the hearing was approved by the 

North Carolina Office of State Budget and Management on November 16, 2011. No comments 

were received during the hearing process. No changes were made to the approved economic 

assessment.
I-6

HEARING OFFICERS’ RECOMMENDATION

The Hearing Officers recommend that the proposed amendment as presented in Chapter II of this 

hearing report be adopted by the Environmental Management Commission.
II-1

1 15A NCAC 02D .0544 is proposed for amendment as follows:

2

3 15A NCAC 02D .0544 PREVENTION OF SIGNIFICANT DETERIORATION REQUIREMENTS FOR 

4 GREENHOUSE GASES

5 (a) The purpose of this Rule is to implement a program for the prevention of significant deterioration of air quality 

6 for greenhouse gases as required by 40 CFR 51.166. For purposes of greenhouse gases, the provisions of this Rule 

7 shall apply rather than the provisions of Rule .0530 of this Section. For all other regulated NSR pollutants, the 

8 provisions of Rule .0530 of this Section apply.

9 (b) For the purposes of this Rule, the definitions contained in 40 CFR 51.166(b) and 40 CFR 51.301 shall apply 

10 except the definition of "baseline actual emissions." "Baseline actual emissions" means the rate of emissions, in 

11 tons per year, of a regulated new source review (NSR) pollutant, as determined in accordance with Subparagraphs 

12 (1) through (3) of this Paragraph:

13 (1) For an existing emissions unit, baseline actual emissions means the average rate, in tons per year, 

14 at which the emissions unit actually emitted the pollutant during any consecutive 24-month period 

15 selected by the owner or operator within the 5-year period immediately preceding the date that a 

16 complete permit application is received by the Division for a permit required under this Rule. The 

17 Director shall allow a different time period, not to exceed 10 years immediately preceding the date 

18 that a complete permit application is received by the Division, if the owner or operator 

19 demonstrates that it is more representative of normal source operation. For the purpose of 

20 determining baseline actual emissions, the following shall apply:

21 (A) The average rate shall include fugitive emissions to the extent quantifiable, and emissions 

22 associated with startups, shutdowns, and malfunctions;

23 (B) The average rate shall be adjusted downward to exclude any non-compliant emissions 

24 that occurred while the source was operating above any emission limitation that was 

25 legally enforceable during the consecutive 24-month period; 

26 (C) For an existing emission unit (other than an electric utility steam generating unit), the 

27 average rate shall be adjusted downward to exclude any emissions that would have 

28 exceeded an emission limitation with which the major stationary source must currently 

29 comply. However, if the State has taken credit in an attainment demonstration or 

30 maintenance plan consistent with the requirements of 40 CFR 51.165(a)(3)(ii)(G) for an 

31 emission limitation that is part of a maximum achievable control technology standard that 

32 the Administrator proposed or promulgated under part 63 of the Code of Federal 

33 Regulations, the baseline actual emissions shall be adjusted to account for such emission 

34 reductions;

35 (D) For an electric utility steam generating unit, the average rate shall be adjusted downward 

36 to reflect any emissions reductions under G.S. 143-215.107D and for which cost recovery 

37 is sought pursuant to G.S. 62-133.6;
II-2

1 (E) For a regulated NSR pollutant, when a project involves multiple emissions units, only 

2 one consecutive 24-month period shall be used to determine the baseline actual emissions 

3 for all the emissions units being changed. A different consecutive 24-month period for 

4 each regulated NSR pollutant can be used for each regulated NSR pollutant; and

5 (F) The average rate shall not be based on any consecutive 24-month period for which there 

6 is inadequate information for determining annual emissions, in tons per year, and for 

7 adjusting this amount if required by Parts (B) and (C) of this Subparagraph;

8 (2) For a new emissions unit, the baseline actual emissions for purposes of determining the emissions 

9 increase that will result from the initial construction and operation of such unit shall equal zero; 

10 and thereafter, for all other purposes, shall equal the unit's potential to emit; and

11 (3) For a plantwide applicability limit (PAL) for a stationary source, the baseline actual emissions 

12 shall be calculated for existing emissions units in accordance with the procedures contained in 

13 Subparagraph (1) of this Paragraph and for a new emissions unit in accordance with the 

14 procedures contained in Subparagraph (2) of this Paragraph.

15 (c) In the definition of "net emissions increase," the reasonable period specified in 40 CFR 51.166(b)(3)(ii) shall be 

16 seven years. 

17 (d) The limitation specified in 40 CFR 51.166(b)(15)(ii) shall not apply.

18 (e) Major stationary sources and major modifications shall comply with the requirements contained in 40 CFR 

19 51.166(i) and (a)(7) and by extension in 40 CFR 51.166(j) through (o) and (w). The transition provisions allowed by 

20 40 CFR 52.21 (i)(11)(i) and (ii) and (m)(1)(vii) and (viii) are hereby adopted under this Rule. The minimum 

21 requirements described in the portions of 40 CFR 51.166 referenced in this Paragraph are hereby adopted as the 

22 requirements to be used under this Rule, except as otherwise provided in this Rule. Wherever the language of the 

23 portions of 40 CFR 51.166 referenced in this Paragraph speaks of the "plan," the requirements described therein 

24 shall apply to the source to which they pertain, except as otherwise provided in this Rule. Whenever the portions of 

25 40 CFR 51.166 referenced in this Paragraph provide that the State plan may exempt or not apply certain 

26 requirements in certain circumstances, those exemptions and provisions of nonapplicability are also hereby adopted 

27 under this Rule. However, this provision shall not be interpreted so as to limit information that may be requested 

28 from the owner or operator by the Director as specified in 40 CFR 51.166(n)(2).

29 (f) 40 CFR 51.166(w)(10)(iv)(a) is changed to read: "If the emissions level calculated in accordance with Paragraph 

30 (w)(6) of this Section is equal to or greater than 80 percent of the PAL [plant wide applicability limit] level, the 

31 Director shall renew the PAL at the same level." 40 CFR 51.166(w)(10)(iv)(b) is not incorporated by reference.

32 (g) 15A NCAC 02Q .0102 and .0302 are not applicable to any source to which this Rule applies. The owner or 

33 operator of the sources to which this Rule applies shall apply for and receive a permit as required in 15A NCAC 

34 02Q .0300 or .0500.

35 (h) When a particular source or modification becomes a major stationary source or major modification solely by 

36 virtue of a relaxation in any enforceable limitation which was established after August 7, 1980, on the capacity of 

37 the source or modification to emit a pollutant, such as a restriction on hours of operation, then the provisions of this 
II-3

1 Rule shall apply to the source or modification as though construction had not yet begun on the source or 

2 modification.

3 (i) The provisions of 40 CFR 52.21(r)(2) regarding the period of validity of approval to construct are incorporated 

4 by reference except that the term "Administrator" is replaced with "Director".

5 (j) Permits may be issued based on innovative control technology as set forth in 40 CFR 51.166(s)(1) if the 

6 requirements of 40 CFR 51.166(s)(2) have been met, subject to the condition of 40 CFR 51.166(s)(3), and with the 

7 allowance set forth in 40 CFR 51.166(s)(4). 

8 (k) A permit application subject to this Rule shall be processed in accordance with the procedures and requirements 

9 of 40 CFR 51.166(q). Within 30 days of receipt of the application, applicants shall be notified if the application is 

10 complete as to initial information submitted. Commencement of construction before full prevention of significant 

11 deterioration approval is obtained constitutes a violation of this Rule.

12 (l) Approval of an application with regard to the requirements of this Rule shall not relieve the owner or operator of 

13 the responsibility to comply fully with applicable provisions of other rules of this Subchapter or Subchapter 02Q of 

14 this Title and any other requirements under local, state, or federal law.

15 (m) If the owner or operator of a source is using projected actual emissions to avoid applicability of prevention of 

16 significant deterioration requirements, the owner or operator shall notify the Director of the modification before 

17 beginning actual construction. The notification shall include:

18 (1) a description of the project; 

19 (2) identification of sources whose emissions could be affected by the project; 

20 (3) the calculated projected actual emissions and an explanation of how the projected actual emissions 

21 were calculated, including identification of emissions excluded by 40 CFR 51.166(b)(40)(ii)(c);

22 (4) the calculated baseline actual emissions and an explanation of how the baseline actual emissions 

23 were calculated; and

24 (5) any netting calculations if applicable.

25 If upon reviewing the notification, the Director finds that the project will cause a prevention of significant 

26 deterioration evaluation, then the Director shall notify the owner or operator of his findings. The owner or operator 

27 shall not make the modification until it has received a permit issued pursuant to this Rule. If a permit revision is not 

28 required pursuant to this Rule, the owner or operator shall maintain records of annual emissions in tons per year, on 

29 a calendar year basis related to the modifications for 10 years following resumption of regular operations after the 

30 change if the project involves increasing the emissions unit's design capacity or its potential to emit the regulated 

31 NSR pollutant; otherwise these records shall be maintained for five years following resumption of regular operations 

32 after the change. The owner or operator shall submit a report to the Director within 60 days after the end of each 

33 year during which these records must be generated. The report shall contain the items listed in 40 CFR 

34 51.166(r)(6)(v)(a) through (c). The owner or operator shall make the information documented and maintained under 

35 this Paragraph available to the Director or the general public pursuant to the requirements in 40 CFR 

36 70.4(b)(3)(viii).
II-4

1 (n) The references to the Code of Federal Regulations (CFR) in this Rule are incorporated by reference unless a 

2 specific reference states otherwise. The version of the CFR incorporated in this Rule is that published in the Federal 

3 Register June 3, 2010 and effective August 2, 2010 as of July 20, 2011 and does not include any subsequent 

4 amendments or editions to the referenced material. This Rule is applicable as of its effective date in accordance with 

5 40 CFR 51.166(b)(48) and (b)(49)(iv) and (v).

6

7 History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(3); 143-215.107(a)(5); 143-215.107(a)(7); 143-

8 215.108(b); 150B-21.6;

9 Eff. January 28, 2011 pursuant to E.O. 81, Beverly E. Perdue;

10 Pursuant to G.S. 150B-21.3(c), a bill was not ratified by the General Assembly to disapprove this 

11 rule;.

12 Temporary Amendment Eff. December 23, 2011. 2011;

13 Amended Eff. July 1, 2012.

14
CHAPTER III 

REPORT OF PROCEEDINGS 

Introduction 

The Department of Environmental and Natural Resources, Division of Air Quality, held a public 

hearing on March 14, 2012 at 6:00 P.M. in the Greensquare Building, Training Room (#1210), 

217 West Jones St., Raleigh, NC 27603. 

The hearing considered the proposed amendment to Rule 15A NCAC 02D .0544, Prevention of 

Significant Deterioration Requirements for Greenhouse Gases. 

 The proposed effective date for these rules is projected to be July 1, 2012. 

A public notice announcing this hearing was mailed to each person on the official mailing list for 

rule-making hearings. The public notice was also published in the North Carolina Register at 

least 20 days before the public hearing and in the Charlotte Observer, the Wilmington Star News, 

the Asheville Citizen Times, the Winston Salem Journal, and the Raleigh News and Observer at 

least 30 days prior to the public hearing. 

III-1
ENVIRONMENTAL MANAGEMENT COMMISSION

NORTH CAROLINA

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

Stephen T. Smith

Chairman

Charles Peterson

Vice Chairman

Beverly Eaves Perdue, Governor

Dee Freeman, Secretary Christopher J. Ayers

Donnie Brewer

Marvin S. Cavanaugh, Sr.

Thomas F. Cecich

Marion Deerhake

Tom Ellis

William L. Hall, Jr.

Steve P. Keen

Ernest W. Larkin

Kevin Martin

David H. Moreau

Jeffrey V. Morse

Darryl D. Moss

David B. Peden

Dickson Phillips Ill

Clyde E. Smith, Jr.

Steve W. Tedder

January 24, 2012

MEMORANDUM

To: Christopher J. Ayers

From: Stephen T. Smith

Subject: Hearing Officer Appointment

A public hearing has been scheduled for March 14, 2012 at 6:00 p.m. in the Training Room

(#1210) in the Greensquare Building in Raleigh to receive public comments on amendments to the

Prevention of Significant Deterioration (PSD) for Greenhouse Gases rule. The purpose of the

amendments is to incorporate into the state rules the recent federal deferral from consideration of

carbon dioxide (CO2) emissions from bioenergy and other biogenic sources for purposes of the PSD

permitting program. The attached public notice describes the hearing's purpose.

ami hereby cippninting vrni to CP1'IIP ac h,-gri ng nffir‘ ,-r fnr this 1-1,-ring PlesP rPo-ive relevant

public comment and report your findings and recommendations to the Environmental Management

Commission. Ms. Joelle Burleson will provide staff support for you.

If you have any questions, please feel free to contact Joelle Burleson at (919) 707-8720, or me.

SCH/jb

Attachment

cc: Sheila Holman

Lois Thomas

Hearing Record File

An Equal Opportunity Affirmative Action Employer

III-2

ENVIRONMENTAL MANAGEMENT COMMISSION

NORTH CAROLINA

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

Stephen 1. Smith

Chairman

Charles Peterson

Vice Chairman

To:

From:

Beverly Eaves Perdue, Governor

Dee Freeman, Secretary

January 24, 2012

MEMORANDUM

Christopher J. Ayers , ~_

Stephen T. Smith C.......

Subject: Hearing Officer Appointment

Christopher J. Ayers

Donnie Brewer

Marvin S. Cavanaugh, Sr.

Thomas F. Cecich

Marion Deerhake

Tom Ellis

William L. Hall, Jr.

Steve P. Keen

Ernest W. Larkin

Kevin Martin

David H. Moreau

Jeffrey V. Morse

Darryl D. Moss

David B. Peden

Dickson Phillips III

Clyde E. Smith, Jr.

Steve W. Tedder

A public hearing has been scheduled for March 14,2012 at 6:00 p.m. in the Training Room

(#1210) in the Greensquare Building in Raleigh to receive public comments on amendments to the

Prevention of Significant Deterioration (PSD) for Greenhouse Gases rule. The purpose ofthe

amendments is to incorporate into the state rules the recent federal deferral from consideration of

carbon dioxide (C02) emissions from bioenergy and other biogenic sources for purposes ofthe PSD

permitting program. The attached public notice describes the hearing's purpose.

I am hereby appointing you to serve as hearing officer for this hearing. Please receive all relevant

public comment and report your findings and recommendations to the Environmental Management

Commission. Ms. Joe1le Burleson will provide staffsupport for you.

If you have any questions, please feel free to contact Joelle Burleson at (919) 707-8720, or me.

SCH/jb

Attachment

cc: Sheila Holman

Lois Thomas

Hearing Record File.

An Equal Opportunity Affirmative Action Employer
ENVIRONMENTAL MANAGEMENT COMMISSION

NORTH CAROLINA

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

Stephen T. Smith

Chairman

Charles Peterson

Vice Chairman

Beverly Eaves Perdue, Governor

Dee Freeman, Secretary Christopher J. Ayers

Donnie Brewer

Marvin S. Cavanaugh, Sr.

Thomas F. Cecich

Marion Deerhake

Tom Ellis

William L. Hall, Jr.

Steve P. Keen

Ernest W. Larkin

Kevin Martin

David H. Moreau

Jeffrey V. Morse

Darryl D. Moss

David B. Peden

Dickson Phillips Ill

Clyde E. Smith, Jr.

Steve W. Tedder

March 13, 2012

MEMORANDUM

To: Donnie W. Brewer

From: Stephen T. Smith

Subject: Hearing Officer Appointment

A public hearing has been scheduled for March 14, 2012 at 6:00 p.m. in the Training Room

(#1210) in the Greerisquare Building in Raleigh to receive public comments on amendments to the

Prevention of Significant Deterioration (PSD) for Greenhouse Gases rule, The purpose of the

amendments is to incorporate into the state rules the recent federal deferral from consideration of

carbon dioxide (CO2 ) emissions from bioenergy and other biogenic sources for purposes of the PSD

permitting program. The attached public notice describes the hearing's purpose.

I am hereby appointing you to serve as hearing officer for this hearing. Please receive all relevant

public comment and report your findings and recommendations to the Environmental Management

Commission. Ms. Joelle Burleson will provide staff support for you.

If you have any questions, please feel free to contact Joelle Burleson at (919) 707-8720, or me.

SCH/jb

Attachment

cc: Sheila Holman

Lois Thomas

Hearing Record File

An Equal Opportunity Affirmative Action Employer

III-3

ENVIRONMENTAL MANAGEMENT COMMISSION

NORTH CAROLINA

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

Stephen T. Smith

Chairman

Charles Peterson

Vice Chairman

Beverly Eavec Perdue, Governor

Dee Freeman, Secretary

March 13,2012

MEMORANDUM

Christopher J. Ayers

Donnie Brewer

Marvin S. Cavanaugh, Sr.

Thomas F. Cecich

Marion Deerhake

Tom Ellis

William L. Hall, Jr.

Steve P. Keen

Ernest W. Larkin

Kevin Martin

David H. Moreau

Jeffrey V. Morse

Darryl D. Moss

David B. Peden

Dickson Phillips III

Clyde E. Smith, Jr.

Steve W. Tedder

To:

From:

Donnie W. Brewer r1i

Stephen T. Smith

Subject: Hearing Officer Appointment

A public hearing has been scheduled for March 14,2012 at 6:00 p.m. in the Training Room

(#1210) in the Greensquare Building in Raleigh to receive public comments on amendments to the

Prevention of Significant Deterioration (PSD) for Greenhouse Gases rule. The purpose of the

amendments is to incorporate into the state rules the recent federal deferral from consideration of

carbon dioxide (C02) emissions from bioenergy and other biogenic sources for purposes of the PSD

permitting program. The attached public notice describes the hearing's purpose.

I am hereby appointing you to serve as hearing officer for this hearing. Please receive all relevant

public comment and repmt your findings and recommendations to the Environmental Management

Commission. Ms. Joetle Burleson will provide staff support for you.

If you have any questions, please feel free to contact Joetle Burleson at (919) 707-8720, or me.

SCH/jb

Attachment

cc: Sheila Holman

Lois Thomas

Hearing Record File

An Equal Opportunity Affirmative Action Employer
NORTH CAROLINA ENVIRONMENTAL MANAGEMENT COMMISSION

PUBLIC NOTICE

Notice is hereby given for one public hearing to be heard by the North Carolina

Department of Environment and Natural Resources, Division of Air Quality concerning

the proposed amendments to air quality rules.

PURPOSE:

DATES AND LOCATION:

COMMENT PROCEDURES:

To receive comments on amendments to 15A NCAC

020 .0544, Prevention Of Significant Deterioration

(PSD) Requirements For Greenhouse Gases, to defer

application of the PSD and Title V permitting

requirements to biogenic carbon dioxide (C02)

emissions from bioenergy and other biogenic

stationary sources for three years, as promulgated by

United States Environmental Protection Agency

(USEPA) on July 20,2011 (76 FR 43490).

The Environmental Management Commission (EMC)

is taking comment on the economic assessment.

Currently the economic assessment only addresses

costs and benefits of the affected sources. The EMC

requests information relative to the costs and benefits

to all parties resulting from the proposed action, in

particular, human health effects and impacts to

ecosystem services associated with variation in

carbon dioxide and other pollutant emissions from

biomass sources.

NOTE: The proposed amendments considered in this

hearing, if adopted, will be effective statewide and

submitted to the USEPA to be included in the State

Implementation Plan (SIP); if they are later adopted

by a local air pollution control agency, then that

agency will enforce them in its area of jurisdiction.

March 14,2012,6:00 P.M.

Training Room (#1210), Greensquare Building,

217 West Jones Street, Raleigh, NC

All persons interested in these matters are invited to

attend the public hearings. Any person desiring to

comment is requested to submit a written

statement for inclusion in the record of

proceedings at the public hearing. The hearing

officer may limit oral presentation lengths if many

people want to speak. The hearing record will remain

open until April 2, 2012 to receive additional written

III-4

NORTH CAROLINA ENVIRONMENTAL MANAGEMENT COMMISSION

PUBLIC NOTICE

Notice is hereby given for one public hearing to be heard by the North Carolina

Department of Environment and Natural Resources, Division of Air Quality concerning

the proposed amendments to air quality rules.

PURPOSE:

DATES AND LOCATION:

COMMENT PROCEDURES:

To receive comments on amendments to 15A NCAC

020 .0544, Prevention Of Significant Deterioration

(PSD) Requirements For Greenhouse Gases, to defer

application of the PSD and Title V permitting

requirements to biogenic carbon dioxide (C02)

emissions from bioenergy and other biogenic

stationary sources for three years, as promulgated by

United States Environmental Protection Agency

(USEPA) on July 20,2011 (76 FR 43490).

The Environmental Management Commission (EMC)

is taking comment on the economic assessment.

Currently the economic assessment only addresses

costs and benefits of the affected sources. The EMC

requests information relative to the costs and benefits

to all parties resulting from the proposed action, in

particular, human health effects and impacts to

ecosystem services associated with variation in

carbon dioxide and other pollutant emissions from

biomass sources.

NOTE: The proposed amendments considered in this

hearing, if adopted, will be effective statewide and

submitted to the USEPA to be included in the State

Implementation Plan (SIP); if they are later adopted

by a local air pollution control agency, then that

agency will enforce them in its area of jurisdiction.

March 14,2012,6:00 P.M.

Training Room (#1210), Greensquare Building,

217 West Jones Street, Raleigh, NC

All persons interested in these matters are invited to

attend the public hearings. Any person desiring to

comment is requested to submit a written

statement for inclusion in the record of

proceedings at the public hearing. The hearing

officer may limit oral presentation lengths if many

people want to speak. The hearing record will remain

open until April 2, 2012 to receive additional written
INFORMATION:

statements. To be included, the statement must be

received by the Division by April 2, 2012.

Copies of the proposed rule changes may be

downloaded at http://daq .state.nc.us/Rules/Hearing/

Copies of the proposals may also be reviewed at the

regional offices of the North Carolina Department of

Environment and Natural Resources, Division of Air

Quality, located at the following cities :

Asheville

Fayetteville

Mooresville

Raleigh

Washington

Wilmington

Winston-Salem

8281296-4500

910/433-3300

704/663-1699

919/791 -4200

252/946-6481

910/796-7215

336/771-5000

DATE:

Comments should be sent to and additional

information concerning the hearings or the proposals

may be obtained by contacting:

Ms. Joelle Burleson

Division of Air Quality

1641 Mail Service Center

Raleigh, North Carolina 27699-1641

(919) 707-8720 Phone/Fax

joelle.burleson@ncd~n r.gov

Sheila Holman,

DAQ Director

III-5

INFORMATION:

statements. To be included, the statement must be

received by the Division by April 2,2012.

Copies of the proposed rule changes may be

downloaded at http://daq.state.nc.us/Rules/Hearing/

Copies of the proposals may also be reviewed at the

regional offices of the North Carolina Department of

Environment and Natural Resources, Division of Air

Quality, located at the following cities:

Asheville

Fayetteville

Mooresville

Raleigh

Washington

Wilmington

Winston-Salem

828/296-4500

910/433-3300

704/663-1699

919/791-4200

252/946-6481

910/796-7215

336/771-5000

DATE:~

Comments should be sent to and additional

information concerning the hearings or the proposals

may be obtained by contacting:

Ms. Joelle Burleson

Division of Air Quality

1641 Mail Service Center

Raleigh, North Carolina 27699-1641

(919) 707-8720 Phone/Fax

joelie.bu rleson@ncd~n r.gov

Sheila Holman,

DAQ Director
Transcript

A transcript of the March 14, 2012 hearing has not been prepared; however, an audio 

recording of the proceeding will be kept on file with the Division of Air Quality for one 

year from the date of the final actions by the Environmental Management Commission. 

A list of those attending the hearing as follows: 

Hearing Officer: Mr. Donnie Brewer, member of the Environmental Management 

Commission 

Staff Members at the Raleigh hearing: 

 

Ms. Joelle Burleson, DAQ, DENR 

Mr. Glenn Sappie, DAQ, DENR 

Mr. Patrick Knowlson, DAQ, DENR 

Mr. Vladimir Zaytsev, DAQ, DENR 

Ms. Sheila Green, DENR 

No members of the General Public appeared at the hearing. 

III-6
CHAPTER IV 

EXHIBITS 

EXHIBIT PAGE

Proposed Regulations as Published in the North Carolina Register and Presented at the 

Hearing

IV-2

Hearing Officer Comments at the Public Hearing IV-6

 

IV-1
PROPOSED RULES 

26:15 NORTH CAROLINA REGISTER FEBRUARY 1, 2012 

1089 

(d) If an instructor does not teach at least 12 hours in each of the 

topic areas for which certification is granted, the certification 

shall not be renewed for those topics in which the instructor 

failed to successfully teach. Any specialized instructor training 

courses previously accepted by the Commission for purposes of 

certification shall no longer be recognized if the instructor does 

not successfully teach at least eight hours in each of the 

specialized topics during the three year period for which 

certification was granted. Upon application for re-certification, 

such applicants shall be required to meet the requirements of 12 

NCAC 09G .0310. 

Authority G.S. 17C-6. 

SECTION .0600 - PROFESSIONAL CERTIFICATE 

PROGRAM 

12 NCAC 09G .0602 GENERAL PROVISIONS 

(a) In order to be eligible for one or more of the professional 

awards, an officer shall first meet the following preliminary 

qualifications, except as provided for in 12 NCAC 09G 

.0602(a)(4): 

(1) The officer shall presently hold general 

corrections officer certification. A person 

serving under a probationary certification is 

not eligible for consideration. An officer 

subject to suspension or revocation 

proceedings or under investigation for possible 

decertification action by the Commission, the 

Company and Campus Police Program, or the 

North Carolina Sheriffs' Education and 

Training Standards Commission shall not be 

eligible for professional awards for the 

pendency of the proceeding.

(2) The officer shall hold general certification 

with the Commission in one of the following 

categories: 

(A) correctional officer; 

(B) probation/parole officer; or 

(C) probation/parole officer-intermediate. 

(3) The officer shall be a permanent, full-time, 

paid employee of the North Carolina 

Department of Correction. 

(4) Permanent, paid employees of the Department 

of Correction who have successfully 

completed a Commission-accredited

Commission-certified corrections officer basic 

training program and have previously held 

general certification as specified in 12 NCAC 

09G .0602(a)(1) and 12 NCAC 09G 

.0602(a)(2), but are presently, by virtue of 

promotion or transfer, serving in positions not 

subject to certification are eligible to 

participate in the professional certificate 

program. Eligibility for this exception 

requires continuous employment with the 

Department of Correction from the date of 

promotion or transfer from a certified position 

to the date of application for a professional 

certificate. 

(b) Awards are based upon a formula which combines formal 

education, corrections training, and actual experience as a 

corrections officer. Points are computed in the following 

manner: 

(1) each semester hour of college credit shall 

equal one point and each quarter hour shall 

equal two-thirds of a point; 

(2) 20 classroom hours of Commission-approved 

corrections training shall equal one point; 

(3) only experience as a permanent, paid 

employee of the North Carolina Department of 

Correction or the equivalent experience as 

determined by the Commission shall be 

acceptable of consideration. 

Point requirements for each award are described in 12 NCAC 

09G .0604 and .0605. 

(c) Certificates shall be awarded in an officer's area of expertise 

only. The State Corrections Certificate is appropriate for 

permanent, paid corrections employees employed by the North 

Carolina Department of Correction. 

Authority G.S. 17C-6. 

TITLE 15A – DEPARTMENT OF ENVIRONMENT AND 

NATURAL RESOURCES 

Notice is hereby given in accordance with G.S. 150B-21.2 that 

the Environmental Management Commission intends to amend 

the rule cited as 15A NCAC 02D .0544. 

Link to agency website pursuant to G.S. 150B-19.1(c): 

http://www.ncair.org/rules/hearing/ 

Proposed Effective Date: July 1, 2012 

Public Hearing: 

Date: March 14, 2012 

Time: 6:00 p.m. 

Location: NC DENR, Greensquare Building, Training Room 

#1210, 217 West Jones Street, Raleigh, NC 27603 

Reason for Proposed Action: To amend 15A NCAC 02D 

.0544, Prevention of Significant Deterioration (PSD) 

Requirements for Greenhouse Gases, to defer application of the 

PSD and Title V permitting requirements to biogenic carbon 

dioxide (CO2) emissions from bioenergy and other biogenic 

stationary sources for three years, as promulgated by United 

States Environmental Protection Agency (USEPA) on July 20, 

2011 (76 FR 43490). The Environmental Management 

Commission (EMC) is taking comment on the economic 

assessment. Currently the economic assessment only addresses 

costs and benefits of the affected sources. The EMC requests 

information relative to the costs and benefits to all parties 

resulting from the proposed action, in particular, human health 

effects and impacts to ecosystem services associated with 

IV-2
PROPOSED RULES 

26:15 NORTH CAROLINA REGISTER FEBRUARY 1, 2012 

1090 

variation in carbon dioxide and other pollutant emissions from 

biomass sources. 

Procedure by which a person can object to the agency on a 

proposed rule: If you have any objections to the proposed rule, 

please mail a letter including your specific reasons to: Ms. 

Joelle Burleson, Division of Air Quality, 1641 Mail Service 

Center, Raleigh, NC 27699-1541,

Comments may be submitted to: Joelle Burleson, Division of 

Air Quality, 1641 Mail Service Center, Raleigh, NC 27699-

1641; phone (919) 707-8720; fax (919) 707-8720; email 

joelle.burleson@ncdenr.gov 

Comment period ends: April 2, 2012

Procedure for Subjecting a Proposed Rule to Legislative 

Review: If an objection is not resolved prior to the adoption of 

the rule, a person may also submit written objections to the 

Rules Review Commission after the adoption of the Rule. If the 

Rules Review Commission receives written and signed 

objections after the adoption of the Rule in accordance with G.S. 

150B-21.3(b2) from 10 or more persons clearly requesting 

review by the legislature and the Rules Review Commission 

approves the rule, the rule will become effective as provided in 

G.S. 150B-21.3(b1). The Commission will receive written 

objections until 5:00 p.m. on the day following the day the 

Commission approves the rule. The Commission will receive 

those objections by mail, delivery service, hand delivery, or 

facsimile transmission. If you have any further questions 

concerning the submission of objections to the Commission, 

please call a Commission staff attorney at 919-431-3000. 

Fiscal impact (check all that apply). 

 State funds affected 

 Environmental permitting of DOT affected 

 Analysis submitted to Board of Transportation 

 Local funds affected 

 Date submitted to OSBM: October 28, 2011

 Substantial economic impact (≥$500,000) 

 Approved by OSBM 

 No fiscal note required 

CHAPTER 02 - ENVIRONMENTAL MANAGEMENT 

COMMISSION 

SUBCHAPTER 02D - AIR POLLUTION CONTROL 

REQUIREMENTS 

SECTION .0500 - EMISSION CONTROL STANDARDS 

15A NCAC 02D .0544 PREVENTION OF SIGNIFICANT 

DETERIORATION REQUIREMENTS FOR 

GREENHOUSEGASES 

(a) The purpose of this Rule is to implement a program for the 

prevention of significant deterioration of air quality for 

greenhouse gases as required by 40 CFR 51.166. For purposes 

of greenhouse gases, the provisions of this Rule shall apply 

rather than the provisions of Rule .0530 of this Section. For all 

other regulated NSR pollutants, the provisions of Rule .0530 of 

this Section apply. 

(b) For the purposes of this Rule, the definitions contained in 40 

CFR 51.166(b) and 40 CFR 51.301 shall apply except the 

definition of "baseline actual emissions." "Baseline actual 

emissions" means the rate of emissions, in tons per year, of a 

regulated new source review (NSR) pollutant, as determined in 

accordance with Subparagraphs (1) through (3) of this 

Paragraph: 

(1) For an existing emissions unit, baseline actual 

emissions means the average rate, in tons per 

year, at which the emissions unit actually 

emitted the pollutant during any consecutive 

24-month period selected by the owner or 

operator within the 5-year period immediately 

preceding the date that a complete permit 

application is received by the Division for a 

permit required under this Rule. The Director 

shall allow a different time period, not to 

exceed 10 years immediately preceding the 

date that a complete permit application is 

received by the Division, if the owner or 

operator demonstrates that it is more 

representative of normal source operation. For 

the purpose of determining baseline actual 

emissions, the following shall apply: 

(A) The average rate shall include 

fugitive emissions to the extent 

quantifiable, and emissions associated 

with startups, shutdowns, and 

malfunctions; 

(B) The average rate shall be adjusted 

downward to exclude any noncompliant emissions that occurred 

while the source was operating above 

any emission limitation that was 

legally enforceable during the 

consecutive 24-month period; 

(C) For an existing emission unit (other 

than an electric utility steam 

generating unit), the average rate 

shall be adjusted downward to 

exclude any emissions that would 

have exceeded an emission limitation 

with which the major stationary 

source must currently comply. 

However, if the State has taken credit 

in an attainment demonstration or 

maintenance plan consistent with the 

requirements of 40 CFR 

51.165(a)(3)(ii)(G) for an emission 

limitation that is part of a maximum 

achievable control technology 

standard that the Administrator 

proposed or promulgated under part 

63 of the Code of Federal 

Regulations, the baseline actual 

emissions shall be adjusted to account 

for such emission reductions; 

IV-3
PROPOSED RULES 

26:15 NORTH CAROLINA REGISTER FEBRUARY 1, 2012 

1091 

(D) For an electric utility steam 

generating unit, the average rate shall 

be adjusted downward to reflect any 

emissions reductions under G.S. 143-

215.107D and for which cost 

recovery is sought pursuant to G.S. 

62-133.6; 

(E) For a regulated NSR pollutant, when 

a project involves multiple emissions 

units, only one consecutive 24-month 

period shall be used to determine the 

baseline actual emissions for all the 

emissions units being changed. A 

different consecutive 24-month 

period for each regulated NSR 

pollutant can be used for each 

regulated NSR pollutant; and 

(F) The average rate shall not be based on 

any consecutive 24-month period for 

which there is inadequate information 

for determining annual emissions, in 

tons per year, and for adjusting this 

amount if required by Parts (B) and 

(C) of this Subparagraph; 

(2) For a new emissions unit, the baseline actual 

emissions for purposes of determining the 

emissions increase that will result from the 

initial construction and operation of such unit 

shall equal zero; and thereafter, for all other 

purposes, shall equal the unit's potential to 

emit; and 

(3) For a plantwide applicability limit (PAL) for a 

stationary source, the baseline actual emissions 

shall be calculated for existing emissions units 

in accordance with the procedures contained in 

Subparagraph (1) of this Paragraph and for a 

new emissions unit in accordance with the 

procedures contained in Subparagraph (2) of 

this Paragraph. 

(c) In the definition of "net emissions increase," the reasonable 

period specified in 40 CFR 51.166(b)(3)(ii) shall be seven years. 

(d) The limitation specified in 40 CFR 51.166(b)(15)(ii) shall 

not apply. 

(e) Major stationary sources and major modifications shall 

comply with the requirements contained in 40 CFR 51.166(i) 

and (a)(7) and by extension in 40 CFR 51.166(j) through (o) and 

(w). The transition provisions allowed by 40 CFR 52.21 

(i)(11)(i) and (ii) and (m)(1)(vii) and (viii) are hereby adopted 

under this Rule. The minimum requirements described in the 

portions of 40 CFR 51.166 referenced in this Paragraph are 

hereby adopted as the requirements to be used under this Rule, 

except as otherwise provided in this Rule. Wherever the 

language of the portions of 40 CFR 51.166 referenced in this 

Paragraph speaks of the "plan," the requirements described 

therein shall apply to the source to which they pertain, except as 

otherwise provided in this Rule. Whenever the portions of 40 

CFR 51.166 referenced in this Paragraph provide that the State 

plan may exempt or not apply certain requirements in certain 

circumstances, those exemptions and provisions of 

nonapplicability are also hereby adopted under this Rule. 

However, this provision shall not be interpreted so as to limit 

information that may be requested from the owner or operator by 

the Director as specified in 40 CFR 51.166(n)(2). 

(f) 40 CFR 51.166(w)(10)(iv)(a) is changed to read: "If the 

emissions level calculated in accordance with Paragraph (w)(6) 

of this Section is equal to or greater than 80 percent of the PAL 

[plant wide applicability limit] level, the Director shall renew the 

PAL at the same level." 40 CFR 51.166(w)(10)(iv)(b) is not 

incorporated by reference. 

(g) 15A NCAC 02Q .0102 and .0302 are not applicable to any 

source to which this Rule applies. The owner or operator of the 

sources to which this Rule applies shall apply for and receive a 

permit as required in 15A NCAC 02Q .0300 or .0500. 

(h) When a particular source or modification becomes a major 

stationary source or major modification solely by virtue of a 

relaxation in any enforceable limitation which was established 

after August 7, 1980, on the capacity of the source or 

modification to emit a pollutant, such as a restriction on hours of 

operation, then the provisions of this Rule shall apply to the 

source or modification as though construction had not yet begun 

on the source or modification. 

(i) The provisions of 40 CFR 52.21(r)(2) regarding the period of 

validity of approval to construct are incorporated by reference 

except that the term "Administrator" is replaced with "Director". 

(j) Permits may be issued based on innovative control 

technology as set forth in 40 CFR 51.166(s)(1) if the 

requirements of 40 CFR 51.166(s)(2) have been met, subject to 

the condition of 40 CFR 51.166(s)(3), and with the allowance set 

forth in 40 CFR 51.166(s)(4). 

(k) A permit application subject to this Rule shall be processed 

in accordance with the procedures and requirements of 40 CFR 

51.166(q). Within 30 days of receipt of the application, 

applicants shall be notified if the application is complete as to 

initial information submitted. Commencement of construction 

before full prevention of significant deterioration approval is 

obtained constitutes a violation of this Rule. 

(l) Approval of an application with regard to the requirements of 

this Rule shall not relieve the owner or operator of the 

responsibility to comply fully with applicable provisions of other 

rules of this Subchapter or Subchapter 02Q of this Title and any 

other requirements under local, state, or federal law. 

(m) If the owner or operator of a source is using projected actual 

emissions to avoid applicability of prevention of significant 

deterioration requirements, the owner or operator shall notify the 

Director of the modification before beginning actual 

construction. The notification shall include: 

(1) a description of the project; 

(2) identification of sources whose emissions 

could be affected by the project; 

(3) the calculated projected actual emissions and 

an explanation of how the projected actual 

emissions were calculated, including 

identification of emissions excluded by 40 

CFR 51.166(b)(40)(ii)(c); 

(4) the calculated baseline actual emissions and an 

explanation of how the baseline actual 

emissions were calculated; and 

(5) any netting calculations if applicable. 

IV-4
PROPOSED RULES 

26:15 NORTH CAROLINA REGISTER FEBRUARY 1, 2012 

1092 

If upon reviewing the notification, the Director finds that the 

project will cause a prevention of significant deterioration 

evaluation, then the Director shall notify the owner or operator 

of his findings. The owner or operator shall not make the 

modification until it has received a permit issued pursuant to this 

Rule. If a permit revision is not required pursuant to this Rule, 

the owner or operator shall maintain records of annual emissions 

in tons per year, on a calendar year basis related to the 

modifications for 10 years following resumption of regular 

operations after the change if the project involves increasing the 

emissions unit's design capacity or its potential to emit the 

regulated NSR pollutant; otherwise these records shall be 

maintained for five years following resumption of regular 

operations after the change. The owner or operator shall submit 

a report to the Director within 60 days after the end of each year 

during which these records must be generated. The report shall 

contain the items listed in 40 CFR 51.166(r)(6)(v)(a) through (c). 

The owner or operator shall make the information documented 

and maintained under this Paragraph available to the Director or 

the general public pursuant to the requirements in 40 CFR 

70.4(b)(3)(viii). 

(n) The references to the Code of Federal Regulations (CFR) in 

this Rule are incorporated by reference unless a specific 

reference states otherwise. The version of the CFR incorporated 

in this Rule is that published in the Federal Register June 3, 2010 

and effective August 2, 2010 as of July 20, 2011 and does not 

include any subsequent amendments or editions to the 

referenced material. This Rule is applicable as of its effective 

date in accordance with 40 CFR 51.166(b)(48) and (b)(49)(iv) 

and (v). 

Authority G.S. 143-215.3(a)(1); 143-215.107(a)(3); 143-

215.107(a)(5); 143-215.107(a)(7); 143-215.108(b); 150B-21.6. 

IV-5
1

Hearing Officer's Suggested Hearing Comments 

INTRODUCTION

[Hearing officer]: 

 Good evening ladies and gentlemen. My name is Donnie Brewer. I am a member of the 

North Carolina Environmental Management Commission. My role as hearing officer is to listen 

to all relevant comment on these proceedings and report them to the full commission. Sitting 

with me is Ms. Joelle Burleson. She is with the North Carolina Division of Air Quality, Planning 

Section. 

 Some of the staff from the Division of Air Quality are here to assist. Ms. Burleson, please 

introduce the staff present. 

[Ms. Burleson] (Introduces staff) 

[Hearing officer]: 

 This evening we are conducting a public hearing to receive comments concerning 

amendments to 15A NCAC 02D .0544, Prevention Of Significant Deterioration (PSD) 

Requirements For Greenhouse Gases. This hearing will be held according to the North Carolina 

Administrative Procedures Act. The public notice for these hearings has been advertised in the 

North Carolina Register and five newspapers in the state. Copies of the notice have been sent to 

those on the official DAQ mailing list. I will enter the public notice and the proposed 

amendments and adoptions into the hearing record without reading them at this time. 

 Any person desiring to comment is requested to submit a written statement for inclusion into 

the hearing record. Once called to speak, please come to the podium and state your name 

clearly, identify the rule or rules you are commenting on, and whom you represent. 

IV-6
2

[Hearing]:

 I will now open the hearing and take relevant comments on amendments to 15A NCAC 02D 

.0544. 

 On March 21, 2011, the United States Environmental Protection Agency proposed to defer 

application of the prevention of significant deterioration (PSD) to biogenic carbon dioxide 

emissions from bioenergy and other biogenic stationary sources for three years. The deferral was 

promulgated on July 20, 2011 (76 FR 43490). 

 This proposed rule amendments would implement EPA’s deferral for biogenic carbon dioxide 

emissions as part of the State’s PSD program for three years. Under the proposal, biogenic 

carbon dioxide emissions would not be considered in determining whether a source meets PSD 

and Title V applicability thresholds. The proposed deferral applies only to carbon dioxide 

emissions and does not affect non-greenhouse gas or other greenhouse gas emissions. 

 The Environmental Management Commission is also taking comment on the economic 

assessment. Currently the economic assessment only addresses costs and benefits of the affected 

sources. The EMC requests information relative to the costs and benefits to all parties resulting 

from the proposed action, in particular, human health effects and impacts to ecosystem services 

associated with variation in carbon dioxide and other pollutant emissions from biomass sources. 

{optional script if there are a large number of speakers} 

-------------------------------------------------------------------------------------------------------------------- 

[Hearing officer]: Optional Time Limit 

Many people have requested to speak at this hearing. Due to time constraints, speakers’ 

presentations will be limited to ___ minutes. Speakers are requested to submit a written 

statement by the close of the comment period for inclusion into the hearing record. 

--------------------------------------------------------------------------------------------------------------------- 

IV-7
3

[Hearing officer]: 

 I will now take any comments that you may have. 

[SPEAKERS] 

[Hearing officer]: 

 Is there anyone else who would like to comment? If there are no more comments, then this 

hearing is closed. The hearing record will remain open until April 2, 2012, for additional written 

comments. 

IV-8
CHAPTER V 

COMMENTS DURING THE COMMENT PERIOD 

INDEX OF COMMENTERS 

NAME REPRESENTING PAGE

Therese Vick Blue Ridge Environmental Defense League V-2

R. Scott Davis United States Environmental Protection Agency V-9

V-1
Blue Ridge Environmental Defense League 

www.BREDL.org 4617 Pearl Rd. Raleigh N.C. 27610 (919) 345-3673 therese.vick@gmail.com

Page 1 of 7

Ms. Joelle Burleson 

Division of Air Quality 

1641 Mail Service Center 

Raleigh NC 27699-1641 

April 1, 2012 

Re: Comments on amendments to 15A NCAC 02D. 0544, Prevention of Significant 

Deterioration (PSD) Requirements for Greenhouse Gases, to defer application of the PSD and 

Title V Permitting requirements to biogenic carbon dioxide (CO2) emissions from bioenergy and 

other biogenic stationary sources for three years as promulgated by United States Environmental 

Protection Agency (USEPA) on July 20, 2011 (76 FR 43490). 

Dear Ms. Burleson: 

On behalf of the Blue Ridge Environmental and our members and Directors across North 

Carolina, I voice our objection to North Carolina’s adoption of this rule. To this, I offer the 

following comments: 

V-2
Blue Ridge Environmental Defense League 

www.BREDL.org 4617 Pearl Rd. Raleigh N.C. 27610 (919) 345-3673 therese.vick@gmail.com

Page 2 of 7

 USEPA is NOT requiring states to adopt their deferral 

 SB 781 has been vetoed, and it is unclear if the veto will be overridden. At this time, 

North Carolina can still promulgate standards stricter than EPA. If SB781‘s veto is

overridden, this whole issue is moot, making this whole process a waste of precious 

funds. The North Carolina Division of Air Quality has jumped the gun. 

 Some facilities are claiming that tire derived fuel and other questionable feedstocks are 

“biomass”, at least in part. Adopting this rule will allow such 

 Controlling Greenhouse gases is critical to the survival of life on this planet 

Additionally, BREDL has observed that new biomass facilities are being proposed in lowincome, minority communities. These areas are traditionally medically underserved. This 

deferral could have the unintended consequence of exacerbating conditions, which 

disproportionately affect People of Color and the poor. 

I am including BREDL comments to US EPA on the initial proposal. They follow these 

comments on the State’s proposed rule starting on page 4 and ending on page 7. I request they be 

entered into the record. 

V-3
Blue Ridge Environmental Defense League 

www.BREDL.org 4617 Pearl Rd. Raleigh N.C. 27610 (919) 345-3673 therese.vick@gmail.com

Page 3 of 7

BREDL appreciates this opportunity to comment. 

Sincerely, 

Therese Vick 

Healthy and Sustainable Communities Coordinator 

V-4
Blue Ridge Environmental Defense League 

www.BREDL.org 4617 Pearl Rd. Raleigh N.C. 27610 (919) 345-3673 therese.vick@gmail.com

Page 4 of 7

Administrator Lisa Jackson 

United States Environmental Protection Agency 

 1200 Pennsylvania Ave. 

Washington, D.C. 20640 

April 30, 2011 

Re: Docket ID No. EPA-HQ- OAR-2011-0083: “Deferral for CO2 Emissions From Bioenergy 

and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V 

Programs: Proposed Rule”

Dear Administrator Jackson: 

On behalf of the directors and members of the Blue Ridge Environmental Defense League 

(BREDL), a regional grassroots organization with members throughout the South, I am writing 

in opposition to the above referenced regulatory deferral of the application of PSD and Title V 

Programs. 

V-5
Blue Ridge Environmental Defense League 

www.BREDL.org 4617 Pearl Rd. Raleigh N.C. 27610 (919) 345-3673 therese.vick@gmail.com

Page 5 of 7

Deferring regulation will in effect be an abrogation of EPA’s charge to protect public health and 

the environment. Political changes and industry pressure risk turning this delay into one similar 

to the seemingly endless process of the “Dioxin Reassessment”—17 years and counting from the 

1994 Draft document. If EPA does grant a three-year deferral, it is crucial to implement a 

moratorium for all facilities with “biogenic” carbon emissions that will fall under the exemption. 

Additionally, EPA must not allow existing biomass facilities to expand during this time, or be 

grandfathered from the greenhouse gas rules. 

Biomass incinerators are inundating the Southern United States. Companies large and small are 

grabbing for federal stimulus dollars and tax breaks, touting their new process as the answer to 

clean energy. The prospect of a three-year delay on these regulations is already leading to a rush 

to site and permit new biomass facilities, which will likely be grandfathered in and unaffected by 

new rules. Some of these companies have never built or operated a facility of this type. Power 

companies are inking contracts with unknown quantities1—some so new they do not even have a 

logo. For example, “Poultry Power USA” is planning a chicken litter biomass facility in 

 

1

Poultry Power USA Press Release

V-6
Blue Ridge Environmental Defense League 

www.BREDL.org 4617 Pearl Rd. Raleigh N.C. 27610 (919) 345-3673 therese.vick@gmail.com

Page 6 of 7

Montgomery County North Carolina. Upon searching the internet, it was discovered that they 

had sponsored a contest for their logo design. 2 

Biomass-to-energy proposals are already creating defacto sacrifice zones. In North Carolina, 

poor communities of color are being targeted by biomass burning facilities. For example, in 

Hertford County, Hertford Renewable Energy is proposing to build a 60mw biomass-fired power 

plant. Hertford County is one of the unhealthiest counties in the state—ranked 91st3—with 20% 

of its residents living in poverty4. Additionally, 65% of Hertford County residents are 

minorities5. Sampson County, where Fibrowatt has a proposed chicken manure incinerator, is 

47% minority, with over 20% of its residents living below the poverty level.6

 Sampson County is 

also unhealthy—ranked 71st.

7

 Finally, in Montgomery County, Poultry Power USA has recently 

 

2

Poultry Power USA Logo Contest

3

Hertford County Health Data

4

 Hertford County Census Data

5

Hertford County Census Data

6

Sampson County Census Data

7

Sampson County Health Data

V-7
Blue Ridge Environmental Defense League 

www.BREDL.org 4617 Pearl Rd. Raleigh N.C. 27610 (919) 345-3673 therese.vick@gmail.com

Page 7 of 7

proposed a chicken manure biomass facility. Close to 40% of the county residents are minority, 

with almost 20% living below the poverty line.8

The South has traditionally been the dumping ground of the nation. EPA is abdicating their 

responsibility to protect public health and the environment, thus enabling the biomass and waste 

industry to target poor and minority communities. 

Thank you for the opportunity to comment. 

Sincerely, 

Therese Vick 

Community Organizer 

Blue Ridge Environmental Defense League 

 

8 Montgomery County Census Data

V-8
V-9

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION 4

ATLANTA FEDERAL CENTER

61 FORSYTH STREET

ATLANTA. GEORGIA 30303-8960

April 2, 2012

Ms. Sheila C. Holman, Director

North Carolina Department of Environment

and Natural Resources

Division of Air Quality

1641 Mail Service Center

Raleigh, North Carolina 27699-1641

Dear Ms. Holman:

Thank you for your letter dated January 31,2012, transmitting a prehearing package regarding

revisions to 15A NCAC 020.0544, Prevention Of Significant Deterioration (PSD) Requirements

For Greenhouse Gases, to defer application ofthe PSD and Title V permitting requirements to

biogenic carbon dioxide (C02) emissions from bioenergy and other biogenic stationary sources

for three years. These revisions were the subject of a public comment period held on March 14,

2012, with written comments due by the close of business on April 2, 2012. We have completed

our review ofthis prehearing submittal and offer no comments at this time.

We look forward to continuing to work with you and your staff. If you have any questions,

please contact Ms. Lynorae Benjamin, Chief, Regulatory Development Section at (404) 562-

9040, or have your staff contact Nacosta C. Ward at (404) 562-9140.

~incerelY'9

~d

,~~:---= .. ~~~.~-z

R. Scott Davis

Chief

Air Planning Branch

Intemet Address (URL) • http://www.epa.gov

Recycled/Recyclable. Printed wrth Vegetable Oil Based Inks on Recycled Paper (Minimum 30% Poslconsumer)
This page is intentionally blank 

V-10
CHAPTER VI 

INDEX OF ATTACHMENTS 

ATTACHMENTS PAGE

Prevention of Significant Deterioration Biogenic CO2 Deferral Economic Analysis VI-2

Federal Register – Deferral for CO2 Emissions From Bioenergy and Other Biogenic 

Sources Under the Prevention of Significant Deterioration (PSD) and Title V 

Programs

VI-22

Background References VI-42

VI-1
11/15/2011 1 

ECONOMIC ANALYSIS 

Prevention of Significant Deterioration Biogenic CO2 Deferral

I. Basic Information 

Contact Information 

1. Division of Air Quality File Number (496)

2. Analyst:

Patrick Knowlson, Environmental Engineer

patrick.knowlson@ncdenr.gov

3. Office 

DENR, Air Quality Planning, Rule Development 

Branch

4. Phone 919-715-0659 (919-707-8711 after 10/21/2011)

5. Comments to Agency Contact

Joelle Burleson, 919/733-1474 (707-8720 after 

10/21/2011)

Joelle.Burleson@ncdenr.gov

6. Title of the Proposed Rule

Prevention of Significant Deterioration for 

Greenhouse Gases

7. Rule Citations 15A NCAC 02D .0544

8. Brief Description of the Proposed Rule 

Changes

Adopt Federal deferral for biogenic CO2 under 

PSD

9. Rule Category Division 1 – Regulatory Behavior

10. Authorizing Statute G.S. 143-215.3(a)(1); 143-215.107(a)(3); 143-

215.107(a)(5); 143-215.107(a)(7); 143-215.108(b); 

150B-21.6;

Screening Analysis 

Rule Actions General Statute Yes 

or 

No

10. Federal Law Certification Required - Does the proposed rule purport 

to implement a federal law requiring a certification statement by the 

rulemaking coordinator? 

NCGS 150B-21(f)(1) No

11. Temporary Rules - Does this rule meet the criteria listed relating to 

temporary rules?

NCGS 150B-21.1 No

12. Emergency Rules - Does this rule meet the criteria relating to 

emergency rules? 

NCGS 150B-21.1(a) No

13. Establishes or Increases Fees - Is the agency required to complied 

with the requirements of G.S. 12-3.1?

NCGS 150B-12-3.1

NCGS 150B-21.3(c1)

No

14. State Funds - Does the proposed rule require the expenditure or 

distribution of funds subject to the Executive Budget Act, Article 1 of 

Chapter 143?

NCGS 150B-21.4(a) Yes

15. NC DOT Analysis - Does the proposed rule affect NC DOT 

environmental permitting that will result in an increased cost? 

NCGS 150B-21.4(a1) No

16. Local Government Unit Funds - Does the proposed rule affect the 

expenditures or revenues of a unit of local government?

NCGS 150B-21.4(b) Yes

17. Substantial Economic Impact Analysis - Federal Rule Exemption -

Does this rule meet the criterion of Federal Exemption?

NCGS 150B21.4(b1) Yes

18. Technical Change - Are only technical changes being incorporated 

such that public notice and rulemaking hearings are not required?

NCGS 150B-21.5 No

19. Repeal of Regulatory Deadwood - Is the rule obsolete? NCGS 150B-2(1b)

NCGS 150B-21.5(b)

No

VI-2
11/15/2011 2 

II. Executive Summary 

This proposed rule change to 15A NCAC 02D .0544, Prevention of Significant Deterioration (PSD) 

for Greenhouse Gases (GHG), would implement a federally-issued deferral for biogenic CO2

emission as part of the State’s PSD program for three years. (See proposed rule text in Appendix 

A.) Under the proposal, biogenic CO2 emissions would not be considered in determining whether a 

source meets PSD and Title V applicability thresholds. The proposed deferral applies only to CO2

emissions and does not affect non-GHG pollutants or other GHGs emitted from combustion of 

biomass fuel. The rule amendment ensures that stationary sources would not have to complete a 

Best Available Control Technology (BACT) analysis for biogenic CO2 and possibly be required to 

install equipment to control emissions during the three year deferral period. It is not in the public 

interest to require stationary sources to incur costs implementing PSD permitting requirements 

before United States Environmental Protection Agency (EPA) completes their review when there 

may be a de-minimis impact on net CO2 levels in the atmosphere. 

Although the biogenic CO2 emissions deferral is optional, a rule amendment is proposed to reflect 

the federal deferral while the uncertainty surrounding the impact of biogenic CO2 emissions and 

how such emissions will be handled in the overall GHG framework is being resolved. Under § 

150B-19.1 (a)(2), an agency shall seek to reduce the burden upon those persons or entities who 

must comply with the rule that is being adopted. Deferring biogenic CO2 emissions will reduce the 

regulatory burden on affected facilities by eliminating biogenic CO2 emissions when determining 

whether a stationary source meets the PSD and Title V applicability thresholds, including those for 

the application of BACT. This proposal conforms to the principles of Executive Order 70 and seeks 

to achieve the regulatory objective in the most cost-effective, timely, and least burdensome method. 

The potential cost saving to the private sector may exceed $5 million annually by the third year of 

the deferral and remain near that level beyond the deferral due to the operation and maintenance 

costs on the control equipment installed during the deferral period. NC Division of Air Quality 

funds may potentially be reduced by approximately $20,000 per year due to the reduction in PSD 

permit application fees. Local governments that operate landfills could be affected if the emissions 

of biogenic CO2 exceed the PSD permitting applicability requirements in the rule. 

With data prepared by the EPA and the Division of Air Quality (DAQ), an estimate of the 

economic impacts on the affected sources can be made. Table 1, Costs and Benefits of Proposed 

Rule Change to Prevention of Significant Deterioration for Greenhouse Gases, summarizes the 

annual impact incurred by all the affected sources.. Annual potential avoided costs/savings, $5 

million by the third year of this analysis, are substantial as defined in the Administrative Procedures 

Act in NC §150B-21.4. Fiscal notes on rules. 

VI-3
11/15/2011 3 

Table 1: Costs and Benefits of Proposed Rule Change to Prevention of Significant Deterioration for 

Greenhouse Gases*

Fiscal Year 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Year Number 0 1 2 3 4 5

Costs 

Loss of State Revenue** $20,000 $20,000 $20,000 $0 $0

Total Costs $0 $20,000 $20,000 $20,000 $0 $0

Benefits 

Private Sector Reduced 

Permit Fees $20,000 $20,000 $20,000 $0 $0

Private Sector Avoided 

BACT Costs $55,000 $55,000 $55,000 $0 $0 

Private Sector Avoided 

Equipment and O&M 

Costs (Appendix D) $1,925,900 $3,637,000 $5,417,900 $5,239,200 $5,339,200 

Total Benefits $0 $2,000,900 $3,712,000 $5,492,900 $5,239,200 $5,339,200 

Net Impact (benefitscosts) $0 $1,980,900 $3,692,000 $5,472,900 $5,239,200 $5,339,200 

Total Impact 

(benefits+costs) $0 $2,020,900 $3,732,000 $5,512,900 $5,239,200 $5,339,200 

5 Year Net Present Value of Net Impact = $16,212,400

5 Year Net Present Value of Total Impact = $16,310,500

* The estimates in this table are based on assumptions listed in Section V and might be overestimating 

potential savings. See Section IX for a discussion of the uncertainties related to these estimates. 

** The cost to the state would be offset by staff time savings related to not having to review permit 

applications and BACT analyses, which are not included in this table. 

III. Background 

On June 3, 2010, EPA published the final Prevention of Significant Deterioration (PSD) and Title V 

Greenhouse Gas Tailoring Rule (herein referred to as the Tailoring Rule; 75 FR 31514), setting 

thresholds for GHG emissions that define when permits under these programs are required for new 

and existing industrial facilities. Beginning January 2, 2011, sources currently subject to PSD or 

Title V permitting programs were required to determine the best available control technology 

(BACT) for their GHG emissions, but only for GHG increases of 75,000 short tons per year (tpy) or 

more of total GHGs, on a carbon dioxide equivalents (CO2e) basis and any increase on a mass 

basis. At that time, no sources would have been subject to CAA permitting requirements due solely 

to GHG emissions. 

The North Carolina Division of Air Quality engaged in rulemaking to ensure that state laws would 

conform with this new federal requirement. On November 18, 2010, the Environmental 

VI-4
11/15/2011 4 

Management Commission adopted 15A NCAC 02D .0544, Prevention of Significant Deterioration 

for Greenhouse Gases, which incorporated the requirements in the federal Tailoring Rule. The rule 

became effective on January 28, 2011 pursuant to Executive Order 81 signed by Governor Beverly 

E. Perdue. In the state rule, beginning July 1, 2011, the PSD permitting requirements will cover 

new construction projects that will emit GHGs of at least 100,000 tpy on a CO2e basis even if they 

do not exceed the permitting thresholds for any other pollutant. Modifications at existing facilities 

that increase GHG emissions by at least 75,000 tpy, and any amount on a mass basis, will be 

subject to permitting requirements, even if they do not significantly increase emissions of any other 

pollutant. Operating permit requirements will, for the first time, apply to sources based on their 

GHG emissions even if they would not apply based on emissions of any other pollutant. Facilities 

that emit at least 100,000 tpy CO2e will be subject to Title V permitting requirements. 

However, United States Environmental Protection Agency (EPA) recently proposed to defer 

application of the PSD and Title V permitting requirements to biogenic carbon dioxide (CO2) 

emissions from bioenergy and other biogenic stationary sources for three years. In the EPA deferral 

promulgation (76 FR 43490), biogenic CO2 emissions are defined as emissions of CO2 from a 

stationary source directly resulting from the combustion or decomposition of biologically-based 

materials other than fossil fuels and mineral sources of carbon. Examples of ‘‘biogenic CO2

emissions’’ include, but are not limited to:

 CO2 generated from the biological decomposition of waste in landfills, wastewater 

treatment or manure management processes; 

 CO2 from the combustion of biogas collected from biological decomposition of waste 

in landfills, wastewater treatment or manure management processes; 

 CO2 from fermentation during ethanol production or other industrial fermentation 

processes; 

 CO2 from combustion of the biological fraction of municipal solid waste or biosolids; 

 CO2 from combustion of the biological fraction of tire-derived fuel; and 

 CO2 derived from combustion of biological material, including all types of wood and 

wood waste, forest residue, and agricultural material. 

Under the proposal, biogenic CO2 emissions would not be considered in determining whether a 

source meets PSD and Title V applicability thresholds. As proposed the deferral applies only to 

CO2 emissions and does not affect non-GHG pollutants or other GHGs emitted from combustion of 

biomass fuel. The EPA has provided an interim guidance document to assist permitting authorities 

in establishing a basis that best available control technology (BACT) for biogenic CO2 emissions at 

stationary sources is the combustion of biomass fuels by itself. The EPA plans on conducting a 

detailed examination of the science associated with biogenic CO2 emissions from stationary sources 

to consider technical issues EPA seeks to resolve to account for biogenic CO2 emissions in 

scientifically sound ways that are manageable in practice. The information gathered will be used in 

a follow-up rulemaking by EPA on how such emissions should be treated in PSD and Title V 

permitting. 

EPA’s future rulemaking is uncertain until EPA completes their review of the scientific and 

technical issues related to accounting for biogenic CO2 emissions. An amendment to the state PSD 

VI-5
11/15/2011 5 

rule for GHG emissions is proposed to reflect the federal deferral while the uncertainty surrounding 

the impact of biogenic CO2 emissions and how such emissions will be handled in the overall GHG 

framework is being resolved. Until EPA’s review is completed, the proposed rule amendment 

ensures that stationary sources would not have to unnecessarily complete a BACT analysis for 

biogenic CO2 and possibly be required to install equipment to control emissions during the three 

year deferral period. 

IV. Description of Proposed Rule Adoption 

15A NCAC 02D .0544 is proposed for amendment to implement the three year deferral period for 

biogenic CO2 emission into the State’s PSD program.

 

V. Methodology and Model Assumptions 

For this analysis, the regulatory baseline is the current rule, 15A NCAC 02D .0544, Prevention of 

Significant Deterioration for Greenhouse Gases. Under the current rule, new stationary sources that 

emit GHGs of at least 100,000 tpy on a CO2e basis and modifications at existing facilities that 

increase GHG emissions by at least 75,000 tpy will be subject to the PSD permitting requirements 

even if they do not exceed the permitting thresholds for any other pollutant. EPA’s three year 

deferral period will eliminate for consideration the CO2 emissions from bioenergy and other 

biogenic sources when determining whether a stationary source meets the PSD and Title V 

applicability thresholds, including those for the application of BACT. 

In the first ten month since the NC DAQ adopted the current rule on January 28, 2011, NC DAQ 

has received three PSD applications. Based on this level of activity, it is assumed that in each of the 

first three years of this analysis a total of four sources emitting GHG pollutants (including other 

pollutants aside from biogenic CO2) would submit a PSD application. It is further assumed that 

each year one of these four sources would have been required under the current rule to obtain a 

PSD permit solely due to its CO2 emissions being above the PSD threshold. The assumption is that 

the source meets the PSD threshold only for CO2 and not for any other pollutants it emits. Given the 

high level of CO2 emission required to trigger a PSD permit requirement, however, it is very likely 

that this source would emit other pollutants, such as particulate matter (PM) or nitrogen oxides 

(NOx), above the “significant emission” levels (as defined by EPA in 40 CFR Part 51.166(b)(39)). 

In this case, based on the current rule, the source would still be required to install control equipment 

for the other pollutants. Under the proposed rule, however, this source would no longer need to get 

a PSD permit, perform BACT analysis for any of the pollutants it emits, or install control 

equipment for its other pollutants.

The other three sources applying for a PSD permit each year would have emission of pollutants 

other than CO2 above PSD thresholds, and thus would still need to get a PSD permit. These sources, 

however, would incur savings from not having to perform BACT analysis for CO2. 

The analysis includes no impacts to additional stationary sources beyond the three years since the 

deferral will expire. It is uncertain if any owners of potential stationary sources would advance their 

VI-6
11/15/2011 6 

plans and submit an earlier permit application to take advantage of the deferral period, so the 

analysis assumes a constant number of applications for each of the three years being analyzed. 

VI. Costs by Affected Party 

Units of Local Government Funds 

The adoption of the EPA three year deferral period for biogenic CO2 emissions may affect local 

governmental funds under this rulemaking. One type of stationary source that may be owned by a 

local government that could be affected by the deferral are landfills that combust landfill methane. 

These facilities would most likely be Senate Bill 3 renewable sources. Currently, there are no 

landfills large enough to be affected by this rulemaking with the North Carolina Utilities 

Commission. If there were a landfill large enough to emit biogenic CO2 above the PSD threshold, 

then the local government would have a similar cost-savings for avoiding control equipment 

installation similar to the private sector. Since there currently are no proposed landfill methane 

renewable energy projects that would trigger the PSD threshold, this analysis assumes that local 

government funds are not affected by the proposed rule change. 

State Funds 

NC DAQ will lose permitting fees for the estimated one stationary sources that will avoid PSD 

permitting requirements. The reduction of PSD application fees are estimated to be $20,000 

annually during the three-year deferral period. The calculation for this value is located in the PSD 

Permit Savings section. 

Private Sector 

DAQ does not anticipate that the private sector will incur any additional costs as a result of this 

proposed rule amendment. 

VII. Benefits by Affected Party 

Public Environmental Benefits 

EPA believes, based on information currently before the Agency, that at least some biomass 

feedstocks that may be utilized to produce energy or other products have a negligible impact on the 

net carbon cycle, or possibly even a positive net effect (76 FR 43499). Within the context of the 

PSD and Title V programs, EPA believes that CO2 emissions from bioenergy and biogenic sources 

need to be treated differently from fossil based CO2 emissions at the facility. This argument relies 

on the premise that biogenic CO2, which is emitted during the storage, processing, and 

consumption of biologically-based materials, occurs offsite, outside the boundaries of the facility, 

and it is absorbed by vegetation, thus entering the carbon cycle. Such a negligible or positive 

impact on the carbon cycle and net atmospheric CO2 levels should not count towards the PSD and 

Title V applicability requirements. Until EPA completes its assessment, an environmental cost or 

benefit cannot be determined for this economic analysis.

State Funds 

NC DAQ would benefit from this rule by avoiding the administrative burden (opportunity cost) of 

processing one PSD permit per year over the next three years. Generally, the permit fee should 

VI-7
11/15/2011 7 

represent the administrative costs of writing the permit, so the reduction in fees should equate to the 

reduction in administrative burden to the agency of approximately $20,000 annually. NC DAQ 

would benefit further by avoiding the administrative burden of doing a review of the BACT 

analysis for all the pollutants in the case of the one source that is avoiding PDS permitting, and a 

review of BACT analysis for biogenic CO2 emissions of the other three sources that would still 

need to get a PSD permit. In order to obtain a more conservative estimate for the savings, the 

savings to NC DAQ are not included in the computation of benefits from the proposed rule. 

Private Sector 

The private sector may have avoided costs as a result of the proposed rule amendment because 

facilities applying for the PSD permit may not have to perform a BACT analysis for biogenic CO2. 

Furthermore, other sources would avoid paying PSD permitting fees and would not have to install 

pollution abatement equipment, which would produce cost savings in the form of avoided capital 

and operations and maintenance costs. 

PSD Permit Savings 

NC DAQ collects a PSD permitting fee for each PSD application that is submitted by an affected 

source to the agency. The permit fee would be $13,488 for a permit in an attainment area and 

$26,235 in a non-attainment area. Stationary sources that would avoid PSD permitting due to the 

biogenic CO2 deferral would avoid these fees. Stationary sources that would not avoid PSD 

permitting due to exceeding a threshold for other criteria pollutants would not avoid the PSD 

application fee. This analysis assumes that the average PSD fee per stationary source that would not 

be collected if the source avoided PSD permitting is approximately $20,000. In each of the first 

three years, NCDAQ thinks one of the four facilities that would apply for a permit will avoid filing 

for a PSD permit as a result of the proposed rulemaking. The remaining three facilities will not be 

eligible for the deferral because of requirements under Senate Bill 3 (S.L. 2007-397) or PSD 

permitting for pollutants other than biogenic CO2. Therefore, the annual savings would be $20,000 

per year during the three year deferral. 

BACT Savings 

NCDAQ believes that all four new stationary sources will avoid the BACT analysis for CO2 each 

year as a result of the proposed rulemaking. The DAQ PSD permitting supervisor estimates that 

annual avoided costs related to permit preparation, engineering review and analysis for including a 

BACT analysis for biogenic CO2 emission in a PSD permit application is $10,000 per facility. The 

avoided cost for a complete BACT analysis that includes other pollutants would be $25,000. This 

would result in a total annual cost savings of $55,000. 

Capital and Operations and Maintenance Cost Savings 

New or existing stationary sources that would be required under the current rules to get a PSD 

permit due to biogenic CO2 emissions may or may not need to install additional control equipment 

for other pollutants, such PM or NOx depending on if the other criteria pollutants result in a 

VI-8
11/15/2011 8 

significant emissions increase. “Significant emissions increase” is defined in 40 CFR Part 

51.166(b)(39). For this analysis, it is assumed that one stationary source per year would be required 

under the current rules to submit a PSD permit due to exceeding CO2e thresholds. Cost savings for 

not being required to submit a PSD application during the three year deferral and not having to 

install additional control equipment will be estimated using the mid-point of the cost category for 

each type of control equipment. Note, it is possible that the stationary source would not be required 

to install any additional pollution equipment for other criteria pollutants, in which case there would 

not be any savings. 

For this analysis, a 125 MMBTU/hr boiler burning wood is used as an example stationary source 

that would represent the size and fuel type that potentially could exceed the biogenic CO2 major 

source PSD emission threshold of 100,000 tons/year. It is assumed that one stationary source of this 

type each year would be constructed during the three year biomass CO2 deferral period. Assuming 

the NOx and PM net emissions from this stationary source result in a significant emission increase, 

each stationary source would be currently required to install both an electrostatic precipitator (ESP) 

for particulate control and a Selective Non-Catalytic Reduction (SNCR) for NOx control. The 

capital cost of the control equipment, which would be avoided under the proposed rule, is 

annualized over a 20 year period. 

According to EPA’s AP-42, Compilation of Air Pollutant Emission Factors, the major emission of 

concern from wood boilers is particulate matter (PM). These emissions depend primarily on the 

composition of the residue fuel burned, and the particle control device. NOx may also be emitted in 

significant quantities when certain types of wood residue are combusted or when operating 

conditions are poor. To estimate the maximum savings, it is assumed that the stationary source 

would be required to install an ESP for PM control, and SNCR for NOx. 

Cost estimates for ESPs were attained from Applicability and Feasibility of NOx, SO2, and PM 

Emissions Control Technologies for Industrial, Commercial, and Institutional (ICI) Boilers by 

Northeast States for Coordinated Air Use Management (NESCAUM). On page 4-13, the capital 

cost for an ESP is $7,560 to $15,120 per MMBTU/hr (in 2002 dollars). The operation and 

maintenance costs for an ESP are $1,960 to $15,120 per MMBTU/hr. These costs in 2002 dollars 

were attained from Air Pollution Control Technology Fact Sheet: Wet Electrostatic Precipitator 

(ESP)- Wire-Plate Type, EPA-452/F-03-030. 

Cost estimates for SNCRs were attained from Applicability and Feasibility of NOx, SO2, and PM 

Emissions Control Technologies for Industrial, Commercial, and Institutional (ICI) Boilers by 

NESCAUM. On page 5-7, the capital cost for an SNCR is $923,000 for an 88.5 MMBTU/hr boiler 

and $1,025,000 for a 176.9 MMBTU/hr boiler. The annual operating cost is $289,000 for the 88.5 

MMBTU/hr boiler and $324,000 for the 176.9 MMBTU boiler. This analysis used the capital and 

operating costs from the CUECost model developed by EPA. The model has a ±30 percent 

accuracy (page xv of the NECAUM document). The costs are in 2006 dollars. 

To calculate the costs for the ESP, the capital and annual operation and maintenance (O&M) were 

assumed to be at the midpoint of the cost estimates from the NESCAUM document listed in the 

above paragraph. The cost estimates were adjusted to 2011 dollars using IHS Global Insight 

Chained Price Index for GDP. The detailed calculations for determining the ESP costs are found in 

Appendix B of this report. 

VI-9
11/15/2011 9 

To calculate the costs for the SNCR, the capital and annual O&M costs were estimated by doing a 

mathematical interpolation for a 125 MMBTU/hr boiler from the data for an 88.5 and 176.9 

MMBTU/hr boiler found in the NESCAUM document. Those numbers are listed in the above 

paragraph. The cost estimates were adjusted to 2011 dollars. The detailed calculations for 

determining an SNCR costs are found in Appendix C of this report. 

Table 2 is a summary of the annualized capital and annual O&M cost estimates when one woodfired boiler is constructed each year during 2012, 2013, and 2014. The CPI adjustments for these 

years were derived using IHS Global Insight Chained Price Index for GDP. These years represent 

the three year biomass CO2 deferral. 

Table 2: Example Cost Analysis for a 125 MMBTU/hr Wood Boiler

Cost Year for SNCR 2006 2012 2013 2014

CPI Adjustment 1.000 1.107 1.123 1.144

Capital Cost $965,000 $1,068,300 $1,083,700 $1,104,000 

Annualized Capital: 20 yr life @ 7% $91,100 $100,800 $102,300 $104,200 

Annual O & M $303,000 $335,400 $340,300 $346,600 

Annualized Cost SNCR $394,100 $436,200 $442,600 $450,800 

Cost Year for ESP 2002 2012 2013 2014

CPI Adjustment 1.000 1.240 1.258 1.281

Capital Cost $1,417,500 $1,757,700 $1,783,200 $1,815,800 

Annualized Capital: 20 yr life @ 7% $133,800 $165,900 $168,300 $171,400 

Annual O & M $1,067,500 $1,323,700 $1,342,900 $1,367,500 

Annualized Cost ESP $1,201,300 $1,489,600 $1,511,200 $1,538,900 

Total Annualized Cost SNCR+ESP $1,925,800 $1,953,800 $1,989,700 

Small Entity Impacts 

DAQ Staff currently has no data to indicate that facilities meet the OSBM definition of "Small 

business" which means a business entity, including its affiliates, that (i) is independently owned and 

operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than 

$6 million. 

VIII. Summary 

Total Costs and Benefits 

The total costs and benefits to the private sector and state and local governments are summarized in 

Table 3 of this report. The benefits to the private sector over the 20 year expected life of the control 

equipment are summarized in Appendix D. The end of the deferral period will require NC DAQ to 

amend their rule to reflect the actions EPA takes in 2014. That amendment will require a new 

economic impact analysis that could potentially have a large impact starting in year 2015. Unless a 

facility that is exempted during these three years undergoes a major modification that increases 

VI-10
11/15/2011 10 

their emission of biogenic CO2 by more than 75,000 short tons, these facilities will not have to be 

required to get a PSD permit due to the CO2 emissions. This means annual savings will occur for as 

long as these facilities operate. 

Table 3: Costs and Benefits of Proposed Rule Change to Prevention of Significant Deterioration for 

Greenhouse Gases

Fiscal Year 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Year Number 0 1 2 3 4 5

Costs 

Loss of State Revenue* $20,000 $20,000 $20,000 $0 $0

Total Costs $0 $20,000 $20,000 $20,000 $0 $0

Benefits 

Private Sector Reduced 

Permit Fees $20,000 $20,000 $20,000 $0 $0

Private Sector Avoided 

BACT Costs $55,000 $55,000 $55,000 $0 $0

Private Sector Avoided 

Equipment and O&M 

Costs (Appendix D) $1,925,900 $3,637,000 $5,417,900 $5,239,200 $5,339,200 

Total Benefits $0 $2,000,900 $3,712,000 $5,492,900 $5,239,200 $5,339,200 

Net Impact (benefitscosts) $0 $1,980,900 $3,692,000 $5,472,900 $5,239,200 $5,339,200 

Total Impact 

(benefits+costs) $0 $2,020,900 $3,732,000 $5,512,900 $5,239,200 $5,339,200 

5 Year Net Present Value of Net Impact = $16,212,400

5 Year Net Present Value of Total Impact = $16,310,500

* The cost to the state would be offset by staff time savings related to not having to review permit 

applications and BACT analyses, which are not included in this table. 

IX. Risk Analysis 

There are several sources of uncertainty that may affect the results of this analysis: 

Variability in Affected Sources 

In the EPA deferral promulgation (76 FR 43490), biogenic CO2 emissions are defined as emissions 

of CO2 from a stationary source directly resulting from the combustion or decomposition of 

biologically-based materials other than fossil fuels and mineral sources of carbon. Some examples 

of ‘‘biogenic CO2 emissions’’ are listed in the Background Section.

Stationary sources that may be affected by the deferral of biogenic CO2 emissions are sources that 

use a wide variety of control strategies or control equipment. This high level of customization 

makes it challenging to develop a model stationary source to project future savings. 

VI-11
11/15/2011 11 

Case-by-case aspect of BACT 

Under the CAA and applicable regulations, a PSD permit must contain emissions limitations based 

on application of BACT for each regulated new source review (NSR) pollutant. A determination of 

BACT for GHGs should be conducted in the same manner as it is done for any other PSD regulated 

pollutant. The CAA and corresponding implementing regulations require that a permitting authority 

conduct a BACT analysis on a case-by-case basis, and the permitting authority must evaluate the 

amount of emissions reductions that each available emissions-reducing technology or technique 

would achieve, as well as the energy, environmental, economic and other costs associated with each 

technology or technique. Since the BACT analysis is on a case-by-case basis, it is difficult to apply 

a cost estimation to all potentially affected stationary sources due to the variability in the results of 

the BACT analysis. 

Limited BACT reviews 

The NC EMC adopted the federal GHG Tailoring Rule provision on January 28, 2011. Before this 

adoption, NC DAQ did not regulate greenhouse gases, including biogenic CO2 emissions that EPA 

is deferring from the PSD permit program requirements for three years. NC DAQ is in the process 

of reviewing their initial BACT analyses from affected stationary sources. Therefore, there is an 

uncertainty in what BACT is for biogenic CO2 emissions until staff has gained experience in 

reviewing these PSD applications. Co-current with the proposed deferral of biogenic CO2

emissions, EPA issued guidance on determining BACT for biogenic CO2 emissions. The document 

is titled “Guidance for Determining Best Available Control Technology for Reducing Carbon 

Dioxide Emissions from Bioenergy Production” and was released in March 2011. A link to this 

guidance is included in Appendix E. In the guidance document, EPA believes the analysis 

described in the document will be sufficient in most cases to support the conclusion that utilization 

of biomass fuel alone is BACT for a bioenergy facility. 

This document does not provide a final determination of BACT for a particular source, since such 

determinations can only be made by individual permitting authorities on a case-by-case basis after 

consideration of the record in each case. Upon considering the record in an individual case, if a 

permitting authority has a reasoned basis to address particular issues discussed in this document in a 

different manner than EPA recommends here, permitting authorities (including EPA) have the 

discretion to do so in decisions on individual permit applications consistent with the relevant 

requirements in the CAA and regulations. As the permitting authority, NC DAQ will complete their 

own reviews for BACT for biogenic CO2 emissions and may or may not come to the same 

conclusion as EPA’s BACT determination.

Interaction with Senate Bill 3, North Carolina's Renewable Energy and Energy Efficiency 

Portfolio Standard 

Paragraph (g) of §62-133.7, Renewable Energy and Energy Efficiency Portfolio Standard (REPS), 

requires a biomass combustion process at any new renewable energy facility that delivers electric 

power to an electric power supplier shall meet state BACT: 

(g) Control of Emissions. – As used in this subsection, Best Available Control Technology (BACT) 

means an emissions limitation based on the maximum degree a reduction in the emission of air 

VI-12
11/15/2011 12 

pollutants that is achievable for a facility, taking into account energy, environmental, and economic 

impacts and other costs. A biomass combustion process at any new renewable energy facility that 

delivers electric power to an electric power supplier shall meet BACT. The Environmental 

Management Commission shall determine on a case-by-case basis the BACT for a facility that 

would not otherwise be required to comply with BACT pursuant to the Prevention of Significant 

Deterioration (PSD) emissions program. The Environmental Management Commission may adopt 

rules to implement this subsection. In adopting rules, the Environmental Management Commission 

shall take into account cumulative and secondary impacts associated with the concentration of 

biomass facilities in close proximity to one another. In adopting rules the Environmental 

Management Commission shall provide for the manner in which a facility that would not otherwise 

be required to comply with BACT pursuant to the PSD emissions programs shall meet the BACT 

requirement. The state BACT process is similar to the federal BACT process under the PSD 

permitting program except that a stationary source is not required to model for ambient impacts. 

Many of potential biomass facilities that may be required to apply for a PSD permit if biomass CO2

emissions were not deferred would have had to complete a state BACT analysis under REPS. 

The state BACT process is similar to the federal BACT process under the PSD permitting program 

except that a stationary source is not required to model for ambient impacts. Many of potential 

biomass facilities that may be required to apply for a PSD permit if biomass CO2 emissions were 

not deferred would still have had to complete a state BACT analysis under REPS. As a result, this 

fiscal note might be overestimating the cost savings associated with BACT analysis. 

Future EPA Rulemaking 

EPA’s deferral of biogenic CO2 emissions from PSD permitting requirements is intended to be a 

temporary measure to allow the agency to complete its work and determine what, if any, treatment 

of biogenic CO2 emissions should be in the PSD and Title V programs. It is not the final 

determination in these programs. EPA plans to complete its scientific and technical review and any 

follow-on rulemakings within the three year period. It is possible that the subsequent rulemaking, 

depending on the nature of EPA’s determinations, would supersede this deferral rulemaking and 

become effective in less than three years, which would mean that this fiscal note would 

overestimate the potential savings. 

The cost/benefit analysis assumed that all stationary sources that were required to comply with the 

PSD permitting requirement due to exceeding only the biogenic CO2 emission thresholds would be 

required to install control equipment to control PM and NOx emissions. The cost savings would be 

reduced significantly if one or more of the stationary sources were not required to install control 

equipment for one of those pollutants. The analysis also assumed only four stationary sources per 

year would be affected by the deferral, and only one of the stationary sources would be required to 

install control equipment. The cost savings would increase significantly if more than one stationary 

source would be required to install control equipment annually during the deferral period or the 

projected number of affected stationary sources increases to take advantage of the deferral. 

VI-13
11/15/2011 13 

X. Alternatives Considered

DAQ’s proposed amendment 15A NCAC 02D .0544 fixes the CFR reference date to July 20, 2011. 

However, the proposed amendment does not include any subsequent revisions to the CFR. The 

reference date that is currently found in the rule is August 2, 2010 when the Greenhouse Gas 

Tailoring Rule provisions were adopted. This proposal assures DAQ intention to implement a 

specific version of the federal regulation and avoids automatic update that may have unintended 

consequences on affected sources or permitting authorities in North Carolina. When EPA amends 

their regulations, it creates an appearance of two versions of the same regulation, when in fact the 

North Carolina rules date reference is simply out of date. Under such circumstances a fixed CFR 

date in our rules does not trump the federal revision. This requires DAQ to amend its rule to the 

later fixed CFR date. 

Alternative 1 would be to not amend the rule to implement the federal three year deferral period. 

Under G.S. 150B-19.1(a)(2), an agency shall seek to reduce the burden upon those persons or 

entities who must comply with the rule that is being adopted. Deferring biogenic CO2 emissions 

will reduce the regulatory burden on affected facilities by eliminating biogenic CO2 emissions when 

determining whether a stationary source meets the PSD and Title V applicability thresholds, 

including those for the application of BACT. Under G.S. 150B-19.3(a), an agency may not adopt a 

more restrictive requirement than those imposed by federal rule. If DAQ does not adopt the federal 

deferral period, its requirement would be more stringent than EPA’s requirements.

Alternative 2 would amend the CFR reference date to July 20, 2011 and it includes any subsequent 

revisions. Alternative 2 may be warranted in this case because of that “fixed CFR reference date”. 

The federal rule change defers biogenic CO2 emissions from PSD permitting requirement until July 

20, 2014. The time period of this deferral may be shortened if EPA finishes its science and 

technical review or possibly lengthened if EPA requires addition time to complete its study. The 

APA rulemaking process makes it difficult for an agency to quickly amend its rules. Generally, 

DAQ avoids automatic updates (adoption by reference) that may have unintended consequences on 

affected sources or permitting authorities in North Carolina until it has time to determine the effects 

of the federal rule change. For this reason, Alternative 2 was not the favored rule change. 

VI-14
Appendix A 

A-1 

1 15A NCAC 02D .0544 is proposed for amendment as follows: 

2

3 15A NCAC 02D .0544 PREVENTION OF SIGNIFICANT DETERIORATION REQUIREMENTS FOR 

4 GREENHOUSE GASES 

5 (a) The purpose of this Rule is to implement a program for the prevention of significant deterioration of air quality 

6 for greenhouse gases as required by 40 CFR 51.166. For purposes of greenhouse gases, the provisions of this Rule 

7 shall apply rather than the provisions of Rule .0530 of this Section. For all other regulated NSR pollutants, the 

8 provisions of Rule .0530 of this Section apply. 

9 (b) For the purposes of this Rule, the definitions contained in 40 CFR 51.166(b) and 40 CFR 51.301 shall apply 

10 except the definition of "baseline actual emissions." "Baseline actual emissions" means the rate of emissions, in 

11 tons per year, of a regulated new source review (NSR) pollutant, as determined in accordance with Subparagraphs 

12 (1) through (3) of this Paragraph: 

13 (1) For an existing emissions unit, baseline actual emissions means the average rate, in tons per year, 

14 at which the emissions unit actually emitted the pollutant during any consecutive 24-month period 

15 selected by the owner or operator within the 5-year period immediately preceding the date that a 

16 complete permit application is received by the Division for a permit required under this Rule. The 

17 Director shall allow a different time period, not to exceed 10 years immediately preceding the date 

18 that a complete permit application is received by the Division, if the owner or operator 

19 demonstrates that it is more representative of normal source operation. For the purpose of 

20 determining baseline actual emissions, the following shall apply: 

21 (A) The average rate shall include fugitive emissions to the extent quantifiable, and emissions 

22 associated with startups, shutdowns, and malfunctions; 

23 (B) The average rate shall be adjusted downward to exclude any non-compliant emissions 

24 that occurred while the source was operating above any emission limitation that was 

25 legally enforceable during the consecutive 24-month period; 

26 (C) For an existing emission unit (other than an electric utility steam generating unit), the 

27 average rate shall be adjusted downward to exclude any emissions that would have 

28 exceeded an emission limitation with which the major stationary source must currently 

29 comply. However, if the State has taken credit in an attainment demonstration or 

30 maintenance plan consistent with the requirements of 40 CFR 51.165(a)(3)(ii)(G) for an 

31 emission limitation that is part of a maximum achievable control technology standard that 

32 the Administrator proposed or promulgated under part 63 of the Code of Federal 

33 Regulations, the baseline actual emissions shall be adjusted to account for such emission 

34 reductions; 

35 (D) For an electric utility steam generating unit, the average rate shall be adjusted downward 

36 to reflect any emissions reductions under G.S. 143-215.107D and for which cost recovery 

37 is sought pursuant to G.S. 62-133.6; 

38 (E) For a regulated NSR pollutant, when a project involves multiple emissions units, only 

39 one consecutive 24-month period shall be used to determine the baseline actual emissions 

40 for all the emissions units being changed. A different consecutive 24-month period for 

41 each regulated NSR pollutant can be used for each regulated NSR pollutant; and 

42 (F) The average rate shall not be based on any consecutive 24-month period for which there 

43 is inadequate information for determining annual emissions, in tons per year, and for 

44 adjusting this amount if required by Parts (B) and (C) of this Subparagraph; 

45 (2) For a new emissions unit, the baseline actual emissions for purposes of determining the emissions 

46 increase that will result from the initial construction and operation of such unit shall equal zero; 

47 and thereafter, for all other purposes, shall equal the unit's potential to emit; and 

48 (3) For a plantwide applicability limit (PAL) for a stationary source, the baseline actual emissions 

49 shall be calculated for existing emissions units in accordance with the procedures contained in 

50 Subparagraph (1) of this Paragraph and for a new emissions unit in accordance with the 

51 procedures contained in Subparagraph (2) of this Paragraph. 

52 (c) In the definition of "net emissions increase," the reasonable period specified in 40 CFR 51.166(b)(3)(ii) shall be 

53 seven years. 

54 (d) The limitation specified in 40 CFR 51.166(b)(15)(ii) shall not apply. 

55 (e) Major stationary sources and major modifications shall comply with the requirements contained in 40 CFR 

56 51.166(i) and (a)(7) and by extension in 40 CFR 51.166(j) through (o) and (w). The transition provisions allowed by 

VI-15
Appendix A 

A-2 

1 40 CFR 52.21 (i)(11)(i) and (ii) and (m)(1)(vii) and (viii) are hereby adopted under this Rule. The minimum 

2 requirements described in the portions of 40 CFR 51.166 referenced in this Paragraph are hereby adopted as the 

3 requirements to be used under this Rule, except as otherwise provided in this Rule. Wherever the language of the 

4 portions of 40 CFR 51.166 referenced in this Paragraph speaks of the "plan," the requirements described therein 

5 shall apply to the source to which they pertain, except as otherwise provided in this Rule. Whenever the portions of 

6 40 CFR 51.166 referenced in this Paragraph provide that the State plan may exempt or not apply certain 

7 requirements in certain circumstances, those exemptions and provisions of nonapplicability are also hereby adopted 

8 under this Rule. However, this provision shall not be interpreted so as to limit information that may be requested 

9 from the owner or operator by the Director as specified in 40 CFR 51.166(n)(2). 

10 (f) 40 CFR 51.166(w)(10)(iv)(a) is changed to read: "If the emissions level calculated in accordance with Paragraph 

11 (w)(6) of this Section is equal to or greater than 80 percent of the PAL [plant wide applicability limit] level, the 

12 Director shall renew the PAL at the same level." 40 CFR 51.166(w)(10)(iv)(b) is not incorporated by reference. 

13 (g) 15A NCAC 02Q .0102 and .0302 are not applicable to any source to which this Rule applies. The owner or 

14 operator of the sources to which this Rule applies shall apply for and receive a permit as required in 15A NCAC 

15 02Q .0300 or .0500. 

16 (h) When a particular source or modification becomes a major stationary source or major modification solely by 

17 virtue of a relaxation in any enforceable limitation which was established after August 7, 1980, on the capacity of 

18 the source or modification to emit a pollutant, such as a restriction on hours of operation, then the provisions of this 

19 Rule shall apply to the source or modification as though construction had not yet begun on the source or 

20 modification. 

21 (i) The provisions of 40 CFR 52.21(r)(2) regarding the period of validity of approval to construct are incorporated 

22 by reference except that the term "Administrator" is replaced with "Director". 

23 (j) Permits may be issued based on innovative control technology as set forth in 40 CFR 51.166(s)(1) if the 

24 requirements of 40 CFR 51.166(s)(2) have been met, subject to the condition of 40 CFR 51.166(s)(3), and with the 

25 allowance set forth in 40 CFR 51.166(s)(4). 

26 (k) A permit application subject to this Rule shall be processed in accordance with the procedures and requirements 

27 of 40 CFR 51.166(q). Within 30 days of receipt of the application, applicants shall be notified if the application is 

28 complete as to initial information submitted. Commencement of construction before full prevention of significant 

29 deterioration approval is obtained constitutes a violation of this Rule. 

30 (l) Approval of an application with regard to the requirements of this Rule shall not relieve the owner or operator of 

31 the responsibility to comply fully with applicable provisions of other rules of this Subchapter or Subchapter 02Q of 

32 this Title and any other requirements under local, state, or federal law. 

33 (m) If the owner or operator of a source is using projected actual emissions to avoid applicability of prevention of 

34 significant deterioration requirements, the owner or operator shall notify the Director of the modification before 

35 beginning actual construction. The notification shall include: 

36 (1) a description of the project; 

37 (2) identification of sources whose emissions could be affected by the project; 

38 (3) the calculated projected actual emissions and an explanation of how the projected actual emissions 

39 were calculated, including identification of emissions excluded by 40 CFR 51.166(b)(40)(ii)(c); 

40 (4) the calculated baseline actual emissions and an explanation of how the baseline actual emissions 

41 were calculated; and 

42 (5) any netting calculations if applicable. 

43 If upon reviewing the notification, the Director finds that the project will cause a prevention of significant 

44 deterioration evaluation, then the Director shall notify the owner or operator of his findings. The owner or operator 

45 shall not make the modification until it has received a permit issued pursuant to this Rule. If a permit revision is not 

46 required pursuant to this Rule, the owner or operator shall maintain records of annual emissions in tons per year, on 

47 a calendar year basis related to the modifications for 10 years following resumption of regular operations after the 

48 change if the project involves increasing the emissions unit's design capacity or its potential to emit the regulated 

49 NSR pollutant; otherwise these records shall be maintained for five years following resumption of regular operations 

50 after the change. The owner or operator shall submit a report to the Director within 60 days after the end of each 

51 year during which these records must be generated. The report shall contain the items listed in 40 CFR 

52 51.166(r)(6)(v)(a) through (c). The owner or operator shall make the information documented and maintained under 

53 this Paragraph available to the Director or the general public pursuant to the requirements in 40 CFR 

54 70.4(b)(3)(viii). 

55 (n) The references to the Code of Federal Regulations (CFR) in this Rule are incorporated by reference unless a 

56 specific reference states otherwise. The version of the CFR incorporated in this Rule is that published in the Federal 

VI-16
Appendix A 

A-3 

1 Register June 3, 2010 and effective August 2, 2010 as of July 20, 2011 and does not include any subsequent 

2 amendments or editions to the referenced material. This Rule is applicable as of its effective date in accordance with 

3 40 CFR 51.166(b)(48) and (b)(49)(iv) and (v). 

4

5 History Note: Authority G.S. 143-215.3(a)(1); 143-215.107(a)(3); 143-215.107(a)(5); 143-215.107(a)(7); 143-

6 215.108(b); 150B-21.6; 

7 Eff. January 28, 2011 pursuant to E.O. 81, Beverly E. Perdue; 

8 Pursuant to G.S. 150B-21.3(c), a bill was not ratified by the General Assembly to disapprove this 

9 rule. 

10 Amended Eff. . 

VI-17
Appendix B 

B-1 

Electrostatic Precipitator Cost Estimate 

Assumptions: 

125 MMBTU/hr boiler 

Capital cost: $7,560 to $15,120 per MMBTU/hr (2002) 

Annual O&M cost: $1,960 to $15,120 per MMBTU/hr (2002) 

Source: Applicability and Feasibility of NOx, SO2, and PM Emissions Control Technologies for 

Industrial, Commercial, and Institutional (ICI) Boilers, Northeast States for Coordinated Air Use 

Management (NESCAUM), 2008, page 4-13 

Calculations: 

For the purposes of this calculation, assume the costs fall at the mid-point of the range of costs. 

Mid-range capital cost: $11,340 MMBTU/hr (2002) 

Mid-range annual O&M cost: $8,540 MMBTU/hr (2002) 

To calculate the capital and O&M cost in any cost year, use the following equation: 

Capital cost = (mid-range capital cost) x (boiler size) x (CPI adjustment) 

Annual O&M cost = (mid-range O&M cost) x (boiler size) x (CPI adjustment) 

Example calculation for cost year 2012: 

Capital cost = ($11,340/MMBTU/hr) x (125 MMBTU/hr) x (1.240) = $1,757,700

Annual O&M cost = ($8,540/MMBTU/hr) x (125 MMBTU/hr) x (1.240) = $1,323,700 

VI-18
Appendix C 

C-1 

Selective Non-Catalytic Reduction Cost Estimate 

Assumptions: 

125 MMBTU/hr boiler 

Capital cost: $923,000 for 88.5 MMBTU/hr boiler (CUECost, 2006) 

 $1,025,000 for 176.9 MMBTU/hr boiler (CUECost, 2006) 

Annual cost: $289,000 for 88.5 MMBTU/hr boiler (CUECost, 2006) 

 $324,000 for for 176.9 MMBTU/hr boiler (CUECost, 2006) 

Source: Applicability and Feasibility of NOx, SO2, and PM Emissions Control Technologies for 

Industrial, Commercial, and Institutional (ICI) Boilers, Northeast States for Coordinated Air Use 

Management (NESCAUM), 2008, page 5-7 

Calculations: 

Linear interpolation (2006 data): 

88.5 MMBTU/hr $923,000 $289,000

125 MMBTU/hr x y

176.9 MMBTU/hr $1,025,000 $324,000

To calculate the capital and O&M cost in any cost year, use the following equation: 

Capital cost = (interpolated capital cost for 125 MMBTU/hr boiler) x (CPI adjustment) 

Annual O&M cost = (interpolated O&M cost for 125 MMBTU/hr boiler) x (CPI adjustment) 

Example calculation for cost year 2012: 

Capital cost = ($965,000) x (1.107) = $1,068,300 

Annual O&M cost = ($303,200) x (1.107) = $335,400

VI-19
Appendix D 

E-1 

Control Equipment Savings 

Below are the control equipment savings for control equipment installed during the three year deferral 

period. The capital costs are annualized over a 20 year period. The nominal cost/saving column include 

the annual operation and maintenance costs. One stationary source with an ESP and SNCR is constructed 

during years 2012, 2013 and 2014. 

Year Nominal Cost/Savings NPV Factor Discounted

2012 $1,925,900 0.935 $1,799,900 

2013 $3,637,000 0.873 $3,176,700 

2014 $5,417,900 0.816 $4,422,600 

2015 $5,239,200 0.763 $3,997,000 

2016 $5,339,200 0.713 $3,806,800 

2017 $5,435,200 0.666 $3,621,700 

2018 $5,531,100 0.623 $3,444,500 

2019 $5,623,900 0.582 $3,273,200 

2020 $5,715,700 0.544 $3,109,000 

2021 $5,808,400 0.508 $2,952,700 

2022 $5,905,300 0.475 $2,805,600 

2023 $6,005,400 0.444 $2,666,500 

2024 $6,105,400 0.415 $2,533,500 

2025 $6,206,400 0.388 $2,406,900 

2026 $6,313,800 0.362 $2,288,400 

2027 $6,423,000 0.339 $2,175,700 

2028 $6,531,200 0.317 $2,067,600 

2029 $6,647,800 0.296 $1,966,800 

2030 $6,767,500 0.277 $1,871,300 

2031 $6,889,000 0.258 $1,780,200 

2032 $4,675,800 0.242 $1,129,300 

2033 $2,380,500 0.226 $537,300 

Total $120,524,600 $57,833,200 

VI-20
Appendix E 

E-1 

Sources of Information 

1. 76 FR 43490, Deferral for CO2 Emissions From Bioenergy and Other Biogenic Sources Under 

the Prevention of Significant Deterioration (PSD) and Title V Programs, July 20, 2011. 

2. Session Law 2011-398, Senate Bill 781 

3. Session Law 2007-397, Senate Bill 3 

4. AP-42, Compilation of Air Pollutant Emission Factors, Section 1.6, Wood Residue Combustion 

In Boilers, http://www.epa.gov/ttnchie1/ap42/ch01/final/c01s06.pdf

5. Applicability and Feasibility of NOx, SO2, and PM Emissions Control Technologies for 

Industrial, Commercial, and Institutional (ICI) Boilers, Northeast States for Coordinated Air Use 

Management (NESCAUM), http://www.nescaum.org/documents/ici-boilers-20081118-final.pdf

6. CPI calculator, http://www.usinflationcalculator.com/

7. Air Pollution Control Technology Fact Sheet: Wet Electrostatic Precipitator (ESP)- Wire-Plate 

Type, EPA-452/F-03-030, http://www.epa.gov/ttn/catc/dir1/fwespwpl.pdf.

8. PSD and Title V Permitting Guidance For Greenhouse Gases, EPA, March 2011, 

http://www.epa.gov/nsr/ghgdocs/ghgpermittingguidance.pdf

9. Guidance For Determining Best Available Control Technology For Reducing Carbon Dioxide 

Emissions From Bioenergy Production, EPA, March 2011, 

http://www.epa.gov/nsr/ghgdocs/bioenergyguidance.pdf

10. North Carolina Utilities Commission, Renewable Energy and Energy Efficiency Portfolio 

Standard (REPS), http://www.ncuc.commerce.state.nc.us/reps/reps.htm

VI-21
Vol. 76 Wednesday, 

No. 139 July 20, 2011 

Part IV 

Environmental Protection Agency 

40 CFR Parts 51, 52, 70, et al. 

Deferral for CO2 Emissions From Bioenergy and Other Biogenic Sources 

Under the Prevention of Significant Deterioration (PSD) and Title V 

Programs; Final Rule 


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FEDERAL REGISTER
43490 Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Rules and Regulations 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 51, 52, 70, and 71 

[EPA–HQ–OAR–2011–0083; FRL–9431–6] 

RIN 2060–AQ79 

Deferral for CO2 Emissions From 

Bioenergy and Other Biogenic Sources 

Under the Prevention of Significant 

Deterioration (PSD) and Title V 

Programs 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: This action defers for a period 

of three (3) years the application of the 

Prevention of Significant Deterioration 

(PSD) and Title V permitting 

requirements to biogenic carbon dioxide 

(CO2) emissions from bioenergy and 

other biogenic stationary sources. This 

action is being taken as part of the 

process of granting the Petition for 

Reconsideration filed by the National 

Alliance of Forest Owners (NAFO) on 

August 3, 2010, related to the PSD and 

Title V Greenhouse Gas Tailoring Rule. 

The result of this action is that during 

this three year period biogenic CO2

emissions are not required to be counted 

for applicability purposes under the 

PSD and Title V permitting programs. 

State, local, and tribal permitting 

authorities may adopt the deferral at 

their option but the deferral is effective 

upon publication for the PSD and Title 

V permit programs that are 

implemented by EPA. 

DATES: This action is effective on July 

20, 2011. 

ADDRESSES: EPA has established a 

docket for this rulemaking under Docket 

ID No. EPA–HQ–OAR–2011–0083. All 

documents in the docket are listed in 

the http://www.regulations.gov index. 

Although listed in the index, some 

information is not publicly available, 

e.g., confidential business information 

(CBI) or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, will be publicly 

available only in hard copy. Publicly 

available docket materials are available 

either electronically at http:// 

www.regulations.gov or in hard copy at 

the Air Docket, EPA/DC, EPA West, 

Room 3334, 1301 Constitution Ave., 

NW., Washington, DC. This Docket 

Facility is open from 8:30 a.m. to 4:30 

p.m., Monday through Friday, excluding 

Federal holidays. The telephone number 

for the Public Reading Room is (202) 

566–1744, and the telephone number for 

the Air Docket is (202) 566–1742. 

FOR FURTHER INFORMATION CONTACT: 

Carole Cook, Climate Change Division, 

Office of Atmospheric Programs (MC– 

6207J), Environmental Protection 

Agency, 1200 Pennsylvania Ave., NW., 

Washington, DC 20460; telephone 

number: (202) 343–9334; fax number: 

(202) 343–2342; e-mail address: 

biodeferralPSD@epa.gov. 

SUPPLEMENTARY INFORMATION: Regulated 

Entities. The Administrator determined 

that this action is subject to the 

provisions of Clean Air Act (CAA) 

section 307(d). See CAA section 

307(d)(1)(V) (the provisions of section 

307(d) apply to ‘‘such other actions as 

the Administrator may determine’’). 

These are final amendments to existing 

regulations. This action applies to 

stationary sources that emit biogenic 

CO2. 

TABLE 1—EXAMPLES OF AFFECTED ENTITIES BY CATEGORY

Category NAICS Examples of affected facilities 

Biomass combustion ................................. 221 Electric utilities burning biomass fuels. 

321 Wood products manufacturing, and wood pellet fuel manufacturing. 

322 Pulp and paper manufacturing. 

Municipal solid waste combustion ............ 562213 Solid waste combustors and incinerators. 

Sources/users of biogas ........................... 112 Animal production manure management operations. 

221320 Sewage treatment facilities. 

562212 Solid waste landfills. 

Fermentation processes ........................... 325193 Ethanol manufacturing. 

325411 Medicinal and botanical manufacturing. 

Other ......................................................... 311/312 Food/Beverage processors burning agricultural biomass residues, using fermentation processes, or producing/using biogas from anaerobic digestion of waste materials. 

Table 1 of this preamble lists the 

types of entities that potentially could 

be affected by the deferral covered by 

this action. This list is not intended to 

be exhaustive, but rather provides a 

guide for readers regarding facilities 

likely to be affected by this action. Note 

that this rule does not make or infer any 

policy determination on the part of EPA 

whether any emissions from any of 

these sources may be determined 

‘‘fugitive’’ emissions for the purposes of 

accounting and applicability under air 

permitting requirements. Such 

determinations are not within the scope 

of this rule and are part of the case-bycase application and review process 

established under the regulations 

covering these permitting requirements. 

If you have questions regarding the 

applicability of this action to a 

particular facility, consult the person 

listed in the FOR FURTHER INFORMATION

CONTACT section of this preamble. 

What is the effective date? The final 

rule is effective on July 20, 2011. 

Section 553(d) of the Administrative 

Procedure Act (APA), 5 U.S.C. Chapter 

5, generally provides that rules may not 

take effect earlier than 30 days after they 

are published in the Federal Register. 

EPA is issuing this final rule under 

section 307(d)(1) of the Clean Air Act, 

which states: ‘‘The provisions of section 

553 through 557 *** of Title 5 shall not, 

except as expressly provided in this 

section, apply to actions to which this 

subsection applies.’’ Thus, section 

553(d) of the APA does not apply to this 

rule. EPA is nevertheless acting 

consistently with the purposes of the 

underlying APA section 553(d) in 

making this rule effective on July 20, 

2011. Section 5 U.S.C. 553(d)(3) allows 

an effective date less than 30 days after 

publication ‘‘as otherwise provided by 

the agency for good cause found and 

published with the rule.’’ As explained 

below, EPA finds that there is good 

cause for this rule to become effective 

on July 20, 2011, even through this 

results in fewer than 30 days from the 

date of publication in the Federal 

Register. 

EPA announced its intent to 

undertake this rulemaking on January 

12, 2011, in order to provide the Agency 

time to conduct a detailed examination 

of the science and technical issues 

associated with biogenic CO2 emissions 


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Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Rules and Regulations 43491 

from stationary sources. The Agency 

intended to complete the rulemaking 

before sources would be subject to the 

PSD and Title V programs for GHG 

emissions because at that time it was 

possible that a source could be subject 

to those requirements based on biogenic 

CO2 emissions. The Agency determined 

it could be burdensome for both 

permitting authorities and sources to 

assess those emissions until our detailed 

examination was complete. In a January 

12, 2011, letter to several members of 

Congress, the Administrator wrote, ‘‘No 

source will be subject to the preconstruction permitting requirement 

solely because of its greenhouse gas 

emissions until after July 1, 2011. With 

the approach of July 1 in mind, I am 

announcing today that, by that date, 

EPA will complete a rulemaking to defer 

for three years the application of the 

pre-construction permitting requirement 

to biomass and other biogenic CO2

emissions.’’ 

One purpose of the 30-day waiting 

period prescribed in 5 U.S.C. 553(d) is 

to give affected parties a reasonable time 

to adjust their behavior and prepare 

before the final rule takes effect. 

Whereas here, the affected parties are 

anticipating this rule and requesting the 

flexibility it provides, and any delay in 

its effectiveness will result in 

uncertainty in the permitting process. In 

order to ensure that the final rule is 

available to the public by July 1, 2011, 

the final rule will be signed and made 

available on the EPA Web site. 

Publication may follow one to two 

weeks after that date. A shorter effective 

date is also consistent with the purposes 

of APA section 553(d)(1), which 

provides an exception for any action 

that grants or recognizes an exemption 

or relieves a restriction. Here, this action 

relieves a burden because it defers the 

applicability of the PSD and Title V 

permitting requirements for biogenic 

stationary sources for a period of three 

years. Accordingly, we find good cause 

exists to make this rule effective on July 

20, 2011, consistent with the purposes 

of 5 U.S.C. 553(d)(1) and (3). 

Judicial Review. Under section 

307(b)(1) of the CAA, judicial review of 

this final rule is available only by filing 

a petition for review in the U.S. Court 

of Appeals for the District of Columbia 

Circuit (the Court) by September 19, 

2011. Under CAA section 307(d)(7)(B), 

only an objection to this final rule that 

was raised with reasonable specificity 

during the period for public comment 

can be raised during judicial review. 

CAA section 307(d)(7)(B) also provides 

a mechanism for EPA to convene a 

proceeding for reconsideration, ‘‘[i]f the 

person raising an objection can 

demonstrate to EPA that it was 

impracticable to raise such objection 

within [the period for public comment] 

or if the grounds for such objection 

arose after the period for public 

comment (but within the time specified 

for judicial review) and if such objection 

is of central relevance to the outcome of 

the rule.’’ Any person seeking to make 

such a demonstration to us should 

submit a Petition for Reconsideration to 

the Office of the Administrator, 

Environmental Protection Agency, 

Room 3000, Ariel Rios Building, 1200 

Pennsylvania Ave., NW., Washington, 

DC 20460, with a copy to the person 

listed in the preceding FOR FURTHER

INFORMATION CONTACT section, and the 

Associate General Counsel for the Air 

and Radiation Law Office, Office of 

General Counsel (Mail Code 2344A), 

Environmental Protection Agency, 1200 

Pennsylvania Ave., NW., Washington, 

DC 20004. Note, under CAA section 

307(b)(2), the requirements established 

by this final rule may not be challenged 

separately in any civil or criminal 

proceedings brought by EPA to enforce 

these requirements. 

Acronyms and Abbreviations. The 

following are acronyms and 

abbreviations of terms used in this 

preamble. 

BACT best available control technology 

BAU business as usual 

CAA Clean Air Act 

CBI confidential business information 

CFI Call for Information 

CFR Code of Federal Regulations 

CH4 methane 

CO2 carbon dioxide 

CO2e carbon dioxide equivalents 

EO Executive Order 

EPA U.S. Environmental Protection Agency 

FR Federal Register 

GHG/GHGs greenhouse gas/greenhouse 

gases 

GWP global warming potential 

LULUCF Land-Use, Land-Use Change and 

Forestry 

MSW municipal solid waste 

NAFO National Alliance of Forest Owners 

NAAQS National Ambient Air Quality 

Standards 

NOX nitrogen oxides 

NSPS New Source Performance Standards 

NSR New Source Review 

NTTAA National Technology Transfer and 

Advancement Act of 1995 

PSD Prevention of Significant Deterioration 

PTE potential to emit 

RFA Regulatory Flexibility Act 

SAB Science Advisory Board 

SILs significant impact levels 

SIP State Implementation Plan 

SMCs significant monitoring concentrations 

tpy tons per year 

U.S. United States 

UMRA Unfunded Mandates Reform Act 

UNFCCC United Nations Framework 

Convention on Climate Change 

Outline. The information presented in 

this preamble is organized as follows: 

I. Background 

II. Summary of Final Action 

A. Overview of the Final Rule 

B. Legal Authority 

C. Facilities Permitted During Deferral 

D. Mechanism for Deferral and State 

Implementation 

III. Response to Public Comments 

A. Overview of Public Comments 

B. Comments on the Deferral 

C. Comments on Science, Accounting, and 

Economic Issues 

D. Comments on PSD, Title V and the 

Tailoring Rule 

E. Comments on the Interim Guidance 

IV. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform Act 

(UMRA) 

E. Executive Order 13132: Federalism 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer and 

Advancement Act 

J. Executive Order 12898: Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Congressional Review Act 

I. Background 

On June 3, 2010, EPA published the 

final Prevention of Significant 

Deterioration (PSD) and Title V 

Greenhouse Gas Tailoring Rule (herein 

referred to as the Tailoring Rule; 75 FR 

31514), setting thresholds for GHG 

emissions that define when permits 

under these programs are required for 

new and existing industrial facilities. 

Beginning January 2, 2011, sources 

currently subject to PSD or Title V 

permitting programs were required to 

determine the best available control 

technology (BACT) for their GHG 

emissions, but only for GHG increases of 

75,000 short tons per year (tpy) or more 

of total GHGs, on a carbon dioxide 

equivalents (CO2e) basis and any 

increase on a mass basis. At that time, 

no sources would be subject to CAA 

permitting requirements due solely to 

GHG emissions. 

Beginning July 1, 2011, the PSD 

permitting requirements will for the first 

time cover new construction projects 

that will emit GHGs of at least 100,000 

tpy on a CO2e basis even if they do not 

exceed the permitting thresholds for any 


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43492 Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Rules and Regulations 

1http://www.epa.gov/NSR/actions.html#mar11. 

other pollutant. Modifications at 

existing facilities that increase GHG 

emissions by at least 75,000 tpy, and 

any amount on a mass basis, will be 

subject to permitting requirements, even 

if they do not significantly increase 

emissions of any other pollutant. 

Operating permit requirements will, for 

the first time, apply to sources based on 

their GHG emissions even if they would 

not apply based on emissions of any 

other pollutant. Facilities that emit at 

least 100,000 tpy CO2e will be subject to 

Title V permitting requirements. 

As discussed in the final Tailoring 

Rule, EPA decided not to provide 

exemptions from applicability 

determinations (major source and major 

modification) under PSD and Title V for 

certain GHG emission sources, 

including biogenic emissions. EPA 

decided instead to address the need for 

tailoring through a uniform thresholdbased approach, rather than through a 

collection of various specific exclusions. 

At that time, EPA also noted that it 

planned to seek further comment on 

how it might address biogenic CO2

emissions under the PSD and Title V 

programs through a future action. 

On July 15, 2010, EPA published a 

Call for Information (CFI) to solicit 

information and viewpoints from 

interested parties on approaches to 

accounting for GHG emissions from 

bioenergy and other biogenic sources 

(75 FR 41173). The purpose of this CFI 

was to request comment on possible 

accounting approaches for biogenic CO2

emissions under the PSD and Title V 

programs, as well as to receive data 

submissions about these sources and 

their GHG emissions, general technical 

comments on accounting for these 

emissions, and comments on the 

underlying science that should inform 

any such accounting approach. 

On August 3, 2010, NAFO petitioned 

the EPA to reconsider and stay the 

implementation of the PSD and Title V 

GHG Tailoring Rule. The petition 

alleged that the final Tailoring Rule 

declared, for the first time and without 

any prior proposal or notice to industry, 

that EPA would count CO2 emissions 

from combustion of biomass toward the 

applicability thresholds established for 

the PSD and Title V permitting 

programs of the CAA. Petitioners further 

alleged that EPA’s proposed rule had 

provided for the appropriate and 

opposite conclusion: That CO2

emissions from combustion of biomass 

should not be counted. Petitioners 

stated that there is near-universal 

recognition that CO2 emitted from 

combustion of fuels derived from 

biomass should be excluded from GHG 

regulations because production and 

combustion of such fuels do not 

increase atmospheric CO2 levels. 

Pending reconsideration, petitioners 

requested that the application of the 

PSD and Title V permitting programs to 

emissions of CO2 from biomass be 

stayed. 

We considered carefully the 

petitioners’ assertions and noted that we 

also received comments through the CFI 

supporting the exclusion of biogenic 

CO2 from stationary source permitting 

requirements. Through the CFI, 

however, EPA also received information 

supporting the position that biogenic 

CO2 should not be excluded from 

permitting programs, and that the use of 

certain types of biomass as fuel could 

increase atmospheric CO2 levels. Based 

on consideration of the petitioners’ 

arguments, together with the weight of 

the comments received through the CFI, 

EPA concluded that the issue of 

accounting for the net atmospheric 

impact of biogenic CO2 emissions is 

complex enough that further 

consideration of this important issue is 

warranted. Therefore, EPA granted the 

NAFO petition on January 12, 2011.1

On January 12, 2011, EPA also 

announced in letters to Members of 

Congress and NAFO its intent to take a 

number of steps to address the issues 

associated with biogenic CO2 emissions 

from stationary sources. Pursuant to this 

announcement, on March 21, 2011, EPA 

published a notice of proposed 

rulemaking to defer for three years the 

application of the PSD and Title V 

permitting requirements to biogenic CO2

emissions from stationary sources (76 

FR 15249). Concurrent with this 

rulemaking, EPA also issued interim 

guidance entitled, ‘‘Guidance for 

Determining Best Available Control 

Technology for Reducing Carbon 

Dioxide Emissions from Bioenergy 

Production’’ to help permitting 

authorities establish a basis for 

concluding that under the PSD Program 

the combustion of biomass fuels can be 

considered BACT for biogenic CO2

emissions at stationary sources until 

such time as the deferral becomes 

effective. During the three-year deferral 

period, EPA will conduct a detailed 

examination of the science associated 

with biogenic CO2 emissions from 

stationary sources, including engaging 

with Federal partners, technical experts, 

and an independent scientific panel to 

consider technical issues. Based on the 

feedback from the scientific and 

technical review, EPA will then 

undertake a rulemaking to determine 

how biogenic CO2 emissions should be 

treated and accounted for in PSD and 

Title V permitting. 

On April 27, 2011, EPA’s Science 

Advisory Board (SAB) published a 

notice soliciting experts for a peer 

review of EPA’s science and technical 

work on biogenic CO2 emissions. 76 FR 

23587. EPA intends to provide its study 

that examines the science and technical 

issues associated with biogenic CO2

emissions from stationary sources and 

accompanying accounting framework to 

the SAB for peer review later in 2011. 

II. Summary of Final Action 

A. Overview of the Final Rule 

This action defers for a period of three 

(3) years the consideration of CO2

emissions from bioenergy and other 

biogenic sources (hereinafter referred to 

as ‘‘biogenic CO2 emissions’’) when 

determining whether a stationary source 

meets the PSD and Title V applicability 

thresholds, including those for the 

application of BACT. Stationary sources 

that combust biomass (or otherwise emit 

biogenic CO2 emissions) and construct 

or modify during the deferral period 

will avoid the application of PSD to the 

biogenic CO2 emissions resulting from 

those actions. This deferral applies only 

to biogenic CO2 emissions and does not 

affect non-GHG pollutants or other 

GHGs (e.g., methane (CH4) and nitrous 

oxide (N2O)) emitted from the 

combustion of biomass fuel. Also, this 

deferral only pertains to biogenic CO2

emissions in the PSD and Title V 

programs and does not pertain to any 

other EPA programs such as the GHG 

Reporting Program. 

EPA recognizes that use of certain 

types of biomass can be part of the 

national strategy to reduce dependence 

on fossil fuels, efforts are underway at 

the Federal, State and regional level to 

foster the expansion of renewable 

resources and promote bioenergy 

projects when they are a way to address 

climate change, increasing domestic 

alternative energy production, 

enhancing forest management and 

creating related employment 

opportunities. We believe part of 

fostering this development is to ensure 

that those feedstocks with negligible net 

atmospheric impact not be subject to 

unnecessary regulation. At the same 

time, it is important that EPA have time 

to conduct its detailed examination of 

the science and technical issues related 

to accounting for biogenic CO2

emissions and therefore have finalized 

this deferral. 

This deferral is intended to be a 

temporary measure, in effect for no 

more than three years, to allow the 

Agency time to complete its work and 


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Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Rules and Regulations 43493 

determine what, if any, treatment of 

biogenic CO2 emissions should be in the 

PSD and Title V programs. This is not 

EPA’s final determination on the 

treatment of biogenic CO2 emissions in 

those programs. The Agency plans to 

complete its science and technical 

review and any follow-on rulemakings 

within the three-year deferral period 

and further believes that three years is 

ample time to complete these tasks. It is 

possible that the subsequent 

rulemaking, depending on the nature of 

EPA’s determinations, would supersede 

this rulemaking and become effective in 

fewer than three years. 

Biogenic CO2 emissions are defined as 

emissions of CO2 from a stationary 

source directly resulting from the 

combustion or decomposition of 

biologically-based materials other than 

fossil fuels and mineral sources of 

carbon. Examples of ‘‘biogenic CO2

emissions’’ include, but are not limited 

to: 

• CO2 generated from the biological 

decomposition of waste in landfills, 

wastewater treatment or manure management 

processes; 

• CO2 from the combustion of biogas 

collected from biological decomposition of 

waste in landfills, wastewater treatment or 

manure management processes; 

• CO2 from fermentation during ethanol 

production or other industrial fermentation 

processes; 

• CO2 from combustion of the biological 

fraction of municipal solid waste or 

biosolids; 

• CO2 from combustion of the biological 

fraction of tire-derived fuel; and 

• CO2 derived from combustion of 

biological material, including all types of 

wood and wood waste, forest residue, and 

agricultural material. 

For stationary sources co-firing fossil 

fuel and biologically-based fuel, and/or 

combusting mixed fuels (e.g., tirederived fuels, municipal solid waste 

(MSW)), the biogenic CO2 emissions 

from that combustion are included in 

this deferral. However, the fossil CO2

emissions are not. Emissions of CO2

from processing of mineral feedstocks 

(e.g., calcium carbonate) are also not 

included in this deferral. Various 

methods are available to calculate both 

the biogenic and fossil portions of CO2

emissions, including those methods 

contained in the GHG Reporting 

Program (40 CFR Part 98). Consistent 

with the other pollutants in PSD and 

Title V, there are no requirements to use 

a particular method in determining your 

biogenic and fossil CO2 emissions. 

B. Legal Authority 

1. Applicability of PSD and Title V to 

Biogenic CO2 Emissions From Major 

Stationary Sources 

As currently written, the PSD and 

Title V regulations apply to biogenic 

CO2 emissions from major sources or 

major modifications at such sources 

according to the limitation included 

under the definition of ‘‘subject to 

regulation’’ in the State Implementation 

Plan (SIP) regulations at 40 CFR 51.166 

and the Title V state program 

regulations at 40 CFR 70.2, as well as 

the Federal Implementation Plan 

requirements at 40 CFR 52.21 and the 

Title V Federal program regulations at 

40 CFR 71.2. Thus, revisions to these 

regulations are necessary to defer 

application of the PSD and Title V 

programs to such sources of biogenic 

CO2. 

Stationary sources of air pollutants, 

including sources of biogenic CO2

emissions, are currently subject to PSD 

requirements if they emit more than 100 

or 250 tpy of a regulated NSR pollutant 

other than GHGs and have triggered PSD 

as a result of these emissions, subject to 

the permitting thresholds established in 

the Final Tailoring Rule described 

below. The 100/250 tpy thresholds 

previously described originate from 

section 169 of the CAA, which applies 

PSD to any ‘‘major emitting facility’’ and 

defines the term to include any source 

with a potential to emit (PTE) ‘‘any air 

pollutant’’ in an amount over 100 or 250 

tpy, depending on source category. 

EPA’s long-standing regulations limit 

the PSD applicability provision that 

refers to ‘‘any air pollutant’’ to refer to 

any ‘‘regulated NSR pollutant,’’ which 

in turn includes any air pollutant 

‘‘subject to regulation’’ under the CAA. 

Similarly, under sections 165(a)(4) and 

169(3) of the CAA, the BACT 

requirement applies to ‘‘each pollutant 

subject to regulation’’ under the CAA. 

As noted in other recent EPA actions, 

GHGs are currently ‘‘subject to 

regulation’’ under the CAA; subject, for 

PSD purposes, to specific limitations 

reflected in the definition of that term 

that EPA adopted in the Tailoring Rule. 

Thus, emissions of GHGs (including 

CO2) must be considered in determining 

whether a source is a major emitting 

facility subject to PSD, as a result of 

construction or modification, and 

whether the BACT requirement applies 

to GHGs (including CO2 as a component 

of GHGs). In light of the way these 

regulations are currently written, EPA is 

unable to exclude biogenic CO2

emissions from PSD review without 

amending the regulations. 

With respect to Title V, as noted 

previously, Title V applies to sources, 

among others, that emit 100 tons per 

year of specified quantities of ‘‘any air 

pollutant,’’ see CAA section 502(a), 

501(2)(B) and 302(g). 

2. Tailoring Rule 

a. Rationale and Requirements 

In the Tailoring Rule, EPA codified its 

interpretation that ‘‘subject to 

regulation’’ only extends to major 

sources of air pollutants subject to a 

requirement for actual control of the 

quantity of emissions of that pollutant, 

and that such a control requirement has 

taken effect and is operative to control, 

limit or restrict the quantity of 

emissions of that pollutant released 

from the regulated activity, see 75 FR at 

31606–07, and further defined ‘‘subject 

to regulation’’ such that GHGs are only 

‘‘subject to regulation’’ under certain 

circumstances defined in the Tailoring 

Rule. 

In the Tailoring Rule, EPA recognized 

that if the applicability provisions of the 

PSD and Title V programs were applied 

literally so that PSD and Title V 

requirements applied to GHG-emitting 

sources at the 100/250 tpy levels 

provided in the CAA, then the 

permitting authorities would be 

overwhelmed by the large numbers of 

permittees and many small sources 

would be unduly encumbered by the 

permitting demands. In light of those 

impacts, EPA concluded that, as a legal 

matter, Congress did not intend that the 

PSD and Title V applicability 

requirements be applied literally to all 

sources emitting GHGs over the major 

source thresholds as of January 2, 2011, 

the date by which EPA determined that 

GHGs become subject to regulation 

under the CAA as a result of the motor 

vehicle rule. Instead, EPA concluded 

that it is authorized to tailor those 

applicability requirements to apply PSD 

and Title V to such sources in a phasedin manner, starting with the largest 

sources first. 

Specifically, in the Tailoring Rule, 

EPA has implemented these PSD and 

Title V applicability provisions by 

applying the familiar two-step 

framework for interpreting 

administrative statutes recognized by 

the Supreme Court in Chevron U.S.A. 

Inc. v. NRDC, 467 U.S. 837 (1984), 

taking into account certain legal 

doctrines. Those doctrines, insofar as 

relevant to the Tailoring Rule, are (1) the 

‘‘absurd results’’ doctrine, which 

authorizes agencies to apply statutory 

requirements differently than a literal 

reading would indicate, as necessary to 

effectuate congressional intent and 


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2 ‘‘Inventory of U.S. Greenhouse Gas Emissions 

and Sinks: 1990–2008,’’ U.S. Environmental 

Protection Agency, EPA 430–R–10–006 (April 15, 

2010). http://www.epa.gov/climatechange/ 

emissions/usinventoryreport.html. 

avoid absurd results; (2) the 

‘‘administrative necessity’’ doctrine, 

which authorizes agencies to apply 

statutory requirements in a way that 

avoids impossible administrative 

burdens; and (3) the ‘‘one-step-at-atime’’ doctrine, which authorizes 

agencies to implement a regulatory 

scheme in a deliberate, step-wise 

fashion. See 75 FR 31541–31579. 

Under Chevron, the agency must, at 

step 1, determine whether Congress’ 

intent as to the specific matter at issue 

is clear, and, if so, the agency must give 

effect to that intent. 467 U.S. at 842. If 

congressional intent is not clear, then, at 

step 2, the agency has discretion to 

fashion an interpretation that is a 

reasonable construction of the statute. 

467 U.S. at 865. To determine 

congressional intent, the agency must 

first consider the words of the statutory 

requirements, and if their literal 

meaning answers the question at hand, 

then, in most cases, the agency must 

implement those requirements by those 

terms. 

However, under the ‘‘absurd results’’ 

doctrine, the literal meaning of statutory 

requirements should not be considered 

to indicate congressional intent if that 

literal meaning would produce a result 

that is senseless or that is otherwise 

inconsistent with — and especially one 

that undermines — underlying 

congressional purpose. In these cases, if 

congressional intent for how the 

requirements apply to the question at 

hand is clear, the agency should 

implement the statutory requirements 

not in accordance with their literal 

meaning, but rather in a manner that 

most closely effectuates congressional 

intent. If congressional intent is not 

clear, then an agency may select an 

interpretation that is reasonable under 

the statute. 

Under the ‘‘administrative necessity’’ 

doctrine, Congress is presumed, at 

Chevron step 1, to intend that its 

statutory directives to agencies be 

administrable, and not to have intended 

to have written statutory requirements 

that are impossible to administer. 

Therefore, under this doctrine, an 

agency may depart from statutory 

requirements that, by their terms, are 

impossible to administer, but the agency 

may depart no more than necessary to 

render the requirements administrable. 

In addition to the ‘‘absurd results’’ 

and ‘‘administrative necessity’’ 

doctrines, another judicial doctrine 

supports at least part of EPA’s Tailoring 

Rule, and that is the doctrine that 

agencies may implement statutory 

mandates one step at a time, which we 

will call the ‘‘one-step-at-a-time’’ 

doctrine. The U.S. Supreme Court 

recently described the doctrine in 

Massachusetts v. EPA, 549 U.S. 497, 524 

(2007), as follows: ‘‘Agencies, like 

legislatures, do not generally resolve 

massive problems in one fell regulatory 

swoop;’’ and instead they may 

permissibly implement such regulatory 

programs over time, ‘‘refining their 

preferred approach as circumstances 

change and as they develop a more 

nuanced understanding of how best to 

proceed.’’ 

In the Tailoring Rule, EPA closely 

considered the burdens to the 

permitting authorities of applying PSD 

and Title V to GHG-emitting sources. 

For example, EPA calculated, on a 

national basis, the workload that GHG 

permit applications would entail, and 

compared that to the existing workload 

of permitting authorities. EPA 

concluded that permitting authorities 

would be overwhelmed by permit 

applications if the PSD and Title V 

applicability thresholds were applied 

literally as of January 2, 2011, to the 

GHG emissions from stationary sources. 

In addition, EPA calculated the cost to 

the sources of permitting requirements 

and concluded that many small sources 

would become subject to unduly high 

expenses. 

Accordingly, in applying the Chevron 

analytical framework, in conjunction 

with the absurd results and 

administrative necessity doctrines, EPA 

concluded that Congress intended that 

PSD and Title V apply to the GHG 

emissions from stationary sources, but 

that, in light of the burdens to the 

permitting authority and the costs to the 

sources of determining applicability of 

permitting requirements by applying the 

statutory thresholds to GHG emissions, 

the application of the permitting 

programs should be phased in, starting 

with the largest sources of GHG 

emissions first. EPA also concluded that 

the calculation for determining which 

sources emit the ‘‘largest’’ amount of 

GHG emissions should be based on the 

amount of GHG pollutant emitted in 

tons per year, weighted by the global 

warming potential (GWP) of the 

particular GHG pollutant. 

Accordingly, in the Tailoring Rule, 

EPA established two steps to implement 

PSD and Title V. At step 1, beginning 

January 2, 2011, sources currently 

subject to PSD or Title V permitting 

programs were required to determine 

the BACT for their GHG emissions, but 

only for GHG increases of 75,000 short 

tons per year (tpy) or more of total 

GHGs, on a CO2e basis and any increase 

on a mass basis. At that time, no sources 

would be subject to CAA permitting 

requirements due solely to GHG 

emissions. At step 2, beginning July 1, 

2011, the PSD permitting requirements 

will for the first time cover new 

construction projects that will emit GHG 

emissions of at least 100,000 tpy on a 

CO2e basis (and 250 tons on a mass 

basis) even if they do not exceed the 

permitting thresholds for any other 

pollutant. Modifications at existing 

facilities that emit at that level and 

increase GHG emissions by at least 

75,000 tpy CO2e and by any amount on 

a mass basis will be subject to 

permitting requirements, even if they do 

not significantly increase emissions of 

any other pollutant. 

In addition, EPA committed to 

promulgate by July 1, 2012, another 

rulemaking—in effect, step 3 of the 

Tailoring Rule—that would consider 

whether to reduce the thresholds 

further. EPA also committed to 

promulgate another rulemaking after 

that, by April 1, 2016, that would 

consider still further action. As EPA 

stated in the Tailoring Rule, part of the 

purpose of the phase-in approach 

embodied in the Tailoring Rule is to 

allow permitting authorities time to 

acquire additional resources and to 

allow EPA time to develop streamlining 

methods and thereby enable the 

application of PSD and Title V to more 

sources in subsequent rulemakings. 

As noted previously, in the Tailoring 

Rule, EPA determined that the amount 

of each GHG emitted by a facility should 

be calculated by reference to the weight 

of the GHG emissions, in tons of CO2e 

per year for determining if GHGs were 

‘‘subject to regulation’’ for a particular 

facility and project. The Tailoring Rule 

proposal referenced EPA’s Inventory of 

U.S. Greenhouse Gas Emissions and 

Sinks (Inventory) 2 submitted annually 

to the United Nations Framework 

Convention on Climate Change 

(UNFCCC), for the applicable GWP 

values and guidance on how to calculate 

a source’s GHG emissions in tpy CO2e. 

75 FR 31514–31608. The Inventory 

includes emissions of the six GHGs in 

terms of CO2e units. By linking the 

calculation of CO2e for GHGs to GWP 

values, a facility could evaluate its total 

GHG emissions contribution based on a 

single metric. We solicited comment on 

the benefits and limitations of this 

proposed metric. 

While we referred to the Inventory for 

GWP identification purposes only, 

several commenters appeared to 

misunderstand our intent, claiming that 

the Inventory excludes CO2 emitted 

from biomass. These commenters 


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3 ‘‘Guidance for Determining Best Available 

Control Technology for Reducing Carbon Dioxide 

Emissions from Bioenergy Production,’’ U.S. EPA 

Office of Air and Radiation, March 2011. (http:// 

www.epa.gov/nsr/ghgdocs/bioenergyguidance.pdf) 

requested that, in calculations of 

emissions for determining applicability 

of PSD and Title V, EPA exempt 

emissions from biogenic activities or 

biomass combustion or oxidation 

activities, including solid waste 

landfills, waste-to-energy projects, 

fermentation processes, combustion of 

renewable fuels, ethanol manufacturing, 

biodiesel production, and other 

alternative energy production that uses 

biomass feedstocks (e.g., crops or trees). 

In particular, these commenters urged 

that EPA exclude emissions from 

biomass combustion in determining the 

applicability of PSD to such sources 

based on the notion that such 

combustion is ‘‘carbon neutral’’ (i.e., 

that combustion or oxidation of such 

materials would cause no net increase 

in GHG emissions on a lifecycle basis). 

b. Treatment of Biogenic Emissions 

In response, when finalizing the 

Tailoring Rule, we acknowledged the 

role that biomass or biogenic fuels and 

feedstocks could play in reducing 

anthropogenic GHG emissions, and did 

not dispute the commenters’ 

observations that many state, Federal, 

and international rules and policies 

treat biogenic and fossil sources of CO2

emissions differently (75 FR 31514). 

Regarding commenters’ claims that the 

Inventory excludes CO2 emissions from 

biomass, EPA noted that the Inventory 

does not exclude these emissions (see 

section II.A.2 of the preamble to the 

proposed deferral rule). Rather, they are 

included in the Land-Use, Land-Use 

Change and Forestry (LULUCF) Sector 

rather than the Energy Sector to avoid 

double-counting at the national scale. 

The narrow reference to the use of the 

Inventory’s GWP values for estimating 

GHG emissions was provided to offer 

consistent guidance on how to calculate 

these emissions and not as an 

indication, direct or implied, that 

biomass emissions would be excluded 

from permitting applicability merely by 

association with the national inventory, 

see 74 FR 55351, under the definition 

for ‘‘carbon dioxide equivalent.’’ 

We determined that our application of 

the ‘‘absurd results,’’ ‘‘administrative 

necessity,’’ and one-step-at-a-time legal 

rationales supporting the Tailoring Rule, 

based on the expected overwhelming 

permitting burdens in its absence, did 

not provide sufficient basis to exclude 

emissions of CO2 from biogenic sources 

in determining permitting applicability 

provisions at that time. We reasoned 

that such an exclusion alone, while 

reducing burdens for some sources, 

would not address the overwhelming 

permitting burdens, and a thresholdbased approach would still be needed. 

At that time, we had not examined 

burdens with respect to specific source 

categories impacted by the rule and thus 

had not analyzed the administrative 

burden of permitting projects that 

specifically involve biogenic CO2

emissions taking account of the 

threshold-based approach. Commenters 

also did not provide information to 

demonstrate that an overwhelming 

permitting burden would still exist, 

justifying a temporary exclusion for 

biomass sources. 

In the final Tailoring Rule, we 

indicated that the decision not to 

provide this type of an exclusion at that 

time did not foreclose EPA’s ability to 

either (1) provide this type of exclusion 

at a later time with additional 

information about overwhelming 

permitting burdens due to biomass 

sources, or (2) provide another type of 

exclusion or other treatment based on 

some other rationale. Although we did 

not take a final position, we noted that 

some commenters’ observations about a 

different treatment of biomass 

combustion warranted further 

exploration as a possible rationale. 

Therefore, although we did not 

establish a permanent exclusion from 

PSD or Title V applicability based on 

specific characteristics of biogenic CO2, 

we indicated our intent to seek further 

comment on how we might address 

emissions of biogenic CO2 under the 

PSD and Title V programs through a 

future action. 

We further noted that, while not 

promulgating an applicability exclusion 

for biogenic emissions and biomass 

fuels or feedstocks in the final Tailoring 

Rule, flexibility exists to apply the 

existing regulations and policies 

regarding BACT in ways that take into 

account their net effects on atmospheric 

GHG concentrations. Without 

prejudging the outcome of our process 

to seek comment on whether and how 

we might address emissions of biogenic 

carbon under the PSD and Title V 

programs through a future action, we 

indicated that this issue warranted 

further exploration. 

As mentioned earlier in the preamble, 

in order to explore the issue further 

following the promulgation of the 

Tailoring Rule, on July 15, 2010, EPA 

solicited views from the public through 

a CFI on approaches to accounting for 

biogenic CO2 emissions, on the means to 

estimate and measure CO2 emissions 

from a variety of biogenic CO2 sources 

and other information on biogenic 

sources that may be affected but not 

identified in the CFI. 

With promulgation of the Tailoring 

Rule we committed to issue technical 

and policy guidance for permitting of 

GHGs. Subsequently, the information 

gathered from stakeholders in response 

to the CFI provided diverse perspectives 

on treatment of biogenic CO2 emissions 

in pre-construction and operating 

permit reviews, including many 

requests to exclude, either partially or 

wholly, biogenic CO2 sources from PSD 

applicability determinations and BACT 

analyses on the basis of Inventory 

results and other considerations. On 

November 10, 2010, EPA issued the 

draft ‘‘PSD and Title V Permitting 

Guidance for Greenhouse Gases’’ which 

provides the basic information that 

permit writers and applicants need to 

address GHG emissions in permits. 

Within the November guidance, EPA 

acknowledged the numerous 

stakeholder comments on biogenic CO2

BACT analyses and provided general 

guidance to permitting authorities to 

consider environmental, energy, and 

economic benefits that may accrue from 

the use of certain types of biomass (e.g., 

biogas from landfills for energy 

generation), consistent with existing air 

quality standards. We also committed to 

provide more detailed technical and 

policy guidance early in 2011 for 

completing step 4 of a ‘‘top-down’’ 

BACT analysis for GHG emissions from 

certain types of biomass sources to 

enable permitting authorities to simplify 

and streamline BACT determinations for 

such sources. EPA provided interim 

guidance on this topic in March 2011, 

concurrent with the proposal of this rule 

to assist permitting authorities before 

the deferral becomes effective.3

Noting that a variety of Federal and 

state policies have recognized that some 

types of biomass can be part of a 

national strategy to reduce dependence 

on fossil fuels and to reduce emissions 

of GHGs, EPA has determined that it is 

appropriate for permitting authorities to 

account for both existing Federal and 

state policies and their underlying 

objectives in evaluating the 

environmental, energy and economic 

benefits of biomass fuel. Based on these 

considerations, permitting authorities 

might determine that the use of certain 

types of biomass alone meets the BACT 

requirement for GHGs. 

As described in the Background 

section of this preamble, NAFO 

petitioned the EPA on August 3, 2010 to 

reconsider and stay the implementation 

of the PSD and Title V GHG Tailoring 

Rule. Pending reconsideration, 

petitioners requested that the 

application of the PSD and Title V 


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43496 Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Rules and Regulations 

permitting programs to emissions of CO2

from biomass be stayed. 

Based on consideration of the 

petitioners’ arguments, together with the 

weight of the comments received on the 

CFI, EPA concluded that the issue of 

accounting for the net atmospheric 

impact of biogenic CO2 emissions is 

complex enough that further 

consideration of this important issue is 

warranted. Therefore, EPA granted the 

petition on January 12, 2011. 

However, EPA did not grant the 

request for an administrative stay of the 

Tailoring Rule, because the rule is 

critical for making overall 

implementation of the PSD program 

feasible. Furthermore, an administrative 

stay of the statements in the preamble 

of the Tailoring Rule that describe EPA’s 

initial determination not to exempt 

emissions of CO2 from biomass would 

not provide the requested relief of 

excluding emissions of CO2 from 

biomass from the PSD and Title V 

permitting programs. The effect of a stay 

of this or any other aspect of the 

Tailoring Rule would be to return to the 

legal regime that existed before EPA’s 

issuance of a final Tailoring Rule. As no 

exemption for emissions of CO2 from 

biomass existed prior to the final rule, 

an administrative stay would not result 

in an exemption from the requirements 

of PSD and Title V. 

3. Rationale in Support of Interim 

Biomass Deferral 

a. Regulation at This Time Is Not 

Justified 

Since finalizing the Tailoring Rule, 

EPA has gathered additional 

information concerning biomass 

through the CFI and in response to the 

proposal for this rule. The information 

collected to this point underscores the 

complexity and uncertainty associated 

with accounting for biogenic emissions 

of CO2 and indicates that at present 

attempting to determine the net carbon 

cycle impact of particular facilities 

combusting particular types of biomass 

feedstocks would require extensive 

analysis and would therefore entail 

extensive workload requirements by 

many of the permitting authorities. In 

contrast to other sources of GHG 

emissions, these uncertainties and 

complexities are exacerbated because of 

the unique role and impact biogenic 

sources of CO2 have in the carbon cycle. 

Further, methodologies are not 

sufficiently developed to assure that 

various permitting authorities would be 

able to perform the necessary 

calculations reasonably and consistently 

to determine the net atmospheric impact 

in many, if not all, instances. 

The extensive workload requirements 

required to understand the net biogenic 

CO2 emissions from bioenergy facilities 

and other sources of biogenic CO2

emissions, as part of the PSD and Title 

V permit process, including specifically 

how to measure and account for 

biogenic CO2 emissions, would 

unnecessarily strain the resources of the 

affected permitting authorities and 

result in delays in processing permits 

for other applicants. Moreover, at 

present, devoting these limited 

permitting authority resources to 

biomass sources would not be 

productive in light of the possibility that 

EPA may ultimately determine that the 

utilization of some or all biomass 

feedstocks for bioenergy has a negligible 

(or de minimis), negative, or positive net 

impact on the carbon cycle. 

Therefore, the information EPA has 

collected since promulgating the 

Tailoring Rule indicates that it is 

consistent with the rationale of the 

Tailoring Rule for affected permitting 

authorities to defer on a temporary basis 

biogenic CO2 emissions from PSD and 

Title V applicability. During this 

deferral, EPA will conduct a detailed 

examination of the science associated 

with biogenic CO2 emissions from 

stationary sources, which will include a 

peer review by the SAB, and resolve 

technical issues in order to account for 

biogenic CO2 emissions in ways that are 

scientifically sound and also 

manageable in practice. 

As noted previously, EPA based the 

Tailoring Rule on the extreme 

administrative burdens to permitting 

authorities, and undue costs to sources, 

that would result from a literal 

application of the PSD and Title V 100/ 

250 tpy statutory thresholds, as of 

January 2, 2011, when those 

requirements first applied to GHGs. EPA 

reasoned that, in accordance with the 

Chevron analytical framework for 

statutory construction, taking into 

account the ‘‘absurd results’’ and 

‘‘administrative necessity’’ lines of 

cases, Congress did not intend that the 

PSD and Title V requirements apply at 

the 100/250 tpy statutory thresholds to 

GHG-emitting sources as of January 2, 

2011, but rather that those requirements 

could be limited, at least initially, 

through a phase-in approach, to higheremitting sources. 

Just as the extensive workload of 

processing permit applications from 

sources below the Tailoring Rule 

thresholds justified exempting those 

sources at least from the initial steps in 

the Tailoring Rule phase-in program, so 

too the extensive workload associated 

with analyzing and accounting for 

biogenic CO2 emissions as part of 

processing permit applications from 

biomass facilities justifies exempting 

those sources for a period of time, in the 

affected states, pending EPA’s 

development of a consistent and 

practical framework for determining net 

carbon cycle impacts. The three-year 

deferral EPA is finalizing in this action 

is reasonable to allow time for the 

development of the accounting 

framework and subsequent rulemaking. 

In effect, this deferral is a step back 

from the Tailoring Rule’s approach but 

the decision to defer the applicability of 

PSD and Title V to biogenic CO2

emissions is nonetheless supported, in 

part, on the same rationale as EPA used 

to justify the Tailoring Rule’s phase-in 

approach. This action constitutes a 

refinement of the approach EPA has 

taken to regulate GHG emissions from 

stationary sources through a phased-in 

approach, based on an evolving 

understanding of the complexities, 

uncertainties, and nuances associated 

with biogenic emissions. 

An alternative way to reduce the 

permitting burden would be to apply 

PSD and Title V to all facilities with 

biogenic CO2 emissions that emit at or 

above the Tailoring Rule thresholds, but 

without making any effort to take into 

account net carbon cycle impacts. 

However, we believe that it is 

conceivable that as a result of the 

scientific examination of biogenic CO2

emissions, we could conclude that the 

net carbon cycle impact for some 

biomass feedstocks is trivial, negative, 

or positive. Accordingly, this could 

result in regulation of sources with 

trivial or positive impacts on the net 

carbon cycle, as previously discussed. 

To avoid this outcome, given our 

current state of knowledge, we believe 

a case-by-case net carbon cycle impact 

analysis would be required in the course 

of reviewing each permit application. 

This burden would be in addition to the 

currently existing burden associated 

with obtaining a PSD or Title V permit. 

In light of the permitting burdens 

assessed in the Tailoring Rule, adding to 

that burden in many states would 

frustrate the goals we sought to 

accomplish in the Tailoring Rule to 

ensure that the PSD and Title V 

programs can be administered in each 

state. 

Furthermore, given the potential that 

the utilization of at least some biomass 

feedstocks may have a negligible impact 

on the net carbon cycle, engaging in this 

type of burdensome analysis may not be 

an optimal use of the limited resources 

of PSD and Title V permitting 

authorities. The additional scientific 

examination being undertaken by the 

EPA could ultimately conclude that 


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Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Rules and Regulations 43497 

such resources could have been more 

effectively utilized to target CO2

emissions that clearly have a 

detrimental impact on the net carbon 

cycle. Establishing a three-year deferral 

period for biogenic CO2 emissions will 

enable EPA to consider the results of the 

detailed examination of the science of 

these emissions and undertake a 

rulemaking to determine the best way to 

account for biogenic CO2 emissions 

when determining PSD applicability. 

Another important reason for the 

three-year deferral period is to allow 

sufficient time to consider the unique 

characteristics and attributes of biogenic 

CO2 feedstocks, as opposed to other 

sources of GHG, using the results from 

the detailed examination mentioned 

previously, within both the state 

permitting agencies and affected 

facilities. While the interim BACT 

guidance described previously will help 

alleviate some of this burden before the 

deferral becomes effective, we expect 

that more and more diverse users of 

biomass combustion or other biogenic 

CO2 sources are likely to be affected 

under step 2 of the Tailoring Rule 

because, under step 2, these sources can 

trigger permitting requirements based 

solely on their GHG emissions with no 

prerequisite requirement that they 

otherwise trigger PSD or Title V 

permitting requirements for a non-GHG 

pollutant. We believe, absent the 

deferral period and the completion of 

EPA’s full analysis of the unique 

technical issues associated with these 

diverse facilities emitting biogenic CO2, 

that it would be particularly challenging 

for many of the permitting authorities 

and facilities to process permits 

involving these emissions. Also, as 

described elsewhere in this preamble, 

this interim deferral is intended to 

temporarily exclude biogenic CO2

emissions from the definition of 

‘‘subject to regulation,’’ as that term was 

defined for purposes of the Tailoring 

Rule, for a period of three years, while 

EPA further considers, through notice 

and comment rulemaking, the approach 

to accounting for these emissions on a 

permanent basis. 

b. One-Step-at-a-Time Doctrine 

EPA relied, in part, on the ‘‘one-stepat-a-time’’ doctrine, which authorizes 

agencies to implement statutory 

requirements a step at a time, in 

finalizing the Tailoring Rule. 75 FR 

31514, 31578 (June 3, 2010). As 

described in the Tailoring Rule and 

earlier in the preamble, the case law 

recognizing the ‘‘one-step-at-a-time’’ 

doctrine, within the Chevron 

framework, justifies an agency’s step-bystep approach under the following 

circumstances or conditions: (1) The 

agency’s ability to comply with a 

statutory directive depends on facts, 

policies, or future events that are 

uncertain; (2) the agency has estimated 

the extent of its remaining obligation; 

(3) the agency’s incremental actions are 

structured in a manner that is 

reasonable in light of the uncertainties; 

and (4) the agency is on track to full 

compliance with the statutory 

requirements. 

In the proposed rule, EPA stated in 

footnote 13 that the ‘‘one-step-at-a-time’’ 

doctrine was not relevant to this 

rulemaking. This statement was made 

without explanation. One commenter 

(EPA–HQ–OAR–2011–0083–0084) 

stated ‘‘[b]ased on EPA’s statements in 

the Tailoring Rule, which does rely on 

the ‘one-step-at-a-time’ doctrine, it 

appears that the doctrine would apply 

equally well to EPA’s decision to delay 

regulation of biogenic CO2 emissions 

under the PSD and Title V programs.’’ 

For the reasons stated below, EPA now 

agrees that, because of the complexity 

and uncertainty of the science 

associated with accounting for biogenic 

sources of CO2, the interim deferral of 

the PSD and Title V program for such 

emissions would be a reasonable 

exercise of the ‘‘one-step-at-a-time’’ 

doctrine. 

First, as the DC Circuit stated in 

National Association of Broadcasters v. 

FCC, 740 F.2d 1190, 1210 (DC Cir. 1984) 

(‘‘National Association of 

Broadcasters’’), incremental agency 

action is most readily justifiable 

‘‘against a shifting background in which 

facts, predictions, and policies are in 

flux and in which an agency would be 

paralyzed if all the necessary answers 

had to be in before any action at all 

could be taken.’’ Those circumstances 

are present here, and so is the fact that 

the task at hand is extraordinarily 

demanding. As discussed previously, 

EPA is in the process of conducting a 

detailed examination of the science 

associated with biogenic CO2 emissions 

from stationary sources to better 

understand their role on the carbon 

cycle and to develop an accounting 

framework for use by permitting 

authorities and sources. This 

examination will include discussion 

with partners and scientists both inside 

and outside the Federal government, as 

well as engagement with the Science 

Advisory Board, to consider technical 

issues that the Agency must resolve in 

order to account for biogenic CO2

emissions in ways that are scientifically 

sound and also manageable in practice. 

Second, as the Court stated in 

National Association of Broadcasters, 

‘‘the agency [should] ma[k]e some 

estimation, based upon evolving 

economic and technological conditions, 

as to the nature and magnitude of the 

problem it will have to confront when 

it comes to [undertake the remaining 

steps]’’ and that estimation must be 

‘‘plausible and flow from the factual 

record compiled.’’ Id. at 1210. Here, 

EPA has done this by deferring the 

applicability of PSD and Title V to 

biogenic emissions of CO2 from 

stationary sources for only as long as 

necessary for EPA to complete the 

needed scientific study of these 

emissions, develop an accounting 

framework, and as appropriate conduct 

rulemaking specific to the unique nature 

and characteristics of these emission 

sources. 

In order to explore the issues further 

following the promulgation of the 

Tailoring Rule, on July 15, 2010, EPA 

solicited views from the public through 

the CFI on approaches to accounting for 

biogenic CO2 emissions, including 

whether some or all of a source’s 

biogenic CO2 emissions could be 

discounted based on a determination 

that they are canceled out by the CO2

absorption associated with growing the 

fuel (75 FR 41173). Also, we solicited 

information on the means to estimate 

and measure CO2 emissions from a 

variety of biogenic CO2 sources that 

typically have not been part of emission 

inventories (e.g., CO2 from landfills, 

livestock management, and fermentation 

processes), as well as information on 

other biogenic sources that may be 

affected but which were not identified 

specifically in the CFI. 

With promulgation of the Tailoring 

Rule, we committed to issue technical 

and policy guidance for permitting of 

GHGs. Subsequently, the information 

gathered from stakeholders in response 

to the CFI provided diverse perspectives 

on treatment of biogenic CO2 emissions 

in pre-construction and operating 

permit reviews, including many 

requests to exclude, either partially or 

wholly, biogenic CO2 sources from PSD 

applicability determinations and BACT 

analyses on the basis of Inventory 

results and other considerations. 

Third, again as the Court stated in 

National Association of Broadcasters, it 

must be ‘‘reasonable, in the context of 

the decisions made in the proceeding 

under review, for the agency to have 

deferred the issue to the future. With 

respect to that question, postponement 

will be most easily justified when an 

agency acts against a background of 

rapid technical and social change and 

when the agency’s initial decision as a 

practical matter is reversible should the 

future proceedings yield drastically 

unexpected results.’’ Id. at 1211. Here, 


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our deferral is reasonable in light of the 

technical and scientific questions that 

are raised by biogenic emissions from 

stationary sources, which will be 

addressed by EPA’s ongoing study, 

development of an accounting 

framework, and any subsequent 

rulemaking. As explained in the 

proposal and elsewhere in the preamble 

to this final rule, EPA believes it has the 

authority to exclude biogenic CO2

emissions from the PSD and Title V 

requirements for the proposed threeyear deferral period and will be 

exploring whether a permanent 

exemption is appropriate for at least 

some and perhaps all types of 

feedstocks. 

However, the possibility also remains 

that more detailed examination of the 

science of biogenic CO2 will 

demonstrate that the utilization of some 

biomass feedstocks for bioenergy 

production will have a significant 

impact on the net carbon cycle, making 

literal application of the PSD program 

requirements to such emissions, 

consistent with the Tailoring Rule, 

necessary to fulfill congressional intent. 

Thus, EPA is finalizing only a 

temporary, rather than a permanent, 

deferral of PSD requirements for such 

sources at this time. EPA notes that the 

issue of subsequent applicability of the 

PSD and Title V programs to facilities 

that may be permitted during the 

deferral period is discussed in more 

detail in section II.C. 

Finally, as the DC Circuit stated in 

Grand Canyon Air Tour Coalition v. 

F.A.A., 154 F.3d 455, 477–78 (DC Cir. 

1998), the Courts will accept an initial 

step towards full compliance with a 

statutory mandate, as long as the agency 

is headed towards full compliance, and 

we now believe that the doctrine is 

applicable here. 

As we have described in the CFI, the 

preamble to the proposed deferral and 

elsewhere in the preamble for this final 

rule, there is little question as to the 

complexity in accounting for and 

understanding the impact of biogenic 

CO2 emissions from stationary sources 

on net atmospheric CO2 emissions such 

that sources and permitting authorities 

may not reasonably be expected to 

comply with or implement PSD and 

Title V applicability requirements in the 

near term. As described elsewhere in 

this preamble, the deferral is limited to 

three years, and EPA may, before the 

expiration of the deferral, undertake 

additional rulemaking to clarify the 

applicability of PSD and Title V 

permitting requirements for specific 

categories of biogenic emissions as may 

be appropriate based on the scientific 

record EPA is currently developing. See 

Grand Canyon Air Tour, 891 F.2d at 

476–77 (upholding agency action as a 

step towards full compliance with 

statutory mandate when the agency 

expected full compliance to occur some 

20 years after the deadline in the 

statute). 

This rulemaking constitutes an initial 

step toward full compliance, and, seen 

in that light, is supported by the ‘‘onestep-at-a-time’’ doctrine. 

c. EPA Not Required to Regulate Where 

Benefits of Regulation Would Be Trivial 

EPA believes it has the authority to 

exclude biogenic CO2 emissions from 

the PSD and Title V requirements, if 

scientific analysis supports conclusions 

about the nature of biogenic CO2 in 

question that in turn support such an 

exclusion; the agency will be using the 

three-year deferral period to better 

understand the science associated with 

biogenic CO2 emissions and to explore 

whether or not a permanent exemption 

is permissible for at least some and 

perhaps all types of feedstocks. 

Courts have recognized that 

administrative agencies have the 

implied authority to establish 

exemptions ‘‘when the burdens of 

regulation yield a gain of trivial or no 

value.’’ Alabama Power Co. v. Costle, 

636 F.2d 323, 360 (DC Cir. 1980). In this 

decision that specifically addressed the 

requirements of the PSD program, the 

DC Circuit described this principle as 

follows: 

Categorical exemptions may also be 

permissible as an exercise of agency power, 

inherent in most statutory schemes, to 

overlook circumstances that in context may 

fairly be considered de minimis. It is 

commonplace, of course, that the law does 

not concern itself with trifling matters, and 

this principle has often found application in 

the administrative context. Courts should be 

reluctant to apply the literal terms of a statute 

to mandate pointless expenditures of effort. 

Id. (internal citations omitted). 

In an earlier case cited by the court in 

Alabama Power, the court described the 

doctrine as follows: 

The ‘de minimis’ doctrine that was 

developed to prevent trivial items from 

draining the time of the courts has room for 

sound application to administration by the 

Government of its regulatory programs. 

* * * The ability, which we describe here, 

to exempt de minimis situations from a 

statutory command is not an ability to depart 

from the statute, but rather a tool to be used 

in implementing the legislative design. 

District of Columbia v. Orleans, 406 F.2d 957, 

959 (1968). 

In this respect, the Alabama Power 

opinion observed in a footnote that the 

de minimis principle ‘‘is a cousin of the 

doctrine that, notwithstanding the ‘plain 

meaning’ of a statute, a court must look 

beyond the words to the purpose of the 

act where its literal terms lead to 

‘absurd or futile results.’ ’’ Id. at 360 n. 

89 (citations omitted). 

To apply an exclusion based on the de 

minimis doctrine, ‘‘the agency will bear 

the burden of making the required 

showing’’ that a matter is truly de 

minimis which naturally will turn on 

the assessment of particular 

circumstances. Id. The Alabama Power 

opinion concluded that ‘‘most 

regulatory statutes, including the CAA, 

permit such agency showings in 

appropriate cases.’’ Id. 

A notable limitation on the de 

minimis doctrine is that it does not 

authorize the agency to exclude 

something on the basis of a cost-benefit 

analysis. As the court explained, this 

‘‘implied authority is not available for a 

situation where the regulatory function 

does provide benefits, in the sense of 

furthering the regulatory objectives, but 

the agency concludes that the 

acknowledged benefits are exceeded by 

the costs.’’ Id. The court held that any 

‘‘implied authority to make cost-benefit 

decisions must be based not on a 

general doctrine but on a fair reading of 

the specific statute, its aims and 

legislative history.’’ Id. 

Since Chevron, several courts have 

recognized de minimis exceptions (1) so 

long as they are not contrary to the 

express terms of the statute and (2) the 

agency’s interpretation of the exception 

is a permissible reading of the statute. 

See e.g., Ober v. Whitman, 243 F.3d 

1190 (9th Cir. 2001); see also Ohio v. 

EPA, 997 F.2d 1520 (D.C. Cir. 1993). 

The CAA is not so rigid as to preclude 

a de minimis exception. Since the early 

years of the PSD program, EPA has 

applied this de minimis principle to 

establish various types of values in the 

PSD regulations that may be used to 

exempt categories of source from all or 

part of the PSD program requirements. 

EPA also relied on the de minimis 

doctrine to establish values that 

permitting authorities can use to show 

that a source that requires a PSD permit 

meets the necessary criteria to obtain a 

permit. Significant impact levels may be 

used in particular ways identified in 

prior EPA rules and guidance as part of 

an assessment of whether a source 

causes or contributes to a violation of air 

quality standards. Significant 

monitoring concentrations may be used 

to exempt sources from pre-construction 

monitoring requirements. See 75 FR 

64864, 64890–97 (October 20, 2010). 

Due to the complexity and 

uncertainty of the science associated 

with accounting for biogenic CO2

emissions and their impact on the 

carbon cycle and net atmospheric CO2


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levels, requiring regulation of biogenic 

sources of CO2 at this time may lead to 

only trivial environmental benefits 

while exacerbating the regulatory 

burdens and absurd results the Tailoring 

Rule was intended to avoid because the 

subsequent scientific study may show 

that certain biogenic feedstocks have a 

trivial or even positive impact on net 

atmospheric CO2 levels. 

d. Potential for Some Biomass 

Feedstocks To Have a de minimis, 

Neutral or Positive Impact on Net CO2

Levels in the Atmosphere 

As discussed previously in this 

preamble, EPA believes based on 

information currently before the Agency 

that at least some biomass feedstocks 

that may be utilized to produce energy 

or other products have a negligible 

impact on the net carbon cycle, or 

possibly even a positive net effect. 

Within the context of the PSD and Title 

V programs, the argument for treating 

CO2 emissions from bioenergy and 

biogenic sources differently from fossilbased CO2 emissions at the facility relies 

on the premise that sequestration occurs 

offsite, outside the boundaries of the 

facility. Such a negligible or positive 

impact on the carbon cycle and net 

atmospheric CO2 levels should not 

count towards the PSD and Title V 

applicability requirements. It appears 

that the potential may exist for EPA to 

determine that other types of biomass 

feedstocks would have a negligible 

impact on the net carbon cycle impact 

after further detailed examination of the 

science associated with biogenic CO2

emissions. 

Thus, if EPA were to require all 

bioenergy facilities or other sources of 

biogenic CO2 emissions to limit 

emissions of CO2 before this assessment 

is complete, it may later determine that 

such actions have required regulation of 

a trivial amount of emissions or even 

potentially of emissions that are 

associated with a net CO2 emissions 

benefit. To avoid this outcome, and 

because of the scientific uncertainty and 

administrative burdens associated with 

accounting for net biogenic CO2

emissions relative to the carbon cycle, 

EPA believes an initial deferral of the 

PSD requirements for bioenergy and 

other biogenic sources is justified at this 

time to conduct the detailed scientific 

evaluation described elsewhere in the 

preamble. However, the possibility also 

remains that EPA’s detailed 

examination of the science of biogenic 

CO2 will demonstrate that the 

utilization of some biomass feedstocks 

for bioenergy production will have a 

significant impact on the net carbon 

cycle, making application of the PSD 

program requirements to such emissions 

necessary to fulfill congressional intent. 

Thus, EPA is finalizing only a 

temporary, rather than a permanent, 

deferral of PSD requirements at this 

time in order for EPA to conduct a study 

of the science surrounding biogenic CO2

emissions and their role in the carbon 

cycle and to develop an accounting 

framework to help further relieve the 

burdens faced by permitting authorities. 

EPA is also seeking an independent peer 

review of the science and accounting 

framework by the Science Advisory 

Board to resolve the uncertainties that 

have been highlighted by commenters in 

response to the CFI and the proposal to 

this action. 

C. Facilities Permitted During Deferral 

The final rule is an interim deferral 

for biogenic CO2 emissions only and 

does not relieve sources of the 

obligation to meet the PSD and Title V 

permitting requirements for other 

pollutant emissions that are otherwise 

applicable to the source during the 

deferral period or that may be 

applicable to the source at a future date 

pending the results of EPA’s study and 

subsequent rulemaking action. 

This means, for example, that if the 

deferral is applicable to biogenic CO2

emissions from a particular source 

during the three-year effective period 

and the study and future rulemaking do 

not provide for a permanent exemption 

from PSD and Title V permitting 

requirements for the biogenic CO2

emissions from a source with particular 

characteristics, then the deferral would 

end for that type of source and its 

biogenic CO2 emissions would have to 

be appropriately considered in any 

applicability determinations that the 

source may need to conduct for future 

stationary source permitting purposes, 

consistent with that subsequent 

rulemaking and the Final Tailoring Rule 

(e.g., a major source determination for 

Title V purposes or a major modification 

determination for PSD purposes). 

EPA also wishes to clarify that we did 

not propose and this rule does not 

require that a PSD permit issued during 

the deferral period be amended or that 

any PSD requirements in a PSD permit 

existing at the time the deferral takes 

effect, such as BACT limitations, be 

revised or removed from an effective 

PSD permit for any reason related to the 

deferral or when the deferral period 

expires. 

Section 52.21(w) requires that any 

PSD permit shall remain in effect, 

unless and until it expires or it is 

rescinded, under the limited conditions 

specified in that provision. Also note 

that we did not specifically propose or 

make final any change to these 

rescission provisions, nor were they 

addressed to any extent in the proposal. 

Thus, a PSD permit that is issued to a 

source while the deferral was effective 

need not be reopened or amended if the 

source is no longer eligible to exclude 

its biogenic CO2 emissions from PSD 

applicability after the deferral expires. 

However, if such a source undertakes a 

modification that could potentially 

require a PSD permit and the source is 

not eligible to continue excluding its 

biogenic CO2 emissions after the 

deferral expires, the source will need to 

consider its biogenic CO2 emissions in 

assessing whether it needs a PSD permit 

to authorize the modification. With 

respect to Title V, a source that becomes 

a major source subject to an approved 

Title V permit program as a result of 

biogenic emissions after the deferral 

expires would generally have one year 

from the date the source became subject 

to Title V to apply for an operating 

permit. 

Any future actions to modify, shorten, 

or make permanent the deferral for 

biogenic sources are beyond the scope 

of this action and will be addressed 

through subsequent rulemaking, based 

on the scientific study and development 

of an accounting framework described 

elsewhere in this preamble. At this time, 

the results of EPA’s review of the 

science related to net atmospheric 

impacts of biogenic CO2 and the 

framework to properly account for such 

emissions in Title V and PSD permitting 

programs based on the study are 

prospective and unknown. Thus, we are 

unable to predict which biogenic CO2

sources, if any, currently subject to the 

deferral would be subject to any 

permanent exemptions or which 

currently deferred sources would be 

potentially required to account for their 

emissions in the future rulemaking EPA 

has committed to undertake for such 

purposes in three or fewer years. Only 

in that rulemaking can EPA address the 

question of extending the deferral or 

putting in place requirements that 

would have the equivalent effect on 

sources covered by this deferral. 

To the extent the deferral is not 

effective in a particular state at the time 

a PSD permit is issued, then the permit 

would need to include BACT 

limitations for GHGs if the source emits 

above levels that make GHGs subject to 

regulation under applicable rules. EPA 

issued interim guidance entitled, 

‘‘Guidance for Determining Best 

Available Control Technology for 

Reducing Carbon Dioxide Emissions 

from Bioenergy Production’’ to help 

permitting authorities, during the 

interim period before the deferral is 


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effective, establish a basis for 

concluding that under PSD Programs 

the combustion of biomass fuels can be 

considered BACT for biogenic CO2

emissions at stationary sources. To be 

clear, this guidance would apply during 

the deferral period for those permitting 

authorities where the deferral was not 

effective until EPA revises it or it is 

superseded by future guidance or rules. 

D. Mechanism for Deferral and State 

Implementation 

Consistent with the proposed rule, 

EPA is implementing the deferral by 

amending the definition of ‘‘subject to 

regulation’’ in its PSD and Title V 

regulations. The adoption of the deferral 

for biogenic CO2 emissions from Title V 

and PSD permitting programs under 40 

CFR part 70 and 40 CFR 51.166 is 

optional for any state, local, or tribal 

(state) permitting authority, but is 

effective immediately upon publication 

for Title V and PSD permitting programs 

under 40 CFR part 71 and 40 CFR 52.21 

that EPA implements. 

The proposal did not specifically 

require each state to revise its PSD and 

Title V permitting programs (required 

under parts 51.166 and 70) to impose 

the deferral for three years, although it 

was clear that the proposal was 

intended to revise the permitting 

programs that EPA implements 

(required under parts 52.21 and part 71) 

for this purpose, and it was clear that 

EPA intended to implement the deferral 

by changing its implementing 

regulations. Many state commenters on 

the proposal seemed to assume that the 

deferral was mandatory for the states 

and questioned how they would revise 

their SIPs and Title V programs by July 

1, 2011, as they read EPA’s proposal to 

require. 

For the purposes of this final rule, 

EPA is clarifying that each state may 

decide if it wishes to adopt the deferral 

and proceed accordingly, with 

appropriate program changes, if needed. 

Also, EPA suggests that each state 

communicate with its stationary sources 

its intent in this regard. Because the 

deferral is not required, states that do 

not wish to revise their current permit 

programs do not need to make any 

program changes in response to this 

final rule. Also, states that do wish to 

adopt the deferral do not need to make 

any changes that would otherwise be 

necessary by July 1, 2011, the start of 

step 2 under the Tailoring Rule. 

Although the preamble for the proposal 

did discuss the beginning of step 2 of 

the Tailoring Rule as a time when more 

sources would be subject to permitting, 

because sources could be subject to Title 

V without a prerequisite that they also 

be subject to PSD and because they 

could be subject to PSD for GHGs 

without being subject first for another 

regulated NSR pollutant, it did not 

discuss any requirement for any state 

deferral to be effective by July 1, 2011, 

and we are not requiring this in this 

final rule. 

However, although state program 

changes are not required under today’s 

final rule, EPA sees several reasons that 

a state should adopt the deferral in its 

state programs and, based on comments 

received, EPA expects that many states 

will adopt the deferral. Many of these 

reasons are the same reasons prompting 

EPA to adopt the deferral for the permit 

programs we implement. That is, states 

that expect to receive permit 

applications from a number of biomass 

facilities, and, in particular, a number of 

different types of biomass facilities, are 

likely to need more time to determine 

how best to address technical, scientific, 

and practical issues related to biogenic 

CO2 without disrupting the proper 

functioning and timeliness of the 

permitting programs. Of course, it is at 

least in theory possible that such a state 

may, on its own, be able to address 

those issues, or may for other reasons 

have adequate resources to address 

those issues. Even so, we expect that 

many states will need to, and therefore 

should, adopt the deferral, and 

therefore, like the proposal, this final 

rule strongly encourages states that wish 

to adopt the three-year deferral to 

submit SIP revisions or Title V program 

revisions. However, like the proposal, 

this final rule does not mandate such 

submittals, recognizing that some states 

may not have any (or may have only a 

few) sources that combust biomass, and 

may have adequate information and 

resources regarding the nature of 

biogenic emissions from those sources, 

or may for other reasons be able to 

conduct permitting of bioenergy sources 

without straining their permitting 

resources. 

Furthermore, the justification that 

supports this deferral for including 

biogenic CO2 in PSD applicability 

determinations is not applicable in the 

case of a PSD permit that was issued 

before completion of this rule during 

step 1 of the phase in of GHG 

requirements under the Tailoring Rule. 

If a permit has been issued, then the 

burden described above has already 

been experienced and overcome by the 

permitting authority. Furthermore, this 

burden will have been experienced in 

the context of step 1 of the GHG 

permitting phase under the Tailoring 

Rule, and thus was easier to 

accommodate as part of the more 

limited increase in workload that 

permitting authorities have faced in 

addressing GHG requirements during 

step 1. In the context of step 2 where 

permitting authorities will have to 

process a greater number of permit 

applications, the incremental burden of 

evaluating the net atmospheric impacts 

of biogenic CO2 has a more significant 

impact on the ability of permitting 

authorities to administer the permitting 

programs. This analysis adds a burden 

that EPA had not considered when it 

completed the Tailoring Rule. 

EPA also issued interim guidance 

entitled, ‘‘Guidance for Determining 

Best Available Control Technology for 

Reducing Carbon Dioxide Emissions 

from Bioenergy Production’’ to help 

permitting authorities establish a basis 

for concluding that under the PSD 

Program the combustion of biomass 

fuels can be considered BACT for 

biogenic CO2 emissions at stationary 

sources until such time as the deferral 

becomes effective. EPA wishes to clarify 

that the guidance is non-binding and 

case-by-case BACT determinations 

made in accordance with the guidance 

may nonetheless be subject to challenge 

in each permitting action. Accordingly, 

the interim guidance does not provide 

the same level of certainty to sources 

and decrease in administrative burdens 

to permitting authorities and sources 

that the deferral does. 

EPA developed the interim BACT 

guidance primarily for application 

during step 1 of the phase of GHG 

permitting requirements under the 

Tailoring Rule. While the guidance 

suggests reasoning that may serve to 

reduce the resource demands of 

conducting a net carbon cycle analysis 

in the context of permitting, it does not 

eliminate the need for permitting 

authorities to conduct some evaluation 

of energy, environmental, and economic 

impacts in step 4 of the BACT analysis. 

The guidance discusses the 

complexities of conducting a net carbon 

cycle analysis, but places the emphasis 

on showing the economic and energy 

benefits of utilizing biomass. Permitting 

authorities that apply this approach still 

need to identify the specific energy and 

economic benefits of utilizing particular 

biomass feedstocks to apply this 

rationale. To the extent these benefits 

cannot be identified or shown to 

override other considerations, a 

permitting authority may need to 

explore the net carbon cycle impact in 

more depth to justify the conclusion 

that utilization of a biomass feedstock is 

BACT by itself. In states that do not 

elect to adopt the deferral, the 

incremental burden of conducting the 

analysis described in the guidance will 

have a more significant impact on the 


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overall ability to administrate the 

permitting program in the context of 

step 2 of the GHG permitting than it did 

in step 1, in which the overall increase 

in workload from incorporating GHG 

requirements into PSD permit reviews 

was less than it will be in step 2. 

This deferral may not be effective in 

any jurisdiction before EPA publishes a 

final rule and it takes effect. Also, for 

any state that found it necessary to 

revise its permitting programs to 

implement the Final Tailoring Rule, 

EPA believes it unlikely that such a 

state would be able to implement the 

deferral under its state rules without 

making additional changes to its 

program consistent with the regulatory 

changes in this final rule. For any state 

that was able to implement the Final 

Tailoring Rule through interpretation of 

the term ‘‘subject to regulation’’, 

consistent with the Final Tailoring Rule, 

without making any changes to state 

regulations, EPA believes it is likely 

they would be able to implement the 

deferral under their state rules without 

making additional revisions. In either of 

these cases, EPA recommends that states 

communicate with the stationary 

sources under their jurisdiction 

regarding whether they intend to adopt 

the deferral, and if they do, when it will 

become effective. 

III. Response to Public Comments 

A. Overview of Public Comments 

We received a significant number of 

public comments on the proposed 

deferral. Some of these comments 

covered issues such as: 

• Content of the Deferral (e.g., pollutants 

and sources covered, start and end date, 

terminology); 

• Implementation of the Deferral; and 

• Legal Authority. 

While those comments addressed the 

deferral itself, a large number of the 

comments actually raised issues outside 

the scope of this rulemaking and 

covered topics such as: 

• Science, accounting, and economic 

issues related to biogenic CO2 emissions (e.g., 

carbon cycle dynamics, accounting 

methodologies, forest economics and 

sustainability); 

• PSD, Title V and the Tailoring Rule; and 

• The Interim Guidance, ‘‘Guidance For 

Determining Best Available Control 

Technology for Reducing Carbon Dioxide 

Emissions From Bioenergy Production’’ 

(March 21, 2011). 

EPA acknowledges those comments 

that are outside the scope of this 

rulemaking and notes that many of the 

issues raised were similar, if not 

identical, to those presented in 

comments to the CFI last year. We will 

be considering those topics as part of 

the detailed examination of the science 

and technical issues associated with 

accounting for biogenic CO2 emissions 

from stationary sources. We also may 

consider the issues in any subsequent 

rulemakings we undertake related to the 

PSD, Title V and other stationary source 

programs. However, we do not respond 

to them in this rulemaking. 

The sections below contain a brief 

summary of the some of the major 

comments and responses we received 

on the proposal. Responses to the 

substantive comments can be found in 

the response to comments document 

entitled, ‘‘Deferral for CO2 Emissions 

from Bioenergy and Other Biogenic 

Sources under the Prevention of 

Significant Deterioration (PSD) and Title 

V Programs, Summary of Public 

Comments and Responses,’’ available in 

docket EPA–HQ–OAR–2011–0083. 

B. Comments on the Deferral 

We received comments on different 

aspects of the deferral. They fit into 

several broad categories as discussed 

below. 

Terminology. We received several 

comments requesting clarity on the 

terminology in the deferral, including 

the terms biogenic CO2 emissions, 

biologically-based material and 

examples of the types of sources that 

these emissions can come from. As 

discussed in section II, we finalized the 

terms biogenic CO2 emissions 

(described as, emissions of CO2 from a 

stationary source directly resulting from 

the combustion or decomposition of 

biologically-based materials other than 

fossil fuels and mineral sources of 

carbon (e.g. calcium carbonate)) and 

biologically-based material (nonfossilized and biodegradable organic 

material originating from plants, 

animals or micro-organisms [including 

products, by-products, residues and 

waste from agriculture, forestry and 

related industries as well as the nonfossilized and biodegradable organic 

fractions of industrial and municipal 

wastes, including gases and liquids 

recovered from the decomposition of 

non-fossilized and biodegradable 

organic material]) with very little 

change. We added the clause about 

‘‘mineral sources’’ of carbon to biogenic 

CO2 emissions in response to requests 

for additional clarification on which 

sources of CO2 were not included in the 

deferral. We also clarified that in the 

examples of sources of biogenic CO2

emissions, CO2 from fermentation 

includes CO2 from ethanol production 

as well as other industrial processes. 

Pollutants. We received comments on 

which pollutants are covered by the 

deferral, particularly methane (CH4) and 

nitrous oxide (N2O). A few comments 

requested that CH4 and N2O also be 

included in the deferral as they result 

when biomass is combusted. While CH4

and N2O are produced when biomass is 

combusted, the level of emissions and 

resulting impact on atmospheric 

concentrations of these gases are 

primarily related to the feedstock 

handling and combustion conditions at 

the specific plant rather than the source 

of the feedstocks. We finalized this rule 

as proposed and included only biogenic 

CO2 emissions for this reason, and note 

that emissions of non-CO2 GHGs are 

typically a small proportion of the total 

GHG emissions from combustion of 

biologically based material. Since the 

non-CO2 GHGs are so small relative to 

CO2, the deferral of biogenic CO2

emissions will ensure the biomass 

combustion projects will likely not meet 

the applicability thresholds based on 

their CH4 and N2O emissions alone. 

Duration. We received several 

comments on the duration of the 

deferral, including its start date and end 

date. Specifically, several comments 

recommended that EPA remove the 

three-year sunset date and make the 

deferral permanent until the Agency 

completes its study and takes further 

action. Others concluded EPA does not 

need three years to complete its work 

and should shorten the deferral. 

EPA is conducting a detailed 

examination of the science and 

technical issues associated with 

biogenic CO2 emissions and is 

developing an accounting framework. 

Once that work is complete, the Agency 

intends to undertake a notice-andcomment rulemaking to establish the 

treatment of these emissions in the PSD 

and Title V programs. We have 

determined that three years will be 

required to complete the scientific work 

as well as the follow-on rulemaking. As 

stated in section II of this preamble, the 

deferral is intended to be a temporary 

measure to allow the Agency time to 

complete its work and determine what, 

if any, treatment of biogenic CO2

emissions should be in the PSD and 

Title V programs. Therefore, we did not 

agree to make the deferral permanent or 

to shorten it. 

Sources covered by and permitted 

during the deferral. We received several 

comments requesting clarity on which 

sources of biogenic CO2 emissions were 

covered by the deferral. This is related 

to the comments on definitions 

described above, and we provided 

clarity on those sources, where 

necessary. We also received several 

comments on the application of the PSD 

and Title V programs during the 


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deferral, including the availability of 

grandfathering or a permitting 

moratorium for sources subject to the 

deferral and on the availability of 

authority to revise BACT. 

The final rule is an interim deferral 

for biogenic CO2 emissions only and 

does not relieve sources of the 

obligation to meet the PSD and Title V 

permitting requirements for other 

pollutant emissions that are otherwise 

applicable to the source during the 

deferral period or that may be 

applicable to the source at a future date 

pending the results of EPA’s study and 

subsequent rulemaking action. At this 

time, we are unable to predict which 

biogenic CO2 sources, if any, currently 

subject to the deferral would be subject 

to any permanent exemptions or which 

currently deferred sources would be 

potentially required to account for their 

emissions in relation to future 

permitting actions as a result of the 

future rulemaking EPA has committed 

to undertake for such purposes in three 

or fewer years. Only in that rulemaking 

can EPA address the question of 

extending the deferral or putting in 

place requirements that would have the 

equivalent effect on sources covered by 

this deferral. 

This means, for example, that if the 

deferral is applicable to biogenic CO2

emissions from a particular source 

during the three-year effective period 

and the study and future rulemaking do 

not provide for a permanent exemption 

from the PSD and Title V permitting 

requirements for the biogenic CO2

emissions from a source with particular 

characteristics, then the deferral would 

end for that source and those biogenic 

CO2 emissions would have to be 

appropriately considered in any 

applicability determinations that the 

source may need to conduct for future 

stationary source permitting purposes, 

consistent with that subsequent 

rulemaking and the Final Tailoring Rule 

(e.g., a major source determination for 

Title V purposes or a major modification 

determination for PSD purposes). 

Many commenters on the proposed 

deferral asked EPA to provide 

grandfathering from permitting 

requirements for sources that are 

currently not subject to permitting 

requirements but that in the future may 

be covered by the deferral. In addition, 

some commenters asked for the deferral 

to be made retroactively effective (e.g., 

during step 1 of the Tailoring Rule or 

January 1, 2011 through June 30, 2011) 

in states prior to state adoption of any 

SIP revision or Title V program change 

that may be necessary to revise the 

programs to incorporate the deferral, or 

that the deferral permanently apply to 

any source subject to it at any time. 

As explained in section II.C of this 

preamble, EPA has decided to not offer 

any kind of grandfathering or 

moratorium on future Title V and PSD 

permitting for biogenic CO2 sources 

subject to the three-year deferral. 

EPA wishes to clarify that we did not 

propose and this rule does not require 

that a PSD permit issued during the 

deferral period be amended or that any 

PSD requirements in a PSD permit 

existing at the time the deferral takes 

effect, such as BACT limitations, be 

revised or removed from an effective 

PSD permit for any reason related to the 

deferral or when the deferral period 

expires. 

Section 52.21(w) requires that any 

PSD permit shall remain in effect, 

unless and until it expires or it is 

rescinded, under the limited conditions 

specified in that provision. To the 

extent the deferral is not effective in a 

particular state at the time a PSD permit 

is issued, then the permit would need 

to include BACT limitations for GHGs if 

the source emits above levels that make 

GHGs subject to regulation under 

applicable rules. 

Thus, a PSD permit that is issued to 

a source while the deferral was effective 

need not be reopened or amended if the 

source is no longer eligible to exclude 

its biogenic CO2 emissions from PSD 

applicability after the deferral expires. 

However, if such a source undertakes a 

modification that could potentially 

require a PSD permit and the source is 

not eligible to continue excluding its 

biogenic CO2 emissions after the 

deferral expires, the source will need to 

consider its biogenic CO2 emissions in 

assessing whether it needs a PSD permit 

to authorize the modification. 

Any future actions to modify, shorten, 

or make permanent the deferral for 

biogenic sources are beyond the scope 

of this action and will be addressed 

through subsequent rulemaking, based 

on the scientific study and development 

of an accounting framework described 

elsewhere in this preamble. 

Implementation of the Deferral. We 

received comments suggesting that 

adoption of the deferral must be 

mandatory for states, as well as 

comments saying that the states should 

have flexibility regarding adoption of 

the deferral. As explained in section II. 

D of this preamble, EPA is not making 

adoption of this deferral mandatory. 

Each state may decide if it wishes to 

adopt the deferral and proceed 

accordingly, with appropriate program 

changes, if needed. Based on the 

comments received, we recognize that 

some states may not have any, or may 

have only a few, sources that combust 

biomass, and may have adequate 

information and resources as to the 

nature of biogenic emissions from those 

sources. That said, EPA recommends 

that each state communicate with its 

stationary sources its intent in this 

regard and utilize the interim guidance 

document as appropriate. 

Even though adoption of the deferral 

is not mandatory, EPA sees several 

reasons why a state might want to adopt 

the deferral in its state programs and 

many of these reasons are the same 

reasons why EPA is adopting the 

deferral for the permit programs we 

implement (e.g., the need for more time 

to determine how to address technical, 

scientific, and practical issues related to 

biogenic CO2 without disrupting the 

proper functioning and timeliness of the 

permitting programs). 

However, although state program 

changes are not required under today’s 

final rule, EPA sees several reasons that 

a state might want to adopt the deferral 

in its state programs; many of these 

reasons are the same reasons prompting 

EPA to adopt the deferral for the permit 

programs we implement (e.g., the need 

for more time to determine how best to 

address technical, scientific, and 

practical issues related to biogenic CO2

without disrupting the proper 

functioning and timeliness of the 

permitting programs). Also, like the 

proposal, this final rule strongly 

encourages states that wish to adopt the 

three-year deferral to submit SIP 

revisions or Title V program revisions, 

but does not mandate such submittals, 

recognizing that some states may not 

have any (or may have only a few) 

sources that combust biomass, and may 

have adequate information and 

resources regarding the nature of 

biogenic emissions from those sources. 

Furthermore, the justification that 

supports this deferral for including 

biogenic CO2 in PSD applicability 

determinations is not applicable in the 

case of a PSD permit that was issued 

before completion of this rule during 

step 1 of the phase-in of GHG 

requirements under the Tailoring Rule. 

If a permit has been issued, then the 

burden described above has already 

been experienced and overcome by the 

permitting authority. Furthermore, this 

burden will have been experienced in 

the context of step 1 of the GHG 

permitting phase in under the Tailoring 

Rule, and thus was easier to 

accommodate as part of the more 

limited increase in workload that 

permitting authorities have faced in 

addressing GHG requirements during 

step 1. In the context of step 2 where 

permitting authorities will have to 


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process a greater number of permit 

applications, the incremental burden of 

evaluating the net atmospheric impacts 

of biogenic CO2 has a more significant 

impact on the ability of permitting 

authorities to administer the permitting 

programs. This analysis adds a burden 

that EPA had not considered when it 

completed the Tailoring Rule. 

As explained in section II.C of the 

preamble, EPA also issued interim 

guidance entitled, ‘‘Guidance for 

Determining Best Available Control 

Technology for Reducing Carbon 

Dioxide Emissions from Bioenergy 

Production’’ to help permitting 

authorities establish a basis for 

concluding that under PSD Program the 

combustion of biomass fuels can be 

considered BACT for biogenic CO2

emissions at stationary sources until 

such time as the deferral becomes 

effective. This guidance may continue to 

assist permitting authorities where the 

deferral is not effective during the 

deferral period until EPA revises it or it 

is superseded by future guidance or 

rules. It should be noted that the 

guidance is non-binding, and case-bycase BACT determinations made in 

accordance with the guidance may 

nonetheless be subject to challenge in 

each permitting action. Accordingly, the 

interim guidance does not provide the 

same level of certainty to sources and 

decrease in administrative burdens to 

permitting authorities and sources that 

the deferral does. 

EPA developed the interim BACT 

guidance primarily for application 

during step 1 of the phase-in of GHG 

permitting requirements under the 

Tailoring Rule. While the guidance 

suggests reasoning that may serve to 

reduce the resource demands of 

conducting a net carbon cycle analysis 

in the context of permitting, it does not 

eliminate the need for permitting 

authorities to conduct some evaluation 

of energy, environmental, and economic 

impacts in step 4 of the BACT analysis. 

The guidance discusses the 

complexities of conducting a net carbon 

cycle analysis, but places the emphasis 

on showing the economic and energy 

benefits of utilizing biomass. Permitting 

authorities that apply this approach still 

need to identify the specific energy and 

economic benefits of utilizing particular 

biomass feedstocks to apply this 

rationale. To the extent these benefits 

cannot be identified or shown to 

override other considerations, a 

permitting authority may need to 

explore the net carbon cycle impact in 

more depth to justify the conclusion 

that utilization of a biomass feedstock is 

BACT by itself. In states that do not 

elect to adopt the deferral, the 

incremental burden of conducting the 

analysis described in the guidance will 

have a more significant impact on the 

overall ability to administrate the 

permitting program in the context of 

step 2 of the GHG permitting than it did 

in step 1, where the overall increase in 

workload from incorporating GHG 

requirements into PSD permit reviews 

was less than it will be in step 2. 

Legal Authority. We received several 

comments on EPA’s legal authority to 

issue the deferral. A number of 

commenters expressed the view that 

EPA lacked the scientific basis to defer 

the applicability of PSD and Title V 

permitting requirements to biogenic 

emissions of CO2. 

A number of commenters argued that 

EPA had not demonstrated that the 

deferral was necessary to avoid 

administrative burden or impossibility, 

and that the science surrounding CO2

emissions from biogenic sources and 

their role in the carbon cycle is settled 

enough to show that use of some or all 

biogenic feedstocks and emissions do 

have an impact on net atmospheric 

concentrations of CO2, or are not de 

minimis; therefore, these commenters 

argued that such emissions should be 

regulated under the PSD and Title V 

permitting programs. 

EPA disagrees with the commenters’ 

characterization of the state of the 

science and administrative burdens 

facing permitting agencies and sources 

to account for biogenic sources of CO2

emissions as part of permitting actions. 

EPA notes that it also received a number 

of comments expressing the opposing 

view that a permanent deferral or 

exclusion was necessary because 

biogenic emissions of CO2 do not have 

an impact on atmospheric 

concentrations of CO2, or that use of 

certain categories of feedstock do not 

have such an impact. EPA also received 

comments from a number of permitting 

authorities and sources expressing the 

view that the science surrounding the 

accounting of net atmospheric CO2

emissions from biogenic sources, given 

the carbon cycle, warranted further 

study and development of an 

accounting framework to assist them 

with their permitting actions. 

EPA believes this diversity of views 

reflects the complexity of the science 

associated with accounting for biogenic 

CO2 emissions as part of the PSD and 

Title V permitting programs. EPA 

agrees, based on information currently 

before the Agency, including 

information provided in response to the 

CFI and the proposal for this rule, that 

emissions from certain biomass 

feedstocks may have a negligible effect 

on atmospheric concentrations of CO2, 

but also believes based on the 

complexity of this evidence that the 

deferral to allow for further study is 

warranted. In addition, EPA is 

conducting an independent peer review 

by the Science Advisory Board of the 

science and accounting framework 

associated with biogenic CO2 emissions, 

which will benefit permitting 

authorities. 

While the interim BACT guidance 

described elsewhere in the preamble 

may help alleviate some of this 

uncertainty and burden for permitting 

authorities where the deferral is not 

effective, we expect that more and more 

diverse users of biomass combustion or 

other biogenic CO2 sources are likely to 

be affected under step 2 of the Tailoring 

Rule because, under step 2, these 

sources can trigger permitting 

requirements based solely on their GHG 

emissions with no prerequisite 

requirement that they otherwise trigger 

PSD or Title V permitting requirements 

for a non-GHG pollutant. We believe, 

absent the deferral period and the 

completion of EPA’s full analysis of the 

unique technical issues associated with 

these diverse facilities emitting biogenic 

CO2, it would be particularly 

challenging for permitting authorities 

and facilities to process permits 

involving these emissions. 

A number of commenters challenged 

EPA’s authority to amend the regulatory 

definition of ‘‘subject to regulation’’ to 

exclude biogenic sources of CO2 from 

regulation for three years under the 

administrative law doctrines and 

rationale articulated in the Tailoring 

Rule and elsewhere in this preamble. A 

number of commenters also expressed 

the view that the deferral would lead to 

significant development of the biomass 

industry during the deferral period and 

a permanent exclusion for these sources, 

in contradiction to the CAA’s goal of 

protecting air quality. 

EPA disagrees with these 

commenters’ characterization of the 

legal authority and rationale in support 

of this interim deferral. As described in 

Section II.B. of this preamble, this 

interim deferral is intended only to 

temporarily exclude biogenic CO2

emissions from the definition of 

‘‘subject to regulation,’’ as that term was 

defined for purposes of the Tailoring 

Rule, for a period of three years, while 

EPA further considers, through notice 

and comment rulemaking, the approach 

to accounting for these emissions on a 

permanent basis. In response to 

commenters who speculate about the 

likelihood of significant development of 

the biomass industry or increases in the 

number of sources emitting biogenic 

CO2 during the deferral period, EPA 


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notes that a decision to move forward 

with development of a facility is based 

on many economic and business factors, 

not just permitting requirements, that 

are beyond the scope of this final action. 

This interim deferral represents a 

permissible application of wellestablished administrative law 

doctrines, necessitated by the scientific 

uncertainty surrounding the accounting 

of biogenic CO2 emissions, to develop a 

regulatory scheme that implements the 

CAA consistent with congressional 

intent in a step-wise fashion designed to 

minimize administrative burdens and 

avoid premature regulation of sources of 

air pollution whose biogenic CO2

emissions could be shown to have de 

minimis impacts on a net carbon cycle 

basis after EPA completes further 

analysis. EPA notes that the issue of 

subsequent applicability of the PSD and 

Title V programs to facilities that may 

be permitted during the deferral period 

is addressed in sections II.C. 

EPA’s establishment of this deferral is 

permissible and, based upon the 

information currently before the 

Agency, narrowly tailored to effectuate 

congressional intent. It appears that the 

potential may exist for EPA to 

determine that some other types of 

biomass feedstocks would have a 

negligible impact on the net carbon 

cycle impact after further detailed 

examination of the science associated 

with biogenic CO2 emissions. Thus, if 

EPA were to require all bioenergy 

facilities to limit emissions of biogenic 

CO2 before this assessment is complete, 

it may later determine that such 

emissions have trivial impact on the net 

carbon cycle. To avoid this outcome, 

and because of the administrative 

burdens associated with accounting for 

net biogenic CO2 emissions relative to 

the carbon cycle, EPA believes an initial 

deferral of the PSD requirements for 

bioenergy and other biogenic sources to 

allow for subsequent, phased-in 

regulations is justified at this time. 

However, the possibility also remains 

that EPA’s detailed examination of the 

science of biogenic CO2 will 

demonstrate that the utilization of some 

biomass feedstocks for bioenergy 

production will have a significant 

impact on the net carbon cycle, making 

application of the PSD program 

requirements to such emissions 

necessary to fulfill congressional intent. 

The extensive workload requirements 

required to understand the net biogenic 

CO2 emissions from bioenergy facilities 

and other sources of biogenic CO2

emissions, as part of the PSD and Title 

V permit process, including specifically 

how to measure and account for 

biogenic CO2 emissions, would 

unnecessarily strain the resources of 

many permitting authorities and result 

in delays in processing permits for other 

applicants. Moreover, at present, 

devoting these limited permitting 

authority resources to biomass would 

not be productive in light of the 

previously described possibility that 

EPA may ultimately determine that the 

utilization of some or all biomass 

feedstocks for bioenergy has a negligible 

or de minimis impact on the net carbon 

cycle. 

EPA received a comment arguing that 

the deferral was also supported under 

the ‘‘one-step-at-a-time’’ doctrine, which 

authorizes agencies to implement 

statutory requirements a step at a time. 

EPA also relied, in part, on this doctrine 

in finalizing the Tailoring Rule. 75 FR 

31514, 31578 (June 3, 2010). 

In the proposed rule, EPA stated in 

footnote 13 that the ‘‘one-step-at-a-time’’ 

doctrine was not relevant to this 

rulemaking. This statement was made 

without explanation. The commenter 

stated ‘‘[b]ased on EPA’s statements in 

the Tailoring Rule, which does rely on 

the ‘one-step-at-a-time’ doctrine, it 

appears that the doctrine would apply 

equally well to EPA’s decision to delay 

regulation of biogenic CO2 emissions 

under the PSD and Title V programs.’’ 

As explained in more detail elsewhere 

in the preamble, EPA now agrees that 

because of the complexity and 

uncertainty of the science associated 

with accounting for biogenic sources of 

CO2 that the interim deferral of the PSD 

and Title V program for such emissions 

would be a reasonable exercise of the 

‘‘one-step-at-a-time’’ doctrine. 

This rulemaking constitutes an initial 

step toward full compliance, and, seen 

in that light, is supported by the ‘‘onestep-at-a-time’’ doctrine. Even if the 

doctrine were found to apply only when 

an agency is committed to fully 

implementing statutory requirements 

according to their literal terms, we 

believe that the interim deferral 

promulgated in this final rule would be 

considered valid under the one-step-ata-time doctrine. 

EPA received a number of comments 

in favor of expanding the deferral to 

CO2e or other GHGs, not just CO2. EPA 

disagrees with the commenters seeking 

expansion of the deferral to CO2e. As 

explained elsewhere in the preamble, 

while CH4 and N2O are produced when 

biomass is combusted, the level of 

emissions and resulting impact on 

atmospheric concentrations of these 

gases are primarily related to the 

feedstock handling and combustion 

conditions at the specific plant rather 

than the source of the feedstocks. We 

finalized this rule as proposed and 

included only biogenic CO2 emissions 

for this reason, and note that emissions 

of non-CO2 GHG are typically a small 

proportion of the total GHG emissions 

from combustion of biologically based 

material. Since the non-CO2 GHG are so 

small relative to CO2, the deferral of 

biogenic CO2 emissions will ensure the 

biomass combustion projects will likely 

not meet the applicability thresholds on 

their CH4 and N2O emissions alone. 

Subsequent regulations to establish 

treatment of specific sources of biogenic 

emissions under the PSD and Title V 

programs are beyond the scope of this 

action. 

C. Comments on Science, Accounting, 

and Economic Issues 

As noted above, we received a large 

number of comments that provided the 

same or similar information to the 

comments received through the CFI last 

year. Those comments are summarized 

briefly below and also contained in the 

response to comments document. While 

we did not respond to these comments 

as they are outside the scope of this 

rulemaking, we will consider many of 

them during our ongoing work on 

biogenic CO2 emissions. 

Carbon cycle dynamics. We received 

several comments on the net 

atmospheric impact of biomass. Some 

commenters supported the conclusion 

that biomass has zero net atmospheric 

impact based on the premise that 

biomass is part of the natural carbon 

cycle and does not add additional 

carbon to the atmosphere. Conversely, 

other commenters supported the 

conclusion that biomass combustion 

increases the atmospheric carbon load. 

Issues raised by commenters, including 

the time delays between sequestration 

from and release to the atmosphere, 

differences between feedstocks, 

influences of different spatial scale, and 

differences in combustion efficiencies, 

are important in the development of 

accounting methodologies and will be 

considered during the scientific review 

that will take place during the threeyear deferral period. EPA will consider 

such issues in order to account for 

biogenic CO2 emissions from stationary 

sources in ways that are scientifically 

sound and manageable in practice. 

Accounting methodologies used by 

other programs. We received several 

comments discussing the accounting 

methodologies used in international, 

U.S. government (including U.S. EPA) 

and state regulatory and policy 

programs. The accounting approaches 

taken by other programs, including 

other EPA programs, will be considered 

in EPA’s detailed examination of the 

scientific and technical issues related to 


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biogenic CO2 emissions and any 

subsequent rulemakings we undertake 

during the deferral period. 

Components of accounting 

methodologies. We received several 

comments highlighting the challenges 

associated with different components of 

biogenic CO2 emissions accounting 

methodologies, including using 

‘‘business-as-usual’’ (BAU) projections, 

employing case-by-case analyses and 

considering a feedstock-based 

accounting approach. EPA will consider 

these topics in our review of the 

scientific and technical issues related to 

accounting for biogenic CO2 emissions, 

as well as in the subsequent rulemaking 

to establish the treatment of these 

emissions in the PSD and Title V 

programs. 

Forest economics and sustainability. 

We received some comments supporting 

forest biomass as an energy feedstock 

and discussing the role of bioenergy 

markets in sustaining forest 

conservation. EPA thanks the 

commenters for these comments and 

considers these views beyond the scope 

of this deferral action. 

D. Comments on PSD, Title V and the 

Tailoring Rule 

We received some comments on the 

PSD and Title V programs and how they 

relate to the Tailoring Rule, including 

comments about the need to adjust the 

thresholds for GHG applicability, 

facilities that should or should not be 

covered, and the ultimate treatment of 

biogenic CO2 in these programs. These 

comments are contained in the response 

to comments document. The dates, 

thresholds and other requirements 

established in the Tailoring Rule are not 

a subject of this rulemaking and thus 

these comments are outside the scope of 

this action. 

E. Comments on the Interim Guidance 

We received some comments on the 

interim guidance document released in 

March 2011 designed to help permitting 

authorities establish a basis for 

concluding that under PSD and Title V 

Programs the combustion of biomass 

fuels can be considered BACT for 

biogenic CO2 emissions at stationary 

sources before the deferral becomes 

effective. These comments are contained 

in the response to comments document 

and are briefly summarized below. 

While these comments are outside the 

scope of this rulemaking, we will likely 

be considering many of them during our 

ongoing work on biogenic CO2

emissions. 

Some commenters asserted that 

biogenic fuels should not be considered 

BACT for controlling biogenic CO2

emissions at energy projects, while 

others supported the inclusion of 

biogenic fuels as BACT in the interim 

guidance. As stated in the March 2011 

interim guidance document, EPA has 

not provided a final determination of 

BACT for any particular source, since 

such determinations can only be made 

by individual permitting authorities on 

a case-by-case basis after consideration 

of the record in each case. Upon 

consideration of the record in an 

individual case, if a permitting authority 

has a reasoned basis to address 

particular issues in a different manner 

than EPA recommends in the bioenergy 

BACT guidance, they have the 

discretion to do so. EPA is granting the 

deferral of biogenic CO2 emissions from 

stationary source permitting 

requirements because the issue of 

accounting for the net atmospheric 

impact of biogenic CO2 emissions is 

complex enough that further 

consideration of this important issue is 

warranted. 

IV. Statutory and Executive Order 

Review 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

This action is not a ‘‘significant 

regulatory action’’ under the terms of 

Executive Order 12866 (58 FR 51735, 

October 4, 1993) and is therefore not 

subject to review under Executive 

Orders 12866 and 13563 (76 FR 3821, 

January 21, 2011). 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. Instead, 

this action will reduce costs incurred by 

any facility with biogenic CO2

emissions, as well as permitting 

authorities, relative to the costs that 

would be incurred if EPA did not revise 

the rule. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. The OMB has 

previously approved the information 

collection requirements contained in the 

existing regulations for PSD (see, e.g., 40 

CFR 52.21) and Title V (see 40 CFR 

parts 70 and 71) under the provisions of 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. and has assigned OMB 

control number 2060–0003 and OMB 

control number 2060–0336. The OMB 

control numbers for EPA’s regulations 

in 40 CFR are listed in 40 CFR part 9. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. 

For purposes of assessing the impacts 

of this action on small entities, small 

entity is defined as: (1) A small business 

as defined by the Small Business 

Administration’s regulations at 13 CFR 

121.201; (2) a small governmental 

jurisdiction that is a government of a 

city, county, town, school district or 

special district with a population of less 

than 50,000; and (3) a small 

organization that is any not-for-profit 

enterprise that is independently owned 

and operated and is not dominant in its 

field. 

After considering the economic 

impacts of this final action on small 

entities, I certify that this action will not 

have a significant economic impact on 

a substantial number of small entities. 

In determining whether a rule has a 

significant economic impact on a 

substantial number of small entities, the 

impact of concern is any significant 

adverse economic impact on small 

entities, since the primary purpose of 

the regulatory flexibility analyses is to 

identify and address regulatory 

alternatives ‘‘which minimize any 

significant economic impact of the rule 

on small entities.’’ 5 U.S.C. 603 and 604. 

Thus, an agency may certify that a rule 

will not have a significant economic 

impact on a substantial number of small 

entities if the rule relieves regulatory 

burden, or otherwise has a positive 

economic effect on all of the small 

entities subject to the rule. 

We believe that this final rule will 

relieve the necessary analysis and 

corresponding workload requirements 

for most affected facilities, including 

small businesses, subject to the PSD and 

Title V programs. As a result, the 

program changes provided in this rule 

are not expected to result in a 

significant economic impact on a 

substantial number of small entities. In 

addition, EPA determined that the final 

rulemaking would not have a significant 

impact on small governmental 

jurisdictions. The EPA has therefore 

concluded that this final action will not 

have a significant economic impact on 

a substantial number of small entities. 


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D. Unfunded Mandates Reform Act 

(UMRA) 

This final rule does not contain a 

Federal mandate that may result in 

expenditures of $100 million or more 

for state, local, and tribal governments, 

in the aggregate, or the private sector in 

any one year. Only those few states 

whose permitting authorities do not 

implement the Federal PSD and Title V 

rules by reference in their SIPs will have 

a small increase in burden. If those 

states choose to adopt this deferral, they 

will have to amend their corresponding 

SIPs to incorporate the amendments 

from today’s action, as the deferral that 

we finalized will not otherwise apply to 

the PSD and Title V programs. Thus, 

this rule is not subject to the 

requirements of sections 202 or 205 of 

the UMRA. 

This rule is also not subject to the 

requirements of section 203 of UMRA 

because it contains no regulatory 

requirements that might significantly or 

uniquely affect small governments. As 

discussed earlier, this rule is expected 

to result in an administrative burden 

reduction for all affected permitting 

authorities and permittees, including 

small governments. 

E. Executive Order 13132: Federalism 

This action does not have federalism 

implications. It will not have substantial 

direct effects on the states, on the 

relationship between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in EO 

13132. These amendments will simplify 

and reduce the burden of implementing 

the PSD and Title V operating permit 

programs, by deferral of PSD and Title 

V application requirements to biogenic 

CO2 emissions at a facility. Thus, EO 

13132 does not apply to this action. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 13175, entitled 

‘‘Consultation and Coordination with 

Indian Tribal Governments’’ (59 FR 

22951, November 6, 2000), requires EPA 

to develop an accountable process to 

ensure ‘‘meaningful and timely input by 

Tribal officials in the development of 

regulatory policies that have Tribal 

implications.’’ 

The EPA has concluded that this final 

rule may have Tribal implications. 

However, it will neither impose 

substantial direct compliance costs on 

Tribal government, nor preempt Tribal 

law. There are no Tribal authorities 

currently issuing PSD and Title V 

permits; however, this may change in 

the future. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

The EPA interprets Executive Order 

13045 (62 FR 19885, April 23, 1997) as 

applying only to those regulatory 

actions that concern health or safety 

risks, such that the analysis required 

under section 5–501 of the EO has the 

potential to influence the regulation. 

This action is not subject to Executive 

Order 13045 because it does not 

establish an environmental standard 

intended to mitigate health or safety 

risks. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not a ‘‘significant 

energy action’’ as defined in EO 13211 

(66 FR 28355, May 22, 2001) because it 

is not likely to have a significant 

adverse effect on the supply, 

distribution, or use of energy. Further, 

we have concluded that this rule is not 

likely to have any adverse energy effects 

because this action would not create any 

new requirements for sources in the 

energy supply, distribution, or use 

sectors. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (NTTAA), Public Law 104– 

113 (15 U.S.C. 272 note) directs EPA to 

use voluntary consensus standards in its 

regulatory activities unless to do so 

would be inconsistent with applicable 

law or otherwise impractical. Voluntary 

consensus standards are technical 

standards (e.g., materials specifications, 

test methods, sampling procedures, and 

business practices) that are developed or 

adopted by voluntary consensus 

standards bodies. The NTTAA directs 

EPA to provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. 

This action does not involve technical 

standards. Therefore, EPA is not 

considering the use of any voluntary 

consensus standards. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order 12898 (59 FR 7629, 

February 16, 1994) establishes Federal 

executive policy on environmental 

justice. Its main provision directs 

Federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the U.S. 

The EPA has determined that this rule 

will not have disproportionately high 

and adverse human health or 

environmental effects on minority or 

low-income populations because it does 

not affect the level of protection 

provided to human health or the 

environment, as any impacts that it will 

have will be global in nature and will 

not affect local communities or 

populations in a manner that adversely 

affects the level of protection provided 

to human health or the environment. 

K. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 

generally provides that before a rule 

may take effect, the agency 

promulgating the rule must submit a 

rule report, which includes a copy of 

the rule, to each House of the Congress 

and to the Comptroller General of the 

United States. EPA will submit a report 

containing this rule and other required 

information to the U.S. Senate, the U.S. 

House of Representatives, and the 

Comptroller General of the U.S. prior to 

publication of the rule in the Federal 

Register. A major rule cannot take effect 

until 60 days after it is published in the 

Federal Register. This action is not a 

‘‘major rule’’ as defined by 5 U.S.C. 

804(2). This rule will be effective on 

July 20, 2011. 

List of Subjects 

40 CFR Part 51 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Incorporation by reference, 

Intergovernmental relations, Methane, 

Nitrous oxide. 

40 CFR Part 52 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Incorporation by reference, 

Intergovernmental relations, Methane, 

Nitrous oxide. 

40 CFR Part 70 

Environmental protection, 

Administrative practice and procedure, 


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VI-39
Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Rules and Regulations 43507 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Intergovernmental relations, 

Methane, Nitrous oxide. 

40 CFR Part 71 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Intergovernmental relations, 

Methane, Nitrous oxide. 

Dated: July 1, 2011. 

Lisa P. Jackson, 

Administrator. 

For the reasons stated in the 

preamble, Title 40, chapter I, of the 

Code of Federal Regulations is amended 

as follows: 

PART 51—[AMENDED] 

■ 1. The authority citation for part 51 

continues to read as follows: 

Authority: 23 U.S.C. 101; 42 U.S.C. 7401– 

7671q. 

Subpart I—[Amended] 

■ 2. Section 51.166 is amended by 

revising paragraph (b)(48)(ii)(a) to read 

as follows: 

§ 51.166 Prevention of significant 

deterioration of air quality. 

* * * * * 

(b) * * * 

(48) * * * 

(ii) * * * 

(a) Multiplying the mass amount of 

emissions (tpy), for each of the six 

greenhouse gases in the pollutant GHGs, 

by the gas’s associated global warming 

potential published at Table A–1 to 

subpart A of part 98 of this chapter— 

Global Warming Potentials. For 

purposes of this paragraph (b)(48)(ii)(a), 

prior to July 21, 2014, the mass of the 

greenhouse gas carbon dioxide shall not 

include carbon dioxide emissions 

resulting from the combustion or 

decomposition of non-fossilized and 

biodegradable organic material 

originating from plants, animals, or 

micro-organisms (including products, 

by-products, residues and waste from 

agriculture, forestry and related 

industries as well as the non-fossilized 

and biodegradable organic fractions of 

industrial and municipal wastes, 

including gases and liquids recovered 

from the decomposition of nonfossilized and biodegradable organic 

material). 

* * * * * 

PART 52—[AMENDED] 

■ 3. The authority citation for part 52 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

Subpart A—[Amended] 

■ 4. Section 52.21 is amended by 

revising paragraph (b)(49)(ii)(a) to read 

as follows: 

§ 52.21 Prevention of significant 

deterioration of air quality. 

* * * * * 

(b) * * * 

(49) * * * 

(ii) * * * 

(a) Multiplying the mass amount of 

emissions (tpy), for each of the six 

greenhouse gases in the pollutant GHGs, 

by the gas’s associated global warming 

potential published at Table A–1 to 

subpart A of part 98 of this chapter— 

Global Warming Potentials. For 

purposes of this paragraph, prior to July 

21, 2014, the mass of the greenhouse gas 

carbon dioxide shall not include carbon 

dioxide emissions resulting from the 

combustion or decomposition of nonfossilized and biodegradable organic 

material originating from plants, 

animals, or micro-organisms (including 

products, by-products, residues and 

waste from agriculture, forestry and 

related industries as well as the nonfossilized and biodegradable organic 

fractions of industrial and municipal 

wastes, including gases and liquids 

recovered from the decomposition of 

non-fossilized and biodegradable 

organic material). 

* * * * * 

PART 70—[AMENDED] 

■ 5. The authority citation for part 70 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

■ 6. Section 70.2 is amended by revising 

paragraph (2) of the definition of 

‘‘Subject to regulation’’ to read as 

follows: 

§ 70.2 Definitions. 

* * * * * 

Subject to Regulation 

* * * * * 

(2) The term tpy CO2 equivalent 

emissions (CO2e) shall represent an 

amount of GHGs emitted, and shall be 

computed by multiplying the mass 

amount of emissions (tpy), for each of 

the six greenhouse gases in the pollutant 

GHGs, by the gas’s associated global 

warming potential published at Table 

A–1 to subpart A of part 98 of this 

chapter—Global Warming Potentials, 

and summing the resultant value for 

each to compute a tpy CO2e. For 

purposes of this paragraph, prior to July 

21, 2014, the mass of the greenhouse gas 

carbon dioxide shall not include carbon 

dioxide emissions resulting from the 

combustion or decomposition of nonfossilized and biodegradable organic 

material originating from plants, 

animals, or micro-organisms (including 

products, by-products, residues and 

waste from agriculture, forestry and 

related industries as well as the nonfossilized and biodegradable organic 

fractions of industrial and municipal 

wastes, including gases and liquids 

recovered from the decomposition of 

non-fossilized and biodegradable 

organic material). 

* * * * * 

PART 71—[AMENDED] 

■ 7. The authority citation for part 71 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

Subpart A—[Amended] 

■ 8. Section 71.2 is amended by revising 

paragraph (2) of the definition of 

‘‘Subject to regulation’’ to read as 

follows: 

§ 71.2 Definitions. 

* * * * * 

Subject to Regulation 

* * * * * 

(2) The term tpy CO2 equivalent 

emissions (CO2e) shall represent an 

amount of GHGs emitted, and shall be 

computed by multiplying the mass 

amount of emissions (tpy), for each of 

the six greenhouse gases in the pollutant 

GHGs, by the gas’s associated global 

warming potential published at Table 

A–1 to subpart A of part 98 of this 

chapter—Global Warming Potentials, 

and summing the resultant value for 

each to compute a tpy CO2e. For 

purposes of this paragraph, prior to July 

21, 2014, the mass of the greenhouse gas 

carbon dioxide shall not include carbon 

dioxide emissions resulting from the 

combustion or decomposition of nonfossilized and biodegradable organic 

material originating from plants, 

animals, or micro-organisms (including 

products, by-products, residues and 

waste from agriculture, forestry and 

related industries as well as the nonfossilized and biodegradable organic 

fractions of industrial and municipal 

wastes, including gases and liquids 

recovered from the decomposition of 


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43508 Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Rules and Regulations 

non-fossilized and biodegradable 

organic material). 

* * * * * 

[FR Doc. 2011–17256 Filed 7–19–11; 8:45 am] 

BILLING CODE 6560–50–P 


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VI-41
Background References 

1. Deferral for CO2 Emissions from Bioenergy and Other Biogenic Sources under the 

Prevention of Significant Deterioration (PSD) and Title V Programs 

Summary of Public Comments and Responses 

http://www.epa.gov/NSR/documents/RTC_6-30_final_comb.pdf

2. The Environmental Protection Agency (EPA or Agency) Science Advisory Board (SAB) 

Staff Office announces two teleconferences of the SAB Biogenic Carbon Emissions 

Panel to review EPA's draft Accounting Framework for Biogenic CO2 Emissions from 

Stationary Sources (September 2011). 

http://www.gpo.gov/fdsys/pkg/FR-2011-12-23/pdf/2011-33003.pdf

3. Accounting Framework For Biogenic CO2 Emissions From Stationary Sources 

The purpose of this study is to consider the scientific and technical issues associated with 

accounting for biogenic CO2 emitted from stationary sources and to develop a framework 

to account for those emissions. It presents a methodology for “adjusting” estimates of 

onsite biogenic CO2 emissions on the basis of information about the carbon cycle. This 

study recognizes that whether or not onsite biogenic CO2 emissions are included in a 

stationary source program is a policy decision. It does not make recommendations for or 

against accounting for biogenic CO2 emissions at stationary sources, but it does identify 

methodological implications, and it recommends a framework to implement such a 

policy- or program-specific decision in a scientifically and technically rigorous manner. 

http://www.epa.gov/climatechange/emissions/downloads/Biogenic_CO2_Accounting_Fr

amework_Report_Sept_2011.pdf

4. SAB webpage for the Biogenic Carbon Emissions Panel 

http://yosemite.epa.gov/sab/sabproduct.nsf/0/2f9b572c712ac52e8525783100704886!Ope

nDocument&TableRow=2.1#2. 

5. SAB Draft Advisory (3-13-12) on EPA's Accounting Framework for Biogenic CO2 

Emissions from Stationary Sources

http://yosemite.epa.gov/sab/sabproduct.nsf/0/CC5422DDE3678AC4852579BC005F16D

4/$File/3-13-12+Advisory_Page+Numbers+Corrected.pdf

VI-42
VII-1

Chapter VII

The following documentation of filing and notification is incorporated as part of this hearing record and is 

maintained on file:

1. ENR 101 Internal Approval Form.

2. Submission for Notice Form and material submitted to the Office of Administrative 

Hearings.

3. The public notice as it appears in The North Carolina Register Volume 26, Issue 15, 

pages 1089-1092.

4. Letters to newspapers requesting that the public notice be published.

5. Affidavits of Publication from newspaper.

6. Memorandum transmitting hearing notice and proposal to regional offices for public 

inspection.

7. Memorandum transmitting hearing notice and proposal to local programs.

8. Letter notifying EPA of hearing.

9. Submission of Filing Forms and material filed with Office of Administrative Hearings.

10. Letter transmitting hearing record to EPA.
VII-2

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