From: "King, Heidi R." <Heidi_R._King@omb.eop.gov>

To: Suzanne Kocchi/DC/USEPA/US@EPA

Date: 03/02/2011 06:32 PM

Subject: Summary of final interagency comments under EO12866 on GHG

            Deferral and Biogenic Guidance

Suzie,

Here are the last of the interagency comments under EO12866 review.

Best regards,

heidi(See attached file: Interagency_Comments_Under

EO12866_on_Biogenic_Deferral.docx)(See attached file: Summary of Interagency

EO12866_Comments_on_Biogenic_Guidance.docx)
Interagency working comments submitted during EO12866 

review. Subject to further policy review. 

6560.50 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Parts 51, 52, 70, and 71 

[EPA-HQ-OAR-2011-0083; FRL- ] 

RIN 2060-XXXX 

Deferral for CO2 emissions from Bioenergy and Other Biogenic 

Sources under the Prevention of Significant Deterioration 

(PSD) and Title V Programs: Proposed Rule 

AGENCY: Environmental Protection Agency (EPA). 

ACTION: Proposed Rule. 

SUMMARY: This action proposes to defer 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. 

DATES: Comments. Comments must be received on or before 

[INSERT DATE 45 DAYS AFTER DATE OF PUBLICATION IN THE 

FEDERAL REGISTER]. 

Public Hearing. EPA will hold one hearing on this 

action. The hearing will be conducted on [INSERT THE DATE 

15 DAYS AFTER THE DATE OF PUBLICATION IN THE FEDERAL 
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REGISTER], in the Washington, DC area. The EPA will 

provide further information about the hearing on its 

webpage: http://www.epa.gov/NSR/actions.html. To register 

to speak at the hearing, please go to the webpage: 

http://www.epa.gov/NSR/actions.html or contact the person 

listed in the “FOR FURTHER INFORMATION CONTACT” section. 

ADDRESSES: Submit your comments, identified by Docket ID 

No. EPA–HQ–OAR–2011-0083 by one of the following methods: 

 Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the online instructions for 

submitting comments. 

 E-mail: GHGbiogenic@epa.gov. Include docket ID No. 

EPA-HQ-OAR-2011-0083 in the subject line of the message. 

 Fax: (202) 566–1741. 

 Mail: Environmental Protection Agency, EPA Docket 

Center (EPA/DC), Mailcode 6102T, Attention Docket ID No. 

EPA–HQ–OAR–2011-0083, 1200 Pennsylvania Avenue, NW., 

Washington, DC 20460. 

 Hand/Courier Delivery: EPA Docket Center, Public 

Reading Room, EPA West Building, Room 3334, 1301 

Constitution Avenue, NW., Washington, DC 20004. Such 

deliveries are only accepted during the Docket’s normal 
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hours of operation, and special arrangements should be made 

for deliveries of boxed information. 

Instructions: Direct your comments to Docket ID No. 

EPA–HQ–OAR–2011-0083. EPA’s policy is that all comments 

received will be included in the public docket without 

change and may be made available online at 

http://www.regulations.gov, including any personal 

information provided, unless the comment includes 

information claimed to be confidential business information 

(CBI) or other information whose disclosure is restricted 

by statute. 

Do not submit information that you consider to be CBI 

or otherwise protected through http://www.regulations.gov

or e-mail. Send or deliver information identified as CBI 

to only the mail or hand/courier delivery address listed 

above, attention: Docket ID No. EPA-HQ-OAR-2011-0083. The 

http://www.regulations.gov website is an “anonymous access” 

system, which means EPA will not know your identity or 

contact information unless you provide it in the body of 

your comment. If you send an e-mail comment directly to 

EPA without going through http://www.regulations.gov your 

e-mail address will be automatically captured and included 

as part of the comment that is placed in the public docket 
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and made available on the Internet. If you submit an 

electronic comment, EPA recommends that you include your 

name and other contact information in the body of your 

comment and with any disk or CD–ROM you submit. If EPA 

cannot read your comment due to technical difficulties and 

cannot contact you for clarification, EPA may not be able 

to consider your comment. Electronic files should avoid 

the use of special characters, any form of encryption, and 

be free of any defects or viruses. 

Docket: 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., 

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 in http://www.regulations.gov or in hard 

copy at the Air Docket, EPA/DC, EPA West, Room B102, 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 legal 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. 
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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. 

Worldwide Web (WWW): In addition to being available 

in the docket, an electronic copy of today’s proposal, 

memoranda to the docket, and all other related information 

will also be available through the WWW on EPA’s website at 

http://www.epa.gov/NSR/actions.html 

SUPPLEMENTARY INFORMATION: 

Acronyms and Abbreviations. The following acronyms and 

abbreviations are used in this document. 

ANPR Advanced notice of proposed rulemaking 

BACT Best Available Control Technology 

BAU Business as usual 

CAA Clean Air Act 

CAR U.S Climate Action Report 

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 Greenhouse gas 

GWP Global warming potential 

HFC Hydrofluorocarbon 
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ICR Information Collection Request 

IPCC Intergovernmental Panel on Climate Change 

LUCF Land-Use Change and Forestry 

MSW Municipal solid waste 

N2O Nitrous oxide 

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 

OMB Office of Management and Budget 

PFC Perfluorocarbon 

PSD Prevention of Significant Deterioration 

PTE Potential to Emit 

RFA Regulatory Flexibility Act 

SMC Significant monitoring concentration 

SF6 sulfur hexafluoride 

SIL Significant impact level 

SIP State implementation plan 

SMC Significant monitoring concentration 

Tg Teragram 

tpy Tons per year 

U.S. United States 

UMRA Unfunded Mandates Reform Act 

UNFCCC United Nations Framework Convention on Climate 

Change 

USDA U.S. Department of Agriculture 

WWW Worldwide Web 

TABLE OF CONTENTS 

I. General Information 

A. What is the purpose of this action? 

B. Does this action apply to me? 

C. What are biogenic CO2 emissions? 

D. What should I consider as I prepare my comments to EPA? 

II. Relevant Background 

A. Carbon Source and Sink Dynamics 

B. PSD, Title V, and Tailoring Rule 

C. Complexity of determining net atmospheric impact of CO2

emissions and incorporating this information into the PSD 

and Title V Programs 

D. Designing and Implementing an Accounting Approach 
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III. Interim Deferral of Biogenic CO2 Emissions Under the 

PSD and Title V Permitting Programs 

A. General Rationale and Legal Justification for the 

Interim Deferral 

B. CO2 Emissions that are Deferred 

C. Non-CO2 GHGs 

D. Mechanism for Deferral and State Implementation 

E. Requesting comment 

IV. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory Planning and 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 LowIncome Populations

I. General Information

A. What is the purpose of this action?

This action proposes to defer 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 a stationary source is 

determining whether its emissions meet the Prevention of 

Significant Deterioration (PSD) and Title V applicability 

thresholds, including those for the application of Best 

Available Control Technology (BACT). Stationary sources 
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that combust biomass and construct or modify during the 

deferral period will avoid the application of PSD to those 

actions. This deferral applies only to CO2 emissions and 

does not affect non-GHG pollutants or other greenhouse 

gases (GHGs) (e.g., methane (CH4) and nitrous oxide (N2O)) 

emitted from the combustion of biomass fuel.. Also, this 

does not affect any other EPA programs that pertain to 

stationary sources, such as New Source Performance 

Standards (NSPS) or the GHG Reporting Program. 

On January 12, 2011, EPA explained in letters to 

Members of Congress and to the National Alliance of Forest 

Owners (NAFO)1

, the steps the Agency intends to take to 

address the issues associated with biogenic CO2 emissions 

from stationary sources. First, EPA granted a Petition for 

Reconsideration filed by the NAFO on August 3, 2010, 

related to the PSD and Title V Greenhouse Gas Tailoring 

Rule (75 FR 31514, June 3, 2010)(“Tailoring Rule”). 

Second, the Agency is undertaking this rulemaking to defer 

for three years the application of the PSD and Title V 

permitting requirements to biogenic CO2 emissions from 

stationary sources. Third, concurrent with this 

 

1

 See Docket EPA-HQ-OAR-2011-0083 for copies of the letters or 

http://www.epa.gov/nsr/actions.html#jan11

Comment [dsg1]: Is a word missing 

here? Construct or modify what? 

Deleted: or non-GHG pollutants
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rulemaking, we are providing an interim guidance document 

(discussed further in section III.D.3) to help permitting 

authorities establish a basis for concluding that BACT for 

biogenic CO2 emissions at stationary sources is simply 

combustion of biomass fuels. Fourth, EPA will be 

conducting a detailed examination of the science associated 

with biogenic CO2 emissions from stationary sources, 

including engaging with an independent scientific panel, 

and considering 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 (discussed further in section II.C and II.D). 

Finally, EPA intends to use the feedback from the 

scientific and technical review to develop a rulemaking on 

how these emissions should be treated and accounted for in 

PSD and Title V permitting. 

B. Does this action apply to me?

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. 
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Category NAICS Examples of affected facilities 

 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. 

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 proposal. 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 as to whether, or what 

part of, 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 
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of this rule and are part of the case-by-case 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. 

C. What are biogenic CO2 emissions?

Carbon dioxide emissions from bioenergy and other 

biogenic sources (hereinafter referred to as “biogenic CO2

emissions”) are generated during the combustion or 

decomposition of biologically-based material2

. In this 

action we are addressing only the CO2 emissions from 

biogenic sources, not emissions of other GHGs or non-GHG 

pollutants. The term “biogenic CO2 emissions” is defined 

here as emissions of CO2 from a stationary source directly 

resulting from the combustion or decomposition of 

biologically-based materials other than fossil fuels. 

Examples of “biogenic CO2 emissions” include, but are not 

limited to: 

 

2

 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 non-fossilized and biodegradable organic 

material. 
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 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; 

 CO2 from combustion of the biological fraction of 

municipal solid waste or biosolids; 

 CO2 from combustion of the biological fraction of tirederived 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, tire-derived fuels, municipal solid waste (MSW), 

etc.), the biogenic CO2 emissions from that combustion are 

included in this deferral. However, as stated above, the 

fossil CO2 emissions are not. 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 98). EPA is requesting comment 

on whether this deferral should specify that stationary 

sources subject to the PSD and Title V programs use a 

specific method(s) for determining their biogenic CO2

emissions. EPA also seeks comment on other ways to ensure 

there is an accurate estimate of how much biogenic CO2 is
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subject to the deferral for a specific facility, 

particularly when combusting mixed fuels. 

D. What should I consider as I prepare my comments to 

EPA?

1. Submitting CBI 

Clearly mark the part or all of the information that 

you claim to be CBI. For CBI information in a disk or CD 

ROM that you mail to EPA, mark the outside of the disk or 

CD ROM as CBI and then identify electronically within the 

disk or CD ROM the specific information that is claimed as 

CBI. In addition to one complete version of the comment 

that includes information claimed as CBI, a copy of the 

comment that does not contain the information claimed as 

CBI must be submitted for inclusion in the public docket. 

Information marked as CBI will not be disclosed except in 

accordance with procedures set forth in 40 CFR part 2. 

Do not submit information that you consider to be CBI 

or otherwise protected through http://www.regulations.gov

or e-mail. Send or deliver information identified as CBI 

to only the mail or hand/courier delivery address listed 

above, attention: Docket ID No. EPA-HQ-OAR-2011-0083. 

If you have any questions about CBI or the procedures 

for claiming CBI, please consult the person identified in 
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the “FOR FURTHER INFORMATION CONTACT” section. 

2. Tips for Preparing Your Comments 

When submitting comments, remember to: 

Identify the rulemaking by docket number and other 

identifying information (e.g., subject heading, Federal 

Register date and page number). 

Follow directions. EPA may ask you to respond to 

specific questions or organize comments by referencing a 

CFR part or section number. 

Explain why you agree or disagree; suggest 

alternatives and substitute language for your requested 

changes. 

Describe any assumptions and provide any technical 

information and/or data that you used. 

If you estimate potential costs or burdens, explain 

how you arrived at your estimate in sufficient detail to 

allow for it to be reproduced. 

Provide specific examples to illustrate your concerns 

and suggest alternatives. 

Explain your views as clearly as possible, avoiding 

the use of profanity or personal threats. 

Make sure to submit your information and comments by 

the comment period deadline identified in the preceding 
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section titled DATES. To ensure proper receipt by EPA, be 

sure to identify the docket ID number assigned to this 

action in the subject line on the first page of your 

response. You may also provide the name, date, and Federal 

Register citation. 

To expedite review of your comments by Agency staff, 

you are encouraged to send a separate copy of your 

comments, in addition to the copy you submit to the 

official docket, to Carole Cook, U.S. EPA, Office of 

Atmospheric Programs, Climate Change Division, Mail Code 

6207-J, Washington, DC, 20460, telephone (202) 343–9263, email GHGbiogenic@epa.gov. You are also encouraged to send 

a separate copy of your CBI information to Carole Cook at 

the provided mailing address in the “FOR FURTHER 

INFORMATION CONTACT” section. Please do not send CBI 

information to the electronic docket or by email. 

II. Relevant Background 

The purpose of this section is to provide relevant 

background on this action. Section II.A provides basic 

information on biogenic CO2 emissions including the relevant 

information concerning carbon source and sink dynamics and 

how biogenic CO2 emissions are accounted for in the 

Inventory of U.S. Greenhouse Gas Emissions and Sinks
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(Inventory)3

. While we are presenting this information for 

context, as explained in that section and in later parts of 

this preamble, the Inventory is an annual report that 

tracks US GHG emissions at the national scale. The 

Inventory is not intended to quantify the net atmospheric 

impacts of a particular type of fuel from a stationary 

source over a specified time period that extends into the 

future. 

Section II.B identifies general information concerning 

the PSD and Title V permitting programs and the steps EPA 

undertook in the GHG PSD and Title V Tailoring Rule to 

implement the requirements of those permitting programs in 

a common sense manner, given congressional intent and the 

overwhelming administrative burden that would otherwise 

have resulted if EPA were to apply the permitting programs 

to GHG at the statutory PSD and Title V thresholds. The 

relevant history and information concerning EPA’s treatment 

of biomass under the Tailoring Rule and in subsequent GHG 

permitting guidance and other actions is also addressed, 

including this rulemaking to defer the inclusion of 

 

3 “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

(incorporated by reference into Docket EPA-HQ-OAR-2011-0083) 

Deleted: latter

Comment [dsg2]: Should this text be 

added? 
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biogenic CO2 emissions in making PSD and Title V 

applicability determinations and anticipated additional 

future actions. 

Section II.C sets forth the complexities associated 

with determining the net atmospheric impact of biogenic CO2

emissions and factors to consider to ensure the 

determinations are sound from a practical, predictable and 

scientific basis when accounting for these emissions in the 

PSD and Title V Programs. 

Section II.D discusses information that is lacking and 

needed for EPA to determine how to account for CO2 emissions 

from various types of feedstocks and facilities. 

A. Carbon Source and Sink Dynamics 

1. Cycling of CO2 between plants and the atmosphere 

Through relatively rapid photosynthesis, plants absorb 

CO2 from the atmosphere and add it to their biomass, which 

contains roughly 50% carbon by weight, through a process 

called sequestration. Some of the carbon absorbed by 

plants may eventually be transferred from dead organic 

matter to the soil where it can remain for long periods of 

time. Plant biomass, dead organic matter, and soil carbon 

are “pools” that together make up the carbon stock on a 

given area of land. Carbon can cycle fairly rapidly back 

Comment [dsg3]: Does EPA mean to be 

that specific in this context? 
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to the atmosphere or it can remain stored on land. Stored 

carbon can be released naturally back into the atmosphere 

as CO2 through decomposition or plant respiration. 

When biological material such as plant biomass is 

harvested or cleared from the land, burned for energy, used 

as an input to an industrial process, or biodegraded as 

part of waste treatment processes, the material acts as a 

source of carbon, releasing its stored carbon back into the 

atmosphere as CO2. Over large spatial scales such as 

states, regions, or continents, if more carbon is 

sequestered in plant biomass than is emitted to the 

atmosphere through processes such as harvest, fire, or 

natural decomposition, plant biomass acts as a net sink for 

carbon. Conversely, if more carbon is released than is 

sequestered, plant biomass acts as a net source for carbon. 

Soils can also be net sources or sinks depending on the 

balance of carbon added from biomass and lost through 

disturbances such as tillage or deforestation. 

2. Treatment of biogenic CO2 emissions in the U.S. GHG 

Inventory 

National-level GHG inventories are a common starting 

point for quantification of the source and sink status for 

particular land areas. The Inventory tracks annual GHG 
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emissions including emissions of CO2, CH4, N2O, 

hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and 

sulfur hexafluoride (SF6). The United States (U.S.) has 

submitted the Inventory to the Secretariat of the United 

Nations Framework Convention on Climate Change (UNFCCC) 

under its obligation as a Party to the Convention every 

year since 1993. The UNFCCC, ratified by the U.S. in 1992, 

defines the overall framework for intergovernmental efforts 

to tackle the challenge posed by climate change. The 

Inventory submitted by the U.S. is consistent with national 

inventory data submitted by other UNFCCC Parties, and uses 

internationally accepted methodologies established by the 

Intergovernmental Panel on Climate Change (IPCC). 

The Revised 1996 IPCC Guidelines (IPCC Guidelines)4

provide methodologies for estimating all anthropogenic 

sources and sinks of GHG emissions at the national scale, 

classified into six broad sectors: Energy, Industrial 

Processes, Solvents and Other Product Uses, Agriculture, 

Land-Use Change and Forestry (LUCF), and Waste. 

 

4

 “Revised 1996 IPCC Guidelines for National Greenhouse Gas 

Inventories.” Intergovernmental Panel on Climate Change (IPCC), 

Prepared by the National Greenhouse Gas Inventories Programme. 1996. 

http://www.ipcc-nggip.iges.or.jp/public/gl/invs1.html (incorporated by 

reference into Docket EPA-HQ-OAR-2011-0083) 
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The Energy Sector includes all GHGs emitted during the 

production, transformation, handling and consumption of 

energy commodities, including fuel combustion. The LUCF 

Sector includes emissions and sequestration resulting from 

human activities that influence the way land is used or 

that affect the size of carbon stocks on land. According 

to the IPCC Guidelines, CO2 emissions from biomass 

combustion: 

 “... should not be included in national CO2 emissions 

from fuel combustion. If energy use, or any other 

factor, is causing a long term decline in the total 

carbon embodied in standing biomass (e.g. forests), 

this net release of carbon should be evident in the 

calculation of CO2 emissions described in the Land Use 

Change and Forestry chapter.”5

Thus, at the national level, these CO2 emissions are 

not included in the estimate of emissions from a country’s 

Energy Sector, even though the emissions physically occur 

at the time and place in which useful energy is being 

generated (i.e., power plant or other stationary source). 

The purpose of this accounting convention is to avoid 

double-counting of CO2 emissions from the Energy Sector and 

LUCF Sector that would provide a misleading 

characterization of a country’s contribution to global GHG. 

Carbon dioxide emissions from a subset of bioenergy sources 

 

5

 Id., Reference Manual (Vol. 3), Page 1.10. 
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are reported as information items in the Energy Sector of 

the Inventory, but are not included in national fuelcombustion totals to avoid this double-counting at the 

national scale.6

 

The Inventory is a comprehensive report of emissions 

at the national scale. All biogenic CO2 emissions, as 

defined in this deferral, are also included in the 

Inventory. However, because the Inventory is organized by 

broad sector, not by facility type, this deferral covers 

biogenic CO2 emissions that may be reported in any sector of 

the Inventory. 

3. Accounting for carbon stocks on land in the U.S. GHG 

Inventory 

The LUCF Sector includes all of the land-based source 

categories of GHG emissions and sinks. In the U.S. 

Inventory, EPA’s estimate of emissions and sinks from U.S. 

land areas is divided into forest land, crop land, 

grassland, wetlands, settlements, and other land. The 

largest stocks of carbon are found on forestlands. 

 

6

 The Energy Sector of the Inventory does include emissions of CH4 and 

N2O from the combustion of biomass for energy. These emissions are 

included in this sector because their magnitude is dependent on the 

specific way in which the fuel is burned (i.e., combustion technology 

and operating conditions), which cannot be known by analyzing the 

changes in the amount of carbon in standing biomass. 
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Data from the U.S. Department of Agriculture (USDA) 

Forest Service Forest Inventory and Analysis Program are 

used to develop national-scale estimates of forest carbon 

stocks and carbon stock change. The methodology relies on 

annual or periodic surveys to assess changes in carbon 

stocks over the entire forest land base. The overall 

change in land-based forest carbon stocks from year to year 

represents the net carbon balance between atmosphere and 

forest land. Importantly, this measurement of the net 

change in forest carbon stocks integrates and inherently 

includes all of the factors that might influence forest 

carbon stocks, such as insect outbreaks, wildfire, 

prescribed fire, all types of harvest (including harvest 

for bioenergy uses), forest management, enhanced growth, 

and land use change. As noted earlier, when trees are 

harvested for bioenergy the CO2 combustion emissions do not 

occur in the forest but rather in a power plant or 

industrial facility. Following the convention established 

by the IPCC in the Guidelines, EPA nevertheless counts 

these emissions as occurring on forestland for purposes of 

developing the Inventory. 

In assessing CO2 emissions from the LUCF Sector, EPA 

looks to the net change in carbon stocks. Over the time 
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period of interest, if the net change in forest carbon 

stocks is positive, then more carbon was sequestered on 

land in carbon pools (such as those described in section 

II.A.1) than was lost to the atmosphere (through all of the 

processes previously described, such as decomposition, 

fire, and harvest). In this case the land is acting as a 

net carbon sink. If the net change in land-based carbon 

stocks is negative, over the time period of interest more 

carbon was emitted to the atmosphere than was sequestered 

on land, and the forest was a net source for carbon. 

Averaged over the years 1990-2008, data from the 

Inventory show that the LUCF sector in the U.S. has been a 

net sink of roughly 815 teragrams (Tg) carbon dioxide 

equivalent (CO2e) per year.7

 This sink is about 12% of the 

average gross emissions from all other sources combined in 

the U.S. over the same time period.8

 Future national 

projections under business as usual (BAU), as reported in 

the Fifth U.S Climate Action Report (CAR) submitted to the 

 

7

 84% of this amount is from C stock change in the forest source 

categories; the remainder comes from source categories such as 

Sequestration in Urban Trees and C stock changes in mineral soils on 

crop land and grassland. U.S. EPA, Inventory of U.S. Greenhouse Gas 

Emissions and Sinks: 1990-2008 (See data archived at

http://www.epa.gov/climatechange/emissions/downloads10/2010-InventoryChapter-Tables.zip). See also Tables 1 and 2, LUCF sector C 

storage.pdf, available in docket at EPA-OAR-HQ-2011-0083. 

8

 See Table ES-4 of U.S. EPA, Inventory of U.S. Greenhouse Gas Emissions 

and Sinks: 1990-2008. 
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UNFCCC in 2010, suggest that this LUCF sink is likely to 

continue, if not increase in size, at least until 2020.9

 

In 2010, for the first time since EPA began tracking 

emissions and sinks, the Inventory included estimates of 

forest carbon stocks and stock change at the state level. 

Forestlands in seven (7) U.S. states (AZ, CT, ID, LA, MI, 

ND, and VT) were net sources of carbon averaged over the 

time period from 2000 to 2008. In one state (AK) the 

forestland was neither a source nor a sink.10 Forestlands 

in all other states were net sinks for carbon over that 

time period. 

The IPCC Guidelines, as utilized in the Inventory, 

seek to estimate net changes in carbon stocks on land for a 

given period of time that occurred in the past. However, 

neither the IPCC Guidelines nor the Inventory were designed 

to quantify the net atmospheric impacts of a particular 

type of fuel from a stationary source over a specified time 

period, that extends into the future. 

 

9

 U.S. Climate Action Report 2010. Fifth National Communication of the 

United States of America under the United National Framework Convention 

on Climate Change. Chapter 5 Projected Greenhouse Gas Emissions, page 

81. www.state.gov/documents/organization/140636.pdf 10 U.S. EPA. 2010. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 

1990-2008. U.S. EPA #430-R-10-06. See Annex 3.12 (Table A-210). 

Available at http://www.epa.gov/climatechange/emissions/downloads10/USGHG-Inventory-2010-Annex-3-Addtl-Source-Sink-Categories.pdf 
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4. Distinction between biogenic and fossil CO2 carbon 

reservoirs, and between biogenic CO2 and non-GHG pollutants 

Once CO2 is emitted to the atmosphere, it is not 

possible to distinguish between the radiative forcing 

associated with a molecule of CO2 originating from a 

biogenic source and one originating from the combustion of 

fossil fuel. Biogenic CO2 differs qualitatively from fossil 

CO2 in that there is a significant difference between fossil 

carbon and biogenic carbon in the length of time required 

to replenish the reservoirs where the carbon is stored. 

For example, many coal deposits in North America originated 

during the Carboniferous Period, hundreds of millions of 

years ago. In contrast, the reservoirs of carbon found on 

the surface of Earth, in pools such as tree biomass and 

cropland soils, have accumulated over decades, not 

millennia. Because these land-based biomass carbon stocks 

can be replenished more quickly than fossil carbon stocks, 

these biogenic carbon stocks can act as a sink on a far 

shorter time scale than fossil carbon. 

Another way in which biogenic CO2 differs from fossil 

CO2, as well as from other regulated pollutants, is the 

sometimes ambiguous like between emissions caused by human 

activities and emissions that occur as part of the natural 
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background emission fluxes. There are both natural 

biogenic CO2 emissions and anthropogenic biogenic CO2

emissions. For example, natural fires, decomposition, and 

plant respiration all result in substantial biogenic 

emissions of CO2. These transfers of CO2 between land and 

atmosphere are critical to the maintenance of life on 

Earth. However, human activities, such as prescribed fires 

and land management practices (i.e., anthropogenic biogenic 

CO2 emissions), can also influence the release of CO2 from 

natural systems and these activities have certainly 

contributed to the buildup of CO2 in the atmosphere. There 

are challenges in categorizing the CO2 emissions that would 

have occurred naturally versus the emissions attributable 

to human activity. While the Inventory accounts for all 

anthropogenic biogenic CO2 emissions at the national level, 

this deferral and the Agency’s intent to conduct a detailed 

examination of the science associated with biogenic CO2

emissions and technical issues in accounting for those 

emissions at stationary sources is our effort to better 

characterize these distinctions and the associated impacts. 

B. PSD, Title V, and Tailoring Rule 

Central to today’s action are the PSD and Title V 

programs and their applicability requirements. This 

Deleted: (i.e., anthropogenic 

biogenic CO2 emissions)
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section provides background information on those programs 

as relevant for today’s action. 

1. The PSD Program 

The PSD program is a preconstruction review and 

permitting program applicable to "new major stationary 

sources" and "major modifications" at existing major 

stationary sources, in the terminology of EPA's 

implementing regulations. The PSD program applies in areas 

meeting the health-based National Ambient Air Quality 

Standards (NAAQS) or for which there is insufficient 

information to determine whether they meet the NAAQS. The 

applicability of the PSD program to a particular source 

must be determined in advance of construction or 

modification. The primary criterion in determining PSD 

applicability is whether the proposed project is 

sufficiently large (in terms of its emissions) to be a 

major stationary source or major modification. 

Under the Clean Air Act (CAA), the PSD program applies 

to any “major emitting facility” that undertakes 

construction, and such facility is defined to include “any 

... source [that] emit[s], or ha[s] the potential to emit, 

one hundred [or, depending on the source category two 

hundred fifty] tons per year or more of any air pollutant.” 
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CAA sections 165(a), 169(1). In this notice, we refer to 

these levels as the 100/250-tpy thresholds. In addition, 

Congress also applied PSD to any existing major emitting 

facility that undertakes a “modification,” and defined that 

term to include “any physical change in, or change in the 

method of operation of, a stationary source which increases 

the amount of any air pollutant emitted by such source or 

which results in the emission of any air pollutant not 

previously emitted.” CAA sections 165(a), 169(2)(C), 

111(a)(4). 

The EPA has reiterated these CAA requirements in its 

long-standing regulations that implement PSD, although it 

interpreted these requirements so that they apply only with 

respect to air pollutants that are subject to regulation 

under the CAA. Specifically, under EPA’s regulations, a 

“major stationary source” is any source type belonging to a 

specified list of 28 source categories which emits or has a 

potential to emit (PTE) 100 tpy or more of any pollutant 

subject to regulation under the CAA, or any other source 

type which emits or has the potential to emit such 

pollutants in amounts equal to or greater than 250 tpy. 

See, e.g., 40 CFR 52.21(b)(1). A new source with a PTE at 

Deleted: narrowly 

Comment [dsg4]: Suggest deleting as 

unnecessary and open to potential 

misinterpretation

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or above the applicable "major stationary source threshold" 

amount is subject to PSD. 

The regulations also reiterate that PSD applies to not 

only new construction but also to existing sources that 

undertake a "major modification," which is defined in terms 

of the following three criteria: 

(1) A physical change in, or change in the method of 

operation of, a "major stationary source" must occur; 

(2) The change must result in an increase in emissions 

that is "significant," that is, equal to or above the 

significance level defined for the pollutant in 

question, e.g., in 40 CFR 52.21(b)(23)); and 

(3) The increase in emissions resulting from the 

change must be a significant net emissions increase. 

 

More specifically, with respect to significant levels, when 

the increase from the project is added to other 

contemporaneous increases or decreases in actual emissions 

at the source, the net emissions increase must be 

significant (equal to or above the significance level 

defined in regulations). 40 CFR 52.21(b)(23) and (b)(48). 

Generally, significance levels for PSD are pollutant 

specific emissions rates. For example, the significance 

level for emissions of nitrogen oxides (NOx) is 40 tpy. 

See, e.g., 40 CFR 52.21(b)(23)(i). 

Under the PSD program, one of the principal 

substantive requirements is that a new major source or 
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major modification must meet an emissions limitation based 

on application of BACT, which is an emissions limitation 

determined on a case-by-case basis taking into account, 

among other factors, the cost and effectiveness of the 

control. BACT applies to each “regulated NSR pollutant.” 

Under PSD, once a source is determined to be major for any 

regulated pollutant, a BACT review is performed for each 

pollutant subject to regulation under the CAA (except for a 

pollutant for which the area has been designated 

nonattainment) whose emissions exceed its PSD significance 

level as part of new construction or modification projects 

at the source. See 40 CFR 52.21(a)(2), (j)(2) and (3) and 

40 CFR 52.21(b)(23). 

To identify the pollutants covered by the PSD program, 

EPA regulations define the term “regulated NSR pollutant.” 

This definition applies to determine both the pollutants 

subject to the BACT requirement and pollutants that are 

counted to determine whether a source is a major source 

required to obtain a PSD permit. The term “regulated NSR 

pollutant” is incorporated into the definition of BACT and 

definitions of “major stationary source” and “major 

modification.” 40 CFR 52.21(b)(12); 40 CFR 52.21(b)(1)-

(2). A “regulated NSR pollutant” includes: 

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(i) Any pollutant for which a national ambient 

air quality standard has been promulgated and any 

pollutant identified under this paragraph 

(b)(50)(i) as a constituent or precursor for such 

pollutant. ...; 

(ii) Any pollutant that is subject to any 

standard promulgated under section 111 of the 

Act; 

(iii) Any Class I or II substance subject to a 

standard promulgated under or established by 

title VI of the Act; 

(iv) Any pollutant that otherwise is subject to 

regulation under the Act; except that any or all 

hazardous air pollutants either listed in section 

112 of the Act or added to the list pursuant to 

section 112(b)(2) of the Act, which have not been 

delisted pursuant to section 112(b)(3) of the 

Act, are not regulated NSR pollutants unless the 

listed hazardous air pollutant is also regulated 

as a constituent or precursor of a general 

pollutant listed under section 108 of the Act. 

2. Title V 

The Title V permit program establishes operating 

permit requirements that are intended to improve sources' 

compliance with other CAA requirements. Title V generally 

does not add new pollution control requirements, but it 

does require that each source subject to its requirements 

obtain an operating permit that assures compliance with all 

pollution control requirements or “applicable requirements” 

required by the CAA (e.g., NSPS, and state implementation 

plan (SIP) requirements, including PSD), and it requires 
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that certain procedural requirements be followed, 

especially with respect to compliance with these 

requirements. "Applicable requirements" for Title V 

purposes include stationary source requirements, but do not 

include mobile source requirements. Other procedural 

requirements include providing review of permits by EPA, 

states, and the public, and requiring permit holders to 

track, report, and annually certify their compliance status 

with respect to their permit requirements. 

The CAA applies Title V, through the definition of 

“major source,” to “any stationary facility or source of 

air pollutants which directly emits, or has the potential 

to emit, one hundred tons per year or more of any air 

pollutant.” CAA sections 502(a), 501(2)(B), 302(j). EPA 

codified in the Tailoring Rule its long-established 

interpretation that this definition applies only with 

respect to air pollutants that are subject to regulation 

under the CAA.11

3. Tailoring Rule 

a. Rationale and Requirements 

 

11 Memorandum from Lydia N. Wegman, Deputy Director, Office of Air 

Quality Planning and Standards, U.S. EPA, “Definition of Regulated Air 

Pollutant for Purposes of Title V” (April 26, 1993). 
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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 

GHG-emitting sources as of January 2, 2011 – the date by 

which EPA determined that GHGs become subject to regulation 

under the CAA due to the motor vehicle rule, which 

resulted in PSD and Title V applicability - and instead, 

that EPA is authorized to tailor those applicability 

requirements to apply to such sources in a phased-in 

manner, starting with the largest sources first. 

Specifically, in the Tailoring Rule, EPA interpreted 

these PSD and Title V applicability provisions under the 

familiar Chevron12 two-step framework for interpreting 

administrative statutes, taking into account certain legal 

doctrines. Those doctrines, insofar as relevant to the 

 

12 Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). 

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present action, 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 avoid 

absurd results; and (2) the “administrative necessity” 

doctrine, which authorizes agencies to apply statutory 

requirements in a way that avoids impossible administrative 

burdens.13 

Under Chevron, the agency must, at step 1, determine 

whether Congress’s intent as to the specific matter at 

issue is clear, and, if so, the agency must give effect to 

that intent.14 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. 

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 their terms. However, under the “absurd 

 

13 In the Tailoring Rule, EPA also considered a third doctrine, the 

“one-step-at-a-time” doctrine, which authorizes agencies to implement 

statutory requirements a step at a time. This doctrine is not relevant 

to the present rulemaking. 

14 Chevron, 467 U.S. at 842-43.
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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. 
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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 PSD and Title V were applied literally as 

of January 2, 2011 to GHG-emitting 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 GHGemitting sources, but that, in light of the burdens to the 

permitting authority and the costs to the sources of 

applying permitting requirements at the statutory 

thresholds as of January 2, 2011, 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 of the amount of GHG emissions should 
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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, normalized to the GWP of one ton 

of CO2 over a 100-year period, which is called carbon 

dioxide equivalent (CO2e). 

Accordingly, in the Tailoring Rule, EPA established 

two steps to implement PSD and Title V, with Tailoring Rule 

Step 1 beginning on January 2, 2011, which would apply to 

sources subject to PSD or Title V anyway due to their other 

pollutants (which we call “anyway” sources) and, as to PSD, 

to sources that emit 75,000 tpy CO2e (or increase emissions 

by that amount for modifications). Tailoring Rule Step 2,

beginning on July 1, 2011, would apply to the largest GHGemitting sources. Sources not otherwise subject to Title V 

would become subject to it as of July 1, 2011 if they emit 

or have the potential to emit at least 100,000 tpy CO2e, 

while sources that would not otherwise trigger PSD would 

trigger PSD if they construct at the 100,000 tpy CO2e level 

and higher or emit at that level and modify at the 75,000 

tpy CO2e level as of that date. In addition, EPA committed 

to promulgate by July 1, 2012 another rulemaking – in 

effect, Step 3 - that would consider whether to reduce the 

thresholds further. EPA also committed to promulgate 

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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. 

b. Biomass 

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. The Tailoring 

Rule proposal referenced EPA’s Inventory submitted 

annually to the UNFCCC, for the applicable GWP values and 

guidance on how to calculate a source’s GHG emissions in 

tpy CO2e.15,16 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 

 

15 “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2007,” 

U.S. Environmental Protection Agency, EPA 430–R–09–004, April 15, 2009. 

p. ES–3. See also the SAR GWPs (IPCC 1996) in table 1–2, p. 1–6. 

http://www.epa.gov/climatechange/emissions/usinventoryreport.html

16 Prevention of Significant Deterioration and Title V Greenhouse Gas 

Tailoring Rule, 75 Fed. Reg. 31514-31608 (June 3, 2010) (amending 40 

CFR Parts 51, 52, 70, and 71) 

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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 

requested that, in calculations of applicability under 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 GHGs 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). 

In response, when finalizing the Tailoring Rule, we 

acknowledged the role that biomass or biogenic fuels and 

feedstocks could play in reducing anthropogenic GHG 
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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. See 75 FR 31514. Regarding commenters’ claims 

that the Inventory excludes CO2 emissions from biomass, we 

clarified that the Inventory does not exclude these 

emissions (see section II.A.2). Rather, they are included 

in the LUCF 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 

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such an exclusion alone, while reducing burdens for some 

sources, would not address the overwhelming permitting 

burdens, and a threshold-based 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 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 propose any sort of 

permanent exclusion from PSD or Title V applicability based 
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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 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 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. 

In order to explore the issue further following the 

promulgation of the Tailoring Rule, on July 15, 2010 (75 

FR 41173), EPA solicited views from the public through a 

Call for Information (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. 

Also, we solicited information on the means to estimate 
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and measure CO2 emissions from a variety of biogenic CO2

sources that typically have not been part of emission 

inventories (e.g., 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 reviews and operating permits including 

many requests to exclude, either partially or wholly, 

biogenic CO2 sources from PSD 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.17 Within the 

November guidance, EPA acknowledged the numerous 

stakeholder comments on biogenic CO2 BACT analyses and 

 

17 “PSD and Title V Permitting Guidance for Greenhouse Gases; Draft.” 

Prepared by EPA staff. November 2010. Available at: 

http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf
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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 biogenic 

CO2 BACT analyses to enable permitting authorities to 

simplify and streamline BACT determinations with respect 

to certain types of biomass. Public comments on the 

November guidance were accepted through December 1, 

2010, and EPA is considering these comments while 

developing the detailed permitting guidance. 

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 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 
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authorities might determine that certain types of 

biomass by themselves are BACT for GHGs. 

On August 3, 2010, NAFO petitioned the EPA to 

reconsider and stay the implementation of the PSD and 

Title V GHG Tailoring Rule.18 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 nearuniversal 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 

 

18 National Alliance of Forest Owners’ Petition to Reconsider the 

Prevention of Significant Deterioration and Title V Greenhouse Gas 

Tailoring Rule and to Stay the Rule Pending Reconsideration. See EPAHQ-OAR-2010-0841-0029.1
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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 GHG 

permitting. Through the CFI, however, EPA also received 

information supporting the conclusion that biogenic CO2

should not be excluded from GHG permitting, 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 on the CFI, EPA has concluded that the 

issue of accounting for 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 
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requested relief of excluding emissions of CO2 from biomass 

from application of 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 the legal regime 

that existed before EPA's issuance of a final 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. 

C. Complexity of determining net atmospheric impact of 

CO2 emissions and incorporating this information into the 

PSD and Title V Programs 

 In this section we discuss the complexity of the 

issues associated with reconciling facility-based and landbased sequestration accounting systems, as well as with 

accounting for land-based sequestration. Based on comments 

received from stakeholders in the CFI, we discuss further 

some general principles for land-based accounting (e.g., 

changes in the BAU baseline), and we present some of the 

proposed accounting methodologies (e.g., case-by-case 

analysis, categorical exclusion, contingent exclusion, and 

feedstock-based approaches). 

1. Reconciling accounting systems: facility-based 

emissions and land-based sequestration 
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Within the context of the PSD and Title V Programs, to 

account for CO2 emissions from bioenergy and biogenic 

sources differently from fossil-based CO2 emissions at the 

facility relies on the premise that sequestration occurs. 

The sequestration occurs offsite, outside the boundaries of 

the facility. Therefore, it is important that the 

sequestration be accounted for at a level of spatial and 

temporal resolution that is meaningful and practical for 

purposes of facility-based GHG permitting. Such an 

accounting system must also be predictable, so that it can 

be utilized effectively by facilities and permitting 

authorities. Finally, the accounting system should be 

scientifically sound to allow for accurate accounting of 

net CO2 emissions to the atmosphere. 

 In addition to those commenters suggesting a 

categorical approach (i.e., as discussed below, an 

exclusion for all biogenic CO2 emissions based on a finding 

of a net sink in the LULUCF section of the Inventory) other 

comments in response to the CFI repeatedly explained that 

different types of biological material (e.g., feedstocks) 

have different effects on atmospheric carbon emissions. 

Comments also underscored the importance of reconciling the 

facility-based permitting requirements under PSD and Title 

Deleted: i.e.
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V with an accounting approach that relies upon estimates of 

land-based sequestration. This reconciliation will require 

careful attention to issues of spatial and temporal scale, 

to ensure that the principles of practicality, 

predictability, and scientific soundness are met. 

2. Complexity in accounting for land-based sequestration 

Establishing an accounting system for biogenic CO2

emissions from stationary sources is complex. As mentioned 

above and below, commenters to the CFI made suggestions 

ranging from a categorical exclusion to a case by case 

analysis approach. Multiple factors need to be considered 

to accurately assess the net atmospheric impacts of a 

particular type of fuel from a stationary source over a 

specified time period, that extends into the future: net 

emissions (emissions and sequestration) of carbon from the 

biomass used for bioenergy; the time scale against which 

net emissions should be measured; delineation of geographic 

areas for measurement; and leakage. 

Many of these factors are driven by or determined at 

the local or regional level. Bioenergy production may 

result in dramatic changes in one region’s carbon stock, 

for example, and very little change in another’s. Regional 

variability is also inherent in natural systems, for 

Comment [dsg5]: This is a term of 

art that has not been previously 

defined. 
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example in rates of plant growth and disturbance 

frequencies. Some areas are more prone to disturbances 

such as drought and fire, while other areas experience 

warmer temperatures and unpredictable precipitation 

patterns. Some areas receive more atmospheric nitrogen 

deposition than others, or are more susceptible to insect 

outbreaks. Species-specific variations are important as 

well: some plant species simply grow more quickly than 

others. 

As mentioned above, considerations of spatial and 

temporal scale become increasingly important in an 

accounting system that seeks to reconcile facility-based 

emissions with land-based sequestration. How large an area 

should be considered when developing an accounting system – 

should it be facility-level, ownership-level, state-level, 

regional, or national? What is the appropriate period of 

time to be considered in the accounting system – should it 

roughly parallel the length of time required for plant 

biomass to re-sequester the amount of CO2 released during 

the biomass combustion? How might this time period differ 

for various biomass types? Can the issues of spatial and 

temporal scale be considered together, such that the time 

period considered for the analysis varies depending on 
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where the land is located or how large an area is 

considered? 

Given the inherent variability in biological 

processes, as well as the variability in spatial and 

temporal scales that can influence estimates of 

sequestration, general principles that can be broadly 

applicable to all aspects of accounting for CO2 emissions 

from bioenergy and other biogenic sources will likely be 

most helpful. 

3. General principles 

The level of sequestration that occurs naturally on 

the landscape without additional intervention can be 

considered as the “baseline.” In other words, this level 

of sequestration (or emissions) will likely continue into 

the future without additional action. For example, if 

favorable conditions for plant growth cause sequestration 

to increase beyond what is incorporated into the baseline 

for that region, then net atmospheric carbon levels will be 

lower than anticipated under BAU. If sustainable forestry 

is practiced, then neither gain nor loss from carbon stocks 

on forestland would be expected over time, and net 

atmospheric carbon levels would not deviate from those 

expected in the BAU case. However, if logging is 
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accelerated from a particular region over a certain period 

of time, and CO2 emissions from the forest are thereby 

increased, then the net atmospheric carbon levels will be 

higher than anticipated in the BAU case. 

In the context of bioenergy and biogenic emissions, 

where such a wide variety of potential feedstocks exists, 

the baseline might be considered the emissions that “would 

have happened anyway” in the BAU case. Using this 

approach, it is necessary to determine the extent to which 

a policy action or an activity increases or reduces CO2

emissions above or below what would have occurred in 

comparison with the baseline. From the perspective of 

bioenergy and other biogenic emissions, emissions that 

would have occurred anyway -- regardless of whether or not 

the facility captured the energy from the biofuel use or 

carried out the process using biological material as a 

feedstock -- might be treated differently than emissions 

that would not have occurred anyway (i.e., new emissions 

generated as the result of policy-based bioenergy 

incentives). For example, some commenters to the CFI 

suggested that utilizing logging residue to generate 

energy, rather than leaving the residue to decompose on the 

forest floor following harvesting, likely would not cause 
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emissions over and above that which would have taken place 

if the energy use did not occur, while also noting the 

length of time required for the residue to decompose (for 

example, 10-15 years). 

Land use change has a separate set of considerations 

under the baseline case. For example, if the rate of land 

use transition from forest to agricultural use were to 

increase over and above that which was expected in the BAU 

case, and if this increase were attributable to market 

demand for a bioenergy crop, then it would be possible that 

these emissions would be additional to the emissions 

expected under BAU. In that situation, the bioenergy use 

might result in increased atmospheric CO2 levels. 

4. Complexity in developing accounting methodology 

In response to the CFI, commenters suggested various 

approaches to accounting for CO2 emissions from bioenergy 

and other biogenic sources. 

a. Case-by-case analysis 

Some commenters suggested that analysis of PSD 

applicability should rely on a case-by-case, facilityspecific assessment of the net atmospheric impact of the 

intended biomass fuels. This would require facility-level 

accounting for the emissions associated with the full chain 
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of fuel production and use. Commenters indicated that this 

type of facility-specific approach would be the most 

scientifically sound approach for assessing the net carbon 

cycle impact of specific biomass fuels. 

However, other commenters noted that the case-by-case 

approach, in which a complete analysis would be conducted 

for each permit application, would likely be prohibitively 

time-consuming and complex for facilities and permitting 

authorities. 

b. Categorical exclusion 

Some commenters suggested that a categorical exclusion 

for all bioenergy and biogenic sources would be 

appropriate. Using this approach, no emissions from any 

such sources would be counted for PSD applicability. 

According to commenters supporting this option, the 

rationale for such an exclusion rests on the idea that all 

biological sources are part of the “active carbon cycle,” 

in which CO2 is cycled between the land and atmosphere on a 

relatively short timeframe. 

c. Contingent exclusion 

In other comments, stakeholders suggested that a 

categorical exclusion for all bioenergy and other biogenic 

sources would be appropriate with an added contingency. 
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For example, all bioenergy and other biogenic emissions 

could be excluded from PSD applicability as long as forest 

land in the U.S. remains a net carbon sink, such that 

sequestration remains greater than emissions at the 

national scale. Some commenters suggested that this 

contingency might also be expressed at a state scale, such 

that all facilities that emit CO2 from bioenergy or other 

biogenic sources would be excluded from applicability as 

long as the forest land within that state acts as a net 

carbon sink. 

d. Feedstock-based approach 

An important area of consensus from commenters was the 

idea that feedstocks are different, and that the net impact 

of bioenergy and other biogenic emissions may be traceable 

to the feedstock that is used. For example, commenters 

indicated that it would be preferable to distinguish 

various categories of woody biomass feedstocks, such as 

wood waste, logging residue, forest treatment thinnings, 

biomass crops, and whole-tree chips from expanded harvest 

operations. Various other feedstock categorizations for 

different types of material were also proposed19. 

 

19 Though this proposed rule concerns emissions from stationary sources, 

we note that various motor vehicle fuels are derived from plant 
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D. Designing and Implementing an Accounting Approach

 As described in section III below, EPA is proposing to 

defer the applicability of the PSD and Title V program to 

biogenic CO2 emissions from stationary sources for three 

years in order to allow time for a detailed examination of 

the science associated with biogenic CO2 emissions and to 

consider the 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. 

As part of that examination we intend to engage with an 

independent scientific panel to ensure a robust review of 

the scientific and technical issues associated with this 

type accounting. During this time period the Agency can 

 

material. For example, ethanol can be produced from plant starch or 

cellulose, and diesel fuel can be produced from various plant oils. 

The Energy Independence and Security Act of 2007 (EISA) required EPA, 

in the context of implementing the renewable fuel program under section 

211(o) of the CAA, to evaluate the lifecycle greenhouse gas emissions 

of these and other motor vehicle fuels. EISA defines lifecycle 

greenhouse gas emissions as “...the aggregate quantity of greenhouse gas 

emissions (including direct emissions and significant indirect 

emissions such as significant emissions from land use changes), as 

determined by the Administrator, related to the full fuel lifecycle, 

including all stages of fuel and feedstock production and distribution, 

from feedstock generation or extraction through the distribution and 

delivery and use of the finished fuel to the ultimate consumer...”. 

EPA’s analysis of the various fuels demonstrated that multiple factors, 

including the type of feedstock used, resulted in a wide variation in 

their associated lifecycle GHG emissions. For example, from a 

lifecycle perspective some of the analyzed motor vehicle fuels result 

in very large reductions in GHG emissions compared to the fossil fuel 

they replace, while others do not. The lifecycle analyses of the motor 

vehicle fuels took into account a wide range of factors, including the 

carbon sequestration associated with the biomass. See 75 FR 14670, 

14764-799 (March 26, 2010). 
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develop an appropriate accounting methodology that 

satisfies the principles of predictability, practicality, 

and scientific soundness. Should it be necessary, EPA 

proposes to implement the appropriate accounting 

methodology through notice-and-comment rulemaking within 

the three-year timeframe. 

III. Interim Deferral of Biogenic CO2 Emissions Under the 

PSD and Title V Permitting Programs 

As stated above, one critical reason for the proposed 

deferral is to give EPA time to conduct a detailed 

examination of the science, to engage with an independent 

scientific panel and then, if appropriate, to initiate a 

notice and comment rulemaking to implement an accounting 

approach all within the proposed three year timeframe. 

Another important reason for the three-year deferral 

period, described in Section III.C below, is to allow 

sufficient time to consider the unique characteristics and 

attributes of biogenic CO2 feedstocks, using the results 

from the detailed examination mentioned previously, within 

both the state permitting agencies and affected facilities. 

We concluded that, absent this deferral, there would be 

significant additional and unique complexities, as 

described in more detail in section II.C. As a result 

Deleted: to
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there would be additional permitting burden in terms of 

time and resources requirements, resulting from the 

associated analysis that would be required for permitting 

entities that are sources of biogenic CO2 emissions under 

Step 2 of the Tailoring Rule, which is scheduled to begin 

on July 1, 2011. 

While the interim guidance described in section III.D 

will help alleviate some of this burden in Step 1 of the 

Tailoring Rule (which runs from January 2, 2011 to July 1, 

2011), 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 

pre-requisite 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. 
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Also, as described in section III.D, this proposed 

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. 

A. General Rationale and Legal Justification for Interim 

Deferral

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 provisions 

included under the definition of “subject to regulation” in 

the 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. 

Deleted: GHG
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Specifically, with respect to PSD, EPA’s regulations 

implement the PSD provisions of the CAA, and the language 

of these statutory provisions is broad enough to cover 

biogenic CO2 emissions. The 100/250 tpy thresholds 

previously described originate from section 169 of the CAA, 

which applies PSD to any "major emitting facility"20 and 

defines the term to include any source with a potential to 

emit “any air pollutant” in an amount over 100 or 250 tpy, 

depending on source category. EPA’s long-standing 

regulations interpret 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.” 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, GHG are 

currently “subject to regulation” under the CAA, subject to 

specific limitations reflected in the definition of that 

term that EPA adopted in the Tailoring Rule. Thus, under 

the terms of the CAA, emissions of GHG (including CO2) are 

considered in determining whether a source is a major 

 

20 EPA's regulations employ the term "major stationary source" in lieu 

of "major emitting facility." e.g., 40 CFR 52.21(a)(2)(i), (b)(1)(i). 

Deleted: The

Deleted: EPA’s interpretation of 
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emitting facility subject to PSD, as a result of 

construction or modification, and whether the BACT 

requirement applies to GHG (including CO2 as a component of 

GHG). In light of the way these regulations are currently 

written, EPA is unable to exclude biogenic CO2 emissions 

from PSD review. 

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 GHG and have triggered 

PSD as a result of these emissions. We call these sources 

“anyway” PSD sources, and bioenergy and other sources of 

biogenic CO2 emissions may be among them based on emissions 

of pollutants other than GHG. Under the Tailoring Rule, as 

of January 2, 2011 (the beginning of step 1 of the Rule), 

PSD permits for such a source will have to meet emissions 

limitations based on application of BACT for GHG if the 

source is newly constructed and has the potential to emit 

75,000 tpy or more of this pollutant on a CO2e basis; or is 

an existing source which, as a result of a modification, 

increases GHG emissions by 75,000 tpy or more on a CO2e 

basis and by any amount on a mass basis. In addition, 

starting on July 1, 2011 (the beginning of step 2 of the 

Deleted: because 
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Tailoring Rule), a source that is not an “anyway” PSD 

source, but that newly constructs and emits at least 

100,000 tpy CO2e GHG, or that is an existing source that 

emits at least 100,000 GHG tpy CO2e and that modifies and 

increases its GHG emissions by at least 75,000 tpy CO2e GHG 

and any amount on a mass basis, will need a PSD permit for 

its GHG, including any biogenic CO2. 

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), 302(g). In the Tailoring 

Rule, EPA codified its longstanding interpretation that 

this requirement only extends to major sources of air 

pollutants subject to regulation, and further defined 

“subject to regulation” such that it may include GHGs at 

sources which emit or have the potential to emit 100,000 

tpy CO2e as of July 1, 2011. As described immediately 

above, GHG are currently “subject to regulation” under the 

CAA (again, subject to specific limitations reflected in 

the definition of that term that EPA adopted in the 

Tailoring Rule), and as a result, emissions of GHG, 

including biogenic CO2 emissions, are considered in 
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determining whether a source is subject to Title V as of 

July 1, 2011. 

Under the Tailoring Rule, as of January 2, 2011 

(again, the beginning of step 1), sources that are subject 

to Title V anyway – which we call “anyway” Title V sources 

and which include existing sources with Title V permits, or 

new sources obtaining Title V permits, due to their non-GHG 

emission – will be required to address GHG, including GHG 

from biomass, to the extent there are Title V requirements 

relevant to GHG. This means that their Title V permits 

must contain, at the appropriate time, conditions necessary 

to assure compliance with any applicable requirements 

concerning their GHG emissions. As of July 1, 2011 (again, 

the beginning of step 2), new or existing sources that are 

not “anyway” Title V sources, that emit or have the 

potential to emit at least 100,000 GHG tpy CO2e (and 100 tpy 

on a mass basis), and are subject to an approved or EPApromulgated title V program, will become subject to Title V 

requirements. 

Therefore, absent some further regulatory action, EPA 

is unable to exclude biogenic CO2 emissions from the 

applicability of Title V. 

Deleted: s
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2. Authority to Exempt De Minimis Emissions 

As noted, since the relevant provisions of the Act 

apply to “any air pollutant” or any “air pollutant subject 

to regulation,” the terms of the CAA suggest that the PSD 

and Title V requirements should apply to CO2 emissions from 

bioenergy or other biogenic sources in the same manner as 

they apply to emissions of CO2 from any other type of 

source, since such emissions are constituents of the 

regulated pollutant GHG. However, as discussed elsewhere 

in this preamble, EPA believes it has the authority to 

exclude biogenic CO2 emissions from the PSD and Title V 

requirements for the proposed three-year deferral period 

and will be exploring whether 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 

(D.C. Cir. 1980). In this decision that specifically 

addressed the requirements of the PSD program, the DC 

Circuit described this principle as follows: 
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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 
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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 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 a source from all or part of the PSD program 

requirements. These include the significance levels 

(described previously), which are also called significant 

emissions rates, and air quality screening values called 
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significant impact levels (SILs) and significant monitoring 

concentrations (SMCs). 

The significant emission rates reflect levels below 

which EPA considers an emissions increase to be de minimis. 

45 FR 52676, 52705-07. They are applied to allow 

modifications having minimal impact to proceed without the 

need for obtaining a PSD permit. See also 40 CFR 

51.166(b)(23); 40 CFR 52.21(b)(23). In addition, these 

values may be used to eliminate the need for a permit to 

contain BACT limitations for a particular pollutant or to 

require a source to prepare an ambient air quality analysis 

for a particular pollutant that is not emitted or increased 

by significant amounts. 

 the (SMC)3. Potential for Some Biomass Feedstocks to Have 

a De Minimis Impact on Carbon Levels in the Atmosphere 

As discussed previously in this preamble, EPA has 

sufficient information at this time to conclude that at 

least some biomass feedstocks that may be utilized to 

produce energy have a negligible impact on the net carbon 

cycle, such as residue material (e.g., sawdust from 

milling operations) that would have decomposed under 

natural circumstances in a relatively short period of time 

(e.g., less than 10-15 years). Given this negligible 

Formatted: Underline

Deleted: Similarly, significant 

impact levels are intended to 

identify a level of ambient impact 

on air quality concentrations that 

EPA regards as de minimis. For a 

source that emits or increases 

emissions of a pollutant above the 

significant emission rate and has 

to prepare an air quality analysis, 

these values may be used to reduce 

the burden of that analysis. EPA 

considers a source whose individual 

impact falls below a SIL to have a 

de minimis impact on air quality 

concentrations. Thus, a source 

that demonstrates its impact does 

not exceed a SIL at the relevant 

location is not required to conduct 

more extensive air quality analysis 

or modeling to demonstrate that its 

emissions, in combinations with the 

emissions of other sources in the 

vicinity, will not cause or 

contribute to a violation of the 

NAAQS at that location. In light 

of

Deleted: insignificance of the 

ambient impact from the source 

alone, EPA considers the conduct of 

a cumulative air quality analyses 

and modeling by such a source to 

yield information of trivial or no 

value with respect to the impact of 

the proposed source or 

modification. See 75 FR 64864, 

64890-94 (October 20, 2010).¶

The significant monitoring 

concentrations

Deleted: in EPA regulations define a 

de minimis level of impact that EPA 

has concluded does not justify 

collecting pre-construction 

monitoring data for purposes of an 

air quality impact analysis. 45 FR 

52710. The EPA believes there is 

little to be gained from 

preconstruction monitoring of 

concentrations when the increased 

emissions from a proposed source or 

modification has a de minimis

impact on ambient concentrations. 

If a source can show through 

modeling of its emissions alone 

that its impacts are less than the 

corresponding SMC, there is little 

to be gained by requiring that 

source to collect additional 

monitoring data for a particular 

pollutant to establish background ... [1]

Deleted: . For example, this 

includes

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impact on the carbon cycle, the gain from regulating 

emissions from combustion of this feedstock for bioenergy 

could be considered to be trivial. Similar conclusions may 

be reached for other feedstocks as well. 

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 to limit emissions of CO2 before this 

assessment is complete, it may later determine that such 

actions have yielded trivial gain. To avoid this outcome, 

and because of the administrative burdens described 

elsewhere in this preamble, EPA believes an initial 

deferral of the PSD requirements for bioenergy and other 

biogenic sources is justified at this time. 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 application of the PSD program requirements 

to such emissions necessary to fulfill Congressional 

intent. Thus, EPA is proposing only a temporary, rather 
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than a permanent, deferral of PSD requirements for such 

sources at this time. 

4. Given the burden of case-by-case analysis and 

potential for de minimis impact, regulation at this time is 

not justified 

Since finalizing the Tailoring Rule, EPA has gathered 

additional information concerning biomass through the CFI. 

The information collected to this point 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. 

Further, methodologies are not sufficiently developed to 

assure that various permitting authorities would be able to 

reasonably and consistently perform the necessary 

calculations to determine the correct amount of GHG 

emissions in particular instances. 

The extensive workload requirements that PSD and 

Title V permit applications for bioenergy facilities and 

other sources of biogenic CO2 emissions would entail would 

necessarily strain permitting authority resources and 

result in delays in processing permits for other 

applicants. Moreover, at present, devoting these limited 
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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 biomass feedstocks for bioenergy has a 

negligible or de minimis impact on the net 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 to 

defer on a temporary basis biogenic CO2 emissions from PSD 

and Title V applicability, pending the detailed examination 

of the science associated with biogenic CO2 emissions from 

stationary sources, including engaging with an independent 

scientific panel, and considering 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. 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 apply to GHGs. EPA 

reasoned that, in accordance with the Chevron analytical 

framework for statutory construction, taking into account 

Deleted: potential,

Deleted: ,
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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 higher-emitting 

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, 

pending EPA’s development of streamlining methods and the 

permitting authorities’ acquisition of additional 

resources, so too the extensive workload of processing 

permit applications from biomass facilities justifies 

exempting those sources for a period of time, pending EPA’s 

development of a consistent and practical methodology for 

determining net carbon cycle impacts (see section II.D). 

The EPA proposes in the present action that a three-year 

deferral will be adequate to allow time for the development 

of the methodology. In effect, EPA proposes in this action 

to revise the Tailoring Rule’s phase-in approach to, in 

effect, defer the applicability of PSD and Title V to 

biogenic CO2 emissions, relying in part, on the same 
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rationale as EPA used to justify the Tailoring Rule’s 

phase-in approach. 

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 described in section 

II.D, we could conclude that the net carbon cycle impact 

for some biomass feedstocks is negligible. Accordingly, 

this could result in regulation that yields trivial gain 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 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. 

Deleted: and
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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 

proposed by the EPA (see section II.D) could ultimately 

conclude that 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. 

5. Subjecting biogenic CO2 emissions to permitting may be 

counterproductive because it could discourage utilization 

of the biomass feedstock as fuel 

 In some cases, the use of biological material as a 

fuel would clearly reduce net atmospheric CO2 levels. In 

these cases, requiring permitting at this time, before 

conducting the detailed scientific examination discussed in 
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section II.D that is required to develop an appropriate 

accounting system for bioenergy and other biogenic sources, 

might actually discourage projects that would have a net 

benefit for the atmosphere. For example, requiring 

permitting for facilities seeking to generate energy from 

the combustion of dead trees, especially those killed due 

to a widespread event like the mountain pine beetle 

epidemic, is likely to discourage the utilization of a 

readily available resource that would clearly reduce CO2

emissions (e.g., by removing and utilizing biomass material 

that would otherwise be susceptible to fire or decompose in 

the forest, leading to CO2 and CH4 emissions from 

decomposition). Likewise, combustion of CH4-laden biogas 

(e.g., from landfills or other large sources of methane) 

for energy production reduces overall CO2e emissions because 

of the higher GWP for CH4. 

B. CO2 Emissions that are Deferred

As discussed earlier, the deferral applies to biogenic 

CO2 emissions from biogenic feedstocks, rather than to 

specific types of facilities. All non-biogenic emissions 

from a facility continue to be included for purposes of PSD 

applicability throughout the deferral period. However, the 

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portion of the CO2 emissions from a facility that result 

from biologically-derived material are deferred and not 

included for purposes of determining PSD applicability 

during the deferral period. If fossil-derived fuel is used 

within a facility to provide energy for a process that also 

uses biological material, the emissions associated with the 

fossil fuel must be counted toward PSD applicability 

regardless of the use of the biological material. 

Specifically, the emissions that are deferred from 

applicability 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; 

 CO2 from combustion of the biological fraction of 

municipal solid waste or biosolids; 

 CO2 from combustion of the biological fraction of tirederived fuel; and 

 CO2 derived from combustion of biological material, 

including all types of wood and wood waste, forest 

residue, and agricultural material. 

C. Non-CO2 GHGs and Non-GHG Pollutants

As explained in section II.A.4, CO2 is unique among 

GHGs in that large and relatively rapid fluxes of CO2

between land and atmosphere occur as part of the global 
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biogeochemical system that maintains life on Earth.21 

Because other non-GHG pollutants and non-CO2 GHGs do not 

participate in natural biogeochemical cycles as CO2 does, 

this frame of reference – in which sequestration outside 

the facility is considered as part of the justification for 

differential treatment in the PSD and Title V programs – is 

not relevant for those other pollutants. The deferral 

proposed here does not apply to GHG emissions from 

bioenergy or biogenic sources other than biogenic CO2 

emissions, nor does it apply to emissions of non-GHG 

pollutants. 

D. Mechanism for Deferral and State Implementation

1. Adding to definition of Subject to Regulation 

established in Tailoring Rule 

To implement the proposed deferral, we are proposing 

to revise the definition of the term “subject to 

regulation” that EPA adopted in the PSD and Title V GHG 

Tailoring Rule. We are proposing to add language to the 

definition of “subject to regulation” to exclude biogenic 

CO2 emissions from stationary sources for a three-year 

 

21 U.S. Greenhouse Gas Inventory Fast Facts, April 2010. See 

http://www.epa.gov/climatechange/emissions/downloads10/US-GHGInventory-Fast-Facts-2008.pdf
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period starting on the date the promulgated rule is 

published in the Federal Register. 

The EPA’s PSD regulations implement the PSD provisions 

of the CAA, and the language of these statutory provisions 

is broad enough to cover biogenic CO2 emissions. 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 “any air pollutant” in an 

amount equal to or greater than 100 or 250 tpy, depending 

on the source category. The EPA’s long-standing 

regulations interpret the PSD applicability provision that 

refers to “any air pollutant” to refer to any “regulated 

NSR pollutant,” which includes any air pollutant “subject 

to regulation.” In the final Tailoring Rule, EPA defined 

the term “subject to regulation” so that only GHG emissions 

from sources at or above specified thresholds (depending on 

the circumstances, 75,000 and/or 100,000 tpy on a CO2e 

basis) are pollutants subject to regulation. Thus, sources 

that emit amounts exceeding the established thresholds, are 

subject to PSD as long as that amount of GHG also exceeds 

100/250 tpy on a mass basis. Similarly, in the Tailoring 

Rule, EPA defined “subject to regulation” under the Title V 
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program regulations so GHG emissions from sources at or 

above 100,000 tpy on a CO2e basis are subject to regulation. 

We believe this is also the most efficient and effective 

approach for implementing the deferral of biogenic CO2

emissions proposed in this rule. 

Under this approach, some states may not need to 

undertake a regulatory or legislative action to implement 

the final rule if they are able to interpret the term 

“subject to regulation” used in existing state regulations 

in a manner consistent with the revised definition propose 

in this rule. A full description of the “subject to 

regulation” mechanism and the basis for its usage in the 

Tailoring Rule can be found in preamble text for that 

rulemaking.22

2. State decisions to adopt deferral 

Currently, a SIP-approved PSD program that applies to 

GHG-emitting sources applies to biogenic CO2 emissions to 

the same extent as the program applies to all other GHGs. 

The same is true for an approved Title V program that 

applies to GHG-emitting sources. However, we believe that 

many states may not be inclined to apply their PSD or Title 

V programs to biogenic CO2 emission sources for the same 

 

22 75 FR 31579-81 (June 3, 2010) 

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fundamental reasons that we are proposing to defer 

inclusions of these sources under the PSD and Title V 

permitting programs for a three-year period. As has been 

stated previously, one of our primary reasons for 

reconsideration of application of the Tailoring Rule 

requirements to biogenic CO2 emissions sources23 was to 

allow for a detailed examination of the science associated 

with biogenic CO2 emissions and to consider the 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. We believe that most, if 

not all, states are facing similar needs for further 

scientific examination and analysis to properly consider 

biogenic CO2 emissions under a permitting scenario in a way 

that will not disrupt the proper functioning and timeliness 

of permitting activity within the state PSD and Title V 

programs. We believe states will also benefit from the 

deferral period in order to have sufficient time to respond 

to the results of the data collection and examination of 

the science associated with biogenic emissions and to 

properly educate and train staff in the unique permitting 

 

23 Letter from Honorable Lisa Jackson, Administrator, U.S. EPA, to R. 

Martella, Jr., R. Gray, and J. Coleman, Sidley Austin, LLP. January 12, 

2011. http://www.epa.gov/NSR/ghgdocs/McCarthytoMartella.pdf
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issues associated with biogenic sources, including 

fundamental principles such as accurate emission estimation 

methodologies and full consideration of environmental 

impacts associated with these sources. 

Thus, states that cannot interpret their PSD SIP or 

Title V requirements to incorporate the three-year deferral 

are strongly encouraged to submit SIP revisions or Title V 

program revisions to adopt the three-year deferral. Doing 

so would allow these states to avoid applying PSD 

requirements during the period needed for further study. 

However, EPA recognizes 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. For those 

states, the deferral may not be appropriate. Accordingly, 

EPA requests each state to advise EPA by letter, during the 

comment period for this proposal, as to the number and type 

of biomass sources in their state. 

3. Interim Guidance to Address Biogenic CO2 Sources under 

PSD Review 

Concurrent with this proposal to defer application of 

the pre-construction and Title V permitting programs to 

biogenic CO2 emissions, EPA intends to issue interim 
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guidance to help permitting authorities establish a basis 

for concluding that BACT (which is one of the statutory 

conditions for receiving a permit) for GHG emissions at 

such sources is simply combustion of biomass fuels. As 

previously noted, under the Tailoring Rule, as of January 

2, 2011, large stationary sources that become subject to 

PSD for other pollutants will need to address GHG such as 

CO2. Since this proposed rulemaking to defer biogenic CO2

emissions from PSD permitting requirements for a three-year 

period is not planned to be finalized until the July 2011 

timeframe, there will be an interim period when such 

biogenic CO2 emissions will still need to be addressed in 

making PSD permitting determinations since the deferral 

will not yet be in effect.24 For example, if a PSD permit 

is issued before the planned July 2011 finalization of a 

rulemaking that would defer biogenic CO2 emissions from PSD 

applicability, then existing regulations might require that 

the PSD permit meet the BACT requirement for GHG emissions, 

including biogenic CO2 emissions, during the interim period 

of time. 

 

24 As of January 2, 2011, permitting authorities and sources subject to 

Title V will need to address any applicable requirements for GHG, such 

as PSD permit requirements, consistent with the requirements of 40 CFR 

part 70 and approved state programs. However, GHG emissions will not 

be used to establish Title V applicability before July 1, 2011. 
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In its November 2010 GHG permitting guidance, EPA 

explicitly recognized that a permitting authority might 

determine that certain types of biomass by themselves are 

BACT for GHG emissions after considering the environmental, 

energy, and economic benefits of using the fuel. EPA's 

supplemental guidance will provide a basis that permitting 

authorities may use to support the conclusion, during the 

interim period until the biomass deferral rulemaking is 

finalized, that BACT for CO2 emissions at such sources is 

simply the combustion of biomass fuel. 

E. Requesting comment

Given the detail and rationale above, EPA has 

concluded this approach to defer application of PSD and 

Title V permitting requirements to biogenic CO2 emissions is 

appropriate. However, EPA is requesting comment on this 

proposal, including the approach, the rationale and other 

considerations the Agency should take into account. 

IV. Statutory and Executive Order Review

A. Executive Order 12866: Regulatory Planning and Review

Under Executive Order (EO) 12866 (58 FR 51735, October 

4, 1993), this action is a "significant regulatory action” 

because it raises novel legal or policy issues arising out 

of legal mandates, the President’s priorities, or the 

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principles set forth in the EO. Accordingly, EPA submitted 

this action to the Office of Management and Budget (OMB) 

for review under EO 12866. 

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 

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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 proposed 

rule 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 

proposed 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 

Comment [dsg6]: Is “I” correct here?
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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 proposed rule will relieve the 

necessary extensive analysis and corresponding extensive 

workload requirements for most affected facilities, 

including small businesses. 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 

proposed rulemaking would not have a significant impact on 

small governmental jurisdictions. The EPA has therefore 

concluded that this proposed action will not have a 

significant economic impact on a substantial number of 

small entities. 
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We continue to be interested in the potential impacts 

of this proposed action on small entities and welcome 

comments on issues related to such impacts. 

D. Unfunded Mandates Reform Act (UMRA)

This proposed 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. These states will have to 

amend their corresponding SIPs to incorporate the proposed 

amendments from today’s action, as the deferral that we 

propose 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. 
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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 proposed amendments would 

simplify and reduce the burden on 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. 

In the spirit of Executive Order 13132, and consistent 

with EPA policy to promote communications between EPA and 

State and local governments, EPA specifically solicits 

comment on this proposed action from State and local 

officials. 

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 
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officials in the development of regulatory policies that 

have Tribal implications.” 

The EPA has concluded that this proposed 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 major NSR permits; however, this may 

change in the future. 

 The EPA specifically solicits additional comment on 

this proposed action from Tribal officials. 

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 Executive 

Order 492 has the potential to influence the regulation. 

This action is not subject to Executive Order 13045 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
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This proposed rule 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 No. 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. 
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This proposed rulemaking 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 LowIncome 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 proposed 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 

because any impacts that it will have will be global in 

nature and will not affect local communities or populations 
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in a manner that adversely affects the level of protection 

provided to human health or the environment. 

List of Subjects 

40 CFR Part 51

Environmental protection, Administrative practice and 

procedure, Air pollution control, Carbon dioxide, Carbon 

dioxide equivalents, Greenhouse gases, 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, Intergovernmental 

relations, Methane, Nitrous oxide.
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Deferral for CO2 Emissions from Bioenergy and Other Biogenic 

Sources Under the PSD and Title V Programs - Proposed Rule 

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40 CFR Part 70

Environmental protection, Administrative practice and 

procedure, 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: 

 __________ 

Lisa P. Jackson, 

Administrator. 
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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 [DATE 3 YEARS AFTER THE EFFECTIVE 
DATE OF THE FINAL DEFERRAL RULE], the mass of the 

greenhouse gas carbon dioxide shall not include carbon 

dioxide emissions resulting from the combustion or 

decomposition of biologically-based material other than 

fossil fuel. 

* * * * * 

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 [DATE 3 YEARS AFTER THE EFFECTIVE DATE OF THE FINAL 

DEFERRAL RULE], the mass of the greenhouse gas carbon 

dioxide shall not include carbon dioxide emissions 

resulting from the combustion or decomposition of 

biologically-based material other than fossil fuel. 

* * * * * 

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 [DATE 3 YEARS AFTER THE EFFECTIVE DATE OF THE 

FINAL DEFERRAL RULE], the mass of the greenhouse gas carbon 

dioxide shall not include carbon dioxide emissions 

resulting from the combustion or decomposition of 

biologically-based material other than fossil fuel. 

* * * * * 

PART 71 -- [AMENDED] 

 7. The authority citation for part 51 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 [DATE 3 YEARS AFTER THE EFFECTIVE DATE OF THE 

FINAL DEFERRAL RULE], the mass of the greenhouse gas carbon 

dioxide shall not include carbon dioxide emissions 

resulting from the combustion or decomposition of 

biologically-based material other than fossil fuel. 

* * * * * 
Page 67: [1] Deleted dgualtie 3/1/2011 2:49:00 PM 

 in EPA regulations define a de minimis level of impact 

that EPA has concluded does not justify collecting preconstruction monitoring data for purposes of an air quality 

impact analysis. 45 FR 52710. The EPA believes there is little 

to be gained from preconstruction monitoring of concentrations 

when the increased emissions from a proposed source or 

modification has a de minimis impact on ambient concentrations. 

If a source can show through modeling of its emissions alone 

that its impacts are less than the corresponding SMC, there is 

little to be gained by requiring that source to collect 

additional monitoring data for a particular pollutant to 

establish background concentrations for further analysis. 75 FR 

65895-97. 
Summary of Interagency Working Comments during EO12866 Review. Subject to Further 

Policy Review 

United States                                                   Office of Air and Radiation                                         February 2011

Environmental Protection

Agency

_____________________________________________________________________________________________

GUIDANCE FOR DETERMINING BEST AVAILABLE 

CONTROL TECHNOLOGY FOR REDUCING 

CARBON DIOXIDE EMISSIONS FROM BIOENERGY 

PRODUCTION
Summary of Interagency Working Comments during EO12866 Review. Subject to Further 

Policy Review 

Guidance for Determining Best Available Control 

Technology for Reducing Carbon Dioxide Emissions from 

Bioenergy Production 

Prepared by the

Climate Change Division

Office of Atmospheric Programs

U.S. Environmental Protection Agency

Washington, DC

February 2011
Disclaimer 

This document explains the requirements of EPA regulations, describes EPA policies, and 

recommends procedures for permitting authorities to use to ensure that permitting decisions are 

consistent with applicable regulations. This document is not a rule or regulation, and the 

guidance it contains may not apply to a particular situation based upon the individual facts and 

circumstances. This guidance does not change or substitute for any law, regulation, or any other 

legally binding requirement and is not legally enforceable. The use of non-mandatory language 

such as “guidance,” “recommend,” “may,” “should,” and “can,” is intended to describe EPA 

policies and recommendations. Mandatory terminology such as “must” and “required” are 

intended to describe controlling requirements under the terms of the Clean Air Act and EPA 

regulations, but this document does not establish legally binding requirements in and of itself. 

   
Summary of Interagency Working Comments during EO12866 Review. Subject to Further 

Policy Review 

2 

Table of Contents 

I. Introduction 

II. CO2 Emissions from Bioenergy and the Carbon Cycle 

III. EPA’s Previous Actions Relating to Application of PSD Program to Biogenic CO2

Emissions 

IV. Summary of the Top-Down BACT Process 

V. Step 1 of the Top-Down BACT Process 

A. Traditional Application of Step 1 

B. Previous EPA Guidance on GHG Control Strategies 

C. Application of Step 1 to Bioenergy Facilities 

VI. Step 2 – Eliminate Technically Infeasible Options 

VII. Step 3 – Rank Remaining Control Technologies 

VIII. Step 4 – Energy, Environmental, and Economic Impacts 

A. Traditional Step 4 Considerations 

1. Environmental impacts 

2. Economic impacts 

3. Energy impacts 

B. Specific Considerations at Step 4 for Bioenergy Facilities 

1. Environmental impacts 

2. Economic impacts 

3. Energy impacts 

C. Potential Conclusions in Step 4 Analysis 

IX. Step 5 – Selecting BACT 
Summary of interagency working comments during EO12866 review. Subject to further policy 

review. 

3 

I. Introduction 

This guidance provides an illustration of reasoning that a Prevention of Significant 

Deterioration (PSD) permitting authority may use to support the conclusion that the best 

available control technology (BACT) for carbon dioxide (CO2) emissions at a bioenergy facility1

is the combustion of biogenic fuels alone. As of January 2, 2011, greenhouse gases (GHG), 

including CO2, became a pollutant subject to regulation under the Clean Air Act (CAA).2 Under 

existing PSD program regulations and EPA interpretations of those regulations, stationary 

sources of air pollution that require a PSD permit to authorize construction,3

 and that would have 

the potential to emit (or would increase GHG emissions by) 75,000 tons CO2 equivalent (CO2e) 

per year (tpy) or more or are requesting to increase GHG emissions by 75,000 tons CO2e per 

year (tpy) but that did not obtain such a permit prior to January 2, 2011,4 will need to 

demonstrate to the appropriate reviewing authority5

 that the proposed facility will meet GHG 

emission limitations through application of BACT.6 To assist PSD permit applicants and 

reviewing authorities with making this determination, EPA provided guidance on November 10, 

                                                           

1

 A ‘bioenergy facility’ is defined, for the purposes of this guidance, as a facility that generates energy via the 

combustion of biologically-derived material other than fossil fuels, such as wood or agricultural products. This 

could be undertaken either alone or in addition to traditional fossil fuels. 

2

 75 FR 17004 (April 2, 2010); 75 FR 31514 (June 3, 2010). 

3

 On June 3, 2010, EPA issued a final rule that “tailors” the applicability provisions of the PSD and title V programs 

to enable EPA and states to phase in permitting requirements for GHGs in a common sense manner (“Tailoring 

Rule”). The first Tailoring Rule step begins on January 2, 2011, and ends on June 30, 2011, and this step covers 

what EPA has called “anyway sources” and “anyway modifications” that would be subject to PSD “anyway” based 

on emissions of pollutants other than GHGs. The second step begins on July 1, 2011, and continues thereafter to 

cover both anyway sources and certain other large emitters of GHGs. 

4

 75 FR 17021 (April 2, 2010); 75 FR 31526 (June 3, 2010) 

5

 This may be EPA or a state or local government authority depending on the status of implementation. See 

75 FR 77698 (December 13, 2010); 75 FR 81874 (December 29, 2010); 75 FR 82246 - 82536 (December 30, 2010); 

76 FR 752 (January 6, 2011); 76 FR 2070 (January 12, 2011); 76 FR 2581 (January 14, 2011); 

76 FR 2591 (January 14, 2011). 

6

 40 CFR 52.21(b)(49)-(50); 40 CFR 51.166(b)(48)-(49); 40 CFR 52.21(b)(12); 40 CFR 51.166(b)(12); 40 CFR 

52.21(j)(2)-(3); 40 CFR 51.166(j)(2)-(3); 75 FR 17004 (April 2, 2010); 75 FR 31514 (June 3, 2010). 

Comment [dsg1]: Can this sentence be broken

up?  Very hard to follow
Summary of interagency working comments during EO12866 review. Subject to further policy 

review. 

4 

2010. The November 10, 2010 guidance includes technical white papers7 for several industry 

sectors and general guidance entitled PSD and Title V Permitting Guidance for Greenhouse 

Gases (“2010 GHG Permitting Guidance”),

8

 which includes a section on determining BACT for 

GHG. 

As with any other stationary source, a bioenergy facility that qualifies as a major 

stationary source required to obtain a PSD permit must address the BACT requirement for GHGs 

if it emits or increases its emission of this regulated pollutant in amounts greater than 75,000 tons 

on a CO2e basis.9

 This guidance on determining BACT for CO2 emissions from a bioenergy 

facility is intended to supplement the 2010 GHG Permitting Guidance, and not to supersede it. 

This guidance applies to sources that generate energy from biologically–based material, and it 

does not apply to other sources that may emit biogenic CO2 but do not generate energy from the 

biological material. For the sources not covered by this guidance document, one should consult 

the 2010 GHG Permitting Guidance and prior guidance EPA has provided on the top-down 

BACT process. 

Concurrent with the release of this guidance, EPA is issuing a proposed rule to defer 

application of PSD permitting requirements to CO2 emissions from biologically-based material 

(biogenic CO2 emissions) for a three-year period. The scope of the proposed deferral is wider 

than the scope of this guidance: the deferral is intended to cover all sources of biogenic CO2

emissions, including those that emit CO2 from biologically-based material but do not generate 

energy from it. 

EPA expects to take final action on the proposed deferral rule in the July 2011 timeframe. 

In the event that EPA finalizes the deferral for the PSD program as proposed, states may require 

                                                           

7

 http://www.epa.gov/nsr/ghgpermitting.html 

8

 http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf 9

 75 Fed. Reg. at 31606-07; 40 CFR 52.21(b)(49); 40 CFR 52.166(b)(48). 
Summary of interagency working comments during EO12866 review. Subject to further policy 

review. 

5 

additional time to review their state laws to incorporate the deferral established by that rule. To 

the extent no such deferral is available under the PSD permitting regulations applicable at the 

time a permitting authority issues a PSD permit for a bioenergy facility, the reasoning described 

below may be used on an interim basis to support a conclusion in such a permit that BACT for 

CO2 is combustion of biomass fuels alone. 

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-bycase 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. However, 

EPA believes the analysis described below will be sufficient in most cases to support the 

conclusion that utilization of biomass fuel alone is BACT for a bioenergy facility. 

It is also important to note that this guidance is meant to be interim guidance only and 

that once EPA completes the detailed examination of the science and technical issues associated 

with accounting for biogenic CO2 emissions from stationary sources, as discussed in the 

proposed deferral, those analyses may outweigh many of the considerations mentioned in this 

guidance. 

II. CO2 Emissions from Bioenergy and the Carbon Cycle 

Carbon dioxide emissions from bioenergy facilities are generated during the combustion 

of biologically-based material (i.e., forest or agricultural products) for energy. The term ‘CO2

emissions from bioenergy’ is used in this guidance to describe biogenic CO2 emissions from a 

Comment [dsg2]: Do you mean “e.g.” here.  

More generally, document often uses e.g. when it

seems to mean i.e., and vice versa.
Summary of interagency working comments during EO12866 review. Subject to further policy 

review. 

6 

stationary source that directly result from the combustion of biologically-based materials other 

than fossil fuels when these materials are used to generate energy. Although every molecule of 

CO2 has the same radiative forcing in the atmosphere regardless of its source, CO2 emissions 

from bioenergy merit unique consideration in the BACT analysis because land-based biomass 

carbon stocks can be replenished more quickly than fossil fuel carbon stocks, and thus these 

biogenic carbon stocks can act as a sink on a shorter time scale than fossil carbon. For example, 

many coal deposits in North America originated hundreds of millions of years ago. In contrast, 

the reservoirs of carbon found on the surface of Earth, in pools such as tree biomass and cropland 

soils, have accumulated over decades, not millennia. 

Through relatively rapid photosynthesis, plants absorb CO2 from the atmosphere and add 

it to their biomass, which contains roughly 50% carbon by weight, through a process called 

sequestration. When biological material such as plant biomass is harvested or cleared from the 

land and burned for energy, the material acts as a source of carbon, releasing its stored carbon 

back to the atmosphere as CO2. Over large spatial scales such as states, regions, or continents, if 

more carbon is sequestered in plant biomass than is emitted to the atmosphere through processes 

such as harvest, fire, or natural decomposition, plant biomass acts as a net sink for carbon. 

Conversely, if more carbon is released than is sequestered, plant biomass acts as a net source for 

carbon. 

EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks (the Inventory)10 tracks 

annual GHG emissions including emissions of CO2, methane (CH4), nitrous oxide (N2O), 

hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). This 

report estimates all anthropogenic sources and sinks of GHG emissions at the national scale, 

                                                           

10 US EPA. 2010. Inventory of U.S Greenhouse Gas Emissions and Sinks: 1990-2008. U.S. EPA #430-R-10-06. 
Summary of interagency working comments during EO12866 review. Subject to further policy 

review. 

7 

classified into six broad sectors: Energy, Industrial Processes, Solvents and Other Product Uses, 

Agriculture, Land-Use Change and Forestry (LUCF), and Waste. The Energy Sector includes 

all GHGs emitted during the production, transformation, handling and consumption of energy 

commodities, including fuel combustion. The LUCF Sector includes emissions and 

sequestration resulting from human activities that influence the way land is used or that affect the 

size of carbon stocks on land. Thus, at the national level, CO2 emissions from biomass 

combustion are not included in the estimate of emissions from a country’s Energy Sector, even 

though the emissions physically occur at the time and place in which useful energy is being 

generated (i.e., power plant or automobile). 

Averaged over the years 1990-2008, data from the Inventory show that the LUCF sector 

in the United States has been a net sink of 841 Teragrams carbon dioxide equivalent (CO2e) per 

year.11 This sink is roughly 12% of the average gross emissions from all other sources combined 

in the United States over the same time period. Future national projections under business as 

usual (BAU), as reported in the Fifth U.S Climate Action Report (CAR) submitted to the 

UNFCCC in 2010, suggest that this LUCF sink is likely to continue, if not increase in size, at 

least until 2020.12

Biogenic CO2 emissions are distinct from other regulated pollutants at bioenergy 

facilities because, unlike other pollutants and other GHGs, CO2 emissions can participate directly 

in the global carbon cycle through photosynthesis, which is critical for the maintenance of life on 

Earth. Further, emissions of CO2 can dwarf emissions of other GHGs from biomass combustion. 

For example, CO2 makes up 97.9% of the global warming potential (GWP) of the GHG 

                                                           

11 See Tables 1 and 2 in Appendix. 

12 U.S. Climate Action Report 2010. Fifth National Communication of the United States of America under the 

United National Framework Convention on Climate Change. Chapter 5 Projected Greenhouse Gas Emissions, page 

81. www.state.gov/documents/organization/140636.pdf 

Comment [dsg3]: Should this be e.g.?
Summary of interagency working comments during EO12866 review. Subject to further policy 

review. 

8 

emissions from wood and wood residuals.13 Finally, because sequestration of CO2 emissions in 

living plant material outside the boundaries of the facility may counteract the emissions from 

such facilities on a continuous basis, this unique dynamic merits consideration in the BACT 

analysis. This argument is underlined by the fact that GHGs such as CO2 are well-mixed in the 

atmosphere at large spatial scales; therefore, the need to reduce them directly at the facility is of 

lesser importance so long as their net atmospheric impact is accounted for and is negative or 

zero. 

III. EPA’s Previous Actions Relating to Application of the PSD Program to Biogenic 

CO2 Emissions 

On the basis of the Inventory results described above and other considerations, 

stakeholders have requested that EPA exclude, either partially or wholly, biogenic CO2 emissions 

for the purposes of the BACT analysis and the PSD program based on the view that the 

biological material used to generate energy can also serve as a sink for carbon. In its notice 

proposing the PSD and Title V Greenhouse Gas Tailoring Rule, EPA referenced the Inventory 

for the applicable global warming potential (GWP) values and guidance on how to calculate a 

source’s GHG emissions in tons per year (tpy) CO2e. While EPA referred to the Inventory for 

GWP identification purposes only, several commenters appeared to misunderstand our intent. 

The narrow reference to the use of GWP values for estimating GHG emissions was provided to 

offer consistent guidance on how to calculate these emissions and was not intended as an 

indication, direct or implied, that biogenic emissions would be excluded from permitting 

applicability merely by association with the national Inventory.14 As noted above, the Inventory 

                                                           

13 See CO2, CH4 and N2O GWPs in Table A-1 of 40 CFR Part 98 Subpart A; and emission factors for CO2, CH4 and 

N2O from combustion of wood and wood residuals in Tables C-1 and C-2 of 40 CFR Part 98 Subpart C. 14 See 74 FR 55351, under the definition for ‘carbon dioxide equivalent’ 
Summary of interagency working comments during EO12866 review. Subject to further policy 

review. 

9 

does not exclude these emissions, but simply includes them in the LUCF Sector rather than the 

Energy Sector to avoid double-counting at the national scale. 

In response, when finalizing the Tailoring Rule, EPA acknowledged the role that 

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.15 Nevertheless, we 

determined that we lacked a sufficient record at that time to apply the legal rationales utilized in 

the Tailoring Rule to exclude emissions of CO2 from biogenic sources in determining permitting 

applicability provisions. At that time, we had not requested and did not obtain public comments 

addressing the particular administrative burden of permitting projects that specifically involve 

biogenic CO2 emissions from energy production. Although EPA did not promulgate an 

applicability exclusion for biogenic emissions in the final Tailoring Rule, EPA did observe that 

flexibility exists to apply the existing regulations and policies regarding BACT in ways that take 

into account their net effects on atmospheric GHG concentrations. 

In order to explore the issue further following the promulgation of the Tailoring Rule, in 

July 2010 EPA solicited views from the public through a Call for Information (CFI) on 

approaches to accounting for biogenic 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. Also, we solicited information on the 

means to estimate and measure CO2 emissions from a variety of biogenic fuels. 

EPA issued PSD and Title V Permitting Guidance for Greenhouse Gases on November 

10, 2010, which provides the basic information that permit writers and applicants need to address 

                                                           

15 See 75 FR 31514. 
Summary of interagency working comments during EO12866 review. Subject to further policy 

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10 

GHG emissions in permits.16 To assist permitting authorities carrying out BACT analyses for 

GHGs until EPA took further action, the guidance indicated that permitting authorities may 

consider the environmental, energy and economic benefits that may accrue from the use of 

certain types of biogenic fuels (e.g., biogas from landfills) for energy generation, consistent with 

existing air quality standards. Noting that a variety of federal and state policies have recognized 

that some biogenic fuels can be part of a national strategy to reduce dependence on fossil fuels 

and to reduce emissions of GHGs, EPA 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 biogenic fuels. EPA observed 

that, based on these considerations, permitting authorities might determine in the GHG 

component of the BACT analysis for new or modified bioenergy facilities, as defined in Section 

I, that such utilization of biogenic fuels is inherently BACT for GHGs. To assist permitting 

authorities further in considering these factors, EPA announced its intent to issue guidance that 

will provide a suggested framework for undertaking an analysis of the environmental, energy and 

economic impacts of using biogenic fuels in Step 4 of the top-down BACT process. 

IV. Summary of the Top-Down BACT Process 

On November 10, 2010, EPA issued the PSD and Title V Permitting Guidance for 

Greenhouse Gases (“2010 GHG Permitting Guidance”) which supplements supplements prior 

EPA guidance on determining BACT, including EPA’s 1990 Draft New Source Review 

Workshop Manual (“1990 Workshop Manual”).17 In the 2010 GHG Permitting Guidance, EPA 

                                                           

16 PSD and Title V Permitting Guidance for Greenhouse Gases. Prepared by EPA staff. November 2010. Available 

at: http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf 17 “PSD and Title V Permitting Guidance for Greenhouse Gases.” Prepared by EPA staff. November 2010. 

Available at: http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf; 

“New Source Review Workshop Manual; Draft.” October 1990. 

Comment [dsg4]: This should be moved to p. 9

where the term is first defined.  Also, the document

does not consistently use this short reference for

the document, as noted in some specific edits below
Summary of interagency working comments during EO12866 review. Subject to further policy 

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11 

recommends that permitting authorities continue to use the Agency’s five-step “top-down” 

BACT process to determine BACT for GHGs. In brief, the top-down process calls for all 

available control technologies for a given pollutant to be identified and ranked in descending 

order of control effectiveness. A permit applicant should first examine the highest-ranked 

(“top”) option. The top-ranked option(s) should be established as BACT unless the permit 

applicant demonstrates to the satisfaction of the permitting authority that technical 

considerations, or energy, environmental, or economic impacts justify a conclusion that the topranked technology is not “achievable” in that case. If the most effective control strategy is 

eliminated in this fashion, then the next most effective alternative should be evaluated, and so on, 

until an option is selected as BACT.18 EPA recommends conducting this analysis for each 

regulated NSR pollutant that is subject to the BACT requirement in a given case. 

EPA has broken down this analytical process into the following five steps, some of which 

are discussed in detail later in this section. 

Step 1: Identify all available control technologies. 

Step 2: Eliminate technically infeasible options. 

Step 3: Rank remaining control technologies. 

Step 4: Evaluate most effective controls and document results. 

Step 5: Select BACT. 

For additional detail on this process, consult the 2010 GHG Permitting Guidance and references 

contained therein. As this guidance focuses on unique considerations for bioenergy facilities, the 

discussion that follows elaborates only on those steps where EPA believes such considerations 

are most likely to arise. 

                                                                                                                                                                                               

Available at: http://www.epa.gov/ttn/nsr/gen/wkshpman.pdf. 18 2010 GHG Permitting Guidance at 18. 
Summary of interagency working comments during EO12866 review. Subject to further policy 

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12 

V. Step 1 of the Top-Down BACT Process 

A. Traditional Application of Step 1 

The first step in the top-down BACT process is to identify all available control options. 

Available control options are those air pollution control technologies or techniques (including 

lower-emitting processes and practices) that have the potential for practical application to the 

emissions unit and the regulated pollutant under evaluation. They typically include the 

application of alternative production processes, methods, systems, and techniques, including 

clean fuels or treatment or innovative fuel combustion for control of the affected pollutant.19 

However, while Step 1 is intended to capture a broad array of potential options for 

pollution control, this step of the process is not without limits. EPA has recognized that a Step 1 

list of options need not necessarily include inherently lower polluting processes that would 

fundamentally redefine the nature of the source proposed by the permit applicant.20 BACT 

should generally not be applied to regulate the applicant’s purpose or objective for the proposed 

facility. In assessing whether an option would fundamentally redefine a proposed source, EPA 

recommends that permitting authorities apply the analytical framework recently articulated by 

the Environmental Appeals Board.21 Under this framework, a permitting authority should look 

first at the administrative record to see how the applicant defined its goal, objectives, purpose or 

basic design for the proposed facility in its application. The underlying record will be an 

essential component of a supportable BACT determination that a proposed control technology 

                                                           

19 See pages 25-34 of “PSD and Title V Permitting Guidance for Greenhouse Gases.” (November 2010) for more 

general background on Step 1 of the top-down process. 

20 In re Prairie State Generating Company, 13 E.A.D. 1, 23 (EAB 2006). 21 See, generally, In the Matter of American Electric Power Service Corporation, Southwest Electric Power 

Company, John W. Turk Plant, Petition No. VI-2008-01 (Order on Petition) (December 15, 2009) (title V order 

referencing and applying framework developed by the EAB) ; In the Matter of Cash Creek Generation, LLC, 

Petition Nos. IV-2008-1 & IV-2008-2 (Order on Petition) (December 15, 2009) (same). 
Summary of interagency working comments during EO12866 review. Subject to further policy 

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13 

redefines the source.22 The “redefining the source” issue is ultimately a question of degree that is 

within the discretion of the permitting authority. The permitting authority should keep in mind 

that BACT, in most cases, should not be applied to regulate the applicant’s purpose or objective 

for the proposed facility.23 Ultimately, any decision to exclude an option on “redefining the 

source” grounds must be explained and documented in the permit record, especially where such 

an option has been identified as significant in public comments.24 The 2010 GHG Permitting 

Guidance provides more information that permit writers and applicants may consult on this topic. 

The CAA includes “clean fuels” in the definition of BACT.25 While clean fuels that 

would reduce GHG emissions should be considered, EPA has recognized that the initial list of 

control options for a BACT analysis does not need to include “clean fuel” options that would 

fundamentally redefine the source. Such options include those that would require a permit 

applicant to switch to a primary fuel type (i.e., coal, natural gas, or biomass) other than the type 

of fuel that an applicant proposes to use for its primary combustion process. 

 B. Previous EPA Guidance on GHG Control Strategies 

                                                           

22 In re Desert Rock Energy Company, PSD Appeal No. 08-03 et al. (EAB Sept. 24, 2009), slip op. at 65, 76. 23 The EPA Environmental Appeals Board has applied this framework for evaluating redefining the source questions 

in three cases involving coal-fired power plants. In re Desert Rock Energy Company, PSD Appeal No. 08-03 et al. 

(EAB Sept. 24, 2009); In re Northern Michigan University, PSD Appeal No. 08-02 (EAB Feb. 18, 2009); In re 

Prairie State Generating Company, 13 E.A.D. 1 (EAB 2006). For additional examples of how EPA approached the 

redefining the source issue in the context of power plants prior to developing this analytical framework, see the 

following decisions. In re Old Dominion Electric Cooperative, 3 E.A.D. 779 (Adm’r 1992); In re Hawaiian 

Commercial & Sugar Co., 4 E.A.D. 95 (EAB 1992); In re SEI Birchwood Inc., 5 E.A.D. 25 (EAB 1994). EPA also 

considered this issue in the context of waste incinerators prior to developing the recommended analytical 

framework. In re Pennsauken, 2 E.A.D. 667 (Adm’r 1988); In the Matter of Spokane Regional Waste-to-Energy 

Facility, 2 E.A.D. 809 (Adm’r 1989); In the Matter of Brooklyn Navy Yard Resource Recovery Facility, 3 E.A.D. 

867 (EAB 1992); In re Hillman Power Co., LLC, 10 E.A.D. 673, 684 (EAB 2002). In another case, EPA considered 

this question in the context of a conversion of a natural-gas fired taconite ore facility to a petcoke fuel. In re 

Hibbing Taconite Co., 2 E.A.D. 838 (Adm’r 1989). For an example of the application of this concept to a fiberglass 

manufacturing facility, see In re Knauf Fiber Glass, 8 E.A.D 121 (EAB 1998). 24 In re Desert Rock Energy Company, slip op. at 70-71, 76-77; In the Matter of Cash Creek Generation, Order at 7- 

10. 

25 42 USC 7579(3). EPA has not yet updated the definition of BACT in the PSD regulations to reflect the addition 

of the “clean fuels” language that occurred in the 1990 amendments to the Clean Air Act. 40 CFR 52.21(b)(12); 40 

CFR 51.166(b)(12). Nevertheless, EPA reads and applies its regulations consistent with the terms of the Clean Air 

Act. 

Comment [dsg5]: This repeats a sentence

earlier in this paragraph.  Consider deleting.

Comment [dsg6]: Should this be e.g.?
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As EPA discussed in the 2010 GHG Permitting Guidance, for the purposes of a BACT 

analysis for GHGs, EPA classifies carbon capture and sequestration as an add-on pollution 

control technology26 that is “available”27 for large CO2-emitting facilities including fossil fuelfired power plants and industrial facilities with high-purity CO2 streams (e.g., hydrogen 

production, ammonia production, natural gas processing, ethanol production, ethylene oxide 

production, cement production, and iron and steel manufacturing). For these types of facilities, 

CCS should be listed in Step 1 of a top-down BACT analysis for GHGs. This does not 

necessarily mean CCS should be selected as BACT for such sources, since other considerations 

such as technical feasibility or economic impacts may justify elimination of such options at later 

steps of the process. 

 In addition, EPA has observed that the application of methods, systems, or techniques to 

increase energy efficiency is a key GHG-reducing opportunity that falls under the category of 

“lower-polluting processes/practices.” Use of inherently lower-emitting technologies, including 

energy efficiency measures, represents an opportunity for GHG reductions in these BACT 

                                                           

26 EPA recognizes that CCS systems may have some unique aspects that differentiate them from the types of 

equipment that have traditionally been classified as add-on pollution controls (i.e., scrubbers, fabric filters, 

electrostatic precipitators). However, since CCS systems have more similarities to such devices than inherently 

lower-polluting processes, EPA believes that CCS systems are best classified as add-on controls for purposes of a 

top-down BACT analysis. 

27 As noted above, a control option is “available” if it has a potential for practical application to the emissions unit 

and the regulated pollutant under evaluation. Thus, even technologies that are in the initial stages of full 

development and deployment for an industry, such as CCS, can be considered “available” as that term is used for the 

specific purposes of a BACT analysis under the PSD program. In 2010, the Interagency Task Force on Carbon 

Capture and Storage was established to develop a comprehensive and coordinated federal strategy to speed the 

commercial development and deployment of this clean coal technology. As part of its work, the Task Force 

prepared a report that summarizes the state of CCS and identified technical and non-technical challenges to 

implementation. EPA, which participated in the Interagency Task Force, supports the Task Force’s 

recommendations concerning ongoing investment in demonstrations of the CCS technologies based on the report’s 

conclusion that: “Current technologies could be used to capture CO2 from new and existing fossil energy power 

plants; however, they are not ready for widespread implementation primarily because they have not been 

demonstrated at the scale necessary to establish confidence for power plant application. Since the CO2 capture 

capacities used in current industrial processes are generally much smaller than the capacity required for the purposes 

of GHG emissions mitigation at a typical power plant, there is considerable uncertainty associated with capacities at 

volumes necessary for commercial deployment.” See Report of the Interagency Task Force on Carbon Capture and 

Storage, p.50 (http://www.epa.gov/climatechange/policy/ccs_task_force.html). 

Deleted: November 

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Deleted: the 
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reviews. EPA has encouraged permitting authorities to use the discretion available under the 

PSD program to include the most energy efficient options in BACT analyses for both GHG and 

non-GHG regulated New Source Review (NSR) pollutants. Since the use of add-on controls to 

reduce GHG emissions is not as well-advanced as it is for most combustion-derived pollutants, 

initially, in many instances energy efficient measures may serve as the foundation for a BACT 

analysis for GHGs with add-on pollution control technology and other strategies added as they 

become more accessible. 

C. Application of Step 1 to Bioenergy Facilities 

At the outset, when considering an application to construct or modify a bioenergy 

facility, it will be important to address the extent to which the BACT analysis for GHGs should 

include comparative evaluation of biogenic fuels and other types of fuels, including fossil fuels. 

However, where a proposed bioenergy facility can demonstrate that utilizing a particular type of 

biogenic fuel is fundamental to the primary purpose of the project, then at the first step of the 

top-down process, permitting authorities can rely on that to determine that use of another fuel 

would redefine the proposed source. 

To the extent this showing is made by a permit applicant proposing to construct or 

modify an electric generating facility that would utilize biomass fuels alone in the primary 

production process, the options listed as Step 1 of a top-down BACT analysis for GHGs may be 

limited to (1) utilization of biomass fuel alone, (2) energy efficiency improvements, and (3) 

carbon capture and sequestration if the source meets the characteristics summarized above and 

described in more detail in the 2010 GHG Permitting Guidance. 

In cases where a permit applicant proposes to co-fire biomass fuels with another primary 

fuel type, the list of options should include the option of utilizing both types of primary fuels in 

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combination. If the applicant proposes a specific proportional allocation or fuel mix (i.e., <5 

percent biomass, >95 percent fossil fuel) and believes other allocations should be eliminated 

from consideration in the BACT analysis for GHGs, the permit application should provide an 

explanation as to why the particular allocation desired by the applicant is necessary to achieve a 

fundamental business objective of the project. If the permit applicant is unable to demonstrate 

that a different allocation of primary fuels would fundamentally redefine the proposed source, 

the options at Step 1 should include varying allocations of the two primary fuels if the 

proportional allocation of fuels has the potential to affect the amount of GHGs emitted from the 

facility or the net atmospheric GHG concentrations. 

Although not necessarily a bioenergy energy facility, recovery furnaces at kraft pulp and 

paper mills may not have the option of considering alternative fuels. The fundamental purpose 

of recovery furnaces used at this type of facility is to recover and regenerate the cooking 

chemicals (used in the pulping process) from the spent liquor or “black liquor” exiting the 

digesters and evaporators. As a secondary benefit, this process also produces energy. Requiring 

such a recovery furnace that is fully integrated into the production process to utilize a fuel other 

than the black liquor to generate this energy would frustrate the primary purpose of these 

furnaces to recover and regenerate the cooking chemicals. Thus, EPA believes the option of 

using alternative fuels in a recovery furnace would fundamentally redefine this type of unit. 

Facilities proposing to use black liquor in the recovery furnace of the kraft pulping process need 

not include fuels other than black liquor at Step 1 of a top-down BACT analysis for such a unit. 

 

Comment [dsg7]: Delete as redundant?
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VI. Step 2 – Eliminate technically infeasible options 

 Step 2 of the top-down BACT analysis should be conducted in the same manner for 

bioenergy facilities as other types of sources. Details on Step 2 are available in the 2010 GHG 

Permitting Guidance. With respect to facilities that are co-firing biomass and other fuels, if the 

record shows that an option that involves using a greater proportion of biomass fuels than 

proposed by the permit applicant is not technically feasible, it may be eliminated from further 

consideration at this step with an appropriate justification. 

VII. Step 3 – Rank remaining control technologies 

As with Step 2, EPA recommends applying the same consideration in Step 3 of the 

BACT analysis for a bioenergy facility that would apply to other types of sources. Details on 

Step 3 are available in the 2010 GHG Permitting Guidance. 

VIII. Step 4 – Energy, Environmental, and Economic Impacts 

A. Traditional Step 4 Considerations 

Under Step 4 of the top-down BACT analysis, permitting authorities must consider the 

economic, energy, and environmental impacts arising from each option remaining under 

consideration. Accordingly, after all available and technically feasible control options have been 

ranked in terms of control effectiveness (BACT Step 3), the permitting authority should consider 

any specific energy, environmental, and economic impacts identified with those technologies to 

either confirm that the top control alternative is appropriate or determine it to be inappropriate. 

The “top” control option should be established as BACT unless the applicant demonstrates, and 

the permitting authority agrees, that the energy, environmental, or economic impacts justify a 

conclusion that the most stringent technology is not “achievable” in that case. If the most 
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stringent technology is eliminated in this fashion, then the next most stringent alternative is 

considered, and so on. 

1. Environmental impacts 

EPA and other permitting authorities have most often used this analysis to eliminate more 

stringent control technologies with significant or unusual effects that are unacceptable in favor of 

the less stringent technologies with more acceptable collateral environmental effects. However, 

EPA has also interpreted the BACT requirements to allow for a more stringent technology to 

remain in consideration as BACT if the collateral environmental benefits of choosing such a 

technology outweigh the economic or energy costs of that selection.28 In other words, the 

permitting authority is not limited to evaluating the impacts of only the “top” or most effective 

technology but can assess the impacts of all technologies under consideration.29 The same 

principle applies when assessing technologies for controlling GHGs. 

In BACT Step 4, the applicant and permitting authority should consider both direct and 

indirect impacts of the emissions control option or strategy being evaluated. EPA has previously 

referred to BACT Step 4 as the “collateral impacts analysis,”30 but this term is primarily 

applicable only to the environmental impact analysis. Overall, the Step 4 analysis is more 

accurately described as an environmental, economic, and energy impacts analysis that includes 

both direct and indirect (i.e., collateral) considerations. 

Since a BACT limitation must reflect the maximum degree of reduction achievable for 

each regulated pollutant, EPA has emphasized that the environmental impacts analysis in Step 4 

should concentrate on impacts other than direct impacts due to emissions of the regulated 

                                                           

28 In the Matter of North County Resource Recovery Assoc., 2 E.A.D. at 230-31. 29 In re Knauf Fiber Glass, 8 E.A.D. at 131 n. 15. 30 In re Hillman Power, 10 E.A.D. at 683; In the Matter of Columbia Gulf Transmission Co., 2 E.A.D. 824, 828 n. 5 

(Adm’r 1989); In re Kawaihae Cogeneration Project, 7 E.A.D. 107, 116-17 (EAB 1997). 
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pollutant that is the subject of the BACT analysis. EPA has recognized that consideration of a 

wide variety of environmental impacts is appropriate, such as solid or hazardous waste 

generation, discharges of polluted water from a control device, visibility impacts, demand on 

local water resources, and emissions of other pollutants subject to NSR or pollutants not 

regulated under NSR such as air toxics.31 In discussing the particulars of a BACT analysis for 

GHGs, EPA reiterated in the 2010 GHG Permitting Guidance that the environmental impact 

analysis should continue to concentrate on impacts other than the direct impacts due to emissions 

of the regulated pollutant that is the subject of the BACT analysis. 

2. Economic impacts 

EPA has previously advised that the economic impacts component of the analysis should 

focus on direct economic impacts calculated in terms of cost effectiveness (dollars per ton of 

pollutant emission reduced). This cost effectiveness should be addressed on both an average 

basis for each measure and combination of measures, and on an incremental basis comparing the 

costs and emissions performance level of a control option to the cost and performance of the next 

most stringent control option.32 The emphasis should be on the cost of control relative to the 

amount of pollutant removed, rather than economic parameters that provide an indication of the 

general affordability of the control alternative relative to the source. To justify elimination of an 

option on economic grounds, the permit applicant should demonstrate that the costs of pollutant 

removal for that option are disproportionately high.33

3. Energy impacts 

                                                           

31 1990 Workshop Manual at B.46; In the Matter of North County Resource Recovery Assoc., 2 E.A.D. 229, 230 

(Adm’r 1986).; In the Matter of Columbia Gulf Transmission Co., 2 E.A.D. at 828. 32 1990 Workshop Manual, Section IV.D.2.b (B.36 – B.44). 

33 1990 Workshop Manual at B.31-32. 
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EPA has traditionally called for the energy impacts analysis to consider only direct 

energy consumption and not indirect energy impacts, such as the energy required to produce raw 

materials for construction of control equipment.34 Direct energy consumption impacts include 

the consumption of fuel and the consumption of electrical or thermal energy. This energy 

impacts analysis should include an assessment of demand for both electricity that is generated 

onsite and power obtained from the electrical grid, and may include an evaluation of impacts on 

fuel scarcity or a locally desired fuel mix in a particular area. Applicants and permitting 

authorities should examine whether the energy requirements for each control option result in any 

significant or unusual energy penalties or benefits.35 The costs associated with direct energy 

impacts should be calculated and included in the economic impacts analysis (i.e., cost 

analysis).36

B. Specific Considerations at Step 4 for Bioenergy Facilities 

While the more traditional approach that EPA has applied in the Step 4 analysis is to 

eliminate options from the top-down BACT analysis based on unacceptable adverse energy, 

environmental, or economic impacts, this is not the only way to conduct a Step 4 analysis. EPA 

has recognized a permitting authority is not limited to evaluating the impacts of only the “top” or 

most effective technology (based on the ranking options based on control of released from the 

facility) but can assess the impacts of all technologies under consideration.37 This approach may 

include an evaluation of the energy, environmental, and environmental benefits of all options 

under consideration without explicitly eliminating options based on adverse impacts. 

                                                           

34 In re Power Holdings, PSD Appeal No. 09-04 (EAB Aug. 13, 2010), slip op. at 22, n.17 (citing 1990 Workshop 

Manual at B.30). 

35 1990 Workshop Manual at B.29. 

36 1990 Workshop Manual at B.30. 

37 In re Knauf Fiber Glass, 8 E.A.D. at 131 n. 15. 
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1. Environmental impacts 

Although EPA has not recommended focusing on the environmental impacts of the 

pollutant that is the subject of the BACT analysis, with respect to CO2 emissions from bioenergy 

facilities, EPA believes a different frame of reference should be considered because of the nature 

of the carbon cycle and the fact that the production of biomass entails carbon sequestration. 

Within the context of the PSD program, a potential justification that biogenic CO2 emissions can 

be accounted for differently than non-biogenic CO2 emissions at the facility relies on the 

argument that sequestration occurs. This sequestration occurs offsite, outside the boundaries of 

the facility. Therefore, given its traditional focus on “collateral” environmental impacts and 

benefits, Step 4 of the BACT analysis seems well-suited to enable permitting authorities to 

consider the potential sequestration of carbon in biogenic resources outside the boundaries of the 

facility when evaluating BACT for greenhouse gases. This approach was reinforced by CFI 

comments, which emphasized the importance of reconciling the focus of the PSD and Title V 

program regulations on the amount of emissions released from each individual facility with the 

role that land-based sequestration may play in mitigating the net atmospheric GHG impact of 

emissions from individual sources. Because other pollutants and non-CO2 GHGs do not 

participate in natural biogeochemical cycles to the same extent that CO2 does, this frame of 

reference – in which the potential for sequestration outside the facility of pollutant subject to the 

BACT analysis is considered as part of the environmental impacts at Step 4 – is not relevant for 

those other pollutants. 

In addition to this new frame of reference in which sequestration outside the boundaries 

of the facility is considered, it may also be appropriate to consider broad categories of feedstocks 

in terms of their net impact on atmospheric GHG stocks. A complete accounting of the net 
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22 

atmospheric GHG impact of a facility utilizing particular feedstocks would rely on a case-bycase, facility-specific assessment of the impact of the proposed facility. This type of facilityspecific approach would also likely be the most scientifically sound approach for assessing the 

direct carbon cycle impact of specific biogenic fuels used at the facility, because there is inherent 

variability in biological processes, as well as the variability in space and time common to 

estimates of sequestration. 

The BACT analysis should consider a variety of factors that may influence the net 

amount of carbon added to the atmosphere from and utilization of bioenergy at a facility. An 

important area of consensus from commenters on the CFI was the idea that feedstocks are 

different, and that the net impact of bioenergy and other biogenic emissions is associated with 

the feedstock that is used.   The level of sequestration that occurs naturally on the landscape 

without additional intervention can be considered the “business as usual” (BAU) case. In other 

words, this level of sequestration (or emissions) will likely continue into the future without 

additional action. For example, if favorable conditions for plant growth cause sequestration to 

increase beyond what is incorporated into the BAU case for that region, then net atmospheric 

carbon stocks will decrease beyond the BAU case. Similarly, if certain activities, such as 

logging, are accelerated in a particular region over a certain period of time, and associated 

emissions are thereby increased, then the net atmospheric carbon stocks will increase over the 

BAU case. In the context of bioenergy and biogenic emissions, where such a wide variety of 

potential feedstocks exists, the BAU case might be considered the emissions that “would have 

happened anyway.” Using this approach, a permitting authority would have to assess the extent 

to which a policy action or an activity increases or reduces CO2 emissions above or below what 

would have occurred in comparison to the BAU case. From the perspective of bioenergy and 
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23 

other biogenic emissions, emissions that would have occurred regardless of whether or not the 

facility captured the energy from the biofuel use or carried out the process using biological 

material as a feedstock might demonstrate that the cost of additional pollutant controls is not 

justified. 

Land use change has a separate set of considerations under the BAU case. Specifically, if 

the rate of transition of land use from forest to agricultural use were to increase over and above 

that which occurred in the BAU case, and if this increase were attributable to market demand for 

the bioenergy crop, then it would be possible that these emissions would be additional to the 

emissions expected under BAU. In that situation, the BAU case is the non-bioenergy case, such 

that the bioenergy use might result in increased atmospheric CO2 levels. 

However, such a case-by-case analysis of the net atmospheric impact of biomass fuels 

would likely be prohibitively time-consuming and complex for facilities and permitting 

authorities. The information we have collected to this point 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. Further, additional detailed examination of science and technical issues 

is needed to ensure that permitting authorities would be able to reasonably calculate and 

implement accounting for the amount of GHG emissions above BAU in particular instances, or 

to assure consistency among the calculation methodologies of the various permitting authorities. 

Given the challenge of conducting a complete analysis for each permit application, a more 

practical approach to accounting is needed. Absent this, the burden on permitting authorities is 

likely to be overwhelming. 
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For at least one category of biomass feedstocks that may be used in energy production, it 

does appear possible at this time to conclude that the atmospheric impact is negligible. Some 

commenters on the CFI suggested that utilizing mill residue (e.g. sawdust, planar shavings, panel 

trim) to generate energy, rather than leaving the residue to decompose, likely would not cause 

emissions over and above that which would have taken place if the energy use did not occur. 

Given that this material would have decomposed under natural circumstances in a short period of 

time (e.g., less than 10-15 years) in the absence of utilization as bioenergy, this conclusion 

appears credible. 

In some cases, the use of biological material as a fuel would clearly reduce net 

atmospheric CO2 stocks in comparison with BAU fossil fuel emissions. In these cases, requiring 

permitting at this time, before conducting the detailed analysis required to develop an appropriate 

accounting system for bioenergy and other biogenic sources, might actually discourage projects 

that would have a net benefit for the atmosphere. For example, requiring permitting for facilities 

seeking to generate energy from the combustion of dead trees, especially those killed due to a 

widespread event like the mountain pine beetle epidemic (that would emit CO2 anyway through 

natural decomposition), is likely to discourage the utilization of a readily available resource that 

would clearly reduce CO2 emissions, in comparison with BAU fossil fuel-related emissions. 

In November 2010, EPA said it would provide guidance containing qualitative 

information on useful issues to consider with respect to biomass combustion, such as specific 

feedstock types and trends in carbon stocks at different spatial scales (e.g. national, regional, 

state). Upon further review, EPA has concluded that it requires further scientific input from an 

independent panel before it can make more qualitative characterizations beyond the one 

described above for residue material. 

Comment [dsg8]: Should this be i.e.?
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2. Economic impacts 

As discussed earlier in this section, EPA has previously advised that the economic 

impacts component of BACT analysis should focus on direct economic impacts calculated in 

terms of cost effectiveness (dollars per ton of emission reduction). As noted in the 2010 GHG 

Permitting Guidance, EPA recognizes that at present add-on controls for CO2 are generally 

expensive technologies, especially the costs associated with CO2 capture and compression. As 

with other electric generating facilities, these direct costs will generally make the price of 

electricity from bioenergy used in conjunction with add-on control technologies for CO2

uncompetitive compared to electricity from plants with other GHG controls, such as bioenergy 

alone. 

In addition to the direct economic impacts component of the BACT analysis, permitting 

authorities may also consider indirect economic impacts, including potential economic benefits. 

Such indirect considerations may include economic growth and the availability of employment 

opportunities generated within a particular region or community by the utilization of biomass 

fuels. As EPA noted in the 2010 GHG Permitting Guidance, it is appropriate for permitting 

authorities to account for the underlying objectives of federal and state policies to foster 

expansion of renewable resources and promote biomass. Tax incentives are an example of such 

policies. Where one of the underlying objectives of a tax incentive or other type of policy 

promoting renewable energy or biomass utilization is to foster economic growth and create jobs 

in particular area, this may be considered as a relevant indirect economic impact or benefit that 

can be considered in Step 4 of a BACT analysis. Where selecting a particular option as BACT 

would further the goals of such policy, this may form part of the basis for selecting that option as 

BACT. Likewise, where the record shows that requiring a particular control option as BACT 

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26 

would counteract, or work at cross purposes from, policies that are intended to promote 

renewable energy and biomass, this may form part of the justification for eliminating an option 

from further consideration at Step 4 of the BACT analysis. 

Many federal and state policies, along with a number of regional efforts, are currently 

underway to foster the expansion of renewable resources and promote bioenergy projects as a 

way of addressing climate change, increasing domestic alternative energy production, enhancing 

forest management and creating related employment opportunities. For example, the federal 

Renewable Electricity Production Tax Credit, a per-kilowatt-hour tax credit for electricity 

generated by qualified energy resources including biomass, was originally enacted by the Energy 

Policy Act of 1992 (largely by amending the Internal Revenue Code of 1986). Numerous pieces 

of federal legislation, the most recent being the American Recovery and Reinvestment Tax Act 

of 2009, have since been passed to extend certain related expiring tax provisions and expand the 

scope of qualified biomass feedstocks, with the duel aims of domestic job creation and economic 

stabilization.38,39 Such policies can improve the economy, especially in rural communities, by 

generating jobs, income, and taxes through demand for local biogenic resources and construction 

of bioenergy conversion facilities. Specifically, an improved market for biogenic fuels and forest 

land could affect economic stabilization through increased incomes (from new jobs), higher local 

tax base and possibly through the diversification of local energy sources, and increased 

competition could lower energy prices. 

As another example of such economic impacts, the Record of Decision for the Biomass 

Crop Assistance Program (BCAP) –a program created by the 2008 Farm Bill that provides 

                                                           

38 American Recovery and Reinvestment Tax Act of 2009. The Library of Congress. 

http://thomas.loc.gov/home/h1/Recovery_Bill_Div_B.pdf 

39 H. R. 1424 Emergency Economic Stabilization Act of 2008. The Library of Congress. http://thomas.loc.gov 

H. R. 4520 American Jobs Creation Act of 2004. The Library of Congress. http://thomas.loc.gov 

H. R. 3090 Job Creation and Worker Assistance Act of 2002. The Library of Congress. http://thomas.loc.gov 
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financial assistance to biomass conversion facilities and owners of agricultural and non-industrial 

private forest land who wish to establish, produce, and deliver biomass feedstocks – estimated 

the total economic impact from broad BCAP implementation to include $88.5 billion in related 

economic activity and the creation of nearly 700,000 jobs.40 Other potential indirect economic 

considerations from biomass utilization as BACT could include, but are not limited to, increased 

demand for traditional or new biogenic crops and reduced disposal costs for biogenic materials 

that would otherwise be landfilled or destroyed. 

3. Energy impacts 

With respect to energy impacts, the BACT analysis should assess the relative energy 

demands of the options under consideration for reducing emissions from the facility obtaining a 

permit and may include an evaluation of impacts on fuel scarcity or a locally desired fuel mix in 

a particular area. For facilities utilizing biogenic fuels, it is appropriate to broaden the scope of 

the energy impacts analysis to consider policies that seek to promote diversity in fuels used in a 

local area, within a state, or nationally. 

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. Renewable fuels policies, which 

in some cases provide incentives for the substitution of renewable fuels for fossil fuels, have not 

traditionally been part of the BACT energy impacts analysis. However, consideration of 

renewable energy policies could become part of the BACT analysis, especially if state policies 

mandate the replacement of fossil fuel with biogenic fuel.41 In addition to numerous federal 

programs, as of February 2011, 48 states have some kind of state-level financial or conservation 

                                                           

40USDA Farm Service Agency. 2010. www.apfo.usda.gov/FSA 

Programmatic Environmental Impact Statement for the Biomass Crop Assistance Program. 2010. http://public.geomarine.com/report.aspx?id=26 

41 See p. B.30 of the 1990 NSR Guidance, discussing locally scarce fuels. 
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incentive program that includes biomass production and almost as many states have rules, 

regulations or policies that promote bioenergy use.42 For example, certain states, such as 

California43, Washington,

44 and Massachusetts45 have policies and programs to incentivize forest 

management for biomass production. California, for example, as of 2009, has the technical 

potential for 14.2 million bone dry tons a year available from forest residues.46 After trees are 

harvested for timber, such forest residues are typically left in the forest or disposed of via open 

burning because only timber of a certain quality can be used in lumber mills and other processing 

facilities. An advantage of using forest residues for bioenergy production is that a collection 

infrastructure is already in place to harvest the wood, it reduces the incidence of open burning 

and provides an additional stream of revenue for forest owners. Programs and policies 

established to meet the multiple goals of forest management plans -- to establish healthy and 

naturally diverse forests with a balance between productive harvest and natural ecosystem and 

wildlife health – can act as a foundation for sustainable bioenergy production.47

                                                           

42 Database of State Incentives for Renewables & Efficiency. Accessed February 1, 2011. 

www.dsireusa.org/incentives/ 

43 2009 Progress to a Plan: Bioenergy Action Plan for California. California Energy Commission. 2009. 

www.energy.ca.gov/2010publications/CEC-500-2010-007/CEC-500-2010-007.PDF 

Integrated Energy Policy Report. California Energy Commission. 2007. www.energy.ca.gov/2007publications/CEC100-2007-008/CEC-100-2007-008-CMF.PDF 

Senate Bill (SB) 71. Economic Development: Sales And Use Tax Exclusions. Environmental Technology Project 

California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA). 

www.treasurer.ca.gov/caeatfa/sb71/index.asp 

44 Washington State Bioenergy Policy Framework. www.bioenergy.wa.gov/BiofuelIncentives.aspx 45 Massachusetts Green Power Purchasing Commitment, 2007, and Renewable Portfolio Standard. 2010. 

www.dsireusa.org/incentives/index.cfm?EE=0&RE=1&SPV=0&ST=0&implementingsector=S&state=MA&technol

ogy=Biomass&sh=1 

Act Related to Green Communities. Commonwealth of Massachusetts. 2008. 

www.malegislature.gov/Laws/SessionLaws/Acts/2008/Chapter169 

46 2009 Progress to a Plan: Bioenergy Action Plan for California. California Energy Commission. 2009. 

www.energy.ca.gov/2010publications/CEC-500-2010-007/CEC-500-2010-007.PDF 47 California Forest Practice Rules. The California Department of Forestry and Fire Protection. 2011. 

www.fire.ca.gov/resource_mgt/downloads/2011_FP_Rulebook_with_Diagrams_with_Tech_Rule_No_1.pdf. 

Deleted: ,
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Conversely, if the proposed biogenic feedstock is scarce in the localized area of the 

proposed project, then the scarcity of available fuel for the project might be an energy impact 

suggesting that the proposed feedstock should not be selected as BACT. 

C. Potential Conclusions in Step 4 Analysis 

The considerations described above can support a conclusion that the exclusive 

utilization of biomass fuel is BACT for greenhouse gases at a bioenergy facility. As discussed 

above and in earlier EPA guidance, the costs of applying add-on pollution controls for 

greenhouse gas emissions are expected to be expensive and thus would in most cases justify 

elimination of this option based on direct economic impacts. However, EPA does not expect that 

the projected cost of energy efficient technology will by itself justify eliminating this option from 

consideration at bioenergy facilities. Nevertheless, where a bioenergy facility is projected to 

provide the energy and economic benefits described above in accordance with existing federal or 

state policies promoting utilization of biomass for energy production, these considerations may 

justify selecting the option of exclusively using a biomass fuel as BACT for a bioenergy facility. 

Furthermore, in the case of residue material that would otherwise decompose in a 10-15 year 

time frame, the net carbon cycle impact of this biomass fuel is expected to be negligible. Thus 

for a feedstock composed of such residue material, the costs of applying strategies to reduce 

emissions from the facility level do not appear justified at this time because the carbon dioxide 

emissions from the individual facility would not be increasing atmospheric impacts above the 

business as usual case. As discussed above, additional information is needed before similar 

conclusions can be supported for other types of biomass feedstocks, but EPA believes the energy 

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and economic benefits of this fuel is sufficient at this time to justify selecting biomass fuel as 

BACT for greenhouse gases without further control.48 

For facilities that are co-firing biomass with another primary fuel, the permitting record 

should provide a reasoned justification for basing BACT for greenhouse gases on a specific 

proportional allocation of fuels.49 The factors described above may be used to justify a higher 

proportional allocation of biomass fuels as BACT (to the extent technically feasible) but not 

necessarily to eliminate other strategies for reducing greenhouse gas emissions from a facility 

that utilizes some proportion of fossil fuels. The costs of add-on pollution controls will still, in 

most cases, justify eliminating this technology from a facility that utilizes biomass and another 

primary fuel type. However, application of methods, systems, or techniques to increase energy 

efficiency will remain a key GHG-reducing opportunity for facilities that utilize a significant 

proportion of fossil fuels and cannot demonstrate the same degree of energy and economic 

benefits achieved from the exclusive utilization of the biomass fuels, as described above. While 

some utilization of biomass fuels will have some impact on reducing dependence on fossil fuels 

and promoting economic growth in areas that supply biomass fuels, a small proportion of 

biomass fuel use may not justify bypassing opportunities to reduce GHG emissions by improving 

energy efficiency at a facility that still combusts a significant proportion of fossil fuels. 

However, when assessing the proportional allocation for biomass and other fuel types at a co-

                                                           

48 This guidance is applicable to an assessment of BACT for greenhouse gases. When conducting a BACT analysis 

for other regulated NSR pollutants at the type of source covered by this guidance, EPA recommends continuing to 

focus on guidance EPA has previously provided on determining BACT using the top-down process. The 

considerations described here, in terms of federal and state incentives for bioenergy production and sustainable 

forest management, may still be relevant considerations in Step 4 of a top-down BACT analysis for another 

regulated NSR pollutant, but these factors should be considered in the context of the particular pollutant for which 

the BACT analysis is conducted. These considerations may not apply in the same manner to pollutants other than 

GHGs, particularly where there is a more established record of the range of costs that have been acceptable in 

previous BACT determinations for the pollutant. 49 See, In re: Northern Michigan University Ripley Heating Plant. PSD Appeal No. 08-02, Slip. Op at 18-23, 28 

(EAB 2009) (remanding a permit for a co-fired electric generating facility where record did not contain justification 

for establishing BACT limits based on specific proportional allocation of wood and coal). 
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fired energy facility, a permitting authority may consider the relative energy efficiency of using a 

greater proportion of biomass fuels and the effect this may have on GHG emissions from an 

individual facility. Where a residue material is utilized, any loss of energy efficiency attributable 

to the use of this type of biomass feedstock may be offset by the absence of a significant net 

carbon cycle impact above the business as usual case. 

IX. Step 5 – Selecting BACT 

When setting GHG emissions limitations for sources of biogenic CO2 emissions, one 

should conduct the same evaluation as that described in the 2010 GHG Permitting Guidance.50  

The permitting authority is responsible for defining the form of the BACT limits and making 

them enforceable as a practical matter.51 In determining the form of the limit, the permitting 

authority should consider issues such as averaging times and units of measurement. 

For example, in the case of co-fired facilities, a final permit may include a standard that 

specifies the proportional allocation of fuels to be used, thus limiting the options to the fuel mix 

justified as BACT. When making sure the limit is practically enforceable, the permitting 

authority must include information regarding the methods that will be used for determining 

compliance with the limits (such as operational parameters, timing, testing methods, etc.) and 

ensure that there is no ambiguity in the permit terms themselves.52 The permitting authority bears 

the responsibility in Step 5 to fully justify the BACT decision in the permit record. Regardless of 

the control level or feedstock proposed by the applicant as BACT, the ultimate determination of 

BACT is made by the permitting authority. 

                                                           

50 “PSD and Title V Permitting Guidance for Greenhouse Gases.” Prepared by EPA staff. November 2010. See 

pages 45-47. Available at: http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf. [should this just be a 

short cite to the 2010 GHG Permitting Guidance? Only need complete citation information once.] 51 See generally EPA Guidance on Limiting Potential to Emit (PTE) in New Source Permitting (June 13, 1989), 

available at http://www.epa.gov/reg3artd/permitting/t5_epa_guidance.htm. 52 In re Prairie State Generating Company, 13 E.A.D. at 83, 120. 

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In addition to a permit containing specific numerical emissions limits established in a 

BACT analysis, a permit can also include conditions requiring the use of a work practice such as 

an Environmental Management System (EMS) focused on energy efficiency as part of that 

BACT analysis. The inclusion of such a requirement would be appropriate where it is 

technically impractical to measure emissions and/or energy use from all of the equipment and 

processes of the plant and apply an output-based standard to each of them. For example, a 

candidate might be a factory with many different pieces of equipment and processes that use 

energy. In addition to a BACT emissions limit on the boiler providing energy, the permit could 

also lay out a requirement to implement an EMS along with a requirement that all suggested 

actions that result in net savings have to be implemented. Consequently, the plant will operate in 

the most efficient manner through gradual achievable improvements. However, design, 

equipment, or work practice standards may not be used in lieu of a numerical emissions 

limitation(s) unless there is a demonstration in the record that the criteria for applying such a 

standard are satisfied. 

 
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Appendix: LUCF data from the Inventory 

Table 1: Carbon sequestered by LULUCF sinks as reported in the Inventory (Tg CO2 Eq.)53, ranked in order of magnitude. Forest

Land Remaining Forest Land has been further broken up into forest and harvested wood carbon pools.

IPCC Source Category LULUCF Sink 2008 *1990–2008

Average

Forest Land Remaining Forest Land

(Carbon Stock Changes)

Total Forest Sector C Stock Change (791.9) (688.0)

Forest (703.9) (576.7)

Aboveground Biomass (397.2) (373.5)

Soil Organic Carbon (145.9) (68.0)

Belowground Biomass (78.8) (74.1)

Litter (55.9) (35.8)

Dead Wood   (26.2) (25.3)

Harvested Wood (88.0) (111.2)

SWDS (63.6) (63.7)

Products in Use (24.4) (47.6)

Settlements Remaining Settlements C Stock Changes in Urban Trees (93.9) (75.5)

Cropland Remaining Cropland Soil C Stock Changes for Mineral Soils (45.7) (51.5)

Land Converted to Grassland   Soil C Stock Changes for Mineral Soils (25.1) (24.0)

Grassland Remaining Grassland Soil C Stock Changes in Mineral Soils (12.4) (23.3)

Other   Changes in Yard Trimming and Food Scrap C

Stocks in Landfills (9.5) (13.6)

Gross Sequestration from LULUCF Sinks (978.5) (875.9)

* The U.S. Greenhouse Gas Inventories submitted to the UNFCCC provide annual estimates from 1990.

                                                            53 The Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 –2008 (April 2010) and the archive of previous inventories are

available online from the Environmental Protection Agency Inventory Report Web site, located at

http://www.epa.gov/climatechange/emissions/usinventoryreport.html. 
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Table 2: Emissions from LULUCF sources as reported in the Inventory (Tg CO2 Eq.), ranked in order of magnitude.

IPCC Source Category LULUCF Source 2008 *1990–2008

Average

Cropland Remaining Cropland Soil C Stock Changes in Organic Soils 27.7 27.6

Forest Land Remaining Forest Land Non‐CO2 Emissions from Forest Fires 21.7 15.7

Land Converted to Cropland

Soil C Stock Changes for Mineral and Organic

Soils

5.9 2.8

Cropland Remaining Cropland Liming of Agricultural Soils 3.8 4.4

Cropland Remaining Cropland Urea Fertilization 3.8 3.1

Grassland Remaining Grassland Soil C Stock Changes in Organic Soils 3.7 3.7

Settlements Remaining Settlements Direct N2O Fluxes from Settlement Soils 1.6 1.2

Wetlands Remaining Wetlands

CO2 and N2O Emissions from Peatlands

Remaining Peatlands

0.9 1.0

Land Converted to Grassland Soil C Stock Changes in Organic Soils 0.9 0.8

Forest Land Remaining Forest Land Direct N2O Emissions from Forest Soils 0.4 0.3

Gross Emissions from LULUCF Sources 70.4 60.6

* The U.S. Greenhouse Gas Inventories submitted to the UNFCCC provide annual estimates from 1990.