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[Federal Register Volume 78, Number 76 (Friday, April 19, 2013)]
[Proposed Rules]
[Pages 23524-23527]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-09314]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2013-0143; FRL-9805-1]

Approval and Promulgation of Implementation Plans; North 
Carolina: Deferral of Carbon Dioxide (CO2) Emissions From 
Prevention of Significant Deterioration (PSD) Requirements for 
Greenhouse Gases (GHG)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a revision to the North Carolina 
State Implementation Plan (SIP) submitted by the State of North 
Carolina, through the North Carolina Department of Environment and 
Natural Resources (NC DENR), on July 30, 2012. The SIP revision 
modifies North Carolina's prevention of significant deterioration (PSD) 
program to incorporate by reference (IBR) the federal deferral of, 
until July 21, 2014, PSD applicability to biogenic carbon dioxide 
(CO2) emissions from bioenergy and other biogenic stationary 
sources. EPA is proposing to approve North Carolina's SIP revision 
because the Agency has preliminarily determined that it is consistent 
with the Clean Air Act (CAA or Act) and EPA's new source review (NSR) 
permitting regulations.

DATES: Comments must be received on or before May 20, 2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2013-0143 by one of the following methods:
    1. www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. Email: R4-RDS@epa.gov.
    3. Fax: (404) 562-9019.
    4. Mail: EPA-R04-OAR-2013-0143, Regulatory Development Section, Air 
Planning Branch, Air, Pesticides and Toxics Management Division, U.S. 
Environmental Protection Agency, Region 4, 61 Forsyth Street SW., 
Atlanta, Georgia 30303-8960.
    5. Hand Delivery or Courier: Ms. Lynorae Benjamin, Chief, 
Regulatory Development Section, Air Planning Branch, Air, Pesticides 
and Toxics Management Division, U.S. Environmental Protection Agency, 
Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Such 
deliveries are only accepted during the Regional Office's normal hours 
of operation. The Regional Office's official hours of business are 
Monday through Friday, 8:30 to 4:30, excluding federal holidays.
    Instructions: Direct your comments to Docket ID No. ``EPA-R04-OAR-
2013-0143.'' EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
online at 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 through 
www.regulations.gov or email, information that you consider to be CBI 
or otherwise protected. The www.regulations.gov Web site 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.

[[Page 23525]]

If you send an email comment directly to EPA without going through 
www.regulations.gov, your email address will be automatically captured 
and included as part of the comment that is placed in the public docket 
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. For additional information about EPA's public docket visit the 
EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the electronic docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in www.regulations.gov or 
in hard copy at the Regulatory Development Section, Air Planning 
Branch, Air, Pesticides and Toxics Management Division, U.S. 
Environmental Protection Agency, Region 4, 61 Forsyth Street SW., 
Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you 
contact the person listed in the FOR FURTHER INFORMATION CONTACT 
section to schedule your inspection. The Regional Office's official 
hours of business are Monday through Friday, 8:30 to 4:30, excluding 
federal holidays.

FOR FURTHER INFORMATION CONTACT: For information regarding the North 
Carolina SIP, contact Mr. Richard Wong, Regulatory Development Section, 
Air Planning Branch, Air, Pesticides and Toxics Management Division, 
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., 
Atlanta, Georgia 30303-8960. Mr. Wong's telephone number is (404) 562-
8726; email address: wong.richard@epa.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. What action is EPA proposing?
II. What is the background for EPA's proposed action?
III. What is EPA's analysis of North Carolina's SIP revision?
IV. Proposed Action
V. Statutory and Executive Order Reviews

I. What action is EPA proposing?

    On July 30, 2012, NC DENR submitted a SIP revision to EPA for 
approval into the North Carolina SIP to IBR \1\ the deferral until July 
21, 2014, of the application of PSD permitting requirements to biogenic 
CO2 emissions from bioenergy and other biogenic stationary 
sources as promulgated in the rule entitled ``Deferral for 
CO2 Emissions From Bioenergy and Other Biogenic Sources 
Under the Prevention of Significant Deterioration (PSD) and Title V 
Programs,'' Final Rule, 76 FR 43490, (July 20, 2011) (hereafter 
referred to as the ``CO2 Biomass Deferral Rule''). The July 
30, 2012, SIP submittal revises North Carolina's air quality rule 15A 
North Carolina Administrative Code (NCAC) 02D.0544--Prevention of 
Significant Deterioration Requirements for Greenhouse Gases to IBR the 
version of 40 CFR 51.166 as of July 20, 2011.\2\ This version of 40 CFR 
51.166 includes the July 20, 2011, CO2 Biomass Deferral Rule 
revision to the definition of ``subject to regulation'' deferring PSD 
applicability to biogenic CO2 emissions from bioenergy and 
other biogenic stationary sources, until July 21, 2014. Today, EPA is 
proposing to approve North Carolina's July 30, 2012, SIP revision.
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    \1\ Throughout this document IBR means incorporate or 
incorporates by reference.
    \2\ The scope of the 15A NCAC 02D.0544 IBR of 40 CFR 51.166 is 
limited to the aspects of the federal regulation related to 
CO2 Biomass Deferral Rule revisions. PSD applicability 
for all other regulated NSR pollutants, as defined at 40 CFR 51.166 
and 52.21, is addressed in the North Carolina SIP by regulation 15A 
NCAC 02D.0530.
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II. What is the background for EPA's proposed action?

A. The GHG Tailoring Rule

    On June 3, 2010 (effective August 2, 2010), EPA promulgated a final 
rulemaking, entitled ``Prevention of Significant Deterioration and 
Title V Greenhouse Gas Tailoring Rule; Final Rule'' (hereafter referred 
to as the GHG Tailoring Rule), for the purpose of relieving 
overwhelming permitting burdens from the regulation of GHG that would, 
in the absence of the rule, fall on permitting authorities and sources. 
See 75 FR 31514. EPA accomplished this by tailoring the applicability 
criteria that determine which GHG emission sources become subject to 
the PSD program of the CAA. In particular, EPA established in the GHG 
Tailoring Rule a phase-in approach for PSD applicability and 
established the first two steps of the phase-in for the largest GHG 
emitters.\3\ On, May 17, 2011,\4\ NC DENR submitted a SIP revision to 
EPA to IBR into the North Carolina SIP Rule 15 NCAC 02D.0544--the 
version of 40 CFR 51.166 as of June 3, 2010, and effective August 3, 
2010, which included the GHG Tailoring Rule. EPA took final action to 
approve North Carolina's May 17, 2011, SIP revision on October 18, 
2011. See 76 FR 64240. Please refer to the GHG Tailoring Rule for 
specific details on the PSD applicability provisions.
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    \3\ Please refer to the July 12, 2012 (77 FR 41051) rulemaking 
finalizing GHG Tailoring Rule Step 3.
    \4\ North Carolina's proposed SIP revision incorporated a new 
PSD rule into North Carolina's SIP for GHG, at 15A NCAC 02D.0544--
Prevention of Significant Deterioration Requirements for Greenhouse 
Gases, to address the thresholds for GHG permitting applicability.
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B. EPA's CO2 Biomass Deferral Rule

    In the July 20, 2011, final rulemaking, EPA deferred until July 21, 
2014, the consideration of CO2 emissions from bioenergy and 
other biogenic sources (hereinafter referred to as ``biogenic 
CO2 emissions'') when determining whether a stationary 
source meets the PSD and title V \5\ applicability thresholds, 
including those for the application of best available control 
technology (BACT).\6\ Stationary sources that combust biomass (or 
otherwise emit biogenic CO2 emissions) and construct or 
modify during the deferral period will avoid the application of PSD to 
the biogenic CO2 emissions resulting from those actions. The 
deferral applies only to biogenic CO2 emissions and does not 
affect non-GHG pollutants or other GHG (e.g., methane and nitrous 
oxide) emitted from the combustion of biomass fuel. Also, the deferral 
only pertains to biogenic CO2 emissions in the PSD and title 
V program and does not pertain to any other EPA programs such as the 
GHG Reporting Program.
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    \5\ EPA's July 20, 2011, CO2 Biomass Deferral Rule 
made changes to the federal PSD and title V permitting programs. 
North Carolina's July 30, 2012, submission did not revise the 
state's title V program to adopt the CO2 deferral rule. 
Furthermore, the title V permitting program is not part of the North 
Carolina federally approved SIP.
    \6\ As with the Tailoring Rule, the CO2 Biomass 
Deferral Rule addresses both PSD and title V requirements.
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    Biogenic CO2 emissions are defined as emissions of 
CO2 from a stationary source directly resulting from the 
combustion or decomposition of biologically-based materials other than 
fossil fuels and mineral sources of carbon. Examples of ``biogenic 
CO2 emissions'' include, but are not limited to:
     CO2 generated from the biological decomposition 
of waste in landfills,

[[Page 23526]]

wastewater treatment, or manure management processes;
     CO2 from the combustion of biogas collected 
from biological decomposition of waste in landfills, wastewater 
treatment, or manure management processes;
     CO2 from fermentation during ethanol production 
or other industrial fermentation processes;
     CO2 from combustion of the biological fraction 
of municipal solid waste or biosolids;
     CO2 from combustion of the biological fraction 
of tire-derived fuel; and,
     CO2 derived from combustion of biological 
material, including all types of wood and wood waste, forest residue, 
and agricultural material.
    The deferral is intended to be a temporary measure, in effect for 
no more than three years, to allow the Agency time to conduct detailed 
examination of the science and technical issues related to accounting 
for biogenic CO2 emissions, and determine what, if any, 
treatment of biogenic CO2 emissions should be in the PSD and 
title V program. The biomass deferral rule is not EPA's final 
determination on the treatment of biogenic CO2 emissions in 
those programs. The Agency plans to complete its science and technical 
review and any follow-on rulemakings within the three-year deferral 
period and further believes that three years is ample time to complete 
these tasks. It is possible that the subsequent rulemaking, depending 
on the nature of EPA's determinations, would supersede the biomass 
deferral rulemaking and become effective in fewer than three years. In 
that event, North Carolina may revise its SIP accordingly.
    EPA's final biomass deferral rule is an interim deferral for 
biogenic CO2 emissions only and does not relieve sources of 
the obligation to meet the PSD and title V permitting requirements for 
other pollutant emissions that are otherwise applicable to the source 
during the deferral period or that may be applicable to the source at a 
future date pending the results of EPA's study and subsequent 
rulemaking action. This means, for example, that if the deferral is 
applicable to biogenic CO2 emissions from a particular 
source during the three-year effective period and the study and future 
rulemaking do not provide for a permanent exemption from PSD and title 
V permitting requirements for the biogenic CO2 emissions 
from a source with particular characteristics, then the deferral would 
end for that type of source and its biogenic CO2 emissions 
would have to be appropriately considered in any applicability 
determinations that the source may need to conduct for future 
stationary source permitting purposes, consistent with that subsequent 
rulemaking and the final GHG Tailoring Rule (e.g., a major source 
determination for title V purposes or a major modification 
determination for PSD purposes). EPA also wishes to clarify that the 
Agency does not require that a PSD permit issued during the deferral 
period be amended or that any PSD requirements in a PSD permit existing 
at the time the deferral took effect, such as BACT limitations, be 
revised or removed from an effective PSD permit for any reason related 
to the deferral or when the deferral period expires.
    40 CFR 52.21(w) requires that any PSD permit shall remain in 
effect, unless and until it expires or it is rescinded, under the 
limited conditions specified in that provision. Thus, a PSD permit that 
is issued to a source while the deferral was effective need not be 
reopened or amended if the source is no longer eligible to exclude its 
biogenic CO2 emissions from PSD applicability after the 
deferral expires. However, if such a source undertakes a modification 
that could potentially require a PSD permit and the source is not 
eligible to continue excluding its biogenic CO2 emissions 
after the deferral expires, the source will need to consider its 
biogenic CO2 emissions in assessing whether it needs a PSD 
permit to authorize the modification.
    Any future actions to modify, shorten, or make permanent the 
deferral for biogenic sources are beyond the scope of the biomass 
deferral action and this proposed approval of the deferral into the 
North Carolina SIP, and will be addressed through subsequent 
rulemaking. The results of EPA's review of the science related to net 
atmospheric impacts of biogenic CO2 and the framework to 
properly account for such emissions in title V and PSD permitting 
program based on the study are prospective and unknown. Thus, EPA is 
unable to predict which biogenic CO2 sources, if any, 
currently subject to the deferral as incorporated into the North 
Carolina SIP would be subject to any permanent exemptions or which 
currently deferred sources would be potentially required to account for 
their emissions in the future rulemaking EPA has committed to undertake 
for such purposes in three or fewer years. Only in that rulemaking can 
EPA address the question of extending the deferral or putting in place 
requirements that would have the equivalent effect on sources covered 
by the biomass deferral. Once that rulemaking has occurred, North 
Carolina may address related revisions to its SIP.

III. What is EPA's analysis of North Carolina's SIP revision?

    North Carolina's PSD program consists of Rule 15A NCAC 2D.0530--
Prevention of Significant Deterioration and 15A NCAC 02D.0544--
Prevention of Significant Deterioration Requirements for Greenhouse 
Gases, both of which IBR the provisions for the preconstruction PSD 
review process as published at 40 CFR 51.166. Rule15A NCAC 2D.0530 
applies to major stationary sources having the potential to emit at 
least 100-tons per year (tpy) or 250-tpy or more of a regulated NSR 
pollutant, depending on the type of source or modifications 
constructing in areas designated attainment or unclassifiable with 
respect to the national ambient air quality standards. Rule 15A NCAC 
02D.0544 (the subject of this proposed rulemaking) only applies to GHG-
emitting sources.
    In the July 20, 2011, CO2 Biomass Deferral Rule, similar 
to the approach with the Tailoring Rule, EPA incorporated the biomass 
deferral into the federal PSD program by amending the definition of 
``subject to regulation'' under 40 CFR 51.166 and 52.21, respectively. 
North Carolina's July 30, 2012, SIP revision IBR into the North 
Carolina SIP 40 CFR 51.166 as of July 20, 2011, which includes the 
CO2 Biomass Deferral revision to the definition of ``subject 
to regulation'' deferring, until July 21, 2014, PSD applicability to 
biogenic CO2 emissions from bioenergy and other biogenic 
stationary sources. These changes to North Carolina's Rule 15A NCAC 
02D.0544 became state effective on January 28, 2011. EPA is proposing 
to approve these changes to North Carolina's Rule 15A NCAC 02D.0544 to 
update the State's existing SIP-approved PSD program to be consistent 
with federal NSR regulations respecting the CO2 Biomass 
Deferral Rule (at 40 CFR 51.166), and the CAA.

IV. Proposed Action

    EPA is proposing to approve North Carolina's July 30, 2012, SIP 
revision to IBR changes to federal PSD regulations at 40 CFR 51.166 
promulgated in the June 3, 2010, CO2 Biomass Deferral Rule. 
EPA has made the preliminary determination that this SIP revision, with 
regard to the aforementioned proposed actions, is approvable because it 
is consistent with section 110 of the CAA and EPA NSR permitting 
regulations.

[[Page 23527]]

V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
proposed action merely approves state law as meeting federal 
requirements and does not impose additional requirements beyond those 
imposed by state law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     does not have Federalism implications as specified in 
Executive Order 13132 (64 F43255, August 10, 1999);
     is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule does not have tribal implications 
as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the state, and EPA notes that it will not impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Greenhouse gases, 
Incorporation by reference, Intergovernmental relations, Reporting and 
recordkeeping requirements.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: April 8, 2013.
A. Stanley Meiburg,
Acting Regional Administrator, Region 4.
[FR Doc. 2013-09314 Filed 4-18-13; 8:45 am]
BILLING CODE 6560-50-P
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