UNITEDSTATESENVIRONMENTALPROTECTIONAGENCYREGION711201RennerBoulevardLenexa,Kansas66219)22016MEMORANDUMSUBJECT:TechnicalSupportDocument(TSD)forDirectFinalRuletoaddtheDefinitionofGreenhouseGas,andPreventionofSignificantDeterioration(PSD)PlantwideApplicabilityLimits(PALs)Revisions,StateofIowaFROM:TO:THRU:HeatherHamiltonftAE.-''"1-t.ttIowaStateManagerAWMD/APDB/CPPSIA-131BandIA-159AmyAlgoe-EakinSectionChiefAWMD/APDB/AtPSMikeJayBranchManagerAWMD/APDBThisdirectfinalactionwilladdresstwosubmissionsfromtheStateofIowaasfollows:•IA-131B:OnNovember18,2008,theEnvironmentalProtectionAgency(EPA)receivedastateimplementationplan(SIP)revisionfromtheStateofIowathatincludedthedefinitionof"greenhousegas"andaddedgreenhousegasestotheairemissionsinventoryrequirements.EPAdidnotactontheseprovisionsinthedirectfinalnoticethatwaspublishedonDecember29,2009.74FR68692.First,thefederaldefinitionof"greenhousegas"wascodifiedat40CFR86.1818-12(a)onMay7,2010(75FR25686)toreadasfollows:"Thissectioncontainsstandardsandotherregulationsapplicabletotheemissionsoftheairpollutantsdefinedastheaggregategroupofsixgreenhousegases:Carbondioxide,nitrousoxide,methane,hydrofluorocarbons,perfluorocarbons,andsulfurhexafluoride."Iowa'sdefinition(567lAC20.2)of"greenhousegas"readsasfollows,andisbeingaddedintotheSIPwiththisaction:"Greenhousegas"meanscarbondioxide,methane,nitrousoxide,hydrofluorocarbons,perfluorocarbons,andsulfurhexafluoride."PrintedonRecycledPaperSecond, Iowa's submittal proposes

to add into the Iowa SIP

a requirement

that greenhouse

gas emissions be included

in the emissions inventory.

567 lAC 21.1(3) ("Emissions inventory")

is being revised

as follows:

The person responsible

for equipment

as defined herein shall provide information

on fuel use, materials processed,

air contaminants
emitted (including greenhouse

gases

as "greenhouse

gas"

is defined

in rule 567 20.2(455B),

..

. the remainder

of the rule remains

the same

.

. • IA-159:

On July 24,2013,
EPA received

a SIP revision
from the State oflowa

to adopt federal amendments

to the PSD program. Specifically,

Iowa requested revisions

to Iowa Administrative

Code (lAC)
567 Chapter

33

- "Special Regulations

and Construction Permit Requirements

for Major Stationary Sources

- Prevention

of Significant Deterioration

(PSD)

of Air Quality,"

to revise
the definition of"subject

to regulation,"

as it applies

to plantwide applicability limitations (PALs),

and

to revise rule 33.9

to adopt

by reference

the federal
rule revision

as of July
12, 2012, except

the term "Administrator shall mean "the department

of natural resources." The purpose

of this revision

was

to adopt more recent federal amendments

to the PSD program related to greenhouse

gas emissions

and

to streamline Iowa's PSD program

by providing additional opportunities

for PALs

for greenhouse
gases. On June 23, 2014,
the United States Supreme Court issued

a decision addressing

the application ofPSD permitting requirements

to GHG emissions.
Utility Air Regulatory
Group

v. Environmental Protection Agency,

134 S.Ct. 2427. The Supreme Court said that the EPA may not treat GHGs

as an air pollutant for purposes

of determining whether

a source

is

a major source required

to obtain

a PSD permit.
The Court also said that the EPA could continue

to require
that PSD permits, otherwise required based

on emissions

of pollutants
other than GHGs, contain limitations

on GHG emissions based

on the application ofBest Available Control Technology (BACT). In accordance

with the Supreme Court decision,

on April10, 2015,
the U.S. Court

of Appeals

for the District

of Columbia Circuit
(the D.C. Circuit) issued

an amended judgment vacating

the regulations

that implemented

Step

2 of the EPA's PSD and Title

V Greenhouse

Gas Tailoring
Rule, but not the regulations

that implement

Step

1 of that rule. Step

1 of the Tailoring
Rule covers sources

that are required

to obtain

a PSD permit based

on emissions

of pollutants
other than GHGs. Step

2 applied

to sources
that emitted only GHGs above
the thresholds triggering

the requirement

to obtain

a PSD permit. The amended judgment preserves, without

the need
for additional rulemaking

by the EPA,
the application

of the BACT requirement

to GHG emissions

from Step

1 or "anyway" sources. With respect to Step

2 sources,

the D.C. Circuit's amended judgment vacated

the regulations

at issue

in the litigation, including

40 CFR 51.166(b

)( 48)(v),

"to the extent they require

a stationary source

to obtain

a PSD permit

if greenhouse

gases
are the only pollutant

(i) that the source emits

or has the potential

to emit above
the applicable major source thresholds,

or (ii) for which there

is

a significant emission increase from

a modification." On August 19,2015,

the EPA amended

its PSD and Title

V regulations

to remove from the Code

of Federal Regulations portions

of those regulations

that the D.C. Circuit specifically identified

as vacated

. 80 FR 50199. The EPA intends

to further revise
the PSD and Title

V regulations

to fully implement

the Supreme Court and D.C. Circuit rulings

in

a separate rulemaking.

This future rulemaking

will include revisions

to additional definitions

in the PSD regulations.

The EPA does not expect states

to revise their PSD programs

in anticipation

of additional

EPA actions

to revise

its PSD program
rules

in response

to the court decisions.

2Revisionsto567lACChapter33areasfollows(strikethroughandunderline):•AlthoughthefirstpartoftheSubrule33.3(1)definitionof"subjecttoregulation"remainsthesame,theportionoftheprovisionrelatingtogreenhousegaseswasrevisedasfollows:1.Greenhousegases(GHGs),theairpollutantdefinedin40CFR§86.1818-12(a)(asamendedonMay7,2010throughSeptember15,2011)astheaggregategroupofsixgreenhousegasesthatincludescarbondioxide,nitrousoxide,methane,hydrofluorocarbons,perfluorocarbons,andsulfurhexafluoride,shallnotbesubjecttoregulationexceptasprovidedinparagraphs"4"andandshallnotbesubjecttoregulationifthestationarysourcemaintainsitstotalsourcewideemissionsbelowtheGHGPALlevel,meetstherequirementsinrule567-33.9(455B),andcomplieswiththePALpermitcontainingtheGHGPAL.Theremainderofthedefinitionremainsthesame.•Subrule33.9Plantwideapplicabilitylimitations (PALs)wasrevisedasfollows:Thisruleprovidesanexistingmajorsourcetheoptionofestablishingaplantwideapplicabilitylimitation(PAL)onemissions,providedtheconditionsinthisrulearemet.TheprovisionforaPALassetforthin40CFR52.21(aa)asamendedthroughNovember29,2005July12,2012,areadoptedbyreference,exceptthattheterm"administrator"shallmean"thedepartmentofnaturalresources."IA-131IowaDepartmentofNaturalResourcesRecordofRulemakingNoticeofIntendedActionJanuary2,2008PublicHearingFebruary4,2008StateEffectiveDate7,2008SenttoEPANovember4,2008ReceivedbyEPANovember18,2008IA-159IowaDepartmentofNaturalResourcesRecordofRulemakingNoticeofIntendedActionMarch13,2013PublicHearingApril23,2013StateEffectiveDateJuly17,2013SenttoEPAJuly17,2013ReceivedbyEPAJuly24,20133