Summary of Interagency Working Comments on Draft Language under 

EO12866/13563 Interagency Review. Subject to Further Policy Review.

I. General Information

A. Summary 

1. Executive Summary

In this rulemaking, the EPA proposes to limit GHG emissions 

from new fossil fuel-fired power plants by limiting CO2

emissions. The proposed rule is undertaken pursuant to section 

111 of the Clean Air Act, which establishes a several step 

process for the EPA and the States to regulate air pollutants 

from stationary sources. Under section 111, EPA must regulate 

emissions from new sources in the source category by issuing a 

standard of performance, which is defined as “a standard for 

emissions of air pollutants which reflects the degree of 

emission limitation achievable through the application of the 

best system of emission reduction which (taking into account ... 

cost [and other factors]) ... has been adequately demonstrated.” 

In today’s action, the EPA is proposing to combine electric 

utility steam generating units (boilers and IGCC units, which 

are currently included in the Da category) and combined cycle 

units that generate electricity for sale and meet certain size 

criteria (which are currently included in the KKKK category), 

into a new category for new sources (the TTTT category) for the 

purposes of GHG emissions. The EPA is proposing standards of 

performance that require that all new fossil fuel-fired EGUs 
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meet an electricity-output-based emission rate of 1,000 lb 

CO2/MWh of electricity generated on a gross basis. This proposed 

standard is based on the demonstrated performance of natural gas 

combined cycle (NGCC) units, which are currently in wide use 

throughout the country, and are likely to be the predominant 

fossil fuel-fired technology for new generation in the future. 

New coal-, coal refuse-, oil- and petroleum coke-fired 

boilers and IGCC units should also be able to meet this standard 

by employing CCS technology. While a coal unit with CCS may be 

more expensive to construct than NGCC generation, for reasons 

explained below, we expect the difference to decrease over time 

as CCS becomes more mature and less expensive. 

We include in today’s proposed rulemaking a 30-year 

averaging compliance option under which affected coal- and pet 

coke-fired sources could comply with the 1,000 lb CO2/MWh 

standard on a 30-year average basis. Coal- and pet coke-fired 

EGUs that use this compliance alternative must meet an immediate 

performance standard of 1,800 lb CO2/MWh (gross) on a 12-month 

annual average basis, which can be achieved by a “supercritical” 

efficiency level, during the period before installation of CCS. 

By no later than the beginning of the 11th year, the facility 

would be required to meet a reduced CO2 emission limit of no more 

than 600 lb CO2/MWh (gross) on a 12-month annual average basis 
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for the remaining 20 years of the 30-year period, such that the 

weighted average CO2 emissions rate from the facility over the 

30-year time period would be equivalent to the proposed standard 

of performance of 1,000 lb CO2/MWh. 

Today’s proposal to require an emission rate of 1,000 lb 

CO2/MWh meets the requirements for a “standard of performance,” 

as defined under CAA section 111(a)(1). This proposed standard 

is based on the degree of emission limitation achievable through 

natural gas combined cycle generation. NGCC qualifies as the

“best system of emission reduction” (BSER) that the EPA has 

determined has been adequately demonstrated. New natural gasfired EGUs are less costly than new coal-fired EGUs, and as a 

result, our Integrated Planning Model (IPM) model projects that 

for economic reasons, natural gas-fired EGUs will be the 

facilities of choice until at least 2020, which is the analysis 

period for this rulemaking. 

Indeed, our IPM model does not project construction of any

new coal-fired EGUs during that period. This state of affairs 

has come about primarily because technological developments and 

discoveries of abundant natural gas reserves have caused natural 

gas prices to decline precipitously in recent years and have 

secured those relatively low prices for the near-future. We 

emphasize that, in light of a number of economic factors, 
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including the increased availability and significantly lower 

price of natural gas, energy industry modeling forecasts 

uniformly predict that few, if any, new coal-fired power plants 

will be built in the foreseeable future. 

We recognize that some owners/operators may nevertheless 

seek to construct new coal-fired capacity. This may be 

beneficial from the standpoint of promoting energy diversity, 

and today’s proposal does not interfere with construction of new 

coal-fired capacity. At present, while CCS would add 

considerably to the costs of a new coal-fired power plant, there 

are sources of funding available to support the deployment of 

CCS, including a limited number of government demonstration 

programs. Even if companies decide to construct a few new coalfired power plants under any circumstance, those few may well 

have access to those government programs. We expect that the 

costs of CCS will decline in the future as CCS matures and is 

utilized more widely.

For purposes of today’s action, the EPA does not have a 

sufficient base of information to develop a proposal for the 

anticipated relatively few affected sources that may be expected 

to take actions that would constitute “modifications” (as 

defined under the EPA’s NSPS regulations) and therefore be 
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subject to requirements for new sources. As a result, the EPA is 

not proposing requirements for NSPS modifications.

The EPA is aware that approximately 15 proposed EGUs have 

received CAA permitting authority approval for their 

preconstruction permits, but may not have “commenced 

construction” by the date of today’s proposed rulemaking. For 

this proposed rule, these sources that, as of the date of this 

proposal, have a PSD permit and are poised to commence 

construction within the very near future are referred to as 

“transitional sources.” In today’s proposed rulemaking, the EPA 

is not proposing a standard of performance for transitional 

sources, which we define as sources that have been issued a PSD 

permit by the date of proposal (including sources that have 

approved permits that are in the process of being amended, if 

those sources are intending to install CCS as evidenced by 

participating in any of the DOE CCS funding programs, either 

loan guarantee or grant programs) and that commence construction 

within 12 months of the date of publication of this proposal in 

the Federal Register. Upon finalization of this rulemaking 

without a standard of performance applicable to these sources, 

they will not be treated as new sources subject to the specific 

limitations set forth in the final new source standards. 
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 Our IPM modeling, using Energy Information Administration 

(EIA) reference case assumptions, projects that there will be no 

construction of new coal-fired generation without CCS by 2030. 

Under these assumptions, the proposed rule will no impose costs 

by 2030. We also examined a scenario with both increased future 

natural gas prices and increased future electric demand. In this 

sensitivity case, we saw small amounts of coal-fired generation

being built in 2030. Even under this sensitivity analysis with 

small amounts of new coal generation under conditions of high 

natural gas prices and simultaneously high electricity demand in 

2030, we do not project that this proposed rule will impose 

notable costs upon sources. 

We seek comments on all aspects of this proposal and 

identify a number of aspects of the proposal on which comments 

are specifically requested.

B. Overview and Outline

1. Overview

In this rulemaking, the EPA proposes to limit GHG emissions 

from new fossil fuel-fired power plants by limiting CO2

emissions. In 2009, the EPA issued a finding that GHG air 

pollution may reasonably be anticipated to endanger Americans’ 

public health and welfare, now and in the future, by 

contributing to climate change. Fossil fuel-fired power plants 
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emit more CO2 emissions than any other stationary source category 

in the United States, and among new CO2 emissions sources, the 

largest individual sources are in this source category. This 

rulemaking proposes federal standards of performance for new 

fossil fuel-fired power plants that can be met with existing 

technology. 

Note that in this preamble, while we refer to these 

sources, interchangeably, as power plants, steam generating 

units, affected sources, fossil fuel-fired electric generating 

units, covered EGUs, or, simply, EGUs, the proposed standards 

apply to only those sources identified in Section III.A. as the 

affected source category.

2. Why is the EPA proposing this rule? 

This proposed rule reflects the EPA’s common-sense approach 

to reducing CO2 and other GHG emissions, which by causing climate 

change, pose a serious threat to public health and welfare. The 

EPA is focusing first on reducing emissions from the largest 

emitters through measures with reasonable costs. The EPA is 

proposing to control CO2 pollution from fossil fuel-fired power 

plants because they are responsible for approximately 40 percent 

of all U.S. anthropogenic CO2 emissions.1 Individual new coal-

 

1 Or 32.4% of all anthropogenic GHG emissions; from information 

in Table 2-1 from ‘Inventory of U. S. Greenhouse Gas Emissions 
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fired power plants are among the largest individual new sources 

of CO2. Furthermore, design and technology choices exist that can 

be readily and cost-effectively used to reduce CO2 emissions from 

new fossil fuel-fired power plants. Thus, this proposed rule is 

a rational first step to control CO2 emissions from the largestemitting stationary sources under CAA section 111.

a. The Serious Threat of Climate Change to the Public’s Health 

and Welfare. Climate change, including global warming, is a 

significant threat to the global environment. The National 

Research Council (NRC) of the National Academies2 stated in a 

2011 report, “Each additional ton of greenhouse gases emitted 

commits us to further change and greater risks. In the judgment 

of the [NRC] Committee on America's Climate Choices, the 

environmental, economic, and humanitarian risks of climate 

change indicate a pressing need for substantial action to limit 

the magnitude of climate change and to prepare to adapt to its 

impacts.”3

 

and Sinks: 1990 – 2009’, U. S. Environmental Protection Agency, 

EPA 430-R-11-005, April 2011.

2 The National Academies comprise the National Academy of 

Sciences, National Academy of Engineering, Institute of Medicine 

and National Research Council.

3 National Research Council (2011) America’s Climate Choices, 

Committee on America’s Climate Choices, Board on Atmospheric 

Sciences and Climate, Division on Earth and Life Studies, The 

National Academies Press, Washington, DC.
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Action to reduce emissions is warranted because, as the EPA 

stated in its 2009 Endangerment Finding4, GHGs endanger the 

public health and public welfare of current and future 

generations. The anthropogenic buildup of GHGs in the atmosphere 

is very likely (90 to 99 percent probability) the cause of most 

of the observed global warming over the last 50 years.5 Based on 

the Endangerment Finding and its underlying technical support 

document (TSD)

6, reasons to reduce GHG emissions include the 

following:

 The key effects of climate change observed to date and 

projected to occur in the future include, but are not 

limited to, more frequent and intense heat waves, more 

severe wildfires, degraded air quality, heavier and more 

frequent downpours and flooding, increased drought, greater 

sea level rise and storm surge, more intense storms, harm 

 

4 EPA, “Endangerment and Cause or Contribute Findings for 

Greenhouse Gases under Section 202(a) of the Clean Air Act” (74 

FR 66,496; Dec. 15, 2009). 

http://epa.gov/climatechange/endangerment.html.

5 Endangerment Finding at 74 FR 66,518, which notes that the 2007 

conclusion of the Intergovernmental Panel on Climate Change was 

re-confirmed by the June 2009 assessment by the U.S. Global 

Change Research Program. 

6 EPA, “Technical Support Document for Endangerment and Cause or 

Contribute Findings for Greenhouse Gases under Section 202(a) of 

the Clean Air Act, Dec. 9, 2009.” Both the Federal Register 

Notice and the TSD for Endangerment and Cause or Contribute 

Findings are found in the public docket established for the 

endangerment rulemaking, Docket No. EPA–OAR–2009–0171 and at 

http://epa.gov/climatechange/endangerment.html.
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to water resources, continued ocean acidification, harm to 

agriculture, and harm to wildlife and ecosystems. 

 These effects are anticipated to result in premature 

deaths, illnesses, damage to property and infrastructure, 

and other harm to people’s welfare in the U.S.

 Those “most vulnerable” to climate related health effects, 

such as children, the elderly and the poor – and future 

generations -- face disproportionate risks.7

 Human-induced climate change impacts have the potential to 

be far-reaching and multidimensional, though not all risks 

and potential impacts can be quantified.8

 A supporting consideration is that climate change impacts 

in certain regions of the world (potentially leading, for 

example, to food scarcity, conflicts or mass migration) may 

exacerbate problems that raise humanitarian, trade and 

national security issues for the United States.9

 The TSD further notes that some risks, such as the 

extinction of many species, would be irreversible.10 Also, the 

TSD points to research on the potential for “abrupt changes”11

 

7 Endangerment Finding, 74 FR 66498.

8 Endangerment Finding, 74 66497.

9 Endangerment Finding, 74 FR 66535.

10 Endangerment TSD, p. 136

11 Endangerment TSD, p. 75-78. The U.S. Climate Change Science 

Program defined “abrupt change” as a “large-scale change in the 
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which have uncertain or low probability but high potential 

impact. The NRC has said abrupt changes are an important 

consideration because, if triggered, they could occur so quickly 

and unexpectedly that human or natural systems would have 

difficulty adapting to them.12 Examples include severe drought in 

subtropical areas, release of large amounts of GHGs stored in 

the sea floor and frozen Arctic soils, and rapid disintegration 

of Greenland ice sheet or collapse of the West Antarctic ice 

sheet leading to many feet of sea level rise.13 

The special characteristics of GHGs make it important to 

take initial steps to control the largest emissions categories 

without delay. Unlike most traditional air pollutants, GHGs 

persist in the atmosphere for time periods ranging from decades 

to millennia, depending on the greenhouse gas. Greenhouse gases 

will continue to accumulate in the atmosphere at higher and 

higher concentrations each year unless substantial reductions in 

global greenhouse gas emissions are achieved. The NRC notes that 

emissions reduction choices made today matter in determining the 

level of impacts experienced not just over the next few decades, 

 

climate system that takes place over a few decades or less, 

persists (or is anticipated to persist) for at least a few 

decades, and causes substantial disruptions in human and natural 

systems.” Synthesis and Assessment Product (SAP) 3.4: Abrupt 

Climate Change (2008).

12 Endangerment TSD, p. 75, citing National Research Council 

(2002)

13 Endangerment TSD , pp. 76-78 
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but in the coming centuries and millennia.14 Also, the longer 

that the U.S. and other countries take to reduce emissions, the 

greater the future emissions reductions that will be required to 

limit global temperature increase to any given level.

This proposed rule to limit GHG emissions from the largest 

U.S. stationary source category will contribute to the emissions 

reductions required to slow or reverse the accumulation of GHG 

concentrations in the atmosphere, which is necessary to protect 

against projected climate change impacts and risks. Reducing GHG 

emissions reduces the impacts and risks articulated in the 

Endangerment Finding and TSD.

b. The High Level of GHG Emissions from Fossil-Fuel-Fired Power 

Plants and the Opportunities to Reduce these Emissions. Fossil

fuel-fired power plants comprise the largest category of 

stationary source CO2 emissions in the U.S. These sources account 

for approximately 40 percent of total U.S. anthropogenic CO2

emissions, based on 2009 data.15 Among all stationary sources of 

 

14 National Research Council (NRC) (2011). Climate Stabilization 

Targets. Committee on Stabilization Targets for Atmospheric 

Greenhouse Gas Concentrations; Board on Atmospheric Sciences and 

Climate, Division of Earth and Life Sciences, National Academy 

Press. Washington, DC.

15 Or 32.4% of all anthropogenic GHG emissions; from information 

in Table 2-1 from ‘Inventory of U. S. Greenhouse Gas Emissions 

and Sinks: 1990 – 2009’, U. S. Environmental Protection Agency, 

EPA 430-R-11-005, April 2011.
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GHG emissions, fossil-fuel-fired power plants generally 

constitute the largest individual sources.

Furthermore, a range of options are available to reduce 

emissions of new power plants, and hence emissions limits are 

likely to have little or no adverse economic effect. For 

economic reasons, most new power plants being built in the U.S. 

today are natural gas-fired or are powered by renewable sources 

of energy, such as wind and solar, and therefore generally 

produce significantly fewer CO2 emissions than uncontrolled coalfired power plants. Natural gas combustion inherently emits less 

CO2 than coal combustion and the technology of choice for 

generating electricity with natural gas, stationary combined 

cycle gas turbines, is also more efficient. Almost all the 

stationary combined cycle gas turbines built in the U.S. in the 

last five years can meet the proposed standard of 1,000 lb 

CO2/MWh. New coal-fired power plants can install CCS technology 

and can thereby limit their CO2 emissions per MWh generated to 

levels similar to, or even lower than, those of natural gasfired combined cycle plants without CCS. New coal-fired power 

plants with CCS are being permitted and built today, albeit 

usually with considerable financial assistance from the federal 

government. As discussed below, technological advances are 
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expected, with respect to CCS, that will reduce costs, and these 

advances are expected in the relatively short-term.

c. Alignment with Industry’s Other CAA Obligations. 

Establishing the overall regulatory requirements for 

CO2 emissions from new fossil fuel-fired power plants at this 

time is efficient because the EPA has recently issued 

regulations to limit criteria and hazardous air pollutants from

these sources. Consistent with Executive Order 13563, section 3, 

aligning the timing of today’s proposed rule with the rules for 

criteria and air toxics pollutants gives the industry more 

regulatory certainty, will facilitate the industry’s investment 

decisions, and will help inform its compliance decisions to meet 

all of its CAA obligations.

d. Promotion of Energy Diversity. This proposed rule is 

consistent with the President’s goal to ensure that “by 2035 we 

will generate 80% of our electricity from a diverse set of clean 

energy sources - including renewable energy sources like wind, 

solar, biomass and hydropower, nuclear power, efficient natural 

gas and clean coal.”16 The proposed rule will assist the 

deployment of CCS technology for new coal-fired power plants and 

reinforce incentives for the use of efficient natural gas-fired 

generation. Regulatory uncertainty may be hindering the 

development and deployment of CCS, as evidenced by American 

 

16 “Blueprint for a Secure Energy Future”, March 30, 2011.
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Electric Power (AEP)’s recent deferral of a large-scale CCS 

retrofit demonstration project on one of its coal-fired power 

plants because the State’s utility regulators would not approve 

CCS without a regulatory requirement to reduce CO2.

17 The 

standard established in this proposal would help create the 

regulatory certainty that CCS is the path forward for new coalfired generation.

Consistent with Executive Order 13563, section 2, public 

comments are sought on all aspects of this discussion.

3. Legal Proceedings Leading up to this Rulemaking

In April 2007, the U.S. Supreme Court ruled, in 

Massachusetts v. EPA,

18 that GHGs meet the definition of “air 

pollutant” in the CAA. This decision clarified that the 

authorities and requirements of the CAA, including section 111, 

apply to GHG emissions.

 

17 In a July 17, 2011, press release, AEP’s chairman said, “We 

are placing the project on hold until economic and policy 

conditions create a viable path forward ... We are clearly in a 

classic ‘which comes first?’ situation. The commercialization of 

this technology is vital if owners of coal-fueled generation are 

to comply with potential future climate regulations without 

prematurely retiring efficient, cost-effective generating 

capacity. But as a regulated utility, it is impossible to gain 

regulatory approval to recover our share of the costs for 

validating and deploying the technology without federal 

requirements to reduce greenhouse gas emissions already in 

place. The uncertainty also makes it difficult to attract 

partners to help fund the industry’s share.”

18 549 U.S. 497 (2007).
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As a result of this decision, the EPA obtained a voluntary 

remand from the U.S. Court of Appeals for the District of 

Columbia Circuit (the “Court”) to reconsider the EPA’s actions 

in a 2006 rulemaking for EGUs under CAA section 111, in which 

the EPA had promulgated standards for criteria air pollutants, 

but had declined to regulate GHG emissions. In part in response 

to threatened litigation over the EPA’s failure to act on the 

remand, the EPA agreed to propose today’s action to regulate GHG 

emissions from new fossil fuel-fired EGUs. 

4. Legal Basis for CAA Standards for Fossil-Fired Power Plants 

a. General Legal Requirements. Clean Air Act section 111 

establishes a several step process for the EPA and the States to 

regulate air pollutants from stationary sources. First, the EPA 

must list categories of stationary sources that cause or 

contribute significantly to air pollution that may reasonably be 

anticipated to endanger public health or welfare. Then, the EPA 

must regulate emissions from new sources in the source category 

by issuing a standard of performance, which is defined as “a 

standard for emissions of air pollutants which reflects the 

degree of emission limitation achievable through the application 

of the best system of emission reduction which (taking into 

account ... cost [and other factors]) ... has been adequately 

demonstrated.” New sources include new construction, and, as 
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discussed below, modifications to existing sources as well as 

reconstructed sources. Standards of performance for new sources 

are often referred to as new source performance standards 

(NSPS).

b. Cause-or-Contribute-Significantly Finding for Fossil FuelFired Power Plants and Endangerment Finding for GHG Air 

Pollution. The EPA is authorized to regulate GHGs from power 

plants based on earlier actions concerning endangerment. Before 

today’s rulemaking, the EPA listed different types of fossil

fuel-fired EGUs as source categories that caused or contributed 

significantly to air pollution that may reasonably be 

anticipated to endanger public health or welfare. Specifically, 

the EPA listed electric utility steam generating boilers, 

including coal-fired boilers, and initially regulated them in 

subpart D of its regulations under CAA section 111. Subsequent 

regulation of utility boilers has been under subpart Da. The EPA 

listed stationary combustion turbine engines and initially 

regulated them under subpart GG. The stationary combustion 

turbine engine portions of combined cycle facilities were also 

regulated under subpart GG. Heat recovery steam generators

(HRSG) associated with combined cycle facilities with duct 

burners were regulated under either subpart Da or one of the 

industrial boiler regulations, depending on the specific 
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characteristics of the HRSG. To minimize the compliance burden 

for owners/operators of combined cycle facilities some 

monitoring harmonization was done, but the two subparts were 

still applicable. 

In 2005, the EPA proposed subpart KKKK as a replacement for 

subpart GG and specifically covered the entire combined cycle 

facility under subpart KKKK such that only a single set of

requirements would apply. In that same year, the EPA proposed to 

include Integrated Gasification Combined Cycle (IGCC) facilities 

under the applicability of subpart Da. The EPA is authorized to 

promulgate the rulemaking proposed today -- which would 

establish standards of performance for CO2 emissions from EGUs 

currently in the Da and KKKK source categories -- because the 

EPA has already determined that both those source categories 

cause or contribute significantly to air pollution that may 

reasonably be expected to endanger public health or welfare. 

Clean Air Act section 111 does not require the EPA, as a 

prerequisite to regulating any particular air pollutant, to 

issue an endangerment finding or a cause-or-contributesignificantly finding for that air pollutant from that source 

category. 

As an alternative, the EPA is considering whether CAA 

section 111 should be interpreted to require that the EPA base 
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its regulation of CO2 emissions from EGUs on two findings: (i) a 

finding that GHG air pollution may reasonably be anticipated to 

endanger public health or welfare; and (ii) a finding that CO2

emissions from EGUs cause or contribute significantly to that 

air pollution. If section 111 were so interpreted, the EPA 

believes that (a) the 2009 Endangerment Finding, along with the 

EPA’s 2010 action denying petitions to reconsider that finding 

(which action reviewed scientific developments after the 

Endangerment Finding) would fulfill any requirement to make the 

endangerment finding concerning GHG air pollution; and (b) the 

large amount of CO2 emissions from EGUs clearly exceeds the low 

applicability threshold upon which the EPA would make the causeor-contribute-significantly finding.

As another alternative, the EPA is also considering whether 

CAA section 111 should be interpreted to require that the EPA 

base its regulation of CO2 emissions from EGUs on a rational 

basis for protection of the public health or welfare. If section 

111 were so interpreted, the EPA believes that (i) its 2009 

Endangerment Finding and 2010 denial of petitions to reconsider, 

by themselves, and particularly in conjunction with the National 

Academy of Sciences’ assessment reports issued since then, 

coupled with (ii) the fact that EGUs are the largest stationary 

source emitters of CO2, provide a rational basis for regulating 
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CO2 emissions from EGUs. There is no reason to revisit the 2009 

Endangerment Finding given recent scientific findings that 

strengthen the scientific conclusion that GHG air pollution 

endangers public health and welfare.19

5. Summary of Today’s Proposed Requirements to Reduce GHG 

Emissions from New Fossil Fired Power Plants, and Rationale for 

Those Requirements

a. Summary of Proposed Revisions to Categories and Requirements 

for New Sources 

i. Revisions to Categories of EGUs. In today’s action, the EPA 

is proposing to combine electric utility steam generating units 

(boilers and IGCC units, which are currently included in the Da 

category) and combined cycle units that generate electricity for 

sale and meet certain size criteria (which are currently 

included in the KKKK category), into a new category for new 

sources (the TTTT category) for the purposes of GHG emissions. 

Today’s proposed rulemaking would not affect criteria air 

pollutants, simple cycle turbines or EGUs located in non-

 

19 These recent scientific findings are described in section II 

of this notice, titled “Background.” See subsection II.B.3., 

“Climate Impacts Detailed in Recent NRC Assessments.” The legal 

options introduced here are presented in detail below in section 

IV.A.2, “Endangerment and Cause-or-Contribute-Significantly 

Finding.”
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continental areas.

20 It also would not affect biomass-fired 

boilers (including those that sell electricity to the grid) that 

co-fire with less than 250 MMBtu/h of any fossil fuel (biomass 

boilers currently subject to subpart Db, the IndustrialCommercial-Institutional Steam Generating Unit NSPS).

ii. Control Requirements for New Sources. The EPA is proposing 

standards of performance that require that all new fossil fuelfired EGUs meet an electricity-output-based emission rate of 

1,000 lb CO2/MWh of electricity generated on a gross basis. This 

proposed standard is based on the demonstrated performance of 

natural gas combined cycle (NGCC) units, which are currently in 

wide use throughout the country, and are likely to be the 

predominant fossil fuel-fired technology for new generation in 

the future. 

New coal-, coal refuse-, oil- and petroleum coke-fired 

boilers and IGCC units should also be able to meet this standard 

by employing CCS technology. There are currently a number of 

coal- and pet coke-fired EGU projects under development that 

include CCS. While a coal unit with CCS may be more expensive to 

construct than NGCC generation, for reasons explained below, we 

 

20 Thus, today’s rulemaking does not affect the Da and KKKK 

categories for conventional pollutants and does not affect the 

KKKK category for simple cycle turbines. 
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expect the difference to decrease over time as CCS becomes more 

mature and less expensive. 

To promote flexibility, and consistent with Executive Order 

13563, section 4, we include in today’s proposed rulemaking a 

30-year averaging compliance option under which affected coaland pet coke-fired sources could comply with the 1,000 lb CO2/MWh 

standard on a 30-year average basis. Coal- and pet coke-fired 

EGUs that use this compliance alternative must meet an immediate 

performance standard of 1,800 lb CO2/MWh (gross) on a 12-month 

annual average basis, which can be achieved by a “supercritical” 

efficiency level, during the period before installation of CCS. 

By no later than the beginning of the 11th year, the facility 

would be required to meet a reduced CO2 emission limit of no more 

than 600 lb CO2/MWh (gross) on a 12-month annual average basis 

for the remaining 20 years of the 30-year period, such that the 

weighted average CO2 emissions rate from the facility over the 

30-year time period would be equivalent to the proposed standard 

of performance of 1,000 lb CO2/MWh. 

We seek comment on this compliance option and on reasonable 

variations on the framework we propose to establish, and in 

particular on a mechanism for establishing practicably 

enforceable short term limits during the 30-year period. The 

potential approaches here include (1) requiring the 
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owner/operator to identify and obtain approval of, at the time 

of construction, an alternative 30-year emission trajectory to 

the 10- and 20-year limits described immediately above; and (2) 

specifying the emission rate for each year during the 30-year 

period consistent with meeting a 30-year average emission rate 

of 1,000 lb CO2/MWh. Such an option would provide coal-fired 

sources that intend to use a reduction technology, such as CCS,

significant flexibility in how that reduction technology is 

implemented. They could install the technology as part of the 

original project but use some or all of the initial ten year 

period to optimize the system. Such flexibility could be 

particularly useful to early adopters (i.e., “first movers”) of 

the technology. Alternatively, they could delay installation of 

the technology for a period of up to ten years to take advantage 

of advancements in the technology that could reduce costs and 

enhance performance. Under CAA section 111(b)(1)(B), the EPA is 

required to conduct a review of the new source standards in 

eight years and we intend at that time to review the 

availability and cost of CCS. As proposed, this 30-year 

averaging compliance option is only available to new coal- and 

pet coke-fired EGUs. We do not believe that it is necessary for 

NGCC units, as they should be able to meet the proposed 

performance with no need for add-on technology. We also solicit 
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comment on the need to extend the applicability for the 30-year 

averaging compliance option to other fossil fuels beyond just 

coal and pet coke.

b. Rationale. Today’s proposal to combine the relevant parts of 

the Da and KKKK categories is authorized under CAA section 

111(b)(1)(A) because that provision authorizes the EPA, after 

drawing up the list of affected source categories, to “revise” 

that list from time to time. Combining the relevant parts of the 

categories, as the EPA proposes to do, is one method to “revise” 

the list. Moreover, the EPA’s action to combine the relevant 

parts of the categories is reasonable because with the 

combination, all new fossil fuel-fired electricity generating 

units that meet specified minimum criteria will be subject to 

the same requirements, and therefore will be treated alike 

because they serve the same function, that is production of 

baseload or intermediate load power. The EPA is not including 

stationary simple cycle turbines in this rule because they 

generally operate differently than the other units covered by 

today’s rule. The units covered by today’s rule are generally 

used for baseload or intermediate power generation, while simple 

cycle turbines are generally used much less often (and thus have 

lower GHG emissions) and are generally used to meet peak rather 

than base or intermediate load requirements.
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Today's proposal does not apply to new sources in noncontinental areas, which include Hawaii and the territories. 

This is because non-continental areas do not have available 

pipeline quality natural gas and, accordingly, a natural-gasfired plant that could comply with the 1,000 lb CO2/MWh may not 

be feasible. At present, we do not have information to identify 

what types of new power plants may be constructed in those 

areas. Those types of power plants may range from liquified 

natural gas (LNG)-, to oil-, to coal-fired to renewables. Our 

lack of more specific information precludes us from proposing,

at this time, a standard for new sources in non-continental 

areas.

Today’s proposal to require an emission rate of 1,000 lb 

CO2/MWh meets the requirements for a “standard of performance,” 

as defined under CAA section 111(a)(1). This proposed standard 

is based on the degree of emission limitation achievable through 

natural gas combined cycle generation. NGCC qualifies as the 

“best system of emission reduction” (BSER) that the EPA has 

determined has been adequately demonstrated because NGCC emits 

the least amount of CO2 and does so at the least cost. We propose 

that a NGCC facility is the best system of emission reduction 

for two main reasons. First, natural gas is far less polluting 

than coal. Combustion of natural gas emits only about 50 percent 
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of the CO2 emissions that the combustion of coal does per unit of 

energy generated. Second, new natural gas-fired EGUs are less 

costly than new coal-fired EGUs, and as a result, our Integrated 

Planning Model (IPM) model projects that for economic reasons, 

natural gas-fired EGUs will be the facilities of choice until at 

least 2020, which is the analysis period for this rulemaking. 

Indeed, our IPM model does not project construction of any new 

coal-fired EGUs during that period. This state of affairs has 

come about primarily because technological developments and 

discoveries of abundant natural gas reserves have caused natural 

gas prices to decline precipitously in recent years and have 

secured those relatively low prices for the near-future. 

Importantly, because the IPM modeling shows that natural gasfired plants are the facilities of choice, the proposed standard 

of performance in today’s rulemaking –– which is based on the 

emission rate of a new NGCC unit –– does not add costs. In 

addition, compared to coal-fired EGUs, natural gas-fired EGUs 

have fewer nonair quality health and environmental impacts.

The just-described reasons are sufficient as a legal matter 

to justify today’s proposed actions to combine source categories 

and establish the 1,000 lb CO2/MWh standard. Such a standard 

could also be met today by new coal-fired units using CCS. In 

addition, we propose to include the compliance alternative of 
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allowing new coal- and pet coke-fired power plants to meet the 

1,000 lb CO2/MWh standard over a 30-year period so that plant 

developers can take advantage of future advancements cost 

savings in CCS technology that could lower its cost. This 

compliance alternative allows owners/operators to install CCS 

when the unit is first constructed but also provides the 

operational flexibility that may be necessary to optimize the 

performance and to have additional time to address any startup 

challenges related to issues such as business arrangements 

related to the sale or storage of the captured CO2. 

We recognize that, in light of a number of economic 

factors, including the increased availability and significantly 

lower price of natural gas, energy industry modeling forecasts 

uniformly predict that few, if any, new coal-fired power plants 

will be built in the foreseeable future. For these economic 

reasons, and independent of this proposed standard, the fossil

fuel-fired electricity generating industry has been trending 

towards increased use of natural gas and decreased use of coal

for new generating capacity. Today’s proposed action is 

consistent with that trend; but, at the same time, today’s 

proposal is not intended to affect that trend. 

We recognize that some owners/operators may nevertheless 

seek to construct new coal-fired capacity. This may be 
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beneficial from the standpoint of promoting energy diversity, 

and today’s proposal does not interfere with construction of new 

coal-fired capacity. In the first instance, a new coal-fired 

power plant may be able to meet the 1,000 lb CO2/MWh standard by 

installing CCS at the time of construction. At present, while 

CCS would add considerably to the costs of a new coal-fired 

power plant, there are sources of funding available to support 

the deployment of CCS, including a limited number of government 

demonstration programs.21 Even if companies decide to construct a 

few new coal-fired power plants under any circumstance, those 

few may well have access to those government programs.

The proposed 30-year averaging compliance option adds 

additional flexibility for new coal- and pet coke-fired power 

plants by allowing them to construct and begin operations

without CCS, and then to install and operate CCS at some time in 

the future, as long as they install CCS within ten years and 

operate it in a manner that allows them to meet the 1,000 lb 

CO2/MWh standard, on a weighted average basis, over the 30-year 

period. 

 

21 A number of the sources that EPA has identified as 

transitional sources have received some form of DOE financial 

assistance to demonstrate CCS. In addition, several additional 

projects have received funding but have not yet received air 

permits. Beyond these projects, prospects for additional 

federal funding are dependent on the overall budget proccess.
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We expect that the costs of CCS will decline in the future 

as CCS matures and is utilized more widely. Today’s action, if 

finalized, would promote utilization and further development of 

CCS by making it clear that CCS would be necessary for new coalfired power plants to meet the performance standard. The 

prospect of declining CCS costs, in conjunction with the 

possibility of continued availability of additional funding 

mechanisms (e.g. demonstration funding such as Department of 

Energy (DOE) grants, tax credits (for investment and/or EOR), 

State incentives such as clean energy standards), and sale of 

other usable products such as CO2, sulfur and hydrogen based 

products, indicates that CCS may well be sufficiently accessible 

in the near term to the few coal-fired power plants that are

expected to commence construction. Thus, the 30-year averaging 

compliance option, along with the current opportunities for 

funding to implement CCS immediately, helps to alleviate any 

concerns that today’s action could restrict new coal-fired 

construction. We seek public comment on all of the foregoing 

conclusions.

It should be noted that we are not required to justify the 

30-year averaging compliance option on grounds that it qualifies 

as the “best system of emission reduction” adequately 

demonstrated, and we are not stating in this action whether that 
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compliance alternative does or does not qualify as such. Thus, 

it is not necessary to determine that our expectation that costs 

will go down meets the standards for determining that CCS is 

“adequately demonstrated.” Rather, to reiterate, the 30-year 

averaging compliance option, along with the opportunity to 

implement CCS to meet the 1,000 lb CO2/MWh standard immediately

upon startup, make CCS an available option for the limited 

number of new coal-fired power plants that may construct to 

serve relevant policy objectives, including promoting energy 

diversity.

22 Indeed, by clarifying that, in the future, new coalfired power plants will need to implement CCS, this rulemaking 

eliminates uncertainty about the status of new coal and may well 

enhance the prospects for new coal-fired generation.

In addition, there may also be other potential compliance 

options available that were not considered in this proposal. In 

the analysis for today’s proposal, the EPA did not include 

unique treatment of CO2 emissions from biologically-based 

material, otherwise called biogenic CO2 emissions.23

 

22 EIA analysis (AEO 2012 early release) shows that “coal remains 

the dominant energy source for electricity generation.”

23 Biologically-based material is defined as non-fossilized and 

biodegradable organic material originating from modern or 

contemporaneously grown plants, animals or micro-organisms 

(including products, by-products, residues and waste from 

agriculture, forestry and related industries as well as the nonfossilized and biodegradable organic fractions of industrial and 

municipal wastes, including gases and liquids recovered from the 
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In 2011, the EPA prepared and submitted the draft 

Accounting Framework for Biogenic CO2 Emissions from Stationary 

Sources 

(http://www.epa.gov/climatechange/emissions/biogenic_emissions/s

tudy.html). The draft Framework includes both a detailed 

examination of the scientific and technical issues related to 

accounting for biogenic CO2 emissions from stationary sources, 

and a proposed method to account for a stationary source’s 

onsite CO2 emissions, taking the biological cycling of carbon 

into consideration, in a scientifically and technically rigorous 

manner. The independent Science Advisory Board (SAB) has 

convened a Biogenic Carbon Emissions Panel 

(http://yosemite.epa.gov/sab/sabproduct.nsf/0/2F9B572C712AC52E85

25783100704886?OpenDocument) to conduct a peer review of the 

draft Framework. The peer review report will be finalized later 

in 2012.

The SAB’s peer review of the EPA’s discussion on the 

science related to the impacts of biogenic CO2 is not yet 

finalized and the EPA looks forward to the SAB’s conclusions 

later in 2012. Given that the SAB’s peer review is ongoing, EPA 

is not suggesting specific methods of accounting or otherwise 

making particular proposals for treatment of biogenic CO2

 

decomposition of non-fossilized and biodegradable organic 

material).
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emissions in any stationary source program, including NSPS. As 

more information, including the SAB peer review, becomes 

available, EPA will consider its options and move forward as 

warranted. Public comments are welcome on these issues.

c. Requirements and Rationale for Modifications. For purposes of 

today’s action, the EPA does not have a sufficient base of 

information to develop a proposal for the anticipated relatively 

few affected sources that may be expected to take actions that 

would constitute “modifications” (as defined under the EPA’s 

NSPS regulations) and therefore be subject to requirements for 

new sources. As a result, the EPA is not proposing requirements 

for NSPS modifications.24

The EPA’s current regulations define an NSPS “modification” 

as a physical or operational change that increases the source’s 

maximum achievable hourly rate of emissions, but specifically 

exempt from that definition pollution control projects, which 

are projects that entail the installation of pollution control 

equipment or systems. The significant majority of projects that 

we believe EGUs are most likely to undertake in the foreseeable 

future that could increase the maximum achievable hourly rate of 

 

24 Note that any analysis of the cost and feasibility of CCS that 

EPA has undertaken for purposes of this proposal has focused 

solely on new sources. In today's action, EPA has not undertaken 

any analysis of the cost or feasibility of CCS for existing 

units that undergo modifications.
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CO2 emissions would constitute pollution control projects. In 

many cases, those projects would involve the installation of 

add-on control equipment required to meet CAA requirements for 

criteria and air toxics air pollutants. These increases in CO2

emissions would generally be small and would occur as a chemical 

byproduct of the operation of the control equipment. 

In other cases, those projects would involve equipment 

changes to improve efficiency to meet the requirements of a 

future 111(d) rulemaking for existing sources and would have the 

effect of increasing a source’s maximum achievable hourly 

emission rate (lb CO2/hr), even while decreasing its actual 

output based emission rate (lb CO2/MWh). Because all of these 

actions would be treated as pollution control projects under the 

EPA’s current NSPS regulations, they would be specifically 

exempted from the definition of modification.

In the past, there have been a small number of instances in 

which power plants have undertaken actions that, in the EPA’s 

view, should be treated as modifications. The sources that took 

these actions vary widely one from another, and the types of 

actions were disparate. In light of this, we do not have 

adequate information as to the types of actions that qualify as 

modifications, the amount of increase in CO2 emissions they 

cause, the types of control measures, or the costs and 
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effectiveness of control measures, on which to base a proposed 

standard of performance. Therefore, in today’s action, we are 

not proposing a standard of performance for modifications. As a 

result, sources that undertake modifications will be treated as 

existing sources and thus not subject to the requirements 

proposed in this notice. 

In today’s action, we solicit comment on the types of 

modifications power plants may undertake and the appropriate 

control measures. Depending on the information we develop, we 

may issue proposed standards of performance in the future.

d. Requirements for Transitional Sources. The EPA is aware that 

approximately 15 proposed EGUs have received CAA permitting 

authority approval for their preconstruction permits, but may 

not have “commenced construction” by the date of today’s 

proposed rulemaking.

 A few of these sources have taken additional action 

preparatory to commencing construction. For this proposed rule, 

these sources that, as of the date of this proposal, have a PSD 

permit and are poised to commence construction within the very 

near future are referred to as “transitional sources.” We are 

aware that approximately six of these sources have plans to 

implement CCS to some degree. 
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CAA section 111 provides by its terms that sources that 

have not “commenced construction” before the date of proposed 

standards for new sources will be subject to the NSPS when they 

do commence construction. The EPA’s regulations define 

“commenced construction” as, in general, undertaking a 

continuous program of construction or entering into a binding 

contract to do so. 40 CFR 60.2.

Commenters25 have pointed out that absent different 

treatment, transitional sources will be subject to the same 

requirements that apply to new sources that did not obtain their 

permit before the date of proposal. These commenters have 

suggested that today’s proposed rule should treat transitional 

sources differently, especially in light of the substantial 

redesign that meeting such the proposed standard would have and 

the impact that redesign would have on the schedule for a 

project that was nearly ready to commence construction. The 

transitional sources at issue are coal-fired EGUs that, absent 

special treatment, would be subject to the standard of 

performance proposed in this rulemaking. 

 

25 As mentioned elsewhere, the EPA held a series of listening 

sessions and allowed for a period of additional comment after 

announcing it was moving forward with development of new source 

performance standards for GHGs emitted from fossil fuel-fired 

EGUs. The term “commenters” here refers to those who commented 

during the listening sessions or during the subsequent comment 

period.
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In today’s proposed rulemaking, the EPA is not proposing a

standard of performance for transitional sources, which we 

define as sources that have been issued a PSD permit by the date 

of proposal (including sources that have approved permits that 

are in the process of being amended, if those sources are 

intending to install CCS as evidenced by participating in any of 

the DOE CCS funding programs, either loan guarantee or grant 

programs) and that commence construction within 12 months of the 

date of publication of this proposal in the Federal Register. 

Upon finalization of this rulemaking without a standard of 

performance applicable to these sources, they will not be 

treated as new sources subject to the specific limitations set 

forth in the final new source standards. These sources would 

remain obligated, by the terms of their permits, to construct 

and operate in accordance with their permits. In addition, these 

sources will be treated as existing sources and would be subject 

to any requirements that a State promulgates to meet its 

obligations under section 111(d). Sources that do not commence 

construction within 12 months of the date of this proposed 

action will be subject to this standard of performance for new 

sources. 

e. Requirements for Reconstructed Sources, and Rationale. The 

EPA’s CAA section 111 regulations provide that reconstructed 
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sources are to be treated as new sources and, therefore, subject 

to new source standards of performance. The regulations define 

reconstructed sources as, in general, existing sources (i) that 

replace components to such an extent that the capital costs of 

the new components exceed 50 percent of the capital costs of an 

entirely new facility, and (ii) for which compliance with 

standards of performance for new sources is technologically and 

economically feasible. 40 CFR 60.15. 

Historically, we believe that very few power plants have 

undertaken reconstructions. The EPA is not aware that any power 

plants are presently planning any project that could meet the 

requirements for a reconstruction. In light of this limited 

experience concerning reconstructions, we lack adequate 

information about the type of source; the type of changes; the 

extent of emissions increases; and the type of control measures, 

including their cost and emissions reductions,that we need to 

propose a standard of performance for reconstructions.

As a result, in today’s action, the EPA is not including a 

proposal for reconstructed units. Instead, we solicit comment on 

how we should approach reconstructions and, depending on the 

information we receive, we may propose and finalize a standard 

for reconstructions at a later time. 

6. Summary of Emissions Impacts, Costs and Benefits
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 Our IPM modeling, using Energy Information Administration 

(EIA) reference case assumptions, projects that there will be no 

construction of new coal-fired generation without CCS. In 

addition we examined a case with higher future electric demand 

and another case with higher future natural gas prices. We did 

not see any additional new construction of coal-fired generation

through 2030 in either of these cases. Under the relevant 

assumptions, we do not project that this rule will impose 

notable costs. 

We also examined a scenario with both increased future 

natural gas prices and increased future electric demand. In this 

sensitivity case we saw small amounts of coal-fired generation

being built in 2030. Even under this sensitivity analysis with 

small amounts of new coal generation under conditions of high 

natural gas prices and simultaneously high electricity demand in 

2030, we do not project that this proposed rule will impose 

notable costs upon sources. (See the RIA for further discussion 

of sensitivities). 

While this proposed rule also will not have direct impact 

on U.S. emissions of greenhouse gases under expected economic 

conditions, it provides assurance that emission rates from new 

fossil fuel-fired generation will not exceed the level of the 

standard and will send a strong signal both domestically and 
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internationally. Domestically, this proposed rule can further 

stimulate investment in CCS and other clean coal technologies, 

by making it clear that such technologies do provide a clear 

path forward for new coal-fired generating capacity. 

Internationally, this rule may encourage others to consider less 

GHG-intensive forms of power generation.