Proposal to Update CSAPR for the 2008 Ozone NAAQS

- Overview of National Proposed Rulemaking -

October 7, 2015

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Highlights

Background

• Context

• Stakeholder Engagement

• The Cross-State Air Pollution Rule (CSAPR) Framework

Applying the CSAPR Framework for the 2008 Ozone NAAQS

• Identifying Downwind Ozone Problems

• Linking Upwind States

• Quantifying Upwind Obligations

• Implementing Reductions via Regional Trading Program

Interaction with the July 2015 D.C. Circuit Opinion on CSAPR

Summary

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Briefing Outline

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Highlights

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The proposal addresses interstate air quality impacts with respect to 

the 2008 ozone National Ambient Air Quality Standards (NAAQS).

The EPA is proposing to address this air pollution problem by updating 

the existing Cross-State Air Pollution Rule (CSAPR) for this standard.

• The CSAPR framework is applied to identify Clean Air Act “good neighbor” obligations 

(i.e., statewide emissions limits).

• These limits would be implemented with the CSAPR allowance trading program.

Using the CSAPR framework, this action proposes to reduce electric 

generating unit (EGU) ozone season NOX emissions in 23 eastern 

states, starting with the 2017 ozone season.

• EGU NOXreductions that are available starting with the 2017 ozone season are a 

meaningful but partial solution to ozone transport.

The estimated benefits of the proposal are $700 million to $1.2 

billion annually for 2017 while the annualized cost of the 

proposal is $92 million (2011$).

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Highlights

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Background

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Context

Clean Air Act (CAA) section 110(a)(2)(D)(i)(I) requires states to prohibit 

emissions that will “contribute significantly” to NAAQS nonattainment 

downwind or “interfere with maintenance” of NAAQS downwind.

States and EPA need to address interstate transport for the 2008 ozone 

NAAQS.

• CSAPR addresses the 1997 ozone NAAQS and the 1997 and 2006 PM2.5 NAAQS

• On August 21, 2012, the D.C. Circuit issued the EME Homer City opinion holding, among 

other things, that states had no obligation to submit transport SIPs until EPA first 

quantified each state’s transport obligation.

• On April 29, 2014, the Supreme Court issued a decision reversing the D.C. Circuit’s EME 

Homer City opinion—reaffirming that transport SIPs were due in March 2011.

Near-term NOXreductions are needed to help downwind areas attain the 

2008 ozone NAAQS by the July 2018 moderate attainment date.

Some state efforts may lead to approvable SIPs, avoiding the need for a 

FIP, but the proposal is needed as a backstop.

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Stakeholder Engagement

On August 7, 2014, the EPA announced its plans for supporting state 

efforts to address interstate ozone transport for the 2008 NAAQS and for 

fulfilling its federal backstop role if necessary.

1. Provide information and guidance to states to encourage and facilitate development 

of approvable transport SIPs.

2. Issue findings of failure to submit transport SIPs for the 2008 ozone NAAQS.

3. Propose FIPs to quantify and address states’ transport obligation for the 2008 ozone 

NAAQS.

4. Approve ozone transport SIPs or finalize FIPs where we have authority (i.e., where 

states have failed to submit or EPA has disapproved ozone transport SIPs).

EPA summarized these plans on its air transport web page and has 

engaged with states, industry, tribes, and communities.

The proposal fulfills step 3 in this plan. We have previously taken actions 

that address steps 1 and 2.

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The CSAPR Framework

CSAPR’s framework builds on previous transport rules and court 

decisions (e.g., the NOX SIP Call and Clean Air Interstate Rule).

The CSAPR framework has four overarching steps:

Step 1: Identifying downwind areas that are expected to have problems 

attaining and/or maintaining the NAAQS.

Step 2: Determining which upwind states are “linked” to these downwind 

areas.

Step 3: Quantifying the level of upwind NOXreductions, apportioning 

upwind responsibility, and setting corresponding statewide 

emissions limits.

Step 4: Implementing reductions via a regional allowance trading program.

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Applying the CSAPR Framework for the 2008 Ozone NAAQS

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Aligning Analysis and Compliance 

with the NAAQS

The proposal aligns analysis and implementation with relevant attainment 

dates for the 2008 ozone NAAQS, as required by the D.C. Circuit’s 

decision North Carolina v. EPA. 

• EPA’s final 2008 Ozone NAAQS SIP Requirements Rule set July 2018 as the attainment 

deadline for ozone nonattainment areas currently designated as moderate, in accordance 

with the D.C. Circuit’s decision in NRDC v. EPA. 

• Because July 2018 falls during the 2018 ozone season, the 2017 ozone season will be 

the last full season from which data can be used to determine attainment by July 2018. 

We believe that North Carolina compels the EPA to identify upwind 

reductions and implementation programs to achieve these reductions, to 

the extent possible, starting with the 2017 ozone season.

We note that 2017 also is:

• Responsive to downwind state desires to put reductions in place quickly.

• Timely to address the D.C. Circuit’s remand of certain CSAPR NOX ozone-season phase 

2 emissions budgets.

• A factor in the proposal’s partial solution for ozone transport.

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Step 1: Identifying Downwind 

Ozone Problems

The proposal identifies two categories of downwind ozone problems, 

nonattainment and maintenance.

Nonattainment receptors are air quality monitors that are expected to 

exceed the NAAQS.

• Identified as monitors that currently measure nonattainment and that have a projected 

average design value exceeding the NAAQS in 2017.

• This approach was used in the NOX SIP Call and CAIR and was affirmed as reasonable 

by the D.C. Circuit in North Carolina.

Maintenance receptors are air quality monitors that are at risk of 

exceeding the NAAQS.

• Identified as monitors with a projected maximum design value that exceeds the NAAQS in 

2017 even if not currently measuring nonattainment.

• CSAPR defined maintenance receptors in this way with respect to the 1997 ozone and 

standard and the PM2.5 standards. The D.C. Circuit declined to upset this approach in the 

CSAPR litigation.

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Step 2: “Linking” Upwind States

The proposal 

maintains the 

CSAPR threshold of 

1% of the NAAQS to 

determine which 

upwind states are 

“linked” to downwind 

nonattainment and 

maintenance 

receptors.

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Step 3: Quantifying Upwind 

Obligations

The proposal quantifies upwind obligations to reduce interstate ozone 

transport in the East.

• There may be additional criteria to evaluate regarding collective contribution of 

transported air pollution in the west.

• This focus does not relieve western states of obligations to address interstate 

transport, which these states can work with EPA to evaluate on a case-by-case basis.

The proposal does not quantify non-EGU emission reductions 

• EPA is less certain that significant NOX mitigation is achievable from non-EGUs for the 

2017 ozone season. We will continue to evaluate whether non-EGU emission 

reductions can be achieved on a longer time-frame at a future date. 

The proposal would promulgate state-level EGU emissions budgets 

(statewide limits on allowable emissions) reflecting NOX mitigation that 

is cost-effective at a uniform cost of $1,300 per ton.

• Analysis demonstrates that this level does not over-control EGUs in these states, per 

Supreme Court and D.C. Circuit opinions on CSAPR.

• The proposal takes comment on more and less stringent EGU emissions budgets 

reflecting uniform costs of $3,400 per ton and $500 per ton, respectively. 13

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Step 4: Implementing Reductions via 

Regional Trading Program

The proposal uses CSAPR’s NOX ozone season trading program to 

implement the updated emissions budgets.

• CSAPR’s assurance provisions allow limited interstate trading to provide flexibility 

while ensuring that reductions occur within each upwind state.

The proposal seeks comment on a range of options related to 

transitioning the existing CSAPR NOX ozone-season trading program to 

address ozone transport for the lower 2008 ozone NAAQS.

• Use of banked 2015 and 2016 vintage allowances.

• Use of allowances issued in a non-updated state (i.e., Georgia) for compliance in an 

updated state.

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On July 28, 2015, the D.C. Circuit issued its opinion largely upholding 

CSAPR and keeping the rule in place. 

This opinion remanded to EPA (without vacatur) several states’ CSAPR 

phase 2 (i.e., 2017) emissions budgets due to “over-control.”

• NOX ozone-season budgets for 10 states, which the court held were not necessary.

• The NOX ozone-season budget for Texas, which the court held to be over-control.

• SO2 annual budgets for Texas, Alabama, Georgia, and South Carolina, which the 

court held to be over-control.

The proposal would replace the invalidated NOX ozone-season phase 2 

emissions budgets for 9 states and remove 2 states from the CSAPR 

NOX ozone-season trading program.

• The proposal addresses “over-control” issues identified by the Court for all covered 

states.

The proposal does not address the remand of the CSAPR SO2 annual 

phase 2 emissions budgets, which will be addressed separately. 15

Interaction with the July 2015 D.C. 

Circuit Opinion on CSAPR

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The proposal updates CSAPR to reduce EGU ozone season NOX

emissions in 23 eastern states that affect the ability of downwind areas 

to attain or maintain the 2008 ozone NAAQS, starting with the 2017 

ozone season.

In doing so, the proposal also responds to the July 28, 2015 remand by 

the D.C. Circuit of certain states’ CSAPR NOX ozone-season emissions 

budgets.

The estimated benefits of the proposal are $700 million to $1.2 billion 

annually for 2017 (2011$).

The annualized cost of the proposal is $92 million (2011$).

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Summary

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