UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, DC. 20460



## JAN 1 22011

THE ADMINISTRATOR

The Honorable Debbie Stabenow United States Senate Washington, D.C. 20510

Dear Senator Stabenow:

Thank you for your recent letter about the way that carbon dioxide ("C02") emissions from biomass burning will be treated in Clean Air Act permitting ofconstructionprojects at large stationary sources. As you know, biomass canbe part ofa national strategy to reduce dependence onfossil fuels, and efforts are underway to foster the expansion ofrenewable
resources and promote biomass as ways ofaddressing climate change and enhancing forest management.

Last July, EPA solicited views from the public on approaches to accounting for C02 emissions from biomass and other biogenic sources, including whether some orall ofa source's biomass C02 emissions couldbe discounted based on a determination that they are canceled out by the C02 absorption associated with growing the fuel. EPA received information supporting the conclusion that certain biomass such as waste materials whose inevitable decomposition will result in greenhouse gas emissions anyway
- have only very limited climate impacts when combusted as fuel. EPA also, however, received information indicating that the use ofcertain otherbiomass as fuel could have more significant climate impacts.

InNovember, EPA announced that it was reviewing the public's comments with the goal ofdeciding whether the Clean Air Act would allow the use ofsome kind ofdiscounting system orothermethod reflecting the net impacts ofbiomass combustion in determining the applicability ofthe pre-constructionpermitting requirement to C02 emissions from biomassfired units. Your recent letter urges EPA to make a positive determination and to start a rulemaking promptly.

As ofJanuary 2, 2011, only those large stationary sources thattrigger the preconstruction permitting requirement for otherpollutants need to address greenhouse gases such
as C02. No source will be subject to the pre-construction permitting requirement solely because ofits greenhouse gas emissions until after July 1,2011. That is one result oftheTailoring Rule that EPA issued last year. With the approach ofJuly 1in mind, I am announcing today that, by that date, EPA will complete a rulemaking to defer for three years the application ofthe preconstruction permitting requirement to biomass and other biogenic C02 emissions.

Internet Address (URL) • httpllwww.epa.gov Recycled/Recyclable. Printed With Vegetable Oil Based Inks on 100% Postconsumer. Process Chlorine Free Recycled PaperThe purpose ofthe deferral is to give EPA time to effectuate a detailed examination of the science associated with biogenic C02 emissions and to considerthe technical issues that the agency must resolve in order to account for biogenic C02 emissions in ways that are scientifically sound and also manageable in practice.

EPA will ensure that partners within the federal government and scientists outside ofit withrelevant expertise play meaningful roles in the examination. Following the examination's completion, EPA will use its work product in establishing, by notice-and-commentrulemaking, the system for determining the applicability ofthe Clean Air Act's pre-constructionpermitting requirement to projects that result in biomass and otherbiogenic C02 emissions. EPA's intent is to ensure that boththe scientific examination and the resulting rulemaking are completedwithin the three-year deferral period mentioned above.

Concurrent with the proposal to defer application ofthe pre-construction permitting requirement (known as "Prevention ofSignificant Deterioration," or "PSD") to biomass and otherbiogenic C02 emissions, EPA intends to issue interim guidance to help permitting authorities establish a basis for concluding that the best available control technology (or "BACT," which is one ofthe statutory conditions for receiving a permit) for greenhouse gas emissions at such sources is simply combustion ofbiomass fuels. As noted above, underthe Tailoring Rule, as ofJanuary 2, 2011, large stationary sources that become subjectto PSD for other pollutants will needto address greenhouse gases such as C02. Ifsuch permits are issued before July 1,2011,then existingregulations mightrequire that the permits meet the BACT requirement for greenhouse gas emissions during an interim period oftime. In guidance issued last November, EPA explicitlyrecognized that a permitting authority might determine that certain types ofbiomass bythemselves are BACT for greenhouse gas emissions after considering the environmental, energy, and economicbenefits ofusing the fuel. EPA's supplemental guidance will provide abasis that permitting authorities may use to supportthe conclusion, during the interim period, that BACT for C02 at such sources is simplythe combustion ofbiomass fuel.

I hope you will see the steps described inthis letter as following through onmy prior commitmentto exercise whatever discretion the Clean AirAct affords to avoid discouraging the
use ofrenewable, domestically-produced fuel in powerplants and factories. Ifyou have additional questions, please do not hesitate to contact me orto have your staffcontact David McIntosh in EPA's Office ofCongressional and Intergovernmental Relations.