6560.50

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51, 52, 70, and 71

[EPA-HQ-OAR-2011-0083; FRL- ]

RIN 2060-AQ79

Deferral for CO2 Emissions from Bioenergy and Other Biogenic 

Sources under the Prevention of Significant Deterioration 

(PSD) and Title V Programs: Final Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final Rule.

SUMMARY: This action defers for a period of three (3) years 

the application of the Prevention of Significant 

Deterioration (PSD) and Title V permitting requirements to 

biogenic carbon dioxide (CO2) emissions from bioenergy and 

other biogenic stationary sources. This action is being 

taken as part of the process of granting the Petition for 

Reconsideration filed by the National Alliance of Forest 

Owners (NAFO) on August 3, 2010, related to the PSD and 

Title V Greenhouse Gas Tailoring Rule. The result of this 

action is that during this three year period biogenic CO2

emissions are not required to be counted for applicability 

purposes under the PSD and Title V permitting programs. 

State, local, and tribal permitting authorities may adopt 

the deferral at their option but the deferral is effective 
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upon publication for the PSD and Title V permit programs 

that are implemented by EPA.

DATES: This action is effective on [INSERT THE DATE OF 

PUBLICATION IN THE FEDERAL REGISTER]. 

ADDRESSES: EPA has established a docket for this rulemaking 

under Docket ID No. EPA–HQ–OAR–2011-0083. All documents in 

the docket are listed in the http://www.regulations.gov

index. Although listed in the index, some information is 

not publicly available, e.g., confidential business 

information (CBI) or other information whose disclosure is 

restricted by statute. Certain other material, such as 

copyrighted material, will be publicly available only in 

hard copy. Publicly available docket materials are 

available either electronically at 

http://www.regulations.gov

FOR FURTHER INFORMATION CONTACT: Carole Cook, Climate 

Change Division, Office of Atmospheric Programs (MC–6207J), 

Environmental Protection Agency, 1200 Pennsylvania Ave., 

or in hard copy at the Air 

Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution 

Ave., NW., Washington, DC. This Docket Facility is open 

from 8:30 a.m. to 4:30 p.m., Monday through Friday, 

excluding Federal holidays. The telephone number for the 

Public Reading Room is (202) 566–1744, and the telephone 

number for the Air Docket is (202) 566–1742.
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NW., Washington, DC 20460; telephone number: (202) 343–

9334; fax number: (202) 343–2342; e-mail address: 

biodeferralPSD@epa.gov

SUPPLEMENTARY INFORMATION: 

. 

Regulated Entities

Table 1. Examples of Affected Entities by Category

. The 

Administrator determined that this action is subject to the 

provisions of Clean Air Act (CAA) section 307(d). See CAA 

section 307(d)(1)(V) (the provisions of section 307(d) 

apply to "such other actions as the Administrator may 

determine"). These are final amendments to existing 

regulations. This action applies to stationary sources that 

emit biogenic CO2. 

Category NAICS Examples of affected facilities

Biomass 

combustion

221 Electric utilities burning 

biomass fuels.

321 Wood products manufacturing, 

and wood pellet fuel 

manufacturing.

322 Pulp and paper manufacturing.

Municipal 

solid waste 

combustion

562213 Solid waste combustors and 

incinerators.

Sources/users 

of biogas

112 Animal production manure 

management operations.

221320 Sewage treatment facilities. 

562212 Solid waste landfills.

Fermentation 

processes

325193 Ethanol manufacturing.

325411 Medicinal and botanical 

manufacturing.
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Category NAICS Examples of affected facilities

Other 311/312 Food/Beverage processors 

burning agricultural biomass 

residues, using fermentation 

processes, or producing/using 

biogas from anaerobic digestion 

of waste materials. 

Table 1 of this preamble lists the types of entities 

that potentially could be affected by the deferral covered 

by this action. This list is not intended to be exhaustive, 

but rather provides a guide for readers regarding 

facilities likely to be affected by this action. Note that 

this rule does not make or infer any policy determination 

on the part of EPA whether any emissions from any of these 

sources may be determined "fugitive" emissions for the 

purposes of accounting and applicability under air 

permitting requirements. Such determinations are not within 

the scope of this rule and are part of the case-by-case 

application and review process established under the 

regulations covering these permitting requirements. If you 

have questions regarding the applicability of this action 

to a particular facility, consult the person listed in the 

"FOR FURTHER INFORMATION CONTACT" section of this preamble.

What is the effective date? The final rule is 

effective on [INSERT THE DATE OF PUBLICATION IN THE FEDERAL 

REGISTER]. Section 553(d) of the Administrative Procedure 
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Act (APA), 5 U.S.C. Chapter 5, generally provides that 

rules may not take effect earlier than 30 days after they 

are published in the Federal Register. EPA is issuing this 

final rule under section 307(d)(1) of the Clean Air Act, 

which states: "The provisions of section 553 through 557 

*** of Title 5 shall not, except as expressly provided in 

this section, apply to actions to which this subsection 

applies." Thus, section 553(d) of the APA does not apply to 

this rule. EPA is nevertheless acting consistently with the 

purposes of the underlying APA section 553(d) in making 

this rule effective on [INSERT THE DATE OF PUBLICATION IN 

THE FEDERAL REGISTER]. Section 5 U.S.C. 553(d)(3) allows an 

effective date less than 30 days after publication "as 

otherwise provided by the agency for good cause found and 

published with the rule." As explained below, EPA finds 

that there is good cause for this rule to become effective 

on [INSERT THE DATE OF PUBLICATION IN THE FEDERAL 

REGISTER], even through this results in fewer than 30 days 

from the date of publication in the Federal Register.

EPA announced its intent to undertake this rulemaking 

on January 12, 2011, in order to provide the Agency time to 

conduct a detailed examination of the science and technical 

issues associated with biogenic CO2 emissions from 

stationary sources. The Agency intended to complete the 
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rulemaking before sources would be subject to the PSD and 

Title V programs for GHG emissions because at that time it 

was possible that a source could be subject to those 

requirements based on biogenic CO2 emissions. The Agency 

determined it could be burdensome for both permitting 

authorities and sources to assess those emissions until our 

detailed examination was complete. In a January 12, 2011, 

letter to several members of Congress, the Administrator 

wrote, "No source will be subject to the pre-construction 

permitting requirement solely because of its greenhouse gas 

emissions until after July 1, 2011.... With the approach of 

July 1 in mind, I am announcing today that, by that date, 

EPA will complete a rulemaking to defer for three years the 

application of the pre-construction permitting requirement 

to biomass and other biogenic CO2 emissions."

One purpose of the 30-day waiting period prescribed in 

5 U.S.C. 553(d) is to give affected parties a reasonable 

time to adjust their behavior and prepare before the final 

rule takes effect. Whereas here, the affected parties are 

anticipating this rule and requesting the flexibility it 

provides, and any delay in its effectiveness will result in 

uncertainty in the permitting process. In order to ensure 

that the final rule is available to the public by July 1, 

2011, the final rule will be signed and made available on 
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the EPA web site. Publication may follow one to two weeks 

after that date. A shorter effective date is also 

consistent with the purposes of APA section 553(d)(1), 

which provides an exception for any action that grants or 

recognizes an exemption or relieves a restriction. Here, 

this action relieves a burden because it defers the 

applicability of the PSD and Title V permitting 

requirements for biogenic stationary sources for a period 

of three years. Accordingly, we find good cause exists to 

make this rule effective on [INSERT THE DATE OF PUBLICATION 

IN THE FEDERAL REGISTER], consistent with the purposes of 5 

U.S.C. 553(d)(1) and (3).

Judicial Review. Under section 307(b)(1) of the CAA, 

judicial review of this final rule is available only by 

filing a petition for review in the U.S. Court of Appeals 

for the District of Columbia Circuit (the Court) by [INSERT 

DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL 

REGISTER]. Under CAA section 307(d)(7)(B), only an 

objection to this final rule that was raised with 

reasonable specificity during the period for public comment 

can be raised during judicial review. CAA section 

307(d)(7)(B) also provides a mechanism for EPA to convene a 

proceeding for reconsideration, "[i]f the person raising an 

objection can demonstrate to EPA that it was impracticable 
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to raise such objection within [the period for public 

comment] or if the grounds for such objection arose after 

the period for public comment (but within the time 

specified for judicial review) and if such objection is of 

central relevance to the outcome of the rule." Any person 

seeking to make such a demonstration to us should submit a 

Petition for Reconsideration to the Office of the 

Administrator, Environmental Protection Agency, Room 3000, 

Ariel Rios Building, 1200 Pennsylvania Ave., NW., 

Washington, DC 20460, with a copy to the person listed in 

the preceding FOR FURTHER INFORMATION CONTACT section, and 

the Associate General Counsel for the Air and Radiation Law 

Office, Office of General Counsel (Mail Code 2344A),

Environmental Protection Agency, 1200 Pennsylvania Ave., 

NW., Washington, DC 20004. Note, under CAA section 

307(b)(2), the requirements established by this final rule 

may not be challenged separately in any civil or criminal 

proceedings brought by EPA to enforce these requirements.

Acronyms and Abbreviations. The following are acronyms 

and abbreviations of terms used in this preamble.

BACT best available control technology

BAU business as usual

CAA Clean Air Act

CBI confidential business information

CFI Call for Information

CFR Code of Federal Regulations
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CH4 methane

CO2 carbon dioxide

CO2e carbon dioxide equivalents

EO Executive Order

EPA U.S. Environmental Protection Agency

FR Federal Register

GHG/GHGs greenhouse gas/greenhouse gases

GWP global warming potential

LULUCF Land-Use, Land-Use Change and Forestry

MSW municipal solid waste

NAFO National Alliance of Forest Owners

NAAQS National Ambient Air Quality Standards

NOX nitrogen oxides

NSPS New Source Performance Standards

NSR New Source Review

NTTAA National Technology Transfer and Advancement Act 

of 1995

PSD Prevention of Significant Deterioration

PTE potential to emit

RFA Regulatory Flexibility Act

SAB Science Advisory Board

SILs significant impact levels

SIP State Implementation Plan

SMCs significant monitoring concentrations

tpy tons per year

U.S. United States

UMRA Unfunded Mandates Reform Act

UNFCCC United Nations Framework Convention on Climate 

Change

Outline

I. Background

. The information presented in this preamble is 

organized as follows:

II. Summary of Final Action 

A. Overview of the Final Rule

B. Legal Authority

C. Facilities Permitted During Deferral

D. Mechanism for Deferral and State Implementation

III. Response to Public Comments

A. Overview of Public Comments

B. Comments on the Deferral

C. Comments on Science, Accounting, and Economic Issues

D. Comments on PSD, Title V and the Tailoring Rule 
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E. Comments on the Interim Guidance 

IV. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory Planning and Review 

and Executive Order 13563: Improving Regulation and 

Regulatory Review 

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act (UMRA)

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination 

with Indian Tribal Governments

G. Executive Order 13045: Protection of Children from 

Environmental Health Risks and Safety Risks

H. Executive Order 13211: Actions that Significantly Affect 

Energy Supply, Distribution, or Use

I. National Technology Transfer and Advancement Act

J. Executive Order 12898: Federal Actions to Address 

Environmental Justice in Minority Populations and LowIncome Populations

K. Congressional Review Act

I. Background

On June 3, 2010, EPA published the final Prevention of 

Significant Deterioration (PSD) and Title V Greenhouse Gas 

Tailoring Rule (herein referred to as the Tailoring Rule; 

75 FR 31514), setting thresholds for GHG emissions that 

define when permits under these programs are required for 

new and existing industrial facilities. Beginning January 

2, 2011, sources currently subject to PSD or Title V 

permitting programs were required to determine the best 

available control technology (BACT) for their GHG 

emissions, but only for GHG increases of 75,000 short tons 

per year (tpy) or more of total GHGs, on a carbon dioxide 

equivalents (CO2e) basis and any increase on a mass basis. 
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At that time, no sources would be subject to CAA permitting 

requirements due solely to GHG emissions. 

Beginning July 1, 2011, the PSD permitting 

requirements will for the first time cover new construction 

projects that will emit GHGs of at least 100,000 tpy on a 

CO2e basis even if they do not exceed the permitting 

thresholds for any other pollutant. Modifications at 

existing facilities that increase GHG emissions by at least 

75,000 tpy, or any amount on a mass basis, will be subject 

to permitting requirements, even if they do not 

significantly increase emissions of any other pollutant. 

Operating permit requirements will, for the first time, 

apply to sources based on their GHG emissions even if they 

would not apply based on emissions of any other pollutant. 

Facilities that emit at least 100,000 tpy CO2e will be 

subject to Title V permitting requirements.

As discussed in the final Tailoring Rule, EPA decided 

not to provide exemptions from applicability determinations 

(major source and major modification) under PSD and Title V

for certain GHG emission sources, including biogenic 

emissions. EPA decided instead to address the need for 

tailoring through a uniform threshold-based approach, 

rather than through a collection of various specific 

exclusions. At that time, EPA also noted that it planned to 
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seek further comment on how it might address biogenic CO2

emissions under the PSD and Title V programs through a 

future action.

On July 15, 2010, EPA published a Call for Information 

(CFI) to solicit information and viewpoints from interested 

parties on approaches to accounting for GHG emissions from 

bioenergy and other biogenic sources (75 FR 41173). The 

purpose of this CFI was to request comment on possible 

accounting approaches for biogenic CO2 emissions under the 

PSD and Title V programs, as well as to receive data 

submissions about these sources and their GHG emissions, 

general technical comments on accounting for these 

emissions, and comments on the underlying science that 

should inform any such accounting approach.

On August 3, 2010, NAFO petitioned the EPA to 

reconsider and stay the implementation of the PSD and Title 

V GHG Tailoring Rule. The petition alleged that the final 

Tailoring Rule declared, for the first time and without any 

prior proposal or notice to industry, that EPA would count 

CO2 emissions from combustion of biomass toward the 

applicability thresholds established for the PSD and Title 

V permitting programs of the CAA. Petitioners further 

alleged that EPA’s proposed rule had provided for the 

appropriate and opposite conclusion: that CO2 emissions from 
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combustion of biomass should not be counted. Petitioners 

stated that there is near-universal recognition that CO2

emitted from combustion of fuels derived from biomass 

should be excluded from GHG regulations because production 

and combustion of such fuels do not increase atmospheric CO2

levels. Pending reconsideration, petitioners requested that 

the application of the PSD and Title V permitting programs 

to emissions of CO2 from biomass be stayed.

We considered carefully the petitioners’ assertions 

and noted that we also received comments through the CFI 

supporting the exclusion of biogenic CO2 from stationary 

source permitting requirements. Through the CFI, however, 

EPA also received information supporting the position that 

biogenic CO2 should not be excluded from permitting 

programs, and that the use of certain types of biomass as 

fuel could increase atmospheric CO2 levels. Based on 

consideration of the petitioners’ arguments, together with 

the weight of the comments received through the CFI, EPA 

concluded that the issue of accounting for the net 

atmospheric impact of biogenic CO2 emissions is complex 

enough that further consideration of this important issue 
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is warranted. Therefore, EPA granted the NAFO petition on 

January 12, 2011.1

On January 12, 2011, EPA also announced in letters to 

Members of Congress and NAFO its intent to take a number of 

steps to address the issues associated with biogenic CO2

emissions from stationary sources. Pursuant to this 

announcement, on March 21, 2011, EPA published a notice of 

proposed rulemaking to defer for three years the 

application of the PSD and Title V permitting requirements 

to biogenic CO2 emissions from stationary sources (76 FR 

15249). Concurrent with this rulemaking, EPA also issued 

interim guidance entitled, "Guidance for Determining Best 

Available Control Technology for Reducing Carbon Dioxide 

Emissions from Bioenergy Production" to help permitting 

authorities establish a basis for concluding that under the 

PSD Program the combustion of biomass fuels can be 

considered BACT for biogenic CO2 emissions at stationary 

sources until such time as the deferral becomes effective. 

During the three-year deferral period, EPA will conduct a 

detailed examination of the science associated with 

biogenic CO2 emissions from stationary sources, including 

engaging with federal partners, technical experts, and an 

independent scientific panel to consider technical issues. 

 

1

http://www.epa.gov/NSR/actions.html#mar11
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Based on the feedback from the scientific and technical 

review, EPA will then undertake a rulemaking to determine 

how biogenic CO2 emissions should be treated and accounted 

for in PSD and Title V permitting.

On April 27, 2011, EPA’s Science Advisory Board (SAB) 

published a notice soliciting experts for a peer review of 

EPA’s science and technical work on biogenic CO2 emissions.

76 FR 23587. EPA intends to provide its study that examines 

the science and technical issues associated with biogenic 

CO2 emissions from stationary sources and accompanying 

accounting framework to the SAB for peer review later in 

2011.

II. Summary of Final Action

A. Overview of the Final Rule

This action defers for a period of three (3) years 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 applicability thresholds, 

including those for the application of BACT. 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. This deferral 
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applies only to biogenic CO2 emissions and does not affect 

non-GHG pollutants or other GHGs (e.g., methane (CH4) and 

nitrous oxide (N2O)) emitted from the combustion of biomass 

fuel. Also, this deferral only pertains to biogenic CO2

emissions in the PSD and Title V programs and does not 

pertain to any other EPA programs such as the GHG Reporting 

Program.

EPA recognizes that use of certain types of biomass 

can be part of the national strategy to reduce dependence 

on fossil fuels, efforts are underway at the federal, state 

and regional level to foster the expansion of renewable 

resources and promote bioenergy projects when they are a 

way to address climate change, increasing domestic 

alternative energy production, enhancing forest management 

and creating related employment opportunities. We believe 

part of fostering this development is to ensure that those 

feedstocks with negligible net atmospheric impact not be 

subject to unnecessary regulation. At the same time, it is 

important that EPA have time to conduct its detailed 

examination of the science and technical issues related to 

accounting for biogenic CO2 emissions and therefore have 

finalized this deferral. 

This deferral is intended to be a temporary measure, 

in effect for no more than three years, to allow the Agency 
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time to complete its work and determine what, if any, 

treatment of biogenic CO2 emissions should be in the PSD and 

Title V programs. This 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 this rulemaking and become 

effective in fewer than three years.

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, 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 tirederived fuel; and
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• CO2 derived from combustion of biological material, 

including all types of wood and wood waste, forest 

residue, and agricultural material.

For stationary sources co-firing fossil fuel and 

biologically-based fuel, and/or combusting mixed fuels 

(e.g., tire-derived fuels, municipal solid waste (MSW)), 

the biogenic CO2 emissions from that combustion are included 

in this deferral. However, the fossil CO2 emissions are not. 

Emissions of CO2 from processing of mineral feedstocks 

(e.g., calcium carbonate) are also not included in this 

deferral. Various methods are available to calculate both 

the biogenic and fossil portions of CO2 emissions, including 

those methods contained in the GHG Reporting Program (40 

CFR Part 98). Consistent with the other pollutants in PSD 

and Title V, there are no requirements to use a particular 

method in determining your biogenic and fossil CO2

emissions.

1. Applicability of PSD and Title V to Biogenic CO2

Emissions From Major Stationary Sources

B. Legal Authority

As currently written, the PSD and Title V regulations 

apply to biogenic CO2 emissions from major sources or major 

modifications at such sources according to the limitation 

included under the definition of "subject to regulation" in 

the State Implementation Plan (SIP) regulations at 40 CFR 
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51.166 and the Title V state program regulations at 40 CFR 

70.2, as well as the Federal Implementation Plan 

requirements at 40 CFR 52.21 and the Title V Federal 

program regulations at 40 CFR 71.2. Thus, revisions to 

these regulations are necessary to defer application of the 

PSD and Title V programs to such sources of biogenic CO2.

Stationary sources of air pollutants, including 

sources of biogenic CO2 emissions, are currently subject to 

PSD requirements if they emit more than 100 or 250 tpy of a 

regulated NSR pollutant other than GHGs and have triggered 

PSD as a result of these emissions, subject to the 

permitting thresholds established in the Final Tailoring 

Rule described below. The 100/250 tpy thresholds previously 

described originate from section 169 of the CAA, which 

applies PSD to any "major emitting facility" and defines 

the term to include any source with a potential to emit

(PTE) "any air pollutant" in an amount over 100 or 250 tpy, 

depending on source category. 

EPA’s long-standing regulations limit the PSD 

applicability provision that refers to "any air pollutant"

to refer to any "regulated NSR pollutant," which in turn 

includes any air pollutant "subject to regulation" under 

the CAA. Similarly, under sections 165(a)(4) and 169(3) of 

the CAA, the BACT requirement applies to "each pollutant 
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subject to regulation" under the CAA. As noted in other 

recent EPA actions, GHGs are currently "subject to 

regulation" under the CAA; subject, for PSD purposes, to 

specific limitations reflected in the definition of that 

term that EPA adopted in the Tailoring Rule. Thus, 

emissions of GHGs (including CO2) must be considered in 

determining whether a source is a major emitting facility 

subject to PSD, as a result of construction or 

modification, and whether the BACT requirement applies to 

GHGs (including CO2 as a component of GHGs). In light of the 

way these regulations are currently written, EPA is unable 

to exclude biogenic CO2 emissions from PSD review without 

amending the regulations.

With respect to Title V, as noted previously, Title V

applies to sources, among others, that emit 100 tons per 

year of specified quantities of "any air pollutant," see 

CAA section 502(a), 501(2)(B) and 302(g). 

2. Tailoring Rule

a. Rationale and Requirements

In the Tailoring Rule, EPA codified its interpretation 

that "subject to regulation" only extends to major sources 

of air pollutants subject to a requirement for actual 

control of the quantity of emissions of that pollutant, and 

that such a control requirement has taken effect and is 
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operative to control, limit or restrict the quantity of 

emissions of that pollutant released from the regulated 

activity, see 75 FR at 31606-07, and further defined 

"subject to regulation" such that GHGs are only "subject to 

regulation" under certain circumstances defined in the 

Tailoring Rule.

In the Tailoring Rule, EPA recognized that if the 

applicability provisions of the PSD and Title V programs 

were applied literally so that PSD and Title V requirements 

applied to GHG-emitting sources at the 100/250 tpy levels 

provided in the CAA, then the permitting authorities would 

be overwhelmed by the large numbers of permittees and many 

small sources would be unduly encumbered by the permitting 

demands. In light of those impacts, EPA concluded that, as 

a legal matter, Congress did not intend that the PSD and 

Title V applicability requirements be applied literally to 

all sources emitting GHGs over the major source thresholds 

as of January 2, 2011, the date by which EPA determined 

that GHGs become subject to regulation under the CAA as a 

result of the motor vehicle rule. Instead, EPA concluded 

that it is authorized to tailor those applicability 

requirements to apply PSD and Title V to such sources in a 

phased-in manner, starting with the largest sources first.
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Specifically, in the Tailoring Rule, EPA has 

implemented these PSD and Title V applicability provisions 

by applying the familiar two-step framework for 

interpreting administrative statutes recognized by the 

Supreme Court in Chevron U.S.A. Inc. v. NRDC

Under 

, 467 U.S. 837 

(1984), taking into account certain legal doctrines. Those 

doctrines, insofar as relevant to the Tailoring Rule, are 

(1) the "absurd results" doctrine, which authorizes 

agencies to apply statutory requirements differently than a 

literal reading would indicate, as necessary to effectuate 

congressional intent and avoid absurd results; (2) the 

"administrative necessity" doctrine, which authorizes 

agencies to apply statutory requirements in a way that 

avoids impossible administrative burdens; and (3) the "onestep-at-a-time" doctrine, which authorizes agencies to 

implement a regulatory scheme in a deliberate, step-wise 

fashion. See 75 Fed. Reg. at 31541-31579.

Chevron, the agency must, at step 1, determine 

whether Congress’ intent as to the specific matter at issue 

is clear, and, if so, the agency must give effect to that 

intent. 467 U.S. at 842. If congressional intent is not 

clear, then, at step 2, the agency has discretion to 

fashion an interpretation that is a reasonable construction 

of the statute. 467 U.S. at 865. To determine congressional 
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intent, the agency must first consider the words of the 

statutory requirements, and if their literal meaning 

answers the question at hand, then, in most cases, the 

agency must implement those requirements by those terms. 

However, under the "absurd results" doctrine, the 

literal meaning of statutory requirements should not be 

considered to indicate congressional intent if that literal 

meaning would produce a result that is senseless or that is 

otherwise inconsistent with — and especially one that 

undermines — underlying congressional purpose. In these 

cases, if congressional intent for how the requirements 

apply to the question at hand is clear, the agency should 

implement the statutory requirements not in accordance with 

their literal meaning, but rather in a manner that most 

closely effectuates congressional intent. If congressional 

intent is not clear, then an agency may select an 

interpretation that is reasonable under the statute. 

Under the "administrative necessity" doctrine, 

Congress is presumed, at Chevron step 1, to intend that its 

statutory directives to agencies be administrable, and not 

to have intended to have written statutory requirements 

that are impossible to administer. Therefore, under this 

doctrine, an agency may depart from statutory requirements 

that, by their terms, are impossible to administer, but the 
 Page 24 of 104

agency may depart no more than necessary to render the 

requirements administrable. 

In addition to the "absurd results" and 

"administrative necessity" doctrines, another judicial 

doctrine supports at least part of EPA’s Tailoring Rule, 

and that is the doctrine that agencies may implement 

statutory mandates one step at a time, which we will call 

the "one-step-at-a-time" doctrine. The U.S. Supreme Court 

recently described the doctrine in Massachusetts v. EPA

In the Tailoring Rule, EPA closely considered the 

burdens to the permitting authorities of applying PSD and 

Title V to GHG-emitting sources. For example, EPA 

calculated, on a national basis, the workload that GHG 

permit applications would entail, and compared that to the 

existing workload of permitting authorities. EPA concluded 

that permitting authorities would be overwhelmed by permit 

applications if the PSD and Title V applicability 

, 

549 U.S. 497, 524 (2007), as follows: "Agencies, like 

legislatures, do not generally resolve massive problems in 

one fell regulatory swoop;" and instead they may 

permissibly implement such regulatory programs over time, 

"refining their preferred approach as circumstances change 

and as they develop a more nuanced understanding of how 

best to proceed."
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thresholds were applied literally as of January 2, 2011, to 

the GHG emissions from stationary sources. In addition, EPA 

calculated the cost to the sources of permitting 

requirements and concluded that many small sources would 

become subject to unduly high expenses. 

Accordingly, in applying the Chevron

Accordingly, in the Tailoring Rule, EPA established 

two steps to implement PSD and Title V. At step 1, 

beginning January 2, 2011, sources currently subject to PSD 

analytical 

framework, in conjunction with the absurd results and 

administrative necessity doctrines, EPA concluded that 

Congress intended that PSD and Title V apply to the GHG

emissions from stationary sources, but that, in light of 

the burdens to the permitting authority and the costs to 

the sources of determining applicability of permitting 

requirements by applying the statutory thresholds to GHG 

emissions, the application of the permitting programs 

should be phased in, starting with the largest sources of 

GHG emissions first. EPA also concluded that the 

calculation for determining which sources emit the 

"largest" amount of GHG emissions should be based on the 

amount of GHG pollutant emitted in tons per year, weighted 

by the global warming potential (GWP) of the particular GHG 

pollutant. 
 Page 26 of 104

or Title V permitting programs were required to determine 

the BACT for their GHG emissions, but only for GHG 

increases of 75,000 short tons per year (tpy) or more of 

total GHGs, on a CO2e basis and any increase on a mass 

basis. At that time, no sources would be subject to CAA 

permitting requirements due solely to GHG emissions. At 

step 2, beginning July 1, 2011, the PSD permitting 

requirements will for the first time cover new construction 

projects that will emit GHG emissions of at least 100,000 

tpy on a CO2e basis (and 250 tons on a mass basis) even if 

they do not exceed the permitting thresholds for any other 

pollutant. Modifications at existing facilities that emit 

at that level and increase GHG emissions by at least 75,000 

tpy CO2e and by any amount on a mass basis will be subject 

to permitting requirements, even if they do not 

significantly increase emissions of any other pollutant. 

In addition, EPA committed to promulgate by July 1, 

2012, another rulemaking — in effect, step 3 of the 

Tailoring Rule — that would consider whether to reduce the 

thresholds further. EPA also committed to promulgate 

another rulemaking after that, by April 1, 2016, that would 

consider still further action. As EPA stated in the 

Tailoring Rule, part of the purpose of the phase-in 

approach embodied in the Tailoring Rule is to allow 
 Page 27 of 104

permitting authorities time to acquire additional resources 

and to allow EPA time to develop streamlining methods and 

thereby enable the application of PSD and Title V to more 

sources in subsequent rulemakings. 

As noted previously, in the Tailoring Rule, EPA 

determined that the amount of each GHG emitted by a 

facility should be calculated by reference to the weight of 

the GHG emissions, in tons of CO2e per year for determining 

if GHGs were "subject to regulation" for a particular 

facility and project. The Tailoring Rule proposal 

referenced EPA's Inventory of U.S. Greenhouse Gas Emissions 

and Sinks (Inventory)2

 

2

“Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2008,” U.S. 

Environmental Protection Agency, EPA 430–R–10–006 (April 15, 2010). 

submitted annually to the United 

Nations Framework Convention on Climate Change (UNFCCC), 

for the applicable GWP values and guidance on how to 

calculate a source’s GHG emissions in tpy CO2e. 75 FR 31514-

31608. The Inventory includes emissions of the six GHGs in 

terms of CO2e units. By linking the calculation of CO2e for 

GHGs to GWP values, a facility could evaluate its total GHG 

emissions contribution based on a single metric. We 

solicited comment on the benefits and limitations of this 

proposed metric. 

http://www.epa.gov/climatechange/emissions/usinventoryreport.html
 Page 28 of 104

While we referred to the Inventory for GWP 

identification purposes only, several commenters appeared 

to misunderstand our intent, claiming that the Inventory 

excludes CO2 emitted from biomass. These commenters 

requested that, in calculations of emissions for 

determining applicability of PSD and Title V, EPA exempt 

emissions from biogenic activities or biomass combustion or 

oxidation activities, including solid waste landfills, 

waste-to-energy projects, fermentation processes, 

combustion of renewable fuels, ethanol manufacturing, 

biodiesel production, and other alternative energy 

production that uses biomass feedstocks (e.g., crops or 

trees). In particular, these commenters urged that EPA 

exclude emissions from biomass combustion in determining 

the applicability of PSD to such sources based on the 

notion that such combustion is "carbon neutral" (i.e., that 

combustion or oxidation of such materials would cause no 

net increase in GHG emissions on a lifecycle basis).

b. Treatment of Biogenic Emissions

In response, when finalizing the Tailoring Rule, we 

acknowledged the role that biomass or biogenic fuels and 

feedstocks could play in reducing anthropogenic GHG 

emissions, and did not dispute the commenters’ observations 

that many state, Federal, and international rules and 
 Page 29 of 104

policies treat biogenic and fossil sources of CO2 emissions 

differently (75 FR 31514). Regarding commenters’ claims 

that the Inventory excludes CO2 emissions from biomass, EPA 

noted that the Inventory does not exclude these emissions 

(see section II.A.2 of the preamble to the proposed 

deferral rule). Rather, they are included in the Land-Use, 

Land-Use Change and Forestry (LULUCF) Sector rather than 

the Energy Sector to avoid double-counting at the national 

scale. The narrow reference to the use of the Inventory’s 

GWP values for estimating GHG emissions was provided to 

offer consistent guidance on how to calculate these 

emissions and not as an indication, direct or implied, that 

biomass emissions would be excluded from permitting 

applicability merely by association with the national 

inventory, see 74 FR 55351, under the definition for 

"carbon dioxide equivalent."

We determined that our application of the "absurd 

results," "administrative necessity," and one-step-at-atime legal rationales supporting the Tailoring Rule, based 

on the expected overwhelming permitting burdens in its 

absence, did not provide sufficient basis to exclude 

emissions of CO2 from biogenic sources in determining 

permitting applicability provisions at that time. We 

reasoned that such an exclusion alone, while reducing 
 Page 30 of 104

burdens for some sources, would not address the 

overwhelming permitting burdens, and a threshold-based 

approach would still be needed. At that time, we had not 

examined burdens with respect to specific source categories 

impacted by the rule and thus had not analyzed the 

administrative burden of permitting projects that 

specifically involve biogenic CO2 emissions taking account 

of the threshold-based approach. Commenters also did not 

provide information to demonstrate that an overwhelming 

permitting burden would still exist, justifying a temporary 

exclusion for biomass sources.

In the final Tailoring Rule, we indicated that the 

decision not to provide this type of an exclusion at that 

time did not foreclose EPA’s ability to either (1) provide 

this type of exclusion at a later time with additional 

information about overwhelming permitting burdens due to 

biomass sources, or (2) provide another type of exclusion 

or other treatment based on some other rationale. Although 

we did not take a final position, we noted that some 

commenters’ observations about a different treatment of 

biomass combustion warranted further exploration as a 

possible rationale.

Therefore, although we did not establish a permanent 

exclusion from PSD or Title V applicability based on 
 Page 31 of 104

specific characteristics of biogenic CO2, we indicated our 

intent to seek further comment on how we might address 

emissions of biogenic CO2 under the PSD and Title V programs 

through a future action.

We further noted that, while not promulgating an

applicability exclusion for biogenic emissions and biomass 

fuels or feedstocks in the final Tailoring Rule, 

flexibility exists to apply the existing regulations and 

policies regarding BACT in ways that take into account 

their net effects on atmospheric GHG concentrations. 

Without prejudging the outcome of our process to seek 

comment on whether and how we might address emissions of 

biogenic carbon under the PSD and Title V programs through 

a future action, we indicated that this issue warranted 

further exploration.

As mentioned earlier in the preamble, in order to 

explore the issue further following the promulgation of the 

Tailoring Rule, on July 15, 2010, EPA solicited views from 

the public through a CFI on approaches to accounting for 

biogenic CO2 emissions, on the means to estimate and measure 

CO2 emissions from a variety of biogenic CO2 sources and 

other information on biogenic sources that may be affected 

but not identified in the CFI. 
 Page 32 of 104

With promulgation of the Tailoring Rule we committed 

to issue technical and policy guidance for permitting of 

GHGs. Subsequently, the information gathered from 

stakeholders in response to the CFI provided diverse 

perspectives on treatment of biogenic CO2 emissions in preconstruction and operating permit reviews, including many 

requests to exclude, either partially or wholly, biogenic 

CO2 sources from PSD applicability determinations and BACT 

analyses on the basis of Inventory results and other 

considerations. On November 10, 2010, EPA issued the draft 

"PSD and Title V Permitting Guidance for Greenhouse Gases"

which provides the basic information that permit writers 

and applicants need to address GHG emissions in permits. 

Within the November guidance, EPA acknowledged the numerous 

stakeholder comments on biogenic CO2 BACT analyses and 

provided general guidance to permitting authorities to 

consider environmental, energy, and economic benefits that 

may accrue from the use of certain types of biomass (e.g., 

biogas from landfills for energy generation), consistent 

with existing air quality standards. We also committed to 

provide more detailed technical and policy guidance early 

in 2011 for completing step 4 of a "top-down" BACT analysis 

for GHG emissions from certain types of biomass sources to 

enable permitting authorities to simplify and streamline 
 Page 33 of 104

BACT determinations for such sources. EPA provided interim 

guidance on this topic in March 2011, concurrent with the 

proposal of this rule to assist permitting authorities 

before the deferral becomes effective.3

Noting that a variety of Federal and state policies 

have recognized that some types of biomass can be part of a 

national strategy to reduce dependence on fossil fuels and 

to reduce emissions of GHGs, EPA has determined that it is 

appropriate for permitting authorities to account for both 

existing Federal and state policies and their underlying 

objectives in evaluating the environmental, energy and 

economic benefits of biomass fuel. Based on these 

considerations, permitting authorities might determine that 

the use of certain types of biomass alone meets the BACT 

requirement for GHGs.

As described in the Background section of this 

preamble, NAFO petitioned the EPA on August 3, 2010 to 

reconsider and stay the implementation of the PSD and 

Title V GHG Tailoring Rule. Pending reconsideration, 

petitioners requested that the application of the PSD and 

 

3

“Guidance for Determining Best Available Control Technology for 

Reducing Carbon Dioxide Emissions from Bioenergy Production,” U.S. EPA 

Office of Air and Radiation, March 2011. 

(http://www.epa.gov/nsr/ghgdocs/bioenergyguidance.pdf)
 Page 34 of 104

Title V permitting programs to emissions of CO2 from biomass 

be stayed. 

Based on consideration of the petitioners’ arguments, 

together with the weight of the comments received on the 

CFI, EPA concluded that the issue of accounting for the net 

atmospheric impact of biogenic CO2 emissions is complex 

enough that further consideration of this important issue 

is warranted. Therefore, EPA granted the petition on 

January 12, 2011.

However, EPA did not grant the request for an 

administrative stay of the Tailoring Rule, because the rule 

is critical for making overall implementation of the PSD 

program feasible. Furthermore, an administrative stay of 

the statements in the preamble of the Tailoring Rule that 

describe EPA’s initial determination not to exempt 

emissions of CO2 from biomass would not provide the 

requested relief of excluding emissions of CO2 from biomass 

from the PSD and Title V permitting programs. The effect of 

a stay of this or any other aspect of the Tailoring Rule 

would be to return to the legal regime that existed before 

EPA's issuance of a final Tailoring Rule. As no exemption 

for emissions of CO2 from biomass existed prior to the final 

rule, an administrative stay would not result in an 

exemption from the requirements of PSD and Title V.
 Page 35 of 104

3. Rationale in Support of Interim Biomass Deferral

a. Regulation at This Time Is Not Justified

Since finalizing the Tailoring Rule, EPA has gathered 

additional information concerning biomass through the CFI 

and in response to the proposal for this rule. The 

information collected to this point underscores the 

complexity and uncertainty associated with accounting for 

biogenic emissions of CO2 and indicates that at present 

attempting to determine the net carbon cycle impact of 

particular facilities combusting particular types of 

biomass feedstocks would require extensive analysis and 

would therefore entail extensive workload requirements by

many of the permitting authorities. In contrast to other 

sources of GHG emissions, these uncertainties and 

complexities are exacerbated because of the unique role and 

impact biogenic sources of CO2 have in the carbon cycle. 

Further, methodologies are not sufficiently developed to 

assure that various permitting authorities would be able to 

perform the necessary calculations reasonably and 

consistently to determine the net atmospheric impact in 

many, if not all, instances.

The extensive workload requirements required to 

understand the net biogenic CO2 emissions from bioenergy 

facilities and other sources of biogenic CO2 emissions, as 
 Page 36 of 104

part of the PSD and Title V permit process, including 

specifically how to measure and account for biogenic CO2

emissions, would unnecessarily strain the resources of the 

affected permitting authorities and result in delays in 

processing permits for other applicants. Moreover, at 

present, devoting these limited permitting authority 

resources to biomass sources would not be productive in 

light of the possibility that EPA may ultimately determine 

that the utilization of some or all biomass feedstocks for 

bioenergy has a negligible (or de minimis

Therefore, the information EPA has collected since 

promulgating the Tailoring Rule indicates that it is 

consistent with the rationale of the Tailoring Rule for 

affected permitting authorities to defer on a temporary 

basis biogenic CO2 emissions from PSD and Title V

applicability. During this deferral, EPA will conduct a 

detailed examination of the science associated with 

biogenic CO2 emissions from stationary sources, which will 

include a peer review by the SAB, and resolve technical 

issues in order to account for biogenic CO2 emissions in 

ways that are scientifically sound and also manageable in 

practice. 

), negative, or 

positive net impact on the carbon cycle.
 Page 37 of 104

As noted previously, EPA based the Tailoring Rule on 

the extreme administrative burdens to permitting 

authorities, and undue costs to sources, that would result 

from a literal application of the PSD and Title V 100/250 

tpy statutory thresholds, as of January 2, 2011, when those 

requirements first applied to GHGs. EPA reasoned that, in 

accordance with the Chevron

Just as the extensive workload of processing permit 

applications from sources below the Tailoring Rule 

thresholds justified exempting those sources at least from 

the initial steps in the Tailoring Rule phase-in program, 

so too the extensive workload associated with analyzing and 

accounting for biogenic CO2 emissions as part of processing 

permit applications from biomass facilities justifies 

exempting those sources for a period of time, in the 

affected states, pending EPA’s development of a consistent 

analytical framework for 

statutory construction, taking into account the "absurd 

results" and "administrative necessity" lines of cases, 

Congress did not intend that the PSD and Title V

requirements apply at the 100/250 tpy statutory thresholds 

to GHG-emitting sources as of January 2, 2011, but rather 

that those requirements could be limited, at least 

initially, through a phase-in approach, to higher-emitting 

sources. 
 Page 38 of 104

and practical framework for determining net carbon cycle 

impacts. The three-year deferral EPA is finalizing in this 

action is reasonable to allow time for the development of 

the accounting framework and subsequent rulemaking. 

In effect, this deferral is a step back from the 

Tailoring Rule’s approach but the decision to defer the 

applicability of PSD and Title V to biogenic CO2 emissions 

is nonetheless supported, in part, on the same rationale as 

EPA used to justify the Tailoring Rule's phase-in approach. 

This action constitutes a refinement of the approach EPA 

has taken to regulate GHG emissions from stationary sources 

through a phased-in approach, based on an evolving 

understanding of the complexities, uncertainties, and 

nuances associated with biogenic emissions.

An alternative way to reduce the permitting burden 

would be to apply PSD and Title V to all facilities with 

biogenic CO2 emissions that emit at or above the Tailoring 

Rule thresholds, but without making any effort to take into 

account net carbon cycle impacts. However, we believe that 

it is conceivable that as a result of the scientific 

examination of biogenic CO2 emissions, we could conclude 

that the net carbon cycle impact for some biomass 

feedstocks is trivial, negative, or positive. Accordingly, 

this could result in regulation of sources with trivial or 
 Page 39 of 104

positive impacts on the net carbon cycle, as previously 

discussed. To avoid this outcome, given our current state 

of knowledge, we believe a case-by-case net carbon cycle 

impact analysis would be required in the course of 

reviewing each permit application. This burden would be in 

addition to the currently existing burden associated with 

obtaining a PSD or Title V permit. In light of the 

permitting burdens assessed in the Tailoring Rule, adding 

to that burden in many states would frustrate the goals we 

sought to accomplish in the Tailoring Rule to ensure that 

the PSD and Title V programs can be administered in each 

state.

Furthermore, given the potential that the utilization 

of at least some biomass feedstocks may have a negligible 

impact on the net carbon cycle, engaging in this type of 

burdensome analysis may not be an optimal use of the 

limited resources of PSD and Title V permitting 

authorities. The additional scientific examination being 

undertaken by the EPA could ultimately conclude that such 

resources could have been more effectively utilized to 

target CO2 emissions that clearly have a detrimental impact 

on the net carbon cycle. Establishing a three-year deferral 

period for biogenic CO2 emissions will enable EPA to 

consider the results of the detailed examination of the 
 Page 40 of 104

science of these emissions and undertake a rulemaking to 

determine the best way to account for biogenic CO2 emissions 

when determining PSD applicability.

Another important reason for the three-year deferral 

period is to allow sufficient time to consider the unique 

characteristics and attributes of biogenic CO2 feedstocks, 

as opposed to other sources of GHG, using the results from 

the detailed examination mentioned previously, within both 

the state permitting agencies and affected facilities. 

While the interim BACT guidance described previously will 

help alleviate some of this burden before the deferral 

becomes effective, we expect that more and more diverse 

users of biomass combustion or other biogenic CO2 sources 

are likely to be affected under step 2 of the Tailoring 

Rule because, under step 2, these sources can trigger 

permitting requirements based solely on their GHG emissions 

with no prerequisite requirement that they otherwise 

trigger PSD or Title V permitting requirements for a nonGHG pollutant. We believe, absent the deferral period and 

the completion of EPA’s full analysis of the unique 

technical issues associated with these diverse facilities 

emitting biogenic CO2, that it would be particularly 

challenging for many of the permitting authorities and 

facilities to process permits involving these emissions. 
 Page 41 of 104

Also, as described elsewhere in this preamble, this interim 

deferral is intended to temporarily exclude biogenic CO2

emissions from the definition of "subject to regulation,"

as that term was defined for purposes of the Tailoring 

Rule, for a period of three years, while EPA further 

considers, through notice and comment rulemaking, the 

approach to accounting for these emissions on a permanent 

basis.

b. One-step-at-a-time Doctrine

EPA relied, in part, on the "one-step-at-a-time"

doctrine, which authorizes agencies to implement statutory 

requirements a step at a time, in finalizing the Tailoring 

Rule. 75 FR 31514, 31578 (June 3, 2010). As described in 

the Tailoring Rule and earlier in the preamble, the case 

law recognizing the "one-step-at-a-time" doctrine, within 

the Chevron framework, justifies an agency’s step-by-step 

approach under the following circumstances or conditions: 

(1) The agency’s ability to comply with a statutory 

directive depends on facts, policies, or future events that 

are uncertain; (2) the agency has estimated the extent of 

its remaining obligation; (3) the agency’s incremental 

actions are structured in a manner that is reasonable in 

light of the uncertainties; and (4) the agency is on track 

to full compliance with the statutory requirements. 
 Page 42 of 104

In the proposed rule, EPA stated in footnote 13 that 

the "one-step-at-a-time" doctrine was not relevant to this 

rulemaking. This statement was made without explanation.

One commenter (EPA-HQ-OAR-2011-0083-0084) stated "[b]ased 

on EPA’s statements in the Tailoring Rule, which does rely 

on the ‘one-step-at-a-time’ doctrine, it appears that the 

doctrine would apply equally well to EPA’s decision to 

delay regulation of biogenic CO2 emissions under the PSD and 

Title V programs." For the reasons stated below, EPA now 

agrees that, because of the complexity and uncertainty of 

the science associated with accounting for biogenic sources 

of CO2, the interim deferral of the PSD and Title V program 

for such emissions would be a reasonable exercise of the 

"one-step-at-a-time" doctrine.

First, as the D.C. Circuit stated in National 

Association of Broadcasters v. FCC, 740 F.2d 1190, 1210 (DC 

Cir. 1984) ("National Association of Broadcasters"), 

incremental agency action is most readily justifiable 

"against a shifting background in which facts, predictions, 

and policies are in flux and in which an agency would be 

paralyzed if all the necessary answers had to be in before 

any action at all could be taken." Those circumstances are 

present here, and so is the fact that the task at hand is 

extraordinarily demanding. As discussed previously, EPA is 
 Page 43 of 104

in the process of conducting a detailed examination of the 

science associated with biogenic CO2 emissions from 

stationary sources to better understand their role on the 

carbon cycle and to develop an accounting framework for use 

by permitting authorities and sources. This examination 

will include discussion with partners and scientists both 

inside and outside the federal government, as well as 

engagement with the Science Advisory Board, to consider 

technical issues that the Agency must resolve in order to 

account for biogenic CO2 emissions in ways that are 

scientifically sound and also manageable in practice.

Second, as the Court stated in National Association of 

Broadcasters, "the agency [should] ma[k]e some estimation, 

based upon evolving economic and technological conditions, 

as to the nature and magnitude of the problem it will have 

to confront when it comes to [undertake the remaining 

steps]" and that estimation must be "plausible and flow 

from the factual record compiled." Id. at 1210. Here, EPA 

has done this by deferring the applicability of PSD and 

Title V to biogenic emissions of CO2 from stationary sources 

for only as long as necessary for EPA to complete the 

needed scientific study of these emissions, develop an 

accounting framework, and as appropriate conduct rulemaking 
 Page 44 of 104

specific to the unique nature and characteristics of these 

emission sources.

In order to explore the issues further following the 

promulgation of the Tailoring Rule, on July 15, 2010, EPA 

solicited views from the public through the CFI on 

approaches to accounting for biogenic CO2 emissions, 

including whether some or all of a source’s biogenic CO2

emissions could be discounted based on a determination that 

they are canceled out by the CO2 absorption associated with 

growing the fuel (75 FR 41173). Also, we solicited 

information on the means to estimate and measure CO2

emissions from a variety of biogenic CO2 sources that 

typically have not been part of emission inventories (e.g., 

CO2 from landfills, livestock management, and fermentation 

processes), as well as information on other biogenic 

sources that may be affected but which were not identified 

specifically in the CFI.

With promulgation of the Tailoring Rule, we committed 

to issue technical and policy guidance for permitting of 

GHGs. Subsequently, the information gathered from 

stakeholders in response to the CFI provided diverse 

perspectives on treatment of biogenic CO2 emissions in preconstruction and operating permit reviews, including many 

requests to exclude, either partially or wholly, biogenic 
 Page 45 of 104

CO2 sources from PSD applicability determinations and BACT 

analyses on the basis of Inventory results and other 

considerations.

Third, again as the Court stated in National 

Association of Broadcasters, it must be "reasonable, in the 

context of the decisions made in the proceeding under 

review, for the agency to have deferred the issue to the 

future. With respect to that question, postponement will be 

most easily justified when an agency acts against a 

background of rapid technical and social change and when 

the agency’s initial decision as a practical matter is 

reversible should the future proceedings yield drastically 

unexpected results." Id. at 1211. Here, our deferral is 

reasonable in light of the technical and scientific 

questions that are raised by biogenic emissions from 

stationary sources, which will be addressed by EPA’s 

ongoing study, development of an accounting framework, and 

any subsequent rulemaking. As explained in the proposal and 

elsewhere in the preamble to this final rule, EPA believes 

it has the authority to exclude biogenic CO2 emissions from 

the PSD and Title V requirements for the proposed threeyear deferral period and will be exploring whether a 

permanent exemption is appropriate for at least some and 

perhaps all types of feedstocks.
 Page 46 of 104

However, the possibility also remains that more 

detailed examination of the science of biogenic CO2 will 

demonstrate that the utilization of some biomass feedstocks 

for bioenergy production will have a significant impact on 

the net carbon cycle, making literal application of the PSD 

program requirements to such emissions, consistent with the 

Tailoring Rule, necessary to fulfill congressional intent. 

Thus, EPA is finalizing only a temporary, rather than a 

permanent, deferral of PSD requirements for such sources at 

this time. EPA notes that the issue of subsequent 

applicability of the PSD and Title V programs to facilities 

that may be permitted during the deferral period is 

discussed in more detail in section II.C. 

Finally, as the D.C. Circuit stated in Grand Canyon 

Air Tour Coalition v. F.A.A

As we have described in the CFI, the preamble to the 

proposed deferral and elsewhere in the preamble for this 

final rule, there is little question as to the complexity 

in accounting for and understanding the impact of biogenic 

CO2 emissions from stationary sources on net atmospheric CO2

., 154 F.3d 455, 477–78 (D.C. 

Cir. 1998), the Courts will accept an initial step towards 

full compliance with a statutory mandate, as long as the 

agency is headed towards full compliance, and we now 

believe that the doctrine is applicable here. 
 Page 47 of 104

emissions such that sources and permitting authorities may 

not reasonably be expected to comply with or implement PSD 

and Title V applicability requirements in the near term. As 

described elsewhere in this preamble, the deferral is 

limited to three years, and EPA may, before the expiration 

of the deferral, undertake additional rulemaking to clarify 

the applicability of PSD and Title V permitting 

requirements for specific categories of biogenic emissions 

as may be appropriate based on the scientific record EPA is 

currently developing. See Grand Canyon Air Tour

This rulemaking constitutes an initial step toward 

full compliance, and, seen in that light, is supported by 

the "one-step-at-a-time" doctrine. 

, 891 F.2d 

at 476–77 (upholding agency action as a step towards full 

compliance with statutory mandate when the agency expected 

full compliance to occur some 20 years after the deadline 

in the statute).

c. EPA Not Required to Regulate Where Benefits of 

Regulation would be Trivial 

EPA believes it has the authority to exclude biogenic 

CO2 emissions from the PSD and Title V requirements, if 

scientific analysis supports conclusions about the nature 

of biogenic CO2 in question that in turn support such an 

exclusion; the agency will be using the three-year deferral 
 Page 48 of 104

period to better understand the science associated with 

biogenic CO2 emissions and to explore whether or not a 

permanent exemption is permissible for at least some and 

perhaps all types of feedstocks. 

Courts have recognized that administrative agencies 

have the implied authority to establish exemptions "when 

the burdens of regulation yield a gain of trivial or no 

value." Alabama Power Co. v. Costle

Categorical exemptions may also be permissible as an 

exercise of agency power, inherent in most statutory 

schemes, to overlook circumstances that in context may 

fairly be considered 

, 636 F.2d 323, 360 (DC 

Cir. 1980). In this decision that specifically addressed 

the requirements of the PSD program, the DC Circuit 

described this principle as follows: 

de minimis. It is commonplace, of 

course, that the law does not concern itself with 

trifling matters, and this principle has often found 

application in the administrative context. Courts 

should be reluctant to apply the literal terms of a 

statute to mandate pointless expenditures of effort.

Id. (internal citations omitted).

In an earlier case cited by the court in Alabama Power

The ‘

, the 

court described the doctrine as follows:

de minimis’ doctrine that was developed to 

prevent trivial items from draining the time of the 

courts has room for sound application to 

administration by the Government of its regulatory 

programs. * * * The ability, which we describe here, 

to exempt de minimis situations from a statutory 

command is not an ability to depart from the statute, 

but rather a tool to be used in implementing the 
 Page 49 of 104

legislative design. District of Columbia v. Orleans, 

406 F.2d 957, 959 (1968).

In this respect, the Alabama Power opinion observed in a 

footnote that the de minimis principle "is a cousin of the 

doctrine that, notwithstanding the ‘plain meaning’ of a 

statute, a court must look beyond the words to the purpose 

of the act where its literal terms lead to ‘absurd or 

futile results.’" Id.

To apply an exclusion based on the 

at 360 n. 89 (citations omitted).

de minimis

doctrine, "the agency will bear the burden of making the 

required showing" that a matter is truly de minimis which 

naturally will turn on the assessment of particular 

circumstances. Id. The Alabama Power opinion concluded that 

"most regulatory statutes, including the CAA, permit such 

agency showings in appropriate cases." Id.

A notable limitation on the de minimis doctrine is 

that it does not authorize the agency to exclude something 

on the basis of a cost-benefit analysis. As the court 

explained, this "implied authority is not available for a 

situation where the regulatory function does provide 

benefits, in the sense of furthering the regulatory 

objectives, but the agency concludes that the acknowledged 

benefits are exceeded by the costs." Id. The court held 

that any "implied authority to make cost-benefit decisions 
 Page 50 of 104

must be based not on a general doctrine but on a fair 

reading of the specific statute, its aims and legislative 

history." Id.

Since Chevron, several courts have recognized de 

minimis exceptions (1) so long as they are not contrary to 

the express terms of the statute and (2) the agency’s 

interpretation of the exception is a permissible reading of 

the statute. See e.g., Ober v. Whitman, 243 F.3d 1190 (9th

Cir. 2001); see also Ohio v. EPA

The CAA is not so rigid as to preclude a

, 997 F.2d 1520 (D.C. Cir. 

1993).

de minimis

exception. Since the early years of the PSD program, EPA 

has applied this de minimis

EPA also relied on the 

principle to establish various 

types of values in the PSD regulations that may be used to 

exempt categories of source from all or part of the PSD 

program requirements. 

de minimis doctrine to 

establish values that permitting authorities can use to 

show that a source that requires a PSD permit meets the 

necessary criteria to obtain a permit. Significant impact 

levels may be used in particular ways identified in prior 

EPA rules and guidance as part of an assessment of whether 

a source causes or contributes to a violation of air 

quality standards. Significant monitoring concentrations 
 Page 51 of 104

may be used to exempt sources from pre-construction 

monitoring requirements. See 75 FR 64864, 64890-97 (October 

20, 2010). 

Due to the complexity and uncertainty of the science 

associated with accounting for biogenic CO2 emissions and 

their impact on the carbon cycle and net atmospheric CO2

levels, requiring regulation of biogenic sources of CO2 at 

this time may lead to only trivial environmental benefits 

while exacerbating the regulatory burdens and absurd 

results the Tailoring Rule was intended to avoid because 

the subsequent scientific study may show that certain 

biogenic feedstocks have a trivial or even positive impact 

on net atmospheric CO2 levels.

d. Potential for Some Biomass Feedstocks To Have a de 

minimis

As discussed previously in this preamble, EPA believes 

based on information currently before the Agency that at 

least some biomass feedstocks that may be utilized to 

produce energy or other products have a negligible impact 

on the net carbon cycle, or possibly even a positive net 

effect. Within the context of the PSD and Title V programs, 

the argument for treating CO2 emissions from bioenergy and 

biogenic sources differently from fossil-based CO2 emissions 

, Neutral or Positive Impact on Net CO2 Levels in the 

Atmosphere
 Page 52 of 104

at the facility relies on the premise that sequestration 

occurs offsite, outside the boundaries of the facility. 

Such a negligible or positive impact on the carbon cycle

and net atmospheric CO2 levels should not count towards the 

PSD and Title V applicability requirements. It appears that 

the potential may exist for EPA to determine that other 

types of biomass feedstocks would have a negligible impact 

on the net carbon cycle impact after further detailed 

examination of the science associated with biogenic CO2

emissions. 

Thus, if EPA were to require all bioenergy facilities 

or other sources of biogenic CO2 emissions to limit 

emissions of CO2 before this assessment is complete, it may 

later determine that such actions have required regulation 

of a trivial amount of emissions or even potentially of 

emissions that are associated with a net CO2 emissions 

benefit. To avoid this outcome, and because of the

scientific uncertainty and administrative burdens 

associated with accounting for net biogenic CO2 emissions

relative to the carbon cycle, EPA believes an initial 

deferral of the PSD requirements for bioenergy and other 

biogenic sources is justified at this time to conduct the 

detailed scientific evaluation described elsewhere in the 

preamble. However, the possibility also remains that EPA’s 
 Page 53 of 104

detailed examination of the science of biogenic CO2 will 

demonstrate that the utilization of some biomass feedstocks 

for bioenergy production will have a significant impact on 

the net carbon cycle, making application of the PSD program 

requirements to such emissions necessary to fulfill 

congressional intent. Thus, EPA is finalizing only a 

temporary, rather than a permanent, deferral of PSD 

requirements at this time in order for EPA to conduct a 

study of the science surrounding biogenic CO2 emissions and 

their role in the carbon cycle and to develop an accounting 

framework to help further relieve the burdens faced by 

permitting authorities. EPA is also seeking an independent 

peer review of the science and accounting framework by the 

Science Advisory Board to resolve the uncertainties that 

have been highlighted by commenters in response to the CFI 

and the proposal to this action.

The final 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 

C. Facilities Permitted During Deferral
 Page 54 of 104

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 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 we did not propose and 

this rule 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 takes 

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.
 Page 55 of 104

Section 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. Also note that we did not specifically propose 

or make final any change to these rescission provisions, 

nor were they addressed to any extent in the proposal. 

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. With respect to Title V, a source that 

becomes a major source subject to an approved Title V 

permit program as a result of biogenic emissions after the 

deferral expires would generally have one year from the 

date the source became subject to Title V to apply for an 

operating permit. 

Any future actions to modify, shorten, or make 

permanent the deferral for biogenic sources are beyond the 
 Page 56 of 104

scope of this action and will be addressed through 

subsequent rulemaking, based on the scientific study and 

development of an accounting framework described elsewhere 

in this preamble. At this time, 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 programs based on 

the study are prospective and unknown. Thus, we are unable 

to predict which biogenic CO2 sources, if any, currently 

subject to the deferral 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 this deferral. 

To the extent the deferral is not effective in a 

particular state at the time a PSD permit is issued, then 

the permit would need to include BACT limitations for GHGs 

if the source emits above levels that make GHGs subject to 

regulation under applicable rules. EPA issued interim 

guidance entitled, "Guidance for Determining Best Available 

Control Technology for Reducing Carbon Dioxide Emissions 
 Page 57 of 104

from Bioenergy Production" to help permitting authorities, 

during the interim period before the deferral is effective,

establish a basis for concluding that under PSD Programs 

the combustion of biomass fuels can be considered BACT for 

biogenic CO2 emissions at stationary sources. To be clear, 

this guidance would apply during the deferral period for 

those permitting authorities where the deferral was not 

effective until EPA revises it or it is superseded by 

future guidance or rules.

Consistent with the proposed rule, EPA is implementing 

the deferral by amending the definition of “subject to 

regulation” in its PSD and Title V regulations. The 

adoption of the deferral for biogenic CO2 emissions from 

Title V and PSD permitting programs under 40 CFR part 70 

and 40 CFR 51.166 is optional for any state, local, or 

tribal (state) permitting authority, but is effective 

immediately upon publication for Title V and PSD permitting 

programs under 40 CFR part 71 and 40 CFR 52.21 that EPA 

implements. 

D. Mechanism for Deferral and State Implementation

The proposal did not specifically require each state 

to revise its PSD and Title V permitting programs (required 

under parts 51.166 and 70) to impose the deferral for three

years, although it was clear that the proposal was intended 
 Page 58 of 104

to revise the permitting programs that EPA implements 

(required under parts 52.21 and part 71) for this purpose,

and it was clear that EPA intended to implement the 

deferral by changing its implementing regulations. Many 

state commenters on the proposal seemed to assume that the 

deferral was mandatory for the states and questioned how 

they would revise their SIPs and Title V programs by July 

1, 2011, as they read EPA’s proposal to require.

For the purposes of this final rule, EPA is clarifying

that each state may decide if it wishes to adopt the 

deferral and proceed accordingly, with appropriate program 

changes, if needed. Also, EPA suggests that each state 

communicate with its stationary sources its intent in this 

regard. Because the deferral is not required, states that 

do not wish to revise their current permit programs do not 

need to make any program changes in response to this final 

rule. Also, states that do wish to adopt the deferral do 

not need to make any changes that would otherwise be 

necessary by July 1, 2011, the start of step 2 under the 

Tailoring Rule. Although the preamble for the proposal did 

discuss the beginning of step 2 of the Tailoring Rule as a 

time when more sources would be subject to permitting, 

because sources could be subject to Title V without a 

prerequisite that they also be subject to PSD and because 
 Page 59 of 104

they could be subject to PSD for GHGs without being subject 

first for another regulated NSR pollutant, it did not 

discuss any requirement for any state deferral to be 

effective by July 1, 2011, and we are not requiring this in 

this final rule. 

However, although state program changes are not 

required under today’s final rule, EPA sees several reasons 

that a state should adopt the deferral in its state 

programs and, based on comments received, EPA expects that 

many states will adopt the deferral. Many of these reasons 

are the same reasons prompting EPA to adopt the deferral 

for the permit programs we implement. That is, states that 

expect to receive permit applications from a number of 

biomass facilities, and, in particular, a number of 

different types of biomass facilities, are likely to need 

more time to determine how best to address technical, 

scientific, and practical issues related to biogenic CO2

without disrupting the proper functioning and timeliness of 

the permitting programs. Of course, it is at least in 

theory possible that such a state may, on its own, be able 

to address those issues, or may for other reasons have 

adequate resources to address those issues. Even so, we 

expect that many states will need to, and therefore should, 

adopt the deferral, and therefore, like the proposal, this 
 Page 60 of 104

final rule strongly encourages states that wish to adopt 

the three-year deferral to submit SIP revisions or Title V 

program revisions. However, like the proposal, this final 

rule does not mandate such submittals, recognizing that 

some states may not have any (or may have only a few)

sources that combust biomass, and may have adequate

information and resources regarding the nature of biogenic 

emissions from those sources, or may for other reasons be 

able to conduct permitting of bioenergy sources without 

straining their permitting resources.

Furthermore, the justification that supports this 

deferral for including biogenic CO2 in PSD applicability 

determinations is not applicable in the case of a PSD 

permit that was issued before completion of this rule 

during step 1 of the phase in of GHG requirements under the 

Tailoring Rule. If a permit has been issued, then the 

burden described above has already been experienced and 

overcome by the permitting authority. Furthermore, this 

burden will have been experienced in the context of step 1 

of the GHG permitting phase under the Tailoring Rule, and 

thus was easier to accommodate as part of the more limited 

increase in workload that permitting authorities have faced 

in addressing GHG requirements during step 1. In the 

context of step 2 where permitting authorities will have to 
 Page 61 of 104

process a greater number of permit applications, the 

incremental burden of evaluating the net atmospheric

impacts of biogenic CO2 has a more significant impact on the 

ability of permitting authorities to administer the 

permitting programs. This analysis adds a burden that EPA 

had not considered when it completed the Tailoring Rule.

EPA also issued interim guidance entitled, “Guidance 

for Determining Best Available Control Technology for 

Reducing Carbon Dioxide Emissions from Bioenergy 

Production” to help permitting authorities establish a 

basis for concluding that under the PSD Program the 

combustion of biomass fuels can be considered BACT for 

biogenic CO2 emissions at stationary sources until such time 

as the deferral becomes effective. EPA wishes to clarify 

that the guidance is non-binding and case-by-case BACT 

determinations made in accordance with the guidance may 

nonetheless be subject to challenge in each permitting 

action. Accordingly, the interim guidance does not provide 

the same level of certainty to sources and decrease in 

administrative burdens to permitting authorities and 

sources that the deferral does.

EPA developed the interim BACT guidance primarily for 

application during step 1 of the phase of GHG permitting 

requirements under the Tailoring Rule. While the guidance 
 Page 62 of 104

suggests reasoning that may serve to reduce the resource 

demands of conducting a net carbon cycle analysis in the 

context of permitting, it does not eliminate the need for 

permitting authorities to conduct some evaluation of 

energy, environmental, and economic impacts in step 4 of 

the BACT analysis. The guidance discusses the complexities 

of conducting a net carbon cycle analysis, but places the 

emphasis on showing the economic and energy benefits of 

utilizing biomass. Permitting authorities that apply this 

approach still need to identify the specific energy and 

economic benefits of utilizing particular biomass 

feedstocks to apply this rationale. To the extent these 

benefits cannot be identified or shown to override other 

considerations, a permitting authority may need to explore 

the net carbon cycle impact in more depth to justify the 

conclusion that utilization of a biomass feedstock is BACT 

by itself. In states that do not elect to adopt the 

deferral, the incremental burden of conducting the analysis 

described in the guidance will have a more significant 

impact on the overall ability to administrate the 

permitting program in the context of step 2 of the GHG 

permitting than it did in step 1, in which the overall 

increase in workload from incorporating GHG requirements 

into PSD permit reviews was less than it will be in step 2.
 Page 63 of 104

This deferral may not be effective in any jurisdiction 

before EPA publishes a final rule and it takes effect. 

Also, for any state that found it necessary to revise its 

permitting programs to implement the Final Tailoring Rule, 

EPA believes it unlikely that such a state would be able to 

implement the deferral under its state rules without making 

additional changes to its program consistent with the 

regulatory changes in this final rule. For any state that 

was able to implement the Final Tailoring Rule through 

interpretation of the term “subject to regulation”, 

consistent with the Final Tailoring Rule, without making 

any changes to state regulations, EPA believes it is likely 

they would be able to implement the deferral under their 

state rules without making additional revisions. In either 

of these cases, EPA recommends that states communicate with 

the stationary sources under their jurisdiction regarding

whether they intend to adopt the deferral, and if they do, 

when it will become effective.

III. Response to Public Comments

We received a significant number of public comments on 

the proposed deferral. Some of these comments covered 

issues such as:

A. Overview of Public Comments
 Page 64 of 104

• Content of the Deferral (e.g., pollutants and sources 

covered, start and end date, terminology);

• Implementation of the Deferral; and

• Legal Authority.

While those comments addressed the deferral itself, a large 

number of the comments actually raised issues outside the 

scope of this rulemaking and covered topics such as:

• Science, accounting, and economic issues related to 

biogenic CO2 emissions (e.g., carbon cycle dynamics, 

accounting methodologies, forest economics and 

sustainability);

• PSD, Title V and the Tailoring Rule; and

• The Interim Guidance, "Guidance For Determining Best 

Available Control Technology for Reducing Carbon 

Dioxide Emissions From Bioenergy Production" (March 

21, 2011).

EPA acknowledges those comments that are outside the scope 

of this rulemaking and notes that many of the issues raised 

were similar, if not identical, to those presented in 

comments to the CFI last year. We will be considering those 

topics as part of the detailed examination of the science 

and technical issues associated with accounting for 

biogenic CO2 emissions from stationary sources. We also may 

consider the issues in any subsequent rulemakings we 

undertake related to the PSD, Title V and other stationary 

source programs. However, we do not respond to them in this 

rulemaking.

The sections below contain a brief summary of the some 

of the major comments and responses we received on the 
 Page 65 of 104

proposal. Responses to the substantive comments can be 

found in the response to comments document entitled, 

"Deferral for CO2 Emissions from Bioenergy and Other 

Biogenic Sources under the Prevention of Significant 

Deterioration (PSD) and Title V Programs, Summary of Public 

Comments and Responses," available in docket EPA-HQ-OAR2011-0083.

We received comments on different aspects of the 

deferral. They fit into several broad categories as 

discussed below.

B. Comments on the Deferral

Terminology. We received several comments requesting 

clarity on the terminology in the deferral, including the 

terms biogenic CO2 emissions, biologically-based material 

and examples of the types of sources that these emissions 

can come from. As discussed in section II, we finalized the 

terms biogenic CO2 emissions (described 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 (e.g. 

calcium carbonate)) and biologically-based material (nonfossilized and biodegradable organic material originating 

from plants, animals or micro-organisms [including 

products, by-products, residues and waste from agriculture, 
 Page 66 of 104

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 decomposition of non-fossilized 

and biodegradable organic material]) with very little 

change. We added the clause about “mineral sources” of 

carbon to biogenic CO2 emissions in response to requests for 

additional clarification on which sources of CO2 were not 

included in the deferral. We also clarified that in the 

examples of sources of biogenic CO2 emissions, CO2 from 

fermentation includes CO2 from ethanol production as well as 

other industrial processes.

Pollutants. We received comments on which pollutants 

are covered by the deferral, particularly methane (CH4) and 

nitrous oxide (N2O). A few comments requested that CH4 and 

N2O also be included in the deferral as they result when 

biomass is combusted. While CH4 and N2O are produced when 

biomass is combusted, the level of emissions and resulting 

impact on atmospheric concentrations of these gases are 

primarily related to the feedstock handling and combustion 

conditions at the specific plant rather than the source of 

the feedstocks. We finalized this rule as proposed and 

included only biogenic CO2 emissions for this reason, and 

note that emissions of non-CO2 GHGs are typically a small 
 Page 67 of 104

proportion of the total GHG emissions from combustion of 

biologically based material. Since the non-CO2 GHGs are so 

small relative to CO2, the deferral of biogenic CO2

emissions will ensure the biomass combustion projects will 

likely not meet the applicability thresholds based on their 

CH4 and N2O emissions alone.

Duration

EPA is conducting a detailed examination of the 

science and technical issues associated with biogenic CO2

emissions and is developing an accounting framework. Once 

that work is complete, the Agency intends to undertake a 

notice-and-comment rulemaking to establish the treatment of 

these emissions in the PSD and Title V programs. We have 

determined that three years will be required to complete 

the scientific work as well as the follow-on rulemaking. As 

stated in section II of this preamble, the deferral is 

intended to be a temporary measure to allow the Agency time 

to complete its work and determine what, if any, treatment 

. We received several comments on the duration 

of the deferral, including its start date and end date.

Specifically, several comments recommended that EPA remove 

the three-year sunset date and make the deferral permanent 

until the Agency completes its study and takes further 

action. Others concluded EPA does not need three years to 

complete its work and should shorten the deferral.
 Page 68 of 104

of biogenic CO2 emissions should be in the PSD and Title V

programs. Therefore, we did not agree to make the deferral 

permanent or to shorten it.

Sources covered by and permitted during the deferral

The final 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. At this time, we are unable to predict 

which biogenic CO2 sources, if any, currently subject to the 

deferral would be subject to any permanent exemptions or 

which currently deferred sources would be potentially 

. 

We received several comments requesting clarity on which 

sources of biogenic CO2 emissions were covered by the 

deferral. This is related to the comments on definitions 

described above, and we provided clarity on those sources, 

where necessary. We also received several comments on the 

application of the PSD and Title V programs during the 

deferral, including the availability of grandfathering or a 

permitting moratorium for sources subject to the deferral 

and on the availability of authority to revise BACT.
 Page 69 of 104

required to account for their emissions in relation to 

future permitting actions as a result of 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 this deferral.

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 the PSD and Title V permitting requirements 

for the biogenic CO2 emissions from a source with 

particular characteristics, then the deferral would end for 

that source and those 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 Tailoring 

Rule (e.g., a major source determination for Title V

purposes or a major modification determination for PSD 

purposes).

Many commenters on the proposed deferral asked EPA to 

provide grandfathering from permitting requirements for 
 Page 70 of 104

sources that are currently not subject to permitting 

requirements but that in the future may be covered by the 

deferral. In addition, some commenters asked for the 

deferral to be made retroactively effective (e.g., during 

step 1 of the Tailoring Rule or January 1, 2011 through 

June 30, 2011) in states prior to state adoption of any SIP 

revision or Title V program change that may be necessary to 

revise the programs to incorporate the deferral, or that 

the deferral permanently apply to any source subject to it 

at any time. 

As explained in section II.C of this preamble, EPA has 

decided to not offer any kind of grandfathering or 

moratorium on future Title V and PSD permitting for 

biogenic CO2 sources subject to the three-year deferral.

EPA wishes to clarify that we did not propose and this 

rule 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 takes 

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.

Section 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 
 Page 71 of 104

provision. To the extent the deferral is not effective in a 

particular state at the time a PSD permit is issued, then 

the permit would need to include BACT limitations for GHGs 

if the source emits above levels that make GHGs subject to 

regulation under applicable rules.

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 this action and will be addressed through 

subsequent rulemaking, based on the scientific study and 

development of an accounting framework described elsewhere 

in this preamble.

Implementation of the Deferral. We received comments 

suggesting that adoption of the deferral must be mandatory 
 Page 72 of 104

for states, as well as comments saying that the states 

should have flexibility regarding adoption of the deferral.

As explained in section II. D of this preamble, EPA is not 

making adoption of this deferral mandatory. Each state may 

decide if it wishes to adopt the deferral and proceed 

accordingly, with appropriate program changes, if needed.

Based on the comments received, we recognize that some 

states may not have any, or may have only a few, sources 

that combust biomass, and may have adequate information and 

resources as to the nature of biogenic emissions from those 

sources. That said, EPA recommends that each state 

communicate with its stationary sources its intent in this

regard and utilize the interim guidance document as 

appropriate.

Even though adoption of the deferral is not mandatory, 

EPA sees several reasons why a state might want to adopt 

the deferral in its state programs and many of these 

reasons are the same reasons why EPA is adopting the 

deferral for the permit programs we implement (e.g., the 

need for more time to determine how to address technical, 

scientific, and practical issues related to biogenic CO2

without disrupting the proper functioning and timeliness of 

the permitting programs). 
 Page 73 of 104

However, although state program changes are not 

required under today’s final rule, EPA sees several reasons 

that a state might want to adopt the deferral in its state 

programs; many of these reasons are the same reasons 

prompting EPA to adopt the deferral for the permit programs 

we implement (e.g., the need for more time to determine how

best to address technical, scientific, and practical issues 

related to biogenic CO2 without disrupting the proper 

functioning and timeliness of the permitting programs).

Also, like the proposal, this final rule strongly 

encourages states that wish to adopt the three-year 

deferral to submit SIP revisions or Title V program 

revisions, but does not mandate such submittals, 

recognizing that some states may not have any (or may have 

only a few) sources that combust biomass, and may have 

adequate information and resources regarding the nature of 

biogenic emissions from those sources.

Furthermore, the justification that supports this 

deferral for including biogenic CO2 in PSD applicability 

determinations is not applicable in the case of a PSD 

permit that was issued before completion of this rule 

during step 1 of the phase-in of GHG requirements under the 

Tailoring Rule. If a permit has been issued, then the 

burden described above has already been experienced and 
 Page 74 of 104

overcome by the permitting authority. Furthermore, this 

burden will have been experienced in the context of step 1 

of the GHG permitting phase in under the Tailoring Rule, 

and thus was easier to accommodate as part of the more 

limited increase in workload that permitting authorities 

have faced in addressing GHG requirements during step 1. In 

the context of step 2 where permitting authorities will 

have to process a greater number of permit applications, 

the incremental burden of evaluating the net atmospheric

impacts of biogenic CO2 has a more significant impact on the 

ability of permitting authorities to administer the 

permitting programs. This analysis adds a burden that EPA 

had not considered when it completed the Tailoring Rule.

As explained in section II.C of the preamble, EPA also 

issued interim guidance entitled, “Guidance for Determining 

Best Available Control Technology for Reducing Carbon 

Dioxide Emissions from Bioenergy Production” to help 

permitting authorities establish a basis for concluding 

that under PSD Program the combustion of biomass fuels can 

be considered BACT for biogenic CO2 emissions at stationary 

sources until such time as the deferral becomes effective. 

This guidance may continue to assist permitting authorities 

where the deferral is not effective during the deferral 

period until EPA revises it or it is superseded by future 
 Page 75 of 104

guidance or rules. It should be noted that the guidance is 

non-binding, and case-by-case BACT determinations made in 

accordance with the guidance may nonetheless be subject to 

challenge in each permitting action. Accordingly, the 

interim guidance does not provide the same level of 

certainty to sources and decrease in administrative burdens 

to permitting authorities and sources that the deferral 

does.

EPA developed the interim BACT guidance primarily for 

application during step 1 of the phase-in of GHG permitting 

requirements under the Tailoring Rule. While the guidance 

suggests reasoning that may serve to reduce the resource 

demands of conducting a net carbon cycle analysis in the 

context of permitting, it does not eliminate the need for 

permitting authorities to conduct some evaluation of 

energy, environmental, and economic impacts in step 4 of 

the BACT analysis. The guidance discusses the complexities 

of conducting a net carbon cycle analysis, but places the 

emphasis on showing the economic and energy benefits of 

utilizing biomass. Permitting authorities that apply this 

approach still need to identify the specific energy and 

economic benefits of utilizing particular biomass 

feedstocks to apply this rationale. To the extent these 

benefits cannot be identified or shown to override other 
 Page 76 of 104

considerations, a permitting authority may need to explore 

the net carbon cycle impact in more depth to justify the 

conclusion that utilization of a biomass feedstock is BACT 

by itself. In states that do not elect to adopt the 

deferral, the incremental burden of conducting the analysis 

described in the guidance will have a more significant 

impact on the overall ability to administrate the 

permitting program in the context of step 2 of the GHG 

permitting than it did in step 1, where the overall 

increase in workload from incorporating GHG requirements 

into PSD permit reviews was less than it will be in step 2.

Legal Authority

A number of commenters argued that EPA had not 

demonstrated that the deferral was necessary to avoid 

administrative burden or impossibility, and that the 

science surrounding CO2 emissions from biogenic sources and 

their role in the carbon cycle is settled enough to show 

that use of some or all biogenic feedstocks and emissions 

do have an impact on net atmospheric concentrations of CO2, 

. We received several comments on EPA’s 

legal authority to issue the deferral. A number of 

commenters expressed the view that EPA lacked the 

scientific basis to defer the applicability of PSD and 

Title V permitting requirements to biogenic emissions of 

CO2.
 Page 77 of 104

or are not de minimis

EPA disagrees with the commenters’ characterization of 

the state of the science and administrative burdens facing 

permitting agencies and sources to account for biogenic 

sources of CO2 emissions as part of permitting actions. EPA 

notes that it also received a number of comments expressing 

the opposing view that a permanent deferral or exclusion 

was necessary because biogenic emissions of CO2 do not have 

an impact on atmospheric concentrations of CO2, or that use 

of certain categories of feedstock do not have such an 

impact. EPA also received comments from a number of 

permitting authorities and sources expressing the view that 

the science surrounding the accounting of net atmospheric 

CO2 emissions from biogenic sources, given the carbon cycle, 

warranted further study and development of an accounting 

framework to assist them with their permitting actions.

; therefore, these commenters argued 

that such emissions should be regulated under the PSD and 

Title V permitting programs.

EPA believes this diversity of views reflects the 

complexity of the science associated with accounting for 

biogenic CO2 emissions as part of the PSD and Title V

permitting programs. EPA agrees, based on information 

currently before the Agency, including information provided 

in response to the CFI and the proposal for this rule, that 
 Page 78 of 104

emissions from certain biomass feedstocks may have a 

negligible effect on atmospheric concentrations of CO2, but 

also believes based on the complexity of this evidence that 

the deferral to allow for further study is warranted. In 

addition, EPA is conducting an independent peer review by 

the Science Advisory Board of the science and accounting 

framework associated with biogenic CO2 emissions, which will 

benefit permitting authorities.

While the interim BACT guidance described elsewhere in 

the preamble may help alleviate some of this uncertainty 

and burden for permitting authorities where the deferral is 

not effective, we expect that more and more diverse users 

of biomass combustion or other biogenic CO2 sources are 

likely to be affected under step 2 of the Tailoring Rule 

because, under step 2, these sources can trigger permitting 

requirements based solely on their GHG emissions with no 

prerequisite requirement that they otherwise trigger PSD or 

Title V permitting requirements for a non-GHG pollutant. We 

believe, absent the deferral period and the completion of 

EPA’s full analysis of the unique technical issues 

associated with these diverse facilities emitting biogenic 

CO2, it would be particularly challenging for permitting 

authorities and facilities to process permits involving 

these emissions. 
 Page 79 of 104

A number of commenters challenged EPA’s authority to 

amend the regulatory definition of "subject to regulation"

to exclude biogenic sources of CO2 from regulation for three 

years under the administrative law doctrines and rationale 

articulated in the Tailoring Rule and elsewhere in this 

preamble. A number of commenters also expressed the view 

that the deferral would lead to significant development of 

the biomass industry during the deferral period and a 

permanent exclusion for these sources, in contradiction to 

the CAA’s goal of protecting air quality.

EPA disagrees with these commenters’ characterization 

of the legal authority and rationale in support of this 

interim deferral. As described in Section II.B. of this 

preamble, this interim deferral is intended only to 

temporarily exclude biogenic CO2 emissions from the 

definition of "subject to regulation," as that term was 

defined for purposes of the Tailoring Rule, for a period of 

three years, while EPA further considers, through notice 

and comment rulemaking, the approach to accounting for 

these emissions on a permanent basis. In response to 

commenters who speculate about the likelihood of 

significant development of the biomass industry or 

increases in the number of sources emitting biogenic CO2

during the deferral period, EPA notes that a decision to 
 Page 80 of 104

move forward with development of a facility is based on 

many economic and business factors, not just permitting 

requirements, that are beyond the scope of this final 

action.

This interim deferral represents a permissible 

application of well-established administrative law 

doctrines, necessitated by the scientific uncertainty 

surrounding the accounting of biogenic CO2 emissions, to 

develop a regulatory scheme that implements the CAA

consistent with congressional intent in a step-wise fashion 

designed to minimize administrative burdens and avoid 

premature regulation of sources of air pollution whose 

biogenic CO2 emissions could be shown to have de mimimis

EPA’s establishment of this deferral is permissible 

and, based upon the information currently before the 

Agency, narrowly tailored to effectuate congressional

intent. It appears that the potential may exist for EPA to 

determine that some other types of biomass feedstocks would 

have a negligible impact on the net carbon cycle impact 

impacts on a net carbon cycle basis after EPA completes 

further analysis. EPA notes that the issue of subsequent 

applicability of the PSD and Title V programs to facilities 

that may be permitted during the deferral period is 

addressed in sections II.C.
 Page 81 of 104

after further detailed examination of the science 

associated with biogenic CO2 emissions. Thus, if EPA were to 

require all bioenergy facilities to limit emissions of 

biogenic CO2 before this assessment is complete, it may 

later determine that such emissions have trivial impact on 

the net carbon cycle. To avoid this outcome, and because of 

the administrative burdens associated with accounting for 

net biogenic CO2 emissions relative to the carbon cycle, EPA 

believes an initial deferral of the PSD requirements for 

bioenergy and other biogenic sources to allow for 

subsequent, phased-in regulations is justified at this 

time. However, the possibility also remains that EPA’s 

detailed examination of the science of biogenic CO2 will 

demonstrate that the utilization of some biomass feedstocks 

for bioenergy production will have a significant impact on 

the net carbon cycle, making application of the PSD program 

requirements to such emissions necessary to fulfill 

congressional intent. 

The extensive workload requirements required to 

understand the net biogenic CO2 emissions from bioenergy 

facilities and other sources of biogenic CO2 emissions, as 

part of the PSD and Title V permit process, including 

specifically how to measure and account for biogenic CO2

emissions, would unnecessarily strain the resources of many 
 Page 82 of 104

permitting authorities and result in delays in processing 

permits for other applicants. Moreover, at present, 

devoting these limited permitting authority resources to 

biomass would not be productive in light of the previously 

described possibility that EPA may ultimately determine 

that the utilization of some or all biomass feedstocks for 

bioenergy has a negligible or de minimis

EPA received a comment arguing that the deferral was 

also supported under the "one-step-at-a-time" doctrine, 

which authorizes agencies to implement statutory 

requirements a step at a time. EPA also relied, in part, on 

this doctrine in finalizing the Tailoring Rule. 75 FR 

31514, 31578 (June 3, 2010).

impact on the net 

carbon cycle.

In the proposed rule, EPA stated in footnote 13 that 

the "one-step-at-a-time" doctrine was not relevant to this 

rulemaking. This statement was made without explanation.

The commenter stated "[b]ased on EPA’s statements in the 

Tailoring Rule, which does rely on the ‘one-step-at-a-time’ 

doctrine, it appears that the doctrine would apply equally 

well to EPA’s decision to delay regulation of biogenic CO2

emissions under the PSD and Title V programs." As explained 

in more detail elsewhere in the preamble, EPA now agrees 

that because of the complexity and uncertainty of the 
 Page 83 of 104

science associated with accounting for biogenic sources of 

CO2 that the interim deferral of the PSD and Title V program 

for such emissions would be a reasonable exercise of the 

"one-step-at-a-time" doctrine.

This rulemaking constitutes an initial step toward 

full compliance, and, seen in that light, is supported by 

the "one-step-at-a-time" doctrine. Even if the doctrine 

were found to apply only when an agency is committed to 

fully implementing statutory requirements according to 

their literal terms, we believe that the interim deferral 

promulgated in this final rule would be considered valid 

under the one-step-at-a-time doctrine. 

EPA received a number of comments in favor of 

expanding the deferral to CO2e or other GHGs, not just CO2.

EPA disagrees with the commenters seeking expansion of the 

deferral to CO2e. As explained elsewhere in the preamble, 

while CH4 and N2O are produced when biomass is combusted, 

the level of emissions and resulting impact on atmospheric 

concentrations of these gases are primarily related to the 

feedstock handling and combustion conditions at the 

specific plant rather than the source of the feedstocks. We 

finalized this rule as proposed and included only biogenic 

CO2 emissions for this reason, and note that emissions of 

non-CO2 GHG are typically a small proportion of the total 
 Page 84 of 104

GHG emissions from combustion of biologically based 

material. Since the non-CO2 GHG are so small relative to 

CO2, the deferral of biogenic CO2 emissions will ensure the 

biomass combustion projects will likely not meet the 

applicability thresholds on their CH4 and N2O emissions 

alone. Subsequent regulations to establish treatment of 

specific sources of biogenic emissions under the PSD and 

Title V programs are beyond the scope of this action. 

As noted above, we received a large number of comments 

that provided the same or similar information to the 

comments received through the CFI last year. Those comments 

are summarized briefly below and also contained in the 

response to comments document. While we did not respond to 

these comments as they are outside the scope of this 

rulemaking, we will consider many of them during our 

ongoing work on biogenic CO2 emissions.

C. Comments on Science, Accounting, and Economic Issues

Carbon cycle dynamics. We received several comments on 

the net atmospheric impact of biomass. Some commenters 

supported the conclusion that biomass has zero net 

atmospheric impact based on the premise that biomass is 

part of the natural carbon cycle and does not add 

additional carbon to the atmosphere. Conversely, other 

commenters supported the conclusion that biomass combustion 
 Page 85 of 104

increases the atmospheric carbon load. Issues raised by 

commenters, including the time delays between sequestration 

from and release to the atmosphere, differences between 

feedstocks, influences of different spatial scale, and 

differences in combustion efficiencies, are important in 

the development of accounting methodologies and will be 

considered during the scientific review that will take 

place during the three-year deferral period. EPA will 

consider such issues in order to account for biogenic CO2

emissions from stationary sources in ways that are 

scientifically sound and manageable in practice.

Accounting methodologies used by other programs. We 

received several comments discussing the accounting 

methodologies used in international, U.S. government 

(including U.S. EPA) and state regulatory and policy 

programs. The accounting approaches taken by other 

programs, including other EPA programs, will be considered

in EPA’s detailed examination of the scientific and 

technical issues related to biogenic CO2 emissions and any 

subsequent rulemakings we undertake during the deferral 

period.

Components of accounting methodologies. We received

several comments highlighting the challenges associated 

with different components of biogenic CO2 emissions 
 Page 86 of 104

accounting methodologies, including using "business-asusual" (BAU) projections, employing case-by-case analyses 

and considering a feedstock-based accounting approach. EPA 

will consider these topics in our review of the scientific 

and technical issues related to accounting for biogenic CO2

emissions, as well as in the subsequent rulemaking to 

establish the treatment of these emissions in the PSD and 

Title V programs. 

Forest economics and sustainability. We received some 

comments supporting forest biomass as an energy feedstock 

and discussing the role of bioenergy markets in sustaining 

forest conservation. EPA thanks the commenters for these 

comments and considers these views beyond the scope of this 

deferral action.

We received some comments on the PSD and Title V

programs and how they relate to the Tailoring Rule, 

including comments about the need to adjust the thresholds 

for GHG applicability, facilities that should or should not 

be covered, and the ultimate treatment of biogenic CO2 in 

these programs. These comments are contained in the 

response to comments document. The dates, thresholds and 

other requirements established in the Tailoring Rule are 

D. Comments on PSD, Title V and the Tailoring Rule
 Page 87 of 104

not a subject of this rulemaking and thus these comments 

are outside the scope of this action.

We received some comments on the interim guidance 

document released in March 2011 designed to help permitting 

authorities establish a basis for concluding that under PSD 

and Title V Programs the combustion of biomass fuels can be 

considered BACT for biogenic CO2 emissions at stationary 

sources before the deferral becomes effective. These 

comments are contained in the response to comments document 

and are briefly summarized below. While these comments are 

outside the scope of this rulemaking, we will likely be 

considering many of them during our ongoing work on 

biogenic CO2 emissions.

E. Comments on the Interim Guidance

Some commenters asserted that biogenic fuels should 

not be considered BACT for controlling biogenic CO2

emissions at energy projects, while others supported the 

inclusion of biogenic fuels as BACT in the interim 

guidance. As stated in the March 2011 interim guidance 

document, EPA has not provided a final determination of 

BACT for any particular source, since such determinations 

can only be made by individual permitting authorities on a 

case-by-case basis after consideration of the record in 

each case. Upon consideration of the record in an 
 Page 88 of 104

individual case, if a permitting authority has a reasoned 

basis to address particular issues in a different manner 

than EPA recommends in the bioenergy BACT guidance, they 

have the discretion to do so. EPA is granting the deferral 

of biogenic CO2 emissions from stationary source permitting 

requirements because the issue of accounting for the net 

atmospheric impact of biogenic CO2 emissions is complex 

enough that further consideration of this important issue 

is warranted.

IV. Statutory and Executive Order Review

This action is not a "significant regulatory action"

under the terms of Executive Order 12866 (58 FR 51735, 

October 4, 1993) and is therefore not subject to review 

under Executive Orders 12866 and 13563 (76 FR 3821, January 

21, 2011). 

A. Executive Order 12866: Regulatory Planning and Review 

and Executive Order 13563: Improving Regulation and 

Regulatory Review

This action does not impose any new information 

collection burden. Instead, this action will reduce costs 

incurred by any facility with biogenic CO2 emissions, as 

B. Paperwork Reduction Act
 Page 89 of 104

well as permitting authorities, relative to the costs that 

would be incurred if EPA did not revise the rule. 

An agency may not conduct or sponsor, and a person is 

not required to respond to, a collection of information 

unless it displays a currently valid OMB control number. 

The OMB has previously approved the information collection 

requirements contained in the existing regulations for PSD 

(see, e.g., 40 CFR 52.21) and Title V (see 40 CFR parts 70 

and 71) under the provisions of the Paperwork Reduction 

Act, 44 U.S.C. 3501 et seq. and has assigned OMB control 

number 2060–0003 and OMB control number 2060–0336. The OMB 

control numbers for EPA’s regulations in 40 CFR are listed 

in 40 CFR part 9.

The Regulatory Flexibility Act (RFA) generally 

requires an agency to prepare a regulatory flexibility 

analysis of any rule subject to notice and comment 

rulemaking requirements under the Administrative Procedure 

Act or any other statute, unless the agency certifies that 

the rule will not have a significant economic impact on a 

substantial number of small entities. Small entities 

include small businesses, small organizations, and small 

governmental jurisdictions.

C. Regulatory Flexibility Act
 Page 90 of 104

For purposes of assessing the impacts of this action 

on small entities, small entity is defined as: (1) A small 

business as defined by the Small Business Administration’s 

regulations at 13 CFR 121.201; (2) a small governmental 

jurisdiction that is a government of a city, county, town, 

school district or special district with a population of 

less than 50,000; and (3) a small organization that is any 

not-for-profit enterprise that is independently owned and 

operated and is not dominant in its field.

After considering the economic impacts of this final 

action on small entities, I certify that this action will

not have a significant economic impact on a substantial 

number of small entities. In determining whether a rule has 

a significant economic impact on a substantial number of 

small entities, the impact of concern is any significant 

adverse economic impact on small entities, since the 

primary purpose of the regulatory flexibility analyses is 

to identify and address regulatory alternatives "which 

minimize any significant economic impact of the rule on 

small entities." 5 U.S.C. 603 and 604. Thus, an agency may 

certify that a rule will not have a significant economic 

impact on a substantial number of small entities if the 

rule relieves regulatory burden, or otherwise has a 
 Page 91 of 104

positive economic effect on all of the small entities 

subject to the rule. 

We believe that this final rule will relieve the 

necessary analysis and corresponding workload requirements 

for most affected facilities, including small businesses, 

subject to the PSD and Title V programs. As a result, the 

program changes provided in this rule are not expected to 

result in a significant economic impact on a substantial 

number of small entities. In addition, EPA determined that 

the final rulemaking would not have a significant impact on 

small governmental jurisdictions. The EPA has therefore 

concluded that this final action will not have a 

significant economic impact on a substantial number of 

small entities. 

This final rule does not contain a Federal mandate 

that may result in expenditures of $100 million or more for 

state, local, and tribal governments, in the aggregate, or 

the private sector in any one year. Only those few states 

whose permitting authorities do not implement the federal 

PSD and Title V rules by reference in their SIPs will have 

a small increase in burden. If those states choose to adopt 

this deferral, they will have to amend their corresponding 

SIPs to incorporate the amendments from today’s action, as 

D. Unfunded Mandates Reform Act (UMRA)
 Page 92 of 104

the deferral that we finalized will not otherwise apply to 

the PSD and Title V programs. Thus, this rule is not 

subject to the requirements of sections 202 or 205 of the 

UMRA.

This rule is also not subject to the requirements of 

section 203 of UMRA because it contains no regulatory 

requirements that might significantly or uniquely affect 

small governments. As discussed earlier, this rule is 

expected to result in an administrative burden reduction 

for all affected permitting authorities and permittees, 

including small governments.

This action does not have federalism implications. It 

will not have substantial direct effects on the states, on 

the relationship between the national government and the 

states, or on the distribution of power and 

responsibilities among the various levels of government, as 

specified in EO 13132. These amendments will simplify and 

reduce the burden of implementing the PSD and Title V

operating permit programs, by deferral of PSD and Title V

application requirements to biogenic CO2 emissions at a 

facility. Thus, EO 13132 does not apply to this action. 

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination 

with Indian Tribal Governments
 Page 93 of 104

Executive Order 13175, entitled "Consultation and 

Coordination with Indian Tribal Governments" (59 FR 22951, 

November 6, 2000), requires EPA to develop an accountable 

process to ensure "meaningful and timely input by Tribal 

officials in the development of regulatory policies that 

have Tribal implications."

The EPA has concluded that this final rule may have 

Tribal implications. However, it will neither impose 

substantial direct compliance costs on Tribal government, 

nor preempt Tribal law. There are no Tribal authorities 

currently issuing PSD and Title V permits; however, this 

may change in the future.

The EPA interprets Executive Order 13045 (62 FR 19885, 

April 23, 1997) as applying only to those regulatory 

actions that concern health or safety risks, such that the 

analysis required under section 5–501 of the EO has the 

potential to influence the regulation. This action is not 

subject to Executive Order 13045 because it does not 

establish an environmental standard intended to mitigate 

health or safety risks.

G. Executive Order 13045: Protection of Children from 

Environmental Health Risks and Safety Risks

H. Executive Order 13211: Actions that Significantly Affect 

Energy Supply, Distribution, or Use
 Page 94 of 104

This action is not a "significant energy action" as 

defined in EO 13211 (66 FR 28355, May 22, 2001) because it

is not likely to have a significant adverse effect on the 

supply, distribution, or use of energy. Further, we have 

concluded that this rule is not likely to have any adverse 

energy effects because this action would not create any new 

requirements for sources in the energy supply, 

distribution, or use sectors.

Section 12(d) of the National Technology Transfer and 

Advancement Act of 1995 (NTTAA), Public Law No. 104-113 (15 

U.S.C. 272 note) directs EPA to use voluntary consensus 

standards in its regulatory activities unless to do so 

would be inconsistent with applicable law or otherwise 

impractical. Voluntary consensus standards are technical 

standards (e.g., materials specifications, test methods, 

sampling procedures, and business practices) that are 

developed or adopted by voluntary consensus standards 

bodies. The NTTAA directs EPA to provide Congress, through 

OMB, explanations when the Agency decides not to use 

available and applicable voluntary consensus standards.

I. National Technology Transfer and Advancement Act

This action does not involve technical standards. 

Therefore, EPA is not considering the use of any voluntary 

consensus standards.
 Page 95 of 104

Executive Order 12898 (59 FR 7629, February 16, 1994) 

establishes Federal executive policy on environmental 

justice. Its main provision directs Federal agencies, to 

the greatest extent practicable and permitted by law, to 

make environmental justice part of their mission by 

identifying and addressing, as appropriate, 

disproportionately high and adverse human health or 

environmental effects of their programs, policies, and 

activities on minority populations and low-income 

populations in the U.S. 

J. Executive Order 12898: Federal Actions to Address 

Environmental Justice in Minority Populations and LowIncome Populations

The EPA has determined that this rule will not have 

disproportionately high and adverse human health or 

environmental effects on minority or low-income populations 

because it does not affect the level of protection provided 

to human health or the environment, as any impacts that it 

will have will be global in nature and will not affect 

local communities or populations in a manner that adversely 

affects the level of protection provided to human health or 

the environment.

K. Congressional Review Act
 Page 96 of 104

The Congressional Review Act, 5 U.S.C. 801 et seq., as 

added by the Small Business Regulatory Enforcement Fairness 

Act of 1996 (SBREFA), generally provides that before a rule 

may take effect, the agency promulgating the rule must 

submit a rule report, which includes a copy of the rule, to 

each House of the Congress and to the Comptroller General 

of the United States. EPA will submit a report containing 

this rule and other required information to the U.S. 

Senate, the U.S. House of Representatives, and the 

Comptroller General of the U.S. prior to publication of the 

rule in the Federal Register. A major rule cannot take 

effect until 60 days after it is published in the Federal 

Register. This action is not a "major rule" as defined by 5 

U.S.C. 804(2). This rule will be effective on [INSERT THE 

DATE OF PUBLICATION IN THE FEDERAL REGISTER].

List of Subjects 

Environmental protection, Administrative practice and 

procedure, Air pollution control, Carbon dioxide, Carbon 

dioxide equivalents, Greenhouse gases, Intergovernmental 

relations, Methane, Nitrous oxide.

40 CFR Part 51

Environmental protection, Administrative practice and 

procedure, Air pollution control, Carbon dioxide, Carbon 

40 CFR Part 52
 Page 97 of 104

dioxide equivalents, Greenhouse gases, Intergovernmental 

relations, Methane, Nitrous oxide
Deferral for CO2 Emissions from Bioenergy and Other Biogenic 

Sources Under the PSD and Title V Programs - Final Rule

 Page 98 of 104

Environmental protection, Administrative practice and 

procedure, Air pollution control, Carbon dioxide, Carbon 

dioxide equivalents, Greenhouse gases, Intergovernmental 

relations, Methane, Nitrous oxide.

40 CFR Part 70

Environmental protection, Administrative practice and 

procedure, Air pollution control, Carbon dioxide, Carbon 

dioxide equivalents, Greenhouse gases, Intergovernmental 

relations, Methane, Nitrous oxide.

40 CFR Part 71

Dated: 

__________

Lisa P. Jackson, 

__________

Administrator.
 Page 99 of 104

For the reasons stated in the preamble, Title 40, chapter 

I, of the Code of Federal Regulations is amended as 

follows: 

PART 51 -- [AMENDED]

 1. The authority citation for part 51 continues to read 

as follows:

 Authority: 23 U.S.C. 101; 42 U.S.C. 7401-7671q.

Subpart I -- [Amended]

 2. Section 51.166 is amended by revising paragraph 

(b)(48)(ii)(a) to read as follows:

* * * * *

§51.166 Prevention of significant deterioration of air 

quality.

 (b)* * *

 (48)* * *

 (ii)* * *

 (a) Multiplying the mass amount of emissions (tpy), for 

each of the six greenhouse gases in the pollutant GHGs, by 

the gas’s associated global warming potential published at 

Table A–1 to subpart A of part 98 of this chapter — Global 

Warming Potentials. For purposes of this paragraph 

(b)(48)(ii)(a), prior to [INSERT DATE 3 YEARS FROM DATE OF 

PUBLICATION IN THE FEDERAL REGISTER], the mass of the 
Page 100 of 104

greenhouse gas carbon dioxide shall not include carbon 

dioxide emissions resulting from the combustion or 

decomposition of non-fossilized and biodegradable organic 

material originating from plants, animals, or microorganisms (including products, by-products, residues and 

waste from agriculture, forestry and related industries as 

well as the non-fossilized and biodegradable organic 

fractions of industrial and municipal wastes, including 

gases and liquids recovered from the decomposition of nonfossilized and biodegradable organic material).

* * * * *

PART 52 -- [AMENDED]

 3. The authority citation for part 52 continues to read 

as follows:

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

Subpart A -- [Amended]

 4. Section 52.21 is amended by revising paragraph 

(b)(49)(ii)(a) to read as follows:

* * * * *

§52.21 Prevention of significant deterioration of air 

quality.

 (b)* * *

 (49)* * *
Page 101 of 104

 (ii)* * *

 (a)

* * * * *

Multiplying the mass amount of emissions (tpy), for 

each of the six greenhouse gases in the pollutant GHGs, by 

the gas’s associated global warming potential published at 

Table A–1 to subpart A of part 98 of this chapter — Global 

Warming Potentials. For purposes of this paragraph, prior 

to [INSERT DATE 3 YEARS FROM DATE OF PUBLICATION IN THE 

FEDERAL REGISTER]], the mass of the greenhouse gas carbon 

dioxide shall not include carbon dioxide emissions 

resulting from the combustion or decomposition of nonfossilized and biodegradable organic material originating 

from 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 decomposition of non-fossilized 

and biodegradable organic material). 

PART 70 -- [AMENDED]

 5. The authority citation for part 70 continues to read 

as follows:

 Authority: 42 U.S.C. 7401, et seq.
Page 102 of 104

 6. Section 70.2 is amended by revising paragraph (2) of 

the definition of "Subject to regulation" to read as 

follows:

* * * * *

§70.2 Definitions.

 

 * * * * *

Subject to Regulation

 (2) The term tpy CO2 equivalent emissions (CO2e) shall 

represent an amount of GHGs emitted, and shall be computed 

by multiplying the mass amount of emissions (tpy), for each 

of the six greenhouse gases in the pollutant GHGs, by the 

gas’s associated global warming potential published at 

Table A–1 to subpart A of part 98 of this chapter — Global 

Warming Potentials, and summing the resultant value for

each to compute a tpy CO2e. For purposes of this paragraph, 

prior to [INSERT DATE 3 YEARS FROM DATE OF PUBLICATION IN 

THE FEDERAL REGISTER], the mass of the greenhouse gas 

carbon dioxide shall not include carbon dioxide emissions 

resulting from the combustion or decomposition of nonfossilized and biodegradable organic material originating 

from plants, animals, or micro-organisms (including 

products, by-products, residues and waste from agriculture, 

forestry and related industries as well as the non-
Page 103 of 104

fossilized and biodegradable organic fractions of 

industrial and municipal wastes, including gases and 

liquids recovered from the decomposition of non-fossilized 

and biodegradable organic material). 

* * * * *

PART 71 -- [AMENDED]

 7. The authority citation for part 71 continues to read 

as follows:

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

Subpart A -- [Amended]

 8. Section 71.2 is amended by revising paragraph (2) of 

the definition of "Subject to regulation" to read as 

follows:

* * * * *

§71.2 Definitions.

 

 * * * * * 

Subject to Regulation

 (2) The term tpy CO2 equivalent emissions (CO2e) shall 

represent an amount of GHGs emitted, and shall be computed 

by multiplying the mass amount of emissions (tpy), for each 

of the six greenhouse gases in the pollutant GHGs, by the 

gas’s associated global warming potential published at 

Table A–1 to subpart A of part 98 of this chapter — Global 
Page 104 of 104

Warming Potentials, and summing the resultant value for

each to compute a tpy CO2e. For purposes of this paragraph, 

prior to [INSERT DATE 3 YEARS FROM DATE OF PUBLICATION IN 

THE FEDERAL REGISTER], the mass of the greenhouse gas 

carbon dioxide shall not include carbon dioxide emissions 

resulting from the combustion or decomposition of nonfossilized and biodegradable organic material originating 

from 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 decomposition of non-fossilized 

and biodegradable organic material). 

* * * * *