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###### Environmental Protection Agency

          - 40 CFR Part 52
          - [EPA-R04-OAR-2024-0006; FRL-12050-01-R4]

# AGENCY:

Environmental Protection Agency (EPA).

# ACTION:

Proposed rule.

# SUMMARY:

                        The Environmental Protection Agency (EPA) is proposing to approve a State Implementation Plan (SIP) revision submitted through the South Carolina Department of Health and Environmental Control (SC DHEC) on September 26, 2023, regarding updates to the State's Cross-State Air Pollution Rule (CSAPR) emissions trading programs. The SIP revision incorporates by reference (IBRs) certain amendments EPA has made to the regulations for the Federal CSAPR trading programs for annual emissions of nitrogen oxides (NOX) and sulfur dioxide (SO2) for large electric generating units (EGUs). EPA created these Federal trading programs in 2011 as market-based mechanisms for South Carolina and certain other States to address their obligations to downwind States under the Clean Air Act (CAA or Act)'s good neighbor provision with respect to the national ambient air quality standards (NAAQS) for fine particulate matter (PM2.5). EPA is proposing to approve South Carolina's September 26, 2023, SIP revision because it is consistent with EPA's good neighbor CSAPR trading programs and the CAA.                    

# DATES:

Comments must be received on or before January 9, 2025.

# ADDRESSES:

                        Submit your comments, identified by Docket ID No. EPA-R04-OAR-2024-0006 at                         *www.regulations.gov.*                         Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from                         *Regulations.gov*. EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (                        *i.e.,*                         on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit                         *https://www.epa.gov/​dockets/​commenting-epa-dockets.*

# FOR FURTHER INFORMATION CONTACT:

                        Josue Ortiz Borrero, Air Regulatory Management Section, Air Planning and Implementation Branch, Air and Radiation Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW, Atlanta, Georgia 30303-8960. Mr. Ortiz can be reached via phone number (404) 562-8085 or via electronic mail at                         *ortizborrero.josue@epa.gov.*

# SUPPLEMENTARY INFORMATION:

## I. Overview

                    EPA is proposing to approve the portions of SC DHEC's [1]                                          September 26,                           ( print page 99181)                        2023, SIP submission that updates South Carolina's State trading programs at Regulation 61-62.97, Cross-State Air Pollution Rule (CSAPR) Trading Program, Subpart A—South Carolina CSAPR NOX                     Annual Trading Program, and Subpart B—South Carolina CSAPR SO2                     Group 2 Trading Program. Large EGUs in South Carolina are subject to these two State CSAPR trading programs for annual NOX                     and SO2                     emissions, which are precursors to PM2.5, to address the State's good neighbor obligation for the 1997 annual PM2.5                     NAAQS. The State CSAPR trading programs are integrated with the Federal CSAPR NOX                     Annual Trading Program and the Federal CSAPR SO2                     Group 2 Trading Program established by EPA's regulations at 40 CFR part 97, subparts AAAAA and DDDDD, respectively. As adopted by the State before this SIP revision and as previously approved by EPA into the SIP, the State's CSAPR trading program regulations generally IBR the Federal CSAPR trading program regulations as the Federal regulations had been amended through October 26, 2016. The September 26, 2023, SIP submission would update the IBR language to reflect amendments EPA made to the Federal CSAPR trading program regulations in the 2021 Revised CSAPR Update [2]                                          and the 2022 Recordation Rule.[3]                                          The SIP revision would also correct two cross-references in the State's rule. Section II, below, briefly summarizes the framework of the CSAPR trading programs and how those programs are implemented in South Carolina.                

                    EPA is proposing to approve South Carolina's September 26, 2023, SIP revision because it is consistent with EPA's good neighbor CSAPR trading programs and the CAA.[4]                                          Please refer to the                     **Federal Register**                     citations referenced herein, for additional detailed background on the CSAPR and subsequent rulemakings.                

## II. Background on CSAPR and CSAPR-Related Rulemakings

                    EPA published the original CSAPR in August 2011 to address the requirements of CAA section 110(a)(2)(D)(i)(I), known as the “good neighbor” provision, concerning interstate transport of air pollution.[5] *See*42 U.S.C. 7410(a)(2)(D)(i)(I). Acting to address the same statutory provision, EPA published the CSAPR Update [6]                                          in October 2016 and the Revised CSAPR Update in April 2021. The three rules collectively require 27 southern, midwestern, and eastern States to limit their statewide emissions of SO2                     and/or NOX                     in order to mitigate transported air pollution unlawfully impacting other States' ability to attain or maintain one or more of the following four NAAQS: the 1997 annual PM2.5                     NAAQS, the 2006 24-hour PM2.5                     NAAQS, the 1997 8-hour ozone NAAQS, and the 2008 8-hour ozone NAAQS. To implement the required emissions reductions, the rules include Federal implementation plans (FIPs) that require EGUs in each covered State to participate in one or more of six Federal emissions trading programs established under regulations set forth at 40 CFR part 97, subparts AAAAA through EEEEE and GGGGG.[7] 

                    As part of the original CSAPR in 2011, EPA determined that emissions from South Carolina significantly contributed to nonattainment or interference with maintenance of the 1997 ozone NAAQS and the 1997 24-hour PM2.5                     NAAQS in other States.[8]                                          To address South Carolina's good neighbor obligations with respect to the 1997 ozone NAAQS, the State's large EGUs became subject to the Federal CSAPR NOX                     Ozone Season Trading Program established in subpart BBBBB of 40 CFR part 97, and to address the State's good neighbor obligations with respect to the 1997 PM2.5                     NAAQS, the State's large EGUs because subject to the Federal CSAPR NOX                     Annual Trading Program established in subpart AAAAA of 40 CFR part 97 and the Federal CSAPR SO2                     Group 2 Trading Program established in subpart DDDDD of 40 CFR part 97.[9] 

                    In the 2016 CSAPR Update, EPA determined that emissions from South Carolina do not significantly contribute to nonattainment or interfere with maintenance of the 1997 or 2008 ozone NAAQS in other States.[10]                                          As a result, EGUs in South Carolina ceased to be subject to the Federal CSAPR NOX                     Ozone Season Trading Program requirements starting with the 2017 ozone season.[11]                                          The CSAPR Update included technical corrections to all the trading programs established in CSAPR but did not otherwise address the 1997 or 2006 PM2.5                     NAAQS. South Carolina's EGUs that meet the CSAPR applicability criteria therefore continued to be subject to the CSAPR requirements to participate in the Federal CSAPR NOX                     Annual Trading Program and the Federal CSAPR SO2                     Group 2 Trading Program to address the State's good neighbor obligation with respect to the 1997 annual PM2.5                     NAAQS.                

                    CSAPR includes provisions under which States may submit and EPA will approve SIP revisions to modify or replace the CSAPR FIP requirements while allowing States to continue to meet their good neighbor obligations using either CSAPR's Federal emissions trading programs or State emissions trading programs integrated with the Federal programs.[12]                                          South Carolina took advantage of these provisions in 2017. That year, South Carolina submitted and EPA approved revisions to South Carolina's SIP establishing two State CSAPR trading programs that replaced the two Federal CSAPR trading programs regarding South Carolina EGUs for annual emissions of NOX                     and SO2                    .[13]                                          EPA approved South Carolina's 2017 SIP submission in an action published on October 13, 2017, which added Regulation 61-62.97,                     *Cross-State Air Pollution Rule (CSAPR) Trading Program,*                     to the South Carolina SIP. This rule contains two subparts: 61-62.97, Subpart A—South Carolina CSAPR NOX                     Annual Trading Program, and 61-62.97, Subpart B—South Carolina CSAPR SO2                     Group 2 Trading Program. In general, each subpart in South Carolina's CSAPR                           ( print page 99182)                        State trading program rule was designed to replace the corresponding Federal trading program regulations.[14]                                          South Carolina's CSAPR trading programs are integrated with the Federal CSAPR NOX                     Annual Trading Program and the Federal CSAPR SO2                     Group 2 Trading Program. The State trading programs are substantively identical to the Federal trading programs as amended in the CSAPR Update.[15] 

                    Since EPA's approval of the two State CSAPR trading programs into South Carolina's SIP in 2017, EPA has promulgated changes to the Federal CSAPR trading programs at 40 CFR part 97, subparts AAAAA and DDDDD, in the Revised CSAPR Update in 2021 and the Recordation Rule in 2022. The primary purpose of the Revised CSAPR Update rulemaking was to complete the evaluation of good neighbor obligations of certain States (not including South Carolina) with respect to the 2008 ozone NAAQS.[16]                                          However, that rule also made certain amendments to subparts AAAAA and DDDDD of part 97, including adjustments to the procedures for allocating allowances from the portions of the States' emissions budgets set aside for potential allocation to new units (with conforming adjustments to the assurance provisions) [17]                                          as well as extensions to the deadlines for EPA to record allocations of allowances in sources' compliance accounts and for sources to hold allowances after each control period, whether the sources participate in the integrated trading programs under FIPs or under approved SIP revisions. The Recordation Rule further extended the deadlines for EPA to record allocations of allowances in sources' compliance accounts.                

                    South Carolina's current September 26, 2023, SIP revision would update the State's Air Pollution Control Regulations and Standards at Regulation 61-62.97 to align with the changes made by EPA to the Federal CSAPR NOX                     Annual Trading Program at 40 CFR part 97, subpart AAAAA, and the Federal CSAPR SO2                     Group 2 Trading Program at 40 CFR part 97, subpart DDDDD, in the Revised CSAPR Update and the Recordation Rule.                

## III. South Carolina's SIP Submission and EPA's Analysis

### A. South Carolina's SIP Submittal

                    As described in section II of this preamble, EPA approved South Carolina's CSAPR SIP revision adopting the State rule at Regulation 61-62.97 in an action published on October 13, 2017, replacing the Federal CSAPR NOX                     Annual and SO2                     Group 2 trading programs at 40 CFR part 97, subparts AAAAA and DDDDD, for South Carolina EGUs with State CSAPR trading programs that are integrated with and substantively identical to the Federal trading programs.[18]                                          South Carolina's September 26, 2023, SIP submission seeks approval into the SIP of the State's revisions to its State CSAPR trading program rules that incorporate by reference more recent amendments to the Federal CSAPR trading program regulations. Specifically, the September 26, 2023, SIP submission revises the IBR language at Regulation 61-62.97, subpart A, paragraph 1, and subpart B, paragraph 1, to IBR specified revisions to the Federal CSAPR trading programs made after the previous October 26, 2016, IBR date and through August 26, 2022. The submission also corrects existing cross-references in Regulation 61-62.97, subpart A, paragraph 3, and subpart B, paragraph 3.                

### B. EPA's Analysis of South Carolina's SIP Submission

                    EPA is proposing to approve the portions of South Carolina's September 26, 2023, SIP submission that update Regulation 61-62.97 by incorporating the amendments to the Federal CSAPR NOX                     Annual and SO2                     Group 2 trading programs at 40 CFR part 97 made in the Revised CSAPR Update and the Recordation Rule and by making technical corrections to cross-references. EPA's analysis below describes the specific changes included in the portions of the SIP submission that EPA is proposing to approve.                

                    South Carolina's September 26, 2023, SIP revision makes two distinct updates to the State CSAPR trading program rules at Regulation 61-62.97. First, the SIP submission updates the IBR language at subpart A, paragraph 1, and subpart B, paragraph 1. The previously approved language IBRs “the provisions of the July 1, 2016, edition” of 40 CFR part 97, subparts AAAAA and DDDDD, “as amended at 81 FR [74604-07 or 74618-21] (October 26, 2016),” where the referenced amendment is a citation to specific pages of the CSAPR Update. The September 26, 2023, SIP revision removes the phrase “as amended at 81 FR [74604-07 or 74618-21] (October 26, 2016)” and replaces it with the new language “. . . as subsequently amended upon publication in the                     **Federal Register**                     as listed below . . .” and then adds tables [19]                                          with citations to the CSAPR Update (81 FR 74504; October 26, 2016), the Revised CSAPR Update (86 FR 23054; April 30, 2021), and the Recordation Rule (87 FR 52473; August 26, 2022). The revised IBR language also adds the phrase “as if fully repeated herein” to clarify that the text of the Federal regulations covered by the IBR is to be interpreted as if that text was repeated verbatim in the State's own regulations. The revisions align the format and phrasing of the IBR language in the State's CSAPR trading program regulations with the format and phrasing of the IBR language in the State's existing New Source Performance Standards (NSPS) and National Emission Standards for Hazardous Air Pollutants (NESHAP) regulations.                

                    The second update to the State CSAPR trading program rules at Regulation 61-62.97 in South Carolina's SIP submission revises subpart A, paragraph 3, and subpart B, paragraph 3, to correct existing cross-references. As originally adopted into the State's regulations, these paragraphs provided for “40 CFR 97.404(a)(1) and (b)(1)” and “40 CFR 97.704(a)(1) and (b)(1)” in the Federal trading program regulations covered by the IBR to be interpreted with specified wording changes needed to ensure that any EGUs in areas of Indian country within the State's borders continue to be covered by the Federal trading program regulations rather than the State trading program                           ( print page 99183)                        regulations. While EPA agreed with the State's wording changes, the paragraph citations were not entirely correct. The revisions included in this SIP revision retain the same wording changes but correct the paragraph citations so that the wording changes apply to “40 CFR 97.404(a)(1) and (b)” and “40 CFR 97.704(a)(1) and (b)” instead.                

                    The changes included in the September 26, 2023, SIP submission make the State CSAPR trading program regulations more consistent with the current Federal CSAPR trading program regulations by incorporating amendments that EPA made to the Federal trading program regulations after approving South Carolina's CSAPR trading program regulations into the SIP and by correcting cross-references. EPA therefore is proposing to approve the portions of South Carolina's September 26, 2023, SIP submission that revise Regulation 61-62.97. EPA believes these portions of the SIP submission are consistent with the Federal CSAPR NOX                     Annual and SO2                     Group 2 trading program regulations and the implementing provisions that govern a full CSAPR SIP revision and that the SIP as revised would continue to satisfy the State's good neighbor obligation pursuant to CAA section 110(a)(2)(D)(i)(I) to prohibit emissions which will significantly contribute to nonattainment or interfere with maintenance of the 1997 annual PM2.5                     NAAQS in any other State.                

## IV. Incorporation by Reference

                    In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, and as discussed in section III of this preamble, EPA is proposing to incorporate by reference South Carolina Regulation 61-62.97, State effective August 25, 2023, which adopts and incorporates by reference Federal amendments to 40 CFR part 97, subpart AAAAA—CSAPR NOX                     Annual Trading Program and subpart DDDDD—CSAPR SO2                     Group 2 Trading Program promulgated after October 26, 2016, through August 26, 2022. EPA has made, and will continue to make, these materials generally available through                     *www.regulations.gov*                     and at the EPA Region 4 office (please contact the person identified in the                     **For Further Information Contact**                     section of this preamble for more information).                

## V. Proposed Action

EPA is proposing to approve the September 26, 2023, South Carolina SIP revision consisting of changes to Regulation 61-62.97, CSAPR Trading Program, in the South Carolina SIP for the reasons discussed above.

## VI. Statutory and Executive Order Reviews

                    Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations.                     *See*42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely proposes to approve State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this proposed action:                
    - Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 ( 58 FR 51735 , October 4, 1993) and 14094 ( 88 FR 21879 , April 11, 2023);
    - Does not impose an information collection burden under the provisions of the Paperwork Reduction Act ( 44 U.S.C. 3501  et seq. );                
    - Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act ( 5 U.S.C. 601  et seq. );                
    - Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 ( Pub. L. 104-4 );
    - Does not have federalism implications as specified in Executive Order 13132  ( 64 FR 43255 , August 10, 1999);
    - Is not subject to Executive Order 13045  ( 62 FR 19885 , April 23, 1997) because it approves a State program;
    - Is not a significant regulatory action subject to Executive Order 13211  ( 66 FR 28355 , May 22, 2001); and
    - Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 ( 15 U.S.C. 272 note ) because application of those requirements would be inconsistent with the CAA.

Because this proposed action merely proposes to approve State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law, this proposed action for the State of South Carolina does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). Therefore, this proposed action will not impose substantial direct costs on Tribal governments or preempt Tribal law. The Catawba Indian Nation (CIN) Reservation is located within the boundary of York County, South Carolina. Pursuant to the Catawba Indian Claims Settlement Act, S.C. Code Ann. 27-16-120 (Settlement Act), “all State and local environmental laws and regulations apply to the [Catawba Indian Nation] and Reservation and are fully enforceable by all relevant State and local agencies and authorities.” The CIN also retains authority to impose regulations applying higher environmental standards to the Reservation than those imposed by State law or local governing bodies, in accordance with the Settlement Act.

Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on communities with environmental justice (EJ) concerns to the greatest extent practicable and permitted by law. Executive Order 14096 (Revitalizing Our Nation's Commitment to Environmental Justice for All, 88 FR 25251, April 26, 2023) builds on and supplements E.O. 12898 and defines EJ as, among other things, the just treatment and meaningful involvement of all people regardless of income, race, color, national origin, or Tribal affiliation, or disability in agency decision-making and other Federal activities that affect human health and the environment.

South Carolina did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this proposed action. Due to the nature of the action being proposed here, this proposed action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this proposed action, and there is no information in the record inconsistent with the stated goal of E.O. 12898/14096 of achieving EJ for communities with EJ concerns.

# List of Subjects in 40 CFR Part 52

      - Environmental protection
      - Air pollution control
      - Incorporation by reference
      - Intergovernmental relations
      - Nitrogen dioxide
      - Ozone
      - Particulate matter
      - Reporting and recordkeeping requirements
      - Sulfur oxides

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

      ( print page 99184)    
Dated: December 4, 2024.

César Zapata,

Acting Regional Administrator, Region 4.

# Footnotes

1.                             On July 1, 2024, SC DHEC was restructured into a health agency, the Department of Public Health, and an environmental agency, the Department of Environmental Services (DES). In a letter dated June 20, 2024, South Carolina represented to EPA that all the functions, powers, and duties of the environmental divisions, offices, and programs of DHEC, including the authority to administer and                                                 enforce State Implementation Plans, are retained and continued in full force and effect under DES. The letter is in the docket for this proposed rulemaking. The State agency will simply be referred to as the State or South Carolina for the remainder of this document.                    
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2.                             Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, 86 FR 23054 (Apr. 30, 2021).                    
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3.                             Deadlines for Submission and Recordation of Allowance Allocations Under the Cross-State Air Pollution Rule (CSAPR) Trading Programs and the Texas SO2                         Trading Program, 87 FR 52473 (Aug. 26, 2022).                    
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4.                             EPA is not taking action on changes reflected in this submittal to South Carolina Regulation 61-62.60, subpart XXX, subpart IIII, subpart JJJJ, and South Carolina Regulation 61-62.63, subpart C, subpart AAAA, subpart YYYY, subpart ZZZZ, subpart DDDDD, subpart GGGGG, subpart IIIII, and subpart HHHHHH, since these rules are not part of the SIP.                    
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5.                             Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR 48208 (Aug. 8, 2011).                    
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6.                             Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, 81 FR 74504 (Oct. 26, 2016).                    
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7.                             The trading programs established under CSAPR, the CSAPR Update, and the Revised CSAPR Update include a program for annual NOX                         emissions; two geographically separate programs for annual SO2                         emissions; and three geographically separate programs for ozone-season NOX                         emissions. While some of the requirements set forth in these three rules have been amended in subsequent rules, the subsequent amendments are not relevant to the South Carolina SIP revision addressed in this action.                    
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8.                                                     *See*                         76 FR at 48212.                    
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9.                                                     *See*                         76 FR at 48373-74.                    
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10.                                                     *See*                         81 FR at 74555.                    
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11.                                                     *Id.*
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12.                                                     *See*40 CFR 52.38, 52.39. States also retain the ability to submit SIP revisions to meet their good neighbor obligations using mechanisms other than the CSAPR Federal trading programs or integrated State trading programs.                    
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13.                                                     *See*                         Air Plan Approval; South Carolina; Cross-State Air Pollution Rule, 82 FR 47936 (October 13, 2017).                    
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14.                             South Carolina Regulation 61-62.97, Subpart A—South Carolina CSAPR NOX                         Annual Trading program is designed to IBR most of subpart AAAAA of 40 CFR part 97, while separately listing the Phase 2 annual NOX                         trading budgets, set-asides, and variability limits found at 40 CFR 97.410(a)(18)(iv) through (vi) and (b)(18). Regulation 61-62.97, Subpart B—South Carolina CSAPR SO2                         Group 2 Trading Program is designed to IBR most of subpart DDDDD of 40 CFR part 97, while separately listing the Phase 2 annual SO2                         budgets, set-asides, and variability limits found at 40 CFR and 97.710(a)(6)(iv) through (vi) and (b)(6).                    
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15.                             South Carolina retains EPA's default allowance allocation methodology, and EPA remains the implementing authority for administration of the trading program.                    
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16.                             The Revised CSAPR Update did not reopen EPA's determination in the CSAPR Update that South Carolina does not contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to the 2008 ozone NAAQS.                         *See*86 FR 23067 & n.60.                    
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17.                             The CSAPR trading programs' “assurance provisions” require the surrender of additional allowances if total emissions from a state's sources in a control period exceed the state's “assurance level,” which equals the state's emissions budget plus a defined “variability limit.”                         *See, e.g.,*40 CFR 97.406(c)(2) and 97.425.                    
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18.                                                     *See*82 FR 47936.                    
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19.                             This revised IBR table format lists the CSAPR rulemakings that amended the Federal NOX                         annual and SO2                         Group 2 trading programs at part 97 subpart AAAAA and DDDDD, respectively, and establishes August 26, 2022, as the new date by which part 97 amendments are incorporated into Regulation 61-62.97.                    
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[FR Doc. 2024-28873 Filed 12-9-24; 8:45 am]

BILLING CODE 6560-50-P