Policy Note: EPA Tailoring Rule and Implementation Proposals

Introduction

In December 2009 the EPA announced the Endangerment Finding under the Clean Air Act stating that the current and projected atmospheric concentrations of the six key greenhouse gases (GHGs) – CO2e, CH4, N2O, HFCs, PFCs, and SF6 – threaten the public health and welfare of current and future generations.

The entire suite of methodologies to support the EPA Mandatory Ruling are available in AMEE.

This finding triggered a legal requirement that the EPA develop regulations for stationary sources, such as power plants, factories, and oil refineries. The EPA has accomplished this requirement by finalizing the EPA Tailoring Rule in May, 2010. The new rule, which covers large industrial facilities like power plants and oil refineries that are responsible for 70 percent of the GHGs from stationary sources, defines which facilities need to obtain permits for their greenhouse gas emissions.

To assist with implementing the Tailoring Rule, on August 12, the EPA proposed the following two rules. These rules would stipulate how businesses planning to build new, large facilities or make major expansions to existing ones will permits that address greenhouse gases (GHG).

Proposed Rule #1: The EPA has found that some state implementation plans (SIPs) do not meet Clean Air Act requirements because their programs currently do not cover GHG emissions. In these instances, the EPA will require states to update their plans to ensure they cover GHG emissions. Additionally, all other states must review their SIPs and inform the EPA if they do not cover GHG sources.

Proposal Rule #2: The EPA would establish a federal permitting plan that would apply to states that are unable to develop and submit SIP revisions. Therefore, any source that requires a PSD permit for its GHGs located in an area that has not updates its SIP would be issued a permit by EPA until the state’s required SIP revision is complete.

The EPA will accept public comments on these proposed rules and plans to finalize the rules prior to January 2, 2011, the earliest GHG permitting requirements will be effective.

Compliance

The Tailoring Rule stipulates that:

  • Beginning in January 2, 2011, facilities currently subject to permitting requirements for other air pollutants would also need to obtain greenhouse gas permits, though only for increases in emissions >75,000 tons of carbon dioxide-equivalent (CO2e) per year;
  • By July 1, 2011, permitting requirements would extend to new facilities that emit >100,000 tons of CO2e per year, as well as modifications of existing facilities that increase emissions by >75,000 tons of CO2e per year;

Impact

Businesses owning large sources of emissions will need to ensure that they are able to accurately calculate and disclose the GHG emissions and obtain requisite permits. Various stakeholder groups including members of Congress, state authorities, industry associations, and environmental organizations have launched lawsuits attacking the EPA’s Endangerment Finding and subsequent Tailoring Rule and challenged the EPA’s authority. Members of Congress are also attempting to limit the EPA’s authority in these areas.

Thus, while the EPA has set forward a bold set of proposals, stakeholder debate will inevitably alter the final outcome. However, regardless of the outcome, these steps by the EPA have clear implications for businesses: they will have to measure, manage, and disclose GHG emissions more accurately and for more facilities.

Role of the AMEE Platform

AMEE’s neutral platform aggregates and maintains carbon accounting methodologies enabling anyone to understand, calculate, and share their carbon footprint. AMEE’s Platform service and our network of partners help firms efficiently measure and disclose GHG emissions in order to comply with the EPA’s new regulations.

AMEE contains GHG emissions methodologies specified in the EPA Mandatory Ruling technical guidance documentation.

Click here to view details of the entire suite of methodologies in AMEE including:

AMEE has aggregated this information from a variety of sources such as the EPA Climate Leaders Program, the IPCC National Greenhouse Gas Inventory Programme, the Cement Sustainability Initiative, the American petroleum Institute (API), the International Council of Forests and Paper Associations (ICFPA), New Mexico Greenhouse Gas Mandatory Emissions Inventory and the International Aluminium Institute.

AMEE houses all of the required ‘intelligence’ (data and algorithms) and provides the infrastructure for storing the appropriate activity data with which to make emissions calculations.

Useful links

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