EPA Finalizes CO₂ Reduction Rule

The Environmental Protection Agency released its final regulation to require power plants, oil refineries, chemical companies, and a broad range of other manufacturers to reduce their greenhouse gas emissions under the Clean Air Act. Environmental groups are cheering the move as industry groups question its legality and scope of coverage.

The regulation, announced on May 13, is another step on a path EPA Administrator Lisa P. Jackson embarked upon last year when she determined that the agency will regulate carbon dioxide and other greenhouse gases as air pollutants under the Clean Air Act (C&EN, Dec. 14, 2009, page 7).

In this final version of the rule, EPA raises the emissions level that triggers Clean Air Act permit actions significantly from the 25,000 tons per year level that EPA had originally proposed.

Beginning in January 2011, if companies modify their operations and increase emissions of other pollutants covered by the Air Act as well as increase greenhouse gas emissions by 75,000 tons per year, they will be required to install best available control technologies (BACT) to reduce greenhouse gas emissions (C&EN, May 17, page 24). And starting in July 2011, all newly built facilities that emit more than 100,000 tons per year of greenhouse gases will come under the requirements of the Clean Air Act for those greenhouse gas emissions.

EPA estimates that approximately 900 companies will come under review in the first year of this rule.

Complicating all of this is the fact that EPA has not determined what BACT is in order to reduce CO₂ and other greenhouse gas emissions. BACT will be determined on a case-by-case basis, EPA says, considering cost and effectiveness of the different control options. The agency is now developing these BACT guidelines.

EPA will also begin another rulemaking process next year to address smaller CO₂ sources, but will not require permits for small emitters until at least April 30, 2016, the agency notes.

The final regulation was blasted by the National Petrochemical & Refiners Association and a host of other industry groups as "unlawful" and "a regulatory mess." The association noted that the permitting threshold set in the Clean Air Act for other pollutants is 250 tons annually and EPA cannot shift this to 75,000 or 100,000 tons per year without turning to Congress to change the law.

The American Chemistry Council also warned that the 250 ton threshold will result in some 6 million restaurants, hotels, and other small business being covered by the regulation. And the chemical trade association added that the rule will create "uncertainty" for manufacturers with the result that companies will be less willing to invest in capital projects, including energy efficiency improvements.

However, environmental groups, such as Environment America, applauded the announcement as a step that will lead large greenhouse gas emitters to reduce those emissions when building new plants or upgrading existing ones.

EPA made its announcement the day after the release by Sens. John F. Kerry (D-Mass.) and Joseph I. Lieberman (I-Conn.) of their CO₂ cap-and-trade bill. Kerry in a statement urged Senate members to support his and Lieberman's climate change, cap-and-trade bill, and said, "The Obama Administration has again reminded Washington that if Congress won't legislate a solution, EPA will regulate one."