Potential to emit: 40 CFR 51.100 and 40 CFR 70.2

Nonattainment New Source Review (NSR): 40 CFR 51.165 and 40 CFR 52.24

Prevention of Significant Deterioration (PSD): 40 CFR 51.166 and 40 CFR 52.21

New Source Performance Standards (NSPS): 40 CFR 60

General applicability and definitions: 40 CFR 60.1, 40 CFR 60.2, and 40 CFR 60.15

Notifications: 40 CFR 60.7

Performance tests: 40 CFR 60.8

Emissions guidelines: 40 CFR 60.20 to 60.39e, 40 CFR 60.1500 to 60.1940, 40 CFR 60.2500 to 60.2875, 40 CFR 60.2980 to 60.3078, and 40 CFR 60.5000 to 60.5250

Title V operating permits: 40 CFR 70 and 40 CFR 71

Compliance assurance monitoring (CAM): 40 CFR 64

Cap-and-trade programs:

Acid rain program: 40 CFR 72 to 78

Nitrogen oxides (NOx) budget program: 40 CFR 96.1 to 96.88

Clean Air Interstate Rule (CAIR): 40 CFR 96.101 to 96.388 and 40 CFR 97.101 to 97.388

Cross-State Air Pollution Rule (CSAPR): 40 CFR 97.401 to 97.735

Federal enforceability: 40 CFR 51.165 and 40 CFR 63.2

Credible evidence: 40 CFR 51.212, 40 CFR 52.12, 40 CFR 52.33, 40 CFR 60.11, and 40 CFR 61.12

U.S. Environmental Protection Agency (EPA)
Office of Air and Radiation

See ADDRESSES & CONTACTS for addresses and telephone numbers.

TYPES OF PERMITS

Air emissions permits are divided into two distinct categories: construction permits and operating permits. The applicability of various permitting programs within each category is dependent on the type and quantity of the pollutants emitted, the attainment status of the area where the source is located, and the date the source was constructed or modified. The quantity of emissions from a source will determine whether the source can be classified as a major source or if changes at the source can be classified as a major modification. Major sources must comply with federal construction and operating permit programs, most of which are administered at the state or local level.

Construction Permits

New major sources and major modifications to existing major sources must comply with the provisions of the NSR program. Applicable sources in nonattainment areas must comply with nonattainment NSR provisions, while PSD provisions apply to sources in attainment areas. It is possible for a single source to be subject to both nonattainment NSR and PSD for different pollutants.

New sources and modifications to existing sources may also be required to comply with an NSPS. NSPS applies to specifically listed categories of sources that are constructed or modified after specific dates listed within the standards.

Operating Permits

Major sources are also required to obtain operating permits under the Title V program. A Title V operating permit is intended to be a facilitywide operating permit that consolidates all the applicable requirements for all the sources located at a facility into a single document. Title V operating permits may incorporate the provisions of many regulatory programs, such as:

• Acid Rain Program.
• NOx Budget Program.
• NSPS.
• National Emissions Standards for Hazardous Air Pollutants (NESHAP), including Maximum Achievable Control Technology (MACT) standards. See the national section HAZARDOUS AIR POLLUTANTS.
• CAM.
• Risk Management Program. See the national section RISK MANAGEMENT PROGRAM.
• State regulatory programs.

State Permits

Federal permitting requirements typically apply to major sources of air pollution. Sources that emit pollutants below the major source thresholds are most likely subject to state permitting requirements. See the state section AIR EMISSIONS PERMITS for additional information on nonmajor source permitting.

PUBLIC PARTICIPATION

The construction, modification, and operation of a major source of air pollution may have a significant impact on the community where it is located and the surrounding areas. As a result, through provisions included in the Clean Air Act (CAA), regulatory agencies seek and respond to input from citizens that allows the public to have meaningful involvement in decision making with respect to permitting such facilities.

In general, before issuing a final permit the regulatory agency will issue a draft permit and publish a public notice that invites the public to review the draft permit and submit comments during the established public comment period. The public notice is usually published in a newspaper of general circulation in the area where the source is located and typically contains a brief description of the source, the location where materials can be reviewed, regulatory agency contact information, and other pertinent information. Typically, during the public comment period a public hearing may be requested.

The regulatory agency reviews and addresses all of the comments received during the public comment period and issues raised at the public hearing, if one was held, and either denies the permit or makes appropriate changes and issues a final permit. If the changes are significant, the regulatory agency may opt to re-issue a draft permit and hold another public comment period.

In the case of major source permits, the public may appeal the issuance of a final permit. Typically, one must comment on the draft permit in order to have proper standing to appeal the final permit.

The details of the public participation process, such as the duration of the comment period, information that must be included in the public notice, or criteria for a public hearing, vary from state to state. In addition, states may require public comment for nonmajor source permits. Refer to the state sections AIR EMISSIONS PERMITS, NEW SOURCE REVIEW, and TITLE V for more information on the public participation process.

ENFORCEMENT

Federal enforceability means all limitations and conditions are enforceable by EPA. However, several court challenges have caused EPA to re-examine its policy on federal enforceability. Enforcement has been bolstered by the credible evidence rule, which has significantly increased the types of data that can be used in enforcement actions.

POTENTIAL TO EMIT

40 CFR 51.100 and 40 CFR 70.2

The determination of whether a source is a "major source" depends not on its "actual emissions," but on its potential to emit (PTE). The EPA defines "PTE" as the maximum capacity of a stationary source to emit any air pollutant under its physical and operational design. This may include air pollution control equipment and restrictions on hours of operation, or on the type or amount of material combusted, stored, or processed, if the limitation is federally enforceable. For more information on federal enforceability, see Permit Enforcement in this section.

This means that the permitting authority looks at the process, boiler, or unit and assumes it will run at maximum capacity for 8,760 hours a year. For many processes, such as spray booths, actual emissions are far less than their potential.

Classifications of Emitting Sources

Natural minor source. A natural minor source is a source that does not have the PTE above a major source threshold.

Synthetic minor source. A synthetic minor source is a source that has potential emissions above a major source threshold, but the source wishes to accept a federally enforceable permit condition limiting emissions to below major source thresholds.

Major source. In general, a major source is a source with the PTE above major source thresholds that cannot or does not wish to accept any emissions limitations or operational restrictions. The major source thresholds depend on the permitting program to which the source is subject and the attainment status of the area where the source is located. For further elaboration on major source thresholds, refer to the national sections NEW SOURCE REVIEW and TITLE V.

Emissions Inventory

One of the first steps in determining the applicability of permitting requirements to a particular source is to calculate the emissions from the source and determine if the permitting threshold is exceeded. For the purposes of permitting, emissions inventories usually consist of potential and actual emissions from each source at the facility. Some of the methods used to compile an emissions inventory include:

• Direct measurement. Direct measurement is the use of a continuous emissions monitoring system (CEMS) to monitor and record emissions of selected pollutants.
• Stack tests. Stack tests can be performed on specific sources or groups of sources to determine various emissions rates under a set or sets of specific operating parameters. The results of the stack test can then be utilized to predict emissions from the source as it operates at parameters similar to the test. In order for the stack test results to be useful, the parameters under which stack tests are performed must be carefully selected to provide an accurate representation of source operations. For more information, refer to EPA's National Stack Test Guidance. For access to a copy of EPA's National Stack Test Guidance, go to Guidance Documents in this section.
• Emissions factors. Emissions factors are the most common method of calculating emissions and are derived from actual emissions measurements from various processes. Emissions factors are applied to processes similar to the one used to derive the factor in order to estimate emissions. Emissions factors are available from many sources such as EPA, professional societies, equipment manufacturers, etc. The most commonly referenced source of emissions factors is EPA's Compilation of Air Pollutant Emission Factors, Volume I: Stationary Point and Area Sources, otherwise known as AP-42. EPA also provides a computer software program, known as TANKS, that calculates volatile organic compound (VOC) and hazardous air pollutant emissions from storage tanks, and EPA maintains the Factor Information Retrieval (FIRE) database containing recommended emissions factors for various pollutants from a wide range of sources. AP-42, TANKS, FIRE, and other emissions calculation tools are available from the EPA at https://www.epa.gov/chief.
• Mass balance. In its most simplistic form, a mass balance is used to calculate emissions by equating the input to a process with the output of the process, with the difference assumed to be lost as air emissions. However, mass balances can become significantly more complicated when taking into account chemical reactions, accumulation, depletion, etc. Facility-specific documents that may facilitate using a mass balance to calculate emissions include purchasing records, safety data sheets (SDSs), operating logs, batch formulae, waste shipment records, etc.
• Modeling. In some cases, computer models have been developed to calculate emissions based on specific input data.
• Engineering judgment. In the absence of any other acceptable methodology to calculate emissions, engineering judgment may sometimes be acceptable, provided enough supporting documentation is provided to allow the regulating agency to logically understand how the estimation was made.

Pollutants to Quantify

Typically, when preparing an emissions inventory the source quantifies emissions of the following pollutants:

• Sulfur dioxide (SO₂).
• PM-10.
• PM-2.5.
• NOx.
• VOCs.
• Carbon monoxide.
• Lead.
• Each individual hazardous air pollutant (HAP). See the national section HAZARDOUS AIR POLLUTANTS for the list of HAPs.
• Sum of all HAPs.
• Greenhouse gases (GHGs)

The state regulatory agency may specify additional pollutants that must be quantified. For additional guidance, see the state section AIR EMISSIONS PERMITS.

Definition of VOC. A VOC is any compound of carbon, excluding carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates, and ammonium carbonate, that participates in atmospheric photochemical reactions. In simple terms, an atmospheric photochemical reaction is the reaction of a VOC with sunlight in the atmosphere to form ground-level ozone. The following organic compounds have been determined to have negligible photochemical reactivity and are therefore excluded from the definition of VOC:

• Methane
• Ethane
• Methylene chloride (dichloromethane)
• 1,1,1-trichloroethane (methyl chloroform)
• Parachlorobenzotrifluoride (PCBTF)
• Cyclic, branched, or linear completely methylated siloxanes
• Acetone
• Perchloroethylene (tetrachloroethylene)
• The following chlorofluorocarbon (CFC), hydrofluorocarbon (HFC), and hydrochlorofluorocarbon (HCFC) compounds: CFC-11, CFC-12, CFC-113, CFC-114, CFC-115, HFC-23, HFC-32, HFC 43-10mee, HFC-125, HFC-134, HFC-134a, HFC-143a, HFC-152a, HFC-161, HFC 227ea, HFC-236ea, HFC-236fa, HFC-245ca, HFC-245ea, HFC-245eb, HFC-245fa, HFC-365mfc, HCFC-22, HCFC-31, HCFC-123, HCFC-123a, HCFC-124, HCFC-141b, HCFC-142b, HCFC-151a, HCFC-225ca, and HCFC-225cb
• 1,1,1,2,2,3,3-heptafluoro-3-methoxy-propane (n-C₃F₇OCH₃, HFE-7000)
• 1,1,1,2,2,3,3,4,4-nonafluoro-4-methoxy-butane (C₄F₉OCH₃ or HFE-7100)
• 1-ethoxy-1,1,2,2,3,3,4,4,4-nonafluorobutane (C₄F₉OC₂H₅ or HFE-7200)
• 1,1,1,2,2,3,4,5,5,5-decafluoro-3-methoxy-4-trifluoromethyl-pentane (HFE-7300)
• 3-ethoxy-1,1,1,2,3,4,4,5,5,6,6,6-dodecafluoro-2-(trifluoromethyl) hexane (HFE-7500)
• 2-(difluoromethoxymethyl)-1,1,1,2,3,3,3-heptafluoropropane ((CF₃)₂CFCF₂OCH₃)
• 2-(ethoxydifluoromethyl)-1,1,1,2,3,3,3-heptafluoropropane ((CF₃)₂CFCF₂OC₂H₅)
• Methyl acetate
• Methyl formate
• Propylene carbonate
• Dimethyl carbonate
• trans-1,3,3,3-tetrafluoropropene
• HCF₂OCF₂H (HFE-134)
• HCF₂OCF₂OCF₂H (HFE-236cal2)
• HCF₂OCF₂CF₂OCF₂H (HFE-338pcc13)
• HCF₂OCF₂OCF₂CF₂OCF₂H (H-Galden 1040x or H-Galden ZT 130 (or 150 or 180))
• trans-1-chloro-3,3,3-trifluoroprop-1-ene
• 2,3,3,3-tetrafluoropropene
• 2-amino-2-methyl-1-propanol
• t-butyl acetate
• 1,1,2,2-tetrafluoro-1-(2,2,2-trifluoroethoxy) ethane
• Perfluorocarbon compounds that fall into these classes:
  —Cyclic, branched, or linear, completely fluorinated alkanes
  —Cyclic, branched, or linear, completely fluorinated ethers with no unsaturations
  —Cyclic, branched, or linear, completely fluorinated tertiary amines with no unsaturations
  —Sulfur containing perfluorocarbons with no unsaturations and with sulfur bonds only to carbon and fluorine

NSR PROGRAM

The NSR program was established by the 1977 amendments to the CAA, and it applies to new major sources of air pollution and major modifications at existing major sources. Under this program, a preconstruction review\permit for new sources is required in both attainment and nonattainment areas. A nonattainment NSR review is required for nonattainment areas and a PSD review is required for attainment areas. The same area may be attainment for one pollutant and nonattainment for another, so permit applications may contain requirements from both NSR programs.

Nonattainment NSR

40 CFR 51.165 and 40 CFR 52.24

The construction of new major sources and major modifications to existing major sources located in areas designated as nonattainment of the national ambient air quality standards (NAAQS) must comply with the provisions of nonattainment NSR. Sources subject to nonattainment NSR must:

• Install controls meeting the lowest achievable emissions rate.
• Obtain sufficient offsets for the proposed increase in emissions.
• Satisfy alternate siting requirements.
• Certify that all other sources owned by the applicant in the same state are in compliance with all applicable requirements.

For a complete definition of major source and major modification under the nonattainment NSR program, as well as more information on nonattainment NSR permitting requirements, see the national section NEW SOURCE REVIEW.

PSD

40 CFR 51.166 and 40 CFR 52.21

The construction of new major sources and major modifications to existing major sources located in areas designated as attainment of the NAAQS must comply with the provisions of PSD. Sources subject to PSD must:

• Install the best available control technology.
• Perform an air quality analysis that may consist of pre-application ambient air monitoring, a dispersion model analysis of the proposed emissions, and post-construction ambient air monitoring.
• Perform an additional impacts analysis, including a:
  —Commercial, industrial, and residential growth analysis
  —Soils and vegetation analysis
  —Visibility impairment analysis.

For a complete definition of major source and major modification under the PSD program, as well as more information on PSD permitting requirements, see the national section NEW SOURCE REVIEW.

NSPS

40 CFR 60

Section 111 of the CAA requires EPA to identify categories of new sources that contribute significantly to air pollution. For these source categories, EPA must set emissions standards that reflect the best technology that has been adequately demonstrated, taking into account non-air-quality impacts and energy requirements. The NSPS are air pollution controls that are individually designed for specific types of industries. EPA may find NSPS to be facility design, equipment, work practice, or operational standards.

The NSPS, once final, sets the minimum level of control that must be achieved by the source. These terms are integrated into the source's preconstruction permit. See the state section AIR EMISSIONS PERMITS and the national section NEW SOURCE REVIEW for more information about preconstruction permits.

General Applicability and Definitions

40 CFR 60.1, 40 CFR 60.2, and 40 CFR 60.15

The NSPS program applies to new sources, modifications, and the reconstruction of existing sources that are identified by a source category standard under 40 CFR 60. See Table in this section for a list of all NSPS EPA has established.

New source. A new source is any source identified by a source category that is constructed after the publication of the applicable NSPS.

Modification. Modification means any physical or operational change at an existing facility subject to an NSPS that increases the amount emitted of any air pollutant regulated by the NSPS, or that results in emissions of any air pollutant regulated by the NSPS that was not previously emitted.

Reconstruction. Reconstruction of a source occurs when the owner or operator attempts to extend the life of an existing unit or units by the replacement of units that have reached the end of their useful life. When the reconstruction expenditure reaches 50 percent or more of the capital cost of a comparable new facility, the source is deemed to be reconstructed. Reconstructed facilities must then apply the NSPS for the reconstructed units. Check the applicability of the individual NSPS rules for further guidance on reconstruction of a source.

Notifications

40 CFR 60.7

All sources subject to an NSPS must submit the following applicable written notifications to EPA, or submit it electronically if that is acceptable to both parties:

• A notification of the date of construction or reconstruction postmarked no later than 30 days after construction or reconstruction commenced.
• A notification of the actual date of initial start-up postmarked within 15 days after such date.
• A notification of any physical or operational change to an existing facility that may increase the emissions rate of any air pollutant to which NSPS applies, unless that change is specifically exempted. This notice must be postmarked 60 days or as soon as practicable before the change is commenced and include:
  —The precise nature of the change
  —The present and proposed emissions control systems
  —The productive capacity of the facility before and after the change
  —The expected completion date of the change.
• A notification of the date that the demonstration of the continuous monitoring system performance commences. The notification must be postmarked at least 30 days before the date.
• A notification of the anticipated date for conducting required opacity observations postmarked not less than 30 days before the date.
• A notification that continuous opacity monitoring system data results will be used to determine compliance with the applicable opacity standard during a performance test in lieu of Method 9 observation data. This notification must be postmarked not less than 30 days before the date of the performance test.

Performance Tests

40 CFR 60.8

All sources must conduct initial performance tests to demonstrate compliance with the emissions limitations of the applicable NSPS and submit a written report of the results to EPA. The tests must be performed at least 60 days after achieving maximum production rate but not later than 180 days after startup. The test must be conducted according to the methodologies contained in the applicable NSPS. Notification must be provided to EPA by the facility at least 30 days before any performance test, so that EPA may make arrangements for an observer to be present if desired.

Extensions. If a force majeure may cause or has caused a delay in testing beyond the regulatory deadline, EPA may grant an extension. A force majeure is an event that will be or has been caused by circumstances beyond the control of the facility or its contractors that prevents the facility from conducting the required tests within the specified time frame despite the facility's best efforts to comply with the regulatory requirements. Examples of a force majeure include acts of nature, acts of war or terrorism, or equipment failure or safety hazard beyond the control of the affected facility.

If a facility wishes to assert a claim of force majeure for a delay in testing, the facility must notify EPA in writing as soon as practicable following the date the facility first knew or should have known via due diligence that the event may cause a delay in testing. However, the notification must occur before the performance test deadline unless the original or subsequent force majeure event causes a delay in submitting the notice. Under such circumstances the notice must be submitted as soon as practicable. The notice must include the following:

• A description of the force majeure event and a rationale for attributing the delay in testing beyond the regulatory deadline to the force majeure.
• A description the measures taken or to be taken to minimize the delay.
• The date by which the facility proposes to conduct the performance test. This date should be as soon as practicable after the force majeure.

The decision whether to grant an extension to the performance test deadline is solely within the discretion of EPA, and the facility will be notified in writing of approval or disapproval of the request for an extension as soon as practicable.

Emissions Guidelines

40 CFR 60.20 to 60.39e, 40 CFR 60.1500 to 60.1940, 40 CFR 60.2500 to 60.2875, 40 CFR 60.2980 to 60.3078, and 40 CFR 60.5000 to 60.5250

The EPA has also promulgated emissions guidelines for several "existing" sources that are not covered by the NSPS. The guidelines are designed to serve as the basis for the development of state regulations governing these sources. Each state must adopt a plan for the control of the designated pollutant to which the guideline document applies and submit it to the EPA for approval. In the event no sources covered by a guideline document operate in a given state, the state is not required to adopt a plan provided a negative declaration is submitted to the EPA for approval. If the state fails to develop a state plan for sources identified in any of the emissions guidelines and a negative declaration is not obtained, applicable sources may have to comply with federal guidelines until a state plan can be developed and approved or a negative declaration is obtained. The sources covered by emissions guidelines include:

• Large municipal waste combustors that are constructed on or before September 20, 1994 (40 CFR 60, Subpart Cb)
• Municipal solid waste landfills for which construction, reconstruction, or modification was commenced before May 30, 1991 (40 CFR 60, Subpart Cc)
• Sulfuric acid production units (40 CFR 60, Subpart Cd)
• Hospital/medical/infectious waste incinerators for which construction was commenced on or before June 20, 1996(40 CFR 60, Subpart Ce)
• Small municipal waste combustion units constructed on or before August 30, 1999 (40 CFR 60, Subpart BBBB)
• Commercial and industrial solid waste incineration units that commenced construction on or before November 30, 1999 (40 CFR 60, Subpart DDDD)
• Other solid waste incineration units that commenced construction on or before December 9, 2004 (40 CFR 60, Subpart FFFF)
• Sewage sludge incinerators that commenced construction on or before October 14, 2010.

TITLE V PROGRAM

40 CFR 70 and 40 CFR 71

Title V of the CAA requires all states to develop and implement an operating permit program that meets federal requirements as published in 40 CFR 70. If a state fails to develop and implement an operating permit program under 40 CFR 70, the federal Title V requirements under 40 CFR 71 will be implemented by EPA.

Title V requires all existing major stationary sources to apply for an operating permit. The permit is a compilation of all the source's current air permitting requirements and is designed to provide a facilitywide operating permit. The purpose of Title V permits is to reduce violations of air pollution regulations by:

• Recording in one document all of the air pollution control requirements that apply to a facility, giving members of the public, regulators, and the facility a clear picture of what is required to maintain compliance with the applicable regulations.
• Requiring the facility to make regular reports on how it is tracking its emissions and the controls it is using to limit its emissions.
• Adding monitoring, testing, or recordkeeping requirements, where needed, to ensure that the facility complies with its emissions limits or other pollution control requirements.
• Requiring the facility to certify each year whether it has met the air pollution requirements in its Title V permit.
• Making the terms of the Title V permit federally enforceable. This means that EPA and the public can enforce the terms of the permit, along with the state or local agency.

For more information on the definition of a major source under the Title V program and permitting requirements, see the national section TITLE V.

CAM

40 CFR 64

CAM requires Title V facilities to develop pollutant- and unit-specific CAM plans to monitor emissions. The CAM rule is designed to satisfy the requirements for monitoring and compliance certification in the Title V operating permits program. The rule establishes criteria defining monitoring, reporting, and recordkeeping parameters that should be conducted in order for a source to provide a reasonable assurance of compliance with emissions limitations and standards. These criteria address defining the applicable monitoring approach, obligation to complete corrective actions necessitated by the monitoring results, and how such data are used in the annual compliance certification. For additional information on CAM and compliance certification, see the national section TITLE V.

CAP-AND-TRADE PROGRAMS

Cap and trade is a policy approach to controlling large amounts of emissions from a group of sources at costs that are lower than if sources were regulated individually. Cap-and-trade programs have the following features:

• An emissions "cap": A limit on the total amount of pollution that can be emitted from all regulated sources. The cap is set lower than historical emissions to cause reductions in emissions and achieve the desired environmental effects.
• Allowances: An allowance is an authorization to emit a fixed amount of a pollutant. Each source affected by a cap-and-trade program will be allocated emissions allowances. The total number of allowances cannot exceed the cap.
• Measurement: Accurate tracking of all emissions.
• Flexibility: Sources can choose how to reduce emissions, including whether to buy additional allowances from other sources that reduce emissions.
• Allowance trading: Sources can buy or sell allowances on the open market.
• Compliance: At the end of each compliance period, each source must own at least as many allowances as its emissions.

Cap-and-trade programs are often used to regulate sources located across large geographical areas with emissions that may be prone to being transported over large distances. See POLLUTANT TRANSPORT under Other Significant Air Quality Issues in the national section AIR (REGULATORY OVERVIEW) for further guidance.

Acid Rain Program

40 CFR 72 to 78

Objectives. In an effort to reduce the impact of acid rain, EPA formed the Acid Rain Program under Title IV of the CAA for the purpose of reducing emissions of SO₂ and NOx, thereby achieving significant environmental and public health benefits. The program utilizes both traditional command and control approaches and innovative, market-based approaches for controlling emissions in a way that provides the lowest cost to society and encourages energy efficiency and pollution prevention. The Acid Rain Program is implemented through an integrated set of rules and guidance designed to accomplish the following three primary objectives:

• Achieve environmental benefits through reductions in SO₂ and NOx emissions.
• Facilitate active trading of allowances and use of other compliance options to minimize compliance costs and maximize economic efficiency. An allowance equates to 1 ton of emissions.
• Promote pollution prevention and energy-efficient strategies and technologies.

Program elements. Each of the following program components helps create a feasible, flexible, and accountable emissions control program:

• The allowance trading system creates a low-cost system that makes allowance trading a viable compliance strategy for reducing SO₂ with minimal government involvement.
• The opt-in program allows nonaffected industrial and small utility units to participate in allowance trading.
• The NOx emissions reduction rule sets lower NOx emissions standards for existing coal-fired utility boilers and allows emissions averaging to reduce costs. NOx emissions under the Acid Rain Program are not controlled by a cap-and-trade program. However, affected sources have flexibility in determining how the NOx emissions limit will be achieved.
• The permitting process affords sources maximum flexibility in selecting the most cost-effective approach to reducing emissions.
• The CEM requirements provide credible accounting of emissions to ensure the integrity of the market-based allowance system and to verify the achievement of the reduction goals.

Implementation. Phase I of the SO₂ reduction began in 1995 and affected mostly coal-burning electric utility plants located in 21 Eastern and Midwestern states. Phase II began in 2000 and tightened the emissions limits imposed on the large, higher-emitting plants and also set restrictions on smaller, cleaner plants fired by coal, oil, and gas. The program affects existing utility units serving generators with an output capacity of greater than 25 megawatts and all new utility units.

The CAA also called for significant NOx reductions from these affected facilities. A significant portion of the reductions has been achieved by coal-fired utility boilers that are required to install low NOx burner technologies and to meet more recent emissions standards.

Permits and compliance. All affected sources must submit acid rain permit applications to an EPA-approved state or local permitting authority, which issues and administers the permit. Every acid rain permit is a portion of a larger Title V permit. Acid rain permits require that each affected source hold a sufficient number of allowances in its allowance account to cover the unit's SO₂ emissions in each year, comply with the applicable NOx limit, and monitor and report emissions.

To cover the SO₂ emissions for the previous year, affected units must finalize allowance transactions and submit them to EPA by March 1 to be recorded in their unit accounts. The amount of emissions is determined in accordance with the monitoring and reporting provisions. If the unit's emissions do not exceed its allowances, the remaining allowances are carried forward, or banked, into the next year's account, which then becomes the current compliance account. If a unit's emissions exceed its allowances, the unit must pay a penalty and surrender allowances for the following year to EPA as excess emissions offsets.

EPA's role in allowance trading is to record allowance transfers that are used for compliance utilizing the Allowance Tracking System (ATS). Each affected utility unit, corporation, group, or individual holding allowances has an account in the ATS and must notify EPA to have transfers recorded in their ATS account. To further keep track of allowance transfers, each account is assigned an identification number and every allowance, a serial number.

NOx Budget Programs

40 CFR 96.1 to 96.88

NOx budget trading programs were market-based cap-and-trade programs created to reduce the regional transport of NOx emissions from power plants and other large combustion sources that contribute to ozone nonattainment. States participating in NOx budget trading programs developed NOx cap-and-trade regulations for implementation during the ozone season (i.e., May through September). Under such programs, budget sources were allocated allowances by their state government. Each allowance permitted a source to emit 1 ton of NOx during the ozone season. Allowances could be bought, sold, or banked, which provided sources with compliance flexibility.

The provisions of the NOx budget trading program were incorporated into a facility's Title V operating permit. Each budget source was required to comply with the program by demonstrating at the end of each control period that actual emissions did not exceed the amount of allowances held for that period. In order to demonstrate compliance, budget sources had to monitor and report their actual emissions.

The first NOx budget trading program was operated among members of the Ozone Transport Commission (OTC), which included Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, Maryland, Delaware, the northern counties of Virginia, and the District of Columbia. However, the OTC NOx Budget Program was implemented only from 1999 to 2002 and was replaced by the NOx Budget Trading Program under the NOx State Implementation Plan (SIP) Call.

In 1998, the EPA promulgated the Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone, commonly known as the NOx SIP Call, that required 22 states and the District of Columbia to adopt SIP provisions preventing emissions occurring in a state from contributing significantly to nonattainment or interfering with the maintenance of an NAAQS in a downwind state. The NOx SIP Call allowed states to establish a NOx budget trading program by following a model rule developed by the EPA. The NOx SIP Call states include Alabama, Connecticut, Delaware, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, West Virginia, Wisconsin, and the District of Columbia. The NOx SIP Call NOx Budget Program was implemented from 2002 through 2008 and was replaced by the CAIR.

CAIR

40 CFR 96.101 to 96.388 and 40 CFR 97.101 to 97.388

On March 10, 2005, the EPA issued the CAIR, a rule that was supposed to permanently cap emissions of SO₂ and NOx in the eastern United States and replace the agency's NOx Budget Program. When fully implemented, SO₂ and NOx emissions were to be reduced by approximately 70 percent and 60 percent, respectively, from 2003 levels.

However, in 2008, a court ruling determined the CAIR to be flawed and ordered the EPA to replace it. As a result, the CAIR was to be implemented through the 2011 compliance periods and then replaced by the Cross-State Air Pollution Rule (CSAPR) as of January 1, 2012. However, on December 30, 2011, the U.S. Court of Appeals for the D.C. Circuit issued a ruling to stay the CSAPR pending judicial review, which ultimately ended up with the court vacating the rule in August 2012. As a result, the CSAPR did not go into effect on January 1, 2012, and sources subject to the CAIR were required to continue complying with the requirements of the CAIR until the EPA promulgated a valid replacement. In April 2014, the U.S. Supreme Court reversed the D.C. Circuit's decision to vacate the CSAPR; in October 2014, the stay of the CSAPR was lifted; and in December 2014, a rule was published establishing new implementation dates for the CSAPR. See CSAPR in this section for more information.

Pollutants controlled. SO₂ and NOx are precursors to fine particulate matter and ground-level ozone pollution, with SO₂ and NOx contributing to the formation of PM-2.5 and NOx also contributing to the formation of ground-level ozone. It is widely understood that emissions of SO₂ and NOx are capable of traveling hundreds, even thousands, of miles from their emissions point to contribute to poor air quality and exceedances of the NAAQS in downwind areas of the country.

Areas affected. The provisions of CAIR were applicable in the following areas:

• Alabama
• Arkansas (ozone only)
• Connecticut (ozone only)
• Delaware
• District of Columbia
• Florida
• Georgia (PM-2.5 only)
• Illinois
• Indiana
• Iowa
• Kentucky
• Louisiana
• Maryland
• Massachusetts (ozone only)
• Michigan
• Minnesota (PM-2.5 only)
• Mississippi
• Missouri
• New Jersey
• New York
• North Carolina
• Ohio
• Pennsylvania
• South Carolina
• Tennessee
• Texas (PM-2.5 only)
• Virginia
• West Virginia
• Wisconsin

Implementation. The EPA determined that local emissions controls would not be sufficient for attainment of the PM-2.5 and ozone NAAQS. Therefore, the agency proceeded with a regional emissions control strategy for the eastern United States. With the exception of some minor revisions to the Acid Rain Program, CAIR does not regulate any emissions sources but, instead, establishes a framework that requires states to make SIP revisions that reduce emissions of SO₂ and NOx. Each state determined which emissions sources to control and what control measures to adopt in order to meet the state pollutant budgets assigned by the EPA.

Of the pollutants under CAIR, 69 percent of SO₂ emissions and 22 percent of NOx emissions are from the power sector. Based on these data and an assessment of the emissions contributing to interstate pollution transport, the EPA determined that the most substantial and cost-effective emissions reductions were available from the power generation industry. As a result, the EPA encouraged states to control power plants but offered two compliance options:

• Meet the state's emissions budget by requiring power plants to participate in an EPA-administered interstate cap-and-trade program for electric generating units (EGUs).
• Meet the state's emissions budget through measures of the state's choosing. States could choose to control non-EGUs, EGUs, or a combination. However, if a state chose to control EGUs in any way, emissions from these sources had to be capped.

Cap-and-trade program. CAIR established a cap-and-trade program for SO₂ and NOx based on EPA's proven Acid Rain Program. The affected sources under the cap-and-trade program are EGUs, which are fossil fuel-fired boilers and turbines serving an electrical generator with a nameplate capacity greater than 25 MW and producing electricity for sale, except for cogeneration plants.

Under the cap-and-trade program, the EPA allocates emissions "allowances" for SO₂ and NOx to each state. The states then distribute those allowances to affected sources for use or trade. To remain in compliance, each affected source must hold sufficient allowances to cover its emissions each year, but the source may choose how to comply from several alternatives, including installing pollution control equipment, switching fuels, or buying excess allowances from other sources that have reduced their emissions. The limited number of allowances available ensures that required emissions reductions are achieved.

The CAIR reductions will be accomplished with an ozone season (May to September) NOx cap and annual NOx and SO₂ caps. Affected areas for PM-2.5 only are subject to annual SO₂ and NOx caps. Affected areas for ozone only are subject to the ozone season NOx cap, and affected areas for both PM-2.5 and ozone are subject to both the annual and ozone season caps.

In order to facilitate and streamline various overlapping cap-and-trade programs, CAIR includes revisions to the SO₂ cap-and-trade provisions under the Acid Rain Program and provides for the NOx Budget cap-and-trade program to be replaced by the CAIR ozone season cap-and-trade program.

The EPA established a federal implementation plan (FIP) to implement cap-and-trade programs for power plants in states that failed to develop standards and incorporate them into their SIP. If a FIP was implemented in a state, it was withdrawn once the necessary requirements to satisfy CAIR had been incorporated into the SIP.

CSAPR

40 CFR 97.401 to 97.735

History. On July 6, 2011, the EPA finalized the CSAPR, a rule that required 28 states to reduce SO₂ and NOx emissions from power plants that contribute to ground-level ozone and/or PM-2.5 pollution in other states. The CSAPR was the result of a 2008 court decision in which the U.S. Court of Appeals for the D.C. Circuit found CAIR to be flawed but kept it in place while directing the EPA to issue a new rule governing the transport of air pollutants across state boundaries. Therefore, the CSAPR was supposed to replace CAIR. However, on December 30, 2011, the D.C. Circuit issued a ruling to stay the CSAPR pending judicial review, which ultimately ended up with the court vacating the rule in August 2012. As a result, the CSAPR did not go into effect on January 1, 2012, and sources subject to CAIR were required to continue complying with the requirements of CAIR until the EPA promulgates a valid replacement.

On April 29, 2014, the U.S. Supreme Court reversed the opinion of the U.S. Court of Appeals for the D.C. Circuit that vacated the CSAPR. On June 26, 2014, the EPA filed a motion with the D.C. Circuit Court to lift the stay of the CSAPR, which was granted on October 23, 2014. On December 2, 2014, a rule was published in the Federal Register amending regulations to schedule CSAPR Phase I implementation for 2015, with Phase 2 implementation scheduled for 2017.

Pollutants controlled. The EPA has promulgated NAAQS for PM-2.5 and ozone in order to protect human health and the environment from the adverse effects of these pollutants, and periodically, the standards are reevaluated and, in some instances, made more stringent.

SO₂ and NOx are precursors to PM-2.5 and ground-level ozone pollution, with SO₂ and NOx contributing to the formation of PM-2.5 and NOx also contributing to the formation of ground-level ozone. It is widely understood that emissions of SO₂ and NOx are capable of traveling hundreds, even thousands, of miles from their emissions point to contribute to poor air quality and exceedances of an NAAQS in downwind areas of the country. As with the NOx Budget Program and CAIR, the ability of these pollutants to be transported over great distances and the obligation to address interstate pollution transport under Section 110(a)(2)(D) of the CAA (42 USC 7410(a)(2)(D)) caused the EPA to establish another regional regulatory approach to most efficiently and cost-effectively attain the NAAQS in all states. When fully implemented, the CSAPR will reduce SO₂ and NOx emissions, which will be reduced by approximately 73 percent and 54 percent, respectively.

Areas affected. The CSAPR establishes SO₂ and NOx emissions reduction requirements for power plants in 27 states, but supplemental rulemaking also requires ozone season emissions reductions in some states, bringing the total number of states regulated under the CSAPR to 28. However, the states regulated under the CSAPR differ from those regulated under CAIR. The following states are regulated by the CSAPR for both PM-2.5 (annual SO₂ and NOx) and ozone (ozone season NOx), unless otherwise stated:

• Alabama
• Arkansas (ozone season NOx only)
• Florida (ozone season NOx only)
• Georgia
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana (ozone season NOx only)
• Maryland
• Michigan
• Minnesota (annual SO₂ and NOx only)
• Mississippi (ozone season NOx only)
• Missouri
• Nebraska (annual SO₂ and NOx only)
• New Jersey
• New York
• North Carolina
• Ohio
• Oklahoma (ozone season NOx only)
• Pennsylvania
• South Carolina
• Tennessee
• Texas
• Virginia
• West Virginia
• Wisconsin

Implementation. The CSAPR is being implemented under a federal implementation plan with the first phase of compliance beginning January 1, 2015, for SO₂ and annual NOx reductions, and May 1, 2015, for ozone season NOx reductions. States may opt to replace the federal implementation plan with state regulations that are approved by the EPA and incorporated into the SIP.

Similar to its predecessor, CAIR, the CSAPR establishes a cap-and-trade program for SO₂ and NOx based on EPA's proven Acid Rain Program. However, sources subject to both the CSAPR and the Acid Rain Program will have separate allowance accounts to comply with each rule and cannot use allowances from one program to comply with the other.

The affected sources under the CSAPR cap-and-trade program are any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving at any time, on or after January 1, 2005, a generator with nameplate capacity of more than 25 MW and producing electricity for sale. Under the cap-and-trade program, the EPA allocates emissions "allowances" for SO₂ and NOx to each state, which are then distributed to affected sources for use or trade. To remain in compliance, each affected source must hold sufficient allowances to cover its emissions for the given compliance period (annual or ozone season), but the source may choose how to comply from several alternatives, including installing pollution control equipment, switching fuels, or buying excess allowances from other sources that have reduced their emissions. The limited number of allowances available ensures that required emissions reductions are achieved.

CONSTRUCTION PERMITS

Each state administers a permitting program for the construction of new sources and the modification of existing sources. In most cases, the state programs extend permitting requirements to sources that emit below the major source thresholds, although the requirements may differ significantly from the major source requirements.

Some states have been authorized by the EPA to administer the PSD program as well as implement and enforce the NSPS.

See the state sections AIR EMISSIONS PERMITS and NEW SOURCE REVIEW for additional guidance on state permitting requirements.

OPERATING PERMITS

In addition to the Title V program for major sources, states may also administer operating permit programs for sources that emit below the major source thresholds, although the requirements may differ significantly from the Title V requirements. See the state sections AIR EMISSIONS PERMITS and TITLE V for additional guidance on state permitting requirements.

GENERAL PERMITS

Under the Clean Air Act, state regulatory agencies may develop general permits applicable to source categories that have similar operations, emissions, or regulatory requirements. The general permit contains conditions that will be applicable to all sources within the applicable source category that wish to utilize the general permit, i.e., a "one permit fits all" approach for a given source category. General permits undergo public review before becoming available to industry. Therefore, there is no requirement for public review before issuing general permits to individual sources. This, combined with the preestablished permit conditions, requires less time for agency review of applications, which leads to lower costs for both the agency and industry.

FEDERALLY ENFORCEABLE PERMITS

40 CFR 51.165 and 40 CFR 63.2

Federally enforceable means all limitations and conditions that are enforceable by EPA. Examples of federally enforceable limitations and conditions include

• NSPS
• NESHAP
• The requirements within any SIP or federal implementation plan
• NSR permit requirements
• All terms and conditions in a Title V permit, including any provisions that limit a source's PTE, unless expressly designated as not federally enforceable

Enforcement authority. EPA maintains the ultimate authority for enforcement of the federal CAA, even if authority to implement and enforce certain regulatory programs is granted to the state regulatory agency. See SUPREMES BOOST EPA AUTHORITY under Additional Guidance in this section.

Practically Enforceable

Several court challenges have caused EPA to re-examine its policy on PTE limits and federal enforceability. The most notable change resulting from the decisions is the definition of PTE under Title V. EPA has stated in guidance documents that under Title V "federally enforceable" should be read to mean "federally enforceable or legally and practicably enforceable by a state or local pollution control agency" pending future rulemaking by EPA.

CREDIBLE EVIDENCE

40 CFR 51.212, 40 CFR 52.12, 40 CFR 52.33, 40 CFR 60.11, and 40 CFR 61.12

EPA's credible evidence rule allows the Agency to use any "credible" data to prove CAA violations. Previously, EPA relied solely on reference test methods as the means of demonstrating compliance with various emissions limits.

Data considered "credible" include:

• CEM data
• Parametric data
• Engineer analyses
• Witness testimony

A source's emissions can be constantly monitored by any number of variables. More specifically, the rule allows EPA, state regulators, or private citizens to use data obtained from such methods as credible evidence in enforcement actions.

Industry groups opposed to the rulemaking claim that the new evidentiary standard provides no definitive test to measure compliance and that it opens the door for any number of citizen suits and endless litigation. EPA has attempted to calm fears by assuring industry that its focus will be on threats to public health and the environment and long-term threats that show a pattern of noncompliance, involve criminal conduct, or indicate illegal competitive advantage. Facilities may also use any credible evidence to disprove alleged violations.

DO'S AND DON'TS OF AIR PERMITTING

The following are some suggestions that have proven valuable in managing an inherently prolonged and complex permitting process as painlessly as possible:

• Visit the permitting authority early in the planning process to identify contacts and establish lines of communications.
• Determine which permits are required and which forms must be completed by talking to the regulatory authority.
• Cooperate with permitting authorities. Cooperation is the best approach to a permitting process that meets all requirements and satisfies the needs of owners, operators, regulators, and the public.
• Know project details and technical plans so that visits to the permitting authority are as productive as possible. Do not hide design details.
• Keep discussions with regulators technical in nature. Do not let personalities interfere with negotiations.
• Anticipate emissions as accurately as possible and then request emissions levels that include a margin of safety.
• Know when and how to ask for help interpreting laws and regulations that are confusing or appear conflicting.
• Be honest, accurate, and complete when asking questions, submitting applications, and reporting emissions data to regulatory authorities.
• Recognize that local and state regulatory authorities may be understaffed for the existing workload and that obtaining a permit may be a long, tedious, and iterative technical process.
• Review permits previously issued by the regulatory authority for other facilities with similar design and emissions requirements. Understanding the terms and conditions of these permits and being aware of the basis on which permitting decisions were made can help in the development of a successful permitting strategy.
• Perform realistic cost estimates and conduct meaningful cost-benefit analyses.
• Involve attorneys in technical discussions with the regulatory authority only when necessary. Their presence may hinder or impede communication about technical issues.
• Recognize that the permitting authority has wide interpretive latitude. Present feasible, technical options for reducing emissions when proposed plans are unacceptable.
• Track the permitting process. Do not turn the permitting process over to a third party and then assume negotiations will proceed smoothly and without delay.
• Establish clear exits from a project when it is apparent that the permitting process will not be successful.
• Formulate a plan with the regulatory authorities and stay focused on achieving the required milestones.
• Be open and objective with regulators and the public. Do not withhold information or be confrontational.
• Understand the position of the regulatory authority and focus only on issues that pertain to the permitting process.
• Negotiate permit terms and conditions. Reserve appeals for situations that are considered totally unacceptable or unrealistic.
• Persevere, but do not allow time to pass without action. Time wasted due to delays is usually not recovered.

SUPREMES BOOST EPA AUTHORITY

This article was originally printed as a news brief on March 17, 2004, on the BLR^® website at http://Enviro.BLR.com^®.

Make sure that your state-issued air permit is in sync with federal requirements. Federal authority to overrule state air permit decisions was substantially bolstered in a recent decision by the U.S. Supreme Court. The high court ruled that EPA did not exceed its authority when it effectively invalidated a prevention of significant deterioration (PSD) permit the Alaska Department of Conservation (ADEC) had issued to Teck Cominco (ADEC v. EPA).

Cominco applied for a PSD permit to increase nitrogen oxide (NOx) emissions in order to boost zinc production at a mine north of the Arctic Circle. The proposal, which ADEC accepted, called for bypassing best available control technology (BACT) requirements for a generator and installing less expensive Low NOx technology on all of its existing generators, including those not subject to BACT, and on a proposed seventh generator. Over EPA objections, ADEC and Cominco went ahead with the permit. EPA issued orders finding Cominco in noncompliance and prohibiting ADEC from issuing a PSD permit.

The Supreme Court upheld an appeals court ruling that although ADEC has permit authority discretion to determine BACT, it is not insulated from the oversight and enforcement authority assigned to EPA in other sections of the Clean Air Act.

For access to the National Stack Test Guidance document, click here.