1. Regulatory Summary:
Cross-State Air Pollution Rule
On July 6, 2011, USEPA issued the final Cross-State Air Pollution Rule (CSAPR), which establishes cap-and-trade programs
intended to reduce the interstate transport of emissions contributing to ozone and/or fine particulate matter (PM2.5) from
approximately 1,081 power plants in 27 states. Under the CSAPR, USEPA expects to achieve a 73% reduction in sulfur
dioxide (SO2) and a 54% reduction in nitrogen oxides (NOx) emissions from power plants (from 2005 levels) in the covered
states. This rule replaces the court-vacated Clean Air Interstate Rule (CAIR), which had previously attempted to address the
issue of cross-border ozone and PM2.5 nonattainment.
WHO IS SUBJECT TO THIS RULE? within its emissions budget. In addition, SO2 sources are only
allowed to trade allowances with CSAPR sources in their state’s
Stationary fossil-fuel-fired boilers and combustion turbines serving, at
group (e.g., sources in Group 1 states may only trade with other
any time on or after January 1, 2005, an electricity generator with
sources in Group 1 states).
a nameplate capacity exceeding 25 MWe and producing
electricity for sale. Certain cogeneration units and solid waste To comply with CSAPR, sources may reduce emissions through a
incineration units are exempt. combination of control technologies, fuel switching, dispatch
changes, and the purchase of allowances from other generators.
HOW DO THE CAP-AND-TRADE PROGRAMS WORK? Banked allowances under CAIR and Title IV Acid Rain Program
CSAPR establishes four interstate emission trading programs (ARP) cannot be used for compliance with CSAPR.
designed to control emissions of SO2 and NOx (40 CFR Part 97).
HOW ARE ALLOWANCES ALLOCATED?
• Two separate SO2 trading programs are established (Group 1
EPA has issued a Federal Implementation Plan (FIP) for each of the
and Group 2) (Subparts CCCCC and DDDDD, respectively) for
states beginning in 2012, but states can submit their own State
23 states controlled for PM2.5. Sources in both groups must
Implementation Plan (SIP) which would supersede the FIPs starting in
reduce SO2 emissions beginning in 2012. However, Group 1
2013. FIP allowances are allocated to existing units based on
states (IL, IN, IA, KY, MD, MI, MO, NJ, NY, NC, OH, PA, TN,
share of state’s heat input (average of highest three of last five
VA, WV, WI) are subject to more stringent reduction targets than
years) and constrained not to exceed a unit’s maximum emissions
Group 2 states (AL, GA, KS, MN, NE, SC, TX) and must make
from 2003-10. Between 92-98% of available allowances are
additional, significant reductions in SO2 emissions beginning in
allocated to existing sources; remaining allowances are preserved
2014.
for potential new units and committed/planned new units.
• States controlled for PM2.5 are also subject to an annual NOx
USEPA provided the following allowance price estimates:
trading program (Subpart AAAAA).
• States controlled for ozone (20) are subject to an ozone season CSAPR Trading Program Estimated Allowance Prices
(2007$/ton)
(May 1 to September 30) trading program (Subpart BBBBB).
2012 2014
Affected sources must hold one SO2 or one NOx allowance, Annual SO2 Group 1 Program $1,000 $1,100
respectively, for every ton of SO2 or NOx emitted during the control Annual SO2 Group 2 Program $600 $700
period. Banking of allowances for use or trading in future years is Annual NOx Trading Program $500 $600
allowed. Out-of-state trading is allowed provided each state stays Seasonal NOx Trading Program $1,300 $1,500
2. Regulatory Summary: Cross-State Air Pollution Rule
Note: This map includes states covered in the SNPR
WHAT ARE THE KEY MONITORING REQUIREMENTS? ENVIRON’S EXPERIENCE AND SERVICES
Affected units are required to install continuous monitoring systems Throughout its history, ENVIRON has provided services to the
to monitor mass emissions (SO2 or NOx depending on the power industry. From siting to closure, projects have spanned the
trading program) and individual unit heat input. Under the NOx needs of power generation companies, ranging from:
annual and SO2 trading programs, monitoring systems must be
Business Development and Expansion
certified by January 1, 2012. Under the NOx ozone season
• Due Diligence Evaluations
trading program, monitoring systems must be certified by May 1,
• Environmental Planning
2012. Alternative monitoring systems can be petitioned.
• Site Development
SUPPLEMENTAL NOTICE OF PROPOSED RULEMAKING Regulatory Approvals and Litigation Support
• Facility Permitting and Compliance
A supplemental notice of proposed rulemaking (SNPR) was
• Natural Resources Surveys
issued that would add six states to the seasonal ozone trading
• Litigation Support
program (IA, KS, MI, MO, OK, WI), five of which are already
subject to the annual SO2 and NOx trading programs. This Operational and EHS Performance Enhancement
SNPR would increase the total number of states subject to CSAPR • Environmental Compliance (including CSAPR, Utility MACT,
from 27 to 28. Rule to be finalized by November 1, 2011. 316(b), Coal Ash Rule, GHG)
• Sustainability and Governance
WHAT ARE THE KEY COMPLIANCE DATES? • EHS and Carbon Management Systems
Covered sources must comply with requirements for the annual Site Closure and Decommissioning
SO2 and NOx programs starting January 1, 2012 and January • Site Characterization
1, 2014 for the first and second phases, respectively. Similarly, • Closure Strategy and Management
sources are required to comply with requirements of the seasonal • Site Redevelopment
NOx program starting May 1, 2012, and by May 1, 2014.
FOR MORE INFORMATION, PLEASE CONTACT:
REFERENCES
Alan Kao, Principal Alan Shimada, Principal
Rule home page – http://www.epa.gov/airtransport/ +1.978.449.0324 +1.973.286.4263
The CSAPR was finalized on July 6, 2011 and published in the akao@environcorp.com ashimada@environcorp.com
Federal Register on August 8, 2011 (76 FR 48208-48483).
www.environcorp.com
