Court Vacates Biogenic CO2 Deferral Rule

Aug 26, 2013

Summary Of Vacatur 

The United States Court of Appeals for the District of Columbia Circuit (Court) vacated a three-year deferral that had exempted certain industrial, commercial, and institutional sources of biogenic carbon dioxide (CO2) from the United States Environmental Protection Agency’s (USEPA’s) Prevention of Significant Deterioration (PSD) and Title V air permitting rules. The July 12, 2013 decision creates significant regulatory uncertainty for sources of biogenic CO2 emissions in the US. The court’s decision could take effect as early as September 2, 2013, if USEPA takes no other actions in the interim.

Implications Of Vacatur

The vacatur, absent further action by USEPA, means that new major sources of greenhouse gas emissions may be subject to PSD or the Title V air permitting program. Sources with total greenhouse gas emissions (comprising anthropogenic CO2, biogenic CO2, and other greenhouse gas emissions) greater than or equal to 100,000 tons per year (TPY) of CO2 equivalents (CO2e), and modified major sources and “Anyway Sources” (i.e., sources that would have been subject to PSD regardless of the quantity of their greenhouse gas emissions) with total greenhouse gas emissions greater than or equal to a 75,000 TPY increase of CO2e, will be subject to the PSD permitting program. Also, sources with total greenhouse gas emissions greater than or equal to 100,000 TPY will be subject to the Title V air operating permitting program.

What has changed is that biogenic CO2 will now count toward total CO2e when identifying whether or not a source is classified as a major source or a major modification and whether or not a Best Available Control Technology (BACT) analysis for greenhouse gas emissions must be conducted as part of the PSD permitting process. In addition, some sources that escaped PSD review for greenhouse gases during the deferral period may be required to perform a retroactive PSD review (and/or BACT analysis) and obtain a PSD permit for greenhouse gases.

Who Is Affected? 

Sectors that may be heavily impacted by the ruling include manufacturing, waste management, renewable fuels, and biomass power-production industries.

Next Steps
Expect USEPA to announce their reaction to the vacatur, and the steps they plan to take. Because the deferral was optional, and some states rejected the deferral, state environmental agency regulatory positions will be important.

Golder Has Solutions

During this time of regulatory uncertainty, industrial, commercial, and institutional sources can use their biogenic CO2 potential-to-emit to determine their worst-case classification, and consider capping facility greenhouse gas emissions to retain minor source status for PSD and/or Title V purposes.

Golder experts can:

  • Assist with biogenic CO2 emissions accounting and forecasting 
  • Understand states’ current and unfolding positions on the deferral
  • Plan air permitting and compliance strategies

Golder has prepared a white paper and decision tree with more detail on the topic.  The white paper and decision tree are available upon request by emailing Leslie Wong.

Golder Contacts 

For further information, contact the following regional personnel: