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Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS rule (2021)

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The Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS is a significant rule issued by the Environmental Protection Agency (EPA), effective June 29, 2021, that addressed interstate transport of ozone pollution under the Clean Air Act.[1]

HIGHLIGHTS
  • Name: Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS
  • Code of Federal Regulations: 40 CFR 51, 40 CFR 52, 40 CFR 78, 40 CFR 97
  • Action: Final rule
  • Type of significant rule: Economically significant rule

    • Timeline

    The following timeline details key rulemaking activity:

    Background

    The “good neighbor provision” of the Clean Air Act section 110(a)(2)(D)(i)(I) requires states to prohibit emissions regarding the 2008 ozone National Ambient Air Quality Standards (NAAQS). The EPA published the Cross-State Air Pollution Rule (CSAPR) Update on October 26, 2016, to address the interstate transport of emissions from 21 states. On September 13, 2019, the United States Court of Appeals for the District of Columbia Circuit remanded the CSAPR Update in Wisconsin v. EPA as unlawful for allowing upwind states to continue their significant contributions to downwind states’ ozone problems.[1]

    Summary of the rule

    The following is a summary of the rule from the rule's entry in the Federal Register:

    “ The U.S. Environmental Protection Agency (EPA) is taking this action to address interstate transport of ozone pollution under the 'good neighbor provision' of the Clean Air Act (CAA). This final action is taken in response to the United States Court of Appeals for the District of Columbia Circuit's (D.C. Circuit) remand of the Cross-State Air Pollution Rule (CSAPR) Update in Wisconsin v. EPA on September 13, 2019. The CSAPR Update finalized Federal Implementation Plans (FIPs) for 22 states to address their good neighbor obligations for the 2008 ozone National Ambient Air Quality Standards (NAAQS). The D.C. Circuit found that the CSAPR Update, which was published on October 26, 2016 as a partial remedy to address upwind states' obligations prior to the 2018 Moderate area attainment date under the 2008 ozone NAAQS, was unlawful to the extent it allowed those states to continue their significant contributions to downwind ozone problems beyond the statutory dates by which downwind states must demonstrate their attainment of the air quality standards. On the same grounds, the D.C. Circuit also vacated the CSAPR Close-Out in New York v. EPA on October 1, 2019. This final rule resolves 21 states' outstanding interstate ozone transport obligations with respect to the 2008 ozone NAAQS.


    This action finds that for 9 of the 21 states for which the CSAPR Update was found to be only a partial remedy (Alabama, Arkansas, Iowa, Kansas, Mississippi, Missouri, Oklahoma, Texas, and Wisconsin), their projected ozone precursor emissions in the 2021 ozone season and thereafter do not significantly contribute to a continuing downwind nonattainment and/or maintenance problem, and therefore the states' CSAPR Update FIPs (or the SIPs subsequently approved to replace certain states' CSAPR Update FIPs) fully address their interstate ozone transport obligations with respect to the 2008 ozone NAAQS. This action also finds that for the 12 remaining states (Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia), their projected 2021 ozone season nitrogen oxides (NOX) emissions significantly contribute to downwind states' nonattainment and/or maintenance problems for the 2008 ozone NAAQS. In this final action, EPA is issuing new or amended FIPs for these 12 states to replace their existing CSAPR NOX Ozone Season Group 2 emissions budgets for electricity generating units (EGUs) with revised budgets via a new CSAPR NOX Ozone Season Group 3 Trading Program. EPA is requiring implementation of the revised emission budgets beginning with the 2021 ozone season. Based on EPA's assessment of remaining air quality issues and additional emission control strategies for EGUs and other emissions sources in other industry sectors (non-EGUs), EPA is further determining that these NOX emission reductions fully eliminate these states' significant contributions to downwind air quality problems for the 2008 ozone NAAQS. In this action, EPA is also finalizing an error correction of its June 2018 approval of Kentucky's good neighbor SIP.[2]

    		”

    Summary of provisions

    The following is a summary of the provisions from the rule's entry in the Federal Register:[1]

    “ To reduce interstate ozone transport under the authority provided in CAA section 110(a)(2)(D)(i)(I), this rule proposes to further limit ozone season (May 1 through September 30) NOX emissions from EGUs in 12 states using the same framework used by EPA in developing the CSAPR and other good neighbor rules (the 4-step good neighbor framework or 4-step framework). The 4-step good neighbor framework provides a process to address the requirements of the good neighbor provision for ground-level ozone NAAQS: (1) Identifying downwind receptors that are expected to have problems attaining or maintaining the NAAQS; (2) determining which upwind states contribute to these identified problems in amounts sufficient to “link” them to the downwind air quality problems (i.e., here, a 1 percent contribution threshold); (3) for states linked to downwind air quality problems, identifying upwind emissions that significantly contribute to downwind nonattainment or interfere with downwind maintenance of the NAAQS; and (4) for states that are found to have emissions that significantly contribute to nonattainment or interfere with maintenance of the NAAQS downwind, implementing the necessary emissions reductions through enforceable measures. In this proposed rule, EPA applies this 4-step framework to respond to the D.C. Circuit's remand and to revise the CSAPR Update with respect to the 2008 ozone NAAQS.

    In order to apply the first step of the 4-step framework to the 2008 ozone NAAQS, EPA performed air quality modeling coupled with ambient measurements in an interpolation technique to project ozone concentrations at air quality monitoring sites in 2021.[14] EPA evaluated 2021 projected ozone concentrations at individual monitoring sites and considered current ozone monitoring data at these sites to identify receptors that are anticipated to have problems attaining or maintaining the 2008 ozone NAAQS.

    To apply the second step of the framework, EPA used air quality modeling and an interpolation technique to quantify the contributions from upwind states to ozone concentrations in 2021 at downwind receptors. Once quantified, EPA then evaluated these contributions relative to a screening threshold of 1 percent of the NAAQS (i.e., 0.75 ppb). States with contributions that equal or exceed 1 percent of the NAAQS were identified as warranting further analysis for significant contribution to nonattainment or interference with maintenance. States with contributions below 1 percent of the NAAQS were considered to not significantly contribute to nonattainment or interfere with maintenance of the NAAQS in downwind states. Based on EPA's updated air quality and contribution analysis using 2021 as the analytic year, EPA proposes that the following 12 states have contributions that equal or exceed 1 percent of the 2008 ozone NAAQS, and thereby warrant further analysis for significant contribution to nonattainment or interference with maintenance: Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia.

    At the third step of the 4-step framework, EPA applied the multi-factor test used in the CSAPR Update, which evaluates cost, available emission reductions, and downwind air quality impacts to determine the amount of linked upwind states' emissions that “significantly” contribute to downwind nonattainment or maintenance receptors. In this action, EPA applies the multifactor test to both EGU and non-EGU source categories and assesses potential emission reductions in all years for which there is a potential remaining interstate ozone transport problem (i.e., through 2025), in order to ensure a full remedy in compliance with the Wisconsin decision.

    EPA identified a control strategy that reflects the optimization of existing selective catalytic reduction (SCR) controls and installation of state-of-the-art NOX combustion controls at EGUs, with an estimated marginal cost of $1,600 per ton. It is at this control stringency where incremental EGU NOX reduction potential and corresponding downwind ozone air quality improvements are maximized. That is, the ratio of emission reductions to marginal cost and the ratio of ozone improvements to marginal cost are maximized relative to the other control stringency levels evaluated. EPA finds that these very cost-effective EGU NOX reductions will make meaningful and timely improvements in downwind ozone air quality to address interstate ozone transport for the 2008 ozone NAAQS, as discussed in section VII.D.1 below. Further, this evaluation shows that emission budgets reflecting the $1,600 per ton cost threshold do not over-control upwind states' emissions relative to either the downwind air quality problems to which they are linked at step 1 or the 1 percent contribution threshold that triggers further evaluation at step 2 of the 4-step framework.

    EPA notes that these proposed EGU control strategies (optimization of existing SCR controls and installation of state-of-the-art NOX combustion controls) were the same strategies selected in the CSAPR Update for the 2017 ozone season, and which at that time EPA characterized as only a partial remedy. For this rule, EPA extends its evaluation of the reduction potential from these control strategies to years beyond 2017 in order to assess a full remedy. EPA's updated analysis, as discussed in more detail in Section VII, leads the Agency to propose that these control strategies can provide additional cost-effective emission reductions for the 2021 through 2024 ozone seasons. While EPA's analysis indicates that the majority of EGUs implemented these control strategies in response to the CSAPR Update, changes in the power sector since the 2017 ozone season and updated air quality and contribution analysis show that there is a demonstrated need to update the emission budgets for these 12 states to fully eliminate significant contribution.

    For non-EGU industry sectors and emissions sources, EPA applied the step 3 multi-factor test to determine whether any emissions reductions should be required from non-EGU sources to address significant contribution under the 2008 ozone NAAQS. EPA acknowledges that its current datasets with information on emissions, existing controls on emissions sources, emission-reduction potential, and air quality impacts for these sources are relatively incomplete and uncertain compared to the datasets it has for EGUs. Nonetheless, using the best information currently available to the Agency, the proposed analysis suggests that there are relatively fewer emissions reductions available at a cost threshold comparable to the cost threshold selected for EGUs. Such reductions are estimated to have a relatively small effect on any downwind receptor in the year by which such controls could likely be installed. For these reasons, EPA proposes that limits on ozone season NOX emissions from non-EGU sources are not required to eliminate “significant” contribution under the 2008 ozone NAAQS (see section VII.D.2).

    To improve the underlying data and assessment of emission reduction potential from non-EGU sources for this and future regulatory efforts, EPA is soliciting comment on the assessment of emission reduction potential from the glass and cement manufacturing sectors discussed in Sections VII.B.2, VII.C.2, and VII.D.2. In addition, EPA summarizes the available information on all potential control measures for non-EGU emissions sources or units with 150 tons per year or more of pre-control NOX emissions in several industry sectors for the 12 states in Table I.A–2. This information illustrates that there are many potential approaches to assessing emissions reductions from non-EGU emissions sources or units. EPA is soliciting comment on the completeness and accuracy of this additional information on potential control measures for non-EGU emissions sources or units in several industry sectors. Specifically, EPA summarized information on the application, costs, and installation timing of ultra-low NOX burners on industrial, commercial, and institutional (ICI) boilers and low emission combustion on reciprocating internal combustion (IC) engines.

    Based on EPA's analysis at step 3, the Agency proposes EGU NOX ozone season emission budgets developed using uniform control stringency represented by $1,600 per ton. EPA proposes to determine that with implementation of this control strategy, the 12 states in Table I.A–2 will have fully addressed significant contribution under the good neighbor provision for the 2008 ozone NAAQS. EPA is proposing to align implementation of emission budgets with relevant attainment dates for the 2008 ozone NAAQS, as required by the D.C. Circuit's decision in Wisconsin v. EPA.[15] As EPA's final 2008 Ozone NAAQS SIP Requirements Rule [16] established the attainment deadline of July 20, 2021, for ozone nonattainment areas currently designated as Serious, EPA proposes to establish emission budgets and implementation of these emission budgets starting with the 2021 ozone season as shown in Table I.B–1.

    As noted in Section I, EPA further determined which emission reductions are impossible to achieve by the 2021 attainment date—and whether any such additional emission reductions should be required beyond that date.[17]

    See Wisconsin, 938 F.3d at 320. EPA estimates that one part of the selected control strategy—installation of state-of-the-art NOX combustion controls—can occur between approximately one to six months at any particular unit. As the final rule will likely become effective either immediately prior to or slightly after the start of the 2021 ozone season, EPA determined it is not possible to install state-of-the-art NOX combustion controls on a regional scale by the beginning of the 2021 ozone season.[18] EPA proposes to conclude that an emission reduction strategy is impossible if it cannot be implemented statewide by the relevant attainment date because statewide budgets are based on fleetwide averages. Therefore, the proposed 2021 ozone season emission budgets reflect only the control strategy of optimizing existing SCR controls at the affected EGUs, but the proposed emission budgets for the 2022 ozone season and beyond reflect both the continued optimization of existing SCR controls and installation of state-of-the-art NOX combustion controls. Detailed installation-timing information for this technology is available in Section VII.B and the EGU NOX Mitigation Strategies TSD.

    As discussed in section VII.D.1, EPA's air quality projections anticipate that with the implementation of the identified control stringency for EGUs represented by $1,600 per ton, downwind nonattainment and maintenance problems for the 2008 ozone NAAQS will persist through the 2024 ozone season. Therefore, EPA is proposing to adjust emission budgets for upwind states that remain linked to downwind nonattainment and maintenance problems through the 2024 ozone season to incentivize the continued optimization of existing SCR controls and installation of state-of-the-art NOX combustion controls. The 2024 emission budgets would then continue to apply in each year thereafter.

    As discussed below, EPA notes that emissions budgets are implemented through the market-based mechanism of a trading program for emission allowances. Under such a trading program, sources have the compliance flexibility to make emissions reductions themselves or to purchase allowances from other sources (either directly from those sources or indirectly through a third party) that do not need those allowances to cover their remaining emissions. Given this compliance flexibility, EPA is taking comment on whether delaying the incorporation of emission reduction potential from the installation of state-of-the-art NOX combustion controls into state emission budgets until 2022 is necessary (Comment C–1).

    To apply the fourth step of the 4-step framework (i.e., implementation), EPA proposes to include enforceable measures in the promulgated FIPs to achieve the required emission reductions in each of the 12 states. Specifically, the FIPs would require power plants in the 12 states to participate in a new CSAPR NOX Ozone Season Group 3 Trading Program that largely replicates the existing CSAPR NOX Ozone Season Group 2 Trading Program; with the main differences being the geography and budget stringency. Aside from the removal of the 12 covered states from the current CSAPR NOX Ozone Season Group 2 Trading Program, this proposal leaves unchanged the budget stringency and geography of the existing CSAPR NOX Ozone Season Group 1 and Group 2 trading programs.

    For this rulemaking, EPA is proposing to authorize a one-time conversion of allowances banked in 2017–2020 under the CSAPR Update NOX Ozone Season Group 2 Trading Program into a limited number of allowances that can be used for compliance in the CSAPR NOX Ozone Season Group 3 Trading Program. Similar to the approach taken in the CSAPR Update, EPA is proposing to base the conversion on a formula that ensures emissions in the CSAPR NOX Ozone Season Group 3 Trading Program region do not exceed a specified level (defined as emissions up to the sum of the states' ozone season emissions budgets and variability limits) as a result of the use of banked allowances from the Group 2 trading program. EPA also proposes to provide a process through which holders of Group 2 allowances in non-facility accounts (“general” accountholders) could designate any Group 2 allowances that they do not wish to have converted to Group 3 allowances.

    The remainder of this preamble is organized as follows: Section IV describes EPA's legal authority for this proposed action; section V describes the human health and environmental context, as well as EPA's proposed approach for addressing interstate transport for the 2008 ozone NAAQS; section VI describes its assessment of downwind receptors of concern and upwind state ozone contributions to those receptors, including the air quality modeling platform and emission inventories that EPA used; section VII describes EPA's approach to quantify upwind state obligations in the form of final EGU NOX emission budgets; section VIII details the implementation requirements including key elements of the CSAPR trading program and deadlines for compliance; section IX describes the expected costs, benefits, and other impacts of this proposed rule; section X discusses changes to the existing regulatory text; and section XI discusses the statutes and executive orders affecting this proposed rulemaking.[2]

    		”

    Significant impact

    See also: Significant regulatory action

    Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.

    Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]


    The text of the Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS rule states that OMB deemed this rule economically significant under E.O. 12866:

    “ Because this rule is projected to result in annualized benefits greater than $100 million per year, as discussed in section VIII of the preamble, OMB has found that the rule is 'economically significant.'[2] ”

    Text of the rule

    The full text of the rule is available below:[1]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Federal Register, "Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS," April 30, 2021
    2. ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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