On October 3, 2016, EPA published a proposed rule that would establish significant thresholds for greenhouse gases (“GHGs”) under the Prevention of Significant Deterioration (“PSD”) and Title V permit programs.

The proposed revisions respond to recent Supreme Court and D.C. Circuit decisions striking down the portion of EPA’s Tailoring Rule that would have required millions of sources to become subject to EPA’s PSD construction permitting program and Title V operating permit program solely on the basis of their GHG emissions. EPA is proposing to remove those provisions of the rule, and replace them with a more traditional significance threshold for GHGs (referred to in the rule as the “Significant Emission Rate”) that defines when a source can trigger PSD permitting for GHGs. In UARG v. EPA, 134 S. Ct. 2427 (2014), the Supreme Court upheld parts of the Tailoring Rule regulating GHGs contemporaneously with other pollutants. Therefore, this proposal only applies to sources, known as “anyway sources,” that already fall under PSD due to emissions of other traditionally regulated PSD pollutants.  That is, a source would only trigger PSD permitting requirements for GHGs if the source triggers PSD based on its emissions of one or more traditionally regulated PSD pollutants, such as SO2, NOx, PM, or VOCs. To accommodate the mandated changes, the agency has significantly revised the applicable regulations, specifically regarding definitions of key terms.

The proposed Significant Emissions Rate will determine whether best available control technology (“BACT”) standard applies to GHGs emitted from a source already subject to PSD. EPA proposes a threshold of 75,000 tons per year (“tpy”) of CO2 equivalent, which it determines to be a de minimis emission rate. The agency reached this conclusion because, according to its calculations using collected data, any GHG efficiency controls place on sources emitting less than 75,000 CO2ewould not produce significant enough reductions to warrant the accompanying administrative burden. Although the agency focuses its analysis on 75,000 tpy CO2 equivalent, EPA requests comments on thresholds anywhere between 30,000 and 75,000 tpy CO2 equivalent.

The agency will accept comments on the proposed rule until December 2, 2016. The proposed rule is published here.  For questions regarding the proposed rule, please contact Margaret Campbell, Angela Levin, or Mack McGuffey