GHG Emissions Trigger New Air Quality Permitting Requirements

Biomass plant operators and developers need to be aware how the U.S. EPA’s Tailoring Rule was developed and to keep track of important dates and trigger levels.

The U.S. EPA has recently promulgated environmental regulations for greenhouse gas (GHG) emissions that will impose significant new air quality permitting requirements on both new and existing industrial facilities and projects. For new projects in particular, these requirements could substantially affect the associated cost, design, and permitting timelines.

On Dec. 7, 2009, the U.S. EPA issued its Endangerment Finding, which determined that the current and projected concentrations of the six key GHGs—carbon dioxide (CO2), methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride—in the atmosphere threaten the public health and welfare of current and future generations.1 As a result of this and subsequent rulemaking, these GHGs became “regulated pollutants” under a number of air quality regulatory programs.

Because of the special nature of GHGs, including the much larger mass of emissions required to have an environmental impact relative to traditional air pollutants, the EPA has since been working to clarify how these new pollutants will be regulated under existing air quality permitting programs.

On June 3, the U.S. EPA published the “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule,”2 clarifying how GHGs are to be treated under these two existing air quality permitting programs (this is known as the Tailoring Rule).

As a result, existing facilities and new projects will need to consider the potential applicability of the Prevention of Significant Deterioration and Title V permitting programs (discussed further below) due to GHG emissions. In some cases, one or both of these programs may apply due solely to GHG emissions, whereas they would not have applied prior to issuance of the Tailoring Rule.

Of interest to the readers of Biomass Power & Thermal, as part of the Tailoring Rule, the EPA has solicited further information about issues surrounding the degree of carbon neutrality that might be applied to GHG emissions resulting from the combustion of biomass fuels. Although the fact that additional information is being solicited suggests that the EPA may apply different criteria to biomass combustion GHGs in the future, currently the Tailoring Rule does not treat these GHGs differently than the  GHGs emitted from fossil fuels.

One way that GHG emissions will need to be quantified in order to assess applicability of the PSD and Title V permitting programs is to estimate the sum of each individual GHG annual emission rate multiplied by its global warming potential (GWP); this sum is known as the CO2 equivalent emission rate, or CO2e.3 For biomass combustion sources, the value for CO2e will be determined primarily by CO2 emissions.  The current applicability of GHG emissions to the PSD and Title V permitting programs, based on CO2e emission levels, are described below.

Changes to Title V Permitting

The Title V permitting program provides the top tier of air quality operating permits for existing facilities and is applicable only to facilities with relatively large emissions of regulated air pollutants. Compared to lower tier permitting, Title V permits typically require a higher level of compliance monitoring and incur higher annual permitting fees. At the time of this writing, Title V permitting requirements generally apply only to facilities that have the potential to emit greater than 100 tons per year (tpy) of a regulated pollutant, or 10/25 tpy of an individual/all combined hazardous air pollutants. Going forward, GHG emissions will trigger the need for a Title V permit as described in Table 1.

As shown in Table 1, existing facilities not subject to Title V permitting prior to July 1 will become subject to Title V permitting on that date if the facility has the potential to emit over 100,000 tons per year of CO2e and 100 tons per year of GHG on a mass basis (i.e., not accounting for GWPs). For these facilities, a Title V permit application must be submitted within 12 months of becoming subject to these requirements.

For reference, a single wood-fired boiler with a heat input capacity of roughly 110 million Btu per hour (MMBtu/hr) that has no permit restrictions on annual hours of operation would have the potential to emit 100,000 tons per year CO2e.

Changes to Major New Source Review

The PSD new source review (NSR) permitting program provides air quality construction permits for projects at relatively large facilities with significant increases of air pollutant emissions located in areas that attain national ambient air quality standards. Unlike the potential Title V permitting requirements for GHG emissions, which can apply to existing facilities not making any changes, the PSD NSR permitting requirements can only be triggered by new facilities, the addition of new emission units to existing facilities, or the modification of existing emission units at existing facilities (i.e., something has to change at a facility that results in a significant increase in emissions).

Under the Tailoring Rule, many projects for new and modified facilities that wouldn’t have previously been affected will be pulled into the PSD permitting program.  Prior to the new rule, only those facilities with total emissions of greater than 250 tons per year (or 100 tons per year for certain types of facilities) of a regulated air pollutant could potentially be subject to PSD permitting requirements. These levels of emissions are typically indicative of a relatively large industrial facility or process. For example, a new biomass-fired boiler emitting a reasonably low 0.20 pounds per MMBtu of nitrogen oxides (NOx) would need to have an average heat input rate of at least 285 MMBtu/hr before exceeding the 250 ton per year threshold for regulation under the PSD permitting program (assuming it was the only stationary NOx-emitting source at a facility with the 250 tpy threshold). With emission controls, even much larger biomass-fired industrial boilers could avoid the PSD program.

Under the new GHG regulations, relatively small facilities with combustion sources will be subject to PSD review for GHGs and, likely, for other pollutants as well.  The new GHG PSD applicability thresholds will phase in as shown in Table 2.

These GHG emission thresholds apply to all new and modified sources combined at a facility. In addition, starting July 1, if a facility (new or existing) has total GHG emissions exceeding 100,000 tpy CO2e, and new emissions (due to adding new sources or modifying existing sources) of other pollutants exceeding their associated Significant Emission Rates (SERs), the project will be subject to PSD NSR requirements for those pollutants as well, even if facility-wide emissions of no other pollutants exceed 100/250 tpy (SERs for many regulated pollutants fall in the range of 10 to 40 tpy). As an example, a new biomass power plant consisting of a 150 MMBtu/hr wood-fired boiler, steam turbine, and ancillary fuel handling equipment could have the following maximum potential annual emissions:

• 25 tpy of particulate matter less than 10 microns (PM10) (SER of 15 tpy)

• 130 tpy of NOx (SER of 40 tpy)

• 136,000 tpy of CO2e (SER of 75,000 tpy)

Prior to July 1, this project would not be subject to PSD NSR permitting requirements because emissions of each non-GHG pollutant are less than 250 tpy. Starting July 1, such a project would be subject to PSD NSR requirements for PM10, NOx, and GHGs because CO2e emissions exceed 100,000 tpy and maximum potential emissions of all three pollutants exceed their associated SER, likely increasing the cost of the project significantly.

The PSD NSR permitting program includes potential requirements such as:

• Use of Best Available Control Technology for control of air pollutant emissions.

• Dispersion modeling to demonstrate compliance with ambient air quality standards and PSD increments.

• Dispersion modeling to demonstrate potential impacts to visibility and deposition within Class I protected areas.

• Pre- or post-construction monitoring of ambient air pollutants.

Compliance with these additional requirements under the PSD NSR program can range from tens of thousands to millions of dollars, depending on the project.

In November 2010, the EPA released a guidance document for implementation of the new GHG regulations. Among other topics, this document discusses potential approaches to evaluating BACT for GHGs. Briefly, some of the guidance provided is as follows:

• BACT for new facilities will need to evaluate energy efficiency measures for the emission unit itself as well as overall energy efficiency of all aspects of the facility pertaining to the energy produced by the facility and used at the facility site (e.g., steam and/or electricity).

• BACT for modified existing facilities only need to evaluate energy efficiency measures for the new or modified emission units themselves.

• Energy efficiency improvements to be evaluated include changes to the emission unit design, but not wholesale changes to the fundamental business purpose for the proposed emission unit or facility. For example, a proposed wood-fired boiler need not consider replacement with a natural gas boiler. However, the guidance document gives the specific example of a subcritical steam pressure boiler that would need to evaluate the improved energy efficiency provided by a supercritical steam pressure boiler, which is likely to be a cost-effective change relative to associated reductions in GHG emissions.

• Capture and use (or sequestration) of GHGs should at least be considered and evaluated within the framework of the BACT determination process.

In general, if PSD NSR requirements for GHGs are triggered, all BACT options that would reduce GHG emissions to the atmosphere must be considered as part of the evaluation process and either dismissed on the basis of technical infeasibility, dismissed on the basis of adverse environmental impact, dismissed on the basis of cost-effectiveness or incorporated into the project.


What’s Next?

The discussion above provides only a brief overview of the new GHG regulations under the Tailoring Rule, but gives an indication of how otherwise exempt new or existing biomass facilities might get pulled into the Title V permitting program, and similarly how new or modified biomass facilities might get pulled into the PSD NSR permitting program.

In addition to evaluating the potential applicability of these permitting programs under the new rules, facility operators and developers should track future GHG rulemaking resulting from:

• The EPA’s future determinations concerning the degree of carbon neutrality associated with combusting biomass-derived fuels. This could alter the applicability of the permitting programs discussed in this article to emission units combusting biomass-derived fuels and/or specific source categories.

• The EPA’s indication in the Tailoring Rule that they intend to eventually lower the GHG emissions thresholds for applicability of the permitting programs discussed in this article, pulling in even smaller facilities. These changes will be finalized no later than July 1, 2012, with implementation following one year later. However, the EPA committed in the Tailoring Rule that no facilities with GHG emissions (or emission increases) below 50,000 tpy CO2e would be pulled into these programs before April 30, 2016.

In this new era of federal regulation of GHGs, the Tailoring Rule provides what is likely to be only the first step in a program of air quality permitting requirements aimed at reducing overall GHG emissions from industrial sources.

1 Later published in Federal Register, Volume 74, No. 239, December 15, 2009, pp 66496 – 66546.
2 Federal Register, Volume 75, No. 106, June 3, 2010, pp 31514 – 31608.
3 GWP values are provided relative to the GWP for CO2, which is assigned a value of one.  Other GWP values can be found in the U.S. EPA’s mandatory GHG reporting rule (40 CFR Part 98).

Authors: Brian Patterson, Ph.D.
Associate and Senior Consultant, Golder Associates Inc.
(503) 607-1820

Geoff Scott, P.E.
Senior Project Engineer, Golder Associates Inc.
(503) 607-1820