Setting Record Straight on Tailoring Rule Decision

By Bob Cleaves | August 20, 2013

In the aftermath of the D.C. Circuit’s decision on how the U.S. EPA will regulate greenhouse gas (GHG)emissions from biomass, many questions have been raised, indicating a lot of confusion about what the decision means for the regulation of biogenic CO2 emissions.

First, let’s clear up what the decision actually achieved. Importantly, contrary to some press reports, the decision is not about whether EPA can legally exclude biomass, and also does not halt the three-year study. To quote the court, “Because the Deferral Rule cannot be justified under any of the administrative law doctrines relied on by EPA, this opinion… leaves for another day the question whether the agency has authority under the Clean Air Act to permanently exempt biogenic carbon dioxide sources from the PSD (prevention of significant deterioration) permitting program.” If and when EPA adopts a permanent exemption for some or all biogenic carbon dioxide sources, we will have the benefit of three years of scientific study, as well as fully briefed and contextualized arguments about EPA’s authority under the Clean Air Act. In other words, the Court found EPA’s rationale for deferring GHG regulation as lacking, not that regulation of biomass was scientifically sound or even justified under the Clean Air Act.

Here’s a summary of the rule’s sordid history, which is needed when trying to understand the recent decision. Shortly after promulgating the Tailoring Rule, EPA issued a Call for Information, seeking technical and scientific information to “evaluate different accounting approaches” for measuring biogenic carbon dioxide emissions. Specifically, EPA sought information about how to treat biogenic carbon dioxide sources differently for purposes of measuring the emissions that trigger the PSD and Title V permitting programs. For example, EPA requested comments on how to “determine the net impact on the atmosphere of CO2 emissions” and the “appropriate spatial/geographic scale for conducting this determination.”

In March 2011, EPA, citing its ongoing efforts to understand the unique characteristics of biogenic carbon dioxide, issued a notice of proposed rulemaking seeking comment on whether it should defer regulation of these sources for a three-year period. Simultaneously, it published a guidance document for determining best available control technology (BACT) for biogenic carbon dioxide emissions from sources that were regulated under the PSD permitting program at Step One of the Tailoring Rule.

Based on comments and studies received during the notice-and-comment period, and following up on the Call for Information, EPA issued a rule—the one challenged in the court case— postponing regulation of biogenic carbon dioxide sources for three years. In support of this so-called Deferral Rule, EPA repeatedly emphasized that “the issue of accounting for the net atmospheric impact of biogenic CO2 emissions is complex enough that further consideration . . . is warranted.”

It is important to keep in mind that the Deferral Rule contains a sunset provision: absent further agency action, on July 21, 2014, biogenic carbon dioxide will be regulated under the PSD and Title V programs, as modified by the Tailoring Rule.

Although the Deferral Rule is a temporary regulation, it functions, in effect, as a permanent exemption from the PSD permitting requirement for any biogenic carbon dioxide source constructed during the three-year deferral period. Exempted sources would have to obtain PSD permits only if they undertake a modification project after the deferral period ends.

The Deferral Rule is also voluntary. To quote EPA, “Each state may decide if it wishes to adopt the deferral and proceed accordingly.” At least one state, Massachusetts, is currently regulating biogenic carbon dioxide sources at Step Two of the Tailoring Rule.

Contrary to reports in the media, EPA’s position is not to permanently exempt biomass. In fact, as noted by the dissenting judge, EPA has conceded “the possibility…that more detailed examination of the science of biogenic CO2 will demonstrate that…some biogenic feedstocks…have a significant impact on the net carbon cycle.”

EPA is not permanently treating biogenic CO2 emissions differently. As the Deferral Rule explains, EPA believes, based on the evidence currently in its possession, that further study may support a decision to give special treatment to some biogenic emissions.

We look forward to working with EPA to craft a rule that acknowledges the benefits of biomass as a way to fight climate change and promote healthy forests, and the need to expand—rather than close—energy markets for biomass.

Author: Bob Cleaves
President and CEO, Biomass Power Association