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What You Need to Know About the Cross-State Air Pollution Rule
The EPA is limiting interstate transport of NOx and SO2 by replacing the Clean Air Interstate Rule with the CSAPR. What does this mean to you?
By Rich Hovan, Manager, Rockwell Software Environmental Solutions, Rockwell Automation
Will it create a financial burden on businesses or protect people from harmful emissions? And which has a bigger impact? That’s the debate, now that the U.S. Environmental Protection Agency (EPA) drafted the Cross-State Air Pollution Rule (CSAPR) to limit the interstate transport of emissions of nitrogen oxides (NOx) and sulfur dioxide (SO2) to downwind states in non-attainment areas.
Opponents to CSAPR say it would increase the costs of power generation and harm the economy. Environmental groups say the rule protects public health.
On July 6, 2011, the U.S. Environmental Protection Agency (EPA) finalized the CSAPR — a rule designed to protect the health of U.S. citizens by helping states reduce air pollution and attain clean air standards. It requires 27 states to improve air quality significantly by reducing power plant emissions that contribute to ozone and/or fine particle pollution in other states.
The rule limits the interstate transport of nitrogen oxides (NOx) and sulfur dioxide (SO2) emissions to downwind states in nonattainment areas.
How This Developed
On May 12, 2005, the EPA put into effect the Clean Air Interstate Rule, or CAIR (70 FR 25162). The CAIR used a regional cap-and-trade approach to reduce sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions.
On July 11, 2008, the D.C. Circuit issued an opinion finding parts of the CAIR unlawful and vacating the rule. On December 23, 2008, the D.C. Circuit issued a decision on the petitions for rehearing of the July 11 decision. The court granted EPA's petition for rehearing to the extent that it remanded the cases without vacatur (making null and void) of the CAIR.
The CAIR remand meant that the CAIR remains in effect, but the EPA is obligated to promulgate another rule under Clean Air Act section 110(a)(2)(D) consistent with the Court's 2008 opinion.
CSAPR Replaces CAIR
On July 6, 2010, EPA proposed the "Transport Rule" to replace CAIR, and on July 6, 2011, the EPA signed a final rule with the renamed Cross-State Air Pollution Rule (CSAPR). The final CSAPR was published in the Federal Register on August 8, 2011 (76 FR 48208).
The EPA held three public hearings on the proposed rule during the 60-day comment period. The agency also issued three notices of data availability (NODA) to provide additional opportunities for public comment on data, modeling and the rule’s other key aspects.
CSAPR is designed to implement the Clean Air Act requirements in section 110(a)(2)(D) concerning interstate transport of air pollution, and to respond to the Court's concerns with the CAIR. In response to the court’s direction to replace CAIR as quickly as possible, the EPA is adopting federal implementation plans (FIP), for each of the states covered by CSAPR; states may replace the FIPs with State Implementation Plans (SIPs).
CSAPR took effect January 1, 2012; CAIR was implemented through the 2011 compliance periods, and now is replaced by the CSAPR.
Figure 1. CSAPR requires 23 states to reduce annual SO2 and NOX emissions.
By 2014, power plants in states common to both the CSAPR and CAIR will achieve about 1.8 million tons fewer SO2 emissions and 76,000 tons fewer NOX emissions annually than what would have been achieved when only CAIR was in effect.
Purpose of the CSAPR
CSAPR requires 23 states to reduce annual SO2 and NOX emissions (see Figure 1) to help downwind areas attain the 2006 24-Hour and/or 1997 Annual PM2.5 National Ambient Air Quality Standards (NAAQS). Twenty states are required to reduce ozone season NOx emissions to help downwind areas attain the 1997 8-Hour Ozone NAAQS.
The rule fully addresses all upwind states' transport obligations under the 1997 annual PM2.5 and 2006 24-hour PM2.5 standards. For 10 states, it also will fully address upwind state transport obligations under the 1997 ozone NAAQS.
The EPA continues to evaluate what, if any, additional emission reductions might be needed for the rest of the upwind states covered by the CSAPR ozone program.
How CSAPR Affects States
CSAPR divides the states required to reduce SO2 into two groups, and both must reduce their SO2 emissions beginning in 2012. The 16 states in Group 1 must make significant additional reductions in SO2 emissions by 2014 to eliminate their significant contribution to air quality problems in downwind areas; the caps in the seven states in Group 2 will remain the same (see Figure 2).
Figure 2. CSAPR divides the states required to reduce SO2 into two groups, and both must reduce their SO2 emissions beginning in 2012.
New SO2 and annual NOX trading programs took effect on January 1, 2012 and a new seasonal NOX trading program will begin on May 1, 2012. Affected states will be required to meet individual emission caps with a cumulative budget of 3.3 million tons of SO2 in 2012 and 2.1 million tons in 2014. The annual NOX budget is set at 1.25 million tons in 2012 and 1.16 million tons in 2014.
Companies subject to CSAPR can either buy credits to comply with the pollution caps or install pollution controls to reduce emissions and earn credits they can sell to other companies looking to buy credits instead of installing controls. No existing CAIR NOX or SO2 allowances can be used for compliance in the CSAPR trading programs.
The final rule differs from the proposal by removing Delaware, Connecticut, Massachusetts and the District of Columbia entirely. In the proposed rule, they all were included in the annual NOX and SO2 trading programs, and all but Massachusetts were in the seasonal NOX program.
The final rule also expands the scope to include annual NOX and SO2 trading programs in Texas. Florida and Louisiana will be in the ozone season NOX program only, and no longer face annual NOX and SO2 limits.
In a separate but related regulatory action, the EPA also issued a supplemental notice of proposed rulemaking (SNPR) to require six states — Iowa, Kansas, Michigan, Missouri, Oklahoma and Wisconsin — to make summertime NOX reductions under the CSAPR ozone-season control program. All but Oklahoma already are covered in the final rule for interstate fine particle pollution (PM 2.5).
With the inclusion of these states, 26 states would be required to reduce ozone-season NOX emissions to assist in attaining the 1997 8-Hour Ozone NAAQS. Finalizing this supplemental proposal would bring the total number of covered states under the CSAPR to 28.
The EPA finalized this rulemaking on August 8, 2011. Minor tweaks where added in September and sent out for comments, with the comment period ending November 30, 2011. The tweaks and comments were implemented by December 30, 2011 for the rule’s effective date of January 1, 2012.
How Credits Will Work
Another change from the proposal is that the EPA proposed allocating credits based on a facility's historic emissions.
In comments on the proposal, critics said this wrongly rewards heavy-polluting power plants with more trading allowances, and punishes those power plants that already switched to cleaner fuel such as natural gas or installed emissions controls in anticipation of tougher regulation.
In the final rule, the EPA opts for a heat-input approach, but says no plant can receive allocations in excess of its historic emissions over a long baseline period of 2000 to 2010.
What Good Will the CSAPR Do?
The final rule is expected to yield $120 to $280 billion in annual health and welfare benefits in 2014, which far outweigh the estimated annual costs of CSAPR of $800 million in 2014, along with the roughly $1.6 billion per year in capital investments already under way as a result of CAIR. By 2014, the required emissions reductions will annually avoid:
- 13,000 to 34,000 premature deaths.
- 15,000 nonfatal heart attacks.
- 19,000 hospital and emergency room visits.
- 1.8 million lost work days or school absences.
- 400,000 aggravated asthma attacks.
In addition, the CSAPR trading allowance values are expected to be at a level that will promote market trading and enhance plant upgrades with ROI.
For more information on the CSAPR, visit www.epa.gov/crossstaterule.
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