Per a recent U.S. Supreme Court decision, the Environmental Protection Agency (EPA) will no longer require Prevention of Significant Deterioration (PSD) or Title V permits for large sources of greenhouse gas (GHG) emissions, Office of Air and Radiation head Janet McCabe told the agency’s 10 regional administrators in a July 24 memo. 

The memo outlines the agency’s next moves on the application of Clean Air Act permitting programs to GHGs following the U.S. Supreme Court’s pivotal June 23 decision.

Ruling in Utility Air Regulatory Group v. EPA, the divided high court concluded that the agency may not treat GHGs as a pollutant for purposes of defining a “major emitting facility” in the context of its PSD provisions, or as a “major source” in the Title V context. However, the court ruled that the agency could continue to require that PSD permits—otherwise required based on emissions of conventional pollutants—contain limits for GHG emissions based on the application of Best Available Control Technology (BACT).

The EPA expects “further court action to apply [to] the decision,” and it will likely take “other steps in the longer term,” the memo says. The Supreme Court is soon expected to send its final decision down to the D.C. Circuit, which then will issue an order to the EPA to revise or remand the contested rules.

But for now, the EPA will no longer require PSD or Title V permits for sources identified under Step 2 of the Tailoring Rule, the memo says.

These include sources that are only subject to the PSD program if GHGs are the only pollutant (and not for emissions “anyway” of any of the six conventional pollutants covered under national ambient air quality standards). It also applies to new sources that can emit at least 100,000 tons per year (tpy) carbon dioxide equivalent (CO2e) and existing sources that emit at that level or undertake modifications that increase emissions by at least 75,000 tpy CO2e and also emit at least 100 to 250 tpy of GHGs on a mass basis.

According to the EPA, Step 2 sources are responsible for nearly 70% of total national stationary source GHG emissions.

The EPA’s new direction means regional offices will have to confer with state and local permitting authorities and applicants to discuss how to handle pending permit applications.

It also means the agency will halt applying regulations that would require that states include in their EPA-approved PSD state implementation plans (SIPs) a requirement that Step 2 sources obtain PSD/Title V permits. Federal PSD and Title V rules will likely be revised, along with many SIPs and approved Title V programs, the agency says.

The Supreme Court’s decision allows the EPA to continue applying the PSD BACT requirement for GHG, as well as other pollutants, if new and modified “anyway” sources emit those pollutants at or above certain thresholds, the memo notes. To ensure compliance with the Clean Air Act, “the EPA intends to continue applying BACT to GHG at ‘anyway sources’ and processing PSD permit applications for ‘anyway sources’ using a 75,000 tpy CO2e threshold to determine whether a permit must include a BACT limitation for GHGs, pending further developments,” it adds.

And, while the court’s decision did not directly address the application of PSD and Title V permitting requirements to biogenic emissions from biomass plants, the EPA said work regarding the biogenic carbon dioxide assessment framework would continue. The agency noted that the D.C. Circuit in July 2013 overturned the EPA’s rule deferring application of those permitting programs by three years, and that the so-called “Deferral Rule” had expired on its own terms on July 21, 2014.

“Nonetheless, the EPA’s current view is that the Supreme Court’s decision effectively narrows the scope of the biogenic CO2 permitting issues that remain for the EPA to address. This is because, as described above, the EPA will no longer apply or enforce regulatory provisions requiring PSD or Title V permits for sources solely on the basis of their GHG emissions.”

Finally, the EPA says that following the Supreme Court’s decision it has ceased working on a five-year study as part of the Tailoring Rule to project administrative burdens that remain for small GHG-emitting sources. The EPA had sought to use that study to complete Step 4, which comprised GHG rulemaking for small sources by April 2016.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)