On May 13, 2010, the U.S. Environmental Protection Agency (EPA) issued a final rule to address air permitting of six greenhouse gases (GHGs) – carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF₆). This final rule “tailors” the Clean Air Act (CAA) permitting program to limit which facilities are required to obtain a Prevention of Significant Deterioration (PSD) and/or Title V operating permit. The EPA will phase in the Clean Air Act (CAA) permitting requirements in two initial steps. During Step 1 (January 2, 2011 – June 30, 2011), no sources are subject to CAA permitting requirements based solely on GHG emissions. However, sources currently classified as major for PSD or permitted under the Title V program that increase GHG emissions by 75,000 tons or more of carbon dioxide equivalent (CO₂e) will be subject to GHG emissions permitting by determining and implementing Best Available Control Technology (BACT). During Step 2 (July 1, 2011 – June 30, 2013), PSD permitting requirements will cover new construction projects that emit GHG emissions of at least 100,000 tons of CO₂e per year, even if they do not exceed permitting thresholds for any other criteria pollutants. Modifications at existing facilities increasing GHG emissions by at least 75,000 tons of CO₂e per year also will be subject to PSD permitting requirements. Facilities emitting at least 100,000 tons of CO₂e per year will be subject to Title V permitting. The EPA will not require permits for smaller sources until at least April 30, 2016.

Moving forward with GHG emissions, according to an EPA Fact Sheet, EPA will put the new thresholds into effect in state, local and tribal agency programs which run PSD and Title V operating programs under EPA approval. Those agencies will continue to have the option to seek EPA approval for lower thresholds if they are able to demonstrate they can adequately implement the PSD program at the lower thresholds. EPA intends to evaluate ways to streamline the process for identifying GHG emissions control requirements and issuing permits. This will reduce costs and increase efficiency for both sources and for state permitting agencies, which in most cases are responsible for issuing the permits. The EPA also must re-evaluate the final GHG emissions thresholds after an initial phase, during which PSD and Title V permitting authorities will gain experience in issuing permits to GHG sources. The EPA has identified specific source categories, the agency plans to develop sector- and source-specific guidance that would help permitting authorities and affected sources better understand GHG emissions for the selected source categories, methods for estimating those emissions, control strategies for GHG emissions and available GHG measurement and monitoring techniques.

It is estimated about 550 sources nationwide will need to obtain Title V permits for the first time due to their GHG emissions and approximately 900 additional PSD permitting actions will be triggered each year by GHG emission increases. In order to determine if this tailoring rule will affect your source, August Mack recommends determining your current baseline CO₂e emissions by conducting a GHG emission inventory.