Businesses that have not previously been required to obtain air permits may be required to obtain such permits in the near future, thanks to the impending onset of climate change regulation. This follows, ultimately, from the United States Supreme Court's determination in April 2007 that greenhouse gases are "air pollutants" within the confines of the Clean Air Act, as well as certain subsequent determinations handed down by the U.S. Environmental Protection Agency.

Starting January 2, 2011, emissions of greenhouse gases (GHGs) from vehicles and "stationary sources" (manufacturing/industrial facilities, utilities, etc.) will be regulated. Car manufacturers have long been accustomed to emissions regulations, so while this new regulation establishes new standards with which they must comply (starting with model year 2012), it is not as though the new limits catapult them into the world of regulation for the first time. However, for certain manufacturers or other large emitters of GHGs, the new regulation may mark the first time they are subjected to air permit requirements.

The first phase of the regulations – January 2 through June 30, 2011 – likely will not subject any manufacturer to regulation for the first time based solely on GHG emissions. Specifically, for that six-month period, only an entity that undertakes a project that both increases net GHG emissions by at least 75,000 tons per year ("tpy", measured in "carbon-dioxide equivalents" or "CO2e") and increases non-GHG pollutants significantly will face GHG limitations when they seek an air permit (technically called a "Prevention of Significant Deterioration" permit, or "PSD" permit). Also during this time frame, any large source renewing its "Title V" permit (essentially, an overarching permit that encompasses all air requirements for a large source) must address GHG emissions exceeding 75,000 tpy during that permit renewal. That is, only projects that would otherwise trigger PSD or Title V requirements would incur GHG controls (at the 75,000 tpy CO2e threshold); thus, even without the GHG emissions, such projects would be subject to air regulation.

However, beginning July 1, 2011, GHG limitations will apply to new and existing sources with 100,000 tpy of CO2e, regardless of the quantity of any other air pollutant emissions. Specifically, a PSD permit will be required for a newly constructed source if it emits at least 100,000 tpy CO2e, and for an existing source that emits 100,000 tpy CO2e if it modifies its facility in a way that increases its GHG emissions by 75,000 tpy. Further, any source with potential CO2e emissions of 100,000 tpy or more would be subject to Title V permitting requirements; applications for such Title V permits are due July 1, 2012.

In its issuances, the U.S. EPA determined that at least through April 30, 2016, sources that emit less than 50,000 tpy CO2e or make modifications resulting in net GHG increases of less than 50,000 tpy CO2e will not be subject to PSD or Title V requirements for those GHG emissions. Beginning in 2011, however, U.S. EPA has committed to conducting a supplemental proceeding to determine if sources smaller than the 75,000 tpy CO2e (but presumably larger than the 50,000 tpy CO2e threshold) should be subject to GHG emissions restrictions. Any new sources encompassed by the supplemental rule would need to comply beginning July 1, 2013.

As of press time, the Ohio EPA had not yet finished its rules implementing these federal requirements. Ohio EPA issued draft rules in August 2010, with the goal of finalizing the necessary rules to allow state implementation by January 2, 2011.

Any industrial source that is planning construction – whether a new facility altogether or a modification to an existing facility – that will emit carbon dioxide and/or other GHGs should study these new control requirements closely, as well as future actions by the U.S. EPA (particularly as it targets smaller sources).

A Primer on Air and GHG Terminology

The "carbon dioxide equivalent" – or CO2e – unit of measurement takes into account the fact that the heat-trapping potential of the six GHGs targeted by the new regulations (carbon dioxide, methane, nitrous oxide, hydroflurocarbons, perflurocarbons and sulfur hexafluoride) varies. For example, by weight, methane is approximately 21 times more powerful than carbon dioxide at warming the atmosphere. Based on this, 1 ton of methane would equal 21 tons of CO2e.

A Prevention of Significant Deterioration or "PSD" permit is a permit issued as part of a program designed to ensure that construction projects do not result in air quality being deteriorated below a certain level. If a source must obtain a PSD permit, then it will be subject to "best available control technology" ("BACT") for the regulated pollutants at issue. BACT is determined on a case-by-case basis taking into account energy, environmental, and economic impacts and other costs, although – over time – "presumptive BACT" (i.e., typical BACT) is sometimes developed for specific pollutants or specific source types. For GHGs, it has not yet been established what BACT will look like.

A Title V Permit – so named because of the title of the Clean Air Act 1990 Amendments that establishes it – is often referred to simply as an operating permit, and is required of major sources. Title V programs are typically implemented by the states.

A major source for purposes of federal and state air regulation depends on the type of permit at stake. For Title V permits, generally, a stationary facility that emits 100 tons per year or more of any air pollutant is considered "major" (and thus requires a Title V permit). For PSD permitting, a source is "major" at 100 tpy if it is on a specified list of PSD categories; otherwise it is major at a 275 tpy threshold. What is so significant about the U.S. EPA's recent GHG actions is that EPA has significantly raised these threshold limits for GHG emissions to — depending on the phase of the rule and the type of permit — 75,000 tpy CO2e or 100,000 tpy CO2e.

A "state implementation plan" or "SIP" is the arsenal of rules and regulations that a state uses to implement federal regulations at the state level. It must receive federal approval. If a state does not have an adequate SIP in place (for example, it might not fully implement all necessary federal requirements), then a "federal implementation plan" ("FIP") – something of a one-size-fits-all plan – can be imposed on the state until a satisfactory SIP is in place.

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