[Federal Register Volume 76, Number 54 (Monday, March 21, 2011)]
[Proposed Rules]
[Pages 15249-15266]
[FR Doc No: 2011-6438]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51, 52, 70, and 71

[EPA-HQ-OAR-2011-0083; FRL-9283-8]
RIN 2060-AQ79

Deferral for CO2 Emissions From Bioenergy and Other Biogenic
Sources Under the Prevention of Significant Deterioration (PSD) and
Title V Programs: Proposed Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This action proposes to defer for a period of three (3) years
the application of the Prevention of Significant Deterioration (PSD)
and Title V permitting requirements to biogenic carbon dioxide
(CO2) emissions from bioenergy and other biogenic stationary
sources. This action is being taken as part of the process of granting
the Petition for Reconsideration filed by the National Alliance of
Forest Owners (NAFO) on August 3, 2010, related to the PSD and Title V
Greenhouse Gas Tailoring Rule.

DATES: Comments. Comments must be received on or before May 5, 2011.
    Public Hearing. EPA will hold one hearing on this action. The
hearing will

be conducted on April 5, 2011, in the Washington, DC area. The EPA will
provide further information about the hearing on its Web page: http://www.epa.gov/NSR/actions.html. To register to speak at the hearing,
please go to the Web page: http://www.epa.gov/NSR/actions.html or
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2011-0083 by one of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the
online instructions for submitting comments.
    E-mail<EMAIL_ADDRESS>Include docket ID No. EPA-HQ-OAR-2011-
0083 in the subject line of the message.
    Fax:<PHONE_NUMBER>.
    Mail: Environmental Protection Agency, EPA Docket Center (EPA/DC),
Mailcode 28221T, Attention Docket ID No. EPA-HQ-OAR-2011-0083, 1200
Pennsylvania Avenue, NW., Washington, DC 20460.
    Hand/Courier Delivery: EPA Docket Center, Public Reading Room, EPA
West Building, Room 3334, 1301 Constitution Avenue, NW., Washington, DC
20004. Phone:<PHONE_NUMBER>. Such deliveries are only accepted during
the Docket's normal hours of operation, and special arrangements should
be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2011-0083. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
confidential business information (CBI) or other information whose
disclosure is restricted by statute.
    Do not submit information that you consider to be CBI or otherwise
protected through http://www.regulations.gov or e-mail. Send or deliver
information identified as CBI to only the mail or hand/courier delivery
address listed above, attention: Docket ID No. EPA-HQ-OAR-2011-0083.
The http://www.regulations.gov Web site is an ``anonymous access''
system, which means EPA will not know your identity or contact
information unless you provide it in the body of your comment. If you
send an e-mail comment directly to EPA without going through http://www.regulations.gov your e-mail address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet. If you submit an electronic
comment, EPA recommends that you include your name and other contact
information in the body of your comment and with any disk or CD-ROM you
submit. If EPA cannot read your comment due to technical difficulties
and cannot contact you for clarification, EPA may not be able to
consider your comment. Electronic files should avoid the use of special
characters, any form of encryption, and be free of any defects or
viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the Air Docket, EPA/
DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC.
This Docket Facility is open from 8:30 a.m. to 4:30 p.m., Monday
through Friday, excluding Federal holidays. The telephone number for
the Public Reading Room is<PHONE_NUMBER>, and the telephone number for
the Air Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Carole Cook, Climate Change Division,
Office of Atmospheric Programs (MC-6207J), Environmental Protection
Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone
number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail address:
<EMAIL_ADDRESS>    Worldwide Web (WWW): In addition to being available in the docket,
an electronic copy of today's proposal, memoranda to the docket, and
all other related information will also be available through the WWW on
EPA's Web site at http://www.epa.gov/NSR/actions.html

SUPPLEMENTARY INFORMATION: Acronyms and Abbreviations. The following
acronyms and abbreviations are used in this document.

ANPR Advanced notice of proposed rulemaking
BACT Best Available Control Technology
BAU Business as Usual
CAA Clean Air Act
CAR U.S Climate Action Report
CBI Confidential Business Information
CFI Call for Information
CFR Code of Federal Regulations
CH4 methane
CO2 Carbon dioxide
CO2e Carbon dioxide equivalents
EO Executive Order
EPA U.S. Environmental Protection Agency
FR Federal Register
GHG Greenhouse gas
GWP Global warming potential
HFC Hydrofluorocarbon
ICR Information Collection Request
IPCC Intergovernmental Panel on Climate Change
LULUCF Land-Use, Land-Use Change and Forestry
MSW Municipal solid waste
N2O Nitrous oxide
NAFO National Alliance of Forest Owners
NAAQS National Ambient Air Quality Standards
NOX Nitrogen oxides
NSPS New Source Performance Standards
NSR New Source Review
NTTAA National Technology Transfer and Advancement Act of 1995
OMB Office of Management and Budget
PFC Perfluorocarbon
PSD Prevention of Significant Deterioration
PTE Potential to Emit
RFA Regulatory Flexibility Act
SMC Significant monitoring concentration
SF6 sulfur hexafluoride
SIL Significant impact level
SIP State implementation plan
SMC Significant monitoring concentration
Tg Teragram
tpy Tons per year
U.S. United States
UMRA Unfunded Mandates Reform Act
UNFCCC United Nations Framework Convention on Climate Change
USDA U.S. Department of Agriculture
WWW Worldwide Web

Table of Contents

I. General Information
    A. What is the purpose of this action?
    B. Does this action apply to me?
    C. What are biogenic CO2 emissions?
    D. What should I consider as I prepare my comments to EPA?
II. Relevant Background
    A. Carbon Source and Sink Dynamics
    B. PSD, Title V, and Tailoring Rule
    C. Complexity of Determining Net Atmospheric Impact of
CO2 Emissions and Incorporating This Information Into the
PSD and Title V Programs
    D. Designing and Implementing an Accounting Approach
III. Interim Deferral of Biogenic CO2 Emissions Under the
PSD and Title V Permitting Programs
    A. General Rationale and Legal Justification for the Interim
Deferral
    B. CO2 Emissions That Are Deferred
    C. Non-CO2 GHGs
    D. Mechanism for Deferral and State Implementation
    E. Requesting Comment
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism

    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Clean Air Act section 307

I. General Information

A. What is the purpose of this action?

    This action proposes to defer for a period of three (3) years the
consideration of CO2 emissions from bioenergy and other
biogenic sources (hereinafter referred to as ``biogenic CO2
emissions'') when determining whether a stationary source meets the
Prevention of Significant Deterioration (PSD) and Title V applicability
thresholds, including those for the application of Best Available
Control Technology (BACT). Stationary sources that combust biomass and
construct or modify during the deferral period will avoid the
application of PSD to the biogenic CO2 emissions resulting
from those actions. This deferral applies only to CO2
emissions and does not affect non-GHG pollutants or other greenhouse
gases (GHGs) (e.g., methane (CH4) and nitrous oxide
(N2O)) emitted from the combustion of biomass fuel. Also,
this does not affect any other EPA programs that pertain to stationary
sources, such as New Source Performance Standards (NSPS) or the GHG
Reporting Program.
    On January 12, 2011, EPA explained in letters to Members of
Congress and to the National Alliance of Forest Owners (NAFO), the
steps that the Agency intends to take to address the issues associated
with biogenic CO2 emissions from stationary sources.\1\
First, EPA granted a Petition for Reconsideration filed by the NAFO on
August 3, 2010, related to the PSD and Title V Greenhouse Gas Tailoring
Rule (75 FR 31514, June 3, 2010) (``Tailoring Rule''). Second, the
Agency is proposing this rule to defer for three years the application
of the PSD and Title V permitting requirements to biogenic
CO2 emissions from stationary sources. Third, concurrent
with this rulemaking, we are providing an interim guidance document
(discussed further in section III.D.3) to help permitting authorities
establish a basis for concluding that BACT for biogenic CO2
emissions at stationary sources is the combustion of biomass fuels by
itself. Fourth, EPA will be conducting a detailed examination of the
science associated with biogenic CO2 emissions from
stationary sources. This examination will include discussion with
partners and scientists both inside and outside the Federal government,
as well as engagement with an independent scientific panel, to consider
technical issues that the Agency must resolve in order to account for
biogenic CO2 emissions in ways that are scientifically sound
and also manageable in practice (discussed further in section II.C and
II.D). Finally, EPA intends to use the feedback from the scientific and
technical review to develop a rulemaking on how these emissions should
be treated and accounted for in PSD and Title V permitting.
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    \1\ See Docket EPA-HQ-OAR-2011-0083 for copies of the letters or
http://www.epa.gov/nsr/actions.html#jan11.
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B. Does this action apply to me?

    This action applies to stationary sources that emit biogenic
CO2.

                               Table 1--Examples of Affected Entities by Category
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                    Category                         NAICS              Examples of affected facilities
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Biomass combustion..............................          221  Electric utilities burning biomass fuels.
                                                          321  Wood products manufacturing, and wood pellet fuel
                                                                manufacturing.
                                                          322  Pulp and paper manufacturing.
Municipal solid waste combustion................       562213  Solid waste combustors and incinerators.
Sources/users of biogas.........................          112  Animal production manure management operations.
                                                       221320  Sewage treatment facilities.
                                                       562212  Solid waste landfills.
Fermentation processes..........................       325193  Ethanol manufacturing.
Other...........................................      311/312  Food/Beverage processors burning agricultural
                                                                biomass residues, using fermentation processes,
                                                                or producing/using biogas from anaerobic
                                                                digestion of waste materials.
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    Table 1 of this preamble lists the types of entities that
potentially could be affected by the deferral covered by this proposal.
This list is not intended to be exhaustive, but rather provides a guide
for readers regarding facilities likely to be affected by this action.
Note that this rule does not make or infer any policy determination on
the part of EPA as to whether, or what part of, emissions from any of
these sources may be determined ``fugitive'' emissions for the purposes
of accounting and applicability under air permitting requirements. Such
determinations are not within the scope of this rule and are part of
the case-by-case application and review process established under the
regulations covering these permitting requirements. If you have
questions regarding the applicability of this action to a particular
facility, consult the person listed in the FOR FURTHER INFORMATION
CONTACT section of this preamble.

C. What are biogenic CO2 emissions?

    Carbon dioxide emissions from bioenergy and other biogenic sources
(hereinafter referred to as ``biogenic CO2 emissions'') are
generated during the combustion or decomposition of biologically-based
material .\2\ In this action we are addressing only the CO2
emissions from biogenic sources, not emissions of other GHGs or non-GHG
pollutants. The term ``biogenic CO2 emissions'' is defined
here as emissions of CO2 from a stationary source directly
resulting from the combustion or decomposition of biologically-based
materials other than fossil fuels. Examples of ``biogenic
CO2 emissions'' include, but are not limited to:
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    \2\ Non-fossilized and biodegradable organic material
originating from plants, animals or micro-organisms (including
products, by-products, residues and waste from agriculture, forestry
and related industries as well as the non-fossilized and
biodegradable organic fractions of industrial and municipal wastes,
including gases and liquids recovered from the decomposition of non-
fossilized and biodegradable organic material).

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     CO2 generated from the biological decomposition
of waste in landfills, wastewater treatment or manure management
processes;
     CO2 from the combustion of biogas collected
from biological decomposition of waste in landfills, wastewater
treatment or manure management processes;
     CO2 from fermentation during ethanol
production;
     CO2 from combustion of the biological fraction
of municipal solid waste or biosolids;
     CO2 from combustion of the biological fraction
of tire-derived fuel; and
     CO2 derived from combustion of biological
material, including all types of wood and wood waste, forest residue,
and agricultural material.
    For stationary sources co-firing fossil fuel and biologically-based
fuel, and/or combusting mixed fuels (e.g., tire-derived fuels,
municipal solid waste (MSW), etc.), the biogenic CO2
emissions from that combustion are included in this deferral. However,
as stated above, the fossil CO2 emissions are not. Various
methods are available to calculate both the biogenic and fossil
portions of CO2 emissions, including those methods contained
in the GHG Reporting Program (40 CFR part 98). EPA is requesting
comment on whether this deferral should specify that stationary sources
subject to the PSD and Title V programs use a specific method(s) for
determining their biogenic CO2 emissions. EPA also seeks
comment on other ways to ensure there is an accurate estimate of how
much biogenic CO2 is subject to the deferral for a specific
facility, particularly when combusting mixed fuels.

D. What should I consider as I prepare my comments to EPA?

1. Submitting CBI
    Clearly mark the part or all of the information that you claim to
be CBI. For CBI information in a disk or CD ROM that you mail to EPA,
mark the outside of the disk or CD ROM as CBI and then identify
electronically within the disk or CD ROM the specific information that
is claimed as CBI. In addition to one complete version of the comment
that includes information claimed as CBI, a copy of the comment that
does not contain the information claimed as CBI must be submitted for
inclusion in the public docket. Information marked as CBI will not be
disclosed except in accordance with procedures set forth in 40 CFR part
2.
    Do not submit information that you consider to be CBI or otherwise
protected through http://www.regulations.gov or e-mail. Send or deliver
information identified as CBI to only the mail or hand/courier delivery
address listed above, attention: Docket ID No. EPA-HQ-OAR-2011-0083.
    If you have any questions about CBI or the procedures for claiming
CBI, please consult the person identified in the FOR FURTHER
INFORMATION CONTACT section.
2. Tips for Preparing Your Comments
    When submitting comments, remember to:
    Identify the rulemaking by docket number and other identifying
information (e.g., subject heading, Federal Register date and page
number).
    Follow directions. EPA may ask you to respond to specific questions
or organize comments by referencing a CFR part or section number.
    Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    Describe any assumptions and provide any technical information and/
or data that you used.
    If you estimate potential costs or burdens, explain how you arrived
at your estimate in sufficient detail to allow for it to be reproduced.
    Provide specific examples to illustrate your concerns and suggest
alternatives.
    Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    Make sure to submit your information and comments by the comment
period deadline identified in the preceding section titled DATES. To
ensure proper receipt by EPA, be sure to identify the docket ID number
assigned to this action in the subject line on the first page of your
response. You may also provide the name, date, and Federal Register
citation.
    To expedite review of your comments by Agency staff, you are
encouraged to send a separate copy of your comments, in addition to the
copy you submit to the official docket, to Carole Cook, U.S. EPA,
Office of Atmospheric Programs, Climate Change Division, Mail Code
6207-J, Washington, DC, 20460, telephone<PHONE_NUMBER>, e-mail
<EMAIL_ADDRESS>You are also encouraged to send a separate copy of
your CBI information to Carole Cook at the provided mailing address in
the FOR FURTHER INFORMATION CONTACT section. Please do not send CBI
information to the electronic docket or by e-mail.

II. Relevant Background

    The purpose of this section is to provide relevant background on
this action. Section II.A provides basic information on biogenic
CO2 emissions including the relevant information concerning
carbon source and sink dynamics and how biogenic CO2
emissions are accounted for in the Inventory of U.S. Greenhouse Gas
Emissions and Sinks (Inventory).\3\ While we are presenting this
information for context, as explained in that section and in later
parts of this preamble, the Inventory is an annual report that tracks
US GHG emissions and sinks at the national scale. The Inventory is not
intended to quantify the net atmospheric impacts of a particular type
of fuel from a stationary source over a specified time period that
extends into the future.
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    \3\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks:
1990-2008,.'' U.S. Environmental Protection Agency, EPA 430-R-10-
006, (April 15, 2010). http://www.epa.gov/climatechange/emissions/usinventoryreport.html. (incorporated by reference into Docket EPA-
HQ-OAR-2011-0083)
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    Section II.B identifies general information concerning the PSD and
Title V permitting programs and the steps EPA undertook in the GHG PSD
and Title V Tailoring Rule to implement the requirements of those
permitting programs in a common sense manner, given congressional
intent and the overwhelming administrative burden that would otherwise
have resulted if EPA were to apply the permitting programs to GHG at
the statutory PSD and Title V thresholds. The relevant history and
information concerning EPA's treatment of biomass under the Tailoring
Rule and in subsequent GHG permitting guidance and other actions is
also addressed.
    Section II.C sets forth the complexities associated with
determining the net atmospheric impact of biogenic CO2
emissions and factors to consider to ensure the determinations are
sound from a practical, predictable and scientific basis when
accounting for these emissions in the PSD and Title V Programs.
    Section II.D discusses information that is lacking and needed for
EPA to determine how to account for the net atmospheric impact of
CO2 emissions from various types of feedstocks and
facilities.

A. Carbon Source and Sink Dynamics

1. Cycling of CO2 Between Plants and the Atmosphere
    Through relatively rapid photosynthesis, plants absorb
CO2 from the atmosphere and add it to their biomass, which
contains roughly 50% carbon by weight, through a process called
sequestration. Some of the carbon absorbed by plants may eventually be

transferred from dead organic matter to the soil where it can remain
for long periods of time. Plant biomass, dead organic matter, and soil
carbon are ``pools'' that together make up the carbon stock on a given
area of land. Carbon can cycle fairly rapidly back to the atmosphere or
it can remain stored on land. Stored carbon can be released naturally
back into the atmosphere as CO2 through decomposition or
plant respiration.
    When biological material such as plant biomass is harvested or
cleared from the land, burned for energy, used as an input to an
industrial process, or biodegraded as part of waste treatment
processes, the material acts as a source of carbon, releasing its
stored carbon back into the atmosphere as CO2. Over large
spatial scales such as States, regions, or continents, if more carbon
is sequestered in plant biomass than is emitted to the atmosphere
through processes such as harvest, fire, or natural decomposition,
plant biomass acts as a net sink for carbon. Conversely, if more carbon
is released than is sequestered, plant biomass acts as a net source for
carbon. Soils can also be net sources or sinks depending on the balance
of carbon added from biomass and lost through disturbances such as
tillage or deforestation.
2. Treatment of Biogenic CO2 Emissions in the U.S. GHG
Inventory
    National-level GHG inventories are a common starting point for
quantification of the source and sink status for particular land areas.
The Inventory tracks annual GHG emissions including emissions of
CO2, CH4, N2O, hydrofluorocarbons
(HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride
(SF6). The United States (U.S.) has submitted the Inventory
to the Secretariat of the United Nations Framework Convention on
Climate Change (UNFCCC) under its obligation as a Party to the
Convention every year since 1993. The UNFCCC, ratified by the U.S. in
1992, defines the overall framework for intergovernmental efforts to
tackle the challenge posed by climate change. The Inventory submitted
by the U.S. is consistent with national inventory data submitted by
other UNFCCC Parties, and uses internationally accepted methodologies
established by the Intergovernmental Panel on Climate Change (IPCC).
    The Revised 1996 IPCC Guidelines (IPCC Guidelines) \4\ provide
methodologies for estimating all anthropogenic sources and sinks of GHG
emissions at the national scale, classified into six broad sectors:
Energy, Industrial Processes, Solvents and Other Product Uses,
Agriculture, Land-Use Change and Forestry (LUCF), and Waste.
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    \4\ ``Revised 1996 IPCC Guidelines for National Greenhouse Gas
Inventories,'' Intergovernmental Panel on Climate Change (IPCC),
Prepared by the National Greenhouse Gas Inventories Programme.
(1996.). http://www.ipcc-nggip.iges.or.jp/public/gl/invs1.html.
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    The Energy Sector includes all GHGs emitted during the production,
transformation, handling and consumption of energy commodities,
including fuel combustion. The LULUCF Sector includes emissions and
sequestration resulting from human activities that influence the way
land is used or that affect the size of carbon stocks on land.
According to the IPCC Guidelines, CO2 emissions from biomass
combustion:

should not be included in national CO2 emissions from
fuel combustion. If energy use, or any other factor, is causing a
long term decline in the total carbon embodied in standing biomass
(e.g. forests), this net release of carbon should be evident in the
calculation of CO2 emissions described in the Land Use
Change and Forestry chapter.\5\

    \5\ ``Revised 1996 IPCC Guidelines for National Greenhouse Gas
Inventories,'' Intergovernmental Panel on Climate Change (IPCC),
Prepared by the National Greenhouse Gas Inventories Programme
(1996). http://www.ipcc-nggip.iges.or.jp/public/gl/invs1.html.
Reference Manual (Vol. 3), Page 1.10.

    Thus, at the national level, these CO2 emissions are not
included in the estimate of emissions from a country's Energy Sector,
even though the emissions physically occur at the time and place in
which useful energy is being generated (i.e., at a power plant or other
stationary source). The purpose of this accounting convention is to
avoid double-counting of CO2 emissions from the Energy
Sector and LULUCF Sector that would provide a misleading
characterization of a country's contribution to global GHG. Carbon
dioxide emissions from a subset of bioenergy sources are reported as
information items in the Energy Sector of the Inventory, but are not
included in national fuel-combustion totals to avoid this double-
counting at the national scale.\6\
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    \6\ The Energy Sector of the Inventory does include emissions of
CH4 and N2O from the combustion of biomass for
energy. These emissions are included in this sector because their
magnitude is dependent on the specific way in which the fuel is
burned (i.e., combustion technology and operating conditions), which
cannot be known by analyzing the changes in the amount of carbon in
standing biomass.
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    The Inventory is a comprehensive report of emissions and sinks at
the national scale. All biogenic CO2 emissions, as defined
in this deferral, are also included in the Inventory. However, because
the Inventory is organized by broad sector, not by facility type, this
deferral covers biogenic CO2 emissions that may be reported
in any sector of the Inventory.
3. Accounting for Carbon Stocks on Land in the U.S. GHG Inventory
    The LULUCF Sector includes all of the land-based source categories
of GHG emissions and sinks. In the Inventory, EPA's estimate of
emissions and sinks from U.S. land areas is divided into forest land,
crop land, grassland, wetlands, settlements, and other land. The
largest stocks of carbon are found on forestlands.
    Data from the U.S. Department of Agriculture (USDA) Forest Service
Forest Inventory and Analysis Program are used to develop national-
scale estimates of forest carbon stocks and carbon stock change. The
methodology relies on annual or periodic surveys to assess changes in
carbon stocks over the entire forest land base. The overall change in
land-based forest carbon stocks from year to year represents the net
carbon balance between atmosphere and forest land. Importantly, this
measurement of the net change in forest carbon stocks integrates and
inherently includes all of the factors that might influence forest
carbon stocks, such as insect outbreaks, wildfire, prescribed fire, all
types of harvest (including harvest for bioenergy uses), forest
management, enhanced growth, and land use change. As noted earlier,
when trees are harvested and combusted to generate bioenergy, the
CO2 combustion emissions do not occur in the forest but
rather in a power plant or industrial facility. Following the
convention established by the IPCC in the Guidelines, EPA counts these
emissions as part of the LULUCF sector for the official US Inventory.
    In assessing CO2 emissions from the LULUCF Sector, EPA
looks to the net change in carbon stocks. Over the time period of
interest, if the net change in forest carbon stocks is positive, then
more carbon was sequestered on land in carbon pools (such as those
described in section II.A.1) than was lost to the atmosphere (through
all of the processes previously described, such as decomposition, fire,
and harvest). In this case the land is acting as a net carbon sink. If
the net change in land-based carbon stocks is negative, over the time
period of interest more carbon was emitted to the atmosphere than was
sequestered on land, and the forest was a net source for carbon.
    Averaged over the years 1990-2008, data from the Inventory show
that the LULUCF sector in the U.S. has been a net sink of roughly 815
teragrams (Tg)

carbon dioxide equivalent (CO2e) per year.\7\ This sink is
about 12% of the average gross emissions from all other sources
combined in the U.S. over the same time period.\8\ Future national
projections under business as usual (BAU), as reported in the Fifth U.S
Climate Action Report (CAR) submitted to the UNFCCC in 2010, suggest
that this LULUCF sink is likely to continue, if not increase in size,
at least until 2020.\9\
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    \7\ 84% of this amount is from carbon stock change in the forest
source categories; the remainder comes from source categories such
as Sequestration in Urban Trees and carbon stock changes in mineral
soils on crop land and grassland. U.S. EPA, ``Inventory of U.S.
Greenhouse Gas Emissions and Sinks: 1990-2008'' (See data archived
at http://www.epa.gov/climatechange/emissions/downloads10/2010-Inventory-Chapter-Tables.zip). See also Tables 1 and 2, LULUCF
sector C storage.pdf.
    \8\ See U.S. EPA, ``Inventory of U.S. Greenhouse Gas Emissions
and Sinks: 1990-2008.,'' Table ES-4.
    \9\ U.S. Dept. of State, U.S. Climate Action Report 2010., at
81. http://www.state.gov/documents/organization/140636.pdf.
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    In 2010, for the first time since EPA began tracking emissions and
sinks, the Inventory included estimates of forest carbon stocks and
stock change at the State level. Forestlands in seven (7) U.S. States
(AZ, CT, ID, LA, MI, ND, and VT) were net sources of carbon averaged
over the time period from 2000 to 2008. In one State (AK) the
forestland was neither a source nor a sink.\10\ Forestlands in all
other States were net sinks for carbon over that time period.
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    \10\ U.S. EPA., ``Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990-2008.,'' Annex 3.12 (Table A-210). http://www.epa.gov/climatechange/emissions/downloads10/US-GHG-Inventory-2010-Annex-3-Addtl-Source-Sink-Categories.pdf.
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    The IPCC Guidelines, as utilized in the Inventory, seek to estimate
net changes in carbon stocks on land for a given period of time that
occurred in the past. However, neither the IPCC Guidelines nor the
Inventory were designed to quantify the net atmospheric impacts of a
particular type of fuel from a stationary source over a specified time
period, that extends into the future.
4. Distinction Between Biogenic and Fossil CO2 Carbon
Reservoirs, and Between Biogenic CO2 and Non-GHG Pollutants
    Once CO2 is emitted to the atmosphere, it is not
possible to distinguish between the radiative forcing associated with a
molecule of CO2 originating from a biogenic source and one
originating from the combustion of fossil fuel. Biogenic CO2
differs qualitatively from fossil CO2 in that there is a
significant difference between fossil carbon and biogenic carbon in the
length of time required to replenish the reservoirs where the carbon is
stored. For example, many coal deposits in North America originated
during the Carboniferous Period, hundreds of millions of years ago. In
contrast, the reservoirs of carbon found on the surface of Earth, in
pools such as tree biomass and cropland soils, have accumulated over
decades, not millennia. Because these land-based biomass carbon stocks
can be replenished more quickly than fossil carbon stocks, these
biogenic carbon stocks can act as a sink on a far shorter time scale
than fossil carbon.
    Another way in which biogenic CO2 differs from fossil
CO2, as well as from other regulated pollutants, is the
sometimes ambiguous line between the net emissions caused by human
activities and those that occur as part of the natural background
emission fluxes. There are both natural biogenic CO2
emissions and anthropogenic biogenic CO2 emissions. For
example, fires, decomposition, and plant respiration all result in
substantial biogenic emissions of CO2. These transfers of
CO2 between land and atmosphere are critical to the
maintenance of life on Earth. However, human activities, such as forest
and land management practices (i.e., anthropogenic biogenic
CO2 emissions), can also influence the release of
CO2 from natural systems. There are challenges in
categorizing the biogenic CO2 emissions that would have
occurred naturally and those attributable to human activity. While the
Inventory accounts for all anthropogenic biogenic CO2
emissions at the national level, this deferral and the Agency's intent
to collaborate with Federal partners and the scientific community to
conduct a detailed examination of the science associated with biogenic
CO2 emissions and technical issues in accounting for those
emissions at stationary sources is our effort to better characterize
these distinctions and the associated impacts.

B. PSD, Title V, and Tailoring Rule

    Central to today's action are the PSD and Title V programs and
their applicability requirements. This section provides background
information on those programs as relevant for today's action.
1. The PSD Program
    The PSD program is a preconstruction review and permitting program
applicable to ``new major stationary sources'' and ``major
modifications'' at existing major stationary sources, in the
terminology of EPA's implementing regulations. The PSD program applies
in areas meeting the health-based National Ambient Air Quality
Standards (NAAQS) or for which there is insufficient information to
determine whether the area meets the NAAQS. The applicability of the
PSD program to a particular source is determined in advance of
construction or modification. The primary criterion in determining PSD
applicability is whether the proposed project is sufficiently large (in
terms of its emissions) to be a major stationary source or major
modification.
    Under the Clean Air Act (CAA), the PSD program applies to any
``major emitting facility'' that undertakes construction, and such
facility is defined to include ``any * * * stationary sources of air
pollutants which emit, or have the potential to emit, one hundred [or,
depending on the source category] two hundred and fifty tons per year
or more of any air pollutant.'' CAA sections 165(a), 169(1). In this
notice, we refer to these levels as the 100/250-tpy thresholds. In
addition, Congress also applied PSD to any existing major emitting
facility that undertakes a ``modification,'' and defined that term to
include ``any physical change in, or change in the method of operation
of, a stationary source which increases the amount of any air pollutant
emitted by such source or which results in the emission of any air
pollutant not previously emitted.'' CAA sections 165(a), 169(2)(C),
111(a)(4).
    The EPA has included these CAA requirements in its long-standing
regulations that implement PSD, although the Agency has interpreted
these requirements so that they apply only with respect to air
pollutants that are subject to regulation under the CAA. Specifically,
under EPA's regulations, a ``major stationary source'' is any source
type belonging to a specified list of 28 source categories which emits
or has a potential to emit (PTE) 100 tpy or more of any pollutant
subject to regulation under the CAA, or a source of any other type
which emits or has the potential to emit such pollutants in amounts
equal to or greater than 250 tpy. See, e.g., 40 CFR 52.21(b)(1). A new
source with a PTE at or above the applicable ``major stationary source
threshold'' amount is subject to PSD.
    The regulations also say that PSD applies to, not only new
construction, but also to existing sources that undertake a ``major
modification,'' which is defined in terms of the following three
criteria:

    (1) A physical change in, or change in the method of operation
of, a ``major stationary source'' must occur;
    (2) The change must result in an increase in emissions that is
``significant,'' that is,

equal to or above the significance level defined for the pollutant
in question, e.g., in 40 CFR 52.21(b)(23); and
    (3) The increase in emissions resulting from the change must be
a significant net emissions increase.

The level of emissions that is significant (also called the
``significance levels'' or the ``significant emissions rate'') is also
defined in regulations. See, e.g. 40 CFR 52.21(b)(23). Generally,
significance levels for PSD are pollutant specific emissions rates. For
example, the significance level for emissions of nitrogen oxides
(NOX) is 40 tpy. See, e.g., 40 CFR 52.21(b)(23)(i). Under
the regulations, the increase in emissions that results from the
modification project is added to other contemporaneous increases and
decreases in actual emissions at the source, to determine if the net
emissions increase is significant (equal to or above the significance
level). 40 CFR 52.21(b)(23) and (b)(48).
    Under the PSD program, one of the principal substantive
requirements is that a new major source or major modification must meet
an emissions limitation based on application of Best Available Control
Technology (BACT). This emissions limitation must be based on the
maximum amount of pollutant reduction that is achievable for each
individual source on a case-by-case basis, taking into account cost and
other factors. BACT applies to each ``regulated NSR pollutant.'' While
PSD applies if a source is determined to be ``major'' for any regulated
pollutant, the BACT review for such a source must be performed for each
regulated NSR pollutant whose emissions exceed or increase by more than
its PSD significance level (excluding pollutants for which the area has
been designated nonattainment). See 40 CFR 52.21(a)(2), (j)(2) and (3)
and 40 CFR 52.21(b)(23).
    To identify the pollutants covered by the PSD program, EPA
regulations define the term ``regulated NSR pollutant.'' This
definition applies to determine both the pollutants subject to the BACT
requirement and pollutants that are counted to determine whether a
source is a major source required to obtain a PSD permit. The term
``regulated NSR pollutant'' is incorporated into the definition of BACT
and definitions of ``major stationary source'' and ``major
modification.'' 40 CFR 52.21(b)(12); 40 CFR 52.21(b)(1)-(2). A
``regulated NSR pollutant'' includes any pollutant for which a national
ambient air quality standard has been promulgated and any pollutant
identified under this 40 CFR (b)(50)(i) as a constituent or precursor
for such pollutant; any pollutant that is subject to any standard
promulgated under section 111 of the Act; any Class I or II substance
subject to a standard promulgated under or established by title VI of
the Act; any pollutant that otherwise is subject to regulation under
the Act; except that any or all hazardous air pollutants either listed
in section 112 of the Act or added to the list pursuant to section
112(b)(2) of the Act, which have not been delisted pursuant to section
112(b)(3) of the Act, are not regulated NSR pollutants unless the
listed hazardous air pollutant is also regulated as a constituent or
precursor of a general pollutant listed under section 108 of the Act.
2. Title V
    The Title V permit program establishes operating permit
requirements that are intended to assure sources' compliance with
applicable CAA requirements. Title V generally does not add new
pollution control requirements, but it does require that each source
subject to Title V obtain an operating permit that assures compliance
with all pollution control requirements or ``applicable requirements''
required by the CAA (e.g., NSPS, and State implementation plan (SIP)
requirements, including PSD), and it requires that certain procedural
requirements be followed, especially with respect to compliance with
these requirements. ``Applicable requirements'' for Title V purposes
include stationary source requirements, but do not include mobile
source requirements. Other procedural requirements include providing
review of permits by EPA, States, and the public, and requiring permit
holders to track, report, and annually certify their compliance status
with respect to their permit requirements.
    The CAA applies Title V, through the definition of ``major
source,'' to ``any stationary facility or source of air pollutants
which directly emits, or has the potential to emit, one hundred tons
per year or more of any air pollutant.'' CAA sections 502(a),
501(2)(B), 302(j). EPA codified in the Tailoring Rule its long-
established interpretation that this definition applies only with
respect to air pollutants that are subject to regulation under the
CAA.\11\
---------------------------------------------------------------------------

    \11\ Memorandum from Lydia N. Wegman, Deputy Director, Office of
Air Quality Planning and Standards, U.S. EPA, ``Definition of
Regulated Air Pollutant for Purposes of Title V'' (April 26, 1993).
---------------------------------------------------------------------------

3. Tailoring Rule
a. Rationale and Requirements
    In the Tailoring Rule, EPA recognized that if the applicability
provisions of the PSD and Title V programs were applied literally so
that PSD and Title V requirements applied to GHG-emitting sources at
the 100/250 tpy levels provided in the CAA, then the permitting
authorities would be overwhelmed by the large numbers of permittees and
many small sources would be unduly encumbered by the permitting
demands. In light of those impacts, EPA concluded that, as a legal
matter, Congress did not intend that the PSD and Title V applicability
requirements be applied literally to all sources emitting GHGs over the
major source thresholds as of January 2, 2011--the date by which EPA
determined that GHGs become subject to regulation under the CAA due to
the motor vehicle rule. Instead, EPA concluded that it is authorized to
tailor those applicability requirements to apply PSD and Title V to
such sources in a phased-in manner, starting with the largest sources
first.
    Specifically, in the Tailoring Rule, EPA has implemented these PSD
and Title V applicability provisions by applying the familiar Chevron
\12\ two-step framework for interpreting administrative statutes,
taking into account certain legal doctrines. Those doctrines, insofar
as relevant to the Tailoring Rule, are (1) the ``absurd results''
doctrine, which authorizes agencies to apply statutory requirements
differently than a literal reading would indicate, as necessary to
effectuate congressional intent and avoid absurd results; and (2) the
``administrative necessity'' doctrine, which authorizes agencies to
apply statutory requirements in a way that avoids impossible
administrative burdens.\13\
---------------------------------------------------------------------------

    \12\ Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984).
    \13\ In the Tailoring Rule, EPA also considered a third
doctrine, the ``one-step-at-a-time'' doctrine, which authorizes
agencies to implement statutory requirements a step at a time. This
doctrine is not relevant to the present rulemaking.
---------------------------------------------------------------------------

    Under Chevron, the agency must, at step 1, determine whether
Congress's intent as to the specific matter at issue is clear, and, if
so, the agency must give effect to that intent.\14\ If congressional
intent is not clear, then, at step 2, the agency has discretion to
fashion an interpretation that is a reasonable construction of the
statute.
---------------------------------------------------------------------------

    \14\ Chevron, 467 U.S. at 842-43.
---------------------------------------------------------------------------

    To determine congressional intent, the agency must first consider
the words of the statutory requirements, and if their literal meaning
answers the question at hand, then, in most cases, the agency must
implement those requirements by their terms. However, under the
``absurd results'' doctrine, the

literal meaning of statutory requirements should not be considered to
indicate congressional intent if that literal meaning would produce a
result that is senseless or that is otherwise inconsistent with--and
especially one that undermines--underlying congressional purpose. In
these cases, if congressional intent for how the requirements apply to
the question at hand is clear, the agency should implement the
statutory requirements not in accordance with their literal meaning,
but rather in a manner that most closely effectuates congressional
intent. If congressional intent is not clear, then an agency may select
an interpretation that is reasonable under the statute.
    Under the ``administrative necessity'' doctrine, Congress is
presumed, at Chevron step 1, to intend that its statutory directives to
agencies be administrable, and not to have intended to have written
statutory requirements that are impossible to administer. Therefore,
under this doctrine, an agency may depart from statutory requirements
that, by their terms, are impossible to administer, but the agency may
depart no more than necessary to render the requirements administrable.
    In the Tailoring Rule, EPA closely considered the burdens to the
permitting authorities of applying PSD and Title V to GHG-emitting
sources. For example, EPA calculated, on a national basis, the workload
that GHG permit applications would entail, and compared that to the
existing workload of permitting authorities. EPA concluded that
permitting authorities would be overwhelmed by permit applications if
the PSD and Title V applicability thresholds were applied literally as
of January 2, 2011 to the GHG emissions from stationary sources. In
addition, EPA calculated the cost to the sources of permitting
requirements and concluded that many small sources would become subject
to unduly high expenses.
    Accordingly, in applying the Chevron analytical framework, in
conjunction with the absurd results and administrative necessity
doctrines, EPA concluded that Congress intended that PSD and Title V
apply to the GHG-emissions from stationary sources, but that, in light
of the burdens to the permitting authority and the costs to the sources
of determining applicability of permitting requirements by applying the
statutory thresholds to GHG emissions, the application of the
permitting programs should be phased in, starting with the largest
sources of GHG emissions first. EPA also concluded that the calculation
of the amount of GHG emissions should be based on the amount of GHG
pollutant emitted in tons per year, weighted by the global warming
potential (GWP) of the particular GHG pollutant, normalized to the GWP
of one ton of CO2 over a 100-year period, which is called
carbon dioxide equivalent (CO2e).
    Accordingly, in the Tailoring Rule, EPA established two steps to
implement PSD and Title V, with Tailoring Rule Step 1 beginning on
January 2, 2011. Step 1 applies to sources subject to PSD or Title V
anyway due to emissions of pollutants other than GHGs (called
``anyway'' sources) and, as to PSD, to sources that emit 75,000 tpy
CO2e (or increase emissions by that amount for
modifications). Tailoring Rule Step 2, beginning on July 1, 2011, will
apply to the largest GHG-emitting sources. Sources not otherwise
subject to Title V will become subject to it as of July 1, 2011 if they
emit or have the potential to emit at least 100,000 tpy CO2e. Sources
that would not otherwise trigger PSD will trigger PSD on or after July
1, 2011 if they have emissions at the 100,000 tpy CO2e level
and higher or emit at that level and modify to increase emissions by
75,000 tpy CO2e or more. In addition, EPA committed to
promulgate by July 1, 2012 another rulemaking--in effect, Step 3 of the
Tailoring Rule--that would consider whether to reduce the thresholds
further. EPA also committed to promulgate another rulemaking after
that, by April 1, 2016, that would consider still further action. As
EPA stated in the Tailoring Rule, part of the purpose of the phase-in
approach embodied in the Tailoring Rule is to allow permitting
authorities time to acquire additional resources and to allow EPA time
to develop streamlining methods and thereby enable the application of
PSD and Title V to more sources in subsequent rulemakings.
b. Biomass
    As noted previously, in the Tailoring Rule, EPA determined that the
amount of each GHG emitted by a facility should be calculated by
reference to the weight of the GHG emissions, in tons of
CO2e per year. The Tailoring Rule proposal referenced EPA's
Inventory submitted annually to the UNFCCC, for the applicable GWP
values and guidance on how to calculate a source's GHG emissions in tpy
CO2e.\15\ 75 FR 31514-31608. The Inventory includes
emissions of the six GHGs in terms of CO2e units. By linking
the calculation of CO2e for GHGs to GWP values, a facility
could evaluate its total GHG emissions contribution based on a single
metric. We solicited comment on the benefits and limitations of this
proposed metric.
---------------------------------------------------------------------------

    \15\ U.S. EPA, ``Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990-2007,'' at ES-3 (See also the SAR GWPs (IPCC 1996) in
table 1-2, p. 1-6. http://www.epa.gov/climatechange/emissions/usinventoryreport.html.
---------------------------------------------------------------------------

    While we referred to the Inventory for GWP identification purposes
only, several commenters appeared to misunderstand our intent, claiming
that the Inventory excludes CO2 emitted from biomass. These
commenters requested that, in calculations of emissions for determining
applicability of PSD and Title V, EPA exempt emissions from biogenic
activities or biomass combustion or oxidation activities, including
solid waste landfills, waste-to-energy projects, fermentation
processes, combustion of renewable fuels, ethanol manufacturing,
biodiesel production, and other alternative energy production that uses
biomass feedstocks (e.g., crops or trees). In particular, these
commenters urged that EPA exclude emissions from biomass combustion in
determining the applicability of PSD to such sources based on the
notion that such combustion is ``carbon neutral'' (i.e., that
combustion or oxidation of such materials would cause no net increase
in GHG emissions on a lifecycle basis).
    In response, when finalizing the Tailoring Rule, we acknowledged
the role that biomass or biogenic fuels and feedstocks could play in
reducing anthropogenic GHG emissions, and did not dispute the
commenters' observations that many State, Federal, and international
rules and policies treat biogenic and fossil sources of CO2
emissions differently. 75 FR 31514. Regarding commenters' claims that
the Inventory excludes CO2 emissions from biomass, the
Inventory does not exclude these emissions (see section II.A.2).
Rather, they are included in the LULUCF Sector rather than the Energy
Sector to avoid double-counting at the national scale. The narrow
reference to the use of the Inventory's GWP values for estimating GHG
emissions was provided to offer consistent guidance on how to calculate
these emissions and not as an indication, direct or implied, that
biomass emissions would be excluded from permitting applicability
merely by association with the national inventory, see 74 FR 55351,
under the definition for ``carbon dioxide equivalent.'' We determined
that our application of the ``absurd results,'' ``administrative
necessity,'' and one-step-at-a-time legal rationales supporting the
Tailoring Rule, based on the expected overwhelming permitting burdens
in its absence, did not provide sufficient basis to exclude emissions
of

CO2 from biogenic sources in determining permitting
applicability provisions at that time. We reasoned that such an
exclusion alone, while reducing burdens for some sources, would not
address the overwhelming permitting burdens, and a threshold-based
approach would still be needed. At that time, we had not examined
burdens with respect to specific source categories impacted by the rule
and thus had not analyzed the administrative burden of permitting
projects that specifically involve biogenic CO2 emissions
taking account of the threshold-based approach. Commenters also did not
provide information to demonstrate that an overwhelming permitting
burden would still exist, justifying a temporary exclusion for biomass
sources.
    In the final Tailoring Rule we indicated that the decision not to
provide this type of an exclusion at that time did not foreclose EPA's
ability to either (1) provide this type of exclusion at a later time
with additional information about overwhelming permitting burdens due
to biomass sources, or (2) provide another type of exclusion or other
treatment based on some other rationale. Although we did not take a
final position, we noted that some commenters' observations about a
different treatment of biomass combustion warranted further exploration
as a possible rationale.
    Therefore, although we did not establish a permanent exclusion from
PSD or Title V applicability based on specific characteristics of
biogenic CO2, we indicated our intent to seek further
comment on how we might address emissions of biogenic CO2
under the PSD and Title V programs through a future action.
    We further noted that, while not promulgating an applicability
exclusion for biogenic emissions and biomass fuels or feedstocks in the
final Tailoring Rule, flexibility exists to apply the existing
regulations and policies regarding BACT in ways that take into account
their net effects on atmospheric GHG concentrations. Without prejudging
the outcome of our process to seek comment on whether and how we might
address emissions of biogenic carbon under the PSD and Title V programs
through a future action, we indicated that this issue warranted further
exploration.
    In order to explore the issue further following the promulgation of
the Tailoring Rule, on July 15, 2010 EPA solicited views from the
public through a Call for Information (CFI) on approaches to accounting
for biogenic CO2 emissions, including whether some or all of
a source's biogenic CO2 emissions could be discounted based
on a determination that they are canceled out by the CO2
absorption associated with growing the fuel. 75 FR 41173. Also, we
solicited information on the means to estimate and measure
CO2 emissions from a variety of biogenic CO2
sources that typically have not been part of emission inventories
(e.g., landfills, livestock management, and fermentation processes), as
well as information on other biogenic sources that may be affected but
which were not identified specifically in the CFI.
    With promulgation of the Tailoring Rule we committed to issue
technical and policy guidance for permitting of GHGs. Subsequently, the
information gathered from stakeholders in response to the CFI provided
diverse perspectives on treatment of biogenic CO2 emissions
in pre-construction and operating permit reviews, including many
requests to exclude, either partially or wholly, biogenic
CO2 sources from PSD applicability determinations and BACT
analyses on the basis of Inventory results and other considerations. On
November 10, 2010, EPA issued the draft ``PSD and Title V Permitting
Guidance for Greenhouse Gases'' which provides the basic information
that permit writers and applicants need to address GHG emissions in
permits.\16\ Within the November guidance, EPA acknowledged the
numerous stakeholder comments on biogenic CO2 BACT analyses
and provided general guidance to permitting authorities to consider
environmental, energy, and economic benefits that may accrue from the
use of certain types of biomass (e.g., biogas from landfills for energy
generation), consistent with existing air quality standards. We also
committed to provide more detailed technical and policy guidance early
in 2011 for completing Step 4 of a ``top-down'' BACT analyses for GHG
emissions from certain types of biomass sources to enable permitting
authorities to simplify and streamline BACT determinations for such
sources. EPA accepted public comments on the November guidance through
December 1, 2010, and the Agency is considering these comments while
developing the detailed permitting guidance.
---------------------------------------------------------------------------

    \16\ http://www.epa.gov/nsr/ghgdocs/epa-hq-oar-2010-0841-0001.pdf.
---------------------------------------------------------------------------

    Noting that a variety of Federal and State policies have recognized
that some types of biomass can be part of a national strategy to reduce
dependence on fossil fuels and to reduce emissions of GHGs, EPA
determined that it is appropriate for permitting authorities to account
for both existing Federal and State policies and their underlying
objectives in evaluating the environmental, energy and economic
benefits of biomass fuel. Based on these considerations, permitting
authorities might determine that the use of certain types of biomass
alone meets the BACT requirement for GHGs.
    On August 3, 2010, NAFO petitioned the EPA to reconsider and stay
the implementation of the PSD and Title V GHG Tailoring Rule.\17\ The
petition alleged that the final Tailoring Rule declared, for the first
time and without any prior proposal or notice to industry, that EPA
would count CO2 emissions from combustion of biomass toward
the applicability thresholds established for the PSD and Title V
permitting programs of the CAA. Petitioners further alleged that EPA's
proposed rule had provided for the appropriate and opposite conclusion:
That CO2 emissions from combustion of biomass should not be
counted. Petitioners stated that there is near-universal recognition
that CO2 emitted from combustion of fuels derived from
biomass should be excluded from GHG regulations because production and
combustion of such fuels do not increase atmospheric CO2
levels. Pending reconsideration, petitioners requested that the
application of the PSD and Title V permitting programs to emissions of
CO2 from biomass be stayed. We considered carefully the
petitioners' assertions and noted that we also received comments
through the CFI supporting the exclusion of biogenic CO2
from stationary source permitting requirements. Through the CFI,
however, EPA also received information supporting the position that
biogenic CO2 should not be excluded from permitting
programs, and that the use of certain types of biomass as fuel could
increase atmospheric CO2 levels. Based on consideration of
the petitioners' arguments, together with the weight of the comments
received on the CFI, EPA has concluded that the issue of accounting for
the net atmospheric impact of biogenic CO2 emissions is
complex enough that further consideration of this important issue is
warranted. Therefore, EPA granted the petition on January 12, 2011.
---------------------------------------------------------------------------

    \17\ National Alliance of Forest Owners' Petition To Reconsider
the Prevention of Significant Deterioration and Title V Greenhouse
Gas Tailoring Rule and To Stay the Rule Pending Reconsideration.
EPA-HQ-OAR-2010-0841-0029.1.
---------------------------------------------------------------------------

    However, EPA did not grant the request for an administrative stay
of the Tailoring Rule, because the rule is critical for making overall

implementation of the PSD program feasible. Furthermore, an
administrative stay of the statements in the preamble of the Tailoring
Rule that describe EPA's initial determination not to exempt emissions
of CO2 from biomass would not provide the requested relief
of excluding emissions of CO2 from biomass from the PSD and
Title V permitting programs. The effect of a stay of this or any other
aspect of the Tailoring Rule would be to return the legal regime that
existed before EPA's issuance of a final Tailoring Rule. As no
exemption for emissions of CO2 from biomass existed prior to
the final rule, an administrative stay would not result in an exemption
from the requirements of PSD and Title V.

C. Complexity of Determining Net Atmospheric Impact of CO2
Emissions and Incorporating This Information Into the PSD and Title V
Programs

    In this section we discuss the complexity of the issues associated
with reconciling facility-based and land-based sequestration accounting
systems, as well as with accounting for land-based sequestration. Based
on comments received from stakeholders in the CFI, we discuss further
some general principles for land-based accounting (e.g., changes in the
BAU baseline), and we present some of the proposed accounting
methodologies (e.g., case-by-case analysis, categorical exclusion,
contingent exclusion, and feedstock-based approaches).
1. Reconciling Accounting Systems: Facility-Based Emissions and Land-
Based Sequestration
    Within the context of the PSD and Title V programs, the argument
for treating CO2 emissions from bioenergy and biogenic
sources differently from fossil-based CO2 emissions at the
facility relies on the premise that sequestration occurs offsite,
outside the boundaries of the facility. Therefore, when considering
application of this premise to the PSD and Title V programs, it is
important that the sequestration be accounted for at a level of spatial
and temporal resolution that is meaningful and practical for purposes
of facility-based permitting. Such an accounting system must also be
predictable, so that it can be utilized effectively by facilities and
permitting authorities. Finally, the accounting system should be
scientifically sound to allow for accurate accounting of net
CO2 emissions to the atmosphere.
    In addition to those commenters suggesting a categorical approach
(i.e., as discussed below, an exclusion for all biogenic CO2
emissions based on a finding of a net sink in the LULUCF section of the
Inventory) other comments in response to the CFI repeatedly explained
that different types of biological material (e.g., feedstocks) have
different effects on atmospheric carbon emissions. Comments also
underscored the importance of reconciling the facility-based permitting
requirements under PSD and Title V with an accounting approach that
relies upon estimates of land-based sequestration. This reconciliation
will require careful attention to issues of spatial and temporal scale,
to ensure that the principles of practicality, predictability, and
scientific soundness are met.
2. Complexity in Accounting for Land-Based Sequestration
    Establishing an accounting system for the net atmospheric impact of
biogenic CO2 emissions from stationary sources is complex.
As mentioned above and below, commenters to the CFI made suggestions
ranging from a categorical exclusion of facility-based emissions to a
case-by-case analysis approach. Multiple factors need to be considered
to accurately assess the net atmospheric impacts of the use of a
particular type of fuel by a stationary source over a specified time
period, that extends into the future: Net emissions to the atmosphere
(emissions from the facility and sequestration elsewhere) of carbon
from the biomass used for bioenergy; the time scale against which net
emissions should be measured; delineation of geographic areas for
measurement; and leakage.
    Many of these factors are driven by or determined at the local or
regional level. Bioenergy production may result in dramatic changes in
one region's carbon stock, for example, and very little change in
another's. Regional variability is also inherent in natural systems,
for example in rates of plant growth and disturbance frequencies. Some
areas are more prone to disturbances such as drought and fire, while
other areas experience warmer temperatures and unpredictable
precipitation patterns. Some areas receive more atmospheric nitrogen
deposition than others, or are more susceptible to insect outbreaks.
Species-specific variations are important as well. Some plant species
simply grow more quickly than others.
    As mentioned above, considerations of spatial and temporal scale
become increasingly important in an accounting system that seeks to
reconcile facility-based emissions with land-based sequestration. How
large an area should be considered when developing an accounting
system--should it be facility-level, ownership-level, State-level,
regional, or national? What is the appropriate period of time to be
considered in the accounting system--should it roughly parallel the
length of time required for plant biomass to re-sequester the amount of
CO2 released during the biomass combustion? How might this
time period differ for various biomass types? Can the issues of spatial
and temporal scale be considered together, such that the time period
considered for the analysis varies depending on where the land is
located or how large an area is considered?
    Given the inherent variability in biological processes, as well as
the variability in spatial and temporal scales that can influence
estimates of sequestration, general principles that can be broadly
applicable to all aspects of accounting for CO2 emissions
from bioenergy and other biogenic sources will likely be most helpful.
3. General Principles
    The level of sequestration that occurs naturally on the landscape
without additional intervention can be considered as the ``baseline.''
In other words, this level of sequestration (or emissions) will likely
continue into the future without additional action. For example, if
favorable conditions for plant growth cause sequestration to increase
beyond what is incorporated into the baseline for that region, then net
atmospheric carbon levels will be lower than anticipated under
``business as usual'' (BAU). If sustainable forestry is practiced, then
neither gain nor loss from carbon stocks on forestland would be
expected over time, and net atmospheric carbon levels would not deviate
from those expected in the BAU case. However, if logging is accelerated
from a particular region over a certain period of time, and
CO2 emissions from the forest are thereby increased, then
the net atmospheric carbon levels will be higher than anticipated in
the BAU case.
    In the context of bioenergy and biogenic emissions, where such a
wide variety of potential feedstocks exists, the baseline might be
considered the emissions that ``would have happened anyway'' in the BAU
case. Using this approach, it is necessary to determine the extent to
which a policy action or an activity increases or reduces
CO2 emissions above or below what would have occurred in
comparison with the baseline. From the perspective of bioenergy and
other biogenic emissions, emissions that would have occurred anyway--
regardless of whether or not the facility captured the energy from the
biofuel use or carried out the process using biological material as a

feedstock--might be treated differently than emissions that would not
have occurred anyway (i.e., new emissions generated as the result of
policy-based bioenergy incentives). For example, some commenters to the
CFI suggested that utilizing logging residue to generate energy, rather
than leaving the residue to decompose on the forest floor following
harvesting, likely would not cause emissions over and above that which
would have taken place if the energy use did not occur, while also
noting the length of time required for the residue to decompose (for
example, 10-15 years).
    Land use change has a separate set of considerations under the
baseline case. For example, if the rate of land use transition from
forest to agricultural use were to increase over and above that which
was expected in the BAU case, and if this increase were attributable to
market demand for a bioenergy crop, then it would be possible that
these emissions would be additional to the emissions expected under
BAU. In that situation, the bioenergy use might result in increased
atmospheric CO2 levels.
4. Complexity in Developing Accounting Methodology
    In response to the CFI, commenters suggested various approaches to
accounting for CO2 emissions from bioenergy and other
biogenic sources.
a. Case-by-Case Analysis
    Some commenters suggested that analysis of PSD applicability should
rely on a case-by-case, facility-specific assessment of the net
atmospheric impact of the intended biomass fuels. This would require
facility-level accounting for the emissions associated with the full
chain of fuel production and use. Commenters indicated that this type
of facility-specific approach would be the most scientifically sound
approach for assessing the net carbon cycle impact of specific biomass
fuels.
    However, other commenters noted that the case-by-case approach, in
which a complete analysis would be conducted for each permit
application, would likely be prohibitively time-consuming and complex
for facilities and permitting authorities.
b. Categorical Exclusion
    Some commenters suggested that a categorical exclusion for all
bioenergy and biogenic sources would be appropriate. Using this
approach, no emissions from any such sources would be counted for PSD
and Title V applicability. According to commenters supporting this
option, the rationale for such an exclusion rests on the idea that all
biological sources are part of the ``active carbon cycle,'' in which
CO2 is cycled between the land and atmosphere on a
relatively short timeframe.
c. Contingent Exclusion
    In other comments, stakeholders suggested that a categorical
exclusion for all bioenergy and other biogenic sources would be
appropriate with an added contingency. For example, all bioenergy and
other biogenic emissions could be excluded from PSD and Title V
applicability as long as forest land in the U.S. remains a net carbon
sink, such that sequestration remains greater than emissions at the
national scale. Some commenters suggested that this contingency might
also be expressed at a State scale, such that all facilities that emit
CO2 from bioenergy or other biogenic sources would be
excluded from applicability as long as the forest land within that
State acts as a net carbon sink.
d. Feedstock-Based Approach
    An important area of consensus from commenters was the idea that
feedstocks are different, and that the net impact of bioenergy and
other biogenic emissions may be traceable to the feedstock that is
used. For example, commenters indicated that it would be preferable to
distinguish various categories of woody biomass feedstocks, such as
wood waste, logging residue, forest treatment thinnings, biomass crops,
and whole-tree chips from expanded harvest operations. Various other
feedstock categorizations for different types of material were also
proposed.\18\
---------------------------------------------------------------------------

    \18\ Though this proposed rule concerns emissions from
stationary sources, we note that various motor vehicle fuels are
derived from plant material. For example, ethanol can be produced
from plant starch or cellulose, and diesel fuel can be produced from
various plant oils. The Energy Independence and Security Act of 2007
(EISA) required EPA, in the context of implementing the renewable
fuel program under section 211(o) of the CAA, to evaluate the
lifecycle greenhouse gas emissions of these and other motor vehicle
fuels. EPA's analysis of the various fuels demonstrated that
multiple factors, including the type of feedstock used, resulted in
a wide variation in their associated lifecycle GHG emissions. For
example, from a lifecycle perspective some of the analyzed motor
vehicle fuels result in very large reductions in GHG emissions
compared to the fossil fuel they replace, while others do not. The
lifecycle analyses of the motor vehicle fuels took into account a
wide range of factors, including the carbon sequestration associated
with the biomass. See 75 FR 14670, 14764-799 (March 26, 2010).
---------------------------------------------------------------------------

D. Designing and Implementing an Accounting Approach

    As described in section III below, EPA is proposing to defer the
applicability of the PSD and Title V program to biogenic CO2
emissions from stationary sources for three years in order to allow
time for a detailed examination of the science associated with biogenic
CO2 emissions and to consider the technical issues that the
Agency must resolve in order to account for biogenic CO2
emissions in ways that are scientifically sound and also manageable in
practice. As part of that examination we intend to engage with an
independent scientific panel, as well as with partners inside and
outside the Federal government with relevant expertise, to ensure a
robust review of the scientific and technical issues associated with
this type of accounting. During this time period the Agency can develop
an appropriate accounting methodology that satisfies the principles of
predictability, practicality, and scientific soundness. Should it be
necessary, EPA proposes to implement the appropriate accounting
methodology through notice-and-comment rulemaking within the three-year
timeframe.

III. Interim Deferral of Biogenic CO2 Emissions Under the PSD and Title
V Permitting Programs

    As stated above, one critical reason for the proposed deferral is
to give EPA time to conduct a detailed examination of the science, to
engage with an independent scientific panel and then, if appropriate,
to initiate a notice and comment rulemaking to implement an accounting
approach all within the proposed three year timeframe.
    Another important reason for the three-year deferral period,
described in Section III.C below, is to allow sufficient time to
consider the unique characteristics and attributes of biogenic
CO2 feedstocks, using the results from the detailed
examination mentioned previously, within both the State permitting
agencies and affected facilities. We concluded that, absent this
deferral, there would be significant additional and unique
complexities, as described in more detail in section II.C. As a result
there would be additional permitting burden in terms of time and
resources requirements, resulting from the associated analysis that
would be required for permitting entities that are sources of biogenic
CO2 emissions under Step 2 of the Tailoring Rule, which is
scheduled to begin on July 1, 2011.
    While the interim guidance described in section III.D will help
alleviate some of this burden, we expect that more and more diverse
users of biomass combustion or other biogenic CO2 sources
are likely to be affected under Step 2 of the Tailoring Rule because,

under Step 2, these sources can trigger permitting requirements based
solely on their GHG emissions with no pre-requisite requirement that
they otherwise trigger PSD or Title V permitting requirements for a
non-GHG pollutant. We believe, absent the deferral period and the
completion of EPA's full analysis of the unique technical issues
associated with these diverse facilities emitting biogenic
CO2, it would be particularly challenging for permitting
authorities and facilities to process permits involving these
emissions.
    Also, as described in section III.D, this proposed deferral is
intended to temporarily exclude biogenic CO2 emissions from
the definition of ``subject to regulation,'' as that term was defined
for purposes of the Tailoring Rule, for a period of three years, while
EPA further considers, through notice and comment rulemaking, the
approach to accounting for these emissions on a permanent basis.

A. General Rationale and Legal Justification for Interim Deferral

1. Applicability of PSD and Title V to Biogenic CO2
Emissions From Major Stationary Sources
    As currently written, the PSD and Title V regulations apply to
biogenic CO2 emissions from major sources or major
modifications at such sources according to provisions included under
the definition of ``subject to regulation'' in the SIP regulations at
40 CFR 51.166 and the Title V State program regulations at 40 CFR 70.2,
as well as the Federal Implementation Plan requirements at 40 CFR 52.21
and the Title V Federal program regulations at 40 CFR 71.2. Thus,
revisions to these regulations are necessary to defer application of
the PSD and Title V programs to such sources of biogenic
CO2.
    Specifically, with respect to PSD, EPA's regulations implement the
PSD provisions of the CAA, and the language of these statutory
provisions is broad enough to cover biogenic CO2 emissions.
The 100/250 tpy thresholds previously described originate from section
169 of the CAA, which applies PSD to any ``major emitting facility''
\19\ and defines the term to include any source with a potential to
emit ``any air pollutant'' in an amount over 100 or 250 tpy, depending
on source category. EPA's long-standing regulations interpret the PSD
applicability provision that refers to ``any air pollutant'' to refer
to any ``regulated NSR pollutant,'' which in turn includes any air
pollutant ``subject to regulation.'' Similarly, under sections
165(a)(4) and 169(3) of the CAA, the BACT requirement applies to ``each
pollutant subject to regulation'' under the CAA. As noted in other
recent EPA actions, GHG are currently ``subject to regulation'' under
the CAA, subject to specific limitations reflected in the definition of
that term that EPA adopted in the Tailoring Rule. Thus, emissions of
GHG (including CO2) must be considered in determining
whether a source is a major emitting facility subject to PSD, as a
result of construction or modification, and whether the BACT
requirement applies to GHG (including CO2 as a component of
GHG). In light of the way these regulations are currently written, EPA
is unable to exclude biogenic CO2 emissions from PSD review
without amending the regulations.
---------------------------------------------------------------------------

    \19\ EPA's regulations employ the term ``major stationary
source'' in lieu of ``major emitting facility.'' e.g., 40 CFR
52.21(a)(2)(i), (b)(1)(i).
---------------------------------------------------------------------------

    Stationary sources of air pollutants, including sources of biogenic
CO2 emissions, are currently subject to PSD requirements if
they emit more than 100 or 250 tpy of a regulated NSR pollutant other
than GHG and have triggered PSD as a result of these emissions. We call
these sources ``anyway'' PSD sources, and bioenergy and other sources
of biogenic CO2 emissions may be among them based on
emissions of pollutants other than GHG. Under the Tailoring Rule, since
January 2, 2011 (the beginning of step 1 of the Rule), PSD permits for
such a source have had to meet emissions limitations based on
application of BACT for GHG if the source is newly constructed and has
the potential to emit 75,000 tpy or more of this pollutant on a
CO2e basis; or is an existing source which, as a result of a
modification, increases GHG emissions by 75,000 tpy or more on a
CO2e basis and by any amount on a mass basis. In addition,
starting on July 1, 2011 (the beginning of step 2 of the Tailoring
Rule), a source that is not an ``anyway'' PSD source, but that newly
constructs and emits at least 100,000 tpy CO2e GHG, or that
is an existing source that emits at least 100,000 GHG tpy
CO2e and that modifies and increases its GHG emissions by at
least 75,000 tpy CO2e GHG and any amount on a mass basis,
will need a PSD permit for its GHG, including any biogenic
CO2.
    With respect to Title V, as noted previously, Title V applies to
sources, among others, that emit 100 tons per year of specified
quantities of ``any air pollutant,'' see CAA section 502(a), 501(2)(B),
302(g). In the Tailoring Rule, EPA codified its longstanding
interpretation that this requirement only extends to major sources of
air pollutants subject to regulation, and further defined ``subject to
regulation'' such that it may include GHGs at sources which emit or
have the potential to emit 100,000 tpy CO2e as of July 1, 2011. As
described immediately above, GHG are currently ``subject to
regulation'' under the CAA (again, subject to specific limitations
reflected in the definition of that term that EPA adopted in the
Tailoring Rule), and as a result, emissions of GHG, including biogenic
CO2 emissions, are considered in determining whether a
source is subject to Title V as of July 1, 2011.
    Under the Tailoring Rule, since January 2, 2011 (again, the
beginning of step 1), sources that are subject to Title V anyway--which
we call ``anyway'' Title V sources and which include existing sources
with Title V permits, or new sources obtaining Title V permits, due to
their non-GHG emission--have been required to address GHG, including
GHG from biomass, to the extent there are Title V requirements relevant
to GHG. This means that their Title V permits must contain, at the
appropriate time, conditions necessary to assure compliance with any
applicable requirements concerning their GHG emissions. As of July 1,
2011 (again, the beginning of step 2), new or existing sources that are
not ``anyway'' Title V sources, that emit or have the potential to emit
at least 100,000 GHG tpy CO2e (and 100 tpy on a mass basis),
and are subject to an approved or EPA-promulgated title V program, will
become subject to Title V requirements.
    Therefore, absent some further regulatory action, EPA is unable to
exclude biogenic CO2 emissions from the applicability of
Title V.
2. Authority To Exempt de minimis Emissions
    As noted, since the relevant provisions of the Act apply to ``any
air pollutant'' or any ``air pollutant subject to regulation,'' the
terms of the CAA suggest that the PSD and Title V requirements should
apply to CO2 emissions from bioenergy or other biogenic
sources in the same manner as they apply to emissions of CO2
from any other type of source, since such emissions are constituents of
the regulated pollutant GHG. However, as discussed elsewhere in this
preamble, EPA believes it has the authority to exclude biogenic
CO2 emissions from the PSD and Title V requirements for the
proposed three-year deferral period and will be exploring whether a
permanent exemption is permissible for at least some and perhaps all
types of feedstocks.

    Courts have recognized that administrative agencies have the
implied authority to establish exemptions ``when the burdens of
regulation yield a gain of trivial or no value.'' Alabama Power Co. v.
Costle, 636 F.2d 323, 360 (DC Cir. 1980). In this decision that
specifically addressed the requirements of the PSD program, the DC
Circuit described this principle as follows:

    Categorical exemptions may also be permissible as an exercise of
agency power, inherent in most statutory schemes, to overlook
circumstances that in context may fairly be considered de minimis.
It is commonplace, of course, that the law does not concern itself
with trifling matters, and this principle has often found
application in the administrative context. Courts should be
reluctant to apply the literal terms of a statute to mandate
pointless expenditures of effort.
    Id. (internal citations omitted).

In an earlier case cited by the court in Alabama Power, the court
described the doctrine as follows:

    The `de minimis' doctrine that was developed to prevent trivial
items from draining the time of the courts has room for sound
application to administration by the Government of its regulatory
programs. * * * The ability, which we describe here, to exempt de
minimis situations from a statutory command is not an ability to
depart from the statute, but rather a tool to be used in
implementing the legislative design. District of Columbia v.
Orleans, 406 F.2d 957, 959 (1968).

In this respect, the Alabama Power opinion observed in a footnote that
the de minimis principle ``is a cousin of the doctrine that,
notwithstanding the `plain meaning' of a statute, a court must look
beyond the words to the purpose of the act where its literal terms lead
to `absurd or futile results.' '' Id. at 360 n. 89 (citations omitted).
    To apply an exclusion based on the de minimis doctrine, ``the
agency will bear the burden of making the required showing'' that a
matter is truly de minimis which naturally will turn on the assessment
of particular circumstances. Id. The Alabama Power opinion concluded
that ``most regulatory statutes, including the CAA, permit such agency
showings in appropriate cases.'' Id.
    A notable limitation on the de minimis doctrine is that it does not
authorize the agency to exclude something on the basis of a cost-
benefit analysis. As the court explained, this ``implied authority is
not available for a situation where the regulatory function does
provide benefits, in the sense of furthering the regulatory objectives,
but the agency concludes that the acknowledged benefits are exceeded by
the costs.'' Id. The court held that any ``implied authority to make
cost-benefit decisions must be based not on a general doctrine but on a
fair reading of the specific statute, its aims and legislative
history.'' Id.
    Since the early years of the PSD program, EPA has applied this de
minimis principle to establish various types of values in the PSD
regulations that may be used to exempt a source from all or part of the
PSD program requirements. These include the significance levels
(described previously), which are also called significant emissions
rates, and air quality screening values called significant impact
levels (SILs) and significant monitoring concentrations (SMCs).
    The significant emission rates reflect levels below which EPA
considers an emissions increase to be de minimis. 45 FR 52676, 52705-
07. They are applied to allow modifications having minimal impact to
proceed without the need for obtaining a PSD permit. See also 40 CFR
51.166(b)(23); 40 CFR 52.21(b)(23). In addition, these values may be
used to eliminate the need for a permit to contain BACT limitations for
a particular pollutant or to require a source to prepare an ambient air
quality analysis for a particular pollutant that is not emitted or
increased by significant amounts.
    EPA has also relied on the de minimis doctrine to establish values
that permitting authorities can use to show that a source that requires
a PSD permit meets the necessary criteria to obtain a permit.
Significant impact levels may be used in particular ways identified in
prior EPA rules and guidance as part of an assessment of whether a
source causes or contributes to a violation of air quality standards.
Significant monitoring concentrations may be used to exempt sources
from pre-construction monitoring requirements. See 75 FR 64864, 64890-
97 (October 20, 2010).
3. Potential for Some Biomass Feedstocks To Have a de minimis Impact on
Carbon Levels in the Atmosphere
    As discussed previously in this preamble, EPA has sufficient
information at this time to conclude that at least some biomass
feedstocks that may be utilized to produce energy have a negligible
impact on the net carbon cycle, such as residue material (e.g., sawdust
from milling operations) that would have decomposed under natural
circumstances in a relatively short period of time (e.g., 10-15 years).
Given this negligible impact on the carbon cycle, the gain from
regulating emissions from combustion of this feedstock for bioenergy
could be considered to be trivial.
    It appears that the potential may exist for EPA to determine that
other types of biomass feedstocks would have a negligible impact on the
net carbon cycle impact after further detailed examination of the
science associated with biogenic CO2 emissions. Thus, if EPA
were to require all bioenergy facilities to limit emissions of
CO2 before this assessment is complete, it may later
determine that such actions have yielded trivial gain. To avoid this
outcome, and because of the administrative burdens described elsewhere
in this preamble, EPA believes an initial deferral of the PSD
requirements for bioenergy and other biogenic sources is justified at
this time. However, the possibility also remains that more detailed
examination of the science of biogenic CO2 will demonstrate
that the utilization of some biomass feedstocks for bioenergy
production will have a significant impact on the net carbon cycle,
making application of the PSD program requirements to such emissions
necessary to fulfill Congressional intent. Thus, EPA is proposing only
a temporary, rather than a permanent, deferral of PSD requirements for
such sources at this time.
4. Given the Burden of Case-by-Case Analysis and Potential for de
minimis Impact, Regulation at This Time Is Not Justified
    Since finalizing the Tailoring Rule, EPA has gathered additional
information concerning biomass through the CFI. The information
collected to this point indicates that at present, attempting to
determine the net carbon cycle impact of particular facilities
combusting particular types of biomass feedstocks would require
extensive analysis and would therefore entail extensive workload
requirements. Further, methodologies are not sufficiently developed to
assure that various permitting authorities would be able to reasonably
and consistently perform the necessary calculations to determine the
net atmospheric impact in particular instances.
    The extensive workload requirements that PSD and Title V permit
applications for bioenergy facilities and other sources of biogenic
CO2 emissions would entail would necessarily strain
permitting authority resources and result in delays in processing
permits for other applicants. Moreover, at present, devoting these
limited permitting authority resources to biomass would not be
productive in

light of the previously described possibility that EPA may ultimately
determine that the utilization of some biomass feedstocks for bioenergy
has a negligible or de minimis impact on the net carbon cycle.
    Therefore, the information EPA has collected since promulgating the
Tailoring Rule indicates that it is consistent with the rationale of
the Tailoring Rule to defer on a temporary basis biogenic
CO2 emissions from PSD and Title V applicability, pending
the detailed examination of the science associated with biogenic
CO2 emissions from stationary sources, including engaging
with an independent scientific panel, and considering technical issues,
that the Agency must resolve in order to account for biogenic
CO2 emissions in ways that are scientifically sound and also
manageable in practice. As noted previously, EPA based the Tailoring
Rule on the extreme administrative burdens to permitting authorities,
and undue costs to sources, that would result from a literal
application of the PSD and Title V 100/250 tpy statutory thresholds, as
of January 2, 2011, when those requirements first apply to GHGs. EPA
reasoned that, in accordance with the Chevron analytical framework for
statutory construction, taking into account the ``absurd results'' and
``administrative necessity'' lines of cases, Congress did not intend
that the PSD and Title V requirements apply at the 100/250 tpy
statutory thresholds to GHG-emitting sources as of January 2, 2011, but
rather that those requirements could be limited, at least initially,
through a phase-in approach, to higher-emitting sources. Just as the
extensive workload of processing permit applications from sources below
the Tailoring Rule thresholds justified exempting those sources at
least from the initial steps in the Tailoring Rule phase-in program,
pending EPA's development of streamlining methods and the permitting
authorities' acquisition of additional resources, so too the extensive
workload of processing permit applications from biomass facilities
justifies exempting those sources for a period of time, pending EPA's
development of a consistent and practical methodology for determining
net carbon cycle impacts (see section II.D). The EPA proposes in the
present action that a three-year deferral will be adequate to allow
time for the development of the methodology. In effect, EPA proposes in
this action to revise the Tailoring Rule's phase-in approach to, in
effect, defer the applicability of PSD and Title V to biogenic
CO2 emissions, relying in part, on the same rationale as EPA
used to justify the Tailoring Rule's phase-in approach.
    An alternative way to reduce the permitting burden would be to
apply PSD and Title V to all facilities with biogenic CO2
emissions that emit at or above the Tailoring Rule thresholds, but
without making any effort to take into account net carbon cycle
impacts. However, we believe that it is conceivable that as a result of
the scientific examination of biogenic CO2 emissions
described in section II.D, we could conclude that the net carbon cycle
impact for some biomass feedstocks is negligible. Accordingly, this
could result in regulation that yields trivial gain as previously
discussed. To avoid this outcome, given our current state of knowledge,
we believe a case-by-case net carbon cycle impact analysis would be
required in the course of reviewing each permit application. This
burden would be in addition to the currently existing burden associated
with obtaining a PSD or Title V permit. In light of the permitting
burdens assessed in the Tailoring Rule, adding to that burden would
frustrate the goals we sought to accomplish in the Tailoring Rule to
ensure that the PSD and Title V programs can be administered in each
State.
    Furthermore, given the potential that the utilization of at least
some biomass feedstocks may have a negligible impact on the net carbon
cycle, engaging in this type of burdensome analysis may not be an
optimal use of the limited resources of PSD and Title V permitting
authorities. The additional scientific examination proposed by the EPA
(see section II.D) could ultimately conclude that such resources could
have been more effectively utilized to target CO2 emissions
that clearly have a detrimental impact on the net carbon cycle.
Establishing a three-year deferral period for biogenic CO2
emissions will enable EPA to consider the results of the detailed
examination of the science of these emissions and undertake a
rulemaking to determine the best way to account for biogenic
CO2 emissions when determining PSD applicability.
5. Subjecting Biogenic CO2 Emissions to Permitting may be
Counterproductive Because it Could Discourage Utilization of the
Biomass Feedstock as Fuel
    In some cases, the use of biological material as a fuel would
clearly reduce net atmospheric CO2 levels. In these cases,
requiring permitting at this time, before conducting the detailed
scientific examination discussed in section II.D that is required to
develop an appropriate accounting system for bioenergy and other
biogenic sources, might actually discourage projects that would have a
net benefit for the atmosphere. For example, requiring permitting for
facilities seeking to generate energy from the combustion of dead
trees, especially those killed due to a widespread event like the
mountain pine beetle epidemic, is likely to discourage the utilization
of a readily available resource that would clearly reduce
CO2 emissions (e.g., by removing and utilizing biomass
material that would otherwise be susceptible to fire or decompose in
the forest, leading to CO2 and CH4 emissions from
decomposition). Likewise, combustion of CH4-laden biogas
(e.g., from landfills or other large sources of methane) for energy
production reduces overall CO2e emissions because of the
higher GWP for CH4.

B. CO2 Emissions That Are Deferred

    As discussed earlier, the deferral applies to biogenic
CO2 emissions from biogenic feedstocks, rather than to
specific types of facilities. All non-biogenic emissions from a
facility continue to be included for purposes of PSD applicability
throughout the deferral period. However, the portion of the
CO2 emissions from a facility that result from biologically-
derived material are deferred and not included for purposes of
determining PSD applicability during the deferral period. If fossil-
derived fuel is used within a facility to provide energy for a process
that also uses biological material, the emissions associated with the
fossil fuel must be counted toward PSD applicability regardless of the
use of the biological material.
    Specifically, the emissions that are deferred from applicability
include, but are not limited to:
     CO2 generated from the biological decomposition
of waste in landfills, wastewater treatment or manure management
processes;
     CO2 from the combustion of biogas collected
from biological decomposition of waste in landfills, wastewater
treatment or manure management processes;
     CO2 from fermentation during ethanol
production;
     CO2 from combustion of the biological fraction
of municipal solid waste or biosolids;
     CO2 from combustion of the biological fraction
of tire-derived fuel; and
     CO2 derived from combustion of biological
material, including all types of wood and wood waste, forest residue,
and agricultural material.

C. Non-CO2 GHGs and Non-GHG Pollutants

    As explained in section II.A.4, CO2 is unique among GHGs
in that large and relatively rapid fluxes of CO2 between
land and atmosphere occur as part of the global biogeochemical system
that maintains life on Earth.\20\ Because other non-GHG pollutants and
non-CO2 GHGs do not participate in natural biogeochemical
carbon cycles as CO2 does, this frame of reference--in which
sequestration outside the facility is considered as part of the
justification for differential treatment in the PSD and Title V
programs--is not relevant for those other pollutants. The deferral
proposed here does not apply to GHG emissions from bioenergy or
biogenic sources other than biogenic CO2
emissions, nor does it apply to emissions of non-GHG
pollutants.
---------------------------------------------------------------------------

    \20\ U.S. Greenhouse Gas Inventory Fast Facts (April 2010.).
http://www.epa.gov/climatechange/emissions/downloads10/US-GHG-Inventory-Fast-Facts-2008.pdf.
---------------------------------------------------------------------------

D. Mechanism for Deferral and State Implementation

1. Adding to Definition of Subject to Regulation Established in
Tailoring Rule
    To implement the proposed deferral, we are proposing to revise the
definition of the term ``subject to regulation'' that EPA adopted in
the PSD and Title V GHG Tailoring Rule. We are proposing to add
language to the definition of ``subject to regulation'' to exclude
biogenic CO2 emissions from stationary sources for a three-
year period starting on the date the promulgated rule is published in
the Federal Register.
    The EPA's PSD regulations implement the PSD provisions of the CAA,
and the language of these statutory provisions is broad enough to cover
biogenic CO2 emissions. The 100/250 tpy thresholds
previously described originate from section 169 of the CAA, which
applies PSD to any ``major emitting facility'' and defines the term to
include any source with a potential to emit ``any air pollutant'' in an
amount equal to or greater than 100 or 250 tpy, depending on the source
category. The EPA's long-standing regulations interpret the PSD
applicability provision that refers to ``any air pollutant'' to refer
to any ``regulated NSR pollutant,'' which includes any air pollutant
``subject to regulation.'' In the final Tailoring Rule, EPA defined the
term ``subject to regulation'' so that only GHG emissions from sources
at or above specified thresholds (depending on the circumstances,
75,000 and/or 100,000 tpy on a CO2e basis) are pollutants
subject to regulation. Thus, sources that emit amounts exceeding the
established thresholds, are subject to PSD as long as that amount of
GHG also exceeds 100/250 tpy on a mass basis. Similarly, in the
Tailoring Rule, EPA defined ``subject to regulation'' under the Title V
program regulations so GHG emissions from sources at or above 100,000
tpy on a CO2e basis are subject to regulation. We believe
this is also the most efficient and effective approach for implementing
the deferral of biogenic CO2 emissions proposed in this
rule.
    Under this approach, some States may not need to undertake a
regulatory or legislative action to implement the final rule if they
are able to interpret the term ``subject to regulation'' used in
existing State regulations in a manner consistent with the revised
definition propose in this rule. A full description of the ``subject to
regulation'' mechanism and the basis for its usage in the Tailoring
Rule can be found in preamble text for that rulemaking.\21\
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    \21\ 75 FR 31579-81 (June 3, 2010).
---------------------------------------------------------------------------

2. State Decisions To Adopt Deferral
    Currently, a SIP-approved PSD program that applies to GHG-emitting
sources applies to biogenic CO2 emissions to the same extent
as the program applies to all other GHGs. The same is true for an
approved Title V program that applies to GHG-emitting sources. However,
we believe that many States may not be inclined to apply their PSD or
Title V programs to biogenic CO2 emission sources for the
same fundamental reasons that we are proposing to defer inclusions of
these sources under the PSD and Title V permitting programs for a
three-year period. As has been stated previously, one of our primary
reasons for reconsideration of application of the Tailoring Rule
requirements to biogenic CO2 emissions sources \22\ was to
allow for a detailed examination of the science associated with
biogenic CO2 emissions and to consider the technical issues
that the agency must resolve in order to account for biogenic
CO2 emissions in ways that are scientifically sound and also
manageable in practice. We believe that most, if not all, States are
facing similar needs for further scientific examination and analysis to
properly consider biogenic CO2 emissions under a permitting
scenario in a way that will not disrupt the proper functioning and
timeliness of permitting activity within the State PSD and Title V
programs. We believe States will also benefit from the deferral period
in order to have sufficient time to respond to the results of the data
collection and examination of the science associated with biogenic
emissions and to properly educate and train staff in the unique
permitting issues associated with biogenic sources, including
fundamental principles such as accurate emission estimation
methodologies and full consideration of environmental impacts
associated with these sources.
---------------------------------------------------------------------------

    \22\ Letter from Honorable Lisa Jackson, Administrator, U.S.
EPA, to R. Martella, Jr., R. Gray, and J. Coleman, Sidley Austin,
LLP. (January 12, 2011.). http://www.epa.gov/NSR/ghgdocs/McCarthytoMartella.pdf.
---------------------------------------------------------------------------

    Thus, States that cannot interpret their PSD SIP or Title V
requirements to incorporate the three-year deferral are strongly
encouraged to submit SIP revisions or Title V program revisions to
adopt the three-year deferral. However, EPA recognizes that some States
may not have any, or may have only a few, sources that combust biomass,
and may have adequate information and resources as to the nature of
biogenic emissions from those sources. EPA requests each State to
advise EPA by letter, during the comment period for this proposal, as
to the number and type of biomass sources in the State and what the
State expects to be the number and type of biomass sources over the
next three years, and the State's resource constraints, to the extent
that information is available. EPA solicits comment on how to treat
States in light of this information and any preferences that the States
may express.
3. Interim Guidance To Address Biogenic CO2 Sources Under
PSD Review
    Concurrent with this proposal to defer application of the pre-
construction and Title V permitting programs to biogenic CO2
emissions, EPA is issuing interim guidance to help permitting
authorities establish a basis for concluding that BACT (which is one of
the statutory conditions for receiving a permit) for GHG emissions at
such sources is combustion of biomass fuel by itself. As previously
noted, under the Tailoring Rule, since January 2, 2011, large
stationary sources that become subject to PSD for other pollutants have
had to address GHG such as CO2. Since this proposed
rulemaking to defer biogenic CO2 emissions from PSD
permitting requirements for a three-year period is not planned to be
finalized until the July 2011 timeframe, there will be an interim
period when such biogenic CO2 emissions will still need to
be addressed in making PSD permitting determinations since the deferral
will not yet be in effect.\23\ For example, if a

PSD permit is issued before the planned July 2011 finalization of this
rulemaking that would defer biogenic CO2 emissions from PSD
applicability, then existing regulations might require that the PSD
permit meet the BACT requirement for GHG emissions, including biogenic
CO2 emissions, during the interim period of time.
---------------------------------------------------------------------------

    \23\ As of January 2, 2011, permitting authorities and sources
subject to Title V need to address any applicable requirements for
GHG, such as PSD permit requirements, consistent with the
requirements of 40 CFR part 70 and approved State programs. However,
GHG emissions will not be used to establish Title V applicability
before July 1, 2011.
---------------------------------------------------------------------------

    In its November 2010 GHG permitting guidance, EPA explicitly
recognized that a permitting authority might determine that certain
types of biomass by themselves are BACT for GHG emissions after
considering the environmental, energy, and economic benefits of using
the fuel. EPA's supplemental guidance provides a basis that permitting
authorities may use to support the conclusion, during the interim
period until the biomass deferral rulemaking is finalized, that BACT
for biogenic CO2 emissions from applicable sources is the
combustion of biomass fuel by itself.

E. Requesting Comment

    Given the detail and rationale above, EPA has concluded this
approach to defer application of PSD and Title V permitting
requirements to biogenic CO2 emissions is appropriate.
However, EPA is requesting comment on this proposal, including the
approach, the rationale and other considerations the Agency should take
into account.

IV. Statutory and Executive Order Review

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993),
this action is a ``significant regulatory action'' because it raises
novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the EO.
Accordingly, EPA submitted this action to the Office of Management and
Budget (OMB) for review under EO 12866.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden.
Instead, this action will reduce costs incurred by any facility with
biogenic CO2 emissions, as well as permitting authorities,
relative to the costs that would be incurred if EPA did not revise the
rule.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB has previously approved the
information collection requirements contained in the existing
regulations for PSD (see, e.g., 40 CFR 52.21) and Title V (see 40 CFR
parts 70 and 71) under the provisions of the Paperwork Reduction Act,
44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0003
and OMB control number 2060-0336. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this proposed rule on
small entities, small entity is defined as: (1) A small business as
defined by the Small Business Administration's regulations at 13 CFR
121.201; (2) a small governmental jurisdiction that is a government of
a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise that is independently owned and operated
and is not dominant in its field.
    After considering the economic impacts of this proposed action on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the
primary purpose of the regulatory flexibility analyses is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604.
Thus, an agency may certify that a rule will not have a significant
economic impact on a substantial number of small entities if the rule
relieves regulatory burden, or otherwise has a positive economic effect
on all of the small entities subject to the rule.
    We believe that this proposed rule will relieve the necessary
extensive analysis and corresponding extensive workload requirements
for most affected facilities, including small businesses. As a result,
the program changes provided in this rule are not expected to result in
a significant economic impact on a substantial number of small
entities. In addition, EPA determined that the proposed rulemaking
would not have a significant impact on small governmental
jurisdictions. The EPA has therefore concluded that this proposed
action will not have a significant economic impact on a substantial
number of small entities.
    We continue to be interested in the potential impacts of this
proposed action on small entities and welcome comments on issues
related to such impacts.

D. Unfunded Mandates Reform Act (UMRA)

    This proposed rule does not contain a Federal mandate that may
result in expenditures of $100 million or more for State, local, and
Tribal governments, in the aggregate, or the private sector in any one
year. Only those few States whose permitting authorities do not
implement the Federal PSD and Title V rules by reference in their SIPs
will have a small increase in burden. These States will have to amend
their corresponding SIPs to incorporate the proposed amendments from
today's action, as the deferral that we propose will not otherwise
apply to the PSD and Title V programs. Thus, this rule is not subject
to the requirements of sections 202 or 205 of the UMRA.
    This rule is also not subject to the requirements of section 203 of
UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments. As discussed
earlier, this rule is expected to result in an administrative burden
reduction for all affected permitting authorities and permittees,
including small governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in EO 13132. These proposed amendments would simplify and
reduce the burden on implementing the PSD and Title V operating permit
programs, by deferral of PSD and Title V application requirements to
biogenic CO2 emissions at a facility. Thus, EO 13132 does
not apply to this action.

    In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicits comment on this proposed action
from State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, November 6, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by Tribal officials in the development of regulatory
policies that have Tribal implications.''
    The EPA has concluded that this proposed rule may have Tribal
implications. However, it will neither impose substantial direct
compliance costs on Tribal government, nor preempt Tribal law. There
are no Tribal authorities currently issuing major NSR permits; however,
this may change in the future.
    The EPA specifically solicits additional comment on this proposed
action from Tribal officials.

G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 (62 FR 19885, April 23,
1997) as applying only to those regulatory actions that concern health
or safety risks, such that the analysis required under section 5-501 of
the Executive Order 492 has the potential to influence the regulation.
This action is not subject to Executive Order 13045 and does not
establish an environmental standard intended to mitigate health or
safety risks.

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This proposed rule is not a ``significant energy action'' as
defined in EO 13211 (66 FR 28355, May 22, 2001) because it is not
likely to have a significant adverse effect on the supply,
distribution, or use of energy. Further, we have concluded that this
rule is not likely to have any adverse energy effects because this
action would not create any new requirements for sources in the energy
supply, distribution, or use sectors.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113 (15 U.S.C. 272 note) directs
EPA to use voluntary consensus standards in its regulatory activities
unless to do so would be inconsistent with applicable law or otherwise
impractical. Voluntary consensus standards are technical standards
(e.g., materials specifications, test methods, sampling procedures, and
business practices) that are developed or adopted by voluntary
consensus standards bodies. The NTTAA directs EPA to provide Congress,
through OMB, explanations when the Agency decides not to use available
and applicable voluntary consensus standards.
    This proposed rulemaking does not involve technical standards.
Therefore, EPA is not considering the use of any voluntary consensus
standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes
Federal executive policy on environmental justice. Its main provision
directs Federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the U.S.
    The EPA has determined that this proposed rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment because any impacts that it will have will be global in
nature and will not affect local communities or populations in a manner
that adversely affects the level of protection provided to human health
or the environment.

K. CAA Section 307

    Pursuant to section 307(d)(1)(J) and (V) of the CAA, the
Administrator determines that this action is subject to the provisions
of section 307(d). Section 307(d)(1)(J) provides that the provisions of
section 307(d) apply to the promulgation or revision of regulations
under Part C of Title I of the Clean Air Act, which covers the PSD
program. Section 307(d)(1)(V) provides that the provisions of section
307(d) apply to ``such other actions as the Administrator may
determine.'' The Administrator determines that section 307(d) applies
to the Title V program components of this rule.
    Furthermore, this action has a nationwide scope and effect. Thus,
under section 307(b)(1) of the Act, judicial review of the final action
on this proposal will be available by filing of a petition for review
in the U.S. Court of Appeals for the District of Columbia Circuit.

List of Subjects

40 CFR Part 51

    Environmental protection, Administrative practice and procedure,
Air pollution control, Carbon dioxide, Carbon dioxide equivalents,
Greenhouse gases, Intergovernmental relations, Methane, Nitrous oxide.

40 CFR Part 52

    Environmental protection, Administrative practice and procedure,
Air pollution control, Carbon dioxide, Carbon dioxide equivalents,
Greenhouse gases, Intergovernmental relations, Methane, Nitrous oxide.

40 CFR Part 70

    Environmental protection, Administrative practice and procedure,
Air pollution control, Carbon dioxide, Carbon dioxide equivalents,
Greenhouse gases, Intergovernmental relations, Methane, Nitrous oxide.

40 CFR Part 71

    Environmental protection, Administrative practice and procedure,
Air pollution control, Carbon dioxide, Carbon dioxide equivalents,
Greenhouse gases, Intergovernmental relations, Methane, Nitrous oxide.

    Dated: March 11, 2011.
Lisa P. Jackson,
Administrator.

    For the reasons stated in the preamble, title 40, chapter I, of the
Code of Federal Regulations is proposed to be amended as follows:

PART 51--[AMENDED]

    1. The authority citation for part 51 continues to read as follows:

    Authority: 23 U.S.C. 101; 42 U.S.C. 7401-7671q.

Subpart I--[Amended]

    2. Section 51.166 is amended by revising paragraph (b)(48)(ii)(a)
to read as follows:

Sec.  51.166  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (48) * * *

    (ii) * * *
    (a) Multiplying the mass amount of emissions (tpy), for each of the
six greenhouse gases in the pollutant GHGs, by the gas's associated
global warming potential published at Table A-1 to subpart A of part 98
of this chapter--Global Warming Potentials. For purposes of this
paragraph (b)(48)(ii)(a), prior to [DATE 3 YEARS AFTER THE EFFECTIVE
DATE OF THE FINAL DEFERRAL RULE], the mass of the greenhouse gas carbon
dioxide shall not include carbon dioxide emissions resulting from the
combustion or decomposition of non-fossilized and biodegradable organic
material originating from plants, animals, or micro-organisms
(including products, by-products, residues and waste from agriculture,
forestry and related industries as well as the non-fossilized and
biodegradable organic fractions of industrial and municipal wastes,
including gases and liquids recovered from the decomposition of non-
fossilized and biodegradable organic material).
* * * * *

PART 52--[AMENDED]

    3. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

Subpart A--[Amended]

    4. Section 52.21 is amended by revising paragraph (b)(49)(ii)(a) to
read as follows:

Sec.  52.21  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (49) * * *
    (ii) * * *
    (a) Multiplying the mass amount of emissions (tpy), for each of the
six greenhouse gases in the pollutant GHGs, by the gas's associated
global warming potential published at Table A-1 to subpart A of part 98
of this chapter--Global Warming Potentials. For purposes of this
paragraph, prior to [DATE 3 YEARS AFTER THE EFFECTIVE DATE OF THE FINAL
DEFERRAL RULE], the mass of the greenhouse gas carbon dioxide shall not
include carbon dioxide emissions resulting from the combustion or
decomposition of non-fossilized and biodegradable organic material
originating from plants, animals, or micro-organisms (including
products, by-products, residues and waste from agriculture, forestry
and related industries as well as the non-fossilized and biodegradable
organic fractions of industrial and municipal wastes, including gases
and liquids recovered from the decomposition of non-fossilized and
biodegradable organic material).
* * * * *

PART 70--[AMENDED]

    5. The authority citation for part 70 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

    6. Section 70.2 is amended by revising paragraph (2) of the
definition of ``Subject to regulation'' to read as follows:

Sec.  70.2  Definitions.

* * * * *
    Subject to regulation * * *
    (2) The term tpy CO2 equivalent emissions
(CO2e) shall represent an amount of GHGs emitted, and shall
be computed by multiplying the mass amount of emissions (tpy), for each
of the six greenhouse gases in the pollutant GHGs, by the gas's
associated global warming potential published at Table A-1 to subpart A
of part 98 of this chapter--Global Warming Potentials, and summing the
resultant value for each to compute a tpy CO2e. For purposes
of this paragraph, prior to [DATE 3 YEARS AFTER THE EFFECTIVE DATE OF
THE FINAL DEFERRAL RULE], the mass of the greenhouse gas carbon dioxide
shall not include carbon dioxide emissions resulting from the
combustion or decomposition of non-fossilized and biodegradable organic
material originating from plants, animals, or micro-organisms
(including products, by-products, residues and waste from agriculture,
forestry and related industries as well as the non-fossilized and
biodegradable organic fractions of industrial and municipal wastes,
including gases and liquids recovered from the decomposition of non-
fossilized and biodegradable organic material).
* * * * *

PART 71--[AMENDED]

    7. The authority citation for part 51 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

Subpart A--[Amended]

    8. Section 71.2 is amended by revising paragraph (2) of the
definition of ``Subject to regulation'' to read as follows:

Sec.  71.2  Definitions.

* * * * *
    Subject to regulation * * *
    (2) The term tpy CO2 equivalent emissions