[Federal Register Volume 88, Number 107 (Monday, June 5, 2023)]
[Rules and Regulations]
[Pages 36654-36918]
[FR Doc No: 2023-05744]

Vol. 88

Monday,

No. 107

June 5, 2023

Part II

Environmental Protection Agency

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40 CFR Parts 52, 75, 78, et al.

Federal ``Good Neighbor Plan'' for the 2015 Ozone National Ambient Air
Quality Standards; Final Rule

Federal Register / Vol. 88 , No. 107 / Monday, June 5, 2023 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52, 75, 78, and 97

[EPA-HQ-OAR-2021-0668; FRL-8670-02-OAR]
RIN 2060-AV51

Federal ``Good Neighbor Plan'' for the 2015 Ozone National
Ambient Air Quality Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This action finalizes Federal Implementation Plan (FIP)
requirements to address 23 states' obligations to eliminate significant
contribution to nonattainment, or interference with maintenance, of the
2015 ozone National Ambient Air Quality Standards (NAAQS) in other
states. The U.S. Environmental Protection Agency (EPA) is taking this
action under the ``good neighbor'' or ``interstate transport''
provision of the Clean Air Act (CAA or Act). The Agency is defining the
amount of ozone-precursor emissions (specifically, nitrogen oxides)
that constitute significant contribution to nonattainment and
interference with maintenance from these 23 states. With respect to
fossil fuel-fired power plants in 22 states, this action will prohibit
those emissions by implementing an allowance-based trading program
beginning in the 2023 ozone season. With respect to certain other
industrial stationary sources in 20 states, this action will prohibit
those emissions through emissions limitations and associated
requirements beginning in the 2026 ozone season. These industrial
source types are: reciprocating internal combustion engines in Pipeline
Transportation of Natural Gas; kilns in Cement and Cement Product
Manufacturing; reheat furnaces in Iron and Steel Mills and Ferroalloy
Manufacturing; furnaces in Glass and Glass Product Manufacturing;
boilers in Iron and Steel Mills and Ferroalloy Manufacturing, Metal Ore
Mining, Basic Chemical Manufacturing, Petroleum and Coal Products
Manufacturing, and Pulp, Paper, and Paperboard Mills; and combustors
and incinerators in Solid Waste Combustors and Incinerators.

DATES: This final rule is effective on August 4, 2023.

ADDRESSES: The EPA has established a docket for this rulemaking under
Docket ID No. EPA-HQ-OAR-2021-0668. All documents in the docket are
listed in the https://www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., Confidential
Business Information 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 at
https://www.regulations.gov or in hard copy at the U.S. Environmental
Protection Agency, EPA Docket Center, William Jefferson Clinton West
Building, Room 3334, 1301 Constitution Ave. NW, Washington, DC. The
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the Office
of Air and Radiation Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Ms. Elizabeth Selbst, Air Quality
Policy Division, Office of Air Quality Planning and Standards (C539-
01), Environmental Protection Agency, 109 TW Alexander Drive, Research
Triangle Park, NC 27711; telephone number:<PHONE_NUMBER>; email
address: [email protected].

SUPPLEMENTARY INFORMATION:

Preamble Glossary of Terms and Abbreviations

    The following are abbreviations of terms used in the preamble.

2016v1 2016 Version 1 Emissions Modeling Platform
2016v2 2016 Version 2 Emissions Modeling Platform
4-Step Framework 4-Step Interstate Transport Framework
ABC Associated Builders and Contractors
ACS American Community Survey
ACT Alternative Control Techniques
AEO Annual Energy Outlook
AQAT Air Quality Assessment Tool
AQS Air Quality System
BACT Best Available Control Technology
BART Best Available Retrofit Technology
BOF Basic Oxygen Furnace
BPT Benefit Per Ton
C1C2 Category 1 and Category 2
C3 Category 3
CAA or Act Clean Air Act
CAIR Clean Air Interstate Rule
CBI Confidential Business Information
CCR Coal Combustion Residual
CDC Centers for Disease Control and Prevention
CDX Central Data Exchange
CEDRI Compliance and Emissions Data Reporting Interface
CEMS Continuous Emissions Monitoring Systems
CES Clean Energy Standards
CFB Circulating Fluidized Bed Units
CHP Combined Heat and Power
CMDB Control Measures Database
CMV Commercial Marine Vehicle
CoST Control Strategy Tool
CPT Cost Per Ton
CRA Congressional Review Act
CSAPR Cross-State Air Pollution Rule
DAHS Data Acquisition and Handling System
DOE Department of Energy
EAF Electric Arc Furnace
EGU Electric Generating Unit
EIA U.S. Energy Information Agency
EIS Emissions Inventory System
EISA Energy Independence and Security Act
ELG Effluent Limitation Guidelines
E.O. Executive Order
EPA or the Agency United States Environmental Protection Agency
ERT Electronic Reporting Tool
FERC Federal Energy Regulatory Commission
FFS Findings of Failure to Submit
FIP Federal Implementation Plan
GIS Geographic Information System
g/hp-hr grams per horsepower per hour
HDGHG Greenhouse Gas Emissions and Fuel Efficiency Standards for
Medium- and Heavy-Duty Engines and Vehicles
HEDD High Electricity Demand Days
ICI Industrial, Commercial, and Institutional
I/M Inspection and Maintenance
IPM Integrated Planning Model
IRA Inflation Reduction Act
LAER Lowest Achievable Emission Rate
LDC Local Distribution Company
LME Low Mass Emissions
LNB Low-NOX Burners
MATS Mercury and Air Toxics Standards
MCM Menu of Control Measures
MDA8 Maximum Daily Average 8-Hour
MJO Multi-Jurisdictional Organization
MOU Memorandum of Understanding
MOVES Motor Vehicle Emissions Simulator
MSAT2 Mobile Source Air Toxics Rule
MWC Municipal Waste Combustor
NAAQS National Ambient Air Quality Standards
NACAA National Association of Clean Air Agencies
NAICS North American Industry Classification System
NEEDS National Electric Energy Data System
NEI National Emissions Inventory
NERC North American Electric Reliability Corporation
NESHAP National Emissions Standards for Hazardous Air Pollutants
NMB Normalized Mean Bias
NME Normalized Mean Error
No SISNOSE No Significant Economic Impact on a Substantial Number of
Small Entities
Non-EGU Non-Electric Generating Unit
NODA Notice of Data Availability
NOX Nitrogen Oxides
NREL National Renewable Energy Lab
NSCR Non-Selective Catalytic Reduction
NSPS New Source Performance Standard
NSR New Source Review
NTTAA National Technology Transfer and Advancement Act
OFA Over-Fire Air
OMB United States Office of Management and Budget

OSAT/APCA Ozone Source Apportionment Technology/Anthropogenic
Precursor Culpability Analysis
OTC Ozone Transport Commission
OTR Ozone Transport Region
OTSA Oklahoma Tribal Statistical Area
PDF Portable Document Format
PEMS Predictive Emissions Monitoring Systems
PM2.5 Fine Particulate Matter
ppb parts per billion
ppm parts per million
ppmv parts per million by volume
ppmvd parts per million by volume, dry
PRA Paperwork Reduction Act
PSD Prevention of Significant Deterioration
PTE Potential to Emit
RACT Reasonably Available Control Technology
RATA Relative Accuracy Test Audit
RCF Relative Contribution Factor
RFA Regulatory Flexibility Act
RICE Reciprocating Internal Combustion Engines
ROP Rate of Progress
RPS Renewable Portfolio Standards
RRF Relative Response Factor
RTC Response to Comments
RTO Regional Transmission Organization
SAFETEA Safe, Accountable, Flexible, Efficient, Transportation
Equity Act
SCC Source Classification Code
SCR Selective Catalytic Reduction
SIL Significant Impact Level
SIP State Implementation Plan
SMOKE Sparse Matrix Operator Kernel Emissions
SNCR Selective Non-Catalytic Reduction
SO2 Sulfur Dioxide
tpd ton per day
TAS Treatment as State
TSD Technical Support Document
UMRA Unfunded Mandates Reform Act
VMT Vehicle Miles Traveled
VOCs Volatile Organic Compounds
WRAP Western Regional Air Partnership
WRF Weather Research and Forecasting

Table of Contents

I. Executive Summary
    A. Purpose of the Regulatory Action
    1. Emissions Limitations for EGUs Established by the Final Rule
    2. Emissions Limitations for Industrial Stationary Point Sources
Established by the Final Rule
    B. Summary of the Regulatory Framework of the Rule
    C. Costs and Benefits
II. General Information
    A. Does this action apply to me?
    B. What action is the Agency taking?
    C. What is the Agency's legal authority for taking this action?
    D. What actions has the EPA previously issued to address
regional ozone transport?
III. Air Quality Issues Addressed and Overall Rule Approach
    A. The Interstate Ozone Transport Air Quality Challenge
    1. Nature of Ozone and the Ozone NAAQS
    2. Ozone Transport
    3. Health and Environmental Effects
    B. Final Rule Approach
    1. The 4-Step Interstate Transport Framework
    a. Step 1 Approach
    b. Step 2 Approach
    c. Step 3 Approach
    d. Step 4 Approach
    2. FIP Authority for Each State Covered by the Rule
    C. Other CAA Authorities for This Action
    1. Withdrawal of Proposed Error Correction for Delaware
    2. Application of Rule in Indian Country and Necessary or
Appropriate Finding
    a. Indian Country Subject to Tribal Jurisdiction
    b. Indian Country Subject to State Implementation Planning
Authority
    D. Severability
IV. Analyzing Downwind Air Quality Problems and Contributions From
Upwind States
    A. Selection of Analytic Years for Evaluating Ozone Transport
Contributions to Downwind Air Quality Problems
    B. Overview of Air Quality Modeling Platform
    C. Emissions Inventories
    1. Foundation Emissions Inventory Data Sets
    2. Development of Emissions Inventories for EGUs
    a. EGU Emissions Inventories Supporting This Rule
    b. Impact of the Inflation Reduction Act on EGU Emissions
    3. Development of Emissions Inventories for Stationary
Industrial Point Sources
    4. Development of Emissions Inventories for Onroad Mobile
Sources
    5. Development of Emissions Inventories for Commercial Marine
Vessels
    6. Development of Emissions Inventories for Other Nonroad Mobile
Sources
    7. Development of Emissions Inventories for Nonpoint Sources
    D. Air Quality Modeling To Identify Nonattainment and
Maintenance Receptors
    E. Methodology for Projecting Future Year Ozone Design Values
    F. Pollutant Transport From Upwind States
    1. Air Quality Modeling To Quantify Upwind State Ozone
Contributions
    2. Application of Ozone Contribution Screening Threshold
    a. States That Contribute Below the Screening Threshold
    b. States That Contribute Above the Screening Threshold
    G. Treatment of Certain Monitoring Sites in California and
Implications for Oregon's Good Neighbor Obligations for the 2015
Ozone NAAQS
V. Quantifying Upwind-State NOX Emissions Reduction
Potential To Reduce Interstate Ozone Transport for the 2015 Ozone
NAAQS
    A. The Multi-Factor Test for Determining Significant
Contribution
    B. Identifying Control Stringency Levels
    1. EGU NOX Mitigation Strategies
    a. Optimizing Existing SCRs
    b. Installing State-of-the-Art NOX Combustion
Controls
    c. Optimizing Already Operating SNCRs or Turning on Idled
Existing SNCRs
    d. Installing New SNCRs
    e. Installing New SCRs
    f. Generation Shifting
    g. Other EGU Mitigation Measures
    2. Non-EGU or Stationary Industrial Source NOX
Mitigation Strategies
    3. Other Stationary Sources NOX Mitigation Strategies
    a. Municipal Solid Waste Units
    b. Electric Generating Units Less Than or Equal to 25 MW
    c. Cogeneration Units
    4. Mobile Source NOX Mitigation Strategies
    C. Control Stringencies Represented by Cost Threshold ($ per
ton) and Corresponding Emissions Reductions
    1. EGU Emissions Reduction Potential by Cost Threshold
    2. Non-EGU or Industrial Source Emissions Reduction Potential
    D. Assessing Cost, EGU and Industrial Source NOX
Reductions, and Air Quality
    1. EGU Assessment
    2. Stationary Industrial Sources Assessment
    3. Combined EGU and Non-EGU Assessment
    4. Over-Control Analysis
VI. Implementation of Emissions Reductions
    A. NOX Reduction Implementation Schedule
    1. 2023-2025: EGU NOX Reductions Beginning in 2023
    2. 2026 and Later Years: EGU and Stationary Industrial Source
NOX Reductions Beginning in 2026
    a. EGU Schedule for 2026 and Later Years
    b. Non-EGU or Industrial Source Schedule for 2026 and Later
Years
    B. Regulatory Requirements for EGUs
    1. Trading Program Background and Overview of Revisions
    a. Current CSAPR Trading Program Design Elements and Identified
Concerns
    b. Enhancements To Maintain Selected Control Stringency Over
Time
    i. Revised Emissions Budget-Setting Process
    ii. Allowance Bank Recalibration
    c. Enhancements To Improve Emissions Performance at Individual
Units
    i. Unit-Specific Backstop Daily Emissions Rates
    ii. Unit-Specific Emissions Limitations Contingent on Assurance
Level Exceedances
    d. Responses to General Comments on the Revisions to the Group 3
Trading Program
    2. Expansion of Geographic Scope
    3. Applicability and Tentative Identification of Newly Affected
Units
    4. State Emissions Budgets
    a. Methodology for Determining Preset State Emissions Budgets
for the 2023 through 2029 Control Periods
    b. Methodology for Determining Dynamic State Emissions Budgets
for Control Periods in 2026 Onwards
    c. Final Preset State Emissions Budgets
    5. Variability Limits and Assurance Levels
    6. Annual Recalibration of Allowance Bank
    7. Unit-Specific Backstop Daily Emissions Rates
    8. Unit-Specific Emissions Limitations Contingent on Assurance
Level Exceedances

    9. Unit-Level Allowance Allocation and Recordation Procedures
    a. Set-Asides of Portions of State Emissions Budgets
    b. Allocations to Existing Units, Including Units That Cease
Operation
    c. Allocations From Portions of State Emissions Budgets Set
Aside for New Units
    d. Incorrectly Allocated Allowances
    10. Monitoring and Reporting Requirements
    a. Monitor Certification Deadlines
    b. Additional Recordkeeping and Reporting Requirements
    11. Designated Representative Requirements
    12. Transitional Provisions
    a. Prorating Emissions Budgets, Assurance Levels, and Unit-Level
Allowance Allocations in the Event of an Effective Date After May 1,
2023
    b. Creation of Additional Group 3 Allowance Bank for 2023
Control Period
    c. Recall of Group 2 Allowances for Control Periods After 2022
    13. Conforming Revisions to Regulations for Other CSAPR Trading
Programs
    C. Regulatory Requirements for Stationary Industrial Sources
    1. Pipeline Transportation of Natural Gas
    2. Cement and Concrete Product Manufacturing
    3. Iron and Steel Mills and Ferroalloy Manufacturing
    4. Glass and Glass Product Manufacturing
    5. Boilers at Basic Chemical Manufacturing, Petroleum and Coal
Products Manufacturing, Pulp, Paper, and Paperboard Mills, Iron and
Steel and Ferroalloys Manufacturing, and Metal Ore Mining Facilities
    a. Coal-fired Industrial Boilers
    b. Oil-fired Industrial Boilers
    c. Natural gas-fired Industrial Boilers
    6. Municipal Waste Combustors
    D. Submitting a SIP
    1. SIP Option To Modify Allocations for 2024 under EGU Trading
Program
    2. SIP Option To Modify Allocations for 2025 and Beyond Under
EGU Trading Program
    3. SIP Option To Replace the Federal EGU Trading Program With an
Integrated State EGU Trading Program
    4. SIP Revisions That Do Not Use the New Trading Program
    5. SIP Revision Requirements for Non-EGU or Industrial Source
Control Requirements
    E. Title V Permitting
    1. Title V Permitting Considerations for EGUs
    2. Title V Permitting Considerations for Industrial Stationary
Sources
    F. Relationship to Other Emissions Trading and Ozone Transport
Programs
    1. NOX SIP Call
    2. Acid Rain Program
    3. Other CSAPR Trading Programs
VII. Environmental Justice Analytical Considerations and Stakeholder
Outreach and Engagement
    A. Introduction
    B. Analytical Considerations
    C. Outreach and Engagement
VIII. Costs, Benefits, and Other Impacts of the Final Rule
IX. Summary of Changes to the Regulatory Text for the Federal
Implementation Plans and Trading Programs for EGUs
    A. Amendments to FIP Provisions in 40 CFR Part 52
    B. Amendments to Group 3 Trading Program and Related Regulations
    C. Transitional Provisions
    D. Clarifications and Conforming Revisions
X. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    1. Information Collection Request for EGUs
    2. Information Collection Request for Non-EGUs
    C. Regulatory Flexibility Act (RFA)
    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 Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act
    L. Determinations Under CAA Section 307(b)(1) and (d)

I. Executive Summary

    This final rule resolves the interstate transport obligations of 23
states under CAA section 110(a)(2)(D)(i)(I), referred to as the ``good
neighbor provision'' or the ``interstate transport provision'' of the
Act, for the 2015 ozone NAAQS. On October 1, 2015, the EPA revised the
primary and secondary 8-hour standards for ozone to 70 parts per
billion (ppb).\1\ States were required to submit to EPA ozone
infrastructure State Implementation Plan (SIP) revisions to fulfill
interstate transport obligations for the 2015 ozone NAAQS by October 1,
2018. The EPA proposed the subject rule to address outstanding
interstate ozone transport obligations for the 2015 ozone NAAQS in the
Federal Register on April 6, 2022 (87 FR 20036).
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    \1\ See 80 FR 65291 (October 26, 2015).
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    The EPA is making a finding that interstate transport of ozone
precursor emissions from 23 upwind states (Alabama, Arkansas,
California, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio,
Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia, and
Wisconsin) is significantly contributing to nonattainment or
interfering with maintenance of the 2015 ozone NAAQS in downwind
states, based on projected ozone precursor emissions in the 2023 ozone
season. The EPA is issuing FIP requirements to eliminate interstate
transport of ozone precursor emissions from these 23 states that
significantly contributes to nonattainment or interferes with
maintenance of the NAAQS in downwind states. The EPA is not finalizing
its proposed error correction for Delaware's ozone transport SIP, and
we are deferring final action at this time on the proposed FIPs for
Tennessee and Wyoming pending further review of the updated air quality
and contribution modeling and analysis developed for this final action.
As discussed in section III of this document, the EPA's updated
analysis of 2023 suggests that the states of Arizona, Iowa, Kansas, and
New Mexico may be significantly contributing to one or more
nonattainment or maintenance receptors. The EPA is not making any final
determinations with respect to these states in this action but intends
to address these states, along with Tennessee and Wyoming, in a
subsequent action or actions.
    The EPA is finalizing FIP requirements for 21 states for which the
Agency has, in a separate action, disapproved (or partially
disapproved) ozone transport SIP revisions that were submitted for the
2015 ozone NAAQS: Alabama, Arkansas, California, Illinois, Indiana,
Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi,
Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Texas, Utah,
West Virginia, and Wisconsin. See 88 FR 9336. In this final rule, the
EPA is issuing FIPs for two states--Pennsylvania and Virginia--for
which the EPA issued Findings of Failure to Submit for 2015 ozone NAAQS
transport SIPs. See 84 FR 66612 (December 5, 2019). Under CAA section
301(d)(4), the EPA is extending FIP requirements to apply in Indian
country located within the upwind geography of the final rule,
including Indian reservation lands and other areas of Indian country
over which the EPA or a tribe has demonstrated that a tribe has
jurisdiction.\2\
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    \2\ In general, specific tribal names or reservations are not
identified separately in this final rule except as needed. See
section III.C.2 of this document for further discussion about the
application of this rule in Indian Country.
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    This final rule defines ozone season nitrogen oxides
(NOX) emissions

performance obligations for Electric Generating Unit (EGU) sources and
fulfills those obligations by implementing an allowance-based ozone
season trading program beginning in 2023. This rule also establishes
emissions limitations beginning in 2026 for certain other industrial
stationary sources (referred to generally as ``non-Electric Generating
Units'' (non-EGUs)). Taken together, these regulatory requirements will
fully eliminate the amount of emissions that constitute the covered
states' significant contribution to nonattainment and interference with
maintenance in downwind states for purposes of the 2015 ozone NAAQS.
    This final rule implements the necessary emissions reductions as
follows. Under the FIP requirements, EGUs in 22 states (Alabama,
Arkansas, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio,
Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia, and
Wisconsin) are required to participate in a revised version of the
Cross-State Air Pollution Rule (CSAPR) NOX Ozone Season
Group 3 Trading Program that was previously established in the Revised
CSAPR Update.\3\ In addition to reflecting emissions reductions based
on the Agency's determination of the necessary control stringency in
this rule, the revised trading program includes several enhancements to
the program's design to better ensure achievement of the selected
control stringency on all days of the ozone season and over time. For
12 states already required to participate in the CSAPR NOX
Ozone Season Group 3 Trading Program (Illinois, Indiana, Kentucky,
Louisiana, Maryland, Michigan, New Jersey, New York, Ohio,
Pennsylvania, Virginia, and West Virginia) under the Revised CSAPR
Update (with respect to the 2008 ozone NAAQS), the FIPs are amended by
the revisions to the Group 3 trading program regulations. For seven
states currently covered by the CSAPR NOX Ozone Season Group
2 Trading Program under SIPs or FIPs, the EPA is issuing new FIPs for
two states (Alabama and Missouri) and amending existing FIPs for five
states (Arkansas, Mississippi, Oklahoma, Texas, and Wisconsin) to
transition EGU sources in these states from the Group 2 program to the
revised Group 3 trading program, beginning with the 2023 ozone season.
The EPA is issuing new FIPs for three states not currently covered by
any CSAPR NOX ozone season trading program: Minnesota,
Nevada, and Utah.
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    \3\ As explained in section V.C.1 of this document, the EPA is
making a finding that EGU sources within the State of California are
sufficiently controlled such that no further emissions reductions
are needed from them to eliminate significant contribution to
downwind states.
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    This rulemaking requires emissions reductions in the selected
control stringency to be achieved as expeditiously as practicable and,
to the extent possible, by the next applicable nonattainment dates for
downwind areas for the 2015 ozone NAAQS. Thus, initial emissions
reductions from EGUs will be required beginning in the 2023 ozone
season and prior to the August 3, 2024, attainment date for areas
classified as Moderate nonattainment for the 2015 ozone NAAQS.
    The remaining emissions reduction obligations will be phased in as
soon as possible thereafter. Substantial additional reductions from
potential new post-combustion control installations at EGUs as well as
from installation of new pollution controls at non-EGUs, also referred
to in this action as industrial sources, will phase in beginning in the
2026 ozone season, associated with the August 3, 2027, attainment date
for areas classified as Serious nonattainment for the 2015 ozone NAAQS.
The EPA had proposed to require all emissions reductions to eliminate
significant contribution to be in place by the 2026 ozone season. While
we continue to view 2026 as the appropriate analytic year for purposes
of applying the 4-step interstate transport framework, as discussed in
section V.D.4 and VI.A.2 of this document, the final rule will allow
individual facilities limited additional time to fully implement the
required emissions reductions where the owner or operator demonstrates
to the EPA's satisfaction that more rapid compliance is not possible.
For EGUs, the emissions trading program budget stringency associated
with retrofit of post-combustion controls will be phased in over two
ozone seasons (2026-2027). For industrial sources, this final rule
provides a process for individual facilities to seek a one year
extension, with the possibility of up to two additional years, based on
a specific showing of necessity.
    The EGU emissions reductions are based on the feasibility of
control installation for EGUs in 19 states that remain linked to
downwind nonattainment and maintenance receptors in 2026. These 19
states are: Arkansas, Illinois, Indiana, Kentucky, Louisiana, Maryland,
Michigan, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio,
Oklahoma, Pennsylvania, Texas, Utah, Virginia, and West Virginia. The
emissions reductions required for EGUs in these states are based
primarily on the potential retrofit of additional post-combustion
controls for NOX on most coal-fired EGUs and a portion of
oil/gas-fired EGUs that are currently lacking such controls.
    The EPA is finalizing, with some modifications from proposal in
response to comments, certain additional features in the allowance-
based trading program approach for EGUs, including dynamic adjustments
of the emissions budgets and recalibration of the allowance bank over
time as well as backstop daily emissions rate limits for large coal-
fired units. The purpose of these enhancements is to better ensure that
the emissions control stringency the EPA found necessary to eliminate
significant contribution at Step 3 of the 4-step interstate transport
framework is maintained over time in Step 4 implementation and is
durable to changes in the power sector. These enhancements ensure the
elimination of significant contribution is maintained both in terms of
geographical distribution (by limiting the degree to which individual
sources can avoid making emissions reductions) and in terms of temporal
distribution (by better ensuring emissions reductions are maintained
throughout each ozone season, year over year). As we further discuss in
section V.D of this document, these changes do not alter the stringency
of the emissions trading program over time. Rather, they ensure that
the trading program (as the method of implementation at Step 4) remains
aligned with the determinations made at Step 3. These enhancements are
further discussed in section VI.B of this document.
    The EPA is making a finding that NOX emissions from
certain non-EGU sources are significantly contributing to nonattainment
or interfering with maintenance of the 2015 ozone NAAQS and that cost-
effective controls for NOX emissions reductions are
available in certain industrial source categories that would result in
meaningful air quality improvements in downwind receptors. The EPA is
establishing emissions limitations beginning in 2026 for non-EGU
sources located within 20 states: Arkansas, California, Illinois,
Indiana, Kentucky, Louisiana, Maryland, Michigan, Mississippi,
Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania,
Texas, Utah, Virginia, and West Virginia. The final rule establishes
NOX emissions limitations during the ozone season for the
following unit types for sources in

non-EGU industries: \4\ reciprocating internal combustion engines in
Pipeline Transportation of Natural Gas; kilns in Cement and Cement
Product Manufacturing; reheat furnaces in Iron and Steel Mills and
Ferroalloy Manufacturing; furnaces in Glass and Glass Product
Manufacturing; boilers in Iron and Steel Mills and Ferroalloy
Manufacturing, Metal Ore Mining, Basic Chemical Manufacturing,
Petroleum and Coal Products Manufacturing, and Pulp, Paper, and
Paperboard Mills; and combustors and incinerators in Solid Waste
Combustors and Incinerators.
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    \4\ We use the terms ``emissions limitation'' and ``emissions
limit'' to refer to both numeric emissions limitations and control
technology requirements that specify levels of emissions reductions
to be achieved.
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A. Purpose of the Regulatory Action

    The purpose of this rulemaking is to protect public health and the
environment by reducing interstate transport of certain air pollutants
that significantly contribute to nonattainment, or interfere with
maintenance, of the 2015 ozone NAAQS in downwind states. Ground-level
ozone has detrimental effects on human health as well as vegetation and
ecosystems. Acute and chronic exposure to ozone in humans is associated
with premature mortality and certain morbidity effects, such as asthma
exacerbation. Ozone exposure can also negatively impact ecosystems by
limiting tree growth, causing foliar injury, and changing ecosystem
community composition. Section III of this document provides additional
evidence of the harmful effects of ozone exposure on human health and
the environment. Studies have established that ozone air pollution can
be transported over hundreds of miles, with elevated ground-level ozone
concentrations occurring in rural and metropolitan areas.5 6
Assessments of ozone control approaches have concluded that control
strategies targeting reduction of NOX emissions are an
effective method to reduce regional-scale ozone transport.\7\
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    \5\ Bergin, M.S. et al. (2007) Regional air quality: local and
interstate impacts of NOX and SO2 emissions on
ozone and fine particulate matter in the eastern United States.
Environmental Sci & Tech. 41: 4677-4689.
    \6\ Liao, K. et al. (2013) Impacts of interstate transport of
pollutants on high ozone events over the Mid-Atlantic United States.
Atmospheric Environment 84, 100-112.
    \7\ See 82 FR 51238, 51248 (November 3, 2017) [citing 76 FR
48208, 48222 (August 8, 2011)] and 63 FR 57381 (October 27, 1998).
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    CAA section 110(a)(2)(D)(i)(I) requires states to prohibit
emissions that will contribute significantly to nonattainment or
interfere with maintenance in any other state with respect to any
primary or secondary NAAQS.\8\ Within 3 years of the EPA promulgating a
new or revised NAAQS, all states are required to provide SIP
submittals, often referred to as ``infrastructure SIPs,'' addressing
certain requirements, including the good neighbor provision. See CAA
section 110(a)(1) and (2). The EPA must either approve or disapprove
such submittals or make a finding that a state has failed to submit a
complete SIP revision. As with any other type of SIP under the Act,
when the EPA disapproves an interstate transport SIP or finds that a
state failed to submit an interstate transport SIP, the CAA requires
the EPA to issue a FIP to directly implement the measures necessary to
eliminate significant contribution under the good neighbor provision.
See generally CAA section 110(k) and 110(c). As such, in this rule, the
EPA is finalizing requirements to fully address good neighbor
obligations for the covered states for the 2015 ozone NAAQS under its
authority to promulgate FIPs under CAA section 110(c). By eliminating
significant contribution from these upwind states, this rule will make
substantial and meaningful improvements in air quality by reducing
ozone levels at the identified downwind receptors as well as many other
areas of the country. At any time after the effective date of this
rule, states may submit a Good Neighbor SIP to replace the FIP
requirements contained in this rule, subject to EPA approval under CAA
section 110(a).
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    \8\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
---------------------------------------------------------------------------

    The EPA conducted air quality modeling for the 2023 and 2026
analytic years to identify (1) the downwind areas identified as
``receptors'' (which are associated with monitoring sites) that are
expected to have trouble attaining or maintaining the 2015 ozone NAAQS
in the future and (2) the contribution of ozone transport from upwind
states to the downwind air quality problems. We use the term
``downwind'' to describe those states or areas where a receptor is
located, and we use the term ``upwind'' to describe states whose
emissions are linked to one or more receptors. States may be both
downwind and upwind depending on the receptor or linkage in question.
Section IV of this document provides a full description of the results
of the EPA's updated air quality modeling and relevant analyses for the
rulemaking, including a discussion of how updates to the modeling and
air quality analysis following the proposed rule have resulted in some
modest changes in the overall geography of the final rule. Based on the
EPA's air quality analysis, the 23 upwind states covered in this action
are linked above the 1 percent of the NAAQS threshold to downwind air
quality problems in downwind states. The EPA intends to expeditiously
review the updated air quality modeling and related analyses to address
potential good neighbor requirements of six additional states--Arizona,
Iowa, Kansas, New Mexico, Tennessee, and Wyoming--in a subsequent
action. The EPA had previously approved 2015 ozone transport SIPs
submitted by Oregon and Delaware, but in the proposed FIP action the
EPA found these states potentially to be linked in the modeling
supporting our proposal. We proposed to issue an error correction for
our prior approval of Delaware's 2015 ozone transport SIP; however, in
this final rule, the EPA is withdrawing the proposed error correction
and the proposed FIP for Delaware, because our updated modeling for
this final rule confirms that Delaware is not linked above the 1
percent of NAAQS threshold (see section III.C.1 of this document for
additional information). The EPA is deferring finalizing a finding at
this time for Oregon (see section IV.G of this document for additional
information).
1. Emissions Limitations for EGUs Established by the Final Rule
    In this rule, the EPA is issuing FIP requirements that apply the
provisions of the CSAPR NOX Ozone Season Group 3 Trading
Program as revised in the rule to EGU sources within the borders of the
following 22 states: Alabama, Arkansas, Illinois, Indiana, Kentucky,
Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri,
Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas,
Utah, Virginia, West Virginia, and Wisconsin. Implementation of the
revised trading program provisions begins in the 2023 ozone season.
    The EPA is expanding the CSAPR NOX Ozone Season Group 3
Trading Program beginning in the 2023 ozone season. Specifically, the
FIPs require power plants within the borders of the 22 states listed in
the previous paragraph to participate in an expanded and revised
version of the CSAPR NOX Ozone Season Group 3 Trading
Program created by the Revised CSAPR Update. Affected EGUs within the
borders of the following 12 states currently participating in the Group
3 Trading Program under existing FIPs remain in the program, with
revised provisions beginning in the 2023 ozone season, under this rule:
Illinois, Indiana, Kentucky, Louisiana, Maryland,

Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West
Virginia. The FIPs also require affected EGUs within the borders of the
following seven states currently covered by the CSAPR NOX
Ozone Season Group 2 Trading Program (the ``Group 2 trading program'')
under existing FIPs or existing SIPs to transition from the Group 2
program to the revised Group 3 trading program beginning with the 2023
control period: Alabama, Arkansas, Mississippi, Missouri, Oklahoma,
Texas, and Wisconsin.\9\ Finally, the EPA is issuing new FIPs for EGUs
within the borders of three states not currently covered by any
existing CSAPR trading program for seasonal NOX emissions:
Minnesota, Nevada, and Utah. Sources in these states will enter the
Group 3 trading program in the 2023 control period following the
effective date of the final rule.\10\ Refer to section VI.B of this
document for details on EGU regulatory requirements.
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    \9\ Five of these seven states (Arkansas, Mississippi, Oklahoma,
Texas, and Wisconsin) currently participate in the Federal Group 2
trading program pursuant to the FIPs finalized in the CSAPR Update.
The FIPs required under this rule amend the existing FIPs for these
states. The other two states (Alabama and Missouri) have already
replaced the FIPs finalized in the CSAPR Update with approved SIP
revisions that require their EGUs to participate in state Group 2
trading programs integrated with the Federal Group 2 trading
program, so the FIPs required in this action constitute new FIPs for
these states. The EPA will cease implementation of the state Group 2
trading programs included in the two states' SIPs on the effective
date of this rule.
    \10\ Three states, Kansas, Iowa, and Tennessee, will remain in
the Group 2 Trading Program.
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2. Emissions Limitations for Industrial Stationary Point Sources
Established by the Final Rule
    The EPA is issuing FIP requirements that include new NOX
emissions limitations for industrial or non-EGU sources in 20 states,
with sources expected to demonstrate compliance no later than 2026. The
EPA is requiring emissions reductions from non-EGU sources to address
interstate transport obligations for the 2015 ozone NAAQS for the
following 20 states: Arkansas, California, Illinois, Indiana, Kentucky,
Louisiana, Maryland, Michigan, Mississippi, Missouri, Nevada, New
Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Virginia
and West Virginia.
    The EPA is establishing emissions limitations for the following
unit types in non-EGU industries: reciprocating internal combustion
engines in Pipeline Transportation of Natural Gas; kilns in Cement and
Cement Product Manufacturing; reheat furnaces in Iron and Steel Mills
and Ferroalloy Manufacturing; furnaces in Glass and Glass Product
Manufacturing; boilers in Iron and Steel Mills and Ferroalloy
Manufacturing, Metal Ore Mining, Basic Chemical Manufacturing,
Petroleum and Coal Products Manufacturing, and Pulp, Paper, and
Paperboard Mills; and combustors and incinerators in Solid Waste
Combustors and Incinerators. Refer to Table II.A-1 for a list of North
American Industry Classification System (NAICS) codes for each entity
included for regulation under this rule.

B. Summary of the Regulatory Framework of the Rule

    The EPA is applying the 4-step interstate transport framework
developed and used in CSAPR, the CSAPR Update, the Revised CSAPR
Update, and other previous ozone transport rules under the authority
provided in CAA section 110(a)(2)(D)(i)(I). The 4-step interstate
transport framework provides a stepwise method for the EPA to define
and implement good neighbor obligations for the 2015 ozone NAAQS. The
four steps are as follows: (Step 1) identifying downwind receptors that
are expected to have problems attaining or maintaining the NAAQS; (Step
2) determining which upwind states contribute to these identified
problems in amounts sufficient to ``link'' them to the downwind air
quality problems (i.e., in this rule as in prior transport rules
beginning with CSAPR in 2011, above a contribution threshold of 1
percent of the NAAQS); (Step 3) for states linked to downwind air
quality problems, identifying upwind emissions that significantly
contribute to downwind nonattainment or interfere with downwind
maintenance of the NAAQS through a multifactor analysis; and (Step 4)
for states that are found to have emissions that significantly
contribute to nonattainment or interfere with maintenance of the NAAQS
in downwind areas, implementing the necessary emissions reductions
through enforceable measures. The remainder of this section provides a
general overview of the EPA's application of the 4-step framework as it
applies to the provisions of the rule; additional details regarding the
EPA's approach are found in section III of this document.
    To apply the first step of the 4-step framework to the 2015 ozone
NAAQS, the EPA performed air quality modeling to project ozone
concentrations at air quality monitoring sites in 2023 and 2026.\11\
The EPA evaluated projected ozone concentrations for the 2023 analytic
year at individual monitoring sites and considered current ozone
monitoring data at these sites to identify receptors that are
anticipated to have problems attaining or maintaining the 2015 ozone
NAAQS. This analysis of projected ozone concentrations was then
repeated for 2026.
---------------------------------------------------------------------------

    \11\ These 2 analytic years are the last full ozone seasons
before, and thus align with, upcoming attainment dates for the 2015
ozone NAAQS: August 3, 2024, for areas classified as Moderate
nonattainment, and August 3, 2027, for areas classified as Serious
nonattainment. See 83 FR 25776.
---------------------------------------------------------------------------

    To apply the second step of the framework, the EPA used air quality
modeling to quantify the contributions from upwind states to ozone
concentrations in 2023 and 2026 at downwind receptors.\12\ Once
quantified, the EPA then evaluated these contributions relative to a
screening threshold of 1 percent of the NAAQS (i.e., 0.70 ppb).\13\
States with contributions that equaled or exceeded 1 percent of the
NAAQS were identified as warranting further analysis at Step 3 of the
4-step framework to determine if the upwind state significantly
contributes to nonattainment or interference with maintenance in a
downwind state. States with contributions below 1 percent of the NAAQS
were considered not to significantly contribute to nonattainment or
interfere with maintenance of the NAAQS in downwind states.
---------------------------------------------------------------------------

    \12\ The EPA performed air quality modeling for 2032 in the
proposed rulemaking, but did not perform contribution modeling for
2032 since contribution data for this year were not needed to
identify upwind states to be analyzed in Step 3. The modeling of
2032 done at proposal using the 2016v2 platform does not constitute
or represent any final agency determinations respecting air quality
conditions or regulatory judgments with respect to good neighbor
obligations or any other CAA requirements.
    \13\ See section IV.F of this document for explanation of EPA's
use of the 1 percent of the NAAQS threshold in the Step 2 analysis.
---------------------------------------------------------------------------

    Based on the EPA's most recent air quality modeling and
contribution analysis using 2023 as the analytic year, the EPA finds
that the following 23 states have contributions that equal or exceed 1
percent of the 2015 ozone NAAQS, and, thereby, warrant further analysis
of significant contribution to nonattainment or interference with
maintenance of the NAAQS: Alabama, Arkansas, California, Illinois,
Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota,
Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma,
Pennsylvania, Texas, Utah, Virginia, West Virginia, and Wisconsin.
    There are locations in California to which Oregon contributes
greater than 1 percent of the NAAQS; the EPA

proposed that downwind areas represented by these monitoring sites in
California should not be considered interstate ozone transport
receptors at Step 1. However, the EPA is deferring finalizing a finding
at this time for Oregon (see section IV.G of this document for
additional information).
    Based on the air quality analysis presented in section IV of this
document, the EPA finds that, with the exception of Alabama, Minnesota,
and Wisconsin, the states found linked in 2023 will continue to
contribute above the 1 percent of the NAAQS threshold to at least one
receptor whose nonattainment and maintenance concerns persist through
the 2026 ozone season. As a result, the EPA's evaluation of
significantly contributing emissions at Step 3 for Alabama, Minnesota,
and Wisconsin is limited to emissions reductions achievable by the 2023
and 2024 ozone seasons.
    At the third step of the 4-step framework, the EPA applied a
multifactor test that incorporates cost, availability of emissions
reductions, and air quality impacts at the downwind receptors to
determine the amount of ozone precursor emissions from the linked
upwind states that ``significantly'' contribute to downwind
nonattainment or maintenance receptors. The EPA is applying the
multifactor test described in section V.A of this document to both EGU
and industrial sources. The EPA assessed the potential emissions
reductions in 2023 and 2026,\14\ as well as in intervening and later
years to determine the emissions reductions required to eliminate
significant contribution in 2023 and future years where downwind areas
are projected to have potential problems attaining or maintaining the
2015 ozone NAAQS.
---------------------------------------------------------------------------

    \14\ The EPA included emissions reductions from the potential
installation of SCRs at all affected large coal-fired EGUs in the
2026 analytic year for the purposes of assessing significant
contribution to nonattainment and interference with maintenance,
which is consistent with the associated attainment date. However, in
response to comments identifying potential supply chain and outage
scheduling challenges if the full breadth of these assumed SCR
installations were to occur, the EPA is implementing half of this
emissions reduction potential in 2026 ozone-season NOX
budgets for states containing these EGUs and the other half of this
emissions reduction potential in 2027 ozone-season NOX
budgets for those states.
---------------------------------------------------------------------------

    For EGU sources, the EPA evaluated the following set of widely-
available NOX emissions control technologies: (1) fully
operating existing selective catalytic reduction (SCR) controls,
including both optimizing NOX removal by existing
operational SCRs and turning on and optimizing existing idled SCRs; (2)
installing state-of-the-art NOX combustion controls; (3)
fully operating existing selective non-catalytic reduction (SNCR)
controls, including both optimizing NOX removal by existing
operational SNCRs and turning on and optimizing existing idled SNCRs;
(4) installing new SNCRs; (5) installing new SCRs; and (6) generation
shifting. For the reasons explained in section V of this document and
supported by the ``Technical Support Document (TSD) for the Final
Federal Good Neighbor Plan for the 2015 Ozone National Ambient Air
Quality Standard, Docket ID No. EPA-HQ-OAR-2021-0668, EGU
NOX Mitigation Strategies Final Rule TSD'' (Mar. 2023),
hereinafter referred to as the EGU NOX Mitigation Strategies
Final Rule TSD, included in the docket for this action, the EPA
determines that for the regional, multi-state scale of this rulemaking,
only fully operating and optimizing existing SCRs and existing SNCRs
(EGU NOX emissions controls options 1 and 3 in the list
earlier) are possible for the 2023 ozone season. The EPA determined
that state-of-the-art NOX combustion controls at EGUs
(emissions control option 2 in the list above) are available by the
beginning of the 2024 ozone season. See section V.B.1 of this document
for a full discussion of EPA's analysis of NOX emissions
mitigation strategies for EGU sources.
    The EPA is requiring control stringency levels that offer the most
incremental NOX emissions reduction potential from EGUs--
among the uniform mitigation measures assessed for the covered region--
and the most corresponding downwind ozone air quality improvements to
the extent feasible in each year analyzed. The EPA is making a finding
that the required controls provide cost-effective reductions of
NOX emissions that will provide substantial improvements in
downwind ozone air quality to address interstate transport obligations
for the 2015 ozone NAAQS in a timely manner. These controls represent
greater stringency in upwind EGU controls than in the EPA's most recent
ozone transport rulemakings, such as the CSAPR Update and the Revised
CSAPR Update. However, programs to address interstate ozone transport
based on the retrofit of post-combustion controls are by no means
unprecedented. In prior ozone transport rulemakings such as the
NOX SIP Call and the Clean Air Interstate Rule (CAIR), the
EPA established EGU budgets premised on the widespread availability of
retrofitting EGUs with post-combustion emissions controls such as
SCR.\15\ While these programs successfully drove many EGUs to retrofit
post-combustion controls, other EGUs throughout the present geography
of linked upwind states continue to operate without such controls and
continue to emit at relatively high rates more than 20 years after
similar units reduced these emissions under prior interstate ozone
transport rulemakings.
---------------------------------------------------------------------------

    \15\ See, e.g., 70 FR 25162, 25205-06 (May 12, 2005).
---------------------------------------------------------------------------

    Furthermore, the CSAPR Update provided only a partial remedy for
eliminating significant contribution for the 2008 ozone NAAQS, as
needed to obtain available reductions by the 2017 ozone season. In that
rule, the EPA made no determination regarding the appropriateness of
more stringent EGU NOX controls that would be required for a
full remedy for interstate transport for the 2008 ozone NAAQS.
Following the remand of the CSAPR Update in Wisconsin v. EPA, 938 F.3d
303 (D.C. Cir. 2019) (Wisconsin), the EPA again declined to require the
retrofit of new post-combustion controls on EGUs in the Revised CSAPR
Update, but that determination was based on a specific timing
consideration: downwind air quality problems under the 2008 ozone NAAQS
were projected to resolve before post-combustion control retrofits
could be accomplished on a fleetwide, regional scale. See 86 FR 23054,
23110 (April 30, 2021).
    In this rulemaking, the EPA is addressing good neighbor obligations
for the more protective 2015 ozone NAAQS, and the Agency observes
ongoing and persistent contribution from upwind states to ozone
nonattainment and maintenance receptors in downwind states under that
NAAQS. As further discussed in section V of this document, the nature
of this contribution warrants a greater degree of control stringency
than the EPA determined to be necessary to eliminate significant
contribution of ozone transport in prior CSAPR rulemakings. In this
rule, the EPA is requiring emissions performance levels for EGU
NOX control strategies commensurate with those determined to
be necessary in the NOX SIP Call and CAIR.
    Based on the Step 3 analysis described in section V of this
document, the EPA finds that emissions reductions commensurate with the
full operation of all existing post-combustion controls (both SCRs and
SNCRs) and state-of-the-art combustion control upgrades constitute the
Agency's selected control stringency for EGUs within the borders of 22
states linked to downwind

nonattainment or maintenance in 2023 (Alabama, Arkansas, Illinois,
Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota,
Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma,
Pennsylvania, Texas, Utah, Virginia, West Virginia, and Wisconsin). For
19 of those states that are also linked in 2026 (Arkansas, Illinois,
Indiana, Kentucky, Louisiana, Maryland, Michigan, Mississippi,
Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania,
Texas, Utah, Virginia, and West Virginia), the EPA is determining that
the selected EGU control stringency also includes emissions reductions
commensurate with the retrofit of SCR at coal-fired units of 100 MW or
greater capacity (excepting circulating fluidized bed units (CFB)), new
SNCR on coal-fired units of less than 100 MW capacity and on CFBs of
any capacity size, and SCR on oil/gas steam units greater than 100 MW
that have historically emitted at least 150 tons of NOX per
ozone season.
    To identify appropriate control strategies for non-EGU sources to
achieve NOX emissions reductions that would result in
meaningful air quality improvements in downwind areas, for the proposed
FIP, the EPA evaluated air quality modeling information, annual
emissions, and information about potential controls to determine which
industries, beyond the power sector, could have the greatest impact in
providing ozone air quality improvements in affected downwind states.
Once the EPA identified the industries, the EPA used its Control
Strategy Tool to identify potential emissions units and control
measures and to estimate emissions reductions and compliance costs
associated with application of non-EGU emissions control measures. The
technical memorandum Screening Assessment of Potential Emissions
Reductions, Air Quality Impacts, and Costs from Non-EGU Emissions Units
for 2026 lays out the analytical framework and data used to prepare
proxy estimates for 2026 of potentially affected non-EGU facilities and
emissions units, emissions reductions, and costs.16 17 This
information helped shape the proposal and final rule. To further
evaluate the industries and emissions unit types identified by the
screening assessment and to establish the applicability criteria and
proposed emissions limits, the EPA reviewed Reasonably Available
Control Technology (RACT) rules, New Source Performance Standards
(NSPS) rules, National Emissions Standards for Hazardous Air Pollutants
(NESHAP) rules, existing technical studies, rules in approved SIPs,
consent decrees, and permit limits. That evaluation is detailed in the
``Technical Support Document (TSD) for the Proposed Rule, Docket ID No.
EPA-HQ-OAR-2021-0668, Non-EGU Sectors TSD'' (Dec. 2021), hereinafter
referred to as the Proposed Non-EGU Sectors TSD, prepared for the
proposed FIP.\18\
---------------------------------------------------------------------------

    \16\ The memorandum is available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-0150.
    \17\ This screening assessment was not intended to identify the
specific emissions units subject to the proposed emissions limits
for non-EGU sources but was intended to inform the development of
the proposed rule by identifying proxies for (1) non-EGU emissions
units that had emissions reduction potential, (2) potential controls
for and emissions reductions from these emissions units, and (3)
control costs from the potential controls on these emissions units.
This information helped shape the proposed rule.
    \18\ The TSD is available in the docket at https://www.regulations.gov/document/EPA-HQ-OAR-2021-0668-0145.
---------------------------------------------------------------------------

    In this final rule, the EPA is retaining the industries and many of
the emissions unit types included in the proposal in its findings of
significant contribution at Step 3, as discussed in section V of this
document. As discussed in the memorandum for the final rule, titled
``Summary of Final Rule Applicability Criteria and Emissions Limits for
Non-EGU Emissions Units, Assumed Control Technologies for Meeting the
Final Emissions Limits, and Estimated Emissions Units, Emissions
Reductions, and Costs,'' the EPA uses the 2019 emissions inventory, the
list of emissions units estimated to be captured by the applicability
criteria, the assumed control technologies that would meet the
emissions limits, and information on control efficiencies and default
cost/ton values from the Control Measures Database,\19\ to estimate
NOX emissions reductions and costs for the year 2026. In
this final rule, the EPA made changes to the applicability criteria and
emissions limits following consideration of comments on the proposal
and reassessed the overall non-EGU emissions reduction strategy based
on the factors at Step 3 to render a judgment as to whether the level
of emissions control that would be achievable from these units meets
the criteria for ``significant contribution.'' In the final rule, we
affirm our proposed determinations of which industries and emissions
units are potentially impactful and warrant further analysis at Step 3,
and we find that the available emissions reductions are cost-effective
and make meaningful improvements at the identified downwind receptors.
For a detailed discussion of the changes, between the proposal and this
final rule, in emissions unit types included and in emissions limits,
see section VI.C. of this document.
---------------------------------------------------------------------------

    \19\ More information about the control measures database (CMDB)
can be found at the following link: https://www.epa.gov/economic-and-cost-analysis-air-pollution-regulations/cost-analysis-modelstools-air-pollution.
---------------------------------------------------------------------------

    The EPA performed air quality analysis using the Ozone Air Quality
Assessment Tool (AQAT) to evaluate the air quality improvements
anticipated to result from the implementation of the selected EGU and
non-EGU emissions reduction strategies. See section V.D of this
document.\20\ We also used AQAT to determine whether the emissions
reductions for both EGUs and non-EGUs potentially create an ``over-
control'' scenario. As in prior transport rules following the holdings
in EME Homer City, overcontrol would be established if the record
indicated that, for any given state, there is a less stringent
emissions control approach for that state, by which (1) the expected
ozone improvements would be sufficient to resolve all of the downwind
receptor(s) to which that state is linked; or (2) the expected ozone
improvements would reduce the upwind state's ozone contributions below
the screening threshold (i.e., 1 percent of the NAAQS or 0.70 ppb) to
all of linked receptors. The EPA's over-control analysis, discussed in
section V.D.4 of this document, shows that the control stringencies for
EGU and non-EGU sources in this final rule do not over-control upwind
states' emissions either with respect to the downwind air quality
problems to which they are linked or with respect to the 1 percent of
the NAAQS contribution threshold, such that over-control would trigger
re-evaluation at Step 3 for any linked upwind state.
---------------------------------------------------------------------------

    \20\ The use of AQAT and other simplified modeling tools to
generate ``appropriately reliable projections of air quality
conditions and contributions'' when there is limited time to conduct
full-scale photochemical grid modeling was upheld by the D.C.
Circuit in MOG v. EPA, No. 21-1146 (D.C. Cir. March 3, 2023). The
EPA has used AQAT for the purpose of air quality and overcontrol
assessments at Step 3 in the prior CSAPR rulemakings, and we
continue to find it reliable for such purposes. We discuss the
calibration of AQAT for this action and the multiple sensitivity
checks we performed to ensure its reliability in the Ozone Transport
Policy Analysis Final Rule TSD in the docket. Because we were able
to conduct a photochemical grid modeling run of the 2026 final rule
policy scenario, these results are also included in the docket and
confirm the regulatory conclusions reached with AQAT. See section
VIII of this document and Appendix 3A of the Final Rule RIA for more
information.
---------------------------------------------------------------------------

    Based on the multi-factor test applied to both EGU and non-EGU
sources and

our subsequent assessment of over-control, the EPA finds that the
selected EGU and non-EGU control stringencies constitute the
elimination of significant contribution and interference with
maintenance, without over-controlling emissions, from the 23 upwind
states subject to EGU and non-EGU emissions reductions requirements
under the rule. For additional details about the multi-factor test and
the over-control analysis, see the document titled ``Technical Support
Document (TSD) for the Final Federal Good Neighbor Plan for the 2015
Ozone National Ambient Air Quality Standard, Docket ID No. EPA-HQ-OAR-
2021-0668, Ozone Transport Policy Analysis Proposed Rule TSD'' (Mar.
2023), hereinafter referred to as Ozone Transport Policy Analysis Final
Rule TSD, included in the docket for this rulemaking.
    In this fourth step of the 4-step framework, the EPA is including
enforceable measures in the promulgated FIPs to achieve the required
emissions reductions in each of the 23 states. Specifically, the FIPs
require covered power plants within the borders of 22 states (Alabama,
Arkansas, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio,
Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia, and
Wisconsin) to participate in the CSAPR NOX Ozone Season
Group 3 Trading Program created by the Revised CSAPR Update. Affected
EGUs within the borders of the following 12 states currently
participating in the Group 3 Trading Program will remain in the
program, with revised provisions beginning in the 2023 ozone season,
under this rule: Illinois, Indiana, Kentucky, Louisiana, Maryland,
Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West
Virginia. Affected EGUs within the borders of the following seven
states currently covered by the CSAPR NOX Ozone Season Group
2 Trading Program (the ``Group 2 trading program'')--Alabama, Arkansas,
Mississippi, Missouri, Oklahoma, Texas, and Wisconsin--will transition
from the Group 2 program to the revised Group 3 trading program
beginning with the 2023 control period,\21\ and affected EGUs within
the borders of three states not currently covered by any CSAPR trading
program for seasonal NOX emissions--Minnesota, Nevada, and
Utah--will enter the Group 3 trading program in the 2023 control period
following the effective date of the final rule. In addition, the EPA is
revising other aspects of the Group 3 trading program to better ensure
that this method of implementation at Step 4 provides a durable remedy
for the elimination of the amount of emissions deemed to constitute
significant contribution at Step 3 of the interstate transport
framework. These enhancements, summarized later in this section, are
designed to operate together to maintain that degree of control
stringency over time, thus improving emissions performance at
individual units and offering a necessary measure of assurance that
NOX pollution controls will be operated throughout each
ozone season, as described in section VI.B of this document. This
rulemaking does not revise the budget stringency and geography of the
existing CSAPR NOX Ozone Season Group 1 trading program.
Aside from the seven states moving from the Group 2 trading program to
the Group 3 trading program under the final rule, this rule otherwise
leaves unchanged the budget stringency of the existing CSAPR
NOX Ozone Season Group 2 trading program.
---------------------------------------------------------------------------

    \21\ The EPA will deem participation in the Group 3 trading
program by the EGUs in these seven states as also addressing the
respective states' good neighbor obligations with respect to the
2008 ozone NAAQS (for all seven states), the 1997 ozone NAAQS (for
all the states except Texas), and the 1979 ozone NAAQS (for Alabama
and Missouri) to the same extent that those obligations are
currently being addressed by participation of the states' EGUs in
the Group 2 trading program.
---------------------------------------------------------------------------

    The EPA is establishing preset ozone season NOX
emissions budgets for each ozone season from 2023 through 2029, using
generally the same Group 3 trading program budget-setting methodology
used in the Revised CSAPR Update, as explained in section VI.B of this
document and as shown in Table I.B-1. The preset budgets for the 2026
through 2029 ozone seasons incorporate EGU emissions reductions to
eliminate significant contribution and also take into account a
substantial number of known retirements over that period to ensure the
elimination of significant contribution is maintained as intended by
this rule. These budgets serve as floors and may be supplanted by a
budget that the EPA calculates for that control period using more
recent information (a ``dynamic budget'') if that dynamic budget yields
a higher level of allowable emissions--still consistent with the Step 3
level of emissions control stringency--than the preset budget. As
reflected in Table I.B-1, and accounting for both the stringency of the
rule and known fleet change, the 2026 preset budget is 23 percent lower
than the 2025 preset budget; the 2027 preset budget is 20 percent lower
than the 2026 preset budget; the 2028 preset budget is 4 percent lower
than the 2027 preset budget; and the 2029 preset budget is 8 percent
lower than the 2028 preset budget.
    While it is possible that additional EGUs may seek to retire in
this 2026-2029 period than are currently scheduled and captured in the
preset emissions budgets, it is also possible that EGUs with currently
scheduled retirements may adjust their retirement timing to accommodate
the timing of replacement generation and/or transmission upgrades
necessitated by their retirement. While the EPA designed this final
rule to provide preset budgets through 2029 to incorporate known
retirement-related emissions reductions to ensure the elimination of
significant contribution as identified at Step 3 is maintained over
time, the use of these floors also provides generators and grid
operators enhanced certainty regarding the minimum amount of allowable
NOX emissions for reliability planning through the 2020s. By
providing the opportunity for dynamic budgets to subsequently calibrate
budgets to any unforeseen increases in fleet demand, it also ensures
this rule will not interfere with ongoing retirement scheduling or
adjustments and thus is robust to future uncertainty during a
transition period.
    The EPA also believes the likelihood and magnitude of a scenario in
which a state's preset emissions budgets during this period would
authorize more emissions than the corresponding dynamic budget is low.
As described elsewhere, dynamic budgets are incorporated to best
calibrate the rule's stringency to future unknown changes to the fleet.
The circumstances in which a dynamic budget would produce a level of
allowable emissions less than preset budgets is most pronounced for
future periods in which there is a high degree of unknown retirements
(increasing the risk that budgets are not appropriately calibrated to
the reduced fossil fuel heat input post retirement). However, the 2026-
2029 period presents a case where retirement planning has been
announced with greater lead time than normal due to a combination of
utility 2030 decarbonization commitments, and Effluent Limitation
Guideline (ELG) and Coal Combustion Residual (CCR) alternative
compliance pathways available to units planning to cease combustion of
coal by December 31, 2028. For each of these existing rules, facilities
that are planning to retire have already conveyed that intention to EPA
in order to take advantage of the alternative compliance pathways

available to such facilities.\22\ Therefore, the likelihood of unknown
retirements--leading to lower dynamic budgets--is much lower than
typical for this time horizon. This makes EPA's balanced use of preset
emissions budgets or dynamic budgets if they exceed preset levels a
reasonable mechanism to accommodate planning and fleet transition
dynamics during this period. The need and reasoning for the limited-
period preset budget floor is further discussed in section VI.B.4.
---------------------------------------------------------------------------

    \22\ Notices of Planned Participation for the ELG
Reconsideration Rule were due October 31, 2021 (85 FR 64708, 64679).
For the CCR Action, facilities had to indicate their future plans to
cease receipt of waste by April 11, 2021 (85 FR 53517).
---------------------------------------------------------------------------

    For control periods in 2030 and thereafter, the emissions budgets
will be the amounts calculated for each state and noticed to the public
roughly one year before the control period, using the dynamic budget-
setting methodology. In this manner, the stringency of the program will
be secured and sustained in the dynamic budgets of this program,
regardless of whatever EGU transition activities ultimately occur in
this 2026-2029 transition period.

                Table I.B-1--Preset CSAPR NOX Ozone Season Group 3 State Emissions Budgets (tons) for 2023 Through 2029 Control Periods *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            2023 State      2024 State      2025 State      2026 State      2027 State      2028 State      2029 State
                  State                       budget          budget          budget         budget **       budget **       budget **       budget **
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................           6,379           6,489           6,489           6,339           6,236           6,236           5,105
Arkansas................................           8,927           8,927           8,927           6,365           4,031           4,031           3,582
Illinois................................           7,474           7,325           7,325           5,889           5,363           4,555           4,050
Indiana.................................          12,440          11,413          11,413           8,410           8,135           7,280           5,808
Kentucky................................          13,601          12,999          12,472          10,190           7,908           7,837           7,392
Louisiana...............................           9,363           9,363           9,107           6,370           3,792           3,792           3,639
Maryland................................           1,206           1,206           1,206             842             842             842             842
Michigan................................          10,727          10,275          10,275           6,743           5,691           5,691           4,656
Minnesota...............................           5,504           4,058           4,058           4,058           2,905           2,905           2,578
Mississippi.............................           6,210           5,058           5,037           3,484           2,084           1,752           1,752
Missouri................................          12,598          11,116          11,116           9,248           7,329           7,329           7,329
Nevada..................................           2,368           2,589           2,545           1,142           1,113           1,113             880
New Jersey..............................             773             773             773             773             773             773             773
New York................................           3,912           3,912           3,912           3,650           3,388           3,388           3,388
Ohio....................................           9,110           7,929           7,929           7,929           7,929           6,911           6,409
Oklahoma................................          10,271           9,384           9,376           6,631           3,917           3,917           3,917
Pennsylvania............................           8,138           8,138           8,138           7,512           7,158           7,158           4,828
Texas...................................          40,134          40,134          38,542          31,123          23,009          21,623          20,635
Utah....................................          15,755          15,917          15,917           6,258           2,593           2,593           2,593
Virginia................................           3,143           2,756           2,756           2,565           2,373           2,373           1,951
West Virginia...........................          13,791          11,958          11,958          10,818           9,678           9,678           9,678
Wisconsin...............................           6,295           6,295           5,988           4,990           3,416           3,416           3,416
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................         208,119         198,014         195,259         151,329         119,663         115,193         105,201
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Further information on the state-level emissions budget calculations pertaining to Table I.B-1 is provided in section VI.B.4 of this document as well
  as the Ozone Transport Policy Analysis Final Rule TSD. Further information on the approach for allocating a portion of Utah's emissions budget for
  each control period to the existing EGU in the Uintah and Ouray Reservation within Utah's borders is provided in section VI.B.9 of this document.
** As described in section VI of this document, the budget for these years will be subsequently determined and equal the greater of the value above or
  that derived from the dynamic budget methodology.

    The budget-setting methodology that the EPA will use to determine
dynamic budgets for each control period starting with 2026 is an
extension of the methodology used to determine the preset budgets and
will be used routinely to determine emissions budgets for each future
control period in the year before that control period, with each
emissions budget reflecting the latest available information on the
composition and utilization of the EGU fleet at the time that emissions
budget is determined. The stringency of the dynamic emissions budgets
will simply reflect the stringency of the emissions control strategies
selected in the rulemaking more consistently over time and ensure that
the annual updates would eliminate emissions determined to be unlawful
under the good neighbor provision. As already noted, for the control
periods in which both preset budgets and dynamic budgets are determined
for a state (i.e., 2026 through 2029), the state's dynamic budget will
apply only if it is higher than the state's preset budget. See section
VI.B of this document for additional discussion of the EPA's method for
adjusting emissions budgets to ensure elimination of significant
contribution from EGU sources in the linked upwind states.
    In conjunction with the levels of the emissions budgets, the
carryover of unused allowances for use in future control periods as
banked allowances affects the ability of a trading program to maintain
the rule's selected control stringency and related EGU effective
emissions rate performance level as the EGU fleet evolves over time.
Unrestricted banking of allowances allows what might otherwise be
temporary surpluses of allowances in some individual control periods to
accumulate into a long-term allowance surplus that reduces allowance
prices and weakens the trading program's incentives to control
emissions. To prevent this outcome, the EPA is also revising the Group
3 trading program by adding provisions that establish a routine
recalibration process for banked allowances using a target percentage
of 21 percent for the 2024-2029 control periods and 10.5 percent for
control periods in 2030 and later years.
    As an enhancement to the structure of the trading program
originally promulgated in the Revised CSAPR Update, the EPA is also
establishing backstop daily emissions rates for coal

steam EGUs greater than or equal to 100 MW in covered states. Starting
with the 2024 control period, a 3-for-1 allowance surrender ratio
(instead of the usual 1-for-1 surrender ratio) will apply to emissions
during the ozone season from any large coal-fired EGU with existing SCR
controls exceeding by more than 50 tons a daily average NOX
emissions rate of 0.14 lb/mmBtu. The daily average emissions rate
provisions will apply to large coal-fired EGUs without existing SCR
controls starting with the second control period in which newly
installed SCR controls are operational at the unit, but not later than
the 2030 control period.
    The backstop daily emissions rates work in tandem with the ozone
season emissions budgets to ensure the elimination of significant
contribution as determined at Step 3 is maintained over time and more
consistently throughout each ozone season. They will offer downwind
receptor areas a necessary measure of assurance that they will be
protected on a daily basis during the ozone season by more continuous
and consistent operation of installed pollution controls. The EPA's
experience with the CSAPR trading programs has revealed instances where
EGUs have reduced their SCRs' performance on a given day, or across the
entire ozone seasons in some cases, including high ozone days.\23\ In
addition to maintaining a mass-based seasonal requirement, this rule
will achieve a much more consistent level of emissions control in line
with our Step 3 determination of significant contribution while
maintaining compliance flexibility consistent with that determination.
These trading program improvements will promote consistent emissions
control performance across the power sector in the linked upwind
states, which protects communities living in downwind ozone
nonattainment areas from exceedances of the NAAQS that might otherwise
occur.
---------------------------------------------------------------------------

    \23\ See 86 FR 23090. The EPA highlighted the Miami Fort Unit 7
(possessing a SCR) more than tripled its ozone-season NOX
emission rate between 2017 and 2019.
---------------------------------------------------------------------------

    The EPA is including enforceable emissions control requirements
that will apply during the ozone season (annually from May to
September) for nine non-EGU industries in the promulgated FIPs to
achieve the required emissions reductions in 20 states with remaining
interstate transport obligations for the 2015 ozone NAAQS in 2026:
Arkansas, California, Illinois, Indiana, Kentucky, Louisiana, Maryland,
Michigan, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio,
Oklahoma, Pennsylvania, Texas, Utah, Virginia, and West Virginia. These
requirements would apply to all existing emissions units and to any
future emissions units constructed in the covered states that meet the
relevant applicability criteria. Thus, the emissions limitations for
non-EGU sources and associated compliance requirements would apply in
all 20 states listed in this paragraph, even if some of these states do
not currently have any existing emissions units meeting the
applicability criteria for the identified industries.
    Based on our evaluation of the time required to install controls at
the types of non-EGU sources covered by this rule, the EPA has
identified the 2026 ozone season as a reasonable compliance date for
industrial sources. The EPA is therefore finalizing control
requirements for non-EGU sources that take effect in 2026. However, in
recognition of comments and additional information indicating that not
all facilities may be capable of meeting the control requirements by
that time, the final rule provides a process by which the EPA may grant
compliance extensions of up to 1 year, which if approved by the EPA,
would require compliance no later than the 2027 ozone season, followed
by an additional possible extension of up to 2 more years, where
specific criteria are met. For sources located in the 20 states listed
in the previous paragraph, the EPA is finalizing the NOX
emissions limits listed in Table I.B-2 for reciprocating internal
combustion engines in Pipeline Transportation of Natural Gas; the
NOX emissions limits listed in Table I.B-3 for kilns in
Cement and Cement Product Manufacturing; the NOX emissions
limits listed in Table I.B-4 for reheat furnaces in Iron and Steel
Mills and Ferroalloy Manufacturing; the NOX emissions limits
listed in Table I.B-5 for furnaces in Glass and Glass Product
Manufacturing; the NOX emissions limits listed in Table I.B-
6 for boilers in Iron and Steel Mills and Ferroalloy Manufacturing,
Metal Ore Mining, Basic Chemical Manufacturing, Petroleum and Coal
Products Manufacturing, and Pulp, Paper, and Paperboard Mills; and the
NOX emissions limits listed in Table I.B-7 for combustors
and incinerators in Solid Waste Combustors or Incinerators.

Table I.B-2--Summary of NOX Emissions Limits for Pipeline Transportation
                             of Natural Gas
------------------------------------------------------------------------
                                                     NOX emissions limit
               Engine type and fuel                       (g/hp-hr)
------------------------------------------------------------------------
Natural Gas Fired Four Stroke Rich Burn...........                   1.0
Natural Gas Fired Four Stroke Lean Burn...........                   1.5
Natural Gas Fired Two Stroke Lean Burn............                   3.0
------------------------------------------------------------------------

  Table I.B-3--Summary of NOX Emissions Limits for Kiln Types in Cement
                   and Concrete Product Manufacturing
------------------------------------------------------------------------
                                                     NOX emissions limit
                     Kiln type                       (lb/ton of clinker)

------------------------------------------------------------------------
Long Wet..........................................                   4.0
Long Dry..........................................                   3.0
Preheater.........................................                   3.8
Precalciner.......................................                   2.3
Preheater/Precalciner.............................                   2.8
------------------------------------------------------------------------

    Based on evaluation of comments received, the EPA is not, at this
time, finalizing the source cap limit as proposed at 87 FR 20046 (see
section VII.C.2 of the April 6, 2022, Proposal).

 Table I.B-4--Summary of NOX Control Requirements for Iron and Steel and
                       Ferroalloy Emissions Units
------------------------------------------------------------------------
                                            NOX emissions standard or
             Emissions unit                   requirement (lb/mmBtu)
------------------------------------------------------------------------
Reheat furnace.........................  Test and set limit based on
                                          installation of Low-NOX
                                          Burners.
------------------------------------------------------------------------

 Table I.B-5--Summary of NOX Emissions Limits for Furnace Unit Types in
                  Glass and Glass Product Manufacturing
------------------------------------------------------------------------
                                             NOX emissions limit (lb/ton
                Furnace type                      of glass produced)
------------------------------------------------------------------------
Container Glass Manufacturing Furnace......                          4.0
Pressed/Blown Glass Manufacturing Furnace                            4.0
 or Fiberglass Manufacturing Furnace.......
Flat Glass Manufacturing Furnace...........                          7.0
------------------------------------------------------------------------

  Table I.B-6--Summary of NOX Emissions Limits for Boilers in Iron and
  Steel and Ferroalloy Manufacturing, Metal Ore Mining, Basic Chemical
   Manufacturing, Petroleum and Coal Products Manufacturing, and Pulp,
                       Paper, and Paperboard Mills
------------------------------------------------------------------------
                                                    Emissions limit (lbs
                     Unit type                           NOX/mmBtu)
------------------------------------------------------------------------
Coal..............................................                  0.20
Residual oil......................................                  0.20
Distillate oil....................................                  0.12
Natural gas.......................................                  0.08
------------------------------------------------------------------------

     Table I.B-7--Summary of NOX Emissions Limits for Combustors and
         Incinerators in Solid Waste Combustors or Incinerators
------------------------------------------------------------------------
                                                     NOX emissions limit
    Combustor or incinerator, averaging period             (ppmvd)
------------------------------------------------------------------------
ppmvd on a 24-hour block averaging period.........                   110
ppmvd on a 30-day rolling averaging period........                   105
------------------------------------------------------------------------

    Section VI.C of this document provides an overview of the
applicability criteria, compliance assurance requirements, and the
EPA's rationale for establishing these emissions limits and control
requirements for each of the non-EGU industries covered by the rule.
    The remainder of this preamble is organized as follows: section II
of this document outlines general applicability criteria and describes
the EPA's legal authority for this rule and the relationship of the
rule to previous interstate ozone transport rulemakings. Section III of
this document describes the human health and environmental challenges
posed by interstate transport contributions to ozone air quality
problems, as well as the EPA's overall approach for addressing
interstate transport for the 2015 ozone NAAQS in this rule. Section IV
of this document describes the Agency's analyses of air quality data to
inform this rulemaking, including descriptions of the air quality
modeling platform and emissions inventories used in the rule, as well
as the EPA's methods for identifying downwind air quality problems and
upwind states' ozone transport contributions to downwind states.
Section V of this document describes the EPA's approach to quantifying
upwind states' obligations in the form of EGU NOX control
stringencies and non-EGU emissions limits. Section VI of this document
describes key elements of the implementation schedule for EGU and non-
EGU emissions reductions requirements, including details regarding the
revised aspects of the CSAPR NOX Group 3 trading program and
compliance deadlines, as well as regulatory requirements and compliance
deadlines for non-EGU sources. Section VII of this document discusses
the environmental justice analysis of the rule, as well as outreach and
engagement efforts. Section VIII of this document describes the
expected costs, benefits, and other impacts of this rule. Section IX of
this document provides a summary of changes to the existing regulatory
text applicable to the EGUs covered by this rule; and section X of this
document discusses the statutory and executive orders affecting this
rulemaking.

C. Costs and Benefits

    A summary of the key results of the cost-benefit analysis that was
prepared for this final rule is presented in Table I.C-1. Table I.C-1
presents estimates of the present values (PV) and equivalent annualized
values (EAV), calculated using discount rates of 3 and 7 percent as
recommended by OMB's Circular A-4, of the health and climate benefits,
compliance costs, and net benefits of the final rule, in 2016 dollars,
discounted to 2023. The estimated monetized net benefits are the
estimated monetized benefits minus the estimated monetized costs of the
final rule. These results present an incomplete overview of the effects
of the rule because important

categories of benefits--including benefits from reducing other types of
air pollutants, and water pollution--were not monetized and are
therefore not reflected in the cost-benefit tables. We anticipate that
taking non-monetized effects into account would show the rule to be
more net beneficial than this table reflects.

Table I.C-1--Estimated Monetized Health and Climate Benefits, Compliance
      Costs, and Net Benefits of the Final Rule, 2023 Through 2042
                [Millions 2016$, discounted to 2023] \a\
------------------------------------------------------------------------
                                            3% Discount     7% Discount
                                               rate            rate
------------------------------------------------------------------------
Present Value:
    Health Benefits \b\.................        $200,000        $130,000
    Climate Benefits \c\................          15,000          15,000
    Compliance Costs \d\................          14,000           9,400
    Net Benefits........................         200,000         140,000
Equivalent Annualized Value:
    Health Benefits.....................          13,000          12,000
    Climate Benefits....................             970             970
    Compliance Costs....................             910             770
    Net Benefits........................          13,000          12,000
------------------------------------------------------------------------
\a\ Rows may not appear to add correctly due to rounding.
\b\ The annualized present value of costs and benefits are calculated
  over a 20-year period from 2023 to 2042. Monetized benefits include
  those related to public health associated with reductions in ozone and
  PM2.5 concentrations. The health benefits are associated with two
  point estimates and are presented at real discount rates of 3 and 7
  percent. Several categories of benefits remain unmonetized and are
  thus not reflected in the table.
\c\ Climate benefits are calculated using four different estimates of
  the social cost of carbon (SC-CO2 (model average at 2.5 percent, 3
  percent, and 5 percent discount rates; 95th percentile at 3 percent
  discount rate). For presentational purposes in this table, the climate
  benefits associated with the average SC-CO2 at a 3-percent discount
  rate are used in the columns displaying results of other costs and
  benefits that are discounted at either a 3-percent or 7-percent
  discount rate.
\d\ The costs presented in this table are consistent with the costs
  presented in Chapter 4 of the Regulatory Impact Analysis (RIA). To
  estimate these annualized costs for EGUs, the EPA uses a conventional
  and widely accepted approach that applies a capital recovery factor
  (CRF) multiplier to capital investments and adds that to the annual
  incremental operating expenses. Costs were calculated using a 3.76
  percent real discount rate consistent with the rate used in IPM's
  objective function for cost-minimization. For further information on
  the discount rate use, please see Chapter 4, Table 4-8 in the RIA.

    As shown in Table I.C-1, the PV of the monetized health benefits,
associated with reductions in ozone and PM2.5 concentrations, of this
final rule, discounted at a 3-percent discount rate, is estimated to be
about $200 billion ($200,000 million), with an EAV of about $13 billion
($13,000 million). At a 7-percent discount rate, the PV of the
monetized health benefits is estimated to be $130 billion ($130,000
million), with an EAV of about $12 billion ($12,000 million). The PV of
the monetized climate benefits, associated with reductions in GHG
emissions, of this final rule, discounted at a 3-percent discount rate,
is estimated to be about $15 billion ($15,000 million), with an EAV of
about $970 million. The PV of the monetized compliance costs,
discounted at a 3-percent rate, is estimated to be about $14 billion
($14,000 million), with an EAV of about $910 million. At a 7-percent
discount rate, the PV of the compliance costs is estimated to be about
$9.4 billion ($9,400 million), with an EAV of about $770 million.

II. General Information

A. Does this action apply to me?

    This rule affects EGU and non-EGU sources, and regulates the groups
identified in Table II.A-1.

                     Table II.A-1--Regulated Groups
------------------------------------------------------------------------
                     Industry group                            NAICS
------------------------------------------------------------------------
Fossil fuel-fired electric power generation.............          221112
Pipeline Transportation of Natural Gas..................            4862
Metal Ore Mining........................................            2122
Cement and Concrete Product Manufacturing...............            3273
Iron and Steel Mills and Ferroalloy Manufacturing.......            3311
Glass and Glass Product Manufacturing...................            3272
Basic Chemical Manufacturing............................            3251
Petroleum and Coal Products Manufacturing...............            3241
Pulp, Paper, and Paperboard Mills.......................            3221
Solid Waste Combustors and Incinerators.................          562213
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
rule. This table lists the types of entities that the EPA is now aware
could potentially be regulated by this rule. Other types of entities
not listed in the table could also be regulated. To determine whether
your EGU entity is regulated by this rule, you should carefully examine
the applicability criteria found in 40 CFR 97.1004, which are unchanged
in this rule. If you have questions regarding the applicability of this
rule to a particular entity, consult the person listed in the FOR
FURTHER INFORMATION CONTACT section.

B. What action is the Agency taking?

    The EPA evaluated whether interstate ozone transport emissions from
upwind states are significantly contributing to nonattainment, or
interfering with maintenance, of the 2015 ozone NAAQS in any downwind
state using the same 4-step interstate transport framework that was
developed in previous ozone transport rulemakings. The EPA finds that
emissions reductions are required from EGU and non-EGU sources in a
total of 23 upwind states to eliminate significant contribution to
downwind air quality problems for the 2015 ozone standard under the
interstate transport provision of the CAA. The EPA will ensure that
these NOX emissions reductions are achieved by issuing FIP
requirements for 23 states: Alabama, Arkansas, California, Illinois,
Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota,
Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma,
Pennsylvania, Texas, Utah, Virginia, West Virginia, and Wisconsin.
    The EPA is revising the existing CSAPR Group 3 Trading Program to
include additional states beginning in the 2023 ozone season. EGUs in
three states not currently covered by any CSAPR trading program for
seasonal NOX emissions--Minnesota, Nevada, and Utah--will be
added to the CSAPR Group 3 Trading Program under this rule. EGUs in
twelve states currently participating in the Group 3 Trading Program
will remain in the program under this rule: Illinois, Indiana,
Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio,
Pennsylvania, Virginia, and West Virginia. EGUs in seven states
(Alabama, Arkansas, Mississippi, Missouri, Oklahoma, Texas, and
Wisconsin) will transition from the CSAPR Group 2 Trading Program to
the CSAPR Group 3 Trading Program under this rule beginning in the 2023
ozone season. The EPA is establishing control stringency levels
reflecting installation of state-of-the-art combustion controls on
certain covered EGU sources in emissions budgets beginning in the 2024
ozone season. The EPA is establishing control stringency levels
reflecting installation of new SCR or SNCR controls on certain covered
EGU sources in emissions budgets beginning in the 2026 ozone season.
    As a complement to the ozone season emissions budgets, the EPA is
also establishing a backstop daily emissions rate of 0.14 lb/mmBtu for
coal-fired steam units greater than or equal to 100 MW in covered
states. The backstop emissions rate will first apply in 2024 for coal-
fired steam sources with existing SCRs, and in the second control
period in which a new SCR operates, but not later than 2030, for those
currently without SCRs.
    This rule establishes emissions limitations for non-EGU sources in
20 states: Arkansas, California, Illinois, Indiana, Kentucky,
Louisiana, Maryland, Michigan, Mississippi, Missouri, Nevada, New
Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Virginia,
and West Virginia. In these states, the EPA is establishing control
requirements for the following unit types in non-EGU industries:
reciprocating internal combustion engines in Pipeline Transportation of
Natural Gas; kilns in Cement and Cement Product Manufacturing; reheat
furnaces in Iron and Steel Mills and Ferroalloy Manufacturing; furnaces
in Glass and Glass Product Manufacturing; boilers in Iron and Steel
Mills and Ferroalloy Manufacturing, Metal Ore Mining, Basic Chemical
Manufacturing, Petroleum and Coal Products Manufacturing, and Pulp,
Paper, and Paperboard Mills; and combustors and incinerators in Solid
Waste Combustors and Incinerators. See Table II.A-1 in this document
for a list of NAICS codes for each entity included for regulation in
this rule.
    This rule reduces the transport of ozone precursor emissions to
downwind areas, which is protective of human health and the environment
because acute and chronic exposure to ozone are both associated with
negative health impacts. Ozone exposure is also associated with
negative effects on ecosystems. Additional information on the air
quality issues addressed by this rule are included in section III of
this document.

C. What is the Agency's legal authority for taking this action?

    The statutory authority for this rule is provided by the CAA as
amended (42 U.S.C. 7401 et seq.). Specifically, sections 110 and 301 of
the CAA provide the primary statutory underpinnings for this rule. The
most relevant portions of CAA section 110 are subsections 110(a)(1),
110(a)(2) (including 110(a)(2)(D)(i)(I)) and 110(c)(1)).
    CAA section 110(a)(1) provides that states must make SIP
submissions ``within 3 years (or such shorter period as the
Administrator may prescribe) after the promulgation of a national
primary ambient air quality standard (or any revision thereof),'' and
that these SIP submissions are to provide for the ``implementation,
maintenance, and enforcement'' of such NAAQS.\24\ The statute directly
imposes on states the duty to make these SIP submissions, and the
requirement to make the submissions is not conditioned upon the EPA
taking any action other than promulgating a new or revised NAAQS.\25\
---------------------------------------------------------------------------

    \24\ 42 U.S.C. 7410(a)(1).
    \25\ See EPA v. EME Homer City Generation, L.P., 572 U.S. 489,
509-10 (2014).
---------------------------------------------------------------------------

    The EPA has historically referred to SIP submissions made for the
purpose of satisfying the applicable requirements of CAA sections
110(a)(1) and 110(a)(2) as ``infrastructure SIP'' or ``iSIP''
submissions. CAA section 110(a)(1) addresses the timing and general
requirements for iSIP submissions, and CAA section 110(a)(2) provides
more details concerning the required content of these submissions.\26\
It includes a list of specific elements that ``[e]ach such plan'' must
address.\27\
---------------------------------------------------------------------------

    \26\ 42 U.S.C. 7410(a)(2).
    \27\ The EPA's general approach to infrastructure SIP
submissions is explained in greater detail in individual notices
acting or proposing to act on state infrastructure SIP submissions
and in guidance. See, e.g., Memorandum from Stephen D. Page on
Guidance on Infrastructure State Implementation Plan (SIP) Elements
under Clean Air Act Sections 110(a)(1) and 110(a)(2) (September 13,
2013).
---------------------------------------------------------------------------

    CAA section 110(c)(1) requires the Administrator to promulgate a
FIP at any time within 2 years after the Administrator: (1) finds that
a state has failed to make a required SIP submission; (2) finds a SIP
submission to be incomplete pursuant to CAA section 110(k)(1)(C); or
(3) disapproves a SIP submission. This obligation applies unless the
state corrects the deficiency through a SIP revision that the
Administrator approves before the FIP is promulgated.\28\
---------------------------------------------------------------------------

    \28\ 42 U.S.C. 7410(c)(1).
---------------------------------------------------------------------------

    CAA section 110(a)(2)(D)(i)(I), also known as the ``good neighbor''
provision, provides the primary basis for this rule.\29\ It requires
that each state SIP include provisions sufficient to ``prohibit[ ],
consistent with the provisions of this subchapter, any source or other
type of emissions activity within the State from emitting any air
pollutant in amounts which will--(I) contribute significantly to
nonattainment in, or interfere with maintenance by, any other State
with respect to any [NAAQS].'' \30\ The EPA often refers to the
emissions reduction requirements under this provision as ``good
neighbor obligations'' and submissions addressing these requirements as
``good neighbor SIPs.''
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    \29\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
    \30\ Id.

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    Once the EPA promulgates a NAAQS, the EPA must designate areas as
being in ``attainment'' or ``nonattainment'' of the NAAQS, or
``unclassifiable.'' CAA section 107(d).\31\ For ozone, nonattainment is
further split into five classifications based on the severity of the
violation--Marginal, Moderate, Serious, Severe, or Extreme. Higher
classifications provide states with progressively more time to attain
while imposing progressively more stringent control requirements. See
CAA sections 181, 182.\32\ In general, states with nonattainment areas
classified as Moderate or higher must submit plans to the EPA to bring
these areas into attainment according to the statutory schedule. CAA
section 182.\33\ If an area fails to attain the NAAQS by the attainment
date associated with its classification, it is ``bumped up'' to the
next classification. CAA section 181(b).\34\
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    \31\ 42 U.S.C. 7407(d).
    \32\ 42 U.S.C. 7511, 7511a.
    \33\ 42 U.S.C. 7511a.
    \34\ 42 U.S.C. 7511(b).
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    Section 301(a)(1) of the CAA gives the Administrator the general
authority to prescribe such regulations as are necessary to carry out
functions under the Act.\35\ Pursuant to this section, the EPA has
authority to clarify the applicability of CAA requirements and
undertake other rulemaking action as necessary to implement CAA
requirements. CAA section 301 affords the Agency any additional
authority that may be needed to make certain other changes to its
regulations under 40 CFR parts 52, 75, 78, and 97, to effectuate the
purposes of the Act. Such changes are discussed in section IX of this
document.
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    \35\ 42 U.S.C. 7601(a)(1).
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    Tribes are not required to submit state implementation plans.
However, as explained in the EPA's regulations outlining Tribal Clean
Air Act authority, the EPA is authorized to promulgate FIPs for Indian
country as necessary or appropriate to protect air quality if a tribe
does not submit, and obtain the EPA's approval of, an implementation
plan. See 40 CFR 49.11(a); see also CAA section 301(d)(4).\36\ In the
proposed rule, the EPA proposed an ``appropriate or necessary'' finding
under CAA section 301(d) and proposed tribal FIP(s) as necessary to
implement the relevant requirements. The EPA is finalizing these
determinations, as further discussed in section III.C.2 of this
document.
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    \36\ 42 U.S.C. 7601(d)(4).
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D. What actions has the EPA previously issued to address regional ozone
transport?

    The EPA has issued several previous rules interpreting and
clarifying the requirements of CAA section 110(a)(2)(D)(i)(I) with
respect to the regional transport of ozone. These rules, and the
associated court decisions addressing these rules, summarized here,
provide important direction regarding the requirements of CAA section
110(a)(2)(D)(i)(I).
    The ``NOX SIP Call,'' promulgated in 1998, addressed the
good neighbor provision for the 1979 1-hour ozone NAAQS.\37\ The rule
required 22 states and the District of Columbia to amend their SIPs to
reduce NOX emissions that contribute to ozone nonattainment
in downwind states. The EPA set ozone season NOX budgets for
each state, and the states were given the option to participate in a
regional allowance trading program, known as the NOX Budget
Trading Program.\38\ The D.C. Circuit largely upheld the NOX
SIP Call in Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert.
denied, 532 U.S. 904 (2001).
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    \37\ Finding of Significant Contribution and Rulemaking for
Certain States in the Ozone Transport Assessment Group Region for
Purposes of Reducing Regional Transport of Ozone, 63 FR 57356 (Oct.
27, 1998). As originally promulgated, the NOX SIP Call
also addressed good neighbor obligations under the 1997 8-hour ozone
NAAQS, but EPA subsequently stayed and later rescinded the rule's
provisions with respect to that standard. See 84 FR 8422 (March 8,
2019).
    \38\ ``Allowance Trading,'' sometimes referred to as ``cap and
trade,'' is an approach to reducing pollution that has been used
successfully to protect human health and the environment. The design
elements of the EPA's most recent trading programs are discussed in
section VI.B.1.a of this document.
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    The EPA's next rule addressing the good neighbor provision, CAIR,
was promulgated in 2005 and addressed both the 1997 fine particulate
matter (PM2.5) NAAQS and 1997 ozone NAAQS.\39\ CAIR required
SIP revisions in 28 states and the District of Columbia to reduce
emissions of sulfur dioxide (SO2) or NOX--
important precursors of regionally transported PM2.5
(SO2 and annual NOX) and ozone (summer-time
NOX). As in the NOX SIP Call, states were given
the option to participate in regional trading programs to achieve the
reductions. When the EPA promulgated the final CAIR in 2005, the EPA
also issued findings that states nationwide had failed to submit SIPs
to address the requirements of CAA section 110(a)(2)(D)(i) with respect
to the 1997 PM2.5 and 1997 ozone NAAQS.\40\ On March 15,
2006, the EPA promulgated FIPs to implement the emissions reductions
required by CAIR.\41\ CAIR was remanded to EPA by the D.C. Circuit in
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir.), modified on reh'g, 550
F.3d 1176 (D.C. Cir. 2008). For more information on the legal issues
underlying CAIR and the D.C. Circuit's holding in North Carolina, refer
to the preamble of the CSAPR rule.\42\
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    \39\ Rule To Reduce Interstate Transport of Fine Particulate
Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain
Program; Revisions to the NOX SIP Call, 70 FR 25162 (May
12, 2005).
    \40\ 70 FR 21147 (April 25, 2005).
    \41\ 71 FR 25328 (April 28, 2006).
    \42\ Federal Implementation Plans: Interstate Transport of Fine
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR
48208, 48217 (August 8, 2011).
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    In 2011, the EPA promulgated CSAPR to address the issues raised by
the remand of CAIR. CSAPR addressed the two NAAQS at issue in CAIR and
additionally addressed the good neighbor provision for the 2006
PM2.5 NAAQS.\43\ CSAPR required 28 states to reduce
SO2 emissions, annual NOX emissions, or ozone
season NOX emissions that significantly contribute to other
states' nonattainment or interfere with other states' abilities to
maintain these air quality standards.\44\ To align implementation with
the applicable attainment deadlines, the EPA promulgated FIPs for each
of the 28 states covered by CSAPR. The FIPs require EGUs in the covered
states to participate in regional trading programs to achieve the
necessary emissions reductions. Each state can submit a good neighbor
SIP at any time that, if approved by EPA, would replace the CSAPR FIP
for that state.
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    \43\ 76 FR 48208.
    \44\ CSAPR was revised by several rulemakings after its initial
promulgation to revise certain states' budgets and to promulgate
FIPs for five additional states addressing the good neighbor
obligation for the 1997 ozone NAAQS. See 76 FR 80760 (December 27,
2011); 77 FR 10324 (February 21, 2012); 77 FR 34830 (June 12, 2012).
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    CSAPR was the subject of an adverse decision by the D.C. Circuit in
August 2012.\45\ However, this decision was reversed in April 2014 by
the Supreme Court, which largely upheld the rule, including the EPA's
approach to addressing interstate transport in CSAPR. EPA v. EME Homer
City Generation, L.P., 572 U.S. 489 (2014) (EME Homer City I). The rule
was remanded to the D.C. Circuit to consider claims not addressed by
the Supreme Court. Id. In July 2015 the D.C. Circuit

generally affirmed the EPA's interpretation of various statutory
provisions and the EPA's technical decisions. EME Homer City
Generation, L.P. v. EPA, 795 F.3d 118 (2015) (EME Homer City II).
However, the court remanded the rule without vacatur for
reconsideration of the EPA's emissions budgets for certain states,
which the court found may have over-controlled those states' emissions
with respect to the downwind air quality problems to which the states
were linked. Id. at 129-30, 138. For more information on the legal
issues associated with CSAPR and the Supreme Court's and D.C. Circuit's
decisions in the EME Homer City litigation, refer to the preamble of
the CSAPR Update.\46\
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    \45\ On August 21, 2012, the D.C. Circuit issued a decision in
EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012),
vacating CSAPR. The EPA sought review with the D.C. Circuit en banc
and the D.C. Circuit declined to consider the EPA's appeal en banc.
EME Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir.
January 24, 2013), ECF No. 1417012 (denying EPA's motion for
rehearing en banc).
    \46\ Cross-State Air Pollution Rule Update for the 2008 Ozone
NAAQS, 81 FR 74504, 74511 (October 26, 2016).
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    In 2016, the EPA promulgated the CSAPR Update to address interstate
transport of ozone pollution with respect to the 2008 ozone NAAQS.\47\
The final rule updated the CSAPR ozone season NOX emissions
budgets for 22 states to achieve cost-effective and immediately
feasible NOX emissions reductions from EGUs within those
states.\48\ The EPA aligned the analysis and implementation of the
CSAPR Update with the 2017 ozone season to assist downwind states with
timely attainment of the 2008 ozone NAAQS.\49\ The CSAPR Update
implemented the budgets through FIPs requiring sources to participate
in a revised CSAPR NOX ozone season trading program
beginning with the 2017 ozone season. As under CSAPR, each state could
submit a good neighbor SIP at any time that, if approved by the EPA,
would replace the CSAPR Update FIP for that state. The final CSAPR
Update also addressed the remand by the D.C. Circuit of certain states'
CSAPR phase 2 ozone season NOX emissions budgets in EME
Homer City II.
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    \47\ 81 FR 74504.
    \48\ One state, Kansas, was made newly subject to ozone season
NOX requirements by the CSAPR Update. All other CSAPR
Update states were already subject to ozone season NOX
requirements under CSAPR.
    \49\ 81 FR 74516. The EPA's final 2008 Ozone NAAQS SIP
Requirements Rule, 80 FR 12264, 12268 (March 6, 2015), revised the
attainment deadline for ozone nonattainment areas designated as
Moderate to July 20, 2018. See 40 CFR 51.1103. To demonstrate
attainment by this deadline, states were required to rely on design
values calculated using ozone season data from 2015 through 2017,
since the July 20, 2018, deadline did not afford enough time for
measured data of the full 2018 ozone season.
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    In December 2018, the EPA promulgated the CSAPR ``Close-Out,''
which determined that no further enforceable reductions in emissions of
NOX were required with respect to the 2008 ozone NAAQS for
20 of the 22 eastern states covered by the CSAPR Update.\50\
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    \50\ Determination Regarding Good Neighbor Obligations for the
2008 Ozone National Ambient Air Quality Standard, 83 FR 65878, 65882
(December 21, 2018). After promulgating the CSAPR Update and before
promulgating the CSAPR Close-Out, the EPA approved a SIP from
Kentucky resolving the Commonwealth's good neighbor obligations for
the 2008 ozone NAAQS. 83 FR 33730 (July 17, 2018). In the Revised
CSAPR Update, the EPA made an error correction under CAA section
110(k)(6) to convert this approval to a disapproval, because the
Kentucky approval relied on the same analysis which the D.C. Circuit
determined to be unlawful in the CSAPR Close-Out.
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    The CSAPR Update and the CSAPR Close-Out were both subject to legal
challenges in the D.C. Circuit. Wisconsin v. EPA, 938 F.3d 303 (D.C.
Cir. 2019) (Wisconsin); New York v. EPA, 781 Fed. App'x 4 (D.C. Cir.
2019) (New York). In September 2019, the D.C. Circuit upheld the CSAPR
Update in virtually all respects but remanded the rule because it was
partial in nature and did not fully eliminate upwind states'
significant contribution to nonattainment or interference with
maintenance of the 2008 ozone NAAQS by ``the relevant downwind
attainment deadlines'' in the CAA. Wisconsin, 938 F.3d at 313-15. In
October 2019, the D.C. Circuit vacated the CSAPR Close-Out on the same
grounds that it remanded the CSAPR Update in Wisconsin, specifically
because the Close-Out rule did not address good neighbor obligations by
``the next applicable attainment date'' of downwind states. New York,
781 Fed. App'x at 7.\51\
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    \51\ Subsequently, the D.C. Circuit made clear in a decision
reviewing the EPA's denial of a petition under CAA section 126 that
the holding in Wisconsin regarding alignment with downwind area's
attainment schedules applies with equal force to the Marginal area
attainment date established under CAA section 181(a). See Maryland
v. EPA, 958 F.3d 1185, 1203-04 (D.C. Cir. 2020).
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    In response to the Wisconsin remand of the CSAPR Update and the New
York vacatur of the CSAPR Close-Out, the EPA promulgated the Revised
CSAPR Update on April 30, 2021.\52\ The Revised CSAPR Update found that
the CSAPR Update was a full remedy for nine of the covered states. For
the 12 remaining states, the EPA found that their projected 2021 ozone
season NOX emissions would significantly contribute to
downwind states' nonattainment or maintenance problems. The EPA issued
new or amended FIPs for these 12 states and required implementation of
revised emissions budgets for EGUs beginning with the 2021 ozone
season. Based on the EPA's assessment of remaining air quality issues
and additional emissions control strategies for EGUs and emissions
sources in other industry sectors (non-EGUs), the EPA determined that
the NOX emissions reductions achieved by the Revised CSAPR
Update fully eliminated these states' significant contributions to
downwind air quality problems for the 2008 ozone NAAQS. As under the
CSAPR and the CSAPR Update, each state can submit a good neighbor SIP
at any time that, if approved by the EPA, would replace the Revised
CSAPR Update FIP for that state.
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    \52\ Revised Cross-State Air Pollution Rule Update for the 2008
Ozone NAAQS, 86 FR 23054 (April 30, 2021).
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    On March 3, 2023, the D.C. Circuit Court of Appeals denied the
Midwest Ozone Group's (MOG) petition for review of the Revised CSAPR
Update. MOG v. EPA, No. 21-1146 (D.C. Cir. March 3, 2023). The court
noted that it has ``exhaustively'' addressed the interstate transport
framework before, citing relevant cases, and ``incorporate them herein
by reference.'' Slip Op. 1 n.1. In response to MOG's arguments, the
court upheld the Agency's air quality analysis. Id. at 10-11. The court
noted that in light of the statutory timing framework and court-ordered
schedule the EPA was under, the Agency's methodological choices were
reasonable and provided ``an appropriately reliable projection of air
quality conditions and contributions in 2021.'' Id. at 11-12.

III. Air Quality Issues Addressed and Overall Rule Approach

A. The Interstate Ozone Transport Air Quality Challenge

1. Nature of Ozone and the Ozone NAAQS
    Ground-level ozone is not emitted directly into the air but is
created by chemical reactions between NOX and volatile
organic compounds (VOCs) in the presence of sunlight. Emissions from
electric utilities and industrial facilities, motor vehicles, gasoline
vapors, and chemical solvents are some of the major sources of
NOX and VOCs.
    Because ground-level ozone formation increases with temperature and
sunlight, ozone levels are generally higher during the summer months.
Increased temperature also increases emissions of volatile man-made and
biogenic organics and can also indirectly increase NOX
emissions (e.g., increased electricity generation for air
conditioning).
    On October 1, 2015, the EPA strengthened the primary and secondary
ozone standards to 70 ppb as an 8-hour

level.\53\ Specifically, the standards require that the 3-year average
of the fourth highest 24-hour maximum 8-hour average ozone
concentration may not exceed 70 ppb as a truncated value (i.e., digits
to right of decimal removed).\54\ In general, areas that exceed the
ozone standard are designated as nonattainment areas, pursuant to the
designations process under CAA section 107(d), and are subject to
heightened planning requirements depending on the severity of their
nonattainment classification, see CAA sections 181, 182.
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    \53\ 80 FR 65291.
    \54\ 40 CFR part 50, appendix P.
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    In the process of setting the 2015 ozone NAAQS, the EPA noted that
the conditions conducive to the formation of ozone (i.e., seasonally-
dependent factors such as ambient temperature, strength of solar
insolation, and length of day) differ by location, and that the Agency
believes it is important that ozone monitors operate during all periods
when there is a reasonable possibility of ambient levels approaching
the level of the NAAQS. At that time, the EPA stated that ambient ozone
concentrations in many areas could approach or exceed the level of the
NAAQS, more frequently and during more months of the year compared with
the historical ozone season monitoring lengths. Consequently, the EPA
extended the ozone monitoring season for many locations. See 80 FR
65416 for more details.
    Furthermore, the EPA stated that in addition to being affected by
changing emissions, future ozone concentrations may also be affected by
climate change. Modeling studies in the EPA's Interim Assessment (U.S.
EPA, 2009a) that are cited in support of the 2009 Greenhouse Gas
Endangerment Finding under CAA section 202(a) (74 FR 66496, Dec. 15,
2009) as well as a recent assessment of potential climate change
impacts (Fann et al., 2015) project that climate change may lead to
future increases in summer ozone concentrations across the contiguous
U.S.\55\ (80 FR 65300). The U.S. Global Change Research Program's
Impacts of Climate Change on Human Health in the United States: A
Scientific Assessment \56\ and Impacts, Risks, and Adaptation in the
United States: Fourth National Climate Assessment, Volume II \57\
reinforced these findings. The increase in ozone results from changes
in local weather conditions, including temperature and atmospheric
circulation patterns, as well as changes in ozone precursor emissions
that are influenced by meteorology (Nolte et al., 2018). While the
projected impact may not be uniform, climate change has the potential
to increase average summertime ozone relative to a future without
climate change.58 59 60 Climate change has the potential to
offset some of the improvements in ozone air quality, and therefore
some of the improvements in public health, that are expected from
reductions in emissions of ozone precursors (80 FR 65300). The EPA
responds to comments received on the impacts of climate change on ozone
formation in section 11 of the Response to Comments (RTC) document.
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    \55\ These modeling studies are based on coupled global climate
and regional air quality models and are designed to assess the
sensitivity of U.S. air quality to climate change. A wide range of
future climate scenarios and future years have been modeled and