thrust). Proper maintenance of the propeller can minimize energy losses
due to friction. In addition, propeller coatings are available that
reduce friction on the propeller and lead to energy savings. Because of
the impact of the propeller on the operation of the vessel, a number of
innovative technologies have been developed to increase the efficiency
of the propeller. These technologies include contra-rotating
propellers, azimuth thrusters, ducted propellers, and grim vane wheels.
We request comment on the GHG reductions that may be achieved through
improvements in vessel propulsion efficiency, either through the
approaches listed here or through other approaches.
    Power is also needed to provide electricity to the ship and to
operate auxiliary equipment. Power demand may be reduced through the
use of less energy intensive lighting, improved electrical equipment,
improved reefer systems, crew education campaigns, and automated air-
conditioning systems. We request comment on the opportunities to
provide auxiliary power with reduced GHG emissions.
    In addition, GHG emissions may be released from leaks in air
conditioning or refrigeration systems. There is a large amount of
fluorinated and chlorinated hydrocarbons used in refrigeration and air-
conditioning systems on ships. We request comment on the degree to
which marine vessels emit fluorinated and chlorinated hydrocarbons to
the atmosphere, and on measures that may be taken to mitigate these
emissions.
iii. Reducing GHG Emissions Through Vessel Operational Changes
    In addition to improving the design of the engine and vessel, GHG
emissions may be reduced through operational measures. These
operational measures include reduced speeds, improved routing and fleet
planning, and shore-side power.

    In general, the power demand of a vessel increases with at least
the square of the speed; therefore, a 10 percent reduction in speed
could result in more than a 20 percent reduction in fuel consumption,
and therefore in GHG emissions. An increased number of vessels
operating at slower speeds may be able to transport the same amount of
cargo while producing less GHGs. In some cases, vessels operate at
higher speeds than necessary simply due to inefficiencies in route
planning or congestion at ports. Ship operators may need to speed up to
correct for these inefficiencies. GHG reductions could be achieved
through improved route planning, coordination between ports, and
weather routing systems. GHG reductions may also be achieved by using
larger vessels and through better fleet planning to minimize the time
ships operate at less than full capacity. We request comment on the
extent to which greenhouse gas emissions may be practically reduced
through vessel speed reductions and improved route and fleet planning.
    Many ports have shore-side power available for ships as an
alternative to using onboard engines at berth. To the extent that the
power sources on land are able to produce energy with lower GHG
emissions than the auxiliary engines on the vessel, shore-side power
may be an effective strategy for GHG reduction. In addition to more
traditional power generation units, shore-side power may come from
renewable fuels, nuclear power, fuel cells, windmills, hydro-power, or
geothermal power. We request comment on GHG reductions that could be
achieved through the use of shore-side power.
c. Regulatory Options for Marine Vessels
    EPA could address GHG emissions from marine vessels using
strategies from a continuum of different regulatory tools, including
emission standards, vessel design standards, and strategies that
incorporate a broader range of operational controls. These potential
regulatory strategies are briefly described below. As is the case with
other source categories, EPA is also interested in exploring the
potential applicability of flexible mechanisms such as banking and
credit trading. With regard to ocean-going vessels, we are also
exploring the potential to address GHG emissions through the
International Maritime Organization under a program that could be
adopted as a new Annex to the International Convention for the
Prevention of Pollution from Ships (MARPOL). Those efforts are also
described below. EPA requests comment on the advantages and drawbacks
of each of these regulatory approaches.
    As with trucks and land-based nonroad equipment, the first
regulatory approach we could consider entails setting GHG emission
limits for new marine diesel engines. For engines with per cylinder
displacement up to 30 liters (i.e., Category 1 and Category 2), EPA has
already adopted stringent emission limits for several air pollutants
that may be GHGs, including NOX, methane (through
hydrocarbon standards) and black carbon soot (through PM standards).
This emission control program could be augmented by setting standards
for GHG emissions that could be met through the application of the
technologies described above (e.g., improved engine designs, hybrid
power). We request comment regarding issues that EPA should consider in
evaluating this approach and the most appropriate means to address the
issues raised. We recognize that an engine-based regulatory structure
would limit the potential GHG emission reductions compared to programs
that include vessel technologies and crediting operational
improvements. In the remainder of this section, we consider other
options that would have the potential to provide greater GHG reductions
by providing mechanisms to account for vessel and operational changes.
    A second regulatory approach to address GHG emissions from marine
vessels is to set equipment standards. As described above, these could
take the form of standards that require reduced air and/or water
resistance, improved propeller design, and auxiliary power
optimization. Equipment standards could also address various equipment
onboard vessels, such as refrigeration units. While Annex VI currently
contains standards for ozone depleting substances, this type of control
could be applied more broadly to U.S. vessels that are not subject to
the Annex VI certification requirements.
    A critical characteristic of marine vessels that must be taken into
account when considering equipment standards is that not all marine
vessels are designed alike for the same purpose. A particular hull
design change that would lower GHGs for a tugboat may not be
appropriate for a lobster vessel or an ocean-going vessel. These
differences will have an impact on how an equipment standard would be
expressed. We request comment on how to express equipment standards in
terms of an enforceable limit, and on whether it is possible to set a
general standard or if separate standards would be necessary for
discrete vessel types/sizes. We also request comment on the critical
components of a compliance program for an equipment standard, how it
can be enforced, and at what point in the vessel construction process
it should be applied.
    In addition to the above, the spectrum of regulatory approaches we
outline in section VI.C.2.c for nonroad engines and vehicles could
potentially be applied to the marine sector as well, with corresponding
GHG reductions. These would include: (1) Setting mission-based vessel
standards (such as GHG gram per ton-mile shipping standards) for at
least some marine applications where this can be reliably measured and
administered, (2) allowing vessel changes such as lower resistance hull
designs to generate credits against marine engine-based standards, (3)
granting similar credits for operational measures such as vessel speed
reductions, and (4) further allowing such credits to be used in wider
GHG credit exchange programs. We note too that the implementation
complexities for these approaches discussed in section VI.C.2.c apply
in the marine sector as well, and these complexities increase as
regulatory approaches move further along the continuum away from
engine-based standards.
    Separate from the Annex VI negotiations for more stringent
NOX and PM standards discussed above, the United States is
working with the Marine Environment Protection Committee of the IMO to
explore appropriate ways to reduce CO2 emissions from ships
for several years. At the most recent meeting of the Committee, in
April 2008, the Member States continued their work of assessing short-
and long-term GHG control strategies. A variety of options are under
consideration, including all of those mentioned above. The advantage of
an IMO-based program is that it could provide harmonized international
standards. This is important given the global nature of vessel traffic
and given that this traffic is expected to increase in the future.
4. Aircraft
    In this section we discuss and seek comment on the impact of
aircraft operations on GHG emissions and the potential for reductions
in GHG emissions from these operations. Aircraft emissions are
generated from aircraft used for public, private, and national defense
purposes including air carrier commercial aircraft, air taxis, general
aviation, and military aircraft.

Commercial aircraft include those used for scheduled service
transporting passengers, freight, or both. Air taxis fly scheduled and
for-hire service carrying passengers, freight or both, but they usually
are smaller aircraft than those operated by commercial air carriers.
General aviation includes most other aircraft (fixed and rotary wing)
used for recreational flying, business, and personal transportation
(including piston-engine aircraft fueled by aviation gasoline).
Military aircraft cover a wide range of airframe designs, uses, and
operating missions.
    As explained previously, section 231 of the CAA directs EPA to set
emission standards, test procedures, and related requirements for
aircraft, if EPA finds that the relevant emissions cause or contribute
to air pollution which may reasonably be anticipated to endanger public
health or welfare. In setting standards, EPA is to consult with FAA,
particularly regarding whether changes in standards would significantly
increase noise and adversely affect safety. CAA section 232 directs FAA
to enforce EPA's aircraft engine emission standards, and 49 U.S.C.
section 44714 directs FAA to regulate fuels used by aircraft.
Historically, EPA has worked with FAA and the International Civil
Aviation Organization (ICAO) in setting emission standards and related
requirements. Under this approach international standards have first
been adopted by ICAO, and subsequently EPA has initiated CAA
rulemakings to establish domestic standards that are at least as
stringent as ICAO's standards. In exercising EPA's own standard-setting
authority under the CAA, we would expect to continue to work with FAA
and ICAO on potential GHG emission standards, if we found that aircraft
GHG emissions cause or contribute to air pollution which may reasonably
be anticipated to endanger public health or welfare.
    Over the past 25-30 years, EPA has established aircraft emission
standards covering certain criteria pollutants or their precursors and
smoke; these standards do not currently regulate emissions of
CO2 and other GHGs.\189\ However, provisions addressing test
procedures for engine exhaust gas emissions state that the test is
designed to measure various types of emissions, including
CO2, and to determine mass emissions through calculations
for a simulated aircraft landing and takeoff cycle (LTO). Currently,
CO2 emission data over the LTO cycle is collected and
reported.\190\ Emission standards apply to engines used by essentially
all commercial aircraft involved in scheduled and freight airline
activity.\191\
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    \189\ Our existing standards include hydrocarbon emissions and
CH4 is a hydrocarbon. If CH4 is present in the
engine exhaust, it would be measured as part of the LTO test
procedure. There is not a separate CH4 emission standard
for aircraft engines.
    \190\ Certification information includes fuel flow rates over
the different modes (and there are specified times in modes) of the
LTO cycle. Utilizing this information, the ICAO Engine Emissions
Databank reports kilograms of fuel used during the entire LTO cycle
(see http://www.caa.co.uk/default.aspx?catid=702&pagetype=90).
    \191\ Regulated aircraft engines are used on commercial aircraft
including small regional jets, single-aisle aircraft, twin-aisle
aircraft, and 747s and larger aircraft.
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a. GHG Emissions From Aircraft Operations
    Aircraft engine emissions are composed of about 70 percent
CO2, a little less than 30 percent water vapor, and less
than one percent each of NOX, CO, sulfur oxides
(SOX), non-methane volatile organic carbons (NMVOC),
particulate matter (PM), and other trace components including hazardous
air pollutants (HAPs). Little or no nitrous oxide (N2O)
emissions occur from modern gas turbines. Methane (CH4) may
be emitted by gas turbines during idle and by relatively older
technology engines, but recent data suggest that little or no
CH4 is emitted by more recently designed and manufactured
engines.\192\ By mass, CO2 and water vapor are the major
compounds emitted from aircraft operations that relate to climate
change.
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    \192\ IPCC, Aviation and the Global Atmosphere, 1999, at http://
www.grida.no/climate/ipcc/aviation/index.htm.
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    In 2006, EPA estimated that among U.S. transportation sources,
aircraft emissions constituted about 12 percent of CO2
emissions, and more broadly, about 12 percent of the combined emissions
of CO2, CH4, and N2O. Together
CH4 and N2O aircraft emissions constituted only
about 0.1 percent of the combined CO2, CH4, and
N2O emissions from U.S. transportation sources, and they
make up about one percent of the total aircraft emissions of
CO2, CH4, and N2O.\193\ Aircraft
emissions were responsible for about 4 percent of CO2
emissions from all U.S. sources, and about 3 percent of CO2,
CH4, and N2O emissions collectively. While
aircraft CO2 emissions have declined by about 6 percent
between 2000 and 2006, from 2006 to 2030, the U.S. Department of Energy
projects that the energy use of aircraft will increase by about 60
percent (excluding military aircraft operations).\194\ Commercial
aircraft make up about 83 percent of both CO2 emissions and
the combined emissions of CO2, CH4, and
N2O for U.S. domestic aircraft operations. In addition, U.S.
domestic commercial aircraft activity represents about 24 percent of
worldwide commercial aircraft CO2 emissions. With
international aircraft departures, the total U.S. CO2
emissions from commercial aircraft are about 35 percent of the total
global commercial aircraft CO2 emissions.195 196
Globally, 93 percent of the fuel burn (a surrogate for CO2)
and 92 percent of NOX emissions from commercial aircraft
occur outside of the basic LTO cycle (i.e., operations nominally above
3,000 feet).\197\
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    \193\ U.S. EPA, Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990-2006, April 2008, USEPA 430-R-08-005, available
at http://www.epa.gov/climatechange/emissions/
usinventoryreport.html.
    \194\ Energy Information Administration, Annual Energy Outlook
2008, Report No.: DOE/EIA-0383 (2008), March 2008, available at
http://www.eia.doe.gov/oiaf/aeo/. These Department of Energy
projections are similar to FAA estimates (FAA, Office of Environment
and Energy, Aviation and Emission: A Primer, January 2005, at pages
10 and 23, available at http://www.faa.gov/regulations_policies/
policy_guidance/envir_policy/media/aeprimer.pdf ). The FAA
projections were based on FAA long-range activity forecasts that
assume a constant rate of emissions from aircraft engines in
conjunction with an increase in aviation operations. It does not
take into account projected improvements in aircraft, aircraft
engines, and operational efficiencies.
    \195\ FAA, System for Assessing Aviation's Global Emissions,
Version 1.5, Global Aviation Emissions Inventories for 2000 through
2004, FAA-EE-2005-02, September 2005, available at http://
www.faa.gov/about/office_org/headquarters_offices/aep/models/sage/
.
    \196\ International flights are those that depart from the U.S.
and arrive in a different country.
    \197\ FAA, System for Assessing Aviation's Global Emissions,
Version 1.5, Global Aviation Emissions Inventories for 2000 through
2004, FAA-EE-2005-02, September 2005, at page 10, at Table 3,
available at http://www.faa.gov/about/office_org/headquarters_
offices/aep/models/sage/.
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    The compounds emitted from aircraft that directly relate to climate
change are CO2, CH4, N2O and, in
highly specialized applications, SF6.\198\ Aircraft also
emit other compounds that are indirectly related to climate change such
as NOX, water vapor, and PM. NOX is a precursor
to cruise-altitude ozone, which is a GHG. An increase in ozone also
results in increased tropospheric hydroxyl radicals (OH) which reduces
ambient CH4, thus potentially at least partially offsetting
the warming effect from the increase in ozone. Water vapor and PM
modify or create cloud cover, which in turn can either amplify or

dampen climate change.\199\ Contrails are unique to aviation
operations, and persistent contrails are of interest because they
increase cloudiness.\200\ The IPCC Fourth Assessment Report (2007) has
characterized the level of scientific understanding as low to very low
regarding the radiative forcing of contrails and aviation induced
cirrus clouds.\201\ EPA requests information on the climate change
compounds emitted by aircraft and the scientific understanding of their
climate effects, including contrail formation and persistence.
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    \198\ SF6 is used as an insulating medium in the
radar systems of some military reconnaissance planes. 2006 IPCC
Guidelines for National Greenhouse Gas Inventories, Volume 3,
Industrial Processes and Product Use, Chapter 8, Other Product
Manufacture and Use, Section 8.3, Use of SF6 and HFCs in
Other Products; http://www.ipcc-nggip.iges.or.jp/public/2006gl/
index.htm.
    \199\ IPCC, Climate Change 2007--The Physical Science Basis,
Contribution of Working Group I to the Fourth Assessment Report of
the IPCC, Chapter 2, Changes in Atmospheric Constituents and in
Radiative Forcing.
    \200\ EPA, Aircraft Contrails Factsheet, EPA430-F-00-005,
September 2000, developed in conjunction with NASA, the National
Oceanic and Atmospheric Administration (NOAA), and FAA, available at
http://www.epa.gov/otaq/aviation.htm.
    \201\ IPCC, Climate Change 2007--The Physical Science Basis,
Contribution of Working Group I to the Fourth Assessment Report of
the IPCC, Chapter 2, Changes in Atmospheric Constituents and in
Radiative Forcing, (page 202).
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b. Potential for GHG Reductions From Aircraft Operations
    There are both technological controls and operational measures
potentially available to reduce GHG emissions from aircraft and
aircraft operations. These are discussed below.
i. Reducing GHG Emissions Through Aircraft Engine Changes
    Fuel efficiency and therefore GHG emission rates are closely linked
to jet aircraft engine type (e.g., high bypass ratio) and choice of
engine thermodynamic cycles (e.g., pressure and temperature ratios),
but modifications in the design of the engine's combustion system can
also have a substantial effect on the composition of the exhaust.\202\
Turbofan engines, with their high bypass ratios and increased
temperatures, introduced in the 1970s and 1980s reduced CO2,
HC, and CO emissions, but in many cases put upward pressure on
NOX emission rates. Also, a moderate increase in the engine
bypass ratio (high bypass turbofan) decreases fuel burn (and
CO2) by enhancing propulsive efficiency and reduces noise by
decreasing exhaust velocity, but it may lead to increased engine
pressure ratio and potentially higher NOX. \203\ There is no
single relationship between NOX and CO2 that
holds for all engine types. As the temperatures and pressures in the
combustors are increased to obtain better efficiency, emissions of
NOX increase, unless there is also a change in combustor
technology.\204\ There are interrelationships among the different
emissions and noise to be considered in engine design.
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    \202\ IPCC, Aviation and the Global Atmosphere, 1999, at
Aircraft Technology and Its Relation to Emissions, at page 221, at
section 7.1, available at http://www.grida.no/climate/ipcc/aviation/
index.htm.
    \203\ ICCIA, Technical Design Interrelationships, Presentation
by Dan Allyn, ICCAIA Chair, at Aviation and the Environment
Conference, March 19, 2008, available at http://www.airlines.org/
government/environment/
Aviation+and+the+Environment+Conference+Presentations.htm.
    \204\ IPCC, Aviation and the Global Atmosphere, 1999, at
Aircraft Technology and Its Relation to Emissions, at page 237, at
section 7.5.6, available at http://www.grida.no/climate/ipcc/
aviation/index.htm.
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    The three major jet engine manufacturers in the world are General
Electric (GE), Pratt and Whitney, and Rolls-Royce. All of these
manufacturers supply engines to both U.S. and non-U.S. aircraft
manufacturers, and their engines are installed on aircraft that operate
worldwide. These three manufacturers are now (or will be in the future)
producing more fuel efficient (lower GHG) engines with improved
NOX. The General Electric GEnx jet engine is being developed
for the new Boeing 787, and GE's goal is to have the GEnx engine meet
NOX levels 50 percent lower than the ICAO standards approved
in 2005.\205\ The combustor technology GE is employing is called the
Twin Annular, Pre-mixing Swirler (TAPS) combustor. In addition, the
GEnx is expected to improve specific fuel consumption by 15 percent
compared to the previous generation of engine technology (GE's CF6
engine).\206\
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    \205\ The NOX standards adopted at the sixth meeting
of ICAO's Committee on Aviation Environmental Protection (CAEP) in
February 2004 were approved by ICAO in 2005.
    \206\ General Electric, Press Release, Driving GE Ecomagination
with the Low-Emission GEnx Jet Engine, July 20, 2005, available at
http://www.geae.com/aboutgeae/presscenter/genx/genx_20050720.html.
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    Pratt and Whitney has developed the geared turbofan technology that
is expected to deliver 12 percent reduction in fuel burn while emitting
half of the NOX emissions compared to today's engines. In
addition to an advanced gear system, the new engine design includes the
next generation technology for advanced low NOX (TALON). The
rich-quench-lean TALON combustor utilizes advanced fuel/air atomizers
and mixers, metallic liners, and advanced cooling management to
decrease NOX emissions during the LTO and high-altitude
cruise operations. Flight testing of the engine is expected this year,
and introduction into service is expected in 2012.\207\ Mitsubishi
Heavy Industries has chosen the engine for its regional
jet.208 209
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    \207\ Engine Yearbook, Pratt & Whitney changing the game with
geared turbofan engine, 2008, at page 96.
    \208\ Aviation, Japanese Airliner to Introduce PW's New Engine
Technology, by Chris Kjelgaard, October 9, 2007, available at http:/
/www.aviation.com/technology/071009-pw-geared-turbofan-powering-
mrj.html.
    \209\ The New York Times, A Cleaner, Leaner Jet Age Has Arrived,
by Matthew L. Wald, April 9, 2008, available at http://
www.nytimes.com/2008/04/09/technology/techspecial/09jets.html?_
r=1&ex=1208491200&en=6307ad7d1372acdf&ei=5070&emc=eta1&oref=slogin.
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    Rolls-Royce's Trent 1000 jet engine will power the Boeing 787s on
order for Virgin Atlantic airlines. The Trent 1000 powered 787 is
expected to improve fuel consumption by up to 15 percent compared to
the previous generation of engines (Rolls-Royce's Trent 800
engine).\210\ The technology in the Trent 1000 improves the operability
of the compressors, and enables the engine to run more efficiently at
lower speeds. This contributes to better fuel burn, especially in
descent.\211\
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    \210\ Rolls-Royce, Trent and the environment, available at
http://www.rolls-royce.com/community/downloads/trent_env.pdf and
the Rolls-Royce environmental report, Powering a better world:
Rolls-Royce and the environment, 2007, available at http://
www.rolls-royce.com/community/environment/default.jsp.
    \211\ Green Car Congress, Rolls-Royce Wins $2.6B Trent 1000
Order from Virgin Atlantic; The Two Launch Joint Environmental
Initiative, March 3, 2008, available at http://
www.greencarcongress.com/2008/03/rolls-royce-win.html.
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ii. Reducing GHG Emissions Through Aircraft Changes
    Aircraft (or airframe) efficiency gains are mainly achieved through
aerodynamic drag and weight reduction.\212\ Most of the fuel used by
aircraft is needed to overcome aerodynamic drag, since they fly at very
high speeds. Reduction of aerodynamic drag can substantially improve
the fuel efficiency of aircraft thus reducing GHG emissions.
Aerodynamic drag can be decreased by installing add-on devices, such as
film surface grooves, hybrid laminar flow technology, blended winglets,
and spiroid tips, and GHG emissions can be reduced by each of these
measures from 1.6 to 6 percent.

Further discussion of these devices is provided below.

    \212\ U.S. Department of Transportation, Best Practices
Guidebook for Greenhouse Gas Reductions in Freight Transportation--
Final Report, Prepared for U.S. Department of Transportation via
Center for Transportation and the Environment, Prepared by H.
Christopher Frey and Po-Yao Kuo, Department of Civil, Construction,
and Environmental Engineering, North Carolina State University,
October 4, 2007, available at http://www4.ncsu.edu/~frey/Frey_Kuo_
071004.pdf.
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    --Film surface grooves: This technology is undergoing testing, and
it is an adhesive-backed film with micro-grooves placed on the outer
surfaces of the wings and the fuselage of the aircraft. Film surface
grooves are estimated to reduce total aerodynamic drag and GHG
emissions by up to 1.6 percent.
    --Hybrid laminar flow technology: Contamination on the airframe
surface, such as the accumulation of ice, insects or other debris,
degrades laminar flow. A newly developed concept, hybrid laminar flow
technology (replace turbulent air flow), integrates approaches to
maintain laminar flow. This technology can reduce fuel use by 6 to 10
percent and potentially GHG emissions by 6 percent.
    --Blended winglets: A blended winglet is a commercially available
wing-tip device that can decrease lift-induced drag. This technology is
an extension mounted at the tip of a wing. The potential decreases in
both GHG emissions and fuel use are estimated to be 2 percent.
    --Spiroid tip: A spiroid tip has been pilot tested and, similar to
blended winglets, it is intended to reduce lift-induced drag. This
technology is a spiral loop formed by joining vertical and horizontal
winglets. Greenhouse gas emissions and fuel use are both potentially
estimated to be decreased by 1.7 percent.

    Reductions in the weight of an aircraft by utilizing light-weight
materials and weight reduction of non-essential components could lead
to substantial decreases in fuel use. The weight of an airframe is
about 50 percent of an aircraft's gross weight. The use of advanced
lighter and stronger materials in the structural components of the
airframe, such as aluminum alloy, titanium alloy, and composite
materials for non-load-bearing structures, can decrease airframe
weight. These materials can reduce structural weight by 4 percent. The
potential reduction in greenhouse gas emissions and fuel use are
estimated to both be 2 percent.
iii. Reducing GHG Emissions Through Operational Changes
    Rising jet fuel prices tend to drive the aviation industry to
implement practices to decrease fuel usage and lower fuel usage reduces
GHG emissions.\213\ Indeed this has occurred in the recent past where
several airlines have reduced flights and announced plans to retire
older aircraft. However, such practices are voluntary, and there is no
assurance that such practices would continue or not be reversed in the
future. Technology developments for lighter and more aerodynamic
aircraft and more efficient engines which reduce aircraft fuel
consumption and thus GHG emissions are expected to improve in the
future. However, technology changes take time to find their way into
the fleet. Aircraft and aircraft engines operate for about 25 to 30
years.
---------------------------------------------------------------------------

    \213\ According to the Energy Information Administration, jet
fuel prices increased by about 140 percent from 2000 to 2007 (see
http://tonto.eia.doe.gov/dnav/pet/hist/rjetnyhA.htm.).
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    Air traffic management and operational changes are governed by FAA.
The FAA, in collaboration with other agencies, is in the process of
developing the next generation air transportation system (NextGen), a
key environmental goal of which is to decrease aviation's contribution
to GHG emissions by reducing aviation system-induced congestion and
delay and accelerating air traffic management improvements and
efficiencies. As will be discussed below, measures of this type
implemented together with technology changes may be a way to reduce GHG
emissions in the near term. A few examples of the advanced systems/
procedures and operational measures are provided below.
    Reduced Vertical Separation Minimum (RSVM) allows air traffic
controllers and pilots to reduce the standard required vertical
separation from 2,000 feet to 1,000 feet for aircraft flying at
altitudes between 29,000 and 41,000 feet. This increases the number of
flight altitudes at which aircraft maximize fuel and time efficiency.
RSVM has led to about a 2 percent decrease in fuel burn.\214\
Continuous Descent Approach is a procedure that enables continuous
descent of the aircraft on a constant slope toward landing, as opposed
to a staggered or staged approach, thus allowing for a more efficient
speed requiring less fuel and reducing GHG emissions. Aircraft
auxiliary power units (APUs) are engine-driven generators that supply
electricity and pre-conditioned cabin air for use aboard the aircraft
while at the gate. Ground-based electricity sources or electrified
gates combined with preconditioned air supplies can reduce APU fuel use
and thus CO2 emissions substantially. Single-engine taxiing,
a practice already used by some airlines, could be utilized more
broadly to reduce CO2 emissions.\215\ Fuel consumption, and
thus GHG emissions, could be reduced by decreasing the aircraft weight
by reducing the amount of excess fuel carried. More efficient routes
and aircraft speeds would be directly beneficial to reducing full
flight GHG emissions. Operational safety must be considered in the
application of all of these measures.
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    \214\ PARTNER, Assessment of the impact of reduced vertical
separation on aircraft-related fuel burn and emissions for the
domestic United States, PARTNER-COE-2007-002, November 2007,
available at web.mit.edu/aeroastro/partner/reports/rsvm-caep8.pdf.
    \215\ ICAO, Operational Opportunities to Minimize Fuel Use and
Reduce Emissions, Circular 303 AN/176, February 2004, available at
http://www.icao.int/icao/en/m_publications.html.
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    In regard to the above three sections, we request information on
potentially available technological controls (technologies for
airframes, main engines, and auxiliary power units) and operational
measures to reduce GHG emissions from aircraft operations. Since FAA
currently administers and implements air traffic management and
operational procedures, EPA would share information on these items with
FAA.
    Efforts are underway to potentially develop alternative fuels for
aircraft in the future. Industry (manufacturers, operators and
airports) and FAA established the Commercial Aviation Alternative Fuels
Initiative (CAAFI) in 2006 to explore the potential use of alternative
fuels for aircraft for energy security and possible environmental
improvements. CAAFI's goals are to have available for certification in
2008 a 50 percent Fischer-Tropsch synthetic kerosene fuel, 2010 for 100
percent synthetic fuel, and as early as 2013 for other biofuels.
However, any alternative fuel would need to be compatible with current
jet fuel for commercial aircraft to prevent the need for tank and
system flushing on re-fueling and to meet comprehensive performance and
safety specifications. In February 2008, Boeing, General Electric, and
Virgin Atlantic airlines tested a Boeing 747 that was partly powered by
a biofuel made from babassu nuts and coconut oil, a first for a
commercial aircraft.
    EPA requests information on decreasing aircraft emissions related
to climate change through the use of alternative fuels, including what
is feasible in the near-term and long-term and information regarding
safety, distribution and storage of fuels at airports, life-cycle
impacts, and cost information. Given the Agency's work to develop a
lifecycle methodology for fuels as required by the Energy Independence
and Security Act, EPA also is interested in information on the
lifecycle impacts of alternative fuels.

c. Options To Address GHG Emissions From the Aviation Sector
    In the preceding nonroad sections, we have described a continuum of
regulatory approaches that take us from traditional engine standards
through a range of potential approaches for vehicle standards and even
potential mechanisms to credit operational changes. For commercial
aircraft, although the reasons to consider such continuum are just as
valid, the means to accomplish these could be simpler. We see at least
two potential basic approaches for regulating aircraft GHG emissions
under the CAA, engine emission standards or a fleet average standard.
These approaches are discussed further below.
    The first approach we can consider is setting emission standards as
an extension of our current program. Under this approach we would
establish, for example, CO2 exhaust emission standards and
related requirements for all newly and previously certified engines
applicable in some future year and later years. These standards could
potentially cover all phases of flight. Depending on timing, this first
set of standards could effectively be used to either establish baseline
values and/or to require reductions.
    As described earlier, ICAO and EPA currently require measurement
and reporting of CO2 emissions during engine exhaust gaseous
emissions testing for the current certification cycle (although the
current absence of this information for other GHGs does not rule out a
similar approach for those GHGs).\216\ Although test procedures for
measuring CO2 are in place already and LTO cycle
CO2 data exists, test requirements to simulate full-flight
emissions are a significant consideration. Further work is needed to
determine how CO2 and other GHG emissions measured over the
various modes of LTO cycle might be used to as a means to estimate or
simulate cruise or full-flight emissions. A method has been developed
by ICAO for determining NOX for climb/cruise operations
(outside the LTO) based on LTO data, and this could be a good starting
point.217 218 For CO2, and potentially
NOX and other GHGs as well, the climb/cruise methods could
then be codified as test procedures, and we could then establish
emission standards for these GHGs. We request comments on the need to
develop a new test procedure for aircraft engines and the best approach
to developing such a procedure, including the viability and need for
altitude simulation tests for emissions certification.
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    \216\ EPA's regulations at 40 CFR 87.62 require testing at each
of the following operating modes in order to determine mass emission
rates: taxi/idle, takeoff, climbout, descent and approach.
    \217\ ICAO, CAEP/7 Report, Working Paper 68, CAEP/7-WP/68,
February 2007, see http://www.icao.int.
    \218\ ICAO has deferred work on using the NOX climb/
cruise method for a certification procedure and standards since
future engines (potential new technologies) may behave in a
different way. There may need to be future work to consider the
aircraft mission, taking into account all phases of flight and the
performance of the whole aircraft.
---------------------------------------------------------------------------

    Furthermore, to drive the development of engine technology, we
could pursue near- and long-term GHG exhaust emission standards. Near-
term standards, which could for example apply 5 years from their
promulgation, would encourage engine manufacturers to use the best
currently available technology. Long-term standards could require more
significant reductions in emissions beyond the near-term values. In
both cases, new standards could potentially apply to both newly and
previously certified engines, but possibly at different levels and
implementation dates based on lead time considerations. Under this
approach, we would expect that no engines would be able to be produced
indefinitely if they did not meet the new standards, except possibly
based on the inclusion of an emissions averaging program for GHG as
discussed below.
    For emission standards applied to other mobile sources, EPA has
often incorporated emission averaging, banking and trading (ABT)
programs to provide manufacturers more flexibility in phasing-in and
phasing-out engine models as they seek to comply with emission
standards. In these types of programs, the average emissions within a
manufacturer's current year product line are required to meet the
applicable standard, which allows a manufacturer to produce some
engines with emission levels above the standard provided they are
offset with some below the standard. The calculation for average
compliance is usually sales, activity, and power weighted. In addition,
emissions credits and debits may be generated, banked and traded with
other engine manufacturers. We request comment on the approaches to
engine standards for reducing GHG emissions and an engine ABT program
for new GHG emission standards, including whether certain GHGs, such as
CO2, are more amenable than are other GHGs to being addressed by such a
program.
    As part of this option, we could pursue new standards and test
procedures for PM that would encompass LTO and climb/cruise operations
(ICAO and EPA currently do not have test procedures or emission
standards for PM from aircraft), if we find that aircraft PM emissions
cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare.\219\ Work has been
underway for several years under the auspices of the Society of
Automotive Engineers E-31 Committee, and EPA/FAA are working actively
with this committee to bring forth a draft recommended test procedure.
In addition, requirements could potentially be proposed and adopted
using the same approach as discussed above for GHGs for near- and long-
term standards and newly and already certified engines.
---------------------------------------------------------------------------

    \219\ As mentioned earlier, PM modifies or creates cloud cover,
which in turn can either amplify or dampen climate change. Aircraft
are also a source of PM emissions that contribute to local air
quality near the ground, and the public health and welfare effects
from these emissions are an important consideration.
---------------------------------------------------------------------------

    In the preceding nonroad sections, we have discussed several
approaches or variations on approaches to include vehicle and
operational controls within a GHG emission control program for nonroad
equipment. In doing so, we have not discussed direct regulation of
equipment or fleet operators. Instead, we have focused on approaches
that would credit fleet operators for improvements in operational
controls within a vehicle or engine GHG standards program. Those
approaches described in section VI.C.2 could apply to aircraft GHG
emissions as well, and we request comments on the potential to apply
those approaches to aircraft.
    As a second approach, in the case of aircraft, it may be more
practical and flexible to directly regulate airline fleet average GHG
emissions. Under such an approach we would set a declining fleet
average GHG emission standard for each airline, based on the GHG
emission characteristics of its entire fleet. This would require GHG
certification emission information for all engines in the fleet from
the aircraft engine manufacturers and information on hours flown and
average power (e.g., thrust). Airlines would have GHG emission
baselines for a given year based on the engine emission characteristics
of their fleet, and beginning in a subsequent year, airlines would be
required to reduce their emissions at some annual rate, at some rolling
average rate, or perhaps to some prescribed lower level in a future
year. This could be done as a fleet average GHG emission standard for
each airline or through a surrogate measure of GHGs such as airline
total fuel consumption, perhaps adjusted for flight activity in some
way. This could

cover all domestic operations and international departures of domestic
airlines. The fleet average program could potentially be implemented in
the near term since it is not as reliant on lead times for technology
change.
    Although we might develop such a declining fleet average emissions
program based on engine emissions, an operational declining fleet
average program could potentially be designed to consider the whole
range of engine, aircraft and operational GHG control opportunities
discussed above. Under this approach compliance with a declining fleet
average standard would be based not only on parameters such as engine
emission rates and activity, but could also consider efficiencies
gained by use of improved operational controls. It is important to note
that as part of this approach, a recordkeeping and reporting system
would need to be established for airlines to measure and track their
annual GHG emissions. Perhaps this could be accomplished through a
surrogate measure of GHGs such as airline total fuel consumption. Today
each airline reports its annual fuel consumption to the Department of
Transportation. We request comment on the operational fleet average GHG
emission standard concept, how it could be designed and implemented,
what are important program design considerations, and what are
potential metrics for establishing standards and determining
compliance. While we have discussed two basic concepts above, we invite
comment and information on any other approaches for regulating aircraft
GHG emissions.
d. Other Considerations
    We are aware that the European Commission (EC) has proposed a
program to cap aviation-related CO2 emissions (cap is 100%
of sector's emissions during 2004-2006). They would by 2012 include
CO2 emissions from all flights arriving at and departing
from European airports, including U.S.-certified aircraft, in the
European Union Emissions Trading Scheme (ETS).220, 221 If
the proposal is adopted, airlines from all countries (EU and non-EU)
will be required to submit allowances to cover emissions from all such
aircraft flights over the compliance period (e.g., 5 years). The EU has
expressed some interest in developing a program to waive this
requirement for foreign-flagged carriers (non-EU carriers) whose
nations develop ``equivalent'' measures. The petitioners discussed this
program, and we invite comments on it.
---------------------------------------------------------------------------

    \220\ Commission Proposal for a Directive of the European
Parliament and of the Council amending Directive 2003/87/EC so as to
include aviation activities in the scheme for greenhouse gas
emission allowance trading within the Community, 2006/0304 (COD),
COM(2006) 818 final, December 20, 2006, available at http://eur-
lex.europa.eu/smartapi/cgi/sga_
doc?smartapi!celexplus!prod!DocNumber&1g=en&type_doc=COMfinal&an_
doc=2006ν_doc=818.
    \221\ Proposal for a Directive of the European Parliament and of
the Council amending Directive 2003/87/EC so as to include aviation
activities in the scheme for greenhouse gas emission allowance
trading within the Community--Political agreement, December 21, 2007
available at http://register.consilium.europa.eu/pdf/en/07/st16/
st16855.en07.pdf.
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    The 36th Session of ICAO's Assembly met in September 2007 to focus
on aviation emissions related to climate change, including the use of
emissions trading.\222\ In response to the EC's proposed aviation
program, the Assembly agreed to establish a high-level group through
ICAO to develop a framework of action that nations could use to address
these emissions. A report with recommendations is due to be completed
before the next Assembly Session in 2010. In addition, the Assembly
urged all countries to not apply an emissions trading system to other
nations' air carriers except on the basis of mutual consent between
those nations.\223\
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    \222\ ICAO, Assembly--36th Session, Report of the Executive
Committee on Agenda Item 17, A36-WP/355, September 27, 2007.
    \223\ ICAO, Assembly--36th Session, Report of the Executive
Committee on Agenda Item 17, A36-WP/355, September 27, 2007.
---------------------------------------------------------------------------

    To address greenhouse gas emissions, ICAO's focus currently appears
to be on the continued development of guidance for market-based
measures.\224\ These measures include emissions trading (for
CO2), environmental levies, and voluntary measures.
Emissions trading is when an overall target or cap is established and a
market for carbon is set. This approach allows participants to buy and
sell allowances, the price of which is established by the market.
Environmental levies include taxes and charges with the objective of
generating an economic incentive to decrease emissions. Voluntary
measures are unilateral actions by industry or in an agreement between
industry and government to decrease emissions beyond the base case.
Note, for ICAO's efforts on CO2 emission charges, it
evaluated an aircraft efficiency parameter, and in early 2004 ICAO
decided that there was not enough information available at the time to
create a parameter that correlated properly with aircraft/engine
performance.\225\ However, it is important to note, that unlike EPA,
ICAO has not been petitioned under applicable law to determine whether
GHG emissions from aircraft may reasonably be anticipated to endanger
public health or welfare or to take any action if such a finding is
made. We invite information on reducing overall emissions that relate
to climate change from aircraft through a cap-and-trade system or other
market-based system.
---------------------------------------------------------------------------

    \224\ ICAO, ICAO Environmental Report 2007, available at http://
www.icao.int/env/.
    \225\ ICAO, CAEP/6 Report, February 2004, available at http:/
www.icao.int.
---------------------------------------------------------------------------

    Another consideration in the GHG program is the regulation of
emissions from engines commonly used in general aviation aircraft. As
indicated earlier, our current aircraft engine requirements apply to
gas turbine engines that are mainly used by commercial aircraft, except
in cases where general aviation aircraft sometimes use commercial
engines. Our requirements do not currently apply to many engines used
in business jets or to piston-engines used in aircraft that fall under
the general aviation category, although our authority under the Clean
Air Act extends to any aircraft emissions for which we make the
prerequisite finding that those emissions cause or contribute to air
pollution which may reasonably be anticipated to endanger public health
or welfare.\226\ In 2006, general aviation made up about one percent of
the CO2 emissions from U.S. domestic transportation sources,
and about 8 percent of CO2 emissions from U.S. domestic
aircraft operations.\227\ Regulating GHG emissions from this sector of
aviation would require the development of test procedures and emission
standards. EPA requests comment on this matter and on any elements we
should consider in potentially establishing test procedures and
emission standards for these currently unregulated engines.
---------------------------------------------------------------------------

    \226\ As specified in 40 CFR 87.10, our emission standards apply
to different classes of aircraft gas turbine engines, which have a
particular minimum rated output. The engine class and rated output
specifications correspond to certain engine operational or use
practices, but we do not, by the terms of the rule, exempt general
aviation aircraft or engines as such.
    \227\ U.S. EPA, Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990-2006, April 2008, USEPA 430-R-08-005, available
at http://www.epa.gov/climatechange/emissions/
usinventoryreport.html.
---------------------------------------------------------------------------

5. Nonroad Sector Summary
    There are a number of potential approaches for reducing GHG
emissions from the nonroad sector within the regulatory structure of
the CAA. In considering our next steps to address GHG emissions from
this sector, we seek comment on all of the issues raised in this notice
along with recommendations

on the most appropriate means to address the issues.

D. Fuels

1. Recent Actions Which Reduce GHG Impacts of Transportation Fuels
    Historically under Title II of the CAA, EPA has treated vehicles,
engines and fuels as a system. The interactions between the designs of
vehicles and the fuels they use must be considered to assure optimum
emission performance at minimum cost. While EPA continues to view its
treatment of vehicles, engines and fuels as a system as appropriate, we
request comment on whether it would continue to be advantageous to take
this approach for the purpose of controlling GHG emissions from the
transportation sector. This section describes existing authorities
under the CAA for regulating the GHG emissions contribution of fuels.
In this discussion, we ask for comment on the combination of
authorities that would suit the goal of GHG emission reductions from
transportation fuel use.
    In response to CAA section 211(o) adopted as part of the Energy
Policy Act of 2005 (Energy Act of 2005), EPA issued regulations
implementing a Renewable Fuels Standard (RFS) program (72 FR 23900, May
1, 2007). These regulations were designed to ensure that 4.0 billion
gallons of renewable fuel were used in motor vehicles beginning in
2006, gradually increasing to 7.5 billion gallons in 2012. While the
primary purpose of this provision of the Energy Act of 2005 was to
reduce U.S. dependence on petroleum-based fuel and promote domestic
sources of energy, EPA analyzed the extent to which reductions in GHG
emissions would also result from the new RFS program. Therefore, for
the first time in a major rule, EPA presented estimates of the GHG
impacts of replacing petroleum-based transportation fuel with fuel made
from renewable feedstocks.
    In December 2007, EISA revised section 211(o) to set three specific
volume standards for biomass-based diesel, cellulosic biofuel, and
advanced biofuel as well as a total renewable fuel standard of 36
billion gallons annually by 2022. Certain eligible fuels must also meet
specific GHG performance thresholds based upon a lifecycle GHG
assessment. In addition to being limited to renewable fuels, EISA puts
constraints on what land sources can be used to produce the renewable
fuel feedstock, requires assessment of both primary and significant
secondary land use impacts as part of the required lifecycle GHG
emissions assessment, and has a number of other specific provisions
that affect both the design of the rule and the required analyses. EISA
requires that EPA adopt rules implementing these provisions by January
2009.
    The U.S. federal government is not alone in considering or pursuing
fuel changes which can result in reductions of GHG emissions from the
transportation sector California is moving toward adopting a low carbon
fuel standard that it anticipates will result in significant reductions
in GHG emissions through such actions as increasing the use of
renewable fuel and requiring refiners to offset any emission increases
that might result from changes in crude oil supply. Canada, the
countries of the European Union, and a number of other nations are
considering or in the process of requiring fuel changes as part of
their strategy to reduce GHG emissions from the transportation sector.
2. GHG Reductions Under CAA Section 211(o)
    The two principal CAA authorities available to EPA to regulate
fuels are sections 211(c) and 211(o). As explained in previously,
section 211(o), added by the Energy Act of 2005 and amended by EISA,
requires refiners and other obligated parties to assure that the
mandated volumes of renewable fuel are used in the transportation
sector. Section 211(o) only addresses renewable fuels; other
alternative fuels such as natural gas are not included nor are any
requirements imposed on the petroleum-based portion of our
transportation fuel pool. EPA is authorized to waive or reduce required
renewable fuel volumes specified in EISA under certain circumstances,
and is also authorized to establish required renewable fuel volumes
after the years for which volumes are specified in the Act (2012 for
biomass-based diesel and 2022 for total renewable fuel, cellulosic
biofuel and advanced biofuel). One of the factors EPA is to consider in
setting standards is the impact of production and use of renewable
fuels on climate change. In sum, EPA has limited discretion under
211(o) to improve GHG performance of fuels.
    Changes in fuel feedstock sources (for example, petroleum versus
biomass) and processing technologies can have a significant impact on
GHG emissions when assessed on a lifecycle basis. As analyzed in
support of the RFS rules, a lifecycle approach considers the GHG
emissions associated with producing a fuel and bringing it to market
and then attributes those emissions to the use of that fuel. In the
case of petroleum, the lifecycle would account for emissions resulting
from extraction of crude oil, shipping the oil to a refiner, refining
the oil into a fuel, distributing the fuel to retail markets and
finally the burning the gasoline or diesel fuel in an engine. This
assessment is sometimes referred to as a ``well-to-wheels'' assessment.
A comparable assessment for renewable fuel would include the process of
growing a feedstock such as corn, harvesting the feedstock,
transferring it to a fuel production facility, turning the feedstock
into a fuel, getting the renewable fuel to market and then assessing
its impact on vehicle emissions. EPA presented estimates of GHG impacts
as part of the assessment for the Energy Act of 2005 RFS rulemaking
that increasing renewable fuel use from approximately 4 billion gallons
to 7.5 billion gallons by 2012. However, as noted below, the
methodology used in that RFS rulemaking did not consider a number of
relevant issues.
    The 7.5 billion gallons of renewable fuel required by the Energy
Act of 2005 program represents a relatively small portion of the total
transportation fuel pool projected to be used in 2012 (add figure as %
of energy). The much larger 36 billion gallons of renewable fuel
required by EISA for 2022 would be expected to displace a much larger
portion of the petroleum-based fuel used in transportation and would
similarly be expected to have a greater impact on GHG emissions.
Comments on the RFS proposal suggested improvements to the lifecycle
assessment used in that rule. For instance, the RFS analysis did not
fully consider the impact of land use changes both domestically and
abroad that would likely result from increased demand for corn and
soybeans as feedstock for ethanol and biodiesel production in the U.S.
EPA largely agreed with these comments but was not able to incorporate
a more thorough assessment of land use impacts and other enhancements
in its lifecycle emissions modeling in time. We are undertaking such a
lifecycle assessment as we develop the proposal to implement EISA fuel
mandates. Because this updated lifecycle assessment will incorporate
more factors and the latest data, it will undoubtedly change the
estimates of GHG reductions included in the Energy Act 2005 RFS
package.
    EISA recognizes the importance of distinguishing between renewable
fuels on the basis of their impact on lifecycle GHG emissions.
Nevertheless, EISA stops short of directly comparing and crediting each
fuel on the basis of its

estimated impact on GHG emissions. For example, while requiring a
minimum of 60% GHG emission reduction for cellulosic biomass fuel
compared to the petroleum-based fuel displaced, EISA does not
distinguish among the multiple pathways for producing cellulosic
biofuel even though these pathways might differ significantly in their
lifecycle GHG emission performance. It may be that the least costly
fuels meeting the cellulosic biofuel GHG performance threshold will be
produced which may not be the fuels with the greatest GHG benefit or
even the greatest GHG benefit when considering cost (e.g., GHG
reduction per dollar cost). The same consideration applies to other
fuels and pathways. Without further delineating fuels on the basis of
their lifecycle GHG impact, no incentive is provided for production of
particular fuels which would minimize lifecycle GHG emissions within
the EISA fuel categories.
    We request comment on the importance of distinguishing fuels beyond
the categories established in EISA and how an alternative program might
further encourage the development and use of low GHG fuels. We also
request comment on the ability (including considerations of uncertainty
and the measurement of both direct and indirect emissions associated
with the production of fuels) of lifecycle analysis to estimate the GHG
emissions of a particular fuel produced and used for transportation and
how EPA should delineate fuels (e.g., on the basis of feedstock,
production technology, etc.). EPA notes that a certain level of
aggregation in the delineation of fuels may be necessary, but that the
greater the aggregation in the categories of fuels, the fewer
incentives exist for changes in behavior that would result in
reductions of GHG emissions. EPA asks for comment on this idea as well
as how and whether methods for estimating lifecycle values for use in a
regulatory program can take into account the dynamic nature of the
market. EPA also requests comment on the relative efficacy of a
lifecycle-based regulatory approach versus a price-based (e.g., carbon
tax or cap and trade) approach to incentivize the multitude of actors
whose decisions collectively determine the GHG emissions associated
with the production, distribution and use of transportation fuels.
Finally, we request comment on the ability to determine lifecycle GHG
performance for fuels and fuel feedstocks that are produced outside the
U.S.
    EISA addresses impacts of renewable fuels other than GHG impacts.
Section 203 of EISA directs that the National Academy of Sciences be
asked to consider the impacts on producers of feed grains, livestock,
and food and food products, energy producers, individuals and entities
interested in issues relating to conservation, the environment and
nutrition, users and consumers of renewable fuels, and others
potentially impacted. Section 204 directs EPA to lead a study on
environmental issues, including air and water quality, resource
conservation and the growth and use of cultivated invasive or noxious
plants. We request comment on what impacts other than GHG impacts
should be considered as part of a potential fuels GHG regulation and
how such other impacts should be reflected in any policy decisions
associated with the rule. These impacts could include the potential
impacts on food prices and supplies.
    Programs under section 211(o) are subject to further limitations.
Limited to renewable fuels, these programs do not consider other
alternative fuels such as coal-to-liquids fuel that could be part of
the transportation fuel pool and could impact the lifecycle GHG
performance of the fuel pool. Additionally, EISA's GHG performance
requirements are focused on the renewable fuels, not the petroleum-
based fuel being replaced. Under EISA, the GHG performance of renewable
fuels is tied to a 2005 baseline for petroleum fuel. No provision is
included for considering how the GHG impacts of the petroleum-based
fuel pool might change over time, either for the purpose of determining
the comparative performance for threshold compliance of renewable fuels
or for assessing the impact of the petroleum fuel itself on
transportation fuel GHG emissions. Thus, for example, there is no
opportunity under EISA to recognize and credit improvements in refinery
operation which might improve the lifecycle GHG performance of the
petroleum-based portion of the transportation fuel pool. Comments are
requested on the importance of lowering GHG emissions from
transportation fuels via the inclusion of alternative, non-renewable
fuels in a GHG regulatory program as well as the petroleum portion of
the fuel pool, thus providing opportunity to reflect improvements in
refinery practices.
    Finally while the current RFS and anticipated EISA programs will
tend to improve the GHG performance of the transportation fuel pool
compared to a business as usual case, they would not in any way cap the
GHG emissions due to the use of fuels. In fact, under both programs,
the total amount of fuel consumed and thus the total amount of GHG
emissions from those fuels can both increase. We note that other
lifecycle fuel standard programs being developed such as those in
California, Canada, and Europe, while also taking into account the GHG
emissions reduction potential from petroleum fuels, do not cap the
emissions from the total fuel pool; the GHG per gallon of
transportation fuel consumed may decrease but the total gallons
consumed are not constrained such that the total GHG emissions from
fuel may continue to grow. We request comment on setting a GHG control
program covering all transportation fuels used in the United States
which would also cap the total emissions from these transportation
fuels.
    Elsewhere in this notice, comments are solicited on the potential
for regulating GHG emissions from stationary sources which could
include petroleum refineries and renewable and alternative fuel
production facilities. EPA recognizes the potential for overlapping
incentives to control emissions at fuel production facilities. We
request comment on the implications of using a lifecycle approach in
the regulation of GHG emissions from fuels which would include refinery
and other fuel production facilities while potentially also directly
regulating such stationary source emission under an additional control
program. Recognizing that the use of biomass could also be a control
option for stationary sources seeking to reduce their lifecycle GHG
impacts, EPA requests comment on the implications of using biomass for
transportation fuel in potential competition as an energy source in
stationary source applications.
3. Option for Considering GHG Fuel Regulation Under CAA Section 211(c)
    Section 211(c)(1) of the CAA has historically been the primary
authority used by EPA to regulate fuels. It provides EPA with authority
to ``control or prohibit the manufacture, introduction into commerce,
offering for sale, or sale of any fuel or fuel additive for use in a
motor vehicle, motor vehicle engine, or nonroad engine of nonroad
vehicle [(A)] if in the judgment of the Administrator any emission
product of such fuel or fuel additive causes or contributes to air
pollution or water pollution (including any degradation in the quality
of groundwater) which may reasonably be anticipated to endanger public
health or welfare.'' Section 211(c)(2) specifies that EPA must consider
all available relevant medical and scientific information, including
consideration of other technologically or economically feasible means
of

achieving vehicle emission standards under CAA section 202 before
controlling a fuel under section 211(c)(1)(A). A prerequisite to action
under 211(c)(1) is an EPA finding that a fuel or fuel additive, or
emission product of a fuel or fuel additive, causes or contributes to
air or water pollution that may reasonably be anticipated to endanger
public health or welfare. Issues related to an endangerment finding are
discussed in section V of this advance notice.
    EPA asks for comment on whether section 211(c) could be read as
providing EPA a broader scope of authority to establish a new GHG fuel
program than section 211(o). Specifically, EPA asks for comment on
whether section 211(c)(1)(A) could allow EPA to start the program as
soon as appropriate in light of our analysis and similarly cover the
time period most appropriate; whether it could allow a program that
would encourage the use of both renewable and alternative fuels with
beneficial GHG emissions impacts and discourage those fuels with
relatively detrimental GHG impacts; and whether it could allow EPA to
establish requirements for all fuels (gasoline, diesel, renewables,
alternative and synthetic fuel, etc.) used in both highway and nonroad
vehicles and engines. EPA requests comment on whether the flexibilities
under section 211(c) allow it to consider a broad set of options for
controlling GHG emissions through fuels, including those that solely
regulate the final point of emissions such as tailpipe emissions rather
than also controlling the emissions at the fuel production facility
through a lifecycle approach.
    Typically EPA has acted through CAA section 211(c) to prohibit the
use of certain additives (e.g., lead) in fuel, to control the level of
a component of fuel to reduce harmful vehicle emissions (e.g., sulfur,
benzene), or to place a limit on tailpipe emissions of a pollutant
(e.g., the reformulated gasoline standards for volatile organic
compounds and toxics emissions performance). While multiple approaches
may be available to regulate GHG emissions under section 211(c), one
option could require refiners and importers of gasoline and diesel meet
a GHG performance standard based on reducing their lifecycle GHG
emissions of the fuel they import or produce. They would comply with
this performance standard by ensuring the use of alternative and/or
renewable fuels that have lower lifecycle GHG emissions than the
gasoline and diesel they displace and through selection of lower
petroleum sources that also reduce the lifecycle GHG performance of
petroleum-based fuel. EPA asks comment on whether section 211(c) could
authorize such an approach because it would be a control on the sale or
manufacture of a fuel that addresses the emissions of GHGs from the
transportation fuels that would be the subject the endangerment finding
discussed in section V. Comments are requested on this interpretation
of 211(c) authority.
    As pointed out above, neither the Energy Act of 2005 RFS program
nor the forthcoming program under EISA directly addresses the varying
GHG emission reduction potential of each fuel type and production
pathway. EPA asks comment on whether it could have the authority under
CAA section 211(c) to design and implement a program that includes not
only renewable fuels but other alternative fuels, considers the GHG
emissions from the petroleum portion of the fuel pool and reflects
differences in fuel production not captured by the GHG thresholds
established under EISA, including differences in technology at the fuel
production facility. We request comment on the factors EPA should
consider in developing a GHG fuel control program under section 211(c)
and how including such factors could serve to encourage the use of low
GHG-emitting practices and technology.
    We note that the RFS and the forthcoming EISA programs require
refiners and other obligated parties to meet specified volume standards
and that these programs are anticipated to continue. We request comment
on the impacts and opportunities of implementing both a GHG program
under 211(c) and volume mandates under 211(o).
    EPA seeks comment on the potential for reducing GHG emissions from
transportation fuel over and above those reductions that could be
achieved by RFS and the anticipated EISA requirements. Although EPA has
not completed its analysis of the GHG emission reductions expected
under the combined RFS and EISA programs, EPA seeks comment on how it
might structure a program that could reduce GHG emissions from
transportation fuel over and above those reductions that could be
achieved by the RFS and anticipated EISA requirements.

VII. Stationary Source Authorities and Potential Options for Regulating
Greenhouse Gases Under the Clean Air Act

    In this section, we explore three major pathways that the CAA
provides for regulating stationary sources, as well as other stationary
source authorities of the Act, and their potential applicability to
GHGs. The three pathways include NAAQS and implementation plans
(sections 107-110 and related provisions); performance standards for
new and existing stationary sources (section 111); and hazardous air
pollutant standards for stationary sources (section 112).\228\ Special
provisions for regulating solid waste incinerators are contained in
section 129.
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    \228\ As explained in this section, the NAAQS pathway is not
solely a stationary source regulatory authority; plans for
implementating the NAAQS can involve regulation of stationary and
mobile sources.
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    We also review the implications of regulating GHGs under Act's
programs for preconstruction permitting of new emissions sources, with
emphasis on the PSD program under Part C of the Act. These programs
require permits and emission controls for major new sources and
modifications of existing major sources. The permitting discussion
closes by examining the implications of requiring operating permits
under Title V for major sources of GHGs. Finally, we describe four
different types of market-oriented regulatory designs that (in addition
to other forms of regulation) could be considered for programs to
reduce GHG emissions from stationary sources to the extent permissible
under the CAA: cap-and-trade, rate-based emissions trading, emissions
fees, and a hybrid approach.
    For each potential pathway of stationary source regulation, this
notice discusses the following basic questions:
     What does the section require?
     What sources would be affected if GHGs were regulated
under this authority?
     What would be the key milestones and implementation
timeline?
     What are key considerations regarding use of this
authority for GHGs and how could potential issues be addressed?
     What possible implications would use of this authority for
GHGs have for other CAA programs?
    In discussing these questions, EPA considers the President's core
principles and other policy design principles enumerated in Section
III.F.1. EPA seeks comment on the advantages and disadvantages of
alternative regulatory authorities in light of those policy design
principles. EPA further invites comments on the following aspects of
each CAA stationary source authority:
     How much flexibility does the CAA section provide for
implementing its requirements? For example, can EPA set compliance
dates that reflect the global

and long-lived nature of GHGs and that allow time for technological
advances and new technology deployment?
     To what extent would the section allow for consideration
of the costs and economic impacts of regulating GHGs? For example,
would the section provide opportunities for sending a price signal,
such as through cap and trade programs (with or without cost
containment mechanisms) and emission fees.
     To what extent can each section account for the
international aspects of GHG emissions, atmospheric concentrations, and
emission impacts, including ways for potentially addressing
international pollutant transport and emission leakage?
     How does each section address the assessment of available
technologies, and to what extent could the section promote or require
the advancement of technology?
     To what extent does the section allow for the ability to
prioritize regulation of significant emitting sectors and sources?
     To what extent could each authority be adapted to GHG
regulation without compromising the Act's effectiveness in regulating
traditional air pollutants?
    Finally, for each regulatory authority, EPA requests comment on a
range of program-specific issues identified in the discussion below.
EPA also requests comment on whether there are specific statutory
limitations that would best be addressed by new legislation. Additional
information concerning potential CAA regulation of stationary source
GHGs may be found in the Stationary Source Technical Support Document
(Stationary Source TSD) placed in the docket for this notice.

A. National Ambient Air Quality Standards (NAAQS)

1. What Are the Requirements for Setting and Implementing NAAQS?
a. Section 108: Listing Pollutant(s) and Issuing Air Quality Criteria
    Section 108(a)(1) establishes three criteria for listing air
pollutants to be regulated through NAAQS. Specifically, section
108(a)(1) states that: EPA ``shall from time to time * * * list * * *
each air pollutant--
    (A) emissions of which, in [the Administrator's] judgment, cause or
contribute to air pollution which may reasonably be anticipated to
endanger public health or welfare;
    (B) the presence of which in the ambient air results from numerous
or diverse mobile or stationary sources; and
    (C) for which air quality criteria had not been issued before the
date of enactment of the Clean Air Amendments of 1970, but for which
[the Administrator] plans to issue air quality criteria under this
section.''
    In determining whether a pollutant meets these criteria, EPA must
consider a number of issues, including many of those discussed in
section IV above regarding an endangerment finding. As discussed there,
in the context of the ICTA petition remand, EPA is considering defining
the ``air pollution'' as the elevated current and future concentration
of six GHGs (CO2, CH4, N2O, HFCs,
PFCs, and SF6). Also in that context, EPA is considering
alternative definitions of ``air pollutant'' as the group of GHGs or
each individual GHG for purposes of the ``cause or contribute''
determination.
    In considering the potential listing of GHGs under section 108, EPA
solicits input on appropriate definitions of both the ``air pollution''
and the ``air pollutants.'' With regard to section 108, it is important
to note that EPA has clear precedents for listing related compounds as
groups rather than as individual pollutants. For example, photochemical
oxidants, oxides of nitrogen, and particulate matter all comprise
multiple compounds, but the listing under section 108 is for the group
of compounds, not the individual elements of the group. The Agency is
soliciting comment on the relevance of these precedents for GHGs. In
addition, as discussed later, there would be increased complexity in
setting NAAQS for individual GHGs than for GHGs as a group. We are
particularly interested in comments on how to apply the terms ``air
pollution'' and/or ``air pollutants'' under sections 108 and 109 in the
context of GHGs, and the implications of taking consistent or different
approaches under other Titles or sections of the Act.
    A positive endangerment finding for GHGs under section 202(a) or
other sections of the CAA could have significant and direct impacts on
EPA's consideration of the first two criteria for listing the
pollutant(s) under section 108, as explained in section IV.B.2 of this
notice. The third criterion for listing under section 108, however, may
be unrelated to the issues involved in any motor vehicle or other
endangerment finding. Moreover, this third criterion could provide EPA
discretion to decide whether to list those pollutants under section 108
for purposes of regulating them via the NAAQS.\229\ EPA requests
comment on the effect of a positive finding of endangerment for GHGs
under section 202(a) of the Act on potential listing of the
pollutant(s) under section 108.
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    \229\ With respect to the third criterion, while there is a
decision of U.S. Court of Appeals for the Second Circuit to the
contrary, NRDC v. Train, 545 F.2d 320 (2nd Cir. 1978), EPA notes
that that decision was rendered prior to the Supreme Court's
decision in Chevron v. Natural Resources Defense Council, 467 U.S.
837 (1984). Thus, a proper and reasonable question to ask is whether
this criterion affords EPA discretion to decide whether it is
appropriate to apply the NAAQS structure to a global air pollution
problem like GHGs.
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    Section 108 also requires that once a pollutant is listed, EPA
issue ``air quality criteria'' encompassing ``all identifiable effects
on public health or welfare,'' including interactions between the
pollutant and other types of pollutants in the atmosphere. We are
interested in commenters' views on whether and how developing air
quality criteria for GHGs would differ from developing such criteria
for other pollutants such as ozone and particular matter, given the
long-lived nature of GHGs and the breadth of impacts and other special
issues involved with global climate change. EPA also invites comment on
the extent to which it would be appropriate to use the most recent IPCC
reports, including the chapters focusing on North America, and the U.S.
government Climate Change Science Program synthesis reports as
scientific assessments that could serve as an important source or as
the primary basis for the Agency's issuance of ``air quality
criteria.''
    Finally, section 108 requires EPA to issue information on air
pollution control techniques at the same time it issues air quality
criteria. This would include information on the cost of installation
and operation, energy requirements, emission reduction benefits, and
environmental impacts of these techniques. Generally, the Agency defers
this obligation until the time a standard is actually issued. As
required under Executive Order 12866, EPA must issue a Regulatory
Impact Analysis (RIA) for major rulemaking actions, and it is in this
context that EPA has previously described the scope and effectiveness
of available pollution control techniques. EPA requests comment on
whether this approach is appropriate in the case of GHGs.
b. Section 109: Standard-Setting
    Section 109 requires that the Administrator establish NAAQS for any
air pollutant for which air quality criteria are issued under section
108. Both the air quality criteria and the standards are to be reviewed
and, as appropriate, revised by the Administrator, every five years.
These decisions are to be informed by an

independent scientific review committee, a role which has been
fulfilled by the Clean Air Scientific Advisory Committee (CASAC) of
EPA's Science Advisory Board. The committee is charged with reviewing
both the air quality criteria for the pollutant(s) and the standards,
and recommending any revisions deemed appropriate.
    The statute specifically provides that primary NAAQS ``shall be
ambient air quality standards the attainment and maintenance of which
in the judgment of the Administrator, based on such criteria and
allowing an adequate margin of safety, are requisite to protect the
public health,'' including the health of sensitive groups. The
requirement that primary standards provide an adequate margin of safety
was intended to address uncertainties associated with inconclusive
scientific and technical information available at the time of standard
setting. It was also intended to provide a reasonable degree of
protection against hazards that research has not yet identified. Lead
Industries Association v. EPA, 647 F.2d 1130, 1154 (DC Cir 1980), cert.
denied, 449 U.S. 1042 (1980); American Petroleum Institute v. Costle,
665 F.2d 1176, 1186 (DC Cir 1981), cert. denied, 455 U.S. 1034 (1982).
The selection of any particular approach to providing an adequate
margin of safety is a policy choice left specifically to the
Administrator's judgment. Lead Industries Association v. EPA, 647 F.2d
at 1161-62.
    With regard to secondary NAAQS, the statute provides that these
standards ``specify a level of air quality the attainment and
maintenance of which in the judgment of the Administrator * * * is
requisite to protect the public welfare from any known or anticipated
adverse effects associated with the presence of such air pollutant in
the ambient air.'' Welfare effects as defined in CAA section 302(h)
include, but are not limited to, ``effects on soils, water, crops,
vegetation, manmade materials, animals, wildlife, weather, visibility
and climate, damage to and deterioration of property, and hazards to
transportation, as well as effects on economic values and on personal
comfort and well-being.''
    One of the central issues posed by potential regulation of GHGs
through the NAAQS is the nature of the health and environmental effects
to be addressed by the standards and, thus, what effects should be
addressed when considering a primary (public health) standard and what
effects should be addressed when considering a secondary (public
welfare) standard. This issue has implications for whether it would be
appropriate to establish a primary standard as well as a secondary
standard for these pollutants. As discussed above in section V, the
direct effects of GHG emissions appear to be principally or exclusively
welfare-related. GHGs are unlike other current NAAQS pollutants in that
direct exposure to GHGs at current or projected ambient levels appears
to have no known adverse effects on human health. Rather, the health
impacts associated with ambient GHG concentrations are a result of the
changes in climate at the global, regional, and local levels, which
trigger myriad ecological and meteorological changes that can adversely
affect public health (e.g., increased viability or altered geographical
range of pests or diseases; increased frequency or severity of severe
weather events including heat waves) (see section V above). The effects
on human health are thus indirect impacts resulting from these
ecological and meteorological changes, which are effects on welfare.
This raises the question of whether it is more appropriate to address
these health effects as part of our consideration of the welfare
effects of GHGs when setting a secondary NAAQS rather than a primary
NAAQS. Control of GHGs would then occur through implementation of the
secondary NAAQS rather than the primary NAAQS. EPA invites comment on
whether and how these indirect human health impacts should be addressed
in the context of setting a primary or a secondary NAAQS.
    Past experience suggests EPA may have discretion to decline to set
either a primary or a secondary standard for a pollutant if the
evidence shows that there are no relevant adverse effects at or near
current ambient concentrations, and therefore that no standard would be
requisite to protect public health or welfare. In 1985, for example,
EPA determined that it was appropriate to revoke the secondary standard
for carbon monoxide (CO) after a review of the scientific evidence
indicated that there was no evidence of known or anticipated adverse
welfare effects associated with CO at or near ambient levels. 50 FR
37484, 37494 (September 13, 1985). This decision was reaffirmed by the
Agency in the 1994 CO NAAQS review, and there remains only a primary
standard for this pollutant. EPA requests comment on whether it would
be necessary and/or appropriate for the Agency to establish both
primary and secondary NAAQS for GHGs if those pollutants were listed
under section 108.
    It is also important to consider how a NAAQS for GHGs would
interface with existing NAAQS for other pollutants, particularly oxides
of nitrogen (NOX) and ozone (O3), as well as particulate
matter. EPA's approach in other NAAQS reviews has been to consider
climate impacts associated with any pollutant as part of the welfare
impacts evaluated for that pollutant in setting secondary standards for
the pollutant. If separate NAAQS were established for GHGs, EPA would
likely address the climate impacts of each specific GHG in the NAAQS
for GHGs, and would not need to address the climate impacts of that GHG
when addressing other NAAQS, thus avoiding duplication of effort.
    In considering the application of section 109 to GHGs and whether
it would be appropriate to regulate GHGs through the NAAQS, EPA must
evaluate a number of other standard-setting issues, as discussed below.
i. Level
    For potential GHG standards, EPA would face special challenges in
determining the level of the NAAQS. As noted above, the primary
standard must be ``requisite to protect public health with an adequate
margin of safety'' and the secondary standard ``requisite to protect
public welfare against any known or anticipated adverse effects.''
EPA's task is to establish standards that are neither more nor less
stringent than necessary for the purposes of protecting public health
or welfare. Whitman v. American Trucking Associations, 531 U.S. 457,
473. Under established legal interpretation, the costs of
implementation associated with various potential levels cannot be
factored into setting a primary or secondary standard.\230\ Any
determinations by the EPA Administrator regarding the appropriate level
(and other elements of) of a NAAQS for GHGs must based on the available
scientific evidence of adverse public health and/or public welfare
impacts, without consideration of the costs of implementation.
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    \230\ The Supreme Court has confirmed EPA's long-standing
interpretation and ruled that ``[t]he text of Sec.  109(b),
interpreted in its statutory and historical context and with
appreciation for its importance to the CAA as a whole, unambiguously
bars cost considerations from the NAAQS-setting process.'' The court
also noted that consideration of costs occurs in the state's
formulation of the implementation plan with the aid of EPA cost
data. Whitman v. American Trucking Associations, 531 U.S. at 472.
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    EPA expects it would be difficult to determine what levels and
other elements of NAAQS would meet these criteria for GHGs, given that
the full effects associated with elevated atmospheric concentrations of
these

pollutants occur over a long period of time and there are significant
uncertainties associated with the health or welfare impacts at any
given concentration. The delayed nature of effects and the complex
feedback loops associated with global climate change would require EPA
to consider both the current effects and the future effects associated
with current ambient concentrations. In making a determination of what
standard is sufficient but not more stringent than necessary, EPA would
also have to grapple with significant scientific uncertainty. As with
other NAAQS, however, the iterative nature of the 5-year review cycle
means the standards could be revised as appropriate in light of new
scientific information as it becomes available. EPA requests comment on
the scientific, technical, and policy challenges of determining
appropriate levels for NAAQS for GHG pollutants, for both primary and
secondary standards.
    As with all pollutants for which EPA establishes NAAQS, EPA would
need to evaluate what constitutes an ``adverse'' impact in the climate
context. EPA notes that the 1992 UNFCCC calls for the avoidance of
``dangerous anthropogenic interference with the climate system.''
However, it is possible that the criteria for setting a NAAQS may call
for protection against risks and effects that are less egregious than
``dangerous interference.'' Furthermore, international agreement has
not been reached on either the metric (e.g., atmospheric concentrations
of the six major directly emitted anthropogenic GHGs, radiative
forcing, global average temperature increase) or the level at which
dangerous interference would occur. EPA requests comment on whether it
would be appropriate, given the unique attributes of GHGs and the
significant contribution to total atmospheric GHG contributions from
emissions emanating outside the United States, to establish a level for
a GHG NAAQS based on an internationally agreed-upon target GHG level,
considering legal and policy factors.
    Another key question is the geographical extent of the human health
and welfare effects that should be taken into consideration in
determining what level and other elements of a standard would provide
the appropriate protection. The pollutants already subject to NAAQS are
typically local and/or regional in nature, so the standards are
designed to limit ambient concentrations of pollutants associated with
emissions typically originating in and affecting various parts of the
United States. In assessing what standard is requisite to protect
either public health or welfare, EPA has focused in the past on
analyzing and addressing the impacts in the United States. It may be
appropriate to interpret the Act as requiring standards that are
requisite for the protection of U.S. public health and welfare.
However, atmospheric concentrations of GHGs are relatively uniform
around the globe, the impacts of climate change are global in nature,
and these effects, as described in section V, may be unequally
distributed around the world. The severity of impacts in the U.S. might
differ from the severity of impacts in the rest of the world. In light
of these factors, EPA invites comment on whether it would be
appropriate to consider adverse effects on human health and welfare
occurring outside the U.S. Specifically, we invite comment on whether,
and if so, on what legal basis, it would be appropriate for EPA to
consider impacts occurring outside the U.S. when those impacts, either
in the short or long term, may reasonably be anticipated to have an
adverse effect on health or welfare in the U.S.
    As noted briefly above, if each GHG is listed as a separate
pollutant under section 108, rather than as a group or category of
pollutants, then EPA arguably would have to establish separate NAAQS
for each listed GHG. This scenario raises significant challenges for
determining which level of any particular standard is appropriate,
especially as the science of global climate change is generally focused
on the total radiative impact of the combined concentration of GHGs in
the atmosphere. Since for any one pollutant, the standard that is
requisite to protect public health with an adequate margin of safety or
public welfare from known or anticipated adverse effects is highly
dependent upon the concentration of other GHGs in the atmosphere, it
would be difficult to establish independent standards for any of the
six principal GHGs. EPA requests comments on possible approaches for
determining appropriate levels for GHG NAAQS if these pollutants are
listed individually under section 108.
ii. Indicator
    If each GHG is listed as an individual pollutant under section 108,
the atmospheric concentration of each pollutant could be measured
separately, and establishing an indicator for each pollutant would be
straightforward. However, if GHGs are listed as a group, it would be
more challenging to determine the appropriate indicator for use in
measuring ambient air quality in comparison to a GHG NAAQS. One
approach could be to measure the total atmospheric concentration of a
group of GHGs on a CO2 equivalent basis, by assessing their
total radiative forcing (measured in W/m2).\231\ Radiative
forcing is a measure of the heating effect caused by the buildup of the
GHGs in the atmosphere. Estimating CO2-equivalent
atmospheric concentrations, however, would not be a simple matter of
multiplying emissions times their respective GWP values. Rather, the
heating effect (radiative forcing) due to concentrations of each
individual GHG would have to be estimated to define CO2-
equivalent concentrations. EPA invites comment on the extent to which
radiative forcing could be an effective metric for capturing the
heating effect of all GHGs in a group (or for each GHG individually).
For example, in the year 2005 global atmospheric CO2
concentrations were 379 parts per million (ppm), but the
CO2-equivalent concentration of all long-lived GHGs was 455
ppm. This approach would not require EPA to specify the allowable level
of any particular GHG, alone or in relation to the concentration of
other GHGs present in the atmosphere.
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    \231\ See footnote 13 for an explanation of CO2
equivalency.
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    A second option would be to select one GHG as the indicator for the
larger group of pollutants intended to be controlled under the
standard. This kind of indicator approach is currently used in
regulating photochemical oxidants, for which ozone is the indicator,
and oxides of nitrogen, for which NO2 has been used as an
indicator. There are several reasons, however, that this approach may
not be appropriate for GHGs. For example, in the instances noted above,
the indicator species is directly related to the other pollutants in
the group, either through common precursors or similar chemical
composition, and there is a basis for expecting that control of the
indicator compound will lead to the appropriate degree of control for
the other compounds in the listed pollutant. In the case of GHGs, it
would be more difficult to select one species as the indicator for the
larger group, given that the GHGs are distinct in origin, chemical
composition, and radiative forcing, and will require different control
strategies. Furthermore, this approach raises an issue regarding
whether states would have the appropriate incentive to address all
pollutants within the group. For example, there could be a focus on
controlling the single indicator species at the expense of other
species also associated with the adverse effects from

which the standard(s) are designed to offer protection.
    EPA seeks comment on the merits and drawbacks of these various
approaches, as well as suggestions for other possible approaches, to
defining an indicator for measuring allowable concentrations of GHGs in
the atmosphere.
c. Section 107: Area Designations
    After EPA establishes or revises a NAAQS, the CAA requires EPA and
the states to begin taking steps to ensure that the new or revised
NAAQS are met. The first step is to identify areas of the country that
do not meet the new or revised NAAQS. This applies to both the primary
and secondary NAAQS. EPA is required to identify each area of the
country as ``attainment,'' ``nonattainment,'' or ``unclassifiable.''
\232\
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    \232\ CAA Section 107(d)(1) requires EPA to establish a deadline
for states to submit recommendations for area designations that is
no later than one year after promulgation of the new or revised
NAAQS. Section 107(d)(1) also directs states to recommend
appropriate area boundaries. A nonattainment area must consist of
that area that does not meet the new or revised NAAQS, and the area
that contributes to ambient air quality in a nearby area that does
not meet the new or revised NAAQS. Thus, a key factor in setting
boundaries for nonattainment areas is determining the geographic
extent of nearby source areas contributing to the nonattainment
problem. EPA then reviews the states' recommendations, collects and
assesses additional information as appropriate, and issues final
designations no later than 2 years following the date EPA
promulgated the new or revised NAAQS. EPA may take one additional
year (meaning final designations can be up to 3 years after
promulgation of new or revised NAAQS) if the Administrator has
insufficient information to promulgate the designations. Whether or
not a state or a Tribe provides a recommendation, EPA must
promulgate the designation that it deems appropriate.
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    For a GHG NAAQS, the designations given to areas would depend on
the level of the NAAQS and the availability of ambient data to make
informed decisions for each area. For GHGs, in contrast to current
NAAQS pollutants, it would likely make sense to conduct the air quality
assessment at the national scale rather than at a more localized scale.
All of the potential indicators discussed above for measuring ambient
concentrations of GHGs for purposes of a NAAQS involve globally
averaged metrics. Therefore, the ambient concentrations measured across
all locations within the U.S. for purposes of comparison to the level
of the standard would not vary, and all areas of the country would have
the same designation--that is, the entire U.S. would be designated
either attainment or non-attainment, depending on the level of the
NAAQS compared to observed GHG ambient concentrations.
    If, in making decisions about the appropriate level of the GHG
NAAQS, EPA were to determine that current ambient concentrations are
not sufficient to cause known or anticipated adverse impacts on human
health or welfare now or in the future, then it is possible that the
NAAQS would be set at some level higher than current ambient
concentrations. In that case, the entire country would likely be
designated nonattainment. If, on the other hand, EPA were to set the
NAAQS at a level above current ambient concentrations, the entire
country would likely be designated attainment.
d. Section 110: State and Federal Implementation Plans
i. State Implementation Plans
    The CAA assigns important roles to EPA, states, and tribal
governments in implementing NAAQS and in ensuring visibility protection
in Class I areas. States have the primary responsibility for developing
and implementing state implementation plans (SIPs). A SIP is the
compilation of authorities, regulations, control programs, and other
measures that a state uses to carry out its responsibilities under the
CAA to attain, maintain, and enforce the NAAQS and visibility
protection goals, and to prevent significant deterioration of air
quality in areas meeting the standard. Additional specifics on SIP
requirements are contained in other parts of the CAA.
    EPA assists states and tribes in their efforts to clean the air by
promulgating national emissions standards for mobile sources and
selected categories of stationary sources. Also, EPA assists the states
in developing their plans by providing technical tools, assistance, and
guidance, including information on potentially applicable emissions
control measures.
    Historically, the pollutants addressed by the SIP program have been
local and regional pollutants rather than globally mixed pollutants
like GHGs. The SIP development process, because it relies in large part
on individual states, is not designed to result in a uniform national
program of emissions controls.
(1) Generic Requirements for All SIPs
    This section discusses the specific CAA requirements states must
address when implementing any new or revised NAAQS.\233\
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    \233\ The visibility protection program required by CAA sections
169A and 169B, and as implemented through state compliance with
EPA's 1999 Regional Haze Rule, will only be raised again here in
this section of the ANPR in the context of a framework for
implementing a secondary GHG NAAQS.
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    Under section 110(a)(1) and (2) of the CAA, all states are required
to submit plans to provide for the implementation, maintenance, and
enforcement of any new or revised NAAQS. Section 110(a)(1) and (2)
require states to address basic program elements, including
requirements for emissions inventories, monitoring, and modeling, among
other things. These requirements apply to all areas of the state
regardless of whether those areas are designated nonattainment for the
NAAQS.
    In general, every state is required to submit to EPA within 3 years
of the promulgation of any new or revised NAAQS a SIP demonstrating
that these basic program elements are properly addressed. Subsections
(A) through (M) of section 110(a)(2) enumerate the elements that a
state's program must contain. See the Stationary Source TSD for this
list.
    Other statutory requirements for state implementation plans vary
depending on whether an area is in nonattainment or attainment. There
are four specific scenarios that could hypothetically apply, depending
on whether a primary or a secondary standard, or both, are established,
and on the level(s) set for those standards. Because we are proposing
no scientific determinations in this notice, our discussion of NAAQS
implementation addresses all four of these scenarios.
(2) Scenario 1: Primary GHG Standard With Country in Nonattainment
    If the entire country were designated nonattainment for a primary
GHG NAAQS, each state would be required to develop and submit a SIP
that provided for attainment and met the other specific requirements of
Part D of Title I of the Act by the specified deadline.
    Requirements for the general contents of a nonattainment area plan
are set forth in section 172 of the CAA. Section 172(c) specifies that
SIPs must, among other things: \234\
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    \234\ For additional information about nonattainment area
planning requirements, please see the Technical Support Document.
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     Include all Reasonably Available Control Measures (RACM)
(including, at a minimum, emissions reductions obtained through
adoption of Reasonably Available Control Technology (RACT)) and provide
for attainment of the NAAQS;
     Provide for Reasonable Further Progress (RFP), which means
reasonable interim progress toward attainment;
     Include an emissions inventory;
     Require permits for the construction and operation of
major new or modified stationary sources, known as

``nonattainment new source review'' (see also section 173 of the Act
and section VII.E. of this notice);
     Contain contingency measures that are to be implemented in
the event the air quality standard is not met by the area's attainment
deadline; and
     Meet the applicable provisions of section 110(a)(2) of the
CAA related to the general implementation of a new or revised NAAQS.
    In addition, all nonattainment areas must meet requirements of
section 176(c) known as ``general conformity'' and ``transportation
conformity.'' \235\ In brief, general conformity requires the federal
government only to provide financial assistance, issue a permit or
approve an activity that conforms to an approved SIP for a NAAQS.
Transportation conformity requires metropolitan planning organizations
and the U.S. Department of Transportation only to approve or fund
transportation plans, programs and projects that conform to an approved
SIP for a NAAQS. For the scenario of the country in nonattainment with
a GHG NAAQS, these requirements would apply nationwide one year after
the effective date of EPA's nonattainment designations.
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    \235\ These requirements also apply to ``maintenance areas''--
former nonattainment areas that have met the standard and been
redesignated according to a formal EPA determination.
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    For nonattainment areas, SIPs must provide for attainment of the
primary NAAQS as expeditiously as practicable, but no later than 5
years from the effective date of the nonattainment designation for the
area--or no later than 10 years if EPA finds additional time is needed
considering the severity of nonattainment and the availability and
feasibility of pollution control measures.
    At the outset, it would appear to be an inescapable conclusion that
the maximum 10-year horizon for attaining the primary NAAQS would be
ill-suited to GHGs. The long atmospheric lifetime of the six major
emitted GHGs means that atmospheric concentrations will not quickly
respond to emissions reduction measures (with the possible exception of
methane, which has an atmospheric lifetime of approximately a decade).
In addition, in the absence of substantial cuts in worldwide emissions,
worldwide concentrations of GHGs would continue to increase despite any
U.S. emission control efforts. Thus, despite active control efforts to
meet a NAAQS, the entire U.S. would remain in nonattainment for an
unknown number of years. If States were unable to develop plans
demonstrating attainment by the required date, the result would be
long-term application of sanctions, nationwide (e.g., more stringent
offset requirements and restrictions on highway funding), as well as
restrictions on approvals of transportation projects and programs
related to transportation conformity. EPA is currently evaluating the
extent to which section 179B might provide relief to states in this
circumstance. As further explained below, section 179B is a waiver
provision providing for SIP approval under certain circumstances when
international emissions affect a U.S. nonattainment area.
    In addition to submitting plans providing for attainment within the
state, each state would be required to submit, within 3 years of NAAQS
promulgation, a plan under section 110(a)(2)(D) prohibiting emissions
that would significantly contribute to nonattainment in another state.
EPA requests comments on what approaches could be utilized for purposes
of addressing this requirement as well as the general matter of
controlling GHGs to meet a NAAQS.
    Impact of section 179B on nonattainment requirements: States may
use section 179B of the CAA to acknowledge the impact of emissions from
international sources that may contribute to violations of a NAAQS.
Section 179B provides that EPA shall approve a SIP for a nonattainment
area if: (1) The SIP meets all applicable requirements of the CAA; and
(2) the submitting state can satisfactorily demonstrate that ``but for
emissions emanating from outside of the United States,'' the area would
attain and maintain the applicable NAAQS. EPA has historically
evaluated these ``but for'' demonstrations on a case-by-case basis,
based on the individual circumstances and the data provided by the
submitting state. These data might include ambient air quality
monitoring data, modeling scenarios, emissions inventory data, and
meteorological or satellite data. In the case of GHGs, however, where
global emissions impact all areas within the United States, the federal
government may be best suited for establishing whether a ``but for''
demonstration can be made for the entire country.
    If a ``but for'' conclusion is affirmed, section 179B would allow
EPA to approve a SIP that did not demonstrate attainment or maintenance
of the relevant NAAQS. Section 179B does not provide authority to
exclude monitoring data influenced by international transport from
regulatory determinations related to an area's status as an attainment
or nonattainment area. Thus, even if EPA approves a section 179B ``but
for'' demonstration for an area, the area would continue to be
designated as nonattainment and subject to certain applicable
nonattainment area requirements, including nonattainment new source
review, conformity, and other measures prescribed for nonattainment
areas by the CAA. EPA requests comment on the practical effect of
application of section 179B on the global problem of GHG emissions and
on the potential for controls based on the attainment plan requirement
and other requirements directly related to the attainment requirement,
including the reasonable further progress requirement and the RACM
requirement.\236\
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    \236\ EPA has interpreted RACM as emissions reducing measures
that are technically and economically feasible, and considered
collectively would advance the nonattainment area's attainment date
by at least one year. RACT has been interpreted in two different
ways, depending on the applicable statutory requirements. In the
case of ozone, RACT consists of measures that are technically and
economically feasible, without regard to whether the measures would
result in earlier attainment. In recent rules on PM2.5, EPA
interpreted RACT for PM2.5 as essentially the same as RACM, with
RACT referring to the stationary source component of RACM, which
applies to all types of sources.
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(3) Scenario 2: Secondary Standard With Country in Nonattainment (No
Primary Standard)
    As noted above in the NAAQS standard-setting discussion, depending
on the nature and bases of any endangerment finding under section 108,
EPA may be able to consider setting only a secondary NAAQS for GHGs and
not also a primary NAAQS.
    In general, the same nonattainment requirements that apply to SIPs
for a primary standard apply for a secondary standard, including
nonattainment new source review and the other programs listed under the
Scenario 1 subsection above.
    A notable difference in nonattainment requirements for primary and
secondary standards is the time allowed for attainment. Under a
secondary standard, state plans must achieve attainment as
expeditiously as practicable, but there is no statutory maximum date
for attainment. The general requirement to attain as expeditiously as
practicable includes consideration of required controls, including
``reasonably available control measures.'' These requirements do allow
for consideration of cost. What would constitute ``as expeditiously as
practicable'' would be determined based on the entire set of facts and
circumstances at issue. EPA requests comment on how to interpret

the requirement that state plans demonstrate that attainment will be
achieved ``as expeditiously as practicable'' in the context of a
secondary NAAQS for GHGs.
    Potential implementation approach based on regional haze model: For
a secondary GHG NAAQS with no prescribed attainment date, EPA requests
comment on the concept of implementing a GHG secondary NAAQS standard
in a way roughly analogous to an approach used in the long-term
regional visibility program, known as the regional haze program. This
program is based on a goal of achieving natural visibility conditions
in our nation's parks and wilderness areas (Class I areas) by 2064. The
program requires states to develop reasonable progress goals every 10
years and implement emissions control programs to achieve those goals,
ultimately achieving the 2064 natural condition goal in each Class I
area. At the midpoint of every 10-year period, states must assess the
progress being made and take corrective action if necessary to maintain
reasonable progress toward the 10-year progress milestone.
    The regional haze program's model for goal planning, control
strategy development, and control strategy implementation could offer a
possible framework for achieving a GHG secondary NAAQS. This framework
potentially could be designed to address the RACM, RACT and Reasonable
Further Progress requirements, as well as the attainment planning
requirement. This framework may also provide a mechanism for
implementing a nationwide GHG emissions cap and trade program adopted
and implemented through state plans. However, EPA recognizes that the
global nature of GHGs and their persistence in the atmosphere make an
approach based on ``reasonable'' progress more difficult to implement
than in the case of regional haze. For example, despite domestic
emissions reductions, it might not be possible to discern improvement
in atmospheric concentrations of GHGs due to their relatively long
atmospheric lifetimes or to growth in emissions from other countries
which could eclipse reductions made in the U.S. We note that using this
framework would not provide relief from any of the applicable
nonattainment area requirements of the Act. EPA requests comment on
whether, and if so how, the regional haze approach could be adapted for
use in the GHG context.
(4) Scenarios 3 and 4: Primary and/or Secondary Standard With Country
in Attainment
    If a primary or secondary GHG NAAQS were set at a level higher than
ambient GHG levels at the time of designations, then the country would
be in attainment. (See preceding section on NAAQS standard-setting for
discussion of this issue.) In this case, a much shorter list of
requirements would apply than if the country were in nonattainment.
    SIPs would be required to include PSD programs for GHGs, which
would require preconstruction permitting of new major sources and
significant modifications to existing major sources. (See section VII.D
on PSD.)
    EPA has identified two other requirements that potentially could
apply, both of which could provide authority for a nationwide cap-and-
trade program implemented at the state level. First, section 110(a)(1)
requires states to submit a SIP providing for ``implementation,
maintenance, and enforcement'' of primary and secondary NAAQS. Under
the scenario of a GHG NAAQS with the country in attainment, where
states may need more than PSD/NSR to maintain attainment, EPA could
consider using this provision to require SIPs to provide for
maintenance of air quality consistent with the GHG standard. This
requirement could be implemented through a nationwide cap-and-trade
program designed at the federal level and adopted by individual states
in their SIPs, a program similar but broader in scope than existing
programs such as the more limited NOX SIP Call regional cap-
and-trade system for EGUs and selected industrial source categories. If
a state failed to submit an adequate maintenance SIP, EPA would be
required to develop and implement a federal implementation plan for
that state. EPA could design the FIP to enable the state to participate
in a nationwide cap-and-trade system.
    Second, section 110(a)(2)(D) requires SIPs to prohibit emissions
that would interfere with maintenance of the standard by other states.
Because GHGs are globally well-mixed, it may be that GHGs emitted from
any state could be found to interfere with maintenance of a GHG NAAQS
in every other state. In the past, EPA has issued rules that have
resulted in states adopting interstate cap-and-trade programs (e.g.,
the Clean Air Interstate Rule) implemented through SIPs to address the
requirements of this provision. In the case of GHGs, this authority
could potentially support a nationwide cap-and-trade program for GHGs,
adopted through SIPs. If a state failed to submit its section
110(a)(2)(D) SIP, EPA would be required to develop and implement a FIP
for that state. EPA could design the FIP to enable the state to
participate voluntarily in a nationwide cap-and-trade system. We
request comment on the suitability of adopting either of these
approaches under section 110(a).
ii. Additional CAA Provisions Affecting SIP Obligations and FIPs
(1) Section 179(a)
    The CAA requires states to submit SIPs to EPA for review, and EPA
must approve or disapprove them based on whether the state plan or
component meets the Act's requirements. An EPA finding that a state has
failed to submit a nonattainment plan or plan component, or an EPA
disapproval of such a plan because it does not meet the requirements of
the Act, would start a ``sanctions clock'' under section 179(a). This
means that sanctions would apply in the state if the deficiencies are
not corrected within prescribed deadlines. These sanctions include
additional requirements for major new sources (18 months after the
finding of failure) and restrictions on federal highway funds (6 months
after the offset sanction).\237\ EPA must promulgate a FIP for the
deficient component of the SIP if the state's plan component is not
approved within 2 years of EPA's finding or disapproval action. In the
case of GHGs, it is possible that EPA could design the FIP to enable
the state to participate in a nationwide cap-and-trade system.
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    \237\ 40 CFR 52.31.
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(2) Section 115
    CAA section 115 creates a mechanism through which EPA can require
states to amend their SIPs to address international transport issues.
It is designed to protect public health and welfare in another country
from air pollution emitted in the U.S. provided the U.S. is given
essentially reciprocal rights with respect to prevention and control of
air pollution originating in the other country. The Administrator could
exercise his authority under this provision if EPA were to promulgate a
NAAQS for GHG.
    To act under section 115, the Administrator would need to make a
finding that, based on information from any duly constituted
international agency, he has reason to believe that air pollutants
(GHGs) emitted in the U.S. causes or contributes to air pollution which
may reasonably be anticipated to endanger public health or welfare in a
foreign country. Upon making such a finding, the Administrator would
give

formal notification to the Governor of the state (or in this case
potentially all of the states) where GHGs originate. A finding under
this section has the same regulatory consequences as a finding that the
state's existing SIP is inadequate to attain the NAAQS or otherwise
meet the requirements of the Act. This notification would require the
notified states to modify their SIPs to prevent or eliminate the
endangerment.
    Addressing GHGs under this authority could allow some flexibility
in program design, subject to limitations of the SIP development
process. Section 115 could not be used to require states to incorporate
into their SIPs measures unrelated to attainment or maintenance of a
NAAQS. A factor to consider is that this section of the Act only
applies where countries that suffer possible endangerment give
reciprocal rights to the U.S. However, reciprocity with one or more
affected countries may be sufficient to trigger section 115. We request
comment on the efficacy of using section 115 as a mechanism to
facilitate more effective regulation of GHGs through a NAAQS.
2. What Sources Would Be Affected?
    Sections 108 and 109 impose no controls directly on sources, but
instead establish the air quality benchmarks that control requirements
would be designed to meet. The precise nature of these controls would
be determined through federal and state programs, as established via
SIPs and, for states failing to submit an approvable plan, FIPs.
Considering that GHGs are emitted by a wide array of sources, it is
likely that NAAQS implementation would result in controls on numerous
stationary and mobile sources through sections 110 and 172.
    The federal government could have less flexibility under the NAAQS
approach to target control efforts toward particular groups of existing
stationary sources. Under the traditional SIP approach, emissions
controls on specific source categories would flow from independent
state-level decisions, and could result in a patchwork of regulations
requiring different types and levels of controls in different states.
However, the SIP approach could also be adapted for use in a more
coordinated strategy. As mentioned above, EPA has in the past issued
rules that have resulted in states adopting limited interstate cap-and-
trade programs (e.g., NOX SIP Call and the Clean Air
Interstate Rule) implemented through state SIPs. Furthermore, the
federal government would also have flexibility to design a national
control program in the event that states did not adopt the required
programs and EPA were required to promulgate a FIP.
    EPA requests comment on whether and how the different
implementation provisions within the NAAQS program could be adapted to
be most suitable for application to control GHGs.
3. What Would Be the Key Milestones and Implementation Timeline?
    The key milestones that would apply if EPA were to regulate GHGs as
a NAAQS pollutant include: listing the pollutant(s); issuing air
quality criteria; issuing information on air pollution control
techniques; proposing primary and secondary NAAQS for the pollutants;
issuing final standards; designating areas; development of SIPs/FIPs;
and application of control measures.
    EPA has discretion with regard to the date of listing of a
pollutant under section 108. The statute does not prescribe any
specific deadline for listing, instead stating that EPA ``shall from
time to time * * * list * * * each air pollutant'' that EPA judges
meets the three criteria discussed above. This could provide the Agency
some latitude in determining the precise timing of any listing.
    Once a pollutant is listed, the CAA specifies a very ambitious
timeline for issuing the initial NAAQS for the pollutant. Section 108
allows 12 months between date of listing and issuance of air quality
criteria for the pollutant(s). Since these criteria are intended to
encompass ``all identifiable effects on public health or welfare,'' it
would be difficult to meet this timeline in the case of GHGs. In 1970,
when the NAAQS program was first established under the CAA, air quality
criteria either were in development or had already been issued for a
variety of pollutants, and the process involved consideration of a much
smaller body of science than is now available. Therefore, the 12-month
period allotted for the initial issuance of air quality criteria
appeared reasonable.\238\ However, based on recent NAAQS reviews for
ozone, particulate matter, lead, and other pollutants, it now generally
takes several years for the Agency to complete the thorough scientific
assessment necessary to issue air quality criteria.
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    \238\ For each air pollutant for which air quality criteria had
already been issued prior to enactment of the Clean Air Act
Amendments of 1970, section 109(a)(1) actually required EPA to issue
proposed NAAQS within 30 days of enactment and to finalize those
standards within 90 days of publication of the proposal. This
included carbon monoxide, ozone, particulate matter, hydrocarbons,
and sulfur oxides.
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    Given the complexity of global climate change science, and the vast
amount of research that would be relevant to the Agency's scientific
assessment, EPA anticipates this task would be particularly time
consuming in the case of GHGs, though relying on synthesis reports such
as the Intergovernmental Panel on Climate Change's Fourth Assessment
Report and various reports of the U.S. Climate Change Science Program
could help expedite the process. The challenge of completing a thorough
scientific assessment for GHGs could result in a significant delay in
listing the pollutant(s) under section 108, since EPA would likely
choose to list GHGs only when the scientific assessment had progressed
sufficiently to enable the Agency to meet the statutory requirement to
issue ``air quality criteria'' within one year of listing, and to meet
the tight rulemaking timeframe, discussed below. To the extent that EPA