On January 12, 2011, the Environmental Protection Agency (“EPA”) announced that biomass-fired sources will be able to receive a three year deferral on greenhouse gas (“GHG”) permitting requirements for CO2 emissions.  EPA plans to complete a formal rulemaking by July 2011, and EPA intends to use the three years to allow for more independent scientific analysis and then will conduct a rulemaking on how the biomass emissions should be treated under the Clean Air Act permitting requirements.

On January 2, 2011, air permitting requirements commenced for large GHG emitters building new facilities or modifying existing ones; thus, large facilities must obtain air permits and begin energy efficiency measures or implementing technology to cut GHG emissions.  In the final tailoring rule, EPA said biomass CO2 emissions would be equivalent to fossil fuel emissions for permitting.  On August 3, 2010, the National Alliance of Forest Owners (“NAFO”) submitted a petition to reconsider the tailoring rule, and NAFO also filed a complaint against the EPA in federal court.   The EPA said it is granting the petition for reconsideration, but it is not halting the implementation of the tailoring rule.  EPA Administrator Jackson said that in essence EPA is returning to the legal regime prior to passing the final rule.  Since there was not a biomass exemption prior to the final rule, the current stay will not result in an exemption for biomass emission permitting.  EPA is expected to issue guidance soon that state and local agencies may use to conclude biomass is the best available control technology until the official rulemaking in July is complete (see November 12, 2010 edition of the WER).

The EPA’s announcement is available here.