The EPA on July 1, 2011 issued a final rule deferring for three years application of the Clean Air Act’s Prevention of Significant Deterioration (“PSD”) and Title V permitting requirements to carbon dioxide (“CO2”) emissions from biogenic stationary sources.  EPA and the Science Advisory Board will use the three-year deferral period to conduct an analysis of the impacts of emissions from bioenergy and other biogenic stationary sources prior to a final determination of how such emissions should be regulated.

The final action was precipitated by a Petition for Reconsideration of EPA’s PSD and Title V Greenhouse Gas Tailoring Rule, filed by the National Alliance of Forest Owners (“NAFO”) on August 3, 2010.  The PSD program is a preconstruction permitting process applicable to new major stationary emissions sources and major modifications at major stationary emissions sources.  The Title V program establishes operating permit requirements for certain emissions sources.  On March 11, 2011, EPA issued a proposal for rulemaking outlining its intention to issue a three-year deferral of PSD and Title V applicability to CO2 emissions from biogenic sources (see March 21, 2011 edition of the WER).  The Agency also issued interim guidance on how biogenic CO2 emissions should be treated until final decisions are made.

Biogenic CO2 emissions are defined as emissions of CO2 from a stationary source directly resulting from the combustion or decomposition of biologically-based materials other than fossil fuels and mineral sources of carbon.  In its final rule, EPA gives examples of possible sources affected, including electric utilities burning biomass fuels, wood products and wood pellet fuel manufacturing, solid waste combustors and incinerators, sewage treatment facilities, solid waste landfills, animal manure management operations, and ethanol manufacturing.

The NAFO applauded EPA’s deferral, stating that the final rule recognizes biomass’s important role as an “environmentally beneficial alternative to fossil fuels.”  The Clean Air Task Force, an environmental advocacy group, however, expressed concerns over a blanket deferral for all biogenic sources.  As a result of the final action, for the three year deferral period, biogenic CO2 emissions will not need to be counted for applicability purposes under PSD or Title V.