EPA’s proposed tailoring rule was published in the Federal Register today and the Agency announced a December 28, 2009 comment deadline.  The rule is intended to restrict the number of facilities that will be affected when EPA regulates greenhouse gas (GHG) emissions.

EPA is on course to commencing regulation of GHGs by the end of March 2010.  At that time, EPA is expected to finalize its rule establishing GHG emission standards for new motor vehicles.  Comments on the currently proposed motor vehicle GHG rule are due by November 27, 2008.  The comment period for EPA’s endangerment finding, which provides the foundation for EPA regulation of GHGs, ended on June 24, 2009, and EPA is expected to finalize that finding by November or December of this year.

When the motor vehicle rule is finalized in March, GHGs will become regulated air pollutants under the Clean Air Act.  As a result, any new or modified source emitting more than 250 tons per year (tpy) of GHGs must obtain a permit under the Prevention of Significant Deterioration (PSD) program and install Best Available Control Technology to restrict GHG emissions.  Sources emitting more than 100 tons tpy of GHGs must also obtain a Title V operating permit.

Concerned that literally millions of sources could become subject to PSD and Title V permitting requirements when GHGs become regulated air pollutants, EPA proposed the tailoring rule to redefine the trigger threshold to 25,000 tpy for a period of five years. According to EPA, only about 13,600 existing sources emit GHGs above that level.  Under the rule, during the five-year period, EPA will study ways to “streamline” permit requirements for sources emitting between 250 and 25,000 tpy, and within one year thereafter will promulgate such streamlined regulations.  Sources emitting between 250 and 25,000 tpy, however, will not be grandfathered and, when the new regulations are issued, will presumably be subject to those regulations in some currently undefined retroactive fashion.

Numerous observers, however, have questioned EPA’s legal authority to change the statutory 100/250 tpy threshold to 25,000 tpy.  Moreover, the Agency admits that, because permitting is generally administered by state agencies, states would need to change their permitting laws and regulations in order for the tailoring rule to effectively limit the application of the permitting programs to sources emitting above 25,000 tpy.  Some environmental parties in the past have questioned EPA’s legal authority to change the statutory thresholds, and some have argued that if EPA is going to change the threshold, it should be to a level lower than 25,000 tpy.

Further discussion of the proposed rule is contained here.


Peter S. Glaser

Mack McGuffey