Climate Change Work Group Reveals Phase II Report

On October 5, 2010, the EPA Clean Air Act Advisory Committee (CAAAC) Climate Change Work Group revealed a draft Phase II report that provides suggestions for conducting GHG Best Available Control Technology (BACT) Analyses.  The report focused on how to factor in efficiency to the GHG BACT process and on the use of innovative controls.  The report was presented at the full CAAAC meeting on October 6 and approved for EPA’s consideration.

The Phase I CAAAC GHG BACT report released by this workgroup in February recommended the use of the traditional Prevention of Significant Deterioration (PSD) BACT process for GHGs.  Following this report, the EPA Assistant Administrator (Gina McCarthy) asked the group to focus on energy efficiency and how a waiver for innovative control technology could be used or modified to promote new technologies to reduce GHGs.  Although EPA has already submitted proposed guidance on how to set BACT for GHGs to the White House Office of Management & Budget last month, the Phase II report is expected to also have influenced on that guidance.

The Phase II report provides a guide for permit writers to incorporate energy efficient processes and technologies (EEPT) into the top-down BACT analysis, long used within the PSD program for criteria pollutants.  For the first step, identification of available EEPT technologies, the group recommends reviewing the unit’s energy performance with a benchmark technology already in use, mitigation options for specific industry sectors, and newly available EEPTs potentially built outside the United States.   Sets of efficiency measures may be considered an available technology in the top-down analysis.  The report recommends that the next steps – elimination of technically infeasible technologies, ranks of remaining technologies, evaluation of energy and environmental impact – should follow established EPA guidance and policy.  In the last step of the BACT analysis, incorporation of the best remaining technology into the permit, the report suggests to consider the means of measuring and monitoring compliance with BACT emissions limits. 

Examples of incorporation of EEPT and the BACT steps are provided for new units at an existing facility, modifications to existing units, replacement units, and greenfield facilities.  The level of analysis is also discussed at length – whether it is appropriate to focus on the unit, process line, or the entire facility depending on whether it  is a new, modified or replacement unit or greenfield application.  The report also discussed incentives to “net out” of PSD applicability through energy efficiency measures so that there is no significant net increase in GHG emissions.  There was disagreement within the workgroup as to whether this could be allowed under the PSD program.  The CAAAC recommended that EPA determine how reductions made in grid-delivered power through efficiency measures could be considered in netting or other regulatory constructs to encourage GHG efficiency measures.

The report also discusses how the innovative control technology (ICT) waiver can be used to encourage innovative technologies that reduce GHG emissions.  If a stationary pollution source is using innovative technology, the CAA provides a waiver process to allow the source more time to meet new source performance standards.  In order to encourage use of ICTs, CAAAC recommended that EPA restructure the past guidance and application of the ICT waiver.  First, CAAAC recommended disavowing the 1991 Kamine Memorandum policy, which states that waivers could only be issued for the first application of an ICT, and not for subsequent applications.  CAAAC further recommends reevaluating the maximum waiver length as 7 years from permit issuance or 4 years after commencement of operation. 

If you have questions on the Phase II GHG BACT report, please contact your local Trinity office at (800) 229-6655.  The report will be posted on the CAAAC Climate Change Work Group website.