EPA Administrator Says Carbon Dioxide is not a “Regulated Pollutant”


In a December 18, 2008 interpretative memorandum, EPA Administrator Stephen Johnson provided an answer to the Environmental Appeals Board’s decision on In re: Deseret. As we noted in a prior Alert, the Deseret decision left air quality permit applicants in a state of uncertainty about whether and how carbon dioxide emissions must be addressed in their permit applications.

The December 18 memorandum gives EPA’s “definitive interpretation” of the term “regulated NSR pollutants,” which includes pollutants “subject to regulation under the [federal Clean Air Act]”. The federal Clean Air Act permitting requirements require EPA to consider regulated NSR (“New Source Review”) pollutants in determining what sources must obtain Prevention of Significant Deterioration (“PSD”) permits and what controls must be applied to those pollutants. The December 18 memorandum conformed to and expanded on EPA’s position in the Deseret case – that regulated NSR pollutants (for which best available control technology or BACT must be applied) do not include any pollutant, such as carbon dioxide, subject only to monitoring and reporting requirements. EPA noted that this interpretation is consistent with the applicable federal Clean Air Act provisions and with EPA practice of not imposing carbon dioxide emissions limitations in its permits.

The December 18 memorandum provides some certainty – for now – that permitting authorities do not have to set emission limitations for carbon dioxide in PSD permits. But, because it takes an approach inconsistent with views expressed by representatives of the new administration, the memorandum is likely to receive immediate attention. While it is unclear what actions, if any, the new administration may take in response, it is clear that the memorandum creates potential problems. Simply withdrawing the memorandum would leave the regulated community in the same state of uncertainty created by In re: Deseret. But issuing a memorandum providing a contrary interpretation – that carbon dioxide is a regulated pollutant – could lead to significant economic impacts, possibly triggering regulation of a large number of sources that have previously not needed permits.

We expect that ultimately carbon dioxide will either be comprehensively addressed in a new statutory provisions or be the subject of rulemaking under the Clean Air Act that will clearly classify carbon dioxide as a regulated NSR pollutant. But either of these approaches will take some time to implement.

If you have any questions, please contact:

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Jeff Civins 

Mary Mendoza

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