Audit, Compliance and Risk Blog

The US Environmental Protection Agency (EPA) continues to expand and refine environmental compliance requirements, including those related to greenhouse gas (GHG) emissions. In particular, facilities and organizations subject to EPA's mandatory GHG emission reporting rules should be preparing to submit reports covering calendar year 2021. The remainder of this note summarizes these requirements.

During the last decade, federal state authorities have sparred with themselves and with states over regulatory standards limiting greenhouse gas (GHG) emissions from automobiles. Nationally, the US Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) share authority over fleetwide and individual vehicle standards. EPA applies authority under the Clean Air act (CAA) and NHTSA applies authority under the Energy Policy and Conservation Act of 1975 (EPCA) including Corporate Average Fuel Economy (CAFÉ) standards. In addition, the state of California has unique CAA authority over vehicle emission; in recent years, Democratic presidential administrations generally produce federal-state cooperation, whereas Republican presidential administrations produce conflicts. (I’ve written about these issues several times, most recently HERE). True to this pattern, on December 21, 2021 EPA issued tighter vehicle emission rules covering Model Years (MY) 2023 through 2026, and NHTSA rescinded its (Trump era) rule preempting California’s stricter GHG emission standards. The remainder of this note discusses these new rules, within the context of ongoing rulemakings.

One of the longest running sub-national greenhouse gas (GHG) control efforts in the U.S. has been the Regional Greenhouse Gas Initiative (RGGI) program. RGGI provides a cap-and-trade program covering GHG emissions from targeted fossil fuel power plants in participating northeastern states. The program is preparing to add a new participating state in 2021 -- Virginia.

After nearly a decade of talking and planning, most of the northeast and middle Atlantic states (plus the District of Columbia) in the Transportation and Climate Initiative (TCI) have proposed a cap-and-trade program intended to reduce greenhouse gas (GHG) emissions from transportation. On October 1, TCI issued a “Framework for a Draft Regional Policy Proposal,” and on December 17 a formal “Draft Memorandum of Understanding (MOU)” that jurisdictions can sign to formalize their participation. If things go well, the formal program should begin in 2020.

On August 23, the federal Court of Appeals for the District of Columbia (DC Circuit) upheld most aspects of the National Ambient Air Quality Standards (NAAQS) for ground level ozone adopted by the Environmental Protection Agency (EPA) in 2015. The Clean Air Act (CAA) requires EPA to create a list of air pollutants based on emissions that cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare (criteria pollutants), to establish NAAQS based on these criteria, and to review the NAAQS every 5 years.

The Clean Air Act (CAA) directs the Environmental Protection Agency (EPA) to define “hazardous air pollutants (HAPs)” that may pose acute health hazards, and to impose regulations to reduce those hazards. EPA requires permits for “major sources” of HAPs based on “Maximum Achievable Control Technologies (MACT),” and lesser controls for non-major “area sources.” Since the Trump Administration took office, EPA has pursued several initiatives to make it easier for sources to reclassify from “major” to “area” in order to reduce their regulatory responsibilities. For example, in January 2018 EPA ended a decades-old policy declaring that every emission source that met major source criteria at the time a MACT became effective was “once in, always in” and could not requalify as a less-regulated area source by accepting legally binding controls that reduce its “potential to emit (PTE).” (I wrote about this change here).

Since the Trump Administration reversed the federal government’s agreement with California for joint motor vehicle greenhouse gas (GHG) standards, federal and state agencies have moved steadily to assert their respective authorities and to sue their counterparts. However, on July 25, 2019 California and 4 major vehicle manufacturers announced a voluntary agreement that eases the state requirements somewhat while making the looser federal standards irrelevant for those companies – and for any additional manufacturers that might join later.

The Environmental Protection Agency (EPA) has just issued rules that repeal and replace one of the Obama-era EPA’s signature efforts to reduce greenhouse gas (GHG) emissions. Effective September 6, EPA’s new “Affordable Clean Energy Rule” (ACE) will replace the “Clean Power Plan” adopted in 2015 but stayed by litigation (I wrote about the proposed CPP here). As anyone who has compared the Obama and Trump Administrations' approaches to climate change would expect, the new rule reduces the old rule’s requirements. It softens the mandates in the earlier rule, and offers states more flexibility to design their own efforts to control GHG emissions from existing fossil fuel-fired electricity generating units (EGUs) by eliminating CPP requirements that states consider operational changes “outside the fenceline” of the regulated EGUs.

Among its many provisions, the Emergency Planning and Community Right-To-Know Act of 1986 (EPCRA, in this case Section 304) requires facilities to report releases of specified hazardous and extremely hazardous substances, if the release exceeds an applicable threshold reportable quantity (RQ). The Environmental Protection Agency (EPA) administers these requirements, and has just approved an exemption for emissions from animal wastes at farms (this exemption tracks one amended into the Superfund law (CERCLA) in 2018). Other types of facilities and activities are still subject to these reporting requirements, so it’s a good time to review them.

The Environmental Protection Agency (EPA) has completed a long review, and reaffirmed the primary National Ambient Air Quality Standard (NAAQS) for oxides of sulfur (SOX; usually measured as sulfur dioxide (SO₂)). This is the first review of the primary SOX NAAQs since 2010 (primary standard – EPA did not review the secondary SOX NAAQS established in 2012).