As of July 1, 2011, Phase II of the EPA tailoring rule became effective. As a consequence, the construction or modification of major sources of greenhouse gas air emissions may now require prevention of significant deterioration ("PSD") preconstruction permits and/or Title V operating permits based solely on their greenhouse gas emissions. During Phase I, which ran from January 2, 2011 until July 1, 2011, covered sources were required to obtain only PSD or Title V permits addressing greenhouse gas emissions if such permits were otherwise required based on the source's emissions of regulated air pollutants other than greenhouse gases.

For PSD permitting purposes, this means that, regardless of the emission of other pollutants, a PSD permit is now required for (a) the construction of any source with the potential to emit greenhouse gases exceeding both the applicable statutory threshold of 100 or 250 tons per year ("tpy") (without applying carbon dioxide equivalencies) and 100,000 tpy on a carbon dioxide equivalency basis; or (b) the modification of any existing major source of greenhouse gases that will increase the source's potential to emit greenhouse gases by 75,000 tpy of carbon dioxide equivalents or more. For Title V permitting purposes, this means that a Title V permit is now required for any source with the potential to emit 100 tpy of greenhouse gases (without applying carbon dioxide equivalencies) and the potential to emit at least 100,000 tpy on a carbon dioxide equivalency basis.

Further information regarding the tailoring rule can be found in the Jones Day White Paper, "Climate Change Regulation Via the Clean Air Act: EPA's New Greenhouse Gas Rule for Facilities," and our recorded webcast, "Beyond Cap and Trade: Climate Change Regulation Under the Clean Air Act Arrives."