The U.S. Environmental Protection Agency today published its new cross-state air pollution Transport Rule. The rule, which limits emissions of nitrogen oxides and sulfur dioxide from power plants in 27 eastern states, was announced by the EPA on July 6, 2011.

The Transport Rule will replace the EPA's 2005 Clean Air Interstate Rule (CAIR). A federal court found CAIR was deficient in 2008 and ordered the EPA to engage in a new rulemaking that ultimately led to the development of the Transport Rule. The rule establishes new NOx and SO2 budgets for affected states.

Emissions of NOx and SO2 in "upwind" states contribute to the formation of fine particulate matter (PM2.5) and ozone in "downwind" states. As a result, some downwind states have difficulty complying with the EPA's National Ambient Air Quality Standards for PM2.5 and ozone. Excessive concentrations of PM2.5 and ozone have been linked to serious human health effects, damage to habitats and visibility impairments.

The EPA map reproduced here shows how the Transport Rule will affect power plants in various states.

Click here to view the map.

As shown in the map, the Transport Rule will control multiple states for fine particles and ozone. There are two states (Minnesota and Nebraska) that will be controlled for fine particles only. And there are five southern states that will be controlled for ozone only.

The EPA anticipates that power plants that do not have up-to-date controls will need to install or upgrade equipment such as scrubbers and SCR systems. Additionally, the Transport Rule establishes an air quality trading program. The power plants within a state are allowed to make unlimited trades among themselves. Interstate trading is subject to more stringent limitations. Furthermore, allocations from prior programs such as CAIR will not carry over.

The EPA estimates that the Transport Rule will impose $800 million in annual costs by 2014. This is in addition to the $1.6 billion per year in investments already anticipated under CAIR. However, according to the EPA, the costs of the program will be far outweighed by $120 to $180 billion in annual health and welfare benefits.

The Transport Rule takes effect January 1, 2012, when the first phase of the rule's SO2 and NOx trading programs begin. Starting on May 1, 2012, the ozone season NOx trading program will take effect. Finally, on January 1, 2014, additional SO2 limitations will be imposed on power plants in 16 states.