On July 1, 2011, U.S. EPA finalized an amendment to the federal greenhouse gas permitting regulations that will temporarily exclude certain biogenic carbon dioxide emissions from consideration in determining whether a source's level of emissions trigger permitting requirements under the Prevention of Significant Deterioration ("PSD") and Title V permit programs. The deferral of regulation of carbon dioxide emissions resulting from the combustion or decomposition of biologically based materials other than fossil fuels and mineral sources of carbon will last up to three years while EPA conducts a scientific study of the atmospheric impacts from such emissions and completes additional rulemaking based on the results of that study.

The deferral is not limited to emissions from specific categories of sources but will be of greatest benefit to landfills, wastewater treatment facilities, and manure management operations that produce significant carbon dioxide from biological decomposition, along with utilities and other facilities that burn wood, agricultural wastes, or biogas in place of fossil fuels to fuel industrial boilers. The deferral does not apply to biofuel emissions from mobile sources and does not apply to other greenhouse gases, most notably methane and nitrous oxide, often emitted when biological materials are burned or decompose.

The new rulemaking excludes biogenic carbon dioxide emissions from EPA's definition of emissions "subject to regulation" under the PSD and Title V programs, and will apply immediately upon publication in the Federal Register to sources in states that are subject to a federal implementation plan for greenhouse gas permitting and in states whose air regulations incorporate by reference the federal definition of "subject to regulation." The deferral will not apply to other state air permitting programs unless and until those states elect to amend their regulations.

The new exclusion does not apply retroactively, so permitted sources that would not have been subject to permitting if the regulation had previously been in effect must continue to comply with their existing permits. Conversely, facility construction projects that avoid PSD preconstruction permit requirements during the term of the deferral will not become subject to permitting when the deferral expires, unless and until some new activity, such as a major modification to the source, occurs.