As had been promised for months, on April 1, 2010, U.S. EPA and the U.S. Department of Transportation jointly issued a final rule establishing fuel economy standards and greenhouse gas emission limits for new automobiles and light trucks, model years 2012–2016. The emission limits are an outgrowth of EPA's December 2009 finding pursuant to the Clean Air Act that greenhouse gas emissions from vehicles cause or contribute to pollution that endangers the public health and welfare of current and future generations. Although the new rule will become effective in early June 2010, actual compliance obligations will not apply until January 2, 2011, the earliest date that model year 2012 vehicles may be sold.
Absent some superseding legislative development (discussed elsewhere in this edition of The Climate Report), EPA is poised to impose additional greenhouse gas emission regulations in the near future. Adoption of Clean Air Act standards for greenhouse gas emissions from vehicles triggers a statutory duty to regulate such emissions from stationary sources, such as manufacturing plants, as well. On April 2, 2010, EPA finalized interpretive guidance stating that stationary source emissions would be regulated beginning on January 2, 2011, the date on which EPA will deem greenhouse gases first "subject to regulation" under the Act via compliance with the new vehicle emission standards. EPA's conclusion was based on a reconsideration of a Bush-era interpretation of the statute that would likely have triggered stationary source regulation even sooner after adoption of the vehicle standards.
What remains unresolved is what the forthcoming stationary source standards will ultimately require. EPA's October 2009 proposed stationary source rule indicated that the Agency intends to address greenhouse gas emissions from such sources via the Clean Air Act's Title V operating permit program and "Prevention of Significant Deterioration" preconstruction permitting program for new and modified emission sources.
On February 22, 2010, EPA Administrator Lisa Jackson sent a letter to eight senators signaling that the final stationary source standards will be less onerous than the Agency first proposed. Most significantly, Administrator Jackson indicated that the threshold for regulation would initially be "substantially higher than the 25,000 ton [per year] limit that EPA originally proposed." Administrator Jackson later stated that during 2011–12, the final rule will apply only to new or modified sources with at least 75,000 tons of potential carbon dioxide equivalent emissions per year. The Administrator has not indicated what the threshold will be thereafter, although it appears that the threshold will be no lower than 25,000 tons through 2015.
Administrator Jackson's letter also indicated that the new standards will be phased in. During the first six months of 2011, regulators will apply greenhouse gas requirements—primarily the requirement that sources apply the "Best Available Control Technology" for such emissions—only to those facilities that would otherwise be subject to Clean Air Act permitting due to their non-greenhouse gas emissions. Beginning in July 2011, facilities could become subject to Clean Air Act requirements, including the obligation to apply BACT, based solely on their potential to emit carbon dioxide or other greenhouse gases.
Administrator Jackson's recent letter provided no new insights on a key issue left open in the proposed stationary source rule: What constitutes the Best Available Control Technology for greenhouse gas emissions? As discussed elsewhere in this edition, few commercially viable options currently exist, a circumstance that may in the near future bedevil both permit applicants and government permit writers.