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Proposed Rule2022-04551

Federal Implementation Plan Addressing Regional Ozone Transport for the 2015 Ozone National Ambient Air Quality Standard

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Published

April 6, 2022

Issuing agencies

Environmental Protection Agency

Abstract

This action proposes Federal Implementation Plan (FIP) requirements to address twenty-six states' obligations to eliminate significant contribution to nonattainment, or interference with maintenance, of the 2015 ozone National Ambient Air Quality Standard (NAAQS) in other states. The U.S. Environmental Protection Agency (EPA) is proposing this action under the "good neighbor" or "interstate transport" provision of the Clean Air Act (CAA or Act). The Agency proposes establishing nitrogen oxides emissions budgets requiring fossil fuel-fired power plants in 25 states to participate in an allowance-based ozone season trading program beginning in 2023. The Agency is also proposing to establish nitrogen oxides emissions limitations applicable to certain other industrial stationary sources in 23 states with an earliest possible compliance date of 2026. These industrial source types are: Reciprocating internal combustion engines in Pipeline Transportation of Natural Gas; kilns in Cement and Cement Product Manufacturing; boilers and furnaces in Iron and Steel Mills and Ferroalloy Manufacturing; furnaces in Glass and Glass Product Manufacturing; and high-emitting equipment and large boilers in Basic Chemical Manufacturing, Petroleum and Coal Products Manufacturing, and Pulp, Paper, and Paperboard Mills.

Full Text

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[Federal Register Volume 87, Number 66 (Wednesday, April 6, 2022)]
[Proposed Rules]
[Pages 20036-20216]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-04551]

[[Page 20035]]

Vol. 87

Wednesday,

No. 66

April 6, 2022

Part II

Environmental Protection Agency

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40 CFR Parts 52, 75, 78, et al.

Federal Implementation Plan Addressing Regional Ozone Transport for the
2015 Ozone National Ambient Air Quality Standard; Proposed Rule

Federal Register / Vol. 87, No. 66 / Wednesday, April 6, 2022 /
Proposed Rules

[[Page 20036]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52, 75, 78 and 97

[EPA-HQ-OAR-2021-0668; FRL 8670-01-OAR]
RIN 2060-AV51

Federal Implementation Plan Addressing Regional Ozone Transport
for the 2015 Ozone National Ambient Air Quality Standard

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This action proposes Federal Implementation Plan (FIP)
requirements to address twenty-six states' obligations to eliminate
significant contribution to nonattainment, or interference with
maintenance, of the 2015 ozone National Ambient Air Quality Standard
(NAAQS) in other states. The U.S. Environmental Protection Agency (EPA)
is proposing this action under the ``good neighbor'' or ``interstate
transport'' provision of the Clean Air Act (CAA or Act). The Agency
proposes establishing nitrogen oxides emissions budgets requiring
fossil fuel-fired power plants in 25 states to participate in an
allowance-based ozone season trading program beginning in 2023. The
Agency is also proposing to establish nitrogen oxides emissions
limitations applicable to certain other industrial stationary sources
in 23 states with an earliest possible compliance date of 2026. These
industrial source types are: Reciprocating internal combustion engines
in Pipeline Transportation of Natural Gas; kilns in Cement and Cement
Product Manufacturing; boilers and furnaces in Iron and Steel Mills and
Ferroalloy Manufacturing; furnaces in Glass and Glass Product
Manufacturing; and high-emitting equipment and large boilers in Basic
Chemical Manufacturing, Petroleum and Coal Products Manufacturing, and
Pulp, Paper, and Paperboard Mills.

DATES: Comments must be received on or before June 6, 2022.
Public Hearing: The EPA will hold a virtual public hearing on April
21, 2022. Please refer to the SUPPLEMENTARY INFORMATION section for
additional information on the public hearing.
Information Collection Request (ICR): Under the Paperwork Reduction
Act (PRA), comments on the information collection provisions are best
assured of consideration if the Office of Management and Budget (OMB)
receives a copy of your comments on or before May 6, 2022.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2021-0668; via the Federal eRulemaking Portal: <a href="https://www.regulations.gov/">https://www.regulations.gov/</a> (our preferred method). Follow the online
instructions for submitting comments.
Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>, including any personal information
provided. For detailed instructions on sending comments and additional
information on the rulemaking process, see the ``Public Participation''
heading of the SUPPLEMENTARY INFORMATION section of this document. Out
of an abundance of caution for members of the public and our staff, the
EPA Docket Center and Reading Room are open to the public by
appointment only to reduce the risk of transmitting COVID-19. Our
Docket Center staff also continues to provide remote customer service
via email, phone, and webform. Hand deliveries and couriers may be
received by scheduled appointment only. For further information on EPA
Docket Center services and the current status, please visit us online
at <a href="https://www.epa.gov/dockets">https://www.epa.gov/dockets</a>.
The virtual public hearing will be held on April 21, 2022. The
virtual public hearing will convene at 10 a.m. Eastern Time (ET) and
will conclude at 7 p.m. ET. The EPA may close a session 15 minutes
after the last pre-registered speaker has testified if there are no
additional speakers. For information or questions about the public
hearing, please contact Ms. Holly DeJong at <a href="/cdn-cgi/l/email-protection#f5b1909f9a9b92db9d9a99998cb5908594db929a83">[email&#160;protected]</a>. The
EPA will announce further details at <a href="https://www.epa.gov/csapr/csapr-2015-ozone-naaqs">https://www.epa.gov/csapr/csapr-2015-ozone-naaqs</a>. Refer to the SUPPLEMENTARY INFORMATION section for
additional information.

FOR FURTHER INFORMATION CONTACT: Ms. Elizabeth Selbst, Air Quality
Policy Division, Office of Air Quality Planning and Standards (C539-
01), Environmental Protection Agency, 109 TW Alexander Drive, Research
Triangle Park, NC 27711; telephone number: (919)-541-3918; email
address: <a href="/cdn-cgi/l/email-protection#3b685e5759484f155e5752415a595e4f537b5e4b5a155c544d">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Preamble Glossary of Terms and Abbreviations

The following are abbreviations of terms used in the preamble.

2016v1 2016 Version 1 Emissions Modeling Platform
2016v2 2016 Version 2 Emissions Modeling Platform
4-Step Framework 4-Step Interstate Transport Framework
ACS American Community Survey
AEO Annual Energy Outlook
AQAT Air Quality Assessment Tool
AQMTSD Air Quality Modeling Technical Support Document
BACT Best Available Control Technology
BPT Benefit Per Ton
CAA or Act Clean Air Act
CAIR Clean Air Interstate Rule
CBI Confidential Business Information
CCR Coal Combustion Residual
CDC Centers for Disease Control and Prevention
CEMS Continuous Emissions Monitoring Systems
CES Clean Energy Standards
CHP Combined Heat and Power
CMDB Control Measures Database
CMV Commercial Marine Vehicle
CoST Control Strategy Tool
CPT Cost Per Ton
CSAPR Cross-State Air Pollution Rule
EGU Electric Generating Unit
EIA U.S. Energy Information Agency
EISA Energy Independence and Security Act
ELG Effluent Limitation Guidelines
E.O. Executive Order
EPA or the Agency United States Environmental Protection Agency
FFS Finding of Failure To Submit
FIP Federal Implementation Plan
GIS Geographic Information System
HDGHG Greenhouse Gas Emissions and Fuel Efficiency Standards for
Medium- and Heavy-Duty Engines and Vehicles
HEDD High Electricity Demand Days
ICI Industrial, Commercial, and Institutional
I/M Inspection and Maintenance
IPM Integrated Planning Model
LNB Low-NO<INF>X</INF> Burners
MJO Multi-Jurisdictional Organization
MOVES Motor Vehicle Emission Simulator
MSAT2 Mobile Source Air Toxics Rule
MWC Municipal Waste Combustor
NAAQS National Ambient Air Quality Standards
NAICS North American Industry Classification System
NEEDS National Electric Energy Data System
NEI National Emissions Inventory
NESHAP National Emissions Standards for Hazardous Air Pollutants
No SISNOSE No Significant Economic Impact on a Substantial Number of
Small Entities
Non-EGU Non-Electric Generating Unit
NO<INF>X</INF> Nitrogen Oxides
NSPS New Source Performance Standard
NREL National Renewable Energy Lab
NTTAA National Technology Transfer and Advancement Act
OFA Over-Fire Air
OMB United States Office of Management and Budget
OSAT/APCA Ozone Source Apportionment Technology/Anthropogenic
Precursor Culpability Analysis
OTC Ozone Transport Commission
OTR Ozone Transport Region
OTSA Oklahoma Tribal Statistical Area
PEMS Predictive Emissions Monitoring Systems

[[Page 20037]]

PM<INF>2.5</INF> Fine Particulate Matter
ppb parts per billion
ppm parts per million
ppmvd parts per million by volume, dry
PRA Paperwork Reduction Act
RACT Reasonably Available Control Technology
RFA Regulatory Flexibility Act
RICE Reciprocating Internal Combustion Engines
ROP Rate of Progress
RPS Renewable Portfolio Standards
RRF Relative Response Factor
SAFE Safer Affordable Fuel-Efficient Vehicles Rule
SAFETEA Safe, Accountable, Flexible, Efficient, Transportation
Equity Act
SCR Selective Catalytic Reduction
SIP State Implementation Plan
SMOKE Sparse Matrix Operator Kernel Emissions
SNCR Selective Non-Catalytic Reduction
SO<INF>2</INF> Sulfur Dioxide
tpd ton per day
TSD Technical Support Document
UMRA Unfunded Mandates Reform Act
VMT Vehicle Miles Traveled
VOCs Volatile Organic Compounds
WRAP Western Regional Air Partnership
WRF Weather Research and Forecasting

Table of Contents

I. Executive Summary
A. Purpose of Regulatory Action
1. Emissions Limitations for EGUs Established by the Proposed
Rule
2. Emissions Limitations for Non-EGU Stationary Point Sources
Established by the Proposed Rule
3. Proposed Error Correction for Previously Approved 2015 Ozone
Transport SIP
4. Request for Comment on All Aspects of the Proposal
B. Summary of the Major Provisions of the Regulatory Action
C. Benefits and Costs
II. Public Participation
A. Written Comments
B. Submitting Confidential Business Information
C. Participation in Virtual Public Hearing
III. General Information
A. Does this action apply to me?
B. What action is the Agency taking?
C. What is the Agency's legal authority for taking this action?
1. Statutory Authority
D. What actions has EPA previously issued to address regional
ozone transport?
IV. Air Quality Issues Addressed and Overall Approach for the
Proposed Rule
A. The Interstate Ozone Transport Air Quality Challenge
1. Nature of Ozone and the Ozone NAAQS
2. Ozone Transport
3. Health and Environmental Effects
B. Proposed Rule Approach
1. The 4-Step Interstate Transport Framework
a. Step 1 Approach
b. Step 2 Approach
c. Step 3 Approach
d. Step 4 Approach
2. FIP Authority for Each State Covered by the Proposed Rule
C. Other CAA Authorities for This Action
1. Correction of EPA's Determination Regarding Delaware's SIP
Submission and Its Impact on EPA's FIP Authority for Delaware
2. Application of Rule in Indian Country and Necessary or
Appropriate Finding
a. Indian Country Subject to State Implementation Planning
Authority
V. Analyzing Downwind Air Quality Problems and Contributions From
Upwind States
A. Selection of Analytic Years for Evaluating Ozone Transport
Contributions to Downwind Air Quality Problems
B. Overview of Air Quality Modeling Platform
C. Emissions Inventories
1. Foundation Emissions Inventory Data Sets
2. Development of Emissions Inventories for EGUs
3. Development of Emissions Inventories for Non-EGU Point
Sources
4. Development of Emissions Inventories for Onroad Mobile
Sources
5. Development of Emissions Inventories for Commercial Marine
Vessels
6. Development of Emissions Inventories for Other Nonroad Mobile
Sources
7. Development of Emissions Inventories for Nonpoint Sources
D. Air Quality Modeling To Identify Nonattainment and
Maintenance Receptors
E. Pollutant Transport From Upwind States
1. Air Quality Modeling To Quantify Upwind State Contributions
2. Application of Contribution Screening Threshold
a. States That Contribute at or Above the Screening Threshold
F. Treatment of Certain Receptors in California and Implications
for Oregon's Good Neighbor Obligations for 2015 Ozone NAAQS
VI. Quantifying Upwind-State NO<INF>X</INF> Emissions Reduction
Potential To Reduce Interstate Ozone Transport for the 2015 Ozone
NAAQS
A. The Multi-Factor Test for Determining Significant
Contribution
B. Identifying Control Stringency Levels
1. EGU NO<INF>X</INF> Mitigation Strategies
a. Optimizing Existing SCRs
b. Installing State-of-the-Art NO<INF>X</INF> Combustion
Controls
c. Optimizing Already Operating SNCRs or Turning on Idled
Existing SNCRs
d. Installing New SNCRs
e. Installing New SCRs
f. Generation Shifting
2. Non-EGU NO<INF>X</INF> Mitigation Strategies
a. Determining Non-EGU NO<INF>X</INF> Reduction Potential
3. Other Stationary Sources NO<INF>X</INF> Mitigation Strategies
a. Units Less Than or Equal to 25 MW
b. Municipal Solid Waste Units
c. Cogeneration Units
4. Mobile Source NO<INF>X</INF> Mitigation Strategies
C. Control Stringencies Represented by Cost Threshold ($ per
Ton) and Corresponding Emissions Reductions
1. EGU Emissions Reduction Potential by Cost Threshold
2. Non-EGU Emissions Reduction Potential--Cost Threshold Up to
$7,500/Ton
D. Assessing Cost, EGU and Non-EGU NO<INF>X</INF> Reductions,
and Air Quality
1. EGU Assessment
2. Non-EGU Assessment
a. Request for Comment on Non-EGU Control Strategies and
Measures
3. Combined EGU and Non-EGU Assessment
4. Over-Control Analysis
VII. Implementation of Emissions Reductions
A. NO<INF>X</INF> Reduction Implementation Schedule
1. 2023-2025: EGU NO<INF>X</INF> Reductions Beginning in 2023
2. 2026 and Later Years: EGU and Non-EGU EGU NO<INF>X</INF>
Reductions Beginning in 2026
a. EGU Schedule for 2026 and Later Years
b. Non-EGU Schedule for 2026 and Later Years
B. Regulatory Requirements for EGUs
1. Trading Program Background and Overview of Proposed Revisions
a. Current CSAPR Trading Program Design Elements and Identified
Concerns
b. Enhancements To Maintain Selected Control Stringency Over
Time
i. Revised Emissions Budget-Setting Process
ii. Allowance Bank Recalibration
c. Enhancements To Improve Emissions Performance at Individual
Units
i. Unit-Specific Backstop Daily Emissions Rates
ii. Unit-Specific Emissions Limitations Contingent on Assurance
Level Exceedances
2. Expansion of Geographic Scope
3. Applicability and Tentative Identification of Newly Affected
Units
4. New and Revised State Emissions Budgets
a. Methodology for Determining Preset State Emissions Budgets
for the 2023 and 2024 Control Periods
b. Methodology for Determining Dynamic State Emissions Budgets
for Control Periods in 2025 and Beyond
c. Proposed and Illustrative State Emissions Budgets
5. Variability Limits and Assurance Levels
6. Annual Recalibration of Allowance Bank
7. Unit-Specific Backstop Daily Emissions Rates
8. Unit-Specific Emissions Limitations Contingent on Assurance
Level Exceedances
9. Unit-Level Allowance Allocation and Recordation Procedures
a. Set-Asides of Portions of State Emissions Budgets for New
Units
b. Allocations to Existing Units, Including Units That Cease
Operation
c. Allocations From Portions of State Emissions Budgets Set
Aside for New Units
d. Incorrectly Allocated Allowances
10. Other Trading Program Provisions
a. Designated Representative Requirements
b. Monitoring and Reporting Requirements
11. Transitional Provisions
a. Prorating Emissions Budgets, Assurance Levels, and Unit-Level
Allowance

[[Page 20038]]

Allocations in the Event of an Effective Date After May 1, 2023
b. Creation of Additional Group 3 Allowance Bank for 2023
Control Period
c. Recall of Group 2 Allowances for Control Periods After 2022
12. Conforming Revisions to Other Regulations
C. Regulatory Requirements for Non-EGUs
1. Pipeline Transportation of Natural Gas
2. Cement and Concrete Product Manufacturing
3. Iron and Steel Mills and Ferroalloy Manufacturing
4. Glass and Glass Product Manufacturing
5. Boilers From Basic Chemical Manufacturing, Petroleum and Coal
Products Manufacturing, and Pulp, Paper, and Paperboard Mills
a. Coal-Fired Industrial Boilers
b. Oil-Fired Industrial Boilers
c. Gas-Fired Industrial Boilers
D. Submitting a SIP
1. SIP Option To Modify Allocations for 2024 Under EGU Trading
Program
2. SIP Option To Modify Allocations for 2025 and Beyond Under
EGU Trading Program
3. SIP Option To Replace the Federal EGU Trading Program With an
Integrated State EGU Trading Program
4. SIP Revisions That Do Not Use the New Trading Program
5. SIP Revision Requirements for Non-EGU Emissions Limits
E. Title V Permitting
F. Relationship to Other Emissions Trading and Ozone Transport
Programs
1. NO<INF>X</INF> SIP Call
2. Acid Rain Program
3. Other Current Emissions Trading Programs
VIII. Environmental Justice Considerations, Implications, and
Stakeholder Outreach
A. Introduction
B. Analytical Considerations
C. Outreach and Engagement
IX. Costs, Benefits, and Other Impacts of the Proposed Rule
X. Summary of Proposed Changes to the Regulatory Text for the
Federal Implementation Plans and Trading Programs for EGUs
A. Amendments to FIP Provisions in 40 CFR Part 52
B. Amendments to Group 3 Trading Program and Related Regulations
C. Transitional Provisions
D. Clarifications and Conforming Revisions
XI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
I. National Technology Transfer and Advancement Act (NTTAA)
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Determinations Under CAA Section 307(b)(1) and (d)

I. Executive Summary

This proposed rule would resolve the interstate transport
obligations of 26 states under CAA section 110(a)(2)(D)(i)(I), referred
to as the ``good neighbor provision'' or the ``interstate transport
provision'' of the Act, for the 2015 ozone NAAQS. On October 1, 2015,
the EPA revised the primary and secondary 8-hour standards for ozone to
70 parts per billion (ppb).\1\ States were required to provide ozone
infrastructure State Implementation Plan (SIP) submissions to fulfill
interstate transport obligations for the 2015 ozone NAAQS by October 1,
2018.
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\1\ See 80 FR 65291 (October 26, 2015).
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The EPA proposes to make a finding that interstate transport of
ozone precursor emissions from 26 upwind states (Alabama, Arkansas,
California, Delaware, Illinois, Indiana, Kentucky, Louisiana, Maryland,
Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New
York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia,
West Virginia, Wisconsin, and Wyoming) is significantly contributing to
downwind nonattainment or interfering with maintenance of the 2015
ozone NAAQS in other states, based on projected nitrogen oxides
(NO<INF>X</INF>) emissions in the 2023 ozone season. The EPA is
proposing to issue FIP requirements to eliminate interstate transport
of ozone precursors from these 26 states that significantly contributes
to nonattainment or interferes with maintenance of the NAAQS in other
states.
The EPA is proposing FIPs for 23 states for which the Agency has
not approved an ozone transport SIP that was submitted for the 2015
ozone NAAQS: Alabama, Arkansas, California, Illinois, Indiana,
Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi,
Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Tennessee,
Texas, Utah, West Virginia, Wisconsin, and Wyoming. In this proposed
rule, the EPA is proposing to issue FIPs for two states--Pennsylvania
and Virginia--for which the EPA issued a Finding of Failure to Submit
for 2015 ozone transport SIPs with an effective date of January 6,
2020. Under CAA section 301(d)(4), the EPA proposes to extend FIP
requirements to apply in Indian country located within the upwind
geography of the proposed rule, including Indian reservation lands and
other areas of Indian country over which the EPA or a tribe has
demonstrated that a tribe has jurisdiction.\2\ The EPA is also
proposing a FIP for Delaware and an error correction for the Agency's
May 1, 2020, approval at 85 FR 25307 of the interstate transport
elements for Delaware's October 11, 2018, and December 26, 2019, ozone
infrastructure SIP submissions.
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\2\ In general, specific tribal names or reservations are not
identified separately in this proposal except as needed. See Section
IV.C.2 of this notice for further discussion.
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In this proposed rule, the EPA proposes to establish new ozone
season NO<INF>X</INF> emissions budgets beginning in 2023 for Electric
Generating Unit (EGU) sources. The EPA is also proposing to establish
emissions limitations beginning in 2026 for certain other industrial
stationary sources (referred to generally as ``non-Electric Generating
Units'' (non-EGUs)). Taken together, these strategies will fully
eliminate the covered states' significant contribution to downwind
ozone air quality problems in other states.
The EPA proposes to implement the necessary emissions reductions as
follows. The proposed FIP requirements establish ozone season
NO<INF>X</INF> emissions budgets for EGUs in 25 states (Alabama,
Arkansas, Delaware, Illinois, Indiana, Kentucky, Louisiana, Maryland,
Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New
York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia,
West Virginia, Wisconsin, and Wyoming) and require EGUs in these states
to participate in a revised version of the Cross-State Air Pollution
Rule (CSAPR) NO<INF>X</INF> Ozone Season Group 3 Trading Program that
was previously established in the Revised CSAPR Update.\3\ The EPA
proposes to amend existing FIPs for 12 states currently participating
in the CSAPR NO<INF>X</INF> Ozone Season Group 3 Trading Program
(Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New
Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia) to
replace their existing emissions budgets established in the Revised
CSAPR Update (with respect to the 2008 ozone NAAQS) with new

[[Page 20039]]

emissions budgets. For eight states currently covered by the CSAPR
NO<INF>X</INF> Ozone Season Group 2 Trading Program under SIPs or FIPs,
the EPA is proposing to issue new FIPs for two states (Alabama and
Missouri) and amend existing FIPs for six states (Arkansas,
Mississippi, Oklahoma, Tennessee, Texas, and Wisconsin) to transition
EGU sources in these states from the Group 2 program to the revised
Group 3 trading program, beginning with the 2023 ozone season. EPA
proposes to issue new FIPs for five states not currently covered by any
CSAPR NO<INF>X</INF> ozone season trading program: Delaware, Minnesota,
Nevada, Utah, and Wyoming.
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\3\ As explained in Section VI.C.1 of this notice, EPA proposes
finding that EGU sources within the State of California are
sufficiently controlled such that no further emissions reductions
are needed from them to eliminate significant contribution to
downwind states.
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Under this proposed rulemaking, emissions reductions in the
selected control stringency would be achieved as soon as they are
available, some of which are scheduled to occur by the 2023 ozone
season and prior to the August 3, 2024, attainment date for areas
classified as Moderate nonattainment for the 2015 ozone NAAQS, and the
rest of which occur as soon as possible thereafter through the 2026
ozone season, prior to the August 3, 2027, attainment date for areas
classified as Serious nonattainment for the 2015 ozone NAAQS. As
discussed in Section VII.A.2 of this notice, the EPA proposes to find
that the 2026 ozone season is as expeditious as practicable to
implement substantial emissions reductions from potential new post-
combustion control installations at EGUs as well as from installation
of new pollution controls at non-EGUs.
These EGU emissions reductions are scheduled to begin in the 2026
ozone season based on the feasibility of control installation for EGUs
in 22 states that remain linked to downwind nonattainment and
maintenance receptors in that year. These 22 states are: Arkansas,
Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota,
Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma,
Pennsylvania, Texas, Utah, Virginia, West Virginia, Wisconsin, and
Wyoming. The additional emissions reductions required for these states
are based primarily on the potential retrofit of additional post-
combustion controls for NO<INF>X</INF> on most coal steam EGUs and a
portion of oil/gas steam EGUs that are currently lacking such controls.
In this proposed rule, the EPA introduces additional features to
the allowance-based trading program approach for EGUs, including
dynamic adjustments of the emissions budgets over time and backstop
daily emissions rate limits for most coal-fired units, that will help
maintain control stringency over time and improve emissions performance
at individual units, providing further assurance that existing
pollution controls will be operated during the ozone season and that
the emission reductions necessary to meet good neighbor requirements
will be achieved.
The EPA proposes to find that NO<INF>X</INF> emissions from non-EGU
sources are significantly contributing to nonattainment or interfering
with maintenance of the 2015 ozone NAAQS and that cost-effective
controls for NO<INF>X</INF> emissions reductions are available in
certain industrial source categories that would result in meaningful
air quality improvements in downwind receptors. The EPA proposes to
require emissions limitations beginning in 2026 for non-EGUs located
within 23 states: Arkansas, California, Illinois, Indiana, Kentucky,
Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri,
Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas,
Utah, Virginia, West Virginia, Wisconsin, and Wyoming. The proposed
rule establishes NO<INF>X</INF> emissions limitations during the ozone
season for the following unit types for sources in non-EGU industries:
Reciprocating internal combustion in Pipeline Transportation of Natural
Gas sources; kilns in Cement and Cement Product Manufacturing sources;
boilers and furnaces in Iron and Steel Mills and Ferroalloy
Manufacturing sources; furnaces in Glass and Glass Product
Manufacturing sources; and high-emitting equipment and large boilers in
Basic Chemical Manufacturing, Petroleum and Coal Products
Manufacturing, and Pulp, Paper, and Paperboard Mills.

A. Purpose of the Regulatory Action

The purpose of this rulemaking is to protect public health and the
environment by reducing interstate transport of certain air pollutants
that significantly contribute to nonattainment, or interfere with
maintenance, of the 2015 ozone NAAQS in other states. Ground-level
ozone has detrimental effects on human health as well as vegetation and
ecosystems. Acute and chronic exposure to ozone in humans is associated
with premature mortality and a number of morbidity effects, such as
asthma exacerbation. Ozone exposure can also negatively impact
ecosystems by limiting tree growth, causing foliar injury, and changing
ecosystem community composition. Section IV of this proposed rule
provides additional evidence of the harmful effects of ozone exposure
on human health and the environment. Studies have established that
ozone air pollution can be transported over hundreds of miles, with
elevated ground-level ozone concentrations occurring in rural and
metropolitan areas.4 5 Assessments of ozone control
approaches have concluded that control strategies targeting reduction
of NO<INF>X</INF> emissions are an effective method to reduce regional-
scale ozone transport.\6\
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\4\ Bergin, M.S. et al. (2007) Regional air quality: Local and
interstate impacts of NO<INF>X</INF> and SO<INF>2</INF> emissions on
ozone and fine particulate matter in the eastern United States.
Environmental Sci & Tech. 41: 4677-4689.
\5\ Liao, K. et al. (2013) Impacts of interstate transport of
pollutants on high ozone events over the Mid-Atlantic United States.
Atmospheric Environment 84, 100-112.
\6\ See 82 FR 51238, 51248 (November 3, 2017) [citing 76 FR
48208, 48222 (August 8, 2011)] and 63 FR 57381 (October 27, 1998).
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CAA section 110(a)(2)(D)(i)(I) requires states to prohibit
emissions that will contribute significantly to nonattainment or
interfere with maintenance in any other state with respect to any
primary or secondary NAAQS.\7\ States fulfill their primary
responsibility to address interstate transport emissions under the good
neighbor provision by submitting SIPs containing enforceable emission
limitations and other control measures, means, or techniques required
to address the interstate transport provision. Within 3 years of the
EPA promulgating a new or revised NAAQS, states are required to provide
infrastructure SIP submittals, including good neighbor SIPs. See CAA
section 110(a)(1) and (2). When states do not submit approvable
interstate transport SIPs or fail to submit interstate transport SIPs
by the statutory deadline, the CAA requires the EPA to issue FIPs to
ensure that states eliminate their significant contribution to downwind
air quality problems under the good neighbor provision. See generally
CAA section 110(k) and 110(c). As such, in this proposed rule, the EPA
is proposing requirements to fully address good neighbor obligations
for these states for the 2015 ozone NAAQS under its authority to
promulgate FIPs under CAA section 110(c).
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\7\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
---------------------------------------------------------------------------

It is appropriate to issue this proposal at this time for at least
three reasons. First, this proposal will ensure that necessary
emissions reductions to eliminate significant contribution are achieved
as expeditiously as practicable. The EPA's anticipated timing will
provide for all possible emissions reductions to go into effect

[[Page 20040]]

beginning in the 2023 ozone season, which is aligned with the next
upcoming attainment date of August 3, 2024, for areas classified as
Moderate nonattainment under the 2015 ozone standard. Additional
emissions reductions that the EPA finds not possible to implement by
that attainment date are proposed to take effect as expeditiously as
practicable, with the full suite of emissions reductions taking effect
by the 2026 ozone season, which is aligned with the August 3, 2027,
attainment date for areas classified as Serious nonattainment under the
2015 ozone NAAQS. As explained in sections V.A, VI, and VII.A of this
proposed rule, these proposed timeframes for eliminating significant
contribution are consistent with the provisions of title I of the CAA.
Second, this proposal will provide states with as much information as
the EPA can supply at this time to support their ability to submit SIP
revisions to achieve the emissions reductions the EPA believes
necessary to eliminate significant contribution. Third, for all of the
states included in this proposed rule, the EPA's modeling and analysis
indicate that additional emissions reductions beyond those which are
provided in any state's 2015 ozone transport SIP are necessary to
eliminate significant contribution.
The EPA anticipates that the states covered in this proposed FIP
rulemaking may not have adequate provisions in their SIPs to address
their interstate transport obligations for the 2015 ozone NAAQS. As
discussed in Section IV.B.2 of this proposed rule, the EPA has, for
certain states, made findings that the state failed to submit a
complete good neighbor SIP revision for the 2015 ozone NAAQS. For
certain other states, the EPA has proposed, but has not finalized,
actions disapproving good neighbor SIP revisions. And for other states,
the EPA has not yet proposed action on their good neighbor SIP
submittals, but these submittals are currently under review, and EPA
intends to act on these submittals in the coming months. The EPA will
not finalize this proposed FIP action for any state for which it has
not taken final action either disapproving that state's good neighbor
SIP submittal or finding that the state failed to submit a complete
SIP.
The EPA conducted air quality modeling for future analytic years to
identify (1) the downwind areas that are expected to have trouble
attaining or maintaining the 2015 ozone NAAQS in the future and (2) the
contribution of ozone transport from upwind states to the downwind air
quality problems. Section V of this proposed rule provides a full
description of the results of EPA's air quality modeling and relevant
analyses for the proposed rulemaking. Based on EPA's air quality
analysis, a total of 27 upwind states are linked above the 1 percent of
the NAAQS threshold to downwind air quality problems in other states.
The EPA had previously approved 2015 ozone transport SIPs submitted by
two of these states--Oregon and Delaware--and proposes in this proposed
rule to issue an error correction for its prior approval of Delaware's
2015 ozone transport SIP (see Section IV.C.1 of this notice for
additional information on the proposed error correction). The EPA is
not proposing any change to its prior approval of Oregon's 2015 ozone
transport SIP, a determination which is further described in Section
V.F of this proposed rule.
In this proposed rule, the EPA is proposing to issue FIP
requirements for 26 states, which include emissions reductions for EGU
sources within the borders of 25 states (described in Section VII.B of
this proposed rule) and include emissions reductions for non-EGU
sources within the borders of 23 states (described in Section VII.C in
this proposed rule). Based on EPA's assessment of remaining air quality
issues and additional emissions control strategies, the EPA further
proposes to find that the EGU and non-EGU NO<INF>X</INF> emissions
reductions required in the proposed rule would fully eliminate these
states' significant contributions to downwind air quality problems for
the 2015 ozone NAAQS. By eliminating significant contribution from
these upwind states, this rule, if finalized as proposed, will make
substantial and meaningful improvements in air quality by reducing
ozone levels at the identified downwind receptors as well as many other
areas of the country.
1. Emissions Limitations for EGUs Established by the Proposed Rule
In this proposed rule, the EPA proposes to issue FIP requirements
that include new NO<INF>X</INF> ozone season emissions budgets for EGU
sources within the borders of the 25 states listed in Table I.A-1, with
implementation of these emissions budgets beginning in the 2023 ozone
season. The EPA proposes to find that these emissions reductions are
necessary to address upwind states' interstate transport obligations
for the 2015 ozone NAAQS.

Table I.A-1--Proposed List of 25 Covered States for EGU Emissions
Reductions for the 2015 8-Hour Ozone NAAQS
------------------------------------------------------------------------
State
-------------------------------------------------------------------------
Alabama
Arkansas
Delaware
Illinois
Indiana
Kentucky
Louisiana
Maryland
Michigan
Minnesota
Mississippi
Missouri
Nevada
New Jersey
New York
Ohio
Oklahoma
Pennsylvania
Tennessee
Texas
Utah
Virginia
West Virginia
Wisconsin
Wyoming
------------------------------------------------------------------------

The EPA proposes to expand the CSAPR NO<INF>X</INF> Ozone Season
Group 3 Trading Program beginning in the 2023 ozone season.
Specifically, the FIPs would require power plants within the borders of
the 25 states listed in Table I.A-1 to participate in a revised version
of the CSAPR NO<INF>X</INF> Ozone Season Group 3 Trading Program
created by the Revised CSAPR Update. Affected EGUs within the borders
of twelve states currently participating in the Group 3 Trading Program
under FIPs or SIPs would remain in the program, with revised provisions
beginning in the 2023 ozone season, under this proposed rule: Illinois,
Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York,
Ohio, Pennsylvania, Virginia, and West Virginia. The FIPs would also
require affected EGUs within the borders of eight states currently
covered by the CSAPR NO<INF>X</INF> Ozone Season Group 2 Trading
Program (the ``Group 2 trading program'') under existing FIPs or
existing SIPs to transition from the Group 2 program to the revised
Group 3 trading program beginning with the 2023 control period:
(Alabama, Arkansas, Mississippi, Missouri, Oklahoma, Tennessee, Texas,
and Wisconsin).\8\ Finally, the EPA is

[[Page 20041]]

proposing to issue new FIPs for EGUs within the borders of five states
not currently covered by any CSAPR trading program for seasonal
NO<INF>X</INF> emissions: Delaware, Minnesota, Nevada, Utah, and
Wyoming. If the proposed FIP is finalized, sources in these states
would enter the Group 3 trading program in the 2023 control period
following the effective date of the final rule.\9\ In all cases, if the
state submits and the EPA approves a SIP revision that would fully
achieve the emissions reductions needed to meet the state's good
neighbor obligations with respect to the 2015 ozone NAAQS before a
final rule is promulgated in this rulemaking, the proposed FIP
requirements summarized above would not be finalized. Refer to Section
VII.B of this proposed rule for details on EGU regulatory requirements.
---------------------------------------------------------------------------

\8\ Six of these eight states (Arkansas, Mississippi, Oklahoma,
Tennessee, Texas, and Wisconsin) currently participate in the
federal Group 2 trading program pursuant to the FIPs finalized in
the CSAPR Update, so the FIPs proposed in this rulemaking would
amend the existing FIPs for these states. The other two states
(Alabama and Missouri) have already replaced the FIPs finalized in
the CSAPR Update with approved SIP revisions that require their EGUs
to participate in state Group 2 trading programs integrated with the
federal Group 2 trading program, so the FIPs proposed in this action
would constitute new FIPs for these states, and the EPA would cease
implementation of the state Group 2 trading programs included in the
two states' SIPs.
\9\ Two states, Kansas and Iowa, will remain in the Group 2
Trading Program.
---------------------------------------------------------------------------

2. Emissions Limitations for Non-EGU Stationary Point Sources
Established by the Proposed Rule
In this proposed rule, the EPA proposes to issue FIP requirements
that include new NO<INF>X</INF> emissions limitations for non-Electric
Generating Unit (non-EGU) sources in 23 states, with earliest possible
compliance dates for these emissions limitations beginning in 2026. The
EPA proposes to require emissions reductions from non-EGU sources to
address interstate transport obligations for the 2015 ozone NAAQS for
the 23 states listed in Table I.A-2.

Table I.A-2--Proposed List of 23 Covered States for Non-EGU Emissions
Reductions for the 2015 8-Hour Ozone NAAQS
------------------------------------------------------------------------
State
-------------------------------------------------------------------------
Arkansas
California
Illinois
Indiana
Kentucky
Louisiana
Maryland
Michigan
Minnesota
Mississippi
Missouri
Nevada
New Jersey
New York
Ohio
Oklahoma
Pennsylvania
Texas
Utah
Virginia
West Virginia
Wisconsin
Wyoming
------------------------------------------------------------------------

The EPA is proposing to require emissions limitations for the
following unit types in non-EGU industries: Reciprocating internal
combustion engines in Pipeline Transportation of Natural Gas sources;
kilns in Cement and Cement Product Manufacturing sources; boilers and
furnaces in Iron and Steel Mills and Ferroalloy Manufacturing sources;
furnaces in Glass and Glass Product Manufacturing sources; and high-
emitting equipment and large boilers in Basic Chemical Manufacturing,
Petroleum and Coal Products Manufacturing, and Pulp, Paper, and
Paperboard Mills. Refer to Table III.A-1 for a list of North American
Industry Classification System (NAICS) codes for each entity included
for regulation under this proposed rule.
3. Proposed Error Correction for Previously Approved 2015 Ozone
Transport SIP
The EPA proposes to make an error correction under CAA section
110(k)(6) of its May 1, 2020, approval at 85 FR 25307 of the interstate
transport elements for Delaware's October 11, 2018, and December 26,
2019, ozone infrastructure SIP submissions as satisfying the
requirements of CAA section 110(a)(2)(D)(i)(I) for the 2015 ozone
NAAQS. The EPA proposes to determine that the basis for the prior SIP
approval is invalidated by the Agency's more recent technical
evaluation of air quality modeling performed in support of the proposed
rule,\10\ and that Delaware has unresolved interstate transport
obligations for the 2015 ozone NAAQS. In this proposed rule, the EPA is
also exercising its authority to propose to issue a FIP for Delaware in
light of these unresolved interstate transport obligations.
---------------------------------------------------------------------------

\10\ See the Air Quality Modeling Technical Support Document
(AQM TSD) in the docket for this proposed rule.
---------------------------------------------------------------------------

4. Request for Comment on All Aspects of the Proposal
Throughout this proposed rule, unless noted otherwise, the EPA is
requesting comments on all aspects of the proposal to enable the Agency
to develop a final rule that, consistent with our responsibilities
under section 110 of the CAA, eliminates air pollution that
significantly contributes to nonattainment or interference with
maintenance of the 2015 ozone NAAQS. This proposed rule adheres closely
to the legal and analytical framework that the EPA has applied in the
past in implementing the good neighbor provision of the CAA, as well as
the ample case law reviewing that framework. At the same time, in this
proposal, the EPA is applying lessons learned from the performance of
regulatory programs established by previous ozone transport
rulemakings, as well as updating the Agency's application of the 4-step
interstate transport framework with recent information on the nature of
ozone transport and emissions reductions opportunities in order to
eliminate significant contribution for the more stringent 2015 ozone
NAAQS under the good neighbor provision. The EPA invites comments and
information to support its efforts to improve the regulation of
interstate ozone transport under the good neighbor provision and to
fulfill our mission to protect human health and the environment. The
EPA will carefully consider information provided in response to this
request and will respond to comments submitted through the regulatory
docket in the final rule.

B. Summary of the Major Provisions of the Regulatory Action

The EPA is applying the 4-step interstate transport framework
developed in CSAPR, the CSAPR Update, the Revised CSAPR Update, and
other previous ozone transport rules to propose to further limit
NO<INF>X</INF> emissions from EGU sources within the borders of 25
states during the ozone season (May 1 through September 30) and to
limit ozone season NO<INF>X</INF> emissions from non-EGU sources in 23
states to reduce interstate ozone transport under the authority
provided in CAA section 110(a)(2)(D)(i)(I). The 4-step interstate
transport framework provides a stepwise method for the EPA to propose
rule provisions that are required to address the requirements of the
good neighbor provision for the 2015 ozone NAAQS: (1) Identifying
downwind receptors that are expected to have problems attaining or

[[Page 20042]]

maintaining the NAAQS; (2) determining which upwind states contribute
to these identified problems in amounts sufficient to ``link'' them to
the downwind air quality problems (i.e., in this proposed rule, a
contribution threshold of 1 percent of the NAAQS); (3) for states
linked to downwind air quality problems, identifying upwind emissions
that significantly contribute to downwind nonattainment or interfere
with downwind maintenance of the NAAQS; and (4) for states that are
found to have emissions that significantly contribute to nonattainment
or interfere with maintenance of the NAAQS in downwind areas,
implementing the necessary emissions reductions through enforceable
measures. In this proposed rule, the EPA applies the 4-step framework
to evaluate upwind states' obligations to reduce interstate transport
of ozone precursor emissions for the 2015 ozone NAAQS. The remainder of
this section provides a general overview of the EPA's application of
the 4-step framework as it applies to major provisions of the proposed
rule; additional details regarding EPA's proposed rule approach are
found in Section IV of this proposed rule.
In order to apply the first step of the 4-step framework to the
2015 ozone NAAQS, the EPA performed air quality modeling to project
ozone concentrations at air quality monitoring sites in 2023, 2026, and
2032.\11\ The EPA evaluated projected ozone concentrations for the 2023
analytic year at individual monitoring sites and considered current
ozone monitoring data at these sites to identify receptors that are
anticipated to have problems attaining or maintaining the 2015 ozone
NAAQS. This analysis was then repeated using projected ozone
concentrations for 2026 and 2032.
---------------------------------------------------------------------------

\11\ These 3 analytic years are the last full ozone seasons
before, and thus align with, upcoming attainment dates for the 2015
ozone NAAQS: August 3, 2024, for areas classified as Moderate
nonattainment, August 3, 2027, for areas classified as Serious
nonattainment, and August 3, 2033, for areas classified as Severe.
See 83 FR 25776.
---------------------------------------------------------------------------

To apply the second step of the framework, the EPA used air quality
modeling to quantify the contributions from upwind states to ozone
concentrations in 2023 and 2026 at downwind receptors.\12\ Once
quantified, EPA then evaluated these contributions relative to a
screening threshold of 1 percent of the NAAQS (i.e., 0.70 ppb).\13\
States with contributions that equaled or exceeded 1 percent of the
NAAQS were identified as warranting further analysis at Step 3 of the
four-step framework to determine if the upwind state significantly
contributes to nonattainment or interference with maintenance in a
downwind state. States with contributions below 1 percent of the NAAQS
were considered not to significantly contribute to nonattainment or
interfere with maintenance of the NAAQS in downwind states. Based on
EPA's most recent air quality modeling and contribution analysis using
2023 as the analytic year, the EPA proposes to find that the following
27 states have contributions that equal or exceed 1 percent of the 2015
ozone NAAQS, and, thereby, warrant further analysis of significant
contribution to nonattainment or interference with maintenance of the
NAAQS: Alabama, Arkansas, California, Delaware, Illinois, Indiana,
Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi,
Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Oregon,
Pennsylvania, Tennessee, Texas, Utah, Virginia, West Virginia,
Wisconsin, and Wyoming. Further evaluation of the locations in
California to which Oregon was linked at Step 2 leads the EPA to
conclude downwind areas represented by these monitoring sites should
not be considered interstate ozone transport receptors. Therefore, the
EPA is not proposing any further emissions reductions from the state of
Oregon because there is no significant contribution required to be
eliminated under the interstate transport provision, as described in
Section V.F of this proposed rule.
---------------------------------------------------------------------------

\12\ The EPA did not perform contribution modeling for 2032
since contribution data for this year were not needed to identify
upwind states to be analyzed in Step 3.
\13\ See Section V of this proposed rule for explanation of
EPA's use of the 1 percent of the NAAQS threshold in the Step 2
analysis.
---------------------------------------------------------------------------

Based on the air quality analysis presented in Section V of this
proposed rule, the EPA proposes to find that in the absence of
additional emissions reductions in those states the majority of the
states that the EPA is proposing to participate in the Ozone Season
Group 3 Trading Program will continue to contribute above the 1 percent
of the NAAQS threshold to at least one receptor whose nonattainment and
maintenance concerns persist through the 2026 ozone season, with the
exception of Alabama, Delaware, and Tennessee. As a result, EPA's
evaluation of emissions reduction potential at Step 3 for Alabama,
Delaware, and Tennessee is limited to emission reductions achievable by
the 2023 ozone season. For each of these three states, EPA's analysis
does not consider, nor does the EPA propose to require, emissions
reductions at either EGUs or non-EGUs that cannot be implemented until
the 2026 ozone season.
At the third step of the 4-step framework, EPA applied a multi-
factor test that incorporates cost, availability of emissions
reductions, and air quality impacts at the downwind receptors to
determine the amount of ozone precursor emissions from the linked
upwind states that ``significantly'' contribute to downwind
nonattainment or maintenance receptors. In this proposed rule, the EPA
proposes to apply the multifactor test described in Section VI.A of
this proposed rule to both EGU and non-EGU sources. The EPA assessed
the potential emissions reductions in 2023 and 2026, as well as in
intervening and later years to determine the emissions reductions
required to eliminate significant contribution in any future year where
downwind areas are projected to have potential problems attaining or
maintaining the 2015 ozone NAAQS.
For EGU sources, the EPA evaluated the following set of widely-
available NO<INF>X</INF> emissions control technologies: (1) Fully
operating existing selective catalytic reduction (SCR) controls,
including both optimizing NO<INF>X</INF> removal by existing
operational SCRs and turning on and optimizing existing idled SCRs; (2)
installing state-of-the-art NO<INF>X</INF> combustion controls; (3)
fully operating existing selective non-catalytic reduction (SNCR)
controls, including both optimizing NO<INF>X</INF> removal by existing
operational SNCRs and turning on and optimizing existing idled SNCRs;
(4) installing new SNCRs; (5) installing new SCRs; and (6) generation
shifting. For the reasons explained in Section VI of this proposed rule
and supported by the EGU NO<INF>X</INF> Mitigation Strategies Proposed
Rule Technical Support Document (TSD) included in the docket for this
proposed rule, the EPA determined that for the regional, multi-state
scale of this rulemaking, only fully operating and optimizing existing
SCRs and existing SNCRs (EGU NO<INF>X</INF> emissions controls options
1 and 3 in the list earlier) are possible for the 2023 ozone season.
The EPA determined that state-of-the-art NO<INF>X</INF> combustion
controls at EGUs (emissions control option 2 in the list above) are
available by the beginning of the 2024 ozone season. Based on EPA's
assessment of the earliest possible timeframe for installation of new
SNCR and SCRs (EGU emissions controls options 4 and 5 in the list), the
EPA proposes to require emissions reductions commensurate with these
controls by the beginning of the 2026 ozone season. See Section VI.B.1
of this proposed rule for a full description of

[[Page 20043]]

EPA's analysis of NO<INF>X</INF> emissions mitigation strategies for
EGU sources.
The EPA proposes control stringency levels that maximize
incremental NO<INF>X</INF> emissions reduction potential from EGUs and
corresponding downwind ozone air quality improvements to the extent
feasible in each year analyzed. The EPA believes that the required
controls provide cost-effective reductions of NO<INF>X</INF> emissions
that will provide substantial improvements in downwind ozone air
quality to address interstate transport obligations for the 2015 ozone
NAAQS in a timely manner. These controls represent greater stringency
in upwind EGU controls than in EPA's most recent ozone transport
rulemakings, such as the CSAPR Update and the Revised CSAPR Update.
However, programs to address interstate ozone transport based on the
retrofit of post-combustion controls are by no means unprecedented. In
prior ozone transport rulemakings such as the NO<INF>X</INF> SIP Call
and the Clean Air Interstate Rule (CAIR), the EPA established EGU
budgets premised on the widespread availability of retrofitting EGUs
with post-combustion emissions controls such as SCR.\14\ While these
programs successfully drove many EGUs to retrofit post-combustion
controls, other EGUs throughout the present geography of linked upwind
states continue to operate without such controls and continue to emit
at relatively high rates more than 20 years after similar units reduced
these emissions under prior interstate ozone transport rulemakings.
---------------------------------------------------------------------------

\14\ See, e.g., 70 FR 25162, 25205-06 (May 12, 2005).
---------------------------------------------------------------------------

Furthermore, the CSAPR Update provided only a partial remedy for
eliminating significant contribution for the 2008 ozone NAAQS, as
needed to obtain available reductions by the 2017 ozone season. In that
rule, the EPA made no determination regarding the appropriateness of
more stringent EGU NO<INF>X</INF> controls that would be required for a
full remedy for interstate transport for the 2008 ozone NAAQS.
Following the remand of the CSAPR Update in Wisconsin v. EPA, 938 F.3d
303 (D.C. Cir. 2019) (Wisconsin), the EPA again declined to require the
retrofit of new post-combustion controls on EGUs in the Revised CSAPR
Update, but that determination was based on a specific timing
consideration: Downwind air quality problems under the 2008 ozone NAAQS
were projected to resolve before post-combustion control retrofits
could be accomplished on a fleetwide, regional scale. See 86 FR 23054,
23110 (April 30, 2021).
In this proposed rulemaking, the EPA is addressing good neighbor
obligations for the more stringent 2015 ozone NAAQS, and the Agency
observes ongoing and persistent contribution from upwind states to
ozone nonattainment and maintenance receptors in other states under
that NAAQS. As further discussed in Section VI of this proposed rule,
the nature of this contribution warrants a greater degree of control
stringency than the EPA determined to be necessary to eliminate
significant contribution of ozone transport in prior CSAPR rulemakings.
The EPA is therefore returning to EGU NO<INF>X</INF> control strategies
commensurate with those determined to be necessary in the
NO<INF>X</INF> SIP Call and CAIR.
Based on the Step 3 analysis described in Section VI of this
proposed rule, the EPA is proposing that emissions reductions
commensurate with the full operation of all existing post-combustion
controls (both SCRs and SNCRs) and state-of-the-art combustion control
upgrades constitute the Agency's selected control stringency for EGUs
within the borders of 25 states linked to downwind nonattainment or
maintenance in 2023 (Alabama, Arkansas, Delaware, Illinois, Indiana,
Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi,
Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania,
Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and
Wyoming). For 22 of those states that are also linked in 2026
(Arkansas, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio,
Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia,
Wisconsin, and Wyoming), the EPA is determining that the selected EGU
control stringency also includes emissions reductions commensurate with
the retrofit of SCR at coal steam units of 100 MW or greater capacity
(excepting circulating fluidized bed units (CFB)), new SNCR on coal
steam units of less than 100 MW capacity and CFBs, and SCR on oil/gas
steam units greater than 100 MW that have historically emitted at least
150 tons of NO<INF>X</INF> per ozone season.
To identify appropriate control strategies for non-EGU sources to
achieve NO<INF>X</INF> emissions reductions that would result in
meaningful air quality improvements in downwind areas, the EPA
developed an analytical framework to evaluate the air quality impacts
of potential emissions reductions from non-EGU sources located in the
linked upwind states. The EPA incorporated air quality modeling
information, annual emissions, and information about potential controls
to determine which industries, if subject to further control
requirements, would have the greatest impact in providing air quality
improvements at the downwind receptors. This evaluation was subject to
a marginal cost threshold of up to $7,500 per ton, which the EPA
determined based on information available to the Agency about existing
control device efficiency and cost information. Additional information
on the analytical framework is described in Section VI.B.2 of this
proposed rule and is presented in the memorandum titled Screening
Assessment of Potential Emissions Reductions, Air Quality Impacts, and
Costs from Non-EGU Emissions Units for 2026 (``Non-EGU Screening
Assessment memorandum''), which is available in the docket for this
proposed rulemaking. Based on the results of this assessment, the EPA
identified emissions unit types in seven industries (identified in
Section I.A.2 of this proposed rule) that provide opportunities for
NO<INF>X</INF> emissions reductions that result in meaningful impacts
on air quality at the downwind receptors.
The EPA performed air quality analysis using the Ozone Air Quality
Assessment Tool (AQAT) to determine whether the proposed emissions
reductions for both EGUs and non-EGUs potentially create an ``over-
control'' scenario whereby (1) the expected ozone improvements would be
greater than necessary to resolve the downwind ozone pollution problem
(i.e., beyond what is necessary to resolve all nonattainment and
maintenance problems to which an upwind state is linked) or (2) the
expected ozone improvements would reduce the upwind state's ozone
contributions below the screening threshold (i.e., 1 percent of the
NAAQS or 0.70 ppb). The EPA's over-control analysis, discussed in
Section VI.D.4 of this proposed rule, shows that the proposed control
stringencies for EGU and non-EGU sources do not over-control upwind
states' emissions either with respect to the downwind air quality
problems to which they are linked or with respect to the 1 percent of
the NAAQS contribution threshold, such that over-control would trigger
re-evaluation at Step 3 for any linked upwind state.

[[Page 20044]]

Based on the multi-factor test applied to both EGU and non-EGU
sources and our subsequent assessment of over-control, the EPA finds
that the selected EGU and non-EGU control stringencies constitute the
elimination of significant contribution and interference with
maintenance, without over-controlling emissions, from the 26 upwind
states subject to EGU and non-EGU emissions reductions requirements
under the proposed rule. In order to eliminate significant contribution
and interference with maintenance through the fourth step of the 4-step
framework, as described in Section VII of this proposed rule, the EPA
is establishing emissions budgets for EGUs within the borders of 25
states that reflect the remaining allowable emissions after the
emissions reductions associated with the selected control stringency
have been achieved. For the same reason, the EPA is establishing non-
EGU emissions limits in 23 states that result in the elimination of
significant contribution from non-EGU sources in these states. For
additional details about the test and the over-control analysis, see
the document titled, ``Ozone Transport Policy Analysis Proposed Rule
TSD'' included in the docket for this rulemaking.
In this fourth step of the 4-step framework, the EPA proposes to
include enforceable measures in the promulgated FIPs to achieve the
required emissions reductions in each of the 26 states. Specifically,
the FIPs would require covered power plants within the borders of the
25 states listed in Table I.A-1 to participate in the CSAPR
NO<INF>X</INF> Ozone Season Group 3 Trading Program created by the
Revised CSAPR Update. Affected EGUs within the borders of twelve states
currently participating in the Group 3 Trading Program would remain in
the program, with revised provisions beginning in the 2023 ozone
season, under this proposed rule: Illinois, Indiana, Kentucky,
Louisiana, Maryland, Michigan, New Jersey, New York, Ohio,
Pennsylvania, Virginia, and West Virginia. Affected EGUs within the
borders of eight states currently covered by the CSAPR NO<INF>X</INF>
Ozone Season Group 2 Trading Program (the ``Group 2 trading
program'')--Alabama, Arkansas, Mississippi, Missouri, Oklahoma,
Tennessee, Texas, and Wisconsin--would transition from the Group 2
program to the revised Group 3 trading program beginning with the 2023
control period,\15\ and affected EGUs within the borders of five states
not currently covered by any CSAPR trading program for seasonal
NO<INF>X</INF> emissions--Delaware, Minnesota, Nevada, Utah, and
Wyoming--would enter the Group 3 trading program in the 2023 control
period following the effective date of the final rule. In addition, the
EPA proposes to revise other aspects of the Group 3 trading program to
help maintain control stringency over time and improve emissions
performance at individual units, offering a necessary measure of
assurance that existing pollution controls will be operated during the
ozone season, as described in Section VII of this proposed rule. This
proposal does not revise the budget stringency and geography of the
existing CSAPR NO<INF>X</INF> Ozone Season Group 1 trading program.
Aside from the eight states moving from the Group 2 trading program to
the Group 3 trading program under the proposed rule, this proposal
otherwise leaves unchanged the budget stringency of the existing CSAPR
NO<INF>X</INF> Ozone Season Group 2 trading program.
---------------------------------------------------------------------------

\15\ The EPA would deem participation in the Group 3 trading
program by the EGUs in these eight states as also addressing the
respective states' good neighbor obligations with respect to the
2008 ozone NAAQS (for all eight states), the 1997 ozone NAAQS (for
all the states except Texas), and the 1979 ozone NAAQS (for Alabama,
Missouri, and Tennessee) to the same extent that those obligations
are currently being addressed by participation of the states' EGUs
in the Group 2 trading program.
---------------------------------------------------------------------------

The EPA is proposing preset ozone season NO<INF>X</INF> emissions
budgets for the 2023 and 2024 ozone seasons, as explained in Section
VII.B of this proposed rule and as shown in Table I.B-1.

Table I.B-1--Proposed and Illustrative CSAPR NOX Ozone Season Group 3 State Emissions Budgets for 2023 Through
2026 Control Periods *
----------------------------------------------------------------------------------------------------------------
Proposed Proposed Illustrative Illustrative
emissions emissions emissions emissions
State budgets for budgets for budgets for budgets for
2023 control 2024 control 2025 control 2026 control
period (tons) period (tons) period (tons) period (tons)
----------------------------------------------------------------------------------------------------------------
Alabama......................................... 6,364 6,306 6,306 6,306
Arkansas........................................ 8,889 8,889 8,889 3,923
Delaware........................................ 384 434 434 434
Illinois........................................ 7,364 7,463 7,463 6,115
Indiana......................................... 11,151 9,391 8,714 7,791
Kentucky........................................ 11,640 11,640 11,134 7,573
Louisiana....................................... 9,312 9,312 9,179 3,752
Maryland........................................ 1,187 1,187 1,187 1,189
Michigan........................................ 10,718 10,718 10,759 6,114
Minnesota....................................... 3,921 3,921 3,910 2,536
Mississippi..................................... 5,024 4,400 4,400 1,914
Missouri........................................ 11,857 11,857 10,456 7,246
Nevada.......................................... 2,280 2,372 2,372 1,211
New Jersey...................................... 799 799 799 799
New York........................................ 3,763 3,763 3,763 3,238
Ohio............................................ 8,369 8,369 8,369 8,586
Oklahoma........................................ 10,265 9,573 9,393 4,275
Pennsylvania.................................... 8,855 8,855 8,855 6,819
Tennessee....................................... 4,234 4,234 4,008 4,008
Texas........................................... 38,284 38,284 36,619 21,946
Utah............................................ 14,981 15,146 15,146 2,620
Virginia........................................ 3,090 2,814 2,948 2,567
West Virginia................................... 12,478 12,478 12,478 10,597
Wisconsin....................................... 5,963 5,057 4,198 3,473

[[Page 20045]]

Wyoming......................................... 9,125 8,573 8,573 4,490
----------------------------------------------------------------------------------------------------------------
* Further information on the state-level emissions budget calculations pertaining to Table I.B-1 is provided in
Section VII.B.4 of this proposed rule as well as the Ozone Transport Policy Analysis Proposed Rule TSD.
Further information on the proposed approach for allocating a portion of Utah's emissions budget for each
control period to the existing EGU in the Uintah and Ouray Reservation within Utah's borders is provided in
Section VII.B.9 of this proposed rule.

Beyond preset emissions budgets for the 2023 and 2024 control
periods, the EPA also proposes to extend the Group 3 trading program
budget-setting methodology used in the Revised CSAPR Update so as to
routinely set emissions budgets for each future control period
(beginning in 2025) in the year before that control period, with each
emissions budget reflecting the latest available information on the
composition and utilization of the EGU fleet at the time that emissions
budget is determined (see Table VII.B.4.c-2 for illustrative examples
of dynamic budget calculations that the EPA will publish in advance of
each ozone season, effective for the 2025 control period and beyond).
The stringency of the dynamic emissions budgets would simply reflect
the stringency of the emissions control strategies selected in the
rulemaking more consistently over time and ensure that the annual
updates would eliminate emissions determined to be unlawful under the
good neighbor provision. See Section VII.B of this proposed rule for
additional discussion of EPA's proposed method for adjusting emissions
budgets to ensure elimination of significant contribution from EGU
sources in the linked upwind states.
As an enhancement to the structure of the trading program as
originally promulgated in the Revised CSAPR Update, the EPA is also
proposing to establish backstop daily emissions rates for coal steam
units greater than or equal to 100 MW in covered states. Units emitting
in excess of these daily rates would be subject to increased allowance
surrender requirements under the trading program. The backstop daily
emissions rates would work in tandem with the ozone season emissions
budgets to offer downwind stakeholders a necessary measure of assurance
that they will be protected on a daily basis during the ozone season by
continuous operation of installed pollution controls. The EPA's
experience with the CSAPR trading programs has revealed instances where
EGUs have reduced their SCRs' performance on a given day, or across the
entire ozone seasons in some cases, including high ozone days.\16\ In
addition to maintaining a mass-based seasonal requirement, the EPA
proposes to require controls while maintaining as much compliance
flexibility as possible through a unit-level emission rate designed to
ensure that controls operate continuously and that required reductions
occur on the highest ozone days. These trading program improvements
also promote consistent emissions control performance across the power
sector, which protects communities living in downwind ozone
nonattainment areas from exceedances of the NAAQS that might otherwise
occur.
---------------------------------------------------------------------------

\16\ See 86 FR 23090. The EPA highlighted the Miami Fort Unit 7
(possessing a SCR) more than tripled its ozone-season NO<INF>X</INF>
emission rate between 2017 and 2019.
---------------------------------------------------------------------------

The EPA proposes to include enforceable emissions standards that
will apply during the ozone season (annually from May to September) for
seven non-EGU industries in the promulgated FIPs to achieve the
required emissions reductions in 23 states with remaining interstate
transport obligations for the 2015 ozone NAAQS in 2026: Arkansas,
California, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio,
Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia,
Wisconsin, and Wyoming. These requirements would apply to all existing
emissions units and to any future emissions units constructed in the
covered states after promulgation of the final rule. Thus, the
emissions limits for non-EGU sources and associated compliance
requirements would apply in all 23 states listed in this paragraph,
even if certain of these states do not currently have existing
emissions units within a particular industry.
Based on our evaluation of the time required to install controls at
the types of non-EGU sources covered by this proposed rule, the EPA has
identified the 2026 ozone season as the earliest compliance date
possible for non-EGU emissions reductions. The EPA is therefore
proposing to include non-EGU emissions reductions beginning in 2026.
For sources located in the 23 states listed in the previous paragraph,
The EPA proposes to require the emissions limits listed in Table I.B-2
for

[[Page 20046]]

reciprocating internal combustion engines in Pipeline Transportation of
Natural Gas; the emissions limits listed in Table I.B-3 for kilns in
Cement and Cement Product Manufacturing; the emissions limits listed in
Table I.B-4 for boilers and furnaces in Iron and Steel Mills and
Ferroalloy Manufacturing; the emissions limits listed in Table I.B-5
for furnaces in Glass and Glass Product Manufacturing; and the
emissions limits listed in Table I.B-6 for high-emitting equipment and
large boilers in Basic Chemical Manufacturing, Petroleum and Coal
Products Manufacturing, and Pulp, Paper, and Paperboard Mills.
---------------------------------------------------------------------------

\17\ Based on source cap equation at 30 TAC Sec. 117.3123(b);
January 14, 2009 (74 FR 1927), Docket ID No. EPA-R06-OAR-2007-1147,
also see <a href="https://wayback.archive-it.org/414/20210527223433/https://www.tceq.texas.gov/assets/public/legal/rules/rules/pdflib/117e.pdf">https://wayback.archive-it.org/414/20210527223433/https://www.tceq.texas.gov/assets/public/legal/rules/rules/pdflib/117e.pdf</a>.

Table I.B-2--Summary of Proposed NOX Emissions Limits for Pipeline
Transportation of Natural Gas
------------------------------------------------------------------------
Proposed NOX emissions limit
Engine type and fuel
------------------------------------------------------------------------
Natural Gas Fired Four Stroke Rich Burn. 1.0 g/hp-hr.
Natural Gas Fired Four Stroke Lean Burn. 1.5 g/hp-hr.
Natural Gas Fired Two Stroke Lean Burn.. 3.0 g/hp-hr.
------------------------------------------------------------------------

Table I.B-3--Summary of Proposed NOX Emissions Limits for Kiln Types in
Cement and Concrete Product Manufacturing
------------------------------------------------------------------------
Proposed NOX
emissions
Kiln type limit (lb/ton
of clinker)

------------------------------------------------------------------------
Long Wet................................................ 4.0
Long Dry................................................ 3.0
Preheater............................................... 3.8
Precalciner............................................. 2.3
Preheater/Precalciner................................... 2.8
------------------------------------------------------------------------

The EPA is also proposing a source cap limit expressed in ton per
day (tpd) of NO<INF>X</INF> for each individual cement plant according
to the following equation.\17\
[GRAPHIC] [TIFF OMITTED] TP06AP22.000

Where:

CAP2015 Ozone Transport = total allowable NO<INF>X</INF> emissions
from all cement kilns located at one cement plant, in tons per day,
on a 30-operating day rolling average basis;
KD = 1.7 pounds NO<INF>X</INF> per ton of clinker for dry preheater-
precalciner or precalciner kilns;
KW = 3.4 pounds NO<INF>X</INF> per ton of clinker for long wet
kilns;
ND = the average annual production in tons of clinker plus one
standard deviation for the three most recent calendar years from all
dry preheater-precalciner or precalciner kilns located at one cement
plant; and
NW = the average annual production in tons of clinker plus one
standard deviation for the 3 most recent calendar years from all
long wet kilns located at one cement plant.

An affected cement plant will need to comply with both the source
cap limit and the specific NO<INF>X</INF> emissions limits assigned to
its individual kiln type(s). Refer to Section VII.C.2 of this proposed
rule for additional information concerning the application of the
source cap limit to this industry source group.

Table I.B-4--Summary of Proposed NOX Emissions Limits for Iron and Steel
and Ferroalloy Emissions Units
------------------------------------------------------------------------
Proposed NOX emissions standard
Emissions unit or requirement (lbs/hour or lb/
mmBtu)
------------------------------------------------------------------------
Blast Furnace.......................... 0.03 lb/mmBtu.
Basic Oxygen Furnace................... 0.07 lb/ton.
Electric Arc Furnace................... 0.15 lb/ton steel.
Ladle/tundish Preheaters............... 0.06 lb/mmBtu.
Reheat furnace......................... 0.05 lb/mmBtu.
Annealing Furnace...................... 0.06 lb/mmBtu.
Vacuum Degasser........................ 0.03 lb/mmBtu.
Ladle Metallurgy Furnace............... 0.1 lb/ton.
Taconite production kilns.............. Work practice standard to
install low NOX technology/
burners, test and set.
Coke ovens (charging and coking)....... 0.6 lb/ton of coal charged.
Coke ovens (pushing)................... 0.015 lb/ton of coal pushed.
Boilers--Coal.......................... 0.20 lb/mmBtu.
Boilers--Residual oil.................. 0.20 lb/mmBtu.
Boilers--Distillate oil................ 0.12 lb/mmBtu.
Boilers--Natural gas................... 0.08 lb/mmBtu.
------------------------------------------------------------------------

[[Page 20047]]

Table IV.B-5--Summary of Proposed NOX Emissions Limits for Furnace Unit
Types in Glass and Glass Product Manufacturing
------------------------------------------------------------------------
Proposed NOX
emissions limit
Furnace type (lb/ton of glass
produced)
------------------------------------------------------------------------
Container Glass Manufacturing Furnace............... 4.0
Pressed/Blown Glass Manufacturing Furnace or 4.0
Fiberglass Manufacturing Furnace...................
Flat Glass Manufacturing Furnace.................... 9.2
------------------------------------------------------------------------

Table I.B-6--Summary of Proposed NOX Emissions Limits for High-Emitting
Equipment and Large Boilers in Basic Chemical Manufacturing, Petroleum
and Coal Products Manufacturing, and Pulp, Paper, and Paperboard Mills
------------------------------------------------------------------------
Emissions
Unit type limit (lbs NOX/
mmBtu)
------------------------------------------------------------------------
Coal.................................................... 0.20
Residual oil............................................ 0.20
Distillate oil.......................................... 0.12
Natural gas............................................. 0.08
------------------------------------------------------------------------

Refer to Section VII.C of this proposed rule for applicability
criteria, compliance assurance requirements, and the EPA's rationale in
proposing these emissions limits for each of the non-EGU industries
covered by the proposed rule. In addition, the EPA requests comment on
several topics regarding the implementation of emissions limits for
non-EGU sources that are proposed in this rulemaking, including
controls on emissions units and control installation timing. See
Section VI.D.2.a of this proposed rule for a list of detailed questions
on which the Agency is soliciting public comment.
The remainder of this preamble is organized as follows: Section III
of this proposed rule outlines general applicability criteria for the
proposed rule and describes the EPA's legal authority for this proposed
rule, the relationship of the proposed rule to previous interstate
ozone transport rulemakings, and the incremental costs and benefits of
the proposed rule; Section IV of this proposed rule describes the human
health and environmental challenges posed by interstate transport
contributions to ozone air quality problems, as well as EPA's overall
approach for addressing interstate transport for the 2015 ozone NAAQS
in this proposed rule; Section V of this proposed rule describes the
Agency's analyses of air quality data to inform this proposed
rulemaking, including descriptions of the air quality modeling platform
and emissions inventories used in the proposed rule, as well as EPA's
methods for identifying downwind air quality problems and upwind
states' ozone transport contributions to downwind states; Section VI of
this proposed rule describes EPA's approach to quantifying upwind
states' obligations in the form of EGU NO<INF>X</INF> control
stringencies and non-EGU emissions limits; Section VII of this proposed
rule describes key elements of the implementation schedule for EGU and
non-EGU emissions reductions requirements, including details regarding
the revised aspects of the CSAPR NO<INF>X</INF> Group 3 trading program
and compliance deadlines, as well as regulatory requirements and
compliance deadlines for non-EGU sources; Section VIII of this proposed
rule discusses the environmental justice considerations of the proposed
rule; Section IX of this proposed rule describes the expected costs,
benefits, and other impacts of this proposed rule; Section X of this
proposed rule provides a summary of proposed changes to the existing
regulatory text; and Section XI of this proposed rule discusses the
statutory and executive orders affecting this proposed rulemaking.

C. Costs and Benefits

A summary of the key results of the cost-benefit analysis that was
prepared for this proposed rule is presented in Table I.C-1. Table I.C-
1 presents estimates of the present values (PV) and equivalent
annualized values (EAV), calculated using discount rates of 3 and 7
percent as directed by OMB's Circular A-4, of the health benefits,
compliance costs, and net benefits of the proposed rule, in 2016
dollars, discounted to 2022. The estimated monetized net benefits are
the estimated monetized benefits minus the estimated monetized costs of
the proposed rule. These results present an incomplete overview of the
effects of the proposal, because important categories of benefits--
including benefits from reducing climate pollution, other types of air
pollutants, and water pollution--were not monetized and are therefore
not reflected in the cost-benefit tables. We anticipate that taking
non-monetized effects into account would show the proposal to be more
net beneficial than this table reflects.

Table I.C-1--Estimated Monetized Benefits, Compliance Costs, and Net
Benefits of the Proposed Rule, 2023 Through 2042
[Millions 2016$, discounted to 2022] a
------------------------------------------------------------------------
3% Discount rate 7% Discount rate
------------------------------------------------------------------------
Present Value:
Benefits \b\................ 250,000 150,000
Compliance Costs \c\........ 22,000 14,000
---------------------------------------
Net Benefits............ 220,000 130,000
------------------------------------------------------------------------
Equivalent Annualized Value:
Benefits.................... 17,000 14,000
Compliance Costs............ 1,500 1,300
---------------------------------------

[[Page 20048]]

Net Benefits...... 15,000 12,000
------------------------------------------------------------------------
\a\ Rows may not appear to add correctly due to rounding.
\b\ The annualized present value of costs and benefits are calculated
over a 20-year period from 2023 to 2042. Monetized benefits include
those related to public health associated with reductions in PM2.5 and
ozone concentrations. The health benefits are associated with several
point estimates and are presented at real discount rates of 3 and 7
percent. Several categories of benefits remain unmonetized and are
thus not reflected in the table. Non-monetized benefits include
important climate benefits from reductions in CO2 emissions. The U.S.
District Court for the Western District of Louisiana has issued an
injunction concerning the monetization of the benefits of greenhouse
gas emission reductions by EPA and other defendants. See Louisiana v.
Biden, No. 21-cv-01074-JDC-KK (W.D. La. Feb. 11, 2022). Therefore,
such values are not presented in the benefit-cost analysis of this
proposal conducted pursuant to E.O. 12866. Please see Chapter 5,
Section 5.2 of the RIA for more discussion. In addition, there are
important unquantified water quality benefits and benefits associated
with reductions in other air pollutants.
\c\ The costs presented in this table are consistent with the costs
presented in Chapter 4 of the RIA. To estimate these annualized costs,
EPA uses a conventional and widely accepted approach that applies a
capital recovery factor (CRF) multiplier to capital investments and
adds that to the annual incremental operating expenses. Costs were
calculated using a 3.76% real discount rate consistent with the rate
used in IPM's objective function for cost-minimization.

As shown in Table I.C-1, the PV of the benefits, associated with
reductions in PM<INF>2.5</INF> and ozone concentrations, of this
proposed rule, discounted at a 3-percent discount rate, is estimated to
be about $250,000 million, with an EAV of about $17,000 million. At a
7-percent discount rate, the PV of the benefits is estimated to be
$150,000 million, with an EAV of about $14,000 million. The PV of the
compliance costs, discounted at a 3-percent rate, is estimated to be
about $22,000 million, with an EAV of about $1,500 million. At a 7-
percent discount rate, the PV of the compliance costs is estimated to
be about $14,000 million, with an EAV of about $1,300 million.

II. Public Participation

A. Written Comments

Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2021-
0668 at <a href="https://www.regulations.gov">https://www.regulations.gov</a> (our preferred method), or the
other methods identified in the ADDRESSES section. Once submitted,
comments cannot be edited or removed from the docket. The EPA may
publish any comment received to its public docket. Do not submit to
EPA's docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a> any information you
consider to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute. Multimedia
submissions (audio, video, etc.) must be accompanied by a written
comment. The written comment is considered the official comment and
should include discussion of all points you wish to make. The EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit <a href="https://www.epa.gov/dockets/commenting-epa-dockets">https://www.epa.gov/dockets/commenting-epa-dockets</a>.
Due to public health concerns related to COVID-19, the EPA Docket
Center and Reading Room are open to the public by appointment only. Our
Docket Center staff also continues to provide remote customer service
via email, phone, and webform. Hand deliveries or couriers will be
received by scheduled appointment only. For further information and
updates on EPA Docket Center services, please visit us online at
<a href="https://www.epa.gov/dockets">https://www.epa.gov/dockets</a>.
The EPA continues to carefully and continuously monitor information
from the Centers for Disease Control and Prevention (CDC), local area
health departments, and our Federal partners so that we can respond
rapidly as conditions change regarding COVID-19.

B. Submitting Confidential Business Information

Do not submit information containing CBI to the EPA through <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Clearly mark the part or all of the information
that you claim to be CBI. For CBI information on any digital storage
media that you mail to the EPA, mark the outside of the digital storage
media as CBI and then identify electronically within the digital
storage media the specific information that is claimed as CBI. In
addition to one complete version of the comments that includes
information claimed as CBI, you must submit a copy of the comments that
does not contain the information claimed as CBI directly to the public
docket through the procedures outlined in Instructions earlier. If you
submit any digital storage media that does not contain CBI, mark the
outside of the digital storage media clearly that it does not contain
CBI. Information not marked as CBI will be included in the public
docket and the EPA's electronic public docket without prior notice.
Information marked as CBI will not be disclosed except in accordance
with procedures set forth in 40 Code of Federal Regulations (CFR) part
2. Our preferred method to receive CBI is for it to be transmitted to
electronically using email attachments, File Transfer Protocol (FTP),
or other online file sharing services (e.g., Dropbox, OneDrive, Google
Drive). Electronic submissions must be transmitted directly to the
OAQPS CBI Office using the email address, <a href="/cdn-cgi/l/email-protection#76191707060515141f3613061758111900">[email&#160;protected]</a>, and should
include clear CBI markings as described above. If assistance is needed
with submitting large electronic files that exceed the file size limit
for email attachments, and if you do not have your own file sharing
service, please email <a href="/cdn-cgi/l/email-protection#3f505e4e4f4c5c5d567f5a4f5e11585049">[email&#160;protected]</a> to request a file transfer link.
If sending CBI information through the postal service, please send it
to the following address: OAQPS Document Control Officer (C404-02),
OAQPS, U.S. Environmental Protection Agency, Research Triangle Park,
North Carolina 27711, Attention Docket ID No. EPA-HQ-OAR-2021-0668. The
mailed CBI material should be double wrapped and clearly marked. Any
CBI markings should not show through the outer envelope.

C. Participation in Virtual Public Hearing

Please note that because of current CDC recommendations, as well as
state and local orders for social distancing to limit the spread of
COVID-19, the EPA cannot hold in-person public meetings at this time.
The EPA will begin pre-registering speakers for the hearing no
later than 1 business day after publication of this document in the
Federal Register. To

[[Page 20049]]

register to speak at the virtual hearing, please use the online
registration form available at <a href="https://www.epa.gov/csapr/csapr-2015-ozone-naaqs">https://www.epa.gov/csapr/csapr-2015-ozone-naaqs</a>. The last day to pre-register to speak at the hearing will
be April 21, 2022. The EPA will post a general agenda for the hearing
that will list pre-registered speakers in approximate order at: <a href="https://www.epa.gov/csapr/csapr-2015-ozone-naaqs">https://www.epa.gov/csapr/csapr-2015-ozone-naaqs</a>.
The virtual public hearing will be held on via teleconference on
April 21, 2022. The virtual public hearing will convene at 10:00 a.m.
Eastern Time (ET) and will conclude at 7:00 p.m. ET. The EPA may close
a session 15 minutes after the last pre-registered speaker has
testified if there are no additional speakers. For information or
questions about the public hearing, please contact Ms. Holly DeJong at
<a href="/cdn-cgi/l/email-protection#521637383d3c357c3a3d3e3e2b123722337c353d24">[email&#160;protected]</a>. The EPA will announce further details at <a href="https://www.epa.gov/csapr/csapr-2015-ozone-naaqs">https://www.epa.gov/csapr/csapr-2015-ozone-naaqs</a>.
The EPA will make every effort to follow the schedule as closely as
possible on the day of the hearing; however, please plan for the
hearings to run either ahead of schedule or behind schedule.
Each commenter will have 5 minutes to provide oral testimony. The
EPA encourages commenters to provide the EPA with a copy of their oral
testimony electronically (via email) by emailing it to
<a href="/cdn-cgi/l/email-protection#c387a6a9acada4edabacafafba83a6b3a2eda4acb5">[email&#160;protected]</a>. The EPA also recommends submitting the text of
your oral comments as written comments to the rulemaking docket.
The EPA may ask clarifying questions during the oral presentations,
but will not respond to the presentations at that time. Written
statements and supporting information submitted during the comment
period will be considered with the same weight as oral comments and
supporting information presented at the public hearing.
Please note that any updates made to any aspect of the hearing will
be posted online at <a href="https://www.epa.gov/csapr/csapr-2015-ozone-naaqs">https://www.epa.gov/csapr/csapr-2015-ozone-naaqs</a>.
While the EPA expects the hearing to go forward as set forth above,
please monitor our website or contact Ms. Holly DeJong at
<a href="/cdn-cgi/l/email-protection#7c38191613121b5214131010053c190c1d521b130a">[email&#160;protected]</a> to determine if there are any updates. The EPA
does not intend to publish a document in the Federal Register
announcing updates.
If you require the services of a translator or special
accommodations such as audio description, please pre-register for the
hearing and describe your needs by April 18, 2022. EPA may not be able
to arrange accommodations without advanced notice.

III. General Information

A. Does this action apply to me?

This proposed rule affects EGU and non-EGU sources, and regulates
the groups identified in Table III.A-1.

Table III.A-1--Regulated Groups
------------------------------------------------------------------------
Industry group NAICS
------------------------------------------------------------------------
Fossil fuel-fired electric power generation................... 221112
Pipeline Transportation of Natural Gas........................ 4862
Cement and Concrete Product Manufacturing..................... 3273
Iron and Steel Mills and Ferroalloy Manufacturing............. 3311
Glass and Glass Product Manufacturing......................... 3272
Basic Chemical Manufacturing.................................. 3251
Petroleum and Coal Products Manufacturing..................... 3241
Pulp, Paper, and Paperboard Mills............................. 3221
------------------------------------------------------------------------

This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
proposed rule. This table lists the types of entities that the EPA is
now aware could potentially be regulated by this proposed rule. Other
types of entities not listed in the table could also be regulated. For
example, the EPA is requesting comment in Section VI.B.3 of this
proposed rule on potential control strategies for sources outside of
the categories listed in the Table III.A.1, such as municipal waste
combustors (MWCs). To determine whether your EGU entity is proposed to
be regulated by this proposed rule, you should carefully examine the
applicability criteria found in 40 CFR 97.1004, which the EPA is not
proposing to alter in this proposed rule. If you have questions
regarding the applicability of this proposed rule to a particular
entity, consult the person listed in the FOR FURTHER INFORMATION
CONTACT section.

B. What action is the Agency taking?

The EPA evaluated whether interstate ozone transport emissions from
upwind states are significantly contributing to nonattainment, or
interfering with maintenance, of the 2015 ozone NAAQS in any downwind
state using the same 4-step interstate transport framework that was
developed in previous ozone transport rulemakings. The EPA is proposing
to find that emissions reductions are required from EGU and non-EGU
sources in a total of 26 upwind states to eliminate significant
contribution to downwind air quality problems for the 2015 ozone
standard under the interstate transport provision of the CAA. The EPA
will ensure that these NO<INF>X</INF> emissions reductions are achieved
by issuing proposed FIP requirements for 26 states: Alabama, Arkansas,
California, Delaware, Illinois, Indiana, Kentucky, Louisiana, Maryland,
Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New
York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia,
West Virginia, Wisconsin, and Wyoming.
The EPA is proposing to revise the existing CSAPR Group 3 Trading
Program to include additional states beginning in the 2023 ozone
season. EGUs in five states not currently covered by any CSAPR trading
program for seasonal NO<INF>X</INF> emissions--Delaware, Minnesota,
Nevada, Utah, and Wyoming--would be added to the CSAPR Group 3 Trading
Program under this proposed rule. EGUs in twelve states currently
participating in the Group 3 Trading Program would remain in the
program under this proposed rule: Illinois, Indiana, Kentucky,
Louisiana, Maryland, Michigan, New Jersey, New York, Ohio,
Pennsylvania, Virginia, and West Virginia. EGUs in eight states
(Alabama, Arkansas, Mississippi, Missouri, Oklahoma, Tennessee, Texas,
and Wisconsin) will transition from the CSAPR Group 2 Trading Program
to the CSAPR Group 3 Trading Program under this proposed rule beginning
in the 2023 ozone season. The EPA proposes to establish control
stringency levels reflecting installation of state-of-the-art
combustion controls on certain covered EGU sources in emissions budgets
beginning in the 2024 ozone season. The EPA proposes to establish
control stringency levels reflecting installation of new SCR or SNCR
controls on certain covered EGU sources in emissions budgets beginning
in the 2026 ozone season.
As a complement to the ozone season emissions budgets, the EPA is
also proposing to establish backstop daily emissions rates of 0.14 lb/
mmBtu for coal-fired steam units greater than or equal to 100 MW in
covered states. The backstop emissions rates will first apply in 2024
for coal-fired steam sources with existing SCRs, and in 2027 for those
currently without SCRs.
In this proposed rule, the EPA is proposing to require emissions
limitations for non-EGU sources in 23 states: Arkansas, California,
Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota,
Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma,
Pennsylvania, Texas, Utah, Virginia, West Virginia, Wisconsin, and

[[Page 20050]]

Wyoming. In these states, EPA is proposing to require emissions
limitations for the following unit types in non-EGU industries:
Furnaces in Glass and Glass Product Manufacturing; boilers and furnaces
in Iron and Steel Mills and Ferroalloy Manufacturing; kilns in Cement
and Cement Product Manufacturing; reciprocating internal combustion
engines in Pipeline Transportation of Natural Gas; and high-emitting
equipment and large boilers in Basic Chemical Manufacturing, Petroleum
and Coal Products Manufacturing, and Pulp, Paper, and Paperboard Mill.
See Table III.A-1 for a list of NAICS codes for each entity included
for regulation under this proposed rule.
The proposed rule would reduce the transport of ozone precursor
emissions to downwind areas, which is protective of human health and
the environment because acute and chronic exposure to ozone are both
associated with negative health impacts. Ozone exposure is also
associated with negative effects on ecosystems. Additional information
on the human health and environmental benefits from the air quality
issues addressed by this proposed rule are included in Section IV of
this proposed rule.

C. What is the Agency's legal authority for taking this action?

1. Statutory Authority
The statutory authority for this proposed rule is provided by the
CAA as amended (42 U.S.C. 7401 et seq.). Specifically, sections 110 and
301 of the CAA provide the primary statutory underpinnings for this
proposed rule. The most relevant portions of CAA section 110 are
subsections 110(a)(1), 110(a)(2) (including 110(a)(2)(D)(i)(I)),
110(c)(1), and 110(k)(6)).
CAA section 110(a)(1) provides that states must make SIP
submissions ``within 3 years (or such shorter period as the
Administrator may prescribe) after the promulgation of a national
primary ambient air quality standard (or any revision thereof),'' and
that these SIP submissions are to provide for the ``implementation,
maintenance, and enforcement'' of such NAAQS.\18\ The statute directly
imposes on states the duty to make these SIP submissions, and the
requirement to make the submissions is not conditioned upon the EPA
taking any action other than promulgating a new or revised NAAQS.\19\
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\18\ 42 U.S.C. 7410(a)(1).
\19\ See EPA v. EME Homer City Generation, L.P., 572 U.S. 489,
509-10 (2014).
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The EPA has historically referred to SIP submissions made for the
purpose of satisfying the applicable requirements of CAA sections
110(a)(1) and 110(a)(2) as ``infrastructure SIP'' or ``iSIP''
submissions. CAA section 110(a)(1) addresses the timing and general
requirements for iSIP submissions, and CAA section 110(a)(2) provides
more details concerning the required content of these submissions.\20\
It includes a list of specific elements that ``[e]ach such plan'' must
address.\21\
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\20\ 42 U.S.C. 7410(a)(2).
\21\ EPA's general approach to infrastructure SIP submissions is
explained in greater detail in individual notices acting or
proposing to act on state infrastructure SIP submissions and in
guidance. See, e.g., Memorandum from Stephen D. Page on Guidance on
Infrastructure State Implementation Plan (SIP) Elements under Clean
Air Act Sections 110(a)(1) and 110(a)(2) (September 13, 2013).
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CAA section 110(c)(1) requires the Administrator to promulgate a
FIP at any time within two years after the Administrator: (1) Finds
that a state has failed to make a required SIP submission; (2) finds a
SIP submission to be incomplete pursuant to CAA section 110(k)(1)(C);
or (3) disapproves a SIP submission. This obligation applies unless the
state corrects the deficiency through a SIP revision that the
Administrator approves before the FIP is promulgated.\22\
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\22\ 42 U.S.C. 7410(c)(1).
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CAA section 110(a)(2)(D)(i)(I), also known as the ``good neighbor''
provision, provides the primary basis for this proposed rule.\23\ It
requires that each state SIP include provisions sufficient to
``prohibit[ ], consistent with the provisions of this subchapter, any
source or other type of emissions activity within the State from
emitting any air pollutant in amounts which will--(I) contribute
significantly to nonattainment in, or interfere with maintenance by,
any other State with respect to any [NAAQS].'' \24\ The EPA often
refers to the emissions reduction requirements under this provision as
``good neighbor obligations'' and submissions addressing these
requirements as ``good neighbor SIPs.''
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\23\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
\24\ Id.
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Once EPA promulgates a NAAQS, the EPA must designate areas as being
in ``attainment'' or ``nonattainment'' of the NAAQS, or
``unclassifiable.'' CAA section 107(d).\25\ For ozone, nonattainment is
further split into five classifications based on the severity of the
violation--Marginal, Moderate, Serious, Severe, or Extreme. Higher
classifications provide states with progressively more time to attain
while imposing progressively more stringent control requirements. See
CAA sections 181, 182.\26\ In general, states with nonattainment areas
classified as Moderate or higher must submit plans to EPA to bring
these areas into attainment according to the statutory schedule. CAA
section 182.\27\ If an area fails to attain the NAAQS by the attainment
date associated with its classification, it is ``bumped up'' to the
next classification. CAA section 181(b).\28\
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\25\ 42 U.S.C. 7407(d).
\26\ 42 U.S.C. 7511, 7511a.
\27\ 42 U.S.C. 7511a.
\28\ 42 U.S.C. 7511(b).
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Section 301(a)(1) of the CAA gives the Administrator the general
authority to prescribe such regulations as are necessary to carry out
functions under the Act.\29\ Pursuant to this section, EPA has
authority to clarify the applicability of CAA requirements and
undertake other rulemaking action as necessary to implement CAA
requirements. CAA section 301 affords the Agency any additional
authority that may be needed in order to make certain other changes to
its regulations under 40 CFR parts 52, 75, 78, and 97, in order to
effectuate the purposes of the Act. Such changes are discussed in
Section X of this proposed rule.
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\29\ 42 U.S.C. 7601(a)(1).
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Section 110(k)(6) of the CAA gives the Administrator authority,
without any further submission from a state, to revise certain prior
actions, including actions to approve SIPs, upon determining that those
actions were in error.\30\ The EPA proposes to make an error correction
under CAA section 110(k)(6) with respect to its prior approval of the
2015 ozone transport SIP submission from the State of Delaware. This is
further discussed in Section IV.C.1 of the proposed rule.
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\30\ 42 U.S.C. 7410(k)(6).
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Tribes are not required to submit state implementation plans.
However, as explained in EPA's regulations outlining Tribal Clean Air
Act authority, the EPA is authorized to promulgate FIPs for Indian
country as necessary or appropriate to protect air quality if a tribe
does not submit, and obtain EPA approval of, an implementation plan.
See 40 CFR 49.11(a); see also CAA section 301(d)(4).\31\ In this
proposed rule, the EPA proposes an ``appropriate or necessary'' finding
under CAA section 301(d) and proposes tribal FIP(s) as necessary to
implement the relevant requirements. This is further discussed in
Section IV.C.2 of the proposed rule.
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\31\ 42 U.S.C. 7601(d)(4).

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[[Page 20051]]

D. What actions has EPA previously issued to address regional ozone
transport?

The EPA has issued several major rules interpreting and clarifying
the requirements of CAA section 110(a)(2)(D)(i)(I) with respect to the
regional transport of ozone. These rules, and the associated court
decisions addressing these rules, summarized here, provide important
direction regarding the requirements of CAA section 110(a)(2)(D)(i)(I).
The ``NO<INF>X</INF> SIP Call,'' promulgated in 1998, addressed the
good neighbor provision for the 1979 1-hour ozone NAAQS.\32\ The rule
required 22 states and the District of Columbia to amend their SIPs to
reduce NO<INF>X</INF> emissions that contribute to ozone nonattainment
in downwind states. The EPA set ozone season NO<INF>X</INF> budgets for
each state, and the states were given the option to participate in a
regional allowance trading program, known as the NO<INF>X</INF> Budget
Trading Program.\33\ The D.C. Circuit largely upheld the NO<INF>X</INF>
SIP Call in Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert.
denied, 532 U.S. 904 (2001).
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\32\ Finding of Significant Contribution and Rulemaking for
Certain States in the Ozone Transport Assessment Group Region for
Purposes of Reducing Regional Transport of Ozone, 63 FR 57356 (Oct.
27, 1998). As originally promulgated, the NO<INF>X</INF> SIP Call
also addressed good neighbor obligations under the 1997 8-hour ozone
NAAQS, but EPA subsequently stayed and later rescinded the rule's
provisions with respect to that standard. See 84 FR 8422 (March 8,
2019).
\33\ ``Allowance Trading,'' sometimes referred to as ``cap and
trade,'' is an approach to reducing pollution that has been used
successfully to protect human health and the environment. The design
elements of EPA's most recent trading programs are discussed in
Section VII.B.1.a of this proposed rule.
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EPA's next rule addressing the good neighbor provision, the Clean
Air Interstate Rule (CAIR), was promulgated in 2005 and addressed both
the 1997 fine particulate matter (PM<INF>2.5</INF>) NAAQS and 1997
ozone NAAQS.\34\ CAIR required SIP revisions in 28 states and the
District of Columbia to reduce emissions of sulfur dioxide
(SO<INF>2</INF>) or NO<INF>X</INF>--important precursors of regionally
transported PM<INF>2.5</INF> (SO<INF>2</INF> and annual NO<INF>X</INF>)
and ozone (summer-time NO<INF>X</INF>). As in the NO<INF>X</INF> SIP
Call, states were given the option to participate in regional trading
programs to achieve the reductions. When the EPA promulgated the final
CAIR in 2005, the EPA also issued findings that states nationwide had
failed to submit SIPs to address the requirements of CAA section
110(a)(2)(D)(i) with respect to the 1997 PM<INF>2.5</INF> and 1997
ozone NAAQS.\35\ On March 15, 2006, the EPA promulgated FIPs to
implement the emissions reductions required by CAIR.\36\ CAIR was
remanded to EPA by the D.C. Circuit in North Carolina v. EPA, 531 F.3d
896 (D.C. Cir. 2008), modified on reh'g, 550 F.3d 1176. For more
information on the legal issues underlying CAIR and the D.C. Circuit's
holding in North Carolina, refer to the preamble of the CSAPR rule.\37\
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\34\ Rule To Reduce Interstate Transport of Fine Particulate
Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain
Program; Revisions to the NO<INF>X</INF> SIP Call, 70 FR 25162 (May
12, 2005).
\35\ 70 FR 21147 (April 25, 2005).
\36\ 71 FR 25328 (April 28, 2006).
\37\ Federal Implementation Plans: Interstate Transport of Fine
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR
48208, 48217 (August 8, 2011).
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In 2011, the EPA promulgated CSAPR to address the issues raised by
the remand of CAIR. CSAPR addressed the two NAAQS at issue in CAIR and
additionally addressed the good neighbor provision for the 2006
PM<INF>2.5</INF> NAAQS.\38\ CSAPR required 28 states to reduce
SO<INF>2</INF> emissions, annual NO<INF>X</INF> emissions, or ozone
season NO<INF>X</INF> emissions that significantly contribute to other
states' nonattainment or interfere with other states' abilities to
maintain these air quality standards.\39\ To align implementation with
the applicable attainment deadlines, the EPA promulgated FIPs for each
of the 28 states covered by CSAPR. The FIPs require EGUs in the covered
states to participate in regional trading programs to achieve the
necessary emissions reductions. Each state can submit a good neighbor
SIP at any time that, if approved by EPA, would replace the CSAPR FIP
for that state.
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\38\ 76 FR 48208.
\39\ CSAPR was revised by several rulemakings after its initial
promulgation in order to revise certain states' budgets and to
promulgate FIPs for five additional states addressing the good
neighbor obligation for the 1997 ozone NAAQS. See 76 FR 80760
(December 27, 2011); 77 FR 10324 (February 21, 2012); 77 FR 34830
(June 12, 2012).
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CSAPR was the subject of an adverse decision by the D.C. Circuit in
August 2012.\40\ However, this decision was reversed in April 2014 by
the Supreme Court, which largely upheld the rule, including EPA's
approach to addressing interstate transport in CSAPR. EPA v. EME Homer
City Generation, L.P., 572 U.S. 489 (2014) (EME Homer City I). The rule
was remanded to the D.C. Circuit to consider claims not addressed by
the Supreme Court. Id. In July 2015 the D.C. Circuit generally affirmed
EPA's interpretation of various statutory provisions and EPA's
technical decisions. EME Homer City Generation, L.P. v. EPA, 795 F.3d
118 (2015) (EME Homer City II). However, the court remanded the rule
without vacatur for reconsideration of EPA's emissions budgets for
certain states, which the court found may have over-controlled those
states' emissions with respect to the downwind air quality problems to
which the states were linked. Id. at 129-30, 138. For more information
on the legal issues associated with CSAPR and the Supreme Court's and
D.C. Circuit's decisions in the EME Homer City litigation, refer to the
preamble of the CSAPR Update.\41\
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\40\ On August 21, 2012, the D.C. Circuit issued a decision in
EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012),
vacating CSAPR. The EPA sought review with the D.C. Circuit en banc
and the D.C. Circuit declined to consider EPA's appeal en banc. EME
Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. January
24, 2013), ECF No. 1417012 (denying EPA's motion for rehearing en
banc).
\41\ Cross-State Air Pollution Rule Update for the 2008 Ozone
NAAQS, 81 FR 74504, 74511 (October 26, 2016).
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In 2016, the EPA promulgated the CSAPR Update to address interstate
transport of ozone pollution with respect to the 2008 ozone NAAQS.\42\
The final rule updated the CSAPR ozone season NO<INF>X</INF> emissions
budgets for 22 states to achieve cost-effective and immediately
feasible NO<INF>X</INF> emissions reductions from EGUs within those
states.\43\ The EPA aligned the analysis and implementation of the
CSAPR Update with the 2017 ozone season in order to assist downwind
states with timely attainment of the 2008 ozone NAAQS.\44\ The CSAPR
Update implemented the budgets through FIPs requiring sources to
participate in a revised CSAPR NO<INF>X</INF> ozone season trading
program beginning with the 2017 ozone season. As under CSAPR, each
state could submit a good neighbor SIP at any time that, if approved by
the EPA, would replace the CSAPR Update FIP for that state. The final
CSAPR Update also addressed the remand by the D.C. Circuit of certain
states' CSAPR phase 2 ozone season NO<INF>X</INF> emissions budgets in
EME Homer City II.
---------------------------------------------------------------------------

\42\ 81 FR 74504.
\43\ One state, Kansas, was made newly subject to ozone season
NO<INF>X</INF> requirements by the CSAPR Update. All other CSAPR
Update states were already subject to ozone season NO<INF>X</INF>
requirements under CSAPR.
\44\ 81 FR 74516. EPA's final 2008 Ozone NAAQS SIP Requirements
Rule, 80 FR 12264, 12268 (March 6, 2015), revised the attainment
deadline for ozone nonattainment areas designated as Moderate to
July 20, 2018. See 40 CFR 51.1103. In order to demonstrate
attainment by this deadline, states were required to rely on design
values calculated using ozone season data from 2015 through 2017,
since the July 20, 2018, deadline did not afford enough time for
measured data of the full 2018 ozone season.
---------------------------------------------------------------------------

In December 2018, the EPA promulgated the CSAPR ``Close-Out,''
which determined that no further enforceable reductions in emissions of
NO<INF>X</INF> were required with respect to the

[[Page 20052]]

2008 ozone NAAQS for 20 of the 22 eastern states covered by the CSAPR
Update, and reflected that determination in revisions to the existing
state-specific sections of the CSAPR Update regulations for those
states.\45\
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\45\ Determination Regarding Good Neighbor Obligations for the
2008 Ozone National Ambient Air Quality Standard, 83 FR 65878, 65882
(Dec. 21, 2018). After promulgating the CSAPR Update and before
promulgating the CSAPR Close-Out, the EPA approved a SIP from
Kentucky resolving the Commonwealth's good neighbor obligations for
the 2008 ozone NAAQS. 83 FR 33730 (July 17, 2018). In the Revised
CSAPR Update, the EPA made an error correction under CAA section
110(k)(6) to convert this approval to a disapproval, because the
Kentucky approval relied on the same analysis which the D.C. Circuit
determined to be unlawful in the CSAPR Close-Out.
---------------------------------------------------------------------------

The CSAPR Update and the CSAPR Close-Out were both subject to legal
challenges in the D.C. Circuit. Wisconsin v. EPA, 938 F.3d 303 (D.C.
Cir. 2019) (Wisconsin); New York v. EPA, 781 Fed. App'x 4 (D.C. Cir.
2019) (New York). In September 2019, the D.C. Circuit upheld the CSAPR
Update in virtually all respects but remanded the rule because it was
partial in nature and did not fully eliminate upwind states'
significant contribution to nonattainment or interference with
maintenance of the 2008 ozone NAAQS by ``the relevant downwind
attainment deadlines'' in the CAA. Wisconsin, 938 F.3d at 313-15. In
October 2019, the D.C. Circuit vacated the CSAPR Close-Out on the same
grounds that it remanded the CSAPR Update in Wisconsin, specifically
that the Close-Out rule did not address good neighbor obligations by
``the next applicable attainment date'' of downwind states. New York,
781 Fed. App'x at 7.\46\
---------------------------------------------------------------------------

\46\ Subsequently, the D.C. Circuit made clear in a decision
reviewing EPA's denial of a petition under CAA section 126 that the
holding in Wisconsin regarding alignment with downwind area's
attainment schedules applies with equal force to the Marginal area
attainment date established under CAA section 181(a). See Maryland
v. EPA, 958 F.3d 1185, 1203-04 (D.C. Cir. 2020).
---------------------------------------------------------------------------

In response to the Wisconsin remand of the CSAPR Update and the New
York vacatur of the CSAPR Close-Out, the EPA promulgated the Revised
CSAPR Update on April 30, 2021.\47\ The Revised CSAPR Update found that
the CSAPR Update was a full remedy for nine of the covered states. For
the 12 remaining states, the EPA found that their projected 2021 ozone
season NO<INF>X</INF> emissions significantly contribute to downwind
states' nonattainment or maintenance problems. The EPA issued new or
amended FIPs for these 12 states and required implementation of revised
emissions budgets for EGUs beginning with the 2021 ozone season. Based
on EPA's assessment of remaining air quality issues and additional
emissions control strategies for EGUs and emissions sources in other
industry sectors (non-EGUs), the EPA determined that the NO<INF>X</INF>
emissions reductions achieved by the Revised CSAPR Update fully
eliminated these states' significant contributions to downwind air
quality problems for the 2008 ozone NAAQS. As under the CSAPR and the
CSAPR Update, each state can submit a good neighbor SIP at any time
that, if approved by EPA, would replace the Revised CSAPR Update FIP
for that state.\48\
---------------------------------------------------------------------------

\47\ Revised Cross-State Air Pollution Rule Update for the 2008
Ozone NAAQS, 86 FR 23054 (April 30, 2021).
\48\ The Revised CSAPR Update is currently subject to a petition
for judicial review pending in the D.C. Circuit Court of Appeals,
Midwest Ozone Group v. EPA, No. 21-1146 (D.C. Cir. June 25, 2021).
---------------------------------------------------------------------------

IV. Air Quality Issues Addressed and Overall Approach for the Proposed
Rule

A. The Interstate Ozone Transport Air Quality Challenge

1. Nature of Ozone and the Ozone NAAQS
Ground-level ozone is not emitted directly into the air but is
created by chemical reactions between NO<INF>X</INF> and volatile
organic compounds (VOCs) in the presence of sunlight. Emissions from
electric utilities and industrial facilities, motor vehicles, gasoline
vapors, and chemical solvents are some of the major sources of
NO<INF>X</INF> and VOCs.
Because ground-level ozone formation increases with temperature and
sunlight, ozone levels are generally higher during the summer months.
Increased temperature also increases emissions of volatile man-made and
biogenic organics and can also indirectly increase NO<INF>X</INF>
emissions (e.g., increased electricity generation for air
conditioning).
On October 1, 2015, the EPA strengthened the primary and secondary
ozone standards to 70 ppb as an 8-hour level.\49\ Specifically, the
standards require that the 3-year average of the fourth highest 24-hour
maximum 8-hour average ozone concentration may not exceed 70 ppb as a
truncated value (i.e., digits to right of decimal removed).\50\ In
general, areas that exceed the ozone standard are designated as
nonattainment areas, pursuant to the designations process under CAA
section 107, and are subject to heightened planning requirements
depending on the degree of severity of their nonattainment
classification, see CAA sections 181, 182.
---------------------------------------------------------------------------

\49\ 80 FR 65291.
\50\ 40 CFR part 50, Appendix P to part 50
---------------------------------------------------------------------------

In the process of setting the 2015 ozone NAAQS, the EPA noted that
the conditions conducive to the formation of ozone (i.e., seasonally-
dependent factors such as ambient temperature, strength of solar
insolation, and length of day) differ by location, and that the Agency
believes it is important that ozone monitors operate during all periods
when there is a reasonable possibility of ambient levels approaching
the level of the NAAQS. At that time, the EPA stated that ambient ozone
concentrations in many areas could approach or exceed the level of the
NAAQS, more frequently and during more months of the year compared with
the historical ozone season monitoring lengths. Consequently, the EPA
extended the ozone monitoring season for many locations. See 80 FR
65416 for more details.
Furthermore, the EPA stated that in addition to being affected by
changing emissions, future ozone concentrations may also be affected by
climate change. Modeling studies in the EPA's Interim Assessment (U.S.
EPA, 2009a) that are cited in support of the 2009 Endangerment Finding
under CAA section 202(a) (74 FR 66496, Dec. 15, 2009) as well as a
recent assessment of potential climate change impacts (Fann et al.,
2015) project that climate change may lead to future increases in
summer ozone concentrations across the contiguous U.S.\51\ (80 FR
65300). The increase in ozone results from changes in local weather
conditions, including temperature and atmospheric circulation patterns,
as well as changes in ozone precursor emissions that are influenced by
meteorology (Nolte et al., 2018). While the projected impact may not be
uniform, climate change has the potential to increase average
summertime ozone relative to a future without climate
change.52 53 54 Climate

[[Page 20053]]

change has the potential to offset some of the improvements in ozone
air quality, and therefore some of the improvements in public health,
that are expected from reductions in emissions of ozone precursors (80
FR 65300).
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\51\ These modeling studies are based on coupled global climate
and regional air quality models and are designed to assess the
sensitivity of U.S. air quality to climate change. A wide range of
future climate scenarios and future years have been modeled and
there can be variations in the expected response in U.S. O\3\ by
scenario and across models and years, within the overall signal of
higher summer O\3\ concentrations in a warmer climate.
\52\ Fann NL, Nolte CG, Sarofim MC, Martinich J, Nassikas NJ.
Associations Between Simulated Future Changes in Climate, Air
Quality, and Human Health. JAMA Netw Open. 2021;4(1):e2032064. doi:
10.1001/jamanetworkopen.2020.32064.
\53\ Christopher G Nolte, Tanya L Spero, Jared H Bowden, Marcus
C Sarofim, Jeremy Martinich, Megan S Mallard. Regional temperature-
ozone relationships across the U.S. under multiple climate and
emissions scenarios. J Air Waste Manag Assoc. 2021 Oct;71(10):1251-
1264. doi: 10.1080/10962247.2021.1970048.
\54\ Nolte, C.G., P.D. Dolwick, N. Fann, L.W. Horowitz, V. Naik,
R.W. Pinder, T.L. Spero, D.A. Winner, and L.H. Ziska, 2018: Air
Quality. In Impacts, Risks, and Adaptation in the United States:
Fourth National Climate Assessment, Volume II [Reidmiller, D.R.,
C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K.
Maycock, and B.C. Stewart (eds.)]. U.S. Global Change Research
Program, Washington, DC, USA, pp. 512-538. doi: 10.7930/
NCA4.2018.CH13.
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2. Ozone Transport
Studies have established that ozone formation, atmospheric
residence, and transport occur on a regional scale (i.e., thousands of
kilometers) over much of the U.S.\55\ While substantial progress has
been made in reducing ozone in many areas, the interstate transport of
ozone precursor emissions remains an important contributor to peak
ozone concentrations and high-ozone days during the summer ozone
season.
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\55\ Bergin, M.S. et al. (2007) Regional air quality: Local and
interstate impacts of NO<INF>X</INF> and SO<INF>2</INF> emissions on
ozone and fine particulate matter in the eastern United States.
Environmental Sci & Tech. 41: 4677-4689.
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The EPA has previously concluded in the NO<INF>X</INF> SIP Call,
CAIR, CSAPR, the CSAPR Update, and the Revised CSAPR Update that a
regional NO<INF>X</INF> control strategy would be effective in reducing
regional-scale transport of ozone precursor emissions. NO<INF>X</INF>
emissions can be transported downwind as NO<INF>X</INF> or as ozone
after transformation in the atmosphere. In any given location, ozone
pollution levels are impacted by a combination of background ozone
concentration, local emissions, and emissions from upwind sources
resulting from ozone transport. Downwind states' ability to meet
health-based air quality standards such as the NAAQS is challenged by
the transport of ozone pollution across state borders. For example,
ozone assessments conducted for the October 2015 Regulatory Impact
Analysis of the Final Revisions to the National Ambient Air Quality
Standards for Ground-Level Ozone continue to show the importance of
NO<INF>X</INF> emissions for ozone transport. This analysis is included
in the docket for this proposal.
Further, studies have found that EGU NO<INF>X</INF> emissions
reductions can be effective in reducing individual 8-hour peak ozone
concentrations and in reducing 8-hour peak ozone concentrations
averaged across the ozone season. For example, a study that evaluates
the effectiveness on ozone concentrations of EGU NO<INF>X</INF>
reductions achieved under the NO<INF>X</INF> Budget Trading Program
(i.e., the NO<INF>X</INF> SIP Call) shows that regulating
NO<INF>X</INF> emissions in that program was highly effective in
reducing ozone concentrations during the ozone season.\56\
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\56\ Butler, et al., ``Response of Ozone and Nitrate to
Stationary Source Reductions in the Eastern USA''. Atmospheric
Environment, 2011.
---------------------------------------------------------------------------

Previous regional ozone transport efforts, including the
NO<INF>X</INF> SIP Call, CAIR, CSAPR, the CSAPR Update, and the Revised
CSAPR Update, required ozone season NO<INF>X</INF> reductions from EGU
sources to address interstate transport of ozone. Together with
NO<INF>X</INF>, EPA has also identified VOCs as a precursor in forming
ground-level ozone. Ozone formation chemistry can be ``NO<INF>X</INF>-
limited,'' where ozone production is primarily determined by the amount
of NO<INF>X</INF> emissions or ``VOC-limited,'' where ozone production
is primarily determined by the amount of VOC emissions.\57\ The EPA and
others have long regarded NO<INF>X</INF> to be the more significant
ozone precursor in the context of interstate ozone transport.\58\
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\57\ ``Ozone Air Pollution.'' Introduction to Atmospheric
Chemistry, by DANIEL J. JACOB, Princeton University Press,
PRINCETON, NEW JERSEY, 1999, pp. 231-244.
\58\ 81 FR 74514.
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The EPA has determined that the regulation of VOCs as an ozone
precursor is not necessary to eliminate significant contribution of
ozone transport to downwind areas in this proposed rule. As described
in Section VI.A of this proposed rule, the EPA examined the results of
the contribution modeling performed for this rule to identify the
portion of the ozone contribution attributable to anthropogenic
NO<INF>X</INF> emissions versus VOC emissions from each linked upwind
state to each downwind receptor. Our analysis of the ozone contribution
from upwind states subject to regulation under this proposed rule
demonstrates that the vast majority of the downwind air quality areas
are NO<INF>X</INF>-limited, rather than VOC-limited. Therefore, the
proposed rule's strategy for reducing regional-scale transport of ozone
targets NO<INF>X</INF> emissions from stationary sources to achieve the
most effective reductions of ozone transport over the geography of the
affected downwind areas.
Commenters on prior ozone transport rules have asserted that VOC
emissions harm underserved and overburdened communities experiencing
disproportionate environmental health burdens and facing other
environmental injustices. The EPA acknowledges that VOCs can contain
toxic chemicals that are detrimental to public health. The EPA
conducted a demographic analysis as part of the regulatory impact
analysis for the 2015 revisions to the primary and secondary ozone
NAAQS. This analysis, which is included in the docket for this proposed
rulemaking, found greater representation of minority populations in
areas with poor air quality relative to the revised ozone standard than
in the U.S. as a whole. The EPA concluded that populations in these
areas would be expected to benefit from implementation of future air
pollution control actions from state and local air agencies in
implementing the strengthened standard. This proposed rule is an
example of air pollution control actions implemented by the federal
government in support of the more stringent 2015 ozone NAAQS, and
populations living in downwind ozone nonattainment areas are expected
to benefit from improved air quality that will result from reducing
ozone transport. Further discussion of the environmental justice
impacts of this proposed rule is located in Section VIII of this
proposed rule and in the accompanying regulatory impact analysis,
titled ``Regulatory Impact Analysis for the Proposed Federal
Implementation Plan Addressing Regional Ozone Transport for the 2015
Ozone National Ambient Air Quality Standard'' [EPA-452/D-22-001], which
is available in the docket for this rulemaking.
The Agency regulates exposure to toxic pollutant concentrations and
ambient exposure to criteria pollutants other than ozone through other
sections of the Act, such as the regulation of hazardous air pollutants
under CAA section 112 or the process for revising and implementing the
NAAQS under CAA sections 107-110. The purpose of the proposed
rulemaking is to protect public health and the environment by
eliminating significant contribution from 26 states to nonattainment or
maintenance of the 2015 ozone NAAQS in order to meet the requirements
of the CAA's interstate transport provision. In this proposed rule, the
EPA continues to observe that requiring NO<INF>X</INF> emissions
reductions from stationary sources is an effective strategy for
reducing regional ozone transport in the U.S.
In Section VI of this proposed rule, EPA describes the multi-factor
test that is used to determine NO<INF>X</INF> emissions reductions that
are cost-effective and reduce interstate transport of ground-level
ozone. Our analysis indicates that the EGU and non-EGU control
requirements proposed in this rule will provide meaningful improvements
in air quality at the downwind receptors. Based on the implementation
schedule

[[Page 20054]]

established in Section VII.A of this proposed rule, the EPA proposes to
determine that the regulatory requirements included in the proposed
rule are as expeditious as practicable and are aligned with the
attainment schedule of downwind areas.
3. Health and Environmental Effects
Exposure to ambient ozone causes a variety of negative effects on
human health, vegetation, and ecosystems. In humans, acute and chronic
exposure to ozone is associated with premature mortality and a number
of morbidity effects, such as asthma exacerbation. In ecosystems, ozone
exposure causes visible foliar injury, decreases plant growth, and
affects ecosystem community composition. See EPA's October 2015
Regulatory Impact Analysis of the Final Revisions to the National
Ambient Air Quality Standards for Ground-Level Ozone \59\ in the docket
for this proposal for more information on the human health and
ecosystem effects associated with ambient ozone exposure.
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\59\ Available at <a href="https://www.epa.gov/sites/default/files/2016-02/documents/20151001ria.pdf">https://www.epa.gov/sites/default/files/2016-02/documents/20151001ria.pdf</a>.
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B. Proposed Rule Approach

1. The 4-Step Interstate Transport Framework
The EPA first developed a multi-step process to address the
requirements of the good neighbor provision in the NO<INF>X</INF> SIP
Call and CAIR. The Agency built upon this framework and further refined
the methodology for addressing interstate transport obligations in
subsequent rules such as CSAPR, the CSAPR Update, and the Revised CSAPR
Update.\60\ In CSAPR, the EPA first articulated a ``4-step framework''
within which to assess interstate transport obligations for ozone. In
this proposed action to address interstate transport obligations for
the 2015 ozone NAAQS, the EPA is again utilizing the 4-step interstate
transport framework. These steps are: (1) Identifying downwind
receptors that are expected to have problems attaining the NAAQS
(nonattainment receptors) or maintaining the NAAQS (maintenance
receptors); (2) determining which upwind states are ``linked'' to these
identified downwind receptors based on a numerical contribution
threshold; (3) for states linked to downwind air quality problems,
identifying upwind emissions on a statewide basis that significantly
contribute to downwind nonattainment or interfere with downwind
maintenance of the NAAQS, considering cost- and air quality-based
factors; and (4) for upwind states that are found to have emissions
that significantly contribute to nonattainment or interfere with
maintenance of the NAAQS in any downwind state, implementing the
necessary emissions reductions through enforceable measures.
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\60\ See CSAPR, Final Rule, 76 FR 48208, 48248-48249 (August 8,
2011); CSAPR Update, Final Rule, 81 FR 74504, 74517-74521 (October
26, 2016).
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a. Step 1 Approach
The EPA proposes to continue to apply the method of the CSAPR
Update and the Revised CSAPR Update for identifying nonattainment and
maintenance receptors. In the Revised CSAPR Update, the EPA assessed
downwind air quality problems using modeled future air quality
concentrations for an analytic year aligned with the relevant
attainment deadline for the NAAQS under consideration in that
rulemaking.\61\ Similarly, in CSAPR, downwind air quality problems were
assessed using modeled future air quality concentrations for a year
aligned with attainment deadlines for the NAAQS considered in that
rulemaking. The base case scenario provides an assessment of future air
quality conditions that generally accounts for enforceable ``on-the-
books'' emissions reductions and provides the most up-to-date forecast
of what future emissions would resemble, in the absence of the
transport policy in the proposed rule under evaluation. Downwind air
quality problems are identified as the locations of monitoring sites
that are projected to be unable to attain the NAAQS (``nonattainment
receptors'') or as the locations of monitoring sites that are projected
to be unable to maintain the NAAQS (``maintenance receptors''). In the
CSAPR Update and the Revised CSAPR Update, unlike CSAPR,\62\ the EPA
also considered currently available monitored air quality data to
further inform the identification of projected downwind air quality
problems. These same considerations are included for this proposal.
Further details regarding the application of Step 1 of the 4-step
interstate transport framework in this proposal are described in
Section V.D of this proposed rule.
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\61\ Specifically, the EPA analyzed 2021 to align with the
attainment date for areas classified as Severe nonattainment for the
2008 ozone NAAQS, and because the last full ozone season before that
date, in 2020, was already in the past.
\62\ In CSAPR, the EPA did not use current monitored air quality
conditions, because that data was influenced by the invalidated CAIR
rule, which the EPA was replacing with CSAPR. See 81 FR 74506,
74531. As the EPA is not replacing an existing transport program in
this proposed rule, the Agency proposes to once again consider
current monitored data as part of the process for identifying
projected receptors for this rulemaking.
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b. Step 2 Approach
The EPA proposes to apply the same approach for identifying which
states are contributing to downwind nonattainment and maintenance
receptors as it has applied in the three prior CSAPR rulemakings.
CSAPR, the CSAPR Update, and the Revised CSAPR Update used a screening
threshold of 1 percent of the NAAQS to identify upwind states that were
``linked'' to downwind air pollution problems. States with
contributions greater than or equal to the threshold for at least one
downwind nonattainment or maintenance receptor identified in Step 1
were identified as needing further evaluation of their good neighbor
obligations to downwind states.\63\ The EPA evaluated each state's
contribution based on the average relative downwind impact calculated
over multiple days.\64\ States whose air quality impacts to all
downwind receptors were below this threshold did not require further
evaluation for actions to address transport. In other words, the EPA
determined that these states did not contribute to downwind air quality
problems and therefore had no emissions reduction obligations under the
good neighbor provision. The EPA applies a contribution screening
threshold because many downwind ozone nonattainment areas receive
transport contributions from a number of upwind states. While the
proportion of contribution from a single upwind state may be relatively
small, the effect of collective contribution resulting from multiple
upwind states may substantially contribute to nonattainment of or
interference with maintenance of the NAAQS in downwind areas. The
preambles to the

[[Page 20055]]

proposed and final CSAPR rules discuss the use of the 1 percent
threshold for CSAPR. See 75 FR 45237 (August 2, 2010); 76 FR 48238
(August 8, 2011). The same metric is discussed in the CSAPR Update, see
81 FR 74538, and in the Revised CSAPR Update, see 86 FR 23054. In this
proposed rule, the EPA updated the air quality modeling data used for
determining contributions at Step 2 of the four-step interstate
transport framework. The EPA otherwise continues to find that this
threshold is appropriate to continue to apply for the 2015 ozone NAAQS.
This proposal's application of the Step 2 approach is comprehensively
described in Section V of this proposed rule.
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\63\ For ozone, the impacts include those from VOC and
NO<INF>X</INF> from all sectors.
\64\ The number of days used in calculating the average
contribution metric has historically been determined in a manner
that is generally consistent with EPA's recommendations for
projecting future year ozone design values. Our ozone attainment
demonstration modeling guidance at the time of CSAPR recommended
using all model-predicted days above the NAAQS to calculate future
year design values (<a href="https://www3.epa.gov/ttn/scram/guidance/guide/final-03-pm-rh-guidance.pdf">https://www3.epa.gov/ttn/scram/guidance/guide/final-03-pm-rh-guidance.pdf</a>). In 2014, the EPA issued draft revised
guidance that changed the recommended number of days to the top-10
model predicted days (<a href="https://www3.epa.gov/ttn/scram/guidance/guide/Draft-O3-PM-RH-Modeling_Guidance-2014.pdf">https://www3.epa.gov/ttn/scram/guidance/guide/Draft-O3-PM-RH-Modeling_Guidance-2014.pdf</a>). For the CSAPR Update,
the EPA transitioned to calculating design values based on this
draft revised approach. The revised modeling guidance was finalized
in 2019 and, in this regard, EPA is calculating both the ozone
design values and the contributions based on a top-10 day approach
(<a href="https://www3.epa.gov/ttn/scram/guidance/guide/O3-PM-RH-Modeling_Guidance-2018.pdf">https://www3.epa.gov/ttn/scram/guidance/guide/O3-PM-RH-Modeling_Guidance-2018.pdf</a>).
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c. Step 3 Approach
The EPA proposes to continue to apply the same approach as the
prior three CSAPR rulemakings for evaluating ``significant
contribution'' at Step 3.\65\ For states that are linked in Step 3 to
downwind air quality problems, CSAPR, the CSAPR Update, and the Revised
CSAPR Update evaluated NO<INF>X</INF> reduction potential, cost, and
downwind air quality improvements available at various mitigation
technology breakpoints (represented by cost thresholds) in the multi-
factor test. In CSAPR, the CSAPR Update, and the Revised CSAPR Update,
the EPA selected the technology breakpoint (represented by a cost
threshold) that, in general, maximized cost-effectiveness--i.e., that
achieved a reasonable balance of incremental NO<INF>X</INF> reduction
potential and corresponding downwind ozone air quality improvements,
relative to the other emissions budget levels evaluated. See, e.g., 81
FR 74550. The EPA determined the level of emissions reductions
associated with that level of control stringency to constitute
significant contribution to nonattainment or interfere with maintenance
of a NAAQS downwind. See, e.g., 86 FR 23116. This approach was upheld
by the U.S. Supreme Court in EPA v. EME Homer City.\66\
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\65\ For simplicity, the EPA (and courts) at times will refer to
the Step 3 analysis as determining ``significant contribution'';
however, EPA's approach at Step 3 also implements the ``interference
with maintenance'' prong of the good neighbor provision, by also
addressing emissions that impact the maintenance receptors
identified at Step 1. See 86 FR 23074 (``In effect, EPA's
determination of what level of upwind contribution constitutes
`interference' with a maintenance receptor is the same determination
as what constitutes `significant contribution' for a nonattainment
receptor. Nonetheless, this continues to give independent effect to
prong 2 because the EPA applies a broader definition for identifying
maintenance receptors, which accounts for the possibility of
problems maintaining the NAAQS under realistic potential future
conditions.'').
\66\ EPA v. EME Homer City Generation, L.P., 572 U.S. 489
(2014).
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The EPA proposes in this action to apply this approach to identify
EGU and non-EGU NO<INF>X</INF> control stringencies necessary to
address significant contribution for the 2015 ozone NAAQS. The EPA
applies a multifactor assessment using cost-thresholds, total emissions
reduction potential, and downwind air quality effects as key factors in
determining a reasonable balance of NO<INF>X</INF> controls in light of
the downwind air quality problems. EPA's evaluation of available
NO<INF>X</INF> mitigation strategies for EGUs focuses on the same core
set of measures as prior transport rules, and the EPA proposes a
control stringency for EGUs from these measures that is commensurate
with the nature of the ongoing ozone nonattainment and maintenance
problems observed for the 2015 ozone NAAQS. Similarly, in this action,
the EPA includes other industrial sources (non-EGUs) in its Step 3
analysis and proposes emissions limitations for certain non-EGU sources
as needed to eliminate significant contribution and interference with
maintenance. The available reductions and cost-levels for the non-EGU
stringency is generally commensurate with the control strategy for
EGUs.
In CSAPR, the CSAPR Update, and the Revised CSAPR Update, EPA
focused its Step 3 analysis on EGUs. In the Revised CSAPR Update, in
response to the Wisconsin decision's finding that the EPA had not
adequately evaluated potential non-EGU reductions, see 938 F.3d at 318,
the EPA determined that the available NO<INF>X</INF> emissions
reductions from non-EGU sources, for purposes of addressing good
neighbor obligations for the 2008 ozone NAAQS, at a comparable cost
threshold to the required EGU emissions reductions (for which EPA used
an adjusted representative cost of $1,800 per ton), and based on the
timing of when such measures could be implemented, did not provide a
sufficiently meaningful and timely air quality improvement at the
downwind receptors before those receptors were projected to resolve.
See 86 FR 23110. On that basis, the EPA made a finding that emissions
reductions from non-EGU sources were not required to eliminate
significant contribution to downwind air quality problems under the
interstate transport provision for the 2008 ozone NAAQS. In this
proposal, EPA's ``significant contribution'' analysis at Step 3 of the
4-step framework includes a comprehensive evaluation of major
stationary source non-EGU industries in the linked upwind states. The
EPA is proposing to find that emissions from certain non-EGU sources in
the upwind states significantly contribute to downwind air quality
problems for the 2015 ozone NAAQS, and that cost-effective emissions
reductions from these sources are required to eliminate significant
contribution under the interstate transport provision. Therefore, this
proposed rule includes required emissions reductions from non-EGU
sources in upwind states to fulfill interstate transport obligations
for the 2015 ozone NAAQS. This analysis is described fully in Section
VI of the proposed rule.
In this proposed rule, the EPA also continues to apply its approach
for assessing and avoiding ``over-control.'' In EME Homer City, the
Supreme Court held that ``EPA cannot require a State to reduce its
output of pollution by more than is necessary to achieve attainment in
every downwind State or at odds with the one-percent threshold the
Agency has set.'' 572 U.S. at 521. The Court acknowledged that
``instances of `over-control' in particular downwind locations may be
incidental to reductions necessary to ensure attainment elsewhere.''
Id. at 492.

``Because individual upwind States often `contribute
significantly' to nonattainment in multiple downwind locations, the
emissions reductions required to bring one linked downwind State
into attainment may well be large enough to push other linked
downwind States over the attainment line. As the Good Neighbor
Provision seeks attainment in every downwind State, however,
exceeding attainment in one State cannot rank as `over-control'
unless unnecessary to achieving attainment in any downwind State.
Only reductions unnecessary to downwind attainment anywhere fall
outside the Agency's statutory authority.''

Id. at 522 (footnotes excluded).
The Court further explained that ``while EPA has a statutory duty
to avoid over-control, the Agency also has a statutory obligation to
avoid `under-control,' i.e., to maximize achievement of attainment
downwind.'' Id. at 523. Therefore, in the CSAPR Update and Revised
CSAPR Update, the EPA evaluated possible over-control by considering
whether an upwind state is linked solely to downwind air quality
problems that can be resolved at a lower cost threshold, or if upwind
states would reduce their emissions at a lower cost threshold to the
extent that they would no longer meet or exceed the 1 percent air
quality contribution threshold. See, e.g., 81 FR at 74551-52. See also
Wisconsin, 938 F.3d at 325

[[Page 20056]]

(over-control must be proven through a `` `particularized, as-applied
challenge' '') (quoting EME Homer City Generation, 572 U.S. at 523-24).
The EPA continues to apply this framework for assessing over-control in
this proposed rule, and, as discussed in Section VI.D.4 of this
proposed rule, does not find any over-control at the proposed
stringency to be sufficiently certain to warrant a relaxation in
requirements for the sources in any covered state.
This evaluation of cost, NO<INF>X</INF> reductions, and air quality
improvements, including consideration of whether there is proven over-
control, results in EPA's determination of the appropriate level of
upwind control stringency that would result in elimination of emissions
that significantly contribute to nonattainment or interfere with
maintenance of the NAAQS in downwind areas.
d. Step 4 Approach
The EPA proposes an approach similar to its prior transport
rulemakings to implement the necessary emissions reductions through
permanent and enforceable measures. The EPA proposes to require EGU
sources to participate in an emissions trading program and proposes
additional enhancements to the trading regime to maintain the selected
control stringency over time and improve emissions performance at
individual units, offering a necessary measure of assurance that
emissions controls will be operated throughout the ozone season. For
non-EGUs, the EPA proposes permanent and enforceable emissions rate
limits and work practice standards, and associated compliance
requirements, on several types of NO<INF>X</INF>-emitting combustion
units across several industrial sectors. The measures for both EGUs and
non-EGUs are proposed to be required throughout the May 1-September 30
ozone season annually. The EGU program will begin with the 2023 ozone
season, and non-EGU implementation will begin with the 2026 ozone
season. Refer to Section VII.A of this proposed rule for details on the
implementation schedule.
Based on the EPA's experience in implementing prior transport
rulemakings, the Agency is proposing several enhancements to its
trading-program approach for implementing good neighbor requirements
for EGUs. In CSAPR, the CSAPR Update, and the Revised CSAPR Update, the
EPA established interstate trading programs for EGUs to implement the
necessary emissions reductions. In each of these rules, EGUs in each
covered state are assigned an emissions budget for their collective
emissions. Emissions allowances are allocated to units covered by the
trading program, and the covered units then surrender allowances after
the close of each control period, usually in an amount equal to their
ozone season EGU NO<INF>X</INF> emissions. While these programs have
been effective in achieving overall reductions in emissions, experience
has shown that these programs may not fully reflect in perpetuity the
degree of emissions stringency determined necessary to eliminate
significant contribution in Step 3 and may not adequately ensure the
control of emissions throughout all days of the ozone season. At the
same time, the EPA continues to find that an interstate-trading program
approach delivers substantial benefits at Step 4 in terms of affording
an appropriate degree of compliance flexibility, certainty in emissions
outcomes, data and performance transparency, and cost-effective
achievement of a high degree of aggregate emissions reductions. As
such, EPA proposes to retain an interstate trading program approach
while proposing several enhancements to that approach.
Thus, in this rulemaking, the EPA is proposing to include budget-
setting procedures in the regulations that will allow state emissions
budgets for control periods in 2025 and later years to reflect more
current data on the composition and utilization of the EGU fleet (e.g.,
the 2025 budgets would reflect 2023 data, the 2026 budgets would
reflect 2024 data, etc.). These enhancements would enable the trading
program to better maintain over time the selected control stringency
that was determined to be necessary to address states' good neighbor
obligations with respect to the 2015 ozone NAAQS. In prior programs,
where state emissions budgets were static across years rather than
calibrated to yearly fleet changes, the EPA has observed instances of
units idling their emission controls in the latter years of the
program.
In the trading programs established for ozone season NO<INF>X</INF>
emissions under CSAPR, the CSAPR Update, and the Revised CSAPR Update,
the EPA included assurance provisions to limit state emissions to
levels below 121 percent of the state's budget by requiring additional
allowance surrenders in the instance that emissions in the state exceed
this level. This limit on the degree to which a state's emissions can
exceed its budget is designed to allow for a certain level of year-to-
year variability within power sector emissions to account for
fluctuations in demand and EGU operations and is responsive to previous
court decisions (see discussion in Section VII.B.4 of this proposed
rule). In this action, the EPA again proposes to retain the existing
assurance provisions that limit state emissions to levels below 121
percent of the state's budget by requiring additional allowance
surrenders in the instance that emissions in the state exceed this
level for the 2023 and 2024 control periods. For control periods in
2025 and later years, the EPA is proposing to maintain the same general
approach, but with adjustments that account for actual operational
conditions in each control period to determine the specific levels
above which additional allowance surrenders would be required. In
addition, EPA is also proposing several additional enhancements to the
EGU trading program in this action, including routine recalibrations of
the total amount of banked allowances, unit-specific backstop daily
emissions rates for certain units, and unit-specific secondary
emissions limitations for units that contribute to exceedances of the
assurance levels, to ensure EGU emissions control operation and
associated air quality improvements. Implementation of the proposed EGU
emissions reductions using a CSAPR NO<INF>X</INF> trading program is
further described in Section VII.B of this proposed rule.
In this action, the EPA is also proposing to establish emissions
limitations for the non-EGU industry sources listed in Table III.A-1.
The EPA has the authority to require emissions limitations from
stationary sources, as well as from other sources and emissions
activities, under CAA section 110(a)(2)(D)(i)(I). The EPA proposes that
requiring NO<INF>X</INF> emissions reductions through emissions rate
limits from certain non-EGU industry sources that the EPA found at Step
3 to be relatively impactful \67\ on downwind air quality is an
effective strategy for reducing regional ozone transport. Therefore,
the EPA proposes NO<INF>X</INF> emissions limitations and associated
compliance requirements for non-EGU sources to ensure the elimination
of significant contribution of ozone precursor emissions required under
the interstate

[[Page 20057]]

transport provision for the 2015 ozone NAAQS.
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\67\ Section III of the Non-EGU Screening Assessment memorandum
in the docket for this rulemaking describes EPA's approach to
evaluating impacts on downwind air quality, considering estimated
total, maximum, and average contributions from each industry and the
total number of receptors with contributions from each industry.
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Finally, the EPA proposes that the control measures determined to
be required for the identified EGU and non-EGU sources apply to both
existing units and any new, modified, or reconstructed units meeting
the applicability criteria established in this proposal. This is
consistent with EPA's transport actions dating back to the
NO<INF>X</INF> SIP Call and the NO<INF>X</INF> Budget Trading Program.
In all CSAPR EGU trading programs, for instance, new EGUs are subject
to the program, and the EPA established provisions for the allocation
of allowances to such units through ``new unit set asides.'' See, e.g.,
86 FR 23126. In the NO<INF>X</INF> SIP Call, the EPA required that
states cover new and existing units in the relevant source sectors
through an enforceable cap or other emissions limitation. See 40 CFR
51.121(f). EPA's approach of including new units in the NO<INF>X</INF>
Budget Trading Program promulgated under EPA's CAA section 126
authority was upheld by the D.C. Circuit in Appalachian Power v. EPA,
249 F.3d 1032 (2001). The EPA explained in its action:

Once EPA has determined that the emissions from the existing
sources in an upwind State already make a significant contribution
to one or more petitioning downwind States, any additional emissions
from a new source in that upwind State would also constitute a
portion of that significant contribution, unless the emissions from
that new source are limited to the level of highly effective
controls.

Id. at 1058 (quoting EPA 1999 RTC at 39). The court affirmed this
approach: ``Indeed, it would be irrational to enable the EPA to make
findings that a group of sources in an upwind state contribute to
downwind nonattainment, but then preclude the EPA from regulating new
sources that contribute to that same pollution.'' Id. at 1057-58. The
EPA proposes to adopt the same approach in this action, because this
reasoning is equally applicable to addressing interstate transport
obligations under CAA section 110(a)(2)(D)(i)(I) for the 2015 ozone
NAAQS.
2. FIP Authority for Each State Covered by the Proposed Rule
On October 1, 2015, the EPA promulgated a revision to the 2015 8-
hour ozone NAAQS, lowering the level of both the primary and secondary
standards to 0.070 parts per million (ppm).\68\ These revisions of the
NAAQS, in turn, established a 3-year deadline for states to provide SIP
submissions addressing infrastructure requirements under CAA sections
110(a)(1) and 110(a)(2), including the good neighbor provision, by
October 1, 2018. If the EPA makes a determination that a state failed
to submit a SIP, or if EPA disapproves a SIP submission, then the EPA
is obligated under CAA section 110(c) to promulgate a FIP for that
state within 2 years. For a more detailed discussion of CAA section 110
authority and timelines, refer to Section III.C of this proposed rule.
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\68\ National Ambient Air Quality Standards for Ozone, Final
Rule, 80 FR 65292 (October 26, 2015). Although the level of the
standard is specified in the units of ppm, ozone concentrations are
also described in parts per billion (ppb). For example, 0.070 ppm is
equivalent to 70 ppb.
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The EPA is proposing this FIP action now to address twenty-six
states' good neighbor obligations for the 2015 ozone NAAQS, but the EPA
will not finalize this FIP action for any state unless and until it has
issued a final finding of failure to submit or a final disapproval of
that state's SIP submission. The EPA is not required to wait to propose
a FIP until after the Agency proposes or finalizes a SIP disapproval or
makes a finding of failure to submit.\69\ CAA section 110(c) authorizes
EPA to promulgate a FIP ``at any time within 2 years'' of a SIP
disapproval or making a finding of failure to submit. Thus, the EPA may
promulgate a FIP contemporaneously with or immediately following
predicate final action on a SIP (or finding no SIP was submitted). In
order to accomplish this, the EPA must necessarily be able to propose a
FIP prior to taking final action to disapprove a SIP or make a finding
of failure to submit. The Supreme Court recognized this in EME Homer
City in holding that the EPA is not obligated to first define a state's
good neighbor obligations or give the state an additional opportunity
to submit an approvable SIP before promulgating a FIP: ``EPA is not
obliged to wait two years or postpone its action even a single day: The
Act empowers the Agency to promulgate a FIP `at any time' within the
two-year limit.'' \70\ Furthermore, the D.C. Circuit in Wisconsin held
that states and EPA are obligated to fully address good neighbor
obligations for ozone ``as expeditiously as practical'' and in no event
later than the next relevant downwind attainment dates found in CAA
section 181(a).\71\ In Maryland v. EPA, the D.C. Circuit made clear
that Wisconsin's and North Carolina's holdings are fully applicable to
the Marginal area attainment date for the 2015 ozone NAAQS,\72\ which
fell on August 3, 2021.\73\ The Wisconsin court emphasized that EPA has
the authority under CAA section 110 to structure and time its actions
in a manner such that the Agency can ensure necessary reductions are
achieved by the downwind attainment dates.\74\
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\69\ The EPA notes there are three consent decrees to resolve
three deadline suits related to EPA's duty to act on good neighbor
SIP submissions for the 2015 ozone NAAQS. In New York et al. v.
Regan, et al. (No. 1:21-CV-00252, S.D.N.Y.), the EPA agreed to take
final action on the 2015 ozone NAAQS good neighbor SIP submissions
from Indiana, Kentucky, Michigan, Ohio, Texas, and West Virginia by
April 30, 2022; however, if the EPA proposes to disapprove any SIP
submissions and proposes a replacement FIP by February 28, 2022,
then EPA's deadline to take final action on that SIP submission is
extended to December 30, 2022. In Downwinders at Risk et al. v.
Regan (No. 21-cv-03551, N.D. Cal.), the EPA agreed to take final
action on the 2015 ozone NAAQS good neighbor SIP submissions from
Alabama, Arkansas, Connecticut, Florida, Georgia, Illinois, Indiana,
Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota,
Mississippi, New Jersey, New York, North Carolina, Ohio, Oklahoma,
South Carolina, Tennessee, Texas, West Virginia, and Wisconsin by
April 30, 2022; however, if the EPA proposes to disapprove any of
these SIP submissions and proposes a replacement FIP by February 28,
2022, then EPA's deadline to take final action on that SIP
submission is December 30, 2022. In this CD, the EPA also agreed to
take final action on Hawaii's SIP submission by April 30, 2022, and
to take final action on the SIP submissions of Arizona, California,
Montana, Nevada, and Wyoming by December 15, 2022. In Our Children's
Earth Foundation v. EPA (No. 20-8232, S.D.N.Y.), the EPA agreed to
take final action on the 2015 ozone NAAQS good neighbor SIP
submission from New York by April 30, 2022; however, if the EPA
proposes to disapprove New York's SIP submission and proposes a
replacement FIP by February 28, 2022, then EPA's deadline to take
final action on New York's SIP submission is extended to December
30, 2022.
\70\ See EPA v. EME Homer City Generation, L.P., 572 U.S. 489,
509 (2014) (citations omitted).
\71\ Wisconsin v. EPA, 938 F.3d 303, 313-14 (D.C. Cir. 2019)
(citing North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
\72\ Maryland v. EPA, 958 F.3d 1185, 1203-04 (D.C. Cir. 2020).
\73\ See CAA section 181(a); 40 CFR 51.1303; Additional Air
Quality Designations for the 2015 Ozone National Ambient Air Quality
Standards, 83 FR 25776 (June 4, 2018, effective August 3, 2018).
\74\ 938 F.3d at 318 (``When EPA determines a State's SIP is
inadequate, EPA presumably must issue a FIP that will bring that
State into compliance before upcoming attainment deadlines, even if
the outer limit of the statutory timeframe gives EPA more time to
formulate the FIP.'') (citing Sierra Club v. EPA, 294 F.3d 155, 161
(D.C. Cir. 2002)).
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On February 22, 2022, the EPA proposed to disapprove 19 good
neighbor SIP submissions (Alabama, Arkansas, Illinois, Indiana,
Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi,
Missouri, New Jersey, New York, Ohio, Oklahoma, Tennessee, Texas, West
Virginia, Wisconsin).\75\ The EPA is proposing to

[[Page 20058]]

promulgate 2015 ozone NAAQS good neighbor FIPs for these same states,
as well as California, Nevada, and Wyoming, but will not finalize a FIP
for any of these states unless and until the EPA formally finalizes
disapprovals of their SIP submittals or, in the event that any of these
states withdraw their good neighbor SIP submissions after this
proposal, makes a finding of failure to submit.\76\ See CAA section
110(c).
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\75\ See 87 FR 9463 (Maryland); 87 FR 9484 (New Jersey, New
York); 87 FR 9498 (Kentucky); 87 FR 9516 (West Virginia); 87 FR 9533
(Missouri); 87 FR 9545 (Alabama, Mississippi, Tennessee); 87 FR 9798
(Arkansas, Louisiana, Oklahoma, Texas); 87 FR 9838 (Illinois,
Indiana, Michigan, Minnesota, Ohio, Wisconsin). EPA has not yet
proposed action on interstate transport SIPs submitted by
California, Nevada, Utah, and Wyoming.
\76\ See the document titled ``Status of CAA Section
110(a)(2)(D)(i)(I) SIP Submissions for the 2015 Ozone NAAQS for
States Covered by the Proposed Federal Implementation Plan
Addressing Regional Ozone Transport for the 2015 Ozone National
Ambient Air Quality Standards,'' included in the docket for this
rulemaking, for additional information on EPA's statutory
authorities for this proposed rule.
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Additionally, the EPA has taken action that has triggered EPA's
obligation under CAA section 110(c) to promulgate FIPs addressing the
good neighbor provision for some other states. On December 5, 2019, the
EPA published a rule finding that seven states (Maine, New Mexico,
Pennsylvania, Rhode Island, South Dakota, Utah, and Virginia) failed to
submit or otherwise make complete submissions that address the
requirements of CAA section 110(a)(2)(D)(i)(I) for the 2015 ozone
NAAQS.\77\ This finding triggered a 2-year deadline for the EPA to
issue FIPs to address the good neighbor provision for these states by
January 6, 2022. As the EPA has subsequently received and taken final
action to approve good neighbor SIPs from Maine, Rhode Island, and
South Dakota,\78\ the EPA currently has authority under the December 5,
2019, finding of failure to submit to issue FIPs for New Mexico,
Pennsylvania, Utah, and Virginia. In this proposal, EPA is issuing
proposed FIP requirements for Pennsylvania, Utah, and Virginia.\79\
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\77\ Findings of Failure To Submit a Clean Air Act Section 110
State Implementation Plan for Interstate Transport for the 2015
Ozone National Ambient Air Quality Standards (NAAQS), 84 FR 66612
(December 5, 2019, effective January 6, 2020).
\78\ Air Plan Approval; Maine and New Hampshire; 2015 Ozone
NAAQS Interstate Transport Requirements, 86 FR 45870 (August 17,
2021); Air Plan Approval; Rhode Island; 2015 Ozone NAAQS Interstate
Transport Requirements, 86 FR 70409 (December 10, 2021);
Promulgation of State Implementation Plan Revisions; Infrastructure
Requirements for the 2015 Ozone National Ambient Air Quality
Standards; South Dakota; Revisions to the Administrative Rules of
South Dakota, 85 FR 29882 (May 19, 2020).
\79\ The EPA has not yet taken action on a subsequent good
neighbor SIP submission from New Mexico or Utah; EPA is not
including New Mexico in this proposed action.
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C. Other CAA Authorities for This Action

1. Correction of EPA's Determination Regarding Delaware's SIP
Submission and Its Impact on EPA's FIP Authority for Delaware
In 2020, the EPA approved an infrastructure SIP submission from
Delaware for the 2015 ozone NAAQS, which in part addressed the good
neighbor provision at CAA section 110(a)(2)(D)(i)(I).\80\ The EPA
concluded that, based on the modeling results presented in a 2018 March
memorandum and using a 2023 analytic year, Delaware's largest impact on
any potential downwind nonattainment or maintenance receptor was less
than 1 percent of the NAAQS.\81\ As a result, the EPA found that
Delaware would not significantly contribute to nonattainment or
interfere with maintenance in any other state.\82\ Therefore, the EPA
approved the portion of Delaware's infrastructure SIP that addressed
CAA section 110(a)(2)(D)(i)(I) for the 2015 ozone NAAQS.
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\80\ Approval and Promulgation of Air Quality Implementation
Plans; Delaware; Infrastructure Requirements for the 2015 Ozone
Standard and Revisions to Modeling Requirements, 85 FR 25307 (May 1,
2020).
\81\ ``Technical Support Document for the Delaware State
Implementation Plan for the Infrastructure Requirements for the 2015
Ozone Standard and Revisions to Modeling Requirements'' at 16,
available in Docket No. EPA-R03-OAR-2019-0663.
\82\ Id. at 17. Based on the 2023 modeling from the 2018
memorandum, Delaware was expected in 2023 to have a 0.40 ppb impact
on a potential nonattainment receptor in Fairfield, Connecticut
(Site ID 90019003) and a 0.38 ppb impact at a potential maintenance
receptor in Queens, New York (Site ID 360810124).
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Subsequent to the release of the modeling data shared in the March
2018 memorandum and EPA's approval of Delaware's 2015 ozone NAAQS good
neighbor SIP submission, the EPA performed updated modeling, as
described in Section V of this proposed rule. The data from this
updated air quality modeling now show that Delaware is projected to
contribute more than 1 percent of the NAAQS to downwind receptors in
Bristol, Pennsylvania, in the 2023 analytic year.\83\ Therefore, in
light of the modeling data, EPA is proposing to find that its approval
of Delaware's 2015 ozone NAAQS infrastructure SIP submission, with
regard only to the portion addressing the good neighbor provision at
CAA section 110(a)(2)(D)(i)(I), was in error. Section 110(k)(6) of the
CAA gives the Administrator authority, without any further submission
from a state, to revise certain prior actions, including actions to
approve SIPs, upon determining that those actions were in error.\84\
The modeling data demonstrate that EPA's prior conclusion that Delaware
will not significantly contribute to nonattainment or interfere with
maintenance in any other state in the 2023 analytic year was incorrect,
which means that EPA's approval of Delaware's good neighbor SIP
submission was in error.
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\83\ The contribution from Delaware in 2023 to the receptor in
Bristol, Pennsylvania, is 1.36 ppb.
\84\ See, e.g., 86 FR 23054, 23068 (error correcting prior
approval of Kentucky's transport SIP submission for the 2008 ozone
NAAQS to a disapproval and simultaneously promulgating FIP on the
basis of the Wisconsin and New York decisions remanding CSAPR Update
and vacating CSAPR Close-Out and new information establishing
Kentucky was linked to downwind receptors).
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Therefore, the EPA proposes to correct the error in Delaware's good
neighbor SIP approval. This error correction under CAA section
110(k)(6) would revise the approval of the portion of Delaware's 2015
ozone NAAQS infrastructure SIP that addresses CAA section
110(a)(2)(D)(i)(I) to a disapproval and rescind any statements that the
portion of Delaware's infrastructure SIP submission that addresses CAA
section 110(a)(2)(D)(i)(I) satisfies the requirements of the good
neighbor provision. The EPA is not proposing to correct the elements of
Delaware's 2015 ozone NAAQS infrastructure SIP that do not address CAA
section 110(a)(2)(D)(i)(I).
As discussed in greater detail in the sections that follow, the EPA
is proposing to determine that there are additional emissions
reductions that are required for Delaware to satisfy its good neighbor
obligations for the 2015 ozone NAAQS. The analysis on which the EPA
proposes this conclusion for Delaware is the same, regionally
consistent analytical framework on which the Agency proposes FIP action
for the other states included in this proposal. The Agency recognizes
that it is possible, based on updated information for the final rule--
as applied within a regionally consistent analytical framework--that
Delaware (or other states for which the EPA proposes FIPs in this
action) may be found to have no further interstate transport obligation
for the 2015 ozone NAAQS. If such a circumstance were to occur, the EPA
anticipates that it would not finalize this proposed error correction
or may modify the error correction such that the approval of Delaware's
portion of the SIP as it relates to its good neighbor obligations may
be affirmed.

[[Page 20059]]

2. Application of Rule in Indian Country and Necessary or Appropriate
Finding
The EPA proposes that this rule will be applicable in all areas of
Indian country (as defined at 18 U.S.C. 1151) within the covered
geography of the proposal, as defined below. Currently, certain areas
of Indian country within the geography of the proposal are subject to
state implementation planning authority. Other areas of Indian country
within that geography would be subject to tribal planning authority,
although none of the relevant tribes have as yet sought eligibility to
administer a tribal plan to implement the good neighbor provision.\85\
As described later, the EPA is proposing to include all areas of Indian
country within the covered geography, notwithstanding whether those
areas are currently subject to a state's implementation planning
authority or the potential planning authority of a tribe.
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\85\ We note that, consistent with EPA's prior good neighbor
actions in California, the regulatory ozone monitor located on the
Morongo Band of Mission Indians (``Morongo'') reservation is a
projected downwind receptor in 2023. See monitoring site 060651016
in Table V.D-1. We also note that the Temecula, California
regulatory ozone monitor is a projected downwind receptor in 2023
and in past regulatory actions has been deemed representative of air
quality on the Pechanga Band of Luise[ntilde]o Indians
(``Pechanga'') reservation. See, e.g., Approval of Tribal
Implementation Plan and Designation of Air Quality Planning Area;
Pechanga Band of Luise[ntilde]o Mission Indians, 80 FR 18120, at
18121-18123 (April 3, 2015); see also monitoring site 060650016 in
Table V.D-1. The presence of receptors on, or representative of, the
Morongo and Pechanga reservations does not trigger obligations for
the Morongo and Pechanga Tribes. Nevertheless, these receptors are
relevant to EPA's assessment of any linked upwind states' good
neighbor obligations. See, e.g., Approval and Promulgation of Air
Quality State Implementation Plans; California; Interstate Transport
Requirements for Ozone, Fine Particulate Matter, and Sulfur Dioxide,
83 FR 65093 (December 19, 2018). Under 40 CFR 49.4(a), tribes are
not subject to the specific plan submittal and implementation
deadlines for NAAQS-related requirements, including deadlines for
submittal of plans addressing transport impacts.
---------------------------------------------------------------------------

With respect to areas of Indian country not currently subject to a
state's implementation planning authority--i.e., Indian reservation
lands (with the partial exception of reservation lands located in the
State of Oklahoma, as described further below) and other areas of
Indian country over which the EPA or a tribe has demonstrated that a
tribe has jurisdiction--the EPA here proposes a ``necessary or
appropriate'' finding that direct federal implementation of the rule's
requirements is warranted under CAA section 301(d)(4) and 40 CFR
49.11(a) (the areas of Indian country subject to this finding are
referred to later as the 301(d) FIP areas). Indian Tribes may, but are
not required to, submit tribal plans to implement CAA requirements,
including the good neighbor provision. Section 301(d) of the CAA and 40
CFR part 49 authorize the Administrator to treat an Indian Tribe in the
same manner as a state (i.e., TAS) for purposes of developing and
implementing a tribal plan implementing good neighbor obligations. See
40 CFR 49.3; see also ``Indian Tribes: Air Quality Planning and
Management,'' hereafter ``Tribal Authority Rule,'' (63 FR 7254,
February 12, 1998). The EPA is authorized to directly implement the
good neighbor provision in the 301(d) FIP areas when it finds,
consistent with the authority of CAA section 301--which the EPA has
exercised in 40 CFR 49.11--that it is necessary or appropriate to do
so.\86\
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\86\ See Arizona Pub. Serv. Co. v. U.S. E.P.A., 562 F.3d 1116,
1125 (10th Cir. 2009) (stating that 40 CFR 49.11(a) ``provides the
EPA discretion to determine what rulemaking is necessary or
appropriate to protect air quality and requires the EPA to
promulgate such rulemaking''); Safe Air For Everyone v. U.S. Env't
Prot. Agency, No. 05-73383, 2006 WL 3697684, at *1 (9th Cir., Dec.
15, 2006) (``The statutes and regulations that enable EPA to
regulate air quality on Indian reservations provide EPA with broad
discretion in setting the content of such regulations.'').
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The EPA proposes in this action to find that it is both necessary
and appropriate to regulate all new and existing EGU and non-EGU
sources meeting the applicability criteria set forth in this proposed
rule in all of the 301(d) FIP areas that are located within the
geographic scope of coverage of the rule. For purposes of this proposed
finding, the geographic scope of coverage of the rule means the areas
of the United States encompassed within the borders of the states EPA
has determined to be linked at Steps 1 and 2 of the 4-step interstate
transport framework.\87\ For EGU applicability criteria, see Section
VII.B of this proposed rule; for non-EGU applicability criteria, see
Section VII.C of this proposed rule. To EPA's knowledge, only one
existing EGU or non-EGU source is located within the 301(d) FIP areas:
The Bonanza Power Plant, an EGU source, located on the Uintah and Ouray
Reservation, geographically located within the borders of Utah.
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\87\ With respect to any non-EGU sources located in the 301(d)
FIP areas, the geographic scope of coverage of this proposed rule
does not include those states for which EPA proposes to find, based
on air quality modeling, that no further linkage exists by the 2026
analytic year at Steps 1 and 2. The states no longer projected to be
linked in 2026 are Alabama, Delaware, and Tennessee.
---------------------------------------------------------------------------

This proposed finding is consistent with EPA's prior good neighbor
rules. In prior rulemakings under the good neighbor provision, the EPA
has included all areas of Indian country within the geographic scope of
those FIPs, such that any new or existing sources meeting the rules'
applicability criteria would be subject to the rule irrespective of
whether subject to state or tribal underlying CAA planning authority.
In CSAPR, the CSAPR Update, and the Revised CSAPR Update, the scope of
the emissions trading programs established for EGUs extended to cover
all areas of Indian country located within the geographic boundaries of
the covered states. In these rules, at the time of their promulgation,
no existing units were located in the covered areas of Indian country;
under the general applicability criteria of the trading programs,
however, any new sources locating in such areas would become subject to
the programs. Thus, EPA established a separate allowance allocation
that would be available for any new units locating in any of the
relevant areas of Indian country. See, e.g., 76 FR at 48293 (describing
the CSAPR methodology of allowance allocation under the ``Indian
country new unit set-aside'' provisions); see also id. at 48217
(explaining EPA's source of authority for directly regulating in
relevant areas of Indian country as necessary or appropriate). Further,
in any action in which the EPA subsequently approved a state's SIP
submittal to partially or wholly replace the provisions of a CSAPR FIP,
EPA has clearly delineated that it will continue to administer the
Indian country new unit set aside for sources in any areas of Indian
country geographically located within a state's borders and not subject
to that state's CAA planning authority, and the state may not exercise
jurisdiction over any such sources. See, e.g., 82 FR 46674, 46677
(October 6. 2017) (approving Alabama's SIP submission establishing a
state CSAPR trading program for ozone season NO<INF>X,</INF> but
providing, ``The SIP is not approved to apply on any Indian reservation
land or in any other area where EPA or an Indian tribe has demonstrated
that a tribe has jurisdiction.'').
In this proposed rule, the EPA proposes to take an approach similar
to the prior CSAPR rulemakings with respect to regulating sources in
the 301(d) FIP areas.\88\ The EPA believes this approach is necessary
and appropriate for several reasons. First, the purpose of this rule is
to address the

[[Page 20060]]

interstate transport of ozone on a national scale, and the technical
record establishes that the nonattainment and maintenance receptors
located throughout the country are impacted by sources of ozone
pollution on a broad geographic scale. The upwind regions associated
with each receptor typically span at least two, and often far more,
states. Within the broad upwind region covered by this proposal, the
EPA proposes to apply--consistent with the methodology of allocating
upwind responsibility in prior transport rules going back to the
NO<INF>X</INF> SIP Call--a uniform level of control stringency. (See
Section VI of this proposed rule for a discussion of EPA's
determination of control stringency for this proposal.) Within this
approach, consistency in rule requirements across all jurisdictions is
vital in ensuring the remedy for ozone transport is, in the words of
the Supreme Court, ``efficient and equitable,'' 572 U.S. 489, 519. In
particular, as the Supreme Court found in EME Homer City Generation,
allocating responsibility through uniform levels of control across the
entire upwind geography is ``equitable'' because, by imposing uniform
cost thresholds on regulated States, EPA's rule subjects to stricter
regulation those States that have done relatively less in the past to
control their pollution. Upwind States that have not yet implemented
pollution controls of the same stringency as their neighbors will be
stopped from free riding on their neighbors' efforts to reduce
pollution. They will have to bring down their emissions by installing
devices of the kind in which neighboring States have already invested.
Id.
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\88\ See Section VII.B.9 of this action for a discussion of
revisions that are proposed in this rulemaking regarding the point
in the allowance allocation process at which the EPA would establish
set-asides of allowances for units in Indian country not subject to
a state's CAA implementation planning authority.
---------------------------------------------------------------------------

In the context of addressing regional-scale ozone transport in this
proposal, a uniform level of stringency that extends to and includes
the 301(d) FIP areas geographically located within the boundaries of
the linked upwind states carries significant force. Failure to include
all such areas within the scope of the rule creates a significant risk
that these areas may be targeted for the siting of facilities emitting
ozone-precursor pollutants, in order to avoid the regulatory costs that
would be imposed under this proposed rule in the surrounding areas of
state jurisdiction. Electricity generation or the production of other
goods and commodities may become more cost-competitive at any EGUs or
non-EGUs not subject to the rule but located in a geography where all
surrounding facilities in the same industrial category are subject to
the rule. For instance, the affected EGU source located on the Uintah
and Ouray Reservation of the Ute Tribe is in an area that is
interconnected with the western electricity grid and is owned and
operated by an entity that generates and provides electricity to
customers in several states. It is both necessary and appropriate, in
EPA's view, to avoid creating, via this proposed rule, a structure of
incentives that may cause generation or production--and the associated
NO<INF>X</INF> emissions--to shift into the 301(d) FIP areas to escape
regulation needed to eliminate interstate transport under the good
neighbor provision.
The EPA believes it is appropriate to propose direct federal
implementation of the proposed rule's requirements in the 301(d) FIP
areas at this time rather than at a later date. Tribes have the
opportunity to seek TAS and to undertake tribal implementation plans
under the CAA. To date, the one tribe which could develop and seek
approval of a tribal implementation plan to address good neighbor
obligations with respect to an existing EGU in the 301(d) FIP areas for
the 2015 ozone NAAQS (or for any other NAAQS), the Ute Indian Tribe of
the Uintah and Ouray Reservation, has not expressed an intent to do so.
Nor has the EPA heard such intentions from any other tribe, and it
would not be reasonable to expect tribes to undertake that planning
effort, particularly when no existing sources are currently located on
their lands. Further, the EPA is mindful that under court precedent,
the EPA and states generally bear an obligation to fully implement any
required emissions reductions to eliminate significant contribution
under the good neighbor provision as expeditiously as practicable and
in alignment with downwind areas' attainment schedule under the Act. As
discussed in Section VII.A of this proposed rule, the EPA anticipates
implementing certain required emissions reductions by the 2023 ozone
season, the last full ozone season before the 2024 Moderate area
attainment date, and other key additional required emissions reductions
by the 2026 ozone season, the last full ozone season before the 2027
Serious area attainment date. Absent this proposed federal
implementation plan in the 301(d) FIP areas, NO<INF>X</INF> emissions
from any existing or new EGU or non-EGU sources located in, or locating
in, the 301(d) FIP areas within the covered geography of the rule would
remain unregulated and could potentially increase. This would be
inconsistent with EPA's overall goal of aligning good neighbor
obligations with the downwind areas' attainment schedule and to achieve
emissions reductions as expeditiously as practicable.
Further, the EPA recognizes that Indian country, including the
301(d) FIP areas, is often home to communities with environmental
justice concerns, and these communities may bear a disproportionate
level of pollution burden as compared with other areas of the United
States. EPA's draft Strategic Plan for Fiscal Year 2022-2026 \89\
includes an objective to promote environmental justice at the Federal,
Tribal, state, and local levels and states: ``Integration of
environmental justice principles into all EPA activities with Tribal
governments and in Indian country is designed to be flexible enough to
accommodate EPA's Tribal program activities and goals, while at the
same time meeting the Agency's environmental justice goals.'' By
including all areas of Indian country within the covered geography of
the rule, the EPA is advancing environmental justice, lowering
pollution burdens in such areas, and preventing the potential for
``pollution havens'' to form in such areas as a result of facilities
seeking to locate there to avoid the requirements that would otherwise
apply outside of such areas under this proposed rule.
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\89\ <a href="https://www.epa.gov/system/files/documents/2021-10/fy-2022-2026-epa-draft-strategic-plan.pdf">https://www.epa.gov/system/files/documents/2021-10/fy-2022-2026-epa-draft-strategic-plan.pdf</a>
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Therefore, in order to ensure timely alignment of all needed
emissions reductions with the larger timetable of this proposed rule,
to ensure equitable distribution of the upwind pollution reduction
obligation across all upwind jurisdictions, to avoid perverse economic
incentives to locate sources of ozone-precursor pollution in the 301(d)
FIP areas, and to deliver greater environmental justice to tribal
communities in line with Executive Order 13985: Advancing Racial Equity
and Support for Underserved Communities Through the Federal
Government,\90\ EPA proposes to find it both necessary and appropriate
that all existing and new EGU and non-EGU sources that are located in
the 301(d) FIP areas within the geographic boundaries of the covered
states, and which would be subject to this rule if located within areas
subject to state CAA planning authority, should be included in this
rule. The EPA proposes this finding under section 301(d)(4) of the Act
and 40 CFR 49.11. Further, in order to avoid ``unreasonable delay'' in

[[Page 20061]]

promulgating this FIP, as required under section 49.11, the EPA
believes it is appropriate to make this proposed finding now, in order
to align emissions reduction obligations for any covered new or
existing sources in the 301(d) FIP areas with the larger schedule of
reductions under this proposed rule. Because all other covered EGU and
non-EGU sources within the geography of this proposed rule would be
subject to emissions reductions of uniform stringency beginning in the
2023 ozone season, and as necessary to fully and expeditiously address
good neighbor obligations for the 2015 ozone NAAQS, there is little
benefit to be had by not proposing to include the 301(d) FIP areas in
this rule now and a potentially significant downside to not doing so.
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\90\ Executive Order 13985 (January 20, 2021): <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executiveorder-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executiveorder-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/</a>.
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The Agency recognizes that Tribal governments may still choose to
seek TAS to develop a Tribal plan with respect to the obligations under
this proposed rule, and this proposed determination does not preclude
the tri

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