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Rule2022-18318

Deadlines for Submission and Recordation of Allowance Allocations Under the Cross-State Air Pollution Rule (CSAPR) Trading Programs and the Texas SO2 Trading Program

Primary source

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Published

August 26, 2022

Effective

August 26, 2022

Issuing agencies

Environmental Protection Agency

Abstract

The Environmental Protection Agency (EPA) is revising certain administrative deadlines under seven allowance trading programs for emissions of sulfur dioxide (SO<INF>2</INF>) and nitrogen oxides (NO<INF>X</INF>).

Full Text

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<title>Federal Register, Volume 87 Issue 165 (Friday, August 26, 2022)</title>
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[Federal Register Volume 87, Number 165 (Friday, August 26, 2022)]
[Rules and Regulations]
[Pages 52473-52481]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-18318]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-HQ-OAR-2021-0668; FRL-8670.1-01-OAR]

Deadlines for Submission and Recordation of Allowance Allocations
Under the Cross-State Air Pollution Rule (CSAPR) Trading Programs and
the Texas SO2 Trading Program

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is revising certain
administrative deadlines under seven allowance trading programs for
emissions of sulfur dioxide (SO<INF>2</INF>) and nitrogen oxides
(NO<INF>X</INF>).

DATES: This final rule is effective on August 26, 2022.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2021-0668. All documents in the docket are
listed on the <a href="http://www.regulations.gov">http://www.regulations.gov</a> website. Although listed in
the index, some information is not publicly available, e.g.,
Confidential Business Information or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, is not placed on the internet and will be publicly available
only in hardcopy form. Publicly available docket materials are
available electronically through <a href="http://www.regulations.gov">http://www.regulations.gov</a>.

FOR FURTHER INFORMATION CONTACT: David Lifland, Clean Air Markets
Division, Office of Atmospheric Programs, Office of Air and Radiation,
U.S. Environmental Protection Agency, Mail Code 6204M, 1200
Pennsylvania Avenue NW, Washington, DC 20460; telephone: (202) 343-
9151; email: <a href="/cdn-cgi/l/email-protection#87ebeee1ebe6e9e3a9e3e6f1eee3c7e2f7e6a9e0e8f1"><span class="__cf_email__" data-cfemail="a9c5c0cfc5c8c7cd87cdc8dfc0cde9ccd9c887cec6df">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:
Executive Summary: The Environmental Protection Agency (EPA) is
revising certain administrative deadlines under seven allowance trading
programs for emissions of sulfur dioxide (SO<INF>2</INF>) and nitrogen
oxides (NO<INF>X</INF>). First, under the Cross-State Air Pollution
Rule (CSAPR) NO<INF>X</INF> Ozone Season Group 3 Trading Program, the
deadline for the EPA to record advance allocations of allowances for
the 2023 and 2024 control periods is being revised to September 1,
2023. Second, under all six CSAPR trading programs as well as the Texas
SO<INF>2</INF> Trading Program, the deadlines for the EPA to record
advance allocations of allowances for control periods in 2025 and later
years are being revised to July 1 of the year immediately before the
year of each such control period. Finally, the latest approvable
deadlines for states to submit the amounts of state-determined advance
allocations of allowances used in the CSAPR trading programs to the EPA
under state implementation plan (SIP) revisions are being revised to
June 1 of the year immediately before the year of each such control
period. The revisions being finalized in this rule do not alter the
recipients or amounts of any allowance allocations under any trading
program and do not affect the recordation schedules for any allowances
that are reserved for allocation after the end of the control period
for which the allowances are being issued. On April 26, 2022, the EPA
proposed to revise these administrative deadlines as part of a larger
proposal (published at 87 FR 20036) that addresses multiple states'
obligations to mitigate interstate air pollution with respect to the
2015 ozone national ambient air quality standards (NAAQS). The Agency
is not taking final action with respect to the remainder of the April
2022 proposed rule at this time.

Table of Contents

I. General
A. Potentially Affected Entities
B. Statutory Authority
II. Discussion of Revisions
A. Background
B. Deadlines for Recordation of Allowance Allocations

[[Page 52474]]

C. Deadlines for Submission of State-Determined Allowance
Allocations
III. Final Action
IV. Expected Impacts
V. 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
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
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 and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
L. Determination Under CAA Section 307(b)

I. General

A. Potentially Affected Entities

Some of the regulatory revisions finalized in this rule affect the
EPA by extending the deadlines for the Agency to perform certain
allowance recordation activities under the CSAPR trading programs and
the Texas SO<INF>2</INF> Trading Program. The remaining regulatory
revisions potentially affect states whose sources participate in one or
more CSAPR trading programs, if the states have chosen or choose in the
future to allocate allowances among their sources pursuant to SIP
revisions, by extending the latest approvable deadlines for the states
to submit the amounts of the state-determined allocations to the EPA.
The following states are potentially affected by the latter revisions:
Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri,
Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma,
Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West
Virginia, and Wisconsin.
The sources participating in the trading programs in each covered
state are generally fossil fuel-fired boilers and combustion turbines
that at any time on or after January 1, 2005, serve electricity
generators larger than 25 megawatts producing electricity for sale.\1\
However, as discussed in Section IV of this rule, the regulatory
revisions finalized in this rule will have no substantive impact on
participating sources because the revisions do not alter which sources
are required to participate in any of the trading programs, the
regulatory requirements applicable to the participating sources, or the
amounts of allowances allocated to any source for use in any control
period.
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\1\ See, e.g., 40 CFR 97.1004. The sources participating in the
Texas SO<INF>2</INF> Trading Program are identified by a list in the
regulations rather than by applicability criteria, see 40 CFR 97.904
and 97.911(a)(1), but all of these sources also participate in one
of the CSAPR trading programs.
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B. Statutory Authority

Statutory authority to issue the regulatory revisions finalized in
this rule is provided by the same Clean Air Act (CAA) provisions that
provided authority to issue the regulations being amended: CAA section
110(a) and (c), 42 U.S.C. 7410(a) and (c) (SIP and federal
implementation plan (FIP) requirements, including requirements for
mitigation of interstate air pollution); CAA section 169A, 42 U.S.C.
7491 (visibility protection); and CAA section 301, 42 U.S.C. 7601
(general rulemaking authority). Because the revisions amend FIP
provisions issued under CAA section 110(c), the rulemaking procedural
requirements at CAA section 307(d), 42 U.S.C. 7607(d), apply to this
action.

II. Discussion of Revisions

A. Background

The EPA currently administers seven similarly structured allowance
trading programs for electricity generating units under regulations set
forth at 40 CFR part 97, subparts AAAAA through GGGGG.\2\ Six of the
programs were created as mechanisms to address obligations of the
covered states--that is, the states where the participating sources are
located--under CAA section 110(a)(2)(D)(i)(I), 42 U.S.C.
7410(a)(2)(D)(i)(I), known as the good neighbor provision, with respect
to the 1997 and 2006 fine particulate matter NAAQS and the 1997 and
2008 ozone NAAQS. These six programs, collectively referred to in this
rule as the CSAPR trading programs, are the CSAPR NO<INF>X</INF> Annual
Trading Program, the CSAPR NO<INF>X</INF> Ozone Season Group 1 Trading
Program, the CSAPR SO<INF>2</INF> Group 1 Trading Program, and the
CSAPR SO<INF>2</INF> Group 2 Trading Program, all established in the
original CSAPR; \3\ the CSAPR NO<INF>X</INF> Ozone Season Group 2
Trading Program, established in the CSAPR Update; \4\ and the CSAPR
NO<INF>X</INF> Ozone Season Group 3 Trading Program, established in the
Revised CSAPR Update.\5\ The seventh program is the Texas
SO<INF>2</INF> Trading Program, which was created to address certain
visibility protection requirements under CAA section 169A but shares
many structural elements and is administered in parallel with the CSAPR
trading programs.\6\ All seven trading programs were promulgated as FIP
provisions under CAA section 110(c).
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\2\ This final rule does not amend any provision of the
additional SO<INF>2</INF> allowance trading program that the EPA
administers under the Acid Rain Program regulations at 40 CFR parts
72-78.
\3\ 76 FR 48208 (August 8, 2011).
\4\ 81 FR 74504 (October 26, 2016).
\5\ 86 FR 23054 (April 30, 2021).
\6\ 82 FR 48234 (October 17, 2017); affirmed with amendments, 85
FR 49170 (August 12, 2020). The EPA has convened a proceeding to
reconsider the amended rule. See EPA Motion to Govern, National
Parks Conservation Assn. v. EPA, No. 20-1408 (D.C. Cir. filed June
28, 2021). This final rule has no bearing on the reconsideration
proceeding.
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The functions that the EPA performs to administer the seven trading
programs include allocation and recordation of allowances. Allocation
is the process of determining the shares of the overall quantities of
allowances issued for a given control period to be initially credited
to various recipients.\7\ The amounts of most allowance allocations are
determined before (or sometimes during) the control period in question.
These allocations are referred to in this rule as advance allocations
to distinguish them from other allowance allocations whose amounts are
determined after the end of each control period.\8\ Under all seven
trading programs, the EPA determines the default amounts of the advance
allocations of allowances to the sources in each covered state from the
respective state's emissions budget for each control period. However,
for most control periods under the CSAPR trading programs, the Agency
also allows covered states to replace the default EPA-determined
advance allocations with state-determined advance allocations pursuant
to approved SIP revisions.\9\
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\7\ See, e.g., 40 CFR 97.1002 (definition of allocation).
\8\ Under the CSAPR trading programs, some allowances issued for
each control period are reserved in set-asides for allocation after
the end of the control period. Allowances reserved in the Texas
SO<INF>2</INF> Trading Program's supplemental allowance pool are
allocated on a parallel schedule. This final rule does not amend any
provisions relating to these reserved allowances.
\9\ See, e.g., 40 CFR 52.38(b)(11)-(12) (2021). A state may also
choose to distribute allowances through an auction process instead
of through a no-cost allocation process. Id. For simplicity, in this
rule the EPA uses the term ``state-determined allocations'' to
include the results of any state auction process because the same
deadlines apply regardless of the state's choice of process.
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Recordation is the process of moving allowances into, out of, or
between

[[Page 52475]]

accounts in the EPA's Allowance Management System for purposes of
allocation, auction, transfer, or deduction.\10\ Recordation is
performed exclusively by the EPA.\11\ The regulations for each trading
program include deadlines for the Agency to record the amounts of
advance allocations of allowances issued for each control period in
sources' compliance accounts. To promote regulatory clarity and
minimize compliance and administrative burdens for sources and the EPA,
the recordation deadlines are generally parallel across the seven
trading programs. In addition, for states that choose to provide state-
determined allowance allocations pursuant to SIP revisions, the
regulations governing the approvability of the SIP revisions require
the states' rules to include deadlines for submitting the amounts of
the advance allocations to the EPA that are coordinated with the
Agency's deadlines for recording the allowances in sources' compliance
accounts. When the proposal underlying this final rule was issued, the
next deadline for the EPA to record the amounts of advance allocations
of allowances that had not already been recorded was July 1, 2022,
under all seven trading programs, and the associated latest approvable
deadline for states to submit the amounts of any state-determined
advance allocations to the EPA was June 1, 2022.
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\10\ See, e.g., 40 CFR 97.1002 (definition of recordation).
\11\ In some cases, the EPA records allowance transactions
automatically in response to electronically submitted instructions
from representatives for the accounts where the allowances are held.
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In April 2022, the EPA published a proposal to address multiple
states' obligations under the good neighbor provision with respect to
the 2015 ozone NAAQS.\12\ Under the proposal, the CSAPR NO<INF>X</INF>
Ozone Season Group 3 Trading Program would be revised in a number of
ways. Among other things, the program would be expanded to apply to
sources in additional states, the existing state emissions budgets and
default unit-level allowance allocations for the 2023 and 2024 control
periods would be updated, and starting with the 2025 control period the
state emissions budgets and default unit-level allowance allocations
would be dynamically determined in the year immediately before the year
of each control period according to procedures to be set forth in the
final revised regulations.\13\ In conjunction with these proposed
revisions, the EPA proposed to revise that trading program's
administrative deadlines for the Agency to record advance allocations
of allowances and the latest approvable deadlines for states to submit
the amounts of any state-determined advance allocations to the EPA
pursuant to SIP revisions.\14\ The proposal also includes parallel
proposed revisions to the recordation and latest approvable submission
deadlines for the other five CSAPR trading programs and the Texas
SO<INF>2</INF> Trading Program.\15\ Under the proposed revised
schedules, there would be no July 1, 2022, deadline to record advance
allocations of allowances for use in any of the seven trading programs.
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\12\ 87 FR 20036 (April 6, 2022).
\13\ 87 FR 20115-19 (state emissions budgets) and 20128-30
(unit-level allocations).
\14\ 87 FR 20129-30.
\15\ 87 FR 20140.
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Following an extension, the public comment period on the April 2022
proposal closed on June 21, 2022.\16\ No comments were received
addressing the proposed revisions to the recordation deadlines and
latest approvable submission deadlines,\17\ and the EPA is taking this
action to expeditiously resolve the differences between the deadlines
as previously in effect and the proposed revised deadlines included in
the proposal. The Agency is not responding to comments or taking action
on any other aspects of the April 2022 proposal at this time.
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\16\ 87 FR 29108 (May 12, 2022).
\17\ One comment includes a description of the proposed
recordation deadline revisions under the CSAPR NO<INF>X</INF> Ozone
Season Group 3 Trading Program, but the comment concerns the timing
of information on the amounts of state emissions budgets and unit-
level allocations under that trading program, not the timing of
recordation of allowances in sources' compliance accounts. See
Comments of Basin Electric Power Cooperative, EPA-HQ-OAR-2021-0668-
0547, at 60.
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B. Deadlines for Recordation of Allowance Allocations

The regulations for each of the seven trading programs addressed in
this rule include schedules for the EPA to record advance allocations
of allowances issued for each control period. Under the regulations for
the CSAPR NO<INF>X</INF> Ozone Season Group 3 Trading Program in effect
at the time of the April 2022 proposal, advance allocations of
allowances issued for control periods through 2022 had already been
recorded; the recordation deadline for advance allocations for the 2023
and 2024 control periods was July 1, 2022; the recordation deadline for
advance allocations for the 2025 and 2026 control periods was July 1,
2023; and the recordation deadlines for advance allocations for control
periods in 2027 and later years were July 1 of the third year before
the year of each such control period.\18\ In the April 2022 proposal,
the EPA proposed to revise the recordation deadline for advance
allocations for the 2023 and 2024 control periods to the date 30 days
after the effective date of a final rule and to revise the recordation
deadlines for advance allocations for control periods in 2025 and later
years to July 1 of the year immediately before the year of each such
control period.\19\
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\18\ See 40 CFR 97.1021(a)-(f) (2021).
\19\ 87 FR 20129-30. The EPA notes that under the proposal, the
recordation deadline for the 2024 advance allocations would be
extended for several months if a state provides a timely letter of
intent to submit state-determined allocations for that control
period. See 87 FR at 20150.
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Under the regulations for the other five CSAPR trading programs and
the Texas SO<INF>2</INF> Trading Program in effect at the time of the
April 2022 proposal, advance allocations of allowances issued for
control periods through 2024 had already been recorded and the
recordation deadlines for advance allocations for control periods in
2025 and later years were July 1 of the third year before the year of
each such control period (e.g., the deadline for recording 2025 advance
allocations was July 1, 2022).\20\ In the April 2022 proposal, the EPA
proposed to revise the recordation deadlines for advance allocations
for control periods in 2025 and later years to match the recordation
deadlines established in a final rule for the CSAPR NO<INF>X</INF>
Ozone Season Group 3 Trading Program for the same control periods, such
that if the remainder of the proposal was finalized generally as
proposed, the recordation deadlines for advance allocations for control
periods in 2025 and later years under all seven trading programs would
be July 1 of the year immediately before the year of each such control
period.\21\
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\20\ See, e.g., 40 CFR 97.821(a)-(f) (2021).
\21\ 87 FR 20140.
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The April 2022 proposal discussed several reasons supporting the
proposed revisions to recordation deadlines. First, with respect to the
CSAPR NO<INF>X</INF> Ozone Season Group 3 Trading Program, the deadline
revisions would be necessary to accommodate proposed updates to the
amounts of the advance allocations of allowances to be recorded for the
2023 and 2024 control periods and proposed changes to the schedule for
determining the amounts of the advance allocations for later control
periods.\22\ Second, with respect to the other six trading programs,
maintaining consistency in recordation deadlines

[[Page 52476]]

across the various trading programs to the extent possible is expected
to minimize the time and cost expended by sources to understand and
comply with multiple trading programs and would support greater
administrative efficiency by the EPA.\23\ Third, lowering the number of
future control periods for which allowances are recorded in advance
will reduce the likelihood that the Agency might need to recall
already-recorded allowances as part of a transition to new regulatory
requirements in a future rulemaking.\24\ The EPA also observed that
lowering the number of future control periods for which allowances are
recorded in advance is not expected to adversely impact allowance
market liquidity, because the historical data on transfers of recorded
allowances between accounts in the EPA's Allowance Management System
show few arms-length transfers of allowances issued for control periods
more than one control period in the future.\25\
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\22\ 87 FR 20130.
\23\ 87 FR 20140.
\24\ Id.
\25\ Id.
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Although the April 2022 proposal's rationale for the proposed
recordation deadline revisions was provided in the context of a larger
set of proposed trading program revisions, the same rationale supports
finalizing the recordation deadline revisions on a stand-alone basis
while the Agency continues to work toward a final rule addressing the
remainder of the proposal in light of the comments received. With
respect to the proposed revision to the deadline for recording the 2023
and 2024 advance allocations of allowances used in the CSAPR
NO<INF>X</INF> Ozone Season Group 3 Trading Program, finalizing a
revised recordation deadline at this time, before issuance of a final
rule addressing the remainder of the proposal, would accommodate
updates to the allocation amounts if such updates are in fact finalized
and would thereby facilitate an orderly implementation process for such
a final rule. Conversely, if the Agency did not finalize a recordation
deadline revision at this time and instead were to record advance
allocations of allowances for the 2023 and 2024 control periods before
completing consideration of the remainder of the proposal, the recorded
amounts could become incorrect upon issuance of a more comprehensive
final rule. Correcting the incorrect amounts would then require an
allowance recall, which would reduce regulatory clarity and create an
additional compliance requirement for sources and administrative burden
for the EPA.
It is not possible in this stand-alone rule to finalize the
specific revised recordation deadline that was included in the April
2022 proposal for the 2023 and 2024 advance allocations--that is, 30
days after the effective date of a final rule addressing the full
proposal. However, the EPA believes that finalizing a recordation
deadline of September 1, 2023 in this rule for the 2023 and 2024
advance allocations serves the same dual purpose of, first, allowing
sufficient time for a final rule addressing the remainder of the
proposal to take effect and, second, recording the allowances far
enough in advance of the compliance deadlines for the respective
control periods to allow ample time for sources to engage in any
desired allowance trading activity. Allowances allocated for the 2023
control period will be recorded in sources' compliance accounts before
the end of the 2023 control period and eight months before the June 1,
2024, date for demonstrating compliance for the 2023 control period.
Further, if a rule addressing the remainder of the proposal is
finalized on a schedule that makes it possible for the allowances to be
recorded earlier than September 1, 2023, the EPA could accelerate
recordation accordingly.\26\
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\26\ A final rule addressing the remainder of the April 2022
proposal could also finalize the proposed provision extending the
recordation deadline for 2024 advance allocations if a state
provides a timely letter of intent to submit state-determined
allocations for that control period.
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The April 2022 proposal's rationale also supports finalizing the
remaining proposed revisions to recordation deadlines under all seven
trading programs on a stand-alone basis. Under these proposed
revisions, advance allocations of allowances for control periods in
2025 and later years under all seven trading programs would be recorded
by July 1 of the year before the year of each such control period. For
the CSAPR NO<INF>X</INF> Ozone Season Group 3 Trading Program, as
stated in the proposal, finalizing the revisions would accommodate the
proposed revisions to the schedule for determining allowance
allocations for control periods in 2025 and later years, and for the
allowances issued for the 2025 and 2026 control periods in particular,
extending the recordation deadline would also avert the possible need
for an allowance recall that otherwise could arise if advance
allocations for these control periods were recorded before the
effective date of a final rule addressing the remainder of the April
2022 proposal. For the remaining trading programs, as stated in the
proposal, finalizing the recordation deadline revisions on a stand-
alone basis will minimize compliance burdens and support administrative
efficiency by maintaining consistency across the trading programs and
will reduce the likelihood that future allowance recalls would be
needed in conjunction with possible future rulemakings. Under all seven
trading programs, allowances allocated for control periods in 2025 and
later years will be recorded in sources' compliance accounts in the
year before the start dates and almost 2 years before the compliance
determination dates of the respective control periods.
The EPA notes that finalization of the proposed revisions to
recordation deadlines is separable from the other elements of the April
2022 proposal and does not require finalization of the proposal's other
elements or otherwise represent a prejudgment of the Agency concerning
the content of a potential future rule. If for some reason the EPA does
not finalize, or is delayed in finalizing, the proposal's other
elements, finalizing the revisions to the recordation deadlines would
still provide the benefits described earlier concerning reduction of
the likelihood of future allowance recalls and maintenance of
consistency across the trading programs and would have no adverse
impact on any source. In this circumstance, the amounts of sources'
allocations to be recorded for all control periods under all seven
trading programs would remain unchanged from the amounts already
determined and announced pursuant to previous rulemakings unless and
until a subsequent rule altering the allocation amounts is finalized.

C. Deadlines for Submission of State-Determined Allowance Allocations

For all the CSAPR trading programs, covered states have options to
replace the default EPA-determined allowance allocations with state-
determined allowance allocations pursuant to approved SIP revisions.
Among other things, the regulations governing the EPA's approval of
such SIP revisions require the states' rules to include deadlines for
submitting the amounts of the allocations to the EPA that are
coordinated with the Agency's deadlines for recording the allowances in
sources' compliance accounts. Under the regulations in effect at the
time of the April 2022 proposal, the latest approvable deadline for
submission of state-determined advance allocations for each control
period was June 1 immediately before the EPA's

[[Page 52477]]

corresponding July 1 recordation deadline for the control period.\27\
For control periods in 2025 and later years, these submission deadlines
therefore were generally in the third year before the year of each such
control period.\28\
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\27\ See, e.g., 40 CFR 52.38(b)(11)(iii)(B) (2021).
\28\ The latest approvable deadlines for submission of state-
determined allocations of allowances used in the CSAPR
NO<INF>X</INF> Ozone Season Group 3 Trading Program for the control
periods in 2023, 2024, and 2025 would have been in the first or
second year before the year of the control period. However, at this
time no covered state has sought approval for a SIP revision
authorizing state-determined allocations of the allowances used in
this trading program.
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In the April 2022 proposal, the EPA proposed to revise the latest
approvable deadlines for submission of state-determined advance
allocations for the control periods in 2025 and later years under all
the CSAPR trading programs to June 1 of the year immediately before the
year of each such control period (i.e., one month before the EPA's
proposed deadlines to record advance allocations of allowances for the
same control periods). In the case of the CSAPR NO<INF>X</INF> Ozone
Season Group 3 Trading Program, the reason provided for the proposed
revision was to coordinate with the proposed revised schedule for
determining state emissions budgets for the control periods in 2025 and
later years, under which the state emissions budgets would be finalized
by May 1 of the year immediately before the year of each control
period. Revision of the submission deadline for state-determined
allocations under this trading program would be necessary because a
state would be unable to determine the amounts of unit-level
allocations for a given control period without first knowing the amount
of the state emissions budget for the control period.\29\ In the case
of the other trading programs, the reason provided for the proposed
revision to the latest approvable submission deadlines was to maintain
consistent deadlines across the various trading programs to the extent
possible so as to facilitate greater administrative efficiency by
states that choose to provide state-determined allowance
allocations.\30\ For all the trading programs, an additional reason
supporting the revisions to the latest allowable submission deadlines
is to maintain the existing relationship to the EPA's corresponding
recordation deadlines. That relationship is intended to maximize
states' flexibility by allowing the states to submit state-determined
allocations to the EPA as late as one month before the EPA's deadlines
for recording the allowances in sources' compliance accounts.
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\29\ 87 FR 20130.
\30\ 87 FR 20140.
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The EPA considers it appropriate to revise the latest approvable
deadlines for states to submit state-determined advance allocations to
the Agency in the same stand-alone action as the corresponding
recordation deadlines so as to maintain the existing relationship
between the two sets of deadlines. The EPA does not need to receive the
amounts of any state-determined allocations more than one month before
the Agency's corresponding recordation deadlines, and revising the
recordation deadlines makes it possible for the EPA to offer states the
flexibility to adopt later submission deadlines. The EPA notes that
revising the latest approvable submission deadlines in this rule will
not obligate any state that already has an approved SIP revision
authorizing the state to determine allocations of allowances for some
of the CSAPR trading programs to adopt a revised submission deadline.

III. Final Action

The EPA is taking final action to revise the regulations for the
CSAPR trading programs and the Texas SO<INF>2</INF> Trading Program as
follows. Under the CSAPR NO<INF>X</INF> Ozone Season Group 3 Trading
Program, the deadline at 40 CFR 97.1021 for the EPA to record advance
allocations of allowances for the control periods in 2023 and 2024 is
being revised to September 1, 2023. Under all the CSAPR trading
programs and the Texas SO<INF>2</INF> Trading Program, the deadlines at
40 CFR 97.421, 97.521, 97.621, 97.721, 97.821, 97.921, and 97.1021 for
the EPA to record advance allocations of allowances for the control
periods in 2025 and later years are being revised to July 1 of the year
immediately before the year of each such control period. Under the
regulations at 40 CFR 52.38 and 52.39 governing approvability of SIP
revisions that authorize states to determine the allocations of
allowances used in the CSAPR trading programs, the latest approvable
deadlines for submission to The EPA of the amounts of state-determined
advance allocations for the control periods in 2025 and later years are
being revised to June 1 of the year immediately before the year of each
such control period.
The EPA is making the regulatory revisions finalized in this rule
effective immediately upon publication in the Federal Register. As
noted in Section I.B of this rule, the revisions are being issued under
CAA section 307(d), which does not include provisions governing the
effective date of a rule issued under its procedures. While
Congressional Review Act (CRA) section 801(a)(3), 5 U.S.C. 801(a)(3),
and Administrative Procedure Act (APA) section 553(d), 5 U.S.C. 553(d),
require specified minimum periods between the dates of publication and
effectiveness for certain rules (with various exceptions), this action
is not subject to such requirements under either statute.\31\ \32\
Accordingly, the EPA has discretion in establishing the effective date
for the revisions finalized in this action. Resolving the differences
between the previously effective deadlines and the deadlines in the
April 2022 proposal at this time will provide clarity for stakeholders
and facilitate an orderly process for implementing any additional
regulatory revisions that may be promulgated after consideration of
comments on the remainder of the April 2022 proposal. Further, as
discussed in Section IV of this rule, the deadline revisions finalized
in this action will not have any adverse impacts on any state or
source. For these reasons, the Agency finds it is appropriate to make
the deadline revisions effective immediately upon publication.
---------------------------------------------------------------------------

\31\ CRA section 801(a)(3) generally provides that a ``major
rule'' may not take effect less than 60 days after the rule is
published in the Federal Register. Under CRA section 804(2), 5
U.S.C. 804(2), a major rule generally is a rule that the Office of
Management and Budget finds has resulted in or is likely to result
in (i) an annual effect on the economy of $100 million or more, (ii)
major cost or price increases, or (iii) other significant adverse
economic effects. This action is not a major rule for CRA purposes.
\32\ APA section 553(d) generally provides that a covered rule
may not take effect less than 30 days after the rule is published in
the Federal Register. However, CAA section 307(d)(1) states that
``[t]he provisions of [APA] section 553 . . . shall not, except as
expressly provided in [CAA section 307(d)], apply to actions to
which [CAA section 307(d)] applies.'' This action is subject to CAA
section 307(d), which does not contain any provision making the
action subject to APA section 553(d).
---------------------------------------------------------------------------

Although APA section 553(d) does not apply to this action, in
making the regulatory revisions finalized in this action effective
immediately upon publication, the EPA has nevertheless considered this
section's underlying purposes. The primary purpose of the section's
general requirement for a minimum period between a covered rule's dates
of publication and effectiveness is ``to give affected parties a
reasonable time to adjust their behavior before the final rule takes
effect.'' Omnipoint Corp. v. FCC, 78 F.3d 620, 630 (D.C. Cir. 1996).
The revisions finalized in this action do not impose any new regulatory
requirements on either covered states or participating sources and
therefore do not necessitate time for the states or sources to adjust
their behavior or otherwise prepare for implementation.

[[Page 52478]]

Further, APA section 553(d)(1) expressly allows an effective date
earlier than 30 days after publication for a rule that ``grants or
recognizes an exemption or relieves a restriction.'' This action
relieves an existing restriction on covered states by extending the
latest approvable deadlines for the states to submit any optional
state-determined allowance allocations to the EPA. Consequently, making
the deadline revisions effective immediately upon publication of the
final action is consistent with the purposes of APA section 553(d).

IV. Expected Impacts

The regulatory revisions to the CSAPR trading programs and the
Texas SO<INF>2</INF> Trading Program finalized in this rule extend the
deadlines by which the EPA will record advance allocations of
allowances in sources' compliance accounts as well as, for the CSAPR
trading programs, the latest approvable deadlines by which covered
states must submit any state-determined advance allocations to the EPA
for subsequent recordation. The EPA expects the principal impacts of
the revisions to be more orderly implementation of any final rule
addressing the remainder of the April 2022 proposal and reduction of
the likelihood of future allowance recalls in possible future
rulemakings. For covered states, the revisions to the latest approvable
submission deadlines will also generally increase flexibility regarding
the timing of the states' optional activities to determine the amounts
of allowance allocations under the CSAPR trading programs.
The EPA expects the sources participating in the trading programs
to benefit from improved regulatory clarity and potentially also from
avoidance of the need to expend time and resources to comply with
additional allowance recalls. Further, the EPA expects no adverse
impact on any source. The revisions do not alter which sources are
required to participate in any of the trading programs, the regulatory
requirements applicable to the participating sources, or the amounts of
emissions allowances allocated to any source for use in any control
period. Advance allocations of allowances issued for the 2023 control
period under the CSAPR NO<INF>X</INF> Ozone Season Group 3 Trading
Program will be recorded before the end of that control period, which
is the point in time at which trading of allowances for a given control
period typically becomes most active, and well before June 1, 2024,
which is the date when sources must hold allowances to demonstrate
compliance for that control period. In all other cases, advance
allocations of allowances for each control period will be recorded in
sources' compliance accounts in the year before the start date and
almost 2 years before the compliance determination date of the control
period for which the allowances are being issued. Moreover, as observed
in the proposal and referenced in Section II.B of this rule, lowering
the number of future control periods for which allowances are recorded
in advance is not expected to adversely impact allowance market
liquidity, because the historical data on transfers of recorded
allowances between accounts in the EPA's Allowance Management System
show few arms-length transfers of allowances issued for control periods
more than one control period in the future.

V. Statutory and Executive Order Reviews

Additional information about these statutes and executive orders
can be found at <a href="https://www.epa.gov/laws-regulations/laws-and-executive-orders">https://www.epa.gov/laws-regulations/laws-and-executive-orders</a>.

A. Executive Order 12866: Regulatory Planning and Review, and Executive
Order 13563: Improving Regulation and Regulatory Review

This action is not a significant regulatory action and therefore
was not submitted to the Office of Management and Budget (OMB) for
review.

B. Paperwork Reduction Act

This action does not impose any new information collection burden
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. OMB has
previously approved the information collection activities contained in
the existing regulations and has assigned OMB control number 2060-0667.
This action makes no changes to either the information collected or the
number of respondents.

C. Regulatory Flexibility Act

I certify that this action will not have a significant economic
impact on a substantial number of small entities under the Regulatory
Flexibility Act, 5. U.S.C. 601-602. This action will not impose any
requirements on small entities. This action simply extends certain
administrative deadlines that apply to the EPA or covered states under
existing regulations.

D. Unfunded Mandates Reform Act

This action does not contain any unfunded mandate as described in
the Unfunded Mandates Reform Act, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. The action imposes
no enforceable duty on any state, local, or tribal governments or the
private sector.

E. Executive Order 13132: Federalism

This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

This action does not have tribal implications as specified in
Executive Order 13175. It will not have substantial direct effects on
tribal governments, on the relationship between the federal government
and Indian tribes, or on the distribution of power and responsibilities
between the Federal government and Indian tribes. Thus, Executive Order
13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks

The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not concern an environmental
health risk or safety risk. This action simply extends certain
administrative deadlines that apply to the EPA or covered states under
existing regulations.

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

This action is not subject to Executive Order 13211 because it is
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

The EPA believes that this action is not subject to Executive Order
12898 because it does not establish an

[[Page 52479]]

environmental health or safety standard. This action simply extends
certain administrative deadlines that apply to the EPA or covered
states under existing regulations.

K. Congressional Review Act

This action is subject to the Congressional Review Act, 5 U.S.C.
801-808, and the EPA will submit a rule report to each House of the
Congress and to the Comptroller General of the United States. This
action is not a ``major rule'' as defined by 5 U.S.C. 804(2).

L. Determination Under CAA Section 307(b)

CAA section 307(b)(1), 42 U.S.C. 7607(b)(1), indicates which United
States Courts of Appeals have venue for petitions of review of final
actions by the EPA. This section provides, in part, that petitions for
review must be filed in the U.S. Court of Appeals for the District of
Columbia Circuit (D.C. Circuit) if (i) the Agency action consists of
``nationally applicable regulations promulgated, or final action taken,
by the Administrator,'' or (ii) the action is locally or regionally
applicable, but ``such action is based on a determination of nationwide
scope or effect and if in taking such action the Administrator finds
and publishes that such action is based on such a determination.'' This
action amends existing regulations that apply to 27 states and to
sources in those states. For this reason, this final action is
nationally applicable. In the alternative, the Administrator hereby
finds that this final action is based on a determination of nationwide
scope and effect for purposes of CAA section 307(b)(1). Thus, pursuant
to CAA section 307(b), any petitions for review of this final action
must be filed in the D.C. Circuit within 60 days from the date this
final action is published in the Federal Register.

List of Subjects

40 CFR Part 52

Environmental protection, Administrative practice and procedure,
Air pollution control, Incorporation by reference, Intergovernmental
relations, Nitrogen oxides, Ozone, Particulate matter, Sulfur dioxide.

40 CFR Part 97

Environmental protection, Administrative practice and procedure,
Air pollution control, Electric power plants, Nitrogen oxides, Ozone,
Particulate matter, Reporting and recordkeeping requirements, Sulfur
dioxide.

Michael S. Regan,
Administrator.

For the reasons stated in the preamble, parts 52 and 97 of title 40
of the Code of Federal Regulations are amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401 et seq.

Subpart A--General Provisions

0
2. Amend Sec. 52.38 by:
0
a. In Table 1 to paragraph (a)(4)(i)(B), Table 2 to paragraph
(a)(5)(i)(B), Table 3 to paragraph (b)(4)(ii)(B), Table 4 to paragraph
(b)(5)(ii)(B), Table 5 to paragraph (b)(8)(iii)(B), and Table 6 to
paragraph (b)(9)(iii)(B), revising the entries for ``2025 and any year
thereafter'';
0
b. In paragraph (b)(11)(iii) introductory text, removing ``2023'' and
adding in its place ``2025'';
0
c. In paragraph (b)(11)(iii)(B), removing ``no later than the dates in
Table 7 to this paragraph;'' and adding in its place ``by June 1 of the
year before the year of such control period;'', and removing Table 7 to
paragraph (b)(11)(iii)(B);
0
d. In paragraph (b)(12)(iii) introductory text, removing ``2023'' and
adding in its place ``2025'';
0
e. In paragraph (b)(12)(iii)(B), removing ``no later than the dates in
Table 8 to this paragraph;'' and adding in its place ``by June 1 of the
year before the year of such control period;'', and removing Table 8 to
paragraph (b)(12)(iii)(B); and
0
f. In paragraph (b)(17)(ii), removing ``2023'' and adding in its place
``2025''.
The revisions read as follows:

Sec. 52.38 What are the requirements of the Federal Implementation
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to
emissions of nitrogen oxides?

(a) * * *
(4) * * *
(i) * * *
(B) * * *

Table 1 to Paragraph (a)(4)(i)(B)
------------------------------------------------------------------------
Year of the control period for which Deadline for submission of
CSAPR NOX Annual allowances are allocations or auction results
allocated or auctioned to the Administrator
------------------------------------------------------------------------