Proposed Rule2024-18570
Conditional Approval of Arizona State Implementation Plan Revisions; Maricopa County Air Quality Department; Mobile Source Emission Reduction Credits
Primary source
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Published
August 22, 2024
Issuing agencies
Environmental Protection Agency
Abstract
The Environmental Protection Agency (EPA) is proposing to conditionally approve a revision to the Maricopa County Air Quality Department's (MCAQD or "Department") portion of the Arizona State Implementation Plan (SIP). This rule revision establishes a program allowing fleet owners/operators to generate emission reduction credits (ERCs) by either retrofitting or replacing existing fleet vehicles with lower emitting vehicles and meeting other ongoing requirements. These ERCs are intended for use as offsets under the Department's nonattainment New Source Review (NNSR) program. We are taking comments on this proposal and plan to follow with a final action.
Full Text
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<title>Federal Register, Volume 89 Issue 163 (Thursday, August 22, 2024)</title>
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[Federal Register Volume 89, Number 163 (Thursday, August 22, 2024)]
[Proposed Rules]
[Pages 67919-67922]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-18570]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R09-OAR-2024-0311; FRL-12092-01-R9]
Conditional Approval of Arizona State Implementation Plan
Revisions; Maricopa County Air Quality Department; Mobile Source
Emission Reduction Credits
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
conditionally approve a revision to the Maricopa County Air Quality
Department's (MCAQD or ``Department'') portion of the Arizona State
Implementation Plan (SIP). This rule revision establishes a program
allowing fleet owners/operators to generate emission reduction credits
(ERCs) by either retrofitting or replacing existing fleet vehicles with
lower emitting vehicles and meeting other ongoing requirements. These
ERCs are intended for use as offsets under the Department's
nonattainment New Source Review (NNSR) program. We are taking comments
on this proposal and plan to follow with a final action.
DATES: Comments must be received on or before September 23, 2024.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R09-
OAR-2024-0311 at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. For comments submitted at
<a href="http://Regulations.gov">Regulations.gov</a>, follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or removed from
<a href="http://Regulations.gov">Regulations.gov</a>. The EPA may publish any comment received to its public
docket. Do not submit electronically any information you consider to be
Confidential Business Information (CBI) or other information the
disclosure of which 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, please contact the person identified in
the FOR FURTHER INFORMATION CONTACT section. For 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>. If you need assistance in a
language other than English or if you are a person with a disability
who needs a reasonable accommodation at no cost to you, please contact
the person identified in the FOR FURTHER INFORMATION CONTACT section.
FOR FURTHER INFORMATION CONTACT: Laura Yannayon, EPA Region IX, 75
Hawthorne St., San Francisco, CA 94105; by phone: (415) 972-3534; or by
email to <a href="/cdn-cgi/l/email-protection#e59c848b8b849c8a8bcb8984909784a5809584cb828a93"><span class="__cf_email__" data-cfemail="7d041c13131c04121353111c080f1c3d180d1c531a120b">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us,''
and ``our'' refer to the EPA.
Table of Contents
I. The State's Submittal
A. What rule did the State submit?
B. Are there other versions of this rule?
C. What is the purpose of the submitted rule?
II. The EPA's Evaluation and Action
[[Page 67920]]
A. How is the EPA evaluating the rule?
B. Does the rule meet the evaluation criteria?
C. Deferred Action
D. Proposed Action and Public Comment
III. Incorporation by Reference
IV. Statutory and Executive Order Reviews
I. The State's Submittal
A. What rule did the State submit?
Table 1 lists the rule addressed by this proposal with the date it
was adopted by the MCAQD and submitted by the Arizonia Department of
Environmental Quality (ADEQ), which is the governor's designee for
Arizona SIP submittals.
Table 1--Submitted Rule
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Rule No. Rule title Adopted Submitted
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Rule 205........................... Emission Offsets Generated by Voluntary Mobile 4/26/23 5/4/23
Source Emission Reduction Credits.
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On November 4, 2023, the submittal of Rule 205 was deemed complete
by operation of law.
B. Are there other versions of this rule?
There are no previous versions of Rule 205 in the Maricopa County
portion of the Arizona SIP.
C. What is the purpose of the submitted rule?
Portions of Maricopa County are currently designated as
``Moderate'' nonattainment for the 2008 and 2015 ozone National Ambient
Air Quality Standards (NAAQS) and as ``Serious'' nonattainment for the
1987 particulate matter equal to or less than 10 micrometers
(PM<INF>10</INF>) NAAQS.\1\ Therefore, the MCAQD is required to
implement a NNSR program, which requires sources emitting ozone
precursors in large quantities to provide surplus emission reductions
to offset a proposed project's projected emission increases. In
Maricopa County, the quantity of surplus emission reductions available
for use as offsets does not appear sufficient to support current and
projected economic growth.
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\1\ 40 CFR 81.303.
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Rule 205, ``Emission Offsets Generated by Voluntary Mobile Source
Emission Reduction Credits,'' is intended to provide a regulatory
structure for the generation and use of nontraditional emission
reduction credits (ERCs) from mobile sources to be used as offsets for
new and modified major sources. When ERCs are generated from mobile
sources, they are referred to as mobile ERCs or ``MERCs.'' The rule
allows mobile source fleet owners that reduce emissions from their
fleets to sell those reductions to stationary sources, who can then use
them to offset their proposed emission increases. Rule 205 outlines the
requirements a ``permitted generator'' of emission reductions must meet
before the Department can certify these emission reductions as meeting
the offset integrity criteria specified for NNSR programs.\2\ Generally
speaking, the rule requires the permitted generator to submit certain
information in its application; procedures for processing an
application; use of specific methodologies to calculate emission
reductions; issuance of MERC certificates; and ongoing monitoring,
recordkeeping, and reporting requirements. The rule also contains
certain requirements for the MERC user and the Control Officer. More
information on the contents of Rule 205 can be found in the Technical
Support Document (TSD) included in the docket for this action.
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\2\ See, e.g., 40 CFR 51.165(a)(3)(ii)(C)(1)(i) and CAA sections
172(a) and (c)(1).
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II. The EPA's Evaluation and Action
A. How is the EPA evaluating the rule?
In evaluating Rule 205 we reviewed it for compliance with the
requirements for offsets found in 40 CFR 51.165(a)(3)(ii)(C)(1)(i) and
CAA section 173 and the substantive CAA requirements for SIPs and SIP
revisions as set forth in CAA sections 110(a)(2), 110(l), and 193.
Throughout our evaluation we also referred to our 2001 Economic
Incentive Programs (EIP) guidance document.
The requirements for emission reductions used as NNSR offsets are
found in 40 CFR 51.165(a)(3)(ii)(C). Specifically, paragraph
(a)(3)(ii)(C)(1)(i) requires emission reductions to be surplus,
permanent, quantifiable, and federally enforceable. We refer to this
group of requirements as the ``offset integrity criteria.'' In
addition, CAA section 173(a) requires increased emissions to be offset
by reductions in ``actual'' emissions, meaning that the pollutant was
actually emitted during the baseline period and is not a paper
reduction in a source's potential to emit; in other words, it requires
that each offset represents emissions that have been taken out of the
air. CAA section 173(c)(1) also provides a timing requirement for the
offsets, in that the emission reductions must be, ``by the time a new
or modified source commences operation, in effect and enforceable.''
CAA section 110(a)(2) requires that regulations submitted to the
EPA for SIP approval be clear and legally enforceable. CAA section
110(l) requires that states provide public notice and an opportunity
for public hearing of SIP revisions prior to their submittal and
prohibits the EPA from approving any SIP revisions that would interfere
with attainment or maintenance of a NAAQS, reasonable further progress
(RFP), or other applicable requirements of the CAA. CAA section 193
prohibits the modification of any SIP-approved control requirement in
effect before November 15, 1990, in a nonattainment area, unless the
modification ensures equivalent or greater emission reductions of the
relevant pollutants.
In 2001, the EPA issued a guidance document entitled ``Improving
Air Quality with Economic Incentive Programs'' (``2001 EIP
guidance''),\3\ which sets out the EPA's non-binding guidelines on
discretionary EIPs.\4\ An EIP is a regulatory program that implements
market-based strategies to achieve an air quality objective. Rule 205
is classified as an EIP because it provides a framework for generating
ERCs from mobile sources. The ERCs generated under the EIP may be
traded with stationary sources to provide the offsets required under a
NNSR program.\5\ Our 2001 EIP guidance document does not represent
final EPA action on the requirements for EIPs, but rather it identifies
several different types of EIPs and proposed elements for each type
that, if met, would assure that the program would meet the applicable
CAA requirements.
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\3\ U.S. EPA, Improving Air Quality with Economic Incentive
Programs, EPA-452/R-01-001 (January 2001), available at <a href="https://www.epa.gov/sites/default/files/2015-07/documents/eipfin.pdf">https://www.epa.gov/sites/default/files/2015-07/documents/eipfin.pdf</a>.
\4\ A discretionary EIP is not subject to the requirements for
mandatory EIPs found in 40 CFR part 51, subpart U.
\5\ See id.
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[[Page 67921]]
B. Does the rule meet the evaluation criteria?
In general, we find that Rule 205 complies with most applicable
requirements but does not satisfy the requirements pertaining to offset
trading programs and requirements for SIPs to be clear and enforceable,
including provisions found in 40 CFR 51.165(a)(3)(ii)(C)(1)(i), and CAA
Sections 110(a)(2) and 173. Our technical support document (TSD), which
is included in the docket for this action, contains a detailed and
complete discussion of the applicable CAA requirements and our
evaluation of whether Rule 205 satisfies these requirements. Section 6
of the TSD identifies the deficiencies that must be addressed to ensure
full approval of a future revision of Rule 205. Please see the TSD
included in the docket for this proposed rulemaking for additional
information.
C. Deferred Action
At this time, the EPA is not taking action on Rule 205, Appendix A,
paragraph D, titled ``High Pollution Area Incentive,'' which contains a
provision allowing a permitted generator with a vehicle fleet located
in an ``area of high pollution'' to calculate its baseline emissions
using the original fleet vehicle emission rates rather than a current
model year vehicle type emission rate. The EPA will act on this portion
of the rule in a separate rulemaking unless the provision is withdrawn
by the MCAQD.
D. Proposed Action and Public Comment
The EPA has reviewed Rule 205, ``Emission Offsets Generated by
Voluntary Mobile Source Emission Reduction Credits,'' in accordance
with the evaluation criteria described earlier in this preamble. CAA
section 110(k)(4) authorizes the EPA to conditionally approve a plan
revision based on a commitment by the state to adopt specific
enforceable measures by a date certain but not later than one year
after the date of the plan approval. In letters dated May 1, 2024, and
May 6, 2024, the MCAQD and the ADEQ committed to adopt and submit
specific enforceable measures to address the identified deficiencies in
Rule 205 within one year after the date of final approval.\6\
Accordingly, pursuant to section 110(k)(4) of the Act, we are proposing
a conditional approval of Rule 205. We are proposing to conditionally
approve Rule 205 based on our determination that, apart from the
deficiencies listed in Section II.B of this preamble and Section 6 of
our TSD, the rules satisfy the applicable statutory and regulatory
requirements for offset trading programs and the general requirements
for SIPs to be clear and enforceable, including provisions found in 40
CFR 51.165(a)(3)(ii)(C) and CAA Sections 110(a)(2) and 173. Moreover,
we conclude that if the MCAQD and the ADEQ submit the changes listed in
their commitment letters, the identified deficiencies will be cured.
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\6\ See the May 1, 2024 and May 6, 2024 commitment letters from
the MCAQD and the ADEQ for additional information about how the
MCAQD will correct the identified deficiencies. These letters are
contained in the docket for this rulemaking.
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The intended effect of our proposed conditional approval action is
to update the applicable SIP while providing the Department the
opportunity to correct the identified deficiencies. If we finalize this
action as proposed, our action will be codified through revisions to 40
CFR 52.120 (Identification of plan) and 40 CFR 52.119 (Identification
of plan--conditional approval).
If the State meets its commitment to submit the required revisions
and the EPA approves the submission, then the deficiencies listed above
will be cured. However, if the Department fails to submit these
revisions within the required timeframe, explained in section II.C, the
conditional approval will automatically convert to a disapproval, and
the EPA will issue a finding of disapproval. The EPA is not required to
propose the finding of disapproval.
In support of this proposed action, we have also concluded that our
conditional approval of Rule 205 would comply with sections 110(l) and
193 of the Act because the submitted rule as a whole would not
interfere with continued attainment of the NAAQS in Maricopa County and
would not relax control technology and offset requirements.
We will accept comments from the public on this proposal until
September 23, 2024.
III. Incorporation by Reference
In this rulemaking, the EPA is proposing to include in a final EPA
rule regulatory text that includes incorporation by reference. In
accordance with requirements of 1 CFR 51.5, the EPA is proposing to
incorporate by reference Rule 205, ``Emission Offsets Generated by
Voluntary Mobile Source Emission Reduction Credits,'' which establishes
a program allowing fleet owners/operators to generate emission
reduction credits (ERCs) by either retrofitting existing fleet vehicles
or replacing existing fleet vehicles with lower emitting vehicles and
meeting other ongoing requirements. The EPA has made, and will continue
to make, these materials available through <a href="https://www.regulations.gov">https://www.regulations.gov</a>
and in hard copy at the EPA Region IX Office (please contact the person
identified in the FOR FURTHER INFORMATION CONTACT section of this
preamble for more information).
IV. Statutory and Executive Order Reviews
Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, the EPA's role is to review state choices
and approve those choices if they meet the minimum criteria of the Act.
Accordingly, this proposed action proposes conditionally approve state
law as meeting federal requirements and does not impose additional
requirements beyond those imposed by state law.
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 was
therefore not submitted to the Office of Management and Budget (OMB)
for review.
B. Paperwork Reduction Act (PRA)
This action does not impose an information collection burden under
the PRA because this action does not impose additional requirements
beyond those imposed by state law.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action will not impose any requirements on small entities beyond those
imposed by state law.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. This action does not impose additional requirements
beyond those imposed by state law. Accordingly, no additional costs to
state, local, or tribal governments, or to
[[Page 67922]]
the private sector, result from this action.
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: Coordination With Indian Tribal Governments
This action does not have tribal implications, as specified in
Executive Order 13175, because the SIP is not approved to apply on any
Indian reservation land or in any other area where the EPA or an Indian
tribe has demonstrated that a tribe has jurisdiction, and will not
impose substantial direct costs on tribal governments or preempt tribal
law. Thus, Executive Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks 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. Therefore, this action is not
subject to Executive Order 13045 because it merely proposes to
conditionally approve state law as meeting federal requirements.
Furthermore, the EPA's Policy on Children's Health does not apply to
this action.
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 (NTTAA)
Section 12(d) of the NTTAA directs the EPA to use voluntary
consensus standards in its regulatory activities unless to do so would
be inconsistent with applicable law or otherwise impractical. The EPA
believes that this action is not subject to the requirements of section
12(d) of the NTTAA because application of those requirements would be
inconsistent with the CAA.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Population
Executive Order 12898 (Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations, 59 FR 7629,
February 16, 1994) directs Federal agencies to identify and address
``disproportionately high and adverse human health or environmental
effects'' of their actions on minority populations and low-income
populations to the greatest extent practicable and permitted by law.
The EPA defines environmental justice (EJ) as ``the fair treatment and
meaningful involvement of all people regardless of race, color,
national origin, or income with respect to the development,
implementation, and enforcement of environmental laws, regulations, and
policies.'' The EPA further defines the term fair treatment to mean
that ``no group of people should bear a disproportionate burden of
environmental harms and risks, including those resulting from the
negative environmental consequences of industrial, governmental, and
commercial operations or programs and policies.''
The State did not evaluate EJ considerations as part of its SIP
submittal; the CAA and applicable implementing regulations neither
prohibit nor require such an evaluation. The EPA did not perform an EJ
analysis and did not consider EJ in this action. Consideration of EJ is
not required as part of this action, and there is no information in the
record inconsistent with the stated goal of Executive Order 12898 of
achieving EJ for people of color, low-income populations, and
Indigenous peoples.
List of Subjects in 40 CFR Part 52
Environmental protection, Administrative practice and procedure,
Air pollution control, Incorporation by reference, Intergovernmental
relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping
requirements, Volatile organic compounds.
Dated: August 14, 2024.
Martha Guzman Aceves,
Regional Administrator, Region IX.
[FR Doc. 2024-18570 Filed 8-21-24; 8:45 am]
BILLING CODE 6560-50-P
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