EPA isues GHG BACT guidance

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Courtesy of Trinity Consultants

Beginning in 2011, major sources of greenhouse gas (GHG) emissions that trigger Prevention of Significant Deterioration (PSD) permitting must implement Best Available Control Technology (BACT) for GHG emissions from new and modified sources. EPA has issued a variety of guidance in an attempt to clarify the BACT determination process for GHG emissions from common stationary sources:1

  • EPA’s “PSD and Title V Permitting Guidance for GHGs,” which provides general guidance for the evaluation of BACT for GHG emissions
  • White Papers on GHG Control Measures which focus on sector-specific BACT considerations for industries with high GHG emissions
  • Enhancements to the Control Technology Clearinghouse (i.e., the RBLC), whichallows access to GHG control technology determinations issued by air permitting agencies
  • GHG Mitigation Strategies Database, which includes performance and cost data on current and developing GHG control strategies
  • GHG permit training materials, including archived video of prior webcasts covering EPA’s general guidance on GHG BACT determinations and BACT examples for certain source types

While EPA’s guidance recommends using the standard five-step top-down BACT evaluation process, which has traditionally been used within the PSD program for criteria pollutants, the guidance also identifies several considerations that are specific to evaluating BACT for GHG emissions. The following paragraphs summarize EPA’s guidance to date on each of the five steps of the BACT evaluation process for GHGs.

Step 1 – Identify All Control Technologies
As with a traditional BACT assessment for criteria air pollutants, Step 1 of the analysis should identify all control technologies that are available to the GHG emissions source under consideration, including inherently lower-emitting processes and designs, add-on technologies, and control methods applied at similar emissions sources (available through technology transfer). Furthermore, a BACT assessment must consider feasible combinations of those technologies.

According to EPA’s GHG BACT guidance issued to date, the control technologies identified in Step 1 need not consider options that would fundamentally redefine the nature of the source or, for a modification, fundamentally redefine the project that is under review. However, EPA has not issued clear guidance to identify control technologies that would redefine the nature of the source. Rather, this determination is left to the discretion of the permitting authority.

Based on recent guidance, a permittee preparing a GHG BACT assessment as part of a permit application should begin by considering the fundamental business purpose of the project, as described in the permit application. For example, EPA’s guidance indicates that cleaner versions of the primary fuel used in a source should be considered an available BACT option in Step 1. Increased usage of secondary fuel in a source should also be included in the BACT assessment. Alternatively, the use of an alternative fuel for which the source is not already configured may fundamentally redefine the source and is not part of the BACT evaluation.

Biofuels
EPA has received numerous questions regarding whether the use of biofuels should beconsidered as a GHG control option in Step 1 of a BACT assessment. In addition to EPA’s recent BACT guidance for GHG emissions, a recent rulemaking announcement from EPA will affect the treatment of biogenic GHG emissions under the Tailoring Rule.

On January 12, 2011, EPA announced plans to defer PSD permitting requirements for biomass and other biogenic CO2 emissions for three years. According to EPA, the rulemaking establishing this deferral will be completed by July 1, 2011, which is the first date that a source may trigger pre-construction permitting requirements under the PSD program solely because of GHG emissions. Following an evaluation to consider the technical issues associated with biogenic CO2 emissions during the three-year deferral period, EPA expects to issue a second rulemaking to address the manner by which GHG emissions associated with biomass combustion and other biogenic sources should be addressed in the PSD permitting program.

Sources that are expected to be affected by this deferral and corresponding interim guidance include biomass combustion sources, wastewater treatment and livestock management facilities, landfills, and fermentation processes for ethanol production. As of January 2, 2011, large stationary sources that become subject to PSD for other regulated pollutants must address pre-construction permitting requirements for emissions of CO2 and other GHGs as part of the PSD permit application. If such permits are issued before the deferral is finalized, then existing regulations may require that the permits meet the BACT requirement for GHG emissions during an interim time period.

To assist with BACT evaluations for biogenic GHG emissions during this interim period, EPA intends to concurrently issue interim BACT guidance along with the proposed deferral. According to EPA’s announcement, this guidance will “provide a basis that permitting authorities may use to support the conclusion, during the interim period, that BACT for CO2 at such sources is simply the combustion of biomass fuel.” In other words, based on the anticipated BACT guidance for PSD permits issued during this interim period, the GHG BACT determination for biomass combustion sources “is simply combustion of biomass fuel.'

While EPA’s announcement clarifies BACT expectations for proposed biomass combustion sources, it does not address whether biomass should be identified as a GHG control option in a BACT assessment for a proposed fossil-fuel fired combustion source. In the absence of new guidance, it is assumed that the biomass considerations in EPA’s recent BACT guidance remain valid. According to this guidance, since CO2 emission rates from biofuels are similar to fossil fuels at the facility level (i.e., based on current guidance, CO2 emissions from the combustion of biofuels are not considered carbon neutral), and because Step 1 of a BACT assessment does not consider off-site impacts, the biofuel must result in an emissions reduction at the facility level to be considered a viable GHG BACT control option in Step 1.

Energy Efficiency Improvements
Improved energy efficiency is expected to be the primary control technology option for combustion-related GHGs. Because combustion efficiency is frequently improved through numerous small energy saving measures, which are impractical to evaluate individually as BACT options, it may be necessary to evaluate these measures collectively by benchmarking the efficiency of new units of a similar design. If the unit under consideration is a poor performer relative to the benchmark, then the analysis would highlight the need to determine whether additional energy efficiency measures are achievable.

EPA’s guidance references a variety of resources to support a benchmarking analysis, including EPA’s ENERGY STAR program. For example, ENERGY STAR developed sector-specific “Energy Guides” for a number of industrial sectors that detail processes and technologies to improve efficiency. Additionally, it established sector-specific benchmarking tools, called Energy Performance Indicators (EPIs), which assist with evaluating the energy performance of an entire facility. For a new facility that will generate its own energy (thermal or electric), the GHG BACT assessment should consider energy efficiency improvements, even in the design and operation of non-emitting energy-consuming units, as these considerations reduce overall facility emissions.

Carbon Capture and Storage
One of the primary distinctions between a traditional criteria pollutant BACT assessment and a GHG BACT assessment is the consideration of carbon capture and storage (CCS) technology as a viable control option. According to EPA’s guidance, CCS should be considered in Step 1 of a BACT assessment for certain source categories that are considered large CO2 emitters and sources with high-purity CO2 streams emitted to the atmosphere such as “hydrogen production, ammonia production, natural gas processing, ethanol production, ethylene oxide production, cement production, and iron and steel manufacturing.”

Sector-Specific White Papers
EPA issued white papers that identify available and emerging control technologies for reducing GHG emissions, for the following industrial sectors:

  • Electric Generating Units
  • Large Industrial/Commercial/Institutional Boilers
  • Pulp and Paper
  • Cement
  • Iron and Steel Industry
  • Refineries
  • Nitric Acid Plants

Although these documents do not define BACT for a given industrial sector, the information provided for a given sector should be considered in identification of control technologies in Step 1 of a case-by-case BACT assessment for the corresponding source categories.

Step 2 – Eliminate Technically Infeasible Options
EPA’s guidance indicates that a control option is considered technically feasible if it has been successfully demonstrated in practice at the same type and size of facility, or at a facility with similar process streams. The absence of a commercial guarantee for GHG emissions is not considered sufficient justification to identify a control technology as infeasible.

To determine whether CCS is technically feasible, the assessment must consider all three aspects of the control technology (i.e., capture, transport, and storage). If any of these aspects is infeasible for the facility, then CCS technology may be considered technically infeasible and eliminated from further consideration. A permittee should demonstrate the difference between CCS considerations at its facility (e.g., space, right-of-ways, access to storage reservoir, etc.) and technologies already demonstrated at other sources in order to eliminate CCS technology from further consideration.

Step 3 – Rank Remaining Control Technologies by Control Effectiveness
In Step 3 of the GHG BACT assessment, the metric used for ranking of the remaining control technologies by effectiveness may vary. For example, this analysis may be presented as percent pollutant removal, emission rate, or reduction in emissions over time. The appropriate basis should depend on case-specific considerations. If plant-wide efficiency measures are considered (e.g., for a new facility that generates its own thermal or electric energy), it may be preferable to rank the technologies by the overall net emissions impact of alternative measures. It should also be noted that Step 3 must include the ranking of logical combinations of the technologies (but not every possible variation).

Step 4 – Evaluate Most Effective Controls and Document Results
Step 4 of a BACT assessment may consider the economic, environmental, and energy-related impacts of a control technology. While this step is typically focused on economic considerations, EPA’s guidance indicates that other collateral impacts are expected to play an increasing role in a permitting authority’s GHG BACT determination process.

Economic Considerations
According to EPA’s guidance, the economic impacts of a control technology should be evaluated on a per ton of CO2 equivalent (CO2e) emissions basis, rather than per ton of individual GHGs. The Step 4 evaluation should consider both the average cost effectiveness of the control technology as well as the incremental cost of adding another compatible control technology to the original option.

EPA’s recent guidance fails to provide specific guidance on a cost effectiveness threshold
($/ton CO2e removed) above which a technology or combination of technologies should be considered economically infeasible. Available guidance on this issue is limited to the Interim Phase I Report of the Climate Change Work Group, which identifies a range of cost effectiveness recommendations from $3 to $150 per ton CO2e. Furthermore, a control option may be considered economically infeasible if the cost of a control technology is high relative to the project cost, if the control strategy would impact the resulting product’s cost, or if the control option would cause local job losses.

Other Considerations
An applicant may evaluate the impact of a control technology on both direct (e.g., combustion sources) and indirect (e.g., purchased electricity) energy usage. Additionally, the on-site and off-site environmental implications of control options should be considered. For CCS technology, Step 4 should consider energy use associated with the high parasitic load and related emissions (on-site and off-site, GHGs and criteria pollutants). Although it does not affect the Step 1 evaluation, the carbon neutrality of biofuels may be considered as an off-site impact in Step 4 of the assessment for a control option involving the use of biofuels.

Step 5 – Select BACT
BACT is selected based on the most efficient control option or combination of options identified in Step 3 that was not eliminated in Step 4 of the evaluation process. The basis for a permitted BACT standard varies and may include but is not limited to emission limits and averaging time periods, equipment specifications, and work practices, as well as associated monitoring, recordkeeping, and reporting provisions.

For GHGs, it may be preferable to express BACT limits on an output basis to reflect numerous energy efficiency measures. In addition to an output-based numerical limit, the permit may include conditions that require the implementation of certain work practices such as an Environmental Management System (EMS) focused on energy efficiency. EPA’s ENERGY STAR program provides guidance and recommendations for an EMS. According to EPA’s guidance, one outcome of a BACT assessment might be all suggested efficiency improvement measures identified by the EMS that result in a net energy savings be implemented.

EPA guidance states that longer averaging periods may be appropriate to address GHG emissions and the load variations inherent in certain combustion equipment. The guidance also provides a variety of GHG BACT assessment and determination examples for sources including a new municipal solid waste (MSW) landfill, a new natural gas-fired boiler at an existing major source, the addition of a new hydrogen plant at an existing petroleum refinery, a Greenfield coal-fired electricity generating facility, a new kiln at a cement plant, the expansion of a natural gas compressor station (new compressors and associated engines installed), and a Greenfield gas-fired combined cycle power plant. The table below summarizes several of EPA’s example BACT assessments.

Permittees undergoing GHG BACT evaluations should be familiar with relevant EPA guidance including example BACT assessments, sector-specific white papers, and guidance from EPA’s ENERGY STAR program on energy efficient control strategies.

1 http://www.epa.gov/nsr/ghgpermitting.html
2 PSD and Title V Permitting Guidance for Greenhouse Gases, EPA’s Office of Air and Radiation, November 2010.

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