Client Alerts
March 27, 2012

EPA issues proposed rule limiting carbon dioxide emissions from new power plants

Stites & Harbison, PLLC, Client Alert, March 27, 2012

Earlier today, the Environmental Protection Agency issued the proposed Carbon Pollution Standard, a rule limiting carbon dioxide (CO2) emissions from new fossil-fuel powered electric power plants. If adopted, this proposed rule would establish the first nation-wide, numeric limit on CO2 emissions from new power plants. The rule follows EPA’s 2009 finding that greenhouse gases, including CO2, endanger the public health and welfare.

Under the proposed rule, new fossil-fuel powered generating facilities will be required to meet an output-based standard of 1,000 pounds of CO2 per megawatt-hour (lb CO2/MWh). According to EPA, new natural gas combined cycle power plants should be able to meet the proposed standard without additional controls

The proposed Carbon Pollution Standard would create a new category under the new source performance standards for the regulation of greenhouse gases from fossil fuel powered electric utility steam generating units (boilers and IGCC units) and combined cycle units. The new category would include those units that (1) generate electricity for sale and (2) are greater than 25 megawatts in size. The proposed rule would not apply to:

  • Existing generating units, including modifications to those units required to comply with other air pollution requirements;
  • New power plants that have permits and start construction within 12 months of the date of the proposed rule;
  • Generating units looking to renew permits as part of a Department of Energy demonstration project, provided construction begins within 12 months of the date of the proposed rule; and
  • New power plants that do not burn fossil-fuels (such as biomass).

EPA notes that new coal or petroleum coke power plants subject to the proposed Carbon Pollution Standard would need to incorporate CO2 reduction technologies, such as carbon capture and sequestration (CCS) to comply with the standard. The proposed rule does, however, allow those generators that construct new generating units requiring CCS to use a 30-year average of CO2 emissions to comply with the standard. Those CCS facilities taking advantage of the 30 year average must, however, limit their emissions to 1,800 lb CO2/MWh on an annual basis during the first ten years of operation. According to EPA, this limit is attainable using “supercritical” boiler technologies.

EPA will accept comments on the proposed Carbon Pollution Standard for sixty days following the official publication of the proposed rule in the Federal Register. EPA is also planning to hold public meetings on the proposed rule, the dates of which will be included in the Federal Register and will be noted in future alerts.

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