Producers face strict GHG regulations

By Kris Bevill | November 11, 2009
The U.S. EPA's proposed rule to regulate greenhouse gas (GHG) emissions from industrial facilities would include at least 84 ethanol producers, according to the EPA.

The Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule would require all industrial facilities that emit at least 25,000 tons of carbon dioxide equivalent annually from stationary combustion sources to obtain construction and operating permits to cover the emissions. Emitters would also be subjected to biannual self-compliance reports.

The EPA estimates that its proposed threshold would require approximately 14,000 major sources to comply with the rule. The vast majority of participants already participate in the permitting process through the Clean Air Act but an estimated 400 facilities, including some ethanol plants, would be new participants in the program.

Howard Gebhart, environmental compliance section manager at Air Resource Specialists Inc., said his company's early estimates show that nearly all ethanol facilities would become regulated entities. "Based on the numbers we've calculated, I think it's likely that plants even as small as 40 or 50 MMgy are probably going to be over the 25,000 ton threshold for CO2 emissions," he said, adding that a typical 100 MMgy natural gas-fired ethanol production plant produces about 80,000 tons of CO2 annually from fuel combustion alone. Gebhart estimated compliance cost for an ethanol plant subject to Title V to be between $10,000 and $25,000 annually.

According to Gebhart, the new regulations wouldn't necessarily reduce emissions levels at facilities and would be an added burden for facilities that have to apply for new permits and comply with self-reporting procedures twice each year. "It may entice people to try to make reductions, particularly if they are close to the threshold. But if you're a 100 MMgy plant, the numbers that I've seen suggest that you're so far over the threshold you're not going to achieve those reductions in GHG emissions overnight," he said.

For ethanol plants not currently regulated by Title V, new rules would mean slower permitting processes and more burdensome regulations, according to Gebhart. "Plants won't be able to make changes as quickly as they're used to because they won't be able to do it with just a state permit," he said. New facilities will also be heavily regulated and will be subject to a pre-construction program designed to control pollution, but which would also slow down the construction process.

In addition to the EPA's proposed regulatory rule, the agency recently finalized its GHG reporting program, which includes the same 25,000 ton-per-year threshold for carbon dioxide equivalent, becomes effective Jan. 1. At that time, facilities will be required to begin collecting data on emissions levels. Facilities must then report the data to the EPA beginning March 31, 2011. Reporters will be required to present total annual GHG emissions as an aggregate as well as separate emissions data for each source and supply category as identified by the EPA. In addition, certain activity data, including fuel use and feedstock inputs, used to generate the emissions information would need to be reported.