The U.S. Environmental Protection Agency (EPA) establishes National Ambient Air Quality Standards (NAAQS) for various air pollutants to protect human health and the environment, as required under the 1990 amendments to the federal Clean Air Act (CAA). EPA designates areas that meet the NAAQS for a given air pollutant as attainment areas and areas that do not meet NAAQS as nonattainment areas. Nonattainment areas for ozone standards can be further classified as marginal, moderate, serious, severe, or extreme, depending on the exceedance level for each standard.
The South Coast Air Basin and Coachella Valley are both designated as areas of extreme nonattainment for both the 1997 and 2008 8-hour ozone standards, with attainment deadlines of June 5th, 2024, and July 20th, 2032, respectively. Both volatile organic compounds (VOC) and nitrogen oxides (NOX) are precursors of ozone. Unfortunately for facilities in the South Coast Air Quality Management District (SCAQMD), these areas will not meet the 1997 8-hour ozone standard by the June 5, 2024 deadline, resulting in CAA Section 185 to take effect. Section 185 requires that major stationary sources of VOC and/or NOX located in areas classified as severe or extreme for ozone that fail to attain the NAAQS by the attainment deadline either reduce their emissions to 80% of a baseline amount or pay a CAA nonattainment fee.
In order to fulfill the obligations of CAA Section 185, SCAQMD plans to establish
Proposed Rule 317.1 (PR 317.1) as a means to implement and collect CAA nonattainment fees for the 1997 and 2008 8-hour ozone standard.
Applicability
SCAQMD PR 317.1 will apply to major stationary sources of VOC and/or NOX located in the South Coast Air Basin or Coachella Valley. A major stationary source is defined as a facility that emits, or has a potential to emit (PTE), 10 tons per year or greater of VOC and/or NOX. If a major stationary source is not a major stationary source of VOC or NOX, then that facility is not subject to the CAA nonattainment fees under SCAQMD PR 317.1.
Fee Determination
The fees are based on the emissions of VOC and NOX, and a separate baseline and fee will be determined for each pollutant.
For the 1997 8-hour ozone standard CAA nonattainment fee, calendar year 2024 will serve as the baseline year. Baseline emissions will be based on one of two criteria, whichever is lower:
- Actual VOC/NOX emissions emitted during calendar year 2024, or
- The facility’s permitted VOC/NOx emissions in 2024.
As such, if a facility’s actual emissions are less than its permitted emissions, the baseline emissions for the facility will be the VOC and NOX emissions reported in the facility’s calendar year 2024 Annual Emissions Report. Below is an example calculation for a major stationary source of VOCs that had a decrease of 2 tons VOCs compared to its baseline. The calculation assumes that the 2023 Fee Rate is used for Calendar Year 2025.
Facilities will not be subject to CAA nonattainment fees for VOC and NOX if:
- VOC and NOX emissions are each reduced to 80% of their baseline emissions or more;
- The facility is no longer a major stationary source for VOC and NOX; or
- The South Coast Air Basin and Coachella Valley are redesignated as in attainment for the 1997 8-hour ozone NAAQs.
If a facility fails to pay the fees in full within 120 days after the invoice due date, SCAQMD has the authority to revoke the facility’s Permits to Operate. Currently, the annual CAA nonattainment fee rate is $11,922/ton as of calendar year 2023 and is set to increase annually to adjust for inflation. Note that there is a separate CAA nonattainment fee for each ozone NAAQS standard. As such, a second CAA nonattainment fee could potentially apply for the 2008 8-hour ozone standard if these areas do not reach attainment with the NAAQS by the 2032 deadline.
Closing Thoughts
PR 317.1 is expected to impact approximately 320 facilities in the South Coast Air Basin and Coachella Valley. A number of these facilities may have actual emissions of VOC and/or NOX under 10 tons per year, but are still considered major stationary sources due to their PTE. Since fees are relative to a facility’s actual or permitted emissions, some facilities will still have to pay the CAA nonattainment fee despite emitting less than the major source thresholds. Therefore, some facilities may want to consider re-evaluating their PTE or applying for a Title V exemption to be exempt from the CAA nonattainment fees.
If you would like to discuss SCAQMD Proposed Rule 317.1 and CAA Section 185 and how they may impact your facility, please contact Trinity’s
Irvine office or call
949.567.9880.
