Frequently Asked Air Questions (FAAQS): How Low Can You Go? BACT, RACT, MACT — And All the Way Down to the LAER Floor (Part 1)

Introduction

When a source seeks an air permit, one of its biggest questions is often: how exacting must my emissions controls be? The Clean Air Act answers that question through several technology-based standards, each with different applications, triggers and levels of stringency. This article aims to help untangle the “alphabet soup” of these control technology standards in a way that is easy to digest: what they are, when they apply, how they are enforced, and what key considerations a source should be thinking about when determining “how low” its emissions must "drop" under BACT, RACT, MACT, or LAER, (BACT and LAER are further defined below).

This article is the first in a two part series examining the Clean Air Act’s technology-based control standards. Part 1 focuses on BACT and LAER—two standards that play a central role in the Clean Air Act’s air permitting framework for new or major modified sources. Part 2 will examine RACT and MACT, which apply in other regulatory contexts. If you or your facility have questions regarding the applicability of any of these control technology standards or how they may impact your operations, the environmental team at Williams Mullen would be happy to assist.

Q: When do BACT and LAER apply?

As a refresher, under the Clean Air Act, "New Source Review" (NSR) permitting is a pre-construction permitting program. NSR permitting establishes requirements for new sources or existing sources undergoing major modifications ("major modified sources").

There are two types of permits under NSR: PSD Permits and NNSR. PSD permits are for those sources located in areas attaining the NAAQS. Thus, a PSD permit is designed to "prevent significant deterioration" ("PSD") of existing air quality. Alternatively, sources located in an area not achieving the NAAQS (“non-attainment area”) would be subject to a nonattainment NSR permit or NNSR.

Best Available Control Technology or BACT (pronounced  "backt") applies to sources undergoing PSD permitting. Lowest Achievable Emissions Rate or LAER (pronounced "layer"), on the other hand, applies in the NNSR permitting context. Importantly, LAER applies only to pollutants for which the area is in nonattainment and for which a source is major. In turn, then, under NNSR a source does not trigger review for a significant increase (i.e., a major modification) if the source is not major for that particular pollutant to begin with.

Q: What pollutants do BACT and LAER apply to?

When considering what pollutant emissions must be reduced through control technology, BACT and LAER apply to "NSR regulated pollutants."

NSR regulated pollutants include, but are not limited to, (1) any pollutant for which a NAAQS has been promulgated; (2) any pollutant that is a constituent or precursor for a pollutant for which a NAAQS has been promulgated; (3) any pollutant that is subject to any standard promulgated under Section 111 of the Clean Air Act (New Source Performance Standards); and (4) any Class I or II substance subject to a standard promulgated under title VI of the Clean Air Act (ozone depleting substances).

Q: What is BACT?

BACT is the maximum degree of reduction of pollutant emissions achievable for a particular source through the application of available control technologies, while taking into account energy, environmental, and economic impacts and other costs. Simply put, the BACT determination for a source will balance pollution reduction—the goal of the analysis—with economic and technological feasibility. Critically, BACT is a case-by-case determination and not a "one size fits all" approach to emission reductions.

Q: What NSR regulated pollutants must a new source apply BACT to?

A new source must apply BACT to each regulated NSR pollutant it would potentially emit in "significant" amounts. Notably, "significant amounts," set forth in 40 CFR 52.21(b)(23), do not mean "major amounts."

What does this look like in practice? Imagine a new source is constructed that emits 300 tpy of VOCs, 45 tpy of sulfur dioxide, and 95 tpy of carbon monoxide. Despite the fact the source is considered "major" only due to VOCs, it would need to apply BACT to each pollutant it is "significant" for. Under these circumstances, it would need to apply BACT to its VOCs and sulfur dioxide emissions because 40 tpy is the significant threshold for sulfur dioxide. Conversely, the source would not need to apply BACT to its carbon monoxide emissions because 95 tpy is less than the significant amount of 100 tpy.

Q: What NSR regulated pollutants must a major modified source apply BACT to?

An existing source must apply BACT to each regulated NSR pollutant for which it would result in a significant net emissions increase at the source. 

A major modification means any physical change in or change in the method of operation of a major stationary source that would result in a "significant emissions increase" of any regulated NSR pollutant; and a "significant net emissions increase" of that pollutant from the major stationary source. 40 CFR 52.21(b)(2)(i). Thus, the increases that would be considered "major modifications" are coextensive with the pollutants a BACT analysis would need to be performed for. 

What does this look like in practice? Imagine an existing facility is major because it emits 300 tpy of VOCs. It plans an expansion project, which would increase its VOC emissions by 10 tpy; its nitrogen oxide emissions from 10 tpy to 60 tpy; and its particulate matter emissions from 0 tpy to 30 tpy. This would be considered a major modification because its increases of both nitrogen oxides and particulate matter qualify as a major modification. Likewise, the source would have to do a BACT analysis for those pollutants. The source would not have to do a BACT analysis for VOCs even though VOCs are the reason the source was originally considered "major" as the 10 tpy increase is not considered "significant" for VOCs.

Q. How is BACT determined?

BACT is determined through a "top down approach." At Step 1 the source lists all available control technologies. This list is designed to be comprehensive and should include all options applicable to the particular pollutant (even if the option will be eliminated in later steps). At Step 2, the source removes any technically infeasible options and must document, with specificity, why that control option cannot be used. At Step 3, the source ranks the remaining control options against each other in order of overall effectiveness. Then, based on this ranking, at Step 4, the source evaluates each control option for energy, environmental, and economic impacts. If the top candidate (from Step 3) is unfavorable for any of these reasons, the source assesses the impacts of the next available control option. The most effective control option (the highest ranked at Step 3) that is not eliminated at Step 4 is then chosen as BACT at Step 5. 

Accordingly, a source must include in its permit application: (1) its proposed BACT; and (2) a presentation of alternative control-technologies that could achieve a higher degree of emission control and why it was not selected due to "unreasonable adverse energy, environmental, or economic impacts."

Q. What are energy, environmental or economic impacts?

• Energy: Considers items such as energy consumption, scarcity of fuels, and energy production impacts (utility impacts).
• Environmental: Considers items such as effects on air quality, irreversible or irretrievable commitment of resources, solid waste disposal, and water impacts.
• Economic: Considers items such as direct costs, capital availability, and local economic impacts. 

Note that EPA does not intend a BACT decision should force new projects to the brink of cancellation, but believes the decision should be made balancing these three (potentially competing) factors.

Q. Why does the Clean Air Act require BACT?

As a general matter, the PSD program was designed to ensure air quality in attainment areas, areas that are already relatively clean, is not degraded. Thus, requiring new sources or major modified sources to reduce their emissions helps ensure cumulative impacts to air quality do not arise. While a single new source may have only a small impact on air quality, regulators must be concerned with potential impacts in the aggregate from all new or major modified sources.

To that end, the purpose of BACT in PSD permits is two-fold. First, although emission limits exist in other parts of the Clean Air Act (such as NSPS), some sources are capable of achieving even greater emission reductions than those industry-wide standards require. Moreover, the process for updating those standards can take decades. BACT therefore allows regulators to obtain additional air quality benefits from sources that can achieve greater emission reductions, and helps ensure sources are not engaged in a “race to the bottom” when increased emission reductions are both technically feasible and economical.

Q. Can BACT ever apply to an existing source?

Yes. EPA has historically been concerned about the issue of a source improperly seeking and receiving a synthetic minor permit, constructing its facility subject to less demanding permitting requirements, and shortly thereafter relaxing its permit limits and actually operating at major source levels of pollution. EPA refers to such synthetic minor source permits as "sham permits." 40 CFR 52.21(r)(4) prescribes the methodology for determining BACT at a synthetic minor source that becomes major after relaxing its permit limits (i.e., determining BACT as if construction never previously commenced).

Why does this matter? As discussed above, when developing BACT, a source considers economics and need. And as a general rule, it is more expensive to retrofit existing equipment with pollution control measures than to install new equipment with better pollution control measures at the outset. In other words, older plants are often treated “more leniently” than those not yet constructed when costs are considered. Consequently, if EPA uses its authority in 52.21(r)(4), that potentially lenient treatment (i.e., less economically burdensome control technology) is no longer available.

Q. What is LAER?

LAER, like BACT, is also considered on a case-by-case basis, but it generally looks outward (to what others are achieving or are required to achieve) rather than inward (to the source's own circumstances and constraints).

LAER is either (1) the most stringent emission limit contained in the state implementation plan (SIP) of any state for such class or category of source, unless a source is able to demonstrate such limitations are not achievable; or (2) the most stringent emissions limit which is achieved in practice by such class or category of source.

In other words, LAER is considered the most stringent emissions limit contained in a SIP for a source (adopted as a rule, regulation, or even an individual permit incorporated into a SIP)—unless a more stringent emissions limit has been achieved in practice, or the SIP limitation is demonstrated by the owner or operator of the proposed source to be unachievable.

Q. What is considered "achieved in practice?"

An emission limit or control technology is considered "achieved in practice" when it has been demonstrated by real-world sources. Of note, regulatory agencies may consider whether the control technology is performing as expected when determining whether it has actually been "achieved in practice."

Q. Does LAER consider cost of implementation for a source, like BACT?

Generally no. EPA guidance does not allow consideration of costs in LAER determinations. Nevertheless, EPA has suggested that if the cost of the control is so great a new source could not be built or operated, it may be considered "not achievable." However, EPA further advises that if a source in the same or comparable industry uses that control technology, then this constitutes "de facto" evidence the cost to the industry is not prohibitive. Moreover, EPA guidance highlights that costs in a LAER analysis should only be considered if they involve unusual circumstances which in some way impact an individual source in a different or unique way, as compared to the rest of that industry.

Q. How does LAER positively impact non-attainment areas?

LAER is anchored to all states' SIP requirements or emission levels already achieved by other sources or comparable industries, which ultimately prevents states or industries from lowering standards to gain a competitive advantage, ensuring the most stringent controls set the floor rather than the exception.