United States (Federal)

US-1b:New Source Performance Standards (under the Clean Air Act)

Policy Description

In December, 2010, the Environmental Protection Agency entered into two proposed settlement agreements to issue rules that will address greenhouse gas emissions from fossil fuel-fired power plants and refineries known as the New Source Performance Standards (NSPS). These two industrial sectors make up nearly 40 percent of the nation’s greenhouse gas emissions.

 

Description

The Clean Air Act requires EPA to set standards, called New Source Performance Standards (NSPS), for specific categories of stationary sources of pollution. The standards apply to new and existing sources. The federal level EPA establishes standards for new sources, and federal and state EPAs share responsibility for existing sources. There are about 75 NSPS [1].

In December 2010, the Environmental Protection Agency proposed a timeline to issue two NSPS that addresses greenhouse gas emissions from fossil fuel-fired power plants and petroleum refineries. These two sectors make up nearly 40 percent of the nation’s greenhouse gas emissions [2].

The proposed rule for GHG emissions for fossil fuel-fired electric utility generating units (EGUs) was established in March 2012 and is expected to take effect in 2015. The proposed rule is strictly limited to new sources, and requires new fossil fuel-fired EGUs greater than 25 megawatt electric (MWe) to meet output-based standard of 1,000 pounds of CO2 per megawatt-hour (lb CO2/MWh), based on the performance of widely used natural gas combined cycle (NGCC) technology. The proposal if finalized would also promote utilization and further development of carbon capture and storage (CCS) by making it clear that CCS would be necessary to meet the performance standards [3].

A proposed rule addressing GHG emissions from petroleum refineries was set to be issued by December 2011, but is still currently under development. It is not clear when EPA will release proposed GHG regulation for refineries.

In the U.S. Climate Action Plan that was announced in June 2013, the Obama Administration reaffirmed the importance of cutting pollution and establishing standards for both new and existing power plants and directs EPA to work closely with states, industry and other stakeholder to do so [5].

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Administrative, Standards

Position in the Pyramid

About Us

Participation: Mandatory

Policy Linkages

Complements Greenhouse Gas Permitting (under the Clean Air Act) Effort Defining
Supported By Business Energy Investment Tax Credit (ITC) Supporting Measure

Agencies Responsible

Environmental Protection Agency

Primary Objective: GHG Emissions

Objective

The aim of this policy is to reduce greenhouse gas emissions from petroleum refineries, one of the largest industrial sources, and fossil-fuelled power plants. By setting performance standards for new and existing petroleum refineries, the policy will encourage producers to invest in energy efficiency measures and best practices for reducing GHG emissions.

Target Group

Fossil-fuel power plants, electric generating units (EGUs) and petroleum refineries

Driver of energy consumption or emissions affected by policy: GHG emissions intensity

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Fossil-fuel power plants, electric generating units (EGUs) and petroleum refineries which cover 40% of the US's GHG emissions.

Quantitative Target? yes

Progress Monitored? yes

Verification Required? yes

Enforced? yes

Sanctions: Not yet known.

Requirements on the Target Group

Not yet known.

Support by Government

Not yet known.

 

Implementation Toolbox

Not yet known.

 

Complexity of Implementation

Government

Not yet known.

Target Group

Not yet known.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions Not yet known. Not yet known.
Estimated costs/benefits for industry For power plants: $11 billion in 2015 [4] Not yet known.
Estimated cost for government Not yet known. Not yet known.
Other Benefits
General Benefits Not yet known.
Specific Benefits Not yet known.

References & Footnotes

References

[1] US EPA (2012). New Source Performance Standards and State Implementation Plans. Accessed November 10, 2012 from http://www.epa.gov/oecaerth/monitoring/programs/caa/newsource.html

[2] US EPA (2011). Factsheet: Settlement Agreements to address greenhouse gas emissions from electric generating units and refineries. Retrieved 10 October, 2012 from http://www.epa.gov/carbonpollutionstandard/pdfs/settlementfactsheet.pdf

[3] United States Environmental Protection Agency. "Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units (Proposed Rule)." 40 CFR Part 60. 27 Mar. 2012. .

[4] Bloomberg New Energy Finance (2011). EPA Said to Give Power Companies Options to Delay Pollution Rule. November 30, 2011. Accessed October 10, 2012 from http://www.bloomberg.com/news/2011-11-29/epa-proposal-said-to-give-power-companies-option-to-delay-pollution-rules.html/

[5] White House (2013). Fact Sheet: President Obama’s Climate Action Plan. Available at http://www.whitehouse.gov/the-press-office/2013/06/25/fact-sheet-president-obama-s-climate-action-plan