The EPA issued today its final rule – known as the “tailoring rule” – which sets the thresholds for greenhouse gas permitting requirements for stationary sources under the Clean Air Act (CAA).

Specifically, the new rule sets thresholds for GHG emissions that define when permits under the New Source Review Prevention of Significant Deterioration (PSD) and title V Operating Permit programs are required for new and existing industrial facilities.

The rule “tailors” the requirements of the CAA permitting programs to limit which facilities are required to obtain PSD and title V permits. Under the new rule, facilities responsible for nearly 70 percent of the national GHG emissions from stationary sources will be subject to the permitting requirements. Those sources most affected are power plants, oil refineries, and cement production facilities.

After regulating companies that are the largest emitters of GHG emissions, the rule will then be expanded to cover other sources of GHG emissions that previously have not been covered under the CAA for other pollutants.

The EPA issued the rule in response to the U.S. Supreme Court’s decision, Massachusetts v. EPA, 549 U.S. 497 (2007). In that case, the Supreme Court ruled that the EPA can regulate GHGs, including CO2, under the Clean Air Act. To do so, the EPA was required to determine whether GHG emissions from motor vehicles cause or contribute to air pollution, which may reasonably be anticipated to endanger the public health or welfare. The Obama Administration reversed a Bush Administration finding that such emissions do not endanger the public health or welfare. As a result of the new “endangerment finding,” the Obama Administration pressed forward with the proposed regulations.

The EPA’s endangerment finding currently is being challenged in court. Today’s proposed rule will most likely be challenged in court as well.

To read furhter about how the rule will be implemented, click here.