Air Pollution Control Equipment Services, Emissions

New Report Shows Reductions in Eastern U.S. NOx Emissions

Decreases in ozone forming NOx emissions in 2004 signal that ozone air quality throughout the eastern United States is improving. According to a new report released on August 18, “Evaluating Ozone Control Programs in the Eastern United States: Focus on the NOx Budget Trading Program, 2004,” The U.S. Environmental Protection Agency’s (EPA’s) rule, known as the “NOx SIP Call,” yielded reductions that improved air quality for more than 100 million people. The NOx SIP Call directs 21 eastern states and the District of Columbia to reduce NOx emissions during the summer months. All states subject to this rule chose to comply by participating in the EPA-administered NOx Budget Trading Program.

“The NOx Budget Trading Program is yet another example of how market-based trading programs are significantly reducing emissions of air pollutants,” said EPA Administrator Stephen L. Johnson. “The NOx SIP Call and our new Clean Air Interstate Rule (CAIR) ensure that Americans continue to breathe cleaner air by dramatically reducing air pollution that moves across state boundaries.”

The NOx Budget Trading Program was modeled after the Ozone Transport Commission’s (OTC’s) NOx Budget Program and EPA’s Acid Rain Program to deliver emissions reductions efficiently and effectively. The Program set a regional “budget” (or cap) on NOx emissions from electric power generating facilities and industrial boilers from a variety of industry types during the “ozone season” (May 1 through September 30, the months during which the formation of ozone is of greatest concern) beginning in 1999. To meet the budget, sources were required to reduce emissions significantly below 1990 baseline levels, and could use emissions trading to achieve the most cost effective reductions possible.

At the end of each ozone season, sources must demonstrate that their actual ozone season emissions do not exceed the amount of allowances held for that period. Unused allowances may be sold or banked for use in a subsequent ozone season. Regardless of the number of allowances a source holds, it may not emit at levels that would violate other Clean Air Act or state requirements. As with any cap and trade program, sources can devise their own strategies to comply with NOx emission restrictions. The ability to trade allowances places a value on emission reductions and encourages sources to develop the most cost-effective emission reduction strategies to achieve the overall required emission reductions. This approach allows the OTC states to achieve greater reductions than could be captured under a traditional regulatory approach for the same overall cost.

Under this program, the report shows that power industry summertime NOx emissions dropped significantly in 2004. Total ozone season NOx emissions from power plants and other large combustion sources were 30 percent lower than in 2003, and 50 percent lower than in 2000. The NOx reductions, when combined with other control programs have reduced ozone season NOx emissions from sources in 19 eastern states and the District of Columbia, by 70 percent below 1990 levels.

Continued NOx emission reductions are anticipated under the NOx SIP call and the CAIR. CAIR, issued March 10, 2005, permanently caps power plant emissions of SO2 and NOx in 28 eastern states and the District of Columbia. In 2015, CAIR, the NOx SIP Call and other programs in the East will reduce ozone season NOx emissions by about 50 percent and annual NOx emissions by about 60 percent from 2003 levels.

The new report, “Evaluating Ozone Control Programs in the Eastern United
States: Focus on the NOx Budget Trading Program, 2004″ is available at:
http://www.epa.gov/airtrends. Information and background on the NOx SIP
Call is available at: http://www.epa.gov/airmarkets/fednox.