Overview of EPA Policy and Guidance Supporting Innovation

1. Overview of EPA Policy and Guidance Supporting Innovation Presented by: Lydia Wegman Director, Air Quality Strategies and Standards Division EPA’s Office of Air Quality Planning and Standards August 10, 2004 EPA Air Innovations Conference

2. Clean air challenges that we face today • Protecting public health by meeting the new 8-hr ozone and PM2.5 NAAQS • Attacking the Regional Haze problem • Minimizing public exposure to harmful, toxic pollutants • Providing for controls in the most cost-effective manner … unleashing innovation

3. Clean air challenges that we face today • Many cost-effective control programs have already been implemented, for example: • VOC and NOx reasonably available control technology (RACT) • NOx SIP call reductions in the Eastern US • Cleaner motor vehicles … Tier II level controls • Reid Vapor pressure limits for gasoline • Heavy duty diesel engine controls and lower sulfur fuel • The CAIR and Regional Haze rules will help as well. However, the pool of available, cost effective SIP controls will become smaller and smaller • Innovative and voluntary control programs will play an increasingly important role in providing clean, healthy air

4. Early Action Compacts – An Innovative Approach to Cleaner Air • Compacts are voluntary program agreements to encourage local communities to take early action to reduce ozone levels for the 8-hr ozone standard • Purpose is to reduce emissions sooner than CAA otherwise requires … early SIP, early implementation … “cleaner air faster’ • Compacts approved for 32 areas covering 14 States… 12 areas received “deferred nonattainment designations” until September of 2005 … with options for renewal • Areas are encouraged to implement local control measures. A summary of EAC local measures available at www.epa.gov/ttn/naaqs/ozone/eac

5. Early Action Compact Areas

6. 2001 Economic Incentive Policy • Purpose is to improve air quality through economic incentive programs • Provides guidance for: • Four types of trading programs • Financial incentive programs • Public information programs • Clean air investment funds • The umbrella program for all nontraditional measures • Covers basic Clean Air Act requirements for creditable reduction • Enforceable, Quantifiable, Surplus and Permanent

7. Voluntary Measures Policy for Stationary Source • Guidance on SIP approval of stationary source measures that not enforceable against the source • For example, certain consumer oriented programs to reduce the use of certain products or conserve energy • SIP credit is limited to 3% of reductions required for attainment • Emission reductions may not be used for NSR or trading purposes

8. Voluntary Measures Policy for Mobile Source • Guidance on SIP approval of mobile source measures that are not enforceable against the source • SIP credit is limited to 3% of reductions required for attainment • In addition to the 3% for stationary source voluntary measures • Emission reductions may not be used for NSR or trading purposes

9. Emerging Measures Policy for Stationary Sources • Guidance for receiving SIP credit for new, relatively unproven air pollution control or emission reduction measures • For measures with relatively more uncertain quantification protocols • Allows use of emission reductions on a provisionary basis pending future verification • May not be used for NSR or trading purposes • SIP credit is limited to 3% of the reductions required for attainment • In addition to the 3% for stationary source voluntary and 3% for mobile source voluntary measures.

10. Guidance on SIP Credit for Energy Efficiency & Renewable Energy (EE/RE) Measures • Establishes a basic 4-step process to quantify SIP credits for EE/RE measures • Discusses factors that need to be taken into account (e.g., cap-and-trade programs, future control requirements) • References information databases and tools to help quantify SIP credit • Provides some real-world examples • Does not provide a formula driven cookbook approach, circumstances will likely differ from area to area

11. Guidance on Truck Idling Emission Reductions • Provides guidance for quantifying and using long duration truck idling emission reductions – in SIPS, transportation conformity, and NSR offsets • Applies to idling trucks at any location, including truck parking locations (for example, truck stops) • Provides new NOx and PM emission factors not directly available in MOBILE6 • Offers a step-by-step quatification methodology and examples • Issued January 2004, available at www.epa.gov/smartway

12. Guidance on Locomotive Idling Emission Reductions • Applies to freight locomotive engines, primarily switch yard engines • Similar to truck idling guidance • Offers a step-by-step quatification methodology and examples • Provides new NOx and PM emission factors specific to long duration idling • Issued January, 2004; available at www.epa.gov/smartway

13. SIP Credit for Cetane Additives • Provides a NOx quantification protocol for diesel fuel cetane additive programs • Provides guidance on appropriate forms of cetane additive programs and their impact on credit quantification • Discusses factors that must be taken into account (e.g. amount of additive, base fuels, types of engines, test methods) • Provides some real-world examples • Issued June 2004

14. Who to Contact for More Information (Stationary Sources) • Economic Incentive Policy • Nancy Mayer (OAQPS) 919-541-5390, mayer.nancy@epa.gov • Incorporating Voluntary and Emerging Measures in a SIP • Nancy Mayer (OAQPS) 919-541-5390, mayer.nancy@epa.gov • Guidance on SIP Credits for Emission Reductions from Electric-Sector Energy Efficiency and Renewable Energy Measures • David Solomon (OAQPS) 919-541-5375, solomon.david@epa.gov • Art Diem (OAP) 202-343-9340, diem.art@epa.gov • Early Action Compacts • David Cole (OAQPS) 919-541-5565, cole.david@epa.gov • Voluntary Residential Wood Smoke Emissions Reduction Initiative • Larry Brockman (OAQPS) 919-541-5398, brockman.larry@epa.gov

15. Who to Contact for More Information (Mobile Sources) • Voluntary Mobile Source Reductions • Mark Coryell (OTAQ) 734-214-4446 • SIP Credit for Truck Stop Idling Emission Reductions • Paul Bubbosh (OTAQ) 202-343-9322, bubbosh.paul@epa.gov • David Solomon (OAQPS) 919-541-5375, solomon.david@epa.gov • SIP Credit for Locomotive Idling Emission Reductions • Paul Bubbosh (OTAQ) 202-343-9322, bubbosh.paul@epa.gov • David Solomon (OAQPS) 919-541-5375, solomon.david@epa.gov • NSR Offsets for Truck/Locomotive Idling Emission Reduction • Nancy Mayer (OAQPS) 919-541-5390, mayer.nancy@epa.gov • Quantifying NOx Benefits for Cetane Improvement Programs for SIPs and Transportation Conformity • David Korotney (OATQ) 734-214-4507, korotney.david@epa.gov

16. Future Guidance Scheduled for Early FY 2005 • SIP Credit for Emission Reductions from Highway and Off-road Diesel Vehicles Retrofits. • Paul Bubbosh (OTAQ) 202-343-9322, bubbosh.paul@epa.gov • SIP Credit for Emission Reductions from Stationary Diesel Internal Combustion Engines • Sims Roy (OAQPS) 919-541-5263, roy.sims@epa.gov • OAP Supplemental Environmental Project (SEP) Toolkit for State and local governments • Art Diem (OAP) 202-343-9340, diem.art@epa.gov