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Clean Air Rules: A New Roadmap for the Power Sector

How new market-based regulations fit with today’s programs.

Fortnightly Magazine - June 2007

SO 2 and NO X controls already in place in the CAIR region as well as those already committed or projected under CAIR.

The Clean Air Mercury Rule

CAMR requires all 50 states, D.C., and two tribes to regulate mercury emissions from coal-fired EGUs. CAMR establishes “standards of performance” limiting mercury emissions from new and existing coal-fired power plants and, like CAIR, creates a model cap-and-trade program with two phases of reductions. The first phase cap is 38 tons, taking advantage of “co-benefit” reductions—mercury reductions achieved by reducing SO 2 and NO X emissions under CAIR—to fulfill EPA’s requirement to act on mercury emissions. The second phase, beginning in 2018, goes further to reduce emissions to 15 tons upon full implementation. CAMR sets an emissions-reduction requirement in the form of an annual budget for each state and two tribes in accordance with the two caps. New coal-fired power plants will have to meet new-source performance standards in addition to being subject to the caps.

EPA established annual budgets for each state, and states must ensure that current and future mercury emissions from coal-fired EGUs do not exceed the annual state budget. Like CAIR, CAMR does not exempt the units that may be exempt under the Acid Rain Program. The summary of applicability across programs in Table 1 includes general CAMR applicability for comparison.

Furthermore, under CAMR, affected coal-fired electric utility units will be required to continuously monitor mercury mass emissions for the first time, regardless of whether or not they will be participating in the trading program. Monitoring technologies will be subject to rigorous certification and quality assurance/quality control require- ments under 40 CFR Part 75. Affected sources are required to install and certify continuous emissions or sorbent trap monitoring systems by Jan. 1, 2009. This new requirement is one of the primary areas of focus for EPA’s CAMR implementation efforts.

Recent work by both EPA and industry has advanced mercury monitoring systems, reference testing methods, and calibration standards to a point that measuring capabilities that had limited feasibility a few years ago now are fully or nearly ready and even commercially available. Over the past year, the performance and reliability of mercury monitoring systems substantially have improved as a result of field demonstrations and testing by EPA and industry. EPA continues to work closely with the regulated community, monitoring equipment and software vendors, academia, and other organizations to ensure timely implementation of a technically sound, effective CAMR mercury monitoring program.

The Mercury Trading Program and State Activity

The trading program under CAMR will work very similarly to existing programs and the SO 2 and NO X programs under CAIR, with two notable differences between the CAMR and CAIR trading programs. First, there are no opt-in provisions included in CAMR; second, allowances under CAMR are measured in ounces, rather than tons.

Even with some states choosing to control mercury emissions directly, EPA expects a robust trading program. In July 2006, EPA conducted limited modeling meant to be illustrative of a reduced market based on the states and tribes EPA projected would participate