Emissions Budget and Allowance Allocations for Indiana Under the Revised Cross-State Air Pollution Rule Update

<RULE> ENVIRONMENTAL PROTECTION AGENCY <CFR>40 CFR Part 97</CFR> <DEPDOC>[EPA-HQ-OAR-2025-0190; FRL-12724-01-OAR]</DEPDOC> <RIN>RIN 2060-AW78</RIN> <SUBJECT>Emissions Budget and Allowance Allocations for Indiana Under the Revised Cross-State Air Pollution Rule Update</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Environmental Protection Agency (EPA). <HD SOURCE="HED">ACTION:</HD> Interim final rule; request for comment. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Environmental Protection Agency (EPA) is taking interim final action to adjust the Revised Cross-State Air Pollution Rule (CSAPR) Update “budget” for nitrogen oxides (NO <E T="52">X</E> ) emissions from Indiana electricity generating units (EGUs) during the May-September “ozone season” for 2024 and subsequent years. Relatedly, EPA is also adjusting the default unit-level allocations of emission allowances to Indiana EGUs for 2024 and subsequent years in accordance with the adjustments to the state emissions budget. When originally establishing state emissions budgets and default unit-level allocations for 2024 and subsequent years in the Revised CSAPR Update rulemaking, EPA relied in part on announcements from EGU owners regarding their plans to retire certain EGUs before the 2024 ozone season. The purpose of the adjustments being made in this action is to account for the subsequent decisions by some EGU owners to defer or cancel the previously announced retirement plans. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This interim final rule is effective May 20, 2025. Comments on this rule must be received on or before June 20, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit comments, identified by Docket ID No. EPA-HQ-OAR-2025-0190, at <E T="03">www.regulations.gov.</E> Comments received may be posted without change to <E T="03">www.regulations.gov,</E> including any personal information provided. For detailed instructions on sending comments, see the “Public Participation” heading of the <E T="02">SUPPLEMENTARY INFORMATION</E> section of this document. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Morgan Riedel, Clean Air and Power Division, Office of Atmospheric Protection, Office of Air and Radiation, U.S. Environmental Protection Agency, Mail Code 6204A, 1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number: (202) 564-1144; email address: <E T="03">riedel.morgan@epa.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Table of Contents:</HD> <EXTRACT> <FP SOURCE="FP-2">I. General</FP> <FP SOURCE="FP1-2">A. Public Participation</FP> <FP SOURCE="FP1-2">B. Potentially Affected Entities</FP> <FP SOURCE="FP1-2">C. Statutory Authority</FP> <FP SOURCE="FP-2">II. Background and Overview</FP> <FP SOURCE="FP1-2">A. The Revised CSAPR Update</FP> <FP SOURCE="FP1-2">B. Adjustments To Address Superseded EGU Retirement Plans</FP> <FP SOURCE="FP-2">III. Adjustments to Indiana State Emissions Budget and Variability Limit</FP> <FP SOURCE="FP1-2">A. Determination of Adjusted State Emissions Budget</FP> <FP SOURCE="FP1-2">B. Determination of Adjusted Variability Limit</FP> <FP SOURCE="FP-2">IV. Adjustments to Indiana EGUs' Default Unit-Level Allowance Allocations</FP> <FP SOURCE="FP1-2">A. Determination of Adjusted Allowance Allocations</FP> <FP SOURCE="FP1-2">B. Notice of Availability of Data on Adjusted Allowance Allocations</FP> <FP SOURCE="FP-2">V. Rulemaking Procedures and Findings of Good Cause</FP> <FP SOURCE="FP-2">VI. Request for Comment</FP> <FP SOURCE="FP-2">VII. Statutory and Executive Order Reviews</FP> <FP SOURCE="FP1-2">A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review</FP> <FP SOURCE="FP1-2">B. Executive Order 14192: Unleashing Prosperity Through Deregulation</FP> <FP SOURCE="FP1-2">C. Paperwork Reduction Act</FP> <FP SOURCE="FP1-2">D. Regulatory Flexibility Act</FP> <FP SOURCE="FP1-2"> E. Unfunded Mandates Reform Act </FP> <FP SOURCE="FP1-2">F. Executive Order 13132: Federalism</FP> <FP SOURCE="FP1-2">G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments</FP> <FP SOURCE="FP1-2">H. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks</FP> <FP SOURCE="FP1-2">I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use</FP> <FP SOURCE="FP1-2">J. National Technology Transfer and Advancement Act</FP> <FP SOURCE="FP1-2">K. Congressional Review Act</FP> <FP SOURCE="FP1-2">L. Judicial Review</FP> </EXTRACT> <HD SOURCE="HD1">I. General</HD> <HD SOURCE="HD2">A. Public Participation</HD> Submit your written comments, identified by Docket ID No. EPA-HQ-OAR-2025-0190, at <E T="03">www.regulations.gov.</E> Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from the docket. EPA may publish any comment received to its public docket. Do not submit to <E T="03">www.regulations.gov</E> any information you consider to be Confidential Business Information (CBI), Proprietary Business Information (PBI), or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission ( <E T="03">i.e.,</E> on the web, cloud, or other file sharing system). Please visit <E T="03">www.epa.gov/dockets/commenting-epa-dockets</E> for additional submission methods; the full EPA public comment policy; information about CBI, PBI, or multimedia submissions; and general guidance on making effective comments. <HD SOURCE="HD2">B. Potentially Affected Entities</HD> This action may affect any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine located in Indiana and serving at any time on or after January 1, 2005, a generator with nameplate capacity of more than 25 MWe (megawatt-electric) producing electricity for sale. The North American Industry Classification System (NAICS) industry group for most affected entities is NAICS code 221112, Fossil Fuel Electric Power Generation. This information on potentially affected entities is not intended to be exhaustive. To determine whether your entity is affected by this action, you should carefully examine the applicability criteria for the CSAPR NO <E T="52">X</E> Ozone Season Group 2 Trading Program found in 40 CFR 97.804. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the <E T="02">FOR FURTHER INFORMATION CONTACT</E> section. <HD SOURCE="HD2">C. Statutory Authority</HD> Statutory authority to issue the amendments finalized in this action is provided by the same Clean Air Act (CAA) provisions that provided authority to issue the regulations being amended: CAA section 110(a) and (c), 42 U.S.C. 7410(a) and (c) (state implementation plan (SIP) and federal implementation plan (FIP) requirements, including requirements for mitigation of interstate air pollution), and CAA section 301, 42 U.S.C. 7601 (general rulemaking authority). Statutory authority for the rulemaking procedures followed in this action is provided by Administrative Procedure Act (APA) section 553, 5 U.S.C. 553. <HD SOURCE="HD1">II. Background and Overview</HD> <HD SOURCE="HD2">A. The Revised CSAPR Update</HD> CAA section 110(a)(2)(D)(i)(I), also known as the “good neighbor” provision, requires each state's SIP to include provisions sufficient to “prohibit[ ], consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will . . . contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any [national ambient air quality standard (NAAQS)].” EPA often refers to the emissions reduction requirements under this provision as “good neighbor obligations” and submissions addressing these requirements as “good neighbor SIPs.” CAA section 110(c)(1) requires the EPA Administrator to promulgate a FIP at any time within 2 years after the Administrator: (i) finds that a state has failed to make a required SIP submission; (ii) finds a SIP submission to be incomplete pursuant to CAA section 110(k)(1)(C); or (iii) disapproves a SIP submission. This obligation applies unless the state corrects the deficiency through a SIP revision that the Administrator approves before the FIP is promulgated. In March 2021, acting pursuant to CAA sections 110(a)(2)(D)(i)(I) and 110(c)(1), EPA promulgated the Revised CSAPR Update. <SU>1</SU> <FTREF/> The rule determined the good neighbor obligations of 12 states, including Indiana, with respect to the 2008 ozone NAAQS and established FIP requirements for EGUs in those states to address the states' obligations by reducing ozone-season emissions of NO <E T="52">X</E> , an ozone precursor, starting in 2021. The NO <E T="52">X</E> emissions reduction requirements were implemented through the mechanism of an emission allowance trading program. <FTNT> <SU>1</SU>  Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, 86 FR 23054 (April 30, 2021). </FTNT> In March 2023, again acting pursuant to CAA sections 110(a)(2)(D)(i)(I) and 110(c)(1), EPA promulgated the Good Neighbor Plan. <SU>2</SU> <FTREF/> The rule determined the good neighbor obligations of 23 states, including Indiana, with respect to the 2015 ozone NAAQS and established FIP requirements for EGUs and certain other types of emissions sources in t ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 80k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━