[Federal Register Volume 86, Number 210 (Wednesday, November 3, 2021)]
[Proposed Rules]
[Pages 60602-60612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23638]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R02-OAR-2021-0631; FRL-9125-01-R2]


Disapproval of Interstate Transport Requirements for the 2008 
Ozone National Ambient Air Quality Standards; New York and New Jersey

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The EPA is proposing to disapprove State Implementation Plan 
(SIP) submissions from New York and New Jersey regarding the 
requirements of section 110(a)(2)(D)(i)(I) of the Clean Air Act (CAA) 
for the 2008 ozone national ambient air quality standards (NAAQS). This 
provision requires that each state's SIP contain adequate provisions to 
prohibit emissions from within the state from significantly 
contributing to nonattainment or interfering with maintenance of the 
NAAQS in other states. This requirement is part of the broader 
``infrastructure'' requirements of CAA section 110(a)(2), which are 
designed to ensure that the structural components of each state's air 
quality management program are adequate to meet the state's 
responsibilities under the CAA.

DATES: Written comments must be received on or before December 3, 2021.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R02-OAR-2021-0631 at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. The EPA may publish any 
comment received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
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. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the web, cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit

[[Page 60603]]

http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Kenneth Fradkin, Environmental 
Protection Agency, Region 2, 290 Broadway, 25th Floor, New York, NY 
10007-1866, (212) 637-3702, or by email at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background
II. The 4-Step Interstate Transport Framework and EPA's Revised 
Cross-State Air Pollution Rule Update
III. Summary of New York's SIP Revision and the EPA's Analysis
IV. Summary of New Jersey's SIP Revision and the EPA's Analysis
V. What action is EPA taking?
VI. Statutory and Executive Order Reviews

I. Background

    Section 110(a) of the CAA imposes an obligation upon states to 
submit SIPs that provide for the implementation, maintenance, and 
enforcement of a new or revised NAAQS within 3 years following the 
promulgation of that NAAQS. Section 110(a)(2) lists specific 
requirements that states must meet in these SIP submissions, as 
applicable. The EPA refers to this type of SIP submission as the 
``infrastructure'' SIP because the SIP ensures that states can 
implement, maintain, and enforce the air standards. Within these 
requirements, CAA section 110(a)(2)(D)(i)(I) contains requirements to 
address interstate transport of NAAQS pollutants or their precursors. 
CAA section 110(a)(2)(D)(i)(I), which is also known as the ``good 
neighbor'' provision, requires SIPs to contain provisions prohibiting 
any source or other type of emissions activity within the State from 
emitting any air pollutant in amounts that will contribute 
significantly to nonattainment of the NAAQS in any other state 
(commonly referred to as prong 1) or interfere with maintenance of the 
NAAQS in any other state (prong 2). A SIP revision submitted under this 
provision is often referred to as an ``interstate transport SIP'' or a 
good neighbor SIP. In this action, EPA proposes to disapprove SIP 
submissions from the states of New York and New Jersey with respect to 
these good neighbor requirements.
    On March 12, 2008, EPA strengthened the NAAQS for ozone. 73 FR 
16435 (March 27, 2008). The EPA revised the level of the 8-hour ozone 
NAAQS from 0.08 parts per million (ppm) to 0.075 ppm. The EPA also 
revised the secondary 8-hour standard to the level of 0.075 ppm making 
it identical to the revised primary standard. Infrastructure SIPs 
addressing the revised standard, including the interstate transport 
requirements, were due March 12, 2011.\1\
---------------------------------------------------------------------------

    \1\ See CAA section 110(a)(1).
---------------------------------------------------------------------------

    On April 4, 2013, the New York State Department of Environmental 
Conservation (NYSDEC) submitted a revision to its SIP to address 
requirements under section 110(a)(2) of the CAA (i.e., the 
infrastructure requirements) related to the 2008 ozone NAAQS, including 
interstate transport. The EPA disapproved the portion of that submittal 
addressing the good neighbor provision (i.e., CAA section 
110(a)(2)(D)(i)(I) (prongs 1 and 2)) for the 2008 ozone NAAQS on August 
12, 2016.\2\ The EPA's August 12, 2016 disapproval of the portion of 
New York's submittal addressing the good neighbor provision for the 
2008 ozone NAAQS was based on the EPA's determination that New York's 
SIP was deficient for a number of reasons.\3\
---------------------------------------------------------------------------

    \2\ 81 FR 58849 (August 26, 2016).
    \3\ See id.
---------------------------------------------------------------------------

    On October 17, 2014, the New Jersey Department of Environmental 
Protection (NJDEP) submitted a revision to its SIP to address 
requirements under section 110(a)(2) of the CAA (the infrastructure 
requirements) related to the 2008 ozone NAAQS, including interstate 
transport. On March 30, 2016, New Jersey withdrew the portion of the 
submittal addressing the good neighbor provision for the 2008 ozone 
NAAQS.
    On October 26, 2016, the EPA published the Cross-State Air 
Pollution Rule Update (or CSAPR Update),\4\ which promulgated Federal 
Implementation Plans (FIPs) for 22 states, including New York and New 
Jersey, that the EPA found failed to either submit a complete good 
neighbor SIP, or for which EPA issued a final rule disapproving their 
good neighbor SIPs for the 2008 ozone NAAQS. The FIPs promulgated for 
these states included new nitrogen oxide (NOX) ozone season 
emissions budgets for Electric Generating Units (EGUs). These emissions 
budgets took effect in 2017 in order to assist downwind states with 
attainment of the 2008 ozone NAAQS by the Moderate area attainment date 
of July 11, 2018. In the CSAPR Update, based on the information 
available at the time, the EPA acknowledged that the promulgated FIPs 
for all of the 22 states except Tennessee only partially addressed good 
neighbor obligations under the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \4\ ``Cross-State Air Pollution Rule Update for the 2008 Ozone 
NAAQS,'' 81 FR 74504 (October 26, 2016).
---------------------------------------------------------------------------

    In October 2017, the EPA issued guidance \5\ to states to 
facilitate their efforts to develop SIPs that address their outstanding 
good neighbor obligations for the 2008 ozone NAAQS. The EPA guidance 
provided future year ozone design values and contribution modeling 
outputs for monitors in the United States based on air quality modeling 
for 2023. The EPA's modeling indicated that there were no monitoring 
sites, outside of California, projected to have nonattainment or 
maintenance problems in 2023.
---------------------------------------------------------------------------

    \5\ ``Supplemental Information on the Interstate Transport State 
Implementation Plan Submissions for the 2008 Ozone National Ambient 
Air Quality Standards under Clean Air Act Section 
1110(a)(2)(D)(i)(I)'', October 27, 2017. Available at https://www.epa.gov/sites/production/files/2017-10/documents/final_2008_o3_naaqs_transport_memo_10-27-17b.pdf.
---------------------------------------------------------------------------

    On December 21, 2018, the EPA published the Cross-State Air 
Pollution Rule Close-Out (or CSAPR Close-Out),\6\ which found, in the 
exercise of the EPA's FIP authority under CAA section 110(c), that the 
CSAPR Update was a complete remedy based on air quality analysis of the 
year 2023. This finding was based on the same modeling results released 
in EPA's October 2017 guidance described in this section.
---------------------------------------------------------------------------

    \6\ ``Determination Regarding Good Neighbor Obligations for the 
2008 Ozone National Ambient Air Quality Standard,'' 83 FR 65878 
(December 21, 2018).
---------------------------------------------------------------------------

    On September 25, 2018, the NYSDEC submitted a SIP revision to 
address the EPA's August 26, 2016 disapproval of the portion of New 
York's April 4, 2013 submittal addressing the good neighbor provision 
for the 2008 ozone NAAQS. On May 13, 2019, New Jersey submitted a SIP 
revision, which also addressed the good neighbor provision for the 2008 
ozone NAAQS.\7\ These SIP submittals were not required as EPA's finding 
in the CSAPR Close-out was that there were no further obligations in 
addition to the CSAPR Update FIPs for either of these states.
---------------------------------------------------------------------------

    \7\ New Jersey's SIP revision also addressed infrastructure and 
good neighbor provisions for the 2015 ozone NAAQS. The EPA will act 
on that portion of the submittal in separate actions at a later 
date.
---------------------------------------------------------------------------

    On September 13, 2019, the United States Court of Appeals for the 
District of Columbia Circuit (D.C. Circuit) remanded the CSAPR Update, 
concluding that it unlawfully allowed upwind states to continue their 
significant contributions to downwind air quality problems beyond the 
statutory dates by which downwind States must demonstrate their 
attainment of ozone air quality standards. Wisconsin v. EPA, 938 F.3d 
303, 318-20 (D.C. Cir. 2019) (Wisconsin) (per curiam); see also id. 
336-37 (concluding that remand without vacatur was appropriate). 
Subsequently, on October 1, 2019, in a judgment order,

[[Page 60604]]

the D.C. Circuit vacated the CSAPR Close-Out on the same grounds on 
which it had remanded without vacatur the CSAPR Update in Wisconsin. 
New York v. EPA, 781 Fed. App'x 4, 7 (D.C. Cir. 2019) (New York). The 
court found the CSAPR Close-Out inconsistent with the Wisconsin holding 
because the rule analyzed the year 2023 rather than 2021 and failed to 
demonstrate that it was an impossibility to address significant 
contribution by the 2021 Serious area attainment date (``the next 
applicable attainment date'').
    In response to the Wisconsin remand and the New York vacatur, on 
March 15, 2021, the EPA finalized the Revised Cross-State Air Pollution 
Rule Update (or Revised CSAPR Update).\8\ The Revised CSAPR Update 
amended the CSAPR Update FIPs for New York and New Jersey for the 2008 
ozone NAAQS by issuing revised EGU NOX ozone season budgets 
that reflect additional emissions reductions beginning with the 2021 
ozone season. In accordance with Wisconsin and New York, the EPA 
aligned its analysis and the implementation of emissions reductions 
required to address significant contribution with the 2021 ozone 
season, which corresponds to the July 20, 2021, Serious area attainment 
date for the 2008 ozone NAAQS.\9\ The EPA further determined which 
emissions reductions would be impossible to achieve by the 2021 
attainment date and whether any such additional emissions reductions 
would be required beyond that date. See Wisconsin, 938 F.3d at 320; New 
York, 781 Fed. App'x at 7.
---------------------------------------------------------------------------

    \8\ ``Revised Cross-State Air Pollution Rule Update for the 2008 
Ozone NAAQS,'' 86 FR 23054 (April 30, 2021).
    \9\ See CAA section 181(a); 40 CFR 51.1103.
---------------------------------------------------------------------------

II. The 4-Step Interstate Transport Framework and EPA's Revised Cross-
State Air Pollution Rule Update

    The EPA is using the 4-step interstate transport framework (or 4-
step framework) to evaluate New York 's September 25, 2018 SIP 
submittal and New Jersey's May 13, 2019 SIP submittal addressing the 
good neighbor provision for the 2008 ozone NAAQS. In particular, EPA is 
applying the results of the Agency's analyses and determinations for 
the Revised CSAPR Update in evaluating New York and New Jersey's good 
neighbor SIP submittals.
    Through the development and implementation of several previous 
rulemakings, the EPA, working in partnership with states, established 
the following 4-step framework to address the requirements of the good 
neighbor provision for ground-level ozone NAAQS: (1) Identifying 
downwind receptors that are expected to have problems attaining or 
maintaining the NAAQS; (2) determining which upwind states contribute 
to these identified problems in amounts sufficient to ``link'' them to 
downwind air quality problems; (3) for states linked to downwind air 
quality problems, identifying upwind emissions that significantly 
contribute to downwind nonattainment or interfere with downwind 
maintenance of the NAAQS; and (4) for states that are found to have 
emissions that significantly contribute to downwind nonattainment or 
interfere with maintenance of the NAAQS downwind, implementing the 
necessary emissions reductions through enforceable measures. The EPA 
applied this 4-step framework in both the CSAPR Update and the Revised 
CSAPR Update.
    Consistent with Wisconsin and New York, the EPA used 2021 as the 
analytic year in the Revised CSAPR Update for assessing significant 
contribution. The year 2021 is appropriate because it coincides with 
the July 20, 2021 Serious area attainment date under the 2008 ozone 
NAAQS. The Revised CSAPR Update used the most up-to-date information 
that the EPA had developed to inform the analysis of upwind state 
linkages to downwind air quality problems at steps 1 and 2. The EPA 
used air quality modeling \10\ and the latest available ambient air 
quality measurements to (1) identify locations in the U.S. where the 
EPA expects nonattainment or maintenance problems (i.e., nonattainment 
or maintenance receptors), and (2) quantify the projected contributions 
from upwind states to downwind ozone concentrations at those receptors.
---------------------------------------------------------------------------

    \10\ The EPA used CAMx version 7 beta 6, which was most recent 
version of CAMx available at the time, for identifying projected 
nonattainment and maintenance sites. The EPA is not reopening the 
modeling analysis for further public comment in this rulemaking for 
the evaluation of New York and New Jersey's 2008 ozone NAAQS good 
neighbor SIP submittals.
---------------------------------------------------------------------------

    For the Revised CSAPR Update (as well as other previous transport 
rulemakings), the EPA defined ``nonattainment'' receptors as those 
monitoring sites that were projected to exceed the NAAQS in the 
appropriate future analytic year, while ``maintenance'' receptors are 
monitoring sites that are projected to have difficulty maintaining the 
relevant NAAQS in a scenario that takes into account historical 
variability in air quality at that receptor. Based on the EPA's 
analysis at step 1, the Agency identified four nonattainment and/or 
maintenance receptors in 2021 (i.e., three receptors in Connecticut and 
one in Texas).
    At step 2, the EPA used air quality modeling to quantify the 
contributions in 2021 from upwind states to ozone concentrations at 
individual monitoring sites. Once quantified, the EPA then evaluated 
these contributions relative to a screening threshold of 1 percent of 
the NAAQS (i.e., 0.75 parts per billion (ppb)) for those monitoring 
sites identified as nonattainment and/or maintenance receptors in step 
1. States with contributions that equal or exceed 1 percent of the 
NAAQS were identified as warranting further analysis. States with 
contributions below 1 percent of the NAAQS were found to not 
significantly contribute to nonattainment or interfere with maintenance 
of the NAAQS in downwind states.
    At step 3, the EPA applied the multi-factor test, which considered 
downwind air quality impacts, cost, and available emissions reductions 
to determine the amount of linked upwind states' emissions that 
``significantly'' contribute to downwind nonattainment or maintenance 
receptors. The EPA applied the multi-factor test to both EGU and non-
EGU source categories and assessed potential emissions reductions in 
all years for which there is a potential remaining interstate ozone 
transport problem (i.e., through 2025), in order to ensure a full 
remedy. After assessing potential control strategies, the EPA 
identified an EGU control stringency that reflected the optimization of 
existing Selective Catalytic Reduction (SCR) controls and installation 
of state-of-the-art NOX combustion controls, represented by 
a cost of $1,600 per ton of NOX reduced, and the 
optimization of existing Selective Non-Catalytic Reduction (SNCR) 
controls, represented by a cost of $1,800 per ton of NOX 
reduced. At the selected EGU control stringency, downwind ozone air 
quality improvements continue to be maximized relative to a 
representative marginal cost. That is, the ratio of emissions 
reductions to marginal cost and the ratio of ozone improvements to 
marginal cost are maximized relative to the other control stringency 
levels evaluated. The EPA determined that these cost-effective EGU 
NOX reductions will make meaningful and timely improvements 
in downwind ozone air quality.
    The EPA also concluded that there are relatively fewer emissions 
reductions available for non-EGU sources at a cost threshold comparable 
to the cost threshold selected for EGUs. In EPA's

[[Page 60605]]

judgment, such reductions were estimated to have a much smaller effect 
on any downwind receptor in the year by which the EPA found such 
controls could be installed. For those reasons, the EPA found that 
limits on ozone season NOX emissions from non-EGU sources 
were not required to eliminate significant contribution or interference 
with maintenance under the 2008 ozone NAAQS.
    Based on the EPA's analysis at step 3, the Agency promulgated EGU 
NOX ozone season emissions budgets developed using a uniform 
control stringency of optimization of existing SCRs and SNCRs, and 
installation of state-of-the-art NOX combustion controls for 
certain states. The EPA determined that with implementation of this 
control strategy, the EPA will have fully addressed good neighbor 
obligations for the 2008 ozone NAAQS for New York and New Jersey, among 
other states.
    The EPA aligned the implementation of emissions budgets with 
relevant attainment dates for the 2008 ozone NAAQS, consistent with CAA 
requirements and the D.C. Circuit's decisions in Wisconsin and New 
York. The implementation of these emissions budgets starts with the 
2021 ozone season in alignment with the July 20, 2021 Serious 
attainment date. The EPA further determined which emissions reductions 
were impossible to achieve by the 2021 attainment date and whether any 
such additional emissions reductions should be required beyond that 
date. The EPA estimated that one part of the selected control 
strategy--installation of state-of-the-art NOX combustion 
controls--requires approximately one to six months depending on the 
unit. Recognizing that the final rule would become effective slightly 
after the start of the 2021 ozone season, the EPA determined it was not 
possible to install state-of-the-art NOX combustion controls 
on a regional scale by the 2021 ozone season. Therefore, the 2021 ozone 
season emissions budgets reflect only the optimization of existing SCR 
and SNCR controls at the affected EGUs, but the emission budgets for 
the 2022 ozone season and beyond reflect both the continued 
optimization of existing SCR and SNCR controls and installation of 
state-of-the-art NOX combustion controls.
    The EPA's air quality projections anticipate that with the 
implementation of the identified control strategy for EGUs, downwind 
nonattainment and maintenance problems for the 2008 ozone NAAQS will 
persist through the 2024 ozone season. Therefore, the EPA adjusted 
emission budgets for upwind states that remain linked to downwind 
nonattainment and maintenance problems through the 2024 ozone season to 
incentivize the continued optimization of existing SCR and SNCR 
controls, and installation of state-of-the-art NOX 
combustion controls. The 2024 emission budgets then continue to apply 
in each year thereafter.
    To apply the fourth step of the 4-step framework (i.e., 
implementation), the EPA included enforceable measures in the 
promulgated FIPs to achieve the required emission reductions in each of 
the linked upwind states, including New York and New Jersey. In 
particular, following the model of prior CSAPR rulemakings, the EPA 
implemented an interstate emissions trading program (the Group 3 
trading program) for the linked upwind states to implement the EGU 
emissions budgets established at step 3.
    Additional information regarding the provisions and supporting 
analysis for the Revised CSAPR Update can be found in the final rule 
and in the technical supporting documents for the rulemaking.\11\
---------------------------------------------------------------------------

    \11\ See Docket ID No. EPA-HQ-OAR-2020-0272 at the 
www.regulations.gov website. Additional information is also 
available at www.epa.gov/csapr/revised-cross-state-air-pollution-rule-update.
---------------------------------------------------------------------------

III. Summary of New York's SIP Revision and the EPA's Analysis

What did New York submit?

    In its September 25, 2018 SIP submittal, New York followed the 4-
step framework for determining its good neighbor obligations. New York 
provided air quality modeling and a list of already-enacted and ``on-
the-way'' state air pollution control measures to conclude that New 
York satisfied its good neighbor obligations for the 2008 ozone NAAQS.
    New York submitted projection modeling for 2023 based on the 
Community Multiscale Air Quality Model (CMAQ) that shows the Westport, 
CT monitoring site as a nonattainment receptor in 2023. New York also 
submitted state-by-state contribution modeling for 2023 based on the 
Comprehensive Model with Extensions (CAMx) modeling performed by the 
Maryland Department of the Environment (MDE). New York coupled its CMAQ 
projection modeling with MDE's CAMx contribution modeling to show that 
New York is linked to the Westport monitoring site \12\ using a 1 
percent of the NAAQS threshold. Based on this information, New York 
conceded that it was linked to at least one Connecticut receptor at 
steps 1 and 2.
---------------------------------------------------------------------------

    \12\ In the CAMx modeling Westport was not projected to be a 
nonattainment or maintenance receptor in 2023.
---------------------------------------------------------------------------

    New York asserted that, despite its contributions, the State had 
met its good neighbor obligations through the implementation and 
enforcement of stringent NOX and VOC control measures that 
the State asserted go well beyond the EPA presumptive cost threshold in 
the CSAPR Update for highly cost-effective emissions reductions, and 
through the ongoing adoption and revision of additional control 
measures to further ensure the reduction of ozone in both New York 
State and downwind areas.
    New York cited its Reasonably Available Control Technology (RACT) 
rules, which has been required on major sources of NOX 
throughout the State since 1995, and has been periodically updated (in 
1999, 2004, and 2010) to keep up with advances in control technology. 
New York indicated that the State's RACT presumptive emissions limits 
and facility-specific emissions limits are based on inflation-adjusted 
control cost valued at $5,500 per ton of NOX reduced, which 
New York indicated was consistent with typical costs to install SCR 
units, and above the EPA's $1,400 per ton control cost threshold used 
for the CSAPR Update that reflected the cost of turning on already-
existing SCR control units. New York also noted that the State's EGU 
NOX emissions rates are among the lowest in the country, as 
reflected in its CSAPR Update ozone season emissions budget, which is 
lower than all other states with the exception of New Jersey and 
Delaware. New York indicated that its $5,500 RACT control cost also 
applied to non-EGUs.
    New York also stated in the September 2018 submittal that it was in 
various stages of the rulemaking process for additional measures to 
further control NOX and VOC emissions from EGU, non-EGU, 
area, and mobile sources.
    Additional NOX reductions would be obtained, according 
to the State, through the following regulatory updates that were, at 
the time of the submittal, under development by the State: establishing 
new NOX limits for simple cycle combustion turbines (or 
``peaking'' \13\ units), which New York noted would benefit the NYMA on 
hot summer days that are most conducive to ozone

[[Page 60606]]

formation (i.e., high electric demand days) (6 NYCRR Part 227); 
establishing NOX limits for distributed generation sources 
(6 NYCRR Part 222); applying NOX RACT requirements to 
municipal waste combustors (6 NYCRR Part 219); requiring new 
installation, recordkeeping and reporting requirements for aftermarket 
catalytic converters (Part 218); and the adoption of the CSAPR Update 
trading program (6 NYCRR Part 243).
---------------------------------------------------------------------------

    \13\ Simple cycle combustion turbines, also known as peaking 
units (peakers), run to meet electric load during periods of peak 
electricity demand. These peakers typically operate during periods 
of elevated temperature when electric demand increases. Older simple 
cycle combustion turbines sometimes have no or only low-level 
NOX emission controls.
---------------------------------------------------------------------------

    New York's submittal also indicates that it will further control 
area-source VOC emissions through updates to State VOC RACT regulations 
for Oil and Gas (6 NYCRR Part 203); Architectural and Industrial 
Maintenance Coatings (6 NYCRR Part 205); Solvent Metal Cleaning 
Processes (Part 226); Motor Vehicle and Mobile Equipment Refinishing 
and Recoating Operations (6 NYCRR Part 228, Subpart 228-1); Gasoline 
Dispensing Sites and Transport Vehicles (6 NYCRR Part 230); and 
Consumer Products (6 NYCRR Part 235).
    In their submittal to the EPA, New York commented that the State's 
mobile on-road sector alone (without considering other state emissions) 
``significantly impacted downwind monitors, with 2023 contributions as 
high as 4.64 ppb at the Greenwich, Connecticut monitor'' (site 
090010017), based on the University of Maryland CAMx modeling.\14\
---------------------------------------------------------------------------

    \14\ See Appendix C of New York's submittal.
---------------------------------------------------------------------------

    New York stated that the on-road sector is controlled through the 
inspection/maintenance and anti-idling standards in 6 NYCRR Part 217, 
``Motor Vehicle Emissions,'' and the implementation of the California 
Low-Emission Vehicle Standards under 6 NYCRR Part 218, ``Emission 
Standards for Motor Vehicles and Motor Vehicle Engines.''

EPA's Review

    The EPA is proposing to find that the New York September 2018 SIP 
revision does not meet the State's obligations with respect to 
prohibiting emissions that will contribute significantly to 
nonattainment or interfere with maintenance of the 2008 ozone NAAQS in 
any other state.
    As previously indicated in this section, New York acknowledged 
linkages to a downwind receptor using modeling it submitted. New York 
evaluated contributions in 2023 rather than 2021. Although EPA's 
October 27, 2017 guidance memorandum had recommended that 2023 be used 
for states to develop, supplement, or resubmit good neighbor SIPs for 
the 2008 ozone NAAQS to fully address their interstate transport 
obligations, that guidance memorandum was issued prior to the Wisconsin 
and New York decisions by the D.C. Circuit. After Wisconsin and New 
York, the year 2023 is no longer an appropriate analytic year because 
that is past the next applicable attainment date. New York's SIP 
revision relied on the incorrect analytic year. Given the July 20, 
2021, Serious attainment date, the appropriate analytic year is 2021.
    Based on the air quality analysis for the Revised CSAPR Update, the 
EPA identified potential nonattainment receptors in 2021 in Stratford, 
Connecticut (monitor ID 090013007) and Westport, Connecticut (monitor 
ID 090019003), and maintenance areas in Madison, Connecticut (monitor 
ID 090099002) and Houston, Texas (monitor ID 482010024). New York was 
linked to the nonattainment and maintenance receptor sites at the 
Connecticut sites based on contribution above the threshold of 1 
percent of the 2008 ozone NAAQS (i.e., 0.75 ppb). The levels of New 
York State contribution to each nonattainment and maintenance receptor 
in 2021 are shown in Table 1:

             Table 1--New York Contributions to Downwind Nonattainment and Maintenance Areas in 2021
----------------------------------------------------------------------------------------------------------------
                                          Nonattainment receptors                  Maintenance receptors
                                 -------------------------------------------------------------------------------
              State                  Stratford, CT
                                         (ppb)        Westport, CT (ppb)  Madison, CT  (ppb)  Houston, TX  (ppb)
----------------------------------------------------------------------------------------------------------------
New York........................              14.42               14.44               12.54                0.00
----------------------------------------------------------------------------------------------------------------

    As previously noted, New York asserted in its September 2018 
submittal that, despite its contributions, the State had met its good 
neighbor obligations ``through the implementation and enforcement of 
stringent NOX and VOC control measures that go beyond the 
EPA presumptive cost threshold in the CSAPR Update for highly cost-
effective emissions reductions, and through the ongoing adoption and 
revision of additional control measures to further ensure the reduction 
of ozone in both New York [State] and downwind areas.''
    The State, however, did not adequately demonstrate that it was 
controlling its emissions, despite the fact that New York conceded its 
emissions were linked to a Connecticut receptor (at step 1). The SIP 
submittal pointed to existing NOX RACT measures with 
presumptive and facility-specific emission limits based on $5,500 per 
ton of NOX reduced, as well as ongoing state and local 
emission control efforts to meet its good neighbor obligations. 
However, the State did not analyze whether additional control measures 
could reduce the impact of New York's emissions on out of state 
receptors. Any additional control measures identified by the analysis 
would need to be submitted to the EPA for approval into the SIP, 
approved by the EPA, and made federally enforceable. Step 3 of the good 
neighbor framework requires that the state (or the EPA in the case of a 
FIP) conduct a more rigorous analysis of what emission controls are 
necessary to eliminate ``significant'' contribution to a downwind 
nonattainment or maintenance receptor. Merely identifying a range of 
various emissions control measures that have been or may be enacted at 
the state or local level, without analysis of the impact of those 
measures on the out of state receptors, is insufficient as an 
analytical matter. Further, step 4 of the good neighbor framework calls 
for those measures identified in step 3 which are necessary to 
eliminate significant contribution to be included in the state's SIP, 
so that they may be approved by EPA and rendered permanent and 
federally enforceable.
    As previously indicated in this section, the September 2018 
submittal referenced regulatory updates that New York asserted were in 
development and would provide for additional NOX and VOC 
reductions. The EPA notes that New York has since adopted many of these 
regulatory updates.\15\ New York adopted 6 NYCRR Part 227, Subpart 227-
3, ``Ozone Season Oxides of Nitrogen (NOX) Emission Limits 
for Simple Cycle and Regenerative Combustion Turbines,'' with a State

[[Page 60607]]

effective date of January 16, 2020, that lowered allowable 
NOX emissions from peaking units during the ozone season on 
high electric demand days, with compliance dates of May 1, 2023 (100 
ppmvd \16\ limit), and May 1, 2025 (25 ppmvd limit for gas and 42 ppmvd 
limit for oil).\17\ New York adopted a regulation, 6 NYCRR Part 222, 
``Distributed Generation Sources,'' with a State effective date of 
March 25, 2020, that established NOX emissions control 
requirements for distributed generation and price responsive generation 
sources \18\ with compliance dates of May 1, 2021 and May 1, 2025.\19\ 
New York adopted revisions, with a State effective date of March 13, 
2020, to NYCRR Part 219, including adoption of a new Subpart 219-
10,''Reasonably Available Control Technology (RACT) For Oxides Of 
Nitrogen (NOX) At Municipal And Private Solid Waste 
Incineration Units,'' which established NOX limits for 
municipal waste combustors with a compliance date of March 14, 
2021.\20\ New York adopted revisions to NYCRR Part 218, subpart 218-7, 
``Aftermarket Parts,'' with a State effective date of March 14, 2020, 
which required cleaner California certified aftermarket catalytic 
converters offered for sale or installed in New York State beginning 
January 1, 2023.\21\ New York adopted revisions, with a State effective 
date of January 11, 2020, to 6 NYCRR Part 205, ``Architectural and 
Industrial Maintenance Coatings,'' with compliance effective January 1, 
2021,\22\ requiring more stringent VOC limits for coatings.\23\ New 
York adopted revisions, with a State effective date of November 1, 
2019, to 6 NYCRR Part 226, ``Solvent Metal Cleaning Processes,'' 
establishing VOC content limits for cleaning solvents used in 
operations not covered by other regulations, beginning November 1, 
2020.\24\ New York adopted revisions to 6 NYCRR Part 230,with a State 
effective date of February 11, 2021, ``Gasoline Dispensing Sites and 
Transport Vehicles,'' and 6 NYCRR Part 235, ``Consumer Products.'' 
Updates to NYCRR Part 230 include additional VOC control requirements 
for facilities during gasoline transfer operations beginning February 
5, 2021.\25\ Updates to Part 235, which require compliance by January 
1, 2022, include revising and establishing VOC contents for consumer 
products.\26\
---------------------------------------------------------------------------

    \15\ New York regulations are available at https://www.dec.ny.gov/regulations/regulations.html.
    \16\ The NOX emission limits are on a parts per 
million dry volume basis (ppmvd), corrected to 15 percent oxygen.
    \17\ New York submitted for SIP approval to the EPA on May 18, 
2020. The EPA finalized approval on August 3, 2021. 86 FR 43956 
(August 11, 2021).
    \18\ Distributed generation (DG) sources are engines used by 
host sites to supply electricity outside that supplied by 
distribution utilities. This on-site generation of electricity by DG 
sources is used by a wide-range of commercial, institutional and 
industrial facilities. DG applications range from supplying 
electricity during blackouts to all of a facility's electricity 
demand year-round. NY's DG rule applies to sources enrolled in 
demand response programs sponsored by the New York Independent 
System Operator or transmission utilities as well as sources used 
during times when the cost of electricity supplied by utilities is 
high (i.e., price-responsive generation sources).
    \19\ New York submitted for SIP approval to the EPA on October 
15, 2020.
    \20\ New York submitted for SIP approval to the EPA on February 
23, 2021.
    \21\ As of September 1, 2021, New York had not submitted a 
revised version of subpart 218-7 to the EPA for SIP approval.
    \22\ The compliance date for the sale of products is January 1, 
2021. The sell-through provision allows for product manufactured 
before January 1, 2021 to be sold through May 1, 2023.
    \23\ New York submitted for SIP approval to the EPA on October 
15, 2020.
    \24\ New York submitted for SIP approval to the EPA on November 
5, 2019. The EPA finalized approval on April 19, 2020. 85 FR 28490 
(May 13, 2020).
    \25\ New York submitted for SIP approval to the EPA on March 3, 
2021.
    \26\ New York submitted for SIP approval to the EPA on March 3, 
2021.
---------------------------------------------------------------------------

    New York adopted a revised version of 6 NYCRR Part 243, ``CSAPR 
NOX Ozone Season Group 2 Trading Program,'' with a State 
effective date of January 2, 2019, in order to allow New York to 
allocate CSAPR allowances to regulated entities in New York under an 
abbreviated SIP.\27\ However, the EPA notes that although New York's 
revised Part 243 replaced the EPA's default allocation procedures for 
the control periods in 2021 and beyond under the CSAPR Update FIP, the 
revised state rules did not create any enforceable emission limitations 
and did not replace the enforceable emission limitations set forth in 
the additional trading program provisions established under the CSAPR 
Update FIP. Moreover, the allowance allocations provisions adopted in 
Part 243 (as well as the additional trading program provisions 
established under the CSAPR Update) are no longer in effect for New 
York's sources because those provisions have been replaced as to the 
state's sources by the new trading program provisions established under 
the Revised CSAPR Update.\28\
---------------------------------------------------------------------------

    \27\ CSAPR provided a process for the submission and approval of 
SIP revisions to replace certain provisions of the CSAPR FIPs while 
the remaining FIP provisions continue to apply. This type of CSAPR 
SIP is termed an abbreviated SIP.
    \28\ The regulations implementing the Revised CSAPR Update 
provide that, for states subject to the Revised CSAPR Update and 
with respect to control periods after 2020, the EPA will no longer 
administer state trading program provisions approved under SIP 
revisions addressing the CSAPR Update's trading program. See 40 CFR 
52.38(b)(16)(ii).
---------------------------------------------------------------------------

    As of September 1, 2021, New York had not yet adopted revisions to 
6 NYCRR Part 203, ``Oil and Gas Sector,'' \29\ or NYCRR Part 228, 
Subpart 228-1, ``Motor Vehicle and Mobile Equipment Refinishing and 
Recoating Operation.''
---------------------------------------------------------------------------

    \29\ New York filed a notice of proposed rulemaking on April 20, 
2021. See https://www.dec.ny.gov/regulations/122829.html.
---------------------------------------------------------------------------

    EPA also notes that several of New York's rules that were approved 
into the SIP after EPA's receipt of this September 2018 submittal, such 
as NOX limits on combustion turbines that operate as peaking 
units, will not be phased in until 2023-2025, which is past the July 
20, 2021, Serious area attainment date for the 2008 ozone NAAQS.
    Under the Wisconsin decision, states and EPA may not delay 
implementation of measures necessary to address good neighbor 
requirements beyond the next applicable attainment date without a 
showing of impossibility or necessity. See 938 F.3d at 320. The 
submission did not offer a demonstration of impossibility of earlier 
implementation of control measures that would go into effect after 
2021.\30\
---------------------------------------------------------------------------

    \30\ While Wisconsin was decided after the state made its 
submission, EPA must evaluate the SIP based on the information 
available at the time of its action, including any relevant changes 
in caselaw or other requirements. States are generally free to 
withdraw and resubmit their SIP submissions in light of intervening 
changes in the law. The State of New York has not done so in this 
case.
---------------------------------------------------------------------------

    Additionally, New York said that the State's mobile on-road sector 
alone significantly impacted downwind monitors and noted that it 
controls its mobile emissions through its inspection/maintenance (I/M) 
and anti-idling standards. However, New York did not explain the role 
their I/M and anti-idling standards play in eliminating their 
significant contribution.
    The EPA acknowledges that New York's RACT presumptive emissions 
limits and facility-specific emissions limits are based on inflation-
adjusted control cost valued at $5,500 per ton of NOX 
reduced. However, in light of continuing contribution to out of state 
receptors from the State (at step 1) despite these measures, New York's 
SIP submission failed to evaluate the availability of any additional 
air quality controls to improve downwind air quality at nonattainment 
and maintenance receptors at step 3.
    In the analysis performed for the Revised CSAPR Update, the EPA 
determined that there are cost-effective controls available for EGUs in 
New York at a lower cost threshold than $5,500 per ton of 
NOX reduced. Based on EPA's analysis in the Revised CSAPR 
Update, the EPA has determined that New York State NOX 
emissions significantly impact nonattainment and interfere

[[Page 60608]]

with maintenance of the 2008 ozone NAAQS in other states. Additionally, 
the EPA has determined the NOX emission reductions necessary 
to eliminate New York State's significant contribution and has 
finalized a NOX ozone season emissions budget for the State.
    Specifically, after assessing potential control strategies, the EPA 
identified an EGU control stringency that reflected the optimization of 
existing SCR controls and installation of state-of-the-art 
NOX combustion controls, represented by a cost of $1,600 per 
ton of NOX reduced; and the optimization of existing SNCR 
controls, represented by a cost of $1,800 per ton of NOX 
reduced. The EPA then finalized EGU NOX ozone season 
emissions budgets reflecting the identified EGU control stringency. New 
York's NOX ozone season emission budget as determined by the 
EPA under the Revised CSAPR Update is 3,416 tons in 2021, and is 
further lowered to 3,403 tons in 2024, after which no further 
adjustments are required. The NOX ozone season budgets from 
2021 thru 2024 represent a two percent \31\ reduction from a 2021-2024 
baseline \32\ to eliminate New York's significant contribution to 
nonattainment or interference with maintenance of the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    \31\ See Ozone Transport Policy Analysis Final Rule TSD 
available from the Revised CSAPR Update Docket ID No. EPA-HQ-OAR-
2020-0272, via the Federal eRulemaking Portal: https://www.regulations.gov.
    \32\ Emissions projected in New York for each year in the 
absence of the Revised CSAPR Update.
---------------------------------------------------------------------------

    The SIP revision submitted by New York does not provide a 
demonstration that the existing permanent and federally enforceable 
control measures contained in the State's SIP achieve the emissions 
reductions needed to meet the obligations for New York in the CSAPR 
NOX Ozone Season Group 3 Trading Program established in the 
Revised CSAPR Update The EPA modeling performed to evaluate New York's 
contributions and emissions reduction obligations already takes into 
consideration many of the emissions reduction programs identified by 
the State and, in the Revised CSAPR Update, the EPA found continuing 
contribution from New York to receptors in Connecticut in 2021 and 
later years. At a minimum, then, in order for the EPA to approve a SIP 
revision to replace the FIP promulgated in the Revised CSAPR Update, 
the State's SIP must obtain through federally enforceable emission 
controls the same or greater level of emissions reduction achieved by 
the FIP.
    As provided in Section VII.D.3 of the preamble for the Revised 
CSAPR Update, should a state submit a SIP revision to replace the FIP 
that achieves the necessary emissions reductions but does not use the 
CSAPR NOX Ozone Season Group 3 Trading Program, in order to 
best ensure its approvability, the SIP revision should include the 
following general elements: (1) A comprehensive baseline 2021 statewide 
NOX emission inventory (which includes existing control 
requirements), which should be consistent with the 2021 emission 
inventory that EPA used to calculate the required state budget in this 
final action (unless the state can explain the discrepancy); (2) a list 
and description of control measures to satisfy the state emission 
reduction obligation and a demonstration showing when each measure 
would be in place to meet the 2021 and successive control periods; (3) 
fully-adopted state rules providing for such NOX controls 
during the ozone season; (4) for EGUs greater than 25 MWe, monitoring 
and reporting under 40 CFR part 75, and for other units, monitoring and 
reporting procedures sufficient to demonstrate that sources are 
complying with the SIP (see 40 CFR part 51 subpart K (``source 
surveillance'' requirements)); and (5) a projected inventory 
demonstrating that state measures along with federal measures will 
achieve the necessary emission reductions in time to meet the 2021 
compliance deadline.\33\
---------------------------------------------------------------------------

    \33\ See 86 FR 23054, 23147-23148 (April 30, 2021) (describing 
expected elements needed to replace a Revised CSAPR Update FIP). In 
addition, should a state wish to adopt the Group 3 trading program 
itself into its SIP, the EPA regulations address replacing the 
Revised CSAPR Update FIP with a Revised CSAPR Update SIP at 40 CFR 
52.38(b)(12).
---------------------------------------------------------------------------

    The New York SIP submittal did not provide a sufficient 
demonstration that the existing permanent and federally enforceable 
control measures already contained in the State's SIP achieve the 
emissions reductions needed to meet the obligations for New York in the 
CSAPR NOX Ozone Season Group 3 Trading Program. The State 
did not apply the suggested analysis for making such a demonstration, 
nor did it provide an alternative method for doing so. Based on the 
deficiencies identified in the New York analysis, the EPA is proposing 
to disapprove the 2008 ozone New York Infrastructure SIP submission for 
both the prong 1 and prong 2 requirements of CAA section 
110(a)(2)(D)(i)(I).

IV. Summary of New Jersey's SIP Revision and the EPA's Analysis

What did New Jersey submit?

    In its May 13, 2019 SIP submittal, New Jersey followed the 4-step 
framework for evaluating its significant contribution. New Jersey 
provided air quality monitoring and modeling data, as well as a list of 
its adopted and implemented air pollution control measures to 
demonstrate that it satisfied its transport obligations for the 2008 
ozone NAAQS.
    New Jersey identified downwind air quality problems based on 
evaluating 2017 actual monitoring data. Nonattainment and maintenance 
receptor sites were identified at fourteen sites in Connecticut (in 
Fairfield, Middlesex, New Haven, and New London Counties), New York (in 
Richmond, and Suffolk Counties), and Pennsylvania (in Bucks and 
Philadelphia Counties) based on 2015-2017 design values exceeding 75 
ppb. The highest reported concentrations were measured at two 
monitoring sites in Fairfield County, Connecticut (site numbers 
90013007 and 90019003), which both had a 2015-2017 design value of 83 
ppb.
    In its SIP submittal to the EPA, New Jersey indicated that the 
State potentially significantly contributed to all fourteen 
nonattainment and maintenance receptors sites based on a predicted New 
Jersey contribution of more than 1 percent of the NAAQS (0.75 ppb) in 
2017 based on EPA modeling performed for the CSAPR Update. New Jersey 
contribution ranged from 0.93 ppb to 11.90 ppb in 2017; the largest 
predicted contribution from New Jersey was to the Richmond County, New 
York monitoring site (site number 360850067).
    New Jersey indicated in its submittal that the State was being 
conservative in its analysis for determining potential significant 
contribution by using 2017 actual data, rather than predicted 
concentrations from modeling for 2017 or 2023. New Jersey noted that 
2023 is past the applicable date of evaluation when control measures 
are needed upwind to help downwind monitors reach attainment for either 
a Moderate classification attainment date of July 20, 2018, or a 
Serious classification attainment date of July 20, 2021. New Jersey 
also noted the State evaluated 2023 modeling \34\ performed by the 
Ozone Transport Committee (OTC), and all monitors that New Jersey 
potentially significantly contributes to (i.e., in the

[[Page 60609]]

OTC/MANE-VU modeling domain 12-km modeling domain) were predicted to 
comply with the 2008 ozone NAAQS based on average and maximum projected 
design values below 75 ppb by 2023.
---------------------------------------------------------------------------

    \34\ OTC modeling included in Appendix I of NJ submittal.
---------------------------------------------------------------------------

    New Jersey asserted that it has demonstrated that it meets the good 
neighbor SIP requirements of the Clean Air Act for the 2008 ozone NAAQS 
by implementing statewide control measures that are more stringent than 
other upwind and nearby states. New Jersey asserted that considering 
air quality, emissions reductions from New Jersey's adopted measures, 
and the cost effectiveness of those measures, no additional emissions 
reductions from New Jersey are necessary to address its contribution to 
downwind nonattainment and maintenance areas.
    New Jersey noted that from 1990 to 2017, annual NOX and 
VOC emissions in New Jersey have each decreased approximately 77 
percent. From 2011 to 2017, annual NOX and VOC emissions 
decreased 31 percent and 17 percent, respectively. From 2002 to 2017, 
for point sources, NOX was reduced by 81 percent and VOC 
emissions were reduced by 63 percent. New Jersey also noted that its 
point source emissions represent only about 8 percent of New Jersey's 
total NOX emissions, while mobile sources were approximately 
43 percent.
    New Jersey stated that there has been a significant decreasing 
trend in 8-hour ozone design values in New Jersey, approximately 40 
percent from 1988 to 2017 and 13 percent from 2011 to 2017. According 
to the State, the significant decrease demonstrates the impact of New 
Jersey control measures.
    New Jersey provided a list \35\ of its post-2002 adopted 
NOX and VOC control measures, including estimated cost-
effectiveness ($ (dollar) per ton of NOX reduced or VOC 
reduced), and EPA's approval date \36\ for many of the measures. New 
Jersey notes that the State has met Reasonably Available Control 
Measures (RACM) and RACT requirements and has gone beyond RACM/RACT by 
adopting control measures more stringent than Federal rules and rules 
adopted by other states. Furthermore, New Jersey states that its rules 
are implemented statewide and not limited to the Northern New Jersey-
New York-Connecticut ozone nonattainment area. New Jersey highlighted 
several of their control measures:
---------------------------------------------------------------------------

    \35\ Table 5 of the SIP submittal.
    \36\ Control measures that the State identified as ``USEPA 
Approval Pending'' have been approved by the EPA as follows: The EPA 
finalized approval of the CTGs for Fiberglass Boat Manufacturing 
Materials; Industrial Cleaning Solvents; Miscellaneous Metal and 
Plastic Parts Coatings; Paper, Film, and Foil Coatings; and Natural 
Gas Engines and Turbines. 83 FR 50506 (October 9, 2018). The EPA 
approved revisions to New Jersey's I/M rules. 83 FR 21174 (May 9, 
2018). The EPA finalized approval of New Jersey's Vapor Recovery 
2017 Stage I and Refueling. 85 FR 36748 (June 18, 2020).

--Power generation rules, including requirements for high electric 
demand days (HEDD) when ozone concentrations are highest. New Jersey 
estimates NOX emissions reduction during HEDD to be over 60 
tons from a baseline without the rules;
--municipal waste combustor controls;
--stationary reciprocating internal combustion engines (RICE) controls 
(as low as 37 kW) used for distributed generation or demand response 
(DG/DR), which the State noted are often operated on hot summer days 
that often coincide with high ozone days;
--mobile source controls including New Jersey's Low Emission Vehicle 
Program (NJ LEV) (based on California's program), which requires a 
certain percentage of Zero Emission Vehicles in the State, as well as 
its rules for vehicle idling and heavy-duty vehicle inspection and 
maintenance using on-board diagnostics technology; and
--various NOX and VOC measures to address EPA Control 
Techniques Guideline (CTG), NOX Alternative Control 
Technique (ACT) categories, and updated controls at gasoline dispensing 
facilities including California Air Resources Board (CARB) enhanced 
vapor recovery certified Phase I vapor recovery systems, dripless 
nozzles, and low permeation hoses.

    Furthermore, New Jersey asserts that it has implemented its control 
measures before the 2008 attainment deadlines. New Jersey provides the 
example of the New Jersey power generation and HEDD rules being 
effective in 2015 or earlier. New Jersey further asserts that, when 
determining New Jersey significant contribution to interstate 
transport, the State should not be penalized for its early adoption of 
appropriate and effective rules in advance of and more stringent than 
other states.
    In the State's evaluation of cost effectiveness, New Jersey claims 
that it has gone beyond the measures of other nearby and upwind states 
and previously established EPA cost effectiveness thresholds. The State 
notes that the cost-effectiveness values associated with many of its 
adopted rules are several times greater than the threshold of $1,400 
per ton NOX reduced set for upwind states in the CSAPR 
Update. For example, according to the State's list of existing 
NOX and VOC control measures \37\ included in its SIP 
submittal, the control measures for turbines operating during HEDD had 
a cost effectiveness of $44,000 per ton NOX reduced; the 
control measures for oil-fired boilers operating during HEDD had a cost 
effectiveness up to $18,000 per ton NOX reduced; and, for 
natural gas compressor engines and turbines rules adopted in 2017, the 
rules have a cost effectiveness up to $26,020 per ton NOX 
reduced, with SCR costs up to $18,983 per ton NOX reduced.
---------------------------------------------------------------------------

    \37\ Table 5 of the New Jersey SIP submittal.
---------------------------------------------------------------------------

    In its submittal to the EPA, New Jersey indicated that it believes 
the methodology that the EPA traditionally has used for evaluating the 
cost of implementing controls, using a ratio of annual emission 
reductions to the annualized cost, does not reflect the use of EGUs 
solely used during HEDD. New Jersey suggested an alternative 
methodology using a ratio of daily emission reduction on a HEDD day to 
the annualized cost (or DERACR) to address the higher HEDD 
NOX emissions that far exceed an annual or ozone season 
average. New Jersey also noted that a short-term standard, such as the 
8-hour ozone standard, should have a short-term cost-effectiveness 
formula. Further, using a short-term evaluation formula demonstrates 
that sources that emit high emissions on high ozone days, but have a 
low annual average, can be controlled using highly cost-effective 
measures. New Jersey included an example of this methodology in its 
submittal.

EPA's Review

    EPA is proposing to find that the New Jersey SIP submittal does not 
meet the State's obligations with respect to prohibiting emissions that 
will contribute significantly to nonattainment or interfere with 
maintenance of the of the 2008 ozone NAAQS in any other state.
    As previously indicated in this section, New Jersey acknowledged 
that it is linked to downwind receptors. New Jersey identified an even 
greater number of linkages to nonattainment and maintenance sites in 
other states than the EPA by using a more conservative approach. 
Specifically, the State analyzed current receptors using measured 
values rather than projected future receptors using modeling. Their 
analysis confirms the EPA's analysis in the Revised CSAPR Update that 
New Jersey is linked to nonattainment and/or maintenance receptors in 
downwind states. The State identified fourteen

[[Page 60610]]

nonattainment and maintenance sites in Connecticut, New York, and 
Pennsylvania based on 2015-2017 monitored design values exceeding the 
2008 ozone NAAQS. New Jersey indicated that it potentially 
significantly contributed to all of the sites based on the predicted 
New Jersey contribution of more than 1 percent of the NAAQS (0.75 ppb) 
in 2017 using the EPA contribution modeling performed for the CSAPR 
Update.
    Based on the air quality analysis for the Revised CSAPR Update, the 
EPA identified potential nonattainment receptors in 2021 in Stratford, 
Connecticut (monitor ID 090013007), and Westport, Connecticut (monitor 
ID 090019003), and maintenance area receptors in Madison, Connecticut 
(monitor ID 090099002), and Houston, Texas (monitor ID 482010024). New 
Jersey was linked to the nonattainment and maintenance receptor sites 
at the Connecticut sites based on contribution above the threshold of 1 
percent of the 2008 ozone NAAQS (i.e., 0.75 ppb). The levels of New 
Jersey State contribution to each nonattainment and maintenance 
receptor in 2021 are shown in Table 2:

                Table 2--New Jersey Contributions to Downwind Nonattainment and Maintenance Areas
----------------------------------------------------------------------------------------------------------------
                                          Nonattainment receptors                  Maintenance receptors
                                 -------------------------------------------------------------------------------
              State                  Stratford, CT
                                         (ppb)        Westport, CT (ppb)   Madison, CT (ppb)   Houston, TX (ppb)
----------------------------------------------------------------------------------------------------------------
New Jersey......................               7.70                8.62                5.71                0.00
----------------------------------------------------------------------------------------------------------------

    As previously noted in this section, New Jersey asserted in its May 
2019 submittal that considering air quality, the emissions reductions 
from New Jersey's adopted measures, and the cost effectiveness of those 
measures, no additional emissions reductions from New Jersey are 
necessary to address its contribution to downwind nonattainment and 
maintenance areas. New Jersey stated that control measures were adopted 
and implemented before attainment deadlines and go beyond previously 
established EPA cost effectiveness thresholds. New Jersey also provided 
information documenting the emissions reductions that have been made 
throughout the State beginning in 2002 with corresponding improvements 
in air quality in New Jersey to demonstrate the impact of New Jersey 
control measures.
    New Jersey, however, did not adequately demonstrate that the State 
was controlling its emissions despite the fact that the State conceded 
that it was potentially significantly contributing to 14 receptors in 
2017 at steps 1 and 2. The SIP submittal pointed to its existing 
NOX and VOC control measures that were adopted by the State 
to satisfy its good neighbor obligations. However, the State did not 
analyze whether additional control measures could reduce the impact of 
New Jersey's emissions on out of state receptors. Any additional 
control measures identified by the analysis would need to be submitted 
to the EPA for approval into the SIP, approved by the EPA, and made 
federally enforceable. Step 3 of the good neighbor framework requires 
that the state (or the EPA in the case of a FIP) conduct a more 
rigorous analysis of what emission controls are necessary to eliminate 
``significant'' contribution to a downwind nonattainment or maintenance 
receptor. Merely identifying a range of various emissions control 
measures that have been or may be enacted at the state level, without 
analysis of the impact of those measures on the out of state receptors, 
is insufficient as an analytical matter. Further, step 4 of the good 
neighbor framework calls for those measures identified in step 3 which 
are necessary to eliminate significant contribution to be included in 
the state's SIP, so that they may be approved by EPA and rendered 
permanent and federally enforceable.
    The EPA acknowledges that the State's control measures listed in 
the State's SIP submittal may be nominally more stringent than the EPA 
cost-thresholds used for the CSAPR Update or Revised CSAPR Update. 
Additionally, New Jersey's existing control measures have undoubtedly 
reduced the amount of transported ozone pollution to other states and 
have contributed to the downward emissions trends and improving air 
quality in the State as shown in the State's SIP submittal. However, in 
light of continuing contribution to out of state receptors from the 
State at steps 1 and 2 despite these measures, New Jersey's SIP 
submission failed to evaluate the availability of any additional air 
quality controls to improve downwind air quality at nonattainment and 
maintenance receptors at step 3.
    In the Revised CSAPR Update, the EPA has determined that additional 
NOX emissions reductions are available and necessary to 
eliminate New Jersey's significant contribution and has finalized a 
NOX ozone season emissions budget for the State's EGUs. 
Specifically, after assessing potential control strategies, the EPA 
identified an EGU control stringency that reflected the optimization of 
existing SCR controls and installation of state-of-the-art 
NOX combustion controls, represented by a cost of $1,600 per 
ton of NOX reduced; and the optimization of existing SNCR 
controls, represented by a cost of $1,800 per ton of NOX 
reduced. The EPA then finalized EGU NOX ozone season 
emissions budgets reflecting the identified EGU control stringency. New 
Jersey's NOX ozone season emissions budget as determined by 
the EPA under the Revised CSAPR Update is 1,253 tons in 2021 and 
subsequent years. The NOX ozone season budgets from 2021 and 
beyond represent an approximate seven percent \38\ reduction from a 
2021 baseline of EGU emissions in New Jersey.\39\ In the Revised CSAPR 
Update, the EPA determined that these reductions are necessary to 
eliminate New Jersey's significant contribution to nonattainment or 
interference with maintenance of the 2008 ozone NAAQS in other states.
---------------------------------------------------------------------------

    \38\ See Ozone Transport Policy Analysis Final Rule TSD 
available from the Revised CSAPR Update Docket ID No. EPA-HQ-OAR-
2020-0272, via the Federal eRulemaking Portal: https://www.regulations.gov.
    \39\ Emissions projected in New Jersey for each year in the 
absence of the Revised CSAPR Update.
---------------------------------------------------------------------------

    The SIP revision submitted by New Jersey does not provide a 
demonstration that the existing permanent and federally enforceable 
control measures already contained in the State's SIP achieve the 
emissions reductions needed to meet New Jersey's obligations in the 
CSAPR NOX Ozone Season Group 3 Trading Program established 
in the Revised CSAPR Update. The EPA modeling performed to evaluate New 
Jersey's contributions and emissions reduction obligations takes into 
consideration many of the emissions reduction programs identified by 
the State, and in the Revised CSAPR Update, yet the EPA found 
continuing contribution from New Jersey to

[[Page 60611]]

receptors in Connecticut in 2021 and later years. At a minimum, then, 
in order for EPA to approve a SIP revision to replace the FIP 
promulgated in the Revised CSAPR Update, the State's SIP must obtain 
through federally enforceable emission controls the same or greater 
level of emissions reduction achieved by the FIP.
    As provided in Section VII.D.3 of the preamble for the Revised 
CSAPR Update, should a state submit a SIP revision to replace the FIP 
that achieves the necessary emissions reductions but does not use the 
CSAPR NOX Ozone Season Group 3 Trading Program, in order to 
best ensure its approvability, the SIP revision should include the 
following general elements: (1) A comprehensive baseline 2021 statewide 
NOX emissions inventory (which includes existing control 
requirements), which should be consistent with the 2021 emission 
inventory that EPA used to calculate the required state budget in this 
final action (unless the state can explain the discrepancy); (2) a list 
and description of control measures to satisfy the state emissions 
reduction obligation and a demonstration showing when each measure 
would be in place to meet the 2021 and successive control periods; (3) 
fully-adopted state rules providing for such NOX controls 
during the ozone season; (4) for EGUs greater than 25 MWe, monitoring 
and reporting under 40 CFR part 75, and for other units, monitoring and 
reporting procedures sufficient to demonstrate that sources are 
complying with the SIP (see 40 CFR part 51 subpart K (``source 
surveillance'' requirements)); and (5) a projected inventory 
demonstrating that state measures along with federal measures will 
achieve the necessary emissions reductions in time to meet the 2021 
compliance deadline.\40\
---------------------------------------------------------------------------

    \40\ See 86 FR 23054, 23147-23148 (April 30, 2021) (describing 
expected elements needed to replace a Revised CSAPR Update FIP). In 
addition, should a state wish to adopt the Group 3 trading program 
itself into its SIP, EPA regulations address replacing the Revised 
CSAPR Update FIP with a Revised CSAPR Update SIP at 40 CFR 
52.38(b)(12).
---------------------------------------------------------------------------

    The New Jersey SIP submittal did not provide a sufficient 
demonstration that the existing permanent and federally enforceable 
control measures already contained in the State's SIP achieve the 
emissions reductions needed to meet New Jersey's obligations in the 
CSAPR NOX Ozone Season Group 3 Trading Program. The State 
did not apply the e suggested analysis for making such a demonstration, 
nor did it provide an alternative method for doing so. Based on the 
deficiencies identified in the New Jersey analysis, the EPA is 
proposing to disapprove the 2008 ozone New Jersey Infrastructure SIP 
submission for both the prong 1 and prong 2 requirements of CAA section 
110(a)(2)(D)(i)(I).

V. What action is EPA taking?

    The EPA is proposing to disapprove the portion of the New York and 
New Jersey SIP submittals pertaining to the requirements of CAA section 
110(a)(2)(D)(i)(I) regarding interstate transport of air pollution that 
will significantly contribute to nonattainment or interfere with 
maintenance of the 2008 ozone NAAQS (i.e., CAA section 
110(a)(2)(D)(i)(I) (prongs 1 and 2)) in other states. Disapproval does 
not start a mandatory sanctions clock pursuant to CAA section 179 
because this action does not pertain to either a part D plan for 
nonattainment areas required under CAA section 110(a)(2)(I) or a SIP 
call pursuant to CAA section 110(k)(5). The EPA has amended FIPs, in a 
separate action finalizing the Revised CSAPR Update for the 2008 ozone 
NAAQS, to reflect the additional emissions reductions necessary to 
address New York's and New Jersey's significant contribution to 
nonattainment and interference with maintenance. Therefore, this action 
does not trigger a duty for the EPA to promulgate FIPs for either New 
York or New Jersey. The EPA is soliciting public comment on the issues 
discussed in this proposal. These comments will be considered before 
the EPA takes final action. Interested parties may participate in the 
Federal rulemaking procedure by following the directions in the 
ADDRESSES section of this Federal Register document.

VI. Statutory and Executive Order Reviews

a. Executive Order 12866, Regulatory Planning and Review

    This action is not a ``significant regulatory action'' under the 
terms of Executive Order (E.O.) 12866 (58 FR 51735, October 4, 1993) 
and is therefore not subject to review under the E.O.

b. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., 
because this proposed disapproval of SIP revisions under CAA section 
110 will not create any new information collection burdens but simply 
proposes to disapprove certain State requirements for inclusion into 
the SIP.

c. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant impact on a 
substantial number of small entities under the RFA. This proposed rule 
does not impose any requirements or create impacts on small entities. 
This proposed SIP disapproval under CAA section 110 will not create any 
new requirements but simply proposes to disapprove certain State 
requirements, for inclusion into the SIP.

d. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538. The action imposes no enforceable duty on any 
state, local or tribal governments or the private sector.

e. Executive Order 13132, Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

f. Executive Order 13175, Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP 
on which EPA is proposing action would not apply in Indian country 
located in the state, and EPA notes that it will not impose substantial 
direct costs on tribal governments or preempt tribal law. Thus, 
Executive Order 13175 does not apply to this proposed action.

g. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern health or safety risks that the EPA has 
reason to believe may disproportionately affect children, per the 
definition of ``covered regulatory action'' in section 2-202 of the 
Executive Order. This action is not subject to Executive Order 13045 
because it simply proposes to disapprove certain state requirements for 
inclusion into the SIP.

h. Executive Order 13211, Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This proposed rule is not subject to Executive Order 13211 because 
it is not a significant regulatory action under Executive Order 12866.

[[Page 60612]]

i. National Technology Transfer and Advancement Act

    This rulemaking does not involve technical standards.

j. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Population

    The EPA believes that this action is not subject to Executive Order 
12898 (59 FR 7629, February 16, 1994) because it does not establish an 
environmental health or safety standard.
    This action merely proposes to disapprove certain state 
requirements for inclusion into the SIP.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Incorporation by reference, Nitrogen dioxide, Ozone, 
Reporting and recordkeeping requirements, Volatile organic compounds.

    Authority: 42 U.S.C. 7401 et seq.

     Dated: October 26, 2021.
Walter Mugdan,
Acting Regional Administrator, Region 2.
[FR Doc. 2021-23638 Filed 11-2-21; 8:45 am]
BILLING CODE 6560-50-P