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Air Quality in Indiana

Air Quality in Indiana > Permits > Air Permit Programs Overview > New Source Review (NSR) > Indiana New Source Review Reform Training Manual Indiana New Source Review Reform Training Manual

Table of Contents

Overview of Major NSR

New major stationary sources and modifications to major stationary sources are required to undergo major new source review (NSR) prior to constructing. There are two major NSR programs, one for areas that are in attainment with the national ambient air quality standards (NAAQS) and one for areas that are designated as nonattainment.

The attainment NSR program is referred to as Prevention of Significant Deterioration (PSD) and is contained in 326 IAC 2-2. Part C of Title I of the Clean Air Act Amendments (CAA) requires states to include, in their state implementation plan (SIP), emission limitations and other measures that are necessary to prevent significant deterioration of the air quality in each region designated as attainment or unclassifiable. The federal regulations, 40 CFR 51.166, contain the specific minimum requirements for a PSD program. If a state does not have a PSD program as an approved part of its SIP, a state may be delegated the authority to implement and enforce the federal PSD program contained in 40 CFR 52.21. On September 30, 1980Indiana was delegated the authority to implement the PSD program. Indiana received final approval to implement 326 IAC 2-2 on March 3, 2003.

The nonattainment NSR program is referred to as Emission Offset and is contained in 326 IAC 2-3. Part D of Title I of the CAA requires states to include, in the SIP, enforceable emission limitations and related control measures to assure reasonable progress toward the national air quality standard. The federal regulations, 40 CFR 51.165, contain the specific minimum requirements for a nonattainment NSR program. If a state does not have a nonattainment NSR program as an approved part of its SIP, EPA requires states to follow the Offset Interpretative rule codified in 40 CFR 51, Appendix S. Indiana received final approval to implement 326 IAC 2-3 on October 27, 1994.

NSR Reform

The major NSR programs include the most complex environmental permitting requirements. For 30 years EPA, state regulatory agencies and courts have issued policies and decisions to interpret the program. After an extensive stakeholder process, EPA proposed to overhaul the NSR program on July 23, 1996. EPA solicited further comment on two provisions on July 24, 1998.

On December 31, 2002, EPA took final action on four changes to the NSR program that stemmed from the July 1996 proposal:

  • Baseline actual-to-projected-actual applicability test
  • Leanunit designation
  • Pollution control project (PCP) exclusion
  • Plantwide applicability limitations (PAL)

EPA stated that these revisions "are intended to provide greater regulatory certainty, administrative flexibility, and permit streamlining, while ensuring the current level of environmental protection and benefit derived from the program and, in certain respects, resulting in greater environmental protection" (67 FR 80186, December 31, 2002).

The December 31, 2002 federal rule required states with approved SIPs to adopt the federal NSR reform amendments or equivalent provisions no later than January 2, 2006. Indiana held it's first public information session for stakeholders in March 2003, and began the rulemaking process shortly thereafter. It was not possible to adopt the federal rules by reference or verbatim, because the federal program relies heavily on state minor source permitting. Therefore, Indiana chose to integrate the federal program into existing Indiana permitting rules. After several public meetings and comment periods the Air Pollution Control Board final adopted the NSR reform changes at the June 2, 2004 hearing. The state NSR Reform rulemaking became effective on September 9, 2004.

Common Terms

  • BACT:
    • "Best available control technology" means an emissions limitation, including a visible emissions standard, based on the maximum degree of reduction for each regulated NSR pollutant that would be emitted from any proposed major stationary source or major modification, that the commissioner, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for the source or modification through application of production processes or available methods, systems, and techniques, including fuel cleaning or treatment or innovative fuel combustion techniques for control of the pollutant.
  • CAA:
    • "Clean Air Act" means the federal Clean Air Act, found at 42 U.S.C. 7401 et seq., as amended (including the Clean Air Act Amendments of 1990, P.L.101-549).
  • EUSGU:
    • "Electric utility steam generating unit" means any steam electric generating unit that is constructed for the purpose of supplying more than one-third (1/3) of its potential electric output capacity and more than twenty-five (25) megawatts electrical output to any utility power distribution system for sale. Any steam supplied to a steam distribution system for the purpose of providing steam to a steam-electric generator that would produce electrical energy for sale is also considered in determining the electrical energy output capacity of the affected facility.
  • Existing emission unit:
    • In the major NSR program an existing emission unit is one that has operated for more than two years, or is a replacement unit for an existing emission unit.
  • LAER:
    • "Lowest achievable emission rate" or "LAER" means, for any source, the more stringent rate of emissions based on the more stringent emissions limitation of the following:
      1. Contained in the state implementation plan for the class or category of stationary source unless the owner or operator of the proposed stationary source demonstrates that the limitations are not achievable.
      2. Achieved in practice by the class or category of stationary source. This limitation, when applied to a modification, means the lowest achievable emissions rate for the new or modified emissions unit within the stationary source. In no event shall the application of the lowest achievable emission rate allow a proposed new or modified stationary source to emit any pollutant in excess of the amount allowable under applicable new source standards of performance.
  • Major NSR:
    • "Major new source review" refers to the permitting program for major stationary sources of air pollution. Major stationary sources and major modifications to stationary source are required to obtain a NSR permit before they start construction.
  • Minor NSR:
    • "Minor new source review" refers to the state-permitting program for construction of new sources that are not subject to PSD or emission offset. New minor sources or modifications to minor or major sources are required to obtain a NSR permit before the start of construction. Since the state operating permit programs are merged with the minor NSR programs, minor NSR means a permit revision for MSOP and FESOP sources, and a source modification for TV sources.
  • NAAQS:
    • "National ambient air quality standards" means the standard required by the CAA, and established by EPA for pollutants that are considered harmful to public health and the environment. The Clean Air Act established two types of national air quality standards. Primary standards set limits to protect public health, including the health of "sensitive" populations such as asthmatics, children, and the elderly. Secondary standards set limits to protect public welfare, including protection against visibility impairment, damage to animals, crops, vegetation, and buildings.
    • U.S. EPA has set national standards for six principal pollutants, which are called "criteria" pollutants: ozone, particulate matter (PM), carbon monoxide (CO), sulfur dioxide (SO2), nitrogen oxides (NOx), and lead (Pb).
  • NA NSR or emission offset:
    • "Nonattainment new source review" means the major source preconstruction permitting program for areas that are designated nonattainment with the NAAQS. The program meets the requirements of 40 CFR Part 51.165, the federal nonattainment NSR program in 40 CFR Part 52.24, or the offset interpretive ruling in 40 CFR 51, Appendix S. Any permit issued under the NA NSR program is a major NSR permit.
  • New emission unit:
    • In the major NSR programs a new emission unit is one that is proposed for construction, is under construction, or has been operating for less than two years.
  • PSD:
    • "Prevention of significant deterioration program" means the major source preconstruction permitting program for areas that attain the NAAQS. The program meets the requirements of 40 CFR Part 51.166 or the federal PSD program in 40 CFR Part 52.21. Any permit issued under the PSD program is a major NSR permit.
  • PTE:
    • "Potential to emit" means the maximum capacity of a stationary source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity of the source to emit a pollutant, including air pollution control equipment and restrictions on hours of operation or on the type or amount of material combusted, stored, or processed, shall be treated as part of its design if the limitation or the effect it would have on emissions is enforceable as a practical matter. Secondary emissions do not count in determining the potential to emit of a stationary source.

Attainment Designations

The difference in applicability of the two major NSR programs is based on the attainment status for the area in which construction is being proposed. The attainment status is pollutant specific, so some units may be reviewed under PSD while others are reviewed under emission offset. The federal government designates nonattainment areas for Indiana in 40 CFR 81.315. The applicability of the emission offset program (326 IAC 2-3) depends on the attainment status in the state rules under 326 IAC 1-4. Due to lengthy state rulemaking process, there is generally a 6-18 month period between the federal designation and the incorporation into state rules. Occasionally EPA allows nonattainment NSR to be deferred for an amount of time in order for states to update their rules. At other times EPA requires nonattainment NSR immediately upon the 40 CFR 81.315 designation effective date. In those situations the nonattainment is based on EPA's interpretive ruling found in 40 CFR 51, Appendix S.

For purposes of this NSR Reform training, we are discussing the state PSD and emission offset program found in 2-2 and 2-3, not the federal programs found in 40 CFR 51.165, 40 CFR 51.166, 40 CFR 51 Appendix S, 40 CFR 52.21or 40 CFR 52.24.

As of October 1, 2004 this was the current nonattainment status fo

  SO2 1-hr Ozone 8-hr Ozone PM2.5*
Allen     Basic  
Boone     Basic  
Clark     Basic Proposed nonattainment
Dearborn     Basic
(Lawrenceburg township)
Proposed nonattainment
Delaware     Basic Proposed unclassifiable
Dubois       Proposed nonattainment
Elkhart     Basic Proposed nonattainment
Floyd     Basic Proposed nonattainment
Gibson       Proposed nonattainment
Greene     Basic  
Hamilton     Basic Proposed nonattainment
Hancock     Basic  
Hendricks     Basic Proposed nonattainment
Jackson     Basic  
Jefferson       Proposed nonattainment
Johnson     Basic Proposed nonattainment
Lake Primary (portions only) Severe Moderate Proposed nonattainment
LaPorte     Marginal  
Madison     Basic  
Marion     Basic Proposed nonattainment
Morgan     Basic Proposed nonattainment
Pike       Proposed nonattainment
Porter   Severe Moderate Proposed nonattainment
St. Joseph     Basic Proposed nonattainment
Shelby     Basic  
Spencer       Proposed nonattainment
Vanderburgh     Basic Proposed nonattainment
Vigo     Basic  
Warrick     Basic Proposed nonattainment

r Indiana:

* Proposed nonattainment designationby EPA on 6-29-04

The remaining Indiana counties and criteria pollutants are designated as attainment or unclassifiable, at this time.

Actual-to-Projected-Actual (ATPA) Applicability Test

The actual-to-projected-actual applicability test is a comparison of the projected actual emissions from all affected emission units with the baseline actual emissions from the affected emission units. The actual-to-projected-actual applicability test is used to determine if a physical or operational change at an existing emissions unit will result in a significant emissions increase. The actual-to-projected-actual applicability test is only used for changes made at existing emission units. The key components of the actual-to-projected-actual applicability test are determining the pre-change emissions (baseline actual emissions) and the post change emissions (projected actual emissions). These determinations and the required recordkeeping and reporting can be slightly different if you are a non-electric utility steam generating unit (Non-EUSGU) or if you are an electric utility steam generating unit (EUSGU).

Baseline Actual Emissions

NSR Reform adds a new definition to the major NSR rules, "Baseline actual emissions" (326 IAC 2-2-1(e)). Baseline actual emissions are used to determine the pre-change emissions. Baseline actual emissions are the starting point to determine whether a change will be subject to major NSR.

Baseline actual emissions for Non-EUSGUs is the average annual emissions rate based on the unit's operation during any consecutive 24-month period in the past ten (10) years. The ten (10) year period cannot include any period earlier than November 15, 1990. (326 IAC 2-2-1(e)(2))

Baseline actual emissions for EUSGUs is the average annual emissions rate based on the unit's operation during any consecutive 24-month period in the past five (5) years (326 IAC 2-2-1(e)(1)).

Only an EUSGU may use a different time period upon determination that it is more representative of normal source operation.

  • For the selected 24-month period, the owner or operator must possess adequate documentation to allow the calculation of actual emissions throughout the selected period. The documentation must allow the calculation of any required adjustments to actual emissions (see Adjustments to Baseline Actual Emissions). If documentation is missing or incomplete for any part of the selected 24-month period, a different 24-month period must be selected for which adequate documentation exists.
  • Only one 24-month period can be selected for the combination of all affected emission units.
  • When a proposed project involves more than one regulated NSR pollutant, a different 24-month period may be selected for each pollutant.

Emission units installed after the selected 24-month period will have baseline actual emissions of zero, unless the emissions unit is new as defined in 326 IAC 2-2-1(u)(1).

Any emissions during the selected 24-month period that resulted from operation in excess of any applicable emission limit must not be included in the baseline actual emissions determination.

Baseline actual emissions are used for modifications, netting and determining plantwide applicability limitations.

  • Baseline actual emissions are calculated on a unit-specific basis.
  • All emissions units affected by the project must be identified.

Adjustments to Baseline Actual Emissions

  • All adjustments to baseline actual emissions are downward.

Baseline actual emissions are adjusted for the following:

  • adjust average annual rate for any portion of the 24-month period that the unit did not operate
  • adjust average annual rate to reflect current emissions control requirements, including but not limited to, any legally enforceable emissions limitation, operating restriction or State or Federal requirement such as RACT, BACT, LAER, NSPS, NESHAP that currently applies to the unit being changed.
  • All major NSR sources report actual emissions to the department. Your baseline actual emissions should never exceed average actual emissions reported to the department for the 24-month period chosen.

Netting

If a project shows that a significant emissions increase will result, the owner or operator has the option of taking into consideration any contemporaneous emissions changes that may allow a "net out" of major NSR applicability. A "net out" is a showing that the net emissions increase at the major stationary source will not be significant.

  • If a proposed project does not result in a significant emissions increase, then netting is not required.

NSR reform does not change the contemporaneous period. The contemporaneous period still includes all creditable increases and decreases in actual emissions that have occurred between the date five (5) years before construction of the particular change commences and the date the increase from the change occurs.

  • Each unit included in the contemporaneous period may have its own consecutive 24-month period.
  • All requirements for calculating baseline actual emissions still apply, therefore, you must have data to support the units operation during the 24-month period chosen and adjustments must be made to reflect the most current emissions limitations that apply to the unit.

Existing emissions units may calculate baseline actual emissions for each contemporaneous event using the ten (10) year look back period.

Projected Actual Emissions

  • Projected actual emissions generated solely for the purpose of the applicability test are not acceptable.
  • Adequate documentation must exist to support the level of business activity used for the projections.

Projected actual emissions are the maximum level of emissions associated with the level and type of business activity projected to occur in any one (1) of the next five (5) or ten (10) years following a specific project. Projected actual emissions involve future business activity and require documentation available from public documents or confidential business information.

Projected actual emissions are defined in the rules at 326 IAC 2-2-1(rr). The projection period begins on the date that the affected emissions unit resumes regular operation after completion of the proposed project and includes the 12 months after this date.

  • The actual annual emissions associated with the projected level of business activity in each year of the projection period (not necessarily a calendar year) must be determined.

A unit's projected actual emissions rate is calculated as the product of the hourly emissions rate based on the unit's post-change operational capabilities taking into account the legally enforceable restrictions that could affect the hourly rate and the projected level of utilization based on the unit's historical annual utilization rate and available information about the unit's most likely post-change capacity utilization. Projections are for any one (1) of five (5) years or one (1) of ten (10) years if the change involves an increase in the emissions unit's PTE or capacity.

  • The actual annual emissions associated with the projected level of business activity in each year of the projection period (not necessarily a calendar year) must be determined.

The owner or operator may choose to use the emissions unit's potential to emit, in tons per year, as the projected actual emissions.

  • Choosing to use a units potential to emit as the projected actual emissions will negate the recordkeeping and reporting requirements associated with the actual-to-projected-actual applicability test.

Adjustments to Projected Actual Emissions

Fugitive emissions, if they can be quantified, must be included in the projected actual emissions. Additionally, emissions associated with startups, shutdowns and malfunctions must be included in the projected actual emissions.

Emission increases that are not related to the specific proposed project may be excluded from the projected actual emissions. These are emissions that could have been accommodated during the selected 24-month baseline period by the pre-change emission units. Determining whether certain emissions are related to the proposed project will be a case-by-case determination.

Actual-to-Projected-Actual Applicability Test

Each of the projected actual emissions must be compared to the baseline actual emissions to determine the magnitude of the resulting emissions increase. Major NSR applicability will be based on the highest emissions increase calculated in this way.

  • The responsibility for the correctness and accuracy of the baseline actual emissions and projected actual emissions calculations is upon the owner or operator of the source. The department will use the calculations for any required minor source permitting but is not obligated to verify that the calculations were done correctly.
  • Any erroneous calculations that result in significant net emission increase will be referred to the Office of Enforcement for further action.

Permit Content

  • The NSR Reform is about major NSR applicability. In most cases the changes or modifications made at the source will still trigger minor source permitting.

Since all major NSR sources are also Part 70 sources, source modifications will be done pursuant to Part 70 source and permit modification requirements.

Determining Emission Changes

Whether the proposed project involves new emissions units, modifications to existing emissions units or a combination of both, there are several different applicability tests that the owner or operator can use to determine if the project will trigger major NSR applicability:

Actual to Potential Applicability Test

This applicability test is generally used for projects involving new emissions units, however it can be used for changes to existing emissions units. This test involves comparing the post change emissions of the unit (in this case the potential to emit) with the baseline actual emissions. If the emissions unit is an existing emissions unit and potential to emit is used to determine the post change emissions, then the owner or operator is not required to maintain a record of annual emissions for a period of five (5) or ten (10) years following resumption of regular operations nor is the owner or operator required to report post change emissions. If the difference between the post change emissions (potential to emit) and baseline actual emissions is greater than the appropriate major NSR applicability limit, then the project will be subject to major NSR unless the net emissions increase is below the appropriate major NSR applicability limit.

Actual to Projected Actual Applicability Test

This applicability test is only used for projects involving changes at existing emissions units. The actual to projected actual applicability test involves comparing the post change emissions (in this case the projected actual emissions) with the baseline actual emissions. If the difference between the post change emissions (projected actual emissions) and baseline actual emissions is greater than the appropriate major NSR applicability limit, the project will be subject to major NSR unless the net emissions increase is below the appropriate major NSR applicability limit. (As mentioned above, the owner or operator may choose to use the actual to potential applicability test for existing units instead.)

Hybrid Applicability Test

For projects involving combinations of new emissions units, existing emissions units and clean units, the Hybrid Applicability Test is used. The Hybrid Applicability Test involves using the appropriate applicability test as described above for each type of emissions unit and then adding the emissions increases together. If the sum of the emissions increases is greater than the appropriate major NSR applicability limit, then the project will be subject to major NSR unless the net emissions increase is below the appropriate major NSR applicability limit.

  • Definitions to Consider:
    • A new emissions unit is any emissions unit that is, or will be, newly constructed or that has existed for less than two (2) years from the date the emissions unit first operated. 326 IAC 2-2-1 (u)(1)
    • An existing emissions unit is any emissions unit that is not a new emissions unit. A replacement unit is an existing emissions unit. 326 IAC 2-2-1 (u)(2)

Recordkeeping and Reporting Requirements

(326 IAC 2-2-8 "Source Obligation")

Other than projects at a clean unit or at a source with a PAL, when there is a reasonable possibility that a project that is not part of a major modification may result in a significant emissions increase and projected actual emissions are not calculated using the emissions unit's potential to emit, before beginning actual construction the owner or operator shall document and maintain the following information:

  1. a description of the project;
  2. identification of any emissions unit for which emissions of a regulated NSR pollutant could be affected by the project;
  3. a description of the applicability test used to determine that the project is not a major modification for any regulated NSR pollutant, including:
    1. the baseline actual emissions;
    2. the projected actual emissions;
    3. the amount of emissions excluded that an existing unit could have accommodated during the consecutive 24-month period used to establish the baseline actual emissions and that are unrelated to the project (including increased utilization due to demand growth); and
    4. an explanation for why the amount was excluded, and any netting calculations, if applicable.
  • If the emissions unit is an EUSGU, then before beginning actual construction the owner or operator shall provide a copy of this information to the department.
  • Only a copy of this information is required, no determination from the department is required before beginning actual construction.
  • Indiana minor NSR rules require approval prior to beginning construction unless the project is exempt from permitting requirements.

The owner or operator is required to monitor emissions of any regulated pollutant that could increase as a result of the project and that is emitted by any emissions unit included in the project.

The owner or operator is required to maintain a record of the annual emissions, in tons per year on a calendar year basis, for a period of five (5) years following resumption of regular operations or for a period of ten (10) years following resumption of regular operations if the project increases the design capacity or the potential to emit of the emissions unit.

If the unit is an existing EUSGU, the owner or operator is required to submit a report within sixty (60) days after the end of the year to the department during the period of time that the post change emissions are calculated and maintained.

  • The owner or operator must make the information required to be documented and maintained available for review upon a request for inspection by the department.
  • The general public may request this information from the department under 326 IAC 17.1 "Public Records; Confidential Information; Confidentiality Agreements".

If the existing unit is a non-EUSGU the owner or operator is required to report within sixty (60) days after the end of the year to the department the annual emissions, in tons per year, exceeding the baseline actual emissions by a significant amount and if the emissions differ from the preconstruction projection.

Clean Units

The Clean Unit (CU) designations are available to emissions units at major sources that have installed 'state-of-the-art' air pollution control (including pollution prevention) systems. The physical or operational changes at these Clean Units are reviewed under a special 'Clean Unit test' instead of the other net emissions increase methodologies in the rule (i.e., ATPA) discussed in the previous section. The review under the CU test for various changes that continue to maintain the CU designation is intended to provide sources with enhanced flexibility to make changes in response to market demand without a need to obtain a pre-construction major NSR permit.

Introduction

The premise for providing the CU designation and test is that there are minimal or no improvements in emission control technologies under major NSR due to physical or operational changes at the emissions units that have installed state-of-the-art air pollution control technology in the recent past (previous 10 years). The new applicability test provides criteria to determine whether physical or operational changes at the emissions units affect the CU designation and prompt the need for evaluating applicability under the ATPA test.

Control Technology Requirements

Advantage:

  • For an emissions unit that is designated as CU, the Permittee need not evaluate the physical or operational changes under ATPA test if the emission limitations or work practice requirements in the permit are not affected. In addition, the change should not affect any physical or operational characteristic that formed the basis for the CU designation.

Any emission unit at a major source that is equipped with state-of-the-art air pollution control (including pollution prevention) is eligible for the CU designation. The air pollution control must also achieve reductions when compared to the level of emissions from the uncontrolled, standard new emissions unit. The Permittee is also required to make a financial investment for the installation of the emissions control technology. The investments by the Permittee may be expenses towards research and development or application of pollution prevention techniques at the emissions units.

The CU designation is pollutant specific and therefore, the Permittee will have to obtain a separate CU designation for each pollutant. If the same control technology is used to control multiple pollutants, the Permittee can use the same control technology as a basis for multiple CU designations. (See next section about the types of CU designations). A CU designation cannot be granted for an emissions unit if no reduction is achieved in emissions below the level of standard, uncontrolled, new emissions unit of the same type.

Types of Clean Unit designation

There are two types of CU designations. They are as follows:

  1. Units reviewed under major NSR:
    • At major sources the emissions units that are permitted under a major NSR or modification provision of PSD or non-attainment NSR that are required to install control technology as part of BACT or LAER to control emissions of specific pollutant are automatically assigned a CU designation for that pollutant. In addition, this type of CU designation is applicable retroactively. That is, the emissions units that have undergone major NSR or modification review within a period of 10 years prior to the date these revisions to the rule become effective in the State, are automatically designated as CUs if they meet the control technology requirements.
  2. Units not reviewed under major NSR
    • At major sources, the emissions units that are not subject to the requirements of major NSR or modification under PSD or non-attainment NSR can also obtain CU designation. In this case, the control technology has to meet the following requirements:
      1. For Sources located in attainment areas, the emissions control technology should be comparable to the Best Available Control Technology (BACT) and meet the control technology requirements.
      2. For Sources located in non-attainment areas, the emissions control technology should be comparable to the Lowest Achievable Emission Rate (LAER) and meet the control technology requirements.
      3. The allowable emissions of the regulated pollutant will not cause or contribute to the violation of National Ambient Air Quality Standard (NAAQS) or PSD increment or adversely impact Air Quality Related Value (AQRV) in any Class I area.

How It Helps the Permittee

  • The emissions units that did not go through major NSR permitting which have installed emissions controls in the past, do not automatically qualify and are not designated as a CU retroactively. The section about "obtaining the CU designation process" details the process for such units.

The CU test provides the ermittees with operational flexibility to make changes in response to market demand fluctuations or other factors requiring minor process changes. These changes can be implemented without a need to obtain a pre-construction approval which is needed to evaluate whether the change triggers major modification requirements under PSD or NA NSR. A key element for this flexibility is that the changes should not affect the Clean Unit designation as discussed in the "maintaining CU designation" section. However, there may be other requirements applicable to these changes under the State's permitting program that may trigger a need for an approval.

The CU test provides certainty and simplicity to the process of evaluating changes at major sources. In evaluating the changes the Permittee need only establish that post change the emission unit will continue to function within the applicable emission limits and/or work practice requirement and will not affect the physical or operation characteristics that formed the basis for the BACT or LAER determination as applicable. That is, the emissions unit will continue to comply with all applicable requirements in the permit, emissions limitations or work practice standards and physical and operational characteristics that formed the basis for the CU designation.

No additional quantification of emissions or demonstration of non-applicability of major NSR requirements is necessary under the CU test.

The CU test can only be used for the changes at units that are designated as such. Under recent revisions to the PSD and NA NSR, the new term 'project' has been added as described in ATPA section. If a project at a major source requires changes at Clean Units and other emissions units, which are not designated as CU, then the CU test can only be applied to the portion of changes at the Clean Unit.

Obtaining clean unit designation process

The process of obtaining a CU designation depends upon whether or not the emissions unit is undergoing permit approval under major NSR or modification provisions of PSD or NA NSR. In addition, for select units the CU designation may also be available in a retroactive manner. The different scenarios are discussed below:

  1. Units reviewed under major NSR:
    • Emissions units that are being reviewed under major NSR or modification provisions of applicable rules in the area are eligible for the CU designation. Emissions units that were reviewed under major NSR provisions within the last 10 years from the date the CU designation is available in the State are automatically designated the same. (Note: please review effective and expiration date provisions for retroactive CU designation.) The emissions control technology installed as part of the BACT or LAER requirements, as applicable, should meet the Control Technology requirements already discussed.
    • After the expiration or loss of the CU designation, in order to re-qualify for CU designation, the Permittee must obtain a new major NSR permit with the current day BACT or LAER requirements, as applicable. The BACT or LAER shall meet the Control Technology requirements already discussed except, additional financial investment will not be needed if existing BACT or LAER meets the current day standard.
    • In the future the department will designate any emissions unit undergoing major NSR permitting as a CU, if the emissions controls comply with the CU criteria.
  2. Units not reviewed under major NSR:
    • Emissions units that are not being reviewed under major NSR provisions of applicable rules in the area are also eligible for a CU designation, if these units are equipped with state-of-the-art emissions control technology or pollution prevention systems.
    • The emissions control technology employed on these emissions units should meet or be more stringent than the level required by the BACT or LAER requirement as applicable for similar units at the time of the issuance of the CU designation and also meet the control technology requirements already discussed. In addition, the allowable emissions from the emissions unit, to be designated as a CU will have to be modeled to demonstrate that it does not cause or contribute to a violation of the NAAQS, the PSD increment, or does not impact an air quality related value (AQRV) in any Class I area.
      • Remember: The CU designation only applies to the emissions of the pollutant that is controlled using emissions control technology. So the CU test can only be applied to part of the modification affecting that pollutant. Other pollutants would have to be evaluated under ATPA methodology for an increase in emissions.
    • Emissions units that were equipped with state-of-the-art emissions control technology in the past can also be designated as a CU, even if these units were not reviewed under a major NSR permit. For such units, after the revisions to the rule become effective in the State, the Permittee should submit a request to the department for the CU designation. This request should include the evaluation of BACT or LAER requirements, as applicable, for this type of emissions unit and a comparison of control technology installed at the emissions unit to the BACT or LAER requirement, as applicable. The CU designation can only be granted if the existing control technology is at least as stringent as that required by the BACT or LAER requirements, as applicable, at the time of issuance of such approval granting the CU designation. The emissions controls should meet the requirements already discussed in the Control Technology Requirements section.
    • The CU designation for such emissions units is issued through a Source Modification approval (per 326 IAC 2-7-10.5) that includes the requirement to provide opportunity for public comment. A detailed discussion on the approval is included in the "Permit Requirements for CU designation" section.
    • In order to re-qualify for a CU designation, after the expiration or loss of the CU designation, the Permittee must obtain a new approval with the comparison that the emissions controls still meet the current day BACT or LAER requirements, as applicable, at the time of the issuance of the re-qualification of the CU designation. The emissions control shall meet the control technology requirements already discussed except, additional financial investment will not be needed if existing emissions control technology meets or is more stringent than the BACT or LAER standard at the time of re-qualification.
  3. Substantially as effective test for Units not reviewed under major NSR
    • CU per Major NSR (example):
      • A gas turbine permitted under major NSR in March 1998 installed SCR for NOx emissions control. The unit commenced operation in January 2000.
      • The effective date of CU designation will be the date the revisions to the rules become effective in the State (sometime in fall 2004).
      • The expiration date of the CU designation will be January 2010, exactly 10 years after the date the controls were put into operation.
    • During the comment period for the CU designation under Source Modification approval, the Permittee or the public can demonstrate if the proposed or existing control technology is substantially as effective as the BACT or LAER requirements, as applicable. If the Permittee or public provides grounds to re-evaluate the Control Technology requirements prior to issuance of the approval, then, the department will review the information presented on the record as part of the public comment and make final determination.

Clean Unit designation effective date

There are multiple scenarios that determine the effective date for the CU designation. They are as follows:

  1. Emissions units obtaining major NSR permit after the revisions are effective in the State
    • The new emissions units that will be permitted under major NSR or a modification after the revisions become effective in the State, are automatically designated as a CU, if they meet the control technology requirements. The effective date for the CU designation for that unit will be the date the emissions control technology is operational or three years after the date of permit issuance, whichever occurs earlier. A similar approach also applies to the emissions units re-qualifying for CU designation applying the new emissions control technology to meet the BACT or LAER standard at the time of re-qualification.
    • For emissions units re-qualifying for CU designation using the existing emissions control technology, the designation becomes effective at the time the major NSR permit is issued.
  2. Existing emissions units that have undergone major NSR prior to the revisions being effective in the State
    • The existing emissions units that have met the control technology requirements and have received a major NSR or modification permit are automatically designated as a CU. The effective date for the CU designation for that unit will be the date the emissions control technology is operational or three years after the date of the major NSR or modification permit issuance, whichever occurs earlier. The CU designation is not effective prior to the date these revisions become effective in the State.
  3. Existing and new emissions units that will not be reviewed under major NSR for CU designation
    • For units being designated as a CU under the Source Modification approval, the effective date is the date the approval is issued or the date the emissions control technology is operational, whichever occurs later.

Clean Unit Designation Expiration Date

The CU designation generally expires 10 years after the date the designation became effective for the emissions unit. The only exception will be the CU designation for existing emissions units that have undergone major NSR permitting and have been automatically designated as CU. In this case the designation expires 10 years after the date the emissions control technology was placed into service.

In addition, the CU designation expires anytime the Permittee fails to maintain the CU designation per the requirements discussed in the section 'maintaining CU designation'.

Permit Requirements for Clean Unit Designations

The following section covers the permitting requirements for establishing CU designations and incorporates the designations in the Part 70 Permit.

Application and permit types

The emissions units that automatically qualify for a CU designation do not require any new determination for the designation. Permittees that have existing emissions units that automatically qualify as CUs can use the CU test for changes at these CUs, as long as the designation is valid for the CU. After the date these revisions to the rules become effective in the State, whenever the department issues any major NSR or modification permit for emissions unit that meet the CU criteria, it will be designated as such in the permit.

For the emissions units equipped with emissions control technology that were not, or will not, be reviewed under a major NSR permit, the Permittee must submit an application for Significant Source Modification (SSM) under 326 IAC 2-7-10.5 in order to obtain a CU designation. For new emissions units, after the revisions to the rule become effective in the State, the Permittee shall note in the Significant Source Modification application that the unit should be designated as a CU. In addition to the requirements of the SSM, the application should contain detailed top-down BACT or LAER determinations, as applicable, a demonstration comparing the emissions control technology to the BACT or LAER requirements, as applicable, and modeling analysis to determine impacts on air quality.

For CUs that have not already been incorporated in the Part 70 Permit for the Source, the Permittee either through permit modification or at the time of renewal, should request for the CU designation requirements to be incorporated in the Part 70 Permit.

Permit Content

For emissions units that qualify for CU designation through major NSR the major NSR permit will contain the following:

  1. Emissions limitation based on BACT or LAER (as applicable);
  2. Physical and operational characteristics that formed the basis for BACT or LAER (such as: production capacity, throughput or potential to emit);
  3. Other permit terms and conditions such as hours of operation;
  4. Appropriate monitoring, recordkeeping, and reporting requirements to show compliance with above.

For emissions units that qualify for CU designation through SSM (no major NSR), the permit will contain the following:

  1. Source specific allowables for clean unit;
  2. Terms and conditions used to compare BACT/LAER requirements (e.g. limits on operating parameters);
  3. Any conditions including physical or operational characteristics used as the basis for the determination (e.g., limits on raw materials usage);
  4. Monitoring, recordkeeping, and reporting requirements to demonstrate clean unit designation;
  5. Additional monitoring, recordkeeping, and reporting requirements may be required to assure compliance under Title V;
  6. The SSM approvals have applicable fees and timeframe similar to major NSR approvals.

The Part 70 Permit itself should include the following (either through permit modification or incorporated at the time of renewal) as the minimum information pertaining to CU designation:

  1. Statement designating CU.
  2. Effective and expiration dates of the CU designation. If unknown, document the event that triggers the CU designation. Once known these dates should be incorporated in the Part 70 Permit.
  3. Emissions limitations, work practice requirements and any physical or operational characteristics, such as potential to emit, production capacity, or throughput.
  4. Monitoring, recordkeeping and reporting needed to demonstrate that the CU is in compliance with the requirements.
  5. Requirements pertaining to the obligations of the Permittee in order to maintain the CU designation and consequences for failing to do the same.

Operating and Maintaining Clean Unit designation

Modifications at Clean Units
  1. If construction of a particular modification or project at an emissions unit is started after the effective date and prior to the expiration of the CU designation, the modification is eligible to be evaluated under the CU test. As long as the modification does not require any revision to the emission limitation or work practice standard applicable to the CU, the CU designation is unaltered and no other applicability determination for modification under NSR is required. In addition, the modification should not alter any physical or operational characteristics, such as potential to emit, production capacity, or throughput that formed the basis for, or equivalency to, the BACT or LAER determination, as applicable, for designating the CU. The department intends to identify limited or allowable potential to emit, or production capacity / throughput in the permit condition to aid in the clear identification of these parameters to assure compliance with provisions of the CU designations.
  2. When the modification requires a revision to the emissions limitation, work practice standard, or physical or operational characteristics, the CU designation expires the day the permit change for the modification is issued. The Permittee can elect to re-qualify as a CU under the procedure already discussed in this chapter.
  3. In the event that a Permittee begins the construction of a modification at a CU without applying for a revision to change the permit requirements, the CU designation expires the day the construction begins.
  4. The modification that causes an emissions unit to lose its CU designation will revert it to an 'existing emissions unit', requiring the determination of major modification applicability as discussed in the APTA section.
Maintaining Clean Unit designation

In order to maintain a CU designation, the emission unit should be in compliance with all emission limitations and/or work practice standards documented in the permit. In addition, the CU should not be altered by any physical or operational change that makes the emissions unit operate differently than the physical or operational characteristics that formed the basis for the evaluation of CU designation.

The CU should be in compliance with all applicable requirements in the Part 70 Permit. The emissions control technology evaluated for designating the CU shall be in operation during the life of the CU designation. In the event that the emissions unit or control technology is replaced, the CU designation ends the date the emissions unit or control technology is removed from service.

Impacts on Netting, Offsets and re-designation

The increases or decreases of emissions due to physical or operational changes at a CU are not included in the net emissions increase calculations for other changes at the source except:

  1. If such usage occurs before the effective date or after the expiration date of the CU designation; or
  2. If the emissions are reduced below the level that qualified the unit to obtain a CU designation.

CU netting:

  • A unit once designated as CU no longer forms a part of the netting calculations at the Source. Emissions changes before the effective date and after the expiration date of CU designation should be included in netting.

The emissions credits generated in accordance with the above would have to be surplus, quantifiable, permanent and made enforceable in a permit.

When an area is re-designated for attainment status, the CU designation in effect at the time is not affected. However, for renewal of a CU designation located in such an area, the evaluation is conducted in accordance with requirements applicable at the time.

Pollution Control Project (PCP) Exclusions

The term "pollution control project (PCP)" is defined in the major new source review rules (326 IAC 2-2-1 and 326 IAC 2-3-1).

A pollution control project (PCP) is any activity, project, or set of work practices, including pollution prevention, that reduces air emissions. The PCP exclusion is available to owners and operators of major sources that propose to implement PCPs that will result in significant emissions reductions in one or more pollutants but that may also simultaneously result in significant increases in emissions of other regulated pollutants.

Purpose of the Pollution Control Project Exclusion

Advantage of PCP:

  • An owner or operator does not have to comply with major new source review requirements such as BACT or LAER for a project eligible for the PCP exclusion, even though it causes a significant increase in collateral emissions.

The pollution control project (PCP) exclusion allows the installation of qualified projects to be exempt from becoming major modifications due to the significant emissions increases, or collateral emissions increases related to the project. The PCP exclusion is the mechanism for making requirements of major new source review not applicable to projects that are deemed environmentally beneficial. This exclusion removes major new source review as a regulatory hurdle or disincentive for owners or operators seeking to develop and implement pollution prevention and pollution control strategies.

However, the impacts of the collateral emissions increases still have to be identified, minimized, and mitigated, where appropriate. Collateral emissions increases are the emissions increases of a pollutant other than the ones being targeted to be controlled. The owner or operator that implements a project subject to this exclusion will have to minimize the collateral emissions within the physical configuration and operational standards usually associated with that type of control device or practice.

The PCP exclusion is only applicable to projects that will cause a significant net emissions increase in a regulated pollutant. If there are no emissions increases associated with the project, there is no need to evaluate it in terms of this exclusion because it is exempt from major new source review as it does not cause a significant increase in emissions.

Types of Pollution Control Projects

The term "pollution control project (PCP)" is defined in the major new source review rules (326 IAC 2-2-1 and 326 IAC 2-3-1), and includes pollution prevention. The term is limited to the reduction of air emissions for the purposes of the exclusion. It does not cover any other form of mitigation of emissions from other environmental media. Any activity associated with the project necessary to finalize and implement the project is considered part of the PCP. A PCP may also include the replacement or upgrade of an existing emission control device with a more effective control device or technology.

Examples of qualified projects:

Addition of a thermal oxidizer to control an existing paint booth. Any associated activities necessary for the construction and operation of the thermal oxidizer, such as pipes, valves, meters, etc.

Change in process, product reformulation or redesign, substitution of less polluting raw materials.

Modification of an existing fuel injection system of an internal combustion engine to optimize in-cylinder mixing of air and natural gas fuel, thus reducing the formation of NOx.

Change in raw materials due to cost or shortage and, at the same time, the change reduces emissions.

There are two (2) general types of PCPs that are evaluated for the exclusion:

  • projects presumed to be environmentally beneficial, also known as "listed" projects
  • projects that are evaluated on a case-by-case basis, also known as "Non-listed" projects
Presumed Environmentally Beneficial or Listed Projects

The first general type of pollution control project (PCP) consists of those projects that are specifically "listed" in the definitions of "pollution control project" in the major new source review rules (326 IAC 2-2-1 and 326 IAC 2-3-1) and are presumed to be environmentally beneficial.

"Listed" PCPs are projects that have been automatically presumed to satisfy the environmentally beneficial test of the PCP exclusion because they have been historically proven to reduce emissions from a non-source specific perspective. These listed projects are:

  • For control of sulfur dioxide (SO2)
    • Conventional flue gas desulfurization
    • Advanced flue gas desulfurization
    • Sorbent injection
  • For control of nitrogen oxides (NOX)
    • Flue gas recirculation
    • Low-NOX burners or combustors
    • Selective noncatalytic reduction (SNCR)
    • Selective catalytic reduction (SCR)
    • Low emission combustion for internal combustion engines
    • Oxidation/absorption catalysts
  • For control of volatile organic compounds (VOCs) or hazardous air pollutants (HAPs)
    • Regenerative thermal oxidizers
    • Catalytic oxidizers
    • Condensers
    • Thermal incinerators
    • Hydrocarbon combustion flares
    • Biofiltration
    • Absorbers and adsorbers
    • Floating roofs for storage vessels
  • For control of particulate matter (PM) or other pollutants
    • Electrostatic precipitators
    • Baghouses
    • High efficiency multiclones
    • Scrubbers
  • Activities or projects undertaken to accommodate switching or partially switching to an inherently less polluting fuel. These fuel switches are limited to the following:

Fuel Switches
From: To:
A heavier grade of fuel oil A lighter grade of fuel oil
Any grade of oil 0.05% sulfur diesel
High sulfur coal Low sulfur coal with a 1.2% maximum sulfur content
Coal Wood, excluding "dirty" wood *
Coal No. 2 fuel oil with a 0.5% maximum sulfur content
Coal Natural gas, propane, or gasified coal
Oil Natural gas, propane, or gasified coal
Any solid fuel Natural gas, propane, or gasified coal

* "Dirty" wood includes construction or demolition waste, chemical or pesticide treated wood, and other forms of unclean wood.Fuel switching to this type of wood does not automatically qualify for a PCP.

  • Example of Fuel Switch PCP: An owner or operator of a company proposes to replace a portion of oil to be combusted in a boiler with natural gas. This project is presumed to be environmentally beneficial.
  • Activities or projects undertaken to accommodate switching from the use of one ozone depleting substance (ODS) to the use of a substance with a lower or zero ozone depletion potential (ODP), including changes to equipment needed to accommodate the activity or project, that meet the following requirements:
    • The productive capacity of the equipment is not increased as a result of the activity or project.
    • The projected usage of the new substance is lower, on an ODP-weighted basis, than the baseline usage of the replaced ODS. This determination shall be made using the following procedure:
      1. Determine the ODP of the substances by consulting 40 CFR Part 82, Subpart A, Appendices A and B*.
      2. Calculate the replaced ODP-weighted amount by multiplying the baseline actual usage, using the annualized average of any 24 consecutive months of usage within the past 10 years, by the ODP of the replaced ODS.
      3. Calculate the projected ODP-weighted amount by multiplying the projected actual usage of the new substance by its ODP.
      4. If the value calculated in item (ii) is more than the value calculated in item (iii), then the projected use of the new substance is lower than the baseline usage of the replaced ODS, on an ODP-weighted basis.

For the list of ozone depleting substances, please see Appendix A: Ozone Depletion Substance.

Case-by-case Determination or Non-listed Projects

The second general type of PCP consists of those projects that are not specifically listed in the definitions of "pollution control project" in the major new source review rules (326 IAC 2-2-1 and 326 IAC 2-3-1). These projects must be demonstrated to be environmentally beneficial on a case-by-case basis.

  • Example of a Non-Listed PCP: An owner or operator of a company proposes to replace the use of a raw material that causes emissions of a regulated NSR pollutant with a raw material that causes significantly less emissions of that pollutant. However, the use of the new raw material will cause more emissions of another regulated NSR pollutant such that the change would result in a significant net emissions increase of the other pollutant. The change is being proposed due to the high cost and shortage of the current material. The project can be evaluated for a pollution control project exclusion under the case-by-case determination provisions.
Projects That Do Not Qualify

The types of projects that do not qualify as PCPs are:

  • Construction or addition of an emission control for a new emission unit.
  • Replacement or reconstruction of an entire existing unit with a newer or different unit, even if that unit is lower-emitting.
  • Fabricators, manufacturers or producers of emission control equipment, recycling, except certain in-process recycling practices, energy recovery, treatment or disposal.
  • Example of projects not qualified for PCP: An owner or operator of a company proposes to replace an existing coal-fired boiler with a new natural gas-fired boiler. The project cannot be evaluated for a pollution control project exclusion because it is a replacement of an existing unit with a new unit.

PCP Exclusion Requirements

An owner or operator must satisfy two (2) criteria to qualify for the pollution control project (PCP) exclusion:

  • "environmentally beneficial" test and
  • "cause or contribute" test.

To satisfy the first criterion, the "environmentally beneficial" test, the owner or operator must demonstrate that the emission decreases due to the project outweigh the impacts of any associated emissions increases. The scope of this environmentally beneficial analysis depends on the project.

To satisfy the second criterion, the "cause or contribute" test, the owner or operator must demonstrate that the collateral emissions increases associated with the project will not cause or contribute to a violation of NAAQS or PSD increment. These increases should also not adversely impact an air quality related value, such as visibility, in a Class I area. This can be determined by performing an air quality analysis or by other methods that sufficiently demonstrate that the project will not cause or contribute to a violation of the NAAQS or PSD increment or adversely impact an air quality related value. Other methods that may be acceptable are using a recent, previously completed air quality analysis or using a quick, screening-level analysis if the area is an attainment area for the pollutant of concern and the PSD increment is not close to being consumed.

In an area that is designated nonattainment for the collateral pollutant, an owner or operator must satisfy the air quality analysis requirement by demonstrating that the collateral emissions are being offset so that no actual increase is realized. This is sufficient to demonstrate that the project does not cause or contribute to the violation or adversely impact an air quality related value.

There are currently no Class I areas in Indiana. The closest Class I area to Indiana is Mammoth Cave in Kentucky.

Environmentally Beneficial Criteria for Listed Projects

For the presumed environmentally beneficial projects indicated in the rule (also known as "listed" projects), a simple statement indicating that it is one of the listed projects is sufficient to satisfy the environmentally beneficial test.

Environmentally Beneficial Criteria for Non-listed Projects

For projects that are not specifically listed in the rule which are to be evaluated on a case-by-case basis, a more rigorous environmentally beneficial analysis will be required. Source specific factors will be considered in the analysis, and the owner or operator must demonstrate that the benefits of the reductions outweigh the impacts of the increases.

  • Example of a case-by-case PCP: An owner or operator proposes to change a raw material so that less volatile organic compound (VOC) is emitted and a hazardous air pollutant (HAP) is eliminated; however, the new material emits more particulate matter so that it would result in a significant net emissions increase. The environmentally beneficial demonstration should include information on the reduction in VOC and HAP and compare it to the increase in particulate matter to show that the reductions in two types of pollutants of concern outweigh the increase in particulate matter.
Additional Requirements for Increases of Pollutants in Non-attainment Areas

The same general criteria are used in evaluating a PCP exclusion request in a nonattainment area; however, there are a few additional requirements. If the PCP would result in a significant net emissions increase in any regulated NSR pollutant for which the area is classified as nonattainment, the owner or operator must offset the significant net emissions increase from the PCP on a 1:1 ratio in accordance with the following provisions:

  • The emission offsets must be reductions in actual emissions of the same pollutant from an existing source or combination of existing sources; and,
  • The significant net emission increase from the PCP must be offset so that the emissions increase will not cause or contribute to a violation of NAAQS or PSD increment or adversely impact an air quality related value, such as visibility, that has been identified for a federal Class I area by a federal land manager and for which information is available to the general public.

Submittal Requirements

The application requirements for PCP exclusions for listed and non-listed projects include essentially the same basic information, although less environmental beneficial analysis will be necessary for listed projects. Descriptions of the application requirements for listed and non-listed projects are provided below. In either case, the owner or operator should include the Application Cover Sheet and the GSD-01 form (General Source Data), in the application.

Application Process for Listed Projects
  • Can Start Construction Upon Submission of Notification
  • Can Start Operation Upon Submission of Minor Permit Modification Application

The approval process for listed projects is streamlined so that upon submission of a notification to the department, the owner or operator may start the construction of the project. The notification also serves as the minor permit modification application in accordance with 326 IAC 2-7-12(b)(1)(G). After submittal of the minor permit modification application, the owner or operator can begin operation of the pollution control project pursuant to 326 IAC 2-7-12(b)(7).

To ensure a smoother process, the owner or operator should include all the information necessary for a minor permit modification with the notification to allow simultaneous processing of the permit modification. The operating permit will be modified under the minor permit modification process and must undergo public review. The department must address any comments received during the comment period.

Applications Process for Non-listed Projects
  • For case by case PCPs: Significant source and permit modification approvals needed prior to construction and operation

The approval process for non-listed projects involves a source modification as well as a permit modification. The owner or operator must submit a significant source and permit modification application to the department pursuant to 326 IAC 2-7-10.5(f)(8) and 326 IAC 2-7-12(d) and obtain approval prior to construction and operation of the PCP.

To ensure a smoother process, the owner or operator should include all the information necessary for a significant permit modification with the source modification application to allow simultaneous processing of the source modification and permit modification under 326 IAC 2-7-12(c)(2). The significant source and permit modifications must undergo public review. The department must address comments received during the comment period.

Information To Be Submitted

In addition to these forms:

  • Application Cover Sheet
  • GSD-01 form (General Source Data)

the notification or application must include the following information:

  1. A detailed description of the proposed project.
  2. For "Listed" projects
    • A statement that the technology being used is one of the "listed" projects presumed to be environmentally beneficial and that the potential emissions decreases outweigh the potential increases of any regulated NSR pollutant.
    • For "Case-by-Case" projects: The potential emissions increases and decreases of any regulated NSR pollutant, and a copy of the environmentally beneficial analysis.
    • It may be useful to include such information as manufacturer's guarantees of emissions or manufacturer's specifications for the emission control equipment.
  3. A description of the compliance determination, monitoring, record keeping, and all other methods, to be used on an ongoing basis to demonstrate that the project is environmentally beneficial. These methods must be sufficient to meet the requirements in 326 IAC 2-7 (Part 70).
  4. A certification by the responsible official that the project will be designed and operated in a manner:
    • That is consistent with proper industry and engineering practices,
    • That is consistent with the environmentally beneficial analysis and air quality analysis,
    • That is consistent with information submitted in the notification or permit application, and
    • tominimize emissions of collateral pollutants, within the physical configuration and operational standards usually associated with the emissions control device or strategy.
  5. Demonstration that the PCP will not have an adverse air quality impact.

Operation Requirements after Obtaining the PCP Exclusion

After approval under the pollution control project (PCP) exclusion provisions, the owner or operator must:

  • operate the emission control equipment in a manner consistent with proper industry and engineering practices and consistent with the environmentally beneficial analysis and air quality analysis.
  • maintain copies on site of the environmentally beneficial analysis, the air quality impacts analysis, and monitoring and other emission records to prove the proper operation of the PCP.
  • comply with any provisions in the approval issued under 326 IAC 2-7 (Part 70) related to use and approval of the PCP exclusion.

The PCP exclusion only exempts the significant emission increase of the project from major new source requirements. The PCP exclusion does not exempt the control from other applicable compliance monitoring and reporting requirements that may be required to ensure that the PCP is environmentally beneficial and will not cause or contribute to a violation of a NAAQS or PSD increment or adversely impact an air quality related value. Owners or operators will need to report collateral emissions from PCPs on their emission statements.

Usage of Emission Reductions Created by Pollution Control Projects
  • Example: An owner or operator changes a raw material to reduce VOC emissions. The VOC emissions rate of the original raw material is 0.06 lbs/ton of product, while the VOC emission rate for new material is 0.04 lbs/ton of product. The emission reduction from 0.06 lbs/ton to 0.04 lbs/ton should not be included in significant net emissions calculations.
  • If the owner or operator further reduces the VOC emission rate from the 0.04 lbs/ton after the approval and obtains an enforceable limit in their operating permit, then the difference can be used as an emission credit.

The emission reductions initially achieved by a pollution control project (PCP) are an integral part of the environmentally beneficial analysis. To use the emission reductions for emission credit would not ensure appropriate environmental protection. Therefore, emission reductions used for the purposes of qualifying as a PCP can not be used as offsets, for netting, or for generation of emission reduction credits. If an owner or operator further reduces emissions after qualifying for the PCP exclusion, it may be possible to use those reductions for offsets or netting. In this situation, the emission credit is the difference between the level of reduction that was used to qualify for the PCP exclusion and the new emissions reductions. The reductions should be surplus, quantifiable, and permanent.

Plantwide Applicability Limit

  • A PAL is based on actual emissions.

A plantwide applicability limit (PAL) is an optional approach that will provide owners or operators of major NSR stationary sources with the ability to manage source-wide emissions without triggering major NSR applicability. The basis for a PAL is baseline actual emissions. A PAL is an annual (source-wide) emission limitation (12-month total rolled monthly) under which the source can make any changes without triggering major NSR applicability for that pollutant. A PAL is pollutant specific and a PAL is approved for a ten (10) year term.

A source with a PAL permit may modify the emissions unit or add new emissions units, without triggering major NSR applicability, as long as the PAL limit is not exceeded.

Obtaining a PAL

The PAL emissions limit is based on the sources baseline actual emissions for the PAL pollutant. Baseline actual emissions are calculated on a unit specific basis using the same 24-month period for each emissions unit. The PAL emissions limit is determined as follows;

  1. add the calculated baseline actual emissions for each unit
  2. add the potential to emit for any emissions units that began actual construction after the 24-month baseline period
  3. subtract the actual (or PTE) emissions for any units shutdown after the 24-month baseline period chosen
  4. add the major NSR significant level for the PAL pollutant

The owner or operator must then submit a permit application for a PAL.

  • The department will reduce the PAL level, in tons per year, in the PAL permit to become effective on the future compliance date of any applicable federal or state regulatory requirement that the department is aware of prior to issuance of the PAL permit.
PAL Permit Application (326 IAC 2-2.4-3)

As part of a permit application requesting a PAL the owner or operator of a major stationary source must submit the following information:

  1. a list of all emissions units at the source designated as small, significant or major based on their potential to emit.
  2. all federal or state applicable requirements, emission limitations or work practices that apply to each unit.
  3. calculations of the baseline actual emissions with supporting documentation including emissions associated with startup, shutdown and malfunctions.
  4. the calculation procedures that the owner or operator proposes to use to convert the monitoring system data to monthly emissions and annual emissions based on a twelve (12) month rolling total for each month for five (5) years.
  • A small emissions unit is a unit that emits or has the potential to emit the PAL pollutant in an amount less than the significant level for the PAL pollutant.
  • A significant emissions unit is a unit that has the potential to emit the PAL pollutant in an amount that is equal to or greater than the significant level for the PAL pollutant but less than the amount that would qualify the unit as major.
  • A major emissions unit is a unit that emits or has the potential to emit one hundred (100) tons per year or more of the PAL pollutant in an attainment area.

As part of a PAL application the owner or operator must use current emissions or other current direct measurement data to demonstrate that the monitoring system accurately determines emissions from each unit subject to the PAL. Data will need to be collected from all units subject to the PAL, including those that may be unregulated at the present time. If the owner or operator does not have current emissions data, or if the emissions unit's operation has changed since collection of that data, current accurate data will need to be obtained. This can be done by conducting performance tests or other direct measurements before submission of a complete permit application to obtain a PAL.

PAL Monitoring Requirements

A PAL permit must contain enforceable requirements for a monitoring system that accurately determines plantwide emissions for the PAL pollutant in terms of mass per unit time. All units operating under a PAL must have sufficient monitoring to accurately determine plantwide emissions for a 12-month rolling total. The PAL monitoring system must employ one (1) or more of the four (4) general monitoring approaches and must be approved by the department. The generally acceptable monitoring approaches for a PAL permit are the following:

  1. Mass balance calculations for activities using coatings or solvents: If not otherwise accounted for the owner or operator must assume that the emissions units emit all of the PAL pollutant contained in or created by any raw material or fuel used in or at the emissions units. This approach can only be used for processes using coatings or solvents.
  2. Continuous Emission Monitoring Systems (CEMS): CEMs must sample, analyze, and record data at least every fifteen (15) minutes while the emissions unit is operating and must comply with the applicable performance specifications found in 40 CFR Part 60, Appendix B.
  3. Continuous Parameter Monitoring Systems (CPMS) or Predictive Emissions Monitoring Systems (PEMS): CPMS or PEMS must be based on current site-specific data demonstrating a correlation between the monitored parameters and the PAL pollutant emissions across the range of operation of the emissions unit. While the emissions unit is operating, each CPMS or PEMS must sample, analyze, and record data at least every fifteen minutes, or at another less frequent interval approved by the department. Users of parameter monitoring must show a correlation between predicted and actual emissions across the anticipated operating range of the unit.
    • Establishing parameter monitoring is a resource-intensive effort, requiring extensive up-front testing, analysis, and development.
  4. Emission factors: Emission factors may be used for demonstrating compliance with a PAL as long as the factors are adjusted for the degree of uncertainty of limitations in the factors development. If using emission factors the emissions unit must operate within the designated range of use for the emission factor. The owner or operator of a significant emissions unit that relies on an emission factor to calculate PAL pollutant emissions shall conduct validation testing using other monitoring approaches (if technically practicable) to determine a site-specific emission factor within six (6) months of PAL permit issuance unless the department determines that testing is not required.
    • Use of monitoring systems that do not meet the minimum requirements approved by the department will render the PAL invalid.
    • A source owner or operator with five (5) units must be able, at any time, to quantify the baseline actual emissions for the past 12 months for each of the five (5) units.
    • The monitoring system data used to demonstrate the emissions unit operation must be re-validated to show that it accurately determines the emissions unit operation at least once every five (5) years for the life of the PAL. Data must be revalidated through a performance test or other scientifically valid means that is approved by the department.
PAL Recordkeeping Requirements

The owner or operator shall retain a copy of all records necessary to determine compliance with the PAL, including a determination of each emissions unit's twelve (12) month rolling total emissions, for five (5) years.

The owner or operator shall retain a copy of the PAL permit application, any applications for revisions to the PAL, each Part 70 annual certification of compliance, and all data relied on in certifying the compliance for a period of fifteen (15) years.

PAL Reporting Requirements

The owner or operator shall submit semiannual monitoring reports within thirty (30) days of each reporting period. The reports shall include reports of any deviations or exceedance of the PAL requirements, the results of any revalidation test or method within three (3) months after completion of the test method.

  • PAL monitoring, recordkeeping and reporting requirements can be more stringent than monitoring, recordkeeping and reporting requirements contained in current Part 70 permits.

PAL Effective Period and Renewal

A PAL is effective for a period of ten (10) years. A timely application must be submitted to the department by the source owner or operator to request renewal of a PAL. A timely application is one that is submitted at least six (6) months prior to, but not earlier than eighteen (18) months from, the date of PAL expiration. If the owner or operator submits a complete application to renew the PAL within this time period, then the PAL shall continue to be effective until the revised permit with the renewed PAL is issued. The PAL may be renewed at the same level or the department may set the PAL at a level it determines to be more representative of the source's baseline actual emissions.

Increasing a PAL

The department may increase a PAL emission limitation during the PAL effective period only if the source complies with the following:

  1. The owner or operator must submit a complete application to request an increase in the PAL limit identifying the emissions units contributing to the increase.
  2. Demonstrate that the sum of the baseline actual emissions of the small emissions units plus the baseline actual emissions of the significant and major emissions units, assuming application of BACT or LAER equivalent controls, plus the sum of the new or modified emissions units exceeds the PAL.
  3. Obtain a major NSR permit for all emissions units contributing to the increase regardless of the magnitude of the emissions increase resulting from the unit.
  4. The PAL permit shall require that the increased PAL level shall be effective on the day any emissions unit that is part of the PAL major modification becomes operational and begins to emit the PAL pollutant.
  • The PAL limit already includes the significant level for the pollutant. By causing an increase above the PAL the new or modified emissions units are causing an increase greater than the significant emissions threshold.

Termination or Revocation of a PAL

The owner or operator may at any time submit a written request to the department to terminate or revoke a PAL prior to the expiration or renewal of the PAL. The owner or operator may submit a proposed allowable emission limitation for each group of emissions units by distributing the PAL allowable emissions for the source among each of the emissions units that existed under the PAL.

The department shall decide whether and how the PAL allowable emissions will be distributed and issue a revised permit incorporating allowable limits for each emissions unit, or each group of emissions units, as the department determines is appropriate.

  • Distribution of the PAL allowable emissions may be based on the emissions limitations that were eliminated by the PAL.

The source shall continue to comply with a source-wide, multi-unit emissions cap equivalent to the level of the PAL emission limitation until the department issues a revised permit incorporating allowable limits for each emissions unit, or each group of emissions units.

  • During public review, any person may propose a PAL distribution of allowable emissions for the source for consideration by the department.

Appendix A: Ozone Depletion Substance (ODS)

(40 CFR Part 82)

Class I Substance: one of several groups of chemicals with an ozone-depletion potential of 0.2 or higher

Class II Substance: a chemical with an ozone-depletion potential of less than 0.2

  1. List of Class I Substances
    1. Group I
      • chlorofluorocarbon-11 (CFC-11)
      • >chlorofluorocarbon-12 (CFC-12)
      • chlorofluorocarbon-113 (CFC-113)
      • chlorofluorocarbon-114 (CFC-114)
      • chlorofluorocarbon-115 (CFC-115)
    2. Group II
      • halon-1211
      • halon-1301
      • halon-2402
    3. Group III
      • chlorofluorocarbon-13 (CFC-13)
      • chlorofluorocarbon-111 (CFC-111)
      • chlorofluorocarbon-112 (CFC-112)
      • chlorofluorocarbon-211 (CFC-211)
      • chlorofluorocarbon-212 (CFC-212)
      • chlorofluorocarbon-213 (CFC-213)
      • chlorofluorocarbon-214 (CFC-214)
      • chlorofluorocarbon-215 (CFC-215)
      • chlorofluorocarbon-216 (CFC-216)
      • chlorofluorocarbon-217 (CFC-217)
    4. Group IV
      • methyl chloroform
    5. Group V
      • carbon tetrachloride
  2. List of Class II Substances
    • hydrochlorofluorocarbon-21 (HCFC-21)
    • hydrochlorofluorocarbon-22 (HCFC-22)
    • hydrochlorofluorocarbon-31 (HCFC-31)
    • hydrochlorofluorocarbon-121 (HCFC-121)
    • hydrochlorofluorocarbon-122 (HCFC-122)
    • hydrochlorofluorocarbon-123 (HCFC-123)
    • hydrochlorofluorocarbon-124 (HCFC-124)
    • hydrochlorofluorocarbon-131 (HCFC-131)
    • hydrochlorofluorocarbon-132 (HCFC-132)
    • hydrochlorofluorocarbon-133 (HCFC-133)
    • hydrochlorofluorocarbon-141 (HCFC-141)
    • hydrochlorofluorocarbon-142 (HCFC-142)
    • hydrochlorofluorocarbon-221 (HCFC-221)
    • hydrochlorofluorocarbon-222 (HCFC-222)
    • hydrochlorofluorocarbon-223 (HCFC-223)
    • hydrochlorofluorocarbon-224 (HCFC-224)
    • hydrochlorofluorocarbon-225 (HCFC-225)
    • hydrochlorofluorocarbon-226 (HCFC-226)
    • hydrochlorofluorocarbon-231 (HCFC-231)
    • hydrochlorofluorocarbon-232 (HCFC-232)
    • hydrochlorofluorocarbon-233 (HCFC-233)
    • hydrochlorofluorocarbon-234 (HCFC-234)
    • hydrochlorofluorocarbon-235 (HCFC-235)
    • hydrochlorofluorocarbon-241 (HCFC-241)
    • hydrochlorofluorocarbon-242 (HCFC-242)
    • hydrochlorofluorocarbon-243 (HCFC-243)
    • hydrochlorofluorocarbon-244 (HCFC-244)
    • hydrochlorofluorocarbon-251 (HCFC-251)
    • hydrochlorofluorocarbon-252 (HCFC-252)
    • hydrochlorofluorocarbon-253 (HCFC-253)
    • hydrochlorofluorocarbon-261 (HCFC-261)
    • hydrochlorofluorocarbon-262 (HCFC-262)
    • hydrochlorofluorocarbon-271 (HCFC-271)
  3. Ozone-Depletion and Global Warming Potential:

Substance Ozone-depletion
potential
chlorofluorocarbon-11 (CFC-11) 1.0
chlorofluorocarbon-12 (CFC-12) 1.0
chlorofluorocarbon-13 (CFC-13) 1.0
chlorofluorocarbon-111 (CFC-111) 1.0
chlorofluorocarbon-112 (CFC-112) 1.0
chlorofluorocarbon-113 (CFC-113) 0.8
chlorofluorocarbon-114 (CFC-114) 1.0
chlorofluorocarbon-115 (CFC-115) 0.6
chlorofluorocarbon-211 (CFC-211) 1.0
chlorofluorocarbon-212 (CFC-212) 1.0
chlorofluorocarbon-213 (CFC-213) 1.0
chlorofluorocarbon-214 (CFC-214) 1.0
chlorofluorocarbon-215 (CFC-215) 1.0
chlorofluorocarbon-216 (CFC-216) 1.0
chlorofluorocarbon-217 (CFC-217) 1.0
halon-1211 3.0
halon-130 10.0
halon-2402 6.0
carbon tetrachloride 1.1
methyl chloroform 0.1
hydrochlorofluorocarbon-22 (HCFC-22) 0.05
hydrochlorofluorocarbon-123 (HCFC-123) 0.02
hydrochlorofluorocarbon-124 (HCFC-124) 0.02
hydrochlorofluorocarbon-141(b) (HCFC-141(b)) 0.1
hydrochlorofluorocarbon-142(b) (HCFC-142(b)) 0.06