BIOMASS INTEL

Expanding on Biomass Intel’s update on EPA’s announcement that greenhouse gases (GHGs) threaten human health and the environment, it appears that the stage is set for a dramatic battle over GHG regulation in the United States in 2010 and beyond.

For many, the EPA’s announcement was seen as a watershed moment giving teeth to the Supreme Court’s 2007 Massachusetts v. EPA ruling, which held that the EPA must regulate emissions under the Clean Air Act.  Coming on the heels of sharp criticism of the U.S. for stalling on comprehensive cap-and-trade legislation ahead of Copenhagen, the finding also provides a symbolic endorsement of climate change diplomacy in advance of Obama’s arrival, which is scheduled for December 18.

But now that the EPA has set the stage for federal regulation of GHGs, it finds itself in an awkward position.  The issue now facing the agency is whether to preempt a sputtering cap-and-trade legislative debate, which is currently stalled out in the Senate, and begin regulating GHG emissions as early as 2010.  Although the Obama administration and many lawmakers have indicated their preference that regulations be developed through enabling legislation, if consensus emerges from the Copenhagen talks, the U.S. will be under significant pressure to reduce its emissions.  Without federal cap-and-trade legislation, the EPA will likely step in.

Legally, the EPA’s ruling only affects vehicle emissions, but the precedent will likely result in substantial regulation for other source categories.  Before doing so, the agency will probably face an onslaught of legal challenges that could slow the process down considerably.

There are two key elements in the EPA finding that are already under scrutiny.

First, the EPA has established a new pollutant, “Well Mixed Greenhouse Gases,” which consists of six Kyoto gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride).  The new term groups the gases into one regulatory unit.  Interestingly, since vehicles are not sources for some of these gases, it is likely that the EPA is eying more comprehensive regulation further down the road, likely targeting stationary emitters as mentioned above.

Second, the EPA noted in its report that it does not consider greenhouse gases to be a regulated pollutant at this time.  This opens the door for altering the Title V permitting requirements for stationary sources under the Clean Air Act, which would have significant consequences for industry, and ultimately, may enable the EPA regulatory regime to integrate with cap-and-trade.

For the biomass industry, the announcement will have significant consequences.  Although biomass will likely come under more scrutiny as the U.S. GHG regulatory regime tightens, biomass both for power and biofuels will provide utilities and fuel producers an alternative to GHG-heavy fossil fuels; call it a dietary supplement for business-as-usual.

Image: Flickr/freefotouk