New Insights into Plantwide Applicability Limit (PAL) Permitting

New Insights into Plantwide Applicability Limit (PAL) Permitting

A Plantwide Applicability Limit (PAL) is an air permitting approach that has been potentially underutilized since its promulgation in 2002. In August of 2020, EPA released a guidance memo on PALs, which addressed concerns expressed by industry and made clarifications which have potential to make PAL permits more appealing to major sources.

A PAL is a simplified approach to major New Source Review (NSR) which allows for operational and facility changes under the “umbrella” of a facility-wide emission limit without triggering NSR for individual projects. This allows a facility the flexibility to respond to market conditions with a reduced permitting burden.

The guidance memo sought to address concerns and uncertainties regarding the PAL regulations as well as to emphasize the benefits of a PAL. It also clarified how the limit is set, which holds open doors to more desirable limits in this method of permitting. These discussions are outlined below.

Address Public Questions and Concerns

PAL permit reopening, expiration, and renewal were common themes in the public questions surrounding PALs. The PAL provisions include broad discretion for the permitting authority to reopen the PAL to address air quality issues, distribute allowable emissions to individual units upon expiration, and lower the PAL at renewal. The renewal method which includes a PAL reduction if the plant is operating significantly below its limit is perceived by some as automatic ratcheting.

EPA expresses that their expectation when giving broad discretion is that issues will be addressed on a case-by-case basis. This allows for consideration of product variability, market conditions, and permit negotiation. Ultimately, any established limit must be justified. EPA’s intent intends discretion to avoid penalizing a source for making voluntary emissions reductions.

Another theme of concern is the perception that monitoring requirements and emission factor justification could be burdensome. EPA discusses in this memo that these will be handled on a case-by-case basis and that in many cases existing monitoring methods will be sufficient.

More detailed responses to specific questions in these categories are available in the memo.

General Advantages of PALs

PALs can provide a benefit to the permittee, the permitting authority, and the environment. For the permittee, it allows for timely projects without triggering major NSR. This also reduces the burden on the permitting authority. There is an environmental benefit because a PAL incentivizes voluntary improvements in emission control and prohibits serial, small increases.

Setting the PAL

A PAL for a pollutant is set by adding the actual emissions from certain sources, potential emissions from certain sources, and the PSD significance threshold. The memo clarifies how different units contribute to setting the PAL.

• “New” Units are those which will be constructed or began operations within two years of the PAL application. They contribute with their potential to emit (PTE).
• Units “In Existence” are those operating during a selected 24-month baseline period. This period must be set within the 10 years prior to application submittal. They contribute with their actual emission rates during the baseline period.
• Units “Permanently shut down” are those operating during the selected baseline period, but which have been shut down since. They do not contribute to the PAL.
• Units “Not in Existence” are those which were not yet constructed during the baseline period, but not considered “New” by the definition above. They contribute with their PTE.

 

The “Not in Existence” clarification by EPA provides increased opportunities for facilities to set a PAL with greater headroom to allow for future projects and flexibility. A facility that has had various projects and changes within the last 10 years could set a baseline at the beginning of the 10 years and set the PAL based on several project’s PTEs.

 

For a simplified example, Facility A has Production Lines 1 through 5 and is applying for a PAL in 2021. Their installation timeline is outlined in the table below. That table also shows example PALs using two different baseline periods. Assume production lines have a potential to emit 50 tons of VOC, but typical operation is 25 tons. Sensible selection of the baseline period can greatly impact the resultant PAL and therefore the benefit afforded the facility.

 

Line	Installation	2012-2013 Baseline			2018-2019 Baseline
		Unit Status	Contribution	Tons	Unit Status	Contribution	Tons
1	2012	In Existence	Actual	25	In Existence	Actual	25
2	2012			25			25
3	2015	Not in Existence	PTE	50			25
4	2017			50			25
5	2021	New	PTE	50	New	PTE	50
Significance Threshold				40			40
Plantwide Applicability Limit				240			190

 

The earlier baseline resulted in a significantly larger limit, since more units (those “not in existence”) could be accounted for using their PTE. As demonstrated by this simple example, the baseline period is an important factor when considering the benefits of a PAL. The definition of “Not in Existence” as clarified in the 2020 memo could provide facilities with the opportunity to set a PAL with desirable room for operational flexibility.

 

Collin Scherdell

Collin@StevensEnvironmental.com