Moving from Sustainability Talk to Action

This is the third in a series of insights called “Moving from Sustainability Talk to Action.” As the market moves toward net-zero, carbon-free and low-carbon fuels infrastructure projects (fueled by the promise of tax credits) are key for realizing decarbonization goals. These semi-large infrastructure projects will need to navigate through the air permitting waters prior to the start of construction. This insight addresses the management of air quality and permitting risks on these projects.
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Ajay Kasarabada, P.E, AVP and Director – Environmental Solutions, Black & Veatch

Mike Rinkol, P.E., Subject Matter Lead – Air Regulations & Sciences, Black & Veatch
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The Inflation Reduction Act (IRA) was designed to animate the market to rapidly deploy infrastructure on the ground to meet ambitious decarbonization goals. While technological advancements are happening to electrify the ecosystem with green electrons, vast chunks of the economy still rely on conventional fossil fuels. During this transitionary period, owners, operators, and developers, as well as interested financial institutions, increasingly are considering investment in alternative fuels such as renewable hydrocarbon fuels from biomass feedstocks – and blue fuels sourced from hydrocarbon feedstocks with carbon capture and sequestration – to provide carbon-free or low-carbon energy sources to fuel the economic engine. The manufacturing processes that produce these alternate fuels use complex unit operations and are typically classified as chemical plants, which emit air emissions in addition to carbon dioxide (CO2).
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Examples of carbon-free and low-carbon fuels manufacturing projects:

• Renewable gasoline

• Renewable alcohols (ethanol, butanol, methanol, mixed alcohols)

• Sustainable aviation fuel (SAF)

• Blue hydrogen and ammonia from methane with carbon capture and sequestration

• Syngas and renewable natural gas from biomass feedstocks

These proposed fuel-manufacturing plants (fuels projects) are being evaluated for risk factors such as economics, reliability, operational flexibility and stability as part of initial conceptual studies and Project Definition Rating Index (PDRI) reviews. However, the environmental considerations – specifically the impact of air quality permitting requirements on project economics, design and schedule – are typically not considered until later in the project planning process. If we want to see these fuels projects implemented and operational to achieve further decarbonization, it is important that air quality and permitting metrics are not ignored.
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Clearing the Air on Permitting Requirements

The Clean Air Act Amendments of 1990 (CAAA) define stationary sources of air emissions as “any building, structure, facility or installation which emits any air pollutant.” Air construction permits are required prior to construction and operation of stationary sources and modification to existing stationary sources. The CAAA also defines modification as “any physical change in, or change in the method of operation of, a stationary source which increases the amount of air pollution emitted by such source or which results in the emissions of any air pollutant not previously emitted.” Fuels manufacturing operations have several stationary sources with air emissions. Consequently, air construction permits are required prior to construction and operation of these facilities.

The CAAA regulates six criteria air pollutants and 188 hazardous air pollutants (HAPs). The six criteria air pollutants are nitrogen dioxide (NO2), sulfur dioxide (SO2), carbon monoxide (CO), particulate matter (PM10 and PM2.5), ozone (volatile organic compounds or VOCs are considered surrogates for ozone and are regulated), and lead (Pb). In addition to these pollutants, some states also regulate state specific air toxics.

Affected parties and facilities must acquire an air construction permit with minimal requirements and overcome the least number of permitting risks. Air construction permits are classified as minor and major source construction permits depending upon the amount of emissions change from either a new installation or modification to an existing installation. In general, minor source air construction permits have the fewest permitting hurdles to overcome and regulatory requirements to meet. Major source permits are implemented under the federal CAAA New Source Review (NSR) provisions under two programs: the Prevention of Significant Deterioration (PSD) program outlined in 40 CFR 52.21, and the Nonattainment NSR (NNSR) program outlined in 40 CFR 51 and 52. PSD regulations apply to major stationary sources and major modifications at major existing sources undergoing construction in areas designated as attainment or unclassifiable. The PSD regulations are designed to ensure that the air quality in attainment areas does not significantly deteriorate or exceed the National Ambient Air Quality Standards (NAAQS) while providing a margin for future industrial and commercial growth. NNSR applies in regions that are classified as nonattainment for a particular pollutant(s).

The PSD program sets forth specific threshold levels, referred to as significant emission rates (SER) that are used to determine if an emissions increase constitutes a significant emissions increase for each PSD pollutant. The SERs for PSD pollutants that are typically of concern for facilities with combustion units are summarized in Table 1.

Air quality regulations can add complexity, costs and increased permitting time to a fuels project and should be addressed upfront in the project planning process. Air quality permitting requirements that include BACT and/or AAQIA may require additional pollution control equipment and fine-tuning of the project conceptual design, which can impact project cost and complexity in the permit application preparation and processing. Considerations such as colocation, common ownership and control, PSD avoidance via phasing projects and segmentation also add complexities and can increase the time to obtain an air construction permit, which must be obtained before a facility can commence construction.

Successful deployment of carbon-free and low-carbon fuels manufacturing projects requires air quality be integrated as a significant component of the overall fuels project planning phase. Navigating these waters can be complicated, especially as development and investment is spurred by tax incentives, which is why it’s vital to plan for air permitting prior to the start of construction.
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References:

• CAAA §111(a)(3)

• CAAA §111(a)(4)

• The air quality in a given area is designated as being in attainment for a pollutant if the monitored concentrations of that pollutant in the ambient air are less than the applicable National Ambient Air Quality Standards (NAAQS) or is designated as unclassifiable if sufficient monitoring data are not available to make an attainment decision. A given area is classified as non-attainment for a pollutant if the monitored concentrations of that pollutant in the ambient air in the area are above the NAAQS.

• A given area is classified as nonattainment for a pollutant if the monitored concentrations of that pollutant in the ambient air in the area are above the NAAQS.