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Acid Rain Program EPA ACID RAIN PROGRAM 2001 PROGRESS REPORT November 2002 This Progress Report replaces the Compliance Report and the Emissions Scorecard used in pre- vious years to report on the results of the Acid Rain Program. All data and results from the Acid Rain Program are now compiled in a single document that reports information on: S emission levels S compliance with the SO2 and NOx components of the program S SO2 allowance prices S emissions monitoring S air quality and deposition monitoring S environmental and human health effects and benefits This Progress Report will be published annually by EPA to update the public on the status of implementation of the Acid Rain Program and our progress towards achieving our environmental goals. Detailed unit-level emissions data are available on our website at http://www.epa.gov/air- markets/emissions/index. Our new query tool that provides access to a variety of EPA emissions data is available at http://cfpub.epa.gov/gdm. For more information on the Acid Rain Program, including information on SO 2 and NOx emissions, acid deposition monitoring, and the environ- mental effects of acid deposition, you can visit our website at http://www.epa.gov/airmarkets. EPA Acid Rain Program 2001 Progress Report EPA-430-R-02-009 Clean Air Markets Program Office of Air and Radiation U.S. Environmental Protection Agency November, 2002 Photo credits (clockwise, from upper left): USDA; SoftKey International; VTweb.com; Rick Webb; SoftKey International; SoftKey Internation- al; Photodisc.com (center) Table of Contents Introduction................................................................................................... 1 An Innovative Cap and Trade Program for SO2 ...................................... 2 The NOx Program.............................................................................. 2 Why Worry about Acid Rain?.............................................................3 The SO2 Program......................................................................................... 5 Emissions........................................................................................... 5 Compliance........................................................................................ 7 Geographic Trends in SO2 Emissions............................................... 9 SO2 Allowance Market.......................................................................12 The NOx Program......................................................................................... 14 Emissions........................................................................................... 14 Emission Limits.................................................................................. 16 Compliance........................................................................................ 18 Geographic Trends in NOx Emissions............................................... 18 Monitoring Results........................................................................................ 22 Emission Monitoring.......................................................................... 22 Air Quality and Deposition in 2001.................................................... 23 Clean Air Mapping and Analysis Program (C-MAP).......................... 27 Freshwater Monitoring....................................................................... 27 Environmental Improvement and Trends..................................................... 29 Improved Air Quality and Reduced Acid Deposition......................... 29 Visibility.............................................................................................. 34 Human Health Benefits...................................................................... 35 Ecological Effects of Reduced Acid Deposition................................. 35 Freshwater...............................................................................35 Forests.................................................................................... 37 Coastal Waters........................................................................37 Materials and Structures.................................................................... 38 Summary.......................................................................................................39 For Further Information................................................................................. 41 I ntroduction he Acid Rain Program was established under Title IV of the 1990 Clean Air Act Amendments. The program requires major reductions of sulfur dioxide T(SO2) and nitrogen oxides (NOx) emissions, the pollutants that cause acid rain. Using an innovative market-based or “cap and trade” approach to environ- mental protection, the program sets a permanent cap on the total amount of SO2 that may be emitted by electric power plants nationwide. The cap is set at about one half of the amount of SO2 emitted in 1980, and the trading component allows flexibility for individual fossil fuel-fired combustion units to select their own meth- ods of compliance. The program also sets NOx emission limitations (in pounds per million British thermal units or lb/mmBtu) for certain coal-fired electric utility boilers, representing about a 27% reduction from 1990 levels. The Acid Rain Pro- gram was implemented in two phases. Phase I applied primarily to the largest coal-fired sources from 1995 through 1999 for SO2 and from 1996 through 1999 for NOx. Phase II for both pollutants began in 2000 and applies to thousands of combustion units (see Figure 1). In 2001, there were 2,792 units affected by the SO2 provisions of the Acid Rain Program. Additionally, 1,046 of these units were required to meet a NOx emissions limit in 2001 under the Acid Rain Program pro- 1 visions . The Acid Rain Program has significantly reduced emissions of SO2 and Figure 1. Sources Affected by the SO2 Require- ments of Title IV (the Acid Rain Program) of the 1990 Clean Air Act, 2001 Most Phase I sources (the largest, highest- emitting sources) were in the Mid- west; in Phase II sources nation- wide are affected by the Acid Rain Source: EPA Program. 1 Sources affected by the Acid Rain Program are tracked for compliance purposes at the unit level. A single source (power plant) may have many units (combustion devices). page 1 Acid Rain Program Annual Progress Report, 2001 NOx from electric power plants and resulted in substantial environmental and human health benefits. An Innovative Cap and Trade Program for SO2 The SO 2 component of the Acid Rain Program represents a dramatic departure from traditional command and control regulatory approaches that establish source-specific emissions limitations. Instead, the program uses an overall emis- sions cap for SO2 that ensures emissions reductions are achieved and main - tained and a trading system that facilitates lowest-cost emissions reductions. The program features tradeable SO2 emissions allowances, where one allowance is a limited authorization to emit one ton of SO2. A fixed number of allowances are issued by the government, and they may be bought, sold, or banked for future use by utilities, brokers, or anyone else interested in holding them. Existing units are allocated allowances for each year; new units do not receive allowances and must buy them. At the end of the year all participants in the program are obliged to sur- render to EPA the number of allowances that correspond to their annual SO2 emissions. Affected sources must demonstrate compliance with the SO2 provisions of the Acid Rain Program at the end of each year. Sources are granted a 60-day grace period during which additional SO2 allowances may be purchased, if necessary, to cover each unit's emissions for the year. At the end of the grace period (the Allowance Transfer Deadline), the allowances a unit holds in its Allowance Track- ing System (ATS) account must equal or exceed the unit's annual SO 2 emissions for the previous year. The Acid Rain Program requires affected sources to moni- tor emissions continuously and to report their emissions regularly. Failure to sur- render sufficient allowances results in significant automatic penalties that include fines as well as a reduction in the number of allowances allocated in the following year. Any remaining SO2 allowances may be sold and/or banked for future use. The NOx Program The NOx component of the Acid Rain Program, using a more traditional regulato- ry approach, establishes an emission rate limit for certain types of coal-fired boil- ers. However, sources are provided a degree of flexibility through emissions aver- aging provisions, whereby a company can meet the standard emission limitations by averaging the emissions rates of two or more boilers. This allows sources to over-control at units where it is technically easier to control emissions, thereby achieving emissions reductions at a lower cost. Additionally, certain Phase II units elected to become subject to Phase I limits beginning in 1997. These early elec- tion units are not subject to the more stringent Phase II limits until 2008. Sources affected by the NOx portion of the Acid Rain Program must also demon- strate that they have complied with the NOx provisions at the end of the year. Sources demonstrate compliance with the NOx program by achieving an annual emission rate at or below mandated levels. page 2 Acid Rain Program Annual Progress Report, 2001 Why Worry about Acid Rain? Acid deposition, more commonly known as acid rain, occurs when emissions of SO2 and NOx react in
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