Program Basics Figures
Last updated: 05/2018
Acid Rain Program (ARP): 1995 - present
- The ARP began in 1995 and covers fossil fuel-fired power plants across the contiguous United States. The ARP is designed to reduce SO₂ and NOₓ emissions, the primary precursors of acid rain under Title IV of the Clean Air Act.
- The ARP’s market-based SO₂ cap and trade program sets an annual cap on the total amount of SO₂ that may be emitted by electricity generating units (EGUs). The final annual SO₂ emissions cap was set at 8.95 million tons in 2010, a level of about one-half of the emissions from the power sector in 1980.
- NOₓ reductions under the ARP are achieved through a rate-based approach that applies to a subset of coal-fired EGUs.
NOₓ Budget Trading Program (NBP): 2003 - 2008
- The NBP was a cap and trade program that operated from 2003 to 2008, requiring NOₓ emission reductions from affected power plants and industrial units in 21 eastern jurisdictions (20 states plus Washington D.C.) during the ozone season (May 1 – September 30, the warm summer months when ozone formation is highest). The NBP was designed as a mechanism that states could use to address regional interstate transport for the 1979 ozone air quality standard (known as a National Ambient Air Quality Standard, or NAAQS).
- In 2009, the CAIR NOₓ ozone season program replaced the NBP to continue ozone season NOₓ emission reductions from the power sector.
Clean Air Interstate Rule (CAIR): 2009 - 2014
- CAIR implementation began in 2009 (for the annual and ozone season NOₓ programs) and 2010 (for the SO₂ program) and ended on December 31, 2014. CAIR required 28 eastern jurisdictions (27 states plus Washington, D.C.) to reduce power sector SO₂ and/or NOₓ emissions to address regional interstate transport for the 1997 fine particle pollution (PM₂.₅) and ozone NAAQS.
- CAIR included three separate cap and trade programs to achieve the required reductions: the CAIR SO₂ trading program, the CAIR NOₓ annual trading program, and the CAIR NOₓ ozone season trading program.
- Two 2008 court decisions kept the requirements of CAIR in place temporarily but directed EPA to issue a new rule to replace it.
Cross-State Air Pollution Rule (CSAPR): 2015 - present
- The CSAPR was developed in response to the 2008 court decisions on CAIR and replaced CAIR starting on January 1, 2015.
- The CSAPR addresses regional interstate transport of fine particle and ozone pollution for the 1997 ozone and PM₂.₅ NAAQS and the 2006 PM₂.₅ NAAQS. In 2015, the CSAPR required a total of 28 eastern states to reduce SO₂ emissions, annual NOₓ emissions and/or ozone season NOₓ emissions. Specifically, the CSAPR requires reductions in annual emissions of SO₂ and NOₓ from power plants in 23 eastern states and reductions of NOₓ emissions during the ozone season from 25 eastern states.
- The CSAPR includes four separate cap and trade programs to achieve these reductions: the CSAPR SO₂ Group 1 and Group 2 trading programs, the CSAPR NOₓ annual trading program, and the CSAPR NOₓ ozone season trading program.
The total CSAPR budget for each of the four trading programs equals the sum of the individual state budgets for those states affected by each program. In 2017, some original CSAPR budgets tighten, particularly in the SO₂ Group 1 program. Also, the CSAPR Update replaces the original CSAPR Ozone Season NOₓ program for most states. The total CSAPR budget for each program is set at the following level in 2017:
- SO₂ Group 1 – 1,372,631 tons
- SO₂ Group 2 – 892,050 tons
- Annual NOₓ – 1,206,957 tons
- Ozone Season NOₓ – 316,464 tons
Cross-State Air Pollution Rule Update (CSAPR Update): 2017 - present
- The CSAPR Update was developed to address regional interstate transport for the 2008 ozone NAAQS and to respond to the July 2015 court remand of certain CSAPR ozone season requirements.
- Starting in May 2017, the CSAPR Update began further reducing ozone season NOₓ emissions from power plants in 22 states in the eastern U.S.
- The CSAPR Update achieves these reductions through an ozone season NOₓ cap and trade program. The total CSAPR Update budget equals the sum of the individual state budgets for those states included in the program. The CSAPR Update budget is set at 316,464 tons in 2017.1
Analysis and Background Information
Acid Rain Program
Title IV of the 1990 Clean Air Act (CAA) Amendments established the ARP to address acid deposition nationwide by reducing annual SO₂ and NOₓ emissions from fossil fuel-fired power plants. In contrast to traditional command and control regulatory methods that establish specific emissions limitations, the ARP SO₂ program introduced a novel allowance trading system that harnessed the economic incentives of the market to reduce pollution. This market-based cap and trade program was implemented in two phases. Phase I began in 1995 and affected the most polluting coal-burning units in 21 eastern and midwestern states. Phase II began in 2000 and expanded the program to include other units fired by coal, oil, and gas. Under Phase II, EPA also tightened the annual SO₂ emissions cap, with a permanent annual cap set at 8.95 million allowances starting in 2010. The NOₓ program has a similar results-oriented approach and ensures program integrity through measurement and reporting. However, it does not cap NOₓ emissions, nor does it utilize an allowance trading system. Instead, the ARP NOₓ program provisions apply boiler-specific NOₓ emission limits–or rates–in pounds per million British thermal units (lb/mmBtu) on certain coal-fired boilers. There is a degree of flexibility, however. Units under common control can comply through the use of emission rate averaging plans, subject to requirements ensuring that the total mass emissions from the units in an averaging plan do not exceed the total mass emissions the units would have emitted at their individual emission rate limits.
NOₓ Budget Trading Program
The NBP was a market-based cap and trade program created to reduce NOₓ emissions from power plants and other large combustion sources during the summer ozone season to address regional air pollution transport that contributes to the formation of ozone in the eastern United States. The program, which operated during the ozone season from 2003 to 2008, was a central component of the NOₓ State Implementation Plan (SIP) Call, promulgated in 1998, to help states achieve the 1979 ozone NAAQS. All 21 jurisdictions (20 states plus Washington, D.C.) covered by the NOₓ SIP Call opted to participate in the NBP. In 2009, CAIR's NOₓ ozone season program began, effectively replacing the NBP to continue achieving ozone season NOₓ emission reductions from the power sector.
Clean Air Interstate Rule
CAIR required 28 eastern jurisdictions (27 states plus Washington, D.C.) to make reductions in SO₂ and NOₓ emissions that cross state lines and contribute to unhealthy levels of fine particulate matter and ozone pollution in downwind areas. CAIR required 25 eastern jurisdictions (24 states plus Washington, D.C.) to limit annual power sector emissions of SO₂ and NOₓ to address regional interstate transport of air pollution that contributes to the formation of fine particulates. It also required 26 jurisdictions (25 states plus Washington, D.C.) to limit power sector ozone season NOₓ emissions to address regional interstate transport of air pollution that contributes to the formation of ozone during the ozone season. CAIR used three separate market-based cap and trade programs to achieve emission reductions and to help states meet the 1997 ozone and fine particle NAAQS.
EPA issued CAIR on May 12, 2005 and the CAIR federal implementation plans (FIPs) on April 26, 2006. In 2008, the U.S. Court of Appeals for the DC Circuit remanded CAIR to the Agency, leaving existing CAIR programs in place while directing EPA to replace them as rapidly as possible with a new rule consistent with the Clean Air Act. The CAIR NOₓ ozone season and NOₓ annual programs began in 2009, while the CAIR SO₂ program began in 2010.
The CSAPR replaced CAIR starting on January 1, 2015.
Cross-State Air Pollution Rule
EPA issued the CSAPR in July 2011, requiring 28 states in the eastern half of the United States to significantly improve air quality by reducing power plant emissions that cross state lines and contribute to fine particle and summertime ozone pollution in downwind states. The CSAPR requires 23 states to reduce annual SO₂ and NOₓ emissions to help downwind areas attain the 2006 and/or 1997 annual PM₂.₅ NAAQS. The CSAPR also requires 25 states to reduce ozone season NOₓ emissions to help downwind areas attain the 1997 ozone NAAQS. The CSAPR divides the states required to reduce SO₂ emissions into two groups (Group 1 and Group 2). Both groups must reduce their SO₂ emissions in Phase I. All Group 1 states, as well as some Group 2 states, must make additional reductions in SO₂ emissions in Phase II in order to eliminate their significant contribution to air quality problems in downwind areas.
The CSAPR was scheduled to replace CAIR starting on January 1, 2012. However, the timing of the CSAPR's implementation was affected by D.C. Circuit actions that stayed and then vacated the CSAPR before implementation. On April 29, 2014, the U.S. Supreme Court reversed the D.C. Circuit’s vacatur, and on October 23, 2014, the D.C. Circuit granted EPA’s motion to lift the stay and shift the CSAPR compliance deadlines by three years. Accordingly, CSAPR Phase I implementation began January 1, 2015 and Phase II began January 1, 2017.
Cross-State Air Pollution Rule Update
On September 7, 2016, EPA finalized an update to the CSAPR ozone season program by issuing the CSAPR Update. This rule addresses the summertime ozone pollution in the eastern U.S. that crosses state lines and will help downwind states and communities meet and maintain the 2008 ozone NAAQS. In May 2017, the CSAPR Update began further reducing ozone season NOₓ emissions from power plants in 22 states in the eastern U.S.
Next Steps to Address Interstate Air Pollution Transport
The CSAPR Update will result in meaningful, near-term reductions in ozone pollution that crosses state lines. However, the CSAPR Update may only partially resolve covered states’ interstate ozone transport obligations for the 2008 ozone NAAQS. Under the Clean Air Act’s “good neighbor” provisions (Section 110(a)(2)(D)(i)(I)), upwind states that contribute significantly to nonattainment or interfere with maintenance of the NAAQS in downwind areas must implement emission reductions through a state implementation plan (SIP), or in the absence of an approved SIP, a federal implementation plan (FIP). The CSAPR Update, however, may not be sufficient to fulfill this requirement. States and EPA will need to determine whether additional actions are needed to fully address regional ozone transport for this NAAQS. In October 2017, EPA issued a memo with supplemental information intended to help states determine whether they have additional interstate transport obligations for the 2008 ozone NAAQS. For states that have not addressed this through their SIPs, EPA has committed to making this determination regarding remaining 2008 obligations by December, 2018.
Additionally, EPA promulgated a new, tighter ozone standard in 2015. Good neighbor SIPs for the 2015 ozone NAAQS are due in October 2018. EPA issued a Notice of Data Availability in December 2016, soliciting comments on preliminary interstate ozone transport modeling for the 2015 ozone NAAQS. In March 2018, EPA released a memo providing updated projected air quality modeling results for ozone, including projected ozone concentrations in 2023 at potential nonattainment and maintenance sites for the 2015 ozone NAAQS and projected upwind state contribution data. This memo also noted that the “good neighbor” provision for the 2015 ozone NAAQS can be addressed in a timely fashion using the 4-step transport framework that has evolved through previous state and federal regulatory actions, including the CSAPR and CSAPR Update.
- Acid Rain Program (ARP)
- Cross-State Air Pollution Rule (CSAPR)
- Cross-State Air Pollution Update Rule (CSAPR Update)
- Clean Air Interstate Rule (CAIR)
- NOₓ Budget Trading Program (NBP) / NOₓ SIP Call
- National Ambient Air Quality Standards (NAAQS)
- Learn more about EPA's Clean Air Market Programs
- Learn more about emissions trading
- Georgia’s Ozone Season NOₓ budget adds 24,041 tons of emissions to the total for states covered by CSAPR Update.