Program Basics Figures
Last updated: 07/2022
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 was established under Title IV of the 1990 Clean Air Act Amendments and is designed to reduce SO₂ and NOₓ emissions, the primary precursors of acid rain.
- The ARP’s market-based SO₂ emissions trading program sets an annual cap on the total amount of SO₂ that may be emitted by power plants throughout the contiguous U.S. 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 power plants.
Cross-State Air Pollution Rule (CSAPR): 2015 – present
- CSAPR addresses regional interstate transport of fine particle (PM₂.₅) and ozone pollution for the 1997 ozone and PM₂.₅ NAAQS and the 2006 PM₂.₅ NAAQS. In 2015, CSAPR required 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 power plants in 25 eastern states, covering 28 states in all.
- CSAPR includes four separate emissions trading 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 Group 1 trading program.
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.
- As of 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 the CSAPR NOₓ Ozone Season Group 2 trading program.
Revised Cross-State Air Pollution Rule Update (Revised CSAPR Update): 2021 – present
- The Revised CSAPR Update was developed to resolve 21 states’ outstanding interstate transport obligations for the 2008 ozone NAAQS and to respond to the September 2019 court remand of the 2016 CSAPR Update.
- Beginning in June 2021, further emission reductions were required at power plants in 12 of the 21 states for which the CSAPR Update was previously found to be only a partial remedy. These reductions are based on optimization of existing, already-installed selective catalytic reduction (SCR) and selective non-catalytic reduction (SNCR) controls beginning in the 2021 ozone season, and installation or upgrade of enhanced NOₓ combustion controls beginning in the 2022 ozone season. EPA will also adjust these 12 states’ ozone season emission budgets through 2024 to incentivize the continued use of these control technologies.
- The Revised CSAPR Update achieves these reductions through the CSAPR NOₓ Ozone Season Group 3 trading program.
CSAPR, CSAPR Update, and Revised CSAPR Update Budgets
- The total CSAPR, CSAPR Update, and Revised CSAPR Update budget for each of the six trading programs equals the sum of the individual state budgets for those states affected by each program. The CSAPR Update replaced the original CSAPR ozone season NOₓ program for most states. Most recently, the Revised CSAPR Update replaced the CSAPR Update ozone season NOₓ program for twelve states. The total budget for each program was set at the following level in 2021:
- SO₂ Group 1 – 1,372,631 tons
- SO₂ Group 2 – 597,579 tons
- NOₓ Annual – 1,069,256 tons
- NOₓ Ozone Season Group 1 – 24,041 tons1
- NOₓ Ozone Season Group 2 – 143,408 tons2
- NOₓ Ozone Season Group 3 – 131,430 tons
Mercury and Air Toxics Standards (MATS)
- EPA announced standards to limit mercury, acid gases, and other toxic pollution from power plants in December 2011 (published in February 2012). EPA provided the maximum 3-year compliance period, so sources were generally required to comply no later than April 16, 2015. Some sources obtained a one-year extension from their state permitting authority, as allowed under the CAA, and so were required to comply with the final rule by April 16, 2016.
- Units subject to MATS must comply with emission rate limits for certain hazardous air pollutants (or surrogates). There are several ways to demonstrate compliance, including the use of continuous monitoring or through periodic measurement of emissions. Some units may choose to demonstrate compliance through periodic performance tests.
- This progress report only provides data from affected sources that submitted hourly emissions data in 2021. Mercury emissions data are not available for 79 low emitting electric generating units.
- Since the start of CSAPR Update in 2017, the CSAPR NOₓ Ozone Season Group 1 program applies only to sources in Georgia.
- Since the start of Revised CSAPR Update in 2021, the CSAPR Update Group 2 program applies only to sources in ten states.
- EIA, Annual Energy Outlook 2022.
Power Sector Trends
The widespread and dramatic emission reductions in the power sector over the last few decades have come about from several factors, including changes in markets for fuels and electricity as well as regulatory programs.1 While most coal-fired electricity generation comes from sources with state-of-the-art emission controls, broad industry shifts from coal-fired generation to gas-fired generation, as well as increases in zero-emitting generation sources, also have reduced power sector emissions. Market factors, modest demand growth, and policy and regulatory efforts have resulted in a notable change in the last decade to the country’s overall generation mix as natural gas and renewable energy generation increased while coal-fired generation decreased.
While the current and near-term expectations for natural gas prices are higher than recent historical levels, the price of natural gas is expected to decline to lower levels in the medium and long term.1 In addition, the existing fleet of coal-fired power plants continues to age. With a continued (but reduced) tax credit and declining capital costs, solar capacity is projected to grow through 2050, while tax credits that phase out for plants entering service through 2023 provide incentives for new wind capacity in the near-term.2 Some power generators have announced that they expect to continue to change their generation mix away from coal-fired generation and toward natural-gas fired generation, renewables, and more deployment of energy efficiency measures.3 All these factors, in total, have resulted in declining power sector emissions in recent years, a trend that is expected to continue.
Acid Rain Program
Title IV of the 1990 Clean Air Act 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 landmark emissions trading system that harnessed the economic incentives of the market to reduce pollution. This market-based emissions trading program was implemented in two phases. Phase I began in 1995 and affected the most polluting units, largely coal-fired, 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 in the contiguous U.S. Under Phase II, Congress 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 emissions 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, which are owned or operated by the same company, can comply using 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 emissions trading program created to reduce NOₓ emissions from power plants and other large stationary 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 seasons from 2003 to 2008, was a central component of the NOₓ State Implementation Plan (SIP) Call, promulgated in 1998, to help states attain 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, the 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 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 emissions trading 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 the 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. As discussed below, CAIR was replaced by CSAPR in 2015.
Cross-State Air Pollution Rule
EPA issued CSAPR in July 2011, requiring 28 states in the eastern half of the U.S. to significantly improve air quality by reducing power plant emissions that travel across state lines and contribute to fine particle and summertime ozone pollution in downwind states. CSAPR required 23 states to reduce annual SO₂ and NOₓ emissions to help downwind areas attain the 2006 and/or 1997 annual PM₂.₅ NAAQS. CSAPR also required 25 states to reduce ozone season NOₓ emissions to help downwind areas attain the 1997 ozone NAAQS. CSAPR divides the states required to reduce SO₂ emissions into two groups (Group 1 and Group 2). Both groups were required to reduce their SO₂ emissions in Phase I. All Group 1 states, as well as some Group 2 states, were required to make additional reductions in SO₂ emissions in Phase II in order to eliminate their significant contribution to air quality problems in downwind areas.
CSAPR was scheduled to replace CAIR starting on January 1, 2012. However, the timing of CSAPR’s implementation was affected by D.C. Circuit actions that stayed and then vacated 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, the CSAPR Phase I implementation began on January 1, 2015, replacing CAIR, and CSAPR 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 addressed summertime ozone pollution in the eastern U.S. that crosses state lines in order to 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. When issuing the CSAPR Update, EPA found that while the rule would result in meaningful, near-term reductions in ozone pollution that crosses state lines, the rule might not be sufficient to fully address all covered states’ good neighbor obligations4 with respect to the 2008 ozone NAAQS. In December 2018, based on additional analysis conducted after issuance of the rule, EPA published a determination that the emission reductions required by the CSAPR Update in fact would fully address all covered states’ good neighbor obligations with respect to this NAAQS.
In September 2019, the D.C. Circuit upheld the CSAPR Update in most respects but remanded the rule to EPA to address the court’s holding that the rule unlawfully allowed upwind states’ significant contribution to downwind air quality problems to continue beyond downwind states’ deadlines for attaining the NAAQS. Relatedly, in October 2019, the court vacated EPA’s December 2018 determination that the CSAPR Update fully addressed covered states’ good neighbor obligations with respect to the 2008 ozone NAAQS.
Revised Cross-State Air Pollution Rule Update
On March 15, 2021, EPA finalized the Revised CSAPR Update to resolve 21 states’ outstanding interstate transport obligations for the 2008 ozone NAAQS. Based on EPA’s analysis, the Agency determined that additional emission reductions relative to the CSAPR Update were necessary for 12 of the 21 states. These reductions were based on optimization of existing, already-installed controls beginning in the 2021 ozone season, and installation or upgrade of state-of-the-art NOₓ combustion controls beginning in the 2022 ozone season. This rulemaking also adjusts these 12 states’ ozone season emission budgets through 2024 to incentivize the continued use of these control technologies. The rule became effective on June 29, 2021.
Mercury and Air Toxics Standards
On December 16, 2011, the EPA announced final standards to reduce emissions of toxic air pollutants from new and existing coal- and oil-fired power plants in all 50 states and U.S. territories. MATS established technology-based emission rate standards that reflect the level of hazardous air pollutant (HAP) emissions that had been achieved by the best-performing sources. These HAPs include mercury (Hg), non-mercury metals (such as arsenic (As), chromium (Cr), and nickel (Ni)), and acid gases, including hydrochloric acid (HCl) and hydrofluoric acid (HF). EPA provided the maximum 3-year compliance period, so sources were generally required to comply no later than April 16, 2015. Some sources obtained a one-year extension from their state permitting authority, allowed under the CAA so were required to comply with the final rule by April 16, 2016.
- EIA, Annual Energy Outlook 2022.
- EIA, Annual Energy Outlook 2021.
- EIA, “Corporate Goal Case Using Annual Energy Outlook 2021”.
- “Good neighbor” obligations refer to provisions in the Clean Air Act that require upwind states to reduce the emissions that affect downwind states’ ability to attain or maintain NAAQS.
- Acid Rain Program (ARP)
- Interstate Air Pollution Transport
- Cross-State Air Pollution Rule (CSAPR)
- Cross-State Air Pollution Rule Update (CSAPR Update)
- Revised CSAPR Update
- Clean Air Interstate Rule (CAIR)
- NOₓ Budget Trading Program (NBP) / NOₓ SIP Call
- National Ambient Air Quality Standards (NAAQS)
- EPA’s Clean Air Market Programs
- Emissions Trading
- Mercury and Air Toxics Standards (MATS)
- EIA Annual Energy Outlook
- Corporate Goal Case Using Annual Energy Outlook 2021