On September 30, 2009, the Environmental Protection Agency proposed the Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule (tailoring rule).  Broadly, this rule proposes to temporarily narrow the definition of major source with regard to greenhouse gases under the Prevention of Significant Deterioration (PSD) and the Title V operating permit regulation program.   Notably, this proposed rule would not begin regulation of greenhouse gases under PSD and Title V; that would occur when greenhouse gases become a regulated pollutant under the Clean Air Act, which will occur with the March 2010 finalization of the light-duty motor vehicle rule.

Put simply, this rule does not begin regulation through the PSD and Title V programs but rather explains how this regulation will initially occur.  Without the tailoring rule, PSD and Title V will automatically include greenhouse gases at the current 100 to 250 tons per year (tpy) threshold (with a significance threshold for modifications of zero).  This rule proposes to raise the applicability threshold to 25,000 tpy, measured on a carbon dioxide-equivalent (CO₂e) basis, and the significance threshold for modified sources to between 10,000 and 25,000 tpy CO₂e.

Under the PSD program, one of the principal requirements is that a new major source or major modification must apply Best Available Control Technologies (BACT), which is determined on a case-by-case basis taking into account, among other factors, the cost and effectiveness of the control.  EPA has developed a BACT review process that includes identification of all available control technologies, elimination of technically infeasible options, ranking of remaining options by control and cost effectiveness, and final selection of BACT.  Under PSD, once a source is determined to be major for any regulated pollutant, a BACT review is performed for each attainment pollutant whose emissions exceed its PSD significance level as part of new construction or modification projects at the source.