SUPPLEMENTARY INFORMATION:

I. Background and Purpose

Under Clean Air Act (CAA or Act) section 110(a)(2)(D)(i)(I), also called the good neighbor provision, states are required to address the interstate transport of air pollution. Specifically, the good neighbor provision requires that each state's implementation plan contain adequate provisions to prohibit air pollutant emissions from within the state that will significantly contribute to nonattainment of the national ambient air quality standards (NAAQS), or that will interfere with maintenance of the NAAQS, in any other state.

In October 1998 (63 FR 57356), EPA finalized the “Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone” (NO_X SIP Call). The NO_X SIP Call required eastern states, including Alabama, to submit SIPs that prohibit excessive emissions of ozone season NO_X by implementing statewide emissions budgets.^[1] The NO_X SIP Call addressed the good neighbor provision for the 1979 ozone NAAQS and was designed to mitigate the impact of transported NO_X emissions, one of the precursors of ozone.^[2] EPA developed the NO_X Budget Trading Program, an allowance trading program that states could adopt to meet their obligations under the NO_X SIP Call. This trading program allowed the following sources to participate in a regional cap and trade program: Generally EGUs with capacity greater than 25 megawatts (MW); and large industrial non-EGUs, such as boilers and combustion turbines, with a rated heat input greater than 250 million British thermal units per hour (MMBtu/hr). The NO_X SIP Call also identified potential reductions from cement kilns and stationary internal combustion engines.

To comply with the NO_X SIP Call requirements, in 2001, the Alabama Department of Environmental Management (ADEM) submitted a revision to add new rule sections to the SIP-approved version of Alabama Administrative Code Chapter 335-3-1, General Provisions, and Chapter 335-3-8, Control of Nitrogen Oxides Emissions. EPA approved the revision as compliant with Phase I of the NO_X SIP Call in 2001. See66 FR 36919 (July 16, 2001). The approved revision required EGUs and large non-EGUs in the State to participate in the NO_X Budget Trading Program beginning in 2004. In 2005, Alabama submitted, and EPA approved, a SIP revision to address additional emissions reductions required for the NO_X SIP Call under Phase II. See70 FR 76694 (December. 28, 2005).

In 2005, EPA published CAIR, which required several eastern states, including Alabama, to submit SIPs that prohibited emissions consistent with revised ozone season (and annual) NO_X budgets. See70 FR 25162 (May 12, 2005); see also71 FR 25328 (April 28, 2006). CAIR addressed the good neighbor provision for the 1997 ozone NAAQS and 1997 fine particulate matter (PM_2.5) NAAQS and was designed to mitigate the impact of transported NO_X emissions with respect to ozone and PM_2.5. CAIR established several trading programs that EPA implemented through federal implementation plans (FIPs) for EGUs greater than 25 MW in each affected state, but not large non-EGUs; states could submit SIPs to replace the FIPs that achieved the required emission reductions from EGUs and/or other types of sources.^[3] When the CAIR trading program for ozone season NO_X was implemented beginning in 2009, EPA discontinued administration of the NO_X Budget Trading Program; however, the requirements of the NO_X SIP Call continued to apply.

On October 1, 2007 (72 FR 55659), EPA approved changes to Alabama's SIP that incorporated requirements for CAIR. Consistent with CAIR's requirements, EPA approved a SIP revision in which Alabama regulations: (1) Sunset its NO_X Budget Trading Program requirements, and (2) incorporated CAIR annual and ozone season NO_X state trading programs. See72 FR 55659. Participation of EGUs in the CAIR ozone season NO_X trading program addressed the State's obligation under the NO_X SIP Call for those units, and Alabama also chose to require non-EGUs subject to the NO_X SIP Call to participate in the same CAIR trading program. In this manner, Alabama's CAIR rules incorporated into the SIP addressed the State's obligations under the NO_X SIP Call with respect to both EGUs and non-EGUs.

The United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) initially vacated CAIR in 2008, but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR. See North Carolina v. EPA, 531 F.3d 896, modified on rehearing, 550 F.3d 1176 (D.C. Cir. 2008). The ruling allowed CAIR to remain in effect temporarily until a replacement rule consistent with the court's opinion was developed. While EPA worked on developing a replacement rule, the CAIR program continued to be implemented with the NO_X annual and ozone season trading programs beginning in 2009 and the SO₂ annual trading program beginning in 2010.

Following the D.C. Circuit's remand of CAIR, EPA promulgated the Cross-State Air Pollution Rule (CSAPR) to replace CAIR and address good neighbor obligations for the 1997 ozone NAAQS, the 1997 PM_2.5 NAAQS, and the 2006 PM_2.5 NAAQS. See76 FR 48208 (August 8, 2011). Through FIPs, CSAPR required EGUs in eastern states, including Alabama, to meet annual and ozone season NO_X emission budgets and annual SO₂ emission budgets implemented through new trading programs. Implementation of CSAPR began on January 1, 2015.^[4] CSAPR also contained provisions that would sunset CAIR-related obligations on a schedule coordinated with the implementation of the CSAPR compliance requirements. Participation by a state's EGUs in the CSAPR trading program for ozone season NO_X generally addressed the state's obligation under the NOx SIP Call for EGUs. CSAPR did not initially contain provisions allowing states to incorporate large non-EGUs into that trading program to meet the requirements of the NO_X SIP Call for non-EGUs. EPA also stopped ( printed page 35612) administering CAIR trading programs with respect to emissions occurring after December 31, 2014.^[5]

To comply with CSAPR, Alabama adopted SO₂ and NO_X CSAPR trading program rules, including budgets, in ADEM Administrative Code Chapters 335-3-5 and 335-3-8. On August 31, 2016, EPA approved Alabama's CSAPR annual SO₂ and annual NO_X trading program rules into the SIP.^[6] See81 FR 59869. Because EPA stopped administering the CAIR trading programs after 2014, the approved CAIR rules in the State's SIP have not been implemented for several years. Furthermore, ADEM repealed all CAIR and CAIR-related regulations from Alabama Administrative Code Chapters 335-3-1, 335-3-5, and 335-3-8 on December 9, 2011.^[7] Even though the CAIR programs were not being implemented in Alabama, ozone season NOx emissions have remained well below the NO_X SIP Call budget levels.

After litigation that reached the Supreme Court, the D.C. Circuit generally upheld CSAPR but remanded several state budgets to EPA for reconsideration. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 129-30 (D.C. Cir. 2015). EPA addressed the remanded ozone season NO_X budgets in the Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS (CSAPR Update), which also partially addressed eastern states' good neighbor obligations for the 2008 ozone NAAQS. See81 FR 74504 (October 26, 2016). The air quality modeling for the CSAPR Update demonstrated that Alabama contributes significantly to nonattainment and/or interferes with maintenance of the 2008 ozone NAAQS in other states. The CSAPR Update reestablished an option for most states to meet their ongoing obligations for non-EGUs under the NO_X SIP Call by including the units in the CSAPR Update trading program.

The CSAPR Update trading program replaced the original CSAPR trading program for ozone season NO_X for most covered states. On October 6, 2017, EPA approved Alabama's CSAPR Update ozone season NO_X trading program rules for EGUs into the State's SIP.^[8] See82 FR 46674. Alabama's EGUs participate in the CSAPR Update trading program, generally also addressing the state's obligations under the NO_X SIP Call for EGUs. However, Alabama elected not to include its large non-EGUs in the CSAPR Update ozone season trading program. Because Alabama's large non-EGUs no longer participate in any CSAPR or CSAPR Update trading program for ozone season NOx emissions, the NO_X SIP Call regulations at 40 CFR 51.121(r)(2) as well as anti-backsliding provisions at 40 CFR 51.905(f) and 40 CFR 51.1105(e) require these non-EGUs to maintain compliance with NO_X SIP Call requirements in some other way.

Under 40 CFR 51.121(f)(2) of the NOx SIP Call regulations, where a State's SIP contains control measures for EGUs and large non-EGU boilers and combustion turbines, the SIP must contain enforceable limits on the ozone season NOx mass emissions from these sources. In addition, under 40 CFR 51.121(i)(4) of the NOx SIP Call regulations as originally promulgated, the SIP also had to require these sources to monitor emissions according to the provisions of 40 CFR part 75, which generally entails the use of continuous emission monitoring systems (CEMS). Alabama triggered these requirements by including control measures in its SIP for these types of sources, and the requirements have remained in effect despite the discontinuation of the NO_X Budget Trading Program after the 2008 ozone season. On March 8, 2019, EPA revised some of the regulations that were originally promulgated in 1998 to implement the NO_X SIP Call.^[9] The revision gave states covered by the NO_X SIP Call greater flexibility concerning the form of the NOx emissions monitoring requirements that the states must include in their SIPs for certain emissions sources. The revision amended 40 CFR 51.121(i)(4) to make Part 75 monitoring, recordkeeping, and reporting optional, such that SIPs may establish alternative monitoring requirements for SIP Call budget units that meet the general requirements of 40 CFR 51.121(f)(1) and (i)(1). Under the updated provision, a state's implementation plan still needs to include some form of emissions monitoring requirements for these types of sources, consistent with the NO_X SIP Call's general enforceability and monitoring requirements at §§ 51.121(f)(1) and (i)(1), respectively, but states are no longer be required to satisfy these general NO_X SIP Call requirements specifically through the adoption of 40 CFR part 75 monitoring requirements.

After evaluating the various options available following EPA's March 8, 2019, revision to the NO_X SIP Call requirements, ADEM revised its regulations to address NO_X SIP Call requirements and adopt alternative monitoring options for certain large non-EGUs. The changes require large non-EGUs in the State to address the NO_X SIP Call's requirements for enforceable limits on ozone season NO_X mass emissions in a manner that does not rely on the administration of an interstate trading program. In addition, Alabama had previously revised its regulations to remove NO_X Budget Trading Program and CAIR trading program provisions after EPA stopped administering those programs. Alabama also revised its regulations non-substantively to renumber the regulation titled, “New Combustion Sources” from Rule 335-3-8-.14 to Rule 335-3-8-.05. The February 27, 2020, SIP revision submitted by ADEM requests approval into the SIP of all of these rule changes.

For a comprehensive discussion of EPA's analysis and rationale for approval of the State's submittal, please refer to EPA's March 3, 2021, notice of proposed rulemaking. See86 FR 12305 (March 3, 2021). EPA received no comments on the proposed approval of Alabama's SIP.

II. Incorporation by Reference

In this document, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of Alabama Administrative Code Rule 335-3-8-.71, “NO_X Budget Program,” which reestablishes enforceable limits on ozone season NO_X mass emission for certain units as required by EPA's NO_X SIP Call regulations, and conditionally approving Rule 335-3-8-.72, “NO_X Budget Program Monitoring and Reporting,” which establishes alternative emission monitoring requirements for the units, both state effective on April 13, 2020. Further, EPA is approving the renumbering of Rule 335-3-8-.14, “New Combustion Sources” to 335-3-8-.05, “New Combustion Sources,” state effective January 16, 2012. Also in this document, EPA is finalizing the removal of provisions from the Alabama State ( printed page 35613) Implementation Plan regarding the State's NO_X Budget Trading Program and CAIR trading program regulations at Rules 335-3-1-.14, 335-3-1-.16,^[10] 335-3-5-.06 through 335-3-5-.08, 335-3-5-.11 through 335-3-5-.14, 335-3-8-.05 through 335-3-8-.13, 335-3-8-.16 through 335-3-8-.18, 335-3-8-.20, 335-3-8-.21, 335-3-8-.23 through 335-3-8-.27, 335-3-8-.29, 335-3-8-.30, 335-3-8-.32, and 335-3-8-.33, which were incorporated by reference in accordance with the requirements of 1 CFR part 51. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 4 Office (please contact the person identified in the For Further Information Contact section of this preamble for more information). Therefore, the revised materials as stated above, have been approved by EPA for inclusion in the State implementation plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference by the Director of the Federal Register in the next update to the SIP compilation.^[11]

III. Final Action

EPA is taking final action to approve revisions to Alabama's SIP, which the State submitted to EPA on February 27, 2020, regarding the NO_X Budget Program. EPA has determined that these portions of Alabama's SIP meet the applicable requirements of sections 110 and 172 of the CAA and applicable regulatory requirements at 40 CFR part 51. In addition, EPA is conditionally approving certain revisions, as described above, regarding the NO_X Budget Program's monitoring and reporting requirements, per Alabama's commitment through a letter dated September 15, 2020.

IV. Statutory and Executive Order Reviews

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. This action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified inExecutive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject toExecutive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject toExecutive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, underExecutive Order 12898 (59 FR 7629, February 16, 1994).

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 7, 2021. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

For the reasons stated in the preamble, the EPA amends 40 CFR part 52 as follows:

1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401 et seq.

2. Section 52.49 is added to read as follows:

3. Section 52.50 is amended in the table in paragraph (c) by:

a. Removing the entries for Sections—

i. 335-3-1-.14, titled “Emissions Reporting Requirements Relating to Budgets for NO _X Emissions”;

ii. 335-3-5-.06, titled “State Clean Air Interstate Rule (CAIR) SO₂ Trading Program General Provisions”;

iii. 335-3-5-.07, titled “CAIR Designated Representative for CAIR SO₂ Sources”;

iv. 335-3-5-.08, titled “Permits”;

v. 335-3-5-.11, titled “CAIR SO ₂ Allowance Tracking System”;

vi. 335-3-5-.12, titled “CAIR SO₂ Allowance Transfers”;

vii. 335-3-5-.13, titled “Monitoring and Reporting”;

viii. 335-3-5-.14, titled “CAIR SO₂ Opt-In Units”;

ix. 335-3-8-.05, titled “NO_X Budget Trading Program”;

x. 335-3-8-.06, titled “Authorized Account Representative for NO _X Budget Sources”;

xi. 335-3-8-.07, titled “Permits”;

xii. 335-3-8-.08, titled “Compliance Certification”;

xiii. 335-3-8-.09, titled “NO_X Allowance Allocations”;

xiv. 335-3-8-.10, titled “NO_X Allowance Tracking System”;

xv. 335-3-8-.11, titled “NO_X Allowance Transfers”;

xvi. 335-3-8-.12, titled “Monitoring and Reporting”;

xvii. 335-3-8-.13, titled “Individual Unit Opt-ins”;

xviii. 335-3-8-.14, titled “New Combustion Sources”;

xix. 335-3-8-.16, titled “CAIR NO_X Annual Budget Trading Program”;

xx. 335-3-8-.17, titled “CAIR Designated Representative for CAIR NO_X Sources”;

xxi. 335-3-8-.18, titled “CAIR Permits”;

xxii. 335-3-8-.20, titled “CAIR NO_X Allowance Allocations”;

xxiii. 335-3-8-.21, titled “CAIR NO_X Allowance Tracking System”;

xxiv. 335-3-8-.23, titled “CAIR Monitoring and Reporting”;

xxv. 335-3-8-.24, titled “CAIR NO_X Opt-in Units”;

xxvi. 335-3-8-.25, titled “CAIR NO_X Ozone Season Trading Program”;

xxvii. 335-3-8-.26, titled “CAIR Designated Representative for CAIR NO_X Ozone Season Sources”;

xxviii. 335-3-8-.27, titled “CAIR NO_X Ozone Season Permits”;

xxix. 335-3-8-.29, titled “CAIR NO_X Ozone Season Allowance Allocations”;

xxx. 335-3-8-.30, titled “CAIR NO_X Ozone Season Allowance Tracking System”;

xxxi. 335-3-8-.32, titled “CAIR NO_X Ozone Season Monitoring and Reporting”; and

xxxii. 335-3-8-.33, titled “CAIR NO_X Ozone Season Opt-in Units”;

b. Adding entries for Sections—

i. 335-3-8-.05, titled “New Combustion Sources”;

ii. 335-3-8-.71, titled “NOx Budget Program”; and

iii. 335-3-8-.72, titled “NO_X Budget Program Monitoring and Reporting”;

c. Revising the entries for Sections—

i. 335-3-5-.06 through 335-3-5.08;

ii. 335-3-5-.11 through 335-3-5.14;

iii. 335-3-8-.07 through 335-3-8.14;

iv. 335-3-8-.16 through 335-3-8.18;

v. 335-3-8-.20 and 335-3-8-.21;

vi. 335-3-8-.23 through 335-3-8.27;

vii. 335-3-8-.29 and 335-3-8-.30; and

d. Removing “Both sections of 335-3-8-.33 are included in the approved SIP.” in the “Explanation” column in the entry for Section 335-3-8-.33.

The revisions and additions read as follows:

86 FR 35610