EPA proposes ACE rule as replacement for Clean Power Plan

By Erin Voegele | August 21, 2018

On Aug. 21, the U.S. EPA released a proposed rule to create the Affordable Clean Energy program, which aims to establish emissions guidelines for states to develop plans to address greenhouse gas (GHG) emissions from existing coal-fired power plants. The ACE rule would replace the Clean Power Plan, which the EPA proposed to repeal last year. 

The CPP was first proposed by the EPA in June 2014 under the Obama administration. Final rules for the program were released in August 2015. In March 2017, an executive order signed by President Trump ordered a review of the program. A few months later, in October 2017, the EPA issued a proposed rulemaking to repeal the CPP.

A fact sheet released by the EPA indicates one major difference between the CPP and the ACE rule is that the CPP promoted disinvestment in coal in favor of renewables and natural gas, and relied on fuel switching. Alternatively, the ACE rule promotes investments to make coal plans cleaner and more efficient and does not promote fuel switching.

According to the EPA, the ACE rule defines the best system of emission reduction (BSER) for existing power plants as on-site, heat-rate efficiency improvements. It also provides states with a list of candidate technologies that can be used to establish standards of performance and be incorporated into their state plans. In addition, ACE updates the new source review (NSR) permitting program to further encourage efficiency improvements at existing power plants and gives states time and flexibility to develop their state plans.

The proposed rule does make a few mentions of biomass. In one section of the rulemaking, the EPA states that the proposal does not include cofiring of alternative fuels, such as biomass or natural gas, as BSER. However, the rulemaking does state that the EPA is proposing cofiring be allowed as compliance options that states may consider. The agency also said it is soliciting comments on whether cofiring methods should be included among the list of BSER candidate technologies for states to evaluate when establishing a standard of performance for each affected source in their jurisdiction.

The proposed rule goes on to state that while some existing coal plants currently cofire biomass fuel, the agency believes that on a broad scale “biomass cofiring is more expensive and/or less achievable than the measures determined to be part of SBER. As such, EPA is not proposing that the use of biomass fuels is part of the BSER because too few individual sources will be able to employ that measure in a cost-reasonable manner.”

In the ACE rule, the EPA “specifically recognizes that some entities may be interested in using biomass as a compliance option for meeting the state determined emission standard.” As with other non-BSER measures, the agency said it expects that the use of biomass may be economically attractive for certain individual sources, even though on a broader scale it may be more expensive or less achievable than measures determined to be part of the BSER.

The rule briefly addresses an April 23 policy announcement by the EPA in which the agency said biomass from managed forests will be treated as carbon neutral when used for energy production at stationary sources. The ACE rule specifies that “states that intend to propose the use of forest-derived biomass for compliance by affected units may refer to EPA’s 2018 statement on its intended treatment of biogenic CO2 emissions from stationary sources that use forest biomass for energy production. As discussed in the recent statement, EPA’s policy is to treat biogenic CO2 emissions resulting from the combustion of biomass from managed forests at stationary sources for energy production as carbon neural. EPA will continue to evaluate the applicability of this policy of treating forest-biomass derived biogenic CO2 as carbon neutral based on relevant information, including data from interagency partners on updated trends in forest carbon stocks.”

The EPA is soliciting comments on the inclusion of forest-derived biomass a compliance option for affected units to meet state plan standards under the ACE rule. The agency also said it is soliciting comments on the inclusion of non-forest biomass for energy production as a compliance option, and what value to attribute the biogenic CO2 emissions associated with non-forest biomass feedstocks.

The Biomass Power Association issued a statement following release of the ACE rule, stressing the benefits of bioenergy. "The members of the biomass industry look forward to contributing to any carbon reducing plans put forth by the EPA, including the Affordable Clean Energy rule unveiled today," said Carrie Annand, vice president of external affairs at BPA. "Biomass power facilities generate renewable baseload power from mostly unusable organic materials like forestry residue and agricultural byproducts. Our members offer rural jobs and support the economic development of other industries like logging and farming. As our economy and transportation sector become increasingly electrified, biomass power will play a growing role in providing essential renewable baseload power. We look forward to working with EPA on its Affordable Clean Energy rule, and we urge the EPA to allow biomass power to participate in the Renewable Fuel Standard as soon as possible."

A full copy of the proposed ACE rule can be downloaded from the EPA website. A 60-day public comment period is set to open following publication of the rule in the Federal Register. The EPA also plans to hold a public hearing on the proposal.