NOx Allowance Trading Program for Fossil Fuel-Fired Power Plants in 22 States
Beginning in the 2023 ozone season, the EPA will include power plants in 22 states in a revised Group 3 Cross-State Air Pollution Rule (CSAPR) ozone season trading program.
Starting in 2024, the final rule sets emissions budgets that will decline annually based on the level of reductions achievable through phased installations of state-of-the-art emissions controls at power plants, reflecting a 50% budget reduction from 2021 ozone season NOx emissions levels in 2027.
The final rule also includes these features to promote consistent operation of emissions controls:
A backstop daily emissions rate in the form of a 3-for-1 allowance surrender for emissions from large coal-fired units that exceed a protective daily NOx emissions rate.1
Annually recalibrating the size of the emissions allowance bank to maintain strong long-term incentives to reduce NOx pollution by 2030.2
Annually limiting surplus allowances at a target of 21% from 2024 – 2029, then 10.5% from 2030 onward.
Annually updating emissions budgets starting in 2030 to account for changes in power generation, including new retirements, new units, and changes in operations.
1 This backstop would take effect in 2024 for units with existing controls and one year after installation for units installing new controls, but no later than 2030.
2 Updating budgets may start as early as 2026 if the updated budget amount is higher than the state emissions budgets established by the final rule for 2026-2029.