Clean Air Mercury Rule (CAMR)

1. Clean Air Mercury Rule(CAMR) Office of Air and Radiation May 2005

2. Benefits of the Clean Air Mercury Rule (CAMR) • The Clean Air Mercury Rule will build on EPA’s Clean Air Interstate Rule (CAIR) to significantly reduce emissions from coal-fired power plants -- the largest remaining sources of mercury emissions in the country. • When fully implemented, these rules will reduce utility emissions of mercury from 48 tons a year to 15 tons, a reduction of nearly 70 percent. • EPA’s modeling shows that CAIR will significantly reduce the majority of the coal-fired power plant mercury emissions that deposit in the United States, and those reductions will occur in areas where mercury deposition is currently the highest. • The Clean Air Mercury Rule is expected to make additional reductions in emissions that are transported regionally and deposited domestically, and it will reduce emissions that contribute to atmospheric mercury worldwide. • Emission reductions occur while economic strength is preserved. U.S. maintains both low electricity prices and fuel diversity. The first-ever federal rule to permanently cap and reduce mercury emissions from coal-fired power plants.

3. Mercury Concerns • Concentrations of mercury in the air are usually low. However, atmospheric mercury falls to Earth through rain, snow and dry deposition and enters lakes, rivers and estuaries. Once there, it can transform into, methylmercury, and can build up in fish tissue. • Americans are exposed to methylmercury primarily by eating contaminated fish. • Because the developing fetus is the most sensitive to the toxic effects of methylmercury, women of childbearing age are regarded as the population of greatest concern. • Children who exposed to methylmercury before birth may be at increased risk of poor performance on neurobehavioral tasks, such as those measuring attention, fine motor function, language skills, visual-spatial abilities and verbal memory. • Methylmercury exposure may also result in cardiovascular and other health effects. • Ecosystems may be affected by mercury deposition.

4. U.S. Emissions of Human-Caused Mercury Have Dropped 45% since 1990 Note: 1999 emission estimate for utility coal boilers is based on 1999 Information Collection Request (ICR); 1990 and 1996 are based on different methodology.

5. Two Ways to Address Hg Emissions from Power Plants • The President’s Clear Skies legislation is the preferred approach to achieving multi-pollutant emission reductions: • Multipollution caps apply to entire country. • Legislation can provide more certainty and less complexity. • Use of existing Clean Air Act authority to address Hg emissions: • Until legislation passes, concerns related to power plant Hg emissions demand we act now. • CAMR will provide significant reductions in Hg emissions from power plants in a highly cost-effective manner.

6. Key Elements of CAMR • The Clean Air Mercury Rule establishes “standards of performance” limiting mercury emissions from new and existing coal-fired power plants and creates a market-based cap-and-trade program that will reduce nationwide utility emissions of mercury in two distinct phases. • The first phase cap is 38 tons and emissions will be reduced by taking advantage of “co-benefit” reductions – that is, mercury reductions achieved by reducing sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions under CAIR – the new Base Case. • In the second phase, due in 2018, coal-fired power plants will be subject to a second cap, which will reduce emissions to 15 tons upon full implementation. • New coal-fired power plants (means construction starting on or after Jan. 30, 2004) will have to meet new source performance standards in addition to being subject to the caps. • CAMR sets an emission reduction requirement for each State and Indian country, by distributing the national emissions cap among the States and Indian country. • Provides an optional cap and trade program based on successful Acid Rain and NOx Budget Trading programs as a method to implement the necessary reductions. • Allows States flexibility on how to achieve the required reductions, including whether to join the trading program.

7. Cap and Trade Mechanism: Allowance Allocation and Markets • Set State budgets • Establish trading program • and market procedures • Administer tracking systems • Define allowance allocation • parameters • State Plan detailing how it will meet its budget for reducing mercury from coal-fired power plants • Voluntary trading program • - Adopt rules/program in 18 months • - Allocate Hg allowances EPA ROLE STATE ROLE • EPA is working to provide a smooth transition to new trading program • Designed with existing cap-and-trade programs in mind • Integration with CAIR program

8. New Source Requirements New Source NSPS Limits: • New coal-fired power units (Subpart Da electric generating units) constructed after Jan. 30, 2004 will have to meet new source performance standards in addition to being subject to the caps. • Since new sources are included in the cap, new sources will also need to hold allowances equal to their emissions. • Compliance with the NSPS is determined on a 12-month rolling average basis, using data from a CEMS or sorbent trap monitoring system • Performance Specification 12-A (certification procedure for the Hg CEMS required under Subpart Da) has also been promulgated as part of the CAMR rule package

9. Hg Monitoring Requirements • Stringent emission monitoring and reporting requirements ensure that monitored data are accurate, that reporting is consistent among sources – and that the emission reductions occur. • All units would have the flexibility to install sorbent traps or CEMS • Some low- emitting units (< 29 lbs/yr) may qualify for a third option • Two-tiered approach requires annual stack testing if Hg emissions are< 9 lb/yr and semi-annual testing if emissions are greater than 9 lb/yr, but < 29 lb/yr • Sources may also petition to use an alternative monitoring system, under Subpart E of Part 75 • The blueprint for the Hg trading program is found in Subpart HHHH of 40 CFR Part 60. • Subpart HHHH includes monitoring provisions (§§60.4170-76) • Subpart I has been added to Part 75 • Establishes monitoring methods for Hg mass emissions • Similar to Subpart H for the NOx SIP Call • Revisions have been made to key sections of Parts 72 and 75 to facilitate implementation of the Subpart I monitoring provisions

10. National HgPower Plant Emissions:Historic and Projected with CAMR Projected with CAMR Note: 1999 emission estimate for utility coal boilers is based on 1999 Information Collection Request (ICR); 1990 and 1996 are based on different methodology. Source: EPA

11. Reductions in Hg Deposition under CAMR Regional Annual Deposition of Mercury Attributable to Electricity Generating Utilities in the 2001 Base Year • By 2020, EPA projects significant reductions in utility attributable Hg deposition. • Reductions in deposition are largely due to the implementation of CAIR controls at utilities, and CAMR is projected to make additional reductions in regional and worldwide deposition. Regional Annual Deposition of Mercury Attributable to Electricity Generating Utilities in 2020 under CAMR (2020 Deposition Scale) Regional Annual Deposition of Mercury Attributable to Electricity Generating Utilities in 2020 under CAMR (2020 Deposition Scale)

12. CAMR Health and Environmental Benefits Due to both technical and resource limits in available modeling, only able to quantify and monetize the benefits for a few of endpoints. • Estimated benefits (from avoided IQ decrements) of reducing exposures from recreational freshwater anglers range from $0.2 million to $2.0 million annually. • benefit estimate does not include consumption from commercial sources or subsistence anglers. • Estimated PM-related benefits are approximately $1.4 million to $40 million annually: • calculation of these benefits uncertain since highly dependent on uncertain future technology choices of the industry • Other non-monetizable benefits – cardiovascular effects, ecosystem effects; and other genotoxic or immunotoxic effects. • In 2020, CAMR will cost about $750 million a year. Implementation beyond 2020 leads to higher annual benefits and costs. • Although the cost-benefit analysis shows a net cost to society, CAMR achieves a significant reduction in Hg emissions by domestic sources. In addition, the cost of Hg exposure falls disproportionately on populations who consume larger amounts of recreationally caught freshwater fish than the general population.

13. Annualized Private Cost of CAMR • The net present value of CAMR incremental to CAIR for the years 2007-2025 is $3.9 billion. Note: From IPM. Cost of CAIR is $2.4 billion in 2010, $3.6 billion in 2015, and $4.4 billion in 2020, with a net present value of $41.1 billion.

14. CAMR 2003 2000 2010 2020 275 Appalachia 299 303 330 135 Interior 131 169 224 526 West 475 589 572 National 905 1,061 1,127 936 Other Projected Impacts Natural Gas Prices Regional Retail Electricity Prices Note: Henry Hub prices Generation Mix Coal Production for Electricity Generation (million tons) Other 2020 Renewables 2015 2010 Hydro Nuclear Gas/Oil Coal Note: Retail prices for 2000 are from AEO2003. Natural Gas prices for 2000 are from Platts GASdat. All other data is from EPA’s Integrated Planning Model.

15. CAIR/CAMR Approach vs Clear Skies Act 2003 • The Administration remains committed to working with Congress to help advance the Clear Skies legislation in order to achieve greater certainty and nationwide emission reductions, but believes the U.S. needs regulations in place now. • The Clear Skies Act of 2003 would provide a federally implemented cap-and-trade program covering all 50 States and would: • establish a SO2cap of 4.5 million tons in 2010 and 3 million tons in 2018 • establish a NOx capof 2.1 million tons in 2008 and1.7 million tons in 2018 • establish a mercurycap of 26 tons in 2010 and 15 tons in 2018 • establish a two trading zones for the NOx reductions • CAIR covers 28 eastern States and DC and CAMR covers 50 States and DC. Together they would: • establish a regional SO2cap of 3.6 million tons in 2010 and 2.5 million tons in 2018 • establish a regional NOx capof 1.5 million tons in 2008 and 1.3 million tons in 2018 • establish a national mercurycap of 38 tons in 2010 and 15 tons in 2018 • establish a regional NOx ozone-season cap for States covered by NOx SIP call • Under CAIR/CAMR, the national caps are distributed to the States and States must achieve the required emission reductions using one of two compliance options: • 1) meet the State’s emission budget by requiring power plants to participate in an EPA-administered interstate cap-and-trade system that caps emissions, or • 2) meet an individual State emissions budget through measures of the State’s choosing. • CAIR allows States to achieve reductions from power plants and other sources and CAMR requires reductions from coal-fired power plants.

16. Summary CAMR significantly cuts emissions of mercury from power plants and: • Builds on EPA’s Clean Air Interstate Rule (CAIR) to allow power industry to address mercury, SO2 and NOx emissions in a coordinated effort. • Along with CAIR, will protect public health and the environment without interfering with the steady flow of affordable energy for American consumers and business. • Along with CAIR, is expected to make reductions in emissions that are transported regionally and deposited domestically, and it will reduce emissions that contribute to atmospheric mercury worldwide.

17. To Learn More… Clean Air Mercury Rule www.epa.gov/mercury