Acid Rain Excess Emissions Penalty Adjusted for 2018

Posted on October 30,2017 by Roger Marks

Acid-Rain-Blog.jpgAs required under Title IV of the Clean Air Act, every year, US EPA adjusts the penalty for excess emissions of sulfur dioxide and nitrogen oxides—the primary sources of acid rain. 

Using a cap-and-trade program, facilities must purchase emissions allowances to exceed EPA’s thresholds for SO2 and NOx emissions, as applicable. The SO2 limits apply primarily to electric utility facilities (power plants), while the NOx limits apply to coal-fired power plants. Facilities that exceed the emissions limits and do not own the emissions allowances to cover the excess must pay a per-ton fine. [40 CFR 77.6]   

Each year, EPA calculates the fines for excess SO2 and NOx emissions under the Acid Rain program using a formula found at 40 CFR 77.6(b):
Penalty for excess emissions of sulfur dioxide =
$2,000/ton × annual adjustment factor × tons of excess emissions of sulfur dioxide.
Penalty for excess emissions of nitrogen oxides =
$2,000/ton × annual adjustment factor × tons of excess emissions of nitrogen oxides.
For 2018, this works out to a penalty amount of $3,941 per ton of excess SO2 or NOx emissions. The “annual adjustment factor” correlates to the change in the Consumer Price Index since 1990 (the same year the Clean Air Act was amended to add the acid rain program).

To learn about EPA’s acid rain cap-and-trade program, and who can opt-in to the acid rain cap-and-trade program, read: How EPA’s Acid Rain Cap-and-Trade Program Works.

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