Introduction

Acid rain includes any form of precipitation with acidic components, such as sulfuric or nitric acid that fall to the ground in wet or dry forms. This can include rain, snow, fog, hail, or even acidic dust. Acid rain happens when sulfur dioxide (SO₂) and nitrogen oxides (NO_X) are emitted into the atmosphere and transported by wind and air currents. High levels of SO₂ in the air can worsen lung problems in people with asthma and can cause breathing difficulties in children and elderly. In some cases, it can even damage lung tissue and cause premature death. The main sources of SO₂ and NO_X are burning fossil fuels to make electricity, vehicles and heavy equipment, manufacturing, and oil refiners. To help combat this issue, the Acid Rain Program (ARP) was created. This Fact File explains the Acid Rain Program, emissions allowances, bonus allowances, and monitoring requirements.

Background

The Acid Rain Program began in 1995. It was established under Title IV of the 1990 Clean Air Act (CAA) Amendments. The SO₂ program sets a permanent cap on the total amount that may be emitted by electric generating units (EGUs) in the U.S. The ARP was the first national cap and trade program in the country. It introduced a system of allowance trading that uses market-based incentives to decrease pollution.

During Phase I of SO₂ reductions in 1995, 110 mainly coal-burning electric utility plants in 21 different eastern and midwestern states were affected. A further 182 units joined Phase I of the program as replacement or compensating units, bringing the total number of affected units to 445. By Phase II in 2000, the limits were strengthened and there were restrictions placed on smaller cleaner plants fired by coal, oil, and gas. The program affects present utility units with an output capacity of 25 megawatts or more. It also affects new utility units less than 25 megawatts that use fuel with a sulfur content over 0.05 percent.

During Phase I of NO_X reductions from 1996 to 1999, Group 1 boilers or coal-fired dry bottom wall-fired boilers and tangentially fired boilers were targeted. In Phase II, starting in 2000, Group 2 boilers were included (cell burners, cyclones, wet bottoms, and vertically fired boilers).

Emissions allowances

Under ARP, EPA sets a cap on total emissions. EPA allocates allowances based on a rate of SO₂ emissions and a baseline fuel consumption. An allowance permits a utility or industrial source to emit one ton of emissions during a certain compliance period. Allowances are entirely marketable commodities. SO₂ allowances are allocated to affected units serving generators over 25 megawatts. There are annual SO₂ and NO_X allowances and seasonal NO_X allowances. At the end of each year or ozone season, the source must hold an allowance amount at equal to its emissions for that period. For instance, a source that emits 3,000 tons of SO₂ must hold at least 3,000 allowances that are usable in that year.

Sources may choose different ways to reduce emissions. They can sell or save excess allowances if they decrease emissions and have more than needed or buy allowances if they cannot keep emissions under their allocated level. Allowances can be bought straight from a company, individual, or group who holds them, or through a broker. Under ARP, SO₂ can be purchased at the annual EPA Acid Rain Program SO₂ Allowance Auction. Auction allowances are sold to the highest bidder until there are no more allowances left. Successful bidders are notified and listed on EPA’s website. Think of the allowances market like the stock market. They are traded and sold nationwide just like stocks are.

The NO_X, program represents most of the same principles of the SO₂ trading program. It has a results-oriented approach and flexibility in how to achieve emission reductions. But, it differs in that it does NOT cap NO_X emissions like the SO₂ program does. It also does use an allowance trading system

Monitoring and bonus allowances

Affected sources must install systems that nonstop monitor emissions of SO₂, NO_X, and other associated pollutants to track progress and ensure compliance. Most of the time, a continuous emission monitoring (CEM) system must be used. Units report hourly emissions data to EPA on a quarterly basis. Usually, power plant operators are the ones that keep track of this information and report it. This data is recorded in the Emissions Tracking System. The emissions monitoring and reporting systems are very important to the success of the program.

EPA’s ARP has provided bonus allowances to power plants for installing clean coal technology that reduces SO₂ releases, using renewable energy sources such as solar and wind, or encouraging energy conservation by customers so that less power needs to be made. EPA has also awarded allowances to industrial sources that voluntarily enter the Acid Rain Program.

Applicable laws & regulations

40 CFR 72 – Permits Regulations

40 CFR 73 – Sulfur Dioxide Allowance System

40 CFR 74 – Sulfur Dioxide Opt-Ins

40 CFR 75 – Continuous Emission Monitoring

40 CFR 76 – Acid Rain Nitrogen Oxides Emission Reduction Program

40 CFR 77 – Excess Emissions

40 CFR 78 – Appeal Procedures

Related definitions

“Affected unit” means a unit that is subject to any acid rain emissions reduction requirement or acid rain emissions limitation under 40 CFR 74.

“Tangentially fired boiler” means a boiler that has coal and air nozzles mounted in each corner of the furnace where the vertical furnace walls meet. Both pulverized coal and air are directed from the furnace corners along a line tangential to a circle lying in a horizontal plane of the furnace.

“Vertically fired boiler” means a dry bottom boiler with circular burners, or coal and air pipes, oriented downward and mounted on waterwalls that are horizontal or at an angle.

“Wall-fired boiler” means a boiler that has pulverized coal burners arranged on the walls of the furnace. The burners have discrete, individual flames that go perpendicular into the furnace area.

“Wet bottom” means the ash is removed from the furnace in a molten state.

Key to remember

SO₂ and NO_X emissions are just a small piece of the pie when it comes to keeping our atmosphere clean and healthy. Make sure to read up on the Clean Air Act as a whole. Since it is established under Title IV of the 1990 Clean Air Act, there are many other regulations when it comes to atmospheric pollution. Be sure to also investigate any applicable state and local regulations when it comes to SO₂ and NO_X emissions.

Real world example

Prior to the Acid Rain Program, hazy air was rapidly occurring in beautiful sight-seeing areas like the Great Smokies and Shenandoah National Park. Trees were increasingly being damaged from acid rain like the red spruce in high altitudes. The ARP has produced major reductions of SO₂ and NO_X emissions from fossil fuel-fired power plants. Along with that it has shown extensive environmental and human health benefits and far lower-than-expected costs. The ARP has helped deliver annual SO₂ reductions of over 93 percent and annual NO_X emissions reductions of over 87 percent. Wet sulfate deposition is a common indicator of acid rain. Levels of wet sulfate deposition dropped by 68 percent between 1989-1991 and 2017-2019, showing just how important ARP has really been. With further program participation, acid rain prevalence can continue to decrease.