Acid Rain Program compliance: SO2 vs. NOx
Did you know that the federal government regulates the power sector’s impact on rain? The Acid Rain Program limits the amount of sulfur dioxide (SO2) and nitrogen oxides (NOx) — the main causes of acid rain — that fossil fuel-fired electric generating units (EGUs) may emit. However, the SO2 and NOx reduction programs operate differently, and the ways that facilities can meet the SO2 and NOx limits are distinct.
It's essential to know the compliance options because facilities that don’t meet the SO2 and NOx standards must pay penalties for their excess emissions. And in November 2025, the Environmental Protection Agency (EPA) set higher penalties for the next two compliance years.
So, what are the differences?
Who’s affected?
The first thing to confirm is whether your facility is subject to the Acid Rain Program (40 CFR 72.6). The program regulates fossil fuel-fired power plants. It applies to:
- EGUs that serve generators with an output capacity of more than 25 megawatts, and
- All new EGUs.
Note that the NOx program applies to a specific subset of coal-fired boilers.
SO2 reduction program
EPA operates the SO2 reduction program through an allowance trading system (Part 73). The agency sets a cap on the total SO2 emissions for the year and then allocates SO2 allowances to regulated units. One allowance represents 1 ton of SO2 emissions.
For each compliance year, a facility must show that it has enough allowances to cover its emissions of SO2. It’s similar to EPA’s hydrofluorocarbon allowance program.
There are multiple compliance options. Facilities may:
- Sell extra allowances if they have more allowances than needed,
- Save extra allowances if they have more allowances than needed (and use them in the future), or
- Buy extra allowances if they can’t keep emissions below their allocated level.
Facilities can purchase allowances from or sell allowances to individuals, companies, groups, or brokers. Additionally, facilities may bid on allowances at EPA’s annual Acid Rain Program SO2 Allowance Auction.
NOx reduction program
EPA sets annual emission limits for the NOx reduction program (Part 76), which applies to these types of boilers:
- Dry bottom wall-fired boilers,
- Tangentially fired boilers,
- Cell burner boilers,
- Cyclone boilers,
- Vertically fired boilers, and
- Wet bottom boilers.
Like the SO2 program, the NOx program offers multiple compliance options. Facilities can:
- Meet the standard annual emission limitations,
- Average the emissions rates of two or more boilers, or
- Apply for an alternative emission limit (AEL) if they can’t meet the standard emission limit.
Additional requirements apply to facilities that use options other than complying with the limits:
- Facilities that want to average emissions rates must submit an averaging plan that’s approved by the permitting authorities (76.11).
- Facilities that apply for an AEL are required to use the NOx emission control technology used as the basis for the emission limit and must demonstrate that the unit can’t comply using the technology (76.10).
It pays (or, at least, costs less) to comply!
Excess emissions penalties can add up quickly. That’s why it’s vital to ensure your facility understands how to comply with the SO2 and NOx reduction programs properly.
The adjustment rates that EPA set for compliance years 2025 and 2026 (2.5265 and 2.6001, respectively) are used to calculate the total penalties a facility must pay if it exceeds SO2 or NOx limits during these compliance years.
Here are the formulas:
- Penalty for excess SO2 emissions = $2,000/ton x annual adjustment factor x tons of excess SO2 emissions
- Penalty for excess NOx emissions = $2,000/ton x annual adjustment factor x tons of excess NOx emissions
Let’s run through a couple of examples of what noncompliance could cost.
| Factors | Penalty Per Ton | Total Penalties |
|---|---|---|
| $2,000 x 2.5265 = $5,053 | $5,053 x 10 = $50,530 |
| $2,000 x 2.6001 = $5,200.20 | $5,200.20 x 5 = $26,001 |
As shown in the example above, excess emissions can cost facilities a lot in penalties. Just 1 ton of excess emissions will result in more than $5,000! Knowing your compliance options for the Acid Rain Program’s SO2 and NOx reduction programs can help your facility avoid steep fines.
Key to remember: The Acid Rain Program limits SO2 and NOx emissions from fossil fuel-fired power plants, but the compliance options for each type of emission differ. Understanding the distinct options can help facilities avoid penalties for excess emissions.















































