National first as EPA orders coal-fired industry to cut mercury over 15 years. The ruling follows similar new controls on SOx and NOx for generators in eastern states

A clean air mercury rule will significantly reduce mercury emissions from coal-fired power plants nationwide. The mercury ruling will reduce generator mercury emissions by close to 70% from 1999 levels.

The ruling creates a market-based cap and trade system that will reduce mercury emissions from both new and existing coal-fired plants in two phases. The first phase cap is 38 tonnes beginning in 2010, with a final cap set at 15 tonnes beginning in 2018. These mandatory levels are coupled with significant penalties for non-compliance by US generators, which are responsible for about a third of American mercury emissions. Nationally, 48 tonnes of mercury are emitted each year currently.

However, environmental groups and some states have roundly criticised the measures, complaining over the use of incentives rather than enforcement threats to promote pollution control. Analysis projects that the programme will result in reducing mercury emissions by 35% to 31.3 tonnes in 2010 and, by 2020, emissions are expected to fall by about half, to 24.3 tonnes.

The mercury ruling follows the new Clean Air Interstate Rule (CAIR), a separate cap and trade programme that aims to control SOx and NOx emissions in 28 eastern states that move across state boundaries.

CAIR will cap emissions of sulphur dioxide (SO2) and nitrogen oxides (NOx) in the eastern United States and when fully implemented will reduce SO2 emissions in 28 states and the District of Columbia by more than 70% and NOx emissions by more than 60% from 2003 levels.

The EPA syas CAIR will mandate the largest reduction in air pollution since the reductions set out by the Acid Rain Programme under the Clean Air Act Amendments of 1990. Under CAIR, states will either require power plants to participate in an EPA-administered two-stage inter-state cap and trade system, or to meet individual state emission limits.

“CAIR will result in the largest pollution reductions and health benefits of any air rule in more than a decade, helping states downwind by controlling airborne emissions at their source,” said Acting EPA Administrator Steve Johnson.

The measures curbing emissions are expected to create a $50 billion market for antipollution equipment over the next two decades, according to the Agency. But, while one sector will benefit from the rulings, merchant generators with coal-fired generating units in regions subject to CAIR could be particularly challenged by increased environmental compliance costs, Fitch Ratings said.

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