Air Permits

Hydrogen Hub facilities that emit certain types and amounts of air pollution will need air permits under the federal Clean Air Act before construction and operation. Although the Clean Air Act is a federal law, it is often implemented by individual states.

The air permitting process can provide multiple advocacy opportunities.

• Communities can often participate in the process before permits are issued. This will depend in part on whether the Hydrogen Hub facility is permitted as a “major” or “minor” source of air pollution (more on this below).
• In addition, communities may be able to challenge permits after they are issued.
• The permitting process can at times prevent a harmful project from moving forward or require a facility to minimize its impacts. For example, the process could force a facility to adopt better technologies for controlling pollution and reducing harmful impacts to air quality and public health.
• The process can also require a facility to better model, monitor, and report potential and actual impacts.
• Finally, the process can be a vehicle for bringing public and media attention to community concerns, including through public hearings on permits.

The air permitting process has limits.

• The agency issuing air permits cannot deny a permit based on community opposition alone and must issue a permit once the project developer shows its facility will comply with all state and federal requirements (which depend on the type of air permit that is required). An applicant can usually meet that standard and get an air permit, even if it takes multiple tries.
• Likewise, in a lawsuit challenging an air permit, the judge cannot decide that an applicant should never get a permit; the best outcome is typically for a judge to decide that the permit is too weak and must be strengthened (for example, by requiring stronger pollution controls or better monitoring).
• Air permitting can also work in tandem with state environmental review processes, which in some instances impose additional requirements on the developer.

Types of air permits:

• Generally, a facility requires two types of permits:
  1. A permit to construct a new facility or modify an existing one (sometimes called a New Source Review or NSR permit). This type of permit is required before a developer begins constructing or modifying its facility.
  2. A permit to operate the facility (often called a Title V permit, which refers to Title V of the Clean Air Act). In general, this type of permit is not required until after a facility has started operating (though it is not unusual to obtain both types of permits at the same time, before beginning construction).
• The type of air permits a facility needs depends on several factors, like:
  • Whether the facility already exists and will be modified for a hydrogen project, or whether it will be newly built.
  • How much pollution the facility has the potential to emit — in other words, whether the facility will be a “major” or a “minor” source of air pollution. In general, “major” sources are subject to much stronger requirements and must provide greater opportunities for public participation than “minor” sources.
  • Whether the facility will be sited in an area that is in compliance with National Ambient Air Quality Standards (NAAQS). Areas that are not in compliance with the NAAQS are called “non-attainment” areas, and facilities in those areas are subject to stricter permit requirements.
• Together, these permits specify:
  • pollution limits and the technologies the facility must use to control pollution;
  • methods the facility must use to monitor and report on its pollution; and
  • the frequency of that monitoring and reporting, among other things.
  • Sometimes these two permits are combined in one document.

Air permitting authority: Most often, air permits will be issued by state environmental agencies. In some states, air permitting is the shared responsibility of state agencies and U.S. EPA:

Air permitting process & public participation:

• The permitting process starts when a facility submits an air permit application.
  • Typically, the permitting authority will then publish a draft permit and provide a period for public comment on it.
  • This period must include a public hearing whenever there is a “significant degree of public interest” in the draft permit; otherwise, it is up to the permitting authority to decide whether to hold a public hearing.
  • Following the comment period, the agency will decide whether to issue the permit.
• Most permit applications are approved.
  • Even if the agency denies an application, the project developer will be able to submit a revised application that addresses the reasons that the first application was denied.
  • Still, public comments can help secure stronger pollution limits and pollution controls that better protect communities from air pollution.
  • Public comments can also help build a record of problems with the permit that can be appealed to a court.

Appealing air permits:

• If the agency issues a permit, that permit can be appealed.
  • Appeals typically go to a state agency.
  • To appeal, you have to show that the permit causes you a legal injury — for example, the permit authorizes pollution that exacerbates your asthma or prevents you from visiting one of your favorite parks.
  • In most states, organizations can appeal permits on behalf of their injured members.
• Appealing an air permit is often a resource-intensive process that requires legal representation and experts.
  • It can take many years to resolve and can be difficult to win.
  • Even if you win, the project can reapply for a permit. For that reason, it is often important to pair air permit advocacy with other strategies.

Petitions to U.S. EPA:

• The public can also petition U.S. EPA to “object” to a Title V operating permit.
  • A petition to EPA to object to a Title V operating permit must be filed within 60 days after EPA concludes its own review of the permit.
  • If EPA grants your petition and objects to the permit, the state agency that issued the permit must fix the problems with the permit.
• Unfortunately, U.S. EPA considers a narrow scope of issues when deciding whether to object.
  • Except in limited circumstances, a Title V petition can only raise issues that were also raised with the state agency during the public comment period.
  • In addition, U.S. EPA has recently declined to consider construction requirements, which include issues like how much pollution a facility can emit and what technologies a facility must use to control its pollution.
  • Therefore, a Title V petition is most likely to succeed if it raises issues about operating requirements, like problems with how a facility monitors and reports its pollution, or if it identifies requirements in a facility’s construction / modification permit that are misstated or omitted from the Title V permit — so long as those issues were also raised during the public comment period.
• Title V petitions are a useful tool because they can push federal regulators to fix permitting errors made by state agencies and can help alert federal policymakers to a community’s concerns about or opposition to a proposed project. However, like air permit appeals, these proceedings can take many years to resolve.

NEPA Reviews

NEPA’s purpose:

• NEPA requires federal agencies to evaluate and report on the possible environmental impacts of major federal actions before those actions are taken.
  • Some Hydrogen Hub actions will need to do this evaluation. For example, DOE will need to do a NEPA review before it awards funds to the Hubs, and other federal agencies may need to comply with NEPA before issuing permits to Hub projects.
• NEPA review is an important tool to:
  • ensure agencies evaluate the environmental consequences of their decisions;
  • are transparent about those consequences; and
  • consider alternatives that could minimize negative consequences.
• It is also:
  • an important source of information about a project, its possible impacts, and the permit approvals it will need; and
  • provides organizing opportunities, including at public hearings.
• NEPA is supposed to encourage informed agency decision-making, but it does not require agencies to make the best decision for the environment or communities.

NEPA process:

• For actions subject to NEPA, the agency must determine whether the environmental effects of that action are likely to be “significant.”
  • This can be determined through an Environmental Assessment (EA) or an agency can decide that significant impacts are likely without preparing an EA.
  • If the agency determines that a project could have significant environmental impacts, it then prepares an Environmental Impact Statement (EIS), which is a much more extensive evaluation of impacts.
• While DOE has said that the Hydrogen Hub Program is subject to NEPA review, it is not yet clear when and how this review will be carried out (for example, at the program-wide level, at the individual Hub level, or for each project in a Hub that could receive federal funding or permits). This area of the Guide will be updated as more information becomes available.

Public participation: NEPA provides opportunities for communities to influence agency decision-making. The public will have the opportunity to review and comment on an EIS and may have the opportunity to do so with an EA.

State NEPAs: Several states, including some involved in the Hubs, have laws similar to NEPA. In those states, Hub-related decisions at the state and local levels may be subject to environmental review under state law, and some state NEPAs require that projects not only describe, but also address, environmental impacts.

Class VI Permits for Injection Wells

Class VI permits are issued under the Safe Drinking Water Act and are intended to protect our drinking water supply from pollution, including CO₂.

Class VI permits set requirements for:

• Siting, constructing, and operating CO₂ injection wells;
• Testing, monitoring, and reporting (including after CO₂ injection stops);
• Developing an emergency plan; and
• Maintaining financial responsibility for the CO₂ storage site, including covering the costs of any emergency and of any site clean-up needed after CO₂ injection stops.

Permitting authority:

• Currently, U.S. EPA oversees the Class VI permitting process for all states except Louisiana, North Dakota, and Wyoming, which have been given authority to oversee the permitting process themselves. (Note: Louisiana’s authority is being challenged in an ongoing court case.)
• Arizona, Texas, and West Virginia have also applied for this authority.

Class VI permitting process & public participation:

• The permitting process starts when a project developer submits an application for a Class VI permit. To get the permit, the project developer needs to demonstrate the geology in the area can contain the CO₂ — which includes showing that the area is free of faults and fractures and that CO₂ injection will not cause earthquakes — among other requirements.
• When U.S. EPA prepares a draft permit for a new Class VI project, it is published for public review with at least 30 days for public comment. There are several opportunities for public participation, including submitting comments on the draft permits, requesting and attending public hearings, and filing appeals of final permitting decisions to EPA’s Environmental Appeals Board.
• EPA also encourages project developers to consider disproportionate and cumulative impacts on communities near Class VI permit projects. In August 2023, EPA released guidance for identifying, analyzing, and addressing environmental justice concerns related to Class VI permits. Among other recommendations, the Guidance says:
  • EPA should evaluate whether a Class VI project will “create any new risks or exacerbate any existing impacts on affected communities,” including lower-income communities and communities of color;
  • EPA and the project developer should “minimize adverse effects” on communities; and
  • Project developers should ensure communities with environmental justice concerns are involved early and meaningfully in Class VI permitting actions.

While this guidance does not create legal requirements that can be enforced in court, it can be used to advocate for stronger protections in Class VI permits or to oppose Class VI permitting projects.

Land Use Approvals

Hub projects that are consistent with already permitted land uses in an area will be considered “as of right.” If a developer demonstrates that a proposed development is as of right, local decision-makers cannot require changes to, or deny, the proposed development (it will still need to comply with other permitting requirements). Hub projects that use existing buildings and infrastructure are likely to be as of right.

Hub projects that are not consistent with existing land use restrictions, on the other hand, will need to seek approval from the local government. The approval needed can take multiple forms, including:

• A special use permit: Requires the developer to show that the proposed development is appropriate given the property’s current zoning. It is common for land use zones to list specific special uses that may be permitted at a property if the developer can show that the development is consistent with the types of uses already in the zone.
• A variance: Typically applies to situations where the project does not comply with property zoning restrictions or any allowed special uses. A developer may seek an “area variance” if the development would not comply with physical requirements like building height or lot size limits. A developer may seek a “use variance” if they want to use the property in a way that isn’t permitted by the zoning map (for example, the developer wants to site a heavy industrial use in an area zoned for light industry).
  • To get a variance, a developer will generally need to show that they will face some degree of hardship if they cannot use the property as they would like to. If the developer is successful, they are given permission to develop the property in a manner that varies from its zoning, although the zoning is not changed.
• Rezoning: A developer might seek to rezone a property if their proposed use is inconsistent with current zoning, including special uses, and a variance is unavailable. This is typically a more involved process that, for example, requires public hearings.

Who makes the decision on a land use application will vary by jurisdiction and information on it can typically be found on a local government’s website.

• Some decisions may be made by a local planning agency.
• Some decisions may be made by a local planning board whose members are appointed by the local executive (such as the mayor or village president) and/or by the local legislature, such as the city council.
• Some decisions may be made by the local legislature, often with input from the planning agency and other officials.
• When engaging in a local land use project, including a Hub project, it is important to consider who the decision-makers are and what they care about.

The process for making land use decisions will also vary by location and is sometimes specified in state law. States and localities are likely to require public notice and public hearings for land use decisions, particularly for more significant decisions like a proposed rezoning.

Other Permits & Approvals

Hydrogen Hub projects may need permits and approvals under other federal laws, and these may also provide public participation opportunities.

Among the other federal laws that might apply to a project, are the following:

• Clean Water Act, which creates permitting programs to protect our waters from pollution.
  • Section 404 permits, which are issued by the Army Corps of Engineers, may be required for Hub facilities that are constructed near a waterway or wetland.
    • To get a Section 404 permit, a project developer must show that it has taken steps to avoid and minimize potential impacts to waterways, wetlands, and aquatic resources.
    • Section 404 permits are required before construction.
    • Individual projects that need a 404 permit may also need to go through the NEPA environmental review process.
  • National Pollution Discharge Elimination System (NPDES) permits, which are usually issued by a state environmental agency, may be required for Hub facilities that discharge water pollution through a pipe, ditch, or other “point source.”
    • These permits set limits on the amount of water pollution a facility can discharge and apply to all types of industrial, municipal, and agricultural water pollution, like chemicals, residue from incinerators, sewage, and water that is much hotter than the water it is discharged into.
    • Unlike Section 404 permits, NPDES permits are not required until after construction.
• Endangered Species Act, which protects endangered and threatened species, and their habitats.
  • When a federal agency funds or approves a Hub project, that agency must consult with either the U.S. Fish Wildlife Service (freshwater and land species) or the National Marine Fisheries Service (marine species) to ensure the project is not likely to jeopardize the continued existence of any threatened or endangered species or cause the destruction of those species’ habitats.
  • The Act also prevents actions that would harass, harm, or kill endangered animals.
• National Historical Preservation Act, which requires federal agencies to consider how a permitted activity might affect historic properties, including those of religious and cultural significance.
  • This Act encourages — but doesn’t require — agencies to avoid harm to historic properties.
  • As part of federal agencies’ evaluation under this Act, the public and Tribal Nations have the opportunity to alert the federal government to historic properties and comment or consult on decisions that affect those properties.
  • If Tribal Nation cultural resources are impacted by a Hub project, federal agencies or the state in which the project is located may be required to consult with interested Tribal Nations.
  • This review typically happens at the same time as the NEPA process.

Subsidy Requirements

For example:

• Hub projects that are located in Illinois may plan to seek state tax credits for certain hydrogen uses. If they do, they will be required by state law to comply with specific environmental justice requirements in addition to those that DOE expects all Hubs to meet.
• Pennsylvania also has a hydrogen tax credit for certain businesses that purchase hydrogen from a Regional Clean Hydrogen Hub located in Pennsylvania.
• Hub facilities that produce hydrogen may seek federal “clean hydrogen production” tax credits created by the Inflation Reduction Act. These credits are sometimes called 45V credits. To qualify, facilities will have to prove that the lifecycle greenhouse gas emissions rate of their hydrogen does not exceed specific thresholds.
• Blue hydrogen^‡ production facilities may also seek tax credits provided for carbon sequestration, knows as 45Q tax credits.
• Hub projects may seek additional subsidies from state and local governments that have their own standards and processes for approval.