The Proposed Amendment Explained
401 KAR 50:038 is an administrative regulation that enforces the Air Emissions Fee in Kentucky. Fees are calculated by the Energy and Environment Cabinet, where the cost per ton emitted is determined annually based on the operating budget and subject emissions. The proposed amendment removes a 4,000-ton per year pollutant cap. Removing the 4,000-ton cap will increase the billable tons of emissions leading to a per ton fee reduction for all sources.
Why is this change important?
By eliminating the 4,000-ton cap, the per ton emission fee more accurately reflects subject emissions, which has multiple impacts:
- Creates a financial incentive for higher emitting facilities to reduce their emissions.
- Accounts for emissions previously excluded from calculation.
- Reduces the per ton fee for all sources subject to regulation.
What is not changing?
Sources subject to this regulation that emitted less than 25 tons of total subject emissions will continue to pay an annual fee of $150, as the cost per ton calculation is only applied to sources emitting 25 tons or more.
How will your emission fee be calculated?
The calculation of your facility's emission fee will depend on whether your facility emits 25 or more tons of pollutants annually. Here’s how the fee structure breaks down:
For Facilities Emitting 25 or More Tons:
Your fee will be calculated by multiplying your facility's total emissions (in tons) by the cost per ton (determined by the Cabinet).
For Facilities Emitting Less Than 25 Tons:
Your fee will remain a flat $150 annual fee as per 401 KAR 50:038, Section 3(5)(b).
Accessible Version of Example Fee Calculations
For those with visual disabilities, the information in the graphic above is presented as text below. For these examples, let's assume the cost per ton is $130 for the current calculation process and $100 per ton after the proposed amendment change:
Facility A: Emits less than 25 tons of total subject emissions
- Facility A emits 5 tons of one subject emission and 5 tons of another subject emission.
- Total subject emissions are ten tons.
- No change; facility A pays $150 annual fee.
Facility B: Emits 25 tons or more of total subject emissions, with no pollutants exceeding the 4,000-ton cap
- Facility B emits 25 tons of one subject emission and 75 tons of another subject emission.
- Total subject emissions are 1,000 tons.
- Current Process: 1,000 X $130/ton = $13,000 fee
- Proposed Amendment: 1,000 X $100/ton = $10,000 fee
Facility C: Emits 25 tons or more of total subject emissions, with pollutants exceeding the 4,000-ton cap
- Facility C emits 2,500 tons of one subject emission and 7,500 tons of another subject emission.
- Total subject emissions are 10,000 tons.
- Current Process: The 4,000 ton cap per subject emission means only 6,500 tons of total emissions will be billed; 6,500 X $130/ton = $845,000
- Proposed Amendment: No cap; all subject emissions billed; 10,000 X $100/ton = $1,000,000