Colorado regulators want to raise fees by as much as 67% on air-pollutant emissions and the permits that are required for them — a price hike that industry leaders hope will result in faster permitting.
The Colorado Air Quality Control Commission voted last month to set an April rulemaking hearing to consider the fee increases and new rules around the reporting of emissions. If approved, four separate fee hikes — meant to cover the costs of permitting, monitoring and enforcement — would go into place between June 2025 and early 2026.
These increases will be debated as part of a trio of hearings in the new year focused on increasing regulations around air toxic contaminants, as prescribed in a 2022 law. The AQCC will identify five air toxins next week that will be subject to increasing rules, will seek the new reporting rules and fee increases in April and then will hold a third hearing in September to set health-based standards for the newly identified pollutants.
While business leaders have concerns about each step in that process — including the belief that ramping regulations on some identified air toxins could harm targeted industries like medical device-making — the idea to increase fees has led more to questions. Primary among them: Will asking emitting companies to pay $6.6 million in additional permit-related fees to the Colorado Department of Public Health and Environment produce a more efficient permitting process than the one that can run beyond a year now?
“Predictability for the business community”
The fee increases are part of a larger CDPHE budget request to boost resources for permitting. That request also involves transferring $14 million from an electric-school-bus grant program into the Stationary Source Control Fund that pays for regulatory oversight of pollutants and repurposing funds from elimination of 19 positions that remain unfilled.
“We are raising fees just minimally enough to ensure some predictability for the business community,” Lindsay Ellis, CDPHE director of legislative affairs, told the Colorado Chamber of Commerce’s Energy and Environment Committee in December.
The fees will apply to any source of air pollutants that is required to receive a permit from the state and will be based on the emissions that businesses producing the pollutants calculate and report to CDPHE. They’ll fund all Colorado Air Pollution Control Division operations, though Leah Martland, APCD regulatory development and engagement unit supervisor, said priorities for new revenues include data and technology modernization, compliance, inspections and modeling.
The four proposed fee hikes are:
- A 66.5% increase on criteria pollutant emissions fees, from $36 to $60 per ton;
- A 66.5% boost in hazardous air pollutant emissions fees, from $239 to $398 per ton;
- A 50% hike in Air Pollution Emissions Notice (APEN) filing fees, from $242 to $363; and,
- A 50% jump in permit-processing fees, from $119 per hour to $180.
Who will be affected by hike in fees
Under the current fee structure, about 1,800 companies in a wide swath of industries are required to pay pollution fees, which accounted for $5.3 million in revenue in 2023, according to CDPHE numbers. The department that year also collected $4.9 million in permit-processing revenues and another $1.29 million in APEN fees.
CDPHE officials have proposed expanding reporting requirements — and, thus, fee payments — to three categories of what are considered minor sources of emissions. These include: Sources that use or emit ethylene oxide, a gas used to make chemicals and sterilize equipment; sources that use or emit heavy metal like cadmium, nickel or hexavalent chromium in the manufacturing process; and all sources covered under the Oil and Natural Gas Annual Emission Inventory Reporting, which must report annually.
In addition, CDPHE has proposed lower thresholds to trigger reporting for some pollutants. Producers of ethylene oxide, for example, are now subject to reporting requirements if they emit more than 250 pounds a year; that threshold would drop dramatically to .02 pounds per year under the proposed new rules — lower than the U.S. Environmental Protection Agency threshold of .82 pounds per year.
Why CDPHE is seeking a boost in fees, reporting
All these changes are meant to provide state regulators with a more robust look at the emissions produced in the most recent calendar year, explained Amanda Damweber, supervisor of the air toxics regulatory unit, to the AQCC in December. If approved, the new APEN filing fees and permit processing fees would begin in June, while the per-ton revisions would take effect for emissions in 2025 and be billed in 2026.
Damweber acknowledged that both business and environmental groups have offered concerns about the proposal. Environmentalists and community groups have expressed skepticism over the information being reported solely by companies and have asked for more independent oversight of the figures. Businesses, meanwhile, asked for limited exemptions and de minimis thresholds for the reporting mandate.
The fees proposal does not seek any third-party testing mandate. However, Damweber told the AQCC, it does include exemptions for certain activities with limited public health risks, including office activities, food service, small refrigerators and certain motor vehicles.
In all, she added, businesses would have to report emissions of 341 different pollutants — a total that was reduced from an original list of 477 pollutants that CDPHE considered.