On September 27, 2023, the New York State Department of Environmental Conservation (NYSDEC) published a draft policy aimed at implementing Section 7(3) of the Climate Leadership and Community Protection Act (CLCPA), which seeks to prevent disadvantaged communities from being disproportionately affected by greenhouse gas (GHG) or co-pollutant emissions. The draft policy lays out a procedure NYSDEC will follow when reviewing certain permit applications for projects that involve sources and activities that will result in direct or indirect GHG or co-pollutant emissions. For such permit applications, NYSDEC will first determine whether the project is in or is likely to affect a disadvantaged community and will then consider whether the project will result in increases in GHG or co-pollutant emissions. If both criteria are met, the project applicant must prepare a disproportionate burden report explaining the anticipated emissions and outlining project design measures that can be implemented to mitigate such burdens on the community. NYSDEC will use these reports when deciding whether to grant the permit. This blog post is an in-depth look at the new policy.

Since 2020, two major pieces of New York State legislation have been enacted to address the effects of pollution-generating activities on disadvantaged communities. The first was the CLCPA, which went into effect January 1, 2020 and sets forth ambitious state greenhouse gas emission reduction targets. The second was Chapter 49 of 2023 (S1317/A1286), which, as discussed in a previous SPR blog post, amended the State Environmental Quality Review Act (SEQRA) process and NYSDEC permit approval process to expressly incorporate environmental justice (EJ) considerations. Among other EJ measures, Chapter 49 of 2023 would require permit applicants in some cases to prepare an “existing burden report” documenting pollution in disadvantaged communities. That law goes into effect January 1, 2025.

Under Section 7(3) of the CLCPA, when considering and issuing permits, licenses, and other administrative approvals and decisions, all state agencies, offices, authorities, and divisions are prohibited from disproportionately burdening disadvantaged communities (as defined in the CLCPA) and are required to prioritize reductions of GHG emissions and co-pollutants in such communities. The new guidance—proposed Division of Environmental Permits Policy “Permitting and Disadvantaged Communities (DEP-23-1)”—is aimed at implementing this section of the CLCPA and provides guidance on the procedure NYSDEC will follow when evaluating certain permit applications to ensure the impacts and existing burdens on disadvantaged communities are considered. The Disadvantaged Communities Criteria, which identifies disadvantaged communities under the CLCPA, was finalized by the Climate Justice Working Group on March 27, 2023. (An in-depth explanation of how the criteria was developed can be found in SPR’s prior blog post on this issue.)

DEP-23-1 will cover the following types of permits, including all new permits, permit renewals, and permit modifications, that involve sources and activities that result in direct or indirect GHG or co-pollutant emissions:

• All major permit applications made pursuant to the following sections of the New York State Environmental Conservation Law (ECL): (a) Article 15, Title 15, and Article 17 for facilities withdrawing and using over 20 MGD of cooling water; (b) Article 19, Air Pollution Control; (c) Article 23, Title 17, Liquefied Natural Gas and Petroleum Gas; (d) Article 27, Title 7, Solid Waste Management; and (e) Article 27, Title 9, Industrial Hazardous Waste Management; and

• The following permits issued under the New York State Uniform Procedures Act (UPA): (a) projects involving construction of energy production, generation, transmission, or storage facilities; (2) projects with sources and activities that may result in GHG emissions or co-pollutants, directly or indirectly; and (3) non-UPA facility registrations that fall under any ECL permit type covered by this policy, where NYSDEC determines an analysis is necessary or appropriate to ensure CLCPA consistency, such as projects with significant GHG or co-pollutant emissions.

Upon receiving an application for a permit described above, NYSDEC staff will conduct a preliminary screening to determine (1) whether the proposed action is a “covered project,” meaning it will result in direct or indirect GHG or co-pollutant emissions, and (2) whether the proposed project is in, or is likely to affect, a disadvantaged community. Both on- and off-site impacts from GHGs and co-pollutants resulting from the operation of the project facility will be considered during this phase. If a proposed action meets these two criteria, NYSDEC staff will then determine if the proposed action will “disproportionately burden” any affected disadvantaged communities by increasing GHG emissions or co-pollutants.

Applicants whose projects NYSDEC determines will increase GHG emissions or co-pollutants must prepare a disproportionate burden report, which must include several items, including but not limited to (1) the identification of GHG and co-pollutant emissions caused by the project that will affect disadvantaged communities, (2) potential benefits of the project to the community, and (3) project design measures that can be implemented to mitigate the disproportionate burdens by measurably offsetting the anticipated emissions. When Chapter 49 of 2023 goes into effect, it will similarly require the preparation of a report for certain permit applications outlining the existing burdens in EJ communities that will be affected by the proposed project. In an apparent attempt to make the implementing regulations for Section 7(3) of the CLCPA consistent with Chapter 49, several of the items that will be required in a Chapter 49 existing burden report will also be required in the DEP-23-1 disproportionate burden report.

Disproportionate burden reports must be submitted prior to an application’s completion, as NYSDEC will incorporate any findings into their deliberations, including a SEQRA determination of significance.

DEP-23-1 also includes enhanced public participation requirements to promote transparency within the communities where projects are being proposed. Currently, under DEC Commissioner Policy 29 (CP-29), applicants for certain major ECL permits must prepare a Public Participation Plan where approval of the application will likely result in a potential adverse environmental impact in or near a Potential Environmental Justice Area (PEJA), which are identified using an integrated geographic information system (GIS) and demographic application and consist of U.S. Census block groups that meet specific statistical criteria related to minority representation and household incomes below the federal poverty level.

Any proposed projects that fall under DEP-23-1 will automatically be subject to CP-29’s Public Participation Plan requirements, regardless of whether they fall within a PEJA. The applicant must also solicit input from members of the affected disadvantaged community regarding the proposed project design and existing and potential benefits of the proposed project. Disproportionate burden reports will be made available for public review and comment.

DEP-23-1 does not provide clarity about the criteria NYSDEC will use to determine: (1) if a proposed action “may result in GHG emissions or co-pollutants, directly or indirectly”; (2) if, for non-UPA facility registrations that fall under the policy, “an analysis is necessary or appropriate to ensure CLCPA consistency such as projects with significant GHG or co-pollutant emissions”; or (3) if a facility that is not located in the disadvantaged community “involves off-site GHG or co-pollutant impacts within a disadvantaged community in close proximity to the proposed action.” The guidance document also fails to clearly explain what modeling will be used to determine if a project will result in “off-site” impacts. These deficiencies in the policy language will hopefully be addressed following the public comment period, which closed on November 27^th.

This community-centric policy will undoubtedly alter the way that applications are reviewed, impacting real estate developers, project sponsors, and local communities alike. While the policy’s comprehensive framework aims to integrate environmental justice considerations into the regulatory review process, project applicants should anticipate challenges and potential delays as the agency adjusts to these new requirements. Project applicants should also anticipate additional changes to this policy once NYSDEC publishes its Chapter 49 regulations, which will likely occur in 2024 or early 2025.