On September 21, 2023, the U.S. Environmental Protection Agency (EPA) published a notice of a proposed rule, “Review of Final Rule Reclassification of Major Sources as Area Sources Under Section 112.” The proposal adds requirements for regulated sources of hazardous air pollutants (HAPs) to reclassify from major source status to area source status under the National Emission Standards for Hazardous Air Pollutants (NESHAPs) program. Stakeholders who qualified under the revised policy adopted by the Trump administration should particularly take note of this further change by the Biden administration’s EPA. Comments are due by November 13, 2023.
NESHAPs are stationary source emission standards for “major sources” and “area sources” of HAPs established under Clean Air Act Section 112. A facility is considered a major source if it emits or has the potential to emit (PTE), considering controls, more than 10 tons per year of a single HAP or 25 tons per year of any combination of HAPs. Major sources are subject to maximum achievable control technology (MACT) standards, pollution control requirements based on the technology of the best-controlled sources in the industry. Area sources may be subject to less stringent emissions control and compliance requirements, as EPA may permit area sources to use generally available control technologies.
In 1995, EPA published a memorandum stating that a facility that is a major source of HAPs must permanently comply with the major-source NESHAPs after its first substantive compliance date, even if that facility later limits its PTE such that it could be reclassified from a major source to an area source. This position was commonly referred to as the “once in, always in” (OIAI) policy. EPA subsequently rescinded the OIAI policy through another memorandum in January 2018 with an intention to embody the revised policy in a regulation. EPA issued that final rule, titled “Reclassification of Major Sources as Area Sources Under Section 112 of the Clean Air Act,” on November 19, 2020. Under the 2020 rule, major-source facilities could be reclassified as area sources if they reduced their annual PTE below 10 tons of a single HAP or 25 tons of combined HAPs. Then, on his first day in office, President Joe Biden directed EPA to review a number of rules issued during the Trump administration, including the new OIAI final rule.
New proposed rule
If the new rule is finalized as proposed, major sources of HAPs that seek reclassification as area sources would need to meet permit conditions that mirror the major-source NESHAP. Specifically, a source seeking reclassification would need to operate under a permit that contains (1) federally enforceable permit limitations at least equal to the limitations imposed by the MACT standards and (2) safeguards against emission increases after reclassification beyond the major-source NESHAP requirements.
The new rule does not reinstate the OIAI policy; major sources that reduce their annual PTE below 10 tons of a single HAP or 25 tons of combined HAPs could still be reclassified as area sources. However, the imposition of stricter emission control requirements on reclassified sources may reduce the incentive for sources to seek reclassification.
The rule would apply to all sources that were reclassified from major sources to area sources starting on January 25, 2018. As of the publication of the proposed rule, EPA had identified approximately 200 facilities that successfully obtained reclassification from major source to area source since January 25, 2018.
In addition to the stricter emission standards for reclassified facilities, the proposed rule updates reporting requirements. One such update clarifies that source reclassifications will be effective upon the date of electronic submittal of the notification to EPA (i.e., sources are no longer permitted to notify EPA within 15 days after reclassification, as was permitted under 40 CFR 63.9(j)).
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