On January 25, 2018, the U.S. Environmental Protection Agency (“EPA”) withdrew its 1995 “once in always in” guidance. Under that guidance, facilities classified as “major sources” of hazardous air pollutants (“HAP”) as of the “first compliance date” of a maximum achievable control technology (“MACT”) standard under Section 112 of the Clean Air Act are required to comply permanently with the MACT standard. Now, EPA’s current policy is that a major source that limits its potential to emit (“PTE”) to below major source thresholds can become an area source and will no longer be subject to the major source MACT.

The Clean Air Act defines “major source” as “any stationary source or group of stationary sources located within a contiguous area and under common control that emits or has the potential to emit considering controls, in the aggregate, 10 tons per year or more of any hazardous air pollutant or 25 tons per year or more of any combination of hazardous air pollutants.” This definition expressly allows PTE to be calculated “considering controls,” and does not address the timing for when a source will be classified as a major source. As a result, EPA found that its “once in always in” policy “created an artificial time limit” contrary to the plain language of the Clean Air Act and must be withdrawn.

The potential consequences of this change in policy are substantial. By allowing a source currently regulated as a “major source” to become an area source by limiting its PTE, this policy will provide manufacturing plants, small power plants, and other regulated industrial facilities with flexibility to avoid many of the burdensome requirements imposed by major source MACT standards, which are generally more stringent than the requirements for area sources. This will create significant incentives for plants to reduce their emissions through either voluntary pollution abatement and prevention efforts or technological controls. In addition, it will create significant benefits for plants who have already limited HAP emissions by installing controls or implementing work practice standards — in fact, the very controls imposed by a MACT standard may make a facility an area source. However, any such limits must be federally enforceable, so sources will still need to maintain some or all of the controls that limit their PTE. In addition, facilities may need to review and potentially amend their Title V operating permits to take advantage of this new policy.

EPA has announced that it may publish a Federal Register notice seeking public comment regarding adding regulatory text consistent with the interpretation stated in yesterday’s memorandum. A close review and comment on that proposed regulation will be needed. However, in the meantime, EPA’s memorandum withdrawing the “once in always in” policy is effective immediately. Husch Blackwell’s experience with the EPA policy, the MACT standards and other regulations governing HAP emissions, and air permitting programs can help identify appropriate and efficient strategies for realizing both regulatory and environmental benefits under the new policy.