On October 1, 2020, the Environmental Protection Agency (“EPA”) issued its final rule allowing for a source classified as a “major source” of hazardous air pollutants (“HAP”) under section 112(a) of the Clean Air Act to reclassify as an “area source.” A “major source” emits or has the “potential to emit” 10 tons per year or more of a single HAP or 25 tons per year or more of a combination of HAP. The EPA had long-followed the “once-in-always-in” policy, under which a facility that qualified as a major source of HAPs as of the “first substantive compliance date” of the applicable Maximum Achievable Control Technology (“MACT”) standard was permanently subject to that standard, even if the source was later able to reduce its emissions below major source applicability thresholds. With the final rule, branded as the “Major MACT to Area” (“MM2A”), EPA codified the withdrawal of the “once-in-always” policy and provided the requirements that apply to major sources choosing to reclassify, including reclassification that occurs after the first substantive compliance date of an applicable MACT standard.
In 2018, EPA issued a memorandum discussing the statutory provisions that govern when a major source subject to a major source standard under section 112(a) of the CAA may be reclassified as an area source, and thereby avoid being subject to major source requirements. In that “MM2A” memorandum, EPA argued that even the current regulations on the books allowed for the reclassification of sources, but EPA later decided to clarify its regulations on that point. On July 26, 2019, EPA issued its proposed rule to codify the policy announced in the MM2A memorandum.
The final rule adopts much of the proposal and does not automatically reclassify any major source or require any major source to reclassify to area source status. Rather, it merely provides a voluntary pathway for a major source that is able to limit its “potential to emit” HAP to below the 10 and 25 ton per year major source thresholds, provided certain conditions are met, and enforceable limits are set in place in the source’s air permit. Any major source reclassifying to area source status remains subject to any applicable standard until the limit necessary for reclassification becomes effective. After the reclassification becomes effective, the source becomes subject to any applicable area source standard, if any apply to that category of sources. Certain major sources may even be able to qualify as “true” area sources when, after permanently removing equipment or changing processes, such sources no longer have the potential to emit HAP at major source levels even without a new permit limit.
The final rule, however, does not revise the EPA’s view on how to determine “the maximum capacity of a stationary source to emit a pollutant under its physical and operational design,” The final rule also does not finalize all aspects of the MM2A proposal. For example, in the MM2A proposal, the EPA proposed specific criteria that permit limits must meet for these limits to be effective and also proposed to amend the definition of “potential-to-emit” by removing the requirement for “federally enforceable” limits and requiring instead that such limits meet the effectiveness criteria of being both “legally enforceable” and “practicably enforceable,” and provided proposed definitions of each criteria. EPA is still considering these aspects of the proposal and how its proposed updates may affect other Clean Air Act programs, for which those concepts are also relevant.
The final rule will become effective 60 days after the date of publication in the Federal Register, and as of the date of this article, the rule has not yet been published. Notably, given the current timing in the congressional legislative session, the final rule falls within the Congressional Review Act (“CRA”) “carry over” period, meaning that the next Congress will have an opportunity to nullify the rule. Although the use of the CRA was uncommon in the past, it was used at least 15 times at the beginning of the Trump Administration to repeal controversial Obama-era rules.