Audit, Compliance and Risk Blog

EPA adopts rules for hazardous air pollutant sources to reclassify from “major” to “area” using administrative controls

Posted by Jon Elliott on Tue, Dec 08, 2020


The Clean Air Act (CAA) directs the Environmental Protection Agency (EPA) to define “hazardous air pollutants (HAPs)” that may pose acute health hazards, and to impose regulations to reduce those hazards. EPA requires permits for “major sources” of HAPs based on “Maximum Achievable Control Technologies (MACT),” and lesser controls for non-major “area sources.” During President Trump’s term, EPA has pursued several initiatives to make it easier for sources to reclassify from “major” to “area” in order to reduce their regulatory responsibilities.

For example, in January 2018 EPA ended a decades-old policy declaring that every emission source that met major source criteria at the time a MACT became effective was “once in, always in” and could not requalify as an area source by accepting legally binding controls to reduce its “potential to emit (PTE).” (I wrote about this change HERE).

On November 19, EPA completed a rulemaking to formalize standards for a “major” source to reduce its PTE enough to qualify as an “area” source. The final rules contain minor changes from the text proposed in 2019 (I wrote about EPA’s proposal HERE). These revisions will take effect on January 19, 2021, the last full day of President Trump’s term.

How are Major and Area Sources Defined and Regulated?

CAA directs EPA to list emissions of particular HAPs by source categories, which EPA can then subject to National Emission Standards for Hazardous Air Pollutants (NESHAPs). Since the 1990 CAA Amendments, most NESHAPs are based on MACT standards defined by EPA. Major sources require extensive permits, while area sources typically do not.

CAA defines a major source of HAPs as follows:

“‘major source’ means 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 [tpy] or more of any hazardous air pollutant or 25 [tpy] or more of any combination of hazardous air pollutants. “ [emphasis added; see below]

In contrast, area source means any stationary source of HAPs that is not a major source. Readers should note that this determination may not be as obvious as it seems. For example, EPA may:

  • Aggregate sources within a single facility (such as multiple production or combustion lines) to determine that the facility as a whole reaches the “major source” threshold.

  • Establish a lesser quantity (or for radionuclides different criteria), for a major source than that specified in the quoted text above, based on the potency, persistence, potential for bioaccumulation, or other characteristics of the pollutant, or other relevant factors.

  • Consider a source’s potential to emit, not just its present emissions

A major source generally requires the following:

  • Preconstruction review, to establish emissions and PTE, and to evaluate and define the relevant MACT standard

  • Operating permit, which includes:

    • emissions limitations and other conditions to ensure the source’s compliance with applicable emissions standards;

    • inspection, entry, monitoring, compliance certification, record-keeping, and reporting requirements;

    • provisions under which the permit can be revised, terminated, modified, or reissued;

    • conditions allowing a permit with a term longer than three years to be “reopened” to accommodate new standards or regulations;

    • provisions for operational flexibility allowing certain narrowly defined changes without a permit revision;

    • a provision that the permit has no bearing on allowances under the CAA acid rain program;

    • fees sufficient to cover the permit agency’s administrative costs; and

    • any other conditions necessary to ensure compliance with CAA.

In comparison, area sources may be:

  • required to meet Generally Achievable Control Technology (GACT) standards, which are less restrictive than MACT

  • required to implement “management practices” specified by EPA

  • exempt from specified CAA requirements that EPA deems “impracticable, infeasible, or unnecessarily burdensome”

How is EPA Changing its Approach to Potential to Emit?

EPA is revising its approach to defining major and area sources, by emphasizing the “plain language” of “potential to emit” as quoted in the definition above. In doing so, EPA also provides more details about changes and controls that sources may adopt and implement in order to qualify as (non-major) area sources. Formally, this involves a revision to the applicability section in EPA’s NESHAP rules (40 CFR 63.1(c)) by adding the following:

“A major source may become an area source at any time upon reducing its emissions of and potential to emit hazardous air pollutants, as defined in this subpart, to below the major source thresholds established in [these rules].” (new 40 CFR 63.1(c)(6))

Although the meaning of “potential to emit” is critical to the establishment and accomplishment of regulatory compliance, EPA is not finalizing a definition of ‘‘legally and practicably enforceable’’ PTE limits or the effectiveness criteria for those limits in this action. Instead, the agency is promulgating what it refers to as a “ministerial amendment to the regulatory definition of ‘‘potential to emit’’ in the interim:

“Potential to emit means the maximum capacity of a stationary source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity of the stationary source to emit a pollutant, including air pollution control equipment and restrictions on hours of operation or on the type or amount of material combusted, stored, or processed, shall be treated as part of its design if the limitation or the effect it would have on emissions is enforceable.” (revised 40 CFR 63.2)

As part of this definition, EPA is choosing the term “enforceable” rather than “federally enforceable,” to recognize that many states have been delegated CAA authority to administer HAP permitting requirements.

EPA is also adding conforming cross-references into a host of individual HAP regulations governing individual source categories. In general, sources will have to demonstrate these PTE restrictions at the time they qualify as area sources, although EPA gives itself the flexibility to allow up to 3 years to install equipment or make other physical changes to implement these new restrictions.

Now what?

As I mentioned above, these rules are effective January 19, 2021, which means they will be in force when President Biden is sworn in. This includes the interim definition of PTE. I have not seen any discussion of the incoming Administration’s views of these changes, so cannot predict what further actions will occur. Procedurally, the agency could leave these new provisions in place, or could begin further rulemakings to adjust them.

Self-Assessment Checklist

Do any of the organization’s present activities emit regulated hazardous air pollutants in quantities that may exceed CAA thresholds for a “major source?”

Is the organization considering new or expanded activities that would emit regulated hazardous air pollutants in quantities that may exceed CAA thresholds for a “major source”, but which can be redesigned to establish a lower PTE?

If so, has the organization evaluated whether to negotiate binding limitations on the activity’s potential to emit in order to qualify as an “area source” subject to reduced regulation?

Where Do I Go For More Information?

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About the Author

Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 30 years. 

Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).

Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).

You may contact Mr. Elliott directly at:

Image by Engin Akyurt from Pixabay