On March 25, 2020, the US Environmental Protection Agency (EPA) proposed a substantial change to how EPA interprets what constitutes “begin actual construction” under the Clean Air Act’s New Source Review (NSR) program.  Historically, EPA interpreted the concept of beginning actual construction broadly, and generally referred to any construction of a permanent nature at the facility or process involved.  EPA’s proposed new interpretation focuses on beginning construction on an emission unit, as opposed to any permanent construction at the permitted facility. 

“Under EPA’s revised interpretation, a source owner or operator may, prior to obtaining an NSR permit, undertake physical on-site activities – including activities that may be costly, that may significantly alter the site, and/or are permanent in nature – provided that those activities do not constitute physical construction on an emissions unit, as the term is defined in 40 CFR § 52.21(b)(7).”

EPA also proposes that construction necessary to accommodate the emissions unit, but not part of the emissions unit, will also be allowed to begin.

“Further, under this revised interpretation, an 'installation necessary to accommodate'the emissions unit at issue is not considered part of that emissions unit, and those construction activities that may involve such 'accommodating installations' may be undertaken in advance of the source owner or operator obtaining a major NSR permit.”

Presuming the proposed guidance memorandum is finalized as proposed, the most complex issue will be to work with relevant permitting agencies regarding what constitutes an emissions unit as defined in the regulations, as well as what may be an installation necessary to accommodate the emissions unit. EPA provides an example where the defined “affected facility” within underlying rules may be a good example to consider when defining an emissions unit. However, EPA specifically avoids providing bright lines around these concepts, and expects these issues to be worked out on a case-specific basis. 

Note that although EPA has issued the memorandum as “Draft for Public Review and Comment,” EPA also notes that the ultimate guidance document is “an interpretation or interpretive rule” not subject to notice-and-comment rulemaking requirements, and this memorandum does not itself “create or alter any binding requirements on regulatory agencies, permit applicants, or the public.” 

It is not clear whether this document will be published in the Federal Register; however, EPA will accept comments through May 11, 2020, and comments may be submitted directly through the comment box.

Please contact the Trihydro air permitting team if you have any questions.