EPA Finalizes Project Emissions Accounting Rule for New Source Review Permitting Determinations

On October 22, 2020, the U.S. Environmental Protection Agency (EPA) published a prepublication version of a final rule clarifying the process for existing air pollution sources to determine whether the New Source Review (NSR) permitting program applies to proposed projects. The new rule clarifies and confirms that project emissions accounting can be considered during Step 1 of the two-step NSR applicability test, meaning that both emissions increases and decreases from the proposed modification will be considered. The two steps of the NSR applicability test consist of a first step to determine whether a proposed project will cause a significant emission increase of a regulated NSR pollutant and, if it would, the second step determines if there will be a significant net emission increase of the same regulated NSR pollutant considering all other contemporaneous emissions increases and decreases.

The new rule formalizes a March 13, 2018, memorandum from then-Administrator Scott Pruitt explaining that NSR regulations allow both emissions decreases and increases to be considered as part of Step 1 of the NSR applicability test. Critics of the new rule argue that the rule will allow facilities to make modifications that will significantly increase source wide emissions. However, in a statement, Administrator Andrew Wheeler disagreed, explaining that the “rule incentivizes installation of new technologies that can both improve operator efficiency and reduce air pollution.”

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