The Environmental Protection Agency (EPA) published a proposal on 25 November 2014 to revise the Clean Air Act’s National Ambient Air Quality Standards (NAAQS) for ozone. The EPA proposed to set the primary and secondary ozone NAAQS within the range of 65 to 70 parts per billion (ppb), and set the secondary ozone NAAQS within a range of 65 to 70 ppb. The EPA will also accept comment on retaining the current standard of 75 ppb set by the Bush administration in 2008, or lowering the standard to the 60 ppb threshold favored by environmental and public health advocates. The EPA is under a court-ordered deadline to finalize the revised ozone NAAQS by 1 October 2015.

The new NAAQS will almost certainly cause many parts of the country that are in attainment with the current 75 ppb ozone NAAQS to be reclassified as non-attainment with the revised ozone NAAQS. This reclassification will make it more difficult to construct new or modified sources of air pollution in newly designated non-attainment areas. Construction will be more difficult for at least two reasons. First, the new or modified source will have to identify emission reductions from other existing sources in the non-attainment area that will more than offset the new or modified source’s emissions. Second, the new or modified source will have to install more expensive lowest achievable emission rate (LAER) control technologies at the new source. Finding available offsets and installing more advanced controls for new and modified sources in these new non-attainment areas will be challenging.

Companies planning new or modified sources must have a comprehensive understanding of how the timing of these new requirements will interface with the source’s permitting and construction schedule. The Clean Air Act establishes different deadlines for the applicability of the revised NAAQS and the applicability of the offset and LAER requirements. The NAAQS applicability rule is that any new or modified source that does not have a final permit by the effective date of the revised ozone NAAQS — likely 1 December 2015 — will have to demonstrate that the source complies with the revised ozone NAAQS before a permit may be issued. The offset and LAER applicability rule is that any new or modified source that does not have a final permit by the effective date of the revised non-attainment area designations — likely 1 December 2017 — will have to comply with the offset and LAER requirements. New or modified sources that receive final permits between 1 December 2015 and 1 December 2017 will have to demonstrate that they will not cause or contribute to air pollution in excess of the new ozone NAAQS, but will not need to find offsets or install LAER.

In addition to these general rules, the EPA has included a grandfathering provision in its revised ozone NAAQS proposal. The grandfathering provision would apply to new or modified sources in areas that are in attainment for the current ozone NAAQS, but which will be in non-attainment areas under the revised ozone NAAQS. These sources can qualify for the grandfathering provision in two ways: (1) through securing a formal determination from the permitting authority that the source’s air permit application is complete before the signature date of the revised ozone NAAQS — likely 1 October 2015; or (2) through the publication by the permitting authority of a public notice of a draft permit or preliminary determination before the effective date of the revised ozone NAAQS — likely 15 December 2015. These grandfathered sources will only have to comply with the current 75 ppb ozone NAAQS and the attainment area new source review rules under the Prevention of Significant Deterioration program, and not the more stringent non-attainment new source review rules that include the offset and LAER requirements.