On June 25, 2019, EPA released a pre-publication draft of a proposed rule allowing sources subject to Maximum Achievable Control Technology (MACT) standards under Section 112 of the Clean Air Act to voluntarily limit their emissions and avoid MACT. The proposed rule, which formalizes and expands on a January 2018 guidance document issued by former EPA Assistant Administrator Bill Wehrum, would allow “major sources” of hazardous air pollutants (HAPs) otherwise subject to MACT standards to take an enforceable limit on HAPs and thus reclassify as “area sources.” The rulemaking, branded by the Agency as “Major MACT to Area” (MM2A), would eliminate the Agency’s longstanding “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 MACT standard was permanently subject to that standard, even if the source was later able to reduce its emissions below major source applicability thresholds.

The June 2019 regulatory proposal goes well beyond the Agency’s 2018 limited guidance on reclassification. The proposal identifies specific procedural steps a major source must take to reclassify to an area source and also identifies a process for an area source to revert back to major source status. EPA has also proposed to eliminate a requirement that any reclassification limits on HAP emissions be federally enforceable. The proposed rule contains criteria for effective HAP limits and EPA is seeking comment on these criteria, including whether HAP limits need to go through public notice and comment in order to be effective.

While EPA states in the MM2A proposal that it does not know how many major sources might take advantage of the opportunity to reclassify as area sources, an “illustrative assessment” conducted by the Agency projects that about half of facilities subject to major source MACT standards will be able to reclassify as area sources. The proposal requests comment on specific examples of sources that would consider investing in additional emission reduction measures in order to seek reclassification.

The MM2A proposal will not affect all industries in the same way. For some, like electric steam generating units, it will be of no benefit because sources in the category are subject to the same requirements regardless of their major or area source status. For many source categories, such as industrial boilers, EPA has adopted separate area source standards that would still apply. Thus, the implications of EPA’s proposal are likely to differ significantly from industry to industry, and even from source to source within a regulated category.