On January 25, 2018, the Environmental Protection Agency (EPA) issued a guidance memorandum reversing its 1995 “once in, always in” policy interpreting Clean Air Act (CAA) Section 112 to require sources to use maximum achievable control technology (MACT) if they emitted or had the potential to emit (PTE) more than the threshold amount of hazardous air pollutants (HAP), regardless of whether later controls reduced the PTE below applicable thresholds. The new guidance provides such sources with the opportunity to leave behind the high expenses and burdensome reporting requirements of MACT, if they reduce their PTE below threshold amounts.
What was EPA’s old policy? Under the 1995 policy, a source had one point in time, the “first compliance date,” to determine whether it was a major source of a HAP subject to MACT, or an area (minor) source subject to the less stringent standard of generally available control technology. If on that date the source’s PTE was above the threshold amount (i.e., 10 tons per year of any single HAP or 25 tons per year of any combination of HAPs), the source would always be subject to MACT.
What is EPA’s new policy? EPA’s new policy reverses and replaces the 1995 policy. EPA states that if a major source reduces its PTE below emission thresholds at any time—in other words, including after the “first compliance date”—then the source will no longer be subject to MACT for that HAP so long as it remains below the applicable threshold. The guidance document clarifies that the major source must take an enforceable limit on its PTE, for instance through a permit term.
What’s next for EPA’s action? The agency changed its legal interpretation of this long-standing policy through a guidance document, but states it will soon be publishing a proposed rule to amend the regulatory language to incorporate its new interpretation. EPA will likely receive challenges from environmental groups and some states to the guidance issued this month. Under developing case law, an agency’s authority to change legal interpretations without going through notice-and-comment rulemaking is subject to some debate, a debate that opponents will very likely take up here. Any upcoming rulemaking from EPA will receive comments from opponents of the change in anticipation of challenging in court any final rule incorporating EPA’s new interpretation.
What’s next for industry? Owners and operators with sources that have triggered MACT may wish to assess their operational and regulatory environment. At the operational level, more complex facilities should assess whether they are subject to multiple MACT standards, and under each, their current PTE and whether it can be or has already been reduced. At the regulatory level, EPA’s new policy is limited by the state’s role under the CAA. Under the CAA, states are allowed to require more stringent standards, including the possibility that a state may choose to retain the old once in, always in policy. Owners and operators should keep this in mind, as state and local permitting authorities will likely need to be involved in the process for obtaining any permit revisions. Looking forward, owners and operators of major sources will have the opportunity to comment on a future rulemaking from EPA.