A Possibility to Reclassify Under the EPA’s Clean Air Act

Smoke Stacks
September 05, 2019
By Laurie Toupin

Are you a major source of hazardous air pollutants (HAP) or an area source air pollution emitter in the United States?

The answer to that question may change because of a proposed reclassification ruling by the U.S. Environmental Protection Agency (EPA).

Under the original Clean Air Act (CAA) ruling, once declared a major source emitter, always a major source emitter.

But now, if a business is no longer operating at major source levels, it has the opportunity to reclassify as an area source emitter, which would mean less stringent emission limits.

Section 112 defines a major source as one that emits or has the potential to emit either the statutory thresholds of 10 tons per year (tpy) or more of any one HAP, or 25 tpy or more of a combination of HAP.

While an area source refers to a source that emits or has the potential to emit less than the statutory limits.

EPA expects the following industries to be affected:

  • Energy
  • Industrial
  • Utilities
  • Commercial
  • Waste Treatment
  • Agriculture
  • Educational Services

EPA also expects that three general types of sources may seek to reclassify as area sources:

  1. Sources previously classified as major that are no longer physically or operationally capable of emitting HAP in amounts that exceed the major source thresholds.
  2. Sources previously classified as major that have existing enforceable potential to emit (PTE) limits that keep HAP emissions below the major source thresholds.
  3. Sources with actual emissions above the major source thresholds that (a) reduce emissions to below the major source thresholds and (b) put in place enforceable emissions limits.

The distinction is important as each classification has its own set of standards.

If you are a major source emitter, then emission limits are based on maximum available control technology (MACT).

Area sources, on the other hand, are subject to less-stringent standards, based on generally available control technology (GACT).

Previously, once a company was labeled a major source, it could not change its classification despite changes in production, manufacturing practices, or self-imposed air pollution limits.

The new rule allows a company to downgrade classifications at any time if it wishes.

According to EPA, the financial implications are significant.

The Agency identified facilities with actual HAP emissions already below 75% of the thresholds for being a major source. Of the estimated 7,920 sources subject to NESHAP as a major source, EPA estimates almost half could become area sources, saving $168.9 million in the first year and $163 million to $183 million annually (in 2014 dollars) in the following years.

If those same facilities are already below 50% of the major source thresholds, the savings would be a bit less: $131.8 million in the first year, and $156.6 million in the second.

For facilities with HAP emissions up to 125% of the major source thresholds, the savings are a bit more: $207.6 million and $243.8 million respectively.

Savings in year two are higher because facilities do not face permitting costs and the avoided cost-to-sales ratios are larger.

The ruling is in the middle of the comment period. Stay tuned for final ruling later in the year.

For more information, check out the EPA’s webpage and fact sheet.

Author

Laurie Toupin