EPA’s Long-Standing “Once In, Always In” Policy Is Out

On January 25, 2018, the Environmental Protection Agency (EPA), as part of the President’s regulatory reform agenda, issued guidance¹ reversing a two-decade-long interpretation of major source reclassification under the Clean Air Act (CAA) Section 112, commonly referred to as the “Once In, Always In” Policy.² Under the former interpretation, once a facility was deemed a major source, it could not subsequently seek reclassification as an area source subject to more lenient emission requirements. Effective immediately, a facility may seek to reclassify as an area source if it accepts an enforceable limit on its potential to emit hazardous air pollutants (HAP) below the major source thresholds.

Under the CAA, “major sources” (those with an annual potential to emit 10 tons of any HAP or 25 tons of any combination of HAPs³) are required to comply with stringent CAA maximum achievable control technology, inspection, recordkeeping, and reporting requirements, as well as with Title V operating permit requirements. Facilities that emit below those thresholds are defined as “area sources,” are subject to less stringent control standards, and, for the most part, are not required to obtain Title V permits. Under the old approach, once a facility was classified as a major source, it would permanently remain a major source, even if it later reduced its HAP emissions below the applicable thresholds.

The new approach responds to decades of industry requests to reduce the regulatory burden of complying with stringent CAA provisions. In addition to reducing the industry burden, the guidance is also expected to lighten the load on already overworked state agencies that issue Title V permits and oversee other CAA issues. Lastly, and equally importantly, the guidance will encourage industry players to innovate in pursuit of technological improvements and to voluntarily abate pollution to qualify as a less-regulated source.

The EPA plans to issue a rule to cement the new approach. Notably, the agency has twice previously issued draft rules to “consider alternative approaches that could garner additional environmental benefits and provide additional flexibility to small sources,”⁴ but neither the 2003 nor the 2007 draft was ever finalized.⁵ We expect the forthcoming proposal to closely resemble the 2007 draft, given the similarity of that rule to the approach taken by this guidance.  

As always, a notice-and-comment period on the proposal will precede the final rulemaking and will offer an excellent opportunity for interested parties to have their voices heard. Those in favor of this action, but cautious about the agency course reversal, will be heartened to know that even the OIAI policy itself acknowledged that “the statute may be flexible enough to allow the Agency to reach different results through rulemaking.”⁶ With ample support and participation during the comment period, a final rule may soon crystalize this guidance.

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¹ Memorandum from William L. Wehrum on Reclassification of Major Sources as Area Sources Under Section 112 ofthe Clean Air Act, to Regional Air Division Directors (January 25, 2018), available at https://www.epa.gov/sites/production/files/2018-01/documents/reclassification_of_major_sources_as_area_sources_under_section_112_of_the_clean_air_act.pdf [hereinafter the “Guidance”].

² Memorandum from John S. Seitz on Potential to Emit for MACT Standards—Guidance on Timing Issues, to Regional Office Air Directors (May 16, 1995), available at https://www.epa.gov/sites/production/files/2015-08/documents/pteguid.pdf [hereinafter the “OIAI Policy”].

³ 42 U.S.C. § 7412 (a) (1).

⁴ OIAI Policy at 5.

⁵ Guidance at 3. The guidance notes that “EPA has never taken final action on th[e] 2007 proposal, which has not been withdrawn.”

⁶ OIAI Policy at 4-5.