[Federal Register Volume 88, Number 186 (Wednesday, September 27, 2023)]
[Proposed Rules]
[Pages 66336-66351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21041]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 63
[EPA-HQ-OAR-2023-0330; FRL-4908.1-01-OAR]
RIN 2060-AV20
Review of Final Rule Reclassification of Major Sources as Area
Sources Under Section 112 of the Clean Air Act
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The EPA is proposing to add requirements for sources to
reclassify from major source status to area source status under the
National Emission Standards for Hazardous Air Pollutants (NESHAP)
program. The requirements of this proposal would apply to all sources
that choose to reclassify, including any sources which have
reclassified since January 25, 2018. The EPA is proposing that sources
reclassifying from major source status to area source status under the
NESHAP program must satisfy the following criteria: any permit
limitations taken to reclassify from a major source of hazardous air
pollutants (HAP) under the Clean Air Act to an area source of HAP must
be federally enforceable, any such permit limitations must contain
safeguards to prevent emission increases after reclassification beyond
the applicable major source NESHAP requirements at time of
reclassification, and reclassification will only become effective once
a permit has been issued containing enforceable conditions reflecting
the requirements proposed in this action and electronic notification
has been submitted to the EPA. Additionally, we are proposing
clarifications to reporting requirements and updating language
regarding submittal of confidential business information.
DATES:
Comments. Comments must be received on or before November 13, 2023.
Under the Paperwork Reduction Act (PRA), comments on the information
collection provisions are best assured of consideration if the Office
of Management and Budget (OMB) receives a copy of your comments on or
before October 27, 2023.
Public hearing: If anyone contacts us requesting a public hearing
on or before October 2, 2023, we will hold a virtual public hearing.
See SUPPLEMENTARY INFORMATION for information on requesting and
registering for a public hearing.
ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2023-0330, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov/
(our preferred method). Follow the online instructions for submitting
comments.
Email: [email protected]. Include Docket ID No. EPA-
HQ-OAR-2023-0330 in the subject line of the message.
Fax: (202) 566-9744. Attention Docket ID No. EPA-HQ-OAR-
2023-0330.
Mail: U.S. Environmental Protection Agency, EPA Docket
Center, Docket ID No. EPA-HQ-OAR-2023-0330, Mail Code 28221T, 1200
Pennsylvania Avenue NW, Washington, DC 20460.
Hand/Courier Delivery: EPA Docket Center, WJC West
Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004.
The Docket Center's hours of operation are 8:30 a.m.-4:30 p.m., Monday-
Friday (except federal holidays).
Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to https://www.regulations.gov/, including any personal information
provided. For detailed instructions on sending comments and additional
information
[[Page 66337]]
on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of
this document.
FOR FURTHER INFORMATION CONTACT: For questions about this proposed
action, contact U.S. EPA, Attn: Nathan Topham, Mail Drop: D243-02, 109
T.W. Alexander Drive, P.O. Box 12055, RTP, North Carolina 27711;
telephone number: (919) 541-0483; email address: [email protected].
SUPPLEMENTARY INFORMATION:
Participation in virtual public hearing. To request a virtual
public hearing, contact the public hearing team at (888) 372-8699 or by
email at [email protected]. If requested, the hearing will be
held via virtual platform on October 12, 2023. The hearing will convene
at 10:00 a.m. Eastern Time (ET) and will conclude at 4:00 p.m. ET. The
EPA may close a session 15 minutes after the last pre-registered
speaker has testified if there are no additional speakers. The EPA will
announce further details at https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112.
If a public hearing is requested, the EPA will begin pre-
registering speakers for the hearing no later than 1 business day after
a request has been received. To register to speak at the virtual
hearing, please use the online registration form available at https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112 or contact the public hearing
team at (888) 372-8699 or by email at [email protected]. The
last day to pre-register to speak at the hearing will be October 10,
2023. Prior to the hearing, the EPA will post a general agenda that
will list pre-registered speakers at: https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112.
The EPA will make every effort to follow the schedule as closely as
possible on the day of the hearing; however, please plan for the
hearings to run either ahead of schedule or behind schedule.
Each commenter will have 4 minutes to provide oral testimony. The
EPA encourages commenters to provide the EPA with a copy of their oral
testimony electronically (via email) by emailing it to
[email protected]. The EPA also recommends submitting the text of
your oral testimony as written comments to the rulemaking docket.
The EPA may ask clarifying questions during the oral presentations
but will not respond to the presentations at that time. Written
statements and supporting information submitted during the comment
period will be considered with the same weight as oral testimony and
supporting information presented at the public hearing.
Please note that any updates made to any aspect of the hearing will
be posted online at https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112. While the EPA expects the hearing to go forward as set forth
above, please monitor our website or contact the public hearing team at
(888) 372-8699 or by email at [email protected] to determine if
there are any updates. The EPA does not intend to publish a document in
the Federal Register announcing updates.
If you require the services of a translator or special
accommodation such as audio description, please pre-register for the
hearing with the public hearing team and describe your needs by October
4, 2023. The EPA may not be able to arrange accommodations without
advanced notice.
Docket. The EPA has established a docket for this rulemaking under
Docket ID No. EPA-HQ-OAR-2023-0330. All documents in the docket are
listed in https://www.regulations.gov/. Although listed, some
information is not publicly available, e.g., Confidential Business
Information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the internet and will be publicly available only in hard
copy. With the exception of such material, publicly available docket
materials are available electronically in Regulations.gov.
Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR-
2023-0330. The EPA's policy is that all comments received will be
included in the public docket without change and may be made available
online at https://www.regulations.gov/, including any personal
information provided, unless the comment includes information claimed
to be CBI or other information whose disclosure is restricted by
statute. Do not submit electronically to https://www.regulations.gov/
any information that you consider to be CBI or other information whose
disclosure is restricted by statute. This type of information should be
submitted as discussed below.
The EPA may publish any comment received to its public docket.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the Web, cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
The https://www.regulations.gov/ website allows you to submit your
comment anonymously, which means the EPA will not know your identity or
contact information unless you provide it in the body of your comment.
If you send an email comment directly to the EPA without going through
https://www.regulations.gov/, your email address will be automatically
captured and included as part of the comment that is placed in the
public docket and made available on the internet. If you submit an
electronic comment, the EPA recommends that you include your name and
other contact information in the body of your comment and with any
digital storage media you submit. If the EPA cannot read your comment
due to technical difficulties and cannot contact you for clarification,
the EPA may not be able to consider your comment. Electronic files
should not include special characters or any form of encryption and be
free of any defects or viruses. For additional information about the
EPA's public docket, visit the EPA Docket Center homepage at https://www.epa.gov/dockets.
Submitting CBI. Do not submit information containing CBI to the EPA
through https://www.regulations.gov/. Clearly mark the part or all of
the information that you claim to be CBI. For CBI information on any
digital storage media that you mail to the EPA, note the docket ID,
mark the outside of the digital storage media as CBI, and identify
electronically within the digital storage media the specific
information that is claimed as CBI. In addition to one complete version
of the comments that includes information claimed as CBI, you must
submit a copy of the comments that does not contain the information
claimed as CBI directly to the public docket through the procedures
outlined in Instructions above. If you submit any digital storage media
that does not contain CBI, mark the outside of the digital storage
media clearly that it does not contain CBI and note the docket ID.
Information not marked as CBI will be included in the public docket and
the EPA's electronic public docket without prior notice. Information
marked as CBI will not be
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disclosed except in accordance with procedures set forth in 40 Code of
Federal Regulations (CFR) part 2.
Our preferred method to receive CBI is for it to be transmitted
electronically using email attachments, File Transfer Protocol (FTP),
or other online file sharing services (e.g., Dropbox, OneDrive, Google
Drive). Electronic submissions must be transmitted directly to the
OAQPS CBI Office at the email address [email protected], and as
described above, should include clear CBI markings and note the docket
ID. If assistance is needed with submitting large electronic files that
exceed the file size limit for email attachments, and if you do not
have your own file sharing service, please email [email protected] to
request a file transfer link. If sending CBI information through the
postal service, please send it to the following address: OAQPS Document
Control Officer (C404-02), OAQPS, U.S. Environmental Protection Agency,
Research Triangle Park, North Carolina 27711, Attention Docket ID No.
EPA-HQ-OAR-2023-0330. The mailed CBI material should be double wrapped
and clearly marked. Any CBI markings should not show through the outer
envelope.
Preamble acronyms and abbreviations. Throughout this preamble the
use of ``we,'' ``us,'' or ``our'' is intended to refer to the EPA. We
use multiple acronyms and terms in this preamble. While this list may
not be exhaustive, to ease the reading of this preamble and for
reference purposes, the EPA defines the following terms and acronyms
here:
CAA Clean Air Act
CEDRI Compliance and Emissions Data Reporting Interface
CFR Code of Federal Regulations
D.C. Cir. the United States Court of Appeals for the District of
Columbia Circuit
EPA Environmental Protection Agency
FIP Federal Implementation Plan
HAP hazardous air pollutant(s)
MACT maximum achievable control technology
MM2A Major MACT to Area
MRR monitoring, recordkeeping, and reporting
NESHAP national emission standards for hazardous air pollutants
NMA National Mining Association
NSR New Source Review
NTTAA National Technology Transfer and Advancement Act
OIAI Once In, Always In
OMB Office of Management and Budget
PRA Paperwork Reduction Act
PSD prevention of significant deterioration
PTE potential to emit
RFA Regulatory Flexibility Act
RIA Regulatory Impact Analysis
SIP State Implementation Plan
TIP Tribal Implementation Plan
tpy tons per year
UMRA Unfunded Mandates Reform Act
Organization of this document. The information in this preamble is
organized as follows:
I. General Information
A. Does this rule apply to me?
B. Where can I get a copy of this document and other related
information?
II. Background
A. What is the statutory authority for this action?
B. History of PTE and Enforceability of Limits in the NESHAP
Program
C. History of Reclassifications in the NESHAP Program
III. Proposed Criteria for MM2A Reclassifications
A. Electronic Notification and Reclassification Effective Date
B. Sufficiency of Limits Taken To Reclassify
C. Ministerial Revisions From the 2020 MM2A Final Rule
D. What sources will have to ensure all new requirements are met
and when will those sources need to comply with the new
requirements?
IV. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 14094: Modernizing Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act (NTTAA)
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations and Executive Order 14096: Revitalizing Our Nation's
Commitment to Environmental Justice for All
I. General Information
A. Does this rule apply to me?
Categories and entities potentially impacted by this rule include
major sources of HAP that choose to take limitations to restrict their
potential to emit in order to reclassify from a major source of HAP to
an area source of HAP pursuant to the requirements in 40 CFR part 63,
subpart A, implementing section 112 of the CAA. This rule also would
impact those sources that have reclassified since January 25, 2018.
Federal, state, local, and tribal governments may be affected by
the proposed amendments, once promulgated, if their current programs do
not meet the requirements, and those jurisdictions choose to create
potential to emit (PTE) limiting mechanisms that allow sources located
within their jurisdiction to reclassify from major to area source
status under the NESHAP program. Section 112(l) of the CAA allows for
delegation of the implementation and enforcement of NESHAPs to state
and local air pollution control agencies and 40 CFR part 63, subpart E
contains the regulatory framework for such delegations. Per 40 CFR
63.90(e), programs approved under 40 CFR part 63, subpart E are
federally enforceable by the Administrator and citizens under the
CAA.\1\ Subpart E describes the types of delegations, including
straight delegations of NESHAPs (delegation of individual NESHAPs
without change), rule adjustment (delegation of individual NESHAPs with
changes), rule substitution (delegation of individual NESHAPs through
use of a state/local/tribal rule in place of the NESHAP), equivalence
by permit (alternative requirements and authorities that take the form
of permit terms and conditions for individual facilities instead of
source category regulations), and approval of programs that substitute
for CAA section 112 requirements (intended for mature air toxics
programs with many regulations affecting source categories regulated by
Federal section 112 standards). Subpart E describes the necessary
components for programs, timing of review and approval by the EPA, and
approval or disapproval process for such programs. If federally
enforceable HAP PTE limiting mechanisms do not exist in a state, that
state can choose to submit mechanisms according to one of the processes
provided in 40 CFR part 63, subpart E. In short, this process involves
a state submitting authorities to the EPA for review and approval to
use in lieu of CAA section 112 requirements. While the specific steps
involved in this process depend on the type of HAP PTE limiting
mechanism under consideration (e.g., the process for a straight
delegation is simpler than the state program approval process), the end
result is a federally enforceable mechanism that has been reviewed and
approved by the EPA. We are seeking comment on the potential burdens on
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states and regulated facilities related to the use of 40 CFR part 63,
subpart E by states for mechanisms to allow sources to reclassify from
major sources to area sources. We are also seeking comment on the time
needed should a state choose to submit programs for EPA review and
approval under subpart E in order to allow for sources to reclassify
from major sources to area sources where no such federally enforceable
programs currently exist. This proposal does not require any changes or
seek to alter in any way existing state-only enforceable PTE limiting
mechanisms that are not used for sources reclassifying from major
sources of HAP to area sources of HAP.
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\1\ This refers to the legal authority granted under the CAA
(i.e., under section 113 and section 304(a) of the statute) to the
EPA Administrator and citizens to enforce in Federal court all
limitations and conditions that implement requirements under the CAA
(e.g., issued under an approved program under section 112(l) of the
CAA or a SIP or another statute administered by the EPA.).
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The EPA is the permitting authority for issuing, rescinding, and
amending permits for sources in Indian country, with four
exceptions.\2\ Once promulgated, state, local, or tribal regulatory
authorities \3\ may receive requests to issue new permits or make
changes to existing permits for sources in their jurisdiction to
address the amended requirements.
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\2\ Two tribes have approved title V programs or delegation of
40 CFR part 71. The tribes may have sources that request to no
longer be covered by title V. Neither of these two tribes have
approved minor source permitting programs but may in the future. In
the meantime, the tribes will need to coordinate with the EPA, who
is the permitting authority in Indian country for these requests. In
addition, two other tribes has a major source that would be eligible
to request reclassification. If that source requests a new permit,
the tribe may issue the minor source permit, but the EPA would need
to be made aware of the request, as the EPA is the permitting
authority for title V.
\3\ The term regulatory authority is intended to be inclusive of
the federal, state, tribal, or local air pollution control agency
with authority to process reclassification requests and issuance of
enforceable PTE limits.
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B. Where can I get a copy of this document and other related
information?
In addition to being available in the docket, an electronic copy of
this action is available on the internet. Following signature by the
EPA Administrator, the EPA will post a copy of this proposed action at
https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112. Following publication in
the Federal Register, the EPA will post the Federal Register version of
the proposal and key technical documents at this same website.
A memorandum showing the rule edits that would be necessary to
incorporate the changes to 40 CFR part 63, subpart A proposed in this
action is available in the docket (Docket ID No. EPA-HQ-OAR-2023-0330).
The EPA also will post a copy of this document to https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112.
II. Background
A. What is the statutory authority for this action?
The statutory authority for this action is provided by section 112
of the CAA, as amended (42 U.S.C. 7401 et seq.). Section 112 of the CAA
requires the EPA to establish emissions standards for ``major sources''
and ``area sources'' of HAP to control and reduce their emissions.
Section 112(a)(1) defines major source, in relevant part, as ``any
stationary source or group of stationary sources located within a
contiguous area and under common control that emits or has the
potential to emit considering controls, in the aggregate, 10 tons per
year or more of any hazardous air pollutant or 25 tons per year or more
of any combination of hazardous air pollutants''; and 112(a)(2) defines
area source, in relevant part, as ``any stationary source of hazardous
air pollutants that is not a major source.'' 42 U.S.C. 7412(a)(1) and
(2).
For major sources, section 112 establishes a two-stage regulatory
process to develop standards to control HAP emissions. The first stage
requires the EPA to establish technology-based standards based on the
maximum achievable control technology (MACT). In this stage the EPA
must establish minimum standards based on best performing units in a
source category, referred to as the MACT floor, and evaluate whether
additional emission reductions are achievable based on the EPA's
consideration the cost of achieving such emission reduction, and any
non-air quality health and environmental impacts and energy
requirements, referred to as the beyond-the-floor analysis. The second
stage requires the EPA to evaluate residual risk from HAP after
implementation of the initial standards to determine whether
promulgation of additional standards is needed to provide an ample
margin of safety to protect public health or to prevent an adverse
environmental effect, referred to as the residual risk review; and
requires the EPA to evaluate developments in practices, processes, and
control technologies to determine if more stringent standards are
necessary, referred to as the technology review. Pursuant to CAA
section 112(f)(2), the EPA is required to perform residual risk reviews
within 8 years of promulgating initial standards; and pursuant to
section 112(d)(6), the EPA is required to perform the technology review
no less often than every 8 years.
For area sources, the EPA may elect to promulgate alternative
standards than those established for major sources that provide for the
use of generally available control technologies (GACT) or management
practices to reduce HAP emissions. Unlike MACT standards required for
major sources, GACT standards are not required to be updated pursuant
to residual risk reviews and unlike the MACT ``floor'' process, GACT
standards may consider costs when establishing the level of the
standard.
B. History of PTE and Enforceability of Limits in the NESHAP Program
The potential to emit (PTE) is key to the distinction between major
and area sources. PTE refers to the maximum capacity of a stationary
source to emit a pollutant under its physical and operational design
and is used to determine whether a source qualifies as a major or area
source. In 1994, the EPA promulgated the definition of PTE in the
General Provisions of the NESHAP at 40 CFR 63.2, which defined PTE in
terms based on the major source definition in section 112(a)(1) of the
CAA.\4\ As promulgated in 1994, the PTE definition states that PTE
``means the maximum capacity of a stationary source to emit a pollutant
under its physical and operational design. Any physical or operational
limitation on the capacity of the stationary source to emit a
pollutant, including air pollution control equipment and restrictions
on hours of operation or on the type or amount of material combusted,
stored, or processed, shall be treated as part of its design if the
limitation or the effect it would have on emissions is federally
enforceable.'' Under this definition, and consistent with section
112(a)(1), sources that would otherwise qualify as major sources are
able to obtain enforceable permit limitations from the EPA or delegated
authority containing physical or operational limits to bring their
emission below the major source threshold, referred to as synthetic
minor sources.
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\4\ CAA section 112(a)(1) defines major source, in relevant
part, as ``any stationary source or group of stationary sources
located within a contiguous area and under common control that emits
or has the potential to emit considering controls, in the aggregate,
10 tons per year or more of any hazardous air pollutant or 25 tons
per year or more of any combination of hazardous air pollutants.''
(emphasis added).
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In National Mining Association (NMA) v. EPA, 59 F.3d 1351 (D.C.
Cir. 1995), the D.C. Cir. remanded without vacatur the 40 CFR 63.2
definition to the EPA to justify the requirement that
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physical or operational limits on the capacity to emit a pollutant be
``federally enforceable,'' i.e., whether limits needed to be
enforceable by the EPA and citizen groups under the CAA or other
federal statutes. The NMA decision confirmed that the EPA has an
obligation to ensure that limits considered in determining a source's
PTE are effective, but it stated that the Agency had not adequately
explained how ``federal enforceability'' furthered effectiveness. 59
F.3d at 1363-1365.\5\
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\5\ Two additional cases addressing PTE in different CAA
programs were decided after National Mining. In Chemical
Manufacturers Ass'n v. EPA, No. 89-1514, 1995 WL 650098 (D.C. Cir.
Sept. 15, 1995), the court, in light of National Mining, vacated and
remanded to EPA the federal enforceability component in the
potential to emit definition in the PSD and NSR regulations (40 CFR
parts 51 and 52). In Clean Air Implementation Project v. EPA, No.
96-1224, 1996 WL 393118 (D.C. Cir. June 28, 1996), the court vacated
and remanded the federal enforceability requirement in the title V
regulations (40 CFR part 70). The CMA and the CAIP orders were
similar in that they contained no independent legal analysis, but
rather relied on the National Mining decision.
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After the NMA decision, the EPA extended a pre-existing
transitional policy allowing the use of non-federally enforceable
limits (e.g., state-only enforceable limits) for limiting PTE provided
those limits are legally enforceable and practicably enforceable.\6\
Legal enforceability means that the reviewing authority has the right
to enforce a limit or restriction. As the EPA explained in the
transitional policy, practicably enforceable means that limitations and
restrictions must be of sufficient quality and quantity to ensure
accountability, and specifically, for a permit provision to be
practicable enforceable it must specify ``(1) a technically-accurate
limitation and the portions of the source subject to the limitation;
(2) the time period for the limitation (hourly, daily, monthly,
annually); and (3) the method to determine compliance including
appropriate monitoring, recordkeeping and reporting.'' \7\
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\6\ See ``Third Extension of January 25, 1995 Potential to Emit
Transition Policy,'' from John S. Seitz and Eric V. Schaeffer to
Regional Offices (December 20, 1999). See also ``Options for
Limiting the Potential to Emit (PTE) of a Stationary Source Under
Section 112 and Title V of the Clean Air Act,'' from John S. Seitz
and Robert I. Van Heuvelen to Regional Offices (January 25, 1995);
``Extension of January 25, 1995, Potential to Emit Transition
Policy,'' from John S. Seitz and Robert I. Van Heuvelen to Regional
offices (August 27, 1997). Copies of these memoranda are available
in the docket for this action.
\7\ ``Options for Limiting the Potential to Emit (PTE) of a
Stationary Source Under Section 112 and Title V of the Clean Air
Act,'' from John S. Seitz and Robert I. Van Heuvelen to Regional
Offices (January 25, 1995)
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On March 23, 2001, the EPA added recordkeeping requirements for
applicability determinations for sources with a maximum capacity to
emit HAP in amounts greater than major source thresholds but with PTE
limits to avoid applicability of a standard.\8\ At that time, the EPA
also confirmed that until the rules are clarified to address various
PTE issues, consistent with the NMA Court decision, any determination
of HAP PTE under 40 CFR 63.2 should consider the regulations and also
take into consideration the EPA transition policy guidance memoranda.
66 FR 16342 (March 23, 2001).
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\8\ See 40 CFR 63.10(b)(3). These requirements became final
April 5, 2002. See 67 FR 16582 (April 5, 2002); see also, 66 FR
16342 (March 23, 2001).
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On November 19, 2020, the EPA issue a final rule titled
``Reclassification of Major Sources as Area Sources Under Section 112
of the Clean Air Act,'' 85 FR 73854 (referred to here as the 2020 MM2A
final rule), in which the EPA made an interim ministerial revision to
the definition of ``potential to emit'' in 40 CFR 63.2, which is
discussed further in section II.C.1. of this preamble. See 85 FR 73875
(November 19, 2020). Specifically, the Agency removed the word
``federally'' from the phrase ``federally enforceable'' that was in the
40 CFR 63.2 definition of ``potential to emit.''
C. History of Reclassifications in the NESHAP Program
1. What has happened to date in Section 112 of the CAA related to major
source reclassifications?
Shortly after the EPA began promulgating individual NESHAP
standards following the 1990 CAA Amendments, the Agency received
multiple requests to clarify when a major source of HAP could avoid CAA
section 112 requirements applicable to major sources by taking
enforceable limits on its PTE below the major source thresholds. In
response, the EPA issued a 1995 a memorandum \9\ that provided guidance
on three timing issues related to avoidance of CAA section 112
requirements for major sources:
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\9\ ``Potential to Emit for MACT Standards--Guidance on Timing
Issues,'' from John Seitz to the EPA Regional Air Division Directors
(May 16, 1995) (``1995 Seitz Memorandum'') (available in the docket
for this action).
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``By what date must a facility limit its PTE if it wishes
to avoid major source requirements of a MACT standard?''
``Is a facility that is required to comply with a MACT
standard permanently subject to that standard?''
``In the case of facilities with two or more sources in
different source categories: If such a facility is a major source for
purposes of one MACT standard, is the facility necessarily a major
source for purposes of subsequently promulgated MACT standards?''
In the 1995 Seitz Memorandum, the EPA stated our interpretation of
the relevant statutory language that facilities that are major sources
of HAP may switch to area source status at any time until the ``first
compliance date'' of the standard.\10\ Under this interpretation,
facilities that are major sources on the first substantive compliance
date of an applicable major source NESHAP were required to comply
permanently with that major source standard even if the source was
subsequently to become an area source by limiting its PTE. This
position was commonly referred to as the ``Once In, Always In'' (OIAI)
policy. The 1995 Seitz Memorandum provided that a source that is major
for one MACT standard would not be considered major for a subsequent
MACT standard if the source's potential to emit HAP emissions was
reduced to below major source levels by complying with the first major
source MACT standard. In the 1995 Seitz Memorandum, the EPA set forth
transitional policy guidance that was intended to remain in effect only
until the Agency proposed and promulgated amendments to the 40 CFR part
63 General Provisions.
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\10\ The ``first substantive compliance date'' is defined as the
first date a source must comply with an emission limitation or other
substantive regulatory requirement (i.e., leak detection and repair
programs, work practice measures, etc., but not a notice
requirement) in the applicable standard.
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The expressed basis for the OIAI policy was that it would help
ensure that required reductions in HAP emissions were maintained over
time in a way that was consistent with the language and structure of
the statute, and would avoid compromising the emissions reductions that
Congress mandated major source to achieve.\11\ The EPA explained at the
time that because the CAA did not directly address a deadline for a
source to avoid requirements applicable to major sources through a
reduction of potential to emit, the EPA viewed the OIAI policy as
consistent with ``the language and structure of the Act . . . that
sources should not be allowed to avoid compliance with a standard after
the compliance date, even through a reduction in potential to emit.''
\12\
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\11\ See 1995 Seitz Memorandum at 9 (``A once in, always in
policy ensures that MACT emissions reductions are permanent, and
that the health and environmental protection provided by MACT
standards is not undermined.'').
\12\ Id. at 6.
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Since issuing the OIAI policy, the EPA has twice proposed
regulatory
[[Page 66341]]
amendments that would have altered the OIAI policy. In 2003, the EPA
proposed amendments that focused on HAP emissions reductions resulting
from pollution prevention activities but did not finalize the proposed
changes relevant to the OIAI policy. See 68 FR 26249 (May 15, 2003); 69
FR 21737 (April 22, 2004).
In 2007, the EPA proposed to replace the OIAI policy set forth in
the 1995 Seitz Memorandum. 72 FR 69 (January 3, 2007). In that
proposal, the EPA proposed that a major source that is subject to a
major source MACT standard would no longer be subject to that standard
if the source were to become an area source through an enforceable
limitation on its PTE for HAP. Under the 2007 proposal, major sources
could take such limits on their PTE and obtain ``area source'' status
at any time and would not be required to have done so before the
``first compliance date,'' as the OIAI policy provided. Id. at 70
(``The regulatory amendments proposed today, if finalized, would
replace the 1995 OIAI policy and allow a major source of HAP emissions
to become an area source at any time by limiting its PTE for HAP below
the major source thresholds.'').
Many commenters supporting the 2007 proposal expressed the view
that, by imposing an artificial time limit on major sources obtaining
area source status, the OIAI policy created a disincentive for sources
to implement voluntary pollution abatement and prevention efforts, or
to pursue technological innovations that would reduce HAP emissions
further. Stakeholders commented to the EPA that the definitions in CAA
section 112(a) contain a single factor for distinguishing between major
source and area source--the amount of HAP the source ``emits'' or ``has
the potential to emit.'' Commenters further stated that the temporal
limitation imposed by the OIAI policy was inconsistent with the CAA and
created an arbitrary date by which sources must determine whether their
HAP PTE will exceed either of the major source thresholds. Other
commenters opposed the 2007 proposal, arguing that it would contravene
Congress's intent in developing section 112 of the CAA, lead to
backsliding in performance of pollution controls and resulting health
protections from sources no longer subject to MACT standards, and
lacked sufficient rationale to justify overturning long-standing EPA
policy regarding major and area sources. The EPA never took final
action on the 2007 proposal, and it was later superseded and replaced.
Comments on the lack of a temporal distinction in defining major
sources and area sources were re-emphasized in comments received per
Executive Order 13777, Enforcing the Regulatory Reform Agenda (February
24, 2017), and the Presidential Memorandum on Streamlining Permitting
and Reducing Regulatory Burdens for Domestic Manufacturing (January 24,
2017).
On January 25, 2018, the EPA issued a memorandum from William L.
Wehrum, Assistant Administrator of the Office of Air and Radiation, to
the EPA Regional Air Division Directors titled ``Reclassification of
Major Sources as Area Sources Under Section 112 of the Clean Air Act''
(MM2A Memorandum) withdrawing the OIAI policy.\13\ The MM2A Memorandum
discussed the statutory provisions that govern when a major source
subject to major source NESHAP requirements under section 112 of the
CAA may be reclassified as an area source, and thereby avoid being
subject thereafter to major source NESHAP requirements and other
requirements applicable to major sources under CAA section 112. In the
MM2A Memorandum, the EPA discussed the language of CAA section 112(a)
regarding Congress's definitions of ``major source'' and ``area
source,'' and determined that the OIAI policy articulated in the 1995
Seitz Memorandum was contrary to the plain language of the CAA and,
therefore, must be withdrawn.
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\13\ See notice of issuance of this guidance memorandum at 83 FR
5543 (February 8, 2018).
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In the MM2A Memorandum, the EPA announced the future publication of
a proposed rule to receive input from the public on adding regulatory
text consistent with the reading of the statute as described in the
MM2A Memorandum. On July 26, 2019, the EPA proposed regulatory text to
implement the reading of the statute as discussed in the MM2A
Memorandum.\14\ The 2019 proposal superseded and replaced the 2007
proposal.\15\
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\14\ See 84 FR 36304 (July 26, 2019).
\15\ See 72 FR 69 (January 3, 2007).
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The 2019 MM2A proposal also addressed questions received after the
issuance of the 2018 MM2A Memorandum. In the comments on the 2007 and
2019 proposals, many stakeholders asserted that the implementation of
this reading and withdrawal of the OIAI policy would create incentives
for stationary sources that have reduced HAP emissions to below major
source thresholds to reclassify to area source status by taking
enforceable PTE limits and reduce their compliance burden. These
stakeholders also stated that sources with emissions above major source
thresholds after complying with CAA section 112 major source
requirements could be encouraged to evaluate their operations and
consider additional changes that can further reduce their HAP emissions
to below the major source thresholds. Other stakeholders raised the
concern that allowing sources to reclassify could potentially result in
emission increases from sources that have reduced their actual
emissions to below the major source thresholds because they have had to
comply with major source NESHAP requirements. Some stakeholders
contended that federal safeguards (i.e., conditions on reclassification
requiring that sources limit emissions to at least the level of control
achieved under the major source NESHAP) were required to ensure that
the emissions did not increase from sources that reclassified. They
noted that some states cannot implement air pollution control
requirements that are not derived from Federal regulations, while other
stakeholders asserted that only those major sources that had reduced
emissions through pollution prevention or removal of equipment should
be allowed to reclassify.
Other stakeholders, generally opposed to requiring safeguards,
questioned the legal basis for establishing safeguards that would
restrict emissions from area sources. These stakeholders stated that
the EPA holds no regulatory authority to prohibit or regulate emissions
increases from area sources unless EPA lists these area sources under
CAA section 112 and then develops standards, or if area sources exceed
the major source threshold. They stated that CAA section 112 contains
no restrictions on the gross quantity of emissions emitted from any
major or area sources, nor does it outright prohibit stationary sources
from undertaking activities that increase emissions.
In the 2019 proposal, the EPA proposed specific criteria that PTE
limits must meet for these limits to be effective. The EPA also
proposed to amend the definition of ``potential to emit'' in 40 CFR
63.2 by removing the requirement for federally enforceable limits and
requiring instead that limits meet the effectiveness criteria of being
both legally enforceable and practicably enforceable. The EPA also
proposed to amend 40 CFR 63.2 to include the definitions of ``legally
enforceable'' and ``practicably enforceable'' described in the MM2A
proposal. The EPA then took comment on the effectiveness criteria and
the proposed amendments to 40 CFR 63.2.
[[Page 66342]]
The EPA received significant comments from many stakeholders on the
proposed effectiveness criteria and proposed amendments to 40 CFR 63.2.
One of the main concerns raised by stakeholders in their comments was
the interactions and effects of the proposed amendments with other CAA
programs, including Prevention of Significant Deterioration (PSD), New
Source Review (NSR), State Implementation Plan (SIP), and title V
operating permits, and the impacts of the proposed amendments to
existing state, local, and tribal agency rules.
The EPA published the 2020 MM2A final rule (85 FR 73854) on
November 19, 2020, which formalized the withdraw of the OIAI policy
first introduced in the 2018 MM2A Memorandum. The EPA did not take
final action on the proposed amendments to 40 CFR 63.2 as it was still
considering the comments received on the proposed effectiveness
criteria and proposed amendments to 40 CFR 63.2. In the final MM2A
rule, the EPA expressed its intention to take action on this aspect of
the MM2A proposal in a separate action at a later date. However, as
part of the final MM2A rule, the EPA made an interim ministerial
revision to the definition of ``potential to emit'' in 40 CFR 63.2.
Specifically, the Agency removed the word ``federally'' from the phrase
``federally enforceable'' that was in the 40 CFR 63.2 definition of
``potential to emit.''
The EPA explained that this interim ministerial revision was not
the EPA's final decision and should not be read to suggest that the EPA
was leaning towards or away from any particular final action on this
aspect of the MM2A proposal. The revision was an interim revision to
cover the period of time while the EPA continued to consider the
comments on this aspect of the MM2A proposal and until the Agency takes
final action with respect to the proposed effectiveness criteria and
proposed amendments to 40 CFR 63.2. The EPA asserted that this revision
was ministerial because it merely reflected the NMA decision, which
held that the EPA had not explained why a PTE limit had to be
``federally enforceable'' to be considered as the basis for
reclassifying a major source to area source status. See NMA v. EPA, 59
F.3d at 1363-1365.\16\ So, for the reasons explained in the final MM2A
rule preamble, the revision to the PTE definition did not represent a
final decision by the EPA.
---------------------------------------------------------------------------
\16\ See note 6, supra.
---------------------------------------------------------------------------
Further, the interim ministerial revision did not alter any rights
or legal consequences and simply preserved the status quo that has been
in effect since the late 1990s. The EPA expressly said that the interim
ministerial revision did not change how the EPA applies the
transitional policy that the Agency has been following since 1995. This
transitional policy allows for any physical or operational limitation
on the capacity of the stationary source to emit a pollutant (such as
air pollution control equipment and restrictions on hours of operation
or on the type or amount of material combusted, stored, or processed)
to be treated as part of its design if the limitation or the effect it
would have on emissions is federally enforceable or legally enforceable
by a state or local permitting authority and practicably enforceable.
The final MM2A rule became effective on January 19, 2021.
A significant concern raised during the 2020 MM2A rulemaking is
that under the current MM2A framework, sources with adjustable controls
can obtain PTE limits just below the major source thresholds to
reclassify from major source status to area source status and reduce
their control efficiency to reduce operational costs, and subsequently
increase emissions, in a manner that would not have been allowed under
the major source NESHAP. This possibility stems from the differences in
stringency in major source rules compared to area source rules for the
same source category. In short, major source NESHAPs require MACT
standards that reduce emissions from all major sources in a category to
the levels achieved by the best performers. In contrast, NESHAP
standards for area sources allow for the use of GACT standards that
often require less control of HAP than the corresponding MACT standards
for major sources. In addition, GACT standards typically apply to a
select group of HAP, known as urban HAP, rather than all listed HAP.
Finally, unlike the residual risk requirements for sources subject to
MACT standards, there is no requirement for the EPA to evaluate the
public health risk that remains after implementation of GACT standards.
These differences are most concerning for major source categories for
which the area source NESHAP applies to fewer emission points and
regulates fewer HAP than the major source rule or for which there is no
NESHAP applicable to area sources at all. The current MM2A framework
does not provide clear requirements for sources reclassifying in a
source category with less stringent or no requirements for area
sources, creating inconsistencies between sources in a given category
based on their decision to reclassify or not, between sources across
source categories based on the existence and stringency of area source
NESHAPs, and between sources based on the robustness of the state or
local regulations in the area where they are located.
2. What is Executive Order 13990 and how does it impact this proposal?
On January 20, 2021, President Biden issued Executive Order 13990
Protecting Public Health and the Environment and Restoring Science to
Tackle the Climate Crisis. This E.O. called for the EPA to review
actions taken during the prior four years and, as appropriate, consider
suspending, revising, or rescinding actions that did not align with the
Administration's policy to listen to the science; to improve public
health and protect our environment; to ensure access to clean air and
water; to limit exposure to dangerous chemicals and pesticides; to hold
polluters accountable, including those who disproportionately harm
communities of color and low-income communities; to reduce greenhouse
gas emissions; to bolster resilience to the impacts of climate change;
to restore and expand our national treasures and monuments; and to
prioritize both environmental justice and the creation of the well-
paying union jobs necessary to deliver on these goals.
III. Proposed Criteria for MM2A Reclassifications
In this action the EPA is proposing to update electronic reporting
requirements for sources that reclassify from major to area sources,
and to add requirements for sources to reclassify from major source to
area source status to improve the effectiveness of PTE limits for these
sources. Specifically, the EPA proposes to require safeguards to ensure
that reclassified sources cannot increase their emissions as a result
of reclassification, and to require PTE limits for reclassified sources
be federally enforceable (i.e., enforceable by the EPA and citizens
under the CAA or other federal statute). The EPA is proposing these
additional criteria for reclassified sources, because of the EPA's
particular concern with this subset of sources which may be able to
increase emissions as a result of reclassification.
A. Electronic Notification and Reclassification Effective Date
To provide information to the EPA and the public, 40 CFR 63.9(b)
requires sources to notify the EPA when a source becomes subject to a
relevant standard
[[Page 66343]]
and 40 CFR 63.9(j) requires sources to notify the Administrator when
there is a change in the information previously submitted to the EPA.
The notification requirements of 40 CFR 63.9(j) apply to those sources
that reclassify from major source to area source status under CAA
section 112 (e.g., by taking production or operation limits to reduce a
source's HAP emissions below the applicability threshold). Sources that
reclassify are currently required to notify the EPA within 15 days
after reclassification. The required notification must include
information on the standard the source was reclassifying from and to
(if applicable), along with the effective date of the reclassification.
To ensure the availability of this information, the EPA requires
electronic submission of such notifications. Sources that reclassify to
area source status by taking limits to reduce HAP emissions are also
currently required under 40 CFR 63.10 to keep records of applicability
determinations on-site. We are clarifying that reclassifications that
occur after the effective date of this action will be effective upon
the date of electronic submittal of the notification to the EPA. This
clarification will ensure that sources submit the required notification
to the EPA when reclassification occurs. We have become aware of some
sources that have reclassified and the required reclassification has
not been submitted through CEDRI. In order to prevent this from
continuing, we have determined that reclassifications will not be
considered effective until notification has been submitted to the EPA.
Sources that have already reclassified or reclassify prior to the
effective date of this action and have not submitted the required
electronic notification must submit electronic notification of
reclassification to the EPA within six months of the effective date of
this action. Reclassified sources that have already submitted
electronic notification to the EPA do not need to resubmit the
notification. The EPA expects these notification and recordkeeping
requirements under 40 CFR part 63 will assist the EPA in its oversight
role under the CAA and be of minimal burden to the regulated community.
Additionally, we are proposing to clarify the original intent of
the language in 40 CFR 63.9(j) allowing the use of the application for
reclassification to fulfill the requirements of notification to more
clearly indicate that it must be submitted to the Compliance and
Emissions Data Reporting Interface (CEDRI) and contain the information
required in 40 CFR 63.9(j)(1) through (4). We are also proposing to
update the procedures for submittal of confidential business
information to include electronic submittal procedures.
B. Sufficiency of Limits Taken To Reclassify
In this proposal, the EPA is revisiting the sufficiency of
restrictions on PTE relied upon for reclassification, i.e., what a
source must do to be able to reclassify. The EPA proposes to require
(1) additional criteria that a PTE limit must meet before it can serve
as the basis for reclassification from major to area for CAA section
112 purposes and (2) federal enforceability of permit limits that are
taken by sources to reclassify from major to area source status. The
proposed additional criteria for PTE (referred to here as
``safeguards'') would require a determination that a source
reclassifying from major to area source status will not emit beyond
what would have been allowed had the source maintained major source
status. Federal enforceability would ensure that the EPA and citizens
are able to enforce those permit limits taken to reclassify in federal
court under the Clean Air Act or other statutes administered by the
EPA. In proposing these changes, the EPA seeks to ensure that the
opportunity for sources to reclassify from major to area for purposes
of CAA section 112 does not undermine the emissions reductions intended
by that program.
Hazardous air pollutants pose public health risks at levels well
below the major source thresholds (10/25 TPY), at times in very small
quantities. Congress understood this fact in enacting CAA section 112
by directing the EPA to further reduce or eliminate HAP emissions where
possible.\17\ Further, the EPA shares the concerns raised by commenters
on the MM2A rulemaking that sources with adjustable controls that can
reclassify by reducing emissions just below the major source threshold
could subsequently increase emissions under less stringent, or
nonexistent, area source regulations for a given source category. For
example, if a major source standard had the effect of reducing
emissions of a certain pollutant to 1 ton per year but there is no
corresponding area source standard for the same source category, then a
source could take a PTE limit of 9.9 tons per year of a single HAP or
24.9 tons per year of combined HAP emissions, thus increasing its
emissions, and reclassify under the 2020 MM2A final rule. Indeed, every
source in this hypothetical source category could do the same. In order
to protect the public from the health risks of HAPs, and based on
Congress' intent to reduce harmful HAP emissions and regulate to the
maximum extent achievable, the EPA proposes enhanced oversight,
compliance assurance, and that national consistency be required for the
reclassified sources via safeguards and federal enforceability of
restrictions or limitations taken to otherwise avoid applicable
requirements as a major source of HAPs under Part 63 to ensure such
concerning scenarios do not occur.
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\17\ CAA section 112(a)(1) in defining ``major source'' provides
that the EPA may establish a ``lesser quantity'' threshold for major
sources ``on the basis of the potency of the air pollutant,
persistence, potential for bioaccumulation, other characteristics of
the air pollutant, or other relevant factors.'' In addition, CAA
section 112(d)(2) directs the EPA in promulgating emission standards
to ``require the maximum degree of reduction in emissions of the
hazardous air pollutants subject to this section (including a
prohibition on such emissions, where achievable)[.]''
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In prior rulemakings and guidance, the EPA has discussed the timing
of when a source can reclassify from major to area source. Most
recently in the 2020 MM2A rule, the EPA adopted the position that the
lack of a temporal limitation on whether a source qualifies as a major
source under CAA section 112(a)(1) refuted the EPA's earlier OIAI
policy. The EPA does not propose to reopen that conclusion here.
However, as the EPA discussed in the 2019 proposal to the MM2A rule, in
addition to the timing of reclassification there is a separate question
as to the sufficiency of the PTE limit taken to reclassify.
The sufficiency of limitations on PTE taken to reclassify from
major to area source status is governed by the definitions of ``major
source'' and ``area source'' in CAA section 112(a)(1) and (2). Major
sources are defined, in relevant part, as sources that can emit or have
the potential to emit ``considering controls,'' 10 tons per year or
more of any hazardous air pollutant or 25 tons per year or more of any
combination of hazardous air pollutants. Area sources are in turn
defined as any stationary source of hazardous air pollutants that is
not a major source. Therefore, in determining what qualifies as an area
source the EPA must consider the major source definition and how to
``consider controls'' the facility would rely upon to justify its
status as an area source. The EPA proposes the most appropriate
interpretation of ``considering controls'' is one that, on the one
hand, does not undermine the purposes of CAA section 112 by allowing
sources to potentially increase HAP emissions while on the other hand
also recognizes that the statute does not place an absolute time limit
on the opportunity to reclassify.
[[Page 66344]]
The former concern was first articulated in the 1995 OIAI policy, the
latter in the 2018 MM2A policy and subsequent rulemaking.
Today's proposal seeks to reconcile these objectives by recognizing
that a facility subject to a MACT standard may reclassify at any time,
while requiring a determination by the state or local permitting
authority that doing so will not undermine the emissions reductions
entailed by the MACT standard, and further ensuring limits taken to
reclassify are effective by allowing for federal and citizen
enforcement. The EPA proposes the best interpretation of the term
``considering controls'' in the definition of ``major source'' in CAA
section 112 allows for this reconciliation. Specifically, the EPA is
proposing that for a facility seeking to reclassify from major to area
source status for purposes of a particular MACT standard, the
``controls'' that are determinative are those that are proven to be at
least as effective at reducing emissions as the MACT standard to which
the facility has been subject, and which are subject to federal
enforcement as defined in 40 CFR 63.2.
This interpretation of CAA section 112(a)(1) is consistent with the
D.C. Circuit decision NMA v. EPA, which recognized the word
``controls'' commonly refers to governmental restrictions but is
ambiguous as used in the major source definition. 59 F.3d 1351, 1362
(D.C. Cir. 1995) (``It is common ground that Congress meant the word
`controls' to refer to governmental regulations and not, for instance,
operational restrictions that an owner might voluntarily adopt. (We
note, however, that the word could be read that broadly, which
certainly supports the government's position that the term is not clear
on its face.)''). Accordingly, in assessing a reclassified source, the
EPA would determine whether safeguards and the enforceability of limits
taken to reclassify, or governmental restrictions, are sufficient for
the source to no longer qualify as a major source.
In considering the term ``controls,'' the NMA court settled on the
touchstone of ``effectiveness,'' faulting the EPA for not adequately
explaining the relationship of federal enforceability to that core
criterion. The Court explained that the EPA was ``not obliged to take
into account controls that are only chimeras and do not really restrain
an operator from emitting pollution[,]'' 59 F.3d at 1362, but that the
EPA's determination of what constitutes appropriate ``controls'' should
be tied to how well a limit actually restrains a facility's operations
in accordance with CAA section 112. Today's proposal is based on this
concept of ``effectiveness,'' and specifically on the reasoning that a
limit taken to avoid a MACT standard to which a facility is already
subject to cannot be considered an ``effective'' control if it results
in the facility emitting more than it would have under the MACT
standard. The EPA is also proposing that the enhanced effectiveness
brought about by federal enforceability justifies the requirement that
limits taken to avoid a MACT standard be federally enforceable. That
is, the EPA is bolstering the effectiveness of PTE limits for
reclassified sources by requiring sources to maintain historical
emission reductions, and increasing the scope of enforcement to ensure
PTE limits are met. The proposal thus employs the concept of
``effectiveness'' to avoid eroding the purposes of the Act, while
recognizing the flexibility the EPA continues to believe exists for
facilities to reclassify from major to area status for purposes of a
MACT standard.
Today's proposal is also consistent with the purpose of the CAA in
general and CAA section 112, in particular. The CAA is intended ``to
protect and enhance the quality of the Nation's air resources so as to
promote the public health and welfare and the productive capacity of
its population.'' CAA section 101(b)(1). CAA section 112 was revised
with the 1990 Clean Air Act Amendments after Congress was frustrated
with the EPA's slow pace of regulation for sources of hazardous air
pollutants, which Congress recognized as a serious public health
concern.\18\ In enacting CAA section 112, Congress set a broad
statutory purpose to reduce the volume of HAP emissions with the goal
of reducing the risk from HAP emissions to a level that is protective
of even the most exposed and most sensitive subpopulations.\19\
Congress therefore established a program for major and area sources
that would lead to continued reductions of HAP by requiring the EPA to
set technology-based MACT standards pursuant to CAA section 112(d)(2)
and (3), to perform risk reviews under CAA section 112(f)(2) and to
update MACT standards where they fail to provide an ample margin of
safety, and to perform technology reviews pursuant to CAA section
112(d)(6) to review and update, as necessary, MACT and GACT standards
based on new developments in pollution control technology. Relatedly,
CAA section 112(c)(6) required the EPA to identify and ensure emissions
standards were in place for source categories that emit specific,
particularly harmful HAP, and which were not initially covered
following promulgation of the 1990 Clean Air Act Amendments. The
structure of CAA section 112 thus includes specific points at which
progress towards public health goals are to be assessed. These
assessments depend in no small part on the extent to which major
sources of HAP are regulated by MACT standards. While Congress did not
speak directly to reclassification from major to area sources, the EPA
proposes to find it would be contrary to the emission reduction and
health protection objectives of the CAA and CAA section 112 to allow
sources to increase their emissions after reclassification. Doing so
would serve to diminish as opposed to enhance air quality and could
potentially lead to increased HAP emissions and thus increased public
health risk from exposure. Moreover, CAA section 112(d)(2) directs the
EPA in promulgating emission standards to ``require the maximum degree
of reduction in emissions of the hazardous air pollutants subject to
this section (including a prohibition on such emissions, where
achievable)[.]'' If a facility subject to the controls of a major
source NESHAP can remove those controls by reducing its PTE to below
the 10/25 TPY threshold, this substantially reduces the likelihood that
Congress' objective of prohibiting emissions can be achieved.
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\18\ See H.R. Rep. No. 101-490, at 315 (1990) (``In theory,
[hazardous air pollutants] were to be stringently controlled under
the existing Clean Air Act section 112. However, . . . only 7 of the
hundreds of potentially hazardous air pollutants have been regulated
by EPA since section 112 was enacted in 1970.''); id. at 151 (noting
that in 20 years, the EPA's establishment of standards for only
seven HAP covered ``a small fraction of the many substances
associated . . . with cancer, birth defects, neurological damage, or
other serious health impacts.'')
\19\ For example, CAA section 112(f)(2) requires the EPA to
promulgate standards under the risk review if necessary to ``reduce
lifetime excess cancer risks to the individual most exposed to
emissions from a source in the category or subcategory to less than
one in one million.'' CAA section 112(f)(2). Similarly, the listing
and delisting provisions in CAA section 112 focus on any adverse
effects to human health, evidencing Congress' concerns with
protecting even the most exposed individuals. See e.g., CAA section
112(b) and (c). For further discussion of how the statutory design
of CAA section 112 is meant to quickly secure large reductions in
HAP emissions from stationary sources and Congress' direction to the
EPA emphasize that the EPA should regulate with the most exposed and
most sensitive members of the population in mind in order to achieve
acceptable levels of HAP emissions see 88 FR 13956, 13963-13966
(March 6, 2023).
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This proposed framework would not apply to a source that has taken
restrictions to limit PTE (i.e., a synthetic minor source) before the
source's first
[[Page 66345]]
compliance date of the applicable major MACT standard. The proposed
sufficiency criteria for sources that reclassify from major sources to
area sources (i.e., safeguards and federal enforceability) would be
applicable to reclassified synthetic minor sources, that is sources
that are or were subject to a major source NESHAP, have PTE over the
major source threshold, and are taking a restriction so as to limit the
PTE below the major source threshold. This proposed framework would not
apply, however, to reclassified ``true'' minor sources--that is sources
that modify operations such that they are no longer capable of emitting
above the major source threshold; nor would it apply to sources that
were never subject to a major source NESHAP. The EPA is specifically
requesting comment on whether it is appropriate to differentiate
between reclassified synthetic minor and true minor sources,
particularly given the proposed justification in this proposal.
This proposal for the EPA to introduce safeguards and federal
enforceability for sources that reclassify from area to major source
status also differs from the EPA's former OIAI policy because it would
continue to allow sources to reclassify consistent with the 2020 MM2A
final rule; however, this proposal would introduce conditions that
apply to reclassified sources through their permitting authority. The
intent is to create flexibility to meet emission reduction goals that
did not exist under the OIAI policy while preventing the potential
emissions increases allowed under the current MM2A framework.
Further, the EPA seeks comment on its proposed interpretation of
``considering controls'' to ensure limits taken by sources to
reclassify are sufficiently protective.
1. Safeguards
The EPA is proposing that for those sources that reclassify from
major source to area source status under the NESHAP program, any limits
relied upon as limiting PTE for operations subject to the NESHAP must
ensure emissions do not increase beyond what would have been allowed if
the reclassifying source had continued to be subject to the major
source NESHAP. The proposed safeguards will apply to sources that
reclassify after the effective date of this action, as well as those
that have reclassified since the 2018 Wehrum memorandum.
Specifically, we are proposing to codify in a new paragraph, 40 CFR
63.1(c)(6)(iv), that any federally enforceable HAP PTE limitations
taken by a major source to reclassify to area source status must
include one of the following control methods or a combination: (1)
continue to employ the emission control methods (e.g., control device
and/or emission reduction practices) required under the major source
NESHAP requirements, including previously approved alternatives under
the applicable NESHAP and associated monitoring, recordkeeping, and
reporting (MRR); (2) control methods prescribed for reclassification
under a specific NESHAP subpart; or (3) emission controls that the
permitting authority has reviewed and approved as ensuring the
emissions of HAP from units or activities previously covered will not
increase above the emission standard or level that was acceptable under
the major source NESHAP requirements at the time of reclassification.
The record of the permitting authority decision should identify the
units and methods and include the data and analysis as well as the
determination that MRR is adequate to assure compliance.
The EPA proposes the introduction of safeguards, coupled with
federal enforceability, will help to ensure the NESHAP program
continues to reduce emissions over time, and that sources subject to
the NESHAP program are not able to increase their emissions beyond what
the major source NESHAP would have allowed as a result of
reclassification and/or evade permit limits that would otherwise
prevent them from doing so. The EPA proposes safeguards are needed due
to differences in EPA and state requirements for certain types of major
and area NESHAP sources, which creates instances where it is feasible
that two identical sources within a source category could have
significantly different emissions requirements for a given pollutant if
one remains a major source and the other reclassifies as an area
source. This is particularly true in instances where there are no area
source requirements for certain industries.
Under this proposed definition, state and local permitting
authorities would be charged with ensuring permitting limits taken for
sources to reclassify from major to area source satisfy one of the
three criteria listed above. That is, the permitting authority will
determine that emissions for a reclassified source will not be above
what they would have been had the source remained subject to the major
source NESHAP. The EPA continues to consider and seeks comment on the
specifics of how state and local permitting authorities should
implement this definition and make such determinations. We are
soliciting comments on whether the determination that a source will not
emit above what would have been allowed under the major source NESHAP
must be based on the same units of measure as the NESHAP had been
(e.g., tons per year vs. pounds per hour). This will largely be a case-
by-case decision that will rest partly on the type of measurements
used, the method of control, and quantity of emissions in question. We
are also soliciting comment on whether sources should be required to
continue to comply with a specific emissions limit using a specific
type of control, especially for sources subject to major source NESHAPs
that allow for different control options. We are seeking comment on how
to best structure safeguards to ensure that flexibility is provided to
permitting authorities making these determinations to allow for
improvements in control technology effectiveness or efficiency without
compromising the emissions reductions achieved by the NESHAP.
The EPA is seeking comment on additional benefits or drawbacks of
safeguards for NESHAP reclassifications. The EPA is also seeking
comment on other criteria that will improve the process by which
sources apply for, and the permitting authority approves, enforceable
permit conditions containing safeguard provisions.
In light of the special attention Congress paid to specific
pollutants \20\ in section 112(c)(6) of the CAA, we are specifically
seeking comment on whether additional restrictions are warranted for
source categories that are subject to MACT standards for the persistent
and bioaccumulative HAP listed pursuant to CAA section 112(c)(6). We
believe the proposed safeguards are sufficient to prevent emissions
increases but we are seeking comment on whether any of the following
additional restrictions are warranted to achieve Congress's directive
that source categories emitting these HAP are subjected to MACT
standards under CAA section 112(d)(2) or (d)(4). The first possible
restriction we are seeking comment on is one that
[[Page 66346]]
would prevent any sources \21\ subject to a major source NESHAP used to
reach the EPA's 90 percent threshold for any of the CAA section
112(c)(6) HAP from reclassifying from major source status to area
source status. Another restriction we are considering and seeking
comment on is one that would require sources subject to a major source
NESHAP to remain subject to the major source NESHAP for emissions of
the section 112(c)(6) HAP while allowing those sources source to
reclassify and no longer remain subject to the major source NESHAP for
emissions of non-112(c)(6) HAP. Finally, we are considering a
restriction that would allow such sources to reclassify but would only
allow them to use the proposed option in 40 CFR 63.(1)(c)(6)(iv) that
requires a source to ``continue to employ the emission control methods
(e.g., control device and/or emission reduction practices) required
under the major source NESHAP requirements, including previously
approved alternatives under the applicable NESHAP and associated
monitoring, recordkeeping, and reporting (MRR)''. We are seeking
comment on all of these additional criteria and any other restrictions
on sources or source categories emitting 112(c)(6) HAP that may be
warranted.
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\20\ CAA section 112(c)(6) states, in part: ``With respect to
alkylated lead compounds, polycyclic organic matter,
hexachlorobenzene, mercury, polychlorinated biphenyls, 2,3,7,8-
tetrachlorodibenzofurans and 2,3,7,8-tetrachlorodibenzo-p-dioxin,
the Administrator shall, not later than 5 years after November 15,
1990, list categories and subcategories of sources assuring that
sources accounting for not less than 90 per centum of the aggregate
emissions of each such pollutant are subject to standards under
subsection (d)(2) or (d)(4).''
\21\ See EPA-HQ-OAR-2004-0505-0010 for a list of source
categories and corresponding NESHAP subparts used to reach the 90%
threshold. See table 1.1 of EPA-HQ-OAR-2004-0505-0006 for the
112(c)(6) emission inventory.
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2. Federal Enforceability
In addition to safeguards, the EPA also proposes that limits taken
by sources to reclassify from major to area sources must be federally
enforceable as a condition of reclassification.\22\ Specifically, we
are proposing to codify in a new paragraph, 40 CFR 63.1(c)(6)(iii),
that, as a condition of reclassification, any PTE limitations taken by
a major source to reclassify to area source status must be federally
enforceable. The general definition of PTE under 40 CFR 63.2 would not
be affected by this proposal to codify a new provision specific to
reclassified sources, and as discussed in the following subsection, the
EPA proposes to maintain interim revisions introduced to the general
definition in the 2020 MM2A final rule. That is, under this proposal,
sources that reclassify from major to area source status, would need to
take federally enforceable limitations on PTE as a condition of
reclassification. However, all other NESHAP sources would continue to
be governed by the general PTE definition under 40 CFR 63.2, which does
not require federal enforceability.
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\22\ 40 CFR 63.2 defines ``federally enforceable'' in relevant
part as ``all limitations and conditions that are enforceable by the
Administrator and citizens under the Act or that are enforceable
under other statutes administered by the Administrator.''
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As discussed above, in NMA v. EPA, the D.C. Circuit faulted the EPA
for not adequately explaining the relationship of federal
enforceability to the core criteria of ``effectiveness.'' In that case,
the EPA argued that federal enforceability allowed the EPA to verify
that a source's claimed controls were working as they were supposed to,
and that federal enforceability provided the EPA with the means to
ensure that any operational restrictions intended to limit emissions
were actually implemented. In response to these arguments, the NMA
Court found ``EPA's core justification for its federal enforceability
policy [was] the need to avoid the administrative burden that EPA would
have to bear were it obliged to evaluate the effectiveness of state and
local controls and the desirability of uniformity in environmental
protection. . . If there [was] a closer fit between the notion of
`federal enforceability' and Sec. 112's concerns with crediting
effective controls,'' it was ``not evident'' from the record before the
Court. 59 F.3d at 1364. Today's proposal is based on the EPA's
assessment that federal enforceability of limits for reclassified
sources significantly enhances the effectiveness of controls because
limits taken by sources to reclassify that are enforceable by the
federal government and citizens, in addition to state and local
permitting authorities, are more likely to ensure compliance. Simply
put, ensuring that more entities can bring an enforcement action if a
source violates a PTE limit, i.e., EPA, States, Tribes, local
government agencies, and citizen groups, will make the limit more
effective in controlling HAP emissions.
In the absence of federal enforceability for reclassified sources,
the public is reliant on state and local permitting authorities, and
citizen groups in certain jurisdictions, to ensure sources comply with
PTE limits. While the EPA maintains that state and local enforcement
can be an effective means for ensuring compliance with PTE limits for
other NESHAP sources and CAA programs (e.g., NSR and title V), given
the EPA's heightened concerns surrounding reclassified sources, the EPA
proposes that additional oversight is appropriate to increase the
effectiveness of controls for reclassified sources. PTE limits for
reclassified sources are integral to ensure these sources are properly
classified and are subject to the appropriate federal CAA section 112
requirements. While the EPA intends to address PTE limits more
generally in a separate rulemaking as discussed further below, this
proposed rulemaking is specific to NESHAP sources that have
reclassified from major to area sources, or will do so in the future.
In addition to EPA enforcement, citizen enforcement is another
important component of federal enforceability that EPA proposes will
enhance enforcement for reclassified source limits. There is
considerable variability for citizens to participate in the state and
local enforcement of permit terms and other measures to limit emissions
across state and local jurisdictions. Whereas Congress granted
considerable enforcement authority to citizens under the CAA and other
environmental statutes, the ability of citizens to participate in
state- and local-only enforcement proceedings is, generally speaking,
very limited. The EPA's current understanding is that around one third
of states allow for general environmental citizen suits, which are in
addition to various media-specific state citizen suit statutes, which
provide varying degrees of effectiveness for enforcing permit limits
for reclassified sources at issue in this proposal.\23\ Accordingly, in
many instances, state and local permitting authorities are the only
means of enforcement. To help ensure that reclassifying sources do not
erode the goals of the CAA section 112 program, the EPA proposes the
ability for citizens to enforce permits for such sources is needed. The
EPA is seeking comment on the prevalence and effectiveness of citizen
suit provisions in state and local enforceable HAP PTE limiting
programs. Further, because of limitations on the EPA's and state and
local enforcement authorities' budgets and resources and variability in
priorities between state and local regulators and the EPA, the ability
for citizen enforcement of limits for reclassified sources adds an
important component of an effective enforcement regime.
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\23\ See P. Flynn & M. Barsa, State Citizen Suits, Standing, and
the Underutilization of State Environmental Law, 52 Envtl. L. Rep.
10473 (June 2022) (noting that 17 states have general, non-media
specific citizen suit statutes, in addition to dozens of media
specific state citizen suit laws).
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The potential for federal enforcement for reclassified source
limits provides an additional incentive for facilities to comply,
ensures consistency in protection across jurisdictions, and thereby
enhances the effectiveness of controls. This is evidenced in the broad
[[Page 66347]]
oversight authority to enforce the CAA that Congress granted to the
EPA. Courts have recognized the EPA's ability to act to enforce the CAA
even when a state has already acted.\24\ The greater number of agencies
or persons that can enforce the requirements, the greater the
likelihood is that some action will be brought.\25\ Indeed, federal
enforceability enables the EPA to ensure that sources are abiding by
the conditions they have adopted to opt out of federal major source
standards; and grants citizens the ability to use the tools Congress
provided in the CAA for the same goal. Federal enforcement for
reclassified sources creates a clear regulatory structure for EPA and
citizen enforcement through the CAA and produces a level playing field
on which sources are subject to the same enforcement mechanisms
regardless of the state in which they are located.
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\24\ See e.g., Murphy Oil v. EPA, 143 F.Supp.2d 1054 (W.D. Wis.
2001) (holding in part, the EPA was entitled to pursue an
enforcement action under the CAA against a facility despite a prior
settlement with the state for a related violation); United States v.
SCM Corp., 615 F. Supp. 411 (D. Md. 1985) (holding the EPA could
pursue enforcement against a facility for CAA violations after the
same facility reached a settlement with the state regulator for
related violations, explaining ``[i]n a federal system, each person
and entity is subject to simultaneous regulation by state and
national authority''); see also Buckeye Power, Inc. v. EPA, 481 F.2d
162, 167 (6th Cir. 1973) (``it is important to note [delegation to
the state] does not detract from the Administrator's primary ability
to enforce federally the provisions of every state plan against
citizens of that state which drew the plan.''); cf. U.S. v. Power
Engineering Co., 3030 F.3d 1232 (10th Cir. 2002) (deferring to the
EPA's reasonable interpretation that the Resource Recovery and
Conservation Act (RCRA) allows for the EPA to pursue an enforcement
action despite the existence of a separate state enforcement
proceeding).
\25\ Increased enforcement leading to improvements in compliance
is supported by the scientific literature. Gray and Shimshack (2011)
survey the literature and find that rigorous monitoring and
enforcement is a primary motivator for compliance with environmental
regulatory requirements. The authors find that enforcement
activities can lead to less violations and reductions in emissions.
Gray, W.B., & Shimshack, J. P. (2011). The effectiveness of
environmental monitoring and enforcement: A review of the empirical
evidence. Review of Environmental Economics and Policy.
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In contrast, state-only enforceability for reclassified source
limits creates significant burdens on the EPA if it were to attempt to
enforce a violation of such a limit. In such instances, the EPA would
either have to (1) litigate any enforcement issues of PTE limits taken
to reclassify to an area source as a general citizen in the state forum
(which is only available in states with citizen suit provisions that
the EPA could utilize) or (2) only bring cases for violations of major
source requirements (as opposed to permit limit exceedances that do not
cross the major source threshold). State-only enforcement eliminates
the EPA's use of the administrative enforcement powers granted by
Congress that have been an effective and resource-saving means to bring
sources into compliance without mounting a full effort enforcing a
violation of the major source requirements. Enforcing the requirements
of a major source MACT in the face of a facially valid state-only
enforceable permit or permit limit that grants the same source area
source status by saying a source cannot exceed 9.9 tpy of any HAP
(which the EPA does not consider enforceable as a practical matter as a
blanket emission limit alone) could create conflicts between what
limits a state interprets as sufficient to avoid major source MACT
requirements and what limits the EPA interprets as enforceable as a
practical matter (e.g., a limit of 9.9 tpy on total HAP by itself is
not enforceable as a practical matter). In such an instance a federal
court may not be willing to entertain the conflict between the state
and EPA in the permit challenge and e.g., dismiss the claim on the
grounds of abstention, or remove the permit challenge to state court
which may defeat the goal of national consistency of this federal
program envisioned by Congress through federal court oversight.
Furthermore, challenges to a facially-valid, state-only enforceable
permit or permit term could create fairness issues (e.g., reliance on a
state's permitting decision) that a source could use in its defense
that may prevent the EPA or citizens from even pursuing the
enforcement.\26\ Federal enforceability will help ensure that the
safeguard provisions being proposed in this action are enforced for
sources that reclassify.
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\26\ For example, courts may exercise the ``Burford doctrine''
under which a federal court may decline to interfere with state
proceedings: ``(1) when there are difficult questions of state law
bearing on policy problems of substantial public import whose
importance transcends the result in the case then at bar; or (2)
where the exercise of federal review of the question in a case and
in similar cases would be disruptive of state efforts to establish a
coherent policy with respect to a matter of substantial public
concern.'' New Orleans Public Service, Inc. v. Council of City of
New Orleans, 491 U.S. 350 (1989) (internal citations omitted).
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The public notice and comment requirements included in 40 CFR part
63, subpart E provide an additional layer of transparency and
accountability in creating HAP PTE limiting mechanisms used to measure
compliance after reclassification to ensure they will contain
sufficient information to assure compliance. The subpart E process does
include requirements for public notice and comment when programs are
submitted to the EPA for review and approval. The EPA is seeking
comment on the need, associated burdens, and time required for public
notice and comment beyond the process already present in 40 CFR part
63, subpart E. Specifically, we are seeking comments on whether the EPA
should require, as an additional condition of reclassification, that
every permit containing the provisions required in this proposal used
to reclassify from a major source of HAP to an area source of HAP
should undergo an individual public notice and comment period.
Additionally, we are seeking comment on the public's understanding of
the public notice and comment process involved in 40 CFR part 63,
subpart E.
For these reasons, we are proposing that limits taken by sources to
reclassify from major source to area source must be federally
enforceable as defined in 40 CFR 63.2. We are seeking comment on
additional benefits or drawbacks of federal enforceability for NESHAP
reclassifications.
C. Ministerial Revisions From the 2020 MM2A Final Rule
In the 2020 MM2A final rule, the EPA introduced an interim
ministerial revision to the definition of ``potential to emit'' in 40
CFR 63.2 to remove the word ``federally'' from the phrase ``federally
enforceable.'' As the EPA noted at the time, the revisions did not
represent a final decision by the EPA or signal any direction that the
EPA is intending to take in a future final action. The EPA is not
revisiting this interim revision at this time. As noted in the previous
section, the EPA's proposal to introduce federal enforceability for
reclassified sources is being proposed as a separate provision from the
40 CFR 63.2 ``potential to emit'' definition, such that it would only
apply to reclassified sources.
In this proposal, the EPA is solely focused on ensuring the
sufficiency of permit limits for sources that reclassify from major to
area sources. Accordingly, the EPA is not revisiting the interim
ministerial revision to the definition of ``potential to emit'' in 40
CFR part 63 and will address the definition of PTE under 40 CFR part 63
in a separate rulemaking or guidance. Nor is the EPA addressing federal
enforceability of PTE limits taken by other NESHAP sources (i.e.,
sources that are not reclassified sources), nor sources in other
programs such as NSR or title V, for which the EPA previously
introduced federally enforceable limits, but which may currently be
subject to legally and practically enforceable state-law PTE limits.
See NMA v. EPA, 59 F.3d 1351 (D.C. Cir. 1995) (remanding but not
vacating federal enforceability of PTE
[[Page 66348]]
limits for NESHAP sources); CMA v. EPA, 70 F.3d 637 (D.C. Cir. 1995)
(remanding and vacating federal enforceability of PTE limits for NSR
sources); Clean Air Implementation Project v. EPA, 1996 WL 393118 (D.C.
Cir. June 28, 1996) (remanding and vacating federal enforceability of
PTE limits for title V sources). The EPA plans to address the
definition of PTE in the NESHAP, NSR, title V, and related programs in
separate rulemaking or guidance. In the interim, before the EPA
completes the future rulemaking or guidance on the definition of PTE
across affected programs, the EPA's longstanding interpretation of the
court decisions cited previously, and associated policy, remains in
effect. Specifically, pursuant to the EPA's guidance the terms
``federally enforceable'' or ``enforceable'' as used in general
definitions of ``potential to emit'' and related terms should be read
to mean ``federally enforceable or legally and practicably enforceable
by a state or local air pollution control agency.'' \27\ Note, this
interpretation does not apply to the term ``federally enforceable'' as
it is being introduced in this proposal as a condition for NESHAP
sources to reclassify from major to area source status. Furthermore, to
be eligible for consideration in determining PTE, any limitations,
whether federally enforceable or not, must be enforceable as a
practical matter, meaning both legally and practicably enforceable. To
be practicably enforceable, limitations or standards used to constrain
PTE must: (1) be technically accurate and specify the portions of the
source subject to the limitation or standard; (2) specify the time
period for the limitation or standard (e.g., hourly, daily, monthly
and/or annual limits such as rolling annual limits); and (3) include a
method for determining compliance, including appropriate monitoring,
recordkeeping, and reporting.\28\
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\27\ John Seitz and Robert Van Heuvelen, ``Release of Interim
Policy on Federal Enforceability of Limitations on Potential to
Emit'' (January 22, 1996).
\28\ See, e.g., John Seitz and Robert Van Heuvelen, ``Release of
Interim Policy on Federal Enforceability of Limitations on Potential
to Emit'' (January 22, 1996); John S. Seitz, ``Options for Limiting
the Potential to Emit (PTE) of a Stationary Source Under Section 112
and Title V of the Clean Air Act'' (January 25, 1995); Kathie Stein,
``Guidance on Enforceability Requirements for Limiting Potential to
Emit through SIP and Sec. 112 Rules and General Permits'' (January
25, 1995); and Terrell E. Hunt and John S. Seitz, ``Limiting
Potential to Emit in New Source Permitting'' (June 13, 1989); ``In
the Matter of Salt River Project Agricultural Improvement and Power
District Aqua Fria Generating Station,'' Order on Petition No. IX-
2022-4 (July 28, 2022); ``In the matter of: Yuhuang Chemical Inc.
Methanol Plant,'' Order on Petition No. VI-2015-03 (Aug. 31, 2016).
See also 40 CFR 49.167, definition of ``Enforceable as a Practical
Matter.''
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The EPA acknowledges that terminology referring to enforceability
principles in EPA rules and guidance--such as the Agency's use of the
terms ``federally enforceable,'' ``enforceable as a practical matter,''
and ``legally and practicably enforceable''--has varied somewhat
historically. The EPA specifically solicits comment on terminology used
both in this notice and historically and welcomes suggestions for
maximizing clarity for regulated entities and the public.
D. What sources will have to ensure all new requirements are met and
when will those sources need to comply with the new requirements?
The proposed requirements, once finalized, will apply to any
sources that reclassify from major source status to area source status
under the NESHAP program, including those that have already
reclassified since issuance of the January 25, 2018, Wehrum Memorandum.
For sources that have reclassified from major source status to area
source status since January 25, 2018, under the NESHAP program and
prior to the effective date of the final rule, the changes to 40 CFR
part 63 proposed in this action will be effective within 3 years of
publication of the final rule. Specifically, sources who reclassified
from major source status to area source status since January 25, 2018
must have federally enforceable permit conditions including the
safeguards proposed in this action within three years of publication of
the final rule in order to maintain area source status. We are
specifically seeking comment on whether to apply the proposed
requirements to sources that have reclassified since the January 2018
Wehrum memo or whether this action should only apply to sources that
reclassify after the effective date of the final rule. We request
comments on the impacts of coming into compliance with the proposed
requirements for sources that have reclassified since the January 2018
Wehrum memo. For those sources that reclassify after the effective date
of the final rule, the proposed requirements will be effective upon
reclassification. The process by which state air pollution control
agencies can submit HAP PTE limiting mechanisms, such as rule
adjustments, rule substitutions, equivalency by permit, or other
mechanisms is described in 40 CFR part 63, subpart E for EPA review and
approval. Programs that are approved pursuant to subpart E are
federally enforceable and subpart E describes the necessary criteria
for state programs that contain adjustments to CAA section 112 rules,
state programs that substitute for CAA section 112 rules, and permit
terms and conditions that substitute for CAA section 112 rules. We are
seeking comment on the experience state agencies have had getting
federally enforceable HAP PTE limiting mechanisms approved under
subpart E and any potential hurdles that have prevented or would
prevent state air pollution control agencies from submitting mechanisms
for approval under 40 CFR part 63, subpart E. We are also seeking
comment on the cost incurred by state air pollution control agencies to
obtain subpart E approved programs. Given the timelines for EPA review
and approval of state programs seeking approval for federally
enforceable HAP PTE limiting mechanisms in subpart E, the EPA proposes
that three years from publication of the final rule is sufficient time
for sources who have chosen to reclassify to obtain federally
enforceable HAP PTE limiting permit conditions. The EPA is seeking
comment on the time needed for sources that have already reclassified
to add such provisions as enforceable permit conditions, to the extent
that they do not already exist.
IV. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 14094: Modernizing Regulatory Review
This action is a ``significant regulatory action'' as defined in
Executive Order 12866, as amended by Executive Order 14094.
Accordingly, EPA submitted this action to the Office of Management and
Budget (OMB) for Executive Order 12866 review. Documentation of any
changes made in response to the Executive Order 12866 review is
available in the docket.
The EPA has not prepared a quantitative analysis of the potential
costs and benefits associated with this action because it is highly
uncertain which facilities may reclassify in the future as a result of
the proposed rule, and any potential emissions changes that result from
the added reclassification requirements will also
[[Page 66349]]
be highly uncertain.\29\ Furthermore, the EPA does not expect
substantial costs for sources that have already reclassified and have
not observed emission changes following a reclassification for this
subset of facilities. Based on data available to the agency at this
time, sources that have reclassified are unlikely to remove control
devices to reduce HAP or take other actions that would increase HAP
emissions. However, under the current framework, sources that
reclassify in the future could operate in a manner that would increase
emissions. This would be inconsistent with the aim of CAA section 112
to achieve lasting emissions reductions across a wide range of
industries to protect public health and the environment.
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\29\ In the Regulatory Impact Analysis for the 2020 MM2A Final
Rule, the EPA assumed in the primary scenario that all facilities
under 75% of the major source HAP emissions threshold that could
potentially reclassify would over a 5-year time period from
promulgation (2,700 facilities). While we are still within that time
frame, the EPA has not seen nearly that many reclassifications
occuring since the rule was promulgated. At the time of this
proposal, around 200 facilities have reclassified. This represents
over 90% fewer reclassifications than our estimate in the 2020 final
rule. A list of facilities that have reclassified from major source
to area source status at the time of proposal is available in the
docket for this action. Therefore, we find the uncertainty in
attempting to predict facility reclassification behavior to be too
great to warrant an illustrative quantitative assessment of the
proposed rule.
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Prior to 2018, the OIAI policy prevented major sources of HAP from
reclassifying to area sources of HAP after the first substantive
compliance date of a major source NESHAP. The OIAI policy was initially
replaced by a January 25, 2018, guidance document, then was formally
codified by the 2020 MM2A final rule wherein EPA advocated for a
reading of the CAA that suggests that there should be no temporal
restrictions on reclassifications.
The 2018 guidance memo and 2020 MM2A final rule allow facilities to
reclassify from major sources of HAP to area sources of HAP at any
time. Since 2018, about 200 facilities have reclassified, far short of
the roughly 2,700 facilities we estimated might reclassify at the time
of the 2020 final rule. Due to limited data available to the agency at
the time of this proposal, the EPA does not have information regarding
whether or how much emissions may have increased at any individual
reclassified facilities--though we seek comment on that in this
proposal. However, the current framework allows for emissions increases
and decreased compliance assurance as all sources are required to do is
obtain a PTE limit below the major source thresholds. We are requesting
comment on specific examples of facilities that have had changes in
actual emissions since reclassifying. The EPA has not heard about
specific additional facilities' plans to reclassify that have not yet
done so, but we seek comment on facilities that have considered
reclassification but not yet done so and their reasons for waiting.
However, it is reasonable to assume that additional reclassifications
will occur over time. In the first half of 2023, there have been
between zero and two reclassifications per month. We have added the
list of reclassifications that have occurred to date at the time of
this proposal to the docket for this action.
Currently, sources that reclassify are only required to remain
below the major source threshold unless they become subject to an area
source NESHAP, which they would have to comply with if it requires more
stringent controls than would be needed to keep emissions below the
major source threshold. That could lead to increased HAP emissions from
sources whose emissions were well below the major source threshold due
a major source NESHAP prior to reclassification in the absence of this
rule. The EPA seeks to ensure that a reclassified source does not
increase emissions because we find that scenario runs counter to CAA
section 112's goal of achieving lasting reductions of HAP emissions
from major sources, as described earlier in this preamble.
We do not expect significant costs and whether any costs or savings
are incurred due to reclassification is very case-specific. We do not
possess sufficient information to quantify costs or cost savings for
individual facilities but seek comment on costs or cost savings. The
costs incurred for a given facility are better attributed to the
individual NESHAP rules the facility was subject to prior to
reclassification rather than the General Provisions of part 63. Any
potential costs for facilities in the future that may choose to
reclassify are expected to be negligible for sources that have not yet
reclassified and we do not expect sources to reclassify if it will
increase their costs.
The final MM2A rule already required electronic notification to the
EPA and we are not requiring those sources who have already submitted
notifications to resubmit their notification. We are seeking comments
from sources who have already reclassified and information about
changes in air pollution control devices at these facilities such that
costs would be incurred to maintain emissions at a level that was
achieved when the source was previously subject to a major source
NESHAP.
We expect that sources that reclassify will experience cost savings
that will outweigh any additional cost of achieving area source status.
The only potential costs that would be incurred by sources and
regulatory authorities would be the costs of preparing and reviewing a
source's application for area source status and issuing enforceable PTE
limits, respectively, as appropriate.\30\ In addition, any potential
costs associated with the reclassification of major sources as area
sources (i.e., application reviews and PTE issuance) may be offset by
reduced reporting and recordkeeping obligations for sources that no
longer must meet major source NESHAP requirements, depending on case-
specific circumstances. Whether any cost or cost savings is incurred by
any source choosing to reclassify is highly case specific and we are
not providing quantitative estimates of costs in this proposal,
however, we have included technical memoranda (e.g., MM2A Cost
Memorandum) for the 2020 final MM2A rule and the regulatory impact
analysis (RIA) from that rulemaking in the docket for this action to
provide illustrative examples of the types of costs and costs savings
that may occur due to reclassifications. We are seeking comments on the
potential costs or cost savings associated with this proposal and our
assumption that any changes to the costs associated with
reclassification will be negligible.
---------------------------------------------------------------------------
\30\ Illustrative example costs for a regulatory authority
reviewing a source's application for area source status was
estimated in the 2020 MM2A final rule, which is available in the
docket for this action.
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While the EPA does not expect this action to directly impact the
level of control of any particular NESHAP standards, this proposal is
expected to enhance transparency, promote national consistency in EPA
and citizen enforcement, and improve compliance assurance through
clearer criteria for NESHAP reclassifications. The processes by which
state programs and permits are approved under 40 CFR subpart E,
includes requirements for public notice and comment as well as creating
programs and permits that are federally enforceable by the EPA and
citizens. These additional layers of oversight increase the likelihood
that sources will continue to effectively operate HAP pollution control
equipment and create a framework for the EPA and citizens to pursue
enforcement actions if they do not. Additionally, the EPA finds that
the safeguards proposed in this action will ensure that HAP emissions
reductions
[[Page 66350]]
are achieved, and the corresponding public health and environmental
benefits from decreased HAP emissions, are maintained at sources that
reclassify from major sources of HAP to area sources of HAP.
B. Paperwork Reduction Act (PRA)
This action does not impose any new information collection burden
under the PRA. The proposed amendments to the General Provisions relate
to voluntary actions taken by a source after consideration of the net
impacts of the action. Therefore, this action would not impose any new
information collection burden. The General Provisions do not themselves
require any reporting and recordkeeping activities, and no ICR was
submitted in connection with their original promulgation or their
subsequent amendment. Any recordkeeping and reporting requirements are
imposed only through the incorporation of specific elements of the
General Provisions in the individual NESHAP, which are promulgated for
particular source categories that have their own ICRs. The PRA costs
for sources that reclassify will be properly accounted for in the ICRs
for the NESHAPs they were subject to.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the EPA concludes that the impact of concern
for this rule is any significant adverse economic impact on small
entities and that the agency is certifying that this rule will not have
a significant economic impact on a substantial number of small entities
because the rule relieves regulatory burden or has no net burden on the
small entities subject to the rule.
Small entities that are subject to major source NESHAP requirements
would not be required to take any action under this proposed rule; any
action a source takes to reclassify as an area source would be
voluntary. We expect that sources that reclassify will experience cost
savings that will outweigh any additional cost of achieving area source
status. We do not expect substantial costs for sources that have
already reclassified. Sources that reclassify are unlikely to remove
control devices to reduce HAP or take other actions that would increase
HAP emissions, however, the possibility does exist under the current
framework. The final MM2A rule already required electronic notification
to the EPA and we are not requiring those sources who have already
submitted notifications to resubmit their notification. We are seeking
comments on whether sources who have already reclassified have indeed
removed control devices such that costs would be incurred to maintain
emissions at a level that was achieved when the source was previously
subject to a major source NESHAP. The only potential cost that would be
incurred by regulatory authorities would be the cost of reviewing a
sources' application for area source status and issuing enforceable PTE
limits, as appropriate. No small government jurisdictions operate their
own air pollution control permitting agencies, so none would be
required to incur costs under the proposed rule. In addition, any costs
associated with the reclassification of major sources as area sources
(i.e., application reviews and PTE issuance) are expected to be offset
by reduced reporting and recordkeeping obligations for sources that no
longer must meet major source NESHAP requirements. Whether any cost or
cost savings is incurred by any source, including those owned by a
small parent company, choosing to reclassify is highly case specific
and we are not providing quantitative estimates of costs in this
proposal, however, we have included technical memoranda from the 2020
final MM2A rule and the regulatory impact analysis (RIA) from that
rulemaking in the docket for this action to provide illustrative
examples of the types of costs and cost savings that can occur due to
reclassifications. We are seeking comments on the potential costs or
cost savings associated with this proposal and our assumption that the
any changes to the costs associated with reclassification will be
negligible.
Based on the considerations above, we have, therefore, concluded
that this action will relieve regulatory burden on net for any
regulated small entities that choose to reclassify to area source
status.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. This action imposes
no enforceable duty on any state, local, or tribal governments or the
private sector.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the federal government and the states, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action has tribal implications. However, it will neither
impose substantial direct compliance costs on federally recognized
tribal governments, nor preempt tribal law. There are two tribes that
currently implement title V permit programs and one that implements an
approved TIP for minor source permitting, the latter of which also has
a major source. As a result, these tribes may have additional permit
actions if sources in their jurisdiction seek reclassification to area
source status. Any tribal government that owns or operates a source
subject to major source NESHAP requirements would not be required to
take action under this final rule; the reclassification provisions in
the final rule would be strictly voluntary. In addition, achieving area
source status would result in reduced burden on any source that no
longer must meet major source NESHAP requirements. Under the proposed
rule, a tribal government with an air pollution control agency to which
we have delegated CAA section 112 authority would be required to review
permit applications and to modify permits as necessary. However, any
burden associated with the review and modification of permits will be
offset by reduced Agency oversight obligations for sources no longer
required to meet major source requirements.
For sources located within Indian country, where the EPA is the
reviewing authority, unless the EPA has approved a non-federal minor
source permitting program or a delegation of the Federal Indian Country
Minor NSR Rule, the Federal Indian Country Minor NSR Rule at 40 CFR
49.151 through 49.165 provides a mechanism for an otherwise major
source to voluntarily accept restrictions on its PTE to become a
synthetic source, among other provisions. The Federal Indian Country
Minor NSR Rule applies to sources located within the exterior
boundaries of an Indian reservation or other lands as specified in 40
CFR part 49, collectively referred to as ``Indian country.'' See 40 CFR
49.151(c) and 49.152(d). This mechanism may also be used by an
otherwise major source of HAP to voluntarily accept restrictions on its
PTE to become a synthetic area HAP source. The EPA's Federal
Implementation Plan (FIP) program, which includes the Federal Indian
Country Minor NSR Rule, provides additional options for particular
[[Page 66351]]
situations, such as general permits for specific source categories, to
facilitate minor source emissions management in Indian country.
Existing sources in Indian country may have PTE limits that preceded
the EPA's FIP for minor sources and, for that reason, were issued in a
40 CFR part 71 permit or FIP permitting provision applicable to Indian
country.
Consistent with EPA policy, the EPA will offer to consult with the
potentially impacted tribes and other tribes upon their request.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not directly regulate any
emission source and will not have any direct impact on children's
health. The emissions reductions achieved by individual NESHAP are
properly accounted for in those individual NESHAP rather than the
General Provisions. This action will not change the level of emissions
reductions achieved by those NESHAP. While we do not expect this action
to have any direct impact on children's health, preventing emissions
increases will ensure protections achieved via any NESHAP that a source
was subject to at the time of reclassification will provide continued
protection achieved by any NESHAP that source was formerly subject to.
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. We have concluded that this action is
not likely to have any adverse energy effects.
I. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations and
Executive Order 14096: Revitalizing Our Nation's Commitment to
Environmental Justice for All
The EPA believes that this action does not have disproportionate
and adverse human health or environmental effects on communities with
environmental justice concerns because it does not establish an
environmental health or safety standard. The proposed amendments to the
General Provisions are procedural changes and do not impact the
technology performance nor level of control of the NESHAP governed by
the General Provisions.
While the EPA does not expect this action to directly impact the
level of control of any particular NESHAP standards, this proposal is
expected to enhance transparency, promote national consistency in EPA
and citizen enforcement, and improve compliance assurance through
clearer criteria for NESHAP reclassifications. The processes by which
state programs and permits are approved under 40 CFR subpart E,
includes requirements for public notice and comment as well as creating
programs and permits that are federally enforceable by the EPA and
citizens. These additional layers of oversight increase the likelihood
that sources will continue to effectively operate air pollution control
equipment and create a framework for the EPA and citizens to pursue
enforcement actions if they do not. Additionally, the EPA finds that
the safeguards proposed in this action will ensure that HAP emissions
reductions are achieved, and the corresponding public health and
environmental benefits from decreased HAP emissions, are maintained at
sources that reclassify from major sources of HAP to area sources of
HAP.
List of Subjects in 40 CFR Part 63
Environmental protection, Area sources, General provisions,
Hazardous air pollutants, Major sources, Potential to emit.
Michael S. Regan,
Administrator.
[FR Doc. 2023-21041 Filed 9-26-23; 8:45 am]
BILLING CODE 6560-50-P