Revised Rule on Fugitive Emissions for NSR Permitting

U.S. EPA has revised its long-standing policy regarding which existing major stationary sources are required to include fugitive emissions when determining whether emission increases from physical or operational changes result in a major modification under New Source Review (NSR).  U.S. EPA currently requires all source categories to consider fugitive emissions when determining whether an emission increase from a source modification triggers major NSR permitting requirements.  U.S. EPA will now require only those 26 “listed” 100-ton source categories designated through rulemaking pursuant to Section 302(j) of the Clean Air Act (CAA) (i.e., Section 302(j) sources) to consider fugitive emissions when making applicability determinations under NSR.  However, U.S. EPA intends to preserve its existing treatment of fugitive emissions for Plantwide Applicability Limit (PAL) permits.  

To implement its new approach to fugitive emissions, U.S. EPA revised four (4) main portions of the major NSR program regulations: 40 CFR §§51.165, 51.166, 52.21, and Appendix S to Part 51. The revisions are nearly identical for the existing regulations because they contain nearly identical provisions related to major modifications.  In addition, U.S. EPA is also finalizing the following:

1. A minor change in the provisions for PALs to preserve their existing treatment of fugitive emissions.
2. A modification to the paragraph in each section that explains how to calculate whether a significant emissions increase will occur as the result of a physical or operational change.
3. A minor revision in the provisions on monitoring and reporting for physical and operational changes that are found not to be major modifications.
4. A revision to the definitions of ”baseline actual emissions” and ”projected actual emissions” for NSR permitting.

A number of states will continue to include fugitive emissions in their applicability determinations as specified in their state-specific NSR regulations.  However, for PM2.5 Nonattainment NSR (NNSR) rules, the Federal Appendix S provisions control all determinations until states adopt new rules.  This means that fugitive PM2.5 emissions will only be included in an NNSR applicability determination if they are from a Section 302(j) source or category facility.  This could be beneficial for certain NNSR permit applications, but will also limit which fugitive emission reductions can be used for netting or offsetting purposes.