EPA Allows Some Air Permits Before Credits Are Secured

The Environmental Protection Agency issued guidance July 1 clarifying that permitting authorities may issue certain Clean Air Act construction permits before required emission-reduction credits are secured, provided the permits include enforceable conditions tied to the credit requirement.

The guidance concerns the Nonattainment New Source Review program, which applies to areas that do not meet one or more National Ambient Air Quality Standards. The program governs permitting for projects in communities where air pollution levels are above those federal standards.

What the guidance says

Under the EPA’s clarification, a permitting authority does not necessarily have to wait for the required credits to be secured before issuing a qualifying construction permit. Instead, the authority may issue the permit with conditions that are enforceable and address the credit requirement.

Emission-reduction credits are part of the compliance framework for projects subject to Nonattainment New Source Review. The guidance changes the timing question—when credits must be secured in relation to permit issuance—for certain permits. It does not eliminate the requirement for emissions offsets or equivalent enforceable compliance measures.

The agency said uncertainty about when emission-reduction credits must be obtained has contributed to permitting delays. EPA described the guidance as a way to give states and other permitting authorities more flexibility in handling that timing while maintaining or improving air quality.

The change is therefore conditional rather than automatic. A permit may proceed before credits are secured only when the project qualifies under the relevant program and the required enforceable conditions can be included. The permitting authority responsible for the individual decision will determine how those conditions apply.

How it could affect projects

The immediate effect is a potential change in the sequence of permitting steps for some projects in nonattainment areas. A qualifying project could move through permit issuance before the required emission-reduction credits have been secured, rather than waiting for that step to be completed first.

That flexibility could allow some projects to move toward construction sooner in areas that do not meet national air-quality standards. The underlying emissions requirement remains part of the permit framework, however, because the permit must contain enforceable conditions addressing the required credits or equivalent compliance measures.

The guidance applies nationally to Clean Air Act permitting authorities in nonattainment areas. State and other permitting authorities will apply it when reviewing individual construction permits under the Nonattainment New Source Review program. The EPA’s action does not itself approve a specific project or require every permit in a nonattainment area to be issued before credits are secured.

Implementation will depend on the facts of each permit and on the authority handling the review. Projects must still fall within the program’s scope, and the permit must include conditions that can be enforced. The guidance thus provides a framework for permitting decisions rather than a blanket authorization covering all construction permits.

The EPA’s announcement does not identify how many projects or permits may be affected, and it does not quantify any expected change in construction activity or emissions. The guidance establishes the agency’s position on the timing of credit acquisition; its practical effects will depend on how permitting authorities use that position in individual cases.

For communities covered by the program, the central issue remains the relationship between project permitting and emissions control. EPA said the guidance is intended to reduce delays while maintaining or attaining air-quality standards. Whether a particular project advances under the approach will depend on the permit’s enforceable conditions and the decision of the responsible permitting authority.