EPA Issues Permitting Guidance on Obtaining Emission Reduction Credits

WASHINGTON — Today, U.S. Environmental Protection Agency (EPA) issued guidance clarifying how permitting authorities may apply emission reduction credit (ERC) requirements under the Nonattainment New Source Review (NNSR) preconstruction permitting program. Currently, air permitting agencies require companies to obtain ERCs before issuing a permit authorizing construction, even if a facility will not begin operation for several years. Historically, uncertainty regarding the timing of offset credit acquisition has delayed permitting.  

EPA’s guidance clarifies that permitting authorities may issue NNSR permits before the required ERCs have been secured, provided certain enforceable conditions are met. This approach provides greater regulatory certainty for American businesses while giving states additional flexibility to issue permits for projects that are ready to move forward with construction. 

“Today’s guidance provides much needed clarity and commonsense to permitting while maintaining the environmental protections required by the Clean Air Act,” said EPA Assistant Administrator for Air and Radiation Aaron Szabo. “By allowing permits to be issued before specific offsets are secured—so long as enforceable conditions prevent operation until offsets are obtained—EPA is allowing people to construct their facilities at their own risk, reducing unnecessary permitting delays, increasing regulatory certainty, and supporting economic growth without compromising air quality.”  

Specifically, the guidance clarifies that air agencies may issue NNSR permits before offsetting emission reductions have been identified, provided that the NNSR permit contains both: 

• An enforceable commitment from the permittee to obtain the necessary emission reductions before commencing operation; 
• An express prohibition on commencing operations until the required ERCs are identified, approved, and secured with appropriate permit restrictions. 

In line with the intent of ERCs—to help sources and air agencies maintain or improve air quality while still promoting economic development in nonattainment areas—the Trump EPA’s approach gives source owners and permitting authorities in nonattainment areas the flexibility to move forward with projects that will bolster communities while still maintaining or attaining the National Ambient Air Quality Standards (NAAQS). This is consistent with the Clean Air Act’s (CAA) requirements that new and modified major sources in nonattainment areas obtain sufficient emission offsets before beginning operations. The guidance does not change or substitute for any law, regulation, or any other legally binding requirement. The Trump EPA is committed to following all of its statutory obligations under the CAA while cutting unnecessary red tape to reduce permitting delays.  

To read the guidance, visit: New Source Review Policy and Guidance Document Index. 

Background 

The NNSR program is part of the NSR preconstruction air permitting program. It applies to new major stationary sources and major modifications at existing sources of air pollution located in areas that do not currently attain the NAAQS that emit or have the potential to emit one or more applicable air pollutants at or above certain limits.