SUBJECT: Potential to Emit for MACT Standards -- Guidance on Timing Issues
FROM: John S. Seitz, Director
Office of Air Quality Planning and Standards (MD-10)
TO: Linda Murphy, Region I
Conrad Simon, Region II
Thomas Maslany, Region III
Winston Smith, Region IV
David Kee, Region V
Stanley Meiberg, Region VI
William Spratlin, Region VII
Patricia Hull, Region VIII
David Howekamp, Region IX
Jim McCormick, Region X
Section 112 of the Clean Air Act distinguishes between major sources and area sources of
hazardous air pollutants. Although maximum achievable control technology (MACT) is required
for all major sources of hazardous air pollutants, lesser controls or no controls may be required of
area sources in a particular industry. In addition, whether a facility is a major or area source of
hazardous air pollutants may affect the applicability of other CAA requirements -- such as when
or whether the facility is required to obtain a Title V operating permit.
The purpose of this memo is to clarify when a major source of hazardous air pollutants can become an area source -- by obtaining federally enforceable limits on its potential to emit -- rather than comply with major source requirements. Timing questions are important to address now because several MACT standards have been promulgated and because an increasing number of sources are nearing deadlines for submitting Title V operating permit applications. The EPA recently provided guidance on how facilities can obtain federally enforceable limits on their potential to emit hazardous and criteria air pollutants in a January 25, 1995, memo from me to you.
STATUTORY AND REGULATORY BACKGROUND
Section 112 of the Act defines a "major source" 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..." The term "potential to emit" is defined in the section 112 general provisions (40
CFR Part 63.2) as " the maximum capacity of a stationary source to emit a pollutant under its
physical or operational design," considering controls and limitations that are federally
enforceable. This definition is consistent with definitions in regulations for the new source
review and Title V permit programs.
SCOPE OF TODAY'S GUIDANCE
EPA has received a number of requests for clarification concerning when facilities may
limit their potential to emit to avoid applicability of major source requirements of promulgated
MACT standards. Most of these issues are not explicitly addressed by the section 112 general
provisions nor by MACT standards themselves. Therefore, EPA is providing this guidance for
MACT standards based on the Agency's interpretation of the relevant statutory language.
Today's guidance addresses three issues:
By what date must a facility limit its potential to emit 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
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?
EPA plans to follow this guidance memorandum with rulemaking actions to address these issues. The Agency intends to include provisions on potential to emit timing in future MACT rules and amendments to the section 112 general provisions. The EPA believes that the structure of section 112 strongly suggests certain outer limits for when a source may avoid a standard through a limit on its potential to emit. However, EPA also believes the statute may be flexible enough to allow the Agency
to reach different results through rulemaking. In forthcoming rulemaking, EPA will be
considering alternative approaches that could garner additional environmental benefits and
provide additional flexibility to small sources.
TIMING FOR OBTAINING POTENTIAL TO EMIT RESTRICTIONS:
GUIDANCE FOR PROMULGATED STANDARDS
Today's guidance clarifies that facilities may switch to area source status at any time until
the "first compliance date" of the standard. The "first 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, housekeeping
measures, etc..., but not a notice requirement) in the applicable MACT standard. By that date, to
avoid being in violation, a major source must either comply with the standard, or obtain and
comply with federally enforceable limits ensuring that actual and potential emissions are below
major source thresholds.
The Act does not directly address a deadline for a source to avoid requirements applicable
to major sources through a reduction of potential to emit. However, a result that is consistent
with the language and structure of the Act is that sources should not be allowed to avoid
compliance with a standard after the compliance date, even through a reduction in potential to
emit. In the absence of a rulemaking record supporting a different result, EPA believes that once
a source is required to install controls or take other measures to comply with a MACT standard,
it should not be able to substitute different controls or measures that happen to bring the source
below major source levels.
Moreover, while some standards have multiple, staggered compliance dates, these requirements are intended to function in an integrated manner to meet the statutory goals for that source category. For such a standard, the relevant date for purposes of this policy is the first substantive compliance date. While the Act may permit exceptions to these general rules, any such exceptions will need to be developed through rulemaking.
Some have read the Act to require an even earlier deadline, namely, the date of standard
promulgation. EPA believes this result is not as strongly compelled by the statute. It is
reasonable to presume that Congress intended a source to have some opportunity to avoid a
standard by becoming an area source once it has been identified as subject in a promulgated
The compliance date deadline approach would give small emitters (i.e. facilities with
actual emissions below the major threshold) time to limit their potential emissions rather than
comply with major source requirements. Under this approach, a facility will have the same
amount of time to comply whether it chooses to meet the standard or limit its potential to emit.
This compliance date approach for existing sources is also reasonable because it
recognizes the circumstances that exist regarding MACT standards issued to date. States are in
the process of developing additional mechanisms that can provide federally enforceable limits to
sources. In addition, EPA rules have not previously specified when facilities may switch from
major to area-source status to avoid MACT applicability. It would be inequitable to hold sources
to a promulgation date deadline absent clear advance notice to sources of the full significance of
that date. Although the Act gives EPA discretion to designate a deadline earlier than the first
compliance date, this is most appropriately done through rulemaking in a manner that gives
adequate notice to the regulated community. By contrast, any source should presume that the
compliance date is the final date to establish its status as an area source, at least for purposes of
For clarity, the Agency wishes to note that as long as a facility does not qualify for
treatment as an area source, the facility must comply with any applicable major source
requirement under the Clean Air Act. Facilities in need to comply with additional limits to
qualify as area sources will need to plan ahead to obtain the limits before compliance deadlines
for major source requirements. Facilities should consult with State and local air agencies
concerning the timing of any necessary submittal.
Section 112 requires new sources to comply with a MACT standard upon startup or no
later than the promulgation date of the standard, whichever is later. As a legal matter, to avoid
being in violation, a "potential" major source must either comply with MACT or obtain and
comply with federally enforceable limits by this statutory deadline.
Therefore, the Agency advises that any new facility that would be a major source in the absence of federally enforceable limits must obtain and comply with such limits no later than the promulgation date of the standard or the date of startup of the source, whichever is later. For the same reasons articulated below with regard to existing sources, a new source that is major at the time of promulgation or startup will remain major for purposes of that standard.
Once In, Always In Interpretation
EPA is today clarifying that facilities that are major sources for HAPs on the "first
compliance date" are required to comply permanently with the MACT standard to ensure that
maximum achievable reductions in toxic emissions are achieved and maintained.
EPA believes that this once in, always in policy follows most naturally from the language
and structure of the statute. In many cases, application of MACT will reduce a major emitter's
emissions to levels substantially below the major thresholds. Without a once in, always in
policy, these facilities could "backslide" from MACT control levels by obtaining potential-to-emit limits, escaping applicability of the MACT standard, and increasing emissions to the major-source threshold (10/25 tons per year). Thus, the maximum achievable emissions reductions that
Congress mandated for major sources would not be achieved. 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.
Example: A facility has potential emissions of 100 tons/year. After compliance with the
applicable MACT standard, which requires a 99 percent emissions reduction, the facility's
total potential emissions would be 1 ton/year. Under today's guidance, that facility could
not subsequently operate with emissions exceeding the maximum achievable control
technology emission level. The facility could not escape continued applicability of the
MACT standard by obtaining "area source" status through limitations on emissions up to
the 10/25 ton per year major source thresholds.
Additionally, the Act requires all major sources to obtain a Part 70 operating permit.
Section 501(2) provides that any source that is major under section 112 will also be major under
title V. It follows that a source that is major for purposes of any MACT standard will be subject
to title V as a major source. As clarification, most MACT standards explicitly require operating
permits for major sources. However, this principle applies regardless of whether it is specified in
the particular standard. Therefore, a source required to comply with MACT requirements
applicable to major sources will also be required to obtain a Part 70 permit for that MACT
APPLICABILITY OF MULTIPLE MACT STANDARDS TO A SINGLE FACILITY
A facility that is subject to a MACT standard is not necessarily a major source for future
MACT standards. For example, if after compliance with a MACT standard, a source's potential
to emit is less than the 10/25 tons per year applicability level, the EPA will consider the facility
an area source for purposes of a subsequent standard.
EXAMPLE: A facility has degreasing operations which emit 30 tons per year of HAP.
The same facility also has the potential to emit 5 tons/year of HAP from the coating of
miscellaneous metal parts. After complying with the Halogenated Solvent Cleaning
MACT, the maximum potential emissions from degreasing operations is 3 tons per year.
The total federally enforceable potential emissions from this facility would now be 8 tons
per year which meets the definition for an "area source." Therefore, this facility would
not be subject to the major source requirements of the future miscellaneous metal parts
It should be noted that EPA has authority to require additional reductions in toxic
emissions from sources that avoid MACT requirements through reductions in potential to emit.
Section 112(f), the residual risk program, requires EPA to evaluate the risk and to promulgate
additional standards for each category or subcategory of major sources, and allows EPA
discretion to do the same for area sources, where there is not an ample margin of safety to protect
public health within 8 years after promulgation of the MACT standard. The EPA will consider
whether residual risk standards are appropriate for sources complying with MACT standards or
potential to emit limits.
In addition, EPA is committed to implementation of the urban area source program as required in Section 112(c)(3) of the CAA. This program requires EPA to issue air toxics standards for area sources representing 90 percent of the area source emissions of the 30 hazardous air pollutants that present the greatest threat to public health in the largest number of urban areas. Together, the Residual Risk Standards and the Urban Area Source Standards ensure protection of public health beyond that achieved by implementation of the MACT standards for major sources.