On January 25, 2018, EPA’s Assistant Administrator, William Wehrum, issued a memorandum addressing when a “major source” subject to a section 112 maximum achievable control technology (“MACT”) standard of the Clean Air Act (“CAA”) can be reclassified as an “area source,” and thus avoid any more stringent requirements that only apply to “major sources.”  The memorandum departs from and supersedes EPA’s longstanding “Once in Always in” (“OIAI”) policy articulated in the May 1995 Seitz Memorandum.  Under the OIAI policy, a major source of hazardous air pollutants (“HAPs”) was permanently subject to the MACT standard at the “first compliance date” of the standard even if the source was able to later limit its potential to emit (“PTE”) HAPs below the major source thresholds.  EPA’s new policy explains that a major source will become an area source once it takes enforceable limits on its PTE to ensure emissions cannot exceed the applicable major source thresholds for HAPS.

In its memorandum reversing the OIAI policy, EPA explained that CAA section 112 language imposes no “temporal limitation” requiring an area source which was major at the “first compliance date” of the standard to remain a major source if emissions are later reduced.  In addition, EPA recognized that the definition of “major source” must be applied “considering controls.”  As a result, the controls a source implements in lowering its PTE below the applicable thresholds “must be considered as operating to remove it from the major source category” regardless of when the controls are implemented.  Thus, sources now have an even stronger incentive to reduce emissions, given that doing so may alleviate the regulatory burden associated with a Section 112 standard.