As we reported last summer, the US Supreme Court ruled that US EPA lacked authority to impose Prevention of Significant Deterioration (PSD) and Title V permitting requirements under the Clean Air Act (CAA) on facilities based solely on their emission of greenhouse gases (GHGs).  Since that decision there have been many questions about how sources of GHG will be permitted.

Recently, US EPA took the first step to answer one of those questions.  On May 7, 2015, the Agency issued a direct final rule that will allow for the rescission of certain PSD permits issued by US EPA and delegated reviewing authorities under Step 2 of the Tailoring Rule, which set in motion PSD permitting for GHG-only sources. Sources already subject to PSD permitting requirements (so-called “anyway” sources because they are required to undergo PSD permitting “anyway”—regardless of their emission of GHGs) may still be required to include GHGs in their best available control technology (BACT) analyses, but PSD permits for non-anyway sources (sources permitted under Step 2 solely due to their GHG emissions), may no longer be necessary. Prior to approval of the rescission, non-anyway sources will need to establish that they have addressed all regulatory or permitting obligations (e.g., minor preconstruction permitting requirements) that were previously covered by the PSD permit.

The rule will become effective automatically on July 6, 2015, unless US EPA receives adverse comments by June 8, 2015.  This direct final rule is consistent with US EPA’s December 19, 2014, no action assurance memorandum which explained that the Agency would develop a rule that would allow for the recession of Step 2 permits.  The proposed rule is available here, and the direct final rule is available here.  Squire Patton Boggs will continue to provide updates as additional information becomes available, including guidance for permitting anyway sources.