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New Source Review (NSR) Permitting

Fact Sheet -- Implementation of the New Source Review Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5) -- Proposed Extension of Existing Administrative Stay and Proposal to Repeal the Stayed Provision


  • On July 16, 2009, the Environmental Protection Agency (EPA) proposed to extend its administrative stay of a portion of the rule implementing New Source Review (NSR) Program for fine particle pollution by nine months.  This part of the rule is known as “the grandfathering provision for PM2.5.”
  • This provision allowed federal Prevention of Significant Deterioration (PSD) permit applicants to meet permitting requirements for particulate matter by relying on requirements applicable to larger particles – those 10 micrometers in diameter and smaller (PM10) – as a surrogate for meeting the requirements for particles 2.5 micrometers in diameter and smaller (PM2.5) if they applied for the permit before July 15, 2008 and had not yet received their permit
  • A “stay” means that the provision is not in effect for a prescribed period of time.  On June 1, 2009, EPA administratively stayed this provision until September 1, 2009. In this notice, the Agency proposes to extend the administrative stay for an additional nine months.  This extension would keep the stay in effect until June 2010. 
  • EPA will also propose to repeal the grandfathering provision for PM2.5 in a separate rulemaking action.  The extended stay will provide sufficient time to enable EPA to propose and take public comment on the issues associated with repealing the grandfathering provision for PM2.5.


  • Congress established the NSR program as part of the 1977 Clean Air Act Amendments and modified it in the 1990 Amendments.  NSR is a national preconstruction clean air permitting program that provides important public health and environmental protection by ensuring: 

    1. attainment and maintenance of air quality standards when factories, industrial boilers and power plants are modified or built.  In areas that do not meet the national air quality standards, NSR ensures that new emissions do not slow progress toward cleaner air.  In areas that meet the standards, especially pristine areas like national parks, NSR ensures that new emissions fall within protective air quality standards.

    2. that state of the art control technology is installed at new plants or at existing plants that are undergoing a major modification.
  • NSR is comprised of several preconstruction review permitting regulations for stationary sources locating in attainment or nonattainment areas.  The part of NSR applicable to large (major) sources locating in attainment areas is called the Prevention of Significant Deterioration (PSD) program.
  • The grandfathering provision for PM2.5 is one of a series of amendments made to several new source review (NSR) regulations as part of the final rule entitled “Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5)” published in the Federal Register on May 16, 2008.  The grandfathering provision applies exclusively to the permitting requirements under the federal PSD program in states lacking EPA-approved PSD programs.
  • EPA’s May 2008, final rule addressed several NSR program requirements for sources that emit PM2.5 and the pollutants that contribute to its formation, i.e., precursors. The requirements addressed include:  
    • State Implementation Plans (SIPs) outlining modifications to state NSR programs to account for emissions of fine particle pollution are due to EPA in three years.  
    • Timing for implementation of the rule:
      • On its effective date the rule applied immediately:
        • in states where the federal PSD program (40 CFR 52.21) applies (either EPA implements the program directly or has delegated that responsibility to the state); and
        • in nonattainment areas of states, through the ‘transitional’ NSR provisions (contained in Appendix S of 40 CFR part 51) until EPA approves a revised SIP.
      • States with EPA-approved PSD programs, could (but are not required to) continue to use the interim approach of relying on PM10 (inhalable particles smaller than, or equal to, 10 micrometers in diameter) as a surrogate for PM2.5 for up to three years until their revised SIPs are approved, whichever is sooner.
  • This rule does not require states to account for gases that could condense to form particles (called “condensables”) in PM2.5 emissions limits in PSD or nonattainment area NSR permits until January 1, 2011 or a possible earlier date depending on the timing of an upcoming rule that will revise EPA’s test methods for measuring emissions of these condensable particles.
  • For nonattainment areas, interpollutant offset trading which will allow reductions in direct PM2.5 to offset precursor emissions increases, emissions reductions of one precursor to offset emissions increases of another precursor, and reductions in precursor emissions to offset direct PM2.5 emissions increases.
  • On July 15, 2008, and then again on February 10, 2009, the Natural Resources Defense Council and the Sierra Club petitioned EPA to reconsider and administratively stay specific parts of the final rule. The Petition objected to four parts of the final rule, including:
    1. using the new transition schedule, and continuing to allow the use of the PM10 surrogate policy, for PSD programs in states with PSD programs that EPA has approved in the states’ implementation plans;
    2. “grandfathering” permit applications that were complete, before the rule’s July 15, 2008 effective date and that rely on EPA’s PM10 Surrogacy Policy, so as to continue reviewing the permit application using PM10 emissions as a surrogate for satisfying the new PM2.5 requirements;
    3. allowing states to exclude condensable particulate matter from NSR applicability and emission control requirements until January 1, 2011; and
    4. allowing states to use EPA-recommended PM2.5 precursor trading ratios to offset PM2.5 emissions increases in PM2.5 nonattainment areas
  • On January 16, 2009, EPA denied the first petition.  However, on April 24, 2009, EPA responded to the second petition, agreeing to reconsider certain aspects of the rule and to administratively stay the challenged grandfathering provision for three months. 


  • The notice of proposed rulemaking to extend the administrative stay and other background information are also available either electronically in www.regulations.gov, EPA’s electronic public docket and comment system, or in hard copy at EPA’s Air and Radiation Docket and Information Center, Environmental Protection Agency, Room B102, 1301 Constitution Avenue, NW, Washington, DC.  Docket Number EPA-HQ-OAR-2003-0062.
  • The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air and Radiation Docket and Information Center is (202) 566-1742.


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