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How EPA’s MM2A Proposed Rule Could Impact Small Businesses

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The U.S. Environmental Protection Agency (EPA) is constantly working to safeguard public health and promote transparency and accountability in environmental regulations. In a recent proposed rule, the EPA aims to amend Clean Air Act rules, a change that may significantly affect small businesses across the nation.

Proposed Rule Overview

On September 27, 2023, the EPA introduced a proposed rule, known as the Reclassification of Major Sources as Area Sources Under Section 112 of the Clean Air Act (MM2A). The primary goal of this proposal is to enhance public health protections by setting new requirements for major sources of hazardous air pollutants (HAPs) that choose to reclassify themselves as area sources under the National Emissions Standards for Hazardous Air Pollutants (NESHAP) program.

Major sources are those that emit or have the potential to emit 10 tons per year (tpy) or more of a single HAP or 25 tpy or more of a combination of HAP. In contrast, area sources emit HAP below these specified thresholds.

Key Provisions of the Proposed Rule

  1. Federally Enforceable Permit Conditions: One of the central provisions of the proposed rule is that it would require sources reclassifying from major to area sources to establish federally enforceable permit conditions. These conditions would serve as safeguards to prevent emission increases above the levels allowed by the major source NESHAP that the source was subject to before reclassification.
  2. Applicability: The proposed rule would apply to all sources choosing to reclassify, including those that have reclassified since January 25, 2018.
  3. Effective Date: Reclassification would only become effective after a permit containing the federally enforceable conditions has been issued and the EPA has been notified. Additionally, the proposed rule clarifies reporting requirements and updates information regarding the submission of confidential business information.

Background and Context

To better understand the significance of this proposed rule, it’s important to consider its background and context:
  • Hazardous Air Pollutants (HAPs): These are pollutants known or suspected to cause serious health effects, including cancer and reproductive issues. The EPA, in collaboration with state, local, and tribal governments, seeks to reduce emissions of 188 identified toxic air pollutants.
  • Clean Air Act (CAA): Section 112 of the Clean Air Act establishes the regulatory framework for controlling HAP emissions. Major sources are generally subject to stringent NESHAP regulations, while area sources may have less stringent standards.
  • Once in Always In Policy: Historically, a policy known as “Once in Always In” required facilities that were major sources of HAP on the first significant compliance date of a major source NESHAP to comply permanently with that standard. This created disincentives for major sources to reduce emissions.
  • Policy Changes: In response to Executive Orders and public feedback, the EPA withdrew the “Once in Always In” Policy and issued guidance on reclassification of major sources as area sources in January 2018.

Impact on Small Businesses

So, how does this proposed rule affect small businesses? Here are some potential implications:
  1. Compliance Costs: Small businesses that choose to reclassify may face additional costs associated with establishing federally enforceable permit conditions. These compliance costs could potentially strain the resources of smaller enterprises.
  2. Environmental Benefits: On the positive side, the proposed rule may encourage major sources, including some small businesses, to evaluate their operations and consider changes to reduce HAP emissions. This could lead to improved environmental outcomes.
  3. Regulatory Clarity: The proposed rule aims to clarify regulatory requirements, which could benefit small businesses by providing clearer guidelines and reducing regulatory uncertainty.

Conclusion

The EPA’s proposed rule for reclassifying major sources as area sources under the Clean Air Act has the potential to impact small businesses in various ways. While it introduces new compliance requirements, it also encourages emission reduction efforts, which can contribute to a cleaner environment. Small businesses should closely monitor this proposal and provide feedback during the public comment period to ensure their concerns and perspectives are considered as the rule moves forward.

Comments must be received on or before November 13, 2023.

Jeremy Hancher is the EMAP Program Manager located at the Widener University SBDC.  He holds over 15 years of experience in environmental compliance, environmental policy, and program management.  He is proud to be the team lead of the award-winning EMAP program which provides free and confidential environmental assistance to the Pennsylvania small business community in fulfillment of the requirements of the Pennsylvania Air Pollution Control Act and Section 507 of the federal Clean Air Act.
In 2015, Jeremy was part of the team effort when EMAP was recognized by US EPA Administrator Gina McCarthy for Outstanding Accomplishments by a State Small Business Environmental Assistance Provider in Providing Technical Environmental Assistance to the Small Business Community. Jeremy holds a Bachelor’s degree from the University of Pittsburgh, a Master’s degree from the University of Pennsylvania, and a certificate from the Wharton School.