April 5, 2005

MEMORANDUM 

SUBJECT: Implementation of New Source Review Requirements in 

PM-2.5 Nonattainment Areas

FROM: Stephen D. Page 

Director 

TO: See Addressees 

What is the purpose of this memorandum?

This memorandum provides guidance on the implementation of the major New Source

Review (NSR) provisions under title 1, Part D of the Clean Air Act (Act) in fine particulate (PM2.5) nonattainment areas in the interim period between the effective date of the PM-2.5 National

Ambient Air Quality Standard (NAAQS) designations (April 5, 2005) and when we promulgate

regulations to implement nonattainment major NSR for the PM-2.5 NAAQS. This

memorandum also re-affirms the Memorandum from John S. Seitz, Director Office of Air

Quality Planning and Standards, to Regional Air Directors, Interim Implementation of New

Source Review for PM2.5 (Oct. 23, 1997) that applies in Prevention of Significant Deterioration

of Air Quality (PSD) programs for PM-2.5 attainment and unclassifiable areas.

Why are we issuing this memorandum?

On January 5, 2005, we promulgated nonattainment designations for the PM-2.5

NAAQS. These designations become effective on April 5, 2005. See 70 FR 944. Under Section

172(b) of the Clean Air Act (Act), the Administrator may provide States up to 3 years from the

effective date of designations to submit State Implementation Plan (SIP) revisions meeting the

applicable nonattainment requirements. In the near future, we plan to issue a proposed and final

rule setting forth the schedule for these plan submissions. We also plan to establish the

requirements that State and local agencies (States) and Tribes must meet in their implementation

plans for attainment of the PM-2.5 NAAQS including provisions to address the major NSR

requirements of title I, Part D of the Act (nonattainment major NSR program). Notwithstanding

the absence of these implementing regulations, we interpret Section 172(c)(5) of the Act to

require States to issue major New Source Review (NSR) permits for the construction and major

modifications of major stationary sources located in any nonattainment area. Accordingly, once

nonattainment designations for PM-2.5 become effective on April 5, 2005, States must issue 

major NSR permits that address the Section 173, nonattainment major NSR requirements for 

PM-2.5. We are issuing this memorandum to address how States should implement major NSR

for PM-2.5 until we promulgate the PM-2.5 implementation rule.
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The terms of 40 CFR 52.24(k), Appendix S of Part 51 provide provisions for a

transitional nonattainment major NSR program until we approve a State’s Part D major NSR

program into the SIP.

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If a State lacks authority to issue a major NSR permit consistent with these

requirements, then EPA will issue the permit under the authority of 40 CFR 52.24(k) and

Appendix S.

What applies in PM-2.5 nonattainment areas?

During the SIP development period, EPA generally requires States to issue major NSR

permits using the authority of States’ approved nonattainment major NSR programs (to the

extent these provisions apply automatically to the pollutant ) or using the authority of 40 CFR

Part 51, Appendix S (where a State lacks a nonattainment major NSR program covering the

pollutant.) 1

 However, in this case, the absence of a final PM-2.5 implementation rule makes

administering a PM-2.5 nonattainment major NSR program infeasible. Accordingly, until we

promulgate the PM-2.5 major NSR regulations, States should use a PM-10 nonattainment major

NSR program as a surrogate to address the requirements of nonattainment major NSR for the

PM-2.5 NAAQS. By applying a PM-10 nonattainment major NSR program in the interim

period, States will effectively mitigate increases in PM-2.5 emissions and protect air quality

because PM-2.5 is a subset of PM-10 emissions.

Using the surrogate PM-2.5 nonattainment major NSR program, States should assume

that a major stationary source’s PM-10 emissions represent PM-2.5 emissions and regulate these

emissions using either Appendix S or the State’s SIP-approved nonattainment major NSR

program for PM-10. In most cases, we believe that States will need to rely on Appendix S for

authority to issue permits during this interim period, because their existing State programs are

not designed to accommodate the surrogate PM-2.5 nonattainment major NSR program.2

Moreover, we expect that most States will need to implement a transitional PM-2.5

nonattainment major NSR program under Appendix S even after we finalize the PM-2.5

implementation rule until EPA approves changes to the States’ SIP programs. 

What is the major stationary source threshold and offset ratio under the surrogate PM-2.5

nonattainment major NSR program?

Section 302(j) defines a major stationary source as any source that emits or has the

potential to emit 100 tpy of any regulated pollutant, and Section 173(c) of the Act requires major

stationary sources to offset emissions increases resulting from construction or major

modifications in a ratio of at least 1 to 1. Appendix S and the majority of SIP-approved PM-10

nonattainment major NSR programs apply this major source threshold and corresponding offset

requirement. Accordingly, these provisions should be used to define the major stationary source

threshold and offset ratio for the surrogate PM-2.5 nonattainment major NSR program. This

means that during the interim period, a source is major for PM-2.5 if it emits or has the potential 
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The definition of PM-10 includes condensible particulate matter. For a detailed

discussion of condensible particulate matter, see the General Preamble for the Implementation of

Title I of the Clean Air Act Amendments of 1990 (April 16, 1992, 57 FR 13542).

to emit 100 tpy of PM-10.3

 A State that uses its SIP-approved PM-10 program as a surrogate

PM-2.5 program need not apply the separate major stationary source level for serious PM-10

nonattainment areas in the surrogate PM-2.5 program. We do not interpret the specific PM-10

requirements of Part D, Subpart 4 of the Clean Air Act to apply to PM-2.5 and do not believe

they should be applied under a surrogate PM-2.5 nonattainment major NSR program. 

For any major stationary source whose particulate emissions are predominantly coarse

particulate (particulate matter that ranges in size between PM-10 and PM-2.5), assuming that all

of the source’s PM-10 emissions represent the source’s PM-2.5 emissions could inappropriately

trigger nonattainment major NSR for PM-2.5. To avoid such an outcome, a source may quantify

its PM-2.5 fraction. One approach is to apply two test methods in series - Conditional Test

Method 40 (which adds a PM-2.5 cyclone separator between the Method 201A cyclone and

filter) followed by the Method 202 sampler to collect condensible materials. The sum of the PM

mass in these two fractions (i.e., the Conditional Test Method 40 filterable mass plus the Method

202 condensible mass) represents the primary PM-2.5 emissions from the source for the test

period. Under appropriate circumstances (e.g., construction of a new unit, where it is not

possible to conduct testing prior to start up), testing of similar existing units can be an

appropriate means of obtaining relevant emissions data. Also, other approaches for quantifying

PM-2.5 emissions besides the testing methods described above would be considered where they

can be shown to produce reliable data.

If the source demonstrates that it is not a major stationary source for PM-2.5, then the

nonattainment major NSR provisions for PM-2.5 need not be applied to the source. Conversely,

if a source is major for PM-10 and does not quantify its PM-2.5 emissions, then States should

presume that the source is major for PM-2.5 and subject it to the surrogate PM-2.5

nonattainment major NSR program if it constructs a major stationary source or undergoes a

major modification. 

What is the significant emissions rate for the surrogate PM-2.5 nonattainment major NSR

program?

On July 1, 1987, we established a significant emissions rate for PM-10 of 15 tpy. See 52

FR 24683. States should use this rate for the surrogate PM-2.5 program. At the time we

established the 15 tpy significant emissions rate, we amended only our PSD regulations to

incorporate the PM-10 value because the PM-10 NAAQS did not yet apply to nonattainment

areas. Nonetheless, we established the PM-10 significant emissions rate through notice and 
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 We intend to issue a final rule adding a PM-10 significant emissions rate of 15 tpy to

Appendix S in a forthcoming rulemaking. 

comment rulemaking; and, accordingly, the same value should apply for PM-10 under Appendix

S and State SIP-approved programs in the interim period.4

 

Will any precursors be regulated under the surrogate PM-2.5 nonattainment major NSR

program?

Not at this time. Section 302 (g) includes precursors to the formation of any air pollutant

within the term “air pollutant” to the extent the Administrator identifies the precursors for the

particular purpose for which the term “air pollutant” is used. To date, the Administrator has not

identified any precursors to the formation of PM-2.5 for purposes of the major NSR program. 

On November 5, 2003, the Administrator proposed to require that regional emissions analysis 

for the purposes of transportation conformity under Section 176(c) of the Act include certain

precursors (68 FR 62690). In the Clean Air Interstate Rule, we require states to reduce

emissions of NOx and SO2 on the grounds that they are precursors for PM-2.5. However,

several novel issues need to be resolved before the NSR program can be applied to PM-2.5

precursors (e.g., how many SO2 or NOx offsets will be needed to accommodate the fine particles

formed by these constituents; can SO2 emissions reductions be used to offset NOx emissions,

and vice versa). We plan to request comment on regulating these pollutants and other potential

PM-2.5 precursors for purposes of major NSR in the PM-2.5 implementation rule. 

What major NSR requirements apply in PM-2.5 attainment and unclassifiable areas?

The revised NAAQS for particulate matter, which include the revised NAAQS for PM-10

and new NAAQS for PM-2.5, became effective on September 16, 1997. On October, 23, 1997, 

we issued a memorandum addressing the interim use of PM-10 as a surrogate for PM-2.5 in

meeting Prevention of Significant Deterioration of Air Quality Program (PSD) provisions for

PM-2.5 as required by title 1, Part C of the Act. See Memorandum from John S. Seitz, Director

Office of Air Quality Planning and Standards, to Regional Air Directors, Interim

Implementation of New Source Review for PM2.5 (Oct. 23, 1997). This memorandum

referenced provisions of Part C of the Act which we interpret to require PSD permits for PM-2.5

upon the effective date of the PM-2.5 NAAQS, and identified significant technical difficulties

with implementing PSD for PM-2.5 because of limitations in ambient monitoring and modeling

capabilities. Because we have not promulgated the PM-2.5 implementation rule, administration

of a PM-2.5 PSD program remains impractical. Accordingly, States should continue to follow

the October 23, 1997, guidance for PSD requirements.

This memorandum presents EPA's policy on the implementation of major NSR

requirements until EPA promulgates a final PM-2.5 implementation rule. The statements in this

policy guidance do not bind State and local governments and the public as a matter of law. 
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If you have any questions concerning this memorandum, please contact Raj Rao at 

(919) 541-5344, or Lynn Hutchinson at (919) 541-5795.

Addresees: 

Michael Kenyon, Region 1

Walter Mugdan, Region 2

Judith Katz, Region 3

Beverly Bannister, Region 4

Stephen Rothblatt, Region 5

Carl Edlund, Region 6

William Spratlin, Region 7

Richard Long, Region 8

Deborah Jordan, Region 9

Rick Albright, Region 10

cc: 

Bill Harnett

Racqueline Shelton

Lydia Wegman

Richard Damberg

Brian Doster