6560-50-P 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Parts 51 and 52 

[EPA-HQ-OAR-2003-0062; FRL- ] 

RIN 2060-AN86 

Final Rule for Implementation of the New Source Review (NSR) Program for 

Particulate Matter Less Than 2.5 Micrometers (PM2.5) 

AGENCY: Environmental Protection Agency (EPA). 

ACTION: Final rule. 

SUMMARY: The EPA is finalizing regulations to implement the New Source Review 

(NSR) program for fine particulate matter (that is, particles with an aerodynamic 

diameter less than or equal to a nominal 2.5 micrometers, generally referred to as 

“PM2.5”). The NSR program was created by the Clean Air Act (Act or CAA) to ensure 

that stationary sources of air pollution are constructed or modified in a manner that is 

consistent with air quality goals in the area. 

The Clean Air Fine Particle Implementation Rule, which was proposed in the 

Federal Register on November 1, 2005, included requirements and guidance for State and 

local air pollution agencies to follow in developing State implementation plans (SIPs) and 

also the NSR provisions. The final implementation rule that was promulgated on 

April 25, 2007, included all the SIPs related provisions. In this rulemaking, EPA is 

finalizing the NSR provisions of the November 1, 2005 proposed rule including the major 

source threshold, significant emissions rate, and offset ratios for PM2.5, interpollutant 

trading for offsets and applicability of NSR to PM2.5 precursors. 

1
 
DATES: This final rule is effective on [INSERT DATE 60 DAYS AFTER DATE OF 

PUBLICATION IN THE FEDERAL REGISTER]. 

ADDRESSES: The EPA has established a docket for this action under Docket ID No. 

EPA-HQ-OAR-2003-0062. All documents in the docket are listed on the 

www.regulations.gov web site. Although listed in the index, some information may not 

be publicly available, e.g., CBI or other information whose disclosure is restricted by 

statute. Certain other material, such as copyrighted material, is not placed on the Internet 

and will be publicly available only in hard copy form. Publicly available docket 

materials are available either electronically through www.regulations.gov or in hard copy 

at the Air Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Avenue, 

Northwest, Washington, DC. 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 Docket is 

(202) 566-1742. 

FOR FURTHER INFORMATION CONTACT: Mr. Raghavendra (Raj) Rao, Air 

Quality Policy Division, Office of Air Quality Planning and Standards (C504-03), U.S. 

Environmental Protection Agency, Research Triangle Park, North Carolina 27711, 

telephone number: (919) 541-5344, facsimile number: (919) 541-5509, e-mail address: 

rao.raj@epa.gov; or Mr. Dan deRoeck, at the same address, telephone 919-541-5593, or 

e-mail at deroeck.dan@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. General Information 

A. Does this action apply to me? 

2
 
 

Entities affected by this rule include sources in all industry groups. The majority 

of sources potentially affected are expected to be in the following groups: 

Industry group 

Electric services .......................................
 

Petroleum refining ...................................
 

Industrial inorganic chemicals .................
 

Industrial organic chemicals ....................
 

Miscellaneous chemical products ............
 

Natural gas liquids ...................................
 

Natural gas transport................................
 

Pulp and paper mills.................................
 

Paper mills ...............................................
 

Automobile manufacturing ......................
 

Pharmaceuticals .......................................
 

NAICSa
 

221111, 221112, 221113, 221119, 221121, 

221122 

32411 

325181, 32512, 325131, 325182, 211112, 

325998, 331311, 325188 

32511, 325132, 325192, 325188, 325193, 

32512, 325199 

32552, 32592, 32591, 325182, 32551 

211112 

48621, 22121 

32211, 322121, 322122, 32213 

322121, 322122 

336111, 336112, 336712, 336211, 336992, 

336322, 336312, 33633, 33634, 33635, 

336399, 336212, 336213 

325411, 325412, 325413, 325414 

a

 North American Industry Classification System. 

Entities affected by this rule also include States, local reviewing authorities, and 

Indian country with new and modified major stationary sources. 

B. Where can I get a copy of this document and other related information? 

In addition to being available in the docket, an electronic copy of this final rule 

will also be available on the World Wide Web. Following signature by the EPA 

Administrator, a copy of this final rule will be posted in the regulations and standards 

section of our NSR home page located at http://www.epa.gov/nsr. 

C. How is this preamble organized? 

3
 
The information presented in this preamble is organized as follows: 

I.	 General Information 

A.	 Does this action apply to me? 

B.	 Where can I get a copy of this document and other related information? 

C.	 How is this preamble organized? 

II.	 Purpose 

III.	 Background 

A.	 New Source Review (NSR) Program 

B.	 Fine Particulate Matter and the NAAQS for PM2.5 

C.	 Implementation of NSR for PM2.5 

IV.	 Overview of This Final Action 

V.	 Rationale for Final Actions 

A. Applicability of NSR to Precursors of PM2.5 in the Ambient Air 

1. What is EPA’s legal authority to regulate precursors? 

2. What is EPA’s approach for addressing precursors? 

3. Final Action on SO2 

4. Final Action on NOX 

5. Final Action on VOC 

6. Final Action on Ammonia 

B.	 Major Stationary Source Threshold for PM2.5 

C.	 Significant Emissions Rate for Direct Emissions of PM2.5 

D.	 Significant Emissions Rates for PM2.5 Precursors 

E.	 Condensable PM Emissions 

F.	 Prevention of Significant Deterioration (PSD) Program Requirements 

1. How must BACT be implemented for PM2.5? 

2. How does EPA plan to address PM2.5 Increments, Significant Impact 

Levels (SILs), and Significant Monitoring Concentrations 

(SMCs)? 

3. What is the ambient air quality analysis requirement for PM2.5? 

4. How must the PSD preconstruction monitoring requirement be 

implemented for PM2.5? 

G.	 Nonattainment New Source Review (NA NSR) Requirements 

1. What is the required offset ratio for direct PM2.5 emissions? 

2. Which precursors are subject to the offset requirement? 

3. What is the required offset ratio for PM2.5 precursors? 

4. Is interpollutant trading allowable to comply with offset requirements? 

H.	 How will the transition to the PM2.5 PSD requirements occur? 

1. Background 

2. Transition for “Delegated States” 

3. Transition for “SIP-Approved States” 

I. How will the transition to the PM2.5 NA NSR requirements occur? 

1. Background 

2. Transition 

3. Implementation of NSR Under the “Emissions Offset Interpretative 

4
 
 

Ruling” (40 CFR part 51, appendix S) with Revisions 

J.	 Does major NSR apply to PM2.5 precursors during the SIP development 

period? 

K.	 Are there any Tribal concerns? 

L.	 What are the requirements for minor NSR for PM2.5? 

M.	 Rural Transport Areas 

VI.	 Statutory and Executive Order Reviews 

A.	 Executive Order 12866: Regulatory Planning and Review 

B.	 Paperwork Reduction Act 

C.	 Regulatory Flexibility Act 

D.	 Unfunded Mandates Reform Act 

E.	 Executive Order 13132 - Federalism 

F.	 Executive Order 13175 - Consultation and Coordination with Indian 

Tribal Governments 

G.	 Executive Order 13045 - Protection of Children from Environmental 

Health and Safety Risks 

H.	 Executive Order 13211 - Actions That Significantly Affect Energy 

Supply, Distribution, or Use 

I.	 National Technology Transfer and Advancement Act 

J.	 Executive Order 12898 - Federal Actions to Address Environmental 

Justice in Minority Populations and Low-Income Populations 

K.	 Congressional Review Act 

L.	 Petitions for Judicial Review 

M.	 Determination Under Section 307(d) 

VII.	 Statutory Authority 

II. Purpose 

The purpose of this rulemaking is to finalize the major NSR program provisions 

for PM2.5. This final rule supplements the final implementation rule for PM2.5 (excluding 

the NSR provisions) that we1

 promulgated on April 25, 2007 at 72 FR 20586. This final 

action on the bulk of the major NSR program for PM2.5 along with our proposed rule on 

increments, SILs, and SMC, when final, will represent the final elements necessary to 

implement a PM2.5 PSD program. When both rules are promulgated and in effect, the 

PM2.5 PSD program will no longer use a PM10 program as a surrogate, as has been the 

1

 In this proposal, the terms “we,” “us,” and “our” refer to the EPA and the terms 

“you” and “your” refer to the owners or operators of stationary sources of air pollution. 

5
 
 

practice under our existing guidance. 

III. Background 

A. New Source Review (NSR) Program 

The existing regulations require both major and minor NSR programs to address 

any pollutant for which there is a National Ambient Air Quality Standard (NAAQS) and 

precursors to the formation of such pollutant when identified for regulation by the 

Administrator. This final rule amends the NSR regulations to establish the minimum 

elements for State, local, and Tribal agency programs implementing NSR for the PM2.5 

NAAQS. This preamble also explains what interim provisions would apply with respect 

to PM2.5 during the State Implementation Plan (SIP) development period. 

The NSR program is a preconstruction permitting program that applies when a 

source is constructed or modified. The NSR program is composed of three different 

programs: 

• Prevention of Significant Deterioration (PSD); 

• Nonattainment NSR (NA NSR); and 

• Minor NSR. 

We often refer to the PSD and NA NSR programs together as the major NSR program 

because these programs regulate only major sources.2 

The PSD program applies when a major source that is located in an area that is 

designated as attainment or unclassifiable for any criteria pollutant is constructed or 

2

 The Act uses the terms “major emitting facility” to refer to sources subject to the 

PSD program, and “major stationary source” to refer to sources subject to NA NSR. See 

CAA sections 165, 169, 172(c)(5), and 302(j). For ease of reference, we use the term 

“major source” to refer to both terms. 

6
 
 

undergoes a major modification.3, 4 The NA NSR program applies when a major source 

that is located in an area that is designated as nonattainment for any criteria pollutant is 

constructed or undergoes a major modification. The minor NSR program addresses both 

major and minor sources that undertake construction or modification activities that do not 

qualify as major, and it applies regardless of the designation of the area in which a source 

is located. 

The national regulations that apply to each of these programs are located in the 

Code of Federal Regulations (CFR) as shown in the following table: 

Program Applicable regulations 

PSD ................................ 40 CFR 52.21, 40 CFR 51.166, 40 CFR 51.165(b) 

NA NSR ......................... 40 CFR 52.24, 40 CFR 51.165, 40 CFR part 51, appendix S 

Minor NSR..................... 40 CFR 51.160-164 

The PSD requirements include but are not limited to: 

•	 Installation of Best Available Control Technology (BACT); 

•	 Air quality monitoring and modeling analyses to ensure that a project’s 

emissions will not cause or contribute to a violation of any NAAQS or 

maximum allowable pollutant increase (PSD increment); 

•	 Notification of Federal Land Manager of nearby Class I areas; and 

• Public comment on the permit. 

Nonattainment NSR requirements include but are not limited to: 

•	 Installation of Lowest Achievable Emission Rate (LAER) control technology; 

3

 The term “criteria pollutant” means a pollutant for which we have set a NAAQS. 

4

 In addition, the PSD program applies to most noncriteria regulated pollutants. 

7
 
•	 Offsetting new emissions with creditable emissions reductions; 

•	 Certification that all major sources owned and operated in the State by the 

same owner are in compliance with all applicable requirements under the Act; 

•	 An alternative siting analysis demonstrating that the benefits of the proposed 

source significantly outweigh the environmental and social costs imposed as a 

result of its location, construction, or modification; and 

•	 Public comment on the permit. 

Minor NSR programs must meet the statutory requirements in section 

110(a)(2)(C) of the Act, which requires “... regulation of the modification and 

construction of any stationary source ... as necessary to assure that national ambient air 

quality standards are achieved.” 

B. Fine Particulate Matter and the NAAQS for PM2.5 

Fine particles in the atmosphere are made up of a complex mixture of 

components. Common constituents include sulfate (SO4); nitrate (NO3); ammonium; 

elemental carbon; a great variety of organic compounds; and inorganic material 

(including metals, dust, sea salt, and other trace elements) generally referred to as 

“crustal” material, although it may contain material from other sources. Airborne 

particulate matter (PM) with a nominal aerodynamic diameter of 2.5 micrometers or less 

(a micrometer is one-millionth of a meter, and 2.5 micrometers is less than one-seventh 

the average width of a human hair) are considered to be “fine particles,” and are also 

known as PM2.5. “Primary” particles are emitted directly into the air as a solid or liquid 

particle (e.g., elemental carbon from diesel engines or fire activities, or condensable 

organic particles from gasoline engines). “Secondary” particles (e.g., sulfate and nitrate) 

8
 
form in the atmosphere as a result of various chemical reactions. 

The health effects associated with exposure to PM2.5 are significant. 

Epidemiological studies have shown a significant correlation between elevated PM2.5 

levels and premature mortality. Other important effects associated with PM2.5 exposure 

include aggravation of respiratory and cardiovascular disease (as indicated by increased 

hospital admissions, emergency room visits, absences from school or work, and restricted 

activity days), lung disease, decreased lung function, asthma attacks, and certain 

cardiovascular problems. Individuals particularly sensitive to PM2.5 exposure include 

older adults, people with heart and lung disease, and children. 

On July 18, 1997, we revised the NAAQS for PM to add new standards for fine 

particles, using PM2.5 as the indicator. We established health-based (primary) annual and 

24-hour standards for PM2.5 (62 FR 38652). We set an annual standard at a level of 

15 micrograms per cubic meter (μg/m3

) and a 24-hour standard at a level of 65 μg/m3. At 

the time we established the primary standards in 1997, we also established welfare-based 

(secondary) standards identical to the primary standards. The secondary standards are 

designed to protect against major environmental effects of PM2.5 such as visibility 

impairment, soiling, and materials damage. 

On October 17, 2006, we revised the primary and secondary NAAQS for PM2.5 

and PM10. In that rulemaking, we reduced the 24-hour NAAQS for PM2.5 to 35 μg/m3 

and retained the existing annual PM2.5 NAAQS of 15 μg/m3

. In addition, we retained 

PM10 as the indicator for coarse PM, retained the existing PM10 24-hour NAAQS of 

150 μg/m3

, and revoked the annual PM10 NAAQS (which had previously been set at 50 

μg/m3). See 71 FR 61236. 

9
 
 

 

C. Implementation of NSR for PM2.5 

After we promulgated the NAAQS for PM2.5 in 1997, we issued a guidance 

document entitled “Interim Implementation for the New Source Review Requirements for 

PM2.5” (John S. Seitz, EPA, October 23, 1997).5 As noted in that guidance, section 165 

of the Act suggests that PSD requirements become effective for a new NAAQS upon the 

effective date of the NAAQS. Section 165(a)(1) of the Act provides that no new or 

modified major source may be constructed without a PSD permit that meets all of the 

section 165(a) requirements with respect to the regulated pollutant. Moreover, section 

165(a)(3) provides that the emissions from any such source may not cause or contribute 

to a violation of any NAAQS. Also, section 165(a)(4) requires BACT for each pollutant 

subject to PSD regulation. The 1997 guidance stated that sources would be allowed to 

use implementation of a PM10 program as a surrogate for meeting PM2.5 NSR 

requirements until certain difficulties were resolved, primarily the lack of necessary tools 

to calculate the emissions of PM2.5 and related precursors, the lack of adequate modeling 

techniques to project ambient impacts, and the lack of PM2.5 monitoring sites. 

On April 5, 2005, we issued a guidance document entitled “Implementation of 

New Source Review Requirements in PM-2.5 Nonattainment Areas” (Stephen D. Page, 

EPA).6

 This memorandum provides guidance on the implementation of the 

nonattainment major NSR provisions in PM2.5 nonattainment areas in the interim period 

between the effective date of the PM2.5 NAAQS designations (April 5, 2005) and the 

5

 Available in the docket for this rulemaking, ID No. EPA-HQ-OAR-2003-0062, 

and at http:/www.epa.gov/region07/programs/artd/air/nsr/nsrmemos/pm25.pdf . 

6

 Available in the docket for this rulemaking, ID. No. EPA-HQ-OAR-2003-0062, 

and at http:/www.epa.gov/nsr/documents/nsrmemo.pdf. 

10
 
promulgation date of the final NSR regulations reflected in this action. Besides affirming 

the continuation of the Seitz guidance memo in PM2.5 attainment areas, the April 5, 2005 

memo recommends that until we promulgate the PM2.5 major NSR regulations, States 

should use a PM10 nonattainment major NSR program as a surrogate to address the 

requirements of nonattainment major NSR for PM2.5. 

On November 1, 2005, we proposed a rule to implement the 1997 PM2.5 NAAQS, 

including proposed revisions to the NSR program (70 FR 65984). As discussed above, 

this action finalizes the portion of that proposal related to NSR. The other portions of 

that proposal, concerning attainment dates, SIP submittals, reasonable further progress 

(RFP) requirements, etc., were finalized on April 25, 2007 (72 FR 20586). 

On September 21, 2007, we proposed additional elements for the PSD program 

for PM2.5 including PM2.5 “increments,” significant impact levels (SILs), and significant 

monitoring concentrations (SMCs). (72 FR 54112) Increments are the maximum 

allowable increases over baseline concentrations that can be permitted to occur when a 

major source is constructed or modified. This is one mechanism by which the PSD 

program prevents significant deterioration in air quality. A SIL defines the level of 

ambient air impact that is considered a “significant contribution” to air quality. If the 

modeled maximum ambient impacts of a new source or modification are below the SILs, 

the source: (1) is presumed not to cause or contribute significantly to a PSD increment or 

NAAQS violation, and (2) is not required to perform the multiple-source, cumulative 

impacts assessments that are otherwise required under PSD. An SMC defines the level of 

modeled ambient air impact below which the reviewing authority may exempt a new or 

modified source from conducting the preconstruction monitoring that may otherwise be 

11
 
required under PSD. The reviewing authority may also exempt the source from 

preconstruction monitoring if the existing monitored ambient concentration is less than 

the SMC. This final action on the bulk of the major NSR program for PM2.5 along with 

our proposed rule on increments, SILs, and SMC, when final, will represent the final 

elements necessary to implement a PM2.5 PSD program. When both rules are 

promulgated and in effect, the PM2.5 PSD program will no longer use a PM10 program as 

a surrogate, as has been the practice under our existing guidance. 

IV. Overview of This Final Action 

The table below summarizes the main elements of the existing NSR program that 

this action addresses for PM2.5 as a regulated NSR pollutant. The table indicates our final 

position on an issue and whether our position has changed based on comments received. 

Our final action for each element, or where appropriate, explanation of implementation 

under existing regulations, is addressed in detail in the referenced sections of this 

preamble. 

NSR program element Final action Section 

Applicability to PM2.5 precursors.... SO2 – Must be regulated as precursor 

NOX – Presumed regulated 

VOC – Presumed not regulated 

Ammonia – Presumed not regulated 

V.A 

PSD major source threshold............ 100/250 tons per year (tpy)....................... V.B 

NA NSR major source threshold .... 100 tpy ..................................................... V.B 

Significant emissions rate ............... Direct PM2.5 emissions – 10 tpy 

SO2 precursor – 40 tpy 

NOX precursor – 40 tpy, if regulated 

V.C & 

V.D 

Condensable PM2.5 emissions......... Included in direct PM2.5 emissions for 

major NSR applicability 

determinations after the end of the 

transition period (changed based on 

comments received) 

V.E 

12
 
 

Control technology: BACT and Applies for direct PM2.5 emissions, SO2, V.F.1 & 

LAER and other precursors if regulated. V.G 

Prevention of significant 

deterioration 

Air quality impact analysis ............. 

Preconstruction monitoring.............
 

NA NSR Statewide compliance 

and alternative siting analyses 

NA NSR offsets .............................. 

Interpollutant offsetting ..................
 

Transition for PSD ..........................
 

Transition for NA NSR...................
 

SIP development period..................
 

Tribal Concerns...............................
 

Minor NSR......................................
 

NSR transport option ......................
 

Increments, SILs and SMCs covered in a 

separate rulemaking 

Applies for PM2.5 ......................................
 

Applies for PM2.5 (finalizing options 1 

& 3) 

Applies for direct PM2.5 emissions and 

precursors, if regulated 

Applies for direct PM2.5 emissions and 

precursors, if regulated 

Allowed on a regional or statewide 

basis; EPA is issuing guidance with 

recommended regional hierarchies 

and trading ratios (changed based on 

comments received) 

Continues to use PM10 as a surrogate 

Applies through an approved SIP or 

through 40 CFR part 51, appendix S 

Clarifies that major NSR does not apply 

to precursors during the SIP 

development period in attainment 

areas (changed based on comments 

received) 

Cross references to proposed NSR rules 

for Indian country 

Clarifies that State and local regulatory 

programs must include PM2.5 

requirements for minor sources 

Transport classification not available .......
 

V.F.2 

V.F.3 

V.F.4 

V.G 

V.G.1 - 3 

V.G.4 

V.H 

V.I 

V.J 

V.K 

V.L 

V.M 

The provisions of the PM2.5 major NSR program finalized in this action are 

codified as revisions in the previously existing regulatory text. The revisions to NA NSR 

are codified in 40 CFR 51.165 and appendix S to 40 CFR part 51. The PSD revisions are 

codified in 40 CFR 51.166 and 52.21. 

13
 
 

V. Rationale for Final Actions 

In this section we discuss each element of our proposal for this rulemaking, 

explain our final action, discuss the rationale for our final action, and summarize the 

major public comments we received. The full summary of public comments on the 

proposal, along with our responses, can be found in the docket for this rulemaking.7 

A. Applicability of NSR to Precursors of PM2.5 in the Ambient Air 

Scientific research has shown that various pollutants can contribute to ambient 

PM2.5 concentrations. In addition to direct PM2.5 emissions, these include the following 

precursors: 

• Sulfur dioxide (SO2); 

• Oxides of nitrogen (NOX); 

• Volatile organic compounds (VOC); and 

• Ammonia. 

These gas-phase precursors undergo chemical reactions in the atmosphere to form 

secondary PM. Formation of secondary PM depends on numerous factors including the 

concentrations of precursors; the concentrations of other gaseous reactive species; 

atmospheric conditions including solar radiation, temperature, and relative humidity; and 

the interactions of precursors with preexisting particles and with cloud or fog droplets. 

Several atmospheric aerosol species, such as ammonium nitrate and certain organic 

compounds, are semi-volatile and are found in both gas and particle phases. Given the 

7

 See “Implementation of the New Source Review (NSR) Program for Particulate 

Matter Less Than 2.5 Micrometers in Diameter (PM2.5); Response to Comments,” U.S. 

Environmental Protection Agency. It can be viewed or downloaded at 

www.regulations.gov, Docket ID No. EPA-HQ-OAR-2003-0062. 

14
 
complexity of PM formation processes, new information from the scientific community 

continues to emerge to improve our understanding of the relationship between sources of 

PM precursors and secondary particle formation. 

Precursors contribute significantly to ambient PM2.5 concentrations, producing 

approximately half of the concentration nationally. In most areas of the country, PM2.5 

precursor emissions are major contributors to ambient PM2.5 concentrations. The relative 

contribution to ambient PM2.5 concentrations from each of these pollutants varies by area. 

The relative effect of reducing emissions of these pollutants is also highly variable. 

Some PM2.5 precursors are already subject to major NSR under other NAAQS, as 

shown in the following table: 

PM2.5 precursor Existing program coverage for major NSR applicability 

NOX ........................................ NA NSR and PSD for NO2 and Ozone 

SO2 ......................................... NA NSR and PSD for SO2 

VOC ....................................... NA NSR and PSD for Ozone 

Ammonia................................ No coverage for NSR 

In the subsections that follow, we first discuss our legal authority under the Act 

for regulating precursors to the formation of criteria pollutants, and then discuss our final 

action for each of the PM2.5 precursors. 

1. What is EPA’s legal authority to regulate precursors? 

As we discussed in the November 1, 2005 proposal, we interpret the Act to not 

only provide explicit authority for EPA to regulate precursors, but also to grant us 

discretion to determine how to address precursors for particular regulatory purposes. 

This reading is based on section 302(g) of the Act, which defines the term “air pollutant” 

to include “any precursors to the formation of any air pollutant, to the extent the 

15
 
Administrator has identified such precursor or precursors for the particular purpose for 

which the term ‘air pollutant’ is used.” The first clause of this second sentence in 

section 302(g) explicitly authorizes the Administrator to identify and regulate precursors 

as air pollutants under other parts of the Act. In addition, the second clause of the 

sentence indicates that the Administrator has discretion to identify which pollutants 

should be classified as precursors for particular regulatory purposes. Thus, we do not 

necessarily construe the Act to require that EPA identify a particular precursor as an air 

pollutant for all regulatory purposes where it can be demonstrated that various programs 

under the Act address different aspects of the air pollutant problem. Likewise, we do not 

interpret the Act to require that EPA treat all precursors of a particular pollutant the same 

under any one program when there is a basis to distinguish between such precursors 

within that program. For example, in a recent rule addressing PM2.5 precursors for 

purposes of the transportation conformity program, we chose to adopt a different 

approach for one precursor based on the limited emissions of that precursor from onroad 

mobile sources and the degree to which it contributes to PM2.5 concentrations (70 FR 

24280, May 6, 2005). 

Other provisions of the Act reinforce our reading of section 302(g) to mean that 

Congress intended precursors to NAAQS pollutants to be subject to the air quality 

planning and control requirements of the Act, but also recognized that there may be 

circumstances where it is not appropriate to subject precursors to certain requirements of 

the Act. Section 182 of the Act provides for the regulation of NOX and VOC as 

precursors to ozone in ozone nonattainment areas, but also provides in section 182(f) that 

major stationary sources of NOX (an ozone precursor) are not subject to emission 

16
 
reduction requirements for ozone where the State shows through modeling that NOX 

reductions do not decrease ozone. Section 189(e) provides for the regulation of PM10 

precursors in PM10 nonattainment areas, but also recognizes that there may be certain 

circumstances (e.g., if precursor emission sources do not significantly contribute to PM10 

levels) where it is not appropriate to apply control requirements to PM10 precursors. The 

legislative history of section 189(e) recognized the complexity behind the science of 

precursor transformation into PM10 ambient concentrations and the need to harmonize the 

regulation of PM10 precursors with other provisions of the Act: 

The Committee notes that some of these precursors may well be controlled 

under other provisions of the CAA. The Committee intends that . . .the 

Administrator will develop models, mechanisms, and other methodology 

to assess the significance of the PM10 precursors in improving air quality 

and reducing PM10. Additionally, the Administrator should consider the 

impact on ozone levels of PM10 precursor controls. The Committee 

expects the Administrator to harmonize the PM10 reduction objective of 

this section with other applicable regulations of this CAA regarding PM10 

precursors, such as NOX. 

See H. Rpt. 101-490, Pt. 1, at 268 (May 17, 1990), reprinted in S. Prt. 103-38, 

Vol. II, at 3292. 

In summary, section 302(g) of the Act clearly calls for the regulation of precursor 

pollutants, but the Act also identifies circumstances when it may not be appropriate to 

regulate precursors and gives the Administrator discretion to determine how to address 

particular precursors under various programs required by the Act. Due to the 

complexities associated with precursor emissions and their variability from location to 

location, we believe that in certain situations it may not be effective or appropriate to 

control a certain precursor under a particular regulatory program or for EPA to require 

similar control of a particular precursor in all areas of the country. 

17
 
The term “air pollutant,” as defined in section 302(g), is incorporated into the 

NSR provisions for various purposes. Thus, we interpret section 302(g) of the Act to 

require us to consider how to address precursors under the NSR program. 

With regard to PSD, section 165(a)(3) of the Act states that new or modified 

major sources must demonstrate that emissions “will not cause, or contribute to, air 

pollution in excess of any ... NAAQS in any air quality control region ....” A source 

could not reasonably make this demonstration without considering precursors that EPA 

has identified for this purpose. Section 165(a)(4) of the Act states that a new or modified 

source must apply BACT “for each pollutant subject to regulation under this Act emitted 

from, or which results from, such facility.” The phrase “emitted from, or which results 

from” indicates that the statute is not limited to direct emissions, but rather extends to 

precursors as well. 

With regard to NA NSR, sections 172(c)(4) and 173 require States to 

demonstrate, among other things, that emissions from new or modified major sources are 

consistent with the achievement of “reasonable further progress.” Reasonable further 

progress is further defined as reductions of the relevant air pollutant, which is defined in 

section 302(g) to include precursors identified by EPA as subject to regulation for that 

purpose. 

2. What is EPA’s approach for addressing precursors? 

As proposed, we are finalizing different approaches for addressing the individual 

precursors to PM2.5 under the Act’s NSR provisions. Generally, where the scientific data 

and modeling analyses provide reasonable certainty that the pollutant’s emissions are a 

significant contributor to ambient PM2.5 concentrations, we believe that pollutant should 

18
 
be identified as a “regulated NSR pollutant” and subject to the PM2.5 NSR provisions. 

Conversely, where the effect of a pollutant’s emissions on ambient PM2.5 concentrations 

is subject to substantial uncertainty, such that in some circumstances the pollutant may 

not result in formation of PM2.5, or control of the pollutant may have no effect or may 

even aggravate air quality, we generally believe it is unreasonable to establish a 

nationally-applicable presumption that the pollutant is a regulated NSR pollutant subject 

to the requirements of NSR for PM2.5. We discuss our final action with respect to each of 

the PM2.5 precursors and the basis for that action in sections V.A.2 through 5. 

For those precursors that are either presumed to be regulated or not regulated 

(NOX, VOC, and ammonia), a State program need not follow the presumed approach if it 

can be demonstrated that the precursor in question is not, or is, a “significant contributor” 

to PM2.5 concentrations within the specific area. “Significant contribution” in this 

context is a different concept than that in section 110(a)(2)(D) of the Act. Section 

110(a)(2)(D) of the Act prohibits States from emitting air pollutants in amounts which 

significantly contribute to nonattainment or other air quality problems in other States. 

Consistent with the previous discussion of sections 189(e) and 302(g), we are clarifying 

that the use in this NSR implementation rule of the term “significant contribution” to the 

area’s PM2.5 concentration means that a significant change in emissions of the precursor 

from sources in the area would be projected to provide a significant change in PM2.5 

concentrations in the area. For example, if modeling indicates that a reduction in an 

area’s NOX emissions would reduce ambient PM2.5 levels in the area, but that a reduction 

in ammonia emissions would result in virtually no change in ambient PM2.5 levels, this 

would suggest that NOX is a significant contributor but that ammonia is not. We are not 

19
 
establishing in this rule a quantitative test for determining whether PM2.5 levels in an area 

change significantly in response to reductions in precursor emissions in the area. 

However, in considering this question, it is relevant to consider that relatively small 

reductions in PM2.5 levels are estimated to result in worthwhile public health benefits. 

This approach to identifying a precursor as a regulated NSR pollutant reflects 

atmospheric chemistry conditions in the area and the magnitude of emissions of the 

precursor in the area. Assessments of whether it is technically feasible and cost effective 

to control particular emissions units at a source should be part of the later BACT 

determination within a permit action, and should occur after the basic assessment of 

which precursors are to be regulated NSR pollutants in an area is completed. 

Most commenters did not question our legal authority to identify and regulate 

PM2.5 precursors. However, some commenters argued, based on the language of sections 

302(g) and 189(e) of the Act, that once we have designated a compound as a precursor, 

we do not have discretion to presumptively exclude it from NSR requirements. Other 

commenters on this issue indicated that we do have such discretion, based on the de 

minimis doctrine of the Alabama Power decision or on practical implementation 

considerations such as the uncertainty in measuring and modeling the effect of PM2.5 

precursors. 

We do not agree with the comment that the Act does not give us discretion to 

presumptively exclude a PM2.5 precursor from NSR requirements. As stated previously, 

we believe that section 302(g) allows the Administrator to presumptively not require 

certain precursors to be addressed in PM2.5 NSR programs generally, while allowing the 

State or EPA to make a finding for a specific area to override the general presumption. In 

20
 
the following pollutant-specific sections of this preamble, we find that at this time there is 

sufficient uncertainty regarding whether certain precursors significantly contribute to 

PM2.5 concentrations in all areas such that the policy set forth in this rule does not 

presumptively require certain precursors (ammonia, VOC) to be controlled in each area. 

However, the State or EPA may reverse the presumption and regulate a precursor if it 

provides a demonstration showing that the precursor is a significant contributor to PM2.5 

concentrations in the area. In addition, if in the State’s NSR program adoption process a 

commenter provides additional information suggesting an alternative policy for 

regulating a particular precursor, the State will need to respond to this information in its 

rulemaking action. 

Hence, we continue to believe that the Act provides us the authority not only to 

identify and regulate precursors to PM2.5, but also to treat precursors of the same 

pollutant differently under the same program. 

3. Final Action on SO2

 Sulfur dioxide is emitted mostly from the combustion of fossil fuels in boilers 

operated by electric utilities and other industrial sources. Less than 20 percent of SO2 

emissions nationwide are from other sources, mainly other industrial processes such as 

oil refining and pulp and paper production. The formation of sulfuric acid from the 

oxidation of SO2 is an important process affecting most areas in North America. There 

are three different pathways for this transformation. 

First, gaseous SO2 can be oxidized by the hydroxyl radical (OH) to create sulfuric 

acid. This gaseous SO2 oxidation reaction occurs slowly and only in the daytime. 

Second, SO2 can dissolve in cloud water (or fog or rainwater), and there it can be 

21
 
oxidized to sulfuric acid by a variety of oxidants, or through catalysis by transition metals 

such as manganese or iron. If ammonia is present and taken up by the water droplet, then 

ammonium sulfate will form as a precipitate in the water droplet. After the cloud 

changes and the droplet evaporates, the sulfuric acid or ammonium sulfate remains in the 

atmosphere as a particle. This aqueous phase production process involving oxidants can 

be very fast; in some cases all the available SO2 can be oxidized in less than an hour. 

Third, SO2 can be oxidized in reactions in the particle-bound water in the aerosol 

particles themselves. This process takes place continuously, but only produces 

appreciable sulfate in alkaline (dust, sea salt) coarse particles. Oxidation of SO2 has also 

been observed on the surfaces of black carbon and metal oxide particles. During the last 

20 years, much progress has been made in understanding the first two major pathways, 

but some important questions still remain about the smaller third pathway. Models 

indicate that more than half of the sulfuric acid in the eastern United States and in the 

overall atmosphere is produced in clouds. 

 The sulfuric acid formed from these pathways reacts readily with ammonia to 

form ammonium sulfate, (NH4)2SO4. If there is not enough ammonia present to fully 

neutralize the produced sulfuric acid (one molecule of sulfuric acid requires two 

molecules of ammonia), part of it exists as ammonium bisulfate; NH4HSO4 (one 

molecule of sulfuric acid and one molecule of ammonia) and the particles are more acidic 

than ammonium sulfate. In certain situations (in the absence of sufficient ammonia for 

neutralization), sulfate can exist in particles as sulfuric acid, H2SO4. Sulfuric acid often 

exists in the plumes of stacks where SO2, sulfur trioxide (SO3), and water vapor are in 

much higher concentrations than in the ambient atmosphere, but these concentrations 

22
 
 

become quite small as the plume is cooled and diluted by mixing. 

Because sulfate is a significant component (e.g., ranging from 9 percent to 

40 percent) of PM2.5 concentrations, and contributes to other air quality problems in all 

regions of the country, we proposed to require States to treat SO2 as a PM2.5 precursor in 

all areas. We are retaining the same approach for SO2 in this final rule. Sulfate is an 

important precursor to PM2.5 formation in all areas, and has a strong regional impact on 

PM2.5 concentrations. This approach is consistent with past EPA regulations, such as the 

Clean Air Interstate Rule (CAIR), the Clean Air Visibility Rule, the Acid Rain rules, and 

the Regional Haze rule, each of which require SO2 reductions to address fine particle 

pollution and related air quality problems. Finally, we do not believe that regulating SO2 

as a precursor to PM2.5 is likely to add a major burden to sources, as SO2 is already 

regulated as part of the NSR program for the SO2 NAAQS. 

Most commenters who addressed this issue agreed that SO2 should be regulated as 

a PM2.5 precursor, although one only supported regulation of SO2 as a precursor in NA 

NSR, and not under PSD. Two commenters disagreed that SO2 acts as precursors to 

PM2.5 in all cases and indicated that it should not be regulated as an “always-in” 

precursor. 

We find the commenters’ arguments against regulating SO2 as a precursor 

unpersuasive. Sulfate is a significant fraction of PM2.5 mass in all nonattainment areas 

currently, and although large SO2 reductions are projected from electric generating units 

with the implementation of the CAIR program, sulfate is still projected to be a key 

contributor to PM2.5 concentrations in the future, in both attainment and nonattainment 

areas. Sulfur dioxide emissions also lead to sulfate formation on both regional and local 

23
 
scales. 

4. Final Action on NOX 

The sources of NOX are numerous and widespread. The combustion of fossil fuel 

generates the majority of NOX emissions, with large contributions from power generation 

and mobile sources. Nitrates are formed from the oxidation of NOX into nitric acid 

(HNO3) either during the daytime (reaction with OH) or during the night (reactions with 

ozone and water). Nitric acid continuously transfers between the gas and the condensed 

phases through condensation and evaporation processes in the atmosphere. However, 

unless it reacts with other species (such as ammonia, sea salt, or dust) to form a 

neutralized salt, it will volatilize and not be measured using standard PM2.5 measurement 

techniques. The formation of aerosol ammonium nitrate is favored by the availability of 

ammonia, low temperatures, and high relative humidity. Because ammonium nitrate is 

semivolatile and not stable in higher temperatures, nitrate levels are typically lower in the 

summer months and higher in the winter months. The resulting ammonium nitrate is 

usually in the sub-micrometer particle size range. Reactions with sea salt and dust lead to 

the formation of nitrates in coarse particles. Nitric acid may be dissolved in ambient 

aerosol particles. 

Based on a review of speciated monitoring data analyses, it is apparent that nitrate 

concentrations vary significantly across the country. For example, in some southeastern 

locations, annual average nitrate levels are in the range of 6 to 8 percent of total PM2.5 

mass, whereas nitrate comprises 40 percent or more of PM2.5 mass in certain California 

locations. Nitrate formation is favored by the availability of ammonia, low temperatures, 

and high relative humidity. It is also dependent upon the relative degree of nearby SO2 

24
 
emissions because ammonia reacts preferentially with SO2 over NOX. Reductions in 

NOX emissions are expected to reduce PM2.5 concentrations in most areas. However, it 

has been suggested that in a limited number of areas, NOX control would result in 

increased PM2.5 mass by disrupting the ozone cycle and leading to increased oxidation of 

SO2 to form sulfate particles, which are heavier than nitrate particles. 

Because of these factors, we are finalizing our proposed approach to NOX as a 

precursor to PM2.5 for the NSR program. Under this approach, NOX is presumed to be a 

significant contributor to ambient PM2.5 concentrations in all PSD and NA NSR areas. 

However, a State or EPA may rebut this presumption for a specific area if the State 

demonstrates to the Administrator’s satisfaction or EPA demonstrates that NOX 

emissions in that area are not a significant contributor to that area’s ambient PM2.5 

concentrations. If a State or EPA makes such a demonstration, NOX would not be 

considered a PM2.5 precursor under the NSR program in that area. If a State or EPA does 

not make such a demonstration, NOX must be regulated as a precursor under the PSD, 

NA NSR, and minor source programs for PM2.5. As discussed previously, this 

“presumed-in” approach is warranted based on the well-known transformation of NOX 

into nitrates, coupled with the fact that nitrate concentrations vary significantly around 

the country. This approach is consistent with other recent EPA regulations requiring 

NOX reductions, which will reduce fine particle pollution, such as the CAIR and a 

number of rules targeting onroad and nonroad engine emissions. 

We had proposed that NOX be presumed to be a precursor in any State that EPA 

has identified as a source of the PM2.5 interstate transport problem. In the final rule, we 

have dropped this requirement to be consistent with EPA’s Clean Air Fine Particle 

25
 
Implementation Rule published on April 25, 2007. 72 FR 20586. Such a requirement is 

not necessary in this rule because States that contribute to downwind nonattainment for 

PM2.5 are otherwise required to address transported NOX emissions under the CAIR. 

In areas where NOX is regulated as a precursor to PM2.5, we do not believe that 

this is likely to add a major burden to sources, as NOX is already a regulated NSR 

pollutant. This is because NOX is an identified precursor for the ozone NAAQS and an 

indicator for the NO2 NAAQS. 

Several commenters agreed that NOX should be regulated under major NSR as a 

precursor to PM2.5. Some of these commenters believe that States should not have the 

opportunity to demonstrate otherwise, or indicated that a waiver for exclusion of NOX as 

a precursor should be allowed only if downwind States approve such a waiver. A few 

commenters stated that NOX should not be regulated as a precursor to PM2.5 in the major 

NSR program, either on grounds of scientific uncertainty regarding the impact of NOX 

emissions on ambient PM2.5 concentrations or on policy grounds (i.e., because NOX is 

already regulated under NSR for other NAAQS). 

We are not persuaded by the argument that NOX should not be regulated as a 

PM2.5 precursor because it is a regulated pollutant under other NAAQS. We do not find 

the degree of scientific uncertainty regarding PM2.5 formation from NOX to be great 

enough to preclude regulation of NOX as a precursor with an opportunity for a case-bycase demonstration that NOX is not a significant contributor. Furthermore, the fact that 

we regulate NOX for other NAAQS under the NSR program does not by itself justify 

declining to regulate NOX as a PM2.5 precursor in circumstances where NOX also 

significantly contributes to PM2.5 formation. As noted earlier, the regulation of NOX as a 

26
 
precursor for PM2.5 is not expected to add a major burden to regulated sources that are 

already required to limit NOX emission to meet other NAAQS. 

We disagree with the commenters who believe that emissions of NOX cannot be 

correlated to PM2.5 formation, or that it is unclear when NOX acts as a precursor. As 

discussed previously, our decision to regulate NOX as a precursor to PM2.5 is based on the 

well-known transformation of NOX into nitrates. Nevertheless, nitrate concentrations 

vary significantly across the country. As a result, we believe that the “presumed-in” 

approach is appropriate for NOX since a State can demonstrate that NOX should not be a 

precursor in a given area or region. 

While we recognize that NOX emissions can affect PM2.5 concentrations in 

downwind areas, we disagree that approval from downwind States should be required for 

a State to exclude NOX as a PM2.5 precursor for a particular area. This is because States 

that contribute to downwind nonattainment for PM2.5 are otherwise required to address 

transported NOX emissions under the CAIR. 

5. Final Action on VOC 

The organic component of ambient particles is a complex mixture of hundreds or 

even thousands of organic compounds. These organic compounds are either emitted 

directly from sources (i.e., primary organic aerosol) or can be formed by reactions in the 

ambient air (i.e., secondary organic aerosol, or SOA). Volatile organic compounds are 

key precursors in the formation processes for both SOA and ozone. The relative 

importance of organic compounds in the formation of secondary organic particles varies 

from area to area, depending upon local emissions sources, atmospheric chemistry, and 

season of the year. 

27
 
The lightest organic molecules (i.e., molecules with six or fewer carbon atoms) 

occur in the atmosphere mainly as vapors and typically do not directly form organic 

particles at ambient temperatures due to the high vapor pressure of their products. 

However, they participate in atmospheric chemistry processes resulting in the formation 

of ozone and certain free radical compounds (such as OH) which in turn participate in 

oxidation reactions to form SOA, sulfates, and nitrates. These VOCs include all alkanes 

with up to six carbon atoms (from methane to hexane isomers), all alkenes with up to six 

carbon atoms (from ethene to hexene isomers), benzene, and many low-molecular weight 

carbonyls, chlorinated compounds, and oxygenated solvents. 

Intermediate weight organic molecules (i.e., compounds with 7 to 24 carbon 

atoms) often exhibit a range of volatilities and can exist in both the gas and aerosol phase 

at ambient conditions. For this reason they are also referred to as semivolatile 

compounds. Semivolatile compounds react in the atmosphere to form SOA. These 

chemical reactions are accelerated in warmer temperatures, and studies show that SOA 

typically comprises a higher percentage of carbonaceous PM in the summer as opposed 

to the winter. The production of SOA from the atmospheric oxidation of a specific VOC 

depends on four factors: its atmospheric abundance, its chemical reactivity, the 

availability of oxidants (ozone, OH, HNO3), and the volatility of its products. In 

addition, recent work suggests that the presence of acidic aerosols may lead to an 

increased rate of SOA formation. Aromatic compounds such as toluene, xylene, and 

trimethyl benzene are considered to be the most significant anthropogenic SOA 

precursors and have been estimated to be responsible for 50 to 70 percent of total SOA in 

some airsheds. Man-made sources of aromatics gases include mobile sources, 

28
 
petrochemical manufacturing, and solvents. Some of the biogenic hydrocarbons emitted 

by trees are also considered to be important precursors of secondary organic PM. 

Terpenes (and b-pinene, limonene, carene, etc.) and the sesquiterpenes are expected to be 

major contributors to SOA in areas with significant vegetation cover, but isoprene is not. 

Terpenes are very prevalent in areas with pine forests, especially in the southeastern 

United States. The rest of the anthropogenic hydrocarbons (higher alkanes, paraffins, 

etc.) have been estimated to contribute 5 to 20 percent to the SOA concentration 

depending on the area. 

The contribution of the primary and secondary components of organic aerosol to 

the measured organic aerosol concentrations remains a complex issue. Most of the 

research performed to date has been done in southern California, and more recently in 

central California, while fewer studies have been completed on other parts of North 

America. Many studies suggest that the primary and secondary contributions to total 

organic aerosol concentrations are highly variable, even on short time scales. Studies of 

pollution episodes indicate that the contribution of SOA to the organic PM can vary from 

20 percent to 80 percent during the same day. 

Despite significant advances in understanding the origins and properties of SOA, 

it remains probably the least understood component of PM2.5. The reactions forming 

secondary organics are complex, and the number of intermediate and final compounds 

formed is voluminous. Some of the best efforts to unravel the chemical composition of 

ambient organic aerosol matter have resulted in quantifying the concentrations of 

hundreds of organic compounds representing only 10 to 20 percent of the total organic 

aerosol mass. For this reason, SOA continues to be a significant topic of research and 

29
 
investigation. 

Current scientific and technical information shows that carbonaceous material is a 

significant fraction of total PM2.5 mass in most areas, that certain VOC emissions are 

precursors to the formation of SOA, and that a considerable fraction of the total 

carbonaceous material originates from local as opposed to regional sources. However, 

while significant progress has been made in understanding the role of gaseous organic 

material in the formation of organic PM, this relationship remains complex. We 

recognize that further research and technical tools are needed to better characterize 

emissions inventories for specific VOC, and to determine the extent of the contribution of 

specific VOC to organic PM mass. 

As a result, this final rule does not, in general, require regulation of VOC as a 

precursor to PM2.5 for the NSR program. However, a State may demonstrate to the 

Administrator’s satisfaction or EPA may demonstrate that VOC emissions in a specific 

area are a significant contributor to that area’s ambient PM2.5 concentrations. After such 

a demonstration, the State would regulate VOC (or a subset of VOC) as a PM2.5 precursor 

for the NSR program in that area. That is, the State would need to regulate construction 

and modification of stationary sources that increase emissions of VOC in that area to 

assure that these emissions do not interfere with reasonable further progress or the ability 

of that area to attain or maintain the PM2.5 NAAQS. 

We believe that this “presumed-out” approach is appropriate for VOC because of 

the complexity in assessing the role of VOC in PM2.5 formation, as discussed previously. 

Where the effect of a pollutant’s emissions on ambient PM2.5 concentrations is subject to 

this degree of uncertainty, we do not have justification to establish a nationally-applicable 

30
 
presumption that the pollutant is a regulated NSR pollutant subject to the requirements of 

NSR for PM2.5. Under the circumstances, we believe the best policy is to continue to 

regulate VOC under NSR as a precursor to ozone in all areas, which will potentially 

provide a co-benefit for PM2.5 concentrations despite the uncertainty in PM2.5 formation 

from VOC. As discussed previously, we do not find it appropriate to utilize the same 

approach for NOX because the scientific data and modeling analyses provide more 

certainty that NOX emissions are a significant contributor to ambient PM2.5 

concentrations. 

Note that we intend to regulate high molecular weight VOC (with 25 carbon 

atoms or more and low vapor pressure) as direct PM2.5 emissions because they are 

emitted directly as primary organic particles and exist primarily in the condensed phase at 

ambient temperatures. See section V.E following for more on the regulation of such 

“condensables.” 

Most commenters agreed with the “presumed-out” approach for VOC. One 

commenter said that the role of VOC in the formation of PM2.5 is sufficiently understood 

to recommend a “waiver” approach for this pollutant in the same way as NOX is treated 

for PM2.5 in the rule. 

As discussed previously, the reactions forming secondary organics are complex 

and the number of intermediate and final compounds formed is voluminous. Some of the 

best efforts to unravel the chemical composition of ambient organic aerosol matter have 

merely been able to quantify the concentrations of hundreds of organic compounds 

representing only 10 to 20 percent of the total organic aerosol mass. For this reason, 

SOA continues to be a significant topic of research and investigation. Accordingly, we 

31
 
 

do not agree with the commenter who suggested a waiver or “presumed-in” approach for 

VOC. We continue to believe that our “presumed-out” approach is most appropriate for 

VOC and have included this approach in the final rules. 

6. Final Action on Ammonia 

 Ammonia (NH3) is a gaseous pollutant that is emitted by natural and 

anthropogenic sources. Emissions inventories for ammonia are considered to be among 

the most uncertain of any species related to PM. Ammonia serves an important role in 

neutralizing acids in clouds, precipitation, and particles. In particular, ammonia 

neutralizes sulfuric acid and nitric acid, the two key contributors to acid deposition (acid 

rain). Deposited ammonia also can contribute to problems of eutrophication in water 

bodies, and deposition of ammonium particles may effectively result in acidification of 

soil as ammonia is taken up by plants. The NARSTO Fine Particle Assessment8

 indicates 

that reducing ammonia emissions where sulfate concentrations are high may reduce 

PM2.5 mass concentrations, but may also increase the acidity of particles and 

precipitation. An increase in particle acidity is suspected to be linked with adverse 

human health effects and with an increase in the formation of secondary organic 

compounds. Based on this information and further insights gained from the NARSTO 

Fine Particle Assessment, it is apparent that the formation of particles related to ammonia 

emissions is a complex, nonlinear process. 

Though recent studies have improved our understanding of the role of ammonia in 

8

 NARSTO (2004) “Particulate Matter Assessment for Policy Makers: A 

NARSTO Assessment.” P. McMurry, M. Shepherd, and J. Vickery, eds. Cambridge 

University Press, Cambridge, England. ISBN 0 52 184287 5. See the docket for this 

rulemaking, Docket ID No. EPA-HQ-OAR-2003-0062, or 

http://www.narsto.org/section.src?SID=6 

32
 
aerosol formation, ongoing research is required to better describe the relationships 

between ammonia emissions, PM concentrations, and related impacts. The control 

techniques for ammonia and the analytical tools to quantify the impacts of reducing 

ammonia emissions on atmospheric aerosol formation are both evolving. Also, areaspecific data are needed to evaluate the effectiveness of reducing ammonia emissions on 

reducing PM2.5 concentrations in different areas, and to determine where ammonia 

decreases may increase the acidity of particles and precipitation. 

Due to the considerable uncertainty related to ammonia as a precursor, our final 

rules do not require ammonia to be regulated as a PM2.5 precursor but do give States the 

option to regulate ammonia as a precursor to PM2.5 in nonattainment areas for purposes of 

NSR on a case-by-case basis. Consistent with our proposal, if a State demonstrates to the 

Administrator’s satisfaction that ammonia emissions in a specific nonattainment area are 

a significant contributor to that area’s ambient PM2.5 concentrations, the State would 

regulate ammonia as a PM2.5 precursor under the NSR program in that nonattainment 

area. Once this demonstration is made, ammonia would be a “regulated NSR pollutant” 

under NA NSR for that particular nonattainment area, and the State would need to 

regulate construction and modification of stationary sources that increase emissions of 

ammonia in that area to assure that these emissions do not interfere with reasonable 

further progress or the ability of that area to attain or maintain the PM2.5 NAAQS. In all 

other nonattainment areas in that State and nationally, ammonia would not be subject to 

the NSR program. In addition, the action of any State identifying ammonia emissions as 

a significant contributor to a nonattainment area’s PM2.5 concentrations, or our approval 

of a non-attainment SIP doing so, does not make ammonia a regulated NSR pollutant for 

33
 
the purposes of PSD in any attainment or unclassifiable areas nationally. This is 

consistent with our proposal (70 FR 66036) and no commenters took issue with the 

proposal. We also retain the ability to make a technical demonstration for any area in a 

State, if appropriate, to reverse the presumption and require ammonia to be addressed in 

that State’s nonattainment area plan. 

We elected to finalize the proposed approach because of continued uncertainties 

regarding ammonia emission inventories and the effects of ammonia emission reductions. 

Ammonia emission inventories are presently very uncertain in most areas, complicating 

the task of assessing potential impacts of ammonia emissions reductions. In addition, 

data necessary to understand the atmospheric composition and balance of ammonia and 

nitric acid in an area are not widely available, making it difficult to predict the results of 

potential ammonia emission reductions. Ammonia reductions may be effective and 

appropriate for reducing PM2.5 concentrations in selected locations, but in other locations 

such reductions may lead to minimal reductions in PM2.5 concentrations and increased 

atmospheric acidity. Research projects continue to expand our collective understanding 

of these issues, but at this time we believe this case-by-case approach for nonattainment 

areas is appropriate given that there is sufficient uncertainty regarding the impact of 

ammonia emission reductions on PM2.5 concentrations in all nonattainment areas. In 

light of these uncertainties, we encourage States to continue efforts to better understand 

the role of ammonia in their fine particle problem areas. 

Several commenters agreed with our “presumed-out” approach for ammonia. 

One of these commenters recommended that we recognize the role ammonia plays in 

PM2.5 formation and develop a policy to require the minimization and mitigation of 

34
 
known emissions of ammonia, while another suggested that we require States to initiate 

comprehensive ambient air monitoring networks to determine the extent of local affects 

of ammonia. 

Four commenters did not support treating ammonia as a PM2.5 precursor under 

any circumstances. Three of these commenters stated that if EPA permits States to 

demonstrate that ammonia should be regulated as a PM2.5 precursor for NSR purposes, 

we should make clear that ammonia emissions from the operation of an air pollution 

control system to control NOX should not factor into such a demonstration. 

Two commenters preferred that we use the “presumed-in” approach for ammonia, 

as for NOX. One of these commenters stated that the “presumed-out” approach would 

improperly delegate our authority to regulate ammonia as a PM2.5 precursor to the States 

and would reverse Congress’ requirement to regulate PM precursors unless the emissions 

are not part of the problem, instead taking the approach that we will “not regulate unless 

proven to be part of the problem.” 

We continue to believe that the “presumed-out” approach is most appropriate for 

ammonia. As discussed previously, considerable uncertainties remain regarding 

ammonia emission inventories and the effects of ammonia emission reductions. As a 

result, we do not believe it advisable to adopt a “presumed-in” approach. However, 

where a State can gather sufficient data to demonstrate that reductions in ammonia 

emissions will decrease ambient concentrations of PM2.5 in a particular nonattainment 

area, we believe that the State should be allowed to regulate ammonia emissions under its 

PM2.5 NSR program for that area. 

We do not believe that this approach improperly delegates authority to the States. 

35
 
The final rule establishes a general presumption for all nonattainment areas through this 

rulemaking process, and allows for the presumption to be modified by the State on a 

case-by-case basis with EPA approval. Under the Clean Air Fine Particle 

Implementation Rule (72 FR 20586, April 5, 2007) (addressing various nonattainment 

plan elements other than NSR), we still retain the ability to make a technical 

demonstration for any area if appropriate to reverse the presumption and require 

ammonia to be addressed in its nonattainment area plan. As discussed previously in 

section V.A.1, we interpret the Act to allow the “presumed-out” approach adopted in the 

final rule. 

We agree with the commenter who suggested that we continue research on the 

role of ammonia in the formation of PM2.5. We believe that it is prudent to continue 

research on ammonia control technologies and the ammonia-sulfate-nitrate-SOA 

equilibrium before undertaking a broad national program to reduce ammonia emissions. 

As we develop a greater understanding about the potential air quality effects of reducing 

ammonia emissions in specific nonattainment areas, it may be appropriate for ammonia 

reduction strategies to be included in future SIPs. At this time, however, we believe that 

reducing SO2 and NOX emissions will achieve significant reductions in ambient PM2.5 

concentrations. 

Regarding the comment related to ammonia emissions from NOX control systems, 

we believe that a State should evaluate all sources of ammonia emissions when 

determining whether to regulate ammonia under its PM2.5 NSR program for a particular 

nonattainment area. However, we also encourage States to be mindful of the potential 

tradeoff in terms of ambient PM2.5 concentrations that may be related to reducing 

36
 
ammonia emissions from NOX control systems. 

B. Major Stationary Source Threshold for PM2.5 

The major NSR program applies to construction of major stationary sources and 

major modifications at major stationary sources. A stationary source is a “major source” 

if its actual emissions or its potential to emit for a specific pollutant equals or exceeds the 

major source threshold for that pollutant established in the Act. Different pollutants, 

including precursors, are not summed to determine applicability. 

Sections 169 and 302(j) of the Act contain definitions of “major emitting facility” 

and “major stationary source” that apply to programs implemented under part C and 

subpart 1 of part D of the Act (PSD and NA NSR, respectively). Consistent with our 

proposal, these final rules follow these definitions for purposes of defining a major 

emitting facility or major stationary source that would be subject to major NSR. The 

thresholds set out in the definitions are applied to each relevant pollutant individually, 

that is, to direct PM2.5 emissions and to emissions of each pollutant identified as a PM2.5 

precursor for the applicable NSR program. Under the final rules, the major source 

thresholds are as follows: 

PSD ...........................
 100 tpy for source categories listed in 40 CFR 51.166(b)(1)(i)(a) 

and 52.21(b)(1)(i)(a) 

250 tpy for all other source categories 

NA NSR.................... 100 tpy for all source categories 

No regulatory change is required to implement this approach to the major source 

thresholds for direct PM2.5 emissions and the PM2.5 precursors. See 40 CFR 

51.165(a)(1)(iv)(a), 51.166(b)(1)(i), 52.21(b)(1)(i), and part 51, appendix S, section 

II.A.4. 

37
 
This approach is consistent with how we treat other criteria pollutants that are 

covered by subpart 1 of part D of the Act. Nonattainment NSR programs under subpart 1 

do not include a tiered classification system such as the one required for ozone 

nonattainment areas under subpart 2 of part D. We do not interpret subpart 4 of part D of 

the Act (creating “serious” and “moderate” classifications for PM10 nonattainment areas) 

as applying to PM2.5. 

Although our approach is consistent with sections 169 and 302(j) and subpart 1 of 

part D of the Act, it results in a higher major source threshold in PM2.5 nonattainment 

areas than the major source threshold that applies in some PM10 nonattainment areas 

under subpart 4 of part D of the Act. This is because section 189(b) of the Act 

establishes a 70-tpy major source threshold for “serious” PM10 nonattainment areas while 

“moderate” PM10 nonattainment areas apply a 100-tpy major source threshold based on 

the definition in section 302(j). We do not believe the Act gives us the discretion to 

promulgate a lower major source threshold for pollutants such as PM2.5 that are only 

subject to subpart 1 of part D of the Act. 

Our emissions inventory data do not indicate that this situation will adversely 

impact attainment of the PM2.5 NAAQS. These data indicate that a significant number of 

sources have actual PM2.5 emissions in the 100 to 250 tpy range. Additionally, our more 

current inventory data show that the number of sources that would be covered as major 

sources by a lower major source threshold would not increase substantially unless the 

threshold were lowered to 20 tpy or below. Thus, even if EPA had the discretion to adopt 

a 70-tpy major source threshold for PM2.5 nonattainment areas, our data indicate that few 

additional sources would be subject to the major NSR program in PM2.5 nonattainment 

38
 
 

 

9 areas.

We believe that States should consider such information in developing their own 

SIP-approved NSR programs. For example, if construction of PM2.5 sources emitting 99 

tpy with no major NSR controls and without mitigation would undermine a State’s ability 

to achieve reasonable further progress or attain the PM2.5 NAAQS, the State should 

consider imposing emissions controls or other requirements on these sources through the 

State’s minor NSR program. Note that such programs are required under the existing 

statute and regulations to assure that the NAAQS are achieved. See section 110(a)(2)(C) 

of the Act and 40 CFR 51.160. In addition, States may address such sources through 

other elements in their nonattainment area SIPs that are not statutorily bound to the 

definition of major source, as the major NSR program is. We reiterate that since we do 

not interpret subpart 4 of the Act to apply to PM2.5, we do not believe that we have 

discretion under section 302(j) of the Act to define a lower major source threshold for 

pollutants such as PM2.5 that are only subject to subpart 1 of part D of the Act. 

Some commenters indicated that State minor NSR programs would not be 

sufficient to address such sources due to interstate transport and the existence of interstate 

PM2.5 nonattainment areas. These commenters indicated that a lower major source 

threshold for PM2.5 sources located in designated nonattainment areas should be applied 

uniformly throughout the entire nonattainment area, which would not be possible when 

minor NSR programs are defined on a State-by-State basis. 

We believe, to the contrary, that States can coordinate their minor NSR programs 

9

 See “NEI-PM2.5 Source Analysis” in the docket for this rulemaking, Docket ID 

No. EPA-HQ-OAR-2003-0062. 

39
 
to address interstate PM2.5 nonattainment areas, and we encourage them to do so. In 

addition, we note that the impacts of direct PM2.5 emissions are generally felt primarily in 

the local area. 

One commenter stated that in order to address the impact of high PM 

concentrations, the Act mandates EPA to define a criteria pollutant’s NSR major 

threshold at levels less than 100 tpy. The commenter gave the example of subparts 2 and 

4 of part D of the Act, which define lower major source thresholds for certain 

classifications of ozone and PM10 nonattainment areas, respectively. The commenter 

argued that it is unreasonable for us to assert that subpart 4 does not apply to this rule 

because it regulates all PM with a diameter of less than 10 micrometers, which includes 

PM2.5. The commenter believes that we recognized as much in our proposal preamble 

discussion of the options for implementing reasonably available control technology 

(RACT), where we discussed potential approaches that “would be consistent with the 

approach set forth in the Act in subpart 4.” 70 FR 66017. This commenter stated that a 

reasonable interpretation of the Act requires major sources of direct PM2.5 emissions and 

precursor emissions to be defined at a baseline level of 70 tpy, and adjusted further 

downward as appropriate considering the characteristics and potential impacts of the 

pollutants. 

We do not agree that subpart 4 of part D applies to PM2.5 nonattainment areas. 

Subpart 4 was added to the Act by Congress specifically to address the PM10 NAAQS. 

We believe that the PM2.5 standard should be implemented under subpart 1 of part D, 

which is the general provision of the Act related to NAAQS implementation. Part D of 

title I of the Act sets forth the requirements for SIPs needed to attain the NAAQS. Part D 

40
 
 

also includes a general provision under subpart 1, which applies to all NAAQS for which 

a specific subpart does not exist. Because the PM2.5 standards were not established until 

1997, the nonattainment plan provisions found in section 172 of subpart 1 apply. Subpart 

4 on its face applies only to the PM10 standard. In general, the emphasis in subpart 4 on 

reducing PM10 concentrations from certain sources of direct PM2.5 emissions can be 

somewhat effective in certain PM2.5 nonattainment areas but not in all. Contributions to 

PM2.5 concentrations are typically from a complex mix of sources of primary emissions 

and sources of precursor emissions, which form particles through reactions in the 

atmosphere. In addition, PM2.5 differs from PM10 in terms of atmospheric dispersion 

characteristics, chemical composition, and contribution from regional transport. 

A group of environmental commenters believed that EPA should be consistent 

with the stationary source size thresholds proposed for RACT in option 2, see 70 FR 

66019/1. In our proposal preamble discussion of RACT, while we discussed developing 

a classification system for PM2.5 nonattainment areas under section 172(a)(1) of subpart 

1, we did not discuss subjecting PM2.5 to the requirements of subpart 4. While our 

discussion of RACT contemplated a lower threshold for RACT applicability in some 

PM2.5 nonattainment areas, we did not characterize this as defining a lower major source 

threshold. Moreover, section 302(j) defines a major stationary source as one that emits 

100 tpy or more “except as otherwise expressly provided.” Since section 172 does not 

expressly provide EPA with the authority to promulgate a major source threshold below 

100 tpy, we do not believe we are authorized to do so under subpart 1 of part D of the 

Act. 

One commenter stated that the major source threshold for PM2.5 emissions should 

41
 
 

 

be calculated using the current SO2 and NOX definitions of major source and significant 

emissions rate. Specifically, the commenter suggested that the ratio of these values (100 

tpy and 40 tpy, respectively) should be multiplied by the significant emissions rate for 

direct PM2.5 emissions (10 tpy; see section V.C following) to yield a PM2.5 major source 

threshold of 25 tpy. 

As previously stated, we do not believe that we have discretion under the Act to 

define a lower major source threshold under subpart 1 of part D of the Act. In any case, 

the major source thresholds and significant emissions rates for SO2 and NOX were not 

defined in relation to one another, and therefore their relationship would not provide a 

suitable basis for developing the PM2.5 major source threshold from the PM2.5 significant 

emissions rate. Major source thresholds are defined directly in the Act, while the 

significant emissions rates were codified independently in regulations through a modeling 

analysis of ambient impacts. 

C. Significant Emissions Rate for Direct Emissions of PM2.5 

The determination of what should be classified as a modification subject to major 

NSR is based, in part, on a “significant emissions rate.”10 The major NSR regulations 

define this term as a rate above which a net emissions increase will trigger major NSR 

permitting requirements, if the increase results from a major modification. Sources are 

exempt from major NSR requirements if the emissions increase resulting from a 

modification is below this rate because EPA considers such lower emissions increases to 

be de minimis for purposes of the major NSR program. 

10 For additional background on EPA’s interpretation of modification and 

rationale for including significant emissions rates in defining major modifications, see 61 

FR 38253-54 (Dec. 31, 2002). 

42
 
The significant emissions rates for the criteria pollutants other than PM2.5 are 

given in the following table: 

Criteria pollutant 

Ozone ...........................
 

NO2 ..............................

Particulate Matter.........
 

CO................................
 

SO2 ...............................

Lead..............................

Significant emissions rate (tpy) 

VOC: Any increase up to 40 tpy (dependent on NA 

classification) 

NOX: Any increase up to 40 tpy (dependent on NA 

classification) 

NOX: 40 tpy 

25 tpy, particulate matter emissions 

15 tpy, PM10 emissions 

50 or 100 tpy (dependent on NA classification) 

 40 tpy 

0.6 tpy 

Significant emissions rates for additional (non-criteria) pollutants that are subject to the 

PSD program are contained in 40 CFR 51.166(b)(23) and 40 CFR 52.21(b)(23). 

For direct emissions of PM2.5, these final rules define the significant emissions 

rate as 10 tpy. This is the level that we proposed as our preferred option. This final 

significant emissions rate for direct PM2.5 emissions is based fundamentally on the same 

approach that we used in setting the previous significant emissions rates for PM 

emissions and PM10 emissions. 

Historically, the original significant emissions rate for PM (25 tpy of PM 

emissions) was set using a modeling analysis to determine the amount of PM emissions 

that a source could emit that would be unlikely to cause ambient impacts above 4 percent 

43
 
 

of the PM NAAQS (measured as total suspended particulate (TSP)).11 Although a range 

of source configurations can yield a wide range of impacts per tpy of emissions, our 

review of typical configurations of major PM sources led us to the conclusion that a 

major modification that increased PM emissions by 25 tpy or less would be unlikely to 

increase 24-hour average concentrations of TSP by more than 4 percent of the 24-hour 

TSP NAAQS. Subsequently, when we set the significant emissions rate for PM10, we 

adjusted the rate for PM emissions using the ratio of the 24-hour PM10 NAAQS to the 24­

hour TSP NAAQS to derive the PM10 significant emissions rate of 15 tpy. We used the 

ratio of 24-hour NAAQS for this adjustment because that NAAQS was controlling for 

both PM and PM10. 

We used a conceptually similar methodology to derive the final PM2.5 significant 

emissions rate from the rate for PM10. However, because the 24-hour NAAQS is not 

controlling for PM2.5, we revised the methodology to take into account the annual impact 

of emissions. See the proposal preamble for additional information on the methodology 

we used to develop the final significant emissions rate for direct PM2.5 emissions (70 FR 

11 The EPA established the original NAAQS for PM in terms of ambient 

concentrations of TSP (40 CFR 51.100(ss)). Source applicability for PM was determined 

in terms of amounts of PM emissions (40 CFR 51.100(pp)) from the affected source. In 

1993, at 58 FR 31622 (see page 31629), EPA eliminated TSP as the ambient indicator for 

measuring compliance with both the NAAQS and PSD increments. Thus, EPA no longer 

considers the TSP ambient indicator to be a regulated NSR pollutant. The EPA is 

currently evaluating whether it remains appropriate to consider PM as a “regulated NSR 

pollutant.” There is no NAAQS for TSP/PM, rather the standards address specific size 

fractions of PM, namely PM10 and PM2.5. However, PM emissions, based on in-stack 

measurements, continue to be regulated under PSD because of the use of such emissions 

for evaluating compliance under a variety of CAA section 111 new source performance 

standards (40 CFR part 60). Given the regulatory changes and positions taken by EPA 

since 1993, EPA is re-evaluating the implications for PM emissions in the NSPS program 

(and other air programs) and will act accordingly to clarify this issue in the near-term. 

44
 
66038). 

Several commenters supported our approach to setting the significant emissions 

rate for direct PM2.5 emissions and the level (10 tpy) based on the same methodology 

used for PM emissions and PM10 emissions. Numerous other commenters believe that 

our methodology was too conservative, and suggested a significant emissions rate of 15 

tpy. Two commenters suggested that we use significant emissions rate of 5 tpy or less. 

Another commenter suggested that we could “split the difference,” using an option that 

could give States and companies some flexibility: modifications less than 5 tpy of direct 

PM2.5 emissions could be considered de minimis; modifications between 5 and 15 tpy of 

direct PM2.5 emissions could choose to either demonstrate a less than a 4 percent NAAQS 

increase or simply be subject; and modifications with increases of 15 or more tpy of 

direct PM2.5 emissions would be subject. 

We agree with commenters who indicated that we were correct in using the same 

methodology for direct PM2.5 that was used to set the significant emissions rate for PM10 

and PM emissions. We do not agree that using the same level as PM10 emissions (15 tpy) 

is warranted, given the demonstrated health effects of PM2.5. Neither do we agree that a 

significant emissions rate of 5 tpy or less is warranted. While our screening model runs 

indicated that emissions increases in this range at facilities with short stacks can cause 

measurable increases in ambient PM2.5 levels, we do not believe that facilities at the 

extremes should dictate the program for all sources. 

We do not agree that inclusion of condensable emissions in future testing and 

applicability determinations (see section V.E) is grounds for increasing the SER for direct 

PM2.5 emissions. The results of the modeling analysis that is the basis for the SER of 

45
 
10 tpy is not affected by the nature of the direct PM2.5 emissions (i.e., condensable or 

not). 

We also do not agree that the proportions of primary and secondary PM2.5 that 

comprise ambient PM2.5 concentrations is relevant to determining the appropriate SER 

for direct PM2.5 emissions. Following our historic approach for PM and PM10, we based 

our analysis on determining the size of a source of direct PM2.5 emissions that would be 

expected to have an ambient impact of 4 percent or more of the NAAQS. This 

relationship holds true regardless of the origin of the particles that make up the ambient 

PM2.5. The commenter’s approach (i.e., carrying out the analysis based on one-half of the 

NAAQS because primary PM2.5 makes up only one-half of the ambient PM2.5) implies 

that an increase in ambient PM2.5 concentrations due to an increase in direct PM2.5 

emissions is somehow automatically matched by a like increase in the ambient 

concentration of secondary PM2.5. We do not believe that this is a reasonable approach. 

D. Significant Emissions Rates for PM2.5 Precursors 

Consistent with the preferred option in the proposal, we are setting significant 

emissions rates for PM2.5 precursors at the levels for those pollutants already included in 

major NSR programs, as shown in the following table: 

PM2.5 precursor Significant emissions rate (equal to or exceeding) 

SO2 ...................................... 40 tpy 

NOX ..................................... 40 tpy 

VOC .................................... 40 tpy 

Ammonia............................. Adopted in SIP 

VOC is presumed not to be a precursor to PM2.5 in any attainment or 

unclassifiable area, unless the State demonstrates to the Administrator’s satisfaction or 

46
 
 

EPA demonstrates that emissions of VOC from sources in a specific area are a 

significant contributor to that area’s ambient PM2.5 concentrations. Any State making 

such a demonstration would be required to adopt the 40-tpy significant emissions rate 

unless it demonstrates that a more stringent significant emissions rate (lower rate) is more 

appropriate. 

For ammonia, States determining in their SIPs that control of ammonia is a 

necessary part of a PM2.5 control strategy in a particular area must set the significant 

emissions rate for ammonia. Otherwise, according to the definition of “significant” in the 

PSD program, “any emissions rate” would be considered significant. See 40 CFR 

51.166(b)(23)(ii). 

One commenter stated that we should not leave it to States to set significant 

emissions rates for ammonia. The commenter argued that EPA’s scientists should 

shoulder this responsibility, and the resulting significant emissions rate should be subject 

to notice and comment. 

In the final rule, we are allowing those States that determine in their SIPs that 

control of ammonia is necessary to set the significant emissions rate for ammonia, based 

on the information developed for each attainment demonstration. At this time, we 

believe this is more appropriate than EPA setting a single, nationwide significant 

emissions rate because of the different role ammonia plays in the formation of PM2.5 from 

one area to another, as well as our still-evolving understanding of the impact of reducing 

ammonia emissions on ambient PM2.5 concentrations. In addition, we note that the SIP 

revisions that States undertake to add ammonia to their NA NSR programs are subject to 

notice and comment rulemaking procedures. 

47
 
Numerous commenters supported our proposal to set significant emissions rates 

for PM2.5 precursors at the levels already used for other purposes in the NSR program. 

One commenter indicated that since roughly half or more of ambient PM2.5 is derived 

from precursors, 10 tpy would be an appropriate significant emissions rate for PM2.5 

precursor emissions. Another commenter suggested a significant emissions rate of 4 tpy 

for SO2 and 2 tpy for NOX, based on the percentage of PM2.5 that is typically derived 

from these precursors and the ratios between the existing significant emissions rates for 

these pollutants and the SO2 and NO2 annual NAAQS. Since the ambient concentrations 

of PM2.5 vary across the country and since significant emissions rates have not been 

developed as a ratio of the NAAQS, we do not believe that the suggested approach is 

appropriate. 

As discussed in the proposal, the use of existing significant emission rates where 

the PM2.5 precursor is also regulated under NSR as a separate criteria pollutant 

harmonizes the NSR program for PM2.5 with the NSR programs for those other criteria 

pollutants. This enables a source to determine the NSR impacts of proposed 

modifications by reference to a single significant emissions rate for each pollutant, and 

enables streamlining of determinations regarding the applicable control technology and 

analysis of air quality impacts into a single and comprehensive decision making process 

for both PM2.5 and other criteria pollutants that also cover PM2.5 precursors. This also 

follows precedent. When ozone became a criteria pollutant, EPA used the NOX 

significant emissions rate from the NO2 program. 

The burden imposed is not the only factor to consider when setting the significant 

emission rates for precursors – the process for determining the significant emission rates 

48
 
must also take into account the accuracy and certainty with which we can predict the 

effect of the precursors on PM2.5 concentrations. It is difficult to determine the ambient 

air quality effects that result from a single source of emissions of PM2.5 precursors. There 

are conservative screening models for predicting impacts of large NOX and SO2 sources 

on ambient PM2.5 concentrations. We conducted a range of modeling analyses to 

determine the amount of PM2.5 precursor emissions needed to show an increase in 

ambient PM2.5 concentrations. These analyses showed that precursor emissions probably 

have some localized impacts, but that most impact is farther downwind as precursors 

have the time to convert to PM2.5. In addition, the modeling available at this time does 

not provide sufficient information to estimate impacts of emissions from individual 

sources of ammonia and VOC on ambient PM2.5 concentrations. While we know that 

precursors contribute to the formation of PM2.5 in the ambient air, the degree to which 

these individual precursors contribute to PM2.5 formation in a given location is complex 

and variable. There are competing chemical reactions taking place in the atmosphere, 

and meteorological conditions play a significant role in the size and characteristics of 

particle formation. For these reasons, we do not believe that we have adequate data on 

the impacts of precursor emissions from individual sources to override the administrative 

advantages of setting the significant emissions rates for SO2, NOX, and VOC for purposes 

of the PM2.5 NSR program at the same levels that are already used for other purposes in 

the major NSR program. 

E. Condensable PM Emissions 

In this final NSR rule, EPA will not require that States address condensable PM in 

establishing enforceable emissions limits for either PM10 or PM2.5 in NSR permits until 

49
 
the completion of a transition period, as described herein. In response to significant 

comments on the variability of test methods available for measuring condensable 

emissions, we have adopted this transition period approach to allow us to assess the 

capabilities of the test methods and possibly revise them to improve performance. The 

transition period will end January 1, 2011 unless EPA advances this date through the 

rulemaking process described below. 

 Subsequent to the completion of the test methods assessment, EPA will be 

conducting a notice and comment rulemaking to codify new or revised test methods. 

Once these new or revised test methods are in place, States will have the tools necessary 

to issue NSR permits addressing condensable PM. Thus, as part of the test methods 

rulemaking, we will take comment on an earlier closing date for the transition period in 

the NSR program if we are on track to meet our expectation to complete the test methods 

rule much earlier than January 1, 2011. In the meantime, however, we are establishing 

January 1, 2011 as the latest possible end date for the NSR transition period because this 

is also the end of the transition period for SIP purposes as described in the Clean Air Fine 

Particle Implementation Rule (see section II.L in 72 FR 20586, April 25, 2007). 

Prevention of Significant Deterioration and NA NSR permits issued after the effective 

date of this NSR implementation rule but prior to the end of the transition period for the 

NSR program are not required to account for condensable emissions in PM2.5 or PM10 

emissions limits. After January 1, 2011 (or any earlier date established in the upcoming 

rulemaking codifying test methods), EPA will require that NSR permits include limits of 

condensable emissions, as appropriate. Prior to this date, States are not prohibited from 

establishing emissions limits in NSR permits that include the condensable fraction of 

50
 
 

direct PM2.5. 

As noted in the proposal preamble, certain commercial or industrial activities 

involving high temperature processes (e.g., fuel combustion, metal processing, and 

process cooking operations) emit gaseous pollutants into the ambient air, some of which 

rapidly condense into particle form. The constituents of these condensed particles 

include, but are not limited to, organic materials, sulfuric acid, and metals and metal 

compounds. We consider such condensable emissions to be a component of direct PM 

emissions. Specifically, direct PM emissions consist of both the “filterable fraction” 

which already exist in particle form at the elevated temperature of the exhaust stream, 

and the “condensable fraction” which exist in gaseous form under exhaust stream 

conditions but condenses rapidly in the ambient air. 

Because condensable PM emissions exist almost entirely in the 2.5 micrometer 

range and smaller, these emissions are inherently more significant for PM2.5 than for prior 

PM standards addressing larger particles. Condensable PM emissions commonly make 

up a significant component of direct PM2.5 emissions. Therefore, we believe that it is 

important that the air quality management of PM promote a comprehensive approach to 

the control of condensable PM. 

We proposed on November 1, 2005 to clarify that condensable PM emissions 

must be included when determining whether a source is subject to the major NSR 

program. We noted in the proposal that our prior guidance12 had clarified that PM10 

12 Letter from Thompson G. Pace, Acting Chief, Particulate Matter Programs 

Branch, to Sean Fitzsimmons, Iowa Department of Natural Resources, (Mar. 31, 1994) 

(available at http://www.epa.gov/Region7/programs/artd/air/nsr.nsrmemos/cpm.pdf and 

in the docket for this rulemaking, Docket ID No. EPA-HQ-OAR-2003-0062) 

51
 
includes condensable PM and that, where States expect condensable PM emissions to be 

in higher amounts, States should use methods that appropriately measure condensable 

PM emissions. In addition, we pointed out that the 2001 consolidated emissions 

reporting rule (CERR) requires States to report condensable emissions in each inventory 

revision (see 67 FR 39602, June 10, 2001) and that Method 202 in appendix M of 40 

CFR part 51 quantifies condensable PM. We also noted that States have not applied this 

existing guidance consistently. 

We received a number of comments on whether NSR programs should account 

for condensable PM emissions in light of the current state of knowledge of and 

uncertainties around the measurement of direct PM2.5. Several commenters supported our 

proposal to require the inclusion of condensable PM emissions in NSR applicability 

determinations. On the other hand, several other commenters expressed opposition to 

including condensables at this time and raised concerns about the availability and 

implementation of test methods and related issues about the uncertainties in existing data 

for condensable PM2.5. As a result of the concerns, these commenters believed EPA 

would be premature in requiring a comprehensive evaluation of condensable PM2.5, 

especially as it related to developing any new emissions limits for stationary sources. 

One commenter noted that regulation of condensable PM at this time will impede, 

rather than facilitate, expeditious attainment of the PM2.5 standard. Another commenter 

expressed concern about the potential for retroactive enforcement over applicability 

decisions made in good faith, and for retroactive application of the new test method to 

assert violations of an emission limit, where the applicability decision or the emission 

limit was originally based on flawed testing/estimating methodology. Several 

52
 
commenters raised serious concerns about the availability and implementation of accurate 

test methods and emissions factors for condensable PM2.5. They further stated that 

regulation of condensable PM2.5 emissions would be appropriate only after we have 

developed a workable transitional strategy that ensures existing major sources are not 

placed in “NSR jeopardy” for physical and operational changes undertaken before new 

test methods and other requirements for condensable PM2.5 are established. 

In recognition of these concerns, both as they apply to the NSR program and the 

broader air program, we have adopted a transition period during which NSR permits need 

not address limits of condensable PM2.5 emissions. During this transition period, EPA 

will undertake a collaborative testing effort with industry, National Association of Clean 

Air Agencies (NACAA), and other stakeholders to assess and improve the effectiveness 

and accuracy of the available or revised test methods. The purpose of the stakeholder 

testing projects will be to collect new direct filterable and condensable PM2.5 emissions 

data using methodologies that provide data more representative of sources’ direct PM2.5 

emissions. The EPA, States, and others will use these data to establish or improve 

emissions factors and to define more representative source emissions limits in permits. 

The EPA acknowledges the legitimate concerns raised by commenters concerning 

potential exposure to retroactive enforcement and has established rules to address this 

issue. The EPA will not revisit applicability determinations made in good faith prior to 

the end of the transition period, insofar as the quantity of condensable PM emissions are 

concerned, unless the applicable implementation plan clearly required consideration of 

condensable PM. Likewise, EPA will interpret PM emissions limitations in existing 

permits or permits issued during the transition period as not requiring quantification of 

53
 
condensable PM2.5 for compliance purposes unless such a requirement was clearly 

specified in the permit conditions or the applicable implementation plan. 

After the end of the transition period (January 1, 2011 or any earlier date 

established in the upcoming rulemaking codifying test methods), EPA will require that all 

NSR applicability determinations for PM2.5 and PM10 address condensable emissions as 

applicable, and the source may not rely on calculations made for previous determinations 

that did not include an accurate accounting of condensables. Additionally, compliance 

with these limits must be determined using the promulgated validated test methods that 

are applicable after that date. Moreover, after that date, we expect that condensable PM 

emissions will be addressed in all other aspects of the major NSR program, such as 

impact analyses under PSD and offsets under NA NSR. See 72 FR 20586, April 25, 

2007 for the discussion of the transition period as it applies to the other elements of the 

air program in the final Clean Air Fine Particle Implementation Rule. 

Although EPA is not requiring that State NSR programs address condensable 

emissions of PM until the end of the transition period, States that have developed the 

necessary tools are not precluded from acting to measure and control condensable PM 

emissions in NSR permit actions prior to the end of the transition period, especially if it is 

required in an applicable SIP. To the extent that a State has the supporting technical 

information and test methods, the State may assess the capabilities of current control 

technologies, possible modifications to such technologies, or new technologies as 

appropriate relative to control of condensable PM2.5 emissions. As an example, a specific 

approach for controlling condensable PM could be a change in control device operating 

temperature to improve emissions reductions. We also note that it is important that 

54
 
implementation of any new or revised emissions limits and test methods that account for 

condensable emissions should be prospective and clearly differentiated from existing 

NSR permit requirements. This will avoid confusion over the compliance status relative 

to existing PM emissions limits that were not developed considering the condensable 

portion. 

Notwithstanding the issues and uncertainties related to condensable PM, we 

encourage States to begin immediately to identify measures for reducing condensable PM 

emissions in major NSR permit actions, particularly where those emissions are expected 

to represent a significant portion of total PM emissions from a source. 

F. Prevention of Significant Deterioration (PSD) Program Requirements 

To receive a permit for a new major source or a major modification, sources 

subject to PSD must: 

•	 Install Best Available Control Technology (BACT). 

•	 Conduct air quality modeling to ensure that the project’s emissions will not 

cause or contribute to either – 

- A violation of any NAAQS or maximum allowable pollutant increase (PSD 

increment); or 

- An adverse impact on any Class I area “air quality related value” (AQRV). 

• As required, comply with preconstruction monitoring requirements. 

This final action regarding each of these elements is discussed in the following sections. 

1. How must BACT be implemented for PM2.5? 

We are not making any change to our current regulations or policy for 

implementing BACT requirements at a major source that is subject to the requirements of 

55
 
 

the PSD program. Accordingly, if a new major source will emit, or have the potential to 

emit, a significant amount of a regulated NSR pollutant in an attainment area for that 

pollutant, the source must apply BACT for each emissions unit that emits the pollutant. 

In addition, if a physical or operational change at an existing major source will result in a 

significant emissions increase and a significant net emissions increase of a regulated NSR 

pollutant in an attainment area for that pollutant, the source must apply BACT to each 

proposed emissions unit experiencing a net increase in emissions of that pollutant as a 

result of the physical or operational change in the unit. Under the PM2.5 PSD program, 

these requirements will apply to direct PM2.5 emissions; SO2 emissions; NOX emissions, 

unless a State demonstrates that NOX is not a significant contributor to ambient PM2.5 

concentrations in that area; and to VOC if identified by a State as a precursor in the PM2.5 

attainment area where the source is located. 

2. How does EPA plan to address PM2.5 Increments, Significant Impact Levels (SILs), 

and Significant Monitoring Concentrations (SMCs)? 

On November 1, 2005, we proposed a rule to implement the PM2.5 NAAQS, 

including proposed revisions to the NSR program (70 FR 65984). In that proposal, we 

indicated our intent to propose a separate rule for developing PM2.5 increments, SILs, and 

SMCs and sought comments on general approaches for developing these values. We 

proposed PM2.5 increments, SILs, and SMCs in a rule dated September 21, 2007. 72 FR 

54112. We intend to address comments received on these components of the PM2.5 PSD 

program when we finalize that proposed rule. 

3. What is the ambient air quality analysis requirement for PM2.5? 

All sources subject to PSD review must perform an ambient air quality impact 

56
 
analysis to show that the emissions from the source will not cause or contribute to a PSD 

increment or NAAQS violation. See section 165(a)(3) of the CAA; 40 CFR 51.166(k) 

and 52.21(k). We did not propose, and our final rules do not contain, any changes to the 

regulations on air quality impact analyses for purposes of the PM2.5 NSR program. 

Accordingly, sources will be required to perform this analysis for the PM2.5 NAAQS and, 

when finalized, PM2.5 increments. Such analyses must consider how a source, in 

combination with other sources in the area, will impact air quality at existing PM2.5 

monitor locations, as well as at other locations that are appropriate for comparing 

predicted PM2.5 concentrations to the NAAQS based on PM2.5 monitor siting 

requirements and recommendations. 

4. How must the PSD preconstruction monitoring requirement be implemented for 

PM2.5? 

Sources subject to PSD are subject to preconstruction ambient air quality 

monitoring requirements. See sections 165(a)(7) and 165(e) of the Act and 40 CFR 

51.166(m) and 52.21(m). The PSD permitting requirements provide that continuous 

preconstruction ambient air quality monitoring must be conducted for any criteria 

pollutant emitted in significant amounts. Under 40 CFR 51.166(i)(5) and 52.21(i)(5), the 

reviewing authority has the discretion to exempt an applicant from this monitoring 

requirement if: 

•	 The maximum modeled concentration for the applicable averaging period 

caused by the proposed significant emissions increase (or net emissions 

increase) is less than the prescribed SMC; or 

•	 The existing monitored ambient concentrations are less than the prescribed 

57
 
 

SMC. 

A source may also use existing data as a surrogate for preconstruction monitoring if the 

existing monitored data record is determined to be representative of the project’s 

location. 

We proposed five options for how to address preconstruction monitoring for 

PM2.5. We are adopting a combination of options 1 and 3 from the proposal, primarily 

because we believe that it reflects existing procedures for other regulated NSR pollutants. 

The following sections summarize the major comments received on each option and 

explain why we are not adopting particular options. 

Option 1 – Require preconstruction monitoring for all sources but exempt on a case-bycase basis 

Generally, commenters who supported option 1 believed the option gives 

regulatory agencies enough flexibility to address sources with unique characteristics. 

One commentator stated that another benefit is that this option would avoid unnecessary 

installation of new PM2.5 monitors and redundant preconstruction monitoring. 

Another commenter, however, believed option 1 to be overly burdensome until 

EPA develops an SMC. The commenter argued that for example, there are many 

upcoming PSD projects in their State, which would be located in extremely remote areas 

where there are no local or regional PM2.5 emission sources, so there would be no need to 

collect such data for these areas. Additionally, one group of commenters stated that 

option 1 appeared to be “streamlining” preconstruction permit requirements, which is not 

the intention of the Act’s PSD provisions, and that EPA does not have the authority to 

exempt sources from the requirements of section 165(e)(2). 

58
 
We agree with the commenter that recommended combining option 3 (the use of a 

24-hr PM2.5 SMC) with option 1 and are finalizing this approach. We have proposed an 

SMC for PM2.5 in the rulemaking on increments, SILs, and SMCs (72 FR 54112, 

September 21, 2007). Our regulations at 40 CFR 51.166(i)(5) and 52.21(i)(5) have 

allowed the use of an SMC as screening tool for identifying when an impact is de 

minimis and there is thus little or no value in gathering preconstruction monitoring data 

The use of de minimis levels of this nature (such as significant emission rates and 

significant impact levels) is supported by court precedent interpreting the NSR provisions 

of the Act. Alabama Power Co. v. Costle, 636 F.2d 323, 360 (D.C. Cir. 1979). (“Unless 

Congress has been extraordinarily rigid, there is likely a basis for an implication of de 

minimis authority to provide [an] exemption when the burdens of regulation yield a gain 

of trivial or no value.”) 

Option 2 – Exempt all sources from preconstruction monitoring 

Under option 2, we proposed to exempt all PM2.5 sources from preconstruction 

monitoring through a blanket determination that the existing PM2.5 monitoring network is 

sufficient. One commenter who preferred option 5 (described subsequently) was also 

supportive of option 2. This commenter noted that preconstruction monitoring is 

expensive and can significantly delay a project. The commenter also pointed out that it is 

very difficult to locate monitors for both direct PM2.5 and precursors because precursors 

may transport over long distances before transforming into PM2.5. The commenter 

indicated that we should not rely on the existing regulations, which are already known to 

be problematic. 

One comment letter from a group of environmental advocacy organizations 

59
 
 

 

specifically opposed option 2. These commenters noted that spatial gradients can be 

significant for PM2.5, especially for direct PM2.5 emissions, and that the existing 

monitoring network is severely limited in its spatial coverage, most especially in 

attainment areas where PSD preconstruction monitoring requirements apply. The 

commenters indicated that to make a blanket determination that the existing network 

suffices for any source, regardless of where it might choose to locate, would be absurd. 

We decided not to finalize option 2 because we do not believe that the current 

network will be sufficient for all existing and potential new sources. As stated in the 

proposal preamble, we believe that the existing PM2.5 monitoring record has the 

following limitations: 

•	 The PM2.5 monitoring data record would require spatial interpolation between 

monitors for the determination of appropriate concentrations at the project’s 

location. 

•	 Use of existing monitored data will not increase the PM2.5 monitoring data 

record to confirm or contradict conventional perceptions. 

•	 The PM2.5 monitoring data record assumes that local hot spots of high PM2.5 

concentrations do not exist or are already being monitored, which may not be 

true in all cases. 

•	 Automatic acceptance of existing measurements does not follow our current 

policy that a case-by-case determination needs to be made to determine 

whether preconstruction ambient monitoring is necessary. 

•	 When used with the impact modeling, separate concentrations of direct and 

precursor-formed PM are needed. 

60
 
Option 3 – Use SMC’s to exempt sources from preconstruction monitoring 

Several commenters supported this option adding that this approach follows 

existing procedures to justify the exclusion of preconstruction monitoring requirements 

when source impacts are less than the SMC or when sufficient representative data exists. 

One group of commenters stated that EPA’s proposed options 1 and 3, which would 

allow case-by-case or de minimis exemptions from the monitoring requirements, are illconceived as a matter of public policy and contradict the Act’s PSD provisions. 

We agree with the commenters that support adopting option 3 because a 

combination of options 1 and 3 reflects existing procedures for other regulated NSR 

pollutants. As discussed previously, a de minimis exemption from monitoring 

requirements is supported by court precedent interpreting the PSD provisions of the Act. 

We do not consider it sound policy to require gathering additional data when it is 

unnecessary to demonstrate that a proposed source or modification will not adversely 

impact air quality. 

Option 4 – Use existing PM10 data 

We proposed using the available large PM10 data record combined with the 

recently acquired PM2.5 data to provide representative ambient measurements for most 

sources. One comment letter from an industry group opposed any requirement for 

preconstruction monitoring, and endorsed option 4 if nationally gathered PM2.5 data is not 

available. Three commenters specifically opposed option 4. One comment letter from an 

environmental advocacy organization stated that option 4 is illegal on its face, to the 

extent that EPA intends it as a universally available alternative. This comment indicated 

that some individual sources might be able to demonstrate that PM10 monitoring could 

61
 
 

fulfill the statutory requirements and purposes of PM2.5 monitoring (e.g., with sufficiently 

protective assumptions about PM2.5/PM10 proportions), but due to the variability in the 

relationship between PM2.5 and PM10, EPA cannot categorically allow this substitution. 

Two other commenters stated that option 4 was not a viable approach due to the 

convoluted nature of attempting to infer PM2.5 concentration from PM10 monitoring data 

for source-specific applications. 

We decided not to finalize option 4. As we recognized in the proposal preamble, 

the differences in characteristics between PM2.5 and PM10 and our limited understanding 

of their relationship are problematic for this application. We do not believe that 

generalized factors to convert PM10 concentrations to PM2.5 concentrations sufficiently 

reflect important industry-specific and spatially-related characteristics of PM2.5. In 

addition, removing altogether the obligation to provide preconstruction PM2.5 ambient 

monitoring data would eliminate industry’s contribution to the PM2.5 data record when 

source impacts are more than de minimis. 

Option 5 – Exempt sources from preconstruction monitoring if no SMC is established 

We noted in the proposed rule that the existing regulations at 40 CFR 

51.166(i)(5)(iii) and 52.21(i)(5)(ii) could be interpreted to allow a reviewing authority to 

exempt an applicant from preconstruction monitoring for any pollutant for which we have 

not established an SMC. These provisions state that a source may be exempted from 

preconstruction monitoring “if ... the pollutant is not listed in” the list of pollutants for 

62
 
 

which SMC have been set.13 The original rationale for this exemption is based on the 

lack of adequate methods for measuring ambient concentrations of pollutants not on the 

list. See 45 FR 52709, 52723-52724. We requested comment on this interpretation and 

any other legal or policy rationale that could support applying the text of these provisions 

to exempt sources from preconstruction monitoring if we elected not to define an SMC 

for PM2.5. 

One commenter stated that option 5 is the most practicable to implement until an 

SMC can be established and any potential gaps in the monitoring network can be filled. 

Two commenters question the legality of option 5 under the Act. They added that 

whatever may have been the case when the existing list of SMCs was adopted, methods 

now exist for conducting the monitoring required under section 165(e)(2). We decided 

not to finalize option 5, and have proposed an SMC rule for PM2.5. 

In conclusion, we are finalizing a combination of options 1 and 3 from the 

proposal, since we believe that it reflects existing procedures for other regulated NSR 

pollutants. Once we finalize an SMC for PM2.5, the reviewing authority will have the 

discretion to exempt a source from the preconstruction monitoring requirement if the 

projected PM2.5 ambient impact of the source is below the PM2.5 level promulgated in our 

rules. In addition, additional preconstruction monitoring data may not be necessary based 

on the availability of existing representative monitoring data in the area, as discussed 

13 These sections actually cross-reference the list at 40 CFR 51.166(i)(8)(i) and 

52.21(i)(8)(i), however we renumbered those paragraphs to paragraph (i)(5)(i) of those 

provisions in the December 31, 2002 NSR reform rule and inadvertently overlooked 

correcting the cross-references in paragraphs (i)(5)(ii) and (i)(5)(iii). See 67 FR 80186. 

As proposed, in this final action we have corrected this misnumbering and others in this 

section. 

63
 
previously. 

G. Nonattainment New Source Review (NA NSR) Requirements 

To receive a permit for a new major source or a major modification, sources 

subject to NA NSR must: 

•	 Install Lowest Achievable Emission Rate (LAER) control technology; 

•	 Offset new emissions with creditable emissions reductions; 

•	 Certify that all major sources owned or operated by the applicant in the same 

State are in compliance; and 

•	 Conduct an alternative siting analysis demonstrating that the benefits of the 

proposed source significantly outweigh the environmental and social costs. 

We did not propose, nor are we finalizing, any revisions to the first, third, and fourth of 

these requirements. Thus, these requirements apply for purposes of PM2.5 and its 

designated precursors just as they apply for other criteria pollutants and their designated 

precursors. In the remainder of this section G, we discuss our final actions related to 

offsets for direct PM2.5 emissions and emissions of PM2.5 precursors. 

1. What is the required offset ratio for direct PM2.5 emissions? 

Under section 173 of the Act, all major sources and major modifications at 

existing major sources within a nonattainment area must obtain emissions reductions to 

offset any emissions increases resulting from the project in an amount that is at least 

equal to the emissions increase, and that is consistent with reasonable further progress 

towards attainment. We refer to the proportional difference between the amount of the 

required offsets to the amount of emissions increase as the “offset ratio.” 

The Act specifies an offset ratio for several situations. In ozone nonattainment 

64
 
areas subject to subpart 2 (of title I, part D of the Act), the ratio is set between 1.1:1 and 

1.5:1 depending on the area’s level of classification pursuant to subpart 2. For other 

nonattainment areas, the Act establishes a minimum offset ratio of 1:1 pursuant to subpart 

1 of title I, part D of the Act. 

As proposed, we are finalizing the offset ratio for direct PM2.5 emissions as at 

least 1:1 on a mass basis because the PM2.5 program is being implemented under subpart 

1 of the Act. The commenters on this issue generally agreed that our regulations should 

require an offset ratio of at least 1:1 pursuant to subpart 1. 

A few commenters indicated that a lower ratio could be acceptable on a sourcespecific basis if accompanied by a modeling analysis demonstrating a net air quality 

benefit. One commenter suggested that such a demonstration would be possible when a 

direct PM2.5 emissions increase from a tall stack is being offset by ground-level PM2.5 

emission reductions. Applying diesel retrofit technology to bus and truck fleets is an 

example of how ground-level PM2.5 emission reductions could be achieved. We do not 

believe that a lower offset ratio is authorized under subpart 1, which prescribes an offset 

ratio of at least 1:1, and therefore we have not adopted this approach in our final rules. 

Some of the commenters disagreed regarding whether an offset ratio of at least 

1:1 under subpart 1 represents a ceiling or a floor on the level we can prescribe in our 

regulations. We interpret section 173 of the Act to allow higher offset ratios where 

necessary to achieve reasonable further progress. Accordingly, we believe that States 

may establish higher offset ratios in their State programs if they wish, but we do not 

believe that it would be appropriate for us to do so for PM2.5 in national regulations. We 

do not have cause to believe a higher ratio is necessary for PM2.5 in each area of the 

65
 
country and prefer to leave this to the discretion of States. We do not believe that the 

higher offset ratios required for ozone precursors under subpart 2 apply in any way to 

direct PM2.5 emissions or PM2.5 precursors. 

2. Which precursors are subject to the offset requirement? 

Consistent with our proposal, the pollutants that are designated as PM2.5 

precursors in a particular area are subject to the offset requirement in that area. 

Accordingly, SO2 is subject to offsets in all PM2.5 nonattainment areas. As a “presumedin” precursor, NOX will be subject to offsets unless a State obtains an exemption for its 

NSR program through a demonstration that NOX emissions in a particular area are not a 

significant contributor to that area’s ambient PM2.5 concentrations. As “presumed-out” 

precursors, VOC and ammonia would be subject to offsets only in areas where the State 

has demonstrated that these emissions are significant contributors to the area’s ambient 

PM2.5 concentrations. Two commenters on this issue agreed with this approach; one 

commenter recommended that we not require offsets for any PM2.5 precursors. We 

believe that it is appropriate to offset emissions increases of all precursors that have been 

established to contribute to the PM2.5 nonattainment problem in a particular area. 

3. What is the required offset ratio for PM2.5 precursors? 

As discussed previously, the Act requires that a source obtain offsets for 

emissions increases that occur in a nonattainment area. As with PM2.5 direct emissions, 

the minimum offset ratio permitted under subpart 1 of the Act is at least 1:1. Based on 

these requirements of the Act, we are finalizing our proposal that an offset ratio of at least 

1:1 applies where a source seeks to offset an increase in emissions of a PM2.5 precursor 

with creditable reductions of the same precursor. This offset ratio applies for all 

66
 
pollutants that have been designated as PM2.5 precursors in a particular nonattainment 

area. 

Most commenters agreed with this approach. A few commenters indicated that an 

offset ratio of less than 1:1 for precursor emissions of PM2.5 should be allowed only if 

there is a net air quality benefit and if the lower ratio is justified by air quality modeling 

analysis. They noted that for PM2.5 precursors, chemical reactivity modeling 

demonstrations should be developed and approved that are, at a minimum, capable of 

determining the impacts of the precursor emissions on the air quality in the nonattainment 

area in which the source is located. As noted previously, we do not believe that any 

offset ratio less than 1:1 is permissible under subpart 1. 

One commenter stated that consistent with the statutory scheme for ozone laid out 

in section 182, and given the severity of the health risks associated with PM2.5, EPA must 

require offsets of at least 1.15:1 for PM2.5 precursors in “moderate” nonattainment areas, 

and must increase the offset ratio in “serious” nonattainment areas or in areas that request 

extensions of their attainment deadlines. As mentioned previously, we do not believe 

that subpart 2 of the Act (which includes section 182) has any relevance to PM2.5 or its 

precursors. Subpart 2 is specific to ozone. In addition, we are implementing the PM2.5 

program under subpart 1. Nevertheless, under the Act, we believe that a State may 

require higher offset ratios if it determines that they are necessary to achieve reasonable 

further progress. For the reasons discussed previously with respect to direct PM2.5, we do 

not believe that it is appropriate for us to set higher offset ratios for PM2.5 precursors on a 

national basis. 

Two commenters requested that we make clear in the final rule that an increase in 

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precursor emissions need only be offset once, even if the increase triggers nonattainment 

NSR under, for example, both the ozone and PM2.5 programs. We agree with these 

commenters and are clarifying that a precursor emissions increase only needs to be offset 

once. A permit applicant will not, for example, need to obtain two sets of offsets for 

NOX emissions if NOX is regulated as a precursor both for ozone and PM2.5 in the area. 

The NOX precursor emissions need only be offset once in accordance with the applicable 

ratio. To the extent a higher ratio applies for ozone under subpart 2, the applicant would 

have to obtain offsets at the higher ratio. However, when the offset ratios are the same, 

both requirements can be met with a single set of NOX offsets. 

4. Is interpollutant trading allowable to comply with offset requirements? 

In this final rule, we are allowing limited interpollutant trading for purposes of 

offsets only (and not netting) under the PM2.5 NA NSR program. Specifically, the final 

rules allow interpollutant trading only based on a trading ratio established in the SIP as 

part of the attainment demonstration approved for a specific nonattainment area, on a 

statewide basis, or in a regional, multi-state program. This differs from our proposal in 

that the final rules do not allow interpollutant trading on a case-by-case basis as part of an 

individual NA NSR permitting process. For the purpose of offsets in the NA NSR 

program for PM2.5, the final rules allow reductions in direct PM2.5 emissions 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. 

We have completed a technical assessment to develop preferred interpollutant 

trading ratios that may be used for the purposes of PM2.5 offsets, where appropriate. The 

68
 
 

preferred ratios were generated with a PM2.5 response surface modeling (RSM) approach 

based on the EPA’s Community Multi-Scale Air Quality (CMAQ) model. This RSM 

approach allows one to distinguish the impact of direct and precursor emissions from 

particular source groupings on total PM2.5 concentrations within nine specific urban areas 

and broadly across U.S. regions. This approach was recently applied by the Agency to 

inform development of potential PM2.5 control strategies as part of the Regulatory Impact 

Assessment (RIA) for the final PM2.5 NAAQS.14 Based on results from the RSM, we 

determined the distribution of predicted ratios for urban areas and regions across the 

country and developed the preferred ratios with a goal to be environmentally protective. 

The technical approach with details on data and modeling inputs are fully described in a 

technical memo to the docket, “Details on Technical Assessment to Develop 

Interpollutant Trading Ratios for PM2.5 Offsets.”15 Use of the preferred ratios is 

recommended by EPA but not mandatory, and we do not intend to preclude the 

opportunity for a local demonstration of trading ratios on a case-by-case basis and public 

input into that process. 

Our work here and in other recent PM2.5 assessments clearly show that the relative 

efficacy of emissions reductions varies across pollutants and that a ton of direct PM2.5 is 

generally more effective than a ton of precursor emissions in reducing overall PM2.5 

concentrations. For the purposes of reporting information here, we define the “East” to 

be the 37 States either completely or in part east of 100 degrees west longitude. “West” 

14 A full description of this approach is available in the technical support 

document at http://www.epa.gov/scram001/reports/pmnaaqs_tsd_rsm_all_021606.pdf 

and in the docket for this rulemaking, Docket ID No. EPA-HQ-OAR-2003-0062. 

15 Available in the docket for this rulemaking, Docket ID No. EPA-HQ-OAR2003-0062. 

69
 
would include the remaining 11 western-most States in the continental United States. We 

found the following relationships between pollutants in developing the preferred trading 

ratios: 

1. NOX to SO2; SO2 to NOX: Our assessment indicated potential disbenefits of 

reducing NOX (i.e., reducing NOX tons in urban areas may increase overall 

PM2.5 concentrations) in the eastern United States and urban areas in the 

western United States. Due to the possibility of these disbenefits and the high 

degree of variability in the observed NOX to SO2 ratios or SO2 to NOX ratios 

across urban areas, we are not defining preferred ratios involving trades 

between these precursors but will rely upon a local demonstration to determine 

the appropriate trading ratios. 

2. NOX to Primary PM2.5; Primary PM2.5 to NOX: Based on a local demonstration 

that NOX reductions are beneficial in reducing PM2.5 concentrations (i.e., no 

disbenefits from NOX reductions as noted previously), our assessment indicates 

that the preferred trading ratio is 200 to 1 (NOX tons for PM2.5 tons) or 1 to 200 

(PM2.5 tons for NOX tons) for areas in the eastern United States, and 100 to 1 

(NOX tons for PM2.5 tons) or 1 to 100 (PM2.5 tons for NOX tons ) for areas in 

the western United States. 

3. SO2 to Primary PM2.5; Primary PM2.5 to SO2: We have determined a 

nationwide preferred ratio of 40 to 1 (SO2 tons for PM2.5 tons) or 1 to 40 (PM2.5 

tons for SO2) for trades between these pollutants. We recognize there is spatial 

variability here between urban and regionally located sources of these 

70
 
pollutants that can be addressed through a local demonstration to determine an 

area-specific relationship, as appropriate. 

We recommend that States use these hierarchies and trading ratios in their 

interpollutant trading programs to provide consistency and streamline the trading process. 

As indicated by our work and findings, it is appropriate to establish acceptable trading 

ratios for interpollutant trading for PM2.5 NSR offsets. If States elect to use EPA’s 

recommended trading ratios, they may rely on EPA’s technical work and a presumption 

that such ratios will be approvable by EPA absent a credible showing that EPA’s trading 

ratios are not appropriate for that location. If States choose to develop their own 

hierarchies/trading ratios, they will have to substantiate by modeling and/or other 

technical demonstrations of the net air quality benefit for PM2.5 ambient concentrations, 

and such a trading program will have to be approved by EPA. 

We acknowledge that the relationship between pollutants can vary across 

geographic areas. Thus, local demonstrations, to determine trading ratios, will need to 

address a number of local factors including, but not limited to, the following: 

1. The relative magnitude of emissions of direct PM2.5 and precursor gases (e.g., 

SO2 and NOX) within the geographic area of interest. 

2. The relative contribution to local PM2.5 nonattainment of directly emitted 

PM2.5 and individual precursors from the various sources or source categories 

under consideration as part of a potential interpollutant trade. 

3. The meteorological conditions and topography of the area, which result in 

different source-receptor relationships across pollutants within the local area. 

We have adopted this approach to capture the flexibility advantages of 

71
 
 

interpollutant trading, while remaining mindful of the limitations of existing air quality 

models. We believe that the regional-scale models used for area-wide attainment 

demonstrations have sufficient accuracy to establish an overall equivalence ratio for a 

nonattainment area. However, we do not believe that available models can accurately 

determine the effects of interpollutant trades at a single source. In addition, permit-bypermit modeling demonstrations are extremely resource intensive, only to yield limited 

results. For these reasons, the final rules only allow a State to develop its own 

interpollutant trading rule for inclusion in its SIP, based on a technical demonstration for 

a specific nonattainment area. We will not accept case-by-case demonstrations on an 

individual source permit basis. 

The flexibility provided by this policy allows sources to select the most costeffective manner to obtain the offsets necessary to ensure that PM2.5 air quality improves. 

This will be particularly beneficial where offsets for one particular pollutant are scarce in 

a particular area, as is often the case for direct PM2.5 emissions and SO2. 

We received a large number of comments on this issue representing a wide 

variety of viewpoints. Several commenters supported flexible interpollutant trading at 

ratios established either on an area-wide basis or permit by permit. They often pointed 

out the economic and administrative benefits of flexibility in the program, especially in 

areas where offsets for some pollutants will be difficult to obtain. One commenter 

asserted that such flexibility is essential to the ability of enterprises to be able to expand 

as the PM2.5 NAAQS is implemented, especially in the program’s early years. Another 

commenter suggested allowing such trading on an equal basis, without the “unnecessary 

complication” of interpollutant offset ratios. 

72
 
Many commenters argued against allowing interpollutant trading for offsets. 

These commenters commonly pointed out that direct PM2.5 emissions typically have a 

more local impact, while the impact of precursor emissions are farther afield. A number 

of commenters pointed out the complex atmospheric chemistry of secondary particulate 

formation and the shortcomings of the air quality models currently available to perform a 

detailed PM2.5 formation assessment, specifically that local-scale models are not 

sufficiently accurate and regional-scale models do not have the resolution to show local 

impacts adequately. According to two commenters, trading precursors for direct PM2.5 

emissions raises serious environmental justice concerns due to the localized impacts of 

direct PM2.5 emissions. These commenters also asserted that the equivalence between 

precursors would vary spatially and temporally, making it extremely difficult to assess, 

and that PM2.5 precursors also differ in their impacts on other air pollution problems, such 

as direct health and welfare impacts of SO2 and NOX; and formation of ozone, acid 

deposition, and reactive nitrogen deposition. 

We also received comments opposing allowing interpollutant trading for netting 

purposes, on the basis that the resulting program would be very staff-intensive apart from 

the difficulty of demonstrating through modeling the net air quality benefit of a single 

source trade. We concur with these commenters and are not allowing interpollutant 

trading for netting purposes at this time. 

A number of commenters supported some types of trades, but not others. Most 

frequently, these commenters favored allowing reductions in direct PM2.5 emissions to 

offset precursor emissions increases. One commenter suggested a hierarchy as follows: 

direct PM2.5 emissions, SO2, NOX, ammonia, and VOC. That is, a pollutant should be 

73
 
allowed as an offset for a pollutant ranked lower, but not the reverse (e.g., reductions in 

direct PM2.5 emissions could be used to offset increases in any of the listed pollutants, 

SO2 emissions reductions could offset NOX increases, etc.). 

As previously noted, this rule allows interpollutant and interprecursor trading of 

offsets according to a SIP-approved trading program. To be approved, the trading 

program must either adopt EPA’s recommended trading ratios or be backed up by 

regional-scale modeling that demonstrates a net air quality benefit using appropriate 

overall offset ratios for such trades for a specified nonattainment area, State, or multiState region. There is considerable uncertainty about the relationship of precursor and 

direct PM2.5 emissions to localized ambient PM2.5 concentration both spatially and 

temporally. Given the uncertainty as to localized adverse and beneficial effects, we have 

opted for program flexibility. We believe this is necessary, in part, because of the 

shortage of available offsets for some pollutants, particularly direct PM2.5 emissions and 

SO2, in many areas. 

H. How will the transition to the PM2.5 PSD requirements occur? 

1. Background 

On October 23, 1997, after the NAAQS for PM2.5 was originally promulgated, we 

issued a guidance document entitled “Interim Implementation for the New Source 

Review Requirements for PM2.5,” John S. Seitz, EPA. As noted in that guidance, section 

165 of the Act suggests that PSD requirements become effective for a new NAAQS upon 

the effective date of the NAAQS. Section 165(a)(1) of the Act provides that no new or 

modified major source may be constructed without a PSD permit that meets all of the 

section 165(a) requirements with respect to the regulated pollutant. Moreover, 

74
 
section 165(a)(3) provides that the emissions from any such source may not cause or 

contribute to a violation of any NAAQS. Also, section 165(a)(4) requires BACT for each 

pollutant subject to PSD regulation. 

The 1997 guidance stated that sources should continue to use implementation of a 

PM10 program as a surrogate for meeting PM2.5 NSR requirements until certain 

difficulties were resolved, primarily the lack of necessary tools to calculate the emissions 

of PM2.5 and related precursors, the lack of adequate modeling techniques to project 

ambient impacts, and the lack of PM2.5 monitoring sites. With this final action and 

technical developments in the interim, these difficulties have largely been resolved. 

2. Transition for “Delegated States” 

The Federal PSD program is contained in 40 CFR 52.21. This section is the 

Federal implementation plan for areas lacking an approved PSD program. We implement 

this program in Indian country and some U.S. territories, but for the most part we have 

delegated implementation of 40 CFR 52.21 to those States without approved PSD 

programs (typically referred to as “delegated States”). Except as provided in the 

grandfathering provisions that follow, these final rules go into effect and must be 

implemented beginning on the effective date of this rule, [INSERT DATE 60 DAYS 

AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] in all areas 

subject to 40 CFR 52.21, including the delegated States. 

 Consistent with 40 CFR 52.21(i)(1)(x), wherein EPA grandfathered sources or 

modifications with pending permit applications based on PM from the PM10 requirements 

established in 1987, EPA will allow sources or modifications who previously submitted 

applications in accordance with the PM10 surrogate policy to remain subject to that policy 

75
 
 

for purposes of permitting if EPA or its delegate reviewing authority subsequently 

determines the application was complete as submitted. This is contingent upon the 

completed permit application being consistent with the requirements pursuant to the EPA 

memorandum entitled “Interim Implementation of New Source Review Requirements for 

PM2.5” (Oct. 23, 1997) recommending the use of PM10 as a surrogate for PM2.5. 

Accordingly, we have added 40 CFR 52.21(i)(1)(xi) to reflect this grandfathering 

provision. 

3. Transition for “SIP-Approved States” 

The requirements for State PSD programs are contained in 40 CFR 51.166. Most 

States have developed PSD programs according to these requirements, which we have 

approved into each State’s implementation plan. States with PSD programs approved 

under 40 CFR 51.166 are called “SIP-approved States.” 

States with SIP-approved PSD programs that require amendments to incorporate 

these final NSR rule changes for PM2.5 will need time to accomplish these SIP 

amendments. For example, a State may need to amend its existing regulations to add the 

specific significant emissions rate for PM2.5 or a designated precursor. In our December 

31, 2002 Federal Register notice promulgating other changes to the NSR program, we 

explained that the Act does not specifically address the timeframe by which States must 

submit SIP revisions when we revise the PSD and NA NSR rules. We nonetheless 

looked to section 110(a)(1) to guide our decision to require States to adopt and submit 

plan revisions within 3 years from when we publish changes in the Federal Register. We 

codified this approach in the PSD regulations at 40 CFR 51.166(a)(6)(i) and applied this 

same timeframe to State NA NSR programs through that final rule action. 64 FR 80241. 

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This rule follows our established approach for determining when States must adopt and 

submit revised SIPs following changes to the NSR regulations, but does not revise 

otherwise applicable SIP submittal deadlines. Accordingly, we are requiring States with 

SIP-approved PSD programs to submit revised PSD programs and revised NA NSR 

programs for PM2.5 (see section V.I.) within 3 years from the date of this action16. 

During this SIP development period, the PM2.5 NAAQS must still be protected 

under the PSD program in such States. We are finalizing our proposed option 1 that if a 

SIP-approved State is unable to implement a PSD program for the PM2.5 NAAQS based 

on these final rules, the State may continue to implement a PM10 program as a surrogate 

to meet the PSD program requirements for PM2.5 pursuant to the 1997 guidance 

mentioned previously. Under option 1 for SIP-approved States, we had proposed two 

additional requirements. These were to require sources to demonstrate that emissions 

from construction or operation of the facility will not cause or contribute to a violation of 

the PM2.5 NAAQS and to include condensable PM emissions in determining major NSR 

16 In our proposal, we proposed April 5, 2008 as a deadline for States to comply 

with the revised nonattainment NSR and PSD requirements in this rule. However, in light 

of the time it has taken to complete this final rule, expecting States to submit required SIP 

revisions consistent with this final rule by April 5, 2008 is no longer practical or fair. 

Nevertheless, States are still currently required to implement a PSD program for PM2.5, 

and we still expect States to fulfill the SIP infrastructure requirements of CAA section 

110(a)(2), including the PSD program requirements, by April 5, 2008. We believe these 

PSD program requirements are currently met by implementing the transitional PSD 

program for PM2.5 described in this preamble (a.k.a. the PM10 surrogate policy). In 

accordance with a Consent Decree in Environmental Defense and American Lung Ass'n 

v. Johnson, No. 1:05CV00493 (D.D.C. June 15, 2005), EPA must determine by October 

5, 2008 whether each State has submitted the SIP revisions for the PM2.5 PSD program 

required under section 110(a)(2) of the Act. This rulemaking does not change the 

specific guidance we previously provided to States on what they should submit by April 

5, 2008 to comply with section 110(a)(2). 

77
 
applicability and control requirements. We are not finalizing either of these additional 

requirements of our proposed option 1. We have dropped the requirement for 

demonstrating compliance with the PM2.5 NAAQS in order to maintain consistency in the 

application of the existing surrogate policy across the PSD program during the interim 

period. Since in the final rule we are otherwise allowing SIP-approved States to continue 

with the existing PM10 surrogate policy to meet the PSD requirements for PM2.5, partially 

implementing the PM10 surrogate policy in this manner would be confusing and difficult 

to administer. Thus, to ensure consistent administration during the transition period, we 

have elected to maintain our existing PM10 surrogate policy which only recommends as 

an interim measure that sources and reviewing authorities conduct the modeling 

necessary to show that PM10 emissions will not cause a violation of the PM10 NAAQS as 

a surrogate for demonstrating compliance with the PM2.5 NAAQS. Also as discussed 

previously in section V.E, we are not requiring condensable emissions to be fully 

integrated into the PM2.5 program until the end of the transition period to validate test 

methods discussed in section V.E of this preamble. 

In our proposal, we offered two additional options for the SIP development period 

in States with SIP-approved PSD programs. Under option 2, we would have updated the 

1997 guidance to reflect the provisions in these final rules and allowed States to run a 

PM2.5 program pursuant to this updated guidance. Alternatively under option 2, we 

would have amended appendix S and 40 CFR 52.24 so that the PSD requirements of 40 

CFR 52.21 would govern the issuance of major NSR permits during the SIP development 

period. Finally, under option 3, we would have allowed a State to request delegation of 

just the Federal PM2.5 PSD program in 40 CFR 52.21 in that State. A State that otherwise 

78
 
had a SIP-approved PSD program could have requested delegation for PM2.5 by 

informing us that it did not intend to submit a PSD SIP for PM2.5 in the immediate future. 

We received several comments supporting option 1, although some of these 

commenters requested that we not require condensable emissions to be included until the 

concerns with test methods were resolved. One of these commenters favored continuing 

to implement the PM10 program as a surrogate under the 1997 guidance to provide clarity 

and certainty to the permitting agency and regulated community. The commenter 

indicated that PM2.5 inventories and methods for estimating emission rates are 

rudimentary and may even be nonexistent in some cases, which would make permitting 

onerous. 

A few commenters opposed option 1. One of these commenters indicated that we 

should not continue outdated policy (i.e., the 1997 NSR guidance) because it does not 

address the PM2.5 problem, cannot be implemented in some States, and does not 

incorporate precursor emissions. 

Four commenters expressed support for option 2. Three of these suggested that 

we issue updated guidance to incorporate these PSD requirements for PM2.5, while one 

preferred that we revise appendix S to point to the requirements of 40 CFR 52.21. We 

received one comment in favor of option 3 and three opposed. 

Two commenters supported approaches different from our options. One of these 

commenters requested that the interim framework should, at a minimum, ensure that any 

new or modified project that exceeds thresholds use BACT. The commenter also 

suggested that we require offsets for projects approved before the other protective 

elements of the full PSD program are in place to ensure that there is no significant 

79
 
deterioration in air quality. Another commenter stated that none of the proposed options 

were viable for their State. The commenter requested that we allow States to continue 

their existing PM10 program as a surrogate for PM2.5, without caveat. 

As noted previously, we are finalizing proposed option 1, without the requirement 

of demonstrating compliance with the PM2.5 NAAQS or the requirement to include 

condensable emissions. We believe that our final rule is reasonable for the following 

reasons. First, PM10 will act as an adequate surrogate for PM2.5 in most respects, because 

all new major sources and major modifications that would trigger PSD requirements for 

PM2.5 would also trigger PM10 requirements because PM2.5 is a subset of PM10. Second, 

both of the precursors designated in the final rule – SO2 and NOX (presumptively) – are 

already regulated under State NSR programs for other criteria pollutants. Thus, those 

precursors will be subject to NSR through those other programs. We do not believe that 

the other options or suggestions offer significant advantages that outweigh the utility and 

ease of implementation of this approach. 

States may include grandfathering provisions similar to the ones EPA included in 

the transition requirements for 40 CFR 52.21. 

I. How will the transition to the PM2.5 NA NSR requirements occur? 

1. Background 

The requirements for State NA NSR programs are contained in 40 CFR 51.165. 

All States with nonattainment areas have developed NA NSR programs according to 

these requirements, which we have approved into each State’s implementation plan. 

However, as noted previously, it takes time for a State to amend its SIP when it must 

make changes to its NA NSR program. According to the provisions of 40 CFR 52.24(k), 

80
 
during such an interim period when a State lacks an approved NA NSR program for a 

particular pollutant, appendix S of 40 CFR part 51 applies for NA NSR permitting. 

Section 172(c)(5) of the Act requires that States issue major NSR permits for 

construction and major modifications of major stationary sources in any nonattainment 

area. Thus, since the PM2.5 nonattainment designations became effective on April 5, 

2005, States are now required to issue major NSR permits that address the section 173 

NA NSR requirements for PM2.5. 

On the date that the PM2.5 nonattainment designations took effect (April 5, 2005), 

we issued guidance to address implementation of the NA NSR program pending the 

completion of this action to develop implementation rules for PM2.5. See memorandum 

from Stephen D. Page, Director, Office of Air Quality Planning and Standards to 

Regional Air Directors, “Implementation of New Source Review Requirements in PM2.5 

Nonattainment Areas” (April 5, 2005). 

Our current guidance permits States to implement a PM10 NA NSR program as a 

surrogate to address the requirements of NA NSR for the PM2.5 NAAQS. A State's 

surrogate major NSR program in PM2.5 nonattainment areas may consist of either the 

implementation of the State’s SIP-approved NA NSR program for PM10 or 

implementation of a major NSR program for PM10 under the authority in 40 CFR part 51, 

appendix S. 

2. Transition 

With this finalization of the new PM2.5 NSR implementation requirements under 

40 CFR 51.165, States now have the necessary tools to implement a NA NSR program 

for PM2.5. After the effective date of the amended rule (that is, [INSERT DATE 60 

81
 
DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]), 

States will no longer be permitted to implement a NA NSR program for PM10 as a 

surrogate for the PM2.5 NA NSR requirements. Most States will then need to implement 

a transitional PM2.5 NA NSR program under appendix S (as amended in this rulemaking 

action) until EPA approves changes to a State's SIP-approved NA NSR program to reflect 

the new requirements under 40 CFR 51.165. At this time, we do not believe it is 

appropriate to allow grandfathering of pending permits being reviewed under the PM10 

surrogate program in nonattainment areas, mainly because of a State’s obligations to 

expedite attainment and the fact that we had not established a similar precedent for 

transitioning from PM to PM10. 

The NA NSR provisions in a State’s existing SIP-approved NA NSR program 

would also apply in areas designated as nonattainment for the PM2.5 NAAQS if the SIPapproved regulations contain a generic requirement to issue part D permits in areas 

designated as nonattainment for any criteria pollutant and do not otherwise need to be 

amended to incorporate the changes finalized in this action. States belonging to the 

following categories will need to revise their NA NSR regulations and submit them to 

82
 
 

EPA for incorporation into the SIP within 3 years from the date of this action17: 

•	 States that have nonattainment regulations which need to be amended to 

incorporate the new PM2.5 requirements. 

•	 States that have designated nonattainment areas for PM2.5 and their 

nonattainment NSR regulations specifically list the areas in which NA NSR 

applies (i.e., the list does not include the designated nonattainment areas for 

PM2.5). 

•	 States that have not previously had nonattainment areas but now have 

nonattainment areas for PM2.5. 

These States will have to implement a transitional NA NSR permitting program 

for PM2.5 pursuant to 40 CFR 52.24(k) and appendix S until their existing part D SIPs are 

revised to meet these new PM2.5 NSR requirements under 40 CFR 51.165. 

3. Implementation of NSR Under the “Emissions Offset Interpretative Ruling” (40 CFR 

part 51, appendix S) with Revisions 

In general, appendix S requires new or modified major sources to meet LAER and 

obtain sufficient offsetting emissions reductions to assure that a new major source or 

17 As discussed earlier, we are following the precedent we established in our 2002 

rule for NA NSR program revisions to allow States adequate time to adopt these 

revisions. For practical and fairness reasons, we are not requiring the NA NSR elements 

of this rule to be submitted by April 5, 2008, as we had proposed. However, the States 

are still required to submit nonattainment plans for PM2.5 (including NA NSR programs) 

on April 5, 2008. We believe this requirement is satisfied by implementing the 

transitional NA NSR program for PM2.5 (a.k.a. the PM10 surrogate policy) described in 

our April 5, 2005 guidance, or, if submitted after the effective date of this rule, 

implementing Appendix S as revised in this rule. This rulemaking does not change the 

specific guidance we previously provided to States on what they should submit to EPA 

by April 5, 2008 to comply with nonattainment area requirements under Part D. 

83
 
major modification of an existing major source will not interfere with the area’s progress 

toward attainment. Readers should refer to appendix S for a complete understanding of 

these and other appendix S requirements. In this action, we are finalizing our proposed 

revisions to appendix S to include provisions necessary to implement a transitional NA 

NSR program for PM2.5, including significant emissions rates applicable to major 

modifications for PM2.5 and, as appropriate, precursors. Additionally, since we are 

finalizing interpollutant trading provisions in the NSR rules at 40 CFR 51.165, we are 

also amending appendix S to allow interpollutant trading for PM2.5. Appendix S applies 

directly to new and modified major stationary sources. In accordance with the 

requirements of section 110(a)(2)(c) of the Act, we believe that the majority of States 

have the legal authority to issue permits consistent with these requirements under an 

existing SIP-approved permitting program. Nonetheless, at least one State has reported 

that it lacks the legal authority to issue permits implementing the requirements of 

appendix S under its existing permitting rules. 

If a State is unable to apply the requirements of appendix S, we will act as the 

reviewing authority for the relevant portion of the permit. We believe that it is 

appropriate for EPA to issue the preconstruction permits in such circumstances. 

Congress amended the Act in 1990 to remove the requirements that would have applied a 

construction ban in areas that lacked a SIP-approved part D permit program. Thus, we 

believe that it is consistent with Congressional intent that either the State or EPA issues 

construction permits for those projects meeting the applicable criteria during the interim 

period. See the preamble of the proposal for this rule for more detail on the legal basis 

for requiring States to issue NA NSR permits pursuant to appendix S during the SIP 

84
 
development period (70 FR 66045-46). 

We received three comments supporting the issuance of NA NSR permits under 

appendix S during the SIP development period. Two of these commenters expected 

States generally to be able to do so, while one suggested that EPA issue such permits 

because States will lack the authority to do so without protracted rule revisions. One of 

these commenters also suggested that we revise appendix S to authorize interprecursor 

trading during the transition period, believing that the paucity of existing direct PM2.5 

emissions and SO2 offsets likely will make business expansion in PM2.5 nonattainment 

areas from now until at least April 2008 impossible unless this is done. One commenter 

suggested that we suspend the 2005 PM2.5 NSR guidance which allows use of PM10 

emissions as a surrogate for PM2.5 emissions in PM2.5 nonattainment areas when we adopt 

the final PM2.5 implementation rules, while three other commenters requested continued 

implementation of that guidance during the interim period. 

As noted previously, this final action will require States to amend their NA NSR 

programs consistent with the amended rules at 40 CFR 51.165. During the SIP 

development period, where they have legal authority to do so, States must issue NA NSR 

permits under appendix S (as revised for purposes of the PM2.5 program). To address one 

of the points raised by commenters, we are amending appendix S to allow interpollutant 

trading for PM2.5 in this final rule. Where a State determines that it does not have legal 

authority to issue such permits, we will act as the reviewing authority. As of the effective 

date of this action, the 2005 PM2.5 NSR guidance on use of PM10 emissions as a surrogate 

for PM2.5 emissions will remain in effect only for PSD in the SIP-approved States during 

the SIP development period. In the delegated PSD States and in nonattainment areas, the 

85
 
new PM2.5 requirements will apply immediately on the effective date of this final action. 

J. Does major NSR apply to PM2.5 precursors during the SIP development period? 

As discussed previously in section V.A, we have taken final action on NSR 

applicability for PM2.5 precursors. Specifically, we have designated SO2 as a national 

precursor to PM2.5 in all areas, NOX as a “presumed-in” precursor in all areas, VOC as a 

“presumed-out” precursor in all areas, and ammonia as a “presumed-out” precursor. 

Thus, States have the option of excluding NOX as a precursor by demonstrating that NOX 

emissions are not a significant contributor to ambient PM2.5 concentrations in a particular 

area. In addition, States have the option of identifying VOC and/or ammonia as 

precursor(s) by demonstrating that emissions of VOC and/or ammonia are a significant 

contributor in an area, and thus should be subject to major NSR. 

In the proposal, during the SIP development period, we proposed that SO2 should 

be treated as a regulated PM2.5 precursor as of the effective date of this final rule since 

there is no doubt about its status as such in any area and proposed to defer NSR 

applicability for NOX until a State SIP submittal so that if a State elected to submit 

information to rebut the presumption that NOX is a regulated PM2.5 precursor, the State 

would have an opportunity to do so in its SIP submittal. We also proposed that VOCs 

and ammonia would not be treated as PM2.5 precursors during the interim period because 

they are presumed not to be precursors until they have been demonstrated to be through a 

State’s SIP submittal. 

A few commenters supported staying the applicability of NSR to all precursors 

during the interim period. However, two of these supporters suggested that EPA 

establish mechanisms for interpollutant trading for offsets during the interim period so 

86
 
 

 

that increases in direct PM2.5 emissions can be offset with SO2 or NOX emissions 

reductions. Another supporter noted that their State cannot impose obligations on NSR 

applicants until those obligations are established in State regulations or statutes. Another 

indicated that this delay would allow States the time to develop experience and 

knowledge in establishing local photochemical models and to performance test their 

accuracy. 

Two commenters opposed staying NSR applicability for any precursors. They 

believe that this would make attainment more difficult. One commenter suggested that 

SO2 should be designated as a precursor during the interim period, and another suggested 

the same for SO2 and NOX. 

Based on the comments, we have been persuaded that SIP-approved PSD States 

will not have the authority to regulate PM2.5 precursors before they have amended their 

SIPs to incorporate these requirements in attainment areas. Thus, in order to allow time 

for these States to revise their regulations to incorporate such requirements, this final 

action does not require regulation of SO2 or NOX as precursors to PM2.5 under PSD until 

the SIP development period ends. In addition, we are allowing SIP-approved PSD States 

to continue with the existing PM10 surrogate policy to meet the PSD requirements for 

PM2.5. However, for delegated PSD States, SO2 and NOX are regulated as precursors from 

the effective date of this rule. However, these States or EPA have the option of excluding 

NOX as a precursor by demonstrating that NOX emissions are not a significant contributor 

to ambient PM2.5 concentrations in a particular area. 

For nonattainment areas, the transitional program pursuant to appendix S will 

apply on the effective date of this action. Under appendix S, SO2 will be regulated as a 

87
 
precursor in all nonattainment areas for PM2.5.. However, unlike in the proposal, NOX 

will not be regulated as a precursor for PM2.5 because we believe it is appropriate to give 

States the opportunity to determine whether NOX emissions are a significant contributor 

to the ambient PM2.5 problem, and to make the appropriate demonstration in their SIP. 

Finally, for States determining that VOC and/or ammonia are PM2.5 precursors under 

their SIPs, we will approve their definition of “significant emissions rate” for each 

precursor based on an appropriate demonstration. 

K. Are there any Tribal concerns? 

Some Tribal areas may be designated as nonattainment, in part because of 

pollution that is transported from surrounding State lands. Tribal representatives have 

advocated for additional flexibility to address nonattainment problems caused by 

transported pollution, such as a pool of available NSR offset set-asides (which we expect 

would come from State offset pools or banks), because they have limited ability to 

generate offsets on their own. Tribal representatives have raised these and other concerns 

in discussions on implementation of the 8-hour ozone and PM2.5 standards, and in 

comments on the 8-hour ozone implementation rule. We requested comment on whether 

emissions offset set-asides, possibly generated by innovative measures to promote 

additional emissions reductions, are an appropriate method to help level the playing field 

for the Tribes and support economic development in Tribal areas. We also requested 

comment on ways in which States may help provide the Tribes access to offsets from 

non-Tribal areas. We received no comments on these issues. 

We recently proposed Tribal NSR rules. See 71 FR 48696, August 21, 2006. 

They include a NA NSR rule, which refers to appendix S for its substantive requirements, 

88
 
and a minor NSR rule. In recognition of the concerns mentioned above, we have 

proposed and sought comments on options for obtaining offset relief in that proposal. 

We will address these issues in the context of that rule. 

L. What are the requirements for minor NSR for PM2.5? 

Pursuant to section 110(a)(2)(C) of the Act, States must have a minor source 

permitting program. This applies to new and modified stationary sources that are not 

considered major for a criteria pollutants or a precursor for a criteria pollutant. Prior to 

this action, States were required to include the following pollutants in their minor NSR 

program: 

• VOC, 

• SO2, 

• NOX, 

• CO, 

• PM10, and 

• Lead (Pb). 

Based on this action, States must now amend their minor source programs to 

include direct PM2.5 emissions and precursor emissions in the same manner as included 

for purposes of PM2.5 major NSR. 

M. Rural Transport Areas 

In the proposal for the Clean Air Fine Particle Implementation Rule and this NSR 

implementation rule for PM2.5, we considered the option of classifying some 

nonattainment areas as transport areas that suffer from overwhelming transport, and of 

developing NA NSR rules specific to such areas. However, the final implementation rule 

89
 
does not include the rural transport classification. Consequently, no NA NSR rules have 

been developed or finalized in this rule. 

VI. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory Planning and Review 

Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this action is 

a “significant regulatory action” because it is likely to raise novel legal or policy issues 

arising out of legal mandates, the President’s priorities, or the principles set forth in the 

Executive Order. Accordingly, EPA submitted this action to the Office of Management 

and Budget (OMB) for review under EO 12866 and any changes made in response to 

OMB recommendations have been documented in the docket for this action. 

B. Paperwork Reduction Act 

The information collection requirements in this rule have been submitted for 

approval to the OMB under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 

information collection requirements are not enforceable until OMB approves them. The 

Information Collection Request (ICR) document prepared by EPA has been assigned 

OMB Control Number 2060-0003 (EPA ICR No. 1230.21). 

To achieve the purposes of the major NSR program, certain records and reports 

are necessary for the State or local agency (or the EPA Administrator in non-delegated 

States), for example, to: (1) confirm the compliance of status of stationary sources, 

identify any stationary sources not subject to the rules, and identify stationary sources 

subject to the rules; and (2) ensure that the stationary source control requirements are 

being achieved. The information would be used by EPA or State enforcement personnel 

to (1) identify stationary sources subject to the rules, (2) ensure that appropriate control 

90
 
technology is being properly applied, and (3) ensure that the emission control devices are 

being properly operated and maintained on a continuous basis. 

 This final NSR rule does not create new information collection requirements, but 

rather expands the coverage of the existing requirements of the major NSR program. 

Specifically, the rule changes finalized in this action add PM2.5 to the list of air pollutants 

that must be addressed in the major NSR program, and the companion proposal adds 

certain elements that are necessary for a complete PM2.5 NSR program. This change is 

unlikely to increase significantly the number of NSR permits that must be issued, but 

may add to the analyses that sources and Federal, State, and local reviewing authorities 

must conduct as part of the construction permit application and review process. 

We expect the rule changes finalized in this action to increase the burden 

associated with major NSR permitting for tracking new emissions of PM2.5 against 

increments; collecting ambient air quality monitoring data for existing PM2.5 

concentrations; reviewing the effects of PM2.5 emissions on soils and vegetation, as well 

as on air quality related values in Class I areas; determining the appropriate best available 

control technology or lowest achievable emission rate; and/or obtaining offsets. At the 

same time, there would be a reduction in burden directly associated with the revocation 

of the annual increment for PM10, which is proposed in the proposed rule. 

Over the 3-year period covered by the ICR, we estimate an average annual burden 

increase of about 39,000 hours (about 8 percent) and $4.3 million (about 10 percent) for 

all industry entities that would be affected by this final NSR rule. For the same reasons, 

we also expect the final rule to increase burden for the State and local authorities 

reviewing permit applications when fully implemented. In addition, there would be 

91
 
additional burden for State and local agencies to revise their SIPs to incorporate the 

proposed changes. We estimate the combined increase in burden to average about 16,000 

hours and $700,000 annually for all State and local reviewing authorities, which is less 

than 13 percent. 

Burden means the total time, effort, or financial resources expended by persons to 

generate, maintain, retain, or disclose or provide information to or for a Federal agency. 

This includes the time needed to review instructions; develop, acquire, install, and utilize 

technology and systems for the purposes of collecting, validating, and verifying 

information, processing and maintaining information, and disclosing and providing 

information; adjust the existing ways to comply with any previously applicable 

instructions and requirements; train personnel to be able to respond to a collection of 

information; search data sources; complete and review the collection of information; and 

transmit or otherwise disclose the information. 

An agency may not conduct or sponsor, and a person is not required to respond to 

a collection of information unless it displays a currently valid OMB control number. The 

OMB control numbers for EPA’s regulations in 40 CFR are listed in 40 CFR part 9. 

When this ICR is approved by OMB, the Agency will publish a technical amendment to 

40 CFR part 9 in the Federal Register to display the OMB control number for the 

approved information collection requirements contained in this final rule. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a 

regulatory flexibility analysis of any rule subject to notice and comment rulemaking 

requirements under the Administrative Procedure Act or any other statute unless the 

92
 
Agency certifies that the rule will not have a significant economic impact on a substantial 

number of small entities. Small entities include small businesses, small organizations, 

and small governmental jurisdictions. 

For purposes of assessing the impacts of this proposed rule on small entities, 

“small entity” is defined as: (1) a small business as defined by the Small Business 

Administration’s regulations at 13 CFR 121.201; (2) a small governmental jurisdiction 

that is a government or a city, county, town, school district or special district with a 

population of less than 50,000; and (3) a small organization that is any not-for-profit 

enterprise which is independently owned and operated and is not dominant in its field. . 

After considering the economic impacts of this final rule on small entities, I 

certify that this rule will not have a significant economic impact on a substantial number 

of small entities. The requirements of this final rule apply only to new major stationary 

sources or major modifications of existing major stationary sources. This final rule does 

not create any new requirements under the major NSR program, but simply expands the 

program to cover an additional pollutant, referred to as PM2.5. There is no reason to 

expect that the rule will significantly or uniquely affect small businesses, organizations, 

or governments (few, if any, of which act as reviewing authorities pursuant to this final 

rule). 

D. Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 

104-4, establishes requirements for Federal agencies to assess the effects of their 

regulatory actions on State, local, and tribal governments and the private sector. Under 

section 202 of the UMRA, we generally must prepare a written statement, including a 

93
 
cost-benefit analysis, for proposed and final rules with “Federal mandates” that may 

result in expenditures to State, local, and tribal governments, in aggregate, or to the 

private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule 

for which a written statement is needed, section 205 of the UMRA generally requires us 

to identify and consider a reasonable number of regulatory alternatives and adopt the 

least costly, most cost-effective, or least burdensome alternative that achieves the 

objectives of the rule. The provisions of section 205 do not apply when they are 

inconsistent with applicable law. Moreover, section 205 allows us to adopt an alternative 

other than the least-costly, most cost-effective, or least-burdensome alternative if the 

Administrator publishes with the final rule an explanation why that alternative was not 

adopted. Before we establish any regulatory requirements that may significantly or 

uniquely affect small governments, including tribal governments, we must have 

developed under section 203 of the UMRA a small government agency plan. The plan 

must provide for notifying potentially affected small governments, enabling officials of 

affected small governments to have meaningful and timely input in the development of 

our regulatory proposals with significant Federal intergovernmental mandates, and 

informing, educating, and advising small governments on compliance with the regulatory 

requirements. 

We have determined that this rule does not contain a Federal mandate that may 

result in expenditures of $100 million or more for State, local, and tribal governments, in 

the aggregate, or the private sector in any 1 year. The final rule does not add any new 

requirements to the NSR program; it simply expands the program to cover PM2.5 in 

addition to the several other pollutants already defined as regulated NSR pollutants. 

94
 
(Technically, the rule also subjects the precursors to PM2.5 to the NSR program. 

However, these precursors (SO2, NOX, and VOC) are already subject to the existing NSR 

program.) As discussed previously in section VI.B on the Paperwork Reduction Act, the 

expansion of the NSR program to cover PM2.5 will only marginally increase the 

expenditures of State, local, and tribal governments and the private sector on the 

program. Thus, this action is not subject to the requirements of sections 202 and 205 of 

the UMRA. 

The EPA has determined that this rule contains no regulatory requirements that 

might significantly or uniquely affect small governments. As noted previously, this rule 

does not create any new requirements under the major NSR program, but simply expands 

the program to cover an additional pollutant (PM2.5). There is no reason to expect that 

the rule will significantly or uniquely affect small governments, few if any of which act 

as reviewing authorities. 

E. Executive Order 13132 - Federalism 

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), 

requires us to develop an accountable process to ensure “meaningful and timely input by 

State and local officials in the development of regulatory policies that have federalism 

implications.” “Policies that have federalism implications” is defined in the Executive 

Order to include regulations that have “substantial direct effects on the States, on the 

relationship between the national government and the States, or on the distribution of 

power and responsibilities among the various levels of government.” 

This final rule does not have federalism implications. It will not have substantial 

direct effects on the States, on the relationship between the national government and the 

95
 
States, or on the distribution of power and responsibilities among the various levels of 

government, as specified in Executive Order 13132. Pursuant to the terms of Executive 

Order 13132, it has been determined that this proposed rule does not have “federalism 

implications” because it does not meet the necessary criteria. Thus, the requirements of 

section 6 of the Executive Order do not apply to this proposed rule. 

In the spirit of Executive Order 13132, however, and consistent with our policy to 

promote communications between us and State and local governments, we specifically 

solicited comment on the proposed rule from State and local officials. 

F. Executive Order 13175 - Consultation and Coordination with Indian Tribal 

Governments 

Executive Order 13175, entitled "Consultation and Coordination with Indian 

Tribal Governments" (65 FR 67249, November 9, 2000), requires EPA to develop an 

accountable process to ensure "meaningful and timely input by Tribal officials in the 

development of regulatory policies that have Tribal implications." This final rule does 

not have "Tribal implications" as defined in Executive Order 13175. This rule concerns 

the NSR requirements for State and tribal implementation plans. The CAA provides for 

States to develop plans to regulate emissions of air pollutants within their jurisdictions. 

The Tribal Air Rule (TAR) under the CAA gives Tribes the opportunity to develop and 

implement CAA programs such as programs to attain and maintain the PM2.5 NAAQS, 

but it leaves to the discretion of the Tribe the decision of whether to develop these 

programs and which programs, or appropriate elements of a program, they will adopt. 

Although Executive Order 13175 does not apply to this rule, EPA did reach out to 

Tribal leaders and environmental staff in developing this rule. From 2001 – 2004, the 

96
 
EPA supported a National Designations Workgroup to provide a forum for tribal 

professionals to give input to the designations process. In 2006, EPA supported a 

national "Tribal Air call" which provides an open forum for all Tribes to voice concerns 

to EPA about the NAAQS implementation process, including the PM2.5 NAAQS. In 

these meetings, EPA briefed call participants and Tribal environmental professionals 

gave input as the rule was under development. Furthermore, in December 2005, EPA 

sent individualized letters to all federally recognized Tribes about the proposal to give 

Tribal leaders the opportunity for consultation. 

This final rule does not have Tribal implications as defined by Executive Order 

13175. It does not have a substantial direct effect on one or more Indian Tribes, since no 

Tribe has implemented a CAA program to attain the PM2.5 NAAQS at this time. The 

EPA notes that even if a Tribe were implementing such a plan at this time, while the rule 

might have Tribal implications with respect to that Tribe, it would not impose substantial 

direct costs upon it, nor would it preempt Tribal law. 

Furthermore, this rule does not affect the relationship or distribution of power and 

responsibilities between the Federal government and Indian Tribes. The CAA and the 

TAR establish the relationship of the Federal government and Tribes in developing plans 

to attain the NAAQS, and this rule does nothing to modify that relationship. As this rule 

does not have Tribal implications, Executive Order 13175 does not apply. 

G. Executive Order 13045 - Protection of Children from Environmental Health and 

Safety Risks 

Executive Order 13045, entitled “Protection of Children from Environmental 

Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), applies to any rule that: 

97
 
(1) is determined to be “economically significant” as defined under Executive Order 

12866; and (2) concerns an environmental health or safety risk that we have reason to 

believe may have a disproportionate effect on children. If the regulatory action meets 

both criteria, the Agency must evaluate the environmental health or safety effects of the 

planned rule on children, and explain why the planned regulation is preferable to other 

potentially effective and reasonably feasible alternatives considered by the Agency. 

This final rule is not subject to the Executive Order because it is not economically 

significant as defined in Executive Order 12866, and because the Agency does not have 

reason to believe the environmental health or safety risks addressed by this action present 

a disproportionate risk to children. This rule does not impose any new requirements 

under the NSR program. However, in expanding the major NSR program to address 

PM2.5, we believe that this rule will serve to reduce environmental health risks to all 

citizens, including children, because one of the basic requirements of the major NSR 

program is that new and modified major stationary sources must not cause or contribute 

to air quality in violation of the NAAQS. 

H. Executive Order 13211 - Actions That Significantly Affect Energy Supply, 

Distribution, or Use 

This rule is not a “significant energy action” as defined in Executive Order 13211, 

“Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, 

or Use” (66 FR 28355 (May 22, 2001)) because it is not likely to have a significant 

adverse effect on the supply, distribution, or use of energy. The final rule does not add 

any new requirements to the major NSR program; it simply expands the program to cover 

PM2.5 in addition to the several other pollutants already defined as regulated NSR 

98
 
pollutants. Although the major NSR program may apply to energy supply and 

distribution companies that build or significantly modify major sources of regulated NSR 

pollutants, we believe that any increase in expenditures for obtaining NSR permits that 

may result from this rule will be marginal rather than significant. 

I. National Technology Transfer and Advancement Act 

As noted in the proposed rule, section 12(d) of the National Technology Transfer 

and Advancement Act of 1995 (NTTAA), Public Law No. 104-113, 12(d) (15 U.S.C. 272 

note) directs us to use voluntary consensus standards (VCS) in our regulatory and 

procurement activities unless to do so would be inconsistent with applicable law or 

otherwise impractical. The VCS are technical standards (e.g., materials specifications, 

test methods, sampling procedures, and business practices) developed or adopted by one 

or more voluntary consensus bodies. The NTTAA directs us to provide Congress, 

through annual reports to OMB, with explanations when we do not use available and 

applicable VCS. 

This final rule does not involve technical standards. Therefore, we did not 

consider the use of any VCS. 

J. Executive Order 12898 - Federal Actions to Address Environmental Justice in 

Minority Populations and Low-Income Populations 

Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes Federal 

executive policy on environmental justice. Its main provision directs Federal agencies, to 

the greatest extent practicable and permitted by law, to make environmental justice part 

of their mission by identifying and addressing, as appropriate, disproportionately high 

and adverse human health or environmental effects of its programs, policies, and 

99
 
activities on minorities and low-income populations in the United States. 

The EPA has determined that this final rule will not have disproportionately high 

and adverse human health or environmental effects on minority or low-income 

populations because it will have the effect of improving air quality. While it does not 

impose any new requirements under the major NSR program, we believe that this rule, in 

expanding the NSR program to address PM2.5, will serve to reduce adverse human health 

and environmental effects for all citizens, including minorities and low-income 

populations. 

K. Congressional Review Act 

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a 

rule may take effect, the agency promulgating the rule must submit a rule report, which 

includes a copy of the rule, to each House of the Congress and to the Comptroller 

General of the United States. The EPA will submit a report containing this rule and other 

required information to the U.S. Senate, the U.S. House of Representatives, and the 

Comptroller General of the United States prior to publication of the rule in the Federal 

Register. A major rule cannot take effect until 60 days after it is published in the Federal 

Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2). The rules 

affected by this action will be effective [INSERT DATE 60 DAYS FROM DATE OF 

PUBLICATION IN THE FEDERAL REGISTER]. 

L. Petitions for Judicial Review 

Under section 307(b)(1) of the Act, petitions for judicial review of this action 

must be filed in the United States Court of Appeals for the District of Columbia Circuit 

100
 
by [INSERT DATE 60 DAYS FROM DATE OF PUBLICATION IN THE 

FEDERAL REGISTER]. Filing a petition for reconsideration by the Administrator of 

this final rule does not affect the finality of this rule for the purposes of judicial review 

nor does it extend the time within which a petition for judicial review may be filed, and 

shall not postpone the effectiveness of such rule or action. This action may not be 

challenged later in proceedings to enforce its requirements. See Act section 307(b)(2). 

M. Determination Under Section 307(d) 

The PSD portions of this rulemaking, which implements part C of title I of the 

Act, are subject to the procedural requirements in section 307(d) of the Act. See section 

307(d)(1)(J). In addition, pursuant to section 307(d)(1)(V) of the Act, the Administrator 

determines that the NA NSR portions of this action should also be subject to the 

provisions of section 307(d) to ensure consistency. All of the procedural requirements of 

section 307(d), e.g., docketing, hearing, and comment periods, have been complied with 

during the course of this rulemaking. 

VII. Statutory Authority 

The statutory authority for this action is provided by sections 101, 110, 165, 169, 

172, 173, 301, and 302 of the Act as amended (42 U.S.C. 7401, 7410, 7475, 7479, 7502, 

7503, 7601, and 7602). This rulemaking is also subject to section 307(d) of the Act (42 

U.S.C. 7407(d)). 

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______________________________________ 

______________________________________ 

Page 102 of 117 - Final Rule for Implementation of the New Source Review (NSR) 

Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5) 

List of Subjects 

40 CFR Part 51 

Environmental protection, Administrative practices and procedures, Air pollution 

control, Intergovernmental relations. 

40 CFR Part 52 

Environmental protection, Administrative practices and procedures, Air pollution 

control, Intergovernmental relations. 

Dated: 

-______________________________________ 

Stephen L. Johnson, 

Administrator. 

102
 
For the reasons stated in the preamble, title 40, chapter I of the Code of Federal 

Regulations is amended as follows. 

PART 51 - [Amended]
 

1. The authority citation for part 51 continues to read as follows: 

Authority: 23 U.S.C. 101; 42 U.S.C. 7401 - 7671q. 

Subpart I - [Amended] 

2. Section 51.165 is amended as follows: 

a. By revising paragraph (a)(1)(x)(A); 

b. By removing the word “or” at the end of paragraph (a)(1)(xxxvii)(B); 

c. By revising paragraph (a)(1)(xxxvii)(C); 

d. By adding paragraph (a)(1)(xxxvii)(D); 

e. By redesignating paragraphs (a)(9)(i) through (iii) as paragraphs (a)(9)(ii) 

through (iv), respectively, and adding new paragraph (a)(9)(i); 

f. By removing from newly redesignated paragraph (a)(9)(iii) the reference to 

“paragraph (a)(9)(i)” and adding in its place “paragraph (a)(9)(ii)”; and 

g. By adding paragraph (a)(11). 

§51.165 Permit requirements. 

(a) * * * 

(1) * * * 

(x)(A) Significant means, in reference to a net emissions increase or the potential 

of a source to emit any of the following pollutants, a rate of emissions that would equal or 

103
 
 

 

exceed any of the following rates: 

Pollutant Emission Rate 

Carbon monoxide: 100 tons per year (tpy) 

Nitrogen oxides: 40 tpy 

Sulfur dioxide: 40 tpy 

Ozone: 40 tpy of volatile organic compounds or nitrogen oxides 

Lead: 0.6 tpy 

PM10: 15 tpy 

PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur dioxide emissions; 40 tpy of 

nitrogen oxide emissions unless demonstrated not to be a PM2.5 precursor under 

paragraph (a)(1)(xxxvii) of this section 

* * * * * 

(xxxvii) * * * 

(C) Any pollutant that is identified under this paragraph (a)(1)(xxxvii)(C) as a 

constituent or precursor of a general pollutant listed under paragraph (a)(1)(xxxvii)(A) or 

(B) of this section, provided that such constituent or precursor pollutant may only be 

regulated under NSR as part of regulation of the general pollutant. Precursors identified 

by the Administrator for purposes of NSR are the following: 

(1) Volatile organic compounds and nitrogen oxides are precursors to ozone in all 

ozone nonattainment areas. 

(2) Sulfur dioxide is a precursor to PM2.5 in all PM2.5 nonattainment areas. 

(3) Nitrogen oxides are presumed to be precursors to PM2.5 in all PM2.5 

104
 
 

nonattainment areas, unless the State demonstrates to the Administrator’s satisfaction or 

EPA demonstrates that emissions of nitrogen oxides from sources in a specific area are 

not a significant contributor to that area’s ambient PM2.5 concentrations. 

(4) Volatile organic compounds and ammonia are presumed not to be precursors 

to PM2.5 in any PM2.5 nonattainment area, unless the State demonstrates to the 

Administrator’s satisfaction or EPA demonstrates that emissions of volatile organic 

compounds or ammonia from sources in a specific area are a significant contributor to 

that area’s ambient PM2.5 concentrations; or 

(D) PM2.5 emissions and PM10 emissions shall include gaseous emissions from a 

source or activity which condense to form particulate matter at ambient temperatures. On 

or after January 1, 2011 (or any earlier date established in the upcoming rulemaking 

codifying test methods), such condensable particulate matter shall be accounted for in 

applicability determinations and in establishing emissions limitations for PM2.5 and PM10 

in nonattainment major NSR permits. Compliance with emissions limitations for PM2.5 

and PM10 issued prior to this date shall not be based on condensable particulate matter 

unless required by the terms and conditions of the permit or the applicable 

implementation plan. Applicability determinations made prior to this date without 

accounting for condensable particulate matter shall not be considered in violation of this 

section unless the applicable implementation plan required condensable particulate matter 

to be included. 

* * * * * 

(9)(i) The plan shall require that in meeting the emissions offset requirements of 

paragraph (a)(3) of this section, the ratio of total actual emissions reductions to the 

105
 
emissions increase shall be at least 1:1 unless an alternative ratio is provided for the 

applicable nonattainment area in paragraphs (a)(9)(ii) through (a)(9)(iv) of this section. 

* * * * * 

(11) The plan shall require that in meeting the emissions offset requirements of 

paragraph (a)(3) of this section, the emissions offsets obtained shall be for the same 

regulated NSR pollutant unless interprecursor offsetting is permitted for a particular 

pollutant as specified in this paragraph. The plan may allow the offset requirements in 

paragraph (a)(3) of this section for direct PM2.5 emissions or emissions of precursors of 

PM2.5 to be satisfied by offsetting reductions in direct PM2.5 emissions or emissions of 

any PM2.5 precursor identified under paragraph (a)(1)(xxxvii)(C) of this section if such 

offsets comply with the interprecursor trading hierarchy and ratio established in the 

approved plan for a particular nonattainment area. 

* * * * * 

3. Section 51.166 is amended as follows: 

a. By revising paragraphs (b)(23)(i) and (b)(49)(i); 

b. By removing the word “or” at the end of paragraph (b)(49)(iii); 

c. By adding and reserving paragraph (b)(49)(v); 

d. By adding paragraph (b)(49)(vi); and 

e. By revising paragraphs (i)(5)(ii) and (i)(5)(iii). 

106
 
 

 

§51.166 Prevention of significant deterioration of air quality. 

* * * * * 

(b) * * * 

(23)(i) Significant means, in reference to a net emissions increase or the potential 

of a source to emit any of the following pollutants, a rate of emissions that would equal or 

exceed any of the following rates: 

Pollutant and Emissions Rate 

Carbon monoxide: 100 tons per year (tpy) 

Nitrogen oxides: 40 tpy 

Sulfur dioxide: 40 tpy 

Particulate matter: 25 tpy of particulate matter emissions. 15 tpy of PM10 emissions. 

PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur dioxide emissions; 40 tpy of 

nitrogen oxide emissions unless demonstrated not to be a PM2.5 precursor under 

paragraph (b)(49) of this section 

Ozone: 40 tpy of volatile organic compounds or nitrogen oxides 

Lead: 0.6 tpy 

Fluorides: 3 tpy 

Sulfuric acid mist: 7 tpy 

Hydrogen sulfide (H2S): 10 tpy 

Total reduced sulfur (including H2S): 10 tpy 

Reduced sulfur compounds (including H2S): 10 tpy 

Municipal waste combustor organics (measured as total tetra-through octa-chlorinated 

107
 
 

dibenzo-p-dioxins and dibenzofurans): 3.2 x 10-6 megagrams per year (3.5 x 10-6 tons 

per year). 

Municipal waste combustor metals (measured as particulate matter): 14 megagrams per 

year (15 tons per year) 

Municipal waste combustor acid gases (measured as sulfur dioxide and hydrogen 

chloride): 36 megagrams per year (40 tons per year) 

Municipal solid waste landfill emissions (measured as nonmethane organic compounds): 

45 megagrams per year (50 tons per year) 

* * * * * 

(49) * * * 

(i) Any pollutant for which a national ambient air quality standard has been 

promulgated and any pollutant identified under this paragraph (b)(49)(i) as a constituent 

or precursor to such pollutant. Precursors identified by the Administrator for purposes of 

NSR are the following: 

(a) Volatile organic compounds and nitrogen oxides are precursors to ozone in all 

attainment and unclassifiable areas. 

(b) Sulfur dioxide is a precursor to PM2.5 in all attainment and unclassifiable 

areas. 

(c) Nitrogen oxides are presumed to be precursors to PM2.5 in all attainment and 

unclassifiable areas, unless the State demonstrates to the Administrator’s satisfaction or 

EPA demonstrates that emissions of nitrogen oxides from sources in a specific area are 

not a significant contributor to that area’s ambient PM2.5 concentrations. 

(d) Volatile organic compounds are presumed not to be precursors to PM2.5 in 

108
 
any attainment or unclassifiable area, unless the State demonstrates to the Administrator’s 

satisfaction or EPA demonstrates that emissions of volatile organic compounds from 

sources in a specific area are a significant contributor to that area’s ambient PM2.5 

concentrations. 

* * * * * 

(v) [Reserved.] 

(vi) Particulate matter (PM) emissions, PM2.5 emissions, and PM10 emissions 

shall include gaseous emissions from a source or activity which condense to form 

particulate matter at ambient temperatures. On or after January 1, 2011 (or any earlier 

date established in the upcoming rulemaking codifying test methods), such condensable 

particulate matter shall be accounted for in applicability determinations and in 

establishing emissions limitations for PM, PM2.5 and PM10 in PSD permits. Compliance 

with emissions limitations for PM, PM2.5 and PM10 issued prior to this date shall not be 

based on condensable particular matter unless required by the terms and conditions of the 

permit or the applicable implementation plan. Applicability determinations made prior to 

this date without accounting for condensable particular matter shall not be considered in 

violation of this section unless the applicable implementation plan required condensable 

particular matter to be included. 

* * * * * 

(i) * * * 

(5) * * * 

(ii) The concentrations of the pollutant in the area that the source or modification 

would affect are less than the concentrations listed in paragraph (i)(5)(i) of this section; or 

109
 
(iii) The pollutant is not listed in paragraph (i)(5)(i) of this section. 

* * * * * 

4. Appendix S to Part 51 is amended as follows: 

a. By revising paragraphs II.A.10(i) and II.A.31; 

b. By revising paragraph IV.A, Condition 3; 

c. By redesignating paragraphs IV.G.1 through IV.G.3 as paragraphs IV.G.2 

through IV.G.4, respectively, and adding new paragraph IV.G.1; 

d. By removing from newly redesignated paragraph IV.G.3 the reference to 

“paragraph IV.G.1” and adding in its place “paragraph IV.G.2”; and 

e. By adding paragraph IV.G.5. 

Appendix S to Part 51—Emission Offset Interpretative Ruling 

* * * * * 

II. * * * 

A. * * * 

10. (i) Significant means, in reference to a net emissions increase or the potential 

of a source to emit any of the following pollutants, a rate of emissions that would equal or 

exceed any of the following rates: 

Pollutant and Emissions Rate 

Carbon monoxide: 100 tons per year (tpy) 

Nitrogen oxides: 40 tpy 

Sulfur dioxide: 40 tpy 

Ozone: 40 tpy of volatile organic compounds or nitrogen oxides 

Lead: 0.6 tpy 

110
 
Particulate matter: 25 tpy of particulate matter emissions 

PM10: 15 tpy 

PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur dioxide emissions 

* * * * * 

31. Regulated NSR pollutant, for purposes of this Ruling, means the following: 

(i) Nitrogen oxides or any volatile organic compounds; 

(ii) Any pollutant for which a national ambient air quality standard has been 

promulgated; 

(iii) Any pollutant that is identified under this paragraph II.A.31(iii) as a 

constituent or precursor of a general pollutant listed under paragraph II.A.31(i) or (ii) of 

this Ruling, provided that such constituent or precursor pollutant may only be regulated 

under NSR as part of regulation of the general pollutant. Precursors identified by the 

Administrator for purposes of NSR are the following: 

(a) Volatile organic compounds and nitrogen oxides are precursors to ozone in all 

ozone nonattainment areas. 

(b) Sulfur dioxide is a precursor to PM2.5 in all PM2.5 nonattainment areas; or 

(iv) Particulate matter (PM) emissions, PM2.5 emissions and PM10 emissions shall 

include gaseous emissions from a source or activity which condense to form particulate 

matter at ambient temperatures. On or after January 1, 2011 (or any earlier date 

established in the upcoming rulemaking codifying test methods), such condensable 

particulate matter shall be accounted for in applicability determinations and in 

establishing emissions limitations for PM, PM2.5 and PM10 in permits issued under this 

ruling. Compliance with emissions limitations for PM, PM2.5 and PM10 issued prior to 

111
 
this date shall not be based on condensable particulate matter unless required by the terms 

and conditions of the permit or the applicable implementation plan. Applicability 

determinations made prior to this date without accounting for condensable particulate 

matter shall not be considered in violation of this section unless the applicable 

implementation plan required condensable particulate matter to be included. 

* * * * * 

IV. * * * 

A. * * * 

 Condition 3. Emission reductions (offsets) from existing sources5

 in the area of 

the proposed source (whether or not under the same ownership) are required such that 

there will be reasonable progress toward attainment of the applicable NAAQS.6 Except 

as provided in paragraph IV.G.5 of this Ruling (addressing PM2.5 and its precursors), only 

intrapollutant emission offsets will be acceptable (e.g., hydrocarbon increases may not be 

offset against SO2 reductions). 

5

 Subject to the provisions of paragraph IV.C of this Ruling. 

6

 The discussion in this paragraph is a proposal, but represents EPA’s interim 

policy until final rulemaking is completed. 

* * * * * 

G. Offset ratios. 

1. In meeting the emissions offset requirements of paragraph IV.A, Condition 3 

of this Ruling, the ratio of total actual emissions reductions to the emissions increase 

shall be at least 1:1 unless an alternative ratio is provided for the applicable 

nonattainment area in paragraphs IV.G.2 through IV.G.4. 

112
 
* * * * * 

5. Interpollutant offsetting. In meeting the emissions offset requirements of 

paragraph IV.A, Condition 3 of this Ruling, the emissions offsets obtained shall be for 

the same regulated NSR pollutant unless interpollutant offsetting is permitted for a 

particular pollutant as specified in this paragraph IV.G.5. The offset requirements of 

paragraph IV.A, Condition 3 of this Ruling for direct PM2.5 emissions or emissions of 

precursors of PM2.5 may be satisfied by offsetting reductions of direct PM2.5 emissions or 

emissions of any PM2.5 precursor identified under paragraph II.A.31 (iii) of this Ruling if 

such offsets comply with an interprecursor trading hierarchy and ratio approved by the 

Administrator. 

* * * * * 

PART 52 – [Amended] 

5. The authority citation for part 52 continues to read as follows: 

Authority: 42 U.S.C. 7401 et seq. 

Subpart A - [Amended] 

6. Section 52.21 is amended as follows: 

a. By revising paragraphs (b)(23)(i) and (b)(50)(i); 

b. By removing the word “or” at the end of paragraph (b)(50)(iii); 

c. By adding and reserving paragraph (b)(50)(v); 

d. By adding paragraphs (b)(50)(vi) and (i)(1)(xi); 

e. By revising paragraph (i)(5)(ii); and 

f. By adding paragraph (i)(5)(iii). 

§52.21 Prevention of significant deterioration of air quality. 

113
 
* * * * * 

(b) * * * 

(23)(i) Significant means, in reference to a net emissions increase or the potential 

of a source to emit any of the following pollutants, a rate of emissions that would equal or 

exceed any of the following rates: 

Pollutant and Emissions Rate 

Carbon monoxide: 100 tons per year (tpy) 

Nitrogen oxides: 40 tpy 

Sulfur dioxide: 40 tpy 

Particulate matter: 25 tpy of particulate matter emissions 

PM10: 15 tpy 

PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur dioxide emissions; 40 tpy of 

nitrogen oxide emissions unless demonstrated not to be a PM2.5 precursor under 

paragraph (b)(50) of this section 

Ozone: 40 tpy of volatile organic compounds or nitrogen oxides 

Lead: 0.6 tpy 

Fluorides: 3 tpy 

Sulfuric acid mist: 7 tpy 

Hydrogen sulfide (H2S): 10 tpy 

Total reduced sulfur (including H2S): 10 tpy 

Reduced sulfur compounds (including H2S): 10 tpy 

Municipal waste combustor organics (measured as total tetra-through octa-chlorinated 

dibenzo-p-dioxins and dibenzofurans): 3.2 x 10-6 megagrams per year (3.5 x 10-6 tons 

114
 
per year) 

Municipal waste combustor metals (measured as particulate matter): 14 megagrams per 

year (15 tons per year) 

Municipal waste combustor acid gases (measured as sulfur dioxide and hydrogen 

chloride): 36 megagrams per year (40 tons per year) 

Municipal solid waste landfills emissions (measured as nonmethane organic compounds): 

45 megagrams per year (50 tons per year) 

* * * * * 

(50) * * * 

(i) Any pollutant for which a national ambient air quality standard has been 

promulgated and any pollutant identified under this paragraph (b)(50)(i) as a constituent 

or precursor for such pollutant. Precursors identified by the Administrator for purposes 

of NSR are the following: 

(a) Volatile organic compounds and nitrogen oxides are precursors to ozone in all 

attainment and unclassifiable areas. 

(b) Sulfur dioxide is a precursor to PM2.5 in all attainment and unclassifiable 

areas. 

(c) Nitrogen oxides are presumed to be precursors to PM2.5 in all attainment and 

unclassifiable areas, unless the State demonstrates to the Administrator’s satisfaction or 

EPA demonstrates that emissions of nitrogen oxides from sources in a specific area are 

not a significant contributor to that area’s ambient PM2.5 concentrations. 

(d) Volatile organic compounds are presumed not to be precursors to 

PM2.5 in any attainment or unclassifiable area, unless the State demonstrates to the 

115
 
Administrator’s satisfaction or EPA demonstrates that emissions of volatile organic 

compounds from sources in a specific area are a significant contributor to that area’s 

ambient PM2.5 concentrations. 

* * * * * 

(v) [Reserved.] 

(vi) Particulate matter (PM) emissions, PM2.5 emissions and PM10 emissions shall 

include gaseous emissions from a source or activity which condense to form particulate 

matter at ambient temperatures. On or after January 1, 2011 (or any earlier date 

established in the upcoming rulemaking codifying test methods), such condensable 

particulate matter shall be accounted for in applicability determinations and in 

establishing emissions limitations for PM, PM2.5 and PM10 in PSD permits. Compliance 

with emissions limitations for PM, PM2.5 and PM10 issued prior to this date shall not be 

based on condensable particular matter unless required by the terms and conditions of the 

permit or the applicable implementation plan. Applicability determinations made prior to 

this date without accounting for condensable particular matter shall not be considered in 

violation of this section unless the applicable implementation plan required condensable 

particular matter to be included. 

* * * * * 

(i) * * * 

(1) * * * 

(xi) The source or modification was subject to 40 CFR 52.21, with respect to 

PM2.5, as in effect before [INSERT DATE 60 DAYS FROM DATE OF 

116
 
PUBLICATION IN FEDERAL REGISTER], and the owner or operator submitted an 

application for a permit under this section before that date consistent with EPA 

recommendations to use PM10 as a surrogate for PM2.5, and the Administrator 

subsequently determines that the application as submitted was complete with respect to 

the PM2.5 requirements then in effect, as interpreted in the EPA memorandum entitled 

“Interim Implementation of New Source Review Requirements for PM2.5” (October 23, 

1997). Instead, the requirements of paragraphs (j) through (r) of this section, as 

interpreted in the aforementioned memorandum, that were in effect before [INSERT 

DATE 60 DAYS FROM DATE OF PUBLICATION IN FEDERAL REGISTER] 

shall apply to such source or modification. 

* * * * * 

(5) * * * 

(ii) The concentrations of the pollutant in the area that the source or modification 

would affect are less than the concentrations listed in paragraph (i)(5)(i) of this section; or 

(iii) The pollutant is not listed in paragraph (i)(5)(i) of this section. 

* * * * * 

117