EPA "Begin Actual Construction" Proposal

On May 13, 2026, EPA released its proposed rule entitled “Begin Actual Construction in the New Source Review (NSR) Preconstruction Permitting Program,” 91 Fed. Reg. 26958.  In the proposal, EPA is following up on its commitment, stated in the letter to the Maricopa County Air Quality Department, that it would release a proposed rule to standardize “begin actual construction” across the PSD, NNSR and tribal minor NSR programs.  In a nutshell, the proposed rule would eliminate application of “begin actual construction” to structures that “accommodate” an emissions unit, instead focusing only on emitting activities. The proposed rule also lays out various activities that EPA believes are not “beginning actual construction” or “pollutant emitting activities” within the meaning of the NSR programs.  EPA also states that it believes its approach is appropriate for state and local minor NSR programs as well, although it recognizes that state, local and tribal authorities may adopt “more stringent” program requirements as a matter of local law.

ANALYSIS

EPA opens its proposal with an acknowledgement that its current definition of “begin actual construction” forbids construction of parts of an emissions unit of a permanent nature prior to obtaining a permit and that its interpretation of the regulatory definition has extended this prohibition to structures that “accommodate” an emissions unit. EPA states that it intends to revise the definition to “allow construction of components that do not emit air pollutants, such as utility service infrastructure for a site, concrete pads, and some types of buildings and building components, before obtaining an NSR air permit.”  EPA states that this will make the NSR program more flexible while preserving air quality.

In support, EPA notes that in an October 1978 memorandum issued shortly after the PSD regulations were promulgated (without a definition of “begin actual construction”) EPA had stated that if both PSD and non-PSD equipment were being included in a structure, the non-PSD elements and structure could be built if the structure was necessary for the non-PSD elements and not altered to meet the needs of the PSD element. EPA also clarified that if the PSD element was “integral” to the overall project, which it defined as “the project would not be built but for” the PSD element, then the overall project must weight. The October 1978 memo was followed by a December 1978 memo, which allowed “planning, ordering of equipment and materials, site-clearing, grading, and on-site storage of equipment and materials” and disallowed “permanent on-site activities” aimed at completing a PSD source, specifically calling out “installation of building supports and foundations, paving, laying of underground pipework, construction of permanent storage structures, and activities of a similar nature.”

In 1980, as part of the PSD rules, EPA added a regulatory definition of “begin actual construction” that mostly paralleled the December 1978 memorandum except it substituted the newly defined term “emission unit” for “source.  In a March 1986 memorandum, EPA interpreted the new regulatory definition by stating that “ the term ‘emission unit’ should be construed to ‘include any installations necessary to accommodate that unit.’’’  This was followed in 1995 by another memorandum that prohibited the addition of “costly, substantial and/or permanent investment” prior to obtaining the PSD permit.

Despite some criticism of the interpretation of “begin actual construction” received in 1996 as part of the start of NSR Reform, EPA ultimately did not promulgate any revisions to the definition in that regulatory action and the interpretation remains essentially the same until EPA issued a draft guidance memorandum in March 2020 that questioned the expansion beyond “emissions units” to installations “accommodating” an emissions unit.  EPA ultimately did not finalize that guidance and instead chose to proceed with the proposed rule.

In the proposed rule, EPA proposes to revise the definition of “begin actual construction” to read as follows:

Begin actual construction means, in general, initiation of physical on-site construction of pollutant-emitting activities on a stationary source. This does not include the following: (1) Engineering and design planning; (2) geotechnical investigation (surface and subsurface explorations); (3) clearing vegetation, grading, surveying, soil compacting and stabilization (including associated pile driving), and excavating land (including blasting or other removal of hardrock); (4) ordering of equipment and materials; (5) storing of equipment or setting up temporary trailers to house construction management or staff and contractor personnel; (6) paving surfaces. This list is not intended to be exhaustive. With respect to a change in method of operations, this term refers to those on-site activities other than preparatory activities which mark the initiation of the change.

EPA states that it intends to proceed by exclusion, so it does two things: first, it limits construction to “construction of pollutant-emitting activities” on a stationary source; and second, it carves out a list of common, non-emission unit specific activities that it would specifically allow as not “beginning” actual construction.  These are listed above. 

The proposal would allow the following activities by express exemption:

• More extensive ground work, including excavation, blasting, removal of rock (EPA disapproves its earlier focus on “costly and permanent” work as prohibited, finding no “basis in the statute” for that outcome).

• Pile driving and stabilization activities.

• Paving roads.

The second major change is the proposed definition of “pollutant-emitting activities” and the limitation of the reach of the definition of “begin actual construction” to such activities.  The new definition reads as follows:

Pollutant-emitting activities, as used in 40 CFR 52.21(b)(6)(i) and (b)(11), include any equipment or component in a process or operation that emits or has the potential to emit a regulated NSR pollutant. Pollutant-emitting activities do not include the following: (1) office buildings; (2) retail stores; (3) buildings or structures designed for storage if the product or material to be stored therein is not capable of producing airborne vapors or particles; (4) concrete pads and building foundations, walls, and roofs that are not closed in on the interior side and do not have design elements (e.g., piping, ductwork, wiring, anchor bolts) specifically and uniquely configured to serve or support any equipment or component in a process or operation that emits or has the potential to emit a regulated NSR pollutant; (5) equipment or components whose sole purpose is heating ventilation and air conditioning for human workspaces or spaces within a building used to store supplies related to the habitation of the building; (6) wiring, piping, and associated support structures that supply utility services (including electrical, water, wastewater, or telecommunications) to a property site or a building on a site; (7) sealed junctions or tie-ins within one process that may serve equipment or components in another process constructed at a later time. This list is not intended to be exhaustive. For purposes of this definition, classification as pollutant-emitting is based on emissions from a process or operation after construction, not emissions of pollutants during the construction process.

The definition restricts “pollutant-emitting activities” to only “equipment or components in a process or operation that emits or has the potential to emit a regulated NSR pollutant.”  In effect, the definition reads out all non-emitting components from the requirement to obtain a permit.  The definition then specifically excludes certain activities from pollutant-emitting activities:

• Buildings or structures designed for storage if the product or material to be stored therein is not capable of producing airborne vapors or particulate.

• Concrete pads, building walls, foundations and roofs not specific to emissions units, which should allow exterior building construction.

• Utility connections to a site.

• The allowance for “tie ins” to existing equipment, so long as they are flanged off to prevent use. 

After presenting the proposed rationale, the EPA then presents its legal authority for the proposed definition and why, after the demise of Chevron and the requirement in Loper Bright that it must use the “best” interpretation of the statutory terms, its proposal is the “best” interpretation of the relevant Clean Air Act statutory provisions.  EPA addresses this by positing that the prohibition on construction without a permit requires answering two questions: “what” is prohibited and “when” the prohibition applies. 

On the “what” question, EPA notes that the statute regulations “major stationary sources” which are generally defined as sources that emit air pollutants above specified thresholds.  EPA then argues that what the Clean Air Act prohibits is construction of emitting units or activities and not non-emitting units or activities because extension to non-emitting activities intrudes into traditional areas of state control and is not necessary to protect the national ambient air quality standards, which is one of the purposes of the NSR programs.

Turning to “when,” the EPA acknowledges that the Clean Air Act provides fewer textual clues.  Ultimately, after reviewing the various terms of the Act, regulations, legislative history and contemporaneous regulatory interpretations, EPA states that “EPA views the best reading of the CAA to be that an NSR permit is required ‘‘when’’ physical construction on a site begins on equipment or components that have characteristics that identify them as something that will emit air pollution, as distinguished from equipment or components that will not.”  EPA rejected its prior consideration of “equity” arguments of stranded investment and the element of “cost” as lacking any statutory basis.

EPA requests comment on all aspects of the proposal and listed 11 specific questions on which it is seeking comment.  The comment deadline is June 29, 2026.  EPA states that it would prefer for comments to be submitted through regulations.gov.

COMMENTARY

There are two areas of the proposed rule that cause some concern.  One goes to the justification of the rule and the other goes to an omitted aspect of the definitions of “begin actual construction” and “pollutant-emitting activities.”  On justification, the EPA does a good job of focusing on how the Clean Air Act seeks to regulate pollutants but EPA doesn’t firmly wrestle with Section 165’s use of “source” and its own part 52 definition of “source.”  On the other hand, EPA may believe it addressed this by highlighting that “source” is limited to “pollutant emitting activities.” 

Another concern with the proposed definition is its silence on the treatment of roads.  The definition allows them to be paved—allowed by the exclusion from the definition of “begin actual construction”--but the definition does not clearly state that they can be built unless it assumes that they are simply “grading and clearing.”  Roads are pretty clearly an emissions unit (part of a source that has the potential to emit) and the two proposed definitions together could be read to imply that paved roads are okay but unpaved roads are not.  Leaving this ambiguous is unfortunate.

EPA is to be commended for its efforts to address this issue by rulemaking and the solicitation of public comment. The proposed definitional approach has much to recommend it.  The greater focus on emissions unit and emitting activities is welcome as it places the emphasis on what the Clean Air Act intends to regulate.