December 16, 2025

New Source Review Reactivation Policy Rescinded

Since the beginning of the new source review (NSR) program in the late 1970s, EPA has interpreted that resuming operation of an idle facility previously determined to be permanently shut down constitutes construction of a new stationary source and thus requires an NSR permit. This position became known as the “reactivation policy.” In 1999, this position was articulated further when the agency stated:

“[R]eactivation of facilities that have been in an extended condition of inoperation may trigger PSD [prevention of significant deterioration] requirements as “construction” of either a new major stationary source or a major modification of an existing stationary source. Where facilities are reactivated after having been permanently shut down, operation of the facility will be treated as operation of a new source. Alternatively, shutdown and subsequent reactivation of a long-dormant facility may trigger PSD review by qualifying as a major modification.” [Monroe Electric Generating Plant Petition No. 6-99-2]

Consequently, a shutdown lasting more than two years was presumed to be permanent; however, a facility owner could rebut this presumption by addressing issues such as the reason for the shutdown, the duration of the facility’s downtime, permit status, and ongoing maintenance.

Citing CAA Sections 165 and 169(2)(C) [42 U.S.C. Sections 7475 and 7479(2)(C)], the U.S. Court of Appeals for the Third Circuit vacated EPA’s determination that the owners of a St. Croix, U.S. Virgin Islands petroleum refinery must obtain a PSD permit under the CAA before restarting the refinery, stating:

“The Clean Air Act unambiguously limits the PSD program’s application to newly constructed or modified facilities. The Refinery is not new and has not undergone a “modification” as the Act defines that term. The EPA therefore exceeded its authority by requiring Port Hamilton to obtain a PSD permit for the Refinery.”

“The CAA limits the PSD program’s reach to only two circumstances: construction and modification.... The EPA’s Reactivation Policy extends the PSD program beyond those limited circumstances.” [Port Hamilton Refining and Transportation, LLLP vs. EPA; Docket No. 23-1094; July 25, 2023]

Noting the Third Circuit’s reasoning, EPA will no longer apply the reactivation policy to classify resuming operations at an idled stationary source as construction of a new source, effective September 18, 2025. Furthermore, restarting an idled emissions unit does not, by itself, constitute a “change in the method of operation” that would potentially trigger NSR permitting. Restarting an idled facility that involves a physical change (or a change in the method of operation at the source, other than simply restarting) will still require an NSR permit if it qualifies as a major modification. EPA encourages state, local, and tribal air agencies to follow this updated policy; however, these authorities are not precluded from continuing to implement their own requirements regarding preconstruction permitting for reactivated idle sources, provided they are supported by applicable jurisdictional laws.

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This document addresses issues of a general nature related to the federal environmental regulations. Persons evaluating specific circumstances dealing with the environmental regulations should review state and local laws and regulations, which may be more stringent than federal requirements. In addition, the assistance of a qualified professional should be enlisted to address any site-specific circumstances.