What’s New in New Source Review? EPA’s Title V Rule Adds to a Growing List of NSR Developments

Key Takeaways

• What Happened: On September 25, 2026, the U.S. Environmental Protection Agency (EPA) published a final rule limiting Title V review of NSR preconstruction permitting decisions and clarifying that the General Duty Clause of the Clean Air Act (CAA) Section 112(r)(1) is not an “applicable requirement” under Title V.
• Who’s Impacted: Current and future owners and operators of facilities subject to Title V, New Source Review, and/or the Risk Management Program.
• What to Do: Affected parties should evaluate how the final rule affects their Clean Air Act permitting strategies before it takes effect on October 26, 2026. More broadly, parties should also take this opportunity to evaluate EPA’s ongoing NSR reforms for implications for compliance strategy and project planning.

EPA Codifies Limits on Title V Review of NSR Decisions and General Duty Clause Requirements

Generally speaking, the CAA’s Title V Operating Permit program is a vehicle to compile and assure compliance with “applicable requirements” that other CAA programs impose on the source; it is not an opportunity to substantively reconsider the requirements themselves. That distinction is important because Title V has unique federal oversight tools that can disrupt permitting, including mechanisms for EPA to object to the issuance of a facility’s state-issued Title V operating permit and cause the permit to be modified, revoked, or terminated. Title V also establishes a related process for members of the public to petition EPA for such an objection, with exceptionally tight deadlines that can quickly force an EPA response.

EPA’s final rule codifies an approach the agency had developed in a pair of Title V orders, Hunter and Big River Steel, both issued in October 2017. Under that approach, when an NSR permit is issued subject to requirements for public notice, opportunity for public comment, and opportunity for judicial review, the resulting terms and conditions are the NSR-related “applicable requirements” under Title V and cannot be revisited during the Title V permitting process. That principle extends to NSR permit content, such as Best Available Control Technology (BACT) determinations, and whether major or minor NSR applies. Limited Title V review remains available where NSR requirements have not been conclusively established, including where no NSR permit was issued, or the requisite opportunities for public participation and judicial review were not available.

Separately, but also notably, the final rule also clarifies that the General Duty Clause of CAA Section 112(r)(1) is not an “applicable requirement” according to EPA’s statutory interpretation of Title V. However, accident-prevention requirements under CAA Section 112(r)(7) remain subject to Title V’s definition of “applicable requirements.”

Final Rule Comes Amid Broader NSR Changes

The Title V final rule on “applicable requirements” is the latest in a series of recent developments related to NSR. The changes and proposed changes are particularly relevant to companies planning to develop data centers, onsite generation, or to undertake other major capital projects, where air permitting requirements can often affect construction schedules. EPA guidance and rulemakings, federal court decisions, pending legislation, and enforcement litigation are addressing when NSR applies, how sources calculate emissions, when construction may begin, and how NSR disputes should be resolved:

• Begin Actual Construction. EPA proposed in May 2026 to revise the critical definition of “begin actual construction” so that certain non-emitting activities—including construction of qualifying utility infrastructure, building shells, and certain foundations and concrete pads—could occur before issuance of an NSR permit. For data center and manufacturing projects, this proposal could provide greater flexibility to front-load construction on certain non-emitting aspects of a project while awaiting permit issuance.
• Project Emissions Accounting. On July 28, 2026, the D.C. Circuit upheld EPA’s 2020 Project Emissions Accounting Rule against facial challenges, preserving a framework that allows sources to account for project-related decreases when determining whether a project results in a “significant emissions increase” at Step 1 of the NSR applicability analysis. Envt’l Def. Fund v. EPA, 183 F.4th 867 (D.C. Cir. 2026). However, while rejecting facial challenges, the court left open potential as-applied challenges where emissions decreases are not “substantially contemporaneous” with the increases they offset.
• Actual-to-Projected-Actual Guidance. On September 15, 2025, EPA reinstated its 2017 actual-to-projected-actual policy, under which EPA will generally not “second-guess” a source's projected-actual-emissions analysis when determining whether a physical or operational change at the source will trigger NSR.
• Eliminating the NSR Reactivation Guidance. On September 18, 2025, EPA ended its longstanding NSR Reactivation Policy, under which certain idled major sources deemed permanently shut down could be treated as “new sources” upon restart and must therefore obtain an NSR permit. Instead, EPA’s policy is that NSR permits are not needed when idled sources restart operations, unless an associated change qualifies as a “major modification.”
• New NNSR Offsets Guidance. On July 1, 2026, EPA issued new guidance on Nonattainment NSR Emission Reduction Credits (ERCs), outlining when a source can secure emissions offsets for projects in nonattainment areas. The guidance would allow a permitting authority to issue an NNSR permit before the permittee secures specific emission reduction credits if the permit includes an enforceable commitment to obtain the required reductions and prohibits operation until the credits have been identified, approved, and secured.
• Minor NSR Public Participation. EPA’s July 2026 proposed minor NSR public-participation rule would give greater discretion to state and local agencies to determine public participation requirements for minor NSR authorizations under EPA-approved Title I programs. Unlike the highly prescriptive major NSR programs, states have historically had significant discretion in the design of minor NSR programs.
• Temporary Turbines and Mobile-Source Treatment. EPA’s January 2026 amendments to the new source performance standards (NSPS) for stationary combustion turbines included a conditional exclusion for portable turbines, which CAA Title II regulates as mobile, nonroad sources. EPA has signaled that it may propose an additional rule to treat certain “temporary” gas turbines as mobile/nonroad equipment as well.

NSR developments are not limited to EPA. In Congress, several pieces of proposed legislation would alter aspects of NSR permitting. For example, the House Energy and Commerce Committee has reported out:

• the New Source Review Permitting Improvement Act (H.R. 161), which would alter the circumstances when a “modification” triggers NSR requirements;
• the Clean Air and Building Infrastructure Improvement Act (H.R. 4214), which would relax the timing and effects that EPA’s new or revised National Ambient Air Quality Standards (NAAQS) have on NSR permitting; and
• the Air Permitting Improvements to Protect National Security Act (H.R. 6373), which would relax nonattainment NSR requirements for certain advanced manufacturing and critical mineral facilities, including by authorizing certain presidential waivers.

In the courts, NSR enforcement litigation remains consequential. Earlier this year in United States v. EES Coke Battery, LLC, the Eastern District of Michigan imposed a $100 million civil penalty and injunctive relief for NSR violations, and held not just the plant owner liable, but also several other affiliated entities liable as “operators” due to the high degree of control they exhibited over the facility. United States v. EES Coke Battery, LLC, 820 F. Supp. 3d 600 (E.D. Mich. 2026).

What Companies Should Watch Next

Given the stakes for project timing and the highly fluid NSR landscape, companies must consider how these recent and ongoing developments affect applicability analyses, construction sequencing, offset acquisition, compliance documentation, and overall air permitting strategy. And these relatively recent developments capture only part of the broader range of NSR issues that may arise, including source-determination questions such as common control and adjacency, project aggregation and “circumvention,” and the scope of what constitutes a major modification.

In the case of EPA’s recent rule clarifying “applicable requirements” under Title V, a principal benefit is that it formally limits opportunities to use the Title V process as a “second bite at the apple” for NSR determinations—some of which, as in Hunter, may be decades old.

At the same time, the rule does not eliminate other avenues to challenge or enforce NSR requirements. By expressly limiting the extent to which underlying NSR determinations can later be revisited through Title V, the rule may instead place greater importance on strategic decisions made during the initial preconstruction permitting process, when public participation, agency review, and potential litigation can have immediate consequences for project schedules. Companies planning new facilities or modifications to existing ones should therefore consider not only whether and how NSR applies, but also how best to develop a defensible permitting record at the outset.

Beveridge & Diamond’s Air practice group helps private and municipal clients navigate all aspects of Clean Air Act compliance, including NSR applicability, preconstruction permitting, Title V permitting, rulemaking, enforcement, and litigation. We also advise project developers on air permitting strategies for new facilities and major capital projects. For more information on this development, please contact the authors.