U.S. Clean Air Act (CAA) New Source Review (NSR) Reform: The 2026 "Construction" Definition Amendment NPRM and Modification Practices
Overview
The Clean Air Act's New Source Review (NSR) program requires the advance installation of state-of-the-art pollution control equipment (BACT/LAER) for new construction or major modifications at factories and power plants. In July 2026, EPA under the Trump administration published a Notice of Proposed Rulemaking (NPRM) to revise the definitions of "construction" and "major modification" under the NSR regulations. The proposal raises the threshold at which equipment upgrades or efficiency improvement work at existing plants are determined to constitute a "modification" requiring advance NSR permitting, introducing industry-favorable determination criteria (including revised emissions increase calculation methods) that allow companies to begin equipment maintenance and modernization work without going through lengthy prior permitting procedures.
Enforcement Timeline
2020: EPA under the first Trump administration publishes an interpretive memorandum on NSR regarding "begin construction"
2021–2024: Strict NSR enforcement resumes under the Biden administration
July 2026: EPA under the Trump administration publishes the NPRM revising the "construction/major modification" definition under NSR
Late 2026 (planned): Following the close of the public comment period, coordination toward a final rule proceeds
Business Impact
For operators of existing U.S. plants (chemical, steel, automotive, electric power, etc.), the risk of NSR advance permitting procedural delays and mandatory addition of costly pollution control equipment is significantly reduced when carrying out facility upgrades, energy efficiency retrofits, or production line modernization. This accelerates modernization investment at existing facilities. However, because nonattainment areas and certain state environmental agencies (such as California) continue to require their own strict advance review in some cases, continued verification of consistency with state law remains important.