A proposed new US EPA rule would allow companies to begin building non-emitting components or structures for manufacturing, essential power generation and data centers before obtaining a major new source review permit.
Both EPA and industry representatives say the rule, if finalized, will bring needed clarity and flexibility to the NSR permitting process, spurring economic development.
The proposal, announced May 11, would revise the federal regulatory definition of “commencing actual construction” and add a new definition of “activities that emit pollutants.” The rule would dictate how permitting authorities distinguish between stationary sources and nonemitting components or structures, the EPA said.
The proposed rule is also intended to support the development of artificial intelligence infrastructure and power generation. That will help speed construction of the data center, a priority outlined in a July 23 executive order, the EPA said.
“For years, the EPA’s definition of ‘Begin Real Construction’ has imposed constraints on economic development and American ingenuity by holding back parts of construction projects that have no impact on human health or the environment,” the agency said. “Reducing unnecessary red tape will enable the reorientation of manufacturing, while ensuring the highest degree of protection for human health and the environment.”
The Clean Air Act’s NSR program requires certain facilities to obtain permits before beginning construction of new sources of pollution or modifying existing ones. According to the agency and the National Association of Manufacturers, there has always been confusion about what types of construction are allowed before a permit is obtained, which has unnecessarily hindered development.
“EPA’s ‘Start Real Construction’ proposal is a win for manufacturers and the communities that depend on the jobs and investments our members create,” NAM Vice President of Domestic Policy Chris Phalen said in an emailed statement. “Manufacturers … will now be able to move forward on critical projects as they continue through the air permit process.”
An “obvious” example of a project that would not require a new source review permit under the proposed rule would be a building that does not emit pollutants, Greg Johnson, an environmental attorney at Liskow & Lewis, said in an email.
“The rules already allow certain site preparation activities, such as site cleanup, to begin before a permit is issued, but this change would expand the scope of work that would be permitted and reduce the types of activities that are prohibited without the issuance of a permit,” he said. “In addition, the incorporation of these concepts into the regulations will give them permanence and make it difficult for a future administration to invest.”
Johnson added that the EPA produced a draft guidance in 2020 that “implemented these same concepts.” He reaffirmed that guidance in a September 2025 letter to air quality officials in Maricopa County, Arizona, regarding an initial phase of construction proposed by Taiwan Semiconductor Manufacturing Co. for a semiconductor facility.
“Prior to this time, the EPA had taken a much more restrictive view of what activities could be conducted prior to the issuance of a permit,” he said. “Since 1986, even the construction of structures such as foundations and retaining walls have been effectively prohibited unless and until an NSR permit is issued. This rule would formalize these concepts and make them more broadly applicable, rather than subject to case-by-case decisions based on policy.”
Greater certainty in Clean Air Act permits is important to manufacturers because “manufacturing projects often involve construction schedules with long lead times, which can make it difficult for facilities to wait until they have an air permit before starting any type of work,” said Nikki Waxman, an attorney at Beveridge & Diamond who focuses on emissions compliance and related areas.
“Under EPA’s proposal, companies would be able to proceed (at their own risk) with non-emitting work, such as certain site preparation, utility infrastructure, concrete pads, foundations or building roofs that are not specifically configured for emission equipment, before the NSR permit is issued,” he said.
However, he pointed out that the work “cannot cross the construction line of activities that emit pollutants”.
“The rule would not allow a company to operate without a permit and would not change the substantive NSR requirements for a [best available control technology], [lowest achievable emissions rate]or emission limitations,” Waxman said. “Manufacturers should still evaluate whether the specific construction activity is general-purpose, non-emitting infrastructure, or whether it is configured exclusively to serve emitting process equipment.”
Comments on the proposed rule are due by June 29.
America’s “broken permitting process” costs American manufacturers $7.9 billion annually, according to a report by NAM and the Foundation for American Innovation. The report cited Clean Air Act permits, which it said are required for 72.6 percent of modifications or additions, as the costliest approval process of the lot.
For these reasons, Trump administration officials called for environmental permitting reform at the SelectUSA Investment Summit this month.
In addition, industry and trade groups said at a Senate Environment and Public Works Committee hearing in January that Congress urgently needs to enact permitting reforms for faster approval of major infrastructure projects.
