A new U.S. EPA proposed rule would allow companies to start building non-emitting components or structures for manufacturing, essential power generation and data centers before obtaining a major New Source Review permit.
Both the 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 “begin actual construction” and add a new definition of “pollutant-emitting activities.” The rule would dictate how permitting authorities distinguish between stationary sources and non-emitting components or structures, the EPA said.
The proposed rule is also is meant to support the development of artificial intelligence infrastructure and power generation. This will help accelerate data center construction, a priority outlined in a July 23 executive order, the EPA said.
“For years, EPA’s definition of ‘Begin Actual Construction’ has imposed constraints on economic development and American ingenuity by slowing down parts of construction projects that pose no impact to human health or the environment,” the agency said. “Cutting unnecessary permitting red tape will allow the reshoring of manufacturing, while still 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 pollution sources or modifying existing ones. According to the agency and the National Association of Manufacturers, there has always been confusion regarding what types of construction are allowed before obtaining a permit, which has unnecessarily stymied development.
“The EPA’s ‘Begin Actual Construction’ proposal is a win for manufacturers and the communities who rely on the jobs and investments our members create,” said NAM Vice President of Domestic Policy Chris Phalen in an emailed statement. “Manufacturers … will now be able to make progress on critical projects as they continue through the air permitting 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 with Liskow & Lewis, said in an email.
“The rules already allow certain site preparation activities, such as site clearing, to begin before a permit is issued, but this change would expand the scope of work that would be allowed and reduce the types of activities that are prohibited without the issuance of a permit,” he said. “Further, the incorporation of these concepts into the regulations will add permanence to them and make it more difficult for a future administration to reverse course.”
Johnson added that the EPA produced draft guidance in 2020 that “implemented these same concepts.” It 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.
“Before that time, EPA had taken a much more restrictive view of what activities could be performed prior to the issuance of a permit,” he said. “Since 1986, even construction of structures such as footings and retaining walls were effectively prohibited unless and until an NSR permit was issued. This rule would formalize these concepts and make them more broadly applicable, rather than being subject to case-by-case decisions under the policy.”
Greater certainty in Clean Air Act permitting is important for manufacturers because “manufacturing projects often involve construction schedules with long lead times, which can make it challenging for facilities to wait until they have an air permit in hand before starting any sort of site work,” Nikki Waxman, an attorney at Beveridge & Diamond who focuses on emissions compliance and related areas, said in an email.
“Under EPA’s proposal, companies could move forward (at their own risk) with non-emitting work such as certain site preparation, utility infrastructure, concrete pads, foundations or building shells that are not specifically configured for emissions equipment, before the NSR permit is issued,” she said.
However, she noted that the work “cannot cross the line into construction of pollutant-emitting activities.”
“The rule would not allow a company to operate without a permit, and it would not change the substantive NSR requirements for [best available control technology], [lowest achievable emissions rate], or emissions limitations,” Waxman said. “Manufacturers would still need to assess whether the specific construction activity is general-purpose, non-emitting infrastructure, or whether it is uniquely configured to serve emitting process equipment.”
Comments on the proposed rule are due by June 29.
America’s “broken permitting process” costs U.S. manufacturers $7.9 billion a year, 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% of modifications or additions, as the most burdensome approval process among many.
For these reasons, Trump administration officials called for environmental permitting reform at this month’s SelectUSA Investment Summit.
Moreover, industry and trade groups said at a Senate Environment & Public Works Committee hearing in January that Congress urgently needs to enact permitting reforms for faster approval of major infrastructure projects.
