The Illinois Pollution Control Board (Board) is an independent agency, which was created in 1970 to determine, define, and implement environmental control standards for the State of Illinois. On April 17, 2025, the Board adopted final amendments to the air pollution regulations under 35 Illinois Administrative Code (IAC) Parts 203 and 204 (R22-17), which address the Non-attainment New Source Review (NA NSR) and attainment/Prevention of Significant Deterioration (PSD) permit programs. These amendments were first proposed by the Illinois Environmental Regulatory Group (IERG) on August 16, 2021, and they aimed to make the regulations in 35 IAC Parts 203 and 204 more aligned with the federal NSR regulations. The amendments to Part 203 include revisions to be consistent with the federal Clean Air Act and underlying NA NSR program, and the revision to Part 204 includes alignment with the federal PSD rule on Project Emissions Accounting (PEA).
In 2020, the Illinois PSD rules were codified in Part 204 for attainment pollutants. Around this same time, the U.S. Environmental Protection Agency (US EPA) was in the process of finalizing some federal rules regarding PSD. This meant that some important provisions from the federal PSD rule changes were not included in Part 204. One of the key federal provisions not initially included in the 2020 Illinois Part 204 rule was federal rule language regarding PEA, which is a key factor in determining NSR applicability. To determine NSR applicability, a source must first calculate the emissions increase of each NSR regulated pollutant as a result of the project and compare that total to the relevant NSR threshold. Under the 2020 Part 204 rule, this calculation could only account for the increase in emissions associated with the project. So, any emissions reductions associated with the project (e.g., decommissioning of equipment), could not be accounted for when calculating the total change in emissions for the project without completing a contemporaneous netting analysis. The federal PEA rule, however, allows for the consideration of project related emissions decreases in addition to emissions increases when determining if the proposed project results in a significant emissions increase. Among the recently adopted amendments in 204 is the inclusion of the PEA federal rule language (35 IAC 204.800.d.5 & 204.800.d.6). As a result, sources can account for project emissions decreases when determining PSD applicability for attainment pollutants, which will more accurately capture the overall emissions impact of a project and lower the risk of triggering PSD permitting.
It should be noted that on May 3, 2024, US EPA announced significant potential revisions to the preconstruction permitting regulations under the NSR program. Among these proposed changes includes a revision of the definition of “project,” which will further specify what constitutes a “project” under NSR regulations. Under the proposed definition, if a source wants to claim that a group of changes at the facility all fall under one “project,” the changes will need to be “substantially related,” meaning they are “dependent on each other to be economically or technically viable.” This has substantial implications on the feasibility of PEA for NSR applicability determinations, since sources will need to be more cognizant of how they define the boundary of a project. US EPA has subsequently announced on July 21, 2024 withdrawal of the proposed revisions to the NSR rules. While the current definition of a “project” under 35 IAC 204.590 has not been affected by these proposed revisions, the Illinois EPA has applied increased scrutiny to what constitutes a project. Further information regarding these proposed revisions to NSR regulations can be found on Trinity’s website.
The revisions to Part 203 (NA NSR) include the addition of ten (10) new subparts (Subparts I through R), which, once approved by US EPA, will replace the currently effective sections of Part 203 (Subparts A through H). With these revisions to Part 203, federal PSD provisions are being incorporated and include use of baseline to projected actual emission evaluation for existing affected units, PEA, and demand growth exclusion (i.e., could have accommodated). There is also a new definition being introduced for “emission offsets” in 35 IAC 203.1150, which should provide additional flexibility for the generation and use of required emissions offsets for new major stationary sources or major modifications.
The amendments to Part 204 have been codified in 35 IAC effective April 23, 2025. However, the revisions to Part 203 await US EPA approval as part of Illinois’ State Implementation Plan. Pursuant to 35 IAC 203.100.b., the permitting and operation of projects that began actual construction or may begin actual construction before the date US EPA approves of the proposed subparts (Subparts I through R) shall maintain compliance with Subparts A through H of Part 203.
