Project Emissions Accounting – a Trump EPA loophole that is adding dangerous pollution to the air we breathe

One of the most harmful actions the Trump EPA took during its first term was undermining long-standing Clean Air Act safeguards that require industrial facilities like refineries and power plants to modernize their pollution controls when they are newly built or expanding in a way that increases overall pollution volumes. These protections are intended to ensure newly constructed facilities or refurbishing existing industrial facilities are good neighbors and install the best available pollution controls to mitigate the harms when their industrial activities are increasing pollution in our communities.    

The Trump EPA granted polluters a long-sought pass that allowed facilities to evade these New Source Review protections – without the public or regulators even knowing that pollution-increasing projects were taking place.  

Last November, EDF, Natural Resources Defense Council (NRDC) and the Sierra Club filed a brief in court challenging the Trump EPA’s adoption of this damaging policy, which is known as Project Emissions Accounting. The Trump EPA filed its brief this week.  

Project Emissions Accounting allows industry to manipulate emissions calculations to avoid triggering requirements that would protect local air quality against large pollution increases. 

Here are some more things you should know: 

New Source Review is an essential safeguard for local air quality 

For decades, New Source Review safeguards have applied whenever an industrial plant makes a change that increases its pollution. To ensure this excess pollution doesn’t compromise local air quality, New Source Review provides protections that include: 

• requiring the use of the most up-to-date control technologies 
• requiring rigorous analysis of the impacts of the additional pollution on local air quality, including through local air quality monitoring – and ensuring this information is provided to the community 
• ensuring that additional pollution does not interfere with the area’s ability to meet National Ambient Air Quality Standards – the national health-based limits for certain potentially deadly pollutants 
• opportunities for public participation, including public hearings and opportunities for people to provide written comments on a facility’s proposed permit 
• in some cases, requiring a facility to offset its pollution increases by making other equivalent pollution reductions 

Project Emissions Accounting — an industry free pass to pollute  

The Trump EPA’s “project emissions accounting” policy creates new loopholes that effectively grant industry near limitless ability to increase pollution significantly — like by building new power plants — without going through New Source Review.  

Here’s how it works:  

Sometimes existing plants make changes that result in both pollution increases and pollution decreases. For example, a manufacturing plant might increase production of a certain product, increasing its pollution, but at the same time cut production of another product line, decreasing its pollution from that process.  

Previously, a plant could count these pollution decreases against the pollution increases to avoid being subject to New Source Review – but ONLY with certain conditions to ensure that the decreases were real, enforceable, and happened before the pollution increases. The Trump EPA did away with these critical safeguards.  

Under the Trump EPA’s policy, facilities can avoid New Source Review by counting pollution decreases that are speculative, are not permanent, and are not projected to occur until years into the future. That means communities will suffer rises in noxious emissions with none of the protections of New Source Review.  

No transparency about significant increases in air pollution  

Sources that use Project Emissions Accounting to avoid New Source Review may still be subject to state permitting requirements, but this review is often insufficient to provide meaningful protection. The federal rules governing such programs are weak. They largely delegate to the states to determine how protective review of minor sources should be, and those requirements can vary widely from state to state.  

Alarmingly, there is no requirement for sources to disclose when they have used Project Emissions Accounting to avoid New Source Review. Federal and state regulators themselves have no way of tracking which sources have decided they do not need to go through the full process. Facilities are not required to document or report their emissions decreases. The Trump EPA plan is based on industry self-regulation with no oversight.  

The Biden administration had proposed adding guardrails to the use of Project Emissions Accounting – including requiring that emissions decreases be enforceable, and adding recordkeeping, reporting and monitoring requirements. That proposal was not finalized though, and the Trump administration last summer withdrew the proposal with little explanation.  

Exploitation of a loophole for new gas power plants 

The Trump administration adopted its policy in 2018 and formalized it in rulemaking in 2020. Since then, sources across the country have used it to evade New Source Review.  

While we have no way of knowing exactly how widespread the use of Project Emissions Accounting is due to the lack of transparency, what we have found suggests a deeply alarming and inappropriate reliance on this policy to avoid New Source Review for large new sources of pollution. 

One particularly egregious use is by some power companies that operate aging coal plants that they plan to retire. In certain cases, owners of these plants have avoided New Source Review for the construction of new gas power plants by siting them near the existing coal plants they had already planned to shut down – and claiming that pollution from the new gas plants, like dangerous nitrogen oxides (NOx) that contribute to smog, is offset by the pollution decreases from closing old coal plants.  

This maneuver allows them to evade rigorous air pollution protections that would apply if the gas plant were sited anywhere else – including requirements to install modern controls for smog-forming NOx pollution and to consider cleaner alternatives. This is even true when the companies have made no enforceable commitment to permanently shut down the old coal plants before operating the new gas plants.  

This is especially concerning because the Trump administration has finalized a weak NOx pollution standard for new gas plants — rejecting science-based standards achievable with the use of readily available modern pollution controls.  

Under New Source Review regulators conduct individualized reviews and may require more protective controls than what is required by broadly applicable New Source Pollution Standards. But with new power plants able to manipulate Project Emissions Accounting to avoid New Source Review, this backstop is lost. 

In total, EDF and partners identified at least 12 new or expanding facilities across eight states (Kentucky, Tennessee, California, Oklahoma, Michigan, Georgia, Indiana, North Carolina) that have exploited this loophole to evade New Source Review Safeguards. 

Here are just two instances, both in North Carolina: 

• Duke Marshall Steam Station – the facility was issued a permit without going through New Source Review to construct two new gas combustion turbines. Its operators managed this by relying on emissions decreases from the planned retirement of two existing coal units. Regulatory filings show that Duke Energy chose to site the new gas power plants in this location instead of other places it was considering after it had already planned to retire the coal plants — in part to take advantage of the loophole created by the Trump EPA policy. The permit allows the new gas units to begin operation before the two coal units are shut down.  
• Roxboro Steam Electric Plant — the facilitywas issued a permit without going through New Source Review to construct four new gas combustion turbines. Its operators managed this by relying on the planned retirement of four existing coal units. The permit places no restrictions on when — or if — those coal units must stop operating.  

EDF and our partners will continue to vigorously oppose this damaging policy as the case continues in court.