EPA Plans to Restore Policy Preventing ‘Second Guessing’ of Emissions Estimates for NSR Permitting

In support of the administration’s efforts to facilitate the development of data centers, on September 15, 2025, US Environmental Protection Agency (EPA) Administrator Lee Zeldin announced at a White House artificial intelligence roundtable that the agency plans to readopt a 2017 memo issued by former EPA Administrator Scott Pruitt (the Pruitt Memo) concerning the Clean Air Act's New Source Review (NSR) permitting program. The Pruitt Memo, which was rescinded by the Biden administration in 2022, provided that EPA would not “second-guess” pre-project emissions projections made by permit applicants and/or state permit writers, providing applicants and state permitting agencies increased latitude in determining whether certain projects triggered NSR requirements.

Though presented as an effort to cut red tape for projects powering artificial intelligence (AI) infrastructure and data centers, readoption of the Pruitt Memo would have implications well beyond the AI realm, including the permitting of traditional sources typically subject to NSR. By potentially streamlining NSR permitting processes and shielding certain permitting decisions from federal scrutiny, the policy change could provide entities looking to modify sources that may have otherwise been considered a major modification increased certainty and flexibility by allowing them to work dependably alongside local environmental agencies to ensure projects are below emissions permitting thresholds.

There are at least two immediate impacts of this readoption—first, entities constructing new projects will have greater flexibility in the planning for permitting a new source to reduce the burdens and impacts of the permitting process required under old NSR guidelines. For instance, under NSR regulations, for existing sources contemplating a modification, an Actual-to-Project-Actual Applicability (APTA) test is utilized to determine whether a proposed project triggers NSR permitting requirements. The source would provide a comparison of pre-project actual emissions with projections of post-project actual emissions to determine whether any proposed construction would result in a significant emissions increase. Under previous regulations, a facility would estimate what its actual air pollution levels would be after a proposed modification, and EPA could question any assumptions made by the facility used in estimating those post-modification actual emissions. This ability to question emissions calculations allowed EPA to delay construction projects before they began.

Second, the readoption of the Pruitt Memo means EPA will not second-guess project emissions projections provided by the applicant unless there is a clear error or violation of procedural requirements, providing the source with much greater leeway in avoiding the typical NSR permitting process for new projects. Reducing EPA’s role in assessing the NSR applicability calculations has both a temporal and substantive impact on project planning. Project applicants will have greater certainty with respect to the timing of the process, and it will facilitate modifications where the state permitting agency and applicant agree on the calculations demonstrating no significant emissions increases.

Ultimately, the readoption of the Pruitt Memo appears encouraging for project proponents, who should experience more flexibility in developing applications that would not trigger NSR and should be able to receive permits in less time. If EPA is essentially precluded from second-guessing the emissions estimates and subsequent decisions of state permit writers who determine whether certain projects rise to the level of a “major modification” that would require additional NSR review absent clear error, there should be more certainty in the permitting process and less time spent waiting for EPA review.

Overall, the readoption of the Pruitt Memo may provide new opportunities for entities looking to complete source modification projects to do so with increased certainty and flexibility through cooperation with local environmental agencies. By creating clearer regulatory pathways and trusting states to handle permitting processes at the local level, the readoption should provide opportunities to streamline the planning and construction process for any emission source modification projects. This decision by EPA, which is being described as a necessary catalyst for projects powering AI infrastructure and data centers, may therefore result in shorter process for not only AI-focused projects but for the entire industrial sector.