Detroit Is Nonattainment Again — Re-Screen Every In-Flight Air Project Under Nonattainment NSR
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Detroit Is Nonattainment Again — Re-Screen Every In-Flight Air Project Under Nonattainment NSR

The Sixth Circuit vacated Detroit's ozone redesignation. Starting June 29, 2026, the seven-county area runs on NNSR — 100 tpy thresholds, 1.15:1 offsets, LAER.

by iSi Environmental

If you have a paint shop expansion, a new boiler, an engine line, a chemical mixing operation, or any other capital project in southeast Michigan that was screened against Prevention of Significant Deterioration (PSD) thresholds at any point in the last two and a half years, stop and re-screen it under nonattainment New Source Review (NNSR) before the project team makes another vendor commitment. On December 5, 2025, the U.S. Court of Appeals for the Sixth Circuit vacated EPA’s 2023 redesignation of the Detroit area to attainment for the 2015 ozone NAAQS (Environment+Energy Leader summary). On May 29, 2026, EPA published the technical amendment restoring the area’s Moderate nonattainment designation (91 FR 31953). That amendment takes effect June 29, 2026.

The seven affected counties are Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne. For NOx and VOC — the ozone precursors — PSD under Clean Air Act Section 165 no longer governs new and modified major sources in this area. Nonattainment NSR under Section 173 and Michigan’s SIP-approved program does. The thresholds, the control standard, and the offset requirement all change. Projects that fit under PSD will not necessarily fit under NNSR, and the difference can be enough to shift a project’s schedule, capital cost, and engineering scope.

TL;DR: Detroit’s seven-county area is back to Moderate nonattainment for the 2015 ozone NAAQS effective June 29, 2026. New major sources of NOx or VOC at 100 tons per year trigger NNSR. Major modifications trigger at 40 tpy of net emissions increase. Offsets are 1.15:1. BACT becomes LAER. Re-screen any in-flight Permit-to-Install application before the effective date.

What the Sixth Circuit Actually Decided

The court held that EPA misapplied Clean Air Act Section 107(d)(3)(E)(v), which requires that all applicable Moderate-area controls be fully implemented before EPA can redesignate a nonattainment area to attainment. EPA’s 2023 redesignation rested on a record where those Moderate controls were not in place. The court vacated the redesignation and remanded the matter to EPA. Practically, that means the area’s designation reverts to what it was before EPA’s 2023 action: Moderate nonattainment for the 2015 ozone NAAQS of 70 ppb.

EPA codified the reversion through a technical amendment, not a new rulemaking (91 FR 31953). The amendment is administrative. It does not reopen the underlying designation question; it conforms 40 CFR Part 81 to the court’s order. June 29, 2026 is the effective date and the date the NNSR framework begins applying to permitting decisions in the seven-county area.

Which Facilities Are Affected

The geographic line is straightforward. The seven counties — Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne — are in. Every other Michigan county is out. If a facility sits inside that boundary and meets one of three conditions, it is in scope:

  1. A new source with potential-to-emit at or above 100 tons per year of NOx or VOC.
  2. An existing major source planning a modification where the net emissions increase exceeds the significance threshold — 40 tpy NOx or 40 tpy VOC.
  3. Any project that triggers a Michigan EGLE Permit to Install where the application is now reviewed under the NNSR program rather than PSD.

The industries this hits hardest in southeast Michigan are automotive manufacturing (paint shops and engine plants are significant VOC and NOx sources), steel and metal fabrication, chemical processing, food processing operations with material combustion, power generation, and large commercial bakeries — which are routinely overlooked as VOC sources even though they are not small. Public infrastructure projects funded under the Infrastructure Investment and Jobs Act (IIJA) in these counties also face conformity determination obligations under Clean Air Act Section 176(c). Transportation projects that increase regional VOC or NOx emissions must demonstrate conformity to the SIP emissions budget — a budget EGLE will now have to revisit.

Facilities outside the seven-county area face no direct NNSR change today. They should still watch the SIP revision schedule, because RACT obligations for Moderate-area sources will be developed through a SIP revision, and statewide control measures sometimes accompany area-specific ones.

The 100 tpy Threshold Trap

The PSD major source threshold for an unlisted source is 250 tons per year. The NNSR major source threshold for Moderate ozone nonattainment is 100 tons per year of NOx or VOC (40 CFR 51.165(a)(1)(iv)(A)(1)). That difference is the single most important number a project planner needs to internalize.

Here is the trap: a project sized for PSD avoidance against the 250 tpy threshold can blow through the 100 tpy NNSR threshold without changing a single piece of equipment. Engineering teams that worked out a “stays under PSD” capacity envelope months ago need to redo the math against the lower number. The same applies to the modification significance level. A net emissions increase that was comfortably under PSD significance can land squarely inside NNSR significance.

The other figure that changes the project economics: the offset ratio. Moderate ozone areas require emission offsets at 1.15 to 1 (40 CFR 51.165(a)(9)). Every ton of new NOx or VOC from a permitted major source has to be matched by 1.15 tons of reductions from another source — Michigan’s offset bank, contemporaneous reductions at the same facility, or other qualifying sources. Offset supply in southeast Michigan is thin, and that thinness alone has historically pushed offset cost and availability onto the project’s critical path.

LAER Replaces BACT — and the Difference Is Not Trivial

Under PSD, new major sources install Best Available Control Technology (BACT). BACT is a case-by-case determination that considers energy, environmental, and economic impacts. Cost matters.

Under NNSR, the control standard is the Lowest Achievable Emission Rate (LAER). LAER is the most stringent emission rate “achieved in practice” by the same or a similar source category. Cost does not enter the LAER analysis the way it enters BACT. If a single facility in the country has achieved a lower rate on a comparable source, that rate becomes the floor for LAER consideration. The engineering scope, the capital cost analysis, and the vendor selection conversation all shift.

For a project team that worked through a BACT analysis in 2024 or 2025 under the redesignated-to-attainment assumption, the LAER analysis is not a redline edit of the BACT work. It is a different exercise with a different evidentiary record. Plan for the additional engineering time and the additional capital. A BACT-to-LAER pivot late in a project cycle is the kind of finding that resets schedule.

Source Aggregation and the Existing-Facility Problem

NNSR does not aggregate sources across the state, but it does aggregate sources owned by the same parent within the nonattainment area. If a corporate parent operates more than one facility within the seven-county area, the emissions calculations and the netting analysis need to look across those facilities together where the rules require it.

For multi-facility operators, this is where the “we already screened it” instinct fails. A facility-level screen done before December 5, 2025 may not capture the in-area aggregation that NNSR requires. The first step on a multi-facility audit is a fresh map of all parent-owned sources in the seven counties, with current potential-to-emit numbers and a contemporaneous netting window applied. That is a real piece of work — not a memo.

The RACT Wave Is Coming for Existing Sources

NNSR is the headline for new sources and major modifications. The slower-moving consequence for existing sources is RACT — Reasonably Available Control Technology. Michigan EGLE must develop and submit a complete RACT SIP for Moderate-area sources before EPA can revisit attainment status. EPA’s reclassification SIP submittal deadlines establish the framework for how quickly that obligation lands (Federal Register 2024-22008). Expect the RACT SIP development cycle to run 18 to 36 months, with implementation deadlines following the SIP approval.

RACT does not affect every existing source equally. EGLE will develop source-category RACT determinations, and the categories most likely to see new control requirements are large boilers, paint and coating operations, printing operations, solvent users, and process sources subject to existing EPA Control Techniques Guidelines (CTGs). Operators in those categories should not wait for the SIP to be proposed before mapping their existing source inventory against likely RACT control levels.

Permits Already in Flight — The Transition Question

If a Permit-to-Install application is sitting at EGLE today, having been drafted under the post-redesignation PSD framework, the transition treatment depends on where the application stands on June 29, 2026. EGLE has historically applied the regulatory regime in effect at the time of permit issuance. An application not yet issued by June 29 will, in general, be reviewed under the NNSR framework that takes effect that day.

The operational implication: any application that was sized to clear PSD but does not clear NNSR is now at risk of either denial or substantial revision. Project teams with applications in this position have a narrow window. The choices are: pull the application and re-engineer the project, accept the NNSR review and absorb the offset and LAER consequences, or push for issuance under the prior framework if the agency record supports it. None of these are routine moves. All three require running the numbers against current NNSR thresholds before deciding.

Permits already issued under PSD assumptions need a different review. The permit itself is durable; the question is whether the facility’s Title V permit needs revision to reflect the area’s restored nonattainment status. Region 5 enforces Title V obligations for major sources, and operating without an updated Title V permit reflecting nonattainment-area emission limits is a separate violation track from NNSR. Facilities with Title V permits issued under the PSD-era assumptions should plan for permit revisions on the next renewal cycle, if not sooner.

Counter-Signal: The Exceptional Events Wildcard

There is a real reason a Detroit-area project manager might read the above and ask whether the practical impact is overstated. On the same day EPA published the technical amendment, it also published a proposed determination of attainment by the attainment date (91 FR 31993). The determination rests on EGLE’s February 19, 2026 exceptional events demonstration — wildfire smoke transport from Canada in 2023 and 2024 — which EPA concurred with on March 24, 2026. Excluding the affected monitoring days from the design value calculation pushes the area below the 2015 ozone NAAQS of 70 ppb.

If that proposed determination finalizes as drafted, the practical effect is meaningful: the area would remain classified Moderate but would be treated as having attained by the attainment date. The comment deadline is June 29, 2026 — the same day the technical amendment takes effect.

Do not plan around it. Two reasons. First, the Sierra Club has publicly announced intent to sue EPA over the attainment determination (Planet Detroit, May 2026). A successful challenge vacates the determination, restoring the full NNSR overlay without the exceptional events relief. Second, even if the determination survives, it does not change the technical amendment’s effective date or the NNSR framework that begins applying June 29, 2026 to in-flight permitting decisions. The exceptional events path is a separate procedural mechanism with its own litigation risk profile. A project planner who assumes the attainment determination will hold is betting on a regulatory outcome that, as of today, is contested.

The honest read: build the project plan against the NNSR framework. Treat any exceptional events relief as upside if it materializes.

What Other Midwest Redesignations Look Vulnerable

The Sixth Circuit’s reasoning was structural, not narrow. Section 107(d)(3)(E)(v) requires Moderate-area controls to be fully implemented before redesignation. Multi-state operators with facilities in other recently-redesignated Midwest areas should expect similar scrutiny on the underlying SIP records. Cleveland, St. Louis, and Pittsburgh-area redesignations all share the structural feature the Sixth Circuit named — redesignation actions taken on records where the full Moderate-area control implementation had not been demonstrated. None of those is automatically vulnerable, and EPA’s records vary. But “redesignated, durable” is not a safe assumption anymore. Multi-state environmental managers planning capital projects in any of those areas should pull the underlying SIP record before committing engineering scope to the attainment-era control framework.

This is the broader operational lesson for any operator outside Michigan: redesignations earned on incomplete records carry vacatur risk. The Sixth Circuit decision is now a precedent other courts can cite. Treating any borderline redesignation as durable in 2026–2027 is a risk position, not a default.

What To Do This Week

For a southeast Michigan facility with capital projects in the queue:

  1. Map every NOx and VOC project — capital plan and in-flight Permit-to-Install applications — against the seven-county boundary. Confirm which projects sit inside.
  2. Re-screen each in-scope project against the 100 tpy NNSR major source threshold and the 40 tpy modification significance threshold. Use current potential-to-emit numbers, not the numbers in the original application.
  3. For any in-flight Permit to Install, run the transition analysis with EGLE before June 29, 2026. The conversation with the EGLE Air Quality Division is easier before the effective date than after.
  4. Identify offset sources. Michigan’s offset bank is one option; contemporaneous reductions at the same facility are another. Federal offset sources are limited. Offset procurement timelines run months, not weeks.
  5. For any project that previously cleared a BACT determination, scope the LAER analysis as a fresh exercise — not a redline edit. Expect a different control basis and different vendor conversations.
  6. For multi-facility parents in the seven-county area, run a fresh in-area aggregation map. Source aggregation under NNSR will pull facility-by-facility analyses into a single review.
  7. Track Michigan’s RACT SIP development. Operators of large boilers, coating lines, printing operations, and solvent-using sources should map current emission rates against likely RACT control levels now, not when the SIP is proposed.
  8. Comment on the proposed attainment determination by June 29, 2026 if the operational stakes warrant it (91 FR 31993).

Enforcement Posture

NNSR enforcement is permit-based. The single highest-exposure violation is constructing a major source or major modification without the required NNSR permit. Penalties under Clean Air Act Section 113 reach up to $123,811 per day per violation (2024-adjusted level, no 2026 inflation adjustment published as of this writing). EPA Region 5 has historically pursued these cases through unilateral administrative orders and civil judicial actions. Citizen suit exposure under Section 304 is independent of EPA enforcement and has been a meaningful pressure point for nonattainment-area construction in the Midwest. Sierra Club’s announced intent to sue EPA over the attainment determination indicates the citizen suit pressure on this regulatory framework is active, not theoretical.

For project teams asking “what’s the worst case if we get this wrong?” — the answer is construction shutdown, civil penalty exposure at six figures or more depending on duration, and the cost of retroactively obtaining the right permit (or unwinding the project). The cost of doing a fresh NNSR screen on a 30-day timeline is materially smaller than the cost of the wrong decision.

How iSi Helps

iSi Environmental supports industrial operators through NNSR screening, Permit-to-Install application preparation, offset sourcing, and LAER analysis for new major sources and major modifications across the seven-county Detroit nonattainment area and the rest of iSi’s national service footprint. We re-screen in-flight projects against the post-June-29 NNSR framework, run source aggregation analyses for multi-facility parents, and handle EGLE Air Quality Division coordination. For operators with facilities in multiple nonattainment areas, our COOP retainer model provides one team tracking the SIP revision schedule across all locations — so the corporate compliance function does not need to maintain in-house regulatory tracking for each state.

If you have a project in the Detroit seven-county area that was scoped under PSD assumptions, the highest-value 30-minute conversation right now is the re-screen against NNSR. Call us before the project team commits the next vendor order.

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