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ARTICLE · 01 OCTOBER 2025

Permitting Reform Ahead: EPA Targets Preconstruction Rules And Retires Reactivation Policy

K&L Gates
K&L Gates
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The US Environmental Protection Agency (EPA) recently announced two significant reforms to its New Source Review (NSR) permitting program for major sources of air emissions.

United StatesReal Estate and Construction
Benjamin A. Mayer
Benjamin A. Mayer
Tad Macfarlan
Tad Macfarlan
David L Rieser
David L Rieser
Derek B. Kalbfleisch
Derek B. Kalbfleisch

The US Environmental Protection Agency (EPA) recently announced two significant reforms to its New Source Review (NSR) permitting program for major sources of air emissions. First, EPA is developing a rule to revise its interpretation of the definition of "begin actual construction" under NSR regulations, with a proposal expected in 2026. Second, EPA has rescinded its long-standing "Reactivation Policy" through a memorandum issued by Administrator Lee Zeldin on 18 September 2025 (Zeldin Memo). These actions mark shifts in the regulatory landscape for project development and facility restarts under the Clean Air Act (CAA).

These permitting reforms arrive at a moment when energy demand, particularly due to artificial intelligence (AI), data center growth, and electrification, is projected to surge sharply over the next five years. US data center power demand alone is projected to grow from 25 GW in 2024 to over 80 GW by 2030.1 Given this backdrop, the timing of EPA's

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