Manufacturers Push Back as EPA Proposes Major Change to Emissions Rules

Manufacturers across the United States are sounding the alarm over a new EPA proposal that could dramatically reshape how factories are permitted, expanded, and modernized. The rule known as the “Actual Construction” proposal would change when a facility triggers New Source Review (NSR), one of the most complex and costly environmental permitting programs in the country. And industry groups say the change could slow investment, delay upgrades, and saddle manufacturers with new regulatory uncertainty at the worst possible time.

Under current rules, manufacturers can begin certain pre-construction activities like site prep, equipment staging, or foundation work before completing NSR permitting, as long as they don’t install emissions-producing equipment. The EPA now wants to tighten that definition, limiting what counts as “construction” and potentially forcing companies to wait months or even years before breaking ground. The agency argues the change is needed to prevent companies from moving too far ahead on projects that may ultimately require emissions controls.

But the National Association of Manufacturers (NAM) says the proposal would do the opposite of what the EPA intends. In comments submitted to the agency, NAM warned that the rule “creates more confusion, not clarity,” and could discourage companies from investing in cleaner, more efficient equipment. NAM’s managing vice president of policy, Brandon Farris, put it bluntly: “This proposal will slow down modernization, slow down emissions reductions, and slow down growth.”

The stakes are high. NSR permitting is already one of the most time-consuming regulatory hurdles manufacturers face. A Government Accountability Office review found that major NSR permits can take 18 months or longer to complete, and industry groups say delays often stretch past two years. For companies trying to expand production, add new lines, or upgrade aging equipment, those delays translate into real money. The EPA itself estimates that NSR compliance can cost facilities millions of dollars per project.

Manufacturers argue that the new rule could make things even worse by forcing companies to halt early-stage construction until permits are finalized, a shift that could disrupt project timelines, increase costs, and deter investment in cleaner technologies. NAM also warned that the proposal could trigger more litigation, as companies and regulators fight over what counts as “construction” under the new definition.

The timing adds another layer of tension. U.S. manufacturing investment has surged over the past three years, with more than $650 billion committed to new factories in semiconductors, EVs, batteries, and clean energy equipment. Many of those projects rely on tight construction schedules and phased permitting. Any slowdown could ripple across supply chains already strained by labor shortages, energy volatility, and global competition.

Environmental groups, meanwhile, argue that the rule is necessary to ensure companies don’t lock in higher emissions before regulators can evaluate the full impact of a project. They say the current system allows too much leeway and risks undermining air-quality protection in communities already burdened by industrial pollution.

But manufacturers counter that they’re already investing heavily in cleaner, more efficient operations and that regulatory uncertainty is the real threat to progress. As NAM noted, “Manufacturers are committed to reducing emissions, but we need clear, workable rules that support modernization, not hinder it.”

The EPA is expected to review comments and finalize the rule later this year. Until then, manufacturers are bracing for what could become one of the most consequential regulatory shifts in a decade, one that could shape how, when, and where American factories grow.