Inflation Comes for Pennsylvania’s Air Penalties
written by Louis Dodge for The Legal Intelligencer October 16, 2026.
On August 8, 2026, Pennsylvania’s Department of Environmental Protection (PADEP) issued revised guidance on assessment of civil penalties related to air-quality violations, marking the policy’s first revision since 2012. PADEP’s Guidance for the Application of Regional Civil Penalty Assessment Procedures, Technical Guidance Document No. 273-4130-003 (the “Guidance”), updates the methodology PADEP employs when assessing civil penalties under section 9.1 of the Pennsylvania Air Pollution Control Act (APCA).
The revised Guidance modernizes the inputs that will shape proposed penalties for APCA violations, now accounting for inflation, facility size, emissions in sensitive areas, and DEP’s own enforcement costs. PADEP has also restructured how some penalties are calculated; for example, Companies facing air-quality enforcement actions should expect a more structured penalty analysis that accounts for factors not previously considered, albeit with higher penalties as a frequent result.
Originally implemented in 1992, the superseded guidance had been effective since June 2, 2012. The revisions are intended to promote consistent assessment of monetary penalties for violations of the federal Clean Air Act, the APCA, and implementing regulations.
When formulating civil penalties under APCA, Section 9.1 requires DEP to consider the willfulness of the violation; damage or injury to air, land, water, or public health; cost to the Commonwealth; savings or economic benefit resulting from the violation; compliance history; severity and duration; degree of cooperation; speed of eventual compliance; voluntary reporting; and other relevant factors. 35 P.S. § 4009.1(a). But the August Guidance changes PADEP’s working methodology for translating those factors into a recommended civil penalty.
The revised Guidance adds an across-the-board inflation adjustment and provides for semi-annual inflation adjustments; clarifies treatment of unpermitted sources and late permit fees; provides an alternate calculation method for hazardous-air-pollutant exceedances; revises certain scheduled penalties; consolidates and reorganizes portions of the guidance; and revises the penalty worksheet to account for facility size, emissions in sensitive areas, and Department costs. While these changes may at first glance appear largely administrative, they will subject Pennsylvania businesses to higher penalties for years to come.
The most obvious change is the addition of an across-the-board inflation adjustment, followed by a semi-annual adjustment, starting in 2028, for additional inflation by reference to the Consumer Price Index for All-Urban Consumers. For penalty calculations occurring after August 8, 2026, PADEP staff will multiply their penalty assessments by an inflation multiplier, though the multiplier is set at 1 through December 31, 2027. These inflation-related adjustments do not apply, however, to penalties for economic benefits from non-compliance or to costs incurred by PADEP, which each already account for inflation through other means. The penalties remain subject to APCA’s $25,000-per-day cap on emissions violations.
PADEP also amended several of its penalty calculations. First, the agency dispensed with seasonal ozone fines for volatile organic compound (VOC) and nitrogen dioxide (NOx) emissions in favor of standardized penalties that escalate based on severity of the violation, while increasing fees per pound across the board.
The Guidance also adds a new, alternative method of calculating penalties for Hazardous Air Pollutants[1] (HAP) with low emissions limits. While the Guidance allows the agency to impose a $8.40/lb penalty for HAP emissions above limits, PADEP staff now have discretion to assess penalties based on the percentage by which emissions exceeded allowable emissions rates and the duration of the violative conduct. This effectively allows PADEP to impose more stringent penalties for more harmful chemicals, even where a penalty calculation based on overall emissions volume might have resulted in lower fines.
At the same time, the new Guidance creates new leeway for smaller businesses with lower overall emissions, potentially allowing those companies to avoid the impact of inflation-pegged penalties. The revised Section X penalty-calculation worksheet expressly adds consideration of facility size, whether violations adversely affect sensitive areas, and PADEP costs incurred. “Sensitive areas” include areas near schools, hospitals, Environmental Justice Areas,[2] or other locations where the consequences of an emissions violation may be heightened. For the first time, small businesses[3] that have relatively low annual emissions can have penalties reduced based on their size alone. Facility size may bear on the agency’s assessment of an operator’s resources, the significance of the source, or the appropriate deterrent value of a penalty.
At bottom, the revised Guidance gives PADEP more flexibility to formulate penalties that are tailored to specific emissions violations and account for the substances emitted. Though the agency can account for an entity’s size and overall emissions to reduce civil penalties, the “adjustment factor” assigned to facility size is relatively small—equivalent to the benefits of providing PADEP prompt notification when a violation occurs. Most companies unable to comply with regulatory emissions requirements will therefore wind up paying higher overall penalties, making preemptive compliance even more of a priority in the coming years.
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[1] The Guidance defines “hazardous air pollutant” by reference to Section 112(a) of the Clean Air Act, 42 U.S.C. § 7412. Generally speaking, hazardous air pollutants include chemicals known or suspected to cause cancer or other serious health effects. See Guidance for the Application of Regional Civil Penalty Assessment Procedures, Technical Guidance Document No. 273-4130-003, at 6 n.1 (Aug. 8, 2026)
[2] PADEP has promulgated separate guidance defining “Environmental Justice Areas.” See Pa. Dep’t of Env’tal Protection, Environmental Justice Policy, at 4-5 (Jan 3, 2026), https://bit.ly/PADEPenvtaljustice.
[3] The Guidance defines “small business” as one that “(1) is owned or operated by a person that employs 100 (100) or fewer individuals; (2) is a small business as defined in the Small Business Act . . . ; (3) is not a major stationary source; (4) does not emit fifty (5) tons per year of any regulated pollutant; and (5) emits less than seventy-five tons per year of all regulated pollutants.”
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