EPA Clarifies Section 401 Certification, Announces Future Action

Originally published in the July 2025 issue of Bench & Bar of Minnesota Environmental Law Update, Minnesota State Bar Association.

Co-authored by Nathan Spindler-Krage, Summer Associate

The U.S. Environmental Protection Agency (EPA) recently issued a memorandum clarifying the scope of Clean Water Act Section 401 certification. Peggy S. Browne, Clarification Regarding the Application of Clean Water Act Section 401 Certification, EPA Office of Water (May 21, 2025) (401 Memo). The 401 Memo narrows the scope of state and tribal review of federally permitted projects to water-quality impacts directly related to a project’s discharge rather than a project’s overall impacts. See 33 U.S.C. § 1341(a)(1) (Section 401) and 40 CFR § 121.3 (2024) (EPA rule regarding the scope of Section 401 certifications) (2023 Rule). The 401 Memo also indicates EPA will use a future notice and recommendations docket to develop new guidance or rulemaking.

Under Section 401, applicants for a federal permit that may result in a discharge to Waters of the United States must first provide the permitting federal agency a certification from the state (or treated-as-state tribe) in which the discharge will occur that “such discharge” will comply with state water quality standards. Section 401(a)(1). This process, which can apply to federal permits to impact wetlands (Section 404) and for Federal Energy Regulatory Commission Projects, gives certifying states and tribes significant authority over such federally permitted projects, including the power to add conditions to the federal permits. In Minnesota, Section 401 certifications are handled by the Minnesota Pollution Control Agency, which must either certify or waive review of a relevant federal project, such as an application for a Section 404 permit to fill in a wetland, before the applicable federal agency can permit the project. Unsurprisingly, the scope of state and tribal authority to condition federal permits under Section 401 has been the subject of significant debate. 

Whereas Section 401 focuses on impacts from a proposed “discharge,” the Biden-era 2023 Rule directs a certifying state or tribal authority to evaluate whether an “activity” will comply with state/tribal water quality requirements. This “activity” language arguably broadened the scope of review, particularly since the 2023 Rule specifies that state/tribal review may include impacts from the “the activity’s construction and operation.” This language is more expansive than that of the prior rule, promulgated by the first Trump administration, which limited certifications’ scope to assuring that “a discharge” from the proposed activity would comply with water quality standards. 40 CFR § 121.3 (2023) (2020 Rule). Critics of the 2020 Rule had argued that it stripped certifying authorities of local input and limited their evaluation of long-term harms. Conversely, critics of the 2023 Rule have argued that it allows states too much discretion to consider indirect or unrelated activity impacts. As the 401 Memo suggests, those critics thought that Section 401 certification could be used “as a weapon to shut down” locally unpopular energy, infrastructure, and development projects.

Therefore, the 401 Memo narrows the scope of permissible interpretations of the 2023 Rule. In short, it moves — or at least tries to move — from project-as-a-whole to discharge-alone review, in line with the 2020 Rule. Per the 401 Memo, Section 401 certification must address “only water quality-related impacts.” A certifying authority may not deny or condition certification because of “air quality, traffic, noise, project preference, or economic impacts” with “no direct connection to water quality.” And a certifying authority may not condition certification because of “generalized concerns about water quality” untethered to noncompliance with a specific water quality requirement.

The practical impacts of the 401 Memo are uncertain. The agency has articulated a new interpretation; however, the broad “activity” language of the 2023 Rule remains in force. Absent more significant changes, Section 401 certification processes will likely remain about the same as they have been under the 2023 Rule.

However, more significant actions may be forthcoming. The 401 Memo signals that EPA will use a future notice and recommendations docket to inform “additional guidance or rulemaking” regarding the 2023 Rule. There is likely more to follow.

For more information, contact Jeremy P. Greenhouse.