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D.C. Circuit Amends Judgment on Greenhouse Gas Tailoring Rule

Posted Tuesday, April 21st, 2015

On April 10, 2015, the U.S. Court of Appeals for the District of Columbia Circuit issued an amended judgment regarding the validity of the U.S. Environmental Protection Agency’s (EPA) greenhouse gas (GHG) Tailoring Rule. In a departure from the 100/250 ton per year (tpy) thresholds in the Clean Air Act, the Tailoring Rule provided that only sources emitting more than 75,000 or 100,000 tpy of carbon dioxide equivalent (CO2e)—depending on the program and project—would be subject to prevention of significant deterioration (PSD) or Title V regulation for GHGs. The D.C. Circuit upheld the Tailoring Rule in 2012. However, in 2014 the U.S. Supreme Court partially affirmed and partially reversed the D.C. Circuit’s decision, holding that the Clean Air Act neither compels nor permits EPA to require a source to obtain a permit solely on the basis of its potential GHG emissions (GHG-only permits) but that EPA reasonably interpreted the Clean Air Act to require a source that must obtain a PSD permit based on its emission of conventional pollutants (PSD-anyway sources) to also comply with best available control technology (BACT) requirements for GHGs.

On remand, the D.C. Circuit considered argument on whether the Supreme Court’s ruling required complete or only partial vacatur of the Tailoring Rule. Siding with EPA, the D.C. Circuit’s brief amended judgment vacates the Tailoring Rule only to the extent that it requires GHG-only permits, orders EPA to rescind and/or revise its regulations accordingly, and orders EPA to consider whether any further revisions to its regulations are appropriate in light of the Supreme Court’s decision. Further argument over the impact of the Supreme Court’s ruling is likely to be raised, however, once EPA engages in rulemaking to revise the Tailoring Rule.

For additional information, contact Andrew Holway.

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