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D.C. Circuit Upholds in Part and Remands and Vacates in Part EPA’s Boiler MACT and CISWI Standards

Posted Monday, August 15th, 2016

On July 29, 2016, the U.S District Court of Appeals for the District of Columbia Circuit upheld in part and vacated and remanded in part a trio of Clean Air Act (CAA) rules regarding boilers and incinerators in United States Sugar Corp. v. Environmental Protection Agency. The court’s opinion addressed numerous challenges to the U.S. Environmental Protection Agency’s (EPA) national emission standards for hazardous air pollutants (NESHAPs) for major and area source industrial, commercial, and institutional boilers and process heaters (Boiler MACT), as well as new source performance standards and emissions guidelines for existing commercial and industrial solid waste incinerator (CISWI) units.

With respect to EPA’s major source Boiler MACT regulations, the court remanded EPA’s use of carbon monoxide as a surrogate for certain hazardous air pollutants, holding EPA failed to adequately explain its decision. The court also vacated the emission standards for certain source subcategories holding EPA failed to consider all appropriate units for analysis in setting those standards. The ruling, however, does not clearly identify all affected subcategories. It is possible that the parties may file motions seeking clarification from the court. Absent that certainty, written guidance from EPA explaining its understanding of the scope of the court’s opinion and its approach to implementation of the Boiler MACT pending further formal rulemaking is likely.

With respect to EPA’s area source Boiler MACT regulations, the court remanded two issues to EPA for lack of adequate justification. First, the court remanded EPA’s decision to exclude synthetic area source boilers from Title V permitting requirements. Second, the court remanded EPA’s decision to set maximum achievable control technology standards for mercury and polycyclic organic matter from some coal-fired boilers but not to set such standards for non-mercury emissions from those same boilers. Finally, with respect to EPA’s CISWI regulations, the court remanded to EPA and held that EPA must promulgate standards for cyclonic burn barrels and determine whether four other types of units fall within the statutory definition of CISWI.

Separately, the court upheld EPA’s regulations on a number of other issues. For example, where the CAA requires EPA to set emission standards based on the best performing sources in a subcategory, the court found EPA reasonably applied a “pollutant-by-pollutant” approach. Under this approach, EPA identified the best performing unit or group of units for each specific regulated pollutant and based emission standards for that pollutant on that unit or group of units. In contrast, challengers argued EPA should identify the best performing unit or group of units for all regulated pollutants in the aggregate and base emission standards thereon. Challengers argued that EPA’s approach results in a suite of emission standards that no single best performing source had ever collectively achieved. The court nevertheless upheld EPA’s approach.

In addition, the court found EPA reasonably excluded malfunctions in calculating emission standards based on achievable emission limits. Under the challenged rules, EPA addresses malfunctions thorough enforcement discretion on an ad hoc basis, considering good faith preventative and corrective action, and the root causes of the malfunction. Nevertheless, the court held malfunction events are not considered when setting emission standards based on the best performing units because the best performing sources are unlikely to have malfunctions.

For additional information contact Jon Harris Maurer.

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