Court Rules on Lawsuit over EPA’s Boiler MACT Regulation

On July 29, 2016, the U.S. Court of Appeals for the D.C. Circuit ruled on the lawsuits over EPA’s Boiler MACT (40 CFR Part 63, Subpart DDDDD) and Boiler GACT (40 CFR Part 63, Subpart JJJJJJ) regulations. The lawsuit was the consolidation of multiple suits from industry and environmental groups. The split of the suits from industry versus environmental groups was stated by the court to be approximately 50/50. In summary, the court rejected all the industry petitions and granted some of the petitions from environmental groups. The most significant aspects of this ruling pertain to vacating portions of the standard and remanding additional portions of the standard to EPA to provide further explanation.

Under the Boiler MACT regulation, boilers are divided into subcategories based on the type of fuel utilized and the configuration of the combustion unit. The emission standards subject to a particular boiler are dependent upon which subcategory the boiler is classified under. The emission standards set for each subcategory were determined by the EPA based on the average of the best performing boilers in that subcategory (commonly referred to as the MACT-floor). The environmental petitioners argued that there should not be separate subcategories and that EPA did not correctly set the emission standards in certain subcategories. The courts upheld the regulation on subcategories based on fuel types in that the EPA has this authority and nothing regarding the designation of subcategories was arbitrary or capricious. However, the courts did find that the EPA did not correctly set the MACT-floor emission standards. For some subcategories, EPA did not consider emissions from all boilers in that subcategory when determining MACT-floor for existing sources. Several sources excluded from the determination were the best performing sources in those subcategories. As such, the courts are vacating all MACT standards for all boiler subcategories that would have been affected had the EPA considered all sources in the subcategory. This means the affected portions of the standard will be cancelled when the court issues the mandate, and EPA will be required to develop new standards for the affected subcategories. The court has not yet identified which subcategories will be affected; this will be included with the mandate.

The court also sided with the environmental petitioners on using carbon monoxide (CO) as a surrogate for non-dioxin/furan organic HAPs, exclusion of synthetic minor (area) sources from Title V permitting requirements, and the use of GACT standards over MACT standards for non-mercury metals at area sources. For these items, the court has remanded these to the EPA, without a vacatur or stay. This means these items will remain in effect as currently written until the EPA can adequately explain the rationale for these requirements. Depending on the explanation, these conditions may remain as written or EPA could be required to revise the regulation.

The timeline for the vacatur and remanding are not yet known. All parties have the opportunity to petition a rehearing on any of the issues, after which the mandate will be issued. Upon issuance of the mandate, the case can only be appealed to the U.S. Supreme Court.

The complete opinion of the court is available on the U.S. Court of Appeals for the D.C. Circuit’s website:$file/11-1108-1627694.pdf

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