On July 29, the D.C. Circuit Court of Appeals issued a decision on challenges to three regulations promulgated by the U.S. Environmental Protection Agency (EPA or Agency): the Major Source and Area Source Boiler NESHAPs (National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial and Institutional Boilers and Process Heaters, 40 CFR 63 Subpart DDDDD, and National Emission Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commercial and Institutional Boilers and Process Heaters, 40 CFR 63 Subpart JJJJJJ); and the Commercial/Industrial Solid Waste Incinerators (CISWI) Rules (Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incinerator Units, 40 CFR 60 Subparts CCCC and DDDD).
A comprehensive summary of the Boiler MACT and CISWI requirements and rulemaking history can be found here.
Summary of the Court’s Decision
In its decision on the case (U.S. Sugar v EPA, which consolidated approximately 30 challenges by industry and environmental petitioners), the Court generally sided with the environmental community in vacating key elements of the rule, remanding others, and rejecting industry challenges to the energy audit requirement and handling of startups, shutdowns, and malfunctions in setting standards.
The following additional industry challenges were rejected by the Court:
- EPA’s decision to not address malfunctions in the MACT floors, or with work practice type standards, and to continue to require compliance with the MACT floors even during malfunctions. EPA continued to assert that it will use enforcement discretion on a case-by-case basis.
- EPA’s determination that the CISWI standards did take into account startup and shutdown in their development.
- EPA’s pollutant-by-pollutant (hypothetical composite) approach to setting MACT floors.
- Industry’s claim that limits set for small remote incinerators (SRIs) were arbitrary and capricious because the SRIs may have been burning wastes with lower levels of a particular pollutant during testing.
- The CISWI recordkeeping presumption. EPA confirmed that the CISWI rule requires that the owner or operator of a combustion unit that burns materials “not clearly listed as traditional fuels” keep records explaining how the materials meet the regulatory definition of “non-solid waste” and that failure to do so means, for the purposes of the rule, that "the operating unit is a CISWI unit."
- Industry’s claims that for SRIs, the type of waste being combusted should have been accounted for when setting the MACT floor. EPA contended both that industry did not provide enough data to prove this to EPA and that, regardless, waste segregation and recycling was possible for SRIs.
- Industry’s request for emissions averaging over multiple CISWI units in one facility. EPA considers each individual unit an affected facility.
However, there were several issues that were challenged by environmental petitioners but upheld by the court:
- Using work practice standards, instead of emission limits, for coal-fired boilers and for all units during startup and shutdown
- Using the statistical procedure called the “upper prediction limit” (UPL) to account for expected variability in emissions levels
- Using a 30-day rolling average to determine compliance for boilers
- Establishing fuel combustion-based subcategories for major source boilers
- Establishing generally available control technology (GACT) standards, rather than maximum achievable control technology (MACT) standards for some area source boilers
- Not setting more restrictive than floor level standards ("beyond the floor" standards) for CISWI units, citing excessive cost and insufficient data
- Not requiring regenerative thermal oxidizers in solid waste energy recovery units, based in part on the resulting increases in emissions of other pollutants that would occur, and increased energy demands.
- Not requiring dry sorbent injection and wet scrubbers for waste burning kilns, due to uncertainty regarding the appropriate control systems.
- Impermissibly changing the definition of “modified” under CISWI. The Court confirmed that EPA intended to treat “sources that change fuels or materials” under CISWI as “existing sources” only if “new source applicability” is not “triggered.”
In most cases where the Court sided with the environmentalists, the Court did not find EPA’s approach to be contrary to the statute, but instead remanded the provisions to EPA for further justification. The remanded provisions include the following:
- Using CO as a surrogate for non-dioxin/furan organic HAPs
- Excluding synthetic minor area source boilers from Title V permitting requirements
- Setting more lenient GACT standards, rather than MACT standards, for non-mercury emissions from coal-fired area source boilers
- Setting emission standards for cyclonic burn barrels (in CISWI) and determining whether burn-off ovens, foundry sand reclamation units, soil treatment units, and space heaters are CISWI units, and if they are, setting standards for them.
Finally, although the Court concluded that EPA reasonably created subcategories based primarily on the type of fuel used, the Court found that the calculation procedure used for some of the subcategories, which excluded certain high-performing units, could not be justified. While EPA allowed sources that combust at least 10 percent of a fuel to be considered part of a subcategory for which emissions limits were established, the agency declined to consider emissions from any source that burned less than 90 percent of the fuel when determining the best-performing sources for the purposes of setting the MACT floor for existing sources. For new sources, EPA declined to consider emissions from any source that did not burn 100 percent of the fuel.
That methodology excluded several of the best-performing sources within some subcategories, the Court said. Accordingly, the Court vacated the MACT emission standards for all major boiler subcategories “that would have been affected had the EPA considered all sources included in the subcategories.” However, the Court did not explicitly identify the specific standards that were vacated—it simply established the rules for vacatur. Reports in the media suggest that a large number of categories (and sources) would be affected by the vacatur.
Reconsideration petitions were due on September 12, 2016, and petitions were filed by EPA, environmental organizations, and industry (American Municipal Power Inc.). All of the petitioners requested a rehearing by the full D.C. Circuit as well as a rehearing on specific issues. EPA's petition for reconsideration focused mainly on the vacatur, asking the court to remand the rule to allow EPA to address the affected standards, rather than vacating them. In the petition, EPA identified the standards that the agency determined would be vacated by the Court's original opinion, indicating that 11 of the 33 standards for existing sources and nine of the 33 standards for new sources would otherwise be thrown out. EPA's list of standards vacated by the Court's ruling is reproduced below.
The environmental groups petitioned for rehearing on the issues of work practice standards and upper prediction limits. American Municipal Power, Inc. petitioned for rehearing on the issue of requiring compliance with MACT standards even during malfunctions.
If the Court agrees with EPA's petition (which we believe it likely will), the current limits will remain effective; however, whether the standards are vacated or remanded, EPA will go through another rulemaking which is likely to change the emission limits for some or all of the subcategories listed above. Meanwhile, both the remanded and vacated standards remain in effect while the additional legal action and rulemaking take place. Please contact your local Trinity office at (800) 229-6655 for assistance in evaluating whether this decision affects your facility.