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D.C. Circuit Vacates EPA’s Maximum Achievable Control Technology (“MACT”) Emissions Standards for Brick and Ceramic Kilns

Beveridge & Diamond, P.C., April 2, 2007

Overview

On March 13, 2007, the United States Court of Appeals for the District of Columbia Circuit ruled, in Sierra Club v. EPA, 2007 U.S. App. LEXIS 5749, No. 03-1202 (D.C. Cir. March 13, 2007), that the Maximum Achievable Control Technology (“MACT”) standards set by EPA restricting emissions from brick and ceramic kilns violated the Clean Air Act.  The Court vacated the standards in their entirety and sent them back to EPA to be rewritten.  The court relied on its prior rulings in Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855 (D.C. Cir. 2001) and National Lime Ass’n v. EPA, 233 F.3d 625 (D.C. Cir. 2000) to hold that the emissions “floors” EPA established in May 2003 for brick and ceramic kilns violated Section 112 of the Clean Air Act in several respects.  The ruling is expected to have a broad impact on other MACT standards set by EPA using the same or similar methodologies. 

Background

The Clean Air Act requires EPA to set emissions limits for hazardous air pollutants (“HAPs”) from major stationary sources.  42 U.S.C. § 7412(b), (c)(1)-(2).  EPA must “require the maximum degree of reduction in emissions . . . achievable for new or existing sources,” taking into consideration the cost of achieving the reduction, any non-air quality health and  environmental impacts, and energy requirements.  § 7412(d)(2).  Supplementing this standard based on “achievable” emissions reductions, the Clean Air Act also sets minimum stringency requirements (known as “MACT floors”), requiring that EPA’s MACT standards be no less stringent than the degree of emission control “achieved” by the best performing existing sources.  § 7412(d)(3).  For existing sources, the  MACT floor is based on the average emission limitation achieved by the best performing 12 percent of existing sources in the same category.  Id.  For new sources, the MACT floor is the level achieved by the top performing existing source in the category.  Id.

The Sierra Club Decision

Reviewing EPA’s implementation of these standards, the court in Sierra Club reinforced its holding in Cement Kiln that MACT floors must “reflect what the best performers actually achieve” and that EPA may not take into consideration whether the floors are actually “achievable by all sources using MACT technology.”  Sierra Club v. EPA, 2007 U.S. App. LEXIS 5749 at *10.  In setting the MACT floor for large tunnel brick kilns, EPA had chosen to exclude sources using the best-performing technology (“non-DLA” technology) from its final analysis, because of impacts on productivity and because retrofitting all existing kilns with non-DLA technology was not technically feasible.  Id. at *10-11.  The resulting MACT floor was based on the technology used by the best performers in the remaining group, which was the second-best performing technology overall from an emissions reduction standpoint (“DLA” technology).  Relying on its holding in Cement Kiln that floors must be based on emissions levels actually achieved by the best performers, and may not be tempered by considerations of whether those emissions levels are achievable by all sources, the court found this approach unlawful.  Id.

The court also invalidated EPA’s method for accounting for variability in emissions controls.  Because emission levels from all sources fluctuate from day to day, yet each source must meet the standard every day under all conditions, EPA had set the MACT standards at the highest emission level for existing sources using the DLA technology, rather than the average emissions level of the top-performing twelve percent.  Sierra Club at *13.  EPA relied on a 2004 decision, Mossville Environmental Action Now v. EPA, 370 F.3d 1232 (D.C. Cir. 2004), which held that floors may account for variability and approved the use of a similar approach for estimating variability.  Here, however, the court held that this “worst performer” approach was not lawful unless supported by factual data showing it to be a reasonable estimate or predictor of the actual variability of the best performers, as was shown in the Mossville case.  Sierra Club at *13-14.  Simply demonstrating that all sources have variability, as EPA had done here, was not sufficient. 

The court likewise found fault with EPA’s practice of setting MACT standards based on technology alone, while ignoring non-technological factors affecting emissions levels, such as proximity to cleaner clay sources.  EPA justified its technology-driven approach by arguing that it lacked the data to quantify such effects and that the performance analysis under the Clean Air Act focuses on deliberate steps taken to reduce emissions, not mere “happenstance.”  Id. at *15-16.  The Court found that these arguments had already been rejected in the Cement Kiln and National Lime II decisions and ruled that EPA could not set floors based “exclusively on technology” if the resulting standards did not reflect the actual “average limitation[s] achieved” because of non-technological factors.  Id. at 16.  The court reiterated that the standards must be based on emissions levels actually achieved by the best performers, not the emissions levels achievable by the best-performing control technology in all circumstances.

The court also found unlawful EPA’s setting of “no control” floors for categories where the best performers used no emissions control technology, an approach the court had previously rejected in the National Lime II case.  The court reiterated that EPA has a statutory obligation to set emissions standards for each listed HAP, whether or not the best performers used pollution control technology.  Id. at 16-17.  Finally, the court vacated EPA’s use of “work practice” standards instead of emissions floors -- specifically, the use of clean-burning fuels -- for certain categories of kilns.  The Clean Air Act allows EPA to set work practice standards instead of emissions standards in certain situations, such as when measuring emission levels is technologically or economically impracticable.  § 7412(h)(1).  The court ruled that EPA had not determined that measuring emissions was impracticable, only that the data were not available, and thus that EPA could not substitute work practice standards for emissions floors.  Sierra Club at *17-18.  The court also noted that the work practice standards adopted by EPA would have no impact on emissions because the kilns in question already used clean fuels.  Id. at *18.

Conclusion

In sum, in Sierra Club the court repeatedly rebuked EPA for failing to conform with the Clean Air Act and for failing to heed the court’s prior rulings interpreting the requirement that MACT floors be set based on emissions achieved by the best performers, whether or not those results are achievable by all sources. This ruling will likely require EPA to abandon or revise its current MACT approach to setting hazardous air pollutant standards, at least where the MACT approach does not result in emissions levels equivalent to the results achieved by the best performers. Indeed, on March 26, 2007 EPA filed a motion in another D.C. Circuit proceeding,
NRDC v. EPA, No. 04-1385, requesting that the technology-based emissions standards and compliance deadlines EPA set for institutional boilers be vacated so that EPA can establish new standards consistent with the Sierra Club ruling.  The viability of all similar technology-based MACT standards is now highly uncertain, and new, more stringent standards may be required in light of the Sierra Club decision.

Furthermore, as EPA argued in Sierra Club, MACT floors based solely on results achieved by the top performers may lead in practice to stringent emissions standards that are not technically or economically feasible for many facilities, creating problems both for EPA and the regulated community.  One possible solution to this problem is noted in a concurring opinion by Judge Williams.  After describing the “paradox” contained in the Act, whereby the MACT “floors” based on results “achieved” by best performers under § 7412(d)(3) may in some cases be more stringent than the standard of what is “achievable” under § 7412(d)(2), Judge Williams points out that EPA may be able to resolve such situations through its ability to designate various categories of sources under § 7412(d)(1).

For more information please contact David Friedland (dfriedland@bdlaw.com, 202-789-6047) or David Barker (dbarker@bdlaw.com, 202-789-6050).

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