Environmental -- 2016

U.S. Sugar Corp. v. EPA   (D.C. Circuit)

Challenging EPA's boiler MACT regulations

On April 29, 2011, the NAM joined with 12 other associations asking a federal court to review EPA's Boiler MACT (Maximum Achievable Control Technology) standard. These rules regulate emissions of hazardous air pollutants generated by boilers. They have the potential to dramatically impact the U.S. economy and impose enormous costs on key industrial sectors. We challenged the rules to ensure that, if EPA fails to reconsider its actions, a court can review its actions. The lawsuit, filed by a coalition of associations including the NAM, was consolidated with U.S. Sugar Corp. v. EPA (D.C. Cir.). A statement of legal issues in the case were filed on July 8. On August 3, the D.C. Circuit ordered this case to be held in abeyance indefinitely.

We also filed a suit challenging EPA's rule establishing stricter emissions limits on commercial and industrial solid waste incineration (CISWI) units. For details, see American Forest & Paper Ass'n v. EPA (D.C. Cir.).

On May 18, 2011, EPA announced that it was reconsidering and delaying the effective dates for the Boiler MACT and CISWI rules. It published its final rule on Jan. 31, 2013, effective as of April 1, 2013, which prompted further lawsuits from both the business and environmental communities. Those suits were consolidated into this one.

The NAM and other business groups moved to vacate EPA's MACT standards developed using the Upper Prediction Limit (UPL) methodology and nine or fewer data points. The problem with EPA's approach stems from the statutory requirement that it set emissions limits based on the best performing 12% of combustion units. EPA did not have sufficient data to properly calculate an emissions standard based on this 12% requirement. Instead, it used the UPL methodology to estimate the emissions limits based on data gathered from only 9 units rather than a total of at least 26 units that it should have used to satisfy the 12% requirement. By asking for a voluntary remand, EPA is effectively conceding that the methodology used to calculate the UPL standards is flawed. We argued that pending EPA's reconsideration, the rule should not remain in effect. Otherwise, companies will have to satisfy costly compliance obligations that may become obsolete at the conclusion of EPA's reconsideration process.

We also asked that EPA supplement the record regarding this methodology, and that we proceed to briefing on the remaining issues in this case. On May 15, 2014, the D.C. Circuit denied our motion for affirmative relief but granted EPA’s motion to remand the MACT standards based on the UPL methodology. According to the remand, EPA has 60 days to provide further explanation of its use of the UPL methodology.

On August 12, the NAM and other industry petitioners filed our main brief on the merits of the remaining issues in the case. We challenged 5 flaws in the rule: (1) that EPA exceeded its authority in imposing an energy assessment requirement on portions of the facility that are not part of the defined source category (boilers and process heaters), (2) the emissions limitations are unlawful because they have not been achieved in practice, (3) the standards are not achievable because they were set without accounting for malfunctions, (4) EPA improperly established a numeric emission limitation for organic pollutants rather than a work practice as it has done in a comparable rule, and (5) EPA failed to justify its reversal of previously established health-based limits for hydrogen chloride.

On Dec. 17, 2014, the NAM joined in an industry brief with 24 other organizations in support of EPA's defense of its rules against 3 issues raised by environmental groups. First, we supported EPA's "Upper Prediction Limit" methodology to determine the proper value for best performing sources to meet over the full range of foreseeable operating conditions. Second, we supported the use of carbon monoxide as an appropriate surrogate for organic HAP emissions to determine combustion efficiency. Third, EPA appropriately subcategorized units based on the type of fuel burned and corresponding differences in boiler operation and design.

Oral arguments were held Dec. 3, 2015, in this and two companion cases involving boiler MACT and CISWI standards. A significant portion of the argument concerned EPA's failure to provide for malfunctions in the MACT and GACT rules.

On July 29, 2016, the court rejected all industry arguments, finding that the EPA's approach was reasonable. It agreed with several challenges raised by environmental groups, and ordered EPA to issue a regulation for cyclonic burn barrels and determine whether regulation is required for 4 other categories of incinerators. It also ordered the agency to provide further justification for some of its decisions.

Related Documents:
NAM Brief in Response to Environmental Petitioners  (December 17, 2014)
Opening Brief of Industry Petitioners  (August 12, 2014)
NAM Reply Brief in Support of Affirmative Relief  (April 17, 2014)
Shopfloor Blog  (May 9, 2011)
NAM Petition for Review  (April 29, 2011)
NAM Petition for Administrative Stay  (April 27, 2011)
Press Release  (February 23, 2011)


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