EPA Makes CAA Affirmative Action SSM Revisions

The U.S. Environmental Protection Agency (EPA) is taking aggressive action to reinstate sweeping revisions to its affirmative defense and start-up, shutdown, and malfunction (SSM) exemptions under the Clean Air Act (CAA ) that would have profound implications for industry operations. Industry has two opportunities to provide comment: first, by commenting on the EPA’s proposed rule to remove affirmative defenses from its Title V operating permit regulations. (the deadline for comments is May 16, 2022), and second, by responding to a proposed Call for State Implementation (SIP) that would impose deadlines on the EPA to remove SSM provisions from ten states over the next two years. (the deadline for comments is May 11, 2022).

On April 1, 2022, the EPA re-proposed Obama-era regulations to remove provisions from its Title V business license regulations that allow industry to assert affirmative defenses for violations. CAA permits against upset and emergency broadcast releases. 87 Fed. Reg. 19,042 (April 1, 2022). The EPA originally proposed to repeal the long-standing affirmative defense provisions in 2016 under the Obama administration, but the Trump administration withdrew the proposal.

Now the EPA is looking to move forward with its original proposal once again. EPA accepts new comments on the proposal and will consider comments submitted as part of the 2016 proposal. Accordingly, EPA has indicated that comments previously provided regarding the 2016 proposal need not be updated. resubmitted. EPA anticipates that all current authorization provisions that include or recognize affirmative defense provisions would remain intact until renewed and would be removed upon removal.

For 30 years, federal CAA Title V business license regulations and the vast majority of SIP-approved state and tribal rules have included affirmative defense provisions that accommodate emergency situations. Emergency events involve “sudden and reasonably unforeseeable events beyond the control of the source” that inevitably result in emissions exceeding the technological limits of the permit. With a successful demonstration of the affirmative defense, a source can avoid or mitigate civil enforcement.

In the proposal, the EPA reaffirms its position that the affirmative defense provisions are “inconsistent with the CAA’s enforcement structure” and the views of the DC Circuit. The applicability and scope of the malfunction provisions were first challenged in 2008 by the DC circuit in Sierra Club vs. EPA, 551 F.3d 1019 (DC Cir. 2008), which argued that air toxics regulations issued under CAA Section 112 should apply on a continuing basis and, as such, SSM exemptions in existing MACT standards were invalid. Since then, the EPA has repeatedly attempted to narrow the scope of where industry can use malfunctions as a defense against liability. The EPA has sought to support rollbacks of long-standing positive defense provisions for malfunctions through a broad reading of NRDC vs. EPA749 F.3d 1055 (DC Cir. 2014), in which then-Judge Kavanaugh held that the affirmative defense provisions of 112 standards usurp the role of federal courts to determine whether penalties are “appropriate” for exceeding emission limits.

Even so, the two CC Circuit notices were limited to rules issued under CAA Section 112 (that is to say, MACT or NESHAP) and, on the face of it, does not extend to any other CAA program. The EPA’s use of these rulings to repeal affirmative defenses more broadly will certainly be challenged. This very issue is at the heart of the controversy over the legality of the EPA’s 2015 SSM SIP appeal, the legality of which was only recently addressed during oral argument in the key case, Environmental Committee of Florida Electric Power Coordinating Group, Inc. v. EPA(DC Cir., Case No. 15-1239).

On April 11, 2022, the Department of Justice released for public comment a proposed consent decree with environmental groups to proceed with the 2015 SIP call. The proposed consent decree would set a series of aggressive deadlines for the EPA removes SSM provisions from several state SIPs. See Sierra Club v. Regan, 87 Fed. Reg. 69 (11 April 2022). Separately, the EPA is reconsidering SSM SIP call waivers granted under the Trump administration to Iowa, North Carolina and Texas.

If EPA’s proposal to remove affirmative defense provisions from Title V operating licenses is finalized as written and EPA moves forward with its 2015 SIP call within the timeline proposed of the consent decree, the industry could see far-reaching implications. The discretion of emergency and force majeure civil enforcement attorneys for Title V permits would effectively be reduced, presumably now left to the jurisdiction of the federal courts under Kavanaugh’s opinion. The result, for practical purposes, would effectively make the CAA a strict liability law. While companies can always argue in court that the CAA does not permit strict liability and that unavoidable overages should not be construed as violations per se, the vast majority of CAA enforcement is conducted by state law enforcement agencies and rarely moves to state litigation or much more. less, federal court. Removing these defenses could also make the industry more vulnerable to lawsuits from citizens for unavoidable exceeding of emission limits. Industry will need to weigh these implications in its permitting approaches in an increasingly error-free environmental regulatory landscape.

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