In February, the US Environmental Protection Agency (EPA) signed a proposed rule that requires states to virtually eliminate longstanding, previously EPA-approved air rules governing emissions from “startup, shutdown, or malfunction” (SSM) events. These rules are relied on by all types of emission sources across the country.

While the rules at issue differ somewhat from state to state, SSM provisions are generally designed to allow emissions in excess of otherwise applicable state-emission limits under certain limited circumstances. They represent a recognition by the states that certain excess emissions are unavoidable given the limits of the units’ design and control technologies. If finalized as proposed, this rule will have far-reaching implications for regulated industries in the affected states and will likely require the addition of new emission controls in the future.

The proposed rule responds to a petition for rulemaking filed by the Sierra Club in 2011, which claimed that the SSM regulations in 38 states and the District of Columbia violate the federal Clean Air Act and current EPA policy. Sierra Club asked EPA to undertake a rulemaking to eliminate the state SSM rules or, at a minimum, require states to revise the rules to conform to EPA’s current interpretation of the Act.

EPA is proposing to use its SIP Call authority under Section 110(k)(5) of the Act to recall the SSM provisions in 36 states and require those states to revise their provisions consistent with the proposed rule. The proposal would establish that all excess emissions are violations of otherwise applicable state emission limits. EPA would authorize states to revise their rules to allow a very limited defense to enforcement for excess emissions from unavoidable malfunctions, but the defense would only apply to civil penalties. Even if an affected facility qualified for the defense, it would not preclude injunctive relief – such as the requirement to install new pollution control equipment or process changes to prevent the emissions in the future.

Perhaps more importantly, as proposed, the rule would eliminate the exemption as applied to planned startups and shutdowns. That is, EPA will not allow any state to provide an affirmative defense for excess emissions resulting from planned unit startups or shutdowns. All excess emissions during these events would be considered violations of the Clean Air Act subject to both civil penalties and injunctive relief. Thus, if finalized as proposed, stationary sources located in the 36 states covered by this rule may face significant compliance challenges in the future and will be at substantially increased risk of federal, citizen and state enforcement.

Once the final rule is published in the Federal Register, states will have 18 months to complete the required rule revisions and submit them for approval. EPA notes that if states fail to submit revised rules, they will be subject to a “Federal Implementation Plan” (FIP) from EPA and additional sanctions. EPA is currently under a consent decree to issue the final rule by August 27, 2013. If EPA publishes the final rule in August, state rules would be due to EPA by February 2015. Existing state SSM rules will remain in effect until revised rules are approved by EPA or until a FIP is in place. Despite the far-reaching effect of this proposed rule, EPA is only providing 30 days for public review and comment once it is published in the Federal Register.