The Supreme Court yesterday reversed EPA’s “Tailoring Rule,” but affirmed EPA’s authority to regulate greenhouse gas (GHG) emissions under the Clean Air Act Prevention of Significant Deterioration permit program. Writing for a five-member majority, Justice Antonin Scalia ruled that EPA could not “tailor” the PSD statutory permitting thresholds to exclude small GHG emitters from PSD program requirements.
Under the CAA, new and modified facilities potentially emitting “any air pollutant” above certain amounts must obtain PSD permits. In the Tailoring Rule, out of concern that the statutory thresholds were so low that potentially millions of buildings and facilities would be required to obtain PSD permits, EPA ‘tailored” the statutory thresholds by making them much higher. The Supreme Court, however, said EPA could not modify the statutory thresholds. The Court ruled that a facility’s GHG emissions could not trigger a requirement to obtain a PSD permit, even though the statute provides that a facility emitting “any air pollutants” must obtain a permit. The Court said that, in this instance, “any air pollutant” did not include GHGs.
But the Court provided another avenue for EPA to regulate GHGs under the PSD program. The Court said that EPA could permissibly require what it termed “anyway” sources to adopt GHG Best Available Control Technology (BACT). “Anyway” sources are those that are required to obtain PSD permits because of their non-GHG emissions. In order to obtain a PSD permit, these sources must undertake BACT for their air pollutant emissions. The Court ruled that these BACT requirements could apply to an “anyway” source’s GHG emissions in addition to their non-GHG emissions.
Justices Breyer, Ginsburg, Sotomayor, and Kagan dissented to the part of the Court’s decision overturning the Tailoring Rule. Justices Alito and Thomas wrote a separate decision saying they would have ruled that GHGs should not be regulated under the PSD program at all.
EPA will need to revise its GHG permitting rules in light of the Court’s decision. Some question also remains as to whether the Court’s decision may affect EPA’s GHG new source performance standards (NSPS) rulemakings for electric generators. Despite EPA’s initial reaction that the decision will have no impact on the NSPS regulations, opponents of those regulations may take heart from some aspects of the Court’s decision interpreting EPA’s BACT authority (and perhaps by implication its NSPS authority) as more limited than EPA may currently expect.
The Supreme Court’s decision is available here: UARG v. EPA.