On March 16, 2018, the D.C. Circuit Court of Appeals partially upheld and partially rejected an EPA rule known as the “Boiler MACT.”  Officially named the “National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters,” it regulates the emissions of certain types of air pollutants known as “hazardous air pollutants” from boilers located at “major sources” of those pollutants.  EPA issued the rule in several different rulemakings, due to the fact that the agency decided to reconsider a few provisions several times along the way.  As a result, the litigation over the rule became very complicated.  Sierra Club challenged numerous provisions of the rule, claiming that they failed to comply with the Clean Air Act.  Most of those challenges were resolved in a 2016 decision, but the court had reserved two issues that were finally decided this week—namely Sierra Club’s challenges to EPA’s carbon monoxide (CO) limits for certain boilers and the startup and shutdown work practices.  Specifically, Sierra Club alleged that (1) EPA failed to adequately justify its decision to make CO limit less stringent (130 ppm), and (2) EPA’s qualitative “work practice” standards during startup and shutdown are unlawful.

On the first challenge, the court reaffirmed that EPA may use surrogate pollutants like CO to regulate hazardous air pollutants, provided the resulting limits are reasonably calculated to control the relevant HAP.  However, the court was critical of EPA’s reasoning regarding the correlation between CO and the HAPs (in particular, formaldehyde), and held that EPA had not sufficiently justified its conclusion that HAP could not be reduced any further once CO emissions reached 130 ppm.  Because EPA had reached that conclusion based on data that the agency admitted to be unreliable, the court found that EPA’s conclusion was not reasonable.  Importantly, the court did not vacate the 130 ppm limit but remanded to EPA to reconsider its decision to adopt a 130 ppm CO limit.

On the second challenge, in which Sierra Club contended that EPA’s decision to retain an alternate, shorter period for startup, dismissed Sierra Club’s arguments.  In short, the court held that the approach EPA used to estimate how long the class of industrial boilers would remain unstable at startup was reasonable, even though it allowed boiler owners an option of a 4-hour startup.  In upholding the provision, the court also concluded that the standard of “as expeditious as possible” is a meaningful constraint despite its generality because each source must create a written startup and shutdown plan and is subject to ongoing reporting and recordkeeping and other aspects that impose other substantive requirements such as the use of clean fuels at startup.

Some of the arguments before the D.C. Circuit in the Boiler MACT case may also have relevance to other pending Clean Air Act litigation and rulemakings, including litigation regarding the startup shutdown work practice standards EPA established in the Mercury and Air Toxics Standards for electric generating units.  In addition, the case may also have implications for states subject to the Startup Shutdown Malfunction SIP Call.