At the end of September, the Environmental Protection Agency (EPA) issued yet another memorandum regarding emissions resulting from startup, shutdown, and malfunctions (SSM) at stationary sources of air pollutants, such as refineries, manufacturing facilities, and power plants. This newest memo announces a return to the policy EPA announced in 2015, when it asked 45 states and local jurisdictions to change their locally written and previously EPA-approved rules. EPA’s goal in 2015 was to eliminate state rules that allow relief from penalties for “SSM” emissions. In 2020, the Trump EPA issued a memo allowing such rules under certain circumstances, but the newest EPA memo puts those rules back on the chopping block. This post provides a brief recap of the long-running debate over SSM emissions and a look forward into what is to come under EPA’s latest policy shift.

EPA’s new memo reverts to its 2015 policy, which says state rules that allow “exemptions” or “affirmative defenses” are inconsistent with a strict reading of the Clean Air Act and an expansive reading of two D.C. Circuit decisions. Nongovernmental organizations hail the new memo as a significant benefit to the environment, claiming the move will eliminate “loopholes” that allow unchecked pollution during SSM events. However, both seem to miss the point that “SSM” emissions are expressly defined to include only those that are “unavoidable.” Therefore, SSM emissions, by definition, cannot be simply eliminated, regardless of any fines or penalties imposed.

The Origin and Purpose of SSM Rules

SSM rules originate from a time when states were crafting their first “state implementation plans” (SIPs) under the Clean Air Act in the late 70s and early 80s. Back then, states realized that nearly all emission limits were based on data collected during normal, steady-state operating conditions, not during SSM events. Since SSM events can cause emissions to be difficult to measure, more variable, and sometimes higher, exceedances of limits designed for normal operation can be unavoidable. For instance, some pollution controls cannot operate during startup or shutdown because they depend on normal, steady-state operating levels and conditions to function properly. Most states decided that, under these circumstances, facilities should not be penalized with monetary fines as long as they can demonstrate that any exceedances could not have been prevented and were not due to improper design or operation. Facilities should not be fined, in other words, for failing to do the impossible, according to most states.

EPA originally agreed and approved states’ SSM rules for decades, including as recently as 2009. However, in 2008, the D.C. Circuit rejected EPA’s own SSM exemption for a hazardous air pollutant (HAP) rule written under Section 112 of the Clean Air Act. The court held that Section 112 requires EPA to make a specific showing before including its SSM provision in a Section 112 rule because it included a work practice requirement, a showing EPA made no attempt to provide. Later, in 2014, the D.C. Circuit also held that affirmative defenses cannot be applied in the Section 112 context, but noted in its decision that it did not confront whether affirmative defenses may be appropriate in a SIP adopted under Section 110.

EPA Seeks to Eliminate SSM Rules

In 2015, EPA seized on the D.C. Circuit’s Section 112-focused decisions and extended them to Section 110. At the behest of Sierra Club, which claimed in a petition that SSM rules are just loopholes for polluters, EPA asked states to get rid of them in a “SIP Call.” In doing so, EPA claimed all “emission limitations” must be met on a “continuous” basis (a strict reading of the Clean Air Act) and that affirmative defenses interfere with enforcement (a broad reading of the D.C. Circuit precedent under Section 112). The policy underlying the SIP Call ignored the stark difference between Section 112, a highly prescriptive provision governing EPA’s HAP standards, and Section 110, a highly flexible program intended to allow states to use any measures necessary in developing SIPs to meet air quality standards.

During the last administration, EPA decided that the differences between Sections 110 and 112 mattered, and that states could have SSM provisions so long as their SIPs, as a whole, were protective of air quality. Accordingly, EPA withdrew its SIP Call for three states and planned to re-evaluate the others one-by-one, but it did not withdraw the entire SIP Call. EPA’s newest policy memo marks a return to its 2015 policy and a recommitment to eliminating all SSM provisions from state rulebooks.

Looking Ahead

The impact of this policy re-shift will vary significantly from state to state. Here are a few of the possibilities:

  • EPA’s initial focus will be on the three states for which it withdrew the SIP Call during the last administration, namely Texas, North Carolina, and Iowa. EPA plans to initiate a new notice and comment action addressing the SSM provisions in each of these SIPs.
  • Next in line for review will be states that were subject to the SIP Call but have not yet reached resolution with EPA. A few states responded to the SIP Call by deleting their SSM rules, but many others either failed to respond or responded with rule revisions that EPA has not yet reviewed. Those states will get a closer look under this administration.
  • Finally, states that were not subject to the SIP Call may nevertheless have an SSM provision on the books. While perhaps last in line, these states may still face scrutiny.

Litigation Over the SSM SIP Call

EPA’s new memo is also likely to restart litigation over the SSM SIP Call, which has been held in abeyance for several years while EPA reconsidered its SSM policy. EPA has already told the D.C. Circuit that it plans to file a motion soon to propose a schedule for restarting the litigation. The case was fully briefed before it was put into abeyance, so all that is left is oral argument. Accordingly, the case could go from restart to finish in a relatively short amount of time (unless additional briefing is requested).

As a result, EPA will likely be implementing the 2015 SSM policy reinstated in its new SSM memo even as the policy undergoes legal review. That will leave the regulated community to wonder: Will facilities face fines for unavoidable emissions, or may states continue to waive penalties when compliance is impossible? Either way, the environment is unlikely to notice, since unavoidable emissions, by definition, will continue to occur regardless of any fines states are forced to impose.