DC Circuit overturns EPA stricter emission standards for newer industrial boilers

WASHINGTON (CN) — A D.C. Circuit panel sided with the U.S. Sugar Corporation on Tuesday, finding the U.S. Environmental Protection Agency had wrongfully classified industrial boilers under a stricter standard for sources of hazardous pollution. 

In a 2022 rule, the EPA defined industrial boilers as new sources rather than existing sources of pollution, even though the boilers at issue were built four years before the relevant emission standards were proposed in August 2020. 

Boilers burn materials like coal, paper and agricultural waste to generate energy while emitting pollutants like mercury, carbon monoxide, hydrogen chloride and other particulate matter. 

The three-judge panel, made up of U.S. Circuit judges Robert Wilkins, Gregory Katsas and Justin Walker — a Barack Obama appointee and two Donald Trump appointees, respectively — found the EPA’s 2022 rule, intended to remedy a 2010 rule, deemed all boilers built in the intervening decade are “forever new.”

In the panel’s per curiam opinion, the judges applied the Supreme Court’s recent decision in Loper Bright v. Raimondo, which overturned the long-standing legal doctrine known as Chevron deference that required judges to defer to a federal agency’s interpretation of a statute. 

Under Loper, the D.C. Circuit panel had to apply the best reading of the Clean Air Act, rather than defer to the agency’s expertise on the environmental law. 

The EPA argued that it was right to define any boiler constructed after June 4, 2010, as a new source of pollution, as the 2022 rule was merely revising certain standards the appellate court had deemed invalid following a challenge to the 2010 rule. 

The panel found otherwise, ruling that whether a source is new or not should rely on the specific standards under review were first proposed, not when the unamended standards were proposed. 

“Sources built before the amended standards were first proposed must meet less-stringent standards tied to the emissions from already-operating sources, and they have some time to retrofit their boilers,” the panel wrote.

The court detailed how the EPA had tried several times to create new emission standards for industrial boilers in 2004 and 2011. The 2004 rule was vacated by D.C. Circuit, leading the agency to try again six years later, resulting in 202 emission standards for new and existing boilers. 

Industry and environmental groups both challenged the 2010 rule, but one challenge, also brought by the U.S. Sugar Corporation, led the D.C. Circuit to find that the EPA had wrongfully excluded certain boilers when basing the new standards on the practices and technologies of existing boilers. The ruling rendered 34 0f the total 202 standards invalid. 

The D.C. Circuit allowed the invalid standards to remain in place while the EPA worked to revise them. Those efforts culminated in the 2022 rule. Under the new rule, the EPA classified boilers built after June 4, 2010, as new boilers. 

While the EPA worked to correct the standards in the aftermath of the D.C. Circuit’s 2016 decision, the U.S. Sugar Corporation began construction on a new boiler in Clewiston, Florida, which burned bagasse — the pulp left over after extracting juice from sugarcane. The new boiler replaced three older and more polluting boilers. 

When the boiler was completed in 2019, it complied with the strictest standards for new boilers under the EPA’s 2011 rule. The sugar company argued it was constructed “with state-of-the-art technology” and therefore was the “best-controlled” bagasse boiler in the country. 

The panel wrote that, under the EPA’s revised standards, the new boiler already satisfied the revised standards for existing boilers but was deemed a new boiler by the EPA.

“Under this regime — whose logic suggests that boilers built after June 4, 2010 are forever ‘new’ — the U.S. Sugar Corporation must spend tens of millions of dollars retrofitting Boiler No. 9,” the panel wrote. 

The panel noted the sugar company had spent $65 million to construct the boiler and that the industry groups in the case 0151 the American Forest & Paper Association, the American Wood Council and the Council of Industrial Boiler Owners — represented members who have also needed to spend millions to retrofit their boilers. 

In conjunction with the industry challenge, a coalition of four environmental organizations led by the Sierra Club challenged the EPA’s decision to use pre-2013 data when revising the 34 new standards. 

The EPA argued the pre-2013 data was appropriate as it would ensure consistency across all 202 of the 2011 standards. The panel found the agency’s exclusion of post-2013 data made some of the 34 new standards less strict than they would have been with 2020 data. 

In the panel’s view, that decision did not violate the Clean Air Act and therefore did not require judicial review. 

As part of the ruling, the panel temporarily enjoined the EPA’s 2022 rule in regard to its definition of sources constructed or reconstructed before August 24, 2020, as new sources of pollution. 

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