EPA’s standards for hazardous air pollutant (HAP) emissions from industrial boilers have been controversial for nearly two decades. Ever since EPA first proposed “maximum achievable control technology” (MACT) standards for boilers in 2003, which were then entirely vacated by the D.C. Circuit, each new iteration of the rule has raised new legal issues and often foundered in court.
The latest set of revisions to EPA’s “Boiler MACT,” signed by Administrator Regan on July 21, is EPA’s attempt to address issues remanded by the D.C. Circuit in its 2016 U.S. Sugar decision. While the new rule focuses primarily on boiler-specific issues, the final rule notice also raises several broader issues that could have implications for other industries, which may send the rule back to court again.
Relying Solely on “Nonmonetized” Benefits
In the final rule notice, EPA admits that it does not have sufficient information to monetize the benefits of the HAP reductions associated with Boiler MACT. In fact, the only benefits of the rule EPA was able to convert into dollar values are ancillary reductions in particulate matter (PM), although EPA avoids characterizing those reductions as “co-benefits,” given the past controversy over that term. Despite its inability to monetize the benefits that the rule is intended to accomplish, EPA claims the costs of the rule are still worth those nonmonetized benefits.
This issue might sound familiar, as it has been at the heart of EPA’s efforts to justify its MACT standards for electric utility generating units, which EPA refers to as “MATS” (for “Mercury and Air Toxics Standards). In that context, EPA has made several attempts to compare costs and benefits to justify its determination that regulation of HAP from utilities is “appropriate and necessary,” a threshold finding that applies only to utilities. In 2015, the Supreme Court held that EPA must consider costs and benefits in making that determination, but did not reach the question of whether, when doing so, EPA may primarily focus on PM “co-benefits” that are not the primary target of the rule.
While Boiler MACT is not subject to the same threshold finding required for regulating utilities, EPA is still required by law to evaluate the impacts of its regulations, and a significant mismatch between costs and benefits may still be relevant to determining whether EPA has acted reasonably in setting its HAP standards. EPA’s willingness to claim that nonmonetized benefits justify costly new regulations for boilers (estimated by EPA to cost the industry over $200 million) indicates EPA may intend to do so for other industries as well.
Regulating Units Already in Existence as “New”
Another issue raised by the final Boiler MACT rule that has also come up with other industry-specific regulations is whether EPA must revise the trigger dates used to distinguish between “new sources” subject to more stringent limits and “existing sources” subject to less stringent requirements. EPA has decided not to revise those dates for Boiler MACT, instead choosing to apply the “new source” limits to units built or modified after 2010, which by now are more than 12 years old and could not have been designed with the latest standards in mind.
However, EPA suggests that it may act differently in other contexts and may decide to revise the trigger dates for “new” and “existing” sources where it deems that change to be appropriate. For example, EPA notes that the trigger dates should be updated with completely new rules, such as when a prior rule is entirely vacated (like the original 2003 Boiler MACT). However, when a rule is merely revised and not entirely replaced, EPA’s approach in this latest Boiler MACT rule suggests EPA may leave existing trigger dates in place, and thus apply “new source” limits retroactively to what in reality are “existing” units.
Other industries expecting new emission standards from EPA should take note of these broader issues raised by the new Boiler MACT final rule, as well as the results of any litigation to challenge them. For more information on EPA’s Boiler MACT or the broader issues raised by this rule, please contact Mack McGuffey and Melissa Horne.