EPA Statement Regarding Scope of Startup, Shutdown and Malfunction Exemption

September 8, 2009
Client Alert Newsletter September 2009

In promulgating categorical National Emission Standards for Hazardous Air Pollutants ("NESHAPs") under Section 112 of the Clean Air Act, the U.S. Environmental Protection Agency ("EPA") included regulatory provisions, which generally afford relief from emission standards during startup, shutdown and malfunction ("SSM") events, to the extent that the source satisfied certain regulatory requirements. On December 19, 2008, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision vacating certain aspects of the regulatory relief afforded by EPA for SSM events. In particular, the Court held that EPA had acted contrary to the express requirements of Section 112 in allowing sources to exceed NESHAP requirements during SSM events. Further, the Court denied motions for rehearing relative to its ruling.

On July 22, 2009, EPA issued a statement regarding the status of the relevant regulatory standards in the face of the Court's decision. In short, EPA stated that the relevant SSM provisions of the NESHAP requirements remain in effect, pending issuance by the Court of a mandate in the underlying court proceeding. EPA went further to state that the Court's expected mandate would render the SSM provisions null and void, immediately eliminating the relief previously afforded regulated sources during SSM events, to the extent that such relief arises from the general SSM regulations included within Subpart A of the NESHAP regulations.

Certain categorical NESHAP standards, however, include specific regulatory standards providing that emissions limitations do not apply during startup or shutdown events, or during expressly authorized periods of maintenance not to exceed a specified duration. EPA's July 22, 2009 letter states that EPA does not currently interpret the Court's December 2008 opinion as having any effect on the relief provided by these specific regulatory provisions. Accordingly, EPA will apparently take the position that such specific regulatory provisions—providing relief from NESHAP emission standards under specifically defined conditions—remain in effect even following issuance of the Court's mandate.

The Court's mandate was expected to be issued by August 6, 2009, but prior to its issuance, EPA filed a motion asking the Court to stay its order vacating the rule for an additional 60 days to provide the affected industries and EPA additional time to work out compliance issues. Several affected industry groups also filed a motion with the Court seeking a stay while they appeal the case to the Supreme Court.