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Affirmative Defenses and Startup, Shutdown, and Malfunction – Where Are We Headed in 2026?
In 2025, the United States Court of Appeals for the District of Columbia Circuit made an important decision regarding a highly contested issue: affirmative defense provisions applicable to excess emissions that occur during emergency events. SSM Litig. Grp. v. EPA, 150 F.4th 953 (D.C. Cir. 2025). The treatment of excess emissions during emergencies, along with related provisions dealing with startup, shutdown, and malfunction (SSM) events, have a long and somewhat tangled history under the Clean Air Act (CAA or the Act). In short, the concept that emission standards should apply on a continuous basis has been pitted against the practical reality that industrial facilities experience operational conditions, including unavoidable upsets, which may result in excess emissions. This tension has caused confusion and risk for regulated sources, while EPA policies have shifted over time and important decisions from the D.C. Circuit have further refined the regulatory and enforcement landscape under the Clean Air Act.
Beginning in the 1990s, EPA promulgated a mix of SSM exemptions and affirmative defenses in state implementation plans (SIPs), Title V operating permits, and federal technology-based standards. These provisions recognized the potential infeasibility of complying with numeric emission limitations during SSM and upset events and instead required sources to comply with good operating practices to minimize emissions during such events. However, in 2008, the D.C. Circuit rejected what it characterized as “blanket” SSM exemptions in emissions standards promulgated under Section 112 of the Act as incompatible with the Act’s requirement for continuous emission limitations under Section 302(k). See Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008). EPA responded in a manner that many regulated sources regarded as an overcorrection; by embarking on a campaign to remove SSM provisions from all CAA categorical standards (not just the general provisions of Subpart A of Part 63 which were the focus of the Sierra Club decision) and by targeting similar provisions in SIPs. Later, in 2014, the D.C. Circuit held in NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014) that EPA could not include affirmative defense provisions in emissions standards applicable to Portland cement facilities promulgated pursuant to Section 112 because such provisions intruded on courts’ exclusive authority to assess penalties in civil suits brought under the Act. Again, EPA interpreted this decision broadly and set out to remove affirmative defense provisions from SIPs and state and federal operating permit programs. Specifically, EPA issued “SIP Calls,” wherein it required states with SSM exemptions or affirmative defense provisions to revise their SIPs and remove such provisions. In addition, EPA finalized a rule rescinding the affirmative defense provisions in its own Title V operating program regulations. See 88 Fed. Reg. 47029 (July 21, 2023).
EPA’s aggressive rollbacks of SSM and affirmative defense provisions triggered a wave of litigation. In 2024, the D.C. Circuit partially vacated EPA’s SIP Calls in Environ. Comm. Fl. Elec. Power v. EPA, 94 F.4th 77. The court’s holding focused primarily on the exact language of CAA Section 110 which requires SIPs to include “enforceable emission limitations and other control measures . . . as may be necessary and appropriate to meet the applicable requirements of this chapter.” CCA § 110(a)(2); 42 U.S.C. § 7410(a)(2) (emphasis added). In this respect, the court found that EPA failed to analyze whether the SIP provisions at issue could qualify as “other control measures” that are “necessary or appropriate”—or, conversely, whether operation during SSM is “necessary and appropriate”—in order for the states to meet the requirements of the Act. 94 F.4th at 101. For this reason, the court determined that EPA’s “blanket call of automatic [SSM] exemptions” was inappropriate. The court applied the same logic to vacate EPA’s SIP Calls as they pertained to “director’s discretion provisions” that give state officials discretion to grant SSM-related exemptions, as well as provisions containing “complete affirmative defense[s] to an action brought for non-compliance.” Id. at 111, 114.
The Florida Electric court’s partial vacatur of EPA’s SIP calls does not appear to be an unrestricted endorsement of federal or state rules containing automatic exemption, director’s discretion, or affirmative defense provisions as being in conformance with the Act. Most significantly, the broader question of whether affirmative defense provisions comport with the Act was analyzed more recently, in the September 2025 SSM Litigation Group decision. There, the D.C. Circuit reversed EPA’s recission of the federal Title V operating permit program affirmative defense provisions, finding that the Agency acted arbitrarily. Notably, the Court distinguished between “complete” affirmative defenses and ex ante exemptions and found that the former are permitted by the statutory language of the CAA because they do not “render an emission limitation non-continuous,” but rather serve as a complete “defense to liability.” 150 F.4th 593, 600 (D.C. Cir. 2025). Conversely, the court reiterated that ex ante exemptions are impermissible because they “suspend[] emission standards during certain times,” consistent with the court’s previous holding in Sierra Club. Id. In a Petition for Rehearing En Banc, environmental intervenors argue that EPA’s logic with respect to complete affirmative defenses versus ex ante exemptions “draws on a distinction without a difference.” See Environmental Respondent-Intervenors’ Petition for Rehearing En Banc at 9, SSM Litig. Grp. v. EPA, No. 23-1267 (D.C. Cir. Oct. 20, 2025).
However, EPA’s stance under the current administration appears to align with the D.C. Circuit and with the industry challengers to the 2023 SIP rule. In opposing the Petition for Rehearing En Banc, EPA stated:
In summary, the panel opinion makes clear that EPA may promulgate, approve, or otherwise allow for a “complete affirmative defense” that “relates to the antecedent question of liability” rather than “the judiciary’s authority to award ‘appropriate civil penalties’” if there is such liability, Op. at 10, and that such defenses do not “render an emission limitation non-continuous” in violation of the Clean Air Act, id. at 13. Thus, EPA may restore the complete affirmative defense provision that EPA had removed from the title V regulations and need not object to the issuance of title V permits that contain complete affirmative defenses for this reason, see 42 U.S.C § 7661d(b), nor should EPA disapprove any complete affirmative defense contained in a state implementation plan submission that otherwise meets applicable Clean Air Act requirements, see id. § 7410(k)(3). EPA likewise is not prohibited from including complete affirmative defenses in its national emission standards. See id. §§ 7411, 7412.
Respondent’s Opposition to Respondent-Intervenors’ Petition for Rehearing En Banc at 6, SSM Litig. Grp. v. EPA, No. 23-1267 (D.C. Cir. Dec. 12, 2025).
EPA’s position here, and the D.C. Circuit’s subsequent denial of rehearing, No. 23-1267, 2026 WL 20227 (D.C. Cir. Jan. 2, 2026), is good news for Title V permittees and sources regulated by categorical standards under Sections 111 and 112 of the Clean Air Act. The SSM Litigation Group decision has brought back to life the very practical reality that excess emissions during emergency events may be excused under certain conditions.
Moving forward, EPA and state agencies will be on solid ground in implementing narrowly tailored, complete affirmative defenses applicable to excess emissions during emergency events. Likewise, EPA appears poised to rethink its aggressive campaign of removing SSM provisions from categorical rules under the Clean Air Act. EPA already appears to be shifting toward promulgating work practice standards, rather than emission limitations, during periods of SSM. Indeed, EPA recently proposed such a standard within the National Emission Standards for Hazardous Air Pollutants (NESHAP) governing Hazardous Waste Combustors (HWCs), finding that a work practice standard is appropriate during periods of SSM “where it is not feasible to accurately measure emissions.” See 90 Fed. Reg. 50814 (Nov. 10, 2025).
Further, although the HWC regulations do not currently contain any affirmative defenses applicable to periods of SSM, EPA requested comment on whether and how it should establish regulations within the HWC rules and other standards promulgated pursuant to Sections 111 and 112 of the Act in response to the D.C. Circuit’s SSM Litigation Group decision. Id. at 50847.
It’s a new year for SSM and affirmative defenses, and additional regulatory developments may be on the horizon. In the meantime, Title V facilities should take advantage of available protections and review existing permit and SIP conditions to evaluate whether SSM or affirmative defense protections may apply, and seek to ensure those provisions are satisfied should an operational upset occur that may affect compliance with emission limitations.
Feel free to contact Carol McCabe or Kelly Hanna with any questions you might have about these issues.
