Bottom Line on SCOTUS Greenhouse Gas Decision

July 14, 2014

On June 23, the US Supreme Court issued a decision in a case challenging the US EPA’s authority to regulate Greenhouse Gases (GHG) as air pollutants.

The Clean Air Act, established by Congress in 1970, authorizes the US EPA to require different types of permits (PSD construction permits and Title V operating permits) for most facilities that emit more than 250 tons per year of air pollutants and for certain others that emit more than 100 tons per year. With respect to traditional air pollutants like soot, CO, lead, sulfur, and nitrogen, only a few thousand facilities in the US exceed these thresholds.

Greenhouse Gases Added in 2011

In 2011, the US EPA determined that Greenhouse Gases (GHGs) meet the Clean Air Act definition of “air pollutant.” This created a unique issue: Given an emission threshold of 100 or 250 tons per year for greenhouse gases, a large number (possibly millions) of facilities would be burdened by the requirements of Clean Air Act permitting rules, even those that do not emit any other regulated air pollutants. To reduce the number of facilities affected, the EPA tailored its threshold for GHGs, effectively regulating only facilities that emit more than 100,000 tons per year of these pollutants.

By tailoring the threshold, EPA limited the number of affected facilities to mostly the few thousand that were already regulated under the Clean Air Act for emitting other air pollutants. Further, EPA has stated that these few thousand facilities were responsible for more than 80% of the GHGs sent into the atmosphere and that tailoring the threshold was therefore an effective way to reach only the facilities that contribute the most to GHG pollution.

The Supreme Court Decision

Opponents of these GHG regulations argued successfully in front of the Supreme Court that the EPA overreached its authority by tailoring the GHG emission limit to 100,000 tons per year. In effect, opponents argued that if EPA regulates emissions of Greenhouse Gases, it must regulate these emissions in the way Congress explicitly requires-by using the Clean Air Act’s 100 or 250 tons per year thresholds, not a tailored number chosen by the Administration. EPA has already agreed that regulating GHG emissions in this way would create an unrealistic administrative burden on both the regulated entities and the regulators.

In lieu of allowing the EPA to use its tailored threshold, the Supreme Court authorized the EPA to regulate GHG emissions only at the facilities that emit more than 100 tons per year of the air pollutants already regulated under the PSD and Title V programs. This way, only the few thousand facilities previously subject to the Clean Air Act rules are affected, and no facility is regulated for emitting only greenhouse gases.

Uncertainty Remains

Given the Court’s decision, there is still some uncertainty as to how EPA will move forward to establish Best Available Control Technology (BACT) requirements for GHGs under the existing PSD and Title V permit programs.

The Court’s decision did not in any way remove or limit EPA’s authority to collect data about national GHG emissions under the Mandatory Greenhouse Gas Reporting program (40 CFR 98).

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