On June 23, 2014, the United States Supreme Court decided by a 5:4 decision to invalidate EPA’s greenhouse gas rules applicable to the federal Clean Air Act PSD (Prevention of Significant Deterioration) program and Title V permitting regime. The court also invalidated EPA’s associated Tailoring Rule. At the same time, the Supreme Court upheld by a 7:2 margin EPA’s authority to require BACT analysis for greenhouse gases for “anyway” sources that already trigger PSD review or Title V on the basis of conventional pollutants.
The Supreme Court considered EPA’s interpretation of the Clean Air Act which typically requires industrial sources of air emissions to obtain a federal PSD permit if the facility has greater than 250 tons per year of emissions and to obtain a Title V permit if its potential emissions are over 100 tons. EPA had extended these programs to greenhouse gases (carbon dioxide, methane, etc.) but attempted to raise the 250/100 ton “trigger thresholds” to 100,000 tons per year in light of the large amounts of greenhouse gas emitted by industrial sources.
The Supreme Court ruled that EPA has no authority to change specific numerical limits chosen by Congress and should have interpreted the PSD and Title V programs to exclude greenhouse gases as triggering emissions. However, the court also ruled that large industrial facilities that already triggered PSD because of high emissions of conventional pollutants — such as combustion emissions (NOx) or solvents — could be subject to greenhouse gas rules and could be required to conduct a BACT analysis to determine if greenhouse gas emission controls are feasible.
Implications for Bakers
The Court’s core decision that greenhouse gas cannot be the sole trigger for PSD or Title V permitting is good news for bakers, as it confines the consequences of greenhouse gases — such as biogenic CO2 emissions from fermentation — to large sources that trigger PSD review anyway and already have Title V permits. However, the loss of the Tailoring Rule means that major sources that significantly change greenhouse gas emissions (e.g., thru process changes or product formulations) could inadvertently trigger PSD review. EPA will have to determine through a new rulemaking what constitutes a “significant” change in greenhouse gas emissions but that level is likely to be at 75,000 tons per year or possibly lower. As always, bakers should undertake an internal compliance review before making significant changes that could affect emissions levels, with particular emphasis on greenhouse gas emissions.
Interestingly, the Supreme Court decision may open the door for relief from EPA’s current approach to regulation of biogenic ethanol emissions from bread fermentation. Because the court stated clearly that EPA must adhere strictly to the 250 ton per year definition of major source in the Clean Air Act, EPA’s practice of using ethanol as an inexact proxy for solvent emissions (known as volatile organic compounds or VOCs) as a way to regulate ozone levels may be illegal under the strict interpretation announced by the Supreme Court. Facilities faced with Title V permitting or installing expensive catox control units may wish to consider this argument.
As with any federal environmental rule, the Supreme Court’s relaxation of the greenhouse gas standard will not displace more stringent measures that may be adopted by states to address climate change, such as California’s greenhouse gas cap-and-trade program. Similarly, EPA is proposing significant state-by-state greenhouse gas reduction targets under its Clean Power Plan for existing electricity generation plants, which may increase the cost of power to bakeries, but on the other hand, may eventually lead to energy efficiency programs that could subsidize retrofits or upgrades.