On June 26, 2012, a three-judge panel of the D.C. Circuit Court of Appeals upheld four EPA rules related to the regulation of greenhouse gas (GHG) emissions under the Clean Air Act (CAA). The rules and related actions were challenged by state and industry petitioners in four related cases. (Lead case: Coalition for Responsible Regulation v. EPA,  D.C . Cir., No. 09-1322).

In a unanimous unsigned opinion, the three-judge panel denied challenges to the EPA’s Endangerment Finding, Light Duty Vehicle Rule, and application of the Prevention of Significant Deterioration program to GHGs. The court found that the agency’s actions were not arbitrary or capricious and affirmed that the agency’s interpretation of the Clean Air Act (CAA) was “unambiguously correct.”  The court also dismissed related challenges to the Tailoring Rule and Timing Memorandum for lack of standing.

Pursuant to Massachussetts v EPA, the Supreme Court held that EPA was required to undertake an endangerment analysis.  In December 2009, EPA found that greenhouse gases endangered public health and welfare. This finding triggers other regulatory obligations under the CAA, and therefore serves as the legal foundation for EPA’s GHG regulatory actions. The court denied claims that the EPA’s findings were arbitrary and capricious, deferring to EPA’s scientific judgments regarding endangerment and specifically approving EPA’s partial reliance on “major assessments” such as the Intergovernmental Panel on Climate Change. It also held that the Clean Air Act does not permit EPA to consider policy implications in this determination, contrary to the arguments of petitioners.

Similarly, the court rejected petitioners’ arguments that the EPA had discretion not to issue GHG emission standards for passenger vehicles in the Tailpipe Rule, holding that EPA was compelled by the CAA to issue regulations after finding endangerment. (Petitioners did not challenge the substance of the rule; auto manufacturers supported EPA in defending the regulations).

In its final ruling on the merits, the court upheld EPA’s longstanding interpretation on the applicability of the Prevention of Significant Deterioration (PSD) program, holding that EPA’s interpretation that the PSD section applies to “any air pollutant” regulated under the Clean Air Act was “unambiguously correct” given the text of the statute and the Supreme Court’s ruling in Massachusetts v. EPA. Petitioners had argued that a more narrow interpretation that would have excluded or limited PSD regulation of GHGs was required.  

Challenges to the Tailoring Rule and Timing Memorandum were dismissed for lack of standing, with the court finding that the petitioners failed to show that either rule caused them an “injury in fact” that could be redressed by vacating the rules. The court noted that the effect of the rules was actually to ease the compliance and administrative burdens of industry and state petitioners, in that the rules delayed permitting requirements and limited the number of sources subject to permitting at the current time. 

In summary, the decision strongly affirms EPA’s authority to regulate GHGs under the Clean Air Act.

Petitioners may now request an en banc hearing in front of the full D.C. Circuit Court of Appeals or review by the U.S. Supreme Court. In both cases, review is discretionary and requires support from judges in the respective courts. 

For more information about the petitioners’ challenges, see Debrief of the D.C. Circuit Court's Oral Arguments in GHG Cases. 

On January 11, 2012, EPA launched a new online data publication tool that provides the public with information on reported greenhouse gas (GHG) emissions in 2010.   The database currently covers nine industry groups, including 29 source categories, that directly emit large quantities of GHGs, as well as suppliers of certain fossil fuels and high global–warming-potential gases.  Power plants, petroleum refineries, and chemical plants were the largest sources of emissions required to report. As mandatory GHG reporting expands to more sources, the data from these will be made available in the online tool.

The original Mandatory Greenhouse Gas Reporting Rule was finalized on October 30, 2009, pursuant to authority under the FY2008 Consolidated Appropriations Act.  On November 19, 2011, EPA finalized a revised version of the rule, delaying reporting of 2010 GHG emissions data for several source categories from March 31, 2012, to September 28, 2012, in line with the reporting deadline for 2011 emissions data.  

On November 29, EPA issued a final rule for GHG reporting, including a six-month extension for several industrial sectors that were previously scheduled to begin mandatory reporting on March 31, 2012.  The move extends that deadline to Sept. 28, 2012, for facilities that include petroleum and natural gas systems, electronics manufacturing, industrial waste landfills, coal mining, industrial wastewater treatment and other installations. The August 4 proposed rule would also have required some industrial facilities to report twice, once for sources of pollution required to report in prior years, and again in September for sources reporting for the first time with 2011 emissions data.  EPA says the one-time delay avoids this requirement, in line with industry requests received in comments on the proposal. EPA also noted an aim to ensure that there is sufficient time for development and stakeholder testing of the electronic GHG reporting tool.

The final rule also sets a reporting threshold of 36.5 million tons per year of methane for underground coal mines, which EPA says will simplify reporting for the sector and exclude small mines from reporting. The proposed rule required reporting by all underground mines that are subject to quarterly or more frequent sampling by the federal Mine Safety and Health Administration (MSHA), regardless of size. In addition, the final rule makes a number of technical corrections and clarifications to reporting requirements across several industrial sectors.
 

On December 7, the California Air Resources Board (ARB) published an Advanced Clean Car package of regulations to be considered for adoption at the ARB meeting on January 26, 2012. The package, containing amendments to California’s Low Emission Vehicle and Zero Emission Vehicle regulations, will require car manufacturers to offer for sale in California an increasing percentage of low emission and zero emission vehicles by 2025, and are designed to help the state achieve its goal of reducing GHG emissions by 80% by 2050.

The proposed Low Emission Vehicle (LEV III) amendments are intended to reduce fleet-wide average emissions to super ultra-low-emission vehicle (SULEV) levels by 2025, and to raise the full useful life durability requirement from 120,000 to 150,000 miles. The LEVIII proposal includes more stringent particulate matter (PM) standards for light- and medium-duty vehicles, which will reduce the health effects and premature deaths associated with these emissions.  In concert with the LEV III requirements are proposed GHG emission standards, which closely align with the recent proposed federal GHG emissions and CAFE standards.  ARB estimates that its proposed GHG standards would reduce carbon dioxide emissions by 34% compared to 2016 levels, and by 52 million tons by 2025—the equivalent of taking ten million cars off the road.

The package includes amendments to the Zero Emission Vehicle (ZEV) regulation, which will further reduce the environmental impact of light-duty vehicles through increasing the number of ZEVs in the California fleet. ARB estimates that the regulation will result in 1.4 million ZEVs or TZEVs (transitional zero emission vehicle, most commonly a plug-in hybrid electric vehicle) on the road by 2025, and also contains a provision that allows automakers that over comply with the national GHG emission requirements across their fleet to offset their ZEV requirements.

The proposed regulations also contain a provision that will require the construction of hydrogen fueling stations to support the commercialization of hydrogen fuel cell vehicles. ARB estimates that the advanced technologies used to achieve the new smog and greenhouse gas standards will increase a new vehicle’s price in 2025 by about $1,900, but will be offset by $6,000 in fuel savings over the life of the car.  It is estimated that these measures will reduce annual fuel costs to operate a car by an average of 25%, with an overall cumulative savings of $22 billion by 2025.

The proposed LEV III and ZEV amendments will be considered at a two-day meeting of the Board, beginning January 26, 2012, at 9am PST.