## Facts

- EPA issued final rules in 2004 and 2006 under Clean Air Act (CAA) § 112 regulating hazardous air pollutants (HAPs) from plywood and composite wood products (PCWP) manufacturing.
- PCWP facilities use heat and pressure (often with resin) to produce engineered wood products and emit multiple listed HAPs.
- NRDC and Sierra Club petitioned for review, arguing EPA (1) failed to set § 112(d) standards for listed HAPs, (2) unlawfully created a risk-based “low-risk” subcategory at the MACT stage, and (3) unlawfully extended compliance deadlines.
- Louisiana-Pacific separately petitioned, arguing EPA acted arbitrarily and capriciously by declining to create a separate subcategory and variance procedure for certain “wet/wet” hardboard presses.
- Industry groups intervened in support of EPA.

## Issues

1. Whether CAA § 112(d) required EPA to set emission standards for each listed HAP emitted by PCWP sources within the regulated category.
2. Whether EPA had authority under CAA § 112 to create a risk-based “low-risk” subcategory at the § 112(d) MACT stage.
3. Whether EPA could extend compliance deadlines for existing sources beyond the period allowed by CAA § 112.
4. Whether EPA’s refusal to create a separate subcategory and a variance procedure for wet/wet hardboard presses was arbitrary or capricious.

## Decision

- The court vacated and remanded the 2004 rule insofar as it failed to set emission standards for listed HAPs emitted by PCWP sources.
- The court held EPA lacked authority to create a “low-risk” subcategory at the § 112(d) stage and vacated that portion of the rules.
- The court held EPA lacked authority to extend the compliance deadline beyond the statute and vacated the extensions.
- The court denied Louisiana-Pacific’s petition, holding EPA’s refusal to create a wet/wet press subcategory and variance procedure was not arbitrary or capricious.

## Legal Principles

- CAA § 112 establishes a two-step framework: technology-based MACT standards under § 112(d) first, followed (if necessary) by residual, risk-based standards under § 112(f).
- EPA must set § 112(d) emission standards for listed HAPs emitted by a regulated source category; it may not leave listed pollutants unregulated within the category.
- EPA may not use risk assessments at the § 112(d) stage to exempt a “low-risk” subgroup from MACT requirements absent statutory authorization.
- EPA may not extend statutory compliance deadlines without clear authority in the Act.
- EPA retains discretion on technical subcategorization and variance policies when consistent with the statute, subject to arbitrary-and-capricious review.

## Conclusion

The D.C. Circuit enforced CAA § 112’s technology-first structure by vacating EPA’s risk-based low-risk exemption and unlawful compliance extensions, and by requiring MACT standards for listed HAPs, while deferring to EPA’s technical judgment in rejecting a separate wet/wet press subcategory and variance procedure.


Nat. Res. Def. Council v. EPA, 489 F.3d 1364 (D.C. Cir. 2007)