## Facts

- EPA promulgated three related Clean Air Act (CAA) § 112 rules: (1) MACT standards for major-source industrial, commercial, and institutional boilers and process heaters; (2) standards for area-source boilers; and (3) standards and guidelines for commercial and industrial solid waste incineration (CISWI) units.
- The rules implemented CAA § 112(d), which requires “MACT floor” standards based on the best-performing sources and permits “beyond-the-floor” standards considering cost and other statutory factors.
- EPA issued initial Major Boilers and CISWI rules in 2011 and significant revisions in 2013.
- Industry petitioners and environmental groups filed consolidated petitions for review in the D.C. Circuit challenging multiple aspects of the rules’ stringency and methodology.
- A core dispute concerned EPA’s method for calculating MACT floors for boilers, including a pollutant-by-pollutant approach and EPA’s exclusion of certain sources and data from the floor calculations.
- After the merits decision, EPA sought rehearing limited to the remedy for errors affecting major-boiler numeric MACT standards.

## Issues

1. Whether CAA § 112(d) permits EPA to set MACT floors using a pollutant-by-pollutant approach that may rely on different best-performing units for different pollutants.
2. Whether EPA lawfully excluded certain sources or data from the dataset used to calculate MACT floors for major boilers.
3. Whether EPA acted arbitrarily or capriciously in declining to adopt a health-based alternative standard for hydrogen chloride (HCl) under CAA § 112(d)(4).
4. Whether EPA arbitrarily or capriciously declined to impose beyond-the-floor standards for CISWI units under CAA § 112(d)(2).
5. What remedy is appropriate where MACT floor calculations were flawed: vacatur or remand without vacatur.

## Decision

- The court largely upheld EPA’s rules against numerous industry and environmental challenges.
- The court upheld EPA’s pollutant-by-pollutant MACT-floor methodology as a permissible interpretation of CAA § 112(d).
- The court held EPA unlawfully excluded certain sources/data from major-boiler MACT floor calculations, affecting the resulting standards’ stringency.
- The court upheld EPA’s decision not to adopt a health-based alternative HCl standard under § 112(d)(4), accepting EPA’s explanation regarding uncertainty about cumulative effects.
- The court upheld EPA’s cost-and-benefits reasoning for declining additional beyond-the-floor CISWI controls in challenged contexts.
- On rehearing as to remedy, the court ordered that the numeric MACT standards for major boilers across all 18 subcategories be remanded without vacatur so EPA could correct the MACT calculations while existing limits remained effective.

## Legal Principles

- When statutory text is ambiguous, EPA may reasonably interpret CAA § 112(d) to calculate MACT floors pollutant by pollutant rather than selecting a single best overall unit for all pollutants.
- CAA § 112(d) requires MACT floors to reflect the performance of the best-performing sources; unjustified exclusions of high-performing sources or relevant data that weaken floors are unlawful.
- Under CAA § 112(d)(4), EPA has discretion to decline a less-stringent, threshold-based standard where the agency reasonably concludes that scientific uncertainty (including cumulative-risk concerns) prevents a finding of adequate safety.
- Under CAA § 112(d)(2), EPA may refuse beyond-the-floor standards if it reasonably evaluates cost, non-air health/environmental impacts, and energy requirements and adequately explains its judgment.
- In choosing a remedy for curable defects, the D.C. Circuit may remand without vacatur when vacatur would produce significant disruption or reduce environmental protection while the agency corrects the error.

## Conclusion

The D.C. Circuit sustained EPA’s general MACT methodology and many technical choices for boiler and CISWI standards, but found that unlawful exclusions from the major-boiler MACT dataset required correction; because vacatur would temporarily relax hazardous-air-pollutant limits, the court ultimately remanded the major-boiler numeric MACT standards without vacatur for EPA to fix the calculations.


United States Sugar Corp. v. EPA, 830 F.3d 579 (D.C. Cir. 2016)