In November 2023, the EPA published final updates to its “Implementing Regulations” under Section 111(d) of the Clean Air Act (CAA). The Implementing Regulations set timelines and other requirements for state plans to limit pollution from existing sources under Section 111. The updates apply to state plans developed for all emissions guidelines published after July 8, 2019.

Emissions guidelines don’t impose requirements directly on sources. Instead, they establish a framework for states to develop plans that establish, implement, and enforce standards of performance for “designated facilities,” which is the term the EPA uses for existing sources.

Additionally, the final rule clarifies that the EPA may approve state plans that allow sources to meet standards of performance in the aggregate, such as through trading or averaging.

The updated requirements also apply to eligible tribal nations that choose to develop their own plans that establish standards for existing sources in their jurisdictions.

Background

CAA Section 111(d) provides the EPA with the authority to issue regulations directing states to submit plans to the Agency that establish emissions performance standards for covered categories of facilities.

“To implement this authority, EPA develops emission guidelines for existing sources that meet the Section 111(d) criteria, which states in turn are directed to integrate into state plans within the boundaries outlined in CAA § 111,” according to Sidley Austin LLP. “EPA had longstanding rules governing the process for states to adopt plans under CAA § 111, which EPA amended when it adopted the 2019 Affordable Clean Energy Rule (ACE Rule). In American Lung Association v. EPA, No. 19-1140 (D.C. Cir. 2021), the U.S. Court of Appeals for the District of Columbia Circuit vacated the ACE Rule, finding amendments to the regulatory framework governing state plans arbitrary and capricious.

“On December 23, 2022, EPA issued a proposed rule, in part to address those portions of the regulations governing the development state plans that were vacated in American Lung. After receiving public comments, EPA published a final rule on November 9, 2023.”

Based on the comments received on the proposal, the final rule provides additional time for states to submit their plans; revises the definition of meaningful engagement and provides additional clarity and flexibility to states; extends the timeline that triggers consideration of increments of progress for state plans; and streamlines the process for considering particular sources’ remaining useful life and other factors to apply a less stringent standard of performance.

State plan requirements

Deadlines

The EPA anticipates that the adjusted timelines will provide enough time for states to develop and submit plans; for the EPA to review and act on those plans; and, if necessary, for the Agency to issue a federal plan while ensuring emissions guidelines are implemented as quickly as possible. However, the EPA recognizes that different emissions guidelines may address very different circumstances and notes it may replace the timelines in the Implementing Regulations in individual emissions guidelines, as appropriate.

The final Implementing Regulations include the following timelines:

• States will have 18 months to submit plans to the EPA rather than the 15 months the Agency had proposed. The EPA made this change in response to public comments on the proposed rule.
• The EPA will have 60 days to determine whether a state plan is complete.  After 60 days, the plan is automatically deemed complete.
• The EPA will have 12 months to take final action, such as approval or disapproval, on a complete plan or plan revision.
• The EPA must issue a federal plan within 12 months after 1) a state fails to submit a complete plan or 2) the EPA disapproves a state plan.
• State plans that include compliance deadlines that are longer than 20 months after plans are due to the EPA must include any increments of progress required under the applicable emissions guidelines.

“Increments of progress are legally enforceable steps that an owner or operator of an existing source must take toward achieving compliance with requirements in a state plan,” states the EPA Fact Sheet on the final rule. “They include steps such as submitting a final control plan for a facility to the air pollution control agency, procuring emissions control systems, and final compliance, among others. The number of increments of progress a plan must include and the time to complete them will vary based on requirements in specific emissions guidelines.”

Flexible and efficient mechanisms

The final rule adds several “mechanisms” to improve flexibility and efficiency in the submission, review, and implementation of state plans, including:

• Partial approval and disapproval: The EPA can partially approve or disapprove a state plan if parts of the plan are separately approvable but other portions aren’t. The public will have the opportunity to comment on partial approvals or disapprovals through notice-and-comment rulemaking.
• Conditional approval: The EPA can approve a state plan that substantially meets the requirements of emissions guidelines but that requires some additional, specific revisions to be fully approvable. For the EPA to conditionally approve a state plan, the state governor or designee must commit to adopt and submit the necessary revisions no later than 1 year after the conditional approval takes effect. If a state doesn’t meet this commitment, the conditional approval will convert to a disapproval.
• Parallel processing: States may ask the EPA to initially review a plan that’s technically complete but not yet administratively complete. This streamlined process allows the EPA to propose approval of a state plan in parallel with the state’s completing its administrative process.
• State plan call: The EPA may find that a previously approved state plan(s) is substantially inadequate to meet CAA or emissions guidelines requirements and call for a plan revision. This can occur if technical or legal conditions, such as a court decision, that occur after the plan has been approved mean the plan is no longer adequate. To require a state to revise a plan, the EPA must notify the state of its finding and set a deadline for the state to submit a revised plan or demonstrate appropriate implementation of the approved plan that’s within 12 months of the notification or within a different time period as determined by the EPA.
• Error correction: This provision allows the EPA to revise a prior action if the Agency determines its own action on a plan was in error. States aren’t required to submit a plan revision as part of an error correction.

For more information, see the final rule.