The courts have afforded the EPA wide discretion in the complex work of estimating air emissions by the best performing facilities to determine maximum achievable control technology (MACT) standards, but that latitude has its limits and the Agency must provide clearer rationales for the MACT limits it sets. 

That’s the outcome of a case brought against the Agency’s March 2011 New Source Performance Standards (NSPS) for sewage sludge incinerators (SSIs).  In National Association of Clean Water Agencies [NACWA] v. EPA, the U.S. Court of Appeals for the D.C. Circuit allowed the NSPS to remain in place but also ordered the EPA to clarify how its use of the upper prediction limit (UPL) method to determine MACT limits accounts for the variability of both sewage sludge and the performance of incinerators, as well as the Agency’s reliance on a lower than required dataset of facilities on which to base the standards.   The Sierra Club joined the suit against the Agency’s rule and, like the NACWA, characterized the court’s opinion as a victory.

While the petitions from the Sierra Club and the NACWA are somewhat at odds, both claimed that the EPA did not clearly show how it legally arrived at its NSPS limits.  According to the NACWA, the EPA did not properly account for variability in sewage sludge at publicly owned treatment works (POTWs) and provided inadequate justification for setting emissions limits using the novel UPL method and relying on incomplete data.  The Sierra Club argued that the rule fell short because the EPA could not show that its rule requires the cleaner emissions levels that well-controlled incinerators are already achieving. 

Best-performing 12 percent

Under the Clean Air Act, MACT air emissions limits must be based on the actual emissions achieved by the best controlled similar unit or best-performing 12 percent of units in the industrial category for each covered pollutant.  But in developing the SSI NSPS, the Agency encountered variability in emissions results, sometimes from the same incinerator operating under the same conditions.  To account for variability in emissions performance, the Agency applied the UPL method.  As described by the EPA, the UPL method represents with 99 percent confidence the mean emissions of future three-run performance tests of the best-performing 12 percent of sources.   

Variability

Problems the D.C. Circuit found with the EPA’s rulemaking include: 

• The Sierra Club contended that the UPL method did not adequately account for variability in emissions associated with noncontrol SSI technology factors, such as variations in age, design, or operation.  The D.C. Circuit agreed.  The Sierra Club also asserted that the UPL method does not sufficiently account for variations in emissions because of the content of sewage sludge incinerated; the NACWA used this same argument in its petition.  The EPA had contended that Clean Water Act regulations under Part 503 dictate the pollutant limits in sewage sludge intended for incineration, thus rendering the content of sewage sludge homogeneous.  Again, the D.C. Circuit agreed with the Sierra Club.  The court stated that in justifying its rule, the EPA simply points to data submitted under the Part 503 regulations without demonstrating whether and how the pollutant content of sludge affects emissions.  The court adds that the EPA may be able to explain and clarify on remand its position on whether the UPL can account for variability in sewage sludge content.
• To establish the required MACT dataset, the EPA surveyed nine municipalities, and supplemented the results of that study with data from state environmental agencies’ public databases, yielding emissions information from    5 fluidized bed incinerators and 20 multiple hearth incinerators.  The numbers in this dataset did not represent data from the best-performing 12 percent of SSIs. The question posed to the court by the NACWA was whether, given the size of the dataset, the EPA may apply the UPL to meet the best-performing 12 percent requirement.  In response, the D.C. Circuit noted EPA’s own statement that the accuracy of the UPL method grows as the size of the dataset increases.  Hence, the court indicated that the Agency needs to “explain why the upper prediction limit could still be considered accurate given a small dataset.”

UPL “may be lawful”

The D.C. Circuit concludes:
“To sum, while we determine that EPA’s use of the upper prediction limit may be lawful, we are remanding this portion of its rulemaking for further explanation on the issues of how the upper prediction limit represents the ‘average emissions limitation achieved,’ how the upper prediction limit is a reasonable method of predicting the upper limit of the best performing incinerators, and how the upper prediction limit accounts for variability in incinerator performance when it is not based on a dataset representative of the best-performing incinerators under the worst-performing conditions.”

National Association of Clean Water Agencies v. EPA.