Key Contacts
Practice Areas
Trump’s EPA Makes a Late Push to Revive the Startup, Shutdown, and Malfunction Exemption, but Will It Get Out of the Starting Gate?
The underpinnings of the so-called the startup, shutdown, and malfunction (SSM) exemption date back to the Clean Air Act (CAA) amendments of 1970, when it was widely believed that emission limits intended to apply during “normal” operations could not also be met during SSM periods using the same emission control strategies. At that time, SSM periods were thought to be different from normal operating scenarios. On this basis, many states incorporated into their original CAA implementation plans, known as “SIPs,” provisions for more lenient treatment of excess emissions during SSM periods, including some that exempted such emissions from legal control altogether. EPA approved the original SIPs in the early 1970s.
Not more than a decade later, EPA started interpreting normal operations in the ordinary sense, distinguishing between predictable modes of operation including startup, shutdown, and maintenance, as compared to malfunctions, which are supposed to be limited to unpredictable and unforeseen events that cannot reasonably be prevented. The Agency began communicating to state permitting authorities that exemptions for excess emissions during SSM periods are inconsistent with the CAA, and in the years that followed, a small number of SIPs were determined to be deficient on this basis. But EPA did not undertake a broad effort to require the removal of impermissible SSM provisions from a larger number of SIPs until 2015, when the Agency responded to a rulemaking petition filed by Sierra Club (and other related legal proceedings) to address the SIPs that still included blanket exemptions for excess emissions during SSM periods and similarly lenient provisions. That 2015 response by EPA is commonly referred to as the SSM SIP Call.
While ultimately nuanced, the SSM SIP Call essentially memorialized EPA’s then-current policy on the legality of SSM provisions and issued a call to action to nearly 40 states to revise their SIPs consistent with such policy, including by removing automatic exemptions from emission limits and impermissible discretionary provisions, such as those that effectively bar EPA enforcement or the filing of citizen suits, as well as certain affirmative defense provisions. Affected states were given 18 months to revise their SIPs, and some did, resulting in state regulatory changes that filtered down to the facility air permit level in many cases. Others filed legal challenges to the SSM SIP Call with the D.C. Circuit Court of Appeals, but by the time the cases were ready for oral argument, the Trump administration had assumed control of EPA and the Court granted EPA’s request to put the cases on hold while the Agency reconsidered its SSM policy from the ground up.
With timing being everything, Trump’s EPA issued on October 9, 2020, a new policy memorandum entitled “Inclusion of Provisions Governing Periods of Startup, Shutdown, and Malfunctions in State Implementation Plans” (the “2020 SSM Policy Memo”). The 2020 SSM Policy Memo is identified as superseding and replacing certain policy statements in the 2015 SSM SIP Call action, and concludes that SSM provisions in SIPs, even automatic exemptions and so-called “director’s discretion” provisions, are permissible in many cases, although it does not (because it legally cannot absent a separate rulemaking) upend the specific determinations from 2015 that certain SIPs are inconsistent with the CAA. Still, EPA makes clear that it plans to review each SIP call remaining from the 2015 action, and all future proposed SIP actions, in light of the Agency’s new policy.
Only time will tell what will happen to the Agency’s new SSM policy, as even the best-laid plans can go awry with a new administration taking office in matter of days. But because EPA’s position on SSM provisions is policy-based, and was not codified through a formal rulemaking process, it can be reversed just as easily, with the issuance of yet another policy memorandum. For this reason, is reasonable to expect that the 2020 SSM Policy will to be undone by the incoming Biden administration.
