On June 23, 2014, the U.S. Supreme Court decided Utility Air Regulatory Group v. Environmental Protection Agency, No. 12-1146, holding that the U.S. Environmental Protection Agency (EPA) cannot require that a stationary source obtain a Clean Air Act permit based solely on its potential to emit greenhouse-gas emissions, but a source may become subject to EPA's "best available control technology" (BACT) requirements under the Prevention of Significant Deterioration (PSD) program for greenhouse-gas emissions if the source is already subject to Clean Air Act permitting requirements because of other emissions.
The Clean Air Act requires a permit (under the PSD program or Title V of the Act) for the construction, modification or operation of a stationary source with the potential to emit "any air pollutant" in the amount of either 100 or 250 tons per year, depending on the circumstances. In 2011, EPA concluded that greenhouse-gas emissions are a type of pollutant that triggers the permitting requirements, but because they tend to be orders of magnitude greater than emissions of conventional pollutants, ruled that the permitting trigger for those emissions would be 100,000 tons per year. EPA also ruled that sources that are already subject to PSD permitting requirements because of other emissions would be required to implement BACT for greenhouse gases.
A group of petitioners, including several U.S. states, sought review of the EPA's greenhouse-gas regulations. The United States Court of Appeals for the D.C. Circuit ruled in favor of the EPA, holding that greenhouses gases are the kind of air pollutant to which the stationary-source permitting requirements apply, and concluding that the petitioners lacked standing to challenge EPA's revised 100,000-tons-per-year threshold.
The Supreme Court reversed by a 5-4 vote as to the rule that greenhouse gases trigger stationary-source permitting requirements. The Court noted that the Clean Air Act, "in no uncertain terms, requires permits for sources with the potential to emit more than 100 or 250 tons per year of a relevant pollutant," and that "EPA's rewriting of the statutory threshold was impermissible." Therefore, EPA could not "tailor" the Clean Air Act to only cover larger sources of emissions. More fundamentally, the Court held that EPA could not interpret the Clean Air Act to include greenhouse gases among the pollutants triggering stationary-source permitting requirements. Rather, EPA should have interpreted "air pollutant" "to encompass only pollutants emitted in quantities that enable them to be sensibly regulated at the statutory thresholds, and to exclude those atypical pollutants that, like greenhouse gases, are emitted in such vast quantities that their inclusion would radically transform those programs and render them unworkable as written."
By a 7-2 vote, the Court upheld EPA's rule that stationary sources that are already subject to PSD permitting requirements because of other emissions must meet BACT requirements for greenhouse gases. The Court noted that the Clean Air Act requires BACT permitting standards "‘for each pollutant subject to regulation under this chapter' (i.e., the entire Act)," which includes greenhouse gases. It rejected the argument that greenhouse-gas emissions are "fundamentally unsuited" for BACT requirements because they often are controlled through "regulating energy use" rather than more traditional "end-of-stack controls."
Justice Scalia announced the judgment of the Court. His opinion for the Court as to the permitting triggers was joined by Chief Justice Roberts and Justices Kennedy, Thomas, and Alito. Justice Breyer dissented as to the permitting trigger ruling, joined by Justices Ginsburg, Sotomayor, and Kagan.
Justice Scalia's opinion for the Court as to the BACT requirement was joined by Chief Justice Roberts and Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan. Justice Alito dissented as to the BACT requirement, joined by Justice Thomas.
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