United States Sugar Corp. v. Environmental Protection Agency

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 3, 2015 Decided July 29, 2016

No. 11-1108

UNITED STATES SUGAR CORPORATION,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

AMERICAN CHEMISTRY COUNCIL, ET AL.,

INTERVENORS

Consolidated with 11-1124, 11-1134, 11-1142, 11-1145,

11-1159, 11-1165, 11-1172, 11-1174, 11-1181, 13-1086,

13-1087, 13-1091, 13-1092, 13-1096, 13-1097, 13-1098,

13-1099, 13-1100, 13-1103

On Petitions for Review of Final Action of the

United States Environmental Protection Agency

William L. Wehrum Jr., David M. Friedland, and

Douglas A. McWilliams argued the causes for Industry

Petitioners. With them on the briefs were Allen A. Kacenjar,

Katy M. Franz, Lisa Marie Jaeger, Sandra Y. Snyder, Peter

H. Wyckoff, Claudia M. O=Brien, Stacey L. VanBelleghem, Eli

Hopson, Jane C. Luxton, Lauren E. Freeman, Elizabeth L.

Horner, William F. Lane, Alan H. McConnell, Timothy S.

Bishop, Kevin G. Desharnais, Chad M. Clamage, Ronald A.

Shipley, Quentin Riegel, Linda E. Kelly, and Jeffrey A.

Knight. Rachel Brand, Leslie A. Hulse, Harry M. Ng, Scott J.

Stone, John P. Wagner, and Lee B. Zeugin entered

appearances.

James S. Pew and Sanjay Narayan were on the briefs for

Environmental Petitioners. Neil Gormley entered an

appearance.

Perry M. Rosen and Norman L. Rave, Jr., Attorneys, U.S.

Department of Justice, argued the causes for respondent.

With them on the brief was John C. Cruden, Assistant

Attorney General, and Norman L. Rave, Jr., Attorney. Sam

Hirsch and Madeline P. Fleisher, Attorneys, entered

appearances.

James S. Pew and Neil Gormley argued the causes for

Environmental Respondent-Intervenors. With them on the

briefs was Sanjay Narayan.

William L. Wehrum, Quentin Riegel, Linda E. Kelly,

Patrick Forrest, Douglas A. McWilliams, Peter H. Wyckoff,

Jeffrey A. Knight, Claudia M. O=Brien, Stacey L.

VanBelleghem, Lisa Marie Jaeger, Sandra Y. Snyder, David

M. Friedland, William F. Lane, Alan H. McConnell, Ronald

A. Shipley, Carol F. McCabe, Suzanne Ilene Schiller, Michael

Dillon, Charles Howland Knauss, Shannon S. Broome,

Timothy S. Bishop, Kevin G. Desharnais, Chad M. Clamage,

Lauren E. Freeman, Elizabeth L. Horner, Larry B. Alexander,

and Leslie A. Hulse were on the brief for Industry Intervenor-

Respondents. Allen A. Kacenjar Jr., Rachel L. Brand, Harry

M. Ng, Scott J. Stone, John P. Wagner, and Lee B. Zeugin

entered appearances.

No. 11-1125

AMERICAN FOREST & PAPER ASSOCIATION, ET AL.,

PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

AMERICAN CHEMISTRY COUNCIL, ET AL.,

INTERVENORS

Consolidated with 11-1140, 11-1144, 11-1154, 11-1155,

11-1161, 11-1171, 11-1173, 11-1180, 11-1183, 11-1188,

13-1111, 13-1113, 13-1114, 13-1116, 13-1118, 13-1119,

13-1120, 13-1121, 13-1123, 13-1124, 13-1127

On Petitions for Review of a Final Action of the

United States Environmental Protection Agency

William L. Wehrum, Douglas A. McWilliams, and Jason

T. Morgan argued the causes for Industry Petitioners. On the

briefs were Richard G. Stoll, Leslie A. Hulse, Lisa Marie

Jaeger, Sandra Y. Snyder, Peter H. Wyckoff, Jeffrey A.

Knight, David M. Friedland, Jessalee Landfried, Michael B.

Wigmore, Ronald A. Shipley, Chet M. Thompson, Linda E.

Kelly, Quentin Riegel, William F. Lane, Alan H. McConnell,

Carol F. McCabe, Suzanne Ilene Schiller, and Michael

Dillon. David Y. Chung, Rachel L. Brand, Julia L. German,

Jeffrey W. Leppo, and Jane C. Luxton entered appearances.

Neil Gormley and James S. Pew argued the causes and

filed the briefs for Environmental Petitioners.

Perry M. Rosen and Norman L. Rave, Jr., Attorneys, U.S.

Department of Justice, argued the causes for respondent.

With them on the brief was John C. Cruden, Assistant

Attorney General. Madeline P. Fleisher, Attorney, entered an

appearance.

James S. Pew and Neil Gormley argued the causes and

filed the briefs for Environmental Respondent-Intervenors.

David M. Friedland and William L. Wehrum argued the

causes for Industry Intervenor-Respondents. With them on

the briefs were Jessalee Landfried, Leslie A. Hulse, Richard

G. Stoll, Ronald A. Shipley, William F. Lane, Alan H.

McConnell, James T. Morgan, Lisa Marie Jaeger, Sandra Y.

Snyder, Jeffrey A. Knight, Shannon S. Broome, Carol

McCabe, Suzanne Ilene Schiller, Michael Dillon, Linda E.

Kelly, Quentin Riegel, and Charles H. Knauss. Scott J. Stone,

Lori A. Rubin, and Jeffrey W. Leppo entered appearances.

No. 11-1141

AMERICAN CHEMISTRY COUNCIL,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

AMERICAN FOREST & PAPER ASSOCIATION, ET AL.,

INTERVENORS

Consolidated with 11-1182, 11-1207, 11-1208, 13-1105,

13-1107

On Petitions for Review of a Final Action of the

United States Environmental Protection Agency

William L. Wehrum and David M. Friedland argued the

causes for Industry Petitioners. On the briefs were Lisa Marie

Jaeger, Sandra Y. Snyder, Jeffrey A. Knight, Quentin Riegel,

and Leslie A. Hulse. Harry M. Ng, Scott J. Stone, and John P.

Wagner entered appearances.

Neil Gormley argued the cause for Environmental

Petitioners. With him on the briefs was James S. Pew.

Perry M. Rosen and Norman L. Rave, Jr., Attorneys, U.S.

Department of Justice, argued the causes for respondent.

With them on the brief was John C. Cruden, Assistant

Attorney General. Madeline P. Fleisher, Attorney, entered an

appearance.

David M. Friedland and William L. Wehrum argued the

causes for Industry Intervenor-Respondents. With them on

the briefs were Lisa Marie Jaeger, Sandra Y. Snyder, Jeffrey

A. Knight, William F. Pedersen, Pamela A. Lacey, William F.

Lane, Linda E. Kelly, Quentin Riegel, James W. Conrad, Jr.,

and Leslie A. Hulse. Harry M. Ng, Scott J. Stone, John P.

Wagner, and Nidhi J. Thakar entered appearances.

James S. Pew and Neil Gormley were on the brief for

Environmental Respondent-Intervenors.

Before: HENDERSON, BROWN, and GRIFFITH, Circuit

Judges.

PER CURIAM: In these consolidated petitions for review,

we address approximately thirty challenges to three

regulations promulgated by the United States Environmental

Protection Agency (EPA or Agency): (1) the “Major Boilers

Rule,”1 (2) the “Area Boilers Rule,”2 and (3) the

“Commercial/Industrial Solid Waste Incinerators (CISWI)

Rule.”3 Collectively, these rules—all promulgated under the

Clean Air Act (CAA or Act), 42 U.S.C. §§ 7401 et seq.—set

emissions limits on certain combustion machinery known to

release hazardous air pollutants (HAPs). Roughly one-half of

1

National Emission Standards for Hazardous Air Pollutants

for Major Sources: Industrial, Commercial, and Institutional Boilers

and Process Heaters (2011 Major Boilers Rule), 76 Fed. Reg.

15,608 (Mar. 21, 2011), as amended, National Emission Standards

for Hazardous Air Pollutants for Major Sources: Industrial,

Commercial, and Institutional Boilers and Process Heaters (2013

Major Boilers Rule), 78 Fed. Reg. 7,138 (Jan. 31, 2013).

2

National Emission Standards for Hazardous Air Pollutants

for Area Sources: Industrial, Commercial, and Institutional Boilers

(2011 Area Boilers Rule), 76 Fed. Reg. 15,554 (Mar. 21, 2011), as

amended, National Emission Standards for Hazardous Air

Pollutants for Area Sources: Industrial, Commercial, and

Institutional Boilers (2013 Area Boilers Rule), 78 Fed. Reg. 7,488

(Feb. 1, 2013).

3

Standards of Performance for New Stationary Sources and

Emission Guidelines for Existing Sources: Commercial and

Industrial Solid Waste Incinerator Units (2011 CISWI Rule), 76

Fed. Reg. 15,704 (Mar. 21, 2011), as amended, Commercial and

Industrial Solid Waste Incineration Units: Reconsideration and

Final Amendments; Non-Hazardous Secondary Materials that Are

Solid Waste (2013 CISWI Rule), 78 Fed. Reg. 9,112 (Feb. 7,

2013).

2

the challenges are advanced by a group of municipal-electric

organizations, industrial-trade associations, oil-and-gas

industry representatives, and other entities that own and

operate boilers, process heaters, and incinerators (Industry

Petitioners). The other one-half are pressed by organizations

interested in safeguarding the environment (Environmental

Petitioners).

I. BACKGROUND

The three rules at issue address a common phenomenon:

when combustion occurs, emissions result. The emissions

include numerous materials, some of which pose risks to the

environment in general and to human health in particular.

Because combustion is an inevitable occurrence in the

machinery that helps to power modern society, the Congress

has authorized the EPA to provide for a regulatory framework

that minimizes the deleterious effects of the incineration

industry while simultaneously allowing it to operate.

In 2013, the EPA finalized its efforts to do so for discrete

types of combustion machinery: boilers, process heaters, and

incinerators. Two of the three rules at issue—the Major

Boilers Rule and the Area Boilers Rule—govern boilers and

process heaters. The former are enclosed devices that use a

controlled flame to heat water and convert it into steam or hot

water. 40 C.F.R. § 63.11237. The latter are also enclosed

devices that use a controlled flame but, instead of generating

steam, they indirectly heat a “process material,” whether

liquid, gas, or solid, or a “heat transfer material” like glycol or

a mixture of glycol and water. Id. For simplicity, our use of

“boilers” covers both machinery types.

The two boiler-specific rules further divide the machinery

into three categories: industrial, commercial, and

3

institutional. See 2011 Area Boilers Rule, 76 Fed. Reg. at

15,557. Industrial boilers are used for manufacturing,

processing, mining, refining, and other similar operations.

See id. Commercial boilers are used by shopping malls,

laundromats, apartment complexes, restaurants, and hotels.

See id. And institutional boilers include those used by, e.g.,

medical centers, schools, churches, prisons, and courthouses.

See id. Collectively, over 200,000 boilers at over 100,000

separate facilities must comply with the standards set out in

the Major Boilers Rule or the Area Boilers Rule.

The third rule that we address—the CISWI Rule—

governs combustion machinery known as “solid waste

incineration unit[s].” 42 U.S.C. § 7429. The Act defines an

incinerator as a “distinct operating unit of any facility” that

burns solid waste from either commercial establishments,

industrial establishments, or the general public. Id.

§ 7429(g)(1). An incinerator subjects “waste material” to

“high temperatures until it is reduced to ash.” Incinerator,

NEW OXFORD AMERICAN DICTIONARY 853 (2d ed. 2005).

Incinerators fall into different subcategories and, in the past,

the EPA has issued rules governing many of them, including,

e.g., municipal solid-waste incinerators, medical-waste

incinerators, and sewage-sludge incinerators.4 At issue in the

CISWI Rule are incinerators located in commercial or

industrial facilities that combust solid waste as defined in the

Resource Conservation Recovery Act (RCRA), 42 U.S.C.

§§ 6901 et seq. See 2011 CISWI Rule, 76 Fed. Reg. at

15,706.

4

See, e.g., 40 C.F.R. pt. 60, subpts. Cd, Ce, Eb, AAAA,

BBBB, EEEE, FFFF, LLLL, MMMM.

4

A. THE CLEAN AIR ACT, 42 U.S.C. §§ 7401 ET SEQ.

Enacted “to protect and enhance the quality of the

Nation’s air resources so as to promote the public health and

welfare and the productive capacity of its population,” 42

U.S.C. § 7401(b)(1), the Act has been amended several times

since the Congress first attempted to control air pollution via

legislation in 1963. In 1970, the Congress required the EPA

to identify and publish a list of HAPs, which the CAA defined

as substances that increase “mortality,” “serious irreversible”

illness, or “incapacitating reversible” illness. Clean Air

Amendments of 1970, Pub. L. No. 91-604, § 4(a), 84 Stat.

1676, 1685 (1970). The EPA had to set emission limits for

every HAP based on the risk it posed to human health. See

Sierra Club v. EPA (Sierra Club I), 353 F.3d 976, 979 (D.C.

Cir. 2004). In other words, the EPA was to “consider[] levels

of HAPs at which health effects are observed, factor[] in an

ample margin of safety to protect the public health, and set

emission restrictions accordingly.” Id. (quotation marks

omitted).

The risk-focused approach to capping HAP emissions left

something to be desired. “In light of unrealistic time frames

and scientific uncertain[t]y over which substances posed a

threat to public health,” the EPA “only listed eight pollutants

as hazardous between 1970 and 1990,” Nat. Res. Def. Council

v. EPA (NRDC II), 529 F.3d 1077, 1079 (D.C. Cir. 2008), and

set “emission standards for [only] seven of them,” Sierra Club

I, 353 F.3d at 979; see also S. REP. NO. 101-228, at 3 (1989)

(“Very little has been done since the passage of the 1970 Act

to identify and control hazardous air pollutants.”). After

twenty years of the risk-based approach, the Congress went

back to the drawing board and, via the 1990 CAA

Amendments, Pub. L. No. 101-549, 104 Stat. 2399 (1990),

5

established the technology-based approach that governs

today. See Sierra Club I, 353 F.3d at 979.

1. 42 U.S.C. § 7412—“Hazardous Air Pollutants”

The 1990 CAA Amendments overhauled the Act’s

“Hazardous Air Pollutants” provision, codified at 42 U.S.C.

§ 7412. Although earlier iterations of the Act had assigned

HAPs-identification responsibility to the EPA, the slow pace

at which the EPA discharged its duty prompted the Congress

to create a list of pollutants itself.5 See Sierra Club I, 353

F.3d at 979-80 (citing 42 U.S.C. § 7412(b)). After identifying

nearly two hundred HAPs that warranted emissions

restrictions, see 42 U.S.C. § 7412(b)(1), the Congress directed

the EPA, first, to identify the sources of each HAP, see id.

§ 7412(c). The Agency then was to set emissions limits for

each source that result in HAPs reduction to the greatest

extent achievable by current technology. See generally Nat’l

Ass’n for Surface Finishing v. EPA, 795 F.3d 1, 4 (D.C. Cir.

2015) (citing 42 U.S.C. § 7412(b)(1), (c), (d)).

a. Identifying and Categorizing HAP Sources

The EPA’s first task is to create HAP-source categories

and subcategories. See 42 U.S.C. § 7412(c). The Act

distinguishes “major” from “area” sources, defining the

former as “any stationary source or group of stationary

sources” that neighbor each other, share common control, and

emit (or have the potential to emit) either ten tons per year or

more of any single HAP or twenty-five tons per year or more

5

The EPA must keep the HAPs list current. See 42 U.S.C.

§ 7412(b)(2), (3).

6

of any HAP combination.6 Id. § 7412(a)(1). The latter are

sources that do not emit enough HAPs to qualify as “major.”

Id. § 7412(a)(2). Although the EPA must set stringent

restrictions on major sources, it has discretion to set more

lenient emissions caps on area sources. See id. § 7412(d)(5).

Apart from the statutory distinction between major and

area sources, the EPA has discretion to differentiate “among

classes, types, and sizes of sources within a category or

subcategory.” Id. § 7412(d)(1). Once the EPA finalizes

HAPs-source categories and subcategories, the CAA

mandates that it draw one final dividing line—between “new”

sources and “existing” sources. See id. § 7412(d)(3). “New”

sources are those “on which construction begins after EPA

publishes emission standards,” Cement Kiln Recycling Coal.

v. EPA, 255 F.3d 855, 858 (D.C. Cir. 2001); most of the

others are “existing” sources, see 42 U.S.C. § 7412(a)(10).

But if an existing source experiences either a physical change

or a change in operation method and the change increases

HAP emissions by more than a de minimis amount, the Act

mandates that the source meet the standards set for new

sources. See id. § 7412(a)(5), (g).

b. Setting Emission Standards for Major Sources—the

“MACT” Standard

After the EPA identifies HAP-source categories and

subcategories, it then sets emissions limits for each. See id.

§ 7412(d)(2). “[W]henever . . . feasible,” the caps must use

numeric HAPs limits. Id. § 7412(h)(4). The size of the

6

The CAA defines “stationary source” as “any building,

structure, facility, or installation which emits or may emit any air

pollutant.” 42 U.S.C. § 7411(a)(3).

7

source—either “major” or “area”—dictates whether the EPA

must set the numeric limit at the most stringent level that

current technology allows or at the level set by “generally

available control technologies.” Id. § 7412(d)(5). For major

sources, the CAA directs the EPA to establish emissions caps

that result in the “the maximum degree of reduction in

emissions” that the EPA determines is “achievable.” Id.

§ 7412(d)(2). We refer to an emissions cap that reflects the

current “maximum achievable control technology” as a

“MACT” standard. See NRDC II, 529 F.3d at 1079. Setting a

MACT standard is a two-step process.

First, the EPA establishes a “MACT floor” for each

category or subcategory. Sierra Club I, 353 F.3d at 980. The

MACT floor ensures that all HAPs sources “at least clean up

their emissions to the level that their best performing peers

have shown can be achieved.” Id. For new sources—those

built after promulgation of a HAPs limit, see 42 U.S.C.

§ 7412(a)(4)—the MACT floor cannot be less stringent than

the emissions levels achieved by the best performing similar

source. Id. § 7412(d)(3). For existing sources in categories or

subcategories that have thirty or more sources, the MACT

floor cannot be less stringent than the average emissions

limits achieved by the best performing 12 per cent of existing

sources in that category or subcategory. Id. § 7412(d)(3)(A).

And for existing sources in categories or subcategories with

fewer than thirty sources, the MACT floor cannot be less

stringent than the average emissions achieved by the best

performing five sources. Id. § 7412(d)(3)(B). When setting

the MACT floor, the EPA considers only the performance of

the cleanest sources in a category or subcategory; it does not

take into account other factors, including the cost of putting a

source in line with its better-performing counterparts. See

Cement Kiln, 255 F.3d at 857-58 (citing Nat’l Lime Ass’n v.

8

EPA, 233 F.3d 625, 629 (D.C. Cir. 2000), as amended on

denial of reh’g, No. 99-1325 (D.C. Cir. Feb. 14, 2001)).

Second, the EPA must determine whether current

technology makes it possible for a source to perform even

better than the best performing similar source or sources. In

other words, the CAA directs the EPA to consider whether it

should set a “beyond-the-floor” MACT standard. Nat’l Lime

Ass’n, 233 F.3d at 629. In determining whether a beyond-the-

floor standard is “achievable,” the Agency must consider

additional factors like “the cost of achieving such emission

reduction,” “any non-air quality health and environmental

impacts” and “energy requirements.” 42 U.S.C. § 7412(d)(2).

It has broad discretion in its determination. See id.; cf. Nat’l

Ass’n of Clean Water Agencies v. EPA (NACWA), 734 F.3d

1115, 1157 (D.C. Cir. 2013) (noting, in section 7429 case,

that “Congress gave EPA broad discretion in considering

whether to go beyond-the-floor”).

c. Setting Emission Standards for Area Sources—the

“GACT” Standard

Although the EPA must cap HAP emissions from major

sources at the “maximum degree of reduction,” see 42 U.S.C.

§ 7412(d)(2), it has discretion to set less stringent caps on

emissions from area sources. Indeed, the EPA need not list

categories of area sources at all unless: (A) it finds that the

sources in that category or subcategory “present[] a threat of

adverse effects” to the environment or human health, see id.

§ 7412(c)(1), (3); or (B) control of a particular area source

category or subcategory is necessary to ensure that sources

accounting for at least 90 per cent of the aggregate emissions

of the thirty HAPs the EPA believes “present the greatest

threat to public health in the largest number of urban areas”

9

are subject to CAA control, id. § 7412(c)(3), (k)(3)(B). If it

finds that controlling emissions from a particular area source

subcategory is necessary to achieve a 90 per cent reduction in

the aggregate emissions of any of seven CAA-enumerated

HAPs, section 7412(c)(6) requires the Agency to impose

MACT caps on that subcategory. See id. § 7412(c)(6).

With the exception of section 7412(c)(6)’s MACT-

standard requirement, the EPA need not cap emissions from

area sources at the MACT level. Instead, it may set more

lenient emissions limits based on “generally available control

technologies.” Id. § 7412(d)(5). We refer to these caps as

GACT standards. The Act provides no guidance for setting

GACT standards but the legislative history of the 1990 CAA

Amendments describes GACT “as methods, practices and

techniques [that] are commercially available and appropriate

for application by the sources in the category considering

economic impacts and the technical capabilities of the firms

to operate and maintain the emissions control systems.” S.

REP. NO. 101-228, at 171 (1989). According to the EPA, it

can and will consider the following in setting a GACT

standard:

 “costs and economic impacts . . . , which

[are] particularly important when developing

regulations for source categories that may

have many small businesses . . . ”;

 “the control technologies and management

practices that are generally available to the

area sources in the source category”;

 “the standards applicable to major sources in

the analogous source category to determine if

10

the control technologies and management

practices are transferable and generally

available to area sources”; and

 “technologies and practices at area and major

sources in similar categories to determine

whether such technologies and practices

could be considered generally available for

the area source categories at issue.”

2011 Area Boilers Rule, 76 Fed. Reg. at 15,556. And, unlike

the EPA’s duty to consider a beyond-the-floor MACT

standard, it need not consider a more stringent GACT

standard.

d. Work-Practice and Management-Practice Standards

Although the CAA requires numeric emission standards

where possible, the EPA can “promulgate a design,

equipment, work practice, or operational standard, or

combination thereof” if it determines that a numeric limit is

“not feasible.” 42 U.S.C. § 7412(h)(1). In other words, the

EPA can require that all sources in a given category or

subcategory take a certain action (e.g., conduct a periodic

tune-up) or install certain emissions-control technology (e.g.,

install a fabric filter). Although the EPA has discretion to

impose a work-practice standard, the Act limits it by defining

the operative phrase “not feasible” narrowly to mean:

(A) a hazardous air pollutant or pollutants cannot

be emitted through a conveyance designed

and constructed to emit or capture such

pollutant, or that any requirement for, or use

of, such a conveyance would be inconsistent

with any Federal, State or local law, or

11

(B) the application of measurement methodology

to a particular class of sources is not

practicable due to technological and

economic limitations.

Id. § 7412(h)(2).

Similarly, for area sources, the EPA can impose a

“management-practice standard” in lieu of a numeric GACT

standard. See id. § 7412(d)(5). A management-practice

GACT standard is like a work-practice MACT standard in all

ways but one—the EPA need not consider feasibility when

setting management-practice standards. Compare id.

§ 7412(d)(2), with id. § 7412(d)(5).

2. 42 U.S.C. § 7429—“Solid Waste Combustion”

In addition to amending the Act’s “Hazardous Air

Pollutants” provision, see id. § 7412, the 1990 CAA

Amendments added to the U.S. Code section 7429, titled

“Solid Waste Combustion.” Section 7429 regulates “solid

waste incineration units” generally, see id. § 7429(a)(1)(A),

and CISWI specifically, see id. § 7429(a)(1)(D). Although

section 7412 requires the EPA to control emissions of nearly

two hundred HAPs, see id. § 7412(d)(1), section 7429

mandates that the EPA control emissions from only nine

specific pollutants (as well as opacity, where appropriate),

none of which the Congress included on its initial section

7412 list, see id. § 7429(a)(4); see also Nat. Res. Def. Council

v. EPA (NRDC I), 489 F.3d 1250, 1256 (D.C. Cir. 2007). We

have held that this difference “makes

promulgating . . . standards under [section 7412] and [section

7429] mutually exclusive.” NACWA, 734 F.3d at 1119. In

other words, if a source (or facility) is considered a CISWI

12

and, therefore, regulated under section 7429, it cannot be

regulated under section 7412. See id.

Whether a source falls under section 7412 or section

7429, “the statutory directive on setting MACT standards is

virtually identical.” Id.; see also Nat’l Lime Ass’n, 233 F.3d

at 631. That said, regulation under one section instead of the

other “has practical consequences.” NACWA, 734 F.3d at

1120. For example, section 7412 allows the EPA to impose a

GACT standard for area sources only but section 7429

requires the EPA to impose MACT standards for all covered

units, regardless of their size. Compare 42 U.S.C.

§ 7412(d)(1), (5), with id. § 7429(a)(1)(A); see also NRDC I,

489 F.3d at 1256. Moreover, section 7412 mandates that the

EPA control HAP emissions from “major source[s],” which

the Act defines broadly to include “group[s] of stationary

sources located within a contiguous area and under common

control.” 42 U.S.C. § 7412(a)(1) (emphasis added). Section

7429, in contrast, mandates that the EPA control emissions

from “solid waste incineration unit[s],” which the Act defines

more narrowly as “a distinct operating unit of any facility

which combusts any solid waste material,” 42 U.S.C.

§ 7429(g)(1) (emphases added). And finally, section 7429

does not provide for work-practice standards.

3. 42 U.S.C. §§ 7661 et seq.—“Title V Permits”

Finally, the 1990 CAA Amendments added a provision to

Title V of the Act that requires all owners and operators of

HAP sources to obtain operating permits. See id. § 7661a.

Title V does no more than consolidate “existing air pollution

requirements into a single document, the Title V permit, to

facilitate compliance monitoring” without imposing any new

substantive requirements. Sierra Club v. Leavitt, 368 F.3d

13

1300, 1302 (11th Cir. 2004). The legislative history of the

1990 CAA Amendments indicates that the Congress required

the “Title V permits” so that the public might “better

determine the requirements to which the source is subject, and

whether the source is meeting those requirements.” S. REP.

NO. 101-228, at 347. Although owners and operators of all

major HAP sources must obtain Title V permits, see generally

42 U.S.C. § 7661a(a), the EPA has discretion to exempt

certain area source categories if it “finds that compliance with

such requirements is impracticable, infeasible, or

unnecessarily burdensome,” id.

B. THE MAJOR BOILERS, AREA BOILERS,

AND CISWI RULES

On March 21, 2011, the EPA issued the first iteration of

all three rules under review. That same day, however, the

EPA announced that it intended to reconsider certain aspects

of each rule. Not long after, multiple parties filed the

petitions for review that we now address. Earlier, the EPA

had concluded its reconsideration and issued the most recent

iteration of the three rules. Because of this procedural quirk,

each “rule” we address is in fact two separate rules—the

EPA’s “final” 2011 version and its “final” 2013 version. The

EPA’s analyses remained mostly consistent from 2011 to

2013 and we indicate, where necessary, the instances in which

the EPA changed course in a significant way.

1. The Major Boilers Rule

The Major Boilers Rule sets HAPs emission caps for all

industrial, commercial, and institutional boilers that emit a

large volume of HAPs. See 2011 Major Boilers Rule, 76 Fed.

Reg. at 15,611. The EPA further divided the major boiler

categories into subcategories based on the primary fuel

14

combusted by the boilers in the subcategory (e.g., coal,

biomass, gas, etc.) and, for some subcategories, based on the

method used to “feed” the fuel into the boiler. See 2013

Major Boilers Rule, 78 Fed. Reg. at 7,144. For most of the

subcategories, the EPA set a numeric MACT standard for four

different HAPs: particulate matter (PM); hydrogen chloride

(HCl); mercury (Hg); and carbon monoxide (CO). See id. at

7,142 tbl.3; No. 11-1108 EPA Br. 9. The EPA used some of

these HAPs—particularly CO—as a surrogate (or proxy) to

set emissions limits for others on the section 7412(b) HAPs

list. See 2013 Major Boilers Rule, 78 Fed. Reg. at 7,144-45.

For the other major boiler subcategories, the EPA set a work-

practice standard (specifically, a tune-up requirement) in lieu

of numeric MACT standards. See 2011 Major Boilers Rule,

76 Fed. Reg. at 15,613.7 The EPA also established a tune-up

work-practice standard to control for dioxin/furan emissions

across all major boiler subcategories. 2013 Major Boilers

Rule, 78 Fed. Reg. at 7,138.

In addition to these emission standards, the Major Boilers

Rule includes several other provisions relevant to the current

petitions for review.

a. The “Upper Prediction Limit”

Several factors complicate the process of setting MACT

floors. The first is the CAA itself, which mandates that all

MACT floors (1) must be achievable, see 42 U.S.C.

7

The four major boiler subcategories for which the EPA

established work-practice standards include “[n]ew and existing

units that have a designed heat input capacity of less than 10

MMBtu/hr, and new and existing units in the Gas 1 (natural

gas/refinery gas) subcategory and in the metal process furnaces

subcategory.” 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613.

15

§ 7412(d)(2); (2) must ensure continuous regulation of the

covered sources, see id. § 7602(k); and (3) must be no less

stringent than the emissions levels being achieved by the best-

controlled sources, see id. § 7412(d)(3). The second is that no

source emits any HAP at a constant level; rather, HAP

emissions fluctuate over time and for many reasons,

including, e.g., “operation of control technologies, variation in

combustion materials and combustion conditions, variation in

operation of the unit itself, and variation associated with the

emission measurement techniques.” Memorandum from

Stephen D. Page, EPA Director of Air Quality Planning and

Standards, EPA’s Response to Remand of the Record for

Commercial and Industrial Solid Waste Incineration Units

(Page Mem.) (July 14, 2014), at 3 (No. 11-1125 J.A. 1316).

Finally, most sources do not measure their HAP emissions at

all times and under all conditions.8 Id. at 6. Instead, data are

usually gathered when a source conducts a “three-run stack

test.” Id. This test provides three “snapshots” of a source’s

emissions in a limited set of conditions and, accordingly, it

fails to demonstrate accurately a source’s emissions during all

times and under all conditions. Id.

To compensate for the lack of adequate emissions data,

the EPA uses a statistical tool known as the “upper prediction

limit” (UPL) to account for the expected variability in

emissions levels. See 2011 Major Boilers Rule, 76 Fed. Reg.

at 15,630. The UPL, in turn, allows the Agency to set a

MACT floor that is continuously achievable. Id. We discuss

the UPL mechanics at greater length below, see infra § IV.C,

but, in short, the EPA: (1) ranks all sources in a given

8

As discussed below, however, the EPA does allow sources

to demonstrate MACT compliance by use of “continuous

monitors.” See infra § IV.I.

16

category based on their three-run stack-test data;

(2) determines the HAP emissions level of the “best

controlled similar source” to establish standards for new

sources, 42 U.S.C. § 7412(d)(3), and determines the average

HAP emissions levels of the best performing 12 per cent of

sources to establish standards for existing sources, id.

§ 7412(d)(3)(A); and then (3) applies the UPL methodology

to provide the cushion necessary to account for the expected

peaks and valleys in HAP emissions not reflected in the three-

run stack-test “snapshots.” See Page Mem. 4, 6.

b. The “Pollutant-By-Pollutant” Approach

In identifying the best performing sources in a given

category, often the EPA could not identify a single source that

controlled all HAPs better than all other sources. Instead, the

EPA found that one source effectively controlled emissions

from one HAP but was nonetheless one of the worst-

performing sources at controlling emissions from a different

HAP. For this reason, the EPA adopted a “pollutant-by-

pollutant” approach in setting MACT floors for major boiler

subcategories. See 2011 Major Boilers Rule, 76 Fed. Reg. at

15,622-23. That is, instead of identifying the one source that,

on balance, best controlled all HAPs in the aggregate, the

EPA used one source to set the MACT floor for, e.g., PM, and

used a different source to set the MACT floor for, e.g., HCl.

For at least two subcategories of major boilers—new heavy

oil-fired units and existing stoker coal-fired units—the EPA’s

pollutant-by-pollutant approach resulted in MACT floors that

no source had achieved in toto.

c. Startups, Shutdowns, and Malfunctions

The EPA found it difficult to account for HAP emissions

when sources start up, shut down, and malfunction. All three

17

occurrences alter HAP emissions and, historically, the EPA

exempted sources from normal numeric MACT-standard

compliance when these events occurred. See, e.g., Standards

of Performance for New Stationary Sources, 42 Fed. Reg.

57,125 (Nov. 1, 1977). Nevertheless, concluding that the Act

“require[s] that there must be continuous section [7412]-

compliant standards” and observing that the exemption meant

that “no section [7412] standard governs these events,” in

2008 we vacated the exemption for startups, shutdowns, and

malfunctions when the issue arose in a case challenging a

different rule. Sierra Club v. EPA (Sierra Club III), 551 F.3d

1019, 1027-28 (D.C. Cir. 2008) (emphasis added).

In response to the Sierra Club III vacatur, the EPA

established a work-practice standard in lieu of a numeric

MACT standard during startup and shutdown periods (but not

during malfunctions) when it promulgated the Major Boilers

Rule. See 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613.9

It did so after determining that the “physical limitations and

the short duration of startup and shutdown periods” made it

technologically infeasible to conduct the requisite testing for

numeric emissions limits. Id. A work-practice standard

sufficed, in the EPA’s view, because “[p]eriods of startup,

normal operations, and shutdown are all predictable and

routine aspects of a source’s operations.” Id.

9

Specifically, the startup and shutdown work-practice

standard requires a source to follow “the manufacturer’s

recommended procedures for minimizing periods of startup and

shutdown.” 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613. “If

manufacturer’s recommended procedures are not available,” the

Major Boilers Rule provided that “sources must follow

recommended procedures for a unit of similar design for which

manufacturer’s recommended procedures are available.” Id. at

15,642.

18

But because a malfunction is “sudden, infrequent, and not

reasonably preventable,” id. (quoting 40 C.F.R. § 63.2), the

EPA declined to treat a malfunction as a “distinct operating

mode,” id. As a result, the EPA did not account for

malfunctions when it set the MACT floors and it required

sources to comply with all MACT floors even during periods

of malfunction. Id. At the same time and recognizing that

even the best equipment can fail and that such failure can

spike emissions, the EPA added to the Major Boilers Rule “an

affirmative defense to civil penalties for exceedances of

numerical emission limits that are caused by malfunctions.”

Id. In reviewing a challenge to a different EPA rule, however,

we vacated a materially identical affirmative-defense

provision and held that the EPA has no power under the CAA

to create a defense to civil liability. See Natural Res. Def.

Council v. EPA (NRDC III), 749 F.3d 1055, 1062-64 (D.C.

Cir. 2014). Here, the EPA defends its decision not to address

malfunctions by asserting that it will use its enforcement

discretion regarding malfunctions on a case-by-case basis.

d. The One-Time Energy Assessment

The EPA also promulgated a “beyond-the-floor”

requirement for all facilities with existing major boilers. See

2011 Major Boilers Rule, 76 Fed. Reg. at 15,613.

Specifically, the Major Boilers Rule mandates a “a one-time

energy assessment . . . on the affected boilers and facility to

identify any cost-effective energy conservation measures,”

id., which assessment includes, inter alia, a review of fuel

usage, energy management practices, and conservation

measures, see 2013 Major Boilers Rule, 78 Fed. Reg. at

7,198-99. In some respects, the energy assessment is limited:

it (1) need occur only one time, see 40 C.F.R pt. 63, subpt.

DDDDD tbl.3; (2) is “based on energy use by discrete

19

segments of a facility and not by a total aggregation of all

individual energy using elements of a facility,” 2013 Major

Boilers Rule, 78 Fed. Reg. at 7,146; and (3) does not require

an owner or operator to implement any of the energy-saving

findings the assessment makes. In one respect, however, it is

expansive—it requires owners and operators to assess not

only the boilers themselves but also other components

“located on the site of the affected boiler that use energy

provided by the boiler,” including “compressed air systems”

as well as “facility heating, ventilation, and air conditioning

systems.” 40 C.F.R. § 63.11237.

e. The Health-Based Emissions Limits for HCl

Although the EPA set numeric MACT standards to

control HCl emissions, see 2013 Major Boilers Rule, 78 Fed.

Reg. at 7,193-98 tbls.1 & 2, in an earlier iteration of the Major

Boilers Rule, the EPA did not set MACT standards for HCl.

See National Emission Standards for Hazardous Air

Pollutants for Industrial, Commercial, and Institutional

Boilers and Process Heaters (2004 Boilers Rule), 69 Fed. Reg.

55,218, 55,227 (Sept. 13, 2004). Instead, the Agency opted

for a less stringent health-based emissions limit under section

7412(d)(4). See id. The EPA changed course after

concluding that HCl emissions posed health concerns the

Agency had not previously considered—in particular, the

EPA feared the “potential cumulative public health and

environmental effects” of HCl emissions, 2011 Major Boilers

Rule, 76 Fed. Reg. at 15,643-44 (emphasis added)—and after

recognizing that it did not have the requisite data to weigh

adequately the newly identified health risks.

20

2. The Area Boilers Rule

In the Area Boilers Rule, the EPA set emissions limits for

the same three boiler categories it controlled in the Major

Boilers Rule, see supra § I.B.1: industrial, commercial, and

institutional boilers. See 2013 Area Boilers Rule, 78 Fed. Reg.

at 7,488. It further split the categories into seven

subcategories, see id., and set emissions limits for three of

them, see id. at 7,517-18 tbls.1 & 2.10 These include:

(1) coal-fired boilers (i.e., “any boiler that burns any solid

fossil fuel and no more than 15 percent biomass,” 40 C.F.R.

§ 63.11237); (2) oil-fired boilers (i.e., “any boiler that burns

any liquid fuel and is not in either the biomass or coal

subcategories,” id.); and (3) biomass-fired boilers (i.e., “any

boiler that burns any” “biomass-based solid fuel that is not a

solid waste” and “is not in the coal subcategory,” id.). See

2013 Area Boilers Rule, 78 Fed. Reg. at 7,517-18 tbls.1 & 2.

For these subcategories, the EPA set emissions limits for

three HAPs: Hg, PM, and CO, with PM functioning as a

surrogate for non-Hg urban metals and CO functioning as a

surrogate for polycyclic organic matter (POM). See 2011

Area Boilers Rule, 76 Fed. Reg. at 15,586. Because Hg and

POM are both listed in section 7412(c)(6), the EPA had to set

MACT standards for Hg and for CO (as surrogate for POM)

for any area source category that, in the EPA’s view, required

10

As noted above, see supra § I.A.1.a, the EPA has some

discretion in promulgating emissions limits for area HAP sources.

Exercising its discretion, the EPA had previously determined that

natural gas-fired area boilers did not emit HAPs at a level

necessitating regulation. See National Emission Standards for

Hazardous Air Pollutants for Area Sources: Industrial, Commercial,

and Institutional Boilers (2010 Proposed Area Boilers Rule), 75

Fed. Reg. 31,896, 31,900 (June 4, 2010).

21

MACT control to assure a 90 per cent reduction in the

aggregate emissions of these two HAPs. See 42 U.S.C.

§ 7412(c)(6). The Agency complied, setting numeric MACT

standards for Hg and CO emissions from large coal-fired

boilers and a MACT work-practice standard (specifically, a

tune-up requirement) for emissions from small coal-fired

boilers. See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,488,

7,517-18.11 It did not, however, set MACT standards for Hg

and POM emissions from biomass or oil-fired boilers, finding

it unnecessary to assure a 90 per cent reduction in aggregate

emissions of those two HAPs. See 2011 Area Boilers Rule,

76 Fed. Reg. at 15,566.

Thus, with the exception of Hg and CO emissions from

coal-fired boilers, the EPA had discretion to promulgate

GACT standards for all other HAPs in all other source

subcategories. See 42 U.S.C. § 7412(d)(5). Exercising this

discretion resulted in the following standards:

11

As used in the Area Boilers Rule, the difference between

“large” and “small” units depends on the heat-input capacity of the

unit. See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,488. It is not

the same as the difference between “major” and “area” sources,

which is based on the volume of HAPs a source emits. See 42

U.S.C. § 7412(a).

22

Boiler Hg Hg

Size Age

Subcategory Limit Type

New Numeric MACT

Large

Existing Numeric MACT

New Tune- MACT

Coal

Up

Small

Existing Tune- MACT

Up

New --- ---

Large

Existing --- ---

Biomass

New --- ---

Small

Existing --- ---

New --- ---

Large

Existing --- ---

Oil

New --- ---

Small

Existing --- ---

Boiler CO CO

Size Age

Subcategory Limit Type

New Numeric MACT

Large

Existing Numeric MACT

Coal

New Tune-up MACT

Small

Existing Tune-up MACT

New Tune-up GACT

Large

Existing Tune-up GACT

Biomass

New Tune-up GACT

Small

Existing Tune-up GACT

New Tune-up GACT

Large

Existing Tune-up GACT

Oil

New Tune-up GACT

Small

Existing Tune-up GACT

23

Boiler PM PM

Size Age

Subcategory Limit Type

New Numeric GACT

Large

Existing Tune-up GACT

Coal

New Tune-up GACT

Small

Existing Tune-up GACT

New Numeric GACT

Large

Existing Tune-up GACT

Biomass

New Tune-up GACT

Small

Existing Tune-up GACT

New Numeric GACT

Large

Existing Tune-up GACT

Oil

New Tune-up GACT

Small

Existing Tune-up GACT

2013 Area Boilers Rule, 78 Fed. Reg. at 7,488-89, 7,517-19.

The Area Boilers Rule shares many of the same features

as the Major Boilers Rule; for example, the Area Boilers Rule

treats startups, shutdowns, and malfunctions in the same

fashion as the Major Boilers Rule, see supra § I.B.1.c—i.e.,

the Area Boilers Rule creates work-practice (or management-

practice) standards for startup and shutdown periods but does

not account for malfunctions at all, save for the Agency’s

commitment to consider malfunctions on a case-by-case basis.

See 2013 Area Boilers Rule, 78 Fed. Reg. at 7,496; 2011 Area

Boilers Rule, 76 Fed. Reg. at 15,560-61. Additionally, the

Area Boilers Rule imposes the same one-time energy-

assessment requirement for existing large area boilers that the

Major Boilers Rule imposes for existing major boilers. See

supra § I.B.1.d; see also 2013 Area Boilers Rule, 78 Fed.

Reg. at 7,500; 2011 Area Boilers Rule, 76 Fed. Reg. at

24

15,560, 15,567-68. There are, however, two unique features

of the Area Boilers Rule that warrant brief discussion.

a. Exclusion of “Temporary Boilers”

After the EPA promulgated the 2011 Area Boilers Rule

but before it promulgated the 2013 version, it proposed an

amendment to 40 C.F.R. § 63.11195 that added temporary

boilers to the list of those boilers not regulated by

section 7412. See National Emission Standards for

Hazardous Air Pollutants for Area Sources: Industrial,

Commercial, and Institutional Boilers (2011 Proposed Area

Boilers Rule on Reconsideration), 76 Fed. Reg. 80,532,

80,535 (Dec. 23, 2011). The EPA created the exclusion

because, in its view, temporary boilers are “insignificant

sources[] and were not included in the EPA’s analysis of the

source category.” Id. The Agency eventually defined

“temporary boiler” as “any gaseous or liquid fuel boiler that is

designed to, and is capable of, being carried or moved from

one location to another by means of, for example, wheels,

skids, carrying handles, dollies, trailers, or platforms.” See

2013 Area Boilers Rule, 78 Fed. Reg. at 7,491 (quoting 40

C.F.R. § 63.11237).

b. Title V Permit Exemption for Synthetic Area Sources

As noted, see supra § I.A.3, Title V of the CAA imposes

a permit requirement on all owners and operators of major

and area HAP sources. See 42 U.S.C. § 7661a. The EPA,

however, can exempt an area source subcategory if it finds

“that compliance with such requirements is impracticable,

infeasible, or unnecessarily burdensome on such categories.”

Id. § 7661a(a). When it proposed the Area Boilers Rule in

2010, the EPA considered exempting some area sources

because, in its view, the existing restrictions on those sources

25

made Title V duplicative. See 2010 Proposed Area Boilers

Rule, 75 Fed. Reg. at 31,910-13. At the time, the EPA

announced that it did not intend to exempt “synthetic” area

sources (i.e., area sources that, but for existing air-pollution

controls, would be considered major sources). Id. at 31,913.

In so doing, the EPA reasoned that synthetic area sources:

(1) more closely resemble major sources than area sources,

(2) are often located in populous areas, and (3) have high

HAP emissions potential when uncontrolled. Id.

But in the 2011 Area Boilers Rule, the EPA changed

course and exempted synthetic area sources from the Title V

permitting requirement. See 76 Fed. Reg. at 15,578. It

reasoned that the “observations and data . . . relied upon in

other rulemakings for distinguishing between sources that

became synthetic area sources due to controls and other

synthetic and natural area sources did not necessarily apply to

this source category.” Id. In its view, it no longer had

“sufficient information” to distinguish synthetic area sources

from the others it exempted and, accordingly, “the rationale

for exempting most area sources subject to this rule . . . is also

now relevant for” synthetic area sources. Id.; see also 2013

Area Boilers Rule, 78 Fed. Reg. at 7,497.

3. The CISWI Rule

In the CISWI Rule, the EPA created four CISWI

subcategories: (1) incinerators (i.e., “units designed to burn

[solid] waste materials for the purpose of disposal”);

(2) small, remote incinerators (“SRIs”) (i.e., units that burn

small waste batches); (3) energy recovery units (“ERUs”)

(i.e., units that would be classified as boilers but for the fact

they combust solid waste); and (4) waste-burning kilns (i.e.,

units that would be classified as cement kilns if they did not

26

burn solid waste). 2013 CISWI Rule, 78 Fed. Reg. at 9,118.

Initially, the EPA proposed a fifth subcategory—burn-off

ovens—but eliminated burn-off ovens after comments

revealed that it had greatly underestimated the number of

units in that subcategory (36 versus 15,000) and that it lacked

the requisite data to set limits for the units. See 2011 CISWI

Rule, 76 Fed. Reg. at 15,734. Of the four CISWI

subcategories, the EPA further divided the ERU subcategory

(for CO emissions only) into coal-fired, biomass-fired and

oil/gas-fired ERUs and it further divided the waste-burning

kiln subcategory (again, for CO emissions only) into long and

preheater/precalcinator kilns. See 2013 CISWI Rule, 78 Fed.

Reg. at 9,118 tbl.2.

The EPA then set numeric MACT limits for the section

7429(a)(4) pollutants.12 See 2011 CISWI Rule, 76 Fed. Reg.

at 15,709-10 tbl.1. Unlike the Major Boilers Rule and the

Area Boilers Rule, the CISWI Rule contains no beyond-the-

floor MACT standards. The EPA also declined to promulgate

work-practice standards, concluding that it had no authority to

do so because section 7429 includes no work-practice

standard provision similar to that in section 7412. See id. at

15,721.

The CISWI Rule shares several features with the Major

Boilers Rule. In the CISWI Rule, for instance, the EPA also

used the UPL, see id. at 15,722-27, as well as the pollutant-

by-pollutant approach, see id. at 15,719-21, in setting MACT

floors. Based in part on the differences between section 7412

12

These pollutants are (1) PM, (2) sulfur dioxide (SO2),

(3) HCl, (4) nitrogen oxide (NOx), (5) CO, (6) lead (Pb),

(7) cadmium (Cd), (8) Hg, (9) dioxins and dibenzofurans, and (10)

opacity (where appropriate). 42 U.S.C. § 7429(a)(4).

27

and section 7429, the CISWI rule has four unique

characteristics we briefly describe.

a. Startups, Shutdowns, and Malfunctions

As discussed, see supra § II.B.1.c, the EPA imposed a

work-practice standard for major and area source boilers

during periods of startup and shutdown but declined to make

any regulatory modification for malfunctions. See 2011

Major Boilers Rule, 76 Fed. Reg. at 15,613; 2011 Area

Boilers Rule, 76 Fed. Reg. at 15,560-61. The CISWI Rule,

however, makes no modification for any of these periods,

mandating instead that the numeric MACT standards “apply

at all times,” even when CISWI units are starting up or

shutting down. 2011 CISWI Rule, 76 Fed. Reg. at 15,711,

15,737-38. The Agency concluded that it had no legal

authority under section 7429 to impose anything but a

numeric MACT standard on CISWI units. See id. at 15,709

tbl.1; see also id. at 15,737-38.

b. The Record-Keeping Requirement

Whether the EPA considers a combustion unit to be a

boiler (and thus subject to section 7412) or a CISWI (and thus

subject to section 7429) turns entirely on whether the unit

combusts “solid waste.” See id. at 15,709. The term “solid

waste” is defined in RCRA, 42 U.S.C. §§ 6901 et seq., and

clarified by EPA regulation, see Identification of Non-

Hazardous Secondary Materials that Are Solid Waste (NHSM

Rule), 76 Fed. Reg. 15,456, 15,457 (Mar. 21, 2011). See also

2011 CISWI Rule, 76 Fed. Reg. at 15,709. If the unit

combusts solid waste, it is a CISWI. Id.

The source owner or operator initially decides whether

the material its combustion unit burns meets the definition of

28

solid waste. See id. at 15,740. For this reason, the CISWI

rule requires that the owner or operator of a combustion unit

that burns materials “not clearly listed as traditional fuels”

keep records explaining how the materials meet the regulatory

definition of “non-solid waste.” Id.; see also 40 C.F.R.

§ 60.2175(v). Failure to do so means, for the purposes of the

EPA, that “the operating unit is a CISWI unit.” 40 C.F.R.

§ 60.2265; see also 2013 CISWI Rule, 78 Fed. Reg. at 9,188.

c. Emissions Averaging

During the notice-and-comment period, certain industry

entities urged the EPA to allow a facility containing more

than one CISWI unit to demonstrate compliance with the

CISWI MACT standards by averaging the HAP emissions of

all units in the facility. See Commercial and Industrial Solid

Waste Incineration Units: Reconsideration and Proposed

Amendments; Non-Hazardous Secondary Materials that Are

Solid Waste (2011 Proposed CISWI Rule on

Reconsideration), 76 Fed. Reg. 80,452, 80,463 (Dec. 23,

2011). Although it allowed facility-wide averaging in the

Major Boilers Rule, the Agency declined to allow it for

facilities with CISWI units. See id. The EPA explained, first,

that “[t]he applicability of CISWI is such that each unit is an

affected facility.” Id. In response to further comments, the

EPA subsequently explained that it did “not believe [it had]

the legal authority to allow emissions averaging in CISWI or

under section [7429] generally because each individual unit is

an affected facility.” Summary of Public Comments and

Responses for Commercial and Industrial Solid Waste

Incineration Units (CISWI Rule—Responses to Comments),

EPA-HQ-OAR-2003-0119-2638-A2 (Dec. 2012), at 195.

29

d. Treatment of Units that Begin Combusting Solid Waste

Finally, in the preamble to the 2011 CISWI Rule, the

EPA stated broadly that “[u]nits that begin combusting solid

waste are considered existing sources under CISWI.” 76 Fed.

Reg. at 15,714 (emphasis added). This categorical

pronouncement drew objections from commentators who

insisted that, if such units experienced an increase in HAP

emissions, the units would meet the statutory definition of

“modified solid waste incineration unit[s],” see 42 U.S.C.

§ 7429(g)(3), and would, accordingly, be subject to the

MACT standards for new units, see id. § 7429(g)(2). In the

subsequent proposed CISWI Rule, the EPA clarified that

“[a]n existing source will not be considered a new source

solely due to a combustion material switch. Assuming new

source applicability is not triggered, existing sources that

change fuels or materials are considered existing

sources . . . .” 2011 Proposed CISWI Rule on

Reconsideration, 76 Fed. Reg. at 80,459.

II. STANDARD OF REVIEW

For each issue, the Petitioners argue that the EPA either

misinterpreted the CAA, acted arbitrarily and capriciously, or

both. We review the EPA’s construction of the statute under

the two-part framework established in Chevron, U.S.A., Inc. v.

Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). At

Chevron step 1, we ask whether the Congress “has directly

spoken to the precise question at issue”; if it has, we “must

give effect to [its] unambiguously expressed intent.” Id. at

842-43. In so doing, we examine the CAA’s text, structure,

purpose, and legislative history to determine if the Congress

has expressed its intent unambiguously. See Bell Atl. Tel. Co.

v. FCC, 131 F.3d 1044, 1047 (D.C. Cir. 1997). If the statute

30

is “silent or ambiguous with respect to the specific issue,” we

proceed to Chevron step 2 and defer to the EPA’s

interpretation so long as it is “based on a permissible

construction of the statute.” Chevron, 467 U.S. at 842-43.

The CAA authorizes the Court to “reverse any [EPA]

action found to be . . . arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” 42

U.S.C. § 7607(d)(9)(A). Our review is “narrow” and we will

“not . . . substitute [our] judgment for that of the

agency.” Motor Veh. Mfrs. Ass’n v. State Farm Mut. Auto.

Ins. Co. (State Farm), 463 U.S. 29, 43 (1983). We “must

uphold an agency’s action where [the agency] ‘has considered

the relevant factors and articulated a rational connection

between the facts found and the choice made,’ and has not

‘relied on [improper] factors.’” Nat’l Ass’n of Clean Air

Agencies v. EPA (NACAA), 489 F.3d 1221, 1228 (D.C. Cir.

2007) (citations omitted) (quoting Allied Local & Reg’l Mfrs.

Caucus v. EPA, 215 F.3d 61, 68 (D.C. Cir. 2000), and State

Farm, 463 U.S. at 43). A rule is arbitrary and capricious if

the agency: (1) “has relied on factors which Congress has not

intended it to consider,” (2) “entirely failed to consider an

important aspect of the problem,” (3) “offered an explanation

for its decision that runs counter to the evidence before the

agency,” or (4) “is so implausible that it could not be ascribed

to a difference in view or the product of agency expertise.”

State Farm, 463 U.S. at 43.

We review the EPA’s factual determinations for

substantial evidence. 5 U.S.C. § 706(2)(E). We also “owe[]

particular deference to EPA when its rulemakings rest upon

matters of scientific and statistical judgment within [its]

sphere of special competence and statutory jurisdiction.” Am.

Coke & Coal Chems. Inst. v. EPA, 452 F.3d 930, 941 (D.C.

31

Cir. 2006). But “[w]e are hesitant to rubber-stamp EPA’s

invocation of statistics without some explanation of the

underlying principles or reasons why its formulas would

produce an accurate result.” NACWA, 734 F.3d at 1145.

III. INDUSTRY PETITIONERS’ CHALLENGES

A. STARTUPS, SHUTDOWNS, AND MALFUNCTIONS

Industry Petitioners raise two sets of challenges to

startup, shutdown, and malfunction periods: (1) a challenge to

the EPA’s failure to take malfunctions into account in the

Major Boilers and Area Boilers Rules and (2) a challenge to

EPA’s failure to take into account periods of startup,

shutdown, and malfunction in the CISWI Rule. For the

reasons that follow, we reject all of the Industry Petitioners’

claims related to startups, shutdowns, and malfunctions.

1. Periods of Malfunction in the Major Boilers and Area

Boilers Rules

First, Industry Petitioners challenge the Major Boilers

and Area Boilers Rules’ failure to take malfunctions into

account in setting MACT floors. See 2011 Major Boilers

Rule, 76 Fed. Reg. at 15,613; 2011 Area Boilers Rule, 76 Fed.

Reg. at 15,560-61. The EPA defends its refusal to account for

malfunctions on the basis of (1) the impracticability of

accounting for events that are necessarily unpredictable, and

(2) the EPA’s assertion that it will use its prosecutorial

discretion to determine on a case-by-case basis whether an

exceedance of emission standards is attributable to an

excusable malfunction or whether applicable regulatory

penalties should be imposed instead. See No. 11-1108 EPA

Br. 38; No. 11-1141 EPA Br. 29.

32

Both sides agree that malfunctions are inevitable in the

operation of area and major boilers. According to the EPA,

“even equipment that is properly designed and maintained can

sometimes fail and . . . such failure can sometimes cause an

exceedance of the relevant emission standard.” 2011 Major

Boilers Rule, 76 Fed. Reg. at 15,613; 2011 Area Boilers Rule,

76 Fed. Reg. at 15,561. Thus, the EPA defined a malfunction

as a “sudden, infrequent, and not reasonably preventable

failure of air pollution control and monitoring equipment,

process equipment or a process to operate in a normal or usual

manner.” 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613

(citing 40 C.F.R. § 63.2); 2011 Area Boilers Rule, 76 Fed.

Reg. at 15,560 (same). In attempting to write rules to account

for emissions, however, the EPA faced an intractable

problem: how to account for a malfunction which is, by

definition, unpredictable in terms of timing, duration,

magnitude, and effect. While the existence of malfunctions is

entirely predictable, the nature of those malfunctions is not,

and it is the malfunction’s nature that affects emissions and

thus is relevant to the application of emission limits.

At first glance, the EPA’s chosen approach to

malfunctions may seem counterintuitive, as the Agency

appears to have several reasonable alternatives: it could

exempt periods of malfunction entirely from the application

of the emission standards; or it could apply the standards to

malfunctions while giving boiler owners the opportunity to

defend against a penalty by demonstrating they were not at

fault for the malfunction. But the EPA has previously been

stymied in its attempts to implement either of these solutions,

as this court has concluded neither approach is consistent with

the Agency’s enabling statutes. For instance, in Sierra Club

III, the EPA attempted to exempt major sources from

complying with emission standards during start up, shut

33

down, and malfunction. See 551 F.3d at 1027-28. This court

rejected that approach because the Congress “required that

there must be continuous section 112-compliant standards”

and so the EPA lacked discretion to exempt certain periods

from compliance, regardless of their unpredictability. Id. at

1027. In NRDC III, this court considered a challenge to the

affirmative defense provision the EPA adopted for persons

defending against civil suits under 42 U.S.C. § 7604(a), which

allows “any person” to “commence a civil action on his own

behalf” against any entity alleged to be in violation of an

emission standard or limitation. The affirmative defense

provision was meant to shield alleged violators from liability

for certain emissions violations caused by “unavoidable”

malfunctions; under the provision, therefore, “the district

court [could] assess penalties only if violators fail[ed] to meet

[their] burden of proving all of the requirements in the

affirmative defense.” NRDC III, 749 F.3d at 1062 (internal

quotation omitted). The court rejected this provision as an

impermissible intrusion on the judiciary’s role. See id. at

1063 (“[U]nder this statute, deciding whether penalties are

‘appropriate’ in a given private civil suit is a job for the

courts, not for EPA.”).

Faced with an obvious dilemma, the EPA arrived at the

approach it defends today. Malfunctions receive no special

treatment and the EPA instead exercises “its enforcement

discretion to address exceedances of emission limits that may

be caused by such uncertain, unpredictable events, on a case-

by-case basis.” No. 11-1108 EPA Br. 38; see also No. 11-

1141 EPA Br. 29. The EPA’s current treatment of

malfunctions thus differs from its invalid affirmative defense

provision because the Agency is exercising its own regulatory

enforcement power on an ad hoc basis outside the context of

citizen suits. When an exceedance occurs during a

34

malfunction, the EPA determines what enforcement action—

if any—it should take by considering “the good faith efforts

of the source to minimize emissions during malfunction

periods, including preventative and corrective actions, as well

as root cause analyses to ascertain and rectify excess

emissions.” 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613;

see also 2011 Area Boilers Rule, 76 Fed. Reg. at 15,561

(same). The EPA also considers whether the exceedance was

in fact “not reasonably preventable” or whether it was

“caused in part by poor maintenance or careless operation.”

2011 Major Boilers Rule, 76 Fed. Reg. at 15,613 (citing 40

C.F.R. § 63.2); see also 2011 Area Boilers Rule, 76 Fed. Reg.

at 15,561 (same).

For our purposes, we need not (indeed, must not)

evaluate the policy implications of the EPA’s regulatory

choice because our review is confined to determining whether

the EPA’s regulation reflects a permissible reading of the

applicable statute under Chevron. Here, we conclude that it

does. The relevant statute requires only that the EPA set

“achievable” standards, 42 U.S.C. § 7412(d)(2), and it defines

achievability to be no less “than the emission control that is

achieved in practice by the best controlled similar source,” 42

U.S.C. § 7412(d)(3). The “best controlled similar source,”

however, is unlikely to be a malfunctioning source, and the

EPA is bound to enact a standard in keeping with emission

limits achieved by that “best controlled similar source.” If

anything, then, the statutory language on its face prevents the

EPA from taking into account the effect of potential

malfunctions when setting MACT emission standards. At the

very least, the language permits the EPA to ignore

malfunctions in its standard-setting and account for them

instead through its regulatory discretion. Our Sierra Club III

decision confirms this. See 551 F.3d at 1027-28. Because the

35

EPA had no option to exclude these unpredictable periods, its

approach is reasonable. We therefore reject Industry

Petitioners’ argument that the EPA either misinterpreted the

CAA or acted arbitrarily and capriciously in failing to account

for malfunctions when setting MACT floors in the Major and

Area Boilers Rules.

Nor do we agree with the Industry Petitioners’ secondary

argument that the EPA acted arbitrarily and capriciously by

failing to set a work-practice or a GACT management-

practice standard for malfunction periods. First, the statute

makes clear that these kinds of standards are to be set at the

discretion of the EPA, so it would be difficult to interpret the

statute consistently with its text while holding that the text’s

permissive language in fact sets out a requirement that the

Agency set work-practice or GACT management-practice

standards. As to work-practice standards, “[t]he

Administrator may, in lieu [of a numeric standard],

promulgate a design, equipment, work practice, or operational

standard, or combination thereof,” and any such standard set

must “in the Administrator’s judgment [be] consistent with

the provisions of subsection (d).” 42 U.S.C. § 7412(h)(1). As

to GACT management-practice standards, “the Administrator

may . . . elect to promulgate” such standards with respect to

certain “categories and subcategories of area sources.” Id.

§ 7412(d)(5). It should go without saying that “may means

may.” McCreary v. Offner, 172 F.3d 76, 83 (D.C. Cir. 1999)

(internal quotations omitted).

Second, the Petitioners have not demonstrated and the

EPA does not concede that setting work-practice or GACT

management-practice standards would even be feasible for

periods of malfunction. As for work-practice standards, the

EPA would have to conceive of a standard that could apply

36

equally to the wide range of possible boiler malfunctions,

ranging from an explosion to minor mechanical defects. Any

possible standard is likely to be hopelessly generic to govern

such a wide array of circumstances. Similar problems exist

for setting GACT management practices. These management

practices would also need to apply to the wide range of

possible malfunctions, and the EPA would need to determine

that the standard would “reduce emissions of hazardous air

pollutants,” an evidence-based standard that is difficult

(perhaps impossible) to apply to the unpredictable

circumstances of malfunctions. 42 U.S.C.

§ 7412(d)(5). Thus, we reject the Industry Petitioners’

argument that the EPA was required to set a work-practice or

GACT management-practice standard for malfunction

periods.

In doing so, we are mindful that the EPA is not the only

entity able to bring enforcement actions under the CAA, but

that private citizens are also empowered to enforce emission

standards by filing suit in district court. 42 U.S.C.

§ 7604(a). Assurances that the EPA will use its prosecutorial

discretion to account for malfunctions would mean little if

private citizens could seek strict enforcement of those same

standards. But as we stated in NRDC III, “the Judiciary, not

any executive agency, determines ‘the scope’—including the

available remedies—‘of judicial power vested by’ statutes

establishing private rights of action.” 749 F.3d at 1063

(quoting City of Arlington v. FCC, 133 S. Ct. 1863, 1871

(2013)). Accordingly, in citizen suits under the CAA, “the

courts determine, on a case-by-case basis, whether civil

penalties are ‘appropriate.’” Id. Boiler operators can argue

that penalties should not be assessed because of an

unavoidable malfunction, and they can support that argument

with other relevant facts, “such as the defendant’s ‘full

37

compliance history and good faith efforts to comply.’” Id.

(quoting 42 U.S.C. § 7413(e)(1)). The EPA can also provide

supporting argumentation as intervenor or amicus. Id. Courts

should not hesitate to exercise their judicial authority to craft

appropriate civil remedies in the case of emissions

exceedances caused by unavoidable malfunctions.

2. Periods of Startup, Shutdown, and Malfunction in the

CISWI Rule

In the CISWI Rule, the EPA made no modification for

periods of startup, shutdown, or malfunction. The Industry

Petitioners argue that failing to account for these periods

violated the EPA’s statutory instruction to set “achievable”

standards. Additionally, the Industry Petitioners claim it was

arbitrary and capricious for the EPA to set work-practice

standards for startup and shutdown periods under the Major

Boilers Rule but not under the CISWI Rule. Both arguments

are without merit.

First, the EPA’s emission standards for small incinerators

do take into account periods of shutdown and startup. The

EPA based its standards for these machines on “short term

stack tests for pollutants,” in which incinerators are monitored

during the course of normal operation, which includes daily

startup and shutdown periods. See 2011 CISWI Rule, 76 Fed.

Reg. at 15,738. Thus, startup and shutdown times are already

incorporated into the standards the EPA set, and what is more,

nearly all pollutants are present in smaller numbers during

startup and shutdown anyway, when incinerators are burning

fuels alone rather than fuels and solid waste. See Standards of

Performance for New Stationary Sources and Emission

Guidelines for Existing Sources: Commercial and Industrial

Solid Waste Incineration Units (2010 Proposed CISWI Rule),

38

75 Fed. Reg. 31,938, 31,964 (June 4, 2010). Given this

reality, the CISWI Rule satisfies the statutory standard of

“achievability” and is not arbitrary and capricious.

Second, as to periods of malfunctions, the same analysis

applies to the CISWI Rule as applies to the Boilers

Rules. The EPA adopted a reasonable interpretation of the

CAA when it excluded periods of malfunction from its

calculations of achievability given that malfunction periods

are by their very nature unpredictable in terms of their effect

on emissions. The EPA’s decision to account for

malfunctions in its discretion is likewise a reasonable

interpretation of 42 U.S.C. § 7412(d)(2) and (3).

For these reasons, we reject the Industry Petitioners’

challenges to the EPA’s regulatory choices with regard to

periods of startup, shutdown, and malfunction.

B. THE POLLUTANT-BY-POLLUTANT APPROACH

The EPA must look to the performance of the best major

boilers and CISWI incinerators when setting MACT floors for

a pollutant. As described above, for new units, the EPA must

set floors at the level achieved by the best similar unit in each

subcategory. For existing units, the Agency must set floors at

the level achieved by the best 12 per cent of similar units in

each subcategory. 42 U.S.C. §§ 7412(d)(3)(A), 7429(a)(2).

As a result, the EPA had to identify the best performing units

in each subcategory when setting the MACT floors for the

Major Boilers and CISWI Rules. But the EPA often could not

identify a single unit or set of units that controlled all HAPs

better than the other units in the subcategory. Instead, the

EPA sometimes found that a unit might rank among the best

39

in its subcategory at controlling emissions of one HAP, but

among the worst at controlling emissions of a different HAP.

To address this problem, the EPA adopted a “pollutant-

by-pollutant” approach in setting the MACT floors: instead of

identifying the unit or units that best controlled all HAPs in

the aggregate, the EPA used one unit or set of units to set the

MACT floor for, e.g., PM, and used a different unit or set of

units to set the MACT floor for, e.g., HCl. See 2011 Major

Boilers Rule, 76 Fed. Reg. at 15,621-23; 2011 CISWI Rule,

76 Fed. Reg. at 15,720-21. For at least two subcategories of

major boilers—new heavy oil-fired units and existing stoker

coal-fired units—the EPA’s pollutant-by-pollutant approach

resulted in MACT floors that no unit in the subcategory had

achieved in toto. Similarly, for small, remote incinerators

(SRIs), the approach resulted in standards for existing units

that only two of the 28 SRI units had met in toto, and

standards for new units that no existing SRI had met in toto.

The Industry Petitioners challenge the EPA’s use of the

pollutant-by-pollutant approach. According to the Industry

Petitioners, the CAA’s plain language requires the Agency to

identify the best overall unit or set of units—not the best unit

or set of units for a particular pollutant—in each subcategory

when setting MACT floors. They further claim the EPA’s

pollutant-by-pollutant approach was unreasonable with regard

to SRIs because it resulted in a set of emission standards that

no single unit in the subcategory had achieved in practice.

We disagree, and conclude that the EPA’s pollutant-by-

pollutant approach is a reasonable interpretation and

application of the statute.

For the purposes of this challenge, the MACT floor

provisions for major boilers and CISWI units are identical.

40

Under both provisions, the EPA must set emission standards

for new units based on “the emissions control that is achieved

in practice by the best controlled similar unit, as determined

by the Administrator.” 42 U.S.C. § 7429(a)(2) (CISWI); see

also id. § 7412(d)(3) (major boilers). For existing units, the

MACT floor is based on “the average emissions limitation

achieved by the best performing 12 percent of units in the

category.” Id. § 7429(a)(2) (CISWI); see also id.

§ 7412(d)(3)(A) (major boilers).

The Industry Petitioners claim this language

unambiguously forecloses the EPA’s pollutant-by-pollutant

approach. For new units, they assert, the statute requires the

EPA to find the single unit that performs best overall and use

this unit—and only this unit—to set standards for all

regulated pollutants. For example, if Incinerator 3 were

deemed the best overall performer in a subcategory, then the

EPA would use Incinerator 3’s emissions levels to set

standards for PM, CO, and each of the other regulated

pollutants. This would be true even if Incinerator 1 in the

same subcategory had lower CO emissions and Incinerator 2

had lower PM emissions. The Industry Petitioners also make

this argument for existing sources. For these units, under

their interpretation, the mandate to identify the “best

performing 12 percent of units” required the EPA to use data

from the 12 per cent of sources with the lowest overall

emissions in the subcategory. In short, the Industry

Petitioners argue that the best “unit” referred to by the

provision cannot be a “hypothetical composite” of multiple

units that result in standards for new units that no actual unit

has met in practice with regard to every pollutant, or

standards for existing units that 12 per cent of actual units

have not met with regard to every pollutant.

41

The Industry Petitioners read too much into the statutory

language. It is true that the statute requires the EPA to base

MACT standards on what is “achieved” by the best “unit” or

“12 percent of units.” But, as the EPA argues, the statute says

nothing about how the Agency should determine which units

are the best. Cf. Sierra Club v. EPA, 167 F.3d 658, 661 (D.C.

Cir. 1999) (noting that section 7429(a) “on its own says

nothing about how the performance of the best units is to be

calculated”). Both the industry-favored method of choosing

the best overall unit and the EPA’s method of choosing the

best unit as to each particular pollutant facially comport with

the statute’s mandate to determine which units are best.

Because the statute is ambiguous as to how the EPA should

identify those units, we must defer to the Agency’s choice so

long as it is reasonable. See Sierra Club I, 353 F.3d at 990.

Here, the EPA’s choice is reasonable. The statute

provides that emission standards shall reflect “the maximum

degree of reduction in emissions of [regulated pollutants] that

the Administrator . . . determines is achievable for new or

existing units in each category.” 42 U.S.C. § 7429(a)(2); see

also id. § 7412(d)(2). It then provides that the “degree of

reduction in emissions that is deemed achievable for new

units in a category shall not be less stringent than the

emissions control that is achieved in practice by the best

controlled similar unit, as determined by the Administrator.”

Id. § 7429(a)(2); see also id. § 7412(d)(3). Reading these

provisions together, they support a pollutant-by-pollutant

approach. The “best controlled similar unit” language does

not exist in a vacuum; rather, it exists to measure the “degree

of reduction in emissions that is deemed achievable.” Id.

§ 7429(a)(2); see also id. § 7412(d)(3). That “reduction in

emissions” is the reduction in emissions of each pollutant

listed in sections 7429(a)(4) and 7412(b)(1). The EPA’s

42

approach to setting standards on a pollutant-by-pollutant basis

thus comfortably fits within this statutory scheme.

Moreover, the Industry Petitioners have not explained

how their preferred approach would better comport with the

statute. Were the EPA required to determine which units

perform best “overall,” we see at least two possibilities for

how it could do so: First, the EPA could calculate a unit’s

average emissions for each pollutant in consistent units of

measurement, add these emissions together, and then choose

the unit with the smallest overall sum in each subcategory.

But this approach could produce arbitrary results, because the

“best performing” overall unit might emit unusually low

quantities of some pollutants and unusually high quantities of

others. This would mean the emission standards for some

pollutants would be lenient while others would be stringent,

with no principled reason for the difference. Alternatively,

the Agency could identify which source is best overall based

on which emits the lowest level of the riskiest pollutants. But

this approach would require the Agency to rank pollutants’

relative risks without any congressional guidance on how to

do so. This approach would also contravene our previous

understanding of the congressional intent behind the MACT

floor provisions. As we have explained, the MACT floors

“are to be based not on an assessment of the risks posed by

[pollutants], but instead on the maximum achievable control

technology (MACT) for sources in each category.” Sierra

Club I, 353 F.3d at 980.

The Industry Petitioners nevertheless argue that the

CAA’s legislative history supports their preferred approach.

In particular, they point to the floor comments of Senator

Durenberger discussing the potential impact on MACT floors

of mutually incompatible control technologies. 136 Cong.

43

Rec. S17,238 (daily ed. Oct. 26, 1990) (statement of Senator

Durenberger). Mutually incompatible control technologies

cannot be used at the same time and therefore present

regulators with a dilemma. For example, say Technology 1

and Technology 2 cannot be used together. If Technology 1

is better at reducing PM than Technology 2, and Technology

2 is better at reducing CO than Technology 1, the EPA would

have to choose which of the two technologies to factor into

emission standards. In such situations, Senator Durenberger

anticipated that the “EPA should judge MACT to be the

technology which best benefits human health and the

environment on the whole.” Id. The Industry Petitioners

argue this statement demonstrates that Congress intended the

EPA to make an overall determination of which units are the

best performing “on the whole.”

Senator Durenberger’s statement does not support this

broad principle. The statement merely explains that, where

two technologies cannot be used together, the EPA should

base MACT standards on the technology it considers best

overall. Here, the Industry Petitioners do not identify any

relevant control technologies that are mutually incompatible.

Indeed, the EPA found in the CISWI Rule that “there is no

technical reason why [the] air pollution control systems

cannot be combined.” 2011 CISWI Rule, 76 Fed. Reg. at

15,721; see also 2011 Major Boilers Rule, 76 Fed. Reg. at

15,623 (“All available data for boilers and process heaters

indicate that there is no technical problem achieving the floor

levels contained in this final rule for each HAP

simultaneously, using the MACT floor technology.”). There

is thus no reason to believe that the EPA’s current MACT

floor standards cannot be achieved. Instead, the Industry

Petitioners merely insist that no units currently meet the

EPA’s new unit standards with regard to every regulated

44

pollutant in certain subcategories, and only a few sources

meet all of the standards for existing units in the same

subcategories. But, if the statute permits the EPA to

determine which units are best on a pollutant-by-pollutant

basis—and it does—then the EPA’s choice to adopt that

approach does not become unlawful merely because few or no

units have achieved those standards for all pollutants.

Finally, the Industry Petitioners argue that even if the

pollutant-by-pollutant approach is reasonable in some

circumstances, it is arbitrary and capricious as applied to

certain SRIs because it exacerbates certain problems posed by

the “batch” nature of SRIs. As explained at infra § III.E,

SRIs burn waste in small batches. According to the

Petitioners, this means that the SRIs that the EPA identified as

best performing were, in reality, burning cleaner waste at the

time emissions testing was done; they were not actually better

than other units at removing or destroying waste. The

pollutant-by-pollutant approach, the Industry Petitioners

argue, “simply captures the results from units that happened

to be burning wastes with low levels of that particular

pollutant during testing,” and this reality makes it harder for

SRI units to meet emission standards for all pollutants at the

same time. No. 11-1125 Indus. Pet’rs’ Reply Br. 8 (emphasis

omitted).

This argument fails because the Industry Petitioners have

not demonstrated that the Agency considered impermissible

factors, failed “to consider important aspect[s] of the

problem,” or offered an unreasonable explanation for its

decision when setting the MACT floors for SRIs. See State

Farm, 463 U.S. at 43. Rather, their argument is a back-door

attempt to challenge the Agency’s alleged failure to consider

waste inputs, which we reject below at infra § III.E.

45

Petitioners have also not shown that it is infeasible for the SRI

units to meet the MACT floor standards or that any individual

pollutant standard was not achieved in practice by an existing

SRI unit. They merely assert, without evidence, that no

existing unit burning high sulfur garbage can match the SO2

performance achieved by the unit the EPA used to set SO2

standards because that latter unit was burning low sulfur

waste at the time of the emissions testing. But MACT floors

are not unreasonable simply because they are difficult to

achieve in practice. As such, we find the EPA’s pollutant-by-

pollutant approach to be a reasonable interpretation and

application of the statute, and deny the Industry Petitioners’

challenge to the EPA’s use of this approach.

C. THE ENERGY-ASSESSMENT REQUIREMENT

The Major Boilers Rule and the Area Boilers Rule

generally require sources with existing boilers to perform a

one-time energy assessment. In the assessment, facilities

must “identify energy conservation measures”—such as

“process changes or other modifications to the facility”—

“that can be implemented to reduce the facility energy

demand,” thereby “reduc[ing] fuel use.” 2011 Area Boilers

Rule, 76 Fed. Reg. at 15,573; see also 2011 Major Boilers

Rule, 76 Fed. Reg. at 15,632. While facilities must conduct

the assessment, they need not implement its conclusions. See

2011 Area Boilers Rule, 76 Fed. Reg. at 15,573; 2011 Major

Boilers Rule, 76 Fed. Reg. at 15,632.

The logic behind the assessment is straightforward.

Boilers produce HAP emissions when fuel is combusted.

Less combustion means fewer emissions. The EPA primarily

justified the assessment as a beyond-the-floor MACT

requirement under section 7412(d)(2). See 2011 Area Boilers

46

Rule, 76 Fed. Reg. at 15,573; 2011 Major Boilers Rule, 76

Fed. Reg. at 15,632. With respect to certain biomass and oil-

fired boilers located at area sources, the assessment was

justified as a GACT management practice under

section 7412(d)(5). See 2011 Area Boilers Rule, 76 Fed. Reg.

at 15,567.

Industry Petitioners raise three principal challenges to the

energy-assessment requirement, none of which have purchase.

The first challenge claims that the energy assessment

regulates aspects of facilities that are off limits to the EPA—

namely, the energy needs supplied by regulated boilers.

Petitioners point to the language of the CAA, which requires

the EPA to “list . . . categories and subcategories of major

sources and area sources” of enumerated air pollutants. 42

U.S.C. § 7412(c)(1). “For the categories and subcategories

the Administrator lists, the Administrator” must set

“emissions standards under” section 7412(d). Id.

§ 7412(c)(2). As relevant here, the EPA defined the source

categories to include “industrial boilers and commercial and

institutional boilers.” 2011 Area Boilers Rule, 76 Fed. Reg. at

15,557; 2011 Major Boilers Rule, 76 Fed. Reg. at 15,608. To

the extent the assessment concerns parts of the facility other

than the boiler itself, the Industry Petitioners claim it exceeds

the EPA’s authority.

The Industry Petitioners misapprehend both the scope of

the assessment and the CAA. The assessment requires

facilities to evaluate energy systems “located on the site of the

affected boiler,” including “[p]rocess heating[,] compressed

air systems[,] . . . facility heating, ventilation, and air

conditioning systems,” and “[o]ther systems that use steam,

hot water, process heat, or electricity, provided by the affected

boiler.” 40 C.F.R. § 63.11237; see id. § 63.7575. Based on

47

that evaluation, facilities must compile a “comprehensive

report detailing the ways to improve efficiency, the cost of

specific improvements, [anticipated] benefits, and the time

frame for recouping those investments.” 40 C.F.R. pt. 63,

subpt. JJJJJJ tbl.2; id. pt. 63, subpt. DDDDD tbl.3.

Contrary to the Industry Petitioners’ argument, the EPA

has not “regulate[d] virtually every piece of equipment at all

affected facilities.” No. 11-1141 Indus. Pet’rs’ Br. 19. Only

“energy use systems” that “us[e] energy clearly produced by

affected boilers” must be evaluated; facilities need not review

the “total aggregation of all individual energy using segments

of a facility.” 2013 Area Boilers Rule, 78 Fed. Reg. at 7,493

(emphasis added); see also 2013 Major Boilers Rule, 78 Fed.

Reg. at 7,188. The assessment focuses on “discrete segments

of a facility,” such as “production area[s] or building[s]”

associated with a particular boiler. 2013 Area Boilers Rule,

78 Fed. Reg. at 7,493; see 2013 Major Boilers Rule, 78 Fed.

Reg. at 7,188. Energy requirements satisfied by other

sources—not by a HAP-emitting boiler—fall outside of that

mandate. See 2011 Area Boilers Rule, 76 Fed. Reg. at 15,573

(limiting the assessment to “specific portions of the source

that directly affect emissions from the affected boiler”). And

regulated facilities are under no obligation to implement the

results they reach. In essence, rather than setting inflexible

and generally applicable beyond-the-floor numeric limits, the

EPA required facilities to take stock of the actual energy

demands placed on their boilers. By reducing energy

demands and associated fuel consumption, facilities could

reduce HAP emissions. That requirement is more measured

than the Industry Petitioners contend.

And that measured requirement falls within the EPA’s

statutory authority. The CAA authorizes the EPA to regulate

48

“major sources and area sources” of HAPs, and to subdivide

those sources into categories and subcategories. 42 U.S.C.

§ 7412(c)(1), (c)(2). To Industry Petitioners, the authority to

subdivide sources means the EPA may only regulate the

narrowest applicable categorization—in this instance,

commercial and industrial boilers. But the statute does not

require so rigid a reading. While the EPA is permitted to

subdivide sources, each subdivision remains a component of

either a major or area “source.” Dividing sources into

categories and subcategories does not make them any less of a

“source” subject to the EPA’s regulation.

For that reason, the EPA explained that the Rules reach,

respectively, “[a]ny area source facility using a boiler,” 2011

Area Boilers Rule, 76 Fed. Reg. at 15,555 (emphasis added),

and “major source facilities having affected boilers or process

heaters,” 2011 Major Boilers Rule, 76 Fed. Reg. at 15,613

(emphasis added). Likewise, the regulations implementing

the energy assessment requirement apply to those who “own

or operate an existing affected boiler,” not merely to the

boiler itself. 40 C.F.R. § 63.11214(c); see id. § 63.7485.

Going further, the relevant part of the CFR applies, by its own

terms, to the “owner or operator of any stationary source.” Id.

§ 63.1(b)(1).

The Congress’s definition of the terms major and area

source supports this reading. At bottom, both terms refer to a

“stationary source.” See 42 U.S.C. § 7412(a)(1), (a)(2).

Stationary source, in turn, means “any building, structure,

facility, or installation which emits or may emit any air

pollutant.” Id. § 7411(a)(3). Against that backdrop, the Rules

apply to any “building, structure, facility, or installation” that

contains a boiler emitting the specified HAPs. The EPA’s

49

regulatory authority reaches the relevant stationary source, of

which the boiler is part.

That the EPA may regulate stationary sources does not

mean it may regulate every nook and cranny of those sources.

The CAA directs its authority to the establishment of

emission standards; it does not provide some general power to

superintend the business processes of plants and

manufacturing facilities. In this case, however, we have no

occasion to parse the precise parameters of the EPA’s

authority to regulate aspects of area sources. It is enough to

conclude that the challenged energy assessment—which

applies only to systems that “us[e] energy clearly produced by

affected boilers”—falls within the EPA’s authority under the

CAA. 2013 Area Boilers Rule, 78 Fed. Reg. at 7,493; 2013

Major Boilers Rule, 78 Fed. Reg. at 7,188.

In the remaining two challenges, the Industry Petitioners

take issue with the EPA’s justification of the energy

assessment as a beyond-the-floor MACT standard and a

GACT management-practice standard. We reject both

challenges.

The assessment represents a valid beyond-the-floor

MACT standard.13 As discussed, after the Agency sets the

MACT floor, it must determine “whether stricter standards

are ‘achievable,’” Nat’l Lime Ass’n, 233 F.3d at 629 (quoting

42 U.S.C. § 7412(d)(2)), considering costs, “any non-air

13

In addition to challenging the assessment as a beyond-the-

floor measure, the Industry Petitioners claim the assessment

represents an invalid work-practice standard. But “[t]he energy

assessment is not . . . a work practice standard, and EPA makes no

claim that it is.” No. 11-1141 EPA Br. 47 n.9. Therefore, we

decline to address that contention.

50

quality health and environmental impacts and energy

requirements,” 42 US.C. § 7412(d)(2). These “measures,

processes, methods, systems or techniques includ[e], but [are]

not limited to, measures which—

(A) reduce the volume of, or eliminate emissions

of, such pollutants through process changes,

substitution of materials or other

modifications, . . .

(D) are design, equipment, work practice, or

operational standards . . . or

(E) are a combination of the above.

Id. The EPA primarily justified the energy assessment as a

beyond-the-floor measure designed to identify “process

changes or other modifications to the facility” that would

reduce fuel use and thereby reduce hazardous emissions.

2011 Area Boilers Rule, 76 Fed. Reg. at 15,573; 2011 Major

Boilers Rule, 76 Fed. Reg. at 15,632.

The Industry Petitioners argue that the EPA skipped a

step, imposing the energy assessment as a beyond-the-floor

measure without first setting a relevant MACT floor. That is

incorrect. The EPA first set a numeric MACT emissions limit

for the categories and subcategories of sources subject to the

energy assessment. See 40 C.F.R. pt. 63, subpt. JJJJJ tbl.1; id.

pt. 63, subpt. DDDDD tbl.2. The energy assessment

represents a step beyond that—a measure designed to

discover energy efficiencies that, once implemented, could

decrease emissions below the floor level.

Before setting a beyond-the-floor measure, the EPA must

consider whether it is “achievable” based on a number of

51

factors, among them cost, “non-air quality health and

environmental impacts and energy requirements.” 42 US.C.

§ 7412(d)(2). The EPA did so here. To begin, the EPA

adequately considered costs. In the EPA’s estimation, “[t]he

one-time cost of an energy assessment ranges from $2500 to

$55,000 depending on the size of the facility.” 2010 Proposed

Area Boilers Rule, 75 Fed. Reg. at 31,907; National Emission

Standards for Hazardous Air Pollutants for Major Sources:

Industrial, Commercial, and Institutional Boilers and Process

Heaters (2010 Proposed Major Boilers Rule), 75 Fed. Reg.

32,006, 32,026 (June 4, 2010). Because saving fuel saves

money, common sense suggested that sources would often

find the energy assessment “cost-effective” to implement.

2011 Area Boilers Rule, 76 Fed. Reg. at 15,568 (“By

definition, any emission reduction [achieved as a result of the

energy assessment] would be cost effective or else it would

not be implemented.”); see also 2011 Major Boilers Rule, 76

Fed. Reg. at 15,633.

In addition to costs, the EPA considered non-air quality

health and environmental impacts in general terms,

concluding that “improving energy efficiency reduces

negative impacts on the environment.” 2010 Proposed Area

Boilers Rule, 75 Fed. Reg. at 31,907; 2010 Proposed Major

Boilers Rule, 75 Fed. Reg. at 32,026. Given the nature of the

assessment, the EPA’s somewhat terse analysis of health and

environmental impacts suffices. Performing the assessment

involves rudimentary tasks—examining the boiler and

associated energy systems and drafting a report—that do not

impose meaningful health or environmental impacts. The

same holds for the EPA’s consideration of energy use

requirements. Facilities would expend very little energy in

conducting the one-time assessment, and could conserve

52

energy by implementing the results. The assessment therefore

represents a lawful beyond-the-floor measure.

We also find that the assessment is a valid GACT

management practice. With respect to area sources, the EPA

has discretion to require the use of “generally available

control technologies or management practices . . . to reduce

emissions of hazardous air pollutants.” 42 U.S.C.

§ 7412(d)(5). The EPA justified the energy assessment as a

GACT management practice for oil- and biomass-fired

boilers. See 2011 Area Boilers Rule, 76 Fed. Reg. at 15,567.

The Industry Petitioners challenge that justification,

claiming the energy assessment—which does not require

implementation—cannot “reduce emissions of hazardous air

pollutants.” 42 U.S.C. § 7412(d)(5). We disagree. The EPA

did not need to make implementation mandatory to make the

assessment lawful. Under the CAA, the EPA may sometimes

act with a soft touch, rather than a firm hand. Here, the EPA

selected a soft touch, requiring an assessment but not

implementation. It was not unreasonable for the EPA to

conclude, “after considering the structure of the requirement,

the incentives it presents, and the likely behavior of

sources, . . . that sources will find it cost-effective to

implement the conservation measures identified in the energy

assessment.” 2011 Area Boilers Rule, 76 Fed. Reg. at 15,573.

If the results were implemented, HAP emissions would be

reduced. For present purposes, that is enough.

For those reasons, we reject the Industry Petitioners’

challenges to the energy-assessment requirement.

53

D. RECORDKEEPING REQUIREMENT FOR CISWI UNITS

Section 7429 regulates combustion units that burn solid

waste; units that do not burn solid waste will generally be

regulated under section 7412. RCRA defines the term “solid

waste” to mean (in part) “discarded material . . . resulting

from industrial [or] commercial . . . operations.” 42 U.S.C.

§ 6903(27); see id. § 7429(g)(6) (directing that “solid waste”

carry “the meanings established by the Administrator

pursuant to” RCRA). On the same day the EPA issued a rule

setting emission standards for CISWI, it issued a separate rule

fleshing out the meaning of solid waste in the context of

combustion units. See NHSM Rule, 76 Fed. Reg. at 15,456.

The NHSM Rule generally provides that “non-hazardous

secondary materials that are combusted are solid wastes,”14

subject to several exceptions and exemptions. 40 C.F.R.

§ 241.3(a). Among the exceptions, non-hazardous secondary

materials that meet certain “legitimacy” criteria do not qualify

as solid waste. See id. § 241.3(b), (d). Source owners and

operators may also seek a finding from the EPA that

particular materials do not constitute solid waste when

combusted by a third party. Id. § 241.3(c). And the rule

exempts altogether a variety of materials from the definition

of solid waste, including “traditional fuels.” Id. § 241.2.

The NHSM Rule is self-implementing: each source

owner or operator must determine whether combusted

materials meet the definition of solid waste. See 2011 CISWI

Rule, 76 Fed. Reg. at 15,740. To ensure that owners and

14

The NHSM Rule defines non-hazardous secondary material

to “mean[] a secondary material that, when discarded, would not be

identified as a hazardous waste.” 40 C.F.R. § 241.2.

54

operators “review and apply” the NHSM Rule and its

exceptions, the EPA issued strict recordkeeping requirements.

Id. Owners and operators who determine the secondary

materials they combust are not solid waste must “keep a

record” justifying that decision. 40 C.F.R. § 60.2175(v).

Failing to file records carries consequences. For units

combusting discarded material other than traditional fuels, the

failure to “keep and produce records” results in the

determination that “the operating unit is a CISWI unit.” Id.

§§ 60.2265, 60.2875 (containing an identical provision).

Industry Petitioners challenge this last provision of the

CISWI Rule.15 They argue that the EPA cannot automatically

treat units that fail to keep certain paperwork as CISWI units.

Section 7429 permits regulation of “solid waste incineration

units”—not units whose owners fail to file paperwork. As a

result, the Industry Petitioners ask this court to invalidate the

regulatory provision as exceeding the EPA’s statutory

authority.16

We decline the invitation. At Chevron’s first step, we

find that “Congress did not speak directly, let alone clearly, to

15

In their reply brief, the Industry Petitioners clarify that they

do not challenge the EPA’s authority to require sources to keep

records.

16

The Industry Petitioners also argue the EPA arbitrarily

failed to provide sufficient notice of the recordkeeping

presumption. We disagree. The Industry Petitioners had sufficient

notice of the CISWI Rule, which was promulgated after notice and

comment and “give[s] fair warning of the conduct it prohibits.”

Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1328 (D.C. Cir. 1995)

(quoting Gates & Fox Co. v. OSHRC, 790 F.2d 154, 156 (D.C. Cir.

1986)).

55

this issue.” Am. Chem. Council v. EPA, 337 F.3d 1060, 1064

(D.C. Cir. 2003). Section 7429 regulates “solid waste

incineration units,” a phrase that Congress defined “plainly

and broadly to include ‘a distinct operating unit of any facility

which combusts any solid waste material from commercial or

industrial establishments or the general public.’” NRDC I,

489 F.3d at 1257 (emphasis omitted) (quoting 42 U.S.C.

§ 7429(g)(1)). In NRDC I, we vacated an earlier iteration of

the CISWI Rule that narrowed the scope of that definition

beyond what its language would bear. See id. at 1257-58.

When the Congress commanded the EPA to regulate units

that burn “any” solid waste, the Congress meant what it said.

See id.

In this case, the EPA included within the revised CISWI

Rule a presumption designed to enforce the Congress’s

command. Section 7429 nowhere addresses whether the EPA

may establish presumptions to ensure its regulations reach all

sources burning solid waste. At the same time, the Congress

plainly intended the EPA to regulate sources burning “any”

solid waste, a goal presumably advanced by the

recordkeeping presumption. See id. Against that backdrop,

we cannot conclude that the presumption offends the text or

purpose of section 7429.

Moving to Chevron’s second step, we conclude the

recordkeeping presumption is reasonable. In American

Chemistry Council, we upheld a regulation issued under

RCRA defining hazardous waste to include any mixture or

derivative of hazardous substances. See 337 F.3d at 1064-65.

“[B]ecause many mixtures of and derivatives from hazardous

wastes are themselves hazardous, it [was] reasonable for the

EPA to assume that all such mixtures and derivatives are

hazardous until shown otherwise.” Id. at 1065. In that

56

context, it made good sense for the EPA to “[p]lac[e] the

burden upon the regulated entity” to show that a given

substance lacked “hazardous characteristic[s].” Id.

Similar reasoning applies here. The EPA crafted the

presumption to reach sources likely to be burning solid waste,

namely, those burning discarded materials other than

traditional fuels. See 42 U.S.C. § 6903(27) (defining “solid

waste” to include, among other things, “discarded material”);

40 C.F.R. § 241.2 (exempting traditional fuels, defined as

“materials that are produced as fuels . . . that have not been

discarded,” from the definition of solid waste). Such sources

are subject to strict recordkeeping requirements. See 40

C.F.R. § 60.2175(v). Within those confines, placing the

burden on unit operators who have the mandatory obligation

and the information to establish their non-regulable status is

reasonable. Cf. Am. Chem. Council, 337 F.3d at 1065.

There is, however, a difference between the presumption

in this case and the one we upheld in American Chemistry

Council. The CISWI recordkeeping presumption appears to

turn on the failure to file paperwork, rather than the presence

of a regulated substance. However broadly the Congress

defined “solid waste incineration unit” in section 7429, the

Congress did not allow for the regulation of non-waste

burning sources—even when those sources fail to file

paperwork. Indeed, had the EPA attempted to regulate

sources based purely on a failure to file paperwork, we may

well have reached a different conclusion.

But the CISWI presumption does not stretch so far. As

explained, the presumption depends on factors beyond the

mere failure to keep records. Sources subject to the

presumption burn materials likely to qualify as solid waste,

57

and must satisfy demanding recordkeeping requirements. The

EPA acted reasonably when it presumed such sources were

burning solid waste.

Despite the provision’s narrow reach, the Industry

Petitioners fear it will sweep up sources not burning solid

waste. To the extent that possibility exists, sources

wrongfully regulated as CISWI have multiple forms of

recourse. Most obviously, sources can prepare and file the

records they were already required to make under 40 C.F.R.

§ 60.2175(v). They can also avail themselves of procedures

designed to identify non-waste materials in 40 C.F.R. § 241.3.

The existence of these safety valves calms concerns that the

presumption will regulate non-waste burning sources.

We therefore reject the Industry Petitioners’ challenges

to the recordkeeping presumption.17

E. WASTE-STREAM VARIANCE FOR SRI UNITS

The EPA regulated SRIs as a subcategory in the CISWI

Rule. See Memorandum from Eastern Research Group, Inc.,

to Toni Jones, U.S. Environmental Protection Agency, CISWI

Emission Limit Calculations for Existing and New Sources

for the Reconsideration Final Rule (Jones Mem.) (Nov. 16,

2012) (No. 11-1125 J.A. 1159, 1162). There are 28 SRI units,

17

The Industry Petitioners also contend that the CISWI Rule

functions as a form of injunctive relief in violation of 42 U.S.C.

§ 7413(a). That is incorrect. The provision is neither styled nor

operated as a form of injunctive relief. Cf. 42 U.S.C. § 7413(a)

(permitting the Administrator to issue, among other forms of relief,

“an administrative penalty order” or “an order requiring [a person

in violation of EPA regulations] to comply with such requirement

or prohibition”).

58

all of which are located in Alaska, and the EPA had emissions

data for nine of them. Id. As explained supra § I.B.3, the

EPA used the pollutant-by-pollutant approach to establish

MACT emission standards for these units. For new-unit

standards, the EPA determined which of the nine units had the

lowest emissions for a particular pollutant and set the MACT

floor for that pollutant at the level achieved by the identified

unit. See 42 U.S.C. § 7429(a)(2) (explaining that MACT

floors for new units must be set at “the emissions control that

is achieved in practice by the best controlled similar unit”).

When setting MACT floors for existing units, the EPA had to

calculate the average level of emissions achieved by the best

performing 12 per cent of units. See id. It therefore

determined which four sources had the lowest emissions for a

given pollutant and set the emissions standard for that

pollutant at the average level achieved by those four units.

The Industry Petitioners argue that the EPA’s approach

was unlawful because it failed to account for the unique role

that waste inputs play in emissions from SRIs. Unlike larger

incinerators, SRIs burn small batches of waste at a time. Some

batches include cleaner waste, such as wood and cardboard,

while others include waste, such as sewage, that generates

large quantities of SO2 and other pollutants. Moreover,

existing SRIs cannot use certain “end-of-stack” control

technologies like wet scrubbers due to the Alaskan climate.

The Industry Petitioners thus contend that emissions from

SRIs are more closely tied to waste input than are emissions

from other types of incinerators. This difference, they assert,

required the EPA to take into account, when determining

which SRI units were best performing for MACT floor

purposes, the kind of waste an SRI unit was burning at the

time of testing. Because the Agency did not do so, the

59

Industry Petitioners contend the MACT standards for SRIs are

arbitrary and capricious. We disagree.

To support their challenge, the Industry Petitioners

advance two arguments, neither of which has merit.

Petitioners first point to section 7429(a)(3), which directs the

EPA to base emission standards on “methods and

technologies for removal or destruction of pollutants before,

during, or after combustion.” 42 U.S.C. § 7429(a)(3).

According to the Industry Petitioners, this language requires

the EPA to identify best performing units for MACT purposes

by considering which units are best at removing or destroying

pollutants. The Industry Petitioners assert that the Agency did

not do this. Instead, they contend, the EPA set standards

without regard to whether that unit happened to be burning

cleaner waste. And, according to the Industry Petitioners,

remote incinerators in Alaska cannot control their waste

inputs because the core purpose of SRIs is to burn waste that

is impracticably far from municipal landfills. The fact that

emissions levels varied dramatically during test runs for the

SRI units, they claim, is thus the result of random variance in

the type of waste the unit was combusting, rather than any

“method” or “technology” aimed at “removing” or

“destroying” pollutants.

The EPA responds that the approach it adopted for SRIs

complies with section 7429(a)(3) because “waste

segregation”—that is, diverting dirtier waste to landfills and

burning only cleaner waste—is a “method . . . for removal . . .

of pollutants before . . . combustion.” See 42 U.S.C.

§ 7429(a)(3). In fact, during notice and comment, the EPA

estimated that many SRIs would choose to comply with the

MACT standards by segregating their waste instead of by

installing expensive control technologies. See Jones Mem.

60

The Agency also determined that waste segregation was

possible for SRIs because their waste often contained

materials that could be recycled. Id. Finally, the Agency

factored in any additional variance in emissions from these

units by calculating the MACT floors according to the UPL

formula described at supra §§ I.B.1.a, IV.C. For these

reasons, the Agency contends, it did not need to consider

further any variation in emissions that might be caused by

differences in waste inputs for SRIs.

The EPA has the better argument, based on both text and

precedent. Textually, waste segregation plainly can be a

“method[]” for “removal” of pollutants “before” combustion.

See 42 U.S.C. § 7429(a)(3). Accordingly, the EPA, when

setting MACT floors, could not have looked solely to

technologies used to reduce emissions during combustion.

Accord Sierra Club v. EPA (Sierra Club II), 479 F.3d 875,

883 (D.C. Cir. 2007) (per curiam). Instead, the plain

language of section 7429(a)(3) requires the Agency to

consider whether emission reductions can be achieved by

non-combustion-related controls such as using cleaner fuels

or waste inputs. Accord id. The statute supports the approach

that the Agency took here.

Our holding in Sierra Club II confirms that our

conclusion is correct. In that case, the EPA had

acknowledged that kilns emitted lower levels of pollutants

when burning cleaner clay but nevertheless based MACT

standards only on the emission reductions achieved by control

technology during the combustion process. Id. at 882. The

Agency explained that clean clay existed only in certain areas

and that transportation of the clay over long distances was

impractical. Id. The EPA therefore considered only those

emission reductions that were attributable to “deliberate steps

61

kiln operators [took] to reduce emissions rather than to the

‘happenstance’ of being located near cleaner clay.” Id. at

883. But we rejected that approach, finding that “the Clean

Air Act requires neither an intentional action nor a deliberate

strategy to reduce emissions.” Id. Instead, where “non-

technology factors” affect emission levels, we held the EPA

must consider those effects when setting MACT floors. Id.

Applying that same reasoning, the EPA acted reasonably

when it decided to consider the emissions reduction that could

be achieved by waste segregation in SRI units before

combustion. This is true even if an element of

“happenstance” plays into an SRI unit’s ability to segregate

its waste. And, had the EPA instead determined that the best

performers were those SRI units that most effectively reduced

pollutants only during combustion, as the Industry Petitioners

suggest, the resulting MACT standards may have run afoul of

our holding in Sierra Club II. We cannot, as a result, find the

Agency’s choice to avoid that outcome unreasonable.

The Industry Petitioners’ second argument also comes up

short. According to Petitioners, the EPA selected the best

performers for SRIs merely because those units happened to

be burning batches of cleaner waste at the time of the

emissions test. They claim this happenstance resulted in test

data that did not reasonably estimate the typical performance

of the units, and thus misidentified the best performers. See

Cement Kiln, 255 F.3d at 862 (finding that although the EPA

has authority to estimate which units perform best, its

methodology must “provide[] an accurate picture of the

relevant sources’ actual performance”). Petitioners further

argue that the Agency’s use of the UPL method to account for

variability did not fix this problem because the EPA applies

that method only after identifying the best performers.

62

If the record supported this argument, it might well be

persuasive; in NACWA, we accepted a similar contention that

the EPA’s dataset for determining MACT floors must fairly

represent a unit’s typical performance. See 734 F.3d at 1146.

But the record here does not support the Industry Petitioners’

position. None of the evidence on which Petitioners rely can

bear the weight they would have us place on it.

First, Petitioners cite evidence indicating that XTO

Energy, which operates the incinerator that the EPA deemed

the best performer for SO2, was burning low-sulfur “waste

wood, cardboard, and oily waste” during the relevant test

runs. See ConocoPhillips Co., Comment on EPA’s Proposed

National Emission Standards for Hazardous Air Pollutants,

EPA-HQ-OAR-2003-0119 (Feb. 12, 2012) (No. 11-1125 J.A.

1036). But the record does not show that the resulting test

data were unrepresentative of XTO’s typical performance

because the record says nothing about what XTO typically

burns. Id.

Second, Petitioners note that Drift River, the unit the

EPA deemed the worst performer for SO2, had emissions

results similar to XTO Energy’s when burning low-sulfur

waste, but results over 1,000 times higher when burning high-

sulfur waste. See id. (No. 11-1125 J.A. 1032-33). But again,

the record does not say anything about the type of waste Drift

River typically burns or its sulfur content; it merely

demonstrates that the unit’s test results varied greatly from

one run to the next. See id.

Third, Petitioners point to additional test data they

provided for the Kuparuk unit, a source that met the EPA’s

MACT standards for NOx. See id. (No. 11-1125 J.A. 1017,

1027-28). They claim this data shows that the Kuparuk unit

63

“consistently” emits NOx levels exceeding that standard when

burning sewage sludge. Id. This claim is both factually

untrue—as the data reveals exceedances on only one day—

and says nothing about whether the test data that the EPA

used was representative of Kuparuk’s typical performance.

Id.

Instead, the record supports the EPA’s assertion that it

gave Petitioners “multiple opportunities” to present data on

the variability of waste streams for SRIs, but Petitioners never

provided a reasonable empirical basis upon which the Agency

could adjust the MACT standards due to this variability. The

Industry Petitioners have thus not met their burden to show

that the EPA’s test data was unrepresentative of SRI units’

actual or typical performance.

In sum, no record evidence suggests that the current SRI

emission standards are not achievable. The Industry

Petitioners instead offer only general statements about the

“small batch” nature of SRIs and the difficulty of using waste

segregation or other controls in remote locations. These

factors alone do not call into question the EPA’s assertion that

controls such as waste segregation and technology upgrades

are a feasible means of achieving compliance with the MACT

floors that it established. See 2011 CISWI Rule, 76 Fed. Reg.

at 15,730 (explaining that the MACT floors will require SRIs

to employ “the best demonstrated technologies that are

technologically feasible at these facilities,” such as

afterburners and waste segregation, and noting that such

controls “are sufficient to meet the MACT floor limits”). As

a result, the EPA’s action here was reasonable; the Agency

did not need to account further for waste stream variance in

setting MACT floor standards for these SRI units.

64

F. CARBON MONOXIDE AS A SURROGATE

In setting MACT standards for major boilers, the EPA

used carbon monoxide (CO) as a surrogate for several of the

HAPs that the Agency was required to regulate. A surrogate

is another chemical that stands in as a proxy for the regulated

HAP when the EPA sets numeric emission standards. The

EPA regulates the surrogate in order to regulate the HAP,

sometimes because the HAP itself is too difficult to measure.

We have previously approved the use of surrogates where

the EPA’s choice of a surrogate for the HAP is “reasonable.”

See, e.g., Nat’l Lime Ass’n, 233 F.3d at 637. Here, the

Industry Petitioners claim the EPA’s use of CO as a surrogate

was not reasonable for a particular type of emissions—

organic HAP emissions from coal-fired boilers—for two

reasons. First, the EPA based the MACT standards on

datasets that contained numerous “non-detects” for these

organic HAPs. Second, the Agency failed to explain why it

used CO as a surrogate for major boilers, but used work-

practice standards to regulate similar emissions from other

types of boilers in another rule. We find no merit in either

argument and, accordingly, deny this challenge.

The Industry Petitioners base their first argument on a

deficiency in the EPA’s dataset for coal-fired boilers’

emissions—i.e., the dataset contained numerous “non-detects”

for organic HAP emissions. A test result is considered a

“non-detect” when emissions testing returns a value below

that which the test methods are capable of detecting.

According to the Industry Petitioners, multiple non-detects in

a dataset demonstrate that it is “not feasible” to set a numeric

emission standard for the affected HAP. As a result, they

argue, the EPA should have set work-practice standards for

65

these HAPs under section 7412(h)(2), which permits the EPA

to set such standards when it is “not feasible” to set a numeric

emission standard. See 42 U.S.C. § 7412(h)(2).

This argument fails because Petitioners have not

explained how the non-detects here made setting numeric

emissions “not feasible,” as that term is defined in the CAA.

The CAA expresses a clear preference for MACT emission

standards and limits the EPA’s ability to fashion more flexible

work-practice standards. Compare id. § 7412(d)(3)

(providing that emission standards “shall not be less

stringent” than the MACT floor), with id. § 7412(h)(1)

(permitting work-practice standards only if MACT standards

are “not feasible”). To set a work-practice standard for these

emissions, in fact, the EPA would need to find that it is

infeasible to set a numeric standard for a particular HAP. Id.

§ 7412(h)(1). And, as relevant here, the statute defines setting

a numeric standard as “not feasible” where “the application of

measurement methodology to a particular class of sources is

not practicable due to technological and economic

limitations.” Id. § 7412(h)(2)(B).

This is a high bar and Petitioners have not demonstrated

that the non-detects they have identified meet it. During

notice and comment, the Agency reasonably explained that

non-detects are present in many of its datasets because they

are inherent to the imprecision associated with measuring

boiler emissions. See, e.g., 2011 Major Boilers Rule, 76 Fed.

Reg. at 15,623. The EPA’s scientific conclusion that its data

was nevertheless sufficient to set numeric standards receives

an “extreme degree of deference.” Kennecott Greens Creek

Mining Co. v. Mine Safety & Health Admin., 476 F.3d 946,

954-55 (D.C. Cir. 2007) (quotations omitted). And the

Industry Petitioners never explain here why the particular

66

level of non-detects found in this dataset nevertheless made a

numeric standard infeasible. Although the Industry

Petitioners point to several comments asserting that no coal-

fired boiler could meet the current numeric standards in all

HAP categories, these general comments say nothing about

the relevant question under the statute: whether it was feasible

to establish numeric standards for organic HAP emissions in

light of the non-detects in the coal-fired boiler datasets.

We also reject the Industry Petitioners’ second argument

that the EPA needed to explain why it established work-

practice standards for other types of boilers in the unrelated

“Utility MATS” rule. We take an “every tub on its own

bottom” approach to the EPA’s setting of emission standards

pursuant to the CAA. Sierra Club I, 353 F.3d at 986. The

adequacy of the underlying justification offered by the

Agency is what matters in an arbitrary-and-capricious

review—not what the Agency did on a different record

concerning a different industry. Id. As a result, we cannot

find that it was unreasonable for the EPA to use CO as a

surrogate in setting numeric standards for coal-fired boilers on

this basis. Nor can we find that the EPA was required on

reconsideration to explain the discrepancy between its

approach to organic HAP emissions in these two rules, as

Petitioners assert. See id. at 987 (“EPA could have noted

where the bases for its decision in this case differed from

those with respect to other decisions in other cases, as was

done in the EPA’s brief to this court . . . but such explanations

are not required given the different contexts of the various

rulemakings.”).

67

G. HEALTH-BASED EMISSIONS LIMITATION FOR HCL

In the Major Boiler Rule, the EPA chose not to exercise

its discretion to create more lenient emission standards for

hydrogen chloride (HCl) based on health. The Industry

Petitioners challenge this decision as arbitrary and capricious

because, they claim, the Agency considered impermissible

factors in reaching the decision and departed from its previous

position without adequate justification. We disagree and hold

the EPA reasonably chose not to establish a health-based

emissions limitation for HCl.

The EPA generally must establish emission standards for

all listed pollutants emitted from a source category based on

what the best performing similar sources have achieved, i.e.,

the MACT floor. The Agency, however, may consider

adopting alternative health-based emission standards—which

are more lenient—for pollutants with an established health

threshold. See 42 U.S.C. § 7412(d)(4). The statutory

language permitting these alternative standards is

discretionary, providing that “[w]ith respect to pollutants for

which a health threshold has been established, the

Administrator may consider such threshold level, with an

ample margin of safety, when establishing emission standards

under this subsection.” Id. (emphasis added). But, even if the

EPA considers, in its discretion, a health-based emission

standard, the statutory text nowhere requires that the EPA

adopt a more lenient standard than the MACT floor. This

provision thus allows, but does not require, the EPA to adopt

a standard more lenient than the MACT floor, subject to two

critical restrictions: the Agency must determine (1) that there

is an established health threshold, and (2) that the established

threshold would provide “an ample margin of safety.”

68

Using this authority, the EPA considered and adopted

health-based emission standards for HCl in an earlier

rulemaking for major boilers. See 2004 Boilers Rule, 69 Fed.

Reg. at 55,240-41. At the time, the Agency based its decision

on three key findings: a health threshold was established for

HCl, adverse health effects were unlikely at emissions below

that level, and low HCl emissions from major source boilers

made HCl a “particularly well-suited” candidate for more

lenient standards. Id. at 55,241. The EPA also said, however,

that it was not embracing a general policy for HCl, but would

instead “undertake in each individual rule to determine

whether it is appropriate to exercise [the Agency’s]

discretion” to adopt such standards. Id. We later vacated that

rule without considering the merits of the EPA’s HCl

decision. See NRDC I, 489 F.3d 1250.

The EPA again chose to consider a health-based standard

for HCl in the current rulemaking, but this time declined to set

such a standard. 2010 Major Boilers Rule, 75 Fed. Reg. at

32,030. The EPA explained that it continued to interpret its

authority under section 7412(d)(4) to require that it find a

health threshold exists, with an ample margin of safety, before

using its discretion to depart from an established MACT floor.

Id. The Agency reasoned further that, even if it made a

finding that a health threshold exists, the discretionary nature

of the authority allowed it to weigh additional factors when

choosing whether to adopt the more lenient health-based

standard. Id. Those factors included: the potential for

cumulative adverse health effects due to concurrent exposure

to other HAPs or emissions from other nearby sources;

potential impacts of increased emissions on ecosystems; and

reductions in emissions of other pollutants, also known as

“co-benefits,” achieved through enforcement of the HCl

MACT floor. Id. at 32,030-31.

69

Applying this interpretation, the EPA suggested in its

proposed rule that a health-based standard for HCl might not

be appropriate because these additional health and

environmental considerations cautioned against a more lenient

emission standard. Id. at 32,031. The Agency acknowledged,

in particular, that its decision in the 2004 rule was based on

data that considered only the chronic respiratory effects of

HCl exposure. Id. While affirming the validity of those

findings, the EPA explained that those chronic impact studies

did not consider the additional variables it had now identified,

nor did it consider the potential acute or carcinogenic effects

that might be caused by HCl exposure. Id. And, because of

these potential (though unproven) risks, the Agency resolved

that it currently lacked sufficient information to establish an

HCl emission standard that would protect health with an

ample margin of safety. Id. It thus requested additional data

from stakeholders and the regulated community to help

address its concerns, including information regarding the

potential cumulative effects of HCl emissions from boilers

and other nearby sources. Id.

After receiving numerous comments on the issue, the

EPA declined to set a health-based standard in the final rule

for two primary reasons: (1) the comments had not provided

sufficient data on potential cumulative health and

environmental effects caused by HCl emissions from boilers

and other nearby sources; and (2) the comments affirmed the

potential co-benefits that limiting HCl emissions might have

in lowering emissions of other HAP and non-HAP pollutants.

2011 Major Boilers Rule, 76 Fed. Reg. at 15,643-44.

According to the EPA, its consideration of these co-benefits

was not a regulation of other pollutants; rather, it was simply

choosing not to ignore the purpose of the CAA—to reduce the

negative health and environmental effects of HAP

70

emissions—when exercising its discretionary authority under

the Act. Id. at 15,644.

The Industry Petitioners contend that the EPA’s

consideration of the broad potential health and environmental

impacts of HCl rendered the Agency’s decision arbitrary and

capricious. In particular, they argue that the Agency based its

decision on two impermissible factors that were not supported

by the record: (1) the potential cumulative effects of

emissions from boilers and other nearby sources, and (2) the

co-benefits of setting a more stringent MACT floor standard

for HCl. We disagree on both counts.

The statutory text and purpose of section 7412(d)(4)

amply support the Agency’s decision to consider potential

cumulative risks associated with emissions from boilers and

other nearby sources. Although other CAA provisions require

the EPA to set emission standards based on the emissions

from a particular source, section 7412(d)(4)’s plain language

is not focused on emissions from any particular source.

Compare 42 U.S.C. § 7412(d)(3) (instructing the EPA to set

emission standards for sources at the level achieved in

practice by the best controlled similar source), with id.

§ 7412(d)(4) (containing no mention of emissions from a

particular source). The EPA’s consideration of the

cumulative impacts from these emissions is also relevant to

the Agency’s statutory mandate to ensure that a health

threshold would protect health with an “ample margin of

safety.” As such, the Agency had discretion to consider the

potential risks associated with the cumulative emissions of

boilers and other nearby sources under this provision.

The EPA was likewise free to consider potential co-

benefits that might be achieved from enforcing the HCl

71

MACT floor. Section 7412(d)(4)’s text does not foreclose the

Agency from considering co-benefits and doing so is

consistent with the CAA’s purpose—to reduce the health and

environmental impacts of hazardous air pollutants. The

Agency was under no obligation to ignore the CAA’s purpose

in making a final decision on whether to exercise a

discretionary authority.

The Industry Petitioners attempt to refute this

straightforward conclusion by pointing to “restrictions” in

another provision, section 7412(d)(2). No. 11-1108 Indus.

Pet’rs’ Br. 55-56. This provision requires the EPA to

consider costs, non-air quality health and environmental

impacts, and energy requirements in setting maximum

achievable emission standards. Petitioners contend that these

same “restrictions” must be read into section 7412(d)(4). But,

even if we assume Petitioners are correct that these factors

restrict the Agency’s ability to consider other factors under

section 7412(d)(2), that provision furthers the statute’s

command to set the strictest possible emission standards

above what has already been achieved (i.e., the MACT

floors). Section 7412(d)(4), by contrast, is a permissive

authority for the EPA to abandon already achieved emission

standards. We do not read limits on the EPA’s authority to

set more stringent standards into a provision laying out the

EPA’s authority to set more lenient standards. If anything,

the difference between the provisions cuts the other way.

Section 7412(d)(4) does not specify the factors that

Petitioners argue for, while section 7412(d)(2) does. This

difference shows that Congress knew how to provide such

limits where it found them necessary. We thus find no basis

to conclude that the EPA could not consider potential

cumulative effects or co-benefits in rejecting a more lenient

health-based HCl standard.

72

Finally, the Industry Petitioners claim that the EPA’s

decision was arbitrary because the Agency failed to support

its reversal from the 2004 rule, in which it set health-based

emission standards for HCl. Because the EPA changed its

position, the Petitioners contend that the Agency had to

present factual support for its decision to disregard the facts

and circumstances that underlay its prior adoption of a health-

based HCl standard. See FCC v. Fox Television Stations,

Inc., 556 U.S. 502, 516 (2009). The Agency failed to do this,

Petitioners say, because it relied on a data gap regarding the

potential cumulative effects of HCl exposure. But this

argument fares no better than Petitioners’ first.

At the outset, Petitioners misstate the EPA’s burden to

justify its change in policy. Although an agency does not

generally need to provide a more substantial explanation or

reason for a policy change than for any other action, it must

do so where “its new policy rests upon factual findings that

contradict those which underlay its prior policy.” Id. at 515.

In that circumstance, “it is not that further justification is

demanded by the mere fact of policy change; but that a

reasoned explanation is needed for disregarding facts and

circumstances that underlay or were engendered by the prior

policy.” Id. at 515-16. The EPA, therefore, was not required

to refute the factual underpinnings of its prior policy with new

factual data. The Agency only needed to provide a reasoned

explanation for discounting the importance of the facts that it

had previously relied upon. Id.

The EPA did so here by explaining that its prior decision

focused too narrowly on the chronic respiratory effects of HCl

emissions without considering the broader implications of

such emissions on health and environmental conditions. See

2010 Proposed Major Boilers Rule, 75 Fed. Reg. at 32,030-

73

31. In so doing, the EPA neither contradicted nor abandoned

the factual findings it made in its earlier rulemaking. It

instead acknowledged that those findings were more limited

than what it now considered necessary to justify the exercise

of its discretion to set a health-based standard. Id. For

example, the Agency noted that: (1) little research had been

done on HCl’s carcinogenicity or on the toxicity of mixtures

of HCl and other respiratory irritants emitted from boilers;

and (2) the Agency had no data about peak short-term

emissions of HCl from major boilers that might create risks of

acute exposure. Id.

These enumerated concerns were sufficient to support the

Agency’s decision not to adopt a health-based standard.

Section 7412(d)(4) does not require that the EPA present

affirmative factual data to reject a health-based standard. The

provision requires just the opposite: in order to impose a

health-based standard, the Agency must find that a health

threshold can be set that provides an ample margin of safety.

The EPA here determined that it could not do so, in part

because it lacked relevant data like that discussed above.

2011 Major Boilers Rule, 76 Fed. Reg. at 15,643-44. In other

words, the EPA could not determine that any health threshold

would provide an ample margin of safety to protect health.

Without such a finding, the EPA could not invoke its

discretionary authority under the statute. Id. There was thus

nothing impermissible in the EPA’s reliance on a lack of data

in rejecting a more lenient health-based standard. The EPA’s

decision not to adopt health-based emission standards for HCl

was not arbitrary and capricious.

74

H. EMISSIONS AVERAGING OF MULTIPLE CISWI UNITS

IN ONE FACILITY

Certain industry entities urged the EPA to allow facilities

with more than one CISWI unit to demonstrate MACT

compliance by showing that the average HAP emissions

across all units at that location fell under the relevant cap.

They pointed to the EPA’s allowance of emissions averaging

in the Major Boilers Rule but the Agency defended its

disparate treatment because, in its view, “[t]he applicability of

CISWI is such that each unit is an affected facility.” See 2011

Proposed CISWI Rule on Reconsideration, 76 Fed. Reg. at

80,463. It subsequently elaborated that it did “not believe [it

has] the legal authority to allow emissions averaging in

CISWI or under section [7429] generally because each

individual unit is an affected facility.” CISWI Rule—

Responses to Comments, at 195-96. The Industry Petitioners

challenge the disallowance of facility-wide averaging for

CISWIs, arguing that “unit” cannot mean “facility” because

section 7429(g)(1) defines “solid waste incineration unit” as

“a distinct operating unit of any facility” and therefore the

EPA’s rule fails Chevron step 1. They also argue the EPA’s

conflation of “unit” and “facility” is unreasonable, and thus

violates Chevron step 2, because the EPA has allowed

emissions averaging in a different section 7429 rule and in a

number of section 7412 rules.

Although the Industry Petitioners’ point is well taken—

the plain terms of the CAA foreclose the EPA’s conflation of

a CISWI “unit” and “affected facility,” see 42 U.S.C.

§ 7429(g)(1) (“facility” is comprised of “units”)—we agree

that the EPA has no statutory authority to allow emissions

75

averaging under section 7429.18 Section 7429 requires the

EPA to regulate emissions from all “solid waste incineration

units,” 42 U.S.C. § 7429(a)(2); see also id. § 7429(a)(4), and

the CAA defines a “solid waste incinerator unit” as “a distinct

operating unit” of a “facility,” id. § 7429(g)(1) (emphasis

added). In other words, because the CAA mandates that the

EPA regulate each “distinct” CISWI unit in a “facility,” the

EPA cannot allow emissions averaging of all CISWI units in

a facility. See id.

For this reason, the Industry Petitioners’ Chevron

challenge fails, notwithstanding the EPA’s minimal

explanation set forth in its proposed CISWI Rule. It is

axiomatic that an agency must “articulate[] an adequate

explanation for its action,” Int’l Fabricare Inst. v. EPA, 972

F.2d 384, 389 (D.C. Cir. 1992) (emphasis added); see also

State Farm, 463 U.S. at 48, but the EPA’s failure to do so

here cannot create statutory authority that does not exist. And

because the EPA has no authority under section 7429 to allow

emissions averaging of multiple CISWI units in one facility,

the Petitioners’ Chevron argument does not carry the day.19

18

The EPA does have statutory authority under section 7412

to allow facility-wide emissions averaging in the Major Boilers

Rule. See 42 U.S.C. § 7412(a)(1) (“major source[s]” defined as

“any stationary source or group of stationary sources located within

a contiguous area and under common control” (emphasis added));

see also id. § 7411(a)(3) (“stationary source” defined as “any

building, structure, facility, or installation which emits or may emit

any air pollutant”).

19

The EPA concedes that it once allowed, in a different rule,

emissions averaging for units subject to section 7429 but has since

concluded that it does not have the statutory authority to do so.

Although the Industry Petitioners argue that the Agency arbitrarily

76

IV. ENVIRONMENTAL PETITIONERS’

CHALLENGES

A. CARBON MONOXIDE AS A SURROGATE

As explained at supra §§ I.B.1 and III.F, the EPA used

carbon monoxide (CO) as a surrogate for several non-

dioxin/furan organic HAPs when the Agency set the MACT

floors for major boilers. In support of this approach, the EPA

found that both CO and these HAPs were the products of

“incomplete combustion.” 2010 Proposed Major Boilers

Rule, 75 Fed. Reg. at 32,018. The Agency concluded as a

result that CO was a reasonable surrogate because:

(1) minimizing CO emissions would minimize these HAPs;

(2) methods used for the control of these HAP emissions

would be the same methods used to control CO emissions

(i.e., good combustion or using an oxidation catalyst);

(3) standards limiting CO emissions would result in decreases

in these HAP emissions; and (4) establishing emission limits

for individual organic HAPs would be impractical and costly.

Id. Although several commenters challenged aspects of this

reasoning, the EPA ultimately stuck with its decision to use

CO as a surrogate for non-dioxin/furan organic HAP

emissions, without further explanation, in the final Major

Boilers Rule. See 2013 Major Boilers Rule, 78 Fed. Reg. at

7,145 (explaining the EPA was denying Sierra Club’s petition

to reconsider the suitability of CO as a surrogate for non-

organic HAPs based on the reasoning provided by the Agency

in the 2010 proposed rule).

changed its position, the fact that the EPA may have acted outside

its authority in a rule is not at issue here. “[P]revious statutory

violations,” of course, “cannot excuse” new ones. New Jersey v.

EPA, 517 F.3d 574, 583 (D.C. Cir. 2008).

77

The Environmental Petitioners challenge this decision,

arguing that the EPA has not adequately explained how

setting emission standards for CO will accomplish what the

statute plainly requires: that the EPA set emission standards

for organic HAPs at the average level achieved by the best

performers with regard to those HAPs. We agree and remand

to the EPA to adequately explain how CO acts as a reasonable

surrogate for non-dioxin/furan organic HAPs. We do not,

however, vacate the current emission standards because we

conclude that the Agency will likely be able to adequately

explain its decision on remand and that vacatur would prove

substantially disruptive.

The EPA may use a surrogate to regulate HAPs under

section 7412 where “reasonable.” See, e.g., Nat’l Lime Ass’n,

233 F.3d at 637. To be reasonable, the emission standard set

for the surrogate must reflect what the best source or best 12

per cent of sources in the relevant subcategory achieved with

regard to the HAP. See Sierra Club I, 353 F.3d at 984. This

requires the surrogate’s emissions to share a close relationship

with the emissions of the HAP. Id. One crucial factor we

have identified for determining whether that close relationship

exists is the availability of alternative control technologies.

See id. at 985. These technologies regulate the HAP without

impacting a surrogate’s emissions, or regulate the surrogate

without impacting the HAP. Id. As we have explained, the

importance of this factor to our reasonableness analysis “is

clear: if EPA looks only to [the surrogate], but HAPs are

reduced [in another] way that does not reduce [the surrogate],

the best achieving sources, and what they can achieve with

respect to HAPs, might not be properly identified.” Id.

In the Major Boilers Rule, the EPA proposed using CO as

a surrogate because, as relevant here: (1) the lowest possible

78

CO emissions resulted in the lowest possible HAP emissions,

and (2) the same combustion and oxidation control methods

reduce both types of emissions. See 2010 Proposed Major

Boilers Rule, 75 Fed. Reg. at 32,018. But, during notice and

comment, the EPA failed to directly consider and respond to

several comments that introduced evidence suggesting that

other control technologies and methods could be effectively

used to reduce HAP emissions without also impacting CO

emissions, or vice versa. See, e.g., Inst. of Clean Air Cos.,

Comments on National Emission Standards for Hazardous Air

Pollutants for Major Sources, EPA-HQ-OAR-2002-0058

(Aug. 23, 2010), at 20-21 (No. 11-1108 J.A. 822-23);

Responses to Public Comments on EPA’s National Emission

Standards for Hazardous Air Pollutants for Major Sources,

vol. 2, EPA-HQ-OAR-2002-0058 (Feb. 2011) (No. 11-1108

J.A. 1033, 1035-36, 1049-52). The EPA ultimately decided to

use CO as a surrogate for all non-dioxin/furan organic HAPs

in its final rule without ever addressing whether such

alternative control technologies and methods might be used to

lower organic HAP emissions further. See 2011 Major

Boilers Rule, 76 Fed. Reg. at 15,654; 2013 Major Boilers

Rule, 78 Fed. Reg. at 7,138. Instead, the Agency responded

by doubling down on its assertion that both CO and organic

HAP emissions were the product of poor combustion and, as a

result, optimal combustion would minimize the emissions of

both CO and non-dioxin/furan organic HAPs. 2013 Major

Boilers Rule, 78 Fed. Reg. at 7,145. But this response was no

response at all to the substantial concerns raised in the

comments that other variables might also affect emissions.

Although we afford an agency’s scientific decision “an

extreme degree of deference,” see Kennecott Greens, 476

F.3d at 954-55 (quoting Hüls Am., Inc. v. Browner, 83 F.3d

445, 452 (D.C. Cir. 1996)), we cannot uphold an agency

79

decision that does not consider all relevant factors or fails to

establish a reasonable connection to the facts in the record.

Cf. Ethyl Corp. v. EPA, 51 F.3d 1053, 1064 (D.C. Cir. 1995).

The EPA could not conclude that CO acts as a reasonable

surrogate in this statutory context without at least considering

a key factor: whether the best performing boilers might be

using alternative control technologies and methods that

reduce organic HAP emissions beyond what they achieve by

regulating CO alone. See Sierra Club I, 353 F.3d at 985. We

therefore reject the EPA’s contention that its reason for using

CO as a surrogate—that good combustion would minimize

both CO and non-dioxin/furan organic HAP emissions—was

alone sufficient to support its decision.

We recognize that there might be a context where a

surrogate’s use is reasonable despite the presence of

alternative control methods or technologies, but the Agency

does not explain why it did not need to even consider whether

such methods might further reduce HAPs here. For example,

if the EPA used a surrogate that was closely correlated to the

HAP and set surrogacy emission standards at a level that

would eliminate HAP emissions altogether, the Agency might

not need to account for alternative control technologies in its

final rule. In that case, the use of the surrogate would not call

into question whether the Agency had regulated the HAP as

required by the statute because, after all, nothing is better than

eliminating HAP emissions entirely. But the Agency offers

us no analogous explanation or supportive data here.

Although it is possible that all of the challenged CO emission

standards are in fact set at such a level, the Agency has not

defended the rule on such reasoning. Indeed, the Agency

failed to consider or even comment directly on this issue,

including whether certain post-combustion processes might

increase organic HAP emissions without a corresponding

80

increase in CO emissions. We cannot ignore such an

oversight in this context.

We reject, however, the Environmental Petitioners’ other

argument that combustion-related issues preclude the EPA

from using CO as a surrogate for non-dioxin/furan organic

HAPs. The Petitioners contend that the EPA’s decision to use

CO was arbitrary because record evidence demonstrated a

breakdown in the correlation between CO and organic HAP

emissions at CO emission levels below 130 parts per million

(ppm). But the EPA explained that this apparent breakdown

was most likely caused by the difficulty of measuring the

regulated HAP at such extremely low emission levels, rather

than by a flaw in the correlation between CO and organic

HAPs. 2013 Major Boilers Rule, 78 Fed. Reg. at 7,144-45;

Memorandum from Eastern Research Group, Inc. to Jim

Eddinger, EPA, Revised MACT Floor Analysis for the

Industrial, Commerical, and Institutional Boilers and Process

Heaters National Emission Standards for Hazardous Air

Pollutants—Major Source (2012 MACT Floor Memorandum)

(Aug. 2012), at 11-12 (No. 11-1108 J.A. 1462-63). This is

precisely the sort of scientific judgment to which we must

defer and accordingly, we do so on this point. See Kennecott

Greens, 476 F.3d at 954-55. The Environmental Petitioners

fail to provide any reason to believe that organic HAP

emissions can, in fact, be accurately measured at such low

levels. And the Agency’s explanation also addresses why the

EPA discounted record evidence regarding extremely high

burn temperatures that demonstrated a potential breakdown in

the CO and organic HAP relationship as HAP emissions

approached zero.

Still, the EPA’s failure to address substantial record

evidence on the potential availability of alternative control

81

technologies or methods rendered the Agency’s use of CO as

a surrogate for certain organic HAPs arbitrary and capricious.

We thus remand the portion of the Major Boilers Rule

providing for CO’s use as a surrogate for non-dioxin/furan

organic HAPs to the Agency for further consideration. We do

not, however, vacate the current emission standards based on

CO’s use as a surrogate. We may remand without vacatur

where there is a likelihood of (1) cure on remand, and (2) a

substantial disruptive effect that would result from vacatur.

See Heartland Reg’l Med. Ctr. v. Sebelius, 566 F.3d 193, 197-

98 (D.C. Cir. 2009). Here, vacatur would cause substantial

disruptive effects by removing emission limits for the

regulated HAPs. And it is likely that the EPA will be able to

adequately explain its use of CO on remand after properly

considering the matter. As a result, we decline to vacate the

current standards in the interim.

B. EXCLUSION OF CERTAIN UNITS FROM MACT ANALYSIS

In the Major Boilers Rule, the EPA created subcategories

based primarily on the fuel combusted. See 2013 Major

Boilers Rule, 78 Fed. Reg. at 7,142. To qualify for certain

subcategories, the EPA required that a source burn a fuel

mixture comprised of only 10 per cent of the subcategory-

defining fuel. See, e.g., id. at 7,193 (“Unit designed to burn

solid fuel subcategory means any boiler . . . that burns . . . at

least 10 percent solid fuel . . . in combination with liquid fuels

or gaseous fuels.” (emphasis added)). Notwithstanding the

low bar for inclusion, we conclude, and discuss at greater

length below, see infra § IV.J, that the EPA reasonably

exercised its discretion when it subcategorized boilers this

way.

82

We cannot say the same about the EPA’s exclusion of

certain high-performing units from its MACT-floor

calculation. Although the EPA allowed sources that combust

only 10 per cent of a subcategory-defining fuel to join that

subcategory, it declined to consider emissions from any

source that burned less than 90 per cent of the subcategory-

defining fuel when determining the average emissions level of

the best performing sources in setting MACT floors for

existing sources. And when it set a subcategory’s MACT

floors for new sources, the Agency declined to consider the

emissions levels from any source that did not burn 100

per cent of the fuel. This disparate treatment makes a

difference; several sources excluded from the MACT-floor

determination were among the best performing sources (or, in

some cases, the single best performing source) in that fuel-

based subcategory.

The CAA, however, demands that source subcategories

take the bitter with the sweet. Section 7412 mandates,

without ambiguity, that the EPA set the MACT floor at the

level achieved by the best performing source, or the average

of the best performing sources, in a subcategory. See 42

U.S.C. § 7412(d)(3)(A), (B). It thus follows that if the EPA

includes a source in a subcategory, it must take into account

that source’s emissions levels in setting the MACT floor.

The Agency, however, claims discretion to omit from

MACT-floor computation sources it considers dissimilar. In

support, it cites section 7412(d)(3), which provides that

MACT standards must be no less stringent than “the best

controlled similar source, as determined by the [EPA].” Id.

§ 7412(d)(3) (emphases added). Our decision in Sierra Club

II, 479 F.3d 875, however, forecloses this argument. In

Sierra Club II, the EPA set MACT standards for brick and

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ceramic kilns. Id. at 879. For some subcategories, the EPA

based its MACT-floor determination on “the pollution control

devices used by the second-best performers,” not the best

performers. Id. (emphasis added). Although the EPA argued

that it “reasonably construe[d] the term ‘best performing’ . . .

to allow it to consider whether retrofitting kilns with a

particular pollution control technology is technically

feasible,” id. at 880 (alterations in original), we held that the

EPA could not circumvent the requirement that it base the

MACT floor “on the emission level actually achieved by the

best performers (those with the lowest emission levels).” Id.

at 880-81 (citing Cement Kiln, 255 F.3d at 861) (emphasis in

original). We reach the same conclusion here.

The EPA tries to distinguish Sierra Club II, arguing that

the issue in that case “was whether [the] EPA could exclude

all units using the most-effective emission control technique

because it might not be applicable to all existing units”;

however, “[h]ere, [the] EPA is excluding a test result that is

unrepresentative of typical operations of units in the

subcategory, and thus is inappropriate to use in establishing

the MACT floor.” No. 11-1108 EPA Br. 81. But it makes no

difference whether the EPA exempts from consideration units

with certain highly effective technology or units with

impressive test results driven by the fuel combination it

combusts. Either approach contravenes our holding in Sierra

Club II that the EPA cannot ignore “the emission level

actually achieved by the best performers (those with the

lowest emission levels)” in the subcategory. 479 F.3d at 880

(emphasis omitted). In any event, the EPA has not simply

excluded aberrant test results; it has excluded an entire class

of units—those burning less than 90 per cent of the

subcategory’s fuel—even though every one of those units fits

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the subcategory’s parameters. This is no different from what

we rejected in Sierra Club II.

The EPA insists that if a source is “unrepresentative of

typical operations of units in the subcategory,” it is

“inappropriate to use [it] in establishing the MACT floor.”

No. 11-1108 EPA Br. 81. Not so. “The idea is to set limits

that, as an initial matter, require all sources in a category to at

least clean up their emissions to the level that their best

performing peers have shown can be achieved.” Sierra Club

I, 353 F.3d at 980 (citing 42 U.S.C. § 7412(d)(3)). For this

reason, an unusually high-performing source should be

considered; indeed its performance suggests that a more

stringent MACT standard is appropriate. Accordingly, we

vacate the MACT standards for all major boiler subcategories

that would have been affected had the EPA considered all

sources included in the subcategories.20

C. UPPER PREDICTION LIMIT

Sections 7412 and 7429 create MACT-floor criteria that,

for our purpose, are materially the same. Compare 42 U.S.C.

20

In its brief, the EPA argued that the Environmental

Petitioners’ challenge was moot either because the challenged

MACT standards had been remanded for other reasons or because

inclusion of the allegedly dissimilar sources would not have

affected the MACT standard. During oral argument, however, it

conceded that it misunderstood the scope of the Petitioners’

argument, which argument challenges unremanded MACT

standards that have in fact been affected by the EPA’s decision to

omit certain high-performing sources from its MACT-floor

analysis. See Oral Arg. Recording pt. B at 48:28-49:22. We

believe that the Environmental Petitioners’ challenge is not moot

and has not been waived.

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§ 7412(d), with id. § 7429(a)(2). In both provisions, the CAA

mandates that MACT floors have maximum stringency but

also be continuously achievable. See id. § 7412(d)(2), (k); id.

§ 7429(a)(2); id. § 7602(k). Satisfying the statutory criteria is

no easy task, especially because no source emits any HAPs at

a constant

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