Appeals court vacates and remands EPA’s Affordable Clean Energy rule

The U.S. Court of Appeals for the District of Columbia Circuit on Jan. 19 issued an opinion that vacates and remands the Environmental Protection Agency’s (EPA) Affordable Clean Energy (ACE) rule while also vacating the EPA’s separate action extending compliance timelines for all rules issued under section 111(d) of the Clean Air Act (CAA).

In addition, the court also denied efforts by coal interests to challenge EPA’s underlying authority to regulate power plants’ greenhouse gas (GHG) emissions under section 111.

The court’s opinion was in the American Lung Association et. al v. EPA proceeding.

The appeals court found that ACE, as well as the repeal of the 2015 Clean Power Plan (CPP), “hinged on a fundamental misconstruction of” CAA section 111(d). The decision rejects EPA’s position that the CAA only allows the agency to craft emissions restrictions that apply directly “at the source” of power plants. The position was a departure from the CPP’s sector-wide approach to reducing emissions. “In addition, the ACE rule’s amendment of the regulatory framework to slow the process for the reduction of emissions is arbitrary and capricious.”

In a separate opinion, Judge Justin Walker said he believes EPA was required to repeal CPP, but that it was “wrong to replace it with provisions promulgated under” section 111, adopting arguments by free-market groups that the agency cannot regulate power plants’ GHGs under that section because it already regulates the sector’s air toxics under section 112.

The court’s ruling clears a path for the incoming Biden administration to draft new regulations for existing sources under the CAA. However any new effort to regulate carbon dioxide emissions  from existing sources will likely be challenged and attempts to replace the ACE Rule with a rule that mirrors the Clean Power Plan is risky considering the Supreme Court’s unprecedented stay of the Clean Power Plan in 2016 prior to review by a lower court. Since then, the Court’s conservative majority has grown to 6-3.

The opinion is available here.