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October 29, 2021
SSM exemptions are not consistent with CAA

On September 30, 2021, the EPA announced a new guidance memo withdrawing the previous guidance memo issued on October 9, 2020, that carved out exemptions for excess emissions in startup, shutdown, and malfunction (SSM) events for larger emitters.

Industry analysts believe this signifies difficult permitting approvals ahead, as well as new State Implementation Plan (SIP) calls for many states.

The EPA stated it “is returning to its 2015 policy [because SIP] provisions that provide exemptions from air emissions limits during periods of [SSM] or that provide affirmative defense provisions are not consistent with the Clean Air Act [CAA] and would not generally be approvable. The reinstated 2015 Policy will ensure that all modes of source operation, including periods of SSM, have emissions limitations in place that can be appropriately enforced in all communities and populations across the affected states, including minority, low-income and indigenous populations overburdened by pollution.”

The abandonment of the 2020 guidance means states and emitters will face greater pressure to address SSM emissions during the permitting process.

“In 2015, EPA determined SSM exemptions do not allow an emission limitation or standard to apply ‘continuously,’ thereby creating a substantial risk that excess emissions could result in a NAAQS violation,” writes Brownstein Hyatt Farber Schreck LLP in Lexology. “The 2020 guidance reversed that decision, finding SSM exemptions were allowed provided a SIP had ‘overlapping planning requirements’ that, collectively, ensured attainment and maintenance of the NAAQS. In withdrawing the 2020 guidance, EPA stated that among multiple deficiencies in the 2020 policy, it did not adequately address the CAA’s requirement that ‘all emission limitations apply on a continuous’ basis.’ As a result, sources across all sectors likely will need to account for routine and predictable emissions from SSM events when permitting, and build these anticipated emissions into requested permit or alternate permit limits. Among other things, this could result in sources exceeding major source thresholds, and will require a better assessment by operators of foreseeable SSM events and their anticipated emissions consequences.”

The Agency also announced plans to revisit state-specific SSM SIP call withdrawals for Iowa, North Carolina, and Texas finalized in 2020.

“The three withdrawals were based on policy and statutory interpretations that were also included in the 2020 Memorandum; and, therefore, it is appropriate to revisit these actions and consider whether they should be altered in light of the agency's withdrawal of that guidance memorandum and its reinstatement of the 2015 Policy,” according to the guidance memo. “These withdrawals were notice-and-comment rulemaking actions, so we will be undertaking notice-and-comment rulemaking actions to reconsider whether any of the findings underlying those actions should be retained in light of the EPA's reaffirmation of the 2015 Policy.  In the course of reconsidering those actions, the EPA will take comment on any policy or interpretations that are the basis for any replacement or modified action.

“In light of uncertainty about the agency's SSM policy that was introduced with the three state­specific SSM SIP call withdrawals noted above and by the issuance of the 2020 Memorandum, many of the EPA actions necessary to implement the 2015 SSM SIP Action have been delayed. Along with the reinstatement of the 2015 Policy, the agency renews its commitment to implementing the pending SIP calls, which remain in place, and intends to take additional SIP actions consistent with the 2015 Policy.”

The Brownstein Hyatt Farber Schreck article speculates this is an indication that industry subject to these regulations should expect more stringent reviews of state SIP SSM provisions moving forward.

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