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EPA has proposed rules that would require 38 states amend their Startup, Shutdown, Malfunction (SSM) provisions through what is commonly referred to as a “SIP Call.” These proposals affect the ambient-based standards in State Implementation Plans (SIP). The proposed SIP Call is partly consistent with EPA’s historical interpretation of SSM under the Clean Air Act (CAA), in that, automatic exemptions of applicable limits are not permissible. However, EPA has substantially changed its stance on the authority to grant affirmative defense from civil penalties and the requirement to apply emissions limitations on a continuous basis. The potential implications of these actions include an increase in state and federal enforcement actions, as well as an increase in citizen suits brought against industry.

EQ Fall 2014 - SSM Photo

These EPA actions are a result of a June 2011 Petition for Rulemaking by the Sierra Club (petitioner) and the agency’s subsequent settlement agreement.1 The petitioner argued three common SSM issues were contrary to the CAA: 1) affirmative defense from monetary penalties; 2) automatic or discretionary exemptions from applicable limits; and 3) use of interpretive letters from states to resolve ambiguity in SIPs. The petitioner argued that emissions limits must be “continuous” and that state, federal, and SSM rules should not bar enforcement by EPA or citizens for excess emissions. In accordance with the most recent iteration of the settlement agreement, EPA shall take final action to grant or to deny the SSM Petition by May 22, 2015.2

The first proposed SSM SIP Call rule was published in the Federal Register on February 22, 2013. EPA acknowledged that some SIPs contain outdated provisions that were not allowed per EPA SSM Policy3 such as automatic/discretionary exemptions, and EPA granted the petitioner’s request on this point. EPA also relied upon its 1999 SSM Policy in denying the petitioner’s request regarding the use of affirmative defense from civil penalties for unplanned malfunctions. The February 2013 proposal did reflect a new stance by EPA that affirmative defense provisions, which had previously been allowed for short infrequent events, are not appropriate for startup/shutdown periods. A total of 36 states are affected by the February 2013 SIP Call. Overall, this approach was not a significant shift from historical EPA guidance, although many states would need to revise their SIPs.

Since February 2013, a DC Circuit Court ruled in a separate action that EPA did not have the authority to include affirmative defense to malfunctions in the technology-based Portland Cement NESHAP standards.4 As a result, EPA proactively published a supplemental SSM SIP Call rulemaking on September 17, 2014 proposing 17 states remove the affirmative defense option related to malfunctions. This action represents a significant change in EPA’s interpretation of the CAA and its own SSM Policy.

Petition Argument 1. SSM Affirmative Defense
What is SSM?

Start-Up/Shutdown/Malfunction (SSM) events are periods of exceedance of an applicable emission limitation (i.e., excess emissions) related to a startup, shutdown, or malfunction of a source. For the February 2013 and September 2014 SIP Call, EPA is addressing those SSM events that exceed standards developed specifically to attain or maintain the National Ambient Air Quality Standards (NAAQS - i.e., ambient-based standards).

  • Malfunction - EPA guidance defines malfunctions as un- planned, “sudden and unavoidable breakdown of process or control equipment.” 1 Some SIPs use equivalent terms such as “upset” and “breakdown.” Note that it is possible for a malfunction to occur during source startup, shutdown, or normal operation. Malfunction emissions are not reasonably foreseeable and there- fore are generally neither authorized by nor considered during the development of state or federal rules.
  • Startup/Shutdown - In contrast, startup and shutdown are predictable planned periods of operation. Emissions may be higher during startup or shutdown due to oper- ational considerations or control technology limitations.

Periods of maintenance are not included in EPA’s SSM Policy or in the proposed SSM SIP Call although a few states do include provisions related to maintenance in their SSM rules.

1 Memorandum: State Implementation Plans (SIPs): Policy Regarding Excess Emissions During Malfunctions, Startup, and Shutdown (dated September 20, 1999)

A main point of the petition requested EPA reconsider its interpretation of the CAA related to civil actions and affirmative defense from penalties. CAA Section 304(a) allows any person to commence a civil action in federal district courts that may allow for penalties due to a violation of an emission standard. As explained in EPA’s 1999 SSM Policy, an affirmative defense could excuse a source from monetary penalties only if certain objective criteria outlined in the SIP are met. EPA clarified that affirmative defenses may not shield a source from potential injunctive relief (i.e., an order to require a source perform, or refrain from performing, a certain action with the purpose of preventing future excess emissions).

The 1999 SSM Policy allowed states to include affirmative defense for malfunctions as well as from short infrequent excess emissions due to startup/shutdown. In November 2012 this policy began to shift when EPA partially approved and partially disapproved a revision to the Texas SIP. EPA stated that affirmative defense for excess emissions from maintenance was not appropriate because affirmative defense should only be provided for when it is infeasible to meet the applicable limit. As the affirmative defense provisions for startup/shutdown were not severable from that of maintenance in the proposed Texas SIP, EPA disapproved affirmative defense for both maintenance and startup/shutdown while it was approved for malfunctions. In July 2011, a court upheld EPA’s affirmative defense decisions for the Texas SIP.5 In keeping with this shift in policy, EPA’s February 2013 proposed SIP Call allowed for affirmative defense from unplanned malfunctions but not due to planned startup/ shutdown activities.

In the 2014 Portland Cement NESHAP Decision, the court ruled that EPA did not have the authority to allow for an affirmative defense from malfunctions in the technology-based NESHAP standards. As explained in the court brief, as an administrative agency, the EPA may assess administrative penalties; however, judges retain the authority to award civil penalties. Affirmative defense provisions interfere with that judicial authority. As a result of that decision, EPA proposed in the September 2014 SIP Call, that all affirmative defense provisions be removed from SIPs.

Petition Argument 2. Automatic or Discretionary Exemptions

EPA SSM Policy has historically prohibited the use of automatic exemptions in SIPs. Certain states’ SIPs include either automatic exemptions (i.e., excess emissions during SSM are permitted) or discretionary exemptions (i.e., excess emissions during SSM are permitted based on a demonstration to the agency). The petitioner argued that these SSM exemptions are contrary to the definition of “emission limitation” in CAA Section 302(k) that requires a limit of the quantity, rate, or concentration of a pollutant on a continuous basis and that the exemptions excuse a source from civil penalties contrary to CAA Section 304(a). EPA was generally in agreement with the petitioner and identified states with automatic or discretionary exemptions in the proposed February 2013 SIP Call. The September 2014 proposed SIP Call did not revisit this issue.

Petition Argument 3. Reliance on Interpretive Letters from States

The petitioner also argued that reliance on letters of interpretation from the state is insufficient as: they are not necessarily apparent from the text of the state regulations themselves; they may be difficult to locate; and their enforceability may be difficult and complex. EPA denied this element of the petition. In the preamble to the March 2013 proposed SIP Call, EPA agreed that SIPs must be sufficiently clear that regulated entities, regulators, and the public can understand the SIP requirements but finds that interpretive letters are acceptable to support the regulatory text. EPA further supports use of interpretive letters to avoid the lengthy administrative process of updating the SIP simply to resolve a perceived ambiguity.

Comments on Proposed SIP Call

In the proposed SIP Call rules, EPA solicited comments from states as well as regulated entities. States’ objections on the rule included the following:

  • States were excluded from the settlement discussions
  • Concern that the SIP Call will result in a costly, unnecessary rulemaking processes
  • SIP Call deadline will be difficult to meet
  • EPA lack of review of actual emissions data during SSM events and related lack of demonstration that current SIP will not ensure NAAQS compliance
  • Misinterpretation of how states implement their SSM provisions

Regulated entities made the following objections:

  • Significant costs for regulated facilities without demonstration of environmental benefit
  • A significant number of Title V and minor source operating permits would need to be reviewed and potentially revised
  • Infrequent/short SSM events likely have little potential to cause a violation of such NAAQS supported by actual ambient monitoring data in many areas
  • The Portland Cement NESHAP decision was not addressing affirmative defense in SIP rules
  • CAA emissions limitation definition requires a limitation on a continuous basis but not necessarily an unchanging limitation
Planning for the Future of SSM

Although there may be additional legal action and additional proposals by federal, state, industry, and public interest groups before finalization of new SSM Policy, there is no question that the future of SSM will look different as compared to the historical loose implementation of SSM Policy/rules. Facilities with sources affected by the state SSM rules that EPA had found deficient should begin developing compliance strategies in the near future by: (1) identifying and categorizing all potential SSM events, (2) quantifying related emissions, and (3) evaluating options for compliance. Some items to consider during these steps are included in this section.

  • Identify potential SSM events with a review of the following:
    • Operating procedures
    • Vendor specifications and work orders
    • Defining begin and end of startup/shut down events
    • Emergency/malfunction reports submitted
    • Excess emissions reports submitted
    • On-site interviews with operators, supervisors, and managers
  • Categorize potential SSM events based on similarity and cause
    • Planned vs. unplanned
    • Routine vs. non-routine
    • Authorized vs. unauthorized
    • Startup vs. shutdown vs. malfunction
    • Previously reported vs. not been previously reported
    • Reportable vs. non-reportable
    • Preventive vs. non-preventive
  • Calculate emissions for potential SSM events
    • Uncontrolled emissions estimates
    • Immediate SSM event notifications
    • Periodic deviation or excess emissions reports
    • Annual emissions inventories
  • Evaluate options for demonstrating compliance during startup/shutdown as well as eliminating the cause of upsets
    • Develop redundant systems for planned startup/shutdown
    • Deploy temporary control equipment during startup/ shutdown to meet limits
    • Better manage malfunctions (develop “root cause” analyses)

EQ Fall 2014 - SSM Chart

Companies will also want to consider how upset emissions will be addressed for permitting projects. Planned emissions (startups/shutdowns) historically were required to be included in potential emissions; whereas, upsets have not been traditionally considered part of potential to emit. The PSD/NNSR rules, CAA, judicial decisions, and EPA guidance, for the most part, do not address upsets in potential emissions. The question remains how upsets should be considered potential emissions when they are unpredictable and out of the control of an industrial site.

If the 2014 SSM Proposal is approved as proposed, states will be required to evaluate special emission limits, control measures, or control techniques to provide industrial sites a means of compliance. Companies, therefore, may need to make changes to physical equipment or operating practices to comply with emission limits leading to potential permitting action. Advance planning and participation in the SIP rulemaking process provided though public notice and comment may be beneficial as states will be required to respond within 18 months of the final SIP Call.

What about NESHAPs?

National Emssions Standards for Hazardous Air Pollutants (NESHAPs) are technology-based standards promulgated to regulate emissions of toxic air pollutants from a list of industrial sources referred to as “source categories.” As with EPA’s SSM Policy regarding SIPs, treatment of SSM in the NESHAPs have changed significantly.

1994 Subpart A General Provision SSM

  • 40 CFR 69.6(f)(1) and (h)(1) SSM Exemption - Emission standards apply at all times except during periods of SSM and as noted in the specific subpart.
  • 40 CFR 69.6 (e) General Duty - At all times, including SSM, operate and maintain source in a manner consistent with good air pollution control practices for minimizing emissions. Develop and operate in accordance with a SSM Plan.

2009 NESHAP SSM Vacature

  • Subpart A General Provision SSM exemption language was vacated. However, if a particular NESHAP subpart explicitly exempts applicable sources from meeting emission limits during SSM events, then the specific SSM exemption continues to apply until EPA amends the rule.
  • Due to the vacature, EPA starts addressing SSM events as part of the rulemaking process where the following may be included:
    • Limits may apply at all times including startup/shutdown (appropriate because of the length of the emissions were not expected during startup/shutdown); or
    • Limits or work practice maybe established for startup/shutdown; and
    • Affirmative defense allowed for malfunction (as EPA believed that a malfunction is not a distinct operating mode, and emissions that occur during malfunctions do not need to be factored into development of standards).

2014 Portland Cement NESHAP decision (Natural Resources Defense Council (NRDC) v. EPA, 749 F.3d 1055)

  • D.C. Circuit court decided that EPA lacked authority to include an affirmative defense provision in NESHAP. Basis for the Court’s decision was CAA Section 304(a) which gives the authority over assessing civil penalties to the courts, not EPA. In accordance with the decision, the courts would determine, on a case-by-case basis, whether civil penalties are “appropriate” when excess emissions occur.
  • As comments are received and the final rule is adopted, impacts on industry may be extensive as design and operational changes may need to occur. Proposed changes to this MACT may then impact other MACT standards and how SSM are addressed for other industries.


1 Sierra Club Petition to Find Inadequate and Correct Several State Implementation Plans under Section 110 of the Clean Air Act Due to Startup, Shutdown, Malfunction, and/or Maintenance Provisions (dated June 30, 2011).
2 Eighth Modification of Settlement Agreement, Sierra Club et al. v. Jackson; No. 3:10-cv-04060-CRB (dated June 10, 2014).
3 State Implementation Plans: Policy Regarding Excess Emissions during Malfunctions, Startup, and Shutdown (dated September 20, 1999).
4Natural Resources Defense Council v. EPA, 749 F.3d 1055 (2014) “the Portland Cement NESHAP decision”
5Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir.2013), cert. denied 134 S. Ct. 387 (2013).