The US Supreme Court today put on hold the US Environmental Protection Agency's (EPA) latest plan to crack down on NOx emissions from power plants and industrial sources.
The court, in a 5-4 decision, issued a nationwide stay of the EPA's so-called "good neighbor" plan, siding with industry groups and petitioning states, meaning EPA cannot enforce the plan until pending legal challenges are heard by the US Court of Appeals for the DC Circuit.
The good neighbor plan targets NOx emissions from large industrial facilities that drift across state lines and cause air quality violations in other states.
EPA will take "immediate action" regarding its Cross-State Air Pollution Rule (CSAPR) power plant emissions trading program, which falls under the good neighbor plan, the agency said, but it did not elaborate on what that might entail.
The majority opinion, written by justice Neil Gorsuch, acknowledged that both sides of the case had strong arguments relating to the outcome of a potential stay, but ultimately took issue with how EPA made its final determination of cross-state emissions. Specifically, Gorsuch noted that the agency did not properly explain how the effectiveness of its good neighbor plan would be affected if some states did not participate — especially since many states were already questioning the legality of EPA's rejections of their ozone-reduction plans.
EPA, for its part, had argued that it did address the question raised by the court when it introduced a "severability provision" in its final good neighbor plan, which stipulated that should any aspect of the plan be stricken down in a specific state, it would remain operational in all other states. But the court majority did not think this was an adequate explanation.
In a rather strong dissent, justice Amy Coney Barrett noted that the majority opinion minimized EPA's authority in making sure states meet air quality standards. She also noted the court failed to consider that the agency's disapprovals of state ozone reduction plans might actually be valid since, despite the good neighbor plan already being stayed in 12 states, no regional court has ruled against the plan's validity.
Barrett also said the majority did not identify evidence showing that the emissions limits placed on states — in other words, the effectiveness of the "good neighbor" plan — would change depending on the number of participating states, noting that EPA's emissions analyses and accompanying budgets were state-specific.
The good neighbor plan, which EPA finalized last year, was designed to reduce NOx emissions that contribute to ground-level ozone. It included more-stringent emissions caps for power plants as part of an expanded CSAPR Group 3 seasonal NOx market with 22 states, as well as NOx limits for industrial facilities in 20 states starting in 2026. The changes were intended to help downwind states meet the 2015 federal air quality standards for ozone.
But the plan had been stayed in 12 states by regional circuit courts that are reviewing the legality of EPA's rejection of those states' ozone plans, leading to significant uncertainty in CSAPR markets and record-low allowance prices. Argus last assessed Group 3 NOx at $1,250/short ton.
Industry groups and petitioning states praised the decision. The American Petroleum Institute said the court's action will prevent "the risk of electric power outages and crippling delays to industrial supply chains for now."
Environmental groups criticized the Supreme Court decision, noting that the opinion did not address the adverse public health impacts of ozone pollution despite being well into the summer when ground-level ozone is at its peak. Arguing that the court should rule with a "deferential standard", much of the majority opinion relied on a "tenuous argument" that EPA did not provide a sufficient explanation for its action relating to its latest good neighbor plan, said Sam Sankar, an attorney and vice president of environmental group Earthjustice.
