The Environmental Protection Agency’s (“EPA’s”) guidance, issued Sept. 30, 2021, revoking the Trump-era Startup, Shutdown, and Malfunction (“SSM”) guidance signals difficult permitting decisions ahead for emitters across industrial sectors, and is likely to result in another round of State Implementation Plan (“SIP”) calls for multiple states.

On Sept. 30, 2021, EPA withdrew an October 2020 Trump administration guidance document, which allowed certain exemptions for SSM emissions from larger sources. The October 2020 decision was based on EPA’s determination that SIPs could permissibly contain SSM exemptions for limited periods and still meet National Ambient Air Quality Standards (“NAAQS”) provided other portions of the SIP had sufficient planning and other requirements. In contrast, the 2015 policy that preceded the Trump administration’s guidance, provided that neither exemption nor affirmative defense provisions in state SIPs were consistent with the Clean Air Act (“CAA”). In place of the withdrawn 2020 Guidance, EPA will now reinstate its 2015 policy, which states that inclusion of such exemption and affirmative defense provisions in state SIPs will “generally be viewed as inconsistent” with the requirements of the CAA.

Last week’s pullback of the Trump 2020 guidance puts further pressure on sources and states to address SSM emissions during permitting. 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. 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 reversal may also result in additional SIP calls. The September 2021 memorandum identifies plans to revisit the North Carolina, Texas and Iowa SIPs, which contain SIP provisions based on the 2020 guidance. The withdrawal memo, however, indicates EPA “intends to take additional SIP actions consistent with the 2015 Policy.” Thus, operators should expect a more fulsome review of state SIP SSM provisions.