Third Circuit Reverses EPA “Reactivation” Policy for PSD

A three-judge panel for the U.S. Court of Appeals for the Third Circuit has held that the Clean Air Act (“CAA”) bars the EPA from requiring facilities that are restarting after being shuttered to undergo to strict, Prevention of Significant Deterioration (“PSD”) permitting. In the Opinion, Port Hamilton Refining & Transportation LLP v. EPA, the three-judge panel vacated the EPA’s 2022 decision requiring a refinery to obtain a PSD permit when the shuttered facility reopened. According to the panel, the CAA “unambiguously limits the PSD Program’s application to newly constructed or modified facilities. The refinery is not new and has not undergone a ‘modification’ as the Act defines the term.” Under the Policy, an existing facility is considered “new” if the EPA determines that it has been “permanently shut down” when it ceases operations. If a facility has been idled, then it is not “new” under the policy and does not need to apply the stringent PSD requirements to restart. The court used a six-part test to determine if a plant had been permanently shut down which included the amount of time it was out of operation; the reason for the shut down; statements by the owner regarding intent; the cost and time required to reactivate; the status of permits; and ongoing maintenance and inspections conducted during the shutdown. For more information, please contact one of the attorneys in SGR’s Environmental Practice.

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