The D.C. Circuit Court of Appeals has vacated U.S. Environmental Protection Agency (EPA) air regulations for pollutants that are transported across state lines and contribute to air quality problems. EME Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. 8/12/12). EPA issued the rule, called the Transport Rule or the Cross-State Air Pollution Rule, in August 2011 to implement Clean Air Act (CAA) requirements. The Transport Rule sets emissions-reduction responsibilities for 28 upwind states based on contributions to downwind air quality problems.  

The court held that EPA exceeded its statutory authority under the CAA by requiring reductions for emissions by amounts that might be greater than the affected state’s contribution to downwind air quality problems. The court also faulted EPA’s approach because it might result in some states making reductions “by more than their own significant contribution to a downwind State’s nonattainment,” in effect requiring one upwind state to help fix another upwind state’s excessive emissions.  

The court also held that the regulations might impermissibly result in overcontrol with respect to conditions in some downwind states because emission limits were not directly tied to calculations of the extent to which any particular state contributed to a downwind problem. Instead, once it defined the affected states, EPA used a cost-based approach to establish the controls needed and thus the emission reductions to be achieved. Finally, the court found that EPA had improperly circumvented the CAA by directly promulgating a Federal Implementation Plan to achieve the reductions called for by the rule without first allowing the states to develop their own State Implementation Plans.