On May 7, the Environmental Protection Agency (EPA) published a direct final rule in the Federal Register. The rule allows for rescission of certain Prevention of Significant Deterioration (PSD) permits under the Clean Air Act. The agency took this step in response to the Supreme Court’s decision last year in Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014).

In UARG, the Court struck part of EPA’s so-called Tailoring Rule. In this Rule, EPA had provided that new or modified stationary sources emitting more than a certain amount of greenhouse gases must obtain PSD permits, limiting their emissions of greenhouse gases, whether or not they also emit one or more traditional pollutants at a level sufficient to trigger such a requirement. But because sources emit greenhouse gases in much greater quantities than they do traditional pollutants, applying the express statutory threshold designed with those pollutants in mind could have required EPA to issue permits to millions of sources nationwide. In the Rule, EPA therefore purported to alter the statutory threshold to a much higher level.

The Court found this an impermissible rewriting of the statute, and held that EPA cannot set its own thresholds for greenhouse gases that depart from the statutory thresholds. However, the Court further held that EPA under the PSD program can impose greenhouse gas limitations on “anyway sources”—those that would be subjected to the PSD regime anyway, because they emit one or more traditional pollutants at levels above the statutory threshold.

On remand, the D.C. Circuit amended its judgment accordingly. Following that development, EPA issued this direct final rule to amend its PSD regulations to allow for rescission of permits issued to the non-anyway sources—i.e., those sources that had been required to obtain such permits solely due to their greenhouse gas emissions. While this affects a relatively small group of sources, those sources that were covered by the PSD regime for greenhouse gases alone now stand to be freed of that burden.

However, the rule does not actually rescind any permit. Instead, it provides the authority to do so to the regulating entity, either a state or local program (for those states which have enforcement authority delegated from the federal government), or EPA (for those states in which the federal agency itself runs the permitting program). A source that wants its PSD permit rescinded will need to seek rescission and show that it does not qualify as an anyway source.

EPA published this measure as a direct final rule, without taking public comment first, because the agency views it as a noncontroversial change and does not anticipate adverse comment. If the agency does receive adverse comment, however, it will withdraw the direct rule and address the comments in a subsequent final rule. Any interested parties should submit comments by June 8, in any event, because there will not be a second comment period.