In a split decision announced earlier today (Utility Air Regulatory Group v.  Environmental Protection Agency, No. 12-1146, slip op. (June 23, 2014)) the United States Supreme Court ruled the Environmental Protection Agency exceeded its authority in requiring sources of air pollution to comply with the Clean Air Act’s prevention of significant deterioration (PSD) and Title V major source permitting programs solely because of a source’s greenhouse gas emissions.  Further, the Court held that EPA is permitted to include greenhouse gas emissions in determining best available control technology (BACT) for sources that would be subject to PSD on the basis of emissions other than greenhouse gas emissions is a permissible interpretation of the Act.

The Court ruled that its earlier decision (Massachusetts v. EPA, 549 U.S. 497 (2007)), holding that the Clean Air Act’s definition of “air pollution” includes greenhouse gas emissions for general Act-wide purposes, does not compel EPA to change its long standing interpretation of that term for purposes of specific programs required under the Act.  Nor does the Act permit the EPA to include greenhouse gas emissions in the PSD and Title permitting programs.  The Court noted that the PSD and Title V programs were designed by Congress to apply to a limited number of larger sources of air pollution and that EPA’s greenhouse gas interpretations constitute an attempted expansion of the agency’s authority without clear congressional authorization.  Furthermore, EPA’s attempt to “tailor” the statutory thresholds that apply to the permitting programs was unauthorized as executive agencies are required to give effect to the clearly expressed will of Congress.

This decision is limited to two specific permitting programs.  The impact of the decision on additional attempts to regulate greenhouse gas emissions under other Clean Air Act programs is, for the moment, uncertain.  What is certain, however, is that the interplay between the Supreme Court’s Massachusetts and UARG decisions will continue to spark further litigation and discussion of the limits of EPA’s authority to regulate greenhouse gas emissions from stationary sources.