EPA Focus on Carbon Capture Stokes Fight on Clean Air Law Intent

Federal courts are poised to clarify how far the EPA can push technological innovation at power plants, with arguments set over a Biden administration emissions plan before incoming Trump officials may try to quash the rule for good.

Carbon capture technology at the center of the rule is drawing fire from all corners of the power sector, raising the question of whether the Clean Air Act that allows the Environmental Protection Agency to regulate facilities is truly meant to force the development of control technology.

The Biden administration this spring finalized standards aiming to stem climate pollution from coal-fired power plants as a key part of their push to fight climate change and protect public health. A legal barrage of petitions from industry followed at the US Court of Appeals for the District of Columbia Circuit, voicing concerns that the rule would force plant closures.

Critics of the rule argue that its reliance on carbon capture and sequestration, or CCS, makes the standards arbitrary and capricious, since the technology is not adequately demonstrated according to Clean Air Act requirements.

But advocates counter that, not only is CCS tried and tested in other industries, the Clean Air Act is also designed in the spirit of pushing along new developments in control technology.

The idea of “technology forcing"—a strategy used to drive innovation of control technology—is part of the Clean Air Act, but there are guardrails on that term, according to Holland & Hart LLP partner Emily Schilling.

“In the context of carbon capture, every year we move towards broader application of CCUS in industries outside of power plants, that argument becomes I think, more relevant,” Schilling said, referring to carbon capture, utilization, and storage, which makes use of what is captured in the CCS process.

The latest election throws that question—and whether courts will probe it more deeply—into uncertainty. The rule will remain in crosshairs when President-elect Donald Trump takes office, but what legal weapons will be used remain unknown.

Trump may ask for an abeyance of litigation while he crafts entirely new—probably weaker—carbon rules for utilities. But the litigation is already well through the briefing process and a panel at the D.C. Circuit is set to hear arguments in West Virginia v. EPA on Dec. 6, which could chill an abeyance request.

‘Adequately Demonstrated’

The EPA insists the rule doesn’t rely only on the Clean Air Act’s push for control innovations—which is a key argument used against its viability by challengers.

“Petitioners’ portrayal of 90% CCS as dependent upon forward-looking projections is baseless,” the agency said in its first brief in the case. “Although further technological developments will almost certainly occur, EPA’s ‘adequately demonstrated’ determination did not depend upon them.”

Though the line between forcing technology and relying on what’s adequately demonstrated can be thin, Dena Adler of New York University’s Institute of Policy Integrity says Congress always meant for its seminal air law to solely protect public health, “not merely memorialize the status quo.”

“And the track record for earlier power plant rules shows that industry has repeatedly been able to meet regulations much faster and much more cheaply than anticipated,” Adler said.

Biden’s carbon rule drives that question into a brighter spotlight, according to Schilling, but the carbon issue is also where things “fall apart” when applying the technology-forcing standard for coal-fired utilities.

While CCS has been adequately demonstrated in other industries, applying the same standard for coal fired facilities won’t be that simple—there is no alternative for power plants in this rule, so “it’s CCUS or bust,” Schilling said.

That leaves plants with no choice on how to comply, since the limits are so stringent, which flies against the guardrails of technology forcing language, Schilling noted.

“It’s not a crystal ball inquiry,” she said. “Can they do it on the timelines that are in the current rule? I think they’re pushing it. To me, it drives an industry still out of business, it doesn’t drive technology.”

Not a Moonshot

Courts have sided with the EPA before in cases that ultimately gave the agency more flexibility in how far rules could drive innovation versus only having airtight demonstrability.

In Lignite Energy Council v. EPA, industry petitioners lambasted the EPA’s technology requirements under nitrogen oxide limits for industrial boilers as unfeasible and speculative. A D.C. Circuit panel disagreed, and decided that the agency had more flexibility in defining what “demonstrated” means.

“EPA may compensate for a shortage of data through the use of other qualitative methods, including the reasonable extrapolation of a technology’s performance in other industries,” according to the opinion.

Despite the tension over what technology-forcing should mean, the EPA still can’t legally say that they’re just “going for a moonshot,” said Victor Flatt, associate director of the Case Western Reserve University Coleman P. Burke Center for Environmental Law.

“EPA cannot do that legally under the technology provisions of the Clean Air Act,” Flatt said. “In the sense that we say it’s ‘technology-forcing’ it is, in that, if you look at the Clean Air Act as a whole, it pushes technology forward.”