Washington (Platts)--8Feb2008

The US Circuit Court of Appeals for the District of Columbia on Friday
struck down US Environmental Protection Agency regulations for controlling
mercury emissions from power plants, reversing the Bush administration's
attempt to allow utilities to meet a cap on the hazardous air pollutant
through a cap-and-trade system.
The court ruled that EPA could not remove or "delist" new and existing
coal-fired power plants from a section of the Clean Air Act that would require
each unit to use technology to reduce emissions of mercury, a potent
neurotoxin. "We hold that the delisting was unlawful," the court said.
In addition, the three-judge panel in the decision for State of New
Jersey v EPA said the electric generating units (EGUs) must remain listed
under the CAA's Section 112, which requires EPA to regulate power plants for
hazardous air pollutants with "maximum achievable control technology."
The court said EPA had conceded that if power plants remain listed under
section 112 "then the [Clean Air Mercury Rule] regulations for existing
sources must fall."
EPA issued its CAMR regulations in 2005 that first removed coal-and
oil-fired generating units from the list of sources of hazardous air
pollutants regulated under section 112 of the Clean Air Act. The agency then
set state budgets for total mercury emissions and encouraged the establishment
of a mercury cap-and-trade program for power plants.
Environmental groups and states sued EPA over the rule, saying it would
create mercury hotspots where emitters would buy permits to pollute rather
than clean up their emissions.
In addition to New Jersey, the rule was challenged by California,
Connecticut, Delaware, Illinois, Maine, Massachusetts, Minnesota, New
Hampshire, New Mexico, New York, Pennsylvania, Vermont and Wisconsin. A
host of environmental and public health groups, including Sierra Club and the
American Nurses Association, also joined the suit.
--Cathy Cash, cathy_cash@platts.com