United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 8, 2013 Decided July 12, 2013

No. 11-1101

CENTER FOR BIOLOGICAL DIVERSITY, ET AL.,

PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY AND LISA PEREZ 

JACKSON,

RESPONDENTS

AMERICAN FOREST & PAPER ASSOCIATION, INC., ET AL.,

INTERVENORS

Consolidated with 11-1285, 11-1328, 11-1336

On Petitions for Review of Administrative Action

of the Environmental Protection Agency

Ann Brewster Weeks argued the cause for petitioners. 

With her on the briefs were Lisa J. Zak, Frank Rambo, 

Morgan Butler, Kevin P. Bundy, Vera P. Pardee, Brendan R. 

Cummings, David D. Doniger, Meleah A. Geertsma, and 

Nathaniel S.W. Lawrence. Jonathan F. Lewis entered an 

appearance. 

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Perry M. Rosen, Attorney, U.S. Department of Justice, 

argued the cause for respondents. With him on the brief was 

Scott Jordan, Attorney, U.S. Environmental Protection 

Agency.

Roger R. Martella Jr. argued the cause for respondentintervenors. With him on the brief were Timothy K. Webster, 

Lisa E. Jones, Joel F. Visser, Charles H. Knauss, Shannon S. 

Broome, Norman W. Fichthorn, and Allison D. Wood. 

William R. Murray Jr. entered an appearance.

D. Cameron Prell, Neal Cabral, and Lisa Sharp were on 

the brief for amicus curiae National Association of Clean 

Water Agencies in support of respondents.

Before: HENDERSON, TATEL, and KAVANAUGH, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge TATEL.

Concurring opinion filed by Circuit Judge KAVANAUGH.

Dissenting opinion filed by Circuit Judge HENDERSON.

TATEL, Circuit Judge: As part of its ongoing effort to 

limit the emission of greenhouse gases, the Environmental 

Protection Agency issued a rule deferring regulation of

“biogenic” carbon dioxide—non-fossil-fuel carbon dioxide 

sources such as ethanol—for three years. Citing scientific 

uncertainty over how to account for biogenic carbon dioxide’s 

unique role in the carbon cycle, EPA justified this “Deferral 

Rule” on the basis of the de minimis, one-step-at-a-time, and 

administrative necessity doctrines. Several environmental 

groups now petition for review, arguing that EPA’s 

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invocation of these doctrines was arbitrary and capricious. For 

the reasons set forth below, we vacate the Deferral Rule.

I.

Under the Clean Air Act, if EPA determines that an “air 

pollutant . . . may reasonably be anticipated to endanger 

public health or welfare,” 42 U.S.C. § 7521(a)(1), it must

regulate that air pollutant under the Prevention of Significant 

Deterioration of Air Quality (PSD) and Title V permitting 

programs. See Coalition for Responsible Regulation, Inc. v. 

EPA, 684 F.3d 102, 132–44 (D.C. Cir. 2012) (per curiam).

The PSD program, which applies to areas of the country that 

are classified as in “attainment” or “unclassifiable” for any 

national ambient air quality standard, 42 U.S.C.

§§ 7407(d)(1)(A), 7471, requires certain specified “major 

emitting facilit[ies],” such as iron and steel mills, to obtain 

state-issued construction permits if they have the potential to 

emit over 100 tons per year (tpy) of “any air pollutant,” and 

all other sources to obtain such permits if they have the 

potential to emit over 250 tpy, id. §§ 7475, 7479(1). Under 

the PSD program, sources need permits before starting a 

construction or modification project. See id. §§ 7411(a)(4),

7475, 7479(2)(C). To obtain a PSD permit, covered sources

must install the “best available control technology” (BACT) 

for all regulated air pollutants—even for air pollutants whose 

emissions levels are insufficient to trigger the PSD permitting

requirement. Id. § 7475(a)(4). In other words, if a source

emits two regulated air pollutants—say sulfur dioxide and 

particulate matter—but triggers the PSD permitting 

requirement only because it emits 500 tpy of sulfur dioxide, it

must install BACT for both. The Title V program requires 

operational permits for stationary sources that have the 

potential to emit at least 100 tpy of any regulated air pollutant. 

See id. §§ 7661–7661f.

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In response to the Supreme Court’s decision in 

Massachusetts v. EPA, 549 U.S. 497 (2007), EPA published

an Endangerment Finding for greenhouse gases—a “wellmixed” and “aggregate” group of six gases, including carbon 

dioxide (CO2). Endangerment and Cause or Contribute 

Findings for Greenhouse Gases Under Section 202(a) of the 

Clean Air Act (“Endangerment Finding”), 74 Fed. Reg. 

66,496, 66,499 (Dec. 15, 2009). Based on that finding, EPA 

issued a “cascading series of greenhouse gas-related rules and 

regulations.” Coalition for Responsible Regulation, 684 F.3d 

at 114. Partnering with the National Highway Traffic Safety 

Administration, EPA first promulgated the Tailpipe Rule, 

which established motor-vehicle emissions standards for 

greenhouse gases. See Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel Economy 

Standards; Final Rule, 75 Fed. Reg. 25,324 (May 7, 2010).

Because the “Tailpipe Rule automatically triggered regulation 

of stationary greenhouse gas emitters under” the PSD and 

Title V permitting programs, EPA then issued two rules 

“phasing in stationary source greenhouse gas regulation.” 

Coalition for Responsible Regulation, 684 F.3d at 115. In the 

Timing Rule, EPA concluded that major stationary emitters of 

greenhouse gases became subject to the PSD and Title V 

permitting requirements on January 2, 2011—the same date 

greenhouse gases were subjected to regulation under the 

Tailpipe Rule. See Reconsideration of Interpretation of 

Regulations That Determine Pollutants Covered by Clean Air 

Act Permitting Programs, 75 Fed. Reg. 17,004, 17,007 (Apr. 

2, 2010). And in the Tailoring Rule, EPA, recognizing that 

literal application of the PSD and Title V emissions 

thresholds would cover millions of sources, “tailored” the

statutory thresholds to “reliev[e] [the] overwhelming 

permitting burden[] that would . . . fall on permitting 

authorities and sources.” Prevention of Significant 

Deterioration and Title V Greenhouse Gas Tailoring Rule

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(“Tailoring Rule”), 75 Fed. Reg. 31,514, 31,516 (June 3, 

2010). The Tailoring Rule staggers the applicability of the 

PSD and Title V permitting programs, “starting with the 

largest [greenhouse gas] emitters.” Id. at 31,514. Under Step 

One of the Tailoring Rule, which became effective January 2, 

2011, the PSD and Title V permitting programs apply only to 

“ ‘anyway’ PSD [and Title V] sources, that is, sources that are 

subject to PSD [and Title V] anyway due to their emissions of 

conventional pollutants,” i.e., non-greenhouse-gas pollutants.

Id. at 31,567. Under Step Two of the Tailoring Rule, which 

became effective six months later, the PSD and Title V

permitting programs apply to sources with the potential to 

emit specified amounts of greenhouse gases. See id. at 31,516.

In Coalition for Responsible Regulation, Inc. v. EPA, this 

court upheld the Endangerment Finding and Tailpipe Rule as 

neither arbitrary nor capricious, concluded that the PSD and 

Title V permitting programs were unambiguously triggered 

when EPA issued the Tailpipe Rule, and rejected challenges 

to the Timing and Tailoring Rules on standing grounds. See 

Coalition for Responsible Regulation, 684 F.3d at 113–14.

This case involves biogenic carbon dioxide emissions, 

which EPA defines as carbon dioxide emissions “directly 

resulting from the combustion or decomposition of 

biologically-based materials other than fossil fuels and 

mineral sources of carbon.” Deferral for CO2 Emissions from 

Bioenergy and Other Biogenic Sources Under the Prevention 

of Significant Deterioration (PSD) and Title V Programs 

(“Deferral Rule”), 76 Fed. Reg. 43,490, 43,493 (July 20, 

2011). Biogenic carbon dioxide emissions are generated from, 

among other things, “the biological decomposition of waste in 

landfills, wastewater treatment[,] or manure management 

processes,” “fermentation during ethanol production,” and the 

“combustion of biological material, including all types of 

wood and wood waste, forest residue, and agricultural 

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material.” Id. To use a familiar example, power plants running

on coal emit fossil-fuel carbon dioxide whereas power plants

burning feedstocks emit biogenic carbon dioxide.

Unlike fossil fuels that emit greenhouse gases only 

through human-induced combustion, biogenic sources emit 

carbon dioxide via both natural and anthropogenic processes. 

A forest fire, for example, will emit biogenic carbon dioxide 

regardless of whether it was sparked by lightning or as part of 

a clear-cutting operation. Dead trees emit carbon dioxide as 

part of the decomposition process. See Deferral for CO2

Emissions From Bioenergy and Other Biogenic Sources 

Under the Prevention of Significant Deterioration (PSD) and 

Title V Programs: Proposed Rule (“Proposed Deferral Rule”), 

76 Fed. Reg. 15,249, 15,252–54 (Mar. 21, 2011).

Significantly for the issue before us, biogenic carbon 

dioxide has a “unique role and impact . . . in the carbon 

cycle.” Deferral Rule, 76 Fed. Reg. at 43,496. “Through 

relatively rapid photosynthesis, plants absorb CO2 from the 

atmosphere and add it to their biomass, which contains 

roughly 50% carbon by weight, through a process called 

sequestration.” Proposed Deferral Rule, 76 Fed. Reg. at 

15,252. Carbon dioxide emitted by fossil-fuel combustion is 

reabsorbed over millennia, leading to a long carbon “debt” 

period. By contrast, carbon dioxide released by biogenic 

sources will be sequestered when new plants are grown. The 

extent to which biogenic sources can serve as a carbon “sink”

will depend on the type of source and its life cycle. See id. at 

15,252–54. Given biogenic carbon dioxide’s role in the 

carbon cycle, many state and federal programs treat biofuels 

as “renewable resources and promote bioenergy projects 

when they are a way to address climate change.” Deferral 

Rule, 76 Fed. Reg. at 43,492. But to be clear, once carbon 

dioxide is released into the atmosphere, “it is not possible to 

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distinguish between the radiative forcing associated with a 

molecule of CO2 originating from a biogenic source and one 

originating from the combustion of fossil fuel.” Proposed 

Deferral Rule, 76 Fed. Reg. at 15,254. In layman’s terms, the 

atmosphere makes no distinction between carbon dioxide 

emitted by biogenic and fossil-fuel sources.

In the Tailoring Rule, EPA acknowledged that “biomass 

or biogenic fuels and feedstocks could play [a role] in 

reducing anthropogenic [greenhouse gas] emissions.” 

Tailoring Rule, 75 Fed. Reg. at 31,590–91. Yet responding to 

numerous requests that the Tailoring Rule exempt biogenic 

carbon dioxide emissions, EPA stated that because it “ha[d] 

not analyzed the administrative burden of permitting projects 

that specifically involve biogenic CO2 emissions,” it would 

not take a “final position” on whether an exemption or 

“different treatment of biomass combustion” was warranted. 

Id. at 31,591. As a result, the Timing and Tailoring Rules 

require biogenic carbon dioxide sources to obtain PSD and 

Title V permits.

Shortly after promulgating the Tailoring Rule, EPA 

issued a Call for Information seeking technical and scientific 

information to “evaluat[e] different accounting approaches” 

for measuring biogenic carbon dioxide emissions. Call for 

Information: Information on Greenhouse Gas Emissions 

Associated with Bioenergy an Other Biogenic Sources, 75 

Fed. Reg. 41,173, 41,174 (July 15, 2010). Specifically, EPA 

sought information about how to treat biogenic carbon 

dioxide sources differently for purposes of measuring the 

emissions that trigger the PSD and Title V permitting 

programs. For example, EPA requested comments on how to 

“determin[e] the net impact on the atmosphere of CO2

emissions” and the “appropriate spatial/geographic scale for 

conducting this determination.” Id. at 41,176. Then in March 

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2011, EPA, citing its ongoing efforts to understand the unique 

characteristics of biogenic carbon dioxide, issued a notice of 

proposed rulemaking seeking comment on whether it should 

defer regulation of these sources for a three-year period. See

Proposed Deferral Rule, 76 Fed. Reg. at 15,251. 

Simultaneously, it published a guidance document for 

determining BACT for biogenic carbon dioxide emissions 

from “anyway” sources that were regulated under the PSD 

permitting program at Step One of the Tailoring Rule. See 

Office of Air and Radiation, U.S. EPA, Guidance for 

Determining Best Available Control Technology for 

Reducing Carbon Dioxide Emissions from Bioenergy 

Production (Mar. 2011).

Based on comments and studies received during the 

notice-and-comment period, and following up on the Call for 

Information, EPA issued a rule—the one challenged here—

postponing regulation of biogenic carbon dioxide sources for 

three years. In support of this so-called Deferral Rule, EPA 

repeatedly emphasized that “the issue of accounting for the 

net atmospheric impact of biogenic CO2 emissions is complex 

enough that further consideration . . . is warranted.” Deferral 

Rule, 76 Fed. Reg. at 43,492. It explained:

The information collected to this point underscores 

the complexity and uncertainty associated with 

accounting for biogenic emissions of CO2 and 

indicates that at present attempting to determine the 

net carbon cycle impact of particular facilities 

combusting particular types of biomass feedstocks 

would require extensive analysis and would therefore 

entail extensive workload requirements by many of 

the permitting authorities. In contrast to other 

sources of [greenhouse gas] emissions, these 

uncertainties and complexities are exacerbated 

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because of the unique role and impact biogenic 

sources of CO2 have in the carbon cycle. Further, 

methodologies are not sufficiently developed to 

assure that various permitting authorities would be 

able to perform the necessary calculations reasonably 

and consistently to determine the net atmospheric 

impact in many, if not all, instances.

Id. at 43,496. To dispel these uncertainties, EPA announced 

that “[d]uring the three-year deferral period” it would

“conduct a detailed examination of the science associated 

with biogenic CO2 emissions from stationary sources.” Id. at 

43,492. EPA justified the Deferral Rule by invoking three

principles of administrative law: the de minimis, one-step-ata-time, and administrative necessity doctrines. See id. at 

43,496–99. For instance, EPA reasoned that it would be a 

waste of resources to regulate a biogenic carbon dioxide 

source that has a de minimis impact on the net carbon cycle. 

See id. at 43,499.

The Deferral Rule exempts from regulation biogenic 

carbon dioxide sources that trigger the PSD and Title V 

permitting programs at Step Two of the Tailoring Rule. The 

rule accomplishes this by amending the regulatory definition 

of “greenhouse gases” to exclude biogenic carbon dioxide.

Thus, biogenic carbon dioxide sources that have the potential 

to emit over the statutory thresholds, as modified by the 

Tailoring Rule, need not obtain a PSD or Title V permit. See

id. at 43,493. The so-called “anyway” sources that obtained 

PSD and Title V permits during Step One of the Tailoring 

Rule, however, must still install BACT for their biogenic 

carbon dioxide emissions. See id. at 43,500–01. 

The Deferral Rule contains a sunset provision: absent 

further agency action, on July 21, 2014, biogenic carbon 

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dioxide will be regulated under the PSD and Title V 

programs, as modified by the Tailoring Rule. See id. at 

43,490, 43,507. Although the Deferral Rule is a temporary 

regulation, it functions, in effect, as a permanent exemption 

from the PSD permitting requirement for any biogenic carbon 

dioxide source constructed during the three-year deferral 

period. See id. at 43,499. Exempted sources would have to 

obtain PSD permits only if they undertake a modification

project after the deferral period ends. See id. The Deferral 

Rule is also voluntary. “Each state may decide if it wishes to 

adopt the deferral and proceed accordingly.” Id. at 43,502. At 

least one State, Massachusetts, is currently regulating 

biogenic carbon dioxide sources at Step Two of the Tailoring 

Rule. See Oral Arg. Tr. 3–4.

Center for Biological Diversity and several other

environmental organizations now petition for review. “We 

review the actions of the EPA to determine whether they are

‘(A) arbitrary, capricious, an abuse of discretion, or otherwise 

not in accordance with law; (B) contrary to constitutional 

right, power, privilege, or immunity; [or] (C) in excess of 

statutory jurisdiction, authority, or limitations.’ ” American 

Farm Bureau Federation v. EPA, 559 F.3d 512, 519 (D.C. 

Cir. 2009) (per curiam) (quoting 42 U.S.C. § 7607(d)(9))

(alternation in original).

II.

Before considering the merits of petitioners’ challenge, 

we must determine whether this case is ripe for review. See In 

re Aiken County, 645 F.3d 428, 434 (D.C. Cir. 2011)

(explaining that the “ripeness doctrine, even in its prudential 

aspect, is a threshold inquiry”). Under the prudential ripeness 

doctrine, invoked by our dissenting colleague, see dissenting 

op. at 10–17, courts look at two factors in deciding whether to 

stay their hand: the “fitness of the issues for judicial decision” 

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and “the extent to which withholding a decision will cause 

hardship to the parties.” American Petroleum Institute v. EPA, 

683 F.3d 382, 387 (D.C. Cir. 2012) (internal quotation marks 

omitted). 

The Deferral Rule satisfies the first factor because it 

functions as an exemption from the PSD permit requirement 

for those sources constructed during the deferral period. See 

supra at 10; Oral Arg. Tr. 13 (EPA conceding that the 

Deferral Rule permanently exempts sources constructed 

between July 2011 and July 2014). To be sure, once the 

deferral period ends, these sources’ “biogenic CO2 emissions 

would have to be appropriately considered in any applicability 

determinations . . . conduct[ed] for future stationary source

permitting purposes.” Deferral Rule, 76 Fed. Reg. at 43,499 

(emphasis added). But under the PSD program, a source 

would be required to obtain a permit only for “a major 

modification determination.” Id. Given this, the question 

before us is whether EPA may exempt certain biogenic 

carbon dioxide sources—not just the air pollutant itself—

from the PSD program. This is the type of “purely legal” and 

“sufficiently final” issue that is “fit[] . . . for judicial decision” 

and can be resolved without resort to the prudential ripeness 

doctrine. American Petroleum Institute, 683 F.3d at 387 

(internal quotation marks omitted).

Regarding the second factor, the parties will suffer 

hardship if we decline to decide this issue. We know from 

oral argument that a biogenic carbon dioxide source in 

Allendale, South Carolina, has been constructed without a 

PSD permit, meaning that it has emitted more pollution than it 

otherwise would have but for the Deferral Rule. See Oral Arg. 

Tr. 5–6, 10. There may well be other such sources. Our 

dissenting colleague principally relies on a March 2012

declaration for the proposition that the number of sources 

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impacted by the Deferral Rule is negligible. But we have no 

idea how many biogenic carbon dioxide sources have been 

constructed since March 2012, nor do we have any basis for 

predicting how many biogenic carbon dioxide sources will be 

constructed during the next year. Because the Deferral Rule 

authorizes certain sources to emit more pollutants than they 

would otherwise be allowed to under the Tailoring Rule, this 

dispute is ripe for review.

III.

Petitioners argue that the Deferral Rule violates the Clean 

Air Act’s plain language. They rely on the statute’s definition 

of “major emitting facility”: any “stationary source[]” that 

“emit[s], or ha[s] the potential to emit,” certain specified 

amounts of “any air pollutant.” 42 U.S.C. § 7479(1). Because 

EPA regulates carbon dioxide as an “air pollutant,” petitioners 

contend that the agency has no authority to exempt any 

sources of carbon dioxide, including biogenic sources, from 

the PSD permitting program. Acknowledging the scientific 

uncertainty about biogenic carbon dioxide’s role in the carbon 

cycle, petitioners argue that EPA can regulate biogenic 

sources under the PSD permitting program while accounting

for their unique qualities at the BACT stage. For its part, EPA 

believes that it has authority under the Clean Air Act to treat 

biogenic carbon dioxide sources differently because these 

sources have unique characteristics that were “unquestionably 

unforeseen when Congress enacted [the] PSD” program.

Respondent’s Br. 40. This statutory analysis, however, 

appears nowhere in the Deferral Rule. Instead, the Deferral 

Rule rests on the de minimis, one-step-at-a-time, and 

administrative necessity doctrines. Because the “grounds 

upon which an administrative order must be judged are those 

upon which the record discloses that its action was based,” 

SEC v. Chenery Corp., 318 U.S. 80, 87 (1943), the Deferral 

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Rule must stand or fall on the merits of EPA’s invocation of 

these doctrines.

We can easily reject EPA’s use of the de minimis 

doctrine, which allows agencies to grant regulatory 

“exemption[s] when the burdens of regulation yield a gain of 

trivial or no value.” Alabama Power Co. v. Costle, 636 F.2d 

323, 360–61 (D.C. Cir. 1979). In the Deferral Rule, EPA 

stated that it had authority to exempt biogenic carbon dioxide 

sources that have “a negligible or positive impact on the 

carbon cycle and net atmospheric CO2 levels.” Deferral Rule, 

76 Fed. Reg. at 43,499. In its appellate brief, however, EPA 

expressly disavows this doctrine, explaining that the Deferral 

Rule has a three-year sunset provision whereas the de minimis

doctrine “is used to establish permanent exemptions.” 

Respondent’s Br. 35. Given this concession, the Deferral Rule 

cannot be sustained under the de minimis doctrine.

The one-step-at-a-time doctrine, which EPA does defend,

authorizes agencies to promulgate regulations in a piecemeal 

fashion. EPA explains that it is proceeding one-step-at-atime—that is, postponing regulation of biogenic carbon 

dioxide for three years—in order to give it time to study the 

science underlying these sources and determine its precise

regulatory approach. See Deferral Rule, 76 Fed. Reg. at 

43,497 (“EPA has . . . deferr[ed] the applicability of PSD and 

Title V to biogenic emissions of CO2 from stationary sources 

for only as long as necessary for EPA to complete the needed 

scientific study of these emissions, develop an accounting 

framework, and as appropriate conduct rulemaking specific to 

the unique nature and characteristics of these emission 

sources.”). According to petitioners, however, federal 

agencies have no authority to invoke the one-step-at-a-time 

doctrine “to diverge from [a] clear statutory mandate,” and 

here, they argue, the Clean Air Act unambiguously requires 

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regulation of all carbon dioxide from whatever source.

Petitioners’ Br. 56. But we need not decide whether the onestep-at-a-time doctrine can justify an agency’s noncompliance with a clear statutory mandate or whether the 

Clean Air Act unambiguously requires the regulation of all 

carbon dioxide from whatever source because, as we shall 

explain, EPA’s invocation of the one-step-at-a-time doctrine 

was arbitrary and capricious. See Grand Canyon Air Tour 

Coalition v. FAA, 154 F.3d 455, 477 (D.C. Cir. 1998) 

(determining whether agency’s reliance on the one-step-at-atime doctrine was arbitrary and capricious).

The one-step-at-a-time doctrine rests on the notion that 

“[s]ince agencies have great discretion to treat a problem 

partially, we [sh]ould not strike down [a regulation] if it [is] a 

first step toward a complete solution.” City of Las Vegas v. 

Lujan, 891 F.2d 927, 935 (D.C. Cir. 1989). Eschewing a 

precise doctrinal test for invoking the doctrine, we have 

remarked that the one-step-at-a-time inquiry “is in essence a 

pragmatic one.” National Association of Broadcasters v. 

FCC, 740 F.2d 1190, 1210 (D.C. Cir. 1984). We have

observed that incremental regulation is especially appropriate 

in response to evolving economic and technological 

conditions. See id. at 1210–11. We have also imposed outer 

limits on the one-step-at-a-time doctrine: “it would be 

arbitrary and capricious for an agency simply to thumb its 

nose at Congress and say—without any explanation—that it 

simply does not intend to achieve a congressional goal on any 

timetable at all.” Grand Canyon Air Tour Coalition, 154 F.3d 

at 477. Although the “circumstances under which [an] agency 

may defer [regulation] . . . are [in]capable of being captured in 

a single doctrine,” National Association of Broadcasters, 740 

F.2d at 1210, an agency invoking the one-step-at-a-time 

doctrine must, at a minimum, articulate (1) what it believes

the statute requires and (2) how it intends to achieve that goal.

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Otherwise, reviewing courts will have no basis for evaluating 

whether the agency is in fact taking “a first step toward a 

complete solution.” City of Las Vegas, 891 F.2d at 935. EPA 

itself put it well: “Courts will accept an initial step towards

full compliance with a statutory mandate, as long as the 

agency is headed towards full compliance.” Deferral Rule, 76 

Fed. Reg. at 43,498. 

In this case, however, EPA failed to explain in the 

Deferral Rule what “full compliance” with the “statutory 

mandate” means. Specifically, although the Deferral Rule

spends pages explaining the scientific uncertainty about 

biogenic carbon dioxide sources, the additional research EPA

plans to undertake, and why three more years of study are 

warranted, the rule—as opposed to EPA’s brief here—

nowhere offers an interpretation of the Clean Air Act that 

would allow the agency to treat biogenic carbon dioxide 

sources differently. This deficiency is not merely the result of 

scientific uncertainty. For example, this would be a very 

different case had the Deferral Rule interpreted the Clean Air 

Act as requiring permits only for biogenic carbon dioxide

sources with an adverse impact on the net carbon cycle and 

explained that the agency had deferred regulation due to

scientific uncertainty over which sources meet that standard. 

Under those circumstances, we could have determined

whether EPA had correctly interpreted the statute and 

properly invoked the one-step-at-a-time doctrine. Here, by 

contrast, we simply have no idea what EPA believes 

constitutes “full compliance” with the statute. In other words, 

the Deferral Rule is one step towards . . . what? Without a 

clear answer to that question, EPA has no basis for invoking 

the one-step-at-a-time doctrine.

EPA next invokes the administrative necessity doctrine, 

which permits an agency to “avoid implementing a statute . . .

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by showing that attainment of the statutory objectives is 

impossible.” Sierra Club v. EPA, 719 F.2d 436, 463 (D.C. 

Cir. 1983). Under this doctrine, the agency must also adopt 

the narrowest feasible exemption. See id. (criticizing the 

agency for failing to explore “less taxing ways to enforce the 

law”).

Emphasizing both the possibility that biogenic carbon 

dioxide sources might have a negligible impact on the net 

carbon cycle and the “extensive workload of processing 

permit applications,” EPA found that requiring permits for 

these sources “would frustrate the goals . . . sought to [be]

accomplish[ed] in the Tailoring Rule.” Deferral Rule, 76 Fed. 

Reg. at 43,496. In doing so, EPA rejected a proposed middleground option: requiring biogenic carbon dioxide sources to 

obtain permits but only if they fail to make “any effort to take 

into account net carbon cycle impacts.” Id. Under this 

approach, all biogenic carbon dioxide sources that would have 

triggered the modified statutory thresholds would have had to 

take some steps to reduce their emissions, either voluntarily to 

avoid the PSD permit requirement or by installing BACT as a 

condition of obtaining a permit. EPA rejected this approach 

because it “could result in regulation of sources with trivial or 

positive impacts on the net carbon cycle.” Id.

Without deciding whether the middle-ground option 

could pass muster under the statute, we agree with petitioners

that EPA’s rejection of that option was arbitrary and 

capricious. EPA has conceded “the possibility . . . that more 

detailed examination of the science of biogenic CO2 will 

demonstrate that . . . some biogenic feedstocks . . . have a 

significant impact on the net carbon cycle.” Id. at 43,498 

(emphasis added). As to these sources, the middle-ground 

option would have had the practical effect of reducing their

emissions; by contrast, the Deferral Rule, which functions as 

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a permanent exemption, does not. EPA’s reason for rejecting 

the middle-ground option—that it would regulate biogenic 

sources with a trivial impact—though perhaps accurate, is

thus non-responsive. Given EPA’s obligation to adopt the 

narrowest exemption possible, it should have explained why it 

rejected an option that would have reduced emissions from 

sources the Deferral Rule permanently exempts. See Sierra 

Club, 719 F.2d at 464 (remanding regulation because there 

was “no evidence that EPA ha[d] adequately explored . . . 

regulatory alternatives”).

This omission is especially troublesome because EPA has 

demonstrated that, notwithstanding the scientific uncertainty 

about measuring biogenic carbon dioxide emissions at the 

PSD applicability stage, the unique characteristics of these 

sources can be factored in at the BACT stage. The Deferral 

Rule still requires “anyway” sources that obtained PSD 

permits under Step One of the Tailoring Rule to regulate 

biogenic carbon dioxide emissions. To assist those sources 

and permitting authorities in developing BACT standards, 

EPA issued a detailed thirty-three page report on biogenic 

carbon dioxide. Presumably, permitting authorities are able to 

handle the scientific complexity of regulating biogenic carbon 

dioxide as to these “anyway” sources. Furthermore, since the 

Deferral Rule is voluntary, States may regulate biogenic 

carbon dioxide sources under Step Two of the Tailoring Rule. 

Indeed, Massachusetts is currently doing just that.

Finally, for the first time in its brief, EPA relies on the 

absurd results doctrine, which embodies “the long-standing 

rule that a statute should not be construed to produce an 

absurd result.” Mova Pharmaceutical Corp. v. Shalala, 140 

F.3d 1060, 1068 (D.C. Cir. 1998). As EPA sees it, because 

“emissions of CO2 derived from certain forms of biomass 

may not only fail to endanger public health and welfare, but in 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 17 of 43
18

fact may benefit the public by reducing the net emissions of 

CO2,” Respondent’s Br. 59, it would run afoul of

congressional intent to regulate them. Responding to 

petitioners’ contention that EPA’s reliance on the absurd 

results doctrine is post hoc, the agency points to several 

passages in the Deferral Rule that mention the doctrine. These 

references fall into two groups. The first, and by far the larger,

appears in a summary of the Tailoring Rule’s legal reasoning. 

According to EPA, the Deferral Rule fully incorporates the 

Tailoring Rule’s rationales, including the absurd results 

doctrine. See Respondent’s Br. 59. But the Deferral Rule 

cannot rest on the Tailoring Rule’s invocation of the absurd 

results doctrine for a simple reason: the two rules are aimed at 

different absurd results. The Tailoring Rule was intended to

alleviate the crushing administrative burden on permitting 

authorities and sources, see Tailoring Rule, 75 Fed. Reg. at 

31,547; the Deferral Rule, by contrast, was intended to avoid

regulation of biogenic carbon dioxide sources that have a

negligible impact on the net carbon cycle. The second group, 

which appears in a section justifying the Deferral Rule itself, 

mentions the absurd results doctrine only by analogy to the de 

minimis and administrative necessity doctrines. These passing 

references, however, fall far short of satisfying EPA’s 

“fundamental” obligation to “set forth the reasons for its 

actions.” Northeast Maryland Waste Disposal Authority v. 

EPA, 358 F.3d 936, 949 (D.C. Cir. 2004) (per curiam). For 

these reasons, we agree with petitioners that EPA’s reliance 

on the absurd results doctrine is indeed post hoc. See Calpine 

Corp. v. FERC, 702 F.3d 41, 46 (D.C. Cir. 2012) (explaining 

that an “agency decision[] may not be affirmed on grounds 

not actually relied upon by the agency”).

Because the Deferral Rule cannot be justified under any 

of the administrative law doctrines relied on by EPA, this 

opinion, contrary to our dissenting colleague’s suggestion, see

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 18 of 43
19

dissenting op. at 8, leaves for another day the question

whether the agency has authority under the Clean Air Act to

permanently exempt biogenic carbon dioxide sources from 

the PSD permitting program. If and when EPA adopts a 

permanent exemption for some or all biogenic carbon dioxide 

sources, we will have the benefit of three years of scientific 

study, as well as fully briefed and contextualized arguments 

about EPA’s authority under the Clean Air Act.

IV.

For the foregoing reasons, we grant the petitions for 

review and vacate the Deferral Rule.

So ordered.

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 19 of 43
KAVANAUGH, Circuit Judge, concurring: Under this 

Court’s recent precedent in Coalition for Responsible 

Regulation, Inc. v. EPA, this should be an easy case. The 

primary question presented is whether EPA has statutory 

authority to issue the Deferral Rule and thereby temporarily 

exempt biogenic carbon dioxide from the PSD and Title V 

permitting programs. In my view, the answer is no. This 

Court has ruled that the statute requires pre-construction and 

operating permits for stationary sources that emit or have the 

potential to emit certain specified amounts of an air pollutant, 

including carbon dioxide. There is zero basis in the text of 

the Clean Air Act for EPA to distinguish biogenic carbon 

dioxide from other sources of carbon dioxide that EPA is 

required (under our precedent) to regulate for purposes of the 

PSD and Title V permitting programs. See Coalition for 

Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 132-44 

(D.C. Cir. 2012). 

As a policy matter, EPA may have very good reasons to 

temporarily exempt biogenic carbon dioxide from the PSD 

and Title V permitting programs. But Congress sets the 

policy in the statutes it enacts; EPA has discretion to act only 

within the statutory limits set by Congress. The statute does 

not give EPA the authority to distinguish a stationary source’s 

emissions of biogenic carbon dioxide from emissions of other 

forms of carbon dioxide for purposes of these permitting 

programs.

1

EPA cites three administrative law doctrines that, 

according to EPA, give it authority to grant the temporary 

exemption. But in addition to the reasons given in Judge 

 1

 Under current precedent, for EPA to exempt biogenic carbon 

dioxide, it presumably would have to tinker with the Endangerment 

Finding. Unless EPA does so, there is no statutory basis for 

exempting biogenic carbon dioxide from the PSD and Title V 

permitting programs. 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 20 of 43
2

Tatel’s opinion for the Court, which I join in full, I would say 

that none of those doctrines applies in this case for an even 

more fundamental reason: The doctrines do not trump the 

fact that EPA simply lacks statutory authority to distinguish 

biogenic carbon dioxide from other forms of carbon dioxide 

for purposes of the PSD and Title V permitting programs. 

First, EPA relies on the one-step-at-a-time doctrine, 

which allows an agency to take incremental steps toward 

achieving a statutory mandate if taking incremental steps is 

consistent with the statutory text. See Grand Canyon Air 

Tour Coalition v. FAA, 154 F.3d 455, 477-78 (D.C. Cir. 1998)

(rule not arbitrary and capricious because it would achieve 

statutory mandate in conjunction with other proposed rules

within a reasonable timeframe). An agency typically invokes 

that doctrine in response to a claim that an agency is 

exercising its statutory discretion in an arbitrary and 

capricious manner. 

But EPA has no such statutory discretion here. Under the 

statute as this Court has interpreted it, EPA must regulate 

carbon dioxide under the PSD and Title V permitting 

programs. Coalition for Responsible Regulation, 684 F.3d at 

144 (Clean Air Act “requires PSD and Title V permits for 

major emitters of greenhouse gases”). And there is no basis 

in the statute for distinguishing biogenic carbon dioxide from 

other forms of carbon dioxide. 

Second, EPA cites the administrative necessity doctrine, 

which can excuse agency non-compliance with a statute if the 

agency lacks sufficient funds or resources. See Alabama 

Power Co. v. Costle, 636 F.2d 323, 359 (D.C. Cir. 1979)

(shortage of funds, of “time, or of the technical personnel 

needed to administer a program” grants agency authority “to 

cope with the administrative impossibility of applying the 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 21 of 43
3

commands of the substantive statute”). But EPA has the 

funds and resources to apply the PSD and Title V programs to 

biogenic carbon dioxide. Indeed, in the Deferral Rule, EPA 

acknowledged that it has the resources to “apply PSD and 

Title V to all facilities with biogenic CO2 emissions that emit 

at or above the Tailoring Rule thresholds.” 76 Fed. Reg. 

43,490, 43,496 (July 20, 2011). 

EPA decided against that option, however, because EPA 

thought it might be bad policy. Specifically, EPA said that “it 

is conceivable that as a result of the scientific examination of 

biogenic CO2 emissions, [EPA] could conclude that the net 

carbon cycle impact for some biomass feedstocks is trivial, 

negative, or positive.” Id. EPA reached that conclusion 

because it thinks that regrowth of plant life – and the resulting 

recapture of carbon dioxide – might “offset” emissions of

biogenic carbon dioxide. But the statute forecloses that kind 

of “offsetting” approach because the statute measures 

emissions from stationary sources that “emit” (or have the 

potential to emit) air pollutants. See 42 U.S.C. §§ 7475(a), 

7479(1). The statute does not allow EPA to exempt those 

sources’ emissions of a covered air pollutant just because the 

effects of those sources’ emissions on the atmosphere might 

be offset in some other way. 

Relatedly, EPA suggests that it has appropriately 

balanced the costs and benefits of regulating biogenic carbon 

dioxide under the PSD and Title V programs. But EPA is not 

permitted to substitute its view of the costs and benefits of 

regulation for Congress’s view of the costs and benefits of 

regulation. See Sierra Club v. EPA, 719 F.2d 436, 462 (D.C. 

Cir. 1983) (EPA not permitted to create exemption “based 

upon its perceptions of the costs and benefits of enforcing the 

law”); Alabama Power Co., 636 F.2d at 357 (“[T]here exists 

no general administrative power to create exemptions to 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 22 of 43
4

statutory requirements based upon the agency’s perceptions of 

costs and benefits.”). Allowing an agency to substitute its 

own policy choices for Congress’s policy choices in this 

manner would undermine core separation of powers 

principles. The Constitution gives Congress the legislative 

power to set policy in the first instance, and agencies then 

must act within those statutory boundaries – even if the 

agency believes it possesses expertise or policy views

superior to Congress’s. See Federal Power Commission v. 

Texaco, 417 U.S. 380, 400 (1974) (agencies cannot use 

administrative necessity “to overturn congressional 

assumptions embedded into the framework of regulation” by 

Congress); Natural Resources Defense Council, Inc. v. Costle, 

568 F.2d 1369, 1377 (D.C. Cir. 1977) (doctrine not a 

“revisory power” granting agency authority to act 

“inconsistent with the clear intent of the relevant statute”). 

Third, EPA has also invoked the absurd results doctrine. 

The crux of EPA’s position is that it would be absurd to 

interpret the Clean Air Act in a way that would require EPA 

to regulate biogenic carbon dioxide. But with EPA having 

already applied the PSD and Title V programs to carbon 

dioxide (and with this Court having agreed with that 

interpretation of the statute), there is certainly nothing absurd

about applying those programs to biogenic carbon dioxide. It 

is hardly absurd for Congress to tackle the problem of 

emissions from the smokestack in the first instance. And the 

fact that an exemption for biogenic carbon dioxide would be 

better policy (in EPA’s view) does not make it absurd to 

apply the statute to biogenic carbon dioxide. See Landstar 

Express America, Inc. v. Federal Maritime Commission, 569 

F.3d 493, 498 (D.C. Cir. 2009) (“A statutory outcome is 

absurd if it defies rationality.”). If it would be better overall 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 23 of 43
5

to exempt biogenic carbon dioxide from these permitting 

programs, EPA can always recommend that Congress do so.

2

 

* * *

All of that said, I have mixed feelings about this case. 

That’s because I believe, contrary to this Circuit’s precedent, 

that the PSD statute does not cover carbon dioxide, whether 

biogenic or not. See Coalition for Responsible Regulation, 

Inc. v. EPA, No. 09-1322 (D.C. Cir. 2012) (Kavanaugh, J., 

dissenting from denial of rehearing en banc). And as I see it, 

EPA’s decision to temporarily exempt biogenic carbon 

dioxide from regulation simply highlights the legal problems

in applying the PSD program to greenhouse gases, including 

carbon dioxide, in the first place. To review the bidding: 

EPA has read the PSD statute broadly to cover not just the 

NAAQS pollutants but also greenhouse gases, although EPA 

 2

 To be sure, the Executive may decline to follow a statutory 

mandate or prohibition applicable to the Executive if the President 

concludes that it is unconstitutional, unless and until a final Court 

order says otherwise. But EPA has not claimed that the statutory 

requirement to apply these permitting programs to biogenic carbon 

dioxide would be unconstitutional. It is also true that the Executive 

possesses a significant degree of prosecutorial discretion to decline 

to initiate criminal or civil enforcement actions against violators of 

a federal law. But EPA’s decision here is not such a nonenforcement action, and EPA has not claimed otherwise. See 

Massachusetts v. EPA, 549 U.S. 497, 527-28, 533 (2007) 

(explaining difference between prosecutorial discretion and 

agency’s choice whether to regulate); see generally In re Aiken 

County, No. 11-1271, slip op. at 2 n.1 (D.C. Cir. 2012) 

(Kavanaugh, J., concurring) (describing prosecutorial discretion); 

Seven-Sky v. Holder, 661 F.3d 1, 50 n.43 (D.C. Cir. 2011) 

(Kavanaugh, J., dissenting) (referring to possibility that a President 

might exercise prosecutorial discretion not to seek civil penalties 

against those who fail to comply with health insurance mandate). 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 24 of 43
6

expressly recognized that such an interpretation would lead to 

a result that was “so contrary to what Congress had in mind” 

and “in fact so undermines what Congress attempted to 

accomplish with the PSD requirements” that “it should be 

avoided under the ‘absurd results’ doctrine.” 74 Fed. Reg. 

55,292, 55,310 (Oct. 27, 2009). To try to deal with those 

admittedly absurd results, EPA then has repeatedly re-written

the statute – first in the Tailoring Rule and now in the 

Deferral Rule. But the absurdities and anomalies flowing 

from EPA’s statutory interpretation just underscore how 

flawed EPA’s interpretation was from the get-go. EPA could 

have adopted a narrower interpretation of the PSD statute that 

would have avoided those absurdities and, to boot, would 

have been more consistent with the statutory text and 

structure. What we are left with now is a statute that is a far 

cry from what Congress intended or enacted. So EPA is

necessarily making it up as it goes along. That is not how the 

administrative process is supposed to work. 

In saying that, I do not want to diminish EPA’s vital 

public objectives in addressing global warming. The task of 

dealing with global warming is urgent and important at the 

national and international level. My concern about EPA’s 

approach does not stem from policy beliefs (courts don’t have 

the authority or the expertise to assess policy well anyway)

but rather from separation of powers principles. 

But EPA’s broad interpretation of the statute was upheld

by this Court in Coalition for Responsible Regulation. 

Although I respectfully think the case was wrongly decided

on this issue, that’s water over the dam in this Court. We are

bound to apply that precedent. Under that case’s 

interpretation of the governing statute, EPA is required to

regulate carbon dioxide under the PSD and Title V permitting 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 25 of 43
7

programs. There is no statutory basis for exempting biogenic 

carbon dioxide. 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 26 of 43
KAREN LECRAFT HENDERSON, Circuit Judge, dissenting: 

 We must decide whether the Environmental Protection 

Agency (EPA) may temporarily defer regulation of biogenic 

carbon dioxide (CO2) emissions against a backdrop of 

uncertain but expanding scientific knowledge and rapid 

regulatory changes. Deferral for CO2 Emissions from 

Bioenergy, 76 Fed. Reg. 43,490 (July 20, 2011) (Deferral 

Rule). I believe EPA can—and should—defer regulation until 

it has the time it says it needs to study and resolve the issue it 

is charged with regulating. I would therefore uphold the 

Deferral Rule. Alternatively, given that the Deferral Rule 

expires or will be superseded in a matter of months—and by 

then EPA will have at least crystallized the issue before us—

we should hold the case in abeyance as unripe. Accordingly, I 

respectfully dissent. 

I. 

The Deferral Rule delays for three years—from July 20, 

2011 until July 21, 2014—the EPA’s factoring in of biogenic 

CO2 emissions “when determining whether a stationary 

source meets the” emissions thresholds for permitting under 

the Prevention of Significant Deterioration (PSD) and Title V 

permitting systems of the Clean Air Act (CAA), 42 U.S.C. 

§§ 7401 et seq. See Deferral Rule, 76 Fed. Reg. at 43,492. In 

so deferring, EPA has used, correctly, I believe, the longrecognized step-at-a-time regulatory procedure. This 

procedure recognizes the reality and complexity of 

administrative regulation. “In an ideal world . . . agencies 

would act only after comprehensive consideration of how all 

available alternatives comported with a well-defined policy 

objective . . . .” Nat’l Ass’n of Broadcasters v. FCC, 740 F.2d 

1190, 1210 (D.C. Cir. 1984). Nonetheless, “administrative 

action generally occurs against a shifting background in 

which facts, predictions, and policies are in flux and in which 

an agency would be paralyzed if all the necessary answers had 

to be in before any action at all could be taken.” Id. Thus, 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 27 of 43
2 

“agencies have great discretion to treat a problem partially” 

and we will “not strike down [a regulation] if it [is] a first step 

toward a complete solution, even if we thought it ‘should’ ” 

have been finished. City of Las Vegas v. Lujan, 891 F.2d 927, 

935 (D.C. Cir. 1989). Moreover, “nothing in the 

[Administrative Procedure Act] precludes an agency from 

collecting data and monitoring real-world experience with 

regulatory standards before adopting new standards governing 

periods of time far into the future—especially in cases, as 

here, that involve unpredictable technological change. Indeed, 

gathering evidence before making a long-term decision is 

eminently sensible.” Pub. Citizen, Inc. v. Nat’l Highway 

Traffic Safety Admin., 374 F.3d 1251, 1263 (D.C. Cir. 2004); 

see also id. at 1262-63 (agency’s temporarily declining to 

make crash test requirements stricter was not arbitrary and 

capricious because it “offered rational reasons for adopting an 

‘interim final rule’ establishing the unbelted crash test speed 

through August 2006 only” while it undertook “multi-year 

effort to obtain additional data”). 

The Deferral Rule must be read in light of the fact that 

EPA did not regulate greenhouse gases (GHGs) under the 

CAA at all until the end of 2009, see Endangerment and 

Cause or Contribute Findings for Greenhouse Gases, 74 Fed. 

Reg. 66,496 (Dec. 15, 2009), and did not regulate them under 

PSD and Title V until 2011, see Prevention of Significant 

Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 

Fed. Reg. 31,514, 31,521 (June 3, 2010) (Tailoring Rule). By 

postponing regulation of biogenic CO2 emissions under PSD 

and Title V, the Deferral Rule simply keeps in place the preUSCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 28 of 43
3 

2011 status quo. The question, then, is whether the petitioners 

can compel EPA to act before July 21, 2014.1

Although the step-at-a-time doctrine is “pragmatic” and 

cannot be “captured in a single doctrinal formulation,” we ask 

two questions when an agency uses it to “defer resolution of 

problems.” Nat’l Ass’n of Broadcasters, 740 F.2d at 1210. 

First, we ask whether the agency (1) has “made some 

estimation, based upon evolving economic and technological 

conditions, as to the nature and magnitude of the problem it 

will have to confront when it comes to resolve the postponed 

issue”; and (2) “whether it was reasonable, in the context of 

the decisions made in the proceeding under review, for the 

agency to have deferred the issue.” Id. at 1210-11. Regarding 

the second question, “postponement will be most easily 

justified when an agency acts against a background of rapid 

technical and social change and when the agency’s initial 

decision as a practical matter is reversible should the future 

proceedings yield drastically unexpected results.” Id. at 1211; 

see also Massachusetts v. EPA, 549 U.S. 497, 527 (2007) 

(“[A]n agency has broad discretion to choose how best to 

marshal its limited resources and personnel to carry out its 

 1

 Our review is highly deferential. See Interstate Natural Gas 

Ass’n of Am. v. FERC, 285 F.3d 18, 57 (D.C. Cir. 2002) (“The 

policy originates in past decisions; FERC did not here decide to 

continue it, in the sense of confronting the substance and making an 

affirmative decision; it decided only that it would defer substantive 

treatment to a different—and necessarily later—context. In essence, 

then, the claim is of a violation of the [Administrative Procedure 

Act]’s mandate that an agency decide matters within a reasonable 

time, and calls on us to compel agency action unlawfully withheld 

or unreasonably delayed. Our review is [therefore] highly 

deferential.” (quotation marks and citations omitted)). 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 29 of 43
4 

delegated responsibilities.”). I believe EPA’s rationale for the 

Deferral Rule easily fits within this framework. 

EPA has reasonably attempted to balance its 

acknowledged CAA duty to regulate GHGs with the reality 

that both EPA itself as well as other permitting authorities 

have limited resources and experience in this area. The 

Tailoring Rule, which EPA promulgated in 2010, created a 

phase-in process whereby, at first, only the largest GHG 

emitters would be subject to PSD and Title V on the basis of 

GHG emissions. Tailoring Rule, 75 Fed. Reg. at 31,516. The 

phase-in was necessary both to alleviate high costs to 

permitting authorities, id. at 31,533, and to give EPA time to 

decide how to permanently implement GHG regulation, id. at 

31,526. EPA promulgated the Deferral Rule because of 

similar cost and scientific uncertainty. Specifically, EPA did 

not know in 2011 which, if any, biofuel feedstocks cause a net 

increase in atmospheric CO2 levels when used as fuel for a 

stationary source. Deferral Rule, 76 Fed. Reg. at 43,492. EPA 

was concerned that, if it regulated all sources’ biogenic CO2

emissions without taking net increase vel non into account, its 

regulation of the sources could result in high cost but 

negligible benefit.2

 EPA also concluded that immediate, one-

 2

 Earlier, EPA had predicted that, had it not adopted the 

Tailoring Rule’s phase-in approach, permitting authorities would 

have faced a 140-fold increase in PSD permitting activity, or $1.5 

billion in additional annual costs; and a 400-fold increase in Title V 

permitting activity, or $21 billion in additional annual costs. 

Tailoring Rule, 75 Fed. Reg. at 31,539-40. Even under the phase-in 

approach, EPA projected a 42% increase in administrative costs per 

year. Id. at 31,540, Table V-1. In the Deferral Rule, EPA reasoned 

that “requiring regulation of biogenic sources of CO2 at this time 

may,” inter alia, “exacerbate[ ] the regulatory burdens . . . the 

Tailoring Rule was intended to avoid.” Deferral Rule, 76 Fed. Reg. 

at 43,499. 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 30 of 43
5 

size-fits-all regulation of biogenic CO2 could be 

counterproductive by discouraging the construction of lownet-carbon stationary facilities. Id. at 43,496. Absent deferral, 

EPA concluded, permitting authorities—primarily, states—

would face a heavy administrative burden due to, inter alia, 

the need to take the carbon cycle into account in determining 

best available control technology (BACT) during the 

permitting process. See id. at 43,492; see also id. at 43,496 

(“[T]he extensive workload associated with analyzing and 

accounting for biogenic CO2 emissions as part of processing 

permit applications from biomass facilities justifies exempting 

those sources for a period of time . . . . ”). While EPA 

attempted to alleviate the administrative burden by 

promulgating interim guidance to help permitting authorities 

conduct BACT analysis for biogenic CO2 emissions—

explaining that in some instances, combustion of biomass can 

be considered BACT—the case-by-case analysis that 

permitting authorities, without the Deferral Rule, would be 

required to undertake immediately “would likely be 

prohibitively time-consuming and complex.” EPA Office of 

Air & Radiation, Guidance for Determining Best Available 

Control Technology for Reducing Carbon Dioxide Emissions 

from Bioenergy Production 23 (Mar. 2011), http://www.epa.

gov/nsr/ghgdocs/bioenergyguidance.pdf. Accordingly, EPA 

promulgated the Deferral Rule as an “initial step toward full 

compliance” with the statutory mandate to regulate GHGs. 

Deferral Rule, 76 Fed. Reg. at 43,498. The Deferral Rule 

expires on July 21, 2014, at which time biogenic CO2

emissions will automatically be treated like all other CO2

emissions unless, on or before that date, EPA “undertake[s] 

additional rulemaking to clarify the applicability of PSD and 

Title V permitting requirements.” Id. (citing Grand Canyon 

Air Tour Coalition v. FAA, 154 F.3d 455, 476-77 (D.C. Cir. 

1998)); see also id. at 43,494 (quoting Massachusetts, 549 

U.S. at 524 (agencies may implement regulatory programs 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 31 of 43
6 

over time, “refining their preferred approach as circumstances 

change and as they develop a more nuanced understanding of 

how best to proceed.”)). In the meantime, EPA planned to 

study the science and ultimately either establish an 

appropriate carbon accounting framework for biogenic CO2

emissions or, to repeat, allow the Deferral Rule to expire and 

treat biogenic CO2 emissions like other CO2 emissions. 

My colleagues attack the Deferral Rule because it 

“nowhere offers an interpretation of the Clean Air Act that 

would allow the agency to treat biogenic carbon dioxide 

sources differently.” Maj. Op. 13-14. But EPA is not 

permanently treating biogenic CO2 emissions differently. As 

the Deferral Rule explains, EPA believes, based on the 

evidence currently in its possession, that further study may 

support a decision to give special treatment to some biogenic 

emissions. Deferral Rule, 76 Fed. Reg. 43,496; see also id. at 

43,499 (“EPA believes based on information currently before 

the Agency that at least some biomass feedstocks . . . have a 

negligible impact on the net carbon cycle, or possibly even a 

positive net effect.”). If further study does not bear this out, 

EPA has implicitly acknowledged that it will treat biogenic 

CO2 emissions as it does other CO2 emissions. Cf. id. at 

43,498 (“[EPA] will be using the three-year deferral period to 

better understand the science associated with biogenic CO2

emissions and to explore whether or not a permanent 

exemption is permissible . . . . ” (emphasis added)).3

 3

 Contrary to my colleagues’ suggestion, the step-at-a-time 

doctrine does not require that an agency articulate precisely what 

constitutes full compliance with the statute at the time it takes an 

incremental step. Compare Maj. Op. 14 (criticizing EPA because 

“we simply have no idea what EPA believes constitutes ‘full 

compliance’ with the statute”), with Pub. Citizen, 374 F.3d at 1263 

(permitting agency to delay “a final decision regarding the 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 32 of 43
7 

To be sure, in Coalition for Responsible Regulation, 684 

F.3d 102 (D.C. Cir. 2012), we held that “once the Tailpipe 

Rule set motor-vehicle emission standards for greenhouse 

gases, they became a regulated pollutant under the Act, 

requiring PSD and Title V greenhouse permitting.” Id. at 115. 

But, just as EPA proceeded gradually in regulating GHGs 

under the Tailoring Rule, EPA has delayed its regulation of a 

specific GHG via the Deferral Rule.4

 The fact that EPA is 

required to take action does not preclude it from phasing in 

the action using the step-at-a-time method. In Grand Canyon 

Air Tour, the Congress required the Federal Aviation 

Administration (FAA), within 120 days of enactment of the 

Overflights Act, to “prepare and issue a final plan for the 

management of air traffic in the air space above the Grand 

Canyon.” See 154 F.3d at 460. After the FAA promulgated 

only interim measures, the Grand Canyon Trust challenged it 

as “too little” and “too late.” Id. at 473. We rejected its 

challenge, declaring that, although “it would be arbitrary and 

capricious for an agency simply to thumb its nose at Congress 

and say—without any explanation—that it simply does not 

intend to achieve a congressional goal on any timetable at all . 

. . . the FAA has not taken that course here. It has never 

defended the Final Rule as the sole means for [satisfying the 

statute], but only as the first of three steps.” Id. at 477; cf.

Ala. Power Co. v. Costle, 636 F.2d 323, 357 (D.C. Cir. 1979) 

 

maximum test speed for unbelted dummy testing” until agency 

completed gathering information and analysis). The rationale for a 

deferral period is that delay is necessary to allow the agency to 

determine what it is unable to determine at the time, i.e., full 

compliance with a statutory mandate. 

4

 In Coalition for Responsible Regulation, we rejected a 

challenge to the Tailoring Rule, albeit on lack of standing. 684 F.3d 

at 113-14. 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 33 of 43
8 

(“Certain limited grounds for the creation of exemptions are 

inherent in the administrative process, and their unavailability 

under a statutory scheme should not be presumed, save in the 

face of the most unambiguous demonstration of congressional 

intent . . . . ”). While the CAA requires EPA to regulate CO2, 

it does not foreclose, as one step toward full compliance, 

EPA’s deferring regulation of a unique type of CO2 in order 

to study whether EPA can—and should—treat it differently. 

EPA does not defend the Deferral Rule as the sole or final 

means of dealing with biogenic CO2 emissions nor has it 

thumbed its nose at the Congress. By July 21, 2014, EPA will 

take its next step—either by regulating biogenic CO2

emissions like other CO2 emissions by default (i.e., the 

expiration of the Deferral Rule) or by handling biogenic CO2 

emissions specifically. 

The necessary implication of the majority opinion is that, 

no matter the results of EPA’s study, EPA lacks authority to 

treat biogenic CO2 emissions differently from other 

emissions. The CAA defines a major emitting source (i.e., a 

source subject to PSD and Title V permitting requirements) as 

a source that “emit[s] or [has] the potential to emit” abovethreshold amounts of a regulated pollutant “from” the source. 

42 U.S.C. § 7479(1). The petitioners believe, and my 

colleagues apparently agree, this language precludes EPA 

from considering “off-site” factors, such as the carbon cycle 

of the biomass used as a source’s fuel, in determining whether 

the source is subject to PSD. But the language has not

precluded EPA from recognizing de minimis exceptions from 

the statute. Under the de minimis doctrine, “[c]ourts should be 

reluctant to apply the literal terms of a statute to mandate 

pointless expenditures of effort.” Ala. Power, 636 F.2d at 360. 

Unless the Congress has been “extraordinarily rigid,” we will 

uphold an exemption from the statute’s literal terms “when 

the burdens of regulation yield a gain of trivial or no value.” 

Id. at 360-61. PSD and Title V are meant to protect against 

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9 

harm resulting from the emission of regulated pollutants, see, 

e.g., 42 U.S.C. § 7470, and EPA has found that GHGs such as 

CO2 cause harm by accumulating in excess amounts in the 

atmosphere, see, e.g., Tailoring Rule, 75 Fed. Reg. at 31,519. 

If EPA’s review shows, however, that the combustion of 

certain biomass feedstocks has no effect on—or even 

reduces—atmospheric CO2 levels, EPA could then use this 

information to support a de minimis exception to the 

regulation of certain biogenic CO2 emissions. Cf. Ala. Power, 

636 F.2d at 330 (“[T]he application of BACT requirements to 

the emission of all pollutants . . . no matter how miniscule . . . 

could impose severe administrative [and economic] burdens . 

. . . [T]he proper way to resolve this difficulty is to define a de 

minimis standard . . . . ”). Exempting from regulation a source 

with a negligible—and particularly, a beneficial—effect on 

atmospheric CO2 levels would be perfectly consistent with the 

overarching PSD and Title V permitting regime—a regime 

which expressly does not regulate “minor” sources that cause 

little harm because they release below-threshold levels of 

pollutants. See 42 U.S.C. §§ 7479(1), 7661(2), 7602(j). Given 

the availability of a de minimis exception, it is not as though, 

as the majority necessarily assumes, that the Deferral Rule 

delays the inevitable.5

 5

 Moreover, to the extent it could be shown that the CAA is so 

“extraordinarily rigid” as to bar EPA from considering off-site 

activity in determining a stationary source’s “potential to emit” 

CO2, EPA is also studying “the nature of the fuel combusted on site 

at the ‘stack,’ ” which does not involve off-site activity. Br. of 

Resp’ts 49. If EPA concludes it cannot consider off-site activity, it 

could adjust its regulation using only on-site activity like stack 

combustion. 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 35 of 43
10 

In sum, EPA’s decision to stop and think before 

regulating in a complex—and changing—area is eminently 

reasonable. 

II. 

 Alternatively, under the prudential ripeness doctrine, I 

believe we should not have reached the merits of this case. 

The ripeness doctrine prevents the court from prematurely 

adjudicating a dispute. Abbott Labs. v. Gardner, 387 U.S. 

136, 148-49 (1967). The doctrine comes “from Article III 

limitations on judicial power and from prudential reasons for 

refusing to exercise jurisdiction.” Reno v. Catholic Soc. 

Servs., Inc., 509 U.S. 43, 57 n.18 (1993). “The ripeness 

doctrine, even in its prudential aspect, is a threshold inquiry . . 

. .” In re Aiken Cnty., 645 F.3d 428, 434 (D.C. Cir. 2011). The 

court stays its hand so the “administrative process [can] run 

its course before binding parties to a judicial decision.” Am. 

Petroleum Inst. v. EPA, 683 F.3d 382, 386 (D.C. Cir. 2012) 

(challenge to EPA rule continuing to regulate certain 

materials held unripe because EPA subsequently issued 

NPRM significantly changing regulatory scheme). This 

doctrine gives “the challenging party [time] to convince the 

agency to alter a tentative position,” “provides the agency an 

opportunity to correct its own mistakes and to apply its 

expertise,” narrows the legal and factual issues at play and 

“comports with our theoretical role as the governmental 

branch of last resort.” Id. at 386-87 (quotation marks omitted). 

It thus “ensures that Article III courts make decisions only 

when they have to, and then, only once.” Id. at 387. 

We consider two factors in assessing prudential ripeness: 

(1) the “fitness of the issues for judicial decision” and (2) “the 

extent to which withholding a decision will cause hardship to 

the parties.” Id. (quotation marks omitted). 

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11 

A. Fitness for Review 

The first factor—fitness—is “meant to protect the 

agency’s interest in crystallizing its policy before that policy 

is subjected to judicial review and the court’s interests in 

avoiding unnecessary adjudication and in deciding issues in a 

concrete setting.” Id. (quotation marks omitted). We must 

consider, inter alia, “whether [the issue] is purely legal, 

whether consideration of the issue would benefit from a more 

concrete setting, and whether the agency’s action is 

sufficiently final.” Id. (quotation marks omitted). An issue is 

particularly unfit for review if, by staying our hand 

temporarily, we need never address it. See Nat’l Treasury 

Emps. Union v. United States, 101 F.3d 1423, 1431 (D.C. Cir. 

1996). We 

decline to review “tentative” agency positions 

because doing so “severely compromises the 

interests” the ripeness doctrine protects: “The agency 

is denied full opportunity to apply its expertise and 

to correct errors or modify positions in the course of 

a proceeding, the integrity of the administrative 

process is threatened by piecemeal review of the 

substantive underpinnings of a rule, and judicial 

economy is disserved because judicial review might 

prove unnecessary if persons seeking such review 

are able to convince the agency to alter a tentative 

position.” 

Am. Petroleum Inst., 683 F.3d at 387 (quoting Pub. Citizen 

Health Research Grp. v. Comm’r, FDA, 740 F.2d 21, 31 

(D.C. Cir. 1984)). 

The Deferral Rule—a temporary rule that expires or will 

be replaced by July 21, 2014—is not fit for review. First, by 

staying our hand, we would give the petitioners an 

opportunity to convince EPA to promulgate a rule more to 

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12 

their liking. If EPA promulgated such a rule, or simply 

allowed the Deferral Rule to expire on July 21, 2014, the 

petitioners’ challenge could be resolved. See also Tex. Indep. 

Producers & Royalty Owners Ass’n v. EPA, 413 F.3d 479, 

483 (5th Cir. 2005) (EPA decision to defer permit 

requirements for certain oil and gas construction sites unripe 

because “[g]iven that EPA has specifically stated its intent to 

examine, during the Deferral Period, the issue of how best to 

resolve questions . . . regarding section 402(l)(2) of the Clean 

Water Act, any interpretation we would provide would 

necessarily prematurely cut off EPA’s interpretive process” 

(quotation marks omitted)). 

Second, even assuming EPA issues a superseding rule to 

which the petitioners object, the Deferral Rule will crystallize 

the issues raised by their challenge. See, e.g., Am. Petroleum 

Inst., 683 F.3d at 388 (“In the ongoing rulemaking, EPA 

could change its mind and keep the transfer-based exclusion, 

in which case the issue goes away; or, if EPA stays the course 

and abolishes the transfer-based exclusion, the dispute will 

become concrete and straightforward.”); Nat’l Treasury, 101 

F.3d at 1431 (“[W]hile the broad legal theory advanced by 

appellants may be as complete as it ever will, the facts upon 

which its resolution may depend are not ‘fully crystallized’ . . 

. . ”). The current dispute is whether EPA may postpone 

regulatory action based on insufficient information. If EPA 

promulgated a superseding rule exempting biogenic CO2 from 

regulation, the dispute would be whether EPA may 

promulgate a permanent (or at least more crystallized) 

exemption. See Deferral Rule, 76 Fed. Reg. at 43,492-93; see 

also Am. Petroleum Inst., 683 F.3d at 387 (finding lack of 

ripeness when “EPA responds that the pyrophoric properties 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 38 of 43
13 

of the catalysts warrant further consideration to make sure 

they will not be discarded during transfer”).6

 

To be sure, “an agency can[not] stave off judicial review 

of a challenged rule simply by initiating a new proposed 

rulemaking that would amend the rule in a significant way.” 

Am. Petroleum Inst., 683 F.3d at 388. While EPA has not yet 

proposed a final rule, it has also not engaged in a “thinly 

veiled attempt to evade review,” id., but instead committed 

itself to act by a date certain—July 21, 2014. See Oral Arg. 

Tr. 28-29 (Apr. 8, 2013) (EPA’s Science Advisory Board has 

issued final report now being analyzed); see also Wheaton 

Coll. v. Sebelius, 703 F.3d 551, 552 (D.C. Cir. 2012) (“We 

take the government at its word and will hold it to it.”).

For the foregoing reasons, I believe the Deferral Rule is 

not fit for review at this time. 

B. Hardship to the Parties 

“To outweigh the[ ] institutional interests in the deferral 

of review, any hardship caused by that deferral must be 

immediate and significant. Considerations of hardship that 

might result from delaying review will rarely overcome the . . 

 6

 The majority opinion does not bar EPA from ultimately 

exempting biogenic CO2 from PSD and Title V regulation. Instead, 

my colleagues strike down a temporary agency position almost 

certain to be recast. They thus threaten the “integrity of [the] 

administrative process . . . by piecemeal review of the substantive 

underpinnings of a rule.” Pub. Citizen, 740 F.2d at 31; see also Am. 

Petroleum Inst., 683 F.3d at 388 (“[T]o the extent API and EPA 

dispute whether some sort of transfer-based exclusion for hazardous 

secondary materials is necessary to comport with the concept of 

‘discard,’ that issue also is best addressed once EPA finally decides 

whether to eliminate the transfer-based exclusion it adopted in the 

2008 Rule.”). 

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14 

. fitness problems inherent in attempts to review tentative 

positions.” Am. Petroleum Inst., 683 F.3d at 389 (emphases 

added) (quotation marks omitted). 

The petitioners argue, and my colleagues agree, Maj. Op. 

10, that the hardship caused by the Deferral Rule is especially 

serious because the Deferral Rule could result in a 

“permanent” exemption from PSD permitting. Specifically, a 

stationary source constructed during the deferral period 

without obtaining a PSD permit (because of its temporary 

biogenic CO2 exemption) could, in theory, escape permitting 

forever because a PSD permit would then be required only if

the source is modified. See 42 U.S.C. § 7475(a). It is possible, 

then, that even if EPA decides to regulate biogenic CO2 

emissions like all other CO2 emissions, a source constructed 

during the deferral period would never need to obtain a PSD 

permit if it remains unmodified. 

The Deferral Rule does not open the floodgates as the 

petitioners and my colleagues fear. It allows a source to avoid 

PSD permitting only if (1) it has the potential to emit CO2 as a 

result of biogenic emissions; (2) its potential to emit biogenic 

CO2 exceeds Tailoring Rule thresholds; (3) it is not otherwise 

subject to PSD permitting based on its potential to emit other 

pollutants or non-biogenic CO2 emissions; and (4) it is able to 

obtain a minor source (non-PSD) permit and commence 

construction7 no later than July 21, 2014. And a source could 

permanently avoid PSD permitting only if it met the above 

requirements and never underwent a “major modification 

 7

 Tailoring Rule, 75 Fed. Reg. at 31,594 (“PSD preconstruction 

permitting requirements do not generally preclude a source from 

continuing actual construction that began before the source was a 

source required to obtain a PSD permit.”). 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 40 of 43
15 

determination.” See Deferral Rule, 76 Fed. Reg. at 43,499.8

At oral argument, the petitioners were able to name only one 

source—a facility located in Allendale, South Carolina—that 

has been able to avoid PSD permitting “in direct reliance on” 

the Deferral Rule. Oral Arg. Tr. 5-6, 10. The intervenors 

describe the number of sources that could take advantage of 

the Deferral Rule as “a handful,” Oral Arg. Tr. 32. The 

petitioners submitted with their opening brief the declaration 

of Ranajit Sahu, an environmental, mechanical and chemical 

consultant, listing eight sources he reviewed that had obtained 

“minor source” (non-PSD) permits but “[e]scape[d] PSD 

[d]ue to the Biomass Exemption:” the Allendale facility plus 

seven others. Sahu Decl. at 14, 20-24. Six of them, however, 

obtained their minor source permits before the Deferral Rule 

was promulgated. Compare Sahu Decl. 22-24 (referencing 

Biogreen, Concord, Dorchester, Kershaw, Kamath Falls, 

Mancelona and Menominee facilities), with Sahu Decl. 5 

(Biogreen obtained permit on December 15, 2010; Dorchester 

and Kershaw obtained permits on June 30, 2011; Klamath 

Falls obtained permit on December 30, 2010; Mancelona 

obtained permit on February 9, 2010; and Menominee 

obtained permit on May 11, 2011). If any of these sources 

commenced construction before July 2011, as is likely, the 

Deferral Rule would not affect that source because no source 

 8

 The petitioners seem to concede that the hardship they face is 

remediable. Br. for Pet’rs 26 (“[E]ven if the plants commence 

construction under the illegal Exemption, upon a reversal of the 

Exemption they can be required to source more sustainably grown 

fuel and/or comply with more stringent limits requiring full 

operation and maintenance of their pollution control equipment.”). 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 41 of 43
16 

was subject to PSD based solely on CO2 emissions before that 

date.9

To sum up, not only is this case unfit for review but the 

hardship of which the petitioners complain is hyperbolically 

overblown. The Deferral Rule does not deregulate scores of 

polluters.10 Instead, it temporarily maintains the heretofore 

long-time status quo11 for a limited number of stationary 

 9

 While Sahu avers that “many” of the six facilities “have not 

commenced construction,” he does not identify any of the “many.” 

Sahu Decl. 20. 

10 In discussing the hardship prong, the majority declares that 

“we have no idea how many biogenic carbon dioxide sources have 

been constructed since March 2012.” Maj. Op. 12. This assertion is 

way off the mark. The petitioners themselves could name only one 

source meeting the Deferral Rule exception. Their expert’s affidavit 

isolated only eight, six of which might not fit the exception. See 

supra pp. 15-16 & n.9. If the petitioners have not been able to 

establish severe harm by now, we should not attempt to fill the 

jurisdictional gap in their challenge. 

11 As an aside—my colleagues do not address this point—what 

the petitioners complain of is not massive deregulation but instead 

temporary maintenance of the status quo. Significantly, the harm 

they allege does not come from unregulated biogenic CO2

emissions; rather, their primary alleged harm is that the Deferral 

Rule allows for the less strict regulation of emissions of certain 

non-CO2 pollutants (such as particulate matter and nitrogen oxides) 

from biogenic CO2 emitters. But if a stationary source—biogenic or 

otherwise—has the potential to emit above-threshold amounts of a 

regulated pollutant other than GHGs, it must obtain a PSD permit 

and meet BACT not only for the pollutant(s) that made it subject to 

PSD but also for all pollutants emitted over certain thresholds (even 

for a pollutant not emitted in a quantity sufficient by itself to 

subject the source to PSD). See Deferral Rule, 76 Fed. Reg. at 

43,493. While the Deferral Rule exempts from PSD a source whose 

USCA Case #11-1101 Document #1446222 Filed: 07/12/2013 Page 42 of 43
17 

sources that—until July 1, 2011—had never been subject to 

regulation as a major source under PSD. Given these 

circumstances, and our role as “the governmental branch of 

last resort,” Aiken Cnty., 645 F.3d at 434, I believe we should 

deny the petition; in the alternative, we should hold the case 

in abeyance pending either the expiration of the Deferral Rule 

on July 21, 2014 or EPA action taken by that date.12

 

biogenic CO2 emissions alone make it subject to PSD, it does not 

allow a source with the potential to emit above-threshold quantities 

of other regulated pollutants to escape regulation. See id. at 43,492 

(“This deferral applies only to biogenic CO2 emissions and does not 

affect non-GHG pollutants or other GHGs . . . emitted from the 

combustion of biomass fuel.”). The Deferral Rule’s effect on PSD 

applicability, then, is minimal: as noted earlier, it simply preserves 

the pre-July 2011 status quo. Before July 1, 2011, a stationary 

source was subject to PSD if it had the potential to emit certain 

quantities of pollutants other than CO2. Under the Tailoring Rule, a 

source that was not otherwise subject to PSD became, as of July 1, 

2011, subject to PSD based on its GHG emissions. The Deferral 

Rule exempts from this set of newly-regulated sources those subject 

to PSD based only on their biogenic CO2 emissions. Preserving the 

status quo for this limited category for—now—only a matter of 

months does not constitute “immediate and significant” hardship. 

12 As my colleagues note, Maj. Op. 10, the Deferral Rule makes 

it optional for permitting authorities (e.g., states) not to regulate 

biogenic CO2 emissions during the deferral period but they identify 

only a single state—Massachusetts—that continues to regulate 

biogenic CO2 emissions. Maj. Op. 10. That only one permitting 

authority has seen fit to regulate biogenic CO2 emissions during the 

life of the Deferral Rule underscores the reasonableness of EPA’s 

decision to study the science before imposing burdensome 

regulatory obligations to achieve uncertain and potentially 

negligible benefits.

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