# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 12, 2014 Decided June 27, 2014.

No. 98-1379

N ATURAL R ESOURCES D EFENSE C OUNCIL AND S IERRA C LUB

, P ETITIONERS

v.

E NVIRONMENTAL P ROTECTION A GENCY AND G INA
M C C ARTHY

, R ESPONDENTS

A MERICAN C HEMISTRY C OUNCIL

, I NTERVENOR

Consolidated with 98-1429, 98-1431

On Petitions for Review of Final Action of the United States Environmental Protection Agency

James S. Pew argued the cause for the petitioners.
Khushi K. Desai and David R. Case were on brief.

Norman L. Rave, Jr. , Attorney, United States Department of Justice, argued the cause for the respondents. Robert G.
Dreher , Acting Assistant Attorney General, and Steven
Silverman and Alan H. Carpien , Attorneys, United States
Environmental Protection Agency, were on brief. Cynthia J.2

Morris , and Christopher S. Vaden , Attorneys, United States Department of Justice, and Lois J. Schiffer , Attorney, National Capital Planning Commission, entered appearances.

Michael W. Steinberg argued the cause for the intervenor.
David M. Kerr and Leslie A. Hulse were on brief.

Thomas Sayre Llewellyn

, Harry M. Ng and Deanne M.
Ottaviano were on brief for amici curiae American Petroleum Institute et al. in suppor t of the respondents.

Before: H ENDERSON and M ILLETT

, Circuit Judges , and
S ENTELLE

, Senior Circuit Judge

. Opinion for the Court filed by Circuit Judge H ENDERSON

.

K AREN L E C RAFT H ENDERSON

, Circuit Judge : Petitioners Natural Resources Defense Council, Sierra Club and Environmental Technology Council (collectively, Petitioners) seek review of a portion of a 1998 rule of the Environmental Protection Agency (EPA) cr eating a “Comparable Fuels Exclusion” from regulation under section 3004(q) of the
Resource Conservation and Rec overy Act of 1976 (RCRA), 42 U.S.C. § 6924(q). See Hazardous Waste Combustors; Revised Standards, 63 Fed. Reg. 33,782, 33,783-801, 33,823-35 (June 19, 1998) (1998 Rule) (codified at 40 C.F.R. §§ 261.4(a)(16) and 261.38). Section 6924(q) directs EPA to establish standards applicable to all facilities that produce, burn for energy recovery or di stribute/market fuels derived from specific listed hazardous wastes. The Comparable Fuels Exclusion exempts from section 6924(q)’s mandate all fuels deemed comparable to non-h azardous-waste-d erived fossil fuels because they satisfy EPA’s specifications. See 40 C.F.R. §§ 261.4(a)(16), 261.38. We conclude the Comparable Fuels Exclusion is inconsistent with the plain language of section 6924(q), which requires that EPA establish standards applicable to all fuel derived from hazardous waste.3

Accordingly, we grant the petitions for review filed by the Natural Resources Defense Council (NRDC) and the Sierra Club (collectively, Environmenta l Petitioners) and vacate the Comparable Fuels Exclusion.

I.

RCRA, codified at 42 U.S.C. §§ 6901 et seq., is “a comprehensive environmental statute under which EPA is granted authority to regulate solid and hazardous wastes.” Am. Mining Cong. v. EPA ( AMC I ), 824 F.2d 1177, 1179 (D.C. Cir. 1987). Subtitle C of RCRA, 42 U.S.C. §§ 6921-39g, governs “Hazardous Waste Management” and “establishes a ‘cradle to grave’ federal regulatory system for the treatment, storage, and disposal of hazardous wastes.” Cement Kiln Recycling Coal. v. EPA , 493 F.3d 207, 211 (D.C. Cir. 2007) (quotation marks and citatio n omitted). RCRA defines “hazardous waste” as “a solid waste, or combination of solid wastes” which, because of its characteristics, may “cause, or significantly contribute to an increase in mortality or . . . serious . . . illness [or] pose a substantial presen t or potential hazard to human health or the environment when improperly . . . managed.” 42 U.S.C. § 6903(5). A “solid waste,” in turn, is defined as “any garbage, refuse, sludge from a waste treatment plant, water supply tr eatment plant, or air pollution control facility and other discarded material.” Id . § 6903(27) (emphasis added). Section 6924 provides generally that EPA “shall promulgate regulations establishing such performance standards, applicable to owners and operato rs of facilities for the treatment, storage, or disposal of hazardous waste identified or listed under this subchapter, as may be necessary to protect human health and the environment.” Id . § 6924(a).

Until 1985, EPA regulations expressly exempted from section 6924’s hazardous waste standards “material . . . being burned as a fuel for the purpose of recovering usable energy,”4

under the theory that such material was not “discarded,” 40 C.F.R. § 261.2(c)(2) (1984), and th erefore not “solid waste,” as defined in 42 U.S.C. § 6903(27) , or, consequently, “hazardous waste,” which is defined in se ction 6903(5) “as a subset of ‘solid waste,’ ” Horsehead Res. Dev. Co. v. Browner , 16 F.3d 1246, 1263 (D.C. Cir. 1994); see AMC I , 824 F.2d at 1189 (noting regulations existing in November 1984 had “provided
that unused commercial chemical products were solid wastes only when ‘discarded’ [and] ‘[d]iscarded’ was at that time defined as abandoned (and not recycled) by being disposed, burned, or incinerated (but not burned for energy recovery)” (citing 40 C.F.R. §§ 261.33, 261.2( c) (1983))). In 1984, the Congress attempted to eliminate EPA’s regulatory energy recovery exemption when it enacte d section 6924(q) as part of “The Hazardous and Solid Waste Amendments of 1984,” Pub. L. No., 98-616, § 204(b)(1), 98 Stat. 3221, 3236-37 (Nov. 8, 1984). See AMC I , 824 F.2d at 1189 (noting Congress “apparently added [section 6924(q)(1)] to override” 40 C.F.R. § 261.33 (1983)); Horsehead Res. Dev. Co. , 16 F.3d at 1253 (“Exempting facilities that burned hazardous waste for energy recovery from Subtitle C’s requirements created a regulatory ‘loophole’ by means of which ove r half of the hazardous waste generated in the United States came to be burned in [boilers and industrial furnaces] not subject to RCRA. Congress closed this loophole by en acting RCRA section 3004(q)[, which] set a deadline of N ovember 8, 1986 for the EPA to promulgate regulations govern ing the burning of hazardous waste for energy recovery.” (citation omitted)).

Section 6924(q) governs “[h]azardous waste used as fuel” and mandates that EPA regulate en tities that produce, burn for energy recovery or distribute/ market hazardous-waste-derived fuel. In particular, it provide s that EPA “shall promulgate regulations establishing . . . as may be necessary to protect
human health and the environmen t”: “(A) standards applicable to the owners and operators of facilities which produce a fuel5

. . . from any hazardous waste identified or listed under [42 U.S.C. § 6921], . . . (B) standard s applicable to the owners and operators of facilities which burn, for purposes of energy recovery, any [such] fuel . . . or any fuel which otherwise contains any hazardous waste . . . and (C) standa rds applicable to any person who distributes or markets any [such] fuel . . . or any fuel which otherwise contains any hazardous waste.” 42 U.S.C. § 6924(q)(1)(A)-(C). 1 In January 1985, pursuant to

1 Section 6924(q)(1) provides in full:

(q) Hazardous waste used as fuel (1) Not later than two years after November 8, 1984, and after notice and opportunity for public hearing, the Administrator shall promulgate regulations establishing such— (A) standards applicable to the owners and operators of facilities which produce a fuel— (i) from any hazardous waste identified or listed under section 6921 of this title, or (ii) from any hazardous waste identified or
listed under section 6921 of this title and any other material; (B) standards applicable to the owners and operators of facilities which burn, for purposes of energy recovery, any fuel produced as provided in subparagraph (A) or any fuel which otherwise contains any hazardous waste
identified or listed under section 6921 of this title; and (C) standards applicable to any person who distributes or markets any fuel which is produced as provided in subparagraph (A) or any fuel which otherwise contains any hazardous waste
identified or listed under section 6921 of this title; as may be necessary to protect human health and the environment. Such standards may include any of the6

section 6924(q), EPA eliminated the energy recovery
exclusion. See Hazardous Waste Management System; Definition of Solid Waste, 50 Fed. Reg. 614, 664 (Jan. 4, 1985) (amending definition of “solid waste” to provide that “[m]aterials are solid wastes if they ar e recycled” by, inter alia, “[b]urning for energy recovery”).

EPA proposed the Comparable Fuels Exclusion in 1996.

See Revised Standards for Hazardous Waste Combustors, 61 Fed. Reg. 17,358, 17,529-30 (Apr. 19, 1996). Following notice and comment, the final version was published in the
1998 Rule. See 63 Fed. Reg. at 33,823-29. The Comparable Fuels Exclusion exempts from the section 6924(q) hazardous waste fuel standard requirement all “comparable fuels,” which are “fuels which are produced from a hazardous waste, but which are comparable to some currently used fossil fuels.” 2

Id . at 33,782; see id . at 33,783-801. To be comparable, the fuel must “meet specification levels comparable to fossil fuels for concentrations of hazardous constituents and for physical properties that affect burning,” such as heating value and

requirements set forth in paragraphs (1) through (7) of subsection (a) of this section as may be appropriate. Nothing in this subsection sh all be construed to affect or impair the provisions of section 6921(b)(3) of this title. For purposes of this subsection, the term
“hazardous waste listed under section 6921 of this title” includes any commercial chemical product
which is listed under section 6921 of this title and which, in lieu of its original intended use, is (i) produced for use as (or as a component of) a fuel, (ii) distributed for use as a fuel, or (iii) burned as a fuel.

2 The Comparable Fuels Exclusion includes “an exclusion for a particular type of hazardous waste-derived fuel, namely a type of synthesis gas (‘syngas’) meeting par ticular specifications.” 63 Fed. Reg. at 33,785.7

viscosity. 63 Fed. Reg. at 33,783; see 40 C.F.R. §§ 261.4(a)(16) (“The following mate rials are not solid wastes for the purpose of this part: . . . [c]omparable fuels or comparable syngas fuels that meet the requirements of § 261.38.”), 261.38 (setting out “[s] pecifications for excluded fuels” as well as other conditions and limitations). The Comparable Fuels Exclusion also imposes notification requirements, including (1) that the generator of a comparable fuel provide to the appropriate State or to EPA notice of, inter alia, the hazardous waste content and the location where it will be burned and (2) that the burner of such fuel publish in a local newspaper notice of the fact, lo cation and estimated extent of the burning. 63 Fed. Reg. at 33,784, 33,797-98 (codified at 40 C.F.R. § 261.38(b)(2)). 3

EPA’s stated rationale for the Comparable Fuels Exclusion was that EPA “has discretion to classify . . . as a fuel product, not as a waste” a “hazar dous waste-derived fuel [that] is comparable to a fossil fuel in terms of hazardous and other key constituents and has a heatin g value indicative of a fuel.”
Id . at 33,783. Under this rationale, EPA explained, it “can reasonably determine that a material which is a legitimate fuel
and which contains hazardous constituents at levels comparable to fossil fuels is not being ‘discarded’ within the meaning of RCRA section 1004( 27) [42 U.S.C. § 6903(27) (defining “solid waste)”], and th erefore is not “waste.” 63 Fed. Reg. at 33,783. Such a determination, EPA continued, “promotes RCRA’s resource recove ry goals wit hout creating

3 The Comparable Fuels Exclusion imposes additional conditions “to assure that burning of comparable fuels will not become part of the waste management problem”—notably, it limits comparable fuels combustion to industrial furnaces, industrial and utility boilers and hazardous wast e incinerators and it prohibits meeting specification limits through dilution. 63 Fed. Reg. at 33,784.8

any risk greater than those posed by the commonly used
commercial fuels.” Id . In setting its comparable fuel specifications, EPA used a “benchmark” approach “based on
the level of hazardous and other constituents normally found in
fossil fuels” so that “concentrations of hazardous constituents in the comparable fuel could be no greater than the
concentration of hazardous cons tituents normally occurring in
commercial fossil fuels.” Id . at 33,784. Under the benchmark specifications, EPA stated, it “reasonably expect[ed]—based on the methodology used to establish the specification—that the comparab le fuel will pose no greater risk when burned than a fossil fuel and concomitant energy recovery benefits will be rea lized from reusing the waste to displace fossil fuels.” Id . EPA further explained that it “conclude[d] it has discretion in exercising jurisdiction over
hazardous waste-derived fuels that are essentially the same as fossil fuel, since there would likely not be environmental benefits from regulating those hazardous waste-derived fuels (i.e., burners would likely just choose to burn fossil fuels).”
Id. In fact, EPA asserted, many of the commercial fossil fuels already being burned “could be less ‘clean’ than the comparable fuels, so that substitution of some commercial
fuels could be a net deterrent.” Id . In sum, EPA “expect[ed] that the comparable fuel would pose no greater risk when
burned than a fossil fuel and would at the same time be physically comparable to a fossil fuel, leading to the conclusion that EPA may classify these materials as products,
not wastes.” Id

. Multiple petitioners—representing both environmental and industry groups—filed timely petitions for re view of the Comparable Fuels Exclusion, wh ich petitions were held in abeyance pending, initially, settlement negotiations and, subsequently, an administrative ap peal of the related challenge
to EPA’s “Gasification Exclusion Rule” in Sierra Club v. EPA

, No. 08-1144 (D.C. Cir. June 27, 2014). The Comparable9

Fuels Exclusion case was removed from abeyance in March
2013.

II.

We have subject matter jurisd iction to review the petitions under 42 U.S.C. § 6976(a)(1), “which gives this court exclusive jurisdiction over ‘petiti ons for review of action of the EPA in promulgating any regul ation, or requirement under
RCRA.’ ” Cement Kiln Recycling Coal. v. EPA , 493 F.3d 207, 214 (D.C. Cir. 2007) (brackets omitted). Before reaching the merits, we consid er the Petitioners’ standing vel

non under Article III of the United States Constitution. See
Bancoult v. McNamara , 445 F.3d 427, 432 (D.C. Cir. 2006) (“The ‘first and fundamental qu estion’ that we are ‘bound to
ask and answer’ is whether the c ourt has jurisdiction to decide the case.” (quoting Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 94 (1998))).

A. Standing

“Because Article III limits the constitutional role of the federal judiciary to resolvi ng cases and controversies, a showing of standing ‘is an essential and unchanging’ predicate to any exercise of our jurisdiction.” Fla. Audubon Soc’y v.

Bentsen , 94 F.3d 658, 663 (D.C. Cir. 1996) ( en banc ) (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560 (1992) (citation omitted)). Moreover, “the party invoking the court’s jurisdiction . . . bears the burde n of demonstrating that it satisfies the ‘irreducible constitutional minimum’ of standing: (1) an ‘injury in fact’ that is ‘concrete and particularized’ as well as ‘actual or imminent’; (2 ) a ‘causal connection’ between the injury and the challenged conduct; and (3) a likelihood, as opposed to mere speculation, ‘that the injury will be redressed by a favorable decision.’ ” Ark Initiative v. Tidwell , 749 F.3d 1071, 1075 (D.C. Cir. 2014) (quoting Lujan , 504 U.S. at 560– 61 (1992) (quotation marks and brackets omitted)). The10

Environmental Petitioners claim representational standing on
behalf of their members. A ccordingly, each must demonstrate that “[1] its members would othe rwise have standing to sue in their own right, [2] the interests it seeks to protect are germane to the organization’s purpose, and [3] neither the claim asserted nor the relief requested requires the participation of individual
members.” Defenders of Wildlife v. Perciasepe , 714 F.3d 1317, 1323 (D.C. Cir. 2013).

The Environmental Petitioners have met their burden of demonstrating standing on behalf of their members. They have submitted declarations of long-time members who spend time near facilities which, as a result of the Comparable Fuels Exclusion, now burn comparable fuels, and who are concerned about the emissions’ effects on their health and, in some cases, spend less time outdoors on that account. See, e.g.

, Br. for Pet’rs, Decls. Add. 6 (declarat ion of NRDC member Doris Falkenheiner), 12-14 (Sierra Cl ub member Glen Besa), 22-23 (Sierra Club member William Fontenot), 34-35 (Sierra Club member Kristina Moazed). The declarations’ averments satisfy the Environmental Petitioners’ evidentiary burdens to demonstrate injury, causa tion and redressability. See Ass’n of Battery Recyclers v. EPA , 716 F.3d 667, 672 (D.C. Cir. 2013) (finding association had Arti cle III standing based on members’ averments that “they li ve or work in close proximity to [challenged] smelters and have reduced their time outdoors in response to concerns about pollution—precisely the kinds of harms the Supreme Court has deemed sufficient to show injury in fact”).

Intervenor American Chem istry Council challenges the
Environmental Petitioners’ sta nding, asserting they did not
demonstrate that as of the time the petitions were filed , there was a “substantial probability” that a facility located near one
of their members would burn comparable fuels, thereby causing the alleged injury—largely because they do not aver11

any facility had then provided notice of such burning—either to the applicable RCRA dir ector or through newspaper publication—prerequisites unde r the 1998 Rule to burning comparable fuels. 4 See Br. for Intervenor 14-15; 40 C.F.R. § 261.38(b)(2); see also Chamber of Commerce v. EPA , 642 F.3d 192, 199-200 (D.C. Cir. 2011) (p etitioner bears burden to “show a ‘substantial probability’ that it has been or will be injured, that the defendant caused its injury, and that the court could redress that injury”; “standing is assessed as of the time a suit commences” (brackets, capit alization and quotation marks omitted)). We disagree.

It is “well-established . . . that standing will lie where ‘a plaintiff demonstrates that the challenged agency action
authorizes the conduct that al legedly caused the plaintiff’s injuries, if that conduct would a llegedly be illega l otherwise.’ ” Am. Trucking Ass’n v. Fed. Motor Carrier Safety Admin. , 724 F.3d 243, 248 (D.C. Cir. 2013) (quoting Animal Legal Def. Fund, Inc. v. Glickman , 154 F.3d 426, 440 (D.C. Cir. 1998) ( en banc )). This is precisely the case here. Once EPA promulgated the Comparable Fuels Exclusion, it was “ ‘a hardly-speculative exercise in naked capitalism’ ” to predict that facilities would take advantage of it to burn hazardous-waste-derived fuels rather than more expensive
fossil fuels. Id . (inferring that “motor carriers would respond to the hours-increasing provision s by requiring their drivers to use them and work longer days” (quoting Abigail Alliance for Better Access to Developmental Drugs v. Eschenbach , 469 F.3d 129, 135 (D.C. Cir. 2006))). And the Intervenor does not dispute that, as it turned out, many facilities did just that. In fact, one facility in proximity to the Environmental Petitioners’
members—the Chemical Co. Ba ton Rouge Plastics Plant—had

4 The Intervenor does not question that the Environmental
Petitioners meet the second and third representational standing requirements. Nor do we.12

pending RCRA applications to combust hazardous waste in its boilers (subject to RCRA regul ation) before the 1998 Rule issued—which applications it pr omptly withdrew in May 1999 when it achieved compliance with the Comparable Fuels
Exclusion and could therefore burn such fuels free from RCRA regulatory constraints. See Br . for Pet’rs, Decls. Add. 37 (May 17, 1999 Letter from Exxon Chemical Co. Baton Rouge Plastics Plant manager to Louisiana Department of Environmental Quality Office of Waste Services).

The Intervenor also asserts that the Environmental
Petitioners have not shown that burning comparable fuels is any more dangerous than burni ng fossil fuels and therefore they have not demonstrated the possibility of any injury from the Comparable Fuels Exclusion. “In EPA’s expert judgment,” they note, “burning these comparable fuels will have roughly the same risks, and the same affect [sic] on air quality, as burning commercially available virgin fuels.” Br.
for Intervenor 21. The Envir onmental Petitioners, however,

are challenging EPA’s assessment of the Comparable Fuels Exclusion’s risks—and we “assume for standing purposes”
that the Environmental Petitioners are “correct on the merits.”
See Sierra Club v EPA , 699 F.3d. 530, 533 (D.C. Cir. 2012). 5

In addition, both EPA and th e Intervenor challenge the standing of petitioner Environm ental Technology Council, “a national non-profit trade associat ion of commercial firms that provide technologies and services for recycling, treatment, and secure disposal of industria l and hazardous wastes.” Petitioners’ Rule 26.1 Disclosure Statement at 2 (Feb. 7, 2014).

5 Given our conclusion that NRDC and Sierra Club have demonstrated standing based on their members’ asserted injuries from facilities burning hazardous-waste-derived fuels, we need not
consider the Environmental Petitio ners’ alternative claims of informational and procedural injury.13

We agree with EPA that under our precedent, the Environmental Technology C ouncil’s interest in the litigation—“to protect its memb ers’ competitive position in selling greater quantities of waste treatment and disposal services,”—“does not fall within the zone of interests” that RCRA is intended to protect. Br. for Resp. 18 (citing Hazardous Waste Treatment Council v. Thomas , 885 F.2d 918, 922-23 (D.C. Cir. 1989)); see also Sierra Club v. EPA , 292 F.3d 895, 902-903 (D.C. Cir. 2002); Cement Kiln Recycling
Coal. v. EPA , 255 F.3d 855, 871 (D.C. Cir. 2001). Environmental Technology Council therefore lacks a cause of action and we deny its petition for review. See Lexmark, Int’l, Inc. v. Static Control Components, Inc. , 134 S. Ct. 1377, 1388 (2014).

B. Statutory Construction

On the merits, the Petitioners first contend the Comparable Fuels Exclusion is inconsistent with the language of section 6924(q). We review EPA’s interpretation of RCRA—a statute it is charged with administering—under the familiar two-step analysis of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837 (1984). See Am. Chem.
Council v. EPA , 337 F.3d 1060, 1063 (D.C. Cir. 2003).
Under Chevron :

We first ask “whether Congress has directly spoken to the precise question at issue,” in which case we “must give effect to the unambiguously expressed intent of Congress.” If the “statute is silent or ambiguous with respect to the specific issue,” however, we move to the second step and defer to the agency’s interpretation as long as it is “based on a permissible
construction of the statute.”

Natural Res. Def. Council v. EPA , 706 F.3d 428, 431 (D.C. Cir. 2013) (quoting Chevron , 467 U.S. at 842–43 (quotation marks14

omitted)). We stop on Chevron step 1 because we agree with the Petitioners that the Congress spoke directly to the question whether EPA may exclude what it calls “comparable
fuels”—and foreclosed their exclusion.

Section 6924(q) unequivoca lly provides that EPA “ shall promulgate regulations establishi ng . . . standards” such “as may be necessary to prot ect human health and the environment”—applicable to thr ee categories of entities: (1) “owners and operators of facilities which produce a fuel . . .
from any hazardous waste identified or listed under [42 U.S.C. §] 6921,” (2) “owners and operators of facilities which burn, for purposes of energy recovery, any [such] fuel” and (3) “ any person who distributes or markets any [such] fuel.” 42 U.S.C. § 6924(q)(1)(A)-(C) (emphases added). The word “shall” makes the directive to regulat e hazardous-waste-derived fuels mandatory. See Miller v. French , 530 U.S. 327, 337 (2000) (referring to “mandatory term ‘shall’ ”); Ass’n of Civilian Technicians, Mont. Ai r Ch. No. 29 v. FLRA, 22 F.3d 1150, 1153 (D.C. Cir. 1994) (“The word ‘shall’ generally indicates a
command that admits of no discreti on on the part of the person instructed to carry out the dire ctive.”). And the repeated use of “any” makes the mandate broadly inclusive—reaching all fuels produced from all listed hazardous wastes. See Nat’l Ass’n of Clean Water Agencies v. EPA , 734 F.3d 1115, 1128 (D.C. Cir. 2013) (“The word ‘any’ is usually understood to be all inclusive, and EPA presented no compelling reason why ‘any’ should not mean ‘any.’ ” (quotation marks and citation omitted)); United States v. Gonzales , 520 U.S. 1, 5 (1997) (“Read naturally, the word ‘any’ has an expansive meaning, that is, one or some indiscriminately of whatever kind.” (quotation marks omitted)); cf

. Massachusetts v. EPA , 549 U.S. 497, 528-29 (2007) (Clean Air Act definition of “air pollutant” as “ ‘ any air pollution agent or combination of such agents, including any physical, chemical . . . substance or
matter which is emitted into or otherwise enters the ambient15

air’ . . . embraces all airborne compounds of whatever stripe,
and underscores that intent thr ough the repeated use of the word ‘any’ ”) (emphases in original). 6

From the statute’s mandatory and inclusive language we can only conclude the Congress intended to require that EPA regulate the production, burning for energy recovery and distributing/marketing of all such fuels derived from all listed
hazardous wastes—with the sole express exclusions of (1) certain oil-containing petroleum refinery wastes that are converted into petroleum coke and (2) facilities that burn only de minimis quantities of hazardous waste, see 42 U.S.C. § 6924(q)(2)(A)-(B). Given the plain intent of the Congress, EPA had no discretion, as it claimed, to create its own Comparable Fuels Exclusion to exempt from regulation fuels
that are derived from a listed hazardous waste and therefore subject to mandatory regulation under section 6924(q). Cf

. Nat’l Ass’n of Clean Water Agencies

, 734 F.3d at 1128 (“Congress’s use of the word ‘a ny’ in the definitional phrase

‘ any facility which combusts any solid waste from commercial
or industrial establishments’ rendered the phrase clear and unambiguous, and EPA had no aut hority to create exceptions not explicitly listed in the st atute through its definition of ‘commercial or industrial waste.’ ” (citing Natural Res. Defense Council v. EPA , 489 F.3d 1250 (D.C. Cir. 2007)) (emphases in original)).

6 The intended breadth of coverage is further illustrated by the express inclusion of “ any commercial chemical product which is
listed under section 6921 of this title and which, in lieu of its original intended use, is (i) produced for u se as (or as a component of) a fuel, (ii) distributed for use as a fuel, or (iii) burned as a fuel.” 42 U.S.C. § 6924(q)(1) (emphasis added). During oral argument, EPA conceded that this language mak es all commercial chemical products subject to section 6924(q). See Recording of Oral Argument at 16:44 (May 12, 2014).16

In particular, contrary to its stated rationale, EPA had no discretion to “reasonably determine that a material which is a legitimate fuel and which cont ains hazardous constituents at levels comparable to fossil fuels is not being ‘discarded’ within the meaning of [42 U.S.C. § 6903(27)].” 63 Fed. Reg. at 33,783. This is the very reasoning that the Congress rejected when it enacted section 6924(q) to close EPA’s “regulatory loophole” for energy recovery. Horsehead Res. Dev. Co. , 16 F.3d at 1253. As we explained in AMC I , the Congress added section 6924(q) in res ponse to EPA’s regula tions that excluded from the definition of “solid waste” (and thereby of “hazardous waste”) hazardous materials th at are—or will be—burned for energy recovery as not “discarded”; and the Congress “addressed this problem by deeming the offending materials to be ‘discarded’ and therefore within the statutory definition of
‘solid waste.’ ” AMC I

, 824 F.2d at 1189 (emphasis added). 7
Thus, for the purpose of in terpreting section 6924(q), “discarded” is not, as EPA claims in the 1998 Rule, “an ambiguous term.” 63 Fed. Reg. at 33,783. And EPA
therefore has no discretion to “reas onably” construe the term to exclude hazardous-waste-derived fuels from regulation.

EPA argues in its brief that the Comparable Fuels
Exclusion is itself a “standard” within the meaning of section

7 AMC I focused on “the burning of commercial chemicals as fuels, contrary to their original intended use”—a specific instance of energy recovery burning that section 6924(q) identifies. See supra note 8. Section 6924(q)’s compass is, as we explained supra , far
broader than that. See AMC I , 824 F.2d at 1189 (“ ‘Hazardous waste, as used in this provision [6924(q)], includes not only wastes identified or listed as haz ardous under EPA’s regulations , but also includes any commercial chemical product (and related materials) listed pursuant to 40 C.F.R. § 261.33, which is not used for its original intended purpose but inst ead is burned or processed as fuel.’ ” (quoting H.R. Rep. No. 98-198, at 40 (1983) (emphasis added))).17

6924(q), which requires only that EPA establish “standards . . . as may be necessary to protect human health and the environment,” 42 U.S.C. § 6924(q)(1). Br. for Resp’t 28-29,
33. EPA asserts that the Co mparable Fuel Exclusion’s specifications and restrictions —in conjunction with existing Clean Air Act, Occupational Safety and Health Administration and Department of Transporta tion regulations—constitute
EPA’s determination of “the le vel of regulation ‘necessary’ for the management, i.e., the storage, transportation, and burning, of comparable fuels that is pr otective of human health and the environment, as require d by section 6924(q).” Id . at 29. But this theory was not part of EPA’s rationale as expressed in the 1998 Rule. There, EPA concluded it need not establish any standards applicable to qualifying comparable fuels because a comparable fuel is not a “wast e” but rather a “f uel product” and
therefore excluded from the statute’s reach. See 63 Fed. Reg. at 33,783 (“The rationale for the Agency’s approach is that if a hazardous waste derived fuel is comparable to a fossil fuel in terms of hazardous and other key constituents and has a heating value indicative of a fuel, EPA ha s discretion to classify such material as a fuel product, not as a waste

. ”); id (“Under this final rule, EPA is excluding from the regulatory definition of
solid waste hazardous waste-derived fuels that meet specification levels comparable to fossil fuels for
concentrations of hazardous constituents and for physical properties that affect burning.”).

The rationale EPA now offers —that by setting criteria for
exclusion from section 6924 re gulation, it was in fact “establishing standards” unde r section 6924 specifications—is entirely post hoc. Accordingl y, we may not sustain the 1998
rule thereunder. See Nat’l Ass’n of Clean Water Agencies

, 734 F.3d at 1138 (“EPA did not state this rationale in the rulemaking, and we cannot ‘accept appellate counsel’s post hoc rationalizations for ag ency action.’ ” (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co. , 463 U.S.18

29, 50 (1983))); see also SEC v. Chenery Corp. , 318 U.S. 80, 95 (1943) (“[A]n administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained.”).
EPA’s new rationale is also flat ly inconsistent with the 1998 Rule, which expressly and repeatedly characterized its action
as an “exclusion.” See, e.g. , 63 Fed. Reg. at 33,782-84. Finally, the 1998 Rule did not ev en purport to apply the RCRA protection standard EPA now cites—that the regulatory standards be sufficient “to protect human health and the environment.” 42 U.S.C. § 6924(a), (q)(1). Instead, EPA considered only whether a fuel complying with the Comparable Fuels Exclusion’s specifications presents a “greater risk than burning fossil fuel”—which is quite a different level of protection—a nd EPA’s answer was merely that it “expects” not. See 63 Fed. Reg. at 33,783-84.

In support of its rational e as expressed in the 1998 Rule—that hazardous wastes recycled for energy recovery are excluded from section 6924(q)’s “standard” mandate—EPA relies on Circuit precedent that has upheld EPA’s characterization of recycled materials as not “discarded” and therefore not “waste” subject to RCRA hazardous waste regulation. In AMC I , for example, we concluded at Chevron step 1 that RCRA’s “solid waste” definition precludes EPA from regulating materials produced in the oil refining process—to be recycled th rough reintroduction at the appropriate stage of the re fining process—because the Congress “clearly and unambiguously expressed its intent that ‘solid waste’ (and therefore EP A’s regulatory authority) be limited to materials that are ‘discarded’ by virtue of being disposed of, abandoned, or thrown away.” 824 F.2d at 1193. Accordingly, the term’s plain meaning excludes materials that
“are destined for beneficial reus e or recycling in a continuous process by the generating industry itself,” such as the recycled
materials there. Id . at 1186 (emphasis omitted); accord Ass’n19

of Battery Recyclers, Inc. v. EPA , 208 F.3d 1047, 1056 (D.C. Cir. 2000) (“[A]t least some of the secondary material EPA seeks to regulate as solid waste is destined for reuse as part of a continuous industrial process and thus is not abandoned or thrown away. Once again, ‘by regulating in-process secondary materials, EPA has acted in contravention of Congress’ intent’ because it has based its regulation on an improper interpretation of ‘discarded’ and an incorrect reading
of our AMC I decision.” (quoting AMC I , 824 F.2d at 1193)).

On the flip side, in Safe Food & Fertilizer v. EPA , 350 F.3d 1263 (D.C. Cir. 2003), we upheld as permissible under
Chevron step 2 EPA’s interpretation of the “solid waste” definition to exclude as not “discarded” industrial process byproducts recycled to produce zinc fertilizers as well as the
fertilizers themselves. Id. at 1269-71; see also Am. Mining Cong. v. EPA , 907 F.2d 1179, 1186 (D.C. Cir. 1990) (“Nothing
in AMC [I] prevents the agency from treating as ‘discarded’ the wastes at issue in this case, wh ich are managed in land disposal units that are part of wast ewater treatment systems.”) (emphases omitted). None of the cited cases, however, involved fuels burned for energy re covery so as to come under section 6924(q), which, as we explained in AMC I , “deem[s]” the materials burned for energy recovery to be “ ‘discarded’ and therefore within the statutory definition of ‘solid waste.’ ”

AMC I

, 824 F.2d at 1189; see Horsehead Res. Dev. Co.

, 16 F.3d at 1263 (“ AMC I involved an altogether different facet of waste disposal governed by a different statutory section, i.e.

, the scope of the RCRA term ‘solid waste’ . . . .”). Outside the section 6924(q) energy recovery context—as the cited cases
demonstrate—materials to be reused may be reasonably—or even necessarily—characterized as not “waste” because they
are not “discarded.” See AMC I , 824 F.2d at 1189 (“This specific measure did not, however, revamp the basic
definitional section of the stat ute.”). But not under section 6924(q), which provides that EPA “ shall promulgate20

regulations establishing . . . sta ndards” applicable to producers,
burners and distributors/market ers of a fuel produced from “any hazardous waste identified or listed under [42 U.S.C. § 6921]” and deems the listed component hazardous materials to be “discarded” waste. 42 U.S.C. § 6924(q)(1)(A)-(C) (emphasis added).

Finally, EPA contends that th e “Petitioners’ claim that the Comparable Fuels Rule is inconsistent with section 6924(q) has been waived because it was not raised in comments during the rulemaking.” Br. for Resp’t 21; see Natural Res. Def.
Council v. EPA , 25 F.3d 1063, 1073–74 (D.C. Cir. 1994) (“We do not reach the merits of this challenge because petitioners failed to raise this question . . . before the agency during the notice and comment period. They have therefore waived their opportunity to press this argument in court.”); see also Military Toxics Project v. EPA , 146 F.3d 948, 956-57 (D.C. Cir. 1998). In response, the Petitioners point to two comments they claim raised their statutory argument. See Reply Br. 9-10. First, petitioner Environmental Technology Council submitted a comment criticizing EPA’s “implementing approach” as

an attempt to defer RCRA § 3004(q)-(s) regulation of
. . . hazardous wastes to the CAA in accordance with RCRA § 1006(a) to avoid duplication, but without making the essential finding that such a deferral satisfies the objectives of RCRA

. For example, EPA has not conducted any kind of technical or risk analysis showing how a blanket exemption from all
RCRA Subtitle C controls for hazardous wastes that meet the comparable fuel spec somehow adequately protects human health and the environment

. Thus, the proposal is legally deficient.

Joint Appendix (JA) 387. Second, citing an EPA background document’s explanation for reje cting a “risk” approach in21

setting the comparable fuel specifications in favor of a benchmark approach, commenter Molten Metal Technology Inc. (Molten Metal) asserted:

Therefore, the Agency’s comparable fuels proposal will likely result in higher exemption concentrations
than levels that would nor mally be derived using a risk-based approach. Such an approach would violate the clear Congressi onal mandate in Section 3004(q) of RCRA to regulate the burning of hazardous waste for energy recovery “as may be necessary to protect human health and the
environment.”

JA 374.

We agree with EPA that both comments seem to focus more on the way EPA implemented the Comparable Fuels Exclusion than on its statutory authority vel non to create any such exclusion. Nonetheless, EPA’s response to Molten Metal’s comment suggests that EPA understood Molten Metal to challenge EPA’s statutory au thority to exclude comparable fuels in the first place and affirms its authority to do so: “Section 3004(q) applies to hazardous wastes which are burned for energy recovery. The provision does not speak to EPA’s authority to determine whether particular fuels produced from secondary materials are or ar e not, products rather than wastes.” JA 547. Thus, the issue was expressly addressed by EPA and is properly be fore the court. See Appalachian Power

Co. v. EPA , 135 F.3d 791, 818 (D.C. Ci r. 1998) (“The purpose of the exhaustion requirement is to ensure that the agency is given the first opportunity to bri ng its expertise to bear on the resolution of a challenge to a ru le.”). Moreover, even if a party may be deemed not to have raised a particular argument before the agency, “EPA ‘retains a duty to examine key assumptions as part of its affirmative burden of promulgating22

and explaining a nonarbitrary, non-capricious rule”’ and therefore . . . ‘EPA must justif y that assumption even if no one objects to it during the comment period.’ ” Id . (quoting Small Refiner Lead Phase-Down Task Force v. EPA , 705 F.2d 506, 534-35 (D.C. Cir. 1983); see also Okla. Dep’t of Envtl. Control

v. EPA , 740 F.3d 185, 192 (D.C. Cir. 2014); Ne. Md. Waste Disposal Auth. v. EPA , 358 F.3d 936, 948 (D.C. Cir. 2004) (per curiam). As EPA’s response to Molten Metal’s comment demonstrates, that EPA had st atutory authority under section 6924(q) to exempt some hazardou s-waste-derived fuels from regulation was a “key assumpti on” underlying EPA’s exercise of its “discretion to classify such material as a fuel product, not as a waste,” 63 Fed. Reg. at 33,783, and thereby “exclude” it from section 6924(q)’s ambit. Accordingly, we reject EPA’s “waiver” argument.

For the foregoing reasons, we grant the Environmental Petitioners’ petitions for revi ew and vacate the Comparable
Fuels Exclusion codified at 40 C.F.R. §§ 261.4(a)(16) and 261.38. We deny Environmen tal Technology Council’s petition for review.

So ordered

.