Background
In January 2026, the U.S. Environmental Protection Agency (EPA) announced that it would no longer monetize health-related benefits when developing certain air regulations under the Clean Air Act. This analytical shift changes how economic justifications are presented in rulemakings, including those affecting New Source Performance Standards (NSPS) for stationary combustion turbines.
Following that announcement, Arnold & Porter issued a February 2026 advisory examining the administrative law implications of this change and how courts may evaluate the durability of EPA’s revised approach. This bulletin focuses on what the shift may mean from both a legal and facility-level risk perspective.
Legal Durability Considerations
Under federal administrative law, agencies may revise their methodologies. However, when an agency departs from a longstanding analytical framework, courts typically require a reasoned explanation, consideration of prior reliance interests, and a defensible administrative record.
While certain provisions of the Clean Air Act preclude cost considerations in setting standards (such as the National Ambient Air Quality Standards), economic analysis often supports rule justification and implementation design. A meaningful change in cost-benefit methodology may invite judicial review, particularly if stakeholders argue that prior regulatory approaches relied on quantified public health benefits.
Facility-Level Risk Implications
For industrial operators, the issue is not necessarily whether standards will become more or less stringent, but whether future rules may face increased litigation and potential remand. Regulatory stability often carries as much weight as stringency when evaluating compliance strategy.
If federal rulemaking analyses narrow their economic framing, greater scrutiny may occur at the permit level. Facilities may benefit from conservative modeling assumptions, clear justification for control technologies, robust emissions documentation, and proactive engagement with regulators and surrounding communities.
Compliance with permit limits remains essential. However, the defensibility of the administrative record supporting those limits is becoming equally important.
Technical Distinction: Health Standards vs. Economic Analysis
It is important to distinguish between health-based standards, such as the National Ambient Air Quality Standards (NAAQS), which are set without cost consideration under the Clean Air Act, and economic analyses that support regulatory justification but do not establish statutory health thresholds. The current policy shift primarily affects the presentation of benefits in rulemaking analyses rather than the underlying health standards themselves.
Brief Summary of the Arnold & Porter Advisory (February 2026)
The advisory explains that while EPA may revise its cost-benefit methodology, courts reviewing final rules will assess whether the agency provided a sufficient and reasoned explanation for departing from prior approaches. The durability of future rules may depend on the strength of the administrative record supporting this analytical shift.
The advisory also notes that litigation risk may increase if stakeholders challenge whether the revised framework adequately addresses statutory obligations. In some cases, courts could remand rules for further explanation, potentially creating regulatory uncertainty during review cycles.
As the regulatory landscape evolves, facility owners should prioritize both compliance and defensibility. An early permitting strategy, well-supported technical demonstrations, and comprehensive operational documentation remain critical for managing long-term regulatory and litigation risk.
SCS Engineers Summary
SCS Engineers recommends the importance of adhering to permit limits and maintaining a robust administrative record to support them. As regulatory requirements evolve, ensuring both compliance and defensibility is critical for organizations. Sophisticated software designed for the waste industry supports the dual goals of creating compliance-ready reports and substantiation.
Additional Clean Air Act Resources:
Meet our Author: John Tsun, National Practice Leader – Industrial Clean Air Act Services, SCS Engineers.
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