Natural Resources Defense Council v. United States Environmental Protection Agency

This case arises from the efforts of the Environmental Protection Agency (“EPA”) pursuant to section 402(a) of the Clean Water Act (the “CWA”), 33 U.S.C. § 1342(a), to regulate the discharge of ballast water from ships.1 A ship takes on and discharges ballast water to compensate for changes in its weight caused by activities such as loading and unloading cargo or consuming fuel or supplies. The amount of water can range from hundreds of gallons to as much as 25 million gallons — enough to fill thirty-eight Olympic-sized swimming pools. More than 21 billion gallons of ballast water are released in the United States annually. See Nw. Envtl. Advocates v. EPA 537 F.3d 1006, 1013 (9th Cir.2008).

When a ship takes on ballast water, it can inadvertently pick up organisms and their eggs and larvae, as well as sediment and pollutants. When the ship discharges ballast water, often in a new place, these organisms and pollutants are ejected into the surrounding waterbody, enabling these organisms to establish new, non-native populations. As a result, ships have become one of the primary ways that invasive species are spread from one water-body to another. Id. at 1012-13 (“All told, more than 10,000 marine species each day hitch rides around the globe in the ballast water of cargo ships.” (quoting Nw. Envtl. Advocates v. EPA No. C 03-05760 SI, 2006 WL 2669042, at *3 (N.D.Cal. Sept. 18, 2006))).

Invasive species cause severe economic and ecological harm, including by destroying native fish species and shellfish industries, creating algae blooms, and devastating tourism. Zebra mussels are a particularly destructive example. They were first introduced to Lake Erie in the 1980s by a freighter from Europe that discharged ballast water containing mus-*562seis.2 These mussels have wreaked havoc in the Midwest and Northeast by blocking water intake and outtake at power plants and other industrial facilities, causing nearly $70 million in damage between 1989 and 1995. Nw. Envtl. Advocates, 537 F.3d at 1013. One study estimates the damage caused by invasive species collectively at “about $137 billion a year — more than double the annual economic damage caused by all natural disasters in the United States.” Id. (quoting Nw. Envtl. Advocates, 2006 WL 2669042, at *4).3

Ballast water discharge is particularly problematic in the Great Lakes. Vessels that sail' exclusively in the Great Lakes, known as “Lakers,” account for over ninety-five percent of ballast water volumes transferred in the Great Lakes. Unfortunately, Lakers are more likely than oceangoing vessels to spread invasive species because the short duration of their voyages allows organisms to survive in their ballast.

In April 2013, EPA issued a Vessel General Permit (the “2013 VGP”), pursuant to section 402 of the CWA, 33 U.S.C. § 1342, to regulate the discharge of ballast water from ships. In response, four environmental groups filed three Petitions for Review (“PFRs”) alleging that EPA acted arbitrarily and capriciously in issuing the 2013 VGP: petitioner Natural Resources Defense Council (“NRDC”) filed a PFR on May 3, 2013 in this Court; petitioners Northwest Environmental Advocates (“NWEA”) and the Center for Biological Diversity jointly filed a PFR on May 3, 2013 in the United States Court of Appeals for the Ninth Circuit; and petitioner National Wildlife Federation (“NWF”) filed a PFR on July 3, 2013 in the United States Court of Appeals for the D.C. Circuit.4 In an order dated May 24, 2013, the Judicial Panel on Multidistrict Litigation issued a Consolidation Order and assigned final venue for the first two petitions, and any subsequently filed petition, to this Court.

On May 31, 2013, the Lake Carriers’ Association and the Canadian Shipowners Association (the “CSA”) filed a motion to intervene, which was granted on October 7, 2013. On January 1, 2014, the CSA filed a PFR in this case. EPA and the CSA jointly moved to sever the CSA PFR from this case and hold it in abeyance; the motion was granted on May 23, 2014.

We find that EPA acted arbitrarily and capriciously in issuing parts of the 2013 VGP, and therefore remand this matter to the EPA for further proceedings.

BACKGROUND

A. The CWA

Congress created the CWA to limit pollution in the waters of the United States. See 33 U.S.C. § 1251(a) (objective of CWA is to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters”); S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 541 U.S. 95, 102, 124 S.Ct. 1537, 158 L.Ed.2d 264 (2004) (same); Waterkeeper All., Inc. v. EPA, 399 F.3d 486, 490-91 (2d *563Cir.2005) (same). The CWA thus prohibits the “discharge of any pollutant” from a “point source” to the “navigable waters” of the United States, except as permitted by the CWA. 33 U.S.C. §§ 1311(a), 1362 (emphasis added). The “discharge of a pollutant” includes “any addition of any pollutant to navigable waters from any point source.” Id. § 1362(12)(A). A “pollutant” includes solid, industrial, agricultural, and biological waste. Id. § 1362(6). A “point source” is “any discernible, confined and discrete conveyance, including but not limited to any ... vessel or other floating craft, from which pollutants are or may be discharged.” Id. § 1362(14). “Navigable waters” is defined as “the waters of the United States, including the territorial seas.” Id. § 1362(7). The discharge of polluted water from a vessel ballast tank is a point source discharge covered by the CWA. See Nw. Envtl. Advocates, 537 F.3d at 1021.

A key component of the statute is the establishment of water quality standards. Water quality standards are set by states for waters within their boundaries and are then reviewed for approval by EPA. See 33 U.S.C. § 1313; 40 C.F.R. §§ 131.4,131.10-.11; see also NRDC v. EPA 279 F.3d 1180, 1183 (9th Cir.2002) (“Under the CWA, each state sets its own water quality standards, subject to review and approval by the EPA.”). EPA must ensure that the standard proposed by the state will comply with the requirements of the CWA before approving it. See 33 U.S.C. §§ 1311(b)(1)(C), 1313(a) 1342(a)(1); 40 C.F.R. § 122.4(d).

1. National Pollutant Discharge Elimination System Permits

An entity seeking to discharge a pollutant is required to obtain and comply with a permit that limits the amounts and kinds of pollutants being discharged. See NRDC v. EPA 822 F.2d 104,108. (D.C.Cir.1987); see also Waterkeeper All., 399 F.3d at 498 (discharge allowed “where ... permits ensure that every discharge of pollutants will comply with all applicable effluent limitations and standards”). This permit, known as a National Pollutant Discharge Elimination System (“NPDES”> permit, establishes enforceable effluent limitations, as well as monitoring and reporting requirements.

NPDES permits, which are issued either by EPA or a state in a federally approved permitting system, see 33 U.S.C. § 1342, may be individual (issued to a specific entity to discharge pollutants at a specific place) or general (issued to an entire class of dischargers in a geographic location), see 40 C.F.R. §§ 122.21, 122.28(a)(2), 124.1-.21, 124.51-66. The permit here is a general permit.

Permits can impose two different types of standards on discharges: (1) technology-based standards and (2) water quality-based standards. See 33 U.S.C. §§ 1311(b)(1)(C) and (b)(2)(A), 1313, 1342(a). The 2013 YGP imposes both.

a. Technology-Based Effluent Limits

Technology-based effluent limits (“TBELs”) set effluent limitations on a point source based on how effectively technology can reduce the pollutant being discharged. See 33 U.S.C. §§ 1311(b), (e), 1314(b); see also PUD No. 1 of Jefferson Cty. v. Wash. Dep’t of Ecology, 511 U.S. 700, 704, 114 S.Ct. 1900, 128 L.Ed.2d 716 (1994) (holding that, to achieve goals of CWA, EPA is required to “establish and enforce technology-based limitations on individual discharges into the country’s navigable waters 'from point sources”). Congress designed this standard to be technology-forcing, meaning it should force agencies and permit applicants to adopt technologies that achieve the great*564est reductions in pollution. See NRDC, 822 F.2d at 124 (holding that CWA seeks “not only to stimulate but to press development of new, more efficient and effective technologies,” which is “essential purpose of this series of progressively more demanding technology-based standards”).5

In determining the standard for TBELs, EPA considers the source of the pollution (existing or new) and the type of pollutant. For nonconventional pollutants from existing sources, EPA is required to set effluent limits based on the “best available technology economically achievable” or “BAT.” 33 U.S.C. § 1311(b)(2)(A).6 BAT requires the “application of the best available technology economically achievable for such category or class, which will result in reasonable further progress toward the national goal of eliminating the discharge of all pollutants.” Id.; see NRDC, 822 F.2d at 123 (CWA designed to progress “toward implementation of pollution controls to the full extent of the best technology which would, become available”). Because invasive species are a nonconven-tional pollutant from an existing source, ballast water discharges are subject to BAT.

EPA considers a number of factors in assessing whether a technology is BAT, including:

• the cost of achieving the effluent reductions,

• the age of equipment and facilities involved,

• the process employed,

• the engineering aspects of various control techniques,

• potential process changes,

• non-water-quality environmental impacts including energy requirements, and

• other factors as EPA “deems appropriate.”

See 33 U.S.C. § 1314(b)(2)(B).

EPA can mandate that BAT requires the use of a technology that is not currently available within a particular industry when (1) the technology is available in another industry, (2) EPA finds that the technology is transferrable from that other industry, and (3) EPA can reasonably predict that such technology will adequately treat the effluent. See Kennecott v. EPA, 780 F.2d 445, 453 (4th Cir.1986) (citing Tanners’ Council of Am., Inc. v. Train, 540 F.2d 1188, 1192 (4th Cir.1976)).

b. Water Quality-Based Effluent Limits

If the TBELs are insufficient to attain or maintain water quality standards, the CWA requires NPDES permits to include additional water quality-based effluent limits (“WQBELs”). See 33 U.S.C. §§ 1311(b)(1)(C), 1312(a); NRDC, 822 F.2d at 110 (“Whenever a technology-based effluent limitation is insufficient to make a particular body of water fit for the uses for which it is needed, the EPA is to devise a water-quality based limitation that *565will be sufficient to the task.”). WQBELs are designed to ensure that the discharges authorized by the permit do not violate water quality standards. See 33 U.S.C. §§ 1313,1342(a)(2).

The WQBELs, which supplement the TBELs, are based on the amount and kind of pollutants . in the water. See id. § 1312(a). WQBELs are set without regard to cost or technology availability. See NRDC v. EPA, 859 F.2d 156, 208 (D.C.Cir.1988) (“A technology-based standard discards its fundamental premise when it ignores the limits inherent in the technology. By contrast, a water quality-based permit limit begins with the premise that a certain level of water quality will be maintained, come what may, and places upon the permittee the responsibility for realizing that goal.” (footnote omitted)). WQBELs may be narrative where the calculation of numeric limits is “infeasible.” See 40 C.F.R. § 122.44(k)(3).

No permit may be issued when “the imposition of conditions cannot ensure compliance with the applicable water quality requirements of all affected States.” Id. § 122.4(d). Thus, permits must establish limits on discharges that will lead to compliance with water quality standards. See Trs. for Alaska v. EPA, 749 F.2d 549, 556-57 (9th Cir.1984). (holding that permit must translate state water quality standards into end-of-pipe effluent limitations necessary to achieve those standards).

Because no states have established numeric water quality criteria for invasive species, EPA is required to establish WQBELs that ensure compliance with narrative criteria, designated uses, and an-tidegradation policies that comprise state water quality standards. The permit may then mandate “best management practices” (“BMPs”) to control pollution. See 40 C.F.R. § 122.44(k)(3).

c. Monitoring and Reporting Requirements

NPDES permits also require both monitoring and reporting of monitoring results of TBELs and WQBELs to assure compliance with permit limitations and facilitate enforcement. See 33 U.S.C. §§ 1314,1318, 1342(a)(2); 40 C.F.R. § 122.44(i)(l)-(2).

B. Regulatory History

When the CWA was first being implemented in the 1970s, EPA regulations exempted discharges that were “incidental” to the “normal operation” of vessels from NPDES permitting requirements. See National Pollutant Discharge Elimination System, 38 Fed.Reg. 13,528, 13,530 (May 22, 1973) (codified at 40 C.F.R. § 125.4); see also National Pollutant Discharge Elimination System; Revision of Regulations, 44 Fed.Reg. 32,854, 32,902 (June 7, 1979) (codified at 40 C.F.R. § 122.3(a)). This exemption included ballast water discharges.

In 1999, the NWEA and other environmental organizations submitted a rulemak-ing petition to EPA seeking to repeal this exemption, then codified at 40 C.F.R. § 122.3(a). See Final National Pollutant Discharge Elimination System (NPDES) General Permit for Discharges Incidental to the Normal Operation of a Vessel, 73 Fed.Reg. 79,473, 79,475 (Dec. 29, 2008). EPA denied the petition. See Nw. Envtl. Advocates, 537 F.3d at 1013. The environmental groups challenged the denial in the United States District Court for the Northern District of California, while simultaneously filing a PFR in the United States Court- of Appeals for the Ninth Circuit, in case the district court lacked jurisdiction. The district court issued an order vacating the exemption, see Nw. Envtl. Advocates, 2006 WL 2669042, at *15, and the Ninth Circuit upheld the decision. See Nw. Envtl. Advocates, 537 F.3d *566at 1027. EPA finally repealed the exemption and issued a Vessel General Permit in 2008 (the “2008 VGP”). Draft National Pollutant Discharge Elimination System (NPDES) General Permits for Discharges Incidental to the Normal Operation of a Vessel, 73 Fed.Reg. 34,296 (June 17, 2008).

1. The 2008 VGP

Environmental groups, industry groups, and the State of Michigan challenged the 2008 VGP in a PFR filed in the United States Court of Appeals for the D.C. Circuit, arguing primarily that the 2008 VGP was inadequate because it contained only narrative provisions, not specific numeric limitations on discharges. In March 2011, EPA settled this matter, agreeing to: (1) set “numeric concentration-based effluent limits for discharges of ballast water expressed as organisms per unit of ballast water volume”; (2) set numeric effluent limits that “represent the applicable levels of technology-based control”; and (3) “include more stringent water quality-based effluent limitations” if needed to satisfy applicable water quality standards. Settlement Agreement ¶¶ 9-13, NRDC v. EPA, No. 09-1089 (D.C.Cir. Mar. 8, 2011), ECF No. 1296922.

2. The Creation of New Standards

To create these new, more specific standards, EPA enlisted the help of its own Science Advisory Board (the “SAB”) and the National Research Council/National Academy of Sciences Committee on Assessing Numeric Limits for Living Organisms in Ballast Water (the “NAS Committee”). EPA posed a different question to each scientific body.

a. The SAB

In 2010, EPA asked the SAB to “provide advice on technologies and systems to minimize the impacts of invasive species in vessel ballast water discharge.” App. at 599. Specifically, the SAB looked at four issues: (1) the performance of shipboard systems with available effluent testing data; (2) the potential performance of shipboard systems without reliable testing data; (3) system development for the shipboard systems identified in issues 1 and 2; and (4) the development of reliable information about the status of ballast water treatment technologies and system performance. In considering these questions, the SAB was to take into account The International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “IMO Standard”), adopted by the International Maritime Organization in 2004, which set certain concentration-based ballast water effluent limits. Id. at 610.7

In July 2011, the SAB issued its report Efficacy of Ballast Water Treatment Systems: A Report by the EPA Science Advisory Board (the “SAB Report”). The SAB identified fifty-one ballast-water treatment systems, with five categories of shipboard systems that could reliably achieve the IMO Standard.8 Id. at 601. 8 The SAB found that none of the systems could meet standards 100 or 1,000 times greater than the IMO Standard. Id. at 602. The SAB *567also found that none of the fifty-one shipboard treatments identified could reliably achieve a “no living organism” standard. Id.

b. The NAS Committee

EPA created the NAS Committee to examine “the relationship between the concentration of living organisms in ballast water discharges and the probability of nonindigenous organisms successfully establishing populations in U.S. waters.” Id. at 235.

In its June 2011 report, Assessing the Relationship Between Propagule Pressure and Invasion Risk in Ballast Water (the “NAS Report”), the NAS Committee concluded (1) there was “no significant relationship between ballast volume and invasions,” and (2) “[t]he current state of science does not allow a quantitative evaluation of the relative merits of various discharge standards in terms of invasion probability.” Id. at 363. Essentially, the Committee said that it was unable to establish a reliable numeric limit on discharges that would guarantee protection against invasive species, other than zero.

3. The 2013 VGP

On March 28, 2013, EPA issued the 2013 VGP, the permit now before us, allowing vessels to discharge ballast water subject to certain limitations on the living organisms in the discharge. Final National Pollutant Discharge Elimination System (NPDES) General Permit for Discharges Incidental to the Normal Operation of a Vessel, 78 Fed.Reg. 21,938 (Apr. 12, 2013).9 This constituted final action on the permit pursuant to section 402(a) of the CWA, 33 U.S.C. § 1342(a). The 2013 VGP included TBELs, WQBELs, and monitoring and reporting requirements.

a. TBELs

As discussed above, TBELs impose effluent limitations on a point source based on how much technology is able to reduce the amount of a pollutant at issue. See 33 U.S.C. §§ 1311(b), (e), 1314(b). In this instance, EPA chose to set the TBELs at the IMO Standard, which requires:

(1) Limiting discharges of organisms 50 micrometers or larger to a concentration of fewer than 10 living organisms per cubic meter of ballast water;

(2) Limiting discharges of organisms less than 50 micrometers and greater than or equal to 10 micrometers to concentrations of fewer than 10 living organisms per milliliter (“mL”)of ballast water; and

(3) Limiting discharges of three types of pathogen and pathogen indicators: (1) Vibrio cholerae: fewer than 1 colony forming unit (“cfu”) per 100 mL; (2) Escherichia coli (“E. coli”): fewer than 250 cfu per 100 mL; and (3) intestinal enterococci: fewer than 100 cfu per 100 mL. Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels (VGP): Authorization to Discharge Under the National Pollutant Discharge Elimination System § 2.2.3.5, at 29 (Mar. 28, 2013), available at http://water.epa.gov/ polwaste/npdes/vessels/upload/vgp— permit2013.pdf. The VGP did not set standards for other “small” organisms, such as bacteria or viruses.

*568b. WQBELs

The WQBELs in the 2013 VGP require: (1) oceangoing vessels entering the Great Lakes to continue to perform ballast water exchanges, and (2) all vessels to control discharges “as necessary to meet applicable water quality standards in the receiving water body or another water body impacted by [the] discharges.” VGP § 2.2.3.7, at 43, § 2.3.1, at 59.

c. Monitoring and Reporting Requirements for TBELs and WQBELs

As noted above, NPDES permits must contain conditions that require both monitoring and reporting of monitoring results of TBELs and WQBELs to ensure compliance with water quality standards. See 33 U.S.C. § 1342(a)(2); 40 C.F.R. § 122.44(i)(l)-(2).

i) Monitoring and Reporting Requirements for TBELs

In the 2013 VGP, EPA established the following monitoring requirements for TBELs:

(1) that vessels monitor the functionality of their ballast water treatment systems, if installed; and

(2) that vessels monitor the concentrations of the two “indicator” bacteria, E. coli and enterococci.10

VGP § 2.2.3.5.1.1.2, at 30, § '2.2.3.5.1.1.4, at 31-32.

The first requirement is known as functionality monitoring. Under this requirement, a ballast water treatment program is considered to be in compliance if it is “operating according to the manufacturers’ requirements.” App. at 96.

The second requirement is known as effluent biological organism monitoring. Under this requirement, vessels must collect small-volume samples and analyze them for concentrations of two indicator pathogens. This is required between one and four times a year depending on the treatment system.

ii) Monitoring and Reporting Requirements for WQBELs

The only monitoring required for WQBELs is that ships report the “expected date, location, volume, and salinity of any ballast water to be discharged.” VGP § 4.3, at 72 (emphasis added). Permittees are not required to report actual locations, volumes, or composition of ballast water to be discharged.

d.Lakers

The 2013 VGP requires all Lakers to comply with non-numeric technology-based control measures, like ballast water exchange and other BMPs found in VGP § 2.2.3.3. App. at 85; see VGP § 2.2.3.3, at 27-28. Lakers are also subject to three ballast water management measures found in VGP § 2.2.3.4: (1) conducting an annual assessment of sediment accumulations; (2) minimizing the amount of water taken in nearshore environments; and (3) adequately maintaining sea chest screens, which keep larger organisms like fish out of ballast tanks. VGP § 2.2.3.4, at 28-29. In addition, all Lakers built on or after January 1, 2009, must comply with VGP § 2.2.3.5, which sets numeric ballast water discharge limits. VGP § 2.2.3.5.3.3, at 39.

*569 DISCUSSION

A. Standard of Review

We review a NPDES permit under the Administrative Procedure Act to determine whether EPA’s actions were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). To determine whether the agency’s actions were “arbitrary and capricious,” we consider whether the agency

‘relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.’

Islander E. Pipeline Co. v. McCarthy, 525 F.3d 141, 150-51 (2d Cir.2008) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). We must be “satisfied from the record that ‘the agency ... examine[d] the relevant data and articulate[d] a satisfactory explanation for its action.’ ” Id. at 151 (quoting State Farm, 463 U.S. at 43, 103 S.Ct. 2856). An agency’s action is lawful “only if it rests ‘on a consideration of the relevant factors.’ ” Michigan v. EPA, — U.S. -, 135 S.Ct. 2699, 2706, 192 L.Ed.2d 674 (2015) (quoting State Farm, 463 U.S. at 43, 103 S.Ct. 2856). We afford the agency’s decision greater deference regarding factual questions involving scientific matters in its area of technical expertise. See Balt. Gas & Elec. Co. v. NRDC, 462 U.S. 87, 103, 103 S.Ct. 2246, 76 L.Ed.2d 437 (1983); Envtl. Def. v. EPA, 369 F.3d 193, 204 (2d Cir.2004).

In addition, judicial review of statutory interpretation by an agency is governed by Chevron, U.S.A. Inc. v. NRDC, 467 U.S. 837, 842-45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under Chevron, we must first determine “whether Congress has directly spoken to the precise question at issue” in the CWA. Id. at 842, 104 S.Ct. 2778. If so, we must give effect to the unambiguously expressed intent of Congress. Id. at 842-43, 104 S.Ct. 2778. “[I]f the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843, 104 S.Ct. 2778. As the Supreme Court held in Michigan v. EPA, “[e]ven under this deferential standard, however, ‘agencies must operate within the bounds of reasonable interpretation.’ ” 135 S.Ct. at 2707 (quoting Util. Air Regulatory Grp. v. EPA, — U.S. -, 134 S.Ct. 2427, 2442, 189 L.Ed.2d 372 (2014)). We also grant deference to EPA’s interpretation of its own regulations “unless that interpretation is ‘plainly erroneous or inconsistent with the regulation.’ ” Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 131 S.Ct. 871, 880, 178 L.Ed.2d 716 (2011) (quoting Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997)).

B. Petitioners’ Challenge

Here, petitioners challenge EPA’s issuance of the 2013 VGP as arbitrary and capricious, and not in accordance with law, on a number of grounds.

First, petitioners argue that the TBELs are arbitrary and capricious. Specifically, petitioners assert that EPA acted arbitrarily and capriciously and not in accordance with the law when it: (1) selected the IMO standard as the standard for the TBELs; (2) failed to consider onshore treatment, limiting consideration to shipboard treatment; (3) failed to include numeric TBELs for viruses and protists; and *570(4) exempted Lakers built before 2009 (“pre-2009 Lakers”) from the numeric TBELs of the 2013 VGP.

Second, petitioners argue that EPA acted arbitrarily and capriciously and not in accordance with the law in choosing narrative WQBELs, rather than numeric WQBELs, because, among other things, the narrative standard is too imprecise to guarantee compliance with water quality ■standards.

Finally, petitioners argue that EPA’s monitoring and reporting requirements for TBELs and WQBELs are not in accordance with the law because they were inadequate to guarantee compliance.

1. TBELs

Under the CWA, EPA must apply BAT in establishing pollution controls for ballast water discharge. BAT requires the “application of the best available technology economically achievable for such category or class, which \yül result in reasonable further progress toward the national goal of eliminating the discharge of all pollutants.” 33 U.S.C. § 1311(b)(2)(A)(em-phasis added). BAT also requires “a commitment of the maximum resources economically possible to the ultimate goal of eliminating all polluting discharges.” EPA v. Nat’l Crushed Stone Ass’n, 449 U.S. 64, 74, 101 S.Ct. 295, 66 L.Ed.2d 268 (1980).

We hold that in failing to set TBELs that reflected BAT in the 2013 VGP, EPA acted arbitrarily and capriciously in a number of respects.

a. The IMO Standard

Petitioners argue that EPA failed to apply BAT when it chose the IMO Standard for TBELs in the 2013 VGP. They allege that EPA chose the IMO Standard first, and then worked “backwards” to determine which systems could achieve that standard. NWEA Br. at 36. In doing so, they contend, EPA improperly restricted the SAB’s inquiry to whether certain technologies would meet what petitioners describe as “existing international consensus standards.” Id. According to petitioners, EPA should have first considered what “available” technology was capable of achieving, and then created standards based on that capability. As a result, petitioners contend, EPA’s standard did not achieve greater reductions in pollution discharges that were achievable with current technology.

We agree. EPA acted arbitrarily and capriciously when it chose the IMO Standard without adequately explaining why standards higher than the IMO Standard should not be used given available technology.

In choosing the IMO Standard, EPA overlooked crucial portions of the SAB Report. The SAB identified a number of technologies that can achieve standards higher than IMO for one or more organism sizes, including all five of the technologies identified as also meeting the IMO Standard.11 The SAB acknowledged that “these same five systems have the potential to meet a lOx IMO D-2/ Phase 1 standard [i.e., the IMO Standard] in the near future.” App. at 636. In describing the performance of those systems, the SAB concluded that each would require only “reasonable/feasible modifications.” Id. at 629-30,632. Indeed, according to the SAB Report, the Ecochlor, BalPure, *571and PeraClean systems can meet 100 times IMO for medium organisms, and Ecochlor can meet 10 times IMO for large organisms.

EPA should not have adhered to the IMO Standard without explanation when technologies could have exceeded IMO. Indeed, seeking to find systems that are capable of doing better than the current standard is in keeping with the technology-forcing aspect of the CWA. See NRDC, 822 F.2d at 124. EPA should have first looked at the available ballast water technologies as identified by the SAB Report. Then, finding that those technologies could exceed the IMO Standard, EPA should have adjusted its standard accordingly, or explained why it would not. See Islander E. Pipeline, 525 F.3d at 151 (holding that agency must “examine[ ] the relevant data and articulate! ] a satisfactory explanation for its action” (quoting State Farm, 463 U.S. at 43, 103 S.Ct. 2856)(alterations omitted)).

EPA’s counterargument that no more was necessary because it did not limit the SAB to considering the IMO Standard is unavailing. EPA insists that it gave the SAB a list of potential regulatory limits, and then asked the SAB to identify the systems that could reliably meet those limits. In support, EPA points to its Charge Question 1 to the SAB, which asked the SAB to identify “discharge standards that the available data [about existing systems] credibly demonstrate can be reliably achieved.” App. at 607. EPA argues that in response to this charge, the SAB Report supports the conclusion that, “[b]ased upon the data available, no current ballast water treatment technologies were considered likely to meet standards more stringent than the IMO D-2/Phase I” standards. Id. at 91.

While it is true that EPA did not strictly limit the SAB’s consideration to the IMO Standard, EPA is incorrect in suggesting that the SAB Report supports the conclusion that no system could meet standards stricter than the IMO Standard. Id.12 To the contrary, the record contradicts EPA’s assertion that treatment systems that exceed the IMO Standard are not “available.” In fact, as noted above, systems that exceed the IMO Standard are available

Accordingly, by failing to consider adequately a standard more stringent than IMO, EPA failed to set permit limits that reflect BAT. See 33 U.S.C. § 1314(b)(2); Nat’l Crushed Stone,