US Environmental Protection Agency Settles With Tesla
US Environmental Protection Agency Settles With Tesla
)
In the Matter of: ) Docket No. CAA-09-2022-0024
)
Tesla, Inc. )
) CONSENT AGREEMENT AND FINAL
) ORDER PURSUANT TO
) 40 C.F.R. §§ 22.13 AND 22.18
Respondent. )
)
I. CONSENT AGREEMENT
The United States Environmental Protection Agency, Region IX (“EPA”), and Tesla, Inc.
(“Respondent”) agree to settle this matter and consent to the entry of this Consent Agreement
and Final Order (“CAFO”), which simultaneously commences and concludes this matter in
1. This is a civil administrative action instituted pursuant to Section 113(a)(3)(A) and (d) of
the Clean Air Act (“CAA” or the “Act”), 42 U.S.C. § 7413(a)(3)(A) and (d), for the
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2. Complainant is the Director of the Enforcement and Compliance Assurance Division,
EPA Region IX, who has been duly delegated the authority to bring this action and to
4. Section 112 of CAA, 42 U.S.C. § 7412, creates a comprehensive regulatory program for
listing 189 HAPs and directing EPA to list all categories of major and area sources of
HAPs and establish emission standards for such source categories that reflect maximum
achievable control technology under the National Emissions Standards for Hazardous Air
Pollutants (“NESHAPS”).
5. EPA promulgated NESHAPS for surface coating of automobiles and light-duty trucks at
40 C.F.R. Part 63, Subpart IIII (40 C.F.R. §§ 63.3080 to 63.3176) (“the Subpart IIII
Standards”) in 2004 to implement section 112(d) of the Act by requiring automobile and
light-duty truck surface coating operations located at major sources of HAPs to meet
technology.
6. The Subpart IIII Standards apply to “each new, reconstructed, or existing affected
topcoat to new automobile or new light-duty truck bodies or body parts for new
automobiles or new light-duty trucks, and that is a major source of HAP emissions.
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7. Under 40 C.F.R. § 63.3083, compliance with the Subpart IIII Standards was required by
June 25, 2004 for new or reconstructed affected sources that started operations before that
date; on the date of initial startup for new or reconstructed affected sources that started
operations after June 25, 2004; and on April 26, 2007 for existing affected sources.
8. Under 40 C.F.R. § 63.3082, the term “new, reconstructed, or existing affected source” is
defined to include all coating operations; all storage containers and mixing vessels in
which coatings, thinners, and cleaning materials are stored or mixed; all equipment and
9. Under 40 C.F.R. § 63.3081(b), a major source of HAP emissions is any stationary source
or group of stationary sources located within a contiguous area and under common
control that emits or has the potential to emit any single HAP at a rate of 10 tons or more
per year or any combination of HAPs at a rate of 25 tons or more per year.
10. Under 40 C.F.R. § 63.3091, existing affected sources must limit combined organic HAP
emissions to the atmosphere from various coating operations to no more than 0.60
pound/gallon of coating solids deposited during each month, determined according to the
11. Under 40 C.F.R. § 63.3094, all affected sources must develop and implement a work
practice plan to minimize organic HAP emissions from the storage, mixing, and
conveying of coatings, thinners, and cleaning materials used in, and waste materials
generated by, all coating operations subject to emissions limits set forth at 40 C.F.R.
12. Under 40 C.F.R. § 63.3130(c), all affected sources must verify compliance with limits on
organic HAP emissions by collecting and keeping records of: (1) the volume used in each
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month, the mass fraction organic HAP content, the density, and the volume fraction of
solids of each coating used for various coating operations; (2) the volume used in each
month, the mass fraction organic HAP content, and the density of each thinner used in
various coating operations; (3) a record of the calculation of the organic HAP emission
rate for various coating operations, including all raw data, algorithms, and intermediate
calculations.
13. Under 40 C.F.R. § 63.3130(n), all affected sources must collect and keep the work
14. Under 40 C.F.R. § 63.3131(b), all affected sources subject to recordkeeping requirements
of 40 C.F.R. § 63.3130 must keep each record for five years following the date of its
generation.
15. Under 40 C.F.R. § 63.3163(a), all affected sources must demonstrate continuous
compliance with the applicable emission limit in 40 C.F.R. § 63.3091 by calculating the
organic HAP emission rate on a monthly basis according to the procedures set forth in 40
C.F.R. § 63.3161.
16. Under 40 C.F.R. § 63.3161(d), all affected sources must demonstrate initial compliance
with the applicable emission limit in 40 C.F.R. § 63.3091 by complying with the
17. Under 40 C.F.R. § 63.3161(h), all affected sources must demonstrate initial compliance
with the applicable emission limit in 40 C.F.R. § 63.3091 by calculating the total mass of
organic HAP emissions before consideration of add-on controls from all coatings and
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thinners used during each month in the combined electrodeposition primer, primer-
surfacer, topcoat, final repair, glass bonding primer, and glass bonding adhesive
18. Sections 111(a)(3) and 112(a)(3) of the CAA, 42 U.S.C. §§ 7411(a)(3) and 7412(a)(3),
define “stationary source” as “any building, structure, facility, or installation which emits
19. Section 302(g) of the CAA, 42 U.S.C. § 7602(g), defines “air pollutant” as “any air
biological, radioactive (including source material, special nuclear material, and byproduct
material) substance or matter which is emitted into or otherwise enters the ambient air.”
20. Section 302(e) of the CAA, 42 U.S.C. § 7602(e), defines “person” as “an individual,
and any agency, department, or instrumentality of the United States and any officer, agent
or employee thereof.”
21. EPA and the United States Department of Justice jointly determined that this matter,
although it involves alleged violations that occurred more than one year before the
C. GENERAL ALLEGATIONS
22. At all times relevant to this CAFO, Respondent was a corporation and therefore a
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23. At all times relevant to this CAFO, Respondent owned and operated an automobile
“Facility”).
24. The Facility is a “major source” of HAP emissions within the meaning of the Act.
25. The Facility contains one or more “new, reconstructed, or existing affected sources”
within the meaning of 40 C.F.R. § 63.3082 and the Subpart IIII Standards.
27. On September 6, 2019, EPA, Region 9, issued an information request (the “First
Information Request”) to Tesla pursuant to Section 114 of the Act, 42 U.S.C. § 7414.
The primary purpose of the First Information Request was to determine Tesla’s
compliance with CAA new source performance standards and Subpart IIII Standards.
28. On October 28 and December 11, 2019 and February 14 and March 6, 2020, Tesla
submitted its response (the “First Response”) to the First Information Request to EPA,
Region 9. Tesla also submitted a supplemental response to the First Information Request
on March 5, 2021.
29. On December 11, 2020, EPA, Region 9, issued a second information request (the
“Second Information Request”) to Tesla pursuant to Section 114 of the Act, 42 U.S.C.
§ 7414. The primary purpose of the Second Information Request was to obtain additional
30. On January 29, February 16, and March 1, 2021, Tesla submitted its response (the
the First Response and Second Response will be referred to collectively as the
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“Responses”. Tesla also submitted a response to EPA’s follow-up questions on April 5,
2021.
31. On April 23, 2021, EPA issued a Finding and Notice of Violation (“NOV”), Docket No.
32. On June 9, 2021, Tesla submitted its initial response to the NOV.
33. On June 11, 2021, and June 24, 2021, representatives of EPA and Tesla met to discuss
34. On July 18, 2021, Tesla submitted follow-up responses to technical issues discussed with
35. On September 28, 2021, EPA informed Tesla that it would pursue enforcement of the
36. On October 1, 2021, the parties executed a tolling agreement in which the parties agreed
to toll claims for alleged violations of 40 C.F.R. §§ 63.3094, 63.3130, and 63.3163 at the
Facility.
Count 1
37. Paragraphs 1 through 36 above are incorporated herein by reference as if they were set
38. In or about October 2016 through September 2019, Respondent failed to develop and/or
implement a work practice plan to minimize organic HAP emissions from the storage,
mixing, and conveying of coatings, thinners, and cleaning materials used in, and waste
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materials generated by, all coating operations subject to emission limits of the Subpart
39. Respondent’s failure to develop and/or implement a work practice plan to minimize
organic HAP emissions from all coating operations subject to emission limits of the
Subpart IIII Standards at the Facility in or about October 2016 through September 2019
Count 2
40. Paragraphs 1 through 39 above are incorporated herein by reference as if they were set
41. In or about October 2016 through September 2019, Respondent failed to perform
calculations of the total mass of organic HAP emissions before consideration of add-on
controls from all coatings and thinners used during each month in coating operations at
the Facility.
42. Respondent’s failure to perform calculations of the total mass of organic HAP emissions
before consideration of add-on controls from all coatings and thinners used during each
month in coating operations at the Facility in or about October 2016 through September
2019 constitute violations of 40 C.F.R. §§ 63.3161(h) and 63.3163(a) and the Subpart IIII
Standards.
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Count 3
43. Paragraphs 1 through 42 above are incorporated herein by reference as if they were set
44. In or about October 2016 through September 2019, Respondent failed to collect and
keep: (1) records of the calculation of the organic HAP emission rate for various coating
operations, including all raw data, algorithms, and intermediate calculations; and (2)
records demonstrating implementation of the work practice plan required under 40 C.F.R.
45. Respondent’s failure to collect and keep: (1) records of the calculation of the organic
HAP emission rate for various coating operations, including all raw data, algorithms, and
46. Respondent agrees to the assessment of a civil penalty of TWO HUNDRED SEVENTY-
FIVE THOUSAND DOLLARS ($275,000) for the claims set forth herein as final
settlement of the civil claims against Respondent as alleged in Section I.D of the CAFO.
47. Respondent shall pay the assessed penalty according to the terms of this CAFO within
thirty (30) days of the Effective Date of the CAFO. Payment shall be made by cashier’s
or certified check payable to the “Treasurer, United States of America,” or be paid by one
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a. Regular or Certified Mail:
b. Wire Transfers:
Wire transfers must be sent directly to the Federal Reserve Bank in New York
c. Overnight Mail:
e. Online Payment:
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This payment option can be accessed from the information below:
www.pay.gov
Enter "sfo1.1" in the search field
Open form and complete required fields
please contact the EPA Cincinnati Finance Center at 513-487-2091. The payment shall
be accompanied by a transmittal letter identifying the case name, the case docket number,
and this CAFO. Concurrent with delivery of the payment of the penalty, Respondent
shall send by e-mail a copy of the check or notification that the payment has been made
by one of the other methods listed above, including proof of the date payment was made,
Scott Connolly
Enforcement and Compliance Assurance Division (ENF-4-1)
U.S. Environmental Protection Agency, Region IX
75 Hawthorne Street
San Francisco, CA 94105
[email protected]
48. Payment of the above civil administrative penalty shall not be used by Respondent or any
other person as a tax deduction from Respondent’s federal, state, or local taxes.
49. In the event Respondent fails to pay the assessed penalty to EPA by the time required in
Paragraph 47 of this CAFO, Respondent shall pay stipulated penalties as follows: FIVE
HUNDRED DOLLARS ($500) per day for the first to fifteenth day of delay, ONE
THOUSAND DOLLARS ($1,000) per day for the sixteenth to thirtieth day of delay, and
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FIVE THOUSAND DOLLARS ($5,000) per day for each day of delay thereafter.
Compliance by Respondent shall include completion of any activity under this CAFO in
a manner acceptable to EPA and within the specified time schedules in and approved
50. Stipulated penalties shall begin to accrue on the day after performance is due and shall
continue to accrue through the final day until performance is complete. Respondent shall
pay stipulated penalties within fifteen (15) days of receipt of a written demand by
accordance with the procedure set forth for payment of penalties in Section I.E of this
CAFO.
51. If a stipulated penalty is not paid in full, interest shall begin to accrue on the unpaid
balance at the end of the fifteen-day period at the current rate published by the United
States Treasury, as described at 40 C.F.R. § 13.11. Complainant reserves the right to take
any additional action, including but not limited to, the imposition of civil penalties, to
enforce compliance with this CAFO or with the CAA and the implementing regulations.
52. Notwithstanding any other provision of this Section, EPA may, in its unreviewable
discretion, waive any portion of stipulated penalties that have accrued pursuant to this
CAFO.
53. In accordance with 40 C.F.R. § 22.18(b)(2) and for the purpose of this proceeding,
Respondent: (i) admits that EPA has jurisdiction over the subject matter of this CAFO
and over Respondent; (ii) neither admits nor denies the specific factual allegations
contained in the CAFO; (iii) consents to any and all conditions specified in this CAFO
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and to the assessment of the civil administrative penalty under Section I.E of this CAFO;
(iv) waives, for the purpose of this proceeding in Docket No. CAA-09-2022-0024, any
right to contest the allegations contained in Section I.D of the CAFO; and (v) waives the
G. CERTIFICATION OF COMPLIANCE
54. In executing this CAFO, Respondent certifies that, based on information and belief,
the Subpart IIII Standards that may apply to its ongoing operations.
H. RETENTION OF RIGHTS
55. In accordance with 40 C.F.R. § 22.18(c), Respondent’s full compliance with this Consent
Agreement shall only resolve Respondent's liability for federal civil penalties. Nothing in
this CAFO is intended to or shall be construed to resolve (i) any civil liability for
violations of any provision of any federal, state, or local law, statute, regulation, rule,
ordinance, or permit not specifically alleged in Section I.D of the CAFO; or (ii) any
criminal liability. EPA specifically reserves any and all authorities, rights, and remedies
available to it (including, but not limited to, injunctive or other equitable relief or
criminal sanctions) to address any violation of this CAFO or any violation not
56. This CAFO does not exempt, relieve, modify, or affect in any way Respondent’s duty to
comply with all applicable federal, state, and local laws, regulations, rules, ordinances,
and permits.
I. MISCELLANEOUS
57. This CAFO may be amended or modified only by written agreement executed by both
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58. The headings in this CAFO are for convenience of reference only and shall not affect
59. Each party to this action shall bear its own costs and attorneys’ fees.
J. EFFECTIVE DATE
61. In accordance with 40 C.F.R. §§ 22.18(b)(3) and 22.31(b), this CAFO shall be effective
on the date that the final order contained in this CAFO, having been approved and issued
by either the Regional Judicial Officer or Regional Administrator, is filed with the
K. BINDING EFFECT
Respondent each certifies that he or she is fully authorized to enter into the terms and
conditions of this CAFO and to bind the party he or she represents to this CAFO.
63. The provisions of this CAFO shall apply to and be binding upon Respondent and its
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FOR RESPONDENT, TESLA, INC.
_________________
02.02.2022 ______________________________________
___
_ _________ _____
___________
__ ________
_ _____
DATE NAME:E: _______________________________
Laurie
La
L aurie Shelbyy
TITLE: Vice
_______________________________
President of Environmental, Health and Safety
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II. FINAL ORDER
Complainant and Respondent, Tesla, Inc., having entered into the foregoing Consent
Agreement,
entered, and that Respondent shall pay a civil administrative penalty in the amount of TWO
HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($275,000), and comply with the terms
________________
JAWGIEL Date: 2022.02.16 15:30:08
-08'00'
________________________________
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CERTIFICATE OF SERVICE
I certify that the fully executed Consent Agreement and Final Order, (Docket No CAA-
09-2022-0024) was filed with the Regional Hearing Clerk, U.S. EPA, Region IX, and that a true
and correct copy of the same was sent to the following parties:
Via E-Mail
Laurie Shelby
Vice President of Environmental, Health and Safety
Tesla, Inc.
13101 Tesla Road
Austin, TX 78725
[email protected]
Yesenia Villaseñor
Associate General Counsel
Environmental Health & Safety
[email protected]
Via E-Mail
David Kim
Assistant Regional Counsel
U.S. EPA, Region IX
75 Hawthorne Street
San Francisco, CA 94105
[email protected]
Digitally signed by
PONLY TU PONLY TU
Date: 2022.02.17
10:45:01 -08'00' ___________________________
_______________________________
Ponly Tu
Regional Hearing Clerk Date
U.S. EPA, Region IX