A federal appeals court sided with U.S. Sugar Corp. and trade groups by rejecting an EPA rule that would have required costly retrofitting of a newly built boiler under stricter emissions standards.

A federal appeals court Tuesday sided with United States Sugar Corp. and trade groups in a dispute about an Environmental Protection Agency rule involving emissions from industrial boilers.

The decision by a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia centered on a 2022 EPA rule and emission standards under the Clean Air Act. The ruling said U.S. Sugar began building a $65 million boiler in 2016 in Clewiston to replace three higher-polluting boilers. Such boilers burn bagasse, which is pulp that remains after juice is extracted from sugarcane. The appeals court said the new boiler was finished in 2019 and complied with emission standards.

In the 2022 rule, the EPA classified some boilers as “new” sources of pollutants though they were built before revised standards were proposed in 2020, the ruling said. Standards for new sources are stricter than previous standards — which would effectively force U.S. Sugar to spend “tens of millions of dollars” to retrofit the boiler that was finished in 2019, according to the ruling. The court rejected the EPA’s interpretation.

“The structure of the Clean Air Act makes clear that boilers constructed before each individual standard was first proposed are ‘existing,’ and boilers constructed after each individual standard was first proposed are ‘new,’” said the ruling by Judges Robert Wilkins, Gregory Katsas and Justin Walker. “We therefore set aside EPA’s 2022 rule to the extent that it defines sources constructed or reconstructed before August 24, 2020—that is, the date the 2022 rule was proposed by EPA —as new sources.”

The trade groups in the case are the American Forest & Paper Association, the American Wood Council, and the Council of Industrial Boiler Owners.