Denka says US rubber plant to remain open as legal battle continues

Tokyo – Denka Inc. expects to continue operations at its chloroprene rubber manufacturing plant in Laplace, Louisiana as a grace period for new standards set by the Environmental Protection Agency (EPA) comes to an end.

The plant, run by Denka Performance Elastomer (DPE), had faced potential permanent closure after the EPA imposed strict new emissions rules in April, with a 90-day grace period ending on 15 Oct.

In a statement 2 Oct, Denka said a 31 July ruling by the the US 5th Circuit Court of Appeals (ERJ report) and in the absence of a petition for rehearing from EPA, meant that the grace period will be extended.

The new EPA standards were introduced by the agency on 17 April: imposing controls on the production of over 200 chemicals in the US, including chloroprene rubber.

In response, DPE argued that the EPA's short compliance period would lead to “irreparable harm” and ‘force it to shut down the facility in October and likely never reopen.’

The company initially appealed for an extension of the grace period which was rejected by the US court of appeals for the district of Columbia circuit in late June.

That ruling prompted the Louisiana state to intervene and to grant the two-year extension under its “own authority, as granted under the clean air act.”

DPE, then, filed a petition for confirmation of the legal validity of Louisiana state’s decision (petition for review) in the 5th Circuit in July.

The company also filed an emergency motion for stay pending review to enjoin the EPA from applying the new regulations.

At the end of July, the Fifth Circuit issued a decision granting the motion for stay, while petition to review still remains under study.

In its latest statement Denka said that EPA did not subsequently file a petition for rehearing of the decision and the deadline for petitioning for rehearing had now passed.

“We notify here that the grace period originally set by the EPA until 15 Oct will be extended until the court rules on the petition for review,” it added.

DPE further noted that other legal measures, including a petition to DC Court of Appeals seeking a review of the content of the new regulations, are currently under way.

"We expect that the proceedings in each court will continue in the future, but the outlook is unclear," DPE said.

At this time, DPE said it continued to "closely examine the impact of the new regulations on our consolidated financial results.”