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UPDATE 2-U.S. court upholds cement plant emissions standards

(Adds further detail, reaction, recasts lede)

WASHINGTON, April 18 (Reuters) - In a loss for environmental groups, a U.S. appeals court on Friday upheld new air pollution emissions standards for cement plants that the industry supports.

The U.S. Court of Appeals for the District of Columbia Circuit rejected a challenge by environmental groups, including the Natural Resources Defense Council and the Sierra Club, which said the emissions standards were not stringent enough.

The court did hand the challengers a partial victory by ruling that the U.S. Environmental Protection Agency could not carve out a special legal defense for plant operators to cite if they are sued by members of the public in the event of a plant malfunction.

The regulation sets standards for various pollutants, including mercury and hydrochloric acid. Plant operators are not required to comply with the new rule until September 2015.

There are 107 cement plants in 36 states, according to the Portland Cement Association, an industry group. Various cement producers, including Lafarge North America Inc and Cemex SAB de CV participated in the case in support of the rule.

The 2013 regulation was the second time the agency had tried to craft new standards. The previous attempt was sent back to the EPA for revisions by the appeals court in 2011.

When the agency amended the rule, it angered environmental groups by weakening the curbs on toxic soot pollution.

Friday's ruling means there will now be "more toxic pollution from this especially dirty sector," said John Walke, an attorney with the Natural Resources Defense Council.

Gregory Scott, president and CEO of the portland cement industry group, said in a statement that the EPA rule struck the right balance and is "essential to preserving jobs at domestic cement facilities."

In the ruling, Judge Brett Kavanaugh wrote that the EPA had the authority to amend the soot pollution limits when it revised the regulation.

The agency was not permitted, however, to set up the new legal defense for plant operators, Kavanaugh wrote.

When a civil lawsuit is filed, the agency can intervene in cases to express its views but "under the statutory scheme, the decision whether to accept the defendant's argument is for the court in the first instance, not for EPA," he wrote.

In a separate ruling issued on Tuesday, the same court upheld hazardous air pollution regulations for coal and gas-fired power plants.

The case is Natural Resources Defense Council v. EPA, U.S. Court of Appeals for the District of Columbia Circuit, 10-1371.

(Reporting by Lawrence Hurley; Editing by Sandra Maler, Sofina Mirza-Reid and Jonathan Oatis)