North Carolina has lost a key tool to block air pollution that drifts across its border -- even as it was trying to press for more aggressive air quality controls in neighboring states.

A federal court ruling this month threw out the Environmental Protection Agency's air pollution rules, leaving North Carolina to manage pollution with its own law, one of the strictest in the nation, but unable to stop a single particle of soot from wafting across the border from Tennessee, Kentucky or elsewhere.

"The problem is we're going back to the drawing board," said Michael Regan, Southeast climate and air policy manager for the N.C. Environmental Defense Fund in Raleigh. "The consequence now is, we have bad air with no federal plan in place to tell us where we're going."

The EPA standard, tossed out July 11 as "fundamentally flawed" by the U.S. Court of Appeals in Washington, D.C., would have brought 28 states in line with North Carolina's stringent rules on two leading pollutants: nitrogen oxides and sulphur oxides, which blanket the southern Appalachian mountains with haze and pose a health hazard in Western North Carolina.

Adopted in 2005, the so-called Clean Interstate Air Rule had been seen by some as this state's best protection against soot and smog drifting here from surrounding states.

But N.C. Attorney General Roy Cooper charged that the EPA's rules gave electric utilities an easy out. The federal rule set a cap-and-trade provision, giving utility companies a means to exceed pollution caps by buying credits from utilities whose emissions fall below the limits.

Cooper's office sued the EPA, contending that billions of dollars spent here to clean the air were undermined by lax standards elsewhere.

According to the state Attorney General's Office, pollution from 13 states encroaches into North Carolina. Of particular concern are emissions from 3,000 megawatts of coal-burning plants in Tennessee built in the 1950s and 1960s, all owned by the Tennessee Valley Authority and some situated less than 100 miles from Asheville.

In a separate legal action, Cooper's office is suing the TVA over windborne pollution from the giant utility's 59 coal-burning units at 11 sites.

Exacerbated by cross-border air pollution, pollution levels in a number of North Carolina counties exceed federal air quality limits, the worst being Mecklenburg.

In addition to the attorney general's challenge, the EPA was also sued by more than a dozen opponents to the agency's pollution rules, including Charlotte-based Duke Energy. The utilities raised broader concerns about the EPA's rules, with Duke challenging how the EPA set the emission limits. Duke contended the EPA should have given the utility more allowances to emit pollutants and sell credits to other polluters.

Facing a barrage of arguments, the federal appeals court threw out the EPA rules as unfair and unworkable.

Duke and Progress Energy, the state's two largest power producers, now continue to be bound by the state law. Passed in 2002, the state's landmark Clean Smokestacks Act requires a 77 percent reduction of nitrogen oxides and 74 percent reduction of sulphur oxides by 2013. The rejected EPA rules would have required 81 percent reductions over time.

Progress Energy and Duke expect to spend $3.5 billion to retrofit power plants with scrubbers and catalytic equipment to comply.

Duke spokesman Tom Williams said it wasn't the company's intent to derail the entire EPA rule. Cooper's objections were also limited to an attack on the cap-and-trade provisions, not intending for the entire rule to be scrapped.

But some say the setback presents an opportunity for a new administration to develop an even tougher air-quality standard, with fewer escape clauses.

In the interim, however, North Carolina remains a way station for errant soot and smog.

"It's a big mess because we have no rules," said John Walke, a lawyer for the National Resources Defense Council in Washington. "There's an urgent need for action here."