Federal regulators have settled a lawsuit with environmental activists and nine states over standards for mercury emissions from cement plants, the plaintiffs announced Friday.

Earthjustice, an environmental law firm based in Washington, sued the Environmental Protection Agency in 2007 on behalf of activist groups. The firm said existing federal regulations that exempted older cement kilns failed to impose adequate mercury pollution controls.

Nine states, including New York and Michigan, also joined the suit, contending the agency had not based its standards on the latest pollution control technology.

About 150 kilns around the nation generate nearly 23,000 pounds of airborne mercury a year, according to Earthjustice. Mercury, a toxic metal that can damage the brain and nervous system, is generated from the raw materials and some fuels used in cement-making.

The agency had issued mercury regulations for cement plants three years ago, but they applied only to kilns built after Dec. 2, 2005. Most operating kilns, however, were built earlier and were exempt.

Under the settlement, the agency will propose a mercury rule for all plants by March 31 and make a final decision within a year.

"EPA is carefully considering what an appropriate standard should be for mercury emissions from cement kilns," spokeswoman Cathy Milbourn said.