Oregon facilities of all sorts that emit hazardous air pollutants (HAPs) have waited many years to learn what level of control the Environmental Protection Agency (EPA) would establish for boilers and process heaters. The wait is finally over. On February 21, 2011, EPA brought an epic regulatory battle to some kind of temporary stalemate by signing final rules for Boiler MACT, Boiler GACT (MACT for minor HAP sources), Commercial and Industrial Solid Waste Incinerators (CISWI) and defining what constitutes a solid waste when burned. These rules were published in the Federal Register on March 21, 2011. On March 16, 2011, EPA released proposed rules for electric generating unit (EGU) boilers, which are regulated separately from other boiler types. These actions created (or proposed in the case of EGUs) an extensive new regulatory structure. Clouding the certainty of these standards was EPA’s notice that the agency plans to go back to the drawing board to reconsider key aspects of these rules. Gina McCarthy, Assistant Administrator for EPA’s Office of Air and Radiation, stated that the boiler rules rule will only be half as expensive as what had been proposed last year, but trade associations are still considering the rules to be prohibitively expensive.
What is MACT v. GACT?
The Clean Air Act (CAA) defines 188 air pollutants and classes of air pollutants as HAPs. Under Section 112 of the CAA, major sources of HAPs must comply with emission limitations, work practice standards, and compliance requirements that are considered Maximum Achievable Control Technology (MACT). With a few notable exceptions, only major sources of HAPs—sources that have the potential to emit 10 or more tons per year of any one HAP or 25 tons per year of any combination of HAPs—are subject to MACT. However, sources that are below the 10/25-ton threshold (which are referred to as “area sources”) can be subject to Generally Available Control technology (GACT).
Under CAA section 129, incinerators are subject to MACT regardless of emission rate. Any incinerator subject to section 129 standards is, by law, exempt from having to comply with the boiler MACT/GACT standards. A key difference between the boiler standards under CAA section 112 and the incinerator standards under CAA section 129 is that the 129 standards apply to more pollutants than just HAPs.
EGU boilers are handled separately from non-utility unit boilers and were not presumptively subject to MACT under the CAA. The 1990 CAA Amendments required EPA to study EGUs and make a determination whether they should be subject to MACT. EPA submitted the study to Congress in 1998 and subsequently listed EGUs for MACT regulation. However, on March 29, 2005 EPA made an about face and removed coal- and oil-fired EGUs from MACT regulation, subjecting them instead to a mercury cap-andtrade program. On February 8, 2008, however, the federal courts vacated this action. EPA subsequently entered a consent decree requiring it to propose an EGU MACT rule by March 16, 2011 and finalize the rule by November 16, 2011.
For a decade EPA has been working on HAP regulations for boilers at major sources of HAPs (Boiler MACT), boilers at minor or area sources of HAPs (Boiler GACT), as well as requirements for Commercial and Industrial Solid Waste Incinerators (CISWIs). In response to a 2007 court decision throwing out EPA’s Boiler MACT rules, EPA was also charged with having to define what constitutes a solid waste, so the agency can distinguish between boilers (those combustion units that don’t combust solid waste) and incinerators (those that do). On June 4, 2010, EPA proposed rules: (1) regulating HAPs from all types of boilers (MACT and GACT), (2) regulating multiple pollutants from waste incinerators, and (3) defining what constitutes a solid waste. These rules were greeted with shock from the regulated community because they were so stringent and the solid waste rules moved all sorts of common fuels (e.g., whole tires) into being regulated as solid wastes. Many in Congress recognized the burden these regulations would place on U.S. industry and demanded that EPA reconsider their approach.
In December 2010, EPA sought more time to reconsider its approach to the boiler and solid waste rules. EPA was under a court order to issue the final boiler and solid waste rules by January 16, 2011. On December 7, 2010, EPA requested that the court grant the agency time to start the rulemaking process over again and re-propose the Boiler MACT/GACT, CISWI and solid waste definition rules in light of the extensive comments they received. EPA stated that they wanted at least until June of this year, but preferably until April 2012 to issue the rules. Sierra Club responded violently to this suggestion, essentially accusing EPA of lying to the court and asking that the court order EPA to issue the rules immediately. The court sided with Sierra Club and ordered EPA to issue the rules by February 21, 2011. EPA met its February 21 deadline to sign the rule, but the rule was not published in the Federal Register until March
21st.
EPA estimates that the Boiler MACT rule will impact 13,555 boilers and process heaters and that the Boiler GACT rule will impact 187,000 boilers and process heaters.
Boiler GACT (Boilers at Non-Major HAP Sources)
The final Boiler GACT rule was considered by many to be a significant improvement over the proposed rule. Under the proposed rules, any boiler located at an area (i.e., non-major) source, and that used solid fuel, was set to have to comply with onerous requirements. However, under the final rules the only existing area source boilers that are subject to substantive requirements are boilers burning coal (10 million Btus or greater). Existing coal-fired boilers located at area HAP sources are subject to mercury and carbon monoxide standards (CO serves as a surrogate for organic HAPs). This means that existing natural gas-fired, oil-fired or biomass-fired boilers located at facilities that are not major sources of HAPs do not have to comply with any substantive emission limits. Existing coal, oil and biomass boilers still must undergo a one-time energy assessment and biennial tune-ups. Various paperwork requirements apply to both new and existing coal, oil and biomass fired boilers with initial notices for existing units due this fall.
Boiler MACT (Boilers at Major HAP Sources)
The final Boiler MACT rule is far more complicated than the Boiler GACT rule with the requirements having gotten considerably more stringent for some boiler types, as compared to the proposed rule (which was already considered extremely stringent). Not all boilers at major HAP sources are equally affected. Boilers used as backup/emergency units (i.e., operated <10% of the year) and boilers burning natural gas, refinery gas or “equivalent fuel” (with limited exceptions for gas curtailments or emergencies) are subject only to the requirement that the operator perform annual tune-ups. Coal fired boilers are predictably hammered with requirements. Wood fired and other solid fuel-fired boilers (other than coal-fired) are subject to significant requirements as well.
As with the proposal, boilers designed to burn 10 percent or more biomass (and not coal or other solid fuels) are regulated under one of 10 biomass subcategories (5 for new units, 5 for existing units). A material change for some smaller sources is that units with a heat input of less than 10 MMBtu/hr are not within the subcategory. Existing biomass boilers of all sorts are subject to a 0.039 lb/MMBtu particulate matter (PM) limit, a 0.035 lb/MMBtu hydrogen chloride (HCl) limit and a 0.0000046 lb/MMBtu mercury limit. Carbon monoxide limits vary from 430 ppm to 3,500 ppm (corrected to 3% O2) depending on boiler type. Dioxin/furan limits for existing biomass boilers similarly vary by boiler type. New biomass boilers are subject to limits for the same pollutants, but the limits are more stringent. New biomass boilers of all sorts are subject to a 0.0011 lb/MMBtu PM limit, a 0.00022 lb/MMBtu HCl limit and a 0.0000035 lb/ MMBtu mercury limit. Carbon monoxide limits vary from 160 ppm to 1,500 ppm (3% O2) depending on boiler type. Dioxin/furan limits for new biomass boilers also vary by boiler type. Although these limits are based on heat input, EPA also included a voluntary alternative to these limits whereby a source can demonstrate compliance with output-based limits (i.e., lb/MMBtu of steam output). The final rule also
provides an emissions-averaging alternative, which allows existing units at a single facility to achieve compliance with PM, HCL and mercury limits by averaging emission rates. EPA’s Gina McCarthy stated at the time the rules were signed that EPA anticipates that existing biomass boilers can comply with all requirements using only PM controls and good combustion practices. Many within the biomass industry have questioned whether this is accurate.
The requirements for different boiler types are numerous and complex. Boilers burning less than 10 percent liquid fuel may avoid regulation as liquid fuel firing units. New and existing liquid fired boilers that do not meet this de minimis threshold are subject to regulation for the same five pollutants as identified for biomass boilers. New and existing small boilers (<10 MMBtu/hr) at major and area sources are placed into their own subcategory that requires operators to perform tune-ups every other year, but no more. Various paperwork requirements apply to both new and existing coal, oil and biomass fired boilers with initial notices for existing units due this fall.
CISWI Rule
The final CISWI rule imposes serious limitations on the ability of many industries to be able to use certain useful fuel materials based on the idea that they are now considered solid wastes. Any device combusting solid waste (with certain limited exceptions such as space heaters) will be regulated as CISWI units (i.e., solid waste incinerators). Under these rules, nine pollutants or pollutant groups are regulated for new and existing sources. CISWI units wrapped-in under the new rule are addressed through four subcategories. The CISWI rules are somewhat more reasonable than what was proposed, but they are still so restrictive that few facilities will be able to justify the capital investment required to comply with these requirements. Therefore, upon the CISWI rules becoming effective (2016 at the latest), the vast majority of facilities will likely stop burning anything defined as a solid waste under the rules. This will have serious ramifications for solid waste management, as many valued fuels will now be disposed of in landfills.
Definition of Solid Waste Rule
EPA considers anything that is “discarded” to be solid waste. In the final Identification of Non- Hazardous Secondary Materials (more intuitively referred to as the Definition of Solid Waste rule), EPA attempted to define what materials are solid wastes when combusted and whether they are legitimately being used as a fuel or ingredient. Several of the key aspects of the rule, including clear winners and losers, are summarized below.
The rule attempts to draw a bright line between “traditional fuels” and solid wastes. The rule defines traditional fuels to include: (1) fossil fuels (e.g., coal, oil and natural gas) and their derivatives (e.g., petroleum coke, bituminous coke, coal tar oil, refinery gas, synthetic fuel, heavy recycle, asphalts, blast furnace gas, recovered gaseous butane, and coke oven gas), (2) cellulosic biomass (virgin wood), (3) alternative fuels developed from virgin materials that can now be used as fuel products (including used oil which meets the specifications outlined in 40 CFR 279.11), and (4) clean cellulosic biomass. EPA stated that these fuels are not secondary materials or solid wastes unless discarded before they are used.
EPA continued an approach in the final rule that was problematic in the proposed rule. EPA has codified that whether certain fuels are solid wastes depends on whether they are combusted at the facility where they are generated or a facility under the control of the generator. One example given was that old corrugated cardboard rejects (a normal fuel source at many paper mills) would not be considered waste if used at the mill that generates them. However, selling the material to another mill down the street for it to burn would be considered discarding the rejects, thus making them into a solid waste.
EPA’s regulation of tires improved from what had been proposed. In its proposal EPA declared that whole tires would be solid waste while chipped tires might not be. This was a policy that made little sense from a waste -or air-quality point of view and it has changed, somewhat, in the final rule. The final rule, instead, states that tires collected and managed under the oversight of established tire-collection programs are not solid waste. This provides some relief for industries, such as cement manufacturing, that use a lot of tires. However, it places restrictions on the beneficial use of tires that are unlikely to result in material air quality benefits while increasing the number of tires that need to be disposed of in landfills. For those
more rural areas, tires may now have to be routed to landfills, as the potential of having them considered as solid waste will prevent facilities from continuing to use them as fuel.
Resinated wood is an apparent winner under the final rule. EPA had questioned in the proposal whether resinated wood (e.g., plywood offcuts) constituted a solid waste. In the final rule EPA states that so long as the resinated wood meets certain “legitimacy criteria,” it is not a solid waste regardless of where it is combusted (i.e., by the generator or someone else).
An apparent loser under the final rule is treated wood. While it is no great surprise that wood treated with pentachlorophenol is considered a solid waste, there was a lot of support for not considering creosote treated wood as solid waste. Creosote treated wood (e.g., railroad ties) are a valuable, high Btu fuel source made from coal tar and wood. However, EPA concluded that they are now a solid waste and so it is likely that this fuel will be largely relegated to landfills. Interestingly, borate treated wood may qualify as a legitimate fuel depending on the circumstances.
Construction and demolition (C&D) wood is a winner under the final rule. EPA has taken the position that C&D wood is a legitimate fuel, and not a waste, so long as it has been cleaned or otherwise processed such that it meets the legitimacy criteria. Thus some restrictions are placed on the use of the material, but it is not universally relegated to the waste bin.
Non-hazardous secondary materials used as ingredients in a process are not solid waste so long as they meet the legitimacy criteria. As with resinated wood, it does not matter whether the materials are used by the generator or by some other facility. Even if the materials have actually been discarded, they would still not be considered solid waste if “processed.” EPA defined “processing” as an activity that transforms the discarded non-hazardous secondary material into a legitimate fuel or ingredient product. EPA gave the examples of operations that remove or destroy contaminants, operations that significantly improve the fuel characteristics of the material (e.g., sizing or drying the material in combination with other operations), operations that chemically improve the as-fired energy content and operations that improve the ingredient characteristics. However, EPA also cautioned that operations that result only in modifying the size of the material by shredding do not constitute processing. EPA also stated that prior to any processing, discarded non-hazardous secondary materials would be considered a solid waste and would be subject to the appropriate federal, state and local laws and regulations.
As is easily recognized, key components of the rules are the legitimacy criteria and how they will be applied. Although not clear from the rule, EPA has stated repeatedly that having a material, such as C&D wood, designated as a fuel is not a self-implementing process. Instead, sources must apply to EPA for formal determinations. These determinations must then be published in the Federal Register for public comment. This promises a cumbersome and time-consuming process. Anticipate a lot of additional discussion on these gatekeeper criteria.
EGU MACT
The EGU MACT proposal addresses emissions of mercury and a variety of other HAPs from EGUs. Emission limits have been proposed for mercury, PM, and hydrogen chloride (HCl) for existing coalfired EGUs. PM is regulated as a surrogate for HAP metals. However, sources would be allowed to opt to monitor either total nonmercury metals or certain individual nonmercury metals as an alternative to demonstrating compliance based on PM emissions. HCl is regulated as a surrogate for toxic acid gases. Under the proposal, coal-fired boilers using wet or dry flue gas desulfurization may choose to monitor sulfur dioxide (SO2) as a surrogate for HCl. EPA estimates that this rule will impact approximately 1,200 existing coal-fired boilers and 150 oil-fired units. Look for a final rule late this year.
Impacts to Oregon
The new MACT/GACT and CISWI standards will certainly be felt in Oregon. Dozens of Oregon facilities are potentially subject to these rules due to their operation of boilers. Oregon’s current and prior governors have recognized the tremendous importance of alternative fuels, particularly biomass, to our state’s economy and greenhouse gas reduction goals. However, these goals are not reflected in the federal rules and the new standards may pose a significant impediment to the development of new carbon-neutral or low carbon combustion facilities. It is expected that the Oregon Department of Environmental Quality will adopt the boiler MACT and GACT rules into the state regulatory program. The CISWI rules are addressed differently with the state having to develop and submit for EPA approval a program consistent with the federal guidelines for existing sources.
What’s Next?
EPA’s final rules for boilers and CISWIs are far from the end of this process. EPA simultaneously signed a rule stating that they intend to reconsider these rules to achieve the additional review time that the court denied in January. EPA has not identified all of the specific aspects of the rules that they will open to reconsideration; that will come in a future rulemaking notice. However, they did indicate an intent to reconsider, among other things, the following: (a) the subcategories established under Boiler MACT, (b) the possibility of allowing gas-fired boilers at major HAP sources to utilize additional fuels without losing their special gas-fired regulatory status, (c) establishment of work practice standards for limited use major
source boilers, (d) the establishment of GACT standards for biomass and oil-fired boilers at area sources, (e) revisions to the CO standards for major source boilers and CISWI units and (f) the applicability of Title V permitting requirements to area source boilers.
The reconsideration notice is good news to the extent that EPA is generally expected to make the rules more reasonable based on additional data. However, the absence of certainty is a mixed bag for many sources. As a result, various trade associations filed a petition with EPA during the last week of April seeking to stay the boiler rules until greater certainty exists as to what is required. Absent a stay, sources facing potential capital investments in order to achieve compliance are in a difficult position in light of the uncertainty of the rules.
Weighing in at several hundred pages, the Boiler MACT, Boiler GACT, Non-Hazardous Secondary Material, CISWI and EGU standards are detailed and complex. The material presented above is a summary of key elements of the rules but in no way attempts to convey all their requirements and subtleties. Although the ultimate impacts to sources and the benefits to the environment will need to be assessed over time, it is clear that agency and industry staff will spend considerable time deciphering these requirements. Look for lots of litigation and continued confusion on these rules for years to come.
by Tom Wood, Stoel Rives LLP (Portland)
Issue #466 / May 2011
For Additional Information:
Tom Wood, Stoel Rives, LLP, 503/ 294-9396. Tom is a partner at Stoel Rives LLP who helps industrial clients obtain permits and comply with the myriad requirements of the Clean Air Act and other environmental statutes. The various rules discussed here can be found at: http://www.epa.gov/ttn/atw/boiler/boilerpg.html.Tom Wood is a partner of the firm practicing in the area of environmental law. He has significant experience in the areas of air quality and hazardous waste permitting and compliance. Tom has counseled some of the leading industries in the United States on environmental permitting issues, commercial transactions and the interrelationships between the two. Tom also has extensive background in defending criminal and civil environmental enforcement actions including citizen suits and civil nuisance actions. Permitting and compliance projects have included work in the power generation, biofuels, primary metals, semiconductor, motor vehicle manufacturing, wood products, chemicals and oil and gas industries. These projects involved a wide variety of issues including new source review, Title V permitting, Title IV (acid rain) compliance, visibility requirements, air toxics and hazardous air pollutant regulations and RCRA air emission standards. Tom is the author of numerous articles on environmental issues and is a frequent lecturer on these topics.
Environmental Protection Agency (EPA) The Clean Air Act (CAA) Maximum Achievable Control Technology (MACT)
