On February 23, 2011, the Environmental Protection Agency (“EPA”) released a package of rules to impose new emissions standards for industrial boilers and incinerators known as Maximum Achievable Control Technology (“MACT”).  The rules included emissions standards for five hazardous air pollutants or surrogates of hazardous air pollutants emitted from boilers at “major” and “area” sources and incinerators of solid waste or sewage sludge.   In addition to the emissions standards themselves, EPA’s rule package included a redefinition of the term “solid waste” under the Resource Conservation and Recovery Act (“RCRA”).

In December 2010, EPA requested an extension from a court-ordered deadline that originally required EPA to finalize the package of rules last year, but the court only allowed EPA until February 21, 2011 to issue the final rules.  After its request for an extension was denied, EPA conceded that the final rules would look quite different from the rules it proposed last year, and that additional procedures would be initiated to allow for additional comment on those differences.

Changes to the Proposal

Like the initial 2010 proposed rules, the final rules require coal, oil, and biomass boilers to comply with specific emission standards for particulate matter, carbon monoxide, hydrogen chloride, mercury, and dioxins/furans, while sources covered under the incinerator rule are held to stringent emission limits for nine different pollutants.  However, the final rules differ in several significant ways from the original proposal.

In a telephone conference to announce the final rules, Gina McCarthy, Assistant Administrator for the Office of Air and Radiation, began by focusing on the costs and benefits of the new emission standards – asserting that, although the new rules would cost only half as much as the original proposal as a result of the changes EPA has made, the final rule would achieve nearly the same health benefits. She also stated that the final rules would result in a net creation of 2,200 jobs.  The primary changes to the original proposal noted by the Assistant Administrator included (1) establishing a new category of small boilers (< 10 mmBtu/hr heat input) that would only need annual tune-ups to comply, (2) imposing only work practice standards on limited use and emergency boilers (less than 10 percent capacity factor), and (3) combining large coal and biomass boilers into one “solid fuel” category subject to the same emission standards for three of the five pollutants covered by the rule.  With regard to the last item, Ms. McCarthy indicated that EPA’s intent was to allow greater flexibility for biomass sources by allowing them to avoid the need to install scrubbers and focus more on the pollutants they emit in greater quantities, such as particulate matter, which can be addressed through fabric filters or baghouses. 

In addition to the differences noted by Ms. McCarthy, the new rule also includes a variety of other changes from the 2010 proposal.  Some of the changes are welcome news to industry, such as less stringent mercury and dioxin/furan limits for most sources, the elimination of the need to install continuous emission monitors for carbon monoxide, and new startup and shutdown requirements that allow work practice standards to take the place of the numeric emission limits.  Others changes, however, will not be good news for most facilities, such as more stringent particulate matter and hydrogen chloride emission limits for new biomass boilers, more stringent carbon monoxide limits for existing biomass stoker boilers, more prescriptive requirements for conducting an energy assessment to identify possible energy efficiency improvements, and a new procedure for claiming an affirmative defense for emission exceedances during a malfunction.  The full impact of these changes on new and existing boilers remains to be seen.  In a new twist to the rules, EPA has also finalized never-before-seen “output based” alternative emission standards, which would allow sources to determine compliance by comparing the level of pollutants emitted to energy output, rather than to fuel input, which in effect incorporates an efficiency component into the emissions standard.

New “Solid Waste” Definition

Once Ms. McCarthy concluded her opening remarks on the Clean Air Act rules, Mathy Stanislaus, Assistant Administrator for the Office of Solid Waste and Emergency Response, made a few remarks with regard to the redefinition of the term “solid waste” under RCRA.  According to Mr. Stanislaus, the purpose of the redefinition rule is to more clearly divide those sources that would be treated as a “boiler” under Section 112 of the Clean Air Act and those that would be treated as an “incinerator” under Section 129 of the Act, since the Act defers to the RCRA definition of “solid waste” to make that distinction.  The new rule states that most “secondary materials” (i.e., those that are not the primary product of an industrial process) are solid waste when burned in combustion units, but the rule provides new exceptions from that determination. 

Specifically, the new definition is designed to allow for, and even encourage, the beneficial use of “secondary materials” as a product, fuel, or ingredient in another industrial process in certain situations.  The rules exclude from the definition of “solid waste” (i) secondary materials that remain within the control of the generator, (ii) scrap tires managed by an appropriate program, (iii) resinated wood used as fuel, (iv) materials used as “ingredients,” (v) discarded secondary materials that are “processed” to produce fuels or ingredients, and (vi) materials that have received a case-specific “non-waste determination” from EPA.  The new rule also excludes “traditional” fuels from the definition of “solid waste,” including fossil fuels, their derivatives, and clean cellulosic biomass.  The intent of the new rule is to ensure that biomass boilers, and boilers that utilize “secondary materials,” need only comply with the boiler requirements described above, instead of the more stringent incinerator standards.

Notice of Reconsideration

As promised in a press release following the denial of its request for more time, EPA has already issued a “notice of reconsideration” for the rules.  That notice contains a comprehensive list of the differences between the 2010 proposal and the final rule and requests comment from the public on those changes.  On the telephone conference announcing the final rules, Ms. McCarthy indicated that the reconsideration will not necessarily result in additional substantive changes to the rules because EPA believes the final rules to be “realistic, achievable and reasonable” as finalized.  Instead, Ms. McCarthy indicated that the reconsideration is intended largely to correct any possible “procedural defects” associated with the significant differences between the proposal and the final rule by allowing another opportunity for public comment.  Even so, the notice of reconsideration states that EPA will request comment on “any provisions we propose to modify after more fully evaluating the data and comments already received.”  Ms. McCarthy also stated that EPA expected to receive several petitions for reconsideration on the merits of the rule, which it would fully consider as well.

Despite the additional procedural steps EPA plans to take, EPA still expects the deadline for compliance to be 2014 for boilers and 2016 for incinerators.  The final rule package will be published in the federal register in the coming weeks, but EPA has not yet established a deadline for additional comments in response to the notice of reconsideration.