On Friday, December 2, 2011, the Environmental Protection Agency (“EPA”) released its third attempt at a Maximum Achievable Control Technology (“MACT”) standard for industrial boilers and process heaters under the Clean Air Act.  EPA’s latest proposal is a reconsideration of the final rule that was adopted in February and published March 21, 2011, which EPA promised to revise the same day it was released.  As with the prior iterations of the rule, the newly-proposed Industrial Boiler MACT includes strict limits on the emission of hazardous air pollutants from boilers, and the revisions EPA has proposed will likely represent a mix of good and bad news for industry.

EPA’s first Industrial Boiler MACT, adopted in 2005, was vacated by the U.S. Circuit Court of Appeals for the D.C. Circuit in 2007, which led to the re-proposal of the rule on June 4, 2010.  Amid an outcry from industry claiming the limits set forth in the 2010 proposal were simply unachievable, EPA promised to relax the rule somewhat before releasing it in final form.  Because a court-ordered consent decree established a specific deadline for releasing the final rule, EPA asked the court for more time to make the necessary revisions, but the court denied EPA’s request, forcing the agency to sign the final rule in February.  Although the agency claimed its final rule was sufficient and defensible as officially published in March, the agency immediately began proceedings to reconsider the rule and issued an administrative stay in May to delay its effectiveness.

The proposed “reconsideration rule” released at the end of last week contains a new suite of hazardous air pollutant emission limits that is entirely different from all prior versions of the rule.  Still exempt from those numeric emission limits are natural gas units, units with a heat input capacity of less than 10 mmBtu/hr, and “limited use” units that operate less than 876 hours per year, but all other boilers now face a new set of emissions limitations, some that became more stringent, others that became less stringent. 

Perhaps the most notable change is the elimination of a numeric emission limit for dioxins/furans.  In the preamble to the reconsideration rule proposal, EPA recognized that 55 percent of the dioxin/furan data it has obtained is below detection limits and conceded that almost all of the data is below the limit at which measurements are expected to be reliably accurate.  To avoid requiring source owners to demonstrate compliance with an emission limit at a level that cannot be accurately measured with existing technology, EPA chose instead to impose work practice standards to minimize dioxin/furan emissions, which consist of a periodic tune-up to ensure good combustion is achieved and maintained.

The proposed reconsideration rule continues to impose strict numeric emission limits for the four other pollutants covered by the last MACT rule, namely mercury (Hg), hydrogen chloride (HCl), particulate matter (PM), and carbon monoxide (CO).  PM and CO are not hazardous air pollutants, but function as surrogates for metallic and organic pollutants, respectively.  To establish MACT limits for these four pollutants, EPA divided them into two categories.  Characterizing Hg and HCl as “fuel-based” pollutants, since the emissions of those pollutants are driven primarily by the pollutant content of the fuel, EPA has proposed one Hg limit and one HCl limit each for solid fuels and liquid fuels, without distinguishing between boiler technologies.  In contrast, EPA characterized PM and CO as “combustion-based” pollutants because the emissions of those pollutants are more significantly affected by the design of the unit.  To account for the different emission characteristics of different combustion technologies, EPA has proposed separate emission limits for fourteen different types of boilers likely to be covered by the rule, including three different types of coal units, two different types of liquid fuel units, and seven different types of biomass units, resulting in a greater number of subcategories than any prior industrial boiler MACT rule or proposal.  Since the Clean Air Act requires more stringent emission limits for new units, EPA has also proposed a completely different set of emission limits for new units for all pollutants and subcategories.

The revised emission limits EPA has proposed do not exhibit any clear trend or pattern.  The new limits are based on a different set of data than previous boiler MACT rules – EPA received additional data after the March 2011 final rule and also conducted an additional quality assurance review to eliminate poor quality data.  EPA also revised its calculation methodology somewhat to take into account concerns related to measurement accuracy and detection levels as well.  The result is a completely different set of limits, many of which are as stringent as ever.  For example, most of the Hg and CO emission limits proposed in EPA’s reconsideration rule are actually more stringent than the March 2011 version of the rule.  The PM limits, on the other hand, are less stringent for most categories except some biomass stokers. 

EPA has also included some additional flexibility to the rule by allowing a variety of alternative emissions limits and compliance demonstration methods.  For instance, the reconsideration rule proposes an alternative “total selected metals” limit that can be used in place of the PM limit, a different CO limit for units with a CO continuous monitor, and an “output-based” alternative limits as well.  In addition, a facility with more than one boiler can choose to average the emissions of the boilers together, so long as the source as a whole remains at less than 90 percent of the standard.  EPA also abandoned its plans to require all boilers to employ continuous monitors for PM, but has proposed an option to allow sources to utility continuous monitors for Hg if they prefer.

The reconsideration rule also revises the compliance deadlines – existing units will have three years from the publication of the final reconsideration rule to comply.  EPA explained in its preamble that the deadline extension was justified in part by the fact that utility units will soon become subject to similar MACT requirements, which could compete for limited pollution control vendor resources.  However, EPA has decided not to change the “proposal date” of June 4, 2010, which is the critical date for determining whether an industrial boiler is considered “new” or “existing.”  Because EPA is continuing to promise a final reconsideration rule in April 2012, the compliance deadline for most existing sources will be June 2015, unless they can qualify for a one-year extension.    

Along with its proposed industrial boiler MACT reconsideration rule, EPA has also proposed various revisions and clarifications for the three other related rules, including the “area source” industrial boiler MACT (which applies to boilers at smaller facilities), MACT rules for incinerators that burn solid waste, and a rule to re-define the term “solid waste” to help distinguish between boilers and incinerators that burn secondary industrial materials.  EPA will take comment on all four proposed rules for 60 days from the publication of the rule in the federal register, expected within the month.