Boiler MACT Vacatur and Remand: The Details Unfold

As I wrote about in my last post, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit Court” or “Court”) issued an opinion on July 29, 2016 regarding three related rules for boilers, process heaters, and incinerators: the Major Source Boiler MACT, Area Source Boiler MACT, and CISWI rules.1

In the action, the D.C. Circuit Court remanded several items to U.S. EPA for further explanation, and, perhaps more significantly, vacated the emissions standards for certain subcategories under Major Source Boiler MACT. In this article, I provide some more details behind the Court’s decision – what were the issues and what was decided? What does each decision mean for the regulated community? Read on to find out.

THE VACATUR

“Specifically, we vacate the MACT standards for all major boiler subcategories that would have been affected had the EPA considered all sources included in the subcategories, as explained at supra § IV.B.”

Whoa – that’s a big deal. When a rule or portion of a rule is vacated, it is no longer effective or enforceable. Other notable vacaturs include the emergency demand response provisions of the widely applicable MACT rule for reciprocating internal combustion engines (RICE), the startup, shutdown, and malfunction (SSM) exemptions in the 40 CFR Part 63 General Provisions, and of course the 2005 Boiler MACT rule which has led us to where we are today. The Court’s July 2016 decision is not entirely clear about which specific Major Source Boiler MACT subcategories are affected by the vacatur, but it appears to be those pertaining to solid fuel (i.e., coal and biomass). I have a hunch that liquid subcategories may also be affected.

Unless the decision is reversed or modified before the mandate is issued (more on that below), U.S. EPA will be required to reestablish emissions standards for the affected subcategories. Since the Court found that the current emissions standards do not account for some of the best performing units, odds are that the revised emissions standards won’t be any less stringent than they are now. What does that mean for existing or newly converted natural gas-fired sources? Not much, since the rule does not establish emissions standards for the “gas 1” subcategory. The real impacts of this decision, should it be upheld, will be for the sources with applicable emissions standards, especially those that utilize or have installed air pollution control equipment to meet the promulgated limits.

THE REMANDS

“We also remand, without vacatur, to the EPA to: (1) adequately explain how CO acts as a reasonable surrogate for non-dioxin/furan organic HAPs; (2) set emission standards for cyclonic burn barrels; (3) determine whether burn-off ovens, soil treatment units, and space heaters are CISWI units and, if so, to set standards for those types of units; (4) adequately explain the exclusion of synthetic boilers from Title V’s permitting requirements; and (5) adequately explain the choice of GACT standards over MACT standards for non-Hg metals.”

While a remand is not as immediately impactful as a vacatur, remands can result in changes to rules depending on U.S. EPA’s response and conclusions. There were five items remanded to U.S. EPA for further explanation – each remanded item, organized by the affected rule, is explained in further detail below.

Major Source Boiler MACT

CO as surrogate for non-dioxin/furan organic HAPs
Under Major Source Boiler MACT, U.S. EPA regulates carbon monoxide (CO) as a surrogate for organic hazardous air pollutants (HAPs) (except dioxin/furans) rather than regulating each of the 100+ individual organic HAPs. The Court has asked U.S. EPA to explain why this approach is appropriate, noting that U.S. EPA did not address comments during the rulemaking process claiming that there could be controls that reduce non-dioxin/furan organic HAPs but not CO, or vice versa. U.S. EPA’s justification thus far is that both CO and non-dioxin/furan organic HAPs are both a result of incomplete combustion and that emissions would be minimized through similar methods of control.

This particular remand has the potential to be especially impactful because U.S. EPA has applied this logic for other MACT standards that are currently in effect, including the widely applicable RICE MACT. However, the Court has indicated that it is highly likely that U.S. EPA will be able to sufficiently respond to the remand and adequately justify the continued use of CO as a surrogate for non-dioxin/furan HAPs.

Commercial and Industrial Solid Waste Incineration Standards

Emissions standards for cyclonic burn barrels
In its decision, the Court determined that U.S. EPA failed to establish emissions standards for cyclonic burn barrels under the CISWI rule, even though in its rulemaking, U.S. EPA clearly stated that these types of sources combust solid waste. For the record, a cyclonic burn barrel is pretty much exactly that per the rule definition: “a combustion device for waste materials that is attached to a 55 gallon, open-head drum. The device consists of a lid, which fits onto and encloses the drum, and a blower that forces combustion air into the drum in a cyclonic manner to enhance the mixing of waste material and air”. U.S. EPA argued that they chose not to regulate cyclonic burn barrels as CISWI units due to the limited amount of available data for these sources. However, the Court’s position is that U.S. EPA had the authority to collect the necessary information from owners and operators of these sources in order to establish emissions standards. Under the remand, U.S. EPA is required to now establish emissions standards for cyclonic burn barrels under the CISWI rule. This could mean an information collection request for owners and operators of these types of sources is in the near future.

CISWI status for burn-off ovens, soil treatment units, and space heaters
Similar to the cyclonic burn barrel issue above, U.S. EPA did not establish emissions standards for burn-off ovens (including foundry sand reclamation units), soil treatment units, or space heaters under the CISWI rule. However, unlike for cyclonic burn barrels, the reason U.S. EPA did not establish emissions standards is because they did not determine whether these types of sources are actually CISWI units (i.e., whether they combust solid waste). Under the remand, U.S. EPA is required to determine whether these types of sources are CISWI units, and if so, to promulgate emissions standards. Again, for the record, “space heaters” are those covered by 40 CFR Part 279 (Standards for Used Oil Generators) and pursuant to §279.23, cannot have a maximum capacity of greater than 0.5 MMBtu/hr.

Area Source Boiler MACT

Title V permitting requirements for synthetic boilers
Facilities subject to a Major Source MACT standard are automatically subject to Title V permitting requirements since, by definition, they are a major source of HAP (i.e., they emit 10 tons per year or more of a single HAP or 25 tons per year or more of combined HAP). On the other hand, MACT standards that regulate area sources of HAP (i.e., facilities that emit less than 10 tons per year of a single HAP and less than 25 tons per year of combined HAP) do not necessarily require affected facilities to operate pursuant to a Title V permit. This is because U.S. EPA believes that the Title V permitting requirements would be overly burdensome for these typically smaller facilities, and also that the sheer number of area sources operating in the country would overwhelm U.S. EPA resources. Likewise, the Area Source Boiler MACT rule does not require affected facilities to operate pursuant to a Title V permit. However, the Court has decided that U.S. EPA must specifically explain why “synthetic area sources” are excluded from the Title V operating permit requirements. Synthetic area sources are described as those that would otherwise emit HAPs at major source levels, but are physically restricted from emitting above those levels due to the installation of air pollution control equipment. The Court’s decision stems from inconsistencies in U.S. EPA’s explanation for including or excluding these sources from the Title V operating permit requirements between the 2010 proposed rule and 2011 final rule.

GACT vs. MACT for non-Hg metals
While U.S. EPA established emissions standards for mercury (Hg) from coal-fired boilers in the Area Source Boiler MACT rule, it established work practice standards for other non-Hg metals. In its decision, the Court determined that U.S. EPA must provide justification for its selection of Generally Achievable Control Technology (GACT) work practice standards rather than Maximum Achievable Control Technology (MACT) emission standards for non-Hg metal HAPs.

THE REJECTIONS

In addition to the vacatur and remands, the D.C. Circuit Court also rejected several items petitioned by industry and environmental groups. I won’t go into too much detail on these, but they are summarized below:

Rejections of Industry Petitioner Claims

• Failure to account for malfunctions when setting MACT floors in the Major and Area Source Boiler MACT rules.
• Failure to account for periods of startup, shutdown, and malfunction in the CISWI rule.
• Use of the “pollutant-by-pollutant” approach for establishing emissions standards in the Major Source Boiler MACT and CISWI rules.
• Requirement for existing sources to conduct energy assessments in the Major and Area Source Boiler MACT rules.
• Presumption that failure to keep records documenting the use of non-waste fuels would cause a source to be considered a CISWI unit under the CISWI rule.
• Failure to account for varying waste streams in establishing emissions standards for small remote incinerators (SRI) under the CISWI rule.
• Use of CO as a surrogate for organic HAP emissions from coal-fired boilers instead of establishing work practice standards under the Major Source Boiler MACT rule.
• Failure to establish a health-based emissions standard for HCl under the Major Source Boiler MACT rule.
• Failure to allow facility-wide emissions averaging under the CISWI rule.

Rejections of Environmental Petitioner Claims

• Use of CO as a surrogate for non-dioxin/furan organic HAPs due to breakdowns in correlations below 130 ppm under the Major Source Boiler MACT rule.
• Use of the Upper Prediction Limit (UPL) to account for the amount of available data and its variability in establishing the MACT floors under the Major Source Boiler MACT and CISWI rules.
• Failure to set beyond-the-floor standards for CISWI units.
• Failure to delist oil- and biomass-fired subcategories and establishment of GACT standards rather than MACT standards for Hg and polycyclic organic matter (POM) from these subcategories under the Area Source Boiler MACT rule.
• Selection of certain GACT standards under the Area Source Boiler MACT rule.
• Establishment of a 30-day rolling average to demonstrate compliance with emissions standards under the CISWI rule.
• Decision to subcategorize boilers based on the fuel the boiler is designed to burn under the Major Source Boiler MACT rule.
• Classification of units that begin combusting solid waste as “existing” units under the CISWI rule.
• Failure to regulate temporary boilers under the Area Source Boiler MACT rule.
• Establishment of biennial tune-up requirements for small coal-fired boilers and work practice standards during startup and shutdown for large coal-fired boilers under the Area Source Boiler MACT rule.

THE IMPACTS

“It is ordered, on the court’s own motion, that the Clerk withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing or petition for rehearing en banc.”

As has become the norm with Boiler MACT, this decision perpetuates uncertainty for the regulated community. So let’s discuss what we all really want to know – what are the immediate impacts of this decision? For the regulated community: not much…yet (other than that ongoing uncertainty). The D.C. Circuit Court’s decision was accompanied by an Order Withholding Mandate Pending Rehearing Petitions, which means that the decision is not effective until the mandate is issued. In the meantime, the parties involved have the opportunity to request a rehearing that could alter the Court’s decision. So the possibility of a final action extending over several more months is quite possible. If U.S. EPA is required to reestablish emissions standards under the vacatur, that process will most certainly take years.

Our advice to the regulated community: continue complying with the existing emissions standards. For those with extensions, continue your course of action to comply by January 31, 2017. And of course stay with us for more updates as the details continue to unfold. Contact me with questions or input at 610.933.5246 x122 or lkroos@all4inc.com.

1MACT = Maximum Achievable Control Technology; CISWI = Commercial and Industrial Solid Waste Incineration