The Future of Secondary Materials as Fuel

Introduction

Many questions related to the regulatory status of facilities that use secondary materials as alternative fuels are anticipated to be answered in 2010.  In simple terms, if a combustion source uses a secondary material that is characterized as solid waste as an alternative fuel, then that source could be subject to a Clean Air Act (CAA) Section 129 standard. If the same source uses a secondary material that is not characterized as solid waste, then that source could be subject to a CAA Section 112 standard.  While the details of the specific Section 112 and 129 rules can be complicated, the over-riding question relates to how individual secondary materials that are used as fuels are ultimately classified.

As we’ve previously reported in 4 The Record, the use of alternative and non-traditional fuels for heat and power generation continues to grow.  A wide variety of non-hazardous secondary materials1 have been successfully permitted for use in boilers and industrial furnaces and have proven to be effective fossil fuel substitutes at numerous public, commercial, and industrial manufacturing facilities.  However, the remand and vacatur of the Commercial and Industrial Solid Waste Incineration (CISWI) Definitions Rule on June 8, 2007 by the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court) could significantly influence how facilities that utilize alternative or non-traditional fuels are regulated under the CAA. Facilities that combust materials that are ultimately characterized as a “solid waste” under Subtitle D of the Resource Conservation and Recovery Act (RCRA) will be subject to regulations promulgated in accordance with Section 129 of the CAA.  Facilities that combust materials that are not characterized as solid waste could be subject to regulation under Section 112 of the CAA. This article provides an overview of the solid waste and air quality issues that are currently being considered by U.S. EPA and outlined the Section 129 requirements that many facilities could be facing.

Background

The Commercial and Industrial Solid Waste Incineration (CISWI) Rule was promulgated on December 1, 2000, and set emission standards for CISWI units pursuant to Section 129 of the CAA.  Following a voluntary remand of the CISWI Rule, U.S. EPA solicited comments on several key definitions in the CISWI rule including “solid waste,” “commercial and industrial waste,” and “CISWI unit.” U.S. EPA issued the “CISWI Definitions Rule” on September 22, 2005 after review and consideration of the public comments that were received. In the promulgated CISWI Definitions Rule, a “CISWI unit” was defined as “any combustion unit that combusts commercial or industrial waste (as defined in this subpart).”  The rule further defined “commercial or industrial waste” as “solid waste (as defined in this subpart) that is combusted at any commercial or industrial facility using controlled flame combustion in an enclosed, distinct operating unit: whose design does not provide for energy recovery (as defined in this subpart); or is

1 U.S. EPA generally considers secondary materials to be a legitimate fuel if they are handled as valuable commodities (i.e., managed, at a minimum, in a manner consistent with the management of the analogous raw material), have meaningful heating value, and contain contaminants that are not significantly higher in concentration than traditional fuel products.

operated without energy recovery (as defined in this subpart).”  This definition of commercial or industrial waste limited the applicability of the CISWI Rule to combustors that did not recover thermal energy for a useful purpose from the combustion of the material, thereby restricting rule applicability.

Following a petition for review of the CISWI Definitions Rule by environmental groups, the D.C. Circuit Court remanded and vacated the CISWI Definitions Rule on June 8, 2007. The D.C. Circuit Court2 determined that the Section 129 standards apply to any facility that combusts any commercial or industrial solid waste material, excluding available statutory exemptions3 and that U.S. EPA incorrectly excluded units that combust solid waste for the purposes of energy recovery from the CISWI Definitions Rule.

On January 2, 2009, U.S. EPA published an advance notice of proposed rulemaking (ANPR) seeking public comment and providing advanced notice of its intent to develop a definition for the term ‘‘solid waste’’ under RCRA for non-hazardous secondary materials that are used as a fuel or as ingredients in a manufacturing process4.  The stated purpose of the ANPR is to solicit input to assist U.S. EPA in developing emissions standards under Sections 112 and 129 of the CAA, because of the CAA’s reference to the meaning of solid waste within the CAA as having the same meaning as solid waste under RCRA.  A public meeting was held on January 28, 2010 in New Orleans to solicit additional public input regarding the identification of secondary materials that are solid wastes.  A discussion handout that summarized U.S. EPA’s issues and concerns was provided at the meeting.  U.S. EPA is facing an April 15, 2010 deadline for the proposed rule which corresponds to a court-mandated deadline for proposed Boiler MACT and CISWI rules. The deadline for final Boiler MACT and CISWI rules is December 16, 2010.

U.S. EPA estimates that up to 136,000 facilities (including industrial boilers, cement kilns, and power plants) combust secondary materials as alternative fuels.  How U.S. EPA ultimately defines secondary materials that are solid wastes could have significant impacts on existing state-specific solid waste management programs and on facilities that combust secondary material as alternative fuels.

The Solid Waste Issue

U.S. EPA has identified nine (9) “fuel groups” which are believed to represent most secondary materials that are combusted.  The fuel groups include: biomass; construction and debris materials (e.g., building related, disaster debris, and land clearing debris); scrap tires; scrap plastics; spent solvents; coal refuse; waste water treatment sludge; used oil; and resinated biomass.

2 The D.C. Circuit Court also determined that U.S. EPA incorrectly included units that combust commercial or industrial solid waste material in 40 CFR Part 63, Subpart EEEEE – National Emission Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters (Boilers Rule or Boiler MACT).

3 The term “solid waste incineration unit” does not include:

  (A) materials recovery facilities (including primary or secondary smelters) which combust waste for the primary purpose of recovering metals,

  (B) qualifying small power production facilities, as defined in section 796 (17)(C) of title 16, or qualifying cogeneration facilities, as defined in section 796 (18)(B) of title 16, which burn homogeneous waste (such as units which burn tires or used oil, but not including refuse-derived fuel) for the production of electric energy or in the case of qualifying cogeneration facilities which burn homogeneous waste for the production of electric energy and steam or forms of useful energy (such as heat) which are used for industrial, commercial, heating or cooling purposes, or

  (C) air curtain incinerators provided that such incinerators only burn wood wastes, yard wastes and clean lumber and that such air curtain incinerators comply with opacity limitations to be established by the Administrator by rule.

4 The focus of this article is on the combustion of secondary materials. However, U.S. EPA also addressed non-hazardous secondary materials that are used as ingredients in manufacturing processes in the January 2, 2009 ANPR.

The ANPR narrowed the discussion down into several key points, based on previous rulemakings and court interpretations:

• Whether or not the secondary materials being combusted are “legitimate” fuels.
• Whether or not the secondary materials have been “discarded.”
• If discarded, whether the secondary material has been processed sufficiently for use as a legitimate fuel.

U.S. EPA’s position in the ANPR regarding legitimacy (for a fuel) states that the secondary material must be handled as a valuable commodity, must have meaningful heating value, and must not contain contaminants that are significantly higher in concentration than traditional fuel products.  However, it appears that a defining factor regarding how secondary materials could be characterized appears to be how the materials are handled and managed (as they relate to discarded material), rather than the physical properties of the secondary materials. Simply put, wastes have been discarded and non-wastes have not been discarded. This position appears to automatically characterize legitimate fuels that are being recovered from landfills and other sources as solid waste, whose combustion is subject to regulation under Section 129 of the CAA. For example, a tire that is recovered from a remote tire pile and that is used (whole) as an alternative cement kiln fuel could be defined as a solid waste, thereby subjecting the kiln to standards under Section 129 of the CAA (i.e., CISWI Rule).  An identical tire that is recovered from a tire pile that is processed (e.g., shredded) and then used as an alternative fuel in the same cement kiln may not be characterized as solid waste, and could therefore be combusted in the kiln without affecting the kiln’s regulatory status (i.e., 40 CFR Part 63, Subpart LLL).  Finally, an identical tire that is collected as part of a program to intercept tires prior to being discarded may not be characterized as solid waste, and could therefore be combusted in the kiln without affecting the kiln’s regulatory status (i.e., 40 CFR Part 63, Subpart LLL).

The Air Quality Issue

While there are similarities between CAA Section 112 and 129 rule requirements, there are several significant differences that facilities that are impacted by the current regulatory uncertainty should be aware of.  The primary similarity is that standards developed under each Section must represent Maximum Achievable Control Technology (MACT).  CAA Section 129 Standards are codified at 40 CFR Part 60 whereas Section 112 Standards are codified at 40 CFR Part 63.  In setting the standards, U.S. EPA must first determine a MACT “floor” based on emission controls and limitations achieved in practice by existing sources at the time of promulgation.  For new units, U.S. EPA is required to set the floor at “the emissions control that is achieved in practice by the best controlled similar unit.”  For existing units, U.S. EPA is required to set the floor at “the average emissions limitation achieved by the best performing 12 percent of units in the category.”  Under Section 112 there is an eight (8) year review requirement, while under Section 129, standards are to be reviewed every five (5) years.  Both Section 112 and 129 address “residual” risks to determine if the standards developed are sufficient to protect public health.   Other key differences between Section 112 and 129 include:

• Section 129 requires that MACT standards apply to all solid waste incineration units in a given category regardless of size. Section 112 requires that MACT standards be established for major hazardous air pollutant (HAP) sources and also allows U.S. EPA to set standards for area HAP sources based on generally available control technology (GACT) rather than MACT.  In short, if you are combusting a secondary material that is determined to be a solid waste, you will be subject to an applicable Section 129 standard and the Section 129 standard will supercede the applicability of a Section 112 standard.
• Section 129 requires that numeric emission limitations be set for nine (9) pollutants, comprised of specific Hazardous Air Pollutants (HAPs) and other non-HAPs, including cadmium (Cd), carbon monoxide (CO), dioxins/furans, hydrogen chloride (HCl), lead (Pb), mercury (Hg), nitrogen oxides (NOX), particulate matter (total and fine), sulfur dioxide (SO2), and opacity. Section 112 addresses HAP emissions only, but in many instances regulates HAP surrogates (e.g., particulate matter as a surrogate for metallic HAP) rather than specific HAP compounds.

• Section 129 includes explicit requirements for operator training and pre-construction site assessments (for new units) that are not required by Section 112.

At face value, the Section 129 rules appear to be more robust than the Section 112 rules and could increase the regulatory burden of a facility should a Section 129 rule become effective where it had historically not applied.

Conclusion and Recommendations

Depending upon the ultimate outcome of the regulatory activity around the solid waste definition for secondary materials, the CISWI Rule, and the Boiler MACT Rule, facilities that have historically used secondary materials as alternative fuel may be faced with complying with a rule that was intended to apply to solid waste incinerators. All of these rules are currently being revised and are anticipated to be proposed in April 2010. For many facilities affected by the anticipated changes, the decision may be made to discontinue the use of secondary materials as alternative fuels rather than to retrofit air pollution controls to meet a Section 129 standard.  This scenario could result in facilities abandoning secondary materials as alternative fuels while increasing their use of traditional fossil fuels, including coal.

Several steps that you can take to keep track of the regulatory process and the potential impacts that the regulatory changes will have on your operations include the following:

• Continue to follow the regulatory development process very closely.  Regular visits to the on-line docket at www.regulations.gov [Docket No. EPA-HQ-RCRA-2008-0329] are recommended.
• Become involved with the trade association that represents your particular industry (e.g., Portland Cement Association (PCA), National Council for Air and Stream Improvement (NCASI), and Council of Industrial Boiler Owners (CIBO), and American Forest and Paper Association (AF&PA)).  Trade associations can be an effective means to track regulatory status and to provide comments.
• Be aware of possible regulatory impacts on open plans and projects.
• Consider delaying any decisions regarding the use of secondary materials as alternative fuels until proposed rules are published.
• Watch for future updates in 4 The Record.