Frankenstein Boiler Still Alive: EPA’s New Boiler MACT and Solid Waste Rules

March 3, 2011

EPA’s newly finalized suite of boiler rules and solid waste definitions contain some welcome relief for small emitting “area source” facilities and small boilers, including natural gas and some coal, fuel oil and biomass units, and for certain non-waste alternative fuels. But, with the exception of natural gas-fired boilers, the rules continue to prescribe stringent emission limits for large boilers, including those firing coal, biomass or oil. These limits are based on a model boiler that industry has dubbed the “Frankenstein Boiler” or the “Franken Boiler” because it doesn’t exist in the real world.

Finalizing these rules under a court imposed deadline on February 21, 2010, EPA took the unusual step of immediately announcing its intent to reconsider the three major rules in this package. While EPA has opened the door for changes to the rules before they become effective for “existing” sources in 2014, its reconsideration is stated to be limited to certain narrow issues. Given EPA’s strident defense of its methodology for establishing Maximum Achievable Control Technology (MACT) emission limits in the Final Rule, the “Franken Boiler” issue is unlikely to be resolved in the reconsideration process. Also, reconsideration won’t defer compliance for “new” boilers, which will be subject to these new rules within 60 days after publication in the Federal Register.

Issues for Major Sources & Large Boilers

EPA has amended the rules to address differences between certain types of boilers and fuels, but the Final Rules continue to include stringent emission limits for mercury, dioxin, HCl, CO and PM for boilers with a heat input capacity of > 10 MMBtu located at large emitting (major source) facilities.

While some limits have been raised, many others have been lowered. For example, the limit for CO at biomass-fired fluidized bed units has been raised from 40 PPM in the proposed rule, to 260 ppm in the Final Rule, but the CO limit for biomass-fired stoker units has been lowered from 560 ppm to 160 ppm. Other more stringent limits include PM and mercury for liquid fuel units, and PM and HCl for the new combined “solid fuel units” category when compared to the proposed limits for the biomass fuel subcategory.

Industry has called the changes in the emission limitations “disappointing,” given the extensive documentation submitted in the record that such limits are unachievable without commercially unreasonable expenditures. To control these emissions to the prescribed levels, EPA acknowledges most facilities will either have to consider “fuel switching” or install multiple pollution control technologies such as wet scrubbers or electrostatic precipitators for PM and HCL, and activated carbon injection for mercury and dioxins.

Despite the fact that no single facility in EPA’s database has met the combination of limits the rules require, EPA has not wavered from its position that “cherry picking” the best performance on a pollutant-by-pollutant basis is permissible under the MACT standard prescribed in Clean Air Act Section 112. Thus, the controversy over whether EPA has the authority to prescribe limits that only a Franken Boiler can meet is likely to be decided by the D.C. Circuit Court of Appeals.

Notably EPA continues to reject the option of providing a more flexible, site-specific health-based compliance alternative, citing the lack of information in the record addressing cumulative emission effects, co-location of multiple facilities, and the collateral benefits of controlling non-HAP emissions. While EPA has not indicated it will reconsider this issue, industry advocates are gearing up to submit more data supporting this option during reconsideration.

Output-Based Alternative Standards for Major Sources

Cogeneration advocates are pleased to see that the Final Rule provides “energy output-based” emission limits as well as the traditional “heat input-based” emission limits for boilers located at major sources. To demonstrate compliance with output-based standards, the mass rate of emissions is measured against the overall energy output of the boiler. These standards reward energy efficiency and cogeneration boilers which produce additional energy from steam or waste heat. Energy efficiency that reduces fuel consumption and thereby reduces emissions may be an alternative means of compliance for some pollutants at some facilities.

The Final Rule also continues to include a “beyond-the-floor” MACT standard for all existing major source boilers requiring performance of a one-time energy assessment by qualified personnel to identify cost-effective energy conservation measures.

Some Relief for Area Sources & Small Boilers

Most of the estimated 187,000 “area source” small emitting facilities, generally commercial and institutional facilities, are subject to a Generally Available Control Technology (GACT) standard which minimizes emissions based on specified work practices rather than compliance with emission limits. For example, coal, biomass and oil-fired boilers (new and existing) with heat input capacity of <10 MMBtu need only undertake annual boiler tune-ups. Existing biomass and oil-fired boilers of any size at area sources are also only required to do annual tune-ups.

Note that under the Final Rule, natural gas-fired units at area sources have no requirements, but natural gas-fired units at major sources are subject to the annual tune-up work practice requirement. Also, at both area sources and major sources, limited use emergency and backup boilers are subject to only tune-up requirements. EPA has also decided that emissions from start-ups and shutdowns at any size boiler at any facility need not meet the prescribed MACT emission limits during start-ups and shutdowns, if they comply with manufacturer specifications for minimizing emissions.

At area sources, emission limits will still apply to new boilers > 10 MMBtu/hr combusting any fuel other than natural gas and to existing coal-fired boilers > 10 MMBtu, but the pollutants to be monitored and controlled for biomass and oil have been reduced to only PM – no CO limit is prescribed. Limits for PM, mercury and CO at coal-fired boilers remain, but have been lowered slightly.

Fuels Permitted to be Combusted in Boilers

As a part of the Feb. 24 action, EPA also announced its final action on a companion rule to the Boiler MACT and Incinerator MACT rules which distinguishes materials that qualify as “fuel” from those that must be considered “solid waste” under the Resource Conservation and Recovery Act (RCRA).

While this rule has received little attention, it is critical for determining which MACT requirements apply to boilers utilizing alternative fuels. Alternative fuels that are classified as “fuel” under this rule may be combusted in industrial, commercial and institutional boilers which are subject to the Boiler MACT regulations. Solid waste, on the other hand, can only be combusted in units that are regulated under the even more stringent Commercial and Industrial Solid Waste Incinerator (CISWI) MACT regulations.

The Final Rule continues the basic distinction between “traditional fuels” which are not waste, and “secondary materials” that are considered waste unless handled in conformance with specific “legitimacy” criteria. But EPA now provides a regulatory definition of traditional fuel, which includes a category of alternative fuels not originally proposed, including “on-spec” used oil and “currently mined coal refuse,” as well as “clean cellulosic biomass.” EPA also provides a definition and more guidance on what constitutes clean cellulosic biomass, including “clean construction and demolition debris.”

The Final Rule continues to presume that materials that leave the control of the generator are “discarded,” and thus solid waste, unless sufficiently “processed.” EPA also has not revised its position that simply changing the size or shape of a material is not sufficient processing to convert a discarded solid waste to a valuable fuel. But EPA now provides two important exceptions to the presumption that materials obtained from a third party are discarded. First, scrap tires will not be deemed to be discarded, and thus will not require additional processing, if they are obtained from a “cradle to grave” scrap tire collection program. Second, “resinated wood products” used in a combustion unit are not considered discarded, even if obtained from a party outside the control of the generator.

EPA does not plan to reconsider its action on this rule.

For further information on EPA’s New Boiler MACT and Solid Waste Rules, please contact any of the authors.