Abate Technologies International, Inc.

ATI QUARTERLY 1ST QUARTER 2012

 

AQMD ANNUAL EMISSIONS REPORTS RULE 1147—NOX REDUCTIONS FROM MISCELLANEOUS SOURCES
OFFSET RULE LITIGATION UPDATE NEW STATE LAW ON DISPOSAL OF ARCHITECTURAL PAINTS
DTSC GREEN CHEMISTRY INITIATIVE RULE 1470 AMENDMENTS POSTPONED
CHANGE FOR COMPOSITES WOOD PRODUCTS REGULATIONS GREENHOUSE GAS REPORTING RULES
JUDGE ISSUES DECISION ON CARB'S AB32

 

AQMD ANNUAL EMISSIONS REPORTS

Who is required to file?

  • Facilities in the Annual Operating Permit Emission Fee Program. Those are companies who pay annual emissions for permitted equipment. Such facilities are subject to AQMD Rule 301(e) and are required to file when exceeding the corresponding reporting thresholds.
  • Facilities whose permitted plus un-permitted emissions equal 4 tons or more per year of criteria pollutants (VOCs, NOx, SOx, PM, Specific Organics); or 100 tons or more per year of CO.
  • Facilities which had emissions [thresholds specified in Rule 301(e)] of specific Toxic Air Contaminants or ozone depleting compounds, listed in form TAC.
  • Facilities that receive an Annual Emissions Report Package. However, it is the operator's responsibility to file a report if necessary, even if the facility does not receive a notification from SCAQMD.
  • Facilities which prior to July 1, 2000 had equipment listed as exempt. There is no fee associated with these exempt emissions but they must be reported.

What if I miss the deadline?
The SCAQMD 2011 Annual Emissions Report is due by 5:00 p.m. on March 1, 2012. If a facility misses the deadline and owes an emission fee, late payment penalties in the form of a percentage of the emission fees will apply. The penalties are set forth in AQMD Rule 301(e)(10)(B) and are as follows:

Payment received Penalties
Less than 30 days late 5% of reported amount
30 to 90 days late 15% of reported amount
91 days to 1 year late 25% of reported amount
More than 1 year late 50% of reported amount

After submitting my report I found out I estimated emissions incorrectly
Companies that pay their emissions fees on time but underestimated their emissions, which resulted in underpayment to SCAQMD, can resubmit the report subject to underpayment penalties. If the underpayment is corrected within one year from the filing deadline and more than 90% of the amount due was paid, there are no penalties. However, if payment was less than 90% of the amount due, the penalty is 15% of the underpayment amount. When the underpayment is determined more than one year and sixty days from the official due date, fee rates and penalties will be assessed based on 301(e)(10)(D). Fees are determined based on rates in effect for the year when the emissions are actually reported, not the year wherein the emissions occurred.
A facility can file a refund request when overestimating of the emissions resulted in overpayment to AQMD. The refund request must be submitted in writing as set forth in Rule 301. Form "A" can also be used to request refunds associated with the current reporting period.

Recent changes
As of January 1, 2008, facilities have been required to report emissions on a calendar year basis (from January 1 to December 31 of the reporting year). The reporting is now done using a web-based system.

Special circumstances
The AQMD has a Fee Review Committee to handle issues regarding fees and penalties.

 

RULE 1147—NOX REDUCTIONS FROM MISCELLANEOUS SOURCES

Despite strong opposition from industry, the South Coast Air Quality Management District adopted amendments to Rule 1147 on September 9, 2011. The rule established nitrogen oxide (NOx) emission limits for a wide variety of combustion equipment. It affects new and existing (in-use) combustion equipment requiring permits that are not regulated by other AQMD NOx rules.

Some of the key changes identified by staff include:

. Delay effective dates by one to two years;
. Remove the requirement for the installation of time meters;
. Limit the requirement for fuel meters to units where owners elect to demonstrate compliance using pound per million Btu versus parts per million;
. Allowance for small emitters (1 lb/day or less) to identify units eligible for a five year delay of the compliance date.

The new version of rule 1147 includes a mitigation fee option applicable to businesses with equipment emissions greater than one pound per day. Businesses can choose to delay compliance by three years, so long as they provide emission reductions from other sources during that three year period and pay a fee to the District. The rule requires a technology assessment to determine the availability of compliant technology for units emitting less than one pound per day, by December 2015. The report is to be presented to the AQMD board.

During a public hearing, industry representatives commented that the rule would have a negative effect on businesses, which would be required to retrofit their units and perform expensive source tests. Additionally, it was pointed out that recordkeeping requirements in the rule would place an additional administrative burden on businesses to report their emissions.

 

OFFSET RULE LITIGATION UPDATE

Several years ago, environmental groups sued the District challenging the adoption of Rule 1315 over offsets. The federal Clean Air Act requires new businesses and those adding or modifying equipment to provide emission offsets to prevent deterioration of air quality. Emission offsets are typically generated when a facility shuts down permanently.

The District lost the lawsuit, which meant the agency could not issue credits out of its offset bank and it could not rely on Rule 1304 exemptions. The District issued a statement notifying the public that it could not issue permits that necessitated credits from the Rule 1309.1 priority reserve or provide exemptions under Rule 1304.

The SCAQMD readopted Rule 1315 in February in order to correct the deficiencies identified by the court. The agency conducted an environmental assessment to analyze air quality and other environmental impacts from the use of AQMD's emission offsets. The environmental assessment was approved by AQMD when it re-adopted its Rule 1315, which establishes a system for tracking emission offsets use. The court has now ruled that the District has complied with all of the provisions of the California Environmental Quality Act (CEQA), as well as the provisions of the prior order. In the order, the court rejected arguments by environmental groups that claimed AQMD did not adequately address issues raised in the original decision. The plaintiffs may appeal the decision. As part of the effort to void the original court ruling against the District, the agency lobbied the state Legislature in 2009 to adopt SB 827, which gave AQMD a temporary window to again issue permits while addressing issues raised by the 2007 lawsuit. AQMD was able to resume issuing permits on Jan. 1, 2010. According to the agency, had the court not granted AQMD's recent motion, AQMD's ability to issue permits under SB 827 would have ended on May 1, 2012. Rule 1315 must still be approved by the U.S. Environmental Protection Agency.

State and federal trial and appeals courts have dismissed two other lawsuits by environmental organizations challenging AQMD's use of emission offsets.

 

NEW STATE LAW ON DISPOSAL OF ARCHITECTURAL PAINTS

Assembly Bill 408, legislation dealing with procedures for collection, recycling and disposal of architectural paints, was recently signed into state law. The law allows a location that accepts recyclable latex paint to also accept oil-based paint. It imposes additional requirements upon the collection of recyclable latex paint. The law requires a person to recycle, treat, store, or dispose of oil-based paint only at a facility that is authorized by the state pursuant to the applicable hazardous waste facilities permit requirements or at an out-of-state facility. The industry-sponsored legislation is seen as a first step towards a national industry-operated system for the end-of-life management of architectural paint.

 

DTSC GREEN CHEMISTRY INITIATIVE

The Department of Toxic Substances Control proposed the Safer Consumer Product Regulations in an attempt to reduce the amount of toxics in consumer products. The agency slowed down the rulemaking after receiving criticism from stakeholders. A new version of the regulation is expected sometime next year after the close of public comments, which is scheduled for December 30, 2011.

The current proposal includes shorter timeframes for identifying chemicals of concern and the scope of the program is expanded. The proposed regulations would immediately establish a list of chemicals of concern composed of more than 3,000 substances based on the work already completed by several authoritative bodies. The prior proposal only targeted 800 chemicals. DTSC is also proposing expanding the primary responsibility for compliance beyond manufacturers to include product designers and U.S. importers. Only products containing less than 0.01 percent of a hazardous chemical would be exempted from the regulations, rather than the one-tenth of 1 percent, as previously proposed.

 

RULE 1470 AMENDMENTS POSTPONED

The South Coast Air Quality Management District board held a public hearing to consider amendments to Rule 1470— Requirements for Stationary Diesel-Fueled Internal Combustion and Other Compression Ignition Engines. The District staff proposed the amendments after concluding that when installed, operated and maintained properly, Diesel Particulate Filters (DPF) are a reliable and effective technology to reduce diesel Particulate Matter emissions from stationary emergency standby engines.

Significant opposition to the amendments was expressed by industry groups who were concerned with the high cost of retrofitting the engines and the risk of failure of the generators due to the addition of the filters. The industry's position was that the small emission reductions associated with DPFs did not merit the control cost and the risk of engine failure. Board members commented that adding further complexity to the engines creates the potential for failures and suggested that a solution to address the small number of generators in question could be reached in a manner that lowers risk and does not place an undue financial burden on municipalities and businesses.
The board referred the proposed amended rule 1470 back to staff for further review and investigation.

 

CHANGE FOR COMPOSITES WOOD PRODUCTS REGULATIONS

The California Air Resources Board (ARB) staff has revised the enforcement of the sell-through date that affects new manufactured homes (e.g., mobile homes) that contain pre-Phase 1 medium density fiberboard (MDF) and/or thin MDF. These homes may be sold for an unlimited period of time in California, as long as the MDF and/or thin MDF were produced before January 1, 2009, and businesses provide certain information to ARB by January 1, 2012.

 

GREENHOUSE GAS REPORTING RULES

The U.S. Environmental Protection Agency has recently provided a one-time extension of the reporting deadline to September 28, 2012 for any entity that reports under the following source categories:
• Electronics Manufacturing (Subpart I)
• Fluorinated Gas Production (Subpart L)
• Magnesium Production (Subpart T)
• Petroleum and Natural Gas Systems (Subpart W)
• Use of Electric Transmission and Distribution Equipment (Subpart DD)
• Underground Coal Mines (Subpart FF)
• Industrial Wastewater Treatment (Subpart II)
• Imports and Exports of Equipment Pre–charged with Fluorinated GHGs or Containing Fluorinated GHGs in Closed–cell Foams (Subpart QQ)
• Carbon Dioxide Injection and Geologic Sequestration (Subpart RR)
• Manufacture of Electric Transmission and Distribution (subpart SS)
• Industrial Waste Landfills (Subpart TT)
• Injection of Carbon Dioxide (Subpart UU)
For the EPA, 2011 is the first year for data collection. The agency reports that it is extending the reporting deadline "to ensure that there is sufficient time for development and stakeholder testing of the electronic GHG reporting tool."
On the state front, ARB has made changes to GHG regulations, which will become effective by January 1, 2012. The deadline for reporting 2011 emissions is either April 1 or June 1, 2012, depending on the type of industry.

 

JUDGE ISSUES DECISION ON CARB'S AB32

Portions of the California Air Resources Board AB32 (Greenhouse Gas regulation) were challenged by a coalition of environmental groups. In the case Association of Irritated Residents vs. CARB, plaintiffs alleged improper interpretation of AB32, failure to comply with AB32 and violations of CEQA by CARB. The court ruled in favor of CARB on the first two issues but in favor of the plaintiffs on the CEQA issue. The court found that CARB had inadequately analyzed CEQA alternatives to the Cap & Trade program within the Scoping Plan such as carbon taxes or fees and additions to the command and control program. CARB was found in violation of CEQA when it improperly approved the plan before reviewing responses to comments. The court stated that CARB "seeks to create a fait accompli by premature establishment of a Cap & Trade program before alternatives can be exposed to public comment and properly evaluated by the CARB itself," that CARB's "analysis provides no evidence to support its chosen approach," and its action "undermines CEQA's goal of informed decision-making." The judge ordered CARB to set aside its Functional Equivalent Document (FED) and enjoining any implementation of the Scoping Plan until it demonstrates full compliance with CEQA.

 

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