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 all non-permitted emissions equal 4 tons or more per year of criteria pollutants (VOC, 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.

What if I miss the deadline?

The SCAQMD 2010 Annual Emissions Reports are due by March 1, 2011. 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

Recent changes

As of January 1, 2008, facilities are required to report emissions on a calendar year basis (from January 1 to December 31 of the reporting year). The District has a web based program now. The default emission factors for combustion sources are now available in all combustion forms (forms B1/B1U, B2/B2U, E1/E1U and R2). Some rounding problems have been corrected as well.

CALIFORNIA MANDATORY GREENHOUSE GAS REPORTING

The Greenhouse Gas program mandatory reporting became effective in January 2009. Major sources of GHG emissions must file annual emission reports with the State. Facilities shall submit complete emissions data reports to the ARB no later than April 1 of each calendar year beginning in 2009, for emissions occurring in the previous calendar year. Depending on the types of operation & industry, some reports are due on June 1. The reports will undergo a verification process beginning in 2010.

Facilities subject to the reporting include:

• Operators of power plants
• Cogeneration facilities
• Cement plants
• Refineries
• Hydrogen plants
• Retail providers and marketers of electricity
• General stationary combustion facilities emitting 25,000 metric tons of carbon dioxide in a calendar year

In mid December 2010, the ARB approved the regulations for the implementation of AB32 to reduce the State’s greenhouse gas emissions to 1990 levels by 2020. The adopted rules will implement a Cap-and-Trade program for sources responsible for 85% of California’s carbon (CO2) emissions. The program will begin in 2012 by capping emissions from major sources, including utilities and large industrial sources. Starting in 2015, transportation fuels will be phased into the program as well.

STATIONARY COMPRESSION IGNITION ENGINE AIR TOXIC CONTROL MEASURE UPDATE

The California Air Resources Board unanimously adopted amendments to the Stationary Compression Ignition Engine Air Toxic Control Measure (ATCM). The measure (title 17, CCR section 93115) originally adopted by ARB in 2004, applies to emergency standby engines as well as prime engines. The amendments primarily affect the requirements for new stationary diesel engines used in non-agricultural operations. ARB’s focus was to align the state regulations with the federal New Source Performance Standards (40 CFR Part 60 Subpart iiii — Standards of Performance for Stationary Compression Ignition Internal Combustion Engines).

Prior to the amendments, beginning in 2011, engine operators would have been required to purchase engines equipped with diesel particulate filters for PM control, and in some cases, also selective catalytic reductions systems for NOx control. In developing the federal requirements, the EPA staff concluded that after-treatment was not cost effective for emergency standby applications due to the low hours of operation. As a result, under federal law, engine manufacturers are not required to manufacture new emergency standby engines with after-treatment controls installed. ARB staff conducted their own study and is in agreement with the EPA in that the after-treatment requirement is not cost effective for engines that operate less than 50 hours per year. Therefore, ARB adopted the less stringent federal requirements.

Additionally, the following changes were made:

• The sell-through provision exemption is now limited to prime engines. This change essentially allows for a 2-year sell-through for engines when the new engine standards transition from one tier to the next.
• Any diesel engine that supplies power to an electric grid or that supplies power as part of a financial arrangement with any entity, except for those engines enrolled in a Demand Response Program (DRP) as defined in the ATCM, is NOT considered an emergency standby engine.
• Eliminate the existing requirement in the ATCM that would have required new emergency standby engines to meet the after-treatment based Tier 4 standards when they are more stringent than 0.15 g/bhp-hr.
• Require that any new emergency standby engine meet the 2007 model year or newer emissions limits in the Off-Road Standards for all pollutants. No changes are proposed to the restrictions on the hours of operation for maintenance and testing or to the provisions that allow Districts to impose more stringent requirements.
• Delay implementation of requirements (most engines) up to 3 years for stationary fire pump diesel engines. There are also special extensions for engines with greater than 2,650 revolutions per minute. The amendments will not require new emergency standby direct drive fire pump engines to meet Tier 4 after-treatment based standards. Rather, they will meet either Tier 2 or Tier 3 standards based on the horsepower and model year of the engine.
• ARB now exempts less than or equal to 50 HP direct drive fire pump engines from meeting the Off-Road Standards and instead relies on the federal NSPS requirements for these engines. Installing after-treatment based Tier 4 standards for new emergency standby engines that are less than or equal to 50 HP is no longer required.
• Removal of the ATCM provision that requires sellers and dealers of less than or equal to 50 HP stationary engines to annually report the number of engines sold to ARB.
• The owners or operators of emergency standby engines used in Demand Response Programs must now annually report information on engines and hours of operation to the local Districts and the Executive Officer of ARB.
• Local air Districts can require additional controls on stationary emergency standby engines whenever deemed necessary on a “site-specific basis” and under programs such as New Source Review and the Air Toxics “Hot Spots” Program (AB2588).

According to the agency, foregoing the application of after-treatment technologies such as DPF and SCR for new emergency standby engines results in cost savings of about $118 per HP. This translates to about $71,000 for a typical 600 HP emergency standby engine. ARB staff estimates that the total economic impact from the proposed amendments to the ATCM to affected private businesses and public agencies would be a cost saving of approximately $460 million between now and 2020, or about $46 million annually.

(See ATI Newsletter, Third Quarter 2010 for further background information)

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT METAL COATINGS RULE (RULE 1107)

The SCAQMD is proposing to amend their metal coatings rule in May of 2011. As part of the rulemaking effort, staff has held public consultation meetings to solicit technical information about the metal coatings industry. The metal coatings rule (1107) applies to:
“All metal coatings operations except those performed on aerospace assembly, magnet wire, marine craft, motor vehicle, metal container and coil coating operations. This rule does not apply to the coating of architectural components coated at the structure site or at a temporary unimproved location designated exclusively for the coating of structural components.”
According to SCAQMD:

• 55% of facilities are currently using coatings containing less than 1.0 lb VOC/gallon, which is the equivalent of 120 grams/liter;
• Powder coatings dominate the market.

The test method used to measure Volatile Organic Compounds (VOCs) will be revisited as the traditional method (EPA Method 24) may not be suitable for some low VOC products. The District has formed a subcommittee for their architectural coatings rule (Rule 1113) to deal with test method issues.
Staff proposes a “prohibition of sale” which means suppliers would be held accountable for selling noncompliant products. District staff commented that the purpose of the prohibition of sale language is to put the regulatory burden on the suppliers. Paint industry representatives have objected to the provision, arguing that suppliers would have to be in the precarious position of policing the end users.
The following table shows some of the categories under consideration:

PERMIT MORATORIUM DISPUTE UPDATE

The United States Environmental Protection Agency (EPA) Administrator Lisa Jackson has rejected a petition from several environmental organizations that sought to reinstate the previous permit moratorium. Under the moratorium (the result of a state court order) the SCAQMD could not issue certain types of permits to applicants who could not purchase offset credits. SCAQMD staff reported that if the plaintiffs challenge EPA’s decision, the matter will be heard in the 9th Circuit Court of Appeals.

The District is proposing to re-adopt Rule 1315, which has been revised to address concerns cited by a state court order. The rule is expected to go to the AQMD board for approval in January 2011. There are currently two power plant projects being challenged by environmental groups.

GREENHOUSE GAS ACTIONS

In June of this year, the Environmental Protection Agency promulgated a “tailoring rule” which established Best Available Control Technology (BACT) and permitting requirements for greenhouse gas emissions under Prevention of Significant Deterioration, and Title V programs. The SCAQMD adopted Rule 1714- Prevention of Significant Deterioration for Greenhouse Gases as well as amendments to the Title V regulation (Regulation XXX) to implement the federal provisions.

The EPA has formed a Clean Air Act Advisory Committee to provide advice to EPA on a variety of air quality policy issues, including issues and potential barriers to implementing the PSD program for greenhouse gases. A workgroup was formed to focus on BACT. It is expected that recommendations from the workgroup will provide permitting agencies information regarding the consideration of the energy, economic and environmental impacts of potential control options for greenhouse gases in the context of a BACT analysis.

At the congressional level, there are two companion bills [S. 372 (Rockefeller) and H.R. 4753 (Rahall)—Stationary Source Regulation Delay Act] that would suspend for a two-year period any EPA action regarding greenhouse gas regulations with respect to carbon dioxide or methane (except for motor vehicle emissions and reports or enforcement of reporting requirements).

Additionally, there is a court case pending, which may limit EPA’s ability to enforce the greenhouse gas permits.

EPA GHG REPORTS DUE IN MARCH 2011

The Environmental Protection Agency now requires reporting of greenhouse gas (GHG) emissions from large sources and suppliers in the United States. Approximately 10,000 facilities and suppliers are estimated to be subject to the GHG Reporting Program. The ruling was published at 40 CFR Part 98. According to EPA, the requirement “is intended to collect accurate and timely emissions data to inform future policy decisions.” Suppliers of fossil fuels or industrial GHGs, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to submit annual reports to the EPA. As of April 2010, EPA is requiring reporting of fluorinated GHGs. The gases covered in the April action included hydrofluorocarbons (HFCs), nitrogen trifluoride (NF3), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). EPA recently added a reporting requirement to facilities that perform geologic sequestration of carbon dioxide (CO2) and injection of CO2 underground. The rule requires reporters to begin monitoring on January 1, 2010. The first reports will be due on March 31, 2011 for emissions in calendar year 2010. Unlike ARB, the EPA does not require verifications of the emissions. The companies affected by this program will not be notified by the EPA to file these reports. They need to make the applicability determination on their own and prepare & file the reports, if needed.