AQMD OFFERS AMNESTY FOR UNPERMITTED EQUIPMENT

At their June board meeting, the SCAQMD adopted Rule 310.1 – Amnesty for Unpermitted Equipment and Small Business Discount for Control Equipment.

The rule creates an “amnesty period” from July 1, 2011 through December 31, 2011 that exempts owners and operators of unpermitted equipment (provided certain conditions are met) from civil and criminal penalties and late filing fees, if the necessary permit applications and fees are voluntarily filed and paid during the amnesty period. Equipment operating without a permit is normally subject to surcharges and the payment of up to three prior years’ annual operating fees.

The rule includes a fifty (50%) discount to incentivize the permitting of control equipment, or use of super-compliant coatings by small businesses, such that the total fee could be twenty five percent (25%) of the fee otherwise required by Rule 301, Table IA. According to the staff, this rule “implements Board direction to incentivize compliance and encourage emission reductions.”

The amnesty program does not relieve applicants from current rule requirements. Furthermore, the following situations would not exempt a source from paying late filing fees normally assessed, nor from civil or criminal penalties:

1. Title V facilities, unless the subject equipment qualifies as Schedule A, A1, or B in Table I, Rule 301- Permit Fees;
2. Violations of Rule 201 and/or 203(a) discovered by the District as the result of an investigation initiated by the District;
3. Violations of Rule 201 caused by construction of equipment for which an application for a permit to construct has been filed but a permit has not been issued.

RULE 1470 AMENDMENTS FOR DIESEL ENGINES

South Coast Air Quality Management District (SCAQMD) Rule 1470– Requirements for Stationary Diesel-Fueled Internal Combustion and Other Compression Ignition Engines– applies to new and in-use stationary diesel-fueled internal combustion (IC) and other compression ignition engines. The rule implements the CARB’s Airborne Toxic Control Measure (ATCM) for Stationary Compression Ignition Engines. The air district is proposing amendments to the rule with an objective “to reduce emissions of diesel PM and criteria pollutants from stationary engines.”

Equipment subject to the rule includes:

• Emergency standby engines
• Prime engines
• Agricultural engines

The proposal removes the requirement for Tier 4 NOx, hydrocarbon and carbon monoxide (CO) emissions for new emergency standby engines. Beginning with model year 2007, certification will be required depending on horsepower rating. Staff has concluded that Selective Catalytic Reduction is technically infeasible because the catalyst does not reach proper operating temperatures during short maintenance and testing sessions. New Emergency Standby Engines will also need to limit particulate matter emissions to less than 0.15 g/bhp-hr and if the cancer risk is over one in a million, an additional control strategy will have to be implemented. Staff has determined that the use of diesel particulate filter has been achieved in practice since 2005 and has been required for engines at or near schools since that time.

The existing PM emission limits for all prime engines will remain in effect. Rule 1470 will refer to Rule 1110.2 insofar as the emission limits for HC, NOx and CO. Rule 1110.2 emission limits for prime engines are more stringent than the Tier 4 standards. The proposal includes a new exemption for diesel engines used at research and development and educational facilities conducting testing on fuels, engine components and training. All requirements for agricultural engines will be removed and the Air Resources Board regulations will apply to those engines.

The rule is expected to go to the full SCAQMD board for adoption on September 9, 2011.

For a more comprehensive look at Rule 1470 requirements, please see ATI Newsletter, Second Quarter 2004: https://www.abatetech.com/secondqtr2004.htm

RULE 1113 – ARCHITECTURAL COATINGS

Despite indication from their own data that coating sales volumes are declining due to impacts of the region’s poor economy (particularly the local real estate market, which is the biggest driver for architectural coating usage) the South Coast Air Quality Management District adopted more stringent requirements on the industry and its customers. The total annualized cost of the amendments is projected to be $9.0 million.

Rule 1113 is applicable to manufacturers, distributors, specifiers and end-users of architectural coatings. These coatings are used to enhance the appearance of and to protect stationary structures and their appurtenances, including homes, office buildings, factories, pavements, curbs, roadways, racetracks, bridges, other structures and their appurtenances, on a variety of substrates. Architectural coatings are typically applied using brushes, rollers, or spray guns by homeowners, painting contractors and maintenance personnel. Under this rule, a homeowner is considered an end-user and would be subject to the rule’s requirements, including enforcement action by the district.

The amendments limit the allowable VOC content of previously unregulated colorants used to tint coatings at the point of sale, establishing VOC limits for certain new coating categories and reducing the allowable VOC content for several existing coating categories. The following table highlights some of the changes:

The district is removing some of the flexibilities of the Averaging Compliance Option (ACO) provision such as:

• Lower ceiling limits, effective upon Rule adoption;
• Limit coating categories that can be averaged, effective January 1, 2012;
• Eliminate the ACO completely, effective January 1, 2015.

The total annualized cost of the amendments is projected to be $9.0 million.

NEW SOURCE REVIEW AMENDMENTS

The South Coast Air Quality Management District recently adopted changes to Rule 1325 (New Source Review program). The rule amendments deal with federal requirements for particulate matter less than 2.5 micrometers in size (PM 2.5) with respect to the New Source Review Program.

In 2008 the U.S. Environmental Protection Agency (EPA) promulgated a rule amending New Source Review (NSR) regulations to establish the minimum requirements for state, local and tribal agency programs implementing NSR for PM2.5. In the final rule, U.S. EPA established the NSR provisions including the major source threshold, significant emissions rate, and offset ratios for PM2.5, inter-pollutant trading for offsets and applicability of NSR to PM2.5 and PM2.5 precursors (72 FR 20586).

Rule 1325 implements the requirements of EPA’s final rule for PM2.5 by mirroring the federal requirements. They include the definition of major source, significant emissions rate, offset ratios and the applicability requirements of LAER, facility compliance, offsets and control of PM2.5 precursors. Precursors for PM2.5 are NOx and SO2. A provision for plantwide applicability limits as required for federal NSR programs is also included.

Rule 1325 applies to the following sources:

• New facilities with emissions greater than 100 tons per year of PM2.5 or its
  precursors;
• Any existing facility with an increase of 100 tons per year or more of PM2.5 or its precursors;
• Major modifications at existing major sources (major modification thresholds are 10 tons per year of PM2.5 or 40 tons per year of NOx or SO2).

Some key requirements for sources subject to the proposed rule are as follows:

• LAER is employed for the new or relocated sources, or for the actual modification to an existing source;
• Emission increases are offset at a ratio of 1.1:1 for PM2.5. The offset ratio for NOx
  and SO2 shall be the ratio required under the applicable NSR rule (Regulation XIII or Rule 2005). Offsets must be either Emission Reduction Credits (ERCs) for non-RECLAIM pollutants or Reclaim Trading Credits (RTCs) for sources in the RECLAIM program for either NOx or SO2.
• Certification that all major sources, as defined in the jurisdiction where the facilities are located, that are owned or operated by such person (or by any entity controlling, controlled by, or under common control with such person) in the State of California are subject to emission limitations and are in compliance or on a schedule for compliance with all applicable emission limitations and standards under the Clean Air Act.
• An analysis conducted of alternative sites, sizes, production processes, and environmental control techniques for such proposed source and demonstration made that the benefits of the proposed project outweigh the environmental and social costs associated with that project.
• Any facility, with accumulated emission increases in excess of 100 tons per year of PM2.5 due to permit actions within any two-year period after the date of adoption of this rule shall offset the total emission increases during such period to zero. According to SCAQMD this is “an anti-piecemealing provision to prevent sources which currently emit less than 100 tons per year of PM2.5 from increasing more than 100 tons per year of PM2.5 without providing offsets by phasing the project.”

At this point, it is unclear as to how the air district will handle the distinction between PM2.5 and PM10 for purposes of issuing credits.

RULE 1147 – NOX REDUCTIONS FROM MISCELLANEOUS SOURCES

Proposed Amended Rule 1147 was expected to be presented by staff to the AQMD board for adoption in May of 2011. However, due to a rising controversy and opposition from industry on the proposal, the district has decided to delay the rulemaking. The rule applies to manufacturers, distributors and wholesalers of combustion equipment, as well as owners and operators of ovens, dryers, furnaces and other miscellaneous combustion equipment in the district.

According to district staff, the proposal will mandate emission reductions of 50 to 75 percent from ovens, dryers and furnaces by imposing a stricter NOx emission limit of 30 ppm (the current limit is 60 ppm at 3% oxygen). Staff estimated that approximately 6,600 units (located at 3,000 facilities) would be subject to the emission limits of Rule 1147. About 2,200 facilities are expected to require retrofit of burners in their equipment. As many as 2,500 permitted units with NOx emission limits greater than one pound per day and an additional 2,500 permitted units with NOx emission limits of less than one pound per day will require modifications to comply with the emission limits.

The current proposal has effective dates beginning as early as 2012 for some equipment and up to 15 years from the date of the equipment manufacture for units that were manufactured after 1997. Staff has been directed by board members to work with stakeholders and modify the proposal in order to address some of the industry’s concerns.

CHANGES FOR METAL COATINGS (RULE 1107)

Rule 1107—Coating of Metal Parts and Products— applies to metal coatings operations other than those performed on aerospace assembly, magnet wire, marine craft, motor vehicle, metal container and coil coating operations. Typical facilities include metal furniture manufacturers, fabricated metal product manufacturers, small and large appliance manufacturers, metal finishers and the paint and coating manufacturers that supply products to the metal manufacturing shops. The amended rule is tentatively scheduled to go before the board for adoption on September 9, 2011.
The following table highlights some of the proposed changes: