Part II: Wasting away the treasure chest—the on-going saga of the EPA’s stab to regulate secondary materials under the Clean Air Act

By Max Lee, Ph.D., Angela Morrison and Carl Eldred

In Part I of this series, we covered the basics of the U.S. Environmental Protection Agency’s (EPA) new rule titled “The Identification of Non-Hazardous Secondary Materials [NHSM] that are Solid Waste” (40 CFR 241) (See C&D World, May/June 2011). This rule continues to cause a severe uproar with nearly every industry and while the EPA has recognized this and wants to address the concerns being raised, the EPA’s current plan is to issue guidance documents and what it calls “comfort letters.” Industry would prefer formal revisions to the rule and is pursuing several different angles to achieve that approach including a petition for reconsideration, a formal challenge of the rule, and proposed federal legislation. This article explores industry’s concerns and these efforts for improvement.

By way of background, industry is concerned for two primary reasons. The NHSM rule changes the method for determining if a secondary material, such as C&D wood-derived fuel (C&Dwdf), is indeed a waste for purposes of the federal Clean Air Act by applying the methodology used for hazardous waste regulation—which has pitfalls. Second, if the secondary material (e.g., C&Dwdf) is determined to be a waste and that waste is combusted or used like a raw material, then that combustor or user is regulated for air pollutant emissions as a solid waste “incinerator” (i.e., commercial industrial solid waste incinerator (CISWI)).

Beyond the stigma that boilers or kilns now could be called waste incinerators, the newly revised air regulations for waste incinerators¹ are more stringent and not well thought out for implementation. The EPA has stayed the effective date of the new CISWI rule until at least October 2011. The effective date of the NHSM rule, however, was not stayed and has immediate implications. We covered the basics of the NHSM rule in the prior article, and laid out many questions and potential pitfalls for both the regulated and the regulators. Since then, the EPA has acknowledged some of the rule’s shortcomings, although there has been little clarification and the tangled regulatory webs continue to be woven.

 

Confusing Language
As explained in more detail in Part I, clean cellulosic biomass that has contaminant levels comparable to virgin wood is considered to be a traditional fuel and not a waste. Other cellulosic biomass (such as C&Dwdf) must meet certain criteria, including sufficient processing, such as sizing or chipping and the removal of metals and other non-combustibles. In addition, the contaminant levels of the C&Dwdf must be “comparable in concentration to or lower than those in traditional fuels which the combustion unit is designed to burn.” 40 CFR § 241.3 (d)(1)(iii).

 

1)            What is a contaminant?
The preamble and the rule are unclear as to whether the contaminants are the material constituents in the fuel prior to burning or in the air emissions that result from the burning of the fuel. There are several inconsistencies in the rule, and while it makes more sense to consider air emissions resulting from fuel combustion, most of the rule language focuses on only contaminants in the fuel itself. Industry coalitions have been pushing the EPA to consider air emissions. For example, if a constituent is present in a secondary material but the combustion of that material will not result in emissions of that constituent or in higher emissions of that constituent, then that constituent should not be considered when making a legitimacy determination.

 

2)            What is “comparable to or lower than”?
The EPA has provided many variations of what is meant by “comparable to or lower than.” The inconsistencies are obvious. The EPA states this term means any contaminants present that are “within a small acceptable range”² although the examples provided by the EPA do not provide much guidance. As shown in Table 1, the percent difference considered comparable varies greatly from pollutant to pollutant without explanation or clear rationale.

Furthermore, the EPA is unclear on just how many samples to compare, what methods should be used for analysis, and the total number of contaminants to compare. The EPA is also unclear on whether the comparison is to be made for each individual contaminant or by groups of contaminants. The EPA’s Concept Paper, described in more detail below, indicates there are essentially three categories of traditional fuels for purposes of contaminant comparisons—solid, liquid and gaseous, although that was not clear from the rule or preamble statements.

While the industry is pushing for the comparison to be based on the highest contaminant level from the available data, the EPA has also suggested it may be appropriate to consider the 90th percentile of the available data (also not included in the rule or preamble). If that were the case, then 10% of the traditional fuels would not meet the test. The EPA, with industry help, is continuing to gather more data on contaminant levels, and the Concept Paper indicates facility-specific data will also be acceptable. In addition, while the preamble to the final rule indicates that each individual contaminant is to be compared, the Concept Paper indicates it may be acceptable to group contaminants for the comparison (e.g., compare non-volatilized metals as a group). Obviously the final EPA guidance on these issues will help, but confusion and uncertainty is likely to remain.

 

3)            How to define the fuels for which the combustion unit is “designed to burn”?
Another controversial issue associated with the legitimacy criteria is determining what “designed to burn” means. All traditional fuels that a unit is “designed to burn” may be compared to the fuel derived from NHSM. The EPA’s statements in the preamble to the final and proposed rule language did not elaborate on what is meant, although the EPA has more recently stated in a footnote in a letter from June 2011 that “[a] unit designed to burn coal is one that would not require extensive modifications and retrofitting to burn coal.”³

This is contrary, however, to interpretation of the term “designed” under the Clean Air Act (CAA). For almost four decades, the EPA has interpreted “design” to refer to the inherent design of a unit, not whether the existing facility is currently “capable” of accommodating a fuel. The EPA has specifically differentiated between design and current facility capabilities. Even when different fuel handling equipment such as retrofits or physical changes are needed to burn a different fuel, and even if there is a large expense associated with this work, if the original blueprints or construction specifications of the unit would have accommodated the fuel, then the unit is deemed to have been “designed” to accommodate the fuel.⁴ While the unit might not be currently “capable” of accommodating the fuel, the EPA has always distinguished capabilities from design under the CAA. Because the approach, recently mentioned in the footnote, would be such a departure from the CAA interpretation of the same term, the industry will pursue this further with the EPA.

 

Convoluted History of NHSM
To get a better appreciation of why the NHSM rule is so confusing, it is necessary to look at the history of the rulemaking and the provisions on which it is modeled. The federal Clean Air Act of 1970 set in motion a number of regulations to limit air pollution from large combustion operations. Section 129 of the CAA establishes the framework for the regulation of new and existing “solid waste incineration units,” defined as “any unit combusting any solid waste material from commercial or industrial establishments or the general public.” Section 129 requires the EPA to set air pollution emission standards for nine different air pollutants.

To set these standards, the EPA established categories under Section 129 for municipal waste combustors, commercial and industrial solid waste incineration (CISWI) units, and sewage sludge incineration units. The EPA regulated other categories, including industrial boilers, utility boilers and cement kilns, under two separate sections of the CAA, Section 111, for criteria pollutants (known as New Source Performance Standards or NSPS) and under Section 112 for hazardous air pollutants (known as National Emissions Standards for Hazardous Air Pollutants or NESHAP, or Maximum Achievable Control Technology or MACT).

In 1990, when Congress overhauled the CAA, the EPA was directed to establish emission standards for solid waste incineration units, de-fined as those units that combust “non-hazardous solid waste.” CAA §129 (g)(1). The CAA does not contain a definition of solid waste, but instead refers to RCRA for the definition. CAA §129 (g)(6).

When the EPA first promulgated regulations establishing emission standards for CISWI units in 2000, rather than determining what constitutes a non-hazardous solid waste, the rule sought to define CISWI units as any unit using solid waste that did not recover energy. This was eventually challenged on the premise that the unit could be used for energy recovery and destruction of solid waste and not be a CISWI unit. Under pressure from the court, the EPA decided to remand its own rule following litigation and in September 2005 published a revised rule. The 2005 rule maintained the definition of a CISWI unit based on whether the unit was capable of energy recovery. In 2007, the D.C. Circuit Court vacated the definition of a CISWI combustion unit⁵ explaining the definition of the combustion unit should be for combustion of any solid waste, regardless of energy recovery. Consequently, the EPA had to go back to the drawing board and identify solid wastes that had to be burned in a CISWI unit, and those materials that could be used in a boiler.

 

Hazardous Waste—Carving Out Solid Waste
RCRA defines solid waste to include garbage, refuse, various sludges, and “any discarded material.” (40 CFR Part 262) Because the regulation of solid waste has largely been undertaken by the states the EPA has only promulgated regulations interpreting the term “discarded material” in the context of hazardous wastes (which are a subset of solid wastes). Unsurprisingly, the EPA has interpreted the term broadly and has included wastes that are ultimately recycled. 40 CFR § 262.2. Recycled wastes are then exempted out if they are recycled in a specific manner. These exemptions include the use of a secondary material as an ingredient in a process to make a product, as an effective substitute for commercial products, or the reuse and return of the material to the original process from which it was generated. 40 CFR § 261.2(e). These exclusions, with minor variations, were incorporated into the NHSM rule.

However, there is a large disconnect, substantively, between the Part 262 definition and the NHSM rule. Part 262 sets forth the regulations applicable to hazardous wastes. Because hazardous wastes are a subset of solid wastes, the definition of solid waste in Part 262 determines whether a secondary material is subject to hazardous waste regulation. If a secondary material is exempt from the Part 262 definition of solid waste by virtue of one of the recycling exclusions, the secondary material is not subject to hazardous waste regulation even though it may still be “hazardous.”

As such, the storage and management of the hazardous secondary material prior to recycling, and the management and disposition of the end product of the recycling process, are free from regulation. For this reason, the recycling exemptions are very limited to protect against potential mismanagement and associated impacts to human health and the environment. The NHSM definition, however, deals only with non-hazardous secondary materials which do not pose the same potential risks to human health or the environment. As a result, the recycling and reuse of NHSM should not be limited in the same manner as hazardous secondary materials.

The purpose of the NHSM rule is also markedly different from that of the Part 262 definition. The purpose of the NHSM rule is simply to determine whether a secondary material should be subject to one set of air emission standards versus another. Unlike the recycling of hazardous secondary materials under Part 262, the combustion of the non-hazardous secondary materials will be regulated extensively and subject to permitting. The limitations inherent in the Part 262 definition, therefore, are not necessary in the context of the NHSM rule.

Lastly, there are the legitimacy factors. Similar factors were developed under RCRA in the 1980s to distinguish between legitimate recycling and sham recycling of hazardous waste. These factors were set out in a memorandum authored by Sylvia Lowrance, director of EPA Office of Solid Waste, dated April 26, 1989. Although the memorandum specifically addressed the recycling of hazardous electroplating sludges as an ingredient in the manufacture of aggregate and cement, and as a feedstock for a metals recovery smelter, it has often been cited by the EPA when evaluating the legitimacy of a hazardous secondary material recycling activity, and was cited also in the preamble to the NHSM rule.⁶

When developing the legitimacy factors, the EPA was concerned facilities would evade hazardous waste regulations by claiming they were recycling hazardous materials, when in fact they were disposing of them. This concern, however, is not necessarily as relevant in the context of NHSM, again due to the ongoing regulation of NHSM by air emissions permitting.

 

Hazardous Waste—Comparing Hazardous & Solid Waste
As mentioned above, RCRA left regulation of solid waste largely in the hands of the states due to the existing solid waste infrastructure at the state level, the relatively benign nature in comparison to hazardous waste and the sheer volume of solid waste. Hazardous waste generation in 2007 was 27.8 million tons of which 6.5% (1.8 million tons) was combusted for energy recovery.⁷ In comparison, municipal solid waste generation in 2007 was 254 million tons⁸ of which 12.6 % (31.9 million tons) was combusted for energy recovery. And municipal solid waste does not include many other NHSM, such as C&D materials and various industrial byproducts (e.g., ethanol fermentation byproducts). Clearly, the volumes of NHSM are much greater than just municipal solid waste. So, when the EPA looks to apply RCRA hazardous waste criteria on NHSM, the amount of material and the number of impacted industries is far greater and this application is coming under much greater scrutiny for industries that have not their secondary materials under regulation like the RCRA hazardous waste program.

 

Industry Opposition & Challenge
Numerous industries have formed coalitions to address their concerns with the NHSM rule in a four-pronged strategy:

1. 1) Petitions to the EPA
2. 2) Litigation in the Courts
3. 3) Congressional Action
4. 4) Negotiations with the EPA

The list of concerned groups is in the hundreds and includes groups such as the Construction Materials Recycling Association, the U.S. Chamber of Commerce, the American Chemical Council and the American Petroleum Institute. The main concern, as mentioned above, is the contaminant comparison.

Petitions to EPA—Numerous groups submitted petitions by the deadline of May 20, 2011, under the procedures of the Administrative Procedures Act for the EPA to delay the effective date of the NHSM rule where “justice so requires” due to the intimate tie between CISWI and the Boiler MACT (both stayed rules) and the ambiguities of the NHSM rule. As of the date of this article, the EPA has not responded to these petitions.

Litigation in the Courts—Many of these same groups and the individual companies sued the EPA in the U.S. Circuit Court of Appeals for the District of Columbia challenging the NHSM rule. These suits were consolidated into one action (Waste Management Inc. v. EPA, Case 11-1148). The case is still in the early stages and written briefs have not yet been filed.

Congressional Action—The U.S. House and Senate have introduced two bills, HR2250 (introduced June 28) and S1392 (introduced July 21). If enacted, these bills would essentially “trump” the rules previously issued by the EPA, including the NHSM rule, the Boiler MACTs and CISWI.

Furthermore, as drafted the bills direct the EPA Administrator to re-propose these regulations to categorically exempt secondary materials from the definition of solid waste, provided they are combusted for energy recovery. As well, the bills specify that contained gas material is defined as in the 2000 version of CISWI, clarifying, consistent with RCRA, that gas in a pipeline such as landfill gas is not “contained gas” and is therefore not a solid waste. Without this revision, landfill gas must satisfy all of the legitimacy criteria to avoid being considered a solid waste. Given the wrangling of the U.S. Congress with the raising of the U.S. debt limit, these bills are not expected to move forward until later this fall.

Meeting/discussions with the EPA—In an effort to work with industry to address their concerns, the EPA has begun to issue “comfort letters” and has developed a Concept Paper for future formal guidance on how to conduct the contaminant comparison.⁹ The EPA has issued four such “comfort letters” that are available on the EPA website under “Related Guidance/Rule Clarification.”¹⁰ The RCRA program over the years has issued comfort letters as a means to address specific situations of materials in question for which the legitimacy criteria were under scrutiny and in question. Given the much greater volume and variety of materials under consideration, industry sees comfort letters as a near impossible regulatory tool to address implementation issues under the new NHSM rule and one fraught with numerous legal pitfalls given the contradictory and confusing statements (some statements are mentioned above) within the NHSM rule.

As mentioned above, two of the key provisions of the Concept Paper include the EPA’s stated intent to use all available data for traditional fuel contaminants and to clarify how the NHSM data could be compared to traditional fuels using common statistical methods. The EPA expects to continually update its traditional fuels data and has invited industry to submit relevant data to be considered.

Proposed Comparison—In its Concept Paper, the EPA outlines the following issues that are expected to be addressed in the formal guidance to be issued later this year:

• Traditional fuels may be consolidated into three categories: solid, liquid and gaseous fuels.
• EPA may use simplified surrogate measurements for the large number compounds on the hazardous air pollutant (HAP) list (e.g., volatile organic compounds (VOCs), total organic halogens, volatile metals, semi-volatile metals, others).
• EPA notes it could be impractical to identify and quantify every individual compound that may result in air emissions.
• The comparison may be allowed for groups of contaminants, not individual contaminants.
• The comparison could be by either direct measurements or by “knowledge” of the owner/operator.
• EPA may provide comfort letters for types of combustors and for categories of NHSMs.

In the EPA’s development of the Concept Paper, the disconnect of comparing the material content of traditional fuels and NHSMs for contaminants that are from the list of 188 HAPS and the nine Section 129 pollutants has come to light. (See Part I: The Disconnect for “What is a Contami-nant”?) This disconnect becomes blatant when reviewing the list of 188 HAPs, many of which are not related to combustion, such as pesticides (lindane, chlordane) or chemical process (e.g., di-isocyanates). The EPA is wrestling with how to issue guidance to compare contaminants for which the released air pollutants do not correlate to the NHSM contaminants. The formal guidance document is expected to be issued by the EPA later this year.

The industry coalitions argue the conceptual approach is a significant change to the NHSM rule legitimacy criteria. Under the Administrative Procedure Act, the EPA rules must undergo public notice and comment for a material change. At the coalition meetings with the EPA, industry has argued the best approach to avoid legal ambiguity in the future is to formally revise the rule language. For whatever reason, the EPA seems insistent upon using guidance documents rather than rule changes to address recognized deficiencies in the rule.

 

Closing Comments
The EPA, with its hand played out, used a rule to identify hazardous wastes as the model for a rule to identify whether non-hazardous secondary materials constitute solid waste. As explained above, this approach is fraught with pitfalls, not least of which is the “Contaminant Comparison” and how to conduct such a comparison. Industry is taking four approaches described above to address its concerns. The petitions and litigation are on track and further steps are expected. The EPA has issued only seven “comfort letters” since the rule was issued in March. That equates to about one comfort letter per month which as seen as a bandaid where a tourniquet is needed. In addition, these comfort letters are potentially on legally shaky ground.

The EPA Concept Paper includes no details for how to conduct a contaminant comparison—that remains to be seen in the formal guidance yet to be issued. The general concern of industry is that “rules by guidance documents” have been thrown out by the courts.¹¹ The Major Source Boiler MACT and CISWI rule, which were recently stayed, are to be re-proposed by November 2011 and finalized by April 2012. The Area Source Boiler MACT was not stayed, and these sources must now determine if their materials are solid waste. Industry is hoping a U.S. congressional act will essentially overturn the D.C. Circuit Court of Appeals 2007 decision that required EPA to vacate the original CISWI rule, allowing EPA to reinstate that rule and allowing material used as a fuel to be considered a fuel (and not a waste).

An old adage spells out basic economics of supply and demand, someone’s junk is another’s treasure. Thirty five years ago, Congress recognized our waste is our treasure chest. Thirty five years later, we are looking into a future of solid waste management blatantly contrary to these principles—extinguishing the energy for resource recovery and conservation.

 

Footnotes
¹ CISWI, March 21, 2011, 76 Fed. Reg. 15456

² 76 Fed. Reg. at 15523

³ Letter from EPA Office of Solid Waste and Emergency Response to Trendgreen Associates LLC, June 30, 2011

⁴ Letter from EPA to Union Carbide Corp, March 15, 1974

⁵ Nat. Res. Def. Council v. EPA, 489 F.3d 1250 (D.C. Cir. 2007)

⁶ 76 Fed. Reg. at 15464

⁷ Quantity of RCRA Hazardous Waste Generated and Managed, www.epa.gov/wastes.

⁸ Municipal Solid Waste in The United States, Facts and Figures 2007 http://www.epa.gov/wastes/nonhaz/municipal/pubs/msw07-rpt.pdf

⁹ http://www.afandpa.org/Temp/News-releases/NHSMConceptPaper.pdf

¹⁰ http://www.epa.gov/epawaste/nonhaz/define/index.htm

¹¹ Gen. Elec. Co. v. EPA, 290 F.3d 377,383-84 (D.C. Cir. 2002), Nat’l Min. Ass’n v. Sec’y of Labor, 589 F.3d 1368, 1371 (11th Cir. 2009), and Appalachian Power Co. v. EPA, 208 F.3d 1015 (D.C. Cir. 2000)

 

About the Authors
Max Lee, Ph.D., P.E., is a principal engineer and president of Koogler & Associates, Inc., Gainesville, Fla. He can be reached at 352-377-5822; This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Angela Morrison and Carl Eldred are attorneys with Hopping Green & Sams, P.A., Tallahassee, Fla., and can be reached at 850-222-7500; This e-mail address is being protected from spambots. You need JavaScript enabled to view it and This e-mail address is being protected from spambots. You need JavaScript enabled to view it . The authors would like to thank Matt Tribby, Karl Seltzer and Kyle Ulmer with Koogler & Associates for their contributions.

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