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OAR Box 1384 

Prepped by Charmelle Mathews 

Document Number: 

82) ll-E-42 

Docket Number: 

A-94-52 

Printed 7/2/2008 8:42:05 AM Sheet 82 of 264 
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A-94-52 

MEMORANDUM 

TO: Madeleine Strum 

U.S. EPA/ESD/CCPG 

FROM: Greg LaFlam 

Pacific Environmental Services, Inc. (PES) 

DATE: May 24, 1996 

P:\N404 

SUBJECT: Minutes of April 26, 1996 Meeting Between the EPA and the SPI 

Composites Institute 

LOCATION: EPA/Mutual Building, Durham, NC, room 1108, 

1:20 pm-2:30 pm 

ATTENDEES: 

Ms. Linda Chappell 

Mr. Tyler Fox 

Ms. Leslye Fraser 

Ms. Linda Herring 

Mr. Bruce Jordan 

Mr. Greg LaFlam 

Mr. Ken Meardon 

Mr. John Schweitzer 

Ms. Madeleine Strum 

PURPOSE 

EPA/ESD 

RTI 

EPA/OGC 

EPA/ESD 

EPA/ESD 

PES 

PES 

Comp. Institute 

EPA/ESD 

(919) 541-2864 

(919) 541-6955 

(202) 260-7609 

(919) 541-5358 

(919) 541-5572 

(919) 941-0333 

(919) 941-0333 

(313) 668-4703 

(919) 541-2383 

The purpose of the meeting was to discuss options for addressing the concerns 

raised in John Schweitzer's fax of April 1, 1996. The concerns were raised over the 

EPA's approach for determining maximum achievable control technology (MACT) floors 

for the reinforced plastic composites source category. 

DISCUSSION 

Mr. Schweitzer presented his organization's reaction to me industry subcategories 

and MACT floor determinations that the EPA had previously discussed at a March 20, 

1996 meeting of the P-MACT project team (Mr. Schweitzer's presentation package 

included as an attachment to this memo). He began by stating that control equipment is 
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Madeleine Strum 

May 24, 1996 

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economically infeasible for many open molding facilities. He said that these facilities can 

often start up for a capital investment as low as $10,000-$15,000, and many facilities will 

not be built if there is a requirement to install an incinerator because it will make the 

operation unprofitable. Ms. Strum pointed out that, while the 95 percent reduction level 

of the new source MACT floor is based on a facility using incineration, other devices may 

be less expensive and would be acceptable if they met the efficiency requirement. Mr. 

Jordan asked how facilities that presently have control equipment can afford it. Mr. 

Schweitzer said that these facilities are part of large companies that are able to spread the 

cost among all of their operations. 

In discussing Mr. Schweitzer's three alternative "solutions" to regulating this 

industry, EPA staff pointed out that they did not have the freedom to abandon or modify 

the MACT floor requirements in the Clean Air Act. However, subcategorization is 

certainly a valid approach and is consistent with the Act. Mr. Jordan asked whemer there 

is a technical dividing line that would allow further subcategorization of the industry. He 

stressed that the EPA is not legally able to use costs and economic considerations as 

criteria in forming subcategories. Mr. Schweitzer said that ideally there are dozens of 

subcategories, but specifying this level of detail in a regulation would be impractical and 

the industry is not advocating this solution. He said that collocation of different types of 

processes (such as pultrusion and painting) could make facilities different technically and 

qualify them for inclusion in a separate subcategory. Mr. Jordan said mat the EPA would 

discuss collocation internally in terms of its effects on the subcategories and floor determinations. Ms. Fraser agreed that process collocation could potentially serve as a basis for 

subcategorization if there were technical factors differentiating such facilities. Ms. Strum 

brought up the situation in which a facility previously had collocated processes or where 

additional processes were later added to an original process (this applies to at least one of 

the floor-setting facilities in the data base). She felt that, if controls were originally 

installed on a composite process, the addition of a process such as painting to the control 

scenario should not impact the inclusion of this facility with others that perform the same 

composite process. 

The group also addressed the issue of facility size (i.e., resin consumption or 

production rate) as an additional means of developing industry subcategories. Both Mr. 

Jordan and Ms. Fraser stated that subcategories based on size would be a valid way to 

determine appropriate MACT levels for the industry; however, Mr. Jordan reiterated that 

these size splits could not be based on economic arguments. Ms. Strum pointed out that 

the 95 percent new source MACT control level for open molders would apply only to the 

larger facilities if the MACT floor analysis were carried out on the basis of facility size. 

The EPA said that it had looked into the issue of corrosion-resistant resins/products 

as a technical distinction in analyzing control measures and determining floors. Mr. 

LaFlam pointed out that corrosion resistance represents a spectrum, making it difficult to 

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Madeleine Strum 

May 24, 1996 

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clearly define a distinction between corrosion-resistant and noncorrosion-resistant products. 

Mr. Schweitzer agreed, and said that the most promising definition would probably be 

stated in terms of the end-products manufactured (e.g., chemical tanks and piping, etc.). 

He said he would consult his membership to develop a definition for corrosion-resistant 

products and provide it to the EPA for its consideration. 

ACTION ITEMS 

The EPA said that it would consider the issue of process collocation and continue 

to analyze various means of industry subcategorization. Mr. Schweitzer said that he would 

provide more specific details on the issue of corrosion resistance, including a definition 

that will serve to distinguish processes that may warrant consideration as a separate 

subcategory. 

Attachment 

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Regulating tha Composites Industry 

Under CAA Section 112 

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Presentation to 

US EPA OAQPS Emission Standards Division 

April 26,1996 

John Schweitzer 

SPI Composites Institute 
\ MACT &ae\ce 

o CAA Section 112 requires EPA t o establish Maximum Achievable 

Control Technology etandarde for Major Sources of Hazardous Air 

Pollutants. 

o MACT requirements are to be a t least as stringent as the MACT 

Floors. 

The MACT Floor for New Sources is based on the best controlled source in 

the category or subcategory. 

$ - The Floor for Existing Sources is based on the average control achieved by 

« the best controlled 12% of facilities in the category or subcategory (or 

B \J~[ average of best 5 facilities in categories or subcategories with fewer than 

3 3 0 sources). 

I o Congress assumed that the Floors ara inherently achievable, since, 

by definition, a t least one source in the category or subcategory 

currently achieves the Floor. 

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Composites Industry 

o The composites industry is very complex and diverse, with dozens 

of different processes, hundreds of different raw materials, and 

thousands of different products. 

o There are many additional facility-specific factors, Independent of 

tha proceee/material/product combinations, such as size of 

facility, profitability, custom vs. standardized products, batch vs. 

continuous processing, presence of other processes and emission 

controls, etc. 

o Identifying the most effective feasible control for a given source 

will depend heavily on tha unique combination of process, material, 

product, and facility-specific factors. 

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I MACT Floor maats Compositas 

o The CAA MACT Floor process assumes relatively homogeneous 

categories or subcategories. However, the composites industry 

has little similarity among sources. • 

o Consequently, the MACT Floor process does not yield effective and 

affordable control requirements for tha composites industry. 

MACT Floors are not inherently achievable. 

3 - In the most recent teleconference of the Pre-MACT work group, several 

1 state participants noted tha t they approach composite facilities on a case-

| ] by-case basis. These state regulators did not believe that a one-size-fits-all 

approach could work for the composites industry, even with the proposed 

subcategorization. , 

o The composites industry is not in favor of setting MACT 

standards on a case-by-case basis, due to the high costs, 

administrative burden, and uncertainty of this approach. 

o The industry wants to work with EPA t o achieve a MACT standard 

| tha t is timely, effective, enforceable, and affordable. 

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I Status of Compositas MACT 

o The industry has been divided into subcategories, based on 

process, 

o Data from a 1993 survey and other sources was used to rank 

facilities in each subcategory according to degree of emission 

control. 

O Within each subcategory, Existing Source Floors have been 

5 tentatively set based on the average level of control achieved by 

I the best controlled 127*. of sources (or average of bast 5 sources 

£ <3 for subcategories with fewer than 30 sources). 

| O New Source Floors have been tentatively sat based on tha level of 

_ control achieved by the best controlled source in each 

subcategory. 

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| Status of Composites MACT (continued) 

o Several of the tentative Floors are above the maximum achievable 

control, and/or represent levels of control not in proportion to 

actual emissions. For example: 

The New Source Floor for open molding is based on Incineration, but the vast 

majority of likely new open molding sources will not be able to afford 

Incinerators or achieve the same level of control through some other means. 

The New Source Floor for SMC compounding, BMC compounding, and 

8 pultrusion are all based on Incineration, and yet these are all low-emitting 

s processes. (EPA's Jim 3erry recently characterized these sources a s 

I f "gnats.'1) The cost to abate the emissions from these sources will exceed 

| $25,000 per ton. 

_ - The Existing Source Ftoor for pultrusion is based on the use of injectors or 

total covers, but there are many products where neither Injectors nor total 

covers can be used. 

The tentative Existing Source Floor for open molding is based on the use of 

filled resin systems or suppressants (among other source reduction 

1 techniques). However, fillers and suppressants may not be used In many 

applications, such as corrosion resistant equipment, or products needing 

I very high strength or high resistance to delamination. 

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I MACT Floor Objectives 

o The Floors should provide a basis for setting MACT standards 

tha t are effective in reducing emissions, are enforceable, and are 

affordable by industry. 

o The Floors should result in a standard that honors the intent of 

CAA Section 112. 

CAA Sect. 112(d)(2) reads: "Emission standards ... shall required the 

_ maximum degree of reduction In emissions ... tha t the Administrator/taking 

5j into consideration the cost of achieving such amission reduction, and any 

| non-air quality health and environmental Impacts and energy requirements, 

S G determines is achievable for new or existing sources..." {emphasis added). 

| o The Floors and the resulting standard should satisfy the 

retirements of Executive Order 12291 and the Regulatory 

Flexibility Act. 

The standard should meet its objectives in a cost-effective manner. 

The standard should not place unreasonable burdens on small businesses. I 

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Solution No. 1: Establish Additional Subcategories 

o To achieve an effective and affordable MACT standard while 

following the letter of CAA Section 112, additional subcategories 

can be established, 

o This will allow MACT requirements to be tailored for many of the 

specific combinations of process, material, and product, as well a s 

for various facility-specific factors. 

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Solution No. 1 (continued) 

o For example, additional subcategories might be established for: 

pultrusion of electrical products, where Injectors are not currently feasible. 

pultrusion of products with complex feeds of reinforcement, where neither 

total covers nor Injectors are feasible. 

operations where the capital cost of a technically-feasible abatement device 

represents some reasonable fraction of the capital Investment In the major 

source. 

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 - operations where the operating cost of a technically-feasible abatement 

?} device represents some reasonable fraction of the revenue attributable t o 

| - the major source. 

| N - production lines dedicated t o one product, where close capture technology 

* could be engineered to achieve a concentrated exhaust stream. 

& - fabrication of corrosion resistant products, where the higher cost of lowstyrene vinyl este r resins can be passed on to the customer. 

fabrication of corrosion resistant products, where competitive pressures 

from Imports or other material systems require the use of less-expensive 

Isophthallc resins with higher styrene. 

composites manufacturing sources co-located with operations vented to 

Incinerators, where the emissions from the composites manufacturing 

sources could be economically vented to the already existing controls. 

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Solution No. 1 (continued) 

o Advantages of additional subcategories: 

MACT is more likely to represent the maximum achievable control for each 

major source. 

CAA Section 112 allows EPA to establish subcategories as needed. 

o Disadvantages of additional subcategories: 

large numbers of subcategories would be needed to fairly deal with the 

complexity and diversity of the Industry. 

5 - The resulting standard is (ikely to be very complex and difficult to Interpret 

| and enforce. 

| --—. - Creating additional subcategories, and determining MACT Floors for each, will 

be very resource Intensive. 

Subcategorizations tha t require larger sources to use more expensive 

controls will push the industry toward smaller facilities. No overall reduction 

in emissions would result. 

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Solution No. 2: Abandon the MACT Floor Process 

o EPA can make an administrative/policy finding tha t the MACT 

Floor process does not function to yield effective and affordable 

minimum control levels for the composites Industry. 

Congress assumed that homogeneous subcategories can be identified within 

each Industry. This assumption does not hold for composite manufacturing. 

o The standard can then be prepared without employing the 

statutory MACT Floor process. 

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| Solution No. 2 (continued) 

o Advantages of abandoning the MACT Floor process: 

EPA, Industry, and interested state and local regulators, can identify the 

best balance of control effectiveness, affordablllty, and enforceability for 

each subcategory, unencumbered by the unrealistic constraints of the MACT 

Floor findings. 

Several precedents exist for EPA mating an administrative/policy 

determination regarding the MACT Floor process: 

? + EPA determined that the 112(g) program does not need to apply to 

% modifications, contrary to the statutory language. 

| + EPA decided that the 112(g) program does not take effect until EPA 

s \y\ publishes the final guidance to states. The statut e requires that 

5 ) state s implement 112(g) a s soon a s their Title V programs are 

5 approved. 

+ The Wood Furniture MACT recognizes the diversity of tha t Industry, and 

provides options that may not have resulted from an inflexible reliance 

on the Floors to se t the control requirements. 

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Solution No. 2 (continued) 

o Disadvantages of abandoning the MACT Floor process: 

EPA could no longer rely on the Floor determinations as a starting point for 

setting MACT for each subcategory. 

Preparing the MACT standard will require substantially more resources. 

EPA would be open to court challenges for falling to comply with the letter 

of CAA Section 112. 

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| Solution No. 3: Modify the MACT Floor Process 

o EPA can make an administrative/policy finding that the MACT 

Floor process does not function to yield effective and affordable 

minimum control levels for the composites Industry. 

Congress assumed that Industry subcategories would be homogeneous 

enough that the best controlled source within each subcategory would fairly 

represent a level of control that could and should be achieved by all new 

sources, and that the average level of control achieved by the best 

% performing 12% of sources (or average of the best 5 sources) would fairly 

i represent the level of control for existing sources, because of the diversity 

I j and complexity of the composites Industry, these assumptions do not hold. 

| ^ o EPA can change the criteria used for setting the MACT Floors for 

| the composites industry. For example: 

The New Source Floor could be based on the average level of control achieved 

by the best controlled 10% of sources, rather than the best controlled single 

source. 

I - The Existing Source Floor could be based on the average level of control 

I achieved by the best controlled 25% of sources, rather than the best 12%. 

I o The resulting standard can still honor the Intent of CAA Sec. 112. 

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| Solutio n No. 3 (continued) 

o Advantages of modifying the MACT Floor process: 

Modified MACT Floor criteria, in better recognizing the diversity and 

complexity of the composites Industry, could yield minimum control levels 

that are more appropriate and achievable. 

EPA would still have Floors upon which to base the MACT retirements for 

each subcategory. 

This approach could be combined with adding a few additional subcategories, 

„ if needed, and still result in a workable standard. 

?j - Several precedents exist for EPA making an administrative/policy 

1 determination to modify the MACT Floor process (see discussion under 

s ^v^ Solution No. 2 advantages). 

I o Disadvantages of modifying the MACT Floor process: 

° - EPA and industry will need to agree on some basis for setting alternative 

Floor criteria. 

EPA would be open to court challenges for failing to comply with the letter 

of CAA Section 112. 

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