### ASSESSMENT OF THE POTENTIAL COSTS, BENEFITS,

AND OTHER IMPACTS

FOR THE

FINAL RULE

CATEGORICAL NON

- WASTE DETERMINATION FOR SELECTED NON HAZARDOUS SECONDARY MATERIALS (NHSMs):

CONSTRUCTION AND DEMOLITION WOOD, RECYCLING PROCESS RESIDUALS,

and CREOSOTE

- TREATED RAILROAD TIES

Economics and Risk Analysis Staff Office of Resource Conservation and Recovery U. S. Environmental Protection Agency 1200 Pennsylvania Ave., N. W. Washington, DC 20460

May 22, , 201 52 INTRODUCTION

Background:

Section 129 of the Clean Air Act (CAA) directs EPA to promulgate regulations to control emissions of nine specified pollutants from “solid waste incineration units.” EPA did so in December 2000 with the publication of the final Standards of Performance for New Statio nary Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units (the “CISWI Rule”). In September 2004, under section 112(d) of the CAA, the Agency promulgated the National Emissions Standards for Hazardo us Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters (the “Boilers Rule”). This rule established Maximum Achievable Control Technology (MACT) standards for this source category. Units regulated under section 129 can not be subject to any rule promulgated under

section 112. 1

Responding to a petition for reconsideration, EPA amended the CISWI Rule in September 2005 with a rule that revised definitions for “solid waste,” “commercial or industrial waste,” and “commercia l and industrial solid waste incineration unit” (the “CISWI Definitions Rule”). As part of the CISWI Definitions Rule, EPA made a distinction between solid waste incinerators and boilers, characterizing the former as units that are designed and operated t o discard materials through high temperature combustion. However, EPA excluded from the definition of a solid waste incinerator those units designed to recover energy for “useful purposes such as steam generation or process heating.”

In July 2007, the Cou rt of Appeals for the District of Columbia Circuit vacated and remanded to EPA both the CISWI Definitions Rule and the Boilers Rule. In vacating the Definitions Rule, the Court noted that, despite the potential reasonableness of the functional

distinction between boilers and incinerators, the CAA is unambiguous in its requirement that EPA regulate as a solid waste incineration unit any commercial or industrial incinerator that combusts any solid waste material, regardless of whether the waste is burned as a “fuel.” The Court also concluded that EPA erred in excluding from the CISWI Definitions Rule units that combust solid waste for the purposes of energy recovery and including these units in the Boilers

Rule.

In partial response to the Court’s decision, EPA published the Non

- Hazardous Secondary Materials (NHSM) Rule on March 21, 2011. Amendments to this rule were published in the Federal Register on February 7, 2013. These amendments provided clarification on certain

issues on which EPA received new in formation, as well as specific targeted revisions. In addition, these amendments listed several NHSMs as categorical non

- wastes when used as fuels. The Agency also indicated that we would consider adding additional materials to the categorical listings a s more information became available.

Today’s action add s three materials to the list of categorical non

- waste fuels: construction and demolition (C&D) wood according to best management practices , paper recycling residuals

1 However, sources have the option to switch back and forth between CAA section s 112 and 1 29 applicability

.3 (PRRs) , and creosote

- treated ra ilroad ties (CTRTs) . These materials are described more fully

below.

Need for Regulatory Action:

Today’s categorical non

- waste determination for selected NHSMs is an ongoing response to the Court’s decision that required a clear determination of the stat us of these materials when

combusted.

Purpose of this Document:

Because th e regulatory action is definitional only, any indirectly associated costs or benefits would not occur without the corresponding implementation of the relevant CAA rules.
However, in an effort to ensure rulemaking transparency, this assessment has been prepared that examines the potential scope and direction of these indirect impacts, for both costs and benefits.

SUMMARY OF THE FINAL RULE AND ALTERNATIVES

Final Rule:

The Ma rch 2011 NHSM final rule, as amended in February 2013, established standards and procedures to be used to identify whether non

- hazardous secondary materials are solid wastes when used as fuels or ingredients in combustion units. This rule also listed vari ous materials that are not solid wastes provided certain conditions are met. These materials are known as “categorical” non

- waste fuels. Today’s action add s three additional materials to the list of categorical non

- waste fuels: (1) construction and demol ition (C&D) wood processed from construction and demolition debris according to best management practices ; (2) paper recycling residuals generated from the recycling of recovered paper, paperboard and corrugated containers and combusted by paper recycling mills whose boilers are designed to burn solid fuel ; and (3)

creosote

- treated railroad ties that are processed and then combusted in units designed to burn

both biomass and fuel oil

.

Regulatory Alternatives:

Consistent with Executive Order 12866 requir ements and Agency guidance, this assessment briefly considers two regulatory alternatives , identified below as Option 1 and Option

2. These options are examined for comparative purposes only and should not be considered part

of the final rule

.

Optio n 1: Selected NHSMs Defined as RCRA Solid Waste:4 Under this Option, C&D wood and PRRs would be defined as RCRA solid wastes, while allowing for non

- waste consideration using the previously established petition process. 2 Under this option, without a succes sful petition, these materials, when burned, would be required to be managed under CAA section 129 standards, or disposed of in an appropriate landfill.

Option 2: Expanded RCRA Management Requirements:

Rather than listing the selected NHSMs as categor ical non

- wastes (subject to identified management requirements), another alternative regulatory option may be to finalize expanded management requirements for, or associated with

, the fuel use of these materials. These requirements would be incorporated i nto the contingencies and best management practices for

non

- waste determinations for specific non

- hazardous secondary materials when used as a fuel

. S uch requirements may include one or more of the following: transportation restrictions/requirements, stor age limitations/controls, specific container or material labeling, enhanced materials processing, expanded training, material sampling and analysis, and comprehensive recordkeeping and reporting. These requirements would, where applicable, be

incremental t o any current baseline management requirements for the three materials, whether currently burned as a solid waste or non

- waste.

Non

- Regulatory Alternatives:

Non

- regulatory alternatives to this final action may include the following: no action, expand ed voluntary training and educational programs, and working with the states to implement targeted generation and use fees/taxes at the state level that are designed to modify behavior.

The purpose of this action is to establish a categorical non

- waste d etermination for the

three selected materials ( C&D wood, PRRs

, and CTRT s)

, and to provide for greater regulatory clarity and certainty. In addition, this rule seeks to help remove or reduce cost and liability issues potentially associated with the combusti on of these materials for energy recovery, while maintaining appropriate emission standards to ensure effective protection of human health and

the environment

. Thus, n on

- regulatory alternatives would not adequately serve the purpose of

this action.

SUMMA RY OF THE AFFECTED SECONDARY MATERIALS

As noted above, the Agency is list ing three additional non

- hazardous secondary materials as “categorical” non

- waste fuels provided certain conditions are met. Categorical non

- waste
fuels do not need to be evaluated under the general standards and procedures that would otherwise apply to such materials used in combustion units. The three additional materials are:

• construction and demolition (C&D) wood processed from construction and demolition debris according to b est management practices ;

2 CTRTs are recognized as a solid waste fuel in the b a seline.5 • paper recycling residuals (PRRs)

, paper recycling residuals generated from the recycling of recovered paper, paperboard and corrugated containers and combusted by paper recycling mills whose boilers are designed to burn solid fu els ; and

,

• creosote

- treated railroad ties that are processed and then combusted in units designed

to burn both biomass and fuel oil

.

This section provides summary information concerning these non

- hazardous secondary

materials.

Construction and Demoliti on (C&D) Wood:

C&D wood from construction activities results from cutting wood down to size during installation or from purchasing more wood than a project ultimately requires. C&D wood from

demolition activities results from dismantling buildings or re moving materials during remodeling. Construction materials are produced by NAICS 236: Construction of Buildings. Demolition materials are produced by NAICS 238910: Site Preparation Contractors.

While contractors may segregate C&D materials at the bui lding site, the more common practice (especially at demolition sites) appears to be to send co

- mingled debris to independent C&D recycling or processing facilities. These facilities separate the wood scraps from metals, plastics, non

- combustibles, and oth er undesirable items. Wood scraps may be picked out of the

co

- mingled debris (positive picking), or the unwanted materials may be removed from the debris stream (negative picking). In both scenarios, steps are taken to remove lead

- based paint and

wood tre ated with chromated copper arsenate (CCA). C&D wood reclaimed from construction activities is generally unused and untreated, thereby falling under the definition of “clean

cellulosic biomass.” C&D wood reclaimed from demolition activities is, under norm al circumstances believed to be sufficiently processed to meet the legitimacy criteria. Processing facilities grind the recovered wood to a specified size and deliver the material to energy recovery

facilities.

C&D wood that has been picked, sorted, and processed for energy recovery has an as

fired energy content, on average, ranging from approximately 6,640 Btu/lb to 6,800 Btu/lb. 3
Wood residues may also be converted into gaseous components (carbon monoxide, hydrogen, methane, and other inert gases ) through gasification . This process is designed so the biomass can be directly converted into the intermediate products of gas and charcoal, which can be used for further energy recovery. 4

3 EPA

- HQ

- RCRA

- 2008

- 0329

- 1946

- A1, pg 63

- 65 estimates 6,800 Btu/lb. Appendix A of the April 26, 2013
submittal from Susan Bodine, on behalf of BPA and CMRA, indicate s an average energy content of 6,640 Btu/lb (EPA

- HQ

- RCRA

- 2013

- 0110).

4 Natural Resources Institute (NRI). “What do we mean by Gasification?” Undated. Available at: http://www.nri.org/projects/biomass/conference_papers/gasification_process.pdf6 T he USDA estimates that approximately 30 percent of all C&D wood originates in construction activities while about 70 percent is from demolition activities. 5 C&D activities generate an estimated 33 to 49 million tons of scrap wood each year, with about 50 percent considered to be of acceptable size, quality, and condi tion to be considered available for general

recovery. 6 Available information indicates that as much as 100 percent of all C&D wood destined as a boiler fuel may go off

- site. 7

, 8 Comprehensive information on the quantity of processed C&D wood currently com busted for energy recovery is unavailable. However, the combustor survey database developed by EPA for the 2010 proposal of the Commercial and Industrial Solid Waste Incinerator (CISWI) standards and the Industrial Boilers Maximum

Achievable Control Techn ology (MACT) standards appears to indicate that the sources surveyed for these rules may combust anywhere from 4.7 million tons to 11.2 million tons of C&D wood

per year (Appendix B)

. 9

, 10

Paper Recycling Residuals (PRRs):

Paper Recycling Residuals (P RRs) are paper fibers resulting from the recycling process that are unusable for making new paper and paperboard products primarily due to impurities or

fibers too small for the recycling process. As a secondary product derived from the processing of post

- consumer paper and paperboard, this material is an integral part of the on

- site industrial process at paper recycling mills.

Some processing occurs before burning PRRs for energy recovery

. 11 Processors generally use a slotted screen to select cellulosic fibers that have adequate heating value and are considered too small or inadequate for paper production. Some plants will then use hydraulic presses to squeeze unwanted moisture out of the residuals before shredding the material to the

5 McKeever, David B. 2002, "Inventories of Woody Residues and Solid Wood Waste in the United States, 2002,"

USDA Forest Service.

6 U.S. EPA, Office of Resource Conservation and Recovery. February 3 , 2011. “Materials Characterization Paper In Support of the Final Rulemaking: Identification of Nonhazardous Secondary Materi als That Are Solid Waste

Construction and Demolition Materials

– Building

- Related C&D Materials.” EPA

- HQ

- RCRA

- 2008

- 0329

- 1811.

7 U.S. EPA, Office of Air Quality Planning and Standards, Draft combustor database in support of the revised CISWI Rule, April 14 , 2009 and U.S. EPA, Office of Air Quality Planning and Standards, Draft combustor database in support of the revised Boilers Rule, March 20, 2009.

8 The Agency recognizes that there are currently large numbers of wood

- fired hydronic heaters operating thro ughout the country. These are generally on

- site units designed to burn dry, seasoned clean biomass wood and mostly serve households, small businesses, or small government facilities. Some of these units are known to burn construction debris, the status o f which is undetermined.

9 United States Environmental Protection Agency (EPA). 2009, Combustor survey database in support of the 2010 proposal of the Commercial and Industrial Solid Waste Incinerator (CISWI) standards and the Industrial Boilers

Maximum Ac hievable Control Technology (MACT) standards, April 2009.

10 The categories of wood material in the combustion database that may contain C&D building wood include (1) adulterated wood; (2) painted or varnished wood; (3) plywood, particleboard (containing g lues or resins); (4) treated wood; (5) treated wood and cardboard; (6) unadulterated wood; and (7) unadulterated lumber. Also note that some of these categories could be disaster debris, land clearing debris, or biomass (as defined in the three biomass

ma terials characterization papers) rather than construction and demolition building debris.

11 American Forest & Paper Association, et al. , public comments submitted on the Rule to Categorize Non

Hazardous Secondary Materials That Are Solid Waste (EPA

- HQ

- RC RA

- 2008

- 0329) and Commercial and Industrial Solid Waste Incineration Units: Reconsideration and Proposed Amendments (EPA

- HQ

- OAR

- 2003

- 0119).

Comment ID EPA

- HQ

- RCRA

- 2008

- 0329

- 1946

- A1. February 21, 2012. P. 557 optimal size for com bustion. 12 Some plants may also apply a drying process to these residuals before firing them. These PRRs are then conveyed to the boiler for mixing with other biomass. 13
Our evidence indicates that PRRs are handled promptly and contained in storage units (or covered buildings) along with traditional fuels.

Once ready for the boiler, the as

- fired heating value of PRRs normally averages about 3,700 Btu/lb (or on a dry basis, averages 9,100 Btu/lb). 14 While this is lower than the general guideline of 5,000 Btu/lb

, as fired

, 15 the Agency has previously stated that flexibility exists for facilities with energy recovery units that use NHSMs as fuels with an energy content lower than 5,000 Btu/lb. Considering the relatively low heating value of this material (i.e ., <5,000 Btu/lb on a wet basis ), a facility using PRRs as a supplementary fuel in an energy recovery unit would normally first assess the cost

- effectiveness of this action. Factors identified by the Agency in the March 2011 rule that may indicate a mater ial has meaningful heating value even when the heating value of the material is less than 5,000 Btu/lb include d the following: anticipated cost savings from avoided purchase of traditional fuels (primarily coal or other biomass), avoided disposal costs, wh ether the PRR material could self

- sustain combustion, and/or whether the operation produces energy that could be sold for a profit.

T he industry has noted that many paper recycling mills with solid fuel boilers are designed to burn PRRs, with each mill optimizing its operation around boiler design. Typical

boilers used include s t oker fired and fluidized bed combustion, which often have o ver

- fire and/or

under

- grate air that assists in the efficient burning of wetter fuels. This allows paper recycling

mill s to burn clean cellulosic biomass fuels, such as hog fuel and bark, which is the primary fuel, as well as PRRs, that have varying degrees of moisture content. M aterials fed to the boiler that

are too dry can cause combustion temperature s to become too hot , requiring operational adjustments. Consequently wet materials are handled well in these boilers, leading to fewer temperature swings and minimized boiler tuning adjustments. The industry has also noted that PRRs are analogous to the primary fuels ( hog fu el and bark ) , used in solid fuel boilers at paper recycling mills in that they both have high moisture content, usually > 40 percent and can have

Btu values below 5

, 000 Btu/lb, as fired.

Paper recycling facilities are estimated to generate between 450,0 00 and 600,000 tons of PRRs (including old corrugated cardboard) per year (Appendix B)

. 16

, 17 These values reflect the residuals generated by the initial screening process (i.e., to remove metals and other materials ), materials that do not break down during processing (e.g., paper treated to repel water), and fibers

12 American Forest & Paper Association, et al. , pub lic comments submitted on the Rule to Categorize Non

Hazardous Secondary Materials That Are Solid Waste (EPA

- HQ

- RCRA

- 2008

- 0329) and Commercial and Industrial Solid Waste Incineration Units: Reconsideration and Proposed Amendments (EPA

- HQ

- OAR

- 2003

- 0119). Co mment

ID EPA

- HQ

- RCRA

- 2008

- 0329

- 19 46

- A1. February 21, 2012. P. 55

13 Gavrilescu, D. “Energy from biomass in pulp and paper mills.” Environmental Engineering and Management

Journal , Vol. 7, No. 5, 537

- 546. September/October 2008. P. 542

14 See AF&PA Comments, p 62, to Docket document ID: EPA

- HQ

- RCRA

- 2008

- 0329

- 0871.

15 76 FR 15522

16 Price, Jason, Kase, W., and E. Reker, October 26 , 2012. Generation, Management, and Processing of Paper Processing Residuals . Memo to Tab Tesnau, U.S. EPA from Industrial Economics

, Inc

. EPA

- HQ

- RCRA

- 2008

- 0329

- 2007.

17 Note: These data are not for the most recent year and the amounts are likely to have changed with the increase in recycling.8 too small to be re

- used. There are no definitive data on what portion of this material is old corrugated cardboard, but a broad array of types of recovered fiber, such as old magazines, old

newspr int and office paper, are increasingly used at paper recycling mills.

Approximately 30 percent of the total generation of PRRs generated (135,000 tons to 180,000 tons) are burned for fuel value across 15 to 20 different pulp and paper mills. 18 For the mills capable of burning PRRs on

- site (i.e., their boilers are designed to burn solid fuel), 55 to 100 percent of the PRRs generated are burned and may represent between 20 to 25 percent of the

total solid fuel burned. Of the 30 percent of PRRs burned as fuel, no more than five percent are

estimated to be burned off

- site. 19 For the PRRs burned off

- site, other than to those paper recycling mills within the industry, they appear to be used to supplement other fuels burned at commercial cogeneration facilitie s.

Creosote

- Treated Railroad Ties (CTRT s ):

Railroad crossties that have been removed from service and are processed for fuel are the primary source of CTRTs. These crossties are overwhelmingly comprised of North American

hardwoods that have been treated with creosote. As a wood preservative, creosote is primarily used for the treatment of railroad ties and remains the preservative of choice by U.S. railroads due to durability, cost effectiveness, and sustainability. Creosote is a by

- product of coal tar distillation, and coal tar is a by

- product of making coke from coal. Depending upon railroad maintenance operations, anywhere from 13 million to a s many as 20 million 20 crossties may be removed from service each year (Appendix B) . About one third of thes e crossties are used for landscaping, while the majority of the rest are used for energy recovery. Only a small percentage of crossties are landfilled each year.

Because of their high energy content

, 21 processed CTRTs are beneficially used as an

alternat ive to traditional fuels for heat and energy recovery in a wide variety of different unit types and industrial sectors. These may include units designed specifically to burn crossties, industrial wood fired boilers, utility boilers, or cement kilns. The be neficial use of the wood in crossties as a fuel substitute is considered to be carbon neutral. As a result, for each tie burned for energy recovery, only the creosote portion of the tie is considered to be a fossil fuel. Thus, burning of the tie results in the addition of approximately 39 pounds of carbon dioxide into the atmosphere, compared to approximately 288 pounds which would result from burning a quantity of coal of equal energy. 22

18 Although there are over 100 paper mills across the U.S., only 15 to 20 mills have the capabi lity to utilize solid fuel in their boilers; the majority of mills’ boilers use natural gas and thus, PRRs generated in their processes are typically landfilled.

19 Price, Jason, Kase, W., and E. Reker, October 26, 2012. Generation, Management, and Processi ng of Paper Processing Residuals . Memo to Tab Tesnau, U.S. EPA from Industrial Economics, Incorporated. . EPA

- HQ

RCRA

- 2008

- 0329

- 2007.

20 Smith, Stephen and Chris Bolin. Feb. 18, 2010. Creosote

- Treated Ties End

- of

- Life Evaluation ( Used for the h igh

end esti mate).

21 The energy value of one tie is approximately equal to that of 125 pounds of coal (Source: see Smith and Bolin).

22 Smith, Stephen and Chris Bolin. Feb

. 18, 2010. Creosote

- Treated Ties End

- of

- Life Evaluation.9 The energy recovery market for crossties is dominated by third p arty energy producers who generally collect and process the ties prior to selling the material for fuel. This processing of crossties meets the definition of processing in 40 CFR 241.2. Finally, CTRTs were found to mostly contain contaminants at levels co mparable to or lower than those in traditional fuel(s) used in equivalent units. 23 No other creosote

- treated wood (i.e., non

- railroad ties) is included in

this final rule

.

GENERAL APPROACH

Introduction

This assessment evaluates the general scope and direction of impacts potentially

associated with th is rule . The assessment first considers the regulatory baseline, followed by an examination of the potential indirect incremental cost impacts (positive or negative) to burners. We also briefly discu ss indirect market adjustments potentially stimulated b y this action. Finally, we present a qualitative consideration of benefits. The approach and key options are

considered

.

As previously discussed, all impacts associated with this action, aside from minor costs of reading and understanding the rule, are not realized until regulated entities apply the definitions established in this rule to the management of these materials for fuel under regulatory requirements established under sections 112 and/or 12 9 of the CAA.

The findings discussed in this assessment should be used only to inform the reader as to the potential magnitude and direction of the indirect impacts that may occur in response to the implementation of the categorical non waste determin ations established in this rule. The

evaluation of social costs and net welfare potentially resulting from this action is beyond the scope of this assessment.

Baseline Determination

Proper baseline determination is the first step in the assessment of im pacts. The baseline reflects the behavior that affected entities would be expected to display in the absence of the proposed rule. By definition, the baseline assumes no regulatory change, thus it has no associated incremental costs, cost savings, economic impacts, or environmental/health benefits/disbenefits.

The baseline serves as a reference point from which the incremental impacts of the final rule can

be estimated. Once the baseline is determined, we can estimate how the potentially affected

CAA sect ion 112 or section 129 units may manage the selected non waste fuel materials in response to the proposed RCRA rule.

• Based on readily available data, we have estimated baseline burn rates for the affected materials, plus additional quantities potentially available for use as a fuel.

A nywhere from 22.6% to 55.2% of all C&D Wood potentially available for

23 See Preamble to the Final Rule : Tab le 3

– Contaminant Ranges in Traditional Fuels & CTRT

.10 energy recovery is currently being burned as a fuel. Thus, anywhere from 44.8% to 77.4% of all potential fuel

- value C&D Wood remains available for energy recovery. For paper recycling residuals, we estimate anywhere from 25.0% to 44.4% of all potential fuel

- value PRRs are currently burned for energy recovery, leaving a maximum of anywhere from 55.6% to 75.0% of all PRRs potentially

available for diversion t o fuel use , depending upon PRR boiler design. 24
Approximately 62 % of creosote

- treated railroad crossties removed annually are currently burned for fuel . The Association of American Railroads indicates that

as much as 67% of all CTRTs are suitable for use a s a fuel. Thus, we assume that

an additional 5% of all CTRTs are available for use as a fuel. Appendix B presents more details on these estimates, and identifies all sources.

C&D Wood available for fuel use

, but that is currently not burned is assume d to be sent

to C&D landfills

, while potential fuel

- value PRRs generated on

- site that are not burned on

- site

are assumed to be sent off

- site to an MSW landfill

. 25 CTRTs of potential fuel value that are not burned in the baseline are assumed to be used prim arily as legacy ties. 26

Impacts Assessment Methodology

This assessment considers two alternative approaches 27 to assessing the indirect impacts potentially associated with the final rule. We first examine the potential impacts using a simple engineering combustion cost comparison between CAA section 112 and section 129 units. This difference represents the cost savings from potentially avoided incremental upgrade costs required to move from CAA section 112 to section 129 standards. 28 Alternatively, this

difference may roughly represent the potential incremental cost savings of modifying a unit to

burn under CAA section 112 standards rather than CAA section 129 standards. Appendix A presents more details on data used for th is burner comparative cost asses sment.

Our second approach is presented as a simple assessment of the market adjustment s potentially associated with increased fuel use of the selected materials . These market adjustments may occur in response to reduced waste determination needs, plu s the enhanced regulatory clarity and certainty provided by the rule, as proposed. Appendix B presents full details on data and assumptions that are applied for the market adjustment assessment

.

24 This is a maximum expanded fuel

- use estimate that does not take into account the on

- site limitation or potential engineering restrictions and design limitations potentially associated with the baseli ne boiler universe at PRR facilties currently not burning PRRs for fuel.

25 We recognize that a very small portion of PRRs are sent off

- site for use as a supplementary fuel in other facilities capable of burning this low

- energy material.

26 R ailroad legacy ties are those that are used or stored along the railroad right

- of

- way

. 27 This is not to be confused with the two alternative regulatory options that are examined for this assessment only (i.e., not in the Proposal)

. 28 This may depend upon the current base line status of units exclusively burning CTRTs prior to the effective impl e mentat i on date (s) for the associated rules.11 FINDINGS

Cost and Economic Impacts:

Introduction:

This section presents estimated cost i m pacts on a combustion unit basis for burners operating under CAA section 112 v ersus section 129 requirements. We a lso briefly examine the potential adjustment s that may occur in the selected materials markets in res ponse to the rule.

Potential b urner impacts are examined under the final approach and two alternative regulatory options: O ption 1

- Selected NHSMs Defined as RCRA Solid Waste, and Option 2

- Expanded RCRA Management Requirements. These options are more f ully described above under “Regulatory Alternatives.”

Lastly, in this section we briefly examine the findings associated with C&D certification,

and other potential impacts. As previously discussed, this assessment is presented for general

informational purposes only, reflecting the potential indirect impacts of this action as part of the Agency’s larger rulemaking system that encompasses this rule plus the associated final rules recently promulgated under sections 112 and 129 of the CAA.

Estimated Im pacts to Burners:

This section examines the representative average per unit cost differential for combustors operating under CAA section 112 requirements versus CAA section 129 requirements. Without

the final rule, this cost differential would roughly re flect the average per unit cost impact for

burners currently operating under section 112 requirements to upgrade to meet the required

section 129 standards , depending upon facility baseline status and material ( s ) burned (and planned to be burned)

. With th is rule, the differential may reflect the avoidance of these anticipated costs . F or current section 129 burners

, this difference may roughly reflect the potential annual per unit cost savings associated with O&M and design modifications necessary

to meet the (less stringent) section 112 standards. Once again, this would be dependent upon many baseline conditions, including which NHSMs are currently burned , and future fuel use plans or needs. This section only considers potential cost impacts on a per uni t level. Impacts at the facility level 29 and aggregate nationwide impacts are not assessed.

Final Rule

F acilities currently burning only CTRTs in CAA section 129 units , who had planned to continue burning these materials in the same unit(s)

, may experie nce cost savings should they

choose to modif y affected combustion unit(s) to meet the CAA section 112 standards. In this

case
, the unit

- level cost savings are estimated, on average, to be approximately $266,000 per year (Appendix A ). This would reflect a n avoided upgrade cost if affected units are currently

29 A facility may operate one or more combustion units.12 operating under CAA section 112 standards. 30 Facilities currently burning C&D wood and PRRs

as a non

- waste may also experience some cost savings associated with avoided case

- by

- case waste determination s , documentation, and recordkeeping

. 31

Regulatory Options

Option 1: Selected NHSMs Defined as RCRA Solid Waste:

Under this option, C&D wood and PRRs would be RCRA solid wastes, while allowing

for a non

- waste determination using the previously est ablished petition process. In this case, $266,000 would be the average annual per unit cost increase for CAA section 112 boilers currently burning these materials who wish to pursu e the necessary upgrade s to meet CAA

section 129 standards. If these facil ities would present a petition to establish the material as a

non waste, and this petition was successful, the total cost is estimated at just over $10,000 per

submission. 32 Based on the materials burned, a successful petition would allow a facility to

avo id the $266,000 per unit upgrade cost.

Option 2: Expanded RCRA Management Requirements:

Contingent upon regulatory authority and legal feasibility, additional RCRA contingent requirements above and beyond the contingencies could be considered as a regulatory option. These may include manifesting, transportation restrictions, storage limitations/controls, specific container or material labeling, enhanced material management and handling training, material sampling and analysis, and comprehensive rec ordkeeping and reporting. A regulatory alternative that required one or more of these material

- specific requirements would likely result in increased costs to the regulated community. Under this alternative, s uch costs would be weighed against

benefits to human health and the environment expected to result from such requirement(s). Under this option, the handlers of the affected material(s) could be expected to compare the costs of alternative management methods (e.g., MSW disposal, CAA section 129 incine ration upgrade

needs ) to the increased costs associated with the new fuel source requirements. Should the regulated community decide that alternative material management methods are less expensive

than the new fuel

- source requirements, some or all of this material may be diverted away from boilers and the supplementary fuel value would be lost.

Potential Market Adjustments :

This rule, impl e me nted in conjunction with the existing boiler and CISWI final rules, will provide increased regulatory certainty a nd management clarity for the selected materials. This increased certainty may stimulate increased energy recovery use f or one or more of these materials. The potential extent of this increase cannot be determined. However, we have developed generalized preliminary estimates of the quantities of the selected materials

30 Considering the actual implementation dates for the associated rules.

31 There would remain the burden associated with 40 CFR 241.4 (categorical non

- waste determination provisions)

. 32 S upporting Statement for EPA Information Collection Request Number 2382.04 Reporting and Recordkeeping Requirements for the Final Rule on the Identific ation of Non

- Hazardous Secondary Materials that are Solid Waste, January 2011

, (Addendum added June 26, 2012). [See Exhibit 1]13 potential ly available for fuel based on our estimates of maximum annual generation of these

materials.

Based on the total annual C&D wood generation and use quantities discussed above

und er “ Summary of Affected Secondary Materials ,” it is feasible that anywhere from 9.08 million tons to 15.58 million tons of additional C&D wood of fuel value quality is available annually beyond the quantit y currently burned for fuel. P aper recycling mills generate between 450,000 and 600,000 tons of PRRs per year. 33

, 34 Of this, about 10 percent is believed to be used in land application activities

, 35 indicating about 405,000 tons to 540,000 tons of PRRs are available each year for energy recovery. Deductin g current burn estimates

, we find that , at a maximum, anywhere from 2 2 5,000 tons to 405,000 tons of additional PRRs may be available each year for energy recovery. 36 W e estimate that an ywhere from 13 million 37 to 20 million 38

CTRTs are generated (removed fro m service) each year. Approximately 62 percent 39 of this

total is currently burned for energy recovery. Based on comments from the Association of American Railroads, approximately 67 percent of all creosote

- treated railroad ties removed from

service each year are suitable for energy recovery in today’s market. Converting the five percentage point incremental increase in the number of ties to tons of CTRTs , we estimate there may be about 59,150 tons to 91,000 U.S. tons equivalent of additional railroad tie s available for energy recovery each year. Appendix B presents detailed information on all inputs, calculations, assumptions, and sources used in the development of these estimates.

The above estimates clearly demonstrate the market potential for increase d fuel

- use of the materials addressed in this proposal. However, t he extent of any potential market adjustment is undetermined, and would depend up on a multitude of economic , regulatory (state and local), and engineering factors

. In addition to market

- ad justment s , there would be increased upstream environmental benefits resulting fr o m reduced extraction of traditional fuels.

Under regulatory O ption 1, where C&D wood and PRRs would be clearly defined as

RCRA solid wastes

, facilities who do not present a successful petition, may decide to cease burning the selected material(s) in an effort to avoid potential unit upgrade costs. As a result, the generators of the se materials would need to seek alternative management methods . In some cases, this may be the same facility that burns the material, while in other cases this may be another facility. When a combustion unit stops burning a secondary material, the ultimate

destination of that material is uncertain. Under this option, the quantities of NHSMs poten tially

33 Price, Jason, Kase, W., and E. Reker, October 26, 2012. Generation, Management, and Processing of Paper Processing Residuals

. Memo to Tab Tesnau, U.S. EPA from Industrial Economics, Inc.

34 Note: These data are not for the most recent year and the amounts are likely to have changed with the increase in recycling.

35 Price, Jason, Kase, W., and E. Reker, October 26, 2012. Generat ion, Management, and Processing of Paper Processing Residuals . Memo to Tab Tesnau, U.S. EPA from Industrial Economics, Inc. [See page 2].

36 The potential for expanded fuel use is a high

- end estimate and does not take into account engineering restrictions and design limitations potentially associated with the baseline boiler universe at PRR facilities currently not burning

PRRs for fuel.

37 Waste Age, Sep 1, 1995. Recycling Keeps Railroad Ties Off The Landfill Track

38 Smith, Stephen and Chris Bolin. Feb . 18, 2010. Creosote

- Treated Ties End

- of

- Life Evaluation.

39 Comments of the Association of American Railroads (EPA

- HQ

- RCRA

- 2008

- 0329)14 diverted away from fuel use to alternative management are not estimated, but could be significant.

Other Potential Impacts

In addition to potential materials diversion and alternative management impacts, this action may also indirectly foste r market

- related secondary impacts. These may include changes in material transportation patterns, changes in material collection and consolidation patterns , and changes in material processing patterns . There may also be minor incremental changes in

cons umer prices and employment patterns related to the potential change in management

associated with these materials. The actual occurrence

, or extent of any such impacts

, has not been assessed. Finally, all affected entities would face the direct RCRA asso ciated cost of reading and understanding the rule, estimated at approximately $74 per entity. 40

Certification Statement for C&D Wood

The final rule also adds a certification requirement to ensure that C&D wood will be processed according to the condition s established in the rule. These conditions are as follows:

Construction and demolition (C&D) wood processed from C&D debris according to best management practices. Combustors of C&D wood must obtain a written certification from C&D processing facilitie s that the C&D wood has been processed by trained operators in accordance with best management practices. Best management practices for purposes of this categorical listing must include sorting by trained operators that excludes or removes the following ma terials from the final product fuel: non

- wood materials (e.g., polyvinyl chloride and other plastics, drywall, concrete, aggregates, dirt, and asbestos), and wood treated with creosote, pentachlorophenol, chromated copper arsenate, or other copper, chromiu m, or arsenical preservatives. In addition: (i) Positive sorting. C&D processing facilities that use positive sorting

— where operators pick out desirable wood from co

- mingled debris

— or that receive and process positive sorted C&D wood must either: (A) Exclu de all painted wood from the final product fuel, (B) Use X

- ray Fluorescence to ensure that painted wood included in the final product fuel does not contain lead

- based paint, or (C) Require documentation that a building has been tested for and does not

incl ude lead

- based paint before accepting demolition debris from that building. (ii) Negative sorting. C&D processing facilities that use negative sorting

— where operators remove contaminated or otherwise undesirable materials from co

- mingled

debris

— must remov e fines (i.e., small

- sized particles that may contain relatively high concentrations of lead and other contaminants) and either: (A) Remove all painted wood, (B) Use X

- ray Fluorescence to detect and remove lead

- painted wood, or

40 S upporting Statement for EPA Information Collection Request Number 2382.04 Reporting and Recordkeeping Requirements fo r the Final Rule on the Identification of Non

- Hazardous Secondary Materials that are Solid Waste, January 2011, (Addendum added June 26, 2012).15 (C) Require documentation th at a building has been tested for and does not

include lead

- based paint before accepting demolition debris from that building. (iii) Training. Processors must train operators to exclude or remove the materials as listed in paragraph (a)(5) of this section from the final product fuel. Records of training must include date of training held and must be maintained on

- site for a period of three

years. (iv) Written certification. A written certification must be obtained by the combustor for every new or modified contract, purchase agreement, or other legally binding document, from each final processor of C&D wood and must include the statement: the processed C&D wood has been sorted by trained operators in accordance with best management practices

.

Th e prepara tion of the written certification statement is the responsibility of the processor while the requirement to maintain the written certification is the responsibility of the

combustor. The certification recordkeeping requirement for the categorical non

- wast e C&D

materials is part of the existing recordkeeping requirements in the air boiler MACT and CISWI

CAA rules. 41

Our preliminary estimate indicates that this certification statement would cost approximately $ 419 each year for each processor to prepare. S hould the facility also need to add best management practices training if they do not already train processors, the total average

annual cost is estimated to be approximately $1

, 846

. Appendix C presents more details on this

certification and training cost estimation. In addition, the cost to the burner to receive, review, file and maintain the certification statement is estimated at $23.40 per submission. 42 However, as indicated above, the certification recordkeeping requirement for the categorical non

- wa ste
C&D materials is part of existing CAA recordkeeping requirements . Thus, some or all of this cost may simply replace the existing recordkeeping requirements.

Human Health, Environmental, and Economic Benefits/Disbenefits:

Together with the correspo nding CAA rules, this proposed rule will likely result in various changes in materials management practices that may yield a variety of human health, environmental, and economic benefits or disbenefits. To the extent that the final rule affects the CAA reg ulatory status of individual combustion units burning the selected material(s), the final rule may affect criteria pollutant and air toxics emissions. In addition, any increased quantities of

these NHSMs burned as a non

- waste fuel would result in upstream life cycle benefits associated with reduced extraction of traditional fuel(s). Finally, to the extent that the rule may influence market dynamics within affected industries, economic benefits or disbenefits may occur.

41 The relevant recordkeeping regulations in the existing CAA Air rules under sections 60.2175 (v), 60.2740(u) or 63.7555(d)(2), and 63.11225(c)(2)(ii) state that a burner must show they are in compliance with 40 CFR part 241.3

or 241.4 to burn a non waste fuel and has been processed pursuant to 241.2

. 42 Supporting Statement for Information Collection Request Numb er 2421.04

- Hazardous Waste Management System: Conditional Exclusion for Carbon Dioxide (CO2) Streams in Geological Sequestration Activities

– Final Rule, July 2, 2013.(Exhibit 5)16 Human Health and Environmental Be nefits/Disbenefits:

Our research finds that the NHSM fuels selected in the current proposal are generally comparable to fuels that the combustors would otherwise burn

. 43 Therefore, the overall level of emissions, or the emissions mix from boilers is not e xpected to change significantly under this proposal. However, we cannot confirm that there would be no cases of an incremental increase in exposure (negative impacts) as an indirect result of this rule if the affected facilities accept more,

or a different combination of non

- hazardous secondary materials.

T his rule may stimulate the increased use of the selected NHSMs for use as a fuel in

CAA section 112 boilers. Th e increased use of these NHSMs would likely result in the displace ment of selected tradi tional fuels

, or other non

- waste fuels , depending upon availability, prices, and unit design. A net displacement of coal or other fossil fuels could result in various

environmental benefits , including reduced upstream emissions of particulate matter, crit eria pollutants, and toxic emissions. There may also be reduced water and energy usage. Any reduced emissions or activities at virgin fuel mining or processing facilities may result in reduced environmental impacts to citizens living near or around the af fected operations.

The net human health and environmental impacts from the potential changes discussed

above have not been assessed. This net impact could be either positive or negative.

Economic Benefits/Disbenefits:

I ncrease d beneficial fuel use of the selected materials could lead to increased market valuations of these materials, and potentially reduced valuations o f substitutes. These changes in

market valuations

, and corresponding supply and demand

, could disrupt the market equilibrium

and a lter the economics of the affected materials and industries. This could potentially lead to incremental changes in employment, revenues, and profitability for certain industrial sectors, subsectors, or individual companies. Liability and goodwill conside rations may also be factor s

. Facilities burning the materials as a non

- waste fuel may receive economic value from the avoided stigma of burning a solid waste, and the corresponding liability concerns.

EQUITY CONSIDERATIONS AND OTHER IMPACTS

As required by applicable statutes and executive orders, this section summarizes our analysis of equity considerations and other regulatory concerns associated with the final rule. This chapter assesses potential impacts, with respect to the following issues:

• Regul atory planning and review : discusses determination of regulatory significance

under Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review the Agency. These Orders are also

the basis for this analysis.

43 See Section V of the Proposed Rule Preamble : Proposed Categorical Non

- Wa ste Listing Determinations

.17 • Regulatory flexibility: focuses on the potential effects of the final rule on small entities;

• Unfunded mandates: examines the implications of the final rule with respect to unfunded mandates;

• Federalism: considers potential issues rela ted to state sovereignty;

• Tribal governments: extends the discussion of federal unfunded mandates to include impacts on Native American tribal governments and their communities;

• Children's health protection: examines the potential impact of the final r ule on the health of children;

• Energy Impacts: examines the impacts of the final rule on energy use, supply, and distribution;

• Environmental justice: considers potential issues for minority and low

- income populations.

Regulatory Planning and Review:

Under Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

, the Agency, in conjunction with the Office of Management and Budget’s (OMB’s) Office of Information and Regulatory Affairs ( OIRA) must determine whether a regulatory action is “significant” and therefore subject to OMB review. The

Order defines a “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $10 0 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsiste ncy or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, this action is “ substantive

non significant” and will not un dergo OMB review.

Regulatory Flexibility:18 The Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 USC 601 et seq., generally requires an agency to prepare a regulatory flexibility ana lysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act

, or any other statute. This analysis must be completed unless the agency certifies that the rule will not have a significant economic impact

on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) a small busi ness as defined by the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and ( 3) a small organization that is any not

- for

- profit enterprise which is independently owned and operated and

is not dominant in its field.

In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analysis is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on sma ll

entities” ( 5 USC 603 and 604 ) . Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of th e small entities subject to the rule.

The addition of the three NHSMs to the list of categorical non

- waste fuels is expected to indirectly reduce materials management costs

. In addition, this action will provide greater clarity

and reduce regulatory un certainty associated with these materials and help increase management efficiency. We have therefore determined that today's rule will not have a significant economic impact on a substantial number of small entities.

Unfunded Mandates:

T he Unfunded Manda tes Reform Act (UMRA) of March 22, 1995, calls on all federal agencies to provide a statement supporting t he need to issue any regulation containing an

unfunded federal mandate

, and to describ e prior consultation with representatives of affected state, loc al, and tribal governments.

The final rule is not subject to the requirements of sections 202, 204 and 205 of UMRA. In general, a rule is subject to the requirements of these sections if it contains “Federal mandates” that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. The final rule does not result in $100 million or more in expenditures for any of these groups.

Federalism :

Executive Order 1 3132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications.” “P olicies19 that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.” Internal EPA guidance indicates that a policy has federalism implications if it results in the expenditure by State and/or local governments in the aggregate of $25 million or more in any one year

.

Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the di rect compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the regulation.

This action does not have federalism implications. It will not have substantial direct

effect s on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in the Order. This rule will not impose direct compliance costs on state or local governments and will not preempt state law. Thus, Executive Order 13132 does not apply to this

action.

Consultation and Coordination with Indian Tribal Governments:

Executive Order 13175, entitled “Consultation and Coordination with I ndian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.”

EPA has conclud ed that this action may have tribal implications. However, it will neither impose substantial direct compliance costs on tribal governments, nor preempt Tribal law. Potential aspects associated with the categorical non

- waste fuel determinations under thi s final rule may invoke minor indirect tribal implications to the extent that entities generating or consolidating these NHSMs on tribal lands could be affected. However, any impacts are expected to be negligible

.

Children’s Health Protection:

Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR. 19885, April 23, 1997) applies to any rule that: (1) is determined to be “economically significant” as defined under E.O. 12866 44 , and (2) concerns an

e nvironmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on child ren, and explain why the

44 An “economically significant” action is one estimated to h ave an annual effect on the economy of $100 million or more, or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs

, the environment, public health or safety, or State, local, or tribal governments or communities;20 planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This action is not subject to EO 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in EO 12866, and because the Agency does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. Based on the discussion below, the Agency found that the populations of children near potentially affected boilers are either not significantly greater than national averages, or in the case of landfills, may potentially result in reduced discharges near such populations.

The final rule may indirectly stimulate the incre ased fuel use of one or more of the three NHSMs by providing enhanced regulatory clarity and certainty. This increased fuel use may

also result in the diversion of a certain quantity of these NHSMs away from current baseline

management practices . Any corresponding disproportionate impacts among children would depend upon: (1) any potential change in emissions from combustion units subject to the CAA section 112 standards, relative to baseline management patterns, and (2) whether children make up a disprop ortionate share of the population near the affected combustion units. Therefore, to assess the potential for the final rule to result in an indirect disproportionate effect on children, we conducted a demographic analysis for this population group surroun ding CAA section 112 major source boilers, municipal solid waste (MSW) landfills, and construction and demolition (C&D) landfills. 45 We assessed the share of the population under the age of 18 living within a

three

- mile (approximately five kilometers) radi us of these facilities.

For major source boilers, our findings indicate that the percentage of the population in these areas under age 18 years of age is generally the same as the national average. 46 W hile the fuel source and corresponding emission m ix for some of these boilers may change as an indirect response to this rule, emissions from these sources remain subject to the CAA section 112

standards. For MSW and C&D landfills, we do not have demographic results specific to children. However, using the population below the poverty level as a rough surrogate for children, we found that within three miles of facilities that may experience diversions of one or more of these NHSMs, low

- income populations, as a percent of the total population, are dispro portionately high relative to the national average. Thus, to the extent that these NHSMs are diverted away from MSW or C&D landfills, any landfill

- related emissions, discharges, or other negative activity potentially impacting low

- income (children) popula tions living near these

units are likely to be reduced. T ransportation emissions associated with the diversion of some of this material away from landfills to boilers are likely to be generally unchanged, while these emissions are likely to be reduced for on

- site generators of paper recycling residuals that would

reduce off

- site shipments.

45 The extremely large number of area source boilers and the absence of site

- specific coordinates prevented us from assessing the demographics of populations located near these sources. In addition, we did not assess child population percentages surrounding cement kilns that may use some out

- of

- service railroad crossties for their

thermal value.

46 U.S. EPA, Office of Resource Conservation and Recovery. Summa ry of Environmental Justice Impacts for the

Non

- Hazardous Secondary Material (NHSM) Rule, the 2010 Commercial and Industrial Solid Waste Incinerator (CISWI) Standards, the 2010 Major Source Boiler NESHAP and the 2010 Area Source Boiler NESHAP. February

20 1121 Energy Impact:

Executive Order 13211, “Actions Concerning Regulations that Affect Energy Supply, Distribution, or Use” ( 66 FR 28355, May 22, 2001 ), addresses the need for regulators to more fully consider the potential energy impacts of regulatory action. Under Executive Order 13211, agencies are required to prepare a Statement of Energy Effects when a regulatory action may have significant adverse effects on energy su pply, distribution, or use, including impacts on price and foreign supplies. Additionally, the requirements obligate agencies to consider reasonable alternatives to regulatory actions with adverse effects and the impacts that such alternatives might have on energy supply, distribution, or use.

This action is not a “significant energy action” as defined under the Order because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The

selected NHSMs affected b y this final action are not generated in quantities sufficient to significantly (adversely or positively) impact the supply, distribution, or use of energy at the

national level.

Environmental Justice:

Executive Order (EO) 12898 (59 FR 7629, Feb. 16, 199 4) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as a ppropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low

income populations in the United States.

T he overall level of emissions, or the emissions mix from affected boilers are not expected to change significantly as a result of this rule. T he NHSMs categorically listed as non

waste fuels are generally comparable to the types of fuels that the com bustors would otherwise

burn. Therefore, while we ca nnot definitively determine that there would be no cases of an incremental increase in exposure (negative impacts) if the affected facilities accept more, or a

different combination of non

- hazardous secondary materials , the boilers indirectly affected by

t his action would remain subject to the safe CAA s ection 112 standards.

Our environmental justice assessment 47 reviewed the distributions of minority and low

income groups that might be impacted by the sources indirectly affected by this proposal. We

fo cused on census blocks within three miles (approximately five kilometers) of the se facilities. We then determined the demographic composition ( e.g. , race, income, etc.) of these census blocks and compared them to the corresponding national compositions. Our findings indicate that populations living within three miles of major source boilers represent areas with minority

and low

- income populations that are higher than the national averages. In these areas, the

47 U.S. EPA, Office of Resource Conservation and Recovery. Summary of Environmental Justice Impacts for the

Non

- Hazardous Secondary Material (NHSM) Rule, the 2010 Commercial and Industrial Solid Waste Incinerator (CISWI) Standards, the 2010 Major Source Boiler NESHAP and the 2010 Area Source Boiler NESHAP. February

2011.22 minority share 48 of the population was found t o be 33 percent, compared to the national average of 25 percent. For these same areas, the percent of the population below the poverty line (16 percent) is also higher than the national average (13 percent).

We also c onsidered the potential for non

- c ombustion environmental justice concerns related to the potential incremental increase in NHSMs diversions from current baseline management practices. These may include the following:

• Reduced upstream emissions resulting from the reduced production of v irgin

fuel : Any reduced upstream emissions that may indirectly occur in response to reduced virgin fuel mining or extraction may result in a human health and/or environmental benefit to minority and low

- income populations living near these projects.

• Alte rnative materials transport patterns: Transportation emissions associated with NHSMs diverted from landfills to boilers are likely to be similar, except for

on

- site paper recycling residuals, where the potential for less offsite transport to landfills may result in reduced truck traffic and emissions . Reduced environmental impacts may occur w here such transport patterns pass through minority or low

- income communities.

• Change in emissions from baseline management units: The diversion of some

of these NHSM s away from disposal in landfills may result in a marginal decrease in activity at these facilities. This may include non

- adverse impacts, such as marginally reduced emissions, odors, groundwater and surface water impacts, noise pollution, and reduced mai ntenance cost to local infrastructure. Because MSW and C&D landfills were found to be located in areas where minority and

low

- income populations are disproportionately high relative to the national average, any reduction in activity and emissions around t hese facilities is likely to

benefit (even if only marginally) the citizens living near these facilities.

T his rule, in conjunction with the corresponding CAA rules, may also help accelerate the abatement of any existing stockpiles of the selected NHSMs . To the extent that these stockpiles may represent negative human health or environmental implications, minority and/or low

income populations that live near such stockpiles may experience marginal health or environmental improvements. A e s thetics may al so be improved in such areas.

Joint Impacts of Rules :

The final rule has applicability to the universe of facilities subject to CAA sections 112 or 129, as well as other rules and agency regulatory programs. In fact, the final rule, with the exception o f certain administrative requirements, only engenders economic effects by its actual

48 This figure is for overall population minus white population and does not include the Census group defined as “White Hispanic.”23 application in the context of these other regulatory regimes. Thus, the final rule share s joint impacts with existing, and prospective regulatory initiatives.

Examples of other rules or regulatory initiatives with which the final rule may have joint impacts include: the Portland Cement MACT, the Commercial, Industrial Solid Waste Incinerators (CISWI) rule s , the Boiler MACT rules (Major Source and Area Source), and the

O ther Solid Waste Incinerators ( OSWI) rule.24 APPENDIX A25 Estimating Section 129 Compliance Costs Compared to Section 112 Compliance Costs

This Appendix details our assessment of the derivation of representative unit and average

CAA sectio n 129 and section 112 compliance costs for model units. Table A

- 1 presents the following information for each of the 30 representative units 49 : (1) unit and facility identification data, (2) the estimated annual costs of section 129 compliance, (3) the est imated annual costs of section 112 compliance, and (4) the annual costs of section 129 incremental to section 112 (i.e., the difference between (2) and (3) for each unit). Averaging the incremental section 129 costs for the 30 representative units, we fin d that the cost of upgrading to section 129 standards (incremental to Section 112), is nearly $266,000 per unit.

Table A

- 1

Facility Name City State Unit

Number Section 129

Unit Costs (year 2008$) Section 112

Unit Costs (year 2008$) Incremental Cost s of Section 129 (year 2008$)
OFS Fitel, LLC Norcross Facility Norcross GA Unit 1 325,382 111,194 214,188

OFS Fitel, LLC Norcross Facility Norcross GA Unit 2 325,382 152,643 172,739

J.R. Simplot Company Pocatello ID Unit 1 325,382 0 325,382

J.R. Simpl ot Company Pocatello ID Unit 2 325,382 0 325,382

Thermafiber, Inc Wabash IN Unit 1 325,382 0 325,382

3M Alexandria Alexandria MN Unit 1 325,382 0 325,382

3M Alexandria Alexandria MN Unit 2 325,382 0 325,382
PPG Industries, Inc. (Lexington, NC) Lexingto n NC Unit 1 325,382 152,643 172,739

PPG Industries, Inc. (Lexington, NC) Lexington NC Unit 2 325,382 152,643 172,739

PPG Industries, Inc. (Lexington, NC) Lexington NC Unit 3 325,382 152,643 172,739

PPG Industries, Inc. (Lexington, NC) Lexington NC Unit 4 325,382 152,643 172,739

PPG Industries, Inc. (Shelby, NC) Shelby NC Unit 1 325,382 152,643 172,739

PPG Industries, Inc. (Shelby, NC) Shelby NC Unit 2 325,382 152,643 172,739

AGY Huntingdon,

LLC Huntingdon PA Unit 1 325,382 0 325,382

AGY Huntingdon,

L LC Huntingdon PA Unit 2 325,382 0 325,382

49 U.S. EPA, Office of Air Quality Planning and Standards , Draft combustor database in support of the revised CISWI Rule, April 14, 2009 and U.S. EPA, Office of Air Quality Planning and Standards, Draft combustor database in support of the revised Boilers Rule, March 20, 2009.26 Table A

- 1

Facility Name City State Unit

Number Section 129

Unit Costs (year 2008$) Section 112

Unit Costs (year 2008$) Incremental Cost s of Section 129 (year 2008$) McAvoy Vitrified

Brick Co. Phoenixville PA Unit 1 325,382 0 325,382

AGY Aiken LLC Aiken SC Unit 1 325,382 0 325,382

AGY Aiken LLC Aiken SC Unit 2 325,382 0 325,382

AGY Aiken LLC Aiken SC Unit 3 325,382 0 325,38 2

Kohler Co. Spartanburg SC Unit 1 325,382 0 325,382

Kohler Co. Spartanburg SC Unit 2 325,382 0 325,382 Owens Corning Insulating Systems,

LLC Waxahachie

Plant Waxahachie TX Unit 1 325,382 0 325,382

Owens Corning Insulating Systems,

LLC Waxahachie

Pla nt Waxahachie TX Unit 2 325,382 0 325,382

Corning Incorporated Danville VA Unit 1 325,382 0 325,382 Corning Incorporated Danville VA Unit 2 325,382 0 325,382

3M Prairie du Chien Prairie du

Chien WI Unit 1 325,382 152,643 172,739

3M Prairie du Chien Pra irie du

Chien WI Unit 2 325,382 152,643 172,739

3M Prairie du Chien Prairie du

Chien WI Unit 3 325,382 152,643 172,739

3M Wausau

- Downtown Wausau WI Unit 1 325,382 152,643 172,739

Guardian Fiberglass,

Inc Inwood WV Unit 1 325,382 0 325,382

AVERAGE PE R UNIT INCREMENTAL C OST OF SECTION 129 O VER SECITON 112 $265,70627 APPENDIX B28 

## Estimated NHSM Quantities Generated and Burned for Fuel

Input Factor Value/
Quantity Units Year Source/Comments

Low

- End: Ma ximum Potential Quantity of Paper Recycling Residuals (including OCC) that Could Possibly Be Burned as

Fuel 405,000 short tons per

year 201 2 * Generation, Management, and Processing of Paper Processing Residuals. Industrial Economics Corporation, October

26, 2012.

* Maximum Reported Quantity: 450,000 tons/yr. Estimate assumes 10 percent will be used for land applications (see
statement on page 2 of reference.

* Assumes 100% generated on

- site.

High

- End: Maximum Potential Quantity of Paper Re cycling Residuals (including OCC) that Could Possibly Be Burned as

Fuel 540,000 short tons per

year 201 2 * Generation, Management, and Processing of Paper Processing Residuals. Industrial Economics Corporation, October

26, 2012.

* Maximum Reported Qu antity: 600,000 tons/yr. Estimate assumes 10 percent will be used for land applications (see
statement on page 2 of reference.

* Assumes 100% generated on

- site.

Low

- End Estimate: Paper Recycling Residuals (including OCC) Currently
Burned for Fuel 135,000 short tons/year 2012 * Generation, Management, and Processing of Paper Processing Residuals. Industrial Economics Corporation, October

26, 2012.

* Assumes 100% generated on

- site.

High

- End Estimate: Paper Recycling Residuals (includi ng OCC) Currently Burned for Fuel 180,000 short tons/year 2012 * Generation, Management, and Processing of Paper Processing Residuals. Industrial Economics Corporation, October

26, 2012.

* Assumes 100% generated on

- site.

Estimated Maximum Qua ntity of Construction and Demolition (C&D) Wood that May be Available for Energy

Recovery 20,280,000 short tons/year 2002 * U.S. EPA. Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous
Secondary Materials T hat are Solid Waste

- Construction and Demolition Materials

- Building Related C&D Materials. February 3, 2011

Low

- End Estimate: C&D Wood Currently Burned for Fuel 4,700,000 short tons/year 2009 * U.S. EPA. Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous Secondary Materials That are Solid Waste

- Construction and Demolition Materials

- Building Related C&D Materials. February 3, 201129 

## Estimated NHSM Quantities Generated and Burned for Fuel

Input Factor Value/
Quantity Units Year Source/Comments

High

- End Estimate: C&D Wood Currently Burned for Fuel 11,200,000 s hort tons/year 2009 * U.S. EPA. Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous
Secondary Materials That are Solid Waste

- Construction and Demolition Materials

- Building Related C&D Materials. February 3, 2011

* Note: 4.7 million ton estimate and 6.5 million ton estimate added together. (See paper)

* Note: The high

- end estimate may include an undetermined portion of non C&D building material wood (e.g., land clearing wood, disaster debris)

Low

- End Estimate of Creosote

- Treated Rail Road CrossTies Removed Annually 13,000,000 actual number of

8 foot ties 1995 * Waste Age, Sep 1, 1995. Recycling Keeps Railroad Ties Off The Landfill Track

* Lowest estimate identified

High

- End Estimate of Creosote

- Treated Rail Road CrossTies Removed Annually 20,000,000 actual number of

8 foot ties 2010 * Smith, Stephen and Chris Bolin. Feb. 18, 2010. Creosote

- Treated Ties End

- of

- Life Evaluation.

* Highest estimate identified

Estimated Percent of RailRoad CrossTies
Removed Annually that are Currently

Burned for Fuel 62% percent 2012 * Comments of the Association of American Railroads (EPA

- HQ

- RCRA

- 2008

- 0329)

Estimated Maximum Percent of

RailRoad CrossTies Removed Annual ly that Might be Burned for Fuel 67% percent 2012 * Comments of the Association of American Railroads (EPA

- HQ

- RCRA

- 2008

- 0329)

* Note: Assumed that the 5 percent of total that is currently going to legacy or unused on RR land would be diverted to

fue l. Low quality landscaping quantities may also be affected, based on market conditions. * Note: Crossties no longer going to burning assumed to be used as legacy ties or for landscaping at no incremental
cost or cost savings to generator or burner

.

Estimated Average End of Life Weight per Standard Treated Wood Tie 182 LBS 2010 * Smith, Stephen and Chris Bolin. Feb. 18, 2010. Creosote

- Treated Ties End

- of

- Life Evaluation.

* Note: Estimates ranged from about 130 to 200. However, the Smith paper (referenced above) appeared to be the most carefully researched.30 APPENDIX C31 

### NHSM Categorical Non

- Waste Determination

- Final Rule

Cost Assessment for Certification Statement for C&D Wood

.

Summary of R equirement:

Combustors of C&D wood must request a written certification statement from C&D processing facilities that the C&D wood has been processed by trained operators in accordance with best management practices, as defined in the rule. The prepara tion of this certification statement and the requirement to maintain certification is the responsibility of the processor. While some facilities already perform training to processors on best management practices for C&D wood, those that do

not will need to do so.

Assumptions and Data:

Certification Activities and Assumptions per Processing Facility:

• Assume that each facility incurs these costs.

• Read the regulation in sufficient detail to fully understand certification requirement

.

• Review the facility w ood processing activities and examine final fuel product to ensure product consistently meets necessary requirements

.

• Keep records of training activities

.

• Prepare certification statement

.

• Have certification statement signed by the authorized representative or authority

.

• Provide certification statement to each purchaser (combustion unit/facility)

.

• Make the certification statement voluntarily available to the State upon request

o assume 30% of all facilities would receive such a request each year.

• Impacts ave raged over a three

- year timeframe

.

• One hundred percent labor costs, no capital or maintenance costs

.

• The certification cost is assumed to be on a per facility basis, not per unit.

Best Management Practices Training for Processors:

• Some facilities already perform this level of training, so there will be no additional costs for training for these facilities (i.e., business as usual).

• Assumes training materials will be purchased or developed for a one

- time cost.

• Training material cost assumed to be $1950 (As sumes non

- member costs for

SWANA’s “Waste Screening In

- House Training Package”, assessed from https://swana.org/Education/TypesofTraining/Training@Work/Trai ning@WorkFull List.aspx on May 21, 2015).

• Assumes one manager performs the training program for five processors, and that the time commitment for each employee is 10 hours.

Analytical Inputs:

Assumes the following labor rates: $ 110.54 per hour for Exe cutive, Administrative, and Managerial labor; $ 81.86 per hour for Technical labor, $ 29.78 per hour for Clerical32 labor, and $ 24.53 per hour for processors/ sorters. This cost estimate uses mean hourly wage for the following labor categories from the United States Department of Labor, Bureau of Labor Statistics, May 2014, “National Industry

- Specific Occupational Employment and Wage Estimates” in the Waste Collection classification (NAICS code 562100): Management Occupations, General and Operations Managers f or Managerial labor; Environmental Engineers for Technical labor, and Office Clerks, General for

Clerical labor. For Legal, the rate comes from cross industry Lawyers, Legal Services since there is no specific legal rate available in the NAICS 562100 stati stics. The rates have been increased by 110 percent to account for the benefit packages available to those employed by private industry. A cc essed from : http://www.bls.gov/oes/current/ naics4_562100.htm#51

- 0000 and http://www.bls.gov/oes/current/oes231011.htm on May 21 , 2015.

Findings (the following page provides the calculations) :

For facilities that already perform best management practices training:

Estimated Total Annual Average Cost per facility: $ 419

. 01 Estimated Total Annual Average Burden per facility: 4.1 hours

For facilities that do not already perform best management practices training ( “ worst

- case scenario ” ) : Estimated Total Annual Average Cost per facility: $1, 846

. 31 Estimated Total Annual Average Burden per facility: 24.1 hours33 Certification Cost Calculations

Certification Activities (Annual average hours and costs to prepare and make statemen t available for review)

Labor Category: Average Annual Hours Loaded Rate ($/hr) 1 Cost ($)

Management 1.5 110.54 $ 165.81
Legal 1 140.45 $ 140.45

Technical 1.25 81.86 $ 102.33

Clerical 0.35 29.78 $ 10.42

Processors/Sorters 0 24.53 $0

Total 4. 1 $ 419.01

Training Activities 2
(Hours and costs to prepare and perform training course for processors)

Labor Category: Hours Loaded Rate ($/hr) 1 Cost ($)

Training Materials 3 0 $ 1,950.00
Management 10 110.54 $ 1,105.40
Legal 0 140.45 $0

Te chnical 0 81.86 $0

Clerical 0 29.78 $0

Processors/Sorters 50 24.53 $ 1,226.50

Total 60 $4 ,281.90
Average Annual Total 20 $ 1,427.30

Training plus Certification Activities ("worst

- case scenario") total annual cost per facility ($/yr): $1,84 6.31

Labor Rates

Labor Category: BLS Occupation Title (Occupation Code) Raw Rate ($/hr) 4 Loaded Rate ($/hr) 1

Management General and Operations Managers (11

- 1021) $ 52.64 $ 110.54

Legal Lawyers, Legal Services (23

- 1011) 5 $ 66.88 $ 140.45

Technica l Environmental Engineers (17

- 2081) $ 38.98 $ 81.86

Clerical Office Clerks, General (43

- 9061) $ 14.18 $ 29.78

Processors/Sorters Inspectors, Testers, Sorters, Samplers, and Weighers (51

- 9061) $ 11.68 $ 24.53

NOTES:

1. Assumes 110% of wage rate is added t o raw wage rate to reflect loading for benefits

2. Assumes training will be reviewed/updated and performed every 3 years (i.e., average costs over 3

- year period).

3. Training Material Cost source: https://swana.org/Education/TypesofTraining/Training@Work/Training@WorkFullList.aspx

4. Labor rates data source for NAICS 562100: http://www.b ls.gov/oes/current/naics4_562100.htm#51

- 0000

5. There is no "legal" category wage information within NAICS 562100, so this is the mean wage value cross industry, available

here: http://www.bls.g ov/oes/current/oes231011.htm