1 To: Brian Shrager, EPA/SPPD

From: Amanda Singleton, ERG

Date: July 2, 2010

Re: Minutes of Bagasse Industry Meeting – June 30 th , 2010



### Meeting Attendees Sean O’Keefe, Hawaii Commercial and Sugar Company Jose Alvares, Sugar Cane Growers Cooperative of Florida David Dee, Industry Counsel David Buff and Jeremy Paul, Golder Associates John Fanjul, Okeelanta Corporation Kathy Lockhart, Sugar Growers Cooperative Peter Briggs, US Sugar Ben Shelden, HDF Brian Shrager and Jim Eddinger, USEPA Amanda Singleton, ERG



### Meeting Agenda

 Brief Sugar Industry Overview

 Need for Bagasse Subcategory

 Significant Impacts to Industry if Rule is Finalized as Proposed

 Other Comments on the Proposal

Brief Sugar Industry Overview

There are 22 bagasse boilers located at major sources of HAP. Curren tly these units are classified in the dutch oven/suspension burner biomass category. The boilers fueling these plants manufacture two million tons of sugar annually.

Need for Bagasse Subcategory

Industry representatives discussed that bagasse boilers are designed uniquely for bagasse fuel and the attributes of bagasse fuel are fundamentally different than other woody biomass. Unlike other boilers in the proposed suspension burner/ dutch oven subcategory, bagasse bo ilers are a hybrid of grate and suspension design. Smaller fuel particles are fired in suspension while larger fuel particles are fired on the grate. The design differ ences are necessary to burn bagasse , and suspension burners designed to combust wood cannot use bagasse as a fuel without significant modification.

Industry representatives added that bagasse fuel characteristics differ significantly from woody biomass with respect to fuel moisture and shape of the feedstock. Bagasse ranges between 48 and 52 percent moisture. As part of the mill operations th e cane is crushed, washed, and injected with water in order to extract the sugars from the cane fiber. The resulting fuel is a non-homogenous fibrous2 material. Variability of fiber sizes in the bagasse fuel feed affects furnace temperature in different regions of the combustion chamber, which in turns affects formation of carbon monoxide (CO).

Further, representatives from the industry indicated that boilers designed to burn bagasse are an integral combined heat and power process to each sugar plant, providing 10 0 percent of each plant’s steam and electricity needs. The boilers are designed to handle wide fluctuations in fuel feed rates, fuel size, and fuel moisture contents that are dependent on field conditions when the bagasse is harvested. As a result of these variable milling ope rations the boilers are designed to operate with fluctuating steam loads that vary much more wi dely than processes oper ating under steady-state conditions.

Significant and Unique Impacts on the Sugar Industry

In Hawaii, the one remaining plant fires bagasse from approximately 35,000 acres and in Florida the plants fire bagasse from 400,000 acres and employ between 10,000 – 20,000.

Industry representatives indicated that the ea ch bagasse plant’s capital equipment value was approximately $120 to $150 million and that the proposed CO limit would require between 54 and 97 percent reductions at all units which could require units to replace existing boilers with new boilers, at a cost of $30 to $50 million per boiler. CO limits could not be achieved at many units with any type of overfire air or other advanced combustion controls. PM emission reduction requirements would also be significant for many boilers, between 86 and 92 percent reductions, despite the de minimus levels of metallic HAP in the particulate. Further, fabric filter control technology does not exist on any bagasse boiler and this control is a fire hazard on the units due to potential sparks in the fly ash.

Other Industry Comments on the Proposal

MACT Floor Methodology

 Industry requested EPA to use a minimum of five data points for setting any standard. It was noted that standards based on one or two data points do not address variability among tests that are necessary to demonstrate achievability.

 Industry noted that bagasse boilers do not have any dioxins/furans test data available. Given the absence of chlorinated compounds in the fuel there has never been a concern over emissions in the past and the industry requested EPA to consider a work practice standard for dioxins/furans a bagasse units. EPA suggested that the industry might want to consider completing testing at some of the units although it was recognized that the seasonal operation of the units would be difficult to test with respect to the current schedule for promulgating the rule.

 Industry suggested that EPA consider rankin g units to identify the top 12 percent by the average of all test runs as opposed to ranking according to the minimum test run.

 Industry also noted that the pollutant-by-pollutant approach for setting the floor makes it difficult to demonstrate that the top performing boilers can meet the limits for all regulated pollutants.

Emission Averaging

 Industry requested that the emissions averaging provision be expanded to cover CO emissions.3  Industry questioned the rationale for including of a 90 percent discount factor for qualifying for emissions averaging. Industry preferred emission averaging to use the actual heat input instead of the permitted de sign capacity of each unit in Equation 1 of Section 63.722 of the proposed rule.

Start-up, Shutdown, and Malfunction (SSM) Provisions

 Industry requested exemptions of start-up, shutdown and malfunction data from 30-day rolling averages. As an alternative met hod for handling periods of SSM, it was suggested to insert provisions into the rule to limit start-up time, such as the language included in the RICE NESHAP.

 Industry noted that malfunctions are more frequent in the sugar industry given the crop and weather dependent fuel.

Alternative non-Hg Metallic HAP Standard

 Industry requested EPA to consider an alte rnative non-Hg metallic HAP standard that facilities could comply with in lieu of a PM standard. The industry noted that metallic HAP emissions from bagasse are very low considering the inherent properties of the fuel and the additional washing process that the fuel undergoes to extract the sugar from the cane prior to fueling the boiler.

PM CEMS

 Industry suggested that for units greater than 250 MMBtu/hr with control devices such as ESPs or fabric filters, the parametric mon itoring data for these devices are sufficient for demonstrating continuous compliance with a standard.

Relationship with PSD/NSPS Programs

 Industry requested that boiler modifications made primarily to meet NESHAP standards should not trigger PSD/NSPS review. There is concern that by modifying the boiler to meet low CO standards NOx emissions may increase as a tradeoff of combustion modfications.

Co-Fired Boilers

 Industry representatives were concerned about the 10 percent annual heat input threshold for defining a fuel category as coal versus biomass. The bagasse boilers in Hawaii burn coal when sufficient quantities of bagasse aren’t available. Representatives from the Hawaii mill indicated that bagasse co mprises at least 50 percent of the heat input according to a permit requirement. When firing bagasse, these boilers will be unable to meet the proposed 50 ppm CO limit for coal-fired boilers. The industry suggested that boilers burning a majority of biomass/bagasse should be classified in the biomass or bagasse category as opposed to the coal category.

Additional Data

 EPA requested that the industry support its submitted comments with all available data. The industry indicated that it has submitted 10 years worth of data, where it is available and representative of current operating conditions. Industry also indicated that it is reviewing its submitted data and submitting corrections in the next month.