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Polyonics, Inc. ] FINAL RACT ORDER 867 Route 12, Unit 4 ] December 28, 2007 Westmoreland, NH 03467 ] ARD07-004

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A. Introduction This RACT Order is issued by the New Hampshire Depa rtment of Environmental Services, Air Resources Division, to Polyonics, Inc., pursuant to RSA 125-C.

B. Parties 1. The New Hampshire Department of Environmental Se rvices, Air Resources Division (DES), is a duly constituted administrative agency of the Sta te of New Hampshire having its principal offices at 29 Hazen Drive, Concord, NH 03302, telep hone number (603) 271-1370. 2. Polyonics, Inc. (Polyonics) is a New Hampshire c orporation doing business at the mailing address of 867 Route 12, Unit 4, Westmoreland, NH 0 3467, telephone number (603) 352-1415.

C. Statements of Fact and Law

1. Polyonics owns and operates a facility located on R oute 12 in Westmoreland, NH primarily engaged in the manufacturing of pressure sensitive tagging and labeling materials. The coating process consists of two 12-inch web coaters that ap ply coatings onto non-paper webs.

2. Effective December 31, 2002, DES re-adopted the New Hampshire Code of Administrative Rules Env-A 1204, Stationary Sources of Volatile Organic Compounds (V OCs) with amendments. This part defines the sources that are subject to Reasonably Available Control Technology (RACT) requirements and specifies the RA CT requirements. 3. Env-A 1204.10, Applicability Criteria and Compliance Standards for Coating of Paper, Fabric, Film and Foil Substrates , applies to any source whose paper, fabric, film, or foil coating operations, including specialty printing, have a co mbined potential to emit, during any consecutive 12-month period, of at least 10 tons of VOC. 4. Polyonics has estimated that the Facility has a potential to emit approximately 30 tons of VOCs per year. 5. In the cover letter to the permit application re ceived by DES on May 8, 2001, Polyonics requested an annual facility-wide limit of 10 tons of VOC emissions. 6. On February 20, 2002, DES issued State Permit to Operate No. FP-S-0171 to Polyonics for a five-year term. Condition V of the permit exempts Polyonics from the requirements of Env-A 1204.10 provided that the combined, actual VOC emis sions from all coating operations do not exceed 10 tons during any consecutive 12-month peri od. 7. From the time that Polyonics started operating in 1996 to August 2006, actual VOC emissions have been less than 10 tpy.RACT Order No. ARD07-004 December 28, 2007

Polyonics, Inc. Page 2 of 6 8. Polyonics’ actual VOC emissions exceeded the 1 0 ton permit limit at the end of August 2006, making them subject to Env-A 1204.10. 9. On May 1, 2007, DES and Polyonics executed an Administrative Order by Consent (AOC) No. ARD 07-002 (as amended on July 16, 2007). The AOC, as amended, required Polyonics to purchase and retire Discrete Emission Reductions (D ERs) for excess emissions in 2006 and for estimated excess emissions that will occur in 2007. The AOC also listed compliance deadlines for the installation of pollution control equipment

. 10. On May 10, 2007, Polyonics submitted an appli cation for the installation of a catalytic oxidizer. The application also served as an applic ation for a VOC RACT Order that will allow for the generation and use of DERs for VOC RACT com pliance. 11. On July 18, 2007, DES issued Temporary Permit, FP-T-0152, which allows Polyonics to install and operate a catalytic oxidizer to control VOC emi ssions from its two web gravure coaters.

D. Order Based on the statements of fact and law, DES hereby orders Polyonics, effective upon issuance of this Order, to comply with the following requiremen ts as RACT: 1. Coating of Paper, Fabric, Film and Foil Substra tes under Env-A 1204.10: For those processes applying a coating to any woven or non-woven, fibrous or non-fibrous substrate, including paper, fabric, glass matting, plastic film, ribbon, and magnetic tapes, Polyonics shall comply with the following emission limit for each coating used: 2.9 pounds of VOC per gallon of coating, as applied, excluding wa ter and exempt compounds. 2. Alternative Methods of Complying with Env-A 120 4.10

As an alternative to the emission rate limit stated in D.1 above, Polyonics may use add-on controls, bubbling, DERs or any combination of the previous methods, and comply with a solidsbased emission rate limit as calculated in D.4. 3. Catalytic Oxidizer Operation Polyonics shall operate a catalytic oxidizer (oxidi zer) at all times that the coaters are in operation except during times of malfunction or maintenance. The oxidizer shall be operated pursuant to the following conditions: (i) The oxidizer shall be operated at a minimum c ombustion chamber temperature of 650°F. (ii) The oxidizer shall be maintained in a manner consistent with the manufacturer’s recommendations; and (iii) Polyonics shall operate and maintain equipm ent to continuously monitor and record the temperature of the oxidizer’s combustion chamber an d the exhaust.RACT Order No. ARD07-004 December 28, 2007

Polyonics, Inc. Page 3 of 6 4. Calculation of Emission Standard On a Solids Ba sis

The emission rate limit shall be determined on a so lids basis, as specified below: (i) “S” means the VOC emission standard in terms of pou nds VOC per gallon of coating solids; (ii) “E c ” means the VOC emission limit as stated in Part D. 1, above; and (iii) “d A ” means the actual mass density of the VOC in the a pplied surface coating formulation in terms of lb VOC/gal VOC; and (iv) S shall be equal to E c divided by the difference between one and the quot ient of E c and d A , as in the following equation:



## [ ] A c c d/ E 1 E S

− =

5. Calculation of Allowable VOC Emissions per Coat ing

The allowable VOC emissions shall be calculated for each coating as follows: (i) “E al ” means the allowable VOC emission rate of a given coating in units of lb/day or kg/day; (ii) "S" means the VOC emission standard in terms of lb VOC/gal or kg VOC/l of coating solids, as calculated in Part D.4, above; (iii) "W" means the weight of coating or dilution solvent used in the coating line on a given day in units of lb/day or kg/day; (iv) "D" means the density of the coating or dilut ion solvent in units of lb/gal coating, or kg/l coating as determined from Method 24 or 24A an alysis; (v) "V S " means the volume fraction solids content of the c oating, in units of gal solids/gal coating or l solids/l coating as determined by calc ulation using the formulation; and (vi) " E al " shall be equal to the product of S, VS and W divi ded by D for each coating or dilution solvent used, as in the following equation :

E al = S*V S *(W/D) 6. Calculation of Actual VOC Emissions per Coating

The VOC emissions shall be calculated for each coat ing as follows: (i) “E unc ” means the actual, uncontrolled VOC emission rate of a given coating in units of lb/day; (ii) "W" means the weight of coating or dilution solvent used in the coating line on a given day in units of lb/day; (iii) “W V ” means the weight fraction of VOC content of the c oating, in units of lb VOC/lb coating as determined by calculation using the form ulation; and (iv) “E unc ” shall be equal to the product of W and WV, as in the following equation:

E unc = W*W VRACT Order No. ARD07-004 December 28, 2007

Polyonics, Inc. Page 4 of 6 (v) “E c ” means the actual, controlled VOC emission rate of a given coating in units of lb/day; (vi) “DRE” means the destruction removal efficienc y of the pollution control device as measured during the most recent emissions testing o f the unit. 1

(vii) “E c ” shall be equal to the product of E unc and one minus the DRE, as in the following equation:

E c = E unc * (1 – DRE)

7. Emission Credit Use and Generation Calculations The calculations for generation or use of DERs shal l be done on a daily basis. (i) Control Device Operating - Generation of DERs: a. Compliant Coatings: When a coating that meets the emission limits of D .1 is in use, emission credits may only be generated for the amount of emissions that are controlled by the control device. The amount of credits generated for a comp liant coating shall equal the difference between the actual uncontrolled and cont rolled emission rates as calculated in D.5, above (E unc – E c ). b. Non-Compliant Coatings: When a coating is used that does not meet the emis sion limits of D.1, the amount of credits generated shall equal the difference betwee n the actual, controlled emissions and the allowable emissions (E al – E c ).

c. Calculation of DERs: DERs shall be calculated by multiplying the total amount of credited emissions calculated for the individual coatings by a safety factor of 0.9. (ii) Control Device Not Operating – Bubble and Use of DERs:

For times that the control device is shut down due to malfunction or maintenance, Polyonics shall be allowed to bubble the emissions from multiple coatings and/or use DERs to offset excess emissions.

Excess emissions shall be calculated for each coati ng by subtracting the actual emissions from the allowable emissions (E al – E unc ). The excess emissions from all the coatings shall be added together (bubbling), and ba sed on the results, one of the following shall be required: a. If the result of the bubble calculation is a po sitive number, then the source is in compliance with the emission limits and no further action is required.

b. If the result of the bubble calculation is a ne gative number, then actual emissions exceed the allowable emission rates and need to be offset with the use of credits. The actual DERs required shall be calculated by tak ing the absolute value of the total excess emissions and dividing by an environme ntal benefit factor of 0.9.

1 Prior to the initial compliance test of the contr ol device, DRE shall be equal to 99.0%.RACT Order No. ARD07-004 December 28, 2007

Polyonics, Inc. Page 5 of 6 8. Recordkeeping Requirements Polyonics shall maintain the following records in o rder to demonstrate compliance with this order. Each record shall be kept for a period of a t least five years. (i) Records of all air pollution control equipment activities, including: a. Records of temperature readings taken on the ox idizer; b. A log of operating times of the oxidizer; and c. All pollution control equipment maintenance rec ords, including preventative maintenance and annual visual inspections. Records shall include the date and duration of any outages. (ii) Polyonics shall maintain all records of the ca lculations related to the generation and use of DERs as specified in Condition D.7. 9. Reporting Requirements Polyonics shall submit the following reports to de monstrate compliance with this Order: (i) Annually by November 30, Polyonics shall submit a report to DES on the projected use of credits for the upcoming year. This report shall m eet the requirements of Env-A 3104.08, Notice of Intent to Use DERs , including the following information: a. The name and location of the user; b. A copy of the Notice and Certification of Gene ration submitted by the generator source to the State (for paperwork reduction purposes, a c ertified statement that the notice is on file with DES will suffice); c. The protocol used to document the amount of DE Rs needed to demonstrate compliance; and d. Information documenting that Polyonics is in co mpliance with Env-A 1400, Regulated Toxic Air Pollutants

. (ii) Annually by April 15, Polyonics shall submit a report to DES on the balance of credits for the previous calendar year. This report shall meet the requirements of Env-A 3103.08, Notice and Certification of Generation and Env-A 3104.09, Notice and Certification of Use

, including the following information: a. The name and location of the owner or operator of the source; b. A brief description of the generation activity ; A list of the source’s applicable allowable emissio n rates; c. The amount of DERs generated each month; d. A calculation of the amount of DERs generated; e. The amount of DERs used each month; f. A calculation of the amount of DERs required t o demonstrate compliance with the emission limits stated in Part D, above. g. A statement that the reductions were calculate d in accordance with Env-A 3103.07;RACT Order No. ARD07-004 December 28, 2007

Polyonics, Inc. Page 6 of 6 h. A statement that the DERs were not generated in whole or in part from actions prohibited pursuant to Env-A 3103.07; i. A statement that due diligence was made to ver ify that the DERs were not previously used, and not generated as a result of actions proh ibited under the regulations or other provisions of law; j. A statement that the DERs were not used in a m anner prohibited under the regulation or other provisions of law; and k. The report shall contain a certification by a r esponsible official that states: (1) Based on information and belief formed after r easonable inquiry, the statements and information in the document are true, accurate and complete; and (2) The user source is in compliance with all Nati onal Ambient Air Quality Standards, except ground level ozone, and all Ambie nt Air Limits for Regulated Toxic Air Pollutants.

Please address any correspondence and communication in reference to this Order to the following:

Ms. Barbara Dorfschmidt NHDES, Air Resources Division Permitting and Environmental Health Bureau 29 Hazen Drive P.O. Box 95 Concord, NH 03302-0095 (603) 271-6796 Please address any correspondence and communication in reference to the ERCs or DERs to the following:

Mr. Joe Fontaine NHDES, Air Resources Division 29 Hazen Drive P.O. Box 95 Concord, NH 03302-0095 (603) 271-6794

_____________________________ Robert R. Scott Director Air Resources Division

cc: Timothy Drew, PIP Office Anne Arnold, USEPA Town of Westmoreland Barry Needleman, McLane, Graf, Raulerson & Middleto n Professional Association Howard Plante, GZA GeoEnvironmental, Inc.