6/8/2010 1



# Revision of Subpart AAA Residential Wood Heaters & Additional New Source Performance Standards (NSPS) Pre- Panel Outreach Meeting with Small Entity Representatives (SERs)

June 29, 20106/8/2010 2 

# Agenda
 

### Introduction  

### Background, perspective, and regulatory history  

### Overview of proposals under consideration  

### Applicable small entity definitions  

### Small entities that may be subject to the regulation  

### Regulatory Flexibility Options for Small Entities  

### Example options by sub-categories  

### Very large benefits  

### Costs6/8/2010 3 

# Background

 Current rule requires manufacturers of new residential wood heaters (e.g., wood stoves) to design heaters to meet particulate emission (PM) limits, have representative model lines tested by EPA-accredited labs, and attach EPA labels and hangtags after EPA approval  Originally promulgated February 26, 1988  Proposal was first regulatory negotiation by EPA (included industry, labs, states, consumer advocates)  Not substantively reviewed until now  Revisions are not negotiation but are transparent, open government rulemaking (www.epa.gov/open )6/8/2010 4 

# Perspective : Wood Smoke PM2.5 

# Emissions Are Significant  2008 National Emission Inventory: 2,449,000 tons  2008 Residential Wood Combustion:(~13%) 318,323 tons  Fireplace: general 51,132  Woodstove: fireplace inserts, non -certified 54,286  Woodstove: fireplace inserts, certified, non -catalytic 12,017  Woodstove: fireplace inserts, certified, catalytic 4,245  Woodstove: freestanding, non -certified 71,424  Woodstove: freestanding, certified, non -catalytic 15,092  Woodstove: freestanding, certified, catalytic 7,911  Woodstove: pellet-fired, general 1,798  Furnace: indoor, cordwood -fired, non -certified 36,213  Hydronic Heater: outdoor 50,427  Outdoor Wood Burning Device 7,105 Note : Wood smoke emissions also include other pollutants. Nationally, residential wood combustion accounts for 44 percent of total stationary and mobile polycyclic organic matter (POM) emissions and 62 percent of the 7-polycyclic aromatic hydrocarbons (PAH), which are probable human carcinogens and are of great concern to EPA.

# Perspective : Wood Smoke Can Cause Significant Health Effects  There are a number of communities where residential wood smoke can increase particle pollution to levels that cause significant health concerns (e.g., asthma attacks, heart attacks, premature death).  Several areas with wood smoke problems either exceed EPA’s health - based standards for fine particles or are on the cusp of exceeding those standards.  For example, residential wood smoke contributes 25 percent of the wintertime pollution problem in Keene, New Hampshire.  In places such as Sacramento, California, and Tacoma, Washington, wood smoke makes up over 50 percent of the wintertime particle pollution problem.6/8/2010 6 

# Perspective : State, Local, and Tribal Officials Working to Reduce Wood Smoke Emissions  Wood smoke programs are very important in numerous areas working to attain or maintain the National Ambient Air Quality Standards (NAAQS) or to avoid exceeding the NAAQS.  Some have implemented changeouts; some have implemented burn bans; while others have implemented combinations of education, wood - burning curtailment and changeout programs.  EPA has provided: “Strategies for Reducing Residential Wood Smoke”, EPA-456/B-09-001,October 29, 2009 http://www.epa.gov/ttn/oarpg/t1/memoranda/strategies-doc-8- 11 -09.pdf  For areas that are not meeting or may not meet the NAAQS for fine particles, EPA has encouraged a wood smoke reduction plan to achieve wood smoke emission reductions as soon as possible.6/8/2010 7 

## Perspective : EPA Encourages Replacement of PreNSPS Wood Stoves with Newer, Cleaner Appliances
 Replacing pre- NSPS wood stoves with newer, cleaner, more efficient appliances, can reduce fine particle emissions by ~70%  EPA’s wood stove focus of the last 5 years has been on encouraging replacements because they can result in very large emission reductions, greater energy efficiency, less wood burned, and less money wasted.  For example, a wood stove changeout program implemented in Libby, Montana changed out over 1,100 wood stoves and reduced wintertime particle pollution levels by 7 micrograms per cubic meter (~28%). This reduction has helped Libby attain the 1997 annual and 24-hour fine particle national standards. Also, indoor pollution was reduced by ~70%.  Over 44 areas have conducted changeout campaigns. For more info, see www.epa.gov/burnwise  While changeouts can provide significant air quality improvements, EPA and NACAA (National Association of Clean Air Agencies) and industry want the replacements to be today’s technology, not 1988 technology!  When asked, EPA has been very supportive of tax incentives for more efficient and cleaner appliances.6/8/2010 8 

# Perspective : EPA Encourages Best Practices via “Burn Wise”  

### “Learn before you burn”  

### “Burn the right wood, the right way, in the right appliance”  

### “Your choices and actions make a difference”  

### “A properly installed, correctly used wood -burning appliance should be smoke-free. If you see or smell smoke, that means you may have a problem”  

### EPA continues to coordinate efforts with industry and NACAA  

### For more info, see www.epa.gov/burnwise6/8/2010 9 

# Serious Concerns about Hydronic Heaters, aka Outdoor Wood Boilers  

### An outdoor wood boiler (OWB) combusts wood to heat water that is typically piped to another building for heat and hot water  

### Technically, it is not a “boiler” but a “hydronic heater” (it typically heats but doesn’t boil the water)  

### Old dirty OWBs are a significant problem in numerous areas because of high emissions, short stacks, too close to neighbors  

### A few pictures to illustrate...6/8/2010 10 

# How Outdoor Wood Boilers Work

Diagram Courtesy of HPBA6/8/2010 11 Photos courtesy of V

ermont DEC Photos of OWB Emissions6/8/2010 12 

# Petition to Regulate OWBs  

### From 6 northeastern states plus Michigan and NESCAUM (Northeast States for Coordinated Air Use Management)  

### Requested EPA develop an NSPS for OWB or revise the current wood stove NSPS to include OWB  

### Our initial response:  We developed a voluntary program and provided technical and financial support for NESCAUM model rule... faster than an EPA regulation...  Phase 1 rolled out January 2007  22 partners, 12 qualified models (70% reduction)6/8/2010 13 

# Industry Request for OWB Rules  

### September 27, 2007 letter  From Hearth, Patio, and Barbecue Association (HPBA)  Outdoor Wood -fired Hydronic Heater (OWHH) Caucus 

###  

### Expressed “unanimous support for EPA establishment of an NSPS for OWHH”  

### Their concern was proliferation of local bans and state rules with differing requirements6/8/2010 14 

# Wood Stove NSPS Revision Request  

### April 29, 2008 joint letter to EPA  From NESCAUM and WESTAR (Western States Air Resources Council) 

###  

### Requesting:  “review and revision of the current residential wood heater/ indoor wood stove NSPS to capture the broader suite of RWD (residential wood heating devices)”  “fireplaces, masonry heaters, pellet stoves, and indoor and outdoor wood boilers, furnaces, and heaters... we urge EPA to develop standards...”6/8/2010 15 

# EPA Initial Response: Develop Additional Voluntary Programs  

### Faster than a Federal Regulation  

### October 2008 Phase 2 Hydronic Heaters Program  Tightened qualifying level (~90% overall reduction), expanded to indoor units, other solid biomass  13 Phase 2 models have qualified, more in pipeline 

###  

### February 2009 Low- Mass (Manufactured) Fireplace Program  Phase 1 and Phase 2 simultaneously 

###  

### July 2009 expanded to include Masonry Fireplaces  6 models have qualified at Phase 2 level (~70% reduction), more in pipeline  Considering tightening Phase 2 level6/8/2010 16 

# EPA Announcement for Review and Revision of the NSPS  

### Draft Review Document prepared  

### Draft Preliminary Conclusions prepared  

### Drafts released on November 4, 2009  

### Have conducted numerous outreach presentations  

### Have posted info on Burn Wise website6/8/2010 17 

# Overview of Proposals under Consideration  Tighten emission limits to reflect today’s Best Demonstrated Technology (BDT)  Close “loopholes,” eliminate exemptions (e.g., cook stoves)  Add pellet stoves explicitly  Add wood “boilers” (hydronic heaters) and furnaces  Revise test methods as appropriate  Streamline certification process & incorporate International Standards Organization (ISO) process plus compliance affirmation  Improve compliance assurance & enforceability  Regulate fireplaces  Regulate devices fueled by other solid biomass, e.g., corn, various pelletized biomass  Regulate coal -fired heaters (in order to level the playing field)6/8/2010 18 

# No Recommended Specific Emissions Limits Yet Because Data Are Still Being Analyzed **For example :**   An analysis shows that the burn rates used in 1988 for the NSPS should be increased an unspecified amount because of differences in burn end points in test methods used.  HPBA has provided additional information on fireplace potential emission reductions.  HPBA has provided a review of emissions per burn rate for certified stoves; however, there is concern that the NSPS equation for conversions between 5G and 5H is erroneous and needs to be re-established. EPA-accredited labs will conduct additional tests to do this.  EPA is using § 114 authority to request data for currently exempt pellet stoves.  EPA is reviewing costs and analyzing market and economic data.  Bioenergy2020+ has recently finalized a review of advanced combustion technology performance in Europe.  Catalytic Hearth Coalition is conducting a review of catalytic performance versus time.  EPA’s Office of Research and Development is analyzing results of their tests of hydronic heaters, including typical and advanced designs.6/8/2010 19 

# Still Reviewing Test Methods **For example :**   EPA & HPBA are participating on numerous ASTM work groups  HPBA participated on revision of Canadian method B415.1  NYSERDA (New York State Energy Research and Development Authority) and EPA and others are reviewing European test methods  Continuing concern of “real world variability ” vs. lab tests, cribs, etc.  Continuing discussions on emissions averaging (burn rate weightings), low burn rate, number of runs, time for hot start, caps, degradation, etc.  Efficiency test methods (ASTM, CSA B415.1, etc.)6/8/2010 20 

# Anticipate More Inclusive Scope

 **Pellet stov** **es** – emission data show excellent performance potential with premium pellets; need pellet fuel quality standards to ensure good performance and lower emissions  **Masonry**

**h eaters**  – considering development of 2-prong NSPS (emission limit and design option)  **Cook stov es**  – considering improved definition of “**traditional North A** **merican cook stov** **es**” (estimated to affect <2000 units)  Also considering definitions of “**traditional Nativ** **e Am** **erican bake ov** **ens**” and “**ceremonial fires** ” so that they may be excluded  **Hy dronic**  **heaters**  Over a dozen U.S. models already qualified at Phase 2 voluntary level  Typical European levels are much lower than Phase 2 voluntary level  Some new designs avoid operation at typically dirty low burn rates  Considering requiring heat storage which greatly reduces emissions  **Furnaces** – manufacturers are beginning to get on board with developing BDT  **Fireplaces** – numerous air agencies want regulations but HPBA has recommended that EPA allow the voluntary program to mature first  **Coal** – asked for data, will test, may use transfer of technology6/8/2010 21 

# Pollutants
 

### PM 2.5 

### (>85% of the PM) is our focus  

### Black Carbon, CO, CO 2 

### , CH 4 

### , N 2

### O?  Limited testing planned, principally for informational purposes  Perhaps CO and efficiency limits which will also reduce PM 2.5 emissions6/8/2010 22 

# Environmental Justice  

### A tighter, more comprehensive NSPS will reduce environmental impacts for all  

### Preliminary draft analysis results show no disparate impacts nationally  

### We may look closer at a few specific geographic areas  

### For now, we foresee no EJ -focused changes to the NSPS that would not apply to everyone6/8/2010 23 

# Compliance & Enforcement Aspects **We intend to** :  Streamline certification process --- develop electronic system for submittals and approvals  Improve compliance assurance --- inspections of labs and manufacturers, random audits, monitor websites and trade shows and fairs, alert foreign companies  Make consumer-friendly --- Burn Wise website, spreadsheets of certifications ranked by emissions, tested efficiency, output  Incentivize lab proficiency testing?  Streamline recordkeeping and reporting of manufacturing tolerances and quality control  Require compliance tests on “worst” grade of each type of pellet that manufacturer specifies/warrants for use  Require Federal rules on pellet quality if adequate industry standards are not in place in time (see next slide)6/8/2010 24 

# Pellet Standards Specifications Needs

 EPA has encouraged pellet manufacturers and appliance manufacturers to quickly meet and agree on grades of necessary characteristics, for example:  Durability  Ash %  Fines %  Fusion properties  Limits on bark, dirt, sand, construction debris, chemicals, etc.  Tailored QA/QC plans, training, transparency  Testing frequency tailored to results  Not just 3 rd party analyses but also 3 rd party inspections, approval of QA/QC plans, sampling, auditing, corrective actions, certification of conformity, reporting of results  Goal: pellets that consumers, manufacturers, and Congress can consistently depend upon as they consider decisions to buy and/or support biomass6/8/2010 25 

# Small Business Definitions  

### Most of the affected companies are small businesses  

### Typically the size cutoff is 500 employees. Most of the affected companies are much, much smaller than that  

### A few are subsidiaries of large companies, e.g., Hearth and Home Technologies is a subsidiary of HNI Corporation6/8/2010 26 

# Small Businesses Affected
 

### There are some small businesses in every sector of the residential heater industry  

### Thus, we are considering minimizing potential impacts on small businesses throughout the rule development effort6/8/2010 27 

# Regulatory Flexibility Options for Small Entities
 Since most companies are small businesses, we will carefully consider all options  Current NSPS gave additional time for initial compliance for small volume manufacturers – we expect to do that again  Current NSPS allows manufacturers to show compliance by model lines rather than testing each source – we expect to continue that approach to reduce costs  As we transition to an ISO-accredited lab approach, we expect to give additional time to small labs that have experience as EPA-accredited labs  For masonry heaters and site-built masonry fireplaces, we are working with the companies to consider a 2-prong NSPS that allows use of previously approved equipment standard options in lieu of testing each new model line  For single-burn -rate appliances, we are working with the companies to consider appropriate modifications to the test method  For “traditional North American cook stoves” and “camp stoves”, we are working with the companies to consider definitions/equipment standards to reduce impacts  For “traditional Native American bake ovens”, we are working with Tribes to develop a definition that will likely exclude such devices  For indoor and outdoor hydronic heaters and forced air furnaces, we are working with industry to consider appropriate modifications to the test method to consider more flexibility in heat storage options and burn rate options6/8/2010 28 

# Options for Emission Limits
 

### Emission levels and costs are still being developed  

### Thus, the following slides are examples for early discussions only6/8/2010 29 

# Wood Stove Example Options  

### 1988 NSPS:

 7.5 g/hr for non -catalytic  4.1 g/hr for catalytic 

###  

### 1998 Washington State limits

 4.5 g/hr for non -catalytic  2.5 g/hr for catalytic  On sales-weighted basis, over 85% meet today  Require at promulgation? 

###  

### New NSPS limits for 2014

 3.0 g/hr for either? (~half of “WA stoves” meet today)  2.5 g/hr? (~1/4 of “WA stoves” meet today)  2.0 g/hr? (>12% of “WA stoves” meet today)6/8/2010 30 

# Pellet Stove Example Options
 1988 NSPS:  7.5 g/hr for non -catalytic  4.1 g/hr for catalytic  However, most pellet stoves are exempt via the 35:1 air-to-fuel ratio exemption  1998 Washington State limits:  4.5 g/hr for non -catalytic  2.5 g/hr for catalytic  Oregon tax credit level: 2.5 g/hr  Require at promulgation?  Match Wood Stove NSPS 2014 level: ~2.0 g/hr?  over 2/3 of pellet stoves meet today  Pellet Stove NSPS 2014 level: 1.0 g/hr ?  over 1/3 of pellet stoves meet today6/8/2010 31 

# Hydronic Heater Example Options

 Exempt from 1988 NSPS  Typical emissions: >4 lb /mmBTU heat output  EPA 2010 Phase 2 Voluntary Level:  0.32 lb / mmBTU heat output  >14 EPA-qualified models already  Require at NSPS promulgation?  Typical State 2010 regulatory level:  0.32 lb / mmBTU heat output  Many local jurisdictions ban HH  New NSPS limit for 2014 ?  0.20 lb / mmBTU heat output ?

 >7 EPA-qualified models already  0.15 lb/mmBTU heat output?

 >3 EPA-qualified models already  >100 models qualified by EN 303-05 are estimated to meet this level  Maine Voluntary Phase 3 level:  0.06 lb/mmBTU heat output

 Many models qualified by EN 303-05 models are estimated to meet this level6/8/2010 32 

# Fireplace Example Options

 Most are exempt from 1988 NSPS via exemptions for >35:1 air-to-fuel ratio or “open masonry fireplace constructed on site”  Typical emissions: 12 g/kg where not regulated  1988 Washington State limit  7.3 g/kg of wood burned  EPA 2010 Phase 2 Voluntary Level:  5.1 g/kg  EPA 2011 Phase 2 Voluntary Level  TBD g/kg of wood burned?  Typical California AQMD 2010 regulations:  Ban  NSPS 2014 levels ?  Allow Open doors: 4.0 g/kg?

 >4 models already meet this level  Require Closed doors: 1 g/kg?

 numerous models can meet this level with doors closed6/8/2010 33 

# Masonry Heater Example Options  

### Exempt from 1988 NSPS via weight exemption (800 kg)  

### Colorado limit: 6 g/kg  

### Industry request for EPA to initiate voluntary program:  2.0 g/hr daily average, 0.13 g/MJ (0.32 lb/mmBTU heat output) 

###  

### NSPS 2014 level?  2.0 g/hr daily average, 0.32 lb /mmBTU heat output, plus 7.5 g/hr max while burning6/8/2010 34 

# Single-Burn-Rate Appliance Example Options  

### Exempt from 1988 NSPS  

### NSPS 2014 level?  “Camp stoves” must be for temporary use?  Same as wood stoves, except burn rates?6/8/2010 35 

# Cook Stoves Example Options
 

### Exempt from 1988 NSPS  

### NSPS 2014 levels?  Design requirements for “North American traditional cook stove”?
 Estimates of less than 3000 units per year  Some States, same as wood stoves  European BAT: 3.0 g/hr?6/8/2010 36 

# Forced-Air Furnace Example Options  

### Exempt from 1988 NSPS  

### Canadian B415.1 level  0.60 lb/mmBTU heat output  Require at NSPS promulgation? 

###  

### NSPS 2014 level?  Same as hydronic heaters?
 To level the playing field  Allow longer time?6/8/2010 37 

# Coal Stoves Example Options
 

### Exempt from 1988 NSPS  

### NSPS 2014 level?  Same as wood stoves?
 To level the playing field  Allow longer time?6/8/2010 38 

# Very Large Benefits
 

### Will be more specific after the options are clearer  

### For perspective, the overall benefits for wood residential wood smoke emission reductions are ~$500,000/ton of PM 2.5 

### emissions reduced (actual values will vary by location)  

### For example, the benefits of changing out all the old wood stoves in the U.S. to 1988 NSPS level appliances are $35 billion to $86 billion per year  

### This is based principally on reductions in mortality, non -fatal heart attacks, and chronic bronchitis6/8/2010 39 

# Costs
 

### Will be more specific after the options are clearer  

### For perspective: wood stove retail sales prices are correlated with looks and size more than emissions... marketed “like furniture and how it looks in the room”  

### For perspective: there are large differences in base costs within most appliance categories, regardless of emission considerations  

### For perspective: hydronic heater Phase 2 voluntary program model sales prices are ~25% greater than base model prices6/8/2010 40 

# Contacts:
Gil Wood wood.gil@epa.gov (919) 541 -5272 David Cole cole.david@epa.gov (919) 541 -5565