# Testimony of the Hardwood Plywood and Veneer Association

EPA ANPR Formaldehyde Emissions from Pressed Wood Products EPA

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OPPT

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C.T. “Kip “ Howlett Jr. President Hardwood Plywood and Ve neer Association Jan. 29, 20092



## Testimony on EPA ’s ANPR for National Product Emission Standards for Formaldehyde from Certain Wood Products Submitted by the Hardwood Plywood and Veneer Association (HPVA)

Backg round: EPA has published an Advance Notice of Proposed Rulemaking in response to a petition filed by the Sierra Club and 25 other organizations to have the California Air Resources Board ( CARB ) formaldehyde emission limits on composite wood products become national standards. The authority that the Sierra Club petitions the EPA to use is under the Toxic Substances Control Act (TSCA). HPVA submitted comments to EPA in response to that petition.

Discussion: EPA requests specific information as part of this no tice, asks for views on the legal authority it should utilize, raises questions about the health effects of formaldehyde and announces that the National Academy of Sciences will conduct a review, and sets out schedule for regional hearings over the next tw o months. W ritten comments of the Hardwood Plywood and Veneer Association (HPVA) on this ANPR will be submitted later to EPA

. HPVA is pleased to testify at the public hearing in Washington D

. C. on January 29, 2009.

H PVA represents the hardwood plywood ( HW PW ) manufacturers in the U.S. and Canada. HPVA also represents the hardwo od veneer (V), and engineered hardwood flooring (EWF) industries in the US and Canada. HPVA only represents companies who manufacture in the US, Canada,
and Mexico. In the HWPW and EW F sectors, HPVA represents more than 90% of the North American production capacity. However, over the last 10 years, over 60% of U.S. HWPW domestic production capacity has been permanently shut down. Moreover, at the present time because of the recession, operating rates are at 50% of this current, reduced US capacity. Imports now take a n 8 0% share of the domestic U.S. market , and China now accounts for about 55% of those imports.

HPVA is a Third Party Certification organization (T PC

- 8) approved by CA RB and additionally has over 25 ye ars of formaldehyde emissions certification experience. HPVA has been a certifier of HWPW used in manufactured housing under the HUD program since its inception. HUD has the only national formaldehyde emission standard for these products but is mandatory o nly for3

manufactured housing

. It is used voluntarily in other applications when the HWPW bears the ANSI/HP V A HP

- 1 stamp.

HPVA supports the CARB emission limits for HWPW becoming national standards.

These CARB emission standards are basically de facto natio nal standards now as currently 75%
and soon 90% or more of North American (U.S. and Canada) HWPW manufacturing production
will be CARB certified. ANSI/HPVA HP

- 1 and ANSI/HPVA EF national consensus standards are being revised now to incorporate th e CARB emi ssion limits and will go out for canvas shortly.
These national consensus standards currently require conformance to HUD’s emission values and apply to any use when the product is certified for these certification stamps. These
standards are also common re ference standards for significant segments of the market: home building (NAHB Green Building Standard)

, kitchen cabinets ( KCMA’s Environmental Stewardship Program)

, and other programs.

HWPW is a specialty product not a commodity product

. HWPW is a very he terogeneous product. HWPW is manufactured with different real wood veneer faces, primarily HW species but SW decorative species as well. HWPW is manufactured using a wide variety of cores, most are veneer core (VC) (75%), particleboard (PB), medium densit y fiberboard (MDF), Combination Cores (veneers and thin MDF for example), and lumber core (<2%). HWPW comes in a wide variety of thicknesses and performance properties. The key point is that the HWPW emission standard is the same irrespective of these wide variabilities

.
By contrast, h omogeneous wood products include particleboard ( PB )

, medium density fiberboard ( MDF ) , construction grade softwood plywood (SWPW) or oriented strand board ( OSB )

, hardwood ( HW ) pulp, or softwood ( SW ) pulp

.
On Jan. 1, 2010, t here will be two emission standards in effect for HWPW

- VC : 0.05 ppm for standard product and 0.04 ppm for exempt product. On July 1, 2010, HWPW made with composite cores (HWPW

- CC) which include PB, MDF, lumber cores, and combinations of these products must meet the 0.05ppm for standard products and 0.04ppm for exempt products. The difference between these emission limits is only 0.01ppm which is also the narrowest differential of any of the regulated composite wood products. Exempt HWPW product s cannot have a test result that exceeds 0.05p p m and 90% of the tests must be 0.04ppm or lower. Exempt products use No Added Formaldehyde ( NAF ) or Ultra Low Emitting Formaldehyde ( ULEF ) resin systems. (Note: To qualify for a LEED credit a NAF or No Added Urea Formaldeh yde (NAUF) which would be in the ULEF product category in the CARB system would be acceptable.)4

HWPW has the lowest emission standards of any of the regulated products. See Table I for the Comparison of Emission Limits

. There is a wide variety of resin systems in use to meet these standards ranging from soy based, PVA, PF, and modified UF systems . Resins are 4.5

- 8 % of HWPW by weight compared to PB and
MDF which will be 9

- 1 2 % by weight. Costs and technical application issues will vary by plant depending o n the type and age of the equipment.

As a TPC we are observing success in achieving compliance with the CARB emission limits utilizing a range of different technologies. Another concern will be meeting other product physical performance requirements that are required to meet Building Code and other mandated performance properties. These requirements can include glue bond and fire performance.

Resin use can also impact the performance of environmental control equipment. In order to insure compliance with e nvironmental operating permits, those operating parameters also
have to be considered.

The key point is that changing resin systems varies by plant, equipment, product mix, markets served, and a variety of other factors. Co n version of resin systems include s both capital and increased operating costs. Changing resin systems can also affect plant productivity if resin press time cycles are slowed which also results in increased costs with conversion. This change is not a simple task.

The CARB emission limits for HWPW should apply universally to all HWPW products.

The CARB standard has a very significant flaw in that it contains different definitions for the identical product (HWPW) in order to bifurcate the regulatory compliance solely on the basis of
the kin d of manufacturer who are both making HWPW but one is classified as a manufacturer
and the other a “fabricator”. For one class of manufacturers the emission limits apply, but for
the other class a giant loophole has been created. See Appendix A.

Veneer cores are the most common cores used to manufacture HWPW, and t here is no CARB
standard for v eneer c ores (VC)

. A Veneer Core is not h ardwood p lywood because it does not
have a decorative face and back veneer . Veneer core is plywood but it is a “plywood core” and CARB has no formaldehyde emission requirement for “veneer (plywood) core ” platforms.5

HWPW is manufactured laying up the veneers including the face and back and pressing them to
make the sheet of HWPW. The other me thod is pressing the face and back onto a VC platform, PB, MDF, or combination . Both methods are used in the production of HWPW and EWF. “Fabricators” do the very same thing.

The critical problem is the need to reduce CARB approved emissions for PB and MDF when they
are used as a core in HWPW and for VC which has no mandatory emission limit to meet the
HWPW limits

. 1 In all three (3) cases, a single emission value must be met at the end of any of these combination of processes to have a CARB certified HWPW product.

The resin syste ms used to apply the face and back decorative veneers and the veneers themselves must combine to reduce the emissions of CARB compliant PB and MDF by 45 to 67% in order to meet the emission standard for HWPW when a “manufacturer” produces the HWPW using th ose products as cores. This is not the requirement for a “fabricator” who makes the same end product. A manufacturer, whether they lay up all the veneers or apply a face and back to a purchased veneer core, PB or MDF core would have to meet the applicable HWPW
emission standards.

A fabricator applying a face veneer to a veneer core would have no HWPW standard to meet and a PB or MDF core product would not have to meet the substantial emission reduction requirements applicable if they were a HWPW

- VC or HWP W

- CC manufacturer. In fact, the emissions could actually increase because CARB has in effect exempted the “glue line” that a fabricator uses to apply the face veneers which could have high emission characteristics.

There is also a very significant enforcement issue here as well. A “fabricator” can have
“certified” PB or MDF for their core panels, but the face and back veneers would have to be de

laminated in their finished HWPW product to re

- test the cores for CARB compliance. The adhesives used and the process of de

- lamination can both change the emission characterist ics of the core and make verification of compliance very difficult if not impossible to ascertain. The
adhesive lines used in the manufacture for the face and back veneers are exempt under the
CARB rule . In effect , those adhesives can legally adulterate th e core. CARB had committed but has yet to complete research to determine if this technical question could result in this aspect of their rule being practically unenforceable. HPVA is collaborating with Penn State University to address this hypothesis.

Ther e is no corresponding emission standard for a VC platform if it is used by a “fabricator.” A “fabricator” cannot provide a comparable CARB certification for a Veneer Core platform unless6

both the “fabricator” and the VC platform supplier voluntarily agree to meet a CARB certification limit. Even in that situation, the “fabricator” does not have to meet the HWPW emission limit after the application of a decorative face and back. A “fabricator” has no obligation to certify if they apply the face and or back veneers to the VC , PB or MDF core s that the finished HWPW product meets the CARB HWPW emission standard.

Our experience as a TPC clearly demonstrates that HWPW products manufactured by participants in our program who use VC platforms need to utilize platfo rms that conform or closely conform to the HWPW emission standards to insure that the final product also conforms to those requirements. The ANSI/HPVA HP

- 1 revision addresses this concern by requiring every imported lot of VC platforms be QC tested before it goes into HWPW production.

The CARB rule has intended and clearly permits this dual product classification. CARB requires HWPW with certified low emissions but also allows other HWPW products with emissions
that are both unknown and un

- certified

.

Moreo ver, will the consumer be able to differentiate between HWPW that is manufactured and therefore fully certified and that which is laminated and not fully certified? Would that information affect consumer choice if they had full knowledge of the definitions of the products in Appendix A that helped them make that decision? Appendix A is not consumer friendly

prose.

The CARB rule has this significant flaw and that flaw must not be replicated or adopted in any federal emission standard for these products

.

The emission standards must apply to any and all HWPW irrespective of who manufactures the HWPW. CARB arbitrarily differentiates between a primary HWPW manufacturer and a “fabricator” who also manufactures HWPW but is exempt from having to certify the HWPW
th ey manufacture.

To summarize, t his exemption creates a two tiered system: HWPW made by a “manufacturer” must be third party certified to meet the most stringent of the product emission standards and be certified to reduce otherwise CARB compliant core whe n they are used to the more stringent HWPW values. On the other hand, if you manufacture HWPW but are a “fabricator”, CARB has for this group of HWPW “ manufacturers ” exempted the glue lines used to apply the face and backs to the core and exempted the sig nificant emission reduction requirement in the final product from the HWPW standard.7

This exemption is a giant loophole. It particularly advantages off

- shore producers who escape the higher operating costs associated with the new resin systems, certifica tion and testing compliance costs, and record keeping that is difficult to audit and enforce. Given the dismal state of the domestic US economy, low price point products have a decided advantage. Without insuring a level playing field, non

- compliant, cheap er products will likely further erode the domestic production share of the US market costing the US economy jobs and value added taxable profits of domestic producers. This is not a non

- tariff trade barrier but a consistent, equally applied standard for pr oduct performance and safety.

This is a product standard . B ecause it achieves specified safety and health performance
characteristics , this standard must un i versa l ly apply to all HWPW products irrespective of who produces it, irrespective of where it is ma de, and i rrespective of the type of core used to
manufacture HWPW

. T he CARB emission standards for HWPW must be the same for anyone
who makes HWPW. Moreover, the emission limits for HWPW are the lowest of any of the regulated composite wood products

.

This exemption results in inconsistent product performance for otherwise identical products subject to a product safety standard. This exemption creates a huge economic advantage for “fabricator manufacturers” who avoid the costs of compliance.

Imports of HWPW should meet US performance standards and only a federal rule can achieve this leveling of the playing field.

The US market has been witness to increasing market share taken by imports, primarily by
Chinese manufacturers, on a volume basis (near 8 0%) and a value basis ( over 65 %). See attached Table 1. U.S. capacity has been shut down permanently or idled as a result

.

T he recent report on these imports by the International Trade Commission

- US ITC Publication 4032 (August, 2008), Wood Flooring and Hardwood Plywood: Competitive Conditions Affecting the U.S. Industries focuses on several factors that have favored Chinese
manufacturers. A copy will be provided for the record.

The ITC identities many of the factors that give Chinese product manufacturers their cost advantage and mentions the costs of meeting new

, more stringent formaldehyde standards as

o ne of these. The report does not specifically quantify th e economic value of those advantages. The hardwood industry is working with Congress to continue this investigation as the recent economic downturn has resulted in reported backsliding recently of some of the key reform s to8

address these issues. 2 HWPW is an important component in furniture and with most of that capacity in China and Southeast Asia that s upplies the US market, the “fabricator” exemption
allows HWPW from those manufacturers to come in basically unregulated. Increasing market penetration by kitchen cabinet manufacturers off shore is also occurring. This is the second,

most important end use for HWPW.

Imports are a major factor for US consumers who would be protected by this rule. An enforceable federal standard will help to insure both consumer protection and a level playing field for producers.

A rule under the Toxic Substances Control Act with its international enforcement provisions provides an assurance that all HWPW irrespective of country of origin, domestically or foreign produced, will have the same formaldehyde performance characteristics. Absent a federal rule, imports with cost a dvantage s will have a marked pricing advantage and in these hard economic
times increase their market share . Mean while the U.S. has a piecemeal, non

- federal, import

un enforceable approach

, while the technology exists and domestic industry has made the

comm itment to utilize this new generation of technologies . As a TPC, we can certify that it is rapidly being employed in North America

. As a TPC, we can also state that we observe higher failure rates from off shore producers with some foreign suppliers signif icantly higher than
allowable U.S. limits whether CARB or even HUD and their own domestic emission standards.

We do not believe as we have previously commented to EPA that a rule can be justified under section 6 (a) of TSCA. The CARB rule is essentially predicated as a technology based standard

a nd for that reason we believe that authority under an other section or a new statutory provision that would permit the incorporation by reference of the revised and updated ANSI/HPVA HP

- 1 and ANSI/HPVA EF national consensus standards would be a preferable

a pproach. These standards which have been the operating norm in the industry and widely accepted and referenced by end users of these products address the other concerns that we
have discussed in these comments.9

In summary and for the r easons discussed , HPVA supports the timely promulgation of a federal standard for formaldehyde emissions fro m HWPW. The federal standard s hould apply universally to all HWPW pr od u c ts. The federal standard for HWPW emissions sho u ld apply t o all manufacturers and producers who sell their HWPW in the U.S. Imports of HWPW should meet U.S. performance standards and only a f ederal rule can achieve this leveling of the playing field.

PLEASE DIRECT ANY QUESTIONS or COMMENTS to:

C.T. “Kip” Howlett Jr. 1825 Michael Faraday Drive Reston, VA 20190
703

- 435

- 2900
khow lett@hpva.org10

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1 Manufacturers of VC platforms can and some suppliers do produce and certify the formaldehyde emission values of their products. This is voluntary but prudent because HWPW manufacturers who use these platforms can better assure that their final HWPW product will meet the stringent CARB emission values for HWPW.

2 Imported HWPW accounts for over 62% of the US HWPW market which is estimated to be about $2.4 billion. Because imported panels are of lower unit value than domestically produced panels, the market share of imported products may actually be 70

- 75% of the North American market. Because the import codes which sometimes group non

- homog enous products under the same code, exact figures for the products of interest in this ANPR are difficult to determine.11 APPENDIX A

Source: Airborne Toxic Control Measure to Reduce Formaldehyde Emissions from Composite
Wood Products Section 93120.1 D efinitions

CARB PRODUCT DEFINITIONS:

(19) “hardwood plywood (HWPW) means a panel composed of an assembly of (A) hardwood layers or plies of veneer or (B) veneers in combination with a platform consisting of lumber core, composite core, a special core or b ack material joined with an adhesive . The face veneer may be composed of a hardwood or decorative softwood species (ANSI/HPVA HP

- 1

- 2004). “Hardwood plywood” includes wall paneling, industrial panels, and “hardwood plywood” panels used in making flooring. “ Hardwood plywood” does not include laminated products, military specified plywood, or curved plywood. (20) “Hardwood plywood

- composite core” (HWPW

- CC) means hardwood plywood with a composite

core. (21) “Hardwood plywood

- veneer core” (HWPW

- VC) means hardwo od plywood with a core of a sheet or
sheets of veneer. (35) “Plywood” means a panel product consisting of layers of wood veneers in combination with a platform, pressed together with resin.....” (34) “Platform” means a veneer core, composite core, or combina tion core, lumber core, or special core material used in the manufacture of hardwood plywood or laminated products. (Emphasis added) (5) “Combination core” means a platform for making hardwood plywood that consists of a combination of layers of veneer and particleboard or medium density fiberboard. (7) “Composite core” means a platform for making hardwood plywood or laminated products that
consists of particleboard and/or medium density fiberboard, or combination core. (25) “Laminated product” means a finis hed good or component part of a finished good made by a fabricator in which a laminate or laminates are affixed to a platform. If the platform consists of a composite wood product, the platform must comply with the applicable emission standards. (24) “Lami nate” means a veneer or other material affixed as a decorative surface to a platform. (8) “Composite wood products” means hardwood plywood, particleboard, and medium density
fiberboard......”

CARB PRODUCER DEFINITIONS:

(26) “Manufacturer” means any person who manufactures or produces a composite wood product.

(12) “Fabricator” means any person that uses composite wood products to make finished goods.
“Fabricator” includes producers of laminated products. (Emphasis added)12 

### TABLE 1.