# Proposed New Source Performance Standards

for New Residential Wood Heaters, New Residential Hydronic Heaters, New Forced -Air Furnaces, and New Residential

Masonry Heaters
EO 12866 Review Briefing for OMB July 17, 2013

# Background ► 

### Section 1 11 of the Clean Air Act (CAA) requires EP A to set New

S ource Performance Standards (NSPS) for categories that cause, or significantly contribute to, air pollution that may endanger public health or welfare. ► 

### The CAA

requires NSPS to reflect best system of emission reduction (BSER), taking into account costs. ► 

### Residential wood combustion is a significant source of fine particle pollution, emitting more than 350,000 tons of fine particles in 2008, according to EP A’ s National Emissions Inventory. Several areas are nonattainment (NA) or near NA due largely to wood smoke. ► 

### Wood smoke is made up of a mixture of gases and fine particles that are produced wh en wood and other organic matter burns. The fine particles in smoke – also called fine particle pollution or PM 2.5 

### – can get deep into the lungs, harming both the lungs and heart. People wi th heart or lung disease, older adults and children are the most at risk. 2

# Background (continued) ► 

### The current NSPS for residential wood heaters were promulgated by EP A in 1988. ► The 1988 standards were developed through a regulatory negotiation process that included representatives of the environmental community, consumer groups, state air pollution control and energy agencies, industry, and EP A. ► Wood heater technology has improved greatly since 1988. ► The CAA

requires EP

A to review these standards every 8 years. ► 

### EP A has received many requests from states, local agencies, tribes, environmental groups, industry, and the public to strengthen the NSPS to help protect public health. ► Numerous states have requested this rule, because some areas with wood smoke problems either are exceeding (or close to exceeding) the health - based NAAQS for fine particles. For example, in places such as Keene, NH, Sacramento, CA, Ta coma, WA, and Fairbanks, AL, wood combustion can contribute over 50 percent of daily wintertime fine particle emissions. States are required to develop State Implementation Plans and may have to consider higher cost (and less effective) regulations without this rule. ► EP A has also received a petition from the Northeast States, and letters and resolutions from the Environmental Council of States, the National Association of Clean Air Agencies, Western States Air Resources Council, Central States Air Resources Agencies, Lake Michigan Air Directors Consortium, Mid -Atlantic Regional Air Management Association, and Northeast States for Coordinated Air Use Management encouraging the agency to develop these standards. ► Industry has requested a federal rule because of the patchwork of existing and feared state and local rules and bans.

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# Current Action ► The proposal will... ► strengthen the standards for new wood stoves ► set emission limits (for the first time) for new hydronic heaters ► set emission limits for new pellet stoves, new wood -fired forced -air furnaces, new masonry wood heaters, and new “single- burn - rate” stoves ► provide significant lead time for manufacturers to adapt best technology across model lines, produce cleaner models, and sell current stocks ► significantly reduce fine particle pollution from new stoves and other wood heaters. Emissions of volatile organic compounds, carbon monoxide, hazardous air pollutants and greenhouse gases also will be reduced. The benefits greatly exceed the costs. ► The proposal will not... ► affect heaters that are fueled solely by oil, gas or coal ► apply to existing wood heaters ► apply to fireplaces (which typically are not “heaters”) ► New models will be more efficient. Homeowners will get more heat from the wood they burn. ► EP A plans to take public comment for 90 days and hold two public hearings. 4

# EP A’ s Vo luntary Partnership Program for Hydronic Heaters ► 

### EP A developed a voluntary program to encourage manufacturers to redesign their models to reduce emissions -- faster than an EP A regulation

• Phase 1 rolled out January 2007

• 22 Phase 1 partners, 12 Phase 1 qualified models (>70% reduction in emissions) ► 

### At the same time, the Northeast States for Coordinated Air Use Management developed a “model rule”...

• Many states used the model rule as the starting point for adopting state rules to control emissions from certain wood -fired devices

• Many areas required set- back distances

• Some local areas banned hydronic heaters ► 

### EP A developed Phase 2 of the voluntary program to further reduce emissions

• Phase 2 started in October 2008 and over a dozen states require the Phase 2 - level (or better)

• Currently, there are 39 Phase 2 qualified models (90% reduction in emissions) 5

# Small Business Regulatory Enforcement Fairness Act (SBREF A) ► 

### Some of the options considered in the proposal have the potential for a significant economic impact on a number of small entities. ► 

### EP A convened a SBREF

A panel on August 4, 2010. ► 

### As a result of the panel recommendations and additional discussions wi th small entities, this proposal incorporates reasonable time for all manufacturers to develop cleaner models by allowing a phased approach. ► 

### This proposal includes additional time for small -volume manufacturers of some heaters. ► 

### A full discussion of the SBREF A panel recommendations and EP A’ s actions to reduce the potential impacts on small businesses will be included in the preamble.

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# Summary of Proposed Requirements ► 

### EP A is proposing that each type of new residential wood heater meet PM emission limits in a 2 -step approach ► Step 1 – effective upon promulgation ► Step 2 – effective 5 years after promulgation - provides time for additional research and development (R&D) ► 

### EP A is also taking comment on a 3 -step approach with a longer compliance timeframe ► Step 1 – effective upon promulgation (note: same emission limit as Step 1 in 2 -step approach) ► Step 2 – effective 3 years after promulgation ► Step 3 – effective 8 years after promulgation (note: same emission limit as Step 2 in 2 -step approach) – provides more time for additional R&D ► 

### See proposed emission limits in the Appendices.

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# Projected Impacts ► PM 2.5 from new heaters would be reduced by >4,800 tons/year over the 2014 - 2022 timeframe. ► Many reductions would be in NA areas or areas on the cusp of NA, where states are looking for every cost-effective reduction they can attain. ► States and local agencies are greatly concerned that the emissions are near ground level and close to homes and have caused significant health effects, especially due to hydronic heater emissions. ► Health benefits would be $1.7 billion to $4.2 billion/year. (2010 dollars) ► Non - monetized benefits would be: ► 33,000 tons of carbon monoxide reductions ► 3,200 tons of volatile organic compounds reductions ► Reduced exposure to hazardous air pollutants, including formaldehyde, benzene, and polycyclic organic matter ► Reduced climate effects due to reduced black carbon emissions ► Reduced ecosystem effects ► Reduced visibility impairments ► Cost-to- receipts ratios would potentially range from 2.3 percent for pellet stoves to 6.4 percent for single burn rate stoves. ► Cost ef

fectiveness values ($/ton) for PM 2.5 would be very reasonable : ► $471 for Wood Heaters ► $50 for Single Burn Rate Heaters ► $1,513 for Pellet Stoves ► $37 for Indoor Furnaces ► $160 for Hydronic Heaters ► $123 for total rule ► Total rule costs would be ~$16 million per year -- far less than the monetized benefits.
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# Anticipated Public and Stakeholder Response ► 

### States, local agencies, and tribes strongly support strengthened standards. Some need these NSPS to help them meet the PM 2.5 

### national ambient air quality standards. ► 

### Environmental groups strongly support strengthened standards and, in particular, stringent limits on hydronic heaters. ► 

### Most public feedback supports strong regulations, especially for hydronic heaters. ► 

### Industry groups agree that standards are needed for hydronic heaters and forced -air furnaces and that it is appropriate to update the wood stove standards to at least the State of Washington levels. Manufacturers of the cleaner models support the levels in this proposal or those more stringent. ► 

### Some industry groups question the cost ef fectiveness and potential economic impacts of some more stringent proposed options. ► 

### At least one fireplace manufacturer questions why t he agency is not proposing standards for new

fireplaces. 9

# Appendices

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# Wood Heaters Rulemaking History ► On February 26, 1988, EP A published the original NSPS for residential wood heaters. ► In 1995, Wa shington State tightened their state emission limits. Almost all manufacturers chose to meet the WA

l imits for all U.S. models. To day, over 85% of EP A-certified models meet the W

A emission levels. ► In November 2009, EP A released a draft review document with preliminary draft conclusions. ► EP A conducted numerous stakeholder outreach activities and prepared the technical and economic information necessary for a draft proposal. EP A management committed to a strong proposal for all stakeholders and solicited additional feedback from stakeholders. ► In November 2012, state and local air pollution control agencies hosted a national forum for a broad range of stakeholders (including EP A, manufacturers, health organizations, and environmental groups) to discuss the issues and potential options. ► EP A prepared new options for this draft proposal after consideration of the information and recommendations discussed in November 2012 and in numerous follow- up discussions. ► This proposal reflects current best systems of emission reduction and adds emission limits for new heaters that were not regulated in 1988, such as indoor and outdoor wood boilers, forced -air furnaces, and single - burn - rate stoves. This proposal also includes improvements to the test methods and adds testing requirements to address short-term emission peaks and testing with cordwood to better represent real -world conditions. ► The monetized health benefits far exceed the costs for all options considered.

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# Scope of the Proposal

► An important goal is to minimize potential loopholes. ► The proposal includes the following three subparts:



### • Subpart AAA, aka “room heaters”

– Adjustable burn rate stoves, single - burn rate stoves, and pellet stoves



### • Subpart QQQQ, aka “central heaters”

– Outdoor and indoor hydronic heaters

– Forced -air furnaces



### • Subpart RRRR

– Masonry heaters

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# Wood Stoves **Proposed T**

**wo -** **Step Ap**  **proach** ► **Step 1: 4.5 g/hr upon promulgation**

– This matches the Washington State noncatalytic stove emission level.

– Over 85% of sales of EP A-certified wood stoves are models that already meet this level. ► **Step 2: 1.3 g/hr fiv e**  **ye ars**  **after promulgation** 

– Best System of Emission Reduction (BSER) ► Proposal combines catalytic and non -catalytic units under one emission limit. ► Proposal includes single- burn - rate stoves and pellet stoves. ► Proposal establishes an emission limit for cordwood (rather than cribs) for 2019. **Three -** **Step Ap**  **proach for Comment**  ► **Step 1: 4.5 g/hr upon promulgation**  ► **Interim Step 2:**  **2.5 g/hr three y ears**  **after promulgation**  ► **Step 3: 1.3 g/hr eight**  **ye ars**  **after promulgation**  13

# Hydronic Heaters **Proposed T**

**wo -** **Step Ap**  **proach** ► **Step 1: 0.32 lbs/ MMBtu**  **heat output**  **upon promulgation**

– This matches the EP A Vo luntary Partnership Program Phase 2 level.

– 36 hydronic heater models (27 cordwood and 9 pellet models) built by 17 U.S. manufacturers have already been qualified at this level. ► **Step 2** : **0.06 lbs/MMBTU heat output fiv** **e ye**  **ars after**  **promulgation**

– Best System of Emissions Reduction **Three -** **Step Ap**  **proach for Comment**  ► **Step 1: 0.32 lbs/** **MMBtu upon**  **promulgation** ► **Interim Step 2:**  **0.15 lbs/MMBTU three y ears**  **after promulgation**  ► **Step 3: 0.06 lbs/MMBTU eight**  **ye ars**  **after promulgation** 

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# Forced -Air Furnaces **Proposed T**

**wo -** **Step Ap**  **proach** ► **Step 1: 0.93 lbs/ MMBtu**  **heat output upon**  **promulgation**

– This matches the consensus standard developed by the Canadian Standards Association.

– The two primary U.S. manufacturers of forced -air furnaces both have models that can meet Step 1 already. Other manufacturers are conducting tests now. ► **Step 2: 0.06 lbs/ MMBtu**  **heat output**  **fiv e**  **ye ars**  **after promulgation** 

– This matches the hydronic heater level. **Three -** **Step Ap**  **proach for Comment**  ► **Step 1: 0.93 lbs/** **MMBtu upon**  **promulgation** ► **Interim Step 2:**  **0.15 lbs/MMBTU three y ears**  **after promulgation**  ► **Step 3: 0.06 lbs/MMBTU eight**  **ye ars**  **after promulgation** 

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# Masonry Heaters **Proposed T**

**wo -** **Step Ap**  **proach** ► **Step 1: 0.32 lbs/ MMBtu**  **heat output upon**  **promulgation except**  **for small v olume** 

**masonry**

**h eater**  **manufacturers (less**  **then 15 total**  **units per y** **ear)**

– This matches the Step 1 Level for hydronic heaters.

– Based on data submitted by the Masonry Heater Association, over 10 models already achieve this level.

– Many other models are expected to use a computer simulation to show that their design would be expected to achieve the NSPS level without conducting further testing. ► **Step 2: 0.32 lbs/ MMBtu**  **heat output for**  **the small vo**  **lume masonry**  **h eater**  **manufacturers fiv** **e ye**  **ars after**  **promulgation**

– Most masonry heater manufacturers are very small businesses that produce less than 12 heaters per year.

– There is not a tighter emission limit in Step 2. ► There is not a three -step approach for comment 16

# Test Methods ► **Peak, shorter -** **term emissions**  ► The proposal adds multiple 1 - hour filters for each test run to gather data regarding start- up and anticipated peaks. ► For Step 2, the proposal requires compliance with emission limits at the lowest burn rate (“Category 1”) and the maximum burn rate (“Category 4”) rather than the weighted average of the four burn rates in the 1988 NSPS. ► **Cordw ood test**  **method** ► The proposal adds testing with cordwood to encourage best real -world performance. For Step 1, the manufacturer would submit 2 test reports, 1 with cribs and 1 with cordwood and choose which results to use for certification. For Step 2, the tests would all be with cordwood. ► **Precision** ► The proposal includes enhancements to the test methods to improve precision.

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# Compliance 

# & Enforcemen t
► The proposal improves and streamlines the model line certification, inspection and appeals processes. ► The proposal adds electronic reporting by manufacturers and labs. ► The proposal adds 3 rd - party laboratories accredited by the International Standards Organization as the primary basis for EP A approvals for testing and certifications. ► The proposal adds potential for delegation of compliance monitoring to states and EP A regional offices (in addition to EP A headquarters). ► The proposal requires emission tests on each type of fuel that the heater manufacturer specifies/warrants for use. ► The proposal requires that certification tests for pellet- burning heaters use graded and licensed fuels that have been approved by the heater manufacturer for use in their heater.

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# Permanent Labels and Te mporary Hangtags
► The proposal would retain the 1988 requirement of permanent labels after EP A certification. ► The proposal would not retain the 1988 requirement of temporary hangtags for marketing at the consumer level. ► The proposal asks for comments on whether EP A should require temporary hangtags or other mechanisms to help inform consumers of which heaters perform the best.

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