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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2007-0544; FRL-9684-7]

RIN 2060-AQ41

National Emission Standards for Hazardous Air Pollutants From the Pulp and Paper Industry

AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
SUMMARY: This action finalizes the residual risk and technology review conducted for the pulp and paper industry source category regulated under national emission standards for hazardous air pollutants. The EPA is required to conduct residual risk and technology reviews under the Clean Air Act. This action finalizes amendments to the national emission standards for hazardous air pollutants that include a requirement for 5-year repeat emissions testing for selected process equipment; revisions to provisions addressing periods of startup, shutdown and malfunction; a requirement for electronic reporting; additional test methods for measuring methanol emissions; and technical and editorial changes. The amendments are expected to ensure that control systems are properly maintained over time, ensure continuous compliance with standards and improve data accessibility; we estimate facilities nationwide will spend $2.1 million per year to comply.
DATES: This final action is effective on September 11, 2012. The incorporation by reference of certain publications listed in this rule is approved by the Director of the Federal Register as of September 11, 2012.
ADDRESSES: The EPA has established a docket for this action under Docket ID Number EPA-HQ-OAR-2007-0544. All documents in the docket are listed on thehttp://www.regulations.govWeb site. Although listed in the index, some information is not publicly available, e.g., confidential business information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically throughhttp://www.regulations.gov,or in hard copy at the EPA Docket Center, EPA West Building, Room Number 3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading Room hours of operation are 8:30 a.m. to 4:30 p.m. Eastern Standard Time, Monday through Friday. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air and Radiation Docket and Information Center is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: For questions about this final action, contact Mr. John Bradfield, Office of Air Quality Planning and Standards, (E143-03), U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-3062; fax number: (919) 541-3470; and email address:bradfield.john@epa.gov.
SUPPLEMENTARY INFORMATION:

For specific information regarding the risk modeling methodology, contact Mr. James Hirtz, Health and Environmental Impacts Division (C539-02), Office ofAir Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-0881; fax number: (919) 541-0840; and email address:hirtz.james@epa.gov.For information about the applicability of the national emission standards for hazardous air pollutants to a particular entity, contact the appropriate person listed in Table 1 to this preamble.

Table 1—List of EPA Contacts for the NESHAP Addressed in This Final Action NESHAP for: OECA
  • Contact1
  • OAQPS
  • Contact2
  • Pulp and Paper Sara Ayres, (202) 564-5391,ayres.sara@epa.gov John Bradfield, (919) 541-3062,bradfield.john@epa.gov. 1EPA's Office of Enforcement and Compliance Assurance. 2EPA's Office of Air Quality Planning and Standards.

    Preamble Acronyms and Abbreviations.Several acronyms and terms used to describe industrial processes, data inventories and risk modeling are included in this preamble. While this may not be an exhaustive list, to ease the reading of this preamble and for reference purposes, the following terms and acronyms are defined here:

    ANSIAmerican National Standards Institute ASMEAmerican Society of Mechanical Engineers ASTMAmerican Society for Testing and Materials CAAClean Air Act CBIConfidential Business Information CCAClean Condensate Alternative CDXEPA's Central Data Exchange CEDRIEPA's Compliance and Emissions Data Reporting Interface CFRCode of Federal Regulations CWAClean Water Act DCDistrict of Columbia DC Cir.United States Court of Appeals for the District of Columbia Circuit EIAEconomic Impact Analysis EJEnvironmental Justice EPAEnvironmental Protection Agency ERTElectronic Reporting Tool FRFederal Register FTIRFourier Transform Infrared HAPHazardous Air Pollutants HVLCHigh Volume Low Concentration IBRIncorporation by Reference ICRInformation Collection Request kmKilometer LVHCLow Volume High Concentration MACTMaximum Achievable Control Technology MACT CodeCode within the NEI used to identify processes included in a source category MIRMaximum Individual Risk NAICSNorth American Industry Classification System NCASINational Council for Air and Stream Improvement NEINational Emissions Inventory NESHAPNational Emissions Standards for Hazardous Air Pollutants NRDCNatural Resources Defense Council NTTAANational Technology Transfer and Advancement Act of 1995 NWNorthwest OAQPSEPA's Office of Air Quality Planning and Standards ODTPOven-Dried Ton of Pulp OECAEPA's Office of Enforcement and Compliance Assurance OMBOffice of Management and Budget O&MOperations and Maintenance ppmwParts Per Million by Weight PRAPaperwork Reduction Act RFARegulatory Flexibility Act RIARegulatory Impact Analysis RTRResidual Risk and Technology Review S. Ct.United States Supreme Court SBASmall Business Administration SISNOSESignificant Economic Impact on a Substantial Number of Small Entities SSMStartup, Shutdown, and Malfunction the Court United State Court of Appeals for the District of Columbia Circuit TOSHITarget Organ-Specific Hazard Index tpyTons Per Year TTNEPA's Technology Transfer Network UMRAUnfunded Mandates Reform Act of 1995 U.S.United States U.S.C.United States Code VCSVoluntary Consensus Standards WWWWorldwide Web yrYear

    Background Information Document.On December 27, 2011 (76 FR 81328), the EPA proposed revisions to the pulp and paper industry NESHAP based on evaluations performed by the EPA in order to conduct our RTR. In this action, we are finalizing decisions and revisions for the rule. A summary of the public comments on the proposal and the EPA's responses to those comments is available in Docket ID Number EPA-HQ-OAR-2007-0544.Organization of this Document.The following outline is provided to aid in locating information in the preamble.

    I. General Information A. Executive Summary B. Does this action apply to me? C. Where can I get a copy of this document? D. Judicial Review II. Background III. Summary of the Final Rule A. What are the final rule amendments for the pulp and paper industry source category? B. What are the requirements during periods of startup, shutdown and malfunction? C. What are the effective and compliance dates of the standards? D. What are the requirements for submission of performance test data to the EPA? IV. Summary of Significant Changes Since Proposal A. Changes to the Risk Assessment Performed under CAA Section 112(f) B. Changes to the Technology Review Performed under CAA Section 112(d)(6) C. Other Changes Since Proposal V. Summary of Cost, Environmental and Economic Impacts A. What are the affected facilities? B. What are the air quality impacts? C. What are the cost impacts? D. What are the economic impacts? E. What are the benefits? VI. Statutory and Executive Order Reviews A. Executive Orders 12866: Regulatory Planning and Review, and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations K. Congressional Review Act I. General Information A. Executive Summary 1. Purpose of the Regulatory Action

    Section 112(f)(2) of the CAA requires us to determine for source categories subject to MACT standards, whether the MACT emissions standards provide an ample margin of safety to protect public health. This review, known as the residual risk review—is a one-time review that must occur within 8 years of issuance of the MACT standard. Section 112(d)(6) of the CAA requires the EPA to review and revise section 112 emissions standards, as necessary, taking into account developments in practices, processes and control technologies, emission standards promulgated under section 112 no less often than every 8 years. We issued the NESHAP for the pulp and paper industry (40 CFR part 63, subpart S) in 1998 and are due for review under CAA sections 112(d)(6) and 112(f)(2). In addition to conducting the RTR for subpart S, we are evaluating the SSMprovisions in the rule in light of the D.C. Circuit Court of Appeals decision inSierra Clubv.EPA,551 F.3d 1019 (D.C. Cir. 2008). As explained below, in theSierra Clubcase, the D.C. Circuit vacated the SSM exemption provisions in the General Provisions for non-opacity and opacity standards.

    To address the RTR assessments and SSM exemptions, proposed amendments to subpart S were developed, signed by the EPA Administrator on December 15, 2011, and published in theFederal Registeron December 27, 2011. A 60-day period ending February 27, 2012, was provided for the public to submit comments on the proposal to the EPA. This action addresses the public comments on the proposal and finalizes the amendments to subpart S. The amendments are expected to ensure that control systems are properly maintained over time, ensure continuous compliance with standards and improve data accessibility.

    2. Summary of Major Provisions

    As part of an ongoing effort to improve compliance with various federal air emission regulations, we are requiring repeat air emissions performance testing once every 5 years for facilities complying with the standards for kraft, soda and semi-chemical pulping vent gases; sulfite pulping processes; and bleaching systems. We are also finalizing changes to the subpart S NESHAP and the General Provisions applicability table to eliminate the SSM exemption. To increase the ease and efficiency of data submittal and improve data accessibility, we are requiring mills to submit electronic copies of performance test reports to the EPA's WebFIRE database. To allow mills greater flexibility in demonstrating compliance with emission limits for total HAP measured as methanol, we are including four additional test methods for measuring methanol emissions from pulp and paper processes, as alternatives to EPA Method 308. We are also making a number of technical and editorial changes, including clarifying the location in the CFR of applicable test methods, incorporating by reference several non-EPA test methods and revising the General Provisions applicability table to align with those sections of the General Provisions that have been amended or reserved over time.

    3. Costs and Benefits

    Table 2 summarizes the costs and benefits of this action. See section V of this preamble for further discussion.

    Table 2—Summary of the Costs and Benefits of the Final Amendments to the NESHAP for the Pulp and Paper Industry Requirement Capital
  • cost
  • [million]
  • Annual
  • cost
  • [million]
  • Net
  • benefit
  • Repeat emissions testing $5.4 $1.3 N/A Incremental reporting/recordkeeping 0.50 0.74 N/A Total nationwide 5.9 2.1 N/A
    B. Does this action apply to me?

    Regulated Entities.Categories and entities potentially regulated by this action are shown in Table 3 of this preamble.

    Table 3—NESHAP and Industrial Source Categories Affected by this Final Action NESHAP and source category NAICS
  • Code1
  • MACT
  • Code2
  • Pulp and Paper (Subpart S) 322 1626-1 1North American Industry Classification System. 2Maximum Achievable Control Technology.

    Table 3 of this preamble is not intended to be exhaustive but rather provides a guide for readers regarding entities likely to be affected by the final action for the source category listed. To determine whether your facility would be affected, you should examine the applicability criteria in the appropriate NESHAP. As defined in the Source Category Listing Report published by the EPA in 1992, the pulp and paper production source category includes any facility engaged in the production of pulp and/or paper.1 This category includes, but is not limited to, integrated mills (where pulp and paper or paperboard are manufactured on-site), non-integrated mills (where either pulp or paper/paperboard are manufactured on-site, but not both), and secondary fiber mills (where waste paper is used as the primary raw material). Examples of pulping methods include kraft, soda, sulfite, semi-chemical and mechanical.

    1USEPA. Documentation for Developing the Initial Source Category List—Final Report, USEPA/OAQPS, EPA-450/3-91-030, July, 1992.

    If you have any questions regarding the applicability of this NESHAP, please contact the appropriate person listed in the precedingFOR FURTHER INFORMATION CONTACTsection.

    C. Where can I get a copy of this document?

    In addition to being available in the docket, an electronic copy of this final action will also be available on the WWW through the TTN. Following signature, a copy of the final action will be posted on the TTN's policy and guidance page for newly proposed and promulgated rules at the following address:http://www.epa.gov/ttn/caaa/new.html.The TTN provides information and technology exchange in various areas of air pollution control.

    Additional information is available on the RTR Web page athttp://www.epa.gov/ttn/atw/rrisk/rtrpg.html.This information includes source category descriptions and detailed emissions and other data that were used as inputs to the risk assessments.

    D. Judicial Review

    Under section 307(b)(1) of the CAA, judicial review of this final action is available only by filing a petition for review in the Court by November 13, 2012. Under section 307(b)(2) of the CAA, the requirements established by these final rules may not be challenged separately in any civil or criminal proceedings brought by the EPA to enforce the requirements.

    Section 307(d)(7)(B) of the CAA further provides that “[o]nly an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review.” This section also provides a mechanism for us to convene a proceeding for reconsideration, “[i]f the person raising an objection can demonstrate to EPA that it was impracticable to raise such objection within [the period for public comment] or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule.” Any person seeking to make such a demonstration to us should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, Ariel Rios Building, 1200 Pennsylvania Ave. NW., Washington, DC 20460, with a copy to both the person(s) listed in the precedingFOR FURTHER INFORMATION CONTACTsection and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA,1200 Pennsylvania Ave. NW., Washington, DC 20460.

    II. Background

    Section 112 of the CAA establishes a two-stage regulatory process to address emissions of HAP from stationary sources. In the first stage, after the EPA has identified categories of sources emitting one or more of the HAP listed in CAA section 112(b), CAA section 112(d) calls for the EPA to promulgate NESHAP for those sources. “Major sources” are those that emit or have the potential to emit 10 tpy or more of a single HAP or 25 tpy or more of any combination of HAP. For major sources, these technology-based standards must reflect the maximum degree of emissions reductions of HAP achievable (after considering cost, energy requirements and nonair quality health and environmental impacts) and are commonly referred to as MACT standards.

    For MACT standards, the statute specifies certain minimum stringency requirements, which are referred to as floor requirements and may not be based on cost considerations. See CAA section 112(d)(3). For new sources, the MACT floor cannot be less stringent than the emission control that is achieved in practice by the best controlled similar source. The MACT standards for existing sources can be less stringent than floors for new sources but they cannot be less stringent than the average emission limitation achieved by the best-performing 12 percent of existing sources in the category or subcategory (or the best-performing five sources for categories or subcategories with fewer than 30 sources). In developing MACT, we must also consider control options that are more stringent than the floor under CAA section 112(d)(2). We may establish standards more stringent than the floor, based on the consideration of the cost of achieving the emissions reductions, any nonair quality health and environmental impacts and energy requirements. In promulgating MACT standards, CAA section 112(d)(2) directs us to consider the application of measures, processes, methods, systems or techniques that reduce the volume of or eliminate HAP emissions through process changes, substitution of materials or other modifications; enclose systems or processes to eliminate emissions; collect, capture or treat HAP when released from a process, stack, storage or fugitive emissions point; and/or are design, equipment, work practice or operational standards.

    In the second stage of the regulatory process, we undertake two different analyses, as required by the CAA. First, section 112(d)(6) of the CAA calls for us to review the technology-based standards and to revise them “as necessary (taking into account developments in practices, processes, and control technologies)” no less frequently than every 8 years. Second, within 8 years after promulgation of the MACT standards, CAA section 112(f) calls for us to evaluate the risk to public health remaining after application of the standards and to revise the standards, if necessary, to provide an ample margin of safety to protect public health or to prevent, taking into consideration costs, energy, safety and other relevant factors, an adverse environmental effect. Under section 112(f)(2), the EPA may re-adopt the existing MACT standards if the EPA determines that those standards are sufficiently protective.Natural Resources Defense Council (NRDC)v.EPA,529 F.3d 1077, 1083 (DC Cir. 2008).

    On December 27, 2011, the EPA published a proposed rule in theFederal Registerfor the pulp and paper industry NESHAP, 40 CFR part 63, subpart S based on the RTR analyses that the EPA conducted under CAA sections 112(d)(6) and 112(f)(2) (76 FR 81328). Today's action provides the EPA's final determinations and regulatory amendments pursuant to the RTR provisions of CAA section 112.

    In addition, several other aspects of the subpart S MACT rule were reviewed and considered for revision at proposal, and after review of the public comment received, we are taking the following actions:

    • Finalizing the requirement for 5-year repeat emissions testing for selected process equipment.

    • Revising the requirements in the NESHAP related to emissions during periods of SSM.

    • Finalizing the requirement for electronic reporting of performance test data.

    • Adding test methods for measuring methanol emissions.

    • Finalizing changes to address technical and editorial corrections in the rule.

    III. Summary of the Final Rule A. What are the final rule amendments for the pulp and paper industry source category?

    The NESHAP for the pulp and paper industry was promulgated on April 15, 1998 (63 FR 18504). The standards are codified at 40 CFR part 63, subpart S. The pulp and paper industry consists of facilities engaged in the production of pulp and/or paper/paperboard. This category includes, but is not limited to, integrated mills (where pulp and paper or paperboard are manufactured on-site), non-integrated mills (where paper/paperboard or pulp are manufactured, but not both), and secondary fiber mills (where waste paper is used as the primary raw material). The subpart S MACT standard applies to major sources of HAP emissions from the pulp production areas (e.g., pulping system vents, pulping process condensates) at chemical, mechanical, secondary fiber and non-wood pulp mills; bleaching operations; and papermaking systems. A separate NESHAP (40 CFR part 63, subpart MM) applicable to chemical recovery processes at kraft, soda, sulfite and stand-alone semi-chemical pulp mills was promulgated on January 12, 2001 (66 FR 3180). Today's rule takes final action only with respect to the RTR for subpart S. The source category covered by subpart S includes 171 facilities. As explained below, we are re-adopting the MACT standards pursuant to section 112(f)(2). We also conducted a section 112(d)(6) review and evaluated developments in practices, processes and control technologies applicable to all the emission sources subject to the pulp and paper MACT. After reviewing the comments provided at proposal, we have determined that our conclusion that there have been no developments in practices, processes and control technologies since the subpart S standard was originally promulgated was correct. Although we proposed revisions to the kraft pulping process condensate standards based on our conclusion at proposal that existing technologies were achieving greater than the 92 percent minimum level of control, we re-analyzed the performance data and impacts of revising the kraft condensate standards in response to public comments and have decided not to promulgate amendments to those standards because we found that the costs and impacts associated with the HAP reduction were not reasonable. Consequently, we are not revising the MACT standards for subpart S pursuant to our 112(d)(6) review as explained further below.

    In addition, this section describes the other final rule amendments to the pulp and paper industry NESHAP. These revisions include the addition of repeat emissions testing for selected process equipment; changes to the requirements that apply during periods of SSM; the addition of electronic reporting requirements; and various minor changes to address technical and editorial corrections.

    1. Repeat Emissions Testing

    As part of an ongoing effort to improve compliance with the standard, we are adding 40 CFR 63.457(a)(2) to require repeat air emissions performance testing once every 5 years for facilities complying with the standards for kraft, soda and semi-chemical pulping vent gases (40 CFR 63.443(a)); sulfite processes (40 CFR 63.444); and bleaching systems (40 CFR 63.445). Repeat performance tests are already required by permitting authorities for some facilities.2 Requiring periodic repeat performance tests will help to ensure that control systems are maintained properly over time and a more rigorous testing requirement will better assure compliance with the standard.3

    2Located in 11 states.

    3For information on the cost associated with the repeat testing requirement, see the memorandum in the docket titled,Costs, Environmental, and Energy Impacts for the Promulgated Subpart S Risk and Technology Review.

    In this action, repeat air emissions testing will be required for mills complying with the kraft pulping process condensate standards in 40 CFR 63.446 using a steam stripper since stripper off-gases are, by definition, part of the LVHC system. We are clarifying that repeat air emissions testing will not be required for: (1) Knotter or screen systems with HAP emission rates below the criteria specified in 40 CFR 63.443(a)(1)(ii); or (2) decker systems using fresh water or paper machine white water, or decker systems using process water with a total HAP concentration less than 400 ppmw as specified in 40 CFR 63.443(a)(1)(iv).

    2. Startup, Shutdown and Malfunction

    We are also finalizing changes to the subpart S NESHAP to eliminate the SSM exemption, as discussed further in section III.B below. The changes include:

    (1) Revising 40 CFR 63.443(e), 63.446(g) and 63.459(b)(11)(ii) to eliminate reference to periods of SSM;

    (2) Revising 40 CFR 63.453(q) to incorporate the general duty from 40 CFR 63.6(e)(1)(i) to minimize emissions;

    (3) Adding 40 CFR 63.454(g), and 40 CFR 63.455(g) to require reporting and recordkeeping requirements associated with periods of malfunction;

    (4) Adding 40 CFR 63.456 (formerly reserved) to include an affirmative defense to civil penalties for violations of emissions limits caused by malfunctions that meet the criteria for establishing the affirmative defense;

    (5) Adding 40 CFR 63.457(o) to specify the conditions for performance tests; and

    (6) Revising Table 1 to specify that 40 CFR 63.6(e)(1)(i) and (ii), 40 CFR 63.6(e)(3), 40 CFR 63.6(f)(1); 40 CFR 63.7(e)(1), 40 CFR 63.8(c)(1)(i) and (iii), and the last sentence of 40 CFR 63.8(d)(3); 40 CFR 63.10(b)(2)(i), (ii), (iv) and (v); 40 CFR 63.10(c)(10), (11) and (15); and, 40 CFR 63.10(d)(5) of the General Provisions do not apply.

    3. Electronic Reporting

    To increase the ease and efficiency of data submittal and improve data accessibility, we are requiring mills to submit electronic copies of performance test reports to the EPA's WebFIRE database, as discussed in section III.D below. The electronic reporting requirement is being added under 40 CFR 63.455(h).

    4. Additional Test Methods for Measuring Methanol Emissions

    To allow mills greater flexibility in demonstrating compliance with emission limits for total HAP measured as methanol, we are revising 40 CFR 63.457(b)(5)(i) to include four additional test methods for measuring methanol emissions from pulp and paper processes, as alternatives to EPA Method 308 of part 63, appendix A. The four additional test methods are:

    (1) Method 18 of part 60, appendix A-6;

    (2) Method 320 of part 63, appendix A;

    (3) ASTM D6420-99, determined to be an acceptable alternative to EPA Method 18; and

    (4) ASTM D6348-03, determined to be an acceptable alternative to EPA Method 320.

    We are also revising 40 CFR 63.14(b)(28) and (b)(54) to IBR ASTM D6420-99 and ASTM D6348-03, respectively.

    5. Other

    We are also finalizing the following minor changes to the subpart S NESHAP and part 63 General Provisions to address technical and editorial corrections:

    (1) Revising 40 CFR 63.457(b)(1) to specify part 60, appendix A-1 for Method 1 or 1A;

    (2) Revising 40 CFR 63.457(b)(3) to specify part 60, appendix A-1 for Method 2, 2A, 2C or 2D;

    (3) Revising 40 CFR 63.457(b)(5)(ii) to specify part 60, appendix A-8 for Method 26A;

    (4) Revising 40 CFR 63.457(d) to specify part 60, appendix A-7 for Method 21;

    (5) Revising 40 CFR 63.457(k)(1) to specify part 60, appendix A-2 for Method 3A or 3B, and include ASME PTC 19.10—part 10 as an alternative to Method 3B;

    (6) Revising 40 CFR 63.457(c)(3)(ii) to replace NCASI Method DI/MEOH-94.02 with the more recent version of this method, NCASI Method DI/MEOH-94.03;

    (7) Revising 40 CFR 63.14(f)(1) to incorporate by reference NCASI Method DI/MEOH-94.03;

    (8) Redesignating 40 CFR 63.14(f)(3) and (f)(4) as 40 CFR 63.14(f)(4) and (f)(5) and adding 40 CFR 63.14(f)(3) to incorporate by reference NCASI Method DI/HAPS-99.01;

    (9) Revising 40 CFR 63.14(i)(1) to incorporate by reference ANSI/ASME PTC 19.10-1981; and

    (10) Revising Table 1 so it aligns more closely to the sections in subpart A which have been amended or reserved over time.

    B. What are the requirements during periods of startup, shutdown and malfunction?

    In 2008, the Court vacated portions of two provisions in the EPA's CAA section 112 regulations governing the emissions of HAP during periods of SSM.Sierra Clubv.EPA,551 F.3d 1019 (D.C. Cir. 2008),cert.denied, 130 S. Ct. 1735 (U.S. 2010). Specifically, the Court vacated the SSM exemption contained in 40 CFR 63.6(f)(1) and 40 CFR 63.6(h)(1), that are part of a regulation, commonly referred to as the “General Provisions Rule,” that the EPA promulgated under section 112 of the CAA. When incorporated into CAA section 112(d) regulations for specific source categories, these two provisions exempt sources from the requirement to comply with the otherwise applicable CAA section 112(d) emission standard during periods of SSM.

    Consistent withSierra Clubv.EPA,we have eliminated the SSM exemption in this rule. We have also revised Table 1 (the General Provisions table) in several respects. For example, we have eliminated the General Provisions' requirement that the source develop a SSM plan. We have also eliminated or revised certain recordkeeping and reporting that related to the SSM exemption. The EPA has attempted to ensure that we have not included in the regulatory language any provisions that are inappropriate, unnecessary or redundant in the absence of the SSM exemption.

    In establishing the standards for startup and shutdown, we reviewed the information available to us from the 2011 pulp and paper ICR pertaining to equipment and control and compliance demonstration methods during startup and shutdown. Some commenterssuggested that we establish different standards for periods of startup and shutdown. However, the information available to us regarding startup and shutdown does not show that emissions are higher during startup or shutdown or indicate a need for alternate standards for these periods. Further, the commenters have not shown that sources cannot comply with the standards as proposed and have not provided information to support development of alternative standards that would apply during startup and shutdown periods.

    Our findings relative to startup and shutdown for the universe of pulp and paper processes regulated under subpart S (which offers a variety of compliance options) are discussed in detail in the response-to-comments document and in a memorandum in the docket.4 Based upon these findings, and consistent with our proposal, the EPA has not established different standards for startup and shutdown periods.

    4SeeReview of Pulp and Paper Information Collection Request (ICR) Responses Pertaining to Startup and Shutdown of Subpart S Equipment,in the docket for the subpart S rulemaking.

    Periods of startup, normal operations and shutdown are all predictable and routine aspects of a source's operations. However, by contrast, malfunction is defined as a “sudden, infrequent, and not reasonably preventable failure of air pollution control and monitoring equipment, process equipment or a process to operate in a normal or usual manner * * *” (40 CFR 63.2). The EPA has determined that CAA section 112 does not require that emissions that occur during periods of malfunction be factored into development of CAA section 112 standards. Under section 112, emissions standards for new sources must be no less stringent than the level “achieved” by the best controlled similar source and for existing sources generally must be no less stringent than the average emission limitation “achieved” by the best performing 12 percent of sources in the category. There is nothing in section 112 that directs the agency to consider malfunctions in determining the level “achieved” by the best performing or best controlled sources when setting emission standards. Moreover, while the EPA accounts for variability in setting emissions standards consistent with the section 112 case law, nothing in that case law requires the agency to consider malfunctions as part of that analysis. Section 112 uses the concept of “best controlled” and “best performing” unit in defining the level of stringency that section 112 performance standards must meet. Applying the concept of “best controlled” or “best performing” to a unit that is malfunctioning presents significant difficulties as malfunctions are sudden and unexpected events.

    Further, accounting for malfunctions would be difficult, if not impossible, given the myriad different types of malfunctions that can occur across all sources in the category and given the difficulties associated with predicting or accounting for the frequency, degree and duration of various malfunctions that might occur. As such, the performance of units that are malfunctioning is not “reasonably” foreseeable. See, e.g.,Sierra Clubv.EPA,167 F. 3d 658, 662 (D.C. Cir. 1999) (the EPA typically has wide latitude in determining the extent of data-gathering necessary to solve a problem. We generally defer to an agency's decision to proceed on the basis of imperfect scientific information, rather than to “invest the resources to conduct the perfect study.”). See also,Weyerhaeuserv.Costle,590 F.2d 1011, 1058 (D.C. Cir. 1978) (“In the nature of things, no general limit, individual permit, or even any upset provision can anticipate all upset situations. After a certain point, the transgression of regulatory limits caused by `uncontrollable acts of third parties,' such as strikes, sabotage, operator intoxication or insanity, and a variety of other eventualities, must be a matter for the administrative exercise of case-by-case enforcement discretion, not for specification in advance by regulation.”). In addition, the goal of a best controlled or best performing source is to operate in such a way as to avoid malfunctions of the source and accounting for malfunctions could lead to standards that are significantly less stringent than levels that are achieved by a well-performing non-malfunctioning source. The EPA's approach to malfunctions is consistent with section 112 and is a reasonable interpretation of the statute.

    In the event that a source fails to comply with the applicable CAA section 112(d) standards as a result of a malfunction event, the EPA would determine an appropriate response based on, among other things, the good faith efforts of the source to minimize emissions during malfunction periods, including preventative and corrective actions, as well as root cause analyses to ascertain and rectify violations. The EPA would also consider whether the source's failure to comply with the CAA section 112(d) standard was, in fact, “sudden, infrequent, not reasonably preventable” and was not instead “caused in part by poor maintenance or careless operation.” 40 CFR 63.2 (definition of malfunction).

    Finally, the EPA recognizes that even equipment that is properly designed and maintained can sometimes fail and that such failure can sometimes cause a violation of the relevant emission standard. (See, e.g.,State Implementation Plans: Policy Regarding Excessive Emissions During Malfunctions, Startup, and Shutdown(Sept. 20, 1999);Policy on Excess Emissions During Startup, Shutdown, Maintenance, and Malfunctions(Feb. 15, 1983)). The EPA is therefore adding to the final rule an affirmative defense to civil penalties for violations of emission standards that are caused by malfunctions. See 40 CFR 63.441 (defining “affirmative defense” to mean, in the context of an enforcement proceeding, a response or defense put forward by a defendant, regarding which the defendant has the burden of proof and the merits of which are independently and objectively evaluated in a judicial or administrative proceeding). We also have added other regulatory provisions to specify the elements that are necessary to establish this affirmative defense; the source must prove by a preponderance of the evidence that it has met all of the elements set forth in 40 CFR 63.456. (See 40 CFR 22.24). The criteria ensure that the affirmative defense is available only where the event that causes a violation of the emission standard meets certain criteria. For example, to successfully assert the affirmative defense, the source must prove by a preponderance of the evidence that the violation was “caused by a sudden, infrequent, and unavoidable failure of air pollution control equipment, process equipment, or a process to operate in a normal or usual manner * * *.” The criteria also are designed to ensure that steps are taken to correct the malfunction, to minimize emissions in accordance with 40 CFR 63.456 and to prevent future malfunctions. For example, the source must prove by a preponderance of the evidence that “[r]epairs were made as expeditiously as possible when a violation occurred * * *” and that “[a]ll possible steps were taken to minimize the impact of the violation on ambient air quality, the environment and human health * * *.” In any judicial or administrative proceeding, the Administrator may challenge the assertion of the affirmative defense and, if the respondent has not met its burden of proving all of the requirements in the affirmative defense, appropriate penalties may be assessedin accordance with section 113 of the CAA (see also 40 CFR 22.27).

    The EPA is including an affirmative defense in the final rule in an attempt to balance a tension, inherent in many types of air regulation, to ensure adequate compliance while simultaneously recognizing that despite the most diligent of efforts, emission standards may be violated under circumstances beyond the control of the source. The EPA must establish emission standards that “limit the quantity, rate, or concentration of emissions of air pollutants on a continuous basis.” 42 U.S.C. 7602(k) (defining “emission limitation and emission standard”). See generallySierra Clubv.EPA,551 F.3d 1019, 1021 (D.C. Cir. 2008). Thus, the EPA is required to ensure that section 112 emissions standards are continuous. The affirmative defense for malfunction events meets this requirement by ensuring that even where there is a malfunction, the emission standard is still enforceable through injunctive relief. While “continuous” standards, on the one hand, are required, there is also case law indicating that in many situations, it is appropriate for the EPA to account for the practical realities of technology. For example, inEssex Chemicalv.Ruckelshaus,486 F.2d 427, 433 (D.C. Cir. 1973), the D.C. Circuit acknowledged that in setting standards under CAA section 111 “variant provisions” such as provisions allowing for upsets during startup, shutdown and equipment malfunction “appear necessary to preserve the reasonableness of the standards as a whole and that the record does not support the `never to be exceeded' standard currently in force.” See also,Portland Cement Associationv.Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973).Though intervening case law such asSierra Clubv.EPAand the CAA 1977 amendments call into question the relevance of these cases today, they support the EPA's view that a system that incorporates some level of flexibility is reasonable. The affirmative defense simply provides for a defense to civil penalties for violations that are proven to be beyond the control of the source. By incorporating an affirmative defense, the EPA has formalized its approach to upset events. In a CWA setting, the Ninth Circuit required this type of formalized approach when regulating “upsets beyond the control of the permit holder.”Marathon Oil Co.v.EPA,564 F.2d 1253, 1272-73 (9th Cir. 1977). See also,Mont. Sulphur & Chem. Co.v.United States EPA,2012 U.S. App. LEXIS 1056 (Jan 19, 2012) (rejecting industry argument that reliance on the affirmative defense was not adequate). But see,Weyerhaeuser Co.v.Costle,590 F.2d 1011, 1057-58 (D.C. Cir. 1978) (holding that an informal approach is adequate). The affirmative defense provisions give the EPA the flexibility to both ensure that its emission standards are “continuous” as required by 42 U.S.C. 7602(k), and account for unplanned upsets and thus support the reasonableness of the standard as a whole.

    C. What are the effective and compliance dates of the standards?

    The revisions to subpart S being promulgated in this action are effective on September 11, 2012. The compliance date for the revisions we are finalizing today is September 11, 2012, with the exception of the following: (1) The first of the 5-year repeat tests must be conducted within 36 months of the effective date of the standards, by September 7, 2015, and thereafter within 60 months from the date of the previous performance test; and (2) the date to submit performance test data through ERT is within 60 days after the date of completing each performance test.

    D. What are the requirements for submission of performance test data to the EPA?

    As stated in the proposed rule preamble, the EPA is taking a step to increase the ease and efficiency of data submittal and data accessibility. Specifically, the EPA is requiring owners and operators of pulp and paper facilities to submit electronic copies of required performance test reports.

    As mentioned in the proposed rule preamble, data will be collected through an electronic emissions test report structure called the ERT. The ERT will generate an electronic report, which will be submitted to the EPA's CDX through the CEDRI. A description of the ERT can be found at:http://www.epa.gov/ttn/chief/ert/index.html,and CEDRI can be accessed through the CDX Web site:(http://www.epa.gov/cdx).

    The requirement to submit performance test data electronically to the EPA does not create any additional performance testing and will apply only to those performance tests conducted using test methods that are supported by the ERT. A listing of the pollutants and test methods supported by the ERT is available at the previously mentioned ERT Web site. Through this approach, industry is expected to save time in the performance test submittal process. Additionally this rulemaking benefits industry by cutting back on recordkeeping costs as the performance test reports that are submitted to the EPA using CEDRI are no longer required to be kept on-site.

    As mentioned in the proposed rule preamble, state, local and tribal agencies will benefit from more streamlined and accurate review of electronic data that will be available on the EPA WebFIRE database. Additionally, performance test data will become available to the public through WebFIRE. Having such data publicly available enhances transparency and accountability. The major advantages of electronic reporting are more fully explained in the proposed rule preamble (76 FR 81348).

    In summary, in addition to supporting regulation development, control strategy development and other air pollution control activities, having an electronic database populated with performance test data will save industry, state, local, tribal agencies and the EPA significant time, money and effort, while improving the quality of emissions inventories and, as a result, air quality regulations.

    IV. Summary of Significant Changes Since Proposal A. Changes to the Risk Assessment Performed Under CAA Section 112(f)

    As noted at proposal (76 FR 81344), the risk analysis performed for the pulp and paper source category indicated that the cancer risks to the individual most exposed are no higher than 10 in 1 million due to actual or MACT-allowable emissions. These risks are considerably less than 100 in 1 million, which is the presumptive upper limit of risk acceptability. The risk analysis also showed generally low cancer incidence (1 case every 100 years); no potential for adverse environmental effects or human health multipathway effects; no potential for chronic noncancer impacts; and, as explained in the proposal and further below, while a potential exists for some acute inhalation impacts, they are likely to be minimal because the potential impacts occur in uninhabited areas where terrain prevents ready access by the public. Also, we received comment on the risk assessment that is addressed in our comment response.5

    5See the memorandum in the docket titled,National Emission Standards for Hazardous Air Pollutants From the Pulp and Paper Industry (40 CFR Part 63, Subpart S) Residual Risk and Technology Review, Final Amendments Response to Public Comments on December 27, 2011 Proposal.

    The number of people exposed to cancer risks of 1 in 1 million or greater due to emissions from the source category was determined to be relatively low (76,000). The number of people exposed at the MIR cancer risk of 10 in 1 million or greater due to emissionsfrom the source category was significantly lower (40). Considering all of this health information and the uncertainties discussed in the proposal preamble (76 FR 81338-40), the risks from the pulp and paper source category were deemed to be acceptable. 76 FR 81344.

    Our analysis of facilitywide risks showed five mills with maximum chronic cancer risks between 10 and 30 in 1 million and four mills with maximum chronic noncancer TOSHI between 1 and 2. For the facility with the highest facilitywide risk (i.e., 30 in 1 million), emissions from the pulp and paper (subpart S) source category only contributed 27 percent to the chronic cancer risk and 23 percent to the chronic noncancer risk.

    As directed by section 112(f)(2), we conducted an analysis to determine if the standard provides an ample margin of safety analysis to protect public health. Under the ample margin of safety analysis, we first considered the health impacts for the source category. Then we analyzed the potential for emissions reductions within the source category by evaluating available control technologies and their capabilities for reduction of the residual risk remaining after the implementation of MACT controls. Then we evaluated the potential costs and energy impacts of these additional controls.6 Based on this analysis, we conclude that the current standard protects public health with an ample margin of safety. (76 FR 81344) We solicited comment on the proposal (76 FR 81349-51), asking for any additional data that may help to reduce the uncertainties inherent in the risk assessments and other analyses. We were specifically interested in receiving corrections to the mill-specific HAP emissions data used in the risk modeling. The mill-specific emissions data were available for download on the EPA's RTR web page at:http://www.epa.gov/ttn/atw/rrisk/rtrpg.html.Commenters on the subpart S proposal were asked to determine whether any of the data were unrepresentative or inaccurate and to submit their comments on the data downloaded from the RTR web page.

    6For a full discussion of this analysis, see the memorandum in the docket titled,Ample Margin of Safety Analysis for Pulping and Papermaking Processes.

    A total of 81 mills submitted specific revisions to their mill-specific data. The EPA reviewed the data revisions to determine whether they would influence the outcome of the risk assessment results as proposed. Specifically, the mills submitted data revisions that remove pollutants, change emission release point type from fugitive to stack and change stack/fugitive emission parameters. Our review indicated that these changes would reduce emissions and/or impacts. Consequently, we have determined that the results of the revisions would most likely adjust the risk results for the subpart S source category downward (i.e., reduce risk) if we were to remodel the category. Therefore, we have decided not to remodel risk for purposes of promulgating the subpart S residual risk review because our conservative approach at proposal overstates existing risk and reinforces the conclusions from the risk modeling conducted at proposal. A memorandum for the docket was prepared that summarizes the data revisions received and supports the decision not to remodel risk.7 A separate document presents the results of the EPA's risk analysis.8 We conclude based on the Residual Risk Assessment cited here that the risks from the subpart S pulp and papermaking source category are acceptable and that the current standard protects the public health with an ample margin of safety. Consequently, we are re-adopting the MACT standards for subpart S pursuant to our 112(f)(2) review.

    7See the memorandum in the docket titled,Recommendations Concerning Residual Risk Remodeling for the Pulp and Paper Industry.

    8SeeResidual Risk Assessment for the Pulp and Paper Source Category,in the docket for the subpart S rulemaking.

    B. Changes to the Technology Review Performed Under CAA Section 112(d)(6)

    As a result of our initial technology review, we proposed on December 27, 2011, to strengthen the kraft pulping process condensate standards in 40 CFR 63.446 by increasing the HAP removal requirement from 92 to 94 percent (or an equivalent pound/ODTP or ppmw limit). Several commenters opposed the proposed revisions to the kraft pulping process condensate standards, for reasons including calculation methodology issues, data misinterpretation, undetermined impacts on mills utilizing the clean condensate compliance alternative and additional steam and energy impacts for rule compliance. A detailed discussion of these comments can be found in the Response to Comment Document.9

    9See the memorandum in the docket titled,National Emission Standards for Hazardous Air Pollutants From the Pulp and Paper Industry (40 CFR Part 63, Subpart S) Residual Risk and Technology Review, Final Amendments Response to Public Comments on December 27, 2011, Proposal.

    In response to these comments, we have: (1) Re-analyzed the condensate collection information provided in the ICR; (2) evaluated the design criteria (and energy impacts) of the steam strippers and biotreatment units typically used by facilities to assure compliance with 40 CFR 63.446; (3) reviewed additional cost and control information that supplements the data collected in the ICR; and (4) considered the effects of the proposed standards on CCA mills.

    In our re-analysis, we estimated the potential nationwide cost associated with increasing condensate treatment from 92 to 94 percent reduction would be $423 million (capital) and $85.1 million/yr. We estimated a HAP emissions reduction of 2,300 tpy, for a cost effectiveness of $37,000/ton of HAP. This estimate includes the costs associated with a repeat CCA demonstration and switching from CCA to HVLC pulping vent gas control at mills where the CCA approach would be adversely affected. Our revised cost estimates for a 94 percent reduction standard are significantly higher than the cost estimates that we developed at proposal for a 94 percent reduction standard because we determined that a greater number of mills would be affected after the potential impacts on CCA mills. Also, the cost-to-sales ratios for the three affected small businesses are also higher with one small business now estimated to have a ratio of 15 percent.10 For this reason alone, we would decline to revise the standard under (d)(6) because we find increasing the standard from 92 percent to 94 percent not cost effective. In addition, after review of the comments, we recognize that we failed to fully consider the energy and secondary air emissions impacts associated with the 94 percent reduction limit for these mills, due to increased steam demand for new and upgraded stripper systems. Upon review of the information in the record, we believe these factors also weigh against revising the MACT standards. In the proposal, we estimated energy and secondary emissions impacts based on increased electricity requirements for biological treatment. We did not assume there were any additional impacts from new and upgraded steam strippers because they were expected to be more energy efficient, however, commenters indicated that additional steam would be required for these facilities. We haveconsidered these energy and secondary air emissions impacts for steam strippers for the final rule as a result of the public comments.11

    10For further information on the costs and impacts associated with the 93 and 94 percent reduction options considered for promulgation of the kraft pulping process condensate standards, see the memorandum in the docket titled,Costs, Environmental, and Energy Impacts for the Promulgated Subpart S Risk and Technology Review.

    11 Id.

    Similarly, we also analyzed the potential nationwide costs and impacts of increasing the 92 percent reduction standard to 93 percent reduction. For a 93 percent reduction standard, estimated capital costs would be $396 million and estimated annualized costs would be $74.4 million/yr, with a HAP emission reduction of 989 tpy, or approximately $75,000/ton of HAP. Additionally, the cost-to-sales ratio is nearly 6 percent for one of the three small businesses.12 For this reason alone, we would decline to revise the standard under (d)(6) because we find increasing the standard from 92 percent to 93 percent not cost effective. In addition, after review of the comments, we recognize that we failed to fully consider the energy and secondary air emissions impacts associated with the 93 percent reduction limit for these mills, due to increased steam demand for new and upgraded stripper systems. Upon review of the information in the record, we believe these factors also weigh against revising the MACT standards.

    12 Id.

    Based on this re-analysis, we do not consider the costs and impacts associated with the HAP reduction that would be achieved under either the 93 or 94 percent reduction options to be reasonable. Consequently we are not revising the MACT standards pursuant to section 112(d)(6).

    C. Other Changes Since Proposal 1. Repeat Emissions Testing

    In response to a comment, we have added language to clarify that the 5-year repeat testing is not required for: (1) Knotter or screen systems with HAP emission rates below the criteria specified in 40 CFR 63.443(a)(1)(ii); or (2) decker systems using fresh water or paper machine white water or decker systems using process water with a total HAP concentration less than 400 ppm by weight as specified in 40 CFR 63.443(a)(1)(iv).

    2. Compliance Dates

    Commenters requested clarification of the electronic reporting effective date since the proposed rule stated that performance test data must be submitted “[a]s of January 1, 2012 and within 60 days of completing each performance test * * *”. The commenters noted that the January 1, 2012, date would require submission of performance testing before the final rule was in effect. In response to this comment, we have deleted reference to January 1, 2012, from the final rule. Electronic reports would be submitted within 60 days after completing each performance test.

    3. Excess Emissions Allowances

    Some commenters expressed concern regarding the EPA's request for comment in the preamble to the proposed rule (76 FR 81346) as to whether to remove or modify the excess emissions allowance provisions in 40 CFR 63.443(e), 63.446(g) and 63.459(b)(11)(ii). We are deferring final action on the excess emissions allowances until a later date in order to analyze more recent information on the allowances that we have obtained from industry. After we have completed our analysis of the data, we expect to publish a proposed rule describing the changes to the excess emissions allowance provisions that we believe are warranted and provide a further opportunity for public comment before taking final action with respect to the excess emissions allowance provisions.

    4. Affirmative Defense

    We have made certain changes to 40 CFR 63.456 for the final rule to clarify the circumstances under which a source may assert an affirmative defense. The changes to 40 CFR 63.456 clarify that a source may assert an affirmative defense to a claim for civil penalties for violations of standards that are caused by malfunctions. A source can avail itself of the affirmative defense when there has been a violation of the emission standards due to an event that meets the definition of malfunction under 40 CFR 63.2 and qualifies for assertion of an affirmative defense under § 63.456. In the proposal, we used terms such as “exceedance” or “excess emissions” in 40 CFR 63.456, which created unnecessary confusion as to when the affirmative defense could be used. In the final rule, we have eliminated those terms and used the word “violation” to make clear that the affirmative defense to civil penalties is available only where an event that causes a violation of the emissions standard meets the criteria for the assertion of an affirmative defense under § 63.456.

    We have also eliminated the 2-day notification requirement that was included in 40 CFR 63.456(b) at proposal because we expect to receive sufficient notification of malfunction events that result in violations in other required compliance reports, such as the malfunction report required under 40 CFR 63.455(g). In addition, we have revised the 45-day affirmative defense reporting requirement that was included in 40 CFR 63.456(b) at proposal to require sources to include the report in the first compliance, deviation or excess emission report due after the initial occurrence of the violation, unless the compliance, deviation or excess emission report is due less than 45 days after the violation. In that case, the affirmative defense report may be included in the second compliance, deviation or excess emission report due after the initial occurrence of the violation. Because the affirmative defense report is now included in a subsequent compliance, deviation or excess emission report, there is no longer a need for the proposed 30-day extension for submitting a stand-alone affirmative defense report. Consequently, we are not including this provision in the final rule.

    V. Summary of Cost, Environmental and Economic Impacts A. What are the affected facilities?

    There are currently 171 major source pulp and paper mills operating in the United States. The affected source for kraft, soda, sulfite or semi-chemical pulping processes is the total of all HAP emission points in the pulping and bleaching systems. The affected source for mechanical, secondary or non-wood pulping processes is the total of all HAP emission points in the bleaching system. We estimate that 114 of the 171 major source mills operate subpart S processes that are affected by this final rule.

    B. What are the air quality impacts?