BOARD MEETING DATE: May 4, 2007
AGENDA NO. 29

PROPOSAL:

Amend Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II

SYNOPSIS:

This proposal will exempt certain underground methane gas collection systems in and around residential buildings from permitting requirements; harmonize the exemption levels applicable to ultra violet and electron beam curable materials and other coating, ink and adhesive application operations in an equitable manner; provide for a simplified alternative permitting process for ultra-low emission rate operations as well as for certain currently exempt operations that emit four tons or more of VOCs per year; and, include other minor clarifications.

COMMITTEE:

Stationary Source, March 23, 2007, Reviewed

RECOMMENDED ACTION:

1. Certify the Notice of Exemption for Proposed Amended Rule 219 - Equipment Not Requiring a Written Permit Pursuant to Regulation II; and
2. Amend Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II, is an administrative rule that was first adopted in 1976. It exempts equipment emitting small amounts of air contaminants from District permit requirements.

At the July 14, 2006 Board meeting, staff proposed to study and reconsider exemption levels related to the application of Ultra Violet (UV) and Electron Beam (EB) curable materials. Staff has reviewed the exemption levels applicable to UV/EB and roller to roller coating manufacturing processes, compared the exemption levels applicable to other ink, adhesive and coating applications and is proposing to harmonize the exemption levels in an equitable manner. The proposal removes the unlimited usage exemption for UV/EB type materials, and instead provides all equipment and processes using ultra-low VOC material with an exemption from written permit if VOC emissions do not exceed one ton per year. A filing, pursuant to Rule 222, must be submitted for each equipment.

In the previous amendment efforts, staff also had presented a proposal to require permits for certain categories of equipment, processes or operations that are individually exempt from permits, but may emit 4 tons or more of VOCs or PM₁₀ per year in aggregate at one facility. In view of concerns raised at the time by several companies with regard to implementation of this proposal, the proposal was deferred for further study. Staff is now proposing to require a Rule 222 filing for facilities, not holding any permits from the AQMD, that exceed 4 tons of VOCs per year of emissions, cumulatively, from three specified equipment categories. These facilities will also be required to submit an annual emissions report for these equipment categories. This proposal will allow the AQMD to determine the location of these emission sources as well as the magnitude of their emissions

Proposal

Exempt from written permits passive and intermittently operated active venting systems used at and around residential structures to prevent the accumulation of naturally occurring methane and associated gases in enclosed spaces, which have very small potential for emissions.

Harmonize the exemption level applicable to UV/EB curable and other coating, ink, adhesive applications and laminating equipment and processes by establishing a uniform exemption level of three pounds per day in addition to the usage based exemption levels.

Exempt printing, coating, adhesive applications and laminating equipment and processes from written permits if they use ultra-low VOC materials provided their emissions are less than one ton per year and they submit a filing pursuant to Rule 222. This exemption replaces an existing open-ended exemption applicable only to equipment and processes utilizing UV/EB curable material and expands it in an equitable manner to all equipment and processes utilizing ultra-low VOC material.

Require certain facilities that have no AQMD permits, but in aggregate emit 4 tons or more of VOCs from certain equipment/processes that are currently exempt from written permits to register with AQMD and report annual emissions (paragraph (s)(3)). These processes/sources are: printing and associated operations, coating, adhesive and resin operations, and hand application of solvents for cleaning purposes. Under this proposal:

• a facility with an AQMD written permit will not be subject to paragraph (s)(3);
• similarly, a facility with an AQMD written permit and having 4 tons or more of VOC emissions from the specified equipment per paragraph (s)(3) will not be subject to a Rule 222 filing;
• a facility with no AQMD written permit and having less than 4 tons of VOC emissions in aggregate from the specified equipment per paragraph (s)(3) will not be subject to a Rule 222 filing; and
• a facility with no AQMD permits and having 4 tons or more of VOC emissions in aggregate from the specified equipment per paragraph (s)(3) will be subject to filing under Rule 222.

Staff is proposing a few minor language modifications to improve clarity.

Key Issues

Issue: Unrestricted usage exemption of the ultra-low VOC containing UV/EB materials should not be eliminated.

Response: The purpose of Rule 219 is to exempt from written permits sources with small level of emissions. Compared to their higher-VOC counterparts, the use of ultra-low VOC materials formulated based on UV/EB curable, powder, water-based and other technologies, is highly desirable from an air quality standpoint because of their lower potential for emissions. However, when used in large quantities, even the ultra-low VOC materials can result in sizable emissions. This is why staff is proposing to eliminate the unrestricted usage exemption applicable currently only to the UV/EB materials. Instead, staff is proposing to extend the exemption from written permits to other equipment/processes utilizing ultra-low VOC materials, regardless their technology of origin, provided their total VOC emissions are less than one ton per year. This change provides an incentive for the use of ultra-low VOC materials, creates a level playing field and results in the equal treatment of all printing and related coating, laminating equipment and associated dryers and curing equipment; and other coatings, adhesive application or laminating equipment, regardless of the generic composition (solvent based, waterborne, UV/EB, etc.) of the materials used. The one ton threshold will allow substantial flexibility in usage of these ultra-low VOC materials without requiring written permits.

Issue: The proposed VOC limit of 25 grams per liter for cleanup solvents for graphic arts materials should be changed back to 50 grams per liter for the printing category.

Response: The proposal is intended to provide an incentive for ultra-low VOC materials and is consistent with the criteria established under the Clean Air Solvent Certification program.

Issue: The EPA and AQMD have documented the lack of suitable test methods to measure very small VOC emissions from (UV/EB) processes. USEPA has allowed the use of calculated VOC as reported in the Material Safety Data Sheets (MSDS) by suppliers. The EPA approved test methods should be used in lieu of the District approved test methods. The current proposed language could mean different test methods will be used by different regions in the U.S.

Response: The staff proposal has been revised to allow the use of test methods approved by AQMD, CARB and U.S. EPA. Both the EPA and AQMD agree that there is no suitable VOC content test method for thin-film UV curable materials. However, both agencies consider EPA Method 24 to be appropriate and accurate for non-thin film UV curable materials. Most UV coating applications are non-thin film applications but the AQMD evaluates each application independently to determine the applicability of Test Method 24. MSDSs, while they provide valuable information on whether a product contains hazardous or toxic constituents, are not reliable sources of information on VOC content. For those instances where there is no suitable test method, the staff proposal allows calculation based estimation of VOCs provided the methodology has been approved by the AQMD. In the absence of any other reliable information, the default emission factor should be used to appropriately and conservatively estimate emissions for thin film applications.

Issue: AQMD staff uses a 5 percent VOC default emission factor for UV/EB curable material. There is little if any scientific basis for this factor.

Response: It is AQMD permitting policy to allow applicants, coating manufacturers or other parties to determine the VOC emissions from UV curable materials using EPA Test Method 24, if applicable, or other test methods or procedures acceptable to the AQMD, CARB and EPA. Staff is also proposing to allow calculation based estimations if there are no suitable test methods available, provided such procedures are acceptable to AQMD. Staff requires the use of this default factor only when acceptable test data or other acceptable data is unavailable. The factor is based on three VOC content tests performed by the AQMD laboratory using EPA Test Method 24. The three tests were performed on clear UV over-varnishes used in the printing industry. In the absence of other test data, staff believes the 5 percent emission factor, while conservative, is reasonable.

Issue: With respect to the proposal to require permits for certain equipment/processes that in aggregate emit greater than 4 tons per year of certain air pollutants, AQMD should require permits for these processes only at those facilities that currently do not hold any AQMD permits. For facilities that have AQMD written permits, the operations such as cooling towers are already regulated and monitored by source specific rules. In addition, the AQMD already receives both emissions data and emissions fees (e.g. cooling towers, hand wipe operations) from the unpermitted sources under the Annual Emissions Reporting (AER) program.

Response: Staff has simplified its proposal to now require filings under Rule 222 in lieu of regular written permits for these large emission sources. Furthermore, the staff proposal affects only facilities that have no permits with the AQMD. Staff also narrowed the proposal to only three categories of the equipment, processes or operations that are currently exempt under Rule 219, and for which cumulative VOC emissions from all three categories will be 4 tons or more per year. These three categories were selected due to their relatively higher potential for VOC emissions compared to other equipment, processes or operations. The other two categories, cooling towers and mixing/blending operations, deferred for further study and will not be considered at this time. The new proposal also calls for annual emissions reporting under the AER program. Under the filing program, the equipment will not be subject to New Source Review, emissions caps, BACT or offsets requirements.

Staff will be conducting field audits of sources listed under paragraph (s)(3), as well as other sources at permitted and unpermitted facilities to verify the current emissions contribution and to better assess the potential emissions for three primary air pollutants, PM₁₀, VOCs, NOx. Based on the results of the field audits, staff may return to the Governing Board in the future to include more pollutant and source categories where it is estimated that aggregate pollutant contributions are likely to exceed the four ton threshold.

California Environmental Quality Act (CEQA) Analysis

Staff has reviewed the proposed amendments to Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II, pursuant to CEQA Guidelines § 15002(k)(1) - Three Step Process, and has determined that the proposed amendments are exempt from CEQA pursuant to CEQA Guidelines § 15061(b)(3) – Review for Exemption. The proposed amendments are covered by the general rule that CEQA applies only to projects which may have a significant effect on the environment. Staff has reviewed the proposed amendments and has determined that it can be seen with certainty that there is no possibility that proposed amendments to Rule 219 will have a significant impact on air quality or other environmental areas. Therefore, the proposed project is exempt from CEQA. If approved by the Governing Board, a Notice of Exemption (NOE) will be prepared for the proposed project pursuant to CEQA Guidelines §15062 – Notice of Exemption, and mailed to the county clerks of Los Angeles, Orange, Riverside, and San Bernardino counties.

Socioeconomic Assessment

The proposed amendments to Rule 219 extend the exemption for passive and intermittently operated active venting systems to large residential structures. There is no fiscal impact on the AQMD since these systems are not permitted currently.

The proposed amendments require Rule 222 Filings with associated fees under Rule 301 as well as Annual Emission Reporting for unpermitted facilities with exempt equipment, processes, or operations that collectively emit four tons or more per year of VOCs. Additionally, the proposed amendments eliminate the current unlimited usage of UV/EB type materials and provide a harmonized, but limited exemption for a number of related processes including printing, and related coating operations, coating and associated drying operations, as well as roller to roller coating operations. Staff proposes to require a Rule 222 filing process as an alternative permitting process for these ultra-low emission rate sources. It is unknown how many facilities may now require filings under this proposal; however, the number is expected to be small. Rule 222 filing fees are approximately $150 initially and annually.

Since few additional facilities are expected to be added to the filing program under Rule 222, the impact on the AQMD will be minor.

Resource Impact

Current AQMD resources are sufficient to implements the proposed amendments with no budget impact.

Attachments (EXE 463kb)

Summary of Proposal
Rule Development Process
Key Contacts List
Resolution
Proposed Rule Language
Final Staff Report and Socioeconomic Assessment
Notice of Exemption

ATTACHMENT A

SUMMARY OF PROPOSAL