EPA issues final revisions to Non-Hazardous Secondary Materials Rule, but questions remain

Vol. 44 No. 4

Susan Parker Bodine is a partner at Barnes & Thornburg LLP and is a former assistant administrator of EPA’s Office of Solid Waste and Emergency Response.

On February 7, 2013, the Environmental Protection Agency (EPA) published in the Federal Register the final rule on “Non-Hazardous Secondary Materials That Are Solid Waste” (New NHSM Rule). This Rule was published in the same Federal Register notice as the final “Commercial and Industrial Solid Waste Incineration Units” (New CISWI Rule). EPA published another related rule, the “Final Emission Standards for Major Source Industrial, Commercial, and Institutional Boilers and Process Heaters” (New Boiler MACT Rule), on January 31, 2013.

The New NHSM Rule sets forth the process and criteria for determining whether a non-hazardous secondary material (NHSM) is deemed a waste (rather than fuel) when combusted. Combustion units that burn non-hazardous wastes are regulated under section 129 of the Clean Air Act (CAA), while boilers and industrial furnaces that burn fuel are subject to standards under section 112 of the act.

If a boiler located at a commercial or industrial facility burns a waste it triggers regulation as a commercial and industrial solid waste incineration (CISWI) unit. In fact, if a combustion unit burns a NHSM and the operator does not keep records demonstrating that the NHSM is not a waste, the combustion unit becomes regulated as a CISWI unit. 40 C.F.R. §§ 60.2265 and 60.2875. Once a boiler becomes a CISWI unit, it stays regulated as a CISWI unit for six months. Thus, if a boiler inadvertently burns a waste material and cannot meet the CISWI emissions standards, the combined impact of the NHSM Rule and the CISWI Rule is to shut down that boiler for six months.

The final Rules

The New NHSM Rule amends a final NHSM Rule that EPA published in March 2011. The New NHSM Rule retains the earlier regulatory structure, in that a combusted NHSM is a waste unless the operator can demonstrate that the material meets certain criteria showing that the combustion is a legitimate use of the NHSM as a fuel or an ingredient and not waste disposal.

There are three avenues for determining that a NHSM is not a waste when combusted as a fuel: (1) self-determination, (2) petition for a non-waste determination, and (3) categorical non-waste determination by rule.

A combustor can determine for itself that a NHSM is not a waste if the material has not been discarded and the combustor and generator are the same entity. Or, if the material has been discarded (e.g., abandoned tire piles), a combustor can determine for itself that the material has been processed into a non-waste. Any person (not just the generator) may combust the processed non-waste in a unit that meets Boiler MACT (as opposed to CISWI) standards. According to EPA, processing a waste into a non-waste must involve the removal of contaminants, not just drying or sizing a material.

Both generator-combusted material and processed material must meet EPA’s legitimacy criteria to be considered a fuel rather than a waste. Specifically, the fuel must:

  • be managed as a valuable commodity;
  • have meaningful heating value (if the fuel value is at least 5000 Btu on an as-fired basis you can presume that this criterion is met); and
  • have contaminants (CAA pollutants contained in the material before combustion) at levels that are lower than or comparable to the traditional fuel that the unit is designed to burn.

Under the contaminant criterion, EPA looks at contaminants in the NHSM before combustion, rather than emissions. Both industry and environmental advocates have criticized this approach because it does not focus on public health impacts. EPA admits emissions are more relevant to risk but defends its approach by noting that the objective of the New NHSM Rule is to identify when discard is taking place and not risk reduction. New NHSM Rule, 78 Fed. Reg. 9112, 9141 (Feb. 7, 2013).

EPA has issued “comfort letters” agreeing that specific materials are non-wastes. Most of the comfort letters involve processing. EPA has posted these comfort letters on its website related to NHSM regulations.

Absent processing, a third party cannot combust a NHSM in a boiler or industrial furnace unless EPA has made a determination that the material is not a waste. The first avenue for this determination is to petition EPA. In the New NHSM Rule, EPA made changes to the petition process to allow petitions for categories of fuels, not just individual facilities, and to allow petitions to EPA Headquarters, instead of the EPA region, if the fuel is to be combusted at facilities in multiple EPA regions. The petition must describe how the combustion of the fuel meets EPA’s legitimacy criteria.

The second avenue for a determination that a material qualifies as a fuel is a rulemaking. In the New NHSM Rule, EPA lists four categories of NHSM as fuels:

  • scrap tires;
  • resinated wood;
  • coal refuse;
  • pulp and paper sludges combusted on-site.

The definitions that establish the scope of the scrap tire and resinated wood listings are found at 40 C.F.R. 241.2. The conditions that govern the scope of the coal refuse and pulp and paper sludge listings are found in 40 C.F.R. 241.4(a).

Potentially regulated entities may petition EPA for a rulemaking to add additional materials to this list of fuels. In the preamble to the New NHSM Rule, EPA identified construction and demolition wood, paper recycling residuals, and, with more data, creosote-treated railroad ties, as potential candidates for future categorical listings, and promised to begin a rulemaking to list additional materials in the near future. In making a determination by rule, EPA may find that a material is not a waste even if it does not meet EPA’s legitimacy criteria. Relevant factors identified by EPA include whether the use of the NHSM is integrally tied to the production process and the extent to which the NHSM is functionally the same as the comparable traditional fuel. EPA also acknowledges that the existence of a contract between the generator and the combustor is relevant. 78 Fed. Reg. at 9159–60.

Some questions under the New NHSM Rule

In the New NHSM Rule, EPA made some changes to make it easier to demonstrate that a NHSM is not a waste when combusted. EPA clarified that contaminants may be grouped such that aggregate levels of categories of contaminants that share physical and chemical properties (such as volatile organic compounds and semi-volatile organic compounds) be compared. Metals may be grouped, but volatile, semi-volatile, and low-volatile metals must be grouped separately.

EPA also clarified that it is permissible to compare contaminants in NHSMs to maximum contaminant values in traditional fuel as long as a relevant comparison is being made. For example, you can compare the Upper Prediction Limit at the 90 percent confidence level for each contaminant or group of contaminants in a NHSM to the maximum value for each contaminant or group of contaminants in the appropriate traditional fuel. Notwithstanding this increased flexibility, EPA also limited the ability to make contaminant comparisons by allowing comparisons to a traditional fuel only if a combustion unit has a delivery mechanism for that traditional fuel, whether or not the combustor ever plans to combust it.

The New NHSM Rule also applies to ingredients that are combusted, but it is unclear what ingredients are actually affected by the Rule. According to EPA’s Office of Air and Radiation, if combustion of an ingredient does not take place (where combustion is a chemical process accompanied by the evolution of heat and light), then an ingredient is not subject to the New NHSM Rule or the CISWI Rule. See 76 Fed. Reg. 28,318, 28,322 (May 17, 2011); Keith Barnett, April 25, 2011, Memorandum to the CISWI Docket on Combustion in a Cement Kiln and Cement Kilns’ Use of Tires as Fuel. However, in the preamble to the New NHSM Rule, EPA’s Office of Solid Waste and Emergency Response stated that unless an ingredient remains in the product that is produced by the combustion process, the use of a NHSM as an ingredient would fail to meet EPA’s legitimacy criteria for ingredients. See 78 Fed. Reg. at 9141. If the ingredient remains in a final product, it is difficult to understand how it has been combusted. EPA recommends that combustors seek an applicability determination from EPA if they are not sure whether their ingredients are being combusted. Summary of Public Comments and Responses for: Commercial and Industrial Solid Waste Incineration (CISWI) Rule (EPA-HQ-OAR-2003-0119-2494), at 265.

Finally, in the revisions to the CISWI Rule, EPA reinstated the definition of contained gaseous material: “contained gaseous material means gases that are in a container when that container is combusted.” 40 C.F.R. §§ 60.2265, 60.2875. The Resource Conservation and Recovery Act (RCRA) definition of solid waste includes contained gaseous material, but not uncontained gases. Thus, gaseous material is not a waste when it is combusted, unless combustion occurs in a container and the container itself is combusted. This clarification is important for the continued use of landfill gas, fuels developed from the gasification of wastes and other secondary materials, and the continued combustion of gases in air pollution control equipment. Here, too, EPA has raised some questions. In particular, in footnote 5 of the preamble to the New CISWI Rule, EPA has said that containers that are combusted while holding a gas, thereby making the gas a waste, can include stationary containers. It is difficult to imagine how anyone would combust a stationary container that is containing a gas, unless there is a fire or explosion. In addition, EPA appears to be reserving the right to regulate gaseous material under RCRA in other (non-combustion) contexts.

The New Boiler MACT Rule became effective on January 31, 2012, but the date for complying with the attendant emissions standards is three to four years away. Meanwhile, operators must notify EPA by May 31, 2013, that they are subject to the Boiler MACT standards. Combustors also must immediately begin keeping records relating to the combustion of NHSMs that have been determined not to be solid wastes. 40 C.F.R. § 63.7555(d)(2).

Under the New CISWI Rule, 40 C.F.R. subpart CCCC now takes effect August 7, 2013. The amendments to the emission guidelines in 40 C.F.R. subpart DDDD became effective on February 7, 2013. However, for existing sources no new regulatory requirements (including record-keeping related to non-waste determinations) take effect until a state modifies its program or five years from now, whichever is earlier.

The New NHSM Rule is effective on April 8, 2013.

Given the draconian consequences to a combustor of misclassifying a NHSM, EPA is likely to find itself in the business of making non-waste determinations for a very long time.

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