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Tuesday, February 19, 2013

EPA’s Boiler MACT: Controlling Emissions of Hazardous Air Pollutants

James E. McCarthy
Specialist in Environmental Policy

On December 20, 2012, EPA Administrator Lisa Jackson signed final revisions to EPA’s 2011 Maximum Achievable Control Technology standards for boilers (the “Boiler MACT”). The Boiler MACT has been among the most controversial EPA regulations over the last three years, because of its wide reach and potential economic impact. Boilers are widely used for heat and power throughout industry, and by large commercial establishments and institutions, as well. EPA found it difficult to adequately characterize and develop emissions data for the many types of boilers, leading many in the regulated community to complain that the originally proposed standards would not be economically achievable. Although EPA and others disputed the industry cost estimates, the revised rule modifies all of the originally proposed standards, lowering the projected cost, and grants owners and operators additional time to comply. Whether these changes will quell the long controversy or raise new issues remains to be seen.

EPA developed the regulations because it has found, based on emissions data, that boilers (especially coal-, biomass-, and liquid-fired boilers) are major sources of hazardous air pollutants (HAPs). The Clean Air Act defines a major source as any facility that emits 10 tons or more of a single listed HAP or 25 tons of any combination of HAPs annually. The HAPs themselves (187 substances) were listed by Congress in the 1990 Clean Air Act Amendments. Congress also set specific requirements for the stringency of MACT standards, limiting EPA’s ability to promulgate less stringent requirements.

The revised MACT will affect about 14,000 existing boilers and process heaters, with capital costs of $4.6 billion, according to the agency. Annualized costs, which spread the costs of capital over the expected life of the equipment and include operating and maintenance expenses, are estimated by EPA at $1.2 billion per year. In response to comments on an earlier proposal and on the promulgated 2011 rule, the modified rule reduces the number of units expected to require controls, and makes the emissions standards much less stringent, cutting the agency’s estimate of annualized control costs by more than half. Most of the costs of the final rule would be borne by boilers that burn coal, biomass, or liquid fuels; only 12% of the 14,000 units covered by the rule will need to install equipment to meet it. Most of the rest are fueled by natural gas or refinery gases. These boilers would not have to install pollution control equipment and most would experience cost savings under the rule’s provisions, according to EPA. For the rule as a whole, EPA estimated that benefits—including the avoidance of 3,100 to 7,900 premature deaths annually—would outweigh costs by at least $23 billion per year.

Affected industries and many in Congress raised objections to the rule as proposed in 2010 and as promulgated in 2011, and bills were introduced in both the House and Senate in the 112
th Congress to alter the rule’s requirements and delay its implementation. H.R. 2250 passed the House 275-142 on October 13, 2011. Provisions similar to H.R. 2250 were offered as an amendment (S.Amdt. 1660) to the Senate version of the surface transportation bill (S. 1813) on March 8, 2012, but were not adopted. Numerous stakeholders have also challenged the rules in court. These challenges are expected to proceed now that EPA has finalized the rule.

In addition to the Boiler MACT, this report discusses three related rules that EPA developed at the same time, dealing with smaller “area source” boilers and with commercial and industrial boilers that burn solid waste (the “CISWI” and solid waste rules). The latter two rules have also been controversial. Revised versions of the three related rules were also finalized December 20.

Date of Report: January 30, 2013
Number of Pages: 26
Order Number: R41459
Price: $29.95

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