SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT FINAL DRAFT STAFF REPORT

Transcription

1 FINAL DRAFT STAFF REPORT Proposed Amendments to Rule 4682 (Polystyrene, Polyethylene, and Polypropylene Products Manufacturing) November 15, 2011 Prepared by: Reviewed by: Chelsea Gonzales, Air Quality Specialist Anna Myers, Senior Air Quality Specialist Dustin Brown, Senior Air Quality Engineer Kathi Crump, Senior Air Quality Inspector Jessi Fierro, Rule Development Supervisor Errol Villegas, Strategies and Incentives Manager Samir Sheikh, Director of Strategies and Incentives I. SUMMARY The San Joaquin Valley Unified Air Pollution Control District s (District) Governing Board (Board) last amended Rule 4682 (Polystyrene, Polyethylene, and Polypropylene Products Manufacturing) on September 20, 2007, after the Ozone Rate of Progress Plan included this rule amendment as a feasible measure, as suggested by the Environmental Protection Agency (EPA). The Rule 4682 amendment was designed to reduce emissions of volatile organic compounds (VOC), trichlorofluoromethane (CFC-11), and dichlorofluoromethane from manufacturing polymeric foam and foam products by specifying VOC emission limits and emission control devices. The District submitted the 2007 amended rule to the California Air Resources Board (ARB) for forwarding to the EPA as an amendment to the State Implementation Plan (SIP) in Upon evaluation of Rule 4682, EPA finalized a limited approval of the rule as an amendment to the District portion of the SIP (Revisions to the California State Implementation Plan, San Joaquin Valley Unified Air Pollution Control District, 2011, ). A copy of the Federal Register and the Technical Support Document (EPA s Analysis of San Joaquin Valley Air Pollution Control District s Rule 4682, Polystyrene, Polyethylene, and Polypropylene Products Manufacturing [TSD], 2011) publication is included as Appendix B of this final draft staff report. Pursuant to 179 of the Clean Air Act (CAA), unless the rule has been updated and approved into the SIP within 18 months after the limited disapproval, one or more sanctions shall be imposed until EPA determines that the State has come into compliance. 1 Final Draft Staff Report with Appendices

2 The purpose of this project is to update Rule 4682 to address EPA comments, satisfy CAA requirements, and end the sanctions clock. II. RULE DEVELOPMENT PROCESS In contrast to District rule projects driven by attainment plan commitments, this project is principally focused on ensuring that a previously-adopted rule meets requirements for Reasonably Available Control Technology (RACT). As such, this rule amendment project is on an expedited schedule as compared to a full rule project for a new attainment plan commitment. All Valley emissions sources (including this source) will continue to be thoroughly evaluated for additional emissions reductions opportunities as part of upcoming attainment plan efforts, including the 2012 PM2.5 Plan. As part of the rule development process, District staff is hosting a public workshop on November 17, Staff will solicit comments from the public, stakeholders, ARB, and EPA at the workshop and during a 12 day commenting period after the workshop. Per the District s new socioeconomic policy, adopted by the District Governing Board in October 2011, staff will solicit feedback from stakeholders at the November 17 th workshop on trade organizations effected by the rule amendment. The proposed rule and final draft staff report will be published and made available to affected sources and interested parties prior to the workshop and the public hearing of the Board to consider amending the rule. The proposed amendments are scheduled to be presented to the Board for the public hearing to consider adoption of the amendments to the rule on December 15, III. BACKGROUND The two major categories of processes regulated in Rule 4682 are extrusion foam production and expansion foam production. Each process employs a blowing agent to create spaces in the plastic structure and to produce a strong, but lightweight material with good thermal insolating properties. The key difference between the two processes is that the expansion foam production facilities create most of their products in batches and are able to determine daily emissions, whereas the extrusion facilities create all final products through a continuous process where daily emissions are very difficult to determine. The following sections will elaborate on extrusion, expandable polystyrene (EPS) molding, and the control technologies available to offset VOC emissions from these production processes. 2 Final Draft Staff Report with Appendices

3 A. Extrusion Extrusion is a multi-day process that begins with plastic beads that typically contain little or no VOC content. A VOC blowing agent is added to the plastic beads in the manufacturing process to create the final product. The extrusion process is detailed as follows: 1. The plastic beads, which typically contain little or no VOC content, are delivered in bulk and pneumatically transferred to storage silos until needed. 2. The beads are moved from the storage silos and heated with a VOC-containing blowing agent, under pressure in an auger. 3. As the materials mix, the blowing agent expands and forms bubbles in the plastic which is then extruded through a forming die to form a continuous foam sheet of a desired thickness. 4. The sheet of foam is cooled, cut to the needed width, and moved to a storage area for aging for 3-7 days because the cell structures within the foam need to stabilize for manufacturing purposes. 5. After aging, the foam sheets are moved to the thermoforming machines. These machines use a combination of heat and pressure to produce a variety of products. 6. The completed products are packaged and sent to storage areas to continue the off-gassing of blowing agents and to await shipping for a minimum of 4 days. 7. Excess material that is trimmed off during manufacturing is recovered and recycled either on-site or off-site at the bead manufacturing facility. Many aspects of the manufacturing operation are variable. This includes: Property fluctuations of the liquids and gases used depending on the prevailing temperature and humidity in the manufacturing plant Property variations between the colored dyes utilized The variety of products and product sizes manufactured, requiring different levels of blowing agent Inconsistent amounts of recycled material affecting the changeability in the amount of virgin material needed Since the complete extrusion process is extensive, VOC emissions come from many phases, including: 3 Final Draft Staff Report with Appendices

4 Extrusion and sheet forming process Aging of the rolls Thermoforming Finished goods storage Continual VOC release from the residual blowing agent contained in the air pockets The variability of process times combined with multiple emissions sources contributes to the complexity of determining emissions. B. Expandable Polystyrene Molding In contrast to extrusion, the EPS molding process uses raw beads that already contain the needed blowing agent. The EPS molding process is detailed as follows: 1. Prior to molding, the beads are pre-expanded using heat to slightly expand the blowing agent and puff the beads. 2. Beads are cooled and stored in emission-controlled containers for intermediate aging and stabilization. 3. Products are molded: a. The mold is filled with puffed beads b. The beads are heated to complete their expansion c. The molded product is released d. Sometimes, depending on the product, a vacuum is used to better fill the mold 4. Finished products may require trimming to reduce flashing or seam material that escapes at mold joints or pour points. Any waste materials are collected for recycling. 5. Finished materials are packaged and moved to storage until shipping. There are three types of EPS molding encompassed within the above process: Block molders produce large blocks of foam which are cut into sheets such as building insulation, or other desired shapes after molding. There are currently no block molders in the Valley. 4 Final Draft Staff Report with Appendices

5 Shape molders make custom foam shapes such as grape shipping boxes or packing inserts to protect electronic equipment during shipment. Three of the four EPS facilities subject to Rule 4682 are shape molders. Cup molders make cups, bowls, and other similar foam containers. There is currently only one cup molder in the Valley. In all three types of molding, the two primary phases that allow for emissions losses are during pre-expansion and molding steps; in both steps, steam is used to vaporize the blowing agent and puff the bead. However, methods for capturing these emissions differ based on the type of molding facility. Operators have methods for capturing emissions from the pre-expansion step, but to date they have not been able to find a way to capture the molding emissions. Cup molders are unique in that there is no vacuum step in the cup molding process. Facilities do not have the option of tying into the vacuum line to collect emissions directly off the machine. Using individual hoods to enclose the manufacturing operation is not a feasible option because they would interfere with the air flow required for product handling, which is critical to product efficiency. It is not possible to capture the cup molding emissions unless the facility were to enclose the entire manufacturing operation using a permanent total enclosure, which is a costly alternative, and may also interfere with the air required for product handling. C. Control Technologies There are three control systems available for facilitating emissions reductions for extrusion and EPS facilities. The District researched the applicability of each option to Valley stakeholders. 1. Thermal Oxidation (Incineration): A thermal oxidizer destroys VOCs through combustion. The systems can be divided into two categories: Recuperative systems increase fuel efficiency by the use of a gas pre-heating section and a heat recovery section to capture waste heat to preheat incoming air. PM10 and VOC conversion efficiencies range from 97% to 99.9%. Regenerative systems use a ceramic heat-exchange bed to preheat processed air to within 5% of the oxidation temperature. PM 10 and VOC conversion efficiencies range from 95% to 99%. Four extrusion and three EPS facilities in Valley employ regenerative thermal oxidizer (RTO) systems. However, the cost per ton of VOC removed in RTO systems is high due to the large exhaust flow rates and low VOC concentrations of the exhaust stream so this is not a viable option for all companies. 5 Final Draft Staff Report with Appendices

6 2. Adsorption Vapor Recovery: This is accomplished by passing the VOC-laden gas through beds containing adsorbents that have a high surface area to weight ratio. Adsorption of the hydrocarbon molecules proceeds until the available surface area is filled or saturated with VOC molecules. The VOC molecules are retained until the regeneration step, or disposal of the spent adsorbent. There are three basic types of adsorption systems available: Pressure Swing Regenerated Systems and Thermally Regenerated Systems regenerate the adsorbent in-situ for reuse. Canister systems require removal of the adsorbent to another site for regeneration. While canister systems can be purchased directly from the manufacturer, the high volume of the exhaust stream and the amount of emissions to be controlled make this less practical than the other two systems. Currently, none of the facilities subject to Rule 4682 use these systems. The main reasons are due to high costs and better results from other systems and technologies. As previously discussed, most extrusion facilities in the Valley use RTOs as their control technology of choice. For EPS cup molding facilities, this is not a viable option because, as previously stated, they cannot capture the emissions from molding unless PTE is employed. If the VOC gas cannot be contained, then it cannot be sent through adsorbent beds to eliminate emissions. 3. Boilers: Boilers can be used as a VOC control technology because they provide necessary process steam for the operation and control of VOC emissions. Boilers can be modified or designed to burn the collected vapors via direct combustion and decrease the boiler s fuel consumption. Boilers at these types of facilities have demonstrated VOC destruction efficiencies of at least 95% by weight. Multiple valley facilities transport pentane emissions from the raw bead handling system and preexpansion phase to a boiler system that reduces at least 95% of the pentane. RTOS are the most effective control systems for handling VOC emissions; however issues of cost-effectiveness can halt their installation. While adsorption vapor recovery systems are effective, implementation of these systems comes secondary to RTOs and boilers for Valley facilities. Lastly, while boilers serve as the most cost-effective solution extrusion and EPS facilities cannot solely rely on these systems to reach compliance goals. 6 Final Draft Staff Report with Appendices

7 IV. DISCUSSION EPA analyzed District Rule 4682 and commented that requirements should be strengthened to implement Reasonably Available Control Technology (RACT) and allow EPA to approve the rule into the SIP. The following is a summary of EPA comments with the District s responses; refer to Appendix B to review the TSD in its entirety. Section 3.0 Definitions To improve rule clarity of Section 5.0, the following definitions were added to the rule: Expandable Polystyrene Molding: A series of processes where expandable polystyrene beads, which are polystyrene resin particles impregnated with blowing agent, undergo expansion, aging and then cup, shape, or block molding to form a low-density foam product. During expansion, the beads are expanded to the appropriate desired density by exposure to steam or hot air in a pre-expander. During aging, the expanded beads (or pre-puff) are transferred to storage silos or mesh bags to stabilize and dry. During molding, the aged pre-puff is exposed to heat in a closed mold that causes the beads to soften, re-expand, and fuse together to form the shaped product. Extrusion: the process in which a plastic resin is melted in an extruder and continuously forced through a die opening shaped like the finished product. As it leaves the die opening, the extruded plastic melt partially expands and is then drawn by a puller through forming equipment that sizes, cools, and cuts the product to length or winds it into a roll. With extruded foam products, blowing agent is injected under pressure directly into the extruder where it mixes with the plastic melt. Operator: includes but is not limited to any person who owns, leases, supervises, or operates a facility and/or equipment. Total Product Emissions: includes emissions from the manufacturing operation, after controls, plus the residual blowing agent in the finished product. The definitions of expandable polystyrene molding and extrusion were derived from the Bay Area Air Quality Management District (Bay Area) Rule 8-52 and the definition of operator was taken from District Rule For clarity purposes, the definition of total product emissions was moved from Section of the current rule to the definitions section of the proposed rule. 7 Final Draft Staff Report with Appendices

8 Section 5.0 Requirements EPA Comment: Section establishes an emission limit of 2.4 pounds of VOC per 100 pounds of total material processed, as averaged on a monthly basis. EPA generally cannot approve compliance periods exceeding 24 hours unless specific criteria are met. These criteria are discussed in a memorandum from John R. O Connor, OAQPS, dated January 20, 1984, Averaging Times for Compliance with VOC Emission Limits SIP Revision Policy, which is included as Appendix B of the staff report. The O Connor memo states that longer averaging times may be permitted under certain conditions in cases where daily emissions cannot be determined or the application of RACT for each emission point (line, machine, etc.) is not economically or technically feasible on a daily basis. The 2007 staff report for Rule 4682 does not provide a clear explanation of why daily emissions cannot be determined. Additionally, South Coast Air Quality Management District (SCAQMD) Rule 1175 and Maricopa County (Arizona) Rule 358 contain similar limits without the monthly averaging. The District needs to demonstrate why an emission limit that appears to have been achieved in practice by existing operations in other districts cannot be met on a daily basis in the District. If needed, the District could consider creating distinct limits based on the type of facility. District Response: To address EPA concerns, District staff reviewed the facilities subject to Rule 4682 and identified two affected categories: extrusion facilities and expandable polystyrene (EPS) molding facilities. The production processes of these two types of facilities differ significantly and thus required separate evaluations of the effects of a daily averaging provision. To address differences in these operations, District staff proposes to bifurcate the requirements for extrusion and EPS facilities. These would become effective January 1, As explained in detail below, proposed Section (which will apply to extrusion facilities) proposes to maintain the 2.4 pounds of VOC per 100 pounds of throughput limit, calculated monthly and Section (for EPS facilities), proposes a daily limit of 3.4 pounds of VOC per 100 pounds of throughput while maintaining the current monthly limit of 2.4 pounds of VOC per 100 pounds of throughput. Extrusion Facilities As explained in the TSD, longer averaging times may be permitted under certain conditions in cases where daily emissions cannot be determined. Section maintains existing monthly standards for extrusion facilities because the District determined that some extrusion facilities would be unable to comply with the daily averaging requirement. The O Connor memo provides five criteria that must be fulfilled in order to maintain the monthly averaging time for compliance. The five conditions and the District analysis of existing Rule 4682 are as follows. 8 Final Draft Staff Report with Appendices

9 1. The VOC limits specified in an enforceable form with appropriate compliance dates. Rule 4682 is intended to reduce VOC emissions from manufacturing polymeric foam and foam products by specifying VOC emission limits and approved emission control devices. The existing rule contains a volatile organic compound (VOC) product emissions limit of 2.4 pounds per 100 pounds of total material processed. The product emissions include emissions from the manufacturing operation, after controls, and the residual blowing agent in the finished product. Proposed amendments will bifurcate Section of the rule to Section for extrusion and Section for expansion facilities. Sections identify four other methods for compliance via emission control systems or technologies. Proposed amendments will have a compliance deadline of January 1, Therefore, Rule 4682 does contain VOC limits in an enforceable form with appropriate compliance dates. 2. A description of the affected processes and associated historical production and operating rates. The length of the extrusion process and previously mentioned manufacturing variations foster inconsistencies in process time, the amount of materials used, and subsequent VOC emissions. The inherent lack of predictability in these conditions creates difficulties for extruders to accurately estimate emissions on a daily basis. There are a variety of products needed from these facilities that require beads with a higher VOC content. One key stakeholder s biggest account is producing meat trays for two large poultry companies. However, meat trays require increased levels of blowing agent in order to improve durability and leak-resistance. This increases total product emissions from the facility and the likelihood of exceeding the VOC limit. In order to comply daily, the company would have to eliminate production of high VOC products such as these and take a significant cut in profits. The companies currently order 70% of their foam trays from the stakeholder, which constitutes about 40% of total profits. A 40% loss would result in company cutbacks and job loss. In addition, the companies would start ordering out of state because of quality standards that cannot be met anywhere else in California. This would potentially increase transportation emissions to the Valley and make it questionable as to whether the reduced production of meat trays would create overall emissions reductions. Also, demand changes quickly for extrusion facilities based on customer needs. In the past, affected stakeholders have received last minute requests from their major accounts. For example, when a food packaging processer got chickens that were too big for the current containers, they requested an emergency shipment of large containers. The stakeholder s flexibility to meet the ever-changing customer demands contributed towards a stronger business relationship and helped them receive larger order requests in the future. However, these production variations make it difficult for 9 Final Draft Staff Report with Appendices

10 the facilities to comply on a daily basis. If forced to take daily averages, extruders would have to turn down last minute requests from their large accounts and risk losing a significant amount of business. 3. A description of the control techniques to be applied to the affected processes such as low solvent and waterborne coating; technology and/or add-on controls. The District considered the feasibility of facilities complying via to switch their compliance method to one of the other four options. Section allows for compliance by the use of a non-voc blowing agent; however, this option is not feasible for extrusion facilities. The affected companies currently use methyl formate (non-voc) as a blowing agent for their plastic foam products manufacturing process. This is a costly effort for the companies because the use of non-voc blowing agents requires reconstruction and modification of the polystyrene extrusion lines. The companies have recently proposed to increase the use of methyl formate to further reduce emissions. While the agent can be used for a good portion of products, it cannot be used to produce everything due to durability requirements of certain items like meat trays. Thus, the second option is unavailable to them. The next three options (Sections ) require that at minimum, an emission capture system must collect 90% of emissions by weight and shall reduce emissions from the capture system at 95% by weight. All affected extrusion facilities currently use extensive capture and control systems, but it is impossible for them to reach 90% emission capture efficiency. One stakeholder provides a good example of how a thorough control system falls short of meeting this compliance option. The company currently controls the VOC emissions that result from the extrusion operations, thermoforming lines, and scrap reclaim systems with a 5.78 MMBtu/hr regenerative thermal oxidizer (RTO). The overall facility VOC capture efficiency from the extruders, thermoformers, grinders, reclaim extruders, fluff silos, and roll storage area is a minimum of 77.5%, as mandated by their current permit. The RTO controls the VOC emissions that are captured with a minimum destruction efficiency of 95%. However, the facility has trouble going too far beyond the minimum capture efficiency level due to numerous manufacturing emission sources and the longevity of the extrusion process. While the company achieves significant emissions reductions, their system cannot meet the minimum standards of the other three options. The other extrusion facilities also employ RTO s with similar configurations. Likewise, their systems achieve excellent destruction efficiency, but find it impossible to meet the 90% capture efficiency. Compliance option 1 in Section remains the only option for these facilities that have already fully extended company funds for efficient control technologies. 10 Final Draft Staff Report with Appendices

11 4. The nature of the emission control program whether a bubble, a regulation change, a compliance schedule, or some other form of alternative control program. This control measure was listed in the Ozone Rate of Progress Plan as a feasible measure suggested by the EPA. Rule 4682 is intended to reduce VOC emissions from manufacturing polymeric foam and foam products by specifying VOC emission limits or emission control devices. Emission reductions requirements must be technologically and economically feasible for Valley sources. This is why the District provides facilities subject to Rule 4682 with multiple compliance options. However, variable circumstances coupled with a long production period create a unique disadvantage for extrusion facilities in the Valley. Despite the funding and construction of thorough control systems, these facilities can only achieve compliance with option Furthermore, these same difficulties preventing compliance through another route make compliance with next to impossible if daily averaging is mandated. 5. The method of record keeping and reporting to be employed to demonstrate compliance with the new emission limit requirement and to support the showing that the emission limit is consistent with RFP and the demonstration of attainment. The recordkeeping verifying the 30-day average emissions limit is consistent with the District s RFP (Reasonable Further Progress) and attainment demonstrations as adopted in District attainment plans, such as the 2007 Ozone Plan. For ozone RFP and attainment demonstrations, the District utilizes summer average (April through September) emissions expressed as an average tons per day. In any emissions category, there will be some fluctuation from day to day, but the emissions for the RFP and attainment calculations are meant to represent average days. The 30-day averaging in the Rule 4682 limit still allows for an average tons per day reduction contributing to the District s RFP and attainment demonstrations. Furthermore, the Valley s nonattainment of the 8-hour ozone standard is characterized by persistent ozone concentrations, multi-day episodes of pollutant build-up, and many exceedances days each year. Under these circumstances, Rule 4682 s 30-day averaging is sufficient to contribute to improvements in the Valley s ozone concentrations. In contrast, in an area experiencing just a few days of peak ozone concentrations each year, a 24-hour limit could be essential to eliminating these peaks. This is not the case in the Valley for ozone. Implementing stringent recordkeeping guidelines is essential to the effective execution of Rule The District largely utilized EPA and ARB standards as the inspiration for this section. 11 Final Draft Staff Report with Appendices

12 The four requirements of recordkeeping are as follows: All applicable facilities (including exempt facilities) must maintain at least monthly totals of the material processed, equipment used, and type of blowing agent used. All facilities using an emissions control system to comply must maintain daily records of key operational characteristics to ensure compliance with the VOC emission requirements such as temperature, pressure, and flowrates. Facilities choosing to comply via Section must maintain records to show compliance with that section and shall calculate the daily average VOC emissions once a month. Facilities must keep and maintain records for at least five years. Extrusion facilities consistently abide by the aforementioned guidelines and provide substantial documentation to prove monthly compliance. However, due to the necessity of the multi-day production process, anything shorter than monthly averaging will significantly deter the fluidity of their recordkeeping protocol. Most extrusion facilities have one Standard Accounting Program (SAP) to account for their processes continuously. This allows facilities to back calculate the monthly average VOC emissions based on the usage of materials. It is a 10 hour process to complete the emissions calculations. This makes it impossible to conduct analyses daily with the current system. Furthermore, it is very costly for extrusion facilities to install a new recordkeeping system. Several devices would be needed in order to capture emissions data throughout the extrusion process on a daily basis and process the data into a new data acquisition system. Table-1 lists these devices and related costs for installation. TABLE 1: Recordkeeping Equipment Needed for Daily Averaging Item Item Cost Range of Items Average Facility Needed Cost (low estimate) Tank Level Sensor $5, $10,000 Fluff Silo Load Cells $75, $450,000 Virgin/RPP Silo Level $20, $180,000 Extruder Hopper Loader $57, $230,620 Data Acquisition System $25,000 1 $25,000 Micro Motion Flow Meter $20, $80,000 Reclaim weigh scale $215,000 1 $215,000 Average Total Cost $1,190, Final Draft Staff Report with Appendices

13 Installing the equipment and new accounting system necessary for daily recordkeeping would result in an average facility cost of at least $1,190,620. These costs would be in addition to the $2.5 million dollars that affected stakeholders spent to install RTOs and comply with the 2007 rule revision. Even with the installation of a new system, daily instantaneous numbers would not accurately represent emissions for extruders. This number is never consistent because the company never makes and stores the same things at the same times. Also, facilities do not make the various containers at the same ratios on a constant basis. The extrusion process variations, previously mentioned, further complicate a daily recordkeeping process. Daily recordkeeping is neither feasible through current systems nor cost-effective in another system. As discussed above, the situation of the Valley s extrusion facilities meet the five criteria of EPA s O Connor memo. The inherent multi-day production process necessitates monthly averaging for fluidity of recordkeeping, and daily instantaneous numbers would not accurately represent emissions. Also, these facilities produce a very wide range of products, some of which require beads with a higher VOC content. Demand can change quickly for extrusion facilities based on customer needs. Together, these variable circumstances and long production periods create a unique disadvantage for Valley extrusion facilities. The District concludes that the 30-day averaging limit represents RACT for extrusion facilities based on these factors and the O Connor analysis. The District will submit this analysis and documentation to EPA and request their approval of monthly averaging for extrusion as RACT. Expandable Polystyrene Facilities The District is proposing to add a daily VOC limit for EPS facilities. The affected facility currently calculates manufacturing emissions daily for their permit requirements, so extending the daily calculations to total product emissions will only create minor administrative changes. The District incorporated a new requirement into proposed Section 5.5 Compliance Plan to account for the new daily limit. Operators complying with Section will be required to submit a Compliance Plan, which includes all necessary information to show the proposed method of compliance as of January 1, The District considered the daily averaging limits imposed by other air districts. South Coast has a limit of 2.4 pounds of VOC per 100 pounds of throughput in their Rule 1175 and Bay Area has a limit of 2.8 pounds for EPS cup molding operations and 2.7 pounds for EPS shape and block molding operations in their Rule However, these limits would push one affected Valley company out of compliance when producing certain products. 13 Final Draft Staff Report with Appendices

14 The affected facility is an EPS cup molding facility that must use higher VOC content beads for quality purposes. While 90% of the company s products are produced using batch expanders with ultra-low pentane beads with a VOC content of 3.2% or less, 10% of products require production on a continuous expander with regular pentane beads with a VOC content of 5.4%. These items are customized to print the customer s logo on the cups and to provide increased resistance to leakage. Printing on cups made with ultra-low pentane beads results in poor graphic and material quality and thus, the limited use of regular pentane beads must be maintained. In South Coast, their only cup molding facility was forced to stop production of customized cups once a 2.4 pounds of VOC per 100 pounds of throughput limit was implemented. If the Valley facility was forced to comply with the 2.4 limit daily, they would have to do the same and eliminate the production of these items because no other alternative exists. A higher daily limit also allows the company to utilize molds for the continuous expanders for multiple days to fill orders and to build inventory. Without a higher limit, the stakeholder would have to purchase additional capital equipment to keep the molds throughout the whole month and space out usage to a few hours each day. The stakeholder estimates this systematic change would only allow them to reach 11% of their current daily production. The inability to fill orders in a timely fashion could result in the loss of clientele. Scaling back production to 11% each day would also increase the stakeholder s natural gas fuel usage since the continuous pre-expanders would have to be warmed up each day, rather than a few times a month. Not only would this decrease the company s efficiency, but it would increase natural gas costs exponentially. There is also high concern with the scrap that would be produced daily as a result of the increased start-up and shutdown processes. Without the higher limit, the stakeholder would incur a significant loss of productivity or profits. District staff determined that a daily averaging limit of 3.4 pounds of VOC per 100 pounds of throughput is the lowest possible limit that will still allow the facility to produce the 10% of products requiring regular pentane beads. By upholding the previous monthly limit and a new daily limit, the District is preventing anti-backsliding and enforcing a stricter provision. The District s two tier limit is more stringent than Bay Area s because theoretically, a Bay Area EPS facility could release 2.7 or 2.8 pounds of VOC per 100 pounds of throughput every day within a month and still be compliant with the rule. This far exceeds the 2.4 pounds of VOC monthly limit maintained by the District. Also, Bay Area s rule does not specify a specific averaging time. The rule states that a facility cannot exceed the limits at any time. Therefore, the District s rule maintains more stringent enforceability requirements. 14 Final Draft Staff Report with Appendices

15 To thoroughly analyze all options available to affected facilities, the District considered the feasibility of EPS facilities complying via Section to switch to compliance with one of the other four options. Section allows for compliance by the use of a non-voc blowing agent; however, this compliance option is not available to EPS cup molders. No current EPS technology exists using a non-voc blowing agent and there is no non-voc EPS alternative on the market. The next two options (Sections and 5.2.6) require that at minimum, an emission capture system must collect 90% of emissions by weight and shall reduce emissions from the capture system at 95% by weight. As previously mentioned, molders have not been able to find a feasible, cost-effective method for capturing molding emissions. For cup molders, it is impossible to capture the cup molding emissions at a 90% level unless the facility encloses the entire manufacturing operation. If permanent total enclosure (PTE) is used, the stakeholder would need to use over 120,000 cubic feet/minute of captured air to ensure adequate face velocity at raw material and personnel entrances, as well as product and personnel exits to keep the work environment adequate by removing the excess heat generated by the steam needed for molding. The use of the PTE is neither practical nor economical and would produce NOx emissions from the destruction combustion. The cost effectiveness of this control option exceeds $50,000/ton of emissions reductions. The fourth option, Section 5.2.7, requires the use of beads with an average VOC content of 4.2% or less by weight. As previously mentioned, Valley facilities have demonstrated a need for using the beads for the continuous expanders with a VOC content of 5.4% by weight. Therefore, this option is also unavailable as an alternative for the stakeholder. District staff also considered whether any other control technologies were available to decrease the affected facilities daily emissions. In a cost-effective analysis conducted by the District for this rule in 2007, District staff evaluated the cost-effectiveness of the stakeholder installing a RTO system in their current warehouse. The following figures were calculated: Capital Costs: $1.5 million Total annualized cost of the system: $574,050/year Emissions reductions: 23 tons/year Cost-effectiveness: $24,958.70/ton of reductions Following the 2007 revision of Rule 4682, the company made significant investments to comply. The stakeholder is currently paying in excess of $20,000/ton for these emission control measures. As a result, the addition of a RTO would not be financially feasible. Installing a RTO would also be difficult because the stakeholder would need to 15 Final Draft Staff Report with Appendices

16 relocate its current truck garage so that it could place the RTO in a safe area near the boilers and the bead preparation area. While the aforementioned compliance options and control technology are effective, these do not serve as solutions to bringing the stakeholder into compliance on a daily basis with a limit of 2.4 pounds of VOC per 100 pounds of throughput. As the only cup molding facility in the Valley, the stakeholder is prone to unique disadvantages, in terms of implementing other control systems and having other compliance options. Therefore, the District proposes that the addition of a limit of 3.4 pounds of VOC per 100 pounds of throughput daily to the current monthly limit is RACT for expansion facilities. The District also proposes to delete Section 5.1 of Rule 4682 since the requirements of the section are no longer valid. V. GLOBAL CLIMATE CHANGE AND GREENHOUSE GASES The California Global Warming Solutions Act of 2006 (AB 32) created a comprehensive, multi-year program to reduce greenhouse gas (GHG) emissions in California, with the overall goal of restoring emissions to 1990 levels by the year In the coming years, the Air Resources Board (ARB) and the Legislature will be developing policies and programs to implement AB 32. The District believes that the evidence and the rationale that climate change is occurring is compelling and convincing. In addition to the long-term consequences of climate change, the District is concerned with the potential ramifications of more moderate but imminent changes in weather patterns. The Valley depends heavily on agriculture for its economy and has developed agricultural practices based on the last several decades of weather patterns. Unanticipated and large fluctuations in these patterns could have a devastating effect on the Valley s economy. While there are many win-win strategies that can reduce both GHG and criteria/toxic pollutant emissions, when faced with situations that involve tradeoffs between the two, District staff believes that the more immediate public health concerns that may arise from an increase in criteria or toxic pollutant emissions should take precedence. The San Joaquin Valley Air Pollution Control District s Governing Board adopted the Climate Change Action Plan (CCAP) in August For California Environmental Quality Act (CEQA) requirements, one of the goals of the CCAP is to establish District processes for assessing the significance of greenhouse gas impacts. The District has developed a policy and guidance for addressing greenhouse gases under CEQA. 16 Final Draft Staff Report with Appendices

17 VI. HEALTH BENEFITS This rule contributes to the Valley s progress towards federal health-based air quality standards (National Ambient Air Quality Standards, or NAAQS). Progressing the Valley towards attainment of the NAAQS helps reduce the Valley s air pollution-related health impacts and health-related costs. The District periodically compiles attainment plans to quantify the amount of emissions reductions needed and identifies the individual control measures that will achieve these reductions. The control strategy as a whole has important public health benefits and health costs savings. However, for a number of reasons, it can be difficult or even misleading to attempt to subdivide this total plan benefit on a rule-by-rule basis. For example, photochemical reactions in the Valley s atmosphere combine precursor emissions to generate ozone and particulate matter in the atmosphere, so it is not always appropriate to attribute the health and cost benefits to just one precursor. Also, considering the extensive emissions reductions that have already been achieved in the Valley over the past several years, some emissions sources may appear relatively small and inconsequential from a health perspective. In reality, all attainment plan rule commitments are important to the District s overall strategy for reducing ambient air pollutant concentrations and the associated health impacts and costs. VII. ANALYSES A. Emission Reduction Analysis The proposed rule amendments are intended to address the limited approval from EPA concerning RACT. District staff reviewed all subjected facility s permit data and determined units are already in compliance with the proposed amendments. Therefore, no emission reductions are expected from this rule-amending project. B. Cost Effectiveness Analysis Pursuant to California Health and Safety Code (CH&SC) Section ( ) (a), the District is required to conduct a cost effectiveness analysis of proposed emission control options. A cost effectiveness analysis examines the added cost, in dollars per year, of the control technology or technique, divided by the emissions reductions achieved, in tons per year. The purpose of conducting a cost effectiveness analysis is to evaluate the costs of obtaining specific emission reductions, as it applies to operators in the San Joaquin Valley Air Basin (Valley). The analysis also serves as a guideline in developing the control requirements of a rule. 17 Final Draft Staff Report with Appendices

18 Incremental cost effectiveness is a measure of the change in costs (in $ per year) and emissions reduced (in tons reduced per year) between two progressively more effective control options or technologies. Absolute cost effectiveness of a control option is the added cost of a control technology or technique, divided by the emissions reduced (in tons reduced per year). The costs typically include capital equipment costs, engineering costs, labor, and maintenance costs. District staff found that all facilities are already complying with the proposed rule amendments and would only be potentially required to make administrative and work practice changes to maintain compliance with the proposed amendments. Therefore, no additional costs are anticipated from this rule amendment. C. Socioeconomic Analysis Pursuant to CH&SC , whenever a district intends to propose the adoption, amendment, or repeal of a rule or regulation that will significantly affect air quality or emissions limitations, that agency shall, to the extent data is available, perform an assessment of the socioeconomic impacts of the adoption, amendment, or repeal of the rule or regulation. Rule 4682 is applicable to any facility within the Valley manufacturing, processing, and storing products composed of polystyrene, polyethylene, or polypropylene. This ruleamending project would primarily be making administrative changes to the rule. EPS sources complying via Section could be impacted by increased inspection and recordkeeping practices, due to the addition of a daily VOC emissions limit. However, District staff has determined that all sources subject to Rule 4682 amendments already calculate manufacturing emissions daily to meet permit requirements. This rule-amending project is expected to have no costs associated with it; as there would be no costs associated with this rule-amending project, there will be no socioeconomic impacts. D. Environmental Impact Analysis Pursuant to of the Guidelines for Implementation of the California Environmental Quality Act (CEQA), District staff investigated the possible environmental impacts of the proposed amendments to Rule Based on the lack of evidence to the contrary, District staff has concluded that the proposed amendments to this rule will not have any significant adverse effects on the environment. Staff recommends filing a Notice of Exemption under the provisions of Public Resource Code 15061(b)(3). 18 Final Draft Staff Report with Appendices

19 E. Rule Consistency Analysis Pursuant to CH&SC , District staff prepared a rule consistency analysis that compared the elements of amendments with the corresponding elements of other District rules and federal regulations. District staff found that none of the proposed amendments would conflict with other District rules, or federal rules, regulations, or policies covering similar stationary sources. That analysis is presented in Appendix A of this Final Draft Staff Report. F. Reasonably Available Control Technology Analysis CAA 182(b)(2) states that ozone attainment plans shall assure that RACT for VOC is applied at certain sources. A RACT analysis requires an examination of a rule against Federal rules, regulations, and technology guidelines as well as comparing it against rules from other air districts in California. On July 15, 2011 EPA published in the Federal Register a RACT analysis of District Rule As documented in the Federal Register, EPA determined that Rule 4682 satisfies RACT with one exception. The purpose of this rule-amending project is to address the RACT deficiency as identified by EPA and as discussed in this Final Draft Staff Report. As such, this rule satisfies RACT requirements. 19 Final Draft Staff Report with Appendices

20 VIII. REFERENCES Bay Area Air Quality Management District [BAAQMD]. (1999, July 7). Rule 8-52, Polystyrene, Polypropylene and Polyethylene Foam Product Manufacturing Operations. Retrieved from Environmental Protection Agency [EPA]. (June 2011). Technical Support Document. EPA s Analysis of San Joaquin Valley Air Pollution Control District s Rule 4682, Polystyrene Foam, Polyethylene & Polypropylene Manufacturing. Environmental Protection Agency [EPA]. (August 1990). Control of VOC Emissions From Polystyrene Foam Manufacturing. O Connor, John. (January 1984). Averaging Times for Compliance with VOC Emissions Limits SIP Revision Policy. Revisions to the California State Implementation Plan, San Joaquin Valley Unified Air Pollution Control District, 76 Fed. Reg. 136, pp (2011, July 15). (to be codified at 40 CFR Part 52) San Joaquin Valley Unified Air Pollution Control District [District]. (2011, August 18). Rule 4566, Organic Material Composting Operations. Retrieved from San Joaquin Valley Unified Air Pollution Control District [District]. (September 2007). Final Staff Report for Rule 4682, Polystyrene Foam, Polyethylene & Polypropylene Manufacturing. San Joaquin Valley Unified Air Pollution Control District [District]. (September 2007). Rule 4682, Polystyrene Foam, Polyethylene & Polypropylene Manufacturing. Retrieved from South Coast Air Quality Management District [SCAQMD]. (2010, November 5). Rule 1175, Control of Emissions from the Manufacture of Polymeric Cellular (Foam) Products. Retrieved from 20 Final Draft Staff Report with Appendices