Air Guide 20 Economic and Technical Analysis for Reasonably Available Control Technology
As a measure to attain the ambient air quality standard for ozone, the US Environmental Protection Agency prepared and published a series of control technique guideline (CTG) documents which defined reasonably available control technologies (RACT) for various categories of stationary volatile organic compounds (VOC) emitting sources. The state air pollution control regulations which specifically regulate VOC emissions are generically referred to as the "RACT regulations".
Six of the RACT regulations and one of the general process source regulations include a provision for granting a variance from the regulatory requirements that would otherwise apply. These variance provisions are found in the following Parts:
Part 212 - General Process Emission Sources, Section 212.10
Part 226 - Solvent Metal Cleaning Processes, Section 226.5
Part 228 - Surface Coating Processes, Subdivision 228.3(e)
Part 229 - Petroleum and Volatile Organic Liquid Storage and transfer, Subdivision 229.3(g)
Part 230 - Gasoline Dispensing Sites and Transport Vehicles, section 230.8
Part 233 - Pharmaceutical and Cosmetic Manufacturing Processes, subdivision 233.3(h)
Part 234 - Graphic Arts, Subdivision 234.3(f)
Each of these variance provisions are essentially identical in content. With minor variations, each states:
"The commissioner may allow processes subject to this Part to operate with a lesser degree of control than what is required per this section (subdivision) provided that a process specific reasonably available control technology (RACT) demonstration has been made to the satisfaction of the commissioner. Process specific RACT demonstrations must be submitted with the application for a Permit to construct, a certificate, or renewal of a certificate to operate for an existing source under the provisions of Part 201 of this Subchapter. Such process specific RACT demonstrations must be submitted to the United States Environmental Protection Agency as a revision to the State Implementation Plan and must address the technical and economic feasibility of:
- utilizing demonstrated and proven emission control technologies which would achieve the degree of control required in this subdivision (paragraph);
- utilizing demonstrated and proven emission control technologies which would achieve a lesser degree of control than required in this subdivision (paragraph);
- utilizing demonstrated and proven production modification Methods which would result in real, documented, and enforceable reductions in the volatile organic compound emissions from the process."
Part 226 contains one additional prerequisite for a RACT variance. Section 226.5 states that the Commissioner may accept a lesser degree of control than is otherwise mandated if, in addition to demonstrating that RACT has been applied, the source owner has a "plan to develop the technologies necessary to comply with" the requirements of Part 226. Therefore, an applicant for a variance for a degreaser must prepare a strategy for complying with the regulation through means that may not be available at the time the variance is requested.
As part of the Department's strategy to attain the ambient Standard for ozone, major sources of oxides of nitrogen (NOx) must now install RACT to control NOx emissions. To be major, a facility in either the New York City metropolitan Area or the Lower Orange County Metropolitan Area must have the annual potential to emit 25 tons or more of nitrogen oxides. A facility outside of these areas with an annual potential To emit 100 tons or more of NOx is a major source. The following regulations require RACT for major sources of NOx:
Part 212 - General Process Emission Sources, Section 212.10
Part 214 - Byproduct Coke Oven Batteries, Section 214.9
Part 216 - Iron and/or Steel Processes, Section 216.5
Part 220 - Portland Cement Plants, Section 220.6
Subpart 227-2 Stationary Combustion Installations
With the exception of Subpart 227-2, the NOx RACT regulations do not specify the level of control necessary to comply with RACT requirements, nor are there specific emission limits for NOx specified in these regulations. A facility required to implement NOx RACT must evaluate control strategies based on their economic and technical feasibility. A RACT Compliance standard will be established for each individual source, based on the control options that are "reasonably available" for that source.
Demonstration of RACT
The meaning of "Reasonably Available Control Technology" (RACT) must not be overlooked. RACT is defined in part 200 as follows: "Lowest emission limit that a particular source is capable of meeting by application of control technology that is reasonably available, considering technological and Economic feasibility."
Before a variance from the requirements of Part 212, 226, 228, 229, 230, 233, or 234 can be granted, the source owner must show that the requirements in the respective regulation are not reasonably available for the specific source or sources in question. Similarly, a source owner subject to the NOx RACT regulations must determine what is "reasonably available" for that source, or if there are no control options. This is not meant to be construed to mean that the only options for a source are either full compliance with applicable RACT or no compliance at all. The RACT definition compels the lowest reasonable emission limit, and this may often be a limit which constitutes partial compliance with the respective standard. A RACT determination should not be made on an "all or Nothing" basis. The complexity of a demonstration that full Compliance with RACT is not feasible will vary depending on the source.
As a part of any RACT determination, several control options must be investigated, with some form of control mechanism or equipment modification mandated by the economic analysis. Those options must include an economic analysis for the control strategy or equipment modification required in the appropriate regulation as well as two strategies calling for lesser degrees of control which the company can feasibly afford. It must be stressed that some form of available control or equipment modification will be required for RACT sources subject to the above named regulations and the level of that control will be determined as a result of the economic information supplied by the company. The Department has established the following costs to define the upper economic limit of RACT:
VOC (Upstate): $3,000/ton reduced
VOC (NYCMA or LOCMA): $5,000/ton reduced
NOx (Statewide): $3,000/ton reduced
A facility will not be required to implement any emission reduction or control technique that is more costly than these limits, based on the cost calculated using Table 1. If there are no control options for a source which can be installed at or below these costs, then the source, although uncontrolled, will be in compliance with RACT.
Nonattainment to Attainment Redesignation
The redesignation of an area from nonattainment to attainment (with respect to the National Ambient Air Quality Standard for ozone) has no effect on any RACT variances which may have been granted to sources in such an area. Once a source becomes subject to a RACT regulation, it will remain subject unless the regulation is subsequently repealed or amended to specifically alter this position. Thus, the same regulatory requirements apply to a source After as well as before a redesignation occurs, and variances from these requirements remain valid and are unaffected by the redesignation.
Demonstration of Need
A source owner wishing to apply for a variance must provide a demonstration that compliance with the applicable regulation is not reasonable for reasons of technological or economic feasibility. The scope of such a demonstration can vary depending on the source in question. However, an unsubstantiated and unsupported statement that compliance methods are not available or that they are too costly does not constitute a demonstration of unfeasibility.
Individual affordability and the apparent wealth or poverty of the owner or operator of a facility are not relevant to the Determination of an economic variance. Some degree of control that has been approved by the Department must be installed if the variance is granted, regardless of the financial state of the facility. This is because the Clean Air Act requires that RACT must be installed on all sources in a source category subject to the RACT requirements. The variance provision exists to allow source owners to demonstrate that what has been defined as RACT is not appropriate for this facility because it would be more expensive than RACT. The variance mechanism is not intended to be used to claim financial hardship.
Eligibility for Variance Based on Economics
The following mechanism will be used to determine the merit of an economic variance request. Please note that an economic variance request is technically a permit application or modification and it is subject to the requirements of Part 621 "Uniform Procedures act." The source owner must submit a permit application(s) which reflects the proposed control strategy. Permit applications must be submitted for all sources included in the variance request and associated RACT demonstration. The appropriate fees must be assessed and the time frames for permit review should be met. An approved variance will be in effect for up to 5 years, as long as the permits for the sources included in the variance are valid.
- The following information must be submitted by the source owner, along with the permit application(s) and RACT variance request, in order to verify that RACT controls have been implemented:
- A price quote from at least three control equipment or process equipment vendors. Please note that the lowest cost should be used in the annualized cost per ton review. The use of a recirculating system, if control equipment is the proposed option, must be one option. When evaluating control equipment, the source owner should Evaluate the smallest system possible, considering both the minimization of air flow rates and equipment size; and
- Studies on the usage of the new coating/inks, if this is the Chosen control strategy for sources subject to Parts 228 and/or 234, performed in a manner acceptable to the commissioner, and a report outlining the results of these studies should be submitted. The reformulation study must include cost estimates from at least 3 suppliers who have not sold coating materials or inks to the source owner during the preceding six months.
- A completed economic analysis for air emissions control Equipment (Table I) must be submitted with each alternative RACT application.
- The Department's regional office will take lead on the waiver review and will issue or deny the variance. The information submitted will be reviewed using the cost per ton method (Table I). Please note that a source that proves economic unfeasibility utilizing this method will be required to Submit at least two additional strategies which will control the source at a level which may be less than the RACT described in the applicable regulation, but which does not constitute a "no control" option. The cost per ton method requires the source owner to supply the following information:
- 10 year annualized costs for these items:
- Equipment costs
- Operation and maintenance - these costs should be verified by the control equipment supplier and/or manufacturer
- Money costs (i.e., interest)
A ten year period is used for the purpose of this section because it is assumed that this will be the life of the control Equipment. While the equipment may actually be used for a longer period, it is not necessary to adjust the calculation of the annualized cost. If there are circumstances where other terms are Appropriate, this must be justified in order to be acceptable.
- Total annual VOC emissions - these emissions must be verified by purchase and/or production records
- Emissions controlled in tons per year - based on the actual Hours of operation per year
- Cost per ton calculated as follows:
Total annualized costs/Emissions controlled = $/ton
The attached table (Table I) should be used to develop the cost per ton value described in the above section. The cost per ton for the control of VOC must be greater than $5000 in the NYCMA or LOCMA or $3000 in the rest of the state (1994 dollars) for the control strategy or equipment modification to be considered to be economically infeasible. The cost per ton Must be greater than $3000 statewide (1994 dollars) for NOx controls to be economically infeasible.
- 10 year annualized costs for these items:
- The criteria for evaluating variance requests for Part 228 sources installing control equipment, but which are unable to achieve the required overall removal efficiency per Section 228.3(c), shall be based on the following:
- A demonstration that the coating solution is at the maximum solids content that will allow the facility to meet production specification, and
- A demonstration that the design of the capture system and the subsequent removal/destruction of VOC results in the maximum overall removal efficiency utilizing a cost per ton value of $5000 in the NYCMA and LOCMA or $3000 upstate (1994 dollars), as per attached Table I.
- Special conditions for this type of facility will be determined on a case by case basis, but should contain the minimum special Conditions listed in Table II.
- When calculating the cost per ton value, if exempt solvents (i.e., 1,1,1 trichloroethane, methylene chloride or acetone) are to be removed/destroyed by the control device, these emissions may be excluded in the cost per ton calculation.
- The Bureaus of Enforcement and Regional Support (BERS) and application Review and Permitting (BARP) are available to assist a region in reviewing and assessing the review of the RACT variance request. The Bureau of Application Review and Permitting can assist in reviewing NOx RACT variance requests for stationary combustion installation while the Bureau of Enforcement and regional Support can assist on all other reviews.
- If a favorable determination is made that an economic or technical variance is appropriate, all the terms and conditions of the variance will be included in the Special Conditions on the permit to Construct and Certificate to Operate. Each economic or technical variance must be processed through the USEPA as a source specific State Implementation Plan (SIP) revision. To facilitate the processing of the source specific SIP, the Region must submit a copy of the alternative RACT application, the feasibility demonstration and the proposed Permit to the Bureau of Technical Services 3 weeks prior to publication in the Environmental Notice Bulletin. The Bureau of Technical Services is responsible for transmitting the RACT variances as a source specific SIP revision to the USEPA and tracking the progression through the federal Review process.
- The Regions are responsible for publishing the proposed alternative RACT in the Environmental Notice Bulletin, receipt of public comments, review of comments and preparation of the Department's response to the comments. Upon completion of the public comments, the Region prepares and issues the final RACT variance to the applicant and provides the Bureau of Technical Services with a copy of:
- Final RACT variance;
- Environmental Notice Bulletin;
- Summary of public comments and Department's response to comments;
- Alternative RACT application and feasibility demonstration, if Not submitted previously; and,
- Completed summary table (see attached Flow Diagram)
- The attached flow diagram identifies the steps for processing a source specific State Implementation Plan revision. After approval by the Department and awaiting USEPA's review and approval of the State Implementation Plan revision, the facility will be Considered to be operating in compliance.
The regional office is responsible for tracking compliance with the special conditions of the permit to insure continued compliance. DEC reserves the right to modify and/or withdraw the economic variance per Section 621.14(a)(4).
APPROVED: Arthur F. Fossa
Economic Analysis - Air Emissions Control Equipment
Facility Name and Address: ______________________________________
Facility ID and Emission Point Control Type: __________________________
1. Cost of Emissions Control Equipment Including Installation $_______(1)
2. Calculate Capital Recovery Factor (*)Recovery Factor ________(2)
3. Calculate Annual Equipment Cost (Multiply Item 1 by Item 2) $_______(3)
4. Annual Operating Costs
A. Electricity(**) $_______(4A)
B. Natural Gas(**) $_______(4B)
C. Catalyst Replacement $_______(4C)
D. Carbon Replacement $_______(4D)
E. Maintenance ;$_______(4E)
5. Total Annual Costs [Add Items 3 and 4 (A to E)] $_______(5)
6. Calculate Annual VOC or NOx Tonnage Reduction
A. VOC or NOx Actual Annual Emissions ________(6A)
B. Percent Capture and Control (or Percent Reduction) achieved ________(6B)
C. Tons Reduced (Multiply Item 6A by Item 6B) ________(6C)
Total Cost of Controls Per Ton Reduced (Divide Item 5 by Item 6C) $_______
*CRF = Capital Recovery Factor
= I(1+I)n / (1+I)n-1
Where I = Annual Interest Rate and n = Equipment or Replacement Parts Life, In Years (n=10)
= I(1+I)n Where I = Annual Interest Rate
(1+I)n-1 n = Equipment or Replacement Parts Life, In Years (n=10)
**Energy costs should be the added costs of operating the Control equipment minus any costs that will no longer continue to incur as a result of the equipment installation and operation, not the total energy costs of running the process to be controlled.
Minimum Special Conditions
- The following alternate emissions limit(s) has been established for this process(es): (Note: Limits should be specified utilizing enforceable units, such as pounds of VOC per gallon of coating (minus water), % overall removal efficiency, etc. If multiple processes or coatings are utilized, they should be listed along with the specific alternate emission limit. Each military specification or specialty coating should be listed.)
- The source owner must maintain records which verify the VOC Emission rate and upon request, these records must be submitted to this Department in a format acceptable to the Commissioner's representative.
- The source owner must continue to investigate compliance strategies and submit quarterly reports documenting the evaluation of either reformulation, abatement technology or process modification. The written report must include the results and specific dates of the testing or evaluation. The name(s) of vendors which can independently verify the testing or engineering evaluation must also be supplied to the Commissioner's representative as per 621.14(a)(4).
- The Department reserves the right to require the source owner to evaluate and implement innovative technology within a time frame established by the Commissioner's representative as per 621.14(a)(4).
- DEC inspectors should have access to the facility for inspection of sources subject to this variance during normal business hours.
- The total annual VOC emission (fugitive and collected) from this process are limited to __________ tons.
- Any increase in the VOC emissions from those specified in condition #6 shall be grounds for the Department to revoke this variance.