The MACT trap

• By Sue Johnson
• Aug 01, 1999

Recommended procedures for managing the MACT trap

Agency review procedures

With the Clean Air Act (CAA) Amendments of 1990, Congress gave the U.S. Environmental Protection Agency (EPA) a tiered 10-year schedule to issue maximum achievable control technology (MACT) standards for hazardous air pollutants (HAPs) from new and existing major sources. EPA was to promulgate these standards in two-, four-, seven- and 10-year installments for 174 source categories. Once a MACT standard becomes law, any new source in that category must obtain a pre-construction permit implementing that MACT.

But even after setting these MACT provisions, Congress was still concerned. What if industrial companies constructed or reconstructed major HAP sources without the best controls because their respective MACT standards had not yet been promulgated? So, a new Section 112(g) was added to the act. This section directed EPA to require such sources to install MACT ahead of the regulatory schedule - that is, at the time of construction. In effect, even if a planned source is not scheduled for a MACT standard until the year 2000, the owner or operator could face a much earlier compliance deadline for installing federally approved MACT. That's the MACT trap.

Compounding the challenge for industry, a source needn't even be listed in a scheduled MACT category for the owner or operator to be caught in the MACT trap. The reach of Section 112(g) may actually extend beyond 2001 for such unlisted sources, because the rule applies to any new or reconstructed major HAP source. Only delisted sources are exempt.

Section 112(g) compliance
On June 29, 1998, Section 112(g) of the CAA Amendments became law. Codified at 40 CFR Part 63, Subpart B, it requires pre-construction approvals for affected sources. If your facility is subject to this rule, you will need to complete a pre-construction permit application, including case-by-case MACT, and gain regulatory approval before any construction can begin. This permitting process could take a year or more to complete.

As of July 1998, EPA had issued MACT standards for 57 of 168 scheduled categories. That leaves 111 categories of sources potentially subject to the 112(g) rule. EPA has until November 2000 to issue all MACT standards, but will probably miss this deadline for several categories by as much as 18 months. Thus, between now and mid-2001, an affected source in one of the remaining categories could be subject to an early MACT standard.

Because the rule is self-implementing, unwary sources could be caught off-guard, especially if the state or local air pollution agency doesn't otherwise review affected construction. Some of the permitting authorities themselves are not yet well-versed in Section 112(g). Nevertheless, the burden is on industry to comply. Affected sources need to understand 112(g) requirements to be prepared for the delays associated with pre-construction permitting.

Applicability
Three categories of sources are excluded from the early MACT rule:

1. Electric utility steam generating units, unless and until EPA adds this category to the MACT source list;

2. MACT delisted source categories; and

3. Research and development activities.

For all other source categories for which a MACT standard has not yet been issued, the rule applies to three types of source construction:

1. New stationary sources on a greenfield site that have combined potential emissions of 10 tons per year of any regulated HAP, or 25 tons per year of any combination of HAPs;

2. A new process or production unit at any developed site that by itself has potential emissions of 10 tons per year of any regulated HAP, or 25 tons per year of any combination of HAPs, unless:

(a) The affected HAPs would be controlled by existing equipment;

(b) Within the last five years prior to the new construction, the equipment was approved as best available control technology (BACT), lowest achievable emission rate (LAER), toxics-best available control technology (T-BACT) or MACT under a state program, or the state determines that the equipment is equivalent to BACT, LAER, T-BACT or MACT;

(c) The total HAP control efficiency of the equipment is not decreased;

(d) The permitting agency provides public notice and opportunity for comment; and

(e) A federally applicable requirement is incorporated into the source's Title V operating permit to reflect the terms and conditions of the above determination.

3. "Reconstructed" sources, defined as replacement of components for an existing process or production unit that by itself has potential emissions of 10 tons per year of any regulated HAP, or 25 tons per year of any combination of HAPs, whenever:

(a) The fixed capital cost of the new components exceeds 50 percent of the cost of a completely new comparable process or production unit; and

(b) It is technically and economically feasible for the source to meet the relevant MACT standard.

Permit requirements
Under the Section 112(g) rule, a constructed or reconstructed source must obtain a permit-to-construct from the permitting authority. The application must include:

• Name and address of the source;
• Source description and relevant MACT category, if established;
• Expected construction start, completion and source start-up dates;
• Estimated uncontrolled and controlled HAP emissions at expected and maximum utilization;
• Any federally enforceable emission limitation applicable to the source;
• A proposed MACT emission limitation;
• Documentation of the selected control technology, if any; and
• Documentation of the case-by-case MACT evaluation.

As part of the permitting process, the owner or operator must submit an application for case-by-case MACT approval. Components of the application include an evaluation of MACT, based on a thorough review of all available information, and a proposal for a control technology or work practice that, in the applicant's opinion, represents case-by-case new source MACT.

Determining case-by-case MACT
A case-by-case MACT evaluation starts with finding the "floor" for new sources. In theory, this means finding the best-controlled existing source in a similar category. Taken to the extreme, this could mean locating all sources and determining their levels of control. The more sources there are, the longer this can take. Once one finds the floor, the search is on for additional controls, if any, that curb emissions more effectively than the best existing controls. The applicant may, however, factor both energy and environmental costs and benefits into this evaluation.

EPA suggests that states and industry groups assist in case-by-case MACT determinations. For instance, EPA's MACT process may have already begun for a source in a category scheduled for MACT determination. In that case, agency efforts might provide a useful database - of unverified accuracy - covering existing sources. If the EPA process is well underway, and is a cooperative endeavor with industry, an applicant might leverage the agency's findings to achieve a quicker case-by-case evaluation process. Conversely, applicants could find themselves searching for strategies to refute EPA's conclusions - a more likely scenario.

The proposed control technology cannot be less stringent than the best-controlled source in a similar category. And, as mentioned above, the applicant must consider technologies or practices capable of greater control, if they exist. This evaluation is analogous to the "top-down" BACT evaluation for new source review under the Prevention of Significant Deterioration (PSD) program. However, a key difference is that if EPA has adopted "presumptive" MACT or proposed MACT for the source category, the applicant must consider it.

Another difference is that the permitting authority may require more than one MACT determination if different source components fall into different MACT categories or subcategories. An example would be a facility constructing or reconstructing both an industrial boiler and some other process unit that emits HAPs.

Agency review procedures
The state or local air permitting agency is the permitting authority for Section 112(g), providing the agency has an EPA-certified program in place. Otherwise, the regional EPA office acts as an interim authority. The agency must make a case-by-case determination that new source MACT will be met, whether through entirely new or already existing technology or work practices at the source. These review procedures are analogous to those for a Title V operating permit. As a result, some states may issue case-by-case MACT approvals through their Title V permit program.

Summary
Section 112(g) is likely to take many in the regulated community by surprise. New processes that should undergo 112(g) permitting could go unnoticed since they may not be large or complex enough to trigger PSD permitting. In some states, air toxics permitting rules might serve to educate the regulated community. But, for the most part, the burden is on industry to recognize and comply with this new air quality rule. Managing the MACT trap means planning ahead by adopting a Title V alternative operating scenario to avoid double permitting, leveraging industry data for a case-by-case MACT or taking other critical steps to minimize pre-construction costs and delays.

This article originally appeared in the 08/01/1999 issue of Environmental Protection.