U.S. cement-manufacturing operations are subject to an ever-expanding body of environmental regulations and permitting requirements. As a result, compliance with the broadening scope and increasing volume of regulatory mandates is a significant challenge for facility managers. Accordingly, the following covers select environmental issues of current general interest to the cement manufacturing industry. Topics addressed include Clean Air Act (CAA) National Emission Standards for Hazardous Air Pollutants (NESHAPs) and related Title V operating permit considerations, New Source Review Reform, and miscellaneous emerging issues of potential interest to the industry.

National emission standards for hazardous air pollutants

U.S. cement plants have recently become subject to one or both of two CAA air pollution control standards: National Emission Standards for Hazardous Air Pollutants for Source Categories; Portland Cement Manufacturing Industry (codified at 40 CFR part 63, subpart LLL — hereinafter, “PC MACT”), and National Emission Standards for Hazardous Air Pollutants from Hazardous Waste Combustors (codified at 40 CFR part 63, subpart EEE — hereinafter, “HWC MACT”). The industry is currently in the process of fine-tuning PC MACT rule compliance and implementation activities and working to meet HWC MACT interim standards compliance obligations by the September 30, 2003, compliance deadline (see replacement standards discussion below). The following discussion highlights current PC and HWC MACT rule compliance, implementation, and regulatory development issues of general interest to affected facilities.

General Startup, Shutdown, and Malfunction Requirement Revisions

On April 5, 2002, EPA promulgated a final rule amending the “General Provisions,” which implement the CAA NESHAPs program including PC and HWC MACT standards. Among amendments to the General Provisions was language intended to clarify several issues related to startup, shutdown, and malfunction provisions. Presently, 40 CFR part 63, section 63.10(d)(5)(i) as amended requires that semi-annual startup, shutdown, and malfunction reports “must include the number, duration, and a brief description of each startup, shutdown, or malfunction.” The stated purpose of this revision is to provide enforcement authorities a mechanism for evaluating whether a facility's SSMP should be modified. However, the revision was to target the number of malfunction incidents, not startup and shutdown events.

The Portland Cement Association (PCA), Cement Kiln Recycling Coalition (CKRC), and other industry stakeholders initiated legal action to overturn the amended rules. Industry's challenge includes an objection on the grounds that no notice or request for comment on this matter was provided in previous rulemaking proposals, as well as the argument that additional startup, shutdown, and malfunction reporting is unnecessary and unduly burdensome.

On December 9, 2003, EPA published a Federal Register notice addressing proposed amendments to the SSM requirements under 40 CFR part 63, subpart A. The statement clarifies that only “significant” SSM events would be subject to the new recordkeeping requirements. (The proposed amendments would also require affected sources to submit copies of SSMPs to permitting authorities at the time SSMPs are adopted and again when they are subsequently revised.)

In explaining the intent of the (to be amended) recordkeeping and reporting requirements, EPA emphasized that the requirement to periodically report malfunctions does not encompass minor problems that have no impact on emissions. Furthermore, EPA stated that the extension of the recordkeeping requirement to routine startups and shutdowns is unwarranted. Only in those instances where a startup and shutdown include actions that do not conform to the SSM plan — and the standard is thereby exceeded — is the facility required to report such deviations from the plan.

Thus, facility managers should focus SSM recordkeeping and reporting efforts on significant source operations, i.e., operations with the potential to impact emissions of regulated HAP emissions. Pending finalization of the proposed amendments, however, facility managers are encouraged to work out compliance and documentation approaches (and SSMP submittal procedures) in advance with a CAA Title V permitting authority to avoid any misunderstandings.

Opacity Monitoring of Enclosed Material Handling Points

On April 5, 2002, EPA also promulgated a direct final rule with PC MACT modifications to become effective July 5, 2002, provided significant adverse comments were not received. The following two provisions were included in the direct final rule: (1) “The requirement to conduct Method 22 visible emissions (VE) monitoring under this paragraph shall not apply to any totally enclosed conveying system transfer point, regardless of the location of the transfer point. ‘Totally enclosed conveying system transfer point’ shall mean a conveying system transfer point that is enclosed on all sides, top, and bottom.” [40 CFR sec. 63.1350 (a)(4)(v)]; and, (2) “If any partially enclosed or unenclosed conveying system transfer point is located in a building, the owner or operator of the Portland cement plant shall have the option to conduct a Method 22 visible emissions monitoring test according to the requirements of paragraphs (a)(4)(i) through (iv) of this section for each such conveying system transfer point located within the building, or for the building itself, according to paragraph (a)(4)(vii) of this section.” [40 CFR sec. 63.1350 (a)(4)(vi)]

Together, these provisions are intended to significantly reduce the opacity-monitoring burden of facility managers. Because EPA received adverse comments regarding these two provisions, they were subsequently withdrawn in a July 2, 2002 Federal Register notice. However, on December 6, 2003, EPA published a final rule, which addressed the adverse comments and repromulgated the previously withdrawn amendments. Provision 40 CFR sec. 63.1350(a)(4)(vi), concerning partially enclosed or unenclosed conveying systems, was finalized without change. The provision concerning totally enclosed transfer points, 40 CFR sec. 63.1350(a)(4)(v), now stipulates that such enclosures must be operated and maintained as total enclosures on a continuing basis.

Use of an Alternative Monitoring Method

The use of alternative monitoring methods is proving to be an invaluable tool for facilities subject to the PC and HWC MACT standards. Applicable general NESHAP provisions, the PC MACT rule, and the HWC MACT rule [see 40 CFR part 63, sections 63.8(f)), 63.1350(l), and 63.1209(g)(1), respectively] provide for the authorization of alternative monitoring methods. The general procedures for requesting the use of an alternative monitoring method are described in section 63.8(f)(4)(i).

These provisions essentially allow affected facilities to “build a better mouse trap” and customize solutions to monitoring challenges on a site- or source-specific basis. Alternative monitoring methods are being implemented for everything from changing stack gas sampling locations for continuous emissions monitoring systems (CEMS) to VE monitoring of totally enclosed material transfer points (see discussion above), to the use of “broken bag” (APCD) detectors in lieu of VE monitoring of affected sources.

The following examples of potential uses of these provisions are found in 40 CFR part 63, section 63.8(f)(2):

• Use of an alternative to an otherwise required chemical management system (CMS) due to interferences caused by substances within effluent gases;
• Alternative monitoring procedures to address infrequently operated sources;
• Alternative CMS installation locations;
• Alternate methods for converting pollutant concentration measurements to units of the relevant standards; and,
• Alternatives to test methods or sampling procedures otherwise required by relevant standards.

For facility managers, a couple of limitations are worth noting with regard to alternative monitoring method requests. First, if an alternative monitoring method is to be used to demonstrate compliance with a standard during a performance test or performance evaluation, the application requesting approval of the alternative method must generally be submitted along with the site-specific performance test/evaluation plan (if required), or at least 60 days before the performance test/evaluation is scheduled to begin.

Second, reviewing agencies are generally supposed to notify applicants of approval or intention to deny requests for the use of an alternative monitoring method within 30 calendar days of the receipt of the original request and within 30 calendar days after receipt of any supplemental information that is submitted. In practice, these requests often take longer than 30 days to be approved. Facilities should plan and coordinate compliance activities accordingly.

Title V Operating Permit Compliance

The PC and HWC MACT requirements governing emissions standards are implemented and enforced under the CAA Title V operating permit program. One requirement of the latter is that facility permits must contain “emission limitations and standards, including those operational requirements and limitations that assure compliance with all applicable requirements at the time of permit issuance.” [See 40 CFR part 70, section 70.6 (a)(1).] Following is a review of some important operating permit - PC/HWC MACT compliance and permitting considerations.

Impact of Compliance Certification/Documentation on Plant Resources. Title V operating permit applications must include a certification by a responsible official verifying compliance with all applicable requirements and a statement of methods used in determining compliance. In addition, permitted sources are required to provide monitoring reports to permitting authorities at least semiannually and must certify their compliance status annually.

In practice, developing and implementing the requisite procedures and methods to maintain compliance with all of the applicable monitoring, operations, notification, recordkeeping, and reporting requirements of the PC and HWC MACT rules have proven to be very resource-intensive. Specifically, the rules' emphasis on operating and maintaining affected sources, emissions control equipment, and compliance-monitoring systems has significantly expanded the role of maintenance departments at affected facilities due to the critical part that equipment inspection, maintenance, and repair (corrective action) play in meeting the regulatory standards.

The critical importance of timely inspection, maintenance, and repair of affected equipment impacts facility management in two significant areas. First, emission control and monitoring equipment maintenance activities must be given a priority status at least equal to that for the maintenance of critical production equipment. In a high-volume, low-margin industry like cement manufacturing, this increased demand on maintenance personnel can have a significant impact on overall production costs as well as personnel hiring and retention priorities. Second, because the maintenance department has an increasingly critical role to play as part of a facility's environmental management and compliance team, personnel training practices are necessarily adjusted to reflect the new role of the maintenance department.

Incorporation of the HWC MACT Notification of Compliance. EPA expects HWC MACT facilities to incorporate a Notification of Compliance (NOC) into their Title V operating permits/permit applications. Guidance regarding the process for doing so is provided in the September 30, 1999 Federal Register notice promulgating the initial final HWC MACT standards. However, since EPA is reportedly revisiting the permit revision procedures, facilities should contact their operating permit writers to coordinate a specific operating permit strategy. For example, once EPA promulgates the replacement HWC MACT standards, facilities will be required to conduct periodic testing to verify compliance. Coordinating the five-year testing cycle with the five-year operating permit renewal cycle, if possible, would eliminate the need to obtain separate permit revisions for the NOC and operating permit renewal.

HWC MACT Replacement Standards

A final HWC MACT rule was published in two parts on June 19, 1998, and September 30, 1999, with an effective date of September 30, 2002. On July 24, 2001, the U.S. Court of Appeals for the District of Columbia granting a Sierra Club petition for review vacated challenged portions of the rule, effectively staying applicability of the rule and eliminating the substantive air emission control standards. On February 13 and 14, 2002, EPA issued interim HWC MACT emission standards in accordance with an EPA/Sierra Club settlement agreement setting forth the process by which EPA will repromulgate new final standards consistent with the Court's findings in granting the Sierra Club petition for review. According to the settlement agreement, EPA must issue final replacement HWC MACT air emission control standards by June 14, 2005. Under the interim standards, the compliance date for existing sources is now September 30, 2003. The compliance date for new sources continues to be upon start up of operations.

On July 2, 2002, EPA published a Notice of Data Availability (NODA), thereby presenting for public comment the data that the Agency plans to use in its proposal of replacement HWC MACT standards for cement kilns (plus, hazardous waste-burning incinerators, lightweight aggregate kilns, industrial and commercial/institutional boilers, process heaters, and hydrochloric acid production furnaces). In the process of developing standards pursuant to the court order that vacated the emission standards challenged by the Sierra Club, EPA is reevaluating its recent data in light of stakeholder comments on the NODA. Additionally, it is examining the technical limitations of the MACT determination options under consideration, identifying relevant factors in establishing source subcategories as well as assessing appropriate statistical data to account for operations and performance variability among sources. EPA plans to publish proposed replacement standards some time in December 2003.

New Source Review reform

EPA recently published a final rule and a proposed rule that would fundamentally change the administration and implementation of the CAA New Source Review (NSR) program. Following is a summary of the NSR program and recent reform initiatives.

NSR Program Overview

The NSR program aims to ensure that air quality does not decline in certain localities, and that air quality is not significantly degraded in other areas. A fundamental tenet of the NSR program is that modern pollution-control equipment should be installed upon construction of the source facility or when a modification is made that significantly increases emissions. NSR requires the issuance of permits for new plants and for significant modifications of existing plants before construction begins, permitting the new plant or modification only if proposed pollution-control measures reflect the best available technology.

NSR is comprised of two separate programs: Nonattainment NSR (NNSR) and Prevention of Significant Deterioration (PSD). NNSR applies in areas where the established National Ambient Air Quality Standard (NAAQS) for a regulated pollutant is not being met, i.e., “nonattainment” areas. (NNSR for sources of certain pollutants also applies in the federally designated ozone transport region, which consists of eleven northeastern states.) PSD applies to major sources located in areas where the NAAQS for a regulated pollutant is being met, i.e., “attainment” areas. Because nonattainment areas have poorer air quality, NNSR requirements are generally more stringent than PSD requirements.

In general, state and local air-pollution-control permitting authorities administer the NSR program. Each state or local authority is required to incorporate basic program requirements into its state implementation plan (SIP), which functions to ensure progress toward the attainment or maintenance of all NAAQS. A state's NSR program may be approved either by incorporation into a SIP approved by EPA or by the Agency's delegation of the program to the state. A state-designed program may be approved by EPA if it meets the criteria listed in federal regulations. Otherwise, the state may request delegation of the federal NSR program, as specified in the federal regulations.

Summary of Reform Provisions — Final Rule

On December 31, 2002, EPA published a final rule that makes four major changes to the NSR program affecting a broad range of industrial facilities, as summarized below:

Plantwide Applicability Limits

Facilities that agree to operate within plantwide emissions caps — called plantwide applicability limits (PALs) — are able to modify their operations without undergoing NSR, as long as the modifications do not cause emissions to exceed the facility PALs. Currently, NSR applies to each emissions unit within a plant. Facility PALs would be valid for a term of 10 years. At renewal, the PALs would be reevaluated to determine the need for adjustment based on air-quality needs as well as advances in technology and control cost-effectiveness, plus public comment.

Pollution Control and Prevention Projects Exclusions

Companies undertaking specified projects that result in a net overall reduction of pollution may do so by submitting a notice, rather than through the NSR permitting process. This exclusion from NSR is limited to the addition, replacement or use of any system, process, control or device whose overall net impact on emissions is beneficial. Qualifying projects cannot cause an increase in emissions violating NAAQS or PSD increments or adversely impact Class I areas. Projects involving complete replacement or reconstruction of an existing emissions source also do not qualify for this exclusion.

Clean Unit Exclusion

Facilities that qualify for a “clean unit” status determination by receiving a permit requiring installation of best available control technology or an equivalent may qualify for an exemption from additional NSR requirements for up to 10 years. Qualifying facilities/units may make additional modifications without going through NSR as long as permitted emission limits are not exceeded as a result of the intervention.

Emission Calculation Test Methodology

When evaluating the impact of projects/modifications, facilities may calculate projected emissions based on a projection of actual emissions rather than projected potential emissions. By comparing actual emissions to projected future actual emissions, projected facility emissions are likely to more accurately reflect the effect of a project. In addition, to estimate a facility's emissions before a change (i.e., baseline emissions), facilities may use any consecutive 24-month period in the previous decade as a baseline, as long as all current emission limitations are taken into account. However, this “baseline emissions” provision does not apply to power plants, projects constituting complete replacements of existing units, or the addition of new units.

Summary of Reform Provisions — Proposed Rule

On December 31, 2002, EPA published a proposed rule intended to clarify and improve the application of the NSR exemption for routine maintenance, repair and replacement (RMRR) projects. Current regulations and policy narrowly define qualifying RMRR activities. EPA proposes to revise the existing RMRR exemption contained in its regulations to clarify that two categories of activity are automatically exempted.

Annual Maintenance, Repair and Replacement Allowance

This revision would provide a facility-wide annual allowance for maintenance activities. Projects sustaining costs falling within the allowance would constitute exempt RMRR activities. The allowance would be set on an industry-specific scale reflecting the typical capital and noncapital costs incurred in maintaining, replacing, and repairing equipment to facilitate safe, reliable and efficient source operations. Affected source owners/operators may elect to use a fiscal-year period instead of a calendar year, if financial records at a facility are typically kept for a period other than the calendar year. The proposal contemplates a one-year allowance, but EPA is seeking comment on whether a stationary source should have the option of a multi-year allowance, such as over 5 years.

Equipment Replacement Allowance

This revision would generally provide that projects involving the replacement of existing equipment with functionally equivalent new equipment would qualify as RMRR. Qualifying activities would be identified by comparing the cost of the components being replaced with the cost of replacing relevant production units at the plant. Under this approach, EPA would establish a percentage of the replacement value of a process unit as a threshold for applying the equipment replacement provision. If the replacement component is functionally equivalent to the replaced component, presents no change to the basic design parameters of the process unit, and does not exceed the cost threshold, the replacement activity would qualify as RMRR. Projects that fail to qualify under either of these allowances could still be evaluated and qualify as RMRR activities on a case-by-case basis.

Final Rule Reforms Status

Prior to publication in the Federal Register, the final and proposed NSR reform rules drew extensive criticism and support from a wide variety of stakeholders. Now that the final and proposed reforms have been published, the din has only increased. Fourteen states (mostly in the Northeast) and Washington, D.C., have filed challenges to the final rule. The Attorneys General for the represented states allege the NSR changes will allow facilities to emit more air pollution in contravention of CAA requirements, thereby threatening the health of residents of those states. In addition, several environmental groups are currently litigating or are expected to attempt to block the reforms. Some state and local air-pollution-control agencies are also on record opposing certain elements of the final and proposed reforms, asserting that states that are prevented from adopting regulations stricter than those of EPA will be forced to adopt the reforms whether or not they support them in their entirety. According to a report released by the State and Territorial Air Pollution Program Administrators and the Association of Local Air Pollution Control Officials (STAPPA/ALAPCO), 26 states are precluded to some extent by state law from adopting NSR provisions more stringent than the federal program.

On March 6, 2003 a federal appeals court denied the request of 10 Northeastern states to block the NSR reforms and grant an emergency stay of the March 3 implementation/effective date.

Now that the reforms are effective at the federal level, state and local air-pollution-control agencies will need to adjust their regulations and SIPs to reflect the NSR reforms. While most states will have three years to adopt regulations to implement the NSR reforms, 13 states operate directly under EPA rules. These states are charged with immediate implementation of the revised NSR program. Given the level of interest (read, “potential for additional legal action”) and concern regarding NSR reform, it remains to be seen how soon and to what extent affected sources may actually benefit from any of the reforms set forth in the December 31, 2002 final rule.

CKD management standards update

On May 11, 2001, the American Portland Cement Alliance (now the Portland Cement Association or PCA) submitted a rulemaking petition to the EPA Administrator urging EPA to (a) reverse the February 5, 1995 regulatory determination, which stipulated that CKD should be subject to a “conditional exclusion” regulatory regime under which RCRA hazardous waste regulations could be triggered in the event certain CKD management standards were violated, and (b) to withdraw the August 20, 1999, proposed CKD management standards developed to implement the 1995 regulatory determination. In summary, the basis for the PCA rulemaking petition comprised two primary themes:

• Risks to human health and the environment from CKD are exceedingly low, especially when compared to other Bevill-exempted wastes EPA has addressed in regulatory determinations before and since the 1995 CKD determination; and,
• The continually diminishing volumes of CKD land in the U.S. can be (and are being) managed in an environmentally responsible manner under state environmental laws, regulations and permitting requirements.

Supporting PCA's arguments for reversing the determination and withdrawing the proposed CKD management standards, the petition included data regarding CKD toxicity as well as information demonstrating that a decrease in waste CKD volumes, an increase in groundwater monitoring, improved CKD management practices, better fugitive dust controls and improvements in state programs negate the need for federal CKD waste management regulations.

On July 25, 2002, EPA published in the Federal Register a NODA and request for comment on “Additional Data Availability on Wastes Studied in the Report to Congress on Cement Kiln Dust.” The notice also announced the availability for public inspection and comment of the information on CKD management submitted by PCA in its rulemaking petition.

Furthermore, the NODA announced that EPA is considering an approach “whereby it would finalize the issuance of protective CKD management standards as described in the August 20, 1999 proposal … [and] temporarily suspend its active consideration of the proposed listing of mismanaged CKD as a hazardous waste, and assess how CKD management practices and state regulatory programs evolve over the next three to five years.” Subsequent to the assessment, EPA would either formally withdraw or promulgate the portion of the August 1999 proposal that classifies mismanaged CKD as a hazardous waste.

On September 23, 2002, PCA submitted comments in response to the July 25 NODA, taking issue with EPA's characterization of some of the information PCA submitted as part of its rulemaking petition and EPA's contemplated direction for the federal regulation of CKD. In summary, PCA's comments reiterated the arguments and position set forth in the May 11, 2001 rulemaking petition while objecting to the potential prolongation of CKD's indeterminate federal regulatory status and urging EPA to implement the recommendations contained in the May 11 petition.

As of this writing, EPA's final direction with regard to the scope, application, and timing of federal CKD management standards is not yet known. Facility managers are encouraged to continue managing CKD in accordance with appropriate practices (e.g., the standards suggested by the cement manufacturing industry during the rulemaking process resulting in EPA's proposed standards, the 1999 proposed standards themselves, and/or existing state-specific CKD or solid waste management/disposal requirements). Moreover, in the near term, facility managers would be well advised to contact relevant state solid waste management authorities to determine what CKD management requirements are likely to be required in the event EPA does formally reverse the 1995 CKD Bevill determination and/or withdraw the 1999 proposed standards.

What's next?

One of the most significant issues on the environmental front is the international call for a reduction in greenhouse gas emissions. Cement manufacturing involves the combustion of large amounts of fossil fuels (both directly and in terms of electricity use) and the production of carbon dioxide when raw materials are heated to produce clinker. Therefore, the U.S. cement manufacturing industry is greatly interested in domestic and international policies directed at the reduction of the emission of greenhouse gases, particularly carbon dioxide emissions. Even though global warming is not universally accepted as an imminent environmental threat, there is a general international consensus that the potential risks associated with climate change are serious enough to warrant actions intended to reduce or at least stabilize greenhouse gas emissions, such as carbon dioxide.

Consequently, the U.S. cement manufacturing industry is undertaking a variety of voluntary steps to reduce carbon dioxide emissions, including improvements in energy efficiency and the use of alternative fuels and raw materials. Some U.S. cement manufacturers have formalized their carbon dioxide reduction efforts by participating in programs such as the EPA Climate Leaders initiative. Under the Climate Leaders program, companies commit to developing a corporate-wide greenhouse gas (CHG) emissions inventory, agree to work with EPA to set corporate-wide GHG emission reduction goals, and institute a program for reporting progress on an annual basis. For instance, a company might commit to reducing carbon dioxide emissions by a given percentage on a per-ton-of-product-manufactured basis, over the next 10 years. Various U.S. cement manufacturers have adopted, or are in the process of adopting, similar emissions reduction goals.

Conclusion

Manufacturing cement in the U.S. is a highly regulated business and an increasingly sophisticated technological enterprise. Facility managers can be certain that continuous improvement, in terms of both operating efficiency and environmental impact, will be the watchword of the industry. In the near term and foreseeable future, the most successful companies will employ organizational principles incorporating systematic approaches for anticipating, shaping, and implementing changes related to environmental management and regulatory compliance.

Scott Ellis is Senior Environmental Consultant at Schreiber, Yonley & Associates, (+1) 636-349-8399, scotte@syaeng.com