Excerpts of EPA's Final Rule on the 2020 wood heater regulations

On March 11 2020, the EPA finalized wood heater regulations, ruling that no "sell-through" period was warranted based on data supplied by industry.  
EPA rulings can be long and technical so we excerpted the key points in the EPA's final ruling on changes to the New Source Performance Standards for wood heaters.  While you may know that the EPA did not agree to a sell-through period for Step 1 heaters, you may not know that the EPA ruled that pellet manufacturers can use old pallets as fiber, or exactly why the EPA kept to its original timeline.  After the initial summary, the first half is about changes in pellet composition and the second half is about why they are not changing the timeline for appliance sales.  The other important document for those who are interested in more details is the EPA's Response to Comments from stakeholders and the public.  The document shows the EPA's findings and analysis on scores of contested issues from all sides. (May 5, 2020 update: due to the Coronavirus pandemic, EPA is trying to reverse course and allow a limited sell-through on a tight timeline.)

Key Excerpts of 

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60, RIN 2060-AU00 

Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces

AGENCY: Environmental Protection Agency (EPA). 

ACTION: Final rule. 

SUMMARY: In this final action, the U.S. Environmental Protection Agency (EPA) is amending the 2015 New Source Performance Standards (NSPS) for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces. This final action removes certain requirements from the rule for pellet fuel to meet certain specifications regarding density, size, and content, while retaining a provision in the rule that requires EPA-approved third-party organizations to specify minimum requirements as part of the pellet fuel certification process. Also, in this final action, the EPA is deciding not to make changes that it had proposed that would have allowed a sell-through period for Step 1-certified residential wood heating devices that are manufactured before the May 2020 compliance date to be sold at retail after that date. Finally, this preamble provides a 

FOR FURTHER INFORMATION CONTACT: For questions about this final action, contact Rochelle Boyd, Sector Policies and Programs Division, telephone number: (919) 541-1390; and email address: boyd.rochelle@epa.gov. For information about the applicability of the NSPS to a particular entity, contact Rafael Sanchez, Office of Enforcement and Compliance Assurance, telephone number: (202) 564-7028; and email address: sanchez.rafael@epa.gov.

II. Background 

On February 3, 2014, the EPA proposed revisions to the NSPS and promulgated revisions on March 16, 2015. The final 2015 RWH NSPS updated the 1988 RWH NSPS emission limits, eliminated exemptions over a broad suite of wood heating devices, and updated test methods and the certification process. The market share for each of the categories considered in this final rule are as follows: wood and pellet stoves were 96 percent, hydronic heaters were less than 1 percent and forced air furnaces were 3 percent of the total.

The EPA took a two-step compliance approach, in which certain Step 1 standards became effective in May 2015 and more stringent Step 2 standards would become effective 5 years later, in May 2020. 

As the May 15, 2020, Step 2 compliance date approached, representatives from the manufacturing and retail industry expressed concern that a substantial number of retailers have either limited or stopped their purchases of Step 1-certified wood heating devices from the manufacturers due to concerns they may not be able to sell these devices before the May 2020 Step 2 compliance date and would, therefore, be left with unsalable inventory. Manufacturers also expressed concern that these reductions in sales would result in reduced earnings needed to develop Step 2-compliant model lines. 

On November 30, 2018, the EPA proposed a "sell-through" provision to give retailers additional time after the May 2020 effective date of the Step 2 standard to sell Step 1-compliant hydronic heaters and forced-air furnaces remaining in their inventory. The EPA also took comment on whether to amend subpart AAA for wood heaters and pellet fuel heaters to provide a similar sell-through period. In addition, the EPA took comment on whether the minimum pellet fuel requirements in the 2015 RWH NSPS should be retained or revised.

III. Public Comments 

Public comments on the 2018 proposed rule and the EPA’s responses to these comments are addressed in a separate Response to Comment document, available in the docket for this action at Docket ID No. EPA-HQ-OAR-2018-0195.

IV. What is included in the final rule?

A. Pellet Fuel Minimum Requirements 

The pellet fuel requirements, in addition to ensuring consistency with certification testing, were intended to safeguard against emissions hazardous to human health and the environment when the pellets are burned in pellet fuel heaters operated in the home by consumers. 

Since publication of the 2015 RWH NSPS, interested parties have raised issues concerning the pellet fuel requirements. First, these parties have questioned the EPA’s authority to promulgate the pellet fuel requirements. The EPA has considered these comments and concluded that the Agency has the authority to set pellet fuel requirements for the reasons discussed in the RTC. 

Second, interested parties have questioned the need for the pellet fuel requirements and commented that the specific minimum fuel requirements will inhibit innovations that may improve pellet fuel heater operation and decrease emissions. 

After reviewing public comments on these issues, the EPA [will] delete the following seven pellet fuel minimum requirements:

1. density: consistent hardness and energy content with a minimum density of 38 pounds/cubic foot;

2. dimensions: maximum length of 1.5 inches and diameter between 0.230 and 0.285 inches;
3. inorganic fines: less than or equal to 1 percent;
4. chlorides: less than or equal to 300 parts per million by weight; 5. ash content: no more than 2 percent;
6. contains no demolition or construction waste; and
7. trace metals: less than 100 milligrams per kilogram. 

The EPA is retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that stated pellet fuel must not contain any of the prohibited fuels:

1.     residential or commercial garbage;
2. lawn clippings or yard waste;
3. materials containing rubber, including tires;
4. materials containing plastic;
5. waste petroleum products, paints or paint thinners, or asphalt products;
6. materials containing asbestos;
7. construction or demolition debris;
8. paper products, cardboard, plywood, or particleboard.
9. railroad ties, pressure-treated wood or pallets (40 CFR 60.532(f)(9)) and railroad ties or pressure-treated lumber (40 CFR 60.5474(f)(9));
10. manure or animal remains;
11. salt water driftwood or other previously salt water saturated materials;
12. unseasoned wood;
13. any materials that are not included in the warranty and owner’s manual for the subject wood heater; or
14. any materials that were not included in the certification tests for the subject wood heater.

Retaining this provision assures that these specified materials will be not be used as a source of fuel and prevents the burning of trash, plastics, yard waste, and other unsuitable materials. For most of the items on the prohibited fuels list, it is widely-recognized and widely-accepted that the burning of such material increases emissions regardless of the type of wood heating device. 

Interested persons have asked questions about how the prohibitions against “unseasoned wood” applies to pellet fuel. The EPA is clarifying that the determination of moisture content is made at the end of the manufacturing process, and the prohibition on unseasoned wood does not prohibit the use of unseasoned wood earlier in the pellet fuel manufacturing process

3. Clarification Concerning the Burning of Pallets and the Use of Pallets in Manufacturing Pellet Fuel

Interested parties have asked the EPA to clarify the scope of the prohibition on “pallets.” The prohibition on “pallets” bans only the use of pressure- treated pallets, because “pallets” is part of the phrase “pressure-treated wood or pallets” and the term “pressure-treated” is intended to apply both to “wood” and to “pallets.” 

B. Decision Regarding Promulgating New Sell-Through Provisions 

To justify a sell-through, the Agency first requires sufficient data from manufacturers and retailers demonstrating why a sell-through is needed. Insufficient data were provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that in every residential wood heating device category, there are model lines certified to meet the Step 2 standards that are already available, and have been available for considerable time, which supports the conclusion that the Step 2 standards were achievable. For example, the record shows that, as of March 2018 (over 2 years before the May 2020 Step 2 deadline), there were Step 2-certified model lines available for each category of wood heating device (83 FR 61578). 

By contrast, manufacturers did not provide the Agency with information showing that any manufacturers have tried but failed to develop Step 2 model lines. Thus, there is no support in the record showing that manufacturers could not develop Step 2 models in time to: (1) have Step 2 models for sale as retailers reduced or discontinued their purchase of Step 1 models; and (2) allow for manufacturers and retailers to replace their inventories of Step 1 models with Step 2 models in advance of the May 2020 deadline. In short, the record shows that some manufacturers have tried and succeeded in developing Step 2 model lines but contains no adequately supported examples of manufacturers that have tried and failed to develop Step 2 model lines. 

Finally, it is important to note that manufacturers have had since May 2015 to develop Step 2-compliant wood heating devices, and that retailers have had since May 2015 to manage their inventory of Step 1-compliant wood heating devices and replace them with Step 2- compliant wood heating devices ahead of the May 2020 deadline. The record shows that Step 2- compliant model lines have been available to retailers for a considerable amount of time. For example, there were wood heater, pellet fuel heater, hydronic heater, and forced-air furnace models that were Step 2-certified starting in 20179 and, as of March 20, 2018, more than 2 years before the May 2020 compliance deadline, there were 78 wood heater model lines (44 pellet fuel heaters and 34 wood heaters), nine hydronic heater model lines and one forced-air furnace model line certified to Step 2 (83 FR 61578). Further, some model lines have emissions significantly below the Step 2 standard, showing not only that it is possible to achieve the Step 2 standard but also that manufacturers can develop models well below the Step 2 standard.10 Based on this record, the Agency has insufficient grounds to conclude that a sell-through period is needed and to change the established NSPS and allow a sell-through. 

Regarding the data necessary to justify a sell-through, the EPA solicited this information in the notice of proposed rulemaking (NPRM) by posing multiple questions to stakeholders while requesting comment on the proposed 2-year sell-through, including, but not limited to, the following queries: 

• whether retailers are currently declining to purchase Step 1-compliant wood heating devices and how widespread is this reduction in purchases; 
• the cost or other impacts that retailers could have on manufacturers if they decline to purchase Step 1-compliant wood heating devices; 
• the typical period of time between when a retailer purchases a wood heating device and when the device is sold to the consumer; 
• what period of time would be sufficient for retailers to sell their inventory of Step 1- compliant heaters; 
• the number of Step 1-compliant wood heating devices that are currently in production and the number that are being designed for Step 2 compliance that have not yet been EPA-certified; 

• the number of Step 2 wood heating devices that are currently Step 2-certified; and 
• how far in advance of the current May 2020 Step 2 compliance date manufacturers will need to submit their EPA certification applications to meet the standard as well as manufacture, market, and distribute their products without disruption to their business. 

While manufacturers and retailers made qualitative statements asserting economic harm from stranded inventory if a retail sell-through was not allowed, these statements were not supported by contextual data. In fact, commenters did not submit sufficient data to the Agency in response to the NPRM’s solicitations, and in particular, provided insufficient data showing a percentage decrease in sales approaching 2020 relative to previous years and/or the percentage of Step 1 inventory that would be stranded without a sell-through since the promulgation of the 2015 RWH NSPS. 

V. Summary of Cost, Environmental, and Economic Impacts 

The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, or indigenous peoples. Because this final action does not have air quality impacts relative to the 2015 RWH NSPS, it will not alter the EPA’s prior findings that, on a nationwide basis, cancer risks due to residential wood smoke emissions among disadvantaged population groups generally are lower than the risks for the general population due to residential wood smoke emissions.

Andrew R. Wheeler, 

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Administrator