Private talks yield consensus on key issues in EPA wood heater regulations

In July, three men met in Canada for sensitive, private meetings to see if they could reach agreement on key sections of the proposed EPA wood heater regulations.  Two represented regional air quality agencies and one represented the wood stove and boiler industry.  They were able to compromise on many issues, but were too far apart to reach any agreement on many others.  More than a month later, after consulting with their members, they flew to Washington and presented their consensus positions to EPA Acting Assistant Administrator Janet McCabe.

The three individuals were Arthur Marin of the Northeast States for Coordinated Air Use Management

Arthur Marin, Executive Director of
NESCAUM.

(NESCAUM), Dan Johnson of Western States Air Resources Council (WESTAR) and Jack Goldman of the Hearth, Patio & Barbecue Association (HPBA).  The meeting arose from efforts by the air agencies and it was agreed that only the principals of each institution would take part in the face-to-face meetings as they were under a tight timeline and needed to keep the discussions high-level. 

The EPA was not part of these discussions nor present, and is under no obligation to adopt any of the consensus positions. However, it is expected that the agency is likely to adopt many of them.

Most of the areas of agreement were around sell-through, grandfathering, certification extension and cordwood testing timelines.  There was no mention of emission levels in the document.  The EPA posted the three-page consensus document in the official record.

Jack Goldman, CEO of HPBA

The positions reflect an effort by the three institutions to reach consensus but do not necessarily reflect the positions of all the groups' members.  Some manufacturers feel that the HPBA has not represented them aggressively enough, and the consensus positions deal with each technology very differently.  For example, the consensus position is toughest on outdoor boilers as it does not recommend any grandfathering or sell-through of unqualified boilers.  The position on exempt wood stoves is more lenient: a one-year sell-through.  Even more lenient is the position on unregulated indoor warm air furnaces, which would get a one-year extension for manufacturing and an additional sell-through year, for a total of two years.

Janet McCabe, EPA Acting Assistant
Administrator of the Office of
Air and Radiation

The other major area of agreement is that the switch to cordwood testing for certification should happen, but it is not feasible to implement immediately.  Both sides agree that the EPA should move in that direction but a clearly defined test procedure and a more robust database of cordwood testing is needed.  However, the consensus paper is silent on the drawn out ASTM cord wood fueling protocol process and instead proposes that a cordwood protocol be developed by a working group established by the EPA under the Federal Advisory Committee Act (FACA). This would be the protocol used to build the database of emissions from cordwood testing.  It is unclear if this protocol could capture start-up emissions, or how it would better represent real world emission profiles in consumers' homes.

The consensus positions made no mention of pellet stoves, hangtags or many other contentious issues.  Often, issues were not mentioned in the document because they were not included in the discussions.  For example, the issue of consumer hangtags, which industry opposed in their comments, was reportedly not raised by either side.

Another very significant consensus position is that all boilers that are certified by New York (and tested by EPA methods)  on the effective date of the rule should have their certifications extended for five years.  This may mean that manufacturers will not have to undergo the time and expense of retesting any of their existing units for a five year period and instead focus their efforts on redesigning cleaner stoves.  Virtually all the exempt and unregulated pellet stoves are already going through the certification process and many wood stoves are using the "K list" to get new five year certifications.  These new certifications and "freshening up" of existing ones would have given most stoves certifications up to four years into the new rule.

Possibly the biggest concession by the air agencies is the agreement to allow warm air furnaces to essentially remain unregulated for another year.  This would allow many small manufacturers of outdoor wood furnaces to continue making and selling their units even through they may have no capacity or intention of meeting EPA regulations.  However, the EPA has reportedly already told key stakeholders that they have no legal basis under the Clean Air Act Section 111 for Step 1 emission standards to be delayed beyond the effective date of the rule.

If the EPA adopts these recommendations, it would provide relief to most manufacturers and retailers.  However, the EPA could still set Phase 2 standards, which would take effect in 2020, as low as 1.3 grams per hour for wood and pellet stoves.  Many observers believe that the EPA is not likely to require such a low emission level and some in industry say they would be relieved if the EPA settled at 3 grams per hour.

The key positions of agreement are outlined below. These recommendations, if any are adopted by the EPA, would start on the effective date of the regulation, which will likely be in May of 2015:

1. Woodstoves:

a)    Unregulated and exempt stoves cannot be manufactured.

b)    Retail sales of all exempt and certified stoves (up to 7.5 g/hr for non-cat stoves) cam continue for one year.

c)    Certification of stoves that meet Sept 1 levels (proposed at 4.5 g/hr) will be extended for five years or until Step 2 emissions standards take effect.

2. Hydronic Heaters (indoor and outdoor):

a)    Only New York certified heaters may be manufactured.

b)   Retail sales of boilers that are not EPA Phase 2 qualified – and approved by New York – are not allowed. (New York requires a thorough regulatory review process for certification.)

c)    Models tested to EPA's voluntary program and certified by New York will be deemed certified for five years.

3. Warm Air Furnaces:

a)    Provide a 1-year extension to continue manufacturing unregulated furnaces.

b)   Retail sales may be allowed for one year beyond the effective date.

4. Cord wood:

a)    The transition to cord wood testing to certify new heaters should be implemented for Step 2 but will require a robust database and EPA approved method.

5. Oversight of Labs:

a)    Labs will provide 30 days notice of testing to states to allow for federal and state access to witness emission testing.

b)   All certification data related to emissions should be publicly available.

c)    Provide states with partial delegation of authority over some enforcement and compliance issues and prohibit them from action on other issues.

The above summary does not capture all the detail and nuance of these five areas of consensus.  Please refer to the original “Consensus Positions” for exact language that was agreed upon by HPBA, NESCAUM and WESTAR.

"We commend NESCAUM, WESTAR and HPBA for undertaking this important effort and for their willingness to all make substantial compromises," said John Ackerly, President of the Alliance for Green Heat.  "We urge the EPA to adopt these recommendations in the NSPS and to provide the enforcement to quickly close any loopholes that may emerge after implementation," Ackerly continued.

The consensus positions may give manufacturers and retailers more certainty about what they can build and distribute in the months leading up to the promulgation.  It is also possible that the EPA has provided some assurance to industry about the likelihood of some of these provisions.  The EPA may have already decided some of what was contained in the Consensus Position paper.  For example, it is reported that the EPA had decided not to use cordwood for certification testing in 2015 months before the meetings between industry and air agencies. 

It is likely that most major decisions on the NSPS have already been made or are close to final as the final draft of the NSPS will be submitted to the Office of Budget and Management in October.  Even the recommendations in the Consensus paper were late for consideration by the EPA.

This consensus paper may not make litigation less likely, but it may reduce the number of issues that are likely to be litigated.  Longer sell-through periods, for example, compared to the very short ones in the proposed NSPS, will decrease economic impacts on many small businesses, making the small business issue more difficult to litigate.  Further, this effort between air agencies and the industry trade group that had been key protagonists throughout much of the debate around the proposal suggest a more collaborative relationship can be forged among these parties to help implement a new NSPS.

NESCAUM is an association of the 8 northeastern states, including New Jersey, New York and the New England States.  On NSPS issues, Maine is not being represented by NESCAUM and is taking more pro-industry positions.  WESTAR now represents 15 states, from Alaska to New Mexico.  Those states represent an even wider range of the political spectrum than those in NESCAUM, but none have made the open break with their association that Maine has.