EPA watchdog issues second stinging report on the EPA’s wood heater program

The EPA’s Office of Inspector General found continued lack of enforcement of the EPA wood heater regulations, more than a year after its first major investigative report found similar issues. Unlike that in-depth report, this new report cites very specific details of instances where manufacturers and labs have violated EPA regulations.  It found that even when the EPA knew of significant violations, it did not take action to correct the problem.  

The wood heater manufacturing and test lab industry is a collegial community where members rarely publicly criticize other members, even when major violations of the EPA regulations are widely known. However, manufacturers often relay private complaints about their competitors to the EPA, putting the EPA on notice of a wealth of compliance issues.

“We call on EPA leadership to provide more resources toward the wood stove program and address systemic enforcement issues,” said John Ackerly, President of the Alliance for Green Heat. “Its also vital for the public to know that pellet stoves are not involved in much of this controversy and that many wood stove manufacturers make good products, follow the law and are being undercut by those who knowingly skirt regulations,” Mr. Ackerly said.

Over the last 15 years, the only entity that has consistently published specific instances of non-compliance is the Alliance for Green Heat (AGH) in its monthly newsletter, and on its website.  Like the EPA, AGH is often contacted by industry members who are troubled by the conduct of other members.  The OIG listed five instances of abuse that the EPA overlooked and failed to take sufficient action, but there are scores more.  For instance, the internet continues to be rife with the sale of uncertified wood heaters, including outdoor wood boilers, which the EPA has known about for years, and appears not to have done anything.

  

US Stove sold 4,321 stoves before they were certified

This week’s report from the OIG follows up on several high-profile cases that AGH has pressed the EPA to address, including widespread fraud at US Stove Company which the EPA has been silent on for 5 years. In that case, an employee of US Stove was outraged and blew the whistle on his company.  US Stove then sued the whistleblower, getting a Temporary Restraining Order (TRO) against him to shut him up, which the local Tennessee court said was “in the public interest.” 

 This week’s OIG report described how US Stove manufactured and sold 4,321 stoves before they were certified, and d859 of them were sold even before the test lab started testing the unit. Though the EPA had all of these details, it did lead to further action.

The stove in question was never officially recalled by the Consumer Product Safety Commission.  A list of wood and pellet stove recalls can be found here.

A second whistleblower came forward, providing extensive details of fraud to the EPA, imploring them to take action.  That person wrote: “To those of us who refused to cooperate with this fraud [at the US Stove Company], we had hoped that the EPA would step in, enforce its regulations, and thus provide some level of protection and dignity to whistleblowers. I expect US Stove may come after me, and possibly file a lawsuit against me, as they did with the first whistleblower. The company has dragged that man through the mud, and forced him to hire expensive lawyers, just because he was willing to stand up for EPA regulations.”

False advertising of efficiency

Another major issue that AGH has pursued over the years is false or misleading advertising of efficiency levels, often telling consumers that the unit is eligible for the IRS tax credit, which requires stoves to be 75% efficient, using the higher heating value (HHV). In one case, a test lab listed the stove at 70% efficient, but the manufacturer told consumers it was 75% efficient and eligible for the tax credit. The EPA sent the manufacturer a cease-and-desist request via email, which the manufacturer did not act upon.  The OIG report said the EPA could have revoked the certification of the stove but has not taken further action.  

 

False and misleading efficiency advertising was widespread up until 2021, when most manufacturers began to advertise the efficiency as reported by test lab, and listed in the EPA database of certified stoves. US Stove continued to falsely represent some of its units and declined to comment on the record. Stove Builder International, a large Canadian manufacturer insists that various interpretations of efficiency were acceptable until and unless the IRS defined “efficiency” more clearly. For example, some experts argue that if a stove reaches 75% efficiency on any official test burn, it can qualify even if the average efficiency of all four burns is less than 75%.

 

While the OIG vigorously raises the issue of false advertising of stove efficiencies, it is far from clear whether OECA even believes it has the authority to address efficiency.  Efficiency testing became mandatory in 2020 but the EPA began listing efficiencies in 2012. The EPA does not regulate efficiency, as most European countries do, allowing stoves as low as 51% efficient to be certified.

 

EPA lab served as own third-party certifier

One of the 5 incidents of concern in the OIG report included an EPA approved lab serving as its own third-party certifier of a test report it has produced.  Again, the EPA knew about this but did not revoke the certification and “the lab remained approved by the EPA.”  

 

Test labs are allowed to be third party certifiers and most of them are.  However, they cannot certify the results of stoves tested in their own lab.  PFS-TECO, Intertek, OMNI, RISE (Sweden) and SZU (Czech Republic) are both test labs and third-party certifiers.  PolyTest (Canada), ClearStak and the Danish Technological Institute are approved test labs but are not third-party certifiers. 

 

Deviation from test methods

A fourth concern raised by the OIG, which has already been resolved, involved Lamppa manufacturing who makes Kuuma wood furnaces.  Lamppa had obtained an alternative test method, but the test lab deviated from that method, due to complications.  The manufactured disclosed the deviation and explained why, and the EPA certified it anyway.  After 5 years, the EPA informed Lamp it would not recertify the unit, and Lamppa had to retest and recertify the unit.  

 

Recommendation to the EPA

 

The OIG listed several significant recommendations, some of which could be incorporated into the next set of wood stove regulations, known as New Source Performance Standards (NSPS), which the EPA is currently working on.

 

·      Including a federal criminal false statement clause into the wood heater certification application process, which would require manufacturers, but not necessarily retailers, to not make false statements in their advertising.

·      Develop procedures to revoke the approval of test labs that do not follow NSPS requirements.

·      Develop procedures to revoke the certification of wood heaters that do not coply with NSPS requirements.

·      Inform the OIG of investigations into fraud or abuse of the wood heater NSPS.

 The  OIG report can be found here. 

AGH files report with Consumer Product Safety Commission on alleged fraud

The Alliance for Green Heat filed a report urging the Consumer Product Safety Commission (CPSC) to investigate whether a recall or some other action is warranted for a Log Wood Stove made by US Stove company.

A whistleblower provided information to the EPA Office of Enforcement alleging serious fraud and violations of EPA regulations, some of which could be dangerous to consumers.  AGH reported on those allegations last week, which include alleged fraudulent labelling of stoves and potential safety hazards from stoves allegedly flood-damaged but sold as new. 

 

AGH urges anyone who bought a Log Wood Stove in 2019 or 2020 (model 1269E) to check the permanent label on the back of the stove to determine if they bought a 2015 compliant stove or a 2020 compliant one.  If you bought a 2015 compliant unit after June 15, 2020, or the product was advertised as 2020 compliant when it was only 2015 compliant, AGH urges you to file a report with the Consumer Product Safety Commission and to contact Rafael Sanchez at the EPA Office of Enforcement at Sanchez.Rafael@epa.gov or (202) 564-7028.

 

If the report filed by AGH meets the minimum requirements for publication on SaferProducts.gov, CPSC will send it to the manufacturer within 5 business days.  Reports that meet the minimum requirements for publication should be posted on SaferProducts.gov 10 business days after CPSC sends them to the manufacturer.

The CPSC confirmed that on April 23, 2021, they sent Report No. 20210421-C5A48-2147364589 to the manufacturer of the product described in AGH's Report. AGH consented to have its contact information provided to the manufacturer, so they now can contact AGH directly about the contents of the report, if they wish to clear up any of the allegations.  To date, they have flatly denied all of the allegations.

 

After the whistleblower began to alert consumers about the alleged fraud and dangers, US Stove obtained a Temporary Restraining Order (TRO) against the whistleblower, requiring them to refrain from accessing, publishing, disclosing, or otherwise disseminating USSC’s confidential information to any third party. There is a court hearing on the 26^th during which US Stove will likely have to show the whistleblower’s accusations are false for it to prevail.  Otherwise, the whistleblower can continue to warn consumers about the alleged fraudulent activities and safety issues.  Normally in whistleblower cases, a TRO would be issued against the employer, not the whistleblower. However, TROs also have been used to silence a critic if they are spreading false information that damages the company.  

If the whistleblower’s allegations are true, it could lead to serious fines by the EPA and trigger a recall of certain products.  There have been a number stove recalls in the past several decades, the largest of which was for another stove made by US Stove.  

Companies can cooperate with, or impede, investigations by the EPA and CPSC, and there are different implications in each case.  The CPSC made headline news recently when it took the highly unusual step of issuing an administrative subpoena to Peleton, a company that makes home workout products, after Peleton refused to issue a voluntarily recall a treadmill and clashed with the agency over the wording of a proposed safety notice. The Washington Post reported that the next day, the CPSC issued a public warning calling the treadmill dangerous and telling people with small children or pets to stop using it. 

The US 1269e model in question is only one of many US Stove models and its the only one to be approved, pending review by a rigorous state process that was conducted by the State of Alaska.  Alaska reviewed both the 2015 compliant version, the 1269e, as well as the 2020 compliant one, the US 1269.  The Alaska review says that for the 1269e there were two test reports for the same model, and one passed and one didn't. failed the emissions certification test and then retested and passed, a unique issue and potentially an illegal one.   The Alaska review would not be able to detect whether a unit is being manufactured prior to its certification or sold as 2020 compliant, when it was actually the 2015 compliant version, as the 1269E was alleged to have been.  The EPA has the authority to revoke the certification of the US 1269e, based on evidence in their possession, prior to determining whether there is cause to issue a fine.

The EPA Office of Enforcement handles a variety of enforcement actions, but larger cases with potentially higher penalties are turned over to the Environment and Natural Resources Division of the Department of Justice, as this case reportedly has been.  On April 26, US Stove is expected to ask for a longer-term injunction against the whistleblower for sharing confidential information, but this would not prevent the whistleblower from cooperating with the Department of Justice’s ongoing investigation or a potential investigation from the Consumer Product Safety Board. 

Whistleblower alleges wood stove manufacturer defrauded retailers and customers

Breaking update: April 15 2022: A year after a whistleblower provided the EPA with extensive evidence of fraud and violations of stove regulation at the US Stove company, the EPA appears to be aggressively investigating the case.  The whistleblower initially the EPA's Office of Enforcement (OECA), who appeared to do very little for most of the past year.  But a breakthrough happened when Special Agents of the EPA's Office of the Attorney General (OIG) responded to a short form on the Attorney General website for members of the public to raise concerns.   It is not clear if the OIG office knew that OECA was already supposed to be investigating the case and already had documents from the whistleblower.  

The case involves more than 4,000 2015 certified stoves that were sold and delivered to Tractor Supply that US Stove claimed were 2020 certified.  Randall Dodds, a Vice President at Tractor Supply in charge of the order from US Stove, was allegedly unaware that US Stove had provided them with 2015 certified stoves at end of 2019, when they needed to stock up on 2020 certified stoves.  When Tractor Supply found out about the alleged fraud, they had already shipped the stoves and begun selling them at their retail outlets in boxes that claimed they were 2020 certified, according to multiple sources.  Mr Dodd declined to discuss "its vendor relationships with third parties."  

The original whistleblower remains under a Restraining Order, given by a local judge to US Stove because the judge thought "the public interest would be served by granting the requested temporary restraining order." At that time, the public was being misled and sold stoves that were mislabeled and more polluting.  No notice, recall or compensation has been offered to consumers.

Breaking update: April 16, 2021:  US Stove Co. got a temporary Restraining Order against the whistleblower requiring him to refrain from accessing, publishing, disclosing, or otherwise disseminating USSC’s confidential information to any third party. The Temporary Restraining Order also requires him to return all USSC documents containing Confidential Information within 48 hours of receipt of the Temporary Restraining Order.  There will be a hearing on April 26 in a Tennessee Court for a Temporary Injunction and "other appropriate relief."  As the EPA investigation gears up, US Stove could sue the whistleblower for damages, requiring substantial legal fees on both sides. 

April 9, 2021 - US Stove Co., a Tennessee-based company that manufactures most of their stoves in China has been accused by a former employee of fraudulent activity, which he also reported to the EPA enforcement division.  The employee who wishes to remain anonymous, alleged the company told retailers that a popular stove model complied with 2020 EPA emission standards. If those allegations are confirmed, thousands of people may have purchased far dirtier stoves than they thought they were buying and lead to massive fines for the company.

The old and new model of the 1269
look exactly alike and has a similar
model number. 

The whistleblower says that more than 4,000 model 1269E stoves were sold to Tractor Supply Company during 2019 and 2020. According to the whistleblower, US Stove Co. told Tractor Supply that the stoves complied with the 2020 emission standards and about 900 were sold after the May 15, 2020 deadline when all stoves had to be 2020 compliant.  The 1269E emitted 4.2 grams of particulates per hour based on EPA approved certification testing.  The newer US 1269E was tested at 1.8 grams an hour.

 

A representative of US Stove Co. vigorously denied these allegations, saying that “U.S. Stove has never sold a non-compliant product to Tractor Supply or ‘other outlets’. Further, U.S. Stove has never misrepresented the 1269E model as a 2020-compliant model, and further has never shipped 1269Es as if they were US1269Es.”

August Jones, President on left, with
Richard Rogers, Chairman of the
Board in their warehouse in 2019.

US Stove may be the oldest operating stove manufacturer in the US and is still owned and operated by the Rogers family.  The company was original based in upstate New York, and used extensive prison labor in its operations.  When that practice was banned in 1886, the company moved south, in part to avoid unionized labor.  But after a 1927 union fight, the company closed for a period until S. L. Rogers incorporated US Stove Corporation in 1930.  Today, Richard Rogers is the Chairman of the Board and his nephew, August Jones, is the President.  

Documents and emails viewed by AGH tell a different story, indicating that US Stove Co. was shipping 1269Es and telling Tractor Supply they were US1269Es, which were 2020 compliant.  EPA regulations stipulate that you cannot market or sell a stove model until the EPA has issued a certificate of compliance.  Polytest, the test lab that did the emission testing for the US1269E, completed their report on August 26, 2019.  Yet, documents appear to show that between June and September of 2019, US Stove Co. purchased 4,144 US 1269E’s from Jinhua Jason and Ningbo Precise, two factories in China.  The Certificate of Conformity was issued by PFS-TECO, the third-party reviewer to John Vorhees, a senior engineer at US Stove Co. Tractor Supply issued purchase orders for the US1269E’s in March of 2019. The national hardware chain reportedly received the stoves and paid the invoices between June and August 2019.   At issue is when US Stove released the first model plate for the US1269E.  There is no allegation of wrongdoing by Polytest lab or PFS-TECO.

The permanent metal name plates on
the back of the 1269Es are made and
affixed in China, and stoves sent
directly to Tractor Supply.

In February 2020, the Alliance for Green Heat (AGH) was contacted by a consumer who thought he was buying the 2020 compliant US1269E, but when he opened the box, it was the 1269E. He asked “why the box says one thing but the identity on the stove says something different. …  I checked other stores and they have the same small wood stoves with the same descrepancy.[sic]  I called the company about this situation and the young girl gave me the impression there is no difference.”

 

According to the former US Stove Co. employee, Tractor Supply may not have known that the description of the stove on the box did not match the EPA nameplate on the back of the stove, or that the devices “were actually twice as dirty and not what the customers were expecting.”  Mary Winn Pilkington, Tractor Supply’s communications officer confirmed that the company was investigating this issue but did not yet have any comment.

In response to a request for a statement by AGH, the EPA said that "you may be assured we take allegations of fraud very seriously and are working to address the concerns you have raised."  The EPA's statement thanked AGH for providing them information about this case, however the information was sent by whistleblower to EPA office of Enforcement before AGH received it.  (See full statement below)

One outlet is now selling the 1269
for $428, possibly making it the 
cheapest EPA certified stove on
the market, a key reason that 
explains the high sales volumes

US Stove Company is well-known within the industry for selling low-cost wood stoves through hardware chain stores and online and experts believe it is probably the highest volume seller of stoves in North America, although actual sales figures are kept secret.  Both the older version of the 1269 and the 2020 compliant version sell for under $600 and it is not clear how much the company had to adjust the design to meet the stricter emissions requirements.

 

April 2020 flood damage US Stove facilities

In April of 2020, a severe storm brought heavy flooding to South Pittsburg, damaging hundreds of stoves and stove parts at US Stove Co.  The whistleblower also alleges that products US Stove claimed to be damaged by the flood in April was put back into stock in September and sold as new. This product was detailed as “scrapped” to the insurance adjustor.

 

The whistleblower also contacted Tractor Supply to alert them of potentially dangerous products that they may have sold.  “I'm having a hard time sleeping knowing the risk of fire, injury or even death could be caused by this water damaged product in the homes of families,” he told the buyer at Tractor Supply.

 

A company representative said in an email that “U.S. Stove was damaged by a flood in one of its warehouses. U.S. Stove worked with its insurance company to recover its damages. U.S. Stove did not sell flood-damaged stoves as new.”

Third party certifiers
are supposed to double check
the testing process, but have
no role in reviewing 
manufacturing or shipping

It is unclear whether this could lead to a recall of stoves, if the allegations are confirmed.  For stoves that may have been improperly labelled as 2020 compliant, Tractor Supply may have an obligation to notify them and offer a refund.  Previously, the largest recall of stoves in the past two decades also involved a U.S. Stove product when 4,400 window mounted pellet stoves were recalled.  

 

The Alliance for Green Heat has often contacted US Stove over the past 10 years after finding scores of non-compliant US Stove products on the market as well as examples of misleading advertising.  In 2012, US Stove products and those of other companies appeared to mislead consumers about their certification status.

 

In June of 2017, AGH found many non-compliant furnaces made by US Stove on the market.  AGH contacted nine of the retailers, and of those, six stopped advertising those boilers within 2 weeks. Others continued advertising uncertified wood furnaces after being alerted they were illegal to sell, including Sears’ online marketplace (orders fulfilled by the third party 123Stoves, Inc.), Homeclick, and HVAC direct. HVAC Direct continued to sell uncertified furnaces until they stopped in March, 2021 after pressure from a facebook campaign.  The EPA was aware of all these instances of non-compliant furnace sales but said they cannot discuss any enforcement actions.  There is little indication that they took any enforcement action in these cases.

 

An advertisement for a non-compliant
 US Stove boiler being sold in April
2021. The seller has two unused ones.

Today, AGH found brand new non-compliant US Stove furnaces (model 1660EFE) being sold on facebook  by a private individual in Jasper, Tennessee. This is a town adjacent to South Pittsburg where US Stove is headquartered and a number of US Stove employees and executives live.

The allegations from this senior executive of a stove manufacturer may represent the first time an industry insider has publicly blown the whistle in what is often seen as a tight-knit community where colleagues protect one another.  And it appears to be a coincidence that these allegations are coming out on the heels of scathing reports from NESCAUM and the State of Alaska that EPA’s enforcement of wood heater regulations are “dysfunctional.”  These reports led to the EPA announcing an extraordinary shake-up of its wood heater enforcement program.  This instance of alleged fraud may become one of the first test cases of how the EPA is ramping up enforcement of its wood heater regulations.

Tractor Supply was still selling the 1269
earlier in 2021 but they appear to have 
removed it from their website.

 

This whistleblower says that after raising his concerns internally, he was forced out of the company.  Now, he says he is worried about retaliation and how he can “resume support for my family in the future.”

Statement by the EPA's Office of Media Relations

April 8, 2021

Thank you very much for contacting the Environmental Protection Agency (EPA) regarding potential fraud at U.S. Stove.  We appreciate the efforts you have made to date in collecting information and your willingness to share it with us. We are very much interested in understanding better the facts surrounding this case and want to assure you that EPA is committed to reviewing the information you have provided as quickly as possible.  As an open enforcement action, EPA does not comment on the specifics involved, but you may be assured we take allegations of fraud very seriously and are working to address the concerns you have raised. 

 

We are aware of the findings from the NESCAUM report issued in March. EPA is committed to ensuring that wood stoves and other wood burning devices comply with Clean Air Act standards to reduce health-harming pollution.  In light of information from states and other stakeholders provided in late 2020 and early 2021, the agency is taking a number of actions to address concerns about the certification of wood stoves, including the methods and manner in which wood stoves are being tested for compliance with the 2015 New Source Performance Standards under the Clean Air Act.

 

Numerous brand new, uncertified units,
such as the 1660EFE furnace, are 
frequently for sale by private owners 
near the US Stove factory.

These actions will take time and continued engagement with stakeholders. Given the concerns raised, EPA is carefully reviewing both current and new Certifications of Compliance and will take actions as appropriate.

Postscript: June 8, 2021. US Stove furnaces that do not meet the current, 2020 EPA certification standards continue to pop up for sale around the US Stove factory, that spans the Tennessee/Alabama border. Even while US Stove Company is under scrutiny for various alleged illegal sales, it appears that they may still be trying to get rid of excess inventory of the 1660EFE model furnace. The EPA knows about this but they still apparently do not have the staffing or resources to do anything about it. See many more images and detailers about sellers on our Facebook page.

 

 

EPA proposal to relax wood stove rules sows division between states and industry – and between industry factions

Some states may disallow sell-through, but selling-through has already begun

Rep. Peterson (D-MN) seen here with
constituent Dennis Brazier of Central
Boiler, was the strongest advocate for
a sell-through in Congress.

Updated: Oct. 28, 2020 - The EPA proposal to relax the Obama-era timeline for wood heater emission compliance is setting up another showdown between the stove and boiler industry and states and air quality agencies.  At issue are sales of more polluting wood stoves and wood boilers.  The far cleaner pellet stoves and pellet boilers, favored by some states as an important renewable alternative to fossil fuel heat, are not as contested.

The sell-through was expected to be at least for 2 months, most likely October and November but as of the end of October, the EPA had still not announced whether it would approve a sell-through and it may not be likely that any announcement will be before mid or late November, leaving barely a month  before the end of the year.

While many European countries are moving forward with incentives for pellet stoves and boilers as part of a broader policy to reduce fossil fuels, the US wood heating community is embroiled in fights about whether the dirtiest cordwood appliances should get a new lease on life.  The main wood heat industry association, the Hearth, Patio and Barbecue Association (HBPA) also represents gas appliances, so it is not making the case that these wood and pellet heaters are a low-carbon, renewable technology.

The stakes are not as high as they were in 2017 when Congress nearly passed a 3-year extension to stove and boiler emission deadlines, or in 2018 when the EPA proposed a full two-year sell-through.  But the way this sell-through proposal finally emerged is opening old wounds, not only between industry and states, but also within industry.  It led to the two highest volume stove manufacturers leaving HPBA and left the association without a meaningful victory during Trump’s presidency.

The EPA has opened the public comment period on whether to allow a window in the fall to sell now out-of-production higher emitting Step 1 stoves that were scheduled to be illegal to sell after May 15. The EPA will also host a virtual public hearing on June 8 to solicit input.  Most experts believe some fall sell-through period is extremely likely but its length and potentially some smaller details still hang in the balance.  In the meantime, hundreds or possibly thousands of non-compliant new wood stoves and boilers continue to be openly advertised and sold across America two weeks after the stricter EPA standards took effect.

While many retailers and manufacturers took the May 15 deadlines seriously, some continue to advertise and/or sell Step 1 heaters on their websites, showroom floors, or through Craigslist, eBay and other sites.  EPA has made enforcement a low priority which does not preclude letters and visits by EPA enfrcement. HPBA has also been consistently educating retailers about how to comply with the new regulations.  In addition, HPBA has been reminding both manufacturers and retailers that even though the EPA may not very active at higher level enforcement, state and local authorities can still be active.

HPBA has continually
updated its education
effort for retailers.

Industry highlights mom and pop hearth stores in their advocacy efforts to get a sell-through, but the needs and goals of manufacturers is the crux of the problem.  Mom and pop stores still have Step 1 stoves as a result of the many different relationships that they have with manufacturers, some of whom pressured them to keep buying Step 1 stoves, some of whom didn’t even have Step 2 stoves until recently – and some who were ahead of the curve and started selling Step 2 stoves in 2018.  

Some manufacturers still really need the sell-through because they have unsold inventory of Step 1 stoves, boilers, and furnaces and may have to buy back many thousands of Step 1 appliances.  Five years lead time could have been enough, but there was a widespread belief that the 2020 deadline would not stick under a Trump administration.  As late as the winter of 2020, some manufacturers were still in disbelief that their industry association didn’t get any significant results in the courts, Congress, or with the administration.  

Conversely, the good news for the progressive pellet and wood heating community is that the Obama-era regulations are still intact, 5 years after they came into force.  Pellet stoves and boilers are

2020 compliant pellet stoves show a
strong correlation between lower 
PM, lower CO and higher efficiency.

significantly cleaner and more efficient not just in test labs, but in the homes of more than a million families, many of whom want them not just to save money, but to stop paying a heating bill to multinational oil companies.

The stakes are not as high for some New England states like Vermont that have been giving hefty incentives to mostly European designed, clean burning pellet boilers and don’t experience severe weather inversions that trap wintertime pollution close to the ground. (Vermont and other other New England states do experience regular, more localized inversions in valleys.)  But a potential sell-through of dirtier cordwood appliances represents a greater threat for West Coast communities struggling with excessive wood smoke from California’s central valley to the Canadian border.

Nowhere is the sell-through more controversial than in the warm air furnace sector, where two small companies with Step 2 compliant units would be significantly harmed by an initiative enabling a larger manufacturer to sell their older, higher polluting units.  

The stakes may the highest for upper mid-west states like Minnesota where outdoor wood boilers are

On per capita basis, wood smoke
concentrations are highest in states
with more outdoor wood boiler
installations like Wiconsin and
Michigan.

as popular as they are controversial, having subjected hundreds of towns and neighborhoods to excessive smoke.  A sell-through could result in hundreds of additional Step 1 boiler installations that will continue to emit heightened levels of smoke for a decade or more.  Warm air furnaces are also higher sellers in Mid-Western states, as they experience some of the coldest weather in the country. 

Minnesota is home to Lamppa Manufacturing, a small Step 2 warm air furnace manufacturer that is vehemently against any sell-through, as their company would suffer if Step 1 furnaces were allowed to come back on the market.  Lammpa Manufacturing is not a HPBA member because it and other manufacturers like Woodstock Soapstone oppose HPBA’s history of advocating for more lax standards for outdoor wood boilers and stoves.

EPA adds to confusion

On May 20, EPA Administrator Wheeler defended the proposed sell-through at a Senate hearing, adding to the confusion and myths about wood heaters.  The Administrator mistakenly said that the EPA is only proposing to allow stoves to be sold that we allowed by the 2015 standards and  “we’re not talking about standards that are 20 or 30 years old.”  But 90% of stoves met the 4.5 gr/hr. standard when Washington State adopted that standard in 1995.  The EPA adoption of it in 2015 barely moved the needle at all and allowed stoves tested as far back as 1990 to remain on the market.

The Administrator also incorrectly told the Senate Committee that most retailers sell off their

Administrator Wheeler's performance
at a recent Senate Hearing showed limited
understanding of sell-through details.

inventory in the spring.  In actuality, the spring is the slowest sales period of the year and the Coronavirus shutdown disrupted sales (though far less than industry claims). Administrator Wheeler further added to the confusion by implying that it was the manufactures who were most imperiled because they had to buy back unsold stoves from retailers.  

Meanwhile, the EPA’s Office of Enforcement, OECA, has not designating Step 1 heaters as “Out of Production” but says that they are in the process of changing their database.   The Alliance for Green Heat (AGH) believes that all out-of-production stoves should be consistently designated, and the EPA should not be operating under the assumption that there will be a sell-through until one is formally approved.  (The EPA made this change to their list 2 months after this blog was initially posted.)

The EPA database of certified stoves is also riddled with errors and omissions but it remains a vital resource for states, air agencies manufacturers, retailers, consumers.  Many of the errors are minor and its important to note that the EPA maintains this database as a public service, not because it is legally required to do so. If the certification of a unit, or other details are in doubt, the most authoritative document is the certication test report that manufacturers are required to post on their websites.  Moreoever, some stoves may be fully certified but not appear on the EPA's database.  It may take up to 40 days for the EPA to post an appliance on their database after it is certified because manufacturers are required to email the EPA showing the link where they have posted their test dart on their website before the EPA adds them to the database.  This helps ensure that manufacturers comply with the requirement to be transparent about their testing, which manufacturers used to keep confidential prior to 2015.   

Dispute over $75 million change-out fund and one-year sell-through offer

During the May 20th Senate hearing, both Administrator Wheeler and Senator Capito (R-WV) took

Senator Carper (D-DE) has become the
leading voice in the Senate for stricter
wood heater emission standards.

aim at Senator Carper (D-DE), noting that he had previously supported a sell-through but now opposed it.  The day before the hearing, Jack Goldman of HPBA sent a letter highlighting this supposed contradiction, and the main reporter following this issue, Sean Reilly, called it a “flip-flop” by Senator Carper.   But the attempt to embarrass Carper may have backfired as it brought back a controversial chapter in this saga into the limelight.

Senator Carper introduced a bill in 2018 that would have established a $75 federal change out fund and provided a one-year sell-through.  Although the bill was historic opportunity to get both a sell-through and a significant fund to subsidize the sale of wood stoves and boilers.  HPBA refused to support it at the time because it would have also codified Step 2 emissions limits as of May 2020, and the association still thought they could roll back much of the 2015 New Source Performance Standards (NSPS), or at least delay by three years.  Only in retrospect can the wood heater industry appreciate what an opportunity Carper’s amendment was, and how little industry ended up securing in subsequent years.  HPBA’s decision to try for a three-year extension instead of a one-year sell-through and a $75 million change-out fund may have exposed differences between central heater manufacturers who really needed a three-year delay, stove manufacturers who were already meeting Step 2 emission standards, and retailers who would have been a main beneficiary of a large change-out fund.

This moment may have represented industry’s high point in influence in Washington but the moment was squandered and such an opportunity has never come back.

AGH asked HPBA how decisions about wood heater policy are made within the organization. Jack Goldman, CEO of HPBA responded in writing that, “All policies of HPBA go through the appropriate internal approval process that includes staff, committees, sections, and leadership.”  HPBA members interviewed for this story say that policy is normally set by the Solid Fuel Hearth Appliance Section and that central heater companies do not have any inordinate influence but HPBA must represent all its members, even if that means working for “the lowest common denominator.”  One HPBA member who was distressed by HPBA’s lack of support for Carper’s amendment said they did not recall any vote on that policy decision, and that there was a lot of inconsistency on what matters were voted on, and what was decided by HPBA government affairs staff.

In hindsight, industry would have benefited far more from Senator Carper’s amendment. At the time, however, industry felt that, between Congress, the courts and the Administration, they still had lots of cards to play, according to industry members interviewed for this blog.  Industry had the opportunity to promptly litigate the legality of the 2015 NSPS but instead chose to delay litigation and take their grievances to Congress and the Administration.  Briefs for the court challenge are due in August but it is unclear if there is anything meaningful left to litigate other than some technical issues that don’t implicate timelines and emission standards.  It’s also unclear how much appetite manufacturers have for litigation if it needs to be funded with assessments in addition to normal membership dues.

States and programs that may not allow the sell-through

A number of states, such as Minnesota, may have incorporated the 2015 NSPS and its 2020 timetable into their state laws even before they anticipated a sell-through and thus cannot allow a sell through per state law.  New York has publicly said that a sell-through may violate state laws, leaving open the question whether retailers can safely sell Step 1 appliances in the Empire state.  Most change out programs and incentive programs that account for potentially up to 15% of annual stove sales only make Step 2 units eligible.  Some of those programs operate with funds tied to the EPA that could not be redirected toward Step 1 stoves.  

In addition, it’s unclear if the sell-through will be allowed in parts of Canada that have expressly adopted the 2015 NSPS.  The provinces of Quebec and British Columbia, home to a third of Canada’s modest 37 million population (less than California’s) adopted the 2015 NSPS.  It’s also unclear if local jurisdictions, including major urban areas, could disallow a sell-through.  Depending on the number of states that reference the 2015 NSPS deadlines, there may emerge a patchwork of regulations disallowing the sell-through.  This kind of patchwork is often what all industries try to avoid, as it makes commerce more difficult.

Central heater manufacturers spearhead the fight for relief

Central wood heater companies appear to have played an outsized role in the effort to delay the EPA’s wood heater deadlines, frustrating HPBA members who would rather have leaders of companies with more modern technology be the face of industry.  Frank Moore, President of Hardy Manufacturing, a Mississippi based outdoor wood boiler company, represented the wood heater industry at a Senate hearing in 2017.  However, Hardy Manufacturing had no intention of making a Step 2 heater and has since gone out of business.

As recently as February of 2020, HPBA said they “invited two HPBA members – Central Boiler and U.S. Stove Company” to a private meeting with officials at the Office of Information and Regulatory Affairs (OIRA), which is part of OMB.  These two companies dominate the outdoor boiler and warm air furnace markets.  It is unclear why HPBA invited them to the meeting.  AGH asked HPBA why they invited those two companies to this meeting, and in a written response, Jack Goldman said, “we do not discuss internal deliberations as to how we make such decisions.”

   

The appearance that HPBA policy was being driven more by the needs of companies making central boilers caused considerable friction within industry.  One HPBA member, who asked that his name not be used, said that some companies did not renew their membership in HPBA in 2020 because the “NSPS assessment fees are not in the interest of the company,” referring to the fees manufacturers paid to fight the EPA’s 2015 NSPS.  The initial success of HBPA’s advocacy efforts, which led to a proposed 2-year sell-through for central heaters but not for stoves, was a deep disappointment for some HPBA members that only made stoves.

The February meeting left a paper trail on the record, giving insight into the number of Step 1 central heaters these larger manufacturers have in their own warehouses. John Vorhees, Director of Compliance for US Stove Co., said in a memo to the EPA that, “We, as a manufacturer are also stuck with inventory. We currently have $730,000 of WAF and $670,00 of AAA products.” (WAF stands for warm air furnaces, regulated under Subpart QQQQ of the NSPS, and AAA refers to stoves, which are regulated under Subpart AAA of the NSPS.)

"Thank you Congressman Peterson" says a
sign held by Central Boilers employees in

2017, after Peterson  introduced HR 453

Central Boiler did not disclose in their memo that they had any Step 1 boilers in their possession but said that 210 of their dealers had 596 Step 1 boilers, or an average of 2.8 boilers apiece.  Oddly, the memo does nothing to explain how many Step 2 boilers those dealers have, or when the company stopped selling Step 1 boilers to their dealers and started helping them stock up on Step 2 boilers.  As a result, this memo, like scores of other comments submitted to the EPA in support of a sell-through, fails to provide the EPA with the kind of data that demonstrates a sell-through was warranted and that manufacturers acted timely and in good faith to provide Step 2 heaters to retailers.

The 2018 EPA proposal for a 2-year sell-through for boilers and furnaces, but not for stoves, would have extended the sales of the most polluting units the wood heater industry had to offer.  The irony was not lost on many in the stove industry, who privately complained that it was the outdoor boilers who brought on stricter scrutiny from state and federal air quality agencies in the first place.  Now, they were being teed up to get relief. But the plan stalled, and the EPA public comment process resulted in a denial of the sell-through for central heaters, which they unofficially announced in November 2019.  

After industry failed to secure a two-year sell-through that would have allowed them to build up a two-year inventory of Step 1 heaters, US Stove Company laid off 25% of their workforce and also dropped their membership in the HPBA.  England Stove Works also dropped their membership but reportedly did not have any such large-scale layoffs. These two companies are by far the largest volume stove manufacturers in the US, as they sell to big and small hardware chain stores and have buy-back agreements.  

Hardware chains such as Home Depot,
Lowes, Menars, Habor Freight Tools,
Northern Tools and  True Value, sell
the majority of stoves in some areas.

There has long been tension between US Stove Co, England Stove Works and the makers of more expensive stoves that get sold through specialty stove retailers.  US Stove Co and England Stove Works have always offered EPA certified stoves for under $1,000 and rarely sell stoves that cost more than $2,000.  After the 2008-09 recession, these companies picked up a larger slice of the stove market, putting more pressure on specialty hearth stores whose stoves often start at $2,500 and can go up to nearly $5,000.  Brandon Barry of US Stove Company told AGH that "we have tried in all instances to maintain similar price points in the marketplace, even with increased cost on our 2020 models, leaving those stoves as some of the most cost effective for consumers in the market."

Similarly, when the cleanest and most efficient wood pellet boilers are being sold for $10,000 - $20,000, US Stove arguing for a 2-year sell-through told the EPA that, “We have determined and experienced if a forced-air furnace is priced at retail beyond $1,500, the consumer looks for alternative models or appliances with different heating sources (i.e. electric, gas, geothermal, and etc) for their central heating requirements. It is important to note we are the largest producer of wood burning forced-air furnaces in the industry.”  In addition, Brandon Barry of US Stove told AGH that "record low fuel prices were and still are a driving factor of not introducing a furnace for this year."

The EPA’s low priority enforcement policy

The EPA has adopted a more low priority enforcement approach across a broad range of regulated industries.  With wood heaters it has appeared to be somewhat low-priority for many years, far before the Covid-19 pandemic.  The EPA is not expected to engage retailers who continue selling Step 1 appliances, but HPBA has still doggedly implored them to abide by the legal timeline and avoid any possibility of infractions. 

Acme and EZ Boiler do not advertise
their units as commercial only

The EPA’s lack of enforcement may be most pronounced by the continued open sale of uncertified outdoor boilers and furnaces.  Several outdoor boiler and warm air furnace companies still brazenly ignore EPA laws and operate with apparent impunity.  Companies like Acme Furnace Co based in Missouri, EZ Boiler based in Michigan and Hyprothermboiler based in Arkansas continue to make uncertified residential wood boilers and furnaces.  We are not aware of any EPA enforcement activity despite being contacted numerous times in recent years.   

Follow the money

HPBA is a small industry association by Washington standards with about a $6 million-dollar budget.  HPBA emerged from the Wood Heating Association founded in the 1970s during the wood stove boom years.  It later merged with the barbecue industry association, but barbecue manufacturers only pay a fraction of the dues that hearth industry manufacturers pay.  Three quarters of HPBA’s revenue comes from its annual Expo and only 22% from membership dues.  The loss of membership dues from US Stove Co. and England Stove Works may be less significant than the loss of revenue from them buying booth space at the annual Expo, but since they don’t sell to independent hearth retailers, their motivation to have a booth at the Expo is not as important as other stove manufactures that rely on small retailers.

Retailers are members of regional HPBA affiliates and do not pay dues to the national HPBA, even though affiliates share a small amount of retailers membership dues with the national HPBA.  Test labs also pay dues to regional affiliates based on their income, ranging from a high of $1,050 for Omni Test Labs to $350 for Intertek, each year.  (AGH is also a member and pays a non-profit rate of $350 per year.)  Between membership dues and fees for manufacturers and renting booth spaces at the Expo, HPBA remains mostly a manufacturer-driven industry association.

The Solid Fuel Section of HPBA is the committee that “promotes and protects the interests of HPBA members that produce wood and pellet hearth appliances,” according to the HPBA website.  The Section also funds specific legislative, regulatory, and consumer initiatives.  If the Section votes to litigate or pursue Congressional legislation, the effort is funded through a special assessment based on the size of each company in the Section, not by barbecue or gas section members.  Some companies resisted expensive efforts to undermine or stall the NSPS, but still had to pay the special assessment, and others refused to pay any more special assessments after the EPA’s only proposed a sell-through for central heaters in 2018.  The 2019 assessment for additional NSPS advocacy approved by the Solid Fuel Section was reportedly less than $100,000, but previous years may have been much higher.

The March 2020 Expo in New Orleans was nearly cancelled but carried on with smaller attendance.  This was the first Expo to showcase all 2020 compliant appliances and was notable that the only two stoves considered for Vesta awards were both automated.

The annual HPBA Expo is a networking
hub not just for industry, but also EPA and
air quality experts who attend parallel
events.

The main purpose of the annual Expo is to provide a forum for manufacturers to sell to retailers and that in turns provides HPBA with much of its annual operating expenses.  HPBA largest expense by far is putting on the Expo.  Its next largest expense is its advocacy and government affairs department, which reportedly spends nearly $1 million a year, mainly in salaries.  In addition, regional affiliates, with far smaller budgets, engage in local lobbying and advocacy.  By far the biggest issue in recent years for the Government Affairs staff has been trying to extend the 2015 NSPS deadlines and dismantle parts of it.  But increasingly HPBA and its regional affiliates are engaged in fighting against restrictions on natural gas and the electrification of heating.

It’s unclear what percentage of membership dues, assessments and booth fees companies like Central Boiler and US Stove Company pay to HPBA.  Hearth & Home Technologies, by far the largest higher end stove manufacturer in the US who owns top brands like Harman, Quadrafire and Vermont Castings, already pulled out of HPBA’s annual Expo several years ago, which was an even bigger financial blow to HPBA.   It’s unclear if the departure of US Stove Co will help other factions regain more clout and leadership within HPBA.

Companies making and supporting some of the cleanest, most efficient, and most automated wood heating technologies have formed a smaller trade association, Biomass Thermal Energy Council (BTEC), that initially broke off from the Pellet Fuel Institute (PFI) so it could more aggressively fight for modern pellet heating policies in Washington DC.  (AGH is also a member of BTEC and its President John Ackerly is on the Board of BTEC.)

Impact of sell-through sales of Step 1 appliances

The proposed sell-through would clearly benefit some companies and reduce the sales of others.  Manufacturers that took the deadline seriously would have to compete with those who were counting on an extended timeline and can now offer cheaper or more discounted products.  Some retailers who cleared out their Step 1 products also would be unhappy with the sell-through for this reason, but the majority who have some Step 1 stoves left support it.  Retailers that have no Step 1 stoves could also buy more from manufacturers who have left-over Stove 1 inventory.

For the states and air agencies opposing the sell-through, the issue has little

A smoke capturing inversion in
Fairbanks, Alaska.

to do with issues within the trade association, and everything to do with the additional pollution that will result from the sell-through.  Upper Midwestern states where central heaters are popular and Western states that have frequent inversions are struggling to determine how many more Step 1 boilers, furnaces and stoves are left to sell.  One data point causing great concern is that a relatively small number of manufactures who sell to “major home center chains, and report that over $10 million worth of product will not sell in time and must be repurchased,” according to a letter from HPBA’s Jack Goldman to EPA Administrator Andrew Wheeler.  It is not clear how much was repurchased, or still needs to be repurchased, what percent is furnaces and boilers, and how much of that could back on the market before Nov. 30.  Brandon Barry of US Stove told AGH in a written response to questions that “our inventory levels are confidential. I will say that sell through would be beneficial for us at both the manufacturing and retail level. ...  Some product came back to our location and could be sold if sell through comes to fruition. Some has already been destroyed."  Pellet Stove Parts 4 Less, a Massachusetts company said they bought more than 100 Englander Step 1 pellet stoves in April at bargain prices so they could take them apart and sell the individual parts.

The other controversial area is how much more polluting Step 1 appliances are in the field, compared to Step 2 appliances.  HPBA’s position is that Step 1 appliances are “perfectly good” and a sell-through “ultimately has a minimal impact on the environment as the products in this sell-through provision are already clean burning.”  In written answers to questions submitted by AGH, Jack Goldman added, “We certainly hope that the Step 2 appliances may be better than Step 1 products in people’s homes … EPA simply has no data confirming that there is a distinction in the field between a 2.0 g/h laboratory number and a 4.5 g/h laboratory number.” 

Emission standards for lab testing dropped by more than a
 half for stoves and even more for most boilers and furnaces.

While pellet stoves are the least concerning, as many Step 1 pellet stoves were already under 2 grams an hour, outdoor and indoor boilers, also known as hydronic heaters, have the widest differences between Step 1 and Step 2 and are likely the appliance type where there is a very appreciable emission difference.  Furnaces are even more complex as they didn’t even have a voluntary emission program prior to 2015, so they have had to go from an uncertified class of appliances very quickly.  In 2015, their Step 1 standards were ≤ 0.93 lb. of PM/mmBtu heat output but their Step 2 dropped the most drastically, all the way to ≤ 0.15lb/mmBtu heat output.  It’s hard for any wood heating combustion expert to expect that such a drastic drop in required lab certification limits would not impact emissions in the real world. 

For states and air quality agencies, there is also a much more antagonistic relationship with HPBA than there was decades ago, before this bitter fight over the 2015 NSPS.  The apparent leadership of central boiler companies within HPBA has not helped the relationship, and it will likely lead to more robust comments opposing the sell-through and a potential increase in state enforcement activity.

What comes next

US Stove Co and Englander dropped their memberships for different reasons, but the loss of their membership dues and assessments is overshadowed by a far more imminent threat to HPBA’s financial health: whether they can have the next expo in Nashville in March 2021.  The association is actively exploring whether to hold a virtual trade show but that may not provide the revenue, even after the far lower expenses, that it relies on.  Many trade associations and other groups are facing similar, longer term disruptions to the business models as a result of the Cover-19 pandemic.

NESCAUM's Lisa Rector  demonstrating
the IDC test method to EPA staff at the
2018 Wood Stove Design Challenge on
the National Mall.

Then, there is the next NSPS which could begin as soon as 2023.  Many people in industry worry that the 2 grams of PM2.5 per hour standard is just a precursor to 1 gram an hour.  But the next NSPS is likely to be far more complex and will focus on adopting an entirely new test method that may abandon measuring pollution in grams per hour, and adopt grams per unit of heat, which is the way boilers are already measured.  HPBA members have already paused development of the broadly accepted ASTM E3053 cordwood test method, that was mainly designed by the HPBA manufacturing community.  HPBA members developed the underlying data for this ASTM cordwood test, and it has become very popular, with 57 out of the 120 Step 2 wood stove models using the ASTM test.
Now the Northeast States for Coordinated Air Use Management (NESCAUM) is developing the underlying data for a series of Integrated Duty Cycle (IDC) tests, mostly with funding from the New York State Energy and Research Development Authority (NYSERDA).  The EPA informed HPBA in January that they plan to use the IDC framework as the basis of the future Federeal Reference Method (FRM), the officially designated certification test method.

The question will likely be about how much data NESCAUM releases and when, and whether HPBA feels that it has been sufficiently included in the process and ultimately whether the EPA has enough data to adopt a FRM.  The amount and quality of test data developed for the ASTM will be a reference point.  Developing test data for a test method is a lengthy and expensive process and also can become political and controversial based on who can witness testing, how much data is shared, how long it takes to share data, what new instrumentation is required, and what the next set of timelines looks like.   The process could lead to another lawsuit – and special assessments from the HPBA’s Solid Fuel Section, if manufacturers feel their ability to certify products is too unpredictable.  Alternatively, if the acrimony around this proposed sell-through diminishes, a more cooperative and inclusive process could emerge and result in a genuinely improved test method that will encourage innovation to make stoves burn well in homes, not just in labs.