Final EPA Air Rules Provide Greater Clarity for Biomass

By Robert B. McKinstry Jr. and Michael C. Duffy | January 30, 2013

On Dec. 20, the U.S. EPA issued the final revised hazardous air pollutant emission regulations for industrial, commercial and institutional boilers and commercial and industrial solid waste incinerators (CISWI regulations), including biomass-fueled units, under the Clean Air Act. At the same time, EPA revised and added clarity to the nonhazardous secondary material (NHSM) regulations under the Resource Conservation and Recovery Act, which determine, based on a unit’s fuel content, whether that unit’s hazardous air pollutant emissions will be regulated under the CAA program for boilers, or under the program for CISWI units, which is generally more stringent. 

These regulations amend a rule that was finalized in March 2011, following EPA’s decision to reconsider the rule and take a voluntary remand. The current revisions address certain definitions used to determine which CAA program applies to particular categories of biomass units, and will increase the rule's flexibility, address concerns raised by stakeholders following issuance of the 2011 rule, and facilitate use of many forms of biomass as a fuel. At the time of writing, the final rules have not been published in the Federal Register, but are expected shortly.

The revised NHSM regulations expand the range of biomass fuels excluded from the definition of solid waste, allowing units that burn such fuels to be regulated under the boiler rule, rather than the CIWSI rule. These fuels, now falling within the definition of  “clean cellulosic biomass,” are: agriculture-derived biomass, other crop residues (including vines, orchard trees, hulls, and seeds), and other biomass crops used for the production of cellulosic biofuels, hogged fuel, untreated wood pallets, wood pellets and wood debris from urban areas. These fuels are not considered solid waste unless they have been discarded prior to being burned as fuel.  EPA notes that in spite of this expanded list of fuels specified under the definition of clean cellulosic biomass, the list remains illustrative and not exhaustive.

The rule adds several additional specific types of fuel that are categorically-excluded from the definition of solid waste when burned in combustion units, so that these combustion units will be regulated as boilers under the boiler rule, rather than incinerators under the CISWI rule.  These categorically excluded materials include resonated wood, a category that has been expanded to include “off-specification resonated wood products that do not meet a manufacturing quality or standard.” Also included are dewatered pulp and paper sludges, which are generated and burned in significant quantities on-site by pulp and paper mills, provided that management of such dewatered residuals preserves the meaningful heating value of the materials. Units that burn these categorically excluded materials will not need to meet further site-by-site criteria to demonstrate that they are not solid waste.

These regulatory changes are of particular interest in light of EPA’s establishment of more stringent emissions limitations for hydrochloric acid and mercury emitted from biomass-fired solid waste incinerators. Biomass-specific subcategories in the new boiler rule remain the same as those in the final March 2011 rule, although many of the specific emission limits have been adjusted based on additional data received by EPA in the intervening months.

The changes create a strong incentive for many companies to discontinue use of coal as a boiler fuel and to switch to cleaner biomass or natural gas. Although very low natural gas prices caused by the development of domestic shale oil and gas resources will continue to pose a significant deterrent to use of biomass and coal alike, biomass will remain the fuel of choice for many companies with significant available biomass resources. Companies that will be required to install emissions control equipment for coal-fired boilers may consider conversion of those boilers to biomass only, or replacement with natural gas-fired boilers coupled with gasification processes for biomass use.

Gasified biomass will command a premium in California markets due to California's economy-wide cap-and-trade program for greenhouse gases (GHG) and regulation of GHG emission increases under emerging federal programs. Moreover, utilities in California and elsewhere can comply with renewable portfolio standard obligations using gasified biomass to generate electricity.

Authors: Robert B. McKinstry Jr.
Partner, Ballard Spahr Environment and Natural Resources Group and Energy and Project Finance Group
Michael C. Duffy
Associate, Ballard Spahr Environment and Natural Resources Group