Green on the Hill: EPA Rules the Day

By Stephen Barlas | February 1, 2011

Category:
Green on the hill

Companies across a very wide swath of industrial sectors would be affected by an Environmental Protection Agency (EPA) proposed rule tightening refrigerant leak detection rates for commercial and industrial cooling units. Upcoming changes would affect many types of businesses, from manufacturers in the pharmaceutical, frozen food, dairy product, and petrochemicals industries to smaller businesses using refrigerated warehousing, such as supermarkets and warehouse clubs, to owners of air-conditioned buildings.

The leak rate requirements have been in place since 1990. They were instituted to reduce emissions of Class 1 and Class II ozone-depleting refrigerants into the atmosphere and encourage their recycling. The current Section 608 rule (of the Clean Air Act Amendments of 1990) sets annual leak trigger rates of 35 percent for industrial process refrigeration and commercial refrigeration appliances, and 15 percent for commercial comfort cooling appliances.

Companies with appliances having annual leak rates that exceed those triggers must take certain steps, including repair or replacement of the unit, verification of repairs, and recordkeeping. The proposed rule the EPA issued on Dec. 15, 2010 would reduce the leak repair trigger rate from 15 to 10 percent for comfort cooling appliances, and from 35 to 20 percent for commercial refrigeration appliance and industrial process refrigeration appliances.

EPA Boosts Biomass in Facilities

Companies considering replacing coal- and oil-burning energy systems with biomass just got a boost from the EPA.

The agency said it would delay for three years a decision on whether companies that build biomass-burning facilities to generate energy must obtain a permit prior to that construction. A requirement to obtain such a permit was to have gone into effect Jan. 2, 2011. After that date, companies owning large, stationary sources of air emissions would have had to obtain what is called a Prevention of Significant Deterioration or PSD permit if greenhouse gas emissions, when added to other Clean Air Act emissions such as nitrogen oxide or toxic chemicals, pushed the plant over a threshold. Starting July 1, 2011, companies would have had to obtain Title V permits if GHG emissions alone, including from biomass, exceeded certain limits.

Both those deadlines now go out the window, as they apply to biomass, at least for three years. EPA Administrator Lisa Jackson erased the biomass permitting requirements under pressure from the forestry industry and their Democratic allies in Congress. Obtaining permits was to be required originally as part of the EPA’s suite of actions aimed at reducing GHG emissions from industrial and commercial sites.

A number of U.S. manufacturing and energy companies have either built or are considering biomass facilities. The Southern Company, a major power producer, has already begun construction of biomass-to-electricity plants in Texas and will do so elsewhere in the South, including converting existing coal facilities.

Dow Corning announced last summer it would build a biomass plant in Michigan to produce energy and steam. “Our biomass project is still on the table,” said Jarrod Erpelding, a Dow Corning spokesperson. “It doesn’t appear that this ruling accelerates our timeline at all. We’re expecting to have final feedback on environmental permits by the end of the quarter.”

EPA Considering Restrictions on Some Foam Building Materials

A popular green building material is under fire at the EPA. Foams that contain hexabromocyclododecane (HBCD) were the subject of a hearing in early January.

Expanded polystyrene (EPS) foam and extruded polystyrene (XPS) foam are used primarily for thermal insulation boards in buildings. Those foam insulation products, which have considerable energy-saving properties, are used in “green roofs” for commercial and industrial buildings, radiant floor heating systems, and ultra-energy-efficient buildings.

HBCD is a suspected bad actor, and the EPA is moving forward under the Toxic Substances Control Act to perhaps ban use of the chemical. The agency issued an action plan last April and held a meeting on Jan. 5 in Washington to get industry input.

The problem is that there is no current substitute for HBCD in EPS and XPS. This raises concerns that if those construction materials are no longer available, their substantial green values will disappear along with them.

From “Green Manufacturer Brief”

In December 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Jobs Creation Act of 2010. In doing so, he also extended provisions that benefit the alternative energy manufacturing sector and those companies interested in incorporating the technologies.

Treasury PTC, Grant Program Extended

One program that has been extended for a year is the Section 1603 Treasury grant program. Under the program, companies that are installing solar, wind, or other alternative energy sources can choose either a federal production tax credit (PTC) or a cash grant that covers as much as 30 percent of the installation cost.

According to the eligibility guidelines, a property must be placed in service in 2009, 2010, or 2011 or placed in service after 2011 but only if construction of the property began during 2009, 2010, or 2011. Click for further guidance, checklists, and applications.

Biodiesel Tax Credit Reinstated

The biodiesel tax incentive that expired at the end of 2009 has been reinstated retroactively through 2011. The act provides a $1 per gallon production tax credit for biodiesel and biodiesel mixtures as well as a $0.10 per gallon agri-biodiesel producer credit.

According to biodiesel trade groups such as the National Biodiesel Board and other alternative energy groups, including the Renewable Energy Group, this program will restore competitive pricing for biodiesel in the U.S. marketplace as well as create more green jobs.

Diesel Emissions Reductions Act Becomes Law

In other diesel news, on January 5, President Obama signed into law the Diesel Emissions Reduction Act. The diesel program, created in 2005 through the cooperation of industrial, environmental, governmental, and other groups, has as its goal the reduction of diesel emissions in older diesel engines.

This will be accomplished through a combination of federal and state loan, grant, and rebate programs. The legislation authorizes the appropriation of $100 million annually for fiscal years 2012 through 2016. Read the text of the act.

Department of Energy Funding

Pending Deals

The DOE has made several announcements regarding funding of specific alternative energy projects:

Done Deals

The DOE has finalized loan guarantees for these alternative energy projects:

  • A partial loan guarantee of $1.3 billion to support the world’s largest wind farm. The 845-megawatt wind farm, the Caithness Shepherds Flat project, will be located in eastern Oregon. Additional information.
  • A $1.45 billion loan guarantee for Abengoa Solar’s Solana project, the world’s largest parabolic trough concentrating solar plant. It will be built in Arizona and will be able to store the energy it generates. More information.
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