DAR File No. 41822

Environmental Quality, Air Quality

Rule R307-352

Metal Container, Closure, and Coil Coatings

Notice of Proposed Rule

(Amendment)

DAR File No.: 41822
Filed: 06/14/2017 04:17:33 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The amendments to this rule strengthen the area source coating rules. These amendments will help further reduce Volatile Organic Compound (VOC) emissions and will be part of the upcoming Serious PM2.5 State Implementation Plan (SIP).

Summary of the rule or change:

The applicability section is being amended from "potential to emit 2.7 tons per year or more of VOC" emissions to an application-based threshold of "a combined 20 gallons or more of coating products and associated solvents per year." Other changes include added definitions and a new recordkeeping section.

Statutory or constitutional authorization for this rule:

• Section 19-2-104

Anticipated cost or savings to:

the state budget:

There will be no impact on the state budget because the only substantive change to the rule that could result in costs for the regulated party is the change in the applicability threshold. The state would likely have already fallen under the prior rule applicability threshold. Therefore, there are no added costs.

local governments:

There will be no impact on local governments because the only substantive change to the rule that could result in costs for the regulated party is the change in the applicability threshold. The local governments would likely have already fallen under the prior rule applicability threshold. Therefore, there are no added costs.

small businesses:

There will be an impact on small businesses because the new rule applicability threshold will cause several small businesses to be regulated by the rule that were not regulated previously. The cost to these businesses will depend on how much material is used. These businesses will pay an estimated $3,369 per ton of VOC emissions removed from the air. The Division of Air Quality (DAQ) has considered methods of reducing the negative fiscal impact of the rule on small businesses in accordance with Subsection 63G-3-301(6) but cannot establish less stringent requirements, schedules, or deadlines; simplify compliance or reporting requirements; replace design standards with performance standards; or exempt small businesses from the proposed rule. This is because the rule is required by federal law to satisfy the Clean Air Act requirement to implement Best Available Control Measures in the manner prescribed by the PM2.5 Implementation Rule, See 42 U.S.C. 7513a (b)(1) and 40 CFR 51.1010(a)(1) through (5). The rule also helps prevent future violations of federal air quality standards. Although the rule is required to help prevent future air quality violations and comply with federal law, DAQ has taken steps to reduce the negative fiscal impact the rule may have on small businesses. The rule provides regulated sources with flexibility and potential cost saving alternatives in regard to compliance. This includes a vapor pressure limit, instead of a density-based limit, for solvents. The vapor pressure limit gives businesses greater flexibility as to the types of solvents they may use. The rule also includes the option to use an add-on control device that can be used as an alternative to meeting the content limits in the rule. These provisions give businesses flexibility to comply with the rule in the way that makes the most sense for them.

persons other than small businesses, businesses, or local governmental entities:

Persons other than small businesses, businesses, or local government entities will not be impacted by this rule because the rule applicability threshold is set at a level that excludes hobbyists and other people that are not businesses or governments.

Compliance costs for affected persons:

The compliance cost for people who are affected by the rule will be about $3,369 per ton of VOC removed from the air.

Comments by the department head on the fiscal impact the rule may have on businesses:

I. WHETHER A FISCAL IMPACT TO BUSINESS IS EXPECTED AS A RESULT OF THE PROPOSED RULE AND, IF SO, A DESCRIPTION OF WHY: The proposed rule may result in a fiscal impact to some businesses because the rule amendment changes the applicability threshold. The threshold is being changed from the "potential to emit 2.7 tons or more of VOC" to the "use of a combined 20 gallons or more" of product. This new threshold is meant to ensure that all businesses that use coatings for metal containers, closures, and coils are regulated by Rule R307-352. Businesses that already have the potential to emit 2.7 tons or more of VOC are not impacted by the rule amendment. Therefore, the businesses most likely impacted by this amendment are small businesses that did not previously meet the applicability threshold of the rule. II. AN ESTIMATE OF THE TOTAL NUMBER OF BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: The number of businesses that are impacted by this rule amendment is difficult to predict because there is no data on the quantity of regulated product used by each business in the relevant areas. The rule generally covers businesses that have the following NAICS Codes: 332996, Fabricated Pipe and Pipe Fitting Manufacturing and 332439, Other Metal Container Manufacturing. The Division used data from Utah's FirmFind database to determine that there are 18 total businesses and 16 small businesses that have these codes. Of those businesses, 15 may be impacted by the rule amendment. III. AN ESTIMATE OF THE SMALL BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: The amendments to this rule will likely only have a fiscal impact on small businesses. Big businesses use more product and are already regulated under the current version of the rule. There are 15 small businesses that have been identified by DAQ as businesses that may be fiscally impacted by this rule amendment. IV. A DESCRIPTION OF THE SOURCES OF COST OR SAVINGS AS WELL AS THE EXPECTED NET SAVINGS OR COST TO BUSINESS ESTABLISHMENTS AND SMALL BUSINESS ESTABLISHMENTS AS A RESULT OF THE PROPOSED RULE OVER A ONE-YEAR PERIOD, IDENTIFYING ONE-TIME AND ONGOING COSTS: The rule amendment potentially impacts businesses that apply between 20 and approximately 1,543 gallons of regulated product annually. After speaking with industry experts, DAQ has determined that the source of the cost is an average $5 per gallon difference between compliant and non-compliant products. This means that businesses impacted by the rule will spend between $100 and $7,715 annually to comply with the rule. Most of the businesses impacted by the rule will be closer to the 100 dollar amount on the spectrum. This is because most of the businesses that are impacted by the amendment are small businesses with between 1 and 10 employees. They do not use large quantities of product. It is important to note that many large businesses that are closer to the 1,543 gallon threshold will likely not be impacted by the rule. This is because they may already be required to comply with the rule based on the fact that they have the potential to emit over 2.7 tons of VOC emissions. Some of the small businesses may also already be using compliant coatings and will not have any additional costs as a result of the rule amendment. Based on the 15 businesses identified by DAQ from the FirmFind database, the aggregate annual fiscal impact of the rule on all businesses in Utah will range between $1,500 and $115,725. Once again, the total cost will fall toward the lower end of the spectrum ($1,500) because of the size of the businesses and the likelihood that large businesses are already complying with the rule. These figures represent the continuing annual costs to businesses. There are no one-time costs associated with the rule amendment. V. DEPARTMENT HEAD?S COMMENTS ON THE ANALYSIS: The above analysis represents DAQ's best estimate as to the fiscal impact this rule amendment will have on businesses. If a company uses a greater quantity of product, then the rule amendment will cause a more significant fiscal impact. EPA has estimated the total cost of this type of regulation to be $3,369 per ton of VOC emissions removed from the atmosphere. The EPA considers this cost to be reasonable in the context of implementing Best Available Control Measures (BACM), as required by the Clean Air Act for Serious nonattainment areas.

Alan Matheson, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Environmental Quality
Air QualityRoom Fourth Floor
195 N 1950 W
SALT LAKE CITY, UT 84116-3085

Direct questions regarding this rule to:

• Ryan Stephens at the above address, by phone at 801-536-4419, by FAX at 801-536-0085, or by Internet E-mail at rstephens@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

08/15/2017

Interested persons may attend a public hearing regarding this rule:

• 07/27/2017 01:00 PM, DEQ Bldg, 195 N 1950 W, DEQ Board Room, Salt Lake City, UT

This rule may become effective on:

08/22/2017

Authorized by:

Bryce Bird, Director

R307. Environmental Quality, Air Quality.

R307-352. Metal Container, Closure, and Coil Coatings.

R307-352-1. Purpose.

The purpose of this rule is to reduce volatile organic compound (VOC) emissions from the coating of metal containers, closures and coils[, cans, pails, and lids] in the manufacturing or reconditioning process.

 

R307-352-2. Applicability.

R307-352 applies to [sources]metal container, closure and coil coating operations and related cleaning activities that use a combined 20 gallons or more of coating products and associated solvents per year and are located in Box Elder, Cache, Davis, Salt Lake, Tooele, Utah and Weber counties[that have the potential to emit 2.7 tons per year or more of VOC, including related cleaning activities].

 

R307-352-3. Definitions.

The following additional definitions apply to R307-352:

["Coating" means a protective, functional or decorative film applied in a thin layer to a surface.]"As applied" means the volatile organic compound and solids content of the finishing material that is actually used for coating the substrate. It includes the contribution of materials used for in-house dilution of the finishing material.

"End sealing compound" means a compound which is coated onto can ends and which functions as a gasket when the end is assembled onto the can.

"Exterior body spray" means a coating sprayed on the exterior of the container body to provide a decorative or protective finish.

"Interior body spray" means a coating sprayed on the interior of the [can]container body to provide a protective film between the product and the can.

"Metal container or closure coating" means any coating applied to either the interior or exterior of formed metal cans, pails, lids or crowns or flat metal sheets which are intended to be formed into cans, pails, lids or crowns.

"Overvarnish" means a coating applied directly over a design coating to reduce the coefficient of friction, to provide gloss , and to protect the finish against abrasion and corrosion.

"Reconditioned[pails or lids]" means any metal container which is reused, recycled or remanufactured.

"Three-piece can [side-seam ]coating" means a coating sprayed on the exterior and/or interior of a welded, cemented or soldered seam to protect the exposed metal.

"Two-piece can exterior[-end] coating" means a coating applied to the exterior bottom end of a can to reduce the coefficient of friction and to provide protection to the metal.

 

R307-352-4. VOC Content Limits.

[Each]No owner or operator shall [not ]apply coatings with a VOC content [in excess of]greater than the amounts specified in Table 1 [or shall], unless the owner or operator uses an add-on control device as specified in R307-352-6.

 

TABLE 1

METAL CONTAINER AND CLOSURE COIL COATING LIMITATIONS
(values in pounds VOC per gallon of coating, minus water and
exempt solvents (compounds not classified as VOC
as defined in R307-101-2), as applied)

C[OATING]oating C[ATEGORY]ategory           VOC C[ONTENT]ontent L[IMITS]imits (lb/gal)



CANS



Sheet basecoat (interior and exterior)

and overvarnish                                        1.9



Two-piece can exterior basecoat,

overvarnish, and end coating                           2.1



Interior body spray



     Two-piece cans                                    3.5



     Three-piece cans                                  3.0



Three-piece can side seam spray                        5.5

End sealing compound:  Food cans, non-food

cans, and beverage cans                                0.1

Exterior body spray                                    3.5



PAILS AND LIDS



Body spray



     Reconditioned interior                            4.2



     Reconditioned exterior                            3.5



     New interior                                      3.5



     New exterior                                      2.8



End sealing compound                                   0.5



Inks, all applications                                 2.5



Coil



  

Coil coating                                           1.7

 

R307-352-5. Work Practices[ and Recordkeeping].

(1) The owner or operator shall:

(a) Store all VOC-containing coatings, thinners, and cleaning materials in closed containers;

(b) Minimize spills of VOC-containing coatings, thinners, and cleaning materials;

(c) Clean up spills immediately;

(d) Convey any coatings, thinners, and cleaning materials in closed containers or pipes;

(e) Close mixing vessels that contain VOC coatings and other materials except when specifically in use; and

(f) Minimize usage of solvents during cleaning of storage, mixing, and conveying equipment.

(2) No person shall apply any coating unless the coating application method [achieves a demonstrated]has a transfer efficiency of at least 65%[transfer efficiency].

The following applications achieve a minimum of 65% transfer efficiency and shall be operated in accordance with the manufacturers specifications:

(a) Electrostatic application;

(b) Flow coat;

(c) Roll coat;

(d) Dip coat;

(e) High-volume, low-pressure (HVLP) spray;

(f) Hand application methods;

(g) Printing techniques; or

(h) Other application method capable of achieving at least 65% transfer efficiency, as certified by the manufacturer.

(3) [All persons shall perform solvent cleaning operations with cleaning material having VOC content (excluding water and solvents exempt from the definition of volatile organic compounds found in R307-101-2) of 0.21 lb/gallon or less]Solvent cleaning operations shall be performed using cleaning materials having a VOC composite vapor pressure no greater than 1 mm Hg at 20 degrees Celsius, unless an add-on control device is used as specified in R307-352-6.

[(4) All sources subject to R307-352 shall maintain records demonstrating compliance with R307-352-4 and R307-352-5.

(a) Records shall include, but not be limited to, inventory and product data sheets of all coatings and solvents subject to R307-352.

(b) These records shall be made available to the director upon request.]

 

R307-352-6. Add-On Controls Systems Operations.

(1) If an add-on control system is used, [T]the owner or operator shall install and maintain [an incinerator, carbon adsorption, or any other]the add-on emission control system[, provided that the emission control system is operated and maintained] in accordance with the manufacturer recommendations [in order to]and maintain [at least ]90% or greater capture and control efficiency. [Determination of]The overall capture and control efficiency shall be determined using EPA approved methods, as follows.

(a) The capture efficiency of a VOC emission control system's VOC collection device shall be determined according to EPA's "Guidelines for Determining Capture Efficiency," January 9, 1995 and 40 CFR Part 51, Appendix M, Methods 204-204F, as applicable.

(b) The control efficiency of a VOC emission control system's VOC control device shall be determined using test methods in Appendices A-1, A-6, and A-7 to 40 CFR Part 60, for measuring flow rates, total gaseous organic concentrations, or emissions of exempt compounds, as applicable.

(c) An alternative test method may be substituted for the preceding test methods after review and approval by the EPA Administrator.

[(2) The owner or operator of a control system shall provide documentation that the emission control system will attain the requirements of R307-352-6(1).

(3) The owner or operator shall maintain records of key system parameters necessary to ensure compliance with R307-352-6. Key system parameters may include, but are not limited to, temperature, pressure and flow rates. Operator inspection schedule, monitoring, recordkeeping, and key parameters shall be in accordance with the manufacturer's recommendations, and as required to demonstrate operations are providing continuous emission reduction from the source during all periods that the operations cause emissions from the source.

(4) The owner or operator shall maintain for a minimum of two years records of operating and maintenance sufficient to demonstrate that the equipment is being operated and maintained in accordance with the manufacturer recommendations.]

 

R307-352-7. Recordkeeping.

(1) The owner or operator shall maintain records of the following:

(a) Records that demonstrate compliance with R307-352. Records shall include, but are not limited to, inventory and product data sheets of all coatings and solvents subject to R307-352.

(b) If an add-on control device is used, records of key system parameters necessary to ensure compliance with R307-352-6.

(i) Key system parameters shall include, but are not limited to, temperature, pressure, flow rates, and an inspection schedule.

(ii) Key inspection parameters shall be in accordance with the manufacturer's recommendations, and as required to demonstrate operations are providing continuous emission reduction from the source during all periods that the operations cause emissions from the source.

(2) All records shall be maintained for a minimum of 2 years.

(3) Records shall be made available to the director upon request.

 

KEY: air pollution, emission controls, metal containers, coil coatings

Date of Enactment or Last Substantive Amendment: [December 1, 2014]2017

Authorizing, and Implemented or Interpreted Law: 19-2-104(1)(a)