[Federal Register Volume 83, Number 231 (Friday, November 30, 2018)]
[Proposed Rules]
[Pages 61574-61585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26083]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2018-0195; FRL-9987-37-OAR]
RIN 2060-AU00


Standards of Performance for New Residential Wood Heaters, New 
Residential Hydronic Heaters and Forced-Air Furnaces

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: In this action, the EPA proposes to amend the 2015 New Source 
Performance Standards (NSPS) for new residential hydronic heaters and 
new forced-air furnaces by adding a two-year ``sell-through'' period 
for all affected new hydronic heaters and forced-air furnaces that are 
manufactured or imported before the May 2020 compliance date to be sold 
at retail through May 2022. This will allow retailers additional time, 
after the May 2020 effective date of the ``Step 2'' standards, for the 
sale of ``Step 1'' compliant hydronic heaters and forced-air furnaces 
remaining in inventory. The EPA is also taking comment on whether a 
sell-through period for all affected new residential wood heaters is 
appropriate following the May 2020 compliance date and, if so, how long 
a sell-through period is needed and why. In addition, this action is 
taking comment on whether the current minimum pellet fuel requirements 
should be retained and, if so, whether they should be revised.

DATES: 
    Comments. Comments must be received on or before January 14, 2019. 
Under the Paperwork Reduction Act (PRA), comments on the information 
collection provisions are best assured of consideration if the Office 
of Management and Budget (OMB) receives a copy of your comments on or 
before December 31, 2018.
    Public Hearing. The EPA will hold a public hearing on December 17, 
2018, in Washington, DC. Please refer to the FOR FURTHER INFORMATION 
CONTACT section for information on registering for the hearing and the 
SUPPLEMENTARY INFORMATION section for additional information on the 
public hearing.

ADDRESSES: Comments. Submit your comments, identified by Docket ID No. 
EPA-HQ-OAR-2018-0195, at https://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. See SUPPLEMENTARY 
INFORMATION for details about how the EPA treats submitted comments. 
Regulations.gov is our preferred method of receiving comments. However, 
the following other submission methods are also accepted:
     Email: [email protected]. Include Docket ID No. EPA-
HQ-OAR-2018-0195 in the subject line of the message.
     Fax: (202) 566-9744. Attention Docket ID No. EPA-HQ-OAR-
2018-0195.
     Mail: To ship or send mail via the United States Postal 
Service, use the following address: U.S. Environmental Protection 
Agency, EPA Docket Center, Docket ID No. EPA-HQ-OAR-2018-0195, Mail 
Code 28221T, 1200 Pennsylvania Avenue NW, Washington, DC 20460.
     Hand/Courier Delivery: Use the following Docket Center 
address if you are using express mail, commercial delivery, hand 
delivery, or courier: EPA Docket Center, EPA WJC West Building, Room 
3334, 1301 Constitution Avenue NW, Washington, DC 20004. Delivery 
verification signatures will be available only during regular business 
hours.
    Public Hearing. The hearing will be held at EPA Headquarters, EPA 
WJC East Building, Room 1117A&B, 1201 Constitution Avenue NW, 
Washington, DC 20004. The hearing will convene at 8:00 a.m. local time 
and conclude at 6:00 p.m. local time. The EPA will end the hearing two 
hours after the last registered speaker has concluded their comments 
but no later than 6:00 p.m. local time. Two 15-minute breaks and a 
lunch break will be scheduled as time will allow depending on the 
number of registered speakers.
    Because this hearing is being held at a U.S. government facility, 
individuals planning to attend the hearing should be prepared to show 
valid picture identification to the security staff in order to gain 
access to the meeting room. Please note that the REAL ID Act, passed by 
Congress in 2005, established new requirements for entering federal 
facilities. For purposes of the REAL ID Act, the EPA will accept 
government-issued IDs, including driver's licenses from the District of 
Columbia and all

[[Page 61575]]

states and territories except from American Samoa. If your 
identification is issued by American Samoa, you must present an 
additional form of identification to enter the federal building where 
the public hearing will be held. Acceptable alternative forms of 
identification include: federal employee badges, passports, enhanced 
driver's licenses, and military identification cards. For additional 
information for the status of your state regarding REAL ID, go to: 
https://www.dhs.gov/real-id-frequently-asked-questions. Any objects 
brought into the building need to fit through the security screening 
system, such as a purse, laptop bag, or small backpack. Demonstrations 
will not be allowed on federal property for security reasons.

FOR FURTHER INFORMATION CONTACT: For questions about this proposed 
action, contact Ms. Amanda Aldridge, Outreach and Information Division, 
Mail Code: C304-05, Office of Air Quality Planning and Standards, U.S. 
Environmental Protection Agency, Research Triangle Park, North Carolina 
27711; telephone number: (919) 541-5268; fax number: (919) 541-0072; 
and email address: [email protected]. For information about the 
applicability of the NSPS to a particular entity, contact Dr. Rafael 
Sanchez, Office of Enforcement and Compliance Assurance, U.S. 
Environmental Protection Agency, EPA WJC South Building (Mail Code 
2227A), 1200 Pennsylvania Avenue NW, Washington DC 20460; telephone 
number: (202) 564-7028; and email address: [email protected].
    Public Hearing. The EPA will begin pre-registering speakers for the 
hearing upon publication of this document in the Federal Register. To 
register to speak at the hearing, please use the online registration 
form available at https://www.epa.gov/residential-wood-heaters, or 
contact Regina Chappell at (919) 541-3650 to register to speak at the 
hearing. The last day to pre-register to speak at the hearing will be 
December 13, 2018. On December 13, 2018, the EPA will post at https://www.epa.gov/residential-wood-heaters a general agenda for the hearing 
that will list pre-registered speakers in approximate order. The EPA 
will make every effort to follow the schedule as closely as possible on 
the day of the hearing; however, please plan for the hearing to run 
either ahead of schedule or behind schedule. Additionally, requests to 
speak will be taken the day of the hearing at the hearing registration 
desk. The EPA will make every effort to accommodate all speakers who 
arrive and register, although preferences on speaking times may not be 
able to be fulfilled.

SUPPLEMENTARY INFORMATION: Public Hearing. Each commenter will have 5 
minutes to provide oral testimony. The EPA encourages commenters to 
provide the EPA with a copy of their oral testimony electronically (via 
email) or in hard copy form.
    The EPA may ask clarifying questions during the oral presentations 
but will not respond to the presentations at that time. Written 
statements and supporting information submitted during the comment 
period will be considered with the same weight as oral comments and 
supporting information presented at the public hearing. Commenters 
should notify Regina Chappell if there are special needs related to 
providing comments at the hearings. Verbatim transcripts of the 
hearings and written statements will be included in the docket for this 
rulemaking.
    Please note that any updates made to any aspect of the hearing will 
be posted online at https://www.epa.gov/residential-wood-heaters. While 
the EPA expects the hearing to go forward as set forth above, please 
monitor our website or contact Regina Chappell at (919) 541-3650 or 
[email protected] to determine if there are any updates. The EPA 
does not intend to publish a document in the Federal Register 
announcing updates.
    The EPA will not provide audiovisual equipment for presentations. 
Any media presentations should be submitted to the public docket at 
https://www.regulations.gov/, identified by Docket ID No. EPA-HQ-OAR-
2018-0195. The EPA must receive comments on the proposed action no 
later than January 14, 2019.
    If you require the service of a translator or special 
accommodations such as audio description, please pre-register for the 
hearing and describe your needs by December 13, 2018. We may not be 
able to arrange accommodations without advanced notice.
    Docket. The EPA has established a docket for this rulemaking under 
Docket ID No. EPA-HQ-OAR-2018-0195. All documents in the docket are 
listed in the Regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material, is 
not placed on the internet and will be publicly available only in hard 
copy. Publicly available docket materials are available either 
electronically in Regulations.gov or in hard copy at the EPA Docket 
Center, Room 3334, EPA WJC West Building, 1301 Constitution Avenue NW, 
Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding legal holidays. The telephone 
number for the Public Reading Room is (202) 566-1744, and the telephone 
number for the EPA Docket Center is (202) 566-1742.
    Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR-
2018-0195. The EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
online at https://www.regulations.gov, including any personal 
information provided, unless the comment includes information claimed 
to be CBI or other information whose disclosure is restricted by 
statute. Do not submit information that you consider to be CBI or 
otherwise protected through https://www.regulations.gov or email. This 
type of information should be submitted by mail as discussed below.
    The EPA may publish any comment received to its public docket. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the Web, cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.
    The https://www.regulations.gov website is an ``anonymous access'' 
system, which means the EPA will not know your identity or contact 
information unless you provide it in the body of your comment. If you 
send an email comment directly to the EPA without going through http://www.regulations.gov, your email address will be automatically captured 
and included as part of the comment that is placed in the public docket 
and made available on the internet. If you submit an electronic 
comment, the EPA recommends that you include your name and other 
contact information in the body of your comment and with any digital 
storage media you submit. If the EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, the 
EPA may not

[[Page 61576]]

be able to consider your comment. Electronic files should not include 
special characters or any form of encryption and be free of any defects 
or viruses. For additional information about the EPA's public docket, 
visit the EPA Docket Center homepage at http://www.epa.gov/dockets.
    Submitting CBI. Do not submit information containing CBI to the EPA 
through http://www.regulations.gov or email. Clearly mark the part or 
all of the information that you claim to be CBI. For CBI information on 
a digital storage media that you mail to the EPA, mark the outside of 
the digital storage media as CBI and then identify electronically 
within the digital storage media the specific information that is 
claimed as CBI. In addition to one complete version of the comments 
that includes information claimed as CBI, you must submit a copy of the 
comments that does not contain the information claimed as CBI for 
inclusion in the public docket. If you submit any digital storage media 
that does not contain CBI, mark the outside of the digital storage 
media clearly that it does not contain CBI. Information not marked as 
CBI will be included in the public docket and the EPA's electronic 
public docket without prior notice. Information marked as CBI will not 
be disclosed except in accordance with procedures set forth in 40 Code 
of Federal Regulations (CFR) part 2. Send or deliver information 
identified as CBI only to the following address: OAQPS Document Control 
Officer (C404-02), OAQPS, U.S. Environmental Protection Agency, 
Research Triangle Park, North Carolina 27711, Attention Docket ID No. 
EPA-HQ-OAR-2018-0195.
    Preamble Acronyms and Abbreviations. The Agency uses multiple 
acronyms and terms in this preamble. While this may not be an 
exhaustive list, to ease the reading of this preamble and for reference 
purposes, the following terms and acronyms are defined here:

BSER Best System of Emissions Reduction
CAA Clean Air Act
CBI Confidential Business Information
CFR Code of Federal Regulations
CO Carbon Monoxide
EAV Equivalent Annual Value
EPA U.S. Environmental Protection Agency
EJ Environmental Justice
FR Federal Register
HAP Hazardous Air Pollutant(s)
HPBA Hearth, Patio and Barbecue Association
NAICS North American Industry Classification System
NOX Nitrogen Oxides
NSPS New Source Performance Standards
NTTAA National Technology Transfer and Advancement Act of 1995
OAQPS Office of Air Quality Planning and Standards (U.S. EPA)
OECA Office of Enforcement and Compliance Assurance (U.S. EPA)
OMB Office of Management and Budget
PM Particulate Matter
PM2.5 Particulate Matter with an aerodynamic diameter of 
2.5 micrometers or less (``fine particles'')
PV Present Value
R&D Research and Development
RIA Regulatory Impact Analysis
RTC Response to Comments
tpy tons per year
U.S. United States
U.S.C. United States Code
UMRA Unfunded Mandates Reform Act
VOC Volatile Organic Compound
Wood heaters Refers to all appliances covered in 40 CFR part 60, 
subpart AAA--woodstoves & pellet stoves

    Organization of this Document. The information presented in this 
preamble is organized as follows:

I. General Information
    A. Executive Summary
    B. Does this action apply to me?
    C. How do I obtain a copy of this document and other related 
information?
II. Background
    A. Statutory Background
    B. Regulatory Background
III. Proposed Action
IV. Request for Comments on Wood Heaters (40 CFR Part 60, Subpart 
AAA)
V. Request for Comments on Pellet Fuel Requirements
VI. Impacts of This Proposed Rule
    A. What are the air impacts?
    B. What are the energy impacts?
    C. What are the cost savings?
    D. What are the economic and employment impacts?
    E. What are the forgone benefits of the proposed rule?
VII. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use
    J. National Technology Transfer and Advancement Act (NTTAA) and 
1 CFR part 51
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. General Information

A. Executive Summary

    On March 16, 2015 (80 FR 13672), the Environmental Protection 
Agency (EPA) finalized the NSPS for new residential wood heaters, new 
residential hydronic heaters, and new forced-air furnaces. For this 
action, the term wood heaters refers to all appliances covered in 40 
CFR part 60, subpart AAA, and the terms hydronic heaters and forced-air 
furnaces refer to appliances covered in 40 CFR part 60, subpart QQQQ. 
Also, for this action, the term wood heating devices refers to all 
units regulated by the 2015 NSPS (40 CFR part 60, subparts AAA and 
QQQQ).
    In this action, the EPA proposes to amend 40 CFR part 60, subpart 
QQQQ of the 2015 NSPS by adding a two year ``sell-through'' period for 
retailers to sell new hydronic heaters and forced-air furnaces that are 
manufactured or imported before the May 2020 compliance date and are 
compliant with the ``Step 1'' standards. This will allow retailers 
additional time after the May 2020 effective date of the ``Step 2'' 
standard, to sell ``Step 1'' compliant hydronic heaters and forced-air 
furnaces remaining in inventory. The EPA is also taking comment on 
whether a sell-through period for retailers to sell new residential 
wood heaters (40 CFR part 60, subpart AAA) is appropriate following the 
May 2020 compliance date and, if so, how long a sell-through period is 
needed and why. In addition, this action is taking comment on whether 
the current minimum pellet fuel requirements should be retained or 
revised. In the 2015 Final Rule Preamble (at 80 FR at 13682/2), the EPA 
stated: ``For pellet-fueled appliances, operation according to the 
owner's manual includes operation only with pellet fuels that are 
specified in the owner's manual.''
    The Agency estimated the cost and benefits of the proposed rule by 
developing a memorandum (supplemental RIA) \1\ to supplement the 
Regulatory Impact Analysis prepared for the 2015 Final Rule. This 
memorandum acknowledges uncertainty driven by consumer, manufacturer, 
and retailer response to this proposed ``sell-through'' period and 
evaluates three scenarios. Section VII.A of this preamble summarizes 
the information in that supplemental RIA. Given the nature of this 
rule, costs are presented

[[Page 61577]]

here as the forgone benefits of forgone emission reductions. We 
estimate the average annual cost savings to be $0.01 billion. We 
estimate the average annual forgone benefits to be $0.10 billion to 
$0.23 billion at a 3 percent discount rate and $0.09 billion to $0.21 
billion at a 7 percent discount rate. The Agency represents the 
benefits as cost savings, which the Agency estimates as the increase in 
revenues to manufacturers and retailers of affected hydronic heaters 
and forced air furnaces. Estimated costs and benefits reflect the 
average annual impacts for the 2019 to 2022 timeframe, which are the 
implementation years analyzed in the supplemental RIA. All estimates in 
the supplemental RIA reflect the primary scenario analyzed for this 
proposal (which estimates the number of affected wood heaters available 
during the sell-through period with no change in wood heater production 
as estimated in the 2015 NSPS). Results are also provided in the 
supplemental RIA for wood heaters covered by 40 CFR part 60, subpart 
AAA, which are wood heating devices not included in the proposed 2-year 
sell-through extension but for which comments are requested to 
determine if they should be.
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    \1\ U.S. EPA. Memorandum: Supplemental Regulatory Impact 
Analysis (RIA)--Estimated Cost Savings and Forgone Benefits 
Associated with the Proposed Rule, ``Standards of Performance for 
New Residential Wood Heaters, New Residential Hydronic Heaters and 
Forced-Air Furnaces.''
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B. Does this action apply to me?

    Table 1 of this preamble lists categories and entities that are the 
subject of this proposal. Table 1 is not intended to be exhaustive, but 
rather provides a guide for readers regarding the entities likely to be 
affected by this proposed action. These standards, and any changes 
considered in this rulemaking, are directly applicable to sources as a 
federal program. Other federal, state, local and tribal government 
entities are not directly affected by this action.

           Table 1--Source Categories Affected by This Action
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                                                  Examples of regulated
            Category             NAICS Code \1\          entities
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Residential Wood Heating.......          333414  Manufacturers, owners,
                                                  and operators of wood
                                                  heaters, pellet
                                                  heaters/stoves, and
                                                  hydronic heaters.
                                         333415  Manufacturers, owners,
                                                  and operators of
                                                  forced-air furnaces.
Testing Laboratories...........          541380  Testers of wood
                                                  heaters, pellet
                                                  heaters/stoves, and
                                                  hydronic heaters.
Retailers......................          423730  Warm air heating and
                                                  air-conditioning
                                                  equipment and supplies
                                                  merchant wholesalers.
------------------------------------------------------------------------
\1\ North American Industry Classification System.

C. How do I obtain a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this action is available on the internet. Following signature by the 
EPA Administrator, the EPA will post a copy of this proposed action at 
https://www.epa.gov/residential-wood-heaters/final-new-source-performance-standards-residential-wood-heaters. Following publication 
in the Federal Register, the EPA will post the Federal Register version 
of the proposal at this same website.

II. Background

A. Statutory Background

    Section 111 of the Clean Air Act (CAA) requires the EPA 
Administrator to list categories of stationary sources that, in his or 
her judgment, cause or contribute significantly to air pollution which 
may reasonably be anticipated to endanger public health or welfare. The 
EPA must then issue ``standards of performance'' for new sources in 
such source categories. The EPA has the authority to define the source 
categories, determine the pollutants for which standards should be 
developed, and identify within each source category the facilities for 
which standards of performance would be established.
    CAA section 111(a)(1) defines ``a standard of performance'' as ``a 
standard for emissions of air pollutants which reflects the degree of 
emission limitation achievable through the application of the best 
system of emission reduction which (taking into account the cost of 
achieving such reduction and any non-air quality health and 
environmental impact and energy requirement) the Administrator 
determines has been adequately demonstrated.'' This definition makes 
clear that the standard of performance must be based on controls that 
constitute ``the best system of emission reduction (BSER).'' The 
standard that the EPA develops, based on the BSER, is commonly a 
numerical emission limit, expressed as a performance level. As provided 
in CAA 111(b)(5), the EPA does not prescribe a specific technology that 
must be used to comply with a standard of performance. Rather, sources 
generally can select any measure or combination of measures that will 
achieve the emission level of the standard.
    The Residential Wood Heaters source category is different from most 
NSPS source categories in that it is for mass-produced residential 
consumer products. Thus, important elements in determining BSER include 
the costs and environmental impacts on consumers of delaying production 
while wood heating devices with those systems are designed, tested, 
field evaluated and certified.
    Section 111(b)(1)(B) of the CAA requires that the standards be 
effective upon promulgation of the NSPS. Given this statutory 
requirement, as discussed more fully in the Federal Register notice for 
the 2015 NSPS rulemaking (80 FR 13672), the EPA adopted the stepped 
(phased) approach for residential wood heaters, hydronic heaters and 
forced-air furnaces to provide sufficient implementation time for 
manufacturers and retailers to comply with Step 2 limits.

B. Regulatory Background

    Residential wood heaters were originally listed under CAA section 
111(b) in February 18, 1987 (see 52 FR 5065). The NSPS for wood heaters 
(40 CFR part 60, subpart AAA) was proposed on February 18, 1987 (see 52 
FR 4994) and promulgated on February 26, 1988 (see 53 FR 5859) (1988 
Wood Heater NSPS). The NSPS was amended in 1998 to address an issue 
related to certification testing (see 63 FR 64869).
    On February 3, 2014, the EPA proposed revisions to the NSPS (See 79 
FR 6330) and promulgated revisions on March 16, 2015 (See 80 FR 13672). 
The final 2015 NSPS updated the 1988 Wood Heater NSPS emission limits, 
eliminated exemptions over a broad suite of residential wood combustion 
devices, and updated test methods and the certification process. The 
2015 NSPS also added a new subpart (40 CFR part 60, subpart QQQQ) that 
covers new wood burning residential hydronic heaters and new forced-air 
furnaces. It also directs owners of pellet or wood chip heaters to burn 
only the fuel

[[Page 61578]]

specified in the owner's manual and that meet certain minimum 
requirements.
    As a part of the 2015 rulemaking, the EPA identified the percentage 
of wood heaters estimated to be meeting the Step 2 standards prior to 
promulgation of the 2015 NSPS as 70 percent of pellet stoves and 26 
percent of wood stoves. Similarly, 18 percent of hydronic heaters were 
meeting the Step 2 standards prior to promulgation of the 2015 NSPS, 
while the limited dataset for forced-air furnaces showed no models 
meeting the Step 2 standards prior to promulgation of the 2015 NSPS. As 
of March 20, 2018, there were a total of 78 models (44 pellet models 
and 34 crib/cord wood) that met the Step 2 standard for wood heaters 
(as required under 40 CFR 60.532(b) or 60.532(c)), nine models that met 
the Step 2 standard for hydronic heaters (as required under 40 CFR 
60.5474(a)(2) or (b)(3)) and one model that met the Step 2 standard for 
forced-air furnaces (as required under 40 CFR 60.5474(a)(6)). The 
inventory of certified models as of March 2018 is provided in the 
document titled: ``List of EPA certified Wood Heating Devices March 
2018,'' which is available in the docket and at the website https://www.epa.gov/compliance/wood-heater-compliance-monitoring-program.
    In promulgating the 2015 NSPS, the EPA took a ``stepped compliance 
approach'' in which certain ``Step 1'' standards became effective in 
May 2015 and more stringent ``Step 2'' standards would become effective 
five years later, in May 2020.
    A major component of demonstrating compliance with either Step 1 or 
Step 2 is a certification test, using an EPA approved test method, for 
a given wood heating device. Among other requirements, the emissions 
from the certification test cannot exceed the emission limit for the 
standard for which it is certifying (either Step 1 or Step 2). It is 
worth noting that, because these certification test methods were 
developed outside of the 2015 NSPS, certification test methods have 
their own requirements independent of the 2015 NSPS, such as fuel 
requirements.
    The 2015 NSPS included a sell-through provision which allowed seven 
and a half months for retailers to sell current wood heater and 
hydronic heater non-compliant inventory (Step 1 sell-through). No sell-
through provision was provided for forced-air furnaces because small 
forced-air furnaces did not have to comply with a numerical emission 
standard until May 2016, and large forced-air furnaces did not have to 
comply with a numerical emission standard until May 2017 (see 80 FR 
13682 and 13685). While manufacturers could no longer make units that 
were not certified for the Step 1 standard (after the May 2015 Step 1 
effective date), the Step 1 sell-through allowed retailers several 
months to sell their existing inventory that was not Step 1 compliant. 
The 2015 NSPS provided no such sell-through provision for the more 
stringent Step 2 standards that are currently scheduled to become 
effective in May 2020. The Step 1 and Step 2 standards are discussed 
further below.

III. Proposed Action

    In promulgating the 2015 NSPS, the EPA took a stepped compliance 
approach to implementing the emission limits for the rule. The Step 1 
standard was intended to codify emission limits that were already being 
met. For wood heaters, (40 CFR part 60, subpart AAA), the Step 1 limit 
was based on the Washington State standard that had been in effect 
since 1995 and had been met by most wood heater manufacturers. For 
hydronic heaters, the Step 1 emission limit was based on the 2010 Phase 
2 Voluntary Hydronic Heater Program. Step 1 for forced-air furnaces was 
what the EPA concluded would be immediately achievable based on a 
limited dataset.
    The Step 1 standard went into effect in May 2015, and Step 2 
becomes effective in May 2020 (see discussion at 80 FR 13676-13677). 
For the Step 1 standards, the EPA provided a ``sell-through'' period of 
seven and a half months, until December 2015, to allow retailers 
additional time after the effective date of the rule to sell the non-
compliant wood heaters and hydronic heaters remaining in inventory (see 
80 FR 13685). Specifically, the 2015 NSPS allowed non-compliant wood 
heaters and hydronic heaters manufactured before May 15, 2015, to be 
imported and/or sold at retail through December 31, 2015 (see 40 CFR 
60.532(a) and 60.5474(a)(1)).\2\ For the Step 2 standards, the EPA did 
not provide a sell-through period following the May 2020 compliance 
date. The EPA concluded at the time that the 5-year period leading up 
to the May 2020 Step 2 compliance date would provide manufacturers with 
sufficient lead time to develop, test, and certify Step 2-compliant 
wood heating devices. Meanwhile, in the time before the Step 2-
certified models were available for sale, both manufacturers and 
retailers would be able to continue making and selling Step 1-certified 
wood heating devices (see 80 FR 13676). The EPA provided further 
explanation in the 2015 Response to Comments (RTC) document (Docket ID 
EPA-HQ-OAR-2009-0734). On page 99 of the RTC, the EPA noted that the 5-
year period from 2015 to 2020 ``matches the window of time many 
manufacturers noted they would need to conduct research and development 
(R&D) and bring a new model to market,'' and on page 231 of the RTC, 
the EPA concluded that Step 2 standards provide ``appropriate lead 
times for manufacturers to redesign their model lines to accommodate 
the improved technology across multiple model lines and test, field 
evaluate, and certify new model lines.''
---------------------------------------------------------------------------

    \2\ The EPA did not provide any sell-through period for forced-
air furnaces, because the EPA determined that the requirements that 
became effective for these heaters in May 2015 (to revise the owner 
manuals, and training and marketing materials) could be accomplished 
without disrupting sales and creating undue burden on manufacturers 
or retailers. See 80 FR 13682 and 13685.
---------------------------------------------------------------------------

    Recently, the EPA has learned from manufacturers and retailers that 
a substantial number of retailers are already reducing or even ending 
their purchases of Step 1-certified wood heating devices from the 
manufacturers because they are concerned that they will not be able to 
sell these devices before the May 2020 Step 2 compliance date and will 
be left with unsaleable inventory.\3\ Additionally, some

[[Page 61579]]

manufacturers have indicated that they will need until May 2020 to 
develop, test, and certify wood heating devices to meet the 2020 Step 2 
standards. As a result, manufacturers may face revenue losses as 
retailers are not willing to buy the Step 1-certified models and the 
Step 2-certified models have not yet been developed, tested, and 
certified. Further, as May 2020 approaches, the EPA expects that 
retailers will become increasingly reluctant to purchase non-Step 2-
compliant wood heating devices which they will not be able to sell 
after May 2020, resulting in stranded capital. The EPA also 
acknowledges that the price differential between the Step 2 models and 
Step 1 models may dampen demand for these heaters and could result in 
consumers declining to purchase new heaters altogether (although the 
supplemental RIA does not examine this consumer response in detail).
---------------------------------------------------------------------------

    \3\ The following statements from various groups or individuals 
demonstrate these concerns:
    Hearth, Patio & Barbecue Association (HPBA): As time goes on and 
we get closer to the May 2020 effective date, retailers will reduce 
their purchase orders of Step 1 products. We are already seeing this 
happen today--a full two years before the effective date of Step 2. 
If orders are decreased or cut off, this implies that manufacturing 
is also being cut off or decreased. (May 31, 2018, response to 
request for information from the EPA.)
    Frank Moore (President & Owner, Hardy Manufacturing): Like 
manufacturers, retailers are making business decisions right now 
based on the Step 2 2020 requirements. It can sometimes take up to 
five years for a retailer to sell a hearth product from the time 
they purchase it from a manufacturer. With that in mind, many 
retailers aren't purchasing products from manufacturers that don't 
already meet the 2020 requirements. Even though it is still 2017, in 
practice the effective date is already having an impact. (September 
13, 2017, testimony before the House Committee on Energy & Commerce 
Subcommittee on the Environment in support of H.R. 453 (the Relief 
from New Source Performance Standards Act)).
    Mark Freeman (Owner, Kuma Stoves): SELL THROUGH--This is the 
most immediate need. I can't tell you how important this is to 
provide sell-through relief for manufacturers of AAA appliances as 
well as for the QQQQ manufacturers. Already we are seeing Early-buy 
orders for the 2018 season being affected from our dealers who are 
worried about having stock that they won't be able to sell by May 
2020. We need this as it is hurting my business and our industry. 
(May 1, 2018, email to the EPA.)
    Chris Neufeld (Vice President, Blaze King): The 2015 New Source 
Performance Standards failed to provide a sell through date. The 
magnitude of this omission in the 2015 NSPS is growing and growing 
quickly. Here is what we have learned from my visits to nearly 60 
retail locations in the past 3 months:
    1. Retailers are hesitant to order products that are set to 
expire on May 15th, 2020.
    2. Compounding their concerns, by some estimates, there are 
100,000 or more wood and pellet heaters in showrooms across the 
country that must be sold by May 15th, 2020. Based on these 
estimates, this could represent an entire year of industry sales. 
This does not include inventory held by distributors.
    3. Dealers expressed real concern that excessive discounting 
will result and in turn cause their small businesses to become 
vastly less profitable resulting in layoffs or closure.
    4. Retailers are hesitant to schedule summer and fall 
participation is fairs, home shows and other costly public events, 
which will reduce profitability.
    As a manufacturer, one that has acted in good faith, this could 
hurt our company to an insurmountable degree. Even though our 
company and others may demonstrate compliance in advance of May 15, 
2020, the very real threat is retailers stop ordering our products 
in an effort to sell off all the products with the expiration date 
of May 15, 2020. This matter is very time sensitive. A decision to 
provide an extension needs to be communicated soon and effectively 
so as to avoid a serious disruption to our business and that of 
retailers. (June 1, 2018, email to the EPA.)
---------------------------------------------------------------------------

    To address this situation, the EPA is proposing to amend the 2015 
NSPS, 40 CFR part 60, subpart QQQQ requirements to create a two-year 
sell-through period for retailers after the Step 2 compliance date that 
is similar to the Step 1 sell-through period. The EPA is proposing an 
amendment that will allow Step 1-compliant hydronic heaters and forced-
air furnaces manufactured or imported before May 15, 2020, to be sold 
at retail through May 15, 2022. The EPA is not proposing any changes to 
its BSER determination and is not proposing any changes to the 5-year 
compliance period for Step 2 or the associated May 2020 compliance 
date. As stated in the March 16, 2015, notice of final rulemaking, the 
EPA concluded that:
     A final hydronic heater Step 2 emission level of 0.10 lb/
mmBtu within 5 years as BSER is a reasonable balance of environmental 
impacts and costs; and
     a final forced-air furnace Step 2 emission level of 0.15 
lb/mmBtu within 5 years as BSER is a reasonable balance of 
environmental impacts and costs.
    While the EPA is soliciting comment on the compliance date for the 
Step 2 emission limits in a separate Federal Register notice, this 
notice of proposed rulemaking maintains the Agency's 2015 BSER 
determination, while at the same time seeking to ensure that the full 
5-year compliance period is available so that consumers, manufacturers, 
and retailers are not adversely affected.
    In this action, the EPA is seeking comment on this two-year sell-
through period for retailers after the Step 2 compliance date, 
including the reasonableness of the Agency's determination that there 
is a need for a Step 2 sell-through period and, if providing a sell-
through period is reasonable, what length of sell-through period is 
appropriate and why. The EPA is particularly interested in soliciting 
comments for the following topics regarding compliant hydronic heaters 
and forced-air furnaces and the sell-through period:
    (1) The Agency solicits comment on whether retailers are currently 
declining to purchase Step 1-compliant hydronic heaters and forced-air 
furnaces and how widespread is this reduction in purchases. The EPA 
also solicits comment as to whether this will become a more significant 
issue as the May 2020 compliance date approaches and, if so, when is it 
likely that retailers will no longer be willing to buy Step 1-compliant 
hydronic heaters and forced-air furnaces at all. The EPA solicits 
comment on the cost or other impacts that retailers could have on 
manufacturers who are small businesses if they decline to purchase Step 
1-compliant hydronic heaters and forced-air furnaces.
    (2) The Agency is soliciting comment as to what is the typical 
period of time between (a) when a retailer purchases a hydronic heater 
or forced-air furnace, and (b) when the device is sold to a consumer. 
In particular, the Agency is soliciting comment on these periods of 
time for small businesses.
    (3) The Agency is soliciting comment on the EPA's proposal that a 
sell-through period for retailers to sell Step 1-compliant hydronic 
heaters and forced-air furnaces is a reasonable way to address concerns 
about retailers' reluctance to purchase Step 1-compliant hydronic 
heaters and forced-air furnaces and/or manufacturers' inability to sell 
such heaters and furnaces before Step 2-certified models are available. 
In particular, the EPA is soliciting comment on the sell-through as a 
reasonable way to address concerns about retailers of devices and 
products from small businesses.
    (4) The Agency is soliciting comments regarding, if a sell-through 
period for the May 2020 compliance date were to be promulgated, what 
period of time after May 2020 would be sufficient for retailers to sell 
their inventory of Step 1-compliant hydronic heaters and forced-air 
furnaces. The EPA is proposing a two-year period but is also taking 
comment on whether either a shorter or a longer sell-through period may 
be more reasonable and, if so, why a sell-through period other than two 
years is appropriate. For small businesses in particular, the Agency is 
soliciting comment on a two-year period and whether that amount of time 
is reasonable.
    (5) The EPA is also soliciting comment on whether the Agency's 
proposal to provide the same two-year Step 2 sell-through period for 
both hydronic heaters and forced-air furnaces is reasonable, or whether 
a sell-through period of some different length may be more appropriate 
for each of these types of wood heating devices. The EPA is also 
soliciting comment on whether it may be more appropriate not to provide 
a sell-through period at all for either hydronic heaters or forced-air 
furnaces.
    (6) The Agency is soliciting information on the number of Step 1 
forced-air furnaces and hydronic heaters that are currently in 
production and the number that are being designed for Step 2 compliance 
that have not yet received their EPA certification for Step 2 
compliance. The EPA requests information on the number of Step 2 pellet 
and cord/crib wood forced-air furnaces and hydronic heaters that are 
currently certified to meet Step 2. The EPA is soliciting comment on 
how far in advance of the current May 2020 Step 2 compliance date 
manufacturers will need to submit their EPA certification applications 
to not only meet the standards, but also to manufacture, market, and 
distribute their products without disruption to their business.
    (7) The Agency seeks comment on whether and what type of small 
business relief may be appropriate in place of the extended sell-
through period that would accomplish the same goal.
    (8) The Agency seeks comment on the effects on the consumer as a 
result of a sell-through period.

[[Page 61580]]

    Providing specific information and data to explain the basis of 
your comments on these topics discussed above (and on all matters that 
you address in your comments) will be helpful in the Agency's 
consideration of the issues presented by this proposed rule.\4\
---------------------------------------------------------------------------

    \4\ In an Advanced Notice of Proposed Rulemaking in another 
Federal Register document that the EPA plans to publish soon, the 
EPA intends to seek comment on several additional matters, including 
whether the May 2020 Step 2 compliance date should be extended. The 
EPA does not view this proposed action for a retailer sell-through 
period as a measure that would preclude an extension of the Step 2 
compliance date. The EPA might both (1) finalize the proposed sell-
through period, and (2) subsequently extend the 2020 compliance 
date. In short, the EPA views the proposed sell-through period and a 
possible extension of the 2020 compliance date as related, but not 
mutually exclusive. Whether the EPA does one or both (or neither) 
will be decided after the EPA considers comments and the other 
pertinent information.
---------------------------------------------------------------------------

IV. Request for Comments on Wood Heaters (40 CFR Part 60, Subpart AAA)

    The EPA is also taking comment on whether the 2015 NSPS, 40 CFR 
part 60, subpart AAA, should also be revised to create a two-year sell-
through period for retailers after the Step 2 compliance date for wood 
heaters similar to what is being proposed for 40 CFR part 60, subpart 
QQQQ appliances in section III of this preamble. The EPA is seeking 
comment on whether to allow Step 1-compliant 40 CFR part 60, subpart 
AAA wood heaters manufactured or imported before May 15, 2020, to be 
sold at retail through May 15, 2022. In this action, the EPA is seeking 
comment on a two-year sell-through period for retailers after the Step 
2 compliance date, including comment on whether a Step 2 sell-through 
period for wood heaters is needed, and, if a sell-through period is 
added, what length of sell-through period is reasonable, and why.
    The EPA is particularly interested in soliciting comments for the 
following topics regarding compliant wood heaters and the sell-through 
period:
    (1) The Agency solicits comment on whether retailers are currently 
declining to purchase Step 1-compliant wood heaters and whether this 
reduction in purchases is widespread. In particular, the EPA solicits 
comment on whether there is a disproportionate change in purchases of 
crib/cord wood heaters (certification tests with either crib wood or 
cord wood) compared to pellet wood heaters due to the approaching May 
2020 compliance date. The EPA also solicits comment as to whether this 
will become a more significant issue as the May 2020 compliance date 
approaches and, if so, when it is likely that retailers will no longer 
be willing to buy Step 1-compliant wood heaters. The EPA solicits 
comment on the cost or other impacts that retailers could have on 
manufacturers who are small businesses if they decline to purchase Step 
1-compliant wood heaters.
    (2) The Agency is soliciting comment as to what is the typical 
period of time between (a) when a retailer purchases a wood heater, and 
(b) when the device is sold to a consumer. In particular, the Agency is 
soliciting comment on these periods of time for small businesses.
    (3) The Agency is soliciting comment as to whether a sell-through 
period for retailers to sell Step 1-compliant wood heaters is a 
reasonable way to address these concerns about retailers' reluctance to 
purchase Step 1-compliant wood heaters and/or manufacturers' inability 
to sell wood heaters before Step 2-certified models are available. In 
particular, the Agency is soliciting comment on the sell-through as a 
reasonable way to address concerns about retailers of devices and 
products from small businesses.
    (4) The Agency is soliciting comments regarding if a sell-through 
period for the May 2020 compliance date were to be promulgated, what 
period of time after May 2020 would be sufficient for retailers to sell 
their inventory of Step 1-compliant wood heaters. The EPA is also 
taking comment on whether the sell-through period should be as short as 
one year or as long as three years (or more), and, if so, why such a 
sell-through period would be more appropriate than two years. For small 
businesses in particular, the Agency is soliciting comment on a two-
year period and whether that amount of time is reasonable.
    (5) The Agency is soliciting information on the number of Step 1 
wood heater models that are currently in production and the number that 
are being designed for Step 2 compliance that have not yet received 
their EPA certification for Step 2 compliance. The EPA requests 
information on the number of Step 2 pellet and crib/cord wood heaters 
that are currently certified to meet Step 2. The EPA is soliciting 
comment on how far in advance of the current May 2020 Step 2 compliance 
date manufacturers will need to submit their EPA certification 
applications to not only meet the standards, but also to manufacture, 
market, and distribute their products without disruption to their 
business. The EPA solicits comment on any potential impact on consumers 
if the production of Step 2-compliant wood heaters is limited.
    (6) The Agency seeks comment on whether and what type of small 
business relief may be appropriate in place of the extended sell-
through period that would accomplish the same goal.
    (7) The Agency seeks comment on the effects on the consumer as a 
result of a sell-through period.
    Providing specific information and data to explain the basis of 
your comments on these topics discussed above (and on all matters that 
you address in your comments) will be helpful in the Agency's 
consideration of the issues presented by this proposed rule.

V. Request for Comments on Pellet Fuel Requirements

    Certification tests for residential wood pellet heaters require 
pellet fuels be made of wood with certain minimum quality requirements 
to ensure consistent operation for every certification test. These 
requirements have the added benefit to manufacturers of minimizing 
emissions during certification testing.
    The 2015 NSPS requires that pellets burned in a residential wood 
pellet heater meet the same minimum quality requirements to ensure 
consistent operations and comparable emissions. See Pellet Fuel 
Requirements stated in 40 CFR 60.532(e) and 60.5474(e). These 
requirements were intended to maintain a level of quality consistent 
with the requirements of a pellet heater certification test to ensure 
these pellets are similar to pellets used in certification testing. The 
EPA concluded at the time that this requirement provided some assurance 
that the wood pellet heater's performance in the home would be 
consistent with the laboratory certification test. A pellet 
manufacturer is not obligated to produce pellets that meet the pellet 
fuel requirements, but operators and manufacturers of residential 
pellet heaters in the United States are prohibited from using pellets 
that do not meet the pellet fuel requirements. However, the Agency has 
learned of issues regarding these requirements since publication of the 
2015 rule. Therefore, the EPA is taking comment on whether the minimum 
quality pellet fuel requirements in the 2015 NSPS (40 CFR part 60, 
subparts AAA and QQQQ) should be retained and, if they are retained, 
whether they should be revised.
    (1) The EPA is taking comment on whether 40 CFR part 60, subparts 
AAA and QQQQ should retain the minimum pellet fuel requirements, which 
are currently found at 40 CFR 60.532(e) and 60.5474(e). In support of 
the 2015 NSPS and in response to a remand of the record requested by 
the EPA, the EPA prepared a memorandum that set forth

[[Page 61581]]

the Agency's rationale for including pellet fuel requirements. See 
November 21, 2016, Memorandum from Stephen D. Page, Director, Office of 
Air Quality Planning and Standards, titled ``EPA's Response to Remand 
of the Record for Residential Wood Heaters New Source Performance 
Standards.'' \5\ The EPA is requesting comment on the rationale 
presented in the above-mentioned memorandum and if the current minimum 
requirements should be retained in its current form at 40 CFR 60.532(e) 
and 60.5474(e).
---------------------------------------------------------------------------

    \5\ This memorandum was placed in the 2015 docket as Docket ID 
No. EPA-HQ-OAR-2009-0734-1805 and is in the docket for this proposed 
rule at EPA-HQ-OAR-2018-0195.
---------------------------------------------------------------------------

    (2) The EPA is taking comment on whether the minimum pellet fuel 
requirements in 40 CFR 60.532(e) and 60.5474(e) should be eliminated 
entirely.
    (3) The EPA is taking comment on whether the pellet fuel 
requirements, if retained, should be revised. Such revisions could 
include adding new requirements or removing one or more of the current 
requirements or revising the requirements that are currently stated. 
For example, with respect to the maximum dimensions stated in 40 CFR 
60.532(e)(2) and 60.5474(e)(2), the Agency is seeking comment on 
whether this criterion should be removed or replaced with larger or 
smaller dimensions. The EPA has reviewed the pellet requirements and 
solicits comment on whether the Agency should revise the current 
minimum pellet fuel requirements:
    1. Density: Minimum of 38 lbs/ft3.
    2. Dimensions: Maximum length of 1.5.
    3. Fines: <1% (EPA referred to ``inorganic fines'' in the 2015 
NSPS. Should this be modified to ``fines''?).
    4. Chlorides: <=300 ppm.
    5. Ash content: <=2%.
    6. Contains no demolition or construction waste.
    7. Total of each trace metal: 100 mg/kg. Clarify if this should be 
reported ``as received'' or ``dry basis''. The trace metals include 
mercury, cadmium, lead, arsenic, chromium, copper, nickel, and zinc.
    8. None of the prohibited fuels in paragraph (f) of this section. 
The prohibited list does not prevent the use of unseasoned wood as an 
input material for manufacturing pellets.
    The EPA is interested in receiving comments that both support the 
current requirements (and explain why they are necessary) and comments 
that advocate that the requirements be removed or revised.

VI. Impacts of This Proposed Rule

A. What are the air impacts?

    The air impacts associated with the requirements of this proposed 
rule are the forgone emission reductions of PM2.5, HAPs, as 
well as other criteria pollutants and their precursors, including CO 
and VOC. VOCs are precursors to PM2.5 and ozone. These 
forgone emission reductions are estimated using the baseline emissions 
reflected in the final 2015 NSPS as presented in the emissions 
estimation memorandum and the 2015 NSPS RIA.\6\ The average annual 
forgone emission reductions for the primary scenario (Scenario 2), 
calculated over the timeframe of 2019-2022, is 257 tons of 
PM2.5, 271 tons of VOC, and 1,444 tons of CO. More 
information on how these impacts are estimated can be found in the 
supplemental RIA.
---------------------------------------------------------------------------

    \6\ Memo to Gil Wood, USEPA, from EC/R, Inc. Estimated Emissions 
from Wood Heaters. January 30, 2015. Available in Docket ID: Docket 
ID No. EPA-HQ-OAR-2009-0734. Regulatory Impact Analysis for 
Residential Wood Heaters NSPS, Final Report. EPA-452/R-15-001. 
February 2015. Available at Docket ID: EPA-HQ-OAR-2009-0734-
177407344.
---------------------------------------------------------------------------

B. What are the energy impacts?

    These proposed actions are anticipated to have negligible impacts 
on energy costs or usage. To the extent that Step 1-compliant hydronic 
heaters and forced-air furnaces continue to be sold for an additional 
two years, it is difficult to determine the precise energy impacts that 
might result from this proposed action. Wood-fueled appliances compete 
with other biomass forms for residential heating as well as more 
traditional energy sources such as oil, electricity, and natural gas. 
There is also a lack of sufficient data to determine the potential for 
affected consumers to choose other types of fuels and their associated 
appliances, nor the potential impacts to affected manufacturers.

C. What are the cost savings?

    The cost savings of the proposed action are the increase in 
revenues for manufacturers and retailers of hydronic heaters and 
forced-air furnaces affected by this rulemaking. The overall 
distribution of the avoided compliance costs as well as the 
distribution of forgone benefits is uncertain. The increase in revenues 
is calculated by estimating the reduction in unit costs from producing 
Step 1-compliant hydronic heaters and forced-air furnaces as compared 
to Step 2-compliant devices with estimates of sales taken from the 2015 
NSPS RIA, using the estimates calculated for the final 2015 NSPS 
requirements as the baseline. The revenue estimate calculated is the 
average of the annual estimates calculated for the 2019-2022 timeframe 
and the primary scenario (Scenario 2). The estimate of additional 
average annual revenues to manufacturers is $0.01 billion (2016 
dollars). Calculated as an EAV, the estimate is $0.01 billion (2016 
dollars). More information on how these impacts are estimated can be 
found in the supplemental RIA of this proposed rule.

D. What are the economic and employment impacts?

    The economic impacts of this proposal are the cost savings that are 
shown in section VI.C of this preamble. Impacts on employment are 
qualitatively examined in the supplemental RIA.

E. What are the forgone benefits of the proposed rule?

    The overall distribution of the avoided compliance costs as well as 
the distribution of forgone benefits is uncertain. Although this 
proposed action may result in the delay of the emission reductions from 
the 2015 NSPS by up to two years, this proposed action to establish a 
sell-through period does not change the standards upon implementation. 
The proposed revisions in this action would defer emission reductions 
into the future, thus delaying the health benefits estimated in the 
Residential Wood Heaters 2015 NSPS RIA. Due to analytical limitations, 
it was not possible to conduct air quality modeling for this proposed 
rule. Instead, the Agency used a ``benefit-per-ton'' approach to 
estimate the forgone benefits. In brief, the EPA calculated benefit 
per-ton (BPT) values for this sector by: (1) Characterizing the 
photochemical modeled PM2.5 air quality levels associated 
with this sector; (2) quantifying the number and economic value of 
adverse health impacts attributable to these PM2.5 
concentrations; (3) dividing these values by the sum of the emissions 
for the sector. The BPT reflects the average national benefits of 
reducing PM2.5 and PM2.5 precursors from the 
residential wood sector and cannot characterize the benefits occurring 
in discrete geographic locations such as non-attainment areas. For more 
detailed discussion of the benefit-per-ton approach, please refer to 
the benefits section in the supplemental RIA accompanying this proposed 
rulemaking.
    As compared to the 2015 NSPS RIA, for the years 2019 to 2022, this 
proposed rule, if finalized, would result in less

[[Page 61582]]

emission reduction of PM2.5, HAPs, as well as other criteria 
pollutants and their precursors, including CO and VOC, compared to the 
2015 NSPS final rule. VOC are precursors to PM2.5 and ozone. 
For this proposed rule, the Agency was only able to quantify the 
monetized forgone health benefits associated with forgone decreased 
exposure to directly emitted PM2.5. The forgone benefits 
reflect the average of annual PM2.5 forgone emission 
reductions occurring between 2019 and 2022 (inclusive). The Agency 
estimates the annual average monetized PM2.5-related forgone 
health benefits of the residential wood heaters NSPS in the 2019-2022 
timeframe to be $0.10 billion to $0.23 billion (2016 dollars) at a 3-
percent discount rate and $0.09 billion to $0.21 billion (2016 dollars) 
at a 7-percent discount rate. The ends of the range are quantified 
using Hazard Ratios reported in the Krewski, et al. (2009) and Lepeule, 
et al. (2012) long-term epidemiological studies. Using alternate 
relationships between PM2.5 and premature mortality supplied 
by experts, higher and lower estimates of forgone benefits are 
plausible; but, most of the expert-based estimates fall between these 
two estimates.\7\ A summary of the forgone emissions and monetized 
forgone benefits estimates for this proposed rule at discount rates of 
3 percent and 7 percent is provided in Table 2 of this preamble. All 
estimates reflect the primary scenario analyzed for this proposal 
(Scenario 2). Another metric that can be used to calculate such 
estimates, EAV, yields monetized forgone benefits estimates of $0.09 
billion to $0.21 billion at a 3 percent discount rate and $0.07 billion 
to $0.16 billion at a 7 percent discount rate. More information on all 
of these calculations can be found in the supplemental RIA.
---------------------------------------------------------------------------

    \7\ Roman, et al., 2008. ``Expert Judgment Assessment of the 
Mortality Impact of Changes in Ambient Fine Particulate Matter in 
the U.S.,'' Environ. Sci. Technol., 42, 7, 2268-2274.

   Table 2--Summary of Annual Average Monetized PM2.5-Related Health Forgone Benefits for New Residential Wood
     Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces NSPS Proposal in 2019-2022 Timeframe
                                       [Billions of 2016 dollars] a b c d
----------------------------------------------------------------------------------------------------------------
                                             Estimated
                                             emission       Total monetized forgone     Total monetized forgone
                Pollutant                    increases       benefits (3% discount       benefits (7% discount
                                               (tpy)                 rate)                       rate)
----------------------------------------------------------------------------------------------------------------
Directly emitted PM2.5..................             257  $0.10 to $0.23............  $0.09 to $0.21.
PM2.5 Precursors:
    VOC.................................             271
    CO..................................           1,444
----------------------------------------------------------------------------------------------------------------
\a\ All estimates are for the 2019-2022 timeframe (inclusive) and are rounded to two significant figures. The
  total monetized forgone benefits reflect the human health benefits associated with reducing exposure to PM2.5
  through reductions of PM2.5 precursors, such as NOX, and directly emitted PM2.5. It is important to note that
  the monetized benefits do not include reduced health effects from exposure to HAP, direct exposure to nitrogen
  dioxide (NO2), exposure to ozone, VOC, ecosystem effects, effects from black carbon or visibility impairment.
\b\ Forgone PM benefits are shown as a range from Krewski, et al. (2009) to Lepeule, et al. (2012).
\c\ These models assume that all fine particles, regardless of their chemical composition, are equally potent in
  causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of
  effects estimates by particle type.
\d\ All estimates reflect the primary scenario (or Scenario 2) for the proposal.

    These forgone benefit estimates represent the annual average 
economic value of the health benefits that would have occurred in the 
years 2019, 2020, 2021 and 2022, were the proposed sell-through date 
not deferred from 2020 to 2022.
    The Agency assumes that all fine particles, regardless of their 
chemical composition, are equally potent in causing premature mortality 
because the scientific evidence is not yet sufficient to allow 
differentiation of effects estimates by particle type. Even though the 
Agency assumes that all fine particles have equivalent health effects, 
the benefit-per-ton estimates vary between precursors depending on the 
location and magnitude of their impact on PM2.5 levels, 
which drive population exposure.
    For this analysis, policy-specific air quality data are not 
available. Thus, the Agency is unable to estimate the percentage of 
forgone premature mortality associated with this specific proposed 
rule's forgone emission reductions at each PM2.5 level. As a 
surrogate measure of mortality impacts, the Agency provides the 
percentage of the population exposed at each PM2.5 level 
using the source apportionment modeling used to calculate the benefit-
per-ton estimates for this sector. Using the Krewski, et al., (2009) 
study, 93 percent of the population is exposed to annual mean 
PM2.5 levels at or above the lowest measured level (LML) of 
5.8 micrograms per cubic meter ([micro]g/m\3\). Using the Lepeule, et 
al, (2012) study, 67 percent of the population is exposed above the LML 
of 8 [micro]g/m\3\. Therefore, caution is warranted when interpreting 
the LML assessment for this proposed rule. The Agency refers the reader 
to the supplemental RIA prepared for this proposed rule for detailed 
discussion.
    Every benefit analysis examining the potential effects of a change 
in environmental protection requirements is limited, to some extent, by 
data gaps, model capabilities (such as geographic coverage) and 
uncertainties in the underlying scientific and economic studies used to 
configure the benefit and cost models. A detailed discussion of these 
uncertainties is provided in the supplemental RIA. Despite these 
uncertainties, the benefit analysis for this action provides a 
reasonable indication of the expected forgone health benefits of the 
proposed rulemaking under a set of reasonable estimations.
    The monetized forgone benefits estimates provided above do not 
include forgone benefits from a variety of additional benefit 
categories. Although the Agency does not have sufficient information or 
modeling available to provide monetized estimates for these forgone 
benefits, the Agency includes a qualitative assessment of these 
unquantified forgone benefits in the supplemental RIA for this proposed 
rule. For more information on the benefits analysis, refer to the 
supplemental RIA for this proposed rule, which is available in the 
docket at Docket ID No. EPA-HQ-OAR-2018-0195.

[[Page 61583]]

VII. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is an economically significant regulatory action that 
was submitted to the Office of Management and Budget (OMB) for review. 
Any changes made in response to OMB recommendations have been 
documented in the docket. The EPA prepared an analysis of the potential 
costs and benefits associated with this action. This analysis, 
Supplemental Regulatory Impact Analysis (RIA)--Estimated Cost Savings 
and Forgone Benefits Associated with the Proposed Rule, ``Standards of 
Performance for New Residential Wood Heaters, New Residential Hydronic 
Heaters and Forced-Air Furnaces'' is a memorandum that is available in 
the docket. It is also summarized in section I of this preamble.
    Consistent with Executive Orders 12866 and 13563, ``Improving 
Regulation and Regulatory Review,'' the Agency has estimated the cost 
and benefits of the proposed rule. Given the nature of this rule, the 
Agency modified the discussion of net benefits (benefits-costs) to be 
more consistent with the relevant terminology of traditional net 
benefit analysis. The costs are presented here as the forgone benefits 
presented in section 5 of the supplemental RIA and section VI.E of this 
preamble. The Agency represents the benefits as the cost savings 
presented in section 2 of the supplemental RIA and section VI.C of this 
preamble, which the Agency estimates as the increase in revenues to 
manufacturers of affected wood heaters. The net benefits are the 
benefits (cost savings) minus the costs (forgone benefits). In this 
proposed rule, the estimated costs are greater than the benefits, 
leading to a negative net benefit (or net cost). The estimated annual 
average net benefit at a 3-percent discount rate is $0.09 billion to 
$0.22 billion, and $0.08 billion to $0.20 billion at a 7-percent 
discount rate in 2016 dollars, over the 2019 to 2022 timeframe. The net 
benefit estimate reflects an annual average of 257 tons of forgone 
PM2.5 emission reductions per year, and a total annual 
average cost savings of $0.01 billion (2016 dollars). The forgone 
benefits also include forgone emission reductions of 271 tons of VOC 
reductions per year and 1,444 tons of CO reductions per year; forgone 
reduced exposure to HAP, including formaldehyde, benzene, and POM; 
forgone reduced climate effects due to forgone reduced black carbon 
emissions and GHG emissions; forgone reduced ecosystem effects; and 
forgone reduced visibility impairments. Table 3 summarizes the 
estimated costs and forgone benefits for the affected forced-air 
furnaces and hydronic heaters. The estimated costs and benefits reflect 
the average annual impacts for the 2019 to 2022 timeframe, which are 
the implementation years analyzed in the supplemental RIA for this 
proposed rule. All estimates reflect the primary scenario analyzed for 
this proposal (Scenario 2). Results for wood stoves, a category not 
included in the 2-year sell through proposed extension but for which 
comments are requested to determine if they should be, are also 
provided in the supplemental RIA.

 Table 3--Summary of Annual Average Cost Savings, Monetized Forgone Benefits, and Monetized Net Forgone Benefits
                 (Billions of 2016 Dollars) in the 2019-2022 Timeframe for the Proposed Rule a b
----------------------------------------------------------------------------------------------------------------
                                                  3% Discount rate                     7% Discount rate
----------------------------------------------------------------------------------------------------------------
Costs: Forgone Benefits \c\...........  ($0.10) to ($0.23).................  ($0.09) to ($0.21).
                                       -------------------------------------------------------------------------
Benefits: Cost Savings from Increased                                     $0.01
 Manufacturers' and Retailers'
 Revenues.
                                       -------------------------------------------------------------------------
Net Benefits..........................  ($0.09) to ($0.22).................  ($0.08) to ($0.20).
----------------------------------------------------------------------------------------------------------------
\a\ All estimates in this table are rounded to one decimal point, so numbers may not sum due to independent
  rounding. All estimates reflect the primary scenario (Scenario 2) as described in the supplemental RIA.
\b\ All estimates are for the timeframe from 2019 to 2022 inclusive. All estimates reflect the primary scenario
  (Scenario 2) for this proposal. These results include units anticipated to come online and the lowest cost
  disposal assumption. These cost savings are presented in the supplemental RIA. The monetized forgone net
  benefits at a 3% interest rate are minimally different than those calculated at a 7% interest rate.
\c\ The total monetized forgone benefits reflect the forgone human health benefits associated with reducing
  exposure to PM2.5 through reductions of directly emitted PM2.5. Monetized forgone benefits include many, but
  not all, health effects associated with PM2.5 exposure. Forgone benefits are shown as a range from Krewski et
  al. (2009) to Lepeule et al. (2012). We do not report the total monetized forgone benefits by PM2.5 species.

    In addition, Table 4 reports the present values and equivalent 
annualized values of the net benefits discounted at 7 and 3 percent. 
EAV are the annualized present values, or the levelized flow of the 
present values (PV), over the three years affected by the proposal. The 
PV of the net benefits are negative $0.07 billion to negative $0.19 
billion when using a 7 percent discount rate and negative $0.07 billion 
to negative $0.20 billion when using a 3 percent discount rate. The 
equivalent annualized values of the net benefits are negative $0.06 
billion to negative $0.15 billion per year when using a 7 percent 
discount rate and negative $0.08 billion to negative $0.20 billion per 
year when using a 3 percent discount rate. The negative values indicate 
that EAV of the estimated benefits (cost savings) of the proposal are 
smaller than the EAV of estimated costs (forgone benefits). All these 
estimates are in 2016 dollars and are discounted to 2016.

[[Page 61584]]



 Table 4--Estimated Present Values and Equivalent Annualized Values of the Benefits, Costs, and the Net Benefits
   of the New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces NSPS Proposal
                                               [Billions of 2016]
----------------------------------------------------------------------------------------------------------------
                                             7% Discount rate                        3% Discount rate
                                 -------------------------------------------------------------------------------
                                          PV                  EAV                 PV                  EAV
----------------------------------------------------------------------------------------------------------------
Benefits \1\....................  $0.025............  $0.01.............  $0.029............  $0.01.
Costs \2\.......................  ($0.09) to ($0.21)  ($0.07) to ($0.16)  ($0.10) to ($0.23)  ($0.09) to
                                                                                               ($0.21).
Net Benefits....................  ($0.07) to ($0.19)  ($0.06) to ($0.15)  ($0.07) to ($0.20)  ($0.08) to
                                                                                               ($0.20).
----------------------------------------------------------------------------------------------------------------
\1\ The EAV of benefits are the EAV of the cost savings.
\2\ The EAV of costs are calculated from the PV of the forgone monetized benefits. Results are rounded to two
  significant figures. Totals may not sum due to rounding. Values in parentheses are negative.

    For more information on the forgone benefits analysis, the cost 
analysis and the calculation of net benefits, please refer to the 
supplemental RIA prepared for this proposed rulemaking under Docket ID 
No. EPA-HQ-OAR-2018-0195.

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This action is expected to be an Executive Order 13771 deregulatory 
action. Details on the estimated cost savings of this proposed rule can 
be found in the rule's economic analysis. See section VI of this 
preamble.

C. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden 
under the PRA. OMB has previously approved the information collection 
activities contained in the existing regulations and assigned OMB 
Control number 2060-01 for 40 CFR part 60, subpart AAA and OMB Control 
number 2060-0693 for 40 CFR part 60, subpart QQQQ. This action is 
believed to result in no changes to the information collection 
requirements of the 2015 Standards of Performance for New Residential 
Wood Heaters, New Residential Hydronic Heaters and Forced-air Furnaces 
rule, so that the information collection estimate of project cost and 
hour burden from the 2015 final rule have not been revised.

D. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the impact of concern is any significant 
adverse economic impact on small entities. An agency may certify that a 
rule will not have a significant economic impact on a substantial 
number of small entities if the rule relieves regulatory burden, has no 
net burden, or otherwise has a positive economic effect on the small 
entities subject to the rule. This proposed rule will not impose any 
new requirements on any entities because it does not impose any 
additional regulatory requirements relative to those specified in the 
2015 NSPS. The Agency has, therefore, concluded that this action will 
have no net regulatory burden for all directly regulated small 
entities.

E. Unfunded Mandates Reform Act of 1995 (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. The action imposes no enforceable duty on any state, 
local, or tribal governments or the private sector.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications as specified in 
Executive Order 13175. This rule will not impose any requirements on 
tribal governments. Thus, Executive Order 13175 does not apply to this 
action. Consistent with the EPA Policy on Consultation and Coordination 
with Indian Tribes, the EPA will provide outreach through the National 
Tribal Air Association and will offer consultation to tribal officials.

H. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This proposed action is subject to Executive Order 13045 because it 
is an economically significant regulatory action as defined by 
Executive Order 12866. As noted in the preamble to the 2015 NSPS, the 
EPA does not believe that the environmental health risks or safety 
risks addressed by the NSPS presents a disproportionate risk to 
children based on distributional assessments of effects from 
residential wood smoke emissions (see 80 FR 13700). Although this 
proposed action may result in the delay of the emission reductions of 
some hydronic heater and forced air furnace appliances in the 2015 NSPS 
by up to two years, this will not alter the EPA's prior findings that 
on a nationwide basis, cancer risks due to residential wood smoke 
emissions among disadvantaged population groups generally are lower 
than the risks for the general population due to residential wood smoke 
emissions. (One of the demographic variables examined by the EPA was 
that of people 18 years and younger.) Furthermore, the proposed action 
does not affect the level of public health and environmental protection 
already being provided by existing NAAQS and other mechanisms in the 
CAA. This proposed action does not affect applicable local, state, or 
federal permitting or air quality management programs that will 
continue to address areas with degraded air quality and maintain the 
air quality in areas meeting current standards. Areas that need to 
reduce criteria air pollution to meet the NAAQS will still need to rely 
on control strategies to reduce emissions. To the extent that states 
use other mechanisms in order to comply with the NAAQS, this action 
will not have a disproportionate adverse effect on children's health.

I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution or use of energy. This action allows affected wood

[[Page 61585]]

heating devices to sustain their current levels of operation. It does 
not promote the reduction in energy use nor does it increase the cost 
of energy production. Further information on the energy impacts can be 
found in section VI.B of this preamble.

J. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR 
Part 51

    This rulemaking does not involve technical standards.

K. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    The EPA believes that this proposed action will not have 
disproportionately high and adverse human health or environmental 
effects on minority populations, low-income populations or indigenous 
peoples as specified in Executive Order 12898 (59 FR 7629, February 16, 
1994). As noted in the preamble to the 2015 NSPS, the EPA believes that 
the human health or environmental risk addressed by the NSPS will not 
have potential disproportionately high and adverse human health or 
environmental effects on minority, low-income or indigenous populations 
from residential wood smoke emissions (see 80 FR 13701). Although this 
proposed action may result in the delay of the emission reductions of 
some hydronic heater and forced air furnace appliances in the 2015 NSPS 
by up to two years, this will not alter the EPA's prior findings that 
on a nationwide basis, cancer risks due to residential wood smoke 
emissions among disadvantaged population groups generally are lower 
than the risks for the general population due to residential wood smoke 
emissions.
    Furthermore, the overall distribution of the avoided compliance 
costs as well as the distribution of forgone benefits is uncertain. 
Although this proposed action may result in the delay of the emission 
reductions of some hydronic heater and forced air furnace appliances in 
the 2015 NSPS by up to two years, this proposed action to establish a 
sell-through period does not change the standards upon implementation.

List of Subjects in 40 CFR Part 60

    Environmental protection, Administrative practice and procedure.

    Dated: November 21, 2018.
Andrew R. Wheeler,
Acting Administrator.
    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is proposed to be amended as follows:

PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

0
1. The authority citation for part 60 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

Subpart QQQQ--[Amended]

0
2. Section 60.5474 is amended by revising paragraphs (a)(2) and (a)(6) 
to read as follows.


Sec.  60.5474  What standards and requirements must I meet and by when?

    (a) * * *
    (2) On or after May 15, 2020, manufacture or sell at retail a 
residential hydronic heater unless it has been certified to meet the 
2020 particulate matter emission limit in paragraph (b)(2) or (b)(3) of 
this section except that a residential hydronic heater certified to 
meet the 2015 particulate matter emission limit in paragraph (b)(1) of 
this section manufactured or imported on or before May 15, 2020, may be 
sold at retail on or before May 15, 2022.
* * * * *
    (6) On or after May 15, 2020, manufacture or sell at retail a small 
or large residential forced-air furnace unless it has been certified to 
meet the 2020 particulate matter emission limit in paragraph (b)(6) of 
this section except that a small or large residential forced-air 
furnace certified to meet the applicable 2015 particulate matter 
emission limit in paragraph (b)(4) or (b)(5) of this section, 
respectively, manufactured or imported on or before May 15, 2020 may be 
sold at retail on or before May 15, 2022.
* * * * *
[FR Doc. 2018-26083 Filed 11-29-18; 8:45 am]
 BILLING CODE 6560-50-P


