 

Response to Comments on Proposed Sell-Through Amendment and Pellet Fuel Requirements in the `Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces' 
 





U.S. Environmental Protection Agency 
Office of Air Quality Planning and Standards 
Sector Policies and Programs Division 
Research Triangle Park, NC 


March 10, 2020 


	



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                                   FOREWORD 

This document summarizes the public comments and provides the EPA's responses to those comments regarding EPA's Sell-Through Final Rule for the Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces. The EPA published the Proposed Rule in the Federal Register on November 30, 2018 (83 FR 61574). The EPA received comments on the proposed rule via e-mail, mail, facsimile, and at a public hearing held in Washington, D.C. on December 17, 2018. Copies of all comments submitted and transcripts for the public hearings are available at the EPA Docket Center Public Reading Room and are also available electronically through http://www.regulations.gov by searching Docket ID EPA-HQ-OAR-2018-0195. 

This document contains responses to comments on the proposed two-year retail sell-through amendment and on the pellet fuel requirements in the New Residential Wood Heaters NSPS (40 CFR part 60, subparts AAA and QQQQ). The EPA provided rationale for its decision regarding this proposed action in the preamble of the final rule. This document contains a summary of all issues raised by commenters, extracted from the original letters and public hearing transcripts. 

For each comment, the Document Control Number (DCN) is provided in parentheses along with the comment summary. The text within the comment summaries is provided by the commenter(s) and represents their opinion(s), regardless of whether the summary specifically indicates that the statement is from a commenter(s) (e.g., "The commenter stated" or "The commenters asserted"). The comment summaries do not represent the EPA's opinion unless the response to the comment specifically agrees with all or a portion of the comment. In some cases, the same comment was submitted by two or more commenters through submittal of a form letter prepared by an organization, by the commenter incorporating by reference the comments in another comment letter, or by the commenter providing identical or similar language independently. Rather than repeat these comment excerpts for each commenter, the comment summary is provided only once.

The EPA's responses to comments are provided immediately following each comment summary. In instances where several commenters raised similar or related issues, the EPA has grouped these comments together and provided a single response after the last comment summary or excerpt in the group. It should be noted that the EPA does not individually identify every commenter who made a certain point in all instances, particularly in cases where multiple commenters express essentially identical arguments. Finally, the EPA provided rationale for this final action in the preamble to the final rulemaking. Although portions of the preamble are paraphrased in this document, to the extent any ambiguity is introduced by this paraphrasing, the preamble itself remains the definitive statement of the rationale for this final action.
                                       
                                       
                                       
                                       
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Table of Contents 
1.0 	Introduction	1
2.0 	Legality of the Sell-Through Amendment under the Clean Air Act and other Statutes	6
2.1	The Sell-Through Amendment is Permissible under the CAA	6
2.1.1 Comment: Nothing in the CAA limits EPA's authority to stagger compliance deadlines	6
2.1.2 Comment: EPA has authority under Section 111 to revise the existing NSPS and cure defect in 2015 NSPS by adding sell-through provisions	7
2.2 	The Sell-Through Amendment is not Permissible under the CAA and other Statutes	11
2.2.1 Comment: The proposal is arbitrary and capricious in violation of the Administrative Procedure Act	12
2.2.2 Comment: The proposal fails to meet the procedural requirements of the CAA	18
2.2.3 Comment: The proposal imposes public health and environmental harm on society contrary to CAA's statutory mandate and Agency guidance	24
2.2.4 Comment: EPA does not have authority to extend a sell-through period under the CAA or under consumer protection laws	30
2.2.5 Comment: The proposal would increase emissions in non-attainment areas in violation of the CAA	34
2.3	The Sell-Through as a Component of the Best Systems of Emission Reduction (BSER) Determination	39
2.3.1 Comment: The CAA requires EPA to demonstrate that the proposed revision reflects BSER	40
2.3.2 Comment: The sell-through is part of the already established five-year lead time of BSER	47
2.4	Supplemental Regulatory Impact Analysis (RIA) Comments	56
2.4.1 Comment: The truncated RIA cost-benefit analysis fails to evaluate all pollutant emissions and underestimates environmental and societal costs	56
2.4.2 Comment: The RIA scenario assumptions are not supported and underestimate environmental and societal costs	65
2.4.3 Comment: The RIA fails to evaluate how Step 1 devices will compete with Step 2 devices, to the potential detriment of those manufacturers who have invested in Step 2 technology	72
2.4.4 Comment: The RIA overstates the cost savings to manufacturers	74
2.4.5 Comment: The RIA fails to analyze impacts on sub-populations of concern	75
2.4.6 Comment: The RIA fails to evaluate consumer behavior	82
2.4.7 Comment: The RIA fails to evaluate the costs to state and local governments	83
2.4.8 Comment: The RIA fails to account for incentive programs	85
3.0	Support for Sell-Through	86
3.1	Support for Sell-Through for All Wood Heating Devices	86
3.1.1 Comment: EPA's rationale for proposed sell-through applies to all regulated wood heating devices, under both QQQQ and AAA	86
3.1.2 Comment: Sell-through necessary to allow retailers to continue to purchase and sell Step 1 heaters, so manufacturers can fund Step 2 model development and certification	87
3.1.3 Comment: Sell-through necessary to allow retailers and manufacturers to continue generating revenue and avoid economic harm from stranded inventory	92
3.1.4 Comment: Sell-through necessary to provide consumers affordable choices	96
3.1.5 Comment: Sell-through will not significantly increase emissions because it allows Step 1 models to replace older pre-NSPS models	98
3.1.6 Comment: Suggested length of sell-through	102
3.2	Support for Sell-Through for Hydronic Heaters	105
3.2.1 Comment: Sell-through necessary to allow retailers to continue to purchase Step 1 hydronic heaters so manufacturers can fund Step 2 model development and certification	106
3.2.2 Comment: Sell-through necessary to allow retailers and hydronic heater manufacturers to continue generating revenue and avoid economic harm from stranded inventory	107
3.2.3 Comment: Sell-through will provide manufacturers with the extra time they need to bring Step 2 hydronic heaters to market	109
3.2.4 Comment: Sell-through necessary to provide consumers affordable choices	110
3.2.5 Comment: Sell-through would have negligible environmental impacts	111
3.2.6 Comment: Suggested length of hydronic heater sell-through	111
3.3	Support for Sell-Through for Forced-Air Furnaces	112
3.3.1 Comment: Sell-through necessary to allow retailers to continue to purchase Step 1 forced-air furnaces so manufacturers can fund Step 2 model development and certification	113
3.3.2 Comment: Sell-through necessary to allow retailers and forced-air furnace manufacturers to continue generating revenue and avoid economic harm from stranded inventory	113
3.3.3 Comment: Sell-through necessary to provide consumers affordable choices	115
3.3.4 Comment: Suggested length of forced-air furnace sell-through	116
3.4	Support for Sell-Through for Wood Heaters under AAA	118
3.4.1 Comment: Sell-through necessary to allow retailers to continue to purchase Step 1 heaters so manufacturers can fund Step 2 model development and certification	118
3.4.2 Comment: Sell-through necessary to allow retailers and manufacturers to continue generating revenue and avoid economic harm from stranded inventory and layoffs	120
3.4.3 Comment: Sell-through necessary to provide consumers affordable choices	124
3.4.4 Comment: Lack of sell-through will cause consumers to use higher emitting wood heaters	126
3.4.5 Comment: Sell-through would have negligible environmental impacts	127
3.4.6 Comment: Suggested length of sell-through for AAA wood heaters	128
4.0	Opposition to Sell-Through	131
4.1	Opposition to Sell-Through for All Wood Heating Devices	131
4.1.1 Comment: Manufacturers have had sufficient time already to meet the standards, some models already do, and there is no new rationale to justify the sell-through	131
4.1.2 Comment: Sell-through financially penalizes manufacturers that have made investments to develop Step 2-compliant models	137
4.1.3 Comment: Sell-through will cause states and localities to initiate more stringent and separate certification programs and more intrusive government actions	141
4.1.4 Comment: Sell-through will significantly and unnecessarily increase pollution and public health hazards and damage property values	143
4.2	Opposition to Sell-Through for Hydronic Heaters	160
4.2.1 Comment: Manufacturers have had sufficient time already to meet the standards and some models already do	160
4.2.2 Comment: Sell-through financially penalizes hydronic heater manufacturers that have made investments to develop Step 2-compliant models	162
4.2.3 Comment: Sell-through will significantly and unnecessarily increase pollution and public health hazards	163
4.2.4 Comment: Sell-through not necessary for hydronic heater retailers	165
4.2.5 Comment: Sell-through not necessary for consumers because retail prices will not generally increase	166
4.3	Opposition to Sell-Through for Forced-Air Furnaces	166
4.3.1 Comment: Sell-through financially penalizes forced-air furnace manufacturers that have made investments to develop Step 2-compliant models	166
4.3.2 Comment: Sell-through not necessary or feasible for forced-air furnace retailers	167
4.3.3 Comment: Sell-through will unreasonably delay emission reductions	167
4.4	Opposition to Sell-Through for Wood Heaters under AAA	168
4.4.1 Comment: Manufacturers have had sufficient time already to meet the standards and many models already do	168
4.4.2 Comment: Sell-through financially penalizes manufacturers that have made investments to develop Step 2-compliant models	170
4.4.3 Comment: Sell-through will significantly and unnecessarily increase pollution and public health hazards	171
4.4.4 Comment: Sell-through will eliminate the significant emission reductions achieved when transitioning from Step 1 to Step 2-compliant wood heaters	172
4.4.5 Comment: Sell-through not necessary for retailers because there is ample time to sell-off non-compliant inventory	173
4.4.6 Comment: Sell-through not necessary for consumers because retail prices will not generally increase	173
5.0	Wood Heating Device Step 1 and Step 2 Statistics	175
5.1	Hydronic Heater Step 1 and Step 2 Statistics	175
5.1.1 Comment: Step 2 hydronic heater models designed and certified	175
5.1.2 Comment: Step 1 and Step 2 hydronic heater models available at retailers	177
5.1.3 Comment: Inventory carryover, selling season, and decline in purchases by retailers of Step 1 hydronic heaters	178
5.1.4 Comment: Time required for EPA certification of hydronic heater models	182
5.2	Forced-Air Furnace Step 1 and Step 2 Statistics	183
5.2.1 Comment: Step 2 forced-air furnace models designed and certified	183
5.2.2 Comment: Step 1 and Step 2 forced-air furnace models available at retailers	185
5.2.3 Comment: Inventory carryover, selling season, and decline in purchases by retailers of Step 1 forced-air furnaces	186
5.2.4 Comment: Time required for EPA certification of forced-air furnace models	191
5.2.5 Comment: Cost to certify forced-air furnace model line	191
5.3	Wood Heater Step 1 and Step 2 Statistics (AAA)	192
5.3.1 Comment: Step 2 AAA models designed and certified	192
5.3.2 Comment: Step 1 and Step 2 AAA models available at retailers	196
5.3.3 Comment: Time needed to sell-off Step 1 models	199
5.3.4 Comment: Inventory carryover, selling season, and decline in purchases by retailers of Step 1 AAA devices	199
5.3.5 Comment: Shift to pellet heaters from cord wood heaters	207
5.3.6 Comment: Time required for EPA certification of AAA models	207
6.0	Support for Retaining or Revising Pellet Fuel Requirements	210
6.1	Pellet Requirements Should Be Retained	210
6.1.1 Comment: Pellet requirements are needed to ensure consistent operation and emissions performance to safeguard public health	210
6.1.2 Comment: Retention of trace metals, sulfur, chlorine, ash and fines requirements	212
6.2	Pellet Requirements Should Be Revised	213
6.2.1 Comment: Reasons for strengthening pellet fuel requirements	213
6.2.2 Comment: Maximum length restriction should be eliminated	215
6.2.3 Comment: Fines restriction should be revised	215
6.2.4 Comment: Trace metal restrictions should be retained and strengthened	216
6.2.5 Comment: Ash content restriction should be revised	217
6.2.6 Comment: Demolition /construction waste restrictions should be retained and strengthened	217
6.2.7 Comment: Prohibited fuel list should be revised regarding pallets and seasoned wood prohibitions	218
6.2.8 Comment: Quality assurance program requirements should be revised	221
7.0	Support for Eliminating Pellet Fuel Requirements	223
7.1	The Pellet Fuel Requirements are not Permissible under the CAA	223
7.1.1 Comment: EPA lacks legal authority under the CAA to regulate pellet fuel, did not analyze BSER, unjustifiably regulates a commercial product in homes and must repeal the requirements entirely.	223
7.1.2 Comment: EPA cannot prescribe a specific technology for compliance with a standard under CAA section 111 and doing so precludes innovation	234
7.1.3 Comment: EPA's differential regulation of pellet fuel versus other wood fuels in the same source category is not permitted by the CAA	239
7.1.4 Comment: The pellet fuel requirements cannot be justified on the basis of cost effectiveness	242
7.1.5 Comment: The pellet fuel requirements are unenforceable	244
7.1.6 Comment: EPA provides no basis of information for either retaining or revising the existing pellet fuel standards	246
7.2	The EPA Should Merely Reference the Pellet Fuel Institute's Standards	249
7.2.1 Comment: Referencing PFI's standards in lieu of static requirements allows innovation	249
8.0	Other & Miscellaneous Comments	251
8.1	Other Types of Relief in Lieu of Sell-Through	251
8.1.1 Comment: Other types of relief in lieu of sell-through for hydronic heaters	251
8.1.2 Comment: Other types of relief in lieu of sell-through for AAA wood heaters	252
8.2	Request for Extending the Comment Period and/or Additional Public Hearings	252
8.2.1 Comment: Request for or opposition to an extended comment period	253
8.2.2 Comment: Request for or opposition to an additional public hearing	254
8.3 	Miscellaneous Comments	254
8.3.1 Comment: EPA should focus resources on test methods	254
8.3.2 Comment: EPA should focus resources on compliance and enforcement	255
8.3.3 Comment: Wood heating should be regulated locally not nationally	257
8.3.4 Comment: Wood is a renewable resource and there are more pressing problems than wood heating	258
8.3.5 Comment: Banning wood heating	260
Appendix A: Complete List of Commenters	262

1.0 	Introduction
On November 30, 2018 (83 FR 61574), the U.S. Environmental Protection Agency (EPA) proposed 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 proposal would 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 also took 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 took comment on whether the current minimum pellet fuel requirements should be retained and, if so, whether they should be revised. 

This Response to Comment (RTC) document provides excerpts and summaries of public comments and the EPA's responses to these comments regarding the proposed rulemaking. The docket for this rule, which includes supporting documents as well as public comments, is available on Regulations.gov, docket ID number EPA-HQ-OAR-2018-0195. 
      
The Clean Air Act (CAA) requires the EPA to set NSPS for industrial categories that cause, or significantly contribute to, air pollution that may endanger public health or welfare. Wood smoke is made up of a mixture of gases and fine particles that are produced when wood and other organic matter burns. The fine particles in smoke  -  also called fine particle pollution or PM2.5 (because these particles have a diameter <= 2.5 micrometers)  -  can get deep into the lungs, harming the lungs, blood vessels and heart. People with heart, vascular or lung disease, older adults and children are the most at risk. The original NSPS for new residential wood heaters was published on February 26, 1988. On March 16, 2015 (80 FR 13672), the EPA updated the NSPS for new residential wood heaters under 40 CFR part 60, subpart AAA, and added performance standards for new residential hydronic heaters and new forced-air furnaces under 40 CFR part 60, subpart QQQQ. 

For this comment summary in response to the proposed two year sell-through amendment to the NSPS (83 FR 61574), the terms heaters and stoves refer to 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 proposed action, the terms wood heating device(s) and pellet heating device(s) refer to all units regulated by the 2015 NSPS (40 CFR part 60, subparts AAA and QQQQ).

The EPA held a public hearing on this proposed action on December 17, 2018 and summaries of the public testimonies presented at that hearing are included in this RTC document. The public comment period originally ended on January 14, 2019 for this proposed amendment but was re-opened on February 7, 2019 for an additional 5 days until February 12, 2019, so that the comment period would be open for a full 30 days after the public hearing. The EPA received 175 comment letters (with and without attachments) in response to the proposed amendment. These public submissions represent commenters from wood heating device manufacturers, retailers, trade groups, state/local/tribal regulatory agencies, multi-jurisdictional organizations, environmental and health advocacy organizations, citizen groups and private (individual) citizens. Appendix A, "Complete List of Commenters" lists all public submissions placed into the docket for this proposed rulemaking. 

Throughout this document, we refer to a particular commenter (and/or a particular comment document) by reference to an ID number that corresponds to the last 4 digits of the associated Document Control Number (DCN) in the docket for this rulemaking: EPA-HQ-OAR-2018-0195. The public submissions are typically in email or letter form, from individuals representing either their own personal views or those of a group. We counted each of the public submissions as one commenter, whether the comment was that of an individual or on behalf of a group (such as a state air agency, trade organization, corporation, environmental/health organization or community coalition). Several form letter campaigns were conducted (e.g., by retailers of hydronic heaters manufactured by Central Boilers and by retailers of wood heaters and inserts), but the individual commenters who signed onto these campaigns were processed separately by the Federal Docket Management System (FDMS) and so are counted as separate comments in our tally.

For descriptive purposes, we categorized commenters according to the breakdown shown in Table 1 (on the next page). This table also tallies general support and opposition to the proposed sell-through and pellet fuel requirements. 

In light of the overlap among the comments, this document does not respond to each comment individually. Although numerous comment excerpts are included in this RTC document, the EPA also summarizes similar comments and provides a single response to each significant argument, assertion, and question contained within the totality of comments. Within each comment summary section, the EPA provides in parentheses one or more DCN to identify the commenters who raised particular issues. Additionally, where a comment letter endorses or supports another commenter, we include their commenter DCN along with the DCN of the commenter that they support or endorse. We have made an effort to capture every issue raised, even if every commenter attribution is not listed in connection to that issue.

Table 1. Breakdown of Comments 
                               Stakeholder Group
                              Number of Comments
Wood Heating Device Manufacturers and Industry Trade Group
                                                                             20
Wood Heating Device Retailers and Distributors
                                                                             73
Pellet Fuel Suppliers, Industry Trade Group, and Pallet Suppliers
                                                                              7
Federal Organizations
                                                                              1
State/Local/Tribal Governments, including Multi-Jurisdictional Organizations 
                                                                             20
Environmental/Health Organizations (EHO) and Citizen Advocacy Groups
                                                                              9
Academia
                                                                              1
Private Citizens*
                                                                            44*
                                                                 Total Comments
                                                                            175
                 Support and Opposition to Proposed Actions**
                                                                               
Support for Sell-Through (any or all wood heating devices)
                                                                            120
Opposition to Sell-Through (any or all wood heating devices)
                                                                             31
Support for Current or Revised Pellet Fuel Requirements
                                                                              8
Opposition to Pellet Fuel Requirements (support for elimination)
                                                                              6
Other (comment period extension and/or additional public hearing requests)
                                                                              6
Miscellaneous and Not Applicable
                                                                             12
  *Not included in the tally of 44 private citizen submissions is a mass mail submission containing 186 duplicate submissions.
  **Some commenters are represented more than once in the support/opposition tallies (e.g., the commenters who stated opinions about both the sell-through and pellet fuel requirements are tallied in both respective rows).

In the remaining sections of this RTC document we have summarized the public comments received on the proposed NSPS sell-through amendment, and we provide responses to those comments. A list of frequently used acronyms and abbreviations is provided in Table 1. Section 2 contains comments regarding the legality of the sell-through amendment under the CAA and other statutes. Section 3 contains comments supporting the sell-through for each type of wood heating device. Section 4 contains comments opposing the sell-through for each type of device. Section 5 contains comments regarding Step 1 and Step 2 statistics for each device, including comments regarding a decrease in sales as May 2020 approaches. Section 6 contains comments supporting the retention and/or revision of the pellet fuel requirements. Section 7 contains comments supporting eliminating the pellet fuel requirements from the NSPS and merely referencing external standards. And finally, Section 8 contains other and miscellaneous comments, including comments suggesting other types of relief in lieu of the sell-through.

Appendix A contains a complete list of commenters, including their Document ID#, the date the comment was received by FDMS, and the name and affiliation of the commenter.



Table 2. Explanation of Acronyms and Abbreviations 

Acronym
Long Name
ug/m3
Micrograms per cubic meter
AAA
Subpart AAA of the 2015 RWH NSPS, and the wood heaters regulated under that Subpart (wood stoves/heaters, pellet stoves/heaters, single burn rate stoves/heaters)
ANPR
Advance Notice of Proposed Rulemaking
APA
Administrative Procedure Act
ASTM
American Society for Testing and Materials (now ASTM International)
BSER
Best System of Emission Reduction
BTU
British Thermal Unit
CAA
Clean Air Act
CARB
California Air Resources Board
CBI
Confidential Business Information
CFR
Code of Federal Regulations
CI ICE
compression ignition internal combustion engines
CO
Carbon Monoxide
CSA
Canadian Standards Association
DCN
Document Control Number
EPA
U.S. Environmental Protection Agency
EJ
Environmental Justice
EO or E.O.
Executive Order
FAF
Forced-air furnace(s)
FR
Federal Register
g/hr
Grams per hour
HH
Hydronic heater(s)
HPBA
Hearth, Patio and Barbecue Association
ICR
Information Collection Request
ISA
Integrated Science Assessment
kW or KW
Kilowatt
lb/mmBtu
Pounds per million British thermal unit
NAAQS
National Ambient Air Quality Standards
NESCAUM
Northeast States for Coordinated Air Use Management
NPRM
Notice of Proposed Rulemaking
NSPS
New Source Performance Standards
NOx
Nitrogen oxides
NYSERDA
New York State Energy Research and Development Authority
OAQPS
Office of Air Quality Planning & Standards (USEPA)
OAR
Office of Air and Radiation (USEPA)
OMB
Office of Management and Budget
PAH
Polycyclic aromatic hydrocarbon
PFI
Pellet Fuels Institute
PM
Particulate Matter
PM2.5
Particulate Matter with diameter <= 2.5 micrometers ("fine particles")
PM ISA
Integrated Science Assessment for Particulate Matter
QQQQ
Subpart QQQQ of the 2015 RWH NSPS, and the wood heaters regulated under that Subpart (hydronic heaters, forced-air furnaces)
R&D
Research and development
RIA
Regulatory Impact Analysis
RWH
Residential Wood Heater(s)
SBREFA
Small Business Regulatory Enforcement Fairness Act
SRIA
Supplemental Regulatory Impact Analysis
VOC
Volatile organic compound
WESTAR
Western State Air Resources Council

2.0 	Legality of the Sell-Through Amendment under the Clean Air Act and other Statutes
Section 2 presents comment excerpts and summaries regarding the legal arguments both for and against the sell-through amendment, based on the Clean Air Act (CAA) and other statutes. This section also includes comments concerning the sell-through as a component of the best systems of emissions reduction (BSER) for wood heating devices, as well as comments critical of EPA's rationale for the sell-through as presented in the Agency's supplemental Regulatory Impact Analysis (RIA). 

2.1	The Sell-Through Amendment is Permissible under the CAA 
Section 2.1 presents comment excerpts and summaries that argue from a legal basis and contend that the sell-through amendment is permissible under the CAA and moreover required to cure a defect in the 2015 NSPS. Most comments included herein are from the industry trade group.

2.1.1 Comment: Nothing in the CAA limits EPA's authority to stagger compliance deadlines 
Several commenters (0063, 0051) urged the EPA to expand the sell-through period to apply to all types of wood heating devices, under both subparts AAA and QQQQ, noting that there is nothing in the CAA that limits EPA's authority to stagger compliance deadlines for the manufacture and sale of regulated appliances. One commenter (0063 p.2) noted that when EPA initially promulgated standards of performance for wood stoves in 1988, it included a two-year sell-through period for conventional, previously unregulated stoves, which the Agency estimated emitted about 60 to 70 grams per hour (g/hr) of PM. The commenters (0063, 0051) noted moreover that the Agency has extended compliance dates for prior NSPS rules for not only residential wood heating appliances, but also other source categories.

Response:
The EPA has considered these comments in support of the proposed sell-through periods and agrees that the agency has the authority to promulgate a sell-through period following the May 2020 Step 2 deadline. However, for the reasons explained in the final rule preamble and in this response to comment document, the EPA had decided not to promulgate any sell-through periods for the Step 2 standards. 
 
2.1.2 Comment: EPA has authority under Section 111 to revise the existing NSPS and cure defect in 2015 NSPS by adding sell-through provisions
One commenter (0063 pp.4-8) asserted not only that the EPA has authority under Section 111 of the CAA to establish different compliance or applicability dates in the NSPS, as supported by Agency precedent, but also that adding the sell-through cures a defect in the 2015 NSPS:

      Contrary to what some stakeholders claimed during the public hearing on the current
proposal, EPA has authority under CAA Section 111 to establish different compliance deadlines for the manufacture and sale of residential wood burning appliances. Section 111(b) of the Act establishes various deadlines -- e.g., for publishing a list of regulated source categories, promulgating initial standards, reviewing (and revising, if appropriate) standards. Although that section states that standards "shall become effective upon 
      promulgation," that language does not dictate when regulated sources must achieve compliance with such standards.
      Not surprisingly, EPA has long interpreted Section 111 as providing the Agency with the flexibility to establish compliance (or applicability) dates in NSPS rules that are different from the rules' effective dates. When EPA originally promulgated NSPS for residential wood heaters in 1988, it established two sets of compliance deadlines for the dates of manufacture and the dates by which regulated stoves must be sold: the first set of standards applied to stoves "manufactured on or after July 1, 1988, or sold at retail on or after July 1, 1990." The second set of standards applied to stoves "manufactured on or after July 1, 1990, or sold at retail on or after July 1, 1992." None of these dates lined up with that rule's February 26, 1988 effective date. Similarly in 2015, when EPA revised and expanded the NSPS for residential wood heaters, it once again established staggered compliance deadlines after the rule's May 15, 2015 effective date. Of particular relevance, although the Step 1 emissions limits became applicable to appliances manufactured on or after the effective date, room heaters and hydronic heaters that did not meet those Step 1 limits could continue to be sold at retail through December 31, 2015, so long as they were manufactured before the rule's effective date. In addition to the foregoing staggered deadlines, EPA delayed application of the deadlines for the Step 2 standards until May 15, 2020, a full five years after the effective date of the rule.
      The practice of staggering effective dates and compliance deadlines in NSPS rules is not unique to the residential wood heating industry. In the 2006 NSPS for stationary compression ignition internal combustion engines ("CI ICE"), EPA staggered the deadlines for the manufacture and installation of affected engines in a way that is virtually indistinguishable from the sell-through language that EPA has proposed in this rule. The CI ICE rule phased in increasingly stringent emission standards over several years such that the "engine model year in which the Tiers [took] effect varie[d] for different size ranges of engines." Owners and operators of engines were given a full two years after a new, more stringent standard took effect to continue installing previously manufactured engines that did not yet meet the new standard. Thus, for example, owners and operators had until December 31, 2008 to install engines that did not meet the applicable requirements for 2007 model year engines. To use another example, owners and operators had until December 31, 2014 to continue installing non-emergency stationary CI ICE with a maximum engine power of >19 KW (25 HP) and <56 KW (75 HP) that did not meet the applicable requirements for 2013 model year non-emergency engines.
      Notably, when EPA originally proposed the CI ICE standards, it gave owners and
operators only six months to install engines of a previous tier. When EPA finalized that rule, it extended the installation period to two years after receiving critical comments from stakeholders. To support that change, EPA explained that:
            EPA agrees with the commenters that the 6-month deadline for
installing engines of a previous tier is not long enough to allow for
the time that typically elapses between order and installation of an
engine and may prevent engine manufacturers from using up
existing inventories of engines. Therefore, EPA increased the time
limit to 24 months after the beginning of the model year.
      EPA recognized the need to account for market realities and to give engine manufacturers a sufficient amount of time to recoup their investments at each tier, rather than forcing companies to absorb losses from unsellable inventory. To hedge against the possibility that manufacturers would try to take advantage of this two-year lag time, EPA included "antistockpiling provisions similar to those used for nonroad engines to prohibit stockpiling of previous tier engines in the final rule." Under the anti-stockpiling provisions, manufacturers were permitted to "introduce into commerce uncertified engines or engines certified to earlier standards that were manufactured before the new or changed standards took effect until inventories are depleted, as long as such engines are part of normal inventory." The "normal inventory" standard was not an inflexible, one-size-fits-all number. The regulatory text explained, by way of illustration, that "if the engine manufacturers' normal industry practice is to keep on hand a one-month supply of engines based on its projected sales, and a new tier of standards starts to apply for the 2009 model year, the engine manufacturer may manufacture engines based on the normal inventory requirements late in the 2008 model year, and sell those engines for installation."
      While the 2006 CI ICE rule is perhaps the closest analog to EPA's current proposal, EPA has promulgated numerous NSPS rules for other source categories that contain delayed compliance deadlines. For instance, in the 2012 NSPS for the oil and natural gas sector, EPA gave "owners or operators . . . a 1-year phase-in beginning October 15, 2012 before the 95.0- percent control requirement" became applicable to storage vessel affected sources. To justify that later deadline, EPA explained that it "believe[d] this [was] necessary because of initial problems securing control devices that are manufacturer-tested and have appropriate documentation for determining control efficiency." In the 2005 NSPS for coal-fired electric utility steam generating units, EPA established a two-step compliance framework for regulated entities to achieve the emissions cap limits for mercury: "In the final rule, EPA has determined that the technologies necessary to achieve the emission cap limits for 2010 have been adequately demonstrated, and that the technologies necessary to achieve the 2018 caps have been adequately demonstrated to be available to achieve compliance with those limits by 2018." Finally, in the 2008 NSPS for stationary spark ignition internal combustion engines, EPA delayed several of the compliance deadlines well beyond the rule's effective date.
      One final point on EPA's statutory authority warrants a brief discussion. Nothing in the recent D.C. Circuit Air Alliance Houston decision restricts EPA's ability to revise the 2015 wood heater NSPS rule to provide for a two-year sell through period once the Step 2 standards become applicable. Unlike the delay rule at issue in that case, this proposal is not governed by CAA Section 307(d)(7)(B). Equally important, in Air Alliance Houston, the Court found that EPA had failed to explain why it was reaching different conclusions than it had in the underlying risk management plan rule and that EPA had instead delayed the effective date based on speculation about future amendments. That is not the case with EPA's current proposal. EPA has articulated an explanation (discussed below) as to why some of the assumptions in the 2015 wood heaters NSPS have proven to be incorrect.
      In fact, the proposed sell-through provisions would actually remedy a defect in the 2015 rule, i.e., the unexplained and arbitrary inconsistency between the lack of sell-through provisions in the Step 2 standards and the inclusion of such provisions in both the 1988 standards and the Step 1 standards. That EPA added language between the proposed and final 2015 rules to allow "sell-through" of hydronic heaters at Step 1 underscores that EPA continued to believe, on the date of the 2015 rule's promulgation, that allowing sell-through was important to avoid harm to regulated entities. It was especially arbitrary for EPA to simultaneously prohibit, without explanation, the sell-through of Step 1-compliant inventory for a period of time after May 15, 2020 in the very same final rule. As the D.C. Circuit has explained, "dissimilar treatment of evidently identical cases, on the same day, seems the quintessence of arbitrariness and caprice." 
      For all of these reasons, not only does EPA have the authority to revise the 2015 Rule to include sell-through provisions in 2020, such a revision is necessary to cure a legal deficiency in that rule.

Response:
The EPA has considered these comments in support of the proposed sell-through periods and agrees that the agency has the authority to promulgate a sell-through period following the May 2020 Step 2 deadline. However, for the reasons explained in the final rule preamble and in this response to comment document, the EPA had decided not to promulgate any sell-through periods for the Step 2 standards.

EPA's decision in 2015 to promulgate sell-through provisions for the Step 1 standards and not for the Step 2 standards is a comment on the final action that EPA took in 2015, and thus, is outside the scope of this rulemaking. EPA's supporting documentation for the 2015 NSPS provided relevant information regarding why a Step 2 sell-through after 2020 was not deemed necessary. Prior to the NSPS proposal in 2014 and as stated in the RIA (https://www.regulations.gov/document?D=EPA-HQ-OAR-2009-0734-1789, p. 5-10) and background Manufacturer Cost Impacts Memorandum (https://www.regulations.gov/document?D=EPA-HQ-OAR-2009-0734-1761, p. 10), manufacturers stated that model development takes anywhere from 8 to 18 months. Using the conservative number of 1.5 years (18 months) to bring Step 2 devices to market (while selling Step 1 devices), this leaves an additional 3.5 years (of the 5 years between Step 1 in 2015 and Step 2 in 2020) for developing additional fireboxes in the model line while selling a mix of increasing Step 2 and decreasing Step 1 heaters. Further, as EPA stated in the 2015 RTC (https://www.regulations.gov/document?D=EPA-HQ-OAR-2009-0734-1775, pp. 40-1, 277, 278), "all manufacturers were on notice as of November 2009 that this NSPS was being developed and that new emission standards would be required." In other words, manufacturers have been on notice for much longer than the 5 years between 2015 and 2020, regarding the need for development of cleaner models and related management of inventory. Furthermore, numerous commenters, in response to the 2014 NSPS proposal, argued that 5 years between Step 1 and Step 2 was much too long and asserted that a shorter phase-in was feasible and appropriate. For example, many argued for 2 to 3 years between Step 1 and Step 2 (https://www.regulations.gov/document?D=EPA-HQ-OAR-2009-0734-1775, pp. 97-8, 266-7, 301). Given all these considerations, EPA determined that 5 years between Steps 1 and 2 was sufficient. This period of time was conservative/long enough to allow Step 2 devices to enter the market ahead of the 2020 deadline and clear out Step 1 inventory, as in fact many manufacturers have been able to achieve.

2.2 	The Sell-Through Amendment is not Permissible under the CAA and other Statutes
Section 2.2 presents comment excerpts and summaries that argue from a legal basis and contend that the sell-through amendment is not permissible under the CAA, other statutes and Agency mandate and guidance. Most comments included herein are from state and local regulatory agencies, multi-jurisdictional organizations, state attorneys general, academia, and environmental, health and citizen organizations.

2.2.1 Comment: The proposal is arbitrary and capricious in violation of the Administrative Procedure Act
One commenter (0057 pp.11-16) asserted that EPA's proposal is arbitrary and capricious in violation of the Administrative Procedure Act and CAA requirements:

      An agency action is arbitrary and capricious, in violation of the Administrative Procedure Act, "if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Federal agency decision-making must be "reasoned"; "[n]ot only must an agency's decreed result be within the scope of its lawful authority, but the process by which it reaches that result must be logical and rational."
      
      As noted [elsewhere in comment 0057], U.S. EPA fails to provide any reasoned basis for its proposed amendment. The agency also fails to explain or justify its selection of a two-year sell-through period rather than a longer or shorter period.
      
      Changes in agency policy positions are permissible only when the agency provides reasoned justification for the change. This includes a reasoned explanation for its rejection of any previous factual findings: "In such cases it is not that further justification is demanded by the mere fact of policy change; but that a reasoned explanation is needed for disregarding facts and circumstances that underlay or were engendered by the prior policy."
      
      U.S. EPA's proposed amendment fails on multiple fronts. U.S. EPA demonstrates no factual or other reasoned basis for rejecting or revising the conclusions set forth in the rulemaking record for the NSPS. U.S. EPA entirely fails to consider important aspects of the issues, offers justifications that run counter to the evidence before the agency, and insufficiently explains the reasons for its change and rejection of earlier determinations.
      
      a. Ostensible "new issues" were considered in the 2015 rulemaking.
      
      U.S. EPA claims, as the basis for its proposed sell-through:
            
            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. Additionally, some 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.
      
      While agencies are entitled to change policy positions, such changes must be supported by reasoned explanation. "[T]he requirement that an agency provide reasoned explanation for its action would ordinarily demand that it display awareness that it is changing position."
      
      U.S. EPA presents the manufacturers' recycled complaints as new concerns that the agency had not previously considered and incorporated into its BSER and policy determinations. However, U.S. EPA considered and addressed these ostensibly new issues in its 2015 rulemaking. Citing the costs of research and development, and retail of the Step 2 heaters and particular burdens on small businesses, myriad manufacturers and trade associations submitted comments on the proposed NSPS requesting grandfathering, sell-through periods, a longer Step 1 period, or other flexibilities before full implementation of the Step 2 requirements. In particular, the Hearth, Patio & Barbecue Association (HPBA) commissioned and submitted a survey of distributors and retailers that it submitted along with its detailed comment letter. As relayed in the HPBA's comment letter, "[T]he majority of retailers felt that they needed 12 to 24 months to sell moderate and slow selling inventory." Moreover, HPBA asserted:
      
            [R]etailers' reluctance to buy models that are not given an unlimited sell-through period will have profound financial impacts on appliance manufacturers because many retailers will stop buying appliances they are not absolutely sure that they can sell, and the manufacturers will lose the revenue from the sales of these heaters; revenue that is needed to fund the design, testing and the launch costs for new NSPS compliant models.
      
      U.S. EPA fully considered these requests, providing some of the requested flexibilities (for example, the unusually long Step 1 period, "designed specifically with small businesses in mind"), and incorporating detailed responses to any denied requests into the NSPS rulemaking record. The agency incorporated several flexibilities into the final NSPS because "if production and sales were to be suspended while designing, testing, field evaluating and certifying cleaner models, the cost of potential lost revenues could be significant, which necessitates reasonable lead times for compliance with emission limitations." U.S. EPA also engaged in an extensive Small Business Advocacy Review process in advance of proposing the NSPS. Despite all of the consideration of business concerns, U.S. EPA wrote, "We have [] determined that the second step represents stronger emission levels achievable for all appliance types at reasonable cost, allowing 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." U.S. EPA does not now present any reasoned basis, new considerations, or new data that might justify altering this determination, and may not finalize amendments without so doing. U.S. EPA has also failed to contend with new evidence of feasibility suggests that BSER is even better-demonstrated than at the time the NSPS was promulgated.
      
      b. The proposal's costs would vastly outweigh its benefits.
      
      As discussed above, Clean Air Act section 111(b) requires U.S. EPA to demonstrate that any standard or revision it promulgates under the section, such as the proposed NSPS amendments, "reflects the degree of emission limitation achievable through the application of the best system of emission reduction," "consider[ing] the emission limitations and percent reductions achieved in practice." Given this, U.S. EPA may not justify its proposed revisions on the basis of cost savings or cost-effectiveness alone, as it attempts to do. Even if doing so were legally permissible, however, U.S. EPA fails to demonstrate that the proposed amendments would provide overall benefits or improve the cost-effectiveness of the NSPS. In fact, even U.S. EPA's own Supplemental Regulatory Impact Analysis (RIA)  -  which is outcome-seeking and flawed, as described [elsewhere in comment 0057]  -  demonstrates likely costs of the proposed amendment that dwarf its anticipated benefits. U.S. EPA estimates that the proposed amendment would generate average monetized particulate-related health impacts ranging from $94 million to $350 million per year, which would extend through the stoves' lifetime of 20 or more years. U.S. EPA estimates that the proposed sell-through would generate average benefits (industry cost savings) of $8.3 to $10.6 million per year, which would begin the year before the Step 2 compliance deadline (2019) and extend through the two years of the proposed sell-through period (2020-2022). Comparing potential costs of $94 million to $350 million per year over 20 years (anticipated costs) versus potential benefits of $8.3 to $10.6 million per year over three years (anticipated benefits) produces an estimated cost-benefit ratio of between 59-to-1 and 123-to-1. It is difficult to conceive how a regulatory amendment with total estimated costs that are 59 to 123 times greater than its total estimated benefits could comprise "reasoned decision-making" that would satisfy the APA.
      
      Where, as here, rulemaking is predicated on cost savings, failure to quantify quantifiable costs of the rulemaking, as described [elsewhere in comment 0057], also amounts to "fail[ure] to consider an important aspect of the problem" in contravention of the APA.
      
      Relatedly, U.S. EPA fails to acknowledge that it is proposing to remove protections from the books in this context: It analyzes the proposed amendment as a less-protective regulatory option than the NSPS, citing "foregone benefits," rather than acknowledging that it is considering abrogating a rule now in force.

Likewise, another commenter (0053 p.5) maintained that the proposal runs afoul of the APA, when they stated:

      In order to avoid arbitrary and capricious rulemaking under the Administrative Procedure Act ("APA"), an agency must "examine the relevant data" and "articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." When delaying the implementation of a preexisting rule, agencies must "cogently explain" the reasoning behind the suspension. The suspension of a rule represents a reversal, for which the agency must provide a "reasoned explanation" for dismissing the "facts and circumstances that underlay" the original rule. In issuing the Proposed Rule, EPA failed to meet these basic requirements. The agency makes no attempt to explain what circumstances have changed since the 2015 NSPS was finalized that now necessitate a revision of the 2020 compliance date. Nor does it make any effort to demonstrate the extent of the alleged problem of stranded heater inventory.

Other commenters (0066 pp.10-11, 0137) similarly asserted that  - 
      The Proposed Rule is Arbitrary and Capricious
      Aside from being unlawful under the Clean Air Act, the proposed rule is also arbitrary and capricious. "A reviewing court shall hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law[.]" 5 U.S.C. § 706; accord 42 U.S.C. § 7607(d)(9)(A). "[A] rule is arbitrary and capricious if the agency: (1) has relied on factors which Congress has not intended it to consider, (2) entirely failed to consider an important aspect of the problem, (3) offered an explanation for its decision that runs counter to the evidence before the agency, or (4) offers an explanation that is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Am. Wild Horse Pres. Campaign v. Perdue, 873 F.3d 914, 923 (D.C. Cir. 2017) (internal alterations omitted); see also State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (same).
      Furthermore, "an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change[.]" State Farm, 463 U.S. at 42. The requirement that "[a]n agency [must] provide reasoned explanation for its action would ordinarily demand that it display awareness that it is changing position." F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009). It "must show that there are good reasons for the new policy." Id. Where, as here, a new policy rests on factual or legal determinations that contradict those underlying the agency's prior policy, the agency must provide a more detailed explanation for its policy. Id. "Unexplained inconsistency" in agency policy is "a reason for holding an interpretation to be an arbitrary and capricious change from agency practice." National Cable & Telecommunications Ass'n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005).

Response:
The EPA has considered these comments in opposition to the proposed sell-through periods following the May 2020 Step 2 deadline, which are largely based on legal arguments and contend that the sell-through amendment is not permissible under the CAA, other statutes and Agency mandate and guidance. For the reasons explained in the final rule preamble and in this response to comment document, the EPA has decided not to promulgate any sell-through periods for the Step 2 standards, and therefore is not providing detailed written responses to these specific comments here.
 
2.2.2 Comment: The proposal fails to meet the procedural requirements of the CAA 
One commenter (0057 pp.7-11) asserted that the proposal fails to meet the procedural requirements of CAA section 307(d):
      Clean Air Act section 307(d) lays out procedural requirements for most rulemaking under the Act, including New Source Performance Standards. It requires that an NPRM be "accompanied by a statement of its basis and purpose." This must include:
            [A] summary of (A) the factual data on which the proposed rule is based; (B) the methodology used in obtaining the data and in analyzing the data; and (C) the major legal interpretations and policy considerations underlying the proposed rule . . . . All data, information, and documents referred to in this paragraph on which the proposed rule relies shall be included in the docket on the date of publication of the proposed rule.
      The proposed sell-through amendment violates these procedural requirements, as U.S. EPA has failed to provide data substantiating its proposal and failed to supply major legal interpretations and policy considerations underlying the proposed amendment.
      a. U.S. EPA fails to provide factual data or otherwise justify the proposed amendment.
      U.S. EPA bases its proposed sell-through exclusively on unsubstantiated assertions from a handful of industry sources claiming that they will lose business if no sell-through is provided. U.S. EPA does not appear to have inquired about or considered whether these manufacturers made a good-faith effort to produce Step 2-compliant heaters on a timeframe that would allow for retail sale by the Step 2 deadline or otherwise avoid the economic harms they claim to anticipate. The agency provides no evidence to demonstrate that stranded assets exist in reality, the quantity of those assets, the monetary losses that are estimated to be incurred by businesses, or potential adverse outcomes of this revenue loss (job loss, bankruptcy, etc.). Instead, the agency simply applies unsupported assumptions to the data underlying promulgation of the NSPS (as detailed further [elsewhere in comment 0057].)
      Nor does U.S. EPA provide any explanation or reasoned basis for its proposal of a two-year sell-through, as opposed to a longer or shorter period, let alone any supporting data.
      b. Requests for comment on additional topics may attempt to evade procedural requirements.
      U.S. EPA has requested comment on certain potential amendments without proposing them, including an unspecified potential sell-through period for new residential wood heaters after the May 2020 compliance date and unspecified potential amendments to the minimum pellet fuel requirements in the NSPS. U.S. EPA's choice to include these requests for comment in the NPRM is noteworthy, given U.S. EPA's concurrent publication of an Advance Notice of Proposed Rulemaking (ANPRM) to solicit input on a variety of potential NSPS amendments. This approach suggests that U.S. EPA may intend to finalize amendments based on these comment solicitations in the NPRM, which would circumvent the Clean Air Act section 307(d) requirements for proposed rulemakings. This is particularly concerning given that U.S. EPA acknowledges, in response to pressure from the White House Office of Management and Budget (OMB) to propose these amendments, having no technical or legal basis for doing so:
            EPA is not proposing a sell-through for wood/pellet stoves because 18% of 110 non-catalytic wood stoves and 89% of 9 catalytic and hybrid wood stoves already met the Step 2 emissions limits in November 2014, and, as noted above, as of March 2018, a total of 78 models meet the limits. (In comparison, there are many fewer hydronic heaters and forced-air furnaces which meet the Step 2 emission limits.) Thus, there is no compelling technical (or legal) basis, and the [OMB] commenter has not provided any such basis, for proposing a sell-through for wood stoves.
      After noting that U.S. EPA cannot justifiably propose these amendments, however, the agency concludes that it could still finalize them based on public comments: "EPA is, however, taking comment on the issue and could, if sufficient information is provided during the public comment period, provide a sell-through for wood stoves in its final action." Finalizing a sell-through for residential wood heaters or amendments to the NSPS pellet fuel requirements, without issuing a supplemental proposal that meets the requirements of Clean Air Act section 307(d), would comprise an end-run of those requirements. CARB [the California Air Resources Board] would be denied the opportunity to comment on the specifics of any potential sell-through, as none are provided in this NPRM.
      U.S. EPA also misinterprets the burden of amending a regulation, both under Clean Air Act section 307(d) and under the Administrative Procedure Act (APA) (as detailed [elsewhere in comment 0057]). Regarding the potential unspecified pellet fuel amendments, the agency requests both "comments that both support the current requirements (and explain why they are necessary) and comments that advocate that the requirements be removed or revised." However, no supportive comments are needed to preserve the legal status quo; the Clean Air Act and the APA give U.S. EPA the onus of proposing and justifying amendments to duly promulgated regulations.
      c. U.S. EPA fails to acknowledge the partial legal and policy basis for its proposal.
      In violation of the Clean Air Act section 307(d) requirement to provide "the major legal interpretations and policy considerations underlying the proposed rule," U.S. EPA provides no explanation of the legal authority for its proposed sell-through. The agency also fails to acknowledge the partial basis for its proposal and comment solicitations in industry challenges to the NSPS. Shortly after the NSPS was finalized, industry groups filed consolidated challenges to the certification test methods prescribed by the rule, among other issues. In an April 2018 declaration supporting a U.S. EPA motion to extend briefing deadlines, Peter Tsirigotis, Director of the U.S. EPA Office of Air Quality Planning and Standards, explained that U.S. EPA would promulgate the NPRM partly as a result of these challenges:
            Since the filing of this challenge to the 2015 Wood Heaters rule, and in particular over the past 12 months, EPA and Petitioners have engaged in discussions concerning the issues that Petitioners have raised with respect to the 2015 Wood Heaters rule that is the subject of this litigation. EPA has now determined that there are certain issues concerning the rule that warrant an opportunity for public comment, and which may lead to revisions to the rule. These issues include issues raised by Petitioners in this litigation and, as well, issues that EPA has itself identified since the rule was promulgated in 2015. As a consequence, EPA is at this time preparing a sequence of Federal Register notices with respect to the 2015 Wood Heaters rule[.]
      A fact sheet about the proposal and ANPRM on U.S. EPA's website (not incorporated into the rulemaking record), also identifies "major legal interpretations and policy considerations underlying the proposed rule" that were not included in the NPRM or its docket, in apparent violation of Clean Air Act section 307(d). The fact sheet explains, under the heading "Basis for Actions," that U.S. EPA has initiated review and potential revision of certain certification test methods and procedures required by the NSPS. "Because this is a technically complex undertaking that is expected to take several years to complete," the fact sheet continues, "the agency will in the meantime be taking steps to provide relief to wood heater manufacturers and retailers so that they are not forced to make inefficient  -  and possibly, ineffective  -  use of their resources in the interim." This explanation, the apparent actual basis for the proposed action, appears nowhere in the NPRM or rulemaking docket. (It also appears to be at least somewhat disingenuous, since U.S. EPA first published a discussion paper and solicited comment on certification test methods nearly three years ago, which itself is not mentioned in either the NPRM or ANPRM or placed within or linked to either docket.)
      d. The public comment deadline violates Clean Air Act section 307(d)(5).
      Clean Air Act section 307(d)(5) requires the Administrator to "give interested persons an opportunity for the oral presentation of data, views, or arguments, in addition to an opportunity to make written submissions;" and to "keep the record of such proceeding open for thirty days after completion of the proceeding to provide an opportunity for submission of rebuttal and supplementary information." In violation of this thirty-day requirement, U.S. EPA held a public hearing on the NPRM on December 17, 2018, but closed the comment period on January 14, 2018.
Commenter 0057 (excerpted above) provided an addendum comment during the comment period's extension (0130), contending that the EPA violated CAA section 307(d) by not referencing litigation from industry trade groups as a basis for the proposed sell-through:

      In our comments [0057], CARB noted that the NPRM fails to meet the Clean Air Act section 307(d) requirement to provide "the major legal interpretations and policy considerations underlying the proposed rule[.]" In part, this is because U.S. EPA failed to acknowledge the partial basis for its proposal in industry challenges to the standards, including Hearth, Patio & Barbecue Association v. EPA. CARB's comments included examples of U.S. EPA documents that cite this litigation as the motivation for some of the proposed amendments.
      
      On February 5, 2019, U.S. EPA filed a motion in Hearth, Patio & Barbecue Association v. EPA to hold the case in abeyance pending finalization of the NPRM. The motion relies on a U.S. EPA manager's accompanying declaration, which states that the NPRM was specifically published "to propose and take comment on amendments to the 2015 Wood Heaters rule related to certain issues raised by the Petitioners in this litigation."
      
      This statement further demonstrates that the industry challenge to the performance standards constitutes a significant consideration underlying the proposed amendments. U.S. EPA's failure to reference the litigation in explaining the basis of its proposal violates the requirements of Clean Air Act section 307(d).

Other commenters (0066 p.10, 0137) similarly asserted that  - 
      EPA Failed to Explain the Legal Basis for the Proposed Sell-Through Period, as Required Under Section 307(d) of the Act
      EPA's failure to explain its legal rationale or cite any legal authority in support of its proposed sell-through provision also violates section 307(d) of the Act, which sets forth the requirements for agency rulemakings. Section 307(d)(3)(C) states that EPA shall include in the preamble of a proposed rule "the major legal interpretations . . . underlying the proposed rule." 42 U.S.C. § 7607(d)(3)(C); see also 1 C.F.R. § 18.12(a) (federal agencies must include "basis and purpose" for a proposed rule). Yet, the preamble of this proposal contains no explanation of EPA's legal authority to allow a sell-through period. This constitutes a violation of section 307(d). At a minimum, therefore, EPA must supplement its proposed rule with an explanation of its legal authority and extend the public comment period to allow for an opportunity for public input on the agency's rationale.

Likewise, another commenter (0054/0200 pp.10-11) questioned the basis of the proposal as well as the length of the comment period  - 
      EPA's proposal fails to clearly articulate a legal, environmental or economic basis to move forward with the rule changes. These are well understood and basic elements that federal regulatory agencies must include to ensure informed public comment.
      Finally, we note that due to the government shutdown and EPA's earlier refusal to extend the comment period for this proposal, EPA has not fully provided answers to our questions seeking greater clarification of its proposed changes and its Supplemental RIA approach. For these and all the reasons covered in our comments, NESCAUM urges EPA to abandon this proposal.

      Response: 
The EPA has considered these comments in opposition to the proposed sell-through periods following the May 2020 Step 2 deadline, which are largely based on the argument that EPA failed to follow certain procedural and legal requirements. The EPA does not agree with these specific arguments regarding failing to follow such procedural and legal requirements. Nevertheless, for the reasons explained in the final rule preamble and in this response to comment document, the EPA has decided not to promulgate any sell-through periods for the Step 2 standards and therefore is not providing detailed written responses to these specific comments here.
 
2.2.3 Comment: The proposal imposes public health and environmental harm on society contrary to CAA's statutory mandate and Agency guidance
Many commenters (0045, 0053, 0054/0200, 0059, 0064, 0066, 0068, 0073, 0074, 0075, 0137, 0142) contended that the adverse public health impacts and environmental harm to society caused by the sell-through  -  even by the Agency's own underestimation of adverse impacts  -  is contrary to the CAA's statutory mandate and Agency guidance.

For example, one commenter (0053 pp.3-5) asserted that finalizing the sell-through proposal "would be arbitrary and capricious as it would, even by EPA's own flawed economic analysis, impose net costs on society in a way that ignores the Agency's statutory mandate as well as longstanding agency guidance."  -  
      The analysis performed by the agency in the Supplemental RIA significantly underestimates the costs of the Proposed Rule; these deficits are discussed in detail [elsewhere in comment 0053]. Yet even under EPA's faulty analysis, it is clear that the Proposed Rule will generate societal costs that outweigh its benefits, which both violates the Clean Air Act's statutory mandate and Executive Order 12,866's agency guidance.
      The Step 2 emissions limits imposed by the 2015 NSPS are expected to greatly reduce human exposure to ambient fine particulate matter (PM2.5). PM2.5 exposure contributes to a number of detrimental health effects, including heart attacks, strokes, asthma exacerbation, and an array of other respiratory problems. Both short- and long-term exposure to PM2.5 increases the risk of premature death. EPA estimates that the Proposed Rule would increase PM2.5 emissions between 7,740 and 11,640 tons over the 20-year model life of wood heaters as compared to the compliance schedule established by the 2015 NSPS. EPA estimates that the costs to human health from these forgone emissions reductions would be between $250 million and $860 million in the first three years of the Proposed Rule's implementation alone. Taking the compliance costs into account, on net, the rule will impose in present value terms societal costs of between $70 million and $310 million on society in the form of increased morbidity and premature death due to human exposure to particulate emissions from wood heaters.
      But the statutory purpose of the NSPS emissions limits is to "promote the public health and welfare." A regulation that "does significantly more harm than good" cannot be consistent with this mandate. While EPA has some discretion in its implementation of the Clean Air Act's Section 111 mandate, that discretion must be exercised in a reasonable manner and be grounded in the agency's statutory authority. Yet EPA has pointed to nothing in the Clean Air Act that would support the view that the agency has discretion to impose public health and environmental harms on society, as the Proposed Rule would.
      Moreover, Executive Order 12,866 mandates that agencies select the regulatory approach "that maximize[s] net benefits (including potential economic, environmental, public health and safety [impacts])" unless a specific approach is statutorily prescribed. Further, each agency is directed to "tailor its regulations to impose the least burden on society." The agency clearly violates this guidance here. Even when the cost savings to industry from delayed compliance are subtracted from the value of forgone health benefits, the Proposed Rule remains net costly to society  -  on the order of tens to hundreds of millions of dollars in just three years. Executive Order 12,866 further advises that when agencies calculate the costs and benefits of a contemplated action they should also consider "the alternative of not regulating." EPA could spare the imposition of massive health costs on the American people by declining to finalize this Proposed Rule. The agency has provided no rational explanation for declining the no-regulation alternative.

Likewise, other commenters (0066 pp.7,11, 0137) noted that  - 

      EPA's cost/benefit analysis in support of the proposed two-year sell-through provision evidenced a change in agency policy, prioritizing industry cost savings over public health benefits. For example, EPA proposed the two-year sell-through provision despite finding that the cost savings for industry (termed "benefits" under the agency's revised approach) would amount to about $10 million annually, compared to the "costs" (foregone public health benefits) of $90 million to $230 million. ...
      EPA made several errors in its analysis supporting the proposed rule and failed to provide a good reason for the change in its rule providing for a five-year phase in period for compliance with step two standards (without a two-year sell through). In promulgating the 2015 NSPS, EPA recognized the dangers of PM2.5 emissions. EPA estimated that the 2015 standards would reduce premature deaths by 360 to 810 people, prevent 180 emergency room visits, and avoid 48,000 lost workdays. Those dangers are still present, and EPA does not even try to argue that the proposed rule will have any health benefits. EPA's lack of justification for the delay in implementation and disregard of the serious public health concerns the statute aims to protect is arbitrary and capricious. See Air All. Houston v. Envtl. Prot. Agency, 906 F.3d 1049, 1066-67 (D.C. Cir. 2018) (finding EPA decision to change the effective date of a rule was arbitrary and capricious); Clean Air Council v. Pruitt, 862 F.3d 1, 8 (D.C. Cir. 2017) (finding EPA's decision to stay a rule was arbitrary and capricious).
      Instead, in the proposed rule, EPA admits that the costs in foregone health benefits ($90 million to $230 million) of modifying the rule outweigh the benefits in savings to manufacturers ($10 million) by a factor of between nine and twenty-three to one. 83 Fed. Reg. at 61,583. Although this ratio of benefits to public health compared to industry compliance costs is less than EPA found in promulgating the 2015 NSPS (nearly 100:1), EPA has not offered any reasoned explanation for why it is now prioritizing cost savings to industry that still pale in comparison to the public health benefits that will be lost.

Another commenter (0068 p.3) similarly asserted that  - 

      The NPRM is in direct contradiction to the Clean Air Act's goal of improving air quality,
protecting the environment, and safeguarding human health. EPA's assessment of
environmental and health impacts is grossly inadequate and given little regard
compared to the cost savings to manufacturers of wood burning devices. The NPRM is
unnecessary since the 2015 NSPS rulemaking and supporting documentation address
all of the issues raised therein.

Another commenter (0059 p.2) noted that  - 

      The result of this proposal will be that new but inefficient heating devices sold during the compliance extension are in operation for another 20 years, and people lose with bad air quality. The EPA's own truncated assessment of the benefits to industry and the cost of the health impacts from unmitigated wood smoke demonstrates this imbalance: the public health cost is almost four times more than the benefit to industry. If EPA had calculated the public health costs by accounting for the full 20 years that non-compliant stove would be operating, total public health costs would much greater.

Likewise, a commenter (0064 p.2) pointed out that  - 

      The implementation of the proposed two-year sell-through for forced air furnaces and hydronic heaters is estimated to result in 257 tons of PM2.5, 271 tons of VOC and 1444 tons of CO being released compared to implementation of the 2015 NSPS as adopted. The annual average cost of these emissions for years 2019 to 2022 in terms of the forgone health benefits is estimated at a range of $70 to $210 million dollars (2016$). The annual average cost savings to industry for 2019-2022 is $8.3 million (2016$). So, the estimated short-term savings for a single industry are achieved at a societal cost that is at least an order of magnitude higher. Given that the estimates are only for a fraction of the lifetime of the furnaces and heaters, the actual costs are likely higher. 

Similarly, another commenter (0073 pp.1-2) noted that  - 

      We note with concern that EPA's own analysis that the proposed delay implementation of wood heater rule shows that delay would have a negative total economic impact on the U.S. economy. The 2015 final rule for wood stoves and heaters was estimated by EPA to produce an economic benefit of $100 dollars for each $1 of implementation costs. For the proposed rule under consideration, EPA has taken a number to steps to intentionally, and in our opinion, inappropriately, reduce the economic benefits yield from implementation of the 2015 rule. Even with biased analysis of the proposed rule under consideration, EPA analysis estimates the foregone environmental benefits caused by delayed implementation of the 2015 rule outweigh industry savings by 10 to 20 times. EPA's proposal to move forward with delayed implementation of the 2015 rule undermines the Administration's claims of supporting costs effective regulatory policy.

Another commenter (0054/0200 p.9) asserted that  - 

      Finally, we note that according to the Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA), "Cost-benefit analysis as required by EO 12866 remains the primary analytical tool to inform specific regulatory decisions. Accordingly, except where prohibited by law, agencies must continue to assess and consider both the benefits and costs of regulatory and deregulatory actions, and issue such actions only upon a reasoned determination that benefits justify costs." Given that the public health and environmental benefits are far greater than the cost to industry for complying with existing timeline in the NSPS, EPA cannot justify the proposed changes according to this directive.

Likewise, another commenter (0075 pp.5-6) contended that  - 
      EPA's analysis of the benefits and burdens of the proposal is arbitrary and capricious and further undermines the basis for the proposed sell-through period.
      Though the proposed rule is unlawful in any event for the reasons given in section I [of DCN 0075], EPA's analysis of the benefits and burdens of the proposal further undermines the already unsound basis for the proposed action. That analysis is itself arbitrary and capricious in several respects. In calculating the harm the proposed sell-through period will inflict, EPA ignores that the impacted wood burning devices will emit additional air pollution for decades, not just during the period in which EPA proposes to permit their sale. EPA also underestimates the extent to which allowing a sell-through period will increase the shipments of Step 1 compliant units relative to Step 2 compliant units. Yet even with these defects, EPA's analysis of the costs and benefits of the proposed sell through period shows that the proposed action imposes costs that are far greater than the benefits EPA attributes to the delay. No matter how much EPA tilts the playing field, the proposed sell through period makes no sense. ...
      
      Despite these glaring errors that skew the agency's analysis in support of the proposed action, the cost reductions EPA claims the proposed sell-through period will provide to manufacturers are far less than the economic value of the harms delaying the Step 2 standards will impose. EPA concludes that the total present value of the cost savings resulting from the proposal is $25 to $29 million, while the present value of the foregone  -  and arbitrarily truncated  -  particulate matter reduction benefits ranges from $250 to $860 million. Supp. RIA at 8, 12. In sum, EPA's proposed sell-through period is not only unlawful, it is manifestly unreasonable.

A commenter testified at the public hearing (0142 p.32) that  - 
      Regarding human health, EPA's analysis supporting the 2015 standards estimated that these standards would reduce premature deaths from wood-burning air pollution by between 360 to 810 people, prevent 180 emergency room visits, and avoid 48,000 lost workdays. In its proposed sell-through, EPA admits that the costs of changing the rule outweigh the savings by a ratio of approximately ten to one.
One commenter (0045 p.3) compared the public health benefits of the 2015 NSPS to the benefits to industry of the NPRM, as cited by the EPA  - 

      EPA estimated that the annual PM2.5 public health benefits of the 2015 NSPS range from $3.4 to $7.6 billion and the estimated costs totaled $45.7 million, a net benefit between $74 and $165 for every dollar spent.[cites 2015 NSPS] This is in contrast to the $8.3 million benefit to manufacturers and retailers and increased public health cost (or foregone benefits) of $94 to $210 million resulting from the proposal. [cites NPRM]

Another commenter (0074 p.6) concluded that  - 

      The Regulatory Impact Analysis (RIA) estimates health costs of the proposed action to be 10 to 40 times greater per year for the life of a stove (20-30 years) than the one-time benefit to manufacturers. That health burden accrues to states and counties in excess deaths and illness and we find the disparity in impact to "benefit" to be unconscionable.

      Response: 
The EPA has considered these comments in opposition to the proposed sell-through periods following the May 2020 Step 2 deadline. For the reasons explained in the final rule preamble, and in this response to comment document, the EPA has decided not to promulgate any sell-through periods for the Step 2 standards and therefore is not providing detailed written responses to these specific comments here.
 
2.2.4 Comment: EPA does not have authority to extend a sell-through period under the CAA or under consumer protection laws 
Multiple commenters (0054/0200, 0065, 0066, 0068, 0137, 0142) contended that not only is the sell-through not permissible under the CAA, but its implementation would result in consumer fraud, because the owners and operators who install non-compliant wood heating devices after May 15, 2020 would be in violation of the NSPS.

For example, commenters (0066 pp.8-12, 0137) asserted that EPA lacks the legal authority under the CAA Sections 111(b) and 111(e) to allow a sell-through period, despite the sell-through allowed in the 2015 NSPS  -  
      The States oppose the proposed sell-through provision because it would violate the Clean Air Act and lead to increased particulate matter pollution that harms our residents. The proposed rule, if finalized, would violate the Act on substantive and procedural grounds. EPA lacks authority under section 111(b) of the Act to allow a sell-through period, and section 111(e) of the Act would prohibit installation and operation of step one wood-burning devices after May 15, 2020. ... Furthermore, the sale of wood-burning devices that consumers cannot lawfully operate may constitute consumer fraud under state law.
      EPA Lacks Authority under the Clean Air Act to Allow a Sell-Through Period
      Nothing in section 111(b) of the Clean Air Act, or any other provision of the Act, allows EPA to issue a NSPS and then permit manufacturers and retailers to continue to sell non-compliant devices after a standard takes effect. See Michigan v. E.P.A., 268 F.3d 1075, 1081 (D.C. Cir. 2001) ("[A]n administrative agency's power to promulgate legislative regulations is limited to the authority delegated by Congress."). Tellingly, and as discussed further below, EPA cites no legal basis in the preamble of the proposal for authorizing the sell-through of noncompliant units.
      The lack of explicit authority for EPA to grant a sell-through period contrasts with other statutes. For example, in setting standards for formaldehyde emissions from composite wood products, Congress allowed a sell-through period of 180 days for existing inventory. 15 U.S.C. § 2697(d)(3)(A); see Sierra Club v. Pruitt, 293 F. Supp. 3d 1050, 1059 (N.D. Cal. 2018) (holding that EPA could not delay implementation past the 180-days for existing inventory authorized by the statute). The absence of such authority in section 111 should be given effect.
      The proposed sell-through provision is also inconsistent with the language in section 111(b). Specifically, section 111(b)(1)(B) states that "[s]tandards of performance or revisions thereof shall become effective upon promulgation." Id. § 7411(b)(1)(B) (emphasis added). Accordingly, the Act indicates that any NSPS takes effect on its promulgation and applies to all new sources. It does not authorize EPA to allow continued sale of non-compliant devices with an applicable performance standard. EPA's attempt to create a work around to allow new sources to avoid the May 2020 effective date is inconsistent with the statutory scheme.
      To the extent EPA relies on its previous, seven-month, sell-through provision contained in the 2015 rule for its legal authority, it is incorrect. That shorter sell-through provision was not challenged in court, and past agency practice cannot provide a valid legal basis for an agency action that is unauthorized by the governing statute. See Wilderness Soc. v. Morton, 479 F.2d 842, 865 (D.C. Cir. 1973) ("An administrative practice which is plainly contrary to the legislative will may be overturned no matter how well settled and how long standing.").
      The Clean Air Act Prohibits Installation and Operation of Non-Compliant Devices
      Even if EPA had the authority to allow a sell-through period, section 111(e) of the Act still prohibits owners from installing and operating new non-compliant wood-burning devices. "After the effective date of standards of performance promulgated under this section, it shall be unlawful for any owner or operator of any new source to operate such source in violation of any standard of performance applicable to such source." 42 U.S.C. § 7411(e). As explained below, the installation of a new wood boiler, furnace, or heater by an owner after May 15, 2020 would make it a new source that would have to comply with any "applicable" standard under section 111, including the step two standards.
      Under EPA's regulations implementing section 111, a wood-burning device sold and installed after May 15, 2020 would be a "new source" subject to the step two standards. A new source is "any stationary source, the construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this section which will be applicable to such source." Id. § 7411(a)(2). The devices would become new sources at the time of installation by the owner because construction includes installation. See 40 C.F.R. § 60.2 ("Construction means fabrication, erection, or installation of an affected facility.").
      Although manufacturers would have built the wood boiler or furnace before May 2020, the owner or operator who purchased the device after May 2020 would neither have "undertaken a continuous program of construction" nor entered into a contract for construction of the device. See 40 C.F.R. § 60.2. The actions of the owner, not the manufacturer, control whether the wood boiler or furnace is a new source. See 42 U.S.C. § 7411(a)(2) (defining new source); 40 C.F.R. § 60.2 (defining commenced to include actions by the owner). Section 111(e) prohibits operation of a new source by an owner or operator, which is "any person who owns, leases, operates, controls, or supervises a stationary source." Id. § 7411(a)(5). Here, that definition would therefore apply to a consumer who purchases and installs a wood-burning device, making it unlawful for the owner to operate a noncompliant device purchased after May 15, 2020.
      Governing case law under section 111 supports the conclusion that step one-compliant devices sold after May 2020 would be considered new sources, not existing sources. For step one devices bought after May 2020, the owner would not have been involved with constructing the boiler before the NSPS took effect. See United States v. Painesville, 644 F.2d 1186, 1187, 1188 n.2 (6th Cir. 1981) (holding that a coal boiler was a new source because it was built after a NSPS went into effect). Similarly, it is unlikely that the owner would have contracted to buy the wood-burning device before it arrives in a retail show room. See Sierra Pacific Power Co. v. E.P.A., 647 F.2d 60, 66 (9th Cir. 1981) (finding a boiler was a new source because there was no contract for construction before the NSPS). Except in the odd circumstance where the owner entered into a purchase contract before May 2020, but bought and installed the step one-compliant devices after May 2020, there would be no contract for sale before the step two NSPS took effect. As in Painesville and Sierra Pacific Power, the step one devices would therefore qualify as new sources.
      Furthermore, in the proposed rule, EPA admits that the 2015 NSPS (including the step two standards) apply to not only manufacturers and retailers but also owners and operators. See 83 Fed. Reg. at 61,574, 61,578. EPA cannot now deny that owners and operators would be subject to the step two NSPS, and therefore could not lawfully install and operate step one-compliant devices after May 2020.
      As a newly-installed wood boiler or forced-air furnace would be a new source, the NSPS would be "applicable" to it. Thus, the Act prohibits operation of any wood-burning device bought and installed after May 15, 2020 that does not comply with the step two standards. See 42 U.S.C. § 7411(e); Painesville, 644 F.2d at 1187, 1188 n.2, 1190 (allowing enforcement under section 111(e) for a new source). ...
      Finally, in addition to the numerous problems with the proposal under federal law outlined above, EPA's proposed sell-through provision would also create potential consumer fraud issues under state law. As explained above, if EPA allowed sale of new noncompliant wood boilers and forced-air furnaces past May 15, 2020, it would still be illegal under section 111(e) for owners to install and operate them. Failure by retailers to disclose this issue to consumers may constitute consumer fraud under state laws. See, e.g., N.Y. General Business Law § 349; see also People ex rel. Spitzer v. Applied Card Sys., Inc., 894 N.E.2d 1, 6 (N.Y. 2008) (holding that federal law did not preempt the state Attorney General's ability to seek penalties and restitution for consumer frauds). EPA could avoid these consumer fraud issues by not finalizing the proposed sell-through provision.
Another commenter (0054/0200 p.3 and public hearing testimony 0142 p.23) similarly asserted that EPA does not have the legal authority under Section 111 of the CAA to extend a sell-through period, and that doing so would also raise consumer protection issues  - 

      NESCAUM opposes any sell-through period during which retailers can continue to sell newly manufactured or existing inventory of Step 1 compliant hydronic heaters and forced-air furnaces after May 2020 when the Step 2 standards come into effect. CAA §111(b)(1)(B) requires that the performance standards be effective upon promulgation of the NSPS or revisions thereof. Consequently, EPA lacks the legal authority to extend the period by which units that do not meet the Step 2 requirements can be sold after May 2020. Further, CAA §111(e) makes it unlawful to operate a new source in violation of a performance standard. Consequently, the sell-through provision could also raise legal issues under state consumer protection laws. Selling Step 1 heating devices that owners could not lawfully operate for their intended purpose may constitute consumer fraud.

Likewise, another commenter (0065 p.5) noted that the "CAA Section 111 is clear in stating that NSPS must take effect upon their promulgation; EPA has not identified a mechanism that would allow for a sell-through that sanctions violations of the NSPS." A commenter (0142 pp.30-33) similarly testified at the public hearing:
      
      [T]he proposed sell-through provision is unlawful under the Clean Air Act because Congress did not authorize EPA to adopt a sell-through period after the effective date of a New Source Performance Standard. ... Lastly, the proposed sell-through provision would enable retailers to sell wood-heating devices that the buyers could not legally operate, raising consumer fraud concerns. ... Regarding the unlawfulness of the sell-through provision, EPA lacks the statutory authority to adopt such a provision. The Clean Air Act authorizes EPA to adopt New Source Performance Standards and to establish the effective date of those standards, but does not authorize a sell-through provision for devices that no longer comply with an applicable standard. Under the Clean Air Act, operation of the new non-compliant stoves after May 2020 would be illegal, regardless of whether EPA allowed a sell-through period. Under section 111 of the Clean Air Act, it is unlawful to operate a new source in violation of a performance standard. Case law also confirms that operating a new source that does not comply with the performance standards violates section 111(e). Accordingly, the sell-through provision would raise legal issues under state consumer protection laws. Selling Step 1 heating devices that owners could not lawfully operate for their intended purpose may constitute consumer fraud. These legal problems are easily avoided by abandoning the sell-through proposal.

Another commenter (0068 p.5) similarly argued that a sell-through could subject consumers to enforcement action, because the consumer, as an operator, would be in violation of the U.S. Code governing new stationary sources  - 

      The proposed two-year sell-through provision, if adopted, could subject
homeowners to violations of 42 U.S. Code §7411, "standards of performance for
new stationary sources":
      "(e) Prohibited Acts. After the effective date of standards of performance
promulgated under this section, it shall be unlawful for any owner or operator
of any new source to operate such source in violation of any standard of
performance applicable to such source."(emphasis added)

Finally, contrary to assertions made in Section 2.1.2, a commenter (0057 p.5) notes that "It is not evident that a sell-through would be permissible under Clean Air Act section 111(b) ... Federal agencies may only act in accordance with authority granted them by Congress. Congress has included explicit authority for regulatory sell-through provisions in other environmental statutes, and declined to include such a provision in Clean Air Act section 111(b).

      Response: 
The EPA has considered these comments in opposition to the proposed sell-through periods following the May 2020 Step 2 deadline. For the reasons explained in the final rule preamble, and in this response to comment document, the EPA has decided not to promulgate any sell-through periods for the Step 2 standards and therefore is not providing detailed written responses to these specific comments here.


2.2.5 Comment: The proposal would increase emissions in non-attainment areas in violation of the CAA
Several commenters (0052, 0057, 0065, 0074, 0129) contended that the increase in emissions caused by the sell-through in NAAQS non-attainment areas, and in areas close to non-attainment, would violate the CAA and unravel state implementation plans (SIPs).

For example, one commenter (0057 pp.5-7) asserted that the proposal would violate section 176(c) of the CAA by increasing emissions in non-attainment areas  -  
      The Clean Air Act requires U.S. EPA to identify and establish National Ambient Air Quality Standards (NAAQS) for criteria air pollutants, including primary standards for protecting public health. These health-based air quality standards are used to determine whether a geographic area is in attainment with the national standards, and thereby determine the obligations of the state to reach or maintain those standards.
      Clean Air Act section 176(c) prohibits federal actions or activities that would "cause or contribute to any new violation of any standard in any area; increase the frequency or severity of any existing violation of any standard in any area; or delay timely attainment of any standard or any required interim emission reductions or other milestones in any area."
      There are currently six geographic areas, or air basins, in California, comprised of 27 counties containing about 78 percent of the State's population, that are designated either completely or partially as nonattainment for PM2.5. State Implementation Plans (SIPs), developed by the State in concert with air quality agencies in the affected regions, detail how the areas will attain or maintain the PM2.5 NAAQS. SIPs demonstrating attainment depend on emission reduction strategies that include, at a minimum, reasonably available controls on sources to reduce emissions as expeditiously as practicable. California has many of the nation's PM2.5 nonattainment areas, rendering the NSPS particularly important to public health and to air quality planning processes in the state. Particulate emissions from residential wood burning result in increased public health impacts, particularly in rural and low-income communities, and contribute toward the PM2.5 nonattainment status in many areas of California.
      Postponing the availability of Step 2-compliant heaters in areas with SIPs that rely on the use of such lower-emitting heaters to achieve attainment with the PM2.5 NAAQS would effectively prevent those areas from attaining the standards as expeditiously as practicable and, consequently, is detrimental to public health. The use of wood heaters that meet Step 2 limits under the 2015 NSPS is critical for those PM2.5 nonattainment areas, particularly in rural parts of the State where wood heaters are the primary source of space heating. Analysis of emission sources and their relative contribution to ambient air pollution (i.e., source apportionment analysis) estimates that in certain rural nonattainment areas of the State, wood smoke contributes 76 percent of annual average PM2.5 concentrations and is the primary cause of nonattainment.
      Delaying the more stringent Step 2 standards through the addition of a sell-through period of any duration, or any other amendment that delays or dilutes the NSPS, would impede California's planning efforts toward meeting the NAAQS in these rural areas, as well as other areas of the State. The proposed sell-through is therefore prohibited under Clean Air Act section 176(c).

Likewise, an association of state air agencies (0065 p.5) argued that  -  
      The Step 2 NSPS set to take effect in 2020 will put in place consistent health-protective residential wood heater emission standards nationwide and help to ensure the cleanest and most efficient wood heaters are available for purchase, providing significant long-term benefits to reduce fine particulate emissions regionally and locally. A few states have enacted legislation barring their jurisdictions from enforcing the March 2015 federal NSPS for residential wood-burning heating devices. However, emissions from residential wood combustion cause many counties across America to either exceed, or come precariously close to exceeding, the health-based National Ambient Air Quality Standards (NAAQS) for PM2.5.
      Many state and local air quality agencies are relying on the emission reductions that will result from the Step 2 NSPS to attain and maintain the NAAQS and/or meet other clean air goals, and have included these reductions in their State Implementation Plans. If EPA allows the continued sale of Step 1 HHs, FAFs and/or wood heaters after the Step 2 compliance date these states and localities will be left with a shortfall in emission reductions that could impede their attainment efforts and put nonattainment areas at risk of missing statutory deadlines and attainment areas at risk of violating the NAAQS. Furthermore, such an outcome would be directly counter to EPA's first Priority Goal for FY 2018-2019  -  "Improve air quality by implementing pollution control measures to reduce the number of nonattainment areas"  -  as stated in Working Together: FY 2018-2022 U.S. EPA Strategic Plan.
The Western Governors' Association (0197 p.1) similarly argued that  - 

      States are depending on the current compliance deadlines for these appliances to meet the responsibilities of their State Implementation Plans, as required by the Clean Air Act. As articulated in WGA Policy Resolution 2018-05, Air Quality and Methane Emissions Regulation, Western Governors request that EPA maintain the current NSPS compliance deadlines for new residential wood heaters

A state regulator (0074 pp.3-6) noted that its state implementation plans (SIPs) were developed assuming the full implementation of the 2015 NSPS  - 
      Delaying the implementation of 2015 RWH NSPS Step 2 standards is likely to have negative impacts on communities' ability to attain NAAQS PM2.5 levels.
      Oregon has over a 30-year history of addressing areas that have violated federal health standards due to woodsmoke and has successfully brought those areas back into compliance. Oregon had seven large particulate matter (PM10) nonattainment areas due to woodsmoke and a key strategy to return those areas to attainment was to promote the use of cleaner-burning woodstoves, including the creation of the very first woodstove testing program which EPA subsequently used as the model for the national program. The state and local partnership has been successful and these areas continue to maintain compliance with the PM10 standard. EPA recently updated the standard for PM2.5, due to recent health studies that showed that fine particulate is more dangerous than previously thought. Several Oregon communities are either violating or at risk of violating the new PM2.5 standard. Promoting and ensuring the use of the cleanest burning devices continues to be a key strategy for communities to attain and maintain the new standard.
      Oregon communities depend on the more stringent standards.
      State implementation plans and emissions inventories for these communities to attain and maintain NAAQS have been established and calculated assuming the full implementation of the 2015 NSPS. Relaxing the 2020 deadline will delay the achievement of anticipated benefits and could potentially put these communities at risk of violating the standard. ...
      
      Oregon DEQ is concerned that extending the sell-through period of woodstoves and reducing projected benefits of woodsmoke curtailment activities will leave these communities at risk of noncompliance, and impact the ability of these communities to attract facilities that will provide the economic growth so deeply needed in these communities. The average "life" of a wood stove is 20 to 30 years in a residential home. The dirtier stoves installed as a result of an extended sell-through would essentially lock in poor performance from these stoves for an entire generation.
      As smoke from catastrophic wildfires continues to increase, the need for PM2.5 reductions from anthropogenic sources increases to minimize public health impacts.
      Wildfires are an increasing source of PM2.5 in the United States, due to warmer temperatures, earlier spring snowmelt, and longer fire seasons. Several studies have suggested that this trend will continue throughout the current century and that smoke could become the dominant source of PM2.5 in the western United States during the fire season. PM2.5 monitor data from 2017 and 2018 support this trend for sites in Oregon. Wildfire models predict that PM2.5 levels from wildfires should double over the next two decades (2040-2050), but overall PM2.5 population exposures to decrease due to reductions in anthropogenic sources, such as residential wood heaters (DEQ emphasis).
      With increased PM2.5 and other pollutant burdens from wildfires throughout the Western United States and Canada, real cumulative annual exposure in these communities will far exceed the standards set by NAAQS. Several studies show PM2.5 to be significantly causally associated with premature deaths, estimated to be between 15,000 and 50,000 excess deaths caused by wildfire smoke by 2050. While the impact from wildfire smoke is minimized in regulatory considerations, a growing body of public and environmental health literature shows that the health effects of wildfire smoke inhalation may be longer and more severe than understood earlier, and emphasize the urgent need to reduce anthropogenic sources of PM2.5 and other criteria pollutants as quickly as possible.
One state environmental agency (0052 pp.1-2) commented  - 

      According to the air quality database of the U.S. Environmental Protection Agency (EPA) Office of Air and Radiation (OAR), Fairbanks North Star Borough (FNSB), Alaska, is the most polluted area in the nation for the 2006 24-hour fine particulate matter (PM2.5) National Ambient Air Quality Standard (NAAQS) with woodstoves and wood heaters being the primary source of pollution - contributing between 48% and 63% to pollution levels. On December 14, 2009, EPA designated a portion of the FNSB as a nonattainment area for the 2006 24-hour PM2.5 NAAQS. The burning of wood for heat during the cold winter, coupled with temperature inversions, is the primary reason for the spikes in PM2.5 levels in the area. To address episodes of poor air quality, ADEC implements various control strategies including wood burning curtailment alerts along with education, compliance and enforcement activities to reduce emissions from the use of solid-fuel burning devices (SFBDs). Local programs such as woodstove change-outs and SFBD conversion funded through the FY-16 and FY-17 Targeted Air Shed Grants respectively are ongoing to either reduce the number of SFBDs in the borough or ensure they are the cleanest devices available.
      
      Other areas in Alaska also have significant numbers of wood heating devices that can lead to poor air quality conditions. Since the 1980s, the community of Juneau, Alaska has also been engaged in control of wood heating devices through episodic wood burning curtailments, which have been necessary to achieve and maintain compliance with particulate matter NAAQS. Given that wood heating is an important source of primary, supplemental and emergency heat throughout the state and a significant contributor to local air pollution, Alaska has a vested interest in EPA's efforts to amend the NSPS for these heating devices... Alaska set its own standards for PM2.5 nonattainment areas in 2014 due to the continued delay to the update of the NSPS. 

A local air quality management division (0129 pp.1-2) also pointed out how the sell-through would make their district come close to exceeding the NAAQS and would likely necessitate more intrusive government actions like burn bans  - 

      The postponement of the Step 2 standards combined with the unprecedented growth currently being experienced will most certainly cause Washoe County to come precariously close to exceeding the National Ambient Air Quality Standard (NASQS) for PM2.5. The emissions reductions expected from Step 2 have already been built into our State Implementation Plan. A delayed Step 2 will result in a shortfall of emission reductions which will need to be made up through alternative regulatory restrictions on industry and an increase in burn bans during wintertime inversions. While burn bans are an effective tool to reduce wintertime PM2.5 emissions, they are perceived by the community as one of the most intrusive government programs by prohibiting the operation of an appliance in a private residence. Step 2 standards will provide emissions reductions while avoiding additional burn bans and preserving the relationship between air agencies and their community members across the county.

      Response: 
The EPA has considered these comments in opposition to the proposed sell-through periods following the May 2020 Step 2 deadline. For the reasons explained in the final rule preamble and in this response to comment document, the EPA has decided not to promulgate any sell-through periods for the Step 2 standards and therefore is not providing detailed written responses to these specific comments here. 

2.3	The Sell-Through as a Component of the Best Systems of Emission Reduction (BSER) Determination
Section 2.3 includes comment excerpts and summaries that examine the sell-through from the perspective of BSER determination under the CAA. Section 2.3.1 includes comments that contend the CAA requirements for BSER have not been met by the Agency for the sell-through amendment, as posited by state and local regulatory agencies, state attorneys general and environmental, health and citizen organizations. On the contrary, Section 2.3.2 includes comments that contend the two-year sell-through is part of the already-established BSER because it allows manufacturers the full five-year research and development phase, as posited by the industry trade group, a manufacturer and the US Small Business Administration.

2.3.1 Comment: The CAA requires EPA to demonstrate that the proposed revision reflects BSER
Several commenters (0045, 0056, 0057, 0065, 0071, 0075, 0142) asserted that the sell-through is a component of BSER and, as such, the Agency is required by the CAA to demonstrate why the Agency's previous determination of BSER in the NSPS has changed. These commenters furthermore asserted that the Agency failed to demonstrate how the sell-through is part of the already-established BSER or how BSER changed to now require the sell-through.

For example, one commenter (0075 pp.2-4) argued that "EPA's proposal would unlawfully and arbitrarily weaken the standards of performance adopted in 2015" because EPA did not establish that the extended sell-through reflects BSER, as required by section 111 of the CAA  -  
      The proposed sell-through period would violate the Clean Air Act because the agency has failed to demonstrate that as so revised the resulting standards of performance would reflect the "best system of emission reduction" ("BSER"). Section 111 of the Clean Air Act requires EPA to set standards that reflect 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 requirements) the Administrator determines has been adequately demonstrated." 42 U.S.C. § 7411(a)(1), (b)(1). "An adequately demonstrated system is one which has been shown to be reasonably reliable, reasonably efficient, and which can reasonably be expected to serve the interests of pollution control without becoming exorbitantly costly in an economic or environmental way." Essex Chem. Corp. v. Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973). Section 111(b) further provides that when EPA revises a previously-issued standard of performance, it must "follow[] the procedure required by this subsection for promulgation of such standards." 42 U.S.C. § 7411(b)(1)(B). Accordingly, when EPA proposes to revise standards of performance in a way that would increase emissions, it must have good reasons for concluding that the requirements in place do not reflect the BSER.
      In 2015, EPA adopted a two-step approach to compliance for wood burning devices. Although Step 1 established separate compliance deadlines for manufacturers and retailers for some products, the Step 2 standards applied a single compliance deadline to both manufacturers and retailers. Compare, e.g., 40 C.F.R. § 60.5474(a)(1) (requiring manufacturer compliance with Step 1 limits on May 15, 2015, but allowing retailers to sell hydronic heaters manufactured before that date until December 31, 2015), with id. § 60.5474(a)(2) (prohibiting manufacturers and retailers from producing or selling units that fail to comply with Step 2 limits beginning on May 15, 2020); see also 80 Fed. Reg. 13,672, 13,680 (Mar. 16, 2015) ("Step 1 p.m. emission limits will apply to each hydronic heater[] manufactured on or after May 15, 2015 or sold at retail after December 31, 2015. Step 2 p.m. emission limits will apply to each hydronic heater manufactured or sold at retail on or after May 15, 2020."). EPA made clear that these deadlines were themselves components of the agency's determination of the BSER: the agency was adopting "the appropriate emission limits and compliance deadlines that together are representative of BSER." 80 Fed. Reg. at 13,675. EPA further explained that the requirements adopted in 2015 were designed "to allow manufacturers lead time to develop, test, field evaluate and certify current technologies across their consumer product lines to meet Step 2 emission limits and in most cases to allow retailers to sell-through inventory." Id. at 13,676. In sum, the Step 2 standards adopted in 2015 reflected EPA's considered judgment that a May 2020 compliance deadline for all units sold at retail reflected the BSER. 
      In proposing an extended sell-through period for Step 2, however, EPA does not discuss the BSER factors at all, much less explain why weakening the standards to allow a sell-through period for products that fail to comply with Step 2 requirements is the BSER and is better than the current standards of performance. In fact, the agency does not even assert that its proposed revisions reflect the BSER. Instead, EPA claims that it "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." 83 Fed. Reg. at 61,579. These assertions do not withstand scrutiny. As explained above, when it adopted the current standards of performance in 2015, EPA made clear that the May 2020 compliance date-imposed obligations on both manufacturers and retailers and that those obligations reflected the agency's assessment of the BSER. Changing the date by when retailers must sell only Step 2 compliant models is a change to the May 2020 compliance date, a change to the 5-year compliance period for Step 2 that EPA put in place in 2015, and a departure from the agency's prior BSER determination. Yet EPA nowhere explains either why its delayed compliance date reflects the BSER or why the current requirements no longer reflect the BSER
      Had EPA acknowledged the Clean Air Act's applicable limits on the agency's discretion, it is inconceivable that the agency's rationale for delaying compliance would pass muster. To weaken a standard of performance, EPA must explain why the current BSER is no longer the "best" system. 42 U.S.C. § 7411(a)(1), (b)(1). Further, EPA must provide "a reasoned explanation . . . for disregarding facts and circumstances that underlay or were engendered by the prior policy." FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009). Ignoring these requirements, the proposed rule relates only that "a substantial number of retailers" are curtailing their purchases of wood burning devices that do not meet the Step 2 standards and that "some manufacturers have indicated" they will need the full 5-year phase-in period to bring certified Step 2 compliant models to market. 83 Fed. Reg. at 61,578-79. EPA points out that these manufacturers "may face revenue losses," id. at 61,579, but that speculative possibility does not undermine the soundness of EPA's 2015 BSER determination. EPA's standards must reflect the "maximum practicable degree" of control, Essex, 486 F.2d at 437,  constrained only be the agency's obligation to ensure that the performance standards reflective of the BSER are not "greater than the industry could bear and survive." Portland Cement Association v. Train, 513 F.2d 506, 508 (D.C. Cir. 1975); see also Lignite Energy Council v. EPA, 198 F.3d 930, 933 (D.C. Cir. 1999) ("EPA's choice [of the BSER] will be sustained unless the environmental or economic costs of using the technology are exorbitant."). Accordingly, the possibility that some manufacturers will lose revenue to comply with the Step 2 limits for wood burning devices does not justify a conclusion that the applicable compliance deadlines no longer reflect the best system of emission reduction under section 111.

This same commenter summarized the above in his testimony at the public hearing (0142 pp.66-68) as follows  -  
      Section 111 of the Clean Air Act requires that EPA set standards of performance which reflect 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 requirements, the Administrator determines has been adequately demonstrated. The standards of performance the EPA adopted for residential wood heaters required compliance with the Phase II emission limits for all units sold at retail. To delay the standard as the date approaches, EPA must show that revising the NSPS to increase emissions into the air is necessary because the standards EPA previously adopted no longer apply to that system of emission reduction. The EPA has not claimed that the best system of emission reduction for the NSPS is not achievable. Instead, the proposed rule claims that the compliance deadline is somehow not a component of the standards of performance, which is wrong, but even if it were correct, EPA would need to explain why the delaying compliance is necessary. But the only evidence EPA presents as part of delaying the standards is that some of the retailers are reducing their purchases of Step 1 certified units this year and that some manufacturers are concerned about meeting the 2020 deadline. Now, even if those assertions are true, they do not justify delaying the Step 2 limits. Moreover, as EPA's own analysis shows, weakening the standard by allowing the sale of non-compliant wood heaters would impose substantial costs in the form of additional harmful emissions that far exceed any benefits from the proposed action. There is simply no permissible reason grounded in the Agency's statutory authority to allow the standards to delay. 
Another commenter (0057 pp.3-5) argued similarly that  -  

      U.S. EPA must demonstrate that any proposed amendments to the NSPS are consistent with Clean Air Act requirements. In particular, U.S. EPA must demonstrate that the standard or revision "reflects the degree of emission limitation achievable through the application of the best system of emission reduction" (BSER), as required by Clean Air Act section 111(b). U.S. EPA must also "consider the emission limitations and percent reductions achieved in practice," a mandate that is designed to be technology-forcing. U.S. EPA does not endeavor to explain how the proposed amended NSPS would meet either of these requirements  -  presumably because the proposed amendment does not. U.S. EPA bases its proposed amendment exclusively on the pursuit of cost savings for industry that are dwarfed by public health impacts, entirely ignoring its statutory mandate.
      U.S. EPA asserts that it "is not proposing any changes to its BSER determination" because, "[a]lthough 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." This statement contains multiple errors. The proposal would not merely delay the Step 2 emission reductions by two years, but would allow for the operation of any additional non-compliant heaters manufactured and sold as a result of the sell-through throughout their lifetimes of 20 years or more. U.S. EPA's 2015 BSER determination applies both to manufacture and retail:
            The level of control prescribed by section 111 of the CAA [Clean Air Act] is BSER. In analyzing BSER, the EPA uses available information and considers the emissions reductions and incremental costs for different systems available at reasonable cost. 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 significant costs and environmental impacts of delaying production while models 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 the effective date of the NSPS . . . . the stepped (phased) approach for residential wood stoves/ heaters, hydronic heaters and forced-air furnaces that the EPA is promulgating considers these factors. That is, for this rulemaking, the EPA has determined the appropriate emission limits and compliance deadlines that together are representative of BSER.
      U.S. EPA considered both dates of manufacture and dates of sale in determining BSER in 2015, and a proposal to extend the compliance deadline for sales by two years, resulting in significant emissions increases and health impacts, comprises a re-determination of BSER. U.S. EPA's simple assertion to the contrary has no basis or effect. U.S. EPA does not attempt to demonstrate that the proposed sell-through qualifies as BSER, presumably because it cannot.
      Additionally, U.S. EPA does not, because it cannot, claim that the NSPS is not "adequately demonstrated." More Step 2-compliant models currently exist than in 2015, when U.S. EPA determined that the Step 2 standards were technology-forcing but adequately demonstrated. As the basis of its proposal, U.S. EPA simply references a handful of industry complaints about the burdens of research and development, as further discussed below. These communications cannot justify redetermination of BSER.
      It is not evident that a sell-through would be permissible under Clean Air Act section 111(b), even if it did constitute BSER in this instance (which it does not). Federal agencies may only act in accordance with authority granted them by Congress. Congress has included explicit authority for regulatory sell-through provisions in other environmental statutes, and declined to include such a provision in Clean Air Act section 111(b). Regardless, U.S. EPA clearly may not belatedly add a sell-through period without redetermining that an NSPS with a sell-through constitutes BSER, which U.S. EPA explicitly has declined to do. To the extent that U.S. EPA is to be taken at its word that is not changing its BSER determination, the agency has no authority to relax the NSPS.

This commenter (0057 p.25) concluded by asserting their full support for the 2015 NSPS and "cautions [the] U.S. EPA that its proposal to weaken this standard is illegal, inappropriate, and contrary to its legal obligations to protect public health and welfare."

Likewise, another commenter (0065 pp.4-5) noted that  -  
      As EPA acknowledges in the NPRM, Section 111 of the Clean Air Act (CAA) requires the agency to establish standards of performance that reflect "'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)' ... 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."
      First, the NSPS EPA established for HHs, FAFs and wood heaters require full compliance with Step 2 by all devices sold at retail beginning May 15, 2020. A sell-through would allow for compliance with a weaker standard of performance than EPA has concluded reflects BSER even though EPA has not asserted that the BSER upon which the Step 2 standards are based cannot be achieved; in fact, such an assertion cannot be made because it has been demonstrated that the Step 2 standards are achievable for all categories of devices.

Another commenter (0071 pp.5-6) also argued that the "EPA proposed changes fail the Clean Air Act requirements" because a "BSER review" is required  -  
      Under Section 111 of the Clean Air Act, EPA must establish standards that reflect the "best system of emissions reduction" (BSER) that take into account "the cost of achieving such reduction and any non-air quality health and environmental impacts and energy requirements." EPA completed such an assessment in the 2015 standards, concluding that a two-step approach that allowed the existing units (Step 1) to be sold until 2020 as the industry developed the cleaner, more fuel-efficient units (Step 2), meets the requirements for BSER.
      However, in this proposal, EPA states that, despite allowing the dirtier devices to be manufactured and sold for two more years, the Agency "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 that associated May 2020 compliance date." (83 FR 61579).
      EPA provides no analysis to justify its determination that allowing the manufacturers to sell dirtier devices for two more years past the Step 2 deadline continues to meet with BSER requirements. Instead, EPA justifies its two-year delay in concerns from retailers that they will not be able to sell the dirtier devices. This comes despite increasing availability of models that meet the Step 2 requirements.
      Not only does this argument ignore the impact that such continued sales will have on public health, it fundamentally undercuts EPA's argument that there should be no changes to the BSER. It fails to address the reality that adding two more years for manufacturers to produce and sell non-compliant devices will allow more pollution. It also ignores the likelihood that the retailers would argue that they suffer that same dilemma in 2022. EPA has provided the industry with five years to phase in compliant products (following 28 years of no changes to the standards), and many have. EPA's explanation that these changes do not change the BSER determination ignores the realties that this proposal creates.
      The EPA had neglected its responsibility to update the standards for new devices for nearly three decades when it finally adopted the current standards in 2015. That long delay increased the need to provide the best systems of emission reduction as soon as possible, not five or seven years down the road. Other industries that market to consumers manage with much shorter time to compliance. For example, EPA adopted the Tier 3 standards for the motor vehicle industry on March 3, 2014 and directed the industry to comply by model year 2017. That meant that the vehicles for sale in the fall of 2016 had to meet the standards just over two years after EPA adopted the regulation, a timetable the motor vehicle industry could meet. The motor vehicle industry is every bit as complex with as many models as the residential wood-burning device market, each requiring certification and approval. Yet the EPA proposal would provide the wood device industry with two additional years on top of the five it already had to continue to manufacture and sell higher-polluting devices.
      Adding two more years for compliance with an already-in-place rule is unjustifiable. Building in a two-year delay that allows continued failure to comply and increases emissions undermines EPA's argument that this does not require a new BSER review. 

An alliance of state air agencies (0045 pp.1-4) concluded that a sell-through would not meet the BSER and therefore the anticipated public health benefits of applying BSER, which is the basis for the current NSPS, would not occur as intended. The foregone public health benefits from increased adverse health effects of PM2.5 are estimated in the range of $94 to $210 million, whereas the benefits of this proposal which total $8.3 million accrue only to the manufacturers and retailers. Additionally, these foregone health benefits are only calculated for 2019 through 2022, but appliances may be in use for 20 to 30 years, indicating much greater foregone public health benefits in reality. 

A commenter (0056, p.2) more generally contended that "The Step 1 emissions standards in the 2015 rulemaking represented the status quo, and only with the Step 2 emissions standards scheduled to take effect in May 2020 do we see what represents the "best system of emission reduction" required by the CAA. The 2020 standards are long overdue and no further delay in fully implementing these standards should be granted." 

Response: 
The EPA has considered these comments in opposition to the proposed sell-through periods following the May 2020 Step 2 deadline. For the reasons explained in the final rule preamble and in this response to comment document, the EPA has decided not to promulgate any sell-through periods for the Step 2 standards and therefore is not providing detailed written responses to these specific comments here.

2.3.2 Comment: The sell-through is part of the already established five-year lead time of BSER
Contrary to assertions in Section 2.3.1, several commenters (0045, 0050, 0134, 0063) contended that the two-year sell-through has already been established as BSER because it allows manufacturers the full five-year research and development phase. 

For example, the industry trade group (0063 pp.3-4, 8-11, 16, along with public hearing testimony, 0142 p.45) asserted that the two-year sell-through period is required in order to provide manufacturers the full five-year lead time, that was already determined by EPA in the 2015 NSPS to be an integral component of BSER  -  
      In the 2015 Rule, EPA's best system of emission reduction ("BSER") determinations for the Step 2 standards -- for both room heaters and central heaters -- were based on the conclusion that five years was an appropriate amount of lead time for manufacturers of all types of covered appliances to develop a full range of Step 2-compliant models, access the capital needed to develop those models, and complete the certification process. EPA further found that, given the nature of this industry, manufacturers simply could not afford to suspend production and sales of Step 1 products during the time they were trying to design, test, evaluate, and certify Step 2 models, which is a concern that was also relevant back in 1988. Thus, EPA concluded that manufacturers needed a full five years to bring product lines into compliance with the Step 2 standards.
      EPA, however, has recently come to realize that manufacturers of both central and room heaters are now having difficulty accessing the necessary capital during the final two years of the five-year lead time period because many retailers have either scaled back on or eliminated orders of Step 1 products. This has effectively reduced or cut off revenue that manufacturers need to develop, test, and certify Step 2-compliant products. A two-year sell-through period would send a signal to retailers that they can continue purchasing Step 1 products for the entirety of the five-year compliance lead time (i.e., until May 2020) without having to fear that they will be stranded with unsellable Step 1 inventory on May 15, 2020. Rather, they would be able to continue selling previously manufactured Step 1 appliances for another two years. ...
      
      EPA should revise Subpart QQQQ to provide for a two-year sell-through period (until
May 15, 2022) as it has proposed to do. First, without sell-through, most manufacturers will not have the benefit of the five-year lead time to develop multiple lines of Step 2-compliant products. That five-year period was an integral component of EPA's BSER determinations in the 2015 Rule. Thus, EPA has rightly proposed to revise that Rule to add a two-year sell-through period, which in effect, would help ensure that manufacturers will indeed have the full five years. ...[This] justification [] for including sell-through provisions in the Step 2 standards appl[ies] to Subpart AAA as well. 
      Full Five-Year Compliance Lead Times are Critical Components of the BSER
Determinations Underlying the Step 2 Standards in the 2015 Rule.
      EPA has long recognized that the determination of what constitutes BSER under CAA
Section 111 requires the Agency to balance a number of factors, including environmental impacts, costs, and the required lead time for the regulated industry to come into compliance with new emission limits. When EPA originally proposed to promulgate Subpart AAA in 1987, EPA emphasized that BSER only applies to new sources that can meet the standards with a reasonable lead time:
            To be [BSER], a technology must be available at a reasonable cost. For
wood heaters, an important element of the cost of a technology is the
cost of delaying production while models with that technology are
designed and certified. Thus, [BSER] applies, and the standards apply,
only to those classes of new sources that can meet the standards with a
reasonable lead time[.]
      When EPA proposed the current standards for residential wood heaters in 2014, it echoed these statements by reiterating that "an element of the BSER determination includes reasonable lead time for R&D to develop and certify cleaner units." The 2014 proposal went on to state that "important elements in determining [] BSER include the significant costs and environmental impacts of delaying production while models with those systems are being designed, field evaluated, and certified." Taking the relevant factors into consideration, EPA determined that it had to provide a full five years between the Step 1 and Step 2 compliance deadlines to "allow manufacturers a reasonable time to develop complying models, access the necessary capital to develop them, and complete the certification process."
      In responding to comments on the 2014 proposal, EPA again emphasized the need for sufficient amounts of lead time for manufacturers of all residential wood heating appliances, whether they are subject to regulation under Subpart AAA or Subpart QQQQ. Because Subparts AAA and QQQQ regulate consumer products made for residential sales, as compared to large industrial process source categories, EPA explained that "if production and sales were to be suspended while designing, testing, field evaluating and certifying cleaner models, the cost of potential lost revenues could be significant, which necessitates reasonable lead times for compliance with emission limitations. This was a concern in 1988 and is still true today." Among other things, EPA highlighted the need "to avoid unreasonable economic impacts on those manufacturers (mostly small businesses) who need additional time to develop a full range of cleaner models." It is not enough to give just enough lead time for companies to certify a single product to more stringent standards. In this industry, few companies (if any) can survive with just a single product. Rather, they must give consumers several options to choose from that
span the range of heating capacities, appearances, and prices, and that use different technologies (catalytic versus non-catalytic) and fuel types (stick wood versus pellet).
      Elsewhere, in the Response to Comments document that accompanied the 2015 Rule, EPA again stressed that it determined in the final rule that the 2020 standards, "although achievable, are technology-forcing for much of the industry" and that they "represent[] stronger emission levels achievable for all appliance types at reasonable cost, allowing 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."
      These and other statements, which EPA has reinforced in the current sell-through
proposal (at 61,578), reflect the Agency's appreciation of the uniqueness of this industry and the standards codified at Subparts AAA and QQQQ, as well as the importance of lead time. To summarize:
       Virtually all of the manufacturers subject to these regulations are small businesses
that simply cannot afford to put production and sales of older models on hold while
they strive to develop new products that must comply with a future, more stringent
standard. A steady stream of revenue from sales of Step 1 products is necessary for
most manufacturers to have the necessary capital to design, test, field evaluate, and
certify Step 2 products.
       Most manufacturers cannot operate in this industry by offering just one compliant
model for sale. Instead, they offer a range of products to try to address varying
consumer demands and price points, e.g., appearance and material, heat output,
overall dimensions, fuel type, etc. The five-year lead times in the 2015 Rule are
important to give manufacturers enough time to certify a full range of Step 2-
compliant products, not simply to get a single product across the finish line that they
may not have had any time to field evaluate.
       That some manufacturers back in 2015 appeared to have products capable of meeting the Step 2 emission limits did not give EPA a sufficient basis to conclude that the Step 2 limits were BSER back in 2015. EPA recognized that a significant percentage of woodstove and hydronic heater manufacturers still lacked products capable of meeting Step 2 and that no forced-air furnace manufacturers had any products that could meet Step 2. For most manufacturers, Step 2 limits were (and continue to be) technology-forcing, and it will take at least a full five years for them to achieve compliance with those limits across multiple model lines.
      In short, the five-year lead times between the Step 1 and Step 2 compliance deadlines in both Subparts AAA and QQQQ are integral components of EPA's BSER determinations in the 2015 rule. ...
      One final aspect of the 2015 Rule is worth mentioning: nothing in that rule or the supporting record suggested that the need to allow for sell-through would be any less important in 2020 than it was in 1988 and 2015. Again, EPA provided sell-through on two different occasions -- in 1988 and in 2015 -- because it plainly recognized that it needed to give retailers additional time to clear out non-compliant inventory after a new emission limit applies. 2020 is no different: retailers will still need some time to sell Step 1 products after the Step 2 deadline becomes applicable. At the time EPA finalized the 2015 Rule, it gave no indication that it expected that retailers would plan ahead to protect themselves against stranded inventory in 2020 by, for instance, reducing or eliminating Step 1 purchases in 2018 or 2019, well in advance of the Step 2 deadline. Had it done so, that would have called into question EPA's Step 2 BSER determinations, because an important component of those determinations was the assumption that manufacturers would have five years to bring a full range of Step 2-compliant products (or multiple model lines) to the market. Simply put, EPA assumed that five years of lead time actually meant five years of lead time. Now that EPA has evidence to the contrary, EPA must revise Subparts AAA and QQQQ to ensure that manufacturers actually have the benefit of a full five-year lead time to comply with Step 2. Providing two-year sell-through periods for all covered appliances would help to ensure that manufacturers have the amount of lead time that EPA assumed they would when it made its Step 2 BSER determinations.
Likewise, a manufacturer (0050 p.2) asserted that  - 
      In the 2015 NSPS comments, the EPA stated that the 5 years between the effective date of the final rule and the Step 2 emission limits matches the window of time many manufacturers noted they would require to conduct R&D and testing to bring a new model to market (development time, testing, EPA certification and begin production). This was based on manufacturers reviewing the number of models and resources (people, time, cost), however, the EPA didn't consider a sell-through for when Step 2 goes into effect. Without a sell-through we would have needed all our products to be 2020 compliant prior to the 2018 burn season (which has come and gone). Therefore, the 2015 NSPS did not provide a 5-year R&D transition to Step 2, in reality it provided a 3-year R&D transition because the Rule did not consider the inventory levels (supply chain) and sell-through needed by manufacturers and dealers in such a seasonal dependent business model.
In a related comment, the U.S. Small Business Administration's Office of Advocacy (0134 pp.3-4) argued that the sell-through will better allow the goals of the 2015 NSPS to be realized, by providing the lead time necessary to bring compliant products to market  -  

      The U.S. Small Business Administration's Office of Advocacy (Advocacy) ... supports the amendment to add a sell-through provision for new hydronic heaters and forced-air furnaces, but strongly encourages EPA to include new residential wood heaters as well. Further, Advocacy encourages EPA take additional measures to reduce the burden of the NSPS on small businesses in order to encourage a vibrant market in these products and encourage customers to replace their older dirtier heaters.... Small businesses represent most of the manufacturers of residential wood heaters, hydronic heaters and forced-air furnaces. These businesses have expressed concern about the economic impacts of the NSPS since before their promulgation, extending back to the SBREFA panel concluded in 2011. Small businesses and their representatives were highly critical of the 2014 proposed rule and have raised concerns to Advocacy in its Regional Regulatory Reform Roundtables.
      The primary goal of the NSPS is to reduce emissions from residential wood-burning appliances. Although these appliances have gotten cleaner through the years, most of the appliances in homes remain high emission and uncertified. Most of the emission benefits from the NSPS come from the change out of these older stoves for future cleaner-burning but more expensive options. However, "most of the households that use residential wood heat are lower income or lower middle-income households. Affordability and ease of operation are critical to these households before they change out to a cleaner burning  -  lower-emission - residential wood heater from the current, high emission, uncertified residential wood heaters that nearly 75% of them now use." Industry experience indicates that change-out subsidies can have a very large impact; the corollary is that increases in the price of replacement appliances significantly reduce sales. If the full effect of the NSPS is to reduce both the availability and affordability of wood-burning appliances, then the benefits of the NSPS will be stymied.
      A varied and competitive marketplace in certified appliances is necessary for the NSPS to be successful. But small businesses believe that the NSPS does not provide the time necessary to bring compliant products to market, let alone a full range of offering that consumers desire. In the 2015 Regulatory Impact Analysis, EPA projected a six-year research and development cycle to bring their products from Step 1 compliance to Step 2 compliance but provided only five years before only Step 2-certified products could be sold. And, because of reported delays in the EPA certification process, small businesses have had less than those five years to bring Step 2-certified products to market before their sales of Step 1-compliant products has been cut off.
      Small businesses have even less time because of the market structure. The market for residential wood-burning appliances is unpredictable, and the NSPS is serving to make it even more inhospitable for small businesses. As the Hearth, Patio and Barbecue Association (HPBA) wrote in their public comments on the 2014 proposed rule, the market has been extremely volatile, with no clear pattern of sales trends or customer preferences. Manufacturers and retailers have great difficulty predicting how many of what models to manufacture or purchase for sale each year. "For retailers this is a particularly vexing problem because they have not only to guess how many stoves to buy, but how many sales people, installers and services techs they will need to support their sales. Their profitability depends on keeping careful watch over inventory and overhead."
      This is playing out today, with retailers no longer purchasing Step 1-compliant stoves and purchasing only Step 2-certified stoves, over a year before the compliance date. Combined with delays in obtaining the necessary testing and in the EPA-mandated certification review, small manufacturers needed to have products ready almost two years before the 2020 compliance date. This has caused major hardship in all product categories. HPBA reports that its membership has fallen due to economic hardship in the industry.
      Hardship for small businesses will have negative consequences for the NSPS. Small businesses generally finance R&D with existing sales, so future offerings for Step 2-certified stoves, hydronic heaters and forced-air furnaces may be much more limited than the range of products offered in the past. Competition and innovation may be similarly limited. HBPA, which operates the largest trade show in this industry, reports that the market is significantly narrower this year than last and that prices are significantly higher in some segments of the market. Without a varied and competitive market in wood-burning appliances, the environmental benefits of the NSPS, gained through the change-out of older, dirtier and uncertified wood stoves, will be significantly lower than expected.
      Recommendations: Advocacy recommends that EPA take all reasonable steps to reduce the burden on small businesses that manufacture (or used to manufacture) appliances subject to the NSPS. EPA should consider whether it adequately accounted for the market characteristics when it established the compliance timetable for the NSPS, allowing small businesses enough time to develop robust lines of Step 2-certified stoves. For this reason, Advocacy strongly supports the proposal to provide a "sell-through" for hydronic heaters and forced-air furnaces and strongly supports extending a similar provision to wood heaters.
      Response: 
The Agency has considered these comments in support of the proposed sell-through periods following the May 2020 Step 2 deadline. However, for the reasons explained in the final rule preamble and in this response to comment document, the EPA has decided not to promulgate any sell-through periods for the Step 2 standards.

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 or could be immediately achieved. 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. 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)). The 2015 sell-through period was reasonable because retailers had only 60 days from the time that the 2015 final rule was published in March 2015 until the requirements that went into effect in May 2015. 

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 five-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. The EPA noted on page 99 of the 2015 RTC document that the five-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." Likewise, on page 231 of the 2015 RTC, the EPA concluded that the Step 2 compliance date provides "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." The EPA based this conclusion on information provided to the Agency by wood heating device manufacturers. Prior to the 2014 NSPS proposal, manufacturers indicated to the EPA that it can take anywhere from 8 to 18 months to develop a new wood heating device. Commenters (manufacturers) indicated similar timeframes in response to the 2018 NPRM, as provided in Sections 5.1.4, 5.2.4 and 5.3.6 of this RTC document, and also noted that it can take 9 to 12 months to obtain EPA certification. Thus, manufacturers have consistently indicated to the Agency that it can take anywhere from 1(1/2) to 2(1/2) years to bring a certified wood heating device to market.

Meanwhile, in the time before the Step 2-certified models are available for sale, the five-year period provided by the NSPS between the stepped standards allows manufacturers and retailers to continue making and selling Step 1-certified wood heating devices (see 80 FR 13676). The five-year period from 2015 to 2020 also provides retailers with sufficient time to manage their inventories of 2015-compliant units that cannot be sold after May 2020. As indicated in a report submitted by HPBA to the 2015 NSPS docket and re-submitted to the 2018 NPRM docket, "[t]he majority of retailers felt that they needed 12 to 24 months to sell moderate and slow selling inventory." Given that the majority of retailers have indicated that they can sell even slow selling inventory within 2 years, the 2(1/2) to 3(1/2) years remaining (after the 1(1/2) to 2(1/2) years manufacturers indicated they require to bring a certified device to market) in the five-year period between stepped standards provides sufficient time for retailers to manage their inventory and avoid stranded inventory. Also, we agree with the commenter above that we "did not explain how exactly these entities would plan ahead," because the Agency expects that the regulated entities are best equipped to make such business decisions for themselves. 

Finally, as we noted in the Preamble, the record shows that some manufacturers have succeeded in developing Step 2 model lines but the record contains no examples supported by adequate evidence of manufacturers that have tried and failed to develop Step 2 model lines (e.g., notification from testing laboratories indicating suspended tests and the reason(s) why as required by the RWH NSPS in Sections 60.535(a)(2)(viii) and 60.5477(a)(2)(viii)). Thus, there is no support in the record showing that manufacturers could not develop Step 2 models in time to (1) have Step 2 models for sale as retailers reduced or discontinued their purchase of Step 1 models, and (2) allow for manufacturers and retailers to replace their inventories of Step 1 models with Step 2 models in advance of the May 2020 deadline. Moreover, the record shows that Step 2-compliant model lines have been available to retailers for a considerable amount of time. For example, there were wood heater, hydronic heater and forced-air furnace models that were Step 2-certified starting in 2017 and, as of March 20, 2018 (more than 2 years before the May 2020 compliance deadline), there were 78 wood heater model lines (44 pellet stoves and 34 wood stoves), nine hydronic heater model lines and one forced-air furnace model line certified to Step 2 (83 FR 61578). Further, some model lines have emissions significantly below the Step 2 standard, showing that it is possible not only to achieve the Step 2 standard but also that manufacturers can develop models that emit well below the Step 2 standard. Based on this record, the Agency has insufficient grounds to conclude that a sell-through period is needed and to change the established NSPS and allow a sell-through.

2.4	Supplemental Regulatory Impact Analysis (RIA) Comments
Section 2.4 includes comment excerpts and summaries that critique the Agency's supplemental RIA for multiple reasons, as presented in the following subsections. Most comments included herein are from state and local regulatory agencies, multi-jurisdictional organizations, state attorneys general, academia, and environmental, health and citizen organizations.

2.4.1 Comment: The truncated RIA cost-benefit analysis fails to evaluate all pollutant emissions and underestimates environmental and societal costs 
Numerous commenters (0052, 0053, 0054/0200, 0056, 0057, 0065, 0066, 0068, 0071, 0075, 0137) asserted that, by EPA's own estimates in the supplemental RIA, the value of the foregone air quality benefits far exceeds the costs to industry of complying with the existing 2015 NSPS, and some furthermore argued that EPA grossly underestimated this exceedance.

For example, one commenter (0054/0200 pp.6-8) contended that - 
      The RIA for the 2015 NSPS demonstrated that the public health benefits of this rule outweigh the costs to industry by more than 100 to 1. At an estimated cost of $281 for room heaters and $74 for central heating units per ton of PM reduced, this NSPS is among the most cost-effective control strategies promulgated for this pollutant.
      Similarly, by EPA's own estimates in the Supplemental RIA for this proposal, the value of foregone air quality benefits that would occur with EPA's proposed sell-through period far exceed the projected cost to industry for complying with the existing rule. According to EPA, the cost to industry over the period of 2020 to 2022 if the proposed amendments are not enacted would be $33.3 million (Scenario 2). Under its approach, EPA estimates cumulative foregone air pollution benefits of $350 to $780 million over the sell-through period under the primary modeling scenario (Scenario 2). The health benefits outweigh the compliance costs by about 11 to 23 times.
      Even EPA's latest estimates, however, grossly underestimate the foregone benefits to public health of the proposed sell-through. As EPA notes in the Supplemental RIA, the analytical approach it used omitted consideration of excess pollution beyond 2022 released by the non-Step 2 units sold during the sell-through period. As these higher polluting units can remain in service for 20 years or longer, this is a major omission.
      We request that the Agency explain why it elected to calculate the loss in emission benefits associated with the proposed amendments using a "truncated" sell-through period instead of evaluating excess emissions over the expected lifetime of the non-Step 2 compliant units sold under the proposed amendments. As noted above, even using its flawed methodology, EPA concludes the foregone environmental benefits greatly outweigh the cost to industry.
      A fuller accounting beyond the truncated period used by EPA would increase the already large benefits relative to compliance costs significantly. To properly account for the lost public health benefits of the proposed amendments to the rule, EPA must include consideration of emissions that will occur for the full lifetime of the non-Step 2 compliant units. Using the accepted practice of considering the full emission impacts over the useful lifetime of the source provides a more transparent and realistic accounting of the foregone health benefits (i.e., increased health costs) attributable to the proposed amendments.
      Table 1 shows the comparative cumulative industry costs and foregone public health benefits as calculated using EPA's analytical method under Scenarios 2 and 3 during the sell-through period (present value discounted to 2016, 3% discount rate) where we have extended the time period for the cumulative foregone public health benefits over an assumed 20-year wood heater useful life (2020-2039). We hold constant the foregone health benefits EPA estimated for the year 2022 across all remaining years of the 20-year device useful life. For the extended years, we apply a 3 percent discount rate in the same manner as EPA did to estimate cumulative benefits occurring only during the truncated sell-through period. By more appropriately accounting for excess PM2.5 emissions resulting from heaters sold during the sell-through period throughout their useful lives, we estimate foregone PM2.5 benefits of $1.9 billion to $4.4 billion under Scenario 2 (3% discount rate). Comparing these projected lifetime foregone benefits to the additional compliance costs EPA calculates that industry would face without the relief proposed in the NPRM ($33.3 million over 3 years) results in a foregone public health benefit to industry cost ratio from 57:1 to 132:1. Under the perhaps more likely Scenario 3, we project that foregone health benefits will outweigh industry costs by 52:1 under the low scenario and 118:1 under the high scenario.
      In Table 1, we also estimate the cumulative foregone public health benefits under Scenario 2 assuming EPA also includes wood stoves in addition to central heaters during the sell-through period. We use the same methodology in estimating the present value discounted to 2016 with a 3 percent discount rate over an assumed 20-year stove useful life. Annual PM2.5 excess emissions during 2020-2022 are taken from Table A-6, Scenario 2, in the EPA Supplemental RIA, and we use the same benefit per ton values of Table A-8 for the low (Krewski, 3%) and high (LePeule, 3%) end points. Foregone benefits increase when wood stoves are included under the Scenario 2 sell-through period, ranging from $2.6 billion to $6.1 billion. While not presented here, we would estimate even higher foregone benefits if wood stoves are included in Scenario 3.
      All results in Table 1 use EPA's basic underlying assumptions on both costs and benefits, other than EPA's truncated approach in calculating cumulative foregone benefits over a wood burning device's useful life. ... [In comment letter page 8, see Table 1. Comparative Cumulative Costs and Foregone Benefits of Proposed Sell-Through Provisions (3% Discount Rate / 2016$ in millions)*. In this table NESCAUM estimates the cumulative present value of the Industry Costs, Foregone Benefits (low and high estimates) and Ratio of Foregone Benefits:Cost (low and high ratios), using data provided in EPA's Supplemental RIA, but assuming a 20-year useful life. These are compared to EPA's Scenario 2 and 3 from the Supplemental RIA, which uses the sell-through period of 2020 to 2022] ...
      
      There are several associated environmental and economic benefits that are expected to accrue but are not monetized in the Supplemental RIA. Step 2 compliant devices will emit lower levels of volatile organic compounds, air toxics and carbon monoxide than the Step 1 units they replace. Further, the Step 2 units burn more efficiently, which will provide consumers with significant savings in fuel costs over the lifetime of the unit. Allowing the sale of non-Step 2 compliant units during the sell-through period as EPA proposes would result in a loss of these benefits over an assumed 20-year lifetime of these units. ...
      
Furthermore, regarding wood heaters regulated under Subpart AAA, this same commenter (0054/0200 pp.8-9) asserted that  -  
      
      EPA's analysis of wood stoves only assessed the impact on the estimated 200,000 variable burn rate stoves sold during the two-year sell-through period. EPA failed to analyze or incorporate the emissions impact from 60,0000 single burn rate stoves and 200,000 pellet stoves. Consequently, EPA's analysis of subpart AAA only accounts for 45 percent of the market for these appliances. A full analysis of subpart AAA impacts must be completed with notice and comment to states before rule changes can be implemented.
      
Another commenter (0071 pp.4-5) referenced an analysis done by the above commenter (0054/0200) and stated that  - 
      EPA has underestimated the cost to human health. ... Allowing the continued sale of non-compliant devices is unacceptable. Due to the long lives of these devices, they would continue to spew toxic pollution for decades. The result would be years of harm to human health from wood smoke pollution that could have been prevented. ...EPA begins to look at the impact of those in the Regulatory Impact Assessment (RIA) included with this proposal. In this RIA, EPA only examines the impact of the period from 2020 to 2022, offering to provide a complete assessment in the final rule. ... Looking beyond the 3 years in their assessment, NESCAUM also calculated the impacts across the estimated 20-year lifespan of these devices. Their findings estimated that the devices sold during these 3 years would add, over the next 20 years, the equivalent of the "total 2014 annual residential wood combustion emissions occurring collectively in the states of California, Colorado, Idaho, New York, Utah, West Virginia, and Wisconsin." As they note, "While the timescales differ, the comparison does provide a comparative sense of the magnitude of the excess emissions."
Likewise, another commenter (0057 pp.17-19) argued that  - 
      U.S. EPA manipulates the timeframe of its analysis.
      The timeframe of the analysis, from 2019 through 2022, is transparently outcome-seeking. All cost savings from this proposal will occur during the 2019 through 2022 timeframe, while increased emissions will occur for many years beyond this timeframe. The Supplemental RIA acknowledges this: "Retailers will receive additional revenues from the sale of non-Step 2-compliant units, and foregone emissions reductions will occur not only during the sell through period, but over the life of the non-Step 2-compliant units." However, the estimated particulate emissions increases and associated monetized health impacts from these emissions increases are "truncated at the close of the sell through period," or 2022. The Supplemental RIA states, "We are presenting information on truncated emission reduction[s], instead of more typical annualized emission reduction estimates. For the final rule, the agency will provide annualized emission reductions estimates." (This statement regarding "emission reduction estimates" is, at best, misleading, as the proposal would result in increased emissions.)
      U.S. EPA currently admits that the lifespan of these heaters is approximately 20 years; in the 2015 rulemaking, the agency noted that "wood heaters in consumer homes emit for at least 20 years and often much longer." U.S. EPA acknowledges that emissions increases resulting from a sell-through would be sustained for many years beyond the heater's year of manufacture/purchase, but has chosen not to quantify these emissions. The costs associated with the health impacts of the proposal over the lifetime of the equipment could easily be calculated from the data presented in the Supplemental RIA. For example, the annual average monetized particulate-related health impacts are estimated to range from $94 million to $350 million per year in Scenario 2 and Scenario 3. These estimates could easily be carried out another 18 to 20 years to fully (and conservatively) represent the costs of this proposal to public health and welfare, but U.S. EPA has instead chosen to manipulate its data presentation to obscure the proposal's true costs. ...
      U.S. EPA fails to evaluate or monetize .. Emissions impacts
      The Supplemental RIA fails to provide any consideration, quantitative or qualitative, of the increased emissions of black carbon and hazardous air pollutants like formaldehyde, benzene, and dioxin resulting from the proposal. U.S. EPA also fails to monetize the impacts of increased volatile organic compound emissions, increased carbon monoxide emissions, increased nitrogen dioxide exposure, increased ozone exposure, impaired visibility, or impacts on ecosystems.
      U.S. EPA claims, "We are unable to estimate the percentage of premature mortality associated with this specific action's forgone emission reductions at each PM2.5 level." This assertion is belied by U.S. EPA's documented communications with OMB, in which the agency acknowledges having developed a quantified estimate of premature mortality from PM and including it in an earlier draft, but deleting it "in the interest of simplifying the presentation of results."
      Exclusion of all of these costs results in an inaccurate and biased result, which does not fully weigh the impact of the proposed amendments to human health and the environment.
One commenter (0065 p.3) similarly argued that  - 

      EPA's proposal to provide a sell-through period is evidently driven by manufacturers' claims (with examples included in the NPRM) that they will not be able to sell off their Step 1 devices without a sell-through beginning in May 2020. ... As substantial as the foregone health benefits reported by EPA appear, the agency's methodology for estimating them underrepresents the true level of the adverse impacts on public health that would result from a sell-through. EPA only calculates the foregone health benefits associated with a sell-through for a "truncated" period of time  -  2019 through 2022  -  that does not include the excess emissions that Step 1 devices sold during the sell-through period will continue to emit every year throughout the full lives of these devices, typically 20 years or more. This omission of the foregone health benefits to accrue during those additional 16+ years is a serious flaw of the SRIA [Supplemental RIA]. Another flaw of the SRIA is the further underestimation of monetized foregone health benefits due to the fact that EPA monetizes only the impact of lost PM2.5 emission reductions and not lost reductions in other emissions  -  such as volatile organic compounds, carbon monoxide, hazardous air pollutants and black carbon  -  or lost reductions in ecosystem and visibility impairment and climate effects.

Another commenter (0056 p.2) also asserted that  - 

      In the Supplemental Regulatory Impact Analysis (RIA) that accompanied the proposal, EPA significantly underestimates the adverse environmental impacts associated with the proposed sell-through. EPA evaluated excess emissions for only a "truncated" four-year period (2019-2022) instead of for the 20-year useful life of the non-Step 2 compliant units that would be sold beyond 2020. Further, EPA was able to monetize lost health benefits only for particulate matter even though there also would be excess emissions of carbon monoxide, volatile organic compounds, and air toxics. Even using this methodology, EPA concludes that the lost environmental benefits outweigh the cost to industry by 10 to 20 times.

Another commenter (0052 p.3) questioned the reasonableness of the proposal given the cost-benefit analysis in the RIA and in particular its failure to extend its analysis beyond 2022  - 
      The economic analysis of the extended sell-through date indicates that the benefits of this proposal are less than the costs. The net benefit is estimated to be negative $0.06 billion to $0.20 billion. These benefit calculations from both Scenario 2 and Scenario 3 assume that extending the two-year sell-through of Step 1-compliant wood heaters, HHs, and FAFs will result in foregone health benefits from 2020 through 2022. The benefits are not calculated beyond 2022. This does not account for the benefits that would accrue from the foregone reduction in morbidity and premature deaths that would be produced through emission reductions during the entire life span of devices, which is typically substantially longer than three years and may be as long as 30 years. The cost-benefit analysis and long-term ramifications to public health from the on-going emissions from the sell-through heating devices raises concerns for ADEC and causes us to question the reasonableness of this proposal.
Likewise, another commenter (0075 pp.5-6) noted that  - 

      EPA's analysis arbitrarily ignores the long useful lifetimes of wood burning devices. EPA acknowledges both that the average lifespan of covered devices is approximately 20 years, Supplemental Regulatory Impact Analysis ("Supp. RIA") at 9 n.7 (Nov. 20, 2018) (EPA-HQ-OAR2018-0195-0008), and that "foregone emission reductions will occur not only during the sell through period, but over the life of the non-Step 2-compliant units." Id. at 3. Yet EPA's analysis of the proposed rule presents only particulate matter emissions increases and associated monetized health impacts from these emissions that are "truncated at the close of the sell through period," or in 2022. Id. at 4. EPA offers no rationale for ignoring the decades of higher emissions that will follow, stating only that "the agency will provide annualized emission reduction estimates" in a final rule. Id. at 2.

Other commenters (0066 pp.11-12, 0137) similarly concluded that  - 

      Moreover, EPA's quantification of the foregone public health benefits is likely underestimated ... EPA only estimated the health impacts for four years, but it admits that wood burning devices have life expectancies of twenty years. See 80 Fed. Reg. at 13,693. Step one devices sold in 2021 would emit PM2.5 for decades. Thus, the negative health impacts of allowing a two-year sell-through period are likely far greater than EPA suggests in the proposed rule.

Another commenter (0053 pp.9-10) noted the RIA's truncated analysis and also claims that the year 2019 should not have been included in the estimate of forgone emissions reductions (benefits)  -  
      EPA Irrationally Ignores the Lifetime Emissions of Step 1 Heaters and Presents Instead a Flawed Analysis of "Truncated" Forgone Emissions Over Only Three Years
      EPA has calculated the forgone emissions reductions that will result from additional sales of Step 2 non-compliant wood heating devices over a truncated three-year period rather than over the lifetime use of these devices. But each Step 1 heater that is sold in the place of a Step 2 heater emits higher levels of PM2.5 over the lifetime of the product than the Step 2 heater would. In conducting the RIA for the 2015 NSPS, EPA assumed that wood heating devices typically have a 20 year use lifespan. In the original rule, benefits from emissions reductions were therefore calculated over this period: "our analysis assumes that a stove shipped in 2015 will emit in homes for 20 years  -  or until 2034." EPA now only provides three years' worth of those emissions reductions when calculating the forgone emissions. But by ignoring the later years, EPA has ignored a significant category of forgone benefits, rendering this proposed rule misleading and arbitrary and capricious. EPA notes this departure from "typical" lifetime emissions analysis in the Supplemental RIA, but a similar acknowledgement that lifetime emissions have been ignored does not appear in the Proposed Rule's preamble.
      It is no solution for the agency to provide these estimates in a finalized rule delaying Step 2 compliance. To comply with the APA [Administrative Procedure Act], EPA is required to provide the public with "general notice of proposed rulemaking" in enough detail to afford the public with a meaningful opportunity to comment on the proposed rule. In complying with this requirement, the agency must "make its views known . . . in a concrete and focused form so as to make criticism or formulation of alternatives possible." Failing to provide analysis disclosing the majority of the Proposed Rule's forgone benefits does not satisfy this standard. If the agency intends to move forward, the agency should re-propose the rule with the adequate calculations.
      EPA Deceptively Calculates Forgone Emissions Benefits Based on a Four-Year Average that Includes a Year Prior to the Proposed Rule Taking Effect
      EPA presents its calculation of "monetized net forgone benefits" in Table 3 of the Proposed Rule. The agency reports that the costs of the Proposed Rule, in the form of forgone benefits, range between $0.1 and $0.23 billion at a 3% discount rate and between $0.09 billion and $0.21 billion at a 7% discount rate. The agency generated these values by first calculating the value of forgone emissions in each year between 2019 and 2022, and then averaging these values over all four years. However, the agency's inclusion of 2019 in their annual average of emissions reductions is misleading. Under the agency's own analysis, the Proposed Rule's sole impact is to delay the 2020 compliance date, and so generates no forgone emissions until 2020. The year 2019 has no forgone benefits and should not be included in the average. By including 2019 in its calculation of average impacts, EPA significantly dilutes its estimates of annual forgone emissions, essentially dividing by four instead of by three. Had the agency properly omitted 2019, the average annual forgone emissions benefits would have been approximately $30 to $80 million higher, ranging between $0.14 billion and $0.31 billion at a 3% discount rate and $0.12 billion and $0.28 billion for a 7% discount rate.
      The agency's calculations of estimated present values and equivalent annualized values (presented in Table 4 of the Proposed Rule) suffer from this same flaw. In each case, the values are calculated over the four-year time span 2019 to 2022, where 2019 has no forgone emissions benefits because the Proposed Rule has not yet had an effect on emissions. Compliance with the APA requires that "[n]ot only must an agency's decreed result be within the scope of its lawful authority, but the process by which it reaches that result must be logical and rational." The illogical dilution of average annual forgone emissions reductions fails to meet this standard.

This sentiment is echoed by another commenter (0068 p.4) who claimed that "EPA's estimates of the costs and benefits are flawed", explaining the following  - 

       The sell-through provision would not take effect until May 15, 2020. In
estimating the foregone PM2.5 emission reductions that would result if the
sell-through is adopted, the period evaluated was 2019 through 2022.
Factoring 2019 into the average annual lost emission reductions (and
corresponding forgone health benefits) artificially dilutes the environmental
and health impacts of the proposed sell-through provision.
       In estimating the environmental and health impacts of the proposed sell through
provision, EPA failed to consider impacts beyond the sell-through
period. Hydronic heaters can last 20 years or more - and the adverse
environmental and health impacts from the operation of Step 1 units sold after
May 20, 2020 could last until the early-2040's
       The costs of this proposal outweigh the benefits by a range of 10:1 to 20:1
(using EPA's own flawed analysis). These ratios increase significantly if the
full life of the Step 1 units sold after May 15, 2020 are considered (NESCAUM
estimated these ratios to be as high as 158:1)

Response: 
The Agency acknowledged in the November 2018 supplemental RIA that we used a different method to calculate the estimates of forgone emission reduction for this analysis. As described by commenters, we presented information on truncated emission reduction, instead of more typical annualized emission reduction estimates. While this may appear to be unusual for such information to be presented in this fashion, we note that the benefits and costs for the 2015 RWH NSPS RIA were presented for the years 2015 to 2020 to reflect the years of implementation for the different phases of the NSPS (Step 1- 2015, Step 2- 2020). The benefit estimates for those years reflect the emission reductions estimated by the Agency. We presented truncated forgone emission reductions from 2019 to 2022 in order to be consistent with the presentation of results in the final 2015 NSPS RIA, as we stated in the supplemental RIA. We recognize, however, that the 2015 RIA did provide annualized emission reductions, though not a benefits analysis, over the model life of the affected wood heating devices. For the final rule, we said that we would provide annualized emission reduction estimates. However, we have decided not to promulgate changes associated with a sell-through period for any wood heating device category and such analysis is not needed at this time.

Regarding comments that our methodology underestimated emissions and foregone benefits, we note that even the truncated analysis showed that forgone benefits substantially outweigh cost savings to industry. This is true even though the Agency was unable to monetize the forgone benefits of reductions of CO, VOC, black carbon, and HAPs for the reasons mentioned in the supplemental RIA. In addition, including foregone emission reductions from 2019 in the proposal analyses was necessary to have a consistent timeframe for the scenarios analyzed in the supplemental RIA. Under scenario 3 in the supplemental RIA, an alternate scenario to the primary (Scenario 2), manufacturers were expected to increase production in anticipation of adoption of the sell-through beginning in 2019. 

2.4.2 Comment: The RIA scenario assumptions are not supported and underestimate environmental and societal costs
Multiple commentators (0053, 0054/0200, 0057, 0066, 0068, 0071, 0075, 0137, 0142) contended that EPA's assumed scenario in the supplemental RIA is unfounded and not supported by the available information, resulting in a significant underestimation of environmental and societal costs. For example, one commenter (0053 pp.7-8) asserted that "EPA underestimates the societal health costs of the forgone emissions reductions resulting from the proposed rule" partly because of incorrect assumptions evident in the supplemental RIA  -  
      Executive Order 12,866 instructs that the assessment of a regulation's costs and benefits should be made "on the best reasonably obtainable scientific, technical, economic, and other information," and effects should be quantified "to the extent feasible." Courts have held that "when an agency decides to rely on a cost-benefit analysis as part of its rulemaking, a serious flaw undermining that analysis can render the rule unreasonable."
      EPA Underestimates the Forgone Benefits by Assuming, Without Support, that Manufacturers Will Not Increase Production of Step 1 Heaters in Response to the Proposed Rule
      EPA underestimates the number of Step 2 non-compliant wood heating devices that will be brought to market as a result of the Proposed Rule. In order to calculate the increase in emissions that would result from the implementation of the two-year sell through period, EPA analyzed the effects of the Proposed Rule in the Supplemental RIA under three different scenarios. The agency designates Scenario 2 as the "primary" scenario that is "most representative of the impacts of the sell-through extension." Only this scenario is presented in the Proposed Rule itself.
      In Scenario 2, manufacturers produce the same number of wood heaters as assumed under the 2015 RIA, but they are allowed to sell inventory "that would otherwise have been stranded" until 2022. In this scenario, emissions are expected to increase as a result of sales of Step 2 non-compliant models in 2020-2022.
      But the agency provides no explanation for why it chooses to ignore a separate scenario, labeled Scenario 3, in which manufacturers are assumed to respond to the extension of the Step 2 compliance date by increasing their production of Step 1 compliant heaters beginning in 2019. In this scenario, emissions increase as a result of increased sales of Step 1 compliant heaters in 2020-2022 and forgone benefits would even higher than under Scenario 2. No mention of this manufacturer response, or the societal harms generated, are made in the preamble of the Proposed Rule published in the Federal Register. This is in spite of the fact that it is a very predictable outcome that manufacturers would ramp up production of Step 1 compliant devices in response to the two-year extension of the compliance date. Nevertheless, EPA fails to mention the possibility of this increase in production and lists only "Scenario 2" projected forgone benefits. By ignoring this relevant factor, EPA has "inconsistently and opportunistically framed" the economic impacts of the Proposed Rule in a way that renders the proposal arbitrary and capricious.
One commenter (0075 pp.5-6) similarly contended that  - 
      EPA also presents a dubious analysis of the impact of the sell-through period on the wood burning device market. The agency presents three possible scenarios, only one of which assumes manufacturers will produce any additional Step 1 compliant units in response to EPA's adopting the proposed sell-through period. Supp. RIA at 3. However, as manufacturers of other space conditioning products have repeatedly demonstrated, the rational response when a regulatory compliance date allows the sell-through of non-compliant products is to manufacture as many non-compliant products as possible in the time remaining. See U.S. Department of Energy, Technical Support Document: Energy Efficiency Program for Consumer Products: Residential Central Air Conditioners and Heat Pumps at 3-25 (Dec. 2016) (EERE-2014-BT-STD-0048-0098) (showing an 18% increase in shipments of central air conditioners and heat pumps in 2005, the year before federal efficiency standards took effect for units manufactured beginning in January 2006, followed by a decline in shipments in 2006); U.S. Department of Energy, Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Residential Clothes Dryers and Room Air Conditioners at 3-35 (Apr. 2011) (EERE-2007-BT-STD0010-0053) (showing a 39% increase in shipments of room air conditioners in 1999, the year before federal efficiency standards took effect for units manufactured beginning in October 2000, followed by a decline in shipments in 2001). Moreover, EPA's analysis of the benefits of the proposal arbitrarily ignores the ability of manufacturers to produce Step 1 compliant models in 2020. The agency assumes in all three scenarios that no Step 1 compliant models will be produced after 2019. Supp. RIA at 5. However, manufacturers have until May 15, 2020 to discontinue the production of these models, and the proposed sell-through period encourages that production. It is arbitrary for EPA to assume manufacturers will not make the most of the opportunity EPA is proposing to provide.
Another commenter (0057 pp.16-17) asserted that the "U.S. EPA cannot say whether the proposed sell-through would increase production and use of non-compliant heaters."  -  
      The primary driver of the Supplemental RIA's estimates of cost savings and emissions increases is the assumed populations of Step 1 and Step 2 devices sold each year in the future, which U.S. EPA presents as three possible scenarios. The assumptions made to forecast these inventories are not based on data or fact, and render the cost-benefit analysis arbitrary.
      All three scenarios incorporate an assumption that "no Step 1-compliant wood heaters will be produced after 2019," with or without the proposed sell-through. This assumption is made even though the Step 2 compliance date is not until May 15, 2020, and even though the purpose of U.S. EPA's proposal is to allow manufacturers to continue to produce non-Step 2-compliant heaters until that date.
      Scenario 2 uses the assumption that 20 percent of Step 1-compliant units would not be sold until the sell-through period; U.S. EPA describes this as the most likely scenario but does not provide any evidence to support either this assessment or the 20 percent value. (This statement indicates U.S. EPA's belief that 20 percent of Step 1 heaters would be stranded without a sell-through  -  which U.S. EPA does not suggest in the NPRM.) Scenario 3 assumes manufacturers increase production of Step 1-compliant devices by 10 percent above projections in the 2015 RIA for the NSPS, but does not provide any data supporting this assumption. Given the industry requests for the proposed sell-through, evidence to support these assumptions should be readily available. If uncertainty exists, U.S. EPA should perform sensitivity analyses to demonstrate the potential costs, health impacts and benefits of the proposal under various assumptions.
      Regardless of the specific assumptions used for these projections, the health costs to individuals across the United States vastly outweigh the cost savings to industry. However, accurate assumptions about future behavior are critical to understanding the potential adverse health impacts that result from the proposed amendments. If industry were to flood the market with a large number of low-cost Step 1 devices above the population estimated in Scenario 3 of the Supplemental RIA, then the adverse health impacts could be much larger than estimated. It is necessary to provide evidence to demonstrate likely adverse health impacts of the proposed amendments to the public.
Other commenters (0066 p.7,11, 0137) similarly stated that  - 

      In [the RIA's] scenario 2, EPA assumed manufacturers would produce the same number of units anticipated in the 2015 rule, but an additional two years would be needed to sell existing inventory. Under this second scenario, consumers would purchase wood boilers and forced air furnaces that did not comply with the step two emission standards during the May 2020-22 period instead of purchasing those that did comply. In scenario 3, EPA assumed that manufacturers would increase production of step one-compliant devices before the May 2020 deadline, knowing that retailers could sell those devices until May 2022. EPA stated that it believed that scenario 2 was the primary, and most likely scenario, without explaining the basis for that reasoning. See Supplemental Regulatory Impact Analysis at 13. ...
      Moreover, EPA's quantification of the foregone public health benefits is likely underestimated, for two reasons. First, EPA avoided selecting the most likely scenario (scenario 3) that would result in even more foregone public health benefits. EPA selected scenario 2, where manufacturers would sell no more step one-compliant devices than anticipated in the 2015 performance standards, as the primary scenario. EPA provided no justification, however, for its assumption that scenario 2 was more likely than scenario 3, in which manufacturers would increase production of step one devices because retailers would have additional time to sell them. Given the evidence in the record that step two-compliant devices are more expensive to manufacture -- and therefore result in relatively less profit for manufacturers compared to step one-compliant devices -- EPA's assumption that manufacturers that support a sell-through will not ramp up production of step one-compliant devices runs counter to common sense. If EPA had selected scenario 3 as the primary scenario, the estimated health impacts would be even greater. See Supplemental Regulatory Impact Analysis at 9, 17 (showing that foregone emissions reductions under scenario 3 are greater than under scenario 2).
Contrary to the RIA's scenario assumption, at the public hearing, a commenter (0142 p.32) testified that "the sell-through provision would encourage manufacturers to ramp up production of Step 1 devices before the May 2020 deadline because they would have a longer period of time to sell Step 1 devices through their distribution chains."

Another commenter (0054/0200 p.8) stated that  - 

      NESCAUM, however, is concerned that EPA has seriously understated the number of Step 1 units that could be sold during the proposed two-year sell-through period. In the Supplemental RIA, the Scenario 2 analysis assumes that sales in 2019 will decrease by 17 percent for all appliances. Those sales represent the stranded inventory, which translates into roughly 12,000 non-Step 2 stoves and 5,000 central heaters being sold during the 2020-2022 period. In its RIA, EPA provides no basis for the 17 percent figure. EPA's Scenario 3 analysis, which assumes an increase in production rates for Step 1 appliances, only anticipates 24 percent of a single year's inventory will be available for sale during the two-year sell-through period. Manufacturers, however, have indicated that they have at least one year of inventory in the pipeline and there are 17 more months before the production deadline. EPA's assessment of the number of Step 1 units is inconsistent with prior manufacturers' comments, which indicate that at least 200,000 Step 1 wood stoves and 46,000 Step 1 central heaters could be sold during the sell-through. If EPA were to adopt the industry numbers, the foregone emission benefits will be at least an order of magnitude greater than assumed in the RIA.

Another commenter (0071 pp.4-5) referenced an analysis by the above commenter (0054/0200) and asserted that  - 
      EPA has underestimated the cost to human health
      Allowing the continued sale of non-compliant devices is unacceptable. Due to the long lives of these devices, they would continue to spew toxic pollution for decades. The result would be years of harm to human health from wood smoke pollution that could have been prevented.
      EPA begins to look at the impact of those in the Regulatory Impact Assessment (RIA) included with this proposal. In this RIA, EPA only examines the impact of the period from 2020 to 2022, offering to provide a complete assessment in the final rule. Even with this short look at the exposure, EPA underestimates the impacts that this rule with have on health across the nation.
      To demonstrate the underestimation, consider the findings of similar analysis by the Northeast States for Coordinated Air Use Management, using the same detailed estimate of emissions prepared for EPA in 2015. NESCAUM used that data to estimate the annual excess PM2.5 emissions and the related health costs that would occur if the deadline for implementing the Step 2 standards was shifted again to 2022. Their analysis examines the annual impact of these emissions from just the 3-year delay, which NESCAUM estimated to be 2,536 tons per year. Their findings were significant:
            "(W)e estimate 110 to 360 additional deaths per year from the excess PM2.5 emissions during 2020-2022. Similarly, we estimate the additional health costs from delaying the NSPS by 3 years to be in the range of $1.0 billion to $2.3 billion annually (2013$, 3% discount rate) during the 2020-2022 timeframe." 
      Their study also estimated 25,000 childhood asthma attacks, and 48,000 missed work days, among the other health impacts for each year of these additional emissions.
      By contrast, EPA's estimates in the Regulatory Impact Analysis paint a far rosier picture. Looking at EPA's worst case (Scenario 3, where manufacturers "take advantage of the additional 2 years" to produce and sell more Step 1 devices), EPA's estimate of the reductions in PM2.5 emissions ranges each year are significantly lower, with the highest in 2022 of 790 tons (EPA, RIA 2018).
      Evidence from other similar cases shows that EPA has likely underestimated the impact on sales, and therefore, emissions in the RIA. EPA predictions in the RIA have the manufacturers maintaining about the same sales of these Step 1 devices each year until 2022 (EPA RIA, 2018). However, in other cases, manufacturers increased the production and distribution of the older and less efficient models before the date when the requirements for new and more efficient models would begin. Studies that the U.S. Department of Energy did examining the transition to more efficient clothes dryers, central and room air conditioners and heat pumps found that manufacturers spiked their distribution of the older models by as much as 39 percent before the new models went on sale., 

Furthermore, another commenter (0068 p.4) asserted that  - 

      EPA assumed that manufacturers would not produce new Step 1 units during
the period of January 1, 2020 through May 14, 2020. This assumption is
only valid if an additional provision is added to the rules prohibiting the
production of Step 1 units for sale in the United States after December 31,
2019.

Response: 
We appreciate these comments and information on the likelihood that increased sales of Step 1 wood heating devices would occur during a sell-through period and the timeframe of these sales. We would have taken this information into account, along with other information were we to revise the supplemental RIA. 

2.4.3 Comment: The RIA fails to evaluate how Step 1 devices will compete with Step 2 devices, to the potential detriment of those manufacturers who have invested in Step 2 technology 
Several commenters (0054/0200, 0057, 0059, 0066, 0137) noted that EPA failed to evaluate the proposal's impact on the competitiveness of Step 2 devices if lower cost Step 1 devices are still on the market. For example, one commenter (0057 pp.20-21) argued that  - 
      EPA acknowledges that some manufacturers will have Step 2 devices available for sale in 2020, and that these Step 2 devices would be more costly than non-compliant devices: "EPA is aware that there are a small number of Step 2 certified models currently available to purchase. However, the price difference between the Step 2 models and Step 1 models may dampen demand for these heaters." Manufacturers who have Step 2 devices available for sale, as required by the NSPS, have invested time, effort, and capital to meet the requirements. These investments result in a costlier product, which manufacturers understood would be the only product allowed for sale beginning in May 2020. Adding a sell-through provision now would open the market to competition from less costly Step 1 devices, which could undercut sales of Step 2 devices and preclude these businesses from recouping upfront costs in the timeframe expected.
      Executive Order (E.O.) 12866 requires an analysis of the costs that may impact "efficient functioning of the economy, private markets (including productivity, employment, and competitiveness), health, safety, and the natural environment)." In 2015, the NSPS set clear expectations for the market, resulting in certainty for manufacturers. Retroactively changing the requirements would result in a competitive disadvantage for manufacturers who made the investment in developing Step 2 devices on time, effectively penalizing these manufacturers for their compliance. This competitive disadvantage was not analyzed as required. The Supplemental RIA justifies the sell-through given that "retailers are concerned they will not be able to sell [Step 1] devices before the May 2020 Step 2 compliance date and will be left with unsalable inventory." However, there is no attempt to quantify the potential impact of retailers that will have unsalable, more expensive Step 2 devices under the proposed amendments.
      Costs to manufacturers who will no longer be able to sell their Step 2 devices also were not quantified. The NSPS assumed that all devices sold beginning in May 2020 will be Step 2 devices. The Supplemental RIA for the proposed amendments assumes that the same total number of devices are sold, but that a mixture of Step 2 and Step 1 devices are sold rather than only Step 2. The Supplemental RIA states, "The other costs of [manufacturing] such as research and development (R&D) are sunk and still required by the NSPS, and thus are not included in the cost savings estimate." However, manufactures that produce Step 2 devices anticipated the ability to recoup increased manufacturing costs by passing these costs on to the consumer. If the proposed amendments open the market to less costly Step 1 devices, manufacturers may have to reduce the price of Step 2 devices to compete, thus resulting in a loss of revenue to those businesses. EPA did not quantify any potential changes to wood heater prices or output changes from the proposed amendments. The NSPS RIA states "While we are unable to estimate price and output changes, we note that the high increase in unit costs for some affected appliances could lead to potential nontrivial increases in market price to wood-burning appliance consumers."
      In addition, the sales of Step 2 devices will be lower than the baseline, resulting in potential losses to some businesses. These losses could damage the very businesses who put forth the effort to comply, resulting in job loss and potentially bankruptcy for small businesses. This could further disrupt the market and sales of Step 2 devices, causing further emissions increases. The magnitude of this effect and impact on potential emissions increases must be estimated to accurately assess the need for these proposed amendments.

Likewise, another commenter (0059 p.2) noted that "Extending deadlines at this point rewards manufacturers of equipment that did not plan in advance and punishes manufacturers that did plan and can meet retailers' demands and the 2020 standard."

A commenter (0054/0200 pp.8) similarly stated that "EPA analysis of industry impacts is incomplete because it fails to account for the negative economic consequences for companies that have invested in Step 2 appliances.", 

Other commenters (0066 p.12, 0137) made similar claims and also suggested that manufacturers not only had time to comply with the Step 2 standard, but also that the choice to delay litigation was strategic on their part  -  

      Furthermore, EPA's proposed sell-through would reward manufacturers that did not diligently comply with an already generous five-year phase in period. For example, at the EPA public hearing for the proposed rule on December 17, 2018, a representative for Hearth and Home Technologies stated that her company had engaged in research and development for the past twenty-four months. However, the industry was put on formal notice by the proposed NSPS issued in February 2014 (five years ago) that particulate matter standards would be strengthened. The companies that have developed step two compliant devices would suffer business losses if EPA gives an advantage to dilatory companies. Moreover, manufacturers had the opportunity to promptly litigate the legality of the 2015 NSPS, but chose instead to delay that litigation for more than three years (presumably to try and convince EPA to weaken the standards). To the extent these companies delayed in moving ahead to develop compliant wood boilers and furnaces, that was a conscious choice that should not be rewarded with an additional two years to sell noncompliant devices.

Response:
We appreciate these comments and information on the potential impacts of higher costs of Step 2 devices compared to Step 1 devices. We note that a review of current costs, including information from other comments on the proposal, does not uniformly support this assertion, but this overall issue would have been taken into account were we to revise the supplemental RIA.

2.4.4 Comment: The RIA overstates the cost savings to manufacturers
One commenter (0054/0200 p.9) asserted that  - 

      The EPA also overstates the cost savings manufacturers would realize by minimizing "stranded inventory." The Agency fails to acknowledge that manufacturers have multiple avenues to continue sales of these appliances beyond allowing a sell-through period. As witnessed during the transition to Step 1 requirements for subpart QQQQ appliances, some manufacturers revised the advertised use of these appliances to light commercial, which are not covered by the NSPS. While NESCAUM does not endorse such strategies, we note that Central Boiler and Hardy Heaters continue to sell uncertified units for light commercial use that they previously sold for residential applications. A YouTube video from installers highlights the industry perspective on the units after rule promulgation - https://www.youtube.com/watch?v=H4s5uiXrWik. Additionally, sales of Step 1 units will still be legal outside the U.S., where many manufacturers have distribution networks. Manufacturers can offer to take back unsold inventory from retailers and use their international distribution chains to minimize issues presented by implementation of Step 2 in the U.S.

      Response:

We appreciate that the commenter offers additional information for consideration on the fate of "stranded" Step 1 devices that would have been taken into account were we to revise the supplemental RIA.

2.4.5 Comment: The RIA fails to analyze impacts on sub-populations of concern
Several commenters (0057, 0065, 0074) argued that the EPA failed to analyze impacts of increased emissions from the sell-through on sub-populations of concern such as children, the elderly, those with pre-existing medical conditions, and those who are socioeconomically disadvantaged.

One commenter (0057 pp.21-25) asserted that EPA failed to analyze impacts on "sub-populations of particular concern"  - 
      Per Presidential E.O.s and OMB Circular A-4, agencies must describe how "both benefits and costs are distributed among sub-populations of particular concern." Without quantifying the adverse health and environmental impacts likely to result from the proposed NSPS amendments, it is not possible to describe their distributional impacts. A number of sub-populations of particular concern are likely to be impacted by the proposed NSPS amendment. Air pollution is known to disproportionally impact multiple groups including children, elderly, those with pre-existing cardiopulmonary diseases and those with low socioeconomic standing. As such, emissions increases may disproportionally harm these groups, and these impacts were not analyzed.
      Impacts on Children
      E.O. 13045 and OMB Circular A-4 require additional analyses in the case that a regulation could produce environmental health risks that disproportionately impact children. E.O. 13045 requires Federal agencies to "make it a high priority to identify and assess environmental health risks and safety risks that may disproportionately affect children." In addition, E.O. 13045 requires each significant regulatory action to evaluate the environmental health or safety effects on children, and explain why the proposal is preferable to other potentially effective and reasonably feasible alternatives.
      U.S. EPA acknowledges that the proposed action is subject to E.O. 13045 and states that the proposed amendments would not impose disproportionate risk, but fails to provide any analysis or evidence to support this assertion. Instead, U.S. EPA attempts to apply its 2015 finding that the NSPS would not disproportionately impact children, ignoring the agency's disparate obligations for analysis of the NSPS as a health-protective action and the proposed deregulatory amendments, which do have the potential to disproportionately harm children. U.S. EPA's attempt to simply apply the 2015 finding under E.O. 13045 also disregards its earlier determinations of the specific benefits that the NSPS provides to children. The RIA for the NSPS both quantified and monetized the reduced incidence of infant mortality from exposure to PM2.5 and reduced incidence of morbidity from exposure to PM2.5 on acute bronchitis in children ages 8 to 12, lower respiratory symptoms in children ages 7 to 14, upper respiratory symptoms in asthmatic children ages 9 to 11, and asthma exacerbation in asthmatic children ages 6 to 18. The NSPS RIA also noted multiple studies suggesting that formaldehyde, which the proposed amendments would increase, may disproportionately increase the risk of asthma in youth.
      U.S. EPA's acknowledgment of the potential disproportionate impacts on children is limited to "the delay of the emission reductions of some hydronic heater and forced air furnace appliances in the 2015 NSPS by up to two years," which it says "will not alter the EPA's prior findings that on a nationwide basis, cancer risks due to residential wood smoke emissions among [children] generally are lower than the risks for the general population due to residential wood smoke emissions." These statements ignore both the 20-year lifespan of the additional noncompliant heaters that U.S. EPA proposes to allow to be sold during the proposed sell-through period, and the many health and welfare impacts of woodsmoke on children besides increased cancer risk.
      Additionally, U.S. EPA claims that children will continue to be adequately protected by "existing NAAQS and other mechanisms in the CAA." ignoring both the impact of increased emissions on areas in non-attainment with NAAQS and U.S. EPA's many concurrent efforts to undermine and avoid its other regulatory obligations. The proposed NSPS amendments have the potential to cause environmental harm that disproportionately impacts children, and U.S. EPA has not met its obligation to analyze these impacts.
      Environmental Justice Impacts
      E.O. 12898, Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, requires additional analyses of regulations that could produce environmental health risks with environmental justice impacts. E.O. 12898 requires agencies to evaluate proposed actions for "disproportionately high and adverse human health or environmental effects on minority populations, low-income populations and/or indigenous peoples." Additionally, § 601 of Title VI of the Civil Rights Act of 1964 prohibits discrimination under covered programs and activities.
      U.S. EPA claims that the proposed action is not subject to E.O. 12898 because the proposed amendments would not impose disproportionate impacts, but it provides no evidence for this position. As with its non-analysis of disproportionate impacts to children, U.S. EPA inappropriately attempts to apply its 2015 findings regarding a health-protective action to its current deregulatory proposal. However, in the NSPS RIA, U.S. EPA wrote:
            This rule establishes national standards that will reduce primarily PM emissions from new residential wood heaters and is expected to decrease the amount of these emissions to which all affected populations are exposed. These emissions happen in minority and low-income neighborhoods and affect people in their homes. To the extent that minority populations and low-income populations are more vulnerable, this rule will help.
      U.S. EPA's NSPS could not generate disproportionately high and adverse human health or environmental effects on any population because it was a health- and environmentally-protective action. U.S. EPA may not apply this conclusion to its current deregulatory proposal.
      U.S. EPA's acknowledgment of the potential disproportionate impacts on the populations covered by E.O. 12898 is limited to "the delay of the emission reductions of some hydronic heater and forced air furnace appliances in the 2015 NSPS by up to two years," which it says "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." These statements ignore both the 20-year lifespan of the additional noncompliant heaters that U.S. EPA proposes to allow to be sold during the proposed sell-through period, and the many health and welfare impacts of woodsmoke on these populations besides increased cancer risk.
      U.S. EPA also attempts to avoid its responsibilities under E.O. 12898 by asserting that "the overall distribution of the avoided compliance costs as well as the distribution of forgone benefits is uncertain." This is similarly disingenuous: U.S. EPA knows "the overall distribution of the avoided compliance costs"  -  which would benefit a subset of the industry  -  and cannot skirt an analytical requirement by referencing uncertainty, as the purpose of the analysis is to reduce that very uncertainty.
      The proposed NSPS amendments have the potential to cause environmental harm that disproportionately impacts environmental justice communities, and U.S. EPA is obligated to perform an analysis of these impacts.

Likewise, another commenter (0065 p.4) stated that  - 
      Also of concern are EPA's statements in the NPRM that "EPA does not believe that the
environmental health risks or safety risks addressed by the NSPS present a disproportionate risk to children" and that "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." These statements are at odds with what EPA reported in its March 2013 publication, Strategies for Reducing Residential Wood Smoke: "People with diseases that affect the heart or lung (including asthma), older adults, children, and people living in lower socioeconomic conditions are at greatest risk from PM2.5 exposure." Further, a comparison of median household income in communities across the country with elevated levels of PM2.5 to corresponding state median household income reveals that median household income in at least half of those communities is below the median state household income.
Another commenter (0074 pp.7-12) discussed the impacts the sell-through might have on sub-populations of concern in their state  - 
      Weakening the standards will have disproportionate effects on low-income communities, children's health, minority communities, and communities already experiencing high public health burdens from residential wood combustion.
      DEQ currently estimates there are about 591,000 homes in Oregon with a wood burning device. Approximately 150,000 homes have an uncertified woodstove and 212,000 homes have a fireplace, two of the most polluting devices. In general fireplaces are typically utilized for ambiance heating, (e.g., used only 2-3 times a year), whereas woodstoves are typically used on a daily basis throughout the winter months. DEQ estimates there are about 214,000 homes with certified woodstoves and pellet stoves. DEQ woodstove surveys have indicated usage of all wood burning devices at around 17% as a main source of heat and 37% as a secondary source of heat. Nationally, there are approximately 195,000 certified woodstoves, woodstove inserts, and pellet stoves that are shipped from manufacturers to retailers and stores each year. ...
      PM impacted communities are overwhelmingly low-income communities.
      Oregon DEQ takes issue with EPA's assertion that "this proposed action will not have disproportionately high and adverse human health or environmental impacts on minority populations, [or] low-income populations." Nationally, many low-income households burn wood and are affected by wood smoke pollution. According to EPA's own publications, people living in lower socioeconomic conditions are at greatest risk from PM2.5 exposure.
      In Oregon, the communities most impacted by PM2.5 from residential wood combustion are disproportionately and significantly lower-income than communities not impacted by woodsmoke.
      Four communities in Oregon are currently under PM2.5 maintenance plans or PM advance plans, and all four of those areas have median incomes significantly lower than the statewide median income (See Table 3, entitled Median incomes of communities under PM2.5 maintenance plans or PM Advance plans compared to Oregon state median income [2016]). This pattern holds for the 11 communities in Oregon working to reduce wood smoke and/or PM emissions: all except one have median household incomes that are significantly lower than the statewide median income. There is a clear and obvious pattern of higher impact of wood smoke pollution and health impacts on lower income communities in our state. [emphasis original]
      Modeling of air toxics in the Portland Metro area shows vulnerable groups at higher risk of health impacts attributable to residential wood combustion.
      Oregon DEQ created the Portland Air Toxics Solutions project  to work with the local community to develop air toxics reduction strategies for the Portland region, including portions of Multnomah, Washington and Clackamas Counties. Many of the same sources produce air toxics, particulates, greenhouse gases and ozone, and Portland Air Toxics Solutions was created to support ongoing and future regional air pollution reduction efforts.
      The Portland Air Toxics Solutions modeling study assessed 19 pollutants and identified 14 of them that are above clean air health goals, or benchmarks. Eight of the 14 pollutants cause the most risk. These pollutants are: 1, 3 butadiene, benzene, diesel particulate, 15 PAH, naphthalene, cadmium, acrolein, and formaldehyde. Residential wood burning was estimated to be the second largest source of air toxics, after gasoline and diesel engines, producing 15 PAH (polycyclic aromatic hydrocarbons) and naphthalene (see Table 4, "Portland Air Toxics Solutions estimates of air toxics in 2017" captioned The Portland Air Toxics Solutions modeling study found that residential wood combustion to be the major source of 2 major air toxics present at 10 times over the benchmark for that air toxin.).
      Smoke from residential wood combustion impacts children's health.
      Children's risk of cancer is associated with cumulative exposure to environmental carcinogens and gene-environment interactions during their growth and development. Many of the air toxics have carcinogenic properties and some are established human carcinogens.
      Asthma is one of the most common chronic conditions affecting children. Many of the air toxics have irritant properties that may worsen asthma status for children already diagnosed with asthma, and some of the air toxics are associated with the development of asthma.
      Fetal growth and development may be particularly vulnerable to air toxicant effects, which manifest as adverse birth outcome such as spontaneous abortion, low birthweight, or congenital anomalies.
      Based on prevalence of exposure concentrations above health benchmarks, the four air toxics causing significant children's health risks across Portland are benzene, diesel particulate matter, polycyclic aromatic hydrocarbons (PAH, tar-like byproducts from incomplete burning of carbon-containing substances), and acrolein. Three out of four major pollutants associated with impacts on children's health in the study have residential wood combustion as a major source. ODEQ is concerned about these issues statewide. [Table 5, entitled Wood burning is a major source of children's health concerns., shows that all but diesel particulate emanates from wood burning]
      E. Minority communities experience disproportionate pollutant burdens from residential wood combustion in the Portland area.
      The PATS [Portland Air Toxics Solutions] model found that Hispanics/Latinos were highly likely to be disproportionately impacted by residential wood combustion in the Portland Metro area (p<0.05). As such, any delay in realizing air quality benefits is likely to disproportionately impact Latino/a and Asian communities in the Portland Metro area. Oregon DEQ finds EPA's assertion of little to no disproportionate impacts on minority communities  to be incorrect. [emphasis original] See Figure 3 [entitled, Maps from Portland Air Toxics Solutions showing percent population Hispanic/Latino and Concentrations of air toxics above benchmarks in the study area].
Response: 
We appreciate these comments and information on the impacts of the proposed sell-through provisions on sensitive populations. We have decided to not promulgate the proposed sell-through provisions, which should address these concerns.

2.4.6 Comment: The RIA fails to evaluate consumer behavior
One Commenter (0057 p.19) noted that EPA does not take into account consumer fuel switching in the RIA  - 
      U.S. EPA does not "contemplate in this analysis consumers switching to heaters that use other fuel types such as natural gas," which does not allow a full understanding of the potential impacts of either the 2015 NSPS or the proposed amendments. Fuel switching in response to price impacts has important economic and emissions consequences. This would increase revenue to manufacturers of other heating devices, decrease revenue to manufacturers of wood and pellet heating devices, and change ongoing energy costs for consumers. In addition, the conversion from even the cleanest wood or pellet heater to natural gas or electricity comes with significant emissions benefits. Consumer fuel switching is a potential response that must be analyzed to understand the impacts of the proposed amendments.
Response: 
We appreciate the comment that fuel switching is a possible consumer response to changes in the regulation We recognized the potential for fuel switching by current wood heater users in the supplemental RIA, but explained that we were unable to prepare an analysis of this effect for the proposal. We mention in the 2015 NSPS RIA that an increase of 1% in non-wood (i.e., natural gas, oil) would lead to an increase of 1.82% in residential wood energy consumption, and vice versa. The potential for fuel switching would be considered were we to revise the supplemental RIA.

2.4.7 Comment: The RIA fails to evaluate the costs to state and local governments
Several commenters (0057, 0074) argued that EPA has not evaluated or acknowledged, even qualitatively, the increased costs to state and local governments, which could result from the sell-through proposal. For example, one commenter (0057 p.18) asserted  - 
      California Senate Bill No. 1383, signed into law in 2016, requires California to reduce anthropogenic black carbon emissions by 50 percent below 2013 levels by 2030. In 2030, residential wood combustion is projected to be one of the largest individual sources of black carbon in California, responsible for 24 percent of all anthropogenic emissions. In developing these targets and implementation strategy, California policymakers assumed that woodstove emissions reductions from the NSPS would be in place. Any increased black carbon emissions that would result from the proposed amendments must be mitigated in California to meet the SB 1383 2030 targets. California would be required to implement additional programs, regulations, or incentives to make up for the increased emissions that result from these proposed amendments, resulting in increased costs.
      In addition, as noted above, areas within California are in non-attainment for the PM2.5 NAAQS. As U.S. EPA acknowledges, even if the proposed sell-through is finalized, "Areas that need to reduce criteria air pollution to meet the NAAQS will still need to rely on control strategies to reduce emissions." This may result in the need to develop new programs to address these emissions impacts, creating new fiscal costs to plan, promulgate, implement, and enforce additional regulations, programs or incentives. U.S. EPA has not acknowledged or incorporated these costs, even qualitatively, in its analysis.

Another commenter (0074 pp.7-8) discussed the impacts on their state similarly  - 
      Weakening the standards will have disproportionate effects on low-income communities, children's health, minority communities, and communities already experiencing high public health burdens from residential wood combustion. ...
      PM impacted communities already bear a higher health burden from conditions associated with residential wood burning and poor air quality.
      The counties and communities affected by high levels of PM2.5 also already experience levels of health impacts higher than the state average for chronic and environmental health conditions associated with residential wood combustion, such as asthma (Table 1, entitled Chronic Diseases among Oregon adults  -  Asthma (2012-2015)), and chronic respiratory diseases (Table 2, entitled Oregon State Populations Health Indicators  -  Chronic Lower Respiratory Disease (2012-2016)).
      Plans for improving air quality and public health in these communities were based on the use of cleaner-burning devices as legislated by the 2015 NSPS. Delays will mean a greater burden on public agencies including health agencies, hospitals, schools, and employers.
Response: 
We appreciate these comments on State programs and their efforts to reduce air pollution impacts. We have decided not to promulgate the proposed sell-through provisions, which should address these concerns. We would consider this information on State programs were we to revise the supplemental RIA. 

2.4.8 Comment: The RIA fails to account for incentive programs
An association of state regulatory agencies in the Northeast (0133 pp. 4-5) argued that EPA's cost analysis should take into account generous incentive programs that some states offer for switching from Step 1- to Step 2-compliant devices, which make Step 2-compliant devices more affordable  - 

      Incentive programs for central heating appliances in the Northeast provide purchase rebates for units with performance levels typically below 0.10 lb/MMBtu heat output. In the Vermont program, prices for residential-sized central heating appliances varied widely (138 units <200,000 Btu/hr), ranging from $4,221 to $24,412 with an average of $12,184. Costs from the New York program are similar with average pellet boiler costs of $11,700. ...In assessing the economic impact of transitioning from Step 1 to Step 2 standards, EPA should take into account the generous incentives states are providing to cleaner appliances. As shown in Table 3 [of comment 0133] incentives for central heating appliances can reach as high as $21,000, while the stove incentives range from $500 to $1,500, further reducing the cost to purchase and install high efficiency, low emissions wood heating appliances. Details on these programs can be found in Attachment 4 [of comment 0133].
      
Response: 
We appreciate the information on the potential impacts of State incentive programs. We recognize the potential impacts of State wood heating device incentive programs in the baseline for the regulatory actions affecting this industry. We would consider this information were we to revise the supplemental RIA.

      

3.0	Support for Sell-Through 
Section 3 presents comment excerpts and summaries regarding support for the sell-through for all wood heating devices and for each category of devices specifically (hydronic heaters, forced-air furnaces, and wood heaters regulated under subpart AAA). While the basis of the support presented in Section 2 is legal in nature, the basis of the support in this section is primarily economic and practical in nature and most comments included herein are from retailers, manufacturers and industry trade groups. 

3.1	Support for Sell-Through for All Wood Heating Devices
Section 3.1 includes comments of support for the sell-through that were not indicated by the commenter as being specific to one type of wood heating device, but rather applied to all types. Additional appliance-specific comments are provided in Sections 3.2, 3.3 and 3.4 for hydronic heaters, forced-air furnaces, and wood heaters regulated under subpart AAA.

3.1.1 Comment: EPA's rationale for proposed sell-through applies to all regulated wood heating devices, under both QQQQ and AAA
Multiple commenters (0051, 0063, 0067, 0070, 0123, 0142) asserted that the same sell-through EPA proposes for hydronic heaters and forced-air furnaces under subpart QQQQ should also apply to all wood heaters regulated under subpart AAA. 

The industry trade group testified at the public hearing (0142 pp.44-45) that  -  
      HPBA emphatically supports the granting of additional sell - -through for QQQQ appliances. However, it is every bit as important that the same provisions be granted to AAA products.
Likewise, in a submitted comment (0063 p.8) the industry trade group contended that  - 

      The ability to continue selling Step 1 products until May 15, 2022 is a reasonable and necessary means of avoiding the significant economic harm that regulated entities stand to suffer if Step 1 products are stranded in commerce after May 2020. ...EPA should also revise Subpart AAA to allow Step 1 woodstoves and pellet stoves to be sold until May 15, 2022. Sell-through is every bit as important to ensuring that wood and pellet stove manufacturers have the benefit of the five-year lead time to develop full lines of Step 2-compliant products.

A manufacturer (0070 p.1) similarly supported EPA's proposed sell-through and furthermore asserted that the sell-through should apply to all wood heating devices  - 

      USSC [United States Stove Company] fully supports the EPA's proposal for a two-year sell-through period of Step 1 products (compliant to May 15, 2015 PM emissions limits) at retail for 40 C.F.R. Part 60 Subpart QQQQ products, so long as they are manufactured before May 15, 2020. We also feel that it is paramount to provide the same sell-through at retail for all 40 C.F.R. Part 60 Subpart AAA products.

Another commenter (0051 p.2) asserted that "the obstacles EPA has identified as applicable to hydronic heaters and forced-air furnaces may also apply to residential wood stoves and pellet stoves. If retailers have inventory they cannot sell, and manufacture is interrupted because of Step 2 as currently implemented, NAHB [National Association of Home Builders] members will be unable to supply their customers with these heaters at a reasonable cost or in a timely manner."

Response: 
We appreciate the commenter's assertion that regulated entities stand to suffer "significant economic harm ... if Step 1 products are stranded in commerce after May 2020" and that this may apply to AAA devices as well as QQQQ devices. However, data was not provided to the Agency showing that Step 1 devices would indeed be stranded in commerce and the cause of the claimed stranding. Manufacturers and retailers failed to show how much of an increase in stranded inventory has taken place as a result of the NSPS, an important consideration given that stranded inventory, sometimes for more than one year, is not uncommon in the residential wood heating device industry. While manufacturers and retailers made qualitative statements asserting economic harm from stranded inventory if a retail sell-through was not allowed, these statements were not supported by contextual data. In fact, very little data were submitted to the Agency in response to the NPRM's solicitations showing, for example, a percentage decrease in sales approaching 2020 relative to previous years and/or the percentage of Step 1 inventory that would be stranded without a sell-through since the promulgation of the NSPS in 2015. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that in every wood heating device category, models certified to meet the Step 2 standards are available. Finally, commenters did not provide sufficient data or discussion to explain why the five-year period from 2015 to 2020 was not adequate time for manufacturers and retailers to manage their inventories of Step 1 units to avoid stranded inventory. See also our response in 2.3.2.

3.1.2 Comment: Sell-through necessary to allow retailers to continue to purchase and sell Step 1 heaters, so manufacturers can fund Step 2 model development and certification 
Some commenters, in submitted comments and in testimony at the public hearing (0063, 0142), asserted that the sell-through is necessary to allow retailers to continue to purchase and sell Step 1-compliant heaters (i.e., heaters that are not Step 2-compliant), so that manufacturers have the funds to complete Step 2 model development and certification.

For example, a representative from the industry trade organization testified at the public hearing (0142 pp.18-20) that manufacturers and retailers need the extra time provided by the sell-through to fund the final development of Step 2 models  - 
      I understand that the emission limits for wood stoves are not in question here. This is true. But surely it is our goal to deliver demonstrated real-world reductions with products that truly reduce wood smoke in a cost-effective manner. The manufacturers need the final year and a half of this Step 1 period to finish developing these stoves, to finish finding ways to make them less expensive and, most important of all, to be certain that the new models really work, that they can be successfully operated by consumers, and that they hold up for the 20-plus years they'll last. 
      Currently, the retail stove dealers are terrified of the rigid May 15, 2020 cutoff in the original rule. Our business is very dependent on the weather, and we may or may not have enough cold weather everywhere in the country for all dealers to move their remaining Step 1 stoves by that deadline. The net effect of that is that the system has seized up. Dealers are frantically clearing out every Step 1 stove they can and trying to move to stocking only Step 2 models, which are either mostly pellet units or, in many cases, new units which may be certified but not yet even in production as manufacturers must first move all their old Step 1 units. Either way, dealers are not ordering many Step 1 stoves, and the manufacturers are being starved for resources at a time when they need to "turn on the gas" on testing.
      When the 2015 rule was promulgated, manufacturers knew it would be a tough deadline to meet and suspected that the lack of a Step 1 sell-through provision would be problematic. Now we know it is. There is also no in-situ evidence that a two-year extension will actually cost our airsheds anything. This NSPS may last for many years, and a two-year sell-through now will enable us to generate better performing units that tend to cost less and be better for the environment for a long time.
Likewise, another commenter testified at the public hearing (0142 pp.45-46) that "Importantly, it is through the revenue from sales of Step 1 appliances that manufacturers have the resources to develop, test, and certify products to the Step 2 standards taking effect on May 15, 2020." In submitted written comments, this same commenter (0063 pp.3, 11-12) explained that  - 

      In addition to avoiding the economic harm to small businesses from stranding unsellable appliances in commerce, a two-year sell-through period is necessary for a different reason. As recognized in the preamble to EPA's current proposal, the lack of a sell-through provision in the 2020 standards is currently impacting manufacturers' ability to develop, test, and certify Step 2-compliant products because (i) a substantial number of retailers in the hearth appliance industry are reducing or even eliminating orders of Step 1 appliances, even though the Step 2 compliance deadline is still well over a year away; and (ii) the downturn in Step 1 sales revenues jeopardizes many manufacturers' efforts to bring Step 2-compliant products to market. ...
      EPA's current proposal details how "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." The fact that this is already happening so far before May 2020 should not have come as a surprise. When HPBA commented on EPA's 2014 proposal, one of HPBA's consultants with decades of experience in product development, sales, and marketing for many hearth industry manufacturers (Charlie Page) warned that the fear of being stuck with unsellable inventory could have profound implications throughout the supply chain:
            Many retailers will stop buying appliances they are not absolutely
sure that they can sell, and the manufacturers will lose the revenue
from the sales of these stoves; revenue that is needed to fund the
design, testing and the launch costs for new NSPS compliant
models. It has been reported that this is already happening in the
warm air furnace market and will be exacerbated unless EPA
grants adequate sell-through relief. 
      It is well known in this industry that "many retailers have unsold inventory at the end of the season" even though there is variation among how retailers do business, e.g., some keep substantial inventories at any given time while others only buy product when they need it. As noted in EPA's current proposal, many retailers have begun to take measures to try to ensure that they will have little or no Step 1 inventory stranded after May 2020 so that they can minimize or eliminate their financial losses. Consequently, manufacturers are already losing out on much needed revenue in the final two years of the Step 1 compliance period -- revenue that they must have to fund the development, testing, and certification of new model lines. Most manufacturers in the hearth appliance industry are small businesses. The capital to develop Step 2-compliance appliances typically comes from sales of Step 1-compliant products, and most manufacturers do not have access to, for instance, revolving lines of credit to fund R&D, testing, and other costs related to developing Step 2-compliant products. For these companies, the downturn in Step 1 sales can be crippling.
      EPA's proposal rightly recognizes that the decrease in revenue from Step 1 sales
threatens to deprive manufacturers of the full five-year lead time that underpins EPA's BSER determinations for the Step 2 standards. This is because manufacturers are experiencing reductions in revenue in the final two years that they have to try to comply with the Step 2 standards. To further complicate matters, EPA notes 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[.]"
      Under these circumstances, a two-year sell-through period is essential to ensuring that manufacturers, who are still in the process of trying to bring their model lines into compliance with the Step 2 standards and field evaluating such models rather than rushing to bring them to market, have the entirety of the five-year lead time to do so. EPA's proposed sell-through provision and the supporting rationale account for the realities of the hearth appliance industry -- namely, that manufacturers depend on sales revenue in any given year to fund the development, testing, field evaluation, and certification of new model lines. And for manufacturers to make meaningful use of the five-year compliance lead time for the Step 2 standards, they need a dependable stream of revenue from sales of Step 1-compliant products in the months and years leading up to the May 2020 deadline.
      
A manufacturer testified at the public hearing (0142 p.82) that  - 
      We need sell-through for both QQQQ and AAA appliances as our customers buy these products one and the same. They are all wood heaters in their eyes. Having to buy back inventory means we are robbing the working capital that we need to invest into R&D to make products comply with 2020 emission standards. Financially, this burden could be unsustainable. Without granting sell-through for all Step 1 appliances, manufacturers like us will simply not be able to develop the amount of clean burning Step 2 appliances that this competitive marketplace needs.
Another manufacturer also testified at the public hearing (0142 pp.10-12, 14) that the 2-year sell-through is necessary to allow cleaner models to be field-evaluated by manufacturers  - 
      I'm here today as a manufacturer, one that has spent more than a half a million dollars on 2020 compliant models, to argue as clearly as possible the compelling reason why a two-year sell-through is needed. Within the industry, as we look at the proposed rule we are discussing here today, EPA needs to clearly understand the need we have as manufacturers to improve our products for the performance intended. On page 13 of the proposed rule, it states, in quotes: "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." I wish to make the point and stress "field evaluated." In 1984, when the State of Oregon permitted the first national requirements of self-certified wood heaters, 91 manufacturers shoved heating elements into existing devices of their current products. Unfortunately... with insufficient time to fully field evaluate these modified heaters, the majority of the under-evaluated heaters are still being used, and I doubt they are burning clean heat. ... An additional two-year sell-through will provide the needed time for retailers to clear their inventories, as needed, of Step 1 heaters. Retailers continuing to support manufacturers of Step 1 products will provide the revenues that will be needed by these manufacturers for their 2020 compliant product development. It will also provide an additional two years for field evaluation of Step 2 heaters at any...company. ... What we are asking for and what we need is the necessary time to continue revenue streams to develop Step 2 compliant heaters that are field evaluated so they perform long-term as intended.
Another commenter testified at the public hearing (0142 p.46) that "If, as we are seeing across the industry, retailers are slowing or ceasing purchases of Step 1 products due to the looming retail prohibition on May 15, 2020, manufacturers' ability to bring new, cleaner products to market -- or even to remain in business at all -- suffers dramatically."

Response: 
We appreciate manufacturers' assertions that they need more time and revenue from the sale of Step 1-compliant units in order to fund Step 2 model development and certification. However, the Agency did not receive sufficient data from manufacturers showing that revenue has decreased appreciably approaching the 2020 Step 2 compliance date, because retailers have stopped purchasing Step 1 devices. In fact, very little data were submitted to the Agency in response to the NPRM's solicitations showing, for example, a percentage decrease in sales approaching 2020 relative to previous years and/or the percentage of Step 1 inventory that would be stranded without a sell-through since the promulgation of the NSPS in 2015. Manufacturers and retailers failed to show how much of an increase in stranded inventory has taken place as a result of the NSPS, an important consideration given that stranded inventory, sometimes for more than one year, is not uncommon in the residential wood heating device industry. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that in every wood heating device category, models certified to meet the Step 2 standards are available. Finally, commenters did not provide sufficient data or discussion to explain why the five-year period from 2015 to 2020 was not adequate time for manufacturers and retailers to manage their inventories of Step 1 units to avoid stranded inventory

In addition, manufacturers have known about the Step 2 compliance date since 2015. Further, they were alerted to the possibility of more stringent standards in 2014 when the NSPS was proposed (and with more stringent Step 2 limits than were ultimately promulgated in 2015). Indeed, formal discussions with stakeholders about more stringent limits have been ongoing since at least 2010. The EPA set the Step 1 standard as achievable in the short term so that manufacturers could focus on Step 2 model development. For these reasons, EPA has concluded that manufacturers and retailers have had adequate time to develop Step 2 models and to manage their inventory of Step 1 units. See also our response in 2.3.2. 

In addition, at the same time that EPA published the NPRM, the Agency published the ANPR (83 FR 61585), which solicited comment regarding, among other issues, whether it is feasible/ practicable for manufacturers to meet the Step 2 emission limits by May 15, 2020, and if not, why not. For example, in the ANPR the EPA asked "For manufacturers that do not expect to achieve the Step 2 emission limits by May 2020, what factors are preventing your model(s) from meeting the emission limits?" No data on such factors were submitted. Rather, it was made clear to the Agency, based on comments submitted by manufacturers as well as other stakeholders for both the NPRM and the ANPR, that Step 2-certified models exist in every wood heating device category. 

Finally, as a matter of equity, EPA notes that there are some manufacturers that have directed efforts and invested money in order to develop Step 2 models with sufficient time before the May 2020 deadline to ensure that Step 2 models were in the marketplace for retailers (so that they could shift their inventory to Step 2 models and avoid stranded Step 1 inventory in May 2020) and consumers (so that they would have Step 2 models to purchase when the Step 1 models could no longer be sold). For example, in a letter submitted in response to the ANPR, Lamppa Manufacturing, Inc. asserted that they made significant investments in R&D time and money to meet the 2020 Step 2 standard and consequently have a forced-air furnace model line certified and in production. This manufacturer stated that they would not have undertaken this investment if they knew that EPA was going to change the standard, asserting that "It's not fair to move the goalposts halfway through the game!" EPA has considered the equities related to the efforts and investments made by these manufacturers as one factor in its decision not to provide a sell-through period.

Therefore, after reviewing all comments and data submitted, we have determined that there is not an adequate rationale for a sell-through after the Step 2 compliance date.

3.1.3 Comment: Sell-through necessary to allow retailers and manufacturers to continue generating revenue and avoid economic harm from stranded inventory
The assertion that a sell-through is necessary to avoid economic harm from stranded inventory was shared by many retailers and manufacturers across all appliance categories (0028, 0044, 0051, 0063, 0070, 0110, 0127, 0142). For example, one manufacturer of wood heaters and forced-air furnaces (0070 pp.7-8) asserted that "Retailers can't afford to be left with unsellable products, and manufacturers can't afford to buy back these products, or the loss in sales in such a critical time of introducing new products to the marketplace."

At the public hearing, one commenter testified (0142 pp.45-46) that "a two-year sell-through period helps ensure that manufacturers and retailers can recoup their investments in their Step 1 inventory on hand. The ability to continue selling Step 1 products until May 15, 2022 is a reasonable and necessary means of avoiding the significant economic harm that regulated entities stand to suffer if Step 1 products are stranded in commerce after May 2020." In submitted written comments, this same commenter (0063 p.16-17, 18-19) further contended that  - 
      Apart from the need to ensure that all manufacturers subject to Subparts AAA and
QQQQ actually have the full amount of lead time that EPA assumed they would have when it finalized the Step 2 standards, there is another reason for revising the 2015 Rule to include a sell-through period starting in May 2020: to avoid the substantial economic harm that results from stranding inventory in commerce. Allowing sell-through for this reason would be consistent with what EPA did in the 2006 CI ICE NSPS, when it provided for a two-year installation period for engines of a previous, less stringent emission tier to, among other things, avoid "prevent[ing] engine manufacturers from using up existing inventories of engines."
      EPA has long recognized the importance of allowing manufacturers, retailers, and
distributors to sell previously manufactured products for a limited amount of time after a new standard takes effect -- even though those products do not meet the new standard -- because it allows "manufacturers to recoup their investment in their stock on hand." The need to avoid stranding inventory in commerce is especially important in an industry like this one that is composed almost entirely of small businesses (manufacturers, retailers, and distributors). In promulgating both the original Subpart AAA and the 2015 Rule's Step 1 standards, EPA acknowledged the importance of allowing the sell-through of inventory. The 1988 rule required units manufactured on or after July 1, 1990 to comply with new emissions standards, but EPA permitted units that did not meet the new standards to be "sold at retail" until on or after July 1, 1992. Similarly, under the Rule's 2015 standards, units manufactured on or after May 15, 2015 must comply with the 2015 emission limits, but units that did not meet those limits could continue to be "sold at retail on or before December 31, 2015." These regulatory provisions reflect EPA's recognition that the ability to "sell-through" inventory was needed to avoid undue harm to the many small business manufacturers and small business retailers subject to the
standards....
      [T]here are still some retailers that cannot afford to stop ordering Step 1 appliances altogether. This could be due to a number of reasons:
      First, to the extent Step 1 models are popular and in high demand by consumers between now and May 2020, many retailers will not want to miss out on such sales. Indeed, several retailers surveyed in the Page Report indicated they would still be willing to buy appliances even if those appliances could no longer be manufactured by a date certain.
      Second, there simply are not enough Step 2 products available for sale at this time.
Retailers want to show a variety of appliances in their stores in hopes of having at least one product to cover every segment of the market. This means they will want to carry a variety of models (both pellet and stick wood models) across a range of prices and offer both catalytic and non-catalytic models. As noted above, there are few or no Step 2 models available for certain segments of the market. To further complicate matters, retailers typically have relationships with only a limited number of manufacturers. This means that some retailers may not be able to order exclusively Step 2 appliances even if they wanted to, because some manufacturers do not have any Step 2-compliant products at this time.
      Third, most consumers of residential wood burning appliances are price sensitive and
may not be willing to pay for Step 2 appliances. As discussed above, Step 2 appliances tend to cost significantly more than Step 1 appliances. Price sensitive customers might look for another retailer that has Step 1 products available for sale; switch to alternative sources of heat (e.g., gas); or forego changing out their older wood-burning appliance and instead continue to use their existing, higher emitting stoves, boilers, or furnaces. These are just a few of the reasons why some retailers nationwide may not be able to reduce or eliminate their purchases of Step 1 appliances and thus, they are at risk of having a lot of unsellable Step 1 appliances come May 2020 unless EPA revises the rule to add sell-through provisions.

A manufacturer similarly testified at the public hearing (0142 pp.71-72) that - 
      Obviously, in a perfect world, all retailers would want to sell 100 percent sell-through at the end of the season, but this is not reality. Regardless of how strong the selling season is or how deep their end-of-season clearance sales are, there is always carryover. When I say carryover, I'm talking about the products for that season. Mass merchant retailers tend to carry over somewhere between 25 percent to 30 percent of their purchases for the season. This percentage is split up between QQQQ and AAA, as stated previously. Retailers look at these as the same products, just wood-burning appliances. It is hard to put an exact dollar value because it all depends on the company and their volume. But I would estimate easily among some of our top key customers, the carryover dollars we are talking about are in excess of $14 million. This inventory is what they typically use to start the seasonal setups going into the next season. If the retailers do not get an opportunity to sell through on these appliances, they become unsalable and ties up inventory dollars they are unable to spend on new product. We have had some retailers say if they cannot get sell-through relief, they would spend their dollars in other categories; in other words, potentially exit this category.
A manufacturer of forced-air furnaces and wood heaters (0070 pp.7-8) concluded that  - 
      Because these products are seasonal, we strongly support a 2-year sell-through period. Our retailers need the confidence to know they won't be burdened with unsellable Step 1 products in both Subpart QQQQ and Subpart AAA categories. Yes, there are Step 2 compliant products available in today's marketplace, but that number is relatively small for market diversity across all price ranges especially with woodstoves and forced air-furnaces. This limits consumer choice and market variety of proven appliances. The number of these products is totally independent of the need for sell-through for all residential wood heaters. Retailers can't afford to be left with unsellable products, and manufacturers can't afford to buy back these products, or the loss in sales in such a critical time of introducing new products to the marketplace. ...
      We strongly support the 2-year sell-through provision being proposed for both Subpart QQQQ and Subpart AAA. We also ask you to do this as expeditiously as possible, because our retailers are making their final decisions for what they will buy for the 2019-2020 heating season now. We know that this is a win-win for all businesses involved in this industry, and it ultimately has a minimal impact on the environment as the products in this sell-through provision are already clean burning.

This same manufacturer asserted in public hearing testimony (0142 pp.77-78) that  - 

      You will hear from others, either in written or public statement, that this is simply a stall tactic, and our intentions are other than attempts to remain compliant to the rule. I can assure you that we, in the engineering department of US Stove, have worked nonstop since the issuance of the current NSPS to produce compliant products and to remain competitive in this market. This has been an expensive and time-consuming challenge for us and the industry. We can't afford to take back and refund our retailers any inventory they have stranded due to the 2020 deadline. I, therefore, request that you move forward with your consideration of a sell-through for two years of not only QQQQ products but also of AAA Step 1 products.

Likewise, another commenter (0051 p.2) asserted that  - 

      In general, NAHB [National Association of Home Builders] members are neither manufacturers nor retailers of the categories of heaters covered by the NSPS regulations. However, the implications for the larger supply chain for these regulated heaters will have industry-wide ramifications. The deficiencies in the 2015 NSPS related to the absence of a Step 2 sell through time frame under the rule has the potential to impact the cost and availability of inventory compliant heaters home builders and remodelers are able to provide consumers. When the 2015 Rule was adopted without any sell-through period EPA inadvertently shortened what was intended to be a five-year window for manufacturers to develop Step 2 compliant products. Absent the transition window provided by a sell-through time frame, retailers have already begun to pull back on orders for Step 1 products out of concern they will end up with stranded inventory that they can neither sell nor give away after the May 2020 effective day for Step 2.

Response: 
Please see the Agency responses in 2.3.2, 3.1.1 and 3.1.2 above. In addition, we note that manufacturers know well the amount of product that is typically carried over from selling season to selling season and had time to plan for this 2019 to 2020 selling season. In fact, some manufacturers in each residential wood heating device category commented that they did plan accordingly and have Step 2-compliant heaters on the market. 

As noted in previous responses, to justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that in every wood heating device category, models certified to meet the Step 2 standards are available. Furthermore, manufacturers did not provide the Agency with information (e.g., test data) showing that manufacturers tried but failed to develop Step 2 models. Finally, manufacturers and retailers failed to show how much of an increase in stranded inventory (i.e., product that is typically carried over from selling season to selling season) has taken place as a result of the NSPS, an important consideration given that stranded inventory, sometimes for more than one year, is not uncommon in the residential wood heating device industry. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through.

3.1.4 Comment: Sell-through necessary to provide consumers affordable choices
Some small retailers who commented in support of the sell-through for all wood heating devices, because their businesses would be financially harmed without the extra time to sell Step 1-compliant devices, also argued that the sell through would provide their customers with more affordable options (0028, 0044, 0063, 0070, 0142, 0150). These retailers argued that not providing a sell-through negatively affects consumers by limiting the appliance's availability and driving up the cost of the products, which in turn hurts consumers' spending ability. For example, one retailer (0028 p.1) commented the following  - 

      My small business has been adversely impacted by these pending regulations. Planning inventory and sales strategies are extremely difficult due to extensive lead times required for my products. The customer base I serve requires moderate pricing which the previous standards embraced. This consumer is seeking to heat their home more comfortably at less cost. The new regulations have adverse impact on the more financially vulnerable in our society. Many suppliers left the business due to the economic reality of severe regulations which in turn leaves fewer choices. My service area has expanded due to the aforementioned creating increased service overhead. The extension will allow opportunity to save my business and help a deserving clientele.

Likewise, a manufacturer's public hearing testimony (0142 pp.79-80) echoed these same sentiments  - 
      As a manufacturer of wood stoves, wood pellet stoves, single-burn-rate wood stoves, wood furnaces, as well as many other unaffected heating product lines, we are asking for at least a two-year sell-through for not just QQQQ products but AAA products as well. The impact of not granting retailers sell-through in both categories ultimately hurts everyone in the value chain: manufacturers, our retail partners, and their end customers, working class families of our great nation.
A testimony from an industry association representative (0142 pp.47-48) at the same public hearing stated  - 
      Allowing two years of sell-through for appliances which are already dramatically cleaner than they were just a few years ago will help to ensure that a robust offering of better performing products, in a range of heating capacities, appearances, prices, technologies, and fuel types are available.
      Being able to offer a range of products is important from manufacturers to retailers. But it is arguably most important as consumers look to purchase clean, reliable wood heaters, often to replace appliances that are far less efficient with emissions many times higher than any of today's offerings.
One manufacturer of wood heaters and forced-air furnaces (0070 pp.7-8) asserted that - 

      Yes, there are Step 2 compliant products available in today's marketplace, but that number is relatively small for market diversity across all price ranges especially with woodstoves and forced air-furnaces. This limits consumer choice and market variety of proven appliances. The number of these products is totally independent of the need for sell-through for all residential wood heaters. Retailers can't afford to be left with unsellable products, and manufacturers can't afford to buy back these products, or the loss in sales in such a critical time of introducing new products to the marketplace.

Response: 
We did not receive data from manufacturers or retailers showing that Step 2 devices consistently cost more than Step 1 devices. The Agency understands that for some manufacturers this may be true, while for others it is not. For example, one commenter provided Step 1 and Step 2 device prices from verified receipts for both wood heaters regulated under subpart AAA and hydronic heaters regulated under subpart QQQQ. The receipts showed that these Step 2 devices generally were not more expensive than the Step 1 devices, and in some cases were less expensive. A public advocacy group for wood heating asserted similarly in response to the ANPR. In addition, we have not received in comments nor have discovered any other contextual information to support claims that consumer choice and market variety or diversity have been reduced as a result of a transition from Step 1 devices to Step 2 devices in the marketplace. The Agency therefore concludes that there are affordable choices of Step 2 devices in the marketplace, relative to Step 1 device prices.
 
3.1.5 Comment: Sell-through will not significantly increase emissions because it allows Step 1 models to replace older pre-NSPS models
Several commenters (0025, 0063, 0070, 0142) argued that the sell-through would not significantly increase emissions because it allows relatively low-emitting Step 1 models to replace older and higher-emitting pre-NSPS models. For example, a manufacturer of forced-air furnaces and wood heaters (0070 pp.3, 7-8) asserted that  - 
      Although the limit for Step 1 Subpart AAA woodstoves is 4.5 g/hr, our line of woodstoves averages 3.1 g/hr, 32% below the limit of Step 1. Our Step 1 pellet stoves average 1.55 g/hr., 66% below the Step 1 limit. Our Step 1 Subpart QQQQ forced-air furnaces average 0.44 lb/mmbtu's, 53% below the Step 1 limit of 0.93 lb/mmbtu's. We highlight these numbers, because you will hear from other sources that giving sell-through will significantly impact the airshed. We believe these numbers disprove that argument. Furthermore it has proven throughout the industry that wood moisture, the use of real cordwood instead of cribs, the product installation and by in large the use practices by the homeowner have a huge impact in overall emissions of a product. With those factors weighing, the difference to an air shed between having a product that is 4.5 g/hr versus having a product that 2.0 g/hr is negligible. ...
      There are still millions of old unregulated wood stoves in American homes. These products are still contributing large amounts of PM emissions into air sheds, and the only real way to improve that is to replace them with cleaner burning products. This sell-through would continue to allow consumers to purchase affordable, clean burning replacements for those old unregulated products. In addition, manufacturers are able to have the full 5 years between 2015 and 2020 to develop Step 2 compliant products and have sufficient revenue from steady retail sales to do so. Without sell-through for all wood heaters, it could actually become counterproductive in replacing these old dirty unregulated woodstoves, simply through increased product cost and limited consumer choice in the marketplace.
      We strongly support the 2-year sell-through provision being proposed for both Subpart QQQQ and Subpart AAA. We also ask you to do this as expeditiously as possible, because our retailers are making their final decisions for what they will buy for the 2019-2020 heating season now. We know that this is a win-win for all businesses involved in this industry, and it ultimately has a minimal impact on the environment as the products in this sell-through provision are already clean burning.

A retailer of hydronic heaters (0025 p.1) similarly argued that  - 

      Considering that any Step 1 compliant unit typically has little to no visible smoke (as in our GS and G series models) I am baffled as to why anyone would be critical of selling a few leftover units. Keeping dealers and manufacturers financially stable who have gone to the effort of developing these very very clean and efficient models would to me seem to be the best path forward to eventually changing out all older dirtier models for newer technology. Please do not penalize the businesses who have the most potential to move wood burning into the 21st century. This is not a proposal to allow the sale of old "pre-2015 NSPS" models or to allow manufacturing to continue on Step 1 units post 2020.

A manufacturer testified at the public hearing (0142 pp.12-14) that essentially EPA should not hesitate to grant a sell-through to Step 1-compliant heaters because  -  unlike the continued sale EPA granted in 2015 to uncertified and exempted pellet heaters (through December 31, 2015)  -  the heaters in this proposed sell-through are proven to meet the Step 1 standards. As such, this manufacturer asserted that "the two-year sell-through makes perfect sense for all devices that meet Step 1 requirements. These are heaters that have been fully field evaluated."

An industry association representative (0063 pp.19-22) commented that EPA's RIA uses annual averages of foregone PM emission reductions, but these estimates do not provide a reliable indication of how the appliances will perform in the field relative to other certified appliances due to laboratory testing being conducted under controlled conditions that do not exist in homes. Their organization completed an analysis on this, showing  - 

      More recently, in 2012, HPBA commissioned a review of available studies to provide
additional insights into the relationship between lab testing and in-home performance of certified appliances, as well as the in-home performance of certified appliances compared to uncertified (conventional) appliances. That study relied on emissions data from in-home sampling programs and laboratory studies designed to reflect homeowner use patterns more closely than EPA Method 28. These emissions data were compared to published certification scores for the woodstove models in question. The author of that study also compiled field emissions data for uncertified models. In total, 618 emissions measurements were analyzed, including 409 tests from 85 certified woodstoves representing 41 different models.
      
      That analysis revealed that rank orders of woodstoves based on their certification scores did not predict rank orders for the same woodstoves based on their in-home performance: woodstoves with low certification scores sometimes performed more poorly in the field than woodstoves with higher certification scores, and vice versa. In an attempt to "mitigate" (smooth) the impact of the factors influencing emissions variability (e.g., wood moisture, chimney draft conditions, stove condition), the study grouped appliances in categories determined by their certification results and developed emissions means and medians for the field and field simulation data for each category. This analysis revealed no significant correlation between emissions levels in the field and certification ranking. In fact, certified woodstoves with the lowest certification values (< 3 g/hr) reviewed in the study yielded the highest field mean emissions rates and emission factors of the three categories of certified woodstoves, including those with the highest certification values (> 5 g/hr). Based on these data, the study yielded a conclusion that "EPA certification values are not good predicators of the relative ranking of emissions from individual models or the actual magnitude of their emissions."
      
      The key takeaway from all of this is that certification test scores, whether they are below 2.0 g/hr or fall somewhere between 2.1 g/hr and 4.5 g/hr, are not reliable predictors of how much PM any given appliance is likely to emit when operated by the average homeowner. Indeed, the available data all point to the conclusion that the rank order of certification test scores simply will not hold up when it comes to in-home performance. Thus, it simply cannot be said with any level of confidence that allowing the sale of Step 1 appliances for an additional two years will negatively impact the environment due to increased PM emissions. In any event, as noted above, the more manufacturers can certify additional products to the Step 2 standards in the coming months, the more wood heater sales can be expected to shift from Step 1 products to Step 2 products, even before the May 15, 2020 compliance deadline.
      
      Finally, to put things in perspective, a two-year sell-through period is identical to what EPA included in the original 1988 NSPS (Subpart AAA) when it allowed for the continued sale of previously unregulated wood stoves, which EPA estimated emitted about 60 to 70 g/hr of PM. A two-year sell-through period for Step 1-compliant wood stoves would have a dramatically lower environmental impact than what EPA allowed back in 1988. This is especially true considering that most Step 1 wood and pellet stoves are certified between 2.0 and 4.0 g/hr, i.e., well below the 4.5 g/hr Step 1 emission limit.

Another industry association representative (0142 pp.17-18) commented that granting the sell-through will increase cost savings for manufacturers, but there is no evidence of any actual harm in letting Step 1 devices be sold until at least May 15, 2022. 

Response: 
We appreciate commenters' assertion that if a retail sell-through period is granted consumers may purchase a Step 1 device during this period to replace their older higher emitting device. However, it is speculation to predict that consumers will purchase a Step 1 device, but not a Step 2 device. As we noted above in our response to Section 3.1.4, some Step 2 devices are similar in price to Step 1 devices. There is not sufficient evidence to claim that lack of a sell-through will cause consumers to hold on to their older higher-emitting devices. Furthermore, the Agency disagrees that Step 1 devices do not generally emit at higher levels than Step 2 devices. Step 2 devices are by design lower emitting than Step 1 devices and there is evidence from study results that this holds true in homes.

3.1.6 Comment: Suggested length of sell-through
The vast majority of the 119 commenters who expressed support for the sell-through in general, seemed to support the proposed two-year duration, because most did not propose an alternate duration. This section highlights a few of these commenters (0067, 0070, 0122, 0142) who expressed support for a two-year sell-through for all wood heating devices.

Support for 2-year sell-through:

One manufacturer of forced-air furnaces and wood heaters (0070 pp.1-2, 6-8) pointed to EPA precedent as supporting a sell-through, and this manufacturer asserted their support for a 2-year sell-through for all wood heating devices  - 

      We also feel, based on feedback from our retail partners, that a full 2 years of retail sell-through is sufficient to properly transition retailers through virtually all of their Step 1 inventory so they are not stranded with unsalable inventory, all of which are already clean burning. ...
      EPA Has Established Precedent for Retail Sell-Through in Previous Wood Heater Rulemakings
      The EPA has established precedent in the 1988 standards for new residential wood heaters, by providing two years of retail sell-through. In the case of the 1988 EPA rule, the goal of the sell-through at retail provision was to help transition from previously unregulated products, to PM emissions compliant products. This meant taking very high PM emitting products (60-70 g/hr) and transitioning into relatively low PM emitting products (7.5 g/hr). Again, the 2015 EPA rule followed prior precedent by providing retail sell-through of products to December 31, 2015 so long as they were manufactured before May 15, 2015. The justification for a shorter retail sell-through in this case compared with the 1988 rule, was that most of the products in the marketplace already met the 2015 PM emissions limits. Historically, the EPA has recognized the importance of retail sell-through as a regulatory tool to maintain vitality within the industry.
      However, when looking at the transition from Step 1 products to Step 2 (compliant to May 15, 2020 PM emissions limits) it appears it was simply omitted. Clearly the EPA recognizes that this is an issue, as there is this proposal to revise Subpart QQQQ to include retail sell-through, and they are seeking comment on including retail sell-through for Subpart AAA. Today we are requesting 2-year sell-through of clean products (4.5 g/hr for woodstoves and 0.93 lb/mmbtu for forced-air furnaces) to properly transition to slightly cleaner products in a relative sense as required by Step 2 emissions limits. ...
      Benefits of the 2-year Sell-Through Provision: By granting the proposed sell-through for both QQQQ and AAA products, retailers will have the confidence to place orders for the Step 1 products knowing they have the time to move these items through their inventory stream. In addition, consumers will continue to have a wide choice of options for these products to fit their individual requirements of heating. ...
      Conclusion: Because these products are seasonal, we strongly support a 2-year sell-through period. Our retailers need the confidence to know they won't be burdened with unsellable Step 1 products in both Subpart QQQQ and Subpart AAA categories. 
      
This same manufacturer clarified further during testimony at the public hearing (0142 p.73) that 
      Two years at a minimum would be a realistic time frame to have the ability to sell off the existing inventory and make transition into the Step 2 products easier and more affordable to everyone involved. Extended retail sell-through on QQQQ and AAA product will give them confidence to continue to buy and support Step 1 products in the 2019 selling season and give them confidence to be able to manage their inventory down into 2020.

Another manufacturer (0067 p.2) contended that  - 

      If there is no sell through period, much damage will be inflicted to the many small businesses that work in this industry, including ours, our dealers and the customers that rely on our businesses. The defined two-year period almost perfectly reflects the sales timeline that we see in our industry and would greatly help all small businesses and in turn consumers in this industry. It may even be necessary for survival. We assume that many or all of the circumstances we see in our industry to be true for other appliance categories and urge EPA to apply a 2 year sell through for those categories as well.

The industry trade group also testified at the public hearing (0142 p.46) that  -  

      HPBA strongly supports EPA's proposal to revise Subpart QQQQ to provide a two-year sell-through period for hydronic heaters and forced-air furnaces. HPBA urges EPA to revise Subpart AAA to provide the same two-year sell-through period for wood and pellet stoves. A two - -year sell-through period is identical to what EPA included in the original 1988 NSPS when it allowed for the continued sale of previously unregulated wood stove appliances which EPA estimated to emit 60 to 70 g/h of particulate matter.

A manufacturer asserted (0122 p.2) that a 2-year sell-through is altogether appropriate for relatively clean burning Step 1-compliant devices, especially given that EPA saw fit to give a sell through in 2015 to certain uncertified and exempt wood heaters under AAA  -  
      On page 139 of 354 [of EPA-HQ-OAR-2009-0734; FRL-9904-05-OAR], EPA wrote "We believe this provision would have nominal impact on air quality, because the majority of these appliances are already expected to achieve the Step 1 emissions limits". In fact, the sell through granted in 2015 permitted the continued sale of uncertified pellet heaters and exempt from testing wood heaters until December 31, 2015. What we are asking for is a 2 year sell through for wood and pellet heaters. Heaters that are 100% Step 1 compliant. Heaters that had the benefit of being fully Field Evaluated. Continuing on page 139, EPA stated, we do not believe that an additional "sold at retail" provision is needed for outdoor and indoor hydronic heaters and forced air furnaces". Why has EPA's original position flipped 180 degrees in this Proposed Rule? In fact, the 2 year sell through makes perfect sense for all QQQQ and AAA products that meet Step 1 requirements. These are not exempt heaters. They are heaters that are fully "field evaluated." EPA reinforced their thinking in their "Response to Comment on Proposed Rule" dated February 2015., page 208. Again, EPA states "We considered all the comments we received in support and in opposition to allowing for retail sell-through of inventory of heaters manufactured before the compliance deadline. We proposed allowing 6 months for sell-through of inventory for wood stoves and no allowances for hydronic heaters and forced air furnaces. Based on numerous comments from small business manufacturers and small business retailers and some states, we are lengthening the retail sell-through period for subpart AAA from 6 months from the effective date of the final rule to December 31, 2015, approximately 8 months from the expected effective date.
      What we are asking for and what we need is the necessary time and continued revenue stream to develop Step 2 compliant heaters that are "field evaluated" so they perform long term as intended, just like our Step 1 heaters....Give the retailers the 2-year sell through and in turn you are giving Blaze King and all the other manufacturers some additional time to build proven heaters.
Support for shorter sell-through and fixed date to end Step 1 manufacturing
A state regulator (0052 pp.2-3), although not in support of a sell-through in general, cautioned that if EPA proceeds to grant a sell-through period, it should be shorter than 2 years and also prohibit manufacturing after May 15, 2020 -
      The proposal for a full two year sell-through period with no specific date for when manufacturing of the Step 1 devices will cease appears to defeat what a sell-through provision addresses. A sell-through typically is used to provide relief and time to sell already existing inventory after a new requirement has been implemented. It appears, however, that the proposal allows manufacturers to continue to manufacture Step 1 devices up to the new proposed date of May 15, 2022. What precludes industry from asking for additional time to sell any devices that were manufactured but not sold by May 15, 2022? Should EPA ultimately proceed with a sell-through period, ADEC recommends that consideration be given to a shorter time-frame for sell-through for all Step 1-compliant devices that are already in the inventory and inclusion of a fixed date of May 15, 2020 to end the manufacture of new Step 1-complaint devices that are not also Step 2-compliant.
Likewise regarding implementing a fixed date to end manufacturing, should a sell-through be granted, another state regulator (0068 p.5) suggested that, if a 2-year sell-through is adopted, then the Agency should mandate an even earlier date (than the current 2020 Step 2 compliance date) after which only Step 2-compliant devices may be produced for sale in the U.S.  -  
      According to the testimony of Chris Neufeld, there are 100,000 wood stoves
available at retail. It is not known what percentage are Step 2 compliant. It is up
to retailers to sell the remaining Step 1 compliant units by May 14, 2020. EPA
should consider establishing a date after which Step 1 compliant wood stoves
may not be produced for sale in the United States. DEC recommends that such
a date be no later than September 15, 2019. Such a provision should be
included in 40 CFR 60, Subpart QQQQ if a sell-through period extending beyond
May 15, 2020 is adopted.
Response: 
We appreciate commenters' feedback regarding the suggested length of sell-through. Please see the Agency responses in 2.3.2, 3.1.1 and 3.1.2 above, regarding why we have decided not to allow a retail sell-through. To justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that in every wood heating device category, models certified to meet the Step 2 standards are available. Furthermore, manufacturers did not provide the Agency with information (e.g., test data) showing that manufacturers tried but failed to develop Step 2 models. Finally, commenters did not provide sufficient data or discussion to explain why the five-year period from 2015 to 2020 was not adequate time for manufacturers and retailers to manage their inventories of Step 1 devices to avoid stranded inventory. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through. 

3.2	Support for Sell-Through for Hydronic Heaters
Section 3.2 includes comments of support for the sell-through specific to hydronic heaters. It should be noted that the comments presented in Section 3.1 regarding all wood heating devices, also support the sell-through of hydronic heaters, but for brevity are not repeated in this section.

3.2.1 Comment: Sell-through necessary to allow retailers to continue to purchase Step 1 hydronic heaters so manufacturers can fund Step 2 model development and certification
In addition to the comments summarized above in Section 3.1.2, several commenters (0026, 0067, 0142) provided comments specific to hydronic heaters and argued that the sell-through is necessary to allow retailers to continue to purchase Step 1 hydronic heaters so that manufacturers can fund Step 2 model development and certification. 

A hydronic heater manufacturer (0026 p.1) asserted that  - 
      This two-year sell-through proposal is absolutely necessary for the sustainability of our company, the people who depend on us for employment and to keep hundreds of our dealer's businesses from financial ruin. Without it our dealers will soon be forced to stop purchasing Step 1 products which will further limit our cash flow, making it even more difficult to complete the required development, testing and manufacturing required to obtain certification for Step 2. 
      Over [REDACTED]% of our dealer's inventory is from 2017 and earlier. Without a sell-through provision these dealers ... already risk getting stuck with inventory they cannot sell. However, if they don't have inventory, they risk reduce[d] sales and reduced cash flow. Given the financial losses realized with Step 1, it is a financial balance and risk that they are no longer in the position to absorb.
Another hydronic heater manufacturer (0067 p.1) explained the importance of current revenues for funding research and development  -  
      [W]e are already a year behind and have a lot of work to do to ensure there is full range of products that meet regulations and work very well for consumers. This work will be very costly and time-consuming (conservatively estimated at $1M to get through development, testing and certification).
      As a small business, we rely on current revenues to fund research and development and cannot afford to see a sales reduction while trying to develop a full range of products that meet very stringent Step 2 requirements. Cutting those revenues would lengthen the development time of products and/or reduce the quality and effectiveness of those products.

Another hydronic heater manufacturer also testified at the public hearing (0142 pp.27-28) that  - 
      We have worked diligently toward Step 2 at our R&D lab at our factory. Not only do our products need to be clean but -- our current models are just a little over half of the Step 1 units -- they must be practical, they must be proven, and they must be reliable and cost effective. The added expense of Step 1 has had a drastic negative effect on our sales and ultimately on the number of employees and vendors we support. Because of the long, expensive test which can take over a week to complete while using wood with very strict requirements that can be very hard to obtain, we cannot test our units until we are very certain they will pass. We are not there yet but hopefully soon. This sell-through is very necessary for our company and its many employees and to keep hundreds of our dealers from financial ruin as well as keeping products available for those who need them.
Response: 
Please see the Agency response in 3.1.2 above. We understand that some hydronic heater manufacturers and retailers would benefit from a sell-through, while others would not. However, we received insufficient data to know exactly why this is the case  -  that is, why some manufacturers and retailers are prepared, while others may not be. The Agency also notes that, as of March 5, 2020, there were 99 Step 1 hydronic heater model lines and 13 Step 2 hydronic heater model lines (12 percent) certified, according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). Furthermore, based on the test reports, we expect that 12 more of the Step 1 model lines could certify to Step 2 if re-tested. Once these model lines are certified, Step 2 hydronic heater model lines will represent 22 percent of all certified model lines. 

3.2.2 Comment: Sell-through necessary to allow retailers and hydronic heater manufacturers to continue generating revenue and avoid economic harm from stranded inventory
In addition to the comments summarized above in Section 3.1.3, some commenters provided comments specific to hydronic heaters and argued that the sell-through is necessary to allow retailers and hydronic heater manufacturers to continue generating revenue and avoid economic harm from stranded inventory. All hydronic heater retailers and distributors who commented (0019, 0025, 0027, 0029, 0035, 0036, 0038, 0039, 0041, 0042, 0046, 0048, 0119, 0120) expressed their support for the sell-through and most noted that their small business needed the sell-through to continue generating income, to avoid stranded inventory resulting from the need for long retail lead times (to sell all inventory), and to provide a greater selection of lower cost options to their customers. Multiple manufacturers expressed support for the sell-through for similar reasons (0067, 0182, 0183, 0184, 0185). Below are several excerpted examples of these comments.

One hydronic heater retailer (0048 p.1) explained that  - 
      This sell-through provision is crucial to my [residential hydronic heater] small business ... for the following reasons. As part of our business, we have to stock units in inventory in order to sell them. If we are not allowed a sell-through period, we will be forced to put our business on hold near the end of 2019 so that we are not stuck with any units that we will not be able to sell. ... Without a sell-through provision, the financial effects to our small business would be devastating. A two-year period would give us the time to sell inventory and start bringing in 2020 compliant units.
Another hydronic heater retailer (0046 p.1) similarly asserted that  - 

      We are neither in a financial position where we can afford to run out of inventory and stall our business nor in a position to be stranded with inventory we cannot sell. We have already been adversely affected financially from a decrease in sales due to cost increases of the Step 1 hydronic heaters. The majority of my customers are purchasing a hydronic heater to save money on their heating bills and they typically have a low household income. The increased costs have narrowed our customer base that can afford to purchase this product. We cannot afford to suffer the additional financial losses that we will incur with not having a sell-through provision. Without a sell-through provision, the financial effects would be devastating to my small business. A two-year sell through provision would allow me to continue to generate the income needed to support my small business and reduce the risk that I will be left with the financial burden of inventory I cannot sell.

A form letter campaign participated in by multiple hydronic heater dealers (0027, 0029, 0035, 0036, 0038, 0039, 0044, 0046, 0082, 0119, 0120) claims that  - 
      This sell-through provision is very important to my small business as a dealer for residential hydronic heaters for the following reasons. It is not uncommon in this industry to carry over inventory for two to three years due to the wide variety of sizes and colors and the unpredictability of what our customer may need. When stocking inventory lead times have to be factored in from production to trucking schedules. These long lead times are a part of planning our inventory so we have adequate supply to keep generating revenue. 
Most (but not all) hydronic heater manufacturers who commented also expressed support for the sell-through for similar reasons (0067, 0182, 0183, 0184, 0185). For example, a hydronic heater manufacturer (0067 pp.1-2) explained the importance of having heaters available in the retail store to avoid reduced sales, which results when heaters must be ordered  -  

      For many of our distributors and dealers, selling hydronic heaters is an important part of or their whole business. It is commonly known in our industry that inventory on hand sells while inventory that needs to be ordered in does not. If our distributors and dealers are hesitant to carry inventory, it has started to and will undoubtedly reduce their sales and ours. ... If there is no sell through period, much damage will be inflicted to the many small businesses that work in this industry, including ours, our dealers and the customers that rely on our businesses. The defined two-year period almost perfectly reflects the sales timeline that we see in our industry and would greatly help all small businesses and in turn consumers in this industry. It may even be necessary for survival.
      
Response: 
Please see the Agency responses in 2.3.2, 3.1.2 and 3.1.3 above. To justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that hydronic heater models certified to meet the Step 2 standards are available and are available at prices comparable to Step 1 devices despite increased efficiency and decreased pollutant emissions (as discussed in Section 4.2.5 of this document). Furthermore, manufacturers did not provide the Agency with adequately demonstrated information showing that manufacturers tried but failed to develop Step 2 models (e.g., notification from testing laboratories indicating suspended tests and the reason(s) why as required by the RWH NSPS in Sections 60.535(a)(2)(viii) and 60.5477(a)(2)(viii)). Finally, commenters did not provide sufficient data or discussion to explain why the five-year period from 2015 to 2020 was not adequate time for manufacturers and retailers to manage their inventories of Step 1 devices to avoid stranded inventory. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through.

3.2.3 Comment: Sell-through will provide manufacturers with the extra time they need to bring Step 2 hydronic heaters to market
Some commenters (0026, 0067, 0182, 0183, 0184, 0185, 0142) stated that additional time is required to certify and bring Step 2-compliant hydronic heaters to market. For example, a group of commenters from a small hydronic heater manufacturer (0182, 0183, 0184, 0185) commented that their business needs the extra time the sell-through will provide to certify additional models  - 
      I am a small manufacture of the Crown Royal Stove Brand, www.crownroyalstoves.com and currently have three models that meet or exceed the current regulation and are listed on the EPA website. We have around 40 employees that currently are employed and work full time year around. We have worked very hard in our research and development since 2007 to get to this point with no outside help. We have been and are currently testing for the 2020 regulation to take affect but are having a very hard time getting our product to pass in the timeline given. We have already invested $250,000 of our working capital and are worried about the future of our company if there is no relief giving. Please look at giving more time for us and others like us with small amounts of capital to pass the test and continue the great tradition of heating with wood.

Another manufacturer (0026 p.1) indicated that the extra time provided by the sell-through was needed to provide dealers with Step 2-compliant hydronic heaters  - 

      Central Boiler's on-site R&D lab has worked diligently toward Step 2 and we are making good progress. Our Step 1 products have an emission level of just over half of the Step 1 limit but more time is needed to provide our dealers with Step 2 inventory. Not only do our products have to be clean but they also have to practical, proven, reliable, and cost effective. The added expense of Step 1 has had a drastic negative effect on our sales, dealers and ultimately on the number of employees and small businesses we support.

This same manufacturer further testified at the public hearing (0142 pp.27-28) that -
      Because of the long, expensive test which can take over a week to complete while using wood with very strict requirements that can be very hard to obtain, we cannot test our units until we are very certain they will pass. We are not there yet but hopefully soon. This sell-through is very necessary for our company and its many employees and to keep hundreds of our dealers from financial ruin as well as keeping products available for those who need them.
Another manufacturer (0067 p.1) explained that  - 

      As there has been much uncertainty regarding the regulations and tests methods (No cord wood test method to test to) around our products, we have not been able to take many necessary steps to be far enough along the development curve to be properly prepared for the deadline looming.

Response: 
Please see the Agency responses in 2.3.2, 3.1.2 and 3.1.3 above. To justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that hydronic heater models certified to meet the Step 2 standards are available. Furthermore, manufacturers did not provide the Agency with adequately demonstrated information showing that manufacturers tried but failed to develop Step 2 models (e.g., notification from testing laboratories indicating suspended tests and the reason(s) why as required by the RWH NSPS in Sections 60.535(a)(2)(viii) and 60.5477(a)(2)(viii)). Finally, commenters did not provide sufficient data or discussion to explain why the five-year period from 2015 to 2020 was not adequate time for manufacturers and retailers to manage their inventories of Step 1 devices to avoid stranded inventory. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through. With regard to test methods, the cord wood test methods for hydronic heaters are in Section 60.5476(d)(1).

3.2.4 Comment: Sell-through necessary to provide consumers affordable choices
In addition to the comments summarized above in Section 3.1.4, some commenters provided comments specific to hydronic heaters, arguing that the sell-through is necessary to provide customers with a range of affordable hydronic heater choices. For example, multiple commenters (0119, 0120, 0026, 0048, 0067, 0142) stated that the majority of their customers are low income households looking to heat their homes more cost effectively and cannot afford the increased costs of hydronic heaters if a sell-through is not granted.

Furthermore, one manufacturer (0067 p.1) commented that if a reduction in sales occurs, dealers may choose to leave the industry which would leave customers without local support.

Response: 
Please see the Agency response in 3.1.4 above.


3.2.5 Comment: Sell-through would have negligible environmental impacts
A representative from the industry trade group (0142 p.47) asserted at the public hearing that  - 
      Similarly, in 2015, EPA allowed for the sale of previously unregulated hydronic heaters until the end of 2015. By comparison, a two-year sell-through period for Step 1 hydronic heaters (conventional hydronic heaters) would have far lesser environmental impacts than what EPA allowed in 2015.
Response: 
The relative magnitude of environmental impacts of the 2015 sell-through versus this proposed sell-through, as shown in the supplemental RIA with forgone benefits exceeding cost savings to industry by a factor of 10 to 20, does not help justify this proposed sell-through. We also note the difference in lead times between the 2015 deadline facing hydronic heater manufacturers and retailers and the 2020 deadline. When we reach the May 2020 deadline, manufacturers and retailers will have known about this 2020 deadline for over 5 years. See also our response in 2.3.2.

3.2.6 Comment: Suggested length of hydronic heater sell-through
With a few exceptions, the vast majority of 119 commenters who expressed support for the sell-through in general, seemed to support the proposed two-year duration, because most did not propose an alternate duration. For example, multiple commenters (0025, 0026, 0048, 0067, 0070, 0119, 0120, 0122, 0142) expressed support for a sell-through with a duration of two years for hydronic heaters. However, other commenters joined a letter campaign and argued for an indefinite (infinite) sell-through period for hydronic heaters (0081, 0092, 0135, 0143, 0144, 0145, 0147, 0149, 0151, 0152, 0153, 0154, 0155, 0158, 0159, 0163, 0165, 0170, 0171, 0172, 0173, 0175, 0176, 0181, 0196). 

Support for 2-year sell-through:

Multiple manufacturers and retailers (0067, 0070, 0122, 0142) expressed support for a 2-year sell through for not only hydronic heaters, but for all wood heating devices, as discussed in Section 3.1.6. Likewise, many hydronic heater retailers who commented also expressed support for a 2-year sell-through (0025, 0026, 0048, 0119, 0120). For example, one retailer (0025 p.1) stated that  - 
 
      Unless I am assured that the inventory I purchase in the spring/summer of 2019 is legal for sale for the next 24 months I cannot take the risk of have "orphaned" units.

Support for indefinite sell-through:

Some commenters (0081, 0092, 0135, 0143, 0144, 0145, 0147, 0149, 0151, 0152, 0153, 0154, 0155, 0158, 0159, 0163, 0165, 0170, 0171, 0172, 0173, 0175, 0176, 0181, 0196) supported a proposal by a former manufacturer of hydronic heaters (no longer in business) called the "Hawken Proposal" which, among other points, asserted that an indefinite sell through for hydronic heaters is necessary. For example, one commenter (0092 p.1) submitted the following  -  
      I support the "Hawken Proposal" for hydronic heaters. This proposal includes two PARTS: PART 1 - I SUPPORT the two-year "sell-through" period for all affected new hydronic heaters. Furthermore, I SUPPORT a "sell-through" period that lasts INDEFINITELY, not just two years for the following reasons: (a.) Step 1 standards reduced emissions 90 percent and Step 2 standards achieve very little additional benefit. (b.) Consumers burn wood to save money, but the cost of technology necessary to achieve Step 2 standards makes a Step 2 compliant hydronic heater uneconomic. (c.) In spite of some claims, the technology does not currently exist to achieve Step 2 standards in a hydronic heater. Accordingly, those ridiculously high Step 2 standards should be abandoned for hydronic heaters. 
      Response:

We appreciate commenters' feedback regarding the suggested length of sell-through. Please see the Agency responses in 2.3.2, 3.1.1 and 3.1.2 above, regarding why we have decided not to allow a retail sell-through. To justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that hydronic heater models certified to meet the Step 2 standards are available. Furthermore, manufacturers did not provide the Agency with information (e.g., test data) showing that manufacturers tried but failed to develop Step 2 models. Finally, commenters did not provide sufficient data or discussion to explain why the five-year period from 2015 to 2020 was not adequate time for manufacturers and retailers to manage their inventories of Step 1 devices to avoid stranded inventory. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through. 

3.3	Support for Sell-Through for Forced-Air Furnaces
Section 3.3 includes comments of support for the sell-through specific to forced-air furnaces. The comments presented above in Section 3.1, regarding all wood heating devices, also support the sell-through of forced-air furnaces, but for brevity are not repeated in this section. It should be noted that one of the few manufacturers of forced-air furnaces (0070) expressed support for the sell-through for all wood heating devices  -  including forced-air furnaces  -  and therefore these comments are included above in Section 3.1 and not repeated in their entirety in this section. For these reasons, this Section 3.3 is limited.

3.3.1 Comment: Sell-through necessary to allow retailers to continue to purchase Step 1 forced-air furnaces so manufacturers can fund Step 2 model development and certification 
A manufacturer of forced-air furnaces, wood heaters and single burn rate heaters (0070 p.4) explained that  - 

      Our woodstoves, single burn rate woodstoves, and furnaces are all in the process of redesign and R&D testing now for 2020 certification. Without revenue from the final year and a half before the Step 2 emissions limits come into effect, it makes it very difficult to test and certify our entire product line. ... We have not achieved a Step 2 compliant furnace despite our best efforts. We have put significant investment into research and development, so we are not sure what the final development cost will be, but we know it will be significantly more than the [REDACTED] that we have become accustomed to, if we are able to meet the Step 2 limit.

Response:

Please see the Agency response in 3.1.2 above. We appreciate the information this manufacturer has provided, but we did not receive sufficient data to justify a sell-through. The Agency acknowledges that, as of March 5, 2020, there were two Step 2-certified forced-air furnace model lines compared to 18 Step 1-certifed model lines (or 10 percent), according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). Because the two Step 2-certified forced-air furnace models were tested for certification using an Agency-approved alternative test method for models that are electronically or thermostatically controlled, the Agency has decided to make this alternative method broadly applicable. (See ALT-134 at https://www.epa.gov/emc/broadly-applicable-approved-alternative-test-methods#ATLs.) This means that forced-air furnace manufacturers may use this test method without submitting a model-specific rationale to the EPA requesting permission to use the method. We expect that this broadly-applicable alternative test method for electronically or thermostatically controlled models will allow more forced-air furnaces  -  both small and large models  -  to certify to the Step 2 standard and become available to consumers in the near term. Although two Step 2 forced air furnace (FAF) models were approved using an alternative test method, EPA has not denied any requests for Step 2 certification of FAFs by manufacturers. 

3.3.2 Comment: Sell-through necessary to allow retailers and forced-air furnace manufacturers to continue generating revenue and avoid economic harm from stranded inventory
The commenters summarized in Section 3.1.3, who expressed their support for the sell-through for all wood heating devices, arguing that the sell-through is necessary to continue generating revenue and to avoid the economic losses caused by stranded inventory (0028, 0044, 0051, 0063, 0070, 0110, 0127, 0142), also support the sell-through for forced-air furnaces. 

For example, as summarized in Section 3.1.3, a manufacturer of forced-air furnaces and wood heaters (0070 pp.7-8) concluded that  - 
      Because these products are seasonal, we strongly support a 2-year sell-through period. Our retailers need the confidence to know they won't be burdened with unsellable Step 1 products in both Subpart QQQQ and Subpart AAA categories. Yes, there are Step 2 compliant products available in today's marketplace, but that number is relatively small for market diversity across all price ranges especially with woodstoves and forced air-furnaces. This limits consumer choice and market variety of proven appliances. The number of these products is totally independent of the need for sell-through for all residential wood heaters. Retailers can't afford to be left with unsellable products, and manufacturers can't afford to buy back these products, or the loss in sales in such a critical time of introducing new products to the marketplace. ...
      We strongly support the 2-year sell-through provision being proposed for both Subpart QQQQ and Subpart AAA. We also ask you to do this as expeditiously as possible, because our retailers are making their final decisions for what they will buy for the 2019-2020 heating season now. We know that this is a win-win for all businesses involved in this industry, and it ultimately has a minimal impact on the environment as the products in this sell-through provision are already clean burning.

This same manufacturer of forced-air furnaces and wood heaters testified at the public hearing (0142 pp.72-73) that  - 

      ...[I]f they [the retailers] cannot get an extended sell-through period and they do continue to buy Step 1 products, they will extremely limit their buys of current products for the 2019 selling season; therefore, will miss potential sales. Again, this may steer them away from the category and even hurt the manufacturers.

A different representative from this same manufacturer testified at the public hearing (0142 pp.75-76) that -

      [S]omehow, we need to recoup our development costs, plus continue to operate our business in a prudent and profitable manor. Without having a sell-through provision for both warm air furnaces and wood stoves, we are losing, as a manufacturer, at minimum, two years of normal sales.

      Response:

Please see the Agency responses in 2.3.2, 3.1.2 and 3.1.3 above. To justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that forced-air furnace models certified to meet the Step 2 standards are available. Furthermore, manufacturers did not provide the Agency with information (e.g., test data) showing that manufacturers tried but failed to develop Step 2 models. Finally, commenters did not provide sufficient data or discussion to explain why the five-year period from 2015 to 2020 was not adequate time for manufacturers and retailers to manage their inventories of Step 1 devices to avoid stranded inventory. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through.

The Agency acknowledges that, as of March 5, 2020, there were two Step 2-certified forced-air furnace model lines compared to 18 Step 1-certifed model lines (or 10 percent), according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). Because the two Step 2-certified forced-air furnace models were tested for certification using an Agency-approved alternative test method for models that are electronically or thermostatically controlled, the Agency has decided to make this alternative method broadly applicable. (See ALT-134 at https://www.epa.gov/emc/broadly-applicable-approved-alternative-test-methods#ATLs.) This means that forced-air furnace manufacturers may use this test method without submitting a model-specific rationale to the EPA requesting permission to use the method. We expect that this broadly-applicable alternative test method for electronically or thermostatically controlled models will allow more forced-air furnaces  -  both small and large models  -  to certify to the Step 2 standard and become available to consumers in the near term. Although two Step 2 forced air furnace (FAF) models were approved using an alternative test method, EPA has not denied any requests for Step 2 certification of FAFs by manufacturers.

3.3.3 Comment: Sell-through necessary to provide consumers affordable choices
A forced-air furnace manufacturer (0070 pp.3-4, 6-7) explained that  - 
      [T]here is only 1 forced-air furnace certified to the Step 2 standard. It should also be pointed out, that this product only met the Step 2 standard by testing to an EPA approved alternative test method, not the complete CSA test method that is designated in the 2015 Rule. This one product retails for $5,295 (as found on an internet search). This retail price is well beyond what we have found the average consumer is willing to pay for this type of product. They will simply turn to other central heating technologies that are more cost effective, and invest their available funds in more efficient electric, gas, geothermal, or alternate non-wood burning technology. We experienced that with 2 models we brought out into the marketplace in 2014 that were able to meet Step 1 PM emissions. These two models were a higher end version of a furnace relative to the balance of our forced-air furnace line of products. At the time they were more efficient and clean burning relative to the balance of our forced-air furnace line. We experienced that these 2 products simply would not sell just because of their price point in the marketplace, and that price was less than half of the current $5,295 retail of the only Step 2 furnace. We have determined and experienced if a forced-air furnace is priced at retail beyond $1,500, the consumer looks for alternative models or appliances with different heating sources (i.e. electric, gas, geothermal, and etc.) for their central heating requirements. It is important to note we are the largest producer of wood burning forced-air furnaces in the industry, so this experience is well warranted.
      Therefore, by granting the sell-through, consumers will continue to have a choice of forced-air furnaces, while new more cost-effective technologies can continue to be developed. Without the sell-through, the vast majority of this category of products will be eliminated in the marketplace simply by the cost of the product itself.
Response:
The Agency appreciates the information provided by this manufacturer regarding prices of Step 1 and Step 2 devices. We note, however, that while the commenter above refers to a Step 2 device price that they claim is above what consumers are willing to pay, another forced-air furnace manufacturer has noted that their Step 2 device is priced in the same range as their Step 1 devices. Furthermore, we note that this manufacturer's Step 1 devices are priced at the same level as Step 1 devices from other manufacturers. The largest manufacturer of Step 1 forced-air furnaces notes that they have kept their prices around $1,500 (see comment above in section 3.3.3 and in section 5.2.2 of this RTC document). The smaller company referenced in this footnote notes that their "unit will retail for $1799 or $1899  -  in the same range as [their] current Step 1 units". So, the price stated by this manufacturer and provided by the other company are comparable. Nevertheless, we expect affordable choices to vary from manufacturer to manufacturer. See also responses in 3.1.2, 3.1.3, and 3.3.2 above. 

3.3.4 Comment: Suggested length of forced-air furnace sell-through
The vast majority of the 119 commenters who expressed support for the sell-through in general, seemed to support the proposed two-year duration, because most did not propose an alternate duration. For example, multiple commenters (0044, 0067, 0070, 0122, 0142) expressed support for a sell-through with a duration of two years for forced-air furnaces, including those commenters summarized above in Section 3.1.6 who supported a two-year sell-through for all wood heating devices.

Support for 2-year sell-through:

A retailer (0044 p.1) expressed support for a sell-through with a duration of two years for forced-air furnaces, as well as other QQQQ devices.

One manufacturer of forced-air furnaces and wood heaters (0070 pp.1-2, 6-8) pointed to EPA precedent as supporting a sell-through and this manufacturer asserted their support for a 2-year sell-through for all wood heating devices, stating that  - 

      We also feel, based on feedback from our retail partners, that a full 2 years of retail sell-through is sufficient to properly transition retailers through virtually all of their Step 1 inventory so they are not stranded with unsalable inventory, all of which are already clean burning. ...
      EPA Has Established Precedent for Retail Sell-Through in Previous Wood Heater Rulemakings
      The EPA has established precedent in the 1988 standards for new residential wood heaters, by providing two years of retail sell-through. In the case of the 1988 EPA rule, the goal of the sell-through at retail provision was to help transition from previously unregulated products, to PM emissions compliant products. This meant taking very high PM emitting products (60-70 g/hr) and transitioning into relatively low PM emitting products (7.5 g/hr). Again, the 2015 EPA rule followed prior precedent by providing retail sell-through of products to December 31, 2015 so long as they were manufactured before May 15, 2015. The justification for a shorter retail sell-through in this case compared with the 1988 rule, was that most of the products in the marketplace already met the 2015 PM emissions limits. Historically, the EPA has recognized the importance of retail sell-through as a regulatory tool to maintain vitality within the industry.
      However, when looking at the transition from Step 1 products to Step 2 (compliant to May 15, 2020 PM emissions limits) it appears it was simply omitted. Clearly the EPA recognizes that this is an issue, as there is this proposal to revise Subpart QQQQ to include retail sell-through, and they are seeking comment on including retail sell-through for Subpart AAA. Today we are requesting 2-year sell-through of clean products (4.5 g/hr for woodstoves and 0.93 lb/mmbtu for forced-air furnaces) to properly transition to slightly cleaner products in a relative sense as required by Step 2 emissions limits. ...
      Benefits of the 2-year Sell-Through Provision
      By granting the proposed sell-through for both QQQQ and AAA products, retailers will have the confidence to place orders for the Step 1 products knowing they have the time to move these items through their inventory stream. In addition, consumers will continue to have a wide choice of options for these products to fit their individual requirements of heating. ...
      
This same manufacturer clarified further during testimony at the public hearing (0142 p.73) that  - 
      Two years at a minimum would be a realistic time frame to have the ability to sell off the existing inventory and make transition into the Step 2 products easier and more affordable to everyone involved. Extended retail sell-through on QQQQ and AAA product will give them confidence to continue to buy and support Step 1 products in the 2019 selling season and give them confidence to be able to manage their inventory down into 2020.

Response: 
We appreciate commenters' feedback regarding the suggested length of sell-through. Please see the Agency responses in 2.3.2, 3.1.1 and 3.1.2 above, regarding why we have decided not to allow a retail sell-through. To justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that forced-air furnace models certified to meet the Step 2 standards are available. Furthermore, manufacturers did not provide the Agency with information (e.g., test data) showing that manufacturers tried but failed to develop Step 2 models. Finally, commenters did not provide sufficient data or discussion to explain why the five-year period from 2015 to 2020 was not adequate time for manufacturers and retailers to manage their inventories of Step 1 devices to avoid stranded inventory. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through. 

The Agency acknowledges that, as of March 5, 2020, there were two Step 2-certified forced-air furnace model lines compared to 18 Step 1-certifed model lines (or 10 percent), according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). Because the two Step 2-certified forced-air furnace models were tested for certification using an Agency-approved alternative test method for models that are electronically or thermostatically controlled, the Agency has decided to make this alternative method broadly applicable. (See ALT-134 at https://www.epa.gov/emc/broadly-applicable-approved-alternative-test-methods#ATLs.) This means that forced-air furnace manufacturers may use this test method without submitting a model-specific rationale to the EPA requesting permission to use the method. We expect that this broadly-applicable alternative test method for electronically or thermostatically controlled models will allow more forced-air furnaces  -  both small and large models  -  to certify to the Step 2 standard and become available to consumers in the near term. Although two Step 2 forced air furnace (FAF) models were approved using an alternative test method, EPA has not denied any requests for Step 2 certification of FAFs by manufacturers. 

3.4	Support for Sell-Through for Wood Heaters under AAA
Section 3.4 includes comments of support for the sell-through specific to wood heaters regulated under subpart AAA. It should be noted that the comments presented in Section 3.1 regarding all wood heating devices, also support the sell-through of AAA wood heaters, but for brevity are not repeated in this section.

3.4.1 Comment: Sell-through necessary to allow retailers to continue to purchase Step 1 heaters so manufacturers can fund Step 2 model development and certification
Several wood heater manufacturers and numerous retailers (0050, 0063, 0076, 0077, 0078, 0079, 0080, 0082, 0083, 0084, 0085, 0086, 0087, 0088, 0089, 0090, 0091, 0095, 0096, 0097, 0098, 0099, 0100, 0101, 0102, 0103, 0104, 0105, 0106, 0108, 0109, 0111, 0112, 0113, 0115, 0116, 0118, 0122, 0124, 0126, 0139, 0148, 0162, 0186, 0187, 0188, 0189, 0190, 0191, 0192, 0193, 0194, 0195) commented that a sell-through is necessary to allow retailers to continue to purchase Step 1 heaters from manufacturers, so that manufacturers can fund Step 2-compliant model development and certification.

For example, one manufacturer (0050 p.1) asserted that "[i]ncluding a two-year sell-through of Step 1-compliant products will allow manufacturers the revenue and time to develop cleaner models while ensuring these seasonal products don't get stuck with retailers." Another manufacturer (0122 p.9) likewise commented that  - 

      EPA is going to be informed that manufacturers have had plenty of time to develop Step 2 compliant heaters. ...Keeping in mind not all stoves designs, technologies, company resources are equal ...sustained cash flow is mandatory to bringing cleaner burning Step 2 models to market. 

The industry trade group (0063 p.15) agreed that a sell-through is critical to allow retailers to resume buying Step 1 appliances, which will in turn fund manufacturers' efforts to meet Step 2.

Numerous wood heater retailers (0076, 0077, 0078, 0079, 0080, 0082, 0083, 0084, 0085, 0086, 0087, 0088, 0089, 0090, 0091, 0095, 0096, 0097, 0098, 0099, 0100, 0101, 0102, 0103, 0104, 0105, 0106, 0108, 0109, 0111, 0112, 0113, 0115, 0116, 0118, 0124, 0126, 0139, 0148, 0162, 0186, 0187, 0188, 0189, 0190, 0191, 0192, 0193, 0194, 0195) in a form letter campaign similarly commented that  - 
      For innovative designs to meet the more restrictive Step 2 NSPS limits, the full research and development process including design engineering, foundry and tooling, prototypes, in-house development testing, refinements, production, EPA certification, and safety certifications, takes years to complete. The granting of a two-year sell-through period for Step 1 compliant models would allow us time to sell the stoves preferred by our customers, until innovative and improved models are widely available to satisfy market demand.
      The wood heater NSPS was originally intended to drive technological innovation resulting in reduced emissions and improved air quality. While some traditional catalytic wood heaters on the market today might meet the Step 2 certification requirements in initial testing under ideal conditions, they will not necessarily continue to meet Step 2 standards in ongoing use or result in improved air quality over a lifetime of real-world, in-home use. New technologies will emerge as the result of regulation with technology that will surpass Step 2 emission limits while maintaining the ease of operation that consumers demand through the lifecycle of the stove. Until a wide range of new and innovative wood-burning stoves and inserts are available to our customers we need to have product to sell to remain a viable business.
      We ask the EPA to extend the two-year sell-through period after the NSPS Step 2 compliance date for Step 1 compliant units, as described in the proposed rulemaking, to include all residential wood heaters subject to Step 2 requirements, including wood stoves and inserts.

Response: 
Please see the Agency responses in 2.3.2 and 3.1.2 above. We understand that some wood heater and pellet fuel heater manufacturers and retailers would benefit from a sell-through, while others would not. However, we received insufficient data to know exactly why this is the case  -  that is, why some manufacturers and retailers are prepared, while others may not be. The Agency also notes that, as of March 5, 2020, there were 405 Step 1 wood and pellet heater model lines and 196 Step 2 model lines (33 percent) certified, according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). 

3.4.2 Comment: Sell-through necessary to allow retailers and manufacturers to continue generating revenue and avoid economic harm from stranded inventory and layoffs
Many wood heater manufacturers who commented expressed support for the sell-through (0047, 0049, 0050, 0094, 0122, 0142, 0148), citing economic hardship without the sell-through, as did one pellet fuel producer (0040). In addition, over 70 wood heater retailers who commented, whether individually or via form letters, expressed support for the sell-through, primarily claiming the sell-through would help their small businesses avoid economic harm from stranded inventory and from a diminished range of affordable choices for their customers (0033, 0037, 0050, 0070, 0076, 0077, 0078, 0079, 0080, 0082, 0083, 0084, 0085, 0086, 0087, 0088, 0089, 0090, 0091, 0095, 0096, 0097, 0098, 0099, 0100, 0101, 0102, 0103, 0104, 0105, 0106, 0107, 0108, 0109, 0110, 0111, 0112, 0113, 0114, 0115, 0116, 0117, 0118, 0121, 0123, 0124, 0125, 0126, 0127, 0139, 0148, 0150, 0162, 0169, 0186, 0187, 0188, 0189, 0190, 0191, 0192, 0193, 0194, 0195). 

For example, one retailer (0121 pp.1-2) asserted the following  - 
      We are on the verge of a crisis and need relief. ... The Step 2 requirement of NSPS at 2 grams per hour is attainable, but the problem is that while the announcement of the standard happened 4 years ago, the testing method that was to be used wasn't solidified until the last 8 months. Up to that point, manufacturers had no way of knowing how to develop their products to comply with Step 2 regulations. As it currently stands, the results of the NSPS Step 2 deadline (May of 2020) will be disastrous:
:: Small businesses like mine will be stranded with inventory that we can't sell (businesses in our industry generally buy products through an `early buy' program one year in advance)
:: Manufacturers are stuck with millions of dollars in dead inventory (because businesses
like mine will not buy any more Step 1 products for fear of being stranded)
:: Consumers who rely on wood to warm their families will face a skyrocketing cost of
goods and extremely limited selection (many of these families are low income and do not
have the means to heat their home another way)
Another retailer (0117 p.1) similarly commented that  - 

      I feel that the rollout of this regulation is critical to the survival of hearth shops across the nation. Most hearth shops are small, family owned operations. The financial burden of swapping out our existing displays with be challenging. If the deadline is not extended and a reasonable sell-through period is not included in this regulation we will be faced with a greater burden of selling inventory at or below cost. In addition, we may have units we can't sell before the deadline causing us to absorb the cost of this lost inventory. I urge you to seriously consider how this regulation is being rolled out from the perspective of small family owned retail shops. It will put many of us out of business as currently written.

Likewise, another small retailer (0127 p.2) asserted that  - 

      The hearth industry is a small industry nationwide and cannot absorb burdensome regulation easily. The strong deadline and no sell thru is extremely hard on small business. I am also concerned that some of the smaller manufacturers will cease business and lay off their workers. Small business cannot absorb the loss of $50-100,00 of inventory that cannot be sold. This would be a catastrophic loss to an independent dealer and some may not recover and cause a business failure.

Another retailer (0033 pp.1-3) even contended that without a sell-through they may be compelled to break the law  - 
      All hearth retailers are essentially "mom & pop" businesses. We have a variety of different hearth products on display to meet the different needs of consumers. At best, if we are not granted an extension on sell-through of our products like the residential hydronic heaters and new forced air furnaces have been given we will be forced to make a choice: we will either have to dispose of brand new, efficient heaters, or break the law by selling them on the black market. Neither of these are choices we want to make. ...
      But retailers are vulnerable to a huge financial downfall if we are not allowed the same consideration as other businesses in being granted an extended sell-through period. It's a simple matter of fairness. We have made great strides to partner with government agencies to achieve the overall reductions in emissions that we have with highly efficient, clean burning products. And, while we agree that the new standards are important, we also have the reality of everyday life, that of maintaining our fiscal viability in order to continue to provide alternative solutions to home heating. ...
      The EPA allowing an extension of sell-through of Step 1 products until May of 2022 2 things will happen:
             Retailers and distributors will be able to stay viable by flushing out remaining products in inventory.
             As we wind down our inventories we will be able to bring in Step 2 products to meet the demands of the marketplace in a reasonable manner.
      Not discounting the efficacy of the NSPS, the diminutive impact our current inventory will have on the overall PM 2.5 inventory in the airshed is a fraction of a percentage. But the hardship of the financial impact on our businesses could be monumental. For my business, and others in our industry I have spoken with, the impact could be crippling to a degree. ... [W]ith the NSPS step 1 deadline approaching, we are feeling the looming prospect of being "stuck' with White Elephant inventory, or worse.
      We have several different products for different applications and different consumer needs; wood and pellet inserts and freestanding stoves in a variety of sizes and styles. With the variety we need to have to bring to the market, each unit becomes, in essence, a niche product. Finding that one customer who wants and needs a specific stove or insert can take time in order to sell off the remaining inventory. This poses a challenge, and a hardship if we are held to the May 2020 deadline. ...We desire to continue to comply with the law, and not sell improperly labeled solid fuel devices past the deadline, but we are faced with having to choose from the lesser of two evils.
Another retailer (0107 p.1) wrote requesting the following  - 

      I am writing concerning my request for more time to sell my stock of wood and pellet stoves that are not 2020 compliant. I'm not buying stoves to put in stock that don't meet 2020 [compliance standard]. It is making it very difficult to keep a good stock and showroom filled with stoves. I have been selling off what I can this year. I will only buy stoves that are not compliant as they are order[ed]. Again making it very difficult to sell. I have stoves on my shelf sometimes takes 4 years. I have several manufactures that I have to stock or I can't get them.

In addition, many wood heater manufacturers who commented expressed support for the sell-through (0047, 0049, 0050, 0094, 0122, 0142, 0148), citing economic hardship without the sell-through, as did one pellet fuel producer (0040). For example, one manufacturer (0050 p.1) asserted that  - 
      It is critical to the hearth industry, both manufacturers and specialty hearth retailers, that relief in the form of at least a 2 year sell through period of Step 1 compliant product for retailers is provided for beyond the May 2020 NSPS Step 2 compliance deadline. Without this extension for sell through, the wood and pellet hearth business will come to a halt in the next few months. Cancellation of orders of these products started occurring in late 2018 and is substantial already.
A manufacturer of forced-air furnaces and wood heaters testified at the public hearing (0142 pp.75-76) that -

      [S]omehow, we need to recoup our development costs, plus continue to operate our business in a prudent and profitable manor. Without having a sell-through provision for both warm air furnaces and wood stoves, we are losing, as a manufacturer, at minimum, two years of normal sales.

Another manufacturer testified at the public hearing (0142 pp.38-40, 42) similarly  - 
      Hearth and Home Technologies fully supports NSPS Step 1 and Step 2 requirements. However, we recognize that without this sell-through period, the in-home hearth business will come to halt in May 2019. The in-home hearth business is highly seasonal with more than 60 percent of the business being done in the last four months of the year. We are a major manufacturer of these products. We sell to over 1,000 customers in the United States, ranging from small retailers to large wholesale distributors. Under the current conditions, these customers, both small and large, risk being left with inventory of Step 1 compliant products, facing substantial financial risks for their businesses. In addition, HHT could be forced to have layoffs at our stove manufacturing facility in Pennsylvania where both Harmon and Fireside stoves are produced. With stove sales declining dramatically, the people in this small, rural community will face difficult financial, unwanted challenges. ... Sell-through delay for two years will substantially reduce the financial risks to retailers, as they will gain an additional two seasons to reduce their inventory and sell their business displays.
Likewise, another wood heater manufacturer (0122 p.9) commented that  - 
      Clearly, as supported by prior EPA wood heater rule making, a sell through provision should have been provided. Having the last date of manufacture and the last date to sell by the same date was a mistake. As the national retailer inventory is reduced, those units yet to sell become the more difficult to sell. Typically, these are higher end AAA wood heaters, many imported from Europe. This difficulty results in deeper discounting, less profitability and more financial strain on the retailers' business.
A fourth manufacturer commented (0094 p.4)  - 
      The revenue generated by product sales is essential for new product development. Unlike many industries, the hearth products industry has very little to no availability of research grant money or similar funds to further research & development efforts. The industry is extremely reliant on strong revenue and solid cash flow to finance research & development to meet new regulatory challenges.
      Additionally, the new patent pending design will be significantly more expensive than its original predecessor. Wood stove users are very price sensitive as they typically use woodstoves to save on heating cost. So, the question then becomes, can the new model be relied upon to generate the same level of revenue of the model it will replace. If no, it will be a net loss in revenue following a very significant capital investment. That outcome is obviously not favorable to a profitable business model.
Response: 
Please see the Agency responses in 2.3.2, 3.1.2 and 3.1.3 above. We note that, as of March 5, 2020, there were 196 wood heater model lines that meet the Step 2 emission limit. These models were tested to the crib wood test method provided in the 2015 regulation or an alternative test method approved by the Administrator. To justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that many wood and pellet heater models certified to meet the Step 2 standards are available. Furthermore, manufacturers did not provide the Agency with information (e.g., test data) showing that manufacturers tried but failed to develop Step 2 models. Finally, manufacturers and retailers failed to show how much increase in stranded inventory has taken place as a result of the NSPS, an important consideration given that stranded inventory, sometimes for more than one year, is not uncommon in the residential wood heater industry. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through.
      
3.4.3 Comment: Sell-through necessary to provide consumers affordable choices
Multiple commenters (0047, 0050, 0063, 0107, 0121, 0125, 0142, 0150) noted that without granting sell-through relief, consumers would have far fewer affordable options as they look to upgrade their wood heaters. For example, one retailer (0121 p.2) stated that their inventory for low income customers will be limited if they are not given a sell-through  -- 

      ...My business works with many low-income families who heat their home with
a cost-effective wood stove called the "EcoChoice WS18" by Heatilator which has a retail price of $1,299. As of today, the most cost-effective Step 2 certified stove that we have access to is a the "Green Mountain 40" by Hearthstone which is priced at $2,299. A low-income family simply cannot afford the extra $1,000 for the Step 2 stove (which is only marginally more efficient than the Step 1 model).
      
One commenter (0142 pp.15-17) argued that the reduction in emissions for a Step 2-certified wood heater relative to the cost will negatively impact consumers ability to purchase a heater but will not add to the efficiency of emission control systems. 

A retailer (0125 p.1) commented that  - 

      If the EPA extends the sell-by deadline until May 15th, 2022, I would stock a more normal volume of step 1 products, allowing us, the retailer little to no risk of getting stuck with inventory we cannot sell or display. The extension would also allow more choices for the consumer, more normalized sales volume for us as the retailer, while still meet the 2020 compliance performance standards for the EPA. We need this 2- year sell through on this rule.

Another retailer (0150 p.1) claimed that  - 

      The 2 year sell through is critical so that I don't have to deliberately decrease my inventory levels, just because of the lack of the 2020 available products. This lack of inventory is going to hurt my customer's selection ability, hurt my business because of the sales I am going to miss out on, hurt my distributors who won't stock product, and hurt my manufacturers who can't get the new products developed and into production soon enough.

Another retailer (0107 p.1) explained the following  - 
      My customers come in the store and have to have now. If they have to wait I lose the sale. I would love to know soon if I could have a two-year extension. It would help. I will need all that time to sell what I have, and I could put a few more stoves on floor.
Multiple wood heater retailers (0076, 0077, 0078, 0079, 0080, 0082, 0083, 0084, 0085, 0086, 0087, 0088, 0089, 0090, 0091, 0095, 0096, 0097, 0098, 0099, 0100, 0101, 0102, 0103, 0104, 0105, 0106, 0108, 0109, 0111, 0112, 0113, 0115, 0116, 0118, 0124, 0126, 0139, 0148, 0162, 0186, 0187, 0188, 0189, 0190, 0191, 0192, 0193, 0194, 0195) in a form letter campaign commented that  - 
      The granting of a two-year sell-through period for Step 1 compliant models would allow us time to sell the stoves preferred by our customers until innovative and improved models are widely available to satisfy market demand. ... Until a wide range of new and innovative wood-burning stoves and inserts are available to our customers we need to have product to sell to remain a viable business.
One manufacturer similarly testified at the public hearing (0142 p.42) that  - 
      Granting sell-through relief is a decision that will positively impact consumers, retailers, and manufacturers across the United States. Manufacturers will be able to develop better products and get more products certified on time. Retailers will be able to offer more variety to consumers and substantially reduce the financial risk of having to dispose of noncompliant inventory. And consumers will benefit with more product choices at more competitive prices, both prior to 2020 and beyond.
Likewise, another manufacturer (0050 p.3) asserted that  - 

      We urge the EPA to provide at least a two-year sell-through period of Step 1 stoves for manufacturers and retailers. Otherwise, the wood and pellet business in the United States will be significantly harmed within the next six months as retailers stop ordering these products from manufacturers and forced to substantially discount the current Step 1 compliant models in order to purge their inventory. With only 19% (100 out of 526) of all Step 1 stoves meeting Step 2 (based on EPA website data), the consumer will have far less choices going into the next burn season who are looking to upgrade from their pre-1988 NSPS high emitting wood stove. Granting sell-through relief is a decision that will positively impact thousands of consumers and more than 2,500 retailers and 98 manufacturers in the United States.

A representative from the industry trade group (0063 p.8) commented that "less than one-fifth of currently certified wood and pellet stoves are Step 2-certified -- and that some manufacturers have few or even zero Step 2-compliant products at this time -- sell-through is important to ensuring that enough manufacturers survive the increasingly stringent standards and can offer consumers a broad range of affordable appliances to choose from."

Response: 
Please see the Agency response in 3.1.4 above.

3.4.4 Comment: Lack of sell-through will cause consumers to use higher emitting wood heaters
Multiple retailers, a manufacturer, and other commenters (0063, 0070, 0076, 0077, 0078, 0079, 0080, 0082, 0083, 0084, 0085, 0086, 0087, 0088, 0089, 0090, 0091, 0095, 0096, 0097, 0098, 0099, 0100, 0101, 0102, 0103, 0104, 0105, 0106, 0108, 0109, 0111, 0112, 0113, 0115, 0116, 0118, 0124, 0125, 0126, 0139, 0148, 0150, 0162, 0186, 0187, 0188, 0189, 0190, 0191, 0192, 0193, 0194, 0195) argued that without a sell-through period, only a limited selection of wood heaters would be available to customers.

Multiple wood heater retailers, via a form letter campaign, stated their concern over an abruptly and substantially reduced selection of wood heaters available to their customers without a sell-through period (0076, 0077, 0078, 0079, 0080, 0082, 0083, 0084, 0085, 0086, 0087, 0088, 0089, 0090, 0091, 0095, 0096, 0097, 0098, 0099, 0100, 0101, 0102, 0103, 0104, 0105, 0106, 0108, 0109, 0111, 0112, 0113, 0115, 0116, 0118, 0124, 0126, 0139, 0148, 0162, 0186, 0187, 0188, 0189, 0190, 0191, 0192, 0193, 0194, 0195). They argued that fewer choices for consumers and higher retail costs will discourage homeowners from buying new cleaner wood heaters, which in turn will hurt businesses and result in the continued use of older, more polluting wood heaters. 

Likewise, a manufacturer of wood heaters, forced-air furnaces and single burn rate heaters (0070 p.7) asserted that -
      There are still millions of old unregulated wood stoves in American homes. These products are still contributing large amounts of PM emissions into air sheds, and the only real way to improve that is to replace them with cleaner burning products. This sell-through would continue to allow consumers to purchase affordable, clean burning replacements for those old unregulated products. In addition, manufacturers are able to have the full 5 years between 2015 and 2020 to develop Step 2 compliant products and have sufficient revenue from steady retail sales to do so. Without sell-through for all wood heaters, it could actually become counterproductive in replacing these old dirty unregulated woodstoves, simply through increased product cost and limited consumer choice in the marketplace.
Other commenters (0063, 0125, 0150) agreed, saying that consumers will have far fewer wood heater models to choose from and the products ultimately available are likely to be more expensive, which could lead consumers to continue to use higher-emitting wood heaters.

Response: 
We acknowledge commenters' assertion that fewer choices for consumers and higher retail costs will discourage homeowners from buying new cleaner wood heaters, which in turn will hurt businesses and result in the continued use of older, more polluting wood heaters. However, it is speculation to predict that consumers will purchase a Step 1 heater, but not a Step 2 heater. As we noted above in our response in 3.1.4, some Step 2 devices are similar in price to Step 1 devices. There is not sufficient evidence to claim that lack of a sell-through will cause consumers to hold onto their older higher-emitting wood heaters. 

3.4.5 Comment: Sell-through would have negligible environmental impacts 
Several commenters (0070, 0122, 0127) argued that allowing Step 1-compliant wood heaters to be sold for an additional 2 years will have a negligible environmental impact, because Step 1-compliant heaters are already relatively clean burning.

One manufacturer (0122 p.9) commented that  - 

      EPA is going to be informed that a sell through for Step 1 heaters will result in significant contributions to PM. In fact, a review of the October 2018 EPA wood heater list shows 578 heaters. 76 of those heaters meet Step 2 compliance. 55 of those remaining units are no longer in production. 24% or 105 models are 4.0-4.5 gr/hr. 32% or 145 models are between 3.0-3.9 gr/hr and 33% or 149 models are 2.1-2.9 gr/hr.
      
Lastly, 48 models or 11% already were tested and certified previously at 2.0 or less gr/hr. As can be observed, there are many more cleaner burning units in the Step 1 inventory. They are not all 4.5 gr/hr!
      
Another manufacturer (0070 p.2) similarly asserted  - 
      
      Although the limit for Step 1 Subpart AAA woodstoves is 4.5 g/hr, our line of woodstoves averages 3.1 g/hr, 32% below the limit of Step 1. Our Step 1 pellet stoves average 1.55 g/hr., 66% below the Step 1 limit. ... We highlight these numbers, because you will hear from other sources that giving sell-through will significantly impact the airshed. We believe these numbers disprove that argument. Furthermore it has proven throughout the industry that wood moisture, the use of real cordwood instead of cribs, the product installation and by in large the use practices by the homeowner have a huge impact in overall emissions of a product. With those factors weighing, the difference to an air shed between having a product that is 4.5 g/hr versus having a product that 2.0 g/hr is negligible.

Likewise, a retailer (0127 p.2) opined that  - 

      I feel in the strongest terms that the industry needs at least a 2 year extension to flush thru and sell the existing inventory in the field. The inventory we are selling now is very good and clean burning. It is only going to be in my opinion, a very small increase in efficiency to move to the new 2020 standard and the current inventory is already very clean. It would be best to create incentives to remove the older 20-30 year old stoves from the field to increase a better air quality.

Response: 
We agree that Step 1 wood heaters are cleaner burning than 1988-certified wood heaters and cleaner burning than some (uncertified) pellet heaters. However, the Agency disagrees that Step 1 heaters do not generally emit at higher levels than Step 2 heaters. Step 2 heaters are by design lower-emitting than Step 1 heaters and there is evidence from study results that this holds true in homes.

3.4.6 Comment: Suggested length of sell-through for AAA wood heaters
With a few exceptions, the vast majority of the 119 commenters who expressed support for the sell-through in general, seemed to support the proposed two-year duration, because most did not propose an alternate duration. However, as noted below, several commenters expressed support for a longer duration sell-through of three- to five-years for wood heaters regulated under subpart AAA.

Support for 2-year sell-through:

Most commenters who expressed support for a sell-through for wood heaters regulated under subpart AAA  -  both retailers and manufacturers  -  also expressed support for a two-year duration (0033, 0037, 0044, 0047, 0049, 0050, 0063, 0076, 0077, 0078, 0080, 0082, 0083, 0084, 0085, 0086, 0087, 0088, 0089, 0090, 0091, 0094, 0095, 0096, 0097, 0098, 0099, 0100, 0101, 0102, 0103, 0104, 0105, 0106, 0107, 0109, 0111, 0113, 0114, 0115, 0116, 0117, 0118, 0121, 0122, 0123, 0124, 0125, 0126, 0127, 0139, 0148, 0150, 0162, 0186, 0187, 0188, 0189, 0190, 0191, 0192, 0193, 0194, 0195) For example, one manufacturer (0049 p.1) asserts that  - 
      Currently without a sell-through provision, retailers are concerned with having inventory that is not step 2 compliant and therefore not interested in purchasing any step 1 product along with looking to sell off display and existing inventories. These actions are going to negatively affect manufacturers production and sales for the next two years which will lead to less investment capital and layoffs. We believe EPA has acknowledged the importance of a sell-through period hence the opportunity to comment. We are requesting that EPA sincerely consider at a minimum a two-year sell-period to allow the entire commerce stream to flush out Step 1 inventory and be replaced with new step 2 certified inventories. This cannot be done without a sell-through period.
Multiple retailers (0076, 0077, 0078, 0079, 0080, 0082, 0083, 0084, 0085, 0086, 0087, 0088, 0089, 0090, 0091, 0095, 0096, 0097, 0098, 0099, 0100, 0101, 0102, 0103, 0104, 0105, 0106, 0108, 0109, 0111, 0112, 0113, 0115, 0116, 0118, 0124, 0126, 0139, 0148, 0162, 0186, 0187, 0188, 0189, 0190, 0191, 0192, 0193, 0194, 0195) in an apparent form letter campaign likewise asserted that  - 

      A two-year sell-through period allowing the sale of all Step 1 compliant devices remaining in inventory would be enormously valuable to our business, our customers, the manufacturers, and the environment. Technical, developmental, and business considerations justify this additional sell-through period. ... We ask the EPA to extend the two-year sell-through period after the NSPS Step 2 compliance date for Step 1 compliant units, as described in the proposed rulemaking, to include all residential wood heaters subject to Step 2 requirements, including wood stoves and inserts.
      
Support for a longer sell-through (3-year and 5-year):

One manufacturer (0047 p.4) cited the test methodology for cord wood testing still not being officially designated as reasoning for needed a sell-through of 2 or 3 years. Likewise, other manufacturers and retailers (0047, 0123) requested a 3-year sell-through period.

A retailer (0022 p.1) requested more testing time and time to comply with current standards in the form of a five-year delay for retailers and manufacturers, to allow sale of heaters that were produced prior to (and that don't meet) the 2020 laws. They cited several reasons for requesting this longer sell-through period, including  - 
      
      We would like to see the proposed 2020 NSPS standards delayed until at least 2025 because:
      a. the delay effect on pollution would be negligible
      b. manufacturers are still trying to recoup costs for the 2015 rule changes
      c. sales have dropped significantly, since consumers are not purchasing current approved products and want the 2020 approved products.
      
      Enable Dealers to sell beyond the May 2020 date (or new date), because:
      a. dealers are not purchasing stock
      b. distribution has come to a standstill.

Response: 
We appreciate commenters' feedback regarding the suggested length of sell-through. Please see the Agency responses in 2.3.2, 3.1.1 and 3.1.2 above, regarding why we have decided not to allow a retail sell-through. To justify a sell-through, which is a change to the NSPS promulgated in 2015, the Agency requires data from manufacturers and retailers showing why a sell-through is needed. Insufficient data was provided by manufacturers and retailers to justify a sell-through, especially in light of the fact that many wood and pellet heater models certified to meet the Step 2 standards are available. Furthermore, manufacturers did not provide the Agency with information (e.g., test data) showing that manufacturers tried but failed to develop Step 2 models. Finally, manufacturers and retailers failed to show how much increase in stranded inventory has taken place as a result of the NSPS, an important consideration given that stranded inventory, sometimes for more than one year, is not uncommon in the residential wood heater industry. Absent such data, the Agency has insufficient grounds to change the established NSPS and allow a sell-through. 
4.0	Opposition to Sell-Through 
Section 4 presents comment excerpts and summaries regarding opposition to the sell-through for all wood heating devices and for each group of devices specifically (hydronic heaters, forced-air furnaces, and wood heaters regulated under subpart AAA). While the basis of the opposition presented in Section 2 is legal in nature, the basis of the opposition presented in this section primarily regards pollution concerns and health hazards of the sell-through and also takes issue with manufacturers' economic and practical concerns presented in Section 3. Most comments included herein are from state and local regulatory agencies, multi-jurisdictional organizations, state attorneys general and environmental, health and citizen organizations, although at least one manufacturer's comments are included as well.

4.1	Opposition to Sell-Through for All Wood Heating Devices
Section 4.1 includes comments in opposition to the sell-through that were not indicated by the commenter as being specific to one type of device, but rather applied to all types of wood heating devices. Additional device-specific comments are provided in Sections 4.2, 4.3 and 4.4 for hydronic heaters, forced-air furnaces, and wood heaters regulated under subpart AAA.

4.1.1 Comment: Manufacturers have had sufficient time already to meet the standards, some models already do, and there is no new rationale to justify the sell-through
Many commenters asserted that manufacturers have had sufficient lead time to meet the standards, as evidenced in part by the fact that there are models that already meet the Step 2 standards, and therefore no sell-through should be provided (0045, 0053, 0054/0200, 0056, 0060, 0064, 0065, 0066, 0071, 0073, 0074, 0075, 0133, 0137). Multiple examples of such comments are provided below in this section.

A state environmental regulatory agency (0056 p.2) claimed that  - 

      Manufacturers and retailers were given five years to produce Step 2 compliant units and manage inventories, which is ample time to prepare for the 2020 compliance date. As a result of manufacturer research and development investments, many Step 2 compliant models are available now, well in advance of the 2020 compliance date. A sell-through period would send the wrong signal and allow manufacturers to continue producing Step 1 units right up to the 2020 Step 2 deadline. These Step 1 devices would be sold for up to two years after the 2020 deadline and would emit higher levels of pollution for decades to come, unnecessarily delaying needed public health protections. In contrast, maintaining the 2020 Step 2 deadline without a sell through will send a signal to manufacturers and retailers that they should continue to move cleaner units into the market. It will also not penalize those manufacturers who have made the research and development investments necessary to produce Step 2 compliant devices according to the current schedule in the NSPS.

A regional association of state air pollution agencies in the Northeast (0054/0200 pp.1-2, 9-10) asserted  - 

      The 2020 standards, which are long overdue and supported by the record established in the 2015 rulemaking, can be substantially met by industry today. To date, the NESCAUM states have realized only nominal emission reductions from the revised NSPS for residential wood heaters. Nearly all these devices sold in the region already met the Step 1 emission standards prior to 2015. Many of our states have enforced emission standards for hydronic heaters since as early as 2007 that are at least as stringent as the 2015 Step 1 NSPS. For the NESCAUM region, emission benefits only begin to accrue with the sale of Step 2 units. ...
      The northeast states need timely emission reductions from the sources covered by the 2015 NSPS for residential wood heating devices to effectively protect public health and the environment from the impacts of wood smoke and maintain compliance with the PM2.5 NAAQS. Sufficient progress has been made by many regulated companies to demonstrate the feasibility of achieving the 2020 standards according to the schedule laid out in the 2015 NSPS. The proposed sell-through periods are unnecessary and largely designed to provide economic relief for regulated entities that failed to make timely investments in cleaner technologies. The existing rule includes a host of provisions that provide flexibility and accommodate concerns that were raised by industry during the rulemaking process.
This same commenter stated in another comment letter (0133 pp.1-2) that  - 

      NESCAUM reiterates its opposition to any weakening or delay in implementing the emission standards promulgated under the 2015 NSPS. There is no technical basis to support changes to the Step 2 standards for wood heaters. The five-year period provided to manufacturers and retailers in the NSPS for selling Step 1 compliant units is more than sufficient. In 2015, 85 percent of the stove market met the Step 1 standards and were automatically deemed certified under the NSPS. States put the industry on notice more than a decade ago that they needed to address excessive emissions from hydronic heaters. Beginning as early as 2007, 14 states (VT, NH, ME, MA, RI, NY, MD, IN, UT, WA, NJ, AK, CO, PA) and DC adopted regulations that address emissions from hydronic heaters. Consequently, manufacturers have been able to focus their research and development resources on designing and manufacturing Step 2-compliant models.
      
      Discussions with industry contacts suggest that EPA has either certified or has requests for Step 2 certification for numerous stoves, hydronic heaters, and furnaces in addition to those posted on EPA's certification list. In assessing the availability of Step 2 appliances, EPA must use the most current data that reflects the actual number of units that have tested to Step 2 emission levels, including models that may not have submitted their certification packages. 40 CFR 60.537(f) and 60.5479(f) require manufacturers to submit emission data to EPA within 60 days of completing testing. EPA must assure
      compliance with this requirement so that EPA has a complete dataset to analyze Step 2 appliance availability. For example, one manufacturer, Central Boiler, submitted a 30-day intent to test notice to EPA in February of 2017 (see Attachment 1 [of comment 0133]) but based on recent FOIA requests, there is no emission data to determine if this unit completed the test at Step 2 levels or not. We therefore urge EPA to review all 30-day testing notices and confirm that they have been received and are available to the public. EPA must ensure a complete and accurate dataset of Step 2 certified appliances going forward.

Likewise, another commenter (0073, p.2) concluded that "The industry has had sufficient time to meet the 2015 standards. We note the 2015 rule is an update of the previous rule finalized in 1988. Significant technology advance occurred in the over 25 [year] gap between the two performance standards. The 2015 final rule provided significant flexibility and transition time for manufacturers, including a 5 year sell through window to sell Phase 1 compliant systems." 

A state regulator (0064 pp.1-2) similarly pointed out that  - 

      In addition to the significant public health cost, the additional compliance window appears unnecessary given that the proposed final standards are now met by a number of devices...Furthermore, manufacturers and sellers had five years notice of the 2020 compliance date for the Step 2 standards and should have been planning appropriately to reduce the inventory of Step 1 compliant devices and increase production of Step 2 compliant devices, of which there are many models.

Another state regulator (0074 pp.1-2) stated simply that "There has been sufficient time for manufacturers to develop, manufacture, and market residential wood heaters that meet the Step 2 standards since 2016."

Another commenter (0053 pp.5-7) asserted that none of this was unforeseen prior to and at the time of the 2015 NSPS promulgation, by either manufacturers or by the EPA, and the EPA has not provided sufficient new rationale for proposing a sell-through  -  
      The stepped compliance approach established by EPA in the 2015 NSPS was specifically designed to give manufacturers and retailers the advance notice required to smoothly transition to more stringent emissions limits. In setting the 2020 date for Step 2 compliance, EPA relied upon comments submitted by manufacturers indicating that it could take one to two years to develop new models of wood heaters. Taking this information into account and allowing for a substantial amount of additional time for manufacturers to "develop, test, field evaluate and certify current technologies across their consumer product lines," EPA set the Step 2 compliance five years in the future.
      EPA does not now claim that the Step 2 compliance standards are infeasible in a way that was unforeseen in 2015. Indeed, when EPA finalized the 2015 NSPS it noted that 9 out of 50 existing hydronic heaters models in the U.S. market already met the Step 2 compliance standards and that an additional 100 European manufacturers were already making models that would be Step 2 compliant. Now, four years later, there are certainly already Step 2 compliant alternatives to Step 1 heaters available on the market.
      Instead, EPA claims that it recently learned 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." For support, the agency cites to four letters from industry representatives indicating that retailers are anticipated to reduce, or are already reducing, their demand for Step 1 compliant devices. EPA additionally explains that "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." But the agency does not provide any citation to support this assertion. Indeed, the only mention of Step 2 preparedness in the citation to manufacturer concerns states that "our company and others may demonstrate compliance in advance of May 15, 2020." EPA claims that manufacturers' fear of revenue shortfalls and stranded inventory necessitates the Proposed Rule's compliance date extension, but the agency fails to provide any concrete information to demonstrate that these manufacturer concerns are valid or supported. For example, EPA makes no attempt to quantify the actual revenue shortfalls or the number of wood heaters that would be left as stranded inventory in the absence of a sell-through period. EPA's conclusory and unsupported assertions are insufficient to justify the proposal.
      Further, the agency has failed to demonstrate that this decline in demand for Step-1 compliant devices prior to 2020 was unanticipated by the 2015 NSPS. Manufacturers and distributors in the industry are well aware of the purchasing practices of retailers in their industry. It cannot be a surprise to them that retailers are preparing for the 2020 compliance date, and the agency has provided no evidence of this surprise. Built into the modeling of the 2015 RIA (and reflected in the Supplemental RIA's Scenario 1) was the expectation that it was within manufacturers' responsibility and capability to have Step 2 compliant models ready for sale to retailers prior to the 2020 compliance date. This effect is entirely consistent with the desired outcome of the 2015 NSPS. And manufacturers were given a significant amount of time -- five years -- to prepare for that eventuality. Step 1 heaters are meant to be phased out and replaced by Step 2 heaters. The agency has not identified anything that was unforeseen about retailer demand for Step 1 heaters ramping down as the compliance deadline neared, which could justify the addition of a sell-through period.

The above assertions are echoed by another commenter (0075 p.4) who argued that there is no new rationale to justify the sell-through, that many models already meet the Step 2 standard, and furthermore that the phased standard have been implemented precisely as they were intended  - 
      Moreover, many manufacturers are well-positioned to serve the market for Step 2 compliant wood burning devices. In fact, the proposed rule understates the extent to which the market has already shifted to meet Step 2. EPA lists the number of Step 2 compliant wood heaters, hydronic heaters, and forced-air furnaces that have been certified to the agency, id. at 61,578, but ignores that many more models also appear to meet the Step 2 standards, though to date they have only been certified as meeting the Step 1 standards. See EPA, List of EPA Certified Wood Stoves (Oct. 2018), at https://www.epa.gov/compliance/list-epa-certified-wood-stoves (Attachment 1); EPA, List of EPA Certified Hydronic Heaters (June 2018), at https://www.epa.gov/compliance/list-epa-certifiedhydronic-heaters (Attachment 2); EPA, List of EPA Certified Forced-Air Furnaces (June 2018), at https://www.epa.gov/compliance/list-epa-certified-forced-air-furnaces (Attachment 3). For example, most of the more than 100 hydronic heaters certified to EPA as meeting the Step 1 standards also achieve particulate matter emission rates below the level of the Step 2 standards. These models merely need to be retested and recertified. See Attachment 2. Moreover, EPA itself has recognized that most of the manufacturers with models that already meet the Step 2 emissions limits will probably wait until early 2020 to spend the money to get their models retested to demonstrate compliance with Step 2  -  a delay that likely reflects the uncertainty EPA's reconsideration process is creating. See EPA, E.O. 12866 Review Draft, Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces: Advance Notice of Proposed Rulemaking at 13 (Oct. 31, 2018) (EPA-HQ-OAR-2018-0195-0006 att. 3)
      Furthermore, all aspects of the Step 2 compliance date were thoroughly considered during the 2015 rulemaking, with essentially the same manufacturers and retailers making essentially the same arguments. See EPA, Response to Comment on Proposed Rule, `Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces, and New Residential Masonry Heaters' at 207 (Feb. 2015) (EPA-HQ-OAR-2009-0734-1775) (discussing industry comments stating that "the majority of retailers felt that they needed 12 to 24 months to sell moderate and slow selling inventory and four of the retailers felt that they needed much more time than 24 months"). There is nothing new in the assertions cited by EPA that manufacturers need to take actions to anticipate the Step 2 compliance deadline of May 2020. This is how a phased compliance deadline for a consumer product is intended to work and one of the key reasons the 2015 rule provided a full five years for Step 2. 80 Fed. Reg. at 13,676.

Likewise, a regional association of state air pollution agencies in the West (0045 pp.4-5) questioned EPA's basis for proposing the sell-through and asserted that manufacturers have had ample warning and adequate time to make the business adjustments necessary to meet Step 2  - 
      EPA has not provided a rigorous systematic or objective basis on which to evaluate the
impact of the May 2020 Step 2 deadline extension in the proposal. Rather, EPA has only
included in footnotes, general excerpted statements from the hearth products association, one subpart QQQQ and two subpart AAA manufacturers, along with the general statements cited elsewhere in our comments. [cites NPRM 83 FR 61578. "Recently, EPA has learned from manufacturers and retailers ... ".]
      EPA should undertake a systematic, transparent review of the regulated community claims that the current standards are unachievable in the time frame required by the 2015 NSPS. This should involve a formal Information Collection Request (ICR) or, if necessary, the use of Clean Air Act 114 authority to acquire the necessary data, rather than relying on a proposed rulemaking to solicit the documentation. The record presented in the proposal is insufficient to make a reasoned judgment about the true impacts to the regulated community or air quality, particularly in light of the adverse health costs associated with a sell-through and the significant net costs of the proposal.
      The residential wood heating industry has extensive history of responding to NSPS
limitations dating back to the 1980s. [cites 1987 rulemaking notice] The deadlines established in the final rule in 1988, negotiated by the wood heating industry provided for a manufacturing restriction on Phase I appliances four months after promulgation of the final rule and more stringent Phase II emissions limits two years later. These phased in standards similarly limited the retail sales restrictions two years after the manufacturing restrictions. In the 2015 NSPS revisions, a seven and a half month
sell-through was allowed for retailers to sell non-Step 1 wood heaters and hydronic heaters. [cites 80 FR 13685]
      The current NSPS, proposed in 2014 [cites 2014 proposed NSPS] and promulgated in 2015 allows for over twice the amount of time for manufacturers to comply with the May 15, 2020 Step 2 emission standards compared to the 1988 standards (two years and four months vs. five years and three months). The NPRM would allow for almost triple the amount of time for compliance at the point of sale. The industry for which regulatory relief is being sought was well aware of potential inventory challenges associated with a transition to more stringent standards and will have had over five years, which we believe is adequate time to have made the necessary business adjustments to avoid the problem of lost revenue as a result of stranded inventory. Finally, WESTAR, recognizing that consideration must be given to a transition period agreed with industry that "There is a common interest among the parties in facilitating the development and deployment of
new, cleaner wood burning devices while ensuring that economic impacts on manufacturers and retailers are mitigated." The basis for that understanding was that the Step 1 certifications would be valid until 2020 only.

Response: 
The Agency acknowledges that Step 2-compliant models have been achieved and are in the marketplace. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.1.2 Comment: Sell-through financially penalizes manufacturers that have made investments to develop Step 2-compliant models 
Many commenters contended that the sell-through will unnecessarily penalize those manufacturers who have invested in cleaner technology and have certified models ready for the marketplace (0019, 0031, 0052, 0053, 0054/0200, 0056, 0057, 0062, 0064, 0065, 0066, 0075, 0128, 0129, 0142). Examples of such comments are provided below in this section.

A manufacturer (0019 pp.1-2) asserted that  - 

      [T]he NSPS has had a large impact on our company as well. Together with the manufacturers we represent, thousands, perhaps millions of dollars have been spent on product development, testing, and listing in order to comply with the NSPS. We have attended hours of meetings and have made numerous comments over the years. This, of course, is not a new process.... This is an age-old story with regulation and business. Regulations are made and companies complain they don't have enough time to meet the rules or that meeting the rules will decrease their sales or even threaten the longevity of their businesses. ... Simply stated, this is a situation of business reactivity and timing. Some companies have actively advanced their technology for years/decades and plan to comply with 2020 requirements. Others have sold thousands of filthy appliances, keeping product costs low and highly competitive while knowing regulations were coming. For years/decades those companies chose to skimp on available technology. On the other hand, those of us that have advanced have spent significant sums to comply. If compliance dates are delayed, EPA will cause financial harm to reactive companies that have worked to meet the terms of the law. Compliance costs money. We have not deferred those costs. If companies are allowed 2 extra years to sell their products at pre- compliance effort costs, our products will be less competitively priced. A delay of 2 years therefore penalizes our company for having been responsive to the needs of public health. We are strongly against a delay even if it means we also have two more years to sell 2015 level products.

A state regulator (0129 p.1) argued that the sell-through would eliminate a return on investment for manufacturers who have worked for decades on cleaner technology  - 

      Recognizing the impact to public health from wood heating, in 1988 the NSPS for woodstoves was established, while exempting most pellet stoves from the standards. In the March 2015, the 27-year-old NSPS emission standards for woodstoves were revised, making these revised standards applicable to all pellet stoves, and set the first-ever emission standards for hydronic heaters (HH) and forced air furnaces (FAF). At the request of manufacturers, EPA phased in the new emission requirements in two steps to provide five years to adapt emission control technologies for Step 2 into their respective model lines. Manufacturers have not only had five years notice of the 2020 compliance date for the Step 2 standards but were well aware years earlier that EPA was preparing to revise the decades-old standards for woodstoves and set new standards for other devices that were never regulated at all. Numerous manufacturers have now made investments enabling them to produce over 200 different models (in all categories  -  boilers, furnaces and stoves) of the cleaner devices necessary to meet the Step 2 standards in order to be ready for on-time compliance with the May 2020 regulatory deadline. The proposed delay would essentially eliminate the opportunity for these manufacturers to recover a return on their investments.
Another state regulator (0057 pp.2-3) commented  - 
      Adding a sell-through at this point would penalize manufacturers that have invested in developing Step 2-compliant devices, result in the sale of a greater number of higher-polluting devices (which would remain operational for decades), and undermine current and future public health and air quality planning efforts throughout California.

Likewise, another commenter testified at the public hearing (0142 pp.23-24) that  - 
      [W]e believe that the proposed sell-through period is unfair to those manufacturers who have invested in the research and development and retooling costs to produce Step 2 compliant devices. Accordingly, EPA makes no attempt to monetize or account for the lost return on investment by these small businesses due to the production of -- of not being able to sell their Step 2 units because of sale[s] of Step 1 [units]. 
Similarly, one commenter (0128 p.2) contended that the sell-through "in effect subsidizes the worst performing technologies"  - 

      EPA's preamble says that the agency is proposing a sell-through because "it is reasonable to assume that retailers may become increasingly reluctant to purchase non-Step 2-compliant wood heating devices." But isn't that the desired outcome? Improving air quality and human health by increasing the efficiency of the residential wood heater sector is a principal goal of the original regulation. It is the intended result of the regulation to move retailers to focus inventory on Step 2-compliant devices. There is evidence that some retailers would likely switch to manufacturers that are producing 2020 compliant models. 
      
      Lamppa Manufacturing is one such manufacturer. Lamppa is a smaller manufacturer, and they are looking to connect with retailers. Their [forced-air furnace] unit is very affordable at a retail price of $5,295 and is compliant with the 2020 Phase 2 standard [for forced-air furnaces]. Tarm Biomass, who makes 2020 compliant wood and pellet boilers is getting calls from dealers looking for 2020 [hydronic heater] product. So are others who have 2020 compliant units. ... Competition in the marketplace is fundamental to consumers having access to more efficient and cleaner burning appliances. This proposal works against these market forces, and in effect subsidizes the worst performing technologies.

One commenter (0075 p.4) concluded that  - 

      In sum, there is simply no lawful and rational basis to delay the Step 2 standards by providing a sell-through period. EPA must abandon this attempt to reward those wood burning device manufacturers who have failed to prepare for the Step 2 standards, while subjecting millions of Americans  -  and public lands, including national parks  -  to additional air pollution from devices that do not comply with those standards and penalizing those manufacturers who have made the required investments to comply in a timely manner.

A law school (0053 p.7) commented that through this proposal  - 
      
      ...the agency plans to reward unprepared industry members at the expense of those manufacturers who have been timely adjusting their business plans for transitioning to Step 2 compliance. But the standards of rational rulemaking required by the APA and Executive Order 12,866 exist, in part, to ensure the credibility of agency commitments so as to create a measure of regulatory certainty. When an agency sets a compliance deadline, the regulated entities must believe with sufficient certainty that they will suffer consequences if they do not sufficiently prepare to meet that deadline. Without that, the agency is fostering an environment of regulatory uncertainty, which can harm innovation, dampen investment, and ultimately thwart statutory goals like the protection of health and welfare. 
      
An association of clean air agencies (0065 p.4) added that  - 
      
      EPA does not substantiate in the NPRM or SRIA the claims of industry representatives with respect to the purported harms to their business and that of retailers if a sell-through is not provided. Indeed, not all manufacturers are of the same mind regarding the need for a sell-through. In a December 7, 2018 letter to EPA Acting Administrator Andrew Wheeler, Daryl Lamppa, founder and owner of Lamppa Manufacturing, Inc., a manufacturer of FAFs, wrote the following in opposition to any change to the 2020 NSPS compliance date: "Thirty years ago, the EPA started to test wood-burning stoves for emissions. This should have been an early notice to the furnace manufacturers that they were next and they should have immediately started to examine, test and improve their furnace products. But they didn't. Lamppa Manufacturing, however, took a proactive approach to invest in our design to make our furnaces burn as close to `smokeless' as possible. No smoke also means no creosote and minimal pollution. We firmly believed this would allow us to pass any EPA test. Are we now expected to sit back and be punished for our hard work and extensive investment while the other manufacturers are rewarded for their inactivity?"

A group of assistant attorney generals (0066 p.12) echoed concerns raised by other commenters, adding this example  -  

      For example, at the EPA public hearing for the proposed rule on December 17, 2018, a representative for Hearth and Home Technologies stated that her company had engaged in research and development for the past twenty-four months. However, the industry was put on formal notice by the proposed NSPS issued in February 2014 (five years ago) that particulate matter standards would be strengthened. The companies that have developed step two compliant devices would suffer business losses if EPA gives an advantage to dilatory companies. Moreover, manufacturers had the opportunity to promptly litigate the legality of the 2015 NSPS, but chose instead to delay that litigation for more than three years (presumably to try and convince EPA to weaken the standards). To the extent these companies delayed in moving ahead to develop compliant wood boilers and furnaces, that was a conscious choice that should not be rewarded with an additional two years to sell noncompliant devices.

Response: 
The Agency agrees that providing a sell-through could financially penalize manufacturers that have made investments to develop Step 2-compliant models. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date. See response in 3.1.2 above.

4.1.3 Comment: Sell-through will cause states and localities to initiate more stringent and separate certification programs and more intrusive government actions
Several commenters (0045, 0065, 0068, 0129) argued that a sell-through at the national level will force states and localities to initiate more stringent and separate certification programs and/or more intrusive government actions such as burn bans. For example, one commenter (0045 p.3) contended that  - 

      Since 2008 WESTAR has advocated for reducing residential wood heating emissions by
taking advantage of technological improvements to achieve the highest levels of emissions performance among new products. NSPS regulations are required by statute to be revisited every eight years, yet it was 27 years between the time of the original residential wood heating NSPS and the 2015 update. We have supported a uniform national appliance certification program as the most cost-effective approach to improving upon new appliance emission performance. Waiving the requirements for improved emission performance achieved in Step 2 appliances will undoubtedly cause some states and localities to initiate more stringent controls, potentially including separate certification programs, to compensate for the loss of emission reductions that will occur as a result of the proposed changes. This will have the unintended consequence of increasing the transaction costs to manufacturers if they are required to certify their appliance through not only the federal, but also state or local programs.
      
      EPA estimated that the annual PM2.5 public health benefits of the 2015 NSPS range from $3.4 to $7.6 billion and the estimated costs totaled $45.7 million, a net benefit between $74 and $165 for every dollar spent. This is in contrast to the $8.3 million benefit to manufacturers and retailers and increased public health cost (or foregone benefits) of $94 to $210 million resulting from the proposal.

Likewise, an association of air pollution control agencies (0065 p.5) pointed out that -

      There are complexities around regulating emissions from residential woodstoves at the state or local level because the devices are installed and operated in private homes. Nonetheless, in the face of a sell-through, some states and localities that depend on the emission reductions to occur from implementation of the Step 2 standards in May 2020  -  as an alternative to regulating other industries or source categories to offset the emission reduction shortfall, if such other industries or source categories are even available  -  may have no choice but to pursue or build upon their own residential wood heating device regulatory programs in order to ensure the anticipated reductions are realized.

A local air quality management division (0129 pp.1-2) also asserted that the sell-through would make their district come close to exceeding the NAAQS and would likely necessitate more intrusive government actions like burn bans  - 

      The postponement of the Step 2 standards combined with the unprecedented growth currently being experienced will most certainly cause Washoe County to come precariously close to exceeding the National Ambient Air Quality Standard for PM2.5. The emissions reductions expected from Step 2 have already been built into our State Implementation Plan. A delayed Step 2 will result in a shortfall of emission reductions which will need to be made up through alternative regulatory restrictions on industry and an increase in burn bans during wintertime inversions. While burn bans are an effective tool to reduce wintertime PM2.5 emissions, they are perceived by the community as one of the most intrusive government programs by prohibiting the operation of an appliance in a private residence. Step 2 standards will provide emissions reductions while avoiding additional burn bans and preserving the relationship between air agencies and their community members across the county.

Response:
The Agency agrees that providing a sell-through could cause states and localities to initiate more stringent and separate certification programs and more intrusive government actions. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.1.4 Comment: Sell-through will significantly and unnecessarily increase pollution and public health hazards and damage property values
Numerous commenters  -  especially state and local regulatory agencies as well as environmental, public health and citizen advocacy organizations  -  contended that the sell-through will significantly and unnecessarily increase pollution and public health hazards (0021, 0041, 0052, 0053, 0054/0200, 0056, 0057, 0060, 0064, 0065, 0066, 0071, 0073, 0074, 0075, 0129, 0137, 0142, 0180). Multiple examples of such concerns are provided below in this section.

One commenter (0071 p.1, 2-4) asserted their opposition to the sell-through by cataloging the harm caused by emissions from residential wood heaters  - 

      The American Lung Association opposes the proposed amendments and urges EPA to maintain the current standards. Any additional sales of higher-polluting wood heaters will result in years of dangerous emissions that threaten human life and health. The Lung Association supported updating these standards during the review that led up to the 2015 standards, urging that they be even more protective than what EPA proposed and ultimately finalized. Strong protections against wood smoke emissions are critical because these emissions include particulate matter, carbon monoxide, nitrogen oxides, volatile organic compounds, and hazardous air pollutants that include several carcinogens. Millions of Americans face increased risk of harm from breathing these emissions, often exposed to them in their own neighborhoods. ...
      Emissions from Wood-Burning Threaten Public Health
      Burning wood produces emissions that are widely recognized as harmful to human health. Emissions from wood smoke, discussed below, include particulate matter, carbon monoxide, nitrogen oxides, volatile organic compounds, hazardous air pollutants and carcinogens. Many of these emissions can occur in both indoor and outdoor environments (Naeher et al., 2007). Wood smoke is also a significant source of many of these pollutants, especially primary particulate matter. New source performance standards should recognize the diversity and toxicity of these wood smoke-related air pollutants.
      Particulate Matter
      The EPA recognized wood smoke as a major source of particulate matter emissions in the 2009 Integrated Science Assessment for Particulate Matter (PM ISA, 2009). The PM ISA reports that emissions from residential wood burning comprised seven percent (7 %) of the source of anthropogenic emissions of primary PM 2.5 in 2002 (PM ISA, 2009). Wood smoke particles generally fall under one micrometer (1 um) in size, making them largely ultrafine particles. Because of their size, wood smoke particles can be transported hundreds of kilometers from the source (Naeher et al., 2007). The EPA concluded in the PM ISA that fine particulate matter cause premature death and cardiovascular disease and likely causes respiratory harm (PM ISA, 2009). The PM ISA reported studies that specifically found wood smoke and vegetative burning associated with an increased risk of cardiovascular mortality (Mar et al., 2000), as well as increased emergency department visits from cardiovascular disease (Sarnat et al., 2008) and respiratory diseases (Schreuder et al., 2006). Newer research has provided more information about particles from wood smoke. A major review (Bølling et al., 2009) found evidence that combustion conditions, including moisture content, insufficient air, and wood constituents, can impact the characteristics of the resulting particles. Bølling et al., (2009) found the lowest particle emissions when burning incorporates high temperatures, plentiful supply of oxygen and ample mixing of the air and gases.
      In late 2013, the International Agency for Research on Cancer, part of the World Health Organization, concluded that particulate matter could cause lung cancer. The IARC reviewed the most recent research and reported that the risk of lung cancer increases as the particle levels rise (WHO, 2013). A 2016 study confirmed the impact that wood burning devices have on PM2.5 levels in the winter months. Looking at monitors in 17 western U.S. cities, the researchers found that the smoke from the residential wood burning comprised from 11.4 percent to 92.7 percent of the PM2.5 in those days (Kotchenruther, 2016). 
      Wood smoke is recognized as a primary reason that the city of Fairbanks, Alaska currently fails to meet the annual and the 24-hour National Ambient Air Quality Standards for PM2.5, as is recognized in their state implementation plan. (EPA News Release, 2017). During 2014-2016, Fairbanks had the annual highest design value for PM2.5 in the nation; reaching 23 ug/m3, Fairbanks suffered nearly twice as much PM2.5 as the annual standard allows. (EPA Design Values, 2017). Wood smoke from existing unregulated outdoor wood boilers has been found to create PM2.5 concentrations that greatly exceeded the PM2.5 24-hr standard (Johnson, 2006).
      Carbon Monoxide
      Wood smoke is a primary source of carbon monoxide, as identified in both the EPA's 2010 Integrated Science Assessment for Carbon Monoxide (CO ISA, 2010) and the Agency for Toxic Substances and Disease Registry (ATSDR) 2012 Toxicological Profile of Carbon Monoxide (ATSDR, 2012). Carbon monoxide emissions from wood smoke add to the outdoor levels of carbon monoxide, as well as increasing indoor concentrations (Naeher et al., 2007). High, short-term levels of carbon monoxide can be fatal, and contribute to over 20,000 nonfatal emergency room visits each year in the U.S. (CDC, 2008; ATSDR, 2012). The CO ISA concluded that short-term ambient levels of carbon monoxide are likely to cause cardiovascular morbidity. The CO ISA also concluded that the evidence suggests that short-term exposure to outdoor levels of carbon monoxide may cause premature death, adverse birth outcomes and developmental effects, harm to the central nervous system and respiratory harm. The ATSDR concluded that even low levels of exposure to carbon monoxide can impact the cardiovascular and nervous system, as well as the fetus and the newborn. Consequently, the ATSDR concludes that even low levels of carbon monoxide cannot be assumed to be acceptable: Although there may be an exposure level that can be tolerated with minimal risk of adverse effects, the currently available toxicological and epidemiological data do not identify such minimal risk levels (ATSDR, 2012).
      Nitrogen oxides
      The EPA recognized wood smoke, including residential wood burning, as a source of nitrogen oxides (NOx) in the 2016 Integrated Science Assessment of Oxides of Nitrogen -- Health Criteria (NOx ISA, 2016). The NOx ISA cited Fairbanks, Alaska, as a location where the elevated NOx levels primarily come from wood burning. The NOx ISA identified residential wood burning as a source of indoor air levels of nitrogen oxides. As discussed in the NOx ISA, the Yale Childhood Asthma Study measured indoor levels of NOx by heat source in homes of 888 nonsmoking mothers in Connecticut and Virginia. Reporting NOx levels at the 90th percentile levels, Triche et al: (2005) found homes with fireplaces had two week average concentrations of 80 ppb NOx and homes with wood stoves had two-week average concentrations of 52 ppb NOx. Each hour of use of fireplaces, though not wood stoves, were linked in increased cough and sore throat. A review article calculated that using fireplaces in these homes for four hours would be expected to increase the risk of such symptoms by 16-20 percent (Naeher et al., 2007).
      Volatile organic compounds, including carcinogens and HAPs
      Wood smoke contains "many hundreds" of hydrocarbons and oxygenated organics, many of which are carcinogens and hazardous air pollutants (Naeher et al., 2007). Benzene, formaldehyde, and 1,3-butadiene are recognized as known human carcinogens (HHS, 2011). Long-term exposures to benzene can cause leukemia, a blood cancer and other blood disorders such as anemia and depressed lymphocyte count in blood. Exposure to formaldehyde can also cause chronic bronchitis and nasal epithelial lesions. A recent review of the research found evidence that formaldehyde may increase the risk of asthma, particularly in the young (McGwin et al., 2010). Wood smoke contains at least 26 pollutants specified in the Clean Air Act as hazardous (Naeher et al., 2007). Some include the carcinogens listed above but others have non-carcinogenic impacts. These gases can also irritate the eyes, skin, and respiratory tract, impair lung function, and affect vital organs.
      Polycyclic aromatic hydrocarbons (PAHs)
      Wood smoke contains more than 20 different polycyclic aromatic hydrocarbons, or PAHs (Naeher et al., 2007). A recent review identified some of the most abundant PAHs in wood smoke as naphthalene, acenaphthene, fluorene, phenanthrene, anthracene, fluoranthene and pyrene. In addition, two others, benzo(a)pyrene and fluoranthene are carcinogens (Bølling et al., 2009).
      Many People, including Children, Face Higher Risk
      Many people are more susceptible to harm from emissions from wood smoke. Large populations face higher risk: those at vulnerable life stages, including fetuses, children, teens and adults over age 65; those who have chronic lung diseases, such as asthma and chronic obstructive pulmonary disease; those who have heart disease, high blood pressure, coronary artery disease and congestive heart failure; diabetics; and those with low incomes (PM ISA, 2009).
      Children face special risks from air pollution because their lungs are growing and because they are so active. Just like the arms and legs, the largest portion of a child's lungs will grow long after he or she is born. Eighty percent of their tiny air sacs develop after birth. Those sacs, called the alveoli, are where the life-sustaining transfer of oxygen to the blood takes place. The lungs and their alveoli aren't fully grown until children become adults (Dietert et al., 2000). In addition, the body's defenses that help adults fight off infections are still developing in young bodies. Children have more respiratory infections than adults, which also seems to increase their susceptibility to air pollution (WHO, 2005).
      EPA has underestimated the cost to human health
      Allowing the continued sale of non-compliant devices is unacceptable. Due to the long lives of these devices, they would continue to spew toxic pollution for decades. The result would be years of harm to human health from wood smoke pollution that could have been prevented.

At the public hearing, this same commenter (0142 pp.61-66) testified against the sell-through, pointing to severe public health effects from residential wood heating emissions, and also providing anecdotes from people whose health has been negatively impacted  - 
      Strong protections against wood smoke emissions are critical because these emissions include particulate matter, carbon monoxide, nitrogen oxides, volatile organic compounds, and hazardous air pollutants that include several carcinogens. In the short time since the updates were finalized in 2015, the science on the health harms of particulate matter has grown even more alarming. Increased evidence exists now for a wide array of health harms from this pollutant. The evidence is very clear that PM causes premature death, short- and long-term respiratory problems, and cardiovascular harm. Particle pollution also causes lung cancer. The research also shows that long-term exposures to PM is likely to cause nervous system harm and may also cause reproductive and developmental impacts, including low birth weight in babies, and the development of diabetes. No threshold exists for harm from particulate matter, and many populations are at increased risk, including people with asthma and other lung diseases.
      One of the ways the Lung Association urged EPA to strengthen the NSPS in our comments was to reduce the uncommonly long timeline for compliance. ... The final rule did not heed our request and included what we deemed an unusually long phase-in period before the limits will come into effect in 2020. Any delay in the full implementation and enforcement of the 2015 standards will mean that homeowners will install new wood-burning boilers, furnaces and stoves that produce far more dangerous air pollution than modern, state-of-the-art, cleaner units would. We oppose any additional delays, including the sell-through period that EPA is proposing. Allowing the continued sale of non-compliant devices is unacceptable. Due to the long lives of these devices, they would continue to spew toxic pollution for decades. The result would be years of health problems from wood smoke pollution that could have been prevented.
      Toxic wood smoke emissions have real health impacts on real people. Here are a few excerpts from stories that people across the country have shared with the Lung Association about the impact of wood smoke on their health:
 Diane in North Carolina said: "Practically everyone here either has a wood stove or fireplace. There are many days that we can't go outside of our home. I have COPD, and it's so very hard for me to breathe. Hopefully, we'll be moving soon because I feel like a prisoner in my own home."
 Martha in New York said: "My husband and I both have asthma. We live in a rural area, and we are surrounded by people who use indoor wood stoves all winter long. We are at the bottom of a hill, and acid wood smoke penetrates our new, well-built house. We sometimes cough for weeks when the smoke starts up."
 Susan in New Jersey said: "My next-door neighbor began burning wood for heat in a wood stove. Our homes are close together, and our property, cars and even the inside of our home regularly become invaded with toxic, noxious wood smoke and fumes. My husband and daughter have asthma. The regular exposure to wood smoke on our own property has caused their asthma to worsen. My family has become ill, and that is not right."
         
      The American Lung Association asks EPA to reject this proposal to delay full implementation of the New Source Performance Stands. Additional sales of polluting devices means years of additional pollution and real harm for American families. 
Another commenter (0142 p.36) at the public hearing testified that his organization  - 
      ...found it very surprising and very demoralizing from where I sit that the EPA would consider relief for outdoor wood boilers, hydronic heaters, and furnaces. Most of these heaters are the biggest source of the air quality problems from this industry. Given the high levels of emissions from these units, they give a bad name to all the cleaner types of wood and pellet heating appliances currently available to consumers.
An association of air pollution control agencies (0065 pp.2, 5) also opposed the sell-through and provided the following comment  - 
      Residential wood heating in the U.S. produces five times more direct PM2.5 emissions than all U.S petroleum refineries, cement manufacturers and pulp and paper plants combined. Wood smoke contains a mixture of harmful substances that penetrate deep into the lungs. Fine particulates (PM2.5) from wood smoke not only affect air quality in entire regions, but also significantly impact air quality and public health at the local level including communities and neighborhoods located in valleys where wood smoke accumulates. In fact, a single wood-burning device can emit enough pollutants to place an entire neighborhood at risk. Each year, residential wood combustion is responsible for hundreds of thousands of tons of PM2.5 emissions. These emissions can increase the concentration of particle pollution to levels that cause serious health impacts ranging from exacerbation of cardiac and respiratory problems to premature death. Further, PM2.5 contributes significantly to our nation's regional haze problem. Residential wood smoke also contains volatile organic compounds, carbon monoxide and black carbon, as well as toxic air pollutants such as benzene, formaldehyde, dioxin and polycyclic organic matter (POM). EPA estimates that residential wood combustion contributes "44 percent of total stationary and mobile source POM emissions, which accounts for nearly 25 percent of all area source air toxics cancer risks and 15 percent of noncancer respiratory effects." Sell-through provisions of any length would delay critically needed emission reductions from residential HHs, FAFs and wood heaters throughout the country. Such delay is unnecessary and unwarranted and would harm public health and the environment.... In summary, NACAA opposes any changes to the current NSPS as adopted in March 2015 to allow for any sell-through and, instead, supports full compliance with no exceptions, by May 15, 2020.
Likewise, a regional association of state air pollution agencies in the Northeast (0054/0200 pp.1-2, 9-10) asserted  - 
      Residential wood combustion can contribute from 20 percent to 75 percent of ambient PM levels in many Northeast areas during cold weather [and have caused northeastern communities to experience nearly twice the level of the annual PM2.5 NAAQS, with high maximum hourly concentrations]. ... The states in our region need the emission reductions from the sources covered by this rule to effectively protect public health and the environment from the impacts of wood smoke. Timely implementation is needed to maintain compliance with the PM2.5 NAAQS. ... No further delay in fully implementing the NSPS is acceptable or warranted. ...
      This NSPS is among the most cost-effective control strategies promulgated for PM2.5. For central heaters, the value of foregone air quality benefits that would occur with EPA's proposed sell-through period far exceed the projected cost to industry for complying with the existing rule. If EPA were to include wood stoves in the sell-through period, even higher foregone health benefits (i.e., increased health costs) will occur. NESCAUM calculates that the foregone public health benefits associated with the proposed sell-through period for central heaters would outweigh the cost to industry by 52 to 132 times. Further, the costs to industry are likely overstated and the adverse public health impacts are clearly understated.
This same Northeastern association of state air pollution agencies (0054/0200) testified at the public hearing (0142 p.21)  - 

      We want to state for the record that reducing emissions from wood burning devices is a crucial public health issue for our states. Residential wood combustion is the number one source of particulate matter in all of the NESCAUM states, contributing anywhere from 20 to 78 percent of total ambient PM in the colder months. It is crucial for us to get real emission reductions.

Likewise, a regional association of state air pollution agencies from the West, who testified at the public hearing (0142 pp.54-56), also objected to the sell-through because of the negative impact they claim it will have on air quality  -  
      Reducing emissions from residential wood heating devices is of critical importance across the west. Many communities that are adversely impacted by wood heating are located in valley settings that are subject to wintertime temperature inversions, trapping wood smoke, and exposing the public to unhealthy levels of particulate pollution. Residential wood heating has been a source of public health concern, and western states have developed and implemented regulatory and voluntary strategies to address the problem since the 1980s. A key element of those strategies is a strong and effective NSPS, so that only the cleanest burning new appliances are installed in our airsheds. The WESTAR region encompasses large and small cities that have been in non-attainment due to residential wood heating but are now in attainment; areas that are now in non-attainment as well as communities that are on the verge of becoming non-attainment due to wood smoke. Communities adversely impacted by residential wood heating in the west range from large urbanized areas like Tacoma, Washington; Sacramento, California; and the Salt Lake City region to smaller towns like Libby, Montana and Oakridge, Oregon and current PM2.5's non-attainment areas West Silver Valley, Idaho; Portola, California; and Fairbanks, Alaska, a place that has the unhealthiest air in the country because of residential wood heating emissions. Strategies to improve and maintain air quality in residential wood heating impacted airsheds require a combination of federal, state and local actions. States have a crucial need for stringent new appliance standards to complement state and local regulatory and voluntary activities like curtailment programs during wood smoke pollution episodes and publicly financed stove change-outs that replace dirty stoves with newer, cleaner ones. Residential wood heaters have useful lives that may span 20 to 30 years. Unless the cleanest new devices are installed in homes, the necessary emission reductions will not materialize, and other, sometimes more burdensome, restrictions on the use of wood for heat may be required to retain or regain good air quality.
Another commenter from a state attorney general's office testified at the public hearing (0142 pp.29-30, 32, 33-34) that  - 

      New York is the nation's second largest consumer of wood for heating, with approximately 150,000 homes using wood for primary heat and 500,000 homes for supplemental heat. In rural counties, residential wood burning produces 90 percent of particulate emissions. To put this in perspective, residential wood heating emits more particulate matter statewide in New York than electricity generation and transportation combined. Multiple studies show the dangers of particulate matter to human health. For example, a 2018 study published in the Proceedings of the National Academy of Sciences attributed an estimated 4 million deaths worldwide to particulate matter in 2015. Another study found that increases in particulate matter were associated with increases in mortality, and the risks were greatest among men, African-Americans, and people with Medicaid eligibility. ... the Step 2 standards are important to protect the health of New Yorkers who use wood boilers and furnaces and the health of their neighbors. ... Regarding human health, EPA's analysis supporting the 2015 standards estimated that these standards would reduce premature deaths from wood-burning air pollution by between 360 to 810 people, prevent 180 emergency room visits, and avoid 48,000 lost workdays. In its proposed sell-through, EPA admits that the costs of changing the rule outweigh the savings by a ratio of approximately ten to one. ... In conclusion, EPA should not alter the implementation of the 2015 New Source Performance Standards for residential wood boilers and furnaces, or adopt any sell-through provision. As EPA determined in 2015, these performance standards are necessary to protect public health. EPA should abandon any attempt to delay their full implementation.

A state regulator (0064 p.1) similarly commented that their state... 

      ...opposes such a sell-through or any other delays in full implementation as the proposed amendments will harm public health and the environment and are unnecessary. Residential wood heating in the United States produces five times more direct fine particulate matter (PM2.5) emissions than all U.S. petroleum refineries, cement manufacturers and pulp and paper plants combined. Wood smoke contains a mixture of harmful substances, including PM2.5, volatile organic compounds and toxic air pollutants, which penetrate deep into the lungs, exacerbating cardiac and respiratory problems. ... The full benefit of this rule absent the proposed revisions will not be realized for many years, perhaps decades, because of the long life-span and slow turnover of these devices. Installation of devices meeting less stringent standards has long-term air quality and health impacts.

Another state regulator (0074 pp.1-6, 7, 12) also cataloged the health hazards of residential wood heater emissions, similar to other comments listed in this section, and argues that the sell-through proposal "should be withdrawn for the following reasons:" 
      The health impacts of fine particulate matter (PM2.5) are well documented, significant, severe, and pervasive. The major source of PM2.5 in the winter is smoke from residential wood combustion. ... Delaying the implementation of 2015 Residential Wood Heaters New Source Performance Standards (RWH NSPS) Step 2 standards will have negative impacts on communities' ability to attain and maintain NAAQS PM2.5 levels. Oregon communities depend on the more stringent standards. Given the months-long impact of wildfire smoke in communities vulnerable to impacts from PM2.5, delaying adoption of Step 2 emissions standards will add to the burden of adverse health impacts in those communities, including excess mortality. ... Contrary to the assertions in the RIA, areas of PM2.5 nonattainment and areas close to nonattainment in Oregon experience higher than average adverse impacts on children's health and people of color (minority populations). Contrary to the assertions in the RIA, communities experiencing the highest levels of PM exposure are disproportionately low-income communities. ... Oregon DEQ finds this proposed rulemaking to be extraordinarily ill conceived. Its impacts would be to (1) delay much needed improvements in wintertime air quality to communities that are already heavily impacted by wildfire smoke, and (2) diminish the air quality of these
communities for an entire generation. ... Finally, we find the proposed rule-making egregious in its willingness to trade hundreds of millions or even billions of dollars in health impacts in our communities for an estimated $8.3 million in income to manufacturers, when over 200 models of residential wood combustion devices already exist that meet Step 2 emission standards. Oregon DEQ urges EPA to withdraw this ill-advised and flawed proposal that rolls back years of progress and we stand ready to take steps necessary to defend our state's rights to protect our public's health and environment. 
A group of state attorneys general along with a regional air agency (0066 pp.1-3, 0137) pointed out that  - 
      Wood-burning devices emit multiple pollutants that endanger human health. These pollutants include fine particulate matter (PM2.5), carbon monoxide (CO), polycyclic aromatic hydrocarbons (PAHs), and polycyclic organic matter (POM). The Centers for Disease Control determined that PAHs are reasonably expected to cause cancer. Multiple studies show the dangers of PM2.5. For example, a 2018 study published in the Proceedings of the National Academy of Sciences attributed an estimated 4 million deaths worldwide to PM2.5 in 2015. Another study found that increases in particulate matter were associated with increases in mortality, and the risks were greatest among certain groups, including African-Americans and people with Medicaid eligibility. In 2013, acknowledging these dangers, EPA revised its National Ambient Air Quality Standards for PM2.5 to provide more protection. 78 Fed. Reg. 3,086, 3,103 (Jan. 15, 2013).
      Particulate matter from poorly-controlled wood-burning devices causes public health hazards in the States. For example, these devices pose a particular danger to rural areas in New York. New York is the nation's second largest consumer of wood for heating, with approximately 150,000 homes using wood for primary heat and 500,000 homes for supplemental heat. In rural New York counties, residential wood burning causes 90 percent of PM2.5 emissions. To put this in perspective, as shown in Figure 1 below, residential wood heating contributes more PM2.5 emissions to New York's air than the electricity generation and the transportation sectors combined. To reduce PM2.5 emissions, while encouraging the sustainable use of our forest resources, New York has become a leader in the research, development, and demonstration of the next generation of wood heaters through the Renewable Heat New York program. [Figure 1 shows a bar chart - Comparison of PM2.5 Emissions from Residential Wood Heating, Mobile Sources, and Electric Generating Stations in New York, in which Residential Wood Heating appears to contributes more than mobile sources and electric generation combined] In Massachusetts, because of the serious health problems and nuisance conditions that result from wood-burning appliances, more than 30 municipalities have enacted regulations, by-laws or ordinances that place restrictions on the use of outdoor wood-fired boilers. See, e.g., Barre, Chapter 310, § 310-1 - § 310-8; Belchertown, Chapter 294, § 294-1 - § 294-9. Many of the regulations have been approved by the Massachusetts Department of Environmental Protection pursuant to M.G.L. c. 111, § 31C. See generally, https://www.mass.gov/guides/heating-your-home-with-a-wood-burning-appliance.
A collective of environmental groups (0075 pp.1-2) similarly asserted that "EPA must withdraw this misguided proposal and allow the Step 2 standards for wood heaters, hydronic heaters, and forced-air furnaces to take effect on the schedule the agency adopted in 2015", pointing in part to the air pollution and public health impacts  - 
      EPA's proposal would unjustifiably delay vital protections from harmful air pollution that the agency adopted nearly four years ago. The many adverse health impacts of the wood burning devices covered by EPA's standards of performance reflect the harmful constituents of wood smoke, the amount and duration of emissions from the devices, and the proximity of those emissions to residences. As EPA has explained, the smoke from these devices "contains harmful particle pollution, also known as fine particulate matter or PM2.5, along with other pollutants including carbon monoxide, volatile organic compounds (VOCs), black carbon, and air toxics such as benzene. These heaters, which are used around the clock in some areas, can increase particle pollution to levels that pose serious health concerns. In some areas, residential wood smoke constitutes a significant portion of the particle pollution problem." EPA, Fact Sheet: Overview of Final Updates to Air Emissions Requirements for New Residential Wood Heaters (Feb 4, 2015), at https://www.epa.gov/residential-woodheaters/fact-sheet-overview-final-updates-air-emissions-requirements-new ("Fact Sheet").
      The 2015 New Source Performance Standards placed more protective limits on pollution from new wood-burning boilers, furnaces, and stoves  -  the first updates to the standards for these types of devices in 27 years. Id. The new standards reflected the improved technology that was already widely in use. Id. Once fully in place in 2020, the standards will result in a nearly 70 percent reduction in fine particles and volatile organic compounds and a 62 percent reduction in carbon monoxide. Id. EPA found that the standards adopted in 2015 would significantly reduce health and other impacts from this pollution, including "asthma attacks, non-fatal heart attacks, emergency room visits for asthma, lost work days, and premature deaths, among other effects." Id. Furthermore, wood burning devices are a predominant source of heating for many communities near Class 1 areas (national parks and wilderness areas) that struggle with regional haze pollution problems. Across the country, from the Central Valley of California to Fairbanks, Alaska and Salt Lake City, Utah to communities across the Northeast, particulate matter from wood burning devices is a direct contributor to regional haze problems in our national parks. This source of pollution will be greatly reduced with the performance standards adopted in 2015 and will assist states in working toward clean, natural air in our protected national parks and wilderness areas.
Likewise, another commenter (0073 p.1) stated  - 

      On behalf of the 16,000 members of the American Thoracic Society, I want to express our strong concerns with the Environmental Protection Agency's proposal to extend the transition deadline for new source performance standards for new residential wood heaters, hydronic heaters and forced-air furnaces. The proposed extension of the implementation deadline is bad for the environment and will have an adverse impact on human health. We strongly urge the agency not to finalize the proposed deadline extension. Wood heaters are a source of hazardous air pollutants and it is appropriate for EPA to regulate emissions from wood-fire heaters and furnaces. The rule-making process on wood heaters and furnaces that was finalized in 2015 provided appropriate background information on the pollution emitted from wood heaters and furnaces and the health impacts exposure to wood smoke causes. The ATS supports the underlying rule that was finalized in 2015 and urges the agency to move forward with its timely implementation. ... More importantly, the proposed regulation would delay the real, measurable and important health benefits that will be enjoyed by the public by requiring more efficient and less polluting wood heaters and furnaces be made available on the U.S. market. Wood smoke is an important source of dangerous air pollutants including CO, NOx, benzene and particulate matter. In many communities, wood stoves and furnaces are a significant source of winter time particulate matter emission. Exposure to wood stove and furnace emissions can cause serious health effects including asthma exacerbations, emergency room visits and hospitalizations, increase controller medication use, heart attacks, COPD exacerbations and hospitalizations. Delaying implementation of the 2015 rule will deny patients living in areas that rely on wood stoves and furnaces of the important health benefits of reduced wood smoke pollution emissions that will be achieved by the standard.

An environmental and public health advocacy organization (0180 pp.1-4) commented that  - 
      Doctors and Scientists Against Wood Smoke Pollution, DSAWSP, is an international coalition whose mission is to help educate the public and policy makers on the toxicity, public health consequences, and climate impacts of wood combustion. We are writing in response to Docket ID No. EPA-HQ-OAR-2018-0195 ... We strongly oppose this proposed change to the 2015 NSPS. These hazardous products present such a significant risk for nearby residents, they should be removed from the market as soon as possible...
      While a small segment of the hearth industry will benefit from this proposal, the costs to nearby residents in loss of property values, damaged health and even risk of premature death are substantial. By EPA's own analysis, at least $90 million in foregone health and reduced mortality benefits would result from this proposal. And while the increased profits to this segment of the hearth industry will be short-term, the harm inflicted where these hydronic heaters and forced air furnaces are installed will not be. These appliances will continue to pollute for decades, reducing quality of life and, for some, reducing the lifespan of those unfortunate enough to be living nearby.
      Numerous defining attributes of air pollution have been firmly established during the last ten years of medical research. It is important to keep these facts in mind while considering the effects these hydronic heaters and wood-fired furnaces have on the communities in which they are placed. These include:
       -- In the same way there is no safe number of cigarettes a person can smoke, there is no safe level of air pollution a person can breathe. Even low concentrations, well below the current 24-hr PM2.5 standard, have been proven to be hazardous to public health.
       --  The youngest and oldest members of the population are the most sensitive, and there are important genetic differences among people in their susceptibility to pollution. But everyone is harmed to some degree, even those who don't have symptoms.
       --  Air pollution does not disperse equally throughout a community. The pollution in your own microenvironment is much more relevant to your health than what is measured in the broader community airshed. Air pollution measured downwind from a home burning wood can be 100 times greater or more than what is picked up even a mile away. If "a man's home is his castle," then neither mote nor drawbridge are sufficient defenses from wood smoke. Homes downwind of a wood burner have been shown to have indoor pollution as much as 88% as high as the pollution levels outside the house, creating real pollution hotspots and real pollution victims.
      For example, one outdoor wood furnace field study found that mean PM2.5 (cts) concentrations were 4.21 times greater in the four outdoor wood furnace exposed homes than in six control homes. The mean PM2.5 (cts) concentrations inside the four outdoor wood furnace exposed homes roughly corresponded to a mass PM2.5 of 37ug/m3, which is above the US EPA 24-hr PM2.5 limit of 35 ug/m3. The study concluded that existing setback regulations between outdoor wood furnaces and neighboring homes are not adequate to protect the health of neighboring residents.
       --  Not all types of pollution are equally toxic even if they are not differentiated for regulatory purposes. Wood smoke is probably the most toxic type of pollution that the average person ever inhales. The potential for harm from particulate pollution is inversely proportional to particle size. The most dangerous particles are the subset of PM2.5 called ultrafines, 0.1 microns in size and smaller, which characterize wood smoke. Particles of this size are many times more likely to be inhaled, and less likely to be exhaled. Once inhaled these ultrafine particles are more easily picked up by the bloodstream and delivered throughout the body. When the particles make contact with cells of virtually any body organ, the smaller size makes it easier to penetrate cellular membranes, including the nucleus of the cell, where it provokes the most biological damage.
      Furthermore, the smaller the particle, the more easily it penetrates nearby homes no matter how tightly sealed, which is an additional reason why indoor concentrations of wood smoke in nearby homes can be almost as high as outside. The smaller the particle the longer it stays suspended in the atmosphere, prolonging the opportunity to seep indoors and the likelihood of being inhaled by the occupants. Once inside a home, the particles are not dissipated by wind, eventually landing on virtually every indoor surface, allowing additional and prolonged opportunity for exposure of the occupants, especially children, when they touch floors, carpets, walls, and counter tops. Pediatricians now refer to this as "thirdhand" smoke in the case of cigarettes, and the concept is just as applicable with wood smoke.
      The toxicity of wood smoke is also directly proportional to the wide array of chemicals and heavy metals attached to those particles. Chemicals like dioxins, furans, PAHs (polycyclic aromatic hydrocarbons), benzene, acrolein, formaldehyde, quinones, and heavy metals like mercury, lead, copper and chromium.
      PAHs are one of the most toxic of the chemical groups common to wood and tobacco smoke, and for immediate neighbors exposure can be particularly high. For instance, a European wood smoke emissions study recorded "short term events of extremely high PAH concentrations [that] were directly attributed to a plume of chimney exhaust emitted from houses located close to the sampling place."
      A wide range of recent studies have proven that pollution particles penetrate the brain, heart, and the lining of blood vessels of virtually all of us. The health consequences are as broad as those from cigarette smoke. Air pollution kills people  --  a lot of them. A recent MIT study estimated about 210,000 annually in the United States. The World Health Organization estimates that it is responsible for one out of every eight deaths worldwide, and that it is the most important environmental cause of cancer. It causes heart attacks and strokes, and shortens life expectancy.
      Hundreds of studies link air pollution to brain dysfunction, including impaired cognition, memory and behavior, and neurodegenerative diseases like Alzheimer's. A recent European study found that wood stove users living in areas where wood burning is common had a 74 percent higher risk of developing dementia, and people who did not themselves use a wood stove, but who lived in a neighborhood with residential wood smoke pollution, had a 55 percent higher risk of developing dementia compared to others who lived in neighborhoods where people did not burn wood...
      Part VII Statutory and Executive Order Reviews, Section H of the proposed rule states that, "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."
      The reality is, however, that pollution from residential wood burning is highly localized and often not reflected in regional air quality measurements. Neighbors who are affected  --  often very seriously  --  by their neighbors' wood burning find that there are no public health and environmental protections for them. Children living in homes near these incredibly polluting devices very much have their health affected disproportionately.
      The mandate of the EPA is public health protection, not protection of the wood burning industry. Therefore, anything and everything that can be done to reduce and eliminate wood burning should be the EPA's priority, not the balance sheets of a handful of companies whose products are proven, serious health hazards. An additional two-year sellthrough period, on top of the five years these manufacturers have already had to comply with the new standards, extends an unjustifiable risk to communities throughout the country and should not be granted.
A private citizen (0060 p.1) argued against the sell-through and for maintaining the current standards, asserting the following  - 

      Nuts! Emissions from wood-burning devices are toxic. The proposed amendments to the New Source Performance Standards for residential wood-burning heaters are pure stupidity and a needless threat to public health. Maintain the current standards. Allowing the sale of the older, more polluting wood heaters for two more years means more dangerous emissions for years and years to come: more volatile organic compounds, more carbon monoxide, more fine particulate matter, and more oxides of nitrogen. The VOCs include carcinogens like benzene and formaldehyde and highly inflammatory polycyclic aromatic hydrocarbons. Increased PM2.5 causes premature death, lung disease, heart disease and diabetes; it likely harms the nervous system and brain; it causes premature births and low birth weight; and it causes developmental problems in children and adolescents. Increased exposure to PM2.5 also increases risk of Alzheimer's disease. NOx harms people with asthma, COPD, and other respiratory problems. One out of five children in the San Joaquin Valley have asthma. Once fully implemented in 2020, the current standards reduce almost 70 percent of the PM2.5 and VOCs and 62 percent of carbon monoxide.
      
A state regulator (0056 p.2) commented that  - 
      Reducing emissions from wood burning devices is critical to addressing public health issues from wood burning in Massachusetts. Residential wood combustion is one of the largest sources of direct particulate matter (PM) emissions in our state, and these emissions pose serious health impacts ranging from exacerbation of cardiac and respiratory problems to premature death. Residential wood smoke also contains volatile organic compounds, carbon monoxide and black carbon, as well as toxic air pollutants such as benzene, formaldehyde, dioxin and polycyclic organic matter. On several days of the year, Massachusetts communities experience elevated levels of PM partly attributable to wood burning.
Another state regulator (0057 pp.2-3) commented  - 
      Adding a sell-through at this point would penalize manufacturers that have invested in developing Step 2-compliant devices, result in the sale of a greater number of higher-polluting devices (which would remain operational for decades), and undermine current and future public health and air quality planning efforts throughout California. The proposed sell-through greatly and inappropriately privileges short-term concerns of a small number of manufacturers over public health. Its substance and procedure violate several provisions of the Clean Air Act and other federal statutes, executive orders, and policies.
One commenter (0021 pp.1-3) raised the issue of a sell-through not only negatively impacting human health, but outdoor wood burning appliances harming surrounding properties financially. They commented  - 
      I would like to address the financial harms that people who live near outdoor wood furnaces have sustained through no fault of their own. I have attached 19 testimonies of people who have been physically and financially harmed by Phase l and Phase ll outdoor wood furnaces and indoor wood stoves. They have all asked for help from every level of government and all have received no help at any level. It is clear from people's real-life stories that the financial burdens of wood burning are being transferred from the woodburner, who is saving some money in heating costs, to the neighbors living in smoke, who are losing their life savings. In addition, if a harmed neighbor attempts to hire a lawyer to sue the wood-burner under their state's nuisance clause, they will quickly find out that they will pay their lawyer by the hour. In the meantime, the wood burner's liability insurance will pay the wood-burner's legal fees. The wood-burner, therefore, can withstand the lawsuit forever, while the harmed neighbor will quickly run out of money. The harmed neighbor is both physically and financially damaged by a wood-burning appliance burning in their neighborhood.
A local health department (0041 pp.1-2) commented that wood smoke impacts their community's public health in multiple ways, including being the third largest contributor to cancer risk from air pollution, and furthermore commented that  - 

      In our current winter home heating season, the County is seeing asthma related emergency room visit numbers at or above what they were during the worst days of wildfire smoke this summer. So far this winter, we have experienced an increased number of days when our air was unhealthy for sensitive groups. An environmental justice analysis conducted by the Oregon Department of Environmental Quality indicates that disproportionate impacts from air toxics occur for minority and low-income populations in the Portland region, Multnomah County's most densely populated area, with Hispanic/Latinx populations experiencing the highest impacts from residential wood combustion emissions.
      
      The EPA's emission standards for wood-burning devices can improve the health of residents of Multnomah County. In 2015, EPA estimated that the reductions in fine particulate matter emissions that will result from implementation of the final standards will avoid 360 to 810 premature deaths per year in the years 2015-2020, as well as reduce nonfatal heart attacks, emergency room visits for asthma, and lost work days. EPA also estimated that reduced health impacts resulting from the proposal would provide a benefit of $3.4 billion to $7.6 billion per year over the period 2015-2020. Extending the sell through would delay these important public health benefits.
      
      To protect our local communities, Multnomah County established a wood burning curtailment ordinance in early 2018. Wood burning is restricted on days when the air quality if forecasted to be poor. However, Multnomah County relies on federally established standards to ensure wood stoves in operation meet emissions requirements. Extending the sell-through period would delay the important and health-protective of standards for many wood heaters currently in use, limiting the effectiveness of EPA, state and local efforts to reduce wood smoke emissions.
      
Response: 
The Agency agrees that providing a sell-through could increase pollution and public health hazards measured as forgone benefits, as estimated in the EPA's supplemental RIA for this proposal, and also potentially impact property values. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.2	Opposition to Sell-Through for Hydronic Heaters	
Section 4.2 includes comments in opposition to the sell-through specific to hydronic heaters. It should be noted that the comments presented in Section 4.1 regarding all wood heating devices, also oppose the sell-through of hydronic heaters, but for brevity are not repeated in this section.

4.2.1 Comment: Manufacturers have had sufficient time already to meet the standards and some models already do
In addition to the comments summarized above in Section 4.1.1 regarding all types of wood heating devices (including hydronic heaters), some commenters made statements specific to hydronic heaters, asserting that hydronic heater manufacturers have had sufficient time to meet the standards and furthermore that hydronic heater models exist that already meet the Step 2 standard (0019, 0021, 0054/0200, 0059, 0068). Examples of such comments are provided below.

A manufacturer of hydronic heaters (0019 pp.1-2) explained and asserted the following  - 

      ...[M]any outdoor wood boiler companies, some of which are now complaining about not having enough time for research and development have been in business even longer than we have. It seems as though some of them have been complacent about research and development. Perhaps some of these companies have even bet their future on legal battles with EPA to avoid regulation. Regardless, remaining content to sell devices that pollute heavily for two decades or more, while being 100% aware about that pollution and while being unwilling to reduce that pollution until regulators stepped in is not a valid position from which to complain about time. Many of the companies that now complain about not having enough time have grown substantially in the last 20 years, apparently allocating substantial money to aspects of business other than R & D. An historic look at Google Earth shows massive plant size growth at Central Boiler, for example. We aren't against American companies succeeding. We admire success and growth. However, if that growth and success is due to poor planning, profit taking, and/or a bad bet on regulations, we don't admire it anymore. We just call it a business mistake. 
      
      This is an age-old story with regulation and business. Regulations are made and companies complain they don't have enough time to meet the rules or that meeting the rules will decrease their sales or even threaten the longevity of their businesses. In the case of hydronic heaters, the technology to create cleaner emissions has existed for 20+ years and has been widely known. This is not a situation where 5 years ago companies were told to make clean equipment and they had no idea how to comply. This is a situation in which companies have known for years that their products were bad polluters, they knew for years how to reduce emissions, and they refused to make changes. Yes, clean burning technology costs more. Yes, educating the public is required. Yes, dealers with a desire to learn about burning wood cleanly rather than making a quick buck are also required. It is not easy. Simply stated, this is a situation of business reactivity and timing. Some companies have actively advanced their technology for years/decades and plan to comply with 2020 requirements. Others have sold thousands of filthy appliances, keeping product costs low and highly competitive while knowing regulations were coming. For years/decades those companies chose to skimp on available technology. On the other hand, those of us that have advanced have spent significant sums to comply.

One state regulator (0059 pp.1-2) contended that  - 
      The compliance requirements, including the compliance deadline, are not a surprise to manufacturers. The EPA began its efforts to improve hydronic heater technology more than 12 years ago, beginning with implementation of the voluntary qualification program for hydronic heaters in 2007. Ensuring that a "full 5-year compliance period is available so that consumers, manufacturers, and retailers are not adversely affected" is not accurate: only some manufacturers are claiming they are affected, and these manufacturers are indicating they do not yet have a 2020 compliant device available. This deadline at this point is merely 15 months away. There is no information in EPA's proposal indicating that a sell-through period results in speedier development of products that meet EPA certification requirements, or that the extensions would allow these few manufacturers to eventually offer 2020 standard compliant devices. Rather, providing a sell-through period allows for more non-compliant devices to be manufactured and sold. 
Another state regulator (0068 pp.3-4) asserted that  - 

      The technology required to meet the Step 2 requirements for hydronic heaters
exists. Currently, there are 11 models certified as Step 2 compliant. Two of
those models have been certified by DEC [New York State Department of Environmental Conservation] as compliant with Part 247. The two units that underwent laboratory testing and were certified under Part 247 were manufactured in February and April of 2016. Therefore, the technology necessary to produce Step 2-compliant hydronic heaters has been available for nearly three years.

A regional association of state air pollution agencies in the Northeast (0054/0200 pp.3-4) stated  - 
      NESCAUM opposes any sell-through period during which retailers can continue to sell newly manufactured or existing inventory of Step 1 compliant hydronic heaters and forced-air furnaces after May 2020 when the Step 2 standards come into effect. ... The 2015 NSPS affords manufacturers five years to design, certify and manufacture Step 2 compliant units and for retailers to manage their inventories to avoid the situation this proposed amendment is intended to address. Further, states put the industry on notice more than a decade ago that they needed to address excessive emissions from hydronic heaters. NESCAUM issued a model rule for outdoor woodfired hydronic heaters in 2007. In that same year, Vermont became the first state to regulate air pollutant emissions from these devices. Other northeast states followed suit. Maine, for example, has had rules in place since 2007 requiring wood-fired hydronic heaters to meet an emission standard of 0.06 lb/MMBtu if no setback requirements are in place. Consequently, the industry has faced more stringent standards for these devices than required by the NSPS for over 10 years. There are currently eleven hydronic heaters and two forced-air furnace models with tested emission levels that would enable them to certify to the Step 2 standards. The five-year lead-time for Step 2 compliance provided in the 2015 NSPS is sufficient. No additional time for selling Step 1 units is acceptable or needed.
A public health advocacy group (0021 p.3) concluded that "We hope and expect the EPA to protect the public's health and deny an extension of the "New Source Performance Standards" (NSPS) for outdoor wood furnaces - industry was given 5 years and that was and is enough time.

Response: 
The Agency acknowledges that development of Step 2-compliant hydronic heater models have been achieved and are in the marketplace. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.2.2 Comment: Sell-through financially penalizes hydronic heater manufacturers that have made investments to develop Step 2-compliant models
In addition to the comments summarized above in Section 4.1.2 regarding all types of wood heating devices (including hydronic heaters), some commenters made statements specific to hydronic heaters, asserting that a sell-through would financially penalize hydronic heater manufacturers that have already invested in cleaner technology and can consequently meet the Step 2 standards (0019, 0068, 0142). Examples of such comments are provided below.

A hydronic heater manufacturer (0019 pp.1-2) explained and asserted the following  - 
      Tarm Biomass is a small, family company founded in 1994. We import and distribute European made wood boilers, wood pellet boilers, and wood chip boilers. Three of the 12 boilers we sell currently meet 2020 emissions thresholds. The nine boilers that do not comply have not been tested yet using EPA approved 2020 test methods. ... thousands, perhaps millions of dollars have been spent on product development, testing, and listing in order to comply with the NSPS. ... Where Tarm Biomass and the companies it represents differ from Kuma, Blaze King, and Hardy is that we invested much earlier to produce cleaner technologies. Beginning in the 1990s the products we sold had dramatically lower emissions and higher efficiency than typical outdoor wood boilers. Even though the products we sold at that time were not regulated by EPA, we took it upon ourselves to advance the art of wood burning through product development and significant efforts at public education. Today we have three products approved for 2020 using US test methods. Not all of our products are approved and there is a threat to sales for the products that are not approved. However, we have known since 2015 that testing would be required and we will address that requirement as we see fit, but not by complaining we haven't had enough time. ...
      ... Simply stated, this is a situation of business reactivity and timing. Some companies have actively advanced their technology for years/decades and plan to comply with 2020 requirements. Others have sold thousands of filthy appliances, keeping product costs low and highly competitive while knowing regulations were coming. For years/decades those companies chose to skimp on available technology. On the other hand, those of us that have advanced have spent significant sums to comply.
      
      If compliance dates are delayed, EPA will cause financial harm to reactive companies that have worked to meet the terms of the law. Compliance costs money. We have not deferred those costs. If companies are allowed 2 extra years to sell their products at pre-compliance effort costs, our products will be less competitively priced. A delay of 2 years therefore penalizes our company for having been responsive to the needs of public health. We are strongly against a delay even if it means we also have two more years to sell 2015 level products.

Likewise, discussing both hydronic heaters and forced-air furnaces, a commenter testified at the public hearing (0142 pp.36-37) that  - 
      
      [A] big problem is that many manufacturers want to keep selling these Step 1 units and never intend to do the R&D to become Step 2 compliant. Giving them two more years just undercuts those who have the ability to meet Step 2.
      
A state environmental regulatory agency (0068 p.5) commented that hydronic heater manufacturers and retailers are typically small businesses that have invested time and money into developing Step 2-compliant products. The adoption of sell-through provisions would hurt these businesses and discourage others from developing Step 2-compliant products.

Response: 
The Agency agrees that providing a sell-through could financially penalize hydronic heater manufacturers that have made investments to develop Step 2-compliant models. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.2.3 Comment: Sell-through will significantly and unnecessarily increase pollution and public health hazards
In addition to the comments summarized above in Section 4.1.4 regarding all types of wood heating devices (including hydronic heaters), some commenters made statements specific to hydronic heaters, asserting that a sell-through for hydronic heaters will significantly and unnecessarily increase pollution and public health hazards (0021, 0052, 0059, 0064). Examples of such comments are provided in this section.

A public health advocacy group (0021 pp.1, 3) commented that  - 

      I am President of Environment and Human Health, Inc. (EHHI) a non-profit of ten physicians and public health professionals dedicated to protecting the public's health from environmental harms. ... EHHI strongly disagrees with this proposal. [Bold-face, original] EHHI first sued EPA in 2013 because EPA had not set new air standards as they were required. While EPA neglected to do this, people were being seriously harmed by wood smoke emissions from many wood burning appliances - particularly from outdoor wood furnaces. Then, at last, in 2015 EPA set new standards, and outdoor wood furnaces were given five years to comply. Considering how dangerous their emissions were and are, this was extremely generous. There is no reason now that industry should be given additional time. Outdoor wood furnaces are harmful to neighbors' health and serious polluters to the environment.

A state regulator (0064 pp.1-2) commented that  - 

      Hydronic heaters may be a small percent of the residential wood heating market nationally but the nuisance problem caused by these devices is significant in Connecticut. As a densely populated state that still has some rural areas and many suburban or exurban residential settings, a hydronic heater that is improperly located or used improperly is a problem. In recent years, DEEP [Department of Energy & Environmental Protection] has had many complaints about wood smoke, mainly from neighbors of people operating hydronic heaters. While the state has statutory provisions concerning siting and stack height, Connecticut has no emission standards in place for such units making the timely implementation of the federal Step 2 standards even more important. 

Another state regulator (0059 p.1) likewise commented that  - 

      The MPCA [Minnesota Pollution Control Agency] and Minnesota Department of Natural Resources conduct surveys to determine the use of wood for recreational and primary heating. Our last completed survey indicates that residential wood burning is on the rise, both in the number of homes burning wood, and the amounts that the homes are burning. While Minnesota meets current ambient air standards for fine particulate matter, residential hydronic heaters can create highly localized, negative impacts. Minnesotans, therefore, rely on EPA to ensure that as more devices are purchased and used, they are as clean and efficient as possible.
      
An additional state regulator (0052 p.2) commented that  - 

      Alaska's current standards for HH and FAFs is 0.32 MMBtu/hr within the PM2.5 nonattainment area. The Step 2 standard for these devices under 40 CFR part 60, subpart QQQQ is slated to step down to 0.1 MMBtu/hr. This step reduction will assist in additional emission reductions in communities and implementation should not be unreasonably delayed.

Response: 
The Agency agrees that providing a sell-through could increase pollution and public health hazards measured as forgone benefits, as estimated in the EPA's supplemental RIA for this proposal. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.2.4 Comment: Sell-through not necessary for hydronic heater retailers
Some commenters asserted that a sell-through for hydronic heaters is not necessary for retailers (0132, 0142). Examples of such comments are provided in this section.

A manufacturer of hydronic heaters (0132 pp.1-2) commented that a sell-through extension is not necessary for hydronic heaters (although an extension of the compliance deadline by 3 years is, according to this commenter)  - 

      I believe that a sell through period only applies to retail wood stove outlets or importers of equipment. Most hydronic wood heaters are sold through a Dealer or Rep network. In my opinion, most US manufacturers of hydronic equipment build product inventory during the winter months for sales that generally occur in late summer or early to mid-fall. Neither Dealers nor Reps keep a large stock of product on hand. My experience indicates that a Dealer might have 5 units on hand; a Rep fewer. So I believe that a sell through period for hydronic heaters is not required. If the limit takes effect on May 15, 2020: the manufacturer builds compliant equipment from January through June or July of 2020, for sale in late summer and fall of 2020. The last time non-compliant equipment had been built would have been January through June or July of 2019, for sale in summer and fall of 2019. I think a sell through period for hydronic equipment is not necessary. I would rather see the 2020 date moved to 2023 as discussed in detail below [in this comment letter].

Regarding sell-through relief for retailers, a commenter testified at the public hearing (0142 pp.36-37) that  - 
      
      In the case of boilers and furnaces, some of these retailers are Home Depot, Tractor Supply, Northern Tool, and other chains that need no help. Some of these retailers are on eBay and it's hard to even tell who they are, much less monitor compliance. 

Response: 
The Agency acknowledges that some commenters indicated providing a sell-through is not necessary for all hydronic heater retailers. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.2.5 Comment: Sell-through not necessary for consumers because retail prices will not generally increase
In reference to the cost to consumers of Step 2-compliant hydronic heaters versus Step 1-compliant models, one MJO (0133 p.4) noted  - 

      For central heater change-out programs, New York's average appliance cost was lower than Vermont's, with an average cordwood boiler cost of $10,600 and $11,700 for pellet boilers. Prices for Central Boiler Step 1 units, without installation, ranged from $7,825 to $17,165. Similarly, prices for uncertified residential units (http://www.shoproyall.com/OutdoorPressurized-Boiler_c_21.html) from an online retailer ranged from $6,897 to $15,249. Another online retailer (https://www.discountstoves.net/category-s/290.htm) listed both Step 1 and uncertified units for residential installations at $6,500 to $17,850. Details on these costs are found in Attachment 8. Based on the analysis and data obtained by NESCAUM, the price differential between Step 1 and Step 2 units is virtually non-existent and any difference that does exist can be recouped by fuel savings associated with the relative efficiency improvements of Step 2 models. 

Response: 
The Agency acknowledges that there is uncertainty regarding the extent of any retail price increase in Step 2-compliant models, compared to Step 1-compliant models. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.3	Opposition to Sell-Through for Forced-Air Furnaces
Section 4.3 includes comments in opposition to the sell-through specific to forced-air furnaces. It should be noted that the comments presented in Section 4.1 regarding all wood heating devices, also oppose the sell-through of forced-air furnaces, but for brevity are not repeated in this section.

4.3.1 Comment: Sell-through financially penalizes forced-air furnace manufacturers that have made investments to develop Step 2-compliant models
Discussing both hydronic heaters and forced-air furnaces, a commenter testified at the public hearing (0142 pp.36-37) that  - 

      [A] big problem is that many manufacturers want to keep selling these Step 1 units and never intend to do the R&D to become Step 2 compliant. Giving them two more years just undercuts those who have the ability to meet Step 2.

Response: 
The Agency agrees that providing a sell-through could financially penalize forced-air furnace manufacturers that have made investments to develop Step 2-compliant models. See Agency response in 3.1.2 above. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date. 

4.3.2 Comment: Sell-through not necessary or feasible for forced-air furnace retailers
A commenter testified at the public hearing (0142 pp.36-37) that  - 

      In the case of boilers and furnaces, some of these retailers are Home Depot, Tractor Supply, Northern Tool, and other chains that need no help. Some of these retailers are on eBay and it's hard to even tell who they are, much less monitor compliance. 

Response: 
The Agency agrees that providing a sell-through may not be necessary for all forced-air furnace retailers. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.3.3 Comment: Sell-through will unreasonably delay emission reductions
A state regulator (0052 p.2) commented, in reference to hydronic heaters and forced-air furnaces, that  - 

      Alaska's current standards for HH and FAFs is 0.32 MMBtu/hr within the PM2.5 nonattainment area. The Step 2 standard for these devices under 40 CFR part 60, subpart QQQQ is slated to step down to 0.1 MMBtu/hr. This step reduction will assist in additional emission reductions in communities and implementation should not be unreasonably delayed. 
      
Response: 
The Agency agrees that providing a sell-through could delay emission reductions associated with switching from Step 1-compliant to Step 2-compliant devices. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.


4.4	Opposition to Sell-Through for Wood Heaters under AAA
Section 4.4 includes comments in opposition to the sell-through specific to wood heaters regulated under subpart AAA. It should be noted that the comments presented in Section 4.1 regarding all wood heating devices, also oppose the sell-through of AAA wood heaters, but for brevity are not repeated in this section.

4.4.1 Comment: Manufacturers have had sufficient time already to meet the standards and many models already do
In addition to the comments summarized in Section 4.1.1 about all regulated devices, multiple commenters (0030, 0032, 0045, 0052, 0054/0200, 0059, 0068, 0074, 0129, 0142) stated that they do not believe a sell-through is warranted given the number of Step 2-compliant wood heaters currently available and the 5 years that manufacturers have had to prepare for the Step 2 requirements.

A wood heater manufacturer (0032 p.1) commented that they are opposed to the retail sell-through and opposed to any delayed implementation of Step 2, providing the following reasons for their opposition  -  

      As a manufacturer of wood stoves, we are 100% against any delayed implementation of Step 2 of the 2015 New Source Performance Standards (NSPS) and we are against any additional sell through period for retailers. Our position is based on several facts:
      1. A 5-year period is more than ample time for manufacturers to develop new products. As one of the newest manufacturers of wood stoves in the industry, we have been able to design, develop, test, and EPA certify two completely different EPA 2020 compliant wood stoves in a 2-year period, and that is without the financial resources and in-house labs that many manufacturers have to aid the process.
      2. Manufacturers have had ample time to ship any accumulated inventory. Most peer manufacturers we've visited never store more than a single, partial season of inventory. Any claims that inventory has accumulated are greatly exaggerated. With the EPA providing firm guidance that the NSPS Step 2 will move forward, manufacturers will not continue to manufacture older stove models to cram into the distribution channel; rather they switch to manufacturing new models that many of them claim to have in their discussions with dealers and distributors.
      3. The concern and challenge of developing new EPA 2020 compliant stoves has been greatly exaggerated by the industry. There are dozens of stoves already certified and available, and from dealer and distributor feedback, dozens more that manufacturers have ready to go, but are holding back for when Step 2 goes live. ...
      
      We strongly recommend, for the acknowledged public health benefits and for the long-term health of the wood stove industry, to push forward with NSPS Step 2 as original passed and intended. MF Fire has demonstrated these standards are achievable, as have the dozens of additional EPA 2020 compliant stoves developed by other manufacturers.

An alliance of western state air agencies (0045 pp.2-7) stated that manufacturers should comply with the May 2020 deadline, as they have already been given adequate sell-through allowances under current law. Specifically, manufacturers will have had over five years between promulgation of the NSPS in March 2015 and the May 2020 Step 2 effective date, which is ample time to develop and certify qualifying appliances. Their analysis concluded that a sufficient number of models will be available well before the May 2020 deadline to satisfy consumer choice and therefore there is no need for an extension to the compliance deadline for this category of appliances. 

Commenters (0030, 0054/0200) asserted that it is ridiculous to imply that manufacturers cannot meet the standards, especially considering that Washington State has had these standards in effect for years and has plenty of wood heaters available for purchase. One of these commenters (0054/0200 pp.4-5), an alliance of northeastern state air agencies, stated that manufacturers who said they had not had enough time to comply with the 2020 standards simply planned poorly  -  
      At the December 17, 2018 EPA hearing in Washington, DC, a representative from Hearth and Home Technologies, one of the largest stove manufacturers, testified that the company had been working on Step 2 appliances for the last 24 months. EPA, however, proposed the rule in February 2014 (59 months ago) and promulgated the rule in February 2015 (47 months ago). This gap in time provides an example of the failure of some manufacturers to make appropriate business decisions regarding Step 2 units despite significant lead-time notice. The previously cited examples of Lamppa Manufacturing, and the experience of the HY-C Company, which spent three years developing and certifying a forced-air furnace, show what is achievable within the given timeframe. Public health and the environment should not be made to pay for poor planning and business decisions on the part of some manufacturers that have had years to prepare for this transition.
Response: 
The Agency agrees that development of Step 2-compliant wood heater models have been achieved by manufacturers that made timely efforts to develop Step 2 models and those models are in the marketplace. 

For example, in the 2015 NSPS final rule preamble on page 13686 (in Section V.A. Summary of Comments), EPA explained that:

"Recognizing that the cord wood alternative compliance option is an option rather than a requirement, we have set the cord wood Step 2 emission level at 2.5 g/hr as the alternative compliance option for room heaters for the following reasons:
 Test data show that at least three wood stoves meet a limit of 1.3 g/hr, which (coupled with some commenters' claims that the test precision is no better than 1.0 g/hr) would suggest an achievable limit on the order of 2.3 g/hr.
 The State of Washington DOE has required catalytic stoves since 1995 to meet a limit of 2.5 g/hr. 
 The Step 2 emission level does not take effect until 5 years after the effective date of this final rule. The cord wood alternative compliance option provides appropriate opportunities to small manufacturers who have been leaders in optimizing for cord wood performance and encourages other manufacturers to follow their example. More discussion is in the RTC document in the docket for this final rule." 

The point being made here is that the state of Washington has required catalytic stoves since 1995 to meet a limit of 2.5 g/hr and therefore, manufacturers should be able to meet this standard using crib or cordwood. Nevertheless, after reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.4.2 Comment: Sell-through financially penalizes manufacturers that have made investments to develop Step 2-compliant models 
In addition to the comments summarized in Section 4.1.2 about all regulated wood heating devices, a state regulatory agency (0068 p.5) commented that wood heater manufacturers and retailers are typically small businesses that have invested time and money into developing Step 2-compliant products. The adoption of sell-through provisions would hurt these businesses and discourage others from developing Step 2-compliant products.

Another state regulatory agency (0034 p.2) commented that  - 
      ...most of the devices that have obtained Step 2 certification to date are wood heaters. EPA should therefore recognize that extending the sell-through period for wood heaters would disadvantage manufacturers who already completed the Step 2 certification process to comply with EPA's original deadline. WDNR [Wisconsin Department of Natural Resources] reached out to wood heater manufacturers in the state. A Wisconsin pellet stove manufacturer who has already completed the Step 2 certification process noted that such a sell-through period would penalize this manufacturer relative to others who chose to delay Step 2 certification, as its Step 2 compliant units would face competition from less-expensive, non-Step 2 compliant units for an additional two years.
A third state regulatory agency (0052 p.2) noted that  - 

      Alaska's 2.5 g/hr standard for wood heaters and pellet stoves was easily met by those manufacturers proactively meeting the Step 2 standard and therefore, for the past 4 years, have actively assisted in reducing emissions in the Fairbanks area. Providing a two-year sell-through is a disservice to the efforts by those manufacturers who have actively worked to develop devices that meet the Step 2 standard.

Response: 
The Agency agrees that providing a sell-through could financially penalize wood heater manufacturers that have made investments to develop Step 2-compliant models. See Agency response in 3.1.2 above. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.4.3 Comment: Sell-through will significantly and unnecessarily increase pollution and public health hazards
In addition to the comments summarized in Section 4.1.4 about all regulated wood heating devices, two commenters (0032, 0054/0200) stated that a sell-through would have negative public health implications. A wood heater manufacturer (0032 p.1) asserted that the health benefit to the public of implementing the NSPS Step 2 greatly outweighs the slight benefit to industry of a sell-through  - 

      * The overall benefit to industry, both manufacturers and dealers, is de minimis. The industry just prefers not to change, which is why the NSPS was created in the first place. 
      * However, the health benefit to the public of implementing NSPS Step 2, according to the EPAs own research, is huge and outweighs the slight benefit to industry. The one factor not included in the EPA research as to economic impact to the industry is the rise of new, innovative technology and wood stove companies, like MF Fire, which have diligently invested in the EPA NSPS standard and demonstrated the new Step 2 standards are obtainable without undue investment or effort. The industry needs to evolve and move forward to achieve the public health benefits, which will enhance public acceptance of wood heat as a continuing, viable heat source.
      We strongly recommend, for the acknowledged public health benefits and for the long-term health of the wood stove industry, to push forward with NSPS Step 2 as original passed and intended. MF Fire has demonstrated these standards are achievable, as have the dozens of additional EPA 2020 compliant stoves developed by other manufacturers.

Likewise, another commenter (0054/0200 pp.4-5) stated that the sell-through would lead to non-Step 2-compliant devices emitting at high rates in communities for the lifetime of those units, which can be 20 years or more. There are significant adverse air quality and public health impacts associated with higher emitting units, according to the commenter.

Response: 
The Agency agrees that providing a sell-through could increase pollution and public health hazards measured as forgone benefits, as estimated by the EPA in the supplemental RIA for this proposal. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.
 
4.4.4 Comment: Sell-through will eliminate the significant emission reductions achieved when transitioning from Step 1 to Step 2-compliant wood heaters
A regional association of state air pollution agencies in the Northeast (0133 pp.2-5) took issue with industry claims  -  and even with EPA estimates  -  regarding the actual in-field difference in emissions between Step 1 and Step 2 wood heaters and instead asserted the following  - 
      Some industry comments on the NPRM suggest that Step 2 appliances will not yield significant emission reductions in day-to-day use. Data from ongoing NESCAUM research contradicts this position. Testing under a variety of operating conditions has demonstrated that in general, in-use emissions from Step 2 compliant units will be significantly lower than those from Step 1 appliances. NESCAUM conducted three replicate tests on six wood stove appliances with maple cordwood fuel using test methods that mimic typical homeowner use patterns. Comparing the "in-field" use patterns with Step 2-certified appliances showed that the overall emission performance of these stoves dramatically improved as certification values decreased. As indicated in Figure 1 [of comment 0133], the test results showed dramatic improvement for units certified at levels below the 2.0 grams per hour Step 2 emission standard. Average emission rates for the Step 2 stoves in the study were 1.31 to 3.23 grams per hour, while the average performance for the Step 1 stoves ranged from 5.23 to 16.03 grams per hour. The six models evaluated in the study represent the broad variety of stoves available in the market, including: small, medium and large firebox size, and catalytic and non-catalytic technologies. The results indicate that the actual, in-field emission reductions of moving from Step 1 to Step 2 appliances will be larger than EPA's estimates. ...
      NESCAUM repeats its request that EPA abandon this proposal, which would have far-reaching adverse public health consequences for decades to come. The NPRM fails to articulate a valid environmental, economic or legal basis to move forward with the proposed rule changes. For the reasons presented here and those detailed in our previous comment letter, NESCAUM urges EPA to maintain the current Step 2 timelines and standards.

Likewise, an advocacy group for clean burning wood heating (0128 p.4) commented that Step 1 heaters have an adverse impact on air quality and energy use, citing that there is clear evidence that more advanced units will lower energy use/costs and improve air quality.

Response: 
The Agency agrees that providing a sell-through would delay the emission reductions attributable to transitioning from Step 1- to Step 2-compliant wood heaters and thus increase public health hazards measured as monetized forgone benefits. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.4.5 Comment: Sell-through not necessary for retailers because there is ample time to sell-off non-compliant inventory
One manufacturer (0032 p.1) asserted that retailers have had ample time to sell-off inventory and there is no crisis in overstocked units -

      Dealers have had multiple years to sell off inventory in their stores. On top of this, dealers no longer make large purchases the industry moved away from this practice years ago as dealers were tired of carrying inventory into the off season. There are a reported 3000 hearth specialty dealers in the US, with each store carrying an average of 5 models. Most stores carry one floor model for display per stove and typically one in inventory. That means there should only be 30,000 stoves in inventory in retail at any typical time, of which dealers should easily be able to sell over the course of one and a half seasons remaining before Step 2 is slated to go into effect. Additionally, most stores, as reported in industry research, have been reducing their purchases on non-EPA 2020 compliant inventory, further reducing the backlog. Simply put, there is no crisis in overstock units. Dealers deserve clarity from the EPA that they should be focusing new inventory purchases on EPA 2020 compliant units.

Response:
The Agency agrees that providing a sell-through may not be necessary for all retailers, because there has been ample time to sell-off non-compliant inventory. See the Agency responses in 2.3.2, 3.1.1 and 3.1.2 above. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.

4.4.6 Comment: Sell-through not necessary for consumers because retail prices will not generally increase
A regional association of state air quality agencies (0133 pp.2-5) commented that a sell-through is not necessary to reduce costs borne by consumers of purchasing Step 2 complaint products, citing how data from state change-out programs and other sources shows that redesigning wood heating devices to comply with Step 2 emission standards has not generally resulted in increased retail prices - 
      Some in industry have also suggested that there are large cost increases with Step 2 appliances that will limit consumer acceptance. However, information presented below from state change-out programs and other sources [presented in Table 1 of comment letter 0133] shows that redesigning wood heating devices to comply with Step 2 emission standards has not generally resulted in increased retail prices. In fact, as highlighted in Table 1, data from Vermont's woodstove change-out program show that, on average, cordwood stoves with emission levels below the Step 2, 2.0 grams per hour standard ($2,415) are priced somewhat less than those with certified emissions above 2.0 grams per hour ($2,636).... Based on the analysis and data obtained by NESCAUM, the price differential between Step 1 and Step 2 units is virtually non-existent and any difference that does exist can be recouped by fuel savings associated with the relative efficiency improvements of Step 2 models.
Response:
The Agency acknowledges that there is uncertainty regarding the extent of any retail price increase in Step 2-compliant units, compared to Step 1-compliant units. In fact, as the commenter points out, in some cases Step 2-compliant units are priced lower than Step 1-compliant units. See response to 3.1.4 above. After reviewing all comments and data submitted, we have determined that there is not sufficient rationale for a sell-through after the Step 2 compliance date.
5.0	Wood Heating Device Step 1 and Step 2 Statistics
Section 5 presents comment excerpts and summaries regarding Step 1- and Step 2-compliant model statistics for hydronic heaters, forced-air furnaces, and wood and pellet heaters regulated under subpart AAA. To the extent provided by the submitted comments, this section includes comments regarding the availability of Step 1- versus Step 2-compliant devices, inventory carryover as well as the decline in purchases of Step 1 devices by retailers, and the time and cost required for EPA certification.

5.1	Hydronic Heater Step 1 and Step 2 Statistics
Section 5.1 includes comments regarding the availability of hydronic heater models that are designed and certified to the Step 2 standard, the availability of Step 1 and Step 2 models at retailers, inventory carryover and decline in purchases of Step 1-compliant models by retailers, and the time required for EPA certification of hydronic heater model lines.

5.1.1 Comment: Step 2 hydronic heater models designed and certified 
Multiple commenters (0045, 0052, 0054/0200, 0068, 0075, 0133, 0142) asserted that there are enough Step 2-compliant hydronic heaters available to consumers and manufacturers have had enough time to meet Step 2 standards, so that a sell-through is not necessary. Other commenters (0034, 0063, 0142) disagreed with this assertion, stating that there are few commercially viable Step 2 hydronic heaters and a sell-through is necessary to allow for the development of more compliant devices. One hydronic heater manufacturer (0019) noted that out of the 12 models they manufacture, 3 are currently Step 2-certified.

Some stakeholders commented that Step 2 technology and certified devices are already available enough to make the sell-through unnecessary. For example, one state regulator (0068 pp.3-4) asserted, and other commenters echoed (0052, 0054/0200), that  - 

      The technology required to meet the Step 2 requirements for hydronic heaters
exists. Currently, there are 11 models certified as Step 2 compliant. Two of
those models have been certified by DEC [New York State Department of Environmental Conservation] as compliant with Part 247. The two units that underwent laboratory testing and were certified under Part 247 were manufactured in February and April of 2016. Therefore, the technology necessary to produce Step 2-compliant hydronic heaters has been available for nearly three years.
      
Another commenter (0045 pp.7-8) added  - 

      EPA established an easily achieved Step 1 standard for hydronic heaters and forced-air
furnaces. The Step 1 NSPS for hydronic heaters grandfathered Phase 2 appliances of EPA's voluntary program which began in 2008. [cites EPA Hydronic Heater Program Phase 2 Partnership Agreement [EPA-HQ-OAR-2009-0734-0100].] EPA also automatically granted Step 1 certification to hydronic heaters certified by the New York State Department of Environmental Conservation and pellet hydronic heaters certified by the Rural Heat New York program. EPA specifically granted this regulatory relief to help manufacturers focus their attention and resources on achieving Step 2 standards. [cites Final Rule, 80 FR 13683] As of June 2018 there were 11 Step 2 certified hydronic heaters which incorporate a range of control technologies. [cites USEPA Certified Hydronic Heaters, June 2018. (6 thermal storage, 3 pellet, 1 catalytic, 1 noncatalytic)]
      
A third commenter (0068 pp.3-4) echoed this and added that the technology necessary to produce Step 2-compliant hydronic heaters has been available for three years and therefore they oppose the sell-through.
Another commenter (0133 pp.2) agreed, indicating that discussions with industry contacts suggest EPA has either certified or has requests for Step 2 certification for numerous AAA heaters, hydronic heaters, and furnaces in addition to those posted on EPA's certification list.
One commenter (0075 p.4) contended that  - 

      [M]ost of the more than 100 hydronic heaters certified to EPA as meeting the Step 1 standards also achieve particulate matter emission rates below the level of the Step 2 standards. These models merely need to be retested and recertified. See Attachment 2. Moreover, EPA itself has recognized that most of the manufacturers with models that already meet the Step 2 emissions limits will probably wait until early 2020 to spend the money to get their models retested to demonstrate compliance with Step 2  -  a delay that likely reflects the uncertainty EPA's reconsideration process is creating. See EPA, E.O. 12866 Review Draft, Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces: Advance Notice of Proposed Rulemaking at 13 (Oct. 31, 2018) (EPA-HQ-OAR-2018-0195-0006 att. 3)

On the contrary, one hydronic heater manufacturer who testified at the public hearing (0142 pp.27-28) claimed that  - 

      The EPA list of certified hydronic heaters can be very confusing and misleading. Most are pellet units, and other units are not even tested by EPA approved test methods. Of those, only a handful meet Step 2. And of those, there's only a couple that are commercially viable.
      
Another commenter (0034 p.1-2) echoed this sentiment, saying that the two-year sell-through proposal for hydronic heaters and forced-air furnaces appears to be based on EPA's recognition that few models have been certified as Step 2-compliant.

The industry trade group (0063 p.14) pointed out that  - 
      EPA identified the percentage of wood heaters that were estimated to be meeting the Step 2 standards back in 2015 to ...18% of hydronic heaters ... Based on those percentages, EPA determined that it could not impose the Step 2 emission limits in 2015. Instead, after weighing all of the requisite factors under CAA Section 111, EPA determined that it would not require compliance with the Step 2 limits until May 2020, i.e., after giving manufacturers five years of lead time to bring models into compliance with those limits. Now, three-and-a-half years later, the percentages are not materially different: ...Of the 129 currently certified hydronic heaters, only 10 (8%) are Step 2-certified.
One hydronic heater importer and distributor (0019) asserted that three of the 12 boilers they sell meet 2020 emissions thresholds. The nine boilers that do not comply have not been tested using EPA-approved 2020 test methods.

Response:
The Agency acknowledges that, as of March 5, 2020, there were 99 Step 1 hydronic heater model lines and 13 Step 2 hydronic heater model lines (12 percent) certified, according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). Furthermore, based on the test reports, we note that 12 more of the Step 1 model lines could certify to Step 2 if re-tested (or 22 percent).

5.1.2 Comment: Step 1 and Step 2 hydronic heater models available at retailers
Regarding the availability of Step 2 hydronic heaters at retailers, with one exception (0019), the few who commented (0119, 0120, 0046, 0048) claimed that there were no 2020-compliant hydronic heaters available to them. 

One retailer (0046 p.1) explained that  - 

      Currently 2020 compliant hydronic heaters are not available to my dealership. To eliminate our financial risk the time has already passed where we should have been ordering and carrying products that were 2020 compliant. I already have inventory that I will not be able to sell by the 2020 deadline. 

Likewise, another retailer (0048 p.1) noted that "As of this time our company does not have any 2020 compliant heaters available. Depending on future sales and trends, the inventory I currently have, might not be sold by the cutoff date."

Two dealers (0119, 0120) commented that no 2020-compliant hydronic heaters are currently available to their dealerships. 

However, one hydronic heater importer and distributor (0019) stated that three of the 12 boilers they sell meet 2020 emissions thresholds.

Response:
The Agency notes that, as of March 5, 2020, there were 99 Step 1 hydronic heater model lines and 13 Step 2 hydronic heater model lines (12 percent) certified, according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). Furthermore, based on the test reports, we note that 12 more of the Step 1 model lines could certify to Step 2 if re-tested (or 22 percent). The EPA Certified Wood Heater Data has been available to the public for many years. Retailers can use (and could have used) this database to identify the manufacturers that have Step 2 models for sale and contact them to purchase Step 2 units. Retailers have not explained why they were not able to get Step 2 units when they wanted to buy them. We have no reason to conclude that these Step 2 models are available to some retailers and not others. 

5.1.3 Comment: Inventory carryover, selling season, and decline in purchases by retailers of Step 1 hydronic heaters 
In general, some commenters contended that retailers were already declining to purchase Step 1-compliant hydronic heaters (i.e., devices that are not Step 2-compliant) and that a sell-through was necessary to allow retailers to continue purchasing Step 1-compliant devices (0051, 0063, 0067, 0142). The issue of inventory carryover, or the amount of time retailers claim it may take to carry a model until sale, is related to the contention that retailers are declining to purchase Step 1-compliant devices, as multiple commenters (0027, 0029, 0035, 0036, 0038, 0039, 0044, 0046, 0119, 0120, 0046) asserted long lead times prior to selling a device in inventory, sometimes of multiple selling seasons/years. One commenter (0063) stated that retailers are still ordering Step 1 hydronic heaters, and another commenter (0128) asserted that a decline in purchases of Step 1 hydronic heaters is not an issue because it is the intention of the 2020 NSPS standards. 

The industry trade group (0063 pp.16-17) asserted that - 
      EPA's current proposal details how "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." The fact that this is already happening so far before May 2020 should not have come as a surprise. When HPBA commented on EPA's 2014 proposal, one of HPBA's consultants with decades of experience in product development, sales, and marketing for many hearth industry manufacturers (Charlie Page) warned that the fear of being stuck with unsellable inventory could have profound implications throughout the supply chain:
            Many retailers will stop buying appliances they are not absolutely
sure that they can sell, and the manufacturers will lose the revenue
from the sales of these stoves; revenue that is needed to fund the
design, testing and the launch costs for new NSPS compliant
models. It has been reported that this is already happening in the
warm air furnace market and will be exacerbated unless EPA
grants adequate sell-through relief. 
      It is well known in this industry that "many retailers have unsold inventory at the end of the season" even though there is variation among how retailers do business, e.g., some keep substantial inventories at any given time while others only buy product when they need it. As noted in EPA's current proposal, many retailers have begun to take measures to try to ensure that they will have little or no Step 1 inventory stranded after May 2020 so that they can minimize or eliminate their financial losses.

Another commenter (0051 p.2) stated that "[a]bsent the transition window provided by a sell-through time frame, retailers have already begun to pull back on orders for Step 1 products out of concern they will end up with stranded inventory that they can neither sell nor give away after the May 2020 effective day for Step 2."

One retailer (0044 p.1) commented and other retailers agreed (0119, 0120) that  - 

      ...[L]ong lead times are a part of planning our inventory so we have adequate supply to keep generating revenue. It is not uncommon for me to have inventory carryover in the range of 3-4 years or more on some appliances before I am able to find a perfect match between customer and a particular item carried in inventory. Consequently, I carry in excess of $600,000 in inventory at any given point in time.

Likewise, a form letter campaign participated in by multiple hydronic heater dealers (0027, 0029, 0035, 0036, 0038, 0044, 0046, 0119, 0120) claims that  - 
      It is not uncommon in this industry to carry over inventory for two to three years due to the wide variety of sizes and colors and the unpredictability of what our customer may need. When stocking inventory lead times have to be factored in from production to trucking schedules. These long lead times are a part of planning our inventory so we have adequate supply to keep generating revenue. 
Regarding the significance approaching May 2020 of declining purchases by retailers of Step 1 heaters from manufacturers, one retailer (0067 p.1) noted that  - 

      We anticipate that, as of fall of this year, this issue will get much bigger and by November of 2019 most dealers and all distributors will be bringing inventory in only when it is sold... We have started to see distributors and dealers reduce heater orders not wanting to be left with unsaleable inventory after the deadline. After informally polling distributors and dealers, we realized that it is common for a heating appliance to spend 1-2 years (and sometimes longer) in distributor and/or dealer inventory before being sold.

Other retailers (0119, 0120) asserted that a sell-through is necessary, because it is not uncommon for the hydronic heater industry to carry over inventory for two or three years due to the unpredictability of what a customer may need. 

A representative from the industry trade group testified at the public hearing (0142 p.46) that "across the industry, retailers are slowing or ceasing purchases of Step 1 products due to the looming retail prohibition on May 15, 2020." On the contrary, however, this same industry trade group submitted a comment (0063 pp.18-19) stating that some retailers will continue to order Step 1 devices  - 
      In addition, there are still some retailers that cannot afford to stop ordering Step 1
appliances altogether. This could be due to a number of reasons: First, to the extent Step 1 models are popular and in high demand by consumers between now and May 2020, many retailers will not want to miss out on such sales. Indeed, several retailers surveyed in the Page Report indicated they would still be willing to buy appliances even if those appliances could no longer be manufactured by a date certain.
      Second, there simply are not enough Step 2 products available for sale at this time.
Retailers want to show a variety of appliances in their stores in hopes of having at least one product to cover every segment of the market. This means they will want to carry a variety of models (both pellet and stick wood models) across a range of prices and offer both catalytic and non-catalytic models. As noted above, there are few or no Step 2 models available for certain segments of the market. To further complicate matters, retailers typically have relationships with only a limited number of manufacturers. This means that some retailers may not be able to order exclusively Step 2 appliances even if they wanted to, because some manufacturers do not have any Step 2-compliant products at this time.
      Third, most consumers of residential wood burning appliances are price sensitive and
may not be willing to pay for Step 2 appliances. ... Step 2 appliances tend to cost significantly more than Step 1 appliances. Price sensitive customers might look for another retailer that has Step 1 products available for sale; switch to alternative sources of heat (e.g., gas); or forego changing out their older wood-burning appliance and instead continue to use their existing, higher emitting stoves, boilers, or furnaces. These are just a few of the reasons why some retailers nationwide may not be able to reduce or eliminate their purchases of Step 1 appliances and thus, they are at risk of having a lot of unsellable Step 1 appliances come May 2020 unless EPA revises the rule to add sell-through provisions.

Notably, another commenter (0128 p.2) did not take issue with the assertion that retailers may be declining to purchase devices that are not Step 2-compliant, but contended that this decline in purchases is in fact the desired outcome of the NSPS and that the sell-through "in effect subsidizes the worst performing technologies"  - 

      EPA's preamble says that the agency is proposing a sell-through because "it is reasonable to assume that retailers may become increasingly reluctant to purchase non-Step 2-compliant wood heating devices." But isn't that the desired outcome? Improving air quality and human health by increasing the efficiency of the residential wood heater sector is a principal goal of the original regulation. It is the intended result of the regulation to move retailers to focus inventory on Step 2-compliant devices. There is evidence that some retailers would likely switch to manufacturers that are producing 2020 compliant models. 
      
      Lamppa Manufacturing is one such manufacturer. Lamppa is a smaller manufacturer, and they are looking to connect with retailers. Their unit is very affordable at a retail price of $5,295 and is compliant with the 2020 Phase 2 standard. Tarm Biomass, who makes 2020 compliant wood and pellet boilers is getting calls from dealers looking for 2020 product. So are others who have 2020 compliant units. ... Competition in the marketplace is fundamental to consumers having access to more efficient and cleaner burning appliances. This proposal works against these market forces, and in effect subsidizes the worst performing technologies.

Response:
The Agency appreciates the information regarding inventory carryover, selling season length, and the decline in purchases of Step 1-compliant hydronic heaters by retailers. It is expected that retailers will reduce their purchases of Step 1-compliant devices as the Step 2 compliance date approaches, and focus purchases on Step 2-compliant devices. Please see the Agency responses in 2.3.2 and 3.1.2 above. After reviewing all comments and data submitted, we have determined that there is not an adequate rationale for a sell-through after the Step 2 compliance date.


5.1.4 Comment: Time required for EPA certification of hydronic heater models 
One manufacturer (0026) commented that it takes approximately 6 months after the research and development phase to receive certification. Another manufacturer (0067) indicated that it takes approximately 18 months to design and test models, and an additional 9 to 12 months to receive certification from EPA.

A hydronic heater manufacturer (0026 p.1) stated that  - 
      From the time our R&D team has a unit ready to test it can be up to 6 months before we receive certification. The factors that have a direct impact on the long lead time are the availability and scheduling of lab time, arranging and scheduling shipment of the unit, travel time, the scarcity and difficulty in securing wood that meets the test's strict requirements, the length of time the actual test takes (which can be up to a week), the lab's reporting preparation and review, the time it takes the EPA to review the report and issue a certification, and finally the preparation and ordering of the required labeling for the certified unit. Therefore, we cannot afford to test a unit until we are absolutely certain it will pass. We are not there yet, but hopefully soon.
Another manufacturer (0067 p.1) added that they did their best to prepare for the Step 2 period but are not close enough to having a full range of products that meet consumer demands. They estimate it will take 18 months to design and test a full range of models and then the EPA certification process will take another 9 to 12 months.
Response:
The Agency appreciates the information on the length of time it takes to design and test new models. This supports the Agency's position that five years is a sufficient time period to develop, certify and bring new wood heating devices to market, as we discuss in our response in 2.3.2. 

The EPA's Office of Enforcement and Compliance Assurance (OECA) understands the need of manufacturers to obtain their certifications promptly to manufacture their appliances and bring them to market without delay. There is currently no backlog of test reports waiting to be reviewed. 

In managing the National Wood Heater Program, EPA has a practice of processing all wood heater applications within 90 days, if not sooner. In some cases, it may not be feasible to meet the 90-day processing time frame because a manufacturer has not submitted a complete application package. Once the application is complete, the 90-day review period commences. A complete package includes certification test reports, certification of conformity, a quality assurance plan, and all supporting documentation required by the Wood Heater Rule. When processing an application, there may be occasions where the Agency will need to reach out to a manufacturer because the EPA may have questions regarding the certification test report and/or supporting documentation.

For the applications that the Agency processed in 2019, including those applications which may have been incomplete when initially submitted, the average amount of days that were needed to issue the certification from the date the applications were submitted was 41 days. Through compliance assistance, the EPA works with manufacturers when they have submitted an incomplete application. This ensures they understand the requirements for certification and what needs to be submitted to the Agency so they can obtain a certification in a timely manner. 

To address any potential issues regarding the capacity to timely review certification applications, the process for issuing the certifications had been revised to include third-party certifiers. Before OECA reviews the certification test reports, these independent third-parties have reviewed the reports and provided the certification of conformity that the tests were conducted pursuant to the regulatory requirements, i.e., the test reports are accurate and complete, and the reports show the applicable limits were met. 
 
5.2	Forced-Air Furnace Step 1 and Step 2 Statistics
Section 5.2 includes comments regarding the availability of forced-air furnace models that are designed and certified to the Step 2 standard, the availability of Step 1 and Step 2 models at retailers, inventory carryover and decline in purchases of Step 1-compliant models by retailers, and the time required for EPA certification of forced-air furnace model lines.

5.2.1 Comment: Step 2 forced-air furnace models designed and certified
Most commenters on this subject (0034, 0052, 0063, 0067, 0070) noted that very few forced-air furnace models have been certified to the Step 2 standard, although one commenter (0045) argued that enough Step 2 models are either certified or about to be certified to make the sell-through unnecessary. 

For example, a forced-air furnace manufacturer (0070 pp.3-4, 6-7) noted that  - 
      Our woodstoves, single burn rate woodstoves, and furnaces are all in the process of redesign and R&D testing now for 2020 certification. Without revenue from the final year and a half before the Step 2 emissions limits come into effect, it makes it very difficult to test and certify our entire product line. ... We are working with forced-air furnaces to try to meet the 2020 standard. ... We have not achieved a Step 2 compliant furnace despite our best efforts. We have put significant investment into research and development, so we are not sure what the final development cost will be, but we know it will be significantly more than the [REDACTED] that we have become accustomed to, if we are able to meet the Step 2 limit.
      As you are aware, there is only 1 forced-air furnace certified to the Step 2 standard. It should also be pointed out, that this product only met the Step 2 standard by testing to an EPA approved alternative test method, not the complete CSA test method that is designated in the 2015 Rule. This one product retails for $5,295(as found on an internet search). This retail price is well beyond what we have found the average consumer is willing to pay for this type of product... It is important to note we are the largest producer of wood burning forced-air furnaces in the industry, so this experience is well warranted.
The industry trade group (0063 p.14) agreed that there are not currently a wide range of Step 2-compliant forced-air furnaces  - 
      As described in the current proposal, EPA identified the percentage of wood heaters that were estimated to be meeting the Step 2 standards back in 2015 to...zero forced-air furnaces. Based on those percentages, EPA determined that it could not impose the Step 2 emission limits in 2015. Instead, after weighing all of the requisite factors under CAA Section 111, EPA determined that it would not require compliance with the Step 2 limits until May 2020, i.e., after giving manufacturers five years of lead time to bring models into compliance with those limits. Now, three-and-a-half years later, the percentages are not materially different: ...Of the 18 currently certified forced-air furnaces, only 1 (6%) is Step 2-certified. To this day, a very small percentage of either Subpart AAA or Subpart QQQQ appliances are currently Step 2-certified.
Other commenters (0034, 0052, 0067) also agreed that there are far fewer hydronic heaters and especially forced-air furnaces that have met Step 2 standards. One state regulatory agency (0034 pp.1-2), who expressed opposition to the sell-through for AAA, also recognized that relatively few QQQQ models had been certified  - 
      EPA's proposed two-year sell-through period for hydronic heaters and forced-air furnaces appears to have been based on EPA' s determination that relatively few models of these devices have been certified compliant with the 2015 NSPS Step 2 emission limits. An EPA-certified testing facility in Wisconsin confirmed that, to date, it has primarily certified wood and pellet stove units (wood heaters) as Step 2 compliant.
On the contrary, a western alliance of air agencies (0045 pp.7-8) asserted that a sell-through for forced-air furnaces is not necessary because  - 
      While it is true that there are fewer forced-air furnaces, there were also far fewer furnaces certified to Step 1 than either residential wood heaters or hydronic heaters. There are 19 certified appliances produced by seven manufacturers. Of those, one is certified to Step 2, another has an emission limit that would probably qualify it for Step 2. [cites USEPA Certified Forced-Air Furnaces, June 2018]. There is currently one under review by EPA [cites Mike Koerber, US EPA, Report to WESTAR Fall Meeting, September 19, 2018]. We are also aware of another that has completed certification testing and met the Step 2 standard [cites Personal communication from David Walters, HY-C Company. December 10, 2018]. As demonstrated by the fact that new hydronic heaters and forced-air furnaces are capable of passing the Step 2 emission limits well in advance of the May 2020 deadline, we believe that BSER for these categories is achievable and necessary to produce the emission reductions and associated public health benefits envisioned by the 2015 NSPS.
Response:
The Agency acknowledges that there are currently two Step 2-certified forced-air furnace model lines compared to 18 Step 1-certifed model lines (or 10 percent). Because the two Step 2-certified forced-air furnace models were tested for certification using an Agency-approved alternative test method for models that are electronically or thermostatically controlled, the Agency has decided to make this alternative method broadly applicable. This means that forced-air furnace manufacturers may use this test method without submitting a model-specific rationale to the EPA requesting permission to use the method. We expect that this broadly-applicable alternative test method for electronically or thermostatically controlled models will allow more forced-air furnaces  -  both small and large models  -  to certify to the Step 2 standard and become available to consumers in the near term. Regarding retail prices of forced-air furnaces, please see the Agency response in 3.3.3 above.
	
5.2.2 Comment: Step 1 and Step 2 forced-air furnace models available at retailers
Only one commenter provided a statement regarding the retail availability of Step 1 versus Step 2 forced-air furnace units. A forced-air furnace manufacturer (0070 pp.3-4, 6-7) explained that  - 
      As you are aware, there is only 1 forced-air furnace certified to the Step 2 standard. It should also be pointed out, that this product only met the Step 2 standard by testing to an EPA approved alternative test method, not the complete CSA test method that is designated in the 2015 Rule. This one product retails for $5,295 (as found on an internet search). This retail price is well beyond what we have found the average consumer is willing to pay for this type of product. They will simply turn to other central heating technologies that are more cost effective, and invest their available funds in more efficient electric, gas, geothermal, or alternate non-wood burning technology. We experienced that with 2 models we brought out into the marketplace in 2014 that were able to meet Step 1 PM emissions. These two models were a higher end version of a furnace relative to the balance of our forced-air furnace line of products. At the time they were more efficient and clean burning relative to the balance of our forced-air furnace line. We experienced that these 2 products simply would not sell just because of their price point in the marketplace, and that price was less than half of the current $5,295 retail of the only Step 2 furnace. We have determined and experienced if a forced-air furnace is priced at retail beyond $1,500, the consumer looks for alternative models or appliances with different heating sources (i.e. electric, gas, geothermal, and etc.) for their central heating requirements. It is important to note we are the largest producer of wood burning forced-air furnaces in the industry, so this experience is well warranted.
Response:
We appreciate the information provided on pricing and consumer demand at various price points. Regarding retail prices of forced-air furnaces, please see the Agency response in 3.3.3 above. The Agency acknowledges that there are currently two Step 2-certified forced-air furnace models compared to 18 Step 1-certifed models (or 10 percent). Because the two Step 2-certified forced-air furnace models were tested for certification using an Agency-approved alternative test method for models that are electronically or thermostatically controlled, the Agency has decided to make this alternative method broadly applicable. (See ALT-134 at https://www.epa.gov/emc/broadly-applicable-approved-alternative-test-methods#ATLs.) See also the Agency response in 5.2.1 above. 

5.2.3 Comment: Inventory carryover, selling season, and decline in purchases by retailers of Step 1 forced-air furnaces
Regarding forced-air furnaces, most commenters (0063, 0070, 0142) suggested that retailers tend to carryover about 30% of their inventory to the next year, and that they would likely continue to purchase Step 1-compliant devices (that are not Step 2-compliant) if guaranteed that the manufacturer(s) would mark-down or buy-back unsold units, or if a sell-through was granted. 

The industry trade group (0063 pp.16-17) asserted that - 
      EPA's current proposal details how "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." The fact that this is already happening so far before May 2020 should not have come as a surprise. When HPBA commented on EPA's 2014 proposal, one of HPBA's consultants with decades of experience in product development, sales, and marketing for many hearth industry manufacturers (Charlie Page) warned that the fear of being stuck with unsellable inventory could have profound implications throughout the supply chain:
            Many retailers will stop buying appliances they are not absolutely
sure that they can sell, and the manufacturers will lose the revenue
from the sales of these stoves; revenue that is needed to fund the
design, testing and the launch costs for new NSPS compliant
models. It has been reported that this is already happening in the
warm air furnace market and will be exacerbated unless EPA
grants adequate sell-through relief. 
      It is well known in this industry that "many retailers have unsold inventory at the end of the season" even though there is variation among how retailers do business, e.g., some keep substantial inventories at any given time while others only buy product when they need it. As noted in EPA's current proposal, many retailers have begun to take measures to try to ensure that they will have little or no Step 1 inventory stranded after May 2020 so that they can minimize or eliminate their financial losses.

A manufacturer of forced-air furnaces and wood heaters (0070 pp.4-6) commented that retailers have already begun ordering only Step 2-compliant devices and that a sell-through would allow retailers to continue purchasing Step 1-compliant devices for the 2019-2020 heating season  - 
      How the Retail Landscape for USSC [U.S. Stove Company] is Affected
      The EPA's current proposal states that "a substantial number of retailers are already reducing or 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 unsalable inventory".(83 Fed. Reg. at 61.578). Our company has direct experience with this for both our Subpart QQQQ products as well as our Subpart AAA. Reorders are not occurring at the end of the 2018-2019 heating season, and many of our major retail partners are saying that they will not take product for the 2019-2020 unless it is 2020 certified, for fear of being stranded with uncompliant product as of May 15, 2020. It is important to note that our major retailers do not differentiate between Subpart QQQQ and Subpart AAA products. To them these types of product are all wood heating and are treated as one category. Of course, end consumers (homeowners) do differentiate between the various types of stoves and furnaces and our experience has been that homeowners want a specific type of product (for instance, a non-catalytic wood stove instead of a pellet stove or a wood or pellet stove that goes into a living room instead of a furnace that goes in a basement) that falls within a specific price range. 
      USSC sells a majority of its products through mass merchant retailers. This includes Tractor Supply Company, Home Depot, Lowes, Menards and even Amazon. These companies display our wood heating products only during the first half of the heating season (with the exception of Amazon being an ecommerce retailer). It might be beneficial to note, these mass merchants begin to review their whole heating programs (product offerings) for the next season in October and November. The programs are being set (meaning finalized) in January with product orders beginning to be placed to us in March for the following heating season. This timeline clearly demonstrates why your final decision on this proposal is so critically needed now.
      Stores are typically set with wood heating product displays shortly prior to Labor Day, and after the New Year they begin to transition and replace heating product with spring lawn and garden items. Effectively 4 months on the showroom floor as a selling season. Like many other seasonal products, these retailers take advantage of the time of year consumers will be buying these kinds of products. Weather is a pivotal factor on the success or failure of the selling season. It is common for mass merchant retailers to carry-over somewhere between 25-35% of their annual purchases to the next year. This number translates to between [REDACTED] of USSC inventory that is typically carried over by the retailers. These merchants, often publicly traded, won't afford to be saddled with inventory they cannot sell the following year because of the May 2020 deadline. In order to maintain business relationships, USSC will either have to buy product back or pay for markdowns (payments or credits to retailers to be able to discount products as sale items at retail) of retail prices.
      We are seeing three major things happen with these retailers today.
      1. Retailers are telling us they will not buy any product, both Subpart QQQQ and Subpart AAA items, that is not 2020 certified for the 2019-2020 heating season. These retailers have told us they would continue to buy Step 1 product if retail sell-through was granted. Several retailers in this case have ceased any reorders for the 2018-2019 selling season and have already been requesting markdown money from our company now to offer sale prices on the existing Step 1 inventory, so that they can be sure that they will run out of it before the 2019-2020 selling season.
      2. Retailers will be drastically scaling back their orders so not to be saddled with 25-35% leftover inventory rolling into May 2020. These retailers have also told us they would continue to buy Step 1 product in normally projected volumes if retail sell-through was granted.
      3. Retailers are planning on purchasing normal amounts of Step 1 inventory in the hopes of a strong 2019-2020 selling season, but they will ultimately rely on USSC [US Stove Company] with markdown money and buybacks if their sales are not as expected. This is because these retailers simply do not have any choice for the markets that they specialize in (i.e. an example being extremely low-cost heating products), given the available step 2 products of today.
At the public hearing, a representative from the above manufacturer (0142 p.76) similarly asserted that  - 
      As you have or will hear from retailers, they can't afford to be stuck with stranded product beyond the 2020 deadline. Therefore, they are reducing or eliminating their purchases of Step 1 products. Let me be clear. We aren't talking about non-affected, non-technology driven products which we are requesting a sell-through provision. These are clean-burning products meeting the current Step 1 requirements. Although we, like most wood stove manufacturers, are working very hard to have Step 2 wood stoves ready for the 2020 deadline, we are still manufacturing and selling Step 1 products. As with the Step 1 warm air furnaces, retailers are hesitant as of today to purchase Step 1 products because of the likelihood of being caught with stranded inventory.
Another representative from this same manufacturer also commented at the public hearing (0142 pp.80-81) that  - 
      Without retail sell-through, our retail partners will naturally be stranded with inventory, despite best efforts to exhaust it. ... In the event of Step 1 carryover inventory into 2020, we most certainly will be required to buy back unusable/unusable Step 1 product in order to maintain business relationships with our customers. At this point, we have had large customers say if this sell-through is not granted, they will scale back 2019 orders and invest money into other categories. US Stove has been affected in every product type in this rule besides hydronic heaters. ...
A third representative from this same manufacturer also testified at the public hearing (0142 pp.71-73) that  - 

      Obviously, in a perfect world, all retailers would want to sell 100 percent sell-through at the end of the season, but this is not reality. Regardless of how strong the selling season is or how deep their end-of-season clearance sales are, there is always carryover. When I say carryover, I'm talking about the products for that season. Mass merchant retailers tend to carry over somewhere between 25 percent to 30 percent of their purchases for the season. This percentage is split up between QQQQ and AAA, as stated previously. Retailers look at these as the same products, just wood-burning appliances.
      
      It is hard to put an exact dollar value because it all depends on the company and their volume. But I would estimate easily among some of our top key customers, the carryover dollars we are talking about are in excess of $14 million. This inventory is what they typically use to start the seasonal setups going into the next season. If the retailers do not get an opportunity to sell through on these appliances, they become unsalable and ties up inventory dollars they are unable to spend on new product. We have had some retailers say if they cannot get sell-through relief, they would spend their dollars in other categories; in other words, potentially exit this category. ... In addition, if they cannot get an extended sell-through period and they do continue to buy Step 1 products, they will extremely limit their buys of current products for the 2019 selling season; therefore, will miss potential sales. Again, this may steer them away from the category and even hurt the manufacturers.

A representative from the industry trade group testified at the public hearing (0142 p.46) that "across the industry, retailers are slowing or ceasing purchases of Step 1 products due to the looming retail prohibition on May 15, 2020." On the contrary, however, this same industry trade group submitted a comment (0063 pp.18-19) stating that some retailers will continue to order Step 1 compliances  - 
      In addition, there are still some retailers that cannot afford to stop ordering Step 1
appliances altogether. This could be due to a number of reasons: First, to the extent Step 1 models are popular and in high demand by consumers between now and May 2020, many retailers will not want to miss out on such sales. Indeed, several retailers surveyed in the Page Report indicated they would still be willing to buy appliances even if those appliances could no longer be manufactured by a date certain.
      Second, there simply are not enough Step 2 products available for sale at this time.
Retailers want to show a variety of appliances in their stores in hopes of having at least one product to cover every segment of the market. This means they will want to carry a variety of models (both pellet and stick wood models) across a range of prices and offer both catalytic and non-catalytic models. As noted above, there are few or no Step 2 models available for certain segments of the market. To further complicate matters, retailers typically have relationships with only a limited number of manufacturers. This means that some retailers may not be able to order exclusively Step 2 appliances even if they wanted to, because some manufacturers do not have any Step 2-compliant products at this time.
      Third, most consumers of residential wood burning appliances are price sensitive and
may not be willing to pay for Step 2 appliances. ... Step 2 appliances tend to cost significantly more than Step 1 appliances. Price sensitive customers might look for another retailer that has Step 1 products available for sale; switch to alternative sources of heat (e.g., gas); or forego changing out their older wood-burning appliance and instead continue to use their existing, higher emitting stoves, boilers, or furnaces. These are just a few of the reasons why some retailers nationwide may not be able to reduce or eliminate their purchases of Step 1 appliances and thus, they are at risk of having a lot of unsellable Step 1 appliances come May 2020 unless EPA revises the rule to add sell-through provisions.
Response:
The Agency appreciates the information provided regarding inventory carryover, selling season length, and the potential decline in purchases by retailers of Step 1 forced-air furnaces. It is expected that retailers will reduce their purchases of Step 1-compliant devices as the Step 2 compliance date approaches, and focus purchased on Step 2-compliant devices. Please see our responses in 2.3.2, 3.1.2 and 5.2.1 above. After reviewing all comments and data submitted, we have determined that there is not an adequate rationale for a sell-through after the Step 2 compliance date.

5.2.4 Comment: Time required for EPA certification of forced-air furnace models
A manufacturer of forced-air furnaces and wood heaters (0070 pp.3-4) stated that the sell-through is necessary to allow for the 12-18 months required to develop new models from start to finish  - 

      We have worked very hard to maintain our key revenue streams in order to financially support product development leading up to 2020, but the huge feat of transitioning our product lines to meet 2020 PM emissions standards was next, and after all the prior testing we were already in Q1 of 2018. ... Our woodstoves, single burn rate woodstoves, and furnaces are all in the process of redesign and R&D testing now for 2020 certification. Without revenue from the final year and a half before the Step 2 emissions limits come into effect, it makes it very difficult to test and certify our entire product line. Just as important as revenue is time. With backlogs at EPA certified test laboratories continuing to get worse, time is also just as critical for certifying all residential wood heaters to the Step 2 standards. It typically takes 12-18 months to develop a new wood burning products from start to finish.
      
Response:
We appreciate the information on the length of time necessary to develop new wood burning devices from start to finish. This supports the Agency's position that five years is a sufficient time period to develop, certify and bring new wood heating devices to market, as we discuss in our response in 2.3.2.

5.2.5 Comment: Cost to certify forced-air furnace model line 
A manufacturer of forced-air furnaces and wood heaters (0070 p.4, 0142 pp.75-76) provided the following cost figures  -  

      Specifically looking at Forced-Air Furnaces, the current NSPS required us to take a non-affected facility and engineer multiple models first to the Step 1 requirements. For US Stove, that translates to 8 certificates. EPA has estimated the development costs, which in our experience is low at $162,000. By using that number, our 8 certificates would translate to $1,296,000. From our experience, a new EPA certified product ultimately costs our company [REDACTED], to test and get ready for the marketplace. Using an average of $350,000 per item that cost is more like [REDACTED] worth of development cost. We have not achieved a Step 2 compliant furnace despite our best efforts. We have put significant investment into research and development, so we are not sure what the final development cost will be, but we know it will be significantly more than the [REDACTED] that we have become accustomed to, if we are able to meet the Step 2 limit.

Response:
We appreciate the information on the costs associated with certifying Step 2-compliant forced-air furnace models. That said, this cost information does not support the need for a sell-through period, because the need for a sell-through period is an issue of the time needed to develop Step 2-certified models and bring them to market, not the cost of doing so.

5.3	Wood Heater Step 1 and Step 2 Statistics (AAA)
Section 5.3 includes comments regarding the availability of Step 2-compliant wood and pellet heater models regulated under subpart AAA, the availability of Step 1 and Step 2 models at retailers, the time needed to sell-off Step 1 models, inventory carryover, the decline in purchases of Step 1-compliant models by retailers, any shift to pellet heaters from cord wood heaters reported by the commenters, and the time required for EPA certification of model lines.

5.3.1 Comment: Step 2 AAA models designed and certified
Comments regarding the number of AAA wood heater models certified to the Step 2 standards included manufacturer statistics revealing numerous Step 2-compliant models (0032, 0142) and comments from regulatory agencies likewise pointing out that many Step 2-compliant wood heaters are already certified and available (0133, 0142, 0045, 0054/0200, 0068, 0073, 0074). On the other hand, comments also included assertions from industry claiming that percentage-wise there are relatively few Step 2-compliant models (0047, 0050, 0063). Comments also seemed to indicate that Step 2-compliant models were not readily available to distributors and retailers (0037, 0150), as discussed more in Section 5.3.2.

One manufacturer (0142 p.40) stated  - 
      Today we have 60 wood and pellet products that are Step 1 compliant and that are Step 2 certified. We began working on certifying these products nearly 24 months ago and have already invested over $6 million in 2020 product development and testing. We have an additional 33 Step 2 products in development now and 10 we will not be certifying due to the inventory risks that continue to push manufacturers' Step 1 products into 2020.
Another manufacturer (0142 pp.76-77) commented that they currently hold  -  
      43 certificates for wood stoves and pellet stoves meeting the Step 1 requirements. While we have many pellet stoves tested and ready for 2020, we are working very hard to certify our wood stove line for meeting Step 2 requirements.
Commenter (0142 p. 56) testified at the public hearing that their organization believes there are more residential wood heaters available to consumers that can meet the Step 2 standard than indicated in the NPRM, saying  - 
      EPA identifies a total of 74 models that qualify as Step 2 certified (based on the March 2018 EPA certified stove list). However, the total number of models meeting the Step 2 emission limit of 2 g/hour (or 2.5 g/hour when tested with cord wood) appearing on the EPA certified stove list from May 2018 totals more than 200.
This commenter (0142 pp.57-58) disagreed with the need for more time, saying that the difference between Step 2-certified models and Step 1 models that meet the Step 2 emission limits are largely administrative and these Step 1 models are expected to meet the more stringent standard if retested. The commenter notes that there are appliances that have completed NSPS certification testing, meet the Step 2 standard, and may have applied for certification, but are not yet certified, leading them to conclude that there will be a sufficient number of models available well before the May 2020 deadline.
An additional commenter (0073 p.2) agreed, stating that the market has already adjusted to meet the Step 2 standards with over 80 pellet, catalytic, and non-catalytic wood heater models available. 
One state regulatory agency (0068 p.15) similarly asserted that -

      As of October 2018, there are 578 distinct certified Step 1 and Step 2 compliant wood stoves listed on EPA's website. Of those, 100 (17.3%) are Step 2 compliant. Therefore, a sell-through is clearly not needed.
      
Another state regulatory agency (0074 pp.6-7) noted, echoed by commenter (0142 pp.56-57), that as of March 2018  -  
      
EPA, in the NPRM identifies 78 models (44 pellet and 34 cord wood) that meet the Step 2 standard (i.e. certified to the requirements in the 2015 rule). An analysis from an October 2018 certified stove list found that over 200 wood stove models from dozens of manufacturers met the Step 2 standard of 2 g/hr.
      
A third state regulatory agency (0052 p.2) commented that  - 
      As of October 2018, a total of 99 models of wood heaters including 44 pellet and 34 crib/cord stoves already meet the Step 2 requirements of 2.0 g/hr, as required under 40 CFR 60.532(b) or 60.532(c).
Another commenter (0045 pp.6-7), echoed by commenter (0054/0200 p.4), also highlighted the contention that many models have been 2020-certified  - 
      As of October 2018 there are 105 model lines from 37 manufacturers that meet the Step 2 standard for residential wood heaters (AAA)., ,  There is evidence that manufacturers have completed development of Step 2 appliances, and may have submitted their test results to EPA, but the products do not yet appear on the list of certified appliances. We have no way of knowing if manufacturers have units for which they have completed development and in-house testing but have not yet tested for certification. Finally, EPA has estimated that there would be no increase in cost to the consumer.
Likewise, another commenter (0133 p.2) asserted that EPA must review all 30-day testing notices and confirm that they have been received and made available to the public in order to ensure a complete and accurate dataset of Step 2-certified appliances going forward.
On the contrary, a manufacturer (0050 p.3) contended that there were relatively few Step 2-compliant wood heaters available  - 

      With only 19% (100 out of 526) of all Step 1 stoves meeting Step 2 (based on EPA website data), the consumer will have far less choices going into the next burn season who are looking to upgrade from their pre-1988 NSPS high emitting wood stove. Granting sell-through relief is a decision that will positively impact thousands of consumers and more than 2,500 retailers and 98 manufacturers in the United States.

Another manufacturer (0047 p.4) estimated that they will only be able to offer half the number of models that they do currently, which reduces their customer's choices. 

Likewise, the industry trade group (0063 p.8) claimed that "less than one-fifth of currently certified wood and pellet stoves are Step 2-certified -- and that some manufacturers have few or even zero Step 2-compliant products at this time -- sell-through is important to ensuring that enough manufacturers survive the increasingly stringent standards and can offer consumers a broad range of affordable appliances to choose from." This commenter (0063 p.13-14) stated  - 
      
      As described in the current proposal, EPA identified the percentage of wood
heaters that were estimated to be meeting the Step 2 standards back in 2015 to 70% of pellet stoves, 26% of wood stoves, 18% of hydronic heaters, and zero forced-air furnaces. Based on those percentages, EPA determined that it could not impose the Step 2 emission limits in 2015. Instead, after weighing all of the requisite factors under CAA Section 111, EPA determined that it would not require compliance with the Step 2 limits until May 2020, i.e., after giving manufacturers five years of lead time to bring models into compliance with those limits. Now, three-and-a-half years later, the percentages are not materially different:
      
 Of the 526 currently certified wood and pellet stoves, only 100 (19%) are Step 2-
certified. Specifically, 53 pellet stoves, 27 non-catalytic wood stoves, and 20
catalytic/hybrid wood stoves are currently Step 2-certified.
 Of the 129 currently certified hydronic heaters, only 10 (8%) are Step 2-certified.
 Of the 18 currently certified forced-air furnaces, only 1 (6%) is Step 2-certified.
      
      To this day, a very small percentage of either Subpart AAA or Subpart QQQQ appliances are currently Step 2-certified. Notably, 53 out of the 88 wood and pellet stove manufacturers who currently have one or more Step 1-certified appliances still do not have a single Step 2-certified appliance at this time. Of those 53, six manufacturers currently offer eight or more Step 1-certified appliances, yet they face a real risk that they will have nothing to offer for sale by May 2020. Finally, many of the manufacturers who currently have Step 2-certified stoves have not come close to certifying a full range of products to comply with the Step 2 standards, and some of the Step 2-certified stoves are not even ready for production yet.

One manufacturer (0032 p.1), however, disagreed with the above assertions, stating that the challenge of developing new 2020 EPA-compliant heaters has been greatly exaggerated and there are already dozens that are certified and available.

Whether this availability of Step 2-compliant models extends to the distributors and retailers is another question discussed more in Section 5.3.2. One distributor (0037 pp.3-4) commented that there are few 2020-compliant products available. They currently have 3 pellet units and 8 wood units that are 2020-certified available from the manufacturer. This distributor further claimed that "less than 15% to 20% of what is available is 2020-compliant (and several of those units just became available)." A retailer (0150 p.1) similarly claimed that "out of ... more than 100 products [in their showroom], less than 10% of them are 2020 certified units."

Response:
The Agency acknowledges that, as of March 5, 2020, there were 405 Step-1 certified wood heater and pellet fuel heater model lines and 196 Step 2-certified model lines (or 33 percent), according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). 

5.3.2 Comment: Step 1 and Step 2 AAA models available at retailers
Commenters generally indicated that only a small portion of the wood heater models available at retailers are Step 2-compliant (0033, 0037, 0110, 0122, 0125, 0150). For example, a distributor (0037) noted that he still must purchase Step 1 (2015) models because less than 15% to 20% of the models available are Step 2-compliant. Likewise, retailers noted that they have few or no 2020-compliant models in their showrooms and still needed to sell-off their Step 1-compliant models (0033, 0110, 0125, 0126, 0150). This was echoed by a manufacturer (0122, 0142) who noted that his visits to showrooms around the country revealed the lion's share of models available for sale to be Step 1 (2015) models still, not Step 2-compliant models.
One distributor (0037 pp.3-4) highlighted their concerns about the lack of 2020-compliant models, providing several statistics about the percentage of Step 1 versus Step 2 models available for sale currently  - 
      There is a huge impact because of uncertainty in the future and because of lack of available 2020 compliant models. If the rule doesn't change very quickly to allow distributors and retailers an extended sell-through period for 2015 compliant models, the impact on our company and retailers will be enormous. We currently have well over [REDACTED] in non-2020 compliant appliances in our building. Over the past year or more, we have not had a choice, we needed inventory to supply the market. We had to continue purchasing 2015 models since less than 15% to 20% of what is available is 2020 compliant (and several of those units just became available)... The dealers we work with can display from as few as 15 total units to as many as 125+ in their showrooms. Most fall in the average of 40 to 80 units displayed.

      o Right now, most dealers are working to sell-off as many of their wood or pellet
appliances that don't meet 2020 to reduce their exposure as they move into 2019. The challenge is the limited number of 2020 compliant product available to replace what is being sold off, thus leaving big gaps on showroom floors. This impacts sales at all levels, if they don't show it, they won't sell it.

      o The other concern is the cost of selling off displays and then having to replace them once 2020 compliant products are finally available. The cost of this process is
considerable. Display units typically have to be discounted between 15% to as much as 50% and this kills dealers' margin in both the short term and long term as they get less dollars for displays sold and pay more for new units once available for display. It's a costly double-edged process.

      o Between potentially stranded inventory losses and the costs associated with liquidating and replacing display models, retailers could be financially impacted on a long-term basis before they can recoup.
      
      If the rule remains as it is currently, and we all have to meet the May 15th, 2020 sales prohibition deadline, the financial impact on our business could easily be $[REDACTED] to as much as $[REDACTED]. I can't begin to estimate what the financial impact would be to manufacturers and retailers, but I can assure you it would be significant.

One retailer (0033 p.1) commented that they currently have 36 wood and pellet heaters on display and in stock, none of which meet the 2020 NSPS deadline. Another retailer (0110 p.2) stated that they currently have 65 wood/pellet heaters on display and in backstock that are not compliant with 2020 standards. A third retailer (0125 p.1) noted that of the 56 models they offer, only 14 different models are Step 2, 2020-compliant. Another retailer (0126 p.1) commented that they still have 55 Step 1 units in inventory that will need to be sold before the 2020 deadline.

Likewise, another retailer (0150 p.1) commented that  - 
      
      As of this point, out of the 58 woodburning products I have on my showroom floor, only 5 of them meet the 2020 standard. I typically sell over 80 woodburning products a year, and most of these are in the fall and early winter. With the lack of sell through cutoff happening in May of 2020, we will have to make sure we are selling off our woodburning products in the winter months of late 2019 and early 2020. Because we have so many stoves in our showroom and we try to keep "one to show, one to go" we have over 100 products in stock at one time. This is spread out over seven different manufacturers, not one of which has certified more than a fraction of their woodburning lineup to the 2020 standard. Out of this more than 100 products, less than 10% of them are 2020 certified units.

Another manufacturer (0122 pp.1, 0142 pp.9-10) commented that -- 

      From my visits to showrooms and retail stores across the country, there are at least 20 wood and pellet heaters on display in each location. With 4,000 or more retailers, that pencils out to 80,000 plus wood and pellet heaters on display, the lions share not being 2020 compliant. Retailers also carry additional stock in the back room or in their warehouses. That means there are 80,000 or more, mostly step one wood and pellet heaters that must be sold in the next 17+ months.
      
The same manufacturer (0122 pp.5-6) commented that they asked dealers to confirm how many heaters they have in inventory that do not meet 2020 compliance requirements. A total of 1,395 from this manufacturer are at dealerships around the country and are not 2020-compliant. 

Response:
As of March 5, 2020, there were 405 Step 1-certified wood heater and pellet fuel heater model lines and 196 Step 2-certified (33 percent) model lines, according to the EPA Certified Wood Heater Database (available at https://www.epa.gov/compliance/epa-certified-wood-heater-database). Further, as discussed above in response to comment 2.3.2, Step 2-certified models have been available for some time. Commenters have not provided EPA with information showing that Step 2 models are available to some retailers and not to others. See above response to comment 5.1.2. Thus, retailers will have had 5 years to manage their inventories by the May 2020 deadline when Step 1 models may no longer be sold. 

5.3.3 Comment: Time needed to sell-off Step 1 models
One retailer (0110 pp.1-2) noted that it would require 1-year to sell-off their Step 1-compliant wood heaters. 

Note that other retailers submitted responses to this question to EPA as CBI, and also responded to a question regarding the timeframe between the date of purchase from manufacturers to when it is sold at retail to a customer. 

Response:
The Agency appreciates this information on the length of time needed to sell-off Step 1 models. See our responses in 2.3.2 and 3.1.2 above.

5.3.4 Comment: Inventory carryover, selling season, and decline in purchases by retailers of Step 1 AAA devices
Many commenters  -  including retailers, distributors, manufacturers and the industry trade group  -  contended that retailers were already declining to purchase Step 1-compliant AAA wood heaters (i.e., devices that are not Step 2-compliant) and that a sell-through was necessary to allow retailers to continue purchasing Step 1-compliant devices (0110, 0037, 0047, 0050, 0051, 0063, 0070, 0094, 0114, 0117, 0123, 0125, 0126, 0127, 0142, 0169). Some commenters (0094, 0110, 0117, 0125) indicated that pre-buying of Step 1-compliant devices from manufacturers has stopped, unless they are presold to a customer.

In addition, the issue of inventory carryover, or the amount of time between when a retailer purchases a model from the manufacturer (or distributor) and sells the model to a consumer, is related to the contention that retailers are declining to purchase Step 1-compliant devices and comments often addressed both issues interchangeably. Retailers claimed that the time period from purchase to sale varied anywhere from 1 month to 4 years, and multiple commenters asserted generally long lead times prior to selling a device in inventory, as long as 3 to 4 selling seasons/years (0044, 0110, 0114, 0117, 0123, 0125, 0127, 0169).

One retailer (0125 p.1) commented that they have already begun scaling way back on orders placed for the 2019-2020 selling season. They historically stock an average of 1700 units and pre-book orders to get the best price from the supplier, but cannot do that this year because they cannot buy any product that is not 2020-compliant.

Another retailer (0169 p.1) indicated they have already started scaling back orders for Step 1 products, saying  - 

      Historically, I have stocked, on average, 16 units (comprising of a variety of models produced by Quadrifire) in any given heating season. This year, I am only stocking 10 units of the aforementioned because I know that I will not be able to sell 2015- compliant model lines after May 15, 2020. It normally takes me 3 selling seasons, and sometimes much longer to sell leftover products, on average, so we I have already been scaling back orders for Step 1 products.
      
A third retailer (0123 p.1) commented that they are declining to purchase any more Step 1-compliant heaters for their inventory and they believe most other retailers are doing the same, because they worry about not being able to sell them before the May 15, 2020 deadline.

A fourth retailer (0127 pp.1-2) explained that  - 

      At this date we still have in inventory 55 units that will have to be sold before the 2020 deadline. If other dealer are like us and have a large inventory of currently approved, but not non 2020 certified units, at this point we will not be purchasing inventory from manufacturers that do not meet the deadline. This is going to adversely affect the manufacturer and will cause dealers to possibly dump inventory. Usually we place early buy orders that allow us extra discounts and the manufacturers plenty of time to build inventory and ship products. The factories depend on these orders to keep the factories running. 2020 will adversely affect small business that operate on a seasonal basis. It is also very stressful to accomplish this. Our selling season is roughly September thru February. This could be a tall order to completely sell thru the inventory by deadline. Dumping will of course affect profit levels in turn tax revenue that goes to the government.
      
The industry trade group (0063 pp.16-17) asserted that - 
      EPA's current proposal details how "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." The fact that this is already happening so far before May 2020 should not have come as a surprise. When HPBA commented on EPA's 2014 proposal, one of HPBA's consultants with decades of experience in product development, sales, and marketing for many hearth industry manufacturers (Charlie Page) warned that the fear of being stuck with unsellable inventory could have profound implications throughout the supply chain:
            Many retailers will stop buying appliances they are not absolutely
sure that they can sell, and the manufacturers will lose the revenue
from the sales of these stoves; revenue that is needed to fund the
design, testing and the launch costs for new NSPS compliant
models. It has been reported that this is already happening in the
warm air furnace market and will be exacerbated unless EPA
grants adequate sell-through relief. 
      It is well known in this industry that "many retailers have unsold inventory at the end of the season" even though there is variation among how retailers do business, e.g., some keep substantial inventories at any given time while others only buy product when they need it. As noted in EPA's current proposal, many retailers have begun to take measures to try to ensure that they will have little or no Step 1 inventory stranded after May 2020 so that they can minimize or eliminate their financial losses.

Another commenter (0051 p.2) stated that "Absent the transition window provided by a sell-through time frame, retailers have already begun to pull back on orders for Step 1 products out of concern they will end up with stranded inventory that they can neither sell nor give away after the May 2020 effective day for Step 2."

One manufacturer (0094 p.1-3) commented and others (0037) agreed that  - 
      With no sell-through extension (beyond May 15, 2020) for wood stoves and inserts, this creates a significant decline in our Early Buy Program's wood order flow making our production much more speculative (building to a forecast instead of to actual Early Buy orders). Our dealers and distributors will be reluctant to speculate and to bring in wood inventory other than what is sold. We are forecasting up to a REDACTED% decline in our wood stove and insert Early Buy order flow for 2019 wood sales... From a manufacturer's perspective, a May 2020 compliance deadline does not mean we will have until May 2020 to develop compliant products. We effectively needed to have May 2020-compliant products ready to sell in 2018 because some retailers and distributors have been telling us that is all they will buy from 2018 onwards.
Likewise, another manufacturer (0047 pp.3-4) stated that retailers have begun selling off their showroom models and giving space to 2020-compliant products, meaning they will sell next to none of this manufacturer's 2015-compliant products in 2019. They also noted that the lack of pre-season purchases due to the impending 2020 deadline impacted their profit margins and will likely ultimately increase the cost of the products.
Another manufacturer of forced-air furnaces and wood heaters (0070 pp.4-6) commented that retailers have already begun ordering only Step 2-compliant devices and that a sell-through would allow retailers to continue purchasing Step 1-compliant devices for the 2019-2020 heating season  - 
      How the Retail Landscape for USSC [U.S. Stove Company] is Affected
      The EPA's current proposal states that "a substantial number of retailers are already reducing or 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 unsalable inventory".(83 Fed. Reg. at 61.578). Our company has direct experience with this for both our Subpart QQQQ products as well as our Subpart AAA. Reorders are not occurring at the end of the 2018-2019 heating season, and many of our major retail partners are saying that they will not take product for the 2019-2020 unless it is 2020 certified, for fear of being stranded with uncompliant product as of May 15, 2020. It is important to note that our major retailers do not differentiate between Subpart QQQQ and Subpart AAA products. To them these types of product are all wood heating and are treated as one category. Of course, end consumers (homeowners) do differentiate between the various types of stoves and furnaces and our experience has been that homeowners want a specific type of product (for instance, a non-catalytic wood stove instead of a pellet stove or a wood or pellet stove that goes into a living room instead of a furnace that goes in a basement) that falls within a specific price range. 
      USSC sells a majority of its products through mass merchant retailers. This includes Tractor Supply Company, Home Depot, Lowes, Menards and even Amazon. These companies display our wood heating products only during the first half of the heating season (with the exception of Amazon being an ecommerce retailer). It might be beneficial to note, these mass merchants begin to review their whole heating programs (product offerings) for the next season in October and November. The programs are being set (meaning finalized) in January with product orders beginning to be placed to us in March for the following heating season. This timeline clearly demonstrates why your final decision on this proposal is so critically needed now.
      Stores are typically set with wood heating product displays shortly prior to Labor Day, and after the New Year they begin to transition and replace heating product with spring lawn and garden items. Effectively 4 months on the showroom floor as a selling season. Like many other seasonal products, these retailers take advantage of the time of year consumers will be buying these kinds of products. Weather is a pivotal factor on the success or failure of the selling season. It is common for mass merchant retailers to carry-over somewhere between 25-35% of their annual purchases to the next year. This number translates to between [REDACTED] of USSC inventory that is typically carried over by the retailers. These merchants, often publicly traded, won't afford to be saddled with inventory they cannot sell the following year because of the May 2020 deadline. In order to maintain business relationships, USSC will either have to buy product back or pay for markdowns (payments or credits to retailers to be able to discount products as sale items at retail) of retail prices.
      We are seeing three major things happen with these retailers today.
      1. Retailers are telling us they will not buy any product, both Subpart QQQQ and Subpart AAA items, that is not 2020 certified for the 2019-2020 heating season. These retailers have told us they would continue to buy Step 1 product if retail sell-through was granted. Several retailers in this case have ceased any reorders for the 2018-2019 selling season and have already been requesting markdown money from our company now to offer sale prices on the existing Step 1 inventory, so that they can be sure that they will run out of it before the 2019-2020 selling season.
      2. Retailers will be drastically scaling back their orders so not to be saddled with 25-35% leftover inventory rolling into May 2020. These retailers have also told us they would continue to buy Step 1 product in normally projected volumes if retail sell-through was granted.
      3. Retailers are planning on purchasing normal amounts of Step 1 inventory in the hopes of a strong 2019-2020 selling season, but they will ultimately rely on USSC with markdown money and buybacks if their sales are not as expected. This is because these retailers simply do not have any choice for the markets that they specialize in (i.e. an example being extremely low-cost heating products), given the available step 2 products of today.
At the public hearing, a representative from the above manufacturer (0142 p.76) similarly asserted that  - 
      As you have or will hear from retailers, they can't afford to be stuck with stranded product beyond the 2020 deadline. Therefore, they are reducing or eliminating their purchases of Step 1 products. Let me be clear. We aren't talking about non-affected, non-technology driven products which we are requesting a sell-through provision. These are clean-burning products meeting the current Step 1 requirements. Although we, like most wood stove manufacturers, are working very hard to have Step 2 wood stoves ready for the 2020 deadline, we are still manufacturing and selling Step 1 products. As with the Step 1 warm air furnaces, retailers are hesitant as of today to purchase Step 1 products because of the likelihood of being caught with stranded inventory.
Another representative from this same manufacturer also commented at the public hearing (0142 p.80-81) that  - 
      Without retail sell-through, our retail partners will naturally be stranded with inventory, despite best efforts to exhaust it. Knowing that most of our customers carry up to 30 percent of their inventory, US Stove could be looking at an excess of $14 million in buybacks without retailers scaling back 2019 purchases. We are only in 2018 and as a manufacturer, we are already being asked by our customers to support sell-down of Step 1 inventory. But due to the nature of mass merchant retail, we will be required to buy back stranded inventory. Wood heating appliances can be in a store's inventory for more than two years, based on factors such as weather, energy prices, and overall strength of the economy, just to name a few. In the event of Step 1 carryover inventory into 2020, we most certainly will be required to buy back unusable/unusable Step 1 product in order to maintain business relationships with our customers. At this point, we have had large customers say if this sell-through is not granted, they will scale back 2019 orders and invest money into other categories. US Stove has been affected in every product type in this rule besides hydronic heaters. Yes, we have and are developing 2020 product for AAA.
A third representative from this same manufacturer also testified at the public hearing (0142 pp.71-73) that  -  

      Obviously, in a perfect world, all retailers would want to sell 100 percent sell-through at the end of the season, but this is not reality. Regardless of how strong the selling season is or how deep their end-of-season clearance sales are, there is always carryover. When I say carryover, I'm talking about the products for that season. Mass merchant retailers tend to carry over somewhere between 25 percent to 30 percent of their purchases for the season. This percentage is split up between QQQQ and AAA, as stated previously. Retailers look at these as the same products, just wood-burning appliances.
      
      It is hard to put an exact dollar value because it all depends on the company and their volume. But I would estimate easily among some of our top key customers, the carryover dollars we are talking about are in excess of $14 million. This inventory is what they typically use to start the seasonal setups going into the next season. If the retailers do not get an opportunity to sell through on these appliances, they become unsalable and ties up inventory dollars they are unable to spend on new product. We have had some retailers say if they cannot get sell-through relief, they would spend their dollars in other categories; in other words, potentially exit this category. ... In addition, if they cannot get an extended sell-through period and they do continue to buy Step 1 products, they will extremely limit their buys of current products for the 2019 selling season; therefore, will miss potential sales. Again, this may steer them away from the category and even hurt the manufacturers.

One manufacturer of wood heaters (0050 p.1) went as far as contending that "[w]ithout this extension for sell through, the wood and pellet hearth business will come to a halt in the next few months. Cancellation of orders of these products started occurring in late 2018 and is substantial already."

Regarding inventory carryover or lead times prior to retail sale, retailers estimated that inventory carryover ranges anywhere from 1 month to 4 years, but generally at least 2 years. For example, one retailer (0044 p.1) commented  -- 

      ...long lead times are a part of planning our inventory so we have adequate supply to keep generating revenue. It is not uncommon for me to have inventory carryover in the range of 3-4 years or more on some appliances before I am able to find a perfect match between customer and a particular item carried in inventory. Consequently, I carry in excess of $600,000 in inventory at any given point in time.
      
Another retailer (0123 p.1) said that they sell most heaters within 2 years of purchasing them, but some unique or low volume wood heaters can take up to 4 years to sell. Likewise, a third retailer (0125 p.1) commented that it normally takes them 2 to 3 selling seasons to sell leftover products. A fourth retailer (0110 pp.1-2) commented that it takes them 1 month to 4 years. A fifth retailer (0114 p.1) stated that some inventory items have taken as long as 2 or more years to be sold.

A retailer (0110 p.2) noted that they have "... declined all pre-buys from our manufacturers of wood stoves and inserts. Only making purchases of stove(s) presold to a customer. We are not purchasing stoves for displays or back stock." This same retailer stated that it requires 1 month to 4 years to sell a wood heater at 0, but concluded a 1-year time period would be necessary/ sufficient to sell off their Step 1 compliant heaters. However, regarding the Step 1 compliant models, this retailer (0110 p.2) explained that they felt "...it necessary to put all display models and back stock on sale to make sure that we would not have any stoves/inserts on hand that would not meet 2020 deadline. We sold stoves at a 10%-30% discount. Well below our normal margin. 50+ stoves and inserts were sold during this sale." Likewise, another retailer (0117 p.1) concluded that if they buy units on a pre-buy basis, it can take a few years to sell them. However, they are not pre-buying due to the uncertainty of this regulation.

A representative from the industry trade group testified at the public hearing (0142 p.46) that "across the industry, retailers are slowing or ceasing purchases of Step 1 products due to the looming retail prohibition on May 15, 2020." On the contrary, however, this same industry trade group submitted a comment (0063 pp.18-19) stating that some retailers will continue to order Step 1 compliances  - 
      In addition, there are still some retailers that cannot afford to stop ordering Step 1
appliances altogether. This could be due to a number of reasons: First, to the extent Step 1 models are popular and in high demand by consumers between now and May 2020, many retailers will not want to miss out on such sales. Indeed, several retailers surveyed in the Page Report indicated they would still be willing to buy appliances even if those appliances could no longer be manufactured by a date certain.
      Second, there simply are not enough Step 2 products available for sale at this time.
Retailers want to show a variety of appliances in their stores in hopes of having at least one product to cover every segment of the market. This means they will want to carry a variety of models (both pellet and stick wood models) across a range of prices and offer both catalytic and non-catalytic models. As noted above, there are few or no Step 2 models available for certain segments of the market. To further complicate matters, retailers typically have relationships with only a limited number of manufacturers. This means that some retailers may not be able to order exclusively Step 2 appliances even if they wanted to, because some manufacturers do not have any Step 2-compliant products at this time.
      Third, most consumers of residential wood burning appliances are price sensitive and
may not be willing to pay for Step 2 appliances. ... Step 2 appliances tend to cost significantly more than Step 1 appliances. Price sensitive customers might look for another retailer that has Step 1 products available for sale; switch to alternative sources of heat (e.g., gas); or forego changing out their older wood-burning appliance and instead continue to use their existing, higher emitting stoves, boilers, or furnaces. These are just a few of the reasons why some retailers nationwide may not be able to reduce or eliminate their purchases of Step 1 appliances and thus, they are at risk of having a lot of unsellable Step 1 appliances come May 2020 unless EPA revises the rule to add sell-through provisions.

Notably, another commenter (0128 p.2) did not take issue with the assertion that retailers may be declining to purchase devices that are not Step 2-compliant, but contended that this decline in purchases is in fact the desired outcome of the NSPS and that the sell-through "in effect subsidizes the worst performing technologies"  - 

      EPA's preamble says that the agency is proposing a sell-through because "it is reasonable to assume that retailers may become increasingly reluctant to purchase non-Step 2-compliant wood heating devices." But isn't that the desired outcome? Improving air quality and human health by increasing the efficiency of the residential wood heater sector is a principal goal of the original regulation. It is the intended result of the regulation to move retailers to focus inventory on Step 2-compliant devices. There is evidence that some retailers would likely switch to manufacturers that are producing 2020 compliant models. 
      
      Lamppa Manufacturing is one such manufacturer. Lamppa is a smaller manufacturer, and they are looking to connect with retailers. Their unit is very affordable at a retail price of $5,295 and is compliant with the 2020 Phase 2 standard. Tarm Biomass, who makes 2020 compliant wood and pellet boilers is getting calls from dealers looking for 2020 product. So are others who have 2020 compliant units. ... Competition in the marketplace is fundamental to consumers having access to more efficient and cleaner burning appliances. This proposal works against these market forces, and in effect subsidizes the worst performing technologies.

Note that retailers also submitted responses to EPA as CBI regarding when they will likely no longer purchase Step 1 heaters from manufacturers. 

Response:
We appreciate these comments and information on inventory carryover, the length of the selling season, and the decline in purchases by retailers of Step 1-compliant wood heaters. It is expected that retailers will reduce their purchases of Step 1-compliant devices as the Step 2 compliance date approaches, and focus purchases on Step 2-compliant devices. See our responses in 2.3.2 and 3.1.2 above. After reviewing all comments and data submitted, we have determined that there is not an adequate rationale for a sell-through after the Step 2 compliance date.

5.3.5 Comment: Shift to pellet heaters from cord wood heaters
Commenters (0110, 0114, 0117, 0123, 0126, 0127) did not predict a shift from cord wood heaters to pellet heaters, primarily because these commenters asserted that customers valued the low cost of cord wood relative to pellets.
For example, one retailer (0123 p.1) went as far as contending that  - 
      No, there has not been a shift to pellet heaters. Pellet heater sales have been declining for years. We barely sell any at all. I don't foresee pellet heater sales increasing in the future. Pellet heaters are complex, unreliable and usually cost customers more to heat with compared to wood or natural gas/propane heaters.
Likewise, other retailers (0110, 0114, 0117, 0126, 0127) commented that they do not think there will be a shift to pellet heaters, because wood heater customers appreciate the low cost of wood and therefore will not move to pellet models. One commenter (0127 p.2) asserted that, due to the low cost of wood (as compared to pellets presumably), customers will likely hold onto their old heaters rather than switch to pellet heaters  - 
      I do not think there will be a shift to pellet heaters, the low cost of wood in our area will keep that from happening. Existing consumers will tend to hold onto their old stoves. The time to sell thru the existing inventory of wood stoves can vary from season to season and styles of stoves that are popular vary from year to year.
      Response:
The Agency appreciates this information that multiple commenters have not seen and do not predict a shift from cord wood heaters to pellet heaters. In any event, EPA notes that there are both cord wood heaters and pellet fuel heaters that have been certified to meet the Step 2 standards, and so consumers will have the option of buying either type of heater, based on their preference. 

5.3.6 Comment: Time required for EPA certification of AAA models 
Several commenters (0050, 0070, 0142) expressed concern regarding longer wait times for testing laboratories and for EPA certification.

One manufacturer (0050 p.2) stated concern over the certification timeline due to longer lead times to secure testing as well as longer wait times for EPA's certificates of compliance  -  

      We are seeing the lead time for securing testing at an approved test lab increasing. We used to be able to secure testing time within 30 days, however, of late that has moved out to 45 days and will likely continue to grow. With the number of models HHT still must test, and industry as a whole, the lead time to securing testing will likely get longer making it even harder for manufacturers to get Step 2 product certified prior to May 2020.
      
      To compound the issue, the certificates of compliance issuance lead times are also increasing. The EPA goal is to issue a certificate of compliance in 90 business days (16 weeks) once they acknowledge receipt of the submittal package. On average, we have been getting our certificates in 60 days (12 weeks), however, prior to the government shut-down, we were not even getting acknowledgement of the package being received which further delays the 90-day certificate timeline.

Another manufacturer (0070 pp.3-4) echoed those concerns, stating  -  

      Now testing products for 2020, we have to start out by retesting all of our existing wood pellet stoves to the new 2015 method, even though their pre-2015 test method emissions limits fall below the new 2.0 g/hr limit. We have tested or are in the process of testing, all but 3 pellet models for the new Step 2 standards. Our woodstoves, single burn rate woodstoves, and furnaces are all in the process of redesign and R&D testing now for 2020 certification. Without revenue from the final year and a half before the Step 2 emissions limits come into effect, it makes it very difficult to test and certify our entire product line. Just as important as revenue is time. With backlogs at EPA certified test laboratories continuing to get worse, time is also just as critical for certifying all residential wood heaters to the Step 2 standards. It typically takes 12- 18 months to develop a new wood burning products from start to finish. [REDACTED] To put these numbers into perspective, we currently have 16 active woodstove certificates on the EPA list meeting Step 1 that we sell today in the marketplace. These are 16 certificates, we have multiple sub-models on these certificates. These are models we have the potential of losing needed revenue in the upcoming heating season due to lack of sell-through.
      
Another manufacturer (0142 p.40) stated that "certifying and qualifying 2020 units takes approximately ten months, and certifying a wood product takes about 15 months."
Regarding the scheduling and related cost of testing, a state regulatory agency (0034 pp.1-2) stated that  - 
      An EPA-certified testing facility in Wisconsin confirmed that, to date, it has primarily certified wood and pellet stove units (wood heaters) as Step 2 compliant. This testing facility also noted that the number of tests conducted before a wood heating device is certified as Step 2 compliant has been highly variable. Certification costs can become expensive if several iterative tests ($10,000/unit) are required. Generally, the testing facility has found that manufacturers with their own research and development (R&D) departments have achieved certification with a fewer number of tests relative to manufacturers lacking an R&D department, which tend to be small businesses. 
      Response:
We appreciate the responses and information provided regarding the time needed to develop new wood heater models. This supports the Agency's position that five years is a sufficient time period to develop, certify, and bring new wood heating devices to market, as we discuss in our response in 2.3.2.

The EPA's Office of Enforcement and Compliance Assurance (OECA) understands the need of manufacturers to obtain their certifications promptly to manufacture their appliances and bring them to market without delay. There is currently no backlog of test reports waiting to be reviewed. 

In managing the National Wood Heater Program, EPA has a practice of processing all wood heater applications within 90 days, if not sooner. In some cases, it may not be feasible to meet the 90-day processing time frame because a manufacturer has not submitted a complete application package. Once the application is complete, the 90-day review period commences. A complete package includes certification test reports, certification of conformity, a quality assurance plan, and all supporting documentation required by the Wood Heater Rule. When processing an application, there may be occasions where the Agency will need to reach out to a manufacturer because the EPA may have questions regarding the certification test report and/or supporting documentation. 
 
For the applications that the Agency processed in 2019, including those applications which may have been incomplete when initially submitted, the average amount of days that were needed to issue the certification from the date the applications were submitted was 41 days. Through compliance assistance, the EPA works with manufacturers when they have submitted an incomplete application. This ensures they understand the requirements for certification and what needs to be submitted to the Agency so they can obtain a certification in a timely manner. 

To address any potential issues regarding the capacity to timely review certification applications, the process for issuing the certifications had been revised to include third-party certifiers. Before OECA reviews the certification test reports, these independent third-parties have reviewed the reports and provided the certification of conformity that the tests were conducted pursuant to the regulatory requirements, i.e., the test reports are accurate and complete, and the reports show the applicable limits were met.

6.0	Support for Retaining or Revising Pellet Fuel Requirements
Section 6 presents comment excerpts and summaries regarding retaining and revising the existing pellet fuel requirements.

6.1	Pellet Requirements Should Be Retained
Section 6.1 includes comments contending that the pellet requirements should be retained and why these requirements are important.

6.1.1 Comment: Pellet requirements are needed to ensure consistent operation and emissions performance to safeguard public health
Multiple commenters expressed the need for pellet requirements to ensure consistent operation and emissions performance to minimize pollution and safeguard public health (0034, 0052, 0056, 0074, 0142).

One commenter (0052 p.3) supported retaining pellet fuel requirements  - 
      Pursuant to the provisions in 40 CFR 60.532(e) and 60.5474(e), ADEC [Alaska Department of Environmental Conservation] recommends that the minimum quality pellet fuel requirements should be retained for consistency in the level of quality. However, ADEC supports the recommendation in the 2013 report of the New York State Energy and Research Development Authority (NYSERDA) that enforceable standards should be established for elemental compositions of commercial wood pellets to reduce toxic air emissions.
Another commenter (0034 p.2) similarly asserted that  - 
      As WDNR [Wisconsin Department of Natural Resources] noted in its May 2, 2014 comments to EPA on the proposed 2015 NSPS, EPA should ensure that compliance assurance performance testing for pellet fuel is as representative of in-field operation and performance as possible, considering operation parameters such as fuel species, fuel shape and bum categories.

Likewise, a commenter (0056 pp.2-3) stated that  - 

      MassDEP supports retaining fuel quality standards for pellets sold for residential use, which ensures consistent operations and emissions performance from pellet appliances and helps keep contaminated pellets out of the market. A NESCAUM study of wood pellets found that without fuel quality standards, pellets can contain significant levels of metals and other contaminants that can increase toxic emissions and potentially damage equipment.

Another commenter (0074 p.7) similarly stated that  - 
      Oregon DEQ supports establishing enforceable U.S. standards for elemental compositions of commercial wood pellets and chips that are necessary to ensure public health. All bagged pellets sold should be qualified by the Pellet Fuel Institute (PFI) Standards Program.
      A study of 23 wood chip samples and 132 wood pellet samples manufactured in the United States and Canada conducted by the New York State Energy Research and Development Authority in 2013  found unusually high concentrations of heavy metals including chromium, arsenic, and copper in some samples. The study found those elements attributable to waste wood and other treated wood products that had been converted to pellet fuel. Based on these test results, establishing enforceable U.S. standards for elemental compositions of commercial wood pellets and chips would help exclude inappropriate materials and promote cleaner combustion.
Consistent with the above comments, during the public hearing, another commenter (0142 p.24) testified that their organization "supports implementation of fuel quality standards for all pellets sold for residential use to specifically: Ensure consistent operations and comparable emissions performance from pellet appliances; Protect against contaminated pellets in the market; and Provide some assurance that the pellet heater's performance in the home is consistent with the certification test."
One commenter (public testimony 0142 pp.24-25) asserted and concluded that "if EPA removes the fuel quality standards, pellet appliances must be tested and certified using the worst-case fuel. So, if EPA removes the pellet fuel standards, we believe that EPA needs to ensure that the appropriate performance is being tested and, therefore, we request that EPA require testing with high ash and fine content fuel."

Response:
The Agency agrees that some pellet requirements are needed to ensure consistent operation and emissions performance to safeguard public health. The EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f). Specifically, the EPA is including the requirement that the pellet grading done under a licensing agreement with a third-party organization include a certification by the third-party organization that the pellets do not contain and are not manufactured from any of the prohibited fuels listed in 40 CFR 60.532(f) and 40 CFR 60.5474(f). Further, minimum requirements/specifications are already part of the PFI's and other third-party's requirements, and so will be imposed by the retained rule requirement that the pellets be graded under a licensing agreement by PFI or another EPA-approved third-party. For example, PFI's current (2018) Standard Specifications for Residential/Commercial Densified Fuel  includes nearly identical requirements on density, dimensions, fines, chlorides, ash and trace metals, as required by the 2015 final rule. The remaining requirement  -  that the pellets contain no demolition or construction waste  -  is already contained in the list of prohibited fuels in 40 CFR 60.532(f) and 60.5474(f), which the Agency is retaining with this final rule by requiring operators of pellet fuel heaters to burn only pellets certified by third-party organizations as containing none of these prohibited fuels.

As pointed-out by multiple commenters in response to the NPRM, enforcing a list of pellet requirements in this final rule serves to codify a static list of requirements, until an updated rule is promulgated. Innovations may occur in the interim regarding pellet fuel heater technology, which may require an update to the list of pellet specifications, prior to when a revised rule is promulgated. Third-party organizations can update the list of pellet requirements in step with developments in pellet fuel heater technology, so as to not delay or preclude innovation that may improve pellet fuel heater operation and decrease emissions. The EPA is therefore removing the part of this codified list that is already specified by third-party organizations and/or specified by the list of prohibited fuels and maintaining approval authority over third-party organizations. This final action will allow for pellet specifications that, while protective, do not unnecessarily preclude, inhibit or delay technological innovation.

Regarding the suggestion that EPA require testing for pellet fuel with high ash and fine content, the Agency is not amending the rule at this time or otherwise taking any final action with respect to this comment. However, the agency will monitor these fuel specifications going forward. 

6.1.2 Comment: Retention of trace metals, sulfur, chlorine, ash and fines requirements
Several commenters (0054/0200 p.6 and public testimony 0142 pp.24-25, 0065 p.6) supported retaining all existing pellet fuel requirements/restrictions for trace metals, sulfur, chlorine, ash and fines content.

Response:
Pellet fuel will continue to be subject to requirements/restrictions for trace metals, chlorides, ash and fines content because the rule retains the requirement that the pellets be graded under a licensing agreement by PFI or another EPA-approved third-party. PFI and other EPA-approved third-parties include such requirements. For example, PFI's current (2018) Standard Specifications for Residential / Commercial Densified Fuel  includes nearly identical requirements on density, dimensions, fines, chlorides, ash and trace metals, as required by the 2015 final rule. It should be noted that the 2015 NSPS does not specify a requirement for sulfur content, although the pellet requirements include a prohibition against using any of the material listed in the prohibited fuel list found in 40 CFR 60.532(f) and 60.5474(f) to make pellets. The EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f).

6.2	Pellet Requirements Should Be Revised
Section 6.2 includes comments asserting that the pellet requirements should be strengthened in some ways but revised and made less stringent for certain specific parameters.

6.2.1 Comment: Reasons for strengthening pellet fuel requirements 
Several commenters (0054/0200 pp.5-6 and public testimony 0142 pp.24-25, 0068 p.5) supported strengthening and improving the pellet fuel requirements for the reasons stated below  - 
      The EPA List of Certified Wood Stoves includes many models designed to burn pellets. With increasing use of this fuel for residential home heating purposes, pellet quality and the potential impacts from its use are important. NESCAUM conducted a study for the New York State Energy Research and Development Authority (NYSERDA) and found that absent enforceable fuel quality standards, wood pellets can contain significant levels of metals and other harmful contaminants that can increase toxic emissions. For example, we analyzed commercially available pellet fuels that had high chromium, copper, arsenic, lead and mercury content.
      In addition to increased emissions of toxic pollutants, inferior quality pellets can affect a device's operation, reduce combustion efficiency, and potentially damage high efficiency equipment over time. Our sampling program found commercially available pellets with ash content as high as 8 percent, which is well above the Pellet Fuels Institute (PFI) ash limit of 1 percent for "premium grade" pellets. High quality pellets save consumers money in terms of reduced fuel consumption and maintenance costs. In NESCAUM's 2011 analysis of 132 samples representing over 100 brands of pellet fuels, 36 percent of the pellet brands exhibited levels of elevated materials (see Attachment 3). Our ongoing analysis of pellet fuels has found that, to date, no pellets bearing the Pellet Fuel Institute certified fuel quality mark appear contaminated. The PFI certification program requires the use of clean wood, routine (quarterly or monthly) unannounced inspections, and annual unannounced analysis for metals.
      The 2015 NSPS requires that pellets burned in residential wood pellet heaters meet minimum fuel quality criteria. NESCAUM strongly supports maintaining such requirements to protect against contaminated pellets in the retail market, ensure efficient operations and comparable emissions from pellet-fueled devices, and provide some assurance that the pellet heater's performance in the home is consistent with the certification test. EPA currently accepts existing pellet quality standards from various third-party organizations including PFI, ENplus and CANplus, and additional organizations may apply to the Administrator for approval. The stringency and effectiveness of these programs, however, can differ markedly. The current standards could be improved by consolidating these requirements into a single standard that would apply to all suppliers and all third-party certifiers.
      NESCAUM supports implementation of fuel quality standards for all pellets sold for residential use, but we support eliminating size requirements. Standards for metals, sulfur, chlorine, ash and fines content should all be retained because these are key elements to assure real world performance. Furthermore, EPA must include provisions that approved voluntary programs have mechanisms to provide appropriate oversight such that compliance assurance can be monitored, and appropriate enforcement actions are taken when deviations occur.
Likewise, other commenters (0065 pp.5-6, 0068 p.5) recommended that minimum quality pellet fuel requirements be retained but with revisions and their suggested revisions are discussed in the following subsections. One commenter (0068 p.6) furthermore asserted that "if EPA adopts a sell-through provision ... or weakens the requirements for wood pellets, states may adopt regulations to counter EPA's actions."

Response:
We appreciate the information that NESCAUM's "ongoing analysis of pellet fuels has found that, to date, no pellets bearing the Pellet Fuel Institute certified fuel quality mark appear contaminated." The EPA has decided to rely on third-party organizations approved by the Agency  -  including PFI  -  to ensure that minimum specifications and restrictions are met for pellet quality. The EPA has also decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f). The Agency has made this determination primarily because: (1) minimum requirements/specifications are already part of the PFI's and other third-parties' requirements, and so will be imposed by the retained rule requirement that operators of pellet fuel heaters must only burn pellets graded under a licensing agreement by PFI or another EPA-approved third-party; (2) having the list of pellet specifications imposed by federal regulations may inhibit innovations that may improve pellet fuel heater operation and decrease emissions; and (3) PFI has added metal requirements as of November 9, 2018. Finally, nothing in this final rule precludes the EPA from proposing and promulgating appropriate additional pellet fuel requirements in the future, if the Agency determines that federally imposed requirements are needed. 

6.2.2 Comment: Maximum length restriction should be eliminated
Multiple commenters (0042, 0054/0200, 0065, 0142) supported eliminating the maximum length restriction in the list of pellet fuel requirements. One commenter (0054/0200 p.6 and public testimony 0142 pp.24-25) "support[ed] implementation of fuel quality standards for all pellets sold for residential use, but [nonetheless] support[ed] eliminating size requirements." Another commenter (0065 p.6) also supported eliminating size requirements for pellets. Likewise, commenter (0042 p.1) asserted that "the EPA should not list specific requirements of fuel such as length or diameter but it should match the PFI Standard specifications."

Response:
We appreciate the suggestions that the dimension restrictions should be removed from the rule and instead match PFI specifications. The EPA has decided to remove the minimum requirements that were in subsections 1 through 7 of 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f). The Agency has made this determination primarily because: (1) minimum requirements/specifications are already part of the PFI's and other third-parties' requirements, and so will be imposed by the retained rule requirement that operators of pellet fuel heaters must only burn pellets graded under a licensing agreement by PFI or another EPA-approved third-party; (2) having the list of pellet specifications imposed by federal regulations may inhibit innovations that may improve pellet fuel heater operation and decrease emissions, and (3) PFI has added metal requirements as of November 9, 2018. 

6.2.3 Comment: Fines restriction should be revised
One commenter (0042 p.1) suggested that "fines should be referred to as fines and not as inorganic fines as inorganic fines infer that the fines are somehow directly related to non-carbon-based material such as ash."

Response:
We agree that the correct specification is "fines" instead of "inorganic fines". Going forward, the Agency has decided to rely on EPA-approved third-party pellet specifications, such as those required by PFI's current Standard Specifications for Residential/Commercial Densified Fuel, which specifies "fines" not "inorganic fines".

6.2.4 Comment: Trace metal restrictions should be retained and strengthened
One commenter (0045 p.8) stated that  - 
      The presence of heavy metals in pellet fuel, including arsenic, copper and chromium and the likely emission from the fuel into the ambient air in neighborhoods, exposing the public, is troubling. It appears that the presence of these metals indicates that treated lumber waste stream is finding its way into commercial pellet production [cites Elemental Analysis of Wood Fuels. Final Report, June 2013. New York State Energy Research and Development Authority]. EPA should have a pellet fuel standard that limits the amount of toxic metals, so that treated lumber waste and other similar contaminants do not become a component of the pellet fuel. ... WESTAR ... urges EPA to take steps to better protect the public from exposure to toxic metals from pellet fuels.
Response:
We agree that the presence of toxic metals and other contaminants in pellets is a health and environmental hazard. The Agency also appreciates the information provided above in Section 6.2.1 that NESCAUM's "ongoing analysis of pellet fuels has found that, to date, no pellets bearing the Pellet Fuel Institute certified fuel quality mark appear contaminated." The EPA has decided to rely on third-party organizations approved by the Agency  -  including PFI  -  to ensure that minimum specifications and restrictions are met for pellet quality. We note that trace metals were recently added to the PFI Fuel Grade Requirements in November 9, 2018. The EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. However, we are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f).The Agency has made this determination primarily because: (1) minimum requirements/specifications are already part of the PFI's and other third-party's requirements, and so will be imposed by the retained rule requirement that operators of pellet fuel heaters must only burn pellets graded under a licensing agreement by PFI or another EPA-approved third-party; (2) having the list of pellet specifications imposed by federal regulations may inhibit innovations that may improve pellet fuel heater operation and decrease emissions, and (3) PFI has added metal requirements as of November 9, 2018. Finally, nothing in this final rule precludes the EPA from proposing and promulgating appropriate additional pellet fuel requirements in the future, if the Agency determines that federally imposed requirements are needed. 
 
6.2.5 Comment: Ash content restriction should be revised
One commenter (0042 p.1) asserted that  - 

      One problem with the proposed NSPS, is the 2% limitation of ash content. Granted that higher ash content can result in higher particulate emissions in traditional pellet stove burn systems; but the NSPS should not rule out the use of higher ash fuels burnt in less traditional pellet burn systems, such as gasifiers, that might be able to reach the particulate emissions the NSPS is looking for. Let the stove designers meet NSPS and not artificially rule out higher ash fuels.

Response:
We appreciate the suggestion that the specifications need to be agile enough to respond to different pellet fuel heater technologies. To that end, the Agency has decided to rely on third-party organizations approved by the Agency  -  including PFI  -  to ensure that minimum specifications and restrictions are met for pellet quality. One of the reasons the EPA has made this determination is that having the list of pellet specifications imposed by federal regulations may inhibit innovations that may improve pellet fuel heater operation and decrease emissions, as discussed further in response to other comments. See, e.g., response to comment 6.1.1. 
 
6.2.6 Comment: Demolition /construction waste restrictions should be retained and strengthened
One commenter (0054/0200 p.6) supported retaining and strengthening the restrictions against using demolition and construction waste, asserting that only clean wood fuels should be used for producing pellets, while the following should be prohibited: any waste wood or construction or demolition waste products; any de minimis waste materials; and any binders that could lead to a decrease in emissions performance. Another commenter (0065 p.6) also asserted that only "clean wood fuels" should be used in pellets, with "any waste wood" prohibited.

Response:
We appreciate the concern regarding demolition and construction waste in pellets and agree that only clean wood fuels should be used in pellets. The Agency is implementing this prohibition against demolition and construction waste in 40 CFR 60.532(e) and 40 CFR 60.5474(e) by including the requirement that the grading done by third-party organizations include a certification by the third-party organization that the pellets do not contain and are not manufactured from any of the prohibited fuels listed in 40 CFR 60.532(f) and 40 CFR 60.5474(f)., which includes construction or demolition debris as well as a list of other materials that can create hazardous emissions and damage the pellet wood heating device. 

In addition, the Agency is retaining the requirement that the pellets be graded under a licensing agreement by PFI or another EPA-approved third-party, whose certification will ensure that the pellets also meet minimum requirements and specifications. For example, PFI's current Standard Specifications for Residential/Commercial Densified Fuel includes nearly identical requirements on density, dimensions, fines, chlorides, ash and trace metals, as required by the 2015 final rule.

6.2.7 Comment: Prohibited fuel list should be revised regarding pallets and seasoned wood prohibitions
Several commenters argued that pallets should be allowed for use in the manufacture of wood pellets for residential wood burning (0055, 0058, 0072). A couple commenters also asserted that unseasoned wood should not be prohibited for the manufacture of pellet fuel (0040, 0042). 

Comments regarding Pallets:

One commenter (0058 pp.1-2) requested that EPA "eliminate the restriction on the use of pallet wood waste as a feedstock for manufacture of wood pellets." This commenter (0058) asserted that "to maintain the pallet wood exclusion within this rule will eliminate jobs, increase costs, burden our landfills and not improve air quality." 

Likewise, another commenter (0055 pp.1-2) asserted that 
      NWPCA [National Wood Pallet and Container Association], on behalf of its members, requests that EPA revise the current minimum pellet fuel requirements to ensure that pellets made from wood pallets are not a prohibited fuel source, or alternatively remove the requirements from the 2015 New Source Performance Standards (NSPS)... 
      On March 16, 2015, EPA issued a final rule revising the Standards of Performance for New Residential Wood Heaters. 80 Fed. Reg. 13,671 (Mar. 16, 2015). In that rule, EPA promulgated a rule governing requirement for pellet fuel. See 40 C.F.R. § 60.532(e). EPA also listed a variety of prohibited fuel sources. Id. § 60.532(f). One of the prohibited items in that list is "pallets." Id. § 60.532(f)(9). The rule, however, did not clarify whether wood pellets made from wood pallets were a prohibited fuel source.
      In a November 16, 2016 Memorandum titled EPA's Response to Remand of the Record for Residential Wood Heaters New Source Performance Standards, EPA explained that wood pellets could not contain any of the prohibited fuels. See EPA-HQ-OAR-2018-0195-0010 at 19. EPA explained that the concept of prohibited fuels originated from the 1988 NSPS "Do Not Burn" list, which EPA alleged included wood pallets. Id. However, the 1988 NSPS did not list wood pallets as a prohibited fuel. See 53 Fed. Reg. 5,860, 5,914 (Feb. 26, 1988). EPA's inclusion of wood pallets as a prohibited fuel source was unwarranted. 
      There is no basis to exclude wood pellets made from recycled wood pallets as a fuel source. Pellets derived from recycled wood pallets provide an ideal combination for a fuel source  -  low moisture, high heat, and low metal emissions. The combustion of these pellets are not a source of hazardous pollutants or toxic emissions, as EPA's memorandum suggests. See EPA-HQOAR-2018-0195-0010 at 19. Such pellets meet the current Pellet Fuels Institute (PFI) tests for premium fuel. The pellets cannot currently be certified under the PFI Standards Program, however, because they are derived from a source EPA has purportedly prohibited.
      Wood pallets are currently the most recycled packaging product, with 95% of all wood pallets recovered, refurbished and recycled according to a recent study by Virginia Tech and the U.S. Forest Service. Since wood pellets with wood pallet residuals cannot currently be certified under the PFI Standards Program, there is grave concern across the industry that these pallets will now be diverted to landfills, rather than recycled as a renewable fuel source. The exclusion also causes a financial hardship on the small, family businesses that count on the pellet market for their pallet residuals. Instead of receiving a revenue stream for these residuals, many companies must now pay a disposal fee, while also contemplating reduced work hours, jobs, and production.
      The environmental and economic consequences of excluding wood pallets as a fuel source is significant. EPA should clarify that wood pellets sourced from wood pallet residuals are not a prohibited fuel source. We are happy to assist EPA in its efforts to reform NSPS Subpart AAA and look forward to commonsense reform efforts that do not prohibit a useful fuel source from being used in residential wood heaters.
Another commenter (0072 p.1) similarly stated  - 
      We request that the EPA revise the current minimum pellet fuel requirements to eliminate wood pallets as a prohibited fuel source and feedstock. Pellets made from such feedstock can meet the current standards set forth by the PFI Standards Program but are unable to get certified under the Program because the raw material is prohibited according to the NSPS. We believe that recycled pallets are the most recycled packaging product in the United States according to a study by Virginia Tech and the US Forest Service and by turning this material into a usable fuel source we will be aiding in landfill avoidance while creating a viable fuel source for years to come.
      By prohibiting pallets as a raw material, it has and will put a financial strain on our company and others who use this feedstock. We along with other producers have invested a tremendous amount of money in equipment and employees and we ask that you remove pallets as a prohibited fuel source in order to compete in the market and provide a viable outlet for residual waste that would otherwise be sent to a landfill.
Another commenter (0058 p.2) explained that  - 

      Industrial Pallet through an affiliated company is a member of the Pellet Fuels Institute. Though our company cannot participate in the PFI's certification program because of the exclusion, we test our fuels regularly. Testing indicates that we pass all the criteria for certification except for the exclusion of pallet wood in the EPA rule which is subject of these comments. Additionally, you may be aware that Europe also has a standard for pellet fuel which is more stringent than our country's standard. Our company, for our internal edification, has tested our pellets under the European standard several times and we pass that standard also. There seems to be no need nor prior indication that the exclusion of pallet wood is necessary. The notion that pallet wood is somehow contaminate is false. Hundreds of millions of recycled wood pallets are used worldwide every day to transport all types of consumer goods including food products.

Comments regarding seasoned wood:

One commenter (0042 p.1) asserted that "The EPA seasoned wood requirement would shut down most of the wood pellet industry as most producers dry their raw materials." Likewise, another commenter (0040 p.1) opined that  -  

      One of the NSPS requirements is that manufacturers only use seasoned wood when making wood pellet fuel. I estimate this would shut down the majority of residential pellet fuel manufacturers since many take clean, green dust and chips from sawmills that keeps it from going to a land fill. Then dry it at their plant before turning it into pellets.

Response:
We are maintaining the prohibition that states that no person is permitted to burn any of the prohibited fuels in 40 CFR 60.532(f) and 60.5474(f). These provisions apply to all material burned in wood heating devices, including pellets. Regarding the prohibition as it applies to pallets, the Agency is concerned about potentially hazardous material in pallets, from either intentional treatment of the pallet wood or contamination of the pallet while the pallet is in use. Therefore, in response to questions concerning the scope of the prohibition on "pallets" in 40 CFR 60.532(f)(9), we are clarifying in the preamble to this final rule that this provision covers pressure-treated pallets. Furthermore, as noted above, pallets contaminated with any of the materials listed as a prohibited fuel type in 40 CFR 60.532(f) may not be burned or used to manufacture pellets because such burning or use is barred by the provision prohibiting the specific prohibited fuel. For instance, manufacturing pellets from pallets contaminated with "waste petroleum products, paint or paint thinners, or asphalt products" (i.e., the language in 40 CFR 60.532(f)(5)), is prohibited by 40 CFR 60.532(f)(5). As a second example, pallets that are contaminated with asbestos may not be used to make pellets due to the prohibition against "materials containing asbestos" in 40 CFR 60.532(f)(6). Sections 40 CFR 60.532(f) and 40 CFR 60.5474(f) state that no person is permitted to burn any of the following materials in an affected wood heating device:

      1. Residential or commercial garbage;
      2. Lawn clippings or yard waste;
      3. Materials containing rubber, including tires;
      4. Materials containing plastic; 
      5. Waste petroleum products, paints or paint thinners, or asphalt products;
      6. Materials containing asbestos;
      7. Construction or demolition debris;
      8. Paper products, cardboard, plywood, or particleboard. The prohibition against burning these materials does not prohibit the use of fire starters made from paper, cardboard, sawdust, wax and similar substances for the purpose of starting a fire in an affected wood heater;
      9. Railroad ties, pressure-treated wood or pallets (40 CFR 60.532(f)(9)) and 
      Railroad ties or pressure-treated lumber (40 CFR 60.5474(f)(9));
      10. Manure or animal remains;
      11. Salt water driftwood or other previously salt water saturated materials;
      12. Unseasoned wood
      13. Any materials that are not included in the warranty and owner's manual for the subject wood heater; or 
      14. Any materials that were not included in the certification tests for the subject wood heater.

Regarding unseasoned wood, we are clarifying that the prohibition against unseasoned wood applies to the fuel being burned and therefore, in the case of pellets, applies to the manufactured or finished pellet, not the raw wood used to produce/ manufacture the pellet. Unseasoned wood may be used in the production of pellets, as long as the finished pellet has a moisture content less than 20 percent. 

6.2.8 Comment: Quality assurance program requirements should be revised
Some commenters (0054/0200, 0065) stated support for retaining and strengthening requirements for quality assurance programs overseeing pellet fuel quality, while one commenter (0040) expressed opposition to instituting a quality assurance program. 

In support of a quality assurance program, one commenter (0054/0200 p.6) asserted that -
      Pellet fuel should be certified through a quality assurance program licensed by a third-party organization approved by EPA and should meet the following minimum requirements:
       minimum annual random compliance audits, including unannounced inspection and testing activities for metals content with limits consistent with those adopted by PFI;
 monthly or quarterly testing to assure compliance with pellet standards;
 mechanisms to provide pellet sampling and inspection reports for review by the appropriate authorities;
 retention of existing metals, sulfur, chlorine, ash and fines content requirements;
 requirement for the use of clean wood fuels while prohibiting the use of any waste wood or construction or demolition waste products;
 prohibition on the use of any de minimis waste materials; and
 prohibition on the use of any binders that could lead to a decrease in emissions performance.

This above list was also echoed by another commenter (0065, p.6) who also requested that EPA "require that approved voluntary programs include oversight mechanisms to allow compliance to
be monitored and, as necessary, appropriate enforcement action to be taken."

Another commenter (0040 p.1) was not supportive of requiring quality assurance program oversight for pellet fuel quality, arguing that  -  

      Our current testing program we use is more thorough and cheaper than the expensive certified programs NSPS ruling is requiring. For years, we have tested our pellet fuel every 5th ton produced for ash content & fines at our onsite lab. Two or three times a year, we send a 40 lb. bag out to an independent lab to ensure our testing system is accurate. The NSPS ruling requires one of 2 certification programs:
       	-One certified program tests once every 1,000 tons produced and the participant must pay 4 different groups to be in the auditing program as well as the cost of paying for shipping, lab tests, and auditors site visits.
 	-The other program tests only once/year, but requires the participant to pay money -based on their annual production - which goes to the program and is used to promote the use of pellet fuel in Europe. 

This NSPS requiring costly certification programs favors the large corporations in the pellet fuel business that can absorb the high costs of the programs and penalizes small family businesses. At the same time, this would not be as thorough as our current testing program.

Response:
The EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f), as assured through a quality assurance program licensed by a third-party organization approved by the EPA. The Agency appreciates that some pellet producers may have a stringent testing program of their own in place, but not all pellet producers do. Licensing a quality assurance program by an EPA-approved organization is necessary to ensure all pellet producers are producing pellets free of prohibited materials, and that also meet the specifications required by the EPA-approved third-party organization.
7.0	Support for Eliminating Pellet Fuel Requirements 
Section 7 presents comment excerpts and summaries regarding eliminating the pellet fuel requirements as they currently exist in the NSPS.

7.1	The Pellet Fuel Requirements are not Permissible under the CAA
Section 7.1 includes comments contending that the pellet fuel requirements are not permissible under the CAA and providing a legal basis for why they need to be eliminated. These legal arguments were primarily provided by the Pellet Fuels Institute (PFI).

7.1.1 Comment: EPA lacks legal authority under the CAA to regulate pellet fuel, did not analyze BSER, unjustifiably regulates a commercial product in homes and must repeal the requirements entirely.
One commenter (0069 pp.1-2, 3-8, 9-12, 21) argued extensively that the pellet fuel requirements cannot be justified legally under the CAA for several inter-related reasons - 
      PFI argued in 2015 and contends now that the EPA lacks legal authority to promulgate such standards. First placed into the Clean Air Act ("CAA") in 1970, CAA §111 is designed to regulate emissions from stationary sources, including large industrial facilities. In its 2015 rule, however, EPA extended the regulatory reach of this provision well beyond the fence line of an industrial plant to regulate a commercial product and the homeowners that buy this product to heat their homes. In doing so, EPA ignored 40 years of case law and regulatory precedent by failing to properly analyze the best system of emission reduction ("BSER") with respect to pellet fuels. ...
      The administrative record for the 2015 rule and for options that would either retain pellet fuel standards in the same or revised form is seriously deficient and relies on insufficient and anecdotal information which, in some cases, does even not support EPA's conclusions.
      While PFI appreciates EPA's decision to review pellet fuel standards, we believe that only one outcome of the rulemaking is permissible: elimination of the 2015 standards. EPA does not have the authority, a reasoned basis or a sufficient administrative record to retain the 2015 standards or amend parts of the 2015 regulations.
      As they have in the past, pellet fuels will continue to offer a viable, clean-burning alternative to using cord wood for home heating, benefitting both homeowners and others who depend on wood heat as well as the surrounding, local community. Rescinding EPA's intrusive standards will help to restore incentives for innovation that were
substantially diminished, if not thoroughly eliminated, by EPA's 2015 rule. ...
      Almost five years ago, PFI expressed serious concerns with EPA's proposed rule that would regulate pellet fuel for the first time. As proposed in 2014 and as finalized in 2015, PFI argued that EPA's pellet fuel requirements were in excess of its authority under CAA §111. EPA neither responded to these comments nor altered the trajectory of its proposed regulation in 2015. In fact, EPA added several additional pellet fuel requirements beyond those it had originally proposed. EPA did not explain how it determined that BSER for wood heaters included specific standards for fuel providers nor how a CAA §111 rule may regulate the behavior of an individual who is an owner of the wood stove, or even a non-owner, casual user of a wood stove, much less any alternatives to this regulatory regime. EPA also did not explain how it could use its authority in CAA §111(a)(2) to regulate products (i.e., pellet fuel) where such products have not been previously listed for regulation, or subject to an endangerment determination.
      Thus, EPA's standards for pellet fuel were previously in excess of EPA's statutory authority in CAA §111  -  and remain so today. Then, as now, the standards are unsupported in the administrative record for either the 2015 rulemaking or this proposed rule. EPA did not conduct an analysis of the best system for emission reduction ("BSER") related to pellet fuel either as part of its 2015 rule or as part of its current proposal to retain or modify current pellet fuel standards. Thus, aside from a lack of legal authority, EPA's rulemaking procedure is (and remains) contrary to law, at variance with EPA's past interpretations and implementation of CAA §111 and arbitrary and capricious. Our more detailed comments below expand on these serious concerns and dictate that EPA take action to reverse its legal and procedural mistakes.
      EPA Failed to Address Comments Filed by the Pellet Fuel Institute in 2014 and the Proposed Rule Does Not Cure Previous Legal and Procedural Defects
      In PFI's comments on EPA's 2014 proposed rule, PFI explained that CAA §111 does not provide EPA with authority to establish pellet fuel standards. PFI also explained that whether EPA was exerting authority under CAA §111(a), (b) or (h), the Agency must take into account several statutory considerations, including cost and energy requirements, which it ignored when promulgating final standards. Despite the central nature of these comments to EPA's rule, EPA never provided a substantive response to PFI's comments. Specifically, while mentioning PFI's objections to the Agency's exertion of statutory authority in its Response to Comments ("RTC") document, EPA provided a two paragraph response which neither mentioned the legal basis for its standards, nor responded to explicit comments that EPA had failed to determine that pellet fuel requirements were BSER or consider the explicit statutory criteria to promulgate a "standard of performance" pursuant to CAA §111(a).
      The current proposed rule does nothing to cure this defect. In its proposed rule, EPA has not explained how retaining current pellet fuel regulations is consistent with its authority to establish CAA §111 standards, nor has EPA put forward any additional information concerning how it determined the BSER to support the original 2015 standards. While EPA takes comments on an alternative, less prescriptive set of pellet fuel standards, the Agency does not provide an analysis of how such standards either comply with CAA § 111 or constitute BSER. Until such fundamental defects are cured  -  and PFI would submit that they cannot  -  EPA lacks authority to finalize either Option 1 (retain standards) or Option 3 (revise standards) as presented in the proposed rule.
      EPA's lack of original supporting analysis for the 2014 proposed rule or the 2015 final rule affecting pellet fuel is vividly demonstrated by its decision, in 2016, to supplement the original administrative record for that rulemaking. Specifically, in pending litigation on the 2015 standards, EPA moved to remand the record with respect to litigation on the 2015 final rule (which included standards for all types of wood heaters as well as pellet fuel requirements) solely on one issue. That issue was to "further explain its rationale behind the pellet fuel requirements in the Final Rule." In other words, well over a year after EPA finalized pellet fuel standards, it determined that it should attempt to "further explain" why it promulgated such standards in the first instance despite the CAA's clear requirement any proposed rule contain a statement of basis including "the factual data on which the proposed rule is based" as well as "major legal interpretations" that support the rulemaking.
      EPA's 2016 further "explanation" of its 2015 pellet fuel standards was insufficient then to justify the final requirements and is insufficient now to support either retaining the current standards or revising such standards. Within the current proposed rule, EPA simply asserts that the requirements are "intended to maintain a level of quality consistent with the requirements of a pellet heater certification test" may be promulgated under the authority of CAA §111. But any regulatory "intent" is wholly subjective and does not fulfill EPA's legal duty to determine BSER only after a full examination of mandatory statutory criteria. Moreover, EPA has not, to date, either adequately responded to comments PFI filed in 2014 nor developed a new record sufficient to retain existing standards.
      This leaves the Agency one choice: Option 1, the elimination of pellet fuel requirements in 40 C.F.R. §60.532(e)(1)-(8) and §60.5474(e)(1)-(8). EPA must repeal these provisions which establish explicit size and content requirements for pellet fuel and the mandate, in the two subparagraphs (e)(8), that pellets "contain none of the prohibited fuels in paragraph (f) of this section." 
      EPA's Supplemental Response to the Pellet Fuel Institute's Comments Does Not "Cure" EPA's Lack of Legal Authority
      EPA Admits that Pellet Fuel Standards are not Authorized by Clean Air Act § 111
      EPA refers to the preamble of the proposed and final rules and EPA's Response to Comments document as "containing the reasoning" supporting the NSPS and the Supplemental Response as providing "additional clarification." But none of these documents explain how EPA has authority to regulate pellet fuel characteristics pursuant to CAA §111(b), nor how EPA determined BSER for the regulated source category as including the specification of multiple parameters and characteristics pellet fuel and the regulation of the behavior of private citizens who may not even own a pellet stove. EPA must do so in order to promulgate a lawful standard.
      As referenced above, EPA also did not respond to comments filed in 2014 that the Agency lacked authority under CAA section 111(a) or (b) for its final 2015 standards. But EPA effectively admitted after the fact that it does not have such authority. EPA's Remand of the Record explicitly states that pellet fuel standards are not authorized under a CAA §111 standard of performance. Specifically, EPA stated that:
            PFI's comment that EPA has not demonstrated that the pellet fuel requirements are part of BSER fails to understand the role of pellet fuel requirements in the rule. They are not part of the systems of emission reduction that pellet heater manufacturers apply to control emissions . . . The pellet fuel requirements are a means to ensure that conditions during the certification testing and homeowner operation are comparable.
      EPA lacks statutory authority to regulate pellet fuel and the pellet fuel industry on the basis of an amorphous claim that this is just a "means to ensure" that testing, and operation of a source is comparable. Pursuant to CAA §111, EPA must determine that the BSER for the source category being regulated  -  wood heaters and other wood-fueled appliances. EPA does not obtain authority under CAA §111 to additionally regulate entities that are not part of the source category being regulated. And EPA's statement that pellet fuel regulations are not part of BSER explicitly verifies that EPA acted without authority in 2015 to regulate pellet fuels and that Options 1 and 3 in this proposed rule are also beyond EPA's authority to promulgate as a final rule.
      But rather than discuss the legal basis for regulating pellet fuels when given the opportunity to do so in this proposed rule, EPA repeatedly attempts to justify its new and novel regulation of a previously unregulated commercial product  on the basis that its regulations "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. But the "intent" of a rule is not to be confused with legal authority to promulgate a rule. EPA may intend to do many things, but it may only promulgate rules to regulate the private sector if Congress had granted the Agency legal authority to do so.
      As EPA recently explained, CAA §111 "authorizes and directs the EPA to prescribe NSPS applicable to certain new stationary sources (including newly constructed, modified, and reconstructed sources). As a preliminary step to regulation, the EPA lists categories of stationary sources that the Administrator, in his or her judgment, finds "cause, or contribute significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare." But with regard to the wood heater NSPS, EPA has neither defined pellet stoves utilizing pellet fuel as a wood heater, explicitly listed pellet stoves using pellet fuel as a source category or completed an endangerment finding that considers pellet fuel, which it newly regulated in 2015. Rather, EPA indicates that pellet stoves were subject to an "unintentional loophole" in the 1988 NSPS for wood heaters that this was corrected in the 2015 rule when they were "explicitly regulated."
      The CAA defines a "`new source" as "any stationary source, the construction or modification of which is commenced after the publication or regulations (or, if earlier, [proposed regulations) prescribing a standard of performance . . . which will be applicable to such source." But EPA's 2015 regulations and Options 1 and 3 as proposed in this rule, do not solely regulate a stationary source. They effectively regulate pellet fuel manufacturers who may only produce a pellet fuel for use in new pellet fuel heaters if the fuel meets EPA's specific requirements for such fuel. And EPA's 2015 regulations and Options 1 and 3 also regulate homeowners or other operators (including non-owners and casual operators) of pellet fuel stoves who may be completely unaware of fueling requirements. The NSPS does not solely apply to pellet stoves or pellet stove manufacturers. Instead, "new pellet heater/stove owners and operators will be required to use only the grades of pellet fuel . . . that are included in the owner's manual based on the heater/stove certification tests."
      Under CAA §111(a)(1), EPA has explained that it "must set [NSPS] at the level that reflects the `best system of emission reduction . . . adequately demonstrated' taking into account technical feasibility, costs and non-air quality health and environmental impacts and energy requirements...The text and legislative history of CAA §111, EPA's previous regulatory interpretations of that provision and relevant court decisions, identify factors for the EPA to consider in making a BSER determination." And EPA has further explained the process that it must follow: first, EPA identifies the "system of emission reduction" that has been adequately demonstrated for a particular source category and second, "EPA determines the `best' of these systems after evaluating the extent of the emissions reductions, costs, any non-air health and environmental impacts, and energy requirements."
      Yet EPA has done of this required CAA §111 analysis for pellet fuels -  as it readily admits  -  since it does not consider pellet fuel requirements to be part of a system of emission reduction. And there is nothing in the record for the 2015 rulemaking or this proposed rule that shows EPA has evaluated the "best" system after considering the mandatory statutory factors that it must consider prior to determining BSER. EPA evaluated no other option than placing extremely prescriptive requirements into the Code of Federal Regulations ("C.F.R.") where they become enforceable as CAA standards, subjecting violators to the possibility of CAA per day/per violation fines.
      EPA additionally represents that its determination of BSER "is based on an evaluation of what has been achieved by the various models of wood heaters, and concluding that the lowest emitting heaters are using the best system of emission reduction (that is, whatever combination of the wide variety of combustion techniques that they are using)." If so, this is another blatant admission by the Agency that no BSER analysis was conducted with respect to its separate, non-source regulation of pellet fuel and operators of pellet stoves. EPA presented no information with respect to why these lowest levels of emission were achieved and the extent to which the lower emission of the regulated pollutant  -  i.e., particulate matter  -  was attributable to the fuel utilized, versus some other factor(s). ...
      EPA Failed to Apply its "Four Part Analysis" in 2015 or in this Proposed Rule
      During its 2014-2015 rulemaking process, EPA did not analyze BSER for pellet fuel under the "four part" analysis used in other NSPS rulemakings, most recently in the NSPS for fossil-fuel power plants. EPA has also not applied such an analysis with respect to its proposal to retain current standards (Option 1) or amended standards (Option 3). Nor does EPA cite any case law supporting its methodology for promulgating pellet fuel standards in 2015 or with regard to the current rulemaking, except for one decision which is inapplicable, as discussed below in Section IV.E. [of comment 0069].
      The four-part analysis that EPA has used in prior CAA §111 rulemakings and most recently referenced in its newly proposed CAA §111(b) standards for new, modified, and reconstructed electric utility generating units consists of: (1) identifying system[s] of emission reduction that have been adequately demonstrated; (2) determining which of these systems is best; (3) taking into account the cost of achieving the required emission reductions; and (4) considering "`any non-air quality health and environmental impact' in determining BSER," including cross-media environmental impacts.
      Neither the 2015 rule, nor this proposed rule or supporting analysis (e.g., EPA's Response to Remand) contains a structured analysis of pellet fuel regulations that uses EPA's prior methodology in promulgating CAA §111 rules, based on mandatory statutory requirements. EPA offers no explanation for this departure, but instead repeatedly ignores the impact of pellet fuel requirements on multiple entities: pellet fuel manufacturers, owners of pellet fuel stoves and operators of pellet fuel stoves. A regulatory agency may depart from its prior interpretations, but it must have a reasoned basis for doing so. In 2015 and in this proposed rule, EPA offers none.
      EPA's Supporting Analysis Suffers from Factual Errors
      EPA attempts to distinguish pellet fuel requirements from other CAA §111 standards by describing the wood heater NSPS as not being a "typical" NSPS. EPA then erroneously claims that the "rule does not require each operator (aka, each homeowner) to meet emission limits." This is both: (a) inaccurate; and (b) thoroughly inconsistent with EPA's insistence that pellet fuel requirements are essential for compliance.
      With regard to the accuracy of the statement, EPA has elsewhere admitted that owners and operators of pellet fuel stoves are required to comply with the standard. While it is true that a homeowner does not need to perform emission tests to certify that the stove purchased meets emission limits for pellet heaters, EPA requires the homeowner or a non-homeowner operator to meet emission limits by operating the heater in a manner consistent with the owner's manual. 40 C.F.R. §§60.532(g); 60.5474(g). Operators of pellet fuel heaters "may only burn pellets that have been graded under a licensing system" and the pellet fuel "must meet minimum requirements" as promulgated by EPA and specified in the owner's manual. Id. §§60.531(e)-(f); 60,5474(e)-(f). Thus, homeowners and other operators must meet emission standards which EPA has promulgated and explicitly defined as including the use of specific types of pellet fuel.
      In further trying to distinguish the wood heater NSPS from other NSPS, EPA represents that the "requirements on what pellets can be burned are designed to ensure that homeowners burn pellets comparable to what was used in certification tests" EPA then cites a 30-year-old Response to Comments ("RTC") document (for a rule that did not regulate pellet fuel) as the reason why such requirements and "fuel standardization" is necessary. But apart from a 1988 RTC being irrelevant to why EPA promulgated pellet fuel requirements in 2015 or with respect to how EPA may do so in in 2019, the cited RTC only addresses whether it is necessary to have a standardized test method for certification of stoves. All the quoted passages from the 1988 RTC involve only why it is important to have a comparable basis for testing stoves as against one another for certification testing. They only address the comparability of emission tests, not the rationale for the promulgation of an NSPS.
      In sum, EPA cannot distinguish pellet fuel requirements as being part of an "atypical" NSPS. As a matter of law, there is no such thing as a typical or atypical NSPS. Instead, rules promulgated pursuant to CAA §111 must apply to a source and be based on a determination of BSER. EPA's attempt to distinguish the 2015 rules applying to pellet fuels as solely related to certification testing and performance is frankly disingenuous. Neither the 2015 final rule, this proposed rule nor the 1988 RTC says anything about whether and how EPA has determined pellet fuel requirements as part of its BSER analysis, much less how it considered the mandatory elements of a BSER determination as applied to operators of pellet fuel stoves. Nor does EPA at any point include a justification for subjecting homeowners to possible CAA liability (a potential $37,500 fine for each occurrence) based simply on the operation of a pellet stove in a private residence (or examine viable alternatives thereto).
      EPA Reliance on Sierra Club v. EPA is Misplaced
      In an attempt to find legal support for its 2015 final standards and its proposal of Option 1 and 3, EPA includes a reference to Sierra Club v. EPA, 353 F. 3d 976 (D.C. Cir. 2004). But this case involved regulations promulgated under CAA §112, not CAA §111, the authority for this rulemaking. Thus, the court in Sierra Club was considering standards based on a determination of the "maximum achievable control technology," not the "best system of emission reduction" as required under CAA §111. While EPA concedes that the wood heater rule differs "in some respects" from other rules, the Agency simply cannot mix and match its statutory authorities and relevant precedent.
      In any event, Sierra Club involved use of operating parameters in lieu of requiring active monitoring in order to ensure compliance. Here, as the administrative record demonstrates, EPA did not evaluate any other system of emission reduction other than placing requirements on pellet fuel manufacturers and homeowners. While EPA decided that certification testing of all new stoves was impracticable, the requirement for the use of certain pellet fuel is not only a requirement for testing and certification of new stoves, but it is a central part of a CAA §111 emission standard. Fueling pellet fuel stoves only with certain certified pellets applies at all times of operation, including presumably start-up and shutdown of a stove. It is a permanent and ongoing requirement of complying with an NSPS. Sierra Club is thus further distinguishable on this basis.
      That requirements for pellet fuel are part of an emission standard versus a method of compliance is further demonstrated by EPA's insistence that pellet fuel requirements "are not based on CAA 111(h)." CAA 111(h) allows EPA to promulgate "design, equipment, work practice, or [an] operational standard, or a combination thereof" when it is not feasible to prescribe or enforce an NSPS. By denying that pellet fuel requirements are a CAA §111(h) standard, EPA must have determined that pellet fuel requirements are a CAA §111(b) standard. This further reinforces the interpretation that EPA's 2015 standards are not mere "compliance mechanisms" as EPA repeatedly tries to suggest, but rather an element of a CAA §111(b) standard.
      EPA Cannot Disclaim Responsibility to Conduct BSER Analysis
      EPA erroneously disclaims any need that the Agency consider cost and energy requirements when promulgating an NSPS standard. This is in direct contravention to EPA's analysis in other CAA rulemakings. "Under CAA section 111(a)(1), the EPA is required to take into account `the cost of achieving' the required emission reductions." "Under CAA section 111(a)(1), the EPA is required to take into account `energy requirements.'"
      EPA claims that "because PFI's comments [to the proposed 2014 rule] did not present any information that the pellet fuel requirements would have cost or energy impacts, and EPA is not aware of any such information, there was no need to take cost and energy impacts from pellet fuel requirements into account in determining what was achievable through BSER." But EPA cannot disclaim mandatory duties on the basis that the Agency was not "aware" of any such information. CAA §111 imposes an affirmative duty on EPA to investigate the extent of any such effects. EPA provides no evidence that it did so.
      In the 2014 proposed rule, EPA examined costs only associated with "the effectiveness of the proposed standards when considering the design life span of the appliances in residences." Thus, EPA effectively put on "regulatory blinders" and did not consider the cost impacts of the full range of its determination of BSER. EPA has not corrected this regulatory oversight in the current, proposed rule, which also lacks any inquiry into costs, energy impacts and other mandatory CAA §111(b) elements.
      Simply put, EPA cannot transfer an affirmative legal duty placed on the Agency to private sector entities regulated by its standards. EPA can also not claim that the Agency has no legal obligation to examine cost, energy and other mandatory impacts if it simply is unaware of information or chooses not to further investigate the impact of its regulatory determinations. This legal error, in of itself, makes the 2015 standards arbitrary and capricious.
      EPA Lacks Authority to Retain 2015 Pellet Fuel Standards or to Promulgate Amended Standards
      As outlined above, EPA never conducted a BSER analysis for its 2015 standards that followed the "four part test" for BSER, included a review of pellet fuel requirements, or conducted any analysis of the propriety of the obligations imposed on pellet fuel stove owners or operators. Nor did EPA examine any alternatives to the promulgation of requirements as now incorporated within 40 C.F.R. §§60.532(e)-(f), 60.5474(e)-(f). Instead, EPA promulgated final pellet fuel requirements in 2015 that were largely unchanged from those contained in the 2014 proposed rule -- except for the addition of additional requirements that had never been proposed or even discussed in the 2014 proposed rule.
      In the current proposed rule, EPA relies solely on comments filed in connection with the 2014 proposed rule, another document produced after the final rule in 2016 in response to litigation (i.e., the 2016 Remand of the Record) and select documents from 1988 that, on their face, do not analyze the BSER for pellet fuel stoves with reference to pellet fuel composition. Thus, EPA lacks authority to retain the 2015 standards or promulgate the revised standards it has proposed. And even if EPA had such authority, as demonstrated below [in comment 00069], EPA's "new" rationale is insufficient to support either current or revised standards. ...
      ...[B]ased on the comments above, the Agency cannot and should not promulgate either Option 1 or 3 that would retain all or part of the existing standards. The only supportable course of action is for EPA to eliminate pellet fuel regulations in their entirety.
Another commenter (0040, p.1) simply stated that  - 

      Under the Clean Air Act section 111, the EPA is not supposed to establish pellet fuel requirements. Is the ruling even legal? ... Countries in Europe are giving consumers large incentives to use wood pellet fuel in order to reduce the country's emissions by using a renewable fuel. EPA is making it more expensive for consumers to use wood pellet fuel by adding unnecessary requirements and expensive certification programs for wood pellet fuel manufacturers. We would like to see the EPA change the NSPS ruling and drop the requirements and certifications listed for wood pellet fuel.

Response: 
As explained in EPA's November 2016 Supplemental Response to Pellet Fuels Institute's Comments For Remand of the Record Based on Existing Docket for Residential Wood Heaters New Source Performance Standards, the EPA has the authority to impose minimum pellet requirements. As such, the Agency has decided to retain the list of prohibited fuels in 40 CFR 60.532(f) and 60.5474(f), which applies not only to pellets, but to all wood fuels burned in residential wood heating devices subject to this rule. However, the EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f). See response to comment 6.1.1.

Data show that pellet fuel quality assurance is necessary to ensure that the pellet fuel heaters operate properly and meet the certified emission limits. 
 
7.1.2 Comment: EPA cannot prescribe a specific technology for compliance with a standard under CAA section 111 and doing so precludes innovation
One commenter (0069 pp.1, 8-9, 12-15) contended that  - 
      PFI argued in 2015 and contends now that the EPA lacks legal authority to promulgate such standards. ... It also set a standard that is specifically prohibited under CAA §111(h) as a "particular system of technological control." ...
      EPA Standards Violate CAA §111(b)(5) and Preclude Innovation
      EPA is explicitly prohibited from requiring "any new or modified source to install and operate any particular technological system of continuous emission reduction to comply with any new source standard of performance." By requiring that operators of wood heaters "may only burn pellets that have been specified in the owner's manual" and by specifying that pellet fuel "must meet . . . minimum requirements [as specified in 60.532(e)-(f) and 60.5474(e)-(f)]" EPA has impermissibly specified such a prohibited technological system.
      EPA's NSPS leaves owners and operators no choice in how to comply with its standard. It is illegal to put any pellet fuel into a new stove that does not meet explicit standards, presumably even if such fuel would obtain better emission performance. In EPA's view, case law also "makes it clear that the EPA is to consider the effect of its selection of BSER on technological innovation or development, but that EPA also has the authority to weigh this as against [the other BSER factors]."
      Thus, EPA's 2015 regulation and Options 1 and 3 fail on two counts. The standards leave the operator of a pellet wood stove no choice with respect to what technological system must be utilized, i.e., a certified stove using pellet fuel meeting EPA's explicit and exacting standards. And EPA failed to address the real-world consequences of its decision to dictate product development decisions for the pellet fuel industry. Going forward, pellet fuel manufacturers cannot develop legal standards for pellet fuel stoves unless EPA firsts approves of those standards and thereafter engages in a lengthy process to revise federal regulatory requirements. As PFI has repeatedly pointed out to the Agency, regulations that can only be changed by more regulations remove any incentive for the industry to invest in the development of new/better standards.
      Likewise, pellet stove manufacturers cannot develop new stoves or heaters that use a different size or type of pellet. The use of such stoves or heaters without using EPA's prescribed pellet is prohibited. This certainly acts as a major disincentive to new technology. And it is not a sufficient response to claim that pellet stove manufacturers might be able to gain EPA's approval to change pellet fuel standards at some point in the future. The restraint and the violation of CAA §111(b)(5) would exist at all times prior to a final rule, which could be many years in the future. ...
      EPA's Inflexible 2015 Standards and Proposed Revisions to the 2015 Standards Exceed EPA Authority and are Inconsistent with other NSPS
      EPA bluntly states that it promulgated "its own list of standard minimum pellet requirements so that these requirements could not change without EPA action." In other words, it codified industry standards developed by PFI and other industry organizations so that EPA and EPA alone could control when and how pellet fuel standards are established.
      While EPA may be commended for its transparency in revealing its regulatory motive, by locking in specific size, composition and other requirements for pellet fuel, EPA has violated the technology neutral requirement of CAA §111(b)(5). As noted above, this section specifies that if EPA does not set a work practice standard under CAA §111(h) (which EPA explicitly claims it did not in the 2015 final rule) it cannot require "any particular technological system of continuous emission reduction."
      A regulatory requirement that requires specific fuel types to be used  -  which cannot be changed without EPA's assent and a formal notice and comment regulatory process  -  is just such a particular system of control. In either the 2015 final rule or Option 1 of Option 3 of the proposed rule, there are no waivers or alternative standards to accommodate a different technological system of control. Precisely-defined pellet fuel must be used by all operators of all new pellet stoves subject to the risk that per day/per violation fines could be assessed if any other system of emission control was used  -  even if such system met the emission standards that the stove was certified to.
      EPA cites no other NSPS new source standard which contains similar requirements. EPA also does not offer prior legal interpretations of CAA §111 or cite past practices to justify is approach to determining BSER with respect to Options 1 or 3 of the proposed rule.
      Many other CAA §111 source categories rely on industry standards or those set by testing organizations such as ASTM. In this rulemaking, EPA references industry standards but then determines that they are insufficient, imposing instead a combination of different standards and prohibitions that apply only to pellet fuel. This highly restrictive "one-size-fits-all" approach to pellet fuel standards is in stark contrast to other NSPS which allow for source and fuel flexibility. For example:
       Subpart D for Fossil-Fuel-Fired Steam Generators affects both fossil-fuel and fossil-fuel and wood-residue steam generating units. With regard to fossil-fuel-fired units utilizing coal, an affected source can use any solid fuel "classified as anthracite, bituminous, subbituminous, or lignite." EPA does not specify how such coal is to be processed prior to being used in a boiler, such as specifications for pulverizing the coal even though such processing could impact emissions. And certain other sources subject to the NSPS, such as units that use natural gas, are exempt from some requirements applicable to other units. Nitrogen oxides standards also vary with respect to the type of fossil fuel used.
       Subpart Da for Industrial-Commercial-Institutional Steam Generating Units applies to units based on heat input capacity. Emission limits for nitrogen oxide are variable, based on different types of natural gas and distillate oil, residual oil or coal used in an affected unit. Emission limits are adjusted when two or more fuels are combined.
       Subpart F for Portland Cement Plants imposes particulate matter standards on the basis of pounds per ton of feed into a kiln. Regulated sources have options to determine clinker production and have protocols for missing data on such production using most recent data. 
       Subpart CCCC addressing incineration units exempts certain incinerators, including air curtain incinerators that burn only wood waste, clean lumber and mixtures of wood waste, clean lumber and/or yard waste. Such incineration units are not subject to emission standards, but must only obtain a Title V permit. Thus, not only are such incinerators not regulated as an affected source, they are allowed to burn material that is prohibited for pellet fuel stoves, e.g., yard waste.
      It is abundantly clear from the administrative record that EPA did not consider alternatives to its 2015 standards. And only a single alternative is now offered in Option 3 of this proposed rule (a somewhat less prescriptive version of the 2015 final rule). Thus, the lack of serious consideration of alternatives and regulatory options in the wood heater rule is indicative of a seriously deficient administrative process and a result that does not conform to the statute or past practice.
      Other NSPS, such as those cited above, allow for explicit exemptions, adjust required emission rates based on fuel type(s), exempt sources within a category and explicitly allow for the use of fuels that are prohibited for pellet fuel stoves. This is not to argue that all such flexibilities are required for the NSPS affected by this proposed rule. But it does undermine EPA's assertion that precise correlation between test conditions and subsequent operation of an affected source is a necessary component of this NSPS.
      The Administrative Record for the 2015 Rule and this Proposed Rule Does Not Support Options 1 or 3
      EPA's supporting rationale for Options 1 or 3 is either dated or irrelevant to its determination that pellet fuel requirements and liability for pellet stove operators are part of BSER for affected sources. For example, EPA's Remand of the Record memorandum cites several articles that predate this rulemaking by eight years. At best, these articles provide anecdotal information concerning the desirability of good quality pellets. But they do not support a determination that cementing pellet fuel requirements into place in the C.F.R. until such time as EPA deems changes should be made -- or perhaps until such time as the Agency has sufficient manpower to investigate and make changes to pellet fuel standards -- is the BSER for pellet fuel stoves.
      To be clear, PFI does not disagree with the need for pellet fuel quality; it has been the leading organization both promoting and developing such standards. And, as EPA cites, PFI also attempted to work with the Agency as it developed its current standards. But there is fundamental and intractable difference between industry standards and government regulation. On one hand, industry standards promote best practices and retain an incentive for the private sector to innovate and improve upon current standards and testing protocols when needed, drawing on deep expertise concerning the product they are producing. On the other hand, placing specific standards into the C.F.R. effectively puts a government agency in charge of what has been, to date, the responsibility of private industry. And placing an agency in charge of private sector standards contains no guarantee that the agency will be able to acquire or maintain sufficient technical expertise in order to promulgate new standards or have any incentive to allow for innovation.
One commenter (0042 p.1 and public hearing testimony 0142 p.52) similarly asserts that  - 

      EPAs proposed rule squarely seeks comment on whether the Agency has legal authority to establish pellet fuel requirements pursuant to Clean Air Act section 111. Here, the answer is no.

For example, EPA states that under Clean Air Act section 111(b)(5), the Agency cannot prescribe a specific technology that must be used to comply with a standard or performance. Yet this is exactly what EPAs pellet fuel requirements do. They are part of a prohibited system of continuous emission control. ...
      
      As a matter of law and a matter of regulatory policy, EPA should reject any supposed need for highly prescriptive regulatory standards for pellet fuel. This is even more so given that vibrant industry standards exist and, in fact, were in place before EPA decided to impose regulations. In brief, the errors that EPA committed in the 2015 rule must be corrected, both as a matter of law and common sense.

Likewise, during the public hearing, a commenter (public testimony 0142 pp.49-51) testified:
      Perhaps equally troubling from an industry standpoint is that EPA's detailed requirements lock current technology in stone. Manufacturers cannot vary from federal specifications or their fuel will be strictly prohibited from being used in certified pellet stoves. Presumably, if new investments were made and new pellet fuels were developed, the certified pellet stove market would be forever closed off unless EPA decided to act through a lengthy and uncertain regulatory process. This frankly destroys any industry's incentive to innovate.
Response: 
We disagree with the commenter that we are prescribing a specific technology for compliance, but we appreciate the commenters' concern regarding codified pellet specifications precluding innovation. As explained in EPA's November 2016 Supplemental Response to Pellet Fuels Institute's Comments For Remand of the Record Based on Existing Docket for Residential Wood Heaters New Source Performance Standards, the EPA has the authority to impose minimum pellet requirements. As such, the Agency has decided to retain the list of prohibited fuels in 40 CFR 60.532(f) and 60.5474(f), which applies not only to pellets, but to all wood fuels burned in residential wood heating devices subject to this rule. The EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f). See response to comment 6.1.1. 

7.1.3 Comment: EPA's differential regulation of pellet fuel versus other wood fuels in the same source category is not permitted by the CAA
One commenter (0069, pp.1, 17-18) contended that it is inconsistent, arbitrary and capricious of EPA to claim that allowing variation between testing and operation of pellet fuel heaters would unravel the rule, while EPA has not claimed the same for other heater and fuel types (cord wood, chip wood) - 
      Even if EPA had authority to regulate pellet fuel under CAA §111, the 2015 standards are unreasonable and defy common sense:
      o Under the NSPS, pellet sizes are regulated down to a thousandth of an inch. If pellets vary from size standards, they cannot be used in certified stoves.
      o EPA's current regulations define 34 different requirements for pellet fuel, compared with just 7 requirements for chip wood and no specifications at all for cord wood, the largest fuel source in the NSPS category. EPA illogically applies the most onerous regulations to the cleanest fuel....
      EPA Imposes Vastly Different Regulatory Regimes for Pellet Fuel versus Wood Chip or Cord Wood Stoves
      EPA's claims that allowing any variation in pellet fuel would "unravel the basic structure of this rule, in that the operation of the heater by the homeowner would not be comparable to how the stove was operated during certification testing." As an initial matter, most NSPS require initial certification testing and actual operating conditions will invariably differ from the conditions present during certification testing. For example, the ambient temperatures at a coal-fired power plant will vary greatly over a year as well as the specific content of coal that is burned at the facility. The same is true for many other NSPS. Thus, EPA's assertion does not provide any additional legal support for its standard; if EPA's statement were valid, most all other NSPS that the Agency has promulgated over the last 40 years would be subject to similar "unraveling."
      Second, EPA's justification of pellet fuel comments is both perplexing and directly opposite its treatment of other sources regulated under the 2015 NSPS. Specifically:
       Pellet fuel appliances represent a minority of all wood stoves regulated by the NSPS. Shipments of pellet stoves in 2013 were 54,055 units as compared with 206,409 for cordwood stoves and 784,633 for gas stoves, including 322,600 gas log stoves. This means that pellet stoves represented about 5% of home heating stove shipments in 2013 and roughly a third of wood-fueled stoves.
       EPA's 2015 regulations, however, allow for certification testing for cord wood stoves using "crib wood" which no one uses in actual operation of appliances regulated under subpart AAA and hydronic heaters under subpart QQQ. As EPA explains "crib wood is a specified configuration and quality of dimensional lumber and spacers that improves the repeatability of the test method." It is entirely distinct and different from "cord wood" that is what a typical homeowner would use when operating a stove. But in the final 2015 rule, EPA allowed for continued crib wood testing based on the concern that many manufactures do not have experience with cord wood testing. Use of cord wood testing is voluntary.
       Therefore it is wholly inconsistent and arbitrary and capricious for EPA to claim  -  with respect to pellet fuel  -  that allowing even a miniscule variance between testing and actual operation of a stove would "unravel the basic structure of the rule" while accepting  -  for the majority of stoves subject to the 2015 NSPS  -  that large variances in size, density and other parameters of the fuel used in the "real world" versus the testing lab does not undermine the NSPS.
       As promulgated in 2015 and as proposed under Options 1 and 3, it would be legal for someone to gather irregular size wood of different types and quality and fuel a cord wood heater as long as it was done "consistent with the owner's manual" But it is illegal for anyone to fuel a pellet fuel heater with pellets that have not been: (a) graded under a licensing agreement with an approved organization; (b) that meet specific size and content parameters, and that do not contain any amount of prohibited fuels within the pellet.
      With respect to chip wood, EPA imposes vastly less onerous regulatory requirements. Chip wood is subject to six different standards. 40 C.F.R. §§60.532(d); 60.5474(d). Moreover, for chip wood, EPA does not include a prohibition on containing "none" of the prohibited fuels in §60.532(f) and 60.5474(f) as it does for pellet fuel. Id. §§60,532(e)(8), 60.5474(e)(8).
      Rather than explore if there were other regulatory options for pellet fuel in this rulemaking to address variability in real world stove operation, EPA instead balked. There is nothing in the record that shows EPA explored any alternative other than its preferred result of excessive regulation. Thus, simply on the basis of differential treatment as between sources regulated in the same NSPS source category, the 2015 pellet fuel requirements should be repealed.

Another commenter (0040 p.1) similarly questioned why EPA was so strictly regulating the cleanest of wood fuels  - 

      With low emissions and very little ash, wood pellet fuel is already one of the cleanest ways to heat your home with the warmth that wood heating provides. Pellet fuel is cleaner and has lower emissions than cord wood and chips. However, EPA NSPS ruling defined 34 different requirements for pellet fuel. As for the competition, cord wood has no specifications & wood chips have only 7. Why isn't EPA promoting the cleaner option instead of making it more expensive with requiring expensive certification programs?

Likewise, another commenter (public testimony 0142 pp.49-51) opined that  - 
      [D]espite 30 years of PFI's efforts in this area, EPA's NSPS regulations unfairly treat pellet fuel as though it were the dirtiest wood fuel available, imposing exponentially more regulation on this fuel than any other. Let me give you a few examples of this regulatory overkill: Under the NSPS, pellet sizes are regulated down to a thousandth of an inch. If pellets vary from size standards, they cannot be used in certified stoves. EPA's current regulations define 34 different requirements for pellet fuel, compared with just seven requirements for chip wood and no specifications at all for cord wood, by far the largest fuel source in the NSPS category. EPA illogically applies the most onerous regulations to the cleanest fuel. ... EPA's 2015 analysis shows particulate matter and volatile organic baseline emissions from pellet stoves to be far below the 2020 Step 2 controlled emissions for almost all other categories. This seriously undermines EPA's entire rationale for the standards.
Response: 
We point out that pellet fuel is a manufactured product, while cord wood is not. The reasons for imposing minimum pellet requirements, which EPA has the authority to impose, are detailed in EPA's November 2016 Supplemental Response to Pellet Fuels Institute's Comments For Remand of the Record Based on Existing Docket for Residential Wood Heaters New Source Performance Standards. Pellet fuel heaters generally emit less PM because they are automatically-fed systems; pellets are delivered to the pellet fuel heater at a uniform speed. However, pellet fuels are more susceptible to unintended additives such as wood that may have been treated with oils, paint, varnish, etc. that can harm public health when these pellets are burned in pellet fuel heaters. The Agency has decided to retain the list of prohibited fuels in 40 CFR 60.532(f) and 60.5474(f), which applies not only to pellets, but to all wood fuels burned in residential wood heating devices subject to this rule. The EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f). See response to comment 6.1.1. 

7.1.4 Comment: The pellet fuel requirements cannot be justified on the basis of cost effectiveness
One commenter (0069, pp.2, 18-20) asserted that the low emissions of pellet fuel heaters relative to other types of wood heaters makes the cost per ton of emissions reduction unjustified  - 

      EPA's 2015 analysis shows particulate matter and volatile organic baseline emissions from pellet stoves to be far below the 2020, Step 2 controlled emissions for almost all other categories. This seriously undermines EPA's entire rationale for the standards. ...
      EPA's Standards for Pellet Fuel Are Disproportionate and Unjustified
      As demonstrated above [in comment 0069], EPA imposes vastly more regulations on pellet fuel that other fuel types utilized to address the NSPS. EPA takes this regulatory approach despite the fact that pellet stoves are the best performing stoves from an emissions standpoint, according to EPA's own estimates. As shown below, fine particulate matter ("PM2.5") emissions for pellet-fueled wood stoves show that such stove are the cleanest burning wood heater appliance, often by several orders of magnitude. For example, compare the 0.0021 tons/appliance/year emission level for PM2.5 for a pellet-fired woodstove versus the same emissions from a free standing woodstove catalytic (0.0101 tons/appliance/year) or outdoor hydronic heaters (0.1383 tons/appliance/year). 
      Overall, based on information in EPA's 2015 Regulatory Impact Analysis ("RIA") pellet stoves are anywhere from 2 to 65 times cleaner than other wood stoves/furnaces for PM 2.5 pollutant. Baseline emissions for pellet fuel wood stoves were also much lower than all other categories that EPA examined. Compare the emissions (tons) estimate for pellet-fired wood stoves with all other stove categories that EPA examined in the 2014-2015 rulemaking (Table 4-2, below). [Commenter includes Table 4-2. entitled "PM2.5 Tons per Appliance Estimate (Baseline)" from EPA's January 2014 RIA.]
      It is therefore hard to rationalize imposing the most inflexible regulation on pellet stoves/fuel than other wood burning appliances within the regulated source category that have much higher emissions on per stove basis. EPA's 2015 rule, the 2015 RIA and this proposed rule offer no analysis on what should be a central point of the rulemaking.
      EPA's cost analysis also offers nothing to support its regulatory approach. Pellet stoves represent the only category of regulated appliances with the possibility of zero or near-zero net benefits. EPA has projected that pellet stoves will incur $1.52 million in additional regulatory costs (which do not include any costs related to fuel) and that such this expense may not be offset by projected monetized benefits of $2 to $5 million. In addition, the projected monetized net benefits of regulating pellet fuel stoves, even if net positive are miniscule when compared with other source categories. At most, EPA projected $3 million in net benefits for pellet stoves as compared with up to $3.7 billion in net benefits for forced-air furnaces. [Commenter includes Table 1 from the Final Rule's preamble, entitled "Summary of Compliance Costs, Monetized Benefits, and Monetized Net Benefits (2013 Dollars) by Type of Heater in the 2015-2020 Time Frame for the Final Rule"]
      The disparity in regulatory treatment of different stove types in the same NSPS and EPA's overall approach to regulating pellet fuels is glaring. Yet it is not discussed or addressed by EPA in this rulemaking, given its insistence that it is under no legal obligation to consider costs when promulgating BSER and that the Agency can remain "unaware" of the same.
Another commenter who asserted that the Agency has no legal authority to establish pellet fuel requirements under CAA section 111 (0042 p.1 and public hearing testimony 0142 p.52), as summarized above in section 7.1.2, also contended that  - 

      Even if EPAs standards could pass legal muster, the standards cannot be justified on the basis of cost. EPAs analysis shows that VOC reductions anticipated from pellet requirements would cost $112,894 per ton as compared with a cost of $334 per ton from other wood stoves. Such an extreme imbalance is, on its face, arbitrary and capricious.

Response: 
We agree that pellet fuel heaters (on average) tend to already be lower emitting than cord wood heating devices (on average) and therefore many pellet fuel heater manufacturers, in order to attain the stepped limits, did not need to invest as much in R&D as manufacturers of cord wood heating devices did. For the reasons that we discuss in the final rule preamble and in response to the above comments, the EPA has decided to (A) retain the list of prohibited fuels in 40 CFR 60.532(f) and 60.5474(f), which applies not only to pellets, but to all wood fuels burned in residential wood heating devices subject to this rule, and (B) remove the minimum requirements that were stated in 40 CFR 60.532(e)(1)-(7) under subpart AAA, and in 40 CFR 60.5474(e)(1)-(7) under subpart QQQQ, although the Agency is retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f).

7.1.5 Comment: The pellet fuel requirements are unenforceable
One commenter (0069, pp.2, 20-21) asserted that EPA's pellet fuel standards are unenforceable because the end users are homeowners  - 
      
Homeowners and even casual operators of pellet fuels are potentially subject to fines of $37,500 per day if they use non-compliant pellet fuel. Under EPA's regulations, consumer "misfuelling" of a pellet stove is a violation of CAA. ...
      EPA has explained that pellet fuel standards not only regulate the type of pellet fuel that can be used in new wood heaters, but that the rule affects "end users" of pellet stoves. The rule "applies to both [manufacturers and distributors] as well as end users . . . It is a violation under the NSPS for the end user to operate the stove improperly  -  that is, not according to the NSPS and not according to owner's manuals."
      EPA staff have stated that enforcement of end user violations is "problematic." Perhaps in recognition of this, EPA staff further theorized that it may need help when it comes to taking enforcement actions against homeowners. As EPA noted "[o]ne suggestion the agency considered was an EPA hotline so that neighbors can report end-use violations and then EPA could follow up." But EPA staff indicated that since "EPA is a national organization, getting out to every local area will stretch EPA resource pretty thin"
      While EPA has expressed "hope" that states, locals and tribes might assist in enforcement efforts, the Agency has not explained how enforcement actions might proceed in non-delegated states, nor precisely how end user violations  -  e.g., a homeowner or causal operator's failure to use certified pellet fuels when fueling a heater in a private residence  -  would be established by the Agency. Practical questions (as well as privacy concerns) regarding how EPA or any other state or regulatory agency would determine what pellets were used by a homeowner (barring voluntary admission by the homeowner/operator of this practice) abound. But EPA provides no ready answers in any of the information placed in the docket.
      Given that violations of the 2015 standards extend to any "operators" of pellet wood heaters, EPA did not explore how it would support issuing a Notice of Violation to violators who may be casual or intermittent. Similar to EPA's duty to investigate cost, energy requirements and other factors in promulgating an NSPS, EPA cannot simply ignore such questions during notice and comment rulemaking. If a standard is practicably unenforceable, EPA has a duty to consider alternative, including not taking its "preferred" regulatory approach.

The above sentiment was also summarized during the public hearing (public testimony 0142 pp.49-51).

Response: 
The EPA disagrees that the pellet fuel requirements are unenforceable. First, the EPA can focus our enforcement efforts with respect to pellet fuel on reviewing and approving third-party organizations, and ensuring these organizations are effectively safeguarding the quality of the pellets available for sale for residential wood heating. These third-party organizations are responsible for certifying that the pellet fuel does not contain any of the prohibited fuels listed in 40 CFR 60.532(f) and 60.5474(f), as assured through a quality assurance program licensed by this EPA-approved third-party organization. Licensed quality assurance programs will ensure all pellet producers are producing pellets free of prohibited materials, and that also meet the pellet specifications required by the EPA-approved third-party organization. 

Second, with regard to overall implementation and enforcement of the Wood Heater Rule, EPA will continue to coordinate with State, local, and tribal agencies to ensure compliance with the regulatory requirements. EPA may delegate to these agencies certain enforcement authorities of the Rule including the enforcement of prohibitions on the installation and operation of wood heaters in a manner inconsistent with the installation and owner's manual. Furthermore, agencies may adopt or enforce their own wood heater requirements that are more stringent than the federal requirements. Consistent with the principle of cooperative federalism, EPA works with our state, local, and tribal partners to more efficiently and effectively protect human health and the environment.

7.1.6 Comment: EPA provides no basis of information for either retaining or revising the existing pellet fuel standards
One commenter (0069, pp.15-16) asserted that the Agency lacks the information required to either retain or revise the pellet fuel standards/requirements  -  
      EPA Lacks Information that Supports 34 Separate Standards for Pellet Fuel
      EPA has made no effort in this rulemaking to update information that either supports retention of the existing standards or promulgation of the revised standards in the proposed rule. The administrative record heavily relies on a 2016 memorandum developed, after the fact, to support litigation regarding its 2015 standards. And this memorandum itself cites and relies on information which is outdated, irrelevant or misinterpreted.
      In this regard, EPA has abundantly made clear that the 2015 rule regulated pellet stoves and pellet fuel for the first time. While initially working with PFI, EPA then makes clear that it "decided to promulgate its own list of standard minimum pellet requirements so that these requirements could not change without EPA action." EPA sent out CAA §114 information collection request letters  to pellet stove manufacturers but not to pellet fuel producers.
      A large part of the information that EPA relied on for the 2015 pellet fuel standards is also either not in the public record due to CBI claims or it is heavily redacted. For example, EPA cites and relies on 2010 information from unidentified "Pellet Stove Manufacturers." But even here the question EPA asked of manufacturers was not whether pellet fuel should be regulated but whether there were characteristics that were critical for pellet fuels to be used in products they manufactured. No questions  -  as far as can be determined  -  were asked as to whether pellet stoves might be better designed to use different types of pellet fuel, to be more resistant to corrosion or other adverse effects of some fuel types, or whether the stove manufacturers favored federal regulation of their customers. And while the stove manufacturers apparently supported some standards for fuel dimension, ash content, and fines, and other parameters some of the comments submitted to EPA were stated in highly qualitative terms such as "keep as low as possible" rather than advocating specific, static limits. Thus, these comments do not support the specific list of standards promulgated by EPA in 2015 and which the Agency has proposed to be kept in regulation in Option 1 of this proposed rule.
      Ironically, EPA also cites comments from two organizations (Maine Pellet Fuels Association and Vermont Golden Harvest Biofuels) as supporting EPA's action to promulgate immutable regulations for pellet fuel. But the Maine Pellet Fuels Association comments  did no such thing. This organization supported using testing in Maine versus testing for certification using PFI or other equivalent organization standards. Poignantly, and yet omitted by EPA when referencing their comments, the Maine association also stated that "[p]ellet quality is not at issue, at least certainly not in Northern New England, with regard to air quality." The bottom line of the Maine association comments was that the association did not "want to be required by EPA to participate in PFI's unworkable certification program" and not that the association supported EPA's promulgation of detailed standards. Likewise, EPA cites the Vermont Golden Harvest Biofuels comment as supporting EPA regulation when: (a) the actual comments are not available in the docket; and (b) it is represented that their comment opposed delegating legislative power to a private entity, not that it supported transferring full regulatory power to EPA.
      EPA further attempts to buttress the rationale for its 2015 standards and its proposal to retain or modify such standards in 2019 by citing 2010 publications that are also unavailable in the public record due to copyright issues. This publicly unavailable information includes:
       March 2010 Hearth & Home article  where contents of the article are not available in the docket yet EPA extensively quotes from the article to support its standards. 
       Two April 2010 Home & Hearth articles  similarly unavailable in the public docket, yet quoted from by EPA.
       A September 2011 Hearth & Home article  also unavailable in the public docket, but reportedly recounting a meeting between EPA and industry representatives.
      Other information that is available in the docket hardly supports EPA's pellet fuel requirements as promulgated in 2015. For example, EPA cites a letter from a pellet fuel manufacturer that cites support for government involvement to "move the standards process forward." But this letter was sent four years before EPA proposed standards so it cannot be viewed as supporting EPA's 2015 final rule. Moreover, the letter indicates that EPA's position at the time was that "if the industry does not come up with standards then the EPA will." In point in fact, industry including PFI did come up with standards making the second half of the equation inoperative.
      At bottom, much of the information EPA relies on was not submitted in response to the 2014 proposed rule, is anecdotal and does not examine what alternatives may be available to federal regulation of the pellet fuel sector.

Response: 
We disagree with the commenter's rendering of the record supporting the pellet requirements and in particular of EPA's November 2016 Supplemental Response to Pellet Fuels Institute's Comments For Remand of the Record Based on Existing Docket for Residential Wood Heaters New Source Performance Standards. As explained in detail in that supplemental response for remand of the record, the EPA worked with PFI for many years and relied heavily on PFI's list of pellet specifications for the 2015 NSPS requirements, but they were previously inadequate to protect public health because they did not include requirements for metals. After the 2015 pellet fuel minimum requirements were promulgated, PFI added requirements for metals in the November 9, 2018 version of PFI's Standard Specifications for Residential /Commercial Densified Fuel. 

As stated in response to other comments, the EPA has the authority to impose minimum pellet requirements. As such, the Agency has decided to retain the list of prohibited fuels in 40 CFR 60.532(f) and 60.5474(f), which applies not only to pellets, but to all wood fuels burned in residential wood heating devices subject to this rule. The EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ. We are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f). See response to comment 6.1.1. 

Regarding CBI material, the Agency takes its responsibility to protect confidential business information seriously and cannot disclose such information publicly. Regarding copyrighted journal articles, it is against the law to reproduce them in the docket, but they are available for review in the EPA's Reading Room as well as available online, in libraries and in other locations.

7.2	The EPA Should Merely Reference the Pellet Fuel Institute's Standards
Section 7.2 includes comments that argue the Agency should merely reference PFI's standards, thereby allowing PFI to change the standards as innovative progress occurs, rather than require a lengthy and infrequent rulemaking to allow such changes.

7.2.1 Comment: Referencing PFI's standards in lieu of static requirements allows innovation
One commenter (0042 p.1) asserted that  - 

      The PFI Standards Program includes requirements for all of the parameters listed in the EPAs NSPS. In some cases, though the EPA requirements contradict the PFI Standards and in some cases, they are not accurately stated. PFI understands that the end goal is for appliances to achieve an emission rate specified by the EPA, and that it be done using standardized fuel. In the future new technology may be discovered that allows materials outside of today's grades to become useable, however if these parameters are listed in the regulation it will prevent innovative thinking that would allow for new ways to make use of these potential fuels of the future. The EPA should reference the PFI standard to determine the criteria for the fuel grades and that the EPA requirement indicates that by listing specific limits within the regulation it negates the possibility that creative engineering could find ways to cleanly burn materials that don't meet the published limits. The EPA should not list specific compliance requirements for the individual grades, but allow PFIs acceptable limits within its standard. 

Another commenter (0040, p.1) agreed and further contended that the market tends to weed out poor quality pellet producers  - 

      The Pellet Fuels Institute (PFI) set standards for pellet fuel many years ago that has served our industry well. The standard requires good feedstock to be used in order to meet the standards on sodium and ash content. So, there is no need for additional requirements from the EPA...Some worry about manufactures putting out bad pellet fuel and not meeting the current PFI standards. Over the years, we have seen the marketplace get rid of businesses that do not produce good pellet fuel by not giving them repeat sales. The market is not that big and the word gets out fast. Consumers and retailers do not continue to buy from producers that make bad pellet fuel.

Response: 
We appreciate the commenters' concerns and have taken action in this final rule to rely on EPA-approved third-party organizations, like PFI, to maintain the list of pellet requirements / specifications and ensure pellet producers meet these specifications and not contain any of the prohibited fuels listed in 40 CFR 60.532(f) and 60.5474(f). Specifically, the EPA has decided to remove the minimum requirements in subsections 1 through 7 listed under 40 CFR 60.532(e) under subpart AAA, and in 40 CFR 60.5474(e) under subpart QQQQ, but we are retaining the prohibition that was stated in the eighth pellet fuel minimum requirement that pellet fuel must not contain any of the prohibited fuels in 40 CFR 60.532(f) and 40 CFR 60.5474(f). See response to comment 6.1.1.

We agree that enforcing a list of pellet requirements in a federal rule serves to codify a static list of requirements, until an updated rule is promulgated. Innovations may occur in the interim regarding pellet fuel heater technology, which may require an update to the list of pellet specifications, prior to when a revised rule is promulgated. Third-party organizations can update the list of pellet requirements in step with developments in pellet fuel heater technology, so as to not delay or preclude innovation that may improve pellet fuel heater operation and decrease emissions. The EPA is therefore removing the part of this codified list that is already specified by third-party organizations and/or specified by the list of prohibited fuels and maintaining approval authority over third-party organizations. This final action will allow for pellet specifications that, while protective, do not unnecessarily preclude, inhibit or delay technological innovation. It should be noted, however, that nothing in this final rule precludes the EPA from proposing and promulgating appropriate additional pellet fuel requirements in the future, if the Agency determines that federally imposed requirements are needed.
 Other & Miscellaneous Comments 
Section 8 presents comment excerpts and summaries regarding suggested types of relief in lieu of the sell-through, requests for extending the comment period and/or additional public hearings, and other miscellaneous comments (including those not specific to this proposed rulemaking).

8.1	Other Types of Relief in Lieu of Sell-Through 
Section 8.1 provides comments suggesting other types of relief in lieu of the proposed sell-through for hydronic heaters and for wood heaters regulated under subpart AAA. No comments were submitted suggesting other forms of relief in lieu of the sell-through specific to forced-air furnaces.

8.1.1 Comment: Other types of relief in lieu of sell-through for hydronic heaters
Multiple commenters suggested relaxing of the Step 2 limit for hydronic heaters and some even suggested making the Step 1 limit voluntary. For example, in a form letter campaign, numerous commenters (0097, 0115, 0135, 0143, 0144, 0145, 0147, 0149, 0151, 0152, 0153, 0154, 0155, 0158, 0159, 0161, 0163, 0165, 0166, 0170, 0171, 0172, 0173, 0175, 0176, 0177, 0181, 0183, 0184, 0188, 0189, 0190, 0191, 0193, 0194, 0196, 0197, 0199) supported the Hawken Proposal for hydronic heaters which contended  - 
      
      [T]hose ridiculously high Step 2 standards should be abandoned for hydronic heaters. PART 2 - The "Hawken Proposal" for hydronic heaters takes the additional step of further recommending that Step 1 standards be made VOLUNTARY. By doing so, the EPA allows states and municipalities to adopt the "Step 1 Standards" in their jurisdictions as they see fit. Prior to the adoption of NSPS, this system worked fine - municipalities in the Upper Peninsula of Michigan where citizens live in the woods were able to continue to burn wood as they deemed appropriate, while other states such as New York and even some local municipalities adopted regulations virtually identical to Step 1 standards in NSPS. I SUPPORT allowing states and local municipalities the freedom to choose how to govern at a local level, rather than passing such far-reaching federal rules on how I heat my home with my hydronic wood heater. I currently heat my home with a hydronic heater, and if it wears out, I want to be able to replace it with another hydronic heater, without government interference.
      
Likewise, one manufacturer (0067 p.2) commented that current Step 2 emissions levels are too strict for a healthy industry to continue and 2 more years of development time would be beneficial to all stakeholders in the industry. 

Another manufacturer (0132 p.1) supported moving the adoption of a stricter particulate limit from 2020 to 2023, because the limit EPA is proposing is difficult to meet for cord wood fueled equipment.

Response: 
The suggestion that EPA relax the Step 2 standard for hydronic heaters and move the adoption of a stricter particulate limit from 2020 to 2023 is outside the scope of this rulemaking. The Agency is not considering or taking any final action with respect to the timing and stringency of the Step 2 standards as part of this rulemaking. 

8.1.2 Comment: Other types of relief in lieu of sell-through for AAA wood heaters
A retailer (0022 p.1) requested more testing time and time to comply with current standards in the form of a five-year delay for retailers and manufacturers, to allow sale of heaters that were produced prior to (and that don't meet) the 2020 laws. They cited several reasons for requesting this longer sell-through period, including  - 
      
      We would like to see the proposed 2020 NSPS standards delayed until at least 2025 because:
      a. the delay effect on pollution would be negligible
      b. manufacturers are still trying to recoup costs for the 2015 rule changes
      c. sales have dropped significantly, since consumers are not purchasing current approved products and want the 2020 approved products.
      
      Enable Dealers to sell beyond the May 2020 date (or new date), because:
      a. dealers are not purchasing stock
      b. distribution has come to a standstill.

This same commenter (0022 pp.1-2) also suggested an exemption for small manufacturers  - 

      a. there is already an exemption for sauna and cookstoves because of low volume
      b. in the beer industry, craft beers are not subject to the extent as high-volume beers
      c. this enables new products, research, and encourages the potential market.

      Response:

The request for a five-year delay for retailers and manufacturers to allow the sale of non-compliant wood heating devices and the suggestion of an exemption for small businesses are outside the scope of this rulemaking. The Agency is not considering or taking any final action with respect to the requested delay or suggested exemption. 

8.2	Request for Extending the Comment Period and/or Additional Public Hearings 
Section 8.2 provides comments requesting an extension of the comment period as well as comments requesting additional public hearings.

8.2.1 Comment: Request for or opposition to an extended comment period
Several commenters (0018, 0020, 0023, 0024, 0068, 0142, 0197, 0198) requested an extension to the 45-day NPRM comment period to be extended for a total of a 90-day comment period. Some of these commenters (0018, 0023, 0024, 0142) also requested an extension to the 75-day ANPRM period to be extended for a minimum total of 120-days. 

Environmental organizations (0075, p.6) noted  - 
      
      The Clean Air Act requires that EPA provide an opportunity for the public to comment on proposed actions for thirty days after a public hearing is held on the action. 42 U.S.C. §7607(d)(5). The requirement provides "an opportunity for submission of rebuttal and supplementary information." Id. EPA held a public hearing on this proposed rule on December 17, 2018. See 83 Fed. Reg. at 61,574. Because the comment period for this proposed action is closing less than thirty days later, EPA is in violation of Act's procedural requirements for this rulemaking. Although, for the reasons given above, EPA must not finalize this unlawful effort to weaken critical air pollution standards in any event, the agency must cure this procedural defect before taking any further action to advance the proposed rule.
      
Furthermore, the Western Governors' Association (0197 p.1) pointed out that  - 

      On December 14, 2018, the Western State Air Resources Council (WESTAR) requested that EPA extend the comment periods for the NPRM and ANPRM for an additional 45 days to provide sufficient time for state regulators to fully evaluate these proposals. ... EPA summarily denied these requests, hampering the cooperative federalism that this Administration has made a priority.

On the other hand, one commenter (0061 pp.1-2) strongly objected to an extension of the comment period, due to delays in the Agency's original rulemaking timeline and increasing harm to industry as the 2020 deadline approaches.

Response: 
We appreciate the requests for an extension the comment period and regret that we were unable to extend the NPRM comment period to the requested 90 days, given the timely nature of the retail sell-through proposal as the 2020 compliance date approached. However, we note that the public comment period originally ended on January 14, 2019 for this proposed amendment but was re-opened on February 7, 2019 for an additional 5 days until February 12, 2019, because the original comment period did not allow a full 30 days after the public hearing.

8.2.2 Comment: Request for or opposition to an additional public hearing
Several commenters (0018, 0020, 0023, 0024, 0142, 0197) requested that the EPA convene a second public hearing with proper advance notice so that state and local agencies could participate. For example, the Western Governors' Association (0197 p.1) noted that  - 

      WESTAR also requested that EPA hold a second public hearing in the West, as the only hearing on these proposals was held in Washington, D.C., with a minimal two-week notice. EPA summarily denied these requests, hampering the cooperative federalism that this Administration has made a priority.

Likewise, another commenter (0023, 0142) requested a second public hearing to be held in the western United States. A third commenter (0024 p.1) echoed this but specified the Pacific Northwest.

Response: 
We appreciate the request for an additional public hearing in the West and regret that we were unable to meet that request, due to limited Agency funding, which precluded a second public hearing.

8.3 	Miscellaneous Comments
Section 8.3 provides miscellaneous comments that are not necessarily directly relevant to the proposed rulemaking, but that EPA has nonetheless reviewed for consideration. These comments include that EPA should focus resources on test methods, that EPA should focus resources on compliance and enforcement, that wood heating should be regulated locally instead of nationally, that wood is a renewable resource and not a pressing problem, and that wood heating should not be banned.

8.3.1 Comment: EPA should focus resources on test methods
Several commenters (0025, 0059, 0067) suggested that EPA should focus its limited resources on improving test methods.

A state regulatory agency (0059 p.2) asserted that  - 

      With the adoption of the first wood heater standard in 1988, the structure of the NSPS intentionally imposes compliance responsibility on retailers to ensure that clean devices are offered uniformly in the marketplace. Retailers are acting now to plan their inventory for sale in 2020 to be in compliance with federal regulations. Retailers will complete their purchasing by the time EPA is able to formally revise the standards, meaning that rather than completing this action, EPA should redirect its very limited resources to develop the cordwood test methods and/or protocols. Completing the cordwood test methods will ensure that EPA and manufacturers have accurate and reliable test methods and can be conducted by testing companies as efficiently as possible.

Likewise, another commenter (0025 p.1) suggested that  - 

      Let's work together on this as partners. .. [D]eveloping and finalizing realistic testing methods for the next 20+ years should be a higher priority at this point than lowering the allowable emissions to the Step 2 level. It's seems like we are chasing a moving target.

A manufacturer (0067 p.2) indicated confusion over testing for certification, stating  - 
      
      Some of the uncertainty has been specific to our own products. Our G and GS Series heaters have been recognized in the group of best technology available and the end results of our testing in 2013 show that some of the models tested should pass Step 2 having 0.07lb/mmBTU tested with crib wood. However, we have been left unclear whether they do or not because of some technicalities in the 2015 test method that do not have to do with the end results of the test (1st hour filter pull). It would be helpful to have clarification about this matter as soon as possible.

Response: 
We appreciate commenters' support for improving test methods. The Agency has begun work in this regard and plans to allocate more resources to this effort in the future.

8.3.2 Comment: EPA should focus resources on compliance and enforcement
Several commenters (0047, 0126, 0132, 0142) suggested that EPA should focus more resources on compliance and enforcement.

Commenters (0047, 0126) stated that the solution is not to place further restrictions on emissions of EPA-approved wood heating devices, but rather to remove non-EPA approved devices from operation.

One commenter testified at the public hearing (0142 pp.37-38) that  - 
      I think EPA needs to focus its resources on compliance and existing litigation. We have thousands and thousands of illegal, newly manufactured uncertified new outdoor wood boilers and furnaces still out there that are openly sold around the country. There is a company in Missouri, Acme Furnace Company, claiming it offers the highest quality outdoor furnace available on the market, even though the manufacturer has no certified units and openly sells non-Step 1 units. The manufacturer said that EPA's laws and regulations may not apply in Missouri, and that the regulations may have already been overturned. So, where does all this leave us? It's emboldening people. It is also disconcerting that the parent company has 81 retailers in 21 states, including New York, and has no indication anywhere on their website that wood furnaces and boilers need certification. Even more concerning is that EPA's compliance office indicated that the Agency has no record of the manufacturer's existence or continued operation. We need EPA to craft a regulatory framework that supports efforts to modernize the sector and then stick to it. Do not approve this proposal.
Likewise, another commenter (0132 p.4) stated that  - 
      I live in a suburban area of Minneapolis, MN. I rarely if ever smell wood smoke in the winter. When I do it is from a fireplace (recreational burning  -  interesting name) during the holidays. And my windows are usually closed. However, I constantly smell smoke during the summer from neighbor's back yard "fire pits." And my windows are open. In my opinion this is as much of an issue as further restricting EPA certified rural heating equipment.
      Some manufacturers of wood heating equipment are stating that their units are listed to burn coal. However, "wink, wink they can also burn wood." This is a way for them to get around the latest EPA emission regulations and continue to manufacture older, dirtier non-compliant models. As a result emissions from these units now include mercury, sulfur and lead...none of which are found in wood emissions. Tightening the Regulation will only push less ethical manufactures to do the same. Coal is cheap. Compliance is not.
      ENFORCEMENT In the past year we have seen an increase in small rural wood boiler manufactures (usually small rural welding shops). When asked if their equipment is certified, the answer is always no.... "it doesn't matter because the EPA is not enforcing the limits." But their equipment is cheap (no R & D, no testing, or certification costs, etc.). Thus the compliant manufacturer loses a sale.
      Why produce regulations when there is no enforcement? Don't go after the companies and dealers who are trying to comply, go after people who have no intention of complying. If not, the whole exercise is a waste of time and money. Adding additional regulations will not change the enforcement issue.

Response: 
The EPA Office of Enforcement and Compliance Assurance (OECA) manages and oversees a national wood heater compliance program. To ensure compliance with the applicable wood heater emission standards and other requirements of the Wood Heater Rule, manufacturers must have their applicable residential wood heaters undergo certification testing at an EPA accredited laboratory to verify their heaters meet the required emission standards and complete the certification process laid out in the federal regulations. The regulations require manufacturers to obtain an EPA Certificate of Compliance for each wood heater before they manufacture, offer for sale, advertise, or import a wood heater into the United States. EPA recently developed and made publicly available a fully searchable Certified Wood Heater Database to enable consumers to quickly obtain information on all certified wood heaters including information on emissions rates and fuel type used.
In addition to the above, OECA provides compliance assistance by answering questions regarding the applicability of the wood heater regulations to help industry understand and comply with the Rule requirements. To ensure compliance, OECA also conducts inspections of wood heater manufacturers and retailers. All noncompliance is addressed, as appropriate. EPA investigates all citizen tips and complaints that are received. When the Agency has determined noncompliance with the wood heater regulations, the EPA follows up with phone calls, emails, on-site visits, information request letters, and other communications that regularly result in corrective measures that bring a manufacturer or retailer into compliance. Finally, the Agency actively monitors online selling and advertisement of uncertified heaters by reviewing websites and taking appropriate actions to ensure compliance with the regulations.

If a citizen has information of a possible violation of the Wood Heater Rule (e.g., selling or advertising uncertified residential wood heaters), such information can be reported to EPA's Report an Environmental Violation website.

8.3.3 Comment: Wood heating should be regulated locally not nationally
Some commenters (0097, 0115, 0135, 0143, 0144, 0145, 0147, 0149, 0151, 0152, 0153, 0154, 0155, 0158, 0159, 0161, 0163, 0165, 0166, 0170, 0171, 0172, 0173, 0175, 0176, 0177, 0181, 0183, 0184, 0188, 0189, 0190, 0191, 0193, 0194, 0196, 0197, 0199) argued that wood heating should be regulated locally or at the state level, not nationally. For example, one commenter (0172 p.1) asserted that  - 
      
      I have a wood burning furnace that heats my home and shop. It does a good job, wood is a renewable resource and I don't have to worry about the availability or price of propane. If it wears out, I want to be able to replace it with another wood burning heater, without government interference. I also feel that regulations regarding this type of issue are best made locally, not with a one-size-fits-all mandate that applies to the entire country.

Likewise, another commenter (0174 p.1) stated that  - 

      I totally support allowing state and local authorities to regulate hydronic heat furnaces rather than the federal government. The United States is so big and has vastly different conditions that banning new hydronic heat furnaces everywhere does not make sense.

A form letter campaign (0081, 0092, 0097, 0115, 0135, 0143, 0144, 0145, 0147, 0149, 0151, 0152, 0153, 0154, 0155, 0158, 0159, 0161, 0163, 0164, 0165, 0166, 0168, 0170, 0171, 0172, 0173, 0175, 0176, 0177, 0181, 0183, 0184, 0188, 0189, 0190, 0191, 0193, 0194, 0196, 0197, 0199) asserted that the Step 2 limits for hydronic heaters should be abandoned and that the Step 1 limits should be made voluntary, to be adopted (or not) by states and municipalities  - 
      Accordingly, those ridiculously high Step 2 standards should be abandoned for hydronic heaters. PART 2 - The "Hawken Proposal" for hydronic heaters takes the additional step of further recommending that Step 1 standards be made VOLUNTARY. By doing so, the EPA allows states and municipalities to adopt the "Step 1 Standards" in their jurisdictions as they see fit. Prior to the adoption of NSPS, this system worked fine - municipalities in the Upper Peninsula of Michigan where citizens live in the woods were able to continue to burn wood as they deemed appropriate, while other states such as New York and even some local municipalities adopted regulations virtually identical to Step 1 standards in NSPS. I SUPPORT allowing states and local municipalities the freedom to choose how to govern at a local level, rather than passing such far-reaching federal rules on how I heat my home with my hydronic wood heater. I currently heat my home with a hydronic heater, and if it wears out, I want to be able to replace it with another hydronic heater, without government interference.
Response: 
The Agency appreciates the comments regarding support for regulating wood heating at the local level instead of the national level. As noted in the Response to Comment document for the 2015 NSPS, the principal authority for this rulemaking is CAA section 111. CAA section 111 requires national standards for listed source categories. The category "residential wood heaters" was listed on February 16, 1987, and the original rule was issued on February 26, 1988. The EPA has a good history of working with states. Much of the 1988 NSPS has its roots in the first efforts by the State of Oregon. Also, the State of Washington moved the industry forward by establishing tighter standards in 1995 for heaters sold in Washington that have since been met by most wood heating device manufacturers. In 2007, the EPA developed a voluntary program for hydronic heaters and provided financial and technical support for the northeast states to develop a model rule that 10 states have already used as the starting point for adopting state regulations. We note that we have worked with many tribes, states and local jurisdictions to encourage efforts tailored towards the areas with the greatest needs. We note that numerous state and air agencies and the National Association of Clean Air Agencies have requested that we issue a strong federal rule as soon as possible to help them with the many wood smoke pollution problems across the nation. We also note that this rule does not restrict tribes, states or local jurisdictions from establishing more restrictive standards. Finally, the wood heater regulations allow the EPA to approve state requests for delegation of enforcement authority for the rules, e.g., ensuring permanent labels are on new heaters in retail stores. To that end, we work with our state partners, and coordinate/collaborate with them on any enforcement issues.

8.3.4 Comment: Wood is a renewable resource and there are more pressing problems than wood heating
Several commenters (0136, 0145, 0164, 0167, 0172, 0178, 0179) expressed support for wood heating as a renewable resource and further contended that there are more pressing environmental problems than wood heating, in their opinion.

One commenter (0136 p.1) asserted that  - 

      I'm not an expert on determining the amount of pollution put into the air by wood stoves but if you look at the California wild fires, I'm sure they put billions more pollutants in the air than all the wood stoves in the US. So start by stopping the wild fire!!! Next wood is a renewable resource, used for many applications, including heating homes. I will continue heating with wood until I can no longer harvest the fire wood! Maybe California needs to heat with wood, #clean the forest!!

Another commenter (0145 p.1) stated that -

      I support burning wood for home heat and I support hydronic wood boilers. Much better than foreign oil! I would like to preserve my right to burn firewood!

Another commenter (0178 p.1) argued that  - 

      We have heated with wood for thirty five years. In that time no money has been spent on additional fuel as we have harvested the fallen limbs and trees from our timber. It seems ill conceived that burning fallen wood and timber would contribute to the earth warming problem. Please do not consider doing any more to hamper the wood heating industry.

Another commenter (0167 p.1) requested  - 

      Please allow us to keep our right to burn wood, [w]hen factories burn a lot more harmful thing than wood!

Response: 
We acknowledge the commenters' support for wood burning as a renewable heating source for homes. The EPA is not taking away anyone's rights regarding burning wood. The Agency also acknowledges that there are many sources of air pollution, in addition to wood heating, that EPA is likewise concerned about and regulating to protect human health and the environment.

Residential wood heating in the U.S. produces over five times more direct fine particulate (PM2.5) emissions than all U.S petroleum refineries, cement manufacturing plants, and pulp and paper plants combined. Wood smoke contains a mixture of harmful substances that penetrate deep into the lungs. PM2.5 from wood smoke not only affect air quality in entire regions, but also significantly impact air quality and public health at the local level including communities and neighborhoods located in valleys where wood smoke accumulates. In fact, a single wood-burning device can emit enough pollutants to place an entire neighborhood at risk.

8.3.5 Comment: Banning wood heating
Some commenters (0160, 0161, 0172, 0177, 0178) expressed concern that EPA intended to ban wood heating and that some might freeze to death. For example, one commenter (0160 p.1) contended that  - 

      I DO NOT SUPPORT YOUR PLAN TO BAN WOOD BURNERS, THIS IS THE ONLY WAY I CAN AFFORD TO HEAT OUR HOUSE.

Likewise, another commenter (0161 p.1) argued that  - 

      We should have the right to choose how we heat our homes. Every day you have camp grounds full of campers having camp fires. And for a few months of the year to be able to have heat in our homes to keep from freezing we should be able to have an outdoor wood furnace. Which is safer than indoor wood stoves. Please remove the ban on outdoor boilers.

On the other hand, one commenter (0156 p.1) expressed the views of private citizens who would like to see outdoor boilers banned  - 

      I would like these awful wood furnaces to be outlawed completely. They are a polluting device that parades as a renewable energy source when they are actually more polluting than electricity generating plants. We live across the street from one. We are "lucky" because our neighbor limits her burning from November to April. When the furnace is operating, we cannot open our windows because our house quickly fills with smoke on the days when the wind is blowing in our direction. We cannot leave our doors open as we unload groceries from the car because our house fills with smoke. When we go out to our cars in the morning, they smell like smoke. We do not do yard work in the cold months if the smoke is blowing in our direction because we can be chased from our yard by the smoke. This week, our neighbor was burning a particularly noxious batch of wood that was filled with creosote. Sometimes she uses her furnace to burn her trash. I do not understand why our neighbor has the right to have such a great impact on the quality of our lives. Why does her wish to save money by burning wood supersede her neighbors' rights to breathe clean air? Why don't we move, you might ask? We have lived in our home for 33 years and we really like it. We have created a wonderful home here with great neighbors--yes, even our wood furnace neighbor is an otherwise good neighbor. Our taxes are low. We have extensive gardens that have developed over 3 decades. We love where we live. And, we could move to another house only to have a new neighbor move in and install one of these furnaces as happened in our current neighborhood. I feel very badly for the family who live next to the furnace. They have two small children. I know that they do not realize that their children are inhaling a witch's brew of toxic chemicals. We are lucky. Our children were grown and gone when our neighbor installed her furnace. Please, please make these illegal. I miss the cool nights when we slept with our windows open. I miss the sound of the owls as they hunted in our neighborhood. I miss the genuinely sweet air. Most of all, I miss being able to make my own decisions about my health. Thank you for creating a forum for comment on this topic.

Response: 
We appreciate the commenters' concerns regarding banning wood heating devices. Neither the current regulations nor this final action bans any devices, including outdoor wood boilers / hydronic heaters. In this final action, EPA is not considering or taking any final action with respect to the request to ban wood heating devices.

Appendix A: Complete List of Commenters 

                 List of Commenters on Sell-Through Amendment
                             EPA-HQ-OAR-2018-0195
                                  Document ID
                                 Date Received
Name and Affiliation
                                     0018
                                  12/03/2018
Miles Keogh, National Association of Clean Air Agencies (NACA)
                                     0019
                                  12/05/2018
Scott W. Nichols, Tarm Biomass
                                     0020
                                  12/07/2018
Arthur N. Marin, Northeast States for Coordinated Air Use Management (NESCAUM) 
                                     0021
                                  12/10/2018
Nancy Alderman, President, Environment and Human Health, Inc. (EHHI)
                                     0022
                                  12/12/2018
Niels Wittus President, Wittus-Fire by Design
                                     0023
                                  12/14/2018
Nancy Vehr, President, Western States Air Resources Council (WESTAR)
                                     0024
                                  12/18/2018
Richard Whitman, Director, Oregon Department of Environmental Quality (DEQ)
                                     0025
                                  12/19/2018
Eldon Yoder, Yoder Outdoor Furnaces LLC
                                     0026
                                  01/10/2019
Anonymous public comment
                                     0027
                                  01/10/2019
Anonymous public comment
                                     0028
                                  01/10/2019
G. Matthews
                                     0029
                                  01/11/2019
Anonymous public comment
                                     0030
                                  01/03/2019
Anonymous public comment
                                     0031
                                  01/03/2019
D. Aerts
                                     0032
                                  01/04/2019
Paul LaPorte, CEO, MF Fire, Inc.
                                     0033
                                  01/08/2019
Steve Goldstein, President, The Spa Doctor Spa & Stove Center, Hot Tubs & Hearth, Inc.
                                     0034
                                  01/08/2019
Gail E. Good, Director, Air Management, Wisconsin Department of Natural Resources (WDNR)
                                     0035
                                  01/10/2019
Lee VanHouten, Double L Tack, Inc.
                                     0036
                                  01/10/2019
J. Ventzke
                                     0037
                                  01/10/2019
Stanton Brown, Vice President, Northeast Distribution LTD
                                     0038
                                  01/10/2019
Craig Klavon, Central Boiler, Inc. and Klavon Mechanical, LLC
                                     0039
                                  01/11/2019
Stephen Bradley, Owner, Pondside Kitchens and Hearth
                                     0040
                                  01/11/2019
Lori Hamer, President, Hamer Pellet Fuel
                                     0041
                                  01/11/2019
Jae P. Douglas, Environmental Health Services Director, Multnomah County Health Department
                                     0042
                                  01/11/2019
Bruce Lisle, President and Founder, Energex
                                     0043
                                  01/11/2019
Anonymous public comment
                                     0044
                                  01/11/2019
George R. Breiwa II, President, Chimney Specialists, Inc.
                                     0045
                                  01/13/2019
Mary Uhl, Executive Director, Western States Air Resources (WESTAR) Council
                                     0046
                                  01/13/2019
Bob Suchon, Owner, ALL In One Outdoor Furnace
                                     0047
                                  01/14/2019
Wolf Steel USA Ltd
                                     0048
                                  01/14/2019
Kevin Schmitz, K & J Construction and Design LLC.
                                     0049
                                  01/14/2019
Dave Lal, Research and Product Development Engineer, Fireplace Products International Ltd. (FPI)
                                     0050
                                  01/14/2019
VP Berger, President, Hearth & Home Technologies LLC
                                     0051
                                  01/14/2019
Tamra Spielvogel, Senior Program Manager, Environment Policy, National Association of Home Builders (NAHB)
                                     0052
                                  01/14/2019
Alice Edwards, Director, Division of Air Quality, Alaska Department of Environmental Conservation (ADEC)
                                     0053
                                  01/14/2019
Madison Condon and Bethany Davis Noll, Institute for Policy Integrity
                                     0054
                                  01/14/2019
Paul J. Miller, Executive Director, Northeast States for Coordinated Air Use Management (NESCAUM). Note: This comment contains copyright-protected pages and is therefore accessible only via the Public Reading Room; see EPA-HQ-OAR-2018-0195-0200 for the non-copyright version of this comment, which is accessible on-line.
                                     0055
                                  01/14/2019
Brent J. McClendon, President and CEO, National Wooden Pallet & Container Association (NWPCA)
                                     0056
                                  01/14/2019
Martin Suuberg, Commissioner, Massachusetts Department of Environmental Protection
                                     0057
                                  01/14/2019
Richard W. Corey, Executive Officer, California Air Resources Board (CARB)
                                     0058
                                  01/14/2019
Joseph O'Brien, President, Industrial Pallet, LLC
                                     0059
                                  01/14/2019
Mary Jean Fenske, Supervisor, Air Policy Unit, Environmental Analysis and Outcomes Division, St. Paul Office, Minnesota Pollution Control Agency (MPCA)
                                     0060
                                  01/14/2019
T. Menz
                                     0061
                                  12/21/2018
Ryan Carroll, Vice President, Government Affairs
Hearth, Patio & Barbecue Association (HPBA)
                                     0062
                                  01/03/2018
Anonymous public comment
                                     0063
                                  01/14/2019
Hearth, Patio & Barbecue Association (HPBA)
                                     0064
                                  01/14/2019
Tracy R. Babbidge, Chief, Bureau of Air Management, Connecticut Department of Energy and Environmental Protection (DEEP)
                                     0065
                                  01/14/2019
George S. (Tad) Aburn, Jr., Maryland and Lynn A. Liddington, Knoxville, Tennessee, Co-Chair, Criteria Pollutants Committee, National Association of Clean Air Agencies (NACAA)
                                     0066
                                  01/14/2019
Nicholas C. Buttino, Assistant Attorneys General of New York et al. and Puget Sound Air Quality Agency
                                     0067
                                  01/14/2019
Ryan Friesen, Outdoor Furnaces, Heatmaster TM Steeltech Inc.
                                     0068
                                  01/14/2019
J. Jared Snyder, Deputy Commissioner, Air Resources, Climate Change and Energy, New York State Department of Environmental Conservation
                                     0069
                                  01/14/2019
Tim Portz, Executive Director, Pellet Fuel Institute (PFI)
                                     0070
                                  01/14/2019
United States Stove Company (USSC)
                                     0071
                                  01/14/2019
Harold P. Wimmer, National President and CEO, American Lung Association (ALA)
                                     0072
                                  01/14/2019
William Hoskins, Easy Heat Wood Pellets
                                     0073
                                  01/14/2019
Mary Rice, Chair, Environment Health Policy Committee, American Thoracic Society (ATS)
                                     0074
                                  01/14/2019
Richard Whitman, Director, Oregon Department of Environmental Quality (DEQ)
                                     0075
                                  01/14/2019
Kathryn L. Urbanowicz, Staff Attorney, Clean Air Council et al.
                                     0076
                                  01/30/2019
Bobby Wiegmann and Teresa Wiegmann, Co-Owner, Wiegmann Woodworking & Fireplaces, Inc.
                                     0077
                                  01/11/2019
Dan Clark, Orley's Stove and Spa Center
                                     0078
                                  01/10/2019
Ed & Marianne McGinty, Redmond Spa, Stove & Sauna
                                     0079
                                  01/14/2019
Michael Homan, Jr., Richmond Builders Supply
                                     0080
                                  01/14/2019
Rob Woroniak, V. P. Operations, Salter's Fireplace & Stove, Inc.
                                     0081
                                  02/04/2019
S. Carter
                                     0082
                                  01/14/2019
George W. Conner Jr., President, Tall Pines Farm Inc.
                                     0083
                                  01/14/2019
Sally Marr, Town & Country
                                     0084
                                  01/11/2019
Joseph R. Pirini, Warm Solutions
                                     0085
                                  01/14/2019
Chris Wolfe, Owner, Wood Heat Center, LLC
                                     0086
                                  01/14/2019
Todd Ackerman, Owner, Wood Heat LLC
                                     0087
                                  01/14/2019
Lynn Gades, BBBB of South Dakota, Inc.
                                     0088
                                  01/11/2019
Kevin Obee, General Manger, Benson Stone Company, Inc.
                                     0089
                                  01/14/2019
B. Scott Marlowe, Owner, Carolina Hearth & Patio, Inc.
                                     0090
                                  01/11/2019
Corey Dormitzer, Manager, Chelmsford Fireplace Center LLC
                                     0091
                                  01/14/2019
Alan Edghill, Edghill Motors Inc.
                                     0092
                                  01/11/2019
Joseph Robinson, Estimator-Project Manager, Fessler-Bowman, Inc.
                                     0094
                                  01/10/2019
Bret M. Watson, President/CEO  -  Jotul North America
                                     0095
                                  01/11/2019
G. Brown
                                     0096
                                  01/11/2019
E. J. Carroll
                                     0097
                                  01/12/2019
Tim Boals, Ferguson's Fireplace and Stove Center
                                     0098
                                  01/14/2019
Richard E. Hoffman, Master Hearth Professional,
Firelight Hearth & Patio
                                     0099
                                  01/14/2019
Mark Wrench, Fireplace and Grill Shoppe
                                     0100
                                  01/14/2019
Pablo Fleischmann, Owner, Green Energy Options
                                     0101
                                  01/14/2019
Ronald Higgins, Higgins Energy Alternatives, Inc.
                                     0102
                                  01/14/2019
Cindy Lencioni, Owner, Icon Hearth & Home
                                     0103
                                  01/14/2019
Joseph Biber, President, J & E Farms, Inc.
                                     0104
                                  01/14/2019
Tom Kerns, Kerns Fireplace and Spa
                                     0105
                                  02/01/2019
Parrish Stanton, Sierra Home Alternatives
                                     0106
                                  01/15/2019
Martin Shofner, Hearth Specialist, Hearth Doctor
                                     0107
                                  01/31/2019
A Fireplace Store
                                     0108
                                  01/30/2019
Greg Brown, A Fire's Place
                                     0109
                                  01/30/2019
Lawrence R. Parlee, President, Acme Stove Company of Harrisburg, Inc.
                                     0110
                                  02/01/2019
Harley C Foster, Hometown Store Inc.
                                     0111
                                  01/30/2019
Sam L. Halsey, President, Yankee Doodle Inc.
                                     0112
                                  01/30/2019
Joseph Biber, President, J & E Farms, Inc.
                                     0113
                                  01/11/2019
Toby Alderink, Hearth Products Manager, Monsma Marketing Corporation
                                     0114
                                  01/30/2019
Orley's Stove and Spa Center
                                     0115
                                  02/04/2019
Matthew Waterstradt, President, The Energy Shop, Inc.
                                     0116
                                  02/01/2019
James B. Grinna, President, Vick's Heating, Plumbing & Vent., Inc. Nordic Hearth Showroom
                                     0117
                                  02/01/2019
Barry Charbonneau, Owner, Woodstove Fireplace and Patio Shop
                                     0118
                                  01/30/2019
Michael Woods, Vice President, Woody's Fireplace
                                     0119
                                  01/10/2019
Chuck Lynch, Owner, Downeast Boiler
                                     0120
                                  01/10/2019
David Lewis, Owner, North Georgia Outdoor Wood Furnaces
                                     0121
                                  01/10/2019
Tim Reed, Retail Sales Manager, Fireside Home Solutions
                                     0122
                                  01/10/2019
Chris Neufeld, Vice President, Blaze King Industries, Inc.
                                     0123
                                  02/01/2019
Dustin Bowman, Manager, Bowman's Stove & Patio
                                     0124
                                  02/01/2019
Guy Fasanaro, Owner, California Comfort Inc.
                                     0125
                                  02/04/2019
Buzz Wheeler, Owner, Coastal Farm & Home Supply, LLC
                                     0126
                                  01/30/2019
Carl C. Gibbs, Gibbs True Value Hardware
                                     0127
                                  01/31/2019
Dan Hechler, Hechler's Hearth & Home
                                     0128
                                  12/17/2018
John Ackerly, President, Alliance for Green Heat
                                     0129
                                  02/12/2019
Charlene Albee, Director, Air Quality Management Division, Washoe County Health District (AQMD)
                                     0130
                                  02/12/2019
California Air Resources Board (CARB)
                                     0132
                                  02/11/2019
Martin Lunde, Founder/Owner, Dectra Corporation
                                     0133
                                  02/12/2019
Paul J. Miller, Executive Director, Northeast States for Coordinated Air Use Management (NESCAUM)
                                     0134
                                  02/12/2019
Major L. Clark III, Acting Chief Counsel for Advocacy and David Rostker, Assistant Chief Counsel Office of Advocacy, U.S. Small Business Administration's Office of Advocacy
                                     0135
                                  02/14/2019
A. R. Jones
                                     0136
                                  01/08/2019
B. Taylor
                                     0137
                                  02/11/2019
Kwame Raoul, Attorney General, State of Illinois
                                     0143
                                  01/11/2019
A. Rogers
                                     0144
                                  01/08/2019
Anonymous public comment
                                     0145
                                  01/08/2019
B. Cox
                                     0146
                                  01/13/2019
C. Biko
                                     0147
                                  01/13/2019
C. Wyatt
                                     0148
                                  01/14/2019
Charles Turner, Cricket on the Hearth Inc.
                                     0149
                                  01/08/2019
D. Ferguson
                                     0150
                                  01/14/2019
Larry James, High Country Stoves & Fireplaces
                                     0151
                                  01/10/2019
J. Henry
                                     0152
                                  01/09/2019
J. & G. Morton-Moncrieff
                                     0153
                                  01/09/2019
K. Carter
                                     0154
                                  01/13/2019
L. Nowicki
                                     0155
                                  01/14/2018
A. Breed
                                     0156
                                  01/13/2019
L. Tankel
                                     0157
                                  01/02/2019
Scot Linkletter, Maine Woods Pellet Company
                                     0158
                                  01/09/2019
M. and S. Thornton
                                     0159
                                  01/09/2019
S. Hendon
                                     0160
                                  01/08/2019
S. Durian
                                     0161
                                  01/09/2019
Shirley A.
                                     0162
                                  01/14/2019
T. and L. Gerencer
                                     0163
                                  01/08/2019
T. Bauters
                                     0164
                                  01/09/2019
T. Olseski
                                     0165
                                  01/09/2019
W.W. Walborn
                                     0166
                                  01/09/2019
J. Talbot
                                     0167
                                  01/13/2019
J. Daley
                                     0168
                                  01/13/2019
J. Ferrick
                                     0169
                                  01/15/2019
John Ivancicts, Southwest Fireplace
                                     0170
                                  01/08/2019
J.H. Zitting
                                     0171
                                  01/08/2019
M. Traver
                                     0172
                                  01/08/2019
M. Weber
                                     0173
                                  01/09/2019
M. DuMond
                                     0174
                                  01/10/2019
M. Davis
                                     0175
                                  01/09/2019
M. Newholm
                                     0176
                                  01/08/2019
Q.J. Lewis
                                     0177
                                  01/09/2019
R. Eding
                                     0178
                                  01/08/2019
R.L. Maske
                                     0179
                                  01/08/2019
R. McCarthy
                                     0180
                                  01/14/2019
Brian Moench, Doctors and Scientists Against Wood Smoke Pollution (DSAWSP)
                                     0181
                                  01/12/2019
E.L. Murray, Jr.
                                     0182
                                  01/09/2019
Jessica Holmestad, GreenTech Manufacturing, Inc.
                                     0183
                                  01/09/2019
Keith Horne, GreenTech Manufacturing, Inc.
                                     0184
                                  01/09/2019
Rob Brown, GreenTech Manufacturing, Inc.
                                     0185
                                  01/09/2019
Ryan Home, President, GreenTech Manufacturing, Inc.
                                     0186
                                  01/09/2019
Richard Todd, President, Anderson's Masonry Supply Corporation
                                     0187
                                  01/10/2019
Steve Dumais, President, Energysavers Inc.
                                     0188
                                  01/10/2019
Mike Sundberg, Owner, Bend Fireside Inc.
                                     0189
                                  01/10/2019
Mike Evanick, E&E Chimney Sweeps
                                     0190
                                  02/15/2019
Sean M. Rosser, CEO, Hearthside Fireplace & Patio
                                     0191
                                  01/09/2019
Alexis Rettinger, Rettinger Fireplace Systems, Inc.
                                     0192
                                  01/10/2019
Angelique Rusch, Rettinger Fireplace Systems, Inc.
                                     0193
                                  01/10/2019
Phil Lariviere, Seacoast Fireplace and Stove Shop
                                     0194
                                  01/10/2019
Larry Carbonneau, Stove Place II
                                     0195
                                  01/09/2019
Eric Wallace, Wallace's Stove & Fireplace
                                     0196
                                  01/09/2019
Glenn Snyder, Warner Oil Company
                                     0197
                                  01/31/2019
David Ige, Governor of Hawaii, Chair, and Doug Burgum, Governor of North Dakota, Vice Chair, Western Governors Association (WGA)
                                     0198
                                  02/07/2019
Cecilia Diedrich, Law Clerk for Oceana, et al.
                                     0199
                                  01/08/2019
Mark & Susan Potter (this is the sample letter for 186 duplicate mass mail submissions)
                                     0200
                                  01/14/2019
Paul J. Miller, Executive Director, Northeast States for Coordinated Air Use Management (NESCAUM). Note: This is the non-copyright version of NESCAUM's comment #0054.

