BOARD MEETING DATE: December 3, 2004
AGENDA NO. 41

Amend Rule 1145 – Plastic, Rubber, and Glass Coatings

SYNOPSIS:

The proposed amendments set more stringent VOC limits and future compliance dates for several coating categories. The proposed amendments also establish new VOC limits for leather and extreme performance coatings, set the High Volume Low Pressure gun efficiency as the baseline for determining equivalent transfer efficiency, and add a limited exemption for polyurethane shoe sole coating. Language is also amended for clarity and consistency. This proposed amendment partially implements 2003 AQMP Control Measure CTS-10 and achieves an emission reduction of approximately 1.2 tons per day at an average cost-effectiveness of $4,026 per ton of VOC reduced.

COMMITTEE:

Stationary Source, October 22 and November 19, 2004, Reviewed

RECOMMENDED ACTION:

Adopt the attached resolution:

1. Certifying the CEQA Final Environmental Assessment (EA) for the proposed amendments.
    
2. Amending Rule 1145 – Plastic, Rubber, and Glass Coatings.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Rule 1145 – Plastic, Rubber, and Glass Coatings, was adopted by the AQMD on July 8, 1983 to regulate volatile organic compound (VOC) emissions from plastic, rubber, and glass coating operations. When originally adopted, Rule 1145 regulated three coating categories: general, camouflage, and military specification. To further reduce VOC emissions from coating activities the rule has been amended fourteen times since the date of adoption and currently contains nine coating categories including general, military specification, multi-colored, mold seal, vacuum metalizing, mirror backing, optical, electrical dissipating and shock-free, and metallic coatings.

Plastic, rubber, and glass coating operations are conducted in many industries including aerospace, electronic, automotive, medical, and other manufacturing industries. Leather coating operations are unique in that there is only one facility within the jurisdiction of the AQMD that performs leather coating operations. Currently, there is no rule that applies specifically to leather coating operations. These operations are subject to general prohibitions in Rule 442.

Affected Facilities

There are approximately 200 facilities located within the jurisdiction of the AQMD that conduct Rule 1145 coatings operations. The VOC emission inventory for Rule 1145 is estimated to be 2.46 tons per day.

Public Process

A Public Workshop was held on September 8, 2004, and a Public Consultation Meeting was held on October 20, 2004.

Proposal

Staff is proposing to (1) lower the emission limits for three (general, mirror backing, and optical) of the nine coating categories currently in the rule; (2) address the regulatory needs of leather coating operations by adding a new leather coating category to Rule 1145; (3) clarify that alternative application techniques are determined by demonstrating equivalent transfer efficiency to HVLP spray application; (4) provide a limited exemption for polyurethane shoe sole coating operations; (5) add a new category for extreme performance coatings; and, (6) change the rule title to Plastic, Rubber, Leather, and Glass Coating Operations and other administrative amendments.

Emission Reductions

The proposed amendments will result in VOC emission reductions of 1.27 tons per day which represent an emission reduction of approximately 52 percent.

Cost-Effectiveness

The cost-effectiveness (by coating category) for the proposed amendments to Rule 1145 range from $307 to $4,828 per ton of VOC reduced. The average cost-effectiveness for the proposed amendments to Rule 1145 is estimated to be $4,026 per ton of VOC reduced.

Key Issues

Staff has determined that there are coatings available in the marketplace that meet not only the proposed VOC limits but also are comparable in performance to the coatings used by industry today. However, some regulated facilities as well as a local coating manufacturer have expressed concern regarding the performance of low-VOC general two-component coatings and the time frames for reformulating allotted under the staff proposal. To alleviate this concern, industry recommended a two-step approach to reduce the VOC limit for this coating category: an interim limit that will reduce emissions within a year, and a final limit that will go into effect several years later. Industry’s proposal was carefully evaluated by staff, found to be reasonable, and is now reflected in staff’s proposal. The two-step approach for lowering the VOC limit for the general two-component coating category would promote early reductions and also allow local coating manufacturers additional time (three years instead of two) to develop compliant coatings that meet the required performance characteristics. While there may not be complete agreement with industry and the time frames for the final limit, staff believes the three years allotted for the final limit to be reasonable.

California Environmental Quality Act (CEQA) Analysis

AQMD staff has reviewed the proposed amended Rule 1145 pursuant to state CEQA Guidelines §15002 (k)(2) and the AQMD’s Certified Regulatory Program (Rule 110). A Draft Environmental Assessment (EA) was prepared and circulated for a 30-day public review and comment period from September 2, 2004 to October 1, 2004. Two public comment letters were received that did not directly comment on the Draft EA but raised concerns with the proposed project. All comments received have been addressed and incorporated into the Final EA for the proposed project. Minor modifications were made to the project description but the changes do not alter the conclusions made in the Draft EA or increase the environmental impact analyzed in the Draft EA. Pursuant to CEQA Guidelines §15073.5(c)(2), recirculation is not necessary since the information provided does not result in new avoidable significant effects.

Socioeconomic Impact Assessment

A socioeconomic analysis was conducted to assess the impacts of Proposed Amended Rule (PAR) 1145—Plastic, Rubber, Leather and Glass Coating Operations. PAR 1145 will affect approximately 200 plastic, rubber and glass coating facilities in the District, of which 163 facilities are permitted sources. Of these permitted sources, 87 are in the Annual Emissions Reporting database and 76 are in the permit database. These facilities belong to the industries of construction, durable manufacturing, nondurable manufacturing, utilities, and services. Of these 163 facilities, there are 103 facilities in Los Angeles County (63%), 40 facilities in Orange County (25%), eight facilities in Riverside County (5%), and 12 facilities in San Bernardino County (7%). The remaining 37 facilities are non-permitted sources and could be in any sector of the local economy.

The total annualized cost for the 163 permitted sources, including UV curing systems, is $1.27 million. The rubber and miscellaneous plastic products, fabricated metal products, and miscellaneous manufacturing industries have the highest costs among all the industries. The grand total compliance cost of the proposed amendments, for all affected sources, is projected to be $1.70 million annually.

A macroeconomic analysis from 2006 to 2020 was performed to assess the overall job impacts of the proposed amendments. It is estimated that an average of 27 jobs would be forgone annually from 2006 to 2020 in the four county region. The highest share of jobs forgone would be in the retail sector (with 6 jobs forgone) and miscellaneous business services (with 3 jobs forgone). The jobs forgone in these sectors would mainly be due to the reduction in personal income resulting from the additional cost of doing business.

AQMP and Legal Mandates

The California Health and Safety Code require the AQMD to adopt an Air Quality Management Plan to meet state and federal ambient air quality standards in the Basin. In addition, the California Health and Safety Code require that the AQMD adopt rules and regulations that carry out the objectives of the AQMP. The proposed amendments to Rule 1145 help in part to implement Control Measure CTS-10 of the 2003 AQMP by reducing VOC emissions by approximately 1.27 tons per day.

Implementation Plan

Staff will continue its outreach efforts on Rule 1145 to inform the general public of the control requirements in the plastic, rubber, leather, and glass coating rule.

Resource Impact

Current AQMD resources are sufficient to implement the proposed Rule 1145 amendments with no additional budget impact.

Attachments (1,013 KB)

1. Summary of Proposal
2. Rule Development Process
3. Key Contacts List
4. Resolution
5. Proposed Rule Language
6. Staff Report
7. Final Environmental Assessment
8. Final Socioeconomic Assessment

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