Multi-Sector Air Pollutants Regulations, response to comments: part 1
Part 1 - Boilers and Heaters
2.1 In several comments, industry expressed their concerns about transitional equipment. Comments were received informing the Department that the definition for transitional equipment was ambiguous and it was also mentioned that a two year period for the application of the transitional period was too short.
Response: The regulatory text has changed as a result of these comments. The definition of transitional equipment has been clarified, by differentiating between boilers and heaters that are packaged and those that are not. Packaged is defined in the Regulations and refers to equipment at a facility that is almost ready to be used.
Also, the period for transitional equipment that is not packaged has been extended from two to three years beginning from when the Regulations are registered. It should be noted that extending the transitional period by an additional year could result in some equipment that would have needed to comply with the emission limits for modern equipment under the CGI text now having to meet the less stringent transitional emission limit. Having more equipment meet a less stringent limit is likely to decrease the amount of reductions achieved by the Regulations; however, modelling has indicated that the expected change to NOXemission reductions should not be significant.
2.2 Some stakeholders expressed concerns that the Department was too prescriptive in specifying the information required: to identify the location of a boiler or a heater within a facility; to specify the rated capacity of a boiler or heater; or to determine the maximum thermal energy contained in its fuel.
Response: The regulatory text has been modified to allow for more flexibility in response to these comments. The location of equipment can now be specified with any document that unambiguously and accurately describes its location. The definition of rated capacity now allows for the use of equipment manufacturer specifications, as well as from the boiler or heater nameplate. The regulatory text now clearly states that the maximum thermal energy in the fuel is determined by measuring its Higher Heating Value (HHV).
2.3 Stakeholders and provincial government representatives raised concerns about the definitions of gaseous fossil fuel and coke ovens.
Response: The regulatory text was partially revised as a result of these comments. The definition of gaseous fossil fuel was not changed. However, the definitions of coke oven and coke oven batteries have been changed so that it is clear that the NOX emission sources are the coke oven batteries, not the coke ovens themselves.
2.4 A number of stakeholders requested that biomass boilers, heat recovery steam generators, boilers that are working together as a unit with fluid coking units, and equipment that is designed to combust either blast furnace gas or coke oven gas be added to the list of excluded boilers and heaters in the Regulations.
Response: The regulatory text has changed as a result of these requests. These specialised equipment types are added to the list of excluded boilers and heaters. Each request to exclude a specific type of equipment was considered separately by assessing the technical, economic and policy arguments both for and against the exclusion of these boiler or heater types. In particular,
- Equipment that combusts biomass, coke oven gas or blast furnace gas (specifically in the steel sector) generate a significant proportion of their NOX emissions from the combustion of nitrogen in their fuel, i.e., “fuel NOX”. It was never the intention for the Regulations to address fuel NOX
- Boilers in fluid coking units are excluded from the Regulations as their integration with larger industrial infrastructure results in their being sufficiently different from the boilers and heaters intended to be covered by the Regulations
- Heat recovery steam generators were not intended to be covered by the Regulations as the proportion of their thermal input from gaseous fossil fuel is much less than 50%; they have been excluded explicitly from the Regulations for clarity
2.5 A number of stakeholders requested that auxiliary boilers in power plants, fired equipment used primarily to enable chemical reactions, temporary boilers, stand-by boilers, equipment in offshore facilities, carbon monoxide boilers and brine solution heaters be added to the list of excluded boilers and heaters.
Response: No changes to the regulatory text arose as a result of these requests. Each request to exclude a specific type of equipment was considered separately, by assessing the technical, economic and policy arguments both for and against the exclusion of these boiler or heater types. In these cases, where the requested exclusion was not accepted, the additional information and evidence sent to the Department during the comment period was insufficient or did not support the requests to exclude these boilers and heaters from the Regulations.
2.6 A stakeholder proposed that the Regulations apply only to those boilers and heaters whose annual NOX emissions would be reduced by at least 10 tonnes as a consequence of the Regulations.
Response: No changes to the regulatory text resulted from these comments. Accepting this change would have resulted in a large number of boilers and heaters continuing to operate without pollution controls, which would have significantly reduced the environment and health benefits resulting from the Regulations.
2.7 Some industry stakeholders raised concerns about the qualifications of independent technical experts that were required in some parts of the Regulations. Commenters questioned why other qualifications were not acceptable as well.
Response: The regulatory text has changed as a result of these comments. An engineer who is authorized to practice in the province where the boiler or heater is located and has the appropriate technical expertise is also qualified to be an independent technical expert for the purposes of section 14 - “Exception - impossibility”.
2.8 The definition of “major modification” was identified as an issue, in that some commenters proposed that the replacement of a burner should not be considered a major modification if it is replaced by one of the same make and model number.
Response: No changes were made to the regulatory text as a result of these comments. Replacing the original burner that generated a NOX emission intensity beyond the prescribed limit with another burner of the same make and model could result in the same NOX emission intensity and thus would not meet the intent of the Regulations.
2.9 A number of industry stakeholders noted that the proposed Regulations require that default values be used for some parameters (e.g. the Higher Heating Value (HHV), the stoichiometric ratio, and the hydrogen mass content) when calculating the emissions obligations for equipment that combusts commercial grade natural gas. Industry requested the option to measure the values of these parameters instead of using default values.
Response: The regulatory text has changed as a result of this comment. The Regulations now allow the option of measuring the Higher Heating Value (HHV), stoichiometric ratio, and the hydrogen mass content of commercial grade natural gas. This additional flexibility does not affect the accuracy of the measurement methods prescribed in the Regulations.
2.10 Industry stakeholders proposed that the definition of a standard cubic meter and the value of the standard temperature be adapted to industry-specific practices.
Response: Changes were partially made to the regulatory text as a result of these comments. The definition of standard cubic meter in the Regulations is consistent with the definition found in the Electricity and Gas Inspection Regulations (SOR/86-131). The standard temperature has changed in the Regulations.
2.11 Industry stakeholders provided a number of comments on technical requirements that relate to the measurement of flue gas and fuel flow rates, such as specifying that flue gas flow rates should be measured on a dry basis, or providing guidance on the calibration of the instruments for measuring fuel flow rates.
Response: The regulatory text has changed as a result of this comment. The Regulations set the methods used for measuring dry flue gas flow rates. As for fuel flow rates, the Regulations require that the measuring devices used for this purpose are calibrated according to manufacturer’s specifications or generally recognized industry standards.
2.12 A wide range of industry stakeholders requested additional flexibility in determining the NOX emission-intensity of their equipment, such as allowing the emission-intensity data from one piece of equipment to represent the emission-intensity of another identical piece of equipment, or using the emission-intensity of a common stack to represent the emission-intensity of the individual pieces of equipment that emit through that stack.
Response: The regulatory text has changed as a result of this comment. The Regulations now allow using emission-intensity data of one piece of equipment as proxy data for other identical pieces of equipment (pre-existing, transitional or modern). The Regulations also allow the use of the emission-intensity measured at a common stack to classify the individual pre-existing pieces of equipment that emit through that stack. The Department believes that using this substitute data under parameters prescribed by the Regulations is an accurate representation of the NOX emission-intensities measurements that are required by the Regulations and will thus not significantly change the number of pre-existing boilers and heaters that are classified as Class 70 or Class 80 (equipment whose NOX emission-intensity has been determined to be greater than 70 g/GJ and greater than 80 g/GJ) under the Regulations. Note that the regulatory text no longer uses the word “original” to describe boilers and heaters commissioned before the date of registration of the Regulations; it has been replaced with “pre-existing” for clarity and consistent terminology used throughout the Regulations.
2.13 Industry requested that emission-intensities from pre-existing equipment, with a rated capacity of less than or equal to 105 GJi/hr, be estimated using the U.S. EPA emission factors instead of using actual test results. The U.S. EPA emission factors are estimates of emission-intensities, based on statistics taken from working equipment. The use of emission factors would have resulted in no pre-existing equipment with a rated capacity of less than or equal to 105 GJi /hr being classified as Class 70 or Class 80.
Response: No changes to the regulatory text arose as a result of these comments. U.S. EPA emission factors have a wide variance and are unsuitable for categorizing equipment for regulatory purposes. In fact the U.S. EPA does not recommend the use of emission factors for regulation compliance determinations. Thus the U.S. EPA emission factors cannot be used to assess the NOX emission-intensities of pre-existing boilers and heaters with a rated capacity of less than equal to 105 GJ/hr and greater than or equal to 10.5 GJ/hr. The emission-intensities of this equipment must be measured either directly or by using options available in the Regulations.
2.14 Some industry stakeholders raised concerns about the proposed requirement that all pre-existing equipment must be classified as Class 40, Class 70, or Class 80 within 12 months of the date of registration of the Regulations. These stakeholders indicated that 12 months is not enough time for some companies with large numbers of boilers and heaters, or companies that do not have the necessary testing infrastructure, to test the NOX emission intensity of their equipment.
Response: The regulatory text has changed as a result of these concerns. Four additional provisions now facilitate compliance with this requirement, either through allowing more time to classify the equipment, or through allowing more options for classification. These new provisions do not affect the NOX emission reductions that will result from the Regulations. These provisions allow regulatees, under certain circumstances, the following flexibilities:
- An extended deadline for classifying boilers and heaters by allowing regulatees until December 31, 2022 to conduct a classification test, and override a default classification of Class 80
- A simplified classification procedure, by allowing regulatees to use the design specifications of their boiler’s burners to estimate NOX emission-intensities for pre-existing equipment in lieu of actual test results
- A reduced amount of testing by allowing emission intensity results from an identical boiler or heater, whose emissions are being continuously monitored, to represent the emission-intensities of up to four other boilers
- A reduced amount of testing by allowing emission intensity results taken at a common stack to represent the emission intensities of all the equipment that emits through that stack
2.15 Industry representatives shared their concerns on a proposed requirement that the NOX emission test had to be completed in the same calendar year in which the equipment was commissioned (for modern, transitional) or recommissioned (for Class 70 and Class 80 equipment after a major modification). This requirement could create situations where it would be impossible to meet the regulatory requirements associated to these tests, for equipment commissioned (or recommissioned) towards the end of the year. For some equipment, bad weather in the fall and winter could result in unsafe testing conditions for the people running the tests. Situations beyond the control could prevent completing tests before December 31.
Response: The regulatory text has changed as a result of these comments. The Regulations now require that the NOX emissions test be done within six months of commissioning (or recommissioning) or by May 25 of the next calendar year, whichever is the later date. This change provides the flexibility requested by industry with no impact on compliance and on emission reductions.
2.16 The NOX emission intensity of a boiler or heater may change with a change in the combusted fuel or when an air preheater is added. Industry was also concerned that 31 days was insufficient to determine the NOX emission intensity of a boiler or heater in order to verify that it continues to meet its regulatory obligations after such a change in fuel or with a preheater (i.e., a “change test”).
Response: The regulatory text has changed as a result of this comment. The Regulations now require that a change test be done within six months after changing fuels. This aligns with the deadlines required for other NOX emission intensity testing requirements of the Regulations.
2.17 In comments, a number of industry stakeholders questioned the need for NOX emission tests every time the fuel composition switched between natural gas and alternative gaseous fuel.
Response: The regulatory text has changed as a result of these comments. The Department agrees that less frequent testing is sufficient to demonstrate compliance. For equipment with an output smaller than or equal to 105 GJi/hr, the Regulations require one NOX emission-intensity test for natural gas and one for alternative gaseous fuel be done. For equipment with an output that is greater than 105 GJi/hr, the Regulations require one NOX emission-intensity test for natural gas and one for alternative gaseous fuel be done each year.
2.18 Industry stakeholders proposed that the Regulations should not force the use of a Continuous Emissions Monitoring Systems (CEMS) to determine the emission-intensity of large transitional equipment because this requirement does not align with the requirements in some provinces.
Response: The regulatory text has changed as a result of this proposal. The Regulations allow, under certain circumstances, the use of stack testing as a way to test transitional equipment with a rated capacity that is greater than 262.5 GJi/hr.
2.19 Industry stakeholders requested that the Regulations offer the option to change a Class 80 designation for a boiler or heater whose NOX emission-intensity has been determined to be greater than 80 g/GJ, after the initial determination, by submitting test results that demonstrate that the emission-intensity is less than 80 g/GJi.
Response: The regulatory text has changed as a result of this comment. The Regulations now allow the responsible person to temporarily assign a deemed Class 80 designation to a pre-existing boiler or heater and then before December 31, 2022, re-determine its classification by way of a stack or CEMS test. The equipment will be reclassified if those test results demonstrate that the emission-intensity of the pre-existing boiler or heater is less than 80 g/GJi. This additional flexibility will have no impact on emissions.
2.20 A number of industry stakeholders commented that the annual testing requirement was too demanding and recommended that the testing and reporting frequency be reduced to once every two or three years, if compliance has been demonstrated for a sufficiently long period of time.
Response: The regulatory requirements for annual reporting were modified to address these comments, but the annual testing requirements remain unchanged. As a result, if the measured NOX emission intensity is significantly less than the obligation, the responsible person will have reduced reporting obligations, but must continue to test annually.
2.21 Stakeholders expressed the view that the Regulations should allow more than 31 days for initial testing of pre-existing equipment if that equipment first begins to combust gaseous fossil fuel after January 1st 2026.
Response: The regulatory text has been amended to extend the deadline to six months or by June 1 of the following year, whichever comes first. This adjustment aligns this deadline with other testing timelines in the Regulations.
2.22 Stakeholders requested that the Regulations allow the use of a stack test to determine the NOX emission intensity of modern equipment with a capacity that is greater than 262.5 GJi/hr, instead of requiring that a CEMS be used.
Response: The Regulations allow the NOX emission intensity of equipment with a rated capacity of greater than 262.5 GJ/hr to be first assessed with a stack test, and if the measured emission-intensities for the initial test and for the first compliance tests are significantly less than the obligation, the Regulations allow the continued use of a stack test for subsequent determination of compliance. A CEMS must be installed to monitor NOX emission intensities if that condition is not met.
2.23 Stakeholders recommended that all annual testing be eliminated. They proposed that boilers and heaters should be tested only after modifications are made to the equipment and only if those modifications could change their NOX emission intensity.
Response: No changes to the regulatory text arose as a result of this comment. Boilers and heaters may emit significant amounts of NOX depending on their operations. Annual testing of all equipment with a capacity greater than 105 GJ/hr is required to monitor emissions. A responsible person must demonstrate that the NOX emission-intensities of their boilers and heaters do not exceed the emissions obligations set out in the Regulations.
2.24 Industry stakeholders commented that the Regulations do not give a responsible person the option of classifying pre-existing equipment after the major modification, as in the case of an emergency burner replacement.
Response: The regulatory text was clarified as a result of this comment. A pre-existing boiler or heater is initially assigned a default classification of Class 80 until its classification NOX emission intensity can be updated with an actual measurement. If a major modification is required before that classification can be done, that boiler is considered to be Class 80 and its NOX emission intensity after the major modification must not exceed the emissions obligations set out in the Regulations.
Maintenance, Operation and Design
2.25 Industry requested the removal of the design standard, which required that modern boilers and heaters that produce more power than 262.5 GJi/hr be designed to emit substantially lessFootnote1 than the prescribed emission obligations. A number of industry stakeholders commented that the design standard for boilers and heaters would be challenging to implement.
Response: The regulatory text has changed as a result of these comments. The design standard requirement has been removed. The Department agrees with industry’s concerns that the requirement could compromise equipment efficiency, and require a step-change in technology that could be more costly and more technically challenging than the use of low-NOX burners in modern boilers and heaters.
2.26 Industry expressed concern that the Regulations impose unnecessary operational requirements on the operator both during normal operations and during the NOX emission intensity measurement.
Response: No changes were made to the regulatory text as a result of these comments. The specified testing conditions (such as operating at 60% of the rated capacity) are required to ensure that the test results are representative of actual emissions. The specified operating conditions (such as operating according to the manufacturer’s specifications) are required to ensure that emissions are controlled during normal operations.
2.27 There was widespread concern among industry stakeholders that the timing requirement that change reports must be submitted to the Department within 30 days of performing the change test was too short.
Response: The regulatory text was modified to address this concern. All change reports, except those that are required to update administrative information, must be sent to the Department by June 1 of the calendar year that follows the year in which the change was made. The Department must still be notified of changes to administrative information within 30 days; this is consistent with other federal Regulations such as the Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations (SOR/2012-167).
Cost Benefit Analysis
2.28 Several stakeholders commented that the time required to comply with the administrative requirement of the Regulations was underestimated and that administration costs were too low. One stakeholder indicated that it would take 16 hours per year to fill out the required paperwork, when the Department had estimated it would take about 3.5 hours per year.
Response: The time required, and associated costs, for reporting has been adjusted. In most cases, reporting time has been extended. For example, the number of hours has been increased from 5 hours to 8 hours for classification report for Class 70/80 equipment outside of Alberta and Quebec. The expected time to comply with the administrative requirements is a range between highly organized firms already required to collect this information by provincial regulations, to firms gathering the data for the first time. As result of these changes the total administrative cost to industry has increased to $0.4M.
2.29 Multiple submissions expressed concern that retrofitting may have a detrimental effect on efficiency, which could lead to increased capacity requirements following a retrofit.
Response: Boiler efficiency is not expected to be detrimentally affected. This issue was discussed in the Base-Level Industrial Emission Requirements (BLIERS) working group, where participants indicated that adopting low NOX technology would not affect efficiency. In the Regulatory Impact Analysis from a similar regulation in the US, the U.S. EPA indicated that retrofitting boilers and heaters would result in a 1% increase in combustion efficiency. This fuel efficiency improvement expressed in the U.S EPA analysis was based on maintenance requirements not included in the Regulations, so no change in efficiency was incorporated in the analysis.
2.30 Multiple stakeholders stated that the assumption that all pre-existing boilers and heaters with a rated capacity greater than 262.5 GJi/hr are already equipped with CEMS is not correct.
Response: This assumption has been removed from the analysis as well as the wording in the Regulations has been altered to bring CEMS requirements in line with existing provincial regulations. As a result, no incremental costs associated with CEMS are accounted for in the analysis.
2.31 A submission from an association stated that the RIAS should reflect the voluntary commitment its members made to reduce emissions.
Response: In 2012, Canada’s forest product industry announced Vision 2020, which is roadmap for the industry that provided aspirational goals to be achieved by 2020. One of the pillars of Vision 2020 is 35% improvement of the industry’s environmental performance. NOX emissions are one of twelve parameters measured as part of the environmental footprint. In their latest report published in June 2014, the industry reported an 11% reduction in NOX emissions between 2010 and 2012. This was accompanied by an 8% reduction in energy use, which the report attributed to investment of energy efficient equipment.
However, there seems to be no indication that concrete steps will be taken to further reduce NOX emissions beyond what has already taken place. Therefore, the analysis does not assume additional investment aims at reducing NOX emissions in the base data used for the analysis (i.e., business as usual (BAU) case).
2.32 Some stakeholders indicated that boilers and heaters were assumed to meet CCME performance standards. However, oil sands operators must also meet more stringent requirements in the interim guideline for new boilers and heaters in the Regional Municipality of Wood Buffalo north of Fort McMurray (called Alberta Policy No. 2).
Response: The performance target for Alberta Policy 2 is applied on an annual basis, not an hourly basis. The guideline also allows for facilities to emit over the limit, if it is not possible to meet the target using best available technology. In consultations with industry members following pre-publication of the Regulations, it was indicated that the Department should not assume that facilities operating in the Regional Municipality of Wood Buffalo north of Fort McMurray are already in compliance with the performance standards in the Regulations.
2.33 One submission pointed out that in the incremental cost section, the cost associated with the control technology (low NOX burners) was considered, however costs for process control technologies (burner management instrumentation systems) was not included.
Response: In the CGI analysis it was assumed that when a boiler or heater was replaced, the modern boiler would be equipped with a burner that complies with the CCME emission standards. This assumption was made in the BAU scenario and for a low NOX burner in the regulatory scenario. Regardless of the type of burner, a new burner management instrumentation system would be added. The cost of the added equipment remains the same whether for a low-NOX or a regular NOX burner; no incremental costs. The same assumption is made for modern equipment in the updated analysis. However, when a pre-existing Class 70 or Class 80 boiler undergoes an extensive retrofit, the total cost includes the installation of a new burner management instrumentation system. This incremental cost is added to the updated CGII analysis.
2.34 A number of submissions indicated that the Department significantly underestimated the cost of installing low NOX burners. One submission indicated that the cost went beyond the capital outlay for the burners, pilots, spare parts, etc. Cost should include the purchase and installation of fuel gas coalescers with concrete foundations, changing piping, burner ring spacing, new control system and engineering, etc. Another comment identified that due to safety and environmental risks, original burners cannot be swapped out of a system for new/different burners that were designed for lower NOX.
Response: Compliance costs have been revised. The CBA now assumes all Class 70 / 80 boilers and heaters will require retrofitting to comply with the Regulation. Eighty percent of those retrofitted units will require extensive modification to accommodate a low NOX burner. The capital cost for boilers and burners is calculated as a linear function of size and a total install cost factor is used to determine total installed cost. Changes in capital and installation costs are discussed in sub-section 3.1.
2.35 One submission indicated that low NOX burner technology requires additional maintenance to prevent the much smaller burner tips from plugging.
Response: The Department acknowledges that mixed-fuel boilers and heaters may require additional maintenance to prevent low NOX burner tips from plugging, but this is not expected to be an issue for natural gas fueled equipment, which makes up the overwhelming majority of affected boilers and heaters. The assumption that there would be no incremental operational cost has been retained.
2.36 A submission from a representative in the chemicals industry indicated that the projected quantity of boilers and heaters in Ontario does not align with their expectation. The conditions in Ontario suggest that any increase in demand will be met by imports. Furthermore, nationally, the projected growth in the chemicals sector (a 44% increase) is not expected. In CGI the quantity of boilers and heaters covered by the Regulations operating in the chemicals manufacturing sector in Canada increased from 71 to 102.
Response: In consultation with the Department during the summer of 2015, the Chemical Industry Association of Canada indicated that declining crude oil prices will positively affect demand in the chemicals sector. The association expected demand to increase by 3.9 % in 2016. To satisfy demand, production is expected to expand. The short-term economic projections to the year 2019 for all sectors are calibrated to private sector projections used by Finance Canada from their Survey of Private Sector Economic Forecasters report, March 2015. Beyond 2019, long-term key economic assumptions are based on Finance Canada’s “Update of Economic and Fiscal Projections-2014”. Forecasts of major energy supply projects from the National Energy Board’s Canada’s Energy Future 2016 projections were incorporated for key variables and assumptions in the model (i.e., oil and gas production and price). Since pre-publication, energy demand and emissions projections for all sectors have been updated in E3MC using the latest assumptions (see above). In the new projections, the chemicals manufacturing sector is estimated to grow from 57 boilers and heaters to 90 by 2035, a 58 % increase, or an annual growth rate of 2.3 %. From this growth only five new boilers and heaters are expected to be added in Ontario in the next 20 years.
Sectoral growth is forecast using the economic assumptions listed above and through consultation with sector experts within the Department.
2.37 Several stakeholders asserted that boilers and heaters do not have a natural end of life. With proper maintenance, boilers and heaters can essentially last “indefinitely”, and compliance costs should reflect all the cost of a retrofit and not just the incremental cost for a low NOX burner.
Response: The Department has revised the assumption regarding useful life for boilers and heaters larger than 105 GJ. For the purposes of this analysis, equipment lager than 105 GJ/hr will last at least beyond the end of analytical timeframe, 2035. As such it is assumed all Class 80 / 70 boilers and heaters will be retrofitted to achieve the emissions standard. Retrofit costs calculated as a function of size, and account for instances where major modification to the facility and equipment is required. The assumption of a 40-year useful equipment life has been retained for equipment smaller than 105 GJ/hr. This number is consistent with information provided by equipment manufacturers and with the age distribution of equipment in the inventory.
2.38 In the context of the boiler and heater regulations, one industry stakeholder noted that the retrofit of equipment could put Canadian industry at a competitive disadvantage versus the U.S. because the U.S. has no requirement to retrofit existing equipment in air attainment zones.
Response: Many sectors covered by the boilers and heaters requirements compete with producers in the U.S. and the competitiveness position of these sectors vary, with firms in each sector having varying abilities to absorb regulatory costs. In order to account for this, the Department has sought to minimize any negative impacts to the competitive position of impacted industries through the provision of compliance flexibilities, including lead times of at least 10 years to modify pre-existing boilers and heaters. This additional time would allow for companies to plan investments and time them with plant maintenance schedules, reducing overall costs incurred by companies.
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