[Federal Register Volume 76, Number 224 (Monday, November 21, 2011)]
[Rules and Regulations]
[Pages 72050-72075]
[FR Doc No: 2011-29457]

Vol. 76

Monday,

No. 224

November 21, 2011

Part II

Environmental Protection Agency

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40 CFR Part 63

National Emission Standards for Hazardous Air Pollutant Emissions for
Shipbuilding and Ship Repair (Surface Coating); National Emission
Standards for Wood Furniture Manufacturing Operations; Final Rule

Federal Register / Vol. 76 , No. 224 / Monday, November 21, 2011 /
Rules and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2010-0786; FRL-9491-4]
RIN 2060-AQ42

National Emission Standards for Hazardous Air Pollutant Emissions
for Shipbuilding and Ship Repair (Surface Coating); National Emission
Standards for Wood Furniture Manufacturing Operations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This action finalizes the residual risk and technology review
conducted for two industrial source categories regulated by separate
national emission standards for hazardous air pollutants. The two
national emission standards for hazardous air pollutants are: National
Emissions Standards for Shipbuilding and Ship Repair (Surface Coating)
and National Emissions Standards for Wood Furniture Manufacturing
Operations. This action also finalizes revisions to the regulatory
provisions related to emissions during periods of startup, shutdown and
malfunction.

DATES: This final action is effective on November 21, 2011.

ADDRESSES: The EPA has established a docket for this action under
Docket ID Number EPA-HQ-OAR-2010-0786. All documents in the docket are
listed on the http://www.regulations.gov Web site. Although listed in
the index, some information is not publicly available, e.g.,
confidential business information or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet, and will be publicly available
only in hard copy form. Publicly available docket materials are
available either electronically through http://www.regulations.gov or
in hard copy at the EPA Docket Center, EPA West Building, Room Number
3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading
Room hours of operation are 8:30 a.m. to 4:30 p.m. Eastern Standard
Time, Monday through Friday. The telephone number for the Public
Reading Room is<PHONE_NUMBER> and the telephone number for the Air and
Radiation Docket and Information Center is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: For questions about this final action
regarding the Wood Furniture Manufacturing Operations National Emission
Standards for Hazardous Air Pollutants (NESHAP), contact Mr. Nicholas
Swanson, Office of Air Quality Planning and Standards, Sector Policies
and Programs Division, Natural Resources Group (E143-03), U.S.
Environmental Protection Agency, Research Triangle Park, NC 27711;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; and email
address<EMAIL_ADDRESS>For questions about this final
action regarding the Shipbuilding and Ship Repair (Surface Coating)
NESHAP, contact Ms. Tina Ndoh, Office of Air Quality Planning and
Standards, Sector Policies and Programs Division, Minerals and
Manufacturing Group (E243-04), U.S. Environmental Protection Agency,
Research Triangle Park, NC 27711; telephone number:<PHONE_NUMBER>; fax
number:<PHONE_NUMBER>; and email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: For specific information regarding the
modeling methodology, contact Mr. James Hirtz, Office of Air Quality
Planning and Standards, Health and Environmental Impacts Division, Air
Toxics Assessment Group (C539-02), U.S. Environmental Protection
Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-
0881; fax number:<PHONE_NUMBER>; and email address:
<EMAIL_ADDRESS>For information about the applicability of these
two NESHAP to a particular entity, contact Dr. Rafael Sanchez, Office
of Enforcement and Compliance Assurance, U.S. Environmental Protection
Agency, Washington, DC 20460; telephone number:<PHONE_NUMBER>; fax
number:<PHONE_NUMBER>; and email address<EMAIL_ADDRESS>    Background Information Document. On December 21, 2010 (75 FR
80220), the EPA proposed revisions to the Shipbuilding and Ship Repair
(Surface Coating) NESHAP and the Wood Furniture Manufacturing
Operations NESHAP, which were evaluated in our residual risk and
technology review (RTR). A summary of the public comments on the
proposal and the EPA's responses to the comments is available in Docket
ID Number EPA-HQ-OAR-2010-0786.
    Organization of this Document. The following outline is provided to
aid in locating information in the preamble.

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document?
    C. Judicial Review
II. Background
III. Summary of the Final Rules
    A. What are the final rule amendments for the Shipbuilding and
Ship Repair (Surface Coating) source category?
    B. What are the final rule amendments for the Wood Furniture
Manufacturing Operations source category?
    C. What are the requirements during periods of startup, shutdown
and malfunction?
    D. What are the effective and compliance dates of the standards?
IV. Summary of Significant Changes Since Proposal
    A. What changes did we make to the Shipbuilding and Ship Repair
(Surface Coating) NESHAP since proposal?
    B. What changes did we make to the Wood Furniture Manufacturing
Operations NESHAP since proposal?
V. Summary of Significant Comments and Responses
    A. Comments for Both Shipbuilding and Ship Repair (Surface
    Coating) and Wood Furniture Manufacturing Operations
    B. Wood Furniture Manufacturing Operations
    C. Shipbuilding and Ship Repair (Surface Coating)
VI. Impacts of the Final Rules
VII. Statutory and Executive Order Reviews
    A. Executive Orders 12866: Regulatory Planning and Review, and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act (CRA)

I. General Information

A. Does this action apply to me?

    Regulated Entities. Categories and entities potentially regulated
by this action include:

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     NESHAP and source category                 NAICS \1\ Code
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Shipbuilding and Ship Repair          336611.
 (Surface Coating).
Wood Furniture Manufacturing          3371, 3372, 3379.
 Operations.
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\1\ North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by the final
action for the source categories listed. To determine whether your
facility would be affected, you should examine the applicability
criteria in the appropriate NESHAP. If you have any questions regarding
the applicability of either of these NESHAP, please contact the
appropriate person listed in the preceding FOR FURTHER INFORMATION
CONTACT section.

B. Where can I get a copy of this document?

    In addition to being available in the docket, an electronic copy of
this final action will also be available on the World Wide Web (WWW)
through the Technology Transfer Network (TTN). Following signature, a
copy of the final action will be posted on the TTN's policy and
guidance page for newly proposed and promulgated rules at the following
address: http://www.epa.gov/ttn/atw/rrisk/rtrpg.html. The TTN provides
information and technology exchange in various areas of air pollution
control.
    Additionally, information on the source category descriptions,
detailed emissions and other data that were used as inputs to the risk
assessments can be found at this site.

C. Judicial Review

    Under section 307(b)(1) of the Clean Air Act (CAA), judicial review
of this final action is available only by filing a petition for review
in the United States Court of Appeals for the District of Columbia
Circuit (the Court) by January 20, 2012. Under section 307(b)(2) of the
CAA, the requirements established by these final rules may not be
challenged separately in any civil or criminal proceedings brought by
the EPA to enforce the requirements.
    Section 307(d)(7)(B) of the CAA further provides that ``[o]nly an
objection to a rule or procedure which was raised with reasonable
specificity during the period for public comment (including any public
hearing) may be raised during judicial review.'' This section also
provides a mechanism for us to convene a proceeding for
reconsideration, ``[i]f the person raising an objection can demonstrate
to EPA that it was impracticable to raise such objection within [the
period for public comment] or if the grounds for such objection arose
after the period for public comment (but within the time specified for
judicial review) and if such objection is of central relevance to the
outcome of the rule.'' Any person seeking to make such a demonstration
to us should submit a Petition for Reconsideration to the Office of the
Administrator, U.S. EPA, Room 3000, Ariel Rios Building, 1200
Pennsylvania Ave. NW., Washington, DC 20460, with a copy to both the
person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT
section and the Associate General Counsel for the Air and Radiation Law
Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200
Pennsylvania Ave. NW., Washington, DC 20460.

II. Background

    Section 112 of the CAA establishes a two-stage regulatory process
to address emissions of hazardous air pollutants (HAP) from stationary
sources. In the first stage, after the EPA has identified categories of
sources emitting one or more of the HAP listed in section 112(b) of the
CAA, section 112(d) calls for us to promulgate NESHAP for those
sources. ``Major sources'' are those that emit, or have the potential
to emit, any single HAP at a rate of 10 tons per year (tpy) or more, or
25 tpy or more of any combination of HAP. For major sources, these
technology-based standards must reflect the maximum degree of emission
reductions of HAP achievable (after considering cost, energy
requirements and nonair quality health and environmental impacts) and
are commonly referred to as maximum achievable control technology
(MACT) standards.
    For MACT standards, the statute specifies certain minimum
stringency requirements, which are referred to as floor requirements,
and may not be based on cost considerations. See CAA section 112(d)(3).
For new sources, the MACT floor cannot be less stringent than the
emission control that is achieved in practice by the best controlled
similar source. The MACT standards for existing sources can be less
stringent than floors for new sources, but they cannot be less
stringent than the average emission limitation achieved by the best-
performing 12 percent of existing sources in the category or
subcategory (or the best-performing five sources for categories or
subcategories with fewer than 30 sources). In developing MACT, we must
also consider control options that are more stringent than the floor
under CAA section 112(d)(2). We may establish standards more stringent
than the floor, based on the consideration of the cost of achieving the
emissions reductions, any nonair quality health and environmental
impacts and energy requirements. In promulgating MACT standards, CAA
section 112(d)(2) directs us to consider the application of measures,
processes, methods, systems or techniques that reduce the volume of or
eliminate HAP emissions through process changes, substitution of
materials or other modifications; enclose systems or processes to
eliminate emissions; collect, capture or treat HAP when released from a
process, stack, storage or fugitive emissions point; and/or are design,
equipment, work practice or operational standards.
    In the second stage of the regulatory process, we undertake two
different analyses, as required by the CAA. Section 112(d)(6) of the
CAA calls for us to review the technology-based standards and to revise
them ``as necessary (taking into account developments in practices,
processes, and control technologies)'' no less frequently than every 8
years. Within 8 years after promulgation of the technology standards,
CAA section 112(f) calls for us to evaluate the risk to public health
remaining after application of the technology-based standards and to
revise the standards, if necessary, to provide an ample margin of
safety to protect public health or to prevent, taking into
consideration costs, energy, safety and other relevant factors, an
adverse environmental effect. In doing so, the EPA may adopt standards
equal to existing MACT standards if the EPA determines that the
existing standards are sufficiently protective. National Resources
Defense Council (NRDC) v. EPA, 529 F.3d 1077, 1083 (DC Cir. 2008).
    On December 21, 2010, the EPA published a proposed rule in the
Federal Register for these two NESHAP that took into consideration the
residual risk and technology review (RTR) analyses. For these NESHAP--
Shipbuilding and Ship Repair (Surface Coating) and Wood Furniture

Manufacturing Operations--this action provides the EPA's final
determinations and regulatory amendments pursuant to the RTR provisions
of CAA section 112. For both NESHAP, we also are finalizing revisions
to requirements in each NESHAP related to emissions during periods of
startup, shutdown and malfunction (SSM). This action also addresses
formaldehyde limits and the use of conventional spray technology for
the Wood Furniture Manufacturing Operations NESHAP.

III. Summary of the Final Rules

A. What are the final rule amendments for the Shipbuilding and Ship
Repair (Surface Coating) source category?

    The NESHAP for Shipbuilding and Ship Repair (Surface Coating) were
promulgated on December 15, 1995 (60 FR 64330), and codified at 40 CFR
part 63, subpart II. The shipbuilding and ship repair industry consists
of establishments that build, repair, repaint, convert and alter ships
which are marine or fresh-water vessels used for military or commercial
operations. The source category covered by this MACT standard includes
only the shipbuilding and ship repair surface coating operations that
occur at facilities that are major sources of HAP.
    We are finalizing the Shipbuilding and Ship Repair (Surface
Coating) rule as it was proposed, with no changes. For the reasons
provided in the proposed rule and in the support documents in the
docket, we have determined that the current MACT standards for
shipbuilding and ship repair (surface coating) facilities reduce risk
to an acceptable level, provide an ample margin of safety to protect
public health and prevent an adverse environmental effect. We are,
therefore, re-adopting the existing MACT standards to satisfy section
112(f) of the CAA. We have determined that the developments in
technology would give minimal health benefits and are not cost
effective. The costs of implementing developments in practices,
processes or control technologies since promulgation of the MACT
standards are disproportionate to the emission reduction that would be
achieved and, therefore, we are not adopting additional technology
standards pursuant to CAA section 112(d)(6).
    We are finalizing changes to the Shipbuilding and Ship Repair
(Surface Coating) MACT standards to eliminate the SSM malfunction
exemption. These changes revise Table 1 in 40 CFR part 63, subpart II,
to indicate that several requirements of the 40 CFR part 63 General
Provisions related to periods of SSM do not apply. We are adding
provisions to the Shipbuilding and Ship Repair (Surface Coating) MACT
standards requiring sources to operate in a manner that minimizes
emissions, removing the SSM plan requirement, clarifying the required
conditions for performance tests and revising the SSM-associated
recordkeeping and reporting requirements to require reporting and
recordkeeping for periods of malfunction. It is required that all
facilities comply with the NESHAP during startup and shutdown. We are
also finalizing provisions, generally as proposed, to provide an
affirmative defense against civil penalties for potential violations of
emission standards caused by malfunctions, as well as criteria for
establishing the affirmative defense.
    These revisions to the Shipbuilding and Ship Repair (Surface
Coating) MACT standards are not expected to result in any emissions
reduction or economic impacts. We have determined that facilities in
this source category can meet the applicable emissions standards at all
times. No changes in costs to industry are predicted.

B. What are the final rule amendments for the Wood Furniture
Manufacturing Operations source category?

    The NESHAP for Wood Furniture Manufacturing Operations were
promulgated on December 7, 1995 (60 FR 62930), and codified at 40 CFR
part 63, subpart JJ. The Wood Furniture Manufacturing Operations source
category consists of establishments that produce a range of wood
products, including wood kitchen cabinets, wood residential furniture,
upholstered residential and office furniture, wood office furniture and
fixtures, partitions, shelving, lockers and other wood furniture not
included in one of the categories listed above. The source category
covered by this MACT standard includes only the wood furniture
manufacturing operations that occur at facilities that are major
sources of HAP.
    In the proposal for this rule making, the EPA proposed a
formaldehyde emissions limit of 400 pounds per 12-month period. As
discussed in section IV.B.1 below, the EPA received comments concerning
potential impacts on facilities with high production volume and
determined that the proposed limit would not be cost effective for all
facilities in the source category. For this reason, the EPA is
finalizing two alternative compliance options. Under the authority of
section 112(d)(6) of the CAA, we are finalizing a limit on formaldehyde
emissions by limiting formaldehyde content in coatings and contact
coatings and contact adhesives to 1 percent by weight. As an
alternative compliance option, we are allowing facilities to comply
with a formaldehyde usage limit of 400 pounds per rolling 12-month
period, as we originally proposed. Less than 20 facilities are known to
exceed 400 pounds per 12-month period based on 2005 National Emissions
Inventory (NEI) data and communications with wood furniture
manufacturing facilities.\1\ The phone calls indicated that there were
reductions in emissions since the 2005 NEI and all but one of the
facilities contacted were below 400 pounds per 12-month period. This
leads us to conclude that most of the facilities that exceeded 400
pounds of formaldehyde per 12 month period according to the 2005 NEI
are now below that level. We are aware of at least one facility that
has facilities with high production volume that still exceeds the 400
pound level. After receiving updated information, we concluded that the
proposed 400 pounds formaldehyde per rolling 12-month period usage
limit was not cost effective as a mandatory formaldehyde limit for all
facilities within the source category. For this reason, the EPA is
adopting the 400 pound formaldehyde limit as an alternative requirement
to the requirement to limit formaldehyde content to 1 percent in
coatings and contact adhesives. The 400 pound limit would not be cost
effective for facilities with high production volume because, while
they use low-formaldehyde coatings, these facilities would still exceed
the 400 pounds per 12-month period because of the quantity of coatings
and contact adhesives applied. To further reduce formaldehyde
emissions, these facilities would require the addition of costly
control devices and/or reconstruction of their spray line system. For
more information, see Estimated Cost Impact for Wood Furniture
Manufacturing Industry To Comply With Proposed Formaldehyde Limit on
Coating Operations Wood Furniture Manufacturing RTR, dated August 4,
2011, in the docket for this action. Such facilities can, however,
cost-effectively comply with a standard

that limits the formaldehyde content of coatings and contact adhesives
to 1 percent.\2\ While the formaldehyde content of coating and contact
adhesive formulations have been reduced since promulgation of the 1995
NESHAP, the EPA has received information that some facilities may still
rely on formulations that contain greater than 1 percent
formaldehyde.\3\ The EPA has determined that some of these facilities
could not readily meet the 1 percent formaldehyde limit and so is
allowing, as an alternative compliance option, the originally proposed
400 pound formaldehyde limit.
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    \1\ The memo to the docket, Impacts of Implementing a Limit on
Formaldehyde Usage in the Wood Furniture Manufacturing Operations
Source Category, dated October 19, 2010, shows that there are 27
facilities that exceed 400 pounds per year of formaldehyde emissions
according to 2005 NEI data. Calls to industry showed that many of
these facilities have lowered their emissions of formaldehyde
significantly since 2005 as shown in the memo Updated Formaldehyde
Emissions from Select Wood Furniture Manufacturers, dated August 3,
2011, in the docket for this action.
    \2\ The concentrations of formaldehyde received from the known
facility with high production volume exceeds 400 pounds per 12-month
period is in the Estimated Cost Impact for Wood Furniture
Manufacturing Industry To Comply With Proposed Formaldehyde Limit on
Coating Operations Wood Furniture Manufacturing RTR, dated August 4,
2011, in the docket for this action.
    \3\ For more details, see Conversation with a Representative of
Kitchen Cabinet Manufacturers Association (KCMA) Regarding Add-On
Control Devices and High Formaldehyde Concentration in Coatings,
dated June 23, 2011, in the docket for this action.
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    We are also finalizing, with one modification, the proposed
prohibition on the use of conventional spray \4\ guns pursuant to CAA
section 112(d)(6). As explained in the proposed rule and supporting
documents in the docket, we have determined that use of non-
conventional spray guns results in lower HAP emissions than use of
conventional spray guns. When spraying a piece of wood furniture with a
coating, there is a prescribed amount of coating to be applied to the
wood surface. With the higher spray efficiency associated with non-
conventional spray guns, less spray is generally required to apply the
desired amount of coating so less coating is used. This means that less
overspray will occur, creating fewer emissions. Conventional spray guns
are now used infrequently in the wood furniture manufacturing industry,
and the costs to use non-conventional spray guns are approximately
equal to conventional spray guns. The EPA estimates that the switch to
non-conventional spray guns does not incur a cost burden associated
with decreased product consumption and cost.\5\
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    \4\ The definition of ``conventional spray'' can be found in the
1995 Wood Furniture Manufacturing Operations NESHAP.
    \5\ See Developments in Practices, Processes, and Control
Technologies, dated August 24, 2010 in the docket for this action.
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    Considering information received during the comment period that
some facilities route conventional spray gun overspray to control
devices, we are modifying the proposed prohibition on the use of
conventional spray guns to retain an exception in the NESHAP to allow
the use of conventional spray guns if emissions from the finishing
station are routed to a control device. See 40 CFR 63.803(h)(4). The
efficiency of the control device, even when coupled with the
conventional spray gun, reduces excess emissions better than a change
to high efficiency spray technology. The EPA does not expect facilities
will incur the significant cost of installing a control device for the
sole purpose of using conventional spray guns. We expect the vast
majority of facilities to use non-conventional applicators of wood
furniture finishes, with only a small number of facilities choosing to
use conventional spray guns with a control device.
    We are also finalizing changes to the Wood Furniture Manufacturing
Operations NESHAP to eliminate the SSM exemption. These changes revise
Table 1 in 40 CFR part 63, subpart JJ, to indicate that several
requirements of the 40 CFR part 63 General Provisions related to
periods of SSM do not apply. We are adding provisions to the Wood
Furniture Manufacturing Operations MACT standards requiring sources to
operate in a manner that minimizes emissions, removing the SSM plan
requirement, clarifying the required conditions for performance tests
and revising the SSM-associated recordkeeping and reporting
requirements to require reporting and recordkeeping for periods of
malfunction. We are also adding provisions to provide an affirmative
defense against civil penalties for exceedances of emission standards
caused by malfunctions, as well as criteria for establishing the
affirmative defense.
    We are finalizing language to clarify the applicability for Wood
Furniture Manufacturing Operations to be consistent with surface
coating rules issued after the promulgation of the Wood Furniture MACT
standards in 1995. These include the subparts for Surface of
Miscellaneous Metal Parts and Products (MMMM), Surface Coating of
Plastic Parts and Products (PPPP), Surface Coating of Wood Building
Products (QQQQ), and Surface Coating of Metal Furniture (RRRR) of 40
CFR part 63. Subparts MMMM, PPPP, QQQQ and RRRR exempt surface coating
operations that are subject to other subparts of 40 CFR part 63, such
as the Wood Furniture Operations MACT standards. (See 40 CFR
63.3881(c)(6), 63.4481(c)(7), 63.4681(c)(2), 63.4881(c)(2)). Therefore,
we are finalizing amendments to the Wood Furniture Operations MACT
standards to acknowledge that surface coating operations that are
subject to subparts MMMM, PPPP, QQQQ or RRRR of 40 CFR part 63 are not
subject to the Wood Furniture Manufacturing Operations standards.
    In this action, we are taking a step to improve data accessibility.
Owners and operators demonstrating compliance using the test methods
cited in Sec.  63.805(c), as an alternative to Sec.  63.9(h), are not
required but may submit electronic copies of required performance test
reports through the Electronic Reporting Tool (ERT). The ERT transmits
the electronic report through EPA's Central Data Exchange network for
storage in the WebFIRE database making submittal of data very
straightforward and easy. The WebFIRE database was constructed to store
performance test data for use in developing emission factors. A
description of the ERT can be found at http://www.epa.gov/ttn/chief/ert/ert_tool.html. A description of the WebFIRE database is available
at http://cfpub.epa.gov/oarweb/index.cfm?action=fire.main.
    The ERT would allow for an electronic review process rather than a
manual data assessment, making review and evaluation of the source-
provided data and calculations easier and more efficient. Finally,
having data submitted electronically, the EPA would be able to develop
improved emission factors, make fewer information requests and
promulgate better regulations. These revisions to the Wood Furniture
Manufacturing Operations MACT standards are not expected to result in
economic or quantifiable environmental impacts. We have determined that
facilities in this source category can meet the applicable emissions
standards at all times.

C. What are the requirements during periods of startup, shutdown and
malfunction?

    The Court vacated portions of two provisions in the EPA's CAA
section 112 regulations governing the emissions of HAP during periods
of SSM. Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008).
Specifically, the Court vacated the SSM exemption contained in 40 CFR
63.6(f)(1) and 40 CFR 63.6(h)(1), that is part of a regulation,
commonly referred to as the ``General Provisions Rule,'' that the EPA
promulgated under section 112 of the CAA. When incorporated into CAA
section 112(d) regulations for specific source categories, these two
provisions exempt sources from the requirement to comply with the
otherwise applicable CAA section 112 emission standards during periods
of SSM.

    While the Court's ruling in Sierra Club v. EPA, 551 F.3d 1019 (DC
Cir. 2008), did not directly affect the two NESHAP addressed here, the
legality of source category-specific SSM provisions, such as those in
both NESHAP, are called into question based on the reasoning in that
decision.
    Consistent with Sierra Club v. EPA, we have eliminated the SSM
exemptions in these two NESHAP. We have also revised Table 1 (the
General Provisions table) for subparts II and JJ in several respects.
For example, we have eliminated the incorporation of the General
Provisions' requirement that the source develop an SSM plan. We have
also eliminated or revised certain recordkeeping and reporting
requirements that related to the SSM exemption. The EPA has attempted
to ensure that we have removed any provisions that are inappropriate,
unnecessary or redundant in the absence of the SSM exemption in the
regulatory language.
    The EPA has not established different standards for periods of
startup and shutdown for these NESHAP because we believe compliance
with the standards is achievable during these periods. For facilities
that comply with the NESHAP by using compliant coatings and contact
adhesives, there are no startup or shutdown events that would cause
emissions that are different than those that occur during normal
operations. For facilities that use control devices, there is
sufficient ability for the control device to be started prior to the
spray lines being started and conversely shutdown after the spray lines
have shutdown. In the example of a regenerative thermal oxidizer (RTO),
supplemental fuel can be provided during startup and shutdown of the
spray lines to prevent noncompliance. Thus, we are not aware of any
technical limitations such that emissions from startup or shutdown
cannot be controlled by control devices to the level achieved during
normal operations.
    Periods of startup, normal operations and shutdown are all
predictable and routine aspects of a source's operations. However, by
contrast, malfunction is defined as a ``sudden, infrequent, and not
reasonably preventable failure of air pollution control equipment,
process equipment, or a process to operate in a normal or usual manner.
* * *'' (40 CFR 63.2). The EPA has determined that CAA section 112 does
not require emissions that occur during periods of malfunction to be
factored into development of CAA section 112 standards. Under section
112, emissions standards for new sources must be no less stringent than
the level ``achieved'' by the best controlled similar source, and for
existing sources, generally must be no less stringent than the average
emission limitation ``achieved'' by the best performing 12 percent of
sources in the category. There is nothing in section 112 that directs
the agency to consider malfunctions in determining the level
``achieved'' by the best performing or best controlled sources when
setting emission standards. Moreover, while the EPA accounts for
variability in setting emissions standards consistent with section 112
case law, nothing in that case law requires the agency to consider
malfunctions as part of that analysis. Section 112 uses the concept of
``best controlled'' and ``best performing'' unit in defining the level
of stringency that section 112 performance standards must meet.
Applying the concept of ``best controlled'' or ``best performing'' to a
unit that is malfunctioning presents significant difficulties, as
malfunctions are sudden and unexpected events.
    Further, accounting for malfunctions would be difficult, if not
impossible, given the myriad different types of malfunctions that can
occur across all sources in the category, and given the difficulties
associated with predicting or accounting for the frequency, degree and
duration of various malfunctions that might occur. As such, the
performance of units that are malfunctioning is not ``reasonably''
foreseeable. See, e.g., Sierra Club v. EPA, 167 F. 3d 658, 662 (D.C.
Cir. 1999) (The EPA typically has wide latitude in determining the
extent of data-gathering necessary to solve a problem. We generally
defer to an agency's decision to proceed on the basis of imperfect
scientific information, rather than to ``invest the resources to
conduct the perfect study''). See also, Weyerhaeuser v. Costle, 590
F.2d 1011, 1058 (D.C. Cir. 1978) (``In the nature of things, no general
limit, individual permit, or even any upset provision can anticipate
all upset situations. After a certain point, the transgression of
regulatory limits caused by `uncontrollable acts of third parties,'
such as strikes, sabotage, operator intoxication or insanity, and a
variety of other eventualities, must be a matter for the administrative
exercise of case-by-case enforcement discretion, not for specification
in advance by regulation.''). In addition, the goal of a best
controlled or best performing source is to operate in such a way as to
avoid malfunctions of the source, and accounting for malfunctions could
lead to standards that are significantly less stringent than levels
that are achieved by a well-performing non-malfunctioning source. The
EPA's approach to malfunctions is consistent with section 112 and is a
reasonable interpretation of the statute.
    In the event that a source fails to comply with the applicable CAA
section 112 standards as a result of a malfunction event, the EPA would
determine an appropriate response based on, among other things, the
good faith efforts of the source to minimize emissions during
malfunction periods, including preventative and corrective actions, as
well as root cause analyses to ascertain and rectify excess emissions.
The EPA would also consider whether the source's failure to comply with
the CAA section 112 standard was, in fact, ``sudden, infrequent, not
reasonably preventable'' and was not instead ``caused in part by poor
maintenance or careless operation.'' 40 CFR 63.2 (definition of
malfunction).
    Finally, the EPA recognizes that even equipment that is properly
designed and maintained can sometimes fail, and that such failure can
sometimes cause an exceedance of the relevant emission standard. (See,
e.g., State Implementation Plans: Policy Regarding Excessive Emissions
During Malfunctions, Startup, and Shutdown (Sept. 20, 1999); Policy on
Excess Emissions During Startup, Shutdown, Maintenance, and
Malfunctions (Feb. 15, 1983)). The EPA is, therefore, adding to the
final rule an affirmative defense to civil penalties for exceedances of
emission limits that are caused by malfunctions. See 40 CFR 63.782
(Shipbuilding and Ship Repair (Surface Coating)) and 63.801 (Wood
Furniture Manufacturing Operations) (defining ``affirmative defense''
to mean, in the context of an enforcement proceeding, a response or
defense put forward by a defendant, regarding which the defendant has
the burden of proof, and the merits of which are independently and
objectively evaluated in a judicial or administrative proceeding). We
also have added other regulatory provisions to specify the elements
that are necessary to establish this affirmative defense. See 40 CFR
63.781 (Shipbuilding and Ship Repair (Surface Coating)) and 63.800
(Wood Furniture Manufacturing Operations). The source must prove by a
preponderance of the evidence that it has met all of the elements set
forth in the affirmative defense. See also 40 CFR 22.24. The criteria
ensure that the affirmative defense is available only where the event
that causes an exceedance of the emission limit meets the narrow
definition of malfunction in 40 CFR 63.2 (sudden, infrequent, not
reasonably

preventable and not caused by poor maintenance and/or careless
operation). For example, to successfully assert the affirmative
defense, the source must prove by a preponderance of the evidence that
excess emissions ``[w]ere caused by a sudden, infrequent, and
unavoidable failure of air pollution control and monitoring equipment,
process equipment, or a process to operate in a normal or usual manner.
* * *'' The criteria also are designed to ensure that steps are taken
to correct the malfunction, to minimize emissions in accordance with 40
CFR 63.783(b)(1) and 63.802(c) and to prevent future malfunctions. For
example, the source must prove by a preponderance of the evidence that
``[r]epairs were made as expeditiously as possible when the applicable
emission limitations were being exceeded * * *'' and that ``[a]ll
possible steps were taken to minimize the impact of the excess
emissions on ambient air quality, the environment and human health * *
*'' In any judicial or administrative proceeding, the Administrator may
challenge the assertion of the affirmative defense, and, if the
respondent has not met its burden of proving compliance with all of the
requirements in the affirmative defense, appropriate penalties may be
assessed in accordance with section 113 of the CAA (see also 40 CFR
22.27).
    The EPA included an affirmative defense in the final rule in an
attempt to balance a tension, inherent in many types of air regulation,
to ensure adequate compliance while simultaneously recognizing that
despite the most diligent of efforts, emission limits may be exceeded
under circumstances beyond the control of the source. The EPA must
establish emission standards that ``limit the quantity, rate, or
concentration of emissions of air pollutants on a continuous basis.''
42 U.S.C. 7602(k)(defining ``emission limitation and emission
standard''). See generally Sierra Club v. EPA, 551 F.3d 1019, 1021
(D.C. Cir. 2008). Thus, the EPA is required to ensure that section 112
emissions limitations are continuous. The affirmative defense for
malfunction events meets this requirement by ensuring that even where
there is a malfunction, the emission limitation is still enforceable
through injunctive relief. While ``continuous'' limitations, on the one
hand, are required, there is also case law indicating that in many
situations, it is appropriate for the EPA to account for the practical
realities of technology. For example, in Essex Chemical v. Ruckelshaus,
486 F.2d 427, 433 (D.C. Cir. 1973), the DC Circuit acknowledged that in
setting standards under CAA section 111 ``variant provisions'' such as
provisions allowing for upsets during startup, shutdown and equipment
malfunction ``appear necessary to preserve the reasonableness of the
standards as a whole and that the record does not support the `never to
be exceeded' standard currently in force.'' See also, Portland Cement
Association v. Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973). Though
intervening case law such as Sierra Club v. EPA and the CAA 1977
amendments undermine the relevance of these cases today, they support
the EPA's view that a system that incorporates some level of
flexibility is reasonable. The affirmative defense simply provides for
a defense to civil penalties for excess emissions that are proven to be
beyond the control of the source. By incorporating an affirmative
defense, the EPA has formalized its approach to upset events. In a
Clean Water Act setting, the Ninth Circuit required this type of
formalized approach when regulating ``upsets beyond the control of the
permit holder.'' Marathon Oil Co. v. EPA, 564 F.2d 1253, 1272-73 (9th
Cir. 1977). But see, Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1057-58
(D.C. Cir. 1978) (holding that an informal approach is adequate). The
affirmative defense provisions give the EPA the flexibility to both
ensure that its emission limitations are ``continuous'' as required by
42 U.S.C. 7602(k), and account for unplanned upsets and thus support
the reasonableness of the standard as a whole.

D. What are the effective and compliance dates of the standards?

    The revisions to the MACT standards being promulgated in this
action are effective on November 21, 2011. For the two MACT standards
addressed in this action, the compliance date for the revised SSM-
related requirements is November 21, 2011. For the Wood Furniture
Manufacturing Operations NESHAP, the compliance date for the 1 percent
formaldehyde coating and contact adhesive limit and the alternative 400
pound per 12-month formaldehyde use limit as well as the prohibition on
the use of conventional spray guns is 3 years from the effective date
of the standards, November 21, 2014. Beyond the revised SSM provisions,
there are no changes to the Shipbuilding and Ship Repair (Surface
Coating) NESHAP.

IV. Summary of Significant Changes Since Proposal

A. What changes did we make to the Shipbuilding and Ship Repair
(Surface Coating) NESHAP since proposal?

    Following the proposed notice of the RTR for Shipbuilding and Ship
Repair (Surface Coating), the EPA did not receive any new data
demonstrating any cost effective technology updates or data that would
affect our analyses of risks. Accordingly, we have made no changes to
the proposed rule language for the Shipbuilding and Ship Repair
(Surface Coating) NESHAP. However, we corrected an inadvertent error
made in the preamble to the proposed rule. In describing the
Shipbuilding and Ship Repair (Surface Coating) source category, we
incorrectly stated that there were approximately 85 facilities subject
to the Shipbuilding and Ship Repair (Surface Coating) MACT, and that 71
of these 85 facilities, or approximately 84 percent of the source
category, were modeled for the risk analysis. At proposal, we actually
estimated that there were 90 facilities subject to the MACT, and of
those 90 facilities, we modeled approximately 94 percent, or 85
facilities, in the risk analysis. This correction to the preamble text
does not affect the estimated risks or any conclusions of the risk
review. This correction only affects the inadvertent error made in the
preamble text for the proposed rule.

B. What changes did we make to the Wood Furniture Manufacturing
Operations NESHAP since proposal?

1. Formaldehyde Limit
    The potential risk reductions associated with advancement in
coating and adhesive formulations, described below, led us to propose a
formaldehyde limit of 400 pounds per rolling 12-month period, in part
because we believed that this limit could be achieved cost-effectively.
We stated in the proposal that there are many coatings and adhesives
available that contain no or low quantities of formaldehyde, and we
expected any facilities above the 400 pounds per 12 month limit to be
able to reduce their emissions below the 400 pound level by using
coatings and adhesives with no or low formaldehyde. We proposed the
formaldehyde usage limit under the authority of CAA section 112(f) and
solicited comment on whether the proposed limit on formaldehyde use
should be issued under CAA section 112(d)(6).
    Comments received after proposal led the EPA to conduct further
analyses of

the compliance costs associated with the proposed 400 pound usage
limit. Data received from one facility, which already uses no- and low-
formaldehyde content coatings and contact adhesives, indicated that
reduction in formaldehyde use to 400 pounds per 12-month period would
not be possible by simply using no- and low-formaldehyde content
coatings and contact adhesives due to the size of its operations and
the amount of coatings and contact adhesives used. To comply with the
proposed 400 pound limit, a spray line reconfiguration (adding five
drying/curing ovens) would be needed. The cost-effectiveness of
formaldehyde reduction for the spray line reconfiguration was estimated
to be $658,000/ton of formaldehyde reduced annually. We believe other
large operation facilities would face similar circumstances. The EPA
does not have specific information on compliance costs for facilities
other than Kitchen Kompact, but even if we assume all other wood
furniture facilities with formaldehyde emissions above 400 pounds per
12-month period in the 2005 NEI database would reduce their
formaldehyde emissions to 400 pound per 12-month period and would incur
zero costs in doing so, the cost-effectiveness would be $43,000/ton of
formaldehyde reduced. We conclude this is not cost effective.\6\
---------------------------------------------------------------------------

    \6\ For more information regarding cost estimates for compliance
with the proposed 400 pound per year formaldehyde limit, refer to
Estimated Cost Impact for Wood Furniture Manufacturing Industry to
Comply with Proposed Formaldehyde Limit on Coating Operations Wood
Furniture Manufacturing RTR, dated August 4, 2011.
---------------------------------------------------------------------------

    Since the MACT was promulgated, manufacturers of coatings and
contact adhesives have been able to replace formaldehyde with less
toxic chemicals, resulting in products that are known in the industry
as ``low-formaldehyde'' or ``no-formaldehyde.'' This development is
particularly evident in the reformulation of conversion varnishes used
in kitchen cabinet manufacturing (see Conversation with Valspar
Regarding Formaldehyde Replacement Chemicals in Coatings, dated August
4, 2011, in the docket for this action).The EPA's proposed 400 pound
limit was based on the availability of low-formaldehyde coatings and
contact adhesives and their use as the current state of technology.
Although there is no formal industry definition of the term ``low-
formaldehyde,'' the EPA found that a formaldehyde content equal to or
less than 1 percent by weight currently is consistent with the industry
trend of continually reducing low formaldehyde formulations. We are
aware of a range of values used in the industry to indicate ``low-
formaldehyde'' (from 0.1 percent to 1.0 percent). Based on information
available to the EPA, we determined that a formaldehyde content level
of 1 percent is the lowest concentration that is clearly cost effective
for the entire source category. We are, therefore, finalizing a limit
of 1 percent formaldehyde by weight based on the availability of
coatings and technical specifications necessary to maintain product
quality and cost-effectiveness.\7\ A content less than 1 percent would
not allow facilities the flexibility to use coatings and adhesives that
are suitable for a range of different products, from cabinets to home
furnishings, without compromising their quality, cost or production.\8\
Also, in many cases, the 1 percent formaldehyde content limit will
allow flexibility in different types of line configurations.\9\
---------------------------------------------------------------------------

    \7\ Discussion with a coatings manufacturer revealed that the
label of ``Low-Formaldehyde'' is subjective and it trends towards
lower and lower concentrations of formaldehyde. For more details,
see Telephone Call with Valspar Regulatory Affairs Manager--Wood
Coatings Wood Furniture Manufacturing RTR dated June 29, 2011 in the
docket for this action. Also as noted previously, Valspar does not
carry any products that exceed 1 percent in formaldehyde
concentration.
    \8\ It is necessary for some facilities to minimize levels of
formaldehyde in the coating formulation to promote cross-linking
nucleation. This process directly affects the quality and durability
of the wood furniture. See notes from the Marsh Furniture Site Visit
in the docket for this action for reference.
    \9\ For additional information, please see memo to the docket,
EPA Meeting with Kitchen Cabinet Manufacturers Association (KCMA)
and Select Representatives, dated August 17, 2011.
---------------------------------------------------------------------------

    The proposed formaldehyde limit (400 pounds per rolling 12-month
period) under CAA section 112(f) was based on these grounds--that wood
furniture manufacturers can and are reducing their formaldehyde
emissions through the use of newer low-formaldehyde coating and contact
adhesive formulations (see 75 FR 80246). The limit of 1 percent
formaldehyde in coatings and contact adhesives in this final rulemaking
is an outgrowth of what the expected means of compliance was during the
proposal for the proposed 400 pound limit. The EPA has confirmed that
most facilities are using low- and no-formaldehyde coatings and contact
adhesives (i.e., coatings and adhesives that have a formaldehyde
concentration not exceeding 1 percent by weight).\10\ Facilities can
thus achieve formaldehyde emissions reductions that are greater than
those required under the existing MACT standard. The original Wood
Furniture Manufacturing Operations NESHAP achieved an 89 percent
reduction in HAP. The industry, for the most part, has gone beyond the
original NESHAP for formaldehyde emissions by continuing to use lower
concentrations of formaldehyde in the coatings and contact adhesives.
By codifying these practices, the EPA is setting a more stringent
standard than was adopted in 1995 and will prevent backsliding into
techniques and formulations used in the past.
---------------------------------------------------------------------------

    \10\ The confirmation of most facilities was obtained in the
following memos in the docket for this action: Telephone Call with
Valspar Regulatory Affairs Manager--Wood Coatings on the
Availability and Use of Low- and No-Formaldehyde Coatings, dated
June 24, 2011. Also, one of the major manufacturers of wood
furniture coatings, Valspar, does not carry any products that have
greater than 1 percent formaldehyde leading to the conclusion that
coatings greater than 1 percent formaldehyde are mostly unnecessary
in the industry. http://www.valsparwood.com/valsparwood/msds/msds.jsp.
---------------------------------------------------------------------------

    CAA section 112(d)(6) requires us to revise emissions standards
taking into account developments in practices, processes and control
technologies. Thus, to codify current industry practice since the MACT
was promulgated and to prevent potential increases in formaldehyde
emissions in the future from coating and contact adhesive use in the
wood furniture manufacturing industry, we are finalizing, under section
112(d)(6) of the CAA, formaldehyde emissions limits through two
compliance options. One option is for new and existing sources to use
only those coatings and contact adhesives with a formaldehyde content
of 1 percent by weight or less. As these low-formaldehyde coatings are
readily available in the marketplace and are comparable in cost to
other coating and contact adhesive formulations, we expect no
additional costs associated with the use of low-formaldehyde coatings
and contact adhesives.
    Moreover, we are retaining the proposed standard--a limit on the
use of formaldehyde of 400 pounds per rolling 12-month period--as an
alternative emission limit to the 1 percent formaldehyde formulation
limit. While the EPA recognizes it is not cost effective for at least
one facility to achieve a limit on the use of formaldehyde of 400
pounds per 12 month period, we acknowledge that most wood furniture
manufacturing facilities' formaldehyde use is already below this
limit.\11\ It is likely that a small subset of low-emitting niche
facilities use higher concentration formaldehyde coatings that may
prefer

to comply with the alternate formaldehyde use limit.\12\ These niche
facilities use greater concentrations of formaldehyde to provide
products to small specialized markets. The EPA is promulgating this 1
percent formulation formaldehyde limit to ensure that we are not
limiting the production of facilities while still encouraging
facilities to limit formaldehyde in their coatings and contact
adhesives. In support of our proposed CAA section 112(f)(2) residual
risk determination, we conducted a risk assessment for the Wood
Furniture Manufacturing Operations source category that provided
estimates of the Maximum Individual Risk (MIR) posed by the allowable
and actual HAP emissions from each source in the category, the
distribution of cancer risks within the exposed populations, cancer
incidence, hazard index for chronic exposures to HAP with noncancer
health effects, and hazard quotients (HQ) for acute exposures to HAP
with noncancer health effects. We found that risks remaining after
compliance with the MACT standard are acceptable.
---------------------------------------------------------------------------

    \11\ For more information, see Updated Formaldehyde Emissions
from Select Wood Furniture Manufacturers, dated August 3, 2011 and
Impacts of Implementing a Limit on Formaldehyde Usage in the Wood
Furniture Manufacturing Operations Source Category, dated October
19, 2011 in the docket for this rule.
    \12\ A representative of KCMA stated that there are facilities
that use coatings and contact adhesives with higher concentrations
of formaldehyde. For more information see, Conversation with a
Representative of Kitchen Cabinet Manufacturers Association (KCMA)
Regarding Add-On Control Devices and High Formaldehyde Concentration
in Coatings, dated June 23, 2011 in the docket for this action.
---------------------------------------------------------------------------

    In making our proposed ample margin of safety determination under
CAA section 112(f)(2), we subsequently evaluated the risk reductions
and costs associated with various emissions control options to
determine whether we should impose additional standards to reduce risks
further. We proposed a standard that would limit the use of
formaldehyde to 400 pounds per rolling 12 month period because we
projected that such a limit would lead to reductions in cancer risks
and the potential for acute noncancer health effects. Specifically, we
estimated that the limit would reduce formaldehyde emissions by an
estimated 9.46 tpy from the baseline level of 20.125 tpy. We also
estimated the maximum individual incremental lifetime cancer risk would
be reduced to approximately 10-in-1 million from a baseline of 20-in-1
million, the estimated cancer incidence due to emissions from the
source category would be reduced by about 15 percent nationwide, and
the estimated maximum acute HQ would be reduced from 7 to 3, based on
the Reference Exposure Levels (REL) for formaldehyde, and from 0.35 to
0.15, based on the acute exposure guideline level (AEGL-1) for
formaldehyde. We believed that there would be either no or minimal
additional costs associated with this option, as the cost of low-
formaldehyde coatings and adhesives are approximately equal to other
coating and adhesive products containing larger quantities of
formaldehyde. Also, we believed there were minimal costs associated
with the recordkeeping and reporting requirements for compliance with
the rule.
    Our estimates of the source category maximum cancer risks have
changed since proposal due to information received during the comment
period. One facility that was included in the risk analysis at proposal
has been determined to not be part of the Wood Furniture Manufacturing
source category. The facility is a manufacturer of wood and melamine
bowls and food service supplies and is not a wood furniture
manufacturer. At proposal, the MIR estimated for the bowl manufacturing
facility was 20 in-1-million due to formaldehyde emissions, based on
actual emissions. This facility MIR was the highest in the source
category. With the elimination of the bowl manufacturing facility from
the category, the source category MIR is 10 in-1-million due to
emissions of ethylbenzene and formaldehyde, based on actual emissions.
The bowl manufacturing facility also was one of two facilities for
which we estimated an acute HQ of 7 for formaldehyde. The maximum acute
formaldehyde HQ of 7 for the other facility in the source category is
unchanged.
    Since proposal we also have further evaluated acute exposures
resulting from emissions from facilities in the source category. To
better characterize the potential health risks associated with
estimated worst-case acute exposures to HAP, and in response to a key
recommendation from the Science Advisory Board's (SAB) peer review of
the EPA's RTR risk assessment methodologies,\13\ we routinely have
examined a wider range of available acute health metrics than we do for
our chronic risk assessments. This is in response to the
acknowledgement that there are generally more data gaps and
inconsistencies in acute reference values than there are in chronic
reference values. By definition, acute California-Reference Exposure
Levels (CA-REL) represent a health-protective level of exposure, with
no risk anticipated at or below those levels, even for repeated
exposures; however, the health risk from higher-level exposures is
unknown. Therefore, when a CA-REL is exceeded and an AEGL-1 or
emergency response planning guidelines (ERPG-1) level is available
(i.e., levels at which mild effects are anticipated in the general
public for a single exposure), we have used them as a second
comparative measure. Historically, comparisons of the estimated maximum
off-site 1-hour exposure levels have not been typically made to
occupational levels for the purpose of characterizing public health
risks in RTR assessments. For most chemicals, the 15 minute
occupational ceiling values are set at levels higher than a 1 hour
AEGL-1, making comparisons to them irrelevant unless the AEGL-1 or
ERPG-1 levels are exceeded. This is not the case when comparing the
available acute inhalation health effect reference values for
formaldehyde.\14\
---------------------------------------------------------------------------

    \13\ The SAB peer review of RTR Risk Assessment Methodologies is
available at: http://yosemite.epa.gov/sab/sabproduct.nsf/
4AB3966E263D943A8525771F00668381/$File/the EPA-SAB-10-007-
unsigned.pdf.
    \14\ U.S. the EPA. (2009) Chapter 2.9, Chemical Specific
Reference Values for Formaldehyde in Graphical Arrays of Chemical-
Specific Health Effect Reference Values for Inhalation Exposures
(Final Report). U.S. Environmental Protection Agency, Washington,
DC, the EPA/600/R-09/061, and available online at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=211003.
---------------------------------------------------------------------------

    The worst-case maximum estimated 1-hour exposure to formaldehyde
outside the facility fence line for this source category is 0.47 mg/
m\3\. This estimated worst-case exposure exceeds the 1-hour REL by a
factor of 8 (HQREL = 8) and is below the 1-hour AEGL-1
(HQAEGL-1 = 0.4). Although this exposure estimate does not
exceed the AEGL-1, it exceeds the workplace ceiling level guideline for
the value developed by the NIOSH \15\ ``for any 15 minute period in a
work day'' (NIOSH REL-ceiling value of 0.12 mg/m\3\; HQNIOSH
= 4). Additionally, the estimated maximum acute exposure exceeds the
Air Quality Guideline value that was developed by the World Health
Organization \16\ for 30-minute exposures (0.1 mg/m\3\;
HQWHO = 5). The estimated HQ equals 1 when the ACGIH TLV-
Ceiling value (0.37 mg/m\3\), a value defined as ``not to be exceeded
at any time,'' is compared to the worst-case acute exposure screening
level.\17\ As we proposed, the EPA concludes that the

risk posed by the source category is acceptable. Our estimate of
maximum individual cancer risk for this source category has decreased
since proposal. This decrease is due to a miscategorization of a
facility within the source category. While our screening for acute
impacts has identified the potential for acute formaldehyde exposures
to exceed some public health and occupational exposure guidelines at
some wood furniture facilities, after considering the limited extent to
potential exposures, the fact that the maximum estimate of acute risk
has not changed, the fact that one of these facilities no longer uses
formaldehyde, and the conservative nature of this screening process,
these additional estimates do not change our overall judgment of risk
acceptability. As explained in the proposal, in accordance with the
approach established in the Benzene NESHAP, the EPA weighs all health
risk measures and information considered in the risk acceptability
determination, along with the costs and economic impacts of emissions
controls, technological feasibility, uncertainties, and other relevant
factors, in making our ample margin of safety determination and
deciding whether standards are necessary to reduce risks further.
Considering all of this information, in particular our revised
estimates of the maximum cancer risks associated with the Wood
Furniture Manufacturing source category and our revised estimate of the
costs of additional controls that would reduce risk further, the EPA
has determined that additional standards under CAA section 112(f)(2)
are not necessary to provide an ample margin of safety to protect
public health. We further note that we are finalizing standards under
our CAA section 112(d)(6) authority that, while not expected to result
in further reduction in current emissions or risk levels, are expected
to reduce the emissions that would have been allowed under the 1995
MACT standard.
---------------------------------------------------------------------------

    \15\ National Institutes for Occupational Safety and Health
(NIOSH). Occupational Safety and Health Guideline for Formaldehyde;
http://www.cdc.gov/niosh/docs/81-123/pdfs/0293.pdf
    \16\ WHO (2000). Chapter 5.8 Formaldehyde, in Air Quality
Guidelines for Europe, second edition. World Health Organization
Regional Publications, European Series, No. 91. Copenhagen, Denmark.
Available on-line at http://www.euro.who.int/_data/assets/pdf_file/0005/74732/E71922.pdf.
    \17\ EPA considers this HQ of 1 not to represent an exceedance
of the ACGIH value.
---------------------------------------------------------------------------

2. Advances in Spray Technology
    The EPA proposed to prohibit the use of conventional spray guns, as
defined by the 1995 Wood Furniture Manufacturing NESHAP, pursuant to
CAA section 112(d)(6). This final rule promulgates this ban on
conventional spray guns with one modification. Based on comments
received, we are retaining an existing provision allowing the use of
conventional spray guns when the overspray is routed to a control
device. As reflected in the comments, some facilities are using
overspray from conventional spray guns to partially fuel control
devices such as RTOs. This exception from the ban allows facilities to
avoid having to supplement fuel to a control device. The efficiency of
the control device more than sufficiently reduces excess emissions
associated with the decreased spray efficiency of conventional spray
guns.\18\ This exception for control devices is the sole exception for
conventional spray gun use maintained from the 1995 NESHAP.
---------------------------------------------------------------------------

    \18\ A typical transfer efficiency of an HVLP gun is 65-80
percent compared to 25-45 percent for conventional guns under
similar conditions. This is a difference of 40 percent spray
efficiency. When compared to an estimate of 90 percent efficiency of
an add-on control device, the control device more than compensates
for the 40 percent reduction in efficiency of guns. For more
information on transfer efficiencies of spray technologies, see the
memo to the docket, Impacts of Prohibiting the Use of Conventional
Spray Guns in the Wood Furniture Manufacturing Operations Source
Category, dated October 29, 2010.
---------------------------------------------------------------------------

    The EPA estimates that the switch to high efficiency spray guns
from conventional spray guns does not incur a cost burden due to
decreased product consumption and cost. Some of the high efficiency
spray devices are more costly than conventional guns, but the savings
in coating costs attributed to the increased spray efficiency more than
compensates for increased cost of spray technology. Because the EPA
lacks data regarding the number of conventional spray guns used in the
industry and the change of spray efficiency in replacing conventional
spray technology, we cannot quantify emissions reductions due to
changing spray technology. For further information regarding cost and
emission reductions, refer to the proposed preamble of this rulemaking.

V. Summary of Significant Comments and Responses

    In the proposed action, we requested public comments on our
residual risk reviews, our technology reviews, proposed amendments
related to periods of SSM, the proposed prohibition of conventional
spray guns in the wood furniture manufacturing industry, the proposed
limit on formaldehyde use in coatings and contact adhesives for the
wood furniture manufacturing industry and clarification of rule
provisions. We received written comments from 18 commenters. Our
responses to the public comments that changed the basis for our
decisions, or are otherwise significant, are provided below.\19\
---------------------------------------------------------------------------

    \19\ See Summary of Public Comments and Responses for
Shipbuilding and Ship Repair (Surface Coating) and Wood Furniture
Manufacturing Operations NESHAP, dated October 31, 2011, for
summaries of all comments and our responses to them.
---------------------------------------------------------------------------

A. Comments for Both Shipbuilding and Ship Repair (Surface Coating) and
Wood Furniture Manufacturing Operations

    Comment: A commenter pointed out that the EPA's own data show
greater emissions reductions are being achieved and able to be
achieved. According to the commenter, the EPA recognizes that certain
sources have ``achieved'' a level of ``actual'' emissions that is below
the level allowed under the existing MACT standards. The commenter
further states that the EPA explains that ``the `actual' emission
levels are often lower than the emission levels that a facility might
be allowed to emit and still comply with the MACT standards.'' The
commenter says that the EPA's expectation that sources in these two
categories are generally operating at half the level of emissions
allowed under the existing MACT standard is at the core of its emission
data analysis. Once the EPA has this information, it must factor this
into the technology review under section 112(d)(6). Doing so should
lead the EPA to revise the existing MACT for both source categories to
require additional emission reductions.
    The commenter further states that as part of the required section
112(d)(6) rulemaking, the EPA can have no possible justification for
failing to recalculate the MACT floors based on new technology or
emission reductions now achieved by these source categories.
    The Court in the Hazardous Organic NESHAP (HON) decision stated
that it did ``not think the words `review, and revise as necessary' ''
required the EPA to recalculate the floors ``from scratch'' in that
case. NRDC, 529 F.3d at 1084. In short, the NRDC Court expressly
declined to decide whether the EPA was required to recalculate floors
where, as here, there have been developments in practices, processes,
and control technologies.
    As already noted above, for these source categories, there are such
``developments.'' Therefore, the EPA cannot rely on the HON case to
evade its duty to satisfy section 112(d)(6). The HON case did not
authorize the EPA to ignore data showing that significant emission
reductions below the ``MACT-allowable'' emissions level have been
``achieved'' in practice. Even under NRDC--assuming arguendo that its
section 112(d)(6) holding is in any way relevant here--section
112(d)(6) requires the EPA to recalculate the MACT floor when there
have been advances in technology (after taking account of the factors
listed in section 112(d)(6)), and when there is

information showing that greater emission reductions are ``achieved in
practice.'' Commenters contend that, based on the information the EPA
has, it is therefore ``necessary'' for the EPA to strengthen the
existing MACT floor to ensure it now complies with section 112(d)(2)-
(3).
    The EPA must consider and address whether the existing MACT,
including the floor, remains lawful in view of the greater levels of
emission reductions that have been achieved.
    Response: The commenter is mistaken on several grounds. First, the
commenter asserts that ``the EPA recognizes that certain sources have
`achieved' a level of `actual' emissions that is below the level
allowed under the existing MACT standards'' and cites the Notice of
Proposed Rulemaking preamble at 75 FR at 80227. This was a qualitative,
introductory statement about how the NEI and other sources of data
typically contain estimates of actual emissions that are ``often''
lower than allowable emissions. The statement was not specific to Wood
Furniture or Shipbuilding facilities or data and in any event did not
contain any quantitative determination about actual emissions levels.
    Second, the commenter asserts that the EPA has an ``expectation''
that wood furniture and shipbuilding sources are ``generally
operating'' at half of allowable emissions and once the EPA has this
information, it must use it under CAA section 112(d)(6) to revise MACT
standards, including recalculating MACT floors under section 112(d)(2)-
(3). The comment apparently refers to the MACT allowable to actual
emissions ratio developed for the source categories in this rulemaking.
The commenter is incorrect in characterizing this ratio as a
determination of the level of actual emissions achieved in practice in
either source category. The actual to allowable ratio represents the
lowest concentration of HAP in a coating available to the industry
compared to the maximum allowed under the MACT. The allowable ratio is
used for providing a worst-case scenario for estimating allowable
emissions from the source. As clarification, for these coating rules,
the concentrations of HAP in the coatings are considered the emissions
from the source.
    Third, the commenter is incorrect in asserting that the EPA must
recalculate MACT floors under CAA section 112(d)(2)-(3). As explained
in prior RTR rulemakings, the EPA does not read 112(d)(6) as requiring
a reanalysis or recalculation of MACT floors. See proposed National
Emission Standards for Coke Oven Batteries (69 FR 48388, 48351 (August
9, 2004)). Instead, we interpret section 112(d)(6) as essentially
requiring us to consider developments in pollution control in the
industry (``taking into account developments in practices, processes,
and control technologies''), and assessing the costs of potentially
stricter standards reflecting those developments. We read this
provision as providing the EPA with substantial latitude in weighing
these factors and arriving at an appropriate balance in considering
revisions to our standards. This discretion also provides us with
substantial flexibility in choosing how to apply modified standards, if
necessary, to the affected industry.
    The EPA reviewed other potential developments in practices,
processes and control technologies for the Wood Furniture Manufacturing
Operations and Shipbuilding and Ship Repair (Surface Coating) source
categories and evaluated costs of potentially more stringent standards
reflecting any such developments.\20\ The EPA believes this review and
the revisions finalized in this rulemaking satisfy the EPA's
obligations under CAA 112(d)(6) for the Wood Furniture and Shipbuilding
source categories.
---------------------------------------------------------------------------

    \20\ The EPA's review and analysis for the shipbuilding source
category can be found in Affordability of Add-on Controls for
Surface Coating Operations at Shipbuilding and Ship Repair
Facilities, dated 10/28/2010, and for the wood furniture surface
category in Affordability of Lower VHAP Coating and Add-on Controls
for Wood Furniture Manufacturing Operations, dated October 28, 2010.
Other significant memos describing the EPAs technology review are:
     Developments in Practices, Processes, and Control Technologies
for Wood Furniture Manufacturing Operations, dated August 24, 2010;
Impacts of Prohibiting the Use of Conventional Spray Guns in the
Wood Furniture Manufacturing Operations Source Category, dated
October 19, 2010;
     Cost Analyses for Control Options, dated September 27, 2010;
Cost Analyses for Add-on Controls for Surface Coating Operations at
Shipbuilding and Ship Repair Facilities, dated September 9, 2010.
---------------------------------------------------------------------------

B. Wood Furniture Manufacturing Operations

    Comment: A commenter stated the EPA has provided no rational
explanation for refusing to update the technology standards for both
categories to meet the CAA section 112(d)(6) requirement, at minimum,
by matching the limits of what sources have achieved and what other
jurisdictions have required. The commenter stated:

    We urge the EPA to do so in the final rule. Where, as here,
there are ``significant developments'' in technology, and where, as
here, sources have achieved lower levels of emissions ``in
practice'' than are ``MACT-allowable,'' it is abundantly clear that
Sec.  112(d)(6) requires the EPA to revise its standards in
accordance with CAA Sec.  112(d)(2)-(3), (6), 42 U.S.C. Sec.
7412(d)(2)-(3), (6).

    The commenter also inquires why the EPA did not adopt more
stringent standards based on other regulating bodies within the
country.
    Response: The EPA has concluded the technology review for the wood
furniture manufacturing operations NESHAP by setting a formaldehyde
limit based on formulation (1 percent by weight) of finish coatings and
contact adhesives with a compliance alternative using no more than 400
pounds of formaldehyde per 12 months. Also under the technology review,
we are adopting a restriction of conventional spray guns limiting use
to when emissions from finishing applications are routed to a control
device. The commenter refers to volatile organic compounds (VOC)
standards of the Bay Area and South Coast Air Quality Management
Districts (BAAQMD and SCAQMD). These two standards are nearly identical
in VOC formulation limits. Through the RTR process, the EPA evaluates
risk and technology developments associated with HAP for the source
categories under consideration. Hazardous air pollutants and VOC
describe different sets of compounds, although a large subset of VOC
are considered HAP. As discussed in the preamble of the proposed rule,
we estimate that of all VOC in wood furniture coatings, 50 percent on
average are HAP. This is an average value that in fact varies from
facility to facility and coating to coating, depending on the
facility's use of coatings specific to their operation. This is
especially true for many niche companies. The EPA acknowledges BAAQMD
and SCAQMD implementation of VOC limits, but these limits are not
justified as nation-wide standards to reduce HAP from Wood Furniture
Manufacturing. They are not technically feasible to be implemented
nationally based on different operating and environmental conditions as
well as the cost-effectiveness. By the commenter's own admission, there
are facilities that are having a difficult time complying with the
BAAQMD standard within its region. Moreover, based on available
information, the EPA maintains that both area regulations are not cost
effective as national standards to reduce HAP. As discussed in the
preamble to the proposed rule, adoption of the BAAQMD VOC limits would
result in 56 tpy of HAP reduction at a cost of $30,000 per ton.
Although the commenter asserts based on a

conversation with BAAQMD staff that companies in the area are generally
complying with BAAQMD limits, the EPA already assumed compliance when
we estimated HAP reductions and cost-effectiveness of the BAAQMD
limits. We have not changed our conclusion that the BAAQMD and SCAQMD
regulation are not cost effective as a national standard.
    Comment: Two commenters stated that the facility with the highest
reported formaldehyde emissions (Kitchen Kompact located in
Jeffersonville, Indiana) is not a representative wood coating
manufacturing facility.
    The commenters offered the following reasons:
    a. The facility finishes products 4 days a week (as opposed to the
EPA's 5-day assumption);
    b. The facility uses uses higher VOC coating without a control
device; and
    c. The facility has all operations at one facility (other large
facilities may spread operations over several facilities).
    Another commenter believed that it is arbitrary for the EPA to set
the formaldehyde limit based on data indicating that 3 percent (more
likely 1 percent, see below) of facilities have formaldehyde emissions
that could result in exceedances of the acute REL. The commenter
offered the following reasons why the EPA's conclusion that 11
facilities (about 3 percent of the facilities) have formaldehyde
emissions that could result in exceedances of the acute REL is
problematic:
    a. The EPA identified four facilities for emissions verification,
two of which were reported to have formaldehyde emissions. One of these
two, Chromcraft, no longer uses coatings that contain or emit
formaldehyde. The other, Kitchen Kompact, emits less formaldehyde than
reported and is not a representative facility. Both facilities are
problematic and indicate that the facility data used in the risk
assessment are suspect.
    b. Three of the 11 facilities either no longer use formaldehyde-
containing coatings or contact adhesives (Chromcraft) or have lower
production than the EPA identified (Kitchen Kompact and Legacy
Cabinets). Removing Chromcraft, only 10 facilities, or 2.5 percent of
the total, have emissions that could result in exceedances of the acute
REL.
    c. The refined modeling approach that used aerial photographs of
the facilities identified two major problems with the Human Exposure
Model-3 (HEM-3) screening results:
     The REL, for several facilities, were overestimated due to
global positioning system errors and;
     Moving the ``polar ring'' has a significant impact on the
risk assessment. An evaluation of the aerial map indicated that the REL
needed to be lowered in some cases by as much as 74 percent. While
developing refined acute risks based on review of aerial maps is better
than the screening approach, it is subjective at best.
    d. Three of the 10 facilities had refined predicted acute risks
greater than 3. The remaining 7 facilities had refined predicted acute
risks of less than 3, and a majority of these had predicted acute risks
just above 1 (1.5, 1.5, 1.6,\21\ 1.8). The commenter suggested that the
risks for these facilities should be discounted.
---------------------------------------------------------------------------

    \21\ The value of 1.6 refers to Legacy Cabinets which, as the
commenter asserts, no longer has any coatings or contact adhesives
with formaldehyde in them.
---------------------------------------------------------------------------

    After removing these data points discussed above, the commenter
noted that there are six facilities (approximately 1 percent of the
facilities) with acute risks greater than 1. The commenter noted that
setting a standard based on six facilities (or 1 percent of all wood
furniture facilities) is unjustified and arbitrary.
    Response: The EPA acknowledges that there have been changes to
formaldehyde emissions since 2005. According to the comments received
as well as phone conversations with several facilities, the EPA has
received indications that facilities have changed and lowered
formaldehyde emissions, subsequent to the 2005 NEI data. These updates,
however, are not being used to replace the 2005 NEI data because data
were not provided to support the assertions. Because the data are
unverified, the EPA used source data from 2005 NEI to keep a verified
source for purposes of risk assessment. As discussed elsewhere in this
preamble, we are not adopting any new or additional requirements based
on the risk assessment under section 112(f). We have found risk to be
acceptable for this rule making.
    Comment: Multiple commenters offered comments on the use of
formaldehyde dose-response values.
    Two commenters supported the use of the Integrated Risk Management
System (IRIS) dose-response value for formaldehyde in the risk
assessment.
    One of the commenters stated that it is not only appropriate for
the EPA to end its use of the Chemical Industry Institute of Toxicology
(CIIT) Centers for Health Research risk value for formaldehyde
emissions, doing the contrary would be arbitrary, capricious and
unlawful. The commenter supported the IRIS value because it is more
than 2,000 times greater than the CIIT value and thus more health-
protective.
    Alternatively, six commenters did not support the use of
``outdated'' and ``overly conservative'' models, such as that used to
derive the IRIS dose-response value for formaldehyde.
    One commenter stated that the EPA must use the best available
science in its risk assessment, which is not the IRIS value. The
commenter noted that the EPA has previously determined that the IRIS
value ``no longer represents the best available science in the peer
reviewed literature.'' 69 FR 18,327, 18,333 (Apr. 7, 2004). It was
stated that the decision to discontinue use of CIIT model is
inappropriate. The CIIT model should continue to be used to inform
formaldehyde risk assessments. The criticisms of the model by Crump and
colleagues lack foundation because the manipulations and alterations of
the model on which they are based did not have an adequate basis in the
underlying biology.
    Response: In 2004, the EPA determined that the Chemical Industry
Institute of Toxicology (CIIT) cancer dose-response value for
formaldehyde (5.5 x 10-\9\ per [mu]g/m\3\) was based on
better science than the IRIS dose-response value (1.3 x
10-\5\ per [mu]g/m\3\), and we switched from using the IRIS
value to the CIIT value in risk assessments supporting regulatory
actions. Based on subsequent published research, however, the EPA
changed its determination regarding the CIIT model, and in 2010 the EPA
returned to using 1991 IRIS value. The National Academy of Sciences
(NAS) completed its review of the EPA's draft assessment in April of
2011 (http://www.nap.edu/catalog.php?record_id=13142), and the EPA has
been working on revising the formaldehyde assessment. The EPA will
follow the NAS Report recommendations and will present results obtained
by implementing the biologically based dose response (BBDR) model for
formaldehyde. The EPA will compare these estimates with those currently
presented in the External Review draft of the assessment and will
discuss their strengths and weaknesses. As recommended by the NAS
committee, appropriate sensitivity and uncertainty analyses will be an
integral component of implementing the BBDR model. In the interim, we
will present findings using the 1991 IRIS value as a primary estimate,
and may also consider other information as the science

evolves. The EPA notes that risk estimates based on both the IRIS and
the CIIT unit risk estimates for formaldehyde were presented in the
proposal for this final rule and that the risks were acceptable in both
cases.
    Comment: A commenter stated that the best available science
indicates that formaldehyde in outdoor air does not present a risk to
human health.
    In support of their assertion, the commenter quoted WHO which
stated that ``[i]n ambient air, formaldehyde is quickly photo-oxidized
in carbon dioxide. It also reacts very quickly with the hydroxyl
radicals to give formic acid. The half-life estimated for these
reactions is about one hour depending on the environmental
conditions.'' (WHO, 2010, at 103). Further, WHO concluded that because
levels in ambient air are low, outdoor air does not contribute
significantly to indoor pollution. Id. at 108. Therefore, the EPA's
proposed cap on formaldehyde use is an unnecessary restriction that
will not reduce residual risk, if any, to public health.
    Response: Everyone is exposed to small amounts of formaldehyde in
air and some foods and products. Nasal and eye irritation, neurological
effects, and increased risk of asthma and/or allergy have been observed
in humans breathing 0.1 to 0.5 ppm. Eczema and changes in lung function
have been observed at 0.6 to 1.9 ppm. The Department of Health and
Human Services (DHHS) has determined that formaldehyde is a known human
carcinogen based on human and animal inhalation studies.\22\ The EPA
considers formaldehyde as a ``Probable Human Carcinogen'' in IRIS;
http://www.epa.gov/iris/subst/0419.htm. The International Agency for
Research on Cancer (IARC) classifies formaldehyde as a human
carcinogen; http://monographs.iarc.fr/ENG/Monographs/vol88/index.
---------------------------------------------------------------------------

    \22\ This is according to the Agency for Toxic Substances and
Disease Registry. http://www.atsdr.cdc.gov/toxfaqs/tf.asp?id=219&tid=39.
---------------------------------------------------------------------------

    Ambient modeling of formaldehyde in the National Scale Air Toxics
Assessment (NATA) at major urban centers indicate that formaldehyde
exposures over the long term for excess cancer risks could be up to 100
in a million with a national average of 20 in a million based upon the
current IRIS Unit Risk Estimate (URE). Monitoring at the National Air
Toxics Trends Sites for formaldehyde are in good agreement with the
NATA, refer to the following Web site; http://www.epa.gov/ttn/atw/nata2005/compare.html.
    The dispersion modeling for wood furniture manufacturing and
shipbuilding does not incorporate photochemical decay. The EPA
conducted a sensitivity analysis and determined this feature in AERMOD
\23\ does not have a significant effect on near-field exposures and is
most relevant for population exposures in the far field especially for
pollutants with half-lives less than 30 minutes. The rate of decay is
also very dependent temporally with less reactivity occurring during
evening hours as well as during colder seasons. For more information on
the sensitivity analysis, please refer to Section 4.6: Sensitivity
Analysis--Atmospheric Chemistry in ``the EPA's Risk and Technology
Review (RTR) Risk Assessment Methodologies,'' that was reviewed by the
EPA's SAB; http://www.epa.gov/ttn/atw/rrisk/rtrpg.html. Based upon the
rate of decay for formaldehyde varying from 1 hour to 16 hours and the
fact that the MIR location for this source category is located within
300 meters of the emission source, we find that photochemical decay
will not have an effect on the MIR.
---------------------------------------------------------------------------

    \23\ AERMOD was developed by the American Meteorological Service
(AMS)/EPA Regulatory Model Improvement Committee (AERMIC). This is
the preferred model by EPA for modeling point, area and volume
sources of continuous air emissions from facilities.
---------------------------------------------------------------------------

    Comment: A commenter stated the EPA's sole justification for
setting the formaldehyde limit at 400 lbs per rolling 12-month period
appears to be the fact that this level is already contained in the
existing MACT as a work practice requirement. Specifically, the
commenter contended:

    The EPA has stated that adopting this level as an emission
standard would create ``either no or minimal additional costs.'' Id.
at 80,247. This number was chosen in 1995, however. Where this
number came from initially is unclear. While it may be convenient
for industry to use a level with which it is already familiar and
that would incur little or no extra cost, the EPA has not provided a
reasoned explanation based on the required statutory health-based
criteria for choosing this limit, rather than a more stringent
limit. The record does not show why this is the appropriate limit to
set as a residual risk standard in today's world.
    The EPA must complete this analysis and set an appropriately
protective standard to satisfy CAA section 112(f)(2). Specifically,
the EPA must consider and address how much emissions would be
reduced if the EPA set a lower standard, and what level of emission
standard is required to provide an ``ample margin of safety.'' 42
U.S.C. Sec.  7412(f)(2). The EPA must address what emission standard
would be needed to bring the MIR down to 1-in-1-million as the
statute directs. Id. The EPA must address what standard is needed
``to provide maximum feasible protection against risks to health''
by ``protecting the greatest number of persons possible'' to a
lifetime risk level no greater than 1-in-1 million. 75 Fed. Reg. at
80,223 (quoting Benzene NESHAP). The need for this analysis is
amplified by the fact that the EPA has recognized numerous
``uncertainties related to the risk assessments, particularly for
formaldehyde and glycol ether emissions.'' Id. at 80,242-43. For
example, the EPA has stated that it is concerned that its risk
analysis has failed to account for additional formaldehyde emissions
that likely occur during curing and gluing. Id. at 80,243. The
uncertain amount of additional risk unaccounted for provides another
reason for the EPA to set a more protective formaldehyde emission
standard than the level chosen as a work practice standard in 1995.

    Response: The EPA is not finalizing the 400 pounds per rolling 12-
month period formaldehyde use limit as proposed under 112(f) of the
CAA. See section III of the preamble for a discussion of our final
action.
    The EPA is promulgating a formaldehyde standard under section
112(d)(6). Please refer to earlier descriptions in the preamble for
further justification of section 112(d)(6) of the CAA. All wood
furniture coatings and contact adhesives must be low- or no-
formaldehyde (concentration not to exceed 1 percent by weight
formaldehyde) or, as a compliance alternative, formaldehyde emissions
from wood furniture facilities must not exceed 400 pounds per rolling
12-month period. The compliance options are designed to promote
continuing reductions in formaldehyde emissions from wood furniture
without requiring equipment changes that are not cost effective or
limiting in production. The formaldehyde limits will avoid constraining
the production of wood furniture products facilities while encouraging
facilities to maintain or decrease levels of formaldehyde within
coatings and contact adhesives.
    The 400 pounds per 12 month period formaldehyde limit is based on
the threshold level in Table 5 of the 1995 NESHAP, which itself was a
result of negotiations with industry. In this RTR, we took the familiar
numerical threshold for formaldehyde emissions and made it a level not
to exceed as a compliance alternative. This was done, in the proposal,
to reduce the HQ of formaldehyde from 7 to 3 in a cost effective
manner. Between proposal and promulgation, it became clear through
public comments that this limit was not cost effective for the source
category. As discussed in greater detail of section IV of this
preamble, this limit is now a compliance alternative under section
112(d)(6).

    The science is unclear as to the degree of formaldehyde curing
under different environmental conditions. We did not receive any public
comments containing substantive or relevant emissions information on
formaldehyde emissions from curing at wood furniture facilities. Until
there is more data relevant to how cure formaldehyde is formed and/or
in what quantities, we are unable to set limits for such emissions.
    Comment: Five commenters disagreed with the 400 pound per 12 month
period formaldehyde limit. Two of the commenters noted that limiting
formaldehyde emissions from the wood furniture manufacturing operations
source category is not supported by the EPA's risk analysis and is
therefore arbitrary. One commenter noted that the total estimated
cancer incidence due to actual emissions is 0.005 excess cancer cases
per year or one case in every 200 years.
    Another commenter further stated that the limit is not necessary
because formaldehyde emissions are likely to decrease further during
the 2-year compliance period, without any further regulations.
    A commenter stated that the EPA is not justified in adopting this
standard under CAA section 112(f)(2)(A) or CAA section 112(d)(6). On a
related note, a different commenter questioned the authority of the EPA
to establish a 400 pounds per year limit on formaldehyde emissions. The
basis for the commenter's assertion is that a 400 pound limit will
limit production at facilities and will inhibit companies from meeting
industry performance standards. A commenter noted that the EPA chose
the 400 pound per year formaldehyde limit based on Table 5 of the MACT
standard (List of VHAP of Potential Concern Identified by Industry).
Currently, facilities that exceed their baseline level would need no
further explanation to permitting authorities if the exceedance is no
more than 15 percent above the baseline, or if the use is below the
level in Table 5. According to the commenter, the EPA did not note the
number of facilities that use the formaldehyde limit versus the
baseline exceedance option. Without more data, it is not known if
facilities use the 400 pound per year limit. The commenter assumed that
most facilities comply via the exceedance of baseline option and not
the 400 pound per year limit.
    A commenter also stated that the EPA improperly presumed a ``one-
size fits all'' approach to coatings and adhesives is feasible in the
manufacture of wood furniture/cabinet products. The EPA failed to take
into account the performance, quality and customer requirements of
these manufactured goods. The coatings and adhesives used for cabinet
manufacture are specialized and may contain higher amounts of
formaldehyde due to unique customer requirements.
    A commenter noted that based on the data in an EPA memorandum,\24\
the difference in price between coatings with formaldehyde and those
that are formaldehyde-free is $3.02 per gallon. The commenter assumed a
1 percent formaldehyde content in the lower priced coating and a
coating density of 8 pounds per gallon. The $3.02 per gallon additional
cost for a formaldehyde-free coating would reduce formaldehyde
emissions by 0.08 pounds for a cost of $37.75 per pound of formaldehyde
eliminated or $75,500 per ton.
---------------------------------------------------------------------------

    \24\ See: Impacts of Implementing a Limit on Formaldehyde Usage
in the Wood Furniture Manufacturing Operations Source Category,
October 19, 2010. This document is available in the docket for this
rulemaking.
---------------------------------------------------------------------------

    The commenter also evaluated the replacement cost for a topcoat
containing 0.25-percent formaldehyde with a material containing only
0.005 percent formaldehyde. The price differential of $3.58 per gallon
resulting in a cost of over $365,000 per ton of formaldehyde
eliminated.
    The commenter noted the high cost of replacement of contact
adhesives. Based on the relatively low formaldehyde content in the
current materials used, an incremental cost of only $1 to $2 per gallon
could result in a cost exceeding $20,000 per ton.
    Response: Based on information received in the comments and further
inquiry of the effects of the proposed limit of 400 pounds formaldehyde
per rolling 12-month period, the EPA has revised the standard to
require the formaldehyde content of coatings and contact adhesives to
be less than or equal to 1 percent by weight with an alternate
compliance option of the 400 pounds per rolling 12-month period
formaldehyde use limit, as explained elsewhere in the preamble.
    This approach is promulgated under the technology review
requirements under the CAA section 112(d)(6). Risk was determined to be
acceptable under section 112(f)(2) of the CAA (residual risk). This
technology rule will not limit production or result in significant
costs for high production facilities and will encourage further
reductions in the future without compromising the integrity of product.
    The EPA has information that indicates that most facilities will be
able to cost-effectively comply with the 1 percent by weight
formaldehyde limit.\25\ A commenter asserts that coatings and contact
adhesives that are 1 percent formaldehyde are cost effective. This
level of formaldehyde will be sufficient to create the cross-linking
nucleation that provides durability to wood furniture products in many
cases. By also having a formulation restriction as an alternative to
the 400 pound per year limit, there will not be a restriction of
production.
---------------------------------------------------------------------------

    \25\ One of the major manufacturers of wood furniture coatings,
Valspar, does not carry any products that have greater than 1
percent formaldehyde leading to the conclusion that coatings greater
than 1 percent formaldehyde are mostly unnecessary in the industry.
http://www.valsparwood.com/valsparwood/msds/msds.jsp
---------------------------------------------------------------------------

    Comment: Multiple commenters offered comments related to the EPA's
estimate of the cost for meeting the proposed formaldehyde standard.
    One of the commenters noted that the EPA does not adequately
support its cost estimate. The commenter stated that the EPA provided
no data or analysis to support its assumption that all facilities
operate in the same way or that the use of no- or low- formaldehyde
coatings and contact adhesives would be suitable for use by all
facilities.
    The commenter further noted that the EPA's ``cost analysis''
consists of price information, from one supplier, of 13 no- or low-
formaldehyde coatings that the agency considers to be suitable for use
in wood furniture manufacturing operations.\26\ The commenter noted
that the EPA does not analyze whether the available coatings can be
used in all applications or would meet industry performance standards.
---------------------------------------------------------------------------

    \26\ See U.S. the EPA, Memorandum, Impacts of Implementing a
Limit on Formaldehyde Use in the Wood Furniture Manufacturing
Operations Source Category dated October 19, 2010 in the docket for
this action.
---------------------------------------------------------------------------

    A different commenter stated that the technical and cost analyses
the EPA puts forth in support of the 400 pound per year limit are not
backed up by any critical analysis or actual data. According to the
commenter, this analysis amounts to the assertion that, ``because some
facilities are doing it, all facilities should be able to do it. This
is an empty `analysis' that provides no support for the proposed 400 lb
per year limit. On top of that, the EPA also asserts that the new
standard can be met `at little or no extra cost.' '' The commenter
stated that a much more robust cost analysis would be needed to justify
imposing an additional emissions limitation.
    Moreover, two commenters noted that the EPA does not address the
additional costs incurred due to the potential need

for new equipment, the significant expenses to adapt to a new finish
material.
    Response: Based on information received in comments, we have
adopted a 1 percent by weight formaldehyde limit with a 400 pounds
formaldehyde per rolling 12-month period alternative compliance limit
that allows wood furniture manufacturers to use their discretion to
reformulate to lower formaldehyde coatings and contact adhesives while
not necessitating the expense of production line reconfiguration. As
discussed above, we have updated the cost-effectiveness analysis for
the proposed formaldehyde limit and concluded that the 400 pound per 12
month limit as proposed would not be cost effective.\27\
---------------------------------------------------------------------------

    \27\ For further detail, see memo to the docket, Estimated Cost
Impact for Wood Furniture Manufacturing Industry to Comply with
Proposed Formaldehyde Limit on Coating Operations Wood Furniture
Manufacturing RTR, dated July 15, 2011.
---------------------------------------------------------------------------

    Using low-formaldehyde coatings and contact adhesives reflects
developments in technology and was described in the proposal as the
method to achieve compliance with the proposed 400 pounds formaldehyde
per rolling 12-month period. A limit of 1 percent formaldehyde in
coatings and adhesives allows facilities the flexibility to use
coatings and adhesives that are suitable for a range of different
products, from cabinets to home furnishings, without compromising their
quality, cost or production.\28\ Also, in many cases, the 1 percent
formaldehyde limit will allow flexibility in different types of line
configurations.\29\
---------------------------------------------------------------------------

    \28\ It is necessary for some facilities to minimize levels of
formaldehyde in the coating formulation to promote cross-linking
nucleation. This process directly affects the quality and durability
of the wood furniture. See notes from the Marsh Furniture Site Visit
in the docket for this action for reference.
    \29\ For additional information, please see memo to the docket,
EPA Meeting with Kitchen Cabinet Manufacturers Association (KCMA)
and Select Representatives, dated August 17, 2011.
---------------------------------------------------------------------------

    Comment: Multiple commenters noted that the EPA overestimated the
health risk from glycol ethers by using ethylene glycol methyl ether as
the representative glycol ether.\30\ Given that the use of glycol
ethers other than ethylene glycol methyl ether is the norm for the
industry, the risk associated with this class of compounds is
overstated in the EPA's analysis and no additional regulation of glycol
ethers is warranted. The table contains a summary of speciated glycol
ethers that are less toxic than ethylene glycol methyl ether. This
shows, in the commenter's opinion, the EPA's overestimation of the
health risk from these compounds.
---------------------------------------------------------------------------

    \30\ The commenters referred to Table 4 in the EPA's October 22,
2010, memorandum, Review of Glycol Ether Emissions Associated with
Wood Furniture Manufacturing Source Category.
---------------------------------------------------------------------------

    One commenter offered another assessment approach for glycol
ethers:

    A more reasonable assessment of glycol ethers would be the
example based on data from all facilities of a large wood furniture
manufacturing company. Glycol ether emissions in 2010 totaled 3.76
tons, of which over 95 percent of the emissions were ethylene glycol
monobutyl ether, with the remainder comprising diethylene glycol
phenyl ether, diethylene glycol butyl ether and phenoxyethanol.
Based on the preponderance of ethylene glycol monobutyl ether in
these emissions, a risk assessment using the significantly higher
REL for ethylene glycol monobutyl ether (REL = 14 vs. REL for
ethylene glycol methyl ether of 0.093 ref: http://www.oehha.ca.gov/air/pdf/acuterel.pdf) would conclude that the risk from glycol
ethers is approximately 150 times lower than the EPA's analysis
shows. Even if the REL for another glycol ether--Ethylene Glycol
Monoethyl Ether, REL 0.37--were used, the risk associated with
glycol ethers would be reduced by a factor of 4.

    A second commenter offered a different option. The commenter
recommended that the HQ derived by the EPA for Propyl
Cellosolve[supreg] (ethylene glycol mono-n-propyl ether (EGME)) be
recalculated using an REL they propose for ethylene glycol phenyl ether
(EGPE). The commenter contends that information provided in their
comments demonstrates that sufficient information exists to derive an
REL for EGPE, which would be more appropriate for risk management than
the REL for EGME.
    Response: As we acknowledged in the proposal, the use of the EGME
REL in our acute risk screening assessments provided us with a
conservative (i.e., health-protective) estimate of potential acute
health risks from glycol ethers when the exact speciation profile of
emitted glycol ethers was uncertain. For this source category,
approximately 70 percent of facilities reporting glycol ether emissions
reported them without any speciation information. Since there are no
AEGL or ERPG values available for any glycol ethers, this further
limits our ability to interpret the potential acute impacts of glycol
ethers. Since this uncertainty remains, the EPA is not convinced that
the use of less health-protective assumptions (such as those
recommended by the commenters) represents any improvement in the
assessment of potential acute impacts. Even so, because of the health-
protective nature of our assessment, we do not believe that these
estimated worst-case acute glycol ether impacts warrant the adoption of
additional control measures.
    Comment: A commenter suggested that the EPA either define the term
``conventional'' or mention the types of spray guns that are to be used
to assist the regulated community in complying with this rule. The
commenter suggested specific items, mentioned in the Paint Stripping
and Miscellaneous Surface Coating Operations rule (Subpart HHHHHH):
High-volume low-pressure (HVLP) spray guns, electrostatic applications,
airless or air-assisted airless spray guns, or air-assisted airless
equivalent technologies.
    Another commenter suggested that the EPA exclude the following
components from the definition: Handheld non-refillable aerosol
containers, touch-up markers, marking pens, and the application of
paper film or plastic film which may be pre-coated with an adhesive by
the manufacturer. These items are allowed by the miscellaneous metal
parts and products NESHAP (subpart MMMM).
    Response: The existing Wood Furniture Manufacturing Operations MACT
standards define ``conventional air spray'' as:

a spray coating method in which the coating is atomized by mixing it
with compressed air and applied at an air pressure greater than 10
pounds per square inch (gauge) at the point of atomization. Airless
and air assisted airless spray technologies are not conventional air
spray because the coating is not atomized by mixing it with
compressed air. Electrostatic spray technology is also not
considered conventional air spray because an electrostatic charge is
employed to attract the coating to the workpiece. 40 CFR 63.801(a).

Many of the above suggestions for specific coating applications are
clearly included or excluded by the definition of conventional spray
provided in the 1995 NESHAP. The technologies listed above such as
touch-up markers, marking pens and manufacturer pre-coated adhesive
film are not affected by the ban on use of conventional spray guns
because they do not have a spray, i.e., they are not ``a spray coating
method.'' Despite certain technologies being incorporated to other rule
makings such as subpart HHHHHH, the commenter did not explain why these
applications are necessary for this rule making. Examples of compliant
spray technology include, but are not limited to HVLP spray guns, low-
volume low-pressure guns (LVLP), electrostatic applications, airless
and air-assisted airless spray guns. Low-capacity HVLP cup guns may be
used for small batch operations.
    Comment: A commenter suggested that the EPA clarify in the rule
that facilities with controls can continue to use conventional spray
guns. Any

emissions would be controlled via the control device.
    Another commenter noted that several RTOs, which rely on rich VOC
waste streams, are being operated in the industry. To impose air-
assisted-airless guns reduces RTO efficiency and requires more fossil
fuel to be consumed. Regenerative thermal oxidizers are fueled by
overspray and fossil fuels; when the quantity of overspray is
decreased, the more fossil fuel that is needed to keep the RTO
functioning.
    Response: The proposed rule has been revised to allow use of
conventional spray guns when the overspray is routed to a functioning
control device. The efficiency of the control device sufficiently
reduces excess emissions associated with the decreased spray efficiency
of conventional spray guns.\31\
---------------------------------------------------------------------------

    \31\ A typical transfer efficiency of an HVLP gun is 65-85
percent compared to 25-45 percent for conventional guns under
similar conditions. This is a difference of 40 percent spray
efficiency. When compared to an estimate of 90 percent efficiency of
an add-on control device, the control device more than compensates
for the 40 percent reduction in efficiency of guns. For more
information on transfer efficiencies of spray technologies see the
memo to the docket, Impacts of Prohibiting the Use of Conventional
Spray Guns in the Wood Furniture Manufacturing Operations Source
Category, dated October 29, 2010.
---------------------------------------------------------------------------

    Comment: Two commenters noted that the EPA offered an incorrect
premise that all applicator improvements to increase transfer
efficiency of the sprayed material will result in reduced emissions
simply due to higher transfer efficiencies. The premise does not
consider the low-use application considerations required for trials,
touchups and product repairs.
    One of the commenters noted:

    HVLP and equivalent high efficiency applicators require larger
volumes of premixed materials for application and are best used
where large quantities of materials are intended (usually volumes
larger than one gallon to as much as 30 gallons) and in production
quantity applications where large surface areas are coated. Under
large volume spray applications, the high transfer efficiency
equipment results in reduced material consumptions resulting in
lower operating costs and lower emissions. Under high volume
application conditions, there are both economic and environmental
advantages for operations to use high transfer efficiency equipment.
    However, for low use applications such as low volume color
stains, trial materials, small touchups and repairs, mixing large
batches for use in high transfer efficiency equipment will result in
increased material consumption and waste, increased cleanup solvent
consumption and waste, and, for catalyzed top coat materials,
material loss through restricted pot life. The proposed applicator
changes would result in an inability to properly mix small batch
work coatings (stains, sealers, topcoats, etc.), resulting in more
wasted raw material, increased cleanup material use, waste and
emissions and an unnecessary increase in generated waste volume.
    Arguably, the use of low volume conventional spray equipment
such as cup guns, etc., affords the industry a small volume spray
alternative that would otherwise require a part to be re-finished or
scrapped entirely. Failed finish repairs with minimal rework and
reapplication to the part and in some instances salvage of an
otherwise scrapped production part makes production and
environmental sense. Indeed small quantity applicators (generally
those with a restricted volume of 1.0 U.S. quart or less) may
actually result in lower VOC and VHAP emissions due to the
restricted use and inherent limited production capability of the
application equipment itself.
    Such an overreaching requirement for all spray equipment to be
of the HVLP spray type or equivalent is not reasonable and does not
consider the other adverse environmental impacts discussed above.

    Response: First, we note the commenter agrees with the EPA that
with large volume spray applications, which the commenter defines as
larger than one gallon and in production quantities, high transfer
efficiency equipment results in reduced material consumption, lower
operating costs and lower emissions.\32\ In addition, we find that the
application technology is available for small batches of coating to be
applied with non-conventional spray guns such as HVLP cup guns. The use
of HVLP cup guns will allow for smaller batch mixes. This prevents
unneeded coating material going to waste. With the higher spray
efficiency associated with non-conventional spray guns, a greater
portion of the spray is coating the piece of wood. This means that
there is less overspray leading to fewer emissions. Other touch-up
applications such as touch-up markers and handheld non-refillable
aerosol containers may still be used under the standard. For more
information see Use of Non-Conventional Spray Technology in the Wood
Furniture Manufacturing Industry, dated August 3, 2011 and Impacts of
Prohibiting the Use of Conventional Spray Guns in the Wood Furniture
Manufacturing Operations Source Category, dated October 19, 2010, in
the docket for this action.
---------------------------------------------------------------------------

    \32\ For more information please see Impacts of Prohibiting the
Use of Conventional Spray Guns in the Wood Furniture Manufacturing
Operations Source Category, dated October 19, 2010, in the docket
for this action.
---------------------------------------------------------------------------

C. Shipbuilding and Ship Repair (Surface Coating)

    Comment: A commenter stated the EPA has provided no rational
explanation for refusing to update the technology standards for both
categories to meet the CAA section 112(d)(6) requirement, at minimum,
by matching the limits of what sources have achieved and what other
jurisdictions have required. The commenter stated:

    We urge the EPA to do so in the final rule. Where, as here,
there are ``significant developments'' in technology, and where, as
here, sources have achieved lower levels of emissions ``in
practice'' than are ``MACT-allowable,'' it is abundantly clear that
Sec.  112(d)(6) requires the EPA to revise its standards in
accordance with CAA Sec.  112(d)(2)-(3), (6), 42 U.S.C. Sec.
7412(d)(2)-(3), (6).

The commenter also inquires why the EPA did not adopt more stringent
standards based on other regulating bodies within the country.
    Response: As explained in the proposal, in accordance with the
approach established in the Benzene NESHAP, our analysis of risks for
this source category showed that the maximum source-category cancer
risks for all facilities are within the range of acceptable risks and
that the maximum chronic noncancer risks are unlikely to cause health
impacts. The EPA has weighed all health risk measures and information
considered in the risk acceptability determination, along with the
costs and economic impacts of emissions controls, technological
feasibility, uncertainties, and other relevant factors, in making our
ample margin of safety determination. The EPA has found the overall
level of risk to be acceptable for the source category and the ample
margin of safety determination for this source category indicates that
potential controls are not cost effective and technically feasible.
    Comment: A commenter stated that the EPA has failed to fulfill its
CAA section 112(f)(2) duty to fully assess and determine whether the
risk from this source category is ``acceptable.'' The EPA concludes
that this category creates an MIR of 20-in-1 million based on allowable
emissions, and 10-in-1 million based on estimated ``actual'' emissions.
The EPA does not justify its conclusion on the record that this level
of risk is acceptable. It simply lists the numbers and different
factors, without explaining how it is analyzing these factors or why
they have led the EPA to reach its conclusion. The EPA recognizes that
disparities in risk exist, with individuals in certain demographic
groups, including African Americans and people with income below the
poverty level, more likely to experience a higher level of risk. As
discussed above, the EPA cannot simply rely on the old Benzene
presumption that any

level of risk under 100-in-1 million is acceptable. And, the fact that
4,000 people is a ``relatively low'' number (i.e., the number estimated
to be exposed to cancer risks of 1-in-1 million or greater) does not
justify the EPA's proposal of inaction to protect these people. CAA
section 112(f)(2) requires the EPA to set standards for the maximum
exposed individual. The individuals in this group of 4,000 are the very
people whom the law requires the EPA to be concerned about.
    Response: We do not consider the 1-in-1 million MIR level as a
`bright line' mandated level of protection for establishing residual
risk standards. In determining the ample margin of safety (i.e., the
level of the standard), health risk is one factor that we must
consider, along with other factors such as cost and technological
feasibility. Balancing these and other factors with the ability to
achieve meaningful risk reduction is a critical component of the
residual risk rulemaking process. We considered reducing risks further
but concluded that the technology required, such as a portable or
permanent enclosure big enough to accommodate an entire ship or even a
section of a ship to capture and control air emissions, would be cost
prohibitive for this industry. Although our additional analysis of the
demographics of the exposed population shows some disparities in risks
between demographic groups for both categories, the EPA has determined
that no group is exposed to an unacceptable level of risk. In general,
the contribution of the source category to elevated facilitywide cancer
or noncancer risks is low throughout the facilities in this source
category. The primary processes driving the facilitywide cancer and
noncancer risks are welding and blasting which are not regulated under
this source activity.
    Comment: A commenter stated that the EPA has determined that
maximum individual cancer risk at the facilitywide level is 200-in-1
million based on estimated ``actual'' emissions. This means that the
risk is likely to be higher based on allowable emissions. Further, of
the 41 facilities with facilitywide MIR of 1-in-1 million or more, 15
have shipbuilding and ship repair operations that contribute over 50
percent to the facilitywide risks. Yet, the EPA does not propose to
take any action to address that risk. The EPA should investigate ways
to reduce this residual risk. It does not consider or address whether
this level of facilitywide risk is acceptable at facilities where this
source category is contributing so significantly. The EPA must do so to
complete its CAA section 112(f)(2) duty. Its failure to consider
regulatory options to address this residual risk is also arbitrary and
capricious. At minimum, the EPA should consider whether to set a
residual risk standard in order to reduce this high level of
facilitywide risk. It should consider requiring extra work practice,
reporting, monitoring and other measures for facilities that have the
level of emissions putting them into this highest risk category. In
sum, the EPA must address what standard is needed ``to provide maximum
feasible protection against risks to health'' by ``protecting the
greatest number of persons possible'' to a lifetime risk level no
greater than 1-in-1 million. (quoting Benzene NESHAP), and its
facilitywide risk analysis has failed to complete this essential step.
    Response: We examined facilitywide risk to provide additional
context to the source category risks. Facilitywide risks are driven by
estimated emissions from blasting and welding sources at shipbuilding
and ship repair facilities. These sources are not part of the
Shipbuilding and Ship Repair (surface coating) source category. As
discussed in the preamble to the proposed actions for this source
category [75 FR 80237], we intend to list welding and blasting
operations as a major source category under section 112(c)(5) of the
CAA.
    Comment: A commenter stated that with respect to the Shipbuilding
and Ship Repair standard, we are concerned that the EPA based its
decision that no additional controls are needed and that the existing
standard provides an ample margin of safety in part due to ``the
uncertainty and lack of data associated with one potential risk
reduction option identified, and the technological infeasibility of the
other option identified.'' The commenter urged the EPA to obtain the
necessary data regarding the two options to make a more informed
decision, including contacting air quality agencies that currently
regulate the source category. We compliment the EPA on its intention to
list welding and blasting operations at shipbuilding and ship repair
facilities as a major source category under section 112(c)(5), but
encourage the EPA to determine the extent to which this action will
address the risks remaining at these facilities before deciding that
relying on this strategy is sufficient.
    Another commenter stated that the EPA's proposal fails to satisfy
the ``ample margin'' requirement. The EPA bases this conclusion in part
on the fact that it has ``not identified any data regarding the
availability, use, performance and emissions associated with the use of
lower overall volatile organic hazardous air pollutants (VOHAP) content
or lower toxicity VOHAP content.'' Id. The EPA's conclusion is
incorrect based on the use of the California standards in place. It is
unclear why the EPA did not simply contact the four identified
California air quality districts that have more stringent emission
limits to attempt to gather these data. See Part IV.A.1, infra. This is
the 8-year residual risk rulemaking and now is the time to collect and
consider those data. The EPA may not defer or ignore this
responsibility, or the fact that stricter standards are in use that it
must address. The EPA also cannot justify a failure to set a residual
risk standard on a lack of data. The EPA has failed to explain how the
existing section 112(d) standard could provide the required ``ample
margin of safety.'' One commenter also stated that where other
jurisdictions have implemented stronger standards, this provides
evidence that for the purposes of CAA section 112(d)(6), that more
stringent limitations are achievable and have been achieved.
    However, the EPA states that there are differences between coating
limits in the four air districts, and that the 1995 MACT standard
includes cold weather limits which are not present in the California
standards due to its moderate climate. Neither of these points is a
valid reason for the EPA not to further analyze and adopt stronger
standards based on these California examples. While it may not be
appropriate to adopt the California standards in full on a national
basis, the EPA gives no rational justification for not analyzing how to
take these models and use them to create an appropriate national
standard under CAA section 112(d)(6). The EPA concludes that ``we do
not have data to determine whether these lower-VOC content coatings
could be applied nationwide.'' Gathering and analyzing that data,
starting with any information already compiled by the California
districts, is precisely what the section 112(d)(6) rulemaking is
designed for. A lack of data is not a lawful basis for the EPA to
decline to adopt a stronger MACT standard.
    Response: The EPA researched current technologies for the
shipbuilding and ship repair surface coating industry, and did not find
any cost effective options that would make the current standard more
stringent. Related to the marine coating limits in the MACT rule, we
reviewed the general use and 22 specialty coating VOHAP limits and the
lower limits that some states and air districts have adopted over the
past decade for some of the specialty categories. Furthermore, we
requested comment on the availability

and feasibility of using lower VOHAP coatings but did not receive any
data or information during the comment period. Following proposal, we
did contact a shipyard in Maine, and found that the use of lower VOHAP
coatings, such as those required to meet the limits set by some of the
California air quality districts, is not feasible in climates that are
not as moderate and, therefore, necessitate greater thinning of paint.
    As noted by the commenter, some jurisdictions have implemented more