National Volatile Organic Compound Emission Standards for Aerosol Coatings, 38952-38991 [E7-13108]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 72, Number 135 (Monday, July 16, 2007)]
[Proposed Rules]
[Pages 38952-38991]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-13108]



[[Page 38951]]

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Part IV





 Environmental Protection Agency





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40 CFR Parts 51 and 59



 National Volatile Organic Compound Emission Standards for Aerosol 
Coatings; Proposed Rule

Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / 
Proposed Rules

[[Page 38952]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 59

[EPA-HQ-OAR-2006-0971; FRL-8336-5]
RIN 2060-AN69


National Volatile Organic Compound Emission Standards for Aerosol 
Coatings

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This action proposes a national reactivity-based volatile 
organic compound (VOC) emissions regulation for the aerosol coatings 
(aerosol spray paints) category under section 183(e) of the Clean Air 
Act (CAA). The proposed standards implement section 183(e) of the CAA, 
as amended in 1990, which requires the Administrator to control VOC 
emissions from certain categories of consumer and commercial products 
for purposes of minimizing VOC emissions contributing to ozone 
formation and causing non-attainment. This regulation will establish a 
nationwide reactivity-based standard for aerosol coatings. States have 
promulgated rules for the aerosol coatings category based upon 
reductions of VOC by mass; however, the Agency believes that a national 
rule based upon the relative reactivity approach may achieve more 
reduction in ozone formation than can be achieved by a mass-based 
approach for this specific product category. EPA believes that this 
rule will better control a product's contribution to ozone formation by 
encouraging the use of less reactive VOC ingredients, rather than 
treating all VOC in a product alike through the traditional mass-based 
approach. We are also proposing to revise EPA's regulatory definition 
of VOC exempt compounds for purposes of this regulation in order to 
account for all the reactive compounds in aerosol coatings that 
contribute to ozone formation. Therefore, compounds that would not be 
VOC under the otherwise applicable definition will count towards a 
product's reactivity limits under this proposed regulation. The initial 
listing of product categories and schedule for regulation was published 
on March 23, 1995 (60 FR 15264). This proposed action announces EPA's 
final decision to list aerosol coatings for regulation under group III 
of the consumer and commercial product category for which regulations 
are mandated under section 183 (e) of the Act.

DATES: Comments. Written comments on the proposed regulation must be 
received by EPA by August 15, 2007, unless a public hearing is 
requested by July 26, 2007. If a hearing is requested, written comments 
must be received by August 30, 2007.
    Public Hearing. If anyone contacts EPA requesting to speak at a 
public hearing concerning the proposed regulation by July 26, 2007, we 
will hold a public hearing on July 31, 2007.

ADDRESSES: Comments. Submit your comments, identified by Docket ID No. 
EPA-HQ-OAR-2006-0971, by one of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the on-line instructions for submitting comments.
     E-mail: a-and-r-docket@epa.gov.
     Fax: (202) 566-1741.
     Mail: Air and Radiation Docket, Environmental Protection 
Agency, Mailcode 6102T, 1200 Pennsylvania Avenue, NW., Washington, DC 
20460. Please include a total of two copies. We request that a separate 
copy also be sent to the contact person identified below (see FOR 
FURTHER INFORMATION CONTACT). In addition, please mail a copy of your 
comments on the information collection provisions to the Office of 
Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 
20503.
     Hand Delivery: EPA Docket Center, Public Reading Room, EPA 
West, Room 3334, 1301 Constitution Ave., NW., Washington, DC 20460. 
Such deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to the applicable docket. EPA's 
policy is that all comments received will be included in the public 
docket without change and may be made available online at https://
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be confidential 
business information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or e-mail. 
The www.regulations.gov Web site is an ``anonymous access'' system, 
which means EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through www.regulations.gov, 
your e-mail address will be automatically captured and included as part 
of the comment that is placed in the public docket and made available 
on the Internet. If you submit an electronic comment, EPA recommends 
that you include your name and other contact information in the body of 
your comment and with any disk or CD-ROM you submit. If EPA cannot read 
your comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses.
    Public Hearing. If a public hearing is held, it will be held at 10 
a.m. on July 31, 2007 at Building C on the EPA campus in Research 
Triangle Park, NC, or at an alternate site nearby. Persons interested 
in presenting oral testimony must contact Ms. Dorothy Apple, U.S. EPA, 
Office of Air Quality Planning and Standards, Sector Policies and 
Programs Division, Natural Resources and Commerce Group (E143-03), 
Research Triangle Park, North Carolina 27711, telephone number: (919) 
541-4487, fax number (919) 541-3470, e-mail address: 
apple.dorothy@epa.gov, no later than July 26, 2007 in the Federal 
Register. Persons interested in attending the public hearing must also 
call Ms. Apple to verify the time, date, and location of the hearing. 
If no one contacts Ms. Apple by July 26, 2007 in the Federal Register 
with a request to present oral testimony at the hearing, we will cancel 
the hearing.
    Docket: All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically through 
www.regulations.gov or in hard copy at the EPA Docket Center, Public 
Reading Room, EPA West, Room 3334, 1301 Constitution Ave., NW., 
Washington, DC 20460. The Public Reading Room is open from 8:30 a.m. to 
4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1742, and the 
telephone number for the Air Docket is (202) 566-1744.

FOR FURTHER INFORMATION CONTACT: For information concerning the aerosol 
coatings rule, contact Ms. J. Kaye Whitfield, U.S. EPA, Office of Air 
Quality Planning and Standards, Sector

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Policies and Programs Division, Natural Resources and Commerce Group 
(E143-03), Research Triangle Park, North Carolina 27711, telephone 
number: (919) 541-2509, fax number (919) 541-3470, e-mail address: 
whitfield.kaye@epa.gov. For information concerning the CAA section 
183(e) consumer and commercial products program, contact Mr. Bruce 
Moore, U.S. EPA, Office of Air Quality Planning and Standards, Sector 
Policies and Programs Division, Natural Resources and Commerce Group 
(E143-03), Research Triangle Park, North Carolina 27711, telephone 
number: (919) 541-5460, fax number (919) 541-3470, e-mail address: 
moore.bruce@epa.gov.

SUPPLEMENTARY INFORMATION: Entities Potentially Affected by this 
Action. The entities potentially regulated by the proposed regulation 
encompass aerosol coatings operations. This includes manufacturers, 
processors, wholesale distributors, or importers of aerosol coatings 
for sale or distribution in the United States, or manufacturers, 
processors, wholesale distributors, or importers that supply the 
entities listed with aerosol coatings for sale or distribution in 
interstate commerce in the United States. The entities potentially 
affected by this action include:

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                                                         Examples of
             Category               NAICS code \a\   regulated entities
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Paint and coating manufacturing...           32551  Manufacturing of
                                                     lacquers,
                                                     varnishes, enamels,
                                                     epoxy coatings, oil
                                                     and alkyd vehicle,
                                                     plastisols,
                                                     polyurethane,
                                                     primers, shellacs,
                                                     stains, water
                                                     repellant coatings.
All other miscellaneous chemical            325998  Aerosol can filling,
 production and preparation                          aerosol packaging
 manufacturing.                                      services.
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\a\ https://www.census.gov/epcd/www/naics.html.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be affected by this 
action. To determine whether you would be affected by this action, you 
should examine the applicable industry description in section I.E of 
this notice. If you have any questions regarding the applicability of 
this action to a particular entity, consult the appropriate EPA contact 
listed in the FOR FURTHER INFORMATION CONTACT section of this notice.
    Preparation of Comments. Do not submit information containing CBI 
to EPA through www.regulations.gov or e-mail. Send or deliver 
information identified as CBI only to the following address: Mr. 
Roberto Morales, OAQPS Document Control Officer (C404-02), U.S. EPA, 
Office of Air Quality Planning and Standards, Research Triangle Park, 
North Carolina 27711, Attention: Docket ID EPA-HQ-OAR-2006-0971. 
Clearly mark the part or all of the information that you claim to be 
CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark 
the outside of the disk or CD ROM as CBI and then identify 
electronically within the disk or CD ROM the specific information that 
is claimed as CBI. In addition to one complete version of the comment 
that includes information claimed as CBI, a copy of the comment that 
does not contain the information claimed as CBI must be submitted for 
inclusion in the public docket. Information so marked will not be 
disclosed except in accordance with procedures set forth in 40 CFR part 
2.
    World Wide Web (WWW). In addition to being available in the docket, 
an electronic copy of this proposed action will also be available on 
the Worldwide Web (WWW) through the Technology Transfer Network (TTN). 
Following signature, a copy of the proposed action will be posted on 
the TTN's policy and guidance page for newly proposed or promulgated 
rules at the following address: https://www.epa.gov/ttn/oarpg/. The TTN 
provides information and technology exchange in various areas of air 
pollution control.
    Organization of This Document. The information presented in this 
notice is organized as follows:

I. Background
    A. The Ozone Problem
    B. Statutory and Regulatory Background
    C. What is Photochemical Reactivity?
    D. Role of Reactivity in VOC/Ozone Regulations
    E. The Aerosol Coating Industry
II. Summary of Proposed Standards
    A. Applicability of the Standards and Regulated Entities
    B. Regulated Pollutant
    C. Regulatory Limits
    D. Compliance Requirements
    E. Labeling Requirements
    F. Recordkeeping and Reporting
    G. Variance
    H. Test Methods
III. Summary of Impacts
    A. Environmental Impacts
    B. Energy Impacts
    C. Cost and Economic Impacts
IV. Rationale
    A. Applicability
    B. Regulated Pollutant
    C. Regulatory Approach
    D. VOC Regulatory Limits
    E. Compliance Demonstration Requirements
    F. Labeling Requirements
    G. Recordkeeping and Reporting Requirements
    H. Variance Criteria
    I. Test Methods
V. Statutory and Executive Order (EO) Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    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 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
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. Background

A. The Ozone Problem

    Ground-level ozone, a major component of smog, is formed in the 
atmosphere by reactions of VOC and oxides of nitrogen in the presence 
of sunlight. The formation of ground-level ozone is a complex process 
that is affected by many variables.
    Exposure to ground-level ozone is associated with a wide variety of 
human health effects, as well as agricultural crop loss, and damage to 
forests and ecosystems. Controlled human exposure studies show that 
acute health effects are induced by short-term (1 to 2 hour) exposures 
(observed at concentrations as low as 0.12 parts per million (ppm)), 
generally while individuals are engaged in moderate or heavy exertion, 
and by prolonged (6 to 8 hour) exposures to ozone (observed at 
concentrations as low as 0.08 ppm and possibly lower), typically while 
individuals are engaged

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in moderate exertion. Transient effects from acute exposures include 
pulmonary inflammation, respiratory symptoms, effects on exercise 
performance, and increased airway responsiveness. Epidemiological 
studies have shown associations between ambient ozone levels and 
increased susceptibility to respiratory infection, increased hospital 
admissions and emergency room visits. Groups at increased risk of 
experiencing elevated exposures include active children, outdoor 
workers, and others who regularly engage in outdoor activities. Those 
most susceptible to the effects of ozone include those with preexisting 
respiratory disease, children, and older adults. The literature 
suggests the possibility that long-term exposures to ozone may cause 
chronic health effects (e.g., structural damage to lung tissue and 
accelerated decline in baseline lung function).

B. Statutory and Regulatory Background

    Under section 183(e) of the CAA, EPA conducted a study of VOC 
emissions from the use of consumer and commercial products to assess 
their potential to contribute to levels of ozone that violate the 
National Ambient Air Quality Standards (NAAQS) for ozone, and to 
establish criteria for regulating VOC emissions from these products. 
Section 183(e) of the CAA directs EPA to list for regulation those 
categories of products that account for at least 80 percent of the VOC 
emissions, on a reactivity-adjusted basis, from consumer and commercial 
products in areas that violate the NAAQS for ozone (i.e., ozone 
nonattainment areas), and to divide the list of categories to be 
regulated into four groups.
    EPA published the initial list in the Federal Register on March 23, 
1995 (60 FR 15264). In that notice, EPA stated that it may amend the 
list of products for regulation, and the groups of product categories, 
in order to achieve an effective regulatory program in accordance with 
the Agency's discretion under CAA section 183(e). EPA has revised the 
list several times. Most recently, in May 2006, EPA revised the list to 
add one product category, portable fuel containers, and to remove one 
product category, petroleum dry cleaning solvents. See 71 FR 28320 (May 
16, 2006). The aerosol spray paints (aerosol coatings) category 
currently is listed for regulation as part of Group III of the CAA 
section 183(e) list.
    CAA section 183(e) directs EPA to regulate Consumer and Commercial 
Products using ``best available controls'' (BAC). CAA section 
183(e)(1)(A) defines BAC as ``the degree of emissions reduction that 
the Administrator determines, on the basis of technological and 
economic feasibility, health, environmental, and energy impacts, is 
achievable through the application of the most effective equipment, 
measures, processes, methods, systems or techniques, including chemical 
reformulation, product or feedstock substitution, repackaging, and 
directions for use, consumption, storage, or disposal.'' CAA section 
183(e) also provides EPA with authority to use any system or systems of 
regulation that EPA determines is the most appropriate for the product 
category. Under CAA section 183(e)(4), EPA can impose ``any system or 
systems of regulation as the Administrator deems appropriate, including 
requirements for registration and labeling, self-monitoring and 
reporting, prohibitions, limitations, or economic incentives (including 
marketable permits and auctions of emissions rights) concerning the 
manufacture, processing, distribution, use, consumption or disposal of 
the product.'' Under these provisions, EPA has previously issued 
national regulations for architectural coatings, autobody refinishing 
coatings, consumer products, and portable fuel 
containers.1, 2, 3, 4, 5
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    \1\ National Volatile Organic Compound Emission Standards for 
Architectural Coatings'' 63 FR 48848, (September 11, 1998).
    \2\ ``National Volatile Organic Compound Emission Standards for 
Automobile Refinish Coatings'' 63 FR 48806, (September 11, 1998).
    \3\ ``Consumer and Commercial Products: Schedule for 
Regulation'' 63 FR 48792, (September 11, 1998).
    \4\ ``National Volatile Organic Compound Emission Standards for 
Consumer Products'' 63 FR 48819, (September 11, 1998).
    \5\ ``National Volatile Organic Compound Emission Standards for 
Portable Fuel Containers'' 72 FR 8428, (February 26, 2007).
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    For any category of consumer or commercial products, the 
Administrator may issue control techniques guidelines (CTGs) in lieu of 
national regulations if the Administrator determines that such guidance 
will be substantially as effective as regulations in reducing emissions 
of volatile organic compounds which contribute to ozone levels in areas 
which violate the national ambient air quality standard for ozone. In 
many cases, CTGs can be effective regulatory approaches to reduce 
emissions of VOC in nonattainment areas because of the nature of the 
specific product and the uses of such product. A critical distinction 
between a national rule and a CTG is that a CTG may include provisions 
that affect the users of the products. For other product categories, 
such as wood furniture coatings and shipbuilding coatings, EPA has 
previously determined that, under CAA section 183(e)(3)(C), a CTG would 
be substantially as effective as a national rule and, therefore, issued 
CTGs to provide guidance to States for development of appropriate State 
regulations.
    For the category of aerosol coatings, EPA has determined that a 
national rule applicable nationwide is the best system of regulation to 
achieve necessary VOC emission reductions from this type of product. 
Aerosol coatings are typically used in relatively small amounts by 
consumers and others on an occasional basis and at varying times and 
locations. Under such circumstances, reformulation of the VOC content 
of the products is a more feasible way to achieve VOC emission 
reductions, rather than through a CTG approach that would only affect a 
smaller number of relatively large users. Aerosol coatings regulations 
are already in place in three States (California, Oregon, and 
Washington), and other States are considering developing regulations 
for these products. For the companies that market aerosol coatings in 
different States, trying to fulfill the differing requirements of State 
rules may create administrative, technical, and marketing problems. A 
Federal rule is expected to provide some degree of consistency, 
predictability, and administrative ease for the industry. A national 
rule also helps States reduce compliance problems associated with 
noncompliant coatings being transported into nonattainment areas from 
neighboring areas and neighboring States. A national rule will also 
enable States to obtain needed VOC emission reductions from this sector 
in the near term, without having to expend their limited resources to 
develop similar rules in each State.\6\
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    \6\ ALARM Caucus v. EPA, 215 F.3d 61,76 (D.C. Cir. 2000), cert. 
denied, 532 U.S. 1018 (2001).
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C. What Is Photochemical Reactivity?

    There are thousands of individual species of VOC chemicals that can 
participate in a series of reactions involving nitrogen oxides 
(NOX) and the energy from sunlight, resulting in the 
formation of ozone. The impact of a given species of VOC on formation 
of ground-level ozone is sometimes referred to as its ``reactivity.'' 
It is generally understood that not all VOC are equal in their effects 
on ground-level ozone formation. Some VOC react extremely slowly and 
changes in their emissions have limited effects on ozone pollution 
episodes. Some VOC form ozone more quickly than other VOCs, or they may 
form more ozone than other

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VOC. Other VOC not only form ozone themselves, but also act as 
catalysts and enhance ozone formation from other VOC. By distinguishing 
between more reactive and less reactive VOC, however, EPA believes that 
it may be possible to develop regulations that will decrease ozone 
concentrations further or more efficiently than by controlling all VOC 
equally.
    Assigning a value to the reactivity of a specific VOC species is a 
complex undertaking. Reactivity is not simply a property of the 
compound itself; it is a property of both the compound and the 
environment in which the compound is found. Therefore, the reactivity 
of a specific VOC varies with VOC:NOX ratios, meteorological 
conditions, the mix of other VOC in the atmosphere, and the time 
interval of interest. Designing an effective regulation that takes 
account of these interactions is difficult. Implementing and enforcing 
such a regulation requires an extra burden for both industry and 
regulators, as those impacted by the rule must characterize and track 
the full chemical composition of VOC emissions rather than only having 
to track total VOC content as is required by traditional mass-based 
rules. EPA's September 13, 2005 final rule \7\ to approve a comparable 
reactivity-based aerosol coating rule as part of the California State 
Implementation Plan for ozone contains additional background 
information on photochemical reactivity. Recently, EPA issued interim 
guidance to States regarding the use of VOC reactivity information in 
the development of ozone control measures.\8\
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    \7\ ``Revisions to the California State Implementation Plan and 
Revision to the Definition of Volatile Organic Compounds (VOC)-
Removal of VOC Exemptions for California's Aerosol Coating Products 
Reactivity-based Regulation'' 70 FR 53930, (September 13, 2005).
    \8\ ``Interim Guidance on Control of Volatile Organic Compounds 
in Ozone State Implementation Plans'') 70 FR 54046, (September 13, 
2005).
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1. What Research Has Been Conducted in Reactivity?
    Much of the initial work on reactivity scales was funded by the 
California Air Resources Board (CARB), which was interested in 
comparing the reactivity of emissions from different alternative fueled 
vehicles. In the late 1980s, CARB provided funding to William P. L. 
Carter at the University of California to develop a reactivity scale. 
Carter investigated 18 different methods of ranking the reactivity of 
individual VOC in the atmosphere using a single-cell trajectory model 
with a state-of-the-art chemical reaction mechanism.\9\ Carter 
suggested three scales for further consideration:
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    \9\ Carter, W. P. L. (1994) ``Development of ozone reactivity 
scales for organic gases,'' J. Air Waste Manage. Assoc., 44: 881-
899.
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    i. Maximum Incremental Reactivity (MIR) scale-an ozone yield scale 
derived by adjusting the NOX emissions in a base case to 
yield the highest incremental reactivity of the base reactive organic 
gas mixture.
    ii. Maximum Ozone Incremental Reactivity (MOIR) scale-an ozone 
yield scale derived by adjusting the NOX emission in a base 
case to yield the highest peak ozone concentration.
    iii. Equal Benefit Incremental Reactivity (EBIR) scale-an ozone 
yield scale derived by adjusting the NOX emissions in a base 
case scenario so VOC and NOX reductions are equally 
effective in reducing ozone.
    Carter concluded that, if only one scale is used for regulatory 
purposes, the maximum incremental reactivity (MIR) scale is the most 
appropriate.\10\ The MIR scale is defined in terms of environmental 
conditions where ozone production is most sensitive to changes in 
hydrocarbon emissions and, therefore, represents conditions where 
hydrocarbon controls would be the most effective. CARB therefore used 
the MIR scale to establish fuel-neutral VOC emissions limits in its 
low-emitting vehicle and alternative fuels regulation.11, 12 
Subsequently, Carter has updated the MIR scale several times as the 
chemical mechanisms in the model used to derive the scale have evolved 
with new scientific information. CARB incorporated a 1999 version of 
the MIR scale in its own aerosol coatings rule. The latest revision to 
the MIR scale was issued in 2003.
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    \10\ ``Initial Statement of Reasons for the California Aerosol 
Coatings Regulation, California Air Resources Board,'' 2000.
    \11\ California Air Resources Board ``Proposed Regulations for 
Low-Emission Vehicles and Clean Fuels--Staff Report and Technical 
Support Document,'' State of California, Air Resources Board, P.O. 
Box 2815, Sacramento, CA 95812, August 13, 1990.
    \12\ California Air Resources Board ``Proposed Regulations for 
Low-Emission Vehicles and Clean Fuels--Final Statement of Reasons,'' 
State of California, Air Resources Board, July 1991.
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    In addition to Carter's work, there have been other attempts to 
create reactivity scales. One such effort is the work of R.G. Derwent 
and coworkers, who have published articles on a scale called the 
photochemical ozone creation potential (POCP) scale.13, 14 
This scale was designed for the emissions and meteorological conditions 
prevalent in Europe. The POCP scale is generally consistent with that 
of Carter, although there are some differences because it uses a 
different model, chemical mechanism, and emission and meteorological 
scenarios. Despite these differences, there is a good correlation of 
r\2\=0.9 between the results of the POCP and the MIR scales\12\.
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    \13\ Derwent, R.G., M.E. Jenkin, S.M. Saunders and M.J. Pilling 
(2001) ``Characterization of the Reactivities of Volatile Organic 
Compounds Using a Master Chemical Mechanism,'' J. Air Waste 
Management Assoc., 51: 699-707.
    \14\ Derwent, R.G., M.E. Jenkin, S.M. Saunders and M.J. Pilling 
(1998) ``Photochemical Ozone Creation Potentials for Organic 
Compounds in Northwest Europe Calculated with a Master Chemical 
Mechanism,'' Atmos. Env., 32(14/15):2429-2441.
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    As CARB worked to develop reactivity-based regulations in 
California, EPA began to explore the implications of applying 
reactivity scales in other parts of the country. In developing its 
regulations, CARB has maintained that the MIR scale is the most 
appropriate metric for application in California, but cautions that its 
research has focused on California atmospheric conditions and that the 
suitability of the MIR scale for regulatory purposes in other areas has 
not been demonstrated. In particular, specific concerns have been 
raised about the suitability of using the MIR scale in relation to 
multi-day stagnation or transport scenarios or over geographic regions 
with very different VOC:NOX ratios than those of California.
    In 1998, EPA participated in the formation of the Reactivity 
Research Working Group (RRWG), which was organized to help develop an 
improved scientific basis for reactivity-related regulatory 
policies.\15\ All interested parties were invited to participate. Since 
that time, representatives from EPA, CARB, Environment Canada, States, 
academia, and industry have met in public RRWG meetings to discuss and 
coordinate research that would support this goal.
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    \15\ See https://www.narsto.org/section.src?SID=10.
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    The RRWG has organized a series of research efforts to explore:
    i. The sensitivity of ozone to VOC mass reductions and changes in 
VOC composition under a variety of environmental conditions;
    ii. The derivation and evaluation of reactivity scales using 
photochemical airshed models under a variety of environmental 
conditions;
    iii. The development of emissions inventory processing tools for 
exploring reactivity-based strategies; and
    iv. The fate of VOC emissions and their availability for 
atmospheric reactions.
    This research has led to a number of findings that increase our 
confidence in

[[Page 38956]]

the ability to develop regulatory approaches that differentiate between 
specific VOC on the basis of relative reactivity. The first two 
research objectives listed above were explored in a series of three 
parallel modeling studies that resulted in four reports and one journal 
article.16, 17, 18, 19, 20 EPA commissioned a review of 
these reports to address a series of policy-relevant science 
questions.\21\ In 2007, an additional peer review was commissioned by 
EPA to assess the appropriateness of basing a national aerosol coatings 
regulation on reactivity. Generally, the peer reviews support the 
appropriateness of the use of the box-model based MIR metric nationwide 
for the aerosol coatings category. The results are available in the 
rulemaking docket.
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    \16\ Carter, W.P.L., G. Tonnesen, and G. Yarwood (2003) 
Investigation of VOC Reactivity Effects Using Existing Regional Air 
Quality Models, Report to American Chemistry Council, Contract SC-
20.0-UCR-VOC-RRWG, April 17, 2003.
    \17\ Hakami, A., M.S. Bergin, and A.G. Russell (2003) Assessment 
of the Ozone and Aerosol Formation Potentials (Reactivities) of 
Organic Compounds over the Eastern United States, Final Report, 
Prepared for California Air Resources Board, Contract No. 00-339, 
January 2003.
    \18\ Hakami, A., M.S. Bergin, and A.G. Russell (2004a) Ozone 
Formation Potential of Organic Compounds in the Eastern United 
States: A Comparison of Episodes, Inventories, and Domains, Environ. 
Sci. Technol. 2004, 38, 6748-6759.
    \19\ Hakami, A., M. Arhami, and A.G. Russell (2004b) Further 
Analysis of VOC Reactivity Metrics and Scales, Final Report to the 
U.S. EPA, Contract 4D-5751-NAEX, July 2004.
    \20\ Arunachalam S., R. Mathur, A. Holland, M.R. Lee, D. Olerud, 
Jr., and H. Jeffries (2003) Investigation of VOC Reactivity 
Assessment with Comprehensive Air Quality Modeling, Prepared for 
U.S. EPA, GSA Contract  GS-35F-0067K, Task Order ID: 
4TCG68022755, June 2003.
    \21\ Derwent, R.G. (2004) Evaluation and Characterization of 
Reactivity Metrics, Final Draft, Report to the U.S. EPA, Order No. 
4D-5844-NATX, November 2004.
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    The results of the RRWG-organized study and the subsequent reviews 
suggest that there is good correlation between different relative 
reactivity metrics calculated with photochemical airshed models, 
regardless of the choice of model, model domain, scenario, or averaging 
times. Moreover, the scales calculated with photochemical airshed 
models correlate relatively well with the MIR metric derived with a 
single cell, one-dimensional box model. Prior to the RRWG-organized 
studies, little analysis of the robustness of the box-model derived MIR 
metric and its applicability to environmental conditions outside 
California had been conducted. Although these studies were not 
specifically designed to test the robustness of the box-model derived 
MIR metrics, the results suggest that the MIR metric is relatively 
robust.

D. Role of Reactivity in VOC/Ozone Regulations

    Historically, EPA's general approach to regulation of VOC emissions 
has been based upon control of total VOC by mass, without 
distinguishing between individual species of VOC. EPA considered the 
regulation of VOC by mass to be the most effective and practical 
approach based upon the scientific and technical information available 
when EPA developed its VOC control policy.
    EPA issued the first version of its VOC control policy in 1971, as 
part of EPA's State Implementation Plan (SIP) preparation guidance.\22\ 
In that guidance, EPA emphasized the need to reduce the total mass of 
VOC emissions, but also suggested that substitution of one compound for 
another might be useful when it would result in a clearly evident 
decrease in reactivity and thus tend to reduce photochemical oxidant 
formation. This latter statement encouraged States to promulgate SIPs 
with VOC emission substitution provisions similar to the Los Angeles 
County Air Pollution Control District's (LACAPCD) Rule 66, which 
allowed some VOC that were believed to have low to moderate reactivity 
to be exempted from control. The exempt status of many of those VOC was 
questioned a few years later, when research results indicated that, 
although some of those compounds do not produce much ozone close to the 
source, they may produce significant amounts of ozone after they are 
transported downwind from urban areas.
---------------------------------------------------------------------------

    \22\ ``Requirements for Preparation, Adoption and Submittal of 
Implementation Plans'', Appendix B, 36 FR 15495, (August 14, 1971).
---------------------------------------------------------------------------

    In 1977, further research led EPA to issue a revised VOC policy 
under the title ``Recommended Policy on Control of Volatile Organic 
Compounds,'' (42 FR 35314, July 8, 1977), offering its own, more 
limited list of exempt organic compounds. The 1977 policy identified 
four compounds that have very low photochemical reactivity and 
determined that their contribution to ozone formation and accumulation 
could be considered negligible. The policy exempted these ``negligibly 
reactive'' compounds from VOC emissions limitations in programs 
designed to meet the ozone NAAQS. Since 1977, the EPA has added other 
compounds to the list of negligibly reactive compounds based on new 
information as it has been developed. In 1992, the EPA adopted a formal 
regulatory definition of VOC for use in SIP, which explicitly excludes 
compounds that have been identified as negligibly reactive (40 CFR 
51.100(s)).
    To date, EPA has exempted 54 compounds or classes of compounds in 
this manner. In effect, EPA's current VOC exemption policy has 
generally resulted in a two bin system in which most compounds are 
treated equally as VOC and are controlled and a separate smaller group 
of compounds are treated as negligibly reactive and are exempt from VOC 
control.\23\ This approach was intended to encourage the reduction of 
emissions of all VOC that participate in ozone formation. From one 
perspective, it appears that this approach has been relatively 
successful. EPA estimates that, between 1970 and 2003, VOC emissions 
from man-made sources nationwide declined by 54 percent. This decline 
in VOC emissions has helped to decrease average ozone concentration by 
29 percent (based on 1-hour averages) and 21 percent (based on 8-hour 
averages) between 1980 and 2003. These reductions occurred even though, 
between 1970 and 2003, population, vehicle miles traveled, and gross 
domestic product rose 39 percent, 155 percent and 176 percent 
respectively.\24\
---------------------------------------------------------------------------

    \23\ For some analytical purposes, EPA has distinguished between 
VOC and ``highly reactive'' VOC, such as in the Agency's initial 
evaluation of consumer products for regulation. See, ``Final 
Listing,'' 63 FR 48792, 48795-6 (Sept. 11, 1998) (explaining EPA's 
approach); see also, ALARM Caucus v. EPA, 215 F. 3d 61, 69--73 (D.C. 
Cir. 2000), cert. denied, 532 U.S. 1018 (2001) (approving EPA's 
approach as meeting the requirements of CAA section 183(e)).
    \24\ ``Latest Findings on National Air Quality: 2002 Status and 
Trends,'' EPA 454/K-03-001, (August 2003); and ``The Ozone Report 
Measuring Progress through 2003,'' EPA 454/K-04-001, (April 2004); 
Environmental Protection Agency, Office of Air Quality Planning and 
Standards, Research Triangle Park, North Carolina.
---------------------------------------------------------------------------

    On the other hand, some have argued that a reactivity-based 
approach for reducing VOC emissions would be more effective than the 
current mass-based approach. One group of researchers conducted a 
detailed modeling study of the Los Angeles area and concluded that, 
compared to the current approach, a reactivity-based approach could 
achieve the same reductions in ozone concentrations at significantly 
less cost or, for a given cost, could achieve a significantly greater 
reduction in ozone concentrations.\25\ Although the traditional 
approach to VOC control focused on reducing the overall mass of 
emissions may be adequate in some areas of the country, EPA's recent 
guidance on control of VOC in ozone SIPs recognizes that approaches to 
VOC control that differentiate between VOC

[[Page 38957]]

based on relative reactivity are likely to be more effective and 
efficient under certain circumstances.\26\ In particular, reactivity-
based approaches are likely to be important in areas for which 
aggressive VOC control is a key strategy for reducing ozone 
concentrations. Such areas include:
---------------------------------------------------------------------------

    \25\ A. Russell, J. Milford, M. S. Bergin, S. McBride, L. 
McNair, Y. Yang, W. R. Stockwell, B. Croes, ``Urban Ozone Control 
and Atmospheric Reactivity of Organic Gases,'' Science, 269: 491-
495, (1995).
    \26\ ``Interim Guidance on Control of Volatile Organic Compounds 
in Ozone State Implementation Plans,'' 70 FR 54046, September 13, 
2005).
---------------------------------------------------------------------------

     Areas with persistent ozone nonattainment problems;
     Urbanized or other NOX-rich areas where ozone 
formation is particularly sensitive to changes in VOC emissions;
     Areas that have already implemented VOC RACT measures and 
need additional VOC emission reductions.
    In these areas, there are a variety of possible ways of addressing 
VOC reactivity in the SIP development process, including:
     Developing accurate, speciated VOC emissions inventories.
     Prioritizing control measures using reactivity metrics.
     Targeting emissions of highly-reactive VOC compounds with 
specific control measures.
     Encouraging VOC substitution and composition changes using 
reactivity-weighted emission limits.
    The CARB aerosol coatings rule is an example of this last 
application of the concept of reactivity. CARB's reactivity-based rule 
encouraged the use of compounds that were less effective at producing 
ozone. It contained limits for aerosol coatings expressed as grams of 
ozone formed per gram of product instead of the more traditional limits 
expressed as percent VOC. EPA approved CARB's aerosol coatings rule as 
part of the California SIP for ozone. EPA's national aerosol coatings 
rule builds largely upon CARB's efforts to regulate this product 
category based upon relative reactivity.

E. The Aerosol Coating Industry

    Aerosol coatings include all coatings that are specially formulated 
and packaged for use in pressurized cans. They are used by both 
professional and by do-it-yourself (DIY) consumers. The DIY segment 
accounts for approximately 80 percent of all sales. The remainder of 
aerosol coatings is sold for industrial maintenance and original 
equipment manufacturer use. Aerosol coatings are used for a number of 
applications including small domestic coating jobs, field and 
construction site marking, and touch-up of marks and scratches in 
paintwork of automobiles, appliances and machinery.
    The aerosol coatings industry includes the formulators and 
manufacturers of the concentrated product. These manufacturers may 
package the product or they may use toll fillers (processors). These 
toll fillers may work not only with the large manufacturers, but for 
other coating manufacturers who do not have the specialized equipment 
to fill aerosol containers. The fillers may then supply the product to 
coating dealers, home supply stores, distributors, company-owned 
stores, and industrial customers.
    An aerosol consists of a gas in which liquid or solid substances 
may be dispensed. Aerosol coatings are pressurized coatings that, like 
other coatings, consist of pigments and resins and solvents. However, 
aerosol coatings also contain a propellant that dispenses the product 
ingredients. A controlled amount of propellant in the product vaporizes 
as it leaves the container, creating the aerosol spray. The combination 
of product and propellant is finely tuned to produce the correct 
concentration and spray pattern for an effective product.
    Aerosol coatings can be packaged in disposable cans for hand-held 
applications or for use in specialized equipment in ground traffic/
marking applications. As with other coatings, aerosol coatings are 
available in both solvent-based and water-based formulations.
    In developing the proposed national rule for aerosol coatings, EPA 
is using the same coating categories, and the same definitions for 
those categories, previously identified by CARB in its comparable 
regulation for aerosol coatings. We believe these categories adequately 
categorize the industry and encompass the range of products included in 
our own analysis of this category that we conducted in preparing the 
Report to Congress (EPA-453/R-94-066-A). Use of the same definitions 
and categories has the added benefit of providing regulated entities 
with consistency between the CARB and national rules. The categories we 
propose include six general categories and 30 specialty categories. 
Based on a survey of aerosol coating manufacturers conducted by CARB in 
1997, VOC emissions from the six general categories together with the 
specialty category of Ground Traffic/Marking Coatings account for 
approximately 85 percent of the ozone formed as a result of the use of 
aerosol coatings. These categories are defined in this proposed 
regulation and are described in more detail in the docket to this 
rulemaking.
    There are currently no national regulations addressing VOC 
emissions from aerosol coatings. California, Oregon and Washington are 
the only States that currently regulate aerosol coating products and 
Oregon's and Washington's rules are identical to the Tier 1 VOC mass-
based limits developed by CARB that became effective in 1996. Unlike 
other EPA or State regulations and previous CARB regulations for 
aerosol coatings that regulate VOC ingredients by mass in the 
traditional approach, the current California regulation for aerosol 
coatings is designed to limit the ozone formed from VOC emissions from 
aerosol coatings by establishing limits on the reactivity of the 
cumulative VOC ingredients of such coatings. A more thorough discussion 
of the reactivity approach and the proposed reactivity limits are 
presented later in this preamble (section IV.D).

II. Summary of Proposed Standards

A. Applicability of the Standards and Regulated Entities

    The proposed Aerosol Coatings Reactivity Rule (ACRR) will apply to 
manufacturers, processors, wholesale distributors, or importers of 
aerosol coatings used by both the general population (i.e., the ``Do It 
Yourself'' market) and industrial applications (e.g., at original 
equipment manufacturers and other industrial sites). This regulation 
will also apply to distributors if those distributors are responsible 
for any of the labeling of the aerosol products. The proposed rule 
includes an exemption from the limits in Table 1 of subpart E of the 
rule for those manufacturers that manufacture very limited amounts of 
aerosol coatings, i.e., products with a total VOC content by mass of no 
more than 7,500 kilograms of VOC per year in the aggregate for all 
products. EPA notes that an exemption under EPA's national rule for 
aerosol coatings under section 183(e) does not alter any requirements 
under any applicable State or local regulations.

B. Regulated Pollutant

    The regulated pollutants under this proposed regulation are VOC, as 
that term is defined in 40 CFR 51.100(s). However, the listed exempt 
compounds that are normally excluded from the definition of VOC in 40 
CFR 51.100(s)(1) will be regulated as VOC for purposes of this 
regulation. Because all of these compounds contribute to ozone 
formation, we are proposing to amend the regulatory definition of VOC 
for purposes of this rule. While the regulated pollutants will be VOCs, 
the emission limits in the standard will be expressed in terms of 
weight of ozone generated from the VOC ingredients per

[[Page 38958]]

weight of coating material, rather than the traditional weight of VOC 
ingredients per weight or volume of product. We believe that this 
approach will allow us to reduce the overall amount of ozone that 
results from the VOCs emitted to the atmosphere from these products, 
while providing manufacturers with the flexibility to select VOC 
ingredients for their products. This approach provides incentives to 
manufacturers to reformulate their products using VOC ingredients that 
will likely result in less ozone production.

C. Regulatory Limits

    The proposed regulatory limits for the ACRR are a series of 
reactivity limits for six general coating categories and 30 
subcategories of specialty coatings. These reactivity limits are 
expressed in terms of mass of ozone generation per gram of product. In 
addition to compliance with the reactivity limits, a regulated entity 
is also required to comply with labeling, recordkeeping, and reporting 
requirements.

D. Compliance Requirements

    The proposed rule requires all regulated entities to comply by 
January 1, 2009. The proposed rule includes a provision that allows 
regulated entities that have not previously manufactured, imported, or 
distributed for sale or distribution in California any product that 
complies with applicable California regulations for aerosol coatings to 
seek an extension of the compliance date until January 1, 2011.
    After the compliance date, the regulated entity under this proposed 
rule will be required to conduct initial compliance demonstration 
calculations for all coating formulations manufactured or filled at 
each of their facilities. These calculations must be maintained on-site 
for 5 years after the product is manufactured, processed, distributed, 
or imported, and must be submitted to the Agency upon request. The 
regulated entity may use formulation data to make the compliance 
calculations; however, EPA is proposing to adopt California's Method 
310 as the underlying test method (i.e., formulation data should be 
verifiable with CARB 310, if requested). Facilities will also be 
allowed to use EPA's Test Method 311.

E. Labeling Requirements

    The proposed rule also includes labeling requirements to facilitate 
implementation and enforcement of the limits. Labels must clearly 
identify the product category or the category code provided in Table 1 
of the regulation, the limit for that category, and the product date 
code. If the date code is not easily discernable, an explanation of the 
code would need to be included in the initial notification discussed 
below.

F. Recordkeeping and Reporting

    The proposed rule includes a requirement for an initial 
notification report from all regulated entities to EPA 90 days before 
the compliance date. This report will provide basic information about 
the regulated entity and will identify all manufacturers, processors, 
wholesale distributors, or importers of aerosol coatings. In addition, 
this report will need to explain the date code system used to label 
products and it must include a statement certifying that all of the 
company's products will be in compliance with the limits by the 
compliance date.
    The regulated entity is required to maintain compliance 
calculations for each of its aerosol coatings formulations. For each 
batch of a particular formulation, the regulated entity must maintain 
records of the date(s) the batch was manufactured, the volume of the 
batch, and the VOC formula for the formulation. Records of these 
calculations must be maintained 5 years after the product is 
manufactured, processed, distributed for wholesale, or imported for 
sale or distribution in interstate commerce in the United States.
    The proposed rule does not include any regular, ongoing reporting 
requirements for most regulated entities. Reporting after the initial 
compliance report is only required when a manufacturer adds a new 
coating category. When this happens, a new notification is required. 
However, the EPA also invites public comment on the feasibility and 
need for additional reporting requirements.
    The proposed rule requires those small manufactures that qualify 
for exemption from the limits of Table 1 of subpart E of the rule to 
make an annual report to EPA providing necessary information and 
documentation to establish that the products made by the entity should 
be exempt.

G. Variance

    The proposed rule allows regulated entities to submit a written 
application to the Agency requesting a temporary variance if, for 
reasons beyond their reasonable control, they cannot comply with the 
requirements of the rule. An approved variance order would specify a 
final compliance date and a condition that imposes increments of 
progress necessary to assure timely compliance. A variance would end 
immediately if the regulated entity failed to comply with any term or 
condition of the variance. The Administrator will provide special 
consideration to variance requests from regulated entities, 
particularly small businesses that have not marketed their products in 
areas subject to State regulations for these products prior to this 
rulemaking. EPA notes that a variance under EPA's national rule for 
aerosol coatings under section 183(e) does not alter any requirements 
under any applicable state or local regulations.

H. Test Methods

    Although regulated entities may use formulation data to demonstrate 
compliance with the reactivity limits, EPA believes it is also 
necessary to have test methods in place that can be used to verify the 
accuracy of the formulation data. Therefore, we have included two test 
methods that can be used by regulated entities or the Administrator to 
determine compliance with the reactivity limits. In those cases where 
the formulation data and test data are not in agreement, data collected 
using the approved test methods will prevail. Regulated entities or 
regulatory agencies may use either CARB Method 310--Determination of 
Volatile Organic Compounds in Consumer Products and Reactive Organic 
Compounds in Aerosol Coating Products or EPA Method 311--Analysis of 
Hazardous Air Pollutant Compounds in Paints and Coatings to determine 
the reactive organic compound content of an aerosol coating. CARB 
Method 310 includes some test procedures that are not required to 
determine the VOC content of aerosol coatings; for example, Method 310 
incorporates EPA Method 24 for determining the VOC content of a 
coating. We have identified those sections of Method 310 that are not 
required for compliance demonstration purposes in the regulation. EPA 
Method 311 was originally developed for liquid coatings; so, it does 
not include provisions for the collection of the propellant portion of 
an aerosol coating. Therefore, those choosing to use Method 311 must 
separate the aerosol propellant from the coating using either ASTM 
D3063-94 or ASTM D 3074-94.

III. Summary of Impacts

    This section presents a summary of the impacts expected as a result 
of this proposed rule. To ensure that the impacts are not minimized, we 
followed an approach that would provide conservative estimates for each 
impact. For environmental impacts, we ensured that our estimated 
positive impact (i.e.,

[[Page 38959]]

emission reduction) was not overstated (i.e., conservatively low). For 
cost and economic impacts, we ensured that our estimated impacts were 
not understated (i.e., conservatively high). This approach ensures that 
conclusions drawn on the overall impact on facilities, including small 
businesses, are based on conservative assumptions.

A. Environmental Impacts

    In accordance with section 183(e), EPA has evaluated what 
regulatory approach would constitute ``best available controls'' for 
this product category, taking into account the considerations noted in 
the statute. EPA has evaluated the incremental increase or decrease in 
air pollution, water pollution, and solid waste reduction that would 
result from implementing the proposed standards.
1. Air Pollution Impacts
    The proposed rule will reduce both VOC emissions and the amount of 
ozone generated from the use of aerosol coatings. Because most States 
will use the VOC emission reductions resulting from this rule in their 
ozone SIP planning, we have calculated the reductions associated with 
the rule in terms of mass VOC emissions and we will refer to a 
reduction in mass VOC emissions when discussing the impacts of the 
proposed regulation. EPA believes this is appropriate because the 
reactivity limits were designed to ensure that the ozone reductions 
that would be achieved by the limits were equivalent to the mass VOC 
reductions that would have been achieved by the CARB 2002 mass-based 
VOC limits. However, because the limits actually reduce the amount of 
ozone generated from the VOC used in aerosol coatings rather than VOC 
content by mass, the VOC reductions that we refer to are more 
accurately described as an ``equivalent reduction in VOC emissions.'' 
We will use the term ``reduction'' in subsequent discussions. 
Additional information on the method used to calculate the air impacts 
of the proposed rule are included in the impacts calculation memo 
contained in the docket to this rulemaking.
    As proposed, EPA believes that this rule would reduce nationwide 
emissions of VOC from the use of aerosol coatings by an estimated 
15,570 Mg (17,130 tons) from the 1990 baseline. This represents a 19.4 
percent reduction from the 1990 baseline of 80,270 Mg (88,300 tons) of 
VOC emissions from the product category. While we believe that the 
above numbers accurately assess the impacts of the proposed rule for 
SIP credit purposes, we recognize that significant reductions have 
already occurred as the result of the implementation of the CARB 
aerosol coatings regulations. Because many manufacturers sell ``CARB 
compliant'' coatings across the country, some of these VOC emission 
reductions have already been achieved outside of California. We 
estimate that approximately 18 percent of the total products sold are 
not compliant with EPA's proposed limits. Therefore, we estimate that 
this rule will result in additional VOC reductions equivalent to 3,100 
tons per year (i.e., 18 percent of 17,130). We request comment on our 
estimate of the products that are not compliant with these limits 
specifically, and on our evaluation of the potential VOC emission 
reductions generally.
    The 18 percent reduction in VOC emissions represents new 
reductions. However, for ozone SIP purposes, we plan to give States 
that do not currently have aerosol coating regulations in place full 
credit for the 19.4 percent reduction from the 1990 baseline. This 19.4 
percent reduction is equivalent to a 0.114 pound of VOC reduction per 
capita.
    Although we have not quantified the anticipated impacts of this 
rule on HAP emissions, EPA expects that the proposed rule would reduce 
emissions of toluene and xylene, two highly reactive toxic compounds. 
Toluene and xylene are hazardous air pollutants that manufacturers have 
historically used extensively in some aerosol coating formulations. 
However, both of these compounds are also highly reactive VOCs. 
Therefore, it will be difficult for regulated entities to continue to 
use these compounds in significant concentrations and still meet the 
reactivity limits in the proposed rule. EPA believes that the proposed 
rule based upon VOC reactivity, rather than VOC mass, will provide a 
significant incentive for manufacturers to cease or reduce use of 
toluene and xylene in their products.
    Due to the reduction in equivalent VOC emissions and ozone 
formation and the anticipated reduction in hazardous air pollutant 
emissions, we believe the rule will improve human health and the 
environment.
2. Water and Solid Waste Impacts
    There are no adverse solid waste impacts anticipated from the 
compliance with this rule. Because companies can continue to sell and 
distribute coatings that do not meet the reactivity limits after the 
compliance date as long as those coatings were manufactured before the 
compliance date the industry does not have to dispose of aerosol cans 
containing noncompliant product, which would result in an increase in 
solid waste. It is possible that the proposed rule will actually result 
in a reduction in solid waste as more concentrated higher solids 
coatings may be used as an option for meeting the proposed limits. This 
will result in fewer containers requiring disposal when the same volume 
of solids is applied by product users.
    There are no anticipated adverse water impacts from this 
rulemaking.

B. Energy Impacts

    There are no adverse energy impacts anticipated from compliance 
with this proposed rule. EPA believes that regulated entities will 
comply through product reformulation which will not significantly alter 
energy impacts. The proposed rule does not include add-on controls or 
other measures that would add to energy usage or other impacts.

C. Cost and Economic Impacts

    There are four types of facilities that will be impacted by the 
proposed rule. These include the aerosol coating manufacturers, aerosol 
coating processors, and aerosol coating wholesale distributors, and 
importers of aerosol coatings. For some products, the manufacturer is 
also the filler and distributor, while for other products the 
manufacturing process, the filling process, and the distribution may be 
done by three separate companies. The primary focus of our cost and 
economic analysis is the aerosol coating manufacturers as we anticipate 
that the costs to the fillers, distributors, or importers will be 
minimal.
    For the aerosol coating manufacturer, we evaluated three components 
in determining the total cost of the proposed rule. These three 
components include the cost of the raw materials that the manufacturer 
will use to formulate coatings that comply with the proposed rule, the 
cost of research and development efforts that will be necessary to 
develop compliant formulations, and the cost of the recordkeeping and 
reporting requirements associated with the proposed rule. Because we 
have limited information on aerosol coating sales for the aerosol 
coating manufacturers that we have identified, we evaluated each of 
these costs on a per can basis for each of the 36 coating categories. A 
brief discussion of each of these cost components is presented below. A 
more detailed discussion of the cost analysis is presented in the cost 
analysis memorandum that is included in the docket.

[[Page 38960]]

    The proposed rule is based on reactivity limits established for six 
general coating categories and 30 specialty coating categories. To meet 
the limits, aerosol coating manufacturers may have to reformulate their 
existing coatings with different solvents and propellants, or at least 
different combinations of those compounds. The difference in the cost 
of the solvents and propellants used for formulating the complying 
coatings and those used for formulating the noncomplying coatings is 
the basis for the raw material costs.
    To determine the raw material costs, we used data compiled by CARB 
from its 1997 survey of the aerosol coatings industry. Using the data 
from the survey, CARB developed a typical formulation for a complying 
coating for each category and a typical formulation for a noncomplying 
coating for each category. We then compared the cost of the materials 
used in each formulation to determine the raw material costs per can 
for each category. The raw material costs per can ranged from a cost 
savings of $0.04/can, that is, the cost of the raw materials used in 
the complying coating was less than the cost of the raw materials used 
in the noncomplying coating, to a cost increase of $0.12/can.
    Aerosol coating manufacturers not only have to develop formulations 
that meet the reactivity limits in the proposed rule, but they also 
must ensure that the reformulated coatings have the same performance 
characteristics and the coatings that they will replace. We anticip