EPA Proposes Rules to Implement the Formaldehyde Emissions Standards for Composite Wood Products and Deviates Greatly from California's Standard

By and large, industry supported the creation of a federal formaldehyde emission standards program with the expectation that EPA would promulgate standards that mirrored California Air Resources Board (CARB) regulation 93120, Airborne Toxic Control Measure (ATCM) to Reduce Formaldehyde Emissions from Composite Wood Products, which is the de facto national law for U.S. businesses.^[1]  Industry wanted the federal government to level the playing field and address imports of composite wood that do not have to comply with the ATCM.  EPA’s proposed regulations do address imports, but to the disappointment of many, EPA deviated from the ATCM in several other aspects, and EPA’s rules, if finalized as proposed, would have a significant impact, particularly on small businesses. 

The Formaldehyde Standards for Composite Wood Products Act of 2010 (the Act), 15 U.S.C. 2697, was signed into law on July 7, 2010, creating Title VI of the Toxic Substances Control Act (TSCA).  The Act sets formaldehyde emissions limits for products manufactured using hardwood plywood (HWPW), particleboard (PB), or medium-density fiberboard (MDF), collectively referred to as composite wood products.  Products including furniture, cabinets, molding, and window and door parts are covered by the Act.  On June 10, 2013, EPA proposed two rules for the implementation of the Act:  Formaldehyde: Third-Party Certification Framework for the Formaldehyde Standards for Composite Wood Products[2] (TPC Proposed Rule) and Formaldehyde Emissions Standards for Composite Wood Products[3] (Proposed Emissions Standards Rule).  The comment deadline is August 26, 2013 and September 9, 2013, respectively.

As required by the Act, the TPC Proposed Rule implements a third-party certification program to ensure composite wood panel producers comply with the established emissions limits.  The proposed rule would require third-party certifiers (TPCs) to apply to EPA-recognized accreditation bodies for verification of the certifiers’ ability to ensure panel producers comply with the formaldehyde emissions standards.  TPCs would be responsible for conducting and verifying formaldehyde emission tests as well as auditing producers of composite wood panels for compliance with the regulations.

The Proposed Emissions Standards Rule implements the statutory emissions standards for composite wood products sold, supplied, offered for sale, manufactured, or imported into the United States.  The proposed rule contains similarities to the ATCM; for example, the proposed national emissions limitations are identical to the CARB ATCM Phase II standards.  However, the universe of composite wood products that would have to tested and certified as meeting the standards under the proposed rule would be expanded.  EPA proposes coverage of some laminated products and would apply the rule to fabricators, which is a significant departure from the ATCM. 

Proposed Emissions Standard

Although the proposed formaldehyde emissions standards are identical to the CARB ATCM Phase II levels, the EPA rule proposes to extend the standards to apply “regardless of whether the composite wood product is in the form of a panel, a component part, or incorporated into a finished good.”[4]  Significantly, this extension would require laminated product producers or “fabricators,” who are exempted under the ATCM, to meet, test, and certify to the emissions standards under EPA’s regulations.  This decision is contrary to the recommendations of many small businesses who participated in the EPA Small Business Advocacy Review (SBAR) Panel and advocated that to be consistent with the ATCM, (1) EPA should not define “hardwood plywood” to include “laminated products”; and (2) EPA should exempt small producers of laminated products from testing requirements if appropriate documentation regarding the use of complaint composite wood substrates is maintained.[5]

Proposed Definition of Hardwood Plywood (HWPW)

EPA believes that increased formaldehyde emissions may result from laminating or attaching a wood veneer to a platform, and that there is insufficient data to justify a categorical exemption of all laminated products from the definition of HWPW.  Thus, EPA proposes to modify the statutory definition of HWPW to exempt only laminated products in which a wood veneer is attached to a compliant and certified platform using a no-added formaldehyde-based (NAF) resin.  Small Entity Representatives (SERs) to the SBAR panel, however, had argued that laminators only add approximately one tenth of the resin a platform manufacturer adds, and that if regulated, the laminators would be paying for their products to be certified twice (once as part of the pass-through cost to the laminator purchasing the certified platform, and then again for the certification of the final product post-lamination).  SERs advocated that including laminated products in the definition of HWPW places small manufacturers and laminators at a severe disadvantage as compared with larger manufacturers who produce the entire product in-house.  EPA however has interpreted its statutory authority to only allow for the exemption of laminated products from the HWPW definition if EPA has reasonable assurance that the exempted products will comply with the applicable emissions standards. 

Ultra Low-Emitting Formaldehyde (ULEF) Adhesives

EPA is attempting to incentivize the use of low emitting or no emitting formaldehyde resins.  Thus, similar to the ATCM, the proposed rule includes provisions under which producers of wood product panels made with ultra-low emitting formaldehyde (ULEF) resins may qualify for reduced testing and certification requirements.  EPA, however, appears hesitant to adopt the reduced requirements for ULEF resins due to a recent study which indicated that elevated temperature and humidity conditions result in increased formaldehyde emissions.[6]

Quality Control Testing

The proposed rule includes a requirement for routine quality control tests that is similar to CARB’s requirements.  Unlike CARB’s requirements, however, the proposed frequency of quality control tests for HWPW producers would be based on the total square feet of a particular batch or product type made during a single production run.  EPA has proposed that producers of less than 100,000 square feet of a particular product type will be required to conduct one quality control test of the product per production run or lot produced.  While EPA believes this requirement is not overly burdensome, this provision likely raises significant concerns for many small manufacturers and laminators who produce cabinets, doors, furniture, or other composite wood products on a “made-to-order” basis.  Under this proposed rule, quality control testing for these small manufacturers and laminators could be required per project or product. 

Recordkeeping, Chain of Custody and Labeling

Most of the proposed rule’s recordkeeping and labeling requirements are similar to those in the ATCM.  The proposed federal rule, however, would require laminators or “fabricators” to maintain a written quality control manual, and designate a quality control manager.  Additionally, EPA proposes to require distributors and retailers who are not considered manufacturers, to keep invoices and bills of lading for up to three years in order to enable EPA to trace an individual composite wood product back to the panel producer.  This provision has the potential to affect an incredible number of retailers.  For example, under the proposed rule manufacturers of products carved from laminated composite wood products such as wood baseball bats, and subsequent retailers of such products (e.g., sporting-goods stores that then purchase the baseball bats) may be required to comply with the rule’s record keeping requirements. 

De Minimis Exception

Congress directed that in implementing the Act, EPA “shall” include a provision for the exclusion of products and components containing de minimis amounts of composite wood products.[7]  To the great surprise and disappointment of the composite wood industry, and, arguably, in contradiction to the statutory mandate, EPA failed to propose any de minimis exemptions.  EPA claims that they do not have any data to support the proposal of de minimis standards.  Under the Act however, there is a statutory exemption from emissions standards for windows, exterior doors, and garage doors made with small amounts of composite wood products.  Thus, it is unclear why EPA did not, at a minimum, propose exemptions for other products made with similarly small amounts of composite wood products.

EPA has requested comments on nearly every aspect of the proposed regulations.  Due to differences from the CARB ATCM standards, EPA must be prepared for substantial feedback, comments, and data.