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Imation

Final Project Agreement

FINAL PROJECT AGREEMENT

FOR THE XL PROJECT AT

IMATION CORP.


***DRAFT***

June 23, 1999

Introduction 1
I. Description of the Project 2
    A. General Overview
2
    B. Principal Imation Camarillo Responsibilities
3
    C. Nature of Relief Provided by the Project
5
    D. Relationship of the project to the goals of Project XL
6
    E. Implementation
10
    F. Emission Reduction Credits (ERCs)
12
II. Terms of the Agreement 14
    A. Air Emissions
14
      1. Plant-wide applicability limit (PAL) and emission caps
14
      2. Capture/control requirements
16
      3. Monitoring, recordkeeping, and reporting requirements
17
      4. Other requirements
20
      5. Operational flexibility
20
    B. Multi-Media Pollution Prevention
23
    C. Environmental Management System (EMS)
24
    D. Employee Protection
25
    E. Public Participation
25
III. Administrative Provisions 30
    A. Term of Agreement
30
    B. Renewal
30
    C. Modifications
30
    D. Dispute Resolution
31
    E. Termination
31
    F. Transition
32
    G. Existing Regulations
33
      1. Approach for Considering Alternatives to NSPS and MACT Requirements
33
    H. New Regulations
34
    I. Role of EPA Region 9 in Implementing Alternative Proposals
35
    J. Future government action
35
    K. No effect on regulatory authorities or citizen rights
36
    L. Evaluation of XL Project
36
    M. Transfer of FPA
37
    N. Miscellaneous provisions
37

Appendix 1 - Glossary 40

Appendix 2 - Compliance with Individual NSPS and MACT Standards at Imation Camarillo 42

Appendix 3 - Approach to Expedited Approval of New Control Devices Controlling New Production Capacity 49

Appendix 4 - Environmental Management System Criteria for Imation Camarillo 53



Introduction

This Final Project Agreement (FPA) is entered into between and among the United States Environmental Protection Agency (USEPA), the California Environmental Protection Agency (CalEPA), the Ventura County Air Pollution Control District (Ventura APCD), and Imation Corp. (Imation) to carry out a pilot project as part of several State and Federal initiatives including CalEPA-USEPA's Harmonization effort, California's Permit Consolidation Zones and USEPA's "Project XL" program. CalEPA and USEPA are working to increase clarity and efficiency of the regulatory efforts of the two agencies, to strengthen partnerships, and to reflect the changes that have been occurring. Addressing air, water, waste, and multi-media issues, in the spirit of the Harmonization effort, is consistent with the overarching goals of this Agreement. See Appendix 1 for a glossary of abbreviations and terms used throughout this document.

As outlined by USEPA in the Federal Register on May 23, 1995, XL pilot projects are part of an approach "designed to demonstrate that environmental goals can best be achieved by providing regulatory and policy flexibility while maintaining accountability, that flexibility can also provide greater protection at lower cost, that better decisions result from a collaborative process with people working together, and that environmental solutions are often achieved by focusing efforts at the facility or place where protection is being sought." (60 Fed. Reg. 27283, May 23, 1995) This XL Project, while complying with the underlying statutes, "will involve the exercise of regulatory flexibility by EPA in exchange for a commitment on the part of the regulated entity to achieve better environmental results than would have been attained through full compliance with all applicable regulations." (60 Fed. Reg. 27283)

Under this project, the Imation Camarillo facility will demonstrate environmental performance beyond what would be achieved under existing environmental requirements. In exchange for this enhanced environmental performance, Imation Camarillo will have the flexibility to make a number of changes in operations in an expedited manner, provided the changes conform to the terms and limits agreed upon herein. This Agreement also encourages pollution prevention and gives the community greater access to information regarding facility operations through simplified reporting.

This Agreement is intended to be a joint statement of the parties' plans and intentions with regard to the Imation project. It memorializes the firm commitment of each participant to carry out the project. It describes what the project intends to accomplish, and the steps that have been or will be taken by the parties to carry out the project. This agreement itself is not, however, intended to create legal rights or obligations and is not a contract, or a regulatory action. However, certain legal mechanisms, discussed in more detail below, will be used to implement the project. Through these mechanisms, some of the terms described in this agreement will be made legally enforceable. Neither this agreement nor any associated discussions among the parties about the agreement gives any of the parties a right to sue other parties for any alleged failure to implement its terms, either to compel implementation or to recover damages.

I. Description of the Project

***Draft FPA Imation XL Project***
Pursuant to the requirements concerning enhanced monitoring and compliance certification under the Clean Air Act, EPA promulgated regulations to implement compliance assurance monitoring (CAM) for major stationary sources of air pollution that are required to obtain operating permits under title V of the Act (See 40 C.F.R. Part 64). Subject to certain exemptions, the new regulations require owners or operators of such sources to conduct monitoring that satisfies particular criteria established in the rule to provide a reasonable assurance of compliance with applicable requirements under the Clean Air Act.

Imation's emissions units and activities subject to emission limitations or standards proposed by EPA after November 15, 1990 pursuant to Section 111 or 112 of the Clean Air Act are not subject to CAM. Nor are the emissions caps or any other applicable requirements currently applicable to the facility. In addition, Imation will not be subject to CAM as a result of the applicable requirements for which the source is pre-approved pursuant to the source's permitted alternative operating scenarios. However, Imation is responsible for evaluating applicability of CAM and taking all necessary steps to comply with CAM for any future emissions activities undertaken at the Camarillo facility that are not pre-approved in the source's permit.

Some additional details relating to CAM applicability at the Imation Camarillo facility are provided in supporting documents. See letter, "CAM Requirements as Applicable to Imation Camarillo," dated April 17, 1998 from Dawn Krueger, Imation Corp. to Dan Reich, EPA Region 9 and memorandum, "Review of Analysis of CAM Applicability Requirements for Imation Camarillo," dated May 28, 1998 from Peter Westlin, OAQPS to Dan Reich, EPA Region 9.

B. Multi-Media Pollution Prevention

Waste Ratio = W
W + B + P

Where: W = Actual Waste, all media, in pounds.
B = Byproducts in pounds.
P = Product in pounds.


C. Environmental Management System (EMS)

Imation Camarillo will develop an EMS modeled after International Standard ISO 14001. See Appendix 4 for a description of the EMS criteria. The EMS consists of an integrated set of environmental goals, procedures, and assessments that will be utilized to manage all of the Imation Camarillo plant's environmental impacts. As part of the EMS Imation Camarillo commits to continuous improvement with respect to reducing all environmental impacts.

Any portions of the EMS that are necessary to implement or assure compliance with Imation's title V permit, or to meet other statutory or regulatory requirements, will be identified in the title V permit and must be reviewed and approved by the appropriate agencies. Once approved, those portions of the EMS become enforceable by reference in the District issued title V permit or other appropriate permit or enforceable mechanism.

An EMS is not only to be used as a tool for compliance, but serves as a basis for managing all environmental impacts. There is a commitment to pollution prevention that can extend to systematically evaluating approaches to reducing chemical usage as well as designing products in an environmentally friendly fashion. Further, the EMS will address how Imation Camarillo can reduce all impacts including energy conservation, reduction of non-regulated substances, worker health and safety, etc. Through this process of testing an EMS the Agency (and the company) will learn the extent to which environmental risks can be controlled through a systems management approach.

The EMS will be internally audited annually and the results will be reported to the stakeholders, and other interested parties, who will verify compliance with the EMS program. Also, as part of the EMS, Imation Camarillo will expand its Internet home page to provide public information to the community on plant emissions, environmental performance, and environmental goals and objectives. Of course, some sections of the EMS may be considered confidential or proprietary for business reasons (Imation must go through the confidential business information process).

In terms of innovation, this part of the XL Project can be used as a tool for testing how companies that are willing to commit to going beyond compliance can establish alternative requirements that can be made enforceable through an EMS. This approach can provide a basis for developing an alternative track to environmental compliance for companies that are superior environmental performers. The FPA establishes a process whereby the Agency can approve, on a site specific demonstration project basis, alternative monitoring, recordkeeping and reporting requirements so long as the company can establish to the satisfaction of the Agency that it will exceed existing release reporting requirements. This process allows the Agency to test innovative approaches in a controlled setting so that the Agency can verify that there will be greater protection of the environment than would be accomplished by existing requirements. In addition, there will be an appropriate public notice and comment period for any actions that are outside the current regulatory framework.

D. Employee Protection

Imation Camarillo commits to continuously improve its existing worker protection policies and practices. As part of the annual evaluation process for this project, Imation Camarillo will document its current activities and describe the actions it has taken to improve its current program. Currently, Imation Camarillo has designed its equipment to ensure maximum capture of HAP/VOC emissions by venting them directly to the solvent recovery unit, thus reducing worker exposure to these chemicals. In addition to adhering to voluntary industry standards and practices, as well as worker safety requirements, Imation Camarillo has an ongoing worker training program that addresses worker protection issues.

E. Public Participation



III. Administrative Provisions


A. Term of Agreement

This Agreement is effective for five years from the date of signature.

B. Renewal

As early as one year but no later than 6 months prior to the end of term of this Agreement, Imation Camarillo may submit to EPA and the Ventura APCD a request for renewal of the Agreement. The request for renewal is to include information on existing operations at the facility, including process flow diagrams showing all emission units, a list of requirements that would otherwise be applicable to this facility, a compliance certification stating the facility's compliance status with the terms and conditions of the Agreement, a compliance plan describing how the source will revise the Agreement to reflect any newly applicable requirements, including a schedule of compliance for implementing any needed changes and any other information requested by the parties. Provided Imation Camarillo submits the required information in a complete and timely manner, the Agreement will remain in effect until the other parties have either agreed to renew it, or have given notice that they do not wish to renew.

Renewal of the agreement will not by itself extend the terms of any rules, permits, or other legal mechanisms that would otherwise expire; applicable requirements and procedures for renewal or extension of those mechanisms must be followed. However, the request for renewal will also constitute an application for renewal of the title V permit, and for that purpose will be certified by the party responsible for overall operations at Imation Camarillo. Completeness of any title V permit application or application for renewal will be determined by the Ventura APCD. Failure to renew the agreement does not by itself terminate any rules, permits or other legal mechanisms; if the agreement is not renewed, the termination of implementing legal mechanisms will proceed as described in section III.F (or by expiration according to the terms of the mechanism).

C. Modifications

The terms of this Agreement may be modified at any time, and from time to time, by mutual written agreement between the Ventura APCD, USEPA, and Imation Camarillo. Appendices may be modified by mutual agreement of the affected parties, without modifying the Agreement. To the extent that any modification of this Agreement requires a change in an implementing rule, permit, or other mechanism, the requirements and procedures applicable to that mechanism must be followed for the modification to be made.

D. Dispute Resolution

In the event a dispute arises with respect to a matter covered under the FPA, the Parties agree to negotiate in good faith in an attempt to resolve the dispute. Any Party may initiate informal negotiations by notifying all other Parties, in writing, setting forth the matter for dispute. If the dispute cannot be resolved by the Parties within 20 days of receipt of such notice, one or more of the disputants may invoke non-binding mediation by setting forth the nature of the dispute, with a proposal for its resolution, in a letter submitted to the EPA Region IX Administrator with a copy to all Parties. Any Party to the dispute may request an informal mediation meeting. With respect to any dispute raised for mediation, all opinions, written or oral, by the Regional Administrator or other designated Region IX official will be non-binding and non-enforceable. Nothing in this section will be construed as altering any signatory's right to request termination, or to give rise to any right of judicial review of the opinion.

E. Termination

1. EPA, Ventura County APCD, or Imation may elect to withdraw from this Agreement and terminate its terms by the following:

2. EPA, Ventura County APCD, and Imation agree that appropriate grounds to seek withdrawal from the Agreement could include, but are not limited to:

F. Transition

If this Agreement is terminated, or is not renewed at the end of its term, the following procedure will be followed to provide for transition to operation under the generally applicable laws and regulations that are in place at the time of termination or non-renewal.

1. Imation will apply, consistent with the application requirements of Ventura APCD regulations, for all necessary operating permits. All applications will be submitted to the appropriate agency(ies) within six months of the date of notice of termination or within the time deadlines specified by the appropriate agency(ies), whichever time is shorter. Any such application will be deemed a timely application for renewal of the operating permit(s) sought. The terms and conditions of each permit will remain in effect until that permit is replaced, or for one year, whichever is shorter.

2. Where a permit issued under the terms of the FPA relies on a site specific rule, EPA will revoke the site specific rule authorizing the prior permit.

3. The modifications to VCAPCD rules adopted under this project will be rescinded by VCAPCD, and those changes will be forwarded to EPA with a request that the SIP be modified accordingly.

4. For any new or modified sources constructed under the emissions limits established by this project, during the term of the project, emissions limits and applicable control technology requirements will be established in accordance with applicable regulations concerning relaxation in enforceable emissions limitations used to avoid PSD or major new source review requirements.

G. Existing Regulations

Imation Camarillo may propose additional alternative approaches to complying with federal or state environmental laws, for consideration as additional elements of this Project. Any such proposal by Imation Camarillo will clearly identify the nature of the regulatory relief being sought, and how the proposed alternative will further the goals and objectives of Project XL including, but not limited to, regulatory burden reduction and superior environmental performance. If Imation demonstrates to the Agencies' satisfaction that it can achieve greater environmental benefit either through the existing terms of the FPA, or through an alternative strategy, and that doing so will satisfy statutory and regulatory requirements and the criteria for the XL program, the Agencies intend to initiate steps to allow such alternative compliance, including where necessary proposing a site-specific rule. Imation's proposals will have the twin goals of achieving superior environmental performance, while ensuring that the installation of new or modified coating equipment or the development of new products will not be delayed. Opportunities for stakeholder and public participation will be provided in connection with such changes consistent with the principles of Project XL and section II.E. If an alternative strategy is approved, Imation Camarillo's title V permit will be revised to reflect compliance requirements under that strategy.

All existing laws and regulations remain in effect unless expressly changed or modified through a site specific rulemaking or other appropriate action.

H. New Regulations

Imation Camarillo will be subject to the requirements of regulations promulgated after the date the Agreement is executed. If Imation demonstrates to the Agencies' satisfaction that it can achieve greater environmental benefit either through the existing terms of the FPA, or through an alternative strategy, and that doing so will satisfy statutory and regulatory requirements and the criteria for the XL program, the Agencies intend to initiate steps to allow such alternative compliance, including where necessary proposing a site-specific rule. Opportunities for public/stakeholder participation will be provided in connection with such changes consistent with the principles of Project XL and section II.E. Imation's proposals will have the twin goals of achieving superior environmental performance, while ensuring that the installation of new or modified coating equipment or the development of new products will not be delayed. As part of an annual review process (described more fully in section III.L), Imation and the affected Agencies will meet to review whether the Agreement or proposed alternative strategies perform better than any new applicable regulations promulgated since the last review. Any Party may request a special meeting to review particular new regulations that will become effective prior to the annual review.

One new regulation issue that we have already identified is the likely promulgation of the MACT standard for the source category "Paper and Other Web Coatings." The Paper and Other Web Coatings MACT is expected to be promulgated in November, 2000. This standard is likely to apply to some of the activities for which Imation is receiving pre-approval in their initial title V permit. While it will be necessary to re-open the permit in order to add appropriate requirements from the new Paper and Other Web Coatings MACT (assuming Imation's permit term has more than three years remaining on it upon MACT promulgation), it is the intention of all parties to attempt to maintain in the revised permit the same degree of flexibility afforded Imation in their initial permit if all Project XL elements continue to be met by this facility.

I. Role of EPA Region 9 in Implementing Alternative Proposals

EPA Region 9 is the EPA lead for implementing this XL Project. Specifically, with respect to alternative proposals to regulations, as defined in sections G and H above, EPA Region 9 will make a preliminary determination as to whether the proposal provides greater environmental benefit. This decision will be made in consultation with other Agency parties. EPA Region 9 will also work in consultation with other Parties to identify a preferred approach for implementing an alternative proposal. EPA Region 9 will obtain required approvals from EPA Headquarters and will seek input from the Imation XL Project Stakeholders Group.

J. Future government action

The Parties understand that while the plans described in this Agreement are undertaken seriously and in good faith, it is not the intent of USEPA or any other government agency that is a Party to this Agreement to limit the ability of Congress or future Agency officials to take such action, as they deem appropriate. Accordingly, the Parties agree that the United States or any government agency that is a signatory to this Agreement will not be subject to liability based on third party or direct claims arising out of future government actions, including but not limited to, regulatory or statutory changes, that may adversely affect any party in the implementation of this project.

K. No effect on regulatory authorities or citizen rights

The agency Parties to this Agreement retain all statutory rights to enter, inspect, and test the premises. Nothing in this Agreement affects the ability of signatory agencies to act in cases of imminent hazard or unanticipated threats, or to exercise any authorities not specifically affected by the Agreement or its implementing mechanisms, including criminal enforcement authorities. This Agreement does not create any additional rights nor restrict the statutory rights of third parties to file citizen suits.

L. Evaluation of XL Project

As noted in section II.E above, this XL Pilot Project will be reviewed annually to evaluate whether the project is meeting its objectives. The Imation XL Project Stakeholders Group will conduct the evaluation of the implementation of the XL project and will prepare an annual report summarizing the evaluation. It is anticipated that the Stakeholders Group will, as part of its annual evaluation of the XL project, examine the monthly reports which have been submitted by the facility under the title V operating permit and review jointly with the facility any significant concerns. Other aspects of the annual review may include facility or regulatory agency reports and general Stakeholder Group discussion of some or all of the following topics: the applicability of any newly promulgated regulations; the results of the internal audit of the facility's Environmental Management System (EMS), including how the EMS has impacted environmental performance; implementation of the facility's title V permitted AOSs, including a review of the on-site AOS logs and the overall experience with the permitted mechanisms for implementing AOSs; and the Group's satisfaction with the overall stakeholder process, including the availability of information pertinent to the XL Project. The Stakeholder Group's annual report will be made available to the public.

The annual evaluation by the full Stakeholders Group is not intended for purposes of evaluating or determining the facility's compliance with legally enforceable requirements. Instead, examination of Imation's compliance with the enforceable terms and conditions of the facility's title V operating permit, such as the 95% Solvent Recovery Unit control efficiency requirement (based on a 72-hour rolling average), the 100% capture efficiency of VOC/HAP process emissions, the VOC PAL and other pollutant emission caps, is the responsibility of the appropriate regulatory agencies, VCAPCD and EPA.

At the conclusion of the five year term of this project, a more comprehensive Project XL evaluation will examine the extent to which both short-term and long-term goals have been achieved. This evaluation will also examine the appropriateness and success of specific components of the project, such as the pollutant-specific PAL and emission cap levels, pre-approving new equipment under an alternative operating scenario, the capture and control efficiencies, the overall environmental benefit/pollution reduction, the reduction of compliance costs and burdens, the empowerment of local stakeholders and the level of community participation, any regulatory or policy flexibilities granted, and other elements of the XL project. The results of this review will help assess whether innovations piloted by this Project are viable alternatives for other sources. It will also provide a basis for suggestions to improve both the FPA (and title V permit) upon renewal, and the Agency's overall XL Program.

Review criteria for the annual and five year reviews will be detailed in the EMS and agreed to by the Parties and the Project Stakeholder Group. The criteria should, to the greatest extent possible, include clear objectives and measurable requirements.

M. Transfer of FPA

If the Imation Camarillo facility is transferred to a new owner, either separately or as part of an acquisition of Imation Corporation, Imation will notify the other Parties of the proposed transfer at least 90 days prior to the proposed transfer date. If, by the same date, the new owner provides the other Parties with a written statement affirming that it has reviewed the FPA and agrees to accept responsibility for operating the facility in accordance with the FPA, the signatories other than Imation will then determine whether to extend the FPA to the new owner. If a written consent to extend the FPA is not provided by all Parties on or before the date of transfer, the FPA will terminate as of the date of the transfer. The Parties expect that, absent unusual circumstances, they will be able to consent to extending the FPA to any new owner who demonstrates the same or better historic commitment to environmental performance as other participants in Project XL.

N. Miscellaneous provisions

1. Notwithstanding the monitoring, recordkeeping, and reporting requirements in Part II of this FPA, Imation Camarillo retains all rights under law to protect confidential business information and other information protected by law from disclosure.







Imation Corp. Ventura County APCD



Signature Signature

Thomas Ferguson Richard H. Baldwin
Camarillo Plant Manager Air Pollution Control Officer



USEPA Region 9 California EPA



Signature Signature

Felicia Marcus Winston Hickox
Regional Administrator Secretary






Appendix 1 - Glossary

Agency(ies) - The USEPA, CalEPA, and Ventura APCD. CalEPA - The California Environmental Protection Agency.
CO - Carbon Monoxide (an air pollutant).
Collateral - These are emissions which occur as a
Emissions result of installation of a pollution control device - emanating from the device itself (e.g., NOx emissions from the burner on a catalytic oxidizer).
Covenant - The "Project XL Covenant," which was approved by the VCAPCD Board in November 1996. As adopted, the Covenant constitutes a site-specific VCAPCD rule for the Imation Camarillo facility. The Covenant is enforceable by VCAPCD as a regulation, and will remain in force until the FPA, Imation's title V permit, and the revised VCAPCD SIP become effective.
EMS - Environmental Management System developed and implemented for Imation Camarillo under Part II of this FPA.
FTIR CEMS - Continuous Emission Monitor System (CEMS) Using Extractive Fourier Transform Infrared (FTIR) Spectrometry.
HAPs - Hazardous Air Pollutants listed under Section 112 of the Federal Clean Air Act(a class of air pollutants).
Imation - Imation Corp.
Imation Camarillo - Imation's Data Storage Products facility in Camarillo, California.
MACT - Maximum Achievable Control Technology under Section 112 of the Federal Clean Air Act.
NESHAP - National Emission Standard for Hazardous Air Pollutants under Section 112 of the Federal Clean Air Act.
NOx - Nitrogen Oxides (a class of air pollutants).
NSPS - New Source Performance Standard under Section 111 of the Federal Clean Air Act.
PM - Particulate Matter (a class of air pollutants), as defined by Ventura APCD Regulation I, Rule 2.
Project XL - A USEPA program encouraging new approaches to environmental regulation that promote environmental performance better than that under existing regulations.
ROC - Reactive Organic Compounds (a class of air pollutants) as defined by Ventura APCD Regulation I, Rule 2.
SO2 - Sulfur dioxide (an air pollutant).
TACs - Toxic Air Contaminants under Part Six (commencing with Section 44300) of Air Resources Division of the California Health and Safety Code.
TBACT - Best Available Control Technology for Toxics, as defined by Ventura Air District Regulation II, Rule 37, Section I.
Title V - Title V of the Federal Clean Air Act, requiring federal operating permits.
USEPA - The United States Environmental Protection Agency.
Ventura APCD - The Ventura County Air Pollution Control District.
Ventura APCO - The Ventura County Air Pollution Control Officer.



Appendix 2 - Compliance with Individual NSPS and MACT Standards at Imation Camarillo


Currently, a single coating operation at Imation is subject to an NSPS (40 C.F.R. Part 60, Subpart SSS for magnetic tape coating facilities). The other three coating lines at Imation are not subject to any NSPS. None of the coating operations are currently subject to MACT standards. In the future, Imation may trigger additional NSPS applicability and/or MACT applicability by undertaking modification or reconstruction of existing coating operations, constructing new coating operations, or by elimination of the HAP cap established in their title V permit. Imation would assure compliance with newly triggered NSPS and MACT standards as described below.

Imation's Superior Environmental Performance in part stems from their commitment to totally enclose/capture 100% of VOC and HAP emissions from all coating operations and control captured emissions using a highly efficient solvent recovery unit -SRU- (or other similarly efficient device) demonstrated to achieve at least 95% emission reduction. Their existing total enclosures capture 100% of the emissions from multiple coating operations within the production building and route all the emissions to the SRU. As a result, individual coating operations are not controlled separately but rather contribute to an emissions mixture containing the emissions from all coating operations within the total enclosures. The existing SRU receives the combined emissions from all active coating operations.

Because of Imation's control setup as described above, it is not possible to measure inlet and exit emissions from the control device (and thus control device efficiency) for any one coating operation on an ongoing basis. The VOC (and HAP) emissions from the coating operation subject to Subpart SSS are part of the mixture of emissions including the other VOC/HAP sources. In such situations, Subpart SSS §60.713(b)(2) applies and reads as follows (italics added to emphasize requirements pertinent to Imation's situation):
[Equation 2 at 40 CFR Part 60, Subpart SSS]

The regulation excerpt above [§60.713(b)(2)(i) and (ii)] describes requirements for determining the capture efficiency for VOC emissions from an affected facility under Subpart SSS (i.e., what fraction of emissions makes it to the control device). These requirements apply where there is no total enclosure of emission sources. However, Imation uses a permanent total enclosure to capture emissions and, therefore, §60.713(b)(5) is applicable:

Section 60.713(b)(2) indicates that where the emissions from an affected coating operation and other VOC sources are ducted to a common control device, the owner or operator must determine the emissions capture efficiency for each individual affected coating operation. Where a total enclosure exists around the affected coating operation, such a determination is made alternatively according to §60.713(b)(5). Imation already has demonstrated compliance with this requirement of Subpart SSS for the one subject coating operation by showing that a total enclosure exists around the operation [the enclosure meets the criteria in EPA Method 204 - Criteria for and Verification of a Permanent or Temporary Total Enclosure (Section 5)] and the total enclosure will be maintained continually.

Although Subpart SSS requires determining emissions capture efficiency on an individual affected facility basis, control device efficiency is to be determined for mixed emission streams when "all emission sources" are connected to the device. The owner or operator is not forced to shut down the other VOC emission sources to test the control device efficiency on individual affected facility emissions. Thus, compliance with the required 93% VOC control standard at each SSS affected facility is demonstrated by showing that the common emission control device provides a 95% control efficiency when receiving the mixture of VOC emissions from all SSS affected facilities (housed in a total enclosure) and all other sources of VOC routed to the device. Subpart SSS contains a standard of 93% control of VOC applied at each affected facility. At the time that Subpart SSS was promulgated, the Agency assumed that use of a total enclosure with a 95% efficient control device could yield as low as a 93% level of actual VOC control at the affected facility (because of the possibility that a total enclosure would not actually capture 100% of emissions). The Agency now believes that a total enclosure, meeting the requirements of Method 204, will capture 100% of emissions. Thus, Imation's use of a Method 204 compliant total enclosure around their coating operations in conjunction with a 95% efficient control device will achieve an actual control level of 95% at each affected facility, thereby exceeding the standard as written at Subpart SSS. The implicit assumptions in this method of demonstrating compliance with the VOC emission standard for an individual affected facility in Subpart SSS are:

1) An emission control device will control the same (and similar) chemicals equally, regardless of their point of emission (i.e., control device X controls chemical Y at Z efficiency whether chemical Y is emitted by affected facility 1, 2, 3, etc.);
2) The "other sources of VOC" ducted to the common emission control device likely have chemical constituents that are the same as or similar to those in the emissions from the affected facility (since they are related operations) and, therefore, the control device performance does not vary on individual emission streams;
3) Performance testing the control efficiency of the newly affected facility emissions only (assuming such emissions contain the same or similar chemical constituents as other operations controlled by the common emission control device) is not necessary to assure compliance with the standard at the newly affected facility (instead compliance can be demonstrated with all VOC sources connected to the common control device).

Imation has performance tested the existing SRU and has demonstrated a >99% emission reduction with all VOC and HAP emission sources connected. Monitoring of continuous compliance at the one coating operation currently subject to Subpart SSS is being demonstrated through Imation's maintenance of the total enclosure and use of an FID-CEMS (flame ionization detector-continuous emission monitoring system) to measure VOC concentrations in both inlet and outlet of the SRU, per §60.714(c)(1).

In the future, Imation will become a major source of HAP, thereby triggering applicability of the MACT standard at Subpart EE. Once this occurs, all magnetic tape coating operations at the facility will be subject to the standards at Subpart EE. Much like the NSPS at Subpart SSS, EE allows for the total enclosure of all emission points and the ventilation of the total enclosure(s) to a common control device operating at 95% or higher efficiency. Imation will demonstrate initial compliance with the MACT standard by demonstrating that all HAP-emitting coating operations are totally enclosed, and that the enclosure is vented to the SRU which is operating at a minimum control efficiency of 95% as monitored at the inlet and outlet of the SRU using the FID-CEMS. (see 63.705(c)(4))

Imation anticipates modifying one or more of the existing coating operations not now subject to an NSPS to make them subject to Subpart SSS or constructing a new coating operation that would be subject to Subpart SSS (such operations would also be subject to Part 63, Subpart EE, once Imation is a major source of HAP). Imation will ensure compliance with Subpart SSS and Part 63, Subpart EE for such operations by maintaining the total enclosure around the operation(s) and controlling emissions by at least 95% as monitored at the inlet and outlet of the SRU using the FID-CEMS. Imation also anticipates modifying one or more of the existing coating operations or constructing a new coating operation to produce polymeric coatings on supporting substrates. Such modified or new operation(s) would be subject to part 60 Subpart VVV (Polymeric Coating of Supporting Substrates). Subpart VVV contains standards and compliance provisions that are nearly identical to those in Subpart SSS and Part 63, Subpart EE [see §60.743(a)(1)], including provisions for mixed VOC streams, use of a total enclosure, and a 95% efficient control device. Imation would assure compliance with Subpart VVV through maintaining the total enclosure around the subject coating operation(s) and reducing emissions by at least 95% as monitored at the inlet and outlet of the SRU using the FID-CEMS. Imation's Title V permit will contain the requirements of Part 63, Subpart EE and will include a streamlining analysis demonstrating that compliance with these requirements will assure compliance with Part 60, Subparts SSS and VVV.

In addition to the changes described above, Imation is anticipating modifications or new construction of facilities that potentially would trigger applicability of NSPS in Subparts RR (Pressure Sensitive Tape and Label Coating) and/or TT (Metal Coil Surface Coating). Such changes could create an emission stream from the total enclosure containing a mixture of VOC and HAP from affected facilities subject to the MACT standard and two or more different NSPS, or from affected facilities subject to the MACT standard, different NSPS, and other VOC/HAP sources not subject to any NSPS or MACT. 40 C.F.R. Part 60, Subparts RR and TT, unlike the MACT standard at EE and the NSPS at SSS and VVV, do not specifically address such mixed emission stream situations and how compliance is to be demonstrated for any one affected facility. However, it is reasonable to assume that compliance with the VOC standards by affected facilities subject to these NSPSs can be demonstrated in a manner similar to that for a similar situation under Part 63, Subpart EE and Part 60, Subparts SSS and VVV, by extending the assumptions and rationale described above to these other two NSPS. That is, Imation can demonstrate compliance for an individual affected facility subject to Subparts RR or TT by maintaining a total enclosure around the facility and reducing the captured emissions from this facility and all other sources of VOC and HAP by at least 95% as monitored at the inlet and outlet of the control device using the FID-CEMS. Such a demonstration will be adequate for each affected facility because:

1) The total enclosure captures 100% of VOC/HAP emissions from manufacturing operations. As part of Imation's initial compliance demonstration for the MACT standard, the facility will demonstrate that they have a total enclosure around all coating-related operations that captures all VOC and HAP emissions, and Imation will be required to monitor to assure that such operations remain within a total enclosure;
2) The control device delivers a high enough control efficiency to meet any one of the standards (when combined with the 100% capture of VOC/HAP) and the control device response on an individual or mix of solvents will not vary according to the type of affected facility emitting the solvent. This is a reasonable assumption considering that: (a) the control device already has demonstrated >95% control efficiency and will be required to continue to achieve at least 95% overall reduction continuously (as measured by the FID-CEMS) on the mixed stream (whereas the two potentially applicable NSPS require only 90% VOC reduction), and (b) where the emission streams from the modified or constructed facilities are similar (i.e., the same types of solvents) to those already demonstrated to be controlled by at least 95%, the control device can be expected to deliver the same level of control (see this discussion above for compliance with Subpart SSS); and
3) Emissions of new solvents (not previously tested in the control device) from new or modified operations will be subject to a performance test. Imation will be required to test the control device's performance on operations utilizing new solvents (those that have not been previously tested in the control device) by conducting a performance test whereby the efficiency of the control device is measured when only the equipment utilizing a representative coating containing the new solvent is connected to the device. This test must show that at least 95% control of emissions containing the new solvent is achieved.

The approach of exhausting emission streams from two or more process lines within a total enclosure through a single control device that controls the mixed streams from the lines, and demonstrating compliance with individual process line VOC/HAP control standards by the efficiency of the common control device when receiving such mixed streams appears in 40 CFR Part 63, Subpart EE and Part 60, Subparts SSS and VVV. For this demonstration project, the Agency is extending this approach to two other NSPSs, where there will also be a requirement for 100% capture of VOC (and HAP) from the different process lines. Such extension is technically warranted due to the points described above, including the total capture and >95% control requirements, and the expected consistency of control by the SRU on process solvents regardless of the emitting source. Imation's Title V permit will contain the requirements of Part 63, Subpart EE and will include a streamlining analysis demonstrating that compliance with these requirements will assure compliance with Part 60, Subparts RR and TT.

The proposed compliance demonstration approach is also legally warranted according to the general provisions of 40 C.F.R. Part 63, Subpart A and 40 C.F.R. Part 60, Subpart A. Specifically, the provisions at 40 C.F.R. §63.7(e) and §60.8(b) allow alternative performance testing methods for purposes of compliance demonstration, and a waiver of performance testing where a source has demonstrated by other means to the Administrator's satisfaction that an affected facility is in compliance with the standard. Therefore, the strategy described above to assure compliance with all potentially applicable MACT standards and NSPS will be written in as requirements in Imation's Title V permit, and Region 9 will pursue formal approval of the strategy through OAQPS, which has been delegated the Administrator's authority to approve such alternative testing and monitoring requirements [see further discussion of alternative testing and monitoring at §§63.7(e), 60.8(b), and 60.13(i)].


Appendix 3 - Approach to Expedited Approval of New Control Devices Controlling New Production Capacity

Imation envisions installing new production capacity at some point in the future. It is possible that the emissions from the new equipment would trigger the need for a new control device according to the BACT/TBACT analysis conducted under this XL agreement. In the event that the BACT/TBACT analysis (reviewed and approved by the VCAPCD) indicates the need for a new control device, Imation plans to install such a device. Under this scenario, assume the VOC and HAP emissions from the new equipment (subject to an NSPS and/or MACT, and Imation's title V permit) will have to be reduced by at least 95% as specified in the Final Project Agreement and, of course, would be subject to the overall VOC emissions cap for the facility. Imation considers it key to their business strategy to be able to install the equipment as quickly as possible, preferably avoiding multiple permit revisions and installation delays. The manner in which this is being accomplished under the Imation XL Project is to characterize the new capacity and control device addition as part of an alternate operating scenario in Imation's title V permit.

Possible new control devices for the emissions from the added production equipment include a thermal oxidizer, a catalytic oxidizer or a new carbon adsorption system. The two sections below describe the permit content required to implement the approach described above for a new thermal oxidizer, a new catalytic oxidizer, and a new solvent recovery unit.

With the above conditions established in the title V permit, Imation will be able to install the new coating line(s) and thermal oxidizer without first obtaining approval through a permit revision. The preapproval is based on the judgement that the total enclosure and minimum oxidizer design conditions will easily deliver the required 95 percent VOC destruction.
The approach for approval of a new catalytic oxidizer or a new carbon adsorption system is slightly different from the approach for approving a thermal oxidizer. The strategy to obtain timely approval of the new process and control equipment involves creation of permit terms to characterize and establish certain requirements for the changes, a review by the permitting authority of the control system design and initial operating parameters prior to operation, and a minor permit modification to establish certain monitoring parameter trigger values after the performance test has been conducted. Below the features of the proposed title V permit are described in more detail:
Appendix 4 - Environmental Management System Criteria for Imation Camarillo


A. Environmental Policy. The Imation corporate safety, health, and environmental policy shall be communicated to Imation Camarillo personnel and shall be available to the public by request or via the Internet Imation Homepage http://www.imation.com/.

B. Environmental Aspects. An ongoing procedure shall be in place to identify environmental aspects associated with Imation Camarillo's activities which Imation Camarillo can control. These significant aspects shall be considered in setting Imation Camarillo objectives and targets.

C. Legal and Other Requirements. A procedure shall be in place to identify legal and other requirements applicable to environmental aspects of the organization's activities, products, and services.

D. Objectives and Targets. Documented objectives and targets shall be set by Imation Camarillo personnel to address facility specific significant environmental aspects and overall Imation environmental policies.

E. Environmental Management Program. An environmental management program to achieve the objectives and targets shall be in place. Procedures shall be in place to determine if Imation Camarillo changes might affect Imation Camarillo's ability to meet the objectives and targets, or create significant environmental aspects. Responsibilities shall be defined and time frames for implementing these activities shall be documented.

F. Structure and Responsibility. Environmental management system functions shall be defined, documented, and communicated. Imation Camarillo management shall be committed to providing adequate resources for the effective implementation of the environmental management system. A management representative shall be appointed to ensure that the environmental management system is implemented and maintained.

G. Training, Awareness, and Competence. Environmental training needs shall be defined and training shall be conducted for all personnel whose work could create a significant environmental impact. Roles and responsibilities shall be assigned and procedures shall be in place to assure that employees are aware of the importance of conformance with the environmental management system and how their work activities may impact the environment.
H. Communications. There shall be a documented process for handling and documenting internal and external communications related to environmental performance expectations, responsibilities and concerns.

I. Environmental Management System Documentation. Imation Camarillo shall maintain documentation describing the core elements of the environmental management system, and how these elements interrelate and reference other relevant supporting documents.

J. Document Control. Procedures shall be in place to ensure that documents associated with the environmental management system are available and can be easily located. The environmental management system shall ensure that documents are current, periodically reviewed, revised as necessary, retained for appropriate reasons and length of time, and approved for adequacy by authorized personnel.

K. Operational Control. Procedures shall be in place to determine which Imation Camarillo activities are associated with the significant environmental aspects. Documented procedures shall be established and maintained to adequately control activities which could lead to deviations from the environmental policy or objectives and targets. These procedures shall also address the responsibilities of contractors and suppliers associated with Imation Camarillo's significant environmental aspects and shall be communicated to the appropriate contractors and suppliers.

L. Emergency Preparedness and Response. Written emergency response plans shall be in place to identify, plan for, and properly respond to emergency situations. These plans shall be periodically reviewed, tested, and revised as appropriate.

M. Monitoring and Measurement. Procedures shall be in place to measure and monitor activities that can have a significant environmental impact, including the tracking of environmental performance and overall conformance with Imation Camarillo's objectives and targets. Monitoring equipment calibration and maintenance procedures shall be documented and test results maintained. Procedures shall be in place to assure compliance with environmental regulations, company policies, and other commitments.

N. Non-Conformance, Corrective/Preventive Action. A corrective action plan which defines responsibility for handling, investigating, and correcting of non-conformance including documenting changes to procedures that result from corrective and preventive actions shall be in place.

O. Records. A recordkeeping system shall be in place to identify, maintain, and archive environmental records. Appropriate records shall be maintained to demonstrate conformance with the environmental management system. This system shall include record retention times and ensure that records are legible, identifiable, readily retrievable, and are protected against damage and deterioration.

P. Environmental Management System Audit. A process to periodically audit the environmental management system which addresses the audit scope, frequency, methodologies, responsibilities, and requirements for conducting audits and reporting results shall be in place.

Q. Management Review. Top Imation Camarillo management shall periodically review the environmental management system to ensure its continuing suitability, adequacy, and effectiveness. These documented reviews shall cover environmental management system audit results and consider the need for changes to the policy, objectives, and other elements of the environmental management system.

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