Baltimore Development Corporation

Proposed XL Regulatory Incentives

PROPOSAL FOR PROJECT XL REGULATORY INCENTIVES FOR THE DEVELOPMENT OF THE FAIRFIELD ECOLOGICAL-INDUSTRIAL PARK

DRAFT 1 -- OCTOBER 31, 1996

This document presents preliminary facts sheets that outline potential options for regulatory incentives, under EPA's Project XL for Communities program, that may enhance the development of the Fairfield Ecological-Industrial Park ("EIP" or "Eco-Park") in a manner consistent with the environmental, economic and community goals for the project. The potential "Regulatory Incentives" would be provided to the Eco-Park by EPA, the Maryland Department of Environment ("MDE") and other government agencies in exchange for performance-based commitments for superior environmental protection.

Baltimore Development Corporation emphasizes that the attached fact sheets represent preliminary, draft proposals that have not received comprehensive legal or regulatory analysis, or stakeholder discussion. Moreover, this does not represent a complete list of options, but instead presents initial ideas for further development. BDC is not requesting any specific regulatory relief at this time. Substantial discussion and technical analyses by present and potential Eco-Park tenants and other stakeholders will be necessary before the project is sufficiently defined to determine the type and scope of regulatory flexibility to be formally requested in a Final Project Agreement for Project XL.

The purposes of the fact sheets are to:

Stimulate discussion among EIP stakeholders regarding the value of these incentives, and encourage suggestions for other potential regulatory incentives to be proposed under the XL process;
Promote agreement on the criteria for judging potential regulatory incentives, determine which incentives are the highest priority, and establish the process for further development of priority proposals; and
Enable the Baltimore Development Corporation ("BDC"), through discussions with the business, community, government and environmental stakeholders involved in the XL project, to further develop priority proposals for presentation at the November XL stakeholders meeting.

THE EIP PROCESS: LONG-TERM GOALS ACHIEVED STEP-BY-STEP

The Baltimore Development Corporation encourages stakeholders involved in review of this document to consider the EIP development process as a phased process; every goal can not be accomplished in the short term. The development of a Project XL "Final Project Agreement" should therefore be designed to: (a) establish the overall framework for activity; (b) identify short-term activities for implementation; and (c) create an open and functioning process for the implementation of new activities and experimentation as the EIP develops over time. In this way, EIP participants can begin XL implementation activities in the short-term, learn from and build upon successes, and be able to access XL incentives in the future as needs for these incentives arise.

In fact, BDC intends the XL Final Project Agreement to incorporate a phased approach for the application of regulatory incentives to the Eco-Park, so that additional incentives and activities can be established as the process develops and additional participants become involved. This approach envisions ten (10) areas for potential regulatory incentives to be utilized in the Eco-Park under Project XL. BDC suggests the following phases for the implementation of Project XL initiatives at the Eco-Park:

Phase I - PREPARING THE ECO-PARK FOR SUSTAINABLE DEVELOPMENT

(1) Brownfields Testbed Strategies

(2) Superior Stormwater Management

(3) Fairfield Homes Reclamation and Asbestos Abatement Flexibility

(4) Baltimore/MDE/EPA Regulatory Partnership

Phase II - FOSTERING BEYOND COMPLIANCE INDUSTRIAL PRACTICES

(5) Linking Regulation to ISO 14000 Environmental Management Standards

(6) Industrial Materials Exchange

(7) Energy Cooperation and Efficiency

Phase III - RESTRUCTURING THE ENVIRONMENTAL FRAMEWORK FOR RESULTS

(8) Permitting for Results

(9) Air Emissions Crediting and Innovative Monitoring Technology

(10) Wastewater Treatment Cooperation

FRAMEWORK OF EIP PROPOSAL

The establishment of an Ecological-Industrial Park and the use of EPA's Project XL for Communities program takes Baltimore into uncharted territory. However, the stakeholders involved in the Eco-Park effort are guided by the principles that:

The EIP can simultaneously promote economic, environmental and community goals;
The process must be built upon multi-stakeholder input and cooperation; and
The establishment of the EIP is a long-term project requiring incremental progress, built upon the foundation being established now through the Empowerment Zone, Project XL and city planning processes.

Proposed Guiding Criteria: The Baltimore Development Corporation asks that you review the ten regulatory proposals by the following guiding criteria. These criteria are intended to be consistent with established Project XL criteria and the criteria specified by EPA Region III and the Maryland Department of Environment for the Baltimore XL process:

Proposals will promote superior environmental results than those which would be achieved absent Project XL incentives. These environmental results will be used as a building block for sustainable economic development.

Superior environmental results include enforceable, performance-based commitments expected to produce less environmental impact than actual current or expected future impact. In addition, because the EIP development process envisions expanded economic activity, superior environmental results can include future environmental impact that is less than the impact that would otherwise be expected absent the incentives of Project XL. Superior environmental results can include indirect benefits created by the reinvestment of resources created through a decrease in regulatory burden and cost in another environmental area (as long as no environmental medium is degraded).

Proposals will foster cost-saving, revenue-enhancing "beyond compliance" environmental activities by existing EIP tenants designed to promote economic gain while protecting environmental quality.
Proposals will facilitate increased opportunity for citizen participation in environmental decision-making in the Eco-Park. This will include clear guidelines for the measurement, evaluation and reporting of environmental results from XL activities.
Proposals will foster the recruitment of new industrial and commercial facilities, and the application of new resources and technologies, for the EIP.
Proposals will foster the long-term development of industrial ecology practices and learning in the EIP.
Proposals will assist in the establishment of an improved regulatory partnership among the City of Baltimore, the Maryland Department of Environment, and the U.S. Environmental Protection Agency that will allow flexibility, cooperation, innovation and the application of government resources to the EIP pilot project.

PROPOSAL 1 -- BROWNFIELDS TESTBED STRATEGIES

Objective: Facilitate the expedited assessment, remediation and redevelopment of EIP brownfield sites through broad liability clarifications and protections, devotion of EPA Technology Innovation Office ("TIO") resources to Eco-Park, assistance in obtaining federal funding for site characterization, and the establishment of the Eco-Park as a testbed for innovative assessment and remediation technologies.

Eco-Park Needs: The expedited assessment and remediation of EIP sites requires the simultaneous application of a number of policy, technology and financing tools:

Technical assistance in the assessment of EIP sites, including application of new EPA TIO tools to Eco-Park;
Liability clarifications for prospective purchasers and lenders and creative proposals to cooperatively address certain liabilities in order to provide some measure of liability protection for existing owners and municipality to facilitate assessment and remediation,;
Assistance in accessing and using federal funding, including HUD, SBA and Empowerment Zone funds, for the assessment and remediation of brownfield sites;
Protections from risks in use of innovative environmental technologies at EIP sites.

Potential Options for Regulatory Incentives:

BDC intends for all regulatory incentives for EIP brownfields renewal to be consistent with EPA and state brownfields policies, in order to ensure the protection of public health and the environment. However, Project XL incentives in this area can facilitate EIP development by expediting the use of these brownfields policies, allowing the policies to be applied to multiple parcels of the Eco-Park in an umbrella fashion, or encouraging innovative approaches to brownfields redevelopment.

Use of brownfields liability clarifications and protections in an expedited, umbrella fashion for the patchwork of privately-owned, municipally-owned and orphaned sites within EIP boundaries:

Full MDE authority, memorialized in Memorandum of Agreement with EPA, for liability clarification at EIP. This would allow issuance of EPA/MDE "comfort letter" for entire (or large portions) of EIP indicating no federal or state interest in sites.

Expedited issuance of MDE "no further action" letters for all sites to be developed in Eco-Park, backed by EPA deferral to MDE. All procedures for the protection of human health and environmental will be followed in the issuance of no further action letters, including appropriate assessment and remediation of contamination.

Creative forms of addressing potential liability for current owners of Eco-Park sites who allow Park-wide assessment of site contamination (e.g., satellite assessment). This could include arrangements among BDC, MDE and involved private parties designed to limit, or cooperatively address, liability for those landowners who allow assessment of EIP sites. For example, this liability protection could be backed by a pledge by the municipality or some other entity to provide appropriate guarantees that necessary remediation will be performed if contamination is discovered.
Technical assistance from EPA Office of Solid Waste, including TIO, for application of innovative assessment and remediation technologies to EIP. Facilitation of partnerships with corporations seeking testbeds for technology demonstration. Liability protections for technology experimentation (i.e., no federal/state liability for technology company or site owner in case technology fails to discover or remediate contamination). Expedited MDE certification (such as less sampling requirements) of "no further action" when verified technology is utilized at site. This liability protection could be backed by a pledge by the municipality or some other entity to provide appropriate guarantees that necessary remediation will be performed.
Commitment from Administration to convene interagency (EPA, HUD, SBA, EDA, DOT, NSF, NIST) dialogue on use of federal funds for EIP assessment, remediation and redevelopment.
Federal activities designed to promote EIP as testbed for brownfield technologies (e.g., announcement in newsletters, press releases, meetings).

Expected Benefits: The incentives provided above should produce all of the environmental, economic and community benefits identified in EPA's Brownfields Action Agenda, including:

Environmental and community benefit: Assessment and characterization of unknown contaminants in EIP soil and groundwater;
Environmental and economic benefit: Expedited remediation of contamination through new availability of financing and technology tools;
Environmental and community benefit: Encouragement to existing and prospective owners to responsibly remediate contaminated sites; and
Economic and community benefit: Expedited economic development and jobs-creation due to redevelopment of otherwise dormant sites.

Expected Implementation Priority: The assessment and remediation of potential EIP contamination is an essential first step for further development, and therefore a top priority for Project XL action.

PROPOSAL 2 -- SUPERIOR STORMWATER MANAGEMENT

Objective: Establish opportunities for BDC and Eco-Park facilities to implement environmentally superior stormwater management practices that reduce pollution, decrease burdens on individual facilities and enhance the aesthetic appeal of the Fairfield area.

Eco-Park Needs: HOH Associates (the EIP Master Planner) has identified unsatisfactory performance of existing stormwater facilities as "one of the most critical issues in Fairfield." In fact, the City of Baltimore has issued a temporary hold on permits for work on properties in the EIP until drainage deficiencies are corrected, and until interim corrective action measures are coordinated with both future needs of the proposed development and the implications of using a regional stormwater management approach.

As a result, BDC is developing a stormwater collection and management strategy designed to address these issues. Some of the stormwater management approaches BDC is examining include:

Regional stormwater management ponds; constructed wetlands; use of structures to control debris; use of oil separators to prevent oil from entering the ponds; and implementation of Best Management Practices such as trenches, swales, porous pavement designs, and vegetated filter strips.

Options for Potential Regulatory Incentives:

Superior water quality protection can potentially be achieved through the use of vegetated ponds, constructed wetlands and coordinated, regional stormwater facilities. These environmental protection practices can reduce "nonpoint source" pollution runoff from industrial processes, construction, erosion, parking lots and non-porous surfaces and other activities. In exchange for superior water quality results, the Eco-Park could obtain regulatory relief including less restrictive permits for point sources in the Eco-Park; the banking of "effluent credits"from stormwater management practices in exchange for otherwise required activities at the publicly-owned treatment works; expedited stormwater permits for new construction or new businesses; and reduced stormwater monitoring requirements.

Under Maryland's Critical Areas Law, BDC may have to create constructed wetlands to replace any that are destroyed during construction. If BDC constructs wetlands for stormwater management purposes in the EIP, it may be able to create more wetlands than required by the Critical Area Law requirements. Under Project XL, BDC proposes to "bank" the wetlands established beyond the amount required by regulation, which could be used at other locations or for future expansion at the Eco-Park.
Baltimore requests technical and funding assistance from the Environmental Protection Agency for the implementation of constructed wetlands projects, as the EPA has given to other localities (e.g., City of Phoenix) through programs like the Environmental Technology Initiative.
Maryland has a new forestry law which requires the planting of new trees when existing trees are destroyed. As part of its stormwater management activities, BDC could plant trees near vegetation ponds or greenways in the Eco-Park in numbers beyond that required by the state replacement regulations.. Again, BDC proposes to receive "banked" credits for the additional trees planted, for use in offsetting trees that are removed in the future because of other EIP development activities.
[Note to BDC and EIP facilities: There may be opportunity for regulatory relief to be granted to EIP tenants for requirements of individual stormwater discharge permits. However, such flexibility cannot be determined without a review of the detailed components of individual permits. Therefore, EIP facilities should convey to BDC those aspects of individual stormwater permits that could be made more flexible -- and less costly -- in exchange for other efforts that produce superior environmental results. For example:

If most EIP tenants currently utilize "individual permits" pursuant to NPDES Forms 1 and 2F, there may be an opportunity to reduce costs and burdens through the submission of a "general NPDES permit."

BDC could propose that NPDES regulations be restructured to allow the submission of a "group permit application," which would allow facilities of like type with similar stormwater discharges to form groups for the purpose of collecting permit application data. In fact, only 10 percent of the group members would need to submit quantitative data in the permit application. However, the use of "group permit applications" has been unavailable for several years, and would have to be utilized through the regulatory flexibility mechanisms of Project XL.]

Expected Benefits:

Environmental and Community benefits: Improved water quality resulting from increased control of nonpoint pollution; construction of additional wetlands; preservation of open space; and planting of new trees and other aesthetic/environmental improvements.
Economic benefits: Less restrictive permits for point sources in the Eco-Park; expedited stormwater permits for new construction and new businesses; reduced stormwater monitoring requirements; and the banking of wetlands and trees for future projects.

Expected Implementation Priority: The City of Baltimore has obtained substantial funding for the implementation of stormwater management practices in the "Old Fairfield" area of the EIP. Therefore, Baltimore seeks to implement innovative management practices -- and associated regulatory incentives -- within 1997.

PROPOSAL 3 -- FAIRFIELD HOMES RECLAMATION AND ASBESTOS ABATEMENT FLEXIBILITY

Objective: Allow the debris from the removal of the Fairfield Homes to be reclaimed for beneficial future re-use at a cost and time that is equal to, or below, the cost and time of simply demolishing the homes and throwing away the debris. Establish process that would allow flexibility in the abatement of asbestos in the buildings, while safeguarding health, safety and the environment.

Eco-Park Needs: The abandoned Fairfield Homes, which are a symbol of the problems in Fairfield and the historic inability to promote sustainable economic development in the area, must be removed. Removal of the Fairfield Homes will both demonstrate the City of Baltimore's commitment to Fairfield development, and prepare a prime piece of developable land for potential new industrial and commercial business recruitment. Toward that end, the City needs the following conditions to make the removal of the Fairfield Homes a genuine success:

Quick removal, with a minimum of unnecessary, bureaucratic hurdles;
Regulatory incentives designed to make reclamation of the demolition debris for future beneficial reuse as cost-effective and expedited as simply throwing away the debris; and
Regulatory incentives designed to make the removal as cost-effective as possible, so that City resources can be directed to meeting local community and environmental priorities.

Options for Potential Regulatory Incentives:

Removal of RCRA Barrier to Reclamation Due to Lead: The materials in the Fairfield Homes contain lead. Currently, federal and state RCRA regulations may provide a disincentive for reclamation of the materials and instead encourage disposal. Reclamation of the materials may increase the concentration of the lead and thereby trigger stringent requirements under Subpart C of the Resource Conservation and Recovery Act -- while simple disposal would not trigger the Subpart C controls. [Note to BDC -- is this really true? Spiegel & McDiarmid is operating on information given to us by BDC, without the benefit of technical reports on the Fairfield Homes removal.]

BDC proposes to remove this disincentive to reclamation by employing the regulatory provision at 40 CFR '261.3(f), which allows the EPA Regional Administrator to determine on a case-by-case basis that debris should not be considered a "hazardous waste" and thereby subject to Subpart C requirements. In the alternative, the EPA Administrator may determine on a case-by-case basis that recycled materials are not solid wastes under 40 CFR ' 260.30. Or, the lead debris from the Fairfield Homes could be exempted from RCRA Subpart C strictures if the City certifies that the debris meets the "exit levels" specified under the proposed Hazardous Waste Identification Rule.

Establishment of regulatory panel that would consider and approve City of Baltimore requests for flexibility in the abatement of asbestos from the Fairfield Homes. The City and its asbestos abatement contractor wish to determine whether methods and technologies -- other than those specified in applicable regulations -- can be cost-effectively used to abate asbestos-containing materials in these abandoned buildings, while ensuring equal or better protection of worker safety, public health and the environment. Consideration of such methods could be reviewed and approved by a multi-stakeholder panel of appropriate representatives to ensure conformity with the environmental, safety and economic objectives of the project. Funds saved through the alternative abatement of the Fairfield Homes could be redirected into local environmental priorities identified by the Fairpoint Board.

Expected Benefits:

Community and Economic benefit: Quicker removal of Fairfield Homes and preparation of prime development site;
Environmental benefit: Reclamation and reuse -- rather than disposal -- of substantial amount [insert quantity if know] of building materials;
Economic benefit: Monetary benefit to City from sale of reclaimed materials; and
Environmental benefit: Costs saved through reduction of administrative burdens in asbestos abatement are redirected into local community environmental priorities.

Expected Implementation Priority: As explained above, the success of the EIP process depends substantially on the rapid removal of the Fairfield Homes, thus making regulatory incentives under this area a top priority.

PROPOSAL 4 -- BALTIMORE/EPA/MDE REGULATORY PARTNERSHIP

Objective: Establishment of regulatory partnership among Baltimore authorities, MDE and EPA that will allow Eco-Park coordination over long-term, increase EIP opportunities for technical assistance and promote national visibility for Eco-Park.

Eco-Park Needs: Project XL is the Administration's flagship effort to "reinvent environmental regulations." As such, the program should be implemented in a way that promotes new forms of interagency cooperation, public/private partnership, and the integration of federal policies and programs with the sustainable development initiatives of local communities like Baltimore. Toward that end, Baltimore calls upon the federal government to think creatively about how it can meet Baltimore's needs in the creation of the Eco-Park, including:

Coordination of policies, funding and requirements among agencies including EPA, the Department of Energy, Housing and Urban Development, the Department of Commerce, the Department of Education, the Department of Transportation and other appropriate agencies;
Identification of technical assistance and grant funding available for Eco-Park development; and
Federal efforts to promote national recognition and visibility for the EIP project.

Options for Potential Regulatory Incentives:

Establishment of a senior-level, single official who is designated to coordinate interagency activities with respect to the Eco-Industrial Park. Likewise, single points of contact should be established for the Eco-Park effort at EPA, DOE, HUD, Commerce, DOT and Education. The interagency coordinator should be at the White House level, perhaps located in the President's Council on Sustainable Development or Community Empowerment Board. This "EIP Task Force" coordinator and the agency contacts will meet regularly to discuss Eco-Park needs and priorities;
Establishment of a pilot project under which EPA voluntary "green" programs (e.g., Energy Star, 33/50) and DOE voluntary industrial programs (e.g., Climate Wise, Motor Challenge) are packaged together and launched in partnership with the City of Baltimore in the EIP, with the objective of achieving and tracking specific goals for participation, environmental improvement and economic benefit;
Identification by interagency EIP Task Force of potential ways in which the federal government can facilitate the establishment of an "Eco-Manufacturing and Technology Research Center" in the EIP;
Identification by interagency EIP Task Force of potential technical assistance and grant funding available for environmental and economic projects within EIP; and
Organization of a briefing for senior Administration officials designed to inform these decision-makers on plans, needs and opportunities of Eco-Park, build support for EIP and enhance national reputation of EIP project.

Expected Benefits:

Community benefit: Establishment of federal "one-stop-shop" for Eco-Park interaction with government, thereby eliminating overlap and bureaucracy;
Environmental, Economic and Community benefit: Enhancement of EIP success through potential additional resources, technical and financial assistance, and increased visibility of EIP activities; and
Benefit to Democracy: Demonstration of critical federal role in assisting long-term, technically challenging local government efforts.

Expected Implementation Priority: The potential for federal assistance and incentives for the enhancement of the Baltimore Eco-Park project is the reason Baltimore's application was filed with the EPA, and a critical component of success. Consistent with EPA's determination that XL for Communities is meant to foster new forms of regulatory partnership, Baltimore's requests under Proposal 4 are a top priority.

PROPOSAL 5 -- LINKING ENVIRONMENTAL REGULATION TO ISO 14000 ENVIRONMENTAL MANAGEMENT STANDARDS

Objective: Provide assistance to Eco-Park facilities in the establishment of comprehensive ISO 14000, business mentoring and community/employee involvement programs that will both enhance environmental and economic goals and reduce regulatory burdens.

Eco-Park Needs: New tools for environmental management can produce simultaneous environmental and economic benefits for EIP facilities, and help develop industrial ecology practices among these facilities. In particular, the newly developed ISO 14000 standards are expected to promote a voluntary, consensus approach to controlling environmental impacts, in which industry becomes more self-regulating and less dependent on the "command-and-control" approach of the currently regulatory framework.

The Chemical Industry Council of Maryland ("CIC") is exploring how ISO 14000 can be put to use by member chemical companies. Likewise, the CIC has established "community advisory panels" for better citizen involvement in environmental decision-making, and an "Industrial Pollution Prevention Mentoring Program," through which chemical facilities can share knowledge and assist smaller companies in improving performance.

Success in establishing on-going, comprehensive environmental management programs in the EIP requires the following types of assistance:

Technical assistance to the CIC and its members for understanding and establishing ISO 14000 practices;
Opportunities for tying federal regulatory relief to those companies with mature ISO 14000 programs;
Recognition and rewards to those facilities which implement successful environmental, mentoring and community programs, in order to provide competitive advantage and reputation for leading companies.

Options for Potential Regulatory Incentives: Regulatory incentives for EIP facilities in this area would be based upon the EPA's Environmental Leadership Program ("ELP"), which is expected to launch a new initiative in 1997 to provide regulatory relief to facilities that implement successful ISO 14000 and community outreach programs. Under Project XL, incentives to be granted to the EIP under the ELP model could include:

EPA commitment to convene meetings/conferences between CIC and officials at the EPA Environmental Leadership Program to explain opportunities for technical assistance and regulatory relief for businesses which implement ISO 14000.
Companies in EIP which (a) implement ISO 14000 systems; (b) compile and make public annual environmental performance reports; and (c) participate in environmental auditing activities, will be afforded regulatory relief for six-year, renewable periods, including:
- Fewer facility inspections;
- Reduced reporting;
- Expedited permitting;
- permits that must be renewed less frequently; and streamlined permit modification procedures.
Companies in EIP which undergo environmental audit by EPA-certified auditors, disclose audit results and commit to remedy any problems will have reduced or eliminated EPA and state inspections.
Eco-Park companies which implement environmental management and community outreach programs under this framework will be announced and promoted through EPA newsletters, press releases and other tools for public recognition.

Expected Benefits:

Environmental benefits: ISO 14000 can promote continuous environmental improvement, pollution prevention, life-cycle analysis of products and better management of electricity, water and other resources. Companies with ISO systems are better able to go beyond compliance with environmental regulations and pro-actively manage environmental impacts. ISO standards can also help identify and avoid potential environmental problems early in the production process.
Economic benefits: ISO 14000 (particularly when coupled with federal regulatory incentives) can reduce regulatory costs and overlapping requirements, reduce legal liability, reduce environmental management costs, reduce insurance premiums, increase access to funding, improve shareholder relations and generally increase the competitive advantage of participating companies.
Environmental benefit: Implementation of ISO programs by EIP facilities will facilitate long-term development of closed-loop, industrial ecology principles.
Community benefits: Community outreach and ISO practices will provide better, more usable environmental information to the public, and involve community stakeholders in environmental management and evaluation.
Economic benefit: CIC business mentoring programs can promote the use of better, cheaper practices and technologies by small- and medium-sized businesses in the EIP and Baltimore area.

Expected Implementation Priority: BDC and the Chemical Industry Council are interested in meeting with EPA Environmental Leadership Program officials to discuss ISO 14000 opportunities as soon as possible. As the ELP ISO program is launched in early 1997 and Eco-Park facilities implement ISO 14000 management programs, these facilities would seek to become early participants in the ELP program.

PROPOSAL 6 -- INDUSTRIAL MATERIALS EXCHANGE

Objective: Structure federal and state hazardous waste regulations to foster waste minimization and allow the recycling and reuse of industrial wastes as material inputs. Establish the EIP information infrastructure necessary to implement materials exchange.

Eco-Park Needs: The establishment of a functional system for industrial materials exchange requires the following:

Identification of existing/expected materials outputs and material needs of EIP tenants;
Establishment of computer-based information infrastructure necessary for cooperative management, exchange, joint use and sale of industrial wastes in EIP. Such an infrastructure could be jointly management by the Chemical Industry Council of Maryland, the South Baltimore Industrial Mutual Aid Program, and the Northeast Waste Exchange;
Identification and potential establishment of innovative waste conversion and recycling facilities and technologies in the Eco-Park; [MJPIII -- make sure you are okay with this one] and
Regulatory flexibility for identification, transport, treatment and reuse of industrial hazardous materials.

Options for Potential Regulatory Incentives:

When EIP industrial hazardous and non-hazardous wastes are treated, recycled, stored, or transported for the purpose of beneficial reuse, the facilities participating in such waste management can utilize the following elements of regulatory flexibility under the Resource Conservation and Recovery Act and its analogous state regulations:

Expedited application of "transfer-based" and "in-commerce" exceptions to RCRA requirements for those wastes produced at the Eco-Park which are intended to be recycled or re-used. These RCRA exceptions are expected to be proposed by EPA in 1997. BDC and EIP members request that: (1) EPA Office of Solid Waste officials meet with EIP members to discuss the potential opportunities for waste reuse and recycling under the proposed exceptions; (2) the EPA apply the proposed rule in an expedited, pilot fashion to the EIP; and (3) that the EPA and EIP members discuss whether certain constraints in the proposed exceptions (e.g., limits on accumulating materials; distinction between on-site and off-site recycling) would hinder industrial materials exchange in the Eco-Park.
Application of the proposed RCRA "Hazardous Waste Identification Rule" or "HWIR" rule to industrial facilities within EIP boundaries. HWIR would allow the exemption of RCRA-listed hazardous wastes, which are mixed with non-hazardous waste or derived from the treatment of listed wastes, from the stringent requirements of RCRA Subpart C when the waste generator self-certifies that the hazardous constituents of the wastes meet pre-defined "exit levels." [N.B. -- See HADCO, Inc. Project XL proposal, which would allow RCRA-listed and characteristic waste to go to recycling facilities rather than Subtitle C facilities.]
Definition change of "contingent site" in RCRA regulations to allow entire Eco-Park property to be considered a contingent site for the purposes of waste management, thereby removing stringent Subpart C requirements for transport between non-contiguous sites. [N.B. -- See New York Department of Conservation XL proposal, which asks for change of "contingent site" definition among utility properties connected by right-of-ways.] Expanding the definition of "contingent site" to encompass the entire Eco-Park will encourage small and exempt generators of hazardous waste -- who because of their small output of wastes might be permitted to dispose of such waste untreated --to aggregate wastes for treatment in a centralized EIP facility.
EPA-sponsored research agenda on industrial ecology practices, including critical technologies, product substitutions and development of waste markets. To be conducted jointly by Maryland academic institutions and federal partners.
Flexibility under RCRA Subpart C pre-transport storage requirements to allow waste storage for more than 90 days if such storage appropriately facilitates the treatment or recycling of such wastes for beneficial reuse. Wastes stored for such purposes could be stored for up to 180 days.
Elimination of RCRA manifesting requirements and replacement with DOT bills of lading and Safety-Kleen style information management system. [This flexibility depends upon the success of the Safety-Kleen XL proposal in Illinois, and the willingness of S-K, which operates in Baltimore, to establish the information management system in the Eco-Park.]
Elimination of redundant waste analysis requirements for materials treated at TSD or recycling facilities. [N.B. -- This incentive depends heavily on needs of EIP tenants, and their beliefs regarding which waste analysis requirements are redundant. Based on Union Carbide Project XL proposal.]
[Note: EIP businesses should also explore whether certain variance provisions under RCRA regulations could be used to facilitate the recycling and beneficial reuse of solid wastes. For example, 40 CFR '' 260.30 and 260.31 allow the EPA to determine that "recycled materials are not solid wastes" if the materials are reclaimed and then reused within the original production process; if the materials are reclaimed but must be reclaimed further before the materials are completely recovered; or if the materials are being accumulated for future recycling. Assess, e.g., whether a broader definition of the term "original production process" that encompasses the processes of several facilities within the EIP could facilitate industrial materials exchange. Also, do the definitions of "reclaimed," "recycled" and "reused," and the requirements for storing potentially recyclable materials, discourage industrial exchange and reuse?]

Expected Benefits:

Environmental and economic benefit: Facilitation of industrial ecology and beneficial reuse of hazardous materials, thus reducing disposal of wastes from and raw resources needed for industrial processes.
Environmental and economic benefit: HWIR flexibility, by providing an opportunity for a more self-implementing, rapid exemption from Subpart C requirements, will create incentives for innovative waste minimization and waste treatment, and will reduce unnecessary demand for Subpart C disposal capacity, without compromising needed environmental protection. HWIR should also give incentive for the development and use of innovative treatment technologies to render wastes less risky.
Environmental and economic benefit: Removal of "contingent site" restrictions will encourage innovative treatment and recycling of EIP hazardous wastes. Likewise, small quantity and conditionally exempt generators of hazardous waste in the EIP will be encouraged to aggregate wastes with other Eco-Park waste for disposal, rather than dispose of such wastes on an individual basis. For example, hazardous waste from conditionally exempt generators -- which would otherwise be unregulated and could be disposed of untreated -- would be treated or recycled under this scenario.
Environmental and economic benefit: RCRA manifest streamlining will encourage increased participation by EIP tenants in waste tracking activities. In addition, replacement of waste manifests with a system under which the commercial waste handler incorporates waste tracking into the customer service process, should have the effect of internalizing costs of pollution handling to the waste generator, thereby encouraging pollution prevention.

Expected Implementation Priority: The establishment of an industrial waste and materials exchange for the tenants of the Eco-Park is a critical component of the EIP's vision of a closed-loop, industrial ecology system. Therefore, BDC believes that the application of regulatory incentives and flexibility to the EIP designed to foster industrial materials exchange is a top priority. However, the specific regulatory flexibility granted under Project XL will depend upon the specific wastes and materials to be exchanged. Because these potential waste exchanges need to be identified over time, implementation of this aspect of the Eco-Park is expected to be a long-term process.

PROPOSAL 7 -- ENERGY COOPERATION AND EFFICIENCY

Objective: Establish cooperative arrangements and regulatory incentives at Eco-Park designed to promote environmentally-preferable, cost-effective energy use by facilities.

Eco-Park Needs: The acquisition and use of energy is undoubtedly one of the key factors in both the economic viability and environmental impact of industrial and commercial activities. The development of the Fairfield Eco-Industrial Park provides an excellent opportunity to establish cooperative arrangements and regulatory incentives designed to lower the cost of energy resources for EIP facilities, while promoting both the efficient use of energy and the use of cleaner sources of power. A successful strategy will require:

An EIP strategy designed to take advantage of competitive energy opportunities provided by the deregulation of the electric and gas utility industries;
Cooperative arrangements designed to promote the shared use of energy and energy efficiency tools by EIP facilities;
Access to and incentives for the use of renewable and other cleaner sources of energy;
Technical assistance and regulatory incentives designed to provide rewards for environmentally-preferable energy strategies; and
A willingness by the Administration to provide regulatory flexibility and incentives from federal agencies, other than just the Environmental Protection Agency, through the White House's Project XL initiative.

Options for Potential Regulatory Incentives:

Technical and grant assistance from EPA and the Department of Energy for the performance of comprehensive energy audits for all facilities in the Eco-Park. These audits will determine opportunities for energy savings, and establish an Eco-Park baseline for energy use and improvements.
Issuance of Clean Air Act emission allowances (derived from EPA reserve pool of allowances) to the EIP (and/or individual facilities) for the implementation of energy and industrial efficiency practices which reduce power usage and thereby decrease pollution associated with the generation of energy.
Assistance by Administration in the development of options for cost-saving bulk power and natural gas purchases by an umbrella EIP entity on behalf of its tenants.
Use of Clean Air Act emissions allowances or other resource incentives to be allocated to EIP bulk power purchaser when a specified percentage of power that is purchased is from renewable sources or other cleaner forms of energy. Allowances and other financial incentives for the purchase of "greener" power can promote cost equity of such power with coal-fired and other less environmentally-preferable sources of energy. This concept, called stratified energy purchase, would allow the allocation of valuable emission allowances -- at the point of purchase -- to those who choose cleaner forms of energy.
Technical and grant assistance from the Department of Energy and the Morgantown Energy Technology Center for the possible creation of a photovoltaic solar generating station in the Eco-Park.
Technical assistance from DOE and EPA on emerging new pollution control and electric transmission/distribution technologies for potential use in EIP.

Expected Benefits: The environmental and economic benefits from the use of energy efficiency and renewable energy tools are clear, and will provide clear advantages for the EIP and its tenants, such as:

Economic benefit: More cost-effective sources of energy will increase economic returns for existing tenants and help attract new facilities to the Park;
Environmental benefits: Cooperative energy efficiency and co-generation activities will decrease the pollution associated with the use of energy as well as lower peak demand on the electric system;
Environmental benefits: Increased utilization of renewable energy sources will both reduce pollution and boost the regional and national markets for greener power sources; and
Community benefits: A cooperative approach to the implementation of energy efficiency and renewable energy activities will foster increased participation by EIP entities, particularly small businesses.

Expected Implementation Priority: The development of cooperative arrangements for the implementation of energy audits and co-generation can begin immediately. BDC and the Eco-Park tenants wish to commence discussions regarding the long-term development of cleaner generation sources, and bulk power purchases, in the Eco-Park.

PROPOSAL 8 -- PERMITTING FOR RESULTS: IMPROVING THE PERMIT PROCESS TO REDUCE BURDENS, IMPROVE ACCESS AND FOSTER MULTI-MEDIA PROTECTION

Objectives: To establish a mechanism under which the Maryland Department of Environment can issue consolidated, multi-media permits to EIP facilities. These permits will be designed to reduce administrative burden, promote community access to environmental information and encourage innovative environmental management approaches. Over a phased period, MDE would issue consolidated permits to existing and future EIP tenants. Long-term objective is to develop the learning, and obtain the government support, necessary for consolidated "bubble" permits covering multiple facilities within EIP.

Eco-Park Needs: A key component of regulatory reinvention is the establishment of "one-stop-shop" permitting procedures. In fact, several Project XL for Facilities program (e.g., Intel, Berry Juice) involve the use of consolidated, multi-media permits. Eco-Park facilities -- existing and future -- can gain substantial benefit and better protect the environment with such permitting techniques. Moreover, the implementation of closed-loop industrial ecology in the EIP likely requires substantial changes in the permitting process.

Experience in the Project XL program indicates that the negotiation of consolidated, multi-media permits is a long, time-intensive process. The development of permit reforms for individual EIP facilities will likewise require detailed negotiations. Indeed, success in this "permitting for results" area depends upon strong commitments by current EIP tenants to devote the time and resources necessary to design and implement such permit revisions -- and obtain the benefits from doing so. Moreover, successful efforts by current EIP tenants will enhance BDC's ability to use the tool of permit flexibility for the recruitment of additional EIP tenants. Therefore, the BDC strongly supports the establishment of a framework for the development of permit reforms in the Eco-Park.

Options for Potential Regulatory Incentives:

MDE Authority to Issue Consolidated Permits -- EPA grant of authority to Maryland Department of Environment to issue consolidated, multi-media permits to Eco-Park facilities. This grant of authority would be modeled after EPA attempt under Project XL to grant authority to the Minnesota Pollution Control Agency for future issuance of multi-media permits (except Baltimore would learn from the mistakes in the Minnesota process.)
Operational Permit Flexibility -- MDE-issued permits would specifically allow operational changes at facilities to be pre-approved, without the need for Clean Air Act Title V permit modifications. Under such flexible Title V permits, a facility that establishes a plantwide emissions cap for criteria air pollutants could make operational changes, and vary emissions from individual emissions points, without the need for permit modification -- as long as the change complies with the plantwide emission cap.
EPA Regulatory, Technical and Information Assistance -- EPA technical and regulatory assistance is essential for the development of the complex, technically-challenging Eco-Park project. This assistance can include:
- Assignment of technical and policy staff to guide Eco-Park efforts and the development of implementation tools for permit reforms;
- EPA development of a white paper for the Fairfield Eco-Park which discusses the permit reforms that have been proposed under the EPA "Permit Improvement Team" initiative, and negotiated under programs including (a) the "P4" permit program initially developed by the Intel Corporation; (b) Project XL for Facilities programs including the Intel and 3M projects; and (c) the EPA Multi-Media Permitting effort currently underway in six states. The Eco-Park permit white paper should explain which permit reforms are available for EIP activities, lessons learned from successful and unsuccessful efforts thus far, and other information that can help BDC, MDE and EIP tenants establish permit reforms at Fairfield facilities;
- Information about EPA efforts to provide multi-facility "bubble" permits and the constraints on such permitting. This would include lessons learned from Anheuser-Busch and Carolina Power & Light Project XL efforts.
Issuance of Permits -- As specific opportunities develop, Eco-Park facilities can negotiate directly with the MDE for the issuance of consolidated, multi-media permits.

Expected Benefits:

Environmental benefit: Use of consolidated, multi-media permits will promote pollution prevention and prevent the shifting of environmental pollutants from one medium to another. Individual consolidated permits would be explicitly targeted to reduce actual emissions and discharge levels below those that would be achieved in traditional permit framework.
Economic benefit: One-stop-shop permitting will reduce paperwork and procedural burdens, and avoid duplication and inconsistencies. Operational permit flexibility will allow quick process and product changes to meet competitive needs.
Community benefit: Consolidated permits will be designed to be presented quarterly, and summarized annually, in user-friendly "environmental performance reports." These quarterly and annual reports will be made publicly available, including at the EIP ombudsman office and on the internet, to foster increased citizen access to environmental information.
Environmental, Economic and Community benefits: Success in establishing consolidated, multi-media permit practices in the EIP will enhance the ability of the Eco-Park to implement industrial ecology practices.

Expected Implementation Priority: The establishment and implementation of permit reforms in the Eco-Park is expected to be a phased, long-term process. The timeframe for such efforts depends heavily on the willingness of existing EIP tenants to devote attention and resources to permitting reforms. However, the Baltimore Development Corporation, the Chemical Industry Council of Maryland and its members want to begin this process immediately [MJP -- can we make this statement about CIC?].

PROPOSAL 9 -- AIR EMISSIONS CREDITING

AND INNOVATIVE MONITORING TECHNOLOGY

Objectives:

(a) Provide the Eco-Industrial Park and its tenants with valuable Clean Air Act emission allowances in exchange for energy efficiency and transportation measures which lower actual emissions of sulfur dioxide and oxides of nitrogen;

(b) Provide Eco-Park facilities with regulatory flexibility necessary to replace continuous emissions monitoring system technology with improved air monitoring technology; and

(c) Establish long-term process for issuance of facility-wide, bubble air permits and multi-facility permits for the cap-and-trade of criteria air pollutants.

Eco-Park Needs: Under Project XL, facilities within the Eco-Park will be encouraged to adopt energy-saving, pollution-reducing practices. In addition, the Baltimore Development Corporation will be implementing infrastructure improvements to the Fairfield area that could promote transportation patterns that produce fewer emissions from mobile sources.

BDC seeks regulatory incentives from the federal government designed to encourage measures that reduce emissions of criteria air pollutants including sulfur dioxide ("SO2"), oxides of nitrogen ("NOx") and carbon dioxide ("CO2"). Incentives can be granted in the following areas:

Use of Clean Air Act emission allowances for pollution-reducing activities that go beyond those already utilized under CAA Title IV program;
Technical assistance and regulatory flexibility for utilization of innovative air monitoring technologies;
Grant of authority to the Maryland Department of Environment for issuance of consolidated, flexible Title V air operating permits; and
Establishment of long-term process to determine feasibility of consolidated, multi-facility air permits for emissions of SO2, NOx and CO2 across entire Eco-Park area.

Options for Potential Regulatory Incentives:

Allocation of Clean Air Act emission allowance credits to those facilities that reduce energy use (and associated emissions of SO2 from power generation sources) below specified baseline levels. These allowances could be "banked" for future use by either individual EIP facilities, or allocated to an entity representing the Eco-Park that could apply such credits to future development or expanded business activities.
Allocation of air emission allowances to the Eco-Park for a reduction in mobile source emissions (including NOx and CO2) resulting from the replacement of the Route 895 toll booth with an "automated" toll booth that would reduce the stopping and re-acceleration of diesel trucks and other vehicles entering and leaving the Eco-Park. Likewise, allocation of allowances for implementation of inter-modal transportation facilities and programs designed to reduce mobile source emissions.
Establishment of a NOx "cap-and-trade" program among tenants of Eco-Park that would allow banking and trading of allowances for reductions in NOx emissions below required levels.
Regulatory flexibility and technical assistance designed to promote use by EIP facilities of innovative air monitoring technologies, such as:
- Elimination of Clean Air Act requirement for use of "continuous emissions monitoring systems" or "CEMS" for those existing and future EIP facilities which utilize new, cost-effective Fourier Transform Infrared ("FTIR") Spectroscopy. FTIR relies on a "fence-line" sensor to detect real-time emissions of air pollutants, and to help a facility pinpoint where emissions are coming from within a plant, possibly including unknown leaks.
Consistent with the "Permitting for Results" suggestions in Proposal 8 above, an EPA grant of authority to the Maryland Department of Environment to issue consolidated, flexible air operating permits for EIP facilities that would "cap" the overall level of SO2, NOx and CO2 emissions, yet allow "trades" of these pollutants among different facility point sources. In addition, such flexible permits would allow operational changes without permit modifications if the facility-wide cap is not violated. These caps would be designed to reduce actual emissions of criteria air pollutants below those levels that would have been achieved absent XL incentives.
Consistent with Proposal 8, BDC requests technical assistance in determining the feasibility of establishing multi-facility "bubble" permits that would cover the entire Eco-Park or portions thereof.

Expected Benefits:

Environmental benefits: Incentives for reduction of criteria air pollutants, including through pollution prevention and energy efficiency activities. Increased cooperation among EIP facilities for pollution-reducing activities. Development of multi-media protection practices. Improved, real-time monitoring of air emissions fostering improved emissions control, citizen access to environmental information and governments' ability to ensure continuous compliance.
Economic benefits: Tangible financial rewards for pollution prevention and control by Eco-Park facilities. Availability of cost-effective monitoring technologies. Opportunity for operational flexibility under multi-media permits.

Expected Implementation Priority: The development and implementation of a framework for air emissions trading and consolidated, multi-media permits will likely require substantial discussion and negotiation over a long-term period. Technical and regulatory assistance for the use of air monitoring technologies, however, could begin in the short-term.

PROPOSAL 10 -- WASTEWATER TREATMENT COOPERATION

Objective: To establish the regulatory structure necessary to allow cooperation among EIP facilities in the prevention and treatment of industrial water discharges.

Eco-Park Needs: Most of the industrial facilities in the Fairfield Eco-Park are direct dischargers of industrial wastewater pollutants. Most facilities also discharge pollutants, via the Fairfield sewer system, into the Patapsco Wastewater Sewage Treatment Plant, the area's publicly-owned treatment works ("POTW"). These pollutants typically must be treated or (in the case of discharges to the sewer system) pre-treated by the individual facility sources, and are regulated by detailed water effluent treatment criteria and permitting requirements.

Collective Pre-Treatment of EIP Wastewater -- EIP tenants are potentially interested in establishing the physical infrastructure and regulatory framework for collective pre-treatment of wastewater flows to the public sewer system. By forwarding untreated industrial wastewater flows from individual facilities to an intermediate pre-treatment facility prior to final discharge to the public treatment plant, the EIP and its tenants can potentially increase the level of treatment through the application of superior environmental technologies and pre-treatment practices that would not otherwise be applied on an individual facility basis. Moreover, such pre-treatment cooperation can produce a cost-saving economy-of-scale that could facilitate the re-direction of resources into other water protection priorities. In addition, the collective pre-treatment of industrial wastewater can reduce the burden on the Patapsco POTW.

Effluent Trading in EIP -- Eco-Park tenants also wish to explore the establishment of an effluent trading system at the Eco-Park under which sources of pollution could achieve pollutant reductions through substituting a cost-effective and enforceable mix of controls on other sources of discharges. The items to be "traded" are the pollutant reductions or water quality improvements sought. Under trading, a source that can more cost-effectively achieve greater pollutant reduction than is otherwise required would be able to sell or barter the credits for its excess reductions to another source unable to reduce its own pollutants as cheaply. To ensure that water quality standards are met throughout a watershed, an equivalent or better water pollutant reduction would need to result from a trade.

The overall EIP trading system would be covered by a Total Maximum Daily Load "TMDL") which would establish the loading capacity of the trading area, identify reductions or other remedial activities needed to achieve water quality standards, identify sources, and recommend allocations for point or nonpoint sources. Parties to the trade then negotiate within the loading capacity determined under the TMDL.

Technical Analysis Needed -- BDC emphasizes that coordinated pre-treatment arrangements, and effluent trading, are not feasible or appropriate without detailed technical analysis with respect to the specific wastewater discharges that would be eligible for such activities. No requests for regulatory flexibility in this area will be made by BDC absent appropriate analysis of the technical feasibility and environmental acceptability of such activities. However, Project XL can provide an opportunity to establish a process for discussion regarding the restructuring of wastewater regulatory requirements applicable to the Eco-Park to encourage superior environmental results at less cost.

Options for Potential Regulatory Incentives:

Establishment of an effluent trading framework for EIP facilities which would allow the following types of trades:

Pretreatment Trading: Indirect industrial point sources that discharge to the Patapsco Treatment Plant would be permitted to arrange for additional control by other indirect dischargers beyond minimum requirements in lieu of upgrading their own treatment.

Intra-Plant Trading: An EIP point source facility is allocated pollutant discharges among its outfalls in a cost-effective manner, provided that the combined permitted discharge with trading in less than the combined permitted discharge without trading.

Other Trades: EIP tenants also wish to explore the potential for effluent water pollutant trades between point sources, and between point sources and nonpoint sources. This could include relief from otherwise required upgrades to the Patapsco Treatment Plant in exchange for increased controls on stormwater runoff and industrial indirect discharges. Likewise, upgrades to the Patapsco Plant could potentially be avoided in exchange for the implementation of industrial, commercial and residential water conservation programs that reduce demand on the Plant's capacity.

Consolidated, streamlined permits for industrial wastewater indirect dischargers who participate in the establishment and utilization of an "intermediate pre-treatment facility" that would collectively treat wastes from individual facilities. Water discharged from the intermediate facility to the POTW must have water quality superior to water discharged from individual facilities.
The establishment of collective pre-treatment activities, and the use of consolidated permits, requires further technical analysis. However, consolidated pre-treatment permits could be designed to lower data collection, treatment, monitoring and reporting burdens on individual participating facilities.
The Chemical Industrial Council of Maryland, in coordination with the Bay Area Toxics Program administered by the states, has established an "Industrial Pollution Prevention Mentoring Partnership" under which larger chemical companies will provide assistance to small- and medium-sized companies in the use of pollution prevention practices and technologies. The Mentoring program can help encourage the prevention of industrial wastewater pollution. BDC proposes that EPA provide the Mentoring program with technical assistance in the use of innovative environmental technologies in industrial wastewater pre-treatment.
Permit streamlining and flexibility for those facilities which make operational changes designed to prevent wastewater pollution.

Expected Benefits:

Environmental benefits: Effluent trading can ensure greater reduction of water pollution at less cost; create economic incentives for dischargers to go beyond minimum pollution reduction through pollution prevention and environmental technology tools; reduce cumulative pollutant loading, improve water quality, accommodate growth and prevent future degradation; and better address ecosystem protection within the entire Chesapeake Bay watershed.
Environmental benefits: Collective pre-treatment activities can produce a higher degree of treatment of industrial wastewater due to economies-of-scale and use of innovative environmental technologies. Such coordinated pre-treatment can also make it easier to determine the source of any non-compliance.
Community benefits: Reduced burden on capacity of Patapsco Wastewater Treatment Plant. Effluent trading system can encourage dialogue among stakeholders for pollution-reducing activities among multiple sources of water quality impairment.
Economic benefits: Effluent trading will promote reductions of pollution that are the most cost-effective to make, rather than the reductions required by one-size-fits-all regulatory requirements. Economies-of-scale from coordinated pre-treatment, and reduced paperwork burdens on individual facilities.

Expected Implementation Priority: This area of regulatory incentives is an important priority of the Eco-Park and its industrial tenants. However, these activities cannot be implemented without careful, detailed analysis of technical constraints and opportunities associated with both effluent trading and the collective pre-treatment of individual waste streams.

Baltimore Development Corporation

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