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Baltimore Development Corporation

Proposed XL Regulatory Incentives


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:


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:


(1) Brownfields Testbed Strategies

(2) Superior Stormwater Management

(3) Fairfield Homes Reclamation and Asbestos Abatement Flexibility

(4) Baltimore/MDE/EPA Regulatory Partnership


(5) Linking Regulation to ISO 14000 Environmental Management Standards

(6) Industrial Materials Exchange

(7) Energy Cooperation and Efficiency


(8) Permitting for Results

(9) Air Emissions Crediting and Innovative Monitoring Technology

(10) Wastewater Treatment Cooperation


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:

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:

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).


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:

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.

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.

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

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.


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:

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:

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.


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:

Options for Potential Regulatory Incentives:

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.

Expected Benefits:

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.


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:

Options for Potential Regulatory Incentives:

Expected Benefits:

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.


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:

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:

Expected Benefits:

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.


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:

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:

Expected Benefits:

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.


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:

Options for Potential Regulatory Incentives:

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:

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.


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:

Expected Benefits:

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?].




(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:

Options for Potential Regulatory Incentives:

Expected Benefits:

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.


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:

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.

Expected Benefits:

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.

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