Emission Factor Development

EPA Office of Inspector General

Emission Factor Development

#6100306

EXECUTIVE SUMMARY

PURPOSE

Emission factors are used to develop estimates of pollutant emissions to the atmosphere from all major categories of air pollution sources. These emission estimates, in turn, play a key role in planning and implementing many air pollution control programs at the federal, state, local and industrial level. Accordingly, it is important that emission factors be available for most significant sources of air pollution and that they produce reliable emission estimates.

Because of the extensive use of emission factors in air pollution control activities, we conducted this audit as an integral part of the Office of Inspector General's (OIG) overall assessment of the Agency's air program. Our primary audit objective was to assess the extent to which stationary and area source emission factor development efforts were adequate to support various air programs dependent upon their use.

BACKGROUND

An emission factor is a representative value that attempts to estimate the quantity of a pollutant released to the atmosphere based on an activity associated with the release of that pollutant. For example, the burning of oil in industrial boilers results in carbon monoxide emissions. In this case, oil burned is the activity and carbon monoxide is the pollutant for which emissions would be estimated. The amount of oil burned multiplied by the appropriate emission factor would equal the amount of carbon monoxide emitted into the air for a given period.

Emission factors are used with varying frequencies by state and local air pollution control agencies and industries to estimate emissions related to all major types of air pollution. Generally, an emission factor is used when more reliable emissions data, such as continuous emissions monitoring data, is not available. Emission factors are almost always used to estimate emissions from area sources (e.g., small stationary, forest fires, woodstoves, etc.), mobile, and biogenic sources, and a significant number of point sources.

The U.S. Environmental Protection Agency (EPA) publishes emission factors in a document entitled "Compilation of Air Pollutant Emission Factors," commonly called the AP-42. This document contains two volumes. Volume I contains approximately 9,000 emission factors for stationary and area sources. Volume I comprises 279 sections primarily based on source categories. Each source category is further broken down into processes. Emission factors for the applicable pollutants emitted from a process are published for each process within a source category. The Office of Air and Radiation's (OAR) Office of Air Quality Planning and Standards (OAQPS) is responsible for emission factors in Volume I. ⁽¹⁾

The primary statutory requirement concerning emission factor development is contained in Section 130 of the Clean Air Act, as amended in 1990 (Act). This section required EPA to review and revise, if necessary, all emission factors for ozone precursors within six months of enactment of the Amendments and to repeat the review process every three years. Ozone precursors include volatile organic compounds, nitrogen oxides, and carbon monoxide. This statute also required EPA to develop factors for sources where none have been developed and to establish a public participation process for that development.

The emission estimates derived from emission factors are used in many facets of EPA's and state and local agency's air pollution control programs. For example, these emission estimates are used to develop area-wide emission inventories required by the Act for states whose air quality (pollution) exceeds the national standards set for ozone and carbon monoxide. These area-wide inventories are used by states and EPA to help determine what pollution controls should be implemented to bring these nonattainment areas back into compliance with the nation's air quality standards. Further, the emission estimates derived from factors are often used to help determine whether pollutant emissions from new or existing stationary sources require a construction or operating permit. Annual operating permit fees are, in turn, based on a source's estimated annual emissions, which are sometimes computed using emission factors. In addition, open market emissions trading programs will likely rely on emission factors to estimate emission credits for trading for many sources that will participate in such programs. Therefore, the availability of reliable factors is important to federal, state and local agencies and private industry.

RESULTS-IN-BRIEF

Passage of the Clean Air Act, as amended in 1990, required and encouraged the use of certain air pollution control activities that increased the need for reliable emission factors. These activities included requirements that states prepare emission inventories for use in ambient air quality models, implementation of federal operating permit programs for stationary sources of air pollution, and economic incentive programs, such as open market emissions trading. However, many of the emission factors available to the user community were unreliable and AP-42, Volume I emission factors were unavailable for many sources of air pollution. Moreover, the Act's requirements to develop emission factors for all sources of ozone precursors have not been met. Significant funding cuts to the emission factor development program, and air programs overall, have materially affected EPA's ability to meet the increased demand for quality emission factors. As a result, air pollution control activities, which rely upon quality emission factors and are designed to improve air quality, may not be achieving their goals.

Although OAQPS has traditionally developed emission factors, OAQPS has adopted alternative approaches to developing factors in light of funding cuts. These approaches include: (1) encouraging state and local agencies to develop emission factors (Adopt-A-Factor) through the CAA Section 105 Air grant program which provides federal assistance to state and local air pollution control agencies; and (2) industry/EPA partnerships under which industry plays a greater role in the development of factors related to their industry. Absent increases in EPA funding for factor development, improving the effectiveness of these alternative approaches to factor development is crucial to giving the user community quality emission factors that they need to operate their air programs. Although these approaches could potentially provide useful results, our audit noted concerns with both approaches.

Many states had not implemented the Adopt-A-Factor program. Also, the majority of grant funds "allocated" by OAR to this national priority activity were not spent on the program. Without changing the process by which the funds are allocated to states, the Adopt-A-Factor program will not result in significant emission factor development. Regional officials cited late Headquarters grant guidance, and conflicts between targeting funds for national priorities, such as Adopt-A-Factor and the spending flexibility of the performance partnership grant system, as primary reasons for limited implementation of this program.

Industry partnerships have resulted in revisions of the emission factors for certain source categories at a reduced cost to EPA. However, using industry-provided data increases the risk that nonrepresentative factors could be developed because of industry conflicts of interest. These conflicts of interest arise from uses of emission factors which financially impact industries. For example, operating permit fees are based on a polluting source's annual emissions, which are often estimated using emission factors. Accordingly, it is to industries economic benefit to have emission factors which produce low emission estimates. EPA needs to maintain adequate oversight over industry activities (e.g., site testing) performed for the partnerships to ensure that representative emission factors are developed. Increased state involvement in EPA/industry partnerships could provide additional oversight to help ensure that the factors are representative. The Adopt-A-Factor program may provide one avenue in which this state involvement could be encouraged.

RECOMMENDATIONS

The development and maintenance of reliable emission factors are critical for air programs at all levels of government and private industry. We believe the status of emission factor development is a significant weakness that impedes achievement of major air program goals and is, therefore, a material weakness under the Federal Managers' Financial Integrity Act (FMFIA). As such, we recommend that the Assistant Administrator for Air and Radiation report OAR's emission factor development program as a material weakness, until adequate resources are obtained to assure satisfactory development progress.

Also, we recommend that the Assistant Administrator (AA) for OAR and Director, OAQPS, improve state participation in the Adopt-A-Factor program. The AA should evaluate the process for issuing Section 105 grant allocation national guidance. This evaluation should identify actions that can be taken to ensure that national guidance is issued before the Regions and states begin their grant negotiation process. In addition, the AA should continue to work with the EPA regions, states and local agencies, and state and local agency associations to develop a new grant allocation system. This allocation system should provide states with flexibility while maintaining a mechanism to ensure that important national priorities, such as emission factor development, are adequately addressed. We also recommend that the Director, OAQPS, issue guidance to Regional Air Grant officials detailing what state and local agencies can do to participate in the Adopt-A-Factor program.

To maintain adequate control over the partnership method of factor development, we recommend that OAQPS' Emission Factors and Inventory Group (EFIG) continue to work with the Standing Air Emissions Workgroup to improve communication with state and local agencies regarding ongoing and planned industry partnerships. EFIG should also coordinate with EPA regional offices and state and local agencies/organizations to fund state involvement in partnerships through the Adopt-A-Factor program, where appropriate.

AGENCY COMMENTS AND OIG EVALUATION

A draft of this report was issued on August 8, 1996. Agency written comments to the draft report were not received as of the time of issuance of this final report.

Footnotes

1. Volume II contains emission factors for mobile sources. The Office of Air and Radiation's Office of Mobile Sources in Ann Arbor, MI is responsible for developing mobile sources factors which are published in Volume II.

Table of Contents

Audit Report

Created January 31, 1997

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