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Canadian TCE / PERC Regulation

2007 Guide to Complying with the Canada's Solvent Degreasing Regulation for Trichloroethylene (TCE) and Tetrachloroethylene (PERC) - By Reliance Specialty Products, Inc. Regulatory Compliance Department.

Summary

This Guide provides an overview for understanding and complying with the requirements of Canada's Solvent Degreasing Regulation for Trichloroethylene (TCE) and Tetrachloroethylene (PERC). This Regulation for calendar years 2004, 2005 and 2006 required Canadian companies to freeze their "use" of TCE and/or PERC in excess of 1000kg (2205 lbs.) for their solvent degreasing operations to a quantity defined by the Regulation based on their average historic consumption between the years 1994 and 2000.

For 2007, and every year thereafter, the excess "use" allowed for solvent degreasing operations by the Regulation (based on the average historic consumption) must be reduced by 65%. The Regulation also allows for the transfer from company to company of any unused allowed excess consumption for a particular year. The Solvent Degreasing Regulations (SOR 2003-283) is published in the Canadian Gazette P.C. 2003-1145, 24 July, 2003.

Background

In 1997, the Minister of the Environment announced that Regulations would be developed to reduce total Canadian consumption of TCE and PERC in an effort to reduce emissions of toxic substances into the environment. It was estimated that 90% of the TCE and 20% of the PERC consumed in Canada was used in metal degreasing. As such, metal degreasing is considered a major source of release of these toxic substances into the atmosphere. The objective of the Regulation was to freeze the consumption of these solvents for 2004 through 2006, and to achieve, in 2007 and thereafter, a reduction in the amount used by industry for solvent degreasing operations by 65%. The rationale for choosing a 65% reduction in the amount of consumption was based on solvent emission reductions which other jurisdictions have been able to achieve using MACT technologies (maximum achievable control technologies) in vapor degreasing and cold cleaning. The Solvent Degreasing Regulation was annexed on July, 2003.

Does this Regulation affect the amount of TCE or PERC my Company can use?

There are three main criteria to be met for this Regulation to affect your Company:

  1. Your Company uses PERC or TCE,
  2. Your Company "uses" more that 1000kg per calendar year, and
  3. Your Company's use is for a "degreasing process".

Each of these three criteria must be applicable to your solvent use for the Regulation to affect your use of TCE or PERC. So, for example, if you consume less than 1000kg of TCE or PERC per annum, or you are using these solvents for an application other than a "degreasing process", the restrictions of the Regulation do not apply. Note also, that dry cleaning and the use of continuous scouring machines in textile mills are specifically exempted from the Regulation.

How does the Regulation define a "Degreasing Process"?

The Regulation applies only to TCE and PERC used in a "Cold Degreaser" or a "Vapour Degreasing Machine", both of which are specifically defined.

"Cold Degreaser means equipment designed for using a solvent in its liquid form to remove soils from a substrate by spraying , brushing, flushing, agitating or immersing."

"Vapour Degreaser means equipment designed for using a solvent in its vapour form to remove soils from a substrate by condensation of the vapour on the substrate."

How is the amount of TCE or PERC "used" determined under the Regulation?

The Regulation greatly simplifies the calculation of the amount of solvent used by looking only at what was added to the cold cleaning or vapour degreasing Unit. Amounts added from spent solvent distilled and reclaimed on-site are not counted in the total of the amount "used" (see Paragraph 3 (2) & (3) of the Regulation). No credit is given for any amount sent off-site for disposal, for example, when a periodic clean-out and re-charge is conducted as part of a maintenance program.

Note also, the definition of "use" is based on solvent being added to the cold cleaning or vapour degreasing unit. Thus, amassing a stock-pile of solvent achieves no benefit for the user in terms of carrying any deficit of use from one period to another. Only when the solvent is drawn from inventory to be added does it count toward annual use.

If the Regulation applies to your Company, the quantity of TCE or PERC your Company can "use" in excess of 1000kg per calendar year is limited to the amount of "Consumption Units" which the Minister has issued specifically to your Company for the calendar year plus any additional "Consumption Units" received via a transfer from another company.

A "Consumption Unit" under the Regulation constitutes authorization to "use" a certain defined quantity of TCE or PERC in excess of 1000kg. No Consumption Units are allowed unless issued to your Company by the Minister under Subsection 4(1) or your Company receives the transfer of another company's unused Consumption Units under section 6. The amount of "Consumption Units" which you are potentially entitled is a calculated amount based on formulas defined by the Regulation. (More details concerning applying for, receiving and transferring Consumption Units are provided later in the Article.) Note, each year you must apply for the issuance of Consumption Units for the next year's consumption. Transfers apply only to the other Company's unused current year's Consumption Units. There is no carry over or forward of any unused issued or transferred Consumption Units.

How many Consumption Units is my Company potentially entitled to for 2004, 2005 and 2006?

"Consumption Units" are defined in Section 1 as "each kilogram of the solvent that may be used in a degreasing process in excess of the threshold set out in column 3 of Schedule 1 and that has been issued by the Minister under section 4."

Essentially, working through the provisions of Section 4(4), an "average annual consumption" for the years 1994 to 2000 is calculated depending on what year(s) the solvents were used and this average provides a maximum of the Consumption Units which are available for issuance to a company during 2004 to 2006. Thus, effectively freezing the amount of consumption over 1000kg to a defined historical average. Note also that these potential Consumption Units still need to be applied for and issued (see obtaining Consumption Units, below).

What if we did not use TCE or PERC prior to the year 2001 in an application subject to this Regulation?

The reference calendar years for determining the "average annual consumption" under the Regulation are 1994 to 2000. Accordingly, if you started using TCE or PERC after 2000, your average annual consumption will be zero and you would be entitled to the issuance of no consumption units. Thus your consumption would be limited to 1000kg unless you were the transferee of another company's unused consumption units each year.

How are my Consumption Units beginning in 2007 affected by the 65% reduction provided by the Regulation?

Section 4(2) provides that "the person's consumption units for a year are equal to the persons average annual consumption determined in accordance with subsection (4), multiplied by the percentage set out in column 4 of schedule 3, less the threshold set out in column 3 of Schedule 1, less any consumption unit retired under section 5".

Column 4 of Schedule 3 for 2004 to 2006 provides for 100% of the "average annual consumption". But beginning in 2007 and thereafter, the percentage is only 35%. Intuitively you would think that you simply reduce the consumption units by 65%, but practically, working through the formula of Section 4(2) a different result occurs.

Example 1: According to the formula in the Regulation, if a Company's average annual consumption is 1500kg per year, for 2007 the Consumption Units would be calculated as 1500kg x .35% = 525kg - 1000kg = 0 allowed consumption units. Not, 1500kg - 1000kg = 500 kg x .35% = 175kg. Thus, use would be limited to 1000kg.

Example 2: According to the formula in the Regulation, if a Company's average annual consumption is 15000kg per year, for 2007 the Consumption Units would be calculated as 15000kg x .35% = 5250kg - 1000kg = 4250kg of potentially allowed consumption units. Thus, total potential consumption, without transfers and upon issuance by the Minister, would be 5250kg (4250kg consumption units plus 1000kg threshold amount).

Issuance of Consumption Units

By application to the Minister, Consumption Units are issued. The form used for applying for Consumption Units is the "Solvent Degreasing Consumption Unit Request" form which must be submitted to the Environment Canada before October 1 of the current year for issuance of the next year's Consumption Units. This Form can be downloaded from:
pdf www.ec.gc.ca/nopp/degrease/forms/requestE.pdf.

Transfer of Consumption Units

Section 6 permits the transfer of unexpired consumption Units. This is accomplished by the filing of a "Solvent Degreasing Consumption Unit Transfer Application". The Form is filed with the Environment Canada's Solvent Degreasing Coordinator and a copy of the Form can be downloaded from:
pdf www.ec.gc.ca/nopp/degrease/forms/transferE.pdf. Both the transferor and transferee sign the application.

Can unused consumption units be carried over from year to year?

Consumption Units are specific to the year issued. Any unused consumption unit(s) cannot be carried over to another year. The units, can however be transferred and used by another company in the current year (see above regarding Transfer of Consumption Units).

Reporting Requirements

An annual Solvent Consumption Report must be filed with the Minister each year for Companies that have Consumption Units (i.e. usage in excess of the threshold amount). The reporting requirement is set forth in Paragraph 7(a) and the form for reporting is specified in Schedule 6. The Report is due within 30 days of the end of the annual period in which a Consumption Unit was in existence. The Form that is filed is titled "Solvent Degreasing Annual Solvent Consumption Report" and can be downloaded from:
pdf www.ec.gc.ca/nopp/degrease/forms/consumptionE.pdf.

Penalties for Exceeding Threshold Amounts

The Regulation itself does not specify the penalty for exceeding the threshold amounts nor does it specify any enforcement mechanisms. However, the Regulation is annexed pursuant to the Canadian Environmental Protection Act, 1999 whose provisions for enforcement and sanctions are the likely vehicle should an action be required. The Regulatory Impact Analysis Statement discusses environmental protection compliance orders, injunctions and prosecutions relative to enforcement of the Regulation. A brief examination of published data as of the date of writing this Article did not indicate any enforcement actions currently underway pursuant to the Regulation.

FOOTNOTES (about the Authors - Reliance Specialty Products, Inc.)

Reliance Specialty Products, Inc. manufactures specialty vapour degreasing and cleaning products, including GenTech vapor degreasing and cleaning solvent which is a direct replacement for TCE and suitable replacement for PERC. Technical Sales Representatives from Reliance Specialty Products, Inc. are experts in vapour degreasing equipment, control technology, and solvent cleaning processes. We are available to assist customer's in switching from TCE and PERC. GenTech is widely distributed and supported throughout the US and Canada.

Disclaimer

The contents of this Article are provided as a brief introduction to the provisions of this Regulation and should not be relied upon other than as such. Reference to the actual provisions of the Regulation and to interpretive rulings of its meaning and the direct assistance of an expert in this is area is necessary to ensure compliance with the Law. All duties, implied and actual, and damages thereon, based on any relying on the contents of this Article are hereby disclaimed.

Useful Links

The full Solvent Degreasing Regulation is published in the Canada Gazette at www.canadagazette.gc.ca/partII/2003/20030813/html/sor283-e.html.

A very brief overview of the Regulation is published by National Office of Pollution Prevention at www.ec.gc.ca/nopp/degrease/en/overview.cfm.

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