Mr Bob Joynt, Environmental Consultant and Mr Stephen Wu, Combustion Engineering Consultant
Environment Australia, February 2000
Low NOx technology adoption strategies
In 1996, an independent study, the Inquiry into Urban Air Pollution in Australia was performed by the Australian Academy of Technological Sciences and Engineering (AATSE, 1997) at the invitation by the Commonwealth Government. The Inquiry identified strategies that could be implemented by all levels of government, industry and the community to minimise urban air pollution, and is a key tool in identifying air quality management actions to be implemented as part of the Air Pollution in Major Cities Program. The report of Task Group 8 of this inquiry (Todd et al, 1997) provides particularly relevant background material for the present study.
Looking particularly at the experience of Europe and North America, strategies for encouraging the adoption of low NOx technologies have been reviewed. While "command and control" legislated standards are the most direct means of regulation, this may not be the economically optimal means of achieving emissions reductions. (There is abundant literature to support this conclusion in regard to greenhouse gas emissions.) Furthermore, enforcement costs can be high. Industry and regulatory agencies often favour a more flexible approach with freedom for emitters to choose the means of delivering emissions abatement. In the gas industry, as in other industries, voluntary compliance with industry codes has been successful in several countries.
In 1990, an ANZECC discussion paper on indoor air quality (quoted by EPA (1993)) proposed a strategy comprising:
- Education to increase community awareness.
- Action to ameliorate existing sources of indoor air pollution.
- Action to reduce the potential for future installations to contribute to air pollution.
While indoor air quality is not the focus of the present study, a similar strategy could be used in relation to ambient effects of domestic NOx emissions. Options highlighted by the ANZECC paper specifically for the control of NO2 from an indoor air quality perspective were:
- The rapid introduction of new gas-burner technology which produces lower levels of oxides of nitrogen, coupled with incentives to install such equipment; and
- The phasing out of flueless appliances which do not meet set limits of emission rates for air pollutants.
Trading in emission permits has received much attention since the Kyoto Protocol for greenhouse gases. In the United States there is a system for trading in NOx emission permits. While domestic gas emissions are too disperse to warrant permits at the point of emission, several schemes are applicable at the point of manufacture or at the industry level. Emission reductions resulting from introduction of low NOx technology could be assigned a monetary value, either arbitrarily or through a market mechanism, with benefits distributed through the tax system or by other NOx emitters purchasing offsetting credits. Incentive schemes in the form of subsidies or tax concessions have been used in some countries to encourage the use of more energy-efficient appliances – in general, less energy use leads to reduced NOx emissions.
There are many certification schemes to identify products with different degrees of energy efficiency. Similar "eco-label" schemes are specifically oriented to environmental effects and take into account emissions from the use of appliances and the life-cycle sustainability of the product. The Global Ecolabelling Network is an association of national eco-labelling programs with 21 members from Austria, Brazil, Canada, Croatia, the EU, Germany, Greece, Israel, Japan, Korea, Luxembourg, New Zealand, Norway, Spain, Sweden, Taiwan, Thailand, the UK, the USA and Zimbabwe (source: http://www.gen.gr.jp ).
Education about the benefits from reducing pollution can form an important part of such a strategy. The moral suasion that governments can bring to bear can be reinforced by the cooperation of industry and community groups.
The regulation of the Australian gas industry is described by Todd et al. (1997) as follows:
The gas industry is regulated under the various gas acts of the state governments of Australia. These Acts give the gas utilities powers of entry to premises, the ability to disconnect gaseous fuel burning equipment, issue defect notices and, where necessary, discontinue the supply of gas. These powers are overseen by an authority within each state's Department of Energy (or equivalent department). Disconnection and discontinuance of supply would occur where the gaseous fuel burning equipment or its installation does not comply with the Australian Gas Association (AGA) codes referred to in the Regulations of the Act.
The Australian Gas Association is the national gas industry body representing gas utilities, gas producers, pipeline companies and appliance manufacturers. The AGA codes ensure the safe use of a highly useful indigenous energy source, used by industry, commercial premises and domestic dwellings throughout Australia.
Gas burning equipment that does not meet AGA requirements does not receive AGA approval. Equipment without AGA approval will not be sold by vendors. Gas industry inspectors are allowed under the Act to disconnect unapproved appliances, with discontinuation of gas supply for continued non-conformance to the industry codes.
From discussions with stakeholders in the Australian gas industry we understand the industry would probably prefer a single emission standard for each appliance type, rather than penalties or incentives (such as promotion of low NOx appliances). Manufacturers and providers of appliances would require a link to reduced pollution effects to be demonstrated before they would willingly accept stricter standards. Mandated standards are also seen as the obvious strategy by regulators, although other measures such as tax concessions, promotion assistance and R&D subsidies may help.
An energy rating system for gas appliances has been in operation in Victoria since the early 1980s and is now operating in all states. Market research by Energy Efficiency Victoria indicates a good consumer understanding of energy ratings and a high level of influence by energy ratings on consumer appliance choice. These factors may have influenced manufacturers to increase the efficiency of appliances (R. Pierotti, personal communication.) Other factors remaining unchanged, efficiency gains would lead to reductions in NOx emissions. However, this may have been already achieved by similar schemes throughout Australia.
Approved appliances are labelled in accordance with the AGA codes. The proposed Victorian regulations, and also AGA Standard 103, require flueless space heaters to be labelled with the following statement: "Emissions from this space heater may affect persons susceptible to respiratory problems".
Australia does not have an eco-label. Participation of the tourist industry in the Green Globe 21 branding system has been proposed (The Australian p.22, 14 September 1999).
According to Benedek and Goodman (1994) there were no national subsidy or tax relief programs in Austria in 1993 for low-emissions appliances. An eco-labelling scheme introduced in 1991 did not yet cover gas appliances.
There is no government mandate to reduce NOx emissions from residential appliances (E Smith, personal communication).
The European eco-label was launched in 1992 to provide effective environmental protection for an integrating Europe in the context of growing market globalisation. In November 1998 it covered 200 products. Gas fired domestic appliances are not yet covered (BMU, 1998).
According to Benedek and Goodman (1994) the eco-label NF-Environment, introduced in 1992 by AFNOR (French Standardisation Association) did not cover gas-fired appliances.
Germany has a voluntary eco-labeling program called the Blue Angel Seal (Umweltzeichen Blauer Engel), introduced in 1977. The goal of the seal is to encourage manufacturers to design environmentally sound products and to inform and motivate consumers to purchase these products. The award of the seal is based on the product meeting detailed criteria defined by the Environmental Jury. The Jury is composed of representatives of the States' environmental agencies and experts from universities and industry. The award is made by RAL (German Institute for Quality Assurance and Labelling). The Blue Angel Seal may be awarded to any company, whether or not it has a presence in Germany or in the German market. In 1999, over 4000 products in 80 categories were covered by the label (source: Informationsdienst Burgerinformation Neue Energietechniken http://www.fiz-karlsruhe.de/bine/upis/frhaupts.html ). Certification of a product costs DM300 for handling the initial application, plus an annual fee graduated according to the annual turnover of the product (RAL, 1999).
The effectiveness of the Blue Angel label has been reviewed for the Federal Ministry for the Environment, Conservation and Reactor Safety. 57% of companies using the label rated it 'good' or 'very good' overall. Suggestions were given for improvements (Hassler, et al., 1998).
Blue Angel NOx limits for several gas appliances are shown in Table 17 together with the number of products that have been certified in each category (RAL, 1998, 1999).
|Flued appliances||RAL-UZ number||mg(NOx)/kWh (input)(ppm @ 0% O2)||No. of products|
|Combined water heaters and circulating water heaters||40||60 (34)||37|
|Low-emission- and energy-saving natural gas-fired calorific-value heating devices ≤ 70 kW output, discharged via an over-roof exhaust system||61||60 (34)||45|
|Combined burner/boiler units with fan-assisted natural gas burner ≤ 70 kW output||41||70 (40)||4|
|Independent natural gas heaters ≤ 11 kW heat output
Natural gas heating elements ≤ 22 kW heat output
|"Special" natural gas boilers ≤ 70 kW output||39||70 (40)||40|
Yamada and Desprets (1997) also quote limits for natural gas appliances related to the quality mark of the DVGW (German Society of Gas and Water Technologists) which are tabulated in Table 18.
|Flued appliances||mg(NOx)/kWh (ppm @0% O2)|
|Boiler ≥ 120 kW input||80 (45)|
|Boiler < 120 kW input||120 (68)|
|Wall mounted boiler with warm water production||60 (34)|
|Fan assisted burner||100 (57)|
|Condensing appliance||60 (34)|
|Room heater (flued)||150 (85)|
The state government of Hamburg had a tax incentive program in which 10% of the installation costs of modern heating systems were depreciated over 10 years. This was stopped in 1991.
In 1993, the Hamburger Forderprogramm defined criteria, including a limit of 80 mg(NOx)/kWh(input) for high efficiency boilers in self-contained houses. If the criteria were met, the consumer received a subsidy for new installations as shown in Table 19. The criteria were stated to be updated annually but no more recent reference of this program has been found.
|Type of change||Subsidy|
|Installation of a new conventional boiler||1500 DM|
|Installation of a condensing boiler||2000 DM|
|Installation of a completely new heating system||4000 DM|
Following the abolition of the tax depreciation, the number of participants in the program dropped by 80% (Benedek and Goodman, 1994).
In Baden-Wurttemberg there was a consumer initiative similar to that in Hamburg for self-contained houses. For condensing-type boilers meeting the requirements of DIN4702 (1993) the State Government gave a lump sum of DM 1000 or up to 20% of the installation costs (Benedek and Goodman, 1994).
The Housing Finance Corporation offers low-interest loans for energy efficient water heaters, which may also reduce NOx emissions.
Public environmental awareness in Japan has produced several local proposals involving environmental impact assessments, recycling and local green taxes.
The Japan Environmental Association, a subset of the Environmental Agency, administers a seal of approval called the Ecomark but in 1993 none had been identified for gas-fired household appliances (Benedek and Goodman, 1994).
The non-mandatory limits quoted in Section 4.12 appear to be examples of regional initiatives to encourage low NOx emissions.
The Dutch Certification Institute (Keurmerkinstituut) administers the Gaskeur eco-label (Gaskeur Schonere Verbranding) for the environmental certification of residential-sized appliances in the Netherlands (http://www.ecomarkt.nl ). The emission limits for several appliances are shown in Table 20 (Yamada and Desprets, 1997; R Aptroot, personal communication; Benedek and Goodman, 1994).
|Flued appliances||Size (heat output)||ppm NOx (0% O2)|
|Central heating boilers||< 35 kW
> 35 kW
|Forced air burners||< 35 kW
> 35 kW
|Infrared radiation heaters||< 35 kW
> 35 kW
|Radiant equipment||NEN1078, art. 13.1.5,c,d||15|
Note: a New limits for the year 2000 are under discussion.
The strategy for reducing NOx emissions is to use the Gaskeur eco-label to encourage voluntary reductions. In some cases tax reductions are then possible. When most appliances meet the requirements, compulsory limits are introduced (R Aptroot, personal communication).
The Environmental Choice eco-labelling program is managed by International Accreditation New Zealand (http://www.ianz.govt.nz/echoice/index.htm ). Gas appliances are not covered.
According to Benedek and Goodman (1994) Finland, Norway, Sweden, Denmark and Iceland developed the White Swan Seal, but it did not cover domestic gas appliances.
There is a NOx fee set at 4.8 ECU/kg NO2 for installations using more than 25 GWh gas per year. The fee system is a "zero system", which means that the plants covered by the system get refunds if their NOx production is less than average. The fee system has resulted in a decrease in NOx emissions from the boilers that are covered by the system by 35% from 1992 to 1995 (O Jonsson, personal communication).
There are no subsidies or eco-labels in Switzerland. The Zuricher Werte provided a regulatory model for the Hamburg program for high-efficiency boilers in Germany (Benedek and Goodman, 1994).
According to Benedek and Goodman (1994), a subsidy of £200 was paid in the UK in 1993 for each installation of condensing boilers. There was no eco-labelling program in the UK.
California's South Coast Air Quality Management District (AQMD) uses command-and-control emissions standards for gas appliances, as outlined in Section 4.18 above. To assure compliance, Rule 1121 requires that manufacturers obtain certification before distributing water heaters for sale within the AQMD's jurisdiction. The rule was amended on March 10, 1995 to incorporate a new certification test protocol and require recertification after three years unless the manufacturers participated in an AQMD-approved NOx validation program. The NOx emission standards in the 1978 version of the rule were retained. As part of the current proposed amendments, the AQMD is soliciting comments regarding incorporating an averaging provision, a two-step implementation approach, and removing provisions for the NOx validation program. A preliminary draft staff report will include a section discussing the incremental cost effectiveness of the proposed amendments (SCAQMD, 1999).
In addition, the Regional Clean Air Incentive Market (RECLAIM) has been established in the AQMD. This program applies to sites emitting more than 4 tons per day of NOx. It requires permitted sources to reduce emissions in successive years and allows credits from underemitting sites to be sold to satisfy the requirements of overemitting sites (Source: "California's appliance emission standards", downloaded from GRI website on the 17 Aug 99). A free-market program based on point of use emissions would be impractical for domestic emissions. However, a voluntary Area Source Credits (ASC) program was introduced in 1997 to provide incentives for emission reductions in appliances. Under the ASC rule, credits associated with particular appliances can be given to manufacturers, who can then sell them to RECLAIM sites (10 lb of ASC credits translate into 9 lb of RECLAIM credits). 1999 prices for RECLAIM trading credits for NOx emissions in years 2000 and beyond have ranged from US$175/lb to US$278/lb. The ASC rule (No. 2506) promulgated by AQMD can be downloaded from the website http://www.aqmd.gov . Although the ASC scheme opens the way for participation of individual residences in emissions trading, there have been only two applications for trading, one of which subsequently withdrew. It appears the benefits are not sufficient incentive to encourage participation in the program (M Haimov, personal communication.)
The Bay Area Air Quality Management District has a trading and banking scheme similar to RECLAIM, without the extension to residential sources provided by ASC (Source: website http://www.baaqmd.gov , Regulation 2, Rules 4 and 9; G Stone, personal communication).
Environmental product certification, or eco-labelling, is carried out in the US by a non-profit company Green Seal (http://www.greenseal.org ), Underwriters Laboratories Inc (http://www.ul.com ) and Scientific Certification Systems. In 1993 Green Seal was drafting standards for cooktops and ovens and for water heaters. Current Green Seal standards did not include emission limits but 40 ng(NOx)/J(output) was being considered for water heaters. Scientific Certification Systems had not, by 1993, evaluated gas-fired household appliances. (Benedek and Goodman, 1994) The USEPA has an Energy Star program that assigns a rating to energy efficient buildings, appliances and devices (http://www.energystar.gov ).
The US has no rebate or incentive program to encourage emission reduction from residential-scale systems (Benedek and Goodman, 1994).