Conservation Groups Urge Stronger North Carolina Haze Plan to Protect National Parks

October 22, 2026

Katherine Quinlan
NC Division of Air Quality
1641 Mail Service Center
Raleigh, North Carolina 27699-1641
da****************@****nc.gov

Electronic Filing via Email to da****************@****nc.gov (Subject: NC RH SIP)

Re: Comments on the Proposed Supplement to Regional Haze State Implementation Plan

(SIP) for North Carolina Class I Areas for the Second Planning Period (2019–2028)

Dear Ms. Quinlan,

The National Parks Conservation Association (“NPCA”), the Coalition to Protect America’s National Parks, and Center for Biological Diversity (collectively, “Conservation Groups”) submit the following comments on the North Carolina Department of Environmental Quality (“DEQ”), Division of Air Quality (“DAQ”), Supplement (“SIP Supplement”)1 to its Regional Haze State Implementation Plan for the Second Implementation Period submitted to the Environmental Protection Agency (“EPA”) on April 4, 2022 (“2022 SIP Revision”).2 The Conservation Groups also submit a report prepared by Joe Kordzi (“2026 Kordzi Report”), which is attached and incorporated by reference into these comments.3 The Conservation Groups submitted public comments, including an expert report prepared by Joe Kordzi (“2021

Kordzi Report”), to DAQ on the Proposed Haze Plan on October 15, 2021.4 On August 20, 2024, EPA proposed to approve in part and conditionally approve in part the 2022 SIP Revision (“EPA Proposal”).5 The Conservation Groups submitted comments on the EPA Proposal on September 19, 2024,6 including a second expert report by Mr. Kordzi (“2024 Kordzi Report”).7 On November 22, 2024, EPA instead partially disapproved the 2022 SIP Revision, including the long-term strategy (“LTS”), reasonable progress goals (“RPGs”), and Federal Land Manager (“FLM”) consultation, because the record did not support DAQ’s rejection of a wet scrubber for the No. 2 Hog Fuel Boiler (“HFB2”) at Domtar Paper Company’s Plymouth Mill (“Domtar”), and because the SIP lacked enforceable fuel restrictions for Domtar’s No. 1 Hog Fuel Boiler (“HFB1”) (“Final Action”).8

The Conservation Groups are active nationwide in advocating for strong air quality requirements to protect our national parks and wilderness areas. These groups have long participated in Regional Haze SIP comment periods, rulemakings, and litigation across the country to ensure that states and EPA satisfy their obligations under the Clean Air Act (“CAA”) and the Regional Haze Rule (“RHR”). The Conservation Groups’ members who live in North Carolina use and enjoy regional Class I areas affected by North Carolina’s sources of haze- forming pollution. NPCA has over 55,000 members and supporters in North Carolina. The Coalition to Protect America’s National Parks represents nearly 5,000 current, former, and retired employees and volunteers of the National Park Service, with over 50,000 collective years of stewardship of America’s most precious natural and cultural resources. The Center for Biological Diversity is a nonprofit organization dedicated to protecting endangered species and a healthy environment. The Center has over 1.8 million members and supporters throughout the United States and the world and more than 41,000 members in North Carolina.

DAQ’s SIP Supplement does not address many of the issues identified by EPA in its Final Action. The revised Four-Factor Analysis (“FFA”) for Domtar’s HFB2 also contains errors in its cost estimates and supporting assumptions, and DAQ still fails to include practically enforceable limits in the SIP for HFB1:

• Although DAQ revises its Four-Factor Analysis for HFB2, it again relies on a flawed, facility-submitted control cost analysis, causing the State to improperly reject a feasible, available, and cost-effective wet scrubber. The revised analysis repeats the “similar sources” argument EPA rejected, keeps a 1.3 retrofit factor without the documentation the Control Cost Manual requires, keeps the sales tax charge EPA said should not have been included, and relies on undocumented cost assumptions, including a caustic price and usage rate that the 2026 Kordzi Report shows are inflated. (See Sections I.A.1 and I.A.2.) • DAQ has not explained why the estimated cost warrants rejecting the wet scrubber. Even DAQ’s revised cost estimate falls within the range of cost-effectiveness thresholds other states have adopted. Under the corrections and assumptions explained in the 2026 Kordzi Report, the estimated cost of a wet scrubber falls to $3,671 per ton of pollution reduced, with lower estimates under additional scenarios, supporting selection of that control as the reasonable progress measure for HFB2. (See Section I.A.3.) • DAQ still has not included enforceable fuel restrictions for HFB1 in the SIP. It relies instead on permit revisions and on Domtar’s choice not to operate the unit since 2020, neither of which is enforceable as part of the SIP. DAQ must either incorporate enforceable fuel restrictions for HFB1 into the SIP or conduct a Four-Factor Analysis based on every fuel the boiler is permitted to burn. (See Section I.B.1.) • The permit provisions that DAQ proposes to incorporate into the SIP for HFB2 do not include adequate monitoring, recordkeeping, and reporting requirements to ensure that the sulfur dioxide (“SO₂”) emission limits are met and enforced. DAQ should require SO₂ continuous emission monitoring for HFB2, as it proposes for PCS Phosphate. (See Section I.B.2.) • DAQ rejects the wet scrubber based on factors outside the four statutory factors: compliance with the SO₂ National Ambient Air Quality Standards (“NAAQS”), emission reductions from other sources, and visibility progress at Swanquarter. None of these substitutes for a reasoned Four-Factor Analysis, and HFB2’s own SO₂ emissions have roughly doubled since 2016. (See Section II.) • DAQ’s reasonable progress goals reflect the same deficient long-term strategy EPA disapproved and cannot justify rejecting controls at Domtar. (See Section II.E.) • The SIP Supplement does not correct the other deficiencies the Conservation Groups identified in their prior comments to DAQ and EPA. Those deficiencies remain, and the prior comments are incorporated by reference. (See Section III.)

DAQ should withdraw the SIP Supplement, correct the errors discussed below, and adopt the measures shown to be reasonable and necessary for reasonable progress, including a wet scrubber and SIP-enforceable limits for HFB2. For HFB1, DAQ must either incorporate enforceable fuel restrictions into the SIP or conduct a Four-Factor Analysis based on every fuel the boiler is permitted to burn. The detailed comments follow.

I.	North Carolina Errs in Its Supplemental Analysis for Domtar.

A.	The Supplemental SO2 Four-Factor Analysis Fails to Correct Deficiencies

Identified by EPA in Its Partial Disapproval.

1.	The State Fails to Provide a Rational Basis for Rejecting Wet

Scrubber Controls for HFB2.

The State fails to provide a rational basis in the SIP Supplement for rejecting wet scrubber controls at HFB2. EPA’s Final Action explained that “EPA agrees that overall, North Carolina did not provide an adequate rationale to explain why the wet scrubber controls were not cost-effective, and therefore, not included in the LTS as being necessary for reasonable progress. … Due to the inadequate record substantiating the FFA conclusion regarding HFB2 … EPA is disapproving the portions of the Haze Plan addressing 40 CFR 51.308(f)(2) and (3) and (i)(2) through (4).”9 “EPA’s first basis for disapproval of North Carolina’s LTS is the inadequate justification that the wet scrubber controls are not cost-effective for HFB2.”10 In explaining that basis, EPA addressed four issues that remain relevant here.

DAQ describes EPA’s action as identifying three discrete “reasons for disapproval” and states that it prepared the SIP Supplement “to address EPA’s basis for the partial disapproval of the three elements.”11 That is not how EPA framed its action. EPA disapproved the long-term strategy, the reasonable progress goals, and the FLM consultation requirements “due to the inadequate record associated with the four-factor analysis (FFA) for Domtar,” and explained that the enforceability concerns raised in its withdrawn conditional approval and the Commitment Letter “are now subsumed under the broader partial disapproval.”12 The deficiency EPA identified is the adequacy of the record as a whole, and it is not cured by addressing three items in isolation.

First, EPA explained that the lack of “similar sources” with installed wet scrubber controls is not a basis to reject those controls. EPA’s Final Action noted that “although it may be accurate that most if not all hog fuel boilers in the country do not have wet scrubbers installed, Domtar and the State submitted a complete cost analysis and a vendor quote to install a wet scrubber on HFB2,”13 thereby acknowledging that a wet scrubber is a technically feasible and available control for HFB2. DAQ’s SIP Supplement fails to respond to this issue. Instead, the State reiterated the same argument, “[a]s documented in the Regional Haze SIP, the DAQ was unable to identify similar sources to HFB2 equipped with a wet scrubber for comparing the cost- effectiveness of controls.”14 The State’s review of EPA’s RACT/BACT/LAER Clearinghouse (“RBLC”) does not represent a complete survey of all potential controls that could be installed on a source. EPA has already explained that “[u]nless a wet scrubber cannot be installed on

HFB2, the lack of a similar scrubber in the RACT/BACT/LAER Clearinghouse is not a relevant reason for rejecting the control.”15 Moreover, Domtar itself operates two venturi scrubbers in parallel for SO₂ removal on a comparable power boiler at its Ashdown, Arkansas mill—an 820 million British thermal unit (“MMBtu”) per hour unit that fires bark and wood residuals among other fuels.16

Second, the record does not support the State’s determination that a wet scrubber is not necessary for HFB2. EPA’s Final Action explains that one of the deficiencies in the State’s SIP was its failure to justify its decision to reject a wet scrubber.17 North Carolina calculated a cost of $3,660 per ton of SO₂ removed for a scrubber on HFB2, and the Conservation Groups calculated $2,968 to $3,244 per ton. Yet, “regardless of the range of costs presented by both the State and the Conservation Groups,” EPA determined that “North Carolina did not adequately justify why a wet scrubber emissions control in that cost range was not necessary for reasonable progress.”18 EPA made clear that each state must “provide a justification for FFA outcomes.”19 EPA also explained that its 2019 Guidance recommends following the Control Cost Manual “to facilitate apples-to-apples comparisons of different controls [sic] options for the same source, and comparisons across different sources.”20

The SIP Supplement does not cure this deficiency. DAQ now provides a cost of $7,519 per ton for a wet scrubber on HFB2, which is more than double its earlier figure.21 But DAQ

still fails to explain why a wet scrubber at the revised cost is not necessary for reasonable progress. Instead, DAQ suggests that the cost is “too excessive” because North Carolina has complied with the SO₂ NAAQS for more than ten years (along with other assertions that are not part of the statutory Four-Factor Analysis and are discussed below).22 The State also complains that “EPA has not provided any guidance on a cost-effectiveness threshold.”23 Neither is a justification under the four statutory factors.

The lack of a federal cost threshold does not relieve DAQ of its duty to explain its decision. As EPA explained in disapproving part of Utah’s regional haze plan, “while the CAA and RHR neither prohibit nor require a state to utilize a cost-effectiveness threshold, the State must explain why it believes control measures that exceed a certain level are not cost- effective.”24 EPA found that Utah, in evaluating nitrogen oxides (“NOx”) controls for the Hunter and Huntington power plants, “did not adequately explain how it arrived at $5,750/ton as the level at which physical NOx controls for Hunter and Huntington would not be cost-effective, the factors it considered in doing so, or how this cost/ton level relates to the State’s obligation to make reasonable progress toward the national visibility goal,” and therefore, EPA could not “conclude that the State’s decision-making was based on reasoned analysis.”25 The SIP Supplement has the same defect. DAQ does not itself identify the cost level above which it considers SO₂ controls not cost-effective or explain why the estimated cost per ton warrants rejecting the scrubber. The Domtar analysis on which DAQ relies states only that the scrubber is not cost-effective because its capital cost exceeds $14 million and its cost exceeds $5,000 per ton, after citing comparison values of $3,000 and $3,400 per ton drawn from other programs.26 Neither Domtar nor DAQ explains how those figures relate to the State’s obligation to make reasonable progress.27

DAQ’s revised cost-effectiveness value of $7,519 is itself inflated. As the 2026 Kordzi Report shows, correcting Domtar’s caustic price and usage rate and removing the sales tax reduces the cost to $3,671 per ton, about the same as the $3,660 per ton DAQ calculated in

2021.28 Further correcting the cost analysis to use a retrofit factor of 1.0, and then removing the cost of a new, and unnecessary, induced draft fan, reduces the costs even more.29

Third, the State failed to adequately document and justify a 1.3 retrofit factor.30 EPA found it unnecessary “to weigh-in on all of the specific deficiencies” in the cost calculations, but it identified “some specific issues where information provided here may help when reevaluating the need for controls in a potential SIP revision.”31 The retrofit factor was one of them. EPA explained that because the Control Cost Manual “cannot properly account for all uncertainties,” it provides that a retrofit factor can be applied, and that the typical retrofit factor for a wet scrubber is “between 0.7 and 1.3, depending on the level of difficulty.”32 EPA next explained the standard any FFA must meet:

In any SIP revision, a retrofit factor greater than 1.0 should be adequately documented with a detailed justification to explain why it is appropriate to inflate the costs above those with an average retrofit difficulty.33

That standard comes from the Control Cost Manual. Under the Manual, “[a]n RF of 1 should be used to estimate costs for a project of average difficulty,” a factor greater than 1 may be used for more complicated retrofits only “provided the reasons for using a higher retrofit factor are appropriate and fully documented,” and “[e]ach project should be evaluated to determine the appropriate value for RF.”34 Applying that standard, EPA concluded that “[b]ased on the information provided, EPA is not able to adequately discern whether a 1.3 retrofit factor in the cost analysis for the wet scrubber for HFB2 is inflated.”35 In other words, EPA determined that the State did not provide adequate documentation to justify its reliance on a retrofit factor greater than 1.

The revised cost analysis in the SIP Supplement, however, continues to rely on the 1.3 retrofit factor, which adds $3,830,047 to the total capital investment (up from $3,352,561 in the 2021 FFA), an increase of 14.24 percent. This is the same percentage increase as “Contingencies” and “Total Capital Investment.”36 Table note (h) explains that:

U.S. EPA indicates that a retrofit factor is appropriate when estimating the cost to install a control system on an existing facility in order to address the unexpected

magnitude of anticipated cost elements. A retrofit factor of 1.3 was applied to the total capital cost as the vendor cost estimate was conducted remotely, an engineering study and constructability study have not been performed, and for unexpected delays.37

None of these reasons shows that retrofitting HFB2 with a wet scrubber would be more complicated than an average retrofit. Domtar’s stated reasons for the 1.3 retrofit factor, a remotely prepared vendor estimate and the absence of an engineering study, go to the uncertainty of the estimate, not to the difficulty of the installation. The Control Cost Manual assigns that uncertainty to the contingency allowance, not the retrofit factor, and Domtar’s analysis already includes a contingency of $1,160,620.38 DAQ itself describes the Manual’s method as producing study estimates within plus or minus 30 percent.39 And although the Control Cost Manual allows a retrofit factor to cover the costs of unexpected delays, a planned shutdown to install controls is a start-up cost, not a retrofit cost, and DAQ provides no information separating any retrofit-related lost production from a routine outage.40

Domtar’s revised February 2023 analysis is also flawed. Domtar offers several reasons for using a 1.3 retrofit factor, first explaining that:

Currently known, site-specific factors that would limit the feasibility and increase the cost of installing additional controls on HFB2 include space constraints. A detailed engineering study for each of the controls evaluated in this report would be necessary before any additional controls were determined to be feasible or cost effective.41

Second, Domtar asserts that the 1.3 factor was used “because the vendor cost estimate was conducted remotely and a detailed engineering study has not been performed.”42 Third, the vendor quote left out the induced draft fan and so the FFA includes fan options, which range from $2,000,000 to $5,500,000, and uses $3,000,000. Based on this, Domtar further suggests that the retrofit factor “would help cover the higher cost [fan] option.”43 Domtar also states that the higher retrofit factor would help cover “other potential engineering or siting challenges.”44 Finally, Domtar suggests that its retrofit factor also “accounts for unanticipated delays” that could stretch a mill outage. Domtar explains that HFB2 is the mill’s main extra steam source and the control device for non-condensable gases under 40 C.F.R. pt. 60, subpart BB and pt. 63,

subpart S and that a constructability analysis “is required” to judge how long the tie-in would take.45

These explanations do not identify installation difficulties that would justify a retrofit factor above 1.0.

Space constraints. Domtar’s only site-specific justification is a single sentence: “Currently known, site-specific factors that would limit the feasibility and increase the cost of installing additional controls on HFB2 include space constraints.”46 Domtar provides no site layout, footprint, ductwork routing, or other information showing that space would make this retrofit more difficult than average, and no cost estimate tied to any space limitation. A bare assertion is not the full documentation the Control Cost Manual or the RHR requires.47

Additionally, Domtar’s “space constraints” and “detailed engineering study” sentences match, nearly verbatim, language from the June 2020 Four-Factor Analysis for four Oregon pulp and paper mills.48 In that regional haze SIP action, Oregon did not accept the sources’ conclusions. EPA explained that source analyses “indicated that additional NOx, PM₁₀, and SO₂ controls were either technologically infeasible or not cost effective. Nevertheless, Oregon reviewed these analyses and determined that in some cases controls may be feasible and cost effective.”49 Oregon then sent preliminary determination letters inviting the sources to “provide additional information.”50 The nearly identical language Domtar invokes in its cost analysis

does not explain the space constraints at HFB2. The SIP Supplement provides no site-specific documentation supporting that assertion.

EPA has proposed to reject a far better-supported retrofit factor for lack of site-specific cost documentation. In the Missouri regional haze SIP action, EPA explained that the Control Cost Manual’s default retrofit factor of 1 “is associated with average difficulty in retrofitting an existing unit,” and “already includes a 30% increase in costs compared to new construction.”51 EPA explained that “to support a retrofit factor above 1 a source should provide site specific documentation detailing the inflated costs associated with the CCM criteria (site congestion, site access, ductwork complexity as well as capacity of existing infrastructure that would lead to above average retrofit difficulty).”52 One of the Missouri sources analyzed in that State’s SIP had submitted “aerial imagery documenting the site congestion and site access as well as engineering plans and schematics of potential control device location, rerouted ductwork, and other construction.”53 EPA nevertheless considered that documentation insufficient because it was not “accompanied by site-specific cost estimates for the various aspects of the retrofit hardship.”54 EPA further noted that “[o]ther electric generating units in the state (and outside the state) do not rely on such a non-default retrofit factor despite having similar limitations, such as physical space limitations,” and it used the default factor of 1 in its own calculations.55 Domtar provides neither comparable engineering documentation nor cost estimates tying the claimed space constraints to above-average retrofit costs.56

Missing studies. Domtar suggests that a detailed engineering study “would be necessary before any additional controls were determined to be feasible or cost effective,”57 that the 1.3 factor was applied “because the vendor cost estimate was conducted remotely and a detailed engineering study has not been performed,”58 and that “a constructability analysis is required to be conducted to fully assess the length of the tie-in process.”59 It is unreasonable for DAQ to

rely on the absence of studies it never required, either to reject controls or to inflate the capital cost.60

DAQ asked Domtar to update its analysis in early 2023,61 and the facility, and so DAQ, had more than three years to obtain any study considered necessary to fully assess wet scrubber controls for HFB2. Domtar has not provided the studies or other documentation needed to justify a retrofit factor above 1.0,62 and its failure to do so cannot then be used to justify an inflated factor. Additionally, in its Missouri proposal, EPA declined to rely on prior source- specific studies because it could not “review the necessary underlying cost assumptions,” and it emphasized that “[d]etailed, technical cost information and robust documentation is needed to justify the inflated costs.”63

Fan cost. Domtar explains that the vendor quote did not include a new induced draft fan, that the fan options “ranged from $2,000,000 to $5,500,000,” and that the analysis uses $3,000,000, with “the retrofit factor [to] help cover the higher cost option and other potential engineering or siting challenges.”64 The fan is a separate line item with its own estimate. Using the retrofit factor to cover a potentially higher fan cost adds an allowance for uncertainty to a separately estimated cost. DAQ must identify which additional retrofit costs remain outside the $3,000,000 fan allowance and the other cost categories, and substantiate the amount attributed to them.65

The 2026 Kordzi Report addresses the fan and the retrofit factor in more detail. EPA accepted the $3,000,000 fan cost in 2024 based on DAQ’s statement that monitoring showed the existing fan had no excess capacity.66 However, as explained in the 2026 Kordzi Report, the record does not support that conclusion, as the record still does not contain fan curves, monitoring data, engineering analysis, or a vendor quote for the fan, and LDX’s scrubber quote assumed the scrubber would use available capacity in the existing fan, subject to confirmation.67 The 2026 Kordzi Report also explains that Domtar’s main reasons for the 1.3 factor (uncertainty in the estimate and in the fan’s price) belong in contingency, which the analysis already includes, and that because the retrofit factor is applied on top of contingency, the total cost of the $3,000,000 fan in Domtar’s cost estimate is about $4.3 million.68 Although EPA rejected a similar overlap argument in 2024 with regard to the 2021 cost analysis for Domtar, finding that

retrofit costs are separate from contingency costs,69 the 2023 revised analysis must still support its particular application of the retrofit factor.

Fourth, EPA’s Final Action explains that the sales tax charge should not be included.70 The State kept the sales tax charge in the SIP Supplement, explaining that:

In EPA’s final rule, EPA noted that a sales tax charge should not have been included in the cost analysis for the wet scrubber due to North Carolina’s Sales and Use Tax Exemption for pollution abatement equipment (for air or stream) for manufacturing. However, EPA also noted that removing the sales tax from the cost analysis for the wet scrubber accounts for approximately 1% of the total direct cost, which would not appreciably change the overall cost/ton identified by the FFA. The DAQ did not remove the sales tax from the cost analysis because Domtar would have to apply for a sales tax exemption and there is no guarantee that they would receive the exemption. Furthermore, the methodology used in the cost analysis follows the methods in EPA’s CCM which produces “study estimates” within plus or minus 30% of the actual costs. Therefore, the DAQ did not revise the FFA to exclude the sales tax in the direct cost for the wet scrubber as the impact of the revision would not significantly influence the results.71

The 2023 cost analysis puts the tax at $119,850, or 3 percent of the $3,995,000 equipment quote, up from $95,610 in 2021.72

The SIP Supplement cites no statute, rule, or Department of Revenue procedure supporting DAQ’s assertion that Domtar might not receive the sales tax exemption. The only support it cites is the “Information regarding North Carolina’s Sales and Use Tax Exemption” referenced by the State,73 which explains that “Pollution abatement equipment for manufacturing is exempt from sales and use tax.”74 Nothing on the cited page describes an application,

approval, or certification process for the sales tax exemption. The cited sales and use tax materials provide for a purchaser’s certificate of exemption furnished to the seller; they do not require advance DEQ certification like the separate property tax exclusion.75 The Department of Revenue’s certificate of exemption directs the purchaser: “Do not send this form to . . . the NC Department of Revenue. Send the completed form to the seller and keep a copy for your records.”76 In contrast, for the property tax exclusion, explained on the same page, a taxpayer “must apply to the county . . . and apply to the North Carolina Department of Environmental Quality for exclusion certification.”77 The sales tax paragraph contains no such requirement.

The statutory exemption covers qualifying pollution-abatement equipment and is claimed through the purchaser’s certificate of exemption. Section 105-164.13(5e) of the General Statutes exempts sales of mill machinery and mill machinery parts and accessories to a manufacturing plant; the Department of Revenue classifies “pollution abatement equipment,” including “parts and accessories,” and “chemicals for use in air or stream pollution abatement equipment” as mill machinery; and a purchaser claims the exemption by furnishing a certificate of exemption to the seller, rather than by applying to any agency.78 The exemption covers “any equipment, including parts and accessories, used to eliminate, prevent or reduce air and water pollutants emitted resulting from the manufacturing process.”79 A scrubber that removes SO₂ from a pulp mill boiler is equipment that reduces air pollutants from the manufacturing process. The State provides no rationale to support another conclusion.

The State also asserts that the Control Cost Manual method is only accurate to plus or minus 30 percent, so removing the tax “would not significantly influence the results.”80 That range accounts for estimation uncertainty; it does not justify including a tax from which the equipment is exempt. Including the sales tax is inconsistent with the Control Cost Manual’s overall purpose to compare costs “for like sources installed with like controls,” which the State recognizes.81 It is unreasonable for DAQ to include a tax that North Carolina manufacturers do not pay and which would make Domtar’s analysis incomparable to FFAs conducted in other states. Moreover, DAQ does not explain why a $119,850 sales tax charge, calculated as 3 percent of the scrubber equipment quote, that also increases the cost items calculated from purchase-equipment costs should be considered insignificant, particularly given that the State has failed to articulate any basis for rejecting the scrubber as too costly.

Additionally, the State must clarify whether the FFA included tax on caustic for the wet scrubber. The State exempts “chemicals purchased by manufacturers to be used in air or stream pollution abatement equipment or processes.”82 As discussed below, the 162.5 percent increase in the sodium hydroxide (“NaOH”) price, from $0.16 in the 2021 analysis to $0.42 per pound in the 2023 analysis, came from Domtar’s finance department83 with no supporting documentation. Caustic is the largest annual cost for the wet scrubber at $4,449,093.84 Therefore, DAQ must clarify whether the price includes sales tax; if it does, the sales tax must also be removed from the caustic price. DAQ must require Domtar to itemize the caustic price so that any tax included in it can be identified and removed.

Each corrected cost calculation in the 2026 Kordzi Report removes the equipment sales tax.85

DAQ must therefore respond to EPA’s finding that the lack of similar sources with wet scrubber controls is not a reason to reject a wet scrubber; identify any cost-effectiveness threshold it applies and explain, under the four statutory factors, why it would reject a scrubber at the corrected cost; either use a retrofit factor of 1.0 or provide the site-specific documentation and cost estimates the Control Cost Manual and RHR require for a higher factor; and remove the sales tax from the equipment cost and, if it is included, from the caustic price.

2.	The Supplemental SO2 Four-Factor Analysis Fails to Adequately

Document Assumptions.

DAQ must require Domtar to document, and must itself verify, each cost input on which the revised analysis depends. A state must “document the technical basis, including modeling, monitoring, cost, engineering, and emissions information, on which the State is relying to determine the emission reduction measures that are necessary to make reasonable progress in each mandatory Class I Federal area it affects.”86 The EPA Proposal explained that this requirement “plays an important function in requiring a state to document the technical basis for its decision making so that the public and EPA can comprehend and evaluate the information and

analysis the state relied upon to determine what emission reduction measures must be in place to make reasonable progress.”87 The burden of documentation rests on the State. As EPA has explained, “it is the State that is required to ‘document the technical basis’” for its control decisions,88 and neither the CAA nor the RHR “require[s] sources . . . to evaluate and determine the emission reduction measures that are necessary to make reasonable progress.”89 A state therefore cannot meet this requirement by repeating a source’s claims. In its final action on Utah’s SIP, for instance, EPA faulted that state because it “simply reiterated [the source’s] statement without offering an assessment of its accuracy.”90

EPA disapproved North Carolina’s long-term strategy “due to the inadequate record associated with the four-factor analysis (FFA) for Domtar.”91 EPA found that “North Carolina did not provide adequate information in the record for rejecting [a wet scrubber] control,” and that “[d]ue to this inadequate record, it was not reasonable for the State to conclude that a wet scrubber at HFB2 is not necessary for reasonable progress.”92 The SIP Supplement does not fix this problem. DAQ again relies on an analysis that Domtar prepared and submitted: the February 2023 revised FFA, which Domtar updated “using revised mill-specific values obtained from finance department records, vendor quotes, and the current prime interest rate.”93 DAQ states that it “believes the February 2023 FFA reflects the basis upon which the DAQ has determined

that the wet scrubber is not cost-effective,”94 but the SIP Supplement does not describe any independent review by DAQ of the inputs Domtar supplied. Chemical costs account for $2,754,201 of the $3,701,177 increase in total annual costs. Yet for the caustic price behind that increase, DAQ says only that it was “provided by Domtar finance department.”95 As discussed below, several of the inputs that drive the higher 2023 cost lack the documentation the RHR requires.

The SIP Supplement’s own summary of the revised analysis confirms that DAQ did not independently assess that analysis. In Table 2, DAQ provides that the total purchased equipment cost rose by $862,890, or 25.29 percent.96 However, Table 2 notes that the total purchased equipment cost in the 2021 analysis was $3,441,960 while the total purchased equipment cost in the 2023 analysis was $4,274,850, which is a difference of $832,890, or 24.20 percent.97 Additionally, in its narrative description of the changes between the 2021 and 2023 analyses, DAQ states that “[c]apital costs increased by 25.24%,” and its executive summary reports a capital cost increase of more than 25 percent. Yet, Table 2 shows that total capital investment rose 14.24 percent; the 25 percent figure describes only the scrubber equipment line.98 An agency that had independently checked these inputs would not have carried the inconsistencies into its SIP submission. DAQ must correct these inconsistencies and explain its independent evaluation of the underlying cost inputs.

The operating-cost inputs that drive the 2023 increase come from Domtar’s internal records, and neither those records nor the necessary supporting documentation are in the SIP Supplement. Table A-1 attributes the 2023 rates for electricity, caustic, fresh water, and wastewater disposal to “[m]ill specific rates from Finance Department Records for 2023.”99 However, nothing in the SIP Supplement provides any documentation or records from Domtar’s Finance Department supporting those caustic and utility rates. Rather, the only “supporting information” attached to the revised FFA consists of two emails. The first is a January 2023 vendor email that gives a “rough estimate” based on the assumption “that materials have increased by 25% and that inflation is 5%/yr over 2.5 years,” and lists the scrubber equipment as a single $3,995,000 line item.100 The second is a Domtar finance email estimating, by reference to a traded Domtar loan, that new seven-year financing would cost Domtar “about 10.65%,”101 which the analysis did not use.102 The SIP Supplement adds Appendix E, a February 2026 market report showing a 19.16 percent yield on a Domtar loan trading at 72.5 cents on the dollar

and maturing in 2028,103 which the analysis also did not use.104 The vendor email supplies a rough equipment quote and escalation assumptions, but neither email supplies the underlying invoices, contracts, or finance department records supporting the caustic and utility rates.

EPA has identified similar documentation problems in other states’ cost analyses. In Missouri, EPA identified “specific errors, over- or underestimations, inappropriate or unexplained assumptions, and inconsistencies with the EPA Air Pollution Control Cost Manual” and proposed “to find certain aspects of the cost analyses are not well supported.”105 In Utah, EPA proposed to find that because the source never prepared a revised cost analysis “remedying the shortcomings Utah had initially identified,” “Utah did not satisfy 40 CFR 51.308(f)(2)(iii)’s requirement to document the technical basis” for its control determinations.106 The SIP Supplement leaves the following inputs undocumented:107

(a) Caustic price. DAQ reports that the price of caustic rose from $0.16 to $0.42 per pound, a 162.5 percent increase, “as provided by Domtar finance department.”108 The only support is a narrative list of “drivers for a 2020-2023 cost increase” from Domtar’s “Senior Category Manager for Commodity Chemicals,” such as “[e]nergy inflation” and “Russia–Ukraine disruption.”109 The SIP Supplement contains no invoice, purchase contract, or published price index showing what Domtar paid for caustic in 2023. A list of market factors may explain why prices rose, but it does not establish the actual purchase price. The 2023 analysis then applies the same $0.42 per pound price to every year of the scrubber’s assumed 30-year life. Whether $0.42 per pound was obtainable in 2023 is not the decisive question: Domtar’s only support for the figure is an unexplained reference to mill-specific finance department records—records that were not actually provided. And even taking Domtar’s price as given, the analysis appears to apply a price per pound of dry sodium hydroxide to the weight of a 50 percent solution. If that is the pricing basis, it roughly doubles this

portion of the caustic cost.110 Caustic is the largest annual cost item, at $4,449,093 of $7,211,123 in total annual costs, making its price particularly important to the cost- effectiveness calculation.111 The 2026 Kordzi Report shows that the $0.42 price appears to be 31 to 69 percent higher than Domtar’s 2020 price escalated by the producer price index for caustic soda, and that it reflects a short-lived market peak in early 2023.112 The 2026 Kordzi Report also shows that Domtar overstated the quantity of caustic the scrubber would use.113

(b) Fresh water. The fresh water rate rose from $0.28 to $0.99 per 1,000 gallons, a 253.6 percent increase.114 At the same time, the wastewater disposal rate fell from $0.55 to $0.41 per 1,000 gallons, a 25.5 percent decrease.115 Both rates come from the same finance department records that are not included in the record, and the SIP Supplement explains neither change nor why the cost of water supply and the cost of wastewater disposal would move in opposite directions. The missing documentation also prevents independent verification of these rates.

(c) Retrofit factor. As discussed above, the 1.3 retrofit factor adds $3,830,047 to the total capital investment, and its stated reasons (a remote vendor estimate, the lack of an engineering or constructability study, and possible delays) do not document above- average retrofit difficulty.116

(d) Sales tax. As discussed above, DAQ kept a $119,850 sales tax charge on equipment that is exempt from such a tax under State law, and it cites no statute, rule, or Department of Revenue procedure for its assertion that Domtar might not receive an exemption from sales tax for a wet scrubber.117

DAQ must require Domtar to supply, and must include in the SIP, the documentation behind each of these inputs: invoices, contracts, or a published price index for caustic, fresh water, and wastewater rates; and the site-specific basis for any retrofit factor above 1.0. Where Domtar cannot document an input, DAQ must use Control Cost Manual defaults or published market data instead.

3.	Wet Scrubber Controls for HFB2 Are Cost-Effective and Necessary to

Make Reasonable Progress.

DAQ again fails to provide a rational basis for rejecting wet scrubber controls on HFB2. Even accepting the State’s unreasonable $7,519-per-ton estimate, a wet scrubber is cost- effective, as that cost falls below thresholds EPA has approved for other states.118 For instance, EPA approved Nevada’s reliance on a $10,000/ton cost-effectiveness threshold.119 Similarly, EPA approved Oregon’s use of “a cost-effectiveness threshold of $10,000 or less per ton of reductions.”120 The higher thresholds accepted elsewhere underscore the need for DAQ to explain why the scrubber cost is unreasonable here.

EPA acknowledged in the Final Action that the HFB2 cost-effectiveness values “are below the thresholds used by other states during the second planning period, such as Colorado, Nevada, and New Mexico which elected to set cost effectiveness thresholds of $10,000/ton of pollutant removed.”121 Although EPA stated that thresholds adopted by other states “do not automatically compel other states to follow suit” and “[e]ach state has discretion to set (or not set) a reasonable cost threshold and provide a justification for FFA outcomes,”122 thresholds adopted by other states provide a useful comparison point for assessing whether DAQ’s claim that a wet scrubber is not cost-effective is reasonable, particularly given that DAQ has not adopted a cost-effectiveness threshold itself or otherwise provided any objective basis for assessing control costs. Apart from the unexplained $5,000-per-ton figure in the Domtar analysis it relies on, DAQ offers no justification for calling $7,519 per ton “too excessive” other than reasons that are not part of the four statutory factors.123 In the Final Action, EPA identified Utah as a state that “did not adequately justify its determination to not adopt controls as part of its FFA at cost-effectiveness values higher than the value North Carolina considered for Domtar.”124 As discussed above, EPA finalized that disapproval because Utah never justified the cost level at which it treated controls as not cost-effective.125 In Missouri, EPA also proposed to find unreasonable that State’s use of a cost threshold “to summarily reject control measures, often with cost effectiveness values just above the selected threshold value,” explaining that in later planning periods “potential controls will get more expensive on a cost per

ton basis. However, the statute still requires states to continue to make reasonable progress towards the national goal.”126

The corrections and assumptions explained in the 2026 Kordzi Report further reduce the estimated cost per ton. The 2026 Kordzi Report corrects the caustic price (using Domtar’s 2020 price escalated by the producer price index) and the caustic quantity (using the sodium hydroxide content of the caustic solution rather than its total weight, the expected annual SO₂ removal rather than the scrubber’s design peak, plus the caustic needed for hydrogen chloride (“HCl”) at the permitted limit) and removes the sales tax. Those corrections alone reduce the cost- effectiveness of a wet scrubber for HFB2 to $3,671 per ton. Further correcting the cost analysis to use a retrofit factor of 1.0 reduces the cost-effectiveness to $3,214 per ton, and also removing the unjustified fan cost reduces the cost-effectiveness to $2,813 per ton.127

In its final Utah action, EPA faulted that State for failing to explain why costs above $5,750 were not cost-effective.128 The 2026 Kordzi Report’s corrected cost estimates would also fall below the $6,800 per ton threshold in EPA’s Hawaii proposal, which treated values “at, below, or slightly above” that figure as cost-effective, and the $6,250 to $7,800 per ton cost thresholds Washington’s Department of Ecology identified for NOx and particulate matter controls at chemical pulp mills in developing its plan.129 These comparisons provide context for evaluating the cost of controls.

The other three statutory factors also do not provide a basis for rejecting wet scrubber controls for HFB2. Domtar states that it would need “at least three years” to install controls after EPA approves the SIP, an ordinary compliance schedule. In any event, a measure may not be excluded merely because it would become operational after the end of the planning period.130 The energy and non-air quality environmental impacts Domtar identifies, additional electricity, water, and wastewater, are already monetized in the annual cost estimate.131 And Domtar identifies no planned retirement date for HFB2; its own analysis assumes a 30-year scrubber life.132

The record shows that a wet scrubber on HFB2 is technically feasible and cost- effective,133 and DAQ has offered no reasoned basis under the four statutory factors for rejecting it. Under the four statutory factors, a wet scrubber for this unit is necessary to make reasonable progress and must be included in the State’s SIP. DAQ must revise its determination to require a wet scrubber on HFB2, with an enforceable SO₂ limit reflecting at least 95 percent control, and submit that limit for incorporation into the SIP.

B.	North Carolina Still Has Not Included Enforceable Limits in the SIP for

Domtar, as the CAA and RHR Require.

The CAA requires each SIP to include “enforceable emission limitations and other control measures, means, or techniques . . . as may be necessary or appropriate to meet the applicable requirements” of the Act,134 and the regional haze program requires that the measures necessary to make reasonable progress be in the SIP itself.135 EPA disapproved North Carolina’s long-term strategy in part because the SIP lacked enforceable fuel restrictions for Domtar’s HFB1, and it cautioned that any emission limitations DAQ identifies for incorporation into the SIP “must be legally and practicably enforceable.”136 The SIP Supplement does not meet either requirement.

1.	North Carolina Continues to Exclude Necessary Fuel Restrictions for

Domtar’s No. 1 Hog Fuel Boiler from the SIP.

EPA identified the lack of enforceable fuel restrictions for HFB1 as “the second basis for disapproval of North Carolina’s LTS.”137 EPA acknowledged that a control analysis for a unit projected to emit 12 tons of SO₂ per year “would not likely yield any cost-effective controls.”138 But EPA explained that the record “documents higher SO₂ emissions from HFB1 in 2015, 2016, 2017, 2018, and 2019, and notes that there are no state or federally enforceable fuel restrictions on HFB1.”139 EPA indicated that it was “concerned that the SIP submission does not include enforceable fuel restrictions for HFB1 at Domtar,” citing Committee for a Better Arvin.140 The earlier emissions from this unit ranged from 58.22 tons in 2019 to 223.12 tons in 2018.141

DAQ “acknowledges EPA’s concerns” but declines to revise the SIP.142 It offers four reasons. First, Domtar’s December 2023 permit removed high-volume, low-concentration (“HVLC”) gases from the fuels HFB1 is permitted to burn, so, according to DAQ, “there are no permit terms that could be incorporated into the regulatory SIP.”143 Second, HFB1’s remaining permitted fuels “are either low-sulfur fuels or do not contain any sulfur.”144 Third, Domtar has not operated HFB1 since 2020. Fourth, Domtar “would need to apply for a permit revision” to burn HVLC gases again, and any potential NAAQS impacts “would be evaluated during the permit revision process.”145 None of these reasons cures the defect EPA identified.

The HFB1 fuel restrictions must be incorporated into the SIP. Removing HVLC gases from the permit does not answer EPA’s concern, because the permit can be revised through the State’s permitting process without a SIP revision. As EPA has explained, merely citing permit requirements “does not satisfy CAA 110(a)(2)(A), CAA 169A(b)(2), and 40 CFR 51.308(f)(2), which require the SIP itself to contain the measures on which the state is relying to make reasonable progress. Inclusion in the SIP makes emission limits and other measures permanent (meaning they cannot be subsequently revised without an EPA-approved SIP revision) and federally enforceable.”146 EPA has made the same point about permits specifically: “Title V permit requirements are not permanent and therefore may not be relied upon for SIP requirements unless those components of the permit are submitted for inclusion into the SIP.”147 Once requirements are approved into the SIP, “only changes made through the statutory SIP revision process may modify” them.148 In Georgia, EPA noted that IP-Savannah had stopped burning coal voluntarily but “was still permitted to burn coal,” and it explained that “[w]ithout this incorporation into the SIP, the source could request a permit modification to begin combusting coal again, which would be inconsistent with the requirement to achieve reasonable progress under the CAA and RHR.”149 DAQ’s response poses that same risk. Domtar may seek a permit revision to burn HVLC gases again, and DAQ would then evaluate only “potential impacts on the National Ambient Air Quality Standards.”150 A NAAQS review conducted in the permitting context does not address the Act’s regional haze requirements. As EPA explained in approving Ohio’s plan, incorporating a limit into the SIP for regional haze purposes “ensures that

the limit cannot be modified outside the Regional Haze context even if the SO₂ maintenance plan . . . no longer warrants the limit based on NAAQS compliance.”151

The underlying Title V permit retains HFB1/HVLC references, although DAQ excludes the relevant HFB1 provisions from its proposed SIP incorporation by strikethrough.152 In the underlying permit, Condition 2.1 A.4.a lists the “HVLC Gas Collection System” without the “when burned in the No. 2 Hog Fuel Boiler” qualifier attached to the low-volume, high- concentration (“LVHC”) and stripper off-gas (“SOG”) systems. DAQ excludes that gas- collection list from the proposed SIP excerpt.153 The underlying permit’s best available control technology (“BACT”) table in Condition 2.1 A.7.a also retains a carbon monoxide limit of 1,646 pounds per hour for HFB1 for “HVLC gases being fired with lignin/biomass fuel/sludge.”154 That HFB1 row is struck from the proposed SIP excerpt as well.155 Elsewhere, the Title V permit still lists HFB1 “As Control Device” under the federal pulp mill standards, the New Source Performance Standards (“NSPS”) subpart BB and the Maximum Achievable Control Technology (“MACT”) standards at subpart S.156 Those standards are themselves “applicable requirements” that the permit must implement. DAQ must reconcile the remaining permit references with the removal of HVLC gases from HFB1’s fuel list.157 These provisions may be drafting remnants. They do not supply the SIP-enforceable HFB1 fuel restrictions EPA identified.158 If DAQ relies on the removal of HVLC gases from HFB1’s fuel list to forgo further controls, it must incorporate an unambiguous, enforceable restriction into the SIP.

DAQ’s reliance on Domtar’s Title V permit is a further problem. The permit language DAQ proposes to incorporate comes from Permit No. 04291T54, a Title V permit issued on May 13, 2026.159 Title V permits are state-issued, are revised or reopened through the permitting process, and expire and are renewed on a fixed term.160 Indeed, the expiration date of Permit

No. 04291T54 was May 31, 2026,161 which appears to be an error since Title V permits generally run for a period of five years.162 Terms that appear in the permit today can therefore be changed, deleted, or lost on renewal, or can expire without any SIP revision, and EPA has said as much: “Title V permit requirements are not permanent and therefore may not be relied upon for SIP requirements unless those components of the permit are submitted for inclusion into the SIP.”163 Domtar’s own permit history demonstrates these points. EPA’s proposal on North Carolina’s first submission noted that the permit the State had identified for incorporation was superseded after EPA received the SIP revision, and DAQ had to ask EPA to take the same terms from a later permit.164 The SIP Supplement contains numerous permit numbers, including on pages 7 and 14, although Section 3.2.4.1 and Appendix C identify Permit No. 04291T54.165 DAQ must correct the inconsistent numbers throughout to identify unambiguously which permit version and conditions it submits for SIP incorporation. Only the conditions DAQ lists in Section 3.2.4.1 would become federally enforceable through the SIP. DAQ says it is “not requesting that EPA include the entire permit in the SIP.”166 Everything else in the permit, including the provisions that still refer to HVLC gases and HFB1, stays outside the SIP and remains subject to the Title V modification and renewal process rather than the SIP revision process. Under CAA sections 110(i) and (l), measures that a state relies on to make reasonable progress cannot be modified outside the SIP revision process.167 Until DAQ adopts the HFB1 fuel restriction as an unambiguous, stand-alone SIP condition, the Title V permit cannot take the place of one.

DAQ can incorporate fuel restrictions into the SIP. DAQ’s assertion that, because the permit purportedly no longer allows HFB1 to burn HVLC, “there are no permit terms that could be incorporated” is not correct.168 DAQ could incorporate into the SIP the HFB1 fuel list in the permit together with an express prohibition on firing HVLC gases and other non-condensable

gases in HFB1. And if the permit lacks an express prohibition, DAQ can adopt one directly as a SIP condition; it need not wait for a permit term to exist. The permit would then pick up the SIP requirement at its next revision or renewal as an applicable requirement.169 DAQ’s own Supplement shows this is feasible: in this same SIP Supplement, DAQ proposes to incorporate permit conditions for HFB2 into the SIP.170 Nothing prevents DAQ from doing the same for HFB1.

The remaining fuels and the emission projection do not limit HFB1’s emissions. Although DAQ claims HFB1 only emits 12 tons per year (“tpy”) of SO₂, HFB1 is not subject to any enforceable limit that prevents it from emitting more than that. It is Domtar’s own projection of its planned use of HFB1, calculated for biomass using a median emission factor of 0.00318 pounds of SO₂ per MMBtu—a fuel Domtar says it “will not likely ever again fire” in the unit.171 But HFB1 is still permitted to burn lignin, natural gas, biomass, No. 2 fuel oil, used oil, and sludge.172 DAQ provides no data to support its statement that all of these fuels are low in sulfur or contain no sulfur, and nothing in the SIP Supplement would place fuel sulfur limits on HFB1 in the SIP. And when HFB1 fires oil, the applicable SO₂ limit is 0.80 pounds per MMBtu, roughly 250 times the emission factor behind the 12 tpy projection.173 The State’s SO₂ limit for HFB1 is 2.3 pounds per MMBtu when firing lignin, biomass fuel, sludge, or natural gas,174 and Condition 2.1 A.4.c.i requires no monitoring or recordkeeping to show compliance with that limit when HFB1 fires those fuels.175 For scale, applying that limit at the 835 MMBtu per hour rate that applies when HFB1 fires biomass with other fuels, with year-round operation, yields about 8,400 tons of SO₂ per year, hundreds of times the 12 tpy projection.176 This illustrative calculation is not a determination of HFB1’s potential to emit, but it shows that the SO₂ limit alone does not secure the 12 tpy projection. In Missouri, EPA explained that a requirement to burn only a particular type of coal “still allows for a wide variability in the sulfur content of the coal and, therefore, emissions from the source.”177 The same is true of a permitted fuel list with no sulfur limits in the SIP.

HFB1’s non-operation is voluntary. Nothing in the SIP Supplement limits HFB1’s hours of operation or the fuels it may burn, and nothing prevents Domtar from resuming operation at any time.178 EPA has rejected reliance on this kind of unenforceable operating assumption. In disapproving part of Utah’s SIP, EPA explained that since Utah relied “on an assumption that Hunter and Huntington’s historical seasonal operational patterns will continue,” “the State was required to incorporate enforceable measures into its SIP to ensure that assumption holds

true.”179 And in Wyoming, EPA explained that where a state relies on a shutdown to forgo a Four-Factor Analysis, “the shutdown must be federally enforceable (for example, through inclusion in the SIP).”180 HFB1 remains permitted and available to operate.

DAQ must therefore either (1) incorporate into the SIP enforceable fuel restrictions for HFB1, including a prohibition on firing HVLC gases and other non-condensable gases and limits on the sulfur content of the fuels HFB1 may burn, with monitoring, recordkeeping, and reporting sufficient to make them practicably enforceable, or (2) conduct a Four-Factor Analysis for HFB1 based on every fuel the boiler is permitted to burn.181

2.	The Permit Conditions Proposed for Inclusion in the SIP for Domtar

HFB2 Are Not Practicably Enforceable.

EPA has already identified deficiencies in the HFB2 monitoring, recordkeeping, and reporting provisions that must be corrected before they can be incorporated into the SIP. When EPA proposed to conditionally approve the 2022 SIP Revision, it identified deficiencies in the HFB2 permit conditions DAQ had submitted. These included Condition 2.1 A.4.c, which exempted HFB2 from monitoring, recordkeeping, and reporting when firing wood residue and natural gas.182 EPA’s proposed conditional approval relied on a commitment letter in which DAQ promised to revise the permit and to submit the revised conditions for incorporation into the SIP.183

EPA’s Final Action did not decide whether the permit conditions were adequate. Because EPA disapproved the long-term strategy rather than conditionally approving it, EPA incorporated no permit conditions into the SIP. EPA also found it “unnecessary to respond” to the Conservation Groups’ comments on their enforceability.184 EPA made clear, however, that the issue carries forward to any SIP revision:

Any emission limitations identified for incorporation into the SIP in such a SIP revision (or into a FIP in the case of an eventual FIP) must be legally and

practicably enforceable, and EPA encourages the State to consider the Conservation Groups’ comments if the State opts to develop a SIP revision.185

The SIP Supplement asks EPA to incorporate revised HFB2 conditions from Permit No. 04291T54.186 DAQ explains that it revised the permit “based on discussions with the EPA” and suggests that the May 13, 2026, permit fulfills its commitment letter.187 But EPA’s informal review of a state permit is not approval of those conditions into the SIP. EPA decides whether SIP measures are legally and practicably enforceable only when it acts on the SIP submission through notice-and-comment rulemaking.188 EPA first proposed conditional approval based on DAQ’s commitments to revise the HFB2 monitoring, recordkeeping, and reporting requirements, then disapproved after considering public comments.189 As explained below, the revised conditions still are not practicably enforceable. The SIP Supplement also does not respond to the comments EPA directed DAQ to consider.

DAQ proposes to incorporate into the SIP portions of Conditions 2.1 A.4, 2.1 A.6, and 2.1 A.7 of Domtar’s Title V permit, Permit No. 04291T54, together with the permit’s general deviation-reporting, compliance-certification, and emissions-inventory provisions.190 Only the conditions EPA approves become SIP measures; the rest of the permit can be revised without a SIP revision.191 The conditions DAQ selects must therefore, together with the SIP-approved rules that already apply, make HFB2’s SO₂ limit practicably enforceable. That limit is 2.3 pounds per MMBtu when HFB2 fires lignin, biomass, sludge, natural gas, or pulp mill gases.192 As explained below, compliance is calculated from inputs Domtar selects, the calculation is made only monthly, and the data behind it are not routinely reported, so the State, EPA, and the public cannot readily determine whether HFB2 meets the limit.

The EPA Proposal stated that these “SIP-approved emission limits must have adequate monitoring, recordkeeping, and periodic reporting requirements in order to be legally and practicably enforceable.”193 EPA treats a limit as practicably enforceable when it has “the necessary reporting and recordkeeping requirements such that the source reports compliance with and that can practically be measured and enforced.”194 The Act requires SIPs to provide for “periodic reports on the nature and amounts of emissions and emissions-related data from such sources,” and those reports must be “available at reasonable times for public inspection.”195

Domtar and DAQ choose the inputs. Compliance with the 2.3 pounds per MMBtu limit is calculated, not measured. Domtar determines HFB2’s heat input using “the fuel heat content (measured by either direct analysis or vendor certification or using a documented value) and a flow device (i.e., mass flow meters, etc.) as approved by the DAQ.”196 The SO₂ values in the compliance equation are monthly totals, in pounds per month, and the proposed conditions do not say how those totals are to be determined. They require only that Domtar keep “documentation of the emission factors used for EF and EO . . . including any relevant stack testing reports.”197 The proposed SIP excerpts also omit Condition 2.1 A.4.b, the permit’s testing provision for HFB2’s SO₂ limit.198 EPA’s regulations require each SIP to provide for “[e]nforceable test methods for each emission limit specified in the plan,” and EPA’s completeness criteria require a SIP submission to describe its “[c]ompliance/enforcement strategies, including how compliance will be determined in practice.”199 Under the SIP Supplement, Domtar selects the heat-content method and the emission factors, and DAQ approves the flow device outside the SIP process. Furthermore, the SIP Supplement conditions contain no criteria governing these choices. EPA has explained that SIP provisions allowing a state or source to change requirements outside the SIP revision process are impermissible unless the changes have no effect “unless and until the EPA approves the changes through a SIP revision,” or the discretion “is adequately bounded, such that at the time the EPA approves the SIP provision the Agency can evaluate it for compliance with applicable CAA requirements and evaluate the potential impacts of the state’s exercise of that discretion.”200 The SIP Supplement provisions do not meet those requirements. EPA has already identified this gap for HFB2. In the EPA Proposal, EPA found that Condition 2.1 A.7 identified fuel sampling and analysis as the method to evaluate compliance with HFB2’s 0.80 pounds per MMBtu SO₂ limit, but that the condition did “not identify a method to convert fuel sampling and analysis data into SO₂ emissions values comparable with the emission limit.”201 EPA concluded that the limit “is not practicably enforceable for SIP purposes without inclusion of a corresponding conversion methodology.”202 The revised conditions add compliance equations, but the same gap remains. As explained above, the conditions do not say how Domtar is to determine the monthly SO₂ emissions (EF and EO) used to demonstrate compliance with the 2.3 pounds per MMBtu limit. Additionally, the conditions do not say how Domtar is to determine the SO₂ emission rate for lignin, biomass fuel, and sludge (EW) used to show compliance with the 0.80 pounds per MMBtu limit.203

In contrast, when EPA approved a permit-based SO₂ limit for Brunswick Cellulose into Georgia’s SIP, it did so only after Georgia specified the emission factor the source must use, and EPA placed that factor in the SIP table. EPA explained that this requirement “renders the emission limit practically enforceable.”204 The difference here is not the use of an emission

factor but the absence of one: the SIP Supplement does not specify the required emission factors, heat-content method, and flow measurement device and criteria, or sufficiently bound DAQ’s discretion outside the SIP revision process. And in Oregon, EPA noted the “numerous variables and assumptions inherent in the formula” previously used to calculate a pulp mill power boiler’s NOx emissions and relied on the State’s new requirement for continuous emission monitoring systems (“CEMS”) as “a reliable method of monitoring and recording emissions data.”205

Whatever compliance method DAQ retains, the SIP must specify the required methods, emission factors and measurement criteria, or establish sufficiently bounded procedures for approving alternatives. EPA has explained that when permit conditions are incorporated into a SIP, “it is important that the state provides that to the extent such provisions are approved and incorporated into the state’s SIP, such provisions, as approved, cannot be modified by later changes made to the underlying agreements or permits outside of the SIP revision process.”206 Changes to the monitoring requirements outside those bounds must undergo SIP revision before taking effect for SIP purposes.

Monthly calculation. For the 2.3 pounds per MMBtu limits, HFB2’s heat input and SO₂ emission rate are calculated only “on a monthly basis.”207 Rule .0516 itself specifies no averaging period,208 and the State’s SIP-approved test methods measure compliance over much shorter periods: when compliance with an SO₂ standard is demonstrated for a combustion source by Method 6 stack sampling, “compliance shall be determined by averaging six 20-minute samples taken over such a period of time that no more than 20 minutes elapses between any two consecutive samples.”209 The SIP-approved rule also allows a fuel-sulfur method and addresses equivalent methods.210 Test duration alone does not establish a legal averaging period; rather,

DAQ must identify the averaging period that applies to the 2.3 pounds per MMBtu limit and show that a monthly calculation demonstrates compliance with the limit under all relevant fuel combinations. A monthly calculation can mask hours or days when HFB2 exceeds 2.3 pounds per MMBtu, including when it burns the high-sulfur pulp mill gases DAQ describes elsewhere in the SIP Supplement,211 and DAQ does not explain why a monthly calculation is adequate to show compliance with the limit. EPA has explained that a practicably enforceable SIP limit “contains appropriate averaging times.”212 DAQ knows how to write an averaging period: for PCS Phosphate’s sulfuric acid plants it proposes 3-hour and 365-day rolling averages measured by CEMS.213 DAQ must identify and justify an appropriate averaging period and compliance method for HFB2.

Reporting. The records that would show compliance are kept by Domtar but not routinely submitted to the State. Domtar must record the monthly heat input, the monthly SO₂ emission rate, each fuel’s heat content and amount, and the emission factors it uses.214 But the only routine reports of these monitoring and recordkeeping activities are semiannual “summary report[s] . . . of monitoring and recordkeeping activities” that “identify all periods of noncompliance . . . or a statement that no periods of noncompliance occurred.”215 Monthly fuel amounts need only be made “available to an authorized representative of DAQ upon request.”216

Similarly, the deviation reports and annual compliance certification that DAQ also proposes report Domtar’s own conclusions about compliance, not the underlying data.217 The proposed conditions also require an annual emissions inventory, but none of these reports clearly requires routine submission of the monthly inputs and calculations needed to reproduce the HFB2 SO₂ determination. DAQ must require those data or explain how existing reporting and records-access provisions allow timely independent verification. EPA’s approval of permit conditions into Nevada’s SIP illustrates the importance of the underlying monitoring. There, EPA accepted quarterly reports of excess emissions, or certifications that none occurred, for units that operate NOx CEMS, relying on recordkeeping and reporting sufficient “to determine continuous compliance” and on existing SIP record-retention rules.218 HFB2 has no comparable continuous monitoring.

SO₂ CEMS. For PCS Phosphate’s sulfuric acid plants, DAQ proposes to incorporate into the SIP short-term and long-term SO₂ limits on 3-hour and 365-day rolling averages, based on SO₂ concentrations measured “at least once every 15 minutes” under an SO₂ CEMS plan.219 DAQ proposes no comparable CEMS-based limit for HFB2, which accounts for about 90 percent

of Domtar’s projected 2028 SO₂ emissions and nearly 99 percent of the projected emissions from its two hog fuel boilers.220 CEMS are practical for this type of boiler. HFB2 already operates a NOx CEMS and a continuous opacity monitoring system, and DAQ’s own cost table budgets for re-certifying them after they are relocated when the scrubber is installed.221 At its Ashdown, Arkansas mill, Domtar “presented monthly average SO₂ and NOx emission rates from 2017– 2019 for the boilers based on CEMS records.”222 DAQ should require SO₂ CEMS on HFB2, set the SO₂ limit with an averaging period tied to the CEMS data, require quarterly reporting of the emissions data whether or not exceedances occur, and submit these requirements for incorporation into the SIP.223 At a minimum, if DAQ keeps a calculation-based method, the SIP must specify the heat-content methods Domtar must use and emission factors representative of HFB2’s emissions, identify the averaging period for the 2.3 pounds per MMBtu limit, and require routine reporting of the monthly inputs and calculations.224

II.	North Carolina’s Reliance on Visibility Trends, Emission Reductions, and NAAQS

Compliance Does Not Substitute for a Reasoned Four-Factor Analysis for Domtar.

A.	North Carolina Again Rejects a Wet Scrubber for Domtar Based on Non-

Statutory Factors.

The State provides four overarching reasons for not requiring the wet scrubber (discussed in more detail below): Domtar complies with the NAAQS;225 costs are “too excessive” in light of more than ten years of statewide NAAQS compliance;226 putting the existing limits in the SIP will help prevent future impairment;227 and Swanquarter is “on track” to meet the 2028 reasonable progress goal.228 The State also asserts that the scrubber is “not cost-effective for remedying of any existing anthropogenic visibility impairment at the Swanquarter or any other Class I areas.”229

None of the State’s reasons rests on the four statutory factors. Although the second reason invokes cost, it measures the scrubber’s cost against statewide NAAQS compliance rather than weighing the cost of compliance under the four factors. The cost objection thus rests on the same premise as the NAAQS argument: that reductions achieved under other programs make

further controls unnecessary.230 The State also folds visibility into its cost conclusion by calling the scrubber “not cost-effective for remedying” existing impairment.231

EPA has cautioned against this merging of cost and visibility. In adopting the 2017 RHR revisions, EPA explained that “[c]ost effectiveness is usually quantified in terms of the cost per ton of emission reduction, and thus does not directly involve visibility effects.”232 A state may consider visibility, but “a state that elects to consider an additional factor . . . must consider it in a reasonable way that does not undermine or nullify the role of the four statutory factors in determining what controls are necessary to make reasonable progress.”233 DAQ does not explain how its assessment of visibility benefits relates to the Four-Factor Analysis. It lets an unexplained judgment about visibility override the cost factor. DAQ must withdraw these non- statutory rationales and base its HFB2 determination on the four statutory factors, considering visibility, if at all, only in the reasonable way EPA has described.

B.	Visibility Progress at Swanquarter Does Not Relieve North Carolina of Its

Obligation to Require Reasonable Controls at Domtar.

DAQ may not rely on Swanquarter’s progress toward its glide path to reject a wet scrubber at HFB2, and it must evaluate Domtar’s contribution at every Class I area the mill may affect. DAQ asserts that “North Carolina is on track to meet the 2028 RPGs for the Swanquarter Class I area,” and that observed visibility “is well below both the glide path and on track to meet the 2028 RPG for Swanquarter.”234 DAQ then relies on that progress to conclude that the scrubber “is not cost-effective for remedying of any existing anthropogenic visibility impairment.”235 But visibility progress at Swanquarter does not answer whether a wet scrubber at HFB2 is necessary to make reasonable progress. EPA said so in the EPA Proposal: “Being on or below the URP is not a ‘safe harbor’; i.e., achieving the URP does not mean that a Class I area is making ‘reasonable progress’ and does not relieve a state from using the four statutory factors to determine what level of control is needed to achieve such progress.”236 The uniform rate of progress (“URP”) “is not based on consideration of the four statutory factors and therefore cannot answer the question of whether the amount of progress being made in any particular planning period is ‘reasonable progress.’”237

DAQ’s claim that the scrubber is “not cost-effective for remedying” existing impairment is, in substance, an argument that the visibility benefit does not justify the control.238 EPA has explained that while visibility may be used “when comparing and choosing between multiple reasonable control options, it should not be used to summarily reject controls that are reasonable given the four statutory factors.”239 Because many sources contribute to regional haze, “it would not be appropriate for a state to reject a control measure (or measures) because its effect on the RPG is subjectively assessed as not ‘meaningful.’”240 EPA applied these principles in Wyoming, finding the State’s “reliance on purportedly small visibility improvements to reject otherwise reasonable and cost-effective emission reduction measures was both unjustified and unreasonable,”241 and reaffirmed them in New Jersey, agreeing “that visibility should not be used to summarily reject controls that are reasonable given the four statutory factors.”242

In its supplemental Domtar determination, DAQ also considers only Swanquarter.243 It dismisses any contribution to impairment at the four western North Carolina Class I areas as “highly unlikely” without analysis,244 and that determination does not address out-of-state Class I areas. EPA recognized that DAQ “may need to reconsider the interstate consultation element” to the extent Domtar contributes to impairment at out-of-state Class I areas.245 NPCA’s screening-level map identifies Domtar as a potential contributor to visibility impairment at Cape Romain, Brigantine, Shenandoah, Great Smoky Mountains, Shining Rock, Otter Creek, Linville Gorge, James River Face, and Dolly Sods, as well as Swanquarter.246 A state’s long-term strategy must address “each Class I area outside the state that may be affected by emissions originating from within the state.”247

DAQ cannot rely on Swanquarter’s position relative to the glide path to reject a wet scrubber at HFB2. It must also evaluate Domtar’s contribution to visibility impairment at the

other Class I areas Domtar may affect, including out-of-state areas, and address those areas in its interstate consultation.

C.	Compliance with the SO2 NAAQS Does Not Demonstrate Reasonable

Progress Under the Regional Haze Program.

DAQ’s main reason for rejecting the scrubber is compliance with the NAAQS. DAQ asserts that Domtar “has and continues to operate in compliance with the state and federal SO₂ emission standards” that “protect the primary (health-based) and secondary (welfare-based) NAAQS”; that the scrubber is “too excessive to further reduce SO₂ emissions when North Carolina has been complying with both the primary and secondary NAAQS statewide for over 10 years”; and that “[t]he current federal and state SO₂ rules that apply to HFB2 have been protective of the NAAQS and visibility impairment in Class I areas.”248

Congress created the visibility program in section 169A because the NAAQS and permitting programs did not protect visibility in Class I areas.249 As EPA explained in Wyoming, Congress determined “that a visibility protection program is needed in addition to the CAA’s National Ambient Air Quality Standards and Prevention of Significant Deterioration programs, as further emission reductions may be necessary to adequately protect visibility in Class I areas throughout the country.”250 Unlike the NAAQS, “the visibility program prescribed by CAA sections 169A and 169B, and implemented in 40 CFR 51.308, is not a health-based program. Rather, the program has a statutory goal of preventing any future, and remedying any existing, impairment of visibility in mandatory class I Federal areas which impairment results from manmade air pollution.”251 EPA has further explained that incorporating a limit into the SIP for regional haze purposes protects it “even if the SO₂ maintenance plan . . . no longer warrants the limit based on NAAQS compliance.”252 Compliance with the SO₂ NAAQS therefore does not answer whether a wet scrubber on HFB2 is necessary to make reasonable progress.

DAQ’s further assertion that existing SO₂ rules “have been protective of . . . visibility impairment in Class I areas” is unsupported.253 DAQ cites no analysis of HFB2’s contribution to

visibility impairment. And, as discussed below, HFB2’s SO₂ emissions have roughly doubled since 2016 under those same rules. DAQ must remove NAAQS compliance as a basis for rejecting the scrubber, and it must either support its claim that existing SO₂ rules protect visibility with an analysis of HFB2’s contribution to impairment or withdraw that claim.

D.	Statewide Emission Reductions from Other Sources Do Not Excuse Domtar

from Making Reasonable Progress.

DAQ also relies on “[d]eclining statewide emissions from 2016 through 2022.”254 HFB2’s SO₂ emissions did not decline. HFB2’s SO₂ emissions roughly doubled, from 526 tons in 2016 to 1,046 tons in 2024, and exceeded the 1,010 tpy 2028 projection DAQ relies on in every year from 2020 through 2024, ranging from 1,034 to 1,169 tons.255 DAQ’s comparison of total facility emissions to the facility-wide projection does not address this increase in HFB2’s emissions.256

Nor does the facility-level comparison help DAQ. DAQ asserts that “total facility SO₂ emissions through 2024 have remained below the 2028 projected emissions,” but its own Table 3 shows facility emissions of 1,182 tons in 2021 and 1,121 tons in 2022, both above the 1,120-ton projection on which the reasonable progress goals were modeled, and facility emissions rose from 715 tons in 2016 to 1,060 tons in 2024.257 Even if part of HFB2’s increase reflects the routing of HVLC gases away from HFB1, the facility-wide emissions DAQ used to model the 2028 goals have themselves been exceeded.

Although the RHR requires states to consider emission reductions from ongoing air pollution control programs,258 EPA has rejected using those reductions in place of the Four- Factor Analysis. A state “should generally not reject cost-effective and otherwise reasonable controls merely because there have been emission reductions since the first planning period owing to other ongoing air pollution control programs or merely because visibility is otherwise projected to improve at Class I areas.”259 In Wyoming, EPA disapproved a plan that relied on “declining emission trends” and on “past and projected emission reductions resulting from other regulatory programs,” finding that reasoning “not reasonably moored to the statute and regulations.”260 As EPA explained, “[t]he fact that some emissions reductions have already been achieved and are expected to occur in the future, whatever the source of those reductions, does not exempt states from determining the measures necessary to make reasonable progress based on consideration of the four statutory factors in each planning period.”261 DAQ should not rely

on statewide emission trends to reject controls at Domtar and should instead decide whether a wet scrubber is necessary by applying the four statutory factors to HFB2.

E.	North Carolina’s Reasonable Progress Goals Cannot Justify Its Long-Term

Strategy Because They Reflect the Same Deficient Four-Factor Analysis.

DAQ must determine the necessary control measures before using them to establish its reasonable progress goals.262 The goals modeled without a wet scrubber at HFB2 therefore cannot establish that the scrubber is unnecessary.263 EPA disapproved the RPGs because “they reflect a deficient LTS” and stated that “the State should re-evaluate them as part of its potential SIP revision.”264 EPA applied the same reasoning in Wyoming: because the State “unreasonably determined that no control measures were necessary for reasonable progress” for certain units, its goals “cannot reflect the amount of progress it should be making towards the national visibility goal.”265 The State instead asserts that “no additional modeling is needed to reevaluate the RPGs” and that its LTS revisions “do not change the RPGs.”266

DAQ cannot rely on its reasonable progress goals, or on Swanquarter’s position relative to the URP, as a basis for rejecting a wet scrubber at HFB2.267 DAQ must revise its reasonable progress goals to reflect the measures in its revised long-term strategy that can be fully implemented by the end of the second planning period. If the wet scrubber cannot reasonably become operational until after that period, DAQ may not rely on that timing to exclude it from the measures necessary to make reasonable progress.268 Full new modeling is not necessarily required: EPA’s guidance allows “post-modeling adjustments to the RPGs to account for the fact that final LTS decisions . . . may not be known until late in the process.”269 DAQ’s assertion that “no additional modeling is needed” because its revisions “do not change the RPGs”270 does not establish that the goals would remain appropriate after correction of the deficiencies in the long- term strategy. DAQ must explain whether the corrected long-term strategy requires changes to its reasonable progress goals.

III.	The SIP Supplement Fails to Address Other Remaining Deficiencies in the SIP.

In their prior comments to DAQ and EPA, the Conservation Groups identified numerous other deficiencies in North Carolina’s Regional Haze SIP. The SIP Supplement addresses only Domtar and the PCS Phosphate permit conditions, so the other identified deficiencies remain uncorrected. EPA disapproved “the portions of the Haze Plan addressing 40 CFR 51.308(f)(2),”271 the long-term strategy element, as a whole, so any corrective SIP revision must satisfy all of 40 C.F.R. § 51.308(f)(2); although EPA stated that North Carolina’s source selection approach and its decision not to evaluate nitrogen oxides controls “appear reasonable,” it did so without the benefit of a corrected long-term strategy.272 The Conservation Groups incorporate their prior comments and the accompanying Kordzi reports by reference, do not waive any position stated in them, and urge DAQ to correct the following additional flaws:

• DAQ continues to ignore the significant flaws in the visibility modeling conducted by the Visibility Improvement State and Tribal Association of the Southeast (“VISTAS”) that it relied on for its source selection process. The VISTAS modeling did not accurately reflect the likely contribution of sources in North Carolina and other states to visibility impairment at Class I areas in the Southeast, causing North Carolina to improperly exclude major sources of haze-forming pollution from Four-Factor Analyses.273 • DAQ continues to rely on VISTAS’ multi-step source selection process and unreasonably high selection thresholds. Based on this VISTAS process, North Carolina selected an inappropriately small set of sources for Four-Factor Analyses. North Carolina should analyze additional sources of visibility impairing pollution that likely contribute to impairment at in-state and out-of-state Class I areas, including Duke Energy’s Belews Creek Steam Station, Cliffside Steam Station, Marshall, Mayo Electric Generating Plant, and Roxboro Steam Electric Plant.274 • DAQ failed to consider any NOx controls in any Four-Factor Analyses. North Carolina based its decision to ignore NOx controls on VISTAS’ flawed and inaccurate modeling. North Carolina overlooked the fact that the VISTAS modeling did not accurately reflect the contribution of nitrate to visibility impairment in the Southeast, including at North Carolina’s own Class I areas.275

• North Carolina must reevaluate its reasonable progress goals to reflect its corrected long-term strategy, including measures that can be fully implemented by the end of the second planning period.276

IV.	Conclusion

The SIP Supplement does not correct the deficiencies that led EPA to partially disapprove North Carolina’s Regional Haze SIP. The State again rejects a wet scrubber for HFB2 based on Domtar’s cost analysis, which relies on an undocumented 1.3 retrofit factor, a sales tax charge EPA said should not be included, undocumented cost assumptions, and an inflated caustic price and usage rate. The State also relies on factors outside the four statutory factors. The SIP Supplement still has no enforceable fuel restrictions for HFB1, and the permit conditions DAQ proposes for HFB2 are not practicably enforceable.

DAQ should withdraw the SIP Supplement and correct these errors. The Act and the RHR require the first, second, and fourth corrections below; the third is the Conservation Groups’ recommended means of meeting the enforceability requirement. Specifically, DAQ:

• must require a wet scrubber on HFB2 and a SIP-enforceable SO₂ limit reflecting at least 95 percent control; • must either include enforceable fuel restrictions for HFB1 in the SIP or conduct a Four-Factor Analysis based on every fuel the boiler is permitted to burn; • should require SO₂ continuous emission monitoring for HFB2, as it proposes for PCS Phosphate, or, if it keeps a calculation-based method, must specify in the SIP the heat-content methods Domtar is to use and emission factors representative of HFB2’s emissions, identify the averaging period for the 2.3 pounds per MMBtu limit, and require routine reporting of the monthly inputs and calculations; and • must revise its reasonable progress goals to reflect the measures that can be fully implemented by the end of the second planning period, without excluding necessary controls from the long-term strategy solely because they would become operational after that period.

EPA’s partial disapproval became effective on December 23, 2024, triggering a deadline of December 23, 2026, for EPA to promulgate a Federal Implementation Plan (“FIP”) unless, before promulgation, North Carolina corrects the deficiencies and EPA approves the corrective SIP revision.277 If DAQ cannot correct these deficiencies before that date, the statutory consequence is a FIP, and DAQ should not submit a SIP Supplement that EPA cannot lawfully approve. In the first planning period, Montana “did not submit a SIP, knowing that as a

consequence EPA would be required to propose and finalize a FIP.”278 The Conservation Groups request that these comments and the attached exhibits be included in the record DAQ transmits to EPA with any SIP submission.279

Sincerely,

Eboni Preston Goddard, Ph.D.
Southeast Regional Director
National Parks Conservation Association|
775 Haywood Road, Suite A
Asheville, NC 28806
ep******@**ca.org

Cheryl A. Schreier
Chair
Coalition to Protect America’s National Parks
2 Massachusetts Ave NE, Unit 77436
Washington, DC 20013
Ed****@********ps.org

Will Harlan
Southeast Director
Center for Biological Diversity
64 Walker Creek Road
Barnardsville, NC 28709
Wh*****@*****************ty.org

Sara Laumann
Principal
Laumann Legal, LLC
3800 Buchtel Blvd. S. #100236
Denver, CO 80210
sa**@**********al.com
Counsel for National Parks Conservation Association

Enclosures

Comment letter footnotes

1. N.C. Dep’t of Env’t Quality, Div. of Air Quality, Supplement to Regional Haze State Implementation Plan for North Carolina Class I Areas for Second Planning Period (2019–2028) (Pre-Hearing Draft, Sept. 18, 2026) [hereinafter SIP Supplement].

2. N.C. Dep’t of Env’t Quality, Div. of Air Quality, Final Regional Haze State Implementation Plan for North Carolina Class I Areas (2019–2028 Planning Period) (Apr. 4, 2022) [hereinafter 2022 SIP Revision]; see also N.C. Dep’t of Env’t Quality, Div. of Air Quality, Regional Haze State Implementation Plan for North Carolina Class I Areas (2019–2028 Planning Period) (Pre-Hearing Draft, Aug. 30, 2021) [hereinafter Proposed Haze Plan].

3. Joe Kordzi, A Partial Review of the Supplement to the Regional Haze State Implementation Plan for North Carolina (Oct. 2026) [hereinafter 2026 Kordzi Report] (attached as Ex. 1); Joe Kordzi, Domtar HFB2 Cost- Effectiveness (Excel workbook) (attached as Ex. 2).

4. Nat’l Parks Conservation Ass’n et al., Conservation Organizations Comments on North Carolina’s Proposed Regional Haze State Implementation Plan (SIP) for North Carolina Class I Areas for the Second Planning Period (2019–2028) (Oct. 15, 2021) [hereinafter 2021 Conservation Groups’ State Comments] (attached as Ex. 3); Joe Kordzi, A Review of the North Carolina Regional Haze State Implementation Plan (Oct. 2021) [hereinafter 2021 Kordzi Report] (attached as Ex. 4).

5. Air Plan Approval; North Carolina; Second Period Regional Haze Plan, 89 Fed. Reg. 67341 (proposed Aug. 20, 2024) [hereinafter EPA Proposal].

6. Nat’l Parks Conservation Ass’n et al., Comments on Proposed Air Plan Approval; North Carolina; Second Period Regional Haze Plan, Docket No. EPA-R04-OAR-2022-0786 (Sept. 19, 2024), https://www.regulations.gov/comment/EPA-R04-OAR-2022-0786-0081 [hereinafter 2024 Conservation Groups’ EPA Comments] (attached as Ex. 5).

7. Joe Kordzi, A Review of EPA’s Proposal for the North Carolina Regional Haze State Implementation Plan (Sept. 2024) [hereinafter 2024 Kordzi Report] (attached as Ex. 6).

8. Air Plan Partial Approval and Partial Disapproval; North Carolina; Second Period Regional Haze Plan, 89 Fed. Reg. 92573 (Nov. 22, 2024) [hereinafter Final Action].

9. Id. at 92588.

10. Id.

11. SIP Supplement at i, 5, 43.

12. Final Action, 89 Fed. Reg. at 92574.

13. Id. at 92589.

14. SIP Supplement at 13.

15. See Final Action, 89 Fed. Reg. at 92589 (although the State “reviewed the RACT/BACT/LAER Clearinghouse and did not identify devices similar to HFB2,” “[u]nless a wet scrubber cannot be installed on HFB2, the lack of a similar scrubber in the RACT/BACT/LAER Clearinghouse is not a relevant reason for rejecting the control”); U.S. Env’t Prot. Agency, Guidance on Regional Haze State Implementation Plans for the Second Implementation Period, EPA-457/B-19-003, at 28 (Aug. 2019), https://www.epa.gov/sites/default/files/2019-08/documents/8-20-2019_- _regional_haze_guidance_final_guidance.pdf [hereinafter 2019 Guidance] (“The first step in characterizing control measures for a source is the identification of technically feasible control measures . . . .”); cf. U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice of Final Rulemaking for Air Plan Approval; Indiana; Regional Haze Plan for the Second Implementation Period 61 (Dec. 19, 2025), Docket ID No. EPA-R05- OAR-2021-0963-0084, https://www.regulations.gov/document/EPA-R05-OAR-2021-0963-0084 [hereinafter Indiana RTC] (crediting a control review that searched “air permits for other iron and steel mills and other similar sources” and a prior BACT analysis, “as well as” the RBLC, and describing the RBLC as containing “case-specific information on the ‘best available’ air pollution technologies that have been required to reduce the emission of air pollutants from stationary sources”). EPA also explained that it “appears that it is possible to install a wet scrubber on the particular unit (and achieve at least a 95 percent SO2 reduction), and neither Domtar nor the State argued otherwise.” Final Action, 89 Fed. Reg. at 92589.

16. In Arkansas, Domtar’s Ashdown Mill No. 2 Power Boiler, a “biomass hybrid suspension grate” boiler that burns bark and wood residuals, among other fuels, “is equipped with . . . two venturi scrubbers in parallel for removal of SO2,” using “scrubbing fluid composed of NaOH.” Air Plan Approval; Arkansas; Regional Haze State Implementation Plan for the Second Implementation Period, 90 Fed. Reg. 43030, 43054 & n.158 (proposed Sept. 5, 2025), finalized, 91 Fed. Reg. 55268 (Aug. 27, 2026).

17. Final Action, 89 Fed. Reg. at 92588; 2021 Conservation Groups’ State Comments at 25 & n.130 (scrubber cost- effective at $3,600 per ton); 2024 Conservation Groups’ EPA Comments at 30–33 & nn.253–56, 271–77 (DAQ “baldly rejected” the scrubber; State must “cogently explain” its choice).

18. Final Action, 89 Fed. Reg. at 92589.

19. Id.

20. Id. at 92588.

21. SIP Supplement at ii, 8 tbl.1, 9. The State also explains that “[t]he DAQ provided the revised FFA to EPA on February 21, 2023, before EPA issued its proposed and final actions on North Carolina’s Regional Haze SIP. However, EPA did not consider this work in its proposed and final actions because it was not submitted for FLM review and public comment.” Id. at ii.

22. Id. at 13.

23. Id.

24. U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice for Air Plan Partial Approval and Partial Disapproval; Utah; Regional Haze State Implementation Plan for the Second Implementation Period; Air Plan Disapproval; Utah; Prong 4 (Visibility) for the 2015 8-Hour Ozone National Ambient Air Quality Standard 79 (Nov. 22, 2024), Docket ID No. EPA-R08-OAR-2024-0389-5687, https://www.regulations.gov/document/EPA- R08-OAR-2024-0389-5687 [hereinafter Utah RTC] (citing 40 C.F.R. § 51.308(f)(2)(iii); Nat’l Parks Conservation Ass’n v. EPA, 788 F.3d 1134, 1142–43 (9th Cir. 2015)).

25. Id.

26. SIP Supplement, App. B (Domtar 2023 FFA) § 2.3, at B-5 to B-6 (comparing the $3,400 per ton CSAPR Update value and the $3,000 per ton WRAP value); id. § 2.3.2 & tbl.2-2, at B-8 (concluding that a wet scrubber is not considered cost effective because capital cost exceeds $14 million and cost effectiveness exceeds $5,000 per ton).

27. Id. at B-5 to B-6, B-8.

28. See 2026 Kordzi Report § 5.4, at 17–19 & tbl.4; see infra Section I.A.3.

29. Id.

30. 2024 Conservation Groups’ EPA Comments at 30–31 & nn.259, 263–64 (1.3 factor inflated); see also 2021 Kordzi Report at 43–44.

31. Final Action, 89 Fed. Reg. at 92589.

32. Id.

33. Id.

34. Id. at 92589 n.68 (quoting U.S. Env’t Prot. Agency, EPA Air Pollution Control Cost Manual § 5, ch. 1, at 1-16 (7th ed. Apr. 2021), https://www.epa.gov/sites/default/files/2021- 05/documents/wet_and_dry_scrubbers_section_5_chapter_1_control_cost_manual_7th_edition.pdf [hereinafter Control Cost Manual]).

35. Id. at 92589–90.

36. SIP Supplement at 10 tbl.2.

37. Id. at 11 tbl.2 n.(h). This same note appears on the Appendix B cost table. Id., App. B at B-12 n.(h). The Domtar analysis likewise states: “Capital, operating, and total annual cost estimates for each feasible pollution control technique are presented in Appendix A. These are screening level cost estimates and are not based on detailed site- specific engineering studies.” Id., App. B at B-5 (emphasis added).

38. 2026 Kordzi Report § 3.3.2, at 6–7; SIP Supplement, App. B at B-7, B-12; SIP Supplement at 11 n.(h).

39. SIP Supplement at 13.

40. 2026 Kordzi Report § 3.3.1, at 5 (citing Control Cost Manual § 1, ch. 2, at 27–29 (7th ed. Nov. 2017)).

41. SIP Supplement, App. B at B-6.

42. Id. at B-7.

43. Id.

44. Id.

45. Id. at B-7 to B-8.

46. Id. at B-6.

47. As EPA explained in its Utah proposal, the Sunnyside facility claimed dry scrubbing was infeasible based on “space limitations,” and EPA found that “Sunnyside did not submit any documentation to substantiate the space constraints . . . . Its appeal to space limitations consisted of a single conclusory sentence with no supporting details or explanation.” Air Plan Partial Approval and Partial Disapproval; Utah; Regional Haze State Implementation Plan for the Second Implementation Period; Air Plan Disapproval; Utah; Prong 4 (Visibility) for the 2015 8-Hour Ozone National Ambient Air Quality Standard, 89 Fed. Reg. 67208, 67250 (proposed Aug. 19, 2024) [hereinafter Utah Proposal]. EPA concluded that “Utah has not provided adequate technical documentation justifying the exclusion of a dry scrubber/DSI system from further consideration based on space constraints.” Id. EPA finalized the disapproval on this basis. Air Plan Partial Approval and Partial Disapproval; Utah; Regional Haze State Implementation Plan for the Second Implementation Period; Air Plan Disapproval; Utah; Prong 4 (Visibility) for the 2015 8-Hour Ozone National Ambient Air Quality Standard, 89 Fed. Reg. 95117, 95119 (Dec. 2, 2024). Utah itself pointed out that Sunnyside “did not adequately justify its application of a retrofit factor of 1.3 (which resulted in a 30% inflation of costs).” Utah Proposal, 89 Fed. Reg. at 67249.

48. Nw. Pulp & Paper Ass’n, Regional Haze Rule Four-Factor Analysis for Four Oregon Pulp and Paper Mills § 2.3.1, at 2-14 to 2-15 (June 2020), https://www.oregon.gov/deq/aq/Documents/haze-CascadePacificPulp- HalseyMill-FFA.pdf (“Currently known, site-specific factors that would limit the feasibility and increase the cost of installing additional controls include space constraints. A detailed engineering study for each of the controls evaluated in this report would be necessary before any additional controls were determined to be feasible or cost effective.”); see Air Plan Approval; OR; Regional Haze Plan for the Second Implementation Period, 89 Fed. Reg. 81361, 81378 & nn.121–22 (Oct. 8, 2024) (quoting the same passage); see also SIP Supplement, App. B at B-6 (nearly identical language).

49. Air Plan Approval; OR; Regional Haze Plan for the Second Implementation Period, 89 Fed. Reg. 13622, 13641 (proposed Feb. 23, 2024).

50. Id.

51. Air Plan Partial Approval and Partial Disapproval; Missouri; Regional Haze, 89 Fed. Reg. 55140, 55157 (proposed July 3, 2024) [hereinafter Missouri Proposal].

52. Id.

53. Id.

54. Id.

55. Id.

56. SIP Supplement, App. B (Domtar 2023 FFA) § 2.3.1, at B-6 (stating only that “space constraints” are a known site-specific factor and that a detailed engineering study “would be necessary”); id. § 2.3.2, at B-7 (explaining the 1.3 retrofit factor by the remote vendor estimate, the absence of a detailed engineering study, the unquoted fan replacement, and unanticipated delays, without mentioning space or any supporting estimate); id. tbl.A-1 n.(h), at B- 12 (acknowledging that “an engineering study and constructability study have not been performed”); SIP Supplement at 11 tbl.2 n.(h) (same); 2026 Kordzi Report § 3.3.1, at 5–6 (explaining that the Control Cost Manual treats a retrofit factor of 1.0 as a project of average difficulty and requires that any higher factor be appropriate and fully documented).

57. SIP Supplement, App. B at B-6.

58. Id. at B-7.

59. Id. at B-8.

60. See, e.g., Air Plan Partial Approval and Partial Disapproval; Wyoming; Regional Haze Plan for the Second Implementation Period, 89 Fed. Reg. 95121, 95124 (Dec. 2, 2024) (rejecting Wyoming’s plan to defer analysis of sources that “may warrant further analysis,” because “nothing in the CAA or RHR allows states to avoid their obligation to determine the measures necessary to make reasonable progress through consideration of the four statutory factors by delaying decisionmaking to a future date”).

61. SIP Supplement at ii.

62. Final Action, 89 Fed. Reg. at 92589.

63. 89 Fed. Reg. at 55157 (Missouri).

64. SIP Supplement, App. B at B-7.

65. Final Action, 89 Fed. Reg. at 92589 n.68.

66. Id. at 92590.

67. 2026 Kordzi Report § 3.2, at 2–4.

68. Id. § 3.3.2, at 6–7.

69. Final Action, 89 Fed. Reg. at 92590.

70. Id.

71. SIP Supplement at 13 (footnotes omitted); 2024 Conservation Groups’ EPA Comments at 30–31 & nn.260, 265– 66 (pollution control equipment exempt; DAQ gave no statutory or regulatory support for a case-by-case approach). DAQ’s “no guarantee” rationale repeats the case-by-case argument the Conservation Groups rebutted in 2024. See Indiana RTC at 64 (reporting Cleveland-Cliffs’ explanation that, “in response to the same comment from the Federal Land Managers, the control cost calculations were updated to remove the Indiana sales tax line item”).

72. SIP Supplement at 10 tbl.2; id., App. B at B-12 tbl.A-1.

73. SIP Supplement at 13 n.22.

74. Econ. Dev. P’ship of N.C., Pollution Abatement and Recycling, https://edpnc.com/incentives/pollution- abatement-and-recycling (last updated Aug. 13, 2024) [hereinafter EDPNC, Pollution Abatement] (attached as Ex. 7); see also N.C. Dep’t of Revenue, Form E-595E, Streamlined Sales and Use Tax Certificate of Exemption (Web- Fill rev. Apr. 2022), https://www.ncdor.gov/taxes-forms/sales-and-use-tax/sales-and-use-tax-forms-and- certificates/exemption-certificates/form-e-595e-streamlined-sales-and-use-tax-certificate-exemption (attached as Ex. 8); N.C. Gen. Stat. § 105-164.13(5e) (2025), https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105-164.13.html (exempting sales of mill machinery and mill machinery parts and accessories to a manufacturing industry or plant); N.C. Dep’t of Revenue, Sales and Use Tax Bulletins, SUTB 57-3, items 37–38, at 212–13 (Jan. 1, 2026), https://www.ncdor.gov/sutb-2026pdf/open (classifying pollution abatement equipment, and chemicals for use in air or stream pollution abatement equipment, as mill machinery); N.C. Gen. Stat. § 105-164.28(a) (2025), https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105-164.28.html (exemption claimed by purchaser’s certificate of exemption). Compare N.C. Gen. Stat. § 105-164.28(a), with id. § 105-275(8)a (2025), https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105- 275.html (property tax exclusion conditioned on DEQ certification).

75. N.C. Dep’t of Revenue, Form E-595E at 1–2.

76. Id. at 2.

77. EDPNC, Pollution Abatement.

78. N.C. Gen. Stat. § 105-164.13(5e); SUTB 57-3, items 37–38, at 212–13; N.C. Gen. Stat. § 105-164.28(a); see supra note 74.

79. EDPNC, Pollution Abatement.

80. SIP Supplement at 13.

81. Id. at 12.

82. EDPNC, Pollution Abatement.

83. SIP Supplement at 12 (“The increase in annualized costs was driven by the increase in chemical costs. The cost of caustic increased from $0.16 per lb NaOH to $0.42 per lb NaOH as provided by Domtar finance department. Domtar’s Senior Category Manager for Commodity Chemicals provided the following drivers for a 2020-2023 cost increase. Caustic soda is a commodity chemical, so its price depends on supply and demand, as well as energy costs, as they account for 40-50% of the manufacturing cost. • Energy inflation (biggest factor — caustic production is electricity-heavy); • Russia–Ukraine disruption, reducing European supply; • Production outages and lower capacity utilization in the U.S. & Europe; • High global demand, especially from alumina and detergents; • Salt and energy raw material cost increases; and • Post pandemic industrial rebound and logistics constraints.”); see also id., App. B at B-12 tbl.A-1 n.(d) (“Mill specific rates from Finance Department Records for 2023.”).

84. SIP Supplement at 10 tbl.2.

85. 2026 Kordzi Report § 5.4, at 17–19 & tbl.4.

86. 40 C.F.R. § 51.308(f)(2)(iii); see also 2019 Guidance at 32 (“every source-specific cost estimate used to support an analysis of control measures must be documented in the SIP”).

87. EPA Proposal, 89 Fed. Reg. at 67348.

88. U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice for Air Plan Partial Approval and Partial Disapproval; Wyoming; Regional Haze Plan for the Second Implementation Period 114 (Nov. 22, 2024), Docket ID No. EPA-R08-OAR-2023-0489-0480, https://www.regulations.gov/document/EPA-R08-OAR-2023- 0489-0480 [hereinafter Wyoming RTC] (rejecting the argument that EPA must identify cost-effective controls before finding a state’s analysis insufficient).

89. U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice for Air Plan Disapproval; Colorado; Regional Haze Plan for the Second Implementation Period 93 (Jan. 9, 2026), Docket ID No. EPA-R08- OAR-2024-0607-0069, https://www.regulations.gov/document/EPA-R08-OAR-2024-0607-0069 (addressing the energy and non-air quality environmental impacts factor).

90. Utah RTC at 143 (upholding the disapproval because Utah “unreasonably rejected DSI without providing adequate technical documentation”); see also Nat’l Parks Conservation Ass’n et al., Comments on Proposed Approval and Promulgation of Air Quality Implementation Plans; Oklahoma; Regional Haze State Implementation Plan for the Second Implementation Period, Docket No. EPA-R06-OAR-2022-0736, at 48 (Mar. 16, 2026), https://www.regulations.gov/comment/EPA-R06-OAR-2022-0736-0017 (quoting EPA’s 2022 comments faulting Oklahoma for agreeing “with all aspects of the submitted four-factor analyses and the conclusions made by the facilities without providing an independent assessment”).

91. Final Action, 89 Fed. Reg. at 92574.

92. Id. at 92589. EPA took similar positions in other second-period actions. See 89 Fed. Reg. at 95123 (Wyoming) (State “used unsubstantiated cost inputs” and “[i]n other instances, . . . provided no reasoning, technical data, or cost information to support its conclusions”); 89 Fed. Reg. at 95118 (Utah) (“Utah did not provide adequate support for its analysis of and conclusions regarding the costs of compliance.”); Partial Approval and Disapproval of Air Quality Implementation Plans; Arizona; Regional Haze State Implementation Plan for the Second Implementation Period and Prong 4 (Visibility) for the 2015 Ozone and 2012 Particulate Matter Standards, 89 Fed. Reg. 102744, 102768 (Dec. 18, 2024) (deviations from the Control Cost Manual require “relevant site-specific documentation”). See also 2024 Conservation Groups’ EPA Comments at 30 (State “included a number of unjustified or undocumented costs”); Sierra Club et al., Comments on Proposed Air Plan Partial Approval and Partial Disapproval; North Dakota; Regional Haze State Implementation Plan for the Second Implementation Period, Docket No. EPA- R08-OAR-2023-0495, at 12–13 (Aug. 9, 2024), https://www.regulations.gov/comment/EPA-R08-OAR-2023-0495- 0044 (analyses showed “[f]ailure to document and support cost assumptions”).

93. SIP Supplement, App. B at B-4.

94. SIP Supplement at 13; see also id. at ii n.4 (same).

95. Id. at 12; see also id. at 10–11 tbl.2 (chemical costs rose from $1,694,892 to $4,449,093, and total annual costs from $3,509,946 to $7,211,123).

96. Id. at 10–11 tbl.2.

97. Id.

98. Id. at ii, 9–10 tbl.2.

99. Id., App. B at B-12 tbl.A-1 n.(d); see also id. at 11 tbl.2 n.(e) (listing the 2021 and 2023 rates without identifying a source).

100. Id., App. B at B-14.

101. Id. at B-15 (email dated Feb. 14, 2023).

102. Id. at B-8 (capital recovery factor calculated using the prime rate of 7.75%, “while Domtar’s firm-specific long term borrowing rate is 10.65%”).

103. SIP Supplement at 12 (citing App. E); id., App. E at E-3.

104. Id., App. B at B-8 (capital recovery factor calculated using the prime rate of 7.75%). In any event, Domtar also did not provide an invoice, contract, or published price index for the caustic that accounts for most of the cost increase between the 2021 and 2023 analyses. SIP Supplement at 10–11 tbl.2 (chemical costs account for $2,754,201 of the $3,701,177 increase in total annual costs); see also Nat’l Parks Conservation Ass’n et al., Conservation Organizations’ Comments Submitted on Washington’s Proposed Regional Haze State Implementation Plan for 2018 to 2028, at 33 & n.126 (Nov. 23, 2021) (source “[f]ailed to include citations and support for statements regarding emission rates, retrofit factors, cost for ammonia reagent”) (attached as Ex. 9). Moreover, neither the 10.65% in the 2023 finance email nor 19.16% figures in the separate 2026 Appendix E material establishes Domtar’s firm-specific cost of financing a wet scrubber for HFB2, as explained in the 2026 Kordzi Report. 2026 Kordzi Report § 4, at 7–8. Thus, the cost analysis correctly used the then-current bank prime interest rate of 7.75%. 89 Fed. Reg. at 102768 (Arizona) (faulting the state for using “an interest rate that was above the then-current prime rate without adequate documentation”).

105. 89 Fed. Reg. at 55157 (Missouri).

106. Utah Proposal, 89 Fed. Reg. at 67250.

107. See 2026 Kordzi Report §§ 3.1–3.3, 5.2 & app. A, at 2–7, 10–15.

108. SIP Supplement at 11 tbl.2 n.(e), 12.

109. Id. at 12.

110. Id. at 12 n.(i) (capital recovery factor “based on 30-year scrubber life”); id., App. B at B-12 tbl.A-1 (single caustic rate of $0.42 per pound used to calculate annual cost); 2026 Kordzi Report § 5.2.2, at 15 (identifying the apparent mismatch between dry-NaOH pricing and a 50 percent solution usage rate); see also id. §§ 5.1–5.3, at 8– 17.

111. SIP Supplement at 10–11 tbl.2.

112. 2026 Kordzi Report § 5.2.1, at 11–15 & tbls.1–2.

113. Id. §§ 5.2.2–5.3, at 15–17; see infra Section I.A.3.

114. SIP Supplement at 10 tbl.2, 11 n.(e).

115. Id. at 11 n.(e); id., App. B at B-12 tbl.A-1 n.(d).

116. SIP Supplement at 10 tbl.2, 11 n.(h).

117. Id. at 10 tbl.2, 13.

118. Id. at 11 tbl.2.

119. U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice for Air Plan Approval; Nevada; Regional Haze State Implementation Plan for the Second Implementation Period 53 (Jan. 2026), Docket ID No. EPA-R09-OAR-2025-0101-0029, attachment 7 [hereinafter Nevada RTC]; see Approval and Promulgation of Air Quality Implementation Plans; Nevada; Regional Haze State Implementation Plan for the Second Implementation Period, 91 Fed. Reg. 5321 (Feb. 6, 2026).

120. 89 Fed. Reg. at 13638 (Oregon proposal); see also id. at 13643 (describing Oregon’s threshold as “one of, if not the highest, cost thresholds established by any state specifically for evaluating controls for the regional haze program”); 89 Fed. Reg. at 81370 (Oregon final action).

121. Final Action, 89 Fed. Reg. at 92589.

122. Id.

123. SIP Supplement at 13; see infra Section II.A.

124. Final Action, 89 Fed. Reg. at 92589 (citing Utah Proposal, 89 Fed. Reg. 67208).

125. 89 Fed. Reg. at 95118 (Utah); Utah RTC at 80.

126. 89 Fed. Reg. at 55155 (Missouri).

127. See 2026 Kordzi Report § 5.4, at 17–19 & tbl.4; see also 2024 Conservation Groups’ EPA Comments at 31 (2021 Kordzi Report corrected costs of $2,968 to $3,244 per ton).

128. 89 Fed. Reg. at 95118 (Utah); Utah RTC at 79–80.

129. Partial Approval and Partial Disapproval of Air Quality Implementation Plans; Hawaii; Regional Haze State Implementation Plan for the Second Implementation Period, 91 Fed. Reg. 7204, 7212 (proposed Feb. 17, 2026); Wash. Dep’t of Ecology, Ecology Responses to Comments for Chemical Pulp and Paper Mills, resps. to cmts. 14– 16, 24 (draft Jan. 11, 2021), https://ecology.wa.gov/getattachment/e6fade81-f205-4888-9744- 34710fc99e11/DRAFT-Response-to-FLM-comments-WEB_1_11_21.docx (cost thresholds of $6,250 per ton for SNCR and SCR, $6,300 per ton for low-NOx burners, and $7,800 per ton for particulate matter); see also Nat’l Parks Conservation Ass’n et al., Comments on Proposed Air Plan Partial Approval and Partial Disapproval; Missouri; Regional Haze, Docket No. EPA-R07-OAR-2024-0286, at 15 & n.78 (Sept. 3, 2024), https://www.regulations.gov/comment/EPA-R07-OAR-2024-0286-0392 (citing Wash. Dep’t of Ecology draft responses to Federal Land Manager comments for chemical pulp and paper mills).

130. SIP Supplement, App. B at B-9; 40 C.F.R. § 51.308(f)(2)(i).

131. SIP Supplement at 10 tbl.2; id., App. B at B-8 to B-9.

132. SIP Supplement at 12 n.(i).

133. See Final Action, 89 Fed. Reg. at 92589 (“Domtar and the State submitted a complete cost analysis and a vendor quote to install a wet scrubber on HFB2.”); 2026 Kordzi Report § 5.4, at 17–19 & tbl.4.

134. 42 U.S.C. § 7410(a)(2)(A).

135. Id. § 7491(b)(2); Comm. for a Better Arvin v. EPA, 786 F.3d 1169, 1175–77 (9th Cir. 2015); 40 C.F.R. § 51.308(f)(2) (long-term strategy “must include the enforceable emissions limitations, compliance schedules, and other measures that are necessary to make reasonable progress”).

136. Final Action, 89 Fed. Reg. at 92591–92.

137. Id. at 92590.

138. Id. at 92591.

139. Id.

140. Id. at 92590–91 (citing Comm. for a Better Arvin, 786 F.3d at 1175–77).

141. SIP Supplement at 7 n.19.

142. Id. at 7 (acknowledging EPA’s concerns about HFB1); id. at 8 (stating that DAQ “is not proposing to revise its SIP to incorporate enforceable permit conditions for HVLC gases for HFB1 into the regulatory SIP”); see also id. at ii, 43 tbl.14 (concluding “there is no need to incorporate enforceable fuel restrictions for HFB1 into the SIP”).

143. Id. at 7 (stating that HVLC gases “were removed from Section 1” of Domtar’s Permit No. 04291T51, issued December 21, 2023, and that “there are no permit terms that could be incorporated into the regulatory SIP since HVLC gases have been removed from the permit for HFB1”); see also id., App. C, Permit No. 04291T54, § 1, at 4 (C-10) (listing HFB1’s permitted fuels without HVLC gases).

144. Id. at 7; see also id., App. C, Permit No. 04291T54, § 1, at 4 (C-10) (listing HFB1’s permitted fuels).

145. Id. at 7–8.

146. Wyoming RTC at 81–82.

147. 89 Fed. Reg. at 55160 n.65 (Missouri).

148. Id. at 55161; see 42 U.S.C. § 7410(i), (l).

149. Air Plan Approval; Georgia; Second Period Regional Haze Plan, 89 Fed. Reg. 92038, 92058 (Nov. 21, 2024).

150. SIP Supplement at 8.

151. U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice for Air Plan Approval; Ohio; Regional Haze Plan for the Second Implementation Period 14 (June 17, 2025), Docket ID No. EPA-R05-OAR- 2021-0544-0162, https://www.regulations.gov/document/EPA-R05-OAR-2021-0544-0162 [hereinafter Ohio RTC]; see also id. at 12 (limit “must be included in the SIP . . . to make it federally enforceable and permanent”).

152. SIP Supplement at 14–21 & App. C (Permit No. 04291T54, a Title V permit issued May 13, 2026); see id. at 14 (requesting that EPA incorporate only identified italicized portions of the permit, excluding strikethroughs, rather than “the entire permit”); id. at 14–15, 19 (striking the relevant HFB1 provisions and gas-collection list).

153. SIP Supplement, App. C at C-25; id. at 14–15 (excluding the struck-through gas-collection list from the proposed SIP incorporation).

154. Id. at C-30; SIP Supplement at 19; see also id. at C-23.

155. Id. at C-30 (underlying permit BACT table); SIP Supplement at 19 (striking the HFB1 row); see also id. at C-23.

156. SIP Supplement, App. C at C-10 (listing HFB1 “As Control Device” under NSPS subpart BB and MACT subpart S).

157. See 40 C.F.R. §§ 70.2 (defining “applicable requirement” to include standards under sections 111 and 112 of the Act), 70.6(a)(1) (requiring each Title V permit to include the emission limitations and standards that assure compliance with all applicable requirements); SIP Supplement at 14–21 (identifying the permit conditions proposed for incorporation).

158. 89 Fed. Reg. at 92590–91 (response to comment 7.b); see 40 C.F.R. § 51.308(f)(2).

159. SIP Supplement, App. C at C-3, C-7 (Permit No. 04291T54, Fee Class: Title V, issued May 13, 2026, expiration date May 31, 2026).

160. 42 U.S.C. § 7661a(b)(5)(B); 40 C.F.R. §§ 70.6(a)(2), 70.7(b)–(c), (e); see also id. §§ 70.2, 70.6(a)(1) (independently applicable requirements).

161. SIP Supplement, App. C at C-7.

162. 42 U.S.C. § 7661a(b)(5)(B); 40 C.F.R. § 70.6(a)(2).

163. Missouri Proposal, 89 Fed. Reg. at 55160 n.65. EPA was describing Mississippi Lime Company’s Title V permit.

164. EPA Proposal, 89 Fed. Reg. at 67360.

165. SIP Supplement at 7 (referring to “Permit No. 0491T51” and “previous permit (0491T50)”); id. at 14, § 3.2.3 (identifying the May 13, 2026, issuance date but using “0491T54”); compare id. § 3.2.4.1 and App. C at C-3 (correctly identifying Permit No. 04291T54).

166. SIP Supplement at 14.

167. 42 U.S.C. § 7410(i), (l); see Missouri Proposal, 89 Fed. Reg. at 55161 (“Once approved by the EPA into the SIP as meeting the applicable SIP requirements, only changes made through the statutory SIP revision process may modify the approved requirements of the state’s SIP.”); see also id. (explaining that provisions allowing changes outside that process are “antithetical to the requirement that SIP provisions be permanent and enforceable, and not changed except pursuant to the statutory and regulatory processes for SIP revisions”); Nat’l Parks Conservation Ass’n et al., Comments on Visibility Protection: Regional Haze State Plan Requirements Rule Revision, Advanced Notice of Proposed Rulemaking, Docket No. EPA-HQ-OAR-2025-1477, at 33 (Dec. 1, 2025) (Title V permit terms “may be ‘federally enforceable’ for other purposes under the Clean Air Act,” but “the state-issued permits that make those emission limits enforceable can expire or be revised and thus do not meet the SIP requirement for permanence”).

168. SIP Supplement at 7 (“Consequently, there are no permit terms that could be incorporated into the regulatory SIP since HVLC gases have been removed from the permit for HFB1.”); see also id. at ii (stating that “there is no need to incorporate enforceable fuel restrictions for HFB1 into the SIP”); id. at 8 (stating that DAQ “is not proposing to revise its SIP to incorporate enforceable permit conditions for HVLC gases for HFB1 into the regulatory SIP”).

169. See 40 C.F.R. §§ 70.2, 70.7(c), (f)(1)(i).

170. SIP Supplement at 14 (§ 3.2.4.1); id., App. C.

171. SIP Supplement at 7 n.20.

172. Id. at 7; id., App. C at C-22.

173. SIP Supplement at 17 (Condition 2.1 A.6.b); id., App. C at C-22 to C-23.

174. Id. at C-22, C-25 (Condition 2.1 A.4.a).

175. Id. at C-25 (Condition 2.1 A.4.c.i); SIP Supplement at 15.

176. 2.3 lb/MMBtu × 835 MMBtu/hr × 8,760 hr ÷ 2,000 lb/ton = about 8,400 tpy. See SIP Supplement at 7; id., App. C at C-10, C-22 (835 MMBtu per hour maximum heat input when firing hog fuel in combination with any other fuel; 2.3 lb/MMBtu limit).

177. 89 Fed. Reg. at 55160 (Missouri).

178. 2024 Conservation Groups’ EPA Comments at 28 & n.245 (no SIP provision requires Domtar to operate the unit “infrequently”); 2021 Conservation Groups’ State Comments at 8 (retirements or operational changes must be enforceable SIP measures).

179. Utah RTC at 128.

180. Air Plan Partial Approval and Partial Disapproval; Wyoming; Regional Haze Plan for the Second Implementation Period, 89 Fed. Reg. 63030, 63060 (proposed Aug. 1, 2024); see also 89 Fed. Reg. at 95123 (Wyoming) (disapproving reliance on “planned but unenforceable source retirements”).

181. 2021 Conservation Groups’ State Comments at 25 & n.128 (“DAQ must either require the four-factor analysis or include enforceable measures in the SIP”); 2021 Kordzi Report at 41; 2024 Kordzi Report at 24–25; 2024 Conservation Groups’ EPA Comments at 28.

182. EPA Proposal, 89 Fed. Reg. at 67360–61.

183. Letter from Michael A. Abraczinskas, Dir., Div. of Air Quality, N.C. Dep’t of Env’t Quality, to Jeaneanne Gettle, Acting Reg’l Adm’r, EPA Region 4, at 1 (July 30, 2024) (reproduced in SIP Supplement, App. A at A-3); see SIP Supplement at 3–4 (§§ 2.2, 2.2.1); see also Letter from Michael A. Abraczinskas, Dir., Div. of Air Quality, N.C. Dep’t of Env’t Quality, to Jeaneanne Gettle, Acting Reg’l Adm’r, EPA Region 4 (July 30, 2024) (withdrawing request to incorporate Condition 2.1 A.4.c into the SIP) (reproduced in SIP Supplement, App. A at A-5).

184. Final Action, 89 Fed. Reg. at 92592.

185. Id.

186. SIP Supplement at 14 (§ 3.2.4.1); id., App. C.

187. SIP Supplement at 14 (§ 3.2.3).

188. 42 U.S.C. § 7410(k)(3); 40 C.F.R. § 52.02(a).

189. Compare EPA Proposal, 89 Fed. Reg. at 67360–61 (proposing conditional approval based on DAQ’s commitments), with Final Action, 89 Fed. Reg. at 92574 (issues “now subsumed under the broader partial disapproval”), and id. at 92592.

190. SIP Supplement at 14–21 (§ 3.2.4.1).

191. See supra Section I.B.1.

192. SIP Supplement at 14 (Condition 2.1 A.4.a).

193. EPA Proposal, 89 Fed. Reg. at 67360.

194. 89 Fed. Reg. at 55153 n.43 (Missouri).

195. 42 U.S.C. § 7410(a)(2)(F)(ii)–(iii); see 40 C.F.R. § 51.211; 89 Fed. Reg. at 55160–61 (Missouri).

196. SIP Supplement at 15 (Condition 2.1 A.4.c.ii).

197. Id. at 15–16 (Conditions 2.1 A.4.c.iii, 2.1 A.4.c.iv(E)).

198. Id. at 14 (§ 3.2.4.1) (proposing Conditions 2.1 A.4.a, c, and d); id., App. C at C-25 (Condition 2.1 A.4.b).

199. 40 C.F.R. § 51.212(c); 40 C.F.R. pt. 51, app. V, § 2.2(h); see 89 Fed. Reg. at 67360.

200. 89 Fed. Reg. at 55162 (Missouri).

201. EPA Proposal, 89 Fed. Reg. at 67361.

202. Id.

203. SIP Supplement at 15–16 (Condition 2.1 A.4.c.iii); id. at 17–18 (Condition 2.1 A.6.e.ii); see id. at 19–20 (Condition 2.1 A.7.d) (applying Condition 2.1 A.6.e to the 0.80 pounds per MMBtu limit in Condition 2.1 A.7.a).

204. 89 Fed. Reg. at 92057 (Georgia).

205. 89 Fed. Reg. at 81370–71 (Oregon final action).

206. 89 Fed. Reg. at 55161 (Missouri); see supra Section I.B.1.

207. SIP Supplement at 15–16 (Conditions 2.1 A.4.c.ii, 2.1 A.4.c.iii, 2.1 A.4.c.iv(B)).

208. 15A N.C. Admin. Code 02D .0516 (state effective June 1, 2023), approved, Air Plan Approval; North Carolina; Revisions to Regulations for Sulfur Dioxide Emissions from Combustion Sources, 90 Fed. Reg. 47610, 47611 (Oct. 2, 2025); U.S. Env’t Prot. Agency, Region 4, North Carolina State Implementation Plan, Subchapter 2D, Section .0500, Emission Control Standards, at 2D.0500-20 (July 2026), https://www.epa.gov/system/files/documents/2026- 07/02d.0500-clean.pdf [hereinafter Region 4 SIP Compilation, Section .0500]; see U.S. Env’t Prot. Agency, EPA Approved Statutes and Regulations in the North Carolina SIP, https://www.epa.gov/air-quality-implementation- plans/epa-approved-statutes-and-regulations-north-carolina-sip (listing state effective and EPA approval dates).

209. 15A N.C. Admin. Code 02D .2611(a) (SIP-approved version, state effective June 1, 2008), approved, Air Plan Approval; North Carolina; Miscellaneous Rules, 84 Fed. Reg. 14019, 14020 (Apr. 9, 2019); U.S. Env’t Prot. Agency, Region 4, North Carolina State Implementation Plan, Subchapter 2D, Section .2600, Source Testing, at PDF 13 (July 2026), https://www.epa.gov/system/files/documents/2026-07/02d.2600.pdf [hereinafter Region 4 SIP Compilation, Section .2600]; see also 15A N.C. Admin. Code 02D .0501(f) (state effective Nov. 1, 2020) (requiring the source testing procedures of Section .2600 to demonstrate compliance with rules in Section .0500), approved, Air Plan Approval; North Carolina; Revisions to Miscellaneous Particulate Matter Rules, 88 Fed. Reg. 75500, 75501 (Nov. 3, 2023), reprinted in Region 4 SIP Compilation, Section .0500, at 2D.0500-2; 15A N.C. Admin. Code 02D .2608 (state effective Nov. 1, 2019) (“For determining compliance with an applicable emission standard, the average of the results of all repetitions shall apply.”), approved, Air Plan Approval; North Carolina; Source Testing and Monitoring, 87 Fed. Reg. 60895, 60896 (Oct. 7, 2022), reprinted in Region 4 SIP Compilation, Section .2600, at PDF 8; see also 15A N.C. Admin. Code 02D .2611(b), (d), reprinted in Region 4 SIP Compilation, Section .2600, at PDF 13 (fuel-sulfur and equivalent-method provisions).

210. 15A N.C. Admin. Code 02D .2611(b) (allowing fuel burning sources “not required to use continuous emissions monitoring” to demonstrate compliance by stack sampling or by fuel sulfur analysis, and specifying no averaging period), (d) (prescribing ASTM methods for fuel sulfur analysis and providing that “[t]he Director may approve ASTM methods different from those described in this Paragraph if they will provide equivalent or more reliable results”), reprinted in Region 4 SIP Compilation, Section .2600, at PDF 13.

211. See SIP Supplement at 7 (describing HVLC gases as “high sulfur”).

212. EPA Proposal, 89 Fed. Reg. at 67360 n.99 (quoting 80 Fed. Reg. 33840, 33843 (June 12, 2015)).

213. SIP Supplement at 21–22.

214. Id. at 16 (Condition 2.1 A.4.c.iv).

215. Id. at 16, 20 (Conditions 2.1 A.4.d, 2.1 A.7.g).

216. Id. at 20 (Condition 2.1 A.7.f).

217. Id. at 20–21.

218. Nevada RTC at 56–57.

219. SIP Supplement at 21–24 (§ 3.2.4.2).

220. Id. at 33 tbl.3 (projecting 2028 SO2 emissions of 1,010 tons from HFB2, 1,022 tons from both hog fuel boilers, and 1,120 tons from the facility).

221. Id. at 11 tbl.2 n.(b); id., App. B at B-12 n.(b).

222. 90 Fed. Reg. at 43055 (Arkansas).

223. See Nat’l Parks Conservation Ass’n et al., Conservation Organizations Comments on the Proposed Stationary Source Permit to Operate for WestRock Virginia, LLC – Covington, at 35–36 (Aug. 30, 2023) (quoting proposed permit conditions ¶¶ 18–19 requiring SO2 CEMS on the biomass boiler and the No. 2 recovery furnace) (attached as Ex. 10).

224. See 89 Fed. Reg. at 92057 (Georgia) (explaining that “source-specific data is always more reliable than industry- wide averages compiled in AP–42”).

225. SIP Supplement at 13.

226. Id. at 44.

227. Id. at 13.

228. Id. at ii, iii, 35, 44.

229. Id. at ii (citation omitted).

230. See infra Section II.D; 2021 Conservation Groups’ State Comments at 17–18 (§ V); 2024 Conservation Groups’ EPA Comments at 14 & n.128.

231. SIP Supplement at ii.

232. U.S. Env’t Prot. Agency, Responses to Comments on Protection of Visibility: Amendments to Requirements for State Plans; Proposed Rule (81 FR 26942, May 4, 2016) 194 (Dec. 2016), Docket ID No. EPA-HQ-OAR-2015- 0531-0635, https://www.regulations.gov/document/EPA-HQ-OAR-2015-0531-0635 [hereinafter 2017 RHR RTC].

233. 89 Fed. Reg. at 95124 (Wyoming) (quoting 2017 RHR RTC at 186).

234. SIP Supplement at iii, 35; see also id. at ii, 44.

235. Id. at ii.

236. EPA Proposal, 89 Fed. Reg. at 67346 n.25.

237. Id. at 67349; see 2021 Conservation Groups’ State Comments at 17 (§ IV); 2024 Conservation Groups’ EPA Comments at 14 & nn.129–30.

238. SIP Supplement at ii.

239. EPA Proposal, 89 Fed. Reg. at 67347 (citing Memorandum from Peter Tsirigotis, Dir., Off. of Air Quality Planning & Standards, U.S. Env’t Prot. Agency, to Reg’l Air Div. Dirs., Clarifications Regarding Regional Haze State Implementation Plans for the Second Implementation Period 13 (July 8, 2021), https://www.epa.gov/system/files/documents/2021-07/clarifications-regarding-regional-haze-state-implementation- plans-for-the-second-implementation-period.pdf [hereinafter 2021 Clarification Memo]).

240. Protection of Visibility: Amendments to Requirements for State Plans, 82 Fed. Reg. 3078, 3093 (Jan. 10, 2017).

241. Wyoming RTC at 44.

242. Approval and Promulgation of Air Quality Implementation Plans; New Jersey; Regional Haze State Implementation Plan for the Second Implementation Period, 88 Fed. Reg. 78650, 78653 (Nov. 16, 2023).

243. SIP Supplement at iii, 35–37.

244. Id. at 37.

245. 89 Fed. Reg. at 92593; see 2021 Conservation Groups’ State Comments at 21–23 (§ VIII); 2024 Conservation Groups’ EPA Comments at 43–46 (§ VIII).

246. Nat’l Parks Conservation Ass’n, Regional Haze Interactive Map: Sources of Visibility Impairing Pollution (2024), https://experience.arcgis.com/experience/46dd650b65284b64bf38ccba0e90af8b/?org=npca (last visited Oct. 5, 2026). The map is a screening-level tool; it identifies areas warranting analysis and is not a substitute for modeling.

247. 89 Fed. Reg. at 95122 (Wyoming); see 40 C.F.R. § 51.308(f)(2), (f)(2)(ii) (requiring consultation with the States whose emissions contribute to impairment in the Class I area and documentation of “[a]ll substantive interstate consultations”).

248. SIP Supplement at 13; see also id. at 44.

249. 42 U.S.C. § 7491(a)(1); EPA Proposal, 89 Fed. Reg. at 67344 & n.14; Nat’l Parks Conservation Ass’n et al., Comments on Visibility Protection: Regional Haze State Plan Requirements Rule Revision, Advanced Notice of Proposed Rulemaking, Docket No. EPA-HQ-OAR-2025-1477, at 22 (Dec. 1, 2025), https://www.regulations.gov/comment/EPA-HQ-OAR-2025-1477-0015.

250. Wyoming RTC at 39.

251. U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice for Air Plan Approval; Texas and Oklahoma; Texas Regional Haze Plans for the First and Second Implementation Periods and Five-Year Progress Report; Oklahoma Regional Haze Plan for the First Implementation Period, at PDF 100, Response V.B.2.q (Nov. 2025), Docket ID No. EPA-R06-OAR-2025-0197-0068, https://www.regulations.gov/document/EPA-R06-OAR- 2025-0197-0068; see also U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice for Air Plan Approval; Washington; Regional Haze State Implementation Plan for the Second Implementation Period 39 (Sept. 2025), Docket ID No. EPA-R10-OAR-2024-0541-0077 [hereinafter Washington RTC].

252. Ohio RTC at 14.

253. SIP Supplement at 13.

254. Id. at 44.

255. Id. at 33 tbl.3.

256. Id. at 33.

257. SIP Supplement at 33 & tbl.3.

258. 40 C.F.R. § 51.308(f)(2)(iv)(A).

259. 2021 Clarification Memo at 13; see also EPA Proposal, 89 Fed. Reg. at 67348.

260. 89 Fed. Reg. at 95124–25 (Wyoming).

261. Wyoming RTC at 39; see also 2021 Conservation Groups’ State Comments at 17–18 (§ V); 2024 Conservation Groups’ EPA Comments at 14 & n.128; Coal. to Protect Am.’s Nat’l Parks et al., Comments on Montana’s Proposed Regional Haze State Implementation Plan for the 2nd Implementation Period, at 4, 64–65 (§ VI.B.1), 68 (§ VI.F) (Mar. 21, 2022) (attached as Ex. 11).

262. See Utah RTC at 126 (Utah must “establish its RPGs with reference to the measures shown to be necessary to make reasonable progress through a properly conducted four-factor analysis, not the other way around”); Wyoming RTC at 151 (“The content of the long-term strategy determines the RPGs.”); 2019 Guidance at 46; 2021 Conservation Groups’ State Comments at 9–10 (§ II); 2024 Conservation Groups’ EPA Comments at 42–43 (§ VII).

263. SIP Supplement at 37.

264. Final Action, 89 Fed. Reg. at 92592.

265. Wyoming RTC at 149.

266. SIP Supplement at 33, 37.

267. Washington RTC at 24 (“Treating the URP as a ‘safe harbor’ would exempt states from considering the four statutory factors and would allow states to exclude measures necessary for reasonable progress from the SIP.”); U.S. Env’t Prot. Agency, Response to Comments for the Federal Register Notice for Air Plan Approval; Tennessee; Second Planning Period Regional Haze Plan 36 (Nov. 2025), Docket ID No. EPA-R04-OAR-2019-0308-0140 (same); Wyoming RTC at 54 (concluding that citing the URP “as a rationale (among others) for not including additional emissions control measures in its long-term strategy” was “improper”); see supra Section II.B.

268. 40 C.F.R. § 51.308(f)(2)(i), (f)(3)(i).

269. EPA Proposal, 89 Fed. Reg. at 67349 n.34 (citing 2019 Guidance at 46–48).

270. SIP Supplement at 33, 37.

271. Final Action, 89 Fed. Reg. at 92591; see also id. at 92574, 92588.

272. Id. at 92574; see id. at 92577–78 (source selection), 92582–83 (NOx).

273. 2021 Conservation Groups’ State Comments at 12–13 (§ III.A), encl. 3; 2024 Conservation Groups’ EPA Comments at 8–10 (§ III.A).

274. 2021 Conservation Groups’ State Comments at 11–17 (§ III), 20; 2024 Conservation Groups’ EPA Comments at 10–14, 16–26 (§§ III.B, III.D).

275. 2021 Conservation Groups’ State Comments at 19–21; 2024 Conservation Groups’ EPA Comments at 14–16 (§ III.C).

276. See supra Section II.E; 2021 Conservation Groups’ State Comments at 9–10 (§ II); 2024 Conservation Groups’ EPA Comments at 42–43 (§ VII).

277. 89 Fed. Reg. at 92573–74; 42 U.S.C. § 7410(c)(1) (requiring EPA to promulgate a FIP within two years after disapproving a SIP submission, unless the State corrects the deficiency and EPA approves the plan revision before the FIP is promulgated).

278. Approval and Promulgation of Implementation Plans; State of Montana; State Implementation Plan and Regional Haze Federal Implementation Plan, 77 Fed. Reg. 57864, 57866 (Sept. 18, 2012).

279. See 40 C.F.R. pt. 51, app. V, § 2.1(h) (requiring a “[c]ompilation of public comments and the State’s response thereto”).

Exhibit 1 footnotes

1. Pre-Hearing Draft Supplement to Regional Haze State Implementation Plan for North Carolina Class I Areas for Second Planning Period (2019 – 2028), Prepared by North Carolina Department of Environmental Quality Division of Air Quality, September 18, 2026. Hereafter referred to as the “Supplemental SIP.” Available here: https://edocs.deq.nc.gov/AirQuality/DocView.aspx?id=659936&dbid=0&repo=AirQuality&cr=1.

2. A Review of EPA’s Proposal for the North Carolina Regional Haze State Implementation Plan, prepared by Joe Kordzi, Consultant. On behalf of Sierra Club, September 2024. Hereafter referred to as the “2024 Report.”

3. A Review of the North Carolina Regional Haze State Implementation Plan, prepared by Joe Kordzi, Consultant, on behalf of National Parks Conservation Association, Sierra Club, CleanAire North Carolina, and Southern Environmental Law Center, October 2021. Hereafter referred to as the “2021 Report.”

4. 89 FR 67341 (August 20, 2024).

5. See 89 FR 67360 (August 20, 2024): “EPA also finds that DAQ’s control analysis and conclusions that the existing SO 2 measures at Domtar’s HFB2 are necessary for reasonable progress for the second planning period are reasonable, except for EPA’s concerns with the legal and practicable enforceability of certain permit conditions identified for incorporation into the SIP from Domtar’s title V permit.”

6. See 89 FR 92588 (November 22, 2024): “EPA agrees that overall, North Carolina did not provide an adequate rationale to explain why the wet scrubber controls were not cost-effective, and therefore, not included in the LTS as being necessary for reasonable progress.”

7. 89 FR 92588 (November 22, 2024).

8. Appendix G-2h of the 2021 SIP, Reasonable Progress Assessment for Domtar Paper Company, LLC – Plymouth, North Carolina. Pdf page 93.

9. 89 FR 92590 (November 22, 2024).

10. Appendix B to Appendix G-2 of the 2021 SIP. Pdf page 105.

11. 89 FR 92589 (November 22, 2024).

12. Control Cost Manual, Section 1 Introduction, Chapter 2 Cost Estimation: Concepts and Methodology, November 2017. Hereafter referred to as the “Cost Estimation Chapter.” Page 27.

13. Cost Estimation Chapter pages 2-27 to 2-29.

14. Cost Estimation Chapter, page 2-29.

15. Control Cost Manual, Section 5 SO2 and Acid Gas Controls, Chapter 1 Wet and Dry Scrubbers for Acid Gas Control, April 2021. Hereafter referred to as the “Scrubber Chapter.” Page 1-29.

16. Control Cost Manual Scrubber Chapter. Page 1-16.

17. Scrubber Chapter, page 1-16.

18. Cost Estimation Chapter, page 2-8.

19. Cost Estimation Chapter, page 2-6.

20. Supplemental SIP, Appendix B. Pdf page 70.

21. Cost Estimation Chapter, page 9.

22. Cost Estimation Chapter, page 30.

23. Cost Estimation Chapter, page 31.

24. Scrubber Chapter, page 1-79, and Table 1.8.

25. Cost Estimation Chapter page. 2-9, and § 2.6.4.2, p. 2-30; 2023 FFA at B-7.

26. That is, 15% × $11,606,204 = $1,740,931; $1,740,931 − $1,160,620 = $580,311.

27. That is, 1.10 × 1.30 = 1.43; $16,596,870 ÷ $11,606,204 = 1.43.

28. That is, $3,000,000 × 1.10 (contingency) × 1.30 (retrofit factor) = $4,290,000.

29. Supplemental SIP, pdf page 25.

30. Appendix B to the Supplemental SIP, pdf page 71: “As instructed, the capital recovery factor was calculated using the current prime interest rate of 7.75% for February 2023, while Domtar’s firm-specific long-term borrowing rate is 10.65%. Use of Domtar’s firm-specific interest rate in the cost calculations would increase the cost effectiveness to $7,900/ton of SO2 removed. Documentation of this rate has been included in Appendix B.”

31. Appendix B to the Supplemental SIP, pdf page 458.

32. Appendix B to Appendix B (Domtar’s 2023 four-factor analysis) of the Supplemental SIP, pdf page 78. Note that the “L + 550” likely refers to “the LIBOR rate + 5.50%.

33. See the workbook, Domtar HFB2 Cost-effectiveness.xlsx,” worksheet “Historical Bank Prime.”

34. See Table 2 Comparison of FFA for Wet Scrubber on HFB2, pdf page 22 of the Supplemental SIP.

35. Appendix B to Appendix G-2 of the 2021 SIP. Pdf page 108.

36. The Dow Chemical Company, The Caustic Soda Solution Handbook (Jan. 2004) (“Dow Handbook”), Table 3, p. 12, 50% NaOH at 60°F. Available here: https://www.petrodmo.com/wp-content/uploads/2021/04/Caustic-soda- solution-handbook.pdf.

37. Table A-1 Appendix A to Appendix G-2h of the 2021 SIP. Pdf page 100.

38. For example, see Monroe Environmental, a caustic scrubber vendor, “Sulfur Dioxide Scrubbing Using Caustic.” See the reaction equations: absorbed SO2 reacts with one molecule of NaOH to form a molecule of sodium bisulfite, NaHSO3. With additional NaOH available, a second molecule of NaOH reacts with that sodium bisulfite molecule to form sodium sulfite, Na2SO3. Available here: https://www.monroeenvironmental.com/air-blog-sulfur-dioxide- scrubbing-using-caustic/.

39. Ibid. Adding the two reactions gives SO2 + 2 NaOH → Na2SO3 + H2O.

40. That is, 39.997 ÷ 64.058 = 0.624.

41. IUPAC Commission on Isotopic Abundances and Atomic Weights, Standard Atomic Weights, available here: https://www.ciaaw.org/

42. Table A-1 of Appendix B to the Supplemental SIP. Pdf page 75.

43. Table A-1 of Appendix A to the Supplemental SIP. Pdf page 75.

44. Table A-1 of Appendix B to the Supplemental SIP. Pdf page 75. Note that Table A-1 rounds the hourly rate; the annual cost implies 1,209.26 lb/hr ($4,449,093 ÷ 8,760 hr ÷ $0.42).

45. Table A-1 Appendix A to Appendix G-2h of the 2021 SIP. Pdf page 100.

46. U.S. Bureau of Labor Statistics, Handbook of Methods, “Producer Price Indexes: Concepts”. Available here: https://www.bls.gov/opub/hom/ppi/concepts.htm.

47. See https://fred.stlouisfed.org/series/WPU061303024#.

48. Supplemental SIP, pdf page 22 (submitted to DAQ on February 15, 2023) and pdf page 6 (provided to EPA on February 21, 2023).

49. Appendix G-2h of the 2021 SIP, pdf page 85; and Supplemental SIP pdf pages 22 and 25.

50. Supplemental SIP. Page pdf page 25.

51. See https://www.spglobal.com/energy/en/news-research/latest-news/chemicals/043020-olin-swings-to-80- million-q1-loss-as-covid-19-saps-chlorine-demand: “S&P Global Platts last assessed caustic soda on Tuesday, with domestic spot prices up $20/dmt to $310-$320/dst FOB plant and domestic contract caustic soda up $20/dmt to $495-$505/dst FOB plant. Platts also assessed US export caustic soda prices up $120/dmt from the prior week to $355-$365/dmt FOB USG.” The Tuesday referenced in the article is April 28, 2020.

52. Ibid.

53. Ibid.

54. See https://www.spglobal.com/energy/en/news-research/latest-news/chemicals/022823-occidental-sees-lingering- uncertainty-for-pvc-caustic-soda-demand-cfo. Note, to read the article, disable javascript on that page.

55. Ibid.

56. See https://www.spglobal.com/content/dam/spglobal/ci/en/documents/platts/en/productsservices/market- reports/Solventswire-310718.pdf.

57. Ibid.

58. Ibid.

59. See https://www.eia.gov/tools/glossary/index.php.

60. Percentage calculations: 139.664 ÷ 244.917 = 0.570, 1.0 – 0.57 = 0.43; 148.422 ÷ 244.917 = 0.606, 1.0 – 0.606 = 0.39.

61. Appendix B to Appendix G-2 of the 2021 SIP, pdf page 52.

62. Appendix B to Appendix G-2 of the 2021 SIP, pdf page 51.

63. Ibid.: “using worst case HCl loading (Jan-19 0.0411 lb/MMBTU) and a boiler MCR of 889 MMBTU/hr”).

64. Appendix B to Appendix G-2 of the 2021 SIP, pdf page 51.

65. Appendix A to Appendix B of the Supplemental SIP, Table A-1, pdf page 75.

66. Scrubber Chapter Table 1.9, pages 1-81 – 1-82 (Eq. 1.102): “The cost of chemical replacement (Cc ) is based on the annual consumption of the chemical.”

67. Scrubber Chapter, pages1-94 and 1-96 (one mole of caustic, as Na2O, for every two moles of HCl, divided by 0.76 because the caustic is a “76% solution of Na2O”). Note this example is based on treating HCL, and not SO2, but the pertinent methodology discussed applies to Domtar.

68. Appendix B to Appendix G-2 of the 2021 SIP, pdf page 51.

69. Ibid. Note that those inputs actually multiply to 36.5 lb/hr rather than the cited 35.5 lb/hr in LDX’s table. However, using 36.5 would be an insignificant correction.

70. Domtar Paper Company, LLC, Air Quality Permit No. 04291T54, Appendix C to the Supplemental SIP, pdf page 101, (No. 1 and No. 2 Hog Fuel Boilers: “2.2E-02 lb HCl per million Btu of heat input,” under 15A NCAC 02D .1111 and 40 CFR Part 63, Subpart DDDDD).

71. Appendix A to Appendix G-2 of the 2021 SIP, pdf page 45: “Fuel and pulp mill gases, projected 2028 emissions divided by projected 2028 fuel use”; “2028 SO2 Emissions: 1009.6.” Calculations: 1,009.6 tons × 2,000 lb / 0.52 lb/MMBtu = 3,883,077 MMBtu a year. 889 MMBtu/hr × 8,760 hr = 7,787,640 MMBtu. 3,883,077 ÷ 7,787,640 = 0.50.

72. See the workbook, “Domtar HFB2 Cost-Effectiveness.xlsx,” worksheet, “Cost-effectiveness Corrections.” Note the “Items” in the caustic corrections therein refer to the 5 points made above the table.

73. 70 FR 39166 (July 6, 2005).

74. 70 FR 39138 (July 6, 2005).

75. See 82 FR 3096 (January 10, 2017).

76. See Guidance on Regional Haze State Implementation Plans for the Second Implementation Period, EPA-457/B- 19-003 August 2019. Page 32.

77. 76 FR 81732 (Dec. 28, 2011).

78. Oklahoma v. EPA, 723 F.3d 1201 (10th Cir. 2013).

79. 77 FR 20905 (Apr. 6, 2012).

80. 79 FR 5088 (Jan. 30, 2014).

81. 77 FR 14604 (Mar. 12, 2012).

82. 81 FR 296 (Jan. 5, 2016).

83. 81 FR 43894 (July 5, 2016).

84. 89 FR 103752 (December 19, 2024). EPA further reinforced this view in the next two pages of its proposal regarding California’s screening out of sources.

List of Exhibits

1. Joe Kordzi, A Partial Review of the Supplement to the Regional Haze State Implementation Plan for North Carolina (Oct. 2026) 2. Joe Kordzi, Domtar HFB2 Cost-Effectiveness (Excel workbook) 3. Nat’l Parks Conservation Ass’n et al., Conservation Organizations Comments on North Carolina’s Proposed Regional Haze State Implementation Plan (SIP) for North Carolina Class I Areas for the Second Planning Period (2019–2028) (Oct. 15, 2021) 4. Joe Kordzi, A Review of the North Carolina Regional Haze State Implementation Plan (Oct. 2021) 5. Nat’l Parks Conservation Ass’n et al., Comments on Proposed Air Plan Approval; North Carolina; Second Period Regional Haze Plan, Docket No. EPA-R04-OAR-2022-0786 (Sept. 19, 2024) 6. Joe Kordzi, A Review of EPA’s Proposal for the North Carolina Regional Haze State Implementation Plan (Sept. 2024) 7. Econ. Dev. P’ship of N.C., Pollution Abatement and Recycling (last updated Aug. 13, 2024) 8. N.C. Dep’t of Revenue, Form E-595E, Streamlined Sales and Use Tax Certificate of Exemption (Web-Fill rev. Apr. 2022) 9. Nat’l Parks Conservation Ass’n et al., Conservation Organizations’ Comments Submitted on Washington’s Proposed Regional Haze State Implementation Plan for 2018 to 2028 (Nov. 23, 2021) 10. Nat’l Parks Conservation Ass’n et al., Conservation Organizations Comments on the Proposed Stationary Source Permit to Operate for WestRock Virginia, LLC – Covington (Aug. 30, 2023) 11. Coal. to Protect Am.’s Nat’l Parks et al., Comments on Montana’s Proposed Regional Haze State Implementation Plan for the 2nd Implementation Period (Mar. 21, 2022)

Exhibit 1

A Partial Review of the Supplement to the Regional Haze

State Implementation Plan for North Carolina

Prepared by

Joe Kordzi, Consultant

On behalf of

National Parks Conservation Association

October 2026

1	Introduction

This report describes a partial review of the September 18, 2026 Supplement to Regional Haze State Implementation Plan (SIP) for North Carolina.1 This report is limited to a review of the cost-effectiveness of an SO₂ scrubber installation on the Domtar Hog Fired Boiler No. 2 (HFB2). This analysis draws upon a prior September 2024 report on EPA’s proposal for the North Carolina SIP,2 and a 2021 report concerning the North Carolina Regional Haze State Implementation Plan.3 However, due to the extended focus on this facility, a number of additional issues that were not uncovered during the earlier reviews have surfaced and are addressed in detail herein.

Materials in EPA’s record relating to its partial disapproval of the North Carolina SIP were reviewed.4 The Domtar Title V permit was also reviewed.

2	Background

As North Carolina explains on pages ii and 8 – 9 of its Supplemental SIP, it submitted a revised four-factor analysis for the HFB2 to EPA in June 2021, which was based on 2020 dollars. This version of the four-factor analysis had been properly reviewed by the FLMs, was issued for public comment, and was included in the North Carolina SIP. This four-factor analysis concluded that the cost-effectiveness of retrofitting an SO₂ scrubber to HFB2 was $3,660/ton. As discussed in Section 7.2 of the 2024 Report, a number of faults remained in the 2021 four- factor analysis, some of which are discussed later in this report. Although EPA proposed to conditionally approve the HFB2 four-factor analysis,5 it subsequently finalized a partial disapproval of the SIP, including a disapproval of the HFB2 four-factor analysis.6

On page ii of its Supplemental SIP, North Carolina notes that it provided the revised four-factor analysis to EPA on February 21, 2023, before EPA issued its proposed and final actions on North Carolina’s Regional Haze SIP. EPA correctly did not consider this revision in its proposal and final actions because it was not submitted for FLM review and public comment. That revision is now a part of the Supplemental SIP being reviewed in this report.

3	EPA’s November 2024 Final Erred in its Evaluation of Some Comments Concerning

HFB2

In its November 22, 2024 Final Rule, EPA addressed comments it had received in response to its August 20, 2024 proposal on the North Carolina SIP. Beginning with Comment 7, EPA addresses comments concerning the four-factor analysis for HFB2.7 Some of these issues are addressed below. North Carolina must revise its draft SIP Supplement in order to correct these issues before it submits it to EPA for review.

3.1	EPA Ignored its Own Documentation Requirements

As detailed in this report, the HFB2 analysis suffers from a number of documentation requirements. In its 2024 Final Rule, EPA made a number of errors in its evaluation regarding the HFB2 four-factor analysis, many of which stem from its failure to uphold the documentation requirements of the Regional Haze Rule. EPA provided a Technical Support Document (TSD) in its docket for its decision making. However, EPA’s TSD only contains about 2 pages that are relevant to the HFB2’s four-factor analysis, and that information does not provide any independent analysis, and merely repeats many of North Carolina’s undocumented assertions discussed in this report. Nonetheless, the Regional Haze Rule has strict documentation requirements that states, and EPA, must follow. These documentation requirements are summarized in Appendix A of this report. Therefore, North Carolina must revise its draft SIP Supplement to provide proper documentation to support its assertions regarding the issues identified below.

3.2	EPA Failed to Acknowledge the Continued Requirement for Fan Documentation

On pdf page 24 of its Supplemental SIP, North Carolina indicates in note (a) to Table 2, its cost summary for retrofitting a wet scrubber to HFB2, the following regarding the new fan: “Installed fan cost from H. Clay Moore & Associates (estimated between $2 and $5.5 million for new fan, installed). The installed fan cost did not change from the 2020 to the 2023 estimate.” An examination of the 2021 SIP reveals the only other justification for this cost is: “the fan upgrade cost is from H. Clay Moore & Associates Inc.”8 There does not appear to be any vendor quote from H. Clay Moore & Associates Inc., or any other type of actual cost documentation for this fan anywhere in the SIP documents now or in prior versions of the SIP. Nor is there any documentation for the need for this fan. This has been repeatedly pointed out to North Carolina and EPA in comments.

For example, the 2021 Report noted this lack of documentation in Comment 5.56:

Domtar has assumed the need for a new Induced Draft (ID) fan. However, the vendor states that its quote was based on the use of the existing upstream dry ESP fan and its supplied pressure drop requirements should be confirmed with

Domtar’s existing fan manufacturer. Domtar, has assumed an additional $3,000,000 charge for a new ID fan but has not provided any documentation that such a fan is needed. NC DEQ should require this documentation, since it is a large capital cost item.

Section 7.2 of the 2024 Report noted this previous lack of documentation and that North Carolina stated in its Response to Comment (RTC) document the following in response to the 2021 Report comment:

Domtar has provided additional information on the induction fan requirements of this project. The current fan has been monitored during startup and commissioning of the new ESP and has been found to be sufficient to accommodate the ESP but without excess capacity. Therefore, a new induction fan would be needed to operate a wet scrubber and the ESP.

Section 7.2 of the 2024 Report further noted that this “additional information on the induction fan requirements of this project” still was not provided in any of the final 2021 SIP materials submitted to EPA. Despite this, in its 2024 Final Decision, EPA responded to this comment as follows:9

EPA also disagrees that a $3,000,000 new induced fan was included in the FFA without any documentation or explanation. In section 7.8.1.2 of the Haze Plan, North Carolina notes that an additional fan power would be required to overcome the additional pressure drop through the wet scrubber. Specifically, in appendix I, North Carolina notes that Domtar monitored the existing fan at the facility during startup and commissioning of the new electrostatic precipitator (ESP) and found it to be sufficient to accommodate the ESP but without excess capacity. Therefore, a new induction fan is needed to operate a wet scrubber as well as the ESP and Domtar notes that the $3,000,000 was a quote that it had received for a new induction fan. EPA notes that North Carolina has included appropriate justification for the need for a new induction fan in appendix G–2 and appendix I of the Haze Plan and also finds that the $3,000,000 cost estimate was developed using reasonable cost assumptions and with adequate justification.

An examination of EPA’s cited “documentation,” Section 7.8.1.2, reveals only this statement that is pertinent to this issue: “additional fan power would be required overcome the additional pressure drop through the wet scrubber.” This appears to be the sum total of EPA’s and North Carolina’s justification that a new fan is needed for a scrubber retrofit for HFB2.

A proper documentation for control costs that complies with the documentation requirements under section 51.308(f)(2)(iii), would consist of the following:

• An engineering analysis that demonstrates the existing induced draft fan is incapable of servicing the additional pressure drop across the scrubber. This should include gas flow

data and actual calculations. This analysis should also demonstrate that upgrading the existing fan and/or adding a booster fan are not viable options.

• a vendor quote or other verifiable documentation for the cost of the new ID fan.

These documentation requirements were in fact acknowledged by LDX, in 2020, which assumed there would be spare capacity in the existing fan, when it provided the quote for the scrubber: “the scrubber system is assumed [to] use the available static in the upstream dry ESP ID fan. Pressure drop requirements are listed in our proposal but will need to be confirmed with the existing fan curves/fan supplier.” Therefore, LDX relied on spare capacity in the existing fan, subject to a check.10 That check does not appear in the record, which has no fan design curves, no LDX pressure-drop page, and no H. Clay Moore fan estimate.

Thus, in order to properly comply with the documentation requirements of section 51.308(f)(2)(iii), North Carolina must provide documentation of the following:

• The existing induced draft fan lacks the spare capacity to service the LDX quoted scrubber system, the existing fan cannot be updated, and a booster fan cannot be fitted. This must include engineering calculations.

• The cost of the new fan.

3.3	EPA Determined that North Carolina Did Not Adequately Support its Retrofit Factor

Section 7.2 of the 2024 Report, which referenced Section 5.5 of the 2021 Report, indicated that Domtar and North Carolina did not provide any documentation to justify the use of a retrofit factor of 1.3. Regarding this, in its 2024 Final Decision, EPA states the following:11

In any SIP revision, a retrofit factor greater than 1.0 should be adequately documented with a detailed justification to explain why it is appropriate to inflate the costs above those with an average retrofit difficulty.68 Based on the information provided, EPA is not able to adequately discern whether a 1.3 retrofit factor in the cost analysis for the wet scrubber for HFB2 is inflated.

EPA’s footnote 68:

See CCM section 5, Chapter 1, page 1–16: https://www.epa.gov/sites/default/files/2021- 05/ documents/wet_and_dry_scrubbers_section_5_ chapter_1_control_cost_manual_7th_edition.pdf (“An RF of 1 should be used to estimate costs for a project of average difficulty. For retrofits that are more complicated than average, a retrofit factor of greater than 1 can be used to estimate capital costs provided the reasons for using a higher retrofit factor are appropriate and fully documented. Similarly, new construction and retrofits of existing plants that are less complicated

should use an RF less than 1. Each project should be evaluated to determine the appropriate value for RF.”)

Thus, EPA acknowledged that North Carolina has not provide adequate support or documentation for its reliance on a 1.3 retrofit factor for the HFB2 wet scrubber four-factor analysis.

3.3.1 The Control Cost Manual’s Direction on Use of a Retrofit Factor

The Control Cost Manual describes the use of a retrofit factor “[t]o quantify the additional costs of installation not directly related to the capital cost of the controls themselves.” The factor should be “no larger than is necessary to cover the occurrence of expected (but reasonable) extra costs for demolition and installation,” including “the unexpected magnitude of anticipated cost elements; the costs of unexpected delays; the cost of re-engineering and re-fabrication; and the cost of correcting design errors.”12 The Control Cost Manual provides the cost items that qualify for consideration under a retrofit factor: handling and erection in tight quarters, site preparation (including relocating production equipment), off-site facilities, limited space for staging equipment, transportation, and lost production.13 Specifically regarding lost production, the Control Cost Manual draws a firm line. A shutdown to install a control “should be a well- planned and anticipated event,” and its cost belongs in the start-up line of indirect installation costs. Only foregone production from shutdowns that “do not occur in a well-planned and routine manner” because of retrofit-related problems is a retrofit cost.14 Thus, a retrofit factor should not be used to cover the cost of the installation of controls that can occur during routine shut-downs. North Carolina has not provided any information that distinguishes how much lost production could occur due to the installation of a scrubber on HFB2 over that which would be lost due to a routine shut down. Nor, has North Carolina provided any information that discusses how much of the additional cost of its 1.3 retrofit factor would be due to any lost production.

The Control Cost Manual makes it clear that a retrofit factor of 1.0 itself includes some unanticipated difficulty in control installation. For example, it states, “a retrofit factor of 1 represents a project of average difficulty, and “a retrofit factor of greater than 1 can be used to estimate capital costs provided the reasons for using a higher retrofit factor are appropriate and fully documented [emphasis added].” In fact, the Control Cost Manual directs that a “retrofit factor of 0.77 should be used to estimate capital costs for new construction.”15 This means that a retrofit factor of 1.0, which covers a retrofit of average difficulty, already has accounted for an increase in capital cost of 23% over what would be incurred in new construction.

The Control Cost Manual further adds: “Each project should be evaluated to determine the appropriate value for RF.”16 The conditions to consider are site congestion, site access and the

capacity of existing infrastructure—for example, relocating existing equipment, longer duct runs and extra fans. Beyond the scrubber chapter’s requirement that a higher retrofit factor be “fully documented,”17 the cost-estimation chapter places the burden on the source: “It is the affected industry source that bears the burden of providing information of sufficient quality that will yield cost estimates of at least a study-level estimate for permitting decisions pertaining to their facilities.”18 A study-level estimate requires, among other things, the location of the source within the plant, a rough sketch of the process flow sheet showing the relative locations of equipment, preliminary sizes and materials of the equipment, and preliminary specifications for ducts and piping.19 None of these materials have been provided.

In summary, North Carolina has not provided any of the required documentation for a retrofit factor of 1.3 on the installation of a scrubber for HFB2, nor has it provided any information that would distinguish that installation from that of a retrofit of average difficulty. This makes North Carolina’s analysis arbitrary and speculative, and in violation of the documentation requirements of section 51.308(f)(2)(iii). Thus, North Carolina must use a retrofit factor of 1.0 in the calculation of the cost-effectiveness of a scrubber on HFB2, or provide the required documentation to adequately justify a factor greater than 1.0.

3.3.2 Domtar Conflates Retrofit Factor and Contingency and Partially Double-Counts

Control Costs in its Analysis

Domtar’s reasoning for the use of a 1.3 retrofit factor in its revised 2023 cost analysis is that “because the vendor cost estimate was conducted remotely and a detailed engineering study has not been performed to account for unexpected siting or engineering costs that were not included in the initial vendor quote. The vendor quote did not include the cost to replace the induced draft (ID) fan required for the additional down-stream pressure added by the scrubber.”20 However, much of this reasoning belongs in the contingency. This was discussed in section 5.5 of the 2021 Report.

The Control Cost Manual refers to contingency as “a catch-all category that covers unforeseen costs that may arise,” such as “possible redesign and modification of equipment, … increases in field labor costs, and delays encountered in start-up,” and states that contingencies “are not the same thing as uncertainty and retrofit factor costs, which are treated separately in this chapter.”21 Contingency “also accounts for inadequacies in cost estimating methods and for expected unknowns that may arise during project execution,” is “inversely proportional to the level of accuracy for a cost estimate,” and, for mature technologies, “can range from 5 to 15% of the TCI.”22 It should not cover price escalation, work stoppages or disasters.23 For scrubbers, the Control Cost Manual computes contingency as a factor times direct plus indirect costs. The

default is 10 percent, and values of 5 to 15 percent “may be included to account for unexpected costs associated with the fabrication and installation of the control system.”24

As noted above, the main reasons for the retrofit factor are uncertainty in the estimate and in the fan’s price, which the Control Cost Manual assigns to contingency and treats separately from retrofit costs.25 If Domtar considered its estimate less certain than typical, the manual’s remedy is a contingency toward the top of the 5–15 percent range. At 15 percent, contingency would be $1.74 million—about $0.58 million more than North Carolina assumed—compared with the $3.83 million the retrofit factor adds.26 Furthermore, because the retrofit factor multiplies a total that already includes contingency, the two compound to 1.43 times direct plus indirect costs.27 Therefore, there is overlap in that both allowances are being used for the same uncertainties.

This has a large effect on the undocumented fan. After both allowances, the cost of the $3.0 million fan is inflated to about $4.3 million.28 Therefore, as indicated above, North Carolina must provide proper documentation for its retrofit factor and properly separate out what belongs in the retrofit factor and what belongs in its contingency allowance.

4	Domtar has Not Properly Documented its Cost of Borrowing

In various places within the SIP Supplement, North Carolina presents information intended to indicate that Domtar’s use of a 7.75% interest rate is conservative, as its true firm-specific interest is much higher. For instance, North Carolina makes the following statement:29

In addition, the capital recovery factor increased by 88.10% as a result of updating the federal prime lending rate from 3.25% in the 2021 FFA to 7.75% in the 2023 FFA. The interest rates used in the FFAs follow EPA guidance in the Control Cost Manual (CCM), which provides a basis for comparing costs for like sources installed with like controls. Although this approach has merit in comparing control costs for like sources and controls across companies, it does not necessarily reflect the actual cost to a company with a long-term borrowing rate that is significantly different from the federal prime lending rate. For comparison, Domtar’s firm-specific long-term borrowing rate, which reflects the real cost to the company, has increased from 10.65% as documented in the 2023 FFA to 19.16% in February 2026 (see Appendix E for documentation). Thus, use of a firm-specific borrowing rate would have yielded higher annualized costs and a higher cost per ton of SO₂ removed (i.e., lower cost-effectiveness) than reflected in the 2021 FFA and 2023 FFA.

The 10.65% figure presumably refers to a similar statement in Domtar’s 2023 four-factor analysis.30 Domtar offers information in Appendix B of its 2023 four-factor analysis as documentation of the 10.65% interest rate. It appears that the 19.16% figure originates in Appendix E to the Supplemental SIP, which is an image of a February 20, 2026 Barclays weekly market update.31 Although analysis of corporate financing is beyond the scope of this report, the following comments are offered for North Carolina’s consideration.

Neither of these references appear to be documentation of Domtar’s actual firm-specific borrowing rate. Instead, they both appear to be references to a loan that is market traded. Domtar’s loan which matures in November 2028, originally paid London Interbank Offered Rate (LIBOR) plus 5.50%.32 Domtar’s second loan (which may be the same loan) appears to pay Secured Overnight Financing Rate (SOFR) plus a Credit Spread Adjustment (CSA) plus 5.50%. The difference is that the 2023 price was 98.875 cents on the dollar, while the 2026 price was 72.5 cents. These figures do not reflect Domtar’s cost of borrowing—they reflect what an investor would earn by buying the loan at the quoted price and holding it to maturity. It is likely that the increase in the yield (10.65% versus 19.16%) reflects the market’s assessment of the purchaser’s risk in assuming Domtar will pay back the loan, as the price of that loan fell from 98.875 to 72.5. Between 2023 and 2026, the assessment of that risk grew.

North Carolina’s use of a 7.75% interest rate, reflects the Bank Prime rate at the time Domtar submitted its revised four-factor analysis to North Carolina on February 15, 2023.33 Lacking actual firm-specific interest rate documentation, that was therefore the correct interest rate to use.

5	It Appears that Domtar Miscalculated its Caustic Use

As North Carolina indicates in its Supplemental SIP, caustic (an NaOH and water solution) usage is the largest annual cost item in the cost-effectiveness of a scrubber on HFB2.34 In fact, Domtar’s increase in the cost of caustic is mainly responsible for the more than doubling of the total annualized cost of the 2023 cost-effectiveness calculation over that from 2021.

5.1	The LDX Solutions Scrubber Design is Inherently Very Conservative Regarding

Caustic Usage

In its 2021 quote, LDX Solutions estimated caustic usage at “1.61 gal/min of 50% solution.”35 A 50% caustic solution is by definition half NaOH and half water by weight, and has a density

12.76 pounds/gallon, of which 6.38 pounds is due to the NaOH.36 This 1.61 gal/min volumetric 50% caustic usage rate translates to a mass rate as follows:

1.61 gal/min x 60 min/hr x 12.76 lb/gal 50% solution = 1,233 lb/hr 50% solution

Domtar’s calculation in its 2021 facility-submitted analysis was similar at 1,209 lb/hr, with the difference likely due to roundoff.37 Regardless, this is the mass rate of the total caustic solution. The mass rate of dry NaOH that is actually being used is half of that:

1,209 lb/hr × 0.5 to 1,233lb/hr × 0.5 = 605 lb/hr to 616 lb/hr

Therefore, depending on whether the Dow Chemical or Domtar figure is used in the mass rate of a 50% caustic solution, the actual mass rate of just NaOH that is actually consumed ranges from 605 lb/hr to 616 lb/hr, according to LDX’s design.

5.1.1 LDX’s Scrubber Caustic Reaction Chemistry is Very Conservative

LDX’s assumed caustic reaction chemistry is very conservative, as it assumes the least efficient type of NaOH reaction with SO₂. For example, in a caustic scrubber, NaOH has the potential to react with SO₂ in two stages. Each molecule of SO₂ that is absorbed into the scrubber caustic solution first reacts with one molecule of NaOH to form sodium bisulfite (NaHSO₃). When more caustic is available, the bisulfite reacts with a second molecule of NaOH to form sodium sulfite (Na₂SO₃).38 If this reaction is carried through to the sodium sulfite phase, each molecule of SO₂ uses two molecules of NaOH (2 to 1).39 In contrast, if only the bisulfite portion of this reaction is assumed, the ratio would be 1 to 1, or 0.624 pounds of NaOH per pound of SO₂40

LDX did not assume this full reaction, and instead relied only on the less efficient sulfite portion of the reaction. Such an assumption inherently assumes more caustic is used. This can be realized by the following calculations:

The rate of SO₂ removed at LDX’s design load is:

515 lb/hr × 0.95 = 489.3 lb/hr

From the previous reaction equation, the number of molecules of NaOH per molecule of SO₂ captured as sodium sulfite is calculated as:

SO₂ + 2 NaOH → Na₂SO₃ + H₂O

This is a 2 to 1 reaction—2 molecules of NaOH for every one molecule of SO₂ removed.

The weight of one pound-mole of NaOH (its molecular weight) is:41

22.990 (sodium) + 15.999 (oxygen) + 1.008 (hydrogen) = 39.997 lb

The weight of one pound-mole of SO₂ is:

32.06 (sulfur) + 2 × 15.999 (oxygen) = 64.058 lb

Assuming the less efficient “2 to 1” sulfite reaction, the amount of NaOH needed to react with one pound-mole of SO₂ is:

2 pound-moles × 39.997 lb = 79.994 lb

The pounds of NaOH per pound of SO₂ (sulfite basis) are then:

79.994 lb / 64.058 lb = 1.249 lb/lb

This results in the rate of NaOH needed at LDX’s design load as:

489.3 lb/hr × 1.249 = 611 lb/hr

This figure of 611 lb/hr closely matches the NaOH rate in LDX’s design (605 to 616 pounds per hour, depending on whether the Dow or Domtar figures are used) to within about 1%. This demonstrates that the LDX design assumed only the sulfite portion of the NaOH and SO₂ reaction, and ignores the bisulfite portion of that reaction, as discussed above. This design choice is therefore very conservative and inherently assumes more caustic is consumed than is likely necessary in order to control the amount of SO₂ that the scrubber system would treat. This assumption is not addressed in this review, but should be understood as a very conservative aspect of the cost-effectiveness calculation.

5.2	The Domtar Caustic Charge is Undocumented and Appears Inflated

Domtar’s February 2023 cost-effectiveness calculation for a wet scrubber on the for HFB2 charges $4,449,093 a year for caustic.42 Because as stated above, this caustic usage is by far the largest annual cost item in the cost-effectiveness of a scrubber on HFB2, it is critical that North Carolina document this cost item, as required by the Regional Haze Rule’s documentation requirements noted earlier in this report. As it stands, the only support for this figure appears in a footnote to Domtar’s cost-effectiveness summary that its 2023 $0.42/lb NaOH figure is, like its

costs for water and wastewater disposal, from “Mill specific rates from Finance Department Records for 2023.”43

The caustic price a large firm like Domtar pays for chemicals is not generally publicly available. However various publicly available and verifiable techniques can be used to judge whether that price appears reasonable. If such a review of publicly available information indicates that the price of a key input into a cost-effectiveness calculation—especially one with very weak documentation—does appear unreasonable, then the company and the State must provide better additional documentation to adequately justify the higher price used in the control cost analysis. That is in fact the case here. As demonstrated below, Domtar’s apparent procedure for setting its caustic price and the quantity required depart from the Control Cost Manual’s methodology, and appear to be inflated as a result of both improper unit pricing, and improper quantity assumptions.

5.2.1 Domtar’s 2023 Caustic Price Appears Inflated

The 2023 cost-effectiveness calculation charges 1,209 lb/hr of “NaOH” for 8,760 hours a year at $0.42/lb of NaOH, or $4,449,093 a year.44 The 2021 cost-effectiveness analysis uses the same hourly rate, but at $0.16/lb, or $1,694,892 a year.45

The U.S. Bureau of Labor Statistics (BLS) publishes a monthly producer price index for sodium hydroxide (the NaOH price index). BLS builds its producer price indices mainly from actual sale prices. In so doing, it requests that companies provide “realistic transaction prices, including all discounts, premiums, rebates, and allowances, rather than list or book prices,” and states that the use of list prices is “the exception, rather than the rule.”46 Figure 1 presents the historical Producer Price Index (PPI) for caustic.47

Figure 1. Historical PPI for Caustic Soda

As can be seen from the above graph of the PPI of caustic, the peak occurred in January 2023 and then rapidly declined after that. Current caustic prices are only slightly more than what they were from 2019 through the early part of 2021. Therefore, basing the caustic pricing on 2023 figures greatly inflates the cost in relation to current prices, which is unreasonable. Table 1 extracts the index values pertinent to this review.

Table 1. Key Caustic PPI Indices

Period

PPI

Note

2019 average

130.4

2020 average

122.0 Monthly range 119.7 (March) to 124.5 (August)

2022 average

215.6

December 2022

240.1

January 2023

244.9 Highest value in the series, which begins in

October 2016

February 2023

234.5 Month Domtar submitted the 2023 analysis48

2023 average

189.3

December 2023

139.7

2024 average

138.7

August 2026

148.4 Latest value available

Note that, in the above graph and table, the PPI index value for December 2007 is set as 100, so that all other PPI values are expressed as being relative to that value. Consequently, like the Chemical Engineering Plant Cost Index (CEPCI) used for escalating capital costs, the PPI can be used as a reasonable method for escalating commodity prices.

Domtar’s $0.16/lb caustic price is a 2020 price, as both earlier four-factor analyses state their chemical costs “are based on mill-specific values for 2020,” and DAQ describes the 2021 four- factor analysis as based on “2020 dollars” and the change in Domtar’s caustic price as a “2020- 2023 cost increase.”49 Applying the PPI for caustic involves simply multiplying the 2020 price by the ratio of the index in the later period to the 2020 average. Table 2 shows the result for each period the 2023 price could potentially reflect.

Table 2. Domtar’s Caustic Escalated Via the PPI

Percent Domtar’s

Period the 2023

Index-based

2023 $0.42 is above

price reflects

Index ratio

price per pound

index-based price

December 2022	1.967	$0.315	33%
January 2023	2.007	$0.321	31%
February 2023	1.922	$0.307	37%
2022 average	1.766	$0.283	49%
2023 average	1.551	$0.248	69%

As can be seen from the above analysis, although Domtar’s stated caustic price increase from $0.16/lb to $0.42/lb represents an increase of 162.5%, the PPI rose much less at 92% to 101%. It should be noted that caustic is a world-traded commodity whose price depends on supply, demand and energy costs. The price drivers the Supplemental SIP lists are energy inflation; the Russia–Ukraine disruption of European supply; production outages and lower capacity use in the U.S. and Europe; high global demand; higher salt and energy raw-material costs; and the post- pandemic rebound and logistics constraints.50 Each of these reasons is a market-wide force that affected all caustic sellers and buyers, is not isolated to Domtar, and is therefore already reflected in the price index. Domtar has provided insufficient documentation for its caustic pricing, and has failed to explain why it, across all of its plants as a large buyer of caustic, would have to pay more for caustic than market pricing. Indeed, as such a large purchaser of caustic, Domtar should have received a significant discount in caustic pricing. Therefore, on this analysis alone, it appears that Domtar’s 2023 caustic price ranges from 31% to 69% higher than what the market actually would have charged and cannot be supported.

Actual caustic pricing is mostly protected by pay walls. However, some publicly available information from reputable sources is available and supports the above analysis, as shown below.

Table 3. Published Caustic Prices 2020 – 2023

Date

Buyer or assessment

Price as published

$ per lb of NaOH

Apr. 28, 2020 Platts U.S. spot, at plant51

$310–320/dst

$0.155–0.160

Apr. 28, 2020 Platts U.S. contract, at plant52

$495–505/dst

$0.248–0.253

Apr. 28, 2020 Platts U.S. export, Gulf Coast53

$355–365/dmt

$0.161–0.166

2020

Domtar, 2020 and 2021 FFAs

$0.16/lb NaOH

$0.160 ($0.320 if

per lb of solution)

Platts U.S. export (all-time high)54	Late Oct.	$1,055/mt	$0.479
2022

Feb. 2023

Domtar, 2023 FFA

$0.42/lb NaOH

$0.420 ($0.840 if

per lb of solution)

Feb. 21, 2023

Platts U.S. export, Gulf Coast55

$625/mt

$0.283

Aug. 1, 2023

Platts U.S. contract, at plant56

$895–905/dst

$0.448–0.453

Aug. 1, 2023

Platts U.S. spot, at plant57

$550–560/dst

$0.275–0.280

Aug. 1, 2023

Platts U.S. export, Gulf Coast58

$345–355/dmt

$0.156–0.161

To understand the above caustic historical prices, some explanations are in order. First, although caustic is typically purchased by paper mills as a 50% solution delivered in tanker cars, its pricing on the open market is on the basis of a dry product and all of the above pricing is on that basis (“dst” is “dry short ton,” and “dmt” is “dry metric ton (1,000 kg)”). Second, the U.S. Energy Information Agency (EIA) provides definitions for the difference between spot and contract pricing.59 EIA defines contract pricing as “[t]he delivery price determined when a contract is signed. It can be a fixed price or a base price escalated according to a given formula.” EIA defines spot pricing as “[t]he price for a one-time open market transaction for near-term delivery of a specific quantity of product at a specific location where the commodity is

purchased at current market rates.” Third, the term “at the plant” refers to where the caustic is produced, which for all the above pricing, is the U.S. Gulf Coast. Typically, contract pricing for commodities is higher than spot pricing as insurance against market increases over the term of the contract.

Several conclusions can be drawn from the above caustic pricing. Domtar’s $0.16/lb 2020 price equals the top of the U.S. spot price that Platts assessed “at the plant” on April 28, 2020, and is more than a third below the contract price assessed the same day. However, Domtar’s 2023 price of $0.42/lb is substantially above Platts August 1, 2023 spot price at the plant of $0.275– 0.280, and is very close to the contract price of $0.448–0.453. Domtar does not provide any reasoning why it was able to purchase caustic in 2020 at the lower spot price, but was unable to do so in 2023. In January 2023, the month before Domtar submitted the 2023 FFA to North Carolina, the PPI index reached its highest value since the series began in October 2016. It then fell 43 percent by December 2023. In August 2026, the latest month available, it was still 39 percent below the peak, near its 2018 high of 142.3.60

In summary, both (1) applying the BLS PPI to its 2020 caustic price and (2) actual historical caustic pricing strongly indicate that Domtar’s 2023 caustic pricing is inflated. Even if, despite all the evidence presented, Domtar actually was able to provide evidence that its 2023 caustic price was actually based on a real verifiable contract, it cannot use that pricing, which reflects a peak that only lasted a few months over at least the last 10 years, as an indicator of caustic prices over its future 30-year amortization period. In the cost-effectiveness correction that follows, caustic is assumed to be priced at $0.321/lb, which is the higher of the January through February 2023 caustic pricing that was escalated using the PPI, as described above.

5.2.2 Domtar’s Caustic Quantity Appears Inflated

The amount of caustic that Domtar claims would be needed in the scrubber system for HFB2 originates from the vendor, LDX Solutions, which in 2020 specified an “estimated NaOH Consumption” of 1.61 gal/min of 50% solution.61 As indicated in Section 5.1, LDX’s gal/min figure can be converted to 1,233 lb/hr. Again, Domtar’s actual caustic use rate is 1,209 lb/hr, which is likely due to rounding, and differences in these figures are immaterial. Importantly, this 1,209 lb/hr figure appears to represent the usage rate for a 50% solution, as confirmed earlier in Section 5.1. The amount of NaOH actually in the solution is about half that weight, or 605 to 616 lb/hr, which was confirmed in Section 5.1 to be 611 lb/hr, using standard chemical reactions. Domtar’s 2023 annual caustic charge of $4,449,093, however, is based on applying that 1,209 lb/hr figure to its $0.42/lb NaOH caustic pricing.

As a result, Domtar’s annual caustic charge appears on this basis alone to be double what it should be.

5.2.3 Domtar Wrongly Assumes a Peak Load Caustic Rate

LDX designed the scrubber for an SO₂ load of “≤ 225 ppmvd,” or 515 pounds per hour, using design conditions “provided via January, March, and May 2020 emission test reports,” and it asked Domtar to “confirm the assumed values.”62 It based its HCl load on the boiler’s maximum continuous rating (MCR) of 889 million Btu per hour.63 Its design caustic usage rate treats that maximum load. Thus, the scrubber is designed to address the maximum amount of SO₂ anticipated over an hour. There is nothing wrong with that design approach. Indeed, it is the correct approach to design a control to address the maximum rate of pollution it will ever see.

The problem is that Domtar’s cost-effectiveness calculation assumes the caustic rate would have to address that maximum SO₂ rate on a continuous basis. For example, the SO₂ removed at LDX’s design load is 489.3 lb/hr (95% of 515 lb/hr) on a continuous basis.64 This translates to 2,143 tons/yr (489.3 lb/hr x 8,760 hr/yr / 2,000 lb/ton). However, Domtar assumes the actual annual amount of SO₂ that would be removed is 959.1 tons.65 Therefore, on this basis alone, Domtar is claiming 2.2 times the amount of caustic needed to treat its estimated annual SO₂ emissions.

That approach conflicts with the Control Cost Manual. The Control Cost Manual bases chemical cost on “the annual consumption of the chemical” in pounds of chemical used per hour, multiplied by the annual operating hours, and multiplied by the unit cost in dollars per pound.66 In its worked example, the Manual calculates the required pounds of caustic from the acid gas in the gas stream, and converts them to the concentration of the caustic being priced.67

5.3	LDX Appears to Have Neglected to Account for HCl in its Caustic Usage

In its scrubber quote, LDX assumes a Hydrogen Chloride (HCl) loading of 35.5 lb/hr.68 As indicated above, LDX’s own caustic rate appears to cover the SO₂ emissions, not the additional HCl emissions, which requires an additional correction. However, LDX overestimates the amount of HCl that would have to be treated by the scrubber, because it combines two worst- case assumptions: (1) it uses the highest HCl rate in Domtar’s tests, 0.0411/MMBtu in January 2019, and (2) it assumes the boiler is run at its maximum rating of 889 MMBtu per hour continuously.69 In fact, Domtar’s permit limits its HCl emissions to 0.022 lb/MMBtu, so LDX’s

worst case is nearly twice the HFB2’s allowed limit.70 Domtar’s own cost analyses for dry sorbent injection calculates HFB2’s SO₂ rate, 0.52 lbs/MMBtu, as its “projected 2028 emissions divided by projected 2028 fuel use,” with 2028 emissions of 1,009.6 tons. That implies fuel use of about 3.9 trillion Btu a year, which is about half of what the boiler would burn at its maximum rating all year.71 Below is the calculation of the amount of additional caustic for the permitted limit of HCl (over and above that needed to treat the SO₂):

0.022 lb/MMBtu × 3,883,077 MMBtu × 1.097 = 93,714 lb/yr

This amount is incorporated into the corrected cost-effectiveness calculation later in this report.

5.4	Cost of Wet Scrubber on HFB2 with Corrected Caustic Charge and Other Corrected

Cost Inputs

As indicated above, it appears that Domtar’s annual caustic charge of $4,449,093 suffers from multiple errors and/or unreasonable choices in unit pricing and quantity assumptions. These are summarized below:

1) The LDX Solutions scrubber design did not account for the full bisulfite and sulfite reaction chemistry and is therefore very conservative in its assumed caustic requirement.

2) Domtar’s 2023 caustic unit price of $0.43/lb appears to be inflated in relation to its 2020 unit price of $0.16/lb, using the BLS PPI. Domtar’s 2023 caustic unit price of $0.43/lb also appears to be inflated in comparison to published pricing information.

3) Domtar wrongly applied a peak load scrubber design caustic loading rate continuously, greatly overinflating the amount of caustic actually needed to treat its annual SO₂ emissions.

4) Domtar appears to derive its annual caustic charge by applying a dry caustic price to a 50% solution, resulting in a doubling of that charge.

5) The additional caustic required to treat the permitted limit of HCl, which LDX’s caustic rate appears to leave out, is added.

Below is a summary of the effect of making the above noted corrections to the caustic pricing, as well as the retrofit factor to the default factor of 1, removing the sales taxes from which Domtar

would be exempt, and removing the new and unjustified fan, on the cost-effectiveness of installing a scrubber on HFB2:72

Table 4. Effect of Caustic Price, Retrofit Factor, and Fan on HFB2 Scrubber Cost-Effectiveness

2023 with

2023 with

Caustic

2023 with

Caustic

Adjustment,

Caustic

Adjustment,

No Sales

Adjustment

No Sales Tax

Tax, Retrofit

& No Sales

& Retrofit

Factor of 1.0

Tax

Factor of 1.0

& No Fan

Direct Costs (DC)

Purchased equipment costs

Equipment costs – wet scrubber	$3,995,000	$3,995,000	$3,995,000
Sales Tax	$0	$0	$0
Freight	$160,000	$160,000	$160,000

Total Purchased Equipment Costs

$4,155,000

$4,155,000

$4,155,000

(PEC)

Direct Installation Costs

Direct Installation Cost (0.85 x PEC)

$3,531,750

$3,531,750

$3,531,750

Installed cost for new fan

$3,000,000

$3,000,001

$0

Total Direct Costs

$10,686,750

$10,686,751

$7,686,750

Indirect Costs (IC)

Construction management	$142,000	$142,000	$142,000
Contractor fees (0.10 x PEC)	$415,500	$415,500	$415,500
Start-up (0.01 x PEC)	$41,550	$41,550	$41,550
Performance test (0.01 x PEC)	$41,550	$41,550	$41,550
Monitor re-certification (0.01 x PEC)
$41,550	$41,550	$41,550

Total indirect costs

$682,150

$682,150

$682,150

Contingencies (0.1 x DC + IC)	$1,136,890	$1,136,890	$836,890
Retrofit factor (0.3 x DC + IC +Cont.)	$3,751,737	$0	$0

Total Capital Investment (TCI)

$16,257,527

$12,505,791

$9,205,790

Operator Labor	$35,588	$35,588	$35,588
Supervisor Labor	$5,338	$5,338	$5,338
Maintenance Labor	$35,588	$35,588	$35,588
Maintenance Materials	$35,588	$35,588	$35,588
Electricity	$518,154	$518,154	$518,154
Chemicals	$799,144	$799,144	$799,144
Fresh Water Usage	$112,654	$112,654	$112,654
Wastewater Disposal	$14,330	$14,330	$14,330

Total Direct Annual Costs

$1,556,384

$1,556,384

$1,556,384

Indirect Annual Costs

Overhead (60% of labor & materials)	$67,261	$67,261	$67,261
General and admin (2% of TCI)	$325,151	$250,116	$184,116
Insurance (1% of TCI)	$162,575	$125,058	$92,058
Capital recovery (0.0867 x TCI)	$1,409,528	$1,084,252	$798,142

Total Indirect Annual Costs

$1,964,515

$1,526,687

$1,141,577

Total Annual Costs

$3,520,899

$3,083,071

$2,697,961

Cost-effectiveness

2028 SO2 Emissions (tons)	1,009.6	1,009.6	1,009.6
Removal efficiency	95.0%	95.0%	95.0%
Controlled SO2 Emissions (tons)	959.1	959.1	959.1

Cost-effectiveness ($/ton)

$3,671

$3,214

$2,813

As summarized above, just correcting for all of Domtar’s caustic pricing and quantity issues reduces the scrubber cost-effectiveness for HFB2 from the $7,519/ton from the facility’s analysis to $3,671/ton. Further correcting for Domtar’s undocumented retrofit factor improves the cost- effectiveness to $3,214/ton. Also correcting for Domtar’s undocumented fan further improves the cost-effectiveness to $2,813/ton. Any of these figures are very cost-effective.

Appendix A

EPA Regional Haze Documentation Requirements and History

EPA’s Regional Haze Rule contains extensive documentation requirements. These requirements are discussed below. In addition, EPA’s long history in enforcing these documentation requirements is also noted.

1	BART Guidelines Documentation Requirements

The BART Guidelines, which EPA must follow, requires that when performing a cost- effectiveness determination, “cost estimates should be based on the OAQPS Control Cost Manual, where possible.”73 EPA’s footnote at the end of this quote is particularly specific: You should include documentation for any additional information you used for the cost calculations, including any information supplied by vendors that affects your assumptions regarding purchased equipment costs, equipment life, replacement of major components, and any other element of the calculation that differs from the Control Cost Manual.”

The BART Guidelines provide for state discretion in many areas. However, such discretion is balanced by strict documentation requirements, as EPA states in its 2005 BART Rule, “The State’s discretion is subject as always to the condition that it must be reasonably exercised, and must be supported by adequate documentation of the analyses.”74 In fact, there are many other references throughout the BART Rule directing states to include adequate documentation for their assertions.

2	Reasonable Progress Documentation Requirements

Under Section 51.308(f), “the State must submit an implementation plan containing the following plan elements and supporting documentation for all required analyses,” and under Section 51.308(f)(2)(iii) the “[s]tate must document the technical basis, including modeling, monitoring, cost, engineering, and emissions information, on which the State is relying to determine the emission reduction measures that are necessary to make reasonable progress in each mandatory Class I Federal area it affects.”

In its 2017 revision to the Regional Haze Rule, EPA specifically emphasized the need for solid documentation:75

We are changing proposed 40 CFR 51.308(f)(2)(iv), regarding documentation requirements, … to “document the technical basis, including modeling, monitoring, cost, engineering, and emissions information, on which the State is relying to determine the emission reduction measures that are necessary to make reasonable progress in each mandatory Class I area it affects.” The purpose of this provision is to require states to document all of the information on which they rely to develop their long-term strategies, which will primarily be information

used to conduct the four-factor analysis. Therefore, in addition to modeling, monitoring and emissions information, we are making it explicit that states must also submit the cost and engineering information on which they are relying to evaluate the costs of compliance, the time necessary for compliance, the energy and non-air quality impacts of compliance and the remaining useful lives of sources.

The Regional Haze Guidance reinforces this point:76

As part of meeting the requirement of the Regional Haze Rule for the state to document the cost and engineering information on which the State is relying to determine the emission reduction measures that are necessary to make reasonable progress (40 CFR 51.308(f)(2)(iii)), every source-specific cost estimate used to support an analysis of control measures must be documented in the SIP. If information about a source has been asserted to be confidential, we recommend the state consult with its EPA Regional office regarding whether such confidentiality is appropriate and allowed under the CAA and if so how it can be reconciled with the need for adequate documentation of the basis for the SIP.

3	EPA Has a Long History of Requiring Proper Documentation

Throughout the Regional Haze Program, EPA has demonstrated that it recognizes these documentation requirements and has properly applied them. In fact, many SIP disapproval are rooted in a failure of the state to (1) adequately document various assertions made in SIPs, or (2) accepting cost estimated with known errors. Below are some of these examples:

•	Oklahoma. In December 2011, EPA disapproved Oklahoma’s SO2 BART determinations

for six electric generating units because the State “did not properly follow the requirements of section 51.308(e)(1)(ii)(A).” The core defect was Oklahoma’s reliance on utility cost estimates that departed from the Control Cost Manual’s methodology without adequate documentation.77 The Tenth Circuit upheld the disapproval, endorsing the EPA’s rejection of insufficiently documented cost estimates as reasoned decision making.78

•	North Dakota. In April 2012, EPA disapproved North Dakota’s NOx BART determination

for Coal Creek Station because it relied on a cost analysis containing acknowledged errors.79

•	Wyoming. In the predecessor to its present 2026 proposed action, EPA partially

disapproved Wyoming’s regional haze SIP in January 2014 because the State relied on cost estimates that did not adhere to the Control Cost Manual, without the documentation the

BART Guidelines require. In fact, EPA quoted the Guidelines’ documentation requirement on this as the governing test.80

•	Arkansas. In March 2012, EPA partially disapproved the 2008 Arkansas Regional Haze

SIP, because the underlying five-factor analyses were inadequately conducted and supported.81

•	Texas. In January 2016, EPA partially disapproved the Texas SIP for not adequately

addressing the reasonable progress and long-term strategy requirements, faulting, among other things, the State’s aggregated and inadequately supported cost analyses.82 It is acknowledged that the Fifth Circuit stayed that action and the disapproval was later vacated, but the fact remains that EPA itself articulated and applied the documentation requirement.

•	Utah. In July 2016, EPA disapproved Utah’s NOx BART alternative as being inadequately

demonstrated.83

•	California. In its proposal to partially disapprove the California SIP EPA stated, “the Plan

only included the emissions data and distance values for the sources that were selected. Therefore, it was not possible for the EPA or the public to verify the emissions and distance values for sources that were not selected.”84

North Carolina and EPA cannot ignore EPA’s long history of requiring proper documentation of Regional Haze SIPs. Any Regional Haze SIP submitted to EPA must conform to these documentation requirements. In reviewing SIPs, EPA itself must also follow these documentation requirements. North Carolina must revise its Domtar HFB2 cost-effectiveness analysis to conform with these documentation requirements.