United States Environmental Protection Agency

EPA100-K-00-001September 20001EPA

Office of Policy,Economics, andInnovation (1801)

2Printed on paper that contains at least 30 percent postconsumer fiber.

EncouragingInnovation,Delivering

Results

With Project XL, we sent an

important message that we

valued innovation in

environmental protection and,

above all, wanted results. We

opened the door for a

promising set of regulatory

experiments to begin.

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In 1995, EPA launched an unprecedented newprogram, known as Project XL to test innovativeideas that demonstrate environmental eXcellence

and Leadership by those who must comply withEPA regulations and policies. Basically, we said thisto all of our partners: If you have an idea that offersbetter environmental protection results than whatwould be achieved under current requirements, thenwe will work with you and other interested parties toput those ideas to the test. With this single action,we sent an important message that we valued inno-

vation inenvironmen-tal protec-tion and,above all,wantedresults. Weopened thedoor for apromisingset of regula-tory experi-ments tobegin.

For five years, these experiments have enabledour society to explore fundamentally new approachesto environmental protection. By working closely

with businesses,communities,states, andother govern-ment agencies,we have beenusing pilotprojects to testbold new ideasthat promisebetter resultsfor the future.

What ledEPA to makethis offer?Quite simply, astrong interest in accelerating environmentalprogress. Recognizing the growing complexity ofenvironmental problems looming before us, weseized the opportunity to modify certain constraintsand reduce some costs that could be associated withenvironmental regulations. We also understood thatothers had a great deal of insight and expertise thatshould be applied to environmental problem solving.

EPA Opens the Door forExperimentation

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Features of Project XL:Superior environmental protection

Cost savings and reduced paperwork

Stakeholder involvement

Innovation/pollution prevention

Transferability

Feasibility

Monitoring, reporting and evaluation

No shifting of risk burden

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From the beginning, Project XL has been one ofthe most challenging endeavors EPA has everundertaken. After all, we are a regulatory agency,

and with Project XL we are exploring better alternativesto our own regulations and policies. We were able toinitiate this program because we set high goals for supe-rior environmental performance and insisted on publicinvolvement in developing projects and public account-ability for results. And yet, not surprisingly, we faced

difficult issues in the earlystages. We wrestled withquestions like: “What kindof flexibility should beallowed? How do we define“better results”? What canwe do within the existinglaws? Who needs to beinvolved in the discussions?”By investigating these con-cerns, we learned a lot,made adjustments to theprogram, and found ways to

be more responsive to stakeholder needs. As a result,Project XL is now an active proving ground for newenvironmental solutions.

Today, EPA has experiments to improve environ-mental protection underway with a variety of partners:Fortune 500 companies, small businesses, and state andlocal governments. Each project is designed to produceimportant benefits for the sponsor, and indeed they aredoing so. Companies are cutting costs, communities aregetting priority concerns addressed, and regulatory agen-cies are finding ways to target their limited resourcesmore efficiently.

But, the intent was never to serve only a select few. Thegoal of Project XL continues to be much broader—to findsolutions that can be integrated into our environmentalprotection system for everyone’s benefit. Today, that goal isbeing achieved in two ways:

• First, by creating more options for environmentalmanagement. The United States has one of thestrongest systems of environmental protection in theworld, but it is neither perfect nor complete.Everyday, conditions are changing. New technologyis entering the market, better information is becom-ing available, and environmental professionals aregaining more understanding and experience in man-aging their responsibilities. These and other develop-ments mean the system must change too. Perhaps weneed to modify a regulation that inadvertently dis-courages facilities from pursuing environmentalimprovement, or maybe we see ways to make certainregulatory procedures more efficient. By giving spon-sors a chance to identify problems and potentialsolutions, Project XL provides a means for improv-ing the regulatory system that protects us all.

• Second, by taking a more comprehensive approachto environmental management. In the past, mostenvironmental problems have been approachedalmost entirely by media: Clean Air Act regulationsaddress air pollution; Clean Water Act regulationsfocus on improving water quality, etc. This approachhas some efficiencies and it has helped remedy obvi-ous problems. But it has not proven to be a com-plete solution, and in fact, serious problems havebeen left behind. By emphasizing more comprehen-sive, integrated approaches to environmental protec-tion, such as looking at facilities and communities asa whole, Project XL helps bridge this gap. It helps usto optimize environmental, community, and businessoutcomes by stepping back and considering all theissues affecting environmental quality.

This report highlights some of the promising innova-tions achieved through Project XL to date. EPA isencouraged by these preliminary results, and proud thatthey have come through partnership with others.

Project XL Delivers Results

P R O J E C T X L

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Project XL is providing a forum for companies totest new technologies and alternative regulatoryapproaches that eventually might be used by

more companies to boost efficiency and achieve betterenvironmental protection.

Making the Most of InnovativeTechnologies

Do you remember the prevalence and importance oftypewriters just 15 years ago? If so, you can probablyappreciate the speed at which new technologies can takehold and the boost they can provide in terms of efficien-cy. These same types of technological leaps that havemade typewriters virtually obsolete are taking place inthe environmental field, and they hold real promise forimproving environmental results.

Project XL provides a way to move state-of-the-artenvironmental technology from thefringes into the mainstream. It doesso by providing companies with theincentives they need to make therequisite testing and evaluationworth their time and investment. Ifa technology proves successful andthe results are made known, thenothers become more receptive to itsuse. Over time, this means bettertechnology getting better results fora growing number of people.

Georgia-Pacific Corporation.At its Big Island, Virginia pulp andpaper mill, George-Pacific is testinga new “gasification” technology tocontrol emissions of hazardous pol-lutants. One of the byproducts oftheir manufacturing is a “black liquor,” which containsa mix of chemicals used in pulp production. With con-ventional technology, these chemicals are recovered

through a process of evaporation and combustion.Preliminary testing shows the new gasification technolo-gy uses less energy and significantly lowers emissions ofhazardous pollutants. However, the Georgia-Pacific testis the first commercial-scale demonstration and there issome risk the technology may not work as well asexpected. So that testing of this promising new technol-ogy can proceed, EPA will temporarily exempt the com-pany from new hazardous waste emission requirementsthat are expected to become effective during the experi-ment.

The United States Postal Service. In Denver,Colorado, the U. S. Postal Service (USPS) is testing newtechnology to reduce air emissions from its fleet ofdelivery vehicles. This is being accomplished by replac-ing high-emission vehicles with newer alternative fuelvehicles that emit less air pollution. Along with replac-

ing more than 800 vehicles, USPSwill be encouraging the use of thesevehicles by others. They will do soby demonstrating their value and bydeveloping the infrastructure that isneeded to operate these vehicles.

Molex Incorporated. At itselectroplating facility in Lincoln,Nebraska, Molex is using new tech-nology to reduce the metal loadingsin its wastewater. The new technol-ogy separates the wastewaterstreams from individual metal plat-ing processes, enabling the compa-ny to recover different metal con-taminants, such as lead and copper,from its wastewater. Molex expectsthis new technology will reduce

metal loadings to the community’s wastewater treatmentplant by 50 percent.

Creating More Options forEnvironmental Management

P R O J E C T X L

Project XL provides

a way to move state-of-

the-art environmental

technology from

the fringes into the

mainstream.

International Business Machines (IBM)Incorporated. In Essex Junction, Vermont, IBM istesting another technology for reducing metal contami-nants in its waste stream. The new process, which isapproximately 30 to 40 percent more efficient than theprevious one, enables IBM to deposit a layer of metal onits wafers much more efficiently, maximizing metal usein manufacturing and minimizing releases into theplant’s wastewater system.

International Paper. At itspulp and paper plant in Jay, Maine,International Paper is testing newtechnology for monitoring air emis-sions. Under current EPA regula-tions, the company is required tomeasure specific pollutants in stackemissions once a year. But throughProject XL, International Paper isdeveloping and testing an alterna-tive monitoring system that willprovide the company and sur-rounding community with muchmore information about the facili-ty’s emissions. This will be accom-plished with a computer-based sys-tem that can accurately predict pol-lutant emissions on a continuousbasis. The results should enable mill

operators to identify opportunities to reduce emissionrates and prevent pollution from occurring in the firstplace. In addition, it will provide the surrounding com-munity with better information about emissions from thefacility.

Progressive Insurance Company. This nationalinsurance company is showing that “service” industriesalso have a role to play in advancing environmentaltechnology. Progressive Insurance proposed a uniquevoluntary program that will base automobile insurancerates, in part, on specific driving factors, such as mileageand time of travel, that affect emissions and ultimatelythe atmosphere. This new program is made possiblethrough the use of a global positioning system, which isinstalled in customers’ vehicles. Information is recordedby the device, and the company then sets its rate basedon the collected data. As a result, customers have anincentive to carefully consider the consequences—forthe environment and their own pocketbook—associatedwith their driving patterns.

Flexible Compliance WithEnvironmental Requirements

One criticism of federal environmental protectionefforts is that EPA’s regulatory requirements can be tooprescriptive. For years, EPA has heard: “Give us environ-mental goals to meet, but don’t tell us how to meetthem.” For the past decade, EPA has been buildinggreater flexibility into regulatory programs through trad-ing of emission “allowances” and other approaches.Through Project XL, EPA is providing companies andother project sponsors with additional opportunities todemonstrate their abilities to find innovative approachesto environmental protection. As the following examplesshow, we are finding that a little flexibility can go a longway toward getting better results.

Denton, Texas. Rather than spending its resourcesmonitoring and inspecting wastewater treatment facilitiesthat have excellent performance histories, officials inDenton requested regulatory flexibility to redirect theseresources to develop a comprehensive watershed protec-tion program. This approach will support site-specificwatershed protection activities, such as developing bufferzones along underdeveloped areas, that we expect willresult in better water quality.

Albuquerque, New Mexico. In an attempt toreduce pollution loadings at its wastewater treatmentplant, the City of Albuquerque proposed shiftingresources previously used for traditional industrial pre-treatment practices to an alternative method of monitor-ing and additional pollution prevention activities. Thiscost-effective approach focuses on preventing pollutionbefore it happens rather than treating it afterwards. Thegoal of this pilot is to reduce 13 pollutants by 10 percentto 20 percent over the life of the project.

New England University Laboratories. In theNortheast, a consortium of university laboratories pro-posed a new approach for managing hazardous wastes inlaboratory settings. The project enables laboratories tointegrate some EPA hazardous waste requirements withOccupational Safety and Health Administration (OSHA)standards for managing chemicals. This approach willlead to better management of the chemicals, whichshould help prevent pollution and improve worker andstudent safety.

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Project XL: Searching for Solutions

Despite strong environmental progress over thepast three decades, gaps in environmental pro-tection remain. Communities and facility own-

ers are considering how to address multiple environ-mental challenges and how to meet multiple objectives.To optimize environmental,community, and business out-comes it helps to step back andconsider all the issues affectingenvironmental quality. Thismeans looking at facilities andcommunities as a whole.

This more comprehensiveapproach to environmental man-agement is reflected in many ofthe projects being conductedunder Project XL. As the follow-ing examples show, communitiesand businesses alike are finding that a broader viewoften leads to better results.

Common Sense Strategies thatIntegrate Community Needs

Local communities play an increasingly importantrole in environmental and public health protection.Through Project XL we are seeing numerous ways tomeet federal and state standards while also addressinglocal priorities.

Atlantic Steel Redevelopment. In Atlanta,Georgia a unique public/private endeavor has the poten-tial to serve as a national model for creative environ-mental problem-solving. Real estate developers, neigh-borhood groups, the City of Atlanta, GeorgiaDepartment of Transportation, Georgia EnvironmentalProtection Division, and other government agencies, areworking toward redevelopment of a 138-acre steel site

formerly owned by Atlantic Steel. This project, pro-posed by Jacoby Development Corporation, includes amultimodal (automobile, pedestrian, bicycle, rail) bridgethat would cross and provide access ramps to the adja-cent highway as well as connect the site to a nearby

MARTA (mass transit) station.When the transportation ele-ments of this project were pro-posed, Atlanta was out of com-pliance with federal transporta-tion conformity requirements,and as a result, Atlanta was notallowed to use federal funds toadd to its highway system or toconstruct certain types of trans-portation projects that requirefederal approval, even if they arenot federally funded. This prohi-bition extended to the proposed

17th Street bridge (and associated highway ramps) fromthe former Atlantic Steel site to MARTA. EPA believesthat the combination of the site’s location in a centralurban area, connection to the existing transit system, adesign that promotes pedestrian access, participation ina Traffic Management Association, and provision ofbicycle and pedestrian conveniences will work togetherto reduce growth in automobile traffic in the Atlantaregion. This redevelopment project will demonstratethat the application of smart growth concepts can makea difference in travel patterns.

Chicago Development Zones. In Chicago, Illinoisanother innovative solution has been crafted to addressair quality concerns. Under a section of the Clean AirAct that has never before been implemented, officials arecreating “development zones” that create incentives fordevelopment in targeted areas. This regional approachrequires the state to track emissions reductions by

Taking A More ComprehensiveApproach to Environmental

Management

P R O J E C T X L

Communities and businesses

alike are finding that a more

comprehensive view often leads

to better results.

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municipalities in the Chicago area.These reductions will be used to cre-ate an emissions growth allowance.Businesses locating in the develop-ment zones would draw upon thegrowth allowance and avoid theexpense of having to purchase emis-sions “offsets” elsewhere. This pro-vides obvious economic benefits for

business, but it provides other important regional benefitsas well. This sort of development targeting will rejuvenatecity neighborhoods and reduce sprawl and the traffic and

automobile emissions that come with it. This project issignificant also because of the emphasis being placed onmobile and area source emissions, such as lawn mowersand small incinerators. This is important given that thesesources account for about 80 percent of emissions overall.

Lead Safe Boston. In Boston, Massachusetts a feder-ally funded program that removes lead from residentialhomes and apartments asked for approval to use lessexpensive method for handling and disposing of lead-based paint debris. Massachusetts and EPA regulationscurrently require extensive lead testing on architecturaldebris and disposal in costly hazardous waste landfills.

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Project XL: Searching for Solutions

One of the most significant examples of how companiesare taking a more comprehensive approach to environ-mental management is the use of facility-wide emissionscaps. Under the Clean Air Act, companies must obtainpermit approvals from EPA and delegated state agencieswhenever they make an equipment or process changethat significantly increases their emissions. Each processor type of equipment may have its own permit require-ments, yet some industries require changes frequently tokeep up with new technological developments and cus-tomer demands. The paperwork and time required forthese approvals can be costly, both for the companiesand the government agencies charged with permitreview.

Some companies have developed projects under ProjectXL to make the permitting process more efficient andpredictable for their quick-to-market manufacturingneeds. These projects are based on facility-wide airemission caps, which prevent the facility from increasingits emissions, but allow process or equipment changeswithout regulatory approval. Under this approach, facili-ties must offset any emission increases with a reductionsomewhere else within the facility. EPA generally setsthe cap below the facility’s regulatory threshold for com-pliance, thus ensuring that the project achieves betterenvironmental results than would otherwise be achievedunder current regulatory requirements.

Intel Corporation EPA and the Arizona Departmentof Environmental Quality approved a facility-wide emis-sions cap for Intel’s semiconductor manufacturing plantin Chandler, Arizona. The new limits allow Intel to makeequipment and process changes and to expand produc-tion capacity, without regulatory reviews, as long as thetotal emissions stay below the specified cap. Since the

project began, the company has remained well under itsemission limits for all applicable pollutants. Intel also hasavoided millions of dollars in production delays by elimi-nating 30 to 50 new source permit reviews a year. Thecompany has found the emission caps so successful thatit will invest $2 billion to build a new wafer fabricationfacility (Fab 22) at the site. Under the existing cap, Intelcan proceed with expansion without first going throughregulatory review. In announcing this decision, Intelnoted that “the new facility will help us maintain ourleadership in the extremely competitive world of semi-conductors. Fab 22 will give us more manufacturingcapacity in order to help us better address our cus-tomers’ growing need for high-performance micro-processors.”

Merck & Company In a move similar to that of theIntel project, EPA and the Virginia Department ofEnvironmental Quality created a facility-wide emissionscap for Merck’s Stonewall pharmaceutical manufactur-ing plant in Elkton, Virgina. Developed under a Clean AirAct permit that prevents significant deterioration of airquality, Merck’s cap also eliminates regulatory review forequipment or process changes as long as the facility’semissions stay below the specified cap. With thisapproach, Merck is reducing the plant’s total emissionsof criteria air pollutants by 20 percent, sulfur dioxideemissions by 25 percent, and nitrogen oxide emissions by10 percent, thus ensuring better environmental results. Inaddition, Merck will have flexibility under future regula-tions to lower its cap instead of implementing specificcontrol technologies that might be required for otherfacilities. Merck expects that reducing permit reviewsand potentially avoiding new technology investments willsave the company millions of dollars.

Companies Test Facility-wide Emission Caps

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Project XL: Searching for Solutions

But Lead Safe Boston saw a more cost-effective option ofusing a household hazardous waste exception that allowssuch debris to be disposed of in a municipal solid wastelandfill that meets certain performance criteria. Throughthis action, Lead Safe Boston expects to substantiallyreduce disposal costs. This will enable them to removelead from more homes and protect up to 30 more chil-dren from lead exposure. But these benefits will extendmuch more broadly. As a result of the Lead Safe Bostonproject, a new policy issued by EPA this summer allowsresidential lead debris to be disposed in municipal land-fills, thus enabling contractors across the country to per-form lead abatement more quickly and cost-effectively.

Offering Businesses Incentivesto Improve EnvironmentalPerformance

What really drives businesses to improve environmen-tal performance at a manufacturing facility? Is it grantingregulatory flexibility to businesses that demonstratestrong performance? Maybe, but perhaps there are otherincentives that are equally or more important. Project XLis enabling EPA to understand the priorities that moti-vate companies to stronger environmental stewardship.Often we must consider an operation in full to find cre-ative solutions that get better environmental and eco-nomic results.

Crompton (formerly CK Witco). A strong interestin getting better results and lowering costs led Cromptonto take a more comprehensive approach to environmen-tal management at its chemical manufacturing facility inSistersville, West Virginia. To start, the companylaunched a facility-wide waste management and pollu-tion prevention study. Employees identified and charac-terized all plant wastes and emissions, identified and pri-oritized pollution prevention opportunities, and devel-oped plans to implement the most feasible options forimproving environmental management. An internal pol-lution prevention council was organized to select the

most promising opportunities and to pursue and moni-tor progress. In all, more than 350 pollution preventionopportunities were identified, and more than 60 wasteminimization or pollution prevention projects are beingimplemented. This action, along with other environmen-tally-beneficial projects, earned the company regulatoryflexibility in complyingwith new air emissionregulations. Rather thancontrol air emissionsfrom the facility’s haz-ardous waste impound-ments, the companyfound a more cost-effec-tive alternative. They arecutting their emissions byinstalling new air pollu-tion control equipmenton production units wellahead of the date required.

Andersen Corporation. In Bayport, Minnesota,EPA and the Minnesota Pollution Control Agencysigned an agreement with one of the nation’s largestmanufacturers of windows and doors to test an alterna-tive permit that includes incentives for lowering emis-sions of volatile organic compounds. This novelapproach involves an emissions cap and a performance-based ratio that links the facility’s emissions and produc-tion capacity. It is intended to “lock-in” existing manu-facturing methods and processes that have grown moreefficient over the years while encouraging continuedimprovement. By continuously improving its efficiency,Andersen gains the flexibility to increase its productionwithout sparking regulatory review. This approach rep-resents a break from traditional permitting, whichimposes penalties for failure to comply with require-ments, but often does not provide incentives to performbetter than required.

The experiments being conducted under Project XL are in various stages: some are just getting started; othersare in their second or third year. So, what are the key lessons we’ve learned from this unique program, todate? There are many, but here are some of the most important:

Key Lessons Learned

P R O J E C T X L

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• It is possible to experiment with new approaches out-side the traditional regulatory arena as long as youput strong, reliable safeguards in place.

• Some businesses and communities are not only will-ing, but eager, to take greater responsibility for envi-ronmental results if they are given flexibility in meet-ing the goals.

• If given an opportunity, citizens and other stakehold-ers can play an active, creative role in finding solu-tions to problems.

• The opportunities to improve become more visible,and the results potentially more significant, when youstep back and look at a community or facility as awhole, rather than as a set of separate, unrelated com-ponents.

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As a national laboratory for testing new ideas inenvironmental protection, Project XL isunprecedented.

Predictably for an experimentalprogram, it has experiencedsome conflict and controversy.But it also has brought impor-tant new discoveries and insightsabout ways to improve environ-mental results.

With experiments nowunderway, we are carefullywatching the results. This is animportant step if we are toprogress toward our ultimategoal—scaling up successful con-cepts and approaches for broad-er application. We know that inorder for these experiments to realize their true poten-tial, we must use what we learn to make improvementsin our national programs. In some cases, existing poli-

cies and regulations may have to be adapted to reflectmore up-to-date knowledge and technology.

We believe that the type ofexperimentation allowed underProject XL is fundamental tocontinued advances in environ-mental protection. Indeed, webelieve that sustaining our strongnational legacy of environmentalprogress depends on innova-tion—at EPA, in state environ-mental programs, in local gov-ernments, in businesses, in com-munities—in all parts of oursociety. That is why EPAlaunched Project XL, and it iswhy we will continue supportingand encouraging those that are

willing to search for a better way of achieving environ-mental goals.

Building On a Legacy of Environmental Progress

P R O J E C T X L

For more information on Project XL, go to the

website at www.epa.gov/projectxl.

We believe that sustaining our

strong national legacy of

environmental progress

depends on innovation in all

parts of our society.

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